“It would not be unusual for finger-stick testing to be met with skepticism,” says a spokesman for Theranos. “Patents from that period explain Elizabeth’s ideas and were foundational for the company’s current technologies.”
Vanity Fair received this statement from Theranos, the company entrepreneur Elizabeth Holmes founded claiming to revolutionise healthcare but ended up being sued by investors, employees and patients for fraud, in response to a query from the magazine presumably asking about how/why Holmes thought her idea would work despite many medical experts telling her it wouldn’t. The idea in question: to use just a pinprick of blood from each patient to check for more than 200 conditions/diseases/etc. using a portable machine. In effect, Holmes, and Theranos, were attempting to shrink the blood-testing process, make it cheaper and more automated. It would have revolutionised healthcare if it weren’t for two things: the machine didn’t work, and Holmes/Theranos raised capital and made promises to investors, patients and US government institutions to the effect that it did. Holmes founded the company in 2003, reached great (Silicon-Valley-esque) heights around 2014-2015, and was dissolved in September 2018. Holmes’s trial began on August 31, 2021, earlier this week. Her colleague Ramesh Balwani is also to stand trial, and that’s expected to begin early next year. In case you’d like to catch up too, I recommend watching the HBO documentary about Holmes and Theranos, The Inventor, and reading articles by John Carreyrou (Wall Street Journal) and Nick Bilton (Vanity Fair) published between 2015 and 2018.
Towards the end, The Inventor dwells for a bit on Holmes’s state of mind: at a time when Theranos was besieged by allegations of fraud, conspiracy and knowingly subjecting its customers (technically, patients) to dysfunctional medical tests that endangered their lives, and when nobody believed its blood-testing machine, called ‘Edison’, could ever work as promised, Holmes carried on as if nothing was wrong and, in fact, according to people still at Theranos at the time, she exuded hope and confidence that the company was on the verge of a turnaround. She was clearly swindling people – diverting the money they’d invested and paid into supporting a lavish lifestyle – but seemed to believe she wasn’t. The Inventor offers (only) one explanation, that Holmes was a zealot: “a person who is fanatical and uncompromising in pursuit of their … ideals”. Without knowing more about what went on inside Theranos, especially since it’s downfall began, it’s hard to dispute this characterisation. (However, CNBC reported on August 28: “In a bombshell revelation just days before her criminal fraud trial, defense attorneys for Elizabeth Holmes claim she’s suffered a ‘decade-long campaign of psychological abuse’ from her former boyfriend and business partner Ramesh Balwani.”)
Until the end of The Inventor, and the stories by Carreyrou and Bilton, Holmes holds her ground that Theranos’s revolutionisation of healthcare is only a day away. If we assumed for a moment that Holmes really didn’t believe, in any corner of her mind, that she’d knowingly cheated people and had known that ‘Edison’ and Theranos were both part of one big sham, we’re confronted with some discomfiting questions about how we define our successes. Did Theranos conflate scepticism with impossibility – i.e. “this can’t work because the laws of nature don’t allow it” versus “this can’t work because it is disruptive”?
The Theranos story is about many things — one of them is that it highlights a highway Silicon Valley has built to its arbitrarily defined form of success that starts from one of the same points from which many success stories in the rest of the world, the real world but especially the world of scientific research, begin: “I wonder why that doesn’t work”. So it’s easy to get confused – as many journalists, investors and Holmes’s fellow entrepreneurs did – and to believe that you’re taking one highway when you may just be starting on the other. And I wish I could say the rest of the real-world highway has some checks and balances to kill bad ideas, and these the Silicon Valley highway lacks. Problems in scientific publishing, including and leading up to the replication crisis across subjects, would prove me wrong; in fact, these parallels are quite important, if only for us to reflect on why reputation-based measures of success exist. One of my favourite examples in history is that of Dan Shechtman, described here. A common example from India would be any institute that attempts to evaluate scientists’ application for promotion based on the journals in which they’ve published their papers, instead of the papers’ contents. A common and more global example: ‘prestige’ journals’ historic preference for papers with sensational results (over all papers with reliable results). And a more recent example: the Australian Resarch Council’s announcement last week that it wouldn’t consider preprint papers towards scientists’ applications for many fellowships it funds.
According to one of Bilton’s articles: “On the Friday morning that they gathered in the war room, Holmes and her team of advisers had believed that there would be one negative story from the [Wall Street Journal], and that Holmes would be able to squash the controversy. Then it would be back to business as usual, telling her flawlessly curated story to investors, to the media, and now to patients who used her technology” (emphasis added). Such ‘curation’ had allowed Theranos to be valued at $9 billion (her stake at $4.5 billion), count Henry Kissinger as a board member, Walgreens as a partner, a prominent investment firm as an investor and Joe Biden as a supporter.
This said, there’s still one big difference between the two highways: one has a better, if still quite inchoate, understanding of failure. Failure in science comes in many forms, but I know of at least two ways in which the research enterprise often ‘moves on’. One of course is retractions — and there are more scientists today than there were in decades past who are coming on board the idea that retractions are a good thing, not something to be stigmatised. The other is an increasingly deeper understanding of research fraud, the different circumstances in which it manifests, and the steps scientists and science administrators must take to prevent them from recurring. For all its lucre, the Silicon Valley highway in Theranos’s case didn’t appear to offer Holmes the opportunity of a graceful exit, so much so that it wasn’t a highway to success so much as a railroad to zealotry. That even when your product fails, you haven’t failed until you can raise no more money, until you can keep up the appearance of being successful and have a shot at being actually successful. This is also why Carreyrou, among others, has said: “It’s going to be a wake-up call for venture capitalists and young entrepreneurs in Silicon Valley. If you go too far, if you push the envelope and hype and exaggerate to the point of lying, it becomes securities fraud.” It fails to surprise me that even ‘pushing the envelope’ – presumably a euphemism for ‘smaller’ lies – is okay and that it becomes wrong/bad only when it grabs the SEC’s attention (even when most of us outside the American billionaire class aren’t likely to forget the house of cards that was the 2008 financial disaster).
Hopefully Holmes’s trial and eventual conviction will be the moment Silicon Valley stops stigmatising failure, begins to disconnect the appearance of success from success itself, and ultimately allows companies to fail without condemning their leaders at the same time. And yes, I know how ridiculous such hope sounds.
Featured image: Elizabeth Holmes in 2013. Credit: US Department of Defence, public domain.