After four years of extensions and delays, the trial of Elizabeth Holmes is finally taking place. Holmes was once touted as the star of Silicon Valley who used technology to create a new and less intrusive way to draw blood for testing. Her company, which took in hundreds of high-roller, high-profile investors, was once valued at $9 billion. More importantly, her so-called technological breakthrough did untold medical damage to many people who believed her test results.
She might still be pushing her technological snake oil but for a reporter for the Wall Street Journal who cast a skeptical eye on what she was doing.
Here’s an 11-minute video by the WSJ to bring you up to date on the case, and below is what I wrote about it in 2018:
Good journalism saves lives.
In this Age of Hyperbole, that’s no exaggeration. A couple of weeks ago in the newsletter, I mentioned John Carreyrou, investigative reporter for the Wall Street Journal, and the book he has written titled Bad Blood.
The book tells the story of Elizabeth Holmes, the wunderkind of Silicon Valley, and her company Theranos and the way he uncovered her immoral and fraudulent behavior. Holmes said she had discovered a way to test blood using just a finger prick rather than needles that extracted blood from veins. Her company, she said, was developing the technology that would do the testing inside a small container, something patients could take home with them.
The results produced by these machines could be immediately transmitted to physicians, who could then prescribe or adjust medications based on those results.
Such a device, Holmes said often, and very persuasively, would revolutionize the delivery of medical care.
It was a journalistic narrative that is almost irresistible: A young, eager entrepreneur in Silicon Valley has a great idea, touts a world-changing idea, and manages to raise a lot of money. She/he garners a lot of attention from the media, and that attention—plus the money—is self-confirming. Holmes was a master at directing and using this narrative.
The problem was that almost none of this was true.
There was indeed a device, but there was no technology capable of analyzing blood in this way. Blood, and a substantial amount of it, had to be drawn from a vein to be analyzed properly. Just about anyone with expertise in blood analytics could have told any journalist that.
As long as Holmes was taking money out of the hands of rich investors and venture capitalists, the story was not that important. When she started testing the device on live patients and claiming that it could accurately analyze blood for more than 100 different tests and when doctors started using those test results to prescribe or adjust medications—that’s when the real trouble began. The results the Theranos machines produced often varied widely from those of more traditional testing.
Had Carreyrou not done the investigative work that he did—and had the Wall Street Journal not backed him up as it did—it is certain that people would have died.
Carreyrou’s story of how Holmes built a myth around herself and of how he uncovered the truth of her fraudulent claims is fascinating and ultimately satisfying. The book, Bad Blood, contains far more than I have been able to include in this short summary and is highly recommended.
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