What happens when a nefarious startup plays games with people’s health?
As a little girl, Elizabeth Anne Holmes was asked what she wanted to be when she grew up:
“I want to be a billionaire,” she said.
“Wouldn’t you rather be President?”
“No,” she said. “The President will marry me because I have a billion dollars.”
This youngster knew what she wanted, and she got it. By the time she was 30, she was worth $4.6 billion. She dropped out of Stanford after two years to start her own company and, by 2014, as CEO and founder of Theranos (her combination of “therapy” and “diagnosis”), Holmes was hailed by Forbes as “the youngest woman to become a self-made billionaire.”
She had announced that she’d devised technology to test blood with a painless pinprick rather than the painful needle in the arm that had been used for years. Her company slogan: “One tiny drop changes everything.”
Her technology promised to provide a complete blood work-up for at least 100 tests, including glucose tolerance, electrolytes, diabetes, kidney function, herpes, HIV, Zika, Ebola, and all types of cancer. She said her technology could diagnose heart disease and impending strokes — all with a quick and easy finger-stick.
This scientific breakthrough promised to revolutionize healthcare, and Walgreens and Safeway signed up to provide Theranos’ service to their customers, while the Department of Defense wanted it for servicemembers around the world. By transforming lab testing with innovative technology, Holmes seemed to have discovered the Holy Grail of microfluidics, which had bedeviled research laboratories for decades.
Fortune canonized her on its cover because she pledged that her healthcare company would do good and help humanity. The Wall Street Journal described her as “the next Steve Jobs or Bill Gates.” High praise followed from the New York Times, the New Yorker, and a fawning interview with Charlie Rose on PBS.
She gave massively popular TED Talks and was bolstered by an impressive board of directors that included former Secretaries of State George Schultz, who hosted her 30th birthday party, and Henry Kissinger, who tried to fix her up with dates. Other members included former U.S. Senators Sam Nunn (D-GA) and Bill Frist (R-TN), former Navy Admiral Gary Roughead, and former Secretary of Defense Jim Mattis: all older men, but none with a background in bioscience.
The fact that Holmes was a young woman in the male-dominated world of Silicon Valley played to her advantage, which makes it interesting to note that she did not choose one woman to sit on her board.
That board of prestigious men made Theranos a magnet for multi-millionaire investors like Betsy DeVos and Rupert Murdoch. By 2017, Holmes’ private company was valued at $9 billion — that’s b-for-boy billion. In the parlance of Silicon Valley, Theranos was a “unicorn” — a privately held startup valued at over $1 billion. Uber, a ride-hailing app, is the poster child for unicorns.
Today, Elizabeth Holmes is the poster child for corruption, the epitome of degradation. Her company has cratered under the staggering weight of her deceit, all of which is documented in riveting detail by John Carreyrou in Bad Blood: Secrets and Lies in a Silicon Valley Startup, soon to be a motion picture starring Jennifer Lawrence. Holmes and her business partner, Ramesh “Sunny” Balwani, also her lover, have been indicted for criminal fraud and could face up to 20 years in prison.
Carreyrou, a Pulitzer Prize-winning investigative reporter for the Wall Street Journal, charts the rise and fall of Holmes as a hungry young woman who saw herself as Marie Curie, the only female scientist to win two Nobel Prizes. A zealot, Holmes told employees she was building a religion, and if they did not believe, they had to leave.
Many did, but those who were fired or retired had been forced to sign life-shackling non-disclosure agreements, swearing never to reveal anything about their employment or employer. She retained David Boies, one of the country’s most famous lawyers, to enforce those contracts, which, for years, shielded what was going on at Theranos — how the company threatened employees, cheated on proficiency tests, diluted blood samples, misled inspectors, masked malfunctions, reported inaccurate readings, used non-functional devices, and ignored quality-control failures.
They even built a fake laboratory in 2015 to impress then Vice President Joe Biden, who later raved to the press that Theranos was “the laboratory of the future.”
As Carreyrou emphasizes, people’s lives were at stake because most physicians rely on blood tests for diagnosis. If healthy individuals are misdiagnosed, they can be subjected to costly and precarious treatments; if individuals with life-threatening diseases go undiagnosed, they can die.
If you believe in whistleblowers, as I do, and genuflect to the First Amendment, you’ll applaud John Carreyrou and Bad Blood for turning over a slimy log in Silicon Valley and showing us what slithered out.
Kitty Kelley is the author of seven New York Times bestselling biographies. She is on the board of Reading Is Fundamental and the Independent.