June, 2018

Bad Blood: Secrets and Lies in a Silicon Valley Startup

As I got stuck into this astonishing story about a Silicon Valley company that was going to change medicine forever, but didn’t, I was instantly thinking, “Someone really needs to make a film about this!”

Well, it turns out they are, with Jennifer Lawrence slated to play Elizabeth Holmes, the CEO of Theranos, the company this book looks at in forensic detail.

But let’s take a step back. I think lots of people will be well aware of the Theranos story, it’s rise and fall. But many more may not be. While the company’s CEO, Elizabeth Holmes, became very famous in Silicon Valley, I’m not sure that was true more widely, and certainly not beyond US shores.

Theranos was a unicorn company; a startup that quickly became valued at over $1B. Their big idea was that they had a machine that allowed people to have blood tests, using just a finger pin-prick’s worth of blood. From that, many tests – upwards of 200 – could be run. This would revolutionise medicine. People who needed to, could closely monitor their blood. Diseases would be caught early. The machine would be so portable that it be used in placed regular lab tests couldn’t, like military front lines.

The major problem was that the machine didn’t really work. Building medical kit takes lots of R&D, and lots of time. But Theranos was not willing to wait. It was rushing to market, trying to sell machines to clients before the technology was ready. Meanwhile Holmes herself became famous, adopting the traits of her hero Steve Jobs, and getting cover stories on some of the biggest magazines following Silicon Valley.

Behind the scenes, as John Carreyrou reveals in this fascinating book, things were not great. There was a massive turnover of staff in the laboratories where they were trying to make things work. If you raised problems with management, you would be considered the problem, and you’d probably get fired.

It ended up cultivating a company of yes men. Sunny Balwani, the company’s number two for many years, was a particular tyrant. He had a temper on him, and had a trigger finger when it came to firing people. More problemmatical was his lack of technical understanding of what they were trying to do. He was also in a relationship with Holmes, something they tried to keep secret.

Carreyrou, who broke the story in the Wall Street Journal, tells the story behind the story fantastically well. It’s almost like a thriller that you can’t put down. Theranos was obsessed with secrecy; partly because they didn’t want competitors to learn what they were doing, and partly because they didn’t want others to know how badly they were doing it. Employees were served with draconian non-disclosure agreements and legal threats when they left, and when it began to emerge that some people were talking to Carreyrou, Theranos hired the most aggressive lawyer they could. They intimidated those speaking out, and almost certainly putting lots of people under constant surveillance.

Meanwhile Theranos had managed to gather together an astonishingly high-profile board that included Henry Kissinger and George Schultz. Holmes seemed to have an ability to wow these people with her drive and determination. In one of the sadder aspects of the story, when Schultz’s own grandson, who did some work for the company, saw it’s true colours, he was unable to persuade his grandfather. Schultz senior was more willing to believe Holmes than he was his own kin.

Holmes even managed to get $125m out of Rupert Murdoch – his biggest single personal investment. Entertainingly, when Holmes realised that Theranos was being investigated by the Wall Street Journal (proprietor R Murdoch), she tried to persuade Murdoch to intervene. To his credit, he would not. He ended up losing all $125m.

This is a story of secrets and lies. But it’s also a story of some of the gung-ho Silicon Valley attitude being adopted in sphere where there are real world dangers. If your blood tests aren’t accurate then you run the real risk of either not having something diagnosed, or believing that you are healthier than you truly are. It’s one thing if some software like an app doesn’t work straight away – that can be fixed later, or patched. You might just end up with annoyed customers. But health is different. I do wonder sometimes, if we face similar issues with self-driving cars. It’ll be one to watch.

Highly recommended, and I can’t wait for the film!

Dimanche à Vélo

Dimanche à vélo from Adam Bowie on Vimeo.

From last Sunday, trying out a different way to mount my Garmin Virb Ultra 30. I’m not completely convinced that I wouldn’t be better off with a high end GoPro rather than this, although it does let you add data overlays to video very easily. Inevitably, the experimenting also means playing with output settings of Premier Pro CC and seeing how they play with Vimeo. I tend to use 2.7k as I can still get some in-camera stabilisation if I use that. But it still seems to struggle with skies.

The music comes from the soundtrack to a film called Les Gants blancs du diable. The track appears on the recently released compilation album, Paris in the Spring compiled by Bob Stanley and Pete Wiggs of St Etienne. This in turn I learnt of via the Bigmouth podcast. Invariably, you can’t go wrong with a bit of 60s French pop as you’ll know if you’ve watched any of my other videos. But now I need to explore some of the other albums Bob and Pete have collated (NB. They don’t seem to appear on services like Google Play Music or Spotify. So you may have to, you know, actually buy them!)

Premier League Football Rights – Addendum

Four months after the winners of the main TV packages for the 2019-2022 Premier League domestic football rights were announced, the final two packages have now finally been sold with Amazon and BT picking up the “remnants.”

First a reminder that previously Sky and BT essentially maintained the status quo in this rights period, while managing their costs. Cumulatively they were paying around £600m over three seasons less than they had previously, with the proviso that the final two packages remained unsold.

Why didn’t those two packages get sold first time around? Essentially, the Premier League’s reserve price was not met. That wasn’t surprising since the packages were poorly conceived, offering multiple matches on a single date meaning that one broadcaster couldn’t maximise the number of potential viewers. Yes, digital technology means that viewers can select what they watch – as we see during early rounds of European club competitions – but they offer a limited number of viewing opportunities.

While the packages haven’t been enormously tweaked since those reserves weren’t met, there is one noticeable change in the new format.

BT has bought Package G which is now 15 fixtures from two midweek fixture programmes, and five matches from the “split weekend.” The “split weekend” is a single weekend’s worth of fixtures spread over two consecutive weekends allowing for a short mid-winter break in upcoming seasons. In effect 10 teams will get a ‘bye’ one weekend, and the other teams the following weekend. That allows for the thick end of two weeks’ break for players of any given club. But it also means that viewers get football every weekend during the “break.”

BT’s five fixtures from that split weekend won’t be simultaneous, so they get a decent bite of the cherry with them. The other 15 fixtures are more complicated. Assuming that midweek fixtures are spread over two nights – Wednesday and Thursday – it means BT would be looking at 3-4 games per night during those midweek rounds. The issue here is that a viewer can really only watch one of those games, assuming the Premier League doesn’t start having kick-offs at 6pm as per the Europa League. Furthermore, some of those games will be ‘unattractive’ to mainstream viewers and therefore unlikely to have been TV picks previously.

BT is paying £90 for these 20 games – or £4.5m a game. That’s significantly down on the £9.2m a game it was paying for its other package. But it bolsters BT’s Premier League offering, enabling it to promote 52 rather than 32 fixtures, so it makes some sense.

Amazon is more complicated. I have not seen any reports on how much Amazon has spent, but it would surely be much less than the £90m BT is spending, since it has bought Package F, with games from one Bank Holiday and one midweek rond.

While the Bank Holiday games could be spread out into as many as four time periods – e.g. kick-offs at 12pm, 3pm 5:30pm and 8pm – a further six games from the round would be played simultaneously with other fixtures. And even the most die-hard fan is unlikely to stay glued to their sofas for four consecutive matches.

With the midweek round, it’s again hard to see how a viewer can see more than two fixtures – one on Tuesday and one on Wednesday. The remainder will need to be played simultaneously.

In both cases, some less glamorous games will be included, so the rights fee should be lower – in the £50-60m range I would guess. That leaves the Premier League with perhaps £450m less over three seasons than previously.

As I said previously, when I mused on Amazon buying rights, I could envisage a sales push from Amazon with something like: “Buy a Fire TV stick this Christmas and get free access to Boxing Day football – only with Amazon.”

But this is a marketing challenge for Amazon. They have games on only three dates within the season. So they’re going to have to spend a lot on advertising to reach viewers for such a short period.

The Premier League was desperate to get a digital player like Amazon on board, because since there’s no obvious competitor to Sky or BT right now, they need deep-pocketed global players like Amazon to come in and shake things up (aka spend even more cash!). But if Amazon bid for the bigger packages, they didn’t go high enough, and global operators like them or Facebook really want global rights. Given the value of Premier League football, it’s probably still a better business model for the league to sell rights on a territory by territory basis. Sum of the parts is worth more than an Amazon whole.

That may not remain the case forever, but aside from the prestige in owning the rights, there has to be a business model where it makes sense for Amazon or another digital giant to buy these rights. And I’ve struggled to find one. That said, Facebook did bid for Indian Premier League rights. They didn’t win, but those rights might make more sense since India is probably still a growth market for Facebook. Is there anyone left in the UK who might use Facebook that isn’t using it? (It’s true that post Cambridge Analytica, a bigger issue for Facebook in the future might be retention of some of those users.)

I’m certain that next time around, we’ll get a different set of TV packages that makes more sense to more broadcasters and digital operators. I’ve argued all the way along that these were badly formulated and indeed were a misreading on the Premier League’s behalf.

I will be interested to see who gets mobile goal flash digital rights since those are yet to be allocated and might indeed be of value to a new player.

The Premier League probably looks jealously at the way the NFL can sell the same rights to multiple platforms. For example, Thursday night games next season will air on Fox TV, the NFL’s own NFL Network (which gets cross promotional branding on Fox), and Amazon who have renewed a previous deal. Now Amazon is reported to have spent perhaps $50m for the 2017 rights, so pocket change in the scheme of things, but it’s amazing that the NFL can sell the same games multiple times.

The NFL also repackages other games that it has “already sold.” While Sunday afternoon rights holders like CBS and Fox cover games in multiple territories, adhering to complicated rules about which fixtures have to be covered in which “local” market, nearly all the games are available to subscribers of DirecTV’s Sunday Ticket package. DirecTV obviously pays healthily for these rights – as do its subscribers.

Beyond that, NFL Network also offers Redzone (viewable in the UK on Sky Sports), which is ad-free coverage of all the afternoon’s fixtures, hopping from game to game as teams get closer to scoring. While the NFL owns NFL Network itself, it’s still effectively redirecting some viewers away from networks like CBS and Fox to its own network, where viewers are not exposed to those networks’ ads!

In some ways it’s remarkable that the NFL is able to do this, but American football is an in-demand product, and networks need it on their schedules. I’m sure that the Premier League would love to do something similar.

Trigger’s Broom

There’s a great gag from an episode of Only Fools and Horses where street sweeper Trigger has been rewarded by his local council for using the same broom for 20 years.

“This old broom has had 17 new heads and 14 new handles in its time.”

This is actually an example of Theseus’s paradox, a thought experiment about an object – in this case a ship – that has had all its part replaced over time.

I bring this up because my Brompton bicycle has been in for major repairs. There were small cracks on the frame and the main frame assembly needed replacing. For those who don’t know, Bromptons are folding bikes, and their frames come in several parts. A few years ago I also had to replace the rear assembly.

Other parts that I’ve replaced over time include the seatpost, the saddle, both the cranks, the pedals, the chain, the mudguards, the handlebar grips, the tyres, and one wheel. Assorted other consumables have also been replaced.

At this point, the only original parts on my 8 year old bike are the fork, the handlebars, the brakes and gear changers, one wheel (which has been completely rebuilt) and the handlebar stem. So do I have a new bike or can this still be said to be the same one?

I’d argue that it is, the same, and in this instance, there are still original parts. But the nature of Bromptons means that even those remaining parts could be replaced in due course. I must admit, that having borrowed a newer model while mine was being repaired (a nice service that Brompton Junction in Covent Garden offers) I’m very tempted by the newer shifters and brake levers you can get today. But that’s for another day.

[One sidenote was that Brompton has changed the shade of red they use for their bikes in recent years. My bike was all red, and now it’s a little two-tone red. It’s not massively noticeable, but it’s there. I could have gone for another funky colour, but I couldn’t really think of something that would have worked with the remaining red parts.]