Um, What.

Lately, I’ve been compelled by the explosion of media coverage regarding Elizabeth Holmes and her company, Theranos. And if you have no idea who Elizabeth Holmes is, I suggest you start with the HBO documentary The Inventor: Out for Blood in Silicon Valley. In short, Holmes dropped out of Stanford University to start Theranos when she was 19. The promise of her company was to replace traditional phlebotomy practices of drawing multiple tubes of blood for testing into just one small prick of the fingertip…which would then test for over 200 different things while you waited 45 minutes for the results.

In 2015, Forbes estimated Holmes’ net worth to be $4.5 billion dollars. She raised over $700 million in venture capital and invited people like Henry Kissinger and George Shultz to sit on her board of directors - to which they agreed. The problem, of course, is that nothing Theranos promised to do was actually possible. The company never could successfully complete the blood tests as described. That is all an oversimplification, you’ll need to watch the show (or listen to the podcast). In the end, Theranos was shut down and Holmes (and most of her executive staff) were charged with fraud, securities violations, and more. They are all currently on bail and awaiting trial.

Here’s why I’m fascinated with her story:

  1. To start with, the $700 million in venture capital funding is amazing. Holmes never produced a business plan, a balance sheet, a vision statement, or any other documentation for her business. What most investors said was that she simply had an “ethereal” quality that was compelling. UM, WHAT. If I asked the bank for $5 tomorrow, they would need two years of tax returns, profit and loss statements, and the blood of my first born.

  2. Holmes’ credibility for many was based on the fact that her uncle was a doctor and her grandfather was an entrepreneur…therefore, she was well suited to create a medical testing company. UM, WHAT. I have an uncle that was a pilot and a grandfather that was an auctioneer. That makes me qualified for neither. But I guess maybe Henry Kissinger feels differently?

  3. Holmes was credited as the youngest self-made billionaire. Of course, later her net worth would be dropped to zero once the FBI started their investigation. And then Kylie Jenner took her place as the youngest self-made billionaire. UM, WHAT. I guess since I am neither a) young, or b) a billionaire, I have little room to critique. But I feel like Kylie has about as much to do with her lip kits as Elizabeth had to do with developing those 200 lab tests. (And that’s not shade to Kylie because I have two lip kits and I super enjoy them both.)

  4. A person in the documentary says that Holmes is interesting because being an entrepreneur needs enough gumption to accept risk, but enough tether to reality to know what makes a business work and what makes it fail. And that could be the most succinct - and credible -definition I’ve ever heard of entrepreneur. I’m sure that guy never considered the small businesses when he said that, but I’m here for it. It is a tenuous game…and he perfectly describes the line.

  5. And finally, what if this story would have been exactly the same but instead of a female CEO at the helm, it was a man? How would it change the trajectory of what happened (because I’m certain no one would have given him money because he was ethereal)? Would the investigation by the FBI and SEC triggered so quickly after journalists began to report the fraud?

Ironically, it was George Shultz’s grandson that contacted the Wall Street Journal with his suspicions after working at the company, starting as an intern. He had taken his concerns about the suspected fraud to different company executives and board members, but they were dismissed. Someone please make a documentary about how awkward the holidays were at their house after the FBI began their investigation…