How Elizabeth Holmes manipulated the world

Elizabeth Holmes, the founder of the startup “Theranos”, was called “Steve Jobs in a skirt.” Her fortune in 2014 was estimated at $4.5 billion and grew rapidly. This woman’s business was predicted to have a multi-billion dollar market, as well as millions of lives saved. But it all ended quickly. The revelation of the Holmes scam was a real shock because no one could even imagine such a cynical and primitive deception.

The world learned about the grand scam of Elizabeth Holmes thanks to journalist John Carriere. He conducted an independent investigation and spoke about how the “blood business” appeared. Carreyrou wrote a book about his investigation, Bad Blood, which became a bestseller. So, how did a girl who did not even graduate from university become one of the planet’s business icons?

Theranos did not make any breakthrough in medicine, but simply wishful thinking and falsifying the facts. Not only patients were deceived, but also investors and partners, which turned out to be quite a few. Of course, Holmes alone, a dropout who dropped out of Stanford at 19, would not have been able to pull off such a massive undertaking. She assembled a team of true professionals who had great authority in the world of technology.

When someone else’s reputation works for you

Theranos’ top management team was impeccable. The company’s commercial director, Diana Parks, has worked for the largest pharmaceutical companies in the world for more than 25 years. Vice President John Howard once ran the Panasonic subsidiary. Head of Bioinformatics Tom Kemp moved to Theranos from IBM, where he held the position of top manager. CFO Henry Mosley previously worked at Intel. Elizabeth Holm on the cover All these people provided Elizabeth Holmes, who had no merit, an iron reputation. Henry Mosley played one of the key roles in the success of the case.

He created financial forecasts for investors that showed the incredible rise of a startup. He himself knew nothing about technology, but he understood that his figures were significantly overestimated. But the CFO relied on Holmes, who simply glowed with confidence. Investors who came to Mosley were immediately taken to the laboratory to the doctor of chemical engineering, Shanuk Roy. This man, being the co-founder of Theranos, owned the question like a god. He showed the guests a fantastic invention of the company, and the last doubts disappeared. But it’s time to talk about the device that made Elizabeth Holmes and her partner billionaires.

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“Scientific breakthrough” of the company “Theranos”

Dr. Shanuk Roy pricked his finger with a needle in front of investors and placed a drop of blood in a white plastic cartridge the size of a credit card. He inserted the cartridge into the reader, a small device that looked like a toaster. A minute later, the data from the reader on the composition of the blood was transmitted to the server, which soon issued a detailed biochemical analysis. That is, this is how it looked with the explanations of the doctor. The wonderful device “Theranos 1.0” What actually happened in the equipment, only Shanuk Roy himself knew. An apparatus that analyzed blood quickly and accurately was called Theranos 1.0 and made a lasting impression. Money flowed into the company like a river, and Henry Mosley made increasingly bold predictions.

But one day the financial director came down from heaven to earth. At one of the meetings in a narrow circle of top managers, Dr. Roy announced the unpleasant news. It turns out that the miracle device worked unpredictably and in most cases, instead of a result, it produced a set of random data. Therefore, the doctor always downloaded the indicators he needed into his memory before the visit of the guests. In simple terms, “Theranos 1.0”, in which millions were invested, did not work. After that, it became much more difficult for Mosley to make optimistic charts. Then there was the failure to rig the results at a presentation in Switzerland, because of which the forgery was almost exposed. After that, the financial director refused to deceive investors and was immediately fired. There was no longer a special need for it – they believed in Theranos and there were a lot of people who wanted to invest in a startup. Among those who brought money to the company was even former US Secretary of Defense James Mattis!

The collapse of Theranos

But deceit cannot go on forever. In 2013, the company’s chief biochemist, who had worked with Holmes for 8 years, committed suicide. Before that, he had been depressed for a long time and complained to his wife that his apparatus was not working. And in 2015, several independent laboratories checked the results of the Theranos device and the fraud was revealed. Regulators for Medicare and Medicaid released a 121-page report that laid bare the ins and outs of the dodgy startup. According to acceptable standards, the blood parameters obtained by the Theranos device should not differ from those issued by the laboratory by more than 20 percent.

But everything was much worse and the “error” was sometimes 146 percent! This means that the device could show a healthy person that he is sick, and vice versa. It also turned out that most of the blood test results were obtained using Siemens equipment.

In January 2016, the US Attorney’s Office launched an investigation into the case of Elizabeth Holmes. On March 14, 2018, the company and Elizabeth Holmes herself were charged with mass fraud. On August 31, 2018, Theranos ceased to exist and committed itself to return money to investors and compensate those affected by fake blood tests. Photo from the courtroom Elizabeth Holmes herself is still on trial. The 37-year-old swindler faces up to 20 years in prison, according to the latest word from a San Jose, California courtroom.

ut the lawyers of “Steve Jobs in a skirt” are sure that the term will be much shorter. By the way, neither Holmes nor her companions wanted to admit their guilt. About the history of Theranos and its founder, who led the whole world by the nose for many years, the series The Dropout was recently filmed. Have you noticed that there are suspiciously many good films made about scammers?