A CROWD of reporters and Hollywood types, drawn by the drama and glamour of the event, are likely to jostle to find a seat in a courtroom in San Jose on August 31st for what may be the next, perilous act for a woman once touted as the next Steve Jobs and the world’s youngest self-made female billionaire. Jury selection will begin for the fraud trial of Elizabeth Holmes, the former chief executive of Theranos, a startup which attempted to revolutionise the process of blood testing but failed spectacularly in 2016 after the press and regulators probed the company’s inflated claims.
These sorts of cases usually hinge on subtle distinctions between exaggeration and outright deceit and whether such deceit was intentional. But the legal intricacies may take second place to theatrics. Will Ms Holmes take the stand in her own defence, a move fraught with risk under the spotlight of cross-examination? Will she claim “coercive control” by her second-in-command at Theranos, Ramesh “Sunny” Balwani, with whom she had an “abusive intimate-partner relationship”, according to a filing by Ms Holmes’s lawyer ordered for release by a judge on August 26th? Mr Balwani will be tried separately in January; he has denied Ms Holmes’s claims.
But first will come the question of whether any juror can be found in Silicon Valley without preconceptions of guilt. Around half of the potential pool has acknowledged exposure to press coverage of the case. That is hardly a surprise. The story of Ms Holmes, who founded the company in 2003 as a 19-year-old university dropout, is an epic of Valley hubris. She brought glamour and charisma to the corporate world, adorning magazine covers as the subject of flattering features within. Her relentless promotion of her firm’s potential led to a valuation of $9bn in 2015 before its spectacular demise. The firms’ investors ignored its flawed financial performance and the dubious quality of the device it was developing, and were drawn instead by the company’s idealistic goal of making testing cheap, easy and ubiquitous.
The attention lavished on Theranos seemed justified for a time. In 2015, Joe Biden, then America’s vice-president, called Theranos, “the laboratory of the future”. The company’s board included two former secretaries of state (George Schultz and Henry Kissinger), two of defence (James Mattis and William Perry), a former head of the Centres for Disease Control and David Boies, perhaps the country’s most famous lawyer. Two huge American companies, Safeway and Walgreens, agreed to distribute Ms Holmes’s products. The awareness grew with the company’s abrupt failure in 2016. Multiple books and television documentaries shone more light on Ms Holmes.
A TV mini-series and a film is now reportedly in the works. ABC News will bring back a popular podcast about Ms Holmes that will focus on the trial. In many ways, such coverage is not justified by the facts of the case. Ms Holmes and Mr Balwani are accused of lying to investors, patients and doctors about the effectiveness of Theranos’s tests. But Silicon Valley’s venture capitalists are well used to over-hyped plans, though most never see the light of day. Failure rates among tech startups are high, though most do not lose as much as the $700m or so that had been invested in Theranos.
The buzz over Theranos stems from more than money. Because it was involved in health care rather than, say, enterprise software or co-working facilities, any mistake could have had catastrophic consequences for a patient. The inability of Theranos to deliver on its promises was also a disappointment to those who had seen it as a way for science to improve lives. Most controversially, the case resonates because Ms Holmes looked like a woman succeeding in a male-dominated world. Her failure, say some female company founders in Silicon Valley, has made life tougher. The issue will become more prominent if Ms Holmes is convicted and sentenced to jail as in July she gave birth to her first child. That could make for a mini-series with a heart-rending finale.