Bad Blood: Secrets and Lies in a Silicon Valley Startup

Bad Blood: Secrets and Lies in a Silicon Valley Startup

The full inside story of the breathtaking rise and shocking collapse of Theranos, the multibillion-dollar biotech startup, by the prize-winning journalist who first broke the story and pursued it to the end, despite pressure from its charismatic CEO and threats by her lawyers. In 2014, Theranos founder and CEO Elizabeth Holmes was widely seen as the female Steve Jobs: a br...

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Title:Bad Blood: Secrets and Lies in a Silicon Valley Startup
Author:John Carreyrou
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Bad Blood: Secrets and Lies in a Silicon Valley Startup Reviews

  • Michael Perkins

    "The resignations infuriated Elizabeth and Sunny. The following day, they summoned the staff for an all-hands meeting in the cafeteria. Copies of The Alchemist by Paulo Coelho had been placed on every chair. Elizabeth told the gathered employees that she was building a religion. If there was anyone not prepared to show complete devotion and unmitigated loyalty to the company they should “get the fuck out.”

    The Steve Jobs Syndrome

    I have covered Silicon Valley as a journalist and author for three d

    "The resignations infuriated Elizabeth and Sunny. The following day, they summoned the staff for an all-hands meeting in the cafeteria. Copies of The Alchemist by Paulo Coelho had been placed on every chair. Elizabeth told the gathered employees that she was building a religion. If there was anyone not prepared to show complete devotion and unmitigated loyalty to the company they should “get the fuck out.”

    The Steve Jobs Syndrome

    I have covered Silicon Valley as a journalist and author for three decades now. I’m not big on attending conferences, but made a point to go to an awards event at a favorite forum in September 2015. Among the recipients that year was Silicon Valley legend, Andy Grove, getting the lifetime achievement award.

    Also on the list, getting the “global benefactor” award, was someone I had never heard of, Elizabeth Holmes. I had also never heard of her company, Theranos. Though I once worked for a business magazine, I never read any others. And Theranos was in the medical device “space,” which is pretty different from software and social media.

    Her presentation was last. Joining her on stage was her Stanford professor and mentor, Channing Robertson. He spoke first. He told this story of Holmes as a kind of prodigy who camped out at the doors of his office and lab until he admitted her as a freshman into his upper division courses in chemical engineering. I would learn later that he considered Holmes a once-in-a-generation genius, comparing her to Newton, Einstein, Mozart, and Leonardo da Vinci. Heavy praise, indeed.

    Holmes was up next. She wore a black, mock turtleneck that reminded me of Steve Jobs. Her dyed blond hair was up, slightly skewed, that struck me as a bit calculated. She had large, unblinking blue eyes and spoke in a low baritone. By the end of her talk, it struck me that she had essentially said nothing of substance about her product or her company. Instead, it was high-falutin’ claims that reminded me of the rhetoric Steve Jobs used when rolling out a new product, except that he had a real product he was demonstrating each time. I was immediately suspicious of Holmes and Theranos. I had seen too much over the years to take something like this at face value.

    When I got home, I did a computer search and learned that Holmes had been on the cover of numerous business magazines as the first female tech billionaire. (My wife would always add: “on paper.”) In some photos she posed with a tiny vial of blood that was supposed to represent all that would be needed to do numerous tests with the company device.

    Almost a month later, the first in a series of Wall Street Journal articles about Theranos, by the author of this book, was published. It reported that their technology did not work. (I was to learn later that the author interviewed 60 former Theranos employees for his research). My suspicions were confirmed. I eagerly read every new installment of the WSJ series.

    But “Bad Blood” goes much deeper than those articles. It turns out that Channing Robertson was not the only older man over whom Holmes had a kind of hypnotic power, like the mythical Mata Hari. There was veteran venture capitalist, Donald L. Lucas, whose backing and connections enabled Holmes to keep raising money. Then Dr. J and Wade Miquelon at Walgreens and Safeway CEO Steve Burd, as well as General James Mattis (now Trump’s Secretary of Defense), George Shultz, and Henry Kissinger.

    All of these men served as enablers, when they were in positions where they could have put a stop to the fraud. Most of these operations had experts who knew the science and tried to warn their superiors, but were ignored. And there’s no doubt that the medical miracles Theranos promised were very appealing to these older men, as well as to so many others who heard her spiel.

    One of the most important older men was Sunny Balwani, her romantic partner 20 years her senior. He knew nothing about science, but was essentially her primary henchman for bullying dissenters in the company, heading up employee surveillance and doing the dirty work of firing people. He also subbed as CFO after the only one they had was fired for questioning company honesty. Balwani would pull numbers out of his butt and claim they were legitimate revenue projections.

    Those who weren’t fooled were veteran venture capitalists who had been investing in the medical device space for years. During one of her pitches to these firms, she was asked so many questions she couldn’t answer that she stormed out of the conference room. In a one-on-one encounter with another successful venture capitalist he asked to see her device. Instead, she slapped her notebook shut and said: “if you can’t trust me, I can’t work with you” and slammed the door behind her as she departed.

    In turns out that in spite of her time at Stanford, Holmes didn’t know much science. She described the process of her device as follows….

    “A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.”

    The selling point was no more needles, just a slight lance of a fingertip could provide enough blood to do countless tests. When the author queried Timothy Hamill, from the UCSF Department of Laboratory Science, he told him…

    "….the pitfalls of using blood pricked from a finger. Unlike venous blood drawn from the arm, capillary blood was polluted by fluids from tissues and cells that interfered with tests and made measurements less accurate. “I’d be less surprised if they told us they were time travelers who came back from the twenty-seventh century than if they told us they cracked that nut,” he added.

    The whole concept was flawed from the beginning. Holmes used non-company technology to try to cover this up. In a PowerPoint presentation she made to investors one slide showed scatter plots purporting to favorably compare test data from Theranos’s proprietary analyzers to data from conventional lab machines. But all the data came from non-Theranos technology. They often used other tech than company technology that could not generate accurate results for patients. Theranos even resorted to using hypodermic needles, instead of the promised fingertip prick.

    Meanwhile, Holmes continued to expand her Steve Jobs persona. She drank green kale shakes (Jobs was vegan), leased cars with no license plates (as he had), had several bodyguards who referred to her as Eagle1 (Eagle2 was Bulwani) and flew in a Gulfstream Jet. She referred to her device as the i-Pod of Health. And even hired the ad and pr firm that Apple once used, Chiat-Day, even though Theranos could not afford them. And looking back, it appeared that her dropping out of college was part of a script, just the way Jobs and Gates dropped out to pursue their entrepreneurial dreams.

    When she went on the Jim Cramer’s “Mad Money” show to denounce the WSJ, she sounded very Jobs-like when she said: “First they think you’re crazy, then they fight you, and then, all of a sudden, you change the world.“

    Not surprisingly, Theranos kept missing their deadlines. Its contract with Safeway fell through, but Walgreen’s was more important to them. Several stores in Arizona went “live” with testing. Most tests done there were way off, resulting in unnecessary trips to the ER and potential over-treatment. Various doctors and patients published negative reviews on Yelp.

    This put the company in the realm of reckless endangerment: “a crime consisting of acts that create a substantial risk of serious physical injury to another person.”

    This reality upset many employees who wanted no part of a fraud that would harm people.

    At company meetings, Holmes would say: “If anyone here believes you are not working on the best thing humans have ever built, then you should leave.”

    Many took her up on that, but it was never without controversy.

    Meanwhile, bulldog Sunny was dispatched to Arizona to intimidate those who had posted negative Yelp reviews. And the company had hired super-lawyer David Boies to threaten suit against anyone who revealed insider info on the company. Just as one example, it cost the Schulz family $400k in legal fees to defend George’s nephew Tyler. Theranos knew Tyler had met with the author because they had a tail on both Tyler and the author.

    When I finished the book I thought back on that awards ceremony I had attended where I first saw Holmes. I recalled Andy Grove, whose lifetime achievement award represented the original Silicon Valley of sweat equity. Grove lived through the Nazi occupation of his native country of Hungary and escaped after it became Communist. In New York, he worked as a busboy while he learned English and obtained a bachelor’s degree in chemical engineering from City College of New York. Graduate work took him to the west coast, where he earned a Ph.D from U.C. Berkeley in chemical engineering. He would go on to help found chip maker, Intel, a company that truly changed the world.

    These days, what I see in Silicon Valley is an increasing obsession with wealth and an absence of ethics, and the spread of the Steve Jobs Syndrome, like some kind of disease. Theranos epitomized all of this. The result is a lack of the honest work that Grove epitomized, in which wealth and notoriety were by-products not goals. The real goal was to do good work, first and foremost. And always tell the truth.

    =============

    10/12/18.....brief update on criminal case against Theranos

    ==============

    A very logical question people often ask is how did Holmes/Theranos get away with this for so long? The company had not gone public and sold stock, so it was left to the FDA to oversee matters. Holmes consistently lied about FDA approvals the device never had.

    But the other issue is the larger market for medical devices (much larger than Big Pharma) that are pitched as miracle machines and for which there has been looser and looser oversight from the FDA.

    NetFlix just released a brand new documentary, "Bleeding Edge," that exposes a lot of what's going on. This is not trivial. Countless patients, for example, have been or are being poisoned by the carbon-cobalt material that make up metal hip replacement devices.

    The trailer is melodramatic, but the documentary is full of substance we should all be aware as patients.

  • Andrew Garvin

    Early in my career I worked at a next-generation sequencing startup with Theranos-level ambitions. In fact, it went further. The founders’ mission was to cure aging. Literally, the goal was immortality.

    There were other similarities: The company was founded by wunderkinds, they won the attention and support of a prominent professor in the field, they dropped out and raised millions of dollars from non-hard tech investors off the back of a concept, then tens of millions of dollars off the back of

    Early in my career I worked at a next-generation sequencing startup with Theranos-level ambitions. In fact, it went further. The founders’ mission was to cure aging. Literally, the goal was immortality.

    There were other similarities: The company was founded by wunderkinds, they won the attention and support of a prominent professor in the field, they dropped out and raised millions of dollars from non-hard tech investors off the back of a concept, then tens of millions of dollars off the back of a glued together prototype, all while pursuing a fantastical goal.

    The company was wild but not fraudulent. Quite the contrary: When the founders realized that the technology was not going to work (or would take many more years to validate) they decided to fold the company. All of the scientists - even the skeptics - were shocked and disappointed. We were on the verge of breaking through in key areas. But, it was over.

    And, the irony? Many of those scientists went on to work at Theranos. It was just down the street.

    By 2012 they had all left Theranos. ‘It's too crazy’. ‘It’s way worse’. Way worse than an immature company that blew up on a whim? I started following Theranos: the Glassdoor reviews, the funding announcements, the glowing press coverage. It was surreal to know that the company was a fraud and yet to see it rise.

    Carreyrou exposed it all. How Holmes and Balwani drove an employee to suicide, how they strong-armed employees, investors, even generals and statesmen, how they lied to win multi-million dollar deals from credulous partners. The pulp in Bad Blood is juicy. I read the book on one overseas flight.

    Theranos is extreme but not singular. Silicon Valley lionizes founders and ‘overnight’, 100X successes. Investors are pushed & pulled toward a hands-off approach. Founders retain board control and investors don’t meddle. This environment is prime for fraud. My management philosophy: In a vacuum, everyone cuts corners. Everyone gets lazy. And, unscrupulous people do worse.

    A couple years ago

    : ‘At what point do high-profile unicorn frauds irreparably damage the philosophy and practice of founder-friendly investors?’ That was about Hampton Creek. It could have been about Zenefits, or Uber (in a sense), or, of course, Theranos. Who will be next? The odds-on favorite is WeWork. Does Tesla (a public company) count? The whisper-consensus has many candidates.

    There are many frauds left to be exposed. But, none as big as Theranos. Well, maybe one or two.

  • TC

    Just when I thought all reporters ever did anymore was see what was trending on social media and write stories with titles like "You'll cheer how this mom clapped-back at her body-shamers on Twitter," this book gives me hope that old-fashioned investigative journalism is alive and well and doing exactly what it's supposed to: shine an unflinching hot light on those who abuse their power and privilege. Here, it's aimed at the bizarre cult of Elizabeth Holmes and her "disruptive" "game changing" c

    Just when I thought all reporters ever did anymore was see what was trending on social media and write stories with titles like "You'll cheer how this mom clapped-back at her body-shamers on Twitter," this book gives me hope that old-fashioned investigative journalism is alive and well and doing exactly what it's supposed to: shine an unflinching hot light on those who abuse their power and privilege. Here, it's aimed at the bizarre cult of Elizabeth Holmes and her "disruptive" "game changing" company, Theranos.

    Silicon Valley is the epitome of mediocrity dressed-up as brilliance. Having wasted several years of my career working for two different Valley-based "start-ups" (one now on its 18th year of "staring up"), I saw a lot of familiar patterns in this thorough, well-organized and well-told story of how a teenaged college drop-out with all the right connections managed to bamboozle people who we would otherwise assume should know better. There was the usual unprofessional office behavior, the disorganization, the endless cheerleading bordering on religious hysteria about how "we're changing humanity!" all wrapped with the constant disregard for convention and ethics and the truth. In this case, there were a few new wrinkles: complete contempt for the law, and a willingness to bully people to the bitter end to protect their lies.

    Although free of literary license and told straight-ahead as a journalistic piece, this book still reads a bit like a thriller. This could easily be adapted to a psychological horror movie, where young impressionable minds sold on the lie that Silicon Valley is full of the world's smartest people operating on a higher plane of existence go to work for a "disruptive" start-up, only to slowly have their perception of reality warped by the bullies running the place until they doubt themselves and everything they knew. At the top we have the calm, collected evil genius of Elizabeth Holmes, dressed the part all in black, speaking in hypnotic, reality-distorting tones, staring unblinking at you with massive blue eyes; to her right is her henchman and lover, a mysterious and wealthy older man named Ramesh “Sunny” Balwani, who dishes out abuse, punishments, diatribes, and hatchet jobs with complete impunity, to the point you can hear the evil music swell every time his name is mentioned. In the Hollywood version of this story, he would get his comeuppance by being tossed from a cliff, to an eruption of cheers in the theater. (In real life we have to settle for an ongoing criminal investigation.) Backing them up are the tentacles of a powerful law firm; the mere mention of their name sends shivers down people's spines and causes them to give up before they even start. They deploy a nationwide network of spies who know your every move, and who almost literally leap out of the shadows (or in one case, down the stairs) to serve you with papers and bully you into signing away your life.

    The duping of so many otherwise smart people is like a real-life retelling of

    , where everyone believes that Holmes is a genius for no other reason than everyone else believes she is a genius. There is a passage of a recalled conversation with brand-name people attributing high qualities to her that she herself probably didn’t even say. Once again “too good to be true” took a back seat to “wanting to believe,” reminding us of how Bernie Madoff managed to scam a different group of supposedly smart people. Apparently no one is immune to magical thinking.

    The author did an amazing job exposing this entire sham and documenting it in a way that gives a complete and chronological picture of what is likely just an extreme example of business-as-usual in Silicon Valley. The difference here is the scope and gravitas, since instead of a forgettable and unimportant software company, Theranos was a healthcare provider, operating in a heavily regulated industry, producing flawed results that directly affected patients' lives. (One person, for example, was out over $3,000 in unnecessary medical tests due to an erroneous blood diagnosis from Theranos. At least no one died, though another person is suing for a heart attack he said could have been prevented if their test had been accurate.) It was also an extreme example of paranoia and litigious bullying, using investor money to buy the finest in legal muscle to intimidate anyone and everyone: former employees, former board members, the journalist who broke the story (this book's author), the

    itself—even the doctors and patients who complained about faulty test results received a personal visit from Sunny, where he threatened to ruin their careers if they didn’t sign away their right to complain. It was one step below a global drug cartel.

    So even if you never heard of Theranos before this scandal (like me), or are sick of seeing Elizabeth Holmes’ turtlenecked head all over the internet (also like me), this book is definitely worth reading, even if just for the schadenfreude it inspires.

    And hopefully it will burst people’s notion that the Silicon Valley’s “disruption” is somehow wonderful. Far from being a bastion of the future, the Valley is firmly stuck in the past of its gold-rush days, and this book shows just how far some of those opportunists will go to protect their gains, even if at the expense of employees, investors, patients, doctors, regulators, and any one else they perceive as a threat. Perhaps next time, people will actually do their due diligence.

    Most of all, I'm just thankful that real investigative journalism is alive and well and keeping us safe and free. Buy this book if for no other reason than that.

  • Gwern

    is a straightforward read about the rise and fall of Theranos, done in chronological order in third-person up until Carreyrou becomes personally involved, at which point things accelerate to the SEC civil settlement. Carreyrou doesn't end too strongly but says that the criminal investigation may well end up charging Holmes & Sunny. This means that it lacks a really conclusive 'ending': Theranos was continuing to limp on, having received funding from a vulture on the strength of its

    is a straightforward read about the rise and fall of Theranos, done in chronological order in third-person up until Carreyrou becomes personally involved, at which point things accelerate to the SEC civil settlement. Carreyrou doesn't end too strongly but says that the criminal investigation may well end up charging Holmes & Sunny. This means that it lacks a really conclusive 'ending': Theranos was continuing to limp on, having received funding from a vulture on the strength of its patent portolio, ironically enough, which apparently was valued at $1b, and Carreyrou mentions in one interview that Holmes was reportedly scouting VCs for a new startup. (After reading BB, I had to think: maybe a second Holmes startup isn't a bad idea - after all, if she could get this far with no working product at all, what could she do with an actual product? It may look bad, but it'd probably work better than most startups.) Coincidentally, I began reading this just hours before Holmes & Sunny were criminally indicted (vindicating what I had been telling people - the SEC civil settlement didn't mean they were going to get off scot-free). Good timing on my part. This puts more of a period on reading BB, although the story is far from over. There's a quip that the most American character is the conman, because America is the land of second chances - Elizabeth Holmes is only 34 years old, after all, and even having aggravated the DoJ by persisting with Theranos, it's hard to imagine her being sentenced (as a woman and without a lot of bodies and without Shkreli's autistic genius for infuriating judges) to more than a few years at worst, so I wonder if we've seen the last of her?

    In any case, BB is good for resolving a lot of details about Theranos.

    For example, I was perplexed at the time by the large Walgreens deal: Walgreens is a large, competent, sophisticated provider of pharmacy services, well capable of thorough testing; if Theranos was not what it was hyped up to be, how could Walgreens fail to notice? My assumption was that Theranos had done something clever to produce fake results (if not perhaps as clever as the FSB at Sochi). BB provides the answer, which is dismayingly mundane: Theranos bluntly refused to provide any kind of real validation or access to its machines, and some Walgreens execs were furious about it and correctly convinced Theranos was a fraud, but others were seduced by the vision, and the doubters signed on because they were terrified of forcing Theranos into the arms of

    , which is a rivalry I had no idea about. ("Van den Hooff listened with a pained look on his face. 'We can't not pursue this,'' he said. 'We can't risk a scenario where CVS has a deal with them in six months and it ends up being real.' Walgreens's rivalry with CVS, which was based in Rhode Island and one-third bigger in terms of revenues, colored virtually everything the drugstore chain did. It was a myopic view of the world that was hard to understand for an outsider like Hunter who wasn't a Walgreens company man. Theranos had cleverly played on this insecurity. As a result, Walgreens suffered from a severe case of FOMO - the fear of missing out." Who knew?) A similar desperation appears to have animated Safeway's ill-fated Theranos commitment. And the general coverup appears to have owed much to the realities of lawfare in the USA: Theranos had enough cash to wield legal threats against the justly-terrified whistleblowers, costing Tyler Shultz a staggering $400,000+ and gaslighting suspects with constant PI surveillance, and possibly tactics that went beyond the legal (Theranos/Holmes appear suspiciously well-informed at times). It's no surprise it took a major newspaper like the WSJ to investigate it.

    It's also interesting for the unexpected details. For example, dressing like Steve Jobs

    Holmes's idea! She was told to do it by one of her ex-Applers. And her family connections were dangerous as much as they were helpful: the shiny board of directors, for everyone it impressed, put other people off and made them suspicious, and without her family connections, the family friend Richard Fuisz would never have tried to patent-troll her out of peevish spite which directly fed into the first Fortune article and eventually Carreyrou's own investigation. (With 'family friends' like these, who needs enemies?)

    And Carreyrou is good about considering to what extent Theranos really reflects on SV: as he points out, a lot of the actual investors were 'dumb money' (my phrase) who did minimal real due diligence and ignored red flags, like Rupert Murdoch who put in $125m on the basis of 2 meetings with Holmes and a phone call to someone else, while the usual life-sciences VCs were unimpressed with Holmes's bluster & ignorance and took a total pass on her. (

    took a hard pass when their guy walked into a Walgreens and Theranos couldn't do the test using just a nanotainer of his blood - a simple test that many others also did but then ignored the excuses and failures.) Culturally, Theranos was barely SV: yes, Apple may have fanatical internal secrecy, but they are the exception that proves the SV rule and have suffered for it (in machine learning especially), while everyone else adopts considerably more internal transparency for precisely the reasons that Theranos employees cite - how do you sanely do R&D if no one is allowed to talk to each other? (Again, Apple has suffered for this in trying to keep up in non-materials-science and non-manufacturing R&D, like machine learning: what's the last impressive new tech you can think of which was developed inside Apple?) It's not really that easy to draw a novel lesson here. Was Theranos initially too ambitious? Perhaps, but lots of startups scale back or pivot to new ideas based on their trial-and-error; reality cannot be planned out. Did it get too much money? It raised $6m initially, which is not that much for their purpose. Should new startups not be funded at all or not allowed a decade+ to work out ideas, or Walgreens blamed for seizing on a new opportunity as fast as possible? But people already complain about investors being too risk-averse and short-term (despite Theranos being 17 years old now!) and companies being bloated slow bureaucracies. Was the problem lack of 'peer review'? Except peer review doesn't work and isn't scientific, works the worst in cases of fraud (think of all the cases of people fabricating scores or hundreds of papers which slide through 'peer review' only to finally be exposed not by 'peer review' but when the results failed to replicate), and would've been inferior to simply seeing if the tests worked or not, and that's how all the smart money like Google Ventures took a pass on Theranos. Should we outlaw investing millions of dollars based on a phonecall? Hard to imagine that working out well. Should we criticize VCs for being gullible? But most of the VCs (not) involved weren't gullible! Should we criticize the board for letting her accumulate so much stock and then letting her talk them out of firing her in 2008? Probably, yes, but hindsight is 20/20 and the worst problems hadn't happened yet. Should blood testing in general be

    to investors? But Holmes is very, very, far from the first person to try to improve on existing blood tests and fail, much like the perennially fruitless quest for a Alzheimer's disease cure - a good book on this topic is John Smith's

    documenting the endless failure of people trying to improve on finger-stick blood glucose tests for diabetics - and people keep trying because anyone who succeeds will make

    much money because the human costs of failing to succeed is measured in hundreds of millions or billions of lives over the coming centuries, and failure is simply not an acceptable option.

    Carreyrou suggests toward the end that Holmes might have psychopathic traits:

    I think this is wide of the mark and he gets closest in the final lines. What is the stereotypical profile of psychopathy? One might put it as: someone who is unable to make or commit to plans, who acts spontaneously on selfish and often self-destructive impulses, covering up for it with manipulation of others or with even more brazen deceptions often so ill-thought-out & easily falsified as to beggar belief, with a history of violence (often unreported) and especially sadistic cruelty (often emerging during childhood and focusing on animals), unable to maintain long-term relationships, sexually promiscuous and often impregnating or pregnant at an early age, often below average intelligence, greedy and covetous of money or rewards, apt to embezzle or steal from employers, typically racing from employer to employer to outrun immune systems etc.

    The portrait of Holmes in BB is very far from this. There is no hint of tendencies towards sadism or violence in her childhood, merely a mention of competitiveness. Holmes is, at least initially, quite bad at self-presentation: One quoted VC paraphrased describes her early pitches as unimpressive: "she'd come off as a dowdy young scientist back then, wearing Coke-bottle glasses and no makeup, speaking nervously to an audience of men two to three times her age" and Carreyrou points out (to my surprise) that her Jobsian wardrobe wasn't even her idea - but that of an Apple designer she hired:

    An additional interesting thread throughout BB (although Carreyrou puts no emphasis on this and I wonder if he missed the connection) is how Holmes continuously sought to amass more stocks or voting control of Theranos: one oddity in the end of the Theranos saga was that Holmes was never, and could not be, fired because she continued to own so much stock and voting power. Rather than selling out early and retiring to a life of leisure, she held on to the bitter end. This is particularly striking because, if I'm reading the timeline and indictment right, Theranos reached valuations of $50m+ long before Holmes/Sunny ever did anything that was truly fraud and irreversible; as far as I can tell, Holmes

    have sold millions of dollars of stock and left at many points, entirely safely, and when Theranos ran out of runway, it would be regrettable but nothing she could go to prison for. Instead, she invested considerable efforts into clawing back the large, near co-founder-level stake of her first employee, to the point of threatening to sue an extremely wealthy director who wanted to buy some of it himself rather than giving it to her at a huge discount; she further proposed in 2007 allotting a block of stock to a nonprofit foundation in perpetuity (controlled by, of course, herself); and whenever an employee was fired, Theranos practice seems to have been to carefully hunt using coworkers & laptops & files for any reason, no matter how spurious, to clawback stock options.

    And in Theranos's mismanagement, we don't see much that could be described as sadistic beyond ordinary bounds - indeed, the 'disappearing' is about separating people from Theranos as quickly and totally as possible, rather than toying with their prey. The disappearing served a useful role in enforcing compartmentalization, risk-aversion, and covering up information, but might there not be another reason?

    Ian Gibbons puts his finger on it exactly when he said that "It's a

    ." Or perhaps it would be more precise to invoke narcissistic personality disorder and compare Elizabeth Holmes to Donald Trump.

    Holmes did not start off as a psychopath determined to rip off VC and SV by using her cunningly honed social skills and sexuality to manipulate horny old white men, as one narrative goes. She was a normal ambitious Stanford undergrad (having met a dozen or so Stanford undergrads recently, Holmes now seems much more understandable to me), perhaps a little too eager to launch a startup, with delusions of grandeur about a entrepreneurial destiny and a bit of a chip on her shoulder; for reasons which cannot be known (as counterfactuals are not observable), she got lucky or was female or had family connections or something and she got some VC and support from her professors for what was a more feasible sort of idea which might've been workable, dropped out for a startup, was mentored by the likes of Larry Ellison (surely a red flag if ever there was one), hooked up with an entrepreneur even luckier & more delusional in a remarkably long-term monogamous relationship, selected for employees who initially offered helpful advice in fitting into SV tropes & self-presentation but gradually were recycled into sycophants and slaves, and developed her reality-distortion field abilities through practice and self-persuasion and a cultivated paranoia/martyr complex, and mutual narcissistic feedback loops with true-believer employees and Sunny and eventually the media, 'vanishing' anyone who threatened to damage her narcissistic supply and punishing them for being wretched hateful human beings and endangering the mission, all of which lasted for many years (while Theranos was only truly in the public eye from 2014-2017, the first version was founded in 2003, fully 11 years before!). That's very different, even if the end game, where criminal fraud and blatant lies are necessary to keep the show going, looks similar.

  • Roxane

    Fascinating accounting of the Theranos scam and I do mean SCAM. Exhaustively reported. I do wish there had been more analysis of how a scam of this magnitude was made possible and enabled. This girl dropped out of college and convinced Henry Kissinger, George Schulz, Rupert Murdoch and a bunch of other famous and/or incredibly talented people to give her money or work with her even though there was no there, there. WHAT? There are so many incredible WTF moments. Just wow. Privilege is a hell of

    Fascinating accounting of the Theranos scam and I do mean SCAM. Exhaustively reported. I do wish there had been more analysis of how a scam of this magnitude was made possible and enabled. This girl dropped out of college and convinced Henry Kissinger, George Schulz, Rupert Murdoch and a bunch of other famous and/or incredibly talented people to give her money or work with her even though there was no there, there. WHAT? There are so many incredible WTF moments. Just wow. Privilege is a hell of a drug, I guess.

  • Meredith B.  (readingwithmere)

    I'm a fan of financial stories and I personally work in the tech industry so when I heard about this book I knew I had to read it. If you like shows like Shark Tank, I think you will find this story interesting.

    Elizabeth Holmes is 19 and an incredibly smart girl. She decides to dropout of Stanford because she has an idea

    I'm a fan of financial stories and I personally work in the tech industry so when I heard about this book I knew I had to read it. If you like shows like Shark Tank, I think you will find this story interesting.

    Elizabeth Holmes is 19 and an incredibly smart girl. She decides to dropout of Stanford because she has an idea for a medical device that could

    The device is supposed to eliminate drawing blood through a large needle and instead simply prick your finger and get results faster. She becomes romantically involved with a guy 20 years her senior named Sunny who becomes a powerhouse at the company. They name the company Theranos. Elisabeth is called the next Steve Jobs. Her company goes and eventually is valued at 9 Billion dollars and she becomes the most valuable female CEO ever. Walgreens and Safeway buy into the idea and invest millions. Other famous names invest as well such as, Rupert Murdoch.

    This all sounds good and well right? Well what if you worked at a company and found out the entire product was a lie and didn't actually work? What if you realized that the company you are working for made a product that can potentially kill people because the company is faking results and putting innocent lives at risk? Would you quit or say something? If you quit you get harassed & sued (you have to sign an NDA) if you speak a word. If you speak up you immediately get fired and harassed. Let's just say the grass isn't always greener. One day the lies start to come out from a WSJ article when ex-Theranos employees start to speak anonymously...

    This story honestly blew me away. I have no idea how large companies such as Walgreens and Safeway were able to not see through the lies. Maybe Elizabeth was an amazing negotiator but if I invested hundreds of millions of dollars and the product wasn't hitting timelines I would end that ASAP. I think that the companies had FOMO (fear of missing out), at least Walgreens did. They were afraid of CVS getting the business instead, only to be duped.

    The author, who is also the WSJ journalist who broke this story, calls Elizabeth a sociopath. He says they are defined by: not having a conscience in regards to actions they've taken. I'm not sure I would have pegged her as that but when you think about it, she literally could have killed people if doctors actually believe this medical device worked. Luckily, the WSJ article broke before it became a real problem. But morally how can someone do that? Oh and if you look Elizabeth up online she's already starting to try to get people to invest in a new business idea she has. I guess she's moved on...

    This story was so interesting and I highly recommend for those who enjoy good business scandals/investment stories. It was a wild ride and I also learned a lot about blood science! This definitely lives up to the hype.

  • Rincey

    HOLY COW. I followed the Elizabeth Holmes/Theranos story slightly but this book does such a fantastic job of showing how completely banana pants this situation was.

    This was also great on audio, and so addictive that I started making up chores I could do just so I could keep listening.

    Watch me discuss this book in my July wrap up:

  • HFK

    While reading

    , my blood was boiling. Partly because I have enormous dislike towards Elizabeth Holmes, but also because our house has been doing 35 to 40 degrees (celsius) a day as does my workplace, too.

    (Finland, as well as many other European countries, is not designed for a hot weather, but instead our buildings and ventilation is made to keep

    . This includes private housing but also public infrastructure such as hospitals, shops

    While reading

    , my blood was boiling. Partly because I have enormous dislike towards Elizabeth Holmes, but also because our house has been doing 35 to 40 degrees (celsius) a day as does my workplace, too.

    (Finland, as well as many other European countries, is not designed for a hot weather, but instead our buildings and ventilation is made to keep

    . This includes private housing but also public infrastructure such as hospitals, shops, buses etc.)

    I was familiar with Elizabeth Holmes from early on due to reading a lot of medical and science oriented publications. To my surprise, not many of the people I talked during this read knew much about her or her scam with her company named Theranos. This, even she was hauled by many media outlets to be a female version of Jobs for her invention of a device that could map everything through a one drop of blood. A device that would eventually be found in people's private homes.

    Holmes marketed her i-phone-look-a-like invention as something that would change the world by making blood testing easy and less painful. Goodbye to the endless blood tests and needle poking, welcome a device that would find everything by just using a tiny drop from your fingertip.

    That is all great, but there was a problem - the device did not work, nor was it ever in levels where it could. This did not stop Holmes, she kept marketing and painting this heavenly picture of a groundbreaking medical invention. She managed to scam investors, professionals and people who are generally considered smart enough to not to be fooled in business moves.

    There was a lot of people pointing out the flaws, faults and the lack of substance, but they were often dismissed by the companies higher management in fear of "missing out". A syndrome that plagues industries - where something is considered so good and profitable that it is a risk to decline it in a case it would actually end up working and be found in the hands of the rivals.

    Elizabeth Holmes, and her shady crew, exploited this syndrome to the fullest. I still can't believe how she got away with it for so long as her methods were surprisingly poor, but her abilities to exploit this syndrome were extremely profitable.

    Elizabeth Holmes is a pretty, young lady. She is a blonde, has big blue eyes, and a baritone voice, which according to ex-workers might not be her real voice but a fabricated one. I understand the latter - as someone who has worked in telemarketing sections of multiple firms, my young sounding voice with a feminine rasp has been my greatest and most valued asset.

    When you add the inspirational way of presenting herself and having luminous way of handling her physical appearance, you had a package that was able to convince even the ones that should have not been.

    Holmes seems to posses sociopathic tendencies, and I do not even a moment think she was manipulated by older men, or that she was just innocently doing what everyone else in Silicon Valley do. The need and want to always see a woman in a better light.

    She wanted to be rich, that was her initial goal but adding something world changing into it was her way of getting her immortality. As someone who is married to an inventor that holds many patents in his and his teams name, I find calling Holmes as such is almost disgraceful to the people who work with integrity and talent to make betterments that no one notices even when that something would be a thing they use every single day.

    In Holmes case, she simply wanted something and put other people to work and she herself had little business in it other than not accepting anything negative, productive or reasonable about her views of how a device should be.

    She and her crew was an hideous example of corporation way of handling their business and their workers. The constant lawsuits, the intimidating acts and assembly line hiring and firing, surveillance and lack of interest of the ability and professionalism of their workmanship was an angering read to experience.

    More so, as this device of theirs was pushed up so far as actually being used, which resulted in false results, health-scares, unnecessary ER visits and most likely to unnecessary treatments and medication, too. Elizabeth Holmes made all this happen while knowing her device was not functional in any levels by hiding, lying and intimidating. She even promoted it to be used inside U.S. army - specifically in war zones.

    There could have been endless deaths, false diagnoses - but luckily there was John Carreyrou that kept going and exposing one of the biggest scams of recent years. Kuddos to him.

    John Carreyrou did exhausting research, interviewed over 60 former employers and connections, but Elizabeth Holmes herself declined to talk with him. That is surely understandable. It is not a long time she could keep up her false Jobs-act intact as the longer time you spend with a person like Holmes, the faster you notice that under all that civility, good manners, inspirational way of speaking has very little of substance.

    Holmes would make a great politician, probably very loved at that.

  • Lex Kent

    I don’t read a lot of nonfiction books. I love the imagination of fiction. When I heard about this book from a television show, it sounded unbelievable. The fact that this was a true story that seemed stranger than fiction, I had to give it a read. I’m really glad I did because this was really good.

    This story is about the youngest woman, to become a self-made billionaire, and the giant fraud she committed on Silicon Valley. Elizabeth Holmes, was a Stanford drop-out that used her knowledge and f

    I don’t read a lot of nonfiction books. I love the imagination of fiction. When I heard about this book from a television show, it sounded unbelievable. The fact that this was a true story that seemed stranger than fiction, I had to give it a read. I’m really glad I did because this was really good.

    This story is about the youngest woman, to become a self-made billionaire, and the giant fraud she committed on Silicon Valley. Elizabeth Holmes, was a Stanford drop-out that used her knowledge and family connections to build a billion dollar start-up name Theranos. Theranos invented a blood testing portable machine that could test all the different blood tests a major lab would with just a drop of blood. This was a major breakthrough as it could stop the need for needles and vials of blood sick patients have to constantly be subjected to. Not only that but these machines were to be rolled out in Safeway (a supermarket) and Walgreens (a drug store) all over the USA so everyone could afford to be tested. The problem with this great idea; the machines never actually worked!

    This truly is one of the biggest scams Silicon Valley had ever seen. The cheating and lies and manipulation are unbelievable. The amount of people Elizabeth managed to bewitch is staggering. These were smart people she swindled. If you live in the USA, you will be shocked by many of the big names that totally fell for the scam. Actually, the names are so big you will probably recognize them even living outside the USA.

    At one point Elizabeth was worth close to 5 billion dollars. This book is written by the Wall Street Journalist that fought to bring her lies to light. This book is also about the brave men and women who were ex and current employees that risked lawsuits and bullying to blow the whistle.

    If you have heard about this book and were considering reading it I absolutely recommend it. This is not my normal fiction I love to read, instead it’s the unbelievable truth.

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