With £10bn and a pretty face, fraudster Elizabeth Holmes blinded some of the most respected journalists in the industry
It’s a quintessential Silicon Valley story. A smart, attractive 19-year-old American woman who has taught herself Mandarin while in high school is studying chemical engineering at Stanford, where she is a president’s scholar. Her name is Elizabeth Holmes. In her first year as an undergraduate she persuades her professor to allow her to attend the seminars he runs with his PhD students. Then one day she drops into his office to tell him that she’s dropping out of college because she has a “big idea” and wants to found a company that will revolutionise a huge part of the healthcare system – the market for blood testing services. Her company will be called Theranos.
Holmes’s big idea was for a way to perform multiple tests at once on a tiny drop of blood, and to deliver the results wirelessly to doctors. So she set about pitching to investors. Her story was straight out of the Silicon Valley playbook: blood testing is a $75bn (£64m) market, which is certain to keep growing as medical science advances and is dominated by a few big, dozy companies. As such, it’s ripe for disruption – that key SV word. A standard blood test costs $50, but Theranos will be able to do it for $2.90, and because the dozy incumbents buy their testing kit from other companies such as Siemens and Roche Diagnostics, it has to be approved by the Food and Drugs Administration (FDA). But Theranos will make its own “lab-on-a-chip” testing machine and so, via a strange legal loophole, will be exempt. And – best of all – Theranos will just require a tiny pinprick’s-worth of blood: none of that nasty business of sticking a needle into a vein.