The story of Theranos and its founder Elizabeth Holmes is nothing short of infuriating, in part because she led a corporate deception that will go down as one of the worst cases of fraud and mismanagement in history, but also because for me, as a former Theranos client, the story was personal and I feel used and duped.
Holmes represents so much of what’s wrong with the world today. As a child, when asked what she wanted to be when she grew up, her answer was “a billionaire.” She reached that goal at a very young age, in large part because of her own hubris but also because her story was as much a product of what we wanted to hear as it was based on reality. Holmes was held up as a visionary, a genius, even the next Steve Jobs, long before she accomplished anything other than creating fake value for an idea that wasn’t real. What’s more American than that?
John Carreyrou’s book about the rise and fall of Theranos reads like a thriller, one that shows how at nearly every turn Holmes and her close advisors chose to do the wrong thing in order to keep the company propped up on a bed of deceit. What’s worse, she did this with literal lives at stake, as the results of her not ready for prime time blood test claims led directly to misinformed patients with real health issues. It’s criminal, and I hope she goes to jail for it (her trial on wire fraud and other fraud begins soon).
The rise of Theranos coincided with my own health issues, issues that required me to get regular blood work to test my cholesterol, blood sugars, and other heart-related measurements. It was and continues to be, inconvenient to go to standard labs like Labcorp and Sonora Quest. Back in the early 2010s, you had to arrive early at these labs and wait with others, sometimes for an hour or more, before having coffee, to get your blood drawn. So it seemed too good to be true that one could simply show up at a nearby Walgreens and get your blood drawn quickly, with just a finger prick, and have results delivered to a mobile phone app in less than 24 hours. With no appointment and no doctor’s order needed.
I started using Theranos as soon as the tests became available in Phoenix, one of the test markets for the Theranos/Walgreens partnership. I was impressed by the initial appointments, and the app, and was thrilled that I could select my own tests without waiting for a doctor’s order. I also bought into the growing myth of Holmes, reading stories about her and seeing her delight the media on news show after news show. I believed she was a visionary, and while I wasn’t one to compare her to Jobs, I did fall for the story that she was changing an industry that needed to be changed and that she was certainly intelligent, and charming (if not a bit odd). I loved that she was the “first female self-made Silicon Valley billionaire.” I mean, she hung out with the Obamas and Chelsea Clinton!
Carreyrou’s book is a devastating investigation of how Holmes built Theranos with no regard for the truth and with no empathy for the people whose lives she was manipulating. She turned out to be a con artist. Perhaps not at first, but certainly soon after she dropped out of Stanford to build Theranos and realized how far her image and charm could take her. She duped a lot of people much smarter than me. From former Secretary of State George Schultz to Henry Kissinger to Mad Dog Mattis, to Rupert Murdoch. You gotta get up pretty early in the morning to con a con artist like Murdoch.
I don’t feel the need to go into every subterfuge she committed, for that, I suggest you read the book or watch the upcoming HBO documentary by Alex Gibney that debuts this month or watch next year’s Hollywood blockbuster starring Jennifer Lawrence as Holmes. It’s a great story that will have you riveted, whichever vehicle you choose to consume. But I do feel the need to comment on how the Theranos story was aided at every turn by a mass media intent on delivering stories with no fact checking. America loves a Horatio Alger rags to riches story and even better if it’s delivered in the package of a not unattractive young blonde woman.
It’s upsetting that Fortune and Forbes and CNN and all the other outlets (even the Wall Street Journal while at the same time its intrepid reporter Carreyrou was uncovering a giant hoax) neglected to do their due diligence on Holmes before propping her up as the next Gates or Jobs.
I’m not suggesting they should have known the full scope of her crimes, but at least get some unbiased background before putting her on such a pedestal. Asking George Schultz about her was not enough — yes he’s reputable but he was on her board. Of course he’s going to sing her praises. Hell, he threw his own grandson under the bus for her as we learn in the book.
Here’s a woman with no scientific background, a Stanford dropout, spinning a yarn so unbelievable that it would embarrass Mark Twain. Looking back, the signs were everywhere that she was a fraud. Many people with lab experience said what she was claiming to have done (test for hundreds of markers with a tiny pinprick of blood) was scientifically impossible. There were also plenty of fired former Theranos employees who knew she was a fraud, and while she threatened them to keep quiet, it wasn’t impossible to find whistleblowers as Carreyrou found out.
It’s infuriating that the media helped build her up or that the culture of Silicon Valley created her myth without much more than insider word of mouth. “When the legend becomes fact, print the legend,” we learned from The Man Who Shot Liberty Valance (1962). This aphorism is truer today than ever. We don’t want the facts — we want the myth. That’s how Trump got elected. How climate change became a two-sided issue. How dot coms became more valuable than GE and Ford. How Elizabeth Holmes became worth $4.5 billion.
Carreyrou’s book made me mad. But more than that, it made me even more jaded than I already am, which is really saying something.