Imagine if the firm that made the plane in which you are flying had provided data about a different plane, made by a different company, when seeking safety approval. Now imagine that occurring at the place where your blood is being tested for signs of cancer, hepatitis or diabetes. Worryingly this last effectively happened thanks to Elizabeth Holmes and her failed start-up Theranos, as explained in Alex Gibney’s documentary The Inventor: Out for Blood in Silicon Valley.
I was aware of Holmes’s failed claims and the collapse of Theranos – the name an amalgam of therapy and diagnosis but unhelpfully conjuring up Thanatos, Greek for the personification of death, for me – in outline but not in any detail. In fact, as becomes clear from this film made in 2019 for HBO but shown on British television this week, this is yet another tale of fanatical delusion, biddable bankers and mistreated employees with the added twist of potentially-fatal consequences.
Gibney’s film is quick to set out the key problem. Holmes’s dream as a chemical engineering undergraduate (interestingly she dropped out to start the company) was to create a single, small machine that could run multiple blood tests automatically and cheaply using only a finger prick sample. Initially aimed at healthcare professionals, her ultimate goal was to supply the machines to patients at home. Appealing to those whose needle phobia, travel difficulties or financial position were barriers to the traditional venous draw of several tubes-worth of blood each time, the idea sounded great and many were encouraged to support its development. Okay, so Holmes’s professor at Stanford told her it was impossible, but so what? Other budding entrepreneurs might have been daunted but Holmes carried on, pulling in more and more advocates, more and more funding and more and more acclaim despite not managing to deliver a fully working prototype. How Holmes went from a communitarian ambition via a company valued at $9 billion to facing ruin unfolds over the next two hours in lurid if sometimes slightly too-slick detail.
Holmes herself is clearly bright and came from a stable middle-class background. But as with WeWork’s Adam Neumann, who came a cropper with his own tech venture a few years later, she is also an outsider. She has – or perhaps affects, reading around the subject – a curiously deep voice, always dresses in black and possesses a somewhat intense look (contributors note she often didn’t blink in interviews). Which of these characteristics allowed her to secure the backing of a starry list of political figures from George Shultz to Henry Kissinger is less obvious and remains frustratingly unexplored to any real degree in Gibney’s film, though the result was that Holmes and her company’s continuing lack of actual success appeared immune to criticism.
Much of what did occur there is laid out by various ex-employees, from lab techs so keen to get in on the ground floor of what could have been the next Apple that they asked to intern to serial senior managers with plenty of experience in such a specialised field. A trio of journalists – The Wall Street Journal’s John Carreyrou, Fortune’s Roger Parloff and The New Yorker’s Ken Auletta – supplement this material and do so from a range of perspectives, from the breathless profiler who even then deemed Holmes’s description of her machine “comically vague” to the suspicious investigator who started to contact some of those employees.
The, er, heart of the story is that machine, named the Edison after the inventor who famously failed many times before succeeding. Holmes championed it as a way to ensure that “less people have to say goodbye too soon to people they love”, and it was fed the blood sample in a proprietary ‘nanotainer’. The Edison looked like a dot matrix printer from the outside and functioned in much the same way under the hood, with a series of geared mechanisms that moved backward and forward to suck up, distribute and mix the blood and the reagents to enable the analysis. It was an ambitious project, and indeed Theranos’s engineers repeatedly warned Holmes that they were unable to either keep to the size limit or include the ever-growing functionality menu she demanded – you can’t fight the laws of physics, as one put it.
The relentless effort to try, however, not only continued to absorb time and money but was hidden from investors and the media thanks to Theranos’s status as a private company and Holmes’s actions, which involved denial, obfuscation and outright lies (ironically – one assumes – Thomas Edison did some of the same). This included tests that were supposed to be carried out on Edisons but which had instead to be performed on traditional lab machines, and – shockingly – providing those results to regulators. In practice the Edison was barely serviceable, missing signs of syphilis in a staggering 35% of cases, and when massed anomalies arose after US pharmacy chain Walgreens piloted some early machines, things came to a head.
Holmes didn’t go quietly. Non-disclosure agreements were activated, a top US law firm was free with cease-and-desist letters and staff were bullied and harassed. Ultimately, though, Theranos collapsed from 2016 in a truly spectacular welter of job redundancies, lawsuits, reimbursements and regulatory bans for Holmes. Following a criminal conviction for fraud earlier this year, she due to be sentenced in September and faces years in prison.
Whether Holmes was an out-and-out conwoman or just misguided is the artery running through Gibney’s film. Silicon Valley’s ‘fake it till you make it’ ethos is often blamed, whilst another speaker notes that California tech firms appear better at creating apps and onscreen likes than anything that must interface with the real world. One speaker calls Holmes a zealot, which seems about right. Tyler Schultz, who worked at Theranos and is George’s grandson, poignantly tells of the cognitive dissonance he experienced when moving between the “tiles” and the “carpet” – in the lab room he knew Edison wasn’t working, but time with Holmes in the boardroom convinced him it was. To my mind Holmes’s privileged background and status as a young woman in what is still a man’s world probably rendered many uncritical, and I’d have liked to be told that her father was vice president of Enron, another delusional business that later collapsed and itself the subject of Gibney’s award-winning Enron: The Smartest Guys in the Room so a strange omission from this film. Behavioural expert Dan Ariely makes what is probably the most useful comment. Describing an experiment in which subjects receive a higher monetary reward if they lie than if they tell the truth, he observes that the lying increased when the rewards were redirected to charity because they no longer felt it immoral to do so if others benefitted.
This was sobering stuff. The parallels with what was to come at WeWork are astonishing and depressing, and Jed Rothstein must have been taking notes when watching Gibney’s film since his account of that disaster is identical in structure and style to the earlier film. Frustratingly that includes his replication of an irritating and rather ironic lack of clarity at times over whether we are watching clips from corporate promos, reconstructions or something else. But Gibney has once again done a public service. Many of us will have encountered people at work who don’t listen, won’t admit defeat and drag others down, but when it happens on this scale it’s time the world learned how to push back next time. That, surely, is the really valuable test.