Noblesse Oblige: Thicker than Water

A useful postscript to my reading of Bad Blood and my blog posts about the podcast The Dropout, both of which examined the Elizabeth Holmes/Theranos story, is Tyler Shultz’s new Audible podcast, Thicker Than Water


Shultz is, of course, the grandson of George Shultz and the whistleblower who began the process of exposing the lies and misrepresentations behind Holmes and Theranos.


In much the same way that my most pressing question about Holmes and her company was “How could anyone do this?” my most pressing question about Tyler Shultz when I encountered him in Carreyrou’s book and The Dropout was, “How did he do this?” Among the many people who knew, should have known, or seem to have known how badly Theranos’s technology was failing and how boldly Holmes was lying about it, how is it that Tyler Shultz was the one who decided he had to do something?


Shultz’s podcast, I think, provides some helpful answers. He’s clearly a smart and charming young man, who has led a life as protected by as much privilege as any American can hope for. I don’t mean that he’s part of some incredibly wealthy, hard-partying jet-set. I just mean that he’s the youngest generation of a famous family, who attended good schools, got good internships, and was brought up with the understanding that his opinions matter and that what happens to him is worthy of note.


He could be annoying if he weren’t clearly such a good guy (and I do confess to eye rolling over a few self-indulgent moments in the podcast). But one of the things we don’t talk about when we talk about the problems caused by inherited privilege is that, sometimes, it can have a good side.


Tyler Shultz is fairly clear that he got his internship with Theranos because his grandfather is George Shultz. But it’s equally apparent that the sense of his own significance and the assumption that he would be listened to and taken seriously are part of what allowed him to turn Theranos in. 


The heart-breaking part of the podcast is hearing Shultz talk about his realization that, somehow, his grandfather’s loyalties had switched to Holmes and to Theranos, and away from his grandson. He still sounds baffled when he mentions she was invited to family parties from which he was excluded. And the pain in his voice is unforgettable when he discusses the ways his grandfather pressured him to retract his statements about Theranos despite mounting evidence that he was right about the company’s lies. Shultz’s decision to do the right thing was clearly agonizing, yet he stuck to it.


It’s easy to be dismissive of young white men who have easy roads to travel in their lives. There are probably some good reasons for it, too. But the Thicker Than Water podcast will remind you that there is always more to people that we initially think. Just as the world’s first impressions of Elizabeth Holmes’s as a technological wunderkind turned out to be hopelessly, painfully, mistaken, my first impression of Tyler Shultz as “just another one of those kids who wanders into class late, unprepared, and hungover, wearing Nike slides and a ball cap” was mistaken.


Underneath the soft sheen of his privilege, Tyler Shultz is a man to respect, and one whose insistence on sticking to his principles has done more for market tested innovation than Elizabeth Holmes and her former company ever did.


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The Bloodbath:The Dropout, Episodes 5 and 6

Part 3 of a #ReadWithMe Series

Read the earlier posts here and here.

By 2016, Holmes and Balwani had broken up, and he was leaving the company. Carreyrou’s series of articles about Theranos’s unreliable technology had been published in the Wall Street Journal. And yet, many of Elizabeth’s early investors, like Tim Draper, still defended her unreservedly as someone who is “doing a great thing for humanity” and “changing healthcare as we know it.” Channing Robertson, her early supporter at Stanford, also remained a strong supporter, though the podcast notes that there may be pecuniary reasons for that, as Robertson was paid about $500,000 annually by Theranos.


In June, 2016, the deal with Walgreens fell apart and Walgreens sued for $140 million. The suit was settled, but more suits seemed to crop up every day. And regulators were now saying that Theranos’s technology was so unreliable it posed an “immediate risk” to patient health and safety. Theranos now came under investigation by the SEC.


The Dropout does an amazing job of highlighting the contrast between Holmes’s confident, in-control, and authoritative demeanor in interviews, with her answers in her deposition to the SEC, where she responded to their questions with “I don’t know” and “I don’t remember” more than 600 times. Again, the podcast lets us hear the shakiness of her answers as she tries to evade and avoid. 


There’s enormous satisfaction in this fifth episode of The Dropout. Finally, someone is asking the right questions, and not letting Holmes’s standard answers pass without scrutiny. Finally, we hear Holmes faced with her claims and with the pile of evidence against them. The podcast notes that it seems that for Holmes “There was no distance between aspiration and reality.” Because she wanted the machines to work, she claimed that they did.


It’s a good way to get charged with fraud by the SEC. And that’s exactly what happened. Balwani pled not guilty. Holmes settled. And then the Department of Justice brought criminal charges.


As of now, the trial of Elizabeth Holmes–who pled not guilty to these charges as well–is still pending. It has been rescheduled several times, and on August 12, 2020, the trial date was set for March 9, 2021.


The last half of episode 5 and most of episode 6 of The Dropout are dedicated to trying to humanize Holmes and Balwani. I found this fairly unpersuasive, though I do understand the need to present something like an unbiased account. But details of Balwani’s father’s early death, or Holmes’s struggles as a dedicated but completely unsuccessful high school track athlete seem like so much weak tea in response to the collapse of their claims and their misleading of the public and the medical community for years.


And at the end of The Dropout we are still left without answers to our most important questions. Was Theranos a failure or was it a fraud? Is Elizabeth Holmes an innovator and entrepreneur whose idea just didn’t pan out, or is she a con artist? And how can we ever really know?

Her upcoming court case may give us some answers, but given the many difficulties of establishing intent to defraud in the ever-churning world of startups, I don’t hold out much hope for a definitive answer.


One more iteration of the story of what happened at Theranos, however, did give me a few answers to some other questions I had. Stay tuned for a final, quick post on Tyler Shultz’s podcast, Thicker Than Water.



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