Bad Blood

Among my favourite pastimes is reading books about business leaders and organisations. I’m especially intrigued by stories of corporate corruption and how seriously dodgy leaders manage to get away with the things that they do, for as long as they do.

The latest story to capture my attention is that of Theranos, a now defunct medical device Silicon Valley startup founded by then 19-year-old Elizabeth Holmes.  If you haven’t caught it in the news, 2022 got off to a bad start for Holmes who on 3rd January  was found guilty by a California jury of fraud. 

Bad Blood: Secrets and Lies in a Silicon Valley Startup, written by Pulitzer Prize winning investigative journalist with the Wall Street Journal John Carreyrou, provides truly fascinating insight to how a Stanford University drop out was able to become the world's youngest female self-made billionaire by age 30.   

Carreyrou charts the rise and fall of Theranos, through its peak in 2014 when the company was valued at $10 billion, to its dramatic demise beginning in 2015 when finally serious questions began to be asked. By June 2016, it was estimated that Holmes's personal net worth had dropped from $4.5 billion to virtually nothing.  By September 2018 the company had been dissolved.   

Elizabeth Holmes isn’t the only character in this story of greed and deceit.  Standing by her side for much of the journey was her boyfriend and Chief Operating Officer Ramesh “Sunny” Balwani.  Charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud, Balwani’s own trial is set to start in March 2022.  

So, what are the big take outs from this sorry saga? 

Speaking up at times takes a lot of courage. Throughout the book are accounts of what happened to those who dared to express concerns about how Theranos was operating.  The author provides a long list of people who chose to voice concerns and were subsequently frog marched out of the building. 

Taking a stand can at times require self-sacrifice. Those who fought to expose Theranos walked away from jobs, risked their personal and professional reputations, and undoubtedly endured long periods of stress as the organisation went to extraordinary lengths to harass and intimidate them into staying silent.   

Investors have an ethical obligation to know what they are putting their money into. Billions of dollars were pumped into the business by wealthy and powerful people who were seemingly so taken by Elizabeth and her ambitions, they failed to see the cover-ups, unethical practices and unkept promises that were par for the course at Theranos.   

Thankfully courageous team members stood up for what is right and helped stop the company before someone died.  Tyler Shultz, a former Theranos employee and whistleblower, shared this on Twitter after Elizabeth Holmes, had been convicted of fraud.  “This has been a long chapter of my life. I am happy that justice has been served and that this saga is finally in my rearview mirror. Hope to inspire other young professionals to hold their leaders accountable.