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How Elizabeth Holmes house of cards came tumbling down
I know it's Vanity Fair. Just read it, willya?It was late morning on Friday, October 18, when Elizabeth Holmes realized that she had no other choice. She finally had to address her employees at Theranos, the blood-testing start-up that she had founded as a 19-year-old Stanford dropout, which was now valued at some $9 billion. Two days earlier, a damning report published in The Wall Street Journal had alleged that the company was, in effect, a sham—that its vaunted core technology was actually faulty and that Theranos administered almost all of its blood tests using competitors’ equipment. The article created tremors throughout Silicon Valley, where Holmes, the world’s youngest self-made female billionaire, had become a near universally praised figure. Curiosity about the veracity of the Journal story was also bubbling throughout the company’s mustard-and-green Palo Alto headquarters, which was nearing the end of a $6.7 million renovation. Everyone at Theranos, from its scientists to its marketers, wondered what to make of it all. For two days, according to insiders, Holmes, who is now 32, had refused to address these concerns. Instead, she remained largely holed up in a conference room, surrounded by her inner circle. Half-empty food containers and cups of stale coffee and green juice were strewn on the table as she strategized with a phalanx of trusted advisers, including Ramesh “Sunny” Balwani, then Theranos’s president and C.O.O.; Heather King, the company’s general counsel; lawyers from Boies, Schiller & Flexner, the intrepid law firm; and crisis-management consultants. Most of the people in the war room had been there for two days and nights straight, according to an insider, leaving mainly to shower or make a feeble attempt at a couple of hours of shut-eye. There was also an uncomfortable chill in the room. At Theranos, Holmes preferred that the temperature be maintained in the mid-60s, which facilitated her preferred daily uniform of a black turtleneck with a puffy black vest—a homogeneity that she had borrowed from her idol, the late Steve Jobs. Holmes had learned a lot from Jobs. Like Apple, Theranos was secretive, even internally. Just as Jobs had famously insisted at 1 Infinite Loop, 10 minutes away, that departments were generally siloed, Holmes largely forbade her employees from communicating with one another about what they were working on—a culture that resulted in a rare form of executive omniscience. At Theranos, Holmes was founder, C.E.O., and chairwoman. There wasn’t a decision—from the number of American flags framed in the company’s hallway (they are ubiquitous) to the compensation of each new hire—that didn’t cross her desk. And like Jobs, crucially, Holmes also paid indefatigable attention to her company’s story, its “narrative.” Theranos was not simply endeavoring to make a product that sold off the shelves and lined investors’ pockets; rather, it was attempting something far more poignant. In interviews, Holmes reiterated that Theranos’s proprietary technology could take a pinprick’s worth of blood, extracted from the tip of a finger, instead of intravenously, and test for hundreds of diseases—a remarkable innovation that was going to save millions of lives and, in a phrase she often repeated, “change the world.” In a technology sector populated by innumerable food-delivery apps, her quixotic ambition was applauded. Holmes adorned the covers of Fortune, Forbes, and Inc., among other publications. She was profiled in The New Yorker and featured on a segment of Charlie Rose. In the process, she amassed a net worth of around $4 billion. Much more at the link Posted by: badanov 2016-09-07 |
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