Introduction: The Inventor: Out for Blood in Silicon Valley (02:52)
More people will have access to their healthcare information by 2025. Theranos was founded to help implement successful therapies at the earliest possible point of detection. The company was valued at $9 billion. (Credits)
The Stanford Research Park (02:21)
Elon Musk, Steve Jobs, and Mark Zuckerberg have rented property on these 700 acres. Elizabeth Holmes moved Theranos to the park in 2014 when the company was valued at $10 billion. Four years later, the start-up was worth less than $0 a share.
Changing Phlebotomy (03:58)
At a TED Talk Holmes talks about spending summers with her uncle who died from cancer. Theranos developed comprehensive laboratory tests from a few drops of blood to diagnose diseases.
Learning from Failures (03:39)
Holmes nicknamed her product the Edison. Thomas Edison created the light bulb, motion picture camera, phonograph, but faked results for his investors. Roger Parloff describes how Holmes would switch from ingenuine to idealistic when discussing her advances in diagnostic testing.
"This CEO is Out for Blood" (03:02)
"Fortune" invited Holmes to The World's Most Powerful Women conference; see a portion of a live public interview. She intended for Theranos to disrupt the industry dominated by Quest and LabCorp.
High Powered Idols (04:35)
Holmes has worn black turtlenecks since she was seven, in homage to Steve Jobs. The entrepreneur recalls the president of Brazil flattering her at a luncheon with software engineers such as Eric Schmidt and Mark Zuckerberg. Former employees discuss the hiring process and how the founder never blinked.
In an interview, Holmes explains why she does not want to share her technology with competing companies. By taking monthly blood tests, one would see subtle diagnostic changes over time. Engineers discuss the process of creating the Edison machine.
Holmes' Education (04:54)
Holmes filed her first patent while studying at Stanford University. Dr. Phyllis Gardner is often sought out by students who want to break into the start-up medical field; she turned down Holmes. Channing Robertson left his tenured faculty position to work at Theranos.
Convincing Investors (05:42)
Age does not determine success; have conviction in one's abilities. Theranos spent years working for pharmaceutical companies and developing applications for the military. Holmes convinced private investors including Avie Tevanian and Larry Ellison to give hundreds of millions of dollars without looking at audited financial statements.
Board of Directors (05:19)
Theranos did not put out press releases or have a website. In an interview Holmes lists its board of directors including Henry Kissinger, General Jim Mattis, Sam Nunn, Richard Kovacevich, and George Schultz. Tyler Schultz describes how he began interning at the company.
Controlling Access to Information and Technology (02:53)
Theranos claimed that General Mattis said the military would use Edison machines on wounded soldiers in combat zones. Holmes would control demonstrations and restrict access to the prototypes.
Chief Operating Officer (03:40)
Former employees discuss Sunny Balwani's leadership style and relationship with Holmes. Walgreens signed a contract with Theranos to create a portable blood testing machine to be installed in its pharmacies.
Edison Machine (05:00)
Temperature regulation, fluid transfer, equipment failures and design changes caused issues. Former employees describe how demonstrations in front of companies were faked. Balwani and Holmes did not listen to engineers who warned of failure.
Ian Gibbons (03:40)
Gibbons worked on the company's key initial patents. Balwani and Holmes marginalized and excluded the biochemist from corporate decisions. Gibbons committed suicide rather than testifying against Theranos.
Growing Paranoia (03:59)
During a speech Balwani blames Quest for the company's difficulties. Theranos hired security, tracked keycard access, monitored emails, and installed bullet proof glass. Employees were monitored through keystrokes and had to sign non-disclosure agreements.
Walgreen Launch (04:06)
Theranos tested patients in Arizona and Holmes convinced Walgreens to launch its wellness centers without the Edisons; blood samples were collected and sent to Palo Alto. Theranos attracted an additional $400 million from investors.
Growing Popularity (03:39)
Holmes lobbied the state of Arizona, which passed a law allowing individuals to order lab tests without a prescription. Stephanie Seitz and other physicians warned patients about Theranos. Serena Stewart trained Walgreens employees to perform finger sticks.
Auletta wondered how Theranos could miniaturize 200 tests. Dan Ariely explains how people can deceive lie detectors if the falsehood was told for the greater good.
Slippery Slope (02:50)
John Carreyrou describes how he began investigating Theranos. Auletta describes something Holmes says as "comically vague." David Boies threatened to sue a laboratory director who questioned the veracity of Theranos.
Blood Draw (03:00)
Carreyrou describes how a Walgreens phlebotomist wanted to perform a venipuncture. Finger stick testing began to decrease.
Cheating the System (02:56)
Holmes modified Siemen's machines to test diluted capillary samples. Former employees discuss reactions to working in the laboratory and fudging results. Theranos began to test for infectious diseases.
Results Not Matching (03:35)
Dr. Stephanie Seitz describes how her patients TSH levels began to change drastically. Cheung confronted Balwani about the false results.
Persisting in Her Vision (03:07)
Schultz describes how Holmes could convince him of the veracity of Theranos. Holmes believed by surrounding herself with influential people, the federal regulators would not inspect the company too closely.
FDA Approval (02:11)
In an interview Holmes refuses to comment about her discussions with the FDA. Theranos never submitted a complete application, but sent many letters, stalling for time. The company did not report data for the Edison results to Centers for Medicare and Medicaid.
Becoming Informers (03:32)
George Schultz refused to believe the information his grandson provided. Theranos realized that Schultz and Cheung were Carreyrou's anonymous sources.
Meeting for an Interview (05:09)
Hear audio from a meeting Boies and Heather King attended at the Wall Street Journal offices. Carreyrou insisted that because commercial analyzers from third-party companies ran the tests there were no trade secret violations. Schultz received a temporary restraining order, a notice to appear in court, and a letter.
Legal Trouble (03:24)
Schultz's parents spent between $400-500,000 on his defense. Cheung decided to become a whistle-blower. In July 2015, the FDA approved a herpes test to be run on the Edison.
Article Is Published (03:54)
Carreyrou's article was published in "The Wall Street Journal." Theranos' legal teams stopped harassing Schultz. Private companies can be less transparent than public ones.
Impact of "Wall Street Journal" Article (04:05)
Theranos called the article false and threatened Carreyrou with litigation. The Food and Drug Administration banned the use of the nanotainer; CMS conducted a surprise inspection and revoked the laboratory's license. Holmes lies about the testing procedure at a conference in Laguna Beach.
"How Theranos Misled Me" (03:20)
Parloff claims that Holmes intentionally misled him. Holmes claimed she was not aware "Fortune" was going to write the original article. A zealot is such a true believer they become blind to the reality.
"Technology Does Not Lie" (05:32)
Dan Ariely explains how Silicon Valley advertises falsehoods to investors because they believe in their products. In an interview with Maria Shriver Holmes claims she did not realize until the CMS inspection that there were issues in the laboratory. Theranos unveiled the MiniLab at a clinical lab conference.
Credits: The Inventor: Out for Blood in Silicon Valley (01:12)
Credits: The Inventor: Out for Blood in Silicon Valley
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