Bad Blood: Secrets and Lies in a Silicon Valley Startup

Wellness technology is ascendant in Silicon Valley. Apple’s series 6 watch provides EKG and blood oxygen tests. Because their blood oxygen test is marketed for wellness and not as a medical instrument, it does not require FDA approval. As innocuous as this sounds, the unification of Silicon Valley and medical testing is a cause for alarm.

Theranos, a portmanteau of therapy and diagnose, was Elizabeth Holmes’ Silicon Valley startup for disrupting the lab testing industry with a device that could run hundreds of blood test simultaneously using just a drop of blood pricked from a finger. Holmes delivered presentations that gained Theranos billions of dollars in venture capital money and the support of Henry Kissinger, James Mattis, and Rupert Murdoch. She crafted her image and personality to fit the American innovator architype. To remind people of Steve Jobs, she wore a black turtleneck sweater every day to her office and to presentations.

If Holmes’ idea worked, it would have revolutionized the lab testing industry. However, Holmes wasn’t interested in the slow, methodical work of engineering a miniaturized lab testing machine. She followed Silicon Valley’s Vaporware tradition of overpromising and underdelivering. When software and computer hardware firms engage in sales lies, no one gets hurt. When biotech companies disrupting the lab testing industry do this, healthy people pay for expensive and unnecessary tests and people with treatable illnesses are told they are healthy. People go broke or die when blood testing is inaccurate.

Elizabeth Holmes faces 2 counts of conspiracy to commit wire fraud and 9 counts of wire fraud, 20 years in prison, and a 250,000-dollar fine.

Americans are easily fooled by hucksters who overpromise and underdeliver. As American citizens, we need to require supporting data and follow-through when people make extraordinary claims. When we don’t think critically, we invite grifters to scam us.

John Carreyrou’s reporting on Theranos and Elizabeth Holmes brought him in conflict with the threats, lawyers, and private investigators purchased with billions in venture capital. His dedication to the truth and victims of Theranos’ inaccurate tests is a shining example of why we need an independent press. If you start reading Bad Blood, you won’t be able to put it down : slpl.bibliocommons.com/item/show/1415732116

This tale of colossal Silicon Valley failure reads like a thriller. The most amazing part is not the failure per se. Businesses fail all the time. It is the fact that Theranos and its charismatic CEO, Elizabeth Holmes, were able to fool elder statemen, venture capitalists and investors, and the public, for about 15 years before the whole house of cards collapsed. All the signs were there all along, as reported by WSJ reporter John Carreyrou, but they were ignored or dismissed. Instead, Holmes's image and charisma, combined with a hefty dose of paranoia, imposition of fear, and Scientology-level retaliation tactics, loom large. But in the end, there is also no question that Holmes came from privilege and was able to marshal that resource any time she needed. This book also goes deep into the actual management of Theranos, the reign of terror of Holmes's right-hand man, which led to internal dysfunctions, high turnover, and low employee morale. Those are of interest to anyone working on group behavior, management of large organizations, and leadership.
All in all, it makes for a very creepy tale.