From Bad Blood, the authoritative book on the rise and fall of Theranos.
[Jim Mattis, U.S. military hero and Theranos corporate board member] went out of his way to praise her integrity. “She has probably one of the most mature and well-honed sense of ethics—personal ethics, managerial ethics, business ethics, medical ethics that I’ve ever heard articulated,” the retired general gushed. Parloff didn’t end up using those quotes in his article, but the ringing endorsements he heard in interview after interview from the luminaries on Theranos’s board gave him confidence that Elizabeth was the real deal. He also liked to think of himself as a pretty good judge of character. After all, he’d dealt with his share of dishonest people over the years, having worked in a prison during law school and later writing at length about such fraudsters as the carpet-cleaning entrepreneur Barry Minkow and the lawyer Marc Dreier, both of whom went to prison for masterminding Ponzi schemes. Sure, Elizabeth had a secretive streak when it came to discussing certain specifics about her company, but he found her for the most part to be genuine and sincere. Since his angle was no longer the patent case, he didn’t bother to reach out to the Fuiszes.
Background: Roger Parloff, legal affairs reporter for Fortune, was intrigued by a story about Theranos hiring David Boies to sue a guy who had a patent that they would have needed to license if the blood testing machines had actually worked. Boies was given a fat slice of Theranos equity and a board seat in exchange for doing the company’s legal bidding. The author describes the lawsuit as entirely meritless, alleging that the inventor had somehow gotten hold of proprietary Theranos info because his son was a partner at the same huge law firm that had filed some patents for Theranos. The inventor spent $2 million on legal defense before caving in. (The big multi-office law firm’s records manager investigated the allegation and couldn’t find anything to suggest that the son/partner had ever accessed any Theranos-related information or even knew at the relevant time that the company was a client.)
The resulting puff piece hugely boosted the public profiles of Theranos and Elizabeth Holmes:
The story disclosed Theranos’s valuation for the first time as well as the fact that Elizabeth owned more than half of the company. There was also the now-familiar comparison to Steve Jobs and Bill Gates. This time it came not from George Shultz but from her old Stanford professor Channing Robertson. (Had Parloff read Robertson’s testimony in the Fuisz trial, he would have learned that Theranos was paying him $500,000 a year, ostensibly as a consultant.)
Elizabeth was also quick to embrace the trappings of fame. The Theranos security team grew to twenty people. Two bodyguards now drove her around in a black Audi A8 sedan. Their code name for her was “Eagle One.” (Sunny was “Eagle Two.”) The Audi had no license plates—another nod to Steve Jobs, who used to lease a new Mercedes every six months to avoid having plates. Elizabeth also had a personal chef who prepared her salads and green vegetable juices made of cucumber, parsley, kale, spinach, lettuce, and celery. And when she had to fly somewhere, it was in a private Gulfstream jet.
To me so far the strangest thing about the story is nobody questions the premise that sending every human for more frequent blood tests would result in healthier humans. Anyone who has ever had an encounter with the medical system knows that test results are generally inconclusive. What difference does it make if the doctor gets a result from a legacy Siemens machine that requires a venous draw or an amazing Theranos machine that requires only a pin stick.
Even if Theranos had succeeded technologically, I can’t figure out how it would have made people healthier.
Circling back to the above quote, this is a good reminder that humans are terrible at figuring out who is lying!
White privilege? She is hot and told a good tale. Style over substance?
No-one privately believes any earning statement today. We tend to publicly trust & act surprised by the truth, every 10 years, Enron in 2001, mortgages in 2008, gadget startups today. In the mean time, we still buy up their stocks hoping to be the 1st to get out when the truth hits.
PaulS said:
> White privilege?
Why not female privilege?
Attractive white female privilege is the gist of it I think.
I share Phil’s skepticism of the value of Theranos’ product even if it had worked; how many people are forgoing important medical tests because they are afraid of a venous blood draw?
To me the whole story seems to reduce down to an over-confident, over-ambitious young woman temporarily satisfying her delusions of grandeur based on other people’s wishful thinking: people in general wishing for there to be a billionaire female inventor/CEO, and old men wishing to have sex with Elizabeth Holmes.
“Sincerity – if you can fake that, you’ve got it made.” – George Burns
There are people out there in the world who have a savant-level ability to manipulate and lie. They’re exceptional. It’s a gift, and an art form when it’s not being used maliciously, and they can be a thrill to be around. They’re fun! They’re very seductive and if they’re also extroverted, it can be a real trip to know them. The one I knew intimately was a naturally gifted, um, storyteller. She was literally head and shoulders above everyone else in that regard, even among her peers in psychology grad. school. She worked on it! She practiced it since childhood and developed it into a very formidable skill. Watching her go to work on someone she wanted to manipulate was like watching a 100 yard dash between Usain Bolt and your Cousin Ernie the Roofer, and Ernie’s wearing snow shoes.
I’m not all that heavy into physiognomy, but it is interesting that like Holmes, she was petite – a size zero. She was also above average at using her voice to evoke emotional response, and as such she was an unusually perceptive and influential conversationalist. She was an anorexic/bulimic for several years, she was a vegetarian (although not a vegan), and she also loathed needles. She was a super-sensitive natural empath who didn’t have to work to understand what other people were feeling – she just *felt* what they were feeling, accurately, and she could predict it. That’s why she could manipulate people so well, because she knew where she was going to take them! That’s hard to do.
Her facial features even resembled Holmes’, especially the eyes, (the size, shape and location on her face, not the color) which she used very skillfully in conversation. She was very pretty, in a slightly quirky, unconventional kind of way. As I said, seductive. See the photo in the Nick Bilton story from Vanity Fair. Those are the eyes.
https://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive
When I read what Mattis said, I grokked it. I’ve lived it! Not the same amount of money, though.
Considering epidemiology 101, that’s right – no matter the test (from a little bit of blood or a lot) it is always the struggle between making it sensitive enough not to miss the disease and specific enough not to to fork up too many false positives. All else is rather tangential..