The Verdict

Integrity is the ability to listen to a place inside oneself that doesn’t change, even though the life that carries it may change.” – Rabbi Jonathan Omer-Man

Elizabeth Holmes, the tech entrepreneur and founder of Theranos whose trial has fascinated me for the last 4 months, was found guilty on 4 counts of fraud and conspiracy for lying to investors and not guilty on 4 counts. The jury was hung on 3 counts.

As I’ve written about this, I realized that it’s triggered my past experiences with money in tech and the question of how to develop character when people are throwing money at you. Listening to the jury’s decision, I don’t disagree with their findings but I’m flooded with empathy for her.

That’s probably because I can relate in a very small way to her experiences. The specific incident I’m thinking of was in 2007 when my two business partners (one of whom was my husband) and I were buying a small office building for our little company of 19 people to use as an office.

On the Friday before the closing, the bank realized that we all had one more paper to sign – a personal guarantee of the bank loan. It had to be received by Monday and my husband and the other business partner were traveling to a client’s wine tasting weekend. My husband wanted me to forge our other business partner’s signature on the document. The other business partner wanted me to forge his signature on the document. Neither of them wanted to be bothered to find a FedEx office from which to overnight the document in question.

I felt immense pressure to do it. The two of them, my husband and our other partner had made many business and personnel decisions that I didn’t agree with and I thought I could insulate myself by just focusing on my part of the business. But this was over the top. I held my ground after repeated phone calls and texts and refused to do it. There was no way I was going to forge a signature on a personal guarantee for a bank loan.

Two years later after the market crashed in 2008 and real estate prices dropped significantly so that the valuation of the building was under water, the bank put the loan into a special assets group. We had never missed a payment (and thankfully never did) but they felt the loan deserved additional scrutiny. Fortunately, my business partners had eventually figured out how to FedEx the personal guarantee document so it was on file.

By this time both the business partnership and my marriage had fallen apart so I was the one handling all the details. To say I was so relieved I didn’t forge that signature is an understatement. I shepherded the building through those tough years until we could sell it for what we bought it for and gratefully walked away.

But all this happened when I was almost 40-years-old and had almost 20 years of business experience both working for others and for myself. I doubted myself. I felt the huge pressure. I thought it would have been so much easier to not have the values I was raised with. I’m not so sure I would have been able to hold out to what these guys said was “business as usual” had I been in my 20’s like Elizabeth Holmes.

We don’t often get to see what we are able to avoid when we don’t do something risky. In this case I did and now with the trial of Elizabeth Holmes, I’m reminded of it again. If it doesn’t feel like the right thing to do, don’t do it. It doesn’t matter if someone tells you it’s how it’s done or makes it seem like how sophisticated and experienced people act. Thanks for raising me with these values, Mom and Dad!

(featured photo by Pexels)

Building Character

There are no shortcuts to any place worth going.” – Helen Keller

I’ve been listening to the Dropout podcast about the Elizabeth Holmes trial this fall. She is charged with 12 counts of felony fraud in regards to how she handled investor money and advertised to patients. As I said in a previous post, High-Tech Drama I’m fascinated because in my career, I’ve been privy to all the money in high-tech, mostly at Microsoft and how it influences innovation and character.

Elizabeth Holmes was 19-years-old when she dropped out of Stanford and started Theranos in 2003. She positioned the company as a start-up that would revolutionize the blood testing industry by being able to test for a wide array of factors on a portable testing device that only required a small volume of blood.

It never worked – or at least not reliably. For the short time that the devices were rolled out at Walgreens, they provided bad test results like telling a man he had indications of a prostate problem when he didn’t, another that he was HIV+ when he wasn’t, and an excited mother-to-be that she’d miscarried when in fact she hadn’t. Clearly, there were major problems with big consequences for people that received inaccurate results.

I think this trial could be titled “What happens when you give a 19-year-old college dropout 750 million dollars.” (To be fair, Elizabeth Holmes raised most of the 750 million dollars when she was in her 20’s.)  I don’t assume that you have to go to college to be a success but I would think that some training or apprenticeship on how to be a leader, manage finances and run a company, whether it be institutional learning or otherwise would be helpful.

It’s left me wondering if it’s possible to develop character when you are 19 years old and people are throwing money at you. It’s been intimated that she shows narcistic tendencies but I would think it would be more surprising if she didn’t, given that trajectory.

Elizabeth Holmes, who is now 37 years old, testified at the trial. I cannot begin to do justice to all of her testimony but she seem to do a beautiful job of representing herself. She said there’s many things she wished she did differently – like when she put logos from other companies on documents to make it seem like a 3rd party endorsement. But there’s a lot that she can’t remember, even when emails and texts are read to refresh her memory. Her defense has pointed the finger at a lot of other people: the investors should have done better due diligence, the lab director should have spoken up more loudly, her boyfriend and COO was controlling her and so on.

The thing that I heard Elizabeth say that resonated a great deal with me was something like “The investors weren’t interested in the details of what we could do today, they wanted the big vision of what we could do in five years.” Whatever her intent was in making false statements, that matches much of what I’ve seen in high-tech. People want the hear the magic of what might work one day and are willing to entertain a lot of smoke and mirrors in the process of trying to make something real.

If Elizabeth is found guilty (the jury is currently deliberating), there must be hundreds of CEO’s currently doing exactly the same thing. In no way am I justifying lying and deceitful practices but I’m affirming that venture capitalists of Silicon Valley aren’t usually trying to create truth-tellers and reinforce good values.

All I can say is that I’m really glad that no one handed me three-quarters of a billion dollars at age 19, or at any age. I’ve gained so much character by having to earn one dollar at a time.

(featured photo by Pexels)

A Show of Character

Your life is your message to the world. Make sure it’s inspiring.” – unknown

Twenty years ago I was climbing in Mexico when a guide told me a story about an exclusive Colorado ski resort that he worked at in the winter. The only way to get to the lodge was by sno-cat so they limited the clients to only one bag. On one trip, a customer had his bag and his guitar case and they politely reminded him it was only one bag. The guy had no problem accepting that policy and returned the guitar to his car. It was only later that they realized the guy was James Taylor!

That story is so much better than if they’d let him have the guitar! After all, I’m sure it would have been a wonderful concert but we wouldn’t have learned anything about James Taylor’s character. And it wouldn’t have reminded us that sometimes life doesn’t go our way – and then it becomes part of our story.