In 2014, Theranos, a health-centered technology company based in Silicon Valley, received a $10 billion valuation, with its founder, Elizabeth Holmes, having an estimated net worth of $4.5 billion.
Most of this money had been collected through investments by notable figures in politics and technology like Betsey DeVos ($100 million investment), The Walton Family (Walmart founders-$150 million donation), and Mexican tycoon Carlos Slim, along with key contributions from huge pharmacies such as Walgreens ($140 million investment) and grocery store giant Safeway ($350 million deal).
Theranos secured these investments through a combination of covert, unfounded claims concerning the power of their technology along with the deception of several government institutional testing. Currently, Theranos has a valuation of $0, with Elizabeth Holmes pending trial with a potential 20 year prison sentence.
This is the story why.
Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou is the complete tale of the rise and fall of Elizabeth Holmes and her company. Holmes founded Theranos at age 19 shortly after dropping out of Stanford, completing only one year of college education.
Holmes's original idea for Theranos developed during the winter break of her freshman year. She approached Dr. Phyllis Gardner, a Stanford Medical School professor, with the idea of creating a patch which would diagnose and treat illness. Gardner expressed immediate doubts in the possibility of such a miracle invention, but that didn't stop Holmes.
She shortly approached wealthy family members and family friends with her idea, securing nearly $6 million by the end of 2004.
In the next few years, Holmes altered her original plan; her new goal was to create a device which could analyze only a few drops of blood and run hundreds of tests on it. If Theranos was successful in this creation, it would have significantly reduced the need to draw blood in many scenarios, along with drastically improving the blood testing experience, as all that would be needed would be a single finger prick.
Theranos eventually developed a prototype called the "Edison," which was effectively a robot arm running the same steps to test blood as a live chemist would inside a box. It also diluted the blood with a saline solution, greatly decreasing the accuracy of any test performed. Employees of Theranos report expressing severe doubts concerning the efficacy of Theranos as a whole after viewing this poorly made product.
Of course, those doubts didn't phase Holmes, who went on to make deals to put these inaccurate, prototype medical devices in pharmacies across the country. She made claims that were severely unsubstantiated and put patients' lives at risk.
Eventually, through a combination of employee whistleblowers and patient stories, Theranos's lies and deception were exposed to the world, shutting down the company's criminal behavior and bringing its leaders to justice.
In this book, Carreyou makes the point that in healthcare, "hyping your product to get funding while concealing your true progress and hoping that reality will eventually catch up to the hype" is not a valid method of progress. However, this is still a commonly used strategy in Silicon Valley tech companies.
This book truly brings to light every detail of Theranos's malfeasance and shows the reader why this strategy cannot be replicated any longer.
I loved this book; Carreyou took a gripping, intense story and compiled it all into an easy-to-follow narrative. He was a major component of bringing Theranos down; because of this, he presents unique insights and convincing arguments that no other author could have done.
I would recommend this book to anyone who has an interest in technology and the cutthroat culture of Silicon Valley startups. It reads like a thrilling true crime novel, yet it's all factual and current.
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