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Blood, sweat & tears: The saga of Silicon Valley's greatest scandal

Rain Speake dives into a company that based its ground-breaking technology on lies.

Silicon Valley is a region nestled in the southern part of the San Francisco Bay Area in Northern California. It serves as a global hub for emerging scientific breakthroughs and disruptive technology and thus, is widely known as the epicentre of innovation. The area is home to some of the world’s most influential companies, boasting residents that include Apple, Facebook, and Google. As the centre of research and development, the Valley is also the birthplace of many exciting start-ups which encompass a multitude of different industries. These industries can range from artificial intelligence and fintech, to blockchain and medical technology. In a world where individuals are becoming increasingly more conscious about their health, the growth of the latter market shows no sign of deceleration any time soon.

In the first half of the last decade, a medical technology start-up known as Theranos, became one of Silicon Valley’s most promising rising stars. Its ground-breaking invention, the Edison machine, claimed to perform a series of diagnostic tests from the comfort of your own home. While existing technologies require at least one vial of blood, Theranos professed capabilities in conducting complex genetic analyses and hormone level measurements from a simple prick of the finger. Fast, convenient, and inexpensive, the company seemed to be offering a device that could potentially transform healthcare as we know it.

This pioneering piece of technology was the brainchild of Founder and CEO, Elizabeth Holmes. Saddened by her uncle’s death from cancer, Holmes wanted to develop a way to detect diseases earlier. As a result, she dropped out of Stanford in her sophomore year to found the company using her tuition money. The combination of the device’s outstanding claims paired with Holmes’ notable charisma led to the influx of numerous multi-million dollar investments. By 2014, Theranos was valued at a whopping USD 9 billion, making Holmes the world’s youngest self-made female billionaire at the age of 31. Donning an identical black turtleneck, Holmes was frequently hailed as the next Steve Jobs and was similarly perceived as a celebrity within tech circles. Due to her success, she went on to grace the covers of Forbes and Fortune, and was even named one of Time’s “100 Most Influential People” of 2015.

Theranos Chairman, CEO and Founder Elizabeth Holmes interviewed at TechCrunch Disrupt in 2014

To a common outsider, Holmes and Theranos appeared to be flying high with limitless boundaries. The only problem? This supposedly revolutionary device that was projected to change the world, did not actually work.

John Carreyou, of The Wall Street Journal, first broke the story in 2015. Thanks to information given by Theranos whistleblowers, it was revealed that the establishment had not been running its own technology when conducting the majority of its blood tests. Instead, it had been relying on commercially-available machines from companies such as Siemens. In the occasions where the Edison was used, the results presented were found to be radically different from those produced by existing tech on the market. Thus, any results sent out to real patients were all fundamentally incorrect. To add further dismay, former employees also revealed that the culture was filled with secrecy and intimidation. Continuous lies were fed to members of the board, and those who tried to raise concerns were simply ignored or fired by Holmes herself.

At first, these shocking allegations were vehemently denied. However, FDA investigations ensued and declared that the company had been built on nothing but a complete and utter facade. In 2018, Holmes eventually stepped down as CEO and was subsequently charged with criminal fraud and conspiracy. Her trial is expected to take place in March 2021 where she possesses the potential to face up to 20 years in prison.

Theranos is a cautionary tale of what can happen when ‘over-hype’ mentality creeps into areas that require much more regulation than software. Trial and error approaches conducted on human individuals can be particularly harmful in sectors such as medicine. In summary, these events demonstrate the realities of fraud and deception within the science and technology community. They also portray the importance of publishing peer-reviewed studies, and provide a clear testament of what can happen if loopholes in the system are exploited by superficial claims and audacious lies.

From Issue 22: the Dark Side of Science

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