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A Conversation with Elizabeth Holmes at MPW Next Gen

December 18, 2019 21:54 PM UTC
- Updated February 18, 2020 16:09 PM UTC

Fortune's Pattie Sellers sits down with Elizabeth Holmes of Theranos to discuss the future of the company.

Transcript
So it's one of the most essential tools in medicine the blood test. But the procedure is unpleasant, inconvenient, expensive and old. It's been done the same way since the 19 sixties. The key diagnostic tool was ripe for disruption and next generation makeover, so to speak. And that's just what our next guest is doing with Sarah knows the revolutionary company she founded with Stanford tuition money after dropping out at age 19 we got a glimpse of her mission and motivation at the most powerful women summit a couple months ago, and we're so excited to learn more today as she joins fortunes. Patty Sellers for our final conversation, Please join Patty and the founder of and CEO of Sarah Knows Elizabeth holds. No, this is incredibly exciting. For several reasons, I had basically never heard of Elizabeth Holmes until we did this in jail. This CEO is out for blood, and we did not discover, but we were the first to put on the cover and write a major story about this amazing woman next to May. Before we talk about what Elizabeth Holmes has done and what Baroness is, we have a little announcement. Very cool thing. Um, Elizabeth is getting an honor that is actually being announced officially tomorrow. But Elizabeth is getting the Horatio Alger Award. He is the youngest person to ever get the Horatio Alger Award since the Horatio Alger Award was invented in 1947 in 1947. So, Elizabeth, big deal. Why is it a big deal to you? I appreciate that. It's a really big deal to me because it's an opportunity to connect with so many young people officially in classrooms across the country and especially with my background. I'm little girls who I'm here. A lot of people come in and talk to them, but maybe don't get to hear from. I consider myself young women who have, uh, really pursued science and engineering and business and have the opportunity to talk with them about what's possible and what we can do and the pursuit of excellence in science and engineering especially. And that yes, that's something that's cool, and something that they can excel in and share a little bit of. Of my experience as a little girl growing up in this country. Now I'm and and what what we what? We have the privilege of being able to do in this country. So, Elizabeth, before you go on, I think it's important to tell this crowd what you do and what you have done. This is Elizabeth second public live interview. The first was at the most powerful women's summit in October. So, Elizabeth, what have you done and what is there a nose? And I'd like you to explain. It may be the way you'll you'll explain it to those young girls as you travel the country talking with elementary school students. Okay, that's it. You know, if I'm if you look the word diagnosed up in the dictionary, it says to determine the onset of disease from its signs and symptoms. So you're figuring out that someone sick by the fact that they have a symptom you're figuring out someone has cancer by the fact they have a tumor in them. But that's too late in the disease progression process. To be able to do something about it and Sarah knows, means detecting the onset of disease in time for therapy to be expect. So being able to see the onset of disease in time to be able to do something about it, and we spent a lot of time thinking about that, thinking about how could we help to create a world in which people don't have to say goodbye too soon and fundamentally got into laboratory testing? Because lab data drive 80% of clinical decision making in the context of how position is able to take care of a person. And if you can make lab Dita accessible really early in the disease progression process, so you're not figuring out that you're already really, really sick, then you can begin to make it possible to intervene in time to do something about it. So our work is in making lab data accessible. And we've done that by making it possible to do any lab tests from a tiny drop of blood from the finger instead of having big needles stuck in your arm and two tubes of blood taking out. And by making it possible for every lab test to be affordable for every person, no matter how much money they have and, um, accessible in locations that are convenient. So we've built what we call our wellness centers, which are service centers inside of pharmacies in starting in Walgreens now in Arizona, so that people can go get a test done after work or on a weekend, and begin to engage in this process of getting information about their bodies, which could change their life. The way we described it in the story is 100 to 1 100 to 1 1000 The amount of blood that you would normally need to give blood pain free, Quicker, cheaper. And you can do all sorts of tests. There a nose is a combination of the word therapy and diagnosis, all sorts of tests on that single drop of blood through. So Elizabeth dropped out of Stanford after not after one year at 19 to start this company. And Elizabeth, it actually started out in 2003 as a different idea. Aagh. Wearable patch to monitor and transmit blood information to two doctors. Right. How did it get from that to this? What was the? Was there a major fork in the road where you could have gone one direction and you went the other? I think I think there's a 1,000,000,000 for all the time. And you know, you have you have a vision. You have a mission for me. It was finding what what I'm just so incredibly passionate about in life. When you find that thing, then it's a question of going down 1000 different paths to get to your end point, no matter how you have to go to get there. And so our patch was our first embodiment of an idea of how you could do this type of testing to realize the same dream which is being able to intervene in time for therapy to be effective. And the course of building this business has been about figuring out at every fork in the road how to get a step closer to that vision into that dream and when something doesn't work or it takes too long or too complicated, changing it so that you can get to that Indian. It's actually really interesting hearing you talk about this this way because as you're saying this, it is enforcing in my mind that you did not start with an idea like, Oh, we can make a merit wearable patch that will do this, or we can draw blood much more efficiently. You actually started with a very ambitious mission which is to change the way diagnosis and therapy takes place. Yeah, no, that's exactly right. And I you know, I think people talk a lot about starting companies and I'll talk with people. Sometimes they'll say, Oh, you know, I want to start a business And my question is always Why? Because there's got to be a mission. There's gotta be a reason that you're doing it, that no matter how hard it is, you want to keep doing it over and over and over again because you love it. And for me, what I want to spend my life doing is seeing a change in our world in which people don't have to go through what they go through today when you say goodbye to soon. And so that was what starting this company is about night. I really believe that building a business is a vehicle for making a change in the world, and and so then it's a question of operational izing it and tuning it and changing it and being really good at change so that you can get to that end game because nothing ever works out the way you think it's going to you just have to leverage those moments and turn them into what you want them to be. So tell me if I have these numbers, right, Elizabeth has raised more than $400 million. The company is valued at the company that she started at 19 valued at $9 billion. You own over 50% of it, right? Congratulations on that. Um, when we did the story in June, you had 500 employees. What do you have now? We're over 700. And what is what are we going to see in terms of Sarah noses expansion over the next year? Yeah, we're we pursued a model and introducing these wellness centers that the Walgreens CEO very well referred to is crawl, walk, run. And we're, uh we're moving from the crawl phase into the walk phase, and it's been really important for us to developed and fine tune a model that is replicable and scalable because access for every person means rolling this out ultimately within five miles of every person's home. So we've started in Arizona, and I'm as a place to build this model and were now working to replicate that Has we expand throughout the country. I'm and for us it's really been about making sure that the experience is wonderful. Lab testing is not something that people generally described as something they love, and and we want to change that. We think that it should be because it's the first step in getting the most valuable information about yourself, about your body, about your health, that you need to live the way you want to live. And so you know, I've talked before about the fact that the thing we're most proud of is when someone comes out of one of those wellness centers and says that was so fun, right? And, uh, and the more we can do that, the more we could be in to engage and connect with people. So the next year for us is about engaging and connecting with more and more people to help them understand that there is all this information about their bodies that is accessible and should be accessible to them and buy them so that they can begin to change their life. And you are so you have your many Walgreens in your in about 40 Walgreens now across the country, most of them in Arizona, the Palo Alto Walgreens. If anyone here lives or you know is in around Palo Alto, also go in there. Go get your go. Get your fingerprint. Perp wrecked. It will not hurt. Um, and the results also come back very quickly. Um, what are we gonna see in terms of? I mean, are you able to say, like in five years, how many Walgreens you might be in or how many drug stores across the country you might be in there? 8200 Walgreens nationally? That would put us within five miles of every American home. That's what we're working to do. And that's the plan to be in every Walgreens in the next within the next five years. Certainly to be within five miles of every person telling you who has a question back here in the last row. Please identify yourself. Hi. I'm Karen, daughter from Google. My question is, uh, 500 employees in a $9 billion valuation. We all want to know if you're hiring. I'm teasing, uh, seriously, though. Are you running into any regulatory push back? Or I would say, like traditional medicine pushback as 23 me and others that have begun to change space. Are you seeing any of that yet? Well, this is this is a really important area to us. So we defined our mission as access to actionable information at the time it matters. And the information is only actionable if it is of the highest level of integrity, right? I love with quality, which means we've done a huge number of studies on over the last 11 and 1/2 years Get to the point in which the data could be of that quality. And so we have been, for example, proactively submitting every single one of our test USDA because we believe that it's so important in terms of equality stands. I think about it as my mom goes to get a test in one of these locations, I want to know every single time that that data is flawless, no matter what. And so our approach has been two embrace regulation because we see it as critical in realizing our mission. We have a question up here. The mic is coming. Thank you. Hi. I'm Marina Thing from Qualcomm. You're clearly very passionate about changing the world through your new company. But I was wondering what is what keeps Elizabeth up at night if you sleep. And how do you go about tackling that? I don't sleep very much. How many hours? The other night? On average? About four hours. Yeah. You know, I I, um I feel like the luckiest person in the world every day because of what I get to do. And right now, building this company is about building people and really investing in building the people from within our company. So I'm I spend as much of my time is humanly possible focusing on getting in building the right people because that's how we realize this mission and how we realize this dream. So I don't think I could be possibly kept up more than I r g m on that one. Yes, right here. Hi. This is Katie from my heart media. So my question is, Stanford's not a shabby place. You had a year there. You realized you were onto something. What was the trigger to say? I'm onto something so great that I'm gonna leave after a year, and I'm gonna invest this, you know, tuition money to launch this company. What was that moment? You know that moment is you. You find what you feel like you're born to do and done. I mean, for me, I reached a certain point where I was spending all my time doing this and spending my parents money on all of these courses that I wasn't going thio. And it's kind of like, Okay, you know, why am I here? And I had the privilege of getting what I needed, you know, a new engineer in the engineering school there to be able to do this. And And I hit that moment where I was very clear that this is what I wanted to do with my life. So, uh, that was it. You know, Elizabeth, many people in this audience, whether they're an established companies, established companies, established companies like Google and Airbnb and, um are over the mentality. Even if the company has been around for as long as you're 11 years that they're building a startup and we have entre for true entrepreneurs founders in this audience you talked about, you have to be really willing to change. How did you deal with that struggle? Yeah. Yeah, I'm I mean, this is my journey was one of jumping in feet first and so on. I think you know, if you know why you're doing something and what it is that you're trying to get, then it's a question of being very, very open to failure. And I'm and just, you know, trying again and again and again until you get it right. And so we code named our product. What started is that Patch the Edison. Because our premise was we will fail over 1000 times until we get this thing to work. But we will get it on the thousands of first time. And Andi, I think I think that mindset has really guided so much of what we've done because there's a determination to make it work no matter what. But you're not. You're not worried about whether many of those attempts fail. You're embracing it. Another question. Yes, right here. Hi, Rosalind Flax from John Deere. You talked about being in all the stores across the U. S. The Walgreens crossed us for the next five years. But are you looking at, um, having your customers been able to do it from home? A great question. Yeah, it's It's a different world than what we're doing in the context of sort of the retail pharmacy. I think. I think there's definitely applications for that in our own work. We've served, for example, pharmaceutical companies. In the past, we would run their clinical trials to get new drug to market, and all of that testing was done from people's homes. So I think there is. There's some very interesting applications there Elizabeth has on her board. Three ex cabinet secretaries to former senators and, um, retired military officers very high level. It's fascinating board. You still don't have any women on the board, right? Yeah. Okay. All right. Okay. Tell beyond beyond you. Is that is that? Is that on your okay? That's on your list. We quoted Henry Kissinger is saying about Elizabeth. I have seen no sign that financial gain is of any interest to her. She's like a monk. Is that a fair assessment? You've got a great sense of humor. You hear about these billions that you've made? You know, I've always seen money is a tool for being able to make a difference. And for us, we reinvest everything that we make back into our company, and we always will, because it's about being able to create better and better products to realize this vision. And so I'm so I I never would have built the company this way if it was about making money. It's It's about creating value, and money becomes a byproduct of being successful in creating in value. And then and then it's a tool to reinvest in being able to continue doing that. The hell we think about it, those are wonderful words.