Bad Blood

Secrets and lies in a Silicon Valley startup.

By: John Carreyrou

Published: 2018

Read: 2019


The rise and fall of Theranos, a Silicon Valley startup that tried unsuccessfully to develop a miniature blood testing device. Pursuing a “fake-it-till-you-make-it approach”, the company, headed by its founder Elizabeth Holmes and her business and life partner Sunny Balwani, ultimately failed in its pursuit and along the way, allegedly misled and manipulated investors, regulators and ultimately its customers, while bullying ex-employees or anyone that threatened to stand in its way.

The core themes of this story are the trial and error culture of Silicon Valley, the tension between entrepreneurial high-flying visions and the daily realities of realizing such visions, the dangers of limited transparency in highly valued private companies, the potential cost of high conviction and confidence, and the slippery slope of white lies.

The company’s strategy of trial and error was wholly inappropriate given the medical nature of its product and put many people unnecessarily (and unknowingly) at risk. Its deceitful and secretive corporate culture and questionable morals appear excessive and counter-productive and it seems likely that Holmes and Balwani should shoulder most of the blame for all of this.


Worth Reading:

An intriguing story, researched and written as well as can be, given the challenging legal environment. It can be difficult to understand from this book what attracted so many (board members, investors, employees) to this company, its product and management team.

It would perhaps have been helpful to spend more time on the state of the industry and to describe in more detail what would have made the company’s product potentially so compelling. As explained elsewhere (see HBO documentary “The Inventor“), the lab industry was ready for disruption: a duopoly with high prices, a lack of transparency, limited patient autonomy and suspicions of Medicare over-charging. Theranos’ appeal to many was its pursuit of drastically lower prices, easier access, and repetitive testing that could lead to more predictive medicine.

Common start-up issues (chaos and secrecy, twists and turns in strategy and execution, the daily scrimmages of office politics) are described in detail in support of the story of the company’s ultimate betrayal of public trust and harm done to patients. They are also used to paint Holmes and Balwani as the story’s pantomime villains. 

But there is probably more blame to go around. Many big name individuals were involved as board members or investors for long periods of time. While they may not have had much control of, input into or information about the company’s operations and financials, their names and reputations were a major part of the company’s image, sales pitch and regulatory strategy.  

Ultimately, this is a harsh, but justified review of one of the larger corporate frauds in recent history. Once the legal dust settles, the author, who originally broke the story for the Wall Street Journal, may gain access to additional sources inside the company. There are probably more stories waiting to be told.

Practical Takeaways:

  • “You go after the king, you best not miss.”
  • “Be polite, be professional, but have a plan to kill everybody you meet.” (James Mattis).

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