Courtesy Theranos
Elizabeth Holmes
If you haven't yet heard of Elizabeth Holmes, you soon will.
She is the founder and CEO of Theranos, a Silicon Valley company with a $9 billion valuation that has developed an inexpensive, comprehensive blood test using a simple pinprick. At age 31, she owns more than half of the company, making her America's youngest female self-made billionaire.
The Theranos board boasts not one but two former U.S. Secretaries of State: George Shultz and Henry Kissinger. And Shultz made headlines last week when he revealed Theranos is seeking FDA approval for an early-detection Ebola test.
All of which is great fodder for flashy headlines.
But what stands out about Holmes and her company--above and beyond their recent spate of publicity--is the significant scope of their mission, and the lengths to which Holmes has gone to achieve it.
Out of the Shadows, a Legitimate Disrupter
Businesses like Theranos have the potential to reduce the costs of keeping Americans healthy "by a factor of 10," according to Forrester's James McQuivey, an analyst who tracks the digital disruption of traditional businesses.>
The Theranos blood test is administered at a facility within a Walgreens drug store. The results are analyzed onsite within hours. If successful, the Theranos test could upend traditional blood-testing businesses such as Quest and Laboratory Corporation of America, McQuivey said.
Of course, making an existing service faster or cheaper--or expanding the market for that service--is Entrepreneurship 101. How, then, has Holmes risen to iconic status, in a startup landscape crowded with faux-celebrities and would-be claimants to the title of Paradigm-Shifting Entrepreneur?
Screenshot/Theranos.com
She did it slowly. Holmes founded Theranos in 2003, when she was 19. But her first 15 minutes of fame did not arrive until late 2013, when the company announced its partnership with Walgreens. Last year, her celebrity increased following profiles in Fortune, Forbes, and The New Yorker. In addition, Holmes delivered a highly watched (98,335 views) TED Talk sharing her vision for the future of blood testing.
In other words, she and her company were around for more than a decade before coming out of the woodwork. Go ahead and search for media mentions of Theranos prior to 2013. You'll find a few, but for the most part, Theranos was under the radar. (Though it behooves me to point out Inc. wrote about Holmes in 2006.)
That kind of walk-before-you-talk behavior is refreshing and respectable in today's hype-strewn entrepreneurial landscape. Most 2015 startups, especially those backed by loads of VC money, talk boldly before they've survived a year or turned a profit. By contrast, Theranos stayed quiet until its very visible partnership with Walgreens.
Theranos Chairman, CEO and Founder Elizabeth Holmes (L) and TechCrunch Writer and Moderator Jonathan Shieber speak onstage at TechCrunch Disrupt at Pier 48 on September 8, 2014 in San Francisco, California
Earning the Respect of Other Entrepreneurs
Founders who have survived their own applause-less launch pains appreciate this kind of dues-paying. "She's phenomenally inspiring, in the sheer duration and commitment to her vision," says Luke Sherwin, cofounder of Casper, a New York City-based manufacturer and online retailer of eponymous mattresses.
Casper hopes to disrupt the $13 billion U.S. mattress industry by innovating around every aspect of the customer experience: the mattress itself, the online browsing and buying process, the logistics of product delivery, and the stresses over potential returns.
Though it's gone well so far--Casper made $20 million in its first 10 months--Sherwin and his co-founders have learned firsthand about the difficulties of upending established consumer behaviors in an industry stacked with heavyweight companies.
All of which is why they have a special respect for Holmes's goals. "We can really relate to all of the challenges and structural hurdles she faces," Sherwin adds. "And it's fantastic that the valuation of what she's done reflects the ambition of being able to bypass an inefficient system that's stifling in the U.S."
Larry Kim, founder of WordStream, a $10 million software-as-a-service search engine marketing platform based in Boston, respects the competitive savvy of Holmes's longtime stealth.
"Holmes had a vision so significant, she didn't want her competitors to catch on until she had the creation of an entirely new market--consumer health technology--well under way," he observes in his Inc.com column. In that time, he points out, Holmes established a real business with 700 employees and prominent investors such as Larry Ellison and VC firm Draper Fisher Jurvetson.
The Authenticity of Awkwardness
To be sure, there are other reasons Holmes has become iconic:
- She is a college dropout, which puts her in the company of famed subversives like Mark Zuckerberg, Bill Gates, Steve Jobs, the Peter Thiel posse, and Kanye West.
- She is taking aim at a process with a global scope. All over the world, whether you're young or old, you at some point will find yourself providing a blood sample. This is not software as a service targeting a business-to-business niche or a regular consumer product hoping to snare some market share. This is potentially as commonplace as medicine itself.
- She owns more than half of Theranos. Which means, based on the company's $9-billion valuation, she is a 31-year-old billionaire. Cue the categorical headlines about how one of America's youngest female billionaires is also a college dropout.
Steve Jennings/Getty Images for TechCrunch
Theranos Chairman, CEO and Founder Elizabeth Holmes speaks onstage at TechCrunch Disrupt at Pier 48 on September 8, 2014 in San Francisco, California.
But above and beyond all this, Holmes has earned the veneration of other founders because of the length--and difficulty--of her journey.
Other dyed-in-the-wool founders recognize Holmes as genuine, like-minded, and one of their own. She is no impostor. She was an entrepreneur before movies and television made it cool. She is substance where often there's only flash.
Her TED Talk provides more evidence of this. Watch just 30 seconds of it, and you'll see: Holmes comes across as an awkward techie or scientist, rather than a polished public speaker who knows how to please a crowd.
"For all of her practice at presentation, Holmes still sometimes has an engineer's difficulty in clearly articulating how Theranos will advance the cause of preventive medicine," observes The New Yorker's Ken Auletta in his profile.
He writes it like it's potentially a bad thing. In fact, there's an authenticity in Holmes's lack of polish that other founders respect. And that respect, earned through a decade's journey, is at the heart of her hard-won iconic status.
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