I’ve always been interested in books about fraud and cons and whatnot. Add on the fact that I remember reading a little about Theranos before it was discredited, and I was drawn to this book.
And it’s very good! It lays out what happened in chronological order, with lots of colorful anecdotes (see below), because this story is pretty crazy. There are a lot of people involved, but I was able to keep track of them.
Elizabeth Holmes (the founder of Theranos) promised that they had the technology to run hundreds of blood tests in a small machine with just a pinprick of blood. It’s not hard to see why so many people were interested – the device would have been revolutionary.
A lesson to take away from the book is that while the reveal that it was all a sham seemed very sudden, there were a lot of people that had doubts along the way. But it’s hard to convince people that a whole company is built on a lie, and especially so when the company was so litigious and paranoid – everyone had to sign multiple NDAs, etc.
It’s hard to know for sure, but from the book it certainly sounds like Elizabeth Holmes is a sociopath. The number of lies in the book is just astonishing, and I’m guessing that’s part of the reason people were hesitant to think it was a sham. And apparently she might be working on a new startup, which is…something.
Here are some interesting things:
– Holmes was extremely quick to fire people she saw as disloyal. Often, she asked Theranos’s head of IT to build a dossier on the fired person that she could use for leverage. She also prohibited employees from putting Theranos on their LinkedIn profiles – instead they were supposed to use “private biotechnology company”. Apparently the second-in-command prohibited the use of Google Chrome on the theory that Google could use it to spy on Theranos’s R&D, which…wow.
– A friend of Holmes’s family (who apparently also had a shady past, and was also an undercover CIA agent after coming across a CIA ad in the Washington Post??) got wind of what Theranos was working on and filed a patent specifically about an improvement to the device. (some kind of tracking) And the patent was granted! Then there was a big lawsuit, and Theranos eventually won, but maaaaan that is a dick move. That’s not what patents are supposed to be for, I think!
– It is abundantly clear that Holmes has an abundance of charisma, which is part of why she got so far. When she was courting Walgreens, she made a big show of giving the Walgreens CFO an American flag that (she said) had flown over a battlefield in Afghanistan. And she had written a dedication to Walgreens on it! So weird.
– Walgreens probably lost the most – they had invested a bunch of money in Theranos and had opened some “Theranos wellness centers” in their stores. One of the Walgreens people involved with the pilot program could tell that something was up because Theranos wouldn’t give them access to their lab, wouldn’t do a comparison study to prove that their machines worked, etc. But he was overruled because Walgreens was afraid of CVS striking a deal with them, and apparently Walgreens has a huge rivalry with CVS.
– Holmes’s voice was a pretty deep baritone (here’s a video example), but apparently it was an affect – her real voice is several octaves higher. The speculation is that she thought this was necessary for a woman entrepreneur to be taken seriously in Silicon Valley, which is sadly probable.
– Holmes idolized Steve Jobs. At one point she said that a documentary about a 9/11 conspiracy theory wouldn’t have been available on iTunes if “Steve” hadn’t believed there was something to it. The day Jobs died, Holmes flew an Apple flag at half-mast at Theranos headquarters.
– People were fired so frequently that every time it happened the head of security would come down to the warehouse, where people would gather to gossip, then he’d slowly reveal who was fired. Then one of the people in that group got fired too!
– Holmes forced through a resolution on the board of directors that gave one hundred votes for every share she owned, which gave her 99.7% of the votes. I’m not sure why this is a thing that you can do, although maybe the fact that the company was private helped?
– There was a group of guys from the same fraternity who got hired into sales, who were originally called the “Frat Pack”, which is good, but nothing is better the name they got later: “Therabros”!
– The second-in-command under Holmes was quite the dictator. (he was responsible for a lot of the firings) One thing he did was to hire people on H-1B visas and put them in key positions. Since they were dependent on the company to remain in the country they had to be very deferential.
– The author is a reporter at the Wall Street Journal who wrote the first story that raised questions about Theranos. When Holmes heard that he was working on this story she tried all sorts of things to kill the story, including getting Rupert Murdoch (the owner of the WSJ) to invest in the company! Murdoch did invest in the company but didn’t intervene at the paper, thank goodness.
– Theranos hired David Boies’ firm to try to kill the story, and they were absolutely ruthless in intimidating sources, employees, and the WSJ. I guess this is all legal but it sure seemed shady.
– After everything came to light, Theranos eventually voided almost one million test results!
The story is gripping and the book is well worth reading.