Book Review - Bad Blood - Secrets and Lies in a Silicon Valley Startup

Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou chronicles the rise and fall of multibillion-dollar biotech startup Theranos. Theranos was started in 2003 by 19-year-old Elizabeth Holmes, a Stanford dropout and former chemical engineering student. Holmes promised investors that her revolutionary technology would perform hundreds of diagnostic tests from only a couple of drops of blood taken from a nanotainer. The problem was that it never worked. However, by 2013 Theranos had made a hundred-million-dollar deal to put its blood testing technology in Walgreens. Holmes ’ showmanship resulted in Walgreens executives skipping any testing of the Theranos machines before finalizing the deal.

Holmes backstage at TechCrunch Disrupt San Francisco in 2014

Elizabeth Holmes quickly became the darling of Silicon Valley, as she was the youngest self-made female billionaire in history. She was on the cover of esteemed magazines such as Forbes and Fortune and she was heralded as the next Steve Jobs. Holmes was valued at $4.5 billion as she owned half of Theranos, at one point valued over $9 billion.
Theranos faked demonstrations to its investors and falsified data, ultimately risking patients’ health. When investors would get their blood tested on a Theranos machine, the machines were programmed to show very slow progress rather than revealing any errors. Investors would leave the room since it was taking so long and employees would remove their blood from the Theranos machine and transfer it to a commercial analyzer, later sending the data to the investor as if it was generated by the Theranos machine.
Elizabeth Holmes and her COO, Sunny Balwani, maintained  very strong security against any dissent and leaks. In Bad Blood , John Carreyrou describes how the Chief Financial Officer was fired by Holmes for questioning the reliability of the company’s lab-testing systems and equipment.  Employees had to sign iron-clad non-disclosure agreements and were advised not to post their employment even on LinkedIn. Employee collaboration was banned, and even departments could not communicate with each other about the progress of projects. The company justified this tight security as a means of protecting intellectual property.


Tyler Shultz and Erika Cheung were two of the few employees who spoke out against Theranos. Shultz was confronted at his grandfather’s house by Theranos lawyers and Cheung was followed for months after her departure by private investigators hired by Theranos. John Carreyrou’s sources, including doctors, patients and phlebotomists who worked with Theranos machines, were personally threatened by Balwani and his gang of lawyers to deter them from speaking with Carreyrou or other investigators.
Ten years of stellar growth began to unravel due to high turnover of employees, excessive security practices, and growing suspicion of the company’s methods. The truth cannot be hidden forever and in 2015, John Carreyrou began exposing the issues with the blood-testing technology at Theranos in a Wall Street Journal piece. It was the beginning of the end for Holmes’ startup. After the article was published, Theranos tried to discredit Carreyrou as a paid hack from Quest Diagnostics but these efforts were ultimately unsuccessful. A long legal war between The Wall Street Journal and the multibillion-dollar startup ensued, eventually contributing to Theranos ceasing all operations in September of 2018.


In March of 2018, the Securities and Exchange Commission announced “massive fraud” charges against Theranos, Holmes and Balwani and Holmes’ trial is set to begin on August 4, 2020. She is currently being charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud and could face up to 20 years in prison.
I believe Theranos is a perfect example of human greed having no limits even though the initial idea  of starting a blood testing company to help people could have been well-intentioned. The story of Elizabeth Holmes and Theranos is a cautionary tale for every entrepreneur and this becomes especially important in health care since lives are on the line. Bad Blood is an absolute page turner and there were times when I had to remind myself that it was not a work of fiction. The story of Elizabeth Holmes  reminds me of Icarus from Greek mythology , and just like Icarus, Holmes flew too close to the sun and her own ambition caused her to have the ultimate fall from grace.

Pratish Adhikari, Dec 12, 2019


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