Elizabeth Holmes and Theranos

Elizabeth Holmes was convicted on four counts of wire fraud in a court in San Jose yesterday. The case should have been about the appropriateness of business models widely used in Silicon Valley for software development to healthcare.  

Writing buggy code and fixing it after it breaks, a model arguably pioneered by Bill Gates with Windows, is, if not acceptable, reluctantly accepted by most of us since the consequences of an application behave in unexpected ways are usually not too terrible. 

But in healthcare (and self-driving cars) the consequences of mistakes from rushing a product to market are far more serious, raising the question "is a business model that emerged at the inception of the PC industry appropriate in setting where the consequences of mistakes may be deadly"?

The focus of Holmes' trial on the hurt to shareholders is unfortunate; perhaps that's what the prosecution could most easily prove. But in missing the distinction between cases where the harm is potentially lethal rather than simply annoying (or expensive), the case fails in building a precedent that might protect people from physical harm from poorly designed products that their producers know to be faulty.  At the same time it creates a needless damper on innovation in sectors where the consequences of bad design are irritating but not life-threatening.