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How did Elizabeth Holmes scour the media on Silicon Valley?

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How did Elizabeth Holmes scour the media on Silicon Valley?

San Jose, Calif. — At the height of her accolades in 2015, Elizabeth Holmes, the entrepreneur who founded the blood testing start-up Theranos, was named Glamour’s “Woman of the Year.” Time put him on its list of 100 veterans. And he has published Fortune, Forbes, Inc. and graced the covers of T Magazine.

Theranos fell into scandal three years later, failing in its mission to revolutionize the health care industry. But it changed the world in another way: It helped sour the media on Silicon Valley.

That point was brought home on Thursday when Roger Parloff, a journalist who wrote a 2014 Fortune cover story on Ms. Holmes and Theranos, testified in a federal courtroom in San Jose, Calif., where Ms. Holmes was charged with 12 counts. The trial is going on. Why fraud? Mr Parloff said Mrs Holmes had misrepresented him, including the amount and type of tests Theranos is conducting, as well as his work with the military and pharmaceutical companies.

He was introduced to the start-up by Theranos’ law firm, Boise Schiller, Parloff said. The law firm had told him that “the real story was this remarkable company and its remarkable founder and CEO, Elizabeth Holmes,” she testified while watching Ms. Holmes directly in the courtroom.

The discovery that Ms. Holmes, the tech industry’s best-known female entrepreneur, was taking the world in the wrong direction about her company, marked a turning point in the tech press, which garnered a decade of largely positive coverage. Ended the long run. The reporter lashed out at the glowing articles he wrote about tech companies that spread the truth, shed light on the negative consequences of their products, or generally abused the trust they had with the public.

Credit…Paul Bruinoge/Patrick McMullan, via Getty Images

“Holmes just becomes this narrative of ‘you can’t buy what you buy,'” said Margaret O’Mara, a University of Washington professor and Silicon Valley historian. “‘It wasn’t what it should have been, and we fell for it.'”

After The Wall Street Journal published exposés in 2015 and 2016 showing that Theranos was not what it seemed, coverage of tech companies generally became more scrutinized.

Reporters dig into Facebook’s role in the 2016 presidential election, as well as scandals at Uber and a series of #MeToo allegations and labor revolts at tech companies. This change coincided with the realization that the tech industry was no longer the niche of idealistic computer geeks. It had become the dominant force in the global economy and needed more attention.

Now that Ms. Holmes, 37, is on trial, the media’s role in Theranos’ rise and fall is presented in painstaking detail. Prosecutors argue that Ms. Holmes used positive articles such as Fortune to gain credibility with investors, who invested $945 million in Theranos.

Those investors were often swayed by media coverage. Chris Lucas, a venture capitalist whose firm had invested in Theranos, testified that reading the Fortune article made him “very proud of the situation, proud that we were involved, very proud of Elizabeth.” Lisa Peterson, who managed a $100 million investment in Theranos on behalf of the wealthy DeVos family, picked up the language directly from the Fortune article in the report she produced.

Likewise, the media were eager to adopt the story of Ms. Holmes, a gifted Stanford University student on her way to becoming the next Steve Jobs. Here was a young, self-made female billionaire who was being compared to Einstein and Beethoven. Dressed in a black turtleneck like Mr Jobs, as well as adopting an esoteric lifestyle, he told Mr Parloff that she was a vegetarian Buddhist who did not consume coffee for the sake of green juice.

“There was an appetite for that kind of story, and he seized that opportunity and acted very carefully,” Ms O’Mara said.

The media’s fascination with Ms. Holmes became so intense that in 2015, her business partner and then boyfriend, Ramesh Balwani, better known as Sunny, warned her that the promotion was going to be risky.

“FYI, I am concerned about greater exposure without solids, which is lacking right now,” Mr Balwani wrote in a text message that was included in the court filing.

Ms Holmes dismissed the warning. Media coverage had helped Theranos clear a potential business deal, writing that, “the more it works the more haters will hate.”

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Later that year, The Journal revealed that Theranos’ technology did not do what the start-up had claimed, leading to a surprise oversight by regulators that exposed the company.

Theranos forcefully denied The Journal’s report. On CNBC, Ms. Holmes dismissed the article as “what happens when you work to turn things around.” According to text messages included in the court filing, she and Mr. Balwani sued for defamation. Together, they led Theranos staff into chanting a slur to John Carrerou, reporter for The Journal.

Soon after, Mr. Parloff published a lengthy correction to his Fortune article detailing how Theranos and Ms. Holmes had misled him. He blamed himself for not including more clear and vague answers to some of Ms. Holmes’ questions.

In court, demonstrations revealed that Ms. Holmes had shown Mr. Parloff the same falsified verification report – showing that drug companies supported Theranos’ technology when they did not – that she had sent to investors. Mr Parloff also said that Ms Holmes had told her that the military was using Theranos in Afghanistan, but the fact was so sensitive that he could not publish it or even ask General James Mattis, a Theranos board member. could not ask. It turned out that Theranos machines were never used on the battlefield.

“She was very concerned about trade secrets,” Parloff said.

Other outlets that had praised Ms. Holmes followed Mr. Parloff’s mea perpetrator. Forbes revised Ms. Holmes’ net worth to zero, which was once estimated at $4.5 billion. Glamor added an update to its Woman of the Year award after the Securities and Exchange Commission accused Ms. Holmes of fraud.

Even as she faces up to 20 years in prison if convicted, Ms Holmes continues to fight the media. Throughout the trial, his lawyers insisted on limiting Mr Parloff’s testimony. He filed a motion to force him to return all his reporting notes, even though he had already provided both sides of the case under summons a recording of his interview with Ms. Holmes.

The goal of that motion was to show that Mr Parloff was “coloured with bias” and a “willingness to blame any errors made in his initial article on Ms Holmes,” said Ms Holmes’ lawyer, John Kline. hearing in October

A judge rejected the proposal as a “fishing expedition”.

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