Bad Blood is the history of Theranos. It’s written by John Carreyrou. John is not just some random journalist-turned-novelist — he’s the same Wall Street Journal reporter who blew Theranos open like a microwaved egg, with his bombshell yet hilariously understated expose in 2015:
“Hot Startup Theranos Has Struggled With Its Blood-Test Technology”
(understatement of the year, albeit only in hindsight). It’s a great story, and a fascinating window into the nuts-and-bolts of investigative journalism.
For anyone living under a cinderblock for the past decade, the tl,dr of Theranos:
- College drop-out Elizabeth Holmes founds biotech startup Theranos
- Theranos claims it has technology which could, from a drop of blood from a finger prick (instead of traditional blood draws), diagnose hundreds of medical conditions from low Vitamin D to Herpes.
- (Spoiler: they didn’t, and it couldn’t)
- Despite having no working technology, Elizabeth compensates with a closet of black Steve Jobsian turtlenecks and a strangely husky voice, and the company raised hundreds of millions in venture funding at a peak valuation of $10 billion
- Theranos fakes it, but forgot the second half, and never makes it. The company collapses, everyone loses their money, and the founders face criminal trials.
My whole career, I’ve lived in deep tech, and had to deal with the semi-literate catastrophe of “tech news”. I went into the book with as much respect for tech journalism as I have for pond slime, so my prior on the Theranos story was:
“Ambitious young founder drops out of Stanford with good idea. Media builds up young (female) founder into unicorn founder superhero. When technology fizzles out, the founder, unable to admit defeat due to immaturity and media adulation, accidentally digs grave for self with good-intentioned but compounding exaggerations. Lies build up until the company collapses. Finito.
While it was technically ‘fraud’, nobody got hurt except investors who didn’t do due diligence, so… so what?”
Well, I was wrong. Theranos — and Theranos was, indisputably, a physical manifestation of Elizabeth Holmes’s psyche — lied from the beginning, and was doing Bad Shit well before Elizabeth became a Young Female Founder icon on the cover of Forbes.
And when I say “Bad Shit”, I mean:
- Lying, outright, in the press and to partners, about what technology was being used to run tests.
- Completely inventing revenue projections. This is what got them to unicorn status. The lying didn’t come “post-unicorn”
- Completely disregarding employee feedback, even when being told outright “these devices are random number generators, but we’re using them to provide clinical results, and should probably stop”
- Lying, outright, to the board of directors about basic things “our devices are being used in Afghanistan”
- Giving patients clinical results based on clearly malfunctioning experimental devices. And like wildly bad results. Giving patients Potassium readings which classified them as “obviously deceased”.
I don’t want to go too deep into the details. Pretty much every part of the story is equally wild, and you should just read it, if you’re at all interested in reading about biotech trainwrecks.
One of the craziest part about the story (to me) is how barely it happened. There were several points in the story where the breakthrough hinged on absolutely tiny connections or revelations — and usually, those connections were tech-enabled.
First, one of the key connections — the one which actually connected the whistleblower to John Carreyrou, was a LinkedIn profile view notification (!):
“While checking his emails a few days later, Fuisz saw a notification from LinkedIn alerting him that someone new had looked up his profile on the site. The viewer’s name—Alan Beam—didn’t ring a bell but his job title got Fuisz’s attention: laboratory director at Theranos. Fuisz sent Beam a message through the site’s InMail feature asking if they could talk on the phone. He thought the odds of getting a response were very low, but it was worth a try. He was in Malibu taking photos with his old Leica camera the next day when a short reply from Beam appeared in his iPhone in-box.”
In case you haven’t logged into LinkedIn recently, that’s the stupid little notification that shows up right before a recruiter tries to connect with you:
This case breaking open hinged on Fuisz being notified that someone had viewed his LinkedIn profile. This connected a whistleblower former employee with a disgruntled legal rival, who knew a guy who ran a pathology blog. That blogger just happened to know an investigative WSJ reporter.
And that brought down a $10B startup.
It wasn’t the only case where tech-connectivity was critical to breaking open this case. John was able to use Yelp to find doctors to attest to Theranos’s unreliability:
“I had another lead, though, after scanning Yelp to see if anyone had complained about a bad experience with Theranos. Sure enough, a woman who appeared to be a doctor and went by “Natalie M.” had. Yelp has a feature that allows you to send messages to reviewers, so I sent her a note with my contact information. She called me the next day. ”
(This is still a thing, by the way — you can still find irate customers in Phoenix on Yelp dealing with the repercussions of randomized Theranos test results):
There’s the obvious stealth tech too, of course — burner phones, burner emails, email backups, and all the other digital tools which make it impossible to permanently hide internet-connected information in the 21st century.
I don’t mean to imply that the internet (and all the weird stuff we’ve layered on top of the web) made the journalism easy — clearly this story was a grind from start to finish against brutal legal pressure by Theranos. It’s entirely John would have broken the story open without all the newly available digital tricks of the trade.
Or, maybe not.
Theranos certainly wouldn’t have lasted forever, one way or another. The technology simply didn’t work. Safeway or Walgreens, once they had rolled out commercial partnerships, would have figured this out… eventually.
But it seems likely it would have lasted long enough to kill a lot of people.