Bad Blood: Secrets and Lies in a Silicon Valley Startup, by John Carreyrou
Warning: Do not begin this book at night, it is a page-turner and you may not be able to put this down.
This is a riveting story about the rise and fall of a Silicon Valley blood testing company, Theranos. Founded by Elizabeth Holmes, who dropped out of Stanford at 19, at its height, it was valued at $9B; yet it never produced a single working product. It is the story of how a brilliant woman manipulated famous, older men, unwilling to accept that Silicon Valley had passed them by. These men, among them George Shultz, Henry Kissinger, Larry Ellison, Sam Nunn, William Perry, David Boies and the former CEO of Wells Fargo served on the board and never questioned what was happening. Some were so willing to believe in Theranos that they diminished their reputations and even sabotaged family members in their delusion.
Elizabeth Holmes and her boyfriend, Sunny Balwani, had no understanding of medical technology, regulations, physics, biochemistry or biology, yet they managed to raise $900M on a vision, a device that never made it past the prototype stage. The Walmart fortune, Rupert Murdock, Betsy Voss, Larry Ellison and Silicon Valley venture capitalists, Tim Draper and Don Lucas were major investors. She was able to con Safeway and Walmart into building health clinics in their stores to utilize her devices. She did this by deceit and selling them her vision of a home-based blood testing system that used only a single drop of blood.
She preyed upon older men who were looking to become a part of an industry that had moved passed them, Silicon Valley. These were people who never understood medical device technology or prototypes. She and her boyfriend were equally inexperienced in prototyping and were impatient to see her vision, so they pretended that their nonworking prototype was a fully functional blood testing system.
How did she do it—by stroking egos, emulating Steve Jobs’s persona, bullying and litigating against any employee whistle blower, and suggesting that her technology was so special, no one could see it.
This is the story of how employees were bullied, threatened, harassed and litigated. Told by John Carreyrou, the Wall Street Journal reporter who unearthed this story. He tells how employees were treated, how the investors were conned and how the Wall Street Journal was harassed, bullied and threatened at every turn in their attempts to print the facts, that there was no reliable blood testing device that could use a single drop of blood for a myriad of tests.
It has you rooting for courageous whistle blowers who risked everything, especially George Schultz’s grandson, who was sabotaged by his own grandfather and ended up spending $400,000 in legal fees against Theranos’ litigation led by the famous attorney, David Boies.
Finally it is a story about how one article in the Wall Street Journal set in motion the dissolution of Theranos.
Ironically, after reading this, I went online and watched some of her interviews, and to me, it is so clear that she was equivocating, using jargon and never actually answering a single question. In fact, VC firms and other medical device companies saw through her and refused to participate, but it goes to show you that you only see what you want to see.