Opinion: Don't mistake Elizabeth Holmes as a shocking outlier. Another Theranos will come.

Silicon Valley and headline writers would have you believe that Elizabeth Holmes is one of the biggest frauds. Megan McArdle of the Washington Post would also have you think that misleading investors and regulators is far worse than exaggerating about “buggy electronics or overhyped subscription service.”

Yes, in the literal sense, Holmes is the biggest fraud to come out of Silicon Valley.  Theranos, Holmes’ blood testing company, was once valued at $9 billion even though it never had a fully functioning product and its promised technology never came to fruition. She initially raised $700 million, claiming that Theranos’ technology could run multiple blood tests from a mere pinprick of blood from a fingertip. Last week, a federal jury found Holmes guilty on four counts of fraud.

McArdle also has a valid point that lying about technology in the health care industry, where lives are literally at stake, is a particularly heinous act.  

However, using language such as “biggest fraud” and differentiating between Theranos and an average failed startup are attempts to distance Holmes from business as usual in Silicon Valley.  Don’t believe the hyperbole. Although Holmes’ public downfall was drastically different from the collapse of a typical startup, which has a 90% failure rate, her behavior and tactics were not.

While Holmes lied to regulators about her technology, Zenefits, an human resources software startup, created software that allowed its salespeople to bypass specific state licensing requirements to become a health insurance broker.  After settling with the Securities and Exchange Commission, its former CEO went on to raise $45 million initially for his next startup.

As Holmes was faking it until she never made it, Isaac Choi, founder and former CEO of WrkRiot, misled and deceived his employees about his financial and professional background.  Additionally, he lied to his staff and forged financial documents when he couldn’t issue paychecks.

There are striking similarities in Holmes’ fabrications to investors about the United States military using Theranos’ technology on the battlefield and Adam Neumann, the founder of WeWork.  According to the IPO, WeWork simultaneously loaned Neumann millions of dollars at a paltry annual interest rate of 0.64% as it paid him rent on properties he owned. Neumann wasn’t honest or transparent enough about his activities to the point investors got very nervous.

Everything Holmes did in pursuit of pursuit, monopoly, and fame was typical corporate behavior for Silicon Valley. The real reason she became a household name is because she wasted all of her investors' money on a product that didn’t work and was never going to work. At least her unprincipled counterparts were able to create some pretense of a final product.

Potentially misdiagnosing and killing patients cannot be the sole moral barometer for ethical behavior in Silicon Valley. If we continue to see such morally bankrupt "disruptions" in the workplace, then another Theranos is guaranteed to happen again. 

The only semblance of change I've seen is that investors are committed to doing more due diligence when listening to pitches and deciding to invest. I can appreciate the sentiment, but I'm struggling to see how that goal will be accomplished in an industry that reviles any attempt at regulation or substantive self-correction. Additionally, I'm not confident that extra scrutiny would have prevented Theranos from happening as Holmes was adamantly against revealing any details, claiming trade secrets. How do you investigate a technology you can't independently examine because there’s a single gatekeeper?

Holmes once said, "I’ve been knocked down a lot, and it became really clear that this was what I wanted to do, and I would start this company over 10,000 times if I had to." Given the current culture of unethical behavior and short-term memory in Silicon Valley, I genuinely believe her. After all, what's to stop her?

Maria Reppas lives with her husband and son in Virginia. She can be reached at www.mariareppas.com.