Bad Blood: Secrets and Lies in a Silicon Valley Startup

Theranos was founded by 19-year-old Stanford dropout Elizabeth Holmes in 2003. The company’s big idea was to do blood tests using only a tiny drop of blood—a simple finger-prick. The blood-testing machines could even live in people’s home, with the results being transmitted to medical professionals immediately, enabling doctors adjust medications right away. This could revolutionize medical trials, never mind what it would mean for regular, routine blood testing if the machines started appearing in clinics and pharmacies.

The trouble was, Holmes and the Theranos team never actually designed a working machine. That didn’t stop them from soliciting massive amounts of money, making deals with the military, and entering into contracts with Safeway and Walgreen’s. They even started doing some blood testing, sometimes secretly using traditional machines and sometimes using the Theranos machines that never actually had proved to work correctly. When government inspectors came, they worked the system to limit the amount of testing required, and, when that wasn’t enough, they cheated.

Over the years, as employees sounded the alarms, Holmes reacted swiftly … to fire those employees and take steps to ensure that they wouldn’t share what they knew with anyone outside the company. Strict email monitoring, sudden firings, and strict non-disclosure agreements meant that all the shenanigans remained secrets, even as Holmes was appearing on magazine covers and being hailed as the next Steve Jobs, a reputation she encouraged by wearing black turtlenecks and hiring the ad agency that ran some of Apple’s most successful campaigns.

John Carreyrou, a reporter at the Wall Street Journal, started looking into Holmes and Theranos after receiving a tip from an employee. He was among the first to expose the company, and this book sums up what he learned after his years working on the story.

One of the striking things about this story is how vast the malfeasance was. Holmes and Theranos cheated in almost every conceivable way. Some of it, like exaggerating to investors, seems likely to be normal startup behavior. And not meeting deadlines and walking back promises also seem par for the course. What’s shocking is how far the company went without ever having developed the technology it promised. There were actual Theranos clinics doing blood tests—badly.

Carreyrou’s account is straightforward, but the story is so complex that I found myself losing track of the players at times. Carreyrou helps the reader by avoiding a strict chronological presentation and instead looking at different people’s experiences within Theranos and the different types of violations the company committed. So there’s no need to remember every person across multiple chapters. Instead, the book demonstrates a pattern of malfeasance. Big promises, failed execution, warning, cover-up. Again and again. I suspect this kind of thing goes on in plenty of companies. But the scope of the wrong-doing and the fact that it involved healthcare and thus endangered people’s lives in the name of money and fame makes this story especially shocking.

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