How Elizabeth Holmes Soured the Media on Silicon Valley

Testimony in the fraud trial of Ms. Holmes, the founder of the blood testing start-up Theranos, shows how much coverage of the tech industry has changed over the years.


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SAN JOSE, Calif. — At the height of her acclaim in 2015, Elizabeth Holmes, the entrepreneur who founded the blood testing start-up Theranos, was named Glamour’s “Woman of the Year.” Time put her on its list of 100 luminaries. And she graced the covers of Fortune, Forbes, Inc. and T Magazine.

Theranos collapsed in scandal three years later, failing in its mission to revolutionize the health care industry. But it did change the world in another way: It helped sour the media on Silicon Valley.

That point was brought home on Thursday when Roger Parloff, a journalist who penned the Fortune cover story on Ms. Holmes and Theranos in 2014, testified in a federal courtroom in San Jose, Calif., where Ms. Holmes is on trial for 12 counts of fraud. Mr. Parloff said Ms. Holmes had made misrepresentations to him, including the volume and types of tests that Theranos could do, as well as its work with the military and pharmaceutical companies.

Theranos’s law firm, Boies Schiller, had introduced him to the start-up, Mr. Parloff said. The law firm had told him that “the real story was this remarkable company and its remarkable founder and C.E.O., Elizabeth Holmes,” he testified, looking directly at Ms. Holmes across the courtroom.

The discovery that Ms. Holmes, the tech industry’s most celebrated female entrepreneur, was misdirecting the world about her company marked a turning point in the tech press, ending a decade-long run of largely positive coverage. Reporters cringed over glowing articles they had written about tech companies that turned out to have stretched the truth, glossed over the negative consequences of their products or generally abused the trust they had enjoyed with the public.


Roger Parloff, who wrote a Fortune cover story about Theranos and Elizabeth Holmes in 2014, testified on Thursday that she had misled him.Credit…Paul Bruinooge/Patrick McMullan, via Getty Images

“Holmes just becomes this fable of ‘You can’t just buy what they’re selling,'” said Margaret O’Mara, a professor at the University of Washington and a historian of Silicon Valley. “‘This was not what it purported to be, and we fell for it.'”

Understand the Elizabeth Holmes Trial

Elizabeth Holmes, the founder of the blood testing start-up Theranos, is currently standing trial for two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.

Updates From the Courtroom: Erin Griffith and Erin Woo, two Times tech reporters, are covering the trial. Follow along here.Key Figures: Get to know the people involved, including, two whistleblowers and the U.S. secretary of defense, James Mattis.Understanding Holmes: Was Ms. Holmes driven by greed and power or a victim of manipulation? What You Don’t See: This is what goes on behind the closed doors of the courtroom.

After The Wall Street Journal published exposes in 2015 and 2016 showing that Theranos was not what it appeared to be, coverage of tech companies generally became more probing.

Reporters dug into Facebook’s role in the 2016 presidential election, as well as scandals at Uber and a series of #MeToo accusations and labor uprisings at tech companies. The shift happened alongside the realization that the tech industry was no longer the niche realm of idealist computer geeks. It had become the dominant force in the global economy and needed to be held more to account.

Now as Ms. Holmes, 37, stands trial, the media’s role in Theranos’s rise and fall has been laid out in painstaking detail. Ms. Holmes used positive articles like Fortune’s to gain credibility with investors, who poured $945 million into Theranos, prosecutors have argued.

Those investors were often wowed by the media coverage. Chris Lucas, a venture capitalist whose firm had invested in Theranos, testified that reading the Fortune article had made him “very proud of the situation, proud we were involved, very proud of Elizabeth, the whole thing.” Lisa Peterson, who managed a $100 million investment in Theranos on behalf of the wealthy DeVos family, lifted language directly from the Fortune article into a report she prepared.

The media was likewise eager to embrace Ms. Holmes’s narrative of a brilliant Stanford University dropout on her way to becoming the next Steve Jobs. Here was a young, self-made female billionaire who was being compared to Einstein and Beethoven. She embraced iconography, dressing like Mr. Jobs in black turtlenecks, as well as an esoteric lifestyle, telling Mr. Parloff that she was a vegan Buddhist who eschewed coffee for green juice.

“There was a hunger for that kind of story, and she seized that opportunity and worked that very carefully,” Ms. O’Mara said.

The media’s fascination with Ms. Holmes became so intense that in 2015, her business partner and boyfriend at the time, Ramesh Balwani, who is known as Sunny, warned her that the hype was getting risky.

“FYI, I am worried about over exposure without solid substance, which is lacking right now,” Mr. Balwani wrote in a text message that was included in court filings.

Ms. Holmes brushed off the warning. Media coverage had helped Theranos with an apparent potential business deal, she wrote, adding, “The more it works the more haters will hate.”


Ms. Holmes posing backstage at the 2015 Glamour Women of the Year Awards.Credit…Nicholas Hunt/Getty Images

Later that year, The Journal revealed that Theranos’s technology did not do what the start-up claimed, spurring a surprise inspection by regulators that led to the company’s unraveling.

Theranos forcefully denied The Journal’s report. On CNBC, Ms. Holmes dismissed the article as “what happens when you work to change things.” She and Mr. Balwani plotted a defamation suit, according to text messages included in court filings. Together, they led Theranos employees in chanting an expletive at John Carreyrou, The Journal’s reporter.

Soon after, Mr. Parloff published a long correction to his Fortune article outlining the ways Theranos and Ms. Holmes had misled him. He also blamed himself for not including some of Ms. Holmes’s more evasive and opaque answers to his questions.

In court, exhibits revealed that Ms. Holmes had shown Mr. Parloff the same falsified validation reports — which appeared to show that pharmaceutical companies had endorsed Theranos’s technology when they had not — that she had sent to investors. Mr. Parloff also said Ms. Holmes had told him that the military was using Theranos in Afghanistan, but that the fact was so sensitive he could not publish it or even ask Gen. James Mattis, a Theranos board member, about it. It turned out that Theranos machines were never used on battlefields.

“She was very concerned about trade secrets,” Mr. Parloff said.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Carlos Chavarria for The New York Times

Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.

Here are some of the key figures in the case ->

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Stephen Lam/Reuters

Holmes founded Theranos in 2003 as a 19-year-old Stanford dropout. She raised $945 million from investors and was crowned the world’s youngest billionaire, but has been accused of lying about how well Theranos’s technology worked. She has pleaded not guilty.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Justin Sullivan/Getty Images

Ramesh Balwani, known as Sunny, was Theranos’s president and chief operating officer from 2009 through 2016 and was in a romantic relationship with Holmes. He has also been accused of fraud and may stand trial next year. He has pleaded not guilty.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Jefferson Siegel for The New York Times

David Boies, a prominent litigator, represented Theranos as its lawyer and served on its board.

He tried to shut down whistle-blowers and reporters who questioned the company’s business practices.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Getty Images

The journalist John Carreyrou wrote stories exposing fraudulent practices at Theranos.

His coverage for The Wall Street Journal helped lead to the implosion of Theranos.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Jeff Kravitz/FilmMagic, via Getty Images

Tyler Shultz and Erika Cheung are former Theranos employees and were whistle-blowers. They worked at the start-up in 2013 and 2014.

Shultz is a grandson of George Shultz, a former secretary of state who was on the Theranos board.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Eric Thayer for The New York Times

James Mattis, a retired four-star general, was a member of Theranos’s board.

He went on to serve as President Donald J. Trump’s secretary of defense.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo?Reporting from San Jose, Calif.

Edward Davila, a federal judge for the Northern District of California, will oversee the case.

Kevin Downey, a partner at the Washington law firm Williams & Connolly, is the lead lawyer for Holmes.

Robert Leach, an assistant United States attorney for the Northern District of California, will lead the prosecution for the government, along with other prosecutors from the U.S. attorney’s office.

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Other outlets that had hailed Ms. Holmes followed Mr. Parloff’s mea culpa. Forbes revised Ms. Holmes’s net worth, once estimated at $4.5 billion, to zero. Glamour appended an update to its Woman of the Year award after the Securities and Exchange Commission charged Ms. Holmes with fraud.

Even as she faces up to 20 years in prison if convicted, Ms. Holmes continues to fight the media. Throughout the trial, her lawyers have pushed to limit Mr. Parloff’s testimony. They filed a motion to compel him to turn over all of his reporting notes, even though he had already provided recordings of his interviews with Ms. Holmes to both sides of the case under subpoena.

The goal of that motion was to show that Mr. Parloff “was colored by bias” and “a desire to blame any errors he made in his initial article on Ms. Holmes,” John Cline, a lawyer for Ms. Holmes, said in a hearing in October.

A judge denied the motion as a “fishing expedition.”

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