Elizabeth Holmes: Theranos scandal has more to it than just toxic Silicon Valley culture

The ‘dropout entrepreneur’

From business heroes including Bill Gates, Steve Jobs and Mark Zuckerberg to pop-culture icons such as Kanye West, “dropout entrepreneurs” are the latest formation of an ideal that can be traced back to the US in the mid-19th century. This was a time when the US was transitioning from a largely agricultural economy to an emerging industrial and market-based one.

It was during this time that the notion of the “self-made” person became associated with material success rather than the concern for civil good or moral character. Central to this idea was a “rags-to-riches” story which measured an individual’s success against the ideals of self-reliance and hard work.

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In recent years, this narrative has become central to the trend in bright students dropping out of college and foregoing the promise of secure employment to instead make their own way in the world. In this way, by dropping out of Stanford, Holmes was conforming to a mythical archetype of our age, of which the late Steve Jobs thought of as the embodiment.

‘The Apple of healthcare’

A key aspect of the Theranos story is the fact that as the world’s youngest female billionaire, Holmes was heralded as being “the next Steve Jobs”. This association was embraced by Holmes, who made concerted efforts to style herself on Jobs’ public persona. She wore black turtlenecks, recruited Apple employees and, crucially, aligned her own story to the fact that she dropped out from university to pursue her dream.

Her narrative from “dropout” to “self-made billionaire” is all the more fascinating in relation to the wider myth of entrepreneurial success, because the university she dropped out from was the one which Steve Jobs gave his inspiring Graduation Commencement Address in June 2005. The speech emphasised triumph over adversity and doing what you love:

Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.“

When the suggestion of fraud was first reported in a Wall Street Journal article in 2015, Holmes responded publicly by paraphrasing Apple’s famous 1997 ”Think Different“ campaign, stating: “This is what happens when you work to change things. First they think you’re crazy, then they fight you, then you change the world.”

This response says as much about Holmes’ belief in the myth to which she was conforming as it does the culture in which she was operating. And, in this way, Holmes’ self-styled eccentricities can be seen as a desperate attempt to be “a round peg in a square hole”.

The risk of perpetuating the myth

Most reports on this story frame Holmes as disillusioned – a fraudster, or a calculated psychopath. But this simply runs the risk of mythologising Holmes and her narrative further.

By calling her “crazy” we risk playing in to the very narrative on which her initial success and fraudulent claims were based. In 2015, Holmes’ self-belief and ambition were unwavering when she told the Forbes 30 Under 30 Summit:

You’ll get knocked down over and over and over again, and you get back up… I’ve been knocked down a lot, and it became really clear that this was what I wanted to do, and I would start this company over 10,000 times if I had to.

To say we must reject the “fake it till you make it” culture of which Holmes’ narrative has become so central a part, is simply too easy. Despite it going some way to explain the climate in which the fraud could take place, there will always be an element of speculation and risk in any entrepreneur’s pitch to acquire capital.

And with Silicon Valley’s culture being premised on a spirit of nonconformity and anti-regulation, calls for regulation and change will only perpetuate more of the aggressive self-belief and blind ambition that Holmes’ narrative represents.

Peter Watt, Senior Lecturer in Management and Organisation, York St John University