Elizabeth Holmes: The Next Steve Jobs or Bernie Madoff?



Hallie Ayres
Contributing Writer

Much has been written and recorded about Elizabeth Holmes and her biotech startup Theranos, once valued at more than $10 billion. ABC Radio recently released a six-episode podcast titled “The Dropout” that chronicles the rise and fall of the figure who critics have come to call the 21st century’s Bernie Madoff, and dedicated followers of the years-long fraud scandal will recall the original Wall Street Journal reports by John Carreyrou that drew national attention to the fraud when they were released starting in 2015. Carreyrou subsequently published the impeccably researched Bad Blood, a critically-revered book that chronicles the intricacies of the scandalizing saga. For those who prefer the filmic format of delivery, HBO put out a gripping documentary that provides all the requisite information in a mere two hours, a minuscule time investment in comparison to the decades-long fraud for which Holmes continues to face legal battles.

As someone who had only vaguely followed the scandal as its news broke a few years back, I found the documentary incredibly revealing and informative. Cleverly titled “The Inventor: Out for Blood in Silicon Valley,” the film works its way through Theranos’ history while invoking comparisons to Elizabeth Holmes as varied as Archimedes, Steve Jobs and Mozart. When Holmes dropped out of Stanford at age 19 to found Theranos, she readily admits that she already idolized Steve Jobs, finding herself imitating his everyday black turtleneck wardrobe.

Before she became the world’s only self-made female billionaire, Elizabeth Holmes dreamed of streamlining health care, lab tests and biotechnology. The opening of the documentary features footage from interviews, TED talks and lectures in which Holmes waxes nostalgically about summer trips to the beach with her uncle, who, due to a sudden spread of cancer, died before Holmes had a chance to say goodbye to him. This personal anecdote forms her grounding motive for Theranos, a company that set out to produce an in-home blood testing device aimed to revolutionize how we relate to health care in the same way Job’s iPhone had irreversibly altered our relationship to technology.

After securing investors, business mentors, and scientific engineers and technicians, Holmes set about attempting to realize a prototype she called “the Edison.” Named for one of history’s most esteemed inventors, Thomas Edison, the Edison would require only a finger-prick’s worth of blood, collected in a contraption called the “nanotainer,” which would undergo rapid testing within the boxy contraption. At once eliminating the need for a visit to the doctor, the Edison also strove to render obsolete intravenous blood drawing — another deeply personal desire for Holmes, who admits in the documentary that having her blood drawn by needle remains her only lifelong fear.

This lack of fears perhaps underscores Holmes’ willingness to achieve her aspirations at whatever cost necessary. As the documentary elucidates, the name Edison carries with it a similar narrative to Holmes: Edison had secured immense financial and social backing years before he realized his lightbulb. Four years into his scientific trials, as his money and reputation were dwindling, he finally produced a filament that remained lit, inaugurating the lightbulb and, with it, the mythology of a “fake it until you make it” success story.

Holmes set out to disrupt an industry monopolized by Quest Diagnostics and LabCorp, a risky move that, as a shrewd businesswoman, Holmes recognized would require the backing of a highly credible Board of Directors and investors. Gathering together former government and business officials, including George Shultz, Henry Kissinger and Betsy DeVos, Holmes aligned herself with powerful people who brought along with them military contracts that remained incredibly vague and legal protections that served to intimidate any employees who thought about violating the complex and convoluted nondisclosure agreements.

As stories of Theranos’ success spread, journalists continued to pry into the inner-workings of the company, requests that Holmes creatively avoided, sequestering parts of Theranos’ Silicon Valley headquarters whenever reporters and investigators stopped by. In a series of enlightening interviews in the documentary, former employees recall her choreographed tactics, as well as the immense degree of scrutiny and distrust under which everyone in the lab operated. One employee describes Holmes leading a group of investors into a conference room to demonstrate the Edison’s blood test capabilities, only to then send the sample into a downstairs lab to have it tested on industry-standard Siemens lab technology while the investors took a highly curated tour of the facilities, returning to the conference room to find their lab results presented as if rendered by the Edison.

As Holmes’ venture once came close to bankruptcy, she struck a major deal with Walgreens to offer preliminary Edison testing at select locations. Customers were welcomed to choose from an a la carte menu of lab tests, submitting a nanotainer of their blood, which, instead of being tested with an Edison on-site, was shipped to Theranos’ facility in Palo Alto, where it was often diluted for testing in an Edison, which produced strikingly erratic test results, or it was tested on Theranos’ purchased Siemens machines. The results from each contraption often differed tremendously.

The Walgreens chapter of Theranos’ history cost the company a fortune in customer compensation once Holmes’ fraud was realized. Despite the obvious dangers to patient safety that tampering with a sample can produce, Theranos was never able to deliver the Edison testing on-site that it intended to offer at Walgreens, and only a minuscule selection of the lab tests on the menu were able to be performed with the small quantity of blood contained in a nanotainer. For any other tests, shocked customers found themselves paying extra for intra-venous blood drawings, the very procedure the Edison was meant to eradicate.

While the entire scandal appears almost blatant in its overarching fraud, Holmes and her business partner Ramesh “Sunny” Balwani maintain their innocence, still believing in the promise of personalized health care. As she undergoes law suits and trials, Holmes continues to seek funding for projects. Despite her media and financial peril, Holmes is strikingly optimistic and steadfast, refusing to realize any fault in her vision. As the excellent documentary can attest, perhaps it is this near-delusional confidence that persists as Holmes’ most enduring invention.