I first heard about Elizabeth Holmes in 2015, when Forbes Magazine listed her as the world’s youngest billionaire, worth an estimated $4.5 billion dollars. I was intrigued and at the same time envious of her brilliance and entrepreneurship prowess. My first thought was, she must be an heiress or one from privileged demographics with safety nets, that dropped out of an elite institution and then went ahead to start her company. Back in 2014, Theranos was hyped by mainstream media as another brilliant ingenuity birthed out of Silicon Valley by a woman hailed and admired by very many women and burden entrepreneurs. She styled herself as a female Steve Jobs, by wearing black turtleneck sweater and black pants. In a short span Theranos ballooned to become one of Silicon Valley’s unicorn startups valued at an estimate $9 billion.
Holmes, a 19 years old Stanford University drop out, started her company on the assurances that her device could conduct a wide range of medical tests on just a single drop of blood. A household name in Silicon Valley, Sunny Balwani joined Theranos in September 2009. Sunny has a background in software engineering and has been involved in numerous startups. Sunny and Holmes partnered with Walgreens and Safeway to run a blood testing clinic but failed to deliver the device after missing numerous deadlines. She raised $700 million from investors including the Walton families and Rupert Murdoch. Her unproven blood testing technology was also approved by FDA thanks to the two former secretaries of states, two former defense secretaries and two senators who chaired Theranos board. At a minimum, venture capitalists tend to fund companies after a month of due diligence but Holmes enjoyed privileged status and so did not go through the same rigorous due diligence process.
Silicon Valley prides itself as a progressive utopia where multiculturalism and inclusion exist but if you look past the charade, you will see the deep-down racial disparities plaguing the area in every sector especially employment recruiting and venture funding, which is typically white and male. One will think twenty years after Jesse Jackson came to Silicon Valley to protest the lack of diversity and inclusion of Blacks and Latinos in the tech sectors and after being taunted by former Sun Micro system CEO as a terrorist, things would have rapidly changed. However, that’s not the case. In 2005, while I was working for Stanford University Hospital, on my way to the main campus, I was pulled over 5 days in a row by different cops for driving while Black. I was forced to wear hospital scrubs and when pulled over, I was immediately profiled as a medical doctor and then let go with no question asked. A few days ago, as I was at my mailbox sorting out my junk mail from important mail an LGBTQ white male came to visit his partner, saw me and immediately locked himself in his car, and when his Asian male partner came knocking on his window, they both started laughing over the weird encounter. In contrast, if you take a stroll in downtown Palo Alto or any nearby cities, you will be amazed at how commonplace inter-racial marriages are. My beloved daughter Olivia whom I named my company after is biracial. I won’t have a career in Silicon Valley if it wasn’t for a white recruiter that gave me the opportunity to prove myself to my previous employers at Stanford University or my former boss at Kaiser Permanente, that in no way doubt my capability to perform as one of his top employees. If not for my white professors at the University of San Francisco, I would have doubted my ability to think beyond corporate prison.
I migrated to the United States from Nigeria in the early 2000s to study computer science but when former president Bush’s recession hit, I was forced to change careers and move towards healthcare. While pursuing a career in healthcare, I felt like I was working in an industry that lacks innovation and that I would need to make a move towards technology by building my own company since that’s what’s trending in Silicon Valley and a symbol of the America dream. I have always considered myself a serial entrepreneur and an innovator. I have had numerous setbacks while bootstrapping my failed companies but that has not stopped me from coming up with new ideas. During my University days, I became friends with a professor who was heading the innovation center at University of San Francisco and then expressed my love for innovation to him. This led to him inviting me to Keiretsu Forum run by Silicon Valley angel investors. I networked with some of the angels and have become good friends with some of them to this day. I saw how deals were structured and how non-white male entrepreneurs got excluded in the final rounds. My Ukrainian professor perceived the disparities and even brought it up while we were having a lunch break.
Before Uber became a household name, I foresaw the use of application to connect stranded car drivers with Tow Truck drivers. I made an attempt to build an app after I envision the idea but I could not dedicate the manpower required to build the application, so I recruited Bangalore-based engineers to build the application. Due to a language barrier, incompetence, distance and access to seed money I could not continue with the project. I approached a few insurance companies with a pitch deck handy and an animated video of my app ( TowTruc enterprises: click here to view on https://www.youtube.com/watch?v=dh-qzahu2zIYouTube) but none of their management staff was willing to have a second meeting. Fast-forward to 2019, while on TechCrunch blog I came across a company with the same idea, raising $20 million of venture funding.
My background is business and software application and in 2014 I thought of using big data analytics software to develop consumer appliance while mitigating risk and eliminating waste. After doing some research I found a third-party software that I could use to monitor product trends. I later added few features to enhance the software and human intelligence to develop a unique hair iron (Blacc by Olyvya) in partnership with a Chinese manufacturer. We validated the product in the USA market and to our surprise the product sold out in 4 hours. In 2017, we needed capital to invest in this product and many more, which I then approached an angel investor to give me his platform to pitch my idea to his fellow investors. He was happy to have me onboard without charging me and this was my first experience pitching a product idea. Even though I had a sample of the product I built and a marketing deck for validation, the investors had their doubts. One of the angels said that among everyone that presented, only the two black guys had interesting ideas. The only minority investor among them (of Indian descent) said I may be the next Theranos but later approached me outside the parking lot for a possible partnership and, in his own words, “don’t mind those old ignorant white men”. I did decline doing any form of partnership with him after his hurtful words towards me. Minority entrepreneurs have unlimited ideas but limited funds. They foresee unlimited opportunities but have access to limited resources.
Elizabeth Holmes was exposed for her fraudulent claims and for lying to her investors. The Wall Street Journal reporter John Carreyrou, who first broke the original story on his book “ Bad Blood: Secret and lies in Silicon Valley Startup” and HBO documentary series called “The Inventor” and a podcast called “ Dropout” where making the rounds all over the internet. The Trailer for the HBO hit documentary, “The Inventor” was released on youtube and out of curiosity I juxtapose viewers reaction to the documentary by clicking the comment section. I was perplexed to see that same documentary was interpreted differently by people of different race, gender and social class. My question to readers is, if she was any other race but white, would she be able to get such funding? Won’t her bluff be called off earlier than now if she had brown skin? Its laughable to hear medical pundits like Phyllis Gardner, saying that those Investors fell for Theranos founder Elizabeth Holmes because their brains go to their groin. Present a brown skin girl that looks just like Beyoncé’ or Priyanka Chopra in similar scenario and then tell me if explicit bias won’t becloud the brains of those rich old white men. It should not take a thought-provoking article from Arlan Hamilton of Backstage Capital or Tristan Walker’s of Walker and Company for venture capitalists in Silicon Valley to start paying attention to minority owned companies.
What happens when investors bank on minorities? Well, in many cases they do much better than expected. Take a look at Adidas and Kanye West. Adidas gave Kanye West an opportunity to build his branded shoes (Yeezy sneakers) and this brand became one of the most lucrative partnerships in the company’s history. Ryan Coogler was given an opportunity by movie studio Marvel to create a great superhero movie which brought in a billion dollars to the company. By allowing these minorities to channel their inner creativity they were able to tap the genius in them and as a result bring such a huge return to the companies that gave them an opportunity.
As this popular saying goes, a sucker is born every day. Until we as a society stop judging entrepreneurs based on the color of their skin and not the contents of their ideas, this won’t be the last of investors becoming prey to con artist. We have seen dumb ideas like the app called “ yo” raising millions of dollars without a meaningful value. The likes of Ubiome that is currently under federal investigation and Arivale, A company that claimed to use a combination of genetic and microbiome testing and coaching to improve long term consumer health shutdown, after raising $50 million from investors. The aforementioned companies are all headed by whites and their commonalities are investors didn’t see their ROI.
As a business traveler, I have had the urge to develop on-the-go products that provide convenience. I have secured trademark for “RoverBlade” and the patent is pending. The patented component that will make Roverblade function can be used for numerous applications. The idea for such a product won’t be possible if I didn’t a have software that enables me to monitor trends and then make informed decisions based of the trend. As I explained to the investors, I met with in Silicon Valley, the software will be the holy grail for manufacturers when developed as a platform. I was not able to secure funding for this project due to deceptive characters I met along the way.
About the writer:
Kelechi Ndekwe is a serial entrepreneur, and an Innovator with experience in strategic planning and new product development. He enjoys collecting spicy sauce, writing, globetrotting, perfecting his chopstick skills. You can connect with Kelechi on LinkedIn at https://www.linkedin.com/in/kelechi-ndekwe-085b5831 .
Nina Zipkin:” What do Pitching and Investing look like in a post-Elizabeth Holmes and Theranos world”? Entrepreneur.com. January, 1996.May31,2019.