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Theranos founder Elizabeth Holmes succeeded because of toxic millennial 'fake it til you make it' culture

She put on a black turtleneck and arranged a bunch of power lunches with fellow CEOs — and investors failed to ask for basic documents like audited financial statements. There's a psychological reason why they fell for it

Betsy Cardenas
Friday 22 March 2019 18:51 GMT
The Inventor: Out for Blood in Silicon Valley - trailer

HBO’s documentary The Inventor: Out for Blood in Silicon Valley is an expose about Theranos, the blood-testing company founded by millennial media darling Elizabeth Holmes at age 19. However, underneath that is a story of what happens when personal branding and the ethos of “fake it till you make it” go too far.

To recap: Holmes claimed she had invented a way to revolutionise phlebotomy and make testing for diseases regularly possible. At the center of her vision was a machine called The Edison that, according to her, would eventually be available for purchase by individual consumers who could take control of their health by conducting their own blood tests.

There was only one problem with this. The machine never really worked, and the technology Holmes claimed to have invented didn’t technically exist. But that didn’t stop her from raising millions of dollars from investors, gracing the cover of countless magazines, and generating the support of a lot of powerful men.

According to Holmes, she was on the verge of a breakthrough when the investigations began.

John Carreyrou, the author of Bad Blood, a book chronicling the rise and fall of Theranos, noted in an interview at Stanford that “the valley is replete with mantras like ‘fake it until you make it’ and ‘fail fast.’ …Holmes’ grave error was to channel this culture”.

Holmes crossed the line between “fake till you make it” and lying early in her career. We might never know when she started to believe her own lies.

Personality and the cultivation of mythology around oneself are powerful tools. In the HBO documentary about Holmes, behavioral economist Dan Ariely explains, "Stories have emotions that data doesn't, and emotions get people to do all kinds of things, good and bad”.

Part of the reason why we can’t stop reading about Holmes is that we might see parts of ourselves in her.

Googling the phrase, “Fake It Till You Make it” generates 238,000,000 search results and the phrase "personal branding" generates 260,000,000 search results. Now, we could blame late capitalism, our baby boomer parents who seemed to reach milestones much faster than our generation, or even our other favorite culprit, the Kardashians, for this climate — but the simple fact is that we are at a point in our culture where looking like we made it has replaced actually making it.

Kylie Jenner was recently on the cover of Forbes for being a “self-made” billionaire, a title that Holmes once held too. Yet we all know that Kyle isn’t fully self-made and that her empire began with a lip kit she marketed with plump lips achieved while wearing lip fillers. This claim was denied at first, only to be turned into fodder for her family’s reality show later on. But it hasn’t stopped the sales or popularity of her products.

Kylie Jenner’s work is to be Kylie Jenner, and business success follows. She harnesses this reality extremely well. In Holmes' case, she claimed she was saving lives and revolutionizing healthcare while failing to follow those claims up with very much. Her efforts to maintain the facade took over the actual work she was trying to accomplish.

Holmes leveraged a personal story about a dead relative to describe her “why” —which every branding expert will tell you is a great way to gain supporters for your venture. She also cultivated an attire (in pretty much every public photograph of her, she’s wearing a black turtleneck) and mystique that resembled Steve Jobs, another revered creature of American “self-made” mythology. She talked about not having a life outside of the office and “living” for her work.

Shockingly, investors seemed to be so swept away by the prospect of investing in the next Steve Jobs that they failed to ask for basic documents like audited financial statements. What Holmes did was dangerous, and we could argue even sociopathic, but our collective willingness to buy into these stories without asking questions says something about our culture too.

Earlier this year, we were fascinated with Fyre Festival founder Billy McFarlane, who leveraged social media to create an unprecedented level of hype for a poorly planned music festival without any regard for the people he was impacting or, ultimately, the reality of the situation. But the philosophy of "act first and ask permission later” is rampant in start-ups in every sector. Most of the time when they do it, we smile and call it “disruption.”

Millions of dollars are thrown at (mostly white, male) founders, some who are still in their 20’s, who are able to build hype around their ideas often without proper regard for their implementation. From the beginning, Uber has been plagued with lawsuits all over the world, while Airbnb has faced increased scrutiny for its impact on the housing market in places like San Francisco and Los Angeles. The founder of Dropbox admitted to seeking investors when the technology hadn’t actually been developed.

During her time in the spotlight, Holmes was busy doing what I call performative CEO work: appearing on panels, talking about the hustle, and grabbing power lunches with fellow CEO’s as well as, in her case, presidents and secretaries of labor.

Paul Saffo, a longtime technology consultant, told the New York Times: “This is someone who is so deeply self-deluded by her optimism and faith in herself [that the] delusion is contagious.”

Fake it till you make it” is a helpful adage for women like me who are often the only women of color in a room or are the first in their families to attend college and enter the white-collar working world. It can be a powerful antidote to “impostor syndrome”, though it can also be too much of a liberating strategy when applied to the wrong people. A friend and I recently joked that perhaps impostor syndrome isn’t so bad after all, as it will prevent us from believing we’re Elizabeth Holmes-like levels of indestructible.

Holmes, meanwhile, remains “on brand” and denies any wrongdoing. As of June 2018, Vanity Fair reported that she has already moved on to a new start-up idea.

I suspect the world — and potential investors — will be watching what she does next with a lot more scrutiny than before; the kind of necessary scrutiny that is antithetical to startup culture but may well have prevented Theranos from spinning so far out of control in the first place.

Betsy Aimee is a writer, podcaster and co-founder of Born In June Creative

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