photo by Weston Bury
photo by Weston Bury

Sundance 2019

Alex Gibney Unpacks the Culture of Secrecy at Theranos

By Allie Waxman

At the world premiere of his investigative documentary, The Inventor: Out for Blood in Silicon Valley, the Academy Award-winning director explained how Theranos CEO Elizabeth Holmes set out to change the world — and ended up committing a massive medical fraud.

The story of good intentions gone awry, The Inventor: Out for Blood in Silicon Valley is a cautionary tale about the how the culture of Silicon Valley breeds secrecy, encourages evangelism and fosters fraud. Following the film’s world premiere at the 2019 Sundance Film Festival, director Alex Gibney was joined by whistleblowers Erika Cheung, Tyler Shultz, and Patrick O’Neill; and investigative journalist John Carreyrou to discuss how Holmes’ blood testing fantasy turned into a corporate nightmare that put lives at risk. Here are the takeaways:

Holmes didn’t set out to commit a massive fraud.

“I never thought she was Bernie Madoff,” stated Gibney, emphasizing that Holmes’ fraud didn’t begin as a self-serving scam. According to the director, the problems with Theranos arose from Holmes’ ability to fool herself into believing her wrong means were justified. “She had a noble vision,” Gibney noted, “which is part of why she was able to lie so effectively.”

“Fake it ’til you make it” is Silicon Valley’s unofficial motto.

According to Carreyrou, the “fake it ’til you make it” mentality has been embedded into the DNA of Silicon Valley for decades — even Thomas Edison conformed. Holmes, operating within this unofficial playbook built on lies, might have gotten away with her fraud had her technology not been a medical device.

“She lost sight of the fact that her product was not hardware and software,” asserted Carreyrou. “It was a medical device from which people would be making life-and-death decisions. The stakes in health care are so much larger.”

Employees Tyler Shultz and Erika Cheung weren’t the only ones who sensed the tech was fake.

“A lot of us had discussed that things were going wrong,” admitted Cheung, who noted a turning point in office chatter in 2013, when the company began testing patient samples, and the consequences for patients became clear. Cheung, who worked in a separate department from Shultz, claimed the two were kept further apart once Theranos’ leadership realized employees across teams were connecting the dots that “things were going wrong on all levels.”

Shultz, who spoke about the cultural difference between the labs and the rest of the company, addressed the fact that the panic in the labs went unnoticed in the non-technical parts of the company where Holmes was still heralded as a brilliant inventor. Although everything was running smoothly above the surface, senior lab directors were resorting to humor to cope with the faulty tech: “It was an inside joke amongst the scientists that [the Edison] did not work.”

© 2019 Sundance Institute | photo by Weston Bury.