(9 mins read)

Once upon a time… far, far away… there was a little princes. She was a beautiful and enchanting girl, and she was living in a mighty and powerful castle. Through her entire long life, she was always humble and wise and she was able to take right decisions only. During her life, she met a handsome prince and they lived happily ever after and their kingdom lasted forever. Ta da! Curtain!

We wish the story of Elisabeth Holmes and Theranos had a happy ending as well but, unfortunately, this is not the case. It has an impressive beginning but a horrific, scary ending.


From her early years Elisabeth Holmes was innovative, extremely competitive, and determined to achieve her dreams. As a child she always wanted to win and hated losing. When she was 7 years old, she wanted to develop her own time machine. When she was 9, she knew she wanted to be a billionaire. Being a celebrity and having lots of money were her targets. She wanted to study medicine, however there was only one fundamental problem – she was afraid of needles. In retrospect, we could say that it was probably one of her key impulses to create the concept of Theranos. She was extremely committed and dedicated, spent a lot of time for education and entrepreneurial activities.

During her chemical engineering studies at Stanford University, Elisabeth Holmes founded a company called “Real Time Cures”. Soon afterwards, she filed a patent application for a wearable medical device which would monitor a patient’s blood and adjust a dosage of medicine. It was a breakthrough idea but we didn’t have the technology yet. Then, she dropped out of Stanford and was running her company from the basement of her student house, later changing the name of the company to Theranos. She was 19 years old when she decided to follow her dreams.

After just two years, Theranos became a unicorn company. It had everything: a visionary leader, breakthrough technology, and a start-up mentality. Holmes presented Theranos as a “tech company” and not as a blood testing company. The business idea was brilliant and simple: Theranos claimed that they developed a cutting-edge blood testing system. Simple, quick, and cheap blood tests require just a few drops of blood. Holmes claimed that their technology allowed them to detect patients’ medical conditions such as cancer or a high cholesterol. It was revolutionary.

Theranos claimed that they reinvented lab tests.

A mixture of Holmes’s charisma and innovative testing technology created the smell of money which could not be overlooked by investors. The investments into Theranos, from investors like Rupert Murdoch, Larry Ellison (Oracle founder), totalled 700 million USD. There is however an interesting fact we need to mention here: Theranos took all the money on the condition that, due to security concerns, investors could not explore how Theranos’s technology worked. Holmes was able to attract really big names to the Board of Directors. Let’s name only two: Henry Kissinger (American politician and diplomat, former US Secretary of State) and George Shultz (American economist, diplomat and businessman, former US Secretary of State). It was like living the start-up dream. Theranos’s peak valuation was … 9 billion USD.

Despite all the success and buzz on the market, in 2008, the Theranos board tried to remove Holmes as CEO. They wanted to replace her with someone more experienced. However, this did not materialize. Holmes was able to convince the Board to let her stay.

The business was growing nicely and they were able to start cooperation with Walgreens and Safeway (350 million USD deal signed) and many others. Walgreens decided to open 43 Theranos testing centers in their stores. Walgreens executives were not granted permission to explore technology or check the data either. Now we know that Walgreens have been deceived, as Theranos used standard test machines modified by their own engineers to make them look like Theranos “mini-Labs”.

Theranos needed a tiny drop of blood to run all tests.

In 2014, first questions were being raised about Theranos’ technology. Holmes received an internal warning from Ian Gibbons (Chief Scientist) that there were inaccuracies in the technology. Outside scientists began voicing their concerns about Theranos too. In August 2015 The US Food and Drug Association (FDA) began investigating Theranos. They found “major inaccuracies” in testing on patients. In October 2015 Holmes and Theranos were hit by a PR tsunami. The Wall Street Journal reporter, John Carreyrou published his investigation into Theranos’s technology. He found out that Theranos’ blood-testing machine (Edison) couldn’t give accurate results. Through his journalist investigation he learned that Theranos was running its samples through the same machines used by traditional blood-testing companies. The FDA, Centers for Medicare & Medicaid Services, and SEC were on the case and it did not look good at all. July 2016 was critical. Based on key findings from all investigations Holmes was banned from the lab-testing industry for two years. Additionally, in October, Theranos had shut down its lab operations and wellness centers.

March 2018, was the most devastating month to Theranos, Holmes, and Ramesh “Sunny” Balwani (Chief Operating Officer and Holmes’ lover). Holmes and Balwani were charged with “massive fraud” by the SEC. Holmes had to give up the financial and voting control of Theranos, pay a $500,000 fine, and return 18.9 million shares of the company’s stock. Theranos was a private company and Holmes was allowed to continue as CEO, but that did not last for long and in June 2018 Holmes stepped down as CEO. On the same day, the US Department of Justice announced charges against Holmes and Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud. Finally, in September 2018, Theranos was shut down.

It was the end of Theranos but not the end of Elisabeth Holmes’s story.

In September 2021 the trial kicked off. During the next 3 months, 29 witnesses were called to testify. Prosecutors called Theranos’s patients, doctors, ex-employees and investors. In December 2021 the case went to jury and on January, 3rd 2022, 3 of the 11 charges against Holmes were confirmed. It is worth mentioning that the counts she was found guilty of were all related to mismanaged or misled investors.  None of the counts were connected with patients who received inaccurate test results. Now, Holmes’ story becomes dark and brutal. She faces the possibility of spending a maximum of 20 years in prison for each count. Additionally, she would need to pay all the victims’ restitutions. In a separate court case Ramesh “Sunny” Balwani was convicted on 12 fraud charges. Soon we will be informed about sentences. Holmes’s sentence will be announced on October 17th, 2022 and Balwani on November 15th.

Elisabeth Holmes was announced as the reincarnation of Steve Jobs.


Elisabeth did a lot to create the perception that she was the reincarnation of Steve Jobs. She had the inspirational vision that Jobs had; Holmes was wearing a black polo neck exactly as Jobs did; and she was was injected into Theranos’ culture secrecy and mystery as Jobs was with Apple. She followed the same behaviours like no vacations, as Jobs did. She even decorated her office with Jobs’s furniture.

In her glory days, she was identified as a great innovator and the new-type of entrepreneurs. She appeared on the front pages of New York Post, Wall Street Journal, Time, Forbes, the Fortune and many, many others. She was a global tech celebrity. At the top of her career Elisabeth was the world’s youngest self-made billionaire with a net worth of USD 4,5 billion.

It was all about building a false perception: it was all fake. The fundamentals for all what has happened are Elisabeth’s sick ambitions and greed. Abnormal determination took her to a place where business failure was not an option, where she decided to commit fraud and avoid a collapse of her vision.

Now she is waiting for the sentence and she may spend up to the next 60 years in prison.

“Fake it till you make it”, marketing slogan developed when Theranos’s secrets were disclosed.


In retrospect, and after much analysis, we can say that the culture at Theranos was not only wrong, but it was broken and toxic. Desired unethical behaviors guided people to wrongdoing. Theranos employees were punished for ethical and correct behaviors or actions, and they were rewarded for hiding the truth and continuing all faking activities.

We could identify six key areas which had a significant impact on the Theranos collapse.

Culture of MYSTERY – every company and especially technological unicorns protects their innovative products, services, software, algorithms, etc. and keeps its secrets. Apart from the fact that Theranos was not a tech firm and had a fake product, they created The Great Wall of Mystery which “protected” fake technology from investors, internal checks or external controls. Confidentiality was replaced by mystery and secrecy which was used to hide the fact that a lot at Theranos was fraudulent.

Culture of DISEMPOWERMENT – all information and decision making was centralized at Theranos. Only two people, Holmes and Balwani, had a full knowledge and understanding of the ongoing business activities; just two people in the entire company were able to connect all the dots. Other Theranos employees were not empowered to talk, they were not able to make decisions, ask questions, or challenge.

CULTURE OF FRAUD – There was no integrity in the company’s DNA. They did not know what was appropriate and what was not. In many cases employees prepared flattering reports about Theranos products. In some specific situations they made use of logos of other pharmaceutical companies without appropriate authorization.

Culture of RETALIATION – Not a single person spoke up and employees were scared of asking questions or raising their concerns. If they did it, the seniors would retaliate. It was authoritarian. Balwani, as a despotic Chief Operating Officer, ensured that all followed the orders from the top. No questions or feedback were welcome, no care for diverse views, no ability to reflect. All these elements resulted in high turnover, as smart and intelligent people could not accept working in such conditions under a permanent stress and a fear of retaliation.

Culture OF EXCLUSION – Theranos’s structure was built in such a way which was supposed to ensure a silo structure and defragmentation. It was done on purpose. Employees were instructed not to share information. Inclusion and information sharing attempts were watched out and penalized. At the beginning of Theranos’s activities, Holmes decided to even take three former employees to the court for sharing the firm’s secrets. People in the company were scared and intimidated.

CULTURE OF IGNORANCE – there was no openness to feedback, constructive challenge, or reflection. Holmes and Balwani decided to ignore everything which was not supporting their vision and fake products.

When disaster happens there is no one single cause of it. Usually there is a sequence or combination of some specific events or actions which led to a catastrophe. Theranos’s case is an example of a sad story where a vision, driven by a possessed leader, selling a fake product, and in a company with a wrong culture led not only to a failure of this company but to criminal charges.

On November 18th, 2022 the US court sentenced Elisabeth Holmes to 135 months (more than 11 years) in prison. It’s a huge price she needs to pay for her young ambition yo be a billionaire.


“Bad Blood” by John Carreyrou
“The Dropout” podcast by ABC News with ongoing updates


“Inventor: Out of blood in Silicon Valley” by HBO

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