Elizabeth Holmes and Theranos

The Theranos saga demonstrates the power of character to persuade even when evidence and logic clearly state the opposite


A reader contacted me after my last post about Putin and asked me if the rules of persuasion apply to the Theranos saga. Though I had followed the case closely, I have not used it as a case study before and had no plans to write about it in my book. However, the more I recalled the Holmes story, the more I saw it as yet another example of Aristotle’s insights at work in our own time, for the whole tale is a marvelous example of the power of character to persuade.


Let’s go back to the moment when Holmes first reached national prominence. It happened in April of 2015, when Time Magazine named her one of the “100 Most Influential People” in the world. Amazingly, her story in Time was written by none other than Henry Kissinger, and this is what he said about her:

Elizabeth Holmes’ is a story that could happen only in America. After her sophomore year she left Stanford to devote herself to a vision of health care available as a basic human right. When I was introduced to Elizabeth by George Shultz, her plan sounded like an undergraduate’s dream. I told her she had only two prospects: total failure or vast success. There would be no middle ground.
Elizabeth accepted only one option: making a difference. Striking, somewhat ethereal, iron-willed, she is on the verge of achieving her vision—through a new method of blood testing that significantly reduces costs, tests for a whole range of infections and is mobile and can therefore be easily transported to underdeveloped regions.
Striving for prevention and early detection, she is dedicated to transforming health care around the world. She manages an expanding global business by the refusal to be daunted by any obstacle. Elizabeth is in the process of turning an undergraduate’s vision into a global reality. That she combines fierce and single-minded dedication with great charm makes her a formidable advocate. Others will judge the technical aspects of Theranos, but the social implications are vast.

Kissinger, who was on the Theranos board at the time, justifies her inclusion alongside people such as Apple CEO Tim Cook and Israeli Prime Minister Benjamin Netanyahu not with patents or achievements but by telling us about her character. She is “ethereal,” “iron-willed,” “fierce,” and “single-minded.” Indeed, glowing profiles of this student-turned-visionary could be found in many leading publications in 2015, usually accompanied by her photo in an enigmatic pose, such as the one in the September 2015 edition of Forbes below:


Her look helped sell the character story, of course: as she always did, she wears a simple black turtleneck that echoes Steve Jobs, and she holds the famous “nanotainer” that was going to revolutionize medical testing. To be fair to Kissinger, Theranos’ board included not just him but luminaries from many fields, all dazzled by Holmes’ tale of what had happened and her “vision” of what was to happen. Here are just some of the names:

  • George Shultz, former US secretary of state

  • William Perry, former US secretary of defense

  • Sam Nunn, a former US senator

  • James Mattis, a retired US Marine Corps general who went on to serve as President Donald Trump's secretary of defense

  • Richard Kovacevich, the former CEO of Wells Fargo

  • William Frist, a heart and lung transplant surgeon and former US senator

  • William H. Foege, former director of the Centers for Disease Control and Prevention

  • Riley P. Bechtel, chairman of the board of the Bechtel Group Inc. at the time.1

John Carreyrou, a Wall Street Journal reporter who wrote an account of the Holmes story, told an interviewer that character was the main reason people joined her board without asking too many hard questions. Indeed, we see this effect in Kissinger’s Time blurb: … I was introduced to Elizabeth by George Shultz. “I think some people saw the board,” Carreyrou notes, “and thought, ‘these are people with sterling reputations. Surely they wouldn't associate themselves with anything that was remotely questionable.’” As he explains:

By the time I started digging into the company, she had cultivated a chummy relationship with the White House, with the Clintons. She had David Boies as the outside counsel, who sat on every board meeting. That was another thing Partner Management Fund [a major investor] looked at and thought, "Nothing can be off at a company where arguably America's most famous lawyer is guarding the shop."

Carreyrou wrote the October 2015 Journal story that started the unraveling of Theranos, and he believes that her use of emotion, while not her primary persuasive mechanism, also helped to sell her story:

At the height of her fame, she was constantly playing on people's heart strings. Her heartwarming story was that she had created this amazing technology that would make blood testing easier, faster, more accurate. And as a result disease would get diagnosed at an earlier stage, and fewer people would have to say goodbye to loved ones too soon. That was her catch phrase. If you go back and watch her on YouTube or in various public appearances, she used it over and over again.

Theranos was a fraud, as we now know, so let’s fast forward to her 2021 trial for lying and deceiving investors. Once again, Holmes goes for what she knows: character and emotion. It started with a complete visual redesign that the New York Times analyzed in one story:

Gone were her signature black turtlenecks and black slacks; gone the bright red lipstick and blond hair ironed straight as a board or pulled into a chignon. Gone, in other words, was the look immortalized on magazine covers of Fortune, Forbes and Glamour (and, yes, T: The New York Times Style Magazine). The look that inspired a host of ironic imitators at the beginning of her trial. The look that famously referenced both Steve Jobs (but glamorous!) and Audrey Hepburn. The one that tapped into the Silicon Valley myth of the mind beloved of the tech world, in which having a uniform means having more time to think about substantive things rather than clothes….Instead there was … sartorial neutrality, in the form of a light gray pantsuit and light blue button-down shirt, worn untucked, with baby pink lipstick. She looked more like the college student trying on a grown-up interview look than the mastermind of a multimillion-dollar fraud scheme….By the time opening arguments began in September, the new look had been perfected: a no-name skirt suit (or dress and jacket or pantsuit) in a color so banal as to practically fade into the background.

But her attempt to reinvent her character went far beyond appearances and was, in fact, the foundation of her defense. As the Times noted, in her trial she was no longer the “fierce” visionary of the Kissinger days. Holmes was portrayed by her attorneys as a weak and weary victim of a much older man, Ramesh Balwani, who had been the chief operating officer of Theranos. He manipulated her constantly, her team told the jury, and he — the real mastermind behind the fraud — was ultimately responsible:

Balwani had a specific idea of how to make her into a good entrepreneur, Holmes testified, including her eating only certain foods that would make her “pure” and give her energy for the company, not sleeping much and having a “very disciplined and intense lifestyle.”
When she failed to live up to his expectations, Holmes said, Balwani would yell at her and sometimes force her to have sex with him when she didn’t want to, because “he would say to me that he wanted me to know that he still loved me.”

The culmination of her defense was the claim that rather than dislike her, we should pity Ms. Holmes for what she went through as a psychological and sexual victim, a persuasion strategy that included disclosing for the first time that Holmes had been raped while at Stanford. As her lead defense attorney noted sadly in his closing statement, it was Holmes who lost much more than any investor:

“She gave up her education, she gave up her youth, she gave up her close friends, a relationship with her friends, why? Because she believed that she built a technology that could change the world.”

As I wrote about Sarah Palin and her case against the New York Times, it was only natural that Holmes would return to the one thing she understood: the power of character to persuade an audience. It had worked wonders for Holmes when she founded Theranos in 2003, so her hope was not without foundation. However, it was a disastrous choice, because, like Palin, the very success of her first character creation (which took years to build) was too hard to negate in only a few short weeks in court. It was thus no surprise that she was convicted.


Holmes will be sentenced later this year. While she waits for that day, she remains free on a $500,000 bond and reportedly lives on the 74-acre California estate of her very wealthy partner. I am convinced that a different defense, one that acknowledged her past character fully and built a solid argument-based case against Balwani would have had a much better chance of getting her an acquittal. We’ll know more if such an option existed once his trial gets underway later in 2022. For now, it is enough to say that the persuasive power that made her famous failed her. In the end, Kissinger was right about only one thing in what he wrote in Time: “I told her she had only two prospects: total failure or vast success.” Sadly, it was the former that was meant to be.

1It is surely no coincidence that this is a list of older white men, and Holmes was an attractive young white woman.