Bad Blood tells the story of Theranos, a Silicon Valley startup worth billions that turned into perhaps the biggest fraud since Bernie Madoff. John Carreyrou, the Wall Street Journal reporter who broke the Theranos story, provides a very well researched and yet digestible look into what can go wrong when a companies leadership is, shall we say, less than honorable.
As is pointed out in the book, Silicon Valley companies are often just dealing with data so failures or fraud may have financial implications but rarely have life or death impacts. For investors in tech startups, the assumption is that the vast majority of investments will return nothing, it is part of the game. In the case of medical companies, the implications of fraud can be life or death – even if the investors are willing to take a loss.
Theranos was pushing the boundaries of medical science — at least that’s what they said. Much is made of Elizabeth Holmes vision for blood testing, a small pinprick of the finger to provide hundreds of tests. Making this process cheap and easy would help people monitor their health much more closely and with much less pain. You can’t fault a founder trying to push the boundaries to help make lives better – after all, that is practically the motto of Silicon Valley.
I saw a different motivation, the motivation of a narcissist. The story borders on the unbelievable but the more I think about it, the more I know I’ve seen this type of person before. Or should I say, I see this type of person, today, in business. I’ve worked with people much like Holmes who seemed so intent on winning at any costs that they left destruction their wake. People who spend a great deal of time defining the narrative and destroying any adversary to ensure their success. In business we call this “managing up,” but it’s just a confidence game played by someone trying to manipulate the situation in their favor. They play by the only rule that counts, do whatever it takes to win. I’ve seen these people and continue to see them every day.
The sad part about the Thernos story is that the underlying dysfunction isn’t unique. You probably have this problem at the company you work at. It may not end in a federal indictment, but it surely is harming your companies ability to grow and adapt.