This month’s book review is ‘Bad Blood. Secrets and Lies in a Silicon Valley Startup’ by John Carreyrou. This links to the news item this month concerning the current trial of Elizabeth Holmes, the founder and CEO of Theranus.

The book charts the rise and then spectacular collapse of a multi-billion startup.

Theranus was originally formed in the US in the early 2000s by Elizabeth Holmes. She was seen a female Steve Job and very much became a celebrity, a status she cultivated and enjoyed.

Theranus told the world it had revolutionised the medical industry by developing the technology and a machine that takes just a few drops of blood and automatically carries out a large number of diagnostic tests. This was a huge breakthrough in the sector.

It obtained huge investment of more than $700m and at its height the business was valued at $9bn and had partnered with Walgreen.

One Slight Problem!

There was one slight problem. The technology and the machine did not work!! All the records were falsified and indeed they used to take blood out of their own machine manually out of sight of any investor, customer or regulator and used a commercial blood analyser for diagnostic purposes. Another issue was that the technology to take just a f few drops of blood also didn’t work. It was not enough to take more than a couple of tests.

For years Holmes misled investors and the FDA (Food and Drug Administration) and all her employees; the latter by keeping departments completely separate and they all reported to her or her boyfriend ‘Sunny’ Balwani. Anyone who questioned or queried anything were bullied by Sunny or Holmes. Indeed, despite Sunny being her boyfriend, this was kept quiet from investors and outside parties.

Whilst there was a board of directors, which contained some well known names, they were handpicked by Holmes, who was able to fool them, in part because, none of them had any diagnostic experience, and so did not question anything.

The Biggest Fraud since Enron

There were a couple of whistleblowers and then John Carreyrou from the Wall Street Times who started to make enquiries and ask questions. These people were threatened with lawsuits, they were followed in their day to day lives, they were intimidated and bullied to keep them quiet.

Eventually the truth came out and by 2017 the value of the business was zero and has been called the biggest fraud since Enron.

This book covers the complete story and is a great read. Bill Gates said of the book ‘I couldn’t put down this thriller with a tragic ending’

Well worth a read and there is also a documentary on Sky about it too. I will let you make your own views on the question of the voice of Elizabeth Holmes. It is said that she put on a particular voice during all her interviews and with her investors and board. If you watch the documentary you will hear it for yourself.

An excellent book.