allegedly decided to cheat. They told lab technicians to dilute the incoming finger-stick samples, or just gather regular phlebotomy tubes, so that most of the tests could be carried out on commercial analyzers purchased from companies like Siemens. By 2015, all but a dozen of the 240 tests on the Theranos menu were being performed on these commercial analyzers—which was just as well, in a way, since the handful of tests performed on Theranos machines were wildly unreliable.
The façade began to crumble after Carreyrou persuaded several former employees, including George Shultz’s grandson Tyler Shultz, to share their stories. The Journal published a series of exposés by Carreyrou beginning in October 2015. Within months, Walgreens had shut down its wellness centers and the government had banned Theranos from the lab business. In 2018 Holmes settled fraud charges brought by the Securities and Exchange Commission. She and Balwani deny any wrongdoing, and are awaiting criminal trial.
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IN HIS BOOK, CARREYROU TACKLES THE THERANOS SAGA IN A METICULOUS, chronological, but fast-moving and readable form. As a writer, he’s blunt but dispassionate—an admirable trick, given that he’s also a character in the story. (Carreyrou endured months of surveillance by a Theranos-employed PI.) The book is unsparing in its depiction of the fakery, compartmentalization, bullying, and even blackmail that Holmes and Balwani employed to defend their hollow empire. But it’s also remarkably restrained, letting the facts speak for themselves and eschewing psychological speculation. Carreyrou doesn’t try to get inside Holmes’s head until the very last paragraph:
“I’m fairly certain she didn’t initially set out to defraud investors and put patients in harm’s way when she dropped out of Stanford fifteen years ago. By all accounts, she had a vision that she genuinely believed in and threw herself into realizing. But in her all-consuming quest to be the second coming of Steve Jobs amid the gold rush of the “unicorn” boom, there came a point when she stopped listening to sound advice and began to cut corners.”
Because Carreyrou isn’t out to demonize Holmes, there’s room in the book to ask what went wrong. The truth seems to be that Holmes neither sought nor received much “sound advice.” After investors with experience in medical diagnostics turned her away, she avoided or evaded smart money that could have helped reset the company’s ambitions. The funding came in, instead, through a pyramid of personal, family, and Stanford connections.
Holmes’s link to Tim Draper, for example, was his daughter Jesse, who’d been Elizabeth’s childhood friend and next-door neighbor in Woodside, CA. She recruited legendary Silicon Valley investor Don Lucas through her father, who went to school at Wesleyan with a banking executive who knew Lucas. Lucas, who’d mentored Larry Ellison and was in his late seventies when he agreed to invest and chair Theranos’s board, “doted on Elizabeth” and treated her like a granddaughter, Carreyrou writes.
The Hoover Institution, a Republican think tank at Stanford, was another hotbed for recruitment. George Shultz joined the board after meeting Holmes in 2011. He, in turn, brought in Kissinger, another Hoover fellow. These lions of diplomacy who’d faced down presidents and dictators—“men with sterling, larger-than-life reputations who gave Theranos a stamp of legitimacy,” in Carreyrou’s words—were putty in Holmes’s hands. “Elizabeth’s iron determination and great intellectual ability turned me from a mild skeptic to an enthusiast,” Kissinger told USA Today in 2014. Shultz testified after Holmes’s fall that he “didn’t probe into” whether Theranos’s technology worked, because it “didn’t occur” to him.
It’s clear from Carreyrou’s book that the hope, credulity, and ignorance that made many people into willing marks for Bernie Madoff can also be found in Silicon Valley’s technology investing class. No one asked what gave a young woman with a couple of semesters of undergraduate chemical engineering training special insight into microfluidics, or why she’d failed to bring in investors who understood the lab testing business. People like Draper and Lucas who’d made fortunes identifying young software talent assumed that their instincts about healthcare entrepreneurs were just as good. Tellingly, not a single MD, life sciences PhD, or biotech industry veteran was added to the Theranos board until 2016, after the scandal had broken.
Of course, there’s more to the picture. Theranos also gamed the regulatory
