Theranos and Elizabeth Holmes: the Marketing of Silicon Valley’s Favorite Villain

A fraud, an earnest entrepreneur or both?

Elizabeth Holmes, former CEO of Theranos
Holmes and her business partner now face criminal charges. Theranos
Headshot of Patrick Coffee

From the very beginning, agency leadership knew that Theranos was no normal client and Elizabeth Holmes wasn’t an ordinary executive.

This mysterious entrant to the startup scene had already begun to cause a stir years before fame and controversy turned her into both a pariah and an object of obsession.

When she told us about the product, it sounded phenomenal,” said Stan Fiorito, former managing director at TBWA\Chiat\Day Los Angeles. “We didn’t see it, but we were really excited about it.” Fiorito served as account lead on the Theranos business and, later, a key source for Wall Street Journal reporter John Carreyrou’s work that led to the company’s dissolution.

The product in question was a tiny “Nanotainer” that would allegedly perform all standard blood tests using a single drop of blood as part of a far larger “Edison box” processing unit.

Theranos Sample Collection Device

According to Fiorito, agency and client first connected by way of a venture capital firm called Sandbox Industries, which brokered a 2012 meeting between Holmes, her brother Christian and Theranos president Ramesh “Sunny” Balwani as well as himself, TBWA L.A. president Carisa Bianchi and creative leader Lee Clow. Holmes admired Clow’s legendary work for another tech startup based in Cupertino, Calif.

“We’re the Apple agency, and she wanted to emulate Steve Jobs,” said Fiorito. “That’s why our involvement becomes interesting.”

In that initial meeting, Fiorito said Holmes spoke of a desire to follow the famously “intimate” relationship between TBWA and Apple while making grandiose claims about the Edison box’s active deployment among troops on the ground in Afghanistan. The team didn’t question these statements, in part because the company boasted a board led by such heavyweights as former secretary of state George Shultz and a mission filled with inspiring sentiments like those voiced by the now-former employees in this clip.

“You kind of had to take Elizabeth’s word for it,” said Mike Peditto, who was an account director at the time.

And they did. But none of it was true.

Theranos—once valued at approximately $10 billion—is no more. Onetime wunderkind Holmes and Balwani, her former partner in business and domestic affairs, stand charged with nine federal counts of wire fraud and conspiracy. And the world remains captivated by her tale of deceit, which inspired Carreyrou’s bestseller, Bad Blood, as well as the ABC podcast The Dropout, HBO documentary The Inventor and a forthcoming feature film starring Jennifer Lawrence.

In many ways, this is a tale of marketing gone wrong.

The early months

That first meeting preceded an entire year of unexplained radio silence. Negotiations only began when the company reached out to TBWA again in 2013 and said they were “ready to turn things on,” with the agency going to work in “stealth mode” under code name Stanford. No one outside that team knew the nature of the client or the project, which initially focused on developing a Theranos website, logo and messaging surrounding its nascent Walgreens partnership.

Clow, who had already begun moving toward retirement, was not directly involved in the account. Lead creative duties went to Patrick O’Neill, an ecd who played key roles on Visa and other clients and would eventually become Theranos’ in-house chief creative officer in early 2014.

“Our first meeting was about the mission of the company: to create affordable, accessible diagnostic blood testing for people everywhere,” O’Neill told Adweek. As he put it in a later story regarding his move in-house, he was excited about shifting from “getting people to buy products they may not need” to “promoting something that everyone needs.”

In the early days, Fiorito said Holmes lacked the professional polish that would later define her persona and often “looked a little like she just rolled out of bed.” He said she sounded “like a robot” in most settings but recalled one specific incident in which she presented the agency team with “a lunch bag of knit finger puppets” she wanted to give to children who’d just gotten their fingers pricked. According to the executive, her famously deep voice “got a little higher” in that unrehearsed moment.

Despite her very open admiration for Apple, O’Neill also said, “It wasn’t like everyone was like nodding along saying, ‘Let’s make you Steve Jobs.’ The media turned it into that later.” For example, Holmes insisted that she wore black turtlenecks every day out of convenience, not to mimic Jobs. But the mythology fed on itself.

No one disputes that the founder had lofty ambitions that often ran headfirst into reality. While TBWA never had to seek the sort of FDA approval that Theranos never received, its teams still tried to write legally viable copy for products that would be used in a medical context.

“If she couldn’t say it, she would still push for it,” recalled Peditto. “She had a certain way of saying, ‘No, this is what we’re doing.'”

The brand eventually revised some of its more dubious claims, like the idea that one drop of blood could power the entire testing process, but its overall message stayed the same. This 2014 campaign, produced by O’Neill after his move in-house and directed by legendary documentarian Errol Morris, remains the most visible evidence of the millions Theranos spent on marketing.

Reality sets in

Questions began to emerge among the TBWA team even before Holmes had begun her rapid-fire ascent to the top of the business world.

Most important, none had ever seen evidence that the product actually worked. Fiorito recalled the single time he witnessed the Edison box in person, when Theranos offered to test the blood of two other agency executives very early in its relationship with TBWA. “The machine made some noise, and they were like, ‘Don’t worry, we’ll get results back to you in a day or two,'” he said. “We never got them.”

He also had to explain the basic concepts of marketing services to Balwani, who presented “unbelievable” proposals like placing Theranos “wellness centers” in 2,400 pharmacies within three months. (Approximately 40 such centers were ultimately built in Arizona and California.)

I was sitting on a $10-12 million account, and we were billing a lot of hours but not producing much,” said Fiorito. “Product rollout wasn’t happening, and Elizabeth wouldn’t approve copy on anything. That started creating the doubt.”

Agency staffers still assumed that Theranos’ primary issue was the need for capital to match its rapid growth and development. Citing a trip by Holmes to meet Singapore’s minister of health, Fiorito said, “I thought, Maybe they need to sell the product to foreign governments so they can have the cash flow to make it.”

Around the same time, Peditto said Holmes began working with San Francisco-based experiential and influencer agency Grow Marketing and its co-founder Cassie Hughes to boost her public profile. She scored media placements like a fawning Wall Street Journal profile, followed by the famous covers of Inc., Fortune and Forbes as investments poured in and Theranos’ valuation soared. One key element of her appeal, according to O’Neill and Fiorito, was the fact that she was a female entrepreneur—still an unfortunate rarity in the tech and healthcare fields.

As Holmes says toward the end of this short on women in the workplace, “Next to every glass ceiling there’s an iron lady.”

Grow has not responded to a request for comment on this story.

There’s no there there … or is there?

Meanwhile, Theranos continued delaying and making new excuses about its lack of a demonstrable product.

“We were told specifically, ‘Shut up, get it done and don’t worry about that,'” Fiorito said. The account team later learned that Theranos had been using FedEx to ship blood samples from its Walgreens wellness centers to a lab in Palo Alto because the Edison boxes didn’t function properly.

TBWA also had “lengthy and contentious” arguments with Balwani over pricing, a dispute that continued after the relationship withered and died in early 2014. “We threatened to sue, they threatened to sue, and we negotiated to get half of what we thought we were owed,” Fiorito said.

Toward the end of their time working for Theranos, Peditto said TBWA was largely concerned with matters of managing Holmes’ increasingly visible public profile. “We talked about making a Twitter account for her,” he said. “Who would she follow? What would her username be?”

The client then took an unusual step by hiring away top TBWA talent. As Peditto put it, “They took our whole UX department, they took one of our coders and they took several of our designers.” O’Neill went to Theranos as well, followed closely by Bianchi as chief marketing officer in the fall of 2014.

“Elizabeth liked thinking of me, and treated me, as a creative partner,” O’Neill said.

As he entered his new role, the media hits began to have their desired effect, and his responsibilities ballooned. In fact, the former CCO told Adweek he did everything from hiring Morris to designing the company’s offices and Walgreen’s centers and art directing the now-famous photos that currently double as marketing materials for the HBO documentary, in which Holmes holds her hand in a perfect circle representing both the flower of life and the “o” in Theranos.

Elizabeth Holmes of Theranos holds a small vial of blood

“I was always the guy making sure it was that way,” O’Neill said, and Holmes’ growing fame “reinforced that we were doing the right thing as far as communicating what the brand stood for.”

Along the way, he helped schedule events like a 2015 “jobs message” visit to the company’s manufacturing plant from Vice President Joe Biden. He also said he and others trained Holmes for her appearance at 2014’s Ted Talks spinoff Ted Med. Many saw that speech, characterized by her signature staccato style, as a breakthrough performance.

Some observers have since noted its near-total lack of specifics.

The beginning of the end

According to O’Neill, he, Bianchi and the rest of the “TBWA expats” still very much believed in the Theranos mission, and they had been shielded from problems with engineering and product development in what he described as a “church-state separation.” In fact, they were not even allowed in the engineering section of company headquarters.

Any issues regarding the product itself were perceived to concern when it would be ready, not whether it worked in the first place.

There were naysayers, but there always are,” said O’Neill, comparing Theranos to other upstart businesses like Tesla. “People thought Steve Jobs was crazy when he was going to open his first Apple Store.”

A sign of the marketing team’s solidarity comes through in this rough cut of a proposed hero ad for Theranos that was never released but lives on in O’Neill’s portfolio. It combines tragic scenes from films like Up and Brokeback Mountain, implying that the company’s efforts would eventually save and prolong the lives of many.

Approximately one year after Theranos officially cut ties with TBWA\Chiat\Day, Stan Fiorito received a call from John Carreyrou. His first story questioning the legitimacy of the company’s blood tests went live on Oct. 16, 2015, and then the real fight began.

O’Neill told Adweek that TBWA’s decades-long relationship with Apple may have played a role in some executives’ continued faith in Holmes. After The Wall Street Journal’s reporting began to chip away at the Theranos narrative, O’Neill said reactions ranged from “I told you so” to those of defenders who attributed criticism of Holmes to sexism, comparing her to Martha Stewart or accusing the Journal of “colluding with the diagnostics industry.”

“That was all shattered when the CMS ruling came in the summer of 2016,” according to O’Neill. Regulators revoked the company’s right to operate its own facilities, which later shut down entirely as Theranos laid off more than 300 employees and attempted to pivot toward developing products to sell to external labs.

O’Neill’s first direct involvement with those products came, he said, over the same summer, when his team created a video of the “miniLab” in action for a gathering of the American Association of Clinical Chemistry.

“I thought they were going to throw tomatoes at her,” he said of the audience’s reaction to the video below. “They played ‘Sympathy for the Devil’ when she came onstage.”

This was only a hint of things to come. Almost exactly one year ago, the SEC charged Holmes and Theranos with fraud for deceiving investors. She agreed to a settlement, but three months later she and Balwani received a federal indictment on similar charges.

“Were we surprised by the Wall Street Journal stories? Absolutely not,” Peditto said. “I used to Google ‘Theranos scam.'”

Both account executives said nothing in their careers truly prepared them for this experience. Peditto compared it to marketing a Jimmy Dean sandwich, joking, “If the sandwich doesn’t taste good, nobody buys it, you know?” On a more serious note, he said “no one gives a shit” when agencies regularly challenge claims made by clients in fields like automotive, adding, “It’s not my job to do the due diligence to see if technology works. It’s the client’s.”

A turning point for Fiorito came at the end of his first call with Carreyrou, when the reporter asked why he hadn’t considered becoming a whistleblower. (In his book, Carreyrou wrote of faulty diagnoses from Theranos tests leading to potentially deadly prescription practices.) “It hit me in the chest,” he said. “I responded, ‘I’m an ad guy.’ And the product wasn’t deployed widely, so I didn’t think it would be an issue.”

Once the labs closed, O’Neill realized that the company would not be marketing to consumers and told Holmes that he was no longer interested in working with Theranos. (Bianchi, who had left months earlier, did not respond to requests for comment sent to her social media accounts.) O’Neill said he and Holmes parted on good terms and that, while she grew “defensive” in light of all the criticism, she also remained “unwavering” in her vision.

He now serves as chief creative officer at Vizible, an agency dedicated to connecting brands with the LGBTQ community.

In hindsight

The question remains: was Holmes a sinister fraud or a well-meaning entrepreneur whose ideas weren’t as fully formed as so many wished them to be?

Fiorito, now CMO of agency space150, called the company’s mission “a beautiful notion” but said Holmes is ultimately a villain, asking, “How do you go so coldly against everybody who worked at that company and mislead the public at large?” He placed an even greater share of blame on “puppet master” Balwani, who hid his relationship with Holmes (nearly 20 years his junior) for years and left Theranos soon after the first sanctions came down in 2016.

O’Neill argued that observers refuse to consider the potential validity of Holmes’ ideas in light of her “fake it ’til you make it” marketing strategy. “You can’t do Apple with people’s health. It’s because those protocols were not followed that she’s reviled,” he said. “If [Theranos] had never left the R&D phase, this wouldn’t be a story.”

While public criticism of tech executives like Mark Zuckerberg, Sundar Pichai and Jack Dorsey inspires new headlines almost every day, O’Neill also said he sees “some misogyny” in the schadenfreude surrounding Theranos’ collapse that makes him “feel bad for her as a human being” who didn’t start out intending to “rip people off and screw them over.”

“When you see someone from Silicon Valley with an incredible idea and it’s a woman, you so want that story to be true that you’re blinded,” said Fiorito. “That included Theranos investors and the board of directors.”

Finally, O’Neill believes Holmes deserves at least some credit for trying—as spectacular, expensive and potentially dangerous as her failure may have been. Citing agency chairman Jean-Marie Dru’s maxim, he asked, “Who doesn’t think the healthcare system needs disruption of some kind?”

A spokesperson for TBWA\Chiat\Day declined to comment for this story.

@PatrickCoffee Patrick Coffee is a senior editor for Adweek.
Publish date: March 15, 2019 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT