Silicon Valley culture is not to blame for Holmes’ crimes

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Silicon Valley’s reputation, once compared to the glory of Florence in the Renaissance, has crumbled in recent years because of its power, lack of privacy, and arrogance. Then, as the trial of Theranos founder Elizabeth Holmes wrapped up, the cynics decided things were even worse than they thought.

Remember, they’re talking about Silicon Valley, described in happier days as the place that made things possible that had never been possible before. Suddenly, critics said it was the culture of the valley that had turned Elizabeth Holmes into a con artist.

“The founder of Theranos can cite the hyperbole of Silicon Valley in defense,” a Los Angeles Times headline said. The Associated Press questioned whether this affair could “deliver a sobering message to a culture of Silicon Valley which is often lost in its pride and bluster.” The New York Times described the problem as “the fantasy world of Silicon Valley”. The Washington Post said Holmes’ conviction represents “the ultimate calculation of the daring Silicon Valley she personified.”

Of course, it’s fun to kick someone when he (or she) is down. But it’s Elizabeth Holmes, not Silicon Valley, who deserves the kick.

Yes, she was hyperbolic.

She also committed fraud.

Other people at the IPO grave have died, but for much more mundane reasons as they tried to turn the impossible into routine.

Some were ahead of their time, in technology or in customer demand. Some had no one in management with experience in the underlying industry. Some could not raise enough money. Remarkably, their successors have often enjoyed enormous success because of their Silicon Valley genius – and without being crooks.

For example, Webvan was abandoned in large part because of his extravagant costs in a business where you “make pennies on a loaf of bread” as my father the grocer used to say. But, 20 years after its bankruptcy, grocery delivery seems like a smart enough idea and certainly not a fraud. In fact, Instacart, one of Webvan’s heirs, is valued at $ 39 billion, suggesting that a great vision well executed is better than fraud or hype.

A company called etoys believed that selling toys on the Internet would work. This is not the case, because of the execution, not the fraud. Amazon picked up where etoys fumbled and now has a huge share of the toy market.

A former U.S. surgeon general started drkoop.com, arguing that the web could provide in-depth layers of medical information for those of us who aren’t doctors. He was right, but the site went bankrupt in 2001. It was a competitor, WebMD, launched a year earlier, which confirmed his intuition. WebMD was sold five years ago for $ 2.8 billion.

They succeeded as Silicon Valley always has: by learning from the mistakes of others, recognizing the transformative power of the internet, finding a niche that would attract investors and customers, hiring brilliant employees and, in some cases, creating remarkable cultures. (Full disclosure: I lived in Silicon Valley for almost 30 years and still have connections to the valley.)

Guess what these successful start-ups and others are missing: criminal activity, bragging, pretense, shamelessness, hype. These founders did not need it. Either way, the Sarbanes-Oxley Act of 2002 largely prohibits them. If in doubt, ask Elizabeth Holmes to explain.

Jerry Ceppos is the former editor of The Mercury News and was vice president of news for Knight Ridder, the news company. He was dean of two schools of mass communication and still teaches at one, the Manship School of Mass Communication at LSU.

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