00:02That less people have to say goodbye too soon to people they love.
00:07But Elizabeth Holmes' claims turned out to be a $9 billion fabrication.
00:13Her company, Theranos, bragged it could carry out 200 diagnostic tests
00:18from a pinprick sample of blood looking for cancer, cholesterol or syphilis.
00:24This could be the apple of healthcare.
00:27You all are part of something that is going to change our world.
00:30What higher purpose is there?
00:32But the reality was they only ever managed to carry out a dozen.
00:37And even then the results were unreliable, outsourced and often doctored.
00:42One patient was told they were HIV positive
00:46and a pregnant woman was told incorrectly she was miscarrying.
00:51Holmes has now been found guilty of multiple counts of fraud
00:55in one of the most shocking trials of corporate history.
00:59There are missionaries and there are mercenaries.
01:02And so some of the founders are missionaries who are able to have this zeal
01:08where they can go out and convince lots and lots of people
01:12that their way of changing the world is the right way of changing the world.
01:16But I think what we have seen in the case of Elizabeth Holmes is a combination of a missionary and a mercenary.
01:23And that combination turned out to be deadly.
01:26In the wake of the explosion in value for tech companies like Facebook, Google and Apple,
01:31Theranos capitalized on the raw hunger for more.
01:35No one wanted to miss out on the next Mark Zuckerberg.
01:39She slid seamlessly into the role of darling of the industry.
01:43There are models for doing well by doing good.
01:46Sat next to Jack Ma, she was even praised by presidents.
01:50You founded this company 12 years ago, right?
01:52No.
01:53Tell them how old you were.
01:54I was 19.
01:56She set up Theranos in 2003 after dropping out of Stanford.
02:01In 2013, they signed a deal with Walgreens Boots to install their technology in shops around the US.
02:08And by 2015, Theranos is valued at $9 billion, supposedly making her the richest self-made woman in America.
02:17But within 12 months, regulators closed down a Theranos lab,
02:22saying there was an immediate jeopardy to patients' health and safety.
02:26And in 2018, the company was broken up after a series of further raids.
02:33The problem was that when she became fully aware that this technology was not scaling,
02:38and she was literally faking results using other machines,
02:43at that point she did not have the moral underpinnings of someone who would stop.
02:50Holmes ignored the technology problems and instead redoubled her PR efforts,
02:55styling herself on another tech giant, Steve Jobs,
02:58copying his fashion choices and even emulating his deep voice.
03:02People don't even know that they have a basic human right
03:08to be able to get access to information about themselves and their own bodies.
03:14We all love a genius and we all love potential.
03:18And I think that that's what draws people in.
03:21There's a whole raft of research suggesting that if you have a proven performer
03:25and you have somebody that has a lot of potential but is yet unproven,
03:28usually we go for the unproven high potential person because we think the sky's the limit.
03:34She targeted big egos, old men who were the power brokers of the 70s and 80s.
03:40Henry Kissinger and George Shultz alongside former General Jim Mattis,
03:45latterly brought back under Trump.
03:47They were a strange collection of Washington war horses,
03:51whose expertise on science and technology was less clear.
03:55Her investors were equally well-seasoned, most famously Rupert Murdoch,
03:59who lost $100 million or more betting on homes.
04:02Is investment always rational?
04:04Oh, I think it's always irrational.
04:06I really do.
04:09My gut tells me that rational investments probably don't yield the sorts of returns that make eye-popping headlines.
04:17Don't we all sort of, when we invest, hope that it's the next big thing?
04:22And that's probably one of the most important parts of the market.
04:26In the first nine months of last year, almost $100 billion was raised by venture catalysts.
04:31And while sophisticated investors may distinguish between missionaries and mercenaries,
04:36the reality is that many tech titans display both qualities equally.
04:42Heli Abrahimi.
04:46Well, joining me now is Gerrit de Vink, the Washington Post technology reporter
04:50who is following the case and is based in Silicon Valley.
04:53Gerrit, thanks very much for coming on the programme.
04:55How was she able to dupe all these really clever people
04:59who supposedly know exactly where to put their money?
05:12Gerrit, you've muted your mic.
05:15Gerrit, you've muted your mic.
05:17You've got to unmute your mic.
05:19I'm terribly sorry.
05:20This is two years into the pandemic.
05:22I'm still learning this.
05:23You're a technology reporter.
05:24What's going on?
05:26To answer your question, I mean, she used...
05:28Bad, bad, bad.
05:29Okay.
05:30We're going to start again.
05:31How was...
05:32Okay.
05:33Forget it.
05:34We sorted that out.
05:35How was she able to dupe all these really clever people?
05:37So she used the language of Silicon Valley, you know, that conversation about getting in early,
05:44you know, being part of disruptive technology, saying to old industry titans,
05:49you don't know what you're talking about.
05:51We're going to be disruptive.
05:52And she went to people who weren't necessarily in the technology industry,
05:56some of those who were highlighted in the excellent report that we just witnessed.
05:59And so, you know, a lot of people had seen the wealth that was already being generated in Silicon Valley,
06:05and they wanted to take every opportunity to sort of jump in.
06:08And it was a time when a lot of companies, not just there and us,
06:11were raising money on promises that were much fluffier than the ones that even she was making.
06:17So is it unfair or fair to describe as the birdie made off of Silicon Valley?
06:22Yeah.
06:23I mean, I think, you know, Silicon Valley, I mean, throughout this trial,
06:26it's been interesting because a lot of the big names in the Valley have been saying she's not one of us.
06:31She took money from people who weren't traditional tech investors.
06:34She was a health care startup.
06:35But the reality is she went to Stanford University.
06:38Her social circle was very much within that same circle that companies like Facebook,
06:44Google had been funded out of.
06:46And so at the time when she was gracing the covers of magazines,
06:49when she was raising all this money, when she was being feted as the future of sort of the tech and health industry,
06:54no one was saying, you know, no one was asking those tough questions within that industry.
06:59So I do think that Silicon Valley can't completely wash their hands of Elizabeth Holmes.
07:04But it is also true that, you know, she didn't raise money from, you know, the bulk of her investors did come from outside of technology.
07:12And is there a broader spectrum here?
07:16What a problem here for Silicon Valley, especially that loves to find the next Steve Jobs,
07:21that is more prone to this kind of, you know, snake oil stuff than perhaps even Wall Street is?
07:27Yeah, I mean, absolutely. You know, there's there are cases, you know, Silicon Valley will say, look at Elon Musk.
07:33I mean, the idea of an electric car has been around for decades.
07:36And why didn't GM, why didn't Ford, why didn't Volkswagen create the next, you know, large electric car company?
07:43And there was a lot of naysayers and suddenly he went and did it.
07:47And now his company is worth more than many of those car makers combined.
07:50And so I think that there is definitely still some truth to the idea that someone really coming from the outside, someone with a very idiosyncratic idea can really disrupt an industry.
08:01But for the most part, you know, the people who are in these traditional industries kind of, you know, they do know what they're talking about.
08:07Blood testing is a difficult thing that people haven't working on for a long time.
08:11And I think an important point to note is that when the reporting first came out about these serious questions about Theranos, I mean, this was five or six years ago.
08:19And if you look at the last five or six years in tech reporting, you can see that it's been much more critical.
08:24People have asked much tougher questions.
08:26You see this most obviously when it comes to Facebook.
08:29Look at the Facebook whistleblower going and exposing some of what's going on inside of that company.
08:35You know, look at unionization attempts at Amazon.
08:38People do not treat the tech industry the same way that they did in 2013, 2014 with this kind of wide eyed wonder.
08:44And I do think that Theranos was sort of the beginning of that or one of the important elements that helped break open that sort of sort of a sycophantic view towards Silicon Valley.
08:58And that's how we managed to make the technology work go to think of the Washington Post in Silicon Valley.
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