From being lauded as a pioneering tech icon worth $4.5 billion to a disgraced figure unable to make monthly payments of $250 to victims of the Theranos scandal, the story of Elizabeth Holmes serves as a cautionary tale on the nature of leadership and strategy in the startup world.

By learning from her story, entrepreneurs and investors can ensure that those affected by their decisions are properly compensated. And, with this in mind, we can work to create a better future for all involved.

Holmes, the founder of Theranos, a blood testing startup, was convicted on four fraud charges in 2022 and is currently serving an 11-year sentence in federal prison. The saga, now in its aftermath, continues to shed light on the financial realities of a once high-flying CEO, whose legal team is arguing that she cannot afford the proposed repayment schedule due to her “limited financial resources”. The requested payments were part of a plan to repay the victims of Theranos, which included prominent figures such as Rupert Murdoch, the News Corp chair, and Larry Ellison, the CEO of Oracle.

Holmes’ journey from being a bright, ambitious entrepreneur promising to revolutionize the healthcare industry, to a convicted fraudster, provides an opportunity to reflect on the broader implications of her leadership and strategy. The ability to raise vast sums of money based on a compelling narrative, while failing to deliver on those promises, is a reflection of a flawed strategy that prioritized image over substance. The failure of Theranos not only brought about financial ruin for Holmes and significant losses for investors but also caused immeasurable harm to patients who relied on the company’s inaccurate blood tests.

Despite the financial wreckage and the personal fallout that followed the Theranos scandal, Holmes’ story has undeniably left a lasting impact on the startup world. It has forced investors, regulators, and entrepreneurs to rethink the balance between innovation and integrity, and the importance of transparency and accountability in leadership. Consequently, lessons learned from Theranos’ downfall will likely shape the approach to governance, due diligence, and risk assessment in the tech industry for years to come.

As Holmes—who dropped out of Stanford at 19 reported Business Insider—serves her sentence in a minimum-security work-based camp, her ability to pay reparations to victims has come under scrutiny. The New York Times reported, “Lawyers for the disgraced entrepreneur…said this week that she would be unable to afford to pay $250 each month to victims of her failed blood-testing startup, Theranos, after leaving prison.”

According to the Sydney Morning Herald, “Holmes doesn’t object to $US25 quarterly payments while she’s incarcerated, but argues the government is wrong to assume the absence of a post-prison payback schedule means the judge simply made a mistake.”

But, whether or not Holmes can make restitution for her victims, her story stands as a cautionary tale against arrogance and hubris in the world of technology entrepreneurship. After all is said and done, the Theranos scandal serves as a reminder that no matter how convincing an idea may seem, it is essential to ask tough questions and verify claims before making investments—both financial and emotional.

The tale of Theranos—like Enron before it—should remind us, therefore, that success is fleeting, and the only way to build an enduring legacy in business is to embrace vigilance, accountability, and honesty. It should inspire us all to remember that while failure may be inevitable, integrity and ethical decision-making are essential for long-term success. And it also underscores the undeniable importance of integrity, which is not merely a trait to be admired, but a cornerstone of effective, ethical, and sustainable leadership. It is a hard-earned currency that can easily be squandered through a single act of deceit or misrepresentation, causing irreparable damage to both the leader and those they lead. Integrity provides a moral compass that guides decision-making, establishing trust and fostering an environment where innovation can thrive without the fear of deceit.