Not Super Feats, Just Feet of Clay

We were excited by Theranos' revolutionary blood-analyzing technology in 2013, though we did say at the time "it does seem too good to be true."

In 2015 the Wall Street Journal exposed the technology as fake, and in early 2018 the SEC imposed a $500,000 fine and other sanctions on Theranos' founder, Elizabeth Holmes. On Thursday it got worse for Ms. Holmes when Federal prosecutors filed criminal charges:

Ms. Holmes, 34 years old, and Mr. Balwani, 53, were each charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud in an indictment handed up Thursday and unsealed Friday. If convicted, they each face a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution to those found to have been defrauded, on each count.

“This indictment alleges a corporate conspiracy to defraud financial investors,” said John F. Bennett, special agent in charge of the Federal Bureau of Investigation in San Francisco. “More egregiously, this conspiracy misled doctors and patients about the reliability of medical tests that endangered health and lives.”

Justice will be meted out to Ms. Holmes, but one huge aspect of the story is the eagerness of people to believe in a young, self-made female entrepreneur who disrupts an industry and even wears black turtlenecks like Steve Jobs.

No, there are no tech superheroes, and our anointing them as such has been bad for their companies and investors alike.

Elon Musk, Tesla; Elizabeth Holmes, Theranos; Travis Kalanick, ex-CEO, Uber (WSJ graphic)