We all know that the path to become an entrepreneur is a very difficult one. To build a company from the ground up, getting Investors on board, the Midia covering and all the fuzz around is like a rollercoaster. The most important part of becoming an entrepreneur is to create value, building a product and/or solution that could be applicable and used by society. Lately, we have seen a wave of hot startups, mainly in the digital and IT space, some of them with high valuations. Creating internet companies is relatively easy. All you need is a computer, IT infrastructure and a new idea and to build a new platform or a new app. In Biotechnology, the path to entrepreneurship is totally different. Biotechnology is defined as the manipulation (as through genetic engineering) of living organisms or their components to produce useful commercial products (as pest resistant crops, new bacterial strains, or novel pharmaceuticals) or simply the use of living cells, bacteria, etc., to make useful products (such as crops that insects are less likely to destroy or new kinds of medicine). Another area of biotechnology and life sciences that has grown is the diagnostics sector. The idea is to develop new tools and solutions to make disease diagnosis fast and easy. That is where the company Theranos got in. In this blog post, I will discuss how company valuation, especially in the biotech space is volatile. Elizabeth Holmes is a Stanford drop-out that created a new way of doing blood tests for various diseases using a “nano” tube so patients could avoid needles and all their hurdle. The company she created is Theranos and is an American privately held company doing health-technology and medical-laboratory-services which include disease diagnosis based in Palo Alto, California. Theranos also developed a blood-testing device named Edison, which is basically the hardware of the company product. The company claimed that the device uses a few drops of blood obtained via a finger-stick, rather than vials of blood obtained via traditional venipuncture, utilizing microfluidics technology. By the summer of the year 2014, its founders had raised over U$400 million dollars from several investors, valuing the company at U$9 billion. Interestingly, Elizabeth owned 50% of the company, making her a billionaire with a net worth of U$4.5 billlion dollars. The company operated for years in near-total secrecy, despite raising hundreds of millions of dollars. Holmes became a Silicon Valley celebrity, appearing in the Cover of several magazines, including Fortune, Forbes and she was a regular on the tech industry conference circuit. Her company, which claimed to perform dozens of lab tests on just a few drops of drawn blood, seemed poised to revolutionize healthcare and was talked about as a 2016 IPO candidate. Where is the big problem in all this history? How can a company claim that it has exclusive technology that will solve all the problems in diagnostic blood tests? The simple answer is that Theranos did not publish a single peer-reviewed article, it did not publish any Intellectual Property (Patents, for example) and never showed any results to the Scientific Community. It mainly worked in what we call Industrial Secrecy. Well, totally fine right? Not that easy. In the last 6 months the company lost value and credibility since the pressure to show results increased and they were not able to “deliver”. The negative midia coverage helped the company sink. Some articles were published, analyzing and comparing side-by-side Theranos’ technology with big diagnostic companies that are already well established in the market and their results were not good as expected. A company that on paper had a U$9 billion dollar valuation went down on spiral and now it is difficult to give it a “real” value. From billions to almost nothing in months. That is how it works when a company is created without true values and no transparency. What’s next for Elizabeth Holmes and Theranos? She lost the CEO position and the Investors are trying to “save” what is left. The company is being scrutinized now by the Scientific Community and by the Midia, the same one that placed her on a pedestal. Let’s wait and see what is going to happen but the outcome does not look pretty. Check this interesting Infographic/Cartoon on the company trajectory from Nine Billion Dollars to Zero.