Wednesday, November 4, 2015

NYT Public Editor Blasts Arrillaga-Andreessen Magazine Feature for ‘Clear’ Conflict of Interest

Lest we forget.
From re/code, Oct. 29, 2015:
If you picked up a copy of this month’s T, the New York Times’ style magazine, you might have perused a big, splashy feature article titled “The Transformers,” about five visionary tech entrepreneurs.
And if you saw the byline on one piece about Airbnb’s co-founder and CEO, Brian Chesky, you might have noticed it was penned by another prominent Silicon Valley figure: Laura Arrillaga-Andreessen, the wife of Marc Andreessen, the famous entrepreneur and now powerful venture capitalist.
In a post today, the New York Times public editor, Margaret Sullivan, certainly did and not in a good way, especially since Andreessen Horowitz has a $112 million investment in the online home-renting company.
Sullivan noted that not only was there a big problem in that there was no disclosure (a very big issue, for sure), but that the magazine should have selected a different writer altogether for the feature.
“This is a case in which the financial conflict is so clear, and the spousal tie so close, that a disclosure would not have been enough,” Sullivan wrote. “A different writer altogether would have been a far better idea, and, to my mind, the only right one.”
Sullivan also noted that the article gave “extremely favorable” coverage to Theranos CEO Elizabeth Holmes, who has spent the whole month putting out PR fires related to a Wall Street Journal investigation that revealed serious technological setbacks at the $9 billion biotech startup.
Responding to Sullivan, T Editor Deborah Needleman acknowledged that the magazine should have appended a disclosure — again, it’s pretty shocking that it was not there — but she defended her decision to have Arrillaga-Andreessen write the article.
“I disagree that we shouldn’t have let Laura write, as she is a separate person from her husband with her own career and credentials,” Needleman said. “I say this not as an excuse, but she is, separately from her husband, a billionaire (making her through marriage a billionaire twice over) and for that reason I think I failed to consider any monetary conflict in her case.”
Arrillaga-Andreessen does indeed have her own career, including as a well-known philanthropy educator, and is indeed very wealthy in her own right. She is the daughter of Silicon Valley real estate mogul John Arrillaga, whose land development work paved the way for the complexes of Google, Apple and myriad other tech companies.
There has since been a disclosure about Arrillaga-Andreessen added to the “Transformers” article, and an editor’s note regarding what’s happening at Theranos.
Neither Andreessen Horowitz nor Arrillaga-Andreessen has responded to requests for comment.
For more on the Arrillaga clan see our 2014 post "The secretive billionaire who built Silicon Valley".
And from the NYT Oct 12:
Five Visionary Tech Entrepreneurs Who Are Changing the World
These brilliant minds blur the lines between big business and social impact, harnessing goodness through technology.
Suppose you want to help people in struggling communities become better health care consumers. Or to try to prevent terrorist attacks using Big Data. Or to develop lab tests that cost a fraction of what most providers charge. Do you create a business or a nonprofit?
There is no right answer. Because for a new generation of innovators, notions of what is right are different. The important questions are: What is the problem? What solutions can I develop to address it? And, can I help more people by operating as a nonprofit, founding a company, or utilizing elements of both?
A profound change is sweeping across the entrepreneurial landscape. In the quest to improve lives or preserve the earth’s natural resources, today’s top minds are not only coming up with game-changing products and services. They are also reinventing systems and harnessing diverse tools — from cross-sector partnerships to capital markets — to meet their goals. Many of these innovative thinkers are young, coming of age in the aftermath of Sept. 11, amid the destruction of two protracted wars and the economic uncertainties ushered in by the Great Recession. They are digital experts, who, thanks to social media, smartphones and access to limitless information, have grown up with a sense of global community that transcends geographic boundaries. And they seem to have social consciousness embedded in their DNA. They are united in wanting to do more than acquire material riches. They measure success by their ability to transform the lives of others. Their question is not ‘‘What do I want to be when I grow up?’’ but ‘‘How will the world be different because I lived in it?’’
As a result, financial success and social impact are becoming ever more linked, with the lines blurring between the business and nonprofit sectors. Twenty years ago, businesses, nonprofits and government made up three distinct parts of society, with their own responsibilities, goals and strategies. In the 1990s, the conversation started to move from how to create the right organizations and programs to which approaches could — with different sectors working together — help solve some of the world’s most profound social problems. In the past couple of decades, there’s been a remarkable acceleration in the overlap between these different sectors.
What is unfolding is a blending of the goals and business models for traditional for-profit enterprises and nonprofit organizations. In the process, nonprofits with empathy-based, revenue-generating models have emerged at the same time as C.E.O.s and entrepreneurs who want to build companies that generate social value through their products and services.
Today’s young, socially motivated entrepreneurs question why we even have sectoral boundaries that need to be crossed. They don’t respect the walls between business, government and nonprofits. They want to put social good at the heart of the for-profit companies they create. As an ever-increasing number of nonprofits compete for the world’s limited charitable resources, this new generation sees creating a revenue stream as an acceptable, even essential, component to a successful social-change strategy. In some ways, this will make life for nonprofits more difficult. These new donors want the organizations they support to produce robust results that verify their social impact and financial sustainability. For many nonprofits, this means upping their game when it comes to the effectiveness of their evaluation process.
But whether we’re talking about nonprofits with new businesslike approaches or for-profit entrepreneurs with a social mission, it’s all good news. Given that the world’s philanthropic funding will never be enough to solve all the problems we face, this hybridization of social and economic entrepreneurship has enormous potential.
  1. Photo

    CreditPortrait by Todd Cole
    Elizabeth Holmes
    It’s hard to overestimate the potential benefit of what Elizabeth Holmes has developed with her tech company Theranos. Blood tests cost hundreds, if not thousands, of dollars. At Theranos, a complete blood count and electrolyte test, taken by a single finger prick, costs $10.17. Her goal? To democratize health care. Turning a blood test into an inexpensive, accessible and even (almost) pleasant experience — rather than an expensive, dreaded and time-consuming procedure — makes people more likely to get tested. As a result, medical problems can be identified earlier, enabling the prevention or effective treatment of diseases ranging from diabetes and heart ailments to cancer.
    Holmes, 31, has always been a bit of an outlier. As a child, she studied with a tutor to become fluent in Chinese. She applied for her first patent at 19, a wearable patch to help administer drugs and monitor variables in one’s blood while adjusting the dosage as needed. (She currently has 27 U.S. patents in her name.) Since dropping out of Stanford’s School of Engineering during her sophomore year in 2004, she has spent nearly every waking moment working on bio-engineering breakthroughs in diagnostic testing and persuading lawmakers that every person has a basic right to information about his or her own health. (She only pauses in her work to run — seven miles a day.)
    Holmes talks about Theranos in the context of traditional philanthropic institutions: ‘‘Foundations work to significantly subsidize medical tests for developing economies at lower costs; our work is in developing tests at lower costs than have been available through these mechanisms in the past. Our model and objective is delivering equally effective tests with greater accessibility and at a price those in need, in developing economies or in the United States, can afford.’’
    One of the six covers of T’s Oct. 25 Greats issue. See all the covershere.
    Theranos has already run millions of tests for individuals, and currently offers its lab services at its Wellness Centers in California, Arizona and Pennsylvania, along with its national partnership with Walgreens. This year, it announced additional partnerships, raising the value of the company to $10 billion. But the impact of Holmes’s work extends far beyond the United States. For example, Theranos has developed a finger-stick test that rapidly detects the presence of the Ebola virus as close to the actual time of infection as clinically possible. Because the test can be performed in the most basic of settings, it can serve the people most in need, who are often the last to benefit from new technologies. ‘‘I believe that you can build a business that does well by doing good,’’ she says.
    Holmes is also promoting full transparency in lab pricing, working to reduce Medicare and Medicaid rates for lab tests, to the tune of potentially hundreds of millions in government savings. This year she helped draft and pass a law in Arizona that will act as a national model for allowing more people to take charge of their health through the ability to obtain and directly pay for any test without first being required to get a health care provider’s order or work through insurance eligibility. Once health care information becomes accessible, Holmes envisions a system based on preventative medicine, versus the status quo of diagnosis and treatment only after symptoms have developed.
    By breaking down barriers to testing, she’s paving the way for a scalable approach to early diagnosis and therefore lower-cost, less invasive treatments. And by standing up to lawmakers and entities with vested interests for individuals’ fundamental right to access their health care information, Holmes may be doing more than running one of the world’s most successful start-ups — she may be starting a movement to change the health care paradigm as we know it....MORE
    Update: After this profile was published online, there were new developments involving Theranos.
  2. Makeup: Tsipporah using MAC Cosmetics. San Francisco production: Crew You Production