Theranos Whistleblower: Erika Cheung—A Woman Who Wouldn’t Give In

THERANOS, A UNICORN FROM SILICON VALLEY

In the mid-2010s, the world was blown away by a certain innovative startup—a true disruptor one might say. One company promised to revolutionize blood testing practices: down with venous draws tested in large laboratories and up with finger pricks of blood tested in one small machine. We all have heard about
this company—its name: Theranos. Founded in 2003 by 19-year-old Stanford dropout Elizabeth Holmes, Theranos raised $700 million from VCs and private investors and was valued at around $10 billion at its peak, making it one of the Silicon Valley unicorns.The goals must have been lofty at the beginning, no one doubted that, but it seems that the ethics of the company got lost somewhere along the way. 

THE COMPANY’S NEW BLOOD

Several months before Elizabeth Holmes and her company appeared on the covers of major world-recognized magazines, Erika Cheung joined the team. Back then, she was a UC Berkeley graduate with a bachelor’s in Linguistics as well as Molecular and Cell Biology. Erika went to a career fair at the campus and got
an interview with Theranos, a startup that at the time wasn’t quite as talked about. Coming from a financially challenged family, Erika saw that the company might just be a significant game-changer
in the field of health care, which in the USA is often too expensive for some citizens, and thrilled jumped at the occasion. 

Her experience at Theranos, however, was less than perfect, to say the least. At the company, Erika Cheung was working as an entry-level associate in the laboratory and she was responsible for data review, confirming whether the Theranos machine would produce expected results or not. She later was asked to run clinical tests, that is the test for patients and not on previously prepared artificial samples, and it so happened that the machine would give different results each time. Naturally, Erika raised the issue with her supervisors, including the company’s COO Ramesh “Sunny” Balwani, to only get the response that she should do only what she was paid for (running tests) and not question the effectiveness of the machine. She eventually contacted her good colleague Tyler Schultz. The two then arranged a meeting with a Theranos board member, former Secretary of State, and Tyler's grandfather George Schultz. Unfortunately, the efforts
once again proved futile.

BECOMING A WHISTLEBLOWER

Erika Cheung was facing quite a dilemma: what to do when her own morals didn’t align with the company’s actions? She wasn’t exactly swimming in money in her childhood and at Theranos she was making quite a buck. She was doubting herself—how could this be that she was one of the very few people who saw that something was wrong? Nonetheless, she wasn't comfortable with gambling with the health of patients and so she resigned. She hoped that losing her job was the end of her involvement in the company. No such luck. Theranos attempted several times to intimidate her. Fortunately, Erika Cheung wouldn't give in and so she decided to write a letter to the US regulators and unveil the shameful practices of the company.

BRINGING A SHADY BUSINESS TO LIGHT

Informing your supervisors and authorities is one thing, but what about the public? We would probably never have heard about the Theranos scandal if it wasn't for John Carreyrou, an investigative journalist for The Wall Street Journal. He contacted the whistleblowers and published an article unveiling the truth behind the highly praised unicorn.  John Carreyrou later published the book Bad Blood: Secrets and Lies in a Silicon Valley Startup on the rise and fall of Holmes' company. He continues to cover the story on his podcast Bad Blood: The Final Chapter.

IMPLEMENTING ETHICS IN ENTREPRENEURSHIP

Having left Theranos, whistleblower Erika Cheung went on to help launch a technology accelerator in Hong Kong supporting early-stage technology investments across the Asia-Pacific (APAC) region. With all
her experience, she realized that there’s a gap in service—a lot of technologists were not trained on ethics. Thus, Erika co-founded Ethics in Entrepreneurship, a nonprofit organization with the mission to embed ethical questioning, culture, and systems in startup ecosystems worldwide.

ETHICS COVERED AT INFOSHARE 2021

This is but the taste of Erika Cheung’s story. Do you want to know more about it? Join us at Infoshare 2021 (AmberExpo, Gdansk, October 14-15), where Erika herself will speak about her experience with Theranos and ethics in business. Register here.