Theranos founder Elizabeth Holmes had emerged as a star by developing “Edison,” a kit that claimed to diagnose more than 250 diseases with a drop of blood. It seemed certain that it would become a unicorn in the healthcare sector as various big names such as the media, politics, and academia rushed to invest and promote.
But with the Wall Street Journal’s exploratory report, the scams of Terranos and Holmes began to emerge. In fact, there were only 16 diseases that could be diagnosed with kits, and more than 200 other diseases were found to have been diagnosed by employees themselves using other existing equipment. Terranos finally went into the shutdown process in 2018, and Holmes was virtually kicked out of the industry. But the scars they left on Silicon Valley’s reputation still remain.
In order for start-ups to settle in the market publicly, they need something that will shock the market order that existing companies have solidly built up. However, if there is no business base, entrepreneurs inevitably attract funds with future success as collateral, and in the process, struggle to show the interim results. You may feel the temptation to deceive yourself as well as the rest of the process. The media, thirsty for heroic narratives such as venture myths, often play a role in encouraging their deviations.
What’s interesting is that fraud is surprisingly frequent in the field of science and technology which should be based on objective facts and evidence, not in other fields such as controversies surrounding Korea’s Hwang Woo-suk or the hydrogen truck manufacturer Nikola. This is an error caused by the public’s belief that it would have been verified because it was about science and technology. A bold lie is revealed by those who constantly question it without missing the slightest clue. Innovation that will change the world sometimes requires reckless challenges. The role of the virtuous cycle that expectations bring cannot be ignored. However, it is up to the public with a more transparent and tight system and a higher level of technology literacy to ensure that their confidence is not compromised by deception. Confirmation and verification of the published facts would need to be constantly carried out, not just once.