BBC: The 'Fantasy Science' of Theranos Empowered Silicon Valley's 'Promoters and Scoundrels'

BBC News recently outlined how the rise and fall of fraudulent blood-testing company Theranos led to an ongoing culture of overhyping and underdelivering in Silicon Valley.

In an article titled “Elizabeth Holmes: Has the Theranos scandal changed Silicon Valley?” BBC News studies the case of Theranos CEO Elizabeth Holmes — who is currently on trial for fraud. Holmes, the disgraced founder and former CEO of Theranos, a blood-testing company that promised to diagnose a number of illnesses and diseases from just a single drop of blood, is charged with defrauding investors and patients. Holmes’ former business partner and ex-boyfriend, Ramesh “Sunny” Balwani, is also being charged in the case.

Elizabeth Holmes, CEO of Theranos, participates in the closing plenary session of the Clinton Global Initiative 2015 Annual Meeting at the Sheraton New York Times Square Hotel, on Tuesday, Sept. 29, 2015 in New York. (Photo by Greg Allen/Invision/AP)

SAN JOSE, CALIFORNIA – JUNE 28: Former Theranos COO Ramesh “Sunny’ Balwani leaves the Robert F. Peckham U.S. Federal Court on June 28, 2019 in San Jose, California. Former Theranos CEO Elizabeth Holmes and former COO Ramesh Balwani appeared in federal court for a status hearing. Both are facing charges of conspiracy and wire fraud for allegedly engaging in a multimillion-dollar scheme to defraud investors with the Theranos blood testing lab services. (Photo by Justin Sullivan/Getty Images)

Among those testifying in the trial are Theranos patients who were incorrectly diagnosed, some being informed they had diseases such as HIV without adequate proof. One woman, who was pregnant at the time of testing, was incorrectly told that she had miscarried her baby by Theranos.

BBC News now asks whether the initial success of Theranos and Holmes’ promotion of what the outlet calls “fantasy sceince’ has led to a culture of overhyping in Silicon Valley. Margaret O’Mara, author of The Code: Silicon Valley and the Remaking of America, commented: “It’s baked in to the culture. If you are a young start-up in development — with a barely existent product — a certain amount of swagger and hustle is expected and encouraged” she said.

BBC News writes:

Particularly at an early stage, when a start-up is in its infancy, investors are often looking at people and ideas rather than substantive technology anyway. General wisdom holds that the technology will come with the right concept – and the right people to make it work.

Ms Holmes was brilliant at selling that dream, exercising a very Silicon Valley practice: ‘fake it until you make it’.

Her problem was she couldn’t make it work. Her lawyers have argued that Ms Holmes was merely a businesswoman who failed, but was not a fraudster.

The problem in Silicon Valley is that the line between fraud and merely playing into the faking it culture is very thin.

Tech venture capitalist Roger McNamee commented on Theranos, stating: “Theranos was an early warning of a cultural shift in Silicon Valley that has allowed promoters and scoundrels to prosper.” McNamee stated that he believes that the culture of secrets and lies in Silicon Valley that allowed Theranos to rise to popularity completely un-tested is “absolutely endemic.”