The Inventor Documentary Tells the Story of the Colossal Fraud of Elizabeth Holmes and Theranos

Photo of Elizabeth Holmes, courtesy of HBO

“The Inventor: Out for Blood in Silicon Valley,” is a story about storytelling, said its Academy Award Winning Director Alex Gibney.

The documentary is about how a couple of veteran journalists got fooled along with a lot of investors into believing Elizabeth Holmes just might be the next Steve Jobs or Bill Gates.

Instead, Holmes, an attractive and charismatic entrepreneur who favored black turtlenecks and black pants, took the fake it till you make it mantra of Silicon Valley a bit too far and faked test results, lied to reporters, regulators and investors, and committed fraud on a massive scale.

The HBO documentary premiered at the Sundance Film Festival. But a screening of the film took place Friday night to a sold-out crowd at the Atom Theatre at South by Southwest.

Gibney also directed “Enron: The Smartest Guys in the Room,” and HBO’s Emmy-winning “Going Clear: Scientology and the Prison of Belief.”

The documentary does a great job of laying out Holmes’ vision in her own words. The film kicks off with her proclaiming she doesn’t have many secrets. Theranos had a culture of secrecy, according to the documentary.

Holmes granted lots of interviews and spoke before TED and medical conferences and before lawmakers to promote her technology. And Theranos recorded quite a few internal talks and company meetings and parties too, which Gibney was able to obtain 100 hours of footage shot inside the company and use some of it in the documentary.

“That’s where suddenly we were able not to tell the story from the outside in but from the inside out,” Gibney said.

The idea for Theranos began in 2003 when Holmes, then just 19, and a student at Stanford founded a company that was going to revolutionize healthcare. She dropped out of Stanford the following year to work on it full time.

Theranos promised to disrupt the blood testing industry. It wanted people to be able to give a small sample of blood from a finger prick and test it for 200 different diseases. That would replace the legacy method of blood testing involving a venous blood collection with a long needle and several tubes of blood. And behind it all was Theranos’ printer-sized machine, called Edison, named after Inventor Thomas Edison, that could perform all the tests with just a tiny, bullet-sized sample of blood.

By 2014, Holmes had raised more than $400 million, valuing Theranos at $9 billion, and making Holmes the youngest self-made billionaire in the world, according to a Fortune article. Fortune put her on the cover of its magazine with a title that said, “This CEO is Out for Blood,” by Roger Parloff.

Another article followed by Ken Auletta called “Blood, Simpler” in the New Yorker. But Auletta’s article was a bit more skeptical of Theranos and Holmes and that caught the eye of Wall Street Journal Investigative Reporter John Carreyrou. He also got an inside source to provide him with information about how Theranos was defrauding investors and potentially harming people with incorrect and faulty blood test results.

Theranos lawyers found out the source of the leaked information and went after him with a cease and desist order and a threat of lawsuit for sharing trade secrets. But another whistleblower came forward and filed a complaint with the U.S. Food and Drug Administration that eventually got the Theranos lab shut down.

Today, Theranos is worthless, the company shut down last September. Holmes reached a settlement for lying and making false statements with the U.S. Securities and Exchange Commission, according to the New York Times. But then she was indicted on criminal charges and is awaiting trial, according to the New York Times.

The movie ends with the song “Can’t Touch This” by M.C. Hammer. It is the same song Holmes played and danced to with other company executives during a company party. Other moments in the film show Holmes in talks with Ramesh “Sunny” Balwani, Theranos’ former president and chief operating officer, and Holmes’ former boyfriend.

One of the lessons of the film is to beware of arguments that tout the ends justifies the means, Gibney said. Police are aware of this – they call it noble cause corruption, he said.

Another lesson is to get the facts and don’t believe things that are too good to be true.

“A lot of what this story is about is how compelled we all are in emotional terms by stories that we want to like – the journalists were part of that, but the investors were part of that too,” Gibney said.