Bad Blood
Secrets and Lies in A Silicon Valley Startup
Book - 2018
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Add a QuoteElizabeth had hung inspirational quotes in little frames around the old Facebook building. One of them was from Michael Jordan: “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
Another was from Theodore Roosevelt: “Far and away the best prize that life has to offer is the chance to work hard at work worth doing.” Patrick suggested they make them a more integral part of the workplace by painting them in black on the building’s white walls. Elizabeth liked the idea.
She also loved a new quote he suggested. It was from Yoda in Star Wars: “Do or do not. There is no try.”
The media mogul sold his stock back to Theranos for one dollar so he could claim a big tax write-off on his other earnings. With a fortune estimated at $12 billion, Murdoch could afford to lose more than $100 million on a bad investment.
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“VAPORWARE” was coined in the early 1980s to describe new computer software or hardware that was announced with great fanfare only to take years to materialize, if it did at all. It was a reflection of the computer industry’s tendency to play it fast and loose when it came to marketing. Microsoft, Apple, and Oracle were all accused of engaging in the practice at one point or another. Such overpromising became a defining feature of Silicon Valley. The harm done to consumers was minor, measured in frustration and deflated expectations. By positioning Theranos as a tech company in the heart of the Valley, Holmes channeled this fake-it-until-you-make-it culture, and she went to extreme lengths to hide the fakery.
The odd couple:
It isn’t clear exactly when Elizabeth (Elizabeth Anne Holmes born 1984) and Sunny (Ramesh “Sunny” Balwani born 1966) became romantically involved, but it appears to have been not long after she dropped out of Stanford. When they’d first met in China in the summer of 2002, Sunny was married to a Japanese artist named Keiko Fujimoto and living in San Francisco. By October 2004, he was listed as “a single man” on the deed to a condominium he purchased on Channing Avenue in Palo Alto. Other public records show Elizabeth moved into that apartment in July 2005.
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FoMO—the fear of missing out.
From Epilogue:
March 14, 2018, the Securities and Exchange Commission charged Theranos, Holmes, and Balwani with conducting “an elaborate, years-long fraud.” To resolve the agency’s civil charges, Holmes was forced to relinquish her voting control over the company, give back a big chunk of her stock, and pay a $500,000 penalty. She also agreed to be barred from being an officer or director in a public company for ten years. Unable to reach a settlement with Balwani, the SEC sued him in federal court in California. In the meantime, the criminal investigation continued to gather steam. As of this writing, criminal indictments of both Holmes and Balwani on charges of lying to investors and federal officials seem a distinct possibility.
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Add a CommentI had heard of Theranos and Elizabeth Holmes at the time. I had thought the WSJ was picking on, and trying to take down Theranos. I had no idea there was fraud to this extent. And what a house of horrors to work in. Sunny Balwani sounds like a monster and Elizabeth Holmes a convincing conwoman. I am not sure if she was naïve about her product, or just doing an outright con. Great, but maddening reading.
NYT Notable Books of 2018
This book is about the tragedy of Theranos and the founder of Theranos - Elizabeth Holmes. Theranos was a company primarily founded on the idea developing technology to perform a wide range of blood tests from one drop of blood taken from a finger stick rather than the conventional blood draw venously. Eventually, the company also has ambitions to become a lab service company analyzing blood draws using its own and other commercially available instruments. Although the vision was very attractive and the founder, Elizabeth Holmes, was very attractive, it was not achievable by current technology or perhaps not ever. Therein lies the conflict. The company seems to have rooted out all employees that questioned whether the vision was attainable. The company also enlisted a board of directors that had no independent basis to assess the company's technology, products, and services. This made for disastrous outcome for customers, investors, and employees. Even those employees that quit, such as Tyler Schultz, was hounded by the aggressive legal tactics of David Boies to the tune of at least $400,000. The last part of the book is the story of the story which goes to illustrate the aggressive legal tactics of Theranos and its lawyers. After one reads the book, it is worthwhile to view the various presentations given by Elizabeth Holmes available on UTube. In hindsight it is amazing the mendacity of the CEO. Without the book, it is easy to see how non-experts in the field could be taken in by the vision, the confidence, and presentation by Elizabeth Holmes. I predict that at some point in the future, we will be seeing Elizabeth Holmes again. I wish that the author would have spent some more time on the technical barriers that make this vision not practical.
Amazon.com Customer reviews
4.8 out of 5 stars 1,402 reviews
5 stars “Impossibly too good to be true.”
How did a 20 something dropout woman manage to bs her way for a decade (!), impressing not only Secretaries of State and Defense - George Shultz, Kissinger, one of the countries top lawyers Boies and a distinguished professor of chemistry at Stanford for 10 full years!
Elizabeth Holmes and her crooked boyfriend never answered the technical questions and fired anyone who disagreed with their dishonesty - how in the world did it take so long to get out?
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5 stars “Fascinating, horrifying, richly detailed account of corporate ambition gone awry.”
Couldn’t put this book down. A horrifying true story of a driven entrepreneur whose only overriding goal was to become insanely rich. And she would do anything, any unimaginable thing, to get there.
Elizabeth Holmes leveraged her family's high profile connections to draw in early investors and supporters, who weren’t very inquisitive on details, nor skeptical in nature. Drawing on the good name and reputation of these early supporters, she was able to build an impressive roster of other supporters with stellar reputations in tech and venture capital circles. Then it was just a matter of stage managing the house of cards she was building.
Her product demonstrations were outright theater, staged managed illusions worthy of David Copperfield. Theranos employees in on the ruse were assured it was just temporary, until the actual product could be perfected and the results repeatable. That day would never come. Their suspicions, proven to be correct, was that it was too good to be true.
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5 stars “Would give this 10 stars"
This is a real life thriller, the story of someone who is a true diabolical movie villain. Holmes is portrayed vividly as a paranoid sociopath who could also be disarming, charmingly manipulative, utterly ruthless and devoid of conscience. This is a tale of corporate greed and lack of regulatory oversight gone all awry.
Without a trace of guilt or regret, she induced powerful tech workers to leave lucrative careers at other major tech firms, giving up millions in stock options, to come work for Theranos, knowing the whole thing would collapse one day. When skeptical board members asked to see data affirming the effectiveness of their product, Holmes would defer, saying those papers were in perpetual legal review. Some employees, when they were no longer useful to her, or deemed disloyal, were immediately and unceremoniously marched out.
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5 stars “A company so corrupt it bordered on evil.”
Remember the John Grisham book "the Firm"? Exciting and suspenseful stuff, right? But couldn't really happen, could it? Well here's the real thing: Theranos. A company so corrupt it bordered on evil. Hundreds of well-meaning employees kept in check by
1. a steady diet of a charismatic leader's lies and propaganda
2. tremendous restrictions on communication within the firm
3. threats that employees would be bankrupted personally by vicious lawyers if they ever stepped out of line.
A gripping and cautionary tale about the danger of the mix of charisma and lies. I couldn't put it down.
September Bookclub Book
This book is about greed and lies. Guess what, it's nonfiction.
In 2003 19 year old Elizabeth Holmes dropped out of Stanford and founded Theranos - a Silicon Valley start-up set to revolutionize blood testing and healthcare. Her mission was noble - to make blood testing less invasive and so accessible that we can do it at home. Her actions, however were far from noble as the company failed to produce a device that worked and Holmes began to pile on lie after lie to hide her failing. Wall Street Journal investigative reporter John Carreyrou broke the story in 2015. Bad Blood complies his research and sources' testimonies that expose Theranos for the scamming farce it was - a $10B farce that didn't just scam people out of their money, but knowingly delivered erroneous lab results directly impacting people's healthcare treatments.
The story is compelling. The whole time you can't believe your eyes/ears. You'll find little redeeming in this book other than knowing that the scam has been shut down thanks to those who came forward and Carreyrou's skilled reporting.
Soon to be a movie, starring Jennifer Lawrence as Elizabeth. It's too bad Verdi is long dead. He seems like the person who could do this story justice.
...”fake-it-until-you-make-it” epitomized Silicon Valley’s culture. A psychopathic genius deceived many established prominent figures who were supposed to be brilliant. To dig deeper into the cause is beyond the scope here.
Timely, superb, hard work of the author. In such a fast thrill ride (with rage), I caught up with what I’d missed in recent years. To ones who read news articles, it’s also worth reading.
I love investigative nonfiction and this was a thorough piece of work. I applaud Mr Carreycou and others like him who get a bone and never let it go. I'm floored by all of the intelligent, wealthy people who were duped and spent millions on an idea that never really came into fruition. It's just another example of how our capitalist, money-loving society will believe anything if they can make a dollar. It's worth the read because those who don't know their history are doomed to repeat it. Hopefully, this will help the next generation of scammers think again before risking people's lives, finances and freedom.
Unbelieavable tale. Skillfully written to give clarity to the deeds and descriptions that bring you to the company to silently watch in horror.