Elizabeth Holmes – a tale of audacity, delusion and deception

In ” The Eye of Apollo”, one of the finest Father Brown stories of GK Chesterton, he describes his victim in the following words: “ She had the eyes of startling brilliancy, but it was the brilliancy of steel rather than of diamonds. She was one of those women whom one always thinks of in profile, as of the clean-cut edge of a weapon. She seemed to cleave her way through life…” Chesterton’s brilliant portrait evokes an image of someone with steely eyes, a stern demeanor, and a lady whose looks were enough to reveal the kernel of her personality. The phenomenal rise and ignominious fall of young Elizabeth Holmes, the former founder, CEO of Theranos, and a billionaire by the age of thirty-one is nothing short of a fairy tale that didn’t end well. Close-up pictures of Elizabeth Holmes in her prime days always remind me of Chesterton’s description.

There was something about Ms. Holmes’s profile: the way her fully open eyes would gaze at the camera as though it were challenging the viewer, her black turtle necks ( from the same store Steve Job’s bought his) that subtly accentuated her neck and brought her face into full relief, her deep ( almost baritone) voice, deliberately cultivated to sound serious and to be taken seriously in a man’s world, the assertive pronouncements about her company’s vision, the implacable confidence she exuded on stage, in conversations and in interviews, the lavish lifestyle to establish her presence among the elite and the rich of the Silicon valley; and above all the audacity of her courage to latch on to a half-baked idea and to continue holding on to it even when facts and counsel were pointing otherwise. In Chesterton’s words, Holmes wished to “cleave through life” with the force of her personality alone, but, unfortunately, a made-up image without substance, integrity, and an ethical compass to be guided by, cannot last long. For Holmes, the dream ended in 2017/18, when a few whistle-blowers revealed the deception behind what Theranos was attempting to do, especially the secrecy Holmes demanded of her people and the lengths she would go to ensure the story she told the world remained intact, no matter what the actual outcomes were. While the vision of Theranos to simplify and quicken the process of testing blood was indeed a laudable idea, it could have saved lives; but the tragedy was that Holmes was unwilling to wait for her idea to be thoroughly tested and proved beyond doubt. She wanted success, money, and power too soon, too quickly. In 2014, at the age of thirty, Elizabeth Holmes was ranked by Forbes as the youngest self-made billionaire and her assets were valued at over nine billion dollars. By 2018, Theranos’s valuation dropped to zero. A pretty steep fall.

Earlier this week, Elizabeth Holmes, now aged thirty-nine, arrived at the Federal prison camp Byran in Texas to start her eleven-year prison sentence at this white collared facility that predominantly hosts people serving sentences for civil and financial crimes. She was given the identification number 24965-111 and will now live with four other inmates in a single cell. Her day will be announced at 6 AM and will end at 10 PM, with two roll calls at 8 AM and 4 PM respectively. During her waking hours, Ms. Holmes will work in the kitchen or be assigned factory jobs that could earn her between 12 cents and 1.15 cents per hour. She has monitored visitation rights, once a week to a maximum of four hours each month, to meet with her young children and her hotelier husband. During these visits, handshakes, hugs, and kisses are allowed only at the beginning and end of each visit. For the next eleven years unless a miracle happens, this is going to be the routine of Holmes, who at one point was hailed as silicon valley’s greatest entrepreneur in the mold of Steve Jobs, and was considered the poster girl for what the valley stood for – innovation, individualism and passion for ideas that can change the world.

In the popular book, “The extraordinary popular delusions and Madness of the Crowds” written nearly two centuries ago, in 1841, the Scottish writer Charles Mackay records many cases of what he calls “moral epidemics” — an irrational attachment to a crazy idea that starts off as a trickle but quickly generates enough momentum, gathering in its course, people from all walks of life, sometimes consuming an entire nation, to act on an idea or scheme, which in the normal course the individuals involved would have never undertaken by themselves. This moral epidemic could be anything from crazy business schemes to medical quackery to superstitious religious beliefs. It doesn’t matter what the idea is, but the snowballing effect it has is undeniable, and for the period of time when the frenzy prevails, nothing can be done to shake the confidence in people’s minds about the venture; until the scam runs its course and the flawed scheme is suddenly revealed for what it is. The Rise and Fall of Theranos is a story that Charles Mackay would have loved to include in his book. That an insane idea, with no medical or scientific backing at all, raked in hundreds of millions of dollars not only from normal investors but from people known for their financial and business acumen, men known for their judicious decision-making – is nothing short of baffling. One can only attribute this to the power of Elizabeth Holme’s confident personality and skills of persuasion.

As a child of affluent parents, brought up in Washington DC, Holmes was a precocious kid and intelligent too. When an aunt casually questioned a young Elizabeth about what she wished to become when she grew older; she responded without hesitation “a Billionaire”. That was the seed right there. Soon after school, she was admitted into an undergraduate chemical engineering course at Stanford. Professor Phyllis Gardner, Professor of Medicine at Stanford remembers Elizabeth as a good student but adamant and opinionated. While in college, the professor remembers Elizabeth discussing the idea of building a device that could run a variety of blood diagnostics with just a spot of blood, and how the professor dismissed the idea as incredulous and scientifically infeasible. But what she vividly recollects about that conversation is the look on Elizabeth’s face when challenged: the smirk, a shadow of arrogance dancing in those deep blue eyes. “There was something about her inability to listen that troubled me”, was Phylis’s cryptic summary about Elizabeth Holmes during that tenure at college. Elizabeth did not finish college. She dropped out after two years of Chemical engineering at Stanford along with a three-month lab internship she did at the genome institute of Singapore at the end of her Freshman year. She considered this enough formal education in a field that takes years to master. It is typical of people with delusionary ambition and impatience that they don’t pause to think of their own preparedness. All they possess is blind courage, without the tempering of patience and counsel. Holmes was supremely confident that she could sell her idea to the world, and she almost did, until it all came crumbling down.

One hopes eleven years will give Ms. Holmes enough time for reflection. She will be in her early fifties if she happens to serve out the full sentence. In cases such as these, appeals and pardons are always on the cards. However, while in prison, the one thing Holmes may regret and most certainly miss is watching her two little kids grow up. There is nothing more valuable for a mother than that. One of the reasons for the delay in her sentencing was that she was pregnant with her second child. There is a mixed opinion among the public and the press about the length of Holmes’s sentencing. Many believe her crime was serious enough for more prison time than just eleven, and that what she had got is a very lenient punishment. That is a legal issue on which I am not willing to comment. For now, Elizabeth is secluded in a secure compound away from the glitter and richness she is used to. It depends on her how she wishes to use this time of solitary self-reflection. There is still life ahead.