There is no doubt that Silicon Valley has produced its fair share of infamous tech startup founders. From Elizabeth Holmes and her fraudulent blood-testing company to John McAffee and his shady cryptocurrency dealings to John Woodward and his disastrous launch of the healthcare website "Care.com," these entrepreneurs have made headlines for all the wrong reasons. Let's take a closer look at their stories, and see what lessons we can learn from them.
Elizabeth Holmes grew up in Houston, Texas, and was always interested in science and technology. After attending Stanford University for two years, she dropped out to launch her company: Theranos. There, she met Ramesh "Sunny" Balwani, who would become her business partner.
The premise of Theranos was simple: a blood test that could be done with just a few drops of blood using a new type of microchip technology and at a fraction of the cost of traditional methods. This would revolutionize the medical industry, making blood tests more affordable and accessible.
Holmes was hailed as a wunderkind, and her company quickly attracted big investors. Theranos was valued at nine billion dollars at its peak. However, it all came crashing down when it was revealed that the technology didn't work and that Holmes lied about its efficacy. She had duped Walgreens, who had partnered with Theranos to offer blood tests in their stores and put patients at risk with misdiagnosed blood test results.
Holmes was indicted on nine counts of wire fraud and two counts of conspiracy to commit wire fraud. She was convicted of only two counts of conspiracy and faces up to 20 years in prison. Her sentencing is set for October 2022.
If you want to learn more about her precipitous fall from grace, there are several TV shows and documentaries about Elizabeth Holmes and Theranos, including The Inventor: Out for Blood in Silicon Valley on HBO and The Dropout on ABC News.
John McAffee is a British-American computer programmer, and businessman who founded the software company McAffee Associates in 1987. He made headlines in 2012 when he went on the run from authorities to Belize after becoming a person of interest in the murder of his neighbor. His neighbor, Gregory Faull, was found dead with a gunshot wound to the head on the property that McAffee and Faull shared. Prosecutors claimed that McAffee was "obsessed" with Faull and had threatened him multiple times.
McAfee went into hiding and evaded capture for almost a month. He was arrested in Guatemala after claiming to be persecuted for his political beliefs in Belize. He was eventually arrested and deported to the United States. The charges were dropped in 2013, but McAffee's reputation was forever tarnished. The person responsible for Faull's murder has never been found.
In recent years, McAffee has been involved in cryptocurrency. He is a vocal advocate of Bitcoin and created a currency called "The McAffee Freedom Coin." He has also been accused of fraud and pump-and-dump schemes where he promotes a coin to drive up its price and then sells it.
John Kevin Woodward
John Kevin Woodward is the Chief Executive of ReadyTech, an online training software company geared towards employers and their employees. He's recently made his way back into the news with a murder indictment, 30 years after having first been accused.
In September 1992, his roommate's girlfriend, Laurie Houts, was discovered dead in her vehicle near Mountain View, California, after succumbing to strangulation by rope. According to the prosecution, Woodward had begun to develop feelings for his roommate, Brent Fulmer. However, a lack of evidence and a hung jury during two retrials resulted in the judge eventually dropping the charges.
Now, thanks to more advanced DNA technology, prosecutors allege that Woodward's DNA was found on the rope used to strangle Houts. He was arrested at JFK Airport and is being held in New York without bail while awaiting extradition from the Netherlands. If convicted, he faces life in prison.
What do these three stories have in common? They all started with ambitious young people with big dreams and a vision for changing the world. But somewhere along the way, something went wrong. Whether it was murder, fraud, or lying, these founders let their ambition get the best of them and ended up in hot water.
Do you think that Silicon Valley attracts a particular type of person? Or do you believe anyone can be driven to commit crimes if they're in the right (or wrong) circumstances?