In America, it’s common to be shown billionaires like Jeff Bezos and Bill Gates, who’ve amassed spectacular wealth because of their innovation, whilst being told that the “American Dream” is a reality because of such entrepreneurial spirit. And, considering what people like the aforementioned have done for society, it’s not unrealistic, as long as we have an idea worthy of the free market and can bring that idea to fruition.
But at what point does a desire to create wealth turn into a simple obsession with money? And what happens when someone is willing to do the unthinkable just to make that desire come true?
Elizabeth Holmes, our protagonist, was a self-made billionaire. By the time she was supposed to graduate college, she was already worth nearly $10 billion. She was one of those people who, by way of a brilliant idea, was able to direct the course of her own life while changing the lives of millions of Americans — a rare accomplishment to say the least.
Before she was the youngest self-made female billionaire in the world, Holmes was a star student attending the prestigious Stanford University. In 2003 though, she came up with an idea that would take her away from those hallowed halls of learning and into the realm of big business. She left the university as an aspiring entrepreneur.
Cheap And Efficient
Holmes’ idea, in theory, was certainly worth the wealth it would eventually help her accumulate. She claimed her proprietary machines could run hundreds of medical tests using only the blood from a tiny finger-prick. The idea, she claimed, would also be cheaper than anything else on the market, with more functionality to boot.
Holmes’ company, Theranos Inc., was slated to revolutionize the way blood was tested. By 2013, her burgeoning company rose to national attention. According to Elizabeth herself, the technology they were creating was, in her words, “the most important technology in the world.” It soon took off in a big way.
Soon enough the blood-testing machines were being sold to retail chains like Walgreens, one of America’s most popular pharmacies. The idea was to modify their standard blood-testing machines to run the Theranos tests as well. On paper, it all seemed like the natural next step.
At the same time, as the deadline for the launch neared, Holmes and her corporate managers were using the company’s glowing public profile to help raise more money for future endeavors. In the course of this, Theranos’ board of directors took on the likes of Henry Kissinger, Defense Secretary James Mattis, and former Secretary of State George P. Shultz.
Holmes claimed that Theranos’ testing device would be able to run hundreds of medical tests on a single drop of blood. It was a big claim to make, and it was one that had brought her much support along the way. There was just one problem, the technology was little more than science fiction. Basically, it didn’t work.
Former employees began crawling out of the woodwork with tales of the true capabilities of the Theranos machines, or, more accurately, the lack thereof. Word spread that some of the blood samples returned contradictory and in most cases, inconclusive results when retested. What’s even worse than all that was the fact that Holmes knew the machines didn’t work as advertised, and she knowingly lied to Walgreens about it before selling the chain the technology. But that’s not all.
Holmes, whom the world had believed made her fortune legitimately through the invention of the Theranos Edison machines, was little more than a fraud. She told Walgreens that the system was ready to use on patients and thus the pharmacy put the devices in every store. When word got out that the machines didn’t work, the deal, and more, began to crumble.
Retraction And Correction
Eventually, the company had no choice but to retract and then correct the results of tens of thousands of medical tests performed on their technology. The machines and the company were sanctioned by regulators at the Centers for Medicare and Medicaid Services, and Holmes was banned from running her own company.
Over the next few tumultuous months, the company was forced to let go many of its employees. Then, because it was no longer licensed as a lab, it also shut down all of its consumer-testing operations. The idea was to focus on developing new technology, though strangely enough, they didn’t seem to want to fix the existing technology.
Despite all the news about the company’s changing direction, Elizabeth decided to hide the change from the Walgreen’s executives they had been working with. She even continued to conduct demonstrations using Theranos’s machines and lead many other pharmacy executives on tours through the, not functional, Theranos labs…
Ms. Holmes, along with the company’s ex-president, Ramesh “Sunny” Balwani, were repeatedly duping future investors into thinking that the company, the products, their services. its business relationships, and its prospects for long-term growth, were all still wearing a healthy coat of black. The SEC was on them for it, though.
Holmes and Balwani used marketing materials, statements to the media and other communications to defraud potential investors even while they knew that their representations of Theranos technology were false. When the SEC heard that she was still conducting these demonstrations, they took action…
The U.S, regulators barred Holmes from running a clinical company. Then, she and Balwani were both criminally charged with defrauding investors. Their lies had finally come around to bite them in the behind, and it was only during the SEC investigation that they learned the financial extent their crimes.
The indictment listed wire fraud as the official charge against both Ramesh “Sunny” Balwani and Elizabeth Holmes. Apparently, during the medical-testing company’s start-up period, they had raised more than $700 million and all of that had been through the outright lie that their miraculous machines could “change the face of medical testing…”
The pair had defrauded investors, doctors and patients as well, all in the pursuit of a dream that never actually got off the cutting room floor. Nine counts of wire fraud later, and the two of them had to make some serious decisions about Theranos’ future. Before they could levy the charge against them though, Elizabeth had one more move.
Holmes’ surprise came mere moments before she got hit with the indictment. She announced that she would be stepping down from as CEO of Theranos. While it was clear that she saw the whole company unraveling, at least she managed to save some face and some jobs by distancing herself from the company she’d lied so hard to create…
Acting US Attorney Alex Tse laid into the whole situation by decrying Holmes and Balwani’s actions. “Investors large and small from around the world are attracted to Silicon Valley by its track record, its talent, and its promise,” he said. “They are also attracted by the fact that behind the innovation and entrepreneurship are rules of law that require honesty, fair play, and transparency.”
Fun While it Lasted
Elizabeth Holmes had been a brilliant example of the American dream, but her actions from the start revealed a remorseless and cunning liar who was willing to do anything at all to get ahead of the competition: even if she didn’t have a working product. The true price she’ll eventually pay remains to be seen, but I guess it was fun while it lasted.
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