Elizabeth Holmes and Theranos, Silicon Valley's biggest scam.

She was the youngest self-made billionaire in history. She was to become the next Steve Jobs - she had borrowed his turtlenecks from him.

At just 30 years old, Elizabeth Holmes was the new star of Silicon Valley.

With her business Theranos, which she started at 19 after leaving Stanford, she was revolutionizing medicine and offering a future far from injections.

The script was almost perfect, and many believed it.

One catch, however: the technology Theranos was selling to the world, a machine capable of performing hundreds of medical tests from a single drop of blood for a low cost, did not exist.

The story of Elizabeth Holmes has been told at length by John Carreyrou.

It was he who, in October 2015, signed the articles revealing the fraud that was Theranos.

The journalist then drew a book, Bad Blood, whose story is so incredible that it will later be adapted into a film by Adam McKay (The Big Short), with Jennifer Lawrence in the lead role.

It all started during a trip abroad, between the first and second year of college at Stanford with Elizabeth Holmes. “Asia was ravaged earlier, in 2003, by the spread of a previously unknown disease, SARS, and Elizabeth had spent the summer testing samples obtained with old technological methods, such as syringes or nasal swabs, writes John Carreyrou.

This experience convinced her that something better could exist. ”

Ball in mind

Less than a year later, Holmes left Stanford without his degree, but with an idea.

She hopes she can "collect huge amounts of data from just a few droplets of blood from a fingertip."

Journalist Nick Bilton recounts in an article for Vanity Fair that she opened up to one of her teachers, Phyllis Gardner, who voiced her skepticism.

It doesn't matter. Elizabeth Holmes drops out of college and sets up the business that will become Theranos.
The young woman is convinced that her idea is feasible; she will not listen to anyone explaining the opposite to her.

Tiny Silicon Valley has created more wealth than any other place in human history.

No one has any interest in saying that anything is bogus.

NICK BILTON, IN VANITY FAIR
Fairly quickly, Holmes managed to raise a lot of money, far from medical circles. The total amount raised between 2003 and 2015 reached nearly 900 million dollars (815 million euros).

"The VCs [for" venture capitalists ", venture capitalists, editor's note] bet on a bunch of companies, in the hope that one of them will eventually break through, details Nick Bilton.

Entrepreneurs often work on unnecessary things and glorify their efforts by saying that their innovation could change the world, which tends to appease VCs, because they can pretend they're not doing it just for the money.

And it also helps to seduce the press, which are often ready to play the game of interviews and exclusives for a few page views.

The financial rewards speak for themselves. Tiny Silicon Valley has created more wealth than any other place in human history.

No one has any interest in saying is bogus.

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Spiral of lies

Nothing seems to stop the rise of Elizabeth Holmes and Theranos.

Logically, the original lies always call for more lies. “At the end of my book, I write that a sociopath is described as someone who has no conscience.

I think she has sociopathic tendencies, like pathological lying, says John Carreyrou. [...]

I believe that she has become accustomed to lying so often and to exaggerating her untruths so much that the limit between lie and reality has, in her, become rather blurred. "

From his voice to the results of his machines, to financial projections, military contracts, his personal life or the alleged origins of Theranos, nothing is verified or contradicted.

When it is, Elizabeth Holmes plays the ostrich and never seems to stop sinking into her deceptions.

By playing on the “fear of missing out”, Theranos pushes everyone to put money in the basket.

The drugstore chain Walgreens thus signs a contract with the company for fear of regret later, if one of its competitors decides to do so.

The longer the list of players grows, the more potential investors think there is no risk, since everything has necessarily been verified by someone before them, summarizes the American lawyer Reed Kathrein in the podcast The Dropout.

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Well kept secret

Meanwhile, Theranos continues.

If nothing has leaked for so long, it's because a huge culture of secrecy and surveillance was established under the reign of Elizabeth Holmes and Ramesh "Sunny" Balwani, her lover and Theranos number two.

The services are compartmentalized, the staff constantly ruled. The slightest deviation and it's the door.

“Elizabeth and Sunny considered anyone who raised a concern or an objection to be a cynical or defeatist,” writes John Carreyrou in Bad Blood.

Employees who persisted were usually marginalized or fired, when the bootlickers were promoted. ”

After their departure, employees are prohibited from speaking, otherwise Theranos threatens to file a complaint for breach of company secrets or breach of confidentiality agreements.

This culture of secrecy will serve to prevent leaks on a revolutionary technology that never really saw the light of day.

Because contrary to what the company claims, its revolutionary devices, the Edison and then the miniLab, are unable to give correct results.

Staff uses  other competitor-owned machines and sometimes cheat, hand-picking certain values from the results.

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"Fake it till you make it"

Dealing with the numbers is not really an isolated behavior in the tech world, especially when it comes to companies that are still young .

Elizabeth Holmes is also the victim of a system where the “fake it till you make it” is legion.

However, we must not forget how special his case is.

“It's crucial to remember that Theranos was not a tech company in the traditional sense,” notes John Carreyrou in Bad Blood.

It was first and foremost a healthcare company. Their product was not software, but a medical device that analyzed the blood of patients.

As Holmes liked to recall in interviews and public appearances at the height of her fame, doctors base 70% of treatments on medical test results.

They expect the equipment to work as expected. Otherwise, the health of patients is endangered. ”

Some of these patients today accuse Theranos of having bargained  on their health.

In Bad Blood, a man assures us that a blood test performed by Theranos did not detect a heart disease from which he was suffering.

According to him, if the test had given the right result, he could have avoided the heart attack he suffered afterwards.

In total, nearly a million tests performed by Theranos had to be canceled in California and Arizona.

The consequences could have been even more dire if  Theranos had extended its blood testing services to the 8,134 Walgreens placed across the United States, as was about to happen.

"I do not know"

After the revelations, Theranos and Elizabeth Holmes did everything in their power to try to save the furniture: denying the revelations, shadowing witnesses, pressuring doctors, journalists and the media.

Holmes tried to go through the owner of The Wall Street Journal to prevent the articles from being published, but the damage was too severe - so much so that even her attempt at reinvention didn't finally catch on, despite all her talent.

Today, Theranos is no more. The company went out of business in September 2018.

Elizabeth Holmes obviously doesn't have any memories of what happened during her nearly fifteen years as head of the former unicorn of Silicon Valley.

During her three days of questioning by the Securities and Exchange Commission (SEC) in the summer of 2017, Elizabeth Holmes said the words "I don't know" more than 600 times.

Now 35 and recently married, the former billionaire has been charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud.

Holmes has decided to plead not guilty during her trial, she faces up to 220 years in prison.