Yesterday, during the trial of Elizabeth Holmes, the founder of the now-defunct Theranos, her attorney made the case that she was like Steve Jobs, quoting from Walter Isaacson’s biography of the late founder of Apple. It’s not the first time Holmes likened herself to Jobs. In his book, John Carryrou, whose reporting for The Wall Street Journal brought down Holmes and Theranos, wrote about how she had modeled herself after the iconic Jobs.
Except, as should be obvious to everyone, Holmes isn’t at all like her idol. One of them built what would become the most valuable consumer electronics company in the history of the world. The other now stands trial for what now appears to be Silicon Valley’s biggest example of “fake it till you make it.”
In Homes’ case, however, it was all faking. It’s not entirely clear the company she started was ever going to “make” anything resembling the promises it made to investors. I suppose you could argue that Holmes mastered what Apple observers have long called Jobs’ “reality distortion field.”
Apple’s founder was famous for his ability to convince people of the greatness of things that they weren’t even sure they understood. Of course, in Jobs’ case, the thing he was referring to was actually great. Yes, he was a great marketer–maybe the best ever–but he also cared so deeply for the reputation of the company he led that he oversaw one of the greatest periods of industrial innovation and product design of his generation.
Steve Jobs made big promises, but he had the benefit of a company that was actually able to make great products. Like the iPhone.
The iPhone is not only Apple’s most valuable product, it’s almost entirely responsible for the company’s $2 trillion market cap. It’s also the standard by which every other smartphone is measured. Its announcement event is easily the most-watched tech company product launch each year.
But, imagine if, after Jobs’ famous 2007 keynote introduction of the iPhone, where he described it as a “widescreen iPod with touch controls, a revolutionary mobile phone,” and “a breakthrough internet communications device,” the thing Apple shipped was none of those things. Imagine it shipped customers a box with an iPod-like device that had to be plugged into a phone line to connect to the internet or make phone calls.
The iPhone, as Jobs described it, was better than what people could imagine when they held a Blackberry or Palm Pilot in their hands. It was a complete rethinking of the smartphone in a way that made it more functional and dramatically easier to use. Those are two things that aren’t easy to pull off in combination. The original iPhone, in fact, seemed too good to be true. The difference is that it was very good, but it was also true.
Theranos, was also too good to be true. If you’ve ever had blood drawn, you know that having a needle stuck in your arm while a lab tech fills a series of vials is both invasive and uncomfortable. Holmes’ promise was the ability to run tests on a blood sample much smaller than what was required by the traditional diagnostic equipment used in traditional labs. It was supposed to be more functional, and dramatically easier to use.
The problem is, it didn’t work. Most of the tests run by Theranos either produced inaccurate results or were run on traditional testing machines. That’s not “too good to be true,” it’s just not true at all.
That’s important, because the reason Holmes isn’t like Jobs isn’t just because he succeeded and she failed. There are plenty of incredible entrepreneurs who failed. Jobs himself was kicked out of Apple, and would have been considered a failure if that was the end of the story. Holmes’ problem is that she wasn’t building a “reality distortion field,” she was just making it up.
That, of course, is the obvious reason Holmes isn’t anything like her idol–she wasn’t a marketing genius, she was just making things up and hoping she could figure out a way to make it come true. That never works, by the way. It certainly isn’t a viable business strategy, and it gets legally precarious when you take other people’s money without telling them that the thing you’re trying to figure out isn’t actually real yet.
Whether Holmes committed fraud–in the legal sense–is for other people to decide. There’s a reason we have trials and require prosecutors to prove their case to a jury with evidence. It certainly seems likely that Holmes will be held legally responsible for her actions, but even if not, the lesson here is obvious: character matters.
That, by the way, isn’t to say that Steve Jobs was perfect–no founder (or person) is. It is, however, to suggest that the promises you use create expectations. Character is the relationship between your promises and your actions. It’s the answer to the question “do you do what you say you’re going to do?”
Keeping your word is everything. At least, it’s the difference between Holmes and her idol.