Bad Blood: Secrets and Lies in a Silicon Valley Startup

Bad Blood: Secrets and Lies in a Silicon Valley Startup

by John Carreyrou

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NEW YORK TIMES BEST SELLER •  NAMED ONE OF THE BEST BOOKS OF THE YEAR BY: NPR, The New York Times Book Review, Time, Wall Street Journal, Washington Post • The McKinsey Business Book of the Year
The full inside story of the breathtaking rise and shocking collapse of Theranos, the one-time multibillion-dollar biotech startup founded by Elizabeth Holmes—now the subject of the HBO documentary The Inventor—by the prize-winning journalist who first broke the story and pursued it to the end.

“The story is even crazier than I expected, and I found myself unable to put it down once I started. This book has everything: elaborate scams, corporate intrigue, magazine cover stories, ruined family relationships, and the demise of a company once valued at nearly $10 billion.” —Bill Gates

In 2014, Theranos founder and CEO Elizabeth Holmes was widely seen as the female Steve Jobs: a brilliant Stanford dropout whose startup “unicorn” promised to revolutionize 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 sold shares in a fundraising round that valued the company at more than $9 billion, putting Holmes’s worth at an estimated $4.7 billion. There was just one problem: The technology didn’t work.

A riveting story of the biggest corporate fraud since Enron, a tale of ambition and hubris set amid the bold promises of Silicon Valley.

Product Details

ISBN-13: 9781524731663
Publisher: Knopf Doubleday Publishing Group
Publication date: 05/21/2018
Sold by: Random House
Format: NOOK Book
Pages: 352
Sales rank: 2,024
File size: 898 KB

About the Author

JOHN CARREYROU is a two-time Pulitzer Prize-winning investigative reporter at The Wall Street Journal. For his extensive coverage of Theranos, Carreyrou was awarded the George Polk Award for Financial Reporting, the Gerald Loeb Award for Distinguished Business and Financial Journalism in the category of beat reporting, and the Barlett & Steele Silver Award for Investigative Business Journalism. Carreyrou lives in Brooklyn with his wife and three children.

Read an Excerpt


November 17, 2006

Tim Kemp had good news for his team.

The former IBM executive was in charge of bioinformatics at Theranos, a startup with a cutting-edge blood-testing system. The company had just completed its first big live demonstration for a pharmaceutical company. Elizabeth Holmes, Theranos’s twenty-two-year-old founder, had flown to Switzerland and shown off the system’s capabilities to executives at Novartis, the European drug giant.

“Elizabeth called me this morning,” Kemp wrote in an email to his fifteen-person team. “She expressed her thanks and said that, ‘it was perfect!’ She specifically asked me to thank you and let you all know her appreciation. She additionally mentioned that Novartis was so impressed that they have asked for a proposal and have expressed interest in a financial arrangement for a project. We did what we came to do!”

This was a pivotal moment for Theranos. The three-year-old startup had progressed from an ambitious idea Holmes had dreamed up in her Stanford dorm room to an actual product a huge multinational corporation was interested in using.

Word of the demo’s success made its way upstairs to the second floor, where senior executives’ offices were located.

One of those executives was Henry Mosley, Theranos’s chief financial officer. Mosley had joined Theranos eight months earlier, in March 2006. A rumpled dresser with piercing green eyes and a laid-back personality, he was a veteran of Silicon Valley’s technology scene. After growing up in the Washington, D.C. area and getting his MBA at the University of Utah, he’d come out to California in the late 1970s and never left. His first job was at chipmaker Intel, one of the Valley’s pioneers. He’d later gone on to run the finance departments of four different tech companies, taking two of them public. Theranos was far from his first rodeo.

What had drawn Mosley to Theranos was the talent and experience gathered around Elizabeth. She might be young, but she was surrounded by an all-star cast. The chairman of her board was Donald L. Lucas, the venture capitalist who had groomed billionaire software entrepreneur Larry Ellison and helped him take Oracle Corporation public in the mid-1980s. Lucas and Ellison had both put some of their own money into Theranos.

Another board member with a sterling reputation was Channing Robertson, the associate dean of Stanford’s School of Engineering. Robertson was one of the stars of the Stanford faculty. His expert testimony about the addictive properties of cigarettes had forced the tobacco industry to enter into a landmark $6.5 billion settlement with the state of Minnesota in the late 1990s. Based on the few interactions Mosley had had with him, it was clear Robertson thought the world of Elizabeth.

Theranos also had a strong management team. Kemp had spent thirty years at IBM. Diane Parks, Theranos’s chief commercial officer, had twenty-five years of experience at pharmaceutical and biotechnology companies. John Howard, the senior vice president for products, had overseen Panasonic’s chip-making subsidiary. It wasn’t often that you found executives of that caliber at a small startup.

It wasn’t just the board and the executive team that had sold Mosley on Theranos, though. The market it was going after was huge. Pharmaceutical companies spent tens of billions of dollars on clinical trials to test new drugs each year. If Theranos could make itself indispensable to them and capture a fraction of that spending, it could make a killing.

Elizabeth had asked him to put together some financial projections she could show investors. The first set of numbers he’d come up with hadn’t been to her liking, so he’d revised them upward. He was a little uncomfortable with the revised numbers, but he figured they were in the realm of the plausible if the company executed perfectly. Besides, the venture capitalists startups courted for funding knew that startup founders overstated these forecasts. It was part of the game. VCs even had a term for it: the hockey-stick forecast. It showed revenue stagnating for a few years and then magically shooting up in a straight line.

The one thing Mosley wasn’t sure he completely understood was how the Theranos technology worked. When prospective investors came by, he took them to see Shaunak Roy, Theranos’s cofounder. Shaunak had a Ph.D. in chemical engineering. He and Elizabeth had worked together in Robertson’s research lab at Stanford.

Shaunak would prick his finger and milk a few drops of blood from it. Then he would transfer the blood to a white plastic cartridge the size of a credit card. The cartridge would slot into a rectangular box the size of a toaster. The box was called a reader. It extracted a data signal from the cartridge and beamed it wirelessly to a server that analyzed the data and beamed back a result. That was the gist of it.

When Shaunak demonstrated the system to investors, he pointed them to a computer screen that showed the blood flowing through the cartridge inside the reader. Mosley didn’t really grasp the physics or chemistries at play. But that wasn’t his role. He was the finance guy. As long as the system showed a result, he was happy. And it always did.


Elizabeth was back from Switzerland a few days later. She sauntered around with a smile on her face, more evidence that the trip had gone well, Mosley figured. Not that that was unusual. Elizabeth was often upbeat. She had an entrepreneur’s boundless optimism. She liked to use the term “extra-ordinary,” with “extra” written in italics and a hyphen for emphasis, to describe the Theranos mission in her emails to staff. It was a bit over the top, but she seemed sincere and Mosley knew that evangelizing was what successful startup founders did in Silicon Valley. You didn’t change the world by being cynical.

What was odd, though, was that the handful of colleagues who’d accompanied Elizabeth on the trip didn’t seem to share her enthusiasm. Some of them looked outright downcast.

Did someone’s puppy get run over? Mosley wondered half jokingly. He wandered downstairs, where most of the company’s sixty employees sat in clusters of cubicles, and looked for Shaunak. Surely Shaunak would know if there was any problem he hadn’t been told about.

At first, Shaunak professed not to know anything. But Mosley sensed he was holding back and kept pressing him. Shaunak gradually let down his guard and allowed that the Theranos 1.0, as Elizabeth had christened the blood-testing system, didn’t always work. It was kind of a crapshoot, actually, he said. Sometimes you could coax a result from it and sometimes you couldn’t.

This was news to Mosley. He thought the system was reliable. Didn’t it always seem to work when investors came to view it?

Well, there was a reason it always seemed to work, Shaunak said. The image on the computer screen showing the blood flowing through the cartridge and settling into the little wells was real. But you never knew whether you were going to get a result or not. So they’d recorded a result from one of the times it worked. It was that recorded result that was displayed at the end of each demo.

Mosley was stunned. He thought the results were extracted in real time from the blood inside the cartridge. That was certainly what the investors he brought by were led to believe. What Shaunak had just described sounded like a sham. It was OK to be optimistic and aspirational when you pitched investors, but there was a line not to cross. And this, in Mosley’s view, crossed it.

So, what exactly had happened with Novartis? Mosley couldn’t get a straight answer from anyone, but he now suspected some similar sleight of hand. And he was right. One of the two readers Elizabeth took to Switzerland had malfunctioned when they got there. The employees she brought with her had stayed up all night trying to get it to work. To mask the problem during the demo the next morning, Tim Kemp’s team in California had beamed over a fake result.


Mosley had a weekly meeting with Elizabeth scheduled for that afternoon. When he entered her office, he was immediately reminded of her charisma. She had the presence of someone much older than she was. The way she trained her big blue eyes on you without blinking made you feel like the center of the world. It was almost hypnotic. Her voice added to the mesmerizing effect: she spoke in an unusually deep baritone.

Mosley decided to let the meeting run its natural course before bringing up his concerns. Theranos had just closed its third round of funding. By any measure, it was a resounding success: the company had raised another $32 million from investors, on top of the $15 million raised in its first two funding rounds. The most impressive number was its new valuation: one hundred and sixty-five million dollars. There weren’t many three-year-old startups that could say they were worth that much.

One big reason for the rich valuation was the agreements Theranos told investors it had reached with pharmaceutical partners. A slide deck listed six deals with five companies that would generate revenues of $120 million to $300 million over the next eighteen months. It listed another fifteen deals under negotiation. If those came to fruition, revenues could eventually reach $1.5 billion, according to the PowerPoint presentation.

The pharmaceutical companies were going to use Theranos’s blood-testing system to monitor patients’ response to new drugs. The cartridges and readers would be placed in patients’ homes during clinical trials. Patients would prick their fingers several times a day and the readers would beam their blood-test results to the trial’s sponsor. If the results indicated a bad reaction to the drug, the drug’s maker would be able to lower the dosage immediately rather than wait until the end of the trial. This would reduce pharmaceutical companies’ research costs by as much as 30 percent. Or so the slide deck said.

Mosley’s unease with all these claims had grown since that morning’s discovery. For one thing, in his eight months at Theranos, he’d never laid eyes on the pharmaceutical contracts. Every time he inquired about them, he was told they were “under legal review.” More important, he’d agreed to those ambitious revenue forecasts because he thought the Theranos system worked reliably.

If Elizabeth shared any of these misgivings, she showed no signs of it. She was the picture of a relaxed and happy leader. The new valuation, in particular, was a source of great pride. New directors might join the board to reflect the growing roster of investors, she told him.

Mosley saw an opening to broach the trip to Switzerland and the office rumors that something had gone wrong. When he did, Elizabeth admitted that there had been a problem, but she shrugged it off. It would easily be fixed, she said.

Mosley was dubious given what he now knew. He brought up what Shaunak had told him about the investor demos. They should stop doing them if they weren’t completely real, he said. “We’ve been fooling investors. We can’t keep doing that.”

Elizabeth’s expression suddenly changed. Her cheerful demeanor of just moments ago vanished and gave way to a mask of hostility. It was like a switch had been flipped. She leveled a cold stare at her chief financial officer.

“Henry, you’re not a team player,” she said in an icy tone. “I think you should leave right now.”

There was no mistaking what had just happened. Elizabeth wasn’t merely asking him to get out of her office. She was telling him to leave the company—immediately. Mosley had just been fired.

Table of Contents

Author's Note xi

Prologue 3

1 A Purposeful Life 12

2 The Gluebot 26

3 Apple Envy 44

4 Goodbye East Paly 61

5 The Childhood Neighbor 82

6 Sunny 101

7 Dr. J 122

8 The miniLab 144

9 The Wellness Play 165

10 "Who Is LTC Shoemaker?" 181

11 Lighting a Fuisz 199

12 Ian Gibbons 213

13 Chiat\Day 227

14 Going Live 243

15 Unicorn 263

16 The Grandson 278

17 Fame 303

18 The Hippocratic Oath 321

19 The Tip 336

20 The Ambush 362

21 Trade Secrets 376

22 La Mattanza 390

23 Damage Control 403

24 The Empress Has No Clothes 423

Epilogue 443

Acknowledgments 453

Notes 457

Index 503

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Bad Blood: Secrets and Lies in a Silicon Valley Startup 4.5 out of 5 based on 0 ratings. 33 reviews.
Anonymous More than 1 year ago
This book is like watching a horrific train wreck in slow motion (but you cannot look away.) If you enjoy business books like "Den of Thieves", you will love this book! I don't know what is more astounding. The moral bankruptcy of Elizabeth Holmes or her ability to con really smart people. A great read!
Anonymous More than 1 year ago
I work in the medical device industry and was fascinated,shocked, and disappointed in what Ms. Holmes perpetrated. This story reminds me of the value of the FDA and CMS in helping ensure the safety of equipment created and sold to help people does just that. Her treatment of her employees, her board, her customers is criminal, irrespective of what the courts ultimately decide. As a member of the industry I sincerely hope she goes to prison as a representation of what should happen to executives causing that kind of harm to patients.
Anonymous More than 1 year ago
This book and the events that it depicts are fascinating and slightly horrifying at the same time. I spent 38 years as an physician / orthopedic surgeon. One of my best friends was the lab manager in our multi-specialty Clinic. I have given him a copy along with the lab manager at the hospital I was associated with. I am slightly surprised that the author had the courage to write this in face of the ruthlessness of Ms Holmes.
Anonymous 10 months ago
Fascinating main subjects, but the author introduces way too many characters to follow - some of which are unnecessary to the main story. Also, the lengthy and lifeless chronological explanations of facts waxes boring instead of being weaved into an interesting storyline. It’s almost as if this book was rushed to press to beat other books, documentaries, etc. The overall subject makes it worth slogging through, but settle in for as much yawning as page-turning.
Anonymous More than 1 year ago
This book is a thriller. When I had to put it down to pay some attention to normal life duties, I found myself continually wondering what I would discover in the next chapter. This is one amazing - and amazingly written - story.
Anonymous More than 1 year ago
As someone who has created a diagnostic device, Levl, this book makes me feel really good about doing things the right way. Yes, its hard, frusfrating, takes longer and costs more but, you must put helping people above short term profits and greed. Thanks for exposing this and giving us faith in others who were brave enough to step forward!
Anonymous More than 1 year ago
This book was a fascinating read about the myth and lies created by Theranos. Incredibly well written, the pacing was superb. Knowing what we know now, it's like a slow train wreck but you can't look away. I highly recommend this book to anyone interested in the rise and fall into of silicon valley's unicorn startups.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
I really enjoyed this book! Very well written. It tells us how Elizabeth Holmes defrauded investors and how she put millions of patients in danger through faulty blood testing.
Anonymous More than 1 year ago
Great read and amazing saga.
KCK_Blogger More than 1 year ago
This book is captivating. Being a medical technologist who works in a hospital laboratory, I can't fathom the things she was able to do. The depth she would go just to get the funding. The things she was letting her laboratory personnel do and the deceit were unthinkable especially since her company deals with lives. How her company lasted as long as it did was unimaginable. Although, I already know what happened in the end and there were times when she would irritate me, I still can't stop reading the book to the end. If you want to know about Theranos, a Silicon Valley startup, a company poised to change the medical laboratory world, how it started, rise and fall. This is a very good book that will keep you turning the pages. Elizabeth Holmes was a young Stanford dropout with a great vision. She is very charismatic and very well connected. She was able to hire great minds from great schools and recruit people from big companies to come work for her. Not only that, she was able to raise funds in the hundreds of millions from reputable investors. She was on her path to become the next Steve Jobs. People who heard her vision just poured in money after hearing her speeches. She ran her company in deep secrecy and fear. Different departments were not allowed to collaborate. Obviously without teamwork and open communication within the company the goal was not met. If you work in the healthcare laboratory field, you know the vision is just too good to be true. But she was a great speaker who made people believe her even without visible reliable proof of anything. Big kudos to the writer/journalist John Carreyrou and those who helped him get the truth out. Carreyrou did not waver and relentlessly pursue his investigation into the company against all the charming tactics, threats and lawyers Elizabeth Holmes sent his way.
Anonymous 5 months ago
Anonymous 7 months ago
I really enjoyed this book I got it on a whim and it suprised me how it pulled me in until the very end
MaleehaS 10 months ago
This is the most fiction-like work of non-fiction I have ever read. It reads almost like a thriller where you had to keep turning the page to find out what happens next. I will be surprised if I read another non-fiction book as enrapturing as this one for a long while. As someone who has worked in the biotech industry and is currently pursuing graduate studies in biotechnology regulatory affairs, I am astounded by the sheer number of lies, deception, manipulation, and fear tactics that Theranos employed to promote/sell a technology that never worked properly and endangering the lives of thousands of patients. That's corporate greed at its finest. Hats off to John Carreyrou for bravely exposing these monsters and all of the sources who stepped up to do the right thing by taking the issue up with federal regulators. Who knows how much longer this would have gone on without them.
Anonymous 12 months ago
What a book! It will be a classic. So well documented, so honest, so courageous! It is an exposure of how easy it is to con people, even the most sophisticated and experienced ones. One sees how money and power can corrupt and turn people into bullies and thugs. However, there were a lot of good, brave individuals who fought back inspite of threats of firing, lawsuits and bankruptcy.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
I had a hard time putting this book down. A little like Fyre Scientology for the lab business.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
MikeJ More than 1 year ago
Excellent Read! Well researched, well written and reads like a novel. I LOVED this book... Please write more, john!
Anonymous More than 1 year ago
Interesting story.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
I think I read this book faster than any book I’ve ever read. I just couldn’t put it down. Riveting from beginning to end.
FCA More than 1 year ago
wow wow wow wow. If you haven’t read this, do yourself a favor and read it. If you don’t generally read nonfiction, then don’t worry because this reads like a fast-paced thriller. The Theranos story is borderline unbelievable. Once I started I could not put it down--I read it one sitting. Definitely the best part of this book is the writing. John Carreyrou deserves all the awards for how he unfolded the storyline & made what could have been dense legal/science concepts very understandable. I actually think he undersold how illegal half of this was, and he understated how much white privilege played into the “success” of Theranos & the downfall of it. But I don’t want to spoil more, so read this! You won’t regret it.
Anonymous More than 1 year ago
A very well-written account of a couple of 21st-century mountebanks who fooled almost everyone on the way to fame and fortune. It is in a way a cautionary tale of the greed and ambition that may be lurking behind the slick public relations of Silicon Valley.