Stanford University is famous for its drop outs.

The institution is known as the kind of place where brilliant people go, tread water, and later leave. But also, quite literally, the college is known precisely because its most famous alumnae didn’t actually end up graduating. 

JFK, Reese Witherspoon, Tiger Woods, Google co-founders Larry Page and Serge Brin… all of them enrolled at Stanford, and all of them ended up leaving before they completed their classes in pursuit of something – politics, stardom, sporting prowess, the biggest tech company in the world – more.

Elizabeth Holmes probably knew this when she went to Stanford as an undergraduate, only to drop out of the college at the age of 19. By that point she already had the idea for the business that would be known as Theranos: blood testing that required no needles and only a small amount of bodily fluid. So she dropped out of Stanford and used the money she would have spent on her tuition to found her company.

The year was 2004, and she already had her first patent. A decade later she would have more than 80 around the world and Forbes would name her the world’s youngest female self-made billionaire, courtesy of her company’s market value of $9 billion. (50% of Theranos’ stock was in Holmes’ name.) 

She appeared on the cover of T, the New York Times’ style magazine, Inc, Fortune and Forbes. The company received investment from Rupert Murdoch and Betsy DeVos. 

It was all far too good to be true, of course. Theranos’ technology didn’t work. The company’s blood-testing device, known as Edison after Thomas of the lightbulbs, produced inaccurate results. According to the Centers for Medicare and Medicaid Services, Theranos’ labs did not follow correct procedures and were not populated with the right equipment. A series of more than a dozen articles by investigative reporter John Carreyrou for the Wall Street Journal laid out these inconsistencies in great, damning detail.

The company had lied, stating that it had an income stream of $100 million in 2014 (in truth, it was $100,000) and that they were in partnership with the Department of Defense to use Theranos technology in warzones. (Not true.) Forbes revised the company’s value from billions of dollars to zero. Lawsuits began springing up, left, right and centre. One, targeting Holmes and Theranos’ president and COO Ramesh ‘Sunny’ Balwani, is still ongoing.

All this barely scratches the surface of the weird, chilling, unbelievably true story of Elizabeth Holmes.  

The early days of Theranos

When Holmes was asked what she wanted to be as a child, she often replied that she dreamt of being “a billionaire”.

These are the details that form the foundational stone of a Silicon Valley origins story, a city where origins stories and myth-making are more commonplace than Apple Watches and green juice, a place where more money has been generated within its 50-mile radius than anywhere else in the world.

Many tech founders are drop outs (Steve Jobs, Bill Gates, those Google founders from – all together now – Stanford). Most have a specific uniform (Jobs’ turtlenecks, for example, or Mark Zuckerberg’s charcoal T-shirts and hoodies). All of them have a story about how they got the job, whether by divine intervention or sheer grit or a mystical combination of the two.

Holmes, a female founder in an industry dominated by men, followed the same path. She was famous for wearing a black turtleneck and puffer vest every day, a nod to Jobs’ own daily uniform. As such, the Theranos offices were kept hovering at 18-19 degrees so that their esteemed founder would never overheat. 

There were other Holmes idiosyncrasies, too. She spoke of a fascination with blood, telling Fortune that she was able to analyse two blood samples side-by-side and tell whether someone had just eaten a healthy lunch or if someone had eaten a burger. 

She had no life outside of Theranos, abstaining from dating, catching up with friends or going on vacation. She went vegan, surviving on green juices (cucumber, parsley, kale, spinach, romaine lettuce and celery, according to Vanity Fair) so that she could stay awake for longer. Profiles frequently referred to her as the next Steve Jobs or Bill Gates. 

But there were the strange details, too. People often commented that Holmes doesn’t blink that often, something that made her “mesmerising,” as journalist John Carreyrou put it. She would speak in a deep voice, which she dropped below her usual register. “I think she felt that she needed to have a man’s voice to be taken seriously,” Carreyrou said. She hired the same advertising agency that Jobs used with Apple, and even met with them on the same day that he had met with them. (Wednesdays.) 

In the early days of Theranos the business functioned as most tech companies do: in total secrecy. Holmes was raising money like it was going out of fashion – Theranos had $92 million in venture capital in the coffers by 2011 – but her company didn’t have so much as a press release or a website at the time. 

Everything changed in September 2013 when Theranos inked a deal with pharmacy chain Walgreens to offer blood testing in their shops. All that was needed was “a few droplets of blood derived from the tip of a finger”, as Holmes put it, and an incredible wealth of medical detail could be divined. Healthcare would be improved. Testing would be cheaper. Lives could be saved.

“I started this company because I wanted to spend my life changing our health care system,” Holmes told Wired in 2014. “When someone you love gets really sick, most of the time when you find out, it’s too late to be able to do something about it. It’s heartbreaking.”  

The clues were there

In a lot of Theranos’ early press, the clues that there was something seriously wrong with its testing technology were there.

When asked by The New Yorker how Theranos’ technology worked, Holmes’ response was broken and inscrutable. “A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel,” Holmes said.

In a 2014 cover story for Fortune, Holmes again would not reveal how the Edison worked. “Precisely how Theranos accomplishes all these amazing feats is a trade secret,” Fortune wrote. Holmes told them that they use the “same fundamental chemical methods” as other labs, but that they have made advances in “optimising the chemistry” and “leveraging software” to test using small blood samples. Other reports spoke of NDAs handed out to Theranos’ visitors like name badges. 

By 2015 it had all come crashing down. In October Wall Street Journal investigative reporter John Carreyrou published his first of several articles detailing the internal issues at Theranos. The piece was headlined: “How startup Theranos has struggled with its blood-test technology.” Carreyrou would go on to publish the bestselling book Bad Blood, which has been optioned by Oscar-winning director Adam McKay (Vice, The Big Short) to be turned into a film starring Jennifer Lawrence.

Carreyrou’s investigation began with a tip. It wasn’t a whistleblower from inside Theranos, but a pathologist who had read a profile of Holmes and couldn’t believe the claims she was making about Edison’s blood-testing capabilities.

Carreyrou agreed. “I had read The New Yorker profile of Elizabeth Holmes and had immediately found some things in that story odd,” the journalist has said. 

“One in particular was the notion that, as a 19-year-old Stanford dropout with zero formal training in medicine or lab science, she could create new technology for blood testing that would completely change the face of that industry. I knew that sort of thing happens in the computer industry, but my coverage of medicine over the previous 10 years told me that it didn’t work that way in the medical world.” 

What went wrong?

Holmes had a vision for a world in which blood-testing could be simple, relatively pain free and inexpensive, running several different kinds of tests from a single, tiny amount of blood.

At first, Holmes approached her professors in the engineering faculty of Stanford, like Phyllis Gardner, most of whom told her that her idea would never work. This is because pricking a finger isn’t an accurate or reliable way to test for blood. It’s not enough blood, for a start. But also, a pricked finger is a space where the drawn blood can get mixed up with a whole lot of other material. It doesn’t provide a clean sample.  

As Carreyrou puts it, Theranos’ scientists “tried to make it happen”. They attempted to realise Holmes’ vision with various different inventions, none of which worked. When they landed on the product that would become known as the Edison, it emerged that the device was “not only rudimentary but unreliable and produced inaccurate results”. Later, they would run tests on “regular commercial machines that they hacked”.

According to Carreyrou’s reporting, Holmes and her right hand man and eventual boyfriend Balwani exaggerated the capabilities of the Edison machine and pitched investors on the efficacy of their product knowing that it didn’t work. “That’s when it really crosses the line into a massive financial fraud on the one hand, and then fraud against doctors and patients and the public on the other hand, because she is exposing the public… to these faulty blood tests,” Carreyrou has said.

In a documentary about Theranos called The Inventor, employee Dave Philippides admitted that, while testing the Edison device on blood samples that could have contained diseases including Hepatitis, he would reach his hand into the device when it stopped working. “There were needles with the device that could puncture skin, and there’s free agents in blood and everything is spilling all over the place,” Philippides said. These devices kept breaking, with bits and pieces falling off the devices and exploding during the testing phase.

At its most successful point, Theranos employed 800 people and was worth $9 billion. As of September 2018, the company had a valuation of zero and had announced that it was closing down. Formal charges of nine counts of wire fraud and two counts of conspiracy to commit wire fraud were brought against Holmes and Balwani, charges that carry with them jail time of up to 20 years. Both Holmes and Balwani pleaded not guilt. The case is ongoing. 

Ask Carreyrou why he thinks everyone got “taken in” by Theranos and he has a simple answer. “Elizabeth Holmes is actually very intelligent and a remarkable pitch woman,” he has said. 

“She seemed genuinely passionate about changing the world and changing the face of lab medicine. The combination of these things, the way she looked at you, the deep voice, the intelligence and the passion really made people believe in her and want to back her.” 

Where is Elizabeth Holmes now?

Before Theranos’ downfall, Holmes loved to travel on private jets with a security team who referred to her as ‘Eagle 1’. She has quit the private jets for the moment, downgrading to first class as Vanity Fair reports, but she still boasts the drivers, private security, assistants and a publicist, who earns $25,000 a month. In the glory days of Theranos, all these things would be expensed, as would meals and clothing.

Holmes was living in Los Altos in Silicon Valley with her dog Balto, a Siberian husky whom she adopted in 2017 and brought into the offices at Theranos, where Balto would frequently relieve himself unhygienically all over the labs. 

Recently, Holmes has taken to telling people that Balto is a wolf. Together with her part-wolf dog, Holmes is living in a flash San Francisco apartment with her fiancé, the heir to a hotel fortune named Billy Evans eight years her junior. She has ditched the black turtlenecks and now wears almost exclusively activewear. 

“Elizabeth sees herself as the victim,” a source told Vanity Fair. 

According to ABC News, Holmes is spending her downtime as the trial unfolds in Silicon Valley, approaching investors to fund a new business. 

Where can I find out more information about Elizabeth Holmes and Theranos?

There are several places to learn more information about the Theranos scandal. You can buy Carreyrou’s book Bad Blood, and eagerly await the movie adaptation starring Jennifer Lawrence. You can stream the podcast The Dropout, which deep dives into Holmes’ backstory and the creation of Theranos.

You can also watch the documentary The Inventor by Alex Gibney, the man behind documentaries Going Clear and Enron, in the US on HBO now and in the UK later this year.  

Images: Getty, Unsplash