DarkTech Log

Last week, I watched a YouTube video titled "Theranos – Silicon Valley's Greatest Disaster." It amazed me how people can be deceptive and make millions from it. Today, let's delve deeper into the story of Elizabeth and Theranos. Learn about a company that went from zero to $9 billion (1.25 trillion Ksh) in 11 years, only to crash down to zero in less than two years.

Who is Elizabeth Holmes?

Elizabeth Holmes was born on February 3, 1984, in Washington, D.C., United States. She grew up in Houston, Texas, and displayed an early interest in science and technology. Holmes attended St. John's School, a prestigious private school, where she excelled academically.

Her father, Christian Rasmus Holmes IV, was a vice president of Enron, an American energy, commodities, and services company that later went bankrupt after an accounting fraud scandal. Her mother, Noel Anne, worked as a congressional committee staffer.

In 2002, at the age of 18, Holmes enrolled at Stanford University to study chemical engineering. During her freshman year, she came up with the idea for Theranos, inspired by her own fear of needles and the desire to revolutionize the traditional blood testing process. Like many innovators, Elizabeth dropped out of university at the age of 19 to pursue Theranos.

More on Theranos

Theranos was a healthcare technology company founded by Elizabeth Holmes in 2003. The company claimed to have developed a groundbreaking blood-testing technology that could perform a wide range of tests with just a few drops of blood, using a small device called the Edison.

Prominent investors in the US poured millions into the company. Theranos gained significant attention and investments, reaching a valuation of around $9 billion at its peak. Elizabeth Holmes became a prominent figure in the tech industry, often compared to successful entrepreneurs like Steve Jobs. She emphasized the potential of Theranos' technology to revolutionize healthcare by making blood testing more accessible and affordable.

How deceptive can one be?

Elizabeth was a master of deception:

..Elizabeth claimed that Theranos' blood-testing technology, the Edison device, could perform a wide range of tests accurately using only a few drops of blood, even though she knew that such technology was not achievable at that time.

..Holmes claimed that Theranos had secured a partnership with the U.S. Department of Defense to use their technology in military healthcare settings. However, it was later revealed that the partnership was limited in scope, and Theranos did not deliver on its promises.

..During her TED Talk, Elizabeth Holmes shared a heartbreaking personal story about the loss of her uncle to cancer. The emotional account highlighted the devastating impact of the disease and the motivation it provided for her to revolutionize healthcare through Theranos. However, in light of the subsequent revelations and legal battles, the sincerity and authenticity of that story have been called into question, adding to the tragedy and complexity of the Theranos saga. This shows how skilled Elizabeth was at manipulating people.

The fall of Theranos.

In 2015, investigative reports by journalist John Carreyrou in The Wall Street Journal raised doubts about the accuracy and reliability of Theranos' technology. The reports suggested that the company was using traditional blood testing methods for the majority of its tests and had manipulated results to appear more successful than it actually was. The subsequent investigations and legal battles revealed a pattern of alleged deception and unethical practices within the company. It was claimed that Theranos misled investors, regulators, and the public about the capabilities of its technology. The revelations led to the downfall of Theranos, with the company shutting down in 2018. In 2019, Holmes was charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. She was found guilty on four counts in January 2022 and sentenced to 11 years in prison. She is currently appealing her conviction. From what I understand, she was asked to report to jail in April 2023."

The story can’t be complete without Ramesh "Sunny" Balwani, Elzabeth’s boyfriend .Ramesh "Sunny" Balwani was a key figure in the Theranos saga and played a significant role in its eventual downfall. Balwani served as the president and chief operating officer of Theranos, working closely alongside Elizabeth Holmes. He was involved in the day-to-day operations of the company and played a crucial role in promoting and scaling its blood-testing technology. However, as investigations unfolded, Balwani was also implicated in the alleged deceptive practices and fraudulent activities carried out by Theranos. He faced legal action, along with Holmes, and was charged with multiple counts of fraud. The revelations and legal battles surrounding Theranos ultimately led to the collapse of the company and the tarnishing of both Holmes and Balwani's reputations in the tech industry.

We selected this story as the inaugural installment of the DarkTech Diaries because it was a significant event in the United States, yet many Kenyans were unaware of it. We hope that it captures your interest and serves as the starting point for our series. We sincerely appreciate the support you have provided us. Thank you.