Inventing Innovation in Silicon Valley

It’s time we reconsider our definition of “disruption.”

by Frances Mize | 4/4/19 2:00am

A new HBO documentary “The Inventor: Out for Blood in Silicon Valley” chronicles the rise and demise of Theranos, a health-tech company that claimed to have designed blood tests requiring a very small amount of blood. Its inexpensive tests could, it claimed, be administered and analyzed without a physician or a lab, thereby bringing healthcare closer to the consumer. Theranos received endorsements from a series of influential figures, including former U.S. Secretary of Defense James Mattis, former U.S. Secretary of State George Shultz and media mogul Rupert Murdoch. The company’s peak valuation reached $9 billion. But in 2015, its technological claims were revealed as false. By 2016, Forbes estimated the net worth of Theranos founder Elizabeth Holmes at virtually nothing. Her company was a scam.

The Bay Area, including Silicon Valley and San Francisco, receives nearly 45 percent of all venture capital investment in the United States and has long stood as a bastion of technological development. Prominent figures in Silicon Valley often speak of a spirit of “disruption” — a term to which many in the industry quickly attached themselves following the Great Recession. “Disruption” came to stand for cheaper, simpler products that undercut the success of those larger competitors deemed as the elites. Under the sway of Silicon Valley’s massive public influence, this “disruption” became synonymous with innovation. Of course, most companies did not pursue Theranos’ model of fraud; however, the Theranos case should make us question the “disruption” mentality that blinded observers to the company’s fraudulent practices. 

The pursuit of “disruption” grows more concerning as Silicon Valley expands its focus into the world of medical technology. Here, the pursuit of the “disruptive” ideal of cheaper and simpler products becomes more difficult, and more dangerous, to create. Medical products affect human health, and a culture of innovation alone cannot ensure their success. A charismatic personality is not enough to ensure safety, and neither is cultivating high-tech corporate jargon. Holmes dropped out of college and had no legitimate scientific or medical credentials, yet she still convinced a cadre of elite investors to support a product that was never proven to work. When a set of traits becomes so aligned with progress, might someone present that aesthetic as separate from any real advancement? In adopting a kind of Silicon Valley-ness devoid of any real foundation in technology, Holmes seems to have done just that. 

Holmes based Theranos in a glass-paned headquarters in Palo Alto’s Stanford Research Park, next door to tech companies like Tesla Motors and Hewlett-Packard. She pushed her story as a 19-year-old Stanford dropout, a scrappy young revolutionary out to change the world. Playing into the cultivated image of the “disruptor,” she publicized her idiosyncrasies — the same black Steve Jobs-style turtleneck every day, only leaving the office to sleep four hours a night — and used these indicators, not actual data, to support the validity of her product. Lacking a functioning product, Theranos had nothing more than the image of the “disruptor.” And disturbingly, for a while, this proved enough to succeed.

Holmes’ story and the Theranos story both became more important than Theranos’ product. Theranos presented an appearance of progress in place of any true progress. This deception becomes all the more concerning given its focus on medical technology on which people’s lives often depend. None of this is to dispute the importance of technological advancement and change, but when it comes to physical health, a thin veneer of “disruption” is no stand-in for real innovation. Silicon Valley, try as it might, cannot be the entire world, and at the end of the day, an iPod is a very different thing from a blood test.