Stating the Obvious

The world would like to remember the conviction of Theranos founder Elizabeth Holmes as a cautionary tale of Silicon Valley hubris. The collapse of her blood-testing company was hailed as both the end of tech’s “fake it till you make it” culture and of the dubious cultural phenomenon of the girlboss. But here in the San Francisco Bay Area there is no interest in learning lessons from the debacle.

While Holmes awaits sentencing and her business partner waits for his own trial, venture capital money continues to flow into wild start-up ideas. No broader reckoning has been linked to her story. In the weeks since her January conviction, I have had more conversations about the trial with people in London than San Francisco. This is despite the fact that Holmes lives nearby and remains one of the most high-profile female founders the US tech sector has ever produced.

Instead of seeing the case as a spur to toughen up due diligence, the tech sector is choosing to dismiss it as an outlier. Just as imploded co-working company WeWork was described by west coast tech workers as a New York company, Theranos’s non-tech investors tend to be invoked when talking about its failure. The implication is that real tech investors would have been able to spot the lies. The truth is more complicated. Silicon Valley was involved, albeit at an early stage. Although late investors included Walgreens and Rupert Murdoch, one of Theranos’s earliest backers was notable VC firm Draper Fisher Jurvetson. (And, of course, Holmes went to Stanford.)

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