When Wall Street Journal reporter John Carreyrou received a tip about Theranos, a Silicon Valley blood-testing startup with a pedigreed board of directors and heavyweight investor backing, he didn’t know it would lead to one of most audacious scams in startup history. Theranos, which promised a needle-free way to conduct blood tests, was hailed as a potentially revolutionary company. Elizabeth Holmes, the founder, chairwoman, and CEO of Theranos, had a backstory that was irresistible: She’d started the company as a 19-year-old, working from within her Stanford dorm room. Over a tumultuous decade, she built a buzzed-about startup with big-name board members like George Shultz, raised over $700 million in financing from marquee investors like Carlos Slim and Betsy DeVos, and struck up partnerships with major corporations like Walgreens and Safeway.
But all the while, Holmes was scrambling to conceal Theranos’s shortcomings. After receiving the initial tip from a Missouri-based pathologist who’d doubted Holmes’s descriptions of her technology, Carreyrou’s investigation into the company resulted in a series of damning reports in The Wall Street Journal, starting with an October 2015 front-page story exposing the company’s dubious blood-testing practices. Ultimately, Carreyrou revealed that Theranos was misleading customers about its testing accuracy and methodology. Theranos initially claimed that Carreyrou’s reporting was faulty, and its legal counsel, David Boies, threatened the reporter with lawsuits. However, Theranos began correcting tens of thousands of blood tests in 2016. By 2017, the company had closed its last laboratory. This March, the SEC sued Elizabeth Holmes and former Theranos president Ramesh “Sunny” Balwani for fraud. (Holmes settled, and she had to give up control of the company, in addition to paying a $500,000 fine.) This April, the disgraced company laid off most of its staff.
Carreyrou’s new book about Theranos, Bad Blood: Secrets and Lies in a Silicon Valley Startup, builds on his original reporting to create a compelling, cinematic Silicon Valley thriller. Ahead of the book’s release, The Ringer talked to Carreyrou about his reporting process, fielding legal threats, and whom he’d like to play him in the upcoming Theranos movie.
When did you realize that what you were discovering about Theranos was full-blown, company-ending fraud?
The first time I talked to [former Theranos lab director] Alan Beam, I had a pretty good idea that this was a big story. Did I necessarily articulate in my mind that it was a company-ending story and that it would be a huge cautionary tale for Silicon Valley? Maybe not. But was I convinced from the first hour-long phone call that it was a huge story? Yes.
Reading about how Theranos employees chanted “Fuck you, Carreyrou” after your stories came out about the company is still very wild and definitely a unique journalistic achievement. Did Theranos employees warm up to you after the dust settled?
When I went on book leave in the fall of 2016, it was still very hard to convince people to speak to me. They were still afraid of the company. As you read in the book, the company had a culture of intimidation and fear that they had lived through. But as the months went by and I kept reporting the book and meeting people, they put down their guard. As I say in the epilogue, I had something like 70 former employees who helped me reconstruct the company’s history.
I met so many smart, competent, capable people among these former employees who had integrity. It made me realize that what went wrong, and the wrongdoing, was really committed chiefly by two people, Sunny Balwani and Elizabeth Holmes. You could say that Elizabeth’s younger brother, Christian Holmes, and his fraternity brothers and [a former Theranos vice president and director of its Arizona lab] Daniel Young, were enablers. But really, other than that small circle, it was a company full of bright young and older people who were not committing fraud. They were not in the mind-set of pulling a con. That’s something that really became apparent to me, and I tried to capture that in the book.
What was the most difficult part of the book to write?
The first three-quarters of the book are about the events leading up to October 2015 [when The Wall Street Journal began publishing Carreyrou’s Theranos stories]. I hadn’t had to do that much reporting for the paper on the first 12 years of the company, so I had to report a lot of that from scratch. I had to write and report at the same time with the pressure of a book and movie deal. So that was the toughest thing. But once I got a couple chapters in, I started to enjoy the process and it became comfortable and fun. Later, I had some nervousness about how I’d transition to the last part, which is told in the first person. [Carreyrou switches into the first person while discussing the events during and after he began to report on Theranos.] But when I got to that point, it was a pretty smooth transition, and my anxiety melted away.
Do you think Theranos was uniquely bad in creating a company culture of intimidation, or was it an extreme version of a broader Silicon Valley ethos?
The former. It’s more that Theranos was an outlier. It’s true that part of the culture of secrecy was inspired by Apple, because Holmes was obsessed with Apple and idolized Steve Jobs—and there is guarding of trade secrets and secrecy in the Valley and NDAs at most companies. But this particular company and the culture it created were unique, and I’d like to think that it’s not that widespread. The elements of it—the secrecy, paranoia, fear, and intimidation—are not as extreme in most other companies in the Valley. I’ve talked to a lot of former employee sources who bounced back and now work at other tech or biotech Valley companies, and they say it’s refreshing because now they’re in a normal environment. People listen when they speak out about problems.
Were you disappointed that Elizabeth Holmes didn’t talk to you? Would you still be interested in talking to her now?
I’d still be interested in speaking to her. I think I captured her pretty well and I know her pretty well, because I reported on this for three years. But one of the enduring objects of fascination for everyone, and one of the reasons why I think people might buy my book, is they’re still trying to figure out what was going on in her mind. Why did she make the decisions that she made? How could she have justified putting people in harm’s way? How could she have lied so effortlessly to so many people for so many years? These questions are really what have fascinated people with this saga.
I’m curious whether she’d even have been able to give an honest interview at all.
I know from my sources who interacted with her as recently as a few months ago that she still doesn’t think she did anything wrong. She sees me as an evil guy who ruined everything. So I don’t think she’ll ever be open with meeting me or speaking to me. And leaving that aside, she’s also under orders from her lawyers to not speak to any reporters or to speak publicly, because anything she says could constitute jeopardy in the criminal investigation.
Speaking of a former Theranos lawyer, David Boies was legal counsel at Theranos for a time, and I was wondering if you were surprised by the New Yorker report last year revealing that he was involved in a spying operation on behalf of Harvey Weinstein.
Given what I had gone through with him and his firm, Boies Schiller & Flexner, when that report came out, it was par for the course. I strongly suspect that [Theranos whistleblowers] Tyler Schultz and Erika Cheung, and probably Alan Beam too, were probably surveilled. I don’t know if it was by Theranos directly or from Boies Schiller. I may have been surveilled too. So when the news broke that Boies had signed a contract to hire [Israeli private intelligence firm] Black Cube in the Weinstein matter, I was not surprised at all.
There’s a Theranos film in the works [based on Bad Blood]. Who would you like to play you?
I joke that I’d like the actor who played Thor to play me, because our physiques are similar. That’s a joke! I don’t know. Some people have suggested Mark Ruffalo, because he played one of the reporters for The Boston Globe in Spotlight. That might not be a bad choice. I loved him in Spotlight, and I loved Spotlight. But I haven’t really thought about it. Jennifer Lawrence is going to be the star, and Elizabeth Holmes should be the central character of the movie, as I made her in the book. One of the reasons I wrote the first three-quarters of the book in the third person, and made it about the events leading up to the exposure of the fraud, was that I wanted to build up suspense and give people the whole story, to make them understand in a forensic way how it got to where it got. But I also didn’t want to make the book too much about myself. I wanted to keep Elizabeth and Sunny and Theranos as the focal points of the story. I didn’t want to take center stage. [Screenwriter] Vanessa Taylor is just getting started on the screenplay, and I’m not sure how she’s going to write it, but if it’s true to the book, I won’t be as big a character as Elizabeth and Sunny.