I was living in San Francisco when I first learned about Elizabeth Holmes, the former CEO of the fraudulent biotech company, Theranos. She was just 19 when she dropped out of Stanford to start the company, which soaked in over $1B in VC funding as it touted its ability to perform 300 blood tests from a single drop of blood. Revolutionary, if true.
Her rise to CEO-celebrity status certainly caught my attention. I was just over a year into my own stint at a fast growing start-up (with a real product that worked, I might add!) and beginning to understand the wild world of venture capital as we prepared to raise our Series A. Elizabeth was lauded as the next Steve Jobs, and not just because she wore a black turtleneck, but because she was transforming all of healthcare, or so we were led to believe.
I was intrigued by her story and appreciated a young woman reshaping an entire industry! But I remember the very first time I watched her speak on YouTube, and I instantly cringed and felt, deep down, that something was off.
I remember Memorial Day Weekend of 2018, I barely left the house so that I could sit on my comfy chair in the living room digesting every word of John Carryou’s bombshell investigative book, Bad Blood, about the company – and Elizabeth’s fall from grace. I was stunned by the brazen lies, the CIA-level security the company enforced, the romantic relationship between Elizabeth and the company president, Sunny Balwani…the list goes on!
Later, I listened to The Dropout, a well-produced podcast by Rebecca Jarvis of ABC News about Theranos and Elizabeth which came out in 2019 after Theranos was dissolved and Elizabeth faced with federal charges.
The podcast asks the question – “How did so many smart people get it so wrong along the way?”
Because Elizabeth’s meteoric rise to fame was boosted by the support of the most connected and powerful people in America. Through her connections and carefully crafted persona, she drew in “smart people” in VC and government, though notably very few leaders in healthcare!
For example:
- Bill Clinton introduced her at an exclusive event as our most important future leader
- Joe Biden, then VP, toured Theranos’ facility and hailed her technology as paradigm-shifting
- Betsy DeVos, and The Murdochs, and The Waltons all invested multi-millions in the company
- James Mattis sat on the Board for a period of time
- George Shultz, Former Secretary of State, even threw his own whistleblowing grandson under the bus defending Elizabeth
- Again, the list of “smart” and “connected” people who each bought into the BS narrative – and clearly liked being associated with the hot new thing goes on
So, “how did so many smart people get it so wrong along the way?” Well maybe we assume too much of people in positions of power. As the founder of The Federalist, Ben Domenech, likes to reminds us, “Consider the possibility that we are led by idiots.”
Personally, I was a lot less surprised that she had duped so many of those in positions of power. After all,
- She was a female at a time with Silicon Valley really was trying to “diversify” and say “See! Women can succeed here, too”
- She was attractive, at least until she opened her voice (which many attest was contrived, which you can hear the difference in the podcast when she is in deposition), in my opinion
- She focused only on vision, nothing about reality, which our “smart leaders” love so much – abstractions of the mind and avoidance of what is really going on
What does the Theranos story reveal to us?
Well, it is still unfolding. Elizabeth goes on trial this week after over a year’s worth of delays due to COVID and then a perfectly-timed pregnancy and birth of her son a month ago. Since her fall from grace three years ago, she married a billionaire heir to hotel fortune, partied at Burning Man, and gallivanted around San Francisco, much to the chagrin of employees who would run into her, stunned. She faces up to 20 years in prison and her defense team will claim she suffered physical and emotional abuse from Sunny Balwani.
For me, the story of Theranos and Elizabeth Holmes, reveals how so many of “the smart people” and our “leaders” are guided by faulty principles. Based on their actions, it seems their belief system hinges on the idea that
- They know best
- They are the ones who really, really desire to change the world
- They can cut corners and endanger lives if it’s for a purpose they deem just and
- Just like a child’s philosophy, “If ‘so and so’ is doing it, it MUST be cool”.
You can clearly see so many instances of this behavior over the last year.
So, yes, consider the possibility we are led by idiots.
And consider the possibility that YOU are the best leader of your life.