Whilst it’s making the mainstream headlines right now, the Theranos story has actually been rumbling on for a number of years.
Formed way back in 2003, Theranos’ unique selling point (USP) was that it could analyse just a few drops of patients’ blood and produce results. It claimed that, backed by its innovative technology, it could make blood tests more convenient, accessible, cheaper and more accurate. It received hundreds of millions of dollars of venture capital and private investor money, being valued at something like $10 billion at its peak in 2013/2014.
However, by 2015, a succession of medical experts were questioning the technology. The claims published by Theranos had none of those all-important peer-to-peer reviews and the company’s claims were dismissed as “exaggerated”. A hard-hitting story in The Wall Street Journal in October 2015, sourced with a whistle-blower at Theranos, reported that their “cutting edge” Edison machines were inaccurate so the company were quietly using traditional blood testing equipment. Theranos hit back using lawyers, a “reputation management” firm to erase all links to the WSJ story from Wikipedia.
By 2016 the disruptive tech company was soon under criminal investigation. In 2017 a large proportion of staff were laid off and that same year lawsuits came forth. Surprisingly, there were still huge loans made in late 2017 to keep Theranos solvent. However, by September 2018 the company had folded, it’s CEO and her COO former boyfriend were charged with fraud.
Theranos had been around for 15 years and it took a further three years for Elizabeth Holmes to be finally found guilty of three counts of fraud and another count of conspiracy to commit fraud.
During the case, the defence put forth numerous allegations of coercion from her former partner as factors for CEO Holmes’ behaviour. There were even claims of sexual abuse; lots of attempts to pluck the heartstrings of the jury.
However, countering these claims were numerous stories of the power of Elizabeth Holmes’ character. Just a day after the guilty verdict, the most interesting stories to come out were of Holmes’ legendary charm. There was one interview with a former investor who went into Holmes’ office to voice their concerns, and apparently came out with a complete volte-face.
That is the most incredible part of the story.
Elizabeth Holmes’ charisma was so powerful that she went from Stanford drop-out to then raise over $700 million dollars and drive the value of her biotech start-up to $10 billion. That’s impressive.
What’s even more impressive, but all the more shocking, is that the charisma triumphed over the competence. Elizabeth Holmes charmed millions of dollars in investment for a technology that didn’t actually work.
The stories of obfuscation are incredible too, from the silencing of staff, to the restriction of their contact with each other online and the strict rules over even their personal LinkedIn profiles.
Competency First, Charisma Second
If there’s anything to learn from this whole crazy tale, it’s that you should know what you’re doing and have those incredible ideas, patents, tools, technologies, products and services. Then, if you have the charm and charisma, use it to push your ideas. Not the other way round. Otherwise you may become a millionaire/billionaire, but you’ll come to a sticky end when you’re found lacking.