I am genuinely confused by the overall thrust of the article.<p>1st Theme says: Theranos doesn&#x27;t use Edison (thier in house testing device) &amp; instead use regular equipment from companies like Siemens. This is a marketing problem because the company is saying its using one device but is actually using another one.<p>2nd theme: lab tests from Theranos differ from generally accepted standards. How do they differ if in fact they are using the same tests as everybody else? Is it just the general variability of lab results and similar variability could be find in quest diagnostics as well?<p>3rd Theme: almost all people say Theranos is dramatically cheaper than competitors. How is that possible when they are using the same equipment as everybody else for most of the tests? Is it a process innovation in operations rather than from Edison&#x2F;better equipment tech? Or are they just subsidizing these costs and being cheaper and possible have bad unit economics?<p>The are two plausible storylines that can seem to reconcile these three themes is:<p>Storyline 1 (Negative)-
Theranos seem to be doing a process innovation rather than an underlying equipment innovation. That process innovation perhaps includes diluting blood samples 1) to meet thier marketing promise of taking less blood 2) somehow taking less blood and diluting the samples to meet the standard for traditional equipments AND still lead to cheaper operational costs that lead to lower prices. But - somehow these diluted blood samples show more than normal variability.<p>Storyline 2 (not so negative)
Traditional lab companies are ridiculously inefficient from an operations perspective. Theranos is able to take the same equipment as everybody else but because of thier operational efficiency make the end service dramatically cheaper. The variability in tests results is kind of standard in the lab testing market.<p>Am I thinking about this the right way or missing any big parts?