Book Review: Bad Blood

John Carreyrou‘s Bad Blood outlines the story of fraud and deception at Theranos, the Silicon Valley company claiming to revolutionize the medical industry with its blood-testing technology. Theranos, as Carreyrou meticulously explains, was a grand vision wrapped up in a web of blatant lies and oppressive management. The company continued to deceive its investors and partners for over a decade, with the help of top lawyers, powerful connections and a highly effective sales pitch driven by its founder and CEO Elizabeth Holmes. Holmes and her boyfriend / COO Ramesh “Sunny” Balwani created an organization where physics could not be allowed to get in the way of what they desired, and the only executives permitted to thrive were sycophants that agreed to play along with their charade.

Carreyrou’s tale, despite being the work of an investigative journalist, feels like an insider’s account. His numerous interviews with courageous former employees were undoubtedly responsible for the story’s personal touch. Today, both Holmes and Balwani are being investigated by Federal authorities and Theranos is defunct. But Carreyrou’s book reads like a nail-biting suspense – or would have, if we hadn’t already known the ending.

Bad Blood leaves us with several questions to chew on. How could our society be so broken that a fraudulent company with little substance could be permitted to thrive – reaching a net worth of $9 billion – without anyone raising alarm bells? Perhaps this simply goes to show that many, if not most of us, are susceptible to groupthink, willing to take manufactured points of view for granted as long as others are willing to stand by them – a troubling idea. Even more troubling is the role of the lawyers in the fiasco – the reality is that the law is not on the side of truth and justice, but on the side of whoever has the most money.

2 thoughts on “Book Review: Bad Blood”

  1. What I want to know is how a sophisticated crook finds enough like minded and equally sophisticated people who are willing to accept the idea of fraud on a large scale and have no compunction about profiting from it, to the extent that they are seen as highly successful individuals whom the rest of us hold in awe, until they are unmasked.

  2. The road to hell is paved with good intentions.

    First, you start with a powerful mission – to solve a hard problem and bring extremely convenient blood-testing to the masses.

    You couple this with ambition and a poor moral compass, and all of a sudden you have an ends-justify-the-means mentality where you are willing to dupe people in the short term if that means you will change the world in the long term.

    The people who join the company and sign on are cogs in the machine. From the outside, it seems like a great opportunity – there is merit to the idea and plausibility hidden behind trade secrets. Once you jump onboard, it takes time to figure out that the machine is not delivering on its promise (but this is still difficult to judge – most people don’t have all the facts and it is easy to create a secretive environment where one team can barely talk to another freely). For those who figure it out, they have an ethical and moral choice – continue until the machine falls apart, leave quietly or leave but report the fraud. Some people take the first option because they don’t have a choice, need the money or find it too hard to change their lives easily. Many of the others want to take the last option but it is extremely hard to do that, if you are afraid the consequence is facing the vengeance of a powerful company with fancy legal resources working for them. Plus, who would believe them when the CEO of the company is on the Forbes list and Time magazine, and you are one voice of a disgruntled employee? The odds for any such individual are highly in favor of getting beaten in court and becoming bankrupt, their reputations dragged in the mud.

    The Board of this company was stuffed with powerful people who had great reputations and poor judgement, not because they knew anything about blood-testing, but because they had been bought over by Holmes’ charm in selling the idea (not the result).

    One guy, Tyler Shultz couldn’t convince his grandfather, with evidence, on the Board – George Shultz (look up this guy’s credentials) – after having worked there and realizing the whole thing was a sham.

    So you just wait until things take their course and the evil implodes, hoping for the best.

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