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addabook - Bad Blood
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Bad Blood
Secrets and Lies in a Silicon Valley Startup
John Carreyrou
read on November 3, 2019

A very interesting narrative about the brief history of Theranos. The book isn't short, but was a super-fast read. I know that I saw several headlines about this when the whole thing unraveled in early 2018, but overall I was a bit struck by how little the whole event had fallen on my radar. I had never heard of Theranos before its undoing, and even then, maybe only at the highest level.

Anyway, a few points:

  • The book is quite harsh on Elizabeth Holmes (who did not cooperate/participate with it), and paints her to essentially be an entitled sociopath (psychopath?). She lies effortlessly. Carreyrou paints it in a selfish light, that she was chasing money, fame, power, etc - but it's not clear that she is willfully committing fraud. That is, I think there is some light there where she truly does believe that she's going to change the world for the better, and if she needs to crack a few eggs to do so then so be it.
  • Holmes obsession with becoming a successful startup CEO is just weird. The way she emulates Jobs is unnerving. Carreyrou speculates in the book that she purposefully spoke in a lower, "less feminine" voice in order to be taken more seriously. I mean, to give her credit, she was singularly focused on achieving success and willing to do whatever it took.
  • Theranos was just never a real company. At no point in its history could it do what it said it was doing. It was just a massive fraud from top to bottom, kept together by Holmes' total control of the organization and unwillingness to let anyone see too many moving parts at once.
  • Theranos' BOD was stacked. Henry Kissinger, George Shultz, Jim Mattis. Holmes had incredible connections (Clintons and Obamas as well). Yet no one had done any diligence at all on the company.
  • Especially after just finishing Catch and Kill, this book makes you appreciate whistleblowers and investigative journalism all the more. Theranos pulled no punches in trying to intimidate and punish anyone who dared be critical of them or leak to the press. They had crazy NDAs, and would sue the shit out of anyone that glanced sideways. I'm sure the company would have unwound eventually, but they tried like hell to stop it and it took incredible courage for the whistleblowers to come forward.
  • Lastly, the completely unexpected silver lining here was a story about Rupert Murdoch, of all people. Murdoch had a $125M investment in Theranos, which was reportedly the largest non-media investment of his life. Murdoch owns the Wall Street Journal, where Carreyrou worked and broke the story that Theranos was a fraud. Prior to publication Holmes reached out to him and asked him to kill the story, but he refused to intervene. His position was that he trusted his editors and that if there was no "there" there, then they both had nothing to worry about. In retrospect (knowing that that Theranos was a giant scam) this doesn't seem that impressive. But a priori, Theranos was a $10B tech darling with two former Secretaries of State on the board, all vehemently denying any wrongdoing. And Murdoch had $125M on the line. In stark contrast to NBC leadership in Catch and Kill, it was fantastic to see him step aside and let the cards fall. He ended up taking a total loss on his investment.

Author Bio:

John Carreyrou is a two-time Pulitzer Prize–winning investigative reporter at the Wall Street Journal. For his extensive coverage of Theranos, Carreyrou was awarded the George Polk Award for Financial Reporting, the Gerald Loeb Award for Distinguished Business and Financial Journalism in the category of beat reporting, and the Barlett & Steele Silver Award for Investigative Business Journalism. Bad Blood was named the Financial Times McKinsey Business Book of the Year. Carreyrou lives in Brooklyn, New York, with his wife and three children.