I remember listening to a Commonwealth Club radio program a few years ago in which Salman Khan of Khan Academy was interviewing Elizabeth Holmes of Theranos. (It was technically a “conversation,” but from what I remember, it was Salman Khan asking most of the questions.) By this time, Khan Academy was a universal name, but Elizabeth Holmes was a promising young entrepreneur in the mold of Steve Jobs. Her startup, Theranos, was poised to revolutionize the healthcare industry by making blood testing very quick and affordable. Anyone could go into a wellness center, get a small draw of their blood by simply pricking their finger, and get their results back within a few minutes.
It seemed almost too good to be true! But the confidence with which Holmes spoke, her sincerity, and her passion won everyone over. I remember being totally awed by what I heard. She described how she had waited for hours outside the office of a Stanford professor to beg him to be allowed to do research in his lab, and had eventually dropped out of Stanford to start Theranos. She could not believe at how inefficient blood testing was, how you had to draw so much blood for a test, and how it took days to get the results back. She wanted to make this process much faster, more efficient, and less painful, and seemed to have found a way to do so. Who were we to question this? After all, this is what innovators do—they are geniuses in their fields and come up with breakthrough solutions to problems. So many of our best innovations have come from revolutionary thinkers, and Holmes certainly seemed to be one of them. She had the conviction that Theranos was going to change the world.
Or so we thought. Not just we, but everyone. Theranos was heralded as the next success story in Silicon Valley where it was based. Millions of dollars of investment poured in from the leading VC (venture capital) firms in the valley—no one wanted to miss out on the potential of investing early in a startup that guaranteed to succeed in a big way. Not only was the idea so brilliant, but the company had a “dream team” of highly respected advisors, including the Stanford professor Holmes had worked with, as well as partnerships with companies like Walgreens and Safeway to establish “wellness centers” in their stores equipped with Theranos technology for customers to come in and quickly get blood tests done. It had also attracted the attention of leading drug companies like Pfizer who saw the technology as a way to potentially reduce their costs and bring drugs to market sooner.
As it turns out, it was indeed too good to be true. The technology did not really work, and thanks to a string of whistleblowers, many of whom had worked for the company, Theranos was exposed as a fraud and has been forced to close, with Holmes and her business partner facing several lawsuits. Most of the credit for uncovering the truth goes to John Carreyrou, an investigative reporter from the Wall Street Journal who doggedly pursued the story after being contacted by a credible lead in late 2015 who raised doubts about it. He has documented this story in Bad Blood, chronicling the rise and fall of Theranos. Based on interviews with former employees and many others who had been associated with the company in various ways, Bad Blood is essential reading for anyone interested in how such a massive fraud could have been perpetrated and strikes a cautionary note for aspiring entrepreneurs hoping to make it big. While a technology startup can be a hit or a miss, and those who fail can just move on to other things, the stakes are much higher in a field such as healthcare where lives are at stake. It is to Carreyrou’s credit that he realized the enormous implications of the possibility that Theranos’s blood-testing technology did not work properly and continued to investigate it until the truth emerged. From that respect, he deserves all the awards and accolades he can get for almost single-handedly exposing a fraud that could have had life-threatening consequences if it was not uncovered.
At the same time, from a literary point of view, the book itself lacks merit. To start with, it is written like a book of fiction with a plot, characters, and events, rather than the non-fiction book it is. The trouble with this is that Carreyrou does not have the talent to write fiction — his writing is very trite and uninspiring, with a plodding narrative, unnecessary descriptions of people, and pedestrian language. It was very hard to read through it. Also, there were so many characters throughout the book, that I had to keep turning back the pages to see who they were and in what context they had first been mentioned. It seems that every person who was interviewed makes an appearance in the book. And of course, there are many more. Did I really need to know what this person or that person looks like, where they met for coffee, where they live, where the office party was, and so on? Was that really meaningful to how the Theranos saga unfolded? It seems to me that Carreyrou wanted to make this a full-length book rather than an article, so he had to put in a lot of detail to fill the pages, most of which is not even interesting.
Over and above that, the book seemed really one-sided. I appreciate that Holmes and her partner, an Indian man called Sunny Balwani, committed serious fraud by not disclosing the truth about the problems with the technology, but don’t they have a single good quality? Going by Bad Blood, it would seem not. Holmes is always scowling and Balwani is always supercilious. And of course, both are extremely paranoid and blatantly lie to investors and potential partners. Holmes at least has some charm that she can “deviously” turn on when she needs to, with her “piercing blue eyes” that can hold the intended target in thrall. Balwani does not even have that — he is not good-looking and is always “barking” orders. The same bias extends to the other characters as well. All those against Holmes are portrayed in a good light — they are smart, have integrity, and have doubts about the technology — while those who are on her side are portrayed in a negative light — they are unquestioning “yes men” who are always sucking up to her.
It is obvious that the book was based on interviews solely of people who hated Holmes and Balwani. It does not ask why they stayed in Theranos for so long. Like it or not, they were all complicit in the fraud. What about the long string of people who were fired when they disagreed with Holmes, some quite early on when the company was started (in 2003)? How come they didn’t tell anyone about this? Were they only saving their own skins? That doesn’t seem like an ethical thing to do.
Also, what about leading Silicon Valley figures like Tom Draper and Larry Ellison who were early investors in Theranos? Were all these exceedingly smart people also taken in, and having done so, how did they go along with the company for so long without, as the saying goes, “smelling a rat”? What about Holmes’ professor from Stanford, a highly respected academic? And going back to that interview of Holmes with Salman Khan of Khan Academy that I had heard, was he also gullible as well? Given his focus on volunteer work rather than on the typical “money and fame” success factors that most entrepreneurs crave, would he not be able to tell if someone was sincere or just faking it?
Bad Blood does not shed light of any of these conundrums. While I have the greatest admiration for the author for his breakthrough reporting on the Theranos fraud, the inability to provide a nuanced portrayal of Elizabeth Holmes and explain how so many smart people got hoodwinked for so long made me question his version of events and the veracity of the interviews he has conducted. By branding Holmes as someone who was out just to make money and achieve glory by any means necessary, he has failed to acknowledge that human beings are fallible — someone can start out with a very sincere desire to improve on something and continue to pursue it even when it is not working in the hope that it will eventually work. The story of Theranos is appalling and serves as a crucial wake-up call, but by categorically painting Holmes as evil rather than someone who could have just been badly misguided, Bad Blood was way too one-sided to be at all insightful.
Bad Blood: Secrets and Lies in a Silicon Valley Startup
Author: John Carreyrou
Publication Date: May 2018
Contributor: Lachmi Khemlani runs a technology publication in the San Francisco Bay Area.