I wasn’t aware of Theranos, the blood testing startup which imploded spectacularly in 2018 from one of the USA’s most-hyped new tech companies to bankruptcy and federal investigation, until Elizabeth Holmes, architect of the whole thing, was actually charged with fraud. The Pajiba commentariat pointed me in the direction of 2018’s Bad Blood (since I’m not a fan of podcasts), and it was well worth the read.
Carreyrou, an investigative reporter with the Wall Street Journal, first got interested in the story long after Holmes had the idea of testing for all sorts of medical conditions using micro-samples of blood, and started her company, Theranos (a conflation of ‘therapy’ and ‘diagnostic’ for those of us who thought it sounded more like a comic book villain) to research and make the equipment to do so. So he starts the book at the startup, from the first rumblings of discontent and difficulty, rather than from his involvement – by which time, the wheels were very obviously starting to come off.
As Carreyrou tells it, it’s amazing Theranos managed to last as long as it did, given the extreme compartmentalisation in which the staff were working, the astonishingly high turnover of staff, and the sheer implausibility of the thing they were trying to make. It’s even more astonishing that so many people were willing to buy into Theranos’ claims (literally, with vast amounts of venture capital which made Holmes a billionaire at one point), and weren’t scared off by the lack of scrutiny they were allowed to have over the process and product. While individual people had their doubts, and expressed them, the swingeing confidentiality agreements they were all required, in some cases forced, to sign meant that none of these red flags were spotted, and Holmes’ seemingly amazing charm of manner and ability to persuade – mostly male – investors that she had a viable product which was being used already, and successfully, when in fact hardly any of the machines worked or were accurate.
There are first-hand accounts from people involved in Theranos (though not from Holmes herself or Sunny Balwani, both eventually charged with fraud) from the start to the end, including Tyler Shultz, who tried to whistleblow and found his relationship with his own grandfather, who’d invested largely in the company, shatter when George Shultz preferred to believe the lies told him by Holmes than the truth by his own family. It’s tempting to speculate why investors flocked to buy shares and continued to back Holmes’ vision in defiance of truth and science; Holmes managed to get a lot of initial funding through personal and family contacts, and once those were on board, others followed, preferring to believe their gut instinct and Holmes’ inflated financial predictions over what was real or possible.
Carreyrou’s reporting is lucid and compelling, making the saga more like a novel than real life, although the book’s not been updated following the trial. In a way, that we only see Holmes from the impressions she left on others, lets us understand how charismatic she was, and how people often leave their critical thinking skills outside when they believe in something wholeheartedly. In fact, Theranos almost sounds like a cult, with Holmes as its chief prophet.