Elizabeth Holmes and the Power of Imagination

 

Theranos founder, chairwoman, and C.E.O. Elizabeth Holmes, in Palo Alto, California, September 2014.A 19-year-old college student had a revolutionary idea that she imagined would make her rich and famous. She quit college and founded a start-up, attracting incredible attention, investors like Lawrence Ellison of Oracle, and a board of directors that included Henry Kissinger and George Schultz. She dressed just like Steve Jobs, in black turtlenecks. She had huge, mesmerizing blue eyes and a very deep voice for a woman. She was sought after for interviews, TED talks, and hailed as a pioneer in medical advances. She claimed that the cost savings using her technology would be in the billions.

Her technology concept was cheap, reliable blood testing done with only a fingerprick, using a device that could test for up to 240 different things. She claimed that she was driven by integrity and the desire to help others.

. . . [T]here’s a tremendous responsibility. I think about it all the time in the context of my mom. And the information that we’re generating, she does all of her tests through us, knowing that we’re right, every single time, and knowing that we’re not compromising on quality, and knowing that we’re, in every action that we take, approaching this with a seriousness that it deserves, in the context of what it means to say to someone, “You don’t have breast cancer” or “You do have breast cancer,” has driven our culture in a huge way.

At one point, her company Theranos was valued at more than $9 billion, more than Quest Diagnostics, the well-known and well-established medical lab company. She claimed that her technology was like a smart phone, where the old lab testing methods were clunky old mainframes.

Initially, she foretold a future in which pharmaceutical drug trials could be given constantly updated, non-invasive information about the real-time affect of their drugs on real live patients, and sought to partner with drug companies. When that failed to pan out, she foretold a future in which every home contained its own minilab for easy, non-invasive blood testing.

As a person with chronic illness, I’d love to be able to get blood tests without a prescription. Theranos championed this cause, getting a law passed in Arizona to allow people to order blood tests on their own.

Many people claimed that Elizabeth Holmes, the woman about whom I am writing, had imagination and vision, and that she was a prophet, a visionary. She did, and she was, but the vision she had was not the one they imagined she was sharing with them. She was a serial, bald-faced, unrepentant liar. She constantly spoke of Theranos’ developmental technology that did not yet exist as though it was up and running and fully tested.

She actively cultivated the Steve Jobs thing with the turtleneck. She is suspected by many (including me) of deliberately lowering the pitch of her voice to sound more commanding and powerful. Margaret Thatcher did that too, and I don’t necessarily criticize her for it. Holmes wanted to be seen as the type of woman who can succeed in the man’s world of the tech industry.

However, clearly she was engaging in this type of theater to the betterment of her company. Zero Hedge has an interesting summary of the laudatory, adulatory paens to Holmes that were written in 2013 to 2015 here.

The first cracks in Holmes’ facade came with a Wall Street Journal piece in 2015. Holmes fought back aggressively, but somehow the spell she had been able to cast was broken.

Although her company, Theranos, was able in 2014 to contract with a major drugstore chain, Walgreen’s, to do blood testing in its stores (here’s an account from 2015 of one person’s experience), Walgreen’s sued Theranos in 2016 for $140 million in damages after two years’ worth of blood testing was voided and corrections were issued. Theranos claimed that no one was harmed by the inaccurate tests, and insisted that their standards were the highest and that their methods would be vindicated.

The journalist John Carreyrou of the WSJ piece went on to write more than two dozen articles about Holmes and Theranos, and recently published a book on the subject which is being made into a movie with Jennifer Lawrence.

Forbes, which once claimed Holmes had a personal worth of $4.5 billion, now claims she is worth “nothing.” Imagine that.

*Photo credit here.

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  1. Randy Webster Inactive
    Randy Webster
    @RandyWebster

    CB Toder aka Mama Toad (View Comment):

    Papa Toad mentioned that the name Theranos always makes him think of Thanatos, the Greek personification of death.

    Has anyone read Walker Percy’s Thanatos Syndrome?

    I’m listening to Will Durant’s The Story of Civilization and am on The Life of Greece.  He mentions that thanatos is death, and it was close enough to the half remembered Theranos that I wanted to check to see if it were the same word.

    • #61
  2. Stad Coolidge
    Stad
    @Stad

    CB Toder aka Mama Toad (View Comment):

    Stad (View Comment):

    I was actually sad to find out she was a fraud. Her story was typical American – an individual who comes up with an idea that makes life better for millions and ultimately makes her a billionaire. Also, the fact she was female set an example for other women entrepreneurs.

    Too bad . . .

    She created that whole story. She herself is clearly highly intelligent, highly driven, highly charismatic. Those things are really truly true.

    Holmes was aware of people’s ability to lose their sense when it comes to trendy sounding names. Holmes called her machine the “Edison” (obvious appeal), decked out her corporate offices in American flags, talked about the Girl Scouts and girls women in tech and STEM, and had the company’s aesthetic designed by an Apple designer.

    Yep.  A gifted human with a fatal flaw . . .

    • #62
  3. Randy Webster Inactive
    Randy Webster
    @RandyWebster

    MarciN (View Comment):
    even though they see a Santa Clause

    I try to get Santa clauses in all my contracts.

    Edit:  Sorry, Vectorman.

    • #63
  4. Randy Webster Inactive
    Randy Webster
    @RandyWebster

    The story reminds me of the young, pretty New York socialite who lied her way to (temporary) riches.  I can’t remember her name, and I think she’s in jail now.  Another fraud on a pretty massive scale.

    • #64
  5. Arahant Member
    Arahant
    @Arahant

    Randy Webster (View Comment):
    I’m listening to Will Durant’s The Story of Civilization and am on The Life of Greece. He mentions that thanatos is death, and it was close enough to the half remembered Theranos that I wanted to check to see if it were the same word.

    All of this talk of Thanatos reminds me of this:

    Hermes/Mercury was also the psychopomp, the one who escorted the souls of the dead to the afterworld, so a symbol of death.

    • #65
  6. Randy Webster Inactive
    Randy Webster
    @RandyWebster

    Arahant (View Comment):

    Randy Webster (View Comment):
    I’m listening to Will Durant’s The Story of Civilization and am on The Life of Greece. He mentions that thanatos is death, and it was close enough to the half remembered Theranos that I wanted to check to see if it were the same word.

    All of this talk of Thanatos reminds me of this:

    Hermes/Mercury was also the psychopomp, the one who escorted the souls of the dead to the afterworld, so a symbol of death.

    I might be glad of an escort.

    • #66
  7. Randy Webster Inactive
    Randy Webster
    @RandyWebster

    CB Toder aka Mama Toad: he had huge, mesmerizing blue eyes

    When I was growing up, “big blue eyes” was a euphemism.

    • #67
  8. Arahant Member
    Arahant
    @Arahant

    Randy Webster (View Comment):
    I might be glad of an escort.

    Well, some people are predisposed to take a wrong turn.

    • #68
  9. Randy Webster Inactive
    Randy Webster
    @RandyWebster

    Arahant (View Comment):

    Randy Webster (View Comment):
    I might be glad of an escort.

    Well, some people are predisposed to take a wrong turn.

    There are some situations in which a wrong turn might be a good thing.

    • #69
  10. OccupantCDN Coolidge
    OccupantCDN
    @OccupantCDN

    Archie Campbell (View Comment):

    Gumby Mark (View Comment):
    It also turns out that Rupert Murdoch, owner of the WS Journal where Carreyrou works, was captivated by Holmes and made a $125 million investment in Theranos, the largest non-media investment he’d ever made. When Holmes got wind of the story Carreyrou was working on she made several attempts to get Murdoch to intervene to kill the story. Carreyrou heard about it and was worried but Murdoch refused to get involved.

    And lost every dime of his investment. I know Murdoch is a billionaire and could afford to lose it, but it speaks well of him that he didn’t have the WSJ kill the story.

    He also knows that the SEC would love to take a bite on him. If he had killed the story – or provided some “Editorial Guidance” on a story where he had a blatant conflict of interest, you know the feds would come a knocking.

    • #70
  11. toggle Inactive
    toggle
    @toggle

    Randy Webster (View Comment):

    CB Toder aka Mama Toad: he had huge, mesmerizing blue eyes

    When I was growing up, “big blue eyes” was a euphemism.

    Blood, eyes, lips, and hips
    When gorgeously assembled,
    Soak with fingertips.

    • #71
  12. Skyler Coolidge
    Skyler
    @Skyler

    OccupantCDN (View Comment):

    Archie Campbell (View Comment):

    Gumby Mark (View Comment):
    It also turns out that Rupert Murdoch, owner of the WS Journal where Carreyrou works, was captivated by Holmes and made a $125 million investment in Theranos, the largest non-media investment he’d ever made. When Holmes got wind of the story Carreyrou was working on she made several attempts to get Murdoch to intervene to kill the story. Carreyrou heard about it and was worried but Murdoch refused to get involved.

    And lost every dime of his investment. I know Murdoch is a billionaire and could afford to lose it, but it speaks well of him that he didn’t have the WSJ kill the story.

    He also knows that the SEC would love to take a bite on him. If he had killed the story – or provided some “Editorial Guidance” on a story where he had a blatant conflict of interest, you know the feds would come a knocking.

    And the feds would be interested because  . . .?

    • #72
  13. OccupantCDN Coolidge
    OccupantCDN
    @OccupantCDN

    Skyler (View Comment):

    OccupantCDN (View Comment):

    Archie Campbell (View Comment):

    Gumby Mark (View Comment):
    It also turns out that Rupert Murdoch, owner of the WS Journal where Carreyrou works, was captivated by Holmes and made a $125 million investment in Theranos, the largest non-media investment he’d ever made. When Holmes got wind of the story Carreyrou was working on she made several attempts to get Murdoch to intervene to kill the story. Carreyrou heard about it and was worried but Murdoch refused to get involved.

    And lost every dime of his investment. I know Murdoch is a billionaire and could afford to lose it, but it speaks well of him that he didn’t have the WSJ kill the story.

    He also knows that the SEC would love to take a bite on him. If he had killed the story – or provided some “Editorial Guidance” on a story where he had a blatant conflict of interest, you know the feds would come a knocking.

    And the feds would be interested because . . .?

    Because he owns fox.

    Keeping damaging information about a stock that he owns out of the public domain, should be illegal. A prosecutor may have to turn statutes into living documents to stretch them into creating a crime for the situation. Its not like they’ve never done that before.

    • #73
  14. Gumby Mark Coolidge
    Gumby Mark
    @GumbyMark

    OccupantCDN (View Comment):

    Skyler (View Comment):

    OccupantCDN (View Comment):

    Archie Campbell (View Comment):

    Gumby Mark (View Comment):
    It also turns out that Rupert Murdoch, owner of the WS Journal where Carreyrou works, was captivated by Holmes and made a $125 million investment in Theranos, the largest non-media investment he’d ever made. When Holmes got wind of the story Carreyrou was working on she made several attempts to get Murdoch to intervene to kill the story. Carreyrou heard about it and was worried but Murdoch refused to get involved.

    And lost every dime of his investment. I know Murdoch is a billionaire and could afford to lose it, but it speaks well of him that he didn’t have the WSJ kill the story.

    He also knows that the SEC would love to take a bite on him. If he had killed the story – or provided some “Editorial Guidance” on a story where he had a blatant conflict of interest, you know the feds would come a knocking.

    And the feds would be interested because . . .?

    Because he owns fox.

    Keeping damaging information about a stock that he owns out of the public domain, should be illegal. A prosecutor may have to turn statutes into living documents to stretch them into creating a crime for the situation. Its not like they’ve never done that before.

    It was not a publicly owned company. 

    • #74
  15. OccupantCDN Coolidge
    OccupantCDN
    @OccupantCDN

    Gumby Mark (View Comment):
    It was not a publicly owned company. 

    It was not listed on a stock exchange, the company had received several rounds of venture capitalist investments. A total of $724 Million dollars had been raised from an Angel Round, and a B and C Rounds in 2006.

    I dont think you can raise that much money without the SEC, FTC or some federal authority having some regulation(s) in place.

    • #75
  16. Skyler Coolidge
    Skyler
    @Skyler

    OccupantCDN (View Comment):

    Gumby Mark (View Comment):
    It was not a publicly owned company.

    It was not listed on a stock exchange, the company had received several rounds of venture capitalist investments. A total of $724 Million dollars had been raised from an Angel Round, and a B and C Rounds in 2006.

    I dont think you can raise that much money without the SEC, FTC or some federal authority having some regulation(s) in place.

    Regardless, fraud is a crime.

    • #76
  17. Titus Techera Contributor
    Titus Techera
    @TitusTechera

    Thanks for writing, MT! This is a good story worth the attention.

    @gumbymark, say more about the book when you have time for a review!

    For the amateurs of Greek etymology, I don’t see any connection to thanatos (=death); thera means beast, however. Not sure what other words are very similar. But there are some…. Sorry I don’t have more on hand. I dunno what they were trying to say, if anything, with the cool-sounding name…

    • #77
  18. CB Toder aka Mama Toad Member
    CB Toder aka Mama Toad
    @CBToderakaMamaToad

    Titus Techera (View Comment):
    For the amateurs of Greek etymology, I don’t see any connection to thanatos (=death); thera means beast, however. Not sure what other words are very similar. But there are some…. Sorry I don’t have more on hand. I dunno what they were trying to say, if anything, with the cool-sounding name…

    Apparently Holmes was intending an amalgam of “therapy” and “diagnosis.”

    • #78
  19. Gumby Mark Coolidge
    Gumby Mark
    @GumbyMark

    Skyler (View Comment):

    OccupantCDN (View Comment):

    Gumby Mark (View Comment):
    It was not a publicly owned company.

    It was not listed on a stock exchange, the company had received several rounds of venture capitalist investments. A total of $724 Million dollars had been raised from an Angel Round, and a B and C Rounds in 2006.

    I dont think you can raise that much money without the SEC, FTC or some federal authority having some regulation(s) in place.

    Regardless, fraud is a crime.

    Yes, and that’s what they have been charged with.

    • #79
  20. Mark Camp Member
    Mark Camp
    @MarkCamp

    OccupantCDN (View Comment):
    Keeping damaging information about a stock that he owns out of the public domain, should be illegal.

    Are you saying there should be a law requiring every stockholder to formally disclose all negative information about the company he possesses?  If so, I disagree.

    • #80
  21. OccupantCDN Coolidge
    OccupantCDN
    @OccupantCDN

    Mark Camp (View Comment):

    OccupantCDN (View Comment):
    Keeping damaging information about a stock that he owns out of the public domain, should be illegal.

    Are you saying there should be a law requiring every stockholder to formally disclose all negative information about the company he possesses? If so, I disagree.

    No. But a media magnate should not be able to conspire with editors/reporters to keep material information out of the hands of the public. (( that’s the tangent of the story we started to discuss – the fact that Rupert Murdock did not attempt to kill a story by his paper – WSJ – that unraveled the fraud he had invested in))

    • #81
  22. Stad Coolidge
    Stad
    @Stad

    Nick H (View Comment):
    I wonder how much of her (temporary) success was due to her looks?

    If I weren’t happily married, I’d visit her every week in prison.

    Yep, lots of folks fell for the image, ignoring the reality . . .

    • #82
  23. CB Toder aka Mama Toad Member
    CB Toder aka Mama Toad
    @CBToderakaMamaToad

    One more thing about Holmes’ voice: She deepened her voice, I think, to sound more commanding and powerful.

    When I lived in Japan for a year, I never became fluent but I could communicate with most people and I found that I spoke Japanese at a much higher pitch than my normal voice, just like many Japanese women do.

    • #83
  24. Skyler Coolidge
    Skyler
    @Skyler

    CB Toder aka Mama Toad (View Comment):
    One more thing about Holmes’ voice: She deepened her voice, I think, to sound more commanding and powerful.

    A woman cannot deepen her voice “that” much without being born with the ability.  If people could suddenly alter the range of their voice then I think singers would have figured it out by now.

     

     

    • #84
  25. CB Toder aka Mama Toad Member
    CB Toder aka Mama Toad
    @CBToderakaMamaToad

    Skyler (View Comment):

    CB Toder aka Mama Toad (View Comment):
    One more thing about Holmes’ voice: She deepened her voice, I think, to sound more commanding and powerful.

    A woman cannot deepen her voice “that” much without being born with the ability. If people could suddenly alter the range of their voice then I think singers would have figured it out by now.

     

     

    Not suddenly, but with training.

    I am a natural soprano. Five years ago, I could not sing alto without strain, but thanks to necessity and training, I can today. In fact, I sometimes sing the tenor line. My range has expanded significantly.

    Do you sing or have you trained your voice? 

    • #85
  26. Skyler Coolidge
    Skyler
    @Skyler

    CB Toder aka Mama Toad (View Comment):

    Do you sing or have you trained your voice? 

    I think the world is thankful that I don’t.

    • #86
  27. Arahant Member
    Arahant
    @Arahant

    Skyler (View Comment):

    CB Toder aka Mama Toad (View Comment):
    One more thing about Holmes’ voice: She deepened her voice, I think, to sound more commanding and powerful.

    A woman cannot deepen her voice “that” much without being born with the ability. If people could suddenly alter the range of their voice then I think singers would have figured it out by now.

    • #87
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