I think it was also that Elizabeth is a very smart young woman, and that she told a really good story, a really compelling story, and it was also a feel-good story. Because as she described it at the height of her fame, the Theranos finger-stick tests were painless and user-friendly and therefore people would get their blood tested more often and therefore disease would get diagnosed earlier and people would say goodbye to loved ones less often. And so it was a story that also pulled at your heartstrings. I think she was an expert at emphasizing that aspect of things.
The other thing is this wasn’t a complete house of cards like Bernie Madoff, you know? She didn’t drop out of Stanford resolving to pull a long con 15 years ago. She actually truly did nurture the ambition of walking in Steve Jobs’ footsteps and being a successful Silicon Valley entrepreneur. And she did over that decade-plus hire people and work on several iterations of technology and tried to make it happen.
And so there got to a point, especially when she went live with the technology, she solicited money on the strength of that where it became fraud because she was hiding the set-backs and she was hiding what she had. She papered over her set-backs and she exaggerated her claims, but it was rooted in someone who had tried to succeed. And so I think that made her all the more believable.
You talk a lot in the book about Elizabeth’s personality and that hypnotic way that she was able to con people. And it seems like those kind of personalities pop up a lot in Silicon Valley, and we’re almost seeing it now too with Elon Musk, that cult of personality-driven environment. What is it about [Silicon Valley] that really makes it susceptible to those personalities?
Well, I think the cult of personality is something that’s really been at the center of Silicon Valley for a while now. And one of the people most to blame for it, winningly or not, and he’s not alive anymore to rebut this argument, but I would say is Steve Jobs. People have made a God out of Steve Jobs. He’s like the entrepreneurial baby in this country now.
He’s the guy who could see around corners and who’s just so brilliant and people admire the great wealth that he achieved and that his wife has inherited. And so as a result, people in Silicon Valley, if you go and hang out there, I don’t know if you’ve hung out there, but they’ve really convinced themselves that there is this breed of entrepreneur who can see around corners? It’s the myth of the brilliant founder.
So it’s a Silicon Valley myth. And she benefited from it and capitalized on it, and Musk is benefiting from it and capitalizing on it too, not that Musk hasn’t achieved some things. Arguably, SpaceX has achieved [a good amount] and [is] impressive, but with Tesla you see a blind belief in him, you see more, especially with a public company, you see more of the ways in which it’s gone too far.
You know, the valuation assigned to Tesla, when you think about it, it’s a company that’s not profitable, it’s under $10 billion in debt and still hasn’t figured out how to manufacture cars in an efficient way and yet it’s the most valuable car maker in this country.
I think the Theranos scandal is…it’s a reminder that these people are human. And don’t put them too much on a pedestal, and don’t excuse every one of their actions, especially when those actions veer into essentially securities fraud and white-collar crime, you know?