Theranos – The End
Today Elizabeth Holmes, founder and CEO of Theranos, was convicted on four counts of wire fraud. It is worth noting there were four other charges she was found not guilty in and three other counts the jury couldn’t reach any agreement on. It is possible that a sentence of four to five year may follow but the sentence here may not be the main thing. Finally, a Silicon Valley founder, who promised investors the moon before showing them cheese, has been held accountable and convicted for their lying, fraud and criminal actions and you hope this could be the start of many more such cases to follow because, we all know, Silicon Valley is full of this bullshit on a daily basis.
I have followed the Theranos story for a while. Read all the books, listened to all the podcasts and am awaiting the film. It is a story that really gripped me because it has so many elements. Technological innovation, sex, media manipulation, bribery, blackmail, suicide and lots more. It is a cautionary tale of how the media can create monsters of ordinary people by selling their delusions and aiding their pursuit of wealth. Theranos at one point was worth over $9 billion, giving Holmes and her crony Sunny Balwani more than enough financial muscle to threaten, crush and manipulate their fraud many times over. The media made Holmes a rock star innovator, putting her on a pedestal most will never even dream of, without even doing the basic amount of journalism to verify her background, her ideas or her technology. Elizabeth Holmes may have perpetrated this fraud but she had plenty of accomplices. Willing and unwilling.
I have read many pieces since her being charged and since the trial of sexism. How she is facing the music over her tall claims, where as most of Silicon Valley does the same and perhaps, gets away with it as they are men. This seems to be a popular narrative as well. Whereas I agree that there is some merit in the idea that Holmes’ behaviour is part of the Tech entrepreneur play book in Silicon Valley, I don’t buy the whole ‘hang her she’s a witch’ analogy. She simply placed herself on a higher pedestal and when she screwed up, fell from a bigger, much more visible height. She also rubbed a bunch of people the wrong way and when those people decided to dig, they dug relentlessly and as we now know, there were plenty of skeletons in the closet.
Clearly though you hope this conviction, whatever the sentence, brings new light on the amount of bullshit that goes on in Silicon Valley and in tech innovation in general. Journalists and regulators are meant to do their job and be thorough about the promises these entrepreneurs are making to their investors. Yes, most are wealthy individuals and I think a lot of the time the fact that Series A or B investments are done by wealthy individuals and wealthy hedge funds, people tend to think, its not harming the common man. However we forget that these people are the ones with hands in many pies such as pension funds, banks, etc. As the 2008 crashed showed us, the finance sectors is hugely linked together and despite the meltdown, little has changed. One domino will knock down others.
The bigger issue is that many tech innovations are now happening in the word of health, lifestyle and other consumer segments. The reason Theranos was such a shit show is that they were playing with people’s lives and doing it with a bravado that was like they were making toys. Technology is touching people in so many ways nowadays that we cannot allow innovation for the sake of it without checking the consequences first. Would a machine that does hundreds of blood tests on a drop of blood be amazing? Yes. Is it possible? No. What are the consequences of getting these tests wrong? Catastrophic in some cases. There just has to be a bigger responsibility on technology innovation.
I sign off with the immortal words of Dr. Ian Malcom (Jeff Goldblum) in the first Jurassic Park movie,
“… your scientists were so preoccupied with whether or not they could that they didn’t stop to think if they should…”
