Elizabeth Holmes is far from the only tech leader overpromising and underdelivering
Hello, my name is Chris Stokel-Walker, and I’m a freelance tech journalist and author. Happy new year, and thanks for reading this first edition of TechScape in 2022.
It’s safe to say that it’s not a happy new year for Elizabeth Holmes, the founder of Theranos and – following a guilty verdict on four of 11 charges in a California court this week – a convicted fraudster.
Holmes, you may remember, promised her devices could diagnose a plethora of health problems from a pinprick of your blood, gaining coverage from the media throughout the 2010s. We now know the technology Holmes hawked to investors, the media and the general public was seriously flawed.
Theranos was founded in 2003 and collapsed in 2018, following a Wall Street Journal report by John Carreyrou that highlighted issues with the company’s test results. In court, Holmes was acquitted on three charges connected to patients who received erroneous test results, but as the Guardian’s Kari Paul writes, the case “marks a milestone for Silicon Valley – an industry that has for years evaded accountability in its pervasive culture of ‘fake it till you make it’ that encourages founders to make big promises, often with little proof.”
British entrepreneur and investor Vikas Shah describes Theranos as “a very expensive canary in a coalmine. For the last decade, we’ve seen investors pile money into [unproven] business time and time again.”
Such investment begets a vicious circle, in which the press and public play their own roles. Big money raises for hot new companies are fundamentally more interesting to journalists than dull business developments. We cover them enthusiastically (Forbes called Holmes the “next Steve Jobs”), which allows those companies in turn to raise more cash. Some companies even get to the point of publicly listing with great fanfare, then flopping as the share price sinks – often on the day they launch. It’s a pattern that’s happened too many times to mention, yet we still fall for it.
I’m also minded to think of Holmes’ business, and others like it, in light of the manifesto of a relaunched WIRED magazine, published this week by recently arrived editor Gideon Lichfield.
WIRED, of course, was a techno-utopian booster when launched in 1993. It heralded tech’s excellence, and captured the spirit of its time: a Jetsons like promise for the future of the world, carried on tech’s broad back.
Since then, we’ve all gone through the looking-glass. I often say I’m a tech-sceptic tech reporter, because like many I’ve been jaded by successive scandals and endless “jam tomorrow” promises of the likes of Theranos. More generally, many of us have become ground down by tech’s promise to radically rewrite our future, only to find that it’s little more than a rebranding of the past imbalances, designed to supplant one controlling power with another.
The liberation of the media from a small cabal of editors resulted in the torrent of fake news and the polarisation of our planet on the likes of Facebook. What was meant to be a decapitation of the old leaders and a replacement with a flatter hierarchy actually just entrenched the power of the old guard, and made social media companies more powerful. The promise of removing the gatekeepers in the old world of entertainment has done that to a certain extent, but has ended up making Alphabet, parent company of YouTube and one of the world’s richest firms, even richer – all while a phalanx of creators produce content for free. Even within the creator economy, the idea of a democratising force didn’t end up that way. 96.5% of YouTubers don’t make enough to break the US poverty line, according to one analysis, while TikTok disburses only around five per cent of its revenue to the people who produce its content.
All of which is to say: don’t believe the hype. Tech companies overpromise and underdeliver. They’ve spent decades doing it. They’re continuing to do it.
Yet Lichfield’s essay is an interesting one, because it discourages us from thinking simply of things as wholly positive or wholly negative. After years of yo-yoing from tech idealism to tech scepticism, we shouldn’t immediately discount the promise technology has to reinvent our lives. “We’re at what feels like an inflection point in the recent history of technology, when various binaries that have long been taken for granted are being called into question,” he writes.
It’s worth looking at the Theranos story through that lens. Yes, the company appears to have exaggerated or invented many of its claims. But there are a range of tech-first companies actually doing miraculous things in the field of medicine and diagnostics. The fact we’re able to shoulder the burden of the omicron variant of coronavirus is largely down to the likes of technoutopian companies BioNTech basically inventing new techniques to manufacture vaccines at a scale never before seen. Tech overpromises, and tech coverage often too readily repeats unlikely claims. But technology is still significant. For every tech bro trying to rebrand PDFs as “literature NFTs” (which has more than a hint of Uber rebranding the bus), there are people who are doing legitimately exciting things.
“The exciting part is we are genuinely at a time when technology is doing incredible things,” says Shah. “It’s not about being anti-utopian, but it’s about asking sensible questions. Is something fair and reasonable?”
Healthy scepticism is no bad thing, then. It’s what keeps the vast majority of society from buying into the sofar illusory promise of Web3, another gleaming vision of the tech-enabled future that promises to decentralise control, but so far as resulted in a handful of people getting filthy rich by selling cartoonish JPGs. It’s what protects you from the endless number of scams and thefts that are dominating the world of NFTs at present.
For years we have too readily accepted what tech founders and leaders tell us without thinking: “Is this really realistic?” Now, we’re running the risk of slipping too far in the opposite direction. The new challenge is striking the balance between the two.
The wider TechScape
“Mr Worldwide Shipping” Jeff Bezos was roundly mocked on Twitter for his New Year’s Instagram post, looking every inch a man who is trying desperately to move on from a $38bn divorce settlement.
But it’s not just gaudy clothes that bored billionaires with nothing better to do spend their cash on: they also splash out on rockets and satellites.
2021 was a record-breaking year for rocket launches, according to Ars Technica, with a launch every two days. The numbers don’t include suborbital launches, of which Bezos’s Blue Origin flight with William Shatner was one – but does include Elon Musk’s SpaceX flights to build out his web of Starlink internet satellites.
2022 is expected to be even busier. Space is getting crowded, as CNET reports – there’s been a fivefold increase in orbiting satellites in the last decade. It’s dangerous for us, and for the megarich wanting to buy a seat on extraterrestrial flights. Tourists complain about turbulence on regular planes: the risk of crashing into space junk may be another worry.
---I wrote a book about TikTok last year, and about YouTube two years before that, and am fascinated by the “creator economy” (which has lost its lustre as Web3 has become the latest buzzword among tech trend chasers). I can’t help but notice history repeating itself, as semi-fictional TikTok trainwatcher Francis Bourgeois (real name: Luke Nicholson) signed a global management deal this week.
Based on the press release, you can expect books, podcasts, live events and music from Bourgeois – which looks an awful lot like the same cash-ins the first generation of digital creators knocked out in the mid-2010s.
Fame, of course, is fickle – and the creator economy is a great gold rush. No one can blame people for making money, but my wish for 2022 is that creators think about quality of content, rather than quantity of cash. New Year resolutions never last though, do they?