The full inside story of the breathtaking rise and shocking collapse of a multibillion-dollar startup, by the prize-winning journalist who first broke the story and pursued it to the end in the face of pressure and threats from the CEO and her lawyers.
In 2014, Theranos founder and CEO Elizabeth Holmes was widely seen as the female Steve Jobs: a brilliant Stanford dropout whose startup “unicorn” promised to revolutionize the medical industry with a machine that would make blood tests significantly faster and easier. Backed by investors such as Larry Ellison and Tim Draper, Theranos sold shares in a fundraising round that valued the company at $9 billion, putting Holmes’s worth at an estimated $4.7 billion. There was just one problem: The technology didn’t work.
For years, Holmes had been misleading investors, FDA officials, and her own employees. When Carreyrou, working at The Wall Street Journal, got a tip from a former Theranos employee and started asking questions, both Carreyrou and the Journal were threatened with lawsuits. Undaunted, the newspaper ran the first of dozens of Theranos articles in late 2015. By early 2017, the company’s value was zero and Holmes faced potential legal action from the government and her investors. Here is the riveting story of the biggest corporate fraud since Enron, a disturbing cautionary tale set amid the bold promises and gold-rush frenzy of Silicon Valley.
In case you’re unfamiliar with the Theranos story, here’s a quick breakdown:
- Elizabeth Holmes had an idea to create a small machine that could run several blood tests using a single drop of blood.
- She convinced investors to contribute nine billion dollars to the company under the pretense that she already had a functional device.
- She provided false data in demonstrations because the machine rarely worked.
- Despite mounting evidence that the machine gave dangerously bad results (imagine getting a false positive in a blood test for prostate cancer or a false negative on an HIV test), she somehow finagled contracts to put her machines in Walgreens and Safeway.
- As the company began to fall apart, Holmes and other Theranos higher-ups did everything in their power to hold on to their fraudulent device, including threatening their employees with lawsuits and attempting to convince the United States government that their laboratory didn’t need to meet standard requirements.
Bad Blood chronicles the incredible story of what happens when someone is willing to do just about anything to gain fame and fortune. I’d like to say that the sheer entitlement of the major players at Theranos came as a surprise, but it didn’t.
After working in the medical field for most of my adult life, I’ve met more than one person that I could see going down a path like this if they were given enough money. I’ve met more than one person who thought that government regulations shouldn’t apply to them because of one nonsensical reason or another. The amount of times I had to say, “NO, WE CAN’T DO THAT, THAT IS LITERALLY THE DEFINITION OF FRAUD” during seven years in a private practice means that I’ve lost most of my faith in any kind of for-profit healthcare institution. All of that is to say that while this is an absolutely mind-boggling story, I can also kind of see how it would happen.
I’m very happy that Theranos has been shut down and I’m looking forward to the results of the fraud trial. I don’t know if John Carreyrou plans to write any more books like this, but if he does, I’ll be first in line to read them.
Have you read Bad Blood? What’s the last really good nonfiction book you read?
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