Elizabeth Holmes

Photo by Max Morse for TechCrunch.

Birthname	Elizabeth Ann Holmes
Date of Birth	February 3, 1984
Birth Place	Washington D.C. US
Nationality	American
Occupation	Entrepenuer
Biography	Founder and Former CEO of defunct health tech company Theranos

Elizabeth Holmes (born Feb. 3, 1984) was the CEO of Theranos, a health technology company that claimed to be able to conduct automated blood tests with a sample as small as a finger prick using their devices. In 2014, with Theranos valued at $9 billion, Forbes listed Holmes as one of 400 of the richest people in American and named her the youngest self-made woman billionaire.¹

By 2018, Theranos had ceased all operations, the massive inaccuracies of their blood testing devices exposed. Holmes’s net value plummeted to zero, and now, she faces charges of “massive fraud” set to go to trial in August 2020.²

Early Life

Holmes was born in Washington D.C. to parents Noel and Christian Holmes, her mother a Congressional committee staffer and her father working for energy company Enron then eventually working for government agency USAID.

Her work ethic, competitive nature, and business savvy seemed to have started from an early age. At nine years old, she told relatives that when she grew up, she wanted to be a billionaire.

A straight-A student in high school, Holmes started her first business selling C++ compilers to universities in China.³

While she would later drop out to found Theranos, Holmes briefly attended Stanford University. She originally was interested in going to a career in medicine, but an intense fear of needles deterred her. Instead, she decided to study chemical engineering. ⁴

Persona and Public Perception

Holmes modeled her entrepreneurial style and public persona after Steve Jobs. Seen in public almost exclusively in black turtlenecks, a Jobs trademark look. People often speculate whether her deep baritone voice was natural or an act meant to invoke authority as a young woman in a male-dominated business.

Others would argue that the speculation about her appearance and voice was sexist in and of itself. Jobs never faced such scrutiny for his appearance.

Theranos

Beginnings

Holmes’s idea was simple and motivated by her dislike of needles: What if a single drop of blood was enough to perform tests and collect medical data? After a professor of medicine at Stanford told Holmes this was medically impossible, she took the idea to Stanford’s school of engineering, where her advisor Channing Robertson decided to support her.

Founding and Funding

Robertson’s support would be Holmes’s main connection to the venture capitalists who would fund her young company. In 2003, Theranos was born. She dropped out of Stanford to run the company full-time.

By the end of 2004, at only 19 years old, Holmes had raised $6 million in venture capital for the company, and by 2010, that number reached $92 million.

Rise and Fall

Theranos operated in “stealth mode” for the first ten years of its existence, meaning Holmes was incredibly secretive about the technology and the blood-testing process. The company didn’t even have a website until 2013.

Theranos's 2014 partnership with Walgreens is what brought the company into the public eye. Walgreens began using Theranos’s technology for blood testing in the Palo Alto area with plans to expand nationwide.⁵

By the end of 2014, Theranos raised $400 million in equity sales and was valued at $9 billion, making Holmes the youngest female self-made billionaire and among the 400 richest people in America according to Forbes. Her childhood ambitions of billionaire status were materializing in reality.

With newfound public attention came scrutiny. The medical community questioned the validity of the blood tests, without any evidence of the technology’s success posted in peer-reviewed medical journals.

After a damning 2015 Wall Street Journal article accusing Theranos of rigging their tests to get better results, the company was investigated by the Centers for Medicare and Medicaid Services who found that Theranos’s Newark, California lab did not meet industry standards and jeopardized patient health. This prompted a downward spiral for Theranos as major investors started to pull out of the company.

In March 2018, Theranos was charged by the U.S. Securities and Exchange Commission with massive fraud for “exaggerated or … false statements about the company’s technology, business, and financial performance.” Shortly after, a grand jury indicted Holmes on eleven counts of fraud and conspiracy. ⁶

In September that year, Theranos officially ceased operations and closed. Holmes’s trial is scheduled for August 4, 2020.²

Ethical Implications

Discussions around the Theranos scandal and Elizabeth Holmes tend to focus on what the whole ordeal reveals about the nature of startups in Silicon Valley. Holmes was able to gain billions in capital investment, not based on evidence that her technology worked, but based on her ability to convince investors that it would work. One's chance of success as a startup in Silicon Valley is not based on the quality or even reality of your innovation but on your ability to sell it.

It's interesting to consider at what point Theranos become an unethical pursuit. Holmes likely started out with good intentions, but it seems like somewhere during her ten years of stealth mode, she realized she had raised hundreds of millions of dollars to create an impossible product. Rather than cut her losses and return them to investors, Holmes forged ahead, choosing money over ethics, continue to defraud investors, until her bluff was finally called.