Elizabeth Holmes: How a celebrated face of innovation turned into a convict

Early in his career, before he embarked on writing his opus, Das Kapital, Communism’s foundational text in materialist philosophy, Karl Marx was widely known to complain about how social critics often confine themselves to interpreting the world when the point is to change it.

Were Marx alive today, he would most assuredly take his hat off to those daring entrepreneurs at Silicon Valley — the world’s pre-eminent hub for technology and the epicentre of innovation south of San Sanfrancisco Bay, which was given the name because it had in the early 1970s pioneered research in semiconductors, for which silicon is a major ingredient — who have challenged and then went on to transform our established ways of thinking and doing, leading to profound changes in how we live our quotidian lives.

It was to Silicon Valley, the cradle of start-ups, where the top 15 firms there had scored sales of $1.35 trillion dollars in 2020, that the tech wonderkids went, bringing with them their radical-chic philosophy of better small-and-nimble than big-and-rich, along with their we-will-rock-the-world youth culture — which happened to be the place where one-third of America’s venture capital investments also went.

In short, Silicon Valley was the lotus land of idealist tech geeks who went there to do, as we say, their thing — which was to change our established ways of thinking and doing.

Enter Elizabeth Holmes, a 19-year-old upstart who in 2003 dropped out of Stanford University to found her own start-up, Theranos, a company that claimed to have developed a breakthrough blood-testing technique that could scan for hundreds of diseases, including cancer, with just a few drops of blood taken with a finger prick.

Theranos raised nearly one billion dollars from seemingly savvy investors, including media mogul Rupert Murdoch, with the firm at one time hitting a $9 billion valuation, a time when Holmes’s own paperworth had catapulted to $5 billion. Moreover, the young female entrepreneur had also succeeded in eclipsing the men who had traditionally controlled the scene in and basked in the spotlight of Silicon Valley.

Holmes basked in the spotlight!

Here’s a woman, now in her early 30s, who had founded a company that stood out as an exemplar of all the good that Silicon Valley could do for the world, indeed for humanity itself, a company with a compelling vision of how advanced digital technology could transform medicine, using merely a drop or two of blood from a finger prick, enabling us to determine early detection of a multitude of diseases, a company, moreover, with a young, smart, charismatic and, yes, glamorous CEO who was about to revolutionise the very canon of medicine as we had known it since Ibn Sina, the 11th century philosopher and physician known in the West as Avicenna.

In her heyday around 2015, Glamor magazine named Holmes “Woman of the Year”. Time put her on its list of 100 luminaries. And she had made it on the covers of Fortune, Forbes and T Magazine.

Elizabeth Holmes was at the time the most celebrated female entrepreneur in America — till she wasn’t.

She was the most celebrated entrepreneur in America, that is, till she was exposed as a charlatan, a fraudster and a con artist in a series of explosive articles in the Wall Street Journal by investigative journalist John Carreyrou, that not only raised serious doubts about the efficacy of Theranos’s purported magical blood tests but showed how these tests could’ve endangered patients’ lives.

Fake-it-till-you-make-it

In June 2018, a federal grand jury convicted Holmes on fraud and money laundering charges and at the end of her trial in January 2022, she was found guilty and later sentenced to serve 11 years behind bars, in addition to being ordered to pay a $452 million fine. (Forbes, which in 2015 had named Holmes the wealthiest self-made female billionaire in the US, based on a $9 billion valuation, soon reversed its estimate of the entrepreneur’s net worth to zero.)

On Tuesday morning this week, Holmes was expected to leave her multimillion dollar mansion in the Valley and report to Bryan Federal Prison Camp in Texas, about 100 miles from Houston, where she will start serving her 11-year sentence.

To be sure, Bryan is not Alcatraz, being the minimum security prison that it is, but it is a prison nevertheless, where the 650 women inmates there — virtually all convicted of white-collar crimes — must abide by mandated prison rules, which include a 6 a.am. wake up-call and work in prison facilities like the laundry room for 12 cents an hour.

Theranos will be remembered not only as the saga that threw light on Silicon Valley’s dark side — its culture of hype and boundless hubris — but also as the parable of an Icarus whose reckless fake-it-till-you-make-it stance drove her too close to the sun.

Only in America, folks.

— Fawaz Turki is a noted academic, journalist and author based in the US. He is the author of The Disinherited: Journal of a Palestinian Exile.