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

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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
Publisher: Knopf
Publication Date: May 2018

Contributor: Lachmi Khemlani runs a technology publication in the San Francisco Bay Area.

“Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone” by Satya Nadella

Hit Refresh

I typically do not read business books. However, the author of this book, Microsoft CEO Satya Nadella, recently appeared on a talk show that I watch, and I was intrigued. Not just by the premise of the book — when do you hear the word “soul” in the context of a technology company? — but by Nadella’s own story. I found out that his son has severe cerebral palsy, and this topic only came up because he was talking about the power of technology to do good, exemplified by some students from the local university who had rigged his son up with a device that allowed him to play music on his own. While that was a truly inspiring example of how technology can help, what I found even more inspiring is how he had achieved so much, risen to lead the leading technology company of the world, all while having a very challenging personal life. Usually when I read about highly successful people, I assume that they must have a charmed personal life which allows them to achieve the great things that they have achieved. But clearly, this was not the case with Satya Nadella.

They say that what doesn’t kill you makes you stronger, and having a child with special needs would, I think, certainly make you more empathetic, more generous, and overall, a nicer person. But I didn’t think it could actually make you capable of also rising all the way to the top as a business and technology leader, which is typically a highly competitive, cut-throat field. But, as it turns out, it can, as evidenced in Hit Refresh, in which Nadella describes how his personal experiences have shaped the way he leads Microsoft. It’s no longer just about being the market leader and increasing profit margins, but more about making a difference. It’s being able to steer Microsoft to use its vast engineering talents to continue developing devices and software that can improve the lives of millions of people around the world, using cloud connectivity, mobile access, data analytics and other technologies. It calls for cooperation with companies that were once bitter rivals, such as Apple, along with younger powerhouses such as Google. When the focus is more on doing good rather than on under-cutting rivals and being the “best,” even employees can feel imbued with a sense of purpose and meaning that makes their everyday work much more life-affirming.

For those curious about Nadella himself, Hit Refresh does provide a brief account of his background and journey from India to the US — a journey which will be familiar to many Indians who also came to the US to work in engineering and software — as well his many years working at Microsoft as he rose through the ranks before finally becoming CEO. The book also discusses upcoming technologies such as artificial intelligence, machine learning, mixed reality, and quantum computing, all of which seem promising to our continued improvements as a society and which Microsoft is exploring. Hit Refresh also has some discussion about politically sensitive issues such as privacy, security, and globalization, but not as much as I had hoped. It would have been very illuminating to know how a progressive technology company, which wants to have a global impact, can operate in a political climate that is protectionist and nationalistic, almost regressive?

While the subtitle of this book, The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone, is somewhat grandiose, it is a simple, non-pretentious, non-erudite, straight-from-the-heart account of how Satya Nadella — only the third CEO in Microsoft’s 42 year old history — has been inspired by his personal experiences to make empathy rather than competitiveness the essence of Microsoft, so it can contribute to making the world a better place for everyone.

Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone
Author: Satya Nadella
Publisher: HarperCollins Publishers
Publication Date: September 2017

Contributor: Lachmi Khemlani runs a technology publication in the San Francisco Bay Area.

“Retire Young, Retire Rich: How to Get Rich Quickly and Stay Rich Forever” by Robert T Kiyosaki with Sharon L Lechter

retire-young-retire-rich

I read ‘Rich Dad, Poor Dad’ several years ago and I was greatly impressed. It presented a wholly new perspective on the accumulation of wealth. So I had great expectations of Kiyosaki’s ‘How to Get Rich Quickly and Stay Rich Forever’. I was a little disappointed. What’s most annoying is that there are umpteen repetitions. After reading this one, I don’t feel inclined to read the other books in the series.

The author’s focus on financial literacy is probably the most important aspect of the book. It is also a matter that does bear repetition. Some home-truths really need to be repeated – only then do they sink in. Kiyosaki reminds us that, “Saving money is slow. You can become rich by saving money, but the price is time… your lifetime.” He adds that, “Many people today are not in the same professions as their parents…….but when it comes to money, investing, and retirement, they do exactly the same things. When it comes to money, many people are still swinging their parents’ axe.” How true!

I like the way the author explains the principle of leverage making it ever so simple: ‘Doing more with less’. The examples he gives are illuminating. “In the beginning, animals could run faster than humans, but today humans can travel faster and further than animals because they created tools of leverage, such as bicycles, cars, trucks, trains and planes. In the beginning, birds could fly and humans could not. Today, humans fly higher, further and faster than any bird.”

Kiyosaki points out that Bill Gates, Michael Dell, Ted Turner, Henry Ford and Thomas Edison did not finish school. I can’t help wondering what the world would have been like if Edison had concentrated on making money rather than on conducting his experiments. Of the Wright brothers Kiyosaki says, “They are prime examples of people who studied because they wanted to learn and not for grades; they worked hard for free without guarantees, took risks intelligently, and pushed themselves and the world into another reality.” Such examples are bound to inspire and motivate – and they certainly add spice to the core message of this book.

The author also points out some simple facts that every investor ought to know from the start. “Out of ten investments, the odds are two to three will be bad, two to three will be good, and everything in the middle just lies around like a lazy dog.”

Overall Assessment: This book could have been written in 100 pages instead of 550. Then it would have been another masterpiece.

Retire Young, Retire Rich: How to Get Rich Quickly and Stay Rich Forever!
Author: Robert T Kiyosaki with Sharon L Lechter
Publisher: Warner Books
Publication Date:: 2002

Contributor: Pushpa Kurup lives in Trivandrum, India and works in the IT sector.

“The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” by Thomas J. Stanley and William D. Danko

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It’s evident that extensive research has gone into the making of this masterpiece. Thomas J. Stanley studied wealthy individuals for decades before he co-authored this book along with William D. Danko. There are quite a few ‘get rich’ books on the market. This one is undoubtedly special.

The good news is that anyone with a decent job can accumulate a fortune over time. The bad news is that high income does not automatically translate into great wealth. What do the wealthy folks in America have in common? Have they merely inherited a fortune? Not so, say the authors. One thing they all have in common is frugality. We all know of Warren Buffet, but hey, there are dozens of others! And the rich are not who we think they are.

The authors state that affluent persons tend to answer ‘yes’ to three questions they were asked in routine surveys:

  1. Were your parents very frugal?
  2. Are you frugal?
  3. Is your spouse more frugal than you are?

“Most people will never become wealthy in one generation if they are married to people who are wasteful. A couple cannot accumulate wealth if one of its members is a hyper-consumer. This is especially true when one or both are trying to build a successful business. Few people can sustain profligate spending habits and simultaneously build wealth.” So high living is just not cool.

Tighten your belt folks! Take a deep breath. Do you really need that new Lamborghini?

You can also learn new ways of calculating what your net worth ought to be. “Multiply your age times your realized pre-tax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth is what your net worth should be.” Check it out. Do you pass the test? No? Then buy another copy of the book and give it to your spouse.

Overall assessment: Wanna become rich? Try this one!

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
AUTHORS: THOMAS J STANLEY & WILLIAM D DANKO
PUBLISHER: TAYLOR TRADE PUBLISHING
DATE OF PUBLICATION: 2010

Contributor: Pushpa Kurup lives in Trivandrum, India and works in the IT sector.

“The Hard Thing about Hard Things: Building a Business When There are No Easy Answers” by Ben Horowitz

The Hard Thing about Hard Things

This is a must-read book for entrepreneurs, especially those who have wandered the streets looking for venture capital, struggling to manage all aspects of a company while barely being able to make ends meet. The book talks about hiring, management cultures, and styles, lay-offs, selling the company, partnerships, and every possible aspect involving startups.

Most entrepreneurs, especially those who have struggled, should be able to relate to every line in this book. It is very much a “guy’s book written for guys.” The direct in-your-face style makes this book hilarious in parts.

This is the only book that I have ever purchased thrice – first on my Kindle and two hard copies – the second hard copy was intended as a gift for a friend/entrepreneur.

The author, Ben Horowitz, founded Opsware and is now a leading investor based in Silicon Valley.

The Hard Thing about Hard Thing: Building a Business When There are No Easy Answers
Author: Ben Horowitz
Publisher: Harper Business
Publication Date: March 2014

Contributor: Pran Kurup is an author and entrepreneur based in the San Francisco Bay Area.

“The Everything Store: Jeff Bezos and the Age of Amazon” by Brad Stone

The Everything Store

This is an excellent book for anyone interested in learning more about Amazon and its evolution. It is meticulously researched and gives you a good inside view of Amazon’s culture, Jeff Bezos style – his frugality and ruthlessness.

It is mind-boggling to imagine that a former investment banker (a non-techie) could have built a company with such cutting-edge products and services. It is an excellent book that captures the entrepreneurial spirit and business strategy vis-a-vis Amazon’s success story.

I read this book quite a while back but it remains very much in my memory because it is one of the better business books published in recent times. Hats off to the author, Brad Stone for this outstandoing book.

The Everything Store: Jeff Bezos and the Age of Amazon
Author: Brad Stone
Publisher: Little, Brown and Company
Publication Date: October 2013

Contributor: Pran Kurup is an author and entrepreneur based in the San Francisco Bay Area.