Elizabeth Holmes has been thrust into the spotlight as the scapegoat for all that is wrong with Silicon Valley. But I find the media coverage around the Theranos drama to be utterly bullshit.
The hype and hyperbole around The Wall Street Journal’s claims are completely out of proportion, and proof that startups are no longer considered the scrappy underdogs of society, but “elitists” who are easy targets for the media.
When Holmes was 19, she dropped out of Stanford to revolutionize the way blood tests were done.
She called her company Theranos. In just a few years, Holmes raised $400 million at a $10 billion valuation. For the most part, Holmes has purposely tried to keep Theranos out of the public eye, which naturally made outsiders curious.
Since starting out, Holmes has been a media darling. She’s been called the next Steve Jobs and has been hailed as a role model for female founders.
However, all this changed last week when The Wall Street Journal accused Theranos of having technology that is a sham, purposely lying to consumers, and having a business that’s a house of cards that’ll soon collapse.
If there’s one takeaway from this, it’s that a great story, regardless of the facts, can make or break you.
Let me explain.
The power of the story
You see, in Silicon Valley, a company’s story is equally, if not more important than the products they create and the problems they solve.
As founders, we’re trained from day one by the startup ecosystem that we must have a powerful message. A founder and company’s story is everything.
Before a prototype is built or customers acquired, we rely on help from investors to turn our idea into real life. That means perfecting the pitch. It has to be good enough to convince an investor in just 3 minutes.
And even after raising funding, a founder needs a strong story to recruit the best talent, get media attention, and convince customers to buy their product.
So how do we do this? Well for part is figure out the story. I personally was able to raise money with compelling a story and a small amount of traction. I’m under thirty, have no tech background and want to create something massive.
And I’ve seen how a proper story grabs attention like a bare fist snatching a speeding baseball out of the air.
That’s why the “Uber for car washes” can raise over $5 million and “the Airbnb for office space” can rake in $27 million from an all-star investor lineup. It’s why a 21 year old asshat can convince Richard Branson to give him $25m without any product or prototype whatsoever. Those seemingly terrible and meaningless companies can do what they do because the founders, more than anything, learned how to tell a compelling story.
Look at Holmes’ story. According to The New Yorker, it goes like this:
In 2001, in her senior year, Holmes applied to Stanford, was accepted, and then was named a President’s Scholar, which came with a small stipend to select her own research project.
One day, in her freshman year, Robertson (her professor) said, she came to his office to ask if she could work in his lab with the Ph.D. students. He hesitated, but she persisted and he gave in.
Then, after her freshman year, this happened:
She went to see Robertson in his office and announced that she wanted to start a company. Robertson was impressed by the idea but urged her to at least consider finishing her degree first.
“Why?” she responded. “I know what I want to do.”
The founding story of Theranos is as perfect as can be. A young, powerful female bucks the status quo, follows her dream, and sets out change the world. Silicon Valley’s wisest and most powerful investors give her a chance and soon thereafter the young founder’s crazy idea is a thriving company with thousands of employees. Somewhere in there is an awful, yet sexy as hell Aaron Sorkin script.
It was because of that story that Holmes (until last week) was a media darling. She was regularly featured in The New York Times, Fortune, and Inc. The Wall Street Journal even said that she was ushering in a new era of preventative healthcare.
And it was with that same story that Holmes raised over $400 million from the most powerful investors in the Valley — with little experience.
So what changed over the last week?
Why is Holmes the new face of all that is wrong with Silicon Valley: elitism, outrageous valuations, excess, deception, lack of transparency, and incompetence?
Because this is how the story had to go.
The shift in the narrative
Just a few months ago, the same publications that loved Theranos are now trying to bring her down. Outlets that called Holmes “the next Steve Jobs” are now claiming that she’s the face of deceit and excess.
You only have to read a few Gawker, BuzzFeed, or Re/code articles to see that startups are no longer the underdogs. They are the ones with the power. The nerds are now in charge.
We’re the new establishment. And that’s why the story has changed.
Holmes and Theranos are no longer famous for showing what a young woman with a dream can do. They’re now infamous: an example of the havoc that a manipulative, yuppie, white privileged woman can wreak.
This story is far more interesting than one about Holmes and Theranos succeeding. An article on an elitist with everything to lose actually losing it all is far more clickable than one where Holmes succeeds. It’s too easy!
A minor PR hiccup
It’s expected that a young company that’s attempting to change a massive and archaic industry will mess up. It appears that Theranos made a bunch of mistakes. And I’m not defending their actions. I’m also not saying that the media shouldn’t point out the truths about Theranos’ mistakes.
However, the way the tech media has switched from hoisting Holmes onto a pedestal to crucifying her as an example of all that is wrong with startups is complete and utter bullshit. Of course, this cycle of love to hate isn’t anything new. The transition from beloved disrupter to villain is expected for anyone who hopes to be a success. But to for the media charge, convicted, and sentence in a matter of weeks, after months and years of touting Holmes as a savior, is absolute nonsense and unfair.
Thankfully for Theranos, in a few weeks this incident will look like nothing more than a minor setback. We’ll compare it to the time an Airbnb room was used for an orgy, or when Caitlyn Jenner killed a 69-year-old in a car accident — but was still on Vanity Fair’s cover a few weeks later. It’ll be old news.
Theranos won’t go bankrupt, their investors are still going to get rich, and Holmes will still be on the cover of tech magazines. In fact, in the next few years Theranos will only become stronger.
Elizabeth Holmes, like Airbnb, Jenner, and the other branding juggernauts, has a story that is too damn good not to love.
As the CEO of a small startup, I applaud and admire Holmes for everything that she has accomplished. Mistakes will be made, and I forgive her for that, but I can’t say the same for the journalists who, after years of favorable infatuation, have already deemed her and the rest of Silicon Valley guilty before she’s pleaded her case.