Elizabeth Holmes at the 2015 Time 100 Gala
Many children dream of becoming a ballerina or train driver, but at nine years old Elizabeth Holmes’s ambitions were rather more grandiose. With the precocious self-belief that would come to define her, the little girl informed her relatives of her intention to become a billionaire.
‘Don’t you want to be president?’ they teasingly asked her. No, she replied.
Nothing but a billionaire would do. And, remarkably, by the time she was 31 in 2015, she had achieved her goal. Her blood-testing company, Theranos, was valued at $9 billion (£7 billion), making her the youngest self-made billionaire in America.
The country was spellbound. Two former secretaries of state, Henry Kissinger and George Shultz, invested in her business. So convinced was media mogul Rupert Murdoch, that he ploughed $125 million (£96 million) into Theranos.
Former President Bill Clinton and then-Vice President Joe Biden were among the illustrious supporters seemingly dazzled by Holmes and her vision.
Young, attractive and with a fervent self-proclaimed passion for revolutionising health care, she was feted as her generation’s Thomas Edison, inventor of the electric lightbulb.
Photographs capturing her halo of blonde hair and big blue eyes – which interviewers noted never seemed to blink – appeared on the covers of prestigious magazines such as Forbes and Fortune.
She insisted on wearing the same outfit of black trousers and a black polo-neck every day, just like Apple founder Steve Jobs, and completed the overall effect by speaking in a bizarrely deep voice.
Yet Holmes cut a very different figure the last time she was seen in public, wearing a low-key grey trouser suit and a pale blue shirt.
Appearing in court last month for a pre-trial hearing, her face was wiped clean of the heavy make-up that was once as ubiquitous as the polo-necks, as if to project an aura of girlish innocence.
And the reason for this astonishing fall from grace? Her ground-breaking invention, a machine she claimed could perform hundreds of tests on just a tiny drop of blood taken from a pin-pricked finger, had been exposed as a humiliating sham, her attempts to conceal the truth laid bare in excruciating detail. Quite simply, it didn’t work.
By June 2016, to the horror of her wealthy investors, Theranos was valued at zero. Then last year it was dissolved. Holmes and her deputy, Sunny Balwani, were charged with nine counts of fraud.
Her ground-breaking invention, a machine she claimed could perform hundreds of tests on just a tiny drop of blood taken from a pin-pricked finger, had been exposed as a humiliating sham
Her trial is set for July and, if convicted, she faces up to 20 years in prison. She is still only 35.
So compelling is the story of Holmes’s rise and fall that it will soon become a Hollywood film starring Oscar-winner Jennifer Lawrence. The movie follows a hit podcast, a recently released documentary by award-winning filmmaker Alex Gibney called The Inventor, and an explosive book – Bad Blood: Secrets And Lies In A Silicon Valley Startup.
It seems that money was never Holmes’s primary motivation, despite her childhood boasts, and that she was driven, instead, by quite astonishing hubris. She was convinced she really was the genius she purported to be and that her inventions would change the world – if only her company had enough time to make them work.
In other words, she was a living embodiment of the mantra ‘fake it till you make it’ – the idea, common among tech entrepreneurs in Silicon Valley, that a degree of exaggeration about what you can currently do is necessary to attract the investment needed to actually achieve your goals.
But Holmes never made it, and her lies had serious consequences. Not only did they cost her investors billions of dollars, they put thousands of people’s health at risk thanks to blood test results that were often wildly inaccurate.
John Carreyrou, a Wall Street Journal reporter whose dogged investigation and resulting book, Bad Blood, brought the house of cards tumbling down, says: ‘I think she absolutely has sociopathic tendencies. One of those tendencies is pathological lying.
‘I think she’s someone who got used to telling lies so often, and the lies got so much bigger, that eventually the line between the lies and reality blurred for her.’
Holmes’s humiliating public disgrace is worlds away from the high hopes she held when she first set out on her lofty mission to transform health care at the age of 19.
In 2003, she dropped out of her degree in chemical engineering at Stanford University in California after filing her first patent application for an arm patch that would simultaneously diagnose illnesses and treat them.
Her unshakeable confidence had been nurtured by her parents, Christian and Noel Holmes. Christian held a series of positions at government agencies.
The family was extremely well-connected – and those connections proved more than useful when their daughter began fundraising for Theranos, a name she created from a blend of the words ‘therapy’ and ‘diagnosis’.
Among her first investors was Tim Draper, a family friend who gave her $1 million and lent instant credibility to her project. Draper’s venture capital firm was known for lucrative early investments in companies like Hotmail.
Holmes’s initial idea of a patch morphed into a testing device, into which a pin-prick sample of blood could be inserted via a cartridge.
The blood would be pushed through the machine, generating a chemical reaction which could be read and translated into a result.
Balwani was brought in as Chief Operating Officer in 2009, and with his arrival came a further complication. Unknown to the company’s board of directors, Balwani was Holmes’s lover
The device, which she named the Edison after the great inventor, would be the size of a household printer. It would make diagnostic testing cheaper, more accessible and, by using blood drawn from a finger-prick rather than drawn from a vein, less painful.
It would put potentially life-saving information about patients’ health in their own hands. In time, she believed, there would be an Edison machine in every home, a dramatic leap forward in a country without a national health service, where millions are unable to afford basic blood tests.
Holmes told investors – and, later, the public via countless interviews, conference appearances and online talks – the heart-rending story of her uncle, explaining that he had been diagnosed with ‘skin cancer, which all of a sudden was brain cancer’, and then died before she could say goodbye. Using her almost-hypnotic powers of persuasion, she promised that her revolutionary new technology would create ‘a world in which no one ever has to say goodbye too soon’.
She swiftly raised millions and hired a team of highly qualified staff to begin work in an office in Palo Alto, the Californian home of Silicon Valley giants Facebook and Google.
Behind the scenes, however, there were signs even from the start that everything was not as it seemed. Early employees noticed that the image Holmes projected of herself appeared to be contrived. Greg Baney, an engineer who had previously worked at Nasa, was talking to her one evening and noticed that, in her eagerness to make a particular point, she unwittingly lapsed into a voice several octaves higher than her usual baritone. Did she believe that the deeper timbre projected gravitas?
Another employee, Ana Arriola, a product designer who had worked on the iPhone made by Holmes’s beloved Apple, noted that when she began working at Theranos in 2007, Holmes favoured drab trouser-suits and ‘Christmas sweaters’ which made her appear frumpy and unsophisticated.
It was Arriola who suggested that if she wanted to be compared to Steve Jobs, she should dress the part. A few days later, the polo necks became a fixture.
Adding to the mystique, Holmes would also claim she slept only four hours a night and lived in an apartment so austere that her fridge contained nothing but bottled water and her favourite green juices.
Then came the problems. Despite an exceptional team of chemists and engineers working on the Edison, progress was slow. The device was supposed to work with no more than a pinprick of blood, but performing accurate tests on such tiny drops was proving difficult, perhaps even impossible.
According to former employees, when investors and other guests were shown how the technology worked, the results were falsified using traditional laboratory techniques instead of the Theranos machine.
Balwani was brought in as Chief Operating Officer in 2009, and with his arrival came a further complication. Unknown to the company’s board of directors, Balwani was Holmes’s lover.
Holmes has a new fiance, 27-year-old hotel heir Billy Evans. The pair intend to go ahead with the wedding later this year, apparently ignoring the fact that Holmes could spend years in prison
Originally from Pakistan, he was portly, dyed his hair a peculiar reddish-brown and drove a Lamborghini with a licence plate which read ‘VDIVCI’, a play on the Latin phrase ‘Veni, vidi, vici’, meaning ‘I came, I saw, I conquered’. He was also 19 years older than Holmes. A former software engineer who had made a fortune during the dotcom boom, Balwani gained a reputation as a tyrant, screaming at anybody who dared deviate from the official line that the technology was working perfectly.
In 2013, Holmes won a multi-million-dollar contract with US pharmacy chain Walgreens to conduct in-store blood testing for customers using Edison devices.
Yet only 15 of the 240 tests Theranos offered were being performed on the machines. (The rest were being done using industry standard technology made by other companies, including Siemens).
Even then, many patients were receiving results that were dangerously wrong. It seems staggering that neither Walgreens nor any of Holmes’s other major investors subjected her claims to any real level of scrutiny before signing on the dotted line. At Theranos HQ, the levels of deception increased day by day as Holmes grew ever-more paranoid about the truth leaking out. Whenever anyone challenged her on her ideas, they were fired and presented with ferocious non-disclosure agreements.
One employee, a British-born biochemist named Ian Gibbons took his own life in 2013 after speaking out about his concerns. Other employees, including Tyler Shultz, grandson of investor and board member George Shultz, and Erica Cheung, became whistleblowers, talking to Carreyrou about the outrageous practices they witnessed.
Tyler Shultz spoke of his dismay when he finally saw inside an Edison. Far from the sophisticated technology he’d envisaged, it amounted to little more than a pipette fastened to a robotic arm. While he worked with the machines, drops of blood often went astray inside them, parts snapped off and malfunctions were frequent.
When presented with blood samples from patients known to have syphilis, the devices detected it only 65 per cent of the time. When Shultz attempted to voice his concerns, Holmes dismissed them as baseless.
In 2015, Carreyrou published a lengthy investigation into Theranos in the Murdoch-owned Wall Street Journal, sending shock waves through a tech industry which had hailed Holmes as a visionary. It included interviews with former employees who revealed that Theranos had grossly exaggerated the capability of the technology and was deceiving the public. Holmes hit back, claiming: ‘This is what happens when you work to change things. First they think you’re crazy, then they fight you, then you change the world.’
Soon afterwards, the US Food and Drug Administration released a report stating that Theranos had used an ‘uncleared medical device’ whose design was ‘not validated under actual or simulated use conditions.’
Experts lined up to explain that the wide range of testing Theranos claimed to be conducting was physically impossible on one tiny vial of blood drawn from a finger.
In 2018, Holmes and Balwani were charged with ‘engaging in a multi-million dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients.’ The company finally closed down in September 2018.
Not that Holmes appears to be in any way contrite. According to Carreyrou, she has ‘shown zero sign of feeling bad, or expressing sorrow, or admitting wrongdoing, or saying sorry to the patients whose lives she endangered.’
Holmes has a new fiance, 27-year-old hotel heir Billy Evans. The pair intend to go ahead with the wedding later this year, apparently ignoring the fact that Holmes could spend years in prison.
It has even been reported that this generation’s Thomas Edison is touting new business start-up ideas among investors in Silicon Valley. Perhaps, this time, they won’t find her quite so mesmerisingly persuasive.