Lecture Notes: The Rise of Elizabeth Holmes and Theranos

Introduction

• Year: 2009
• Key Figure: Elizabeth Holmes
• Company Age: 6 years
• Location: New office in Palo Alto
• Economic Context: National recession, 6.2 million jobs lost, companies struggling

Key Players

• Elizabeth Holmes: Founder of Theranos
• Sunny Balwani: Key supporter, multi-millionaire, provided $13 million personal loan
  • No medical credentials
  • Had a significant influence in Theranos

Early Challenges and Strategies

• Despite economic downturn, Holmes had Sunny Balwani as an ally
• Balwani brought a ruthless management style
• Theranos's mission was seen as revolutionary

Strategic Moves and Partnerships

• Year: Early 2010
• Major Partnership: Walgreens
  • Objective: Use Theranos technology in-store for blood tests
  • Walgreens believed Theranos technology was validated and consumer-ready
  • $140 million deal secured

Public Launch and Media Attention

• Year: 2013
• Event: Opening of Theranos Wellness Center in a Walgreens in Palo Alto, California
• Marketing Campaign: Directed by Errol Morris
• Elizabeth's Public Image: Positioned as a visionary in health information

Rise to Prominence

• Year: June 2014
• Feature: Profiled in Fortune Magazine
  • Claimed 200 blood tests without syringes
  • Technology specifics kept as trade secrets
• Media Coverage: Frequent appearances, praised as influential
• Influence: Featured in Time Magazine's 100 most influential people

Board of Directors

• Prominent Members:
  • George Shultz (former Secretary of State)
  • Bill Frist
  • Admiral Gary Roughead
  • Henry Kissinger
• Observation: Predominantly older, influential men
• Significance: Attracted attention and credibility

Investments and Valuation

• Year: 2014
• Company Valuation: $9 billion
• Notable Investors:
  • Walmart founders: $150 million
  • Rupert Murdoch: $125 million
  • DeVos family: $100 million
• Investor Sentiment: Trusted due to connections and endorsements

Skepticism and Secrecy

• Concerns:
  • Lack of transparency with technology
  • Restricted access to company operations

Summary

• Elizabeth Holmes and Theranos rose to fame with a bold mission and strategic partnerships.
• Despite skepticism, they secured high-profile investments and media coverage.
• The credibility was largely built on influential connections and persuasive storytelling.