Bad Blood

John Carreyrou tells the story of the rise and collapse of Theranos, the multibillion-dollar biotech startup founded by Elizabeth Holmes.

Favorite quotes from the book:

VCs even had a term for it: the hockey-stick forecast. It showed revenue stagnating for a few years and then magically shooting up in a straight line.

Mosley knew that evangelizing was what successful startup founders did in Silicon Valley. You didn't change the world by being cynical.

The pharmaceutical companies were going to use Theranos's blood-testing system to monitor patients' response to new drugs. The cartridges and readers would be placed in patients' homes during clinical trials. Patients would prick their fingers several times a day and the readers would beam their blood-test results to the trial's sponsor. If the results indicated a bad reaction to the drug, the drug's maker would be able to lower the dosage immediately rather than wait until the end of the trial.

He was reminded of an old saying: “When you strike at the king, you must kill him.”

In her relentless drive to be a successful startup founder, she had built a bubble around herself that was cutting her off from reality. And the only person she was letting inside was a terrible influence.

“We can't not pursue this,” he said. “We can't risk a scenario where CVS has a deal with them in six months and it ends up being real.” Walgreens's rivalry with CVS, which was based in Rhode Island and one-third bigger in terms of revenues, colored virtually everything the drugstore chain did. It was a myopic view of the world that was hard to understand for an outsider like Hunter who wasn't a Walgreens company man. Theranos had cleverly played on this insecurity. As a result, Walgreens suffered from a severe case of FoMO—the fear of missing out.

EVEN THOUGH Elizabeth's name was on all of Theranos's patents, Richard Fuisz was highly skeptical that a college dropout with no medical or scientific training had done much real inventing. What was more likely, he thought, was that other employees with advanced degrees had done the work she'd patented.

Elizabeth told the gathered employees that she was building a religion. If there were any among them who didn't believe, they should leave. Sunny put it more bluntly: anyone not prepared to show complete devotion and unmitigated loyalty to the company should “get the fuck out.”

The ability to perform so many tests on just a drop or two of blood was something of a Holy Grail in the field of microfluidics. Thousands of researchers around the world in universities and industry had been pursuing this goal for more than two decades, ever since the Swiss scientist Andreas Manz had shown that the microfabrication techniques developed by the computer chip industry could be repurposed to make small channels that moved tiny volumes of fluids.

Michael Jordan: “I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed.” Another was from Theodore Roosevelt: “Far and away the best prize that life has to offer is the chance to work hard at work worth doing.”

Like her idol Steve Jobs, she emitted a reality distortion field that forced people to momentarily suspend disbelief.

Hyping your product to get funding while concealing your true progress and hoping that reality will eventually catch up to the hype continues to be tolerated in the tech industry.