Bad Blood by John Carreyrou is a recommended reading here at Wall Street Financier. It is quite possibly the best business book of 2018.
The foundation of deep thinking and great investigative journalism is skepticism. Carreyrou asked himself the common sense question of how was it possible that a college dropout who completed two semesters of chemical engineering “pioneered cutting-edge new science”. Why the Board of Directors of that company [Theranos], high-ranking, prominent individuals, never asked themselves this elementary question… is itself a good question. Older, powerful men, were blinded to the sight of a dedicated young woman so much, as to give her a free pass to glory and wealth. The snowball effect was in full rage in 2014 when Holmes got more titles and accolades that a Zimbabwean general. What possessed these older, prominent men to overlook their most basic responsibilities? The answer: their simpish, bluepill fantasy of the “daughter [or granddaughter] that I’ve never had.” Pay it forward, bluepillers.
We’re talking about Elizabeth Holmes here, who as a nine or ten year old child when asked “What do you wanna be when you grow up?” said she wanted to be a billionaire. Imagine that. Most children say they want to be a firefighter, nurse, doctor, teacher, etc. But not this one.
When we get the replay of what it was like to be working at Theranos under Commander-in-Chief Holmes, I think you should all take a look if your current workplace resembles it. At Theranos, employees had to sign non-disclosure agreements, and get this: when fired…Alan Beam had to sign an “Affidavit of Alan Beam” which stated:
“…under penalty of perjury that he promised to never disclosed any proprietary information…including this line: I do not have any electronic or hard copy information relating to Theranos in my possession in any location including personal email accounts, any personal laptops or desktops, trash or deleted files, USB drives, home,car, or any other location.”
Even visitors had to sign NDAs just to be allowed into the building. Once inside, guards escorted them everywhere, even to the bathroom. Of courses, parts of the building were off-limits to visitors at all times. Hospitality Silicon Valley-style!
Elizabeth Holmes built a religion all-right. The misstatements over the company’s marketing and financial projections were outrageous, and hedge funds bought into that pile of garbage furiously. [see Partners Fund Feb 4, 2014 $96 MM investment].
People “are blinded by a prestigious Board”. The blind put on horse blinders to see better.
When the Board had they’re meetings…”employees were instructed to appear busy and not to make eye contact with the board members when they walked through the office.”
There are the many battles Theranos won before its undoing, such as the capitulation of Richard Fuisz, a former CIA agent over his patent, and the suicide of Theranos’s chief scientist, Ian Gibbons, on the wake of his testimony against Theranos.
How possessive and vengeful was Holmes of people? What if you had a side project of your own, unrelated to your work at the company? God-forbid that! The chief architect of the miniLab, a guy by the name of Kent, had a bicycle lights project of his own. Not good. That was…perceived disloyalty to the party.
What was the “Female Steve Jobs“, as Holmes was known just a couple of years ago, good at? Well..she was good at firing people. The accounts of those firings in the book are outrageous.
Wanna get big? You do that by spending a lot of money on advertising and litigation. That’s how you grow your company. That’s how you become a unicorn. [Theranos was spending $6 MM a year on ChiatDay the advertising agency].
A lot of people will say Holmes was subdued or influenced by Sunny Balwani, but that bird ain’t going to fly. Holmes was the type of person who would offer someone a position recently vacated…if the person would go through his former colleague files and emails [Ed Ruiz’s case]. That’s called perspicacity.
I read Bad Blood also. My deepest recollection was how Holmes used Tyler Schultz's family, his grandfather, the venerable George Schultz to deliver her message and send lawyers to his house.
I enjoyed reading Bad Blood also. Especially la mattanza analogy.
Read the book also. Did you know they're making it into a movie?
In Chapter 6, Sunny throws out of the building a guy who came in with his resignation letter. I wonder how you would approach that.