CEOs are Terrible at Acting
Last summer, I read two books. Both satisfied a desire to learn more about entrepreneurial culture, and both were about billionaire startup founders who found success in Silicon Valley. I started the summer by reading Walter Isaacson’s biography of Steve Jobs (aptly titled Steve Jobs). The book has been released for several years already, but I only was able to get around to reading it very recently. The entire book is nearly 700 pages, so while it is hard to remember every detail of Jobs’s life, there were a few key things that I took away from reading it. Most importantly, Steve’s world revolved around a subset of reality that he created for himself. The boundaries of possibility simply didn’t exist for him or Apple, and he made others aware of that. But despite the apparent impossibility of some of his accomplishments, Steve made it work. He was undoubtedly a prodigy — not in art, design, or creativity; nor in coding or a knowledge of electronics. He was a prodigy in bending the world around him in a way which defied its physical and legal limitations. If it meant a Mac model could be rolled out faster, Steve could slow down and speed up time as he pleased, and at the end of the day, the world was left confused as to how he did it.
Reading Steve’s biography was profoundly interesting for this reason. It was not unlike reading a science fiction novel, where characters could alter the laws of the universe to make the plot work. Naturally, copycats followed. However, let me remind you that Steve was a prodigy. His charisma and infallible personality were one in a million, so it was expectedly unlikely for a second Steve Jobs to ever appear in the spotlight. Of course, there were other successful startup owners, but none were successful because they were similar to Steve. Most of them just made original products and marketed them to the world at a relatively low cost. But after its early days, Apple products were not original nor cheap, but people still bought them. Part of that was the “Steve” factor, a sort of mark that made people want to buy and use Apple products. People could replicate his success through different means, but none had that “Steve” factor.
In 2003, a second Steve Jobs entered the arena. Her name was Elizabeth Holmes, and she seemed to be everything that Steve was 30 years prior. That year, Holmes founded Theranos, a medical technology company which aimed to reduce traditional blood tests to mere drops of blood. It was a revolutionary idea, and everyone started jumping on board once major news outlets picked it up. Everything seemed to match between the two. They both demonstrated extreme intelligence in school and then subsequently dropped out. While their advertisements differed in style, they both were somewhat magnetic in nature: people wanted the product they were being marketed immediately. Holmes even went as far as wearing the same black turtleneck as Steve Jobs in order to mimic his persona.
And that’s all it was: mimicry. A costume party disguised as a company, all because Elizabeth Holmes wanted to walk in Jobs’s shoes. Theranos’s dramatic failure showed the world that it was impossible for anyone to replicate Steve Jobs’s methodology without catastrophe.
Theranos was born into nobility. By its second year as a company, it was valued at $30 million, even when it was still headquartered in a Stanford basement. By the time a decade passed, it was worth nearly $10 billion according to Forbes Magazine.
However, the company came crashing down after a series of failed inspections and deadend corporate partnerships revealed its product’s many flaws. Theranos’s headline blood tester, the Edison, was simply a dud. It did not function accurately, and all tests were actually being outsourced to equipment purchased from Siemens. Even those tests were vastly unpredictable, as blood tests were never meant to be performed on such small quantities of blood. In retrospect, the failure should have been obvious. Theranos advertising was dodgy and used legally grey terms to purposely skirt around regulations, and federal laboratory inspections were often staged or avoided in order to prevent the public from discovering the company’s difficulties. Eventually, Theranos was exposed by a whistleblower, but it would likely have continued its fraudulent actions far into the future had there been no concerns raised by employees.
The Theranos failure was documented in the second book I read this summer, Bad Blood. It was a journalistic account of the investigation written by The Wall Street Journal’s John Carreyrou. The novel’s publication inducted Elizabeth Holmes into a hall of fame with the likes of Jordan Belfort and Bernie Madoff. With a plot resembling fiction, Bad Blood followed Elizabeth Holmes’s twisted sense of reality and how she attempted to harness it for financial gain. However, when boiled down to its core, Holmes was just trying to replicate Steve Jobs.
Her twisted sense of reality, or “reality distortion field,” as it is often referred to in both Bad Blood and Steve Jobs, is something Holmes borrowed from Jobs, her idol. However, Jobs was a prodigy, and Holmes wasn’t. She was accurately replicating everything that Steve did, but she was so successful for one reason: she wasn’t Steve.
For example, Steve Jobs would often shut out the ideas of his employees, only to come back and later implement them without giving credit. Holmes tried borrowing this concept, only to entirely oust herself from communicating with employees. Steve Jobs kept a close inner circle with people like Tim Cook and Jony Ive. Holmes tried this, but she ended up with a comically villainous sidekick named Sunny Balwani. Steve slashed deadlines, so did Holmes. Steve poured money into the wrong things, so did Holmes. Steve wanted beauty over function, so did Holmes.
To an outsider, they were the same. But in the end, Elizabeth Holmes was not Steve Jobs. She was only an actor trying to replicate his techniques, but an actor can only do so much. I enjoyed reading the books because they showed me what happens when you try to be someone you are not. Elizabeth Holmes certainly was brilliant, and I believe that Theranos would have achieved a lot more had her methodology been true to form. The failure of Theranos came from her ruthless pursuit of replicating Steve Jobs, and as a result, a promising company was cemented in history as a fraud.