Her story started with the fear of needles.
According to her narrative, she, her mother, and her grandmother fainted at the sight of needles and at the sight of blood. She later told her audience that she imagined blood tests that would only require a pinprick. A drop of blood or two would be all that is required to detect dozens of medical conditions. All in approximately four hours. Blood testing can be quick, convenient, and inexpensive.
In 2003, she was all of 19 years and was a chemical engineering student at Stanford University. She decided to drop out of college. She launched her own company.
A year after, her company – Real-Time Cures – had raised six million dollars from investors. In early 2006, the company raised an additional 9.9 million dollars. And in 2010, she was able to raise another 45 million dollars. At that time, her company was valued at US1 billion.
Her board of directors includes former Secretaries of State George Shultz and Henry Kissinger, former Director of Center for Disease Control William Foege, former Defense Secretary William Perry, and former C.E.O. and chairman of Wells Fargo Richard Kovacevich. Reported investors include Larry Ellison of Oracle, and Rupert Murdoch of News Corp.
She was first profiled in Inc. magazine in 2006. The article wrote, “Many entrepreneurs like to say they’re out to change the world. She is staying true to her promise. At the age of 20, she designed a device with the goal of saving the estimated 100,000 people who die each year from adverse drug reactions.”
She was subsequently featured in Fortune and later Forbes magazine, with the latter naming her as “the youngest self-made female billionaire in the world.” In 2014, she was included in Forbes’ list of the 400 wealthiest American list, with a projected net worth of US4.5 billion.
She was named by then President Obama to serve as a U.S. Presidential Ambassador for Global Entrepreneurship. She was invited to be a member of the Harvard Medical School Board of Fellows. She was the youngest person ever to be awarded the Horatio Alger Award in recognition of “remarkable achievements accomplished through honesty, hard work, self-reliance and perseverance over adversity.” She was on stage at the Clinton Global Initiative and the World Economic Forum at Davos. In 2015, she was included in Time magazine’s 100 Most Influential People in The World.
Her company, now renamed Theranos (from “therapy” and “diagnosis”), was featured twice by Wired magazine. The feature touted the company’s ability “to run 30 lab tests with a single drop of blood.” Theranos has reportedly partnered with pharmacy chain Walgreens to distribute its “technology” to the latter’s wellness centers. However, the company had yet to disclose how this works or would work.
In December 2014, she, Elizabeth Holmes, founder of Theranos, was profiled in The New Yorker. Pulitzer-winning John Carreyrou of the Wall Street Journal read the same article, entitled “Blood, Simpler”. To his recollection, Holmes’ explanation of how her technology would work sounded naïve, “more like a high school student than a sophisticated laboratory scientist.” He also found it strange that “nothing that she had supposedly discovered had undergone peer review.”
Less than a month after, Carreyrou received a tip from a practicing pathologist who shared the same skepticism. Consequently, he spoke with and interviewed several former Theranos employees. There was only one single revelation. Theranos was “overselling the efficacy of its technology.” Simply, it didn’t work.
Despite protests and threats from Holmes and Theranos, John Carreyrou began and published a series of investigative articles critical of Theranos. Subsequently, the company was inspected by the FDA and Centers for Medicare and Medicard Services (CMS). According to a CMS report, Theranos shows substandard blood testing practices that “pose immediate jeopardy to patient health and safety”.
In 2016, Forbes revised Holmes’ net worth from US4.5 billion to zero.
Elizabeth Holmes and Theranos were sued by “the US Securities and Exchange Commission for fraudulently raising more than US700 million… through false or exaggerated claims.” In June 2018, Holmes was indicted by a “federal grand jury on multiple counts of fraud and conspiracy.”
One article asks the following questions, “How did Holmes get so many big-name companies and board directors behind her vision? How did she raise so much money at such a high valuation? How did she garner so much media attention for technology that can’t deliver on its claims?”
An exclusive report published in Vanity Fair explained that stories such as Elizabeth Holmes’ are buoyed by venture capitalists (VC’s), entrepreneurs, and the tech press. VC’s behave like gamblers who “bet a little bit on every company that they can with the hope that one of them hits it big.” Entrepreneurs work mostly on meaningless stuff, and “generally glorify their efforts by saying their innovation could change the world”. And the press, they want to get scoops to generate page views.
In this story, it was Elizabeth Holmes.
Don’t we all have similar stories to tell?
Real Carpio So lectures at the Ramon V. del Rosario College of Business of De La Salle University. He is an entrepreneur and a management consultant. Comments are welcomed at firstname.lastname@example.org. Archives can be accessed at realwalksonwater.wordpress.com. The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.