Elizabeth Holmes had all it takes to be the next Steve Jobs. She was a top school dropout, was very persuasive, and wore a Miyake turtleneck. She even called her revolutionary blood-testing system "the iPod of health care."
Presented as a trailblazing health technology company, Holmes' company "Theranos" claimed to have engineered blood tests that required only very small amounts of blood and could be performed swiftly via tiny, intelligent devices the company had put forward.
Theranos' exaggerated claims attracted venture capitalists and private investors, who invested more than US$ 700 million in the company. This, in turn, impacted the company's valuation which reached US$ 10 billion at its peak. However, when the veracity of Theranos' claims came under question, the company was exposed in 2015 as a hapless "fake it till you make it."
Elizabeth Holmes often echoed Gandhi's idiom: "First they think you're crazy, then they fight you, then all of a sudden, you change the world." Perhaps, she did not change the world, but she changed the atmosphere surrounding women's leadership in Silicon Valley.
Julia Cheek, the CEO and founder of EverlyWell, shares that her at-home health testing start-up is often confused with Theranos. Moreover, she got advice to dye her hair in different colours to minimize any resemblance with Holmes. Similarly, Heather Bowerman, founder of DotLab, is frequently asked by investors about the difference between her test, defining endometriosis, and the disgraced blood-testing by Theranos.
Other women in different fields were also impacted. While completely different from Holmes's blood-testing concept, Alice Zhang's start-up-Verge Genomics, suffered from unwarranted comparisons with Holmes. During an event at Stanford University, the organizers asked her to talk about Theranos. Subsequently, some participants joked about Holmes, which ruined the evening for Zhang's start-up.
In 2017, another college dropout, Billy McFarland, became famous as the organizer of the Fyre Festival. The musical fiasco ended with thousands of people scammed and pictures of dreary tents and lonely portable toilets in the Bahamas. This scam did not affect men's image in the industry, nor did any man change his hairstyle as a result.
As the Pygmalion effect says, expectations shape reality. Women who already face a high bar in the tech industry's male-dominated world have much more to prove after the Theranos fraud. Oddly enough, Holmes' fall from grace seems to validate the belief that women do not belong there.
I get it, Elizabeth Holmes
In an essay, Beth Esponette, co-founder of Unspun, points out how the total focus on Holmes entirely ignores the biased system that played a part in her creation. No one condones her fraud, but her story hints that something is wrong with the system.
Silicon Valley is not a friendly environment for young female entrepreneurs. In the past 30 years, the average of all female founders' share of venture capital (V.C.) funding in the US is only 2 percent. Similarly, in Silicon Valley in 2019, start-ups founded only by women represented merely 5.2 per cent of all the V.C. funding. Moreover, all-female-founded teams get the solely 1.9 percent share of the market.
While some would think that it is not about gender, but qualification and pedigree, a study conducted by researchers at Lulea University debunked this myth. This research revealed that gender biases influence venture capitalists' descriptions of entrepreneurs. Men are "young and promising"; on the other hand, women are "young but inexperienced." Men are "aggressive but really good entrepreneurs," while women are "enthusiastic, but weak." As a result, 62 percent of male applications are accepted, compared to 47 percent of females.
Another research shows that venture capitalists prefer different types of questions for female and male entrepreneurs. Men are asked, "What is the brand vision?" while women are questioned, "Are you planning to Turing test this?". In short, 66 percent of men answer promotion-oriented questions while 67 percent of women receive prevention-oriented questions.
Painted with the same brush
The ratio of managerial positions is also not encouraging. Only 12 percent of the CEOs in Silicon Valley are women. According to Marianne Cooper, a sociologist at Stanford University, that number represents the real problem. They are so few to make it. Therefore, their failures feed stereotypes. That is why when they fail, it is not simply individual. Every setback reinforces the wrong impression that women are fated to lose whenever they leave their traditional roles.
Trapped in the Pygmalion effect, Females are a minority in tech. Thus, their faults are more noticeable. Subsequently, due to the combination of bias and scandals such as Theranos, they are given fewer chances, get less V.C. funding, and have to prove themselves much more.
Once upon a time, Elizabeth Holmes was featured among Time's most influential people. She was also Glamour's woman of the year and was a panellist alongside Bill Clinton. However, these days, Holmes is fighting to avoid 20 years in prison.
While her success did not represent a feminist victory as she only used gender issues selectively. She was not a feminist, but she conveyed the image of a successful young corporate female leader with a distinguished network. Within this context, her journey appealed more to White feminism, i.e., to succeed within the ongoing structural framework, not to change it.
All in all, Holmes' scandal should not be a burden to be shared by all women. Her story should not be used as a justification to side-line the next generation of women with good ideas.