As It Happens

Book documents the rise and fall of Silicon Valley wunderkind Elizabeth Holmes

Elizabeth Holmes was heralded as the next Steve Jobs — and then she was revealed by the Wall Street Journal to have overseen one of the biggest corporate frauds since Enron.

In Bad Blood, John Carreyrou shows how blood test company Theranos silenced its critics and covered its tracks

Elizabeth Holmes, former CEO of Theranos, attends a panel discussion during the Clinton Global Initiative's annual meeting in September 2015, sporting a Steve Jobs-inspired turtleneck. (Brendan McDermid/Reuters)

This article was originally published on May 21, 2018. Holmes has since pleaded not guilty to defrauding Theranos investors. Jury selection in her trial began on Tuesday. Read more about the case on CBC News

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A new book by Wall Street Journal reporter John Carreyrou documents one of the most stunning falls from favour Silicon Valley has ever seen. 

Elizabeth Holmes rose to fame after her company, Theranos, claimed to have invented a portable device that could cheaply run a full range of lab tests with just a drop of blood from a pin-prick.

Theranos, was once valued at more than $11 billion and attracted big name investors. As CEO, she graced the covers of magazines like Forbes and Glamour. 

But her supposedly groundbreaking technology didn't work as promised — and she went to great lengths to keep that information from investors, regulators and the media. 

She has since settled with the U.S. Securities and Exchange Commission on charges of massive fraud. ​


Carreyrou broke the Theranos story for the Wall Street Journal, and now he's written a book called Bad Blood: Secrets and Lies in a Silicon Valley.

He spoke to As It Happens host Carol Off about it. Here is an excerpt from that conversation. 

Who is [Elizabeth Holmes]?

Now she's about 34 years old. At the time, when she dropped out of Stanford, she was 19. 

She had no training to speak of in medicine or really in science, but she was very ambitious from an early age. She wanted to be a successful entrepreneur.

She idolized Steve Jobs, and by sheer force of will and hard work, she convinced a lot of people to fund her, and over the years developed three iterations of a Theranos blood testing device.

By the time she rolled out her blood tests commercially in Walgreens stores in the fall of 2013, she was now 30 years old and she became an instant star.

She had managed to keep half or more of the shares of her company, so that effectively gave her a net worth $4.5 billion [US] and made her the world's youngest female self-made billionaire.

Wall Street Journal reporter John Carreyrou has written a book about the Theranos saga called Bad Blood: Secrets and Lies in a Silicon Valley Startup. (Michael Lionstar, Penguin Random House)

She modelled herself on Steve Jobs, as you mentioned. How did she do that?

She started wearing a black turtleneck around 2006. Of course, that was the trademark outfit that Steve Jobs made famous.

She also liked to drive around in a car without license plates, which is something that Steve Jobs also did.

She implemented at Theranos a culture of absolute secrecy and that was also in part because it's something that Apple was famous for.

The mythology of Steve Jobs of Apple really was there throughout her 12-year rise and it really was an obsession.

You begin with an anecdote about the company's one-time chief financial officer Henry Mosley. What did he discover about the early Theranos system that began to tweak his curiosity and his concerns?

He started getting a sense that a demonstration that Elizabeth had given to Novartis, the giant Swiss drug maker, in Switzerland had not gone well because employees who had accompanied Elizabeth on the demo looked outright downcast when they got back to Palo Alto.

Elizabeth Holmes' co-founder ... Shaunak Roy ... came clean to the CFO that, actually, the demos weren't entirely real, that the result that they showed prospective investors who came by for the demos were prerecorded because the system didn't always work and, in fact, often malfunctioned.

He confronted Elizabeth that day in her office. ... At that point she she turned icy and told him that he was not a team player and fired him on the spot.

Holmes accepts the Under 30 Doers Award during the Forbes Under 30 Summit on Oct. 5, 2015. (Gilbert Carrasquillo/Getty Images)

What did you hear from other employees about what their suspicions were and why they didn't raise the alarm?

Elizabeth fired people all the time. You also had along the way quite a few people who left because they had qualms.

The problem was that Theranos made everyone sign non-disclosure agreements and there was an unspoken and sometimes even spoken threat of litigation if anyone spoke up.

Carreyrou speaks at the Wall Street Journal's The Future of Everything Festival at Spring Studios on May 10 in New York City. (Michael Loccisano/Getty Images)

Despite the people who were had doubts and were concerned, this company kept on. Though the technology was certainly not up to snuff, it managed to partner with the U.S. drugstore chain Walgreens. What was the deal?

The idea was they were going to do a pilot launch first in about 45 stores, a couple in California and then the rest in the Phoenix area.

And then they were going to expand Theranos' finger stick blood testing services to all of Walgreens' stores, which meant expanding to more than 8,000 stores through the U.S.

Walgreens customers would go in and get their fingers pricked and then get results supposedly within a half hour.

And did it work for anybody?

Behind the scenes what was actually happening is Theranos was using one of its devices, the Edison, which was the second to last iteration of its technology, for only a few finger stick tests, between a half dozen and a dozen.

The rest of the more than 240 blood tests on its menus were actually performed on modified Siemens machines. So Siemens machines were hacked by Theranos employees and modified so that they could accommodate tiny finger stick samples.

They did that mostly by diluting the blood samples to create more volume so that the Siemens machines could accommodate those samples. 

This resulted in inaccurate results. And the results that were obtained from the Edison ... were also inaccurate because those machines were unreliable. 

In the end, Theranos had to void or correct almost a million blood test results in Arizona and California.

Were people harmed by this? 

It's really difficult to measure the harm, but I certainly came across more than a dozen instances of patients who got questionable test results back from Theranos and had health scares or had unnecessary medical treatments.

NBC News anchor Maria Shriver, left, speaks to Holmes onstage during the Vanity Fair New Establishment Summit in October 2015. (Mike Windle/Getty Images for Vanity Fair)

How did Theranos react when they knew that you were questioning the system and what they were selling?

It was made very clear to us that if we proceeded with this story we would be sued.

Theranos was able to figure out who some of my sources were ... and went and threatened those sources.

Elizabeth Holmes has said ... she was "devastated" by deficiencies in her lab, and she has settled with the Securities and Exchange Commission in the U.S. on charges of overseeing massive fraud. But has Elizabeth Holmes ever admitted she did anything wrong?

She didn't admit to having done anything wrong and she never apologized to the patients that she put in harm's way or to investors, for that matter.

What did you learn about the culture of Silicon Valley in the course of the investigation?

There's a lot of innovation, for sure, going on in Silicon Valley, but there's also a lot of pretending. 

Theranos was a story of fraud, fraud but also of hubris and arrogance.

Her idol was Steve Jobs and she shared with Steve Jobs this trait, which was that she had a reality distortion field.

She's able to cast a spell on people and to really get them excited and enamoured with the vision that she's articulating to the point where they forget to ask, you know, are you really able to do this?

Written by Sheena Goodyear. Interview produced by Imogen Birchard. This Q&A was edited for length and clarity. 



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