My favorite company is a terrible one; it can’t drive a profit, its product doesn’t work, its founder is legally bound from leading a publicly-held company for ten years, and its reputation might be damaged beyond repair.
A company that I’m completely fixated on is in ruins, embers still smoldering.
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Theranos — the idea of it, the reason why it exists — is incredible and could have a lasting influence in medical technology. If you’re unfamiliar with Theranos, it’s a company created to revolutionize medical technology by shrinking and mobilizing blood-testing stations that are highly accurate, reliable, and supposedly painless. Too bad it’s really none of those things.
Theranos was founded in 2003 by Elizabeth Holmes, a young and intelligent Stanford dropout with vision and drive that is rare, even in Silicon Valley — unfortunately, these characteristics lead to Theranos becoming a dumpster fire with the Feds waiting around the corner.
As CEO of Theranos, Holmes’ determination to see her dream become reality lead to her misleading investors and the public. She lied about the company’s operations and failed to mention that the blood-testing systems weren’t working.
Holmes prevented departments from communicating with each other, which is a result of her desire for complete control over Theranos’ operations. Communication between departments would allow the problems with the machines to be resolved, for the tests to become reliable and produce, you know, actual results, which would then calm investors, but an unhealthy relationship with secrecy was valued above all.
Steve Jobs, like many CEOs, valued secrecy, but that was really an effort to prevent leaks and anything important from getting out; communication within Apple was very much alive.
Jobs had a tight grip on his company and wanted all the credit, but enabled his employees to flourish together; Holmes had a stranglehold on Theranos, squeezing the life out of it, yet expecting it to breathe.
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As an iconic Silicon Valley CEO, Jobs had a profound impact on Holmes’ impressionable managing style — she even took on his black turtleneck swag and started riding around with no plates, just like Jobs (to do that Jobs would lease cars — usually Mercedes coupes — and get a new one every six months, avoiding license plate requirements).
While Jobs is certainly an inspiring figure, he’s by no means a model CEO. Unfortunately, Theranos is seen as the Apple of the medical world, with the goal of revolutionizing technology just like Apple did.
Can’t blame Holmes for looking at Jobs for guidance.
Holmes wanted Theranos’ systems to become the “iPod of healthcare”, which is a fantastic goal to have, but she took that ambition a bit too far by trying to make the devices minimalistic like Apple products. Theranos was bleeding money and could not afford to focus on simplifying its product; this increased production costs as it is not easy to shrink a sterilized blood-testing lab down to the size of a large toaster. While Apple could afford to play around with product design, a young and money-hungry public firm like Theranos needed to focus all of its effort on making something that was profitable and actually worked.
Holmes read Walter Isaacson’s biography of Jobs, and so have I. It’s a great read, and Isaacson is a wonderful writer. Turns out Steve Jobs was a bit of an asshole; he would hear your idea in a meeting, completely shit on both it and you in front of everyone, and then half an hour later say what you said and run with it with haunting enthusiasm as if his tirade thirty minutes prior never happened.
That’s not the best manual for a young CEO, but Holmes soaked it up; she saw herself as an untouchable star of Silicon Valley despite providing pretty much nothing of value. Theranos raised over $700 million from investors simply because of her brilliance and the idea of the company; they were told that the machines worked and that the results were reliable, but neither of these was true.
The story behind Theranos, the idea that it was a company intent on helping people and creating a better, healthier world is instantly captivating. Unfortunately, Holmes fell victim to her own pitch, just as investors had been.
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Jobs was ousted from Apple and ultimately came back to save it. Elizabeth Holmes, if she’s really about her Steve Jobs shit, would do the same and make Theranos the company it should have been.
Too bad it’s going to take ten years.