Elizabeth Holmes was the epitome of the Silicon Valley pin-up prodigy. At 19, she resigned from Stanford University to found Theranos, an investment-filled company that promised to change modern medicine. At 31, Forbes listed the charismatic dropout as “the world’s youngest self-made female billionaire,” and she was reportedly worth $4.5 billion. The “next Steve Jobs” hailed Inc, a business magazine that placed her on its cover. “Don’t worry,” Bill Clinton gushed when he introduced her to a conference crowd in 2015. “The future is in good hands.” They all agreed that she would change the world.
Fast forward seven years and Holmes, now 38, has just been sentenced to more than 11 years in prison, after being found guilty of four counts of fraud. “I am devastated by my failures. I have felt deep pain for what people went through, because I failed them,” he told a court ahead of Friday’s sentencing, the final chapter in a collapse of empire that has inspired best-selling books, documentaries and podcasts and even a Next Hollywood movie starring Jennifer Lawrence.
The revelation at the heart of Holmes’ downfall? Theranos, which employed more than 800 people and was valued at $9 billion in 2015, is worth nothing. His innovative device for testing blood, the Edison, the kind of thing that would make testing for Covid-19 a piece of cake, turned out to be a sham. The patients were misdiagnosed. Investors lost everything.
Holmes was found guilty in January and her “complex” 15-week court case spanned personal intrigue, big pharma and influential politicians. Holmes enlisted lawyer David Boies, who represented Harvey Weinstein, to defend her against her, who argued that her now ex-boyfriend and Theranos COO Ramesh “Sunny” Balwani subjected her to an abusive relationship. of a decade. year. Her lawyers deny the accusation. So what exactly went wrong? How did Holmes fall so far and so fast? And why is it so compelling to watch?
The story begins decades ago, when Holmes was a child prodigy. He read Moby Dick at the age of nine, studied Mandarin on weekends, and dreamed of leaving his mark on humanity. His mother, Noel, was a Washington foreign policy aide; his father, Christian, worked for various federal agencies. The family, from the Fleischmann yeast empire, knew how the wheels of America turned. Geeky Holmes didn’t want to be president, he told his family. He wanted to become the billionaire the president would want to marry. She was the valedictorian of her class and on the track, then landed a spot at Stanford University on a President’s Scholarship.
There he wowed the influential dean of his chemical engineering school, Channing Robertson, with a pitch for a revolutionary blood-testing device. He joined a fledgling board and Theranos was born. He later courted former top government officials, including Henry Kissinger, former Defense Secretary William J. Perry, General James Mattis and former Secretary of State George Shultz, to his star-studded board. In a decade, Theranos—a deft combination of “therapy” and “diagnostic,” part Greek demiurge, part Marvel villain—had attracted hundreds of millions of dollars from investors like Rupert Murdoch and the De Votz, Waltz, and Kraft dynasties. “She has a social conscience that Steve never had,” Perry, who knew Jobs, told the New Yorker. “He was a genius; she is one with a big heart.”
Edison’s implausibly and intractably secret technology sounded electrifying. A “tiny needle,” Holmes said, would take a drop of blood and process it into a “biochip” in a slippery black box. He would use 99.9 percent less blood than other machines and could detect, on the spot, everything from STDs to the first sign of cancer. He would save lives, quickly and ingeniously, at half the cost.
It would save Obamacare “hundreds of millions of dollars,” she ecstatically told technology conferences. In 2013, this argument persuaded the supermarket chain Walgreens to spend millions of dollars to set up clinics, putting Theranos within easy reach of every American household (crucially, Walgreens’ “Project Beta” inspectors were never told). allowed to test the feasibility). Holmes wore the same outfit every day: black pants and a black polo-neck sweater. America was buying, and she became a full-fledged star.
There was some controversy surrounding Balwani, who had helped a stammering Theranos with a $13 million loan in 2009. He had made millions in Silicon Valley, working for companies like Microsoft and securing early financing for startups. He drove a black Lamborghini and a Porsche 911, with personalized license plates reading “Vidi Vici” and “Das Kapital.” People said that he was a workaholic with a miserable temper, whom his nervous employees called The Enforcer. Twenty years older than Holmes, and unknown to everyone, he was also seeing her.
When Holmes’s star rose, something seemed wrong. He installed bulletproof glass in his office and traveled by jet or with a driver and security team. Holmes talked about gigantic contracts with the US military in the press, but they were fictitious. Walgreen’s contracts, sadly, were not.
Many people who showed up at the clinics had their blood drawn with old-fashioned needles. The tests were not graded by Theranos technology, which was later benchmarked against a school science project, but by equipment from other major vendors. Samples were stored at incorrect temperatures. Patients had faulty results and were rushed to emergency rooms. The entire setup was fake.
It all started to unravel in 2014 when a man named Tyler Shultz got a job at Theranos, helped by his grandfather, George Shultz. Tyler was suspicious of the company. Nearly a million tests conducted in California and Arizona had to be canceled or corrected.
Theranos would save Obamacare millions of dollars. Then all of a sudden it all fell apart
Tyler informed his grandfather that the place was rotten but he didn’t believe him. So, in 2015, she went to John Carreyrou of the Wall Street Journal and told him that pieces of the test device would fall out and explode during testing. Holmes begged Rupert Murdoch to kill the Carreyou story. He left the decisions to publish the story to the newspaper’s editors, who went ahead.
Holmes has become a cautionary tale against the widespread Silicon Valley philosophy of “fake it ’til you make it.” In HBO’s The Inventor: Out for Blood in Silicon Valley, a smiling Holmes walks into a meeting, after a Theranos device has received FDA approval for a herpes test.
Can’t Touch by MC Hammer This sounds. She dances with the employees, as Balwani has the employees yell a collective “F*** you” at what he called “the guys who are after us.”
Holmes has remained defiant. She married hotel scion William Evans in 2019 and had a son in July. “This is what happens when you work to change things,” she told a CNBC interviewer in 2015. “First they think you’re crazy, then they fight you, and then you change the world.” Outraged supporters blamed Big Pharma for campaigning against their revolution. But the vision of her collapsed.
Holmes’ tabloid-like saga means female founders have to work twice as hard. In meetings with investors, says the New York Times, many are asked how their pitch “would be different from Theranos.” At the height of her alleged hoax in 2014, she was practically broadcasting her ignorance of medical science.
Ken Auletta of the New Yorker called his words “comically vague”. Was she trapped by her own ascent? Or lost in her own lies? Many bought what she was selling. “I don’t have many secrets,” she told a film crew documenting the pioneering early days of Theranos, her blue eyes riveted on the camera. she looks. Then, just for once, she blinks.