If Elizabeth Holmes grew up in Medieval Europe, I firmly believe she would have started a cult of religious fanatics and later been burned at the stake as a witch. She once told her employees that her company was a religion.
Who championed a woman whose 9 billion dollar company promised to revolutionize blood testing with miraculous new devices, but produced virtually nothing of worth? Check out part of the roster that served on her Board of Directors:
- James Mattis (current Secretary of Defense)
- George Schultz (former Secretary of State and Defense)
- William Perry (former Secretary of Defense)
- Henry Kissinger
- Rupert Murdock
- Senator Sam Nunn
- Dick Kovacevich (former CEO of Wells Fargo)
If you'll notice, all old white men. Elizabeth Holmes had a way of turning herself into the ideal daughter figure. When she is talking she fixes her large blue eyes directly on you, rarely blinks and very consciously pitches her voice very low. (I think Ivanka Trump has several of the same characteristics). She consciously patterned herself after Steve Jobs, wore black turtlenecks, and her mesmerizing intensity was said to create a 'reality distortion' field similar to Jobs, where you felt that anything he talked about had to be done RIGHT NOW, even if it really didn't make sense.
The other thing you'll notice is that none of the men have any background in medicine. Nor did Holmes, the founder, who dropped out of Stanford after 2 years. Theranos (Therapy and Diagnostics) was a vision of using miniaturization and wireless data transmission to enable multiple blood tests to be performed from a single drop of blood with incredible speed and at a fraction of the cost of current technology. Blood tests determine a huge part of the medicine you take. Cheap, affordable diagnostics would be a great boon to health care, and that was the vision that Elizabeth Holmes pursued with a messianic fervor.
This technology existed at the intersection of Silicon Valley and medicine. Holmes had a business vision based on Silicon Valley standards of growth and promises, where vaporware and inflated projections are the norm. But buggy software does not carry the same impact as a faulty cancer screening. Theranos pushed their blood testing systems into Walgreens and Safeway well before their hardware could do the job it promised to do. In one instance, a faulty potassium reading resulted to a woman being rushed to the hospital in imminent danger of a stroke, where she underwent a battery of tests costing thousand of dollars which revealed nothing. The potassium test results were wrong, and most people in the know at Theranos knew their technology led to wildly inaccurate test results.
Holmes covered the tracks of her deception by creating a ruthless and paranoid work environment. Employees were required to sign non-disclosure agreements, ostensibly to protect proprietary technology, but the reality was the NDA's were a way of silencing employees who left because they couldn't morally stomach the lies and deceptions Holmes was making in order to make the technology sound ready for prime time. Legally she was represented by David Bois, one of the most powerful and well-connected attorneys in the United States (and another old white man under the sway of her charm). One of the lessons from the Theranos story is the how long the deception occurred because of NDA's which prevented former employees from coming forward.
The real story of what was going on was finally given to the world not by a government agency but by the Wall Street Journal reporter John Carreyrou, who researched and broke the story (and wrote the book Bad Blood). Rupert Murdock, who owns the Wall Street Journal, invested over one hundred million dollars in Theranos. When Elizabeth Holmes heard that John Carreyrou's story was about to be published, after first threatening legal action against the Journal, she went directly to Murdock, and asked him to kill the story. Rupert Murdock, who had over a hundred million reasons to accede to her request, refused.
So this story was in fact due to the journalistic integrity of Rupert Murdock. (Don't feel too bad for Rupert. He arranged for Theranos to buy back all of his interest in the company for $1, and took a $100 million tax write-off, which is sort of a billionaire's 'get out of jail free' card.)
On June 16th, Holmes was indicted on Federal wire fraud charges.
Elizabeth Holmes will soon exist at the corner of Hollywood and Journalism, and of course will be a motion picture starring Jennifer Lawrence.