On Monday, January 3rd, a jury found Elizabeth Holmes guilty on four criminal fraud charges.
They concluded she intentionally lied to investors to raise heaps of money for her startup.
Theranos promised to revolutionize the healthcare industry.
It claimed it could detect a wide range of diseases with just a few drops of blood.
But it was all a lie.
And Holmes KNEW it, according to the jury.
Yet she continued to tout the technology.
Even convincing the likes of Oracle founder Larry Ellison and media magnate Rupert Murdoch
to invest in Theranos.
At one point, Theranos was valued at $9 billion.
This is the story of how she managed to pull it off and how it all fell apart.
Before Elizabeth Holmes headed off to Stanford to study chemical engineering, her parents
gave her a copy of Marcus Aurelius’ “Meditations,” in which the Roman emporer argued we each
have a purpose.
For many years, she fooled people into thinking she was indeed living a purposeful life.
She dropped out of Stanford when she was 19 to build a device that she claimed could perform
hundreds of medical tests - everything from cholesterol levels to cancer -- with a few
drops of blood from a finger prick.
She sold the dream of making the world a better place by helping people diagnose diseases
WITHOUT the need to get their blood drawn.
She always appealed to ethos.
To me, nothing matters more than what people go through when someone they love is found
out to be really, really sick.
She frequently cited the death of a beloved uncle to skin cancer as the reason why her
faster, cheaper, and painless tests would make blood testing a routine habit.
Who could resist such a story from a woman who many compared to the late Apple CEO - not
only because they both had a penchant for wearing black turtlenecks.
To me, it’s reasonable to compare you - I usually don’t do this - to Steve Jobs.
I regard you as a visionary, next-generation person.
Is this the kind of ridiculous pressure somebody needs?
Steve Jobs was.
I don’t think there is another Steve Jobs.
He was a phenomenal entrepreneur.
We’ve got an incredible opportunity to try to uphold a legacy in Silicon Valley of changing
the world.
Disrupting.
We’re working 24/7 to do that.
Well, I understand that’s exactly how you work.
Everyone bought what she was selling.
It certainly helped that Holmes had a star-studded Board to back her up.
Including former secretary of states Henry Kissinger, George Shultz, former secretary
of defense William Perry, retired Marine Corps four-star general James Mattis, former head
of the CDC William Foege, and former majority leader of the U.S. Senate, Bill Frist.
It was only a matter of time before Holmes started receiving glowing media attention.
Gracing cover after cover after cover.
Forbes labeled her the youngest self-made female billionaire.
Holmes did everything she could to polish her image.
Some say she even faked a deeper voice to better fit into the male-dominated business
world.
In this interview from 2005, we hear Holmes using a higher-pitched voice before appearing
to switch to a lower one.
Holmes checked off all the boxes to become the darling of Silicon Valley.
She dropped out of a prestigious school.
She was young.
And secretive about her innovation.
In the world of tech, a certain mystique was the norm, just like how Apple operated under
jobs.
She took investors’ money on the condition that she wouldn’t have to reveal how Theranos’
technology worked.
No peer-reviewed scientific articles existed to back up its claims.
Not everyone was so easily fooled, however.
John Carreyrou who was then a reporter at the Wall Street Journal, exposed Theranos
for what it was in a series of articles in 2015 and later a best-selling book.
He reported that Theranos’ blood-testing machine couldn't give accurate results, so
Theranos secretly ran its samples through machines used by traditional blood-testing
companies.
Everything Holmes did was strategic, down to the name of her company’s testing device.
Holmes named her machine Edison after Thomas Edison, who famously said: "I have not failed.
I've just found 10,000 ways that won't work."
Holmes referenced Edison’s quote during a commencement address at Pepperdine University
when she said: "We code-named our product the Edison because we assumed we’d have
to fail 10,000 times to get it to work the ten-thousand-and-first.
And we did."
(2015) Except, they didn’t.
Walgreens reportedly brought Theranos tech into its pharmacies without even testing the
technology.
The first patient to testify against Elizabeth Holmes was Brittany Gould, who took a Theranos
test at a Walgreens, which revealed she was miscarrying.
It would have been her fourth miscarriage.
To be safe, she decided to take tests at a different clinic that confirmed she was, in
fact, still pregnant.
She eventually gave birth to a healthy baby girl.
During the trial, Holmes’ lawyers argued that it wasn’t she who was deceiving the
public but that she was herself deceived.
She claimed Theranos’ COO Sunny Balwani, whom she had been dating, had manipulated
her.
But prosecutors weren’t buying it.
Prosecutor Jeff Schenk said in his closing arguments: “She chose to be dishonest with
investors and patients.
That choice was not only callous, it was criminal.”
The jury agreed, finding her guilty on four of 11 charges of fraud.
She faces up to 20 years in prison.
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Thanks for watching.
For Newsthink, I’m Cindy Pom.