Only a few short years ago, Elizabeth Holmes, a Stanford University dropout turned technology startup CEO, was the youngest self-made female billionaire in the world and heralded as “the next Steve Jobs” by Silicon Valley’s elite. Theranos, the biotech company she founded in 2003, at age 19, raked in nearly $1 billion in venture capital funding for the development of affordable single-drop blood tests that Holmes promised would revolutionize the healthcare industry. Now, Holmes is facing 20 years in prison for wire fraud, accused by the federal government of scheming to defraud investors, doctors and patients with false claims about “the company’s technology, business, and financial performance.” Today, ABC News and Nightline released the first episode of The Dropout, a new six-part podcast hosted by Chief Business, Technology and Economics Correspondent Rebecca Jarvis, who, according to a press release, spent three years investigating “the twists and turns of Elizabeth’s rise and fall.” The story will also be told in a forthcoming documentary of the same name, which will be previewed on tonight’s episode of Nightline.
While Holmes successfully wooed high-profile investors like Rupert Murdoch and Betsy DeVos, and partners like Walgreens — resulting in Theranos being valued at $9 billion in 2015 — behind-the-scenes, the company’s technology didn’t actually deliver. As first revealed by John Carreyrou of The Wall Street Journal in 2015, Theranos’ patented blood tests gave inaccurate results, and secretly, the company used commercially available machines for most testing. The podcast and documentary include audio from never-before-released deposition tapes tied to lawsuits brought against Theranos — which was formally dissolved in late-2018 — by the Security and Exchange Commission (SEC) and the state of Arizona, where Holmes lobbied for legislation that allowed residents to acquire the blood tests without a prescription, all while misrepresenting their accuracy and effectiveness.
In the first episode of The Dropout, Jarvis explores Holmes’s privileged childhood in Washington D.C., where her father worked for Enron and then several government agencies and her mom was a Congressional aide. Holmes excelled at school and expressed her ambitions from an early age, telling her dad she wanted to “discover something new, something that mankind didn’t know was possible.” Phyllis Gardner, Holmes’ former professor at Stanford University, recalls when Holmes first explained that she wanted to develop a patch that could both sample blood and deliver antibiotics, an idea which Gardner told her repeatedly wouldn’t work.
Holmes was undeterred by the criticism, and ultimately found a mentor in another professor, Channing Robertson, who introduced her to several venture capitalists and supported her decision to drop out of school to focus on launching Theranos. In an interview with Bloomberg Business Week at the height of the company’s supposed success, Robertson compared Holmes to Mozart, Einstein, Newton and Da Vinci; he was later deposed in several lawsuits against the company.
Holmes wanted Theranos to be the next Apple, and she recruited several early hires directly from their ranks, including product designer Anna Areola, who tells Jarvis that Holmes was “obsessed with Steve Jobs.” Not only did Holmes begin wearing a signature black turtleneck just like Jobs, but several sources tell Jarvis that she also lowered her voice several octaves, speaking in a distinctive baritone.
Both the podcast and documentary also feature interviews with numerous former Theranos employees, patients who used the company’s products, members of Holmes’s inner circle, and other central figures, including attorney Jeff Coopersmith, who represents Ramesh “Sunny” Balwani, the former Theranos President/COO, Holmes’ one-time boyfriend and current co-defendant in the government’s criminal case. (Both have pleaded not guilty.)
“This is a story that I’ve been deeply researching and investigating for years,” Jarvis said in a statement. “I’ve been covering business for more than a decade, from the Housing Collapse to the fall of Bear Stearns, to the Bernie Madoff Scandal. But none of these comes even close to the mystery and intrigue of Elizabeth Holmes.”