"Bad Blood" by John Carreyrou

Above: "Bad Blood." John Carreyrou. 301 pages. I completed reading the above book today, 04 November 2022.

Central to the story, of course, is how far Elizabeth Holmes could take her act of deceit and lies without being exposed.

Theranos. The biggest US corporate fraud since Enron. 2014, Theranos founder and CEO Elizabeth Holmes widely seen as the female Steve Jobs, invents new blood testing technology that is faster, easier, and less costly, bypassing traditional (read expensive and slow) blood testing protocols. In 2014, the company reached a valuation of over $9 billion putting Holmes net worth at $4.7 billion. Holmes attracted rock star investors such as Larry Ellison, Rupert Murdoch, Betsy DeVos and Tim Draper, and an all-star board of directors, including George Schultz, Jim Mattis, Sam Nunn, and Richard Kovacevich.

Key Theranos employees, including the grandson of director George Schultz, had misgivings about the claims being made by Theranos technology. As the blood testing method was being rolled out through partnerships with Safeway and Walgreens, these insiders feared that lives would be put at risk because of faulty blood test results. Facing threats of retribution from the company, these insiders bravely put their careers at risk by outing the alleged wrongdoing. Author John Carreyrou, a reporter at the Wall Street Journal (WSJ), was tipped off to the alleged fraud and worked his sources assiduously. Via a series of WSJ articles published in 2015, notwithstanding intense pressure by Theranos attorneys led by uber attorney David Boies to deep six the report, the scam came to light.

In September 2018, Theranos paid out its remaining creditors at fifteen cents on the dollar and dissolved the corporation. On 04 January 2022 Elizabeth Holmes was convicted on four counts of defrauding investors after an almost four-month long landmark trial in California. She is appealing her conviction as this review is written.

For years, Holmes had been misleading investors, FDA officials, business partners, Theranos directors and her own employees. How was she able to pull this off? Carreyrou attempts an explanation. He says that hyping one's product to get funding while concealing one's true progress and hoping that reality will eventually catch up is de rigor in Silicon Valley. Who is to say that given more time, Holmes dream of success would not have come to fruition? Notwithstanding Holmes demise, many of her supporters claimed she was misunderstood, and that her dream could have been realized had she been given more time. The problem with this view was that medical treatment for thousands of customers was being prescribed based on faulty blood tests.

The account of former Secretary of State and Theranos Director, George Schultz's estrangement from his Theranos whistle blower grandson is poignant. Notwithstanding being warned by his grandson, Schultz stood steadfast in his support of Holmes. The stories of other whistleblowers, including doctors who claimed to be burned by the faulty tests, are riveting, considering the risks they took to out the faulty tests in the face of intense Theranos pressure and pushback.

Central to the story, of course, is how far Elizabeth Holmes could take her act of deceit and lies without being exposed. She seemed to possess some kind of hypnotic genius. It seemed that otherwise savvy people turned gullible in their desire to see a female succeed in the all-male Silicon Valley environment.

Bill Gates sums up the book well: "I found myself unable to put it down once I started. The book has everything: elaborate scams, corporate intrigue, magazine cover stories, ruined family relationships and the demise of a company once valued at nearly $10 billion."