Theranos founder Elizabeth Holmes
Photo: Justin Sullivan/Getty Images

Forget what you know about Theranos

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Good morning! This Thursday, Elizabeth Holmes’ trial is wrapping up, Apple is delaying its office reopening (again), and sure, we might be ready for the metaverse. But is the metaverse ready for us?

It’s complicated

Everyone thinks they know the story of Theranos. They’ve read the book, seen the documentaries, listened to the podcasts. It’s so high-profile that Apple last week bought the rights to a movie starring Jennifer Lawrence as Elizabeth Holmes. But, as her defense attorney Lance Wade previewed in his opening statement, “The reality of what happened at Theranos is far, far more complicated than what you’ve heard so far.”

Closing arguments will likely start today, with the jury likely beginning deliberations tomorrow at the earliest. (I say likely because in a four-month-long trial that’s been set back by a broken water main, a potential COVID exposure and a plodding judge, anything is possible.)

The prosecution focused more on what Holmes didn’t say, than what she did say. There wasn’t a single smoking gun email saying “let’s lie about our blood-testing devices,” but the prosecution was quick to point out when things didn’t add up or she didn’t disclose the truth. They also proved that Holmes knew a lot about what was going on at the company.

  • Holmes admitted she “didn’t think” she told Walgreens that Theranos was running into problems with its testing, despite multiple employees raising concerns. She also acknowledged that she never mentioned to investors that Theranos was using third-party machines and not its own proprietary devices.
  • Holmes said she added the logos of pharmaceutical companies Pfizer and Schering-Plough to reports Theranos wrote and presented them to investors, effectively making it look like the partners had signed off on the technology. (This was one thing Holmes said she wished she’d done differently.)
  • She also didn’t correct the record when a Fortune cover story said that the company didn’t use third-party devices and had a smaller footprint than a lab (both wrong). “At the time you were not worried people would be given an inaccurate impression?” prosecutor Robert Leach asked. “I was not,” Holmes said. Instead, the cover became part of an update sent to investors on the company’s progress.

But Holmes’ testimony showed a more vulnerable side to the powerful CEO, and it could be enough to make the jury feel sympathetic.

  • While Holmes had been composed and sitting ramrod straight in court every single day, she broke down crying in her testimony over the abuse she claimed to suffer from her ex-boyfriend, former president and COO Sunny Balwani (he’s denied it). Unlike the polished narrative she’d pitched to the press for years, Holmes said one of the real reasons she dropped out of Stanford was because she had been raped, and the company became a way to move past it. “I decided I was going to build a life by building this company,” she testified. (The prosecution is now trying to have this struck from evidence.)
  • A large part of her defense was to point the finger at Balwani, with whom she started a relationship shortly after she dropped out, and said she relied on as a trusted adviser. Going into the CMS lab inspection, she thought Theranos’ lab was “one of the best labs in the world” because Balwani, who oversaw the lab, told her it was. After the jury saw two different projections for 2015 — one that showed expected revenue as $113 million and another that showed it at $990 million — she pinned it on Balwani, who did a lot of the financial modeling.
  • Holmes insisted she was a true believer in Theranos and never sold a share of her stock in the company, that she “never” misled investors and “didn’t think” she gave them wrong information.

Whether Holmes will be found guilty or not guilty — or if a verdict will be reached at all — is the lingering question now. Jury trials are a toss-up, and this particular jury will be asked to deliberate over the holidays. Eliciting sympathy for wealthy investors who were allegedly defrauded by a college dropout is already a hard sell. Whatever the outcome is, a lot of the lessons of Theranos have already been learned. Now it’s just a question of consequences.

Biz Carson (email | twitter)


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People are talking

Commerce Secretary Gina Raimondo said universal broadband won’t roll out right away:

  • “It will take us years in order to get it all out the door effectively to achieve the vision of making sure every single American has high-speed, affordable broadband.”

Intel’s Raja Koduri thinks the metaverse will be big, but we don’t currently have the infrastructure to make it happen:

  • “Our computing, storage and networking infrastructure today is simply not enough to enable this vision.”

Stay interviews are all about retention and engagement, Relay Payments’ Amy Zimmerman said:

  • “Each strong candidate is getting pinged by five-plus recruiters a week. So how do you keep your company top of mind?”

Making moves

Katie Haun is leaving Andreessen Horowitz. Haun was a co-founder of a16z’s crypto funds and plans to start her own firm focused on crypto and Web3.

Reddit is going public. The company filed confidentially for an IPO, so we don't know much yet, but the r/WallStreetBets folks are already excited about making it the next great meme stock.

Neil Lindsay is now running all of Amazon's health efforts. He's been at the company for more than a decade, and has run Prime in the past, so his appointment is a big deal for the health team.

Hugo Barra now leads Detect, a COVID-19 testing startup. Barra was an exec at Google and more recently at Meta.

Megan Callahan joined Happify Health as COO. She was most recently the president of Lyft Healthcare.

Amrita Ahuja joined Airbnb’s board. Ahuja is Block’s CFO.

Zoom joined the Global Internet Forum to Counter Terrorism, a counterterrorism group. Meta, Microsoft, Twitter and YouTube founded the organization.

In other news

Apple isn’t sure when it’ll open up its offices. The original plan was to head back in February, but that's now off the table.

The government wants all the tech whistleblowers. The Consumer Financial Protection Bureau tweaked its reporting system for whistleblowers, and it’s particularly interested in learning about algorithms from fintech employees.

Apple’s page on child safety features is missing CSAM references. Mentions of the child safety detection that has concerned privacy experts were apparently removed, but the company said it’s still following through with the features.

Amazon faced another outage yesterday. It didn’t last as long this time, but still managed to bring down Twitch, DoorDash, Slack and others.

Trevor Milton wants his indictment charges tossed. The Nikola founder asked a judge to dismiss the charges accusing him of deceiving investors about company finances.

North America has its first gaming union. Indie developer Vodeo Games voluntarily recognized its own employee union, which covers a mix of independent contractors and full-time workers.

How social media celebrates 2021

We’ve already celebrated Spotify Wrapped, which shows how often we listen to the same artist, song and album. But other companies have put their own spin on the end-of-year recap through videos, photos and slideshows. Here’s how each platform sums up the year:

  • YouTube: YouTube kicked off an interactive event called Escape2021 today. You can play games, answer trivia questions about trends from 2021, and watch musical performances by artists like Doja Cat.
  • Snapchat: The app pieces together videos and photos saved to your Memories over the past year, and breaks them up by themes like furry friends and travel.
  • Instagram: You can create a Playback, which is a customized set of Instagram Stories posted throughout the year.
  • Facebook: You can also customize your year-end recap by creating a “Year Together” card, which compiles your top moments into a shareable card.


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