I was completely consumed by a recent book “Bad Blood: Secrets and Lies in Silicon Valley” by John Carreyrou, an investigative journalist who uncovers the hidden truths behind one of the biggest health care scams in modern history.
The book touches on some important ethical issues and paints a disturbing picture of innovation in a modern technology company called Theranos. The saga of the company will be familiar to anyone who follows the technology news. What you get from the book, however, is the backstage entrance to all the drama that happened. And trust me on that, there are plenty of events and juicy details to make you gasp with disbelief.
Carreyrou wrote a real page-turner. It reads better than fiction but is grounded solidly in reality. While reading it, I continually checked the main characters on the Internet to see how closely my imagination matched their real personas. Feelings of incredulity, anger, and sadness kept me glued to the pages until the very end when I experienced an Aristotelian catharsis.
From the very first chapter, I was immediately captivated by the character of Elizabeth Holmes, a young drop-out from Stanford University who decided to pursue a grand vision. The vision of a device that could perform a multitude of blood tests for different conditions based only on a small sample from a fingertip.
The premise of the device appealed to me since it had a potential to revolutionise the industry by shortening wait times for various blood tests from weeks to hours and costs from heaps of money to a few hundred dollars. No wonder Elizabeth found willing investors and managed to grow Theranos at a dazzling speed. The company quickly reached a valuation exceeding $9 billion dollars making Elizabeth one of the youngest and wealthiest female entrepreneurs yet.
However, my initial admiration for Elizabeth was quickly dispelled by the author. Carreyrou chapter by chapter reveals more disturbing behaviours from the visionary that make your jaw drop with incredulity. The incredibly high valuation of Theranos starts to feel like Pyrrhic victory. The reader’s discomfort is further intensified by the numerous details of the company’s deceptions. The most important of them - the device itself. The first iteration is just a robotic arm inside a box that was previously used in factories to help mix colours in paints. Hardly the innovation the world awaits!
Theranos bubble burst when the Wall Street Journal published an article written by Carreyrou himself, in which he revealed the naked truth about the company’s bold claims. The article triggered a domino effect of unbelievable events, most of which wouldn’t have looked out of place in an espionage fiction thriller, ultimately leading to Theranos demise. This was by far the most intriguing part. The company shut down in August last year, with Elizabeth and her business partner facing multiple fraud charges for which they will be lucky to escape prison time.
The health industry grows at an amazing pace but we rarely get to know what happens behind the curtains. We blindly believe in health care companies and trust that they have our best interests at heart. However, this book quickly taught me some harsh truths and dampened my enthusiasm for medical innovation.
Theranos performed only a limited set of blood tests, despite claiming the capability to perform many more. But even the tests that could be done produced highly unreliable results due to too small blood sample size. The success rate of correct diagnosis was very low. Carreyrou explains the risk:
A false positive might cause a patient to have an unnecessary medical procedure. But a false negative was worse: a patient with a serious condition that went undiagnosed could die.
There is a fine line between promising a product that will revolutionise, for example, the way it measures your body functions and a device that analyses blood for medical procedures. Wrong results from a device that measures how many steps you take during a day or how long you sleep won’t put you at risk. But a medical device that is used to decide a serious treatment or life-saving operation may do so. Misdiagnosis can have serious consequences and put patients at risk of death.
The author presents Elizabeth as uncompromising, determined and a visionary. A mixture of values that she takes to an extreme. She mimics her clothing and leadership style on Steve Jobs and demands cult-like devotion from her employees. Carreyrou writes:
Like her idol Steve Jobs, she emitted a reality distortion field that forced people to momentarily suspend disbelief.
It became painfully clear to me that more than changing the world and saving lives, Elizabeth craved the limelight and media attention. She appeared on the covers of Fortune, New Yorker and Forbes magazines wearing a black turtleneck and holding ‘nanotainer’, a pill-sized container with a sample of blood inside. She also gave presentations such as a TED talk during which she tells a story of her uncle that died of cancer and how it impacted her as a human to give creed to her vision. The actual human bond between them never existed and the story was fabricated.
All this made me wonder what it would be like to work in Theranos and experience all the deceptions and manipulations. How would I feel about Elizabeth as a charismatic but self-serving leader who would use anything and anybody to reach her goal? Would I have the courage to stand up or just coil in my chair and work obediently?
Whether Elizabeth is a classic case of a psychopath at work, I don’t know. But what I know for sure is that I wouldn’t want to cross her path.
Given the size of pharmaceutical and biotech industries, it is inevitable that we’re going to see products invented by con artists and Ponzi schemers. They will stop at nothing and provide bold statements about the future. The health industry seems especially ripe for the 'innovation’. Everyone wishes to live longer and look younger. These are strong desires that can be easily exploited. Only due-diligence and familiarity with the subject matter can safeguard against malevolent entrepreneurs.
“Bad Blood” is an electrifying read about technological innovation and full of cliffhangers at the end of each chapter. It is also a powerful study of human psychology. The book throws all its characters into a pressure cooker of unbelievable events. Learning about Elizabeth, a modern-day vampire that tries to suck blood from investors and feed on the loved ones will make you question human nature, the notion of leadership and ponder ethical issues involved in running a technology company.