Elizabeth Holmes has taught us a valuable lesson.
To do our due diligence.
I wrote this about 6 weeks ago in prepping for my first podcast, ‘Don’t Believe the Hype’ when Theranos founder and CEO Elizabeth Holmes was on trial in an American court for wire fraud and conspiracy to defraud. Today, she was charged with four of the eleven charges and potentially faces 20 years in prison.
To give a very brief background on Theranos and its Wonderwoman CEO, Elizabeth Holmes, when she was only 19 years old, she dropped out of Stanford to head a start-up revolutionary medical tech company called, Theranos. She and her partner in life and business, Sunny Balwani, promised investors and patients alike that with a simple finger prick and the resulting spot of blood, their revolutionary machines could medically analyse the blood in a way that in the past, only the standard blood test could. Meaning instead of the tourniquet, large vein puncture needle, and multiple blood collecting tubes, Theranos had developed a tiny finger prick device which was just as and even more effective.
On paper, this all sounded appealing. Especially for those who were fearful of the traditional blood test method. So attractive in fact, that following meetings with some of the most wealthy and influential business people in the world, including Rupert Murdoch, George Shultz, and Henry Kissinger, Elizabeth Holmes managed to, at its height, build Theranos’ worth to over $9bn.
Failing to complete their due diligence was the reason each investor gave in court for succumbing to Elizabeth Holmes’ sales pitch and handing over millions upon millions of dollars. That and a FEAR OF MISSING OUT. When they took to the stand, some of the world’s wealthiest investors stated that their friends were investing millions, and they didn’t want to miss out on the investment opportunity of a lifetime.
It is relevant because of the hype we can get lost in when it comes to all things in life. My podcast ‘Don’t Believe the Hype’ was specifically regarding taking care not to believe the hype when it comes to Cosmetic Medicine. Being wary of practitioners who appear to have all the followers, all the media attention, and all the glitz and glamour as shown on ABC, Four Corners episode — Cosmetic Cowboys.
Yet, it seems no one is immune.
In our quick fix and instant gratification society, we believe that due diligence consists of looking at someone’s social media feed and reading a few google reviews. It’s not that we are gullible and foolish. It’s that we simply want to believe what we are told.
It’s more common than you think. I was recently at the receiving end of a business scam. Someone led me to believe that they were skilled and capable of completing a project I desperately needed. I paid them handsomely, foolishly, before receiving the completed project. Upon receiving what they said was the completed project, 9 months later than the agreed date, I realised that I had been at the receiving end of fraud. Although my investment was far less than Theranos’ investors, I, too, had been sucked in by the exciting promises that were nothing more than lies.
A few days later, I spoke to a colleague who had fallen for a similar scam, and as we sat there forlorn, we tried to work out how and why we fell for it. It was the same reason the patients fell for the hype of the Dr and his colleagues highlighted in Cosmetic Cowboys and the same reason investors gave Elizabeth Holmes millions of dollars. Sure these people said exactly what we wanted to hear but mostly because we didn’t do our due diligence. And why didn’t we? Because we were too busy in our own businesses to take the time out to do it. We didn’t feel it was a necessary thing to do. We didn’t value it enough to make a few simple phone calls that would have proven quite quickly that we were scammed.
Due diligence can be as simple as speaking to objective people in the know. Ask two to three people you know who have worked alongside or with this person, have had treatment or surgery from, or have invested in the person.
Consider it; forewarned is forearmed and never be afraid to do it for everything you undertake in life.
“If it is too good to be true….it is probably a fraud.” ━ Ron Weber
