Empty Promises .

If you drive on Highway 101 in the Bay Area, you will notice something curious while navigating traffic: most billboard signs advertise companies you’ve never heard of unless you are in “tech.” These companies range in size from billion-dollar behemoths to fledgling startups, but they share one thing in common: they are all, more or less, software companies.

This observation is the manifestation of a well-known fact: there is a glut of software companies in Silicon Valley — “software is eating the world,” as Marc Andressen famously said. However, there was once one shining counter-example in this sea of software: Theranos. Theranos — a portmanteau of “therapy” and “diagnosis” — was a blood-testing startup that wanted to solve a real problem in the world; unlike some others in the Valley, they were not a social media company that manipulated society through an algorithm and sold users’ data.

I’ve been fascinated with the Theranos story since listening to the podcast The Dropout. I suppose it’s because the story is so close to home: the founder, Elizabeth Holmes, dropped out of my alma mater, Stanford; her company was based in Palo Alto, where I live now; and, of course, as someone interested in medicine, Theranos’ promise to revolutionize medicine catches my eye.

To this end, I recently read Bad Blood by WSJ reporter John Carreyrou, which covers the rise and fall of Theranos. If you haven’t heard the story yet, here it is: Elizabeth Holmes, as a Stanford student, dreams of building a wearable patch that would deliver drugs with unheard-of dosage precision. She drops out to build a startup and charms investors into funding her idea. The wearable patch dream, however, turns out to be too intractable, and the company pivots into making a blood-testing machine that would diagnose diseases based on one drop of blood; this inspires the famous images of the turtle-neck clad founder holding up a tiny vial of blood.

Despite the efforts of the Valley’s smartest engineers, the backing of elder statesmen like George Schulz and Henry Kissinger, hundreds of million dollars of funding, and partnerships with Walgreens and Safeway, the technology was “vaporware,” to borrow a term from Silicon Valley. While Theranos claimed their revolutionary devices could run hundreds of lab tests, they ran most of them on commercially available lab equipment. The tests they ran on their devices were inaccurate, to the detriment of patients.

This revelation was made public by Carreyrou, who published the first major exposé of Theranos in 2015. The company’s fall from grace was swift and hard; in 2018, Theranos dissolved; and Holmes and once-boyfriend and number 2 executive Sunny Balwani received criminal indictments. Finally, this year, Holmes was convicted of wire fraud and conspiracy and was sentenced to 11 years in federal prison. Balwani received almost 13 years.

The Theranos story is disappointing for many reasons. To start, Elizabeth Holmes set back the advancement of female innovators. Fortune, in fact, named her one of the world’s most disappointing leaders. But the collapse of Theranos is a broader indictment of Silicon Valley entrepreneurship, satirized perfectly by the HBO series Silicon Valley. In the show, there is a scene at the TechCrunch Disrupt conference where startups end their presentation with promises to “make the world a better place,” no matter how esoteric or uninteresting their company is.

It is quite a shame that Theranos, the company that could have changed the world, failed. Today, it seems most successful companies in the Bay Area are software companies that are a marginal improvement over existing solutions. These companies claim to be making the world a better place, but like the billboards that feature their slogans, they are promises with nothing behind them.