HBO tells only part of the history of Inventor Elizabeth Holmes

Theranos was founded on the promise that Elizabeth Holmes, a 19-year-old Stamford charismatic girl, had developed a revolutionary technology capable of performing important diagnostic tests using one or two drops. of blood.

Regardless of the outcome of the planned three-month trial to begin in San Jose federal court scheduled to begin in August, it may never be possible to fully account for the destructive power of a police officer. good story well told. The attitudes that have allowed Theranos and Holmes to operate undetected and investors to be mistaken for more than half a billion dollars do not seem to have changed.

A documentary released by HBO earlier this year, "The Inventor: Out for Blood, Silicon Valley," features an extraordinary story: an engineering student sets up a unique diagnostic company; attracts the best advisors; amass $ 700 million over several years. The valuation of the company amounts to 9 billion dollars. Holmes' net worth is $ 4.5 billion. She is on the cover of Forbes and Fortune, one of the most successful business women in history.

The film is effective in probing the boundary between innovative ideas and the reality of business, between style and substance – memes to which the bright and the privileged have become particularly vulnerable. The story of Theranos resonates in Silicon Valley and Wall Street, where everything seems possible, and casts a shadow over intellectual property rights such as patents, which may seem more convincing on paper than in practice.

Two hundred patents

Holmes, founder and principal inventor of Theranos, is associated with more than 200 patents, some of which are still issued in 2019. She perpetrated one of the most heinous frauds of the 21st century – which could prove to be the case. to be his most durable "invention".

How do 200 patents translate into a big lie?

The director of "The Inventor", Alex Gibney, invokes Thomas A. Edison, "who has often promised more than he could offer." Gibney suggests that Edison was the most important inventor, if not the first, to have accepted an old idea: "until you do it".

Edison and Nikola Tesla, two of the greatest inventors, were known to have presented some of their work as products while they were still being developed. Edison and Tesla have not been the first to innovate, and will not be the last. For Holmes and Theranos, patents framed in the lobby and marketing hype aside, they needed a lot more diagnostic technology than fixing some problems. Theranos named his camera "Edison".

The list of experienced investors and advisers who were unaware of Edison's lack of effectiveness included David Boies, the well-known litigator; Richard Kovacevich, the former CEO of Wells Fargo; two former US Secretaries of State, Henry Kissinger and George Shultz; and Secretary of Defense James Mattis, who helped recruit investors. The list of Theranos investors reads as a former student of Stanford University and distinguished veterans. Among them were Tim Draper and Larry Ellison, veterans of Silicon Valley, and media mogul Rupert Murdoch.

A story of warning

What can we learn from Holmes' deception? Did she simply act as an avid charlatan or did she believe that with sufficient time and money the promise of Theranos' diagnosis would come to fruition and that no one would worry about it? would care if some early liberties were taken? Or was Holmes simply caught up in the mythology of Silicon Valley's ruling elite, unable (or reluctant) to extricate himself?

Holmes faces nine counts of mail fraud and two counts of conspiracy to commit an electronic fraud. Each leader has a maximum of 20 years in prison. It would be bad enough if the disappointment involved a new method of buying laundry detergent or finding a date for Saturday night; it is much worse when critical medical information is provided for the disease.

There is no doubt that there is a degree of excellence in invention and investment. Edison and Tesla certainly knew it. The same goes for Steve Jobs and Elon Musk. The simple fact of drinking Kool-Aid, on the other hand, did not save anyone in Jonestown; it's not much better in Palo Alto.

The invention is often more the art of science, especially at the beginning, when the objectives are still evolving and it may be necessary to refine the focus. It is not unusual to know where a new idea might lead or what form it can possibly take, but falsifying results is a zero sum game. In a competitive context, in spite of the pressure exerted, it can be difficult to distinguish the facts from the fiction, and even less the truth from the false. In the movie, even award-winning journalists love The New Yorker Ken Auletta and The wealth Roger Parloff reluctantly admits to having succumbed to the apparent success of Theranos.

Inventors need confidence to believe but must avoid temerity to lie. In doing so, they can sometimes deceive themselves and deceive others about the pace or level of progress. They must be aware of crossing the dividing line between the extensible fact and the credible fiction.

Gibney's revealing film is important on many levels. However, the suggestion made by many innovative companies and professional inventors (such as Edison) to "pretend to do so" so far is inaccurate and disrespectful. Vaporware is the term used in the 1980s to refer to software sold with the promise of solving a problem for which no solution has yet been identified. He has been, and still is, promoted on the belief that the brightest minds can understand just about anything with sufficient time and money. Well, at least from time to time.

Who are we?

What does Theranos tell us about ourselves and the current environment for ideas and business? Was Holmes simply the consummate liar who understood the conditions necessary for deception?

Or did the employees associated with Theranos, including the employees, actually cause disaster by thinking that partial truths could become complete truths and that they might no longer be lies? It remains to be seen how much they were in the dark.

People like to be part of something big; to believe that they think differently or that the first followers of the next big thing. Holmes was the perfect icon for their affection – a rather mysterious young woman, dressed in black turtlenecks (like Jobs), who literally never seemed to blink, and projected a cheesy self-confidence. The attraction of promoting good science while generating a huge return on investment can be irresistible.

"The inventor: the search for blood in Silicon Valley" is a troubling story, worthy of a novel or a fiction film. In the end, he will say as much about ourselves and the current discovery period as about Holmes and his motivation.

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Bruce Berman

is director of Brody Berman Associates, a management consulting and strategic communications company founded in 1988. He has accompanied more than 200 IP portfolios, executives and businesses, including law firms and their clients. Bruce is responsible for five books, including From ideas to assets and The intangible investor and the intangible investor. He also writes the column The Intangible Investor, which appears in the magazine IAM. His weekly trend publications are available on IP CloseUp. In 2016, Bruce founded the Center for Intellectual Property Understanding, an independent, non-profit organization focused on intellectual property education and education.