Tag: integrity

“There are no shortcuts to any place worth going.” – Helen Keller

I’ve been listening to the Dropout podcast about the Elizabeth Holmes trial this fall. She is charged with 12 counts of felony fraud in regards to how she handled investor money and advertised to patients. As I said in a previous post, High-Tech Drama I’m fascinated because in my career, I’ve been privy to all the money in high-tech, mostly at Microsoft and how it influences innovation and character.

Elizabeth Holmes was 19-years-old when she dropped out of Stanford and started Theranos in 2003. She positioned the company as a start-up that would revolutionize the blood testing industry by being able to test for a wide array of factors on a portable testing device that only required a small volume of blood.

It never worked – or at least not reliably. For the short time that the devices were rolled out at Walgreens, they provided bad test results like telling a man he had indications of a prostate problem when he didn’t, another that he was HIV+ when he wasn’t, and an excited mother-to-be that she’d miscarried when in fact she hadn’t. Clearly, there were major problems with big consequences for people that received inaccurate results.

I think this trial could be titled “What happens when you give a 19-year-old college dropout 750 million dollars.” (To be fair, Elizabeth Holmes raised most of the 750 million dollars when she was in her 20’s.)  I don’t assume that you have to go to college to be a success but I would think that some training or apprenticeship on how to be a leader, manage finances and run a company, whether it be institutional learning or otherwise would be helpful.

It’s left me wondering if it’s possible to develop character when you are 19 years old and people are throwing money at you. It’s been intimated that she shows narcistic tendencies but I would think it would be more surprising if she didn’t, given that trajectory.

Elizabeth Holmes, who is now 37 years old, testified at the trial. I cannot begin to do justice to all of her testimony but she seem to do a beautiful job of representing herself. She said there’s many things she wished she did differently – like when she put logos from other companies on documents to make it seem like a 3rd party endorsement. But there’s a lot that she can’t remember, even when emails and texts are read to refresh her memory. Her defense has pointed the finger at a lot of other people: the investors should have done better due diligence, the lab director should have spoken up more loudly, her boyfriend and COO was controlling her and so on.

The thing that I heard Elizabeth say that resonated a great deal with me was something like “The investors weren’t interested in the details of what we could do today, they wanted the big vision of what we could do in five years.” Whatever her intent was in making false statements, that matches much of what I’ve seen in high-tech. People want the hear the magic of what might work one day and are willing to entertain a lot of smoke and mirrors in the process of trying to make something real.

If Elizabeth is found guilty (the jury is currently deliberating), there must be hundreds of CEO’s currently doing exactly the same thing. In no way am I justifying lying and deceitful practices but I’m affirming that venture capitalists of Silicon Valley aren’t usually trying to create truth-tellers and reinforce good values.

All I can say is that I’m really glad that no one handed me three-quarters of a billion dollars at age 19, or at any age. I’ve gained so much character by having to earn one dollar at a time.

(featured photo by Pexels)