Monday, 6 May 2019


I’ve been reading “Bad Blood: Secrets and Lies of a Silicon Valley Start-Up” about a company that promised to become enormous. Founded in 2003 it raised $900 million from funders,and at its peak in 2013 was valued at $10 billion yet in 2018 was worth nothing. Such things have happened before – the South Sea Bubble 1711, the Florida Property Boom 1926, Enron 2007 – but this scandal had a particular frisson.

Its founder, a 19 year old college dropout called Elizabeth Holmes, modelled herself on Steve Jobs. She set out to create a method of testing blood by taking very small amounts extracted by a painless prick in the thumb. The test machines were intended to be compact like a large laptop. Her dream was eventually to transform diagnostic medicine by having these machines in homes. She had a dream.

She was clearly a charismatic sales person as the funders included Rupert Murdoch putting in $150 million; her board included Henry Kissinger and Fortune Magazine said: “With three former cabinet secretaries, two former senators, and retired military brass, it’s a board like no other.” 

The problem was the blood testing never worked properly and the machinery to do the tests was only ever in laboratory prototype form. Somehow Elizabeth managed to persuade a lot of smart people including Larry Ellison the founder and Chairman of Oracle that she was a genius and, like Jobs was going to change the world. She managed to get distribution of Theranos “blood-testing machines” into Walgreen and Safeway.

It’s not a very pretty story. Elizabeth and her CEO and lover (as it transpired) Sunny Balwani, ruled the company with a mediaeval level of terror. The place was full of ex-government heavyweight security guards. Key staff were fired on a regular basis for any minor offence like asking awkward questions and ex-employees were terrorised by the rottweiler law firm Boies, Schiller & Flexner. This was not a place to work however good the remuneration. It’s a story of self-delusion and a single woman’s ambition to achieve the seemingly impossible whatever it took and whoever was destroyed en route.
Or is it? Carreyrou’s book is a prosecution case and a comprehensive indictment but there’s something missing for me. I’m not convinced that Elizabeth was a fraudster. I think she had an idea, pursued it rigorously and by dint of her personality enrolled an unlikely bunch of eminent advisors who fell for her charisma and saw what they wanted to see – the next Steve Jobs and this time a woman. And their admiration drove her on to believe in the infallibility of her idea and herself.

She’s obviously a genius at creative communication and a salesperson who deserves better than being burnt at the stake of moral outrage. She had an idea that everyone wanted and she got everything right:  packaging, advertising and media coverage.

Only one thing was missing. A reliable product that actually worked.

And that was just bloody silly.

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