Erika Cheung and Tyler Shultz’s actions led to the unveiling of one of Silicon Valley’s biggest scandals ever – Theranos. Now they’re hoping to prevent it from happening again
The Theranos scandal was bad. After years of its founder Elizabeth Holmes being hailed as a new Steve Jobs-like icon and raising over $700m in funding, it was revealed that it’s so-called revolutionary blood-testing tech didn’t work, despite what the startup had told everyone. As a result, the company’s leadership is facing criminal charges and Silicon Valley has been forced to take a long hard look at the culture that spawned Theranos. Now the two whistleblowers who helped unearth the scandal aim to do their part to prevent it from happening again.
Erika Cheung is the former Theranos lab worker who tipped off the Centers for Medicare and Medicaid Services to look into the company. Together with Tyler Shultz, the ex-research engineer who helped the Wall Street Journal find the truth, Cheung has launched the international organisation Ethics in Entrepreneurship.
The non-profit’s mission is to bring ethics back into the startup ecosystem to prevent this and other outrageous incidents from happening again. Cheung, Shultz and the rest of their founding team hope to do this by connecting founders to experienced entrepreneurs, ethicists and other experts as well as creating tools to make it easier to make ethical decisions. The organisation hopes to fund the creation of these tools through donations.
Speaking with CNN Business, Cheung said: "There were so many instances, even for someone like Elizabeth Holmes, to turn back and say, 'I'm taking things a little too far here’. She had many opportunities to – even at the very end, she could have said, 'OK, I'm sorry. I messed up. I'll stop processing patient samples and I'm going to get my team together, we're going to work on this and we're going to make a good product.' I don't think she's ever said that, until she had to go to court and say those things.”
She added: "I do think entrepreneurship can empower people and empower society but we also have to not let things escalate to this degree.”
This initiative has been launched as the world of tech is arguably facing a moral crisis. Over the past few years companies like Microsoft and Google have been forced to question their own cultures as employees accuse them of enabling sexism and other seedy behaviours. Similarly, social media companies like Facebook and Twitter are repeatedly being accused of doing too little to stop the spread of fake news. And let’s not forget the Cambridge Analytica scandal.
But it’s not just the American industry that’s facing these problems. For instance, in the UK, several female founders recently told Elite Business about the sexism they’ve faced throughout their startup journeys.
So clearly, the tech sector is struggling with some ethical issues. Here’s hoping initiatives like Ethics in Entrepreneurship can help.