Reporter John Carreyrou On The 'Bad Blood' Of TheranosElizabeth Holmes, founder of the supposedly revolutionary blood-testing company Theranos, has been indicted for wire fraud and conspiracy. Carreyrou tells the story in his new book Bad Blood.
Reporter John Carreyrou On The 'Bad Blood' Of Theranos
Elizabeth Holmes is — or maybe that should be was — rich, charismatic, and accomplished, the founder and CEO of a company valued at $10 billion dollars that supposedly had developed a device capable of running scores of tests on a tiny, pin-prick drop of blood.
It could have transformed medical care. But earlier this month, Holmes was indicted for wire fraud and conspiracy. The blood test machine her company created doesn't work — and never has. She raised almost a billion dollars from investors, including Rupert Murdoch, Carlos Slim Helú, and the family of Betsy DeVos, and signed contracts with Walgreens and Safeway, by lying to them.
John Carreyrou is the Wall Street Journal reporter who broke the Theranos story. His new book is Bad Blood: Secrets and Lies in a Silicon Valley Startup. He says the big investors Holmes drew in were a combination of ignorant, negligent and foolish. "Walgreens ended up commercializing the technology and offering these faulty blood tests to consumers, not having done its due diligence ... and then the board members and the famous investors, I think, saw that these finger-stick tests were offered in Walgreens stores, and assumed that Walgreens had done its homework."
On the Theranos employees who knew something was wrong
You could argue that a lot of people over the years knew that Elizabeth was behaving unethically and overpromising, and that the technology wasn't working. But actually, eventually the reason this whole scandal broke, and that the truth came out, is that a former employee who had been the lab director was willing to talk to me, starting in February of 2015, and it's really thanks to him that this fraud has been exposed.
On fooling the press
Ironically, the first publication that put Elizabeth Holmes and Theranos on the map was my own newspaper, the Wall Street Journal. She had arranged to be interviewed by an opinion writer ... and that interview took place in August of 2013 and was published right as she went live with the finger-stick tests in Walgreens stores, and unfortunately the writer who wrote that piece, based on the interview, took all her claims at face value. The story that arguably really made her a rock star in Silicon Valley and beyond was the Fortune cover story in June of 2014.
On covering up the failure of Theranos' technology
They kept invoking trade secrets with everyone. You know, you couldn't see the machine, you couldn't really verify the claims, because they were afraid that their secret sauce would leak out and the incumbents in the lab industry, namely Quest and LabCorp, would get their hands on this technology and put Theranos out of business. And unfortunately, a lot of people believed this, you know, running the gamut from board members to journalists to these billionare investors.
On the harms done by Theranos
That's the most egregious part of this scandal, is that she and her boyfriend, Sunny Balwani, who was the number two of the company, knew as they were rolling out the blood testing services in Walgreens stores in California and Arizona that the blood tests were faulty, and yet they still went ahead with the rollout. And there were, I came across personally in my reporting more than a dozen patients who had health scares because they received bad results from Theranos.
On how Holmes fooled so many people
I think ... she capitalized on this yearning there was, in Silicon Valley and beyond, to see a woman break through in this man's world in Silicon Valley. If you look back over the past 30 years, all these tech founders that have gone on to be billionaires and icons were all men. Elizabeth Holmes was going to be that first tech founder who became a billionaire.