Venture capitalist John Doerr: Theranos had the 'wrong goals'

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Kleiner Perkins Caufield & Byers Chairman John Doerr.
Kleiner Perkins Caufield & Byers Chairman John Doerr.

If Theranos had approached its business goals differently, the health tech company might have avoided its dismal fate, which now includes founder Elizabeth Holmes and president Ramesh “Sunny” Balwani being charged with federal wire fraud.

That’s according to John Doerr, chairman of venture capital firm Kleiner Perkins Caufield & Byers. Doerr’s newest book, “Measure What Matters,” explains how a goal-setting system called OKRs (“Objectives and Key Results”) helped leaders — Larry Page and Sergey Brin at Google (GOOG, GOOGL), Andy Grove at Intel (INTC), among others — achieve their short- and long-term goals and successfully grow their organizations in the process.

“They had the wrong goals. You see it in tech companies like Theranos and Zenefits,” Doerr said, referring to a health-benefits startup that was plagued by regulatory issues. “A good transparent use of goals and OKRs, and I dare say those wouldn’t have happened.”

A longtime venture capitalist in Silicon Valley, Doerr got his start in Silicon Valley at Intel as the company worked towards the release of its 8086 microprocessor. It was there Doerr observed former Intel CEO Andy Grove create and implement OKRs for the first time, which helped guide the company towards meeting its internal targets for the project.

A sample of Intel’s OKRs focused on the deployment of its 16-bit 8086 microprocessor for the company’s second-quarter in 1980. Source: Measure What Matters
A sample of Intel’s OKRs focused on the deployment of its 16-bit 8086 microprocessor for the company’s second-quarter in 1980. Source: Measure What Matters

Since then, Doerr has helped over 100 organizations — Intuit (INTU), The Gates Foundation, Bono’s One — deploy OKRs to help focus on and set a handful of concrete and aspirational goals on a quarterly and longer-term basis. In the case of MyFitnessPal, for instance, the fitness-focused startup in 2014 deployed OKRs of “helping more people around the world” as an objective with “key results” that included adding 27 million new users in 2014 and reaching 80 million total registered users.

“They [OKRs] allow you to focus and get aligned and committed around a few things that really matter,” Doerr explains. “And then you can track those and build a culture of risk taking, where it’s okay to fail and you can ‘stretch,’ which is what we like to say. Focus, alignment, commitment, tracking and stretching — that’s the payoff.”

While it’s unclear whether Theranos deployed OKRs, it’s fair to say the startup stretched itself far beyond its actual capabilities and failed to meet its promises to partners and investors. Indeed, although many tech startups come and go, perhaps none have flamed out so spectacularly as Holmes’s company. When the Stanford University dropout founded the company in 2003, she offered the world a tantalizing vision, one where Theranos’s technology could run over 200 diagnostic tests off a single drop of blood at a fraction of the price in a fraction of the time of traditional blood tests.