Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou

I took the advice of one of my patients and read this fascinating book which details the background of a promising Silicon Valley startup, Theranos. When I first heard of the company in the glowing Wall Street Journal article, Elizabeth Holmes: A Breakthrough Instant Diagnosis dated September 8, 2013, I was wondering why another company had not developed this idea. It turns out there were many good reasons why. The premise behind the company’s $9 billion dollar valuation was that they were manufacturing a machine that could run hundreds of tests on a small drop of blood. Currently laboratories have to draw a few vacutainers (generally 3-5 ml) worth of blood to run routine blood tests. A rule of thumb is one container for 8 tests. Holmes claimed she and her employees had developed a new machine which could take a few drops of blood from a finger and run hundreds of tests on it.

This book delves into Holmes’ background as a smart, enterprising student who grew up in Washington DC and Houston, Texas and details her force of personality that propelled her to drop out of Stanford at age 19 to start her company. It also explores her complicated relationship with family friend, Dr. Richard Fuisz, a Washington DC based physician and inventor, and a patent that he filed with the U.S. Patent and Trademark office. The patent he filed would cover a device that would automatically alert a doctor of an abnormal value on a home-based lab machine. Since Holmes’ vision was for a machine she dubbed the minilab to be owned by every American home much like the ubiquitous iPhone, her company would have to deal with the Fuisz patent on every machine. This situation led her to launch a strongly litigated lawsuit against Fuisz. This sequence of events eventually led to her downfall as Fuisz alerted a blogger who understood laboratory abuse issues who revealed many of Theranos’ machine issues to the Wall Street Journal reporter, Carreyrou, who eventually wrote this article Hot Start-Up Theranos Has Struggled With Its Blood Test Technology chronicling many of Theranos’ problems. 

That article started a series of many for which Carreyrou eventually won George Polk, Gerald Steele and Barlett and Steele awards. Those articles formed the background to this riveting book. The stories behind the dysfunctional corporate culture of Theranos, Elizabeth’s odd and controlling boyfriend, Sunny Balwani, and coverup of the real capabilities of their lab machines seem so far-fetched that it is hard to believe the events actually occurred. However the old adage “truth is stranger than fiction” definitely applies in this case. I was favorably disposed to David Boies, the prominent lawyer that represented the government in its case against Microsoft, after reading about his dyslexia in Malcolm Gladwell’s book David and Goliath: Underdogs, Misfits and the Art of Battling Giants reviewed in a previous Lady Docs blog.

My favorable disposition left quickly after reading accounts in this book. His representation of defending Theranos, both to Dr. Fuisz and sons, as well tactics against the Wall Street Journal to stop publication of the 2015 article, were shocking and abusive. The many firings of employees and misrepresentation of their laboratory equipment capabilities to their investors as well as to Walgreen’s and Safeway, their corporate partners, reads like a made-up soap opera. The company actually ran almost a million blood tests of questionable accuracy on patients in the Phoenix area out of the Walgreen’s stores. Reading all of this makes one wonder about the underlying sanity and morality of Elizabeth Holmes. The book might be a warning to all who might consider investment in a startup run by a charismatic entrepreneur. The back cover of the book sums it up well with a quote from Bethany McLean: “You will not want to put this riveting, masterfully reported book down. No matter how bad you think the Theranos story was, you’ll learn that the reality was actually far worse.”