There have always been spectacular stories of lies and deceit in Silicon Valley—tales that span decades, of founders telling half-truths about how their companies were founded, or who founded them; of C.E.O.s exaggerating their latest products to fool the press or induce new funding. In the tech world, these falsehoods are so pedestrian that they have received the moniker “vaporware”: empty vessels that are promoted as complete products despite the knowledge that they will never see the light of day. Over time, the exhalations of these tech C.E.O.s became less about the actual lie, and more about who could deliver it with the utmost persuasion. I remember getting a call from Steve Jobs in the beginning of my career at The New York Times, in which the mythological chief of Apple somehow convinced me not to write a story about a software-related privacy problem. After 45 minutes on the phone with Jobs, I walked over to my editor and convinced him to kill the story. Yet a week later, I realized I’d been duped by Jobs. When I told a seasoned colleague at the Times, he simply laughed and explained, “Welcome to the Steve Jobs Reality-Distortion Field.” Jobs’s chicanery helped birth a whole new strain of tech nerd who believed that, in order to be as successful as King Jobs, you had to be the best used-car salesman in the parking lot. Some C.E.O.s told taradiddles, exaggerating the number of users on their platforms (ahem, Twitter); some in Congress say Mark Zuckerberg lied when he told Congress that people on Facebook have “complete control” over their personal data. (They don’t.) But all of these, all these made-up numbers, concocted valuations, and apocryphal stories of how a company was realized in a garage, are nothing—nothing!—compared to the audacious lies of Elizabeth Holmes, the founder and C.E.O. of Theranos.
Ahh, the story of Holmes, the dedicated Stanford dropout who was set to save the world, one pinprick of blood at a time, by inventing, at 19 years old, a blood-testing start-up which was once valued at almost $10 billion. For years, Holmes was on top of the tech world, gracing the cover of T: The New York Times Style Magazine, Forbes, Fortune, and Inc.,always wearing a black turtleneck and often sitting next to the title: “The Next Steve Jobs.” She was written about in Glamour and The New Yorker. She spoke at the TechCrunch Disrupt conference in 2014, and appeared on Vanity Fair’s New Establishment List in 2015. But as The Wall Street Journal’s John Carreyrou details in his new book, Bad Blood: Secrets and Lies in a Silicon Valley Startup, almost every word coming out of Holmes’s mouth as she built and ran her company was either grossly embellished or, in most instances, outright deceptive.
As Carreyrou writes, the company she built was just a pile of one deceit atop another. When Holmes courted Walgreens, she created completely false test results from their blood tests. When the company’s chief financial officer found out, Holmes fired him on the spot. Holmes told other investors that Theranos was going to make $100 million in revenue in 2014, but in reality the company was only on track to make $100,000 that year. She told the press that her blood-testing machine was capable of making over 1,000 tests, when in reality, it could only do one single type of test. She lied about a contract Theranos had with the Department of Defense, when she said her technology was being used in the battlefield, even though it was not. She repeatedly made up complete stories to the press about everything from her schooling to profits to the number of people whose lives would be saved from her bogus technology. And she did it all, day in and day out, while ensuring that no one inside or outside her company could publicly challenge the truthfulness of her claims.
While people like Jobs, Zuckerberg, Elon Musk, and other titans might stretch the truth and create reality-distortion fields, at the end of the day, they’re doing so to catapult their business—and to protect it. But when it came to Holmes, it seems there was no business to begin with. The entire house of cards was just that, a figment, nothing real. So what was she trying to get out of all these stories? On this week’s Inside the Hive podcast, I sat down with Carreyrou to try to understand how Holmes acted with such deceit, knowing full well that the technology she was selling, technology that was used to perform more than 8 million blood tests, according to Carreyrou, was putting people’s lives in danger. The obvious question to seeing someone act that way, with such utter disregard for how her actions would destroy other people’s lives, is to ask: is she a sociopath?
“At the end of my book, I say that a sociopath is described as someone with no conscience. I think she absolutely has sociopathic tendencies. One of those tendencies is pathological lying. I believe this is a woman who started telling small lies soon after she dropped out of Stanford, when she founded her company, and the lies became bigger and bigger,” Carreyrou said. “I think she’s someone that got used to telling lies so often, and the lies got so much bigger, that eventually the line between the lies and reality blurred for her.”
When I asked if she feels guilty for all the people’s lives who were affected by those lies, including the investors who lost money, the nearly 1,000 employees who lost their jobs, and the patients who were given completely inaccurate blood results, Carreyrou’s response surprised—shocked?—me. “She has shown zero sign of feeling bad, or expressing sorrow, or admitting wrongdoing, or saying sorry to the patients whose lives she endangered,” he said. He explained that in her mind, according to numerous former Theranos employees he has spoken to, Holmes believes that her entourage of employees led her astray and that the bad guy is actually John Carreyrou. “One person in particular, who left the company recently, says that she has a deeply engrained sense of martyrdom. She sees herself as sort of a Joan of Arc who is being persecuted,” he said.
Believe it or not, that’s not the most astonishing thing in the Elizabeth Holmes story. According to Carreyrou, Holmes is currently waltzing around Silicon Valley, meeting with investors, hoping to raise money for an entirely new start-up idea. (My mouth dropped when I heard that, too.) As the dust settles in the Theranos saga, it’s clear that the original investors in Theranos were gullible enough to hand over almost a billion dollars in funding, partially because, when it comes to Silicon Valley, there’s always a sucker hoping to get rich quick. (...)
The Theranos story isn’t over just yet. While she recently settled with the S.E.C. for “massive fraud” as part of the agreement, Holmes is not required to admit wrongdoing, but she has been forced to surrender voting control of Theranos and comply with a 10-year ban from serving as director or officer at any public company (Theranos, ironically, wasn’t public.) Holmes also agreed to return 18.9 million shares of stock, once worth almost $5 billion and now worth nothing, and to pay a small $500,000 penalty. Of course, there is still a major criminal investigation underway by the F.B.I., one that could end with Holmes behind bars. But not to worry: Holmes has lots of prosecutorial quotes she can borrow from Joan of Arc if she stands trial. “I am not afraid . . . I was born to do this.”
Ahh, the story of Holmes, the dedicated Stanford dropout who was set to save the world, one pinprick of blood at a time, by inventing, at 19 years old, a blood-testing start-up which was once valued at almost $10 billion. For years, Holmes was on top of the tech world, gracing the cover of T: The New York Times Style Magazine, Forbes, Fortune, and Inc.,always wearing a black turtleneck and often sitting next to the title: “The Next Steve Jobs.” She was written about in Glamour and The New Yorker. She spoke at the TechCrunch Disrupt conference in 2014, and appeared on Vanity Fair’s New Establishment List in 2015. But as The Wall Street Journal’s John Carreyrou details in his new book, Bad Blood: Secrets and Lies in a Silicon Valley Startup, almost every word coming out of Holmes’s mouth as she built and ran her company was either grossly embellished or, in most instances, outright deceptive.As Carreyrou writes, the company she built was just a pile of one deceit atop another. When Holmes courted Walgreens, she created completely false test results from their blood tests. When the company’s chief financial officer found out, Holmes fired him on the spot. Holmes told other investors that Theranos was going to make $100 million in revenue in 2014, but in reality the company was only on track to make $100,000 that year. She told the press that her blood-testing machine was capable of making over 1,000 tests, when in reality, it could only do one single type of test. She lied about a contract Theranos had with the Department of Defense, when she said her technology was being used in the battlefield, even though it was not. She repeatedly made up complete stories to the press about everything from her schooling to profits to the number of people whose lives would be saved from her bogus technology. And she did it all, day in and day out, while ensuring that no one inside or outside her company could publicly challenge the truthfulness of her claims.
While people like Jobs, Zuckerberg, Elon Musk, and other titans might stretch the truth and create reality-distortion fields, at the end of the day, they’re doing so to catapult their business—and to protect it. But when it came to Holmes, it seems there was no business to begin with. The entire house of cards was just that, a figment, nothing real. So what was she trying to get out of all these stories? On this week’s Inside the Hive podcast, I sat down with Carreyrou to try to understand how Holmes acted with such deceit, knowing full well that the technology she was selling, technology that was used to perform more than 8 million blood tests, according to Carreyrou, was putting people’s lives in danger. The obvious question to seeing someone act that way, with such utter disregard for how her actions would destroy other people’s lives, is to ask: is she a sociopath?
“At the end of my book, I say that a sociopath is described as someone with no conscience. I think she absolutely has sociopathic tendencies. One of those tendencies is pathological lying. I believe this is a woman who started telling small lies soon after she dropped out of Stanford, when she founded her company, and the lies became bigger and bigger,” Carreyrou said. “I think she’s someone that got used to telling lies so often, and the lies got so much bigger, that eventually the line between the lies and reality blurred for her.”
When I asked if she feels guilty for all the people’s lives who were affected by those lies, including the investors who lost money, the nearly 1,000 employees who lost their jobs, and the patients who were given completely inaccurate blood results, Carreyrou’s response surprised—shocked?—me. “She has shown zero sign of feeling bad, or expressing sorrow, or admitting wrongdoing, or saying sorry to the patients whose lives she endangered,” he said. He explained that in her mind, according to numerous former Theranos employees he has spoken to, Holmes believes that her entourage of employees led her astray and that the bad guy is actually John Carreyrou. “One person in particular, who left the company recently, says that she has a deeply engrained sense of martyrdom. She sees herself as sort of a Joan of Arc who is being persecuted,” he said.
Believe it or not, that’s not the most astonishing thing in the Elizabeth Holmes story. According to Carreyrou, Holmes is currently waltzing around Silicon Valley, meeting with investors, hoping to raise money for an entirely new start-up idea. (My mouth dropped when I heard that, too.) As the dust settles in the Theranos saga, it’s clear that the original investors in Theranos were gullible enough to hand over almost a billion dollars in funding, partially because, when it comes to Silicon Valley, there’s always a sucker hoping to get rich quick. (...)
The Theranos story isn’t over just yet. While she recently settled with the S.E.C. for “massive fraud” as part of the agreement, Holmes is not required to admit wrongdoing, but she has been forced to surrender voting control of Theranos and comply with a 10-year ban from serving as director or officer at any public company (Theranos, ironically, wasn’t public.) Holmes also agreed to return 18.9 million shares of stock, once worth almost $5 billion and now worth nothing, and to pay a small $500,000 penalty. Of course, there is still a major criminal investigation underway by the F.B.I., one that could end with Holmes behind bars. But not to worry: Holmes has lots of prosecutorial quotes she can borrow from Joan of Arc if she stands trial. “I am not afraid . . . I was born to do this.”
by Nick Bilton, Vanity Fair | Read more:
Image: Jeff Chiu/AP
