Elizabeth Holmes started Theranos at age 19 and became the world’s youngest female billionaire. But 15 years later, she was charged with massive fraud.
These days, blood-testing startup Theranos is on its last legs.
But in 2014, the billion-dollar company and its CEO, Elizabeth Holmes, were on top of the world. Back then, Theranos was a revolutionary idea thought up by a woman hailed as a genius who styled herself as a female Steve Jobs. Holmes was the world’s youngest female self-made billionaire, and Theranos was one Silicon Valley’s unicorn startups.
Then it all came crashing down.
The shortcomings and inaccuracies of Theranos’s technology were exposed, along with the role Holmes played in covering it all up. Theranos and Holmes were charged with massive fraud, and the company was forced to close its labs and testing centers.
This is how Holmes went from precocious child to ambitious Stanford dropout to embattled startup CEO.
Elizabeth Holmes was born on February 3, 1984 in Washington, D.C. Her mom, Noel, was a Congressional committee staffer, and her dad, Christian Holmes, worked for Enron before moving to government agencies like USAID.
Source: Elizabeth Holmes/Twitter, CNN, Vanity Fair
Holmes’ family moved when she was young, from Washington, D.C. to Houston.
Source: Fortune
When she was 7, Holmes tried to invent her own time machine, filling up an entire notebook with detailed engineering drawings.
At the age of 9, Holmes told relatives she wanted to be a billionaire when she grew up. Her relatives described her as saying it with the “utmost seriousness and determination.” That same year, Holmes wrote a letter to her father: “What I really want out of life is to discover something new, something that mankind didn’t know was possible to do.” Source: CBS News, Bad Blood: Secrets and Lies in a Silicon Valley Startup
Holmes had an “intense competitive streak” from a young age. She often played Monopoly with her younger brother and cousin, and she would insist on playing until the end, collecting the houses and hotels until she won.
If Holmes was losing, she would often storm off. More than one, she ran directly through a screen on the door. Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
It was during high school that Holmes developed her work ethic, often staying up late to study. She quickly became a straight-A student, and even started her own business: she sold C++ compilers, a type of software that translates computer code, to Chinese schools.
Source: Fortune, Bad Blood: Secrets and Lies in a Silicon Valley Startup
Holmes started taking Mandarin lessons, and part-way through high school, talked her way into being accepted by Stanford University’s summer program, which culminated in a trip to Beijing.
Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
Inspired by her great-great-grandfather Christian Holmes, a surgeon, Holmes decided she wanted to go into medicine. But she discovered early on that she was terrified of needles. Later, she said this influenced her to start Theranos.
Source: San Francisco Business Times
Holmes went to Stanford to study chemical engineering. When she was a freshman, she became a “president’s scholar,” an honor which came with a $3,000 stipend to go toward a research project.
Source: Fortune
Holmes spent the summer after her freshman year interning at the Genome Institute in Singapore. She got the job partly because she spoke Mandarin.
Source: Fortune
As a sophomore, Holmes went to one of her professors, Channing Robertson, and said: “Let’s start a company.” With his blessing, she founded Real-Time Cures, later changing the company’s name to Theranos.
Thanks to a typo, early employees’ paychecks actually said “Real-Time Curses.” Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
Holmes soon filed a patent application for “Medical device for analyte monitoring and drug delivery,” a wearable device that would administer medication, monitor patients’ blood, and adjust the dosage as needed.
Source: Fortune, US Patent Office
By the next semester, Holmes had dropped out of Stanford altogether, working on Theranos in the basement of a college house.
Source: Wall Street Journal
Theranos’s business model was based around the idea that it ran blood tests using proprietary technology that required only pinprick in your finger and a small amount of blood. Holmes said the tests would be able to detect medical conditions like cancer and high cholesterol.
Source: Wall Street Journal
Holmes started raising venture capital money for Theranos from prominent investors like Oracle founder Larry Ellison and Tim Draper, the father of a childhood friend and the founder of prominent VC firm Draper Fisher Jurvetson. To date, Theranos has raised more than $700 million.
Source: SEC, Crunchbase
Holmes took investors’ money on the condition that she wouldn’t have to reveal how Theranos’ technology worked. Plus, she would have final say over everything having to do with the company.
Source: Vanity Fair
That obsession with secrecy extended to every aspect of Theranos. For the first decade Holmes spent building her company, Theranos operated in stealth mode. She even took three former Theranos employees to court, claiming they had misused Theranos trade secrets.
Source: San Francisco Business Times
Holmes’ attitude toward secrecy was borrowed from a Silicon Valley hero of hers: Steve Jobs. Holmes started wearing black turtlenecks like Jobs, decorated her office with his favorite furniture, and like Jobs, never took vacations.
Source: Vanity Fair
Even Holmes’s uncharacteristically deep voice may have been part of a carefully crafted image intended to help her fit in in the male-dominated business world.
Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
Holmes was a demanding boss, and wanted her employees to work as hard as she did. She had her assistants track when employees arrived and left each day. To encourage people to work longer hours, she started having dinner catered around 8 PM each night.
Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
Shortly after Holmes dropped out of Stanford at age 19, she had been dating Theranos president and COO Sunny Balwani, who was 20 years her senior.
Holmes first met Balwani during her third year at Stanford’s summer Mandarin program, the summer before she went to college. She was bullied by some of the other students, and Balwani had come to her aid. Balwani became Holmes’ No. 2 at Theranos despite having little experience. He was said to be a bully, and often tracked his employees’ wherabouts. Holmes and Balwani broke up in spring 2016 when Holmes pushed him out of the company. Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
In 2008, the Theranos board decided to remove Holmes as CEO in favor of someone more experienced. But over the course of a two-hour meeting, Holmes convinced them to let her keep her company.
Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
As Theranos started to rake in millions of funding, Holmes became the subject of media attention and acclaim in the tech world. She graced the covers of Fortune and Forbes, gave a TED Talk, and spoke on panels with Bill Clinton and Alibaba’s Jack Ma.
Source: Vanity Fair
Theranos quickly began securing outside partnerships. Capital Blue Cross and Cleveland Clinic signed on to offer Theranos tests to their patients, and Walgreens made a deal to open Theranos testing centers. Theranos also formed a secret partnership with Safeway worth $350 million.
Source: Wired, Business Insider
In 2011, Holmes hired her younger brother, Christian, to work at Theranos. Christian Holmes didn’t have a medical or science background — he’d worked as an analyst in Washington, DC, after graduating from Duke University.
Christian Holmes spent his early days at Theranos reading about sports online and recruiting his Duke fraternity brother to join the company. People called Holmes and his crew the “Frat Pack” and “Therabros.” Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
At one point, Holmes was the world’s youngest self-made female billionaire with a net-worth of around $4.5 billion.
Source: Forbes
Holmes was obsessed with security at Theranos. She asked anyone who visited the company’s headquarters to sign non-disclosure agreenments before being allowed in the building, and had security guards escort visitors everywhere, even to the bathroom.
Holmes hired bodyguards to drive her around in a black Audi sedan. Her nickname was “Eagle One.” The windows in her office had bulletproof glass. Source: Bad Blood: Secrets and Lies in a Silicon Valley Startup
Around the same time, questions were being raised about Theranos’s technology. Ian Gibbons — chief scientist at Theranos and one of the company’s first hires — warned Holmes that the tests weren’t ready for the public to take, and that there were inaccuracies in the technology. Outside scientists began voicing their concerns about Theranos, too.
Source: Vanity Fair, Business Insider
By August 2015, the FDA began investigating Theranos, and regulators from the government body that oversees laboratories found “major inaccuracies” in the testing Theranos was doing on patients.
Source: Vanity Fair
By October 2015, Wall Street Journal reporter John Carreyrou published his investigation into Theranos’s struggles with its technology. Carreyrou’s reporting sparked the beginning of the company’s downward spiral.
Source: Wall Street Journal
Carreyrou found that Theranos’ blood-testing machine, named Edison, couldn’t give accurate results, so Theranos was running its samples through the same machines used by traditional blood-testing companies.
Source: Wall Street Journal
Holmes appeared on CNBC’s “Mad Money” to defend herself and her company. “This is what happens when you work to change things, and first they think you’re crazy, then they fight you, and then all of a sudden you change the world,” Holmes said.
Source: CNBC
By 2016, the FDA, Centers for Medicare & Medicaid Services, and SEC were all looking into Theranos.
Source: Wall Street Journal, Wired
In July 2016, Holmes was banned from the lab-testing industry for two years. By October, Theranos had shut down lab operations and wellness centers.
Source: Business Insider
In March 2018, Theranos, Holmes, and Balwani were charged with “massive fraud” by the SEC. Holmes agreed to give up financial and voting control of the company, pay a $500,000 fine, and return 18.9 million shares of Theranos stock. She also isn’t allowed to be the director or officer of a publicly traded company for 10 years.
Source: Business Insider
Despite the charges, Holmes has been allowed to stay on as CEO of Theranos, as it’s a private company, not public. But the company is hanging on by a thread, and Holmes has written to investors asking for more money to save Theranos. “In light of where we are, this is no easy ask,” Holmes wrote.
Source: Business InsiderMaya Kosoff contributed to an earlier version of this story.
Tech: The rise and fall of Elizabeth Holmes, who started Theranos when she was 19 and became the world’s youngest female billionaire before it all came crashing down
