Theranos, Elizabeth Holmes, and the Cult of Silicon Valley

Elizabeth Holmes became a Silicon Valley celebrity after she dropped out of Stanford at 19 to start a company called Theranos. We sat down with John Carreyrou, the Wall Street Journal reporter who unmasked Holmes.

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Elizabeth Holmes was everything Silicon Valley investors and the media could hope for: a brilliant, young female entrepreneur who dropped out of Stanford at 19 to start a company called Theranos.

Established in 2003, Theranos promised to save people from pain and disease through early detection and lead the way into an era of cheaper, more consumer-driven health care. Holmes' big idea was to replace traditional venous blood draws in a doctor's office, hospital, or lab with simple finger pricks. One day, she said, patients would be able to do the tests at home and upload the results for their doctors.

Holmes stacked her board of directors with heavyweights such as former and future cabinet members George Schultz, Henry Kissinger, and Gen. James Mattis. She held fundraisers for Hillary Clinton and cadged hundreds of millions of dollars from investors such as the Walmart heirs, Rupert Murdoch, and Betsy DeVos. For a time, her company was worth more than Spotify or Uber.

Today, Theranos is on the verge of liquidation and its backers have seen their investments wiped out. Holmes may face charges.

The man who looked closer at Theranos is John Carreyrou, a veteran investigative journalist at The Wall Street Journal. His dogged reporting revealed the tactics of flattery and intimidation that fooled Holmes' investors and the press, allowing her to keep up the deception for as long as she did. When Carreyrou's stories on Theranos started appearing in 2015, Holmes went on the offensive, depicting herself as a Silicon Valley disrupter who had become the target of a smear campaign orchestrated by established interests.

Reason's Nick Gillespie sat down with Carreyrou to talk about his new book on Theranos, Bad Blood: Secrecy and Lies in a Silicon Valley Startup, which has made the New York Times bestseller list and will soon be made into a movie starring Jennifer Lawrence as Elizabeth Holmes. Bad Blood raises tough questions about regulators' failure to stop Theranos, the infatuation of the public and the press with the mystique of Silicon Valley, and the shadowlands where innovation, capitalism, and deception meet.

Produced by Justin Monticello and Todd Krainin. Camera by Jim Epstein.

Music credits:

Raro Bueno by Chuzausen is licensed under a Attribution-NonCommercial-ShareAlike 3.0 International License.

On Matters of Consequence (Act I) by Lloyd Rodgers is licensed under a Public Domain Mark 1.0 License.

On Things Invisible to the Eye (Act II) by Lloyd Rodgers is licensed under a Public Domain Mark 1.0 License.

Photo credits:

Elizabeth Holmes at WSJDLive 2015: Mike Blake/REUTERS/Newscom

Elizabeth Holmes at TIME 100 Gala 2015: Everett Collection/Newscom

Elizabeth Holmes at TIME 100 Gala 2015: Robin Platzer/Twin Images/LFI/Photoshot/Newscom