Bloodlines: The story of Theranos
Imagine that you were given a choice - between subjecting yourselves to the agonising and fearsome syringes, drawing out a vial of blood during a medical test, or, another technology that could do the same with just a pin-prick worth of the fluid. Most of you would go for the second choice( barring a few Bravehearts….)
Theranos, the $9 billion company, sought to disrupt the health-care industry with this revolutionary feat but instead ended up as the biggest fraud in the history of Silicon Valley.
Being the brainchild of Elizabeth Holmes, a Stanford dropout, Theranos began in 2003 and was initially christened as ‘Real-time-Cures’. With a vision to discover something new that mankind hadn’t thought of before, Theranos developed Edison, a machine that could run a litany of tests with a small “nanotainer” of blood and do away with the painful and pricey laboratory testing.
The projection of the technology was bait for most of the investors, apart from the like in the field of medicine, who were sceptical because of Elizabeth’s lack of knowledge as medicine requires years and years of research. Nevertheless, Theranos, in its lifetime, had managed to raise funds to the tune of $750 million. But little did the investors know that they were pouring money over a pipe dream. The Edison was a malfunctioning device. Also, to run the tests with a pinprick amount of blood meant over dilution of the fluid, which caused erratic results. To push her teams to make a breakthrough, she made them compete against each other in the survival of the fittest( with the losing team getting fired). Building merely on her illusion, Holmes also administered a pilot test with the faulty machines on cancer patients, with the company Pfizer. She kept on deceiving the investors on the true functioning capability of the devices and shut down all voices of dissent, including firing her own CFO, Henry Mosley.
On being compared to the Silicon Valley star of the time, Steve Jobs, Holmes started envisioning herself as him, to the tune that it became an obsession. She began sporting black turtlenecks, brought ex-Apple employees into the board, and even started holding marketing meetings on Wednesdays, like Jobs. She began modelling her company like the tech giant, a massive mistake. Being an impeccable manipulator, she constructed a star-studded board with members like the former US Secretary of State, Henry Kissinger, former director of US Office of Management and Budget, George Shultz and the like. Her fake deep baritone voice was a cherry on the cake and added to her appeal.
The growth of the company was coupled with deceit. In 2010, Walgreen and SafeWay, a pharmacy and a grocery chain store respectively, entered into a partnership with Theranos for creating wellness centres, where customers could avail blood tests. Promising over 192 different tests, only half of them were theoretically possible. Hence a majority of them began to be done on third party commercial machines. The fear of losing out to their competitors caused these companies to blindly invest their trust in Holmes.
Holmes gained celebrity status and came to be known as the youngest-ever self-made female billionaire. Barack Obama even made her the US ambassador for Global Entrepreneurship.
Over years of tormenting employees with non-disclosure agreements and threats of getting them fired, the dam of tolerance finally broke. John Carreyrou, a journalist at the Wall Street Journal, was approached by some early sources. As the investigation gained traction, numerous sources came forward, including Tyler Shultz, George Shultz own grandson. The publishing of the article on WSJ in October 2015, marked the beginning of the end of Theranos. Subsequent investigations by the FDA confirmed the reports and investors began suing the company, with criminal proceedings being generated.
Guided by the aphorism - ‘Fake it till you make it’, Holmes took optimistic projections and half-truths to a whole new level. The Valleys’ fetish for charismatic visionaries aided her deceit. Even after her downfall, she kept on lying about the potential of Theranos, which led many to wonder whether she was a conscious liar or someone who let her illusion ride over her rational mind.
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