Change Agents: Elizabeth Holmes wants your blood
PALO ALTO, Calif. – Elizabeth Holmes is tall, smart and single. Well, maybe not truly single. "I guess you should say I'm married to Theranos," Holmes says with a laugh. Only she's not kidding.
For the past 11 years, Holmes, 30, has been laboring incessantly to build a company whose mission is to overhaul the nation's $60 billion blood taking and analysis business, literally one drop at a time.
The diagnostic-lab industry has long been dominated by names such as Quest Diagnostics and LabCorp, whose satellites many of us visit when our doctors want to run standard tests that typically require three or four vials of blood. But Theranos – a blend of "therapy" and "diagnosis" – has developed hardware and software that allows for many such tests to be completed with just a pinprick's worth of blood stored in a minute vial called a nanotainer.
The benefits of this breakthrough to Theranos could be riches; Holmes, who owns more than 50% of the stock in her company, has raised $400 million for a current valuation of $9 billion. But while Holmes is a billionaire on paper, nothing seems to interest her less.
"We're successful if person by person we help make a difference in their lives," says Holmes, who dresses exclusively in black and has a soft yet commanding voice that makes a listener lean in as if waiting for marching orders. "Our purpose is to give people access to the basic right of being (blood) tested when they need to or want to. If we can do that, then we will have made a difference."
Theranos broke out of its decade of development with a quiet announcement last fall that it would open up its Wellness Centers in a Walgreens store here in Palo Alto as well as 20 other store locations in Phoenix. Eventually, the goal is to be in all 8,200 Walgreens nationwide, sending blood samples to dozens of regional lab hubs.
The company's promise to consumers boils down to comfort, cost and control.
For patients who dread blood work – children, the elderly or anyone fearful of needles, including Holmes – the prospect of a mere pin prick could increase the likelihood of following through on a doctor's request for blood work (Holmes says 40% to 60% of Americans "are non-compliant with requisitions for blood work").
If fear doesn't factor in, cost may. Depending on insurance coverage, blood work can significantly affect a pocketbook. Holmes reads an e-mail from a diabetic woman who wrote the company to say her recent visit to a Theranos Wellness Center cost $34, "for (a wide variety of) tests that back in February cost my insurance company $876."
The woman, who calls phlebotomists "vampires," goes on to write: "I had three finger pokes and three adorable little nanotainers full of blood. It was awesome, amazing, pain-free, stress-free and a downright fun experience. I never imagined in my lifetime I'd say those words about having labs done."
Holmes is glowing as she reads the e-mail.
"That she opted to pay for her own lab and felt this way about it, that's not a paradigm people are used to," she says.
Which leads to the point about people having control over their health.
Holmes can wax philosophical and technical – this is a woman who taught herself Mandarin as a high school student in Houston and was an electrical and chemical engineering major at Stanford before dropping out in 2003 at 19 to start Theranos.
But on this point she couldn't speak more plainly. Holmes is adamant that having easier and cheaper access to blood testing, thereby more easily tracking your own health, "is a civil right," she says.
"My father did a lot of disaster relief work, and he was always in places where there was a lot of pain," she adds. "When I thought about having the greatest impact with my life, I thought about all the times people lose loved ones because diseases weren't detected early enough. I thought, 'I can play a role there.' "
Given that Theranos' current valuation slightly exceeds that of entrenched players Quest and LabCorp, "one wonders if there is some over-exuberance" about the company, says Eric Lakin, analyst with DeciBio Consulting.
"(Quest and LabCorp) rely on an extensive network of employees, lab facilities and transport systems to coordinate the fast, reliable and accurate results they offer to patients," says Lakin. "One of the largest hurdles Theranos will have to address is the massive infrastructure requirement necessary for a national expansion."
Holmes smiles when she reads the list of next-step hurdles.
"We are patient and we're building this company for the very long term," she says, sounding a bit like her far more volatile hero, Steve Jobs. "We're looking to reshape the system."
If Holmes is on a vision quest, she has gotten some impressive names to glimpse the same health care future that she's seeing. Besides a deep medical advisory group, her board of directors includes former secretaries of State Henry Kissinger and George Shultz, former Defense Secretary William Perry, and former senators Sam Nunn and Bill Frist. On point for legal matters is legendary trial lawyer David Boies.
"Elizabeth's iron determination and great intellectual ability turned me from a mild skeptic to an enthusiast," says Kissinger, adding that he was introduced to Holmes by his friend Shultz.
"We aren't exactly a group of people who give away our time lightly," Kissinger says with a laugh. "But we are impressed with her commitment to lowering health costs and bring this advance to developing nations. Elizabeth may make a lot of money, but that is not her motivation."
Kissinger adds that board meetings often last all day, with conversations continuing into cocktail hours afterward.
Far from being intimidated by such an accomplished board, Holmes "invites argument and debate, though it's always absolutely clear she knows where she wants to go. She's a leader who doesn't act like a dominant charismatic personality. And those are often the strongest leaders."
Holmes brushes off such compliments. For her, Theranos isn't just a business idea or a cash machine or even her chance to make history. Rather, it's simply the only thing she wants consuming her every waking moment.
"When I realized this is what I wanted to do with my life, things got easy," she says softly. "Because when you reach that moment when you've found what you're born to do, well then you just go do it."
ABOUT ELIZABETH HOLMES, 30
What: Founder and CEO, Theranos, which aims to reinvent the way blood tests are taken and processed
Where: Palo Alto, Calif.
Are you afraid of needles? "Yes, I have a big fear of needles. As do a lot of people. It's right up there with spiders and snakes."
Why did it take a decade from idea to execution? "We needed to make the chemistry such so that it would only require small volumes of blood. We had to redevelop that analytical system to handle small volumes. We had to build the infrastructure around it all through software and automation to minimize the involvement of humans, where manual error could be great. It's software, hardware and chemistry. There's no shortcut."
Why is this your passion? "Too often you see someone fall, break a rib, go in to the doctor and discover a tumor. Today, blood work and science are able to provide more of a movie of your health, identifying trends before they become an issue. You can start to answer the questions, 'Where am I headed?' "
USA TODAY's Change Agents series highlights innovators and entrepreneurs looking to change business and culture with their vision. E-mail Marco della Cava at mdellacava@usatoday.com. Follow him on Twitter:@marcodellacava.