On Wednesday, Steven Burd who is an ex CEO of Safeway has testified that during Elizabeth’s Holmes’ criminal trial about the company’s decision to invest heavily in a partnership which was a startup about her blood testing, that ultimately failed to get off the ground.
Burd, who served as CEO of the grocery chain from 1993 to 2013, said 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.
“It was a fascinating concept,” Burd said in his testimony, saying that the blood testing device he was shown was about the size of a “large bagel toaster” and that he was told the turnaround time on results could be just 20 to 30 minutes. As he put it, “we were consistently told that it essentially replaces a traditional full blown lab.”
With just a few drops of blood taken by a finger stick, Holmes and Theranos touted that they could test for diseases like cancer and diabetes using their proprietary device. Holmes catapulted her startup company to a $9 billion valuation and got the key to retail deals with Safeway and Walgreens. Later, following a Wall Street Journal investigation into its testing methods and capabilities in 2015, the dominoes began to fall.
Safeway reportedly dissolved its relationship with the company before it ever offered its services, but they invested hundreds of millions of dollars in clinics in 800 of its supermarkets to eventually offer Theranos blood tests.
Burd is one of the top high-profile names and he still wants to testify in the trial of Holmes, who is being accused of knowingly misleading investors, patients, and doctors about the things her company could do, just to take their money. Elizabeth is going to face up to 20 years in jail. She has pleaded not guilty.
“There are very few people that I’ve met in business that I would actually say were charismatic,” Burd said Wednesday. “She was clearly charismatic. She was very smart. And she was doing one of the hardest things you can do in business and that is to create an enterprise from scratch.”
Burd said, “whenever she was talking, she owned the room.”