About two months ago, all news media talked about the Theranos scandal, where the once unicorn startup had to shut down and liquidated because its founder, Elizabeth Holmes was indicted for wire fraud and conspiracy. Theranos was a health technology company that tried to “disrupt” the health care industry by designing a blood test device that used only a small amount of blood. This failure challenged many promises that Silicon Valley tech startups have been making all along: technology can solve many things fast. It raised many questions about Sillicon’s fake-it-till-you-make it and play-fast-and-loose culture. A couple of weeks ago while I was attempting to learn about AI technology, and its social, political implications. A social scientist mentioned to me that she was listening to an audiobook, whose name is Bad Blood to get a more nuanced understanding of the scandal. The book piqued my interest. I immediately requested it, gave it a read, and now feel that I have a better understanding of how Silicon Valley works.
What is Bad Blood about?
Originally, I thought that the nonfiction followed a traditional path of an investigative journalistic work where it would ask the questions such as who is Elizabeth Holmes, how did she come up with her startup idea, how did she make it a unicorn, why and how did it fail? In a lot of ways, it is a case study of how Silicon Valley created one of the sickest unicorn that was meddling with the health care industry. In a closer read, I found that my original thought was naïve. The book is more than just how Elizabeth Holmes rose to stardom and descended rapidly. It is a detective work where the author himself was involved in bringing down a tech darling from her unrealistic dream by exposing her lies and delusions. The book portrayed Elizabeth Holmes to be the charming, intelligent female antagonist, and the journalist at the WSJ, John Carreyrou, the author of the book to be the male protagonist, the detective who did not appear until very late in the story. Yet his journalistic instinct helped him paint an accurate picture of Theranos, its embarrassingly mediocre technology, sloppy management, and delusional culture of Silicon Valley. The shift in narrative from Elizabeth Holmes and people around her to how the journalist put the case together made the story much more convincing.
The female villain of the book is Elizabeth Holmes, the charming blond startup founder of Theranos. She dropped out of Stanford University in 2003 to found a company that promised to test blood with a small device that could perform an array of blood tests using only one drop of blood. This promise was tempting to many investors, and corporate partners including a large swath of respectable venture capitalists, Wal-Greens, and at some point even the United States Defense Department. The book structured chronologically. In many ways it is a biography of a company. It has less to do with Elizabeth Holmes even though she’s a big part of it, who gave shape, form, and contour, and character to her startup. Therefore a significant amount of space in the book is dedicated to the complex character of Elizabeth Holmes. The underlying question around Holmes is why did shecreate what she created and why did she lie the way she lied to everyone?
In the process to answer this question, the author portrays other characters around her, and use the words of these characters to portray Holmes. He is like a sculpturist who creates contours and dimension to each character, and also shows the nature of relationship between different characters. What is the most striking feature of this person? How can one bring to the reader’s mind a 3-D portrayal of this character in this story? He paints a picture of Elizabeth to be a horrible person, yet she’s very smart. She’s ruthless, controlling. Here’s Holmes from an ex-employee, a friend’s point of view, how Elizabeth was getting bad influence from her boyfriend:
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 (her boyfriend). How could her friend [Elizabeth] not see that? (p.80)
Why did Theranos fail? The company was glutted with sloppy corporate governance, bad management, and despotism. Holmes hired her college roommate, boyfriend, and her incompetent brother to work as her closest people. She valued loyalty more than competency, and expertise. That’s not a way to go for a high-tech company. She might have over compensate because she’s young and tried to assert her authority over her well-trained brilliant employees. Her smartness could not really cover for her lack of training in the medical field. This insecurity manifested in making each department a silo. It translated in her obsession with leaking trade secrets out by surveilling her employees.
She had a vision that she genuinely believed in and threw herself into realizing. But in her all-consuming quest to be the second coming of Steve Jobs amid the gold rush of the “unicorn” boom, there came a point when she stopped listening to sound advice and began to cut corners. Her ambition was voracious and it brooked no interference. If there was a collateral damage on her way to riches and fame, so be it (p. 299).
The book really made the character Elizabeth Holmes appear like some body that one could spot in street of Silicon Valley. She was loved by the press. She was the woman engineer that everybody wanted to have in the male-dominated world of the tech industry. On her rise to stardom, the author writes:
Her journal interview had gotten some notice and there had also been a piece in Wired, but there was nothing like a magazine cover to grab people’s attention. Especially when that cover featured an attractive young woman wearing a black turtleneck, dark mascara around her piercing blue eyes, and bright red lipstick next to the catchy headline “THIS CEO IS OUT FOR BLOOD” (p. 208).
John Carreyrou was not afraid to criticize the press, including his own employer, the Wall Street Journal for having buy into Holmes’s promises early, and brought her from the periphery to the center of national attention. This increasing publicity helped her raise money, and bring political and elite powerful people closer to her. Her company got valued a lot higher because of all those PR articles. This story makes clear the process, whereby a startup gets more funding via its inflated images portrayed by the presses. Then the press would give it even more attention for its successful rounds of funding. The startup is then swelling with funding, and flowery media images of itself. It’s a vicious circle.
One great thing about the book is that the author makes chemical and engineering processes read-able to the wider audience. What is high-tech is suddenly within grasp. For example, when talking about how a commercial blood analyzer might introduce errors, Carreyrou writes:
Alan had reservations about the dilution part. The Siemens analyzer already diluted blood samples when it performed its assays. The protocol Daniel and Sam had come up with meant that the blood would be diluted twice, once before it went into the machine and a second time inside it. Any lab director worth his salt knew that the more you tampered with a blood sample, the more room you introduced for error. 170
My favorite aspect of the book is its language: very matter-of-factly. There is no over flowery language. Everything is straight to the point. It is a long form of investigative journalism. It’s about the truth. There are great sentences for sure, but these great and stylistic sentences are not the main focus of the book. Now I understand my obsession with non-fictions when I was a teenager. When my English was not great, I preferred reading for information, and that I didnt have to guess what each symbolism meant.
Even though Carreyrou writes with a matter-of-factly tone, his superb writing skill really makes the book read like a movie. Each chapter rolls like a movie sequence. He zooms his camera at some characters, their stories, and then zooms out, and re-introduces them again later. Every character is presented to show the progression of the rise and downfall of Theranos. The book also reads like an urgent detective work. The sense of urgency is seeping throughout the book. Sometimes, it feels like one is watching a thriller movie.
As a sociologist, I must say that the book is very sociological. The author paints a complex social network around Holmes, and how it influences Holmes’s decision making process. Theranos’s downfall is a social failure, not necessarily just the failure of a female startup founder. Carreyrou argues that it’s the fake-it-till-you-make it culture in Silicon Valley that contributed to this failure. Theranos was engaging in practices what other tech giants was doing with their products. For example, Apple, MS, and Oracle were accused of “vaporware,” a term to describe:
A new computer software or hardware that was announced with great fanfare only to take years to materialize, if it did at all. It was a reflection of the computer industry’s tendency to play it fast and loose when it came to marketing… Such over promising became a defining feature of Silicon Valley. The harm done to consumers was minor, measured in frustration and deflated expectations (p.296).
Holmes was just following the footsteps of those who she admired:
By positioning Theranos as a tech company in the heart of the Valley, Holmes channeled this fake-it-until-you-make-it culture, and she went to extreme lengths to hide the fakery (p. 296).
However, she’s wrong. She’s working in the intersection between the tech industry, and the healthcare industry, where no “vaporware” is tolerated because it messes with human life. Computers and human beings are not the same. Legislation is still trying to catch up with computers, but human kind has had thousands of years dealing with illnesses. Life is invaluable, not disposable like an Apple computer.
When I first read Chapter 19: The Tip, I thought well it looked like an Appendix in a sociological monograph, the end was coming. However, I was wrong. Instead, the chapter was the plot twist. And the I-character entered the story out. Carreyrou started narrating how he became involved in the project to bring down the unicorn. From then the story shifted to how the WSJ published important investigative articles that showed the truth. This in effect alarmed regulators. They made regulators aware of all the wrongdoings that Theranos. This is where the hero, the protagonist of the book was introduced.
While the book does a great job at telling the story of Theranos, and how journalists can work with regulators, and public policy makers to bring to light harmful practices, its main focus on Theranos, Elizabeth Holmes leaves many questions unanswered. For one, what is the fate of various early skeptics of Theranos? For example, the Fuisz’s, who was sued by Theranos early on because of a patent. Theranos really destroyed their family wealth in an expensive legal battle. John Fuisz left his law firm because of reputational damage caused by Elizabeth Holmes’s accusations. Carreyrou seems to leave them out of the picture all together when his mission is accomplished: to reveal Holmes’s ruthless character. It seems that the author deploys lawyer’s practice: to discredit the character of the defendant by showing the court how she has been treating people really badly all along.Yet, what others think, feel after Theranos was liquidated is not at all discussed. The battle is won. There’s no point of following up with other witnesses.
Dropping characters aside, why did Theranos failed? It’s the delusion and bad practices of Theranos, the author asserts:
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. But it’s crucial to bear in mind that Theranos wasn’t a tech company in the traditional sense. It was first and foremost a health-care company. Its product wasn’t software but a medical device that analyzed people’s blood. As Holmes herself liked to point out in media interviews and public appearances at the height of her fame, doctors base 70 percent of their treatment decisions on lab results. They rely on lab equipment to work as advertised. Otherwise, patient health is jeopardized (p.297).
However, is this failure solely Holme’s responsibility? As a sociologist I see it to be the problem of the tech industry when it tries to disrupt a more established industry: healthcare, where a patent’s life is at risk. This is a more systematic failure of the Silicon culture, and business practices. The line between faking it and lying about it is oftentimes blurred. All companies exploit legal loopholes to disrupt various industries. Holmes lived within the Silicon Valley universe, and had exercise her agency as what she was supposed to do. She was just following the herd, but she picked the wrong battle. The healthcare industry is not the same as the taxi industry or mass media. One can lie about a hardware that has not existed, but one cannot lie about how a technology will not harm a patient.
My take-away after reading the book is that running a startup or any business is like running a marathon, not a sprint. One cannot force the race to be faster. It is a long training process where prior preparation is required to ensure a successful race. Another insight that I learned is that the quest to accelerate automation could bring potential harmful effects. Of course, automation can help with production, and various aspects of life. In healthcare, one must admit that human workers, particularly doctors, and lab technicians are magically accurate because their long-time training. They have hunches, and intuition which a machine does not have. Yes, humans make mistakes, but they also work wonder.