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Bad Blood

By John Carreyrou, A thrilling and sensational story of ambition, corporate fraud and deceit

Brief Summary
Detailed (Chapter) Summary
Read it or Skip It?

Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou tells the story of Theranos, a biotech startup that had a staggering rise to a close to $10 billion valuation and an even more dramatic fall.

The very short version of this review: I was really impressed by this book.

Being in the Bay Area, I’ve heard so much about this, but figured it was mostly hype. When it finally popped up on Bill Gates’s list of Best Books of 2018 a few days ago, I decided to take the plunge.

Theranos Website Screenshot

Book Summary

For the Detailed Chapter-By-Chapter Summary, click here or scroll all the way down.

Bad Blood covers the fall of Theranos, a startup that was founded by Stanford drop-out Elizabeth Holmes when she was nineteen. It claimed to offer faster, cheaper blood tests from just a pinprick of blood (see their demonstration on YouTube), as opposed to traditional methods which require needles, lab equipment and technicians.

Over the course of a decade, it ballooned to a valuation of almost $10 billion, but within a few short years was defunct once it became clear their technology was not what they claimed. It’s a saga that ensnared a range of tech, legal, political and other industry leaders such as Henry Kissinger, Rupert Murdoch, and our current Secretary of Defense John Mattis.

While a number of articles have profiled the big issues — they were lying, duh — Bad Blood does a deep dive into the company’s culture and the thousand small decisions that preceded Theranos’ downfall. In also covers the war Theranos waged as the walls slowly started closing in on their fraud. Both Elizabeth and the company’s COO are currently facing serious jail time for wire fraud.

The book’s author, John Carreyrou, is the Wall Street Journal journalist who first started reporting on possible malfeasance at Theranos. He first reported in October 2015 that Theranos was secretly using traditional blood testing machines to test blood instead of their own technology.

I think Bill Gates’s description (which sold me on this book) sums it up nicely: “The story is even crazier than I expected, and I found myself unable to put it down once I started. This book has everything: elaborate scams, corporate intrigue, magazine cover stories, ruined family relationships, and the demise of a company once valued at nearly $10 billion.”

Theranos Walgreens Launch

Theranos Walgreens Launch Ad

Book Review

Bad Blood was one of the quickest reads I’ve had in a while. It’s so tantalizingly full of lies and terrible decisions and secrets that it hooks you in for the same reasons you can’t help slowing down just a little when driving past the scene of an accident.

The book paints a compelling image of a girl driven by stories of her family’s past greatness and current state of embarrassment, leveraging both powerful family and personal connections to support her grandiose vision.

Lies and secrecy are used to compensate for the unfulfilled promise of the technology itself. And in the company, those who raise concerns are fired while sycophants are promoted — all of which sets up Theranos for its eventual downfall.

Some of my interest was due having familiarity with many aspects of the book (I previously lived in the city the company was based in, visited the same hangouts, I’m all too familiar with startup pitfalls and founders who think they’re the next Steve Jobs, and I worked for the firm that served as their outside corporate counsel) as a Bay Area tech person. But, I’m pretty sure the drama seeping out from these pages is lurid enough to capture most people’s attention even without all that.

Carryrou has done a commendable job of making the book immensely accessible and readible, helped along by the subject matter itself. It’s a nutty story, even for Silicon Valley standards, mostly because of how out of control things got.

While erratic founders, lack of management skills and startups lying to investors and employees is not remotely notable, Theranos’s scale and subject matter — risking people’s ability to make smart health decisions — took things to another level. Any time you throw billion dollar valuations and cancer patients into the mix, it all gets worse.

And then, by the time the book reaches the point where Carreyrou’s begins his investigation, things have gone totally off the rails, with numerous people risking a lot to help expose the company, private investigators getting called in and armies of lawyers on the march as Theranos was clearly ready to fight to the death.

I was enthralled pretty much throughout the whole book, and I was really impressed by how Carreyrou really took the time to understand the technology, the tech industry, the legal issues and everything else related to the topic. The book wasn’t just interesting, it felt very credible. As someone who routinely whines about the quality of tech and legal reporting, I’m not an easy customer in this department.

Theranos Founder Elizabeth Holmes

Some Small Caveats

That all said, while I clearly enjoyed the book, a quick caveat about Bad Blood I’d point out is that the book is fairly limited in scope — this is one company’s dirty, dirty laundry being aired out. It’s a takedown of two awful people and their massive egos. The schadenfreude in this one runs deep.

I also think the book goes way too easy on the other enablers, decision-makers and people who are supposed to be leaders around them. Theranos attracted top talent (and therefore big dollars) partially due to the deep industry connections and people with deep experience that it was associated with, including a few industry luminaries. The idea that this girl and her boyfriend ran circles around all of these powerless lambs struck me as trying too hard to mold one specific narrative.

Carreyrou routinely dismisses bad behavior from others at Theranos as stemming from “pressure from Elizabeth” or plain ignorance. He also notes often the many, many times people “disapproved” of various unethical practices, but seems to give them a free pass. I get that they’re not really the subject of this book, but ultimately all these people were complicit. Disapproving internally but then doing nothing about it is not good enough.

A Minor Quibble for Music/Science Lovers

Finally, as a very, very minor quibble, it bothered me when he described her natural voice as being “several octaves” above her affected speaking voice (she thinks speaking with a low voice helps her to be taken seriously or something), and that this phrase has been echoed in articles all over because of it. An octave is not some vague indicator of some type of difference in pitch – it is a specific, measurable distance and frequency away from another note. (For you science nerds, the ratio of the frequency of two notes that are one octave apart is 2:1, with the higher note having the higher frequency.)

“Several octaves” is a lot, since most people’s entire vocal range (i.e. the highest and lowest note you can reach) probably spans around two octaves unless you’ve had vocal training — Beyonce likely has a 4-octave vocal range, for example (if judged by her music). Unless Holmes has the voice of a very small chipmunk, I doubt she speaks “several octaves” higher than her affected voice.

Read It or Skip It?

I was entranced by all the drama. Judge me all you want. It’s essentially a thrilling, sensational, schadenfreude-y tale that’s quite frankly fascinating to read. (My apologies to my dog who had to keep begging me to take her to the park instead of reading.)

From the difficulties of designing the blood tests, to the many legal issues involves in various aspects of the story, I was impressed by the level of detail and how accessible Carreyrou made all of that information. It’s excellent in-depth reporting by a highly capable writer. (Plus as a blogger, I loved that Carreyrou acknowledged he was tipped off on the story by a blogger who he’d spoken to in the past.)

It is, of course, drama of the business variety, so you’ll have to decide if that interests you.

Predictably, a movie based on Bad Blood is currently in development with Jennifer Lawrence slated to play the villianous, bleached-blond, steely-eyed disgraced founder.

Is Bad Blood something you think you’d read? Please share your thoughts below if you’ve read it! See Bad Blood on Amazon.

(P.S. I’ve started making notes in Goodreads when I post a review, so feel free to follow along!)

Detailed Book Summary (Spoilers)

This is a chapter-by-chapter summary of Bad Blood. For those short on time, each section begins with bolded text that summarizes that section.


This section introduces the basics about the company and technology. It's a blood analyser that works with small amounts of blood, requiring no needles. It also notes the high-profile names surrounding it. It also flags the basic issue that the technology did not work and that Elizabeth misrepresented that it did work. She fired employees who didn't want to go along with that fiction.

The book opens on November 17, 2006 when Theranos, a blood testing company started by Stanford dropout Elizabeth Holmes, is three years old. Their technology is touted for being able to run blood tests on a personal device without a needle and without a full lab. Instead, you prick your finger and deposit a small around of blood in a tiny vial (nanotainer) that's placed in a cartridge. The cartridge goes into a toaster-sized box for analysis.

There is a stellar management team and board members surrounding Holmes’s venture. The board members include Chairman Donald L. Lucas (he was a mentor to Oracle’s Larry Ellison) and Channing Robertson (associate dean of Stanford’s School of Engineering). Plus the management included a number of people with decades of experience at large tech companies, a rarity for a startup.

However, there are also some red flags. Elizabeth comes back from a meeting feeling enthusiastic, but other employees seem downcast. Everyone seems unclear on whether or not the technology actually works. The CFO discovers that at the meeting, Elizabeth demo’ed fake blood test results which he had always assumed was real. He brings up his concerns and is fired.

1. A Purposeful Life (Elizabeth’s Background)

This section is about Elizabeth's background, including her very accomplished ancestors in both business and medicine which helped to give her credibility. In contrast to before, her family's fortune is now squandered, and Holmes is reminded of it by her father. Additionally, family connections and contacts from Stanford meant that her initial backing and advisors were pedigreed. It help to draw in other high-profile backers and supporters. We also see how after raising $6M, she realizes her initial idea, a patch, was total science fiction.

Elizabeth is raised to be ambitious and purposeful. On her father’s side, she’s descendant from a very successful entrepreneur (Charles Fleishmann) as well as a doctor who founded a hospital and University of Cincinnati’s Medical School. Her mother’s side traces back to one of Napoleon’s top generals. At the same time, Chris Holmes, her father chides his own father and grandfather for squandering the family fortune. With those failing in mind, Chris nurtures Elizabeth's ambitions.

She’s accepted into Stanford and gets a position in Channing Robertson’s research lab, working under a Ph. D student. She does a summer internship at the Genome Institute of Singapore where she tests a lot of patient specimens and is convinced there's a better way. She drops out of Stanford in the Fall of her sophomore year (2003) to start her company. She files a patent for an arm patch that can diagnose medical conditions, and Robertson is impressed. Robertson becomes her advisor. The Ph. D student becomes her first employee.

Her initial investors are from family connections (including Tim Draper a highly respected VC founder) and then she continues to raise for a total of $6M from various people. However, it soon becomes clear that her patch idea is impossible science fiction. They start contemplating some type of handheld device and land on the cartidge-and-reader setup. By late 2005, there is an initial prototype and she is hopeful.

2. The Gluebot (The Inital Prototypes)

This section is about the problems (managerial and engineering) in designing initial prototypes. Elizabeth knew what she wanted to achieve (small, needless blood tests), but didn't have any of the science to back that idea up. This part discusses the engineering difficulties and the rudimentary technology they ended up with. It also discusses Elizabeth's mismanagement, the toxic culture, how she treated employees as disposable, and how she started running live tests on vulnerable patients before the technology was ready.

Elizabeth starts hiring employees to engineer her idea. Elizabeth is determined not to use needles and is obsessed with miniaturization. She wants it to fit in your hand. She also didn't like departments to communicate which made it harder to diagnose where problems were arising. No needles, meant she wanted to use pinpricks of blood, which meant tiny amounts of blood.

Miniaturization was a big issue since there were a lot of things needed and lots of moving fluids around. Using tiny amounts of blood meant that it needed to be diluted with saline to have enough volume. This created a layer of complexity and impacted the test accuracy. Additionally, in order to do blood tests, it requires "reagents" (stuff that reacts with blood). In essence, there was a lot of stuff needed to be in there and moving around. As a result, bad results due to contamination and poor accuracy was a constant problem given the size constraints Elizabeth imposed.

Elizabeth wants around the clock engineering shifts to make things go faster. She also sets up teams to compete with one another. Plus, she offers up the 1.0 prototype for a cancer study before the technology is ready.

Initially, the idea is to use a system of valves and microfluidics. However, one team comes up with the idea to use a very rudimentary system, basically a box with a robot arm using a pipette to move things around. It's larger than the toaster design, but performs better. Elizabeth names it the Edison (though some derisively call it the gluebot since the robot arm they purchased was designed to dispense glue).

3. Apple Envy (Holmes's Idolization of Apple and Jobs)

This section is about Elizabeth's idolization of Steve Jobs and her Apple hires. She tried to hire their employees, recruits one as a board member, and fashioned herself after Jobs. These experienced Apple alums start to see how she is mismanaging the company, with false projections, preventing communication between employees and spying on employees.

Elizabeth recruits a number of Apple employees. She also starts dressing like Steve Jobs, with a black turtleneck and pants each day. A former Apple alum notes that in the name of security, chat ports were blocked and information was siloed off. Elizabeth's IT and admin assistants seemed to be spying on employees and reporting back to her.

She recruits Avie Tevanian, Apple's retired head of software engineering, as a board member for Theranos. Upon joining, Avie notices from one board meeting to the next how revenues Elizabeth projects never seem to materialize. When he brings up issues, Don Lucas (Chairman of the Board) asks him to resign and is threatened with litigation.

4. Goodbye East Paly (Therano's Move to central Palo Alto)

This part discusses Theranos moving from east to central Palo Alto (much fancier) and more product development challenges. Elizabeth's irrationally demanding, suspicious nature is son display. She values loyalty above merit and continues to fire people who offer criticism.

Theranos moves to a fancy new building in central Palo Alto in early 2008. Logistically it's complicated due to blood samples and whatnot, but Elizabeth tries to move up the date of the move by a day, though it turns out to be impossible. It causes a loyal member of her team to quit. He's also turned off by how she tries to dig up dirt on employees to deny them stock options or whatnot.

They do some user testing to see how people handle their prototype and find new problems. It's a bloody mess trying to prick people's fingers and get the blood into the cartridge. Elizabeth almost gets removed as CEO due to her false revenue projections. However, she convinces the Board that she is contrite and will be more transparent in the future. She then fires the employees who brought the issue to the board. More heads roll as people try to pump the brakes on a product that doesn't work.

5. The Childhood Neighbor (Fuisz's Patent)

This section is about a patent that was filed by a family friend, Richard Fuisz. The patent he files is on technology connected to Holmes's idea.

The Fuiszes are close family friends of the Holmes, though their friendship is occasionally a bit competitive and fraught. Richard Fuisz has a medicine-related business, and finds out about Elizabeth's invention. He files a patent for technology relating to Holmes's idea (a mechanism for altering doctors about abnormal results). By the time Elizabeth finds out, the two families are already not speaking. (Richard's son works at the law firm that does work for Theranos. And Elizabeth suspects he had something to do with this, though it seems unlikely.)

6. Sunny (Elizabeth's Boyfriend)

This section is about Sunny's influence on Theranos and Elizabeth's relationship with Sunny, her boyfriend, who is on the board and works at Theranos as well. They keep their relationship secret from the employees and the board. As problems arise with the devices, Sunny covers up and ignores issues and makes ethically and legally questionable decisions.

Ramesh "Sunny" Balwani, Elizabeth's boyfriend, is an older man who she hires onto the board and into the company. She met him the summer before college in a program where she was bullied by the other kids, but Sunny (the only adult in the group) stood up for her. He was previously president of a company was a successful exit. Elizabeth hides her relationship with him from others. Sunny is a bully and has no experience in medicine or science.

Chelsea, a friend of Elizabeth's from college, also join, but starts noticing issues. There are mechanical errors, such as the cartridges not fitting. Plus, the devices need to be a specific temperature or it leads to data errors. Sunny dismisses most issues as wifi problems (since the devices transmit data back to Theranos for analysis). Chelsea and Sunny go to Mexico to test blood samples for swine flu and the results are a mess. Other people work with Sunny on swine flu tests and there's rumors that he's illegally bribing foreign officials to conduct the tests.

7. Dr. J (Theranos's Walgreens Partnership)

This chapter is about Theranos's Walgreens Partnership. Jay Rosan, from Walgreen's Innovation Team, sees Theranos as a potential way for the company to get a leg up in their healthcare innovation. He champions Theranos and helps Theranos secure a major partnership. Theranos starts dealing with regulatory hurdles and trying to bypass FDA approval. (They do this by calling themselves a laboratory that is overseen by the less-strict CMS instead.)

Jay Rosan is part of Walgreen's Innovation Team. He hears about Theranos and sees it as a potential game-changer for them. He's eager to get things started and commits the company to a pilot program with Theranos, involving having the devices in 30-90 stores by 2011. (Theranos offers them drugstore exclusivity and offers Safeway supermarket exclusivity).

While the pilot is getting underway, Theranos decides that the tests they offer in Walgreens will be considered "laboratory-developed tests", which don't require FDA approval. As a laboratory, they are overseen by the CMS instead (which regulates according to the CLIA laws), which is much less closely regulated. Moreover, the CMS is generally overburdened and underfunded which results in even less scrutiny.

Kevin Hunter, another Walgreen rep, is skeptical of the classification. He also finds them secretive and paranoid. He notes Holmes's weirdly deep voice. Theranos denies them access to their lab, rejects comparative tests, doesn't provide the results of their demo to them, etc. They are forced to sign agreements not to disassemble or tamper with the devices so they don't know what's in there.

When he brings it up to the executives, they say that they can't risk losing the technology to CVS in case it's real. Walgreens pushes forward and soon has built a demo store with a built-in blood-testing lab.

8. The miniLab (Development of Theranos's New Device)

This section is about the issues that arise in trying to build the new iteration of the Theranos device. Holmes has claimed they can run hundreds of tests that are impossible with the Edison, the current device. She begins development on the miniLab, which brings more engineering challenges. When the prototype is ready it is rushed into production without ever being tested. She also hires her younger brother and his frat brothers around this time.

Despite Elizabeth's assurances to Walgreens and Safeway, the Edison can only perform a very limited number of tests, far from the hundreds of tests she has promised them. It's capable of performing "immunoessays," tests that use antibodies to measure substances in the blood. Lots of other types of tests require very different techniques.

Elizabeth hires a team to develop the "miniLab," a device that will include 3 additional lab tools: a spectrophotometer, a cytometer, and an isothermal amplifier. These will allow them to run many more tests. These are all existing technologies, so the team is simply trying to take existing tech and make it smaller. Elizabeth wants the miniLab to fit on a desk or shelf. When the employee that is primarily responsible for the miniLab, Kent, launches a Kickstarter for his own patented side project (bicycle lights), Elizabeth repeatedly demands that he turn over the patent for his side project. He finally ends up leaving indefinitely.

Like with the Edison but even moreso this time, thermal control in the small device with lots of moving parts is difficult (resulting in inaccuracy). When the prototype is ready to begin testing, instead of testing it and refining it to make it better, Sunny jumps straight to building a hundred of them.

Elizabeth hires her younger brother and a group of his frat brothers into the company who are all very loyal to her. She gives them prominent roles and more access than other employees to sensitive information.

9. The Wellness Play (Theranos's Safeway Partnership)

This part talks about Safeway's attempt to test out Theranos's technology, beginning with their employee wellness program. Issues come up immediately, such as not having devices on site for some reason, still having to use needles, testing being outsourced and inaccurate data. Even the tests Theranos does test themselves (instead of outsourcing) are being done on non-Theranos devices. A full Safeway launch is repeatedly delayed.

As the exclusive supermarket provider for Theranos, Safeway starts moving forward with this "wellness play" in early 2012. It's initially rolled out to employees first. Kent Bradly, overseeing the employee clinics for Safeway, quickly notices issues. First, there are no Theranos devices around. Instead, there's just someone drawing blood twice, once with Theranos's pinprick method, and sending the blood samples back. Furthermore, the results often take a long time. He soon finds out many are being outsourced. Then, employees start reporting inaccurate test results.

In the Theranos lab, the miniLab is not ready so their blood tests are all done on devices purchased from other companies. But even then the lab staff are poorly trained and don't know how to use the machines. And the phlebotomist drawing blood at the Safeway clinic are poorly trained too (don't know how to use the centrifuge properly and using expired materials that comprise the results). When the one competent person, Diana Dupuy, in the lab brings up all these issues, she is fired.

Theranos keeps delaying a launch and Safeway's wellness centers in their stores lay vacant. The Safeway CEO who championed the project, Steve Burd, is asked to retire.

10. “Who Is LTC Shoemaker?” (Theranos's Military Contract)

This section is about Theranos's potential military engagement. The person in charge, Lieutenant Shoemaker is not satisfied with Theranos's regulatory setup and eventually reaches out to the FDA with his concerns. This results in an inspection which Holmes and Sunny lie their way out of. Without FDA approval, Theranos is instead offered a limited trial to test out the accuracy of the devices, but Theranos never does it.

In November 2011, Elizabeth is meeting with Lieutenant Shoemaker regarding deploying Theranos devices into the Afghan war theater, but he has concerns about their regulatory approvals. He refuses to approve it until she has documentation from the FDA. Shoemaker eventually reaches out to the FDA about it.

The FDA sends Gary Yamamoto to investigate, unannounced. Upon questioning, Elizabeth and Sunny lie and claim that Shoemaker is wrong about their interpretation of the regulations (that they are planning to operate all over without FDA approval, and with only one CLIA-certificate).

Elizabeth contacts Shoemaker's superior, General Mattis, who has been eager to get Theranos deployed into Afghanistan. Mattis calls a meeting, Shoemaker explains the issues, and Mattis agrees that the original plan would require FDA approval. They settle on offering to allow Theranos to perform a trial testing the accuracy of the devices by using leftover blood samples. Theranos never takes them up on the offer.

11. Lighting a Fuisz (The Fuisz Patent Case Begins)

This part is about Elizabeth hiring David Boies (a famous lawyer) to represent her and suing the Fuiszes regarding their patent.

Elizabeth hires a famous and very aggressive lawyer, David Boies, and files suit against the Fuiszes alleging that they stole information in order to have the information to file their patent (because John Fuisz worked for one of Theranos's law firms. Carreyrou thinks that it is unlikely John was involved, though since he had a bad relationship with his dad).

John has at this point started his own practice and loses clients over this lawsuit. Furthermore, the litigation is getting very costly for the Fuiszes. Elizabeth on the other hand was paying Boies with Theranos stock.

12. Ian Gibbons (The Fuisz Patent Case: A Missing Witness)

This part is about Ian Gibbons, an early Theranos employee, who is subpoenaed by Fuisz to testify in the patent case. Elizabeth takes credit for his work in the patents, he is demoted when he brings up problems in the company, and finally he kills himself due to the stress of having to testify and possibly lose his job as a result.

The Fuiszes have been trying to question Ian Gibbons, an early Theranos employee, to help form the argument that nothing about the Fuisz patent borrow from Elizabeth's early patents. More importantly, unknown to Fuisz, Ian knows that Elizabeth put her name on all the patents even though her contributions were negligible. If exposed, that could invalidate the patents.

Ian was the first experienced scientist to join Theranos and was helping to lead the chem team until he was later demoted after bringing up some problems at Theranos to Channing Robertson. He was increasingly gloomy and humiliated by his treatment. When he is subpoenaed to testify for the case, he is very anxious. He doesn't want to lose his job, since he thinks he's too old to find another job, even though it makes him unhappy.

Meanwhile, Ian's wife has a lot going on in her life and isn't able to really deal with Ian's stuff as well. Ian ends up killing himself. Rochelle only hears back from Theranos to let her know she needs to return any company belongings he had.

13. Chiat\Day (Website and Ad Launch)

This section is about Theranos's hiring of Chiat\Day, a well-known ad agency, to do their ads and website. Issues that arise regarding claims being made on the website which are eventually scaled back by the legal team.

Elizabeth hires Chiat\Day, an advertising agency that had also represented Apple for many years, to do their branding and website launch. The Chiat\Day employees start to have false advertising concerns over some of the text proposed for the website and ask for verification for the claims. Elizabeth cites an internal Theranos reports, but refuses to provide it. Finally, at the last minute before launch Theranos's legal team does a review and makes some changes to qualify a lot of the statements.

14. Going Live (Walgreens Launch Lead-Up)

This section is about more engineering issues as Theranos prepares to make their tests commercially available at Walgreens. The plan is to draw blood at Walgreens only, but do all the tests at Theranos's lab. It means less regulatory approvals, and they can run tests they don't know how to do yet on hacked non-Theranos devices. There are still issues with test accuracy, for example the fingerprick method of drawing blood naturally results in a release of potassium where the skin breaks, which can throw off results.

Things at Theranos start ramping up for a "going live" event when the product will be commercially available at Walgreens. The plan is to take blood at Walgreens and have it couriered over to Theranos for testing (to minimize the need for regulatory approvals).

Of course, there are a ton of engineering issues that still need to be resolved. For example, the internal pipettes that move fluids around need to be recalibrated every few months or they can start drifting off to the wrong places. There are also some tests they still aren't able to run and they instead turn to hacking another company's device, the ADVIA, to run general chemistry assays. They plan to do any of those tests on that non-Theranos device. However, those devices are still meant to use larger quantities of blood, so the test will be less accurate compared to normal usage. Plus, there's still a basic problems with their method of drawing blood. Fingerpricks result in hemolysis, where red blood cells burst, releasing lot of potassium which can throw off the results for certain tests.

15. Unicorn (More Funding)

This section is about a new round of funding, which brings in $96 million at a valuation of $9 billion. Elizabeth and Sunny make a number of false claims about Theranos and its capabilities leading up to and while raising funds, including about how accurate and how many tests can be run. They also make false claims about working with the military and what revenues are forthcoming.

Theranos introduces Theranos to the world by means of an article in the Wall Street Journal, which contains a number of misleading claims, like saying it's being used by the U.S. military. There's also now a number of current and former military officials and congressmen on the board, lured in through grants of stock, to bolster that claim. These include General Matti, George Shultz and Henry Kissinger.

Elizabeth plans to use this article to kickstart her next fundraising round, one where Theranos will be valued as a "unicorn", a start-up valued at over $1 billion. Elizabeth makes a number of questionable claims as she puts together the funding round. She shows a graph that indicates Theranos's tests are just as accurate as traditional testing. They claim they've developed 300 blood test, all of which have been submitted for FDA approval. They also claim they can run 70 tests at once with one fingerstick sample of blood (in reality, you lose blood when moving it around and need more blood for more test). They also cite fabricated revenue projections that are 5-12x greater than already optimistic internal projections.

By the end of that round, Theranos bring in $96 million in funding, at a valuation of $9 billion.

16. The Grandson (Tyler Schultz, Whistleblower)

This section introduces Tyler Schultz, grandson of a prominent Theranos board member, who joins Theranos (and later becomes one of the main whistleblowers on the whole operation) and reports the problems he sees to his grandfather. Tyler's concerns are dismissed and he resigns.

Tyler Schultz is the grandson of Theranos board member George Shultz, who was also Regan's Secretary of State. Tyler gets a job at Theranos and becomes friends with another employee, Erika Cheung. Quickly, he starts to see red flags, such as the unimpressive technology in the devices. He's asked to help with a validation test to show how accurate the tests are, but the final results are falsified. Meanwhile, Erika is asked to do quality control tests where inaccurate values were simply thrown out, which Tyler hears about. Tyler brings up the issues to Elizabeth and a senior engineer, but gets tortuous explanations in response.

Tyler also finds out from Erika that the proficiency (accuracy) results they're sending in for regulatory approval are not the ones done on their own devices. Under a fake name, he reaches out to the New York State Department of Health with data Erika gives him, who confirms that their practices are illegal. Armed with that, he sits down with his grandfather, George, and outlines all the problems he's seen. George tells him to send an e-mail to Elizabeth with all of the information. The result is a blistering response from Sunny, so Tyler resigns. Tyler talks to George again, but it's clear George still believes Elizabeth that everything is fine. Erika soon resigns too.

17. Fame (Media Attention)

This section is about Theranos's and Elizabeth's rise in prominence in the media, catalyzed by a cover story in Fortune in June 2014.

The Fuiszes mounting legal costs cause them to settle and withdraw their patent. A news brief regarding the settlement results in a Fortune writer hearing about Theranos.

Fortune sooon publishes a big, splashy cover story about Theranos and Elizabeth, published on June 12, 2014. This is soon followed by the cover of Forbes 400, plus more features in USA Today, Inc., Fast Company, and Glamour and on various TV news outlets.

18. The Hippocratic Oath (Theranos Skeptics)

Thus section is about a small band of people that forms who are all skeptical of Theranos. Alan Clapper is a pathologist who writes a blog and thinks Theranos's claims are too good to be true. Fuisz sees the blog post and puts Clapper in touch with the other skeptics, giving him the evidence to justify reaching out to an investigative reporter about the story.

Alan Beam is Theranos's lab director and knows Theranos is cheating on its regulatory proficiency tests (e.g. breaking the law). He's finally had enough, emails a bunch of evidence to his personal e-mail and resigns, but is eventually forced to delete those e-mails.

Alan Beam soon meets the small band of Theranos skeptics that have formed over time. It consists of Richard Fuisz (patent case guy), Rochelle (Ian's widow) and Phyllis Gardner. Gardner is a professor at Stanford Medical School who meets Richard Fuisz, and she shares her reservations about Theranos with him. She had once talked to Elizabeth about her original patch idea, and remembered Elizabeth's lack of medical knowledge and unwillingness to take guidance.

Meanwhile, due to the media coverage, others are skeptical of Theranos as well, including Adam Clapper who is a practicing pathologist and a blogger. He thinks Theranos's claims are too good to be true, and it raises a red flag that Elizabeth's defends herself by citing a study that she co-authored in a tiny online-only publication that you pay $500 to be published in. Clapper posts about it and Fuisz sees it, and puts him in touch with Alan Beam.

Once Clapper talks to Beam, he feels he has the evidence he needs to contact an investigative reporter (which turns out to be Carreyrou).

19. The Tip (Carreyrou's Involvement)

This section is about Carreyrou's research on the story after Clapper tips him off. He starts reaching out to former employees who detail all the problems and illegal reporting of false results, and he talks to patients who have used Theranos's blood testing and gotten inaccurate results. From there, he gets in touch with Tyler Schultz and Erika, and he works with doctors to compare Theranos's results from other standard blood testing places.

Clapper reaches out to Carreyrou about Theranos, and Carreyrou starts researching the story. Fuisz puts him in touch with Beam, and Carreyrou is able to start confirming pieces of his story, though most aren't is willing to go on record since they're scared of Theranos lawyers. Carreyrou also contacts patients and doctors who have reported weird results from Theranos's tests. He talks to Phyllis and Rochelle.

He also drops Tyler Schultz a message and is soon put in touch with Erika as well. Tyler and Erika agree to talk to him. From there, Carreyrou reaches out to a number of doctors who have posted reviews of Theranos. He also is put in touch with a patient who got inaccurate results and ended up spending three thousand dollars on further testing (in addition to the emotional stress) to figure out if something was wrong with her because the blood test results were so worrying.

Soon, Theranos gets wind that Carreyrou is looking into them and a PR person reaches out, but Carreyrou is confident about his story and feels like he has enough to publish soon.

20. The Ambush (Tyler vs. Theranos's Lawyers)

This section is about Tyler being confronted by Theranos lawyers. When he refuses to cooperate, Theranos sends people to watch him, and he and his parents all hire attorneys.

In May 2015, Tyler is confronted by his family about talking to Carreyrou. When he goes to see his grandfather, he is ambushed by Theranos lawyers, but refuses to sign anything. Theranos sends people to do surveillance on Tyler. Tyler retains a lawyer, and his parents get their own lawyer as well. His parents' lawyer gets her car broken into with notes about their meeting stolen.

21. Trade Secrets (Theranos on the Attack)

This section is about Carreyrou's meeting with Theranos and its lawyers, who refuse to answer questions, citing trade secrets. Theranos lawyers also start hounding all the people who spoke to Carreyrou, threatening lawsuits.

Theranos finally agrees to meet with Carreyrou. Daniel Young, a senior engineer, is the only Theranos representative since the rest are lawyers, including David Boies. Theranos resists answering questions, claiming everything is a trade secret. The discussion is tense and often heated, and Theranos leaves angry.

From there, Carreyrou finds out that Theranos is threatening a lot of the people he spoke to with lawsuits and demanding that they meet with them to tell them what was said, etc. Boise also sends the Wall Street Journal (where Carreyrou works) a long letter, threatening a lawsuit if they publish the story. They also threaten the doctors that Carreyrou spoke to, threatening to ruin the reputation of the one that refused to cooperate.

22. La Mattanza (Waiting to Publish)

This section is about the interlude as things progress at Theranos, and Carreyrou pushes his editors to finish going over his story so he can publish it.

Meanwhile, at Theranos, things are progressing as usual. They are continuing a practice of faking their demos. They draw blood, put it in the device, and then when people leave, they take the blood and run it on a hacked commercial analyzer (to hide the fact that the Edisons don't work). Then, they e-mail people the results later.

Sunny has recently fired a member of the team that was pushing for environmental health and safety protocols in the lab. And with Vice President Biden visiting their offices, Sunny and Elizabeth set up a fake lab that looks cutting edge instead of their actual one for him to visit.

By now, Carreyrou has completed the story and pushes for the story to be published faster, but his editor tells him about La Mattanza. It's an ancient Sicilian ritual where fisherman go into the water and stay still until the fish no longer notice them and then attack.

23. Damage Control (Publication and Post-Publication)

This section is about the publication of Carreyrou's story and the aftermath. There's an immediate firestorm of coverage, and the FDA does a surprise inspection. The result of the inspection is that they must stop using their nanotainer immediately.

Around the time Carreyrou had started working on the story, Homes had raised another around of funding. Unknown to Carreyrou, the lead investor was Robert Murdoch, who controls the parent company of the Wall Street Journal. While Theranos is threatening Carreyrou's sources, Elizabeth is also having meetings with Murdoch about the story, hoping he'd offer to kill the story. Murdoch declines to intervene.

There's one last meeting between Boies and the Journal to try to convince them to pull the story, but it doesn't work. Holmes never agrees to talk to Carreyrou, and the story runs on October 15, 2015, entitled "A Prized Startup's Struggles". It sparks an immediate firestorm. People start asking questions like why no one their board is a blood science expert and why none of the VCs that have invested in Theranos are healthcare-focused VCs.

The FDA does a surprise inspection that results in it declaring the nanotainer (device to store the blood from the fingerprick) an uncleared medical device which they are to stop using immediately. The Wall Street Journal publishes that news, too, plus another four articles about various aspects of the story. Theranos lawyers keep demanding retractions.

24. The Empress Has No Clothes (Theranos Shut-Down)

This part is about the unraveling of Theranos. After the publication, an inspection by CMS (regulatory agency) results in Theranos failing it spectacularly. Eventually, Theranos and Holmes are banned from the laboratory business and a criminal investigation into Theranos begins as well as a civil probe by the SEC. Lawsuits are filed from all directions (investors, patients, Walgreens, etc.).

Three weeks before Carreyrou's first story is published, Erika e-mails Gary Yamamoto, an inspector for CMS (the regulatory agency for Theranos) about her concerns. It results in a surprise inspection, but Sunny asks for a full inspection to be put off for two months.

By the time the full inspection happens, the Wall Street Journal story is out. In November 2015, they are there for four days. By January 2016, CMS says that Theranos's issues poses "immediate jeopardy to patient health and safety" and gives them ten days to come up with a plan to correct it or lose their regulatory approval. The full report which Carreyrou is able to get (and publish) after a lot of tussling with Theranos lawyers, is very incriminatory. Reports of failed quality control tests, unqualified people handling samples and running tests, proof that Elizabeth lied in various interviews, and so on.

Carreyrou is also able to secretly meet with Tyler, who has been radio silent since the ambush by Theranos lawyers. Tyler reveals that his family has spent over $400,000 on lawyers, and that he is estranged from his grandfather. Holmes finds out about the meeting, from which Carreyrou deducts that either one or both of them is still being followed by Theranos PIs.

Holmes dumps and fires Sunny. Eventually, CMS bans Theranos and Holmes from the laboratory business. San Francisco begins a criminal investigation into Theranos while the SEC begins a civil investigation. Elizabeth makes a last-ditch attempt to present the technology at a science conference, but people aren't impressed. Soon, investors are suing her as well. Walgreens sues, too. Theranos pays $4.65 million to reimburse people for blood tests they paid for. David Boies stops representing Theranos. In total, nearly 1 million blood tests from Theranos end up being voided or corrected. Some patients sue as well.


The last section wraps things up, noting that Theranos, Holmes and Balwani's criminal investigations are still underway and that the company is running on fumes. Holmes settles the SEC's civil charges.

By late 2017, Theranos has burned through most of the $900 million in total that it had raised from investors, largely on legal fees. On March 2018, Holmes, Balwani and Theranos are officially charged by the SEC. Holmes agrees to give up control of the company, relinquishes her stock, pays a $500,000 fee and is barred from being an officer or director in a public company for 10 years. Balwani does not settle with the SEC and is being sued by them instead.

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