Silicon Valley medical company Theranos is closing all of its clinical labs and wellness centers. The company’s founder Elizabeth Holmes, who was once called the world’s youngest woman billionaire, published an open letter explaining the closures and layoffs by saying the company is headed in a new direction.
That new direction is a more product-based approach, focusing on the Theranos miniLab platform, a small blood testing device. Previously, the company had focused on providing inexpensive and convenient blood testing services at its locations. But Theranos has faced some federal investigations and heavy sanctions due to questions about its products and services. So focusing on products instead of services would allow Holmes to keep running the company even if she’s banned from owning or operating labs for the next two years.
Essentially, it seems that Theranos tried to do something that no other medical company was able to do — provide truly inexpensive and convenient blood tests. But that may have come at the expense of things like quality and accuracy. And now the company is having to make changes because of that.
The Danger of Sacrificing Quality for Price and Convenience
Providing convenient and inexpensive services to consumers is an admirable goal for any business. But you have to be sure you’re doing it the right way and not sacrificing quality for price and convenience in the process. You don’t want to eventually have to change up your entire business model because of sanctions and other business problems down the road.