This archive report was first published on 14 August 2019.
Published on August 14, 2019, John Carreyrou's book 'Bad Blood-Secrets and Lies in a Silicon Valley Startup' tells the story of Theranos Inc., a $10 billion disease diagnostic startup founded in 2003 by Elizabeth Holmes, a 19-year-old Stanford drop-out.
Theranos' rise to fame began when it started testing its Edison device and pitching it to pharmaceutical companies, including Switzerland-based Norvatis. However, the demo was a failure, and senior executives warned the company to fix its technology. Undeterred, Theranos continued to sign up users and partners, convinced that it was on the path to revolutionize the blood testing industry.
But behind the scenes, Theranos CEO Elizabeth Holmes and company president Ramesh Balwani had no technology and lied to investors, partners, and staff. When the company launched with Walgreens, health professionals realized that there was no technology, and the firm was shipping samples to labs it ran, powered by commercial medical equipment from companies like Siemens.
Despite the lack of technology, the company's investors and partners remained convinced of its promise until the media started exposing the truth. On June 15, 2018, Holmes and Balwani were charged with wire fraud, forcing Holmes to step down as CEO. The company's struggles continued, and it failed to sell itself or raise follow-on funding. In September 2018, Theranos shut down, and Holmes awaits judgement in June 2020.
