13 October 2017

Vanity Fair: “How Elizabeth Holmes’s House of Cards Came Tumbling Down”

Like Apple, Theranos was secretive, even internally. Just as Jobs had famously insisted at 1 Infinite Loop, 10 minutes away, that departments were generally siloed, Holmes largely forbade her employees from communicating with one another about what they were working on—a culture that resulted in a rare form of executive omniscience. At Theranos, Holmes was founder, C.E.O., and chairwoman. There wasn’t a decision—from the number of American flags framed in the company’s hallway (they are ubiquitous) to the compensation of each new hire—that didn’t cross her desk.

And like Jobs, crucially, Holmes also paid indefatigable attention to her company’s story, its “narrative”. Theranos was not simply endeavoring to make a product that sold off the shelves and lined investors’ pockets; rather, it was attempting something far more poignant. In interviews, Holmes reiterated that Theranos’s proprietary technology could take a pinprick’s worth of blood, extracted from the tip of a finger, instead of intravenously, and test for hundreds of diseases—a remarkable innovation that was going to save millions of lives and, in a phrase she often repeated, “change the world”. In a technology sector populated by innumerable food-delivery apps, her quixotic ambition was applauded.

Nick Bilton

Silicon Valley arrogance at it’s finest. While some startup failure stories have an almost comic quality, this one verges on tragedy. Not for the founder, who seems so entangled in her illusions of grandeur that she completely lost touch with reality, but for the patients who used her fake blood tests.

A cautionary tale that not every ‘innovation’ or ‘disruption’ is positive, that extraordinary claims need to be verified independently before investing or launching products on the market. Something to remember especially in the context of AI hype, as some try to apply these technics to medical diagnosis.

Theranos founder Elizabeth Holmes, 2014
Theranos founder, chairwoman, and C.E.O. Elizabeth Holmes, in Palo Alto, California, September 2014. By Ethan Pines/The Forbes Collection

Holmes may not be prepared to compartmentalize what comes next. When I arrived in Palo Alto in July, I wasn’t the only person setting out to interview anyone associated with Theranos and Holmes. The Federal Bureau of Investigation was, too. When I knocked on a door, I was only a day or two behind F.B.I. agents who were trying to put together a time line of what Holmes knew and when she knew it—adding the most unpredictable twist to a story she could no longer control.

Update: half a year later, Elizabeth Holmes agrees to settle the charges of “massive fraud” and pay a $500,000 fine. She will also be barred from serving as a director or officer of a public company for 10 years.

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