Theranos Quotes

The way Theranos is operating is like trying to build a bus while you’re driving the bus. Someone is going to get killed.

By positioning Theranos as a tech company in the heart of the Valley, Holmes channeled this fake-it-until-you-make-it culture, and she went to extreme lengths to hide the fakery.

We turned to my questions about the Edison. How many blood tests did Theranos perform on the device? That too was a trade secret, they said. I felt like I was watching a live performance of the Theater of the Absurd.

What if the Theranos technology did turn out to be game-changing? It might spend the next decade regretting passing up on it. The fear of missing out was a powerful deterrent.

Elizabeth incorporated the company as Real-Time Cures, which an unfortunate typo turned into “Real-Time Curses” on early employees’ paychecks. She later changed the name to Theranos, a combination of the words “therapy” and “diagnosis.

To anyone who spent time with Elizabeth, it was clear that she worshipped Jobs and Apple. She liked to call Theranos’s blood-testing system “the iPod of health care

On February 4, 2014, Partner Fund purchased 5,655,294 Theranos shares at a price of $17 a share—$2 a share more than the Lucas Venture Group had paid just four months earlier. The investment brought in another $96 million to Theranos’s coffers and valued it at a stunning $9 billion. This meant that Elizabeth, who owned slightly more than half of the company, now had a net worth of almost $5 billion.

The main difficulty stemmed from Elizabeth’s insistence that they use very little blood. She’d inherited from her mother a phobia of needles; Noel Holmes fainted at the mere sight of a syringe. Elizabeth wanted the Theranos technology to work with just a drop of blood pricked from the tip of a finger.

Sunny and Elizabeth’s boldest claim was that the Theranos system was capable of running seventy different blood tests simultaneously on a single finger-stick sample and that it would soon be able to run even more. The ability to perform so many tests on just a drop or two of blood was something of a Holy Grail in the field of microfluidics. Thousands of researchers around the world in universities and industry had been pursuing this goal for more than two decades

Ian also had issues with Elizabeth’s management, especially the way she siloed the groups off from one another and discouraged them from communicating. The reason she and Sunny invoked for this way of operating was that Theranos was “in stealth mode,” but it made no sense to Ian. At the other diagnostics companies where he had worked, there had always been cross-functional teams with representatives from the chemistry, engineering, manufacturing, quality control, and regulatory departments working toward a common objective. That was how you got everyone on the same page, solved problems, and met deadlines.

good luck and please do read those books, watch The Office, and believe in the people who disagree with you…Lying is a disgusting habit, and it flows through the conversations here like it’s our own currency. The cultural disease here is what we should be curing before we try to tackle obesity…I mean no ill will towards you, since you believe in what I was doing and hoped I would succeed at Theranos. I feel like I owe you this bad attempt at an exit interview since we have no HR to officially record it.

Shaunak gradually let down his guard and allowed that the Theranos 1.0, as Elizabeth had christened the blood-testing system, didn’t always work. It was kind of a crapshoot, actually, he said. Sometimes you could coax a result from it and sometimes you couldn’t.

Hunter thought the whole thing was bizarre. Walgreens had brought him here to vet Theranos’s technology, but he hadn’t been allowed to do so. The only thing they had to show for their visit was an autographed flag. And yet, Dr. J and Miquelon didn’t seem to mind. As far as they were concerned, the visit had gone swimmingly.

The pharmaceutical companies were going to use Theranos’s blood-testing system to monitor patients’ response to new drugs. The cartridges and readers would be placed in patients’ homes during clinical trials. Patients would prick their fingers several times a day and the readers would beam their blood-test results to the trial’s sponsor.

Meanwhile, Sunny was also traveling to Thailand to set up another swine flu testing outpost. The epidemic had spread to Asia, and the country was one of the region’s hardest hit with tens of thousands of cases and more than two hundred deaths. But unlike in Mexico, it wasn’t clear that Theranos’s activities in Thailand were sanctioned by local authorities.

Murdoch also derived comfort from some of the other reputable investors he heard Theranos had lined up. They included Cox Enterprises, the Atlanta-based, family-owned conglomerate whose chairman, Jim Kennedy, he was friendly with, and the Waltons of Walmart fame. Other big-name investors he didn’t know about ranged from Bob Kraft, owner of the New England Patriots, to Mexican billionaire Carlos Slim and John Elkann, the Italian industrialist who controlled Fiat Chrysler Automobiles.

The call dragged on for more than three hours until 10:30 p.m. They went over the site line by line, as Elizabeth slowly dictated every alteration that needed to be made. Patrick nodded off at one point. But Kate and Mike stayed alert enough to notice that the language was being systematically dialed back. “Welcome to a revolution in lab testing” was changed to “Welcome to Theranos.” “Faster results. Faster answers” became “Fast results. Fast answers.” “A tiny drop is all it takes” was now “A few drops is all it takes.

We can’t not pursue this,” he said. “We can’t risk a scenario where CVS has a deal with them in six months and it ends up being real.” Walgreens’s rivalry with CVS, which was based in Rhode Island and one-third bigger in terms of revenues, colored virtually everything the drugstore chain did. It was a myopic view of the world that was hard to understand for an outsider like Hunter who wasn’t a Walgreens company man. Theranos had cleverly played on this insecurity. As a result, Walgreens suffered from a severe case of FoMO—the fear of missing out.

Elizabeth and Sunny had always been security conscious, but their level of paranoia had reached a new peak with the launch in Walgreens stores. They had convinced themselves that Quest and LabCorp viewed Theranos as a mortal threat to their cozy oligopoly and that they would try to quash their new competitor by any means available. There was also the matter of the promise John Fuisz had made in his deposition to “fuck with” Elizabeth until she died. She took that threat very seriously. Following his retirement from the military earlier that year, James Mattis had joined the Theranos board

Less than three months later, the walls began closing in again: on March 14, 2018, the Securities and Exchange Commission charged Theranos, Holmes, and Balwani with conducting “an elaborate, years-long fraud.” To resolve the agency’s civil charges, Holmes was forced to relinquish her voting control over the company, give back a big chunk of her stock, and pay a $500,000 penalty. She also agreed to be barred from being an officer or director in a public company for ten years. Unable to reach a settlement with Balwani, the SEC sued him in federal court in California. In the meantime, the criminal investigation continued to gather steam. As of this writing, criminal indictments of both Holmes and Balwani on charges of lying to investors and federal officials seem a distinct possibility.

After they hung up, Hunter took aside Renaat Van den Hooff, who was in charge of the pilot on the Walgreens side, and told him something just wasn’t right. The red flags were piling up. First, Elizabeth had denied him access to their lab. Then she’d rejected his proposal to embed someone with them in Palo Alto. And now she was refusing to do a simple comparison study. To top it all off, Theranos had drawn the blood of the president of Walgreens’s pharmacy business, one of the company’s most senior executives, and failed to give him a test result! Van den Hooff listened with a pained look on his face. “We can’t not pursue this,” he said. “We can’t risk a scenario where CVS has a deal with them in six months and it ends up being real.” Walgreens’s rivalry with CVS, which was based in Rhode Island and one-third bigger in terms of revenues, colored virtually everything the drugstore chain did. It was a myopic view of the world that was hard to understand for an outsider like Hunter who wasn’t a Walgreens company man. Theranos had cleverly played on this insecurity. As a result, Walgreens suffered from a severe case of FoMO—the fear of missing out.

Everywhere you look with this young lady, there’s a purity of motivation,” Shultz told him. “I mean she really is trying to make the world better, and this is her way of doing it.” Mattis went out of his way to praise her integrity. “She has probably one of the most mature and well-honed sense of ethics—personal ethics, managerial ethics, business ethics, medical ethics that I’ve ever heard articulated,” the retired general gushed. Parloff didn’t end up using those quotes in his article, but the ringing endorsements he heard in interview after interview from the luminaries on Theranos’s board gave him confidence that Elizabeth was the real deal. He also liked to think of himself as a pretty good judge of character. After all, he’d dealt with his share of dishonest people over the years, having worked in a prison during law school and later writing at length about such fraudsters as the carpet-cleaning entrepreneur Barry Minkow and the lawyer Marc Dreier, both of whom went to prison for masterminding Ponzi schemes. Sure, Elizabeth had a secretive streak when it came to discussing certain specifics about her company, but he found her for the most part to be genuine and sincere. Since his angle was no longer the patent case, he didn’t bother to reach out to the Fuiszes. — WHEN PARLOFF’S COVER STORY was published in the June 12, 2014, issue of Fortune, it vaulted Elizabeth to instant stardom. Her Journal interview had gotten some notice and there had also been a piece in Wired, but there was nothing like a magazine cover to grab people’s attention. Especially when that cover featured an attractive young woman wearing a black turtleneck, dark mascara around her piercing blue eyes, and bright red lipstick next to the catchy headline “THIS CEO IS OUT FOR BLOOD.” The story disclosed Theranos’s valuation for the first time as well as the fact that Elizabeth owned more than half of the company. There was also the now-familiar comparison to Steve Jobs and Bill Gates. This time it came not from George Shultz but from her old Stanford professor Channing Robertson. (Had Parloff read Robertson’s testimony in the Fuisz trial, he would have learned that Theranos was paying him $500,000 a year, ostensibly as a consultant.) Parloff also included a passage about Elizabeth’s phobia of needles—a detail that would be repeated over and over in the ensuing flurry of coverage his story unleashed and become central to her myth. When the editors at Forbes saw the Fortune article, they immediately assigned reporters to confirm the company’s valuation and the size of Elizabeth’s ownership stake and ran a story about her in their next issue. Under the headline “Bloody Amazing,” the article pronounced her “the youngest woman to become a self-made billionaire.” Two months later, she graced one of the covers of the magazine’s annual Forbes 400 issue on the richest people in America. More fawning stories followed in USA Today, Inc., Fast Company, and Glamour, along with segments on NPR, Fox Business, CNBC, CNN, and CBS News. With the explosion of media coverage came invitations to numerous conferences and a cascade of accolades. Elizabeth became the youngest person to win the Horatio Alger Award. Time magazine named her one of the one hundred most influential people in the world. President Obama appointed her a U.S. ambassador for global entrepreneurship, and Harvard Medical School invited her to join its prestigious board of fellows.

Phlebotomy. Even the word sounds archaic—and that’s nothing compared to the slow, expensive, and inefficient reality of drawing blood and having it tested. As a college sophomore, Elizabeth Holmes envisioned a way to reinvent old-fashioned phlebotomy and, in the process, usher in an era of comprehensive superfast diagnosis and preventive medicine. That was a decade ago. Holmes, now 30, dropped out of Stanford and founded a company called Theranos with her tuition money. Last fall it finally introduced its radical blood-testing service in a Walgreens pharmacy near the company headquarters in Palo Alto, California. (The plan is to roll out testing centers nationwide.) Instead of vials of blood—one for every test needed—Theranos requires only a pinprick and a drop of blood. With that they can perform hundreds of tests, from standard cholesterol checks to sophisticated genetic analyses. The results are faster, more accurate, and far cheaper than conventional methods. The implications are mind-blowing. With inexpensive and easy access to the information running through their veins, people will have an unprecedented window on their own health. And a new generation of diagnostic tests could allow them to head off serious afflictions from cancer to diabetes to heart disease. None of this would work if Theranos hadn’t figured out how to make testing transparent and inexpensive. The company plans to charge less than 50 percent of the standard Medicare and Medicaid reimbursement rates. And unlike the rest of the testing industry, Theranos lists its prices on its website: blood typing, $2.05; cholesterol, $2.99; iron, $4.45. If all tests in the US were performed at those kinds of prices, the company says, it could save Medicare $98 billion and Medicaid $104 billion over the next decade.

Biden’s ballyhooed visit to Theranos’s Newark facility a few days earlier.

have arrived at a place where The Journal is considering publication of an article that we know to be false, misleading, and unfair, and that threatens to disclose information that Theranos rigorously protects as trade secrets.

In the same story, her old Stanford professor, Channing Robertson, dismissed questions about the accuracy of Theranos’s testing as absurd, saying the company would have to be “certifiable” to go to market with a product that people’s lives depended on knowing that it was unreliable. He also maintained that Holmes was a once-in-a-generation genius, comparing her to Newton,

By late 2017, Theranos was running on fumes, having burned through most of the $900 million it raised from investors, much of it on legal expenses.

You didn't change the world by being cynical.

She was so laser focused on achieving her goals that she seemed oblivious to the practical implications of her decision.

The fear of missing out was a powerful deterrent.

In January 2010, Theranos had approached Walgreens with an email stating that it had developed small devices capable of running any blood test from a few drops pricked from a finger in real time and for less than half the cost of traditional laboratories

Walgreens’s rivalry with CVS, which was based in Rhode Island and one-third bigger in terms of revenues, colored virtually everything the drugstore chain did. It was a myopic view of the world that was hard to understand for an outsider like Hunter who wasn’t a Walgreens company man. Theranos had cleverly played on this insecurity. As a result, Walgreens suffered from a severe case of FoMO—the fear of missing out.

But how do all those marvels of convenience really stack up against prior innovations? How much have they actually changed our world and lives? Consider Gordon’s way of contrasting our recent digital-age progress to the major inventions of the nineteenth century: A thought experiment.… You are required to make a choice between option A and option B. With option A, you are allowed to keep 2002 electronic technology, including your Windows 98 laptop accessing Amazon, and you can keep running water and indoor toilets; but you can’t use anything invented since 2002. Option B is that you get everything invented in the past decade right up to Facebook, Twitter, and the iPad, but you have to give up running water and indoor toilets. You have to haul the water into your dwelling and carry out the waste. Even at 3:00 a.m. on a rainy night, your only toilet option is a wet and perhaps muddy walk to the outhouse. Which option do you choose? I have posed this imaginary choice to several audiences in speeches, and the usual reaction is a guffaw, a chuckle, because the preference for option A is so obvious. The audience realizes that it has been trapped into recognition that just one of the many late-nineteenth-century inventions is more important than the portable electronic devices of the past decade on which they have become so dependent. Again, this doesn’t make the Internet unimportant. Indeed, in Gordon’s view, it’s the most important thing that’s happened across the last fifty years, the source of our only major post-1960s productivity surge. (Theranos was a pleasant fiction, but the Amazon effect is real.) But that surge, and its effect on our everyday lives, is still a blip compared with the cascade of changes between 1870 and 1970, and a letdown compared with what we dreamed about not so very long ago.

all of its paths to reduce its losses—charging higher prices, paying its workers less—would destroy the advantages that it has built. So it sits there, widely regarded as one of the defining success stories of the Internet era, a unicorn unlike any other, with billions in losses and a plan to become profitable that involves vague promises to somehow monetize all its user data and a specific promise that its investment in a different new technology—the self-driving car, much ballyhooed but as yet not exactly real—will square the circle and make the math add up. That’s the story of Uber—so far. It isn’t a pure Instagram fantasy like the Fyre Festival or a naked fraud like Theranos; it managed to go public and maintain its outsize valuation, unlike its fellow money-losing unicorn WeWork, whose recent attempt at an IPO hurled it into crisis. But like them, it is, for now, an example of a major twenty-first-century company invented entirely out of surplus, less economically efficient so far than the rivals it is supposed to leapfrog, sustained by investors who believe its promises in defiance of the existing evidence, floated by the hope that with enough money and market share, you can will a profitable company into existence, and goldwashed by an “Internet company” identity that obscures the weakness of its real-world fundamentals. Maybe it won’t crash like the others; maybe the tens of billions in investor capital won’t be wasted; maybe we won’t be watching a documentary on its hubris five or ten years hence. But Uber’s trajectory to this point, the strange unreality of its extraordinary success, makes it a good place to begin a discussion of economic

Besides Theranos’s supposed scientific accomplishments, what helped win James and Grossman over was its board of directors. In addition to Shultz and Mattis, it now included former secretary of state Henry Kissinger, former secretary of defense William Perry, former Senate Armed Services Committee chairman Sam Nunn, and former navy admiral Gary Roughead. These were men with sterling, larger-than-life reputations who gave Theranos a stamp of legitimacy. The common denominator between all of them was that, like Shultz, they were fellows at the Hoover Institution. After befriending Shultz, Elizabeth had methodically cultivated each one of them and offered them board seats in exchange for grants of stock.

The idea of putting customers first and acting with integrity is gaining traction. Outdoor-gear retailer REI received adulation for adhering to its values when it announced that it would not only close its stores on Black Friday in 2015 but pay its employees to get outside. Contrast that with blood-test startup Theranos. CEO Elizabeth Holmes was lauded as “America’s youngest self-made billionaire,”12 and the firm was quickly valued at $9 billion. Then, testing showed that the company’s flagship Edison device, which purported to deliver test results from a single drop of blood, did not work.13 The federal government swiftly began investigating Holmes, with regulators not only revoking the company’s license to operate but suggesting a ban preventing Holmes from owning or operating a lab for two years. Walgreens Boot Alliance Inc. sued Theranos for $140 million, equivalent to the amount the drugstore giant had invested in the startup. 14 In the fall of 2016, Theranos announced it would be shutting down its blood-testing facilities and shed at least 40 percent of its workforce. 15

John Carreyrou’s Bad Blood (Knopf, 2018) is a solid narrative account of the Theranos affair, but genuinely excellent in its description of how hard life gets for people who start to challenge a fraud.

And yet Safeway was still hesitant to walk away from the partnership. What if the Theranos technology did turn out to be game-changing? It might spend the next decade regretting passing up on it. The fear of missing out was a powerful deterrent.

one reason Theranos got into trouble was that it used a Silicon Valley model commonly applied to software, which can afford to have initial glitches and failures, for medical testing, which cannot.

Henry Mosley, Theranos’s chief financial officer.

Diane Parks, Theranos’s chief commercial officer, had twenty-five years of experience at pharmaceutical and biotechnology companies

it was impossible to know what went on inside that brain. His eyes, behind their wire-rim glasses, never betrayed any emotion. During their first meeting, Daniel calmly explained why Tyler’s CV calculations were wrong: Tyler was taking into account the six values, or “replicates,” generated during each Edison test instead of just the median of those six values. The final result Theranos reported to a patient was the median, so only that number was relevant to CV calculations, he said. Daniel may have technically been correct, but Tyler had put his finger on a central weakness of the Edison device: its pipette tips were terribly imprecise. Generating six measurements during each test and then selecting the median was a way to correct for that imprecision. If the tips had been reliable in the first place, there would have been no need for such contortions.

That doesn’t sound right,” Elizabeth said. She suggested he go speak with Daniel Young. Daniel would be able to walk him through how Theranos performed its data analyses and clear up any confusion. Over the following weeks, Tyler met with Daniel Young twice. Talking to Daniel could be frustrating. He had a long forehead accentuated by a receding hairline that suggested a big, powerful brain. But

Another similar story is the recent Theranos scandal, where the company’s CEO, Elizabeth Holmes (at the time of writing, on trial for wire fraud), managed to bilk unbelievable amounts of money from investors such as Rupert Murdoch, the Walton family (of Walmart fame), and many more, becoming America’s youngest and richest self-made female billionaire. Her company’s devices, which ostensibly could diagnose many health conditions from a tiny drop of blood, never actually worked. But the investors, who wanted to get in at the start of what might’ve been the next Facebook or Uber in terms of its transformative technological effect, managed to miss or ignore the obvious flaws. The story is told by the investigative journalist John Carreyrou in his unputdownable Bad Blood, John Carreyrou, Bad Blood: Secrets and Lies in a Silicon Valley Startup (New York: Alfred A. Knopf, 2018).

AT 3:00 P.M. SHARP on August 23, 2012, Colonel Edgar escorted the two men into Mattis’s office on MacDill Air Force Base in Tampa. The sixty-one-year-old general was an intimidating figure in person: muscular and broad shouldered, with dark circles under his eyes that suggested a man who didn’t bother much with sleep. His office was decorated with the mementos of a long military career. Amid the flags, plaques, and coins, Shoemaker’s eyes rested briefly on a set of magnificent swords displayed in a glass cabinet. As they sat down in a wood-paneled conference room off to one side of the office, Mattis cut to the chase: “Guys, I’ve been trying to get this thing deployed for a year now. What’s going on?” Shoemaker had gone over everything again with Gutierrez and felt confident he was on solid ground. He spoke first, giving a brief overview of the issues raised by an in-theater test of the Theranos technology. Gutierrez took over from there and told the general his army colleague was correct in his interpretation of the law: the Theranos device was very much subject to regulation by the FDA. And since the agency hadn’t yet reviewed and approved it for commercial use, it could only be tested on human subjects under strict conditions set by an institutional review board. One of those conditions was that the test subjects give their informed consent—something that was notoriously hard to obtain in a war zone. Mattis was reluctant to give up. He wanted to know if they could suggest a way forward. As he’d put it to Elizabeth in an email a few months earlier, he was convinced her invention would be “a game-changer” for his men. Gutierrez and Shoemaker proposed a solution: a “limited objective experiment” using leftover de-identified blood samples from soldiers. It would obviate the need to obtain informed consent and it was the only type of study that could be put together as quickly as Mattis seemed to want to proceed. They agreed to pursue that course of action. Fifteen minutes after they’d walked in, Shoemaker and Gutierrez shook Mattis’s hand and walked out. Shoemaker was immensely relieved. All in all, Mattis had been gruff but reasonable and a workable compromise had been reached. The limited experiment agreed upon fell short of the more ambitious live field trial Mattis had had in mind. Theranos’s blood tests would not be used to inform the treatment of wounded soldiers. They would only be performed on leftover samples after the fact to see if their results matched the army’s regular testing methods. But it was something. Earlier in his career, Shoemaker had spent five years overseeing the development of diagnostic tests for biological threat agents and he would have given his left arm to get access to anonymized samples from service members in theater. The data generated from such testing could be very useful in supporting applications to the FDA. Yet, over the ensuing months, Theranos inexplicably failed to take advantage of the opportunity it was given. When General Mattis retired from the military in March 2013, the study using leftover de-identified samples hadn’t begun. When Colonel Edgar took on a new assignment as commander of the Army Medical Research Institute of Infectious Diseases a few months later, it still hadn’t started. Theranos just couldn’t seem to get its act together. In July 2013, Lieutenant Colonel Shoemaker retired from the army. At his farewell ceremony, his Fort Detrick colleagues presented him with a “certificate of survival” for having the courage to stand up to Mattis in person and emerging from the encounter alive. They also gave him a T-shirt with the question, “What do you do after surviving a briefing with a 4 star?” written on the front. The answer could be found on the back: “Retire and sail off into the sunset.

Elizabeth Holmes, Theranos’s twenty-two-year-old founder,

After they hung up, Hunter took aside Renaat Van den Hooff, who was in charge of the pilot on the Walgreens side, and told him something just wasn’t right. The red flags were piling up. First, Elizabeth had denied him access to their lab. Then she’d rejected his proposal to embed someone with them in Palo Alto. And now she was refusing to do a simple comparison study. To top it all off, Theranos had drawn the blood of the president of Walgreens’s pharmacy business, one of the company’s most senior executives, and failed to give him a test result

Elizabeth had wanted all those sweeping claims to be true, but just because you badly wanted something to be real didn't make it so.