Elizabeth Holmes

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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 is an American entrepreneur and founder of Theranos, a now-defunct medical technology company that promised to revolutionize blood testing by running thousands of lab test on a single drop of blood. In 2014, Theranos was valued at $9 billion, and Holmes was named one of the 400 richest people in America by Forbes[1].

By 2018, however, the company was forced to cease all operations as the fraudulent claims regarding their blood-testing devices were exposed. Theranos’s net worth plummeted to zero, and Holmes was charged with fraud and conspiracy. She was originally set to go to trial in August 2020, but due to the COVID-19 pandemic and Holmes' pregnancy, has been rescheduled four times and is now set to begin on August 31st, 2021. Starting the company at the age of just nineteen, Holmes was once praised for her success as a female, self-made billionaire in the male-dominated world of Silicon Valley startups. Public opinion of Holmes after Thernos’s many deceptions were exposed was split primarily into two main camps: those who believed she knowingly deceived investors and endangered patients, and those who believed she was blinded by her own ambition. Regardless, the rise and fall of Elizabeth Holmes and Theranos has prompted a discussion the nature of startups and the ethics of innovation in Silicon Valley.

Following the Theranos fallout, Holmes's career became a highly commercialized story in media and pop culture, fueling both an HBO feature documentary called The Inventor: Out for Blood in Silicon Valley and the investigative journalism book Bad Blood: Secrets and Lies in a Silicon Valley Startup. [2]

Early Life

Holmes was born in Washington D.C. on February 3, 1984, 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.[3] Her parents’ connections would later prove crucial in helping Holmes secure her first investors in Theranos.[4]

Her work ethic, competitive nature, and business savvy 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, she started her first business selling C++ compilers to universities in China.[5]

Founding Theranos

In 2002, during her time at Stanford, Holmes approached Dr. Phyllis Gardner, a professor of medicine, with an early idea for an invention: an arm patch that can detect infection and deliver antibiotics to the bloodstream in a matter of seconds. Dr. Gardner advised her that the invention was physically and medically impossible.[6] Rather than accept defeat, Holmes pursued the invention with guidance from engineering and business advisors. One of these advisors, Channing Robertson, would eventually leave his tenured professor at Stanford’s school of engineering to join the executive board of Theranos. [4]

Within a year of Holmes’s encounter with Dr. Gardner, she would drop out of Stanford to found Theranos at the age of nineteen. Holmes chose the name “Theranos” to be a combination of the terms “therapy” and “diagnosis.”[4] The company would operate under a veil of secrecy, Holmes described as “stealth mode” for a decade. The company didn’t even have a website until 2013.[7]

The Rise of Theranos

The Pitch

In 2014, Theranos entered the public eye. Holmes gave a TedTalk explaining the company's mission:

"We see a world in which every person has access to actionable health information at the time it matters, a world in which no one ever has to say 'if only I'd known sooner,' a world in which no one ever has to say goodbye too soon." - Elizabeth Holmes, TEDMED 2014

Theranos's key claim was that the company had developed devices to not only automate blood tests but also to miniaturize the process by relying on blood volumes as microscopic as a drop. Theranos called its blood collection vessel the "nanotainer".[8] The talk challenged the healthcare system, the high costs of lab tests, the many pains of traditional phlebotomy, and the inaccessibility of one own health information. Holmes claimed that Theranos can solve all of those problems because they can run any combination of comprehensive laboratory tests from a few drops of blood from a finger prick for less than half the cost Medicare reimbursed laboratory tests. On a large scale, the promise of Theranos was a "decentralized infrastructure with the oversight and analytics of a centralized pathology framework." [9]


Many investors, including powerful figures like former secretaries of state, Henry Kissinger and Howard Schultz, found Holmes and her pitch extremely compelling, although they never saw demos, data, or other evidence that proved Holmes's claims. 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. [10] 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 into reality.[11] While many believe that this was because of her product and charm, there is something that folks in Silicon Valley call "herd mentality" in Venture Capital. This happens to be a classic example of that concept. The most basic definition of this concept is that when one powerful venture capitalist invests, many others follow without thinking twice as they know it must be a sound investment. "The entire industry wants to outsource its brain to the smartest person they know and then follow that person." [12]

Later rebranded as the miniLab, the Edison was the name of the faulty technology invented by Theranos to test finger-prick blood samples.[13]

Walgreens Partnership

In 2014, Theranos struck a deal with Walgreens to begin installing Theranos Wellness Centers in Walgreens stores. Arizona was the first and only region to ever have these wellness centers after Holmes lobbied Arizona to allow patients to order blood tests without the approval of a physician. [14] [15]

The Edison

Absent from Holmes's conversations with Walgreens, her investors, and in her media appearances was any mention of how Theranos was able to run accurate lab tests on a such a small blood sample. The Edison was a black box and inside it was supposed to have the capabilities of a full blood-testing lab. However, the Edison never fully worked, despite claims from Holmes that it successfully produced accurate blood test results. Among the hundreds of blood tests the Edison was supposed to accurately run, the FDA only approved one rarely used herpes test.[4][16]

Fraud Exposed

Wall Street Journal

On October 16, 2015, the Wall Street Journal published a damning article by John Carreyou which contained for central allegations against Theranos:

  1. The company is not using their own technology to run blood tests. The majority of testing is done through machines that Theranos bought from Siemens AG.
  2. Theranos only used their famed finger-prick method on only fifteen to twenty of the over 200 tests it offers to customers.
  3. For another portion of the tests, blood drawn via finger prick was then diluted into larger sample and tested using conventional, machines made by third-party manufacturers, a method disliked by medical experts for its unreliable results.
  4. All the rest of the tests performed by Theranos did not use the finger-prick technique at all. Patients were subjected to the usual method of blood drawn from the arm, and the sample was conventionally tested with third-party equipment. [17]


Holmes publically refuted every allegation made by Carreyou in the Wall Street Journal article, describing the quotes taken by current and former employees as either completely false or misleading. [18]

However, former lab employee of Theranos Erika Chung, sent an email to the Centers for Medicare and Medicaid Services (CMS) tipping them off to the problematic and dangerous nature of Theranos's blood-testing technology. The email prompted a surprise visit from CMS to Theranos's labs.They found Theranos's blood tests so inaccurate that they posed a threat to patient safety and patient lives. CMS revoked Theranos's blood testing license.[4]

FDA Scrutiny

After the release of the WSJ expose, the public began to scrutinize Theranos's prior interactions with the FDA. In 2012, the U.S. Department of Defense filed a formal inquiry with the FDA to investigate the Theranos blood test devices. It is worth noting that this request was filed before Theranos's public launch, and therefore at the time, the Edisons did not require FDA approval. The investigation following the inquiry concluded that the Theranos containers were "not reviewed and not approved by designated individual(s) prior to issuance" and "not validated under actual or simulated use conditions".[19] There was another FDA inspection of Theranos in 2015, after which Theranos voluntarily suspended all its tests other than the herpes simplex virus (HSV-1) test, which was the only test that had received FDA approval.[20]

Criminal Charges

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. She pled not guilty.[21]

In September that year, Theranos officially ceased operations and closed. Holmes’s trial is scheduled for August 31, 2021.[22]

Ethical Implications

Discussions around the Theranos scandal and Elizabeth Holmes tend to focus on whether Theranos was a cold-blooded scam or a small lie that spiraled out of control. It's generally accepted that Holmes founded Theranos with good intentions - to lessen the financial, physical, and emotional burden of laboratory testing and make health data accessible to individuals. However, to accomplish that goal, she made promises to investors about technology that hadn't been invented yet. In the world of Silicon Valley, this isn't rare. Selling an yet-to-be-materialized idea to investors is a common practice among startups. It's part of the "fake it til you make it" culture of the industry. That risk is part of capitalist ventures. However, there is a key factor that ethically separates Elizabeth Holmes from the typical startup CEO. Holmes's Zuckerburg-esque attitude of willingness to fail a thousand times to succeed on the thousand-and-first time does not work when the product being developed puts lives at risk.

The ethical question surrounding Holmes and this scandal is "Did Holmes knowingly deceive her investors, her patients, and the public?" To consider this question in a documentary about Theranos by HBO, The Inventor: Out for Blood in Silicon Valley, behavioral economist Dan Ariely described the following phenomenon: If a person lies for personal gain, on average, their physiological response to lying will appear on a lie detector test. However, if a person lies for what they believe is a good cause, on average, the lie detector is no longer able to detect the lie. [4] In light of this, the question of whether Holmes lied becomes less relevant. She did lie, but most who knew her would agree she so deeply believed Theranos and her mission, that she didn't consider the lie unethical. However, on such a large scale, it's difficult to take into account Holmes's intentions when the consequences were so detrimental to investors and patients alike.

It is also worth noting the implications the Theranos scandal has on future entrepreneurs, especially female entrepreneurs or entrepreneurs in the healthcare and wellness space. Moving forward, there is publicly expected to be a more rigorous standard of validation and verification for products that have the potential to put lives at risk.

Business Ethics

The story of Theranos has become a case study for exactly how not to operate a business. [23] While it is relatively clear that Holmes was not ethical, it is disturbing to know that the people around her were not either. This response by the team members has pushed many companies to have checks and balances within the company, ensuring that this type of situation is not able to arise once again. Not only was this a wake up call for companies but for employees as well. Before being asked to join a business venture, it is important for someone to take a moment and re-evaluate the goals and offerings of the business. Asking if what the company is doing goes with or against their morals, and demanding full transparency in a situation.

Humane Responsibilities

The scam that Holmes was running hurt people's livelihoods and physical health. "Sheri Ackert worried she might have a new tumor. Steve Hammons stopped taking his blood-thinning medication. Kimberly Toy emptied the pasta and sweets from her cupboards and said: “I can’t believe this happened.” [24] Creating mental stress or telling a person to stop/ start taking medication is a direct violation of the most basic form of human rights. Incorrect tests can happen at any laboratory, however Theranos failed to maintain basic safeguards. They purposely made folks ill in order to make sure their reputation was not tarnished.

A prime example is the aforementioned man that stopped taking his blood-thinning medication. Mr. Hammons had had heart surgery about an year prior to his blood tests results (from Theranos). He received five different Theranos tests which were all showing different results. Due to this, his doctor recommended that he stop taking his medication. He switched medications and this turned out to be a terrible decision. It was only until months later that he was told the results were incorrect and that he should go back on the original medication. This story happened to many people and caused physical damage to their health. [25]


  1. lastname, firstname · (September 29, 2014author=Loria, Kevin) · This Woman's Revolutionary Idea Made Her A Billionaire – And Could Change Medicine · work · 04-21-2021
  2. Zeitz, Matt The Inventor: Out for Blood in Silicon Valley Roger Erbert. March 19, 2019. Retrieved April 20, 2021.
  3. https://www.businessinsider.com/theranos-founder-ceo-elizabeth-holmes-life-story-bio-2018-4
  4. 4.0 4.1 4.2 4.3 4.4 4.5 Gibney, Alex, director. The Inventor: Out for Blood in SiliconValley. HBO, 2019.
  5. https://fortune.com/2014/06/12/theranos-blood-holmes/
  6. https://www.businessinsider.com/stanford-professor-phyllis-gardner-on-theranos-and-elizabeth-holmes-2019-3
  7. https://www.nytimes.com/2016/07/09/business/theranos-elizabeth-holmes-timeline.html
  8. Rago, Joseph · (September 8, 2013) · Elizabeth Holmes: The Breakthrough of Instant Diagnosis · The Wall Street Journal · 04-21-2021
  9. https://www.youtube.com/watch?v=sBN7esso4wY
  10. https://www.inc.com/magazine/201510/kimberly-weisul/the-longest-game.html
  11. https://www.forbes.com/profile/elizabeth-holmes/#e992b3547a7b
  12. Suster, Mike Understanding the Herd Mentality of VCs and How not to Let it Psyche You Out Both Sides of the Table. May 10, 2018. Retrieved April 20, 2021.
  13. https://techcrunch.com/2016/08/05/unpacking-theranoss-magic-zika-detection-box/
  14. https://www.businesswire.com/news/home/20131113005513/en/Theranos-Walgreens-Expand-Diagnostic-Lab-Testing-Phoenix
  15. https://media.gannett-cdn.com/azc-mobile/201609/3330/29901534001_5148295787001_4157449865001.mp4
  16. https://www.accessdata.fda.gov/cdrh_docs/reviews/K143236.pdf
  17. https://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901?mod=article_inline
  18. https://www.youtube.com/watch?v=rGfaJZAdfNE
  19. lastname, firstname · (date) · Two FDA Inspection Reports Show Theranos' Blood-Collection 'Nanotainer' Was an Uncleared Class II Medical Device | Dark Daily · work · 04-21-2021
  20. Derla, Katherine · (October 22, 2015) · Blood-Testing Start-Up Theranos Is In 'Pause Period', Says CEO Elizabeth Holmes · work · 04-21-2021
  21. https://www.refinery29.com/en-us/2019/01/222855/theranos-scandal-timeline-what-happened-elizabeth-holmes-documentary
  22. https://www.cnn.com/2019/06/28/tech/theranos-elizabeth-holmes-trial-date/index.html
  23. Cromwell, Laura What the Theranos Scandal Can Teach About Business Ethics Our Community Now. January 31, 2019. Retrieved April 21, 2021.
  24. Weaver, Christopher Agony, Alarm and Anger for People Hurt by Theranos’s Botched Blood Tests Wall Street Journal. October 19, 2016. Retrieved April 20, 2021.
  25. Weaver, Christopher Agony, Alarm and Anger for People Hurt by Theranos’s Botched Blood Tests Wall Street Journal. October 19, 2016. Retrieved April 20, 2021.