Theranos, the company started in 2003 by Stanford drop-out, Elizabeth Holmes, went on to receive over 600 million dollars in funding. The company was creating blood analysers that could run hundreds of tests just from a finger prick in the comfort of your own home. However, this story isn’t one of great success or inspiration. This story is about deceit, fraud, manipulation and a CEO who would stop at nothing to get to her goal. This is the story of Theranos, a company once worth 9 billion dollars and how it all came crashing down. Elizabeth Holmes was born to a well-connected family with a rich history. Both parents worked in the government and her father also worked at the infamous Enron during its implosion in 2001. From a young age, Elizabeth knew what she wanted in life, to be a billionaire. Her competitiveness was evident from a young age. Forcing her brother and cousin keep playing monopoly to the dire end when she was winning. When she lost she would storm out, on occasion breaking the screen door as she exited in a fury. At age 18 she went on a Stanford run tour of China where she met a man 20 years her senior called Sunny. Sunny immigrated from Pakistan and had some success in the dot-com boom of 1999, pocketing 40 million from the sale of a company called CommerceBid.com. Sunny had what she wanted. Money and the status of a successful entrepreneur. After another trip to Asia, during the SARS outbreak, she came home determined to change the world. She didn’t leave her room for 5 days, sleeping 2 hours a night while she worked on a patent idea. The idea was to create a wearable patch which could continuously test the blood of the wearer and admit the right dose of medicine in real time. Her Stanford professor Channing Robertson was amazed at her drive and ingenuity. He encouraged her to pursue her idea. She dropped out of Stanford soon after and started a company called real life cures with Shaunak, a Stanford PhD graduate. When she filed the paperwork for the company the name was misspelled to “real life curses”. She didn’t know it then, but it would be a fitting name for the company. The early days were not glamorous. The company had an office on the wrong side of the train tracks. Elizabeth’s driver-side window was even shot through one time, the bullet just missing her. She received a 1-million-dollar seed investment from her old neighbour, who happened to run a prominent venture capitalist firm. She also secured investment from an old friend of her fathers from the government. Elizabeth rode on the reputation of these early investors. But when she went to speak to MedVenture, a firm who specialised in funding medical start-ups, they didn’t buy into her vision. She had difficulty answering questions about potential technology and implementation. Her lack of knowledge was showing, having spent only a few semesters at university. But by the end of the year, she had nearly 6 million dollars in funding and the idea morphed into a cartridge and reader system rather than patches. Patients would prick their fingers, storing the blood in a small cartridge and push it into a machine which would perform the tests. People could do this from their own homes and have accurate fast results. Skipping forward to 2006, the company now called Theranos, had some momentum and a prototype called the Theranos 1.0. Elizabeth enlisted engineers to design a new version which was initially called the gluebot, but later would be donned the “Edison”. Elizabeth started to push the engineering team manager to make the development run 24/7. When he refused, stating the engineers were overworked as is, Elizabeth hired a completely parallel engineering team and pitted them against each other in a survival of the fittest race. This resulted in the losing team being fired, every single one of them. Elizabeth also began doing some ethically questionable things, such as running a pilot test on cancer patients in Tennessee with Pfizer. Her constant push to commercialise the product that wasn’t ready made some employees question her moral judgement. She knew the product didn’t work yet but insisted on running real tests on people who had serious illnesses. Of course, the only reason Pfizer partnered the pilot was because Elizabeth had been outright lying to investors and potential clients about how well her product worked for several years now. The reality was that it didn’t work and was still in development. In fact, that same year, Theranos CFO found out that she had been lying to investors and told her that they cannot do that anymore. She fired him on the spot. Later using explicit material found on his computer as the reason for the firing and blackmailing him out of accessing his Theranos stock. In 2007, there was no bigger Silicon Valley star than Steve Jobs. Elizabeth had started to develop an obsession with Jobs. An employee even found a newspaper cut-out on her desk where someone called her “the next Steve Jobs”. She insisted on having meetings with Job’s former marketing agency on Wednesdays when she found out that’s when he scheduled them. She even went out and recruited a few Apple employees. This included pulling Avie Tevanian out of retirement to join the Theranos board. He was one of jobs oldest friends and the former senior vice president of software at Apple. The board was made up of a star-studded panel. Don Lucas was the chairman, who mentored Larry Ellison the founder of Oracle. Larry had also invested in the company and constantly gave Elizabeth advice. Channing Robertson, her old professor at Stanford sat on the board along with other big names. One day Elizabeth wanted to restructure the company shares for tax purposes, however coincidentally this would give her the majority voting rights. Avie didn’t think this was a good idea and paired with information he’d received from employees about the discrepancies in the tests he felt like he had to do something. He spoke with Don Lucas, the chairman, but this resulted in Avie resigning after his advice fell on deaf ears. Elizbeth had the board wrapped around her finger, she was a master manipulator. She also spoke in a low baritone voice in an attempt to be taken more seriously by people. On occasion, she forgot to put the voice on and was caught using her higher pitched natural voice, before quickly realising and dropping several tones. The company moved to a prime location in Silicon Valley in 2007. Todd Surey had just joined the sales team and soon found out that financial projections were based off over-inflated pilot tests. Clients hadn’t actually committed much money unless the pilot was successful. Todd and the companies lawyer Michael brought this to the board, who ran an emergency meeting and decided to fire Elizabeth. Two hours after they brought her in to tell her their decision, she had convinced them to reverse it. This persuasion power is the reason that Thermos went so far with no real working technology. Shortly after that meeting, Elizabeth fired both Todd and Michael. By this stage employees leaving or being fired was common. In fact, all of the employees who came from Apple would leave with a couple of years. Elizabeth also later hired her brother and a bunch of his frat friends who would be known as the “frat pack”. She trusted them and they would go on to do a lot of her dirty bidding. Around this time an old family friend Richard Fuisz created a patent for the method of transmitting information from blood testing machines to doctors. He did this out of revengeful spite for not being asked for advice when Elizabeth started a company in his field of expertise. He was a doctor who sold his medical demonstration video company for 50 million dollars. His vengeance was on display when he launched an attack on Vernon Loucks, CEO of Baxter, who purchased his company. Loucks fired Fuisz for supposedly refusing to pay a bribe to the Saudi government. The matter was settled for $800,000 but because Loucks didn’t shake his hand, Fuisz went after him again. Fuisz also worked for the CIA who used his fake company in the middle east and his connections to carry out tasks outside of government regulations. Using this company Fuisz was able to retrieve incriminating documents against Loucks which showed he joined the boycott of Israel to gain business from the Arab states. As a result, Baxter was fined 6.6 million dollars and lost a 50 million dollar contract. But that wasn’t enough, he also gave this info to a pro-Israel student group at Yale. Loucks attended Yale's commencement exercises as a Yale Trustee, a position on Yale's governing body. A protest met him from the student group and Fuisz even paid to fly a plane with a banner “Resign Loucks”. Three months later he stepped down from Yale. In a few years’ time, Fuisz would go to court with Theranos over the patent he made. By 2009, Sunny who was now Elizabeth’s boyfriend had joined the company as second in charge. He drove a black Lamborghini and Porsche both with customised number-plates. Sunny came from a software background and had little knowledge of the workings of a medical company. He claimed to have written 1 million lines of code while at Microsoft, but the average developer at Microsoft wrote 1000 lines a year. Sunny boasted about his wealth saying he only comes into work because he wants to. He had a habit of latching onto buzzwords and using them when he didn’t have knowledge of the topic. Engineers even started using terms out of context to see if he would continue to use them, which he did. Sunny also thought the element of potassium was represented by P instead of K. He travelled to both Thailand and Mexico to test out the machines in swine flu clinics, on both occasions the employees which had to spend several weeks with him quit when they returned. The machine was simply not ready for use but Sunny without a good knowledge of engineering just blamed the Wi-Fi. There were even rumours that he was bribing people for infected blood and according to many accounts he was a very dis-likeable person. Despite the recent 2008 global financial crisis, in 2010 money was pouring into Silicon Valley. Facebook, Twitter, Uber were all kicking off. Low-interest rates had made government bonds unattractive and investors who didn’t know anything about technology were happy to make bets in the valley. Walgreens and Safeway had both entered talks with Theranos to partner and create “wellness centres” in their stores where patients could get blood tests. Theranos presented Walgreens with 192 different tests that could be performed by the Edison. However only about half of them were possible by the medical testing method the machine used. The only proof that the technology worked was a review from John Hopkins Medical School. But the document was 2 pages long and summarised a meeting where Theranos showed the university representatives data on test performance. No actual testing of the machines themselves. The university described the technology as “novel and sound” but it had a disclaimer that this was to “in no way signifies endorsement of any product or service”. A Walgreens consultant at the meeting raised issues to the company, but the Walgreens had a fear of missing out and letting their competitors land a partnership. Regardless, Elizabeth made such an impression on the Walgreens and Safeway executives that they trusted every word she said. Combined, Safeway and Walgreens gave Theranos 105 million dollars in investment and loans. Elizabeth realised that Edison wasn’t good enough, so she commissioned the minilab. This was to be the third iteration of the product which so far wasn’t anywhere near the quality she claimed it was and certainly not ready for commercialisation. There were several issues that made the machines nearly impossible. Firstly, the blood from capillaries such as the tip of a finger was contaminated by surrounding tissue, unlike the vein. Extracting blood from the finger required force, this caused red blood cells to burst and release potassium. The vision was to have one drop of blood to use on all the tests, but it simply wasn’t possible with the current technology. So, watering down the blood to increase the volume became the solution. This caused more inaccuracy of the results. This difficult technology was made harder to deliver because of Sunny and Elizabeth’s management. The different groups in the company were not encouraged to talk to each other and only reported upwards to Sunny and Elizabeth. Moreover, Elizabeth’s constant push to commercialise made the process rushed and patched together. Sunny meanwhile intimidated employees and watched CCTV see exactly how long people were working. One time telling an employee he would “fix him” after finding him working only 8 hours per day. Elizabeth backed up this dedication stating to employees “If anyone here believes you are not working on the best thing humans have ever built or if you’re cynical, then you should leave”. By 2012, Safeway wasn’t doing well. They made floor-space available in their stores for the launch of Theranos devices. The launch kept being pushed back and Safeway had already spent 350 million dollars on renovations. Theranos claimed the delays on several things, one was the earthquake in Japan had somehow slowed them down. Their level or secrecy made it difficult to ask any questions. They often hid behind this wall of “proprietary knowledge” to get out of questions they didn’t want to answer. When Theranos started accepting Safeway employees blood samples they were extracted at the wellness centre at Safeway HQ and sent to the Theranos labs where they were tested. The tests were performed mostly on commercially available machines and only some on the Edison. However, the illusion was that Theranos machines performed all the tests. When results started coming back erratic, the CEO Steven Burd, played it off and said that the technology was solid. But Burd had investors to answer to and after pushing back the launch for a year he resigned and retired. Elizabeth kept moving forward trying to get contracts. She met Jim “Maddog” Mattis, the head of the US central command and convinced him to test the devices in Afghanistan. This resulted in the military requiring FDA approval. After the military enquired to the Food and Drug Administration (FDA) they approached CMS (Centres for Medicare and Medicaid services) who conducted a surprise inspection of their lab, finding minor issues. But now, the CMS and FDA were aware of Theranos. For a long time, Thernos tried to conduct their work without regulators but soon they would have to face them head-on. The military understood that FDA approval was a while away so they compromised to offer Theranos a trial of stored blood samples from their database, Theranos never accepted this opportunity. Meanwhile, Theranos’ lawsuit of Fuisz, was in full swing. Headed by David Boies, the lawyer that worked the deposition of Bill Gates, represented Al Gore and stopped a ban on gay marriage in California. He was said to cost $1000/hr and was one of the most feared lawyers in the US. Boies would also pocket 4.5 million dollars in Theranos shares for the job. A sad moment in the trial came with the subpoena of Ian Gibbons. He led the chemistry team at Theranos from 2005. He was notified by Theranos on May 15th, 2013, that in two days’ time he would need to go to the Fuisz lawyers and be deposed for the Fuisz trial. He feared that anything he might say may cost him his career as it could reveal that the original patents with Elizabeth’s name were void. If it was found that she didn’t have enough knowledge to generate them, which he believed to be true. He was instructed by the company to get a doctor’s note to postpone the deposition. He was already mentally unwell, having been demoted. He felt useless at Theranos but feared leaving as at 67 he didn’t think he could get another job. The next morning, Ian’s wife Rochelle found him in the bathroom having overdosed on medication. He died a week later in hospital. Back at Theranos, Elizabeth didn’t return Rochelle’s call about the death of her husband. Elizabeth informed only a small number of employees of Ian’s passing and loosely hinted to hosting a service, which never was carried out. She seemed to have just brushed it off as a casualty. After spending 2 million dollars on the case, Fuisz settled in a massive blow to his pride. This would fuel the fire in Fuisz’s pride that would eventually bring Theranos down. As the minilab was a while form being completed, the engineers went back to Theranos 1.0 to try to revamp the first iteration of the technology. They ended up re-engineering the commercial Siemens machines instead and patching together a laboratory where most of the tests were still done on third-party commercial machines. Theranos also took 6 minilabs and stacked them on top of each other in an attempt to get a higher throughput of tests. Neglecting the impact of the additional heat generated on the performance of the machines. But Theranos didn’t have time to work on their technology, they already promised their machines to the world. They had a 140-million-dollar contract with Walgreens which required them to launch by February 2013. Into 2013, the lies continued, Sunny told investors financial forecasts which were 10 times higher than the internal forecasts. They were also operating without a CFO for the last 7 years. Theranos’ board as always was stacked with high profile and reputable names, so no one doubted the company. Former US secretary of state, Henry Kissinger. Former director of US Office of Management and Budget, George Shultz. Military general Jim Maddog Mattis had all joined the board. The company was very politically connected, Elizabeth even threw Hillary Clinton a fundraiser for her 2016 campaign and was known to be a friend of the Clintons. Money kept pouring in. Partner fund brought 94 million dollars in shares. Rupert Murdoch chipped in for 125 million. The Walmart brothers put in 150 million and the DeVos family put in 100 million. This gave Theranos a 9-billion-dollar valuation, Elizabeth was worth 5 billion alone. The shortcomings of the technology were well known within the company, but employees were usually too scared to do anything. Fearing retaliation from Sunny, Elizabeth or Boies the company lawyer. All of the employees signed confidentially and non-disclosure agreements when they started and again when they left. This stopped a lot of people from taking action. Tyler Shultz, the grandson of board member George Shultz, was in a more privileged position. He noticed the issues at Theranos and after falling on Sunny and Elizabeth’s deaf ears, he quit. He tried to talk to his grandfather. He told George about the Edison’s inaccuracy and their constant failing of quality control tests. He also told him about how Theranos had duped the lab proficiency testing from the regulating authorities by testing their samples on third-party commercial machines and not on the Edisons during the lab re-certification tests. However, Elizabeth had put such a spell on George that he would disregard anything Tyler was saying. Mid 2014, Fortune magazine released a front-page story titled “This CEO is Out for Blood”. This rockets Elizabeth to celebrity status and from that point on she is constantly making media appearances. Forbes, USA Today, Glamour, NPR, Fox Business, CNBC, CNN, and CBS News all took their turn to cover the success story of the youngest ever self-made female billionaire. Obama made her the US ambassador for global entrepreneurship and was she was added to the board of fellows at Harvard medical school. Elizabeth enjoyed the fame, she grew her security team to 20 and took another page out of Steve Jobs book by renting a new SUV every 6 months to avoid having plates. Her office was redesigned to look like the president’s oval office with bulletproof glass. She spoke on a Ted talk about her idea to change the world. She said no one would have to say goodbye too soon and told the audience of a heartfelt story of her uncle who passed away from cancer. In reality, she wasn’t close to her uncle and exploited his death just for the narrative. Meanwhile, the cracks were beginning that would crumble the empire. Alan Beam the lab director had enough. He was asked to convince to yet another doctor complaining about the accuracy of the results, that they were correct. He refused and resigned. He sent himself 175 emails from his conversations at Theranos as evidence. However, Sunny had monitored the emails and forced him to delete them by the threat of a lengthy and costly lawsuit headed by Boies. At the same time, Fuisz was still bitter about Theranos and was in contact with Rochelle, Ian’s widow, about what she knew about the technology. Fuisz also got in contact with Alan who spilled a lot of information to him about the inner workings of the company. Fuisz had a small group of Theranos sceptics and along with Adam Clapper, a pathologist and blogger, they got in contact with John Carreyrou, an investigative journalist at the Wall Street Journal. As Carreyrou began investigating, countless sources and former employees came out of the woodwork to anonymously provide information about the story. Theranos wasn’t going to take this. They attacked everyone associated with the story. The sued Tyler Shultz and threatened to sue everyone else who spoke to the WSJ. They hired private investigators to stalk everyone they suspected talking to the Wall Street Journal. Several letters were sent by Boies to the wall street journal to try to kill the story, threatening defamation lawsuits. Rupert Murdoch, the owner of the WSJ, who had also invested in Theranos was asked by Elizabeth personally to kill the story. He refused, stating he had confidence in his editors to handle the truth, whatever that may be. The reaction from Theranos was intense, however, the story wasn’t even out yet. Business as usual continued at Theranos, Elizabeth was making white house appearances often. Sunny was balancing out bad ex-employee reviews on Glassdoor by getting HR to write fake positive reviews. The machines were still inaccurate and could only do a small number of the tests. Theranos continued to demonstrate the minilab for VIP guests, pricking their finger, then waiting until they left to use the commercial lab machines from other companies to do the test and return the results. In order to look like they were doing the right thing, they petitioned for all companies to get FDA approval, appearing to not fear regulation. Vice president Joe Biden even paid Theranos a visit. He was shown a fake lab, set up just for the visit. He said that it was “the lab of the future” praising Theranos for actively seeking FDA approval. The story was released in the wall street journal on October 15th, 2015. All of the major news sources picked it up. People began questioning Theranos, its secrecy, its validity and the technology. Elizabeth took it all in her stride, not shying away from the questions but instead outright lying in public forums. It appeared as though she thought everyone would just believe her again. But now people were asking serious questions. Just before the story was published, the FDA made a surprise inspection at Theranos. They sized the nanotainer, the cartridge used to capture the blood from finger pricking, stating that it was an unapproved medical device. CMS also conducted an inspection. They found the lab a mess and concluded that the Edison only performed 12 out of 250 tests, and those produced wildly erratic results. Now Theranos was in full damage control. Elizabeth broke up with Sunny and fired him. A criminal investigation was underway and a probe by the securities and exchange commission was also proceeding. The investors began suing Theranos, one by one. Partner fund sued for 100 million, Walgreens for 140 million. Elizabeth had to close the lab and pay 4.5 million to Arizona state where most the patients had been tested from. Theranos voided nearly a million lab results. Soon Boies stopped representing Theranos. Ten patients sued Theranos for medical battery. Amongst all of this Elizabeth never apologised. She had potentially hurt a lot of people by providing incorrect lab results which doctors based 70% of their decisions on. It seemed to her, merely just a mistake along the way which could be fixed. The SEC settled with Elizabeth Holmes on March 2018. She lost voting control, had to give away a portion of her stock and was banned for 10 years from being an officer or director of a public company. Sunny hadn’t reached a settlement with the SEC. Being 20 years older than Elizabeth, perhaps Sunny mentored Elizabeth to become a tool for his bidding. But its more likely that Elizabeth is the one in control. She was the one who brought in the investors. She manipulated the board to give her 99.7% of the voting rights. She never told the board that she was in a romantic relationship with her second in charge. She had lied to the board, investors and clients. She knew the machines didn’t work but that didn’t stop anything. Her fake it till you make it plan had reached its end. Sunny, along with being horrifically disliked, lied and cheated everyone along the way. But make no mistake that this was Elizabeth’s company. In her relentless quest to change the world and in the process get fame and riches, she didn’t discriminate who or what got in her way. Theranos was dissolved in September 2018. Both Sunny and Elizabeth have been indicted on criminal charges in an ongoing lawsuit at the time of this video. They both pleaded not guilty and each face 20 years in prison.