So, imagine you’ve just taken investors for a multi-billion ride through fraud and lies. What do you do next, given that you’ve been found out? You raise money from investors for a new adventure, don’t you? Not that this is what Elizabeth Holmes is doing, no, not at all:
The word is that Elizabeth Holmes is looking to raise money for a new startup.
The 34-year-old founder and CEO of the embattled blood-testing startup Theranos is courting Silicon Valley investors in hopes of forming a new company, according to a Vanity Fair interview with the author John Carreyrou.
Carreyrou, the Wall Street Journal reporter who first revealed Theranos had misled the public about its blood-testing product, didn’t disclose what the new startup was or whom Holmes was meeting with.
If you’ve not been following the saga:
As Carreyrou writes, the company she built was just a pile of one deceit atop another. When Holmes courted Walgreens, she created completely false test results from their blood tests. When the company’s chief financial officer found out, Holmes fired him on the spot. Holmes told other investors that Theranos was going to make $100 million in revenue in 2014, but in reality the company was only on track to make $100,000 that year. She told the press that her blood-testing machine was capable of making over 1,000 tests, when in reality, it could only do one single type of test. She lied about a contract Theranos had with the Department of Defense, when she said her technology was being used in the battlefield, even though it was not. She repeatedly made up complete stories to the press about everything from her schooling to profits to the number of people whose lives would be saved from her bogus technology. And she did it all, day in and day out, while ensuring that no one inside or outside her company could publicly challenge the truthfulness of her claims.
There’s a great deal more of it as well. There wasn’t even any real possibility of the technology working in the first place:
For years, I’ve discussed Theranos amongst my pathologist colleagues, most of whom were skeptical from the beginning. The promises were, quite simply, too good to be true. If the thousands of laboratory tests being done on standard venous blood samples could be so easily replicated with finger-stick blood, it surely would have been done. Both the source of the tested blood, as well as the volume, are critical elements to laboratory testing. Many tests do now have both standard and finger-stick options, such as blood sugar testing in diabetes. Finger-stick tests require careful validation – by correlating results to standard tests – and often still do not achieve perfect accuracy.
So, you’d have to be mad to invest in anything she was promoting, right? Well, yes, probably so, if she were to be the CEO of the new business adventure. However, think through how the business world works for a moment. I’d certainly go into business with her, if such were offered. As long as she was the public face of the company and had no operational role at all that is.
For, what is the most difficult thing to achieve? Publicity – for a start up, at least, that really is the thing. People knowing that you exist. And anything that Elizabeth Holmes gets involved with is going to have publicity coming out the wazoo, isn’t it? Thus an ambitious start up might well bring her on board with all sorts of fancy titles and jobs descriptions – but, obviously, no executive role at all.
Hey, why not, I’d do it. So would hundreds of thousands of others too. Because you’d never be able to afford that publicity, would you?
hmmmm. but can you keep her out of an operational role? And beyond that, could you cope with the fallout from any lies or impossible commitments she makes for you? There’s a lot of risk there. So, small investment and lots of equity, or you could simply remember the old adage about if you lie down with dogs you get up with fleas.
On the other hand, she is pretty enough. That seems to have kept her out of jail. Might do it a second time.
But I think I’d pass on any such opportunity.
We know Holmes’ decision-making process, and one facet is to “fire…on the spot” people who discover the frauds being committed. Sure, she might be the public face of a new company, or be its sales-pitch-woman. But anything more, and one suspects she will do those other things in much the same way she did them before.
I suspect we’ll see her again one day on some sort of reality show such as American Gladiator or perhaps Dancing with the Stars (while in leg irons).
Having ended up associating with a sociopath (Mr. Simon, for those of you who remember) in the course of doing business, I can honestly say that associating with sociopaths is a bad idea under any circumstance. And all indicators point to the fact that Ms. Holmes is most certainly a blue-chip sociopath.
The problem with associating with dirtbags like Ms. Holmes is that dirtbags travel in packs, and if you hang around a pack long enough there are those who will assume you’re a dirtbag as well. I’d give Ms. Holmes a wide steer, but that’s just me.