The unraveling of Theranos began with a 2015 article in the Wall Street Journal that revealed how the revolutionary technology promoted by the blood testing startup wasn’t exactly what it seemed.
Over the proceeding months, the reporter John Carreyrou exposed how the testing devices the Silicon Valley darling said could perform a variety of medical tests with just a drop of blood were not actually being used to perform most of the analyses. Investors and consumers, Carreyrou found, were being fooled.
Theranos dissolved in 2018 and its star founder, Elizabeth Holmes, will face trial in a San Jose courtroom next week.
Carreyrou’s book about the rise and fall of Theranos, meanwhile, became a bestseller and the author is hosting a new podcast, Bad Blood: the Final Chapter, as the trial begins.
He spoke with the Guardian about the lies Holmes pulled off and the larger questions about Silicon Valley culture that Theranos raised.
What do readers need to know about the particular moment in Silicon Valley culture when Theranos rose to prominence?
Theranos rose to prominence between 2013 and 2015, during the beginning of what I call the “unicorn boom” – Silicon Valley’s second enormous boom after the dotcom boom of the late 90s.
This boom started with the emergence of Facebook and Twitter and then metastasized with the appearance of these other big unicorns like Uber and Airbnb. Theranos at one point was worth even more and was the most valuable private startup in Silicon Valley back in 2014.
This was all before the backlash against big tech. People did not come down hard on Facebook until the 2016 election, when they realized the roles that Facebook and Twitter had played and the way those platforms were manipulated by Russian hackers. The disposition of the country and of the press towards Silicon Valley was still positive. When I broke the Theranos scandal, in a small way, it contributed to the backlash against tech that began to transpire.
Why do you think it was able to go unchecked for so long?
As Holmes herself has said, Theranos was in stealth mode in its first 10 years, so the company was not on anyone’s radar. It was really only in the limelight for two years before I wrote my first story on the scandal. You could argue that even that was too long because these unreliable and inaccurate blood tests were already available in Walgreens.
Sunny [Ramesh Balwani, former president of Theranos, who was also charged with fraud] and Elizabeth were very secretive – they managed that company like it was the CIA. The threat of litigation was always in the air, so employees were worried about speaking out.
It seems like the collection of high-profile people on the board, many of whom did not actually have scientific expertise, played into the hype. How was Holmes able to secure such…
Read More: ‘People wanted to believe’: reporter who exposed Theranos on Elizabeth