Bad Blood, Elizabeth Holmes, and Why Biology Is Harder Than Silicon Valley Thinks

I can’t remember when I first heard about Theranos and its founder, Elizabeth Holmes, but there rarely goes by a month when I haven’t thought about them since. I’m not alone: the tale has gripped many and been spun into a book, a documentary, and at least two podcasts. Although, having spent the better part of my 5+ year postdoc investigating new ways to create portable, low-cost diagnostics, there may be some logic to why the story has wormed into my brain more than most.

The basic synopsis: a 19-year-old ambitious Stanford student drops out of school to start a company that goes on to become a unicorn (have a valuation based on funding-raised of over $1 billion). But instead of some website or app (e.g. Facebook, Instagram, etc.), her company promised to revolutionize health care by developing a box the size of a desktop computer that could perform hundreds of tests on a few drops of blood at a fraction of the price. The only problem: nothing worked and it was all a lie.

I remember first watching the documentary and later listening to The Dropout podcast, which adds some more color and included some information from after the film. Recently, with the announcement of the trial verdict, I listened to the audiobook version of Bad Blood, written by John Carreyrou, who first broke the story in the Wall Street Journal, and it covers a lot of brushed over periods in a lot more detail.

In retrospect, there were so many red flags:

  • No one on the board of the company had any experience in diagnostics or healthcare, not that they even had any power
  • Everything has hidden and protected by ‘trade secret’. Potential investors and partners weren’t allowed to tour the lab. While most start-ups have a certain degree of paranoia, it sounds like Theranos was way above and beyond that
  • Blood tests they did conduct were highly variable and when they performed blood tests on partners to show off their technology, they never provided the results

And with all of that in mind, I think the question that most intrigues me is:

How on Earth did she convince so many powerful people that she was a genius?

In watching the footage, her almost-sad copying devotion of all things Steve Jobs seems to convey more a lack of original ideas than the second coming of a prodigy. And her false baritone voice and blinkless eyes seem more off-putting than capable of developing a deep empathetic connection needed to convince someone you are a genius. I keep looking and watching, but I just can’t see it.

From a personal standpoint, I know how much time and work can go into trying to develop new types of diagnostics. You can get interesting initial results, but establishing reproducibility and robustness sufficient to roll out as a clinical test is a whole different set of standards. Also, to the best of my knowledge, none of their tests really involved any new scientific breakthroughs in biology or chemistry; they were just trying to shrink down lots of existing technology and pack it in a box, only to run headlong into a train wreck of biochemistry and thermodynamics.

At the end of the day, ‘move fast and break things’ may work when failure means that, at worst, your app crashes, but we should think twice when it can lead to changes in medication that can lead your heart rate to flatline. At present, Holmes was convicted of four counts of defrauding investors, carrying a sentence of up to 20 years in prison. Personally, I think she’ll only do 18 months, but that is just my wild guess. Either way, Theranos has become a case study for venture capitalists looking to invest in biotech, and hopefully it means that they do more due diligence to make sure that new start-ups can actually deliver on their promises.

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