Scandal and fraud mar the reputation of Silicon Valley, the epicenter of western technological innovation. The California tech hub is home to companies like Google, Twitter and Apple Inc and has the third highest GDP in the world. According to The Atlantic, these corporations “define our digital lives.” However, in recent years, the tech giants have struggled to “create the futures they’ve long advertised,” failing to democratize the tech world, instead prioritizing profit over customer and planet well-being.
As recently as Dec. 2022, cryptocurrency exchange FTX founder and billionaire Sam Bankman-Fried was arrested in the Bahamas for eight counts of fraud and the breaking of federal finance laws. The month before, the company went bankrupt and suffered billion-dollar financial losses for his customers, forcing Bankman-Fried to step down from his CEO position. In January, he pled not guilty but remains in house arrest for his crimes.
The story of infamous former Theranos CEO Elizabeth Holmes a few years prior bears stark similarities to Bankman-Fried. Holmes, a Stanford University dropout, believed she could reinvent and revitalize the blood testing industry, pitching a product that could test for various medical conditions using only a single drop of blood. Holmes devised this idea at the mere age of 19, and in order to gain investor support, faked the original demonstration of the Theronos prototype as the technology had not been fully developed.
Holmes was deemed a healthcare revolutionary, and in 2014 became the youngest female self-made billionaire. Theranos gained a partnership with Walgreens, and the pharmaceutical giant administered these blood tests on patients after many release delays.
These “delays” were just a small piece of Holmes’ massive commitment of fraud. The tests had a low success rate and fed inaccurate results to doctors, who based their prescriptions on the tests, including false indications of cancer. Holmes’ final breaking point came with journalist John Carryrou’s exposure of her lies to investors and faulty technology using inside sources at Theranos. The formerly $9 billion startup, complete with big-name investors like businessman Larry Ellison and former Secretary of State George Shultz, shut down in 2018. Holmes has been ordered to turn herself in to the authorities by April 2023.
For years, the success of these companies has come partly from the star power of their leaders. According to The Guardian, investors look for a new young “mastermind” to put their money behind, sometimes disregarding the actual tech they have to offer, like in Holmes’ case.
This cult of personality is all too familiar when observing the patterns of these moguls, but simultaneously has gone unnoticed by investors for years. Steve Jobs, for example, was one of the first to attach his personality to his company image; he used certain quirks, like his ever-present black turtleneck, to his advantage. Holmes, inspired by Jobs, acted similarly, opting to wear the Jobs-esque turtleneck and bright lipstick and to speak in an unnaturally low voice. Investors, initially skeptical, became drawn to her image as a teenage, and more importantly female, CEO of a medical startup. Holmes capitalized on the sense of awe and trust people felt for her; like Jobs, most Theranos advertising shows a closeup of Holmes’ face as she holds the product. At the end of her tenure as CEO, she went so far as to blame her failing technology on misogyny.
After so many catastrophic mishaps, investors cannot continue to support these “geniuses,” who continue to falsely ensure they are working for the betterment of society, without any checks and balances. According to The Guardian, the model where “a visionary is entrusted with millions to invest the culture with scant oversight” has come to an end.
On the bright side, these debacles will most likely create a new era of brisk enforcement and accountability, but the negative impacts will still echo throughout society. According to Yahoo, for example, in addition to the ethical repercussions of fraudulent technology, many women attempting to build startups have already reported the “long shadow” that people like Holmes have cast on the industry. Holmes’ particular scandal leaves women at a significant disadvantage, since the primary female Silicon Valley persona turned out to be a massive sham.