Protocol Source Code
What matters in tech, in your inbox every morning.
Photo: Tingey Injury Law Firm/Unsplash

Silicon Valley is on trial

A brown wooden gavel

Good morning! This Wednesday, Elizabeth Holmes isn't the only one on trial, El Salvador's bitcoin economy was not easy to orchestrate, Ford poaches Doug Field from Apple, and Jeff Bezos wants to be forever young.

(Was this email forwarded to you? Sign up here to get Source Code every day.)

The Big Story

The Theranos questions

When Elizabeth Holmes stands trial this week, her defense could involve a few options. Her lawyers might argue she was abused by former Theranos COO and boyfriend Sunny Balwani and believed what he said was true, according to newly unsealed documents. (He denies it.)

Then there's another tack that's been hotly contested in the run-up to the trial: the "This is just how Silicon Valley works" defense. Inevitably, it's not just Holmes on trial for the alleged fraud that vaporized a lab-testing company once worth nearly $10 billion.

Silicon Valley's culture will be examined for its habit of enthusiastically embracing visionaries and supporting those who took a "fake it till you make it" approach that has let a lot of companies grow.

  • Startups in Silicon Valley launch with minimum viable products and build from there. (The launch of the iPhone is still one of the most famous examples of unveiling a product that was barely working.)
  • Holmes ended up as the poster child for Silicon Valley entrepreneurship using that same approach. She appeared on the covers of Forbes, Fortune and Inc., and was named one of Time's "100 Most Influential People" in a write-up by her board member and former secretary of state, Henry Kissinger.

But Silicon Valley insiders are already pushing backat the idea that this case has anything to do with them. Venture capitalists have been quick to point out that Theranos only received a check from Tim Draper, a family friend who happened to be co-founder of DFJ, but not any other Sand Hill Road firm.

  • The cash she did raise wasn't Silicon Valley money, but hundreds of millions from investors like the family offices of Walmart heir Sam Walton, the family of former education secretary Betsy DeVos, and media mogul Rupert Murdoch.
  • Her board also distinctly lacked biotech VCs, but instead was filled with high-powered D.C. types including two former senators, two former secretaries of state, a former general, a former admiral and a former CEO of Wells Fargo.
  • Those high-powered figures are also on the 200-name-long potential witness list, many of whom could appear in the star-studded trial. That list also includes famed litigator and Theranos attorney David Boies, former Defense Secretary James Mattis and whistleblowers Tyler Shultz and Erika Cheung.

Still, there was a time when Holmes was respected and even defended by many venture capitalists as a part of Silicon Valley after the The Wall Street Journal published its first investigation into Theranos. Marc Andreessen started blocking Theranos critics on Twitter, and compared Holmes to Steve Jobs (his tweets have since been deleted).

  • Founder Collective's Micah Rosenbloom wrote an essay "In defense of Theranos" where he argued that few were actually hurt by her misleading story and that "startups by definition should evangelize a vision." Rosenbloom told Protocol recently that his defense came out before all of the facts were known about the ethical breaches and FDA recalls, and he no longer has any defense of the company.

Silicon Valley investors may want to distance themselves now, but the culture of Silicon Valley is part of what allowed Theranos to flourish and will still be on trial. Holmes sold her vision in the way that startup founders are taught to do, and to anyone who would listen: the press, East Coast elites, and corporate partners like Walgreens and Safeway. One question that may be answered in the trial is exactly where the line between optimism and deceit falls.

— Biz Carson (email | twitter)

A version of this story first appeared on Biz will be reporting from the San Jose courthouse where opening arguments for the trial are scheduled to begin today. Follow her on Twitter for the latest on the trial.


Expanding to Asia can be difficult, but Singapore is here to help. The Singapore Economic Development Board's guide to setting up in Singapore has all the information you need to find the right partners, talent, and connections to succeed in Asia.

Learn More

People Are Talking

Investor Mark Mobius doesn't think El Salvador's bitcoin adoption is setting any trends:

  • "You don't need bitcoin, you don't need cryptocurrency."

On Protocol: Creators need a space in the metaverse, DNABLOCK's Anthony Kelani says:

  • "You can't have a Facebook or a game studio running the metaverse. It's not scalable."

REvil is back, and apparently so are the actors behind the ransomware gang, says Adam Meyers, VP of intelligence at CrowdStrike:

  • "There was a lot of heat back in June/July. Maybe they rebuilt some infrastructure and invested in better operational security."

The Pentagon has to work with tech on defense, Eric Schmidt says:

  • "The government is not prepared. There are so many examples where digital technology would completely change the way the systems work."

Making Moves

PayPal is buying Paidy for $2.7 billion. The deal should close by the end of the year, and gives PayPal a big player in the "buy now, pay later" market.

John Gibson resigned as Tripwire Interactive's headfollowing backlash for supporting the Texas anti-abortion law. Co-founder Alan Wilson will take his place.

Ford poached Apple exec Doug Field to be its chief advanced tech and embedded systems officer. Field last worked as VP of special projects at Apple, which was thought to include work on the company's car project.

Matt Gallatin is Stack Overflow's new CFO. Before joining the company, he was the finance chief at Reltio.

Avijit Sinha left Microsoft for Wind River, where he'll work as chief product officer. He worked at Microsoft for a couple decades, most recently serving as general manager for Azure Mobility.

Peder Ulander is heading to MongoDB as CMO. He previously worked at AWS as the head of enterprise and developer marketing.

Shannon Taylor is joining Intel as head of technology and manufacturing policy. She previously worked at the Information Technology Industry Council as SVP and senior counsel for government affairs.

In Other News

  • Orchestrating El Salvador's bitcoin economy takes an army of crypto firms, fintech startups and others. Among those companies are Bitso, the main service provider for the nation's digital wallet, and BitGo, which is reportedly providing security tech.
  • All the leaves are brown, and the iPhones will be Space Gray. "California streaming" is the tagline for Apple's Tuesday event, which will be held virtually. The company is expected to show off the next generation of iPhones, Apple Watches, AirPods and more.
  • Microsoft wants to be your go-to for news. The company is introducing a personalized news feed called Microsoft Start, which will aggregate content from news publications and cater it to readers' interests.
  • South Korea's app store bill raises a key question: Is it even worth setting up a payment system outside Apple and Google? Some app developers don't think so, saying it would be a pain to set up and get consumers to use a separate platform.
  • Facebook is giving $3 million to relief efforts in Afghanistan. The funds will support refugee resettlement and humanitarian aid in the country.
  • Joe Biden's going to need a lot more charging stations to meet his electric car goal, according to a report from The New York Times. The U.S. doesn't have nearly enough money or charging stations to reach his vision, and right now, electric car sales are too slow for charging companies to profit off creating more outlets.
  • Intel is making a big chip production push in Europe. The company is using a plant in Ireland to help make more chips, and it's looking to pour billions of dollars into the region to build new chip-making facilities.

One More Thing

What new tech is Bezos betting on?

It hasn't been too long since Jeff Bezos stepped back from Amazon. He did the space thing, his successor is getting settled in, and now he's a 57-year-old billionaire. What more could he want? To look younger, apparently.

Bezos is reportedly backing Altos Labs, a startup that's trying to figure out how to reverse the aging process. The company is pretty new: It was founded earlier this year, and it's hiring scientists with salaries of $1 million per year. It's not the first time Bezos has made this sort of investment, having invested in Unity Biotechnology in 2018. But if this new research gets anywhere, it could obviously be worth a lot of money. That's just a very big "if."


Expanding to Asia can be difficult, but Singapore is here to help. The Singapore Economic Development Board's guide to setting up in Singapore has all the information you need to find the right partners, talent, and connections to succeed in Asia.

Learn More

Refer Five Friends, Get A Mug

Are you tired of explaining the tech news of the day to your co-workers every morning? Let us do the heavy lifting and refer them to Source Code.

Send them your referral link via Slack, text, email, or carrier pigeon and we'll send you your very own Protocol mug after you refer five friends!

Your referral link:*|RH_REFLINK|*

Share on TwitterShare on LinkedInShare via email

Thoughts, questions, tips? Send them to, or our tips line, Enjoy your day, see you tomorrow.

Recent Issues

The best of Protocol

The confessions of SBF

Your holiday book list

A tale of two FTXs