The Hype Men (and Women) of Silicon Valley

On September 8, 2013, the Wall Street Journal published one of the first national press profiles of the now infamous Elizabeth Holmes. Written by Pulitzer Prize winner Joseph Rago, the article referred to Holmes’s company, Theranos, as a “breakthrough of instant diagnosis,” “revelatory,” and a rare adherent to the principle of “self-transparency.” Soon after, Holmes rocketed to superstar status with both the technology and general press, while Theranos rapidly achieved unicorn status. Elizabeth Holmes, or at least the idea of her, grew into a preternatural figure, unrestricted by the conventions of business leadership, due diligence, and even science itself. Who, after all, could argue with the superhuman image staring back at them from the cover of Fortune?

In September 2018, Theranos announced its dissolution just months after Holmes was charged with “massive fraud” by the Securities and Exchange Commission and nine felony counts by the Department of Justice. In a stroke of irony, Theranos’ precipitous decline is largely attributed to the investigative reporting of John Carreyrou, a long-time journalist for the Wall Street Journal.

While arguably very few companies exhibit a Theranos-level of disconnect between fact and reality, the media phenomenon surrounding Elizabeth Holmes and her eventual unmasking begs an important question: is the tech press unintentionally engaged in Silicon Valley kingmaking?

The discussion surrounding the impact of technology on the speed, practices, and mediums of modern journalism is generally quite robust. What is more often left opaque is the increased symbiosis between the technology industry and the journalists and publications dedicated to its coverage. Perhaps most visibly, large technology companies are extending their business models and vast resources into the sphere of traditionally independent news outlets. Jeff Bezos’ acquisition of The Washington Post, for example, or the flipping of The New Republic by Facebook co-founder Chris Hughes give reason to seriously consider the level of editorial control and independence afforded to even the largest publications. Meanwhile, Facebook’s role as the “partner-competitor-savior-killer” of the press makes clear that potential conflicts of interest are built directly into modern content distribution models.

A Sampling of News Site Traffic Generated by Facebook in December 2017 (via Recode)

For smaller and more niche press outlets that lack the clout of America’s media mainstays, money and power from Silicon Valley companies can pose a threat that verges on existential. Despite its growing notoriety in the investigative and political journalism spaces, BuzzFeed, as one example, is largely funded by technology venture capitalists and faces serious critiques for its use of corporate-sponsored posts and articles, which can undermine the credibility of opinions rendered on individuals and companies alike. Even as early as six years ago, a contributor to the technology news site TechCrunch responded to criticism of what readers perceived as an influx of high-volume, lower-quality, and marketing-esque content by asserting, “If we didn’t have to shovel this stuff into your constantly grinding maw, we’d have a lot more time to write 4,000-word reviews of Atheros chipsets.”

While BuzzFeed and TechCrunch soldier on, the now-defunct Gawker Media exemplifies the risk of antagonistic tech industry coverage. Gawker was by no means an exemplar of journalistic craft, but its sharp criticisms of, and general attitude of skepticism toward, Silicon Valley and the elites of American society pushed narratives that more mainstream outlets could only approach with caution. That Gawker was shuttered after a lawsuit brought by wrestler Hulk Hogan and bankrolled by Silicon Valley billionaire Peter Thiel only adds to the concerns that the tech industry exerts too much control over its own coverage and public image. Thiel’s personal involvement in the Gawker suit effectively sets a precedent for other tech magnates to silence media elements that threaten their personal and corporate personas.  

Good Morning America’s Coverage of Thiel’s Involvement in the Hogan-Gawker Suit (May 2016)

When asked what both the press and consumers of the press should take away from the collapse of Theranos, John Carreyrou remarked:

“It’s not just the media and consumers of media – it’s really American society at large. We’ve come to deify these young college dropouts who found these startups in Silicon Valley and attract a lot of funding…I think the lesson is that these are, in the end, just young kids and we’ve turned them into these icons and heroes…I think the Theranos scandal should make us re-evaluate this whole value system.”

To Carreyrou’s analysis, one can add that we must also question why this type of deification is occurring on a cultural level – is it because these individuals are simply so far above the rest in intellect and charisma? Or does a sycophantic narrative arise organically when those on whom we rely to ask the hard-hitting questions are pressured into throwing only softballs?

9 comments

  1. I love this post! It is informative and captures the essence of the political press on these digital news websites. These individuals are exposed at this level because society thrives on unconventional activity and start-ups that defy the odds. It is not that they are in higher standing because of intellect and charisma, it is the nature of trending digital media and stories that capture our attention and make us want to expose the truths behind their work.

  2. I completely agree with Carreyrou’s analysis. When the Theranos scandal broke, a lot of life science VCs and experts in the field warned against the lack of efficacy trials, but these warnings were eclipsed by the media buzz and commentary from technology gurus. The graphic you showed highlights how “fake news” can quickly become rampant. The top publication’s that received traffic from Facebook don’t fall into the reputable news outlet category, but instead popular culture and happen to have some articles on current events. This shows how one can tailor their newsfeeds to provide outlooks that align with personal opinions. On a larger scale, Jeff Bezos is using the same tactic. By acquiring the Washington Post, he is able to manipulate news articles and manage the information released.

  3. “the media phenomenon surrounding Elizabeth Holmes and her eventual unmasking begs an important question: is the tech press unintentionally engaged in Silicon Valley kingmaking?” – fantastic question! In my opinion: absolutely.

    In my strategic management class, we recently discussed why so many companies were going public while they were hemorrhaging money (Uber is a perfect example of this) and why their valuations were so high when their financials were so unimpressive. I believe that this is driven by investors drastically seeking the next Facebook or Google and they are taking huge risks with the hope of an enormous payout. As part of this, I think that people place Silicon Valley kings (or queens) as on pedestals in the hope that they will become the next Steve Jobs, Bill Gates, or Larry Page. I don’t believe the media is solely at fault, but they definitely perpetuate a bigger issue!

  4. I think the most interesting thing is that the media outlets such as TechCrunch don’t want to be releasing corporate sponsoring content just as much as readers don’t want to be consuming it. I think this definitely poses a risk to the tech industry and the kinds of stories are highlighted. The Elizabeth Holmes example is a great one where media outlets feel obligated to release content on a company and CEO that turned out to be completely bogus. This continues the spiral of Silicon Valley “kingmaking” and consumers dissatisfaction in the media they’re reading. I think it will take changes in the corporations, media outlets, and consumers to prevent people like Elizabeth Holmes from gaining such traction in an industry and being highly publicized.

  5. Fantastic post! You brought up a lot of important points that deserve more attention. The tech press is absolutely engaged in Silicon Valley “kingmaking” (and kingbreaking, for that matter), but given the conflicts of interest you touched on, I’m not so sure it’s unintentional. I think the decline in newspapers and similar journalism-based media over the past decade or so is an important thing to mention here, as it makes them easy targets for tech companies, who then buy them and can use them to pump out propaganda for their company or smear campaigns against other companies. It’s an important issue that doesn’t get much press and I’m glad you brought attention to it!

  6. This was an amazing post! I love how you used Theranos as an example of how quickly the media can cause situations to spin out of control – I’m sure this pressure played a part in why Elizabeth Holmes acted in the way she did. I think a large part of why young entrepreneurs from Silicon Valley are idolized and given so much air time is because they represent a dream come true for many of us. Successful startups give hope to countless people as they go through a college education (or not), and offer a bright spot in comparison to working your life away to accomplish someone else’s goal. Although it may not be in the best public interest to key in on these figures so extensively, I think the short of it is that we all want to see them succeed, and frankly, these are the stories that sell for that reason.

  7. Nice post. I’ve often said that in San Francisco/ Palo alto, 50% of the people are genuinely geniuses and 50% are crazy and full of crap (exactly percentages are unimportant). The problem is that it’s often difficult to tell the difference. Of course, I do note that Pat Grady (BC alumn, Sequoia capital) said it was pretty obvious to him that Theranos were liars from the outset.

  8. Great article! I was very interested in the Elizabeth Holmes story and have even read Bad Blood. As someone who doesn’t need blood tests there is no way I would have heard about her nor Theranos if it wasn’t for all the articles highlighting the unicorn status. I think it comes down to media companies doing due diligence because I never read about her poor management skills and negative attributes that have since come out.

  9. Great post and a very interesting read. The Elizabeth story is a super interesting topic. I find it insane the level of trust given to her through funding. It always amazes me what ideas get funded and what does not. Coming from an investment background, it is wild to see the lack of due diligence in this.

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