John Carreyrou, “Bad Blood: Secrets and Lies in a Silicon Valley Startup” (2018) – This is a story of the way greed and stupidity engender each other. Everyone involved should have been able to see that Theranos — a medtech startup that was the toast of Silicon Valley in the early 2010s — was not what it claimed to be. But between the amounts of idle cash that have been shoved into venture capital and the Steve-Jobsian hype at high tide at the time, Theranos went far enough to make its leader, Elizabeth Holmes, the world’s youngest “self-made” (i.e. not inherited) female billionaire and to gain the imprimatur of many institutions and people who should have known better. From Barack Obama to the Wall Street Journal to Henry Kissinger to Jim Mattis to pretty much the entire venture capital establishment, Holmes and Theranos had them all fooled.
To be honest, this in and of itself isn’t that much of a distinction. Silicon Valley in general is a massive bubble scam. A few things distinguished Theranos from every other non-revenue-generating unicorn out there. One is just a matter of degree- there are a lot of culty corporations out there, but Theranos was deeply culty. Holmes claimed to be starting a new religion (she made everyone read “The Alchemist,” which elicited a chuckle from me) and upper management was profoundly abusive towards anyone displaying “cynicism” i.e. critical thought. They were utterly shameless in throwing themselves in to the hype machine, with Holmes literally cosplaying as Steve Jobs and claiming that she was creating the most important technology the world has ever seen. Another distinction that’s more about scale than essence is that Theranos had no product, as opposed to simply an overvalued one, and blatantly lied to cover it up.
What really distinguished Theranos, though, was that it got into a business where people could die if people tried to use its product. It seems that Holmes came up with a concept — blood testing via patch, instead of needles, that would automatically beam its results to you — like a Star Trek communicator thingy before actually learning more about what’s involved than any Stanford sophomore might. But unlike the Star Trek communicator, which eventually became the cell phone, the patch-blood-test thing is physically impossible, not just a matter of refining technology we already have to be smaller and more convenient. Blood from a thumb prick is not the same for testing purposes as blood from a vein.
The Theranos team found this out, at length, and Carreyrou takes us through all the ins and outs and permutations of efforts they made to hammer reality into a shape resembling the great founder’s vision. By the time they were caught and closed up shop, they had abandoned the idea of a patch beaming results out and made a box that could, notionally, take your blood and give you results without a phlebotomist. The box didn’t work and the Theranos people pretended it did, often, amusingly enough, by testing blood samples sent to them using commercially available machines of the kind they have in clinics. And they screwed that up, too, through trying to use too little blood, cutting corners in staffing, etc. It was an increasingly elaborate (and threadbare) web of lies. Holmes was caught by a combination of vengeful patent trolls, internet medtech blog pedants, alienated employees who once believed in her, and, eventually, John Carreyrou of the Wall Street Journal. The rest is history, albeit history laden with threats from Theranos’s high end legal muscle until the whole house of cards fell apart.
The challenge with any story like this is to make book-length corporate intrigue interesting. Carreyrou does an admirable job with the scum and suckers that bubble economies produce. The bloodless no-places of Northern Virginia and the Bay Area bring forth all manner of pallid bottomfeeders, the best of which is the patent troll pseudo-uncle of Holmes who messes with her basically out of spite, but proves important to bringing her case to light. Many moments in the story were both horrifying and funny. Carreyrou winds up blaming hubris and bubble psychology where capitalism is the actual culprit here, but there’s only so much you can expect. Similarly, there’s only so many ways to parse legal threats and biotech mechanical failure before it starts to run dry. Still, an admirable stab at a “Helter Skelter” for Silicon Valley. ***’