“Don’t worry about the future, we are in good hands.”
So said former US President Bill Clinton in 2015 as he introduced Elizabeth Holmes to an adoring New York crowd.
It seemed like an uncontroversial statement at the time, as he hailed the achievements of a woman who had become America’s youngest self-made billionaire woman after taking Silicon Valley by storm.
A hub for the world’s biggest tech companies, the only thing more synonymous with this infamous part of Northern California than scientific breakthroughs and innovative gadgets were the wealthy white men who were invariably behind them – collared sweaters rolled up and smart pant-sneaker combos in tow.
Holmes — a high school computer genius turned Harvard dropout — was a bona fide gatecrasher, his meteoric rise to the cover of Forbes magazine propelled by his founding health tech company Theranos and his rapid rise to a maximum valuation of $9 billion. Look back at what it promised to deliver, and it’s easy to see why.
Revolutionary blood tests were central to his pitch, those that could be performed at phenomenal speed with just a small drop required – and without needles.
Holmes’ slogan became “change the world”, such were his claims that the equipment his company had developed could test dozens of diseases at once.
She insisted it would change health care in the United States, not only by speeding up and streamlining doctor visits, but eventually making those visits obsolete by selling the gadgets in stores.
It took more than a decade for such claims to be revealed as science fiction, but Holmes’ unabashed willingness to talk the talk has helped her become one of Silicon Valley’s darlings, raising hundreds of millions from investors and venture capitalists.
As Theranos grew, her public image was crafted to perfection to make her the perfect face of one of America’s most exciting companies, adopting the aforementioned turtlenecks of her idol Steve Jobs, the late founder of Apple, and speaking in a surprisingly deep voice that added extra gravitas to his every word.
Fame isn’t for everyone, but for Holmes it seemed elementary.
Nothing, it seemed, could go wrong. Until it does. Highligths.
How the lie was exposed
Holmes’ empire began to crumble when a bombshell expose by the Wall Street Journal reported that Theranos’ technology was deeply flawed.
The devices used to collect people’s blood, which the firm has dubbed “nanotainers,” are said to be so far from reality that Theranos had actually used other companies’ equipment to perform blood tests in its labs.
The most distressing element of the Journal’s report was that the company’s former chief scientist, Briton Ian Gibbons, had attempted suicide after telling his wife the technology didn’t work. He died soon after of liver failure.
The stories emerged just a month after Holmes shared the stage with Bill Clinton.
As described by Sky’s Ian King when Theranos went bankrupt in 2018three years after the Journal’s report, the key to the company keeping the wool firmly fixed in the public eye until then had been an almost bigoted culture among its executives and staff, and a culture of extreme secrecy.
Neither are unique to Silicon Valley – some of the great tech figures that have emerged over the years remain a strange cult hotbed in some corners of the internet – but they have rarely been combined with such a destructive effect.
The journalist who broke the story, John Carreyrou, has since written a book about the scandal called Bad Blood, which is set to be made into a feature film. There is perhaps a cruel irony that it is produced by Apple, the company whose late co-founder was an inspiration to Holmes.
Her rise and fall also inspired a hit podcast series called The Dropout, and a subsequent Hulu series of the same name featuring Amanda Seyfried.
The show presents Holmes as a young woman who is brave, intelligent, and determined to succeed, and she is easy to root for at first. As Apple designer Ana Arriola says to Holmes in a scene where she tries to recruit her after the launch of the first iPhone: “Honestly, it’s really exciting to me that you’re a young CEO, instead of a ‘a cocky little boy in a sweatshirt.’
But Holmes’ goal of becoming a wealthy biotech star quickly overcomes all other instincts – including the drive to tell the truth.
It’s a trait that has left some staffers deeply uneasy, not just Gibbons and Arriola, who describes his time at Theranos on his LinkedIn page as “altruism by corrupt and contrary science fiction.” ‘ethics”.
How a life happened
The Carreyrou revelations, which Holmes admitted trying to silence, sparked investigations by medical and financial regulators in the United States. In a development that would once have been unthinkable, the 34-year-old was facing criminal charges in 2018.
She and Theranos chairman, ex-lover Romesh Balwani (whom she has since accused of sexual assault), were accused of engaging in “a multi-million dollar scheme to defraud investors, a separate scheme to defraud doctors and patients”, and each faces two counts of conspiracy to commit wire fraud and nine counts of wire fraud.
Among those defrauded investors were Rupert Murdoch and US drugstore giant Walgreens, while similar big names had been lured into Theranos’ board.
Among them were former Secretaries of State Henry Kissinger and George Shultz, as well as a former director of the US Centers for Disease Control.
All had been tricked by Holmes, who founded Theranos at just 18 and quickly learned to tell her backers exactly what they wanted — and she needed — to hear.
Like Eric Jackson, startup founder and author of The PayPal Wars, put it on sky news: “There’s almost an endemic need in the system, I don’t mean exaggerated, but to tell a compelling story for investors. At some point, the hype has to match the credibility, otherwise you’ll This is a case of old fashioned fraud.”
Whether it’s a matter of delusion, falling victim to the treacherous “fake it ’til you make it” culture that pervades American startups, or something more sinister, Holmes argued during of her trial, which she initially believed his company’s supposedly groundbreaking blood tests were real.
“I wanted to convey the impact the company could have on people and on health care,” she told the court of her meetings with investors.
For prosecutors, such claims were the consequence of a woman “in lack of time and money”.
After launching his company by reallocating family funds intended for his Harvard degree, taking it mainstream meant doing whatever it took to attract his big investors and venture capitalists.
Former U.S. Secretary of Defense Jim Mattis, who joined the company’s board of directors, told the trial: “There just came a point where I didn’t know what to believe about Theranos anymore.”
“She chose the lie when we needed the truth”
Holmes’ sentencing on Friday comes after she was found guilty of fraud earlier this year after his years-long scam failed to thrill the jury the way it did his backers.
After a case that gripped the world just as his rise to fame had, U.S. federal prosecutors want the judge to jail him for 15 years, a term deemed appropriate for “one of the col most prominent whites Silicon Valley or any other district has seen”.
Balwani had to wait until next month for his sentencing, having also been found guilty of several counts of fraud in a separate trial.
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In a 46-page memoir last week, Assistant U.S. Attorney Robert S Leach wrote of Holmes: “She repeatedly chose lies, hype, and the prospect of billions of dollars over the safety of patients and fair investor relations.
“Elizabeth Holmes’ crimes weren’t failing, they were lying – lying in the most serious context, where everyone needed her to tell the truth.”
A counter-document from Holmes’ lawyers, totaling 82 pages, insisted that her reputation had been permanently and unjustly destroyed, given that she had turned her into a “caricature to be mocked and reviled”.
They are appealing for a sentence of up to 18 months.
More than 130 friends, family, former investors and employees also submitted letters to Judge Edward Davila of San Jose, Calif., appealing for clemency.
Senator Cory Booker used his to hail Holmes, who is still just 38, as someone who “can, despite his mistakes, make the world a better place.”
Whether it’s true or not, she won’t be able to get out from behind bars.