Elizabeth Holmes dropped out of Stanford in 2004, just after her freshman year, to start a biotechnology company called Theranos. She believed that with a small drop of blood (Figure 1), people could be tested for different diseases and deficiencies. That idea turned out to be more fiction than reality. Much of her support came from her Stanford professor, Channing Robertson, who helped her start her company and meet investors. Through carefully crafted efforts to convince investors of the worth of her idea, Holmes was able to secure billions of dollars in funding. She did this with a faulty prototype that piqued the curiosity of investors but that never actually functioned as a tool for disease diagnosis. Eventually, Holmes became known as the “Steve Jobs” of the biotechnology world due to her similar fancy for black turtleneck shirts and her demanding, empowering personality. In many ways, Elizabeth Holmes was an enigma whose company’s growth had no apparent explanation to outsiders. John Carreyrou, an investigative journalist affiliated with the Wall Street Journal, investigated the rise and fall of Theranos extensively and revealed his findings in his book Bad Blood: Secrets and Lies in a Silicon Valley Startup.
A device that is able to diagnose several things from a tiny drop of blood is hard to imagine and would presumably take years to even be close to perfect. Holmes sadly didn’t have the patience to wait years in order to get a perfect product that she could have approached investors with. Instead, she led them on with an articulately designed prototype (Figure 2) which failed to do simple tests done accurately by other devices already in the market. This duplicitous behavior, along with the culture of secrecy at Theranos, led Carreyrou to look into what was hidden behind the publicity stunts and high investments. He approached previous employees along with patients and doctors who had experience with the Theranos device. Using these interviews, he created a narrative through the voices of those who had been deceived by the company’s promises. Previous employees related their accounts of being subjected to constant surveillance of their emails, their interactions within the workplace and outside, and their workload. If they didn’t work as hard or as long as Holmes did, they were questioned about their efforts. Holmes’ unreasonable demands clashed with her employees’ desire to offer a working product while holding true to their morals. Some employees had previously worked at Apple in fairly senior positions and only came to Theranos because they thought that their work would be helping people. When they realized their work was perpetuating a fraud, they couldn’t even express their concern because doing so would violate their contracts. Carreyrou had to secretly and anonymously present their insights because without anonymity, Holmes would even go as far as to take these dissenting employees to court.
Carreyrou originally broke the news about the corruption within Theranos through the Wall Street Journal. His book is a well-rounded narrative that tackles the subjects of lawsuits, emotional blackmailing, the flawed science and technology behind the failed device, and even family issues that influenced Holmes’ decision-making. Carreyrou details a personal encounter with Theranos and Holmes regarding the publication of his investigative piece on the company. That investigative piece, which led others to take a closer look at the company, is what inspired Carreyrou to put together this book. The best way to describe this book is as a nonfiction thriller with some science in it. It details how a college dropout with no experience running a company and no background on engineering biotech devices managed to keep a company afloat by convincing investors—including military officers—that she had something of value. Theranos is currently undergoing several legal deliberations and Elizabeth Holmes and Sunny Balwani, Holmes’ so-called partner-in-crime, are under fire for their actions. The FDA even went in and reexamined the company’s facilities. A company that once had hundreds of employees has been reduced to a few primary members along with a scattered board. If you want to know how something so ridiculous persisted for several years, you must pick up this book and make some time to read it.
There’s quite a lot one can learn from this book besides learning how to build a company on a foundation of lies. For example, people like Elizabeth Holmes may have good intentions when they start out, but their obsession with success can corrupt their goals. She almost became the flag-bearer for women and girls in STEM as her success inspired many; nonetheless, her downfall created instability for start-up companies. It’s already a big risk for investors to put money into start-ups, so when this kind of deception occurs, their fears are heightened. During the peak of her success, Holmes was on the cover of several reputable magazines like Fortune and Forbes (Figure 3). She was a female CEO in a male dominated field, and she broke down several barriers to rise to power. That is in many ways a win for women and girls fighting for the representation of their voice in science and business, but in a world that can manipulate things negatively, her mistakes might also make it harder for underdogs to get a chance at representation.
Holmes and her company made a lot of mistakes, especially with research and development. Product development takes time and it should take time; having an idea is not enough and one shouldn’t be stubborn about preserving the essence of an idea if it is failing. Science requires consistent trial and error to produce consistent results, which obviously was not Holmes’ goal. Carreyrou’s writing shows that this was essentially what led to Holmes’ downfall.
Bad Blood reinforces the idea thatconsumers should always question everything, even if it is displayed on fancy magazines or presented at high-profile conferences. A company has many dimensions, but trust is one of those things that must be the foundation. Holmes didn’t trust her employees, kept them under constant surveillance, and concealed things from them. She subjected them to competition, inefficient communication, and constant fear and stress. That’s not okay in any work environment. Somehow, this young woman with just 1 year of college under her belt was able to have control over several PhD’s, experts, and so-called geniuses. They could have stopped working for her whenever they wanted, but Holmes’ preaching for the possibilities of the device kept them loyal for a time. While this review is just a glimpse into the lies and deception of Theranos, it is an eye-opening read for those involved and interested in law, medicine, science innovation, and business. Carreyrou’s writing and Holmes’ thirst for success with Theranos will fascinate you as you delve into Bad Blood: Secrets and Lies in a Silicon Valley Startup. Kick back, relax, and add yourself to the hold list because this book is worth the wait.
Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou