
Alex Gibney on the Fall of Theranos and Elizabeth Holmes - danso
https://www.theguardian.com/technology/2019/mar/17/americans-have-a-fascination-with-fraudsters-alex-gibney-on-the-fall-of-theranos-and-elizabeth-holmes
======
clra
> _The Oscar-winning director presents a sympathetic portrait of the Silicon
> Valley CEO who fooled the world into believing she had built a better blood
> test_

I really don't know how to feel how to feel about that one. The final jury is
out until we get to see the new series of course, but I hope he didn't portray
her as too sympathetic.

I recently finished Carreyrou’s book and found it legitimately disturbing.
Holmes and Balwani didn't just lie and cover up bad results, but actively
crucified any of their employees who dared question what they were doing in a
way that's hard to interpret as anything except sinister malice.

This might be best exemplified by Tyler Shultz, who ended up spending $400k in
legal fees defending himself from Holmes and her lawyers [1]. Carreyrou was
harassed by their legal team to suppress the stories that eventually led to
Theranos' exposure, and you can't help but think throughout the book that the
only way he could've done what he did was having the counter-legal team of the
WSJ available, and deep pockets to fund it. Throughout the reveal process,
anyone who was thought to be possibly leaking information was threatened with
recriminatory lawsuits, and in America's shining light of a legal system any
kind of company-on-individual action is a recipe for misery and bankruptcy.

Holmes is one of the least sympathetic people I can imagine, and it'd be
unfortunate (and a disservice to any of the people whose life she either
destroyed [2] or tried to destroy) if Gibney improperly represented that
through some kind of misguided artistic notion, especially given that there's
a non-zero chance that something as high profile as an HBO documentary could
indirectly influence the results of the upcoming criminal trial.

[1] [https://arstechnica.com/science/2016/11/the-personal-
bloodba...](https://arstechnica.com/science/2016/11/the-personal-bloodbath-
behind-theranos-rise-and-fall/)

[2]
[https://en.wikipedia.org/wiki/Ian_Gibbons_(biochemist)#Death](https://en.wikipedia.org/wiki/Ian_Gibbons_\(biochemist\)#Death)

~~~
projectramo
Having read Bad Blood, I kind of believe it. Hear me out (also have not seen
it).

I really think that she thought she could make the machines work. I think
Holmes and Balwani thought that, given enough time and enough smart people
they would eventually get a working version. I think they thought -- they may
still think -- that it was a question of throwing more resources at the
problem.

The whole thing would have lasted longer if they had not put a deadline on
themselves by actually releasing it into the wild with the Walgreens deal.

~~~
maxxxxx
"I really think that she thought she could make the machines work. I think
Holmes and Balwani thought that, given enough time and enough smart people
they would eventually get a working version. "

What I got from the book was that they gave up pretty early on making real
progress and instead decided to lie. By not allowing their people even to talk
to each other they pretty much made it impossible to make progress. If you
have a big, hairy, unsolved problem the first thing you have to do is to make
sure that as many people as possible understand the extent of the problem.

They are just soulless liars and bullies and deserve no excuses.

~~~
paulcole
> What I got from the book was that they gave up pretty early on making real
> progress and instead decided to lie.

What specifically in the book made you believe this? I'm halfway through and
so far it sounds like nothing worse than any other megalomaniac start-up
founder.

~~~
maxxxxx
They fired anybody who had any doubts like the CFO at the beginning of the
book. Someone who honestly wants to solve a problem doesn't do that. They also
never had any real idea how their stuff should actually work other a "vision".

------
hhs
_" I think the connection between scientology and Elizabeth Holmes is the
“prison of belief”. Look at what happens to [Theranos board member] George
Shultz – the grandfather of [eventual whistleblower] Tyler Shultz; the noted
Secretary of State. Even when his grandson comes to him and says, “You know
Grandpa, there’s rampant fraud at Theranos”, he can’t undo or retract or
unwind the belief that he has. He’s in a prison of belief of Elizabeth Holmes.
He’s committed to her, and for him to say, “Oh wow, that’s terrible”, would
mean that he has to go back to the beginning and admit that he was duped and
fooled."_

In the social sciences, they call this 'belief perseverance'. To take this to
an extreme, think of how many generations of people were convinced of
geocentrism.

~~~
ChuckMcM
I think that captured the key essence of a lot of the fraud that goes on.
Essentially you have people who consider themselves to be reasonably critical
thinkers, and the dissonance of how wrong they were is so great that the
external information is rejected. Being aware of this effect is critical for
people who want to be active listeners. You have to accept the possibility
that the information you are hearing that goes against everything you believe,
might be true, and then work to understand whether or not you can test the two
disjoint beliefs for validity.

Were I in the position George found himself in, I would start by asking deeper
questions about how the process works, how it fails, and how one can test that
it is working as expected. If people get evasive it lends credence to the
dissonant information, if they are forthcoming and have answers to the
questions, it tends to support the core belief. "Trust but verify" is often
used in this sort of context.

Always listen for meta-data and probe it when it throws up red flags. When
someone gets angry in response to what seems like a simple question, follow
that anger to see where it originates.

~~~
hhs
Good points, these are useful ways to confront it. Sometimes, I also think of
Andy Grove's motto, "only the paranoid survive", which helps to check and
challenge ideas.

------
rofo1
Anything less than the following is just displaying lack of morality in our
whole society:

Elizabeth Holmes and her boyfriend Balwani are absolute psychopaths without
remorse or conscience. We should not give them this much attention. I can't
help but feel that we are doing something wrong by talking and writing about
them, as if they are something special. They should be in jail, and the facts
of the case should be made public, and that's it - end of story.

If we portray them in any other way, we are just doing disservice to everyone.

For further reading, Carreyrou's book is OK-ish (can be read in a day) but
really - it's a bunch of stories about how psychopaths lie to stay in power.
It's a nice book, but in the end we are talking about people that
pathologically lie, and even dumber* investors that throw money based on
signalling/stories and not facts/prototypes/verification of any kind of
anything. That's pretty much it.

Much better literature would be 'Snakes in Suits' and 'Without Conscience',
both by Robert Hare, the guy that has created the psychopath checklist (the
tool used to clinically diagnose psychopaths, like a psychopath test). I
highly recommend both of the books (especially 'Without Conscience'!)

* that's just my opinion: throwing millions without anything close to a prototype that works AT ALL is just something that an imbecile could only do. Goes to show what kind of people hold capital in the millions. Remarkable.

------
hjk05
> You know, if you’re pursuing a noble goal, it’s OK to fake it ‘til you make
> it.

This seems completely be starkly in contrast with reality. She did not persue
a noble goal and secondarily achieve power and wealth. If that was the case
she would never had sent out bogus resulst for patients of hunted innoscent
employees for presenting the truth.

All the facts on the table tell a tale of a person who wanted money, power and
influence, and sat with a 2-7 off suit and decided to bluff on the off-chance
that everyone else would fold.

It’s sad that Alex Gibney has decided to spin a story he wants to tell around
a reality that doesn’t support it.

~~~
darkpuma
Bad Blood makes it pretty clear that _" becoming a billionaire"_ was her
number one priority.

------
samfisher83
Why is she not in jail. The fyre guy is in jail and she messed with patients
lives. I think its much worse that what he did.

~~~
AndrewBissell
Her criminal trial hasn't started yet and she's out on bail. The SEC slapped
her with a 10-year D&O ban which, short of a lifetime ban, is their most
severe civil penalty.

------
AndrewBissell
It's really shameful that Tim Draper continues to defend Elizabeth Holmes even
after all the details about her harassment of ex-employees and whistleblowers
have come out.

~~~
skwb
Considering this is the same Tim Draper that wanted to separate California
into 6 states that would effectively concentrate silicon valley wealth while
leaving counties to the eastern states some of the poorest in the nation just
to weaken the state's democratic position, I feel happy he lost his money in
this company [0].

[0].
[https://www.huffingtonpost.com/2014/03/07/california-6-state...](https://www.huffingtonpost.com/2014/03/07/california-6-states_n_4890982.html)

------
sachin18590
I often question if putting so much blame just on her while treating her
investors with a lens of victoimhood is a good idea? For all I know, Theranos
was a vicious death spiral which grew so big purely because there were a ton
of investors writing big checks to Holmes either without doing basic due
diligence or being knowingly complicit in the lackings of the company. Their
checks were the reason Holmes got empowered so much in the first place and
dared to think that she is perhaps on the right path and could continue
pulling off a fraud.

------
chrisa
Does anyone know if it’s possible to see the actual deposition tapes
somewhere? Just curious

~~~
robterrell
I believe the podcast "The Dropout" plays some of them.

------
hn_throwaway_99
Folks that are commenting here that "well Big Company XYZ does some shady
stuff how is that any different" honestly make me very sad.

If you've read Bad Blood and can honestly say that the behavior of Google,
Tesla, et al reaches anywhere close to the level of deceit, malice and
downright sociopathy exhibited by Holmes and Balwani, I question your moral
compass.

------
rdtsc
> But I think that the more important thing about Elizabeth to me is that she
> did have a mission – a noble mission

Did she? The proof offered was that she didn't pay herself as much money as
Madoff did, so consequently her mission must have been noble. People do things
not just for money, especially if they are already well of. They want
validation, power, fame, etc.

> Fake it ‘til you make it is something that’s imbued in the DNA of a lot of
> Silicon Valley companies.

Ok, well Google and FB are shady and play fast and loose with people's data.
Why shouldn't Holmes play fast and loose with people's blood tests. Let's not
judge her too much.

> Elizabeth exists on a spectrum of people who over-promise and sometimes way
> under-deliver and sometimes commit fraud.

The spectrum also extends to how much she was praised and touted as a great
young entrepreneur. She wasn't just quietly running a scam, but basking in the
lime-light dancing to "U Can't Touch This" (figuratively and literally
[https://www.cnn.com/2019/03/11/tech/the-inventor-theranos-
do...](https://www.cnn.com/2019/03/11/tech/the-inventor-theranos-
documentary/index.html)).

> Because if she’s just the bad apple – you know that’s what they said about
> the people at Abu Ghraib.

Right, she is just like the people tortured at Abu Ghraib. Poor thing, how
will she ever recover.

There is element here I think where the directory himself wants to stir
controversy and one way to do it is to present her in a rather sympathetic
way. Otherwise not sure how to interpret the "Abu Ghraib" and fraud is just "a
spectrum" comments. It might pay off I suppose. But it's a bit too
transparent.

~~~
jonny_eh
> Right, she is just like the people tortured at Abu Ghraib. Poor thing, how
> will she ever recover.

I think he meant that she's like the torturers at Abu Ghraib. She may be
guilty, but so is the system around her.

During that scandal, some people argued that the American war on terror wasn't
corrupt, there were just a few bad apples that took it too far.

~~~
rdtsc
Ah, you'r right. But it still doesn't work to bring that Abu Ghraib into this
at all. The story then becomes that she was just part of a broken system and
isn't responsible?

~~~
jonny_eh
Both can be true. Especially if you look at it as someone taking advantage of
a broken system.

------
georgewsinger
Contrarian question: is Elizabeth Holmes _really_ as bad as consensus makes
her out to be? I read _Bad Blood_ when it came out. Here are some questions I
had:

1\. __Base rate insensitivity. __Carreyrou argues that Theranos prototype(s)
were abundant in Type 1 and Type 2 errors. Yet, as far as I recall, it was
never specified what the acceptable error rate is for a blood testing machine,
and precisely how deviant Theranos ' machines were. If we found out, for
example, that an acceptable Type 1 error rate for a blood machine was 1%, and
that Theranos' machines were yielding 3% Type 1 errors, I wouldn't be as
offended had they been yielding 20% error rates. So exactly _how_ error prone
were Theranos machines compared to base rate? It was never specified. This
makes it really hard to quantify the level of harm they were (or might have)
imposed on society.

2\. __Theranos might have had a legitimate path to product. __No one seems to
dispute that Theranos had actual prototypes that functioned to some degree.
The issue is that they functioned (i) with unsuitably high error rates (see
above) and that (ii) Theranos ' machines were on their own only able to test
for certain things.

But it's still unclear to me if they had an actual path to finishing their
machines to spec. (The book concentrated on Holmes' misleading people on how
much progress they had made, but this is distinct from whether or not Theranos
had a secret plan to finish things). For sake of argument suppose Theranos
needed another 3 years to finish their machines to spec. If Holmes had pulled
it off, we might had called her a hero (at least I might have). So did Holmes
have a path? It's unclear reading the book, from what I recall.

Of course, the history of SV is full of people pushing the edges. This leads
us to point 3:

3\. __Carreyrou 's anecdotes of harm were weak. __Carreyrou was unable to find
compelling cases of people being _severely_ harmed by Theranos machines, or so
one could argue. Here "severe harm" to me means: failure to identify life
threatening diseases (Type 2) causing, i.e., _death_. If I recall Carreyrou
_did_ find one case of Theranos machines misdiagnosing severe diseases (Type 1
error causing someone thousands of dollars of further blood tests + serious
anxiety along the way).

Of course, that's not a good thing. I wouldn't wish that upon anyone. But only
one case? (Keep in mind that normal blood tests already can give people Type 1
errors [causing anxiety, further medical expenses, etc]; see point 1). And
compare this harm to the amount of good Theranos would had been able to add to
society had they succeeded in their engineering efforts (assuming they did
have a path to victory).

4\. __Holmes had skin in the game. __If I recall, Holmes fought tooth and nail
to maximize her equity in Theranos, and when the (alleged) house of cards came
down, she had less than $1M in net worth. This strikes me as consistent
behavior with someone who genuinely believed in her plan (and hence the long-
term value of Theranos). At worst Holmes was totally delusional, but it seems
less likely to me that she was a legitimate con artist.

I just want to clarify: it's been a while since I've read _Bad Blood_ (and
actually, I quite enjoyed the book). And I don't condone misleading investors,
fraudulent behavior, etc. I'm sure I'm missing some serious things Theranos
did that could have been criminal. But Carreyrou (himself not an innovator)
seemed at times to do a poor job considering the alternate viewpoint
sincerely: that Holmes was just pushing the edges, and that it was at the end
of the day worth it. His book no doubt set the dominoes in motion for Theranos
to implode. So I felt compelled to explore this alternative viewpoint and to
get it in writing. Cheers.

~~~
hn_throwaway_99
> No one seems to dispute that Theranos had actual prototypes that functioned
> to some degree.

Not true. Not sure if people would call it the consensus view, but many
(most?) scientists who study microfluidics believe blood is not homogeneous at
the very small pin-prick volumes Theranos was sampling. Not only did their
technology not work, it actually wasn't possible for it to work for
quantitative assays.

~~~
sk5t
You got it--folks who've dedicated their entire careers to the nuances of
blood testing were screaming about this for years. The unsuitability of
capillary blood for many tests is not something that can be overcome with
will, desire, software, and moxie.

~~~
skwb
I feel her fundamental problem was that she was mistook "we always do it this
way because it historically has been such" with "we always do it this way
because there is a scientific reason".

~~~
notfromhere
if she stayed in her science classes for longer than two semesters, she might
have learned that instead of facing decades in prison time

------
robertAngst
This is going to be Tesla and Elon, but he won't be nearly as bad because he
has government contracts with SpaceX.

To be fair 60B Mkt Cap is irresponsibly high on the part of investors. The
same could be said about this situation.

~~~
projectramo
Wait, you're telling me the Tesla doesn't drive??!!! They've fooled so many
people!

