Blood Money
Gothic-Level Horror in Palo Alto
The story of Theranos made big headlines in the tech world and the business press a few years ago, but it didn’t quite crack the mainstream consciousness the way other shitshows like Enron and Wells Fargo and Dracula Untold did.
What if I told you this scandal involved giants of American politics? And hundreds of millions of dollars? And lies heaped on lies? And blackmail? And sex?
And BLOOD?
Because, at the heart of the Theranos scandal, we find pure deception and exploitation, all revolving around blood.
How is this not a Hulu original called Silicon Valley Vampire?*
A primer on Theranos:
In 2003, Elizabeth Holmes dropped out of Stanford at age 19, registered a patent for a blood-testing device, and went about starting a company that would manufacture the iPhone of medical devices: a machine that could run a huge battery of tests from a couple drops of blood. It was a billion-dollar concept and she almost single-handedly convinced loads of respectable people to invest their money or reputations into her idea.
The need for a compact blood testing device such as Holmes offered is less clear. She likened the way blood is drawn now, via needle, to medieval torture.
Regardless, she lured some big hitters into her fledgling company. And a large part of that, by all accounts, was Elizabeth Holmes’ charm. She had a way of mesmerizing those who could help her, either with their reputations or their money. And for reasons I’ll let you, the reader, come up with entirely on your own, these people she put a spell on tended to be old, greying men.
Here’s a side-by-side of many of the investors Holmes ensnared, next to a photo of Elizabeth herself:
But for all the promises and tantalizing possibilities, after several years and hundreds and millions in funding from investors, Elizabeth Holmes failed to make anything that did remotely what it promised. Money vanished, reputations were soiled, the business press was embarassed, and loads of people were left scratching their heads wondering how they got it so wrong.
Apparently, no one thought that handing millions of dollars over to a medtech company run by a college dropout with no medical training was a bad idea.
The machine that Elizabeth Holmes promised her investors existed, in a manner of speaking, but it never operated correctly. When a patient’s blood was placed into the machine for testing, it was like trusting your medical care to a magic 8 ball or an Eddie Murphy movie: it was anybody’s guess what results would come back.
Sometimes, the company would secretly run patient blood tests on commercial devices instead of it’s own device. Sometimes, they resorted to even crazier subterfuge: infamously, the company wrote a program that would make the machines look like the were slowly reading results when, in reality, the machines were crashing. This is akin to a browser telling you that your porn will take ten hours to download, when it reality the porn you want doesn’t exist. And ain’t that the truth?
In his excellent account of the saga, Bad Blood, John Carreyrou records some of the early days of Theranos. Like when some of the first good press the company got was in a publication called Red Herring, or when the company’s original name, Real Time Cures, accidentally signed it’s first batch of paychecks with the misprint “Real Time Curses”.
Apparently, the Theranos machines could detect neither blood nor irony.
There’s real world consequences to Theranos’s lies. When their devices gave wrong information on the blood it tested, it could send healthy people in for unnecessary procedures or prescribe them unneeded drugs, while telling sick people they were fine and needed no treatment. One patient claimed to have suffered an avoidable heart attack because Theranos’ machines failed to properly diagnose him. Another patient got an alarming report from a Theranos machine and was rushed to the ER where she was given a battery of tests and an MRI scan, costing her thousands of dollars out of pocket before realizing that everything was fine and that it was the Theranos machine that was the issue, not her health.
Over a million patient tests were later voided as unreliable. More seriously, one employee, unable to live with the lies and too scared to come forward, committed suicide. The account of his ending and his widow’s struggles afterward are heartbreaking, as recounted in Bad Blood.
Just like no one wanted to look too hard at the mysterious Count Dracula who promised to shower wealth and station on Jonathan Harker and his firm, so no one wanted to peer too much into Elizabeth Holmes. There was, as Brooke Gladstone of On The Media pointed out, a real case of FOMO: Fear of Missing Out. No one wanted to not be a part of the Hot New Thing. The facade was what they wanted: the Steve Jobs-esque wardrobe, the perfect hair, the fake voice.
Oh yeah, Holmes’ voice was as fake as her profit projections:
Who told her that she should affect the “lotion on it’s skin” guy from Silence of the Lambs??
Making fun of people’s fake voices is fun and we should all take time out of our day for it, but let’s get to the heart of this matter, at least as far as Toothpickings is concerned. Is Elizabeth Holmes a vampire?
Let’s start with a superficial checklist:
Any definition of “vampire” that has been advanced by this blog in earlier days clearly doesn’t work here. Elizabeth Holmes is not a revenant — she did not die and come back from the grave.
But Voltaire’s definition of vampire is far more charitable:
“We never heard a word of vampires in London, nor even at Paris. I confess that in both these cities there were stock-jobbers, brokers, and men of business, who sucked the blood of the people in broad daylight; but they were not dead, though corrupted. These true suckers lived not in cemeteries, but in very agreeable palaces.”
-Voltaire, Philosophical Dictionary, 1764
Elizabeth Holmes, through her company Theranos, definitely defrauded people, sucking their resources and casting them aside when they were no longer useful. That’s a Voltairian vampire, folks. And while it takes some effort to feel sorry for billionaire venture capitalists and captains of industry/government getting hoodwinked, it’s easier to feel for the employees who toiled long hours with no weekends for a lie. It’s even easier to feel for patients who were misdiagnosed by the Theranos machines — and thank the IPO gods that no one died from one of those misdiagnoses.
And Jesus, we didn’t even get to the toxic work environment or the heavy-handed lawyers or the attempts to discredit the whistleblowers or the secret bang-bang Elizabeth Holmes was having with one of her investors/executives.
After I reading up on the Theranos debacle, I wondered why it hadn’t been bigger news when it happened. Wanna hear a hypothesis?
Try this: Theranos didn’t get the mainstream play it should have because it was so embarassing to powerful people across the spectrum. The business press was so in love with the Theranos story that they didn’t want it to be false; and when the facade fell, they wanted to cover the fallout as quickly and with as little fanfare as possible. The investor class couldn’t get enough of Theranos and it didn’t serve them to have the media they owned laughing at how much they got taken for a ride.
Yes, the Clintons, Obamas, and Bidens got taken in by whirlwind of Elizabeth Holmes’ charm offensive. But so did the George Schultz’s, Henry Kissingers, Jim Mattises, and Rupert Murdochs. Murdoch alone invested over $100 million! Rachel Maddow wouldn’t be taken seriously for laughing at Henry Kissinger’s foolishness when Biden is touring the Theranos factory and praising Holmes’ vision. And it’s hard for Sean Hannity to spend an evening blasting the Clintons for being chummy with Elizabeth Holmes when Murdoch — the guy who owns Fox News — is backing up dumptrucks of money to her door.
Who am I kidding? Hannity is perfectly capable of that.
One of the many, many interpretations of early vampire fiction is a critique of unbridled capitalism. In Dracula, for example, the title character is seemingly free to suck the life out of the peasantry in his countryside and grow rich off their exploitation. But when he starts drinking the blood of the almost-nobility in England, then he has to be dealt with. And maybe there’s a parallel here: if Elizabeth Holmes had opened a check-cashing branch in a poor neighborhood, she could have made money and been just fine. But once she started exploiting the uber-wealthy, she had to be taken down.
Maybe the vampires aren’t the issue. Maybe it’s the system they operate in. Maybe what vampires show us isn’t their flaws, but our own.
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Image sources: A bankrupt company under investigation by multiple government agencies that hopefully can’t afford an IP lawyer to police my fair use of their images, and also the Wall Street Journal.
*In 2019, HBO released a documentary on Theranos called The Inventor: Out for Blood in Silicon Valley
*And now, it’s been announced that a Hulu special is in the works. I knew I should’ve registered this blog with the WGA.
