Book review: “Bad Blood” – Secrets and Lies in a Silicon Valley Startup


“Bad Blood” was one of the few books that I had actually preordered as I usually prefer more “seasoned” books.

I was not disappointed. “Bad Blood” is written by WSJ journalist John Carreyrou who also broke the initial story on Theranos, the once high-flying Silicon Valley Tech startup.

Theranos, founded by charismatic Elisabeth Holmes in her early 20s promised to disrupt the blood testing business by only requiring a few drops of blood and then be able to test for any kind of analysis that would be required.

What happened is the typical story of almost any scandal I had read about:

Things don’t go as quickly as planned, but to “keep the momentum” management overpromises and underdelivers on a constant basis. Then, caught into their own web of overpromising, management starts to lie and soon things get out of control. In order to cover up the many shortcoming, Theranos did everything to threaten and silence both, employees and anyone else who dared to say anything remotely negative about the company.

The company and Holmes even got so far  that once they knew that something was coming from the WSJ, they managed to get Rupert Murdoch to invest privately 150 mn USD into Theranos and then tried to talk him into stopping the story at the WSJ, which he owned at that time, however without success.

At the end of the day, despite the claims from Theranos, their “finger tip” blood testing never really worked. They actually used standard testing equipment when they ran their trial with Walgreen but claimed it was the result of their own machines.

The book itself starts relatively slowly with the background stories of many of Theranos’ early employees, but at the 50% mark in my Kindle, the story reads like a mix of “The Firm” and “Suits” with criminal management, aggressive “Harvey Specter” like lawyers, private investigators etc.

My learnings from this book:

Although it is always astonishing to see how long and how far such frauds go, there are some patterns that one finds in those situations and which also showed up in the Theranos case:

  • Charismatic founders
  • a “world-changing” idea and powerful story that looks good on power point
  • an impressive board with many prominent (but non-expert) members who are mostly on board because of the charismatic founder
  • early investors with a good name but little or new due diligence (sometimes even friends of her family)
  • later stage investors with even better names that rely on the early investors
  • the absence of 1st class investors that have deep technical knowledge
  • Not disclosing details to investors because of “Trade secrets”
  • over eager corporates who sign deals because of the fear of missing out and help the (fraud) company to become credible
  • “Discounts” to certain investors to get them on board more easily
  • high fluctuation of employees
  • Some people have doubts early on but get silenced because so many famous people are already involved



Overall I can recommend the book highly to anyone interested in (detecting) fraud, Venture Capital and “Suits”.





Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.