A new documentary explores the scandal that engulfed Elizabeth Holmes’s now-infamous biotech startup.
‘There’s no shortcut to really hard work,” Elizabeth Holmes claimed in the short-lived glory days of her multi-billion-dollar biotech startup Theranos. “And we learned so much more from our failures than we did from our successes.”
In that case Holmes must be one of the most learned people in Silicon Valley. In a few years she went from a 19-year-old Stanford dropout to a media superstar with a net worth pegged at $4.5 billion to a much-derided figure with a net worth of exactly $0.00 and U.S. attorneys on her tail. Last June, she pleaded not guilty to charges of wire fraud.
Aping Steve Jobs in a trademark black turtleneck, Holmes set about creating the Apple of health care. She vowed that Theranos would revolutionize blood testing through a new gizmo called an Edison that could, with just a few drops of blood taken via a finger prick, run hundreds of diagnostic tests cheaply. Exciting stuff, and Holmes expertly preyed on people’s hopes, sketching out in interviews “a world in which no one ever has to say goodbye too soon” because of her life-saving devices. No one, eh?
That’s the kind of blue-sky thinking that defines the tech industry, though. In his penetrating new HBO documentary The Inventor: Out for Blood in Silicon Valley, the Oscar-winning filmmaker Alex Gibney weighs Holmes’ alleged fraud in the context of the fantasyland that is Silicon Valley, a place fueled not only by windmills and solar panels but also by heaps of B.S. One major investor, Tim Draper, happily admits to having bought into a lot of ideas when they were just fuzzy dreams — “we invest in a girl and a dog or two guys and a cat” — and made a fortune doing so.
Thomas Edison himself was an expert in massaging narratives, Gibney points out, buying off journalists by giving them shares in his company, then spending four years stalling for time with investors after he falsely claimed he had figured out the incandescent light bulb. All is forgiven if you eventually deliver, and Gibney is sympathetic to the idea that Holmes wasn’t necessarily lying so much as overpromising.
Still, there were reasons that Holmes’s shtick should have set off B.S. detectors. Her board was stocked with the likes of George Schultz, Jim Mattis, Sam Nunn, and Henry Kissinger. She also charmed, among others, Joe Biden, John McCain, and Bill Clinton. Anything jump out at you about these names? All old men, possibly susceptible to the charms of a bright-eyed young blonde. (“She has a sort of ethereal quality,” Kissinger once said. “She is like a member of a monastic order.”) Also, none of them are medical or engineering experts. A 2014 Ken Auletta profile in the New Yorker said Holmes’s description of what went on inside her portable laboratory was “comically vague.” This phrase piqued the interest of Wall Street Journal reporter John Carreyrou, who thought Holmes sounded like “a high-school chemistry student” rather than a scientific genius. His subsequent exposé on Theranos’s practices brought down the company, with the aid of a couple of internal whistleblowers.
Gibney, whose many previous docs include Sinatra: All or Nothing at All and Going Clear: Scientology and the Prison of Belief, chronicles how 700 employees, burning through hundreds of millions of private capital, tried to bring Holmes’s vision to life but kept running into barriers — like the laws of physics. Those who pointed out the impossibility of what they were being asked to accomplish would be told, sniffily, that they weren’t Silicon Valley material and could easily be replaced. Techs would simply fake results by, for instance, sneaking the samples out of the machines and taking them out to actual labs for analysis. One employee who tried to fix the machines describes what it was like reaching into the Edison, which ground up glass vials as contaminated blood sloshed around, and it sounds like something from a Saw movie. (Playing up the dread, Gibney plasters the soundtrack with intrusive, annoying music that sounds like it came from a movie about demonically possessed children). While all of these technical problems were mounting, Holmes would spend her time doing photo shoots, wooing VIPs, and having long meetings to discuss details like what to call the company cloud service. She came up with “Yoda.”
The director brings in the behavioral economist Dan Ariely for some astute thoughts on the psychology behind the seeming insanity, but for me the most cutting observation in the movie comes from a tech veteran who takes a look at Silicon Valley from about 10,000 feet and isn’t so impressed. “Silicon Valley is,” he says, “really great at making a chat app with emojis on it. But [now] Silicon Valley is trying to do things where people’s lives are on the line. They’re trying to make autonomous vehicles. They’re trying to make medical devices.”
Based on what you know about the Valley, how good do you feel about entrusting any of these whiz kids with your life?