Ego-ish and how tech’s main characters are all a bit different

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

This is our Wednesday show, where we niche down to a single topic, think about a question, and unpack the rest. This week, Natasha chatted with Alex about ego, how recent news from Sam Bankman-Fried and Elizabeth Holmes gives us a window into how it works, and impacts on the tech and venture landscape.

We talked about:

  • What Holmes and Bankman-Fried have in common, from centralized ownership to a cult of personality
  • The differences between the two entrepreneurs, and why their stories tend to blur together
  • How Adam Neumann, Elon Musk and others fit into the conversation
  • Learning lessons from startups from a chaotic, and main-character-driven year

We have a lot of really fun stuff coming up in the next week or two. Thanks for sticking with Equity in 2022, and we cannot wait for 2023.

Equity drops every Monday at 7 a.m. PT and Wednesday and Friday at 6 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews founders, a show that details how our stories come together and more!

Ego-ish and how tech’s main characters are all a bit different by Natasha Mascarenhas originally published on TechCrunch

Holmes’ sentencing sends a clear message that the startup ecosystem must be built on good faith

Let’s start with the supposition that the venture-founder compact is built almost entirely on trust, especially early on. Sure, due diligence matters in the investment process, but lying about your capabilities can undercut the founder-investor relationship — and in extreme cases, to the detriment of the larger, global startup market.

In the wake of Elizabeth Holmes’ sentencing on Friday for defrauding investors, I’ve seen people argue that she was only guilty of messing with the wrong people — the wealthy. The implication here is that Holmes’ rich investors deserved to lose their money. I would argue what she did helped undermine the entire venture compact, and that’s why she’s going to jail.

As TechCrunch’s Amanda Silberling wrote on Friday about the company:

Holmes founded Theranos in 2003 after dropping out of Stanford. She pitched investors and partners on technology that would revolutionize the healthcare system — instead of drawing blood intravenously and waiting days for test results, her technology would prick a tiny bit of blood and instantly conduct dozens of tests on it. Soon she was the CEO of a company with a $10 billion valuation, but it turned out that the technology didn’t work.

What Holmes did was build a company by convincing investors that she could create something she knew to be a lie.

The tech startup ecosystem exists in part because investors with capital to spare are willing to risk some of that money on a founder with an idea.

These investors can be fabulously wealthy individuals. They can be athletes like Stephen Curry or Serena Williams, or entertainers like Kevin Hart or Ashton Kutcher. But they could also be larger entities like venture capital firms, investment funds or pension funds investing on behalf of people who aren’t fabulously wealthy.

Holmes’ sentencing sends a clear message that the startup ecosystem must be built on good faith by Ron Miller originally published on TechCrunch

Elizabeth Holmes sentenced to 11 years in prison for Theranos fraud

Ten months after she was found guilty of fraud, the former youngest self-made female billionaire Elizabeth Holmes was sentenced to 11.25 years in prison, plus three years of supervised release. At her trial, she was found guilty on four of 11 counts related to defrauding investors, but she was not found guilty of defrauding patients.

The former founder and CEO of Theranos, Holmes could have faced up to 20 years in prison for each of the four counts. By comparison, former pharmaceutical executive Martin Shkreli was sentenced to seven years in prison for securities fraud, but was released after a bit more than four years.

At the courthouse in San Jose, both sides of United States vs. Elizabeth Holmes presented their cases regarding whether Judge Edward Davila can consider Holmes’ “reckless disregard” of patients in sentencing. Davila rejected that proposal, since at the original trial, Holmes was only found guilty of defrauding investors.

Regardless, it took over four hours before Holmes’ sentence was decided. Alex Schultz, father of whistleblower Tyler Schultz, spoke to the court, recounting how his son slept with a knife under his pillow when he suspected he was being followed by Theranos’ private investigators.

Then, Holmes herself spoke. “I regret my failings with every cell of my body,” she said. That was when Judge Davila delivered his decision.

Holmes is expected to report to prison in April. Currently, she is pregnant with her second child.

Fraud at Theranos

Holmes founded Theranos in 2003 after dropping out of Stanford. She pitched investors and partners on technology that would revolutionize the healthcare system — instead of drawing blood intravenously and waiting days for test results, her technology would prick a tiny bit of blood and instantly conduct dozens of tests on it. Soon she was the CEO of a company with a $10 billion valuation, but it turned out that the technology didn’t work.

Theranos has been defunct since 2018, but Holmes’ criminal trial only began last fall after delays due to the pandemic and the birth of her first child. According to a letter from Holmes’ husband in a public court filing, she is now pregnant with a second child. The filing includes 282 pages of other letters from Holmes’ friends, family and business associates, ranging from childhood photos and drawings to notes from high-profile supporters like Senator Cory Booker (D-NJ) and venture capitalist Tim Draper.

“Although there is substantial popular outcry against Theranos and Elizabeth, the attitude in much of the venture world is very different,” Draper wrote. “Venture-backed startup companies often announce and deliver products to the market before they are ready.”

The former CEO’s sentencing was further delayed because her lawyers tried to request a new trial, arguing that new evidence had come to light after former Theranos lab director Adam Rosendorff visited Holmes at home in an attempt to find closure.

Rosendorff, who worked at Theranos between 2013 and 2014, testified for six days last year during Holmes’ four-month trial. With his highly technical knowledge of the inner workings of Theranos’ labs, Rosendorff’s testimony was key to the trial. In court, he said that Holmes knew that Theranos’ technology produced inaccurate blood test results, yet she pushed for it to be used on patients anyway. After repeatedly raising his concerns about the faulty technology, he ultimately quit Theranos.

Holmes’ lawyers alleged that when Rosendorff visited her home this summer, he expressed guilt that he made Theranos seem worse than it was in court. But Judge Edward Davila did not find merit to these allegations. Rosendorff affirmed once again that last year’s testimony was accurate. The former lab director clarified that he felt sorry for Holmes’ child, who will grow up without a mother if she is sent to prison, but not for Holmes herself.

Holmes’ former boyfriend and Theranos COO, Ramesh “Sunny” Balwani awaits sentencing. He was convicted on 12 out of 12 counts in his own trial, where the jury found him guilty of defrauding both patients and investors.

Elizabeth Holmes sentenced to 11 years in prison for Theranos fraud by Amanda Silberling originally published on TechCrunch

Elizabeth Holmes is denied new trial, will be sentenced on Nov. 18

The disgraced founder of Theranos, Elizabeth Holmes will be sentenced on November 18 after she was found guilty on four counts of defrauding investors in January. Once the youngest self-made female billionaire, Holmes could face up to 20 years in prison for each of the four counts of fraud.

Holmes had delayed sentencing by trying to request a new trial, arguing that new evidence had come to light. In August, former Theranos lab director Adam Rosendorff visited Holmes at her home in an attempt to find closure.

Rosendorff, who worked at Theranos between 2013 and 2014, testified for six days last year during Holmes’ four month trial. With his highly technical knowledge of the inner workings of Theranos’ labs, Rosendorff’s testimony was key to the trial. In court, he said that Holmes knew that Theranos’ technology produced inaccurate blood test results, yet she pushed for it to be used on patients anyway. After repeatedly raising his concerns about the faulty technology, he ultimately quit Theranos.

Holmes’ lawyers alleged that when Rosendorff visited her home this summer, he expressed guilt that he made Theranos seem worse than it was in court. But Judge Edward Davila did not find merit to these allegations. Rosendorff affirmed once again that last year’s testimony was accurate. The former lab director clarified that he felt sorry for Holmes’ child, who will grow up without a mother if she is sent to prison, but not for Holmes herself.

After a long-delayed trial, Holmes’ legal team is expected to file an appeal after next week’s sentencing, dragging out the legal process further. Holmes’ former boyfriend and Theranos COO, Ramesh “Sunny” Balwani is expected to be sentenced on December 7. While Holmes was found guilty on four counts of fraud relating to investors, Balwani was found guilty on all 12 counts of defrauding and conspiring to defraud both patients and investors.

Elizabeth Holmes is denied new trial, will be sentenced on Nov. 18 by Amanda Silberling originally published on TechCrunch

Former Theranos exec Sunny Balwani is found guilty of fraud

Former Theranos COO and ex-boyfriend of disgraced founder Elizabeth Holmes, Sunny Balwani has been found guilty on all 12 criminal charges after a three-month trial.

At her own high-profile trial this winter, Holmes was found guilty of defrauding investors and conspiring to defraud investors on four of 11 counts, though she was not found guilty of defrauding patients. This jury, however, found Sunny Balwani guilty of defrauding both investors and patients, as well as conspiring to defraud them.

As anyone who has watched the fictionalized Hulu series “The Dropout” knows, Theranos aspired to conduct dozens of tests on a single drop of blood, which could have revolutionized the healthcare industry. But despite reaching a $10 billion valuation and spending over a decade in development, Theranos’ technology never actually worked, and in the most egregious cases, patients were presented with dangerously false medical results. In one case, a mother with a history of miscarriages was wrongly informed that she would have another unsuccessful pregnancy. Another patient, Erin Tompkins, used Theranos for its low costs, got flagged as HIV-positive, and then lived in limbo for three months until she could afford a second blood test. She didn’t actually have HIV.

Now, Balwani will be held accountable for what happened to Tompkins, as well as a patient Mehrl Ellsworth, who received a false cancer diagnosis.

Holmes and Balwani were supposed to be tried for fraud together, but the former CEO filed for a separate trial, stating that Balwani — who is 20 years her senior — had emotionally and sexually abused her. Though the court is not ruling on those allegations, the judge granted the request.

Throughout the trial, Balwani’s lawyers attempted to make the case that even though he was an investor and executive at Theranos, he was not involved in key decision-making. But that’s a difficult argument to make to a jury that saw a text from Balwani to Holmes that read, “I am responsible for everything at Theranos.”

In her own trial, Holmes’ defense tried to pin the company’s colossal failure on Balwani. She took the stand herself — a rarity in one’s own criminal fraud trial — to detail their relationship. Holmes described Balwani as having so much control over both her and her company that he micromanaged her daily schedule, including how she dressed and what she ate.

Balwani’s trial featured the same evidence that indicted Holmes. The prosecution focussed on a key piece of evidence relating to Theranos’ relationship with Walgreens. The biotech startup’s faulty technology made its way into 41 Walgreens stores, but unbeknownst to the pharmacy giant, most of the tests were conducted on third-party equipment. Theranos’ own machines couldn’t produce accurate test results, so a lot of patients had blood drawn not with a finger prick but intravenously. So, Walgreens basically spent hundreds of millions of dollars redesigning stores for Theranos’ “wellness centers,” only for the startup to use the same old tech.

Despite Balwani’s lawyers’ claims to the contrary, a Walgreens executive testified that he worked closely with Balwani on the deal. The prosecution also displayed evidence of a text from Balwani to Holmes stating that he deliberately didn’t tell Walgreens that they were using different machines.

Holmes’ jury took seven days to deliberate, but Balwani’s jury came to a decision on the fifth day of deliberation. Both former Theranos executives await sentencing.

This story is developing…

How the myth of the ‘girlboss’ harms emerging women in tech

On Lafayette Street in SoHo, young, fashionable women lined up around the block to enter a minimalist, millennial oasis, the most perfect Instagram feed brought to life. Staff members glided around the store in pastel pink suits, each embodying the kind of girl that Glossier made us all want to be: beautiful, yet effortless.

“We want to inspire, but we also want to be realistic and show beauty in real life,” Glossier founder and CEO Emily Weiss said in a 2017 interview with Inc, just as the brand had reached what Weiss herself described as “cult status.” Even Chrissy Teigen and Reese Witherspoon wore Glossier’s signature Cloud Paint blush to the Oscars

We understood the irony of the message as we sampled their sheer, almost-not-there lipgloss, then looked into a mirror decorated with white vinyl letters in the bustling pop-up shop: you look good, our reflection told us. Glossier affirmed our inherent beauty, then reminded us that we can be even more beautiful if we buy their “Boy Brow” pomade, which sold one tube every 32 seconds by 2018.

Glossier’s commoditized feminism aside, it’s no easy task to launch a $1.8 billion company in the brutally competitive beauty industry, especially one with such broad appeal. After all, Glossier’s founder and CEO Emily Weiss is very, very far from the first entrepreneur to profit off of our desire to look good. And who cares? That Cloud Paint is pretty magical, if we’re being honest. Like with many consumer brands geared toward women, we buy in not just because of the marketing, but because of the product itself.

Glossier founder Emily Weiss speaks at TechCrunch Disrupt in 2018

Glossier founder Emily Weiss speaks at TechCrunch Disrupt in 2018 Image Credits: TechCrunch

But as Weiss steps down from her current role and prepares for maternity leave, her success and subsequently typical choice to become her company’s board chairperson has been co-opted as the end of the “girlboss” era.

What even is a ”girlboss” anymore? Once a vaguely aspirational term of praise reserved only for affluent white women, the moniker now reflects the maddening contradiction of workplace feminism: we know that it’s not enough to just be a woman in power, and that what we do with that power matters far more than simply wielding it. Yet women founders and CEOs remain frustratingly rare as Silicon Valley’s glass ceiling persists, almost impenetrable – venture capitalists (only 13% of whom are women in the U.S.) allocate 98% of their funding to startups helmed by men. It’s no wonder, then, how we’ve ended up with the paradox of the “girlboss.” 

The making (and unraveling) of the ‘girlboss’ myth

Nasty Gal CEO Sophia Amoruso is credited with coining the term in the title of her 2014 memoir, “#Girlboss,” which chronicled her rags-to-riches success and was adapted into a Netflix show. The following year, she stepped down as CEO, and by 2016, her company filed for bankruptcy and was purchased by Boohoo. Then, Amoruso started a company called Girlboss that was likened to “Linkedin for Women.” She stepped down from that company in 2020.

“Girlboss” originally gained popularity beyond Amoruso’s book as a form of praise, according to Kirsten Green, co-founder and investor at Forerunner Ventures. Green has spent her career bankrolling the companies that define what’s cool, including Glossier, Outdoor Voices and Away, whose founders are often cited as the archetypal examples of “girlbosses.”

“I truly believe the ‘girlboss’ term was created to celebrate an emerging wave of female leaders – which is still rare in business, and was even rarer around 10 years ago when the phrase was popularized,” Green told TechCrunch in an email. 

The term itself, though, hasn’t aged nearly as well as Green’s portfolio. Years later, even Amoruso herself has expressed discomfort with the phrase.

“It’s not a compliment. It’s more of a mockery,” said Isa Watson, founder and CEO of social media app Squad. Watson, who holds an MBA from the Massachusetts Institute of Technology, has raised $4.5 million for her app, placing Squad in the mere 0.34% of companies funded last year with a Black woman founder.

The idea of the “girlboss” today is shrouded in privilege. Since its debut, the term has come to represent a small cohort of white, affluent millennial women who rise up into positions of power, preach the gospel of feminism, then ultimately fumble the millenial pink ball and fall from grace when it turns out that their politics just aren’t that transformative.

“[The term “girlboss”] feels disconnected from reality, which is that there are very few women that have had this label applied to them,” said Sruti Bharat, who most recently worked as interim CEO at All Raise, a venture fund supporting women and non-binary founders. “They all seem to have slightly similar journeys, like they run consumer brands, maybe [have] slightly problematic racial politics, and some kind of takedown piece [is written about them]. That’s like the PR trope.”

Unlike the glowy skin depicted on Glossier’s Instagram, the reputation of its founder and CEO Emily Weiss is not without blemishes. Glossier’s management has faced well-deserved scrutiny for failing to support members of its retail staff, leaving them to endure racist treatment from customers. (Following the complaints, Weiss issued a public apology, and Glossier donated $1 million – half to organizations fighting racial injustice, and half to Black-owned beauty businesses). 

Then, when the pandemic hit, Glossier laid off all of its retail employees and shut down its physical stores. But just a year later, the beauty brand raised an $80 million Series E round at a $1.8 billion valuation to open up permanent retail stores in Seattle, Los Angeles and London, capitalizing on the dewy fairytale of its Manhattan flagship store.

Mandela SH Dixon, All Raise's recently appointed CEO

Mandela SH Dixon, All Raise’s current CEO Image Credits: All Raise

Early this year, the company slashed staff yet again. Glossier laid off one-third of its corporate employees, mostly on its tech team, as Weiss admitted to staff that the company got “distracted” from its core beauty business and got ahead of itself with hiring. Weiss’ recent departure from the CEO role, along with that of her CMO from the company altogether, only amplified the scrutiny – fairly or not.

Although a select few white women have been able to rise through the ranks of startup success, tech leadership is far from reflecting the populations its products serve. Even All Raise, which was founded with the explicit mission of supporting diverse founders, just recently appointed a Black woman, Mandela Schumacher-Hodge Dixon, as its long-term CEO. Dixon is setting out to broaden the nonprofit’s definition of inclusion after it was helmed by its white, female founder Pam Kostka for three years.  

‘They’re not collecting stats on that’

“The end of the girlboss era? What does that even mean?” asked Rosie Nguyen in a conversation with TechCrunch. Nguyen is founder and CMO of Fanhouse, a creator platform that just raised $25 million from Andreessen Horowitz. 

Despite the prevalence of the “girlboss” in pop culture, the reality on the ground for women entrepreneurs has played out much differently. Less than 2% of venture capital funding went to all-female founding teams in 2021, marking a five-year low. 

There’s a disconnect between the evolution of feminism in the outside world, juxtaposed with the frustratingly slow rate at which Silicon Valley realizes that a woman CEO shouldn’t be a novelty. Outside of work, women fight for an intersectional feminism that’s trans-inclusive, uplifts people of color and advocates for disability rights. But in startup culture, just being a woman in and of itself is seen as subversive.

“As a female founder, it kind of stops there, because that’s impressive enough to people, but I’m like, well actually, I’m also a Vietnamese immigrant,” said Nguyen. “I was born in Vietnam. I’m Southeast Asian. Like, do you know any Vietnamese immigrant female founders in a Series A startup? I don’t know, maybe I’m the only one, but they’re not collecting stats on that… Or, alright, I’m queer, I’m bisexual, but right now, everything is so white and male that anything else is already impressive to people.”  

The confusion around what “girlboss” actually means stems from its application to a broad range of poor management decisions, from the ignorance Weiss displayed about racism in Glossier stores (unfortunately, this is rather common amongst white CEOs) to the dangerous, life-threatening fraud perpetrated by Theranos’ Elizabeth Holmes. 

The “girlboss” stereotype poisons the image of the woman CEO as more and more companies run by white men earn the overwhelming majority venture funding. And of course, those startups are by no means innocent when it comes to bad management.

“If you look at someone like Adam Neumann and WeWork for example, he was covered [in the media] in a very flattering light until the very moment when it all came tumbling down,” said Watson. “I mean, there’s a number of things that went wrong throughout the course of his tenure that were never brought up. And so when you have female founders that have simple management missteps, I just feel like they’re brutalized by the media, and the culture is anxiety-inducing.”

As it is, very few women founders even have the chance to ascend to the top of their field, and those who do are largely white women who come from privileged backgrounds. The female entrepreneurs who succeed by traditional measures are vilified as “girlbosses,” while women of color seem to be left out of the discourse entirely. That’s part of why Bharat, a woman of color with South Asian heritage, says she has never identified with the term.

If Weiss, the founder who built a makeup brand that’s been hailed as the next generation’s Estee Lauder, who pioneered the blueprint for several DTC brands that came after hers, is portrayed as a failure for taking maternity leave and switching executive roles at the company she created simply because she’s a woman, that doesn’t bode well for underrepresented founders without Weiss’s advantages. 

“I think it’s like second- or third-wave feminism, like ‘lean in,” Nguyen said, referencing the catch phrase of controversial, longtime Meta COO Sheryl Sandberg, who just stepped down. “It’s the whole concept of feminism as like, why aren’t more billionaires women? It became laughable to people because the point is not having more female billionaires, the point is having less income inequality.”

The pitfalls of corporatized feminism

While the women who have been branded as archetypal “girlbosses” have largely failed to deliver on the promise of empowering women through selling makeup (or suitcases, or athletic gear), it’s worth examining why they’re even expected to do so in the first place.

“Just because a woman has been oppressed, or has been marginalized, or treated differently, doesn’t mean that she is also aware of how to fix it, or how to speak about it or is not perpetuating it herself. We’re always advocating for women to be icons … but the reality of that is it takes actual advocacy work and movement building and policy,” Bharat said.

The bar is higher for women entrepreneurs not only in terms of financial results they’re expected to deliver (cough cough, Elon Musk), or the thin margin of error they’re afforded, but also in terms of what their job description implicitly includes. The industry doesn’t look to white male founders to serve as perfect advocates for social justice issues. Indeed, the reality of our economic system is that it’s not their job, and whether we like it or not, corporate feminism isn’t going to save us from difficult ethical dilemmas either.

“I really feel for some of these leaders who are trying to learn as they are very much in the public eye,” Bharat said. “There’s very little room for error for women, and I’m not saying there weren’t mistakes. There definitely have been, but the room to recover is completely limited.”

The “Girlboss” label harms all women because it’s a reductive stereotype that detracts from the conversation around real issues in corporate culture and society. It’s a distraction that uses emerging women founders as a scapegoat for systemic issues instead of opening up a productive discussion on how we can reform workplaces to function better for all people, particularly members of marginalized communities.

By conflating all management mistakes as equal, we lose sight of each individual issue we’re trying to remedy – and by calling Weiss a “girlboss,” we risk discouraging women in leadership roles from taking risks, learning and growing. We also perpetuate the erasure of women of color in tech.

This isn’t the end of the woman founder and CEO. Instead, let’s make it the end of unrealistic expectations for women who run companies, and the hollow, corporatized feminism that comes as a result.

Be an entrepreneur who leads with transparency

As a founder, you’ll encounter many hills and valleys growing your company. As much as you want to present positive information to stakeholders, it’s equally important to be forthright when product and financial performance fall short of expectations.

As an angel investor who funds promising startups, on occasion — and thankfully it’s rare — I’ve run into less-than-honest behavior. The point where “faking it” translates into stating untruths to investors, customers and oneself is the point at which ego and reality collide — and ego in some cases ends up as the winner.

A well-publicized case is that of Theranos founder Elizabeth Holmes, who was convicted of defrauding investors about the diagnostic device company she founded. Less well-known is Adam Rogas, CEO of cyber fraud prevention company NS8, who allegedly raised $123 million from investors using financial statements that showed millions of dollars of revenues and assets that didn’t exist.

These and other equally egregious cases present a cautionary tale for entrepreneurs and investors: Transparency isn’t an option; it’s a necessity.

The founder of a company I invested in secretly kept two sets of books: one with correct historical financials, and another with numbers inflated more than 10 times actuals. Sales and product performance had fallen short. His solution was to present the inflated financials to investors.

The founder of a company I invested in secretly kept two sets of books: one with correct historical financials, and another with numbers inflated more than 10x actuals.

But investors are always on the lookout and sensed something was amiss. We quickly discovered the second set of books after digging into the data. This founder couldn’t secure additional investment in his company and found himself in legal trouble.

It’s natural to want to showcase positive news, but presenting challenges is just as critical. Challenges can snowball into bigger issues if you don’t communicate them. Never allow the pressure from investors looking for good news to tempt you to exaggerate or sugarcoat the truth.

Optimism and reality

As a philosophy, “fake it till you make it” was never about playing with the truth. It suggests adopting a mindset that you’ll succeed, even when you’re not confident about achieving success.

It’s OK to project an optimistic view on where product development and financials will be in the future. But it’s crucial to present reality, not the reality you wish were true when reporting on the current state of product development, actual customers and financial performance.

The ego-driven high

One trait that enables founders to take huge risks to create and run with their vision, namely outsized confidence and ego, is the very trait that can cause a few of them to lose the sense of what’s right and wrong. With their moral compass adrift, they deceive to get ahead.

In extreme cases, founders on an ego-driven high are addicted to the deception. They imagine themselves as the CEO of the next unicorn. They unleash a stream of untruths that support their made-up reality. These people are trapped in a fantasy space, immersed in hubris. As we saw with the rise and implosion of Theranos, the deception snowballed out of control until, inevitably, the founder was caught in the lie.

The blue chip temptation

Hulu’s Theranos docu-series ‘The Dropout’ is like watching a car crash in slow motion

Just because you know how the story ends doesn’t mean that it’s not fun to watch how it all went so horribly wrong.

That’s the premise of an entire emerging genre of media, mostly produced by streaming platforms, which chronicle the most salacious stories in tech, startups and wealth gone wrong. Hulu’s “The Dropout,” which focuses on the fall of Theranos, is the latest. There’s also Apple TV+’s upcoming “WeCrashed” series, based on the podcast “WeCrashed: The Rise and Fall of WeWork,” and then there’s Showtime’s recent “Super Pumped: The Battle for Uber,” featuring stars like Joseph Gordon-Levitt and Uma Thurman. And lest we forget when Netflix and Hulu both released Fyre Fest documentaries the same week, or when Netflix rushed to option a film about the alleged husband-wife bitcoin launderers before their case has been resolved.

But when you’re told the same story again and again without gleaning anything new, it loses its charm. Even before Elizabeth Holmes was found guilty of defrauding investors in January, we had little left to learn from her story, which has already birthed true crime podcasts, books and documentaries. We read “Bad Blood,” the Theranos tell-all by journalist John Carreyrou, whose reporting directly contributed to Theranos’ downfall from a $10 billion valuation to nothing; we watched the HBO documentary “The Inventor: Out for Blood in Silicon Valley;” and we observed in real time as Silicon Valley journalists live-tweeted her four-month-long trial, which was so popular that onlookers had to wake up at 3 a.m. to make sure they could get a seat.

Yet today, Hulu will release the first three episodes of “The Dropout,” and soon, Apple TV+ will unveil its “Bad Blood” movie, starring Jennifer Lawrence as Holmes.

These online streamers keep churning out this content because they know we will watch — we’re desperate and eager to understand how people can be so corrupted by the promise of money and fame that they will sacrifice their morality.

Featuring Amanda Seyfried in the lead role, “The Dropout” is the first fictional re-telling of Holmes’ story, which we know so well by now: The youngest female self-made billionaire vows to change the healthcare system with ground-breaking technology, only for the world to discover that the woman they compared to Steve Jobs was peddling technology that never even worked.

Photo by: Beth Dubber/Hulu

The series opens with fictionalized footage of Holmes on trial, but other than these brief asides, the story of Theranos is told in a straightforward, linear narrative. From this perspective, “The Dropout” feels like watching a car crash in slow motion. You can’t look away, but you don’t really enjoy the sight.

Seyfried’s interpretation of Holmes is reasonably convincing as she goes to deranged lengths to convince investors, board members, Walgreens partners and her devoted employees that she isn’t full of shit (spoiler alert: she’s full of shit). We’re also forced to watch as she falls in love with Sunny Balwani, her eventual COO who’s 18 years older than her, despite knowing that in 2021, Holmes would tearfully allege in court that he routinely abused her over their 12-year relationship. “The Dropout” makes it clear that Balwani isn’t a hero in the Theranos story. But as she dives head-first into being a CEO, the stomach-turning dynamics of her secretive relationship with Balwani are glossed over in a way that’s difficult to watch.

The show also recounts Holmes’ alleged rape when she was a Stanford freshman in an attempt to contextualize the personal catastrophes that made her so hellbent on achieving fame and success. She recalled in court last year, “I decided I was going to build a life by building this company.”

In early episodes, Stephen Fry’s performance as chief scientist Ian Gibbons is a highlight of the show. But for viewers who know Gibbons’ fate, each of his jovial appearances summons a sense of foreboding. In 2013, Gibbons died by suicide shortly before he was required to testify in a lawsuit about Theranos’ technology. His widow, Rochelle Gibbons, said that when her husband died, Holmes never reached out — instead, an office manager just asked that she return Ian’s laptop.

As we watch Rochelle learn of Ian’s death, Holmes no longer feels like a young woman who’s in over her head. She’s a villain, but a complicated one. “The Dropout” still tries to humanize her, taking a bit of creative license to imagine personal aspects of her life that we will never know. This version of Holmes that Hulu created mourns Gibbons’ death, worries about her company’s lack of viable technology and even asks her mother what would happen if she quit Theranos. But even in this mildly sympathetic look at Holmes, she isn’t a likable character.

Streamers know viewers are fascinated by unlikeable central figures, however, which translates into views. For instance, Netflix recently released a limited series based on a true story about a young female scam artist. The series, “Inventing Anna,” tells the story of Anna Delvey, an infamously fascinating criminal who is enigmatic in the same way Elizabeth Holmes is — you don’t root for her because her actions are just too heinous to justify; but you want to know more about her, so you’ll watch seven to 10 hour-long episodes over the course of one weekend. Netflix viewers spent 196 million hours watching “Inventing Anna” between February 14 and 20, making it Netflix’s most-watched English-language series over a one-week period. The show debuted on Friday, February 11, racking up an additional 77 million hours viewed over the weekend it was released.

Unlike “The Dropout,” “Inventing Anna” frames the story of the fake German heiress through a fictional journalist’s pain-staking reporting — the scams and trickery have already happened as the journalist convinces the victims of these scams to tell their side of the story. Like us, the fictional journalist is enraptured with questions of how a young woman could nearly scam Fortress Investment Group out of millions of dollars.

Photo by: Beth Dubber/Hulu

But the story of Elizabeth Holmes is ultimately scarier than the misdeeds of Anna Delvey. Delvey — whose real last name is Sorokin — basically just stole money from obscenely rich people, which is of course morally abhorrent, but it doesn’t quite stir up the same rage as Elizabeth Holmes’ company giving ordinary people false medical results, which could endanger their lives.

If “Inventing Anna” were oriented as a linear narrative, it would probably still be entertaining, since she wasn’t posing an ever-growing threat to human health (…only to their wealth). But “The Dropout” just isn’t a fun watch — it’s like yelling, “No, don’t do it!” to the horror movie character who decides to walk into a creepy house, only that scene lasts for eight episodes, and it’s based on a real story.

A lot has changed about our attitude toward tech in the times since movies like “The Social Network” (2010) were released, painting Facebook founder Mark Zuckerberg as a “tragic hero.” Now we look at these stories of startup founders with rightful skepticism, which makes sense in an era when Facebook whistleblower Frances Haugen appears on prime-time television, telling us that Facebook prioritizes profits over public good. Gone is the excitement of Apple debuting the first iPhone (a moment depicted in “The Dropout,” as Hulu’s Holmes queues in front of an Apple Store to buy one). Now we watch as Elon Musk laments “billionaire taxes” on Twitter, and Jeff Bezos gets wealthier while Amazon workers struggle to earn workplace protections.

Maybe if “The Dropout” came out around 2018 or so, it would have been a compelling introduction to an important moment in Silicon Valley culture. But for now, it feels more like Hulu’s attempt to cash in on our current cultural fascination with failed startups and scams.

Of course, Netflix ordered a movie about the big crypto scandal

When news broke earlier this week that the Department of Justice had seized $3.6 billion of allegedly stolen bitcoin, we had some questions. What do these revelations mean about government intervention in crypto? Will this scandal impact the decentralized finance sphere in the longterm? Most importantly, which streaming service will order a documentary about the Bonnie and Clyde of bitcoin?

At least one of our questions has been answered: today, Netflix announced that it will tell the story of what it calls “the biggest criminal financial crime case in history” with the help of director Chris Smith, who brought “FYRE: The Greatest Party That Never Happened” and “Tiger King” to the streaming service. Smith will executive produce alongside Nick Bilton, who produced HBO’s documentary “The Inventor: Out for Blood in Silicon Valley” about the failure of Theranos.

Like the stories of Elizabeth Holmes and Billy MacFarland, Smith and Bilton have a lot to work with here. The alleged criminals Ilya “Dutch” Lichtenstein and Heather Morgan (who moonlights as the rapper Razzlekhan) were arrested on Tuesday for conspiracy to launder nearly 120,000 bitcoin, which is now worth around $5 billion. Currently, the husband-wife duo awaits trial, but they were not released on bail because the prosecutor deemed them to be at risk of fleeing. According to Bloomberg, Lichtenstein kept a folder labeled “personas,” and there was a file on his computer called “Passport_ideas” with links to fake passports. The prosecutor added that a plastic bag labeled “burner phones” was found under their bed. You can’t make this stuff up, which is why based-on-a-true-story movies keep Hollywood moving.

Apple’s biggest scandal of 2022 is already happening

Hello friends, and welcome back to Week in Review!

I’ve taken the last few weeks to unwind and ensure that my 2022 hot takes are as scorching as possible, or at least as prescient as possible. This week, we’re talking about what I’m sure could be one of Apple’s biggest scandals of the decade thus far: the itty bitty AirTag.

You can get this in your inbox every Saturday morning from the newsletter page, and follow my tweets @lucasmtny.

(Photo by James D. Morgan/Getty Images)

the big thing

AirTags are a very useful product from Apple that pretty much function exactly as advertised.

Unfortunately, that’s the problem.

There’s been a fair bit of controversy lately around how Apple rolled these out and how even though these are great devices to keep track of your keys, they can also easily be abused to stalk someone. This isn’t a purely theoretical issue either, it’s already happening. 

It’s not a particularly unique scenario where technology can be used for good and bad purposes — just think about the decades-long conversation around encryption — that said I have a feeling that this is a scenario where Apple is going to lose and it’s going to be more embarrassing than any misstep in recent memory.

Apple has arranged so much of their wearable product marketing over the last few years on how their devices function in edge use cases. The Apple Watch’s last several generations have focused on health tracking features that could help identify rare conditions or help users in a life-threatening situation. TV commercials have documented the individual stories of users who have found the Apple Watch to be a life-saving tool. With AirTags, there’s potential for some of that same good, but there’s also much more downside. In the next year, we’re undoubtedly going to see examples of AirTags being used in nefarious ways that bundled together serve as the antithesis of one of these Apple Watch commercials. It may end up being a product defined by its gross shortcomings.

Image Credits: Built for Mars screengrab

Apple has made its own post-launch efforts to tighten up how AirTags that don’t belong to a certain user can be detected, but these notifications have proven buggy and have often waited far too long to alert users. Add in the fact that Apple has seemed to treat Android integration as an afterthought, not a necessary partnership in order to ship a device like this, and Apple’s incompetence looks a bit more severe.

I highly doubt that Apple is going to be able to design their way out of this problem. Regardless of what they ship on iOS to backtrack issues, Android’s fractured ecosystem means that safeguards won’t reach an awful lot of people who could be targeted.

For a nascent product category with such PR liability potential, it’s hard to see how Apple justifies continuing to sell AirTags. It’s a unique error from Apple in that the company delivered exactly what they initially promised but failed to consider the full scope of that initial promise’s direct consequences.

Elizabeth Holmes at Theranos Trial

(Photo by Justin Sullivan/Getty Images)

other things

Here are a few stories this week I think you should take a closer look at:

Elizabeth Holmes convicted on 4 of 11 counts
At long last, the trial of Theranos founder Elizabeth Holmes reached a resolution. Now, we wait for sentencing as well as further guidance on whether Holmes will be retried for several of the counts that the jury could not reach a verdict on. “Holmes was found guilty of conspiring to defraud investors, as well as defrauding investors from the DeVos family, hedge fund manager Brian Grossman and former estate and trust attorney Dan Mosely. She was not found guilty of charges related to defrauding patients,” my colleague Amanda reported.

Google infringed on Sonos tech, trade court rules 
Google’s smart speakers infringed on key patents held by Sonos, a US regulator ruled this week, and the company will no longer be allowed to import the infringing products which are manufactured in China. Google has already begun rolling out design changes which it hopes will interrupt its ability to sell its smart speaker devices. Sonos has seen its early lead in the smart speaker war dissipate as tech giants have thrown their weight around, but the smaller hardware company isn’t shrinking away.

A smaller, quieter CES
The Omicron wave stopped the TechCrunch team from making our way to Las Vegas to check out the latest gadgets at the Consumer Electronics Show, but we were at the show in spirit and watching along with countless livestreams. While it was certainly a more low-key year, there were still plenty of wild gadgets this year. Here are some of the best ones we saw.

Image of a megaphone on a pink background with colorful balls in the air to represent marketing.

Image Credits: Jasmin Merdan (opens in a new window) / Getty Images

added things

Some of my favorite reads from our TechCrunch+ subscription service this week:

How startups can prevent tech debt from piling up
“…Favoring a short-term plan to get a faster go-to-market option is not always bad, provided the business has a backup plan to deliver well-designed code that would simplify future iterations and innovations. But for startups, reworking is difficult as deadlines and resource crunch prevent developers from producing clean and perfect code. Startups prioritize short-term plans and focus more on adding functionalities to achieve milestones, sign up marquee customers or raise funding. This roadmap shuffling and disregard for the long-term view trigger tech debt…”

5 growth marketing predictions for 2022
“…It’s been a crazy year in growth marketing, what with the meteoric rise of TikTok, radical iOS privacy shifts and a staggering $240 billion poured into U.S. startups as of September 30. All of this new money has meant heavier investments in growth marketing throughout 2021. The heavier investments have occurred during uncertain times, with startups scrambling to find ways to measure iOS conversions and unlock TikTok as a new channel…

3 things founders need to know about M&A
“…M&A is particularly beneficial for startups that struggle to scale operationally because they essentially buy cash flow, revenue and other companies’ traffic, meaning startups grab a bigger share of their markets. They’re also a good way for startups to find, consolidate and experiment with their value proposition. The problem though, is that most founders don’t know how to get started with M&A and resign themselves to the shadows of bigger players. But mergers are accessible and advantageous to businesses of all sizes…”

Thanks for reading, and again, you can get this in your inbox every Saturday morning from the newsletter page, and follow my tweets @lucasmtny.

Have a great week!