Book Review — Bad Blood

Just finished reading the book Bad Blood by John Carreyrou. Oh man. What a crazy book to read. As I read it, I really could not believe what I was reading was true. Also, much of it was hard to read — in the sense that I really could not believe they acted that way.

It’s a story of some of the rise and fall of Theranos, and the eccentric founder Elizabeth Holmes who created the company. She is a young genius founder who creates a futuristic biotech company which becomes the next big thing in Silicon Valley. She dazzles many Very Powerful People who look past any questions about the company. She compiles a very politically connected board and raises large sums of investment capital.

The company has a culture of secrecy, a revolving door of firings, a toxic corporate culture, and one of intimidation. Anyone who brings up legitimate concerns is fired and threatened.

There may have been an initial really great idea in improving blood testing, but it crosses a point where she is lying to many people, and many of the employees cannot in good conscience keep working there. She advertises that the Theranos technology can do many things it can’t — but the essential issue is that the devices just don’t work. However, large companies like Walgreens and Safeway are duped into entering into large contracts with them.

Amazingly, the company continues to grow as really a true house of cards. The investors and board are so swept up in her charm and vision that no one has actually checked even the most basic due diligence items, like that the devices work as stated.

Ultimately, a few whistleblowers help break open the story, but not until after severe damage has been done to many patients who took faulty tests, and many employees who were essentially harassed by the company. It’s a crazy book to read. It’s also crazy to think how long people were fooled.

Takeways

What are my takeaways from this book? One — I think you really need to give credit to some of the young Theranos employees who took a huge personal and career risk to report some of this information. I think it’s interesting it was some of the younger employees who had to speak their conscience.

Two — it’s hard to read this book and not develop a cynicism towards this way of business. Holmes lived in a world that was pretty disconnected from reality. I doubt that she entered the business trying to defraud tons of people — it seems she must have initially been interested in trying to really help people. I wonder what went wrong and when things crossed this large ethical line. It’s really unfortunate to hear of all these supposed important people praising her and her integrity and technology while all along none of that is accurate. It suggests that you really need to do your own homework.

Maybe she started a company, made some big promises, and then instead of owning up to it when things didn’t work, continued to lie.

Carreyrou near the end of the book writes:

Hyping your product to get funding while concealing your true progress and hoping that reality will eventually catch up to the hype continues to be tolerated in the tech industry.

This is definitely true. Where is the line here? It seems that there is a line between optimism and hard-charging growth and trying to bring a new idea to a difficult market … and outright fraud. What are the consequences of “moving fast and breaking things” as a guiding philosophy espoused by Facebook being adopted by many startups. In many cases it may be fine, and in others… well then it could have very bad consequences, like in the case of Theranos.

How also do you assess the accuracy of the piece? With the number of different people spoken to, I think the author builds an accurate picture. However, there are always things that are missed. Overall, however, my takeaway from the book was that this was a pretty insane story and much worse than I had thought from seeing headlines before.