One of the first things you notice about Elizabeth Holmes is that she rarely blinks. As she reels off pat answers to warm-up questions in the first few minutes of HBO’s new documentary The Inventor, it is hard to look away from her wide open eyes.
What do you dream will happen by 2025? “That less people will have to say goodbye too soon to people that they love.” Holmes nods when she speaks. You find yourself nodding with her.
Which makes what happens next more striking. “Can you tell us a secret?” asks the interviewer. The eyes break away from the camera. Blink, blink, blink. It is 7 seconds before Holmes answers, eyes down. “I don’t have many secrets, um … ”
Tracking Theranos in numbers
The rise and fall of her company Theranos (a mash-up of “therapy” and “diagnosis”) can be told in numbers. She founded it in 2003 aged 19, dropping out of Stanford University in California. Over the next decade, she raised nearly $ 900 million from investors. At its peak, Theranos was valued at nearly $ 10 billion, and Holmes, in her 20s, owned more than half.
The company claimed to have invented blood-testing tech that could diagnose 200 conditions in a few minutes from a pinprick of blood from a finger tip.
Walgreens, the second-largest pharmacy chain in the US, installed Theranos blood-testing booths in about 40 of its stores.
But most tests never worked. A former employee said that if 100 people had syphilis, only 65 tested positive. In the end, only one of the 200 tests was cleared by US regulators for use. When a Wall Street Journal reporter exposed the gap between the wild claims and reality, Theranos unleashed its lawyers. One whistle-blower’s family faced having to sell their home to cover legal fees.
Holmes couldn’t outrun the truth, though. By 2017, Theranos had burned through nearly a billion dollars, a third on lawyers, settling lawsuits with investors and refunding every patient who took one of its blood tests. In 2018, Holmes and company president Sunny Balwani were indicted on nine counts of fraud. They say they aren’t guilty, the trial is pending, and Theranos has closed down.
So smart, so dumb
How could so many smart people have been duped for so long? From the outset, she signed impressive investors, including media mogul Rupert Murdoch and the founder of computer giant Oracle, despite having nothing to show them. Channing Robertson, head of science at Stanford, was recruited as an advisor – and the first board member. Her board of directors included Henry Kissinger, and she made friends with Bill Clinton.
Journalist Ken Auletta talked to many of these people for a New Yorker profile of Holmes. He was struck by how they spoke of her: “It was quite amazing to spend time with these people. They were talking about her as if she was Beethoven.” Kissinger told Auletta that Holmes had an ethereal quality, and compared her to a member of a monastic order.
Holmes certainly presented herself as an ascetic, telling journalists her apartment was the size of a mattress, that her fridge contained only bottled water and she slept for just 4 hours a night.
But she was just very good at convincing people. In a bravura performance at a Wall Street Journal conference, she defended her company against the paper’s allegations. Theranos seemed to be collapsing, yet most investors and advisors stood by her.
The Inventor places Holmes in a line of entrepreneurs who wanted to change the world, suggesting little more than that she may have drunk too much of her own Kool-Aid. True, Holmes located her start-up in a corner of Silicon Valley where Steve Jobs, Mark Zuckerberg and Elon Musk made their names. She even wore Jobs-style black turtlenecks.
The Edison connection
But the film also traces her lineage to Edison (the other “inventor” in the film’s title), presenting him as “the first celebrity businessman”. Eerily, Holmes named her prototype blood-testing machine “Edison”.
The real Edison also pretended things worked when they didn’t. He sold people on his light bulb before he’d made one, faking demos and giving sceptical journalists shares in his company. The film cites one of his most famous quotes: “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” It’s the stuff of bad posters, but among Silicon Valley’s wannabe billionaires, such self-belief borders on the delusional.
Did Edison know he was going to succeed and was buying time until he did? Is this what Holmes did – or thought she was doing?
Then the tech didn’t work…
Her self-belief must have been catching. Walgreens signed with Theranos before it had any results. Had Walgreens visited Theranos, as employees explain in the film, it would have found broken parts, exploded centrifuges and mechanisms gummed with sticky blood, and people working mostly with blood from untested volunteers, scared of hepatitis.
Many employees knew Holmes’s machine couldn’t be built. As one says: “You can’t just bend your way around the laws of physics. You can’t just have a great marketing campaign and get around these things.” If they told senior management, they would be told “maybe you’re not a Silicon Valley person”.
Ian Gibbons, Theranos’s chief scientist,was pushed out. Facing a legal battle involving the company, he took his own life. According to his widow, the only time the company contacted her after his death was to request she return his confidential files.
The film shows how Holmes and Balwani created a culture of paranoia. Holmes had bulletproof glass installed in her office and hired personal bodyguards. Employees realised their emails were being read when they didn’t copy in Balwani or Holmes, and still got a response from Balwani.
Holmes said the high security was to protect trade secrets. But it was probably justified for other reasons. Employees quoted in the film say Theranos was engaging in dubious practices, including using commercially available machines to analyse patients’ blood.
To stall for time, Theranos flooded investigators from the US Food and Drug Administration with information, and sent the US agency in charge of clinical labs only data from the commercially available machines.
What was Holmes thinking?
We still don’t know what Holmes was thinking. It was not a cold-blooded scam, says one whistle-blower. “It started off as one lie and snowballed.”
Perhaps the film’s best insight comes from Dan Ariely at Duke University in North Carolina. He describes an experiment where he asks people to roll dice, telling them they will get paid what the die face shows if it is the number they were thinking of. Of course people lie – as playing hooked up to a lie detector confirms. If the money is going to charity, players still lie but defeat the lie detector. “If it’s for a good cause, you can still think of yourself as a good person,” says Ariely.
But can a dice game explain a decade of deceit? Holmes’s secrets may emerge in court. But when it comes to it, for all its insight, The Inventor leaves us with the same questions it started with.
The Inventor: Out for blood in Silicon Valley, directed by Alex Gibney, HBO
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