Companies aiming for high valuations like Theranos may face several obstacles. Firstly, they may struggle with maintaining transparency while protecting trade secrets. Secondly, they may face scrutiny from regulators and third-party evaluators. Lastly, they may encounter challenges in managing rapid growth and high expectations. To overcome these, companies should prioritize transparency and open communication with stakeholders. They should also ensure they have robust compliance and governance structures in place. Lastly, they should manage growth carefully, ensuring they have the resources and capabilities to deliver on their promises.

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The story of Theranos challenges existing paradigms and practices in corporate governance in several ways. Firstly, it highlights the importance of transparency and accountability in businesses. Theranos was able to mislead investors and the public about its technology due to a lack of transparency. Secondly, it underscores the need for a strong and independent board of directors who can provide effective oversight and challenge management decisions. In Theranos' case, the board was largely composed of big names who lacked experience in the healthcare sector. Lastly, it raises questions about the role of auditors and regulators in detecting and preventing corporate fraud. Despite numerous red flags, Theranos was able to operate for years without being detected.

Publicity played a significant role in the rise of Theranos. The company's CEO, Elizabeth Holmes, was featured in several high-profile media outlets, including Fortune, Forbes, USA Today, Fox Business, and NPR. These appearances significantly raised her public profile and made her the face of Theranos. This publicity helped to increase the company's valuation to $9 billion. However, the same publicity also played a role in the company's downfall. When the truth about the company's fraudulent practices came to light, the extensive publicity Theranos and Holmes had received amplified the negative impact, leading to a swift and dramatic fall.

The lessons from the Theranos scandal can be applied in today's business environment in several ways. Firstly, it underscores the importance of transparency in business operations. Companies should be open about their capabilities and not make false claims about their products or services. Secondly, it highlights the need for proper corporate governance. Companies should have checks and balances in place to prevent fraudulent activities. Lastly, it emphasizes the need for due diligence by investors. Investors should thoroughly investigate a company before investing, including verifying claims about the company's technology and potential.

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Bad Blood

Learn why and how a $9 billion dollar company vanished in a few weeks. The story of Theranos is the...

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