I have a confession to make: I am a Theranos obsessive, one of the legions of people finding morbid fascination in the extraordinary, dramatic rise and ignominious crash to earth of a Silicon Valley blood-testing startup and its CEO, recently convicted of fraud in a California court and awaiting sentencing. The Theranos story is a tale of faith in technology, the triumph of optimism over evidence, and a large dose of investor FOMO. As modern-day morality tales go, Theranos has a lot to offer, and I imagine the books, case studies and fascinating podcast series it has already spawned are just getting started.
The oversimplified story is that Theranos set out to overturn the medical-testing industry by offering the possibility to run hundreds of tests from one tiny sample of blood taken from a finger-prick. It promised revolutionary technology, at lower cost, faster and easier than the traditional methods, and an end to being stuck with big needles.
Ultimately, Theranos was undone by one simple fact: it didn’t work. By the time its chickens came home to roost, investors had put nearly $1billion into the company, while the deals struck by US retail giants Safeway and Walgreens to bring Theranos testing to a mass American market turned out to be pie in the sky. Perhaps with hindsight, it seems too good to be true.
While unfortunate, these events are common in the history of Silicon Valley’s tech entrepreneurs. There is even a term for non-existent software that thrives in the market despite the fact: vapourware. Technology empires have been built out of it, and ‘fake it until you make it’ has become accepted wisdom in the sector. Theranos founder and CEO Elizabeth Holmes is said to have inhabited a version Steve Jobs’ infamous Reality Distortion Field, a product of hype, marketing, persistence and personal charisma that Jobs deployed to push past and eventually win over the developers who told him his vision for the Macintosh simply couldn’t be done.
News coverage and analysis during Holmes’s trial frequently pointed to this culture, suggesting that ‘fake it until you make it’ itself was in the dock – and that an acquittal would have the power to unleash its worst excesses, while a guilty verdict might prompt some overdue soul-searching within the industry. Time will tell.
Selling a vision is essential to the entrepreneur, and can unlock the excitement that drives investment, commitment, connections and capability to make the vision a reality. But there is more to the impact of technology than the very best vision of what it might become one day, and when people’s lives and the health of the planet are in the balance, we forget this at our peril.
It’s one thing to overstate the situation in relation to a new operating system, or a social media app. It’s another altogether when lives are at stake. In the Theranos case, patients made life-altering medical decisions on the basis of faulty and unreliable test results – of which they had no knowledge at the time, so couldn’t even choose to be willing beta-testers for the company’s vaunted technology.
In a similar vein, let us not forget that the fate of the planet, its life-support systems and its people hangs in the balance every day. We must act urgently. Inevitably, this means we need entrepreneurs, inventors and investors to take risks, to back the bold visions and to trust that new technologies will succeed where old ones have failed.
Nevertheless, and indeed more importantly, sustainable industries and systems won’t come about as the result of vision and hype alone, nor will good intentions compensate for ineffectiveness. Dairy alternative giant Oatly found itself on the receiving end of the attentions of an activist hedge fund last year, in part because of claims the company had overstated the climate benefit of its oat milk products and failed to update its environmental impact models following global expansion. The investor may have been motivated to act because of perceived financial risk, but bad-faith overblown environmental claims (a charge which Oatly denies) are of precisely no benefit to the earth or society and give sustainable business a bad name.
A technology is only innovative if it actually works. A decades-long dream of cold fusion is essentially no closer to solving our clean energy needs now than it was in the 1950s. Innovative business models such as app-enabled platform work hold the promise of freedom and self-determination, but instances abound today of workers discriminated against and exploited by algorithms, problems that cannot be dismissed as growing pains. And while we would benefit greatly from widespread carbon capture and storage technology, experts today debate at length whether it is viable, and at what cost. We cannot afford to wait for the ship of technological solutions to come in eventually; the pier will have long since washed away.
I am not advocating against these and other technological advances – far from it. We need these solutions and more, in abundance, at scale, around the world, and quickly. But it is vital to ask the basic questions and insist on transparent answers, even as we apply a healthy scepticism to them. By all means, let us have confidence in ingenuity and innovation, but not blind faith in magic wands.
And perhaps there is an equally valuable message for the sustainability innovator and the ESG investor in the Theranos tragedy: embrace the sceptics, and engage with their doubts. Questions arise precisely because the work of sustainability is so important. When the stakes are this high, no one can afford to fake it.
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