Finance
by John Carreyrou
How did Theranos fool everyone?
Theranos claimed it could run a full range of blood tests on a few drops from a finger-prick, and was valued at about $9 billion. John Carreyrou, the Wall Street Journal reporter who exposed it, shows how a machine that never worked as promised fooled so many clever people.
Hear a sample · read by Laura
Elizabeth Holmes dropped out of Stanford at 19 to start the company. She wore black turtlenecks like Steve Jobs and spoke in a deep voice. Carreyrou shows how her story of painless tests for everyone raised money years before the technology could back it up.
Staff worked in separate teams that weren't allowed to talk to each other, so few people saw the whole picture. Those who asked awkward questions were fired or threatened with lawsuits. The company's lawyer was David Boies, one of the most feared litigators in America.
The board included two former Secretaries of State, George Shultz and Henry Kissinger, and a retired general, James Mattis. Hardly any of them knew about blood testing. Their names reassured investors, many of whom never saw the device tested independently.
The company's own device, the Edison, could run only a small number of tests, and unreliably. Most patient samples went through commercial Siemens machines that Theranos had quietly modified to handle diluted finger-prick blood. Patients in Arizona got results that were simply wrong.
The promise
Elizabeth Holmes said a few drops of blood from a finger could run a whole range of tests. Her machine never could.
Hidden failures
To hide the failures, Theranos ran many samples on altered machines bought from other companies.
The board
Her board was full of famous statesmen and generals, and almost no one who knew blood testing.
Fear
Staff who raised doubts were pushed out or threatened with lawyers, so most people kept quiet.
Whistleblowers
Two young employees, Tyler Shultz and Erika Cheung, spoke up, though Shultz's grandfather sat on the board.
A story from the book
Tyler Shultz, George Shultz's grandson, joined Theranos after university and saw its tests failing quality checks. He raised it with Holmes, then quit and tipped off New York state regulators. His grandfather took the company's side, and its lawyers confronted Tyler at the family home.
One thing to try
Next time someone pitches you a product, an investment or a job, ask for one thing you can check yourself, like a demonstration or a reference. Walgreens signed its deal with Theranos while its own lab expert was kept out of the lab.
Knotd has the key ideas from 250+ non-fiction books, each in a few minutes, in plain words. Bad Blood comes with a Spot the Trap case to make it stick.
Get the whole book on KnotdOpen in the appHow did Theranos fool everyone? Theranos claimed it could run a full range of blood tests on a few drops from a finger-prick, and was valued at about $9 billion. John Carreyrou, the Wall Street Journal reporter who exposed it, shows how a machine that never worked as promised fooled so many clever people.
The vision came first; Secrecy and fear; A board of famous names; What the lab really did.
Next time someone pitches you a product, an investment or a job, ask for one thing you can check yourself, like a demonstration or a reference. Walgreens signed its deal with Theranos while its own lab expert was kept out of the lab.
Yes. Knotd has the key ideas from Bad Blood in a few minutes, in plain words, plus a Spot the Trap case to test them. It's one of 250+ non-fiction books in the app.
