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Eight lessons we learnt from this $9bn bogus medical start-up

1 Fake it 'til you make it will carry you a very long way


A student drop-out at 19, by 31 Elizabeth Holmes was the youngest female self-made billionaire in America. In truth her company Theranos, once valued at $9bn, was based on a machine that could identify 200 different diseases (including cancer) with just one drop of blood; but it didn't work. In fact, they faked the blood test results of the American public.
Now Jennifer Lawrence is playing Holmes in a forthcoming Hollywood movie.



Having a super well connected family AND a father called Christian Rasmus Holmes IV opens investors’ wallets

Those myopic to Holmes's lies - which lost investors an estimated $900m - included Rupert Murdoch, 88, who threw $125m her way, Dick DeVos, 63, whose family founded Amway, his wife Besty, 61, who is US Secretary for Education, Henry Kissinger, 95, former Secretary of State George Shultz, 98, plus Tim Draper, 60, who once wrote a book about how to be a start-up hero.  

   
3  Letting cameras onto your business premises is always a bad idea 

Because when it all goes south, that footage will end up as a Netflix/HBO/Amazon Prime documentary. Who would have heard of the Fyre Festival scam if fraudster Bill McFarland hadn't insisted on being constantly filmed? Similarly, a former Theranos employee leaked 75 hours of in-house footage commissioned by Holmes to award-winning director Alex Gibney. Watch the disaster unfold tomorrow The Inventor: Out for Blood in Silicon Valley, 9pm, Sky Atlantic. If you're reading from the USA it's on HBO rewind.


4 Bedazzled wealthy investors and multi-national corporations are often woefully negligent when it comes to due diligence  

 In their rush to get onboard the Next Big Thing, not a single Silicon Valley investor got Holmes's magic "Edison" machine independently tested. She brokered a $140m deal with US pharmacy giant Walgreens and as Gibney said recently: "You would have thought that Walgreens would have said, 'You know, we really want to look inside the box that we're eventually going to put in every one of our drug stores.' No-one looked inside the box.
Or thought outside of it.



5  Making your lover your COO is a no-no 
 
    
Ramesh “Sunny” Balwani was a software developer and Holmes's secret boyfriend when she simply handed him the job of COO at Theranos in 2009. Almost 20 years older, he was beguiled by her 'genius' and threatened the workforce with NDAs to manage her unworkable invention. In 2016 when the US Securities and Exchange Commission came knocking, she quickly threw him under the bus.


6 If you employ people as privileged and plucky as you are - they'll likely become the whistleblowers 

 
Holmes's lies came unstuck when Tyler Shultz - George Shultz's grandson and a Theranos engineer - collaborated with the Wall Street Journal's John Carreyrou, to reveal the truth, which eventually led to last year's bestseller, Bad Blood. The day Tyler quit in 2014, Holmes contacted Shultz Snr and told him if his grandson did anything to threaten the startup he would 'lose'. Her lawyers were even more heavy-handed. Weirdly Shultz disbelieved his grandson's version until very recently.




7 Money and delusion protects you from (almost) everything 

The woman who wrecked so many people's lives is now living in a luxury apartment in San Francisco with her new fiance. “Elizabeth sees herself as the victim,” a former executive told Vanity Fair. She blames the journalist John Carreyrou and is apparently seeking funds for a new venture. She's also staring down the barrel of a 20 year prison sentence following fraud charges and is due to appear in court next month. 

 


8  Big Tech srsly needs some unimpeachable female role models 

The youngest female self-made billionaire just happened to be a fraud, but let's not let what happened to Elizabeth Holmes hold back female founders. It would help if Facebook's Sheryl Sandberg upped her game. Katrina Lake, CEO of Stitch Fix and the only female founder to IPO in 2017, is one to watch. Why can't Silicon Valley have more     Jacinda Arderns, the New Zealand Prime Minister who recently showed what female professionalism truly looks like.

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