Book Review : BAD BLOOD by John Carreyrou
TL;DR — **Contains spoilers** Bad Blood is the quite unbelievable tale of Theranos, the unicorn blood testing startup that perpetrated massive fraud and made a lot of supposedly clever people look very silly. Boies Schiller (famous law firm) and, to a lesser extent, WSGR get hauled over the coals too. If you’re at all interested in the human psyche and what drives humans to deceive on such grand scale (think: Lance Armstrong, Bernie Madoff) you should read this immediately.
I’m slow to the punch, I know. Bad Blood was published back in May this year and I’ve only just gotten around to reading it. I’d like to think that it was because I didn’t want to read it during the melee of reviews and commentary that surrounded it’s launch so as to be more objective. The reality of the situation is that I didn’t give it due share of mind, it’s (still) a saved item in my Amazon shopping cart and my mother in law actually bought it for me. Just as well really, it’s a barnstormer.
For those unfamiliar with the story of Theranos…Elizabeth Holmes, a Chemical Engineering dropout from Stanford, sets up Theranos on the back of a ridiculously futuristic patent. That patent describes a patch with micro-needles constantly monitoring biomarkers and instantly being able to perform a variety of blood tests on the fly. She manages to raise some small millions and seems to both discover and cultivate her very own Jobs-esque reality distortion field. A small part of that seems to relate to her astoundingly deep voice. Something that is hard to believe that she doesn’t/didn’t put on.
It’s very apparent that Holmes’ original idea was very far removed from the possible. The business morphs into a vision for large-scale pin-prick blood testing. Which, as we all know, also turns out to be very far removed from the possible.
This vision of pin prick blood testing gets many an individual and organisation’s pulse racing. For those scared of needles, the product has an intuitive appeal. The possibility of instant diagnosis has everyone from Walgreens to the US Army champing at the bit to get a piece of the action. Indeed James Mattis (the current US Secretary of Defence) becomes so in thrall to the idea that he joins the board in the heady years of ‘success’. He’s not the only doyen to join the board, he’s joined by various industries’ great and good. That includes two former Secretaries of State, former Senators, Managing Partners of VC firms and a former CEO of Wells Fargo. Theranos breathed rarified air, for a time.
There was a fundamental problem. The technology was vapour-ware. The tests were erratic at best. Theranos IP was in fact hacksawed bits of other companies technology, forced to work at a micro-scale (Holmes’ main focus seemingly…contrived in its reflection of her idol Steve Jobs) and as a result rendered totally unreliable. It’s worth specifically pointing out at this point that giving people false readings on health tests ruins people’s lives. Easily.
How did this all happen? Well, Holmes’ isn’t without many useful skills. Hiring brilliant people is clearly one of them. Summarily dismissing them is another. When one well regarded CFO leaves the company in its early days citing concerns about the state of the technology, Theranos’ board look to oust the young Elizabeth only for her to talks them round, somehow. Canny sales craft is another. Theranos seemed to deliberately avoid experienced healthcare investors (wary of prying DD exercises, I’m sure) while majoring on “number two” businesses in their sector. Theranos’ Walgreens tie-up is slightly more understandable in the context of their willingness to do anything and everything to overhaul CVS as America’s #1 pharmacy.
Like any great fraud, hindsight has you struggling to comprehend one oversight after another. For example, Elizabeth’s boyfriend Sunny takes a shadowy role at the company, terrorises the staff and seems to provide no real purpose beyond being aggressive and doubling down on Elizabeth’s (in retrospect understandable) crazed attitude to security. The board appear to be unknowing about Elizabeth and Sunny’s relationship, much less concerned about his behaviour. Theranos has outspoken (and extremely well regarded) supporters even to this day.
There seems to be a couple of key themes enabling the show to be kept on the road. First is Elizabeth’s reality distortion field, which seems to work extremely well in the company of post-retirement-age-successful-men. I’ve no idea why, but there seems to be one silver-haired-success-story after another who get caught up in the whirlwind of Elizabeth’s brilliance. Indeed her relationships with the firmament provide great degree of cover and protection for Theranos carried on the magic wind of the time where Silicon Valley could do no wrong. The second is the role of lawyers in the saga. The extent to which Boies Schiller, and to a lesser extent, WSGR go to supporting Elizabeth is as impressive as it is appalling. The lives and families ruined in the wake of lawsuits, threats and intimidation from these storied firms rack up. Indeed some of the most alarming content in the book concerns the extent of their operations and attempted deterrence in the last-days of Theranos where must surely have been so much writing on the wall at to obscure the paint.
If you’re still reading at this point, you’ve probably guessed that I think that Bad Blood is well worth a read. It’s bursting at the seams with intrigue, error, oversight and the demise of a rotten enterprise. Why read it beyond all that? Read it for an insight into Holmes. She either remains an enigma — revealing little, or remains so confident in herself that the effect is the same. Either way: she’s a fascination…and perhaps that’s the element that underpins the whole episode.
Whenever I read a book I tend to get hooked into a loop of listening to the same songs that I feel come to represent some of the key themes that I’m reading about.
Listen to: A Great Design by Black Marble because it has an almost delusionary upbeat vibe, just like some of the characters in the book.
