Years ago, in 2003, a 19-year-old wunderkind burst on the scene in the unreality of Silicon Valley. With minimal academic credentials, and a reportedly infectious personality, she attracted believers to a fantastic cause. She had dropped out of Stanford University, and her name was Elizabeth Holmes, and she promised relief in the form of miracle. Salespeople peddling miracles is nothing novel or surprising, but this one had a potentially striking magnitude. And, perhaps there are none among us that have not been at least a little tempted to replace our boat bottom with a screen door just so we can experience such a miracle, "as seen on TV."
This miracle, however, was about testing blood. Around the world, people present for their periodic blood draws, and are relieved of tube after tube of this precious fluid. For a raft of conditions, blood draws become a periodic habit. In the United States alone, over 120,000 people make their living as phlebotomists (drawing blood). Not all tests are blood tests, but Medicare spent $4.6 billion on lab tests in 2019. It is fair to say that testing employs many people and presents significant expense.
Not so long ago, in the 1960s, the management of diabetes was far more complicated, and therefore unsuccessful, compared to today. According to the American History Museum, monitoring glucose used to involve boiling urine, then reactive tablets. In the 1970s, the micro processor came to bear on that illness, and the glucose monitor evolved into commonality. Those diagnosed with the malady came slowly accustomed to pricking a finger, drawing a drop of blood, applying it to a test trip and monitoring their glucose. I recall that evolution, and its description is “miraculous.“
And, if that development was not enough to illustrate the way science leaps, there are now many glucose monitors that help the diabetic manage without even the pin prick for blood, as described by Healthline recently. How far from the Star Trek medicine predictions can we be? We see it as science fiction, and persistently science and technology deliver progress to our front door.
The promise of Theranos was no less potentially impactful. The wunderkind promised simple blood testing with a similar pin prick of blood. The machine was about the size of a small laser printer; convenient, unobtrusive, and fully automated. In a word, “miraculous.“ So miraculous, indeed, that the company "attracted hundreds of millions of dollars in investments," according to the British Broadcast Corporation (BBC), and soon became worth billions of dollars, according to Business Insider. It attracted investors from amongst the intellectual elite of America. The company made deals for pharmacy-based testing machine trials with healthcare icons. The company grew, and reported innovation after evolution.
The wunderkind "became the world's youngest self-made billionaire through her years-long pitch of Theranos," according to WNYC Radio. It was several years later, in 2015 that the Wall Street Journal began to ask questions for which there were not adequate answers. The publicity "spurred federal regulators to launch probes of the company." The billionaire who had soared too close to the sun came back to earth as the legendary Icarus of old. And, in the end, this promising, innovating, miracle turned out to be a disappointment at best. Some have used more stern adjectives.
This week wunderkind Holmes is on trial. She was in the dock in San Jose as lawyers deliver opening statements. She stands accused of fraud and manipulation. Gone are the private jets, the a A-list investors, and the trademark turtleneck sweater (a la Steve Jobs). This week in San Jose, a young woman stands accused of misleading and misdirecting. She is accused, according to the BBC of engaging in a "fake it until you make it" practice that some attribute to Silicon Valley in a broad and general sense. She claims in defense that she was a pawn manipulated by a co-defendant. The two were in a relationship, and salaciousness may provide distraction during this prosecution. Her former lover will be reportedly be tried for his involvments at a later date.
I thought of this recently as I stared out across Germany's Mosel River one morning, and spoke with “Benjamin“ across an app on my cell phone (I suspect that was not his real name). Benjamin was observing me inserting a probe into each nostril and slowly rotating around my nasal cavity. Having done so, he watched me place the probe into a pre-prepared re-agent, and pour the liquid into a device about the size of a USB flash drive. That device was communicating with my cell phone, and a second app, by blue tooth. That amazing little device determined that I was negative for the Covid-19 virus in about 15 minutes. That determination was a critical precondition of my government to gain readmission to my country, see Pandemic Regulation a World Away.
Recall when there were lines for COVID tests? Cars would line up like veritable parades in 2020. An excellent picture was published by CNN last year, wait times were sometimes hours. That CNN article said that around Thanksgiving 2020 the results might take "more than two days." I got mine on the Mosel river, a world away, on my Iphone, in 15 minutes. That, is, miraculous. Imagine when someone proposed and hyped the idea for that little flashdrive-sized device, the kit, and those apps. How miraculous and perhaps far-out that must have sounded. Did it sound too good to be true?
We will see how the Holmes trial progresses. Most recently, ironically, there was some delay due to concerns of COVID in the proceedings, as reported by NBC News. The trial is expected to last months, and could result in a twenty-year prison sentence, though CNBC suggests that she might serve less. One study reportedly supports "dramatic unexplained gender gaps in federal criminal cases." One reported notes that trial was delayed unexpectedly due to Ms. Holmes pregnancy and the birth of a child in July. Some posit that prison sentences for mothers are perhaps less stringent than for others.
How the trial ends will be interesting. The disparity asserted in sentencing regarding men and women is interesting. But more interesting than any of this is the "fake it 'til you make it" allegation regarding Silicon Valley. Can investors blindly follow the intellectual elite, believing that investing must be safe because those really smart folks must have vetted such a wunderkind? Can investors demand to see results, peer reviews, and "behind the curtain," without such a start-up revealing too much and faltering as competition leverages its innovation?
There are lessons in the 19 year-old Stanford drop out. Lessons for business, for lawyers, for investors, and more. When the tech is truly innovative, revolutionary, and beneficial there is so much to be gained, so many lives to be improved. And, when it is false, there is so much disappointment and ruin; enough to go around. Is technology on trial? Is Silicon Valley? Or is it just the wunderkind?
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