"Bad Blood" by John Carreyrou - a Market Force Book Review

Don’t try to be the next Steve Jobs. Be the “next”you….

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Don’t try to be the next Steve Jobs. Be the “next”you.

There are many morals to learn from this fast-paced and true story but the above moral is one  of the more obvious. When we try to be someone we’re not, we might attempt to do things which go beyond what’s right. 

Story: Elizabeth Holmes, a sophomore at Stanford University, drops out of college in and starts Theranos, a company that promised to revolutionize the medical industry. Theranos developed a desk-top device that could produce hundreds of blood tests…from a single drop of blood. 

It was not out of the question to compare her ideas and charisma with Steve Jobs and other tech revolutionaries in Silicon Valley.  She was so compelling that she drew the investments and interests of such high-profile people and companies as George Shultz (President Reagan’s Secretary of State),  Walgreens, Larry Ellison, General James Mattis, Henry Kissinger and other notables. Her net worth climbed to over $4 billion. 

The problem? Her medical device was a sham.

Here’s a few lessons to learn: 

  1. Make a product or service that works and has the documentation and testing to back it up. Theranos promised a device could produce hundreds of blood tests from a single drop of blood. Their device was flawed. Badly flawed. They then asked their sales team and lab techs to lie about the blood testing. The result: nearly a million false test results and untold numbers of people received poor medical advice based on Theranos’ product. Many of the Theranos employees didn’t want to be a part of the charade and subsequently left the company or were fired. 

  2. Be open to being wrong. Don’t be so tied to one idea that it influences other decisions about your products or service. Ms. Holmes demanded that their device need only one drop of blood to produce hundreds of blood tests. She was stuck on this idea since she had a fear of needles. Her lab techs told her it was impossible to produce the type of blood tests without the blood being “diluted”. Even if the blood was “diluted”, the results were not accurate. However, Ms. Holmes wouldn’t listen to her experts. 

  3. Don’t hire a “bad cop” to deal with your employees. After you read about Ms. Holmes’ business partner, Ramesh “Sunny” Balwani, you’ll understand. When dealing with your team, do the opposite of everything this man did. 

  4. Even smart people make mistakes. Theranos’ investors and board members reads like a Dream Team of high-profile politicians, former CEO’s, medical practitioners, etc. How could this Dream Team be so wrong? There are many reasons but chief among them is greed, pride, and a lack of accountability. 

Although the story is available as an HBO Documentary film called The Inventor, read the book first. You’ll learn many valuable lessons about how to - or how not to - run a business.

Matt Gauerke