Steven Burd, who served as Safeway's CEO between 1993 and 2013, testified yesterday in the criminal trial of Elizabeth Holmes, founder and former CEO of Theranos, saying that a financial commitment by the company of $85 million to the startup was predicated on false information provided by Holmes.
CNN reports that Burd "aid he was drawn to Theranos for its promise of being able to conduct blood tests faster, cheaper and without the need of a full laboratory. Burd said he saw the potential for customers to get their blood tests done while shopping and to use that service to bring more customers into Safeway stores."
According to the story, "Holmes and Theranos touted the promise of using their proprietary device to test for a conditions like cancer and diabetes with just a few drops of blood taken by a finger stick. Holmes catapulted her startup to a $9 billion valuation and secured key retail partnerships with both Safeway and Walgreens … Safeway invested hundreds of millions of dollars into building out clinics in 800 of its supermarkets to eventually offer Theranos blood tests, but reportedly dissolved its relationship with the company before it ever offered its services."
Holmes, CNN writes, is "accused of knowingly misleading investors, patients, and doctors about the capabilities of her company in order to take their money. Holmes faces up to 20 years in prison. She has pleaded not guilty."
- KC's View:
Steve Burd often seemed to be defined by his commitment to figuring out new ways to approach health care issues, both for employees and customers. And so it somehow is not surprising that he would've been susceptible to the Theranos' pitch, no matter how outlandish those claims may have seemed to some people, who thought that the startup was defying laws of physics.
Burd is a smart guy, but even he couldn't see that if something seems too good to be true, it probably is.