Theranos founder Elizabeth Holmes has been charged by the Securities and Exchange Commission (SEC) with defrauding investors of $700 million. As a part of her settlement, Holmes will step away from the company and pay a $500,000 fine.
It's worth asking how someone could commit nearly a billion dollars of fraud and now just lose control of her company. Of course, at one point it was worth asking how a company founded by a then 19-year- old could invent a new, less-invasive way of drawing blood from patients. Such an innovation has long eluded the medical community--until Holmes came along.
Or at least that was the story she was trying to sell.
Writers who create glowing profiles of entrepreneurs and celebrity CEOs did their best to help Holmes sell her story. Magazines, including Inc., wrote about how she was "America's New Entrepreneurial Icon." They called her the "Achiever of the Year." They shared "21 Surprising Facts" about Elizabeth Holmes, which included information about what she wore to the office (a black turtleneck, like her hero Steve Jobs) and what she learned in high school (Mandarin).
The list did not include the most surprising fact of all, which was that (at least at the time) Theranos was a sham and Holmes was engaged in fraud.
In the collective rush to feed a constant hype machine and make celebrities out of anyone with even the slightest bit of charisma, the media helped create the legend of Elizabeth Holmes. That legend enabled Holmes' fraud, and the victims of her fraud weren't just yacht-owning venture capitalists. Employees who believed in Holmes and Theranos lost their jobs, and now must contend with a résumé that includes the Silicon Valley equivalent of Enron.
The rise and fall of Elizabeth Holmes is a reminder that just because someone seems dynamic does not mean there is actual substance beyond the black turtleneck. Sometimes--especially in the startup world--what exists behind the buzzwords is little more than ruthless ambition and unrestrained greed wrapped in good PR.
Those reporting on people like Holmes can do better. They can hold ourselves to a higher standard. They can focus on issues of substance and avoid the click-driven temptation to celebritize anyone with a good story and a camera-friendly face.
They can strive to write and create things that they can be proud of years after they've written them.
They can also use a little common sense. Doctors and healthcare professionals do not know everything and are not perfect, but if millions of them haven't figured out how to reinvent a basic and very unpleasant procedure, the odds that a 19-year-old college dropout has the solution is remote.
Frauds and corporate con artists have always existed.
But their cons were a little harder to pull off in an age when there weren't thousands of bloggers rushing to be the first to publish a post raving about what the visionary con artist said at the latest festival fetishizing "innovation."
Elizabeth Holmes would have tried to defraud investors with or without the help of writers like me.
Still, when the next Elizabeth Holmes walks onstage in his or her turtleneck, lake a moment before writing a 600-word post anointing them as the savior of whatever industry they are trying to disrupt.
In other words, make the con a little harder.