Bad Blood: Secrets and Lies in a Silicon Valley Startup

by John Carreyrou

The odds that Holmes could pull off this latest Houdini act while under criminal investigation were very long, but watching her confidently walk the audience through her sleek slide show helped crystallize for me how she’d gotten this far: she was an amazing saleswoman. She never once stumbled or lost her train of thought. She wielded both engineering and laboratory lingo effortlessly and she showed seemingly heartfelt emotion when she spoke of sparing babies in the NICU from blood transfusions. Like her idol Steve Jobs, she emitted a reality distortion field that forced people to momentarily suspend disbelief.

One thing is certain: the chances that people would have died from missed diagnoses or wrong medical treatments would have risen exponentially if the company had expanded its blood-testing services to Walgreens’s 8,134 other U.S. stores as it was on the cusp of doing when Pathology Blawg’s Adam Clapper reached out to me.

Many companies in Silicon Valley make their employees sign nondisclosure agreements, but at Theranos the obsession with secrecy reached a whole different level.

Holmes knew exactly what she was doing and she was firmly in control. When one former employee interviewed for a job at Theranos in the summer of 2011, he asked Holmes about the role of the company’s board. She took offense at the question. “The board is just a placeholder,” he recalls her saying. “I make all the decisions here.”

In December 2013, she forced through a resolution that assigned one hundred votes to every share she owned, giving her 99.7 percent of the voting rights. From that point on, the Theranos board couldn’t even reach a quorum without Holmes. When he was later questioned about board deliberations in a deposition, George Shultz said, “We never took any votes at Theranos. It was pointless. Elizabeth was going to decide whatever she decided.” This helps explain why the board never hired a law firm to conduct an independent investigation of what happened. At a publicly traded company, such an investigation would have been commissioned within days or weeks of the first media revelations. But at Theranos, nothing could be decided or done without Holmes’s assent.

A sociopath is often described as someone with little or no conscience. I’ll leave it to the psychologists to decide whether Holmes fits the clinical profile, but there’s no question that her moral compass was badly askew.

she didn’t initially set out to defraud investors and put patients in harm’s way when she dropped out of Stanford fifteen years ago. By all accounts, she had a vision that she genuinely believed in and threw herself into realizing. But in her all-consuming quest to be the second coming of Steve Jobs amid the gold rush of the “unicorn” boom, there came a point when she stopped listening to sound advice and began to cut corners. Her ambition was voracious and it brooked no interference. If there was collateral damage on her way to riches and fame, so be it.

Driscoll