There Was A Second Theranos-Style Scandal (Involving Poop)
Every Silicon Valley success sparks imitators and Theranos was no exception, although in their case it was more of a copycat crime. Like Theranos, Ubiome was a hot health tech startup that raised millions in VC funding. While Theranos was going to revolutionize blood testing, Ubiome promised to do the same for fecal testing with an affordable at-home test that would check your gut health. But after Theranos collapsed, the "Theranos of poop-testing" turned out to be the ... Theranos of poop-testing. In that they were both weird scams.
While Theranos was just faking their tech and dumping all your blood down a Starbucks toilet, Ubiome was secretly billing customers' insurance providers up to five times for the same shitty test. And we mean "shitty" in multiple ways there, since the tests often had no medical value for patients. You'd be better off taking a jar of your shit to Gwyneth Paltrow's unlicensed fecal psychic. She might start rambling about Buddha's secret stool softener, but at least she'd only charge once for it.
Because insurance companies require tests to be ordered by a doctor, Ubiome hired an in-house team of doctors who were instructed to approve all tests, regardless of whether they were medically useful. At least one doctor was fired for not rubber-stamping tests fast enough. Meanwhile, the company was using stock photos in their "testimonials," as well as a bunch of other shady advertising tactics. When insurance companies began rejecting their claims, they started only informing investors of "billable" claims rather than approved ones, making growth look rapid. It's like a restaurant claiming to have thousands of customers, even though everyone immediately spat out the food and ran out without paying.
UbiomeWell at least their slogans don't sound like something a supervillain would say.
The Theranos comparisons don't stop there. Founders Jessica Richman and Zac Apte were secretly in a relationship, like Theranos founders Elizabeth Holmes and Sunny Balwani. Richman also had a bunch of weird, Holmes-like personal quirks, including lying about her age to get on "founders under 30" lists (she was 45) and claiming without evidence to have been a former bodybuilder, which is a crime usually reserved for very horny men trying to bring a bottle of champagne into LA Fitness. (Quite unsurprisingly, the FBI raided the place in 2019, launching a major investigation.)
Data Security Firms Mostly Just Pay Off Your Hackers
Businesses and governments face a growing problem with ransomware attacks, in which hackers encrypt data or block access to crucial systems and then demand a ransom to fix the problem. Luckily, data recovery firms like Proven Data and MonsterCloud are here to help. These "ransomware experts" promise to decrypt files quickly and effectively. In return, they charge a hefty fee, usually larger than the actual ransom. But customers were understandably willing to pay a little more to resolve the situation the "right" way, without making some shady deal with the criminals. Except that Proven Data and MonsterCloud would just pay the ransom and keep the rest of the money.
This is a huge problem in cybersecurity. One researcher secretly created his own ransomware and sent requests for help to a number of security firms. They all claimed to be experts in decrypting that particular ransomware and then quietly inquired about paying the ransom. It's apparently pretty easy money. Only one of Proven Data's founders had an IT background, and he rarely showed up for work because he was more focused on his side gig as a DJ. It's very dispiriting to hire an elite tech expert to battle hackers, only to later see him being thrown out of Steve Aoki's party bus for doing too many whip-its and trying to eat an MTV Award.
Lassedesignen/ShutterstockA crowd of undercover cybersecurity agents.