We've had a great opportunity
in asking so many people so many questions
about things ranging from the future to, kind of, advice,
and we thought we'd ask a few questions
that run a little bit of a gamut, really quickly,
- Mm, Okay, - Can you look into the lens?
We thought it would be interesting to ask you,
in the year 2025,
what's the thing you're most certain about?
More people will have access to their own health information,
What do you dream for? Something in 2025?
That less people have to say goodbye too soon
to people they love,
That's great, Can you tell us a secret?
I don't have many secrets, Um,,,
Are you a scientist or a technologist?
Or an entrepreneur?
I think I'm an entrepreneur,
I was trained as an engineer,
but,,, now my time is spent
on doing whatever it takes to realize this mission,
Theranos is the integration
of the words therapy and diagnosis,
And if we can shift toward a model in which
we're determining the onset of disease
in time for therapy to be effective,
we will change outcomes,
You founded this company 12 years ago, right?
Tell 'em how old you were,
- I was 19, - Yeah,
There was never sort of a plan
to drop out of Stanford, but I found what I loved,
I found what I wanted to spend my life doing,
Elizabeth has raised more than $400 million,
The company is valued at $9 billion,
You own over 50% of it, right?
Congratulations on that,
We've got an incredible opportunity to try to uphold
a legacy in Silicon Valley of changing the world,
And we like to think about it as a movie,
and you can begin to see that story in a better way,
We see a world in which every person
has access
to actionable health information
at the time it matters,
A world in which
no one ever has to say,
"If only I'd known sooner,"
A world in which
no one ever has to say goodbye too soon,
This future
is beginning now,
Nestled in the foothills above Silicon Valley,
there is a 700-acre plot of land
called the Stanford Research Park,
According to the website, it's a community of and for people
who seek to invent the future,
From here came elements of the microwave tube,
the mainframe computer, and the International Space Station,
Steve Jobs spent time here,
so did Mark Zuckerberg and Elon Musk,
Elizabeth Holmes saw herself in their company,
So in the fall of 2014, she moved her biotech startup
Theranos to the research park,
The company employed 800 people
and was valued at nearly $10 billion,
Four years later, it was worth less than zero,
To understand what happened,
it pays to look past the price of the stock
to the value of the story,
This compelling tale of divining hundreds of diseases from a drop of blood
was a testament to the imagination of the inventor,
In the deserted property she designed,
you can almost hear the echoes of her ambition
and see how glass walls, promising transparency,
could become a labyrinth of mirrors,
Was Elizabeth lost in a landscape
between what she could make real
and the world of make-believe?
For me, this was a story of how people get trapped
over time with trading off human values,
And then, the way that they trade off those values
change them as people and things go down,
So part of it was trying to understand,,,
and I think this is part of the story,,,
is the journey for Elizabeth,
Some people take a path,
trying to do positive things for the world, right?
Nobody questions that her motives were,,,
were positive, but end up being something bad,
How do we react to this?
You can look at her at the end,
and say how could she do this,
but I think that would miss the point
if you don't understand the journey,
If you look at her from the beginning,
it will be a cautionary tale about all of us,
I grew up spending summers
and the holidays with my uncle,
I remember how much he loved the beach,
I remember how much I loved him,
He was diagnosed one day with skin cancer,
which all of a sudden was brain cancer,
and in his bones,
He didn't live to see his son grow up,
and I never got to say goodbye,
The right to protect the health and well-being
of every person, of those we love,
is a basic human right,
Over the course of the last 11 years,
we've made it possible to run
comprehensive laboratory tests
from a few drops of blood
that could be taken from a finger,
And we've made it possible
to eliminate the tubes and tubes of blood
that traditionally have to be drawn from an arm,
and replaced it with the nanotainer,
And if I had one wish,
standing here with all of you,
it would be that no one has to go through the pain
of traditional phlebotomy,
I was always,,,
absolutely terrified of giving blood,
It's the only thing in my life I've ever been scared of,
If we were to sit here and dream up torture experiments,
psychologically, the concept of sticking large needles
over and over into someone,
and draining out so much blood,
while they're watching this blood being sucked out of them,
that you've basically completely debilitated them,
that qualifies as a pretty good torture experiment in my book,
I find it quite disturbing,
This technician is preparing the blood sample
for a white cell count,
She dilutes the blood with a special fluid
and puts a measured amount into a pipette,
Since, really, the clinical lab infrastructure
began to develop, we've had this highly centralized,
very big, analytical instruments
which require that much blood,
and therefore, people have had to take tubes and tubes
every time they do a blood draw,
So, laboratory testing hasn't changed since the 1950s,
It's the closest thing to mainframe computers versus,,,
it's not even PCs,,, versus mobile phones that,,,
that I've ever seen, right?
So, the timing is very ripe to change this paradigm,
There's no shortcut to really hard work,
And we learn so much more from our failures
than we did from our successes,
We code-named our product "The Edison"
because we assumed we'd have to fail 10,000 times
to get it to work the 10,001st,
And we did,
What does it mean to invent something?
It could be an act of creation,
or an act of deception,
The world's greatest inventor did both,
We think of Thomas Edison
as the inventor of the phonograph,
the electric light bulb, and the way we look at the world,
Edison's company made one of the first motion picture cameras
and the very first commercial movie, Blacksmithing Scene,
His company produced over 1,200 films,
documentaries and fiction films,
including the first screen kiss,
But Edison's greatest invention may have been himself,
The first celebrity businessman,
Edison's secret was knowing how to tell a good story,
in which he cast himself as the main character,
"The Wizard of Menlo Park,"
a man who could conjure anything in his laboratory,
He had his name on over 2,000 patents,
from telegraphs to vacuum pumps
to electric cars,
But he often promised far more than he could deliver,
In 1878, the New York Sun printed a claim by Edison
that he had solved the mystery of the incandescent light bulb,
But it wasn't true,
His filaments kept melting,
When reporters and investors
asked for demonstrations, he faked them,
To keep journalists sympathetic,
he gave them stock in his company,
For four years, he pretended his invention was good to go,
even while he scrambled to make it work,
Then, just before his money and credit ran out,
he solved the problem of how to keep the lights on,
He was the first to practice the Silicon Valley art
of "fake it till you make it,"
More than a hundred years after Edison's first movies,
Elizabeth Holmes modeled her own ambitious career
after the great American inventor,
with a magical machine named after the man himself,
It was obviously such an incredible story,
The 19-year-old, the dropout,
a woman creating this $9 billion
innovative company,
I went out there for four days:
three interviewing her and one interviewing some other people,
What are you working on?
When she was talking about some subject
other than diagnostic testing,
she was very unprepossessing,
very ingenuous,
When she began to talk about,,,
the mission, or the, you know, her business,
then there was a shift,
and she became very, very focused, very intense,
Firm control of all the facts,
No question surprised her,
Um,,, very impressive, and very idealistic,
We were the first to put on the cover
and write a major story about this amazing woman next to me,
"This CEO Is Out for Blood,"
This is Elizabeth's second
public live interview,,,
Fortune invited her to the Most Powerful Women's conference,
even though she wasn't the head of a Fortune 500 company,
And she was saying to us,
"I'm the only one of these people that founded a company,"
You know, "They're CEOs,
"yeah, but I founded this company,
"I invented what this company is about,
I deserve to be here,"
I'll talk with people sometimes, they'll say,
"Oh, you know, I want to start a business,"
And my question is always why,
because there's gotta be a mission,
I had heard about Theranos
and Elizabeth Holmes, a woman executive
in the male-dominated Silicon Valley,
who was starting a company
with some real potential social good,
I write a lot about disruption,
and Theranos was aimed to be a disruptor
of the established ways of doing things,
the established, inefficient,
and expensive ways of doing things,
And she was going to herald
a revolution in medical treatment in this country,
The lab industry needed disrupting,
It was dominated by two companies:
Quest and LabCorp,
Between them, they controlled almost 80% of the market,
Their blood test prices were always high and never transparent,
They were sued for overcharging Medicaid and Medicare
for billions of dollars,
But the size of their operations,
including the ability to do over a thousand different blood tests,
made them difficult to challenge,
Until Elizabeth Holmes and Edison,
She had built a staff of 700 people,
Well, I went out to look at the Newark, California, facility,
which was extraordinary,
Well, you know, her story's so compelling,
I mean, if you think about it, you go in and you see
this woman lives in an apartment,,,
basically, she called her apartment a mattress,
The only thing in the refrigerator was bottled water,
She ate all the meals at the office,
She slept four hours a day,
She worked in the office till midnight or thereabouts,
You ask, do you date? "No, I don't have ti,,,
I'm married to Theranos,"
That was her,,, that's literally her words,
what she said to me, and I believed it,
You wear black outfits a lot, Why?
Because in line with the,,,
designing my life to be able to give
every bit of energy I have to this,
I have a closet that has a very large number
of the exact same set of clothes,
and every single day,
I put the same thing on, and I don't have to think about it,
Steve Jobs used to say that, too,
He wore jeans,
She was obviously, you know,
Steve Jobs was her hero,
And I just felt, oh, well, she's a young person,
You know, I'll give them their little hero worship thing,
I'm a tremendous admirer of what Jobs did,
I think he was a genius,
I do have to disclose that
I've been in black turtlenecks since I was seven,
I want to talk for just a minute about
what it means to be in this company right now,
I was sitting yesterday with the president of Brazil for lunch,
and this woman had invited me,
and Eric Schmidt from Google, and Mark Zuckerberg,
and the Airbnb guys, and the Uber guys, and a bunch of other people,
and she sits down at the table with all these people,
and we all have the headphones on, translators,
and she says, "The strategic priority of Brazil
"is to get access to low cost diagnostics
"that can facilitate early detection
and prevention and,,,"
We're all kind of sitting there, and you can see, like,
all the other CEOs' faces being like,,,
not wanting to be the ones in the spotlight,
and she kept on doing this for like an hour and a half,
And so, of course, I'm trying to, you know, be humble,
but I'm,,,
When I first met her,
I thought she was really interesting,
It was,,, It was hard to really get a sense of who she was,
but in a way, I felt I idolized her in so many ways,
based on, like, the little that I had read,
Nice to meet you, I'm Elizabeth,
For being a woman in the sciences,
being a woman in tech,
the fact that she started her own company,
that really got me excited,
You know, she was a really good idol to have,
Thank you so much,
In a sense, I was super naive and like,
almost drank the Kool-Aid, like, a little too quickly,
and was just more enthusiastic to be a part of the team,
You all are part of something
that is a revolution, and you're part of something
that is going to change our world,
What higher purpose is there in life
than to be able to be doing that?
When I went on an interview,
Elizabeth was there,
And I was a little surprised,
considering I would be the low man on the totem pole,
I found out later there was no one
that got past her in order to get hired,
Um,,,
I know this sounds odd, but my first impression was
that she didn't blink,
And so, I always wanted to make sure that I kept
great eye contact 'cause I didn't want to be the one
to look over, right?
Uh, so, she was very intense,
Comparing it to the other interviews that I had
with other tech companies in the Bay Area, it was different,
You know, they didn't tell me nearly as much about what they were doing,
She never blinked during the interview,
She did tell me about
just the one drop of blood
and it's a medical testing company,
Um, they didn't say anything about how it worked,
or what the technology was,
They just said, "You'll be working with consumables,"
which was kind of vague,
How did they describe the project?
They didn't,
So, how did you know what you were signing on for?
You know, I had a very vague idea, but I didn't,
That's actually not that untypical in startup environments,
They want to keep what they're doing secret,
The response of the major lab companies
was to say, "Well, we don't know
- how they're doing what they're doing," And,,, - Exactly,
And if it's so great, why don't they show it?
There's too much secrecy is what they said,
Right, that's exactly what they said,
And, you know, our position on that is, first of all,
we don't think that we need
to explain ourselves to competitive companies,
What we're working to do is to invent an integrated solution
where every person gets access
to this wealth of information from tiny droplets of blood,
and then see how they change over time,
She talked some about currently,
you get a blood test maybe once a year,
and so you get a snapshot of what's going on,
If you were to start doing it every month, say,
you would get a movie,
You have multiple frames from that movie,
and you can begin to see the context
of projecting where someone is heading,
You're seeing changes in laboratory data over time,
and understanding the clinical significance of that,
The data can be used in a more meaningful way,
It was personalized medicine,
Maybe you could catch something very early,
You know, you could catch an early cancer,
or you could get,,, you know, when there was still time,
This was sort of the vast vision,
So, the idea with the Edison was to stick
the lab inside the box,
Because it incorporates so many different disciplines,
it's hard to pull this off,
There's all these different components
that go into the machine,
There's a centrifuge, there's a,,,
a little thing the samples go into,
There's a way to prick the blood,
All these things were prototypes, right?
The first thing is, you look at what the chemists are doing,
- Right, - Right?
Because you're automating what somebody is already doing,
You're not inventing something totally new,
I'm going to have to have a kind of dance, let's say, right?
I'm going to have to have this thing go to the place,
pick up something, drop off something,
mix something, etcetera,
The idea was the pipette
poked holes into these little plastic containers
with reagents in them,
It mixes some of the reagents with blood,
My group was responsible for developing
about 60 different tests,
and trying to get those to work on the Edisons,
The trick was how do you make it dependable,
then how do you incorporate it into a bigger process
that involves these 50 milliliter samples?
It was a complex device,
You know, a lot of moving parts, and a complicated system,
It's not easy to do all this stuff, so it was,,,
You know, I figured we'd get there,
We felt we were on the path
to be able to make machines that could do this,
Elizabeth Holmes, we're on the record unless you tell me not,
Let me begin, When you think about yourself as a child,,,
I had multiple interviews with her,
but one of them was to go to a Chinese restaurant in Palo Alto,
And it was really good food,
I had the blessing of being able to figure out
what I,,,
Thank you,,,wanted to do very early,
And I was very interested in the concept of creating things,
I must've been, like, seven, and I had a notebook
of a complete design for a time machine,
It was a very detailed drawing
of all the functionality, in terms of the interface,
I got really interested in the idea
of creating and building something,
But ultimately, it became clear to me
that the vehicle of a business provides
the greatest tool for being able to affect change,
I was very studious,
I never really watched TV,
As I went through school and went through high school,
my best friends were,,, were books,
I got into Moby Dick and The Iliad and The Odyssey
at a pretty young age,
Understanding how great people and great leaders
led groups of people,
So much changes in our society technologically,
but as humans, we don't change a lot, you know?
This is a high tech atmosphere around Stanford,
Internet, the startups, the biotech, and medicine,
I started on the faculty here in 1984,
I'm currently a tenured professor,
And I was on boards of companies,
many private and public companies,
and I started a couple of companies,
So, I tend to be sought out
by kids who have an interest in business,
And people have made fortunes,
Students, young people,
turn into multimillionaires,
It makes for an odd morality,
When I was at Stanford, I started to spend all my time
thinking about how you could build something
that would change what we know
in terms of early detection and prevention,
I filed my first patent,
One day, Elizabeth came to me
and she described her idea,
She wanted to incorporate microfluidics
and nanotechnology into a patch,
where you could sample the blood,
and detect an infection,
and then at that point, deliver antibiotics through it,
Well, you can't do that, It's impossible, physically,
Antibiotics are not potent, You cannot do that,
There's a reason you have a big IV bag when,,, Okay,
So I said, "Elizabeth, that's fun,
but I don't think that's going to work,"
She was a 19-year-old,
She never thought she had any limits,
She was going to conquer the world,
She came back twice, I think,
And I just really,,,
"I try to help students, but I just feel I can't help you,
"You're not listening,
but I'll help you find someone else to talk to,"
This used to be my advisor's office,
We got in,
From the very first time I met her,
it was very clear she was unusual,
I've taught thousands of students,
probably tens of thousands of students,
at Stanford, and,,,
I knew right away
that I was dealing with something very, very different,
Channing Robinson, the head of the science department
at Stanford, leaves his tenured position to work for her?
He just thought this woman was something special,
You know, gazing into her eyes,
and realizing that he was talking to the next,,,
Steve Jobs or Bill Gates,
There were some other names mentioned
during the course of our conversation, like Archimedes,
I actually, originally, did not intend to drop out of Stanford,
but I wasn't going to any classes, and so then,,,
,,,logistically, it just seemed like a waste of money,
The question was, as a 19-year-old, how do you go about the process
of convincing people that you know what you're doing,
and that you can pull it off, Um,,,
I think the first piece is realizing
that it's not necessarily about age, and,,,
um, people, like Steve Jobs, and Bill Gates,
and the Google guys,
and Michael Dell, and Larry Ellison,
and others, have demonstrated that,
You have to have the conviction
in yourself to be able to make something happen
because, ultimately, it's up to you,
You know, I don't think I would want to create
a society where people were not overconfident
in what they could achieve,
Like who would open a restaurant
if that was the case, or who would,,,
who would do a startup?
But I think this is really the issue,
is to say how do you become a person of vision
on one hand,
and how do you sell that vision
on the other hand,
but you also want to stay,,,
not realistic, but, you know, little closer to realistic
when the task needs it,
You have to be able not to buy your own bullshit,
Yes,
You incorporate the company in '04,
- Yeah, - What happened in the intervening nine years?
Our work during that period of time
was for pharmaceutical companies,
and for developing applications for the military,
But that model's going to evolve now
'cause we're at another inflection point
- in our life cycle,,, - But are you thinking about an IPO or,,,
Well, we really believe that there's value
in being a private company,
It's allowed us to not have to talk about,
you know, what we're doing until it's done and introduce,
you know, incredible innovation without,,,
Using just her story as the blueprint for success,
Holmes would convince private investors
to put up hundreds of millions of dollars
without ever looking at audited financial statements,
We like to think that investing is a rational equation,
a careful balance sheet of risk and reward,
But in fact, investors,
particularly ones who come in early,
are often guided by their gut,
Instead of relying on facts,
early investing can be more like a wing and a prayer,
The word credit comes from the Latin word credo,
which means "I believe,"
Some of the early believers included
a former head of software at Apple, Avie Tevanian,
Oracle's founder, Larry Ellison,
and a founding investor of Oracle, Don Lucas,
They conferred respectability on Elizabeth,
even though they had no record to go on,
just a vague belief that business and medicine
were in her blood,
I think she probably was 21 years old,
had no background in business,
but her great-grandfather was an entrepreneur,
So, that's on the entrepreneur's side,
but she was on the medical side,
Ah, turns out later
the hospital in there, where they live
is named after her great-uncle,
who was involved with medicine, so she came by both of these,,,
the two things that are necessary here,
one medicine and the other entrepreneur,,,
quite naturally,
I remember the day Elizabeth came in,
full of vim and vigor,
and said, "I'm dropping out of Stanford,"
And I knew her parents,
and I knew her and her brother as they were growing up,
She was a good friend of my daughter's,
I said, "Do your parents know
you're dropping out of Stanford?" She said,
"Yes, yes! And they agree, and it's a great thing,
"And I learned at Stanford
"how this whole health care thing is working,
and it's just not,"
And then she said, "I'm going to change health care
as we know it," I was all over it,
I thought that was a great opportunity,
I mean, Elizabeth was a family friend,
You'd known her since she was a little girl,
Did that go into your thinking,
in terms of your initial investment?
No, We've been,,, I've been in the venture business a long time,
I was the first investor in Tesla, first investor in Skype,
first investor in Baidu, first investor in Hotmail,
I always invest early,
I invest when I see a vision,
I see the opportunity,
and I see the person who I think can make it there,
I mean, we invest in, you know,
a girl and a dog, or two guys and a cat,
We just say, "Is this person going to dedicate their life,
and make something extraordinary happen?"
And yes, in that case, she was that person,
So, the reality is that data
just doesn't sit in our mind
as much as stories do,
It's almost like the glue that takes all of the data,
and even more important,
stories have emotions that data doesn't,
And emotions get people to,,,
to do all kinds of things, good and bad,
And if you think about the people who invested in her
with very little amount of data,
it's about having an emotional appeal and about having trust,
and believing the story, and being moved by this,
and being able to tell themselves a story,
For 10 years, we did this work, We didn't have a website,
We never put out a press release,
It was completely heads down,
When we got to a point in which we realized
that what we were doing could serve individuals,
I wanted to find the people
who were just strategically brilliant,
General Mattis, who was former
CENTCON Commander, is one of our board members,
Dick Kovacevich, who is
the former CEO of Wells Fargo is another,
Sam Nunn has done some incredible work
on nuclear threats as well as biothreats,
Bill Perry, former secretary of defense,
Henry Kissinger, former secretary of state,
And George Shultz,
who was secretary of state
and labor and secretary of treasury,
About three years ago, I looked at her and I said, "Well,
I'm about to have a meeting with a friend of my granddaughter,"
- Yes, - As soon as she started talking,
I did a double take,,,
I first met Elizabeth in my grandfather's living room,
So, he had called me up and said that he was going to have
some brilliant woman over to have a discussion,
He thought that I would be interested
in coming, so I went to his house,
It was me, my grandfather, Elizabeth,
and Dianne Feinstein was there as well,
Elizabeth kind of pitched her dream of changing the way
diagnostics is done, really revolutionizing the field,
Yeah, I was totally gung-ho about Theranos,
I was really excited about what she was talking about,
I really wanted to know what the technology was,
And I actually asked her, in that meeting,
if I could intern there over the summer,
I said, do you guys take interns?
Like, I want to work on this, This sounds amazing,
We think that,,,
there's going to be a revolution
in preventive medicine,
I mean, he had a really close relationship with Elizabeth,
She was almost like,,, becoming part of the family,
She was coming to our birthday parties and Christmases,
We think this is one of the most optimistic things
out there
about the health care system and its costs and its problems,
You talk to George Shultz, He's a very impressive man,
And I was impressed that he adopted her like a daughter,
He really believed in her,
From the outside, all you're thinking is,
wow, what a board!
Right? I mean, it's just impressive,
And they were really,,, And I talked to most of them,
They were impressed with,,, really impressed with her,
This is General Mattis, I assume we're on the record,
unless you tell me not, and I'll shut off this recorder,
- But,,, - Okay,
When you think of Elizabeth,
what are the first words that come to your mind?
First is integrity,
uh, competence,
and competence is both technical, scientific,
but also focused on human rights
in the most classical sense of what
human rights are about,
And all of a sudden, you have the ability to know
if someone is ill or not, I mean,
literally, within minutes of taking,,,
you know, a drop of blood,
And I mean, she is really,,,
a revolutionary in the truest sense,
It was quite amazing to spend time with these people,
They were talking about her as if she were Beethoven,
As if she was this rare creature
that maybe one in a century or two in a century come along,
who really can change the world,
And I remember when I interviewed Henry Kissinger,
I didn't trust him on medical stuff,
not to mention on Cambodia, but,,,
But when I asked him about her,
he described,,,
Excellent businesswoman,
Let me see that I can put this on speaker for a minute,
- Be easier for me, - Okay,
Yeah, but I don't know how to do that,
You put it on ho,,,
- How about it now? - I hear you loud and clear,
- You okay? - Perfect,
What's your impression of how she runs the board?
I'm told you once said that these board meetings,
which go on all day,,,
You know, whatever you think of Henry Kissinger,
he's met a lot of leaders, he's met a lot of world leaders,
he met a lot of corporate leaders,
I thought he might be a judge,
but the truth is that
none of these people were really in a position to know what,,,
- To judge 'cause they didn't have the qualifications, - Yeah, No, No,
She didn't really want scientific input
from what I could determine,
Engineering a bit more
'cause she was inventing an engineering device,
but not medicine,
She aligned herself with very powerful older men
who seemed to succumb to a certain charm, and,,,
those powerful men could influence people
in the government,
influence the Department of Defense,
When I asked her was this all about getting government contracts,
she danced around my questions about that,
Everything that we're doing
may go into certain work we do for the military,
which we really couldn't put on the record,
Well, off the record, we were doing some work
for the military, which we can talk about off the record,
Why would that be off the record?
You know, generally, our philosophy on these things is
talk about it if there's a purpose to talking about it,
and there just,,,
So, could you say anything about
the military contracts you have? I mean,,,
No,
When you,,, I'm going to make you feel guilty at some point,
You already have, You're good at it too,
In conversations, Elizabeth suggested
that she had contracts with the military,
In a mock-up of marketing materials,
Theranos invented a quote from General Mattis
about a battle plan to use Edisons
on wounded soldiers in combat zones,
but this never happened,
Before permitting Theranos to use the machines on soldiers,
Pentagon officials wanted to run their own tests,
but Elizabeth declined,
She had a policy of controlling demonstrations
and tightly guarding access
to the Edison prototypes,
I pressed them
repeatedly, and I wasn't allowed, and finally,
I persisted in asking, "I need to see the machine,"
And she said to me,
"All right, we'll let you see the machine,
but you have to agree not to describe the machine,"
It was downstairs,
in an area you couldn't see from all the glassed offices,
The lab is a large, labyrinthian place
bustling with chemists and technicians,
and housing rows of machines,
each easy for a single person to lift,
in which the container of blood is placed,
What exactly happens in the machine
is treated as a state secret,
and Holmes's description of the process
was comically vague,
A chemistry is performed,
so a chemical reaction occurs
and generates a signal
from the chemical interaction with the sample,
which is then translated into a result,,,
"Which is then reviewed by certified
laboratory personnel,"
End quote, She added that thanks to, quote,,,
Miniaturization
"and associated automation that we're able to,,,
handle these tiny samples,
All right, so,,,
Comments? Sunny?
So, I just want to expand a little bit
on a comment that Elizabeth made,
You know, we are a very conservative company
because we think
that you should get things done before you talk about them,
Right? And that's the culture we have created,
So, I just want all of you to remember
that when we come to work every day that we carry
that sense of mission in your hearts every single day,,,
Sunny was very successful
in the late '90s with a tech company
that sold for a lot of money,
He seemed kind of like a Mark Cuban character, potentially, to me,
in some ways, where he was at the right place, the right time,
Made a lot of money,
His expertise was software and IT,
What we are doing is really, really difficult
because we're going against an entire system
that doesn't believe that prevention is possible,
I always felt like Sunny was making a deal, you know?
Like, he knew the technology, but just enough to sell it,
To him, this was another home run that he was going to hit,
He was 49 and she was 30,
but she was the dominant figure in that relationship,
And when he talked about her,
he talked about her in a very deferential way,
that she was kind of a genius,
When he spoke about Elizabeth,
he was really,,, reverential,
"Elizabeth is the most important inventor of our times,"
You know, I think Sunny saw her as this iconic figure that he could never be,
and so he, I think, found this vehicle for him to advance himself in her,
and, you know, she was on board for it, too,
She lived with him at some condo in Palo Alto,
I thought that there was definitely
something going on behind the scenes there,
They certainly would leave together,
they'd come in at similar times,
They're always talking to each other,
offline, online, in meetings,
outside of meetings, They were very close,
It wasn't uncommon for Elizabeth and Sunny
to go to the Silicon Valley airport
and go off to some meeting,
They were going to go sell this thing,
go make a deal,
Without disclosing their romantic relationship to investors,
Elizabeth and Sunny flew off together to corporate presentations,
touting the potential of the Edison prototypes,
One company, Walgreens, loved the pitch,
In this 2010 PowerPoint,
Theranos showcased an early version of Edison,
a portable blood testing machine
that could be deployed in pharmacies all over the world,
Theranos boasted the device could,
"eliminate the need for a lab,"
by doing up to 200 tests in minutes
from a finger-prick drop of capillary blood,
It wasn't true then, but once Walgreens signed a contract,
Theranos struggled to make it true, constantly changing
the machine's color, shape, and mechanics,
Strangely, Walgreens never looked
inside any version of the magic box
to see if it could deliver what Theranos promised,
There's a great Martin Luther King quote,
"Take the first step in faith,
"You don't have to see the whole staircase,
just take the first step," Right?
And this is,,, this is the first step,
So, talk to me a little bit about the Edison machine,
How would you say it was working in terms of
the vision versus the reality?
Uh, poorly,
We couldn't regulate temperature very well,
We couldn't reproducibly transfer fluids,
We had all sorts of design changes constantly
that we were trying to fight against,
so it was a comedy of errors in a lot of ways,
The original concept was to make a machine
that, at least then, the chemists could work on
to further develop chemistry,
Over time, we were able to run a sequence
and we were able to get results,
Getting results means, you know,
I get a signal proportional to what I'm putting in,
It doesn't mean it's ready for prime time, right?
You're handling a lot of fluid in the machine,
Things got blood spilled all over them and got gunky,
Some of the donors that we had were,
you know, just people off the street
who need money, and I imagine that, you know,
there probably was a fair amount
of hepatitis and things like that,
And the device would freeze up in the middle of running a test,
and then I would have to reach in there with my hands,
There were needles within the device
that could puncture skin,
and there's reagents
and blood and everything spilling all over the place,
Blood that's just sitting there in the bottom of the vessel,
evaporating into the air in the room,
It was a mess inside,
Pieces of the device would literally fall off
in the middle of testing,
Centrifuges exploding inside of it
and things like that,
Obviously, they didn't want anybody
to actually see what was going on in there,
So, when we had demos, they would bring investors
or executives from some company to a room which would have
different styles of Edison they were prototyping,
They would do a fingerstick on the executives,
so they'd take a fingerstick of blood,
They would put the blood into the cartridge,
and then they would put the cartridge into this Edison,
They'd walk the executives out of the room to go give them a tour,
or to go have a meeting, or go have lunch or whatever,
and immediately afterwards, an engineer would run in,
grab the cartridge and bring it out to the lab,
where my team would do the assays at the bench,
We were on call, so this could be done in an hour,
We got reasonable data every time,
and then we would get those results,
the engineer would run into the room with the results,
and these guys would come back in and they'd say,
"Well, here's your results from running our tests,"
We had listed on the webpage, like, 200 different assays,
but we had no more than half of those actually validated to be working,
even in the lab at that point, let alone on the Edisons,
Because it's trying to do multiple analyses,
you need so much hardware inside the machine,
it was totally impractical,
They were very adamant about
the machine being this big, It's gotta be this big,
And I said,
"We can't do that,
"The laws of physics just
"are not going to permit us to cram all the stuff
"that we've decided needs to go in there into this little box,
Can the box be bigger?"
And a common response at Theranos
was something along the lines
of, "Well, maybe you're not,,,
"maybe you're not a Silicon Valley person,
"You should go work for some other company if you don't,,,
"if you don't believe in the vision
of the product,"
And what would start off
as a very serious brainstorming meeting would turn into
a two-hour conversation about
the name of the cloud that's going to process the information,
It's like, time out, How big does this box need to be
to abide by the laws of thermodynamics,
and actually function, and saves people's lives?
Maybe that's more important than the name of the cloud
that processes the information,
which I think ended up being Yoda or something,
- Was it Yoda? - I think so,
What's your favorite sound from the movie Star Wars?
Yoda,
What does Yoda sound like?
Yoda sounds like, "Do or do not, There is no try,"
You can't just bend your way around the laws of physics,
You can't just have a great marketing campaign,
and then get around these things,
Sunny and Elizabeth, they didn't care
that we figure out what's not working, or make sure
that we can actually solve these problems in a real way,
They always seemed to think that everything could happen
very fast, and if you said no,
then they just went around to find the next person
who would say yes,
And generally, they tended to start become younger
and less experienced, right?
"We're going to disrupt, We don't want people
"who are stuck in the old ways of actually,
"you know, validating experiments, and, you know,
doing things properly with documentation,"
One of those people who wanted things done properly
was Ian Gibbons,
The first experienced scientist hired by Theranos,
he was an expert in blood testing
and had done much of the work on the company's key patents,
to which Elizabeth had attached her name,
Ian was a Cambridge PhD,
He knew things the rest of us didn't know,
He would work with some of the younger chemists and scientists,
and help them with their experiments,
help them to design their experiments,
help them to analyze their data, interpret their data, etc,
He was just a wealth of knowledge, and it was,
you know, at the time, it kind of evolved, I knew him for two years,
and my opinion of him evolved only just to be better
because he was just trying to make the best of his situation,
Like, what I got to see there, I got to see how marginalized he was,
So, in about 2012,
Ian didn't have an office anymore,
I think he felt slighted by that,
He wasn't involved with decision-making,
He would look at data and he said things were not working,
Ian really got into bad shape with Sunny,,,
both Sunny and Elizabeth,
because there's so many things wrong with that technology,
And isn't that the point of someone like that being there,
to tell them why it wasn't going to work?
In early 2013, Theranos tried to prevent Ian
from having to testify in a patent lawsuit,
If he were to give evidence that Elizabeth wasn't
the inventor she claimed to be,
some of the company's patents might be invalidated,
As the date of his deposition approached,
he drank heavily and fell into a deep depression,
afraid that honesty might cost him his job,
Some time in 2013,
he wasn't in work anymore,
Elizabeth told him to stay at home
because I guess he was saying things aren't working,
That was what the story I was told,
Ian asked me if he thought that he was going to be fired,
and I told him yes,
Unfortunately,
And that was the night he killed himself,
He was so distraught over this stupid, um,,,
inter,,, uh, this,,,
patent case, misappropriation case,
and,,, not knowing what he was going to do with the rest of his life,
and that's why he committed suicide,
What was the reaction of the company
after Ian committed suicide?
Um, I don't know because they never communicated with me,
except to ask me to send back his confidential stuff,
I brought back his documents that he had at home,
and left them at the front desk,
Did you ever hear from Elizabeth Holmes again?
No,
If today were my last day on this Earth,
and I could say that
the people who've gone through hell
in being able to just get the test done
that they need to get care now don't,,,
I've done something in this world that
has made it a little bit of a better place, right?
But you've got to be protective about patent and all of that,
- We do,,, - But do you have something to worry about,
obviously, competitive businesses
always concerned about, you know,
- the ideas incorporated into products, - Sure,
You have to be on version 10
by the time anybody else is on version one,
- Yes, - And that's,,,
that's what our whole business is about, so,,,
So, you're paranoid?
- And you have to be, - We try to be, Yeah,
We want to be the most paranoid people on the planet,
Absolutely, Yeah,
For last two years,
year and a half, we come under attack,
you know, from outside, and,,,
it's usually Quest Diagnostics,
Their entire product strategy is lies, built around
getting people sick and then living off of their diseases,
And we are trying to change that, right?
So, it's really important that you all understand
that what we are doing here is so disruptive
that we will always be attacked,
The paranoia seemed to come from the belief that
someone's going to beat us to it, or someone's going to steal our ideas,
or we're not going to get the whole market,
There's a healthy degree of paranoia and secrecy,
but this was well beyond that,
There was security,
You couldn't go walk up into her office,
That just doesn't happen,
She had bulletproof glass on their exterior windows,
There were bodyguards waiting outside,
you know, couple guys at the front lobby,
And that increased more and more later on,
But, yeah, her and Sunny walk in at the same time every morning,
"Eagle One, Eagle Two's on their way,"
And soon as they start pulling in, "Okay, be ready,
Have the doors open,"
She was Eagle One, Sunny was Eagle Two,
Sunny supposedly
tracked all the key card entries and exits,
so you would be identified each time
you went into any area,
We would send e-mails,
not CC Sunny or Elizabeth,
and we would get a response back from Sunny,
And I remember that was a very big turning point for me,
where I was like, "You are being monitored, You are being watched,"
I found out that I was being keystroked,
That means that anything that I typed
was being watched internally,
It seems kind of extreme
for a receptionist, doesn't it?
- Did that happen to you anywhere else? - No,
And, of course, nondisclosure agreements had to be signed,
A giant stack of paperwork
saying you can't speak poorly about the company,
you're legally liable for any detriment caused
to the company, It's like, who's writing these contracts
and what are they trying to hide?
We weren't supposed to tell our families what we did,
We weren't supposed to talk about anything
that went on inside of Theranos,
Then, after a while,
people became paranoid of one another,
We became much more siloed,
Walking down the hallway, you'd say hi and the person would look
at the ceiling or the floor or anything to avoid eye contact
and not acknowledge you back,
Then the next person and the next person, and then you'd notice,
there'd be whole groups that just wouldn't,,, you were invisible to them,
It was very hard to communicate information sometimes
because there were so many blockades and silos
and this emphasis on secrecy,
If the people from the chemistry team could talk
about what was coming next from the engineering team,
they would've said, "Well, that's not going to solve the problem,"
but since everyone was working on it separately,
they could all keep working forever
without actually solving anything,
The mantra in Silicon Valley is, "Move fast, break things,"
and that is really dangerous
when people's lives are in the balance,
Silicon Valley is really good at making
a web-based e-mail client,
or really great at making a chat app with emojis on it,
A little mile when you kind of think about
what is all in that thing you're holding,
But Silicon Valley is trying to do things
where people's lives are on the line,
We're trying to make autonomous vehicles,
We're trying to make medical devices,
We're trying to do these things that if you don't do it right,
quite frankly, people can die,
You need to approach it with a different lens,
The problem is that when you're developing the future,
you don't know what the impact is going to be
because no one's seen this before,
And the testing ground is often just the general public,
In 2013, Theranos went live,
testing real patients in Arizona
as part of a partnership with Walgreens,
It was a risky move,
The Edison machines had problems,
and they weren't approved by regulators for in-store testing,
But Theranos was running out of money
and needed the Walgreens deal to attract new investors,
So, Elizabeth sold Walgreens on a stopgap plan
to launch the Wellness Centers without the Edisons,
Instead of testing blood on-site,
patients' samples would be sent to Palo Alto,
where Theranos had hastily constructed a clinical lab,
Many of the technicians were inexperienced,
When one lab director quit, Theranos replaced him
with a dermatologist,
Due in part to the Walgreens launch,
Theranos was able to raise
over $400 million from new investors,
like the Walton family, Betsy DeVos,
the owner of the New England Patriots,
and Rupert Murdoch, who put up $125 million,
To investors and patients,
it seemed like the system was working as advertised,
The plan was launched in Arizona
as if it's a nationwide campaign,
and then take key markets and roll it out across the country,
I wasn't an engineer, I wasn't a scientist,
I wasn't in R&D,
I was there to create a consumer brand,
We came up with three adjectives to describe Theranos:
simple, human, and optimistic,
Because there are so many barriers
to getting your blood drawn,
whether it's fear of needles,
or fear of finding out the results,
living far away, can't afford it,
There's just a lot of barriers,
It's like, people that have this
fear or this angst or don't like it, let's convert them,
So, I hired Errol Morris,
Errol worked with Apple,
Did a lot of great work with Apple,
And Elizabeth was taken by that,
This could be potentially the Apple of health care,
Exactly,
- I'm a fan, - Well, likewise,
We did casting,
Real people that have all these issues,
We did also reach out to existing Theranos customers,
and had several of them come and tell their real story
and their experience with Theranos,
- Hello! - Hi,
Thank you for coming in,
A-mark,
So, as usual, I have no idea
what questions to ask or where to start,
I think we'll figure it out,
There are so many people that don't have insurance
and can't afford insurance,
I was going to doctors,
and I couldn't afford it, I was paying out of pocket,
If you're trying to live a life, it gets in the way of it,
And if I could receive this information,
without having to spend all of this money along the way,
that would be amazing,
Eight hundred dollars for a series of blood tests?
- It can be pretty stressful, - It's expensive,
It's ridiculous,
Once they went live in Arizona,,,
- Right, - ,,,dealing now with real patients,,,
- Right, - ,,,as opposed to R&D,,,
- That's right, Yes, - ,,,you know,
then you begin to wonder, like,
- is it,,, - Well, I think here's,,,
my context for this is,
you know, go back to Jobs for a minute,
and all the people that said no to him,
and he refused no,
and did it anyway and proved everyone wrong,
So, my measure of success at that level,
a visionary,
owns his own company,
in creating products that change the world,
he did not give up or give in ever,
So, that was my measure of success,
Now, on patients, that's a whole other thing,
In many states, patients aren't allowed
to order their own lab tests without a prescription,
Doctors are supposed to provide guidance and oversight,
But Elizabeth lobbied the state of Arizona
to pass a law allowing patients to order lab tests
without consulting doctors,
Giving people the right
to obtain a laboratory test
will, by definition,
begin the process of enabling them to engage
in their health,
Ms, Holmes, you are magnificent,
and there isn't a question
any of us could ever ask that you haven't answered
20 or 30 times before,
This law would allow you to order your own blood work,
and you get the results,
This is what Theranos puts out,
It's a menu,
You kind of order à la carte,
but there are some cautions raised
from the medical community,
You can't just look at a lab,
You have to look at the whole patient, the whole person,
We can't write a prescription for somebody
that we haven't done a physical exam or have seen,
so it kind of was like,
how are we going to deal with this?
Low cost was very interesting to the patients,
but then also being able to order their own labs,
and they really liked that,
What made me concerned was, as a physician,
you can call the lab and ask simple questions,
and these are questions that we would ask any lab,
But Theranos, they weren't very transparent,
We tried to tell patients that,
"Listen, we're not getting a lot of information
"about how they do their testing,
and so we're kind of unsure of them,"
But then, Theranos started giving out vouchers or gift cards
to get labs, free labs done there,
And so it just kind of,,, exploded,
Mom, you really are an important part
of our family because,,,
we really love you so much,
Your health is really important to us,
The kids adore you,
Estábien, chiquita,
Theranos gift cards,
Because nothing is more important
than the health of those you love,
Marker,
Because of my extensive background in phlebotomy,
they offered me the trainer job,
Basically, I was training the Walgreens technicians
and pharmacist to do the fingerstick process because,,,
no one at Walgreens had ever
handled blood or bodily fluids,
So, talking about
what do you do in case of an exposure and,,,
how do you handle adolescents,
um, you know, just everything,
What do you do if someone faints?
Our goal is to be within five miles
of every person's home through the Walgreens nationally,
Our success will be in being able to make it possible
for no one to ever have to go through the process
of being stabbed by a big needle to get blood anymore,
and be able to begin to get access to this lab,,,
As I was doing my research,
they had about 90 tests,
and by the time I was ready to publish,
they had over 200,
I wondered at the time
how exactly was she miniaturizing
200 different tests,
and how exactly were you going to get
all of this done in the small analyzers?
And she was charging so much less than the others,
so all of that strained credulity,
I just didn't think that this
very sincere,
earnest, idealistic, young woman
was deceiving not just me,
but Walgreens Corporation and investors
to the tune of more than $400 million at that point,
To be able to give people
the tools to change their life
is an incredible blessing, It's a privilege,
Every single day,
I'm just so grateful for the way in which this is unfolding,
It's a gift from God,
We have to understand that this is all about
wanting the world to be a certain way,
and basically being able to rationalize our actions
to try and make it true,
You have to want a certain thing,
and then you should be able to kind of bend reality,
or rationalize things to allow you to do that,
But the other thing is that
what about reasons for good?
And I'll tell you about a study we did,
And the experiment works like this,
We give people a die, a six-sided die,
and we say, "Why don't you throw the die?"
And we'll pay you whatever it comes up,
Comes in six, you'll get six dollars
five, five dollars, four, and so on until one,
But you can get paid based on the top side or the bottom side,
Top or bottom, you decide, but don't tell us,
So, I give you the die, I say, "Don't tell me,"
Think top or bottom, You have it? You know which one?
Now, toss the die,
And let's say the die comes five on the bottom
and two on the top, And now I say,
"Alex, what did you pick?"
Now, if you picked bottom, you say bottom, you get five dollars,
You pick top,
what do you say? You say the truth? Top?
Or do you change your mind? You say bottom and get five dollars,
In our experiment, people do this 20 times,
And every time they think top or bottom,
commit it to memory, toss the die, and they write,
"Five and two, I chose five," and so on,
And when you do it 20 times, you find that
people are extra lucky,
Right? And luck has this really nice feature
of focusing on the six-one die tosses, right?
They're extra lucky on the six-one die tosses,
not so much on the three-four,
That's the basic experiment,
Now, here's the thing I want to tell you,
We do the same experiment,
but we connect people to a lie detector,
And we ask the question of whether the lie detector can detect it,
and the answer is yes, the lie detector can detect lies,
not all the time, but it can detect it,
In another version of the experiment,
we do the same thing,
but people pick a charity,
And all the money that they're going to make today
goes to that charity, Right? For a good cause,
What do you think happened, people cheat more or less?
People cheat more,
And the lie detector stops working,
Why? Because what does the lie detector detect?
The lie detector detects a tension,
I want more money, but I think it's wrong,
but if it's not wrong,
why would you worry?
If it's for a good cause, you can still think of yourself as a good person,
and that's how things start, and then it becomes a slippery slope,
I was at the Wall Street Journal
on the fifth floor of the Journal newsroom
in midtown Manhattan,
I had couple weeks prior finished
a long series on Medicare fraud,
So, I was looking for
something new to sink my teeth into,
and one afternoon,
I'm at my desk, my phone rings, I pick up,
and it's this source of mine,
He asked me whether I'd read this New Yorker profile
of Elizabeth Holmes that had been published
a couple weeks prior in December of 2014,
As it turns out, I had,
And there was a quote from Elizabeth Holmes
that Ken Auletta described as "comically vague,"
It sounded like the words
of a high school chemistry student,
as opposed to a sophisticated laboratory scientist
who'd really invented new science,
But I might not have done anything about it
if it weren't for the fact that
my source was now coming to me with this tip,
He said there's a laboratory director
who had just left Theranos on pretty bad terms
because he had become increasingly concerned
about the practices that he had witnessed there,
My ears definitely pricked up at that,
and so I made contact,
When I got him on the phone,
after trying him a few times, he was terrified,
He was being hounded by the law firm
of the famous lawyer David Boies,
One of Theranos's strokes of genius was to hire David Boies
and also give him stock in the company,
I mean, this is a lion of the legal industry,
arguably the most well-known lawyer in America,
who had represented Al Gore in in the presidential recount in 2000,
Before that, won a case on behalf of the Justice Department
against Microsoft,
and had shred Bill Gates during 20 hours of deposition,
And he would later become famous as the legal muscle
for Harvey Weinstein and his attempt to silence accusers,
This was someone who struck fear in many people,
The lab director said that Boies was pressuring him
and threatening him with litigation,
So, I had to agree,,,
to keep his identity confidential,
He told me that the Edison could only do a few tests,
and that all the other tests on Theranos's menu,
and at that point, we're talking about 250 blood tests,
were done on commercially available
laboratory machines that had been purchased
from companies like Siemens and DiaSorin,
And then they were also lying
about the reliability and the accuracy of the blood tests,
So, I went to Arizona
to get myself tested,
And so, one morning, I went
to the Walgreens that was closest to my hotel,
I sat down in one of these
little Wellness Centers, and the phlebotomist,
I heard her talking on the phone,
and typing on a computer for a few minutes,
and then she turned around and she came at me
with a tourniquet and a syringe,
And I said, "Why not a fingerstick?
"I thought this was all about,
you know, a fingerstick blood test,"
She said, "No, your order actually
includes tests that require venous draw,"
The truth is that, before my story came out,
there had already been instances of people
going in to get their blood checked,
and they would need to do a venipuncture
instead of a fingerstick of capillary blood,
And so, I asked about that a number of times,
and the answers were incredibly opaque,
So, my question is
what percentage of your tests are
needle rather than finger prick?
I-I don't have a really good number for you
because it's changing,
And we're really confident being able to say
that we're very close to 99% being on capillary,
but when you try to pinpoint a number,,,
We talking about in the next
- five years? One year? Two months? - No,
Much less than a year,
without question,
At the time, you didn't think that
that was necessarily evidence of,,,
Absolutely not, I actually believed her,
Of course, I remember her saying it to me,
And,,, that's a lie,
Period,
So, after a year or so,
we started to see the fingerstick collection dwindle,
and more venipuncture increase,
What did they tell you about why they were switching
to part fingerstick and part venipuncture?
They just,,, They didn't tell us, It just happened,
We were told we would need to say this blanketed statement:
"Due to the test that your physician ordered,
"we have to perform venipuncture
"to make sure that we had enough
"sample to perform the testing,
Would you like to proceed?"
- That's it, - That must've surprised you,
Yeah, it surprised a lot of the technicians,
It surprised a lot of the patients,
or the customers that were coming in, too,
Some people, uh, expressed profanity,
stormed out, demanded their money back,
Then, during that whole transition to venipuncture,
we had this big hiring boom where I had to train 50 more employees
because now we opened up our next 10 Wellness Centers,
With the Walgreens roll out,
the problems at Theranos were magnified,
Instead of shutting down until the Edisons could perform
all the tests on the Theranos menu,
Elizabeth and her team invented a workaround designed
to create the illusion of a new technology,
For most tests, they were forced to use venous blood, drawn with needles,
and to buy the same machines used by every other lab,
But to keep Elizabeth's fingerstick dream alive,
Theranos modified some of those machines,
so they would work with diluted capillary samples,
And for a handful of patient tests,
the company used the old Edison prototype
Elizabeth had pitched to Walgreens,
What we've worked to do is eliminate the error
and variability that's associated
with human processing of samples,
When Elizabeth says the whole process was automated
from start to finish, it was,,,
it was, uh, yeah, that was a stretch,
It would sometimes take six hours
just to set up the system
before we could even run the patient samples,
I was filling up containers,
doing so many manual things with hands,
And the scary thing about the nanotainers was they could
hop off your tray and they would be on the ground,
and you might not be able to spot them,
They had to dilute the nanotainers
to run it on the Siemens machines,
which was not how they were supposed to be used,
and so people who worked in the clinical lab
were nervous about that because they were violating
the operating standards for those devices,
which, you know, are rigorous standards
since they're being used to test
people for diseases,
We were fudging results,
rerunning quality control tests until they passed,
The solution at some point was,
"If you just throw out that one data point,
then the other three look beautiful,"
And that's not the way you approach
science that's going to be impacting people's lives,
There were people who had to run tests
on devices that they knew weren't working,
and give those results to patients,
People were very upset, you know, crying,
Some members of the CLIA lab would even
have to call patients and tell them that they had to go
to the emergency room 'cause the lab test was, you know, so far off,
What really hit home for me is
we were starting to do more infectious disease,
Hepatitis C, prostate cancer,
and even syphilis,
I was running precision testing for syphilis,
and there was a lot of variability in the test,
but Theranos said, "This is safe to use
on real patient samples,"
And I was kind of blown away,
If a hundred people who had syphilis
came and got tested on the Theranos devices,
we would only tell 65 of them that they had syphilis,
and we would tell the other 35,
"You're healthy, No need for medical intervention,"
So, if people are
testing themselves for syphilis using Theranos,
there's going to be a lot more syphilis in this world,
Their downfall was when they started
giving us results that were not matching up
with other labs,
We started seeing that, at first, with TSHs,
which is the thyroid stimulating hormone,
Patients that had been coming to us for years
to get their TSH done,
they had gone to Theranos and their labs
were changing really drastically,
So, we started sending them to LabCorp,
just to verify, and that's when we started
seeing some pretty abnormal results,
I understand how a patient
would wanna order their own labs,
but then they get it and they don't know what to do with it,
or they go on Google
and google everything under the sun,
and see that they have cancer, so,,,
- When they don't, - When they don't!
When you read about how many tests were actually wrong,,,
- Mm-hmm, - ,,,did that concern you?
It did because I had some of those tests
performed on me and my children!
I did!
So, I immediately went back to,,,
the other big lab companies,
and got my test done, the same test done,
and I compared them, and there was a big difference,
So, yeah, it was scary,
It was very scary,
There are so many people who reach out to us and thank us,
This one guy, he said, "Thank God for Theranos,"
I mean, how many times you say that about companies?
You buy a product, and do you ever say, "Thank God for Uber?"
Well, maybe sometimes, but,,,
But you will say
thank God for Theranos every day,
because every time you need a lab test,
every time your family needs a test,,,
I couldn't feel comfortable
with running these tests on patients
because, at the end of the day,
I wouldn't run them on myself,
I wouldn't run them on my family members,
And it just didn't make sense that,
internally, we had so little faith
in these tests,
but we're still resulting them on patients,
Unprecedented transparency,,,
I finally decided enough is enough,
I went into Sunny's office and I said,
"We're not letting patients know
when these results are false or when we make a mistake,"
And effectively, what he did is said,
"What makes you think you're qualified to make that call?"
And, "You need to just sit down and do your job,"
Thank you,
At that point, I knew,
It's just unacceptable what this company is doing,
and I don't want to be a part of that,
The kind of technologies that you're building
practically are changing people's lives every single day,
I couldn't understand how someone could continuously lie,
It really changed my perception of her,
That, okay, this person,
you know, plays this role of,
you know, wanting to make health care more accessible,
of really trying to leverage innovative new technologies
to solve this huge problem that we have in health care,
but it's all a show,
I grew up spending summers
and the holidays,,,
- ,,,with my uncle, I remember how much I loved him, - I have a really vivid memory,
- I loved him so much, - He was fine,
He was diagnosed one day with skin cancer,,,
All of a sudden, - And one day, he has brain cancer,,,
- And in his bones,,, - All of a sudden,,,
He was gone before I ever got to,,,
- My uncle,,, - My uncle,,,
When I think of Theranos,
I really feel like there were two entirely different worlds,
There was the carpeted world,
and there was the tiled world,
In the carpeted world was where Elizabeth was a goddess,
Everyone almost worshiped the ground she walked on,
She could do no wrong, She was the next Steve Jobs,
Theranos was changing the world,
And then you go into the tiled side and nothing works,
We're on a sinking ship,
Everything's a lie,
Reconciling the differences between
those two worlds was really hard for me to do,
I knew Elizabeth personally from all these
interactions through my family,
so I really trusted her, I believed in her,
I would leave the tiled world thinking,
"Oh man, sinking ship,"
And I would go have one conversation with Elizabeth,
Theranos was founded with the goal
of creating a more human, actionable health experience,
If you can begin to understand your body,,,
And I would be so motivated to go back and work,
and I felt like I was changing the world again,
And I would go back into the tiled world,
and I would go, wait, what just happened?
You want it to be true so badly,
and even for me, I was working with these devices
every single day,
and she could still kind of convince me,
When I think back on those conversations,
I just think, how did she do that?
You start to believe that maybe you're the one who's crazy,
Because everyone else thinks this woman's great,
and everyone else wants to throw money at her,
wants to be on board with this, and wants to be a part of it,
I mean, at the time, she was this iconic figure,
this woman in tech who was revolutionizing everything,
this Steve Jobs imitation,
Sometimes, you have to think maybe you're wrong,
At the time, you wondered whether
Elizabeth's connections were protecting her,
It kind of caused a bit of a crisis of faith
in, you know, just the power of government, and how
corrupt or not they were for me,
I thought that Theranos was going to get away with it,
You're charging historically low prices,
which is a small fraction
of what is charged now,
and while maintaining the highest standards,
With all her political connections,
she was chummy with the Obama administration,
The bet that she made was that
if she surrounded herself with powerful people,
the regulators wouldn't get confrontational with her,
The end game, I think,
it comes back to "fake it until you make it,"
Elizabeth never gave up on her ultimate vision
to get the device not only in stores,
but ultimately, in the homes of patients,
She wanted to be like Apple and Steve Jobs,
in the sense that Apple devices are ubiquitous,
She wanted Edison devices in every home in America,
The only thing is you need FDA approval to make that happen,
I did talk to the Chief Medical person at the FDA,
who expressed some skepticism, He said,,,
"They have not provided enough information
for the agency to clear or approve the test,"
Accurate?
So, is this something that
- you wanted actually to use in the article? - Yes,
Okay, so that's part of a challenge
because that our legal team is so concerned about this
because there's a lot of context behind that,
It creates,,, causes a lot of problems for us,
That's why I'm asking for context,
Give it to me, I'm all ears,
Okay, let me talk to our legal team,
Right now, they told me that I can't comment on this,,,
Elizabeth was tap dancing
around her discussions with the FDA,
Rather than submit full applications,
Theranos flooded the FDA with vague exploratory letters,
trying to stall for time,
till the Edisons could do all the tests
that Theranos advertised,
and that could take years,
In the meantime, the Theranos operation in Palo Alto
was being regulated by CMS,
the federal agency in charge of clinical labs,
Theranos was also playing games with them,
Even though some patient tests were performed on Edisons,
Theranos never reported those,
The company only gave CMS the data from third-party machines,
The decision was
let's send what was on the Immulite
and on the Siemens Advia,
Let's not send the Edison results,
And that really freaked me out
because that was suggesting that,
okay, we didn't trust the Edison test,
And here, we were able to make that discernment
of what was the appropriate one to send,
but we weren't doing that with patients,
And when CMS came in for the inspection,
Sunny and Elizabeth only showed them the lab
with the Siemens Advia, the Immulite,
They never took them downstairs to the secondary lab,
where we processed all the fingersticks on the Edisons,
They strictly told us
to stay at your desk,
They didn't want any of us down there
'cause they were scared if the inspectors
saw what was going on, that could have huge consequences,
It just seemed scandalous to us,
It was getting to the point where there was really no hope,
You know, I'd pretty much decided
that I was going to quit,
Right after I resigned,
I went to my grandfather's office at Stanford,
and actually showed him a lot of data,
and the discrepancy between what I was seeing
and what was being published,
and the explanation for those differences,
But he didn't really seem to believe what I was saying,
and he said, "Elizabeth has told me that
"Theranos really can do all the things that it says it can do,
"Theranos is more accurate, going to change the world,
"They're trying to convince me that you're stupid,
"They can't convince me that you're stupid,
"but they can convince me that you're wrong,
"And I do think that you're wrong,
so move on with your life,"
A few months afterwards,
John Carreyou from the Wall Street Journal
sent me a message on LinkedIn,
I was definitely in a panic,
There were confidentiality agreements
that I had signed while I was at Theranos,
So, I went and bought a burner phone with cash,
I called him, and in that phone call,
I decided that I wanted to help him out,
I said, my grandfather made it through Watergate,
and the Iran-Contra scandal
with his integrity completely intact,
Once he becomes aware of the fraud that's happening,
he will do everything he can to make things right,
And I want to give him that opportunity
because, I think he was 94, 95 at the time,
So, I met with John in person,
and then he sent Theranos
some prodding questions,
and there was just one number in there,
42,9% that I had calculated for one of these tests,
that was also in an e-mail that I had sent to Elizabeth,
About a month after that,
I went to go have dinner with my parents,
I walk in the door, and my dad says,
"Have you been speaking to a Wall Street Journal reporter?"
And I said yes,
And he said, "Well, they know,"
After I leave Theranos,
I kind of want to be as far away from them as possible,
I was working another job, and at this point,
I had talked to John Carreyrou from the Wall Street Journal,
who was doing an investigative report,
So, I'm at work one day, I'm working late,
and two of my colleagues are leaving,
and I'm going to be the only one in the building,
And they look outside, and they're like, "Hey, Erika,
"There's been this guy who's just been sitting
in our parking lot for the whole day,"
And that's very unusual,
So, they walk me to my car,
and then this guy comes up, and he gives me this letter,
And it has the address of this temporary home
that I'm staying at, so no one knows this address,
And I open it, and it's a letter from David Boies,
"If you don't come forward with
"X, Y, and Z document, or report these people,
there's a potential that we could sue you,"
It was quite, quite scary for me,
Especially coming from a position of,
what, I was 23 at that point?
You know, I had not really
not really any money to spend on lawyers or anything,
I was really freaked out,
I'd been asking for an interview
with Elizabeth for several months,
and they were giving me the runaround,
Finally, in June 2015,
we agreed that we'd have a meeting at the Journal offices,
This Theranos delegation comes in, it's seven people,
four of whom are lawyers,
led by David Boies, and one of the other lawyers is Heather King,,,
Heather has just joined us as our general counsel,
,,,who had been a Boies Schiller partner,
former Hillary Clinton aide,
Couple of minutes into the meeting, Heather King
puts a little tape recorder down on the table,
Another Boies Schiller attorney
put a little tape recorder
on the other end of the conference table,
and it was very clear
that they were approaching this
as a deposition in a legal proceeding,
If they were going to record, then I was going to record as well,
Okay, so, you know, we're here today
to do our part to help educate you on what
I, at least, believe are some,
you know, false premises upon which the questions are based,
They're very serious questions, and there's some very serious
allegations in those questions,
I also turn to David Boies,
David attends all the board meetings,
We wouldn't be here, spend all this time and effort
if the, you know,
- we've got a technology,,, - So, why don't we discuss it more freely?
Yeah, because it's trade secret! That's why!
And because you won't sign an NDA!
Is there really new technology?
That's the point,
Is it really new technology,,,
This something no one's been able to do before,
Okay? Theranos is doing it,
And unless it's magic, it's a new technology,
I knew that most of their blood tests
were run on commercial analyzers
made by third party companies,
And so I said, how can this even fall
under the bucket of trade secrets,
if these aren't even Theranos machines,
Are you saying that the trade secrets also covers
the way in which you run a blood sample
on the Siemens Advia?
I think, I don't know the answer to that,
but I can tell you that it could or it could not,
It just feels like you want us to give you the formula for Coke
in order to convince you that it doesn't contain arsenic,
Nobody's asked for the formula for Coke,
We're looking for a generic explanation,
You don't need to know how they work,
It sounds like the Wizard of Oz,,,
So, we went around in circles,
and the fact that they were stonewalling
in such a strong way,
made me feel like we were on the right track,
You know, it seems apparent to us that certainly
one of your key sources is a young man named Tyler Shultz
because the concerns that you are raising
precisely are concerns
that he raised in the very brief time
that he was at our company,
I don't know, I don't remember his exact words,
but he said, "Well, they know, They know,"
So, I called my grandfather and he said,
"Elizabeth tells me that you've been speaking,,,
"that you've been giving trade secrets away
"to the Wall Street Journal,
"and, you know, if this story gets published,
"that essentially, your career will be ruined, but,,,
"there's a one-page confidentiality agreement
you can sign to just make it all go away,"
And so, I go to his house the next morning, and he said, "Okay, well,
there are actually two Theranos lawyers here right now,"
I was,,,
extremely nervous about what was going to happen,
very uncomfortable with the whole situation,
They come in and they give me
a notice to appear in court in about 36 hours,
a temporary restraining order,
and a letter signed by David Boies,
They really made me feel like I was alone,
I was the underdog, I was going to get crushed,
Good morning, Mr, Secretary,
Good morning,
Do you recall a time when Tyler came to your home,
and there were some attorneys
from the Boies Schiller firm there?
I wouldn't call them attorneys,
The man was some sort of an animal,
Wild animal,
and he assaulted my grandson,
Was one of the dumbest things I've ever observed,
When you say that the man assaulted
your grandson, can you be,,,
Verbally, verbally, he just went after him,
If it hadn't ended when it did,
my wife was about to pick an iron out,
hand iron right out of the fireplace and clobber him,
My grandfather physically separates us,
and puts the Theranos lawyers in the living room,
and I'm in the dining room,
and he's going between the two rooms negotiating,,,
- Like a Secretary of State, - Like a Secretary of State,
And my grandfather seemed like he had grown,,,
that his allegiance to Elizabeth and Theranos had grown even stronger,
Do you have a high opinion of Ms, Holmes?
Yes,
Do you believe that Ms, Holmes was truthful
with you in all of your interactions with her?
Yes, I think so,
In any of her interactions with you,
did Ms, Holmes ever do anything
to give you reason to believe
that she was trying to deceive you?
No,
Yeah, that's when,,,
lawyers became a really big part of my life,
They were threatening to sue me for
violating my nondisclosure agreement,
for giving up trade secrets,
Many times, I had written notices to appear in court,
and at the last minute, they would cancel it,
Overall, my parents
spent between 400 and $500,000
in legal fees,
It was getting to the point where
we needed to find money somewhere, so they,,,
they said that they would sell their house
to keep fighting this legal battle,
So, I ended up talking to a lawyer,
and they said, they're trying to scare you,
And he said, one of the options that you can do is you can whistle-blow,
You could be protected if you talked to a regulatory agency,
And I'm like, what regulatory agency? How do you that?
I've been nervous to send or even write this letter,
Theranos takes confidentiality and secrecy to an extreme level,,,
Mistakes always happen in a clinical lab,
but what went on in Theranos was complete negligence
and honestly felt criminal in many ways,
Upper level management constantly made excuses
for their misgivings,,, but they continue to,,,
I don't feel like it's sort of a cold-blooded scam, right?
It just seems it started off
as something small, like one lie,
and snowballed into this really
crazy situation,
♪ Can't touch this ♪
♪ Oh, oh, oh, oh, oh, oh, oh ♪
♪ Can't touch this ♪
♪ Oh, oh, oh, oh, oh, oh, oh ♪
♪ My, my, my music ♪
♪ Keeps me so hard, makes me say oh my Lord ♪
♪ Thank you for blessing me ♪
♪ With a mind to rhyme and two hype feet ♪
♪ That's good when you know you're down ♪
♪ A super dope homeboy from the Oaktown ♪
So, what do you guys think about the FDA clearance?
♪ Can't touch this ♪
It was around the 4th of July of 2015,
It was euphoria at the company,
It was, you know,,,
♪ Bust the funky lyrics ♪
♪ Fresh new kicks and pants ♪
♪ You got it like that, now you know you wanna dance ♪
This is a very meaningful milestone
for both Elizabeth and Sunny,
It felt like a great victory at the time,
It was a big celebration for a little victory,
The FDA had finally approved
one rarely used test for herpes
to be run on an Edison prototype,
That was too little too late for Walgreens,
which put the brakes on opening new Wellness Centers,
And while Theranos had boasted revenues
of more than a billion dollars for 2015,
the actual cash in the door was only a few hundred thousand,
But Elizabeth and Sunny were not backing down,
We are going to send a message to Quest Diagnostics,
Remember, these are the guys who are after us,
and they're attacking the work that you guys are doing,
- Are you ready? - Yeah!
Okay, One,
two, three,
Fuck you!
I saw the alert when I got up in the morning,
and I read it by my bed,
It had this really understated headline,
But the contents of the article were just devastating,
When I got to work, I read it a couple more times,
Suddenly, all of the trade secret stuff made sense,
Oh, I see, It's not a trade secret,
Um,,,
It's a different kind of secret, and, um,,,
I did not know that Siemens were being used
until after the article hit,
And then that kind of explains
why we were doing venipuncture,
as opposed to the fingerstick collection,
I then started,,, revamping my résumé,
I'm sorry, but I did!
I was lucky when the Wall Street Journal
actually ended up publishing their article
because once that happened,
Theranos' efforts were focused elsewhere,
We never went to court, We never,,,
had any sort of settlement, It just kind of died,
The fate and future of the company was at stake,
So, we gathered in our cafeteria,
Elizabeth and Sunny spoke to what was happening,
and that these allegations are not true,
And then, Elizabeth made a comment about
taking on the Wall Street Journal as a fight,
I knew immediately
when I woke up that day that the article
was having impact because e-mails from readers
and from colleagues were flowing in to my inbox,
And I was also getting asked
to do various media interviews,
New Wall Street Journal story
by John Carreyrou, Thanks for joining us, John,,,
The article was a wake-up call
for Silicon Valley,
This sort of gold rush had been going on,
These unicorns had been created,
Companies that have valuations of more than a billion dollars,
They were staying private much longer
than start-ups had in the dot-com boom of the late '90s,
And as a result, they were able to be less transparent
than companies that have to report
to investors every quarter,
And I think suddenly there was a realization in Silicon Valley
that this has allowed fraud to thrive,
Obviously, when I called Theranos
and tried to speak to Elizabeth and was told
that she was going to be unavailable all day,
She was being inducted into the Harvard Medical School Board of Fellows,
And, um,,, I was just stunned,
I was thinking in my mind,
the Wall Street Journal has just said,,,
that you're a fraud, and that you're company is a fraud,
and the company I put on the cover of a magazine is a fraud,
and you're going to spend,,,
the whole day,,,
hiding out at this, uh,,,
at this, uh,,,
honorary horseshit, you know?
You need to get out here,
and go through this article,
paragraph by paragraph,
explaining what the fuck's going on at your company,
Your article was pretty brutal,
but here on Mad Money, we know something,
We know that there are two sides to every single story,
Coming to us this afternoon from Boston,
where she's attending a meeting of the Board of Fellows
at Harvard Medical School, to give her a chance to answer
the charges raised in the article,
Ms, Holmes, welcome back to Mad Money,
It's great to be here, thank you,
This is what happens when you work to change things,
and first they think you're crazy, then they fight you,
And then, all of a sudden, you change the world,
And, um, I have to say,
I personally was shocked to see that
the Journal would publish something like this,
Every single one of the sources that
we spoke with who the Journal had contacted told us
that the statements that were being attributed to them
were false or misleading,,,
She decided to come out and address my story and rebut it,
Theranos issued a press release calling my reporting false,
and they were threatening us with litigation,
The journalism here has been so bad,
they deserve to be sued,
but lawsuits rarely resolve issues,
What's going to resolve this issue is the science,
the marketplace,
Um, the company has been successful in Arizona,
Doctors are happy, patients are happy,,,
Doctors and patients were not happy,
The FDA was so worried about patient safety
that it banned the use of the nanotainer,
putting an end to all fingerstick tests at Walgreens,
CMS conducted a surprise inspection of the Theranos lab,
and found the blood testing so inaccurate,
that it posed a threat to patient safety,
likely to cause serious injury,
harm, or death,
CMS revoked the lab's license to operate,
The letter that prompted CMS to act
came from Erika Cheung,
You know, in the end for me,
it was a bit of a mixed feeling,
I was really excited because the truth finally got out,
But then also, a bit of sadness in the fact that, um,,,
you know, we all really wanted that project to succeed,
Have you been able to win your argument
with your grandfather in terms of persuading him
of the problems at Theranos?
He said that he had no idea how much deception there was,
and that he was proud of me,
Yeah,
Yeah, I'm glad he finally really gets it,
There was a Journal technology conference
taking place in Laguna Beach in late October 2015,
and it so happened that more than a year prior
it had lined up Elizabeth Holmes as one of the speakers,
Could you get specific on the key points today,,,
And not only did she come, she came swinging,
The tests that are offered are of the highest quality,
We know what we're doing, and we're very proud of it,
Were there situations in which you, uh,
had to dilute blood samples?
What the Journal described
that we take a sample, dilute it,
and put it on a commercial analyzer
is inaccurate, and that's not what we do,
I watched it on the Journal website,
and I couldn't believe what she just said,
There was no question that that was a huge lie
because they were absolutely doing it,
We don't actually use the technology
that's being referred to as Edison for anything,
and haven't for a few years now,
When we do fingerstick, every time, we use technology
that is not commercially available,
We have never used
commercially available lab equipment
for fingerstick-based tests,
Every fingerstick test,,,
I had underestimated her willingness
to bald-face lie in public, on our turf,
I guess what I really want to know is, do you feel now,
in hindsight, that maybe you went market a little too quickly?
Did you feel pressured to do that in any way?
We're the exact same company,
Nothing has changed,
We're working every single day to try to get these tests
and systems to meet the highest quality standards,
Couple of months after John Carreyrou's article,
I wrote a new story,
It was both a correction and a mea culpa,
And I said that Elizabeth had intentionally misled me,
After I published the piece,
Elizabeth called me,
and there was a long conversation,
She was not apologetic, She said,
"I never would intentionally try to mislead you,
Why would we do that?"
She was trying to persuade me to take out that sentence,
She said something like,
"If you're not going to take that language out,
we're going to have to do something about that language,"
which was a little menacing,
but all that they then did was they wrote a letter,
Toward the end, there was a weird paragraph,
something to the effect that Elizabeth didn't even realize
that Fortune was doing a feature profile,
let alone a cover,
And it was so, such a,,,
bizarre thing 'cause,,,
I was out there four days and,,,
I had called all these people at her behest,
You know, seven directors,
the head of UCSF Medical Center,
the head of Blue Cross Blue Shield,
I spent an hour and a half with her parents, I met her brother,
I asked her about the letter she wrote when she was nine,
I asked her about the book her father gave her
when she went away to school, which was
Meditations by Marcus Aurelius,
And then there was the photo shoot!
It was a big-name photographer,
and his assistants, and the lighting equipment,
and taking a couple hundred photos
in different locations and different poses,
That was a clue, you know?
This was real lunacy,
I realized that there was something wrong with her mind,
that, um, you know, I don't know if she's lying or if she's,,,
uh, there's an unconscious, um,
reconstruct,,, self-protective,
reconstruction of reality that's going on,
But what is coming out of her mouth
is not mapping onto reality
as you or I know it, you know?
I wish I could say to her,
"Elizabeth, I'm going to give you a truth serum,
"and you're going to tell me
what was going through your mind at that time,"
And the question becomes, do you,,,
do we believe that she would say,
"I knowingly lied?"
I have a hard time
imagining her saying that,
She was a zealot, and a zealot is such a believer,
a true believer, in what they're doing
that they're blind to the reality of what's happening,
Not for a moment do I believe
that she lies in bed at night and thinks,
"I was a swindler, I was a crook, I lied,"
So one day, I get an e-mail from somebody who works with Elizabeth Holmes,
He asked me if I would come and meet with their team and with Elizabeth,
I said sure,
Part of my research is actually about human motivation,
and she was very concerned about the demotivation in the company,
Right? Because the continuous stories
around them were demotivating,
My impression was that she truly believed in the mission of the company,
and that she also believes that they are
on the way to achieve something,
and they just need the runway,
There's a lot of lying in Silicon Valley,
And I remember when my first book on dishonesty came out,
and I did a book tour, and I gave a few talks
in Silicon Valley, some entrepreneur said,
"Oh, we are in technology, Technology doesn't lie,"
Right? So, and they basically said,
"We are honest, there's no opportunities,"
And I didn't say anything, but in two minutes,
all kind of people from the start-ups around him
started talking about how they lie to investors,
And they have all these graphs of growth, right?
I mean, they're predicting the future,
and they putting exact numbers on their,,,
And my thought was that there is this idea
in Silicon Valley, where you, um,,,
in a very brave way,
put a post somewhere really far
that you truly have no idea if you can get there,
And my sense from the discussion with Elizabeth was
that she felt that she was basically
doing the same thing that everybody else is doing,
We have lots of people who are overconfident,
and from time to time, some of them work out,
and we get penicillin, or the incandescent light bulb,
or we get,,,
And if you are surrounded by companies
who try very hard and dedicate their lives
to achieve the impossible,
and then sometimes they are successful in doing it,
why can't you?
At the highest level,
we didn't have the right leadership in the laboratory,
and I didn't realize
until the inspection
that these types of issues were in place,
So, until the government told you
that you were really out of compliance,
- you didn't know? - Yeah,
What was your reaction when you found out
that you had all these violations
- in your lab? - It was devastating,
Don't blame anyone else,
You have controlling shares in that company, Elizabeth Holmes,
The buck stops there,
People make mistakes, but you must always admit it,
My husband's favorite phrase:
"Excuses are like assholes, Everyone has one,"
Sorry, You don't have to put that in there,
One of the headlines was,
"$9 Billion Company Down to Zero,"
And your investors and your board members
are reading those same things,
It's probably the most important question, I think,
anybody who's watching has about this,
- Does it work? - Yes,
- You're confident in that? - I am confident in that,
Without further ado, I'd like to welcome Elizabeth Holmes,
founder and CEO of Theranos, to the stage,
Elizabeth did not give up,
She fought back by taking center stage
at a clinical lab conference in front of all her critics,
She defiantly unveiled the machine she'd been hiding for so long,
- The miniLab is designed,,, - She called it "miniLab,"
as if it were a new invention,
This is an inflection point for our company,,,
But inside Theranos, it had another name,
Edison 4,0,
By 2017, Theranos had spent
virtually all of the $900 million it had raised,
Nearly 300 million went to pay legal fees,
settle lawsuits from investors,
and to refund every patient in Arizona for their blood tests,
Henry Kissinger, George Shultz,
and even David Boies resigned from the board,
Elizabeth broke up with Sunny
and fired him from the company,
But she never lost her faith in the power of invention,
It's finding,,, what you love,
and finding what you're born to do,
and when you find that, whether it's,,,
you know, writing, or painting,
or science, or whatever it is, when you,,,
when you really
give everything to that, then,,,
then you can realize great things and,,,
we'll fail 10,000 times if we have to,
but we'll figure it out on the 10,0001st, you know,
Ms, Holmes, please raise your right hand,
Do you swear to tell the truth, the whole truth,
- and nothing but the truth? - I do,
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