Theranos, a medical technology company with a market value of 9 billion U.S. dollars 5 years ago, and its founder Elizabeth Holmes was once regarded as the “Female Steve Jobs.” When she was 19, she dropped out of Stanford University and started a business. She has proposed a technology that can complete more than 300 tests by drawing blood from blood lancing. It was supported by many in the political and business worldwide. But the “myth” that was firmly believed only lasted for 12 years.
Theranos’s scam was first revealed in 2015. Since then, many books and documentaries have reported it, and HBO recently launched a documentary, “The Inventor”, to give a more complete story behind it.
Born in 1984, Holmes got “straight A” in high school. At the age of 17, she entered Stanford University, majoring in chemical engineering. Holmes wanted to develop in the medical field and chose to devote on the road of scientific research. She even worked in the Singapore Research Center which she was appreciated by the Dean of the School of Engineering, Channing Robertson who provided a lot of support for Holmes.
After returning to the State, Holmes decided to start a business, developing a wearable device that can monitor one’s physical condition. She dropped out of school in the second year of college and founded Theranos in 2003. Holmes wanted to develop a brand new blood test technology with multiple tests via a few millilitres of blood samples.
Holmes quickly acquired funding from heavy hitters, including Oracle founder Larry Ellison and Silicon Valley venture capitalist Tim Draper, etc. Because the blood volume collected by the lancing is only one-thousandth of a normal blood test and the cost is several times cheaper, the idea makes Theranos became the “Star”.
In order to further strive for everyone’s confidence, Holmes actively packaged herself as “The Next Steve Jobs”. She wore the same black turtleneck sweater in public and also deliberately lowered her voice when she talked. Shape herself as a “Silicon Valley Prodigy”.
Besides, Holmes hired several former Apple employees, including designers, wanted to create an “Apple-style” product. Since the personal image and corporate packaging are very successful, Holmes received supports from many political and business figures, including the Wal-Mart family, media tycoon Rupert Murdoch, etc. At the same time, Holmes had earned herself more than 4.5 billion U.S. dollars and got reported by Fortune, Forbes and other media.
But in fact, it is very difficult to complete more than 300 tests by a blood sample from general blood lancing. Theranos’ technology has not been very successful. Edison, a machine was made but can only detect 15 out of 200 test item while Holmes’ scam can only get snowballed as the money keeps burning.
In order to win orders from Walgreen, the largest drugstore chain in the United States, Holmes not only lied that the machine met the requirements but also concealed the relevant substandard data, passing the blood samples back to the laboratory and used the equipment from their competitor, Siemens for inspection. Due to insufficient blood volume and improper handling of the delivery process, the test results are inaccurate.
Because Theranos machine cannot effectively test the blood, it does not help the patient to learn about their physical condition, resulting in many errors, but related complaints and scandals are suppressed by Holmes. In 2015, Wall Street Journal reporter John Carreyrou obtained a lot of internal data evidence, revealed the results of Edison’s detection are extremely inaccurate. Originally, Holmes planned to suppress the reports, but the newspaper owner, Murdoch refused to do so, and the big scam was exposed.
The US Food and Drug Administration (FDA), the Medical Insurance and Medical Assistance Service Center (CMS) and the Securities and Exchange Commission (SEC) launched a comprehensive investigation in the following year. In 2016, CMS has banned Holmes from participating and operating a laboratory for two years. Until last year, the United States federal prosecutor charged her with multiple crimes. Holmes faced a maximum sentence of 20 years in prison. In the same year, Holmes announced the dissolution of Theranos and a “myth” that had a market value as much as 9 billion U.S. dollars comes to nought.
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