The Theranos story is interesting to PG for a variety of reasons. However, he thinks this particular part of the story may be of interest to authors for the construction of characters.
The principal character in the Theranos story is CEO Elizabeth Holmes, who managed to attract very smart investors and keep the Theranos story alive and vibrant for quite a long time while the company’s products were failing to work.
From Fast Company:
The Theranos story got everyone’s attention because it involved all the ingredients for a classic drama—hubris, greed, big personalities, and fraud. The blood-testing tech startup’s rise and fall, from a $9 billion valuation and CEO Elizabeth Holmes posing for magazine covers to revelations that its technology didn’t work and being targeted with multiple federal and state investigations, is by now legendary. But the story wouldn’t have been told without the reporting of the Wall Street Journal‘s investigative dynamo John Carreyrou, who doggedly asked the tough questions that punctured the unicorn’s facade and exposed Holmes’s lies.
Carreyrou tells the tale in his new book, Bad Blood: Secrets and Lies in a Silicon Valley Startup, which goes on sale on Monday, May 21, and has been optioned for a feature film starring Jennifer Lawrence and helmed by The Big Short director Adam McKay.
. . . .
Fast Company: What made you first suspect that something might be a little fishy about Theranos?
John Carreyrou: The absolute first tip-off was reading the Ken Auletta profile in the New Yorker. Even though [Elizabeth Holmes] had risen to fame six months prior, she only got on my radar screen with that story.
I read it with interest and some of the details struck me as off—one of them was that she’d dropped out of Stanford after only a year and a half to start a medical startup. And I thought that was weird. You can do that with computer stuff but not really with science and medical research. And another thing was the absence of peer review publications, which Ken Auletta to his credit pointed out. And also her quote summarizing how the technology worked. I thought that was ham-handed.
But to be fair, I probably wouldn’t have done anything if I hadn’t been approached by Adam Clapper, a blogger who’d written a short skeptical item pegged to the New Yorker story.
. . . .
FC: What is your advice for journalists covering Silicon Valley, where there is so much cheerleading by the media?
JC: Everyone out there covering the Valley should have some healthy skepticism and not fall into the trap of cheerleading all the time. I think that Silicon Valley has become one of the most fascinating beats in the country. If you’re a journalist today, it’s really become an important part of the American economy—all this innovation but all this pretending and rule-breaking and these larger-than-life personalities. It’s a fascinating beat. I would love, if I were a young reporter in the early part of my career, I would really be happy to cover Silicon Valley.
. . . .
FC: That’s amazing that some didn’t ask for something as basic as the [Consolidated Financial Statement].
JC: What Holmes did very successfully was that she positioned Theranos as a classic tech company and investors allowed her to do that. In tech, maybe you need to do less digging and less forensic due diligence because it comes down to programming and coding. But actually, Theranos was first and foremost a medical technology company—that involves medical research and science.
Those investors who came in after 2013 allowed her to make them forget that. They should have been asking those questions, hiring scientific consultants to ask how she had solved problems in physics and chemistry that thousands of researchers had struggled to do.
Link to the rest at Fast Company
For those not familiar with Elizabeth Holmes and Theranos, here’s a link to an article in The New Yorker referenced in the OP.
I was in the middle of the VC culture from 2000-2007, and what a horrible thing that was (is). All these arrogant kinglets that needed to be approached with what amounted to Sun King protocol who, by and large, paid very little attention to the viability of the companies they invested in.
It was a consume-and-die operation for them: invest in 10 companies and expect 7 to die, 2 to break even, and 1 to carry the losers and maybe do unusually well. No point spending any advisory time on any but the 1. The number of young inventors/founders who were dumped into the deep end of the pool and left to drown with no help other than initial money was (is) staggering.
I was a generation older and not dependent on VCs, but as a spectator, listening to the them boast about their toys (Ferraris, etc.) at speaking engagements was revolting.
The Theranos debacle couldn’t have happened to a better bunch of investors. I was cheering it on as a probable fraud from the first time I heard about it (having been involved in a much earlier startup version of a non-invasive blood glucose monitor, equally though less successfully fraudulent).
I was slow in hearing about her and Thanos. By the time something got my attention, there had been a ton of press. The initial description looked like it would be fantastic if it worked as intended. However, early on in my looking at it, I hit an article that was heavy on quotes from her and I had late 90s flashbacks. She sounded like she was seriously over promising for something that didn’t have a working example yet. Quotes were absent the qualifiers that I’d typically see from execs. The language style sounded like late Internet bubble stories. I couldn’t know, but that style combined with the focus in articles on her personal story (accompanied always by fashion like photos) made me suspicious about the wisdom of sinking large sums of money into that operation as VCs were doing at that time.
I’ve been following this story for quite a while and have the book pre-ordered. Elizabeth is a piece of work.
I’m 9th on the waiting list at library.