SAN JOSE, Calif. — In 2016, start-up founders sang, “Theranos doesn’t represent, we are better,” in a holiday video created by the venture capital firm First Round Capital.
Over the next few years, several columnists wrote that Silicon Valley shouldn’t be blamed for Theranos.
Last month, Keith Rabois, a venture capitalist, said on Twitter that articles connecting Theranos with Silicon Valley culture contained “more fabrication than anything ever uttered by Trump.”
The technorati in Silicon Valley and beyond have long tried to separate themselves from Theranos, the blood testing start-up in Palo Alto, Calif., that was exposed for lying about its abilities. But the fraud trial of the company’s founder, Elizabeth Holmes, has shown that just as Bernard Madoff was a creature of Wall Street and Enron represented the get-rich-quick excesses of the 1990s, Theranos and its leader were very much products of Silicon Valley.
a jury found the entrepreneur guilty of four of 11 counts of fraud, starkly underlined her participation in Silicon Valley’s culture.
Ms. Holmes, 37, used the mentorship and credibility of tech industry big shots like Larry Ellison, a co-founder of Oracle, and Don Lucas, a Silicon Valley venture capitalist, to raise money from others. She lived in Atherton, Calif., amid Silicon Valley’s elite and was welcomed into their circles.
She also used the start-up playbook of hype, exclusivity and a “fear of missing out” to win over later investors. She embodied start-up hustle culture by optimizing her life for the maximum amount of work. She dismissed the “haters” and anything that interfered with her vision of a better world. She parroted mission-driven technobabble. She even dressed like Steve Jobs.
No industry wants to be judged only by its worst actors. And many venture capitalists who heard Ms. Holmes’s impossibly lofty claims didn’t fall for them. But if anyone in Silicon Valley was suspicious of her proclamations, none spoke publicly about it until after things went south.
said in a hearing in May before the trial began.
At its best, Silicon Valley is optimistic. At its worst, it is so naïve it believes its own hogwash. Throughout her trial, Ms. Holmes’s lawyers argued she was simply a wide-eyed believer. Any statements that weren’t entirely truthful, they said, were about the future. It was what investors wanted to hear, they said.
“They weren’t interested in today or tomorrow or next month,” Ms. Holmes testified. “They were interested in what kind of change we could make.”
Soon after Theranos got started in 2003, Ms. Holmes used her vision of the future to win over investors and advisers like Mr. Ellison and Mr. Lucas. Mr. Lucas, who was chairman of Theranos’s board until 2013, was involved with more than 20 investment vehicles that backed Theranos. Those included his son’s venture firm, Lucas Venture Group; another vehicle, PEER Venture Partners; and trusts and foundations associated with members of his family.