- The story and scandal of Theranos, the once multi-billion dollar startup which promised to revolutionize the medical industry by making blood tests quick, affordable, and available everywhere. Holmes promised the world but is now in the midst of lawsuits claiming fraud and deceit
- Holmes was evangelical in her mission to revolutionize blood testing but her knowledge about science and medicine was weak. She was able to convince investors, employees, customers, and partners that Theranos would eventually have the capabilities needed to revolutionize the blood testing industry do so but her ambition got the better of her. She ended up having to lie and deceive everyone involved to keep the company going. Elizabeth was wildly ambitious since she was a child and idolized Steve Jobs and his impact on the world.
- People are more lemming-like than they would like to admit. Dozens of very intelligent people were mesmerized by Holmes’ charisma, ambition to change the world, and intellect. They wanted her to succeed so badly and help the world (and get rich too) that they ignored blatant signs and warnings that things were off. Be careful of what your biases are and what you are too emotionally attached to. They can blind you and make you irrational if they’re not kept in check
- Few people truly do the difficult work necessary to understand things. In this case, people saw Theranos’ Board of Directors such as General Mattis, Henry Kissinger, famous lawyer David Boies, George Schultz, and others and assumed that their involvement was a stamp of legitimacy. At its height, Theranos reached a valuation of over $9 billion which made Holmes’ stake worth nearly $5 billion
- Amazing to see how outright lies, deceptive marketing, and hiding of information still didn’t keep people from investing and going all in on Theranos. It was clear to many both inside and outside the company that their claims and projections were wildly overblown but when greed, envy, FOMO, and a desire to change the world overlap, you get extreme behavior (lollapalooza effects)
- Tyler Schultz, grandson of Board Member George Schultz, started at Theranos full time after graduating from Stanford. Not long after starting, he realized that not all was right. He asked questions and wanted to quit but his grandfather urged him to stay a little longer. He did eventually quit and was a key resource in exposing the details. His family spent over $400k just in legal fees but his courage allowed for the word to spread and potentially saved many lives since Theranos was in the process of rolling out their mini-labs to partners such as Walgreens and Safe Way.
- She may not have set out to defraud investors or injure patients, but her blind desire to be the next Steve Jobs and to revolutionize the world made her susceptible to cut corners, lie, manipulate others, and do whatever it took to try to make Theranos successful.
What I got out of it
- Extremes in outcome, good or bad, often instruct best (Munger). This is definitely the case here. Holmes and Sunny Balwani ran an oppressive, secretive, bullying, fear-based, and dictatorial company which fired or marginalized anyone who wasn’t blindly committed. They promised the world but ended with lawsuits Beware of what your biases are and what you are very emotionally attached to. They lead to blindspots which can cause mistakes