With Theranos, can we be done with disrupt culture now?

A chemistry is performed
so that a chemical
occurs and generates
a signal from the chemical
with the sample, which is
translated into
a result, which is then
reviewed by certified
laboratory personnel.

Okay, that’s not really free-verse poetry, but I thought maybe if I laid the words out as if they were, it would help convey something—anything. Nope. In fact those were the exact words used by the CEO of a $9-billion corporation to describe the technology behind its value proposition; and according to Maya Kosoff and Nick Bilton, both writing for Vanity Fair, those were the words that inspired Wall Street Journal reporter John Carreyrou to begin investigating the now-disgraced Theranos corporation to see if there was any substance behind all the hype. There wasn’t.

Two years ago, Theranos was a darling among tech start-ups—or at least with the tech press. With a Stanford-dropout founder, Elizabeth Holmes, becoming the world’s youngest “self-made” female billionaire, and its promise to upend the blood-testing industry, Theranos could not have been better scripted into the anthology of Silicon Valley’s “disrupt culture.” Unfortunately, Theranos’s story was too scripted; and last week, the SEC accused both Holmes and president Sunny Balwani of perpetrating a “massive fraud,” misleading investors “about the company’s technology, business, and financial performance.”

In fairness to the major Venture Capitalists of Silicon Valley (I never thought I’d write that clause), Bilton did note in his 2016 article that none of the big players actually invested in Theranos. Couple that with Holmes’s cryptically obtuse explanation (above), published in The New Yorker in December of 2014, and it’s hard to wonder how the company rose to such heights without anyone, other than apparently Carreyrou, kicking the tires a little harder. But in that same 2016 article, Bilton answers this question rather pointedly, blaming the fecklessness of the Silicon Valley tech press. “They embraced Holmes and her start-up with a surprising paucity of questions about the technology she had supposedly developed. They praised her as ‘the next Steve Jobs,’ over and over (the black turtleneck didn’t hurt), until it was no longer a question, but seemingly a fact,” Bilton wrote at the time.

Granted, a lot of tech news is fairly innocuous. Reporters get invited to flashy launches, attend conventions like CES, and publish articles, blogs, vlogs, etc. about the latest gadgets that may or may not be in production six months down the road. Right or wrong, the debut of the vibrating denim shorts isn’t likely to be a matter of life-and-death, which cannot be said for a company like Theranos jumping into the medical industry without anybody asking a tough question or two.

Of course, none of this is surprising if you’ve followed reportage about internet giants like Facebook and Google. Until the fallout from the 2016 election—which is still falling out, by the way—revealed Russian hacks, mass data breaches, and caches of bogus news, it was pretty tough to get the mainstream press to say boo about these companies. “It’s a game of access,” wrote Bilton in 2016, “and if you don’t play it carefully, you may pay sorely. Outlets that write negatively about gadgets often don’t get pre-release versions of the next gadget. Writers who ask probing questions may not get to interview the C.E.O. next time he or she is doing the rounds. If you comply with these rules, you’re rewarded with page views and praise in the tech blogosphere.”

That sounds like a fair description of the atmosphere before November 2016. Even when it came to stories about harassment or serious crimes like sex-trafficking, it was rare to see the technology press insinuate that platform operators might bear some responsibility. The underlying theme that internet equals freedom (not to mention stock valuation) so don’t touch it, continued to at least color—if not dominate—the narrative. But now, that narrative has shifted, and last week’s press release by the SEC addresses the industry directly, stating, “‘The Theranos story is an important lesson for Silicon Valley,’ said Jina Choi, Director of the SEC’s San Francisco Regional Office.  ‘Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.’”

Indeed. With stories like Theranos, the shake-up at Uber, and the still-unfolding saga of revelations about voter data-manipulation via social media, the SEC’s sober warning resonates well beyond the investment community. Internet and other technology companies shouldn’t just tell the truth to shareholders but also to the public, who are all stakeholders. For too many years, we’ve accepted the premise that any form of restraint (i.e. rule of law) in cyberspace will “hurt the innovation.” Apropos the SEC’s warning, though, internet platforms et al should be required to more clearly define the “innovation” supposedly being stifled by certain restraints; and maybe—just maybe—it’s the tech press who should be asking some of those questions.

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