The Ethics of Product Modification in Business Strategy

Could a shortcut to growth actually be a shortcut to a $9 billion collapse? In the competitive world of hardware, product modification refers to the practice of altering a finished third-party tool to perform tasks its original manufacturer never intended. While startups often use these modifications to save time, the Theranos saga shows that hidden changes can create catastrophic risks for customers and investors alike.

Building a new product from scratch is slow and expensive. Founders often face immense pressure to show progress to partners and board members. When internal technology fails to meet these expectations, the temptation to modify an off-the-shelf solution becomes almost irresistible. However, transparency and rigorous testing are non-negotiable when a company alters the core mechanics of another firm's equipment.

Hacking Off-the-Shelf Tools According to Bad Blood

In his book Bad Blood, John Carreyrou details how Theranos used product modification as a desperate workaround. When their proprietary "miniLab" wasn't ready for the public, the company purchased Siemens ADVIA 1800 analyzers. These were massive, industry-standard machines designed for large-scale clinical settings. Instead of using them as intended, Theranos engineers hacked them to accept tiny finger-stick samples.

Carreyrou explains that the company modified these machines because they had promised a menu of over 200 tests they couldn't actually perform. By hacking third-party tools, they attempted to bridge the gap between their marketing claims and their technical reality. This concept matters in business because it highlights the thin line between clever engineering and dangerous deception. When a modification is used to hide a failure, it stops being innovation and starts being fraud.

Strategic Risks and Operational Failures

Why Startups Rush Into Hardware Hacking

Speed is the primary driver for most modification projects. Theranos had signed a massive deal with Walgreens that included a $100 million innovation fee. They were on a strict deadline to go live in Phoenix. Since their own devices failed frequently, they turned to Siemens analyzers as a temporary bridge that became a permanent crutch.

Risks of Siemens Analyzer Theranos Product Modification

Modifying the Siemens analyzer meant ignoring the manufacturer's operational limits. The ADVIA 1800 required significantly more blood than a finger-stick provided. To make the small samples work, engineers diluted the blood with saline. This double-dilution dropped analyte concentrations below the machine's FDA-cleared measurement range. It wasn't just a technical tweak; it was an unauthorized change to a medical protocol.

Why Product Modification Requires Rigid Testing

Every modification introduces new variables that can destroy data integrity. At Theranos, the hacked Siemens machines struggled with potassium and sodium levels. One common issue was hemolysis, where red blood cells burst during finger-stick collection and leaked potassium into the sample. Because the samples were already diluted, the resulting data was often useless. Despite these errors, the company continued to report results to actual patients.

Challenges of Engineering Ethics in Modern Labs

The decision to hack lab equipment creates a moral burden for the staff. At Theranos, lab directors like Alan Beam were expected to sign off on results they knew were unstable. Many employees resigned because they couldn't square their professional standards with the company's shortcuts. Ethical frameworks must prioritize the safety of the end-user over the milestones of a corporate contract.

Manipulating the Siemens ADVIA 1800

The real-world application of this hacking occurred in a room Theranos called "Jurassic Park." This lab space was filled with Siemens machines that engineers were actively dismantling. They used a separate robotic tool called a Tecan to dilute blood samples before moving them into custom-made small cups for the Siemens probe. These cups were half the size of the standard ones, designed to bring the probe closer to the bottom of the container.

This modification was kept a closely guarded secret from Siemens technicians. Whenever service representatives came to the building, the hacked machines were often hidden or shielded from view. The company went as far as stacking six miniLabs on top of each other in a configuration called the "six-blade," but the heat generated by the stack caused the top units to fail. This demonstrates that hacking isn't just a software patch; it has physical consequences like heat displacement and mechanical drift that can ruin a product's output.

Steps to Manage Hardware Modification Risks

Audit Manufacturer Boundaries

Identify the exact technical specifications provided by the original equipment manufacturer. If your project requires the tool to work outside these bounds, you're no longer in a supported environment. You must document every deviation from the standard manual to understand where new risks might emerge. This helps prevent the "dead volume" issues that plagued the Theranos probe system.

Establish Independent Validation Protocols

Run side-by-side comparisons between the modified tool and a standard, unaltered version. If the results differ by more than a small margin, the modification is not commercially viable. For example, clinical labs typically consider a test precise only if it has a coefficient of variation under 10%. Never move forward with a hack that consistently fails these standard industry benchmarks.

Maintain Regulatory Transparency

Disclose modifications to any oversight bodies or partners immediately. Attempting to hide a hacked system, as Theranos did with its proprietary "4S" code names, eventually leads to legal exposure. Regulators at CMS and the FDA eventually discovered that the company was using machines in ways that weren't cleared. Honesty with partners ensures that you don't build a $9 billion valuation on a foundation of uncertified hardware.

Where Hardware Hacking Falls Short

Critics of this approach point out that hardware isn't as flexible as software. In the tech world, the "move fast and break things" mantra is often celebrated. However, in industries like healthcare, aviation, or construction, breaking things can result in lost lives. Some argue that modifying tools is a necessary part of prototyping, but it should never be part of a final consumer offering without full recertification.

Others believe that the problem isn't the modification itself, but the intent. Using a Siemens machine to learn about blood flow is research. Using it to process 240 different patient tests while pretending it's your own technology is a different matter entirely. This strategy often creates a "debt" that the company can never repay, as the time spent hacking could have been used to actually solve the original engineering problem.

Innovation requires pushing boundaries, but those boundaries must be respected when safety is involved. Product modification is a tool for learning, not a way to cheat a business partner. High-growth targets don't justify the use of unvalidated hardware. Review your current technical workarounds and determine if they actually meet the industry standards for accuracy. Conduct a full safety audit on any equipment your team has modified this year.