Elizabeth Holmes and Theranos are once again in the news*: Theranos CEO and former president charged with massive fraud
The interesting thing is that while a settlement has been reached, I don’t think we know anything more today about the much vaunted Theranos technology than we did in 2016 when I wrote Going through the motions.
However, while we still don’t really know the details behind the deception, this seems like a good time to revisit how Holmes came to become a famous billionaire in the first place. For some reason you won’t find much on this in the recent news stories. For example, CNN released an article today titled The rise and fall of Theranos and Elizabeth Holmes. But while the CNN article notes that she dropped out of Stanford to start the company in 2003, the timeline in the article doesn’t start until 2014.
Thankfully there are still stories around from 2014 and 2015 when the press was touting Holmes as the feminist heroine of the century. While there is still a huge gap between the founding of the company and 2014, the older articles do cover how she came to launch her own company at age 19. From the 2014 article The Dropout Who Became A CEO, And The Professor Who Became Her Employee we learn that Holmes attended Stanford after graduating high school. As she was just beginning her studies she imagined herself using what she was learning to change the world:
The inspiration to start a business came from Holmes taking Robertson’s freshman seminar on advanced drug-delivery devices. This, and a summer internship at the Genome Institute in Singapore, spawned her idea of a patch that would dispense a drug while monitoring a patient’s blood, as well as sending the results to the patient and doctor.
Dr. Channing Robertson was a professor and dean at Stanford. When he looked into the pretty young coed’s eyes he felt something very special:
I realized I could have just as well been looking into the eyes of a Steve Jobs or a Bill Gates.
Inc’s 2015 piece How Playing the Long Game Made Elizabeth Holmes a Billionaire describes the magic moment slightly differently, presenting Holmes’ freshman fantasy as if it were a real invention (emphasis mine):
The summer before her sophomore year, she worked at the Genome Institute of Singapore, doing SARS testing with traditional methods, like nasal swabs. At Stanford, she’d been exploring lab-on-a-chip technology, which enables diverse results to be extracted from a minuscule amount of liquid on a microchip. By the time she returned to California in 2003, Holmes had developed a novel drug-delivery device–a wearable patch, or an ingestible, that could adjust dosage according to variables in the patient’s blood and update doctors wirelessly. She filed it for her first patent. “It was not only bold, but also remarkable in terms of its engineering and scientific integrity,” says Robertson.
The Inc piece says Holmes was only 19 when she hired Robertson as an adviser and hired a number of his students to develop… something. Exactly what Holmes dropped out of college to create is a mystery. The Inc piece speculates that the original intent was to invent what Holmes had ostensibly already invented, but somewhere along the way they decided it wasn’t feasible and switched to revolutionizing blood testing:
Theranos won’t share many details about those early days, but it seems to have been trying to build on the wearable-patch patent that had so impressed Robertson.
Robertson was just the first of many prominent older men who looked into Holmes’ eyes and felt something special, and this allowed Holmes to raise hundreds of millions of dollars. The money in turn allowed her to acquire office space and hire scientists, and kept her swimming in lab coats and black turtlenecks. But after over a decade of confidently dressing like Steve Jobs, her ability to create that special feeling was no longer enough. Ultimately it all fell apart.