‘The Inventor’: How Elizabeth Holmes Pulled Off the Scam of the Century
A new documentary by Oscar winner Alex Gibney, airing March 18 on HBO, examines what went wrong with the blood company and its charismatic, delusional founder.
Elizabeth Holmes is fearlessly filling the frame, speaking directly to the camera in her low, distinct voice. Former co-workers have alleged that Holmes’s signature baritone is actually fake—an affect, like her Steve Jobs-inspired wardrobe, and a deception, like her now-defunct company Theranos. Of course, there was a time when Holmes didn’t stand for fraudulence and infamy, when Theranos was valued at $10 billion, and Holmes was touted as the next great tech visionary. The Holmes that addresses viewers in The Inventor: Out for Blood in Silicon Valley, director Alex Gibney’s new documentary, is an envoy from the height of Theranos’s delusion. She is steady and impassioned, lips stained bloodred. Unblinking, Holmes insists, “I don’t have many secrets.” It might be the first lie viewers will see her utter in the revealing documentary, but it certainly won’t be the last.
Theranos, a company that sought to disrupt the health-care industry with imaginary technology that was never fully realized, succeeded on the strength of Holmes’s vision, and her insistence that that vision never be abandoned or compromised, no matter how unfeasible it might be. The Inventor is able to effectively relay the depth of Holmes’s deception, and the contrast between the image she presented and Theranos’s reality.
In ad campaigns and investor pitches, the company was presented as sleek, simple, effective and bright. Holmes was selling “a world in which no one has to say goodbye too soon,” where customers could consistently, affordably, and painlessly order blood tests for a number of ailments, and know more about their health than ever before. This would all be made possible by the Edison, a machine that could take a small “nanotainer” of blood and run a litany of tests, all but eliminating the need for traditional venipuncture blood withdrawals and pricey laboratory testing.
Holmes’s vision was sleek, revolutionary, and catnip to investors. But behind the scenes, Theranos was in total disarray. Describing one version of the Edison that he worked with, an engineer talked about how the machine became coated with blood, as samples spilled “all over the place” and settled into the nooks and crannies of Holmes’s magic box. Pieces of the device were constantly falling off or exploding; for important demonstrations, scientists would run in and grab the blood samples that potential investors had put in the Edison, run the tests themselves in the lab, then rush back the results.
As Theranos’s success grew, so did the chaos. An important deal with Walgreens meant that actual customers were sending their blood to Theranos’s makeshift Palo Alto lab for testing. The majority of the testing was done on traditional, third-party machines—not the Edison. Scientists had to dilute the nanotainers in order to run the samples in these machines, which was far from best practice. “We were fudging results,” one former employee attested, explaining, “If people are testing themselves for syphilis using Theranos, there’s going to be a lot more syphilis in the world.”
These gory, bloody, behind-the-scenes details are the beating heart of HBO’s new doc. Unfortunately, it’s contained in too much fatty filler: stock footage, meditations on Thomas Edison and Bill Gates, and too much time connecting fairly obvious dots for the viewer. Again and again, the film returns to the idea that Holmes modeled herself after overconfident men like Steve Jobs, and was able to succeed because of Silicon Valley’s fetishization of these charismatic visionaries. Of course, anyone who’s ever seen Holmes make a vague, jargony declaration in a turtleneck could reach these conclusions on their own. Interviewees offer helpful insight into the specifics of Holmes’s hubris. Dr. Phyllis Gardner, a professor of medicine at Stanford, recalled when Holmes approached her about her first few ideas, none of which were realistic: “I just felt like, I can’t help you, you’re not listening.”
But Holmes did find mentors, and investors and board members whom Dr. Gardner describes as “very powerful older men”—George Shultz, Henry Kissinger, James Mattis—who “could influence people.” Like Holmes herself, these men were not experts in the field that Theranos was attempting to disrupt. Consequently, they were less likely to express concerns about the feasibility of her business, and more likely to be swayed by her vision and conviction.
In recorded interviews, Mattis describes Holmes as “a revolutionary in the truest sense.” Kissinger likens her to “a member of a monastic order” in her single-mindedness and self-discipline. Holmes’s friendships with important people, particularly politicians, acted as a shield—“The bet that she made was that if she surrounded herself with powerful people, the regulators wouldn’t get confrontational with her.” Simultaneously these relationships, along with the glowing press coverage of Holmes and Theranos, made those with insider knowledge of the company’s duplicity feel that they must be crazy for doubting her. One former employee incredulously remarks, “I thought that Theranos was going to get away with it.”
Holmes took Silicon Valley’s penchant for secrecy, half-truths, and optimistic projections to a whole new level. According to ex-employees, she appeared to actively label informed, level-headed critiques of Theranos and the Edison as old-fashioned and out of touch. Experts in their field would be told that they were not meant for Silicon Valley if they had the gall to point out that the Edison violated basic laws of physics. If someone said no, Holmes and former Theranos president and chief operating officer Sunny Balwani would just go out and find someone younger and less experienced who would say yes. Ex-employees and loved ones tell the story of Ian Gibbons, once the chief scientist of Theranos, who, according to his wife, took his own life because “he was so distraught over this stupid patent case.” He was afraid that, if subpoenaed to testify and tell the truth about Theranos’s technology, he would be out of a job.
Over the years, Holmes became increasingly paranoid. She was flanked by bodyguards who referred to her as “Eagle-1,” and former employees recall a culture of secrecy and surveillance, in which their internet and email activity was heavily monitored. But no amount of non-disclosure agreements could ultimately stop employees from sharing what they had seen. The Wall Street Journal’s John Carreyrou recalls speaking to an early source, who told him that the Edison could only do a few tests, and that Theranos was lying about the accuracy of the tests that they were performing in their labs.
Erika Cheung, a lab associate who spoke to Carreyrou, described her ethical quandary over running tests on patients that she wouldn’t run on herself or her family. When she approached Sunny to voice her concerns, saying that, “We’re not letting patients know when these results are false or when we make a mistake,” she was essentially told to do her job and mind her own business. Another employee, George Shultz’s own grandson, Tyler Shultz, spoke to The Wall Street Journal only to receive a letter signed by power attorney (and Theranos board member) David Boies, a temporary restraining order, and a notice to appear in court. Shultz says that his parents spent between $400,000 and $500,000 on his legal fees. At her new post-Theranos job, Erika Cheung was approached by a man with a letter from David Boies, threatening litigation. At the time, she was 23 years old.
When Carreyrou published his findings in The Wall Street Journal, it was the beginning of the end for Theranos—not that Holmes seemed to notice. In a company-wide email, she talked about taking on the WSJ. During a subsequent appearance on Mad Money, she proselytized, “First they think you’re crazy, then they fight you, then all of a sudden, you change the world.” Theranos also issued an official press release, calling Carreyrou’s reporting false and “scientifically erroneous.” In an on-camera interview, Boies criticized The Wall Street Journal’s reporting, insisting, “doctors are happy, patients are happy.” But as The Inventor was quick to intone in a somber voiceover, “doctors and patients were not happy.” The nanotainer was eventually banned and Theranos’s right to operate their lab was revoked, with federal inspectors finding that their blood-testing was so inaccurate as to pose a threat to public safety.
In interviews from this time, Holmes insists on the potential of her business, and repeatedly lies about Theranos’s operations. A Fortune reporter who previously profiled her explains, “I realized that there was something wrong with her mind… What is coming out of her mouth is not mapping on to reality as you and I know it.”
While Holmes was ultimately charged with conspiracy and fraud, many interviewees seem to think that she was not a conscious liar or a crook, but rather someone who became convinced that she was destined to—and still could—achieve the impossible. “We’ll fail 10,000 times if we have to,” Holmes tells the camera, leaving viewers to wonder if Holmes will ever really understand that it’s over.
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