The Shocking True Story of The Dropout/Elizabeth Holmes

The Shocking True Story of The Dropout Elizabeth Holmes

Welcome to MsMojo, and today we’re discussing The Shocking True Story of The Dropout/Elizabeth Holmes.

For this video, we’ll be looking at the most dramatic real life events that inspired Hulu’s “The Dropout.”

Do you plan on watching the series? Drop us a line in the comments!

Early Life

In the early to mid-2010s, Silicon Valley entrepreneur Elizabeth Holmes was suddenly on the cover of magazines and speaking at major conferences. She captivated leaders and audiences alike with her goal of revolutionizing blood testing and the healthcare industry at large. But this passionate visionary turned out to be a master fraudster who swindled millions out of investors and put patients’ lives at risk. How did an inexperienced college dropout become a biotech billionaire?

From a young age, Elizabeth Holmes had big aspirations. Coming from a successful family, there was a lot to live up to. But Holmes was determined. She was born and raised in Washington, D.C. before her family relocated to Houston, Texas. Both of her parents worked in government, and her father Christian was also once the vice-president of Enron. Their lineage was also a powerful one, but the generational wealth had dried up over time - much to the family’s dismay. They were still well-off, to be sure. But according to former neighbor Joseph Fuisz, the Holmes’ wanted to recapture their former glory.

Going to Stanford

As a high school student, Holmes managed to talk her way into attending Stanford University’s summer Mandarin program by showing off her already impressive language skills. After graduating, she began her chemical engineering studies at the university. There, she shared a business idea with a professor named Dr. Phyllis Gardner. Holmes wanted to create a patch that would check blood levels and administer medication as needed. Dr. Gardner told the 19-year-old that it wasn’t scientifically possible, but Holmes was relentless. She then turned to Channing Robertson, an engineering professor who was also the Chair of the Department. He actually thought she was brilliant, and supported her ideas.

In 2003, Holmes founded Theranos (a mix of the terms “therapy” and “diagnosis”). And it wasn’t long before she dropped out of Stanford to pursue the business full-time. But instead of the patch, she ultimately shifted her focus to developing a blood analyzing machine. Inspired by her own fear of needles, Holmes wanted to create a process that made blood testing less painful, less expensive, and more widely available. Rather than tubes of blood taken from a vein, this would only need drops from a finger prick.

Building Theranos

As the first board member of Theranos, Channing Robertson helped Holmes connect with venture capitalists. Her first major investor was family friend Tim Draper, who gave her $1 million. By the end of 2004/early 2005, she had about $6 million in funding. And in the following years, she landed several high-profile investors including Rupert Murdoch, Walmart’s Walton family, and Larry Ellison.

One of Holmes’ heroes was Apple CEO Steve Jobs. So much so that she convinced his former colleague and friend Avie Tevanian to invest and join the board. She also got iPhone designer Ana Arriola to be the chief design architect for the Edison — the small machine meant to process the “nanotainers” of blood. Holmes even asked Arriola for style tips, eventually creating her version of Jobs’ signature look. But the two former Apple employees caught on to her act. When they separately questioned the shady goings on, they were challenged – and essentially forced to resign.

Investors and Board Members

Amid financial troubles both in the United States and at Theranos, businessman and investor Ramesh “Sunny” Balwani joined Theranos in 2009. His money saved the company, and he soon became the Chief Operating Officer and President. He was also dating Elizabeth, having met many years prior in Beijing. However, they kept their romantic relationship a secret.

When former Secretary of State George Shultz joined the board in 2011, he brought on more government heavyweights. They included former senator Samuel Nunn, former Defense Secretaries William Perry and Jim Mattis, and another former Secretary of State Henry Kissinger. The company was criticized for having what was essentially an all-male board with backgrounds in politics and the military. There was also a lack of scientific experts. Still, Holmes continued to make waves.

Media Attention

Theranos went live with their first Wellness Center in California after securing a partnership with Walgreens. And with Fortune’s 2014 cover, Elizabeth Holmes’ media presence skyrocketed. She was likened to highly successful entrepreneurs like Mark Zuckerberg, and was often called “the next Steve Jobs.” She also made it onto the Forbes 400 list, and was named “the youngest self-made female billionaire in the world.”.

But while Holmes and Theranos received widespread praise and media attention, people were still curious as to how this “revolution” actually worked. The company was notoriously secretive, and Holmes was an expert at dodging questions about the process. Not everyone was entirely fooled by her storytelling, though. In his 2014 New Yorker profile, Ken Auletta described Holmes’ explanations as “comically vague.” And her dodgy responses during that interview caught the eye of John Carreyrou, a journalist for the Wall Street Journal.

Holmes & Theranos’ Downfall

Carreyrou’s sources claimed that the majority of blood tests were done using third-party equipment, and that the Edison machines themselves didn’t work. In other words, the company’s test results were regularly inaccurate. Two of the whistleblowers who contributed to the exposé were Erika Cheung and Tyler Shultz, the latter of whom was the grandson of board member George Shultz. According to Cheung, her concerns were dismissed by Holmes and Balwani. So she and Shultz took their concerns to his grandfather, but he didn’t bite either. They both ultimately left the company. They were subsequently threatened with legal action, and suspected they were being followed by private investigators.

The Wall Street Journal article came out in October 2015, and Elizabeth Holmes didn’t waste any time firing back and disputing the claims. But this was the beginning of the end for Theranos.

Criminal Charges

In March 2018, the Securities and Exchange Commission charged Elizabeth Holmes, Theranos Inc., and Sunny Balwani with “massive fraud.” And a few months later, Theranos was officially dissolved. The trial was delayed several times due to the COVID-19 pandemic and Holmes’ pregnancy. That’s right, she and her partner Billy Evans had a child in July 2021.

On January 3rd, 2022, a jury found Holmes guilty of three counts of wire fraud, and one of conspiracy to commit wire fraud. She was found not guilty of charges pertaining to defrauding or conspiring to defraud patients. Moreover, no verdict was reached on three of the other counts. Balwani, meanwhile, will be tried later in the year. Holmes’ sentencing will likely take place afterward, in September 2022. She faces up to 20 years in jail, a fine, and restitution, though many think she’ll get off relatively easy.

In the Media

The story of Elizabeth Holmes and Theranos has been the subject of articles, books, and documentaries. And now, it’s about to get the Hollywood treatment. Based on the ABC News podcast of the same name, Hulu’s miniseries “The Dropout” premieres March 3, with Amanda Seyfried as Holmes. Meanwhile, Adam McKay’s film adaptation of John Carreyrou’s book, “Bad Blood”, has found a home at Apple, though there’s no official release date yet. That project will star Jennifer Lawrence as Theranos’ founder and CEO. Needless to say, we likely won’t stop hearing about Elizabeth Holmes anytime soon.