By @SimonCocking review of Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou.
In 2014, Elizabeth Holmes, founder and CEO of the multi-billion-dollar biotech startup Theranos, was widely seen as the female Steve Jobs. Holmes was a brilliant Stanford dropout whose startup promised to revolutionise the medical industry with a machine that would make blood testing significantly faster and easier. Backed by investors such as Larry Ellison and Tim Draper, Theranos raised funding that valued the company at more than $9bn, putting Holmes’s worth at an estimated $4.7bn. There was just one problem: the technology didn’t work. For years Holmes had been keeping this hidden from her investors and retail partners, firing employees who raised questions and fostering a secretive, febrile atmosphere in the workplace. Written by John Carreyrou, the Pulitzer Prize-winning journalist who first broke the story, Bad Blood tells the full inside story of the breathtaking rise and shocking collapse of Theranos, described as the biggest corporate fraud since Enron.
This book was a deserved winner of the 2018 prize. It is a clear vindication of the value, and importance of investigative journalism. This expose of a company, and mainly one individual, backed by a phalanx of unpleasant and highly paid lawyers and a dubious confounder, was an important piece of work. Without these investigations, and the willingness of brave, and threatened whistle blowers to inform the author of what he needed to find out about it is conceivable that many many more people’s lives could have been at risk. For more years than they should have, Elizabeth Holmes and her misguided supporters bullied, fired and NDA’d current and ex employees into not disclosing how far from the truth her claims were.
When you first begin reading this book you wonder how could she have perperuated this fraud for as long as she did. However they raised a lot of money and influential backers early on. Rather than use all of this to build the product they promised to deliver, instead far more of the money was used to pay agressive lawyers who threatened people, legally and illegally to not disclose or discuss what they had seen. You would hope that eventually Therano’s downfall was inevitable, but right until the end the legal writs kept coming to the author’s media outlet, to cease and desist writing about them, and also smearing his own credentials.
In an era where truth can be shouted down as fake news, it is really important that people back journalists to research, investigate and write books like this one. Rupert Murdoch, interestingly comes out of this OK too, despite having invested $100 million into Holmes’s company, when his own media owned outlet published the story, he did not look to block it, despite her pleadings to do so. Ultimately he sold his investment back to them for $1 and used the loss to offset tax. You might say this was not too difficult a hit for him, but still overall it illustrated that you can only bluff and bluster for so long before you will suffer failure if you are making claims that your tech can not deliver on.
While we enjoyed reading and reviewing all six of the books on this award short list, this book is a suitable and relevant winner.
Winner of the Financial Times and McKinsey & Company 2018 Business Book of the Year Award