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Theranos founder Elizabeth Holmes is the subject of a new HBO documentary: 'The Inventor: Out for Blood in Silicon Valley.'

There's no place in the world where the game of "let's pretend" is as popular as it is in the USA, and maybe no place in the USA where magical thinking is as popular as it is than in the Silicon Valley. There are genuine visionaries here. But so many of the projects are caught in a theoretical loop of futurism: "Wouldn't this product be outrageously cool!" "It doesn't work." "Yes, but if it did work, wouldn't it be outrageously cool?"

Airing on HBO, The Inventor: Out for Blood in Silicon Valley by Alex Gibney, profiles the Theranos affair. A photogenic young Palo Alto CEO named Elizabeth Holmes (imagine Brit Marling doing Steve Jobs cosplay) hawked the possibilities of a plastic box full of vaporware to various VC and political bigwigs. Before the firm duped Walgreens into testing its dubious medical tech on unsuspecting humans, and before it was exposed by the Wall Street Journal's John Carreyrou, it was valued at $9 billion.

The former Theranos headquarters—a 116,127-square-foot facility located in the Stanford Research Park—now belongs to a new tenant, and the company that politicos from Bill Clinton to Henry Kissinger had fawned over is now a cautionary tale about the power of happy stories to cloud our judgement.

SECRET SAUCE

Holmes' compelling elevator pitch went straight to a parent's heart. Theranos promised to make intravenous blood draws obsolete while simultaneously increasing access to cheap and regular screenings. "Goodbye, big bad needle," read a caption over a picture of an apprehensive toddler, on the small billboard outside Theranos' rented $1 million a month HQ on Page Mill Road. If that poor kid didn't get you, the other part of her story would: Holmes' uncle was devoured by melanoma, which was not diagnosed until it was far too late.

It looked great on the drawing board. It's easy to see why so many people wanted to to believe. First, draw a bitty sample of blood from a finger stick, and collect it in something called a "nanotainer." The pill-sized capsule would be inserted into a black box, originally called "The Edison." Inside, automated pipettes and centrifuges tested the sample for signs of some 200 diseases. Every home would have one, at a fraction of the cost charged by, say, Quest Diagnostics and Labcorp, the two labs that still control 80 percent of the blood testing business.

The fact that these two companies all but corner their markets gave Theranos executives a convenient narrative in which to couch their public obfuscations. At first, it was Holmes' matter-of-fact insistence that it was simply company policy to not tip their hand to the competition. Why would David risk revealing the deadly nature of his sling to two hulking Goliaths?

When reporters, medical providers and regulators continued probing, the negative headlines were attributed to corporate skullduggery and yellow journalism. COO Ramesh "Sunny" Balwani told his staff one day "What we're doing is so disruptive, we'll always be under attack." On battle stations, as it were, Holmes and Balwani hired security guards. They code named the execs "Eagle One" and "Eagle Two" as they escorted Holmes to her bulletproof glass-enclosed office.

Gibney's saga of Theranos demonstrates the difference between the original Valley ethos of the open floor plan and cross pollination, with a newer, baroque version: a management strategy of "siloing," keystroke monitoring, paranoia and surveillance.

Tyler Shultz, a former Theranos employee and whistleblower, here describes the problem at the ill-fated company as the difference between "the carpeted world and the tiled world." The former, where Theranos' marketing and public relations staff made camp, was a place to cheerlead, to show off ridiculous wealth, to exhort, daydream and brush away bad news. Meanwhile, in the cold, tiled world of Theranos' laboratories, the attempt to make the currently unrealizable technology real was hashed out in the shadow of non-disclosure agreements so severely worded that chemists were afraid to talk candidly with engineers, where all-nighters wrecked social lives and where one on-the-outs employee decided he would rather take his own life than face Theranos' legal team.

AMERICAN MYTH

There is a thread within The Inventor about the power of cinema—and how that worked to reinforced Theranos' grand illusion. While no one does this kind of news-based documentary better than Gibney, there are certain traditions in the style of how they're made. The titles are David Fincherized with sinister images of boiling blood and crawly veins. Serving as B-roll for the off-camera interviews, are excerpts of vintage cartoons and drone shots of the empty Theranos headquarters. Against 3D animation of tumbling dice, behavioral economist Dan Ariely mulls over the situational nature of truth on the tongues of people convinced they're doing a good deed.

Gibney shades his story with excerpts from primitive movies. This is in honor of the Thomas Edison, who was both a father of cinema and a peddler of vaporware. Long before tech CEOs were talking up their latest app over power lunches at the Rosewood Sand Hill in Menlo Park, California, the Wizard of Menlo Park, New Jersey, stalled out his investors as he scrabbled to find the right filament for his not-yet-developed electric light bulb, and almost went bankrupt in the search.

Through her healthcare startup, Theranos, Elizabeth Holmes promised a to deliver a compact machine that could diagnose hundreds of diseases with just a few drops of blood.

Film, and the world of the imaginary, has its place in the story of Theranos' epic delusion. Holmes put her trust in an uplifting movie motto: "There is no try, there is only do." In tile-lined rooms, technicians sought to perfect impossible machines that were snapping glass specimen tubes and splattering blood—some of it presumably carrying a variety of pathogens. According to research and development man Ryan Wistort, management ignored that urgent problem to pow-wow over the name of the cloud-based portal where the public would access their information. How about "Yoda?"

At another point, we hear Holmes discuss some of the novels that inspired her during her bookish youth. Over black and white etchings of whales making flotsam of their hunters—presumably taken from Moby-Dick, one of the tomes she mentions—Holmes explains her interest in absorbing the lessons of history's greatest leaders.

Another old story is implicit here—those movies about an immoral young blonde tantalizing some weary older man and leading him to ruin. Who doesn't like Vertigo? Holmes' genius involved parlaying personal connections (venture capitalist Tim Lucas was a family friend) into personal gain.

She surrounded herself with political movers and shakers. Holmes had a perfect combination of money and looks. What editor could resist the implicit feminism of lionizing a 19-year-old who dropped out of Stanford and made a billion? Two of the subjects in The Inventor are elder writers from the old media world who heralded Theranos' magic machine. Ken Auletta of the New Yorker at least had reservations enough to describe Theranos' tech as "comically vague." Roger Parloff of Fortune profiled Holmes in a cover story: "This CEO is out for Blood." Parloff, interviewed here, is particularly shamed at furthering Holmes' lies.

The salty Dr. Phyllis Gardner, a physician and a professor at Stanford, once advised Holmes and listened to her unworkable proposal for a derma-patch that would deliver antibiotics. Gardner recalls that the Holmes she knew "always aligned herself with powerful older men who succumbed to a certain charm."

This alignment went beyond Holmes' relationship with Theranos COO Balwani, 19 years her elder. It's also seen in the way heavyweight politicians—from Bill Clinton and Joe Biden to Henry Kissinger and Betsy DeVos—celebrated her alleged genius. Aid also came from another old family friend, former Secretary of State George Shultz. The old cabinet member's grandson, Tyler (interviewed in the documentary), worked for the company, then became a whistleblower, and then got caught up in Theranos' wringer, as company lawyers threatened him with a number of legal actions before retreating.

SNAKE OIL CYCLE

As Holmes awaits her upcoming trial, the question is still open over whether she believed in her ability to produce this product, or if she was a master grifter. We're allowed to study her, thanks to footage captured by Errol Morris' intense-eye-contact-capturing lens, known as the Interrotron. Morris shot Holmes against a stark glowing white background for a Theranos ad campaign. The backdrop works to suggest either hyper-cleanliness or futuristic menace. Morris does with light what Philip Glass does in music.

Cheryl Gaffner, who worked with Holmes, notes: "My first impression was that she didn't blink." Without going into it in words, Gibney demonstrates the hypnotic effect of Holmes' wide, blue-eyed gaze—the way those eyes radiated idealism, sincerity and selflessness.

Theranos is a portmanteau coined from hitching "therapy" and "diagnosis," notably putting the investigation of symptoms after their treatment. If "Theranos" sounds like a Marvel villain, let us shift franchises for a second. Note that in Ian Fleming's novels, various James Bond baddies often had something in common: eyes with the white completely around the irises, "A doll's eyes." One thinks of that, watching her. Mirroring Holmes' persuasive rarely blinking stare, Gibney places a piece of art in the empty Theranos headquarters, a lidless eye's giant blue iris spread over nine video screens. Surveillance was uncommonly thorough at the company. Matters got scarier as the cat wriggled its way out of the bag. Theranos' irregularities attracted the interest of federal agencies as varied as the SEC and the CMS, the federal agency in charge of implementing Medicare charges.

The investigators exposed defective testing results, misdiagnoses and the fibbing Theranos did about its military contracts. Earlier in Arizona, Holmes personally lobbied for a change in state law requiring prescriptions for blood tests, thus paving the way for Theranos stations at dozens of Walgreens locations throughout the Copper State.

"Ms. Holmes, you are magnificent!" burbled one local legislator. But for Arizonans turning up for Theranos' drugstore tests, it was often a matter of hello, big bad needle, since normal vein-drawn blood samples were bypassing the Edison machines and being sent back to Theranos' lab, which used the same technology as Quest Diagnostics and Labcorp.

Word was getting out. Theranos lawyered up with some serious heavyweights—including David Boies, who represented the former vice president in Bush v. Gore, and Heather King, who has previously represented Hillary Clinton. They unleashed legal threats at anyone who hinted that the real blood testing by their alleged proprietory machinery was being done on commercially available blood testers.

At some point we'll hear Holmes side of the story, and it'll make for very curious reading. If it goes badly for her in court, Holmes will have a long time to perfect the manuscript, given that she faces 20 years' worth of federal charges.

Meanwhile, the feature film version is being prepared; Adam McKay is following up Vice with the upcoming version of Carreyrou's best-seller Bad Blood, with Jennifer Lawrence as Holmes. Knowing McKay's work, which isn't above getting personal and taking umbrage, one doubts he'll resist some of the matters Gibney doesn't touch on. These include items that turned up in Vanity Fair (VF's publisher Graydon Carter is an executive producer of The Inventor), tibits such as the fact that Holmes' father was an exec at Enron, or the scope of Holmes' family wealth—her grandfather was married to an heir to Fleischmann's Yeast. They'll be a canine casting call for a dog to play Balto, the unhousebroken husky Holmes used to haul around the boardrooms and who would shed in the laboratory.

It'd be nice if The Inventor exposed nothing more than dashed hopes, and the risk for those who trusted Theranos' defective testing. If only it were just a general lesson against falling headlong for the idealistic people who have nothing to show for their research. If only this were a story of a big bad needle mosquitoing some plutocrats who richly deserved it—both Betsy DeVos and Rupert Murdoch lost a significant amount of money in the wreckage of Theranos.