We’ve had a few threads on Elizabeth Holmes, the former CEO of Theranos (most recently, here and here). With her trial looming, I figured we could have a new thread to discuss the trial and aftermath. This one is MPSIMS but there’s still the Pit thread if that’s more your style.
To kick this off, John Carreyrou, the journalist who first broke the story of the scandal and wrote Bad Blood, has weighed in that he predicts she’ll be found guilty of wire fraud.
I didn’t know much about her or this scandal so I just spent a little time reading up on her. I was surprised to see that her father was a VP at Enron and her mother was a congressional committee staffer. That’s interesting to me.
I agree, read the book. But, realize that the book is one-sided.
IF we believe the book as written, then Theranos was a fraud from day 1. The author said that engineering was forbidden from talking to programming, which is insane. The two need to work together to make sure the process works. I believe that she had a concept, was certain she could get it to work, and her salesmanship worked too well to where there was too much money involved to back out; that’s when the fraud started.
Of course, the technology for what she wanted to do isn’t there yet, and it’s been how many years? Her ability to raise so much money proves that the concept is marketable, and if it works, profitable, so if actual experts thought it feasible now, someone would be doing it.
Having read Carreyrou’s book, I’d say that the facts are what’s one-sided.
I didn’t get the impression that the book portrayed deliberate fraud from the beginning; rather, it was a hastily cobbled-together concept whose deep flaws were papered over and ultimately concealed as part of a deliberate fraud.
It does sound nuts to compartmentalize and block communication within the company to the detriment of its developing and marketing a successful product. But suggesting that can’t have happened because it’s insane is essentially a fallacious argument from incredulity.
At this point I’d say there’s a reasonable chance Holmes will be found guilty…of something. The odds of her having to do significant jail time* or perhaps any prison time are much smaller. Expect appeals and legal maneuverings to go on for many years.
*as in, more than a few months in a low-security unit or halfway house.
Holmes lost a court battle today in her attempt to block evidence of customer complaints and blood testing results. Her lawyers argued it shouldn’t be allowed because Theranos destroyed the testing database. The judge didn’t go for it.
Meanwhile, she was supposedly due in late July, but I haven’t seen any news about her giving birth. Maybe she’s late, or maybe they’re doing a good job keeping it private. Which, fair enough, she has a right to privacy in that area.
Those aren’t really mutually exclusive options. I think she succumbed to a variant of the power of positive thinking delusion, apparently based on Steve Jobs’ career.
She had a Big Idea. She had a Vision. The technical details were, well, details.
She appears to deluded herself into thinking that because it would be really useful (not to mention profitable) if a machine could automatically run a dozen blood tests on a single drop of blood, that it should be able to do that. She seems pretty intelligent in some ways, but she just didn’t understand the chemistry or mechanics involved, and she just didn’t bother to really try to understand them. Those were the petty technical details for the geek team to work out.
It’s a really distressingly common mode of thinking. If you peruse Kickstarter, you’ll see it all the time, from ambitious technical projects to apps and software to board games. The grunt work of design and development is just kind of assumed, and all too often the project creator just has a nebulous plan to farm it out somehow. A lot of those projects just don’t get traction, but especially early on, there were quite a few of those projects that funded and then flamed out.
There have always been people who have a Big Idea that can’t fail, but who don’t actually have any idea how to practically implement it, but who do have the social skills to convince others it can’t fail. Occasionally, those Big Ideas are actually practical and the Big Idea person has the diligence and technical knowledge to work it out, or does hire a team with the diligence and technical knowledge. More often, the Big Idea just isn’t practical, and the investors get burned.
Nikola Tesla is probably the patron saint of this. He had some Big Ideas (like AC power) that really were both innovative and practical, and he really did just need time and funds to work out the details. He also had some crank ideas that he clearly thought fell into the same category, like global wireless power transmission.
Theranos is just a particularly spectacular example of a well-worn dynamic.
It doesn’t have to be persuasive to you. It has to be persuasive to people on the jury.
Elizabeth Holmes has a history of being very persuasive to people in person. If she testifies in this trial, she might do a very convincing job. And be backed up by assorted experts testifying about abusive relationships in general and about how appearances can be deceiving and how such-and-such can sometimes be a sign of an abusive relationship.