Elizabeth Holmes, founder of infamous biotech fraud Theranos, is hardly the first American huckster. The archetype is deeply embedded in the nation’s frontier mythology, a character native to a vast land where an intrepid flimflam man could scam one town and then light off to the next. But every huckster speaks uniquely to their time and place, as they reveal what particular shiny object can dupe people out of their money and attention. They show you what people really want, and in Holmes’ case, what the people she fooled really wanted was a female Steve Jobs.
When Theronos came on the scene in the late 2000s, Silicon Valley was at its peak as an object of fascination. It had shaken off the chaos of the 90s gold rush that resulted in the 2000 Dot Com Crash, and had come under the firm control of a new royalty. These included Page and Brin’s Google, Jeff Bezos’ Amazon, Larry Ellison’s Oracle, and of course the one that rose higher than them all in terms of market cap and cultural cache — Steve Jobs’ resurgent Apple.
Now past its Wild West phase, the Valley was awash in money, if not as much possibility. And so naturally the American elite and their media organs wanted to properly situate themselves behind the golden goose. But they had a problem, given their egalitarian ideology; that tech royalty was exclusively male. As tech publications — formerly niche rags read mostly by the kind of nerds you used to find at Radio Shack — grew larger they became staffed by the increasingly female products of university journalism programs, who wrote constantly about this issue. The stage was set for just about any female entrepreneur with a revolutionary-sounding idea to hit the right mark and marshal the full power of a ready press and hungry venture capital community.
Enter Elizabeth Holmes.
The product pitch at the core of Theranos was actually a delightful throwback. It wasn’t some new software or app, but rather a physical mechanical contraption like something out of the late 19th century. Holmes even called her magic machine the “Edison,” and the claim was that this black and white plastic box could take a single drop of your blood and conduct just about every medical test known to man. The company wholly rested upon this opaque box and its unverified claim, making the entire enterprise a sort of magic act. Prick your finger and the magic cube will tell you your future. It had the elegance of a fairy tale.
All this also rested on Holmes herself. There was indeed something beguiling about the twenty-something entrepreneur as she entered the public square. Though she walked like a gangly teenager heading to her senior prom, she was tall and oddly imposing as she mingled with the Valley set, and her giant unblinking blue eyes locked onto people like lasers when they spoke to her. She adopted Steve Jobs’ legendary black turtleneck around the time that Jobs died in 2011, in a bizarre display of mimicry that the tech press projected forth as an asset. On top of all that she fit the Silicon Valley prerequisites for myth construction. A Stanford dropout who quarreled with professors who just didn’t get her genius. Mastery of the correct theocratic incantations about “disruption” and “progress.” Like everyone in the Valley selling everything from a rideshare service to a foghorn noise smartwatch app, her product wasn’t just something cool and convenient that consumers might like. She was going to change the world.
Perhaps the most amazing aspect of the Theranos story is that hardly anyone outside of Theranos seemed to want to validate that the box actually worked. It was never demonstrated in public, and its specific workings were deemed proprietary, and that was enough. Thus the magic box remained wrapped in mystery, its powers shouted into being by a media ecosystem made delirious with excitement at the prospect that they had indeed found the female Steve Jobs. They had wished for it so hard that they had manifested it.
And so of course investors and famous would-be board members from the politico-corporate elite lined up around the block to be a part of a company that didn’t even have a working prototype. Theranos’ board included Henry Kissinger, future Secretary of Defense Jim Mattis, and former Secretary of State George Schultz. Current United States President Joe Biden appeared at public events with Holmes to extol her genius. None of these powerful men sounded an alarm either publicly or within the company when irregularities at Theranos mounted, such as the fact that their retail partner CVS was having to send blood samples to Quest Diagnostics instead of using the on-site Edisons they supposedly had. It was George Shultz’ grandson, Tyler Schultz, along with fellow Theranos employee Ericka Cheung who revealed their suspicions of fraud to the Wall Street Journal’s John Carreyhou, who then published the story that led to Holmes’ and Theranos’ downfall. Once it was revealed that the Edison didn’t work and that Theranos was a fraud, most of those fancy moneyed courtiers simply took the loss and walked away as if the whole thing had never happened, and none of them seemed to suffer much for being dupes to such an obvious racket.
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Many have proffered the idea that all those elites, many of them geriatric men, only fell for the Theranos grift because Holmes was pretty. I’m sure this dynamic played some role. Young feminine beauty has had the ability to seduce old men’s coins from their pockets for all of human history. But Holmes was enabled by much more than a few political relics past their sell-by date (even if one of them went on to become President of the United States). The Theranos affair is more a scandal of the technocracy and its adjoined media apparatus, the same machinery that has been floundering around amid malfeasance and incompetence during the Covid pandemic. She was a creation of a fundamentally unserious and decadent American elite structure, one whose eyes have become so clouded by delusions that they have become untethered from reality, especially vulnerable to fantasies that check off the right ideological boxes.
They are loathe to believe that had Holmes been a white male nerd the likes of which Silicon Valley has in spades, her charade would not have gone on nearly as long as it did. Which of course is true. They’re also in thrall to their faith in technocracy more generally, a quasi-spiritual belief that magic solutions to all our problems are just one more digital tweak away. It wasn’t like Holmes had started some hard-scrabble venture in a suburban garage, as had Jobs and Wosniak. As in much of the modern technocracy, Theranos’ miracle was generated at the marketing stage, bypassing all that bothersome invention and engineering and verification and leaping straight into the realm of language, presentation, and lies. Foundational questions are annoying - they may even be offensive - and thus the foundation erodes.
It’s important to note that the fraud of the Edison never really reached the base level consumer. While there were some faulty results handed out, most of the CVS customers did have their blood tested, just by Quest instead of the magic box in the adverts. The recent fraud ruling against Holmes essentially said as much. She was convicted of harming investors, not the general public. Woe-betide the huckster who gets caught by the wrong mark.
Her conviction prompted a fresh round of laments that her story will negatively affect other female tech entrepreneurs, that in every pitch meeting they will be unfairly cloaked in the specter of Elizabeth Holmes. This would be unfortunate and unfair, but I doubt it to be the case. If anything the environment has become even more hungry for that brilliant female inventor, and the Theranos affair, like so many other stories, will get chopped up for parts and reconstituted as a tale of a bigoted market creating a villain out of a noble if misguided dreamer.
As we await the next Steve Jobs, the ground appears fertile for the next Elizabeth Holmes.
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