Review of Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou

I’ve been watching a lot of Dragons’ Den lately. It’s good TV, and it’s easy to watch bits and pieces of an episode at a time while eating breakfast or taking a break from other tasks. As entertaining and soapy as the show can be, it’s also a disturbing reflection of how capitalism pervades our society. In an episode I recently watched, the Dragons went gaga over a chiropractor peddling a spray that purportedly improved one’s balance and athletic prowess through (get this) quantum entanglement. One of the Dragons went so far as to declare, “I love the product and I strongly believe in science.”

Reader, I was yelling at my TV during this entire pitch. I’m not a quantum physicist, but I know enough about physics to know that any mass-market product based on quantum entanglement is a scam, and I was appalled that five intelligent people were falling for this pitch hook, line, and sinker. It really highlights a significant deficiency in our education system: when it comes to science and critical thinking, we are far too credulous when something merely appears to be scientific. A hundred years ago, it was magnetism and electricity. Now it’s “quantum” woowoo.

Even smart and rich people can fall for a scam, especially if they think they’re too intelligent to be taken in. I kept this in mind as I read this book, which is essentially about the same lesson.

I watched the HBO documentary based on Bad Blood earlier in the year, and finally I picked up this book last weekend. I decided to treat myself and read it right away, being in a somewhat rare mood for a non-fiction read—wow, was that ever the right choice. I read two thirds that night and finished it on Sunday morning. Bad Blood reads like a fiction thriller at times, thanks in part to John Carreyrou’s crystalline writing and in part to the absurdity of the plot. Indeed, if this book were fiction, I suspect readers would pan it for being “unrealistic.” Some of the events that Carreyrou recounts are simply incredible. I was telling my friend Rebecca about it over the phone, describing the highlights and recommending the book to her. As I repeated it, I could feel all the emotions I was feeling while I read the book come back to me.

Bad Blood recounts the meteoric rise and fall of Theranos its founder, Elizabeth Holmes. For the majority of the book, Carreyrou reconstructs events based on documentation and accounts. He chronicles the genesis of Theranos in an idea that Holmes has while attending Stanford, how she drops out and founds the company, convincing lots of old white guys to get on board and fund her. From day one, the company’s vision always exceeds its grasp: Holmes ruthlessly pursues a vision that is untenable and unworkable. The turnover at the company is frequent, and it usually comes with threats of lawsuits if you say anything bad about your former employer. Meanwhile, Holmes and her inner circle pursue deals with giants like Safeway, Walgreens, even the US military—despite never really having anything more than a half-working prototype. This is the story of a con and con artist, of charisma overpowering any iota of sense.

Carreyrou’s careful and methodical depiction could have been dry and boring, but there is an edge to these events that keeps you reading. The hits just keep coming. As soon as you think you have Theranos figured out, they pivot and do something even more outrageous. Although many of us profess a certain jaded cynicism about the world and its checks and balances, or lack thereof, at the end of the day, most of us have an unexamined faith that the systems around us are largely working. Sure, there are a few bad actors here and there. But if the systems didn’t work for the most part, they wouldn’t be systems, right? Bad Blood really challenges that. Theranos and Holmes ride roughshod over every regulatory body that could possibly be involved in their business, and it takes a decade for anyone to really catch on and do anything about it. They didn’t just deceive people—they actually harmed people by providing false or inaccurate medical results at times. And the American regulatory system blithely let it happen.

Bad Blood delivers all the details play-by-play, just like I want from a nonfiction book of this kind. Give me the names, the places, the dates, and the dirty deeds done dirt cheap. I want to know all about the investors who were hoodwinked, the lawyers who lawyered it up, and the employees caught in the crossfire. Holmes is blatantly lying to her partners while she turns around and tells employees to do unethical things to fake lab results? Cool cool cool cool cool. Nothing at all is wrong with this picture.

The last couple of chapters are where Carreyrou himself enters the picture. He describes receiving the tip and contacting the first whistleblower. From there, the story grows in scope and strangeness. Theranos doubles down and goes after Carreyrou, The Wall Street Journal, the former employees—anyone and everyone. Carreyrou recounts some truly bizarre examples of its tactics, such as hiring actors to throw strops in the offices of doctors who had gone on record with him about inaccurate test results from Theranos’ products. As I said near the top of this review, it’s the kind of conspiracy-level action that you would dismiss as implausible if it were part of a regular thriller plot.

It’s easy for us to sit in our armchairs and look at this after the fact and say we would never be duped, of course. It’s fun for us to speculate about whether Holmes is a sociopath, or a pathological liar, or something along those lines. I respect Carreyrou reserving judgment on that for psychologists. I agree with his statement that he thinks Holmes didn’t set out to deceive people at first, but that there’s something missing from her conscience that allowed her to carry on this charade and eventually make it the foundation of her entire empire. Moreover, it’s hard to excuse or dismiss the way in which she manipulated and controlled everything, to the point of arranging to have 99.7% of the voting control of the company. Yeah, that seems fine.

This shit is bananas, y’all. There is literally no other way to express it. This is a glaring example of the failure mode of late stage capitalism: you get a bunch of credulous (white) men with way too much money, dangle a fast-talking salesperson in front of them as she pitches a revolutionary idea, and watch the sparks fly. Carreyrou does a great job of demonstrating how so many people fell for Holmes, partly because of her charisma and partly because so many other respectable people had already bought in to the delusion. No one wants to miss out.

There is a corollary here that Carreyrou kind of mentions but never quite makes explicit. He discusses how it has become common for tech startups to have these overblown, unrealistic valuations and vaporware-like products in the first years of their operation. It’s acceptable to the new generation of venture capitalists. What he doesn’t quite go on to say, although it’s between the lines, is that if we turn to tech startups to save us, we are screwed by this. Because a tech startup that only really cares about increasing its valuation will never actually care about testing ethics, about quality control, etc. “Fail fast, fail often” sounds great if you’re building a web app, not so much if you’re talking about human lives. Yet a significant segment of our society is so enamoured with the glories of the tech boom that they are willing to turn to tech startups for all the solutions.

I think that, on top of the obvious conclusion that you should question charismatic leaders more skeptically, should be a key takeaway from this book. No company, no matter how amazing its dream, deserves our unflinching and unwavering support. There is no excuse for a boss turning a company into a religion. And we owe it to people to take a hard look at the regulatory systems that allow these companies to exist. Bad Blood is a compelling cautionary tale, and I can only hope that we listen.