I don’t read a lot of page turners. I often find myself unable to put a book down—but they’re not the kinds of books that would keep most people glued to their chairs. Still, I recently found myself reading a book so compelling that I couldn’t turn away.
Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou details the rise and fall of Theranos. If you aren’t familiar with the Theranos story, here’s the short version: the company promised to quickly give you a complete picture of your health using only a small amount of blood. Elizabeth Holmes founded it when she was just 19 years old, and both she and Theranos quickly became the darlings of Silicon Valley. She gave massively popular TED talks and appeared on the covers of Forbes and Fortune.
By 2013, Theranos was valued at nearly $10 billion and even partnered with Walgreens to put their blood tests in stores around the country. The problem? Their technology never worked. It never came close to working. But Holmes was so good at selling her vision that she wasn’t stopped until after real patients were using the company’s “tests” to make decisions about their health. She and her former business partner are now facing potential jail time on fraud charges, and Theranos officially shut down in August.
The public didn’t know about Theranos’ deception until Carreyrou broke the story as a reporter at the Wall Street Journal. Because he was so integral to the company’s demise, Bad Blood offers a remarkable inside look.
Some of the details he shares are—for lack of a better word—insane. Holmes would invite prospective investors to the lab, so they could get their blood tested on a Theranos machine. The device had been programmed to show a really slow progress bar instead of an error message. When results didn’t come back right away, Holmes sent the investors home and promised to follow up with results.
As soon as they left, an employee would remove the blood sample from the device and transfer it to a commercial blood analyzer. Her investors got their blood tested by the same machines available in any lab in the country, and they had no idea.
There’s a lot Silicon Valley can learn from the Theranos mess. To start, a company needs relevant experts on its board of directors. The Theranos board had some heavy hitters—including several former Cabinet secretaries and senators—but for most of the company’s existence, none of them had any expertise in diagnostics. If they had, they might have noticed the red flags a lot sooner.
Health technology requires a different approach than other kinds of technology, because human lives are on the line. Carreyrou writes a lot about how Holmes idolized Steve Jobs and his unwillingness to compromise on his vision. That approach is okay for consumer electronics—if a new phone doesn’t work as promised, no one gets hurt—but it’s irresponsible for a health company. Holmes pushed a vision of what Theranos could be, not what it actually was, and people suffered as a result. “'Bad Blood' is a cautionary tale about the virtues of celebrity.”
Bad Blood is also a cautionary tale about the virtues of celebrity. On the surface, Holmes was everything Silicon Valley loves in a CEO: charismatic and convincing with a memorable personal story made for magazine profiles. There’s nothing wrong with that on its own. A rock star CEO can be a huge boon for a startup. But you can’t let fame become the most important thing.
Theranos is the worst-case scenario of what happens when a CEO prioritizes personal legacy above all else—but I hope that people don’t use it as an excuse to write off the next young woman with a big idea. I also don’t want Bad Blood to scare people away from next-gen diagnostics. Theranos went to extraordinary lengths to get around quality standards. The industry is highly regulated, and new diagnostics undergo rigorous testing.
Bad Blood tackles some serious ethical questions, but it is ultimately a thriller with a tragic ending. It’s a fun read full of bizarre details that will make you gasp out loud. The story almost feels too ridiculous to be real at points (no wonder Hollywood is already planning to turn it into a movie). I think it’s the perfect book to read by the fire this winter.