Bad Blood

Secrets and Lies in a Silicon Valley Startup


  • Media: #Books #Books 2020
    • Author: John Carreyrou
    • Status: read
    • Date: 2020-11-27
    • Tags: #nonfiction #technology #business #siliconvalley #truecrime #wip
    • Rating: ★★★★☆
    • Idea richness: ★★☆☆☆
    • Links: Highlights, Goodreads


"Elizabeth had wanted all those sweeping claims to be true, but just because you badly wanted something to be real didn’t make it so."

How to Build a Unicorn: the ultimate guide to taking the startup world by storm, building on lies, defrauding investors, and intimidating employees. Bad Blood follows the meteoric rise and stunning collapse of too-good-to-be-true multi-billion dollar 'unicorn' startup Theranos and CEO Elizabeth Holmes.

What's frightening, however, is not that a biotech company failed to actually make anything they claimed and gave false results. The real terror is the old boys elite club who made it possible, the rampant buying into the story with no questions asked, the momentum built on lies, and the fact that this probably is happening all the time, it's just that as long as you stay in the tech bubble you're unlikely to be found out. From an amoral stance, Theranos mistake was not so much fraud as venturing into the more established field of healthcare with big players and regulations which demanded results eventually where they could get caught. That is scary.


  • Startup culture / Silicon Valley
  • Elite club
  • Too good to be true


Ynsynthesized clustered quotes from this point on.


Fear of Missing Out / The Dangers of FOMO

"The fear of missing out was a powerful deterrent."

  • "Walgreens’s rivalry with CVS, which was based in Rhode Island and one-third bigger in terms of revenues, colored virtually everything the drugstore chain did. It was a myopic view of the world that was hard to understand for an outsider like Hunter who wasn’t a Walgreens company man. Theranos had cleverly played on this insecurity. As a result, Walgreens suffered from a severe case of FoMO—the fear of missing out."

Fake it Until You Make It

  • "With the explosion of media coverage came invitations to numerous conferences and a cascade of accolades. Elizabeth became the youngest person to win the Horatio Alger Award. Time magazine named her one of the one hundred most influential people in the world. President Obama appointed her a U.S. ambassador for global entrepreneurship, and Harvard Medical School invited her to join its prestigious board of fellows."
  • “The way Theranos is operating is like trying to build a bus while you’re driving the bus. Someone is going to get killed.”
  • "By positioning Theranos as a tech company in the heart of the Valley, Holmes channeled this fake-it-until-you-make-it culture, and she went to extreme lengths to hide the fakery."
  • "Hyping your product to get funding while concealing your true progress and hoping that reality will eventually catch up to the hype continues to be tolerated in the tech industry. But it’s crucial to bear in mind that Theranos wasn’t a tech company in the traditional sense. It was first and foremost a health-care company."
  • "By bringing criminal charges against the two former Theranos executives, federal prosecutors sent a message to all Silicon Valley entrepreneurs: No longer would serious misconduct be tolerated under the guise of innovation. Behind entrepreneurship “are rules of law that require honesty, fair play, and transparency,” said Alex G. Tse, the Acting U.S. Attorney in San Francisco."

[[!Story overrides facts]]

  • Wanting something to be real does not make it so.
  • "Chelsea also worried about Elizabeth. In her relentless drive to be a successful startup founder, she had built a bubble around herself that was cutting her off from reality."
  • "She clearly didn’t want to hear anything that contradicted her point of view."
  • "...making Elizabeth the face of Theranos made perfect sense. She was the company’s most powerful marketing tool. Her story was intoxicating. Everyone wanted to believe in it."
  • "Like her idol Steve Jobs, she emitted a reality distortion field that forced people to momentarily suspend disbelief."

Culture blinds

  • "Sunny was constantly questioning employees’ commitment to the company—the number of hours a person put in at the office, whether he or she was doing productive work or not, was his ultimate gauge of that commitment."
  • "“It’s a folie à deux,” he said. Tony didn’t know any French, so he left to go look up the expression in the dictionary. The definition he found struck him as apt: “The presence of the same or similar delusional ideas in two persons closely associated with one another.”"
  • "In Patrick’s experience, all tech startups were chaotic and secretive. He saw nothing unusual or worrisome in that."

Fear shields the truth

  • "Theranos could make a case that his actions did breach his confidential obligations. And even if it failed to do so, it could tie him up in court for months, if not years. This was one of the most valuable private companies in Silicon Valley, one of the fabled unicorns. Its financial resources were virtually limitless. The litigation could bankrupt him. Did he really want to take that risk?"
  • "The story now had legs. But he decided he couldn’t take it on himself. For one thing, he couldn’t shoulder the legal liability of going up against a $9 billion Silicon Valley company with a litigious track record that was represented by David Boies."
  • "If not for his courage and the more than $400,000 his parents had spent on his attorneys, I might never have been able to get my first article published, I realized."

Secondhand trust is a powerful thing

  • Do your own due diligence.
  • "Since he didn’t have the expertise to vet her scientific claims, Parloff interviewed the prominent members of her board of directors and effectively relied on them as character witnesses."
  • "Since his angle was no longer the patent case, he didn’t bother to reach out to the Fuiszes."
  • "As we drove around in her car, I was struck by how small and insular Palo Alto was."

Responsibility is not isolated

  • "Mosley didn’t really grasp the physics or chemistries at play. But that wasn’t his role. He was the finance guy. As long as the system showed a result, he was happy. And it always did."
  • "It was as if working at Theranos was gradually stripping them all of their humanity"
  • "During these discussions, Ian told Paul to stand by his convictions and never to lose sight of his concern for the patient."
  • "At heart, both were engineers for whom patient care was an abstract concept. If their tinkering turned out to have adverse consequences, they weren’t the ones who would be held personally responsible. It was Alan’s name, not theirs, that was on the CLIA certificate."
  • "As Holmes herself liked to point out in media interviews and public appearances at the height of her fame, doctors base 70 percent of their treatment decisions on lab results."

Warning signs ignored

  • "Theranos hadn’t had a real chief financial officer since Elizabeth had fired Henry Mosley in 2006."
  • "By reducing the number of shares it had outstanding, buybacks could artificially raise a company’s earnings per share—the headline number investors focused on—even if its actual earnings fell. It was an old trick that astute Wall Street analysts versed in corporate sleights of hand saw right through."
  • "On February 4, 2014, Partner Fund purchased 5,655,294 Theranos shares at a price of $17 a share—$2 a share more than the Lucas Venture Group had paid just four months earlier. The investment brought in another $96 million to Theranos’s coffers and valued it at a stunning $9 billion. This meant that Elizabeth, who owned slightly more than half of the company, now had a net worth of almost $5 billion."

Numbers can lie

  • "data runs that didn’t achieve low enough CVs were simply discarded and the experiments repeated until the desired number was reached. It was as if you flipped a coin enough times to get ten heads in a row and then declared that the coin always returned heads."

Topics to Pursue

    • Yves Béhar, Swissborn industrial designer


  • "Mosley knew that evangelizing was what successful startup founders did in Silicon Valley. You didn’t change the world by being cynical."
  • "He was reminded of an old saying: “When you strike at the king, you must kill him.”"
  • "Tony, who was under a lot of pressure from Elizabeth, finally had enough of hearing Aaron’s complaints and asked him to leave the company. “Go find a place where you can be a big fish in a small pond,” he told him."
  • "resignation letter in hand, to give his notice. Sunny, who was there, opened up the letter, read it, then threw it back in Seth’s face. “I won’t accept this!” he shouted. Seth shouted back, deadpan, “I have news for you, sir: in 1863, President Lincoln freed the slaves.”"
  • "The blunt-spoken general had once famously told Marines stationed in Iraq, “Be polite, be professional, but have a plan to kill everybody you meet.”"
  • "“It’s not a huge deal,” he said. “Just don’t go anywhere you’re not supposed to be and remember to smile and wave to the man in the bushes outside your house when you leave for work.”"
  • "Theranos had issued a second press release that morning that amounted to what we in the news business call a “nondenial denial.”"

Scrapbook Concepts

  • "Both had vanity license plates. The one on the Porsche read “DAZKPTL” in mock reference to Karl Marx’s treatise on capitalism. The Lamborghini’s plate was “VDIVICI,” a play on the phrase “Veni, vidi, vici”"