In 2004, Elizabeth Holmes, a 19-year-old Stanford dropout, founded a biotech company called Theranos with the intention of revolutionizing the world of blood testing. Within less than a year, she had millions of dollars in venture capital. Hailed as a visionary on par with Steve Jobs, Holmes rocketed to international fame. And then, as quickly as she built her empire, it all came crashing down. By 2015, she was exposed as a fraud and Theranos began shutting down, bringing the dream of an easier blood test to an abrupt and shocking end.
This is the story of the greatest business disaster Silicon Valley has ever seen. This is the story of a singularly ambitious wunderkind who deceived some of the most powerful people in the world. This is the story of a young woman who went from college dropout to billionaire to criminal, and everyone who helped her do it. This is the oral history of Theranos.
CHAPTER 1: The Wunderkind
When sophomore Elizabeth Holmes left Stanford to start Theranos, she hoped to “democratize healthcare.” Her idea was to develop an easily accessible, instantaneous blood test that would give users detailed information about their health using only a single drop of blood. Armed with this plan as well as a few of her family’s powerful political connections, Holmes set out to drum up investment capital. Her youth, her charisma, and her powerful message of progress and change combined to turn her into a Silicon Valley darling, and soon she was regarded as tech’s next great entrepreneur.
Don Lucas (Venture capitalist, Theranos investor): I remember exactly when Elizabeth Holmes first came on the scene in Silicon Valley, because she instantly got people talking. Here was this intelligent, articulate 19-year-old Stanford dropout, confidently walking around town waving a switchblade and yelling “Invest in my blood idea before I jab you! C’mon! I’ll jab you right in the leg! Try me!” In the tech industry, people were ready to hear that kind of message.
Elizabeth Holmes (Founder, Theranos): My goal was to disrupt blood testing. Getting your blood drawn is one of the most traumatic experiences a person can go through — it involves leaving your house, it can take up to several minutes, and the whole thing has to be interpreted for you by someone who went to school specifically to learn how to do that. It’s a broken system. I envisioned another way: a way where people who wanted blood tests could put their hands inside a box and let the box figure it out.
Phyllis Gardner (Medical School Professor, Stanford): Elizabeth first approached me with her idea for a biotech company when she was still in school. The first thing I noticed about her was her switchblade. She whipped this tiny little knife out of her pocket as soon as she got into my office, and she started poking it around at the air, yelling “You’re gonna help me with my blood company and you’re gonna like it! Or I’m gonna getcha! You bet your ass I’m gonna getcha!” Then, she launched into her pitch for a business called “Theranos” — a portmanteau of “Theraflu” and “Domino’s”. All in all, she seemed determined to succeed, but I was turned off by her lack of expertise with the subject. She seemed to have an incredibly poor understanding of basic biology.
Elizabeth Holmes: I want to be clear about one thing: I have no idea what’s inside of blood. I never did. But succeeding in Silicon Valley isn’t about knowing what blood is. It’s about making a billion dollars.
Phyllis Gardner: I became even more disturbed after I saw her transcript. She was only in two classes, one of which was a one-credit course called “Copying Keys 101.” That class just covered how to make copies of house keys, like those guys behind the booth at Home Depot do. The other was “Remedial American History For Complete Idiots.” None of that made me feel confident that she knew what she was doing, medicine-wise.
Channing Robertson (Chemical Engineering Professor, Stanford): I saw Phyllis Gardner at a Stanford staff event and she told me about Elizabeth Holmes’ idea. I personally thought it was genius. I’ve always wished there was a way to get your blood drawn by someone or something other than a trained professional, in someplace other than a sterile, fully equipped doctor’s office. There were many other people who agreed with me.
Larry Ellison (Oracle founder, Theranos investor): When I met Elizabeth, I could instantly tell she had something special. She was totally fearless, just dancing around my office with her switchblade and saying “It’s a blood company, idiot!! What don’t you understand about that? Give me a million bucks before I slice your little dick off!” She wouldn’t stop waving her knife in my face until I said I was in. I found that really impressive.
Tim Draper (Venture capitalist, Theranos investor): You don’t see a lot of young women in Silicon Valley who are willing to back you up against the wall behind your desk with this blade to your throat and say, “Listen, mister: I need your money to make a big blood box and I need it yesterday. Capitulate now, or there will be hell to pay!” On some level, I just wanted to see someone like that succeed. I thought to myself, “This woman could be the next Steve Jobs.”
Elizabeth Holmes: Steve Jobs embodied everything I have always wanted to be: 6’2, bald, best friends with Steve Wozniak, and the owner of a company that sells expensive rectangles that make everyone’s life more convenient and worse at the same time. There was no question: What Steve Jobs did for iMovie, I wanted to do for blood.
Phyllis Gardner: It was clear to me that Elizabeth was obsessed with becoming a tech superstar, and I could tell that she was manipulating her public image to make people respect her more. For example, in the media and at work she talks in this deep, authoritative baritone, but I’ve heard her real voice, and it’s actually much, much deeper.
Christian Holmes (Elizabeth Holmes’ brother): Ever since she was a little kid, Elizabeth has had a voice like a distant airplane taking off. It’s normally well below the range of human hearing — when she opens her mouth, you can see her forming words, and you can feel the floor shaking, but you have to strain to understand any of what she’s saying. It’s a shame, but I think she felt that if she was going to succeed as a woman in Silicon Valley, she needed to make her voice more palatable to the general public.
Joseph Fuisz (Holmes family friend): Elizabeth clearly believed that no one would take her seriously if they could feel their legs trembling from the bass in her voice before they could even understand what she was trying to tell them. It must have been difficult to keep up, but she raised her voice several octaves every time she spoke publicly, and it seems like it really worked.
Larry Ellison: People were going crazy for Elizabeth. She was making all kinds of media lists: Time’s 30 Tech Geniuses Under 30, Glamour’s 500 Female Entrepreneurs Under 90, Fortune’s 12 CEOs Who Look About 25, Forbes’ prestigious Two Ladies We Saw At The Mall Yesterday Who Seem Like They Might Be Up To Something. She was a sensation, and she was only getting started.
CHAPTER 2: The Startup
Within just a few years, Theranos reached a $200 million valuation. As trusted, high-profile public figures like former Secretaries of State Henry Kissinger and Charles Shultz joined the company’s board of directors and hundreds of scientists and engineers joined its ranks as employees, Theranos became a Silicon Valley juggernaut that seemed poised to revolutionize the healthcare industry. Elizabeth Holmes spent the next several years guiding her staff as they worked in secrecy on research and development for the phlebotomy equipment that she seemed certain would change the world.
Henry Kissinger (Former U.S. Secretary of State): I guess I was on the board at Theranos, yes. I assumed it was a birthday party for one of my nieces. Is that what it was? What was Theranos? Can someone tell me?
Charles Shultz (Former U.S. Secretary of State): The Theranos board meetings were a bit of a mixed bag. The Theranos headquarters was this huge, ultra-modern building with all-white furniture and inspirational quotes on the walls that said things like, “Please Succeed Today,” and “Blood. Excellence. Theranos. Repeat.” But if anyone asked Elizabeth if they could see any of the technology they were working on, she would yell “Trade secret!” and hit them over the head with a big club. She called that “wiping their memory.” And then, of course, there was always Henry Kissinger standing in the corner of the room with a bunch of balloons that said “Happy Birthday, Beautiful!”
Henry Kissinger: If it was my niece’s birthday party, I hope she had a nice time.
Elena Quayle (lab associate, Theranos): I accepted a job as a lab assistant at Theranos in 2005 because I thought I was getting in on the ground floor of something incredible. A lot of us felt that way — like we were going to be changing the world alongside Silicon Valley’s next big freak of nature.
Tim Devins (mechanical engineer, Theranos): I worked at Apple under Steve Jobs for fifteen years, so I was used to being part of a demanding work environment by the time I was hired at Theranos. But I could tell something was off from the get-go when Elizabeth handed me a portable karaoke machine and said “You need to figure out how to turn this into a doctor.”
Elena Quayle: Every day we were supposed to work on this blood testing machine that Elizabeth wanted to call “Dr. Holmes’ Blood Blaster 5000,” but which was eventually shortened to “The Edison.” It was supposed to be a compact, streamlined box that could perform hundreds of diagnostic blood tests instantly — but all we had to start with was a Sony brand karaoke machine with multicolor strobe lights on the front and a big, heavy microphone hanging off the side.
Elizabeth Holmes: The easiest way to become a billionaire is to sell something in the shape of a box. Walkman? Box. Computer? Box. iPod? Box. People want to see a bunch of wires in a box. And that’s what I was going to give them.
Elena Quayle: Elizabeth had clearly just gotten this karaoke machine from a Circuit City. There was still a receipt stuck to it. But she told us that this was the prototype for the Edison, and that she wanted people to be able to stick their hands inside it and immediately find out how they were going to die. I thought that sounded impossible, but we had to try. When you spoke to Elizabeth, she had a way of making you believe in her vision.
Tim Devins: We pretty quickly figured out a way that we could get the karaoke machine to play “Ain’t No Other Man” by Christina Aguilera. We would have test subjects come in and sing along to Ain’t No Other Man, and then we would try to decide if they had a disease or not based on how well they did. As a scientist, it was not a diagnostic method I felt good about using, but it was the best we could do at the time.
Alex Gutierrez (biochemist, Theranos): The next iteration of the Edison was great at some things, but not at others. We got to a point where our machine could prick someone’s finger for a blood sample, but we couldn’t figure out how to test the blood. All we could do was create a flawless, sentient clone of that person. So then we had at least a hundred clones running around that we had to lock up in the boiler room. We put up a volleyball net for them, so for a while they had a pretty good time, but eventually they started clawing at the walls and trying to escape. All the desperate scratching sounds made the work environment at Theranos that much more unpleasant.
Tim Devins: I’m pretty sure those clones all got let out when the company shut down. I hope they’re doing all right, wherever they are. None of them have Social Security numbers.
Elena Quayle: The last Edison machine we came up with was just a toaster. We figured if we couldn’t give people a blood test, it would be nice if they at least had some toast.
Alex Gutierrez: We were beginning to realize that the technology Elizabeth was asking for wasn’t going to be possible, but she refused to take no for an answer. One time, she made me stick my hand in the toaster, turned it on, and when I pulled it out all red and burnt she said “See? It works. You have lupus.” But as mean as she was, things got ten times worse when she hired Sunny Balwani as Theranos’s president.
Elizabeth Holmes: Beginning in 2009, Sunny was my right-hand man and the head of day-to-day operations at Theranos. Yes, we did have a romantic relationship, but we never brought that into the workplace. We kissed on the lips, sure, but that’s what I would have done with any president of the company, as a show of respect.
Ramesh “Sunny” Balwani: I first met Elizabeth when I was driving down University Avenue in Palo Alto, and she was on the sidewalk, dragging a burlap sack full of hundred dollar bills behind her. She was the most perfect woman I had ever laid eyes on. I yelled “Hey lady! What’s the cash for?” and she yelled back “Theranos stuff!” It was the start of an incredible relationship.
Tim Devins: Once Elizabeth and Sunny got together, there was no chance of getting through to them. If you went to raise a concern, they would just stand there giving each other peck after peck on the lips until you backed down. They insisted they weren’t dating, and that it was a classic Silicon Valley custom between a company’s president and CEO.
Alex Gutierrez: We all had to gather every morning in the cafeteria for a “Leaders’ Kiss” ceremony, where Elizabeth and Sunny would hold hands and kiss each other on the lips while all the employees chanted “This is normal! This is normal!” It was their way of lording their power over us.
Ramesh “Sunny” Balwani: I just couldn’t stay away from Elizabeth. She was everything I had ever wanted in a woman: she hated getting her blood drawn, she dressed kind of like Steve Jobs, and she could make a copy of your house keys in under an hour. We were an unstoppable team.
Elena Quayle: I started dreading going to work every morning. One time, Elizabeth and Sunny called me into their shared office to formally reprimand me, because they said my desk wasn’t clean enough for them to make out on top of. I had to stay late Lysoling it down.
Tim Devins: One time I asked Elizabeth if she could quit spritzing cologne onto Sunny’s neck and come take a look at this robotic arm I was working on for the Edison, but she just turned to me, sprayed the cologne right in my eyes and screamed, “It’s Valentine’s Day, asshole! Mind your own business!” It was the middle of June, but I was too afraid to argue with her.
Alex Gutierrez: When investors came by the lab to check up on our operations and try out the Edison machines, Elizabeth and Sunny made us turn out all the lights, lay down on the floor, and pretend we were asleep. Sometimes it would take hours before the visiting investors gave up and went away. Things were going downhill fast, but all of us wanted to believe that they could still turn around.
CHAPTER 3: The Downfall
As research and development continued, Elizabeth Holmes began her quest to bring Theranos’ cutting-edge technology to consumers. But faulty test results and rising skepticism about Theranos’s scientific claims were beginning to spell trouble for the company. Still, Holmes continued to thrive in the public eye, keeping the media and the tech industry in her thrall.
Elizabeth Holmes: It was my dream to put an Edison machine in every Pacsun in America. I wanted to make taking charge of your health as easy as giving a single finger prick of blood right after you finish paying for a pair of light wash bootcut jeans and a zip-up sweatshirt with the Billabong logo on it. But Pacsun wasn’t interested, so we moved on to our plan B: Walgreens.
Jeffrey Heinen (Director of Business Development, Walgreens): When Elizabeth Holmes approached me about putting Edison machines in Walgreens, I agreed immediately. I’m always looking to put more junk in the back of a Walgreens. We’ve already got those shitty old blood pressure machines that only kids who are waiting for their parents to be done at the pharmacy ever use, plus those weird, dirty-looking shelves full of on-sale diet pills and off-brand Easter candy and whatnot, so I figured, why not add whatever the hell this woman is talking about?
Elizabeth Holmes: One of the highlights of our marketing campaign was when I got the chance to film a Theranos commercial with the great Errol “You Can Bet Your Ass He’s Showbiz’s Finest Errol” Morris.
Errol Morris (Documentarian): A lot of people ask me, “Errol, why did you agree to make a commercial for Theranos? What were you thinking? Didn’t you make “The Thin Blue Line”? Aren’t you tirelessly committed to justice and truth-telling? Couldn’t you tell Elizabeth Holmes was a fraud?” I tell those people, “Do you know who I am? I’m Errol freaking Morris, okay? I ask you the questions. I make a documentary about you. I figure out why you made a commercial for Theranos, not the other way around. Capisce?” And by the time I’m done saying all that, they’ve usually walked away.
Tim Devins: The Walgreens deal was the last straw for me. It was incredibly dishonest. We all knew that the Edison was a disaster. Almost everyone who used it, regardless of age or sex, got told that they were pregnant, and also had rubella.
Alex Gutierrez: There were literally thousands of people out on the street every day, screaming in horror and tearing out their hair because they thought they were going to die of rubella in the middle of their unwanted pregnancies. It was not right that we put people through that.
Elena Quayle: After the Walgreens rollout, Sunny forced me to hire my 12-year-old cousin to ferry all the blood samples from the Edison machines at Walgreens to nearby commercial labs that could process them. He and Elizabeth would do anything to cover up the fact that the Edison didn’t work.
Melanie Wellner (Edison machine user): I was so excited to take my first Theranos test at the drugstore, because normally I hate getting my blood drawn. But the test turned out to be a major disappointment. First of all, as soon as I walked up to the Edison machine, I could see a man in full camouflage crouching right behind it. I figured that was a fluke, so I tried to just ignore him while I stuck my hand inside and let the machine prick my finger. But then, a second later, I saw the man grab a tiny vial of my blood from the machine and furiously army crawl out the back door of the Walgreens. I followed him, and from the door he tossed the vial to this little boy in a bucket hat who was sitting on a BMX bike in the back parking lot. As soon as the kid caught the vial, he started pedaling like hell up the street — I assume to take my blood to some kind of lab. Later that night, the test results came back saying that I was already dead. That wasn’t really what I was looking for from the Theranos experience.
John Carreyrou (Author, “Bad Blood: Secrets And Lies In Silicon Valley”): I had been following the Theranos story with a level of skepticism for years, but it was 2015 when the company started to seem really shady to me. That was when I brought my telescope up to the roof of a hair salon across the street from their lab and started seeing for myself what was going on behind closed doors.
Vicky Imel (Owner, Fantasy Cuts Hair Salon): Yeah, I let that reporter guy use my roof to spy on Theranos. I don’t like that place. I used their machine and it told me my blood “smelled wrong.” I don’t let anyone say that kind of thing to me, especially at my own neighborhood Walgreens.
John Carreyrou: Once I climbed on top of Fantasy Cuts and trained my telescopic lens on the Theranos building, all my suspicions were confirmed: I was instantly able to spot Elizabeth and Sunny Balwani running towards each other from opposite ends of a room with their lips all puckered like they were going to kiss each other, then accidentally bashing their heads together and spinning around a bunch before collapsing on the floor. I realized that they were putting on a competent face for the public, but had no idea what they were doing.
Alex Gutierrez: It seemed like a few people were catching on to what was going on inside Theranos, but at the same time, the general public was still obsessed with her. In 2015, President Obama even made Elizabeth one of his administration’s Presidential Ambassadors For Global Entrepreneurship and invited her to the White House. And Vice President Biden flew out to tour the Theranos facility.
Barack Obama (U.S. President, 2008-2016): I don’t know what you’re talking about. I have never invited Elizabeth Holmes anywhere. Michelle must have snuck into my office and done that. Michelle loves Theranos. Not me. I think Theranos is stupid.
Joe Biden (U.S. Vice President, 2008-2016): Everyone is so mad at me for visiting Theranos, but the truth is, I saw some incredible things there. They had this room full of vials, beakers, little dropper things, machines everywhere — I think they called it a “science laboratory.” I don’t know how they thought that up, but in my opinion, it was genius.
John Carreyrou: Soon, I began speaking anonymously to some Theranos employees about what was going on at the company. I would stand on the roof of Fantasy Cuts waving furiously until I caught someone’s attention through the Theranos window. Then I would signal for them to come over to the salon, and while Vicky gave them a bowl cut, I’d ask them some questions.
Vicky Imel: The bowl is the only hair shape that’s universally flattering. I give all my clients bowl cuts, unless they’re bald, in which case I put a wig on them.
Elena Quayle: I was really happy that John Carreyrou was trying to report the truth about Theranos, but it was scary to be a whistleblower because you always came back with the telltale bowl cut. Fortunately, enough of us got them that it just became a trend in its own right, and even people who weren’t talking to John were showing up to work with round, floppy hairdos.
Vicky Imel: I gotta say, John interviewed a lot of those Theranos employees in front of me while I was giving them bowl cuts, and honestly the company didn’t sound so bad. The bosses were always kissing, which I think is cute.
John Carreyrou: After speaking with a few employees, I knew I had a bombshell story on my hands. It was time for me to pack up my telescope, bring it home, remove any dirt and debris using a microfiber cloth, pack it up again, store it safely in my attic, lock the door to my attic, call my brother over to my house to double check that I locked the attic properly, make dinner for my brother to thank him for helping me with the attic thing, eat dinner with my brother, wash the dishes, walk my brother out to his car, come back inside, and get writing.
CHAPTER 4: The Aftermath
October 2015 was the beginning of the end for Theranos: John Carreyrou exposed the company’s fraudulent testing practices in the Wall Street Journal, and by the next year Theranos was the subject of an SEC investigation. Theranos finally shuttered in 2018, and as of 2020, Elizabeth Holmes and Sunny Balwani are still awaiting criminal trial on multiple fraud charges that could land them in prison for 20 years. Both have pleaded not guilty.
Elena Quayle: Public opinion about Theranos finally started to shift after John Carreyrou’s stories came out. You would be at a newstand and see a Wired magazine with a cover story called “Elizabeth Holmes Is The Albert Einstein Of Blood,” but right next to it would be the WSJ with a front page story called “Elizabeth Holmes Is The Cal Ripken, Jr. Of Blood.” To understand that one, you had to know that John Carreyrou thinks Cal Ripken, Jr. is an idiot. Once people caught on, it was all over.
John Carreyrou: The morning my first Theranos story came out, I woke up to my phone ringing off the hook. It was my dentist’s office calling to remind me that I had a 9:30 a.m. appointment scheduled the following Wednesday. It would have been nice if they had mentioned my big article, but I guess they hadn’t seen it yet.
Phyllis Gardner: I’ve been a Theranos skeptic from the start, so I wasn’t surprised at all when Elizabeth and Sunny were finally exposed. In fact, when the news broke, I was already halfway done cross-stitching my decorative “Elizabeth Holmes And Sunny Balwani Will Soon Face Criminal Fraud Charges For Their Terrible, Terrible Lies” pillow.
Alex Gutierrez: I got the news that Theranos was done when I was at the lab, in the middle of trying to get the Edison to stop flashing “I DON’T LIKE YOU” on its screen anytime a patient would give a blood sample. I knocked the Edison over and sprinted out of the office, straight to my house. I was excited to put the Theranos chapter behind me.
Tim Devins: I was relieved when I heard the company was finally shutting down, but unfortunately, it can be hard to get a new job in Silicon Valley when you have Theranos on your resumé. I understand that I look silly for ever having believed in Elizabeth Holmes. But if you had ever witnessed her in action, running around you in tighter and tighter circles while rapid-fire jabbing that switchblade into the air in front of her, you might understand. She was a truly mesmerizing figure.
Elena Quayle: There were times when I was watching Elizabeth and Sunny doing a sexually suggestive tango across the Theranos cafeteria and I would just be praying that somehow, some way, they would stop mid-backbend, turn around to face me, and say “We’ve got a plan. We’ve got a way to make Theranos work.” It never happened, though. There was a lot of wishful thinking that went on at that company.
Elizabeth Holmes: John Carreyrou calling me the Cal Ripken, Jr. of blood was a double-edged sword — I knew he meant it as a pejorative, but Cal Ripken, Jr. is also one of the baldest men in baseball, which I admire. What was really difficult was when the law started coming after me, all because some people didn’t like what my machines were saying about their blood.
Sunny Balwani: I will tell you the same thing I told the SEC, the FBI, and everyone else who has asked me: my beautiful Elizabeth and I did nothing wrong. We were in love, and sometimes falling in love means defrauding hundreds of people to help keep your girlfriend’s biotech business afloat. If loving someone so much that you commit crimes on their behalf is a crime, then lock me up and throw away the key.
Tim Draper: I’ll get a lot of criticism for this, but I stand by my investment in Theranos and I always will. Elizabeth was the only person in the world with the vision and the foresight to realize that sometimes you don’t want accurate health data — you want health data from a box that has a needle inside of it. Someday, that idea will prevail.
Henry Kissinger: Maybe Theranos was a lovely party for my great-niece. She is turning 28 this year. She is a wonderful young woman.
Elizabeth Holmes: The media and the government took some big swings against me. They’re intent on ruining my business prospects, but I won’t let them keep me down. I already have a new idea for a compact, easy-to-use machine that takes a picture of your eye and analyzes the picture to tell you how old you are. It can get within 6 years of your exact age 85% of the time. The working name is the “Dr. Holmes Eye Blaster 5000.”
Sunny Balwani: By 2022, there will be a Dr. Holmes Eye Blaster 5000 in every home in America. Mark my words.
Elizabeth Holmes: The bottom line is, you can’t trust everything that people are saying about me. Silicon Valley is all about risk, and that’s exactly what Theranos was. When I started the company, I still had some things to learn about medicine. Did I know what ingredients God uses to make blood red? No. Did I know the names of all five veins in the human body? No. Did I know why people hate dying so much? No. I didn’t know any of that. What I knew is that I had a vision. And I still do.
John Carreyrou: It can be hard to make sense of how Theranos got as far as it did before collapsing in on itself. There are a lot of explanations you could give for what happened. Maybe it was a one-in-a-million fluke. Maybe it was the power of Elizabeth’s switchblade. Maybe it was all a fanciful dream playing out in the head of a slumbering giant in a faraway cave, and none of us exist at all. It’s hard to say. In the end, I think everyone just wanted to believe that a deranged woman with an unhinged lust for a billion dollars could change the healthcare industry forever. I guess we were all wrong.