Theranos was once the start-up darling of Silicon Valley: It had a $9 billion valuation and claimed its technology could accurately run hundreds of tests on a few drops of blood. Then it was revealed to be a fraud.
Before it all came crashing down, Elizabeth Holmes, who founded the company as a 19-year-old Stanford dropout, had won the trust of corporations like Walgreens, world leaders like Henry Kissinger and former Defense Secretary Jim Mattis, and the media — she appeared on magazine covers from Forbes to Fortune.Holmes, also Theranos' former CEO, quickly went from an icon to a pariah facing federal fraud charges after its stunning fall.
But questions remain: How could someone pull off such a massive deception? And why did so many smart people buy it?
Much of it is the psychology behind deception, says Dan Ariely, a behavioral expert whom Holmes sought out for advice as things started to fall apart and who appears in the documentary "The Inventor: Out for Blood in Silicon Valley," which premiered Monday on HBO. In that way, he cautions, Holmes may not be so different from the rest of us.
"If we end up with this story and say, it's one bad apple in one industry, that's a bad lesson," Ariely tells CNBC Make It. "This is about the human condition."