Book review: Bad Blood – The Theranos Story

Johnson Book Club - "Bad Blood" Pre-Book Discussion - Cornell

Bad Blood – the story of Theranos

I am a little late to this book. It was a best seller released in 2018 and is about 350 pages. Some (most, all) of you may have already read the story of Theranos in the press. I would give the book a 4/5.

The short version is that a young entrepreneur (Elizabeth Holmes) dropped out of Stanford University to start a company that would perform 100’s of blood tests (compared to tens) with drops of blood (compared to a syringe full) without costly and bulky equipment at a very low cost.

The book is about how she and her COO (Sunny Balwani) deceived investors, harassed employees, cheated partners (Safeway, Walgreens) and hoodwinked their board.

The book itself spans the 13 years (from its founding in 2003) to 2016 when WSJ exposed the company’s challenges.

The problem she was trying to solve is extremely hard. While she was a visionary, the number of challenges to overcome (mechanical, biological, chemical, mathematical, etc.) are at least 4-5 orders of magnitude more challenging than building an app for the IPhone or a SaaS product.

The big takeaways for me were a) fake it till you make is really bad advice, b) large companies like Walgreens and Safeway were worried about competitors, they had FOMO (Fear of Missing Out) and so they were wishing for this to work, giving up on good due diligence and c) the obsession that Elizabeth had for Steve Jobs borders neuroticism.

  1. The Silicon valley advice for most entrepreneurs is to “fake it till you make it”. An easy way to understand is is to pitch customers on a “product” that is ready when it is actually being developed, or to tell potential investors there are “many” customers in the pipeline. I fell for this line as well and took it to the extreme. My advice – never fake it. For whatever reason. Be authentic to yourself. If investors and customers dont want to buy your authentic self, then wait to make progress until they do.
  2. FOMO is real. In the book there are several times executives at Safeway and Walgreens (besides the executive champions at those companies) questioned the progress and the value of Theranos. They were always greeted by the executive champions with – “Yeah, maybe but what if it is true and the competitor launches this in a few months”? Startups can use this to their advantage in most cases. Find the thing that drives the executive champion and position towards that.
  3. Just like Uber founder Travis Kalanick (read the Super Pumped book review) was obsessed with Jeff Bezos, Elizabeth (founder of Theranos) was obsessed with Steve Jobs. While Travis was emulating Bezos’ business acumen, Elizabeth is portrayed at a neurotic person, modeling her dressing, voice, pitch and meeting schedule to mimic Steve Jobs.
Theranos and Elizabeth Holmes: What to Read, Watch and Listen To - The New  York Times