John Carreyrou: Bad Blood-Secrets & Lies in a Silicon Valley Startup

Themes Explored: fraud, technology, cult of personality, Steve Jobs, Apple, Silicon Valley, healthcare, healthcare startups, medical technology, innovation, investing, venture capital, fraud, nonfiction, crime, true crime, business, mystery, scientific innovation, science, blood testing

Synopsis:  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 testing significantly faster and easier. Backed by investors such as Larry Ellison (Oracle Founder) and Tim Draper, Theranos sold shares in a fundraising round that valued the company at more than $9 billion, putting Holmes’s worth at an estimated $4.7 billion. There was just one problem: The technology didn’t work.

A riveting story of the biggest corporate fraud since Enron, a tale of ambition and hubris set amid the bold promises of Silicon Valley. (Adapted from Goodreads)


Review: American culture celebrates the underdogs, brilliant inventors, and, more recently, the college dropout geniuses who become billionaires. Silicon Valley celebrates three main startup personalities: Bill Gates (Microsoft), Steve Jobs (Apple), and Mark Zuckerberg (Facebook). All three dropped out of college and built highly successful technology companies.

Other regarded founders include Travis Kalanick (UBER), Jack Dorsey (Twitter), Larry Page and Sergey Brin (Google/Alphabet), and Evan Spiegel (Snapchat). All these founders created massively popular products that revolutionized their industries.  

One problem.

All of these brilliant founders were male.

Silicon Valley and the technology sector at large have salivated waiting for a female technology founder to emerge from the shadows. Enter Elizabeth Holmes, a brilliant (then) nineteen year old with a needle phobia and plan to revolutionize the world of blood testing.

Modern medicine requires blood testing; it is the primary way to diagnose diseases. Usually doctors draw several vials of blood in order to conduct multiple tests. For people who hate needles, blood testing is an unpleasant, but necessary evil. Holmes envisioned creating a system that can run upwards of 1,000 tests using only a pinprick of blood drawn from the finger. Due to contamination issues, all blood for testing come from veins in the arm. 

While attending Stanford University, Holmes filed a patent for a wearable patch that could adjust drug dosages and notify doctors of variables in patients’ blood. Soon afterwards, Holmes dropped out Stanford to start her company, Theranos (derived from a combination of the words “therapy” and “diagnosis”). She soon moved on from the patch and decided to focus on making blood testing cheaper and more accessible to consumers. Originally, Holmes envisioned putting a Theranos machine in every persons home.

Almost immediately, Theranos raised millions of dollars.  By December 2004, the company raised over $6 million from investors and earned a valuation of $30 million. After Series B and C fundraising, Holmes raised $45 million in venture capital. By June of 2012, Theranos headquarters moved out of a rented basement office into the former Facebook corporate building. Significant news coverage in September 2013 allowed Theranos to raise over $400 million in investments and earn a valuation of $9 billion.  As Holmes held majority stock options, was CEO, and Chairman of the Board, she soon found herself the toast of Silicon Valley.

 The first female billionaire technology founder finally emerged!

Theranos received such significant investment and valuation because Holmes claimed to have developed devices to automate and miniaturize tests using microscopic blood volumes. Theranos dubbed the collection vessel the “nanotainer” and the analysis machine the “Edison.” Early skeptics criticized the machines since Holmes refused to have her equipment undergo outside testing and peer review. After severe scrutiny, Holmes allowed the Cleveland Clinic to complete a validation study of her technology.

In March of 2016, a study authored by 13 scientists appeared in the Journal of Clinical Investigation. The authors determined that the Theranos technology contained fatal flaws and delivered unreliable results. Edison Machines could not recreate two identical tests from the same sample. Even though the technology did not pass a peer review test, Holmes launched the product into the consumer market. She inked deals with Walgreens and Safeway to roll out the Theranos machines in the respective stores “wellness centers”. Early pilot programs for the product did not go well and doctors routinely complained about the lack of reliable test results.

Elizabeth Holmes, as portrayed in this book, does not come across in a positive light. She desperately wanted the world to see her as the reincarnation of Steve Jobs, and took to wearing a black turtleneck and black pants, in homage to Jobs’ famous ensembles. As she read Walter Isaacson’s biography of Jobs, Theranos employees guessed which chapter she finished based upon the leadership mantras she espoused.

Still, Holmes is not the only villain. Theranos’s second-in-command, Sunny Balwani, holds a lot of blame. Sunny was not only the second-in-command, but also Holmes’ boyfriend. A fact they chose to hide from investors. (Most investors like to know if the CEO is sleeping with the COO)

Yes. Silicon Valley’s first female billionaire hired her boyfriend.

Over the course of the book’s narrative, Balwani’s behavior ranged from petty to vindictive. He harangued employees about the number of hours they worked and used security footage to track their comings and goings. Holmes and Balwani encouraged employees to work on the weekends and not pursue interests outside of work. At one point, after a round of resignations, Balwani and Holmes held a company wide meeting where he declared that “anyone not prepared to show complete devotion and unmitigated loyalty to the company should ‘get the f*** out.’ ” Holmes then declared that she was building a “religion” and distributed copies of The Alchemist to everyone.

Despite the promising facade Holmes painted in multiple interviews, the technology simply did not work and continually produced erroneous results.  Holmes is currently facing a criminal trial for wire fraud. This book is a fascinating look into the cultic world of Silicon Valley startups. Despite the success achieved by multiple college-dropouts, not everyone who chooses to leave school early is going to reach billionaire status. Rolling out a slightly underdeveloped app is much different from debuting a flawed medical device that could result in people’s death. Watch the news for updated information about Holmes ongoing legal woes.

Jennifer Lawrence is portraying Holmes in the upcoming movie adaptation of the book.

(As an aside, the most successful startups tend to be founded by people aged 42 and above. Shockingly, experience and industry knowledge tends to pay off over the long run.)

Bad Blood: Secrets & Lies in a Silicon Valley Startup, 2018, Knopf Publishing Group, ISBN: 9781524731656

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