I recently reviewed the movie You Can See Everything and it got me thinking about Elizabeth Holmes and Theranos. It wasn’t much of a movie, in my opinion, and I only gave it one and a half stars. However, it triggered me to read Bad Blood.
The author, John Carreyrou, is an investigative reporter with the Wall Street Journal, and he was almost certainly the single most important catalyst in bringing down Theranos. I believe the company would eventually have collapsed without him and his work. Carreyrou didn’t create Theranos’ problems. Their technology didn’t work, its laboratory practices were deeply flawed, and Elizabeth Holmes, their founder and CEO substantively misrepresented the company to investors and customers. But in the end, Carreyrou’s detailed reporting and deep research brought on the sequence of events that took the company out of its misery.
In 2014, Elizabeth Holmes was widely seen as the next Steve Jobs: a brilliant young Stanford dropout whose startup “unicorn” promised to revolutionize the medical industry with its breakthrough device, which was presented to perform a whole range of laboratory tests from a single drop of blood. Backed by big-name investors, Theranos eventually reached a paper value of almost $10 billion. Inside, the scientists, engineers and managers could see the problems, but whenever they raised any issues, they were silenced or fired. Threats of litigation and surveillance by private investigators were tools they used to intimidate former employees to keep their mouths shut. And it worked for years.
Bad Blood is a documentary that exposes what truly happened behind the scenes, for years and years, and it shows the true Elizabeth Holmes, which is nothing like the demure and almost humble person portrayed in the movie You Can See Everything. Holmes was a ruthless megalomaniac manager and con artist, who would stop at nothing to obtain her objectives. Only her immaturity and lack of character allowed her to stay on top so long and do so much damage. She should have known that a house of cards will eventually fall, it’s just a matter of time.
Bad Blood tells the story of Theranos like a thriller. It’s a page turner every step of the way. I am an entrepreneur. I know what it takes to start a company. I know how hard it is to keep it alive through hard times and dry spells. Bad Blood shows in detail how not to keep a failing company going.
It’s a must read if you are an entrepreneur, if you’re interested in businesses for medical devices or medical services, if you want to understand the ethos of Silicon Valley and how companies are made, and if you want to know how white collar crime can succeed unscathed for years and years. It’s a masterpiece of reporting.
