I recently finished watching a TV series called ‘The Dropout’ on Disney+.
This true story talks about the rise and fall of the MedTech Silicon Valley start-up ‘Theranos’.
Over the course of the series, we see the ups and downs that Elizabeth Homes goes through.
More importantly there are many valuable lessons that we can take from this incredible story:
The Dropout is a story of ambition, drive, and the goal of making the world a better place.
However, it is also a story of technology that was just too much ahead of its time.
As a result, it’s a story of fraud/deception: causing more harm to people than it did good.
In this blog, I talk about my key takeaways from The Dropout: the good, the bad, and the ugly.
Spoiler Alert: if you have not finished the series or you intend to watch, please don’t read on.
My hope is that we take the good lessons and stay away from the bad ones in our ventures.
Good: She had a Vision
Elizabeth Homes, founder of Theranos, was young when she knew what she wanted to do.
“I want to be a billionaire” is what she would often say to her friends and family.
She knew that in order to do so, she couldn’t be an employee, she had to build a business.
She looked up to a lot of successful entrepreneurs in the early 2000s, especially Steve Jobs.
It’s hard to say where this ambition stems from, maybe from the pressures from her family.
When joining Stanford University, she knew what she wanted to study: Chemical Engineering.
Rather than sticking to the status quo, she started to come up with ideas for a business.
When she finally came up with her idea, she was willing to drop out of university to pursue it.
It reminds of what Elon Musk says: “Take risks now and to do something bold”.
That’s exactly what she did: she dropped out of college and used her tuition to start Theranos.
Good: She was Persuasive
Holmes was not the most social person. In fact in The Dropout, she was quite awkward.
However, I was very surprised how good she was at getting people to see her vision.
What I admire about Holmes is that she was not a solopreneur as most people start off as.
From the very beginning, she was able to get a team of people behind her from the get go.
As time went on, she got more and more people to buy into her vision of helping people.
A part of this success was that people didn’t just believe in her vision, they believed in her.
When it came to investors, at first she struggled to build momentum, but she didn’t give up.
Eventually, she got some of the biggest venture capitalists in Silicon Valley to believe in her.
She had the right mentality from the start: she was only as good as the team behind her.
This is certainly one of the reasons Theranos grew so fast: she had a lot of people backing her.
Good: She never Gave Up
Holmes encountered a lot of challenges throughout the duration of running Theranos.
Afterall, she was only a teenager when she started a company, and a university dropout.
She didn’t have any professional experience, let alone the experience of running a company!
However, I was impressed by how she always overcame any challenges she encountered.
The most impressive moment was when her board wanted to kick her out as CEO.
This is actually quite common, when the board loses confidence in the leadership of a CEO.
Usually when this vote is taken, there’s not much you can do, other than call your lawyers.
However, Holmes didn’t give up, she was ready: she presented a counter offer to the board.
She said she found a COO who would give $20 million to the company if she remained CEO.
Well done Holmes: As soon as she made that offer, the board folded like a deck of cards.
Bad: Lying to People
This is where things start to take a wrong turn in The Dropout.
Although Holmes had many great qualities, she unfortunately had some flaws, as we all do.
When it was ‘demo day’, when she came to present the prototype, she knew it wouldn’t work.
However, rather than owning up to it, she lied to the investors, showing them that it ‘worked’.
I can see why she did it: Theranos was running out of money, she needed the investment.
However, that does not justify her actions, she should have been honest with them.
Unfortunately, the lying did not stop there, lying at Theranos continued on for years.
Investors, patients, and employees all thought that the technology was working fine.
When in reality, it was nowhere near working: but no one had any idea.
Eventually, the truth was revealed: Did she really expect that people would not find out?
Bad: Her Jealous Neighbour
To add fuel to the flame, in comes her spiteful neighbour: Dr Richard Fuisz.
This was quite unfortunate, as Elizabeth had done nothing wrong to Richard to upset him.
Richard was annoyed that she did not come to him for advice on starting her tech company.
Therefore in order to teach her a ‘lesson’, he filed a patent that she’d have to pay him for.
Its hard to say why Fuisz did this, after all she and her family were his neighbours.
Their families were close friends, they grew up together. It didn’t make any sense.
In this instance, I agree that Elizabeth probably did the right thing by suing him.
She filed a lawsuit against him where they settled, but they both walked away with nothing.
However from that point on, Fuisz made it his mission to take down Elizabeth and Theranos.
Unfortunately, this was easy due to all the lies and secrets that were happening at Theranos.
Bad: Treating Employees Disrespectfully
Throughout The Dropout, you see a lot of employees come and go. This seemed quite normal.
To quote the words of Sunny Balwani in the series: “Everyone is replaceable.”
I particularly felt bad for Stephen Fry’s character, Ian Gibbons, one of the early employees.
Ian had been at Theranos since the early days. He even got appointed Head of Chemistry.
Things started to go wrong from him when he was fired, just for asking too many questions.
He was eventually rehired when his colleagues wanted him back, but not to his former role.
He got even involved in the lawsuit between Holmes and Fuisz, because he knew the truth.
Sadly, the pressure became too much for him, which eventually led him to commit suicide.
I really hope that this part was made up. I cannot imagine work leading someone to do this.
I hope that this is a lesson to all employers: they need to take great care of all their employees.
Ugly: Technology Not Possible
Obviously Holmes was ambitious and wanted to help a lot of people, which was great.
However the technology she was proposing was just not possible, at least not for years.
At no point did she say “You know what, we should really wait before we keep selling these.”
On the contrary, she kept making deals with the biggest retail stores throughout the USA!
What’s surprising about this story is that no one picked up on the impossibility of this tech.
Had it not been for a few whistle-blowers from the company, we would have never known.
What made it worse was that she started using other companies’ technology as her own.
He would take the blood samples from patients, and carry out the tests on their machines.
I can understand why she was doing this: she was in too deep at that point, she had no choice.
It’s just crazy to think that in this day and age, people can actually get away with such actions.
Ugly: Harming a lot of People
This is where things start to get out of hand and just completely unethical in The Dropout.
Theranos was a MedTech company, which meant actual human patients were involved.
Patients were using her Edison devices to carry out what they believed to be real ‘blood tests’.
These are people’s lives we are talking about, people’s actual health were on the line.
Holmes’ goal was to make the world a better place by carrying tests with just a drop of blood.
But if that goal is not being met, then shouldn’t you stop and try something else?
People were receiving false information from these tests because they were not accurate.
That meant peoples lives’ were at risk because of the inadequate technology of the company.
Holmes and Theranos had set out to improve the lives of millions of people around the world.
In the end, Theranos actually ended up giving inaccurate health info to thousands of people.
Ugly: Poor Sunny
Sunny Balwani, Theranos’ COO and Holmes’ partner, had been there from the start.
He had been there ever since they first met each other while spending a summer in China.
Now, there was quite a big age difference between, not sure how big of a difference exactly.
But that did not prevent their love from blossoming together. Or so we thought.
Balwani saved Holmes as CEO with his money and kept all her secrets from the public.
But when the secrets were revealed, Holmes wasted no time in throwing him under the bus.
From the series, it was clear that Balwani loved Holmes, but I can’t say if she felt the same.
Maybe the fact that she never told anyone that they were together was an obvious sign.
By the end of the series, Holmes is with a new partner and Balwani is left with a big lawsuit.
It’s clear that, had Balwani not involved himself with Holmes, he would have been better off.
Final Thoughts
What a story – The Dropout is based on actual events. It’s hard to fathom that this all happened.
I love the fact that Holmes took a risk, dropped out of Stanford, and started a big company.
I also love the fact that she was able to do so much at such a young age. It blows my mind.
But I hate the fact that she had no moral compass, and was willing to do anything to succeed.
It’s disappointing because she was seen as strong female role model for future entrepreneurs.
Not surprisingly, now she’s regarded one of the most disappointing leaders of our generation.
Let us learn from her great traits: he ambition, leadership and vision to make the world better.
Let us learn from her mistakes also: Secrets, lying and deception will eventually be found out.
I hope you have enjoyed reading this week’s blog about What can we Learn from The Dropout.
If you enjoyed reading, check out my other blog: The Best way to Buy a Car in the UK.
If you have any suggestions for future blog topics, please share in the comments below!
