1 00:00:06,000 --> 00:00:12,074 2 00:00:22,542 --> 00:00:24,142 Interviewer: We've had a great opportunity 3 00:00:24,208 --> 00:00:25,810 in asking so many people so many questions 4 00:00:25,834 --> 00:00:28,458 about things ranging from the future to, kind of, advice, 5 00:00:28,542 --> 00:00:31,125 and we thought we'd ask a few questions 6 00:00:31,208 --> 00:00:33,959 that run a little bit of a gamut, really quickly. 7 00:00:34,041 --> 00:00:37,083 - Mm. Okay. - Woman: Can you look into the lens? 8 00:00:37,166 --> 00:00:39,959 Interviewer: We thought it would be interesting to ask you, 9 00:00:40,041 --> 00:00:41,166 in the year 2025, 10 00:00:41,250 --> 00:00:43,959 what's the thing you're most certain about? 11 00:00:44,041 --> 00:00:50,125 More people will have access to their own health information. 12 00:00:50,208 --> 00:00:53,083 Interviewer: What do you dream for? Something in 2025? 13 00:00:53,166 --> 00:00:55,959 That less people have to say goodbye too soon 14 00:00:56,041 --> 00:00:57,458 to people they love. 15 00:00:57,542 --> 00:01:00,458 Interviewer: That's great. Can you tell us a secret? 16 00:01:03,792 --> 00:01:06,333 ♪ ♪ 17 00:01:06,417 --> 00:01:08,500 I don't have many secrets. Um... 18 00:01:08,583 --> 00:01:10,625 ♪ ♪ 19 00:01:25,625 --> 00:01:28,208 Charlie Rose: Are you a scientist or a technologist? 20 00:01:28,291 --> 00:01:29,625 Or an entrepreneur? 21 00:01:29,709 --> 00:01:31,625 Elizabeth Holmes: I think I'm an entrepreneur. 22 00:01:31,709 --> 00:01:33,709 I was trained as an engineer, 23 00:01:33,792 --> 00:01:36,041 but... now my time is spent 24 00:01:36,125 --> 00:01:39,458 on doing whatever it takes to realize this mission. 25 00:01:40,291 --> 00:01:42,000 Theranos is the integration 26 00:01:42,083 --> 00:01:45,041 of the words therapy and diagnosis. 27 00:01:45,125 --> 00:01:47,375 And if we can shift toward a model in which 28 00:01:47,458 --> 00:01:50,333 we're determining the onset of disease 29 00:01:50,417 --> 00:01:52,834 in time for therapy to be effective, 30 00:01:52,917 --> 00:01:54,834 we will change outcomes. 31 00:01:55,625 --> 00:01:58,125 You founded this company 12 years ago, right? 32 00:01:58,208 --> 00:01:59,667 Tell 'em how old you were. 33 00:01:59,750 --> 00:02:02,041 - I was 19. - Yeah. 34 00:02:02,125 --> 00:02:05,000 (audience applause) 35 00:02:05,083 --> 00:02:07,250 Holmes: There was never sort of a plan 36 00:02:07,333 --> 00:02:09,834 to drop out of Stanford, but I found what I loved. 37 00:02:09,917 --> 00:02:14,208 I found what I wanted to spend my life doing. 38 00:02:14,291 --> 00:02:17,291 Pattie Sellers: Elizabeth has raised more than $400 million. 39 00:02:18,333 --> 00:02:21,500 The company is valued at $9 billion. 40 00:02:21,583 --> 00:02:24,208 You own over 50% of it, right? 41 00:02:24,291 --> 00:02:26,125 - Congratulations on that. - (audience laughs) 42 00:02:26,208 --> 00:02:29,417 Holmes: We've got an incredible opportunity to try to uphold 43 00:02:29,500 --> 00:02:31,667 a legacy in Silicon Valley of changing the world. 44 00:02:31,750 --> 00:02:34,333 And we like to think about it as a movie, 45 00:02:34,417 --> 00:02:38,333 and you can begin to see that story in a better way. 46 00:02:39,667 --> 00:02:42,250 We see a world in which every person 47 00:02:42,333 --> 00:02:44,125 has access 48 00:02:44,208 --> 00:02:46,625 to actionable health information 49 00:02:46,709 --> 00:02:49,083 at the time it matters. 50 00:02:49,166 --> 00:02:50,667 A world in which 51 00:02:50,750 --> 00:02:52,375 no one ever has to say, 52 00:02:53,375 --> 00:02:56,041 "If only I'd known sooner." 53 00:02:57,125 --> 00:02:58,959 A world in which 54 00:02:59,041 --> 00:03:02,250 no one ever has to say goodbye too soon. 55 00:03:02,333 --> 00:03:04,959 ♪ ♪ 56 00:03:05,041 --> 00:03:06,959 This future 57 00:03:07,041 --> 00:03:09,166 is beginning now. 58 00:03:16,917 --> 00:03:19,041 (birds chirping) 59 00:03:21,792 --> 00:03:24,458 Narrator: Nestled in the foothills above Silicon Valley, 60 00:03:24,542 --> 00:03:26,834 there is a 700-acre plot of land 61 00:03:26,917 --> 00:03:29,500 called the Stanford Research Park. 62 00:03:29,583 --> 00:03:32,792 According to the website, it's a community of and for people 63 00:03:32,875 --> 00:03:35,291 who seek to invent the future. 64 00:03:35,375 --> 00:03:38,333 From here came elements of the microwave tube, 65 00:03:38,417 --> 00:03:42,417 the mainframe computer, and the International Space Station. 66 00:03:42,500 --> 00:03:44,834 Steve Jobs spent time here, 67 00:03:44,917 --> 00:03:48,166 so did Mark Zuckerberg and Elon Musk. 68 00:03:48,250 --> 00:03:51,291 Elizabeth Holmes saw herself in their company. 69 00:03:51,375 --> 00:03:54,792 So in the fall of 2014, she moved her biotech startup 70 00:03:54,834 --> 00:03:57,208 Theranos to the research park. 71 00:03:57,291 --> 00:03:59,667 The company employed 800 people 72 00:03:59,709 --> 00:04:03,291 and was valued at nearly $10 billion. 73 00:04:03,375 --> 00:04:06,667 Four years later, it was worth less than zero. 74 00:04:06,792 --> 00:04:09,250 ♪ ♪ 75 00:04:09,291 --> 00:04:11,000 To understand what happened, 76 00:04:11,125 --> 00:04:13,417 it pays to look past the price of the stock 77 00:04:13,500 --> 00:04:15,625 to the value of the story. 78 00:04:15,667 --> 00:04:19,709 This compelling tale of divining hundreds of diseases from a drop of blood 79 00:04:19,834 --> 00:04:23,125 was a testament to the imagination of the inventor. 80 00:04:24,834 --> 00:04:26,709 In the deserted property she designed, 81 00:04:26,834 --> 00:04:29,834 you can almost hear the echoes of her ambition 82 00:04:29,959 --> 00:04:33,083 and see how glass walls, promising transparency, 83 00:04:33,166 --> 00:04:35,333 could become a labyrinth of mirrors. 84 00:04:36,834 --> 00:04:38,542 Was Elizabeth lost in a landscape 85 00:04:38,667 --> 00:04:40,500 between what she could make real 86 00:04:40,542 --> 00:04:42,792 and the world of make-believe? 87 00:04:44,500 --> 00:04:48,083 Dan Ariely: For me, this was a story of how people get trapped 88 00:04:48,166 --> 00:04:51,834 over time with trading off human values. 89 00:04:52,375 --> 00:04:54,667 And then, the way that they trade off those values 90 00:04:54,709 --> 00:04:57,959 change them as people and things go down. 91 00:04:58,041 --> 00:05:01,375 So part of it was trying to understand... 92 00:05:02,250 --> 00:05:04,291 and I think this is part of the story... 93 00:05:04,375 --> 00:05:05,625 is the journey for Elizabeth. 94 00:05:05,709 --> 00:05:08,667 Some people take a path, 95 00:05:08,750 --> 00:05:11,625 trying to do positive things for the world, right? 96 00:05:11,709 --> 00:05:14,166 Nobody questions that her motives were... 97 00:05:14,250 --> 00:05:17,458 were positive, but end up being something bad. 98 00:05:17,542 --> 00:05:18,792 How do we react to this? 99 00:05:18,875 --> 00:05:21,083 You can look at her at the end, 100 00:05:21,166 --> 00:05:22,959 and say how could she do this, 101 00:05:23,041 --> 00:05:25,417 but I think that would miss the point 102 00:05:25,500 --> 00:05:28,083 if you don't understand the journey. 103 00:05:28,166 --> 00:05:30,125 If you look at her from the beginning, 104 00:05:30,208 --> 00:05:32,333 it will be a cautionary tale about all of us. 105 00:05:32,417 --> 00:05:34,125 ♪ ♪ 106 00:05:34,208 --> 00:05:36,667 (projector whirring) 107 00:05:36,750 --> 00:05:39,041 (children chattering) 108 00:05:39,125 --> 00:05:41,709 Holmes: I grew up spending summers 109 00:05:41,792 --> 00:05:44,417 and the holidays with my uncle. 110 00:05:46,417 --> 00:05:48,625 I remember how much he loved the beach. 111 00:05:49,834 --> 00:05:52,917 I remember how much I loved him. 112 00:05:54,583 --> 00:05:57,625 He was diagnosed one day with skin cancer, 113 00:05:58,792 --> 00:06:01,041 which all of a sudden was brain cancer, 114 00:06:01,750 --> 00:06:03,917 and in his bones. 115 00:06:05,083 --> 00:06:08,083 He didn't live to see his son grow up, 116 00:06:09,250 --> 00:06:11,625 and I never got to say goodbye. 117 00:06:13,583 --> 00:06:18,792 The right to protect the health and well-being 118 00:06:19,709 --> 00:06:24,417 of every person, of those we love, 119 00:06:25,291 --> 00:06:28,291 is a basic human right. 120 00:06:29,709 --> 00:06:31,583 Over the course of the last 11 years, 121 00:06:31,667 --> 00:06:34,583 we've made it possible to run 122 00:06:34,667 --> 00:06:37,166 comprehensive laboratory tests 123 00:06:37,250 --> 00:06:39,709 from a few drops of blood 124 00:06:39,792 --> 00:06:42,792 that could be taken from a finger. 125 00:06:48,375 --> 00:06:50,667 And we've made it possible 126 00:06:50,750 --> 00:06:54,000 to eliminate the tubes and tubes of blood 127 00:06:54,083 --> 00:06:57,250 that traditionally have to be drawn from an arm, 128 00:06:58,709 --> 00:07:02,125 and replaced it with the nanotainer. 129 00:07:02,208 --> 00:07:05,333 ♪ ♪ 130 00:07:14,709 --> 00:07:17,125 And if I had one wish, 131 00:07:17,208 --> 00:07:19,917 standing here with all of you, 132 00:07:20,000 --> 00:07:24,417 it would be that no one has to go through the pain 133 00:07:24,500 --> 00:07:26,709 of traditional phlebotomy. 134 00:07:28,250 --> 00:07:29,917 I was always... 135 00:07:30,000 --> 00:07:32,125 absolutely terrified of giving blood. 136 00:07:32,208 --> 00:07:34,583 It's the only thing in my life I've ever been scared of. 137 00:07:34,667 --> 00:07:36,792 ♪ ♪ 138 00:07:41,083 --> 00:07:44,208 (squelching) 139 00:07:47,041 --> 00:07:49,709 If we were to sit here and dream up torture experiments, 140 00:07:49,792 --> 00:07:53,125 psychologically, the concept of sticking large needles 141 00:07:53,208 --> 00:07:55,333 over and over into someone, 142 00:07:55,417 --> 00:07:57,625 and draining out so much blood, 143 00:07:57,709 --> 00:08:00,709 while they're watching this blood being sucked out of them, 144 00:08:00,792 --> 00:08:04,625 that you've basically completely debilitated them, 145 00:08:04,709 --> 00:08:08,625 that qualifies as a pretty good torture experiment in my book. 146 00:08:08,709 --> 00:08:11,583 I find it quite disturbing. 147 00:08:11,667 --> 00:08:14,208 ♪ ♪ 148 00:08:16,875 --> 00:08:19,709 Newsreel Narrator: This technician is preparing the blood sample 149 00:08:19,792 --> 00:08:21,917 for a white cell count. 150 00:08:22,000 --> 00:08:24,709 She dilutes the blood with a special fluid 151 00:08:24,792 --> 00:08:28,208 and puts a measured amount into a pipette. 152 00:08:28,291 --> 00:08:30,917 Holmes: Since, really, the clinical lab infrastructure 153 00:08:31,000 --> 00:08:34,792 began to develop, we've had this highly centralized, 154 00:08:34,875 --> 00:08:37,375 very big, analytical instruments 155 00:08:37,458 --> 00:08:39,792 which require that much blood, 156 00:08:39,875 --> 00:08:43,625 and therefore, people have had to take tubes and tubes 157 00:08:43,709 --> 00:08:46,458 every time they do a blood draw. 158 00:08:46,542 --> 00:08:50,917 So, laboratory testing hasn't changed since the 1950s. 159 00:08:51,000 --> 00:08:55,000 It's the closest thing to mainframe computers versus... 160 00:08:55,083 --> 00:08:58,083 it's not even PCs... versus mobile phones that... 161 00:08:58,166 --> 00:09:00,291 that I've ever seen, right? 162 00:09:00,375 --> 00:09:04,750 So, the timing is very ripe to change this paradigm. 163 00:09:06,959 --> 00:09:10,000 ♪ ♪ 164 00:09:18,750 --> 00:09:20,083 (clicks) 165 00:09:21,417 --> 00:09:22,834 (snaps) 166 00:09:24,834 --> 00:09:26,250 (clicks) 167 00:09:29,291 --> 00:09:30,750 (clicks) 168 00:09:32,792 --> 00:09:34,333 (whirs) 169 00:09:36,041 --> 00:09:39,375 There's no shortcut to really hard work. 170 00:09:39,458 --> 00:09:41,875 And we learn so much more from our failures 171 00:09:41,959 --> 00:09:44,709 than we did from our successes. 172 00:09:44,792 --> 00:09:46,875 We code-named our product "The Edison" 173 00:09:46,959 --> 00:09:49,875 because we assumed we'd have to fail 10,000 times 174 00:09:49,959 --> 00:09:52,500 to get it to work the 10,001st. 175 00:09:53,583 --> 00:09:54,959 And we did. 176 00:09:58,500 --> 00:10:00,625 (projector whirring) 177 00:10:06,000 --> 00:10:08,917 Narrator: What does it mean to invent something? 178 00:10:09,000 --> 00:10:11,125 It could be an act of creation, 179 00:10:11,208 --> 00:10:13,250 or an act of deception. 180 00:10:13,333 --> 00:10:15,709 The world's greatest inventor did both. 181 00:10:15,792 --> 00:10:17,709 We think of Thomas Edison 182 00:10:17,792 --> 00:10:19,583 as the inventor of the phonograph, 183 00:10:19,667 --> 00:10:22,375 the electric light bulb, and the way we look at the world. 184 00:10:22,458 --> 00:10:26,417 Edison's company made one of the first motion picture cameras 185 00:10:26,500 --> 00:10:31,000 and the very first commercial movie, Blacksmithing Scene. 186 00:10:31,083 --> 00:10:33,208 ♪ ♪ 187 00:10:38,208 --> 00:10:41,208 His company produced over 1,200 films, 188 00:10:41,291 --> 00:10:43,542 documentaries and fiction films, 189 00:10:43,625 --> 00:10:45,875 including the first screen kiss. 190 00:10:48,333 --> 00:10:50,375 ♪ ♪ 191 00:10:51,667 --> 00:10:55,208 But Edison's greatest invention may have been himself. 192 00:10:55,291 --> 00:10:56,750 The first celebrity businessman, 193 00:10:56,834 --> 00:11:00,041 Edison's secret was knowing how to tell a good story, 194 00:11:00,125 --> 00:11:03,125 in which he cast himself as the main character. 195 00:11:03,208 --> 00:11:05,166 "The Wizard of Menlo Park," 196 00:11:05,250 --> 00:11:09,041 a man who could conjure anything in his laboratory. 197 00:11:09,125 --> 00:11:11,667 (typewriter clacking) 198 00:11:11,750 --> 00:11:13,125 (scribbling) 199 00:11:13,208 --> 00:11:15,542 He had his name on over 2,000 patents, 200 00:11:15,625 --> 00:11:17,542 from telegraphs to vacuum pumps 201 00:11:17,625 --> 00:11:20,667 to electric cars. 202 00:11:20,750 --> 00:11:24,125 But he often promised far more than he could deliver. 203 00:11:24,208 --> 00:11:27,375 In 1878, the New York Sun printed a claim by Edison 204 00:11:27,458 --> 00:11:30,709 that he had solved the mystery of the incandescent light bulb. 205 00:11:30,792 --> 00:11:32,875 But it wasn't true. 206 00:11:32,959 --> 00:11:34,500 His filaments kept melting. 207 00:11:34,583 --> 00:11:36,542 When reporters and investors 208 00:11:36,625 --> 00:11:39,750 asked for demonstrations, he faked them. 209 00:11:39,834 --> 00:11:41,458 To keep journalists sympathetic, 210 00:11:41,542 --> 00:11:43,667 he gave them stock in his company. 211 00:11:43,750 --> 00:11:45,166 ♪ ♪ 212 00:11:45,250 --> 00:11:48,458 For four years, he pretended his invention was good to go, 213 00:11:48,542 --> 00:11:51,083 even while he scrambled to make it work. 214 00:11:51,166 --> 00:11:54,125 Then, just before his money and credit ran out, 215 00:11:54,208 --> 00:11:57,333 he solved the problem of how to keep the lights on. 216 00:11:58,959 --> 00:12:01,792 He was the first to practice the Silicon Valley art 217 00:12:01,875 --> 00:12:04,083 of "fake it till you make it." 218 00:12:06,166 --> 00:12:09,583 More than a hundred years after Edison's first movies, 219 00:12:09,667 --> 00:12:12,500 Elizabeth Holmes modeled her own ambitious career 220 00:12:12,583 --> 00:12:14,583 after the great American inventor, 221 00:12:14,667 --> 00:12:17,959 with a magical machine named after the man himself. 222 00:12:22,208 --> 00:12:25,625 Roger Parloff: It was obviously such an incredible story. 223 00:12:25,709 --> 00:12:28,583 The 19-year-old, the dropout, 224 00:12:28,667 --> 00:12:31,375 a woman creating this $9 billion 225 00:12:31,458 --> 00:12:33,667 innovative company. 226 00:12:34,458 --> 00:12:37,083 I went out there for four days: 227 00:12:37,166 --> 00:12:40,458 three interviewing her and one interviewing some other people. 228 00:12:40,542 --> 00:12:42,417 What are you working on? 229 00:12:42,500 --> 00:12:44,959 Parloff: When she was talking about some subject 230 00:12:45,041 --> 00:12:47,500 other than diagnostic testing, 231 00:12:47,583 --> 00:12:49,667 she was very unprepossessing, 232 00:12:49,750 --> 00:12:51,750 very ingenuous. 233 00:12:51,834 --> 00:12:54,208 When she began to talk about... 234 00:12:54,291 --> 00:12:57,458 the mission, or the, you know, her business, 235 00:12:57,542 --> 00:12:59,417 then there was a shift, 236 00:12:59,500 --> 00:13:03,375 and she became very, very focused, very intense. 237 00:13:03,458 --> 00:13:06,375 Firm control of all the facts. 238 00:13:06,458 --> 00:13:08,333 No question surprised her. 239 00:13:08,417 --> 00:13:12,959 Um... very impressive, and very idealistic. 240 00:13:13,041 --> 00:13:16,208 (applause) 241 00:13:17,917 --> 00:13:19,792 Sellers: We were the first to put on the cover 242 00:13:19,875 --> 00:13:23,625 and write a major story about this amazing woman next to me. 243 00:13:23,709 --> 00:13:27,750 "This CEO Is Out for Blood." 244 00:13:29,166 --> 00:13:31,208 This is Elizabeth's second 245 00:13:31,291 --> 00:13:33,625 public live interview... 246 00:13:33,709 --> 00:13:36,792 Parloff: Fortune invited her to the Most Powerful Women's conference, 247 00:13:36,875 --> 00:13:41,417 even though she wasn't the head of a Fortune 500 company. 248 00:13:41,500 --> 00:13:43,208 And she was saying to us, 249 00:13:43,291 --> 00:13:47,792 "I'm the only one of these people that founded a company." 250 00:13:47,875 --> 00:13:50,417 You know, "They're CEOs, 251 00:13:50,500 --> 00:13:52,625 "yeah, but I founded this company. 252 00:13:52,709 --> 00:13:56,125 "I invented what this company is about. 253 00:13:56,208 --> 00:13:57,667 I deserve to be here." 254 00:13:57,750 --> 00:13:59,510 I'll talk with people sometimes, they'll say, 255 00:13:59,583 --> 00:14:01,375 "Oh, you know, I want to start a business." 256 00:14:01,458 --> 00:14:04,375 And my question is always why, 257 00:14:04,458 --> 00:14:07,166 because there's gotta be a mission. 258 00:14:07,250 --> 00:14:09,333 ♪ ♪ 259 00:14:09,417 --> 00:14:11,667 Ken Auletta: I had heard about Theranos 260 00:14:11,750 --> 00:14:14,333 and Elizabeth Holmes, a woman executive 261 00:14:14,417 --> 00:14:17,166 in the male-dominated Silicon Valley, 262 00:14:17,250 --> 00:14:18,625 who was starting a company 263 00:14:18,709 --> 00:14:21,417 with some real potential social good. 264 00:14:22,333 --> 00:14:24,458 I write a lot about disruption, 265 00:14:24,542 --> 00:14:28,125 and Theranos was aimed to be a disruptor 266 00:14:28,208 --> 00:14:30,208 of the established ways of doing things, 267 00:14:30,291 --> 00:14:31,834 the established, inefficient, 268 00:14:31,917 --> 00:14:34,500 and expensive ways of doing things. 269 00:14:34,583 --> 00:14:36,875 And she was going to herald 270 00:14:36,959 --> 00:14:40,458 a revolution in medical treatment in this country. 271 00:14:46,458 --> 00:14:50,959 ♪ ♪ 272 00:14:52,834 --> 00:14:54,917 Narrator: The lab industry needed disrupting. 273 00:14:55,000 --> 00:14:57,041 It was dominated by two companies: 274 00:14:57,125 --> 00:14:59,208 Quest and LabCorp. 275 00:14:59,291 --> 00:15:01,917 Between them, they controlled almost 80% of the market. 276 00:15:02,000 --> 00:15:06,917 Their blood test prices were always high and never transparent. 277 00:15:07,000 --> 00:15:09,375 They were sued for overcharging Medicaid and Medicare 278 00:15:09,458 --> 00:15:10,875 for billions of dollars. 279 00:15:10,959 --> 00:15:12,667 But the size of their operations, 280 00:15:12,750 --> 00:15:15,834 including the ability to do over a thousand different blood tests, 281 00:15:15,917 --> 00:15:18,500 made them difficult to challenge. 282 00:15:18,583 --> 00:15:21,667 Until Elizabeth Holmes and Edison. 283 00:15:23,000 --> 00:15:26,083 Auletta: She had built a staff of 700 people. 284 00:15:26,166 --> 00:15:30,041 Well, I went out to look at the Newark, California, facility, 285 00:15:30,125 --> 00:15:32,625 which was extraordinary. 286 00:15:32,709 --> 00:15:35,834 ♪ ♪ 287 00:15:37,041 --> 00:15:39,166 (machines whirring) 288 00:15:43,166 --> 00:15:45,291 ♪ ♪ 289 00:15:47,917 --> 00:15:50,834 Well, you know, her story's so compelling. 290 00:15:50,917 --> 00:15:54,542 I mean, if you think about it, you go in and you see 291 00:15:54,625 --> 00:15:56,417 this woman lives in an apartment... 292 00:15:56,500 --> 00:15:59,291 basically, she called her apartment a mattress. 293 00:15:59,375 --> 00:16:01,750 The only thing in the refrigerator was bottled water. 294 00:16:01,834 --> 00:16:03,625 She ate all the meals at the office. 295 00:16:03,709 --> 00:16:05,083 She slept four hours a day. 296 00:16:05,166 --> 00:16:08,250 She worked in the office till midnight or thereabouts. 297 00:16:08,333 --> 00:16:11,125 You ask, do you date? "No, I don't have ti... 298 00:16:11,208 --> 00:16:13,041 I'm married to Theranos." 299 00:16:13,125 --> 00:16:15,125 That was her... that's literally her words, 300 00:16:15,208 --> 00:16:16,959 what she said to me, and I believed it. 301 00:16:17,041 --> 00:16:18,458 (indistinct chatter) 302 00:16:18,542 --> 00:16:22,250 Auletta: You wear black outfits a lot. Why? 303 00:16:22,333 --> 00:16:25,291 Holmes: Because in line with the... 304 00:16:25,375 --> 00:16:27,458 designing my life to be able to give 305 00:16:27,542 --> 00:16:30,000 every bit of energy I have to this, 306 00:16:30,083 --> 00:16:33,125 I have a closet that has a very large number 307 00:16:33,208 --> 00:16:35,417 of the exact same set of clothes, 308 00:16:35,500 --> 00:16:37,000 and every single day, 309 00:16:37,083 --> 00:16:39,750 I put the same thing on, and I don't have to think about it. 310 00:16:39,834 --> 00:16:42,208 Auletta: Steve Jobs used to say that, too. 311 00:16:43,375 --> 00:16:45,208 Holmes: He wore jeans. (laughs) 312 00:16:46,959 --> 00:16:48,417 Parloff: She was obviously, you know, 313 00:16:48,500 --> 00:16:50,291 Steve Jobs was her hero. 314 00:16:50,375 --> 00:16:52,458 And I just felt, oh, well, she's a young person. 315 00:16:52,542 --> 00:16:57,750 You know, I'll give them their little hero worship thing. (laughs) 316 00:16:58,959 --> 00:17:02,959 Holmes: I'm a tremendous admirer of what Jobs did. 317 00:17:03,041 --> 00:17:05,000 I think he was a genius. 318 00:17:05,083 --> 00:17:06,667 I do have to disclose that 319 00:17:06,750 --> 00:17:09,291 I've been in black turtlenecks since I was seven. (laughs) 320 00:17:12,542 --> 00:17:14,417 ♪ ♪ 321 00:17:18,083 --> 00:17:20,208 ♪ ♪ 322 00:17:24,041 --> 00:17:26,417 Holmes: I want to talk for just a minute about 323 00:17:26,500 --> 00:17:28,875 what it means to be in this company right now. 324 00:17:28,959 --> 00:17:35,542 I was sitting yesterday with the president of Brazil for lunch, 325 00:17:35,625 --> 00:17:39,166 and this woman had invited me, 326 00:17:39,250 --> 00:17:42,667 and Eric Schmidt from Google, and Mark Zuckerberg, 327 00:17:42,750 --> 00:17:46,458 and the Airbnb guys, and the Uber guys, and a bunch of other people, 328 00:17:46,542 --> 00:17:50,041 and she sits down at the table with all these people, 329 00:17:50,125 --> 00:17:53,083 and we all have the headphones on, translators, 330 00:17:53,166 --> 00:17:57,542 and she says, "The strategic priority of Brazil 331 00:17:57,625 --> 00:18:00,500 "is to get access to low cost diagnostics 332 00:18:00,583 --> 00:18:02,792 "that can facilitate early detection 333 00:18:02,875 --> 00:18:05,583 - and prevention and..." - (cheering) 334 00:18:05,667 --> 00:18:07,709 (applause) 335 00:18:09,709 --> 00:18:12,125 We're all kind of sitting there, and you can see, like, 336 00:18:12,208 --> 00:18:15,250 all the other CEOs' faces being like... 337 00:18:15,333 --> 00:18:18,166 not wanting to be the ones in the spotlight, 338 00:18:18,250 --> 00:18:20,309 and she kept on doing this for like an hour and a half. 339 00:18:20,333 --> 00:18:23,750 And so, of course, I'm trying to, you know, be humble, 340 00:18:23,834 --> 00:18:25,792 but I'm... 341 00:18:25,875 --> 00:18:27,417 Erika Cheung: When I first met her, 342 00:18:27,500 --> 00:18:29,083 I thought she was really interesting. 343 00:18:29,166 --> 00:18:32,750 It was... It was hard to really get a sense of who she was, 344 00:18:32,834 --> 00:18:36,750 but in a way, I felt I idolized her in so many ways, 345 00:18:36,834 --> 00:18:39,166 based on, like, the little that I had read. 346 00:18:39,250 --> 00:18:41,417 Nice to meet you. I'm Elizabeth. 347 00:18:41,500 --> 00:18:43,792 Cheung: For being a woman in the sciences, 348 00:18:43,875 --> 00:18:45,417 being a woman in tech, 349 00:18:45,500 --> 00:18:48,000 the fact that she started her own company, 350 00:18:48,083 --> 00:18:50,375 that really got me excited. 351 00:18:50,458 --> 00:18:53,291 You know, she was a really good idol to have. 352 00:18:53,375 --> 00:18:54,625 Thank you so much. 353 00:18:54,709 --> 00:18:56,875 In a sense, I was super naive and like, 354 00:18:56,959 --> 00:18:59,959 almost drank the Kool-Aid, like, a little too quickly, 355 00:19:00,041 --> 00:19:03,834 and was just more enthusiastic to be a part of the team. 356 00:19:03,917 --> 00:19:05,834 Holmes: You all are part of something 357 00:19:05,917 --> 00:19:08,583 that is a revolution, and you're part of something 358 00:19:08,667 --> 00:19:11,166 that is going to change our world. 359 00:19:12,041 --> 00:19:14,417 What higher purpose is there in life 360 00:19:14,500 --> 00:19:16,375 than to be able to be doing that? 361 00:19:19,083 --> 00:19:22,458 ♪ ♪ 362 00:19:22,542 --> 00:19:24,500 Cheryl Gafner: When I went on an interview, 363 00:19:24,583 --> 00:19:26,125 Elizabeth was there. 364 00:19:26,208 --> 00:19:27,834 And I was a little surprised, 365 00:19:27,917 --> 00:19:31,041 considering I would be the low man on the totem pole. 366 00:19:31,750 --> 00:19:33,875 I found out later there was no one 367 00:19:33,959 --> 00:19:36,333 that got past her in order to get hired. 368 00:19:36,417 --> 00:19:38,959 Um... (laughs) 369 00:19:39,041 --> 00:19:42,834 I know this sounds odd, but my first impression was 370 00:19:42,917 --> 00:19:44,917 that she didn't blink. 371 00:19:47,417 --> 00:19:50,083 And so, I always wanted to make sure that I kept 372 00:19:50,166 --> 00:19:52,875 great eye contact 'cause I didn't want to be the one 373 00:19:52,959 --> 00:19:55,542 to look over, right? 374 00:19:55,625 --> 00:19:58,458 Uh, so, she was very intense. 375 00:19:58,542 --> 00:20:00,583 ♪ ♪ 376 00:20:04,959 --> 00:20:07,059 David Philippides: Comparing it to the other interviews that I had 377 00:20:07,083 --> 00:20:10,375 with other tech companies in the Bay Area, it was different. 378 00:20:10,458 --> 00:20:15,125 You know, they didn't tell me nearly as much about what they were doing. 379 00:20:15,208 --> 00:20:17,458 She never blinked during the interview. 380 00:20:18,792 --> 00:20:21,709 She did tell me about 381 00:20:21,792 --> 00:20:23,375 just the one drop of blood 382 00:20:23,458 --> 00:20:26,166 and it's a medical testing company. 383 00:20:26,250 --> 00:20:29,041 Um, they didn't say anything about how it worked, 384 00:20:29,125 --> 00:20:31,125 or what the technology was. 385 00:20:31,208 --> 00:20:35,125 They just said, "You'll be working with consumables," 386 00:20:35,208 --> 00:20:36,834 which was kind of vague. 387 00:20:36,917 --> 00:20:38,917 Alex Gibney: How did they describe the project? 388 00:20:39,000 --> 00:20:41,709 - They didn't. - (Gibney laughs) 389 00:20:41,792 --> 00:20:43,712 So, how did you know what you were signing on for? 390 00:20:43,792 --> 00:20:47,083 You know, I had a very vague idea, but I didn't. 391 00:20:47,166 --> 00:20:50,166 That's actually not that untypical in startup environments. 392 00:20:50,250 --> 00:20:52,000 They want to keep what they're doing secret. 393 00:20:52,083 --> 00:20:55,166 The response of the major lab companies 394 00:20:55,250 --> 00:20:57,166 was to say, "Well, we don't know 395 00:20:57,250 --> 00:20:59,267 - how they're doing what they're doing." And... - Exactly. 396 00:20:59,291 --> 00:21:00,851 And if it's so great, why don't they show it? 397 00:21:00,875 --> 00:21:02,309 There's too much secrecy is what they said. 398 00:21:02,333 --> 00:21:04,000 Right, that's exactly what they said. 399 00:21:04,083 --> 00:21:06,291 And, you know, our position on that is, first of all, 400 00:21:06,375 --> 00:21:08,417 we don't think that we need 401 00:21:08,500 --> 00:21:12,083 to explain ourselves to competitive companies. 402 00:21:12,166 --> 00:21:16,333 What we're working to do is to invent an integrated solution 403 00:21:16,417 --> 00:21:18,750 where every person gets access 404 00:21:18,834 --> 00:21:23,750 to this wealth of information from tiny droplets of blood, 405 00:21:23,834 --> 00:21:26,834 and then see how they change over time. 406 00:21:28,291 --> 00:21:31,333 ♪ ♪ 407 00:21:33,166 --> 00:21:35,625 Parloff: She talked some about currently, 408 00:21:35,709 --> 00:21:38,291 you get a blood test maybe once a year, 409 00:21:38,375 --> 00:21:40,959 and so you get a snapshot of what's going on. 410 00:21:41,041 --> 00:21:44,834 If you were to start doing it every month, say, 411 00:21:44,917 --> 00:21:46,625 you would get a movie. 412 00:21:46,709 --> 00:21:48,625 (projector whirring) 413 00:21:48,709 --> 00:21:50,709 Holmes: You have multiple frames from that movie, 414 00:21:50,792 --> 00:21:52,792 and you can begin to see the context 415 00:21:52,875 --> 00:21:55,417 of projecting where someone is heading. 416 00:21:55,500 --> 00:21:59,875 You're seeing changes in laboratory data over time, 417 00:21:59,959 --> 00:22:03,792 and understanding the clinical significance of that. 418 00:22:03,875 --> 00:22:07,917 The data can be used in a more meaningful way. 419 00:22:08,000 --> 00:22:09,500 Parloff: It was personalized medicine. 420 00:22:09,583 --> 00:22:12,125 Maybe you could catch something very early. 421 00:22:12,208 --> 00:22:13,875 You know, you could catch an early cancer, 422 00:22:13,959 --> 00:22:17,166 or you could get... you know, when there was still time. 423 00:22:17,250 --> 00:22:20,208 This was sort of the vast vision. 424 00:22:20,291 --> 00:22:23,458 Ryan Wistort: So, the idea with the Edison was to stick 425 00:22:23,542 --> 00:22:26,208 the lab inside the box. 426 00:22:26,291 --> 00:22:29,000 Because it incorporates so many different disciplines, 427 00:22:29,083 --> 00:22:30,959 it's hard to pull this off. 428 00:22:31,041 --> 00:22:32,291 (beeps) 429 00:22:32,375 --> 00:22:34,000 There's all these different components 430 00:22:34,083 --> 00:22:35,125 that go into the machine. 431 00:22:35,208 --> 00:22:37,542 There's a centrifuge, there's a... 432 00:22:38,333 --> 00:22:39,917 a little thing the samples go into. 433 00:22:40,000 --> 00:22:42,041 There's a way to prick the blood. 434 00:22:42,125 --> 00:22:43,685 All these things were prototypes, right? 435 00:22:43,750 --> 00:22:46,792 The first thing is, you look at what the chemists are doing. 436 00:22:46,834 --> 00:22:48,333 - Gibney: Right. - Right? 437 00:22:48,375 --> 00:22:50,351 Because you're automating what somebody is already doing. 438 00:22:50,375 --> 00:22:53,125 You're not inventing something totally new. 439 00:22:53,166 --> 00:22:55,917 ♪ ♪ 440 00:22:56,000 --> 00:22:59,792 I'm going to have to have a kind of dance, let's say, right? 441 00:22:59,834 --> 00:23:02,542 I'm going to have to have this thing go to the place, 442 00:23:02,667 --> 00:23:04,750 pick up something, drop off something, 443 00:23:04,834 --> 00:23:06,500 mix something, etcetera. 444 00:23:06,625 --> 00:23:08,333 (whirring) 445 00:23:08,375 --> 00:23:09,834 Philippides: The idea was the pipette 446 00:23:09,959 --> 00:23:12,834 poked holes into these little plastic containers 447 00:23:12,959 --> 00:23:14,041 with reagents in them. 448 00:23:14,125 --> 00:23:16,917 It mixes some of the reagents with blood. 449 00:23:21,458 --> 00:23:23,101 Matje: My group was responsible for developing 450 00:23:23,125 --> 00:23:24,500 about 60 different tests, 451 00:23:24,542 --> 00:23:27,166 and trying to get those to work on the Edisons. 452 00:23:27,250 --> 00:23:29,750 Wistort: The trick was how do you make it dependable, 453 00:23:29,834 --> 00:23:32,333 then how do you incorporate it into a bigger process 454 00:23:32,375 --> 00:23:34,917 that involves these 50 milliliter samples? 455 00:23:35,000 --> 00:23:36,333 Matje: It was a complex device. 456 00:23:36,458 --> 00:23:38,792 You know, a lot of moving parts, and a complicated system. 457 00:23:38,834 --> 00:23:41,000 It's not easy to do all this stuff, so it was... 458 00:23:41,083 --> 00:23:42,434 You know, I figured we'd get there. 459 00:23:42,458 --> 00:23:45,250 We felt we were on the path 460 00:23:45,333 --> 00:23:47,667 to be able to make machines that could do this. 461 00:23:47,750 --> 00:23:50,667 ♪ ♪ 462 00:23:58,125 --> 00:24:01,405 Auletta (on recording): Elizabeth Holmes, we're on the record unless you tell me not. 463 00:24:01,458 --> 00:24:04,458 Let me begin. When you think about yourself as a child... 464 00:24:04,542 --> 00:24:06,250 Auletta: I had multiple interviews with her, 465 00:24:06,333 --> 00:24:10,000 but one of them was to go to a Chinese restaurant in Palo Alto. 466 00:24:10,083 --> 00:24:11,792 And it was really good food. 467 00:24:11,875 --> 00:24:15,542 Holmes (on recording): I had the blessing of being able to figure out 468 00:24:15,625 --> 00:24:17,792 - what I... - (waitress speaking indistinctly) 469 00:24:17,875 --> 00:24:21,750 Holmes: Thank you...wanted to do very early. 470 00:24:21,834 --> 00:24:25,917 And I was very interested in the concept of creating things. 471 00:24:26,000 --> 00:24:29,750 I must've been, like, seven, and I had a notebook 472 00:24:29,834 --> 00:24:33,166 of a complete design for a time machine. 473 00:24:33,250 --> 00:24:35,792 It was a very detailed drawing 474 00:24:35,875 --> 00:24:38,959 of all the functionality, in terms of the interface. 475 00:24:39,041 --> 00:24:41,333 I got really interested in the idea 476 00:24:41,417 --> 00:24:43,583 of creating and building something. 477 00:24:43,667 --> 00:24:46,583 But ultimately, it became clear to me 478 00:24:46,667 --> 00:24:49,417 that the vehicle of a business provides 479 00:24:49,500 --> 00:24:53,083 the greatest tool for being able to affect change. 480 00:24:53,166 --> 00:24:56,208 ♪ ♪ 481 00:25:04,959 --> 00:25:07,291 Holmes: I was very studious. 482 00:25:07,375 --> 00:25:09,542 I never really watched TV. 483 00:25:11,458 --> 00:25:14,875 As I went through school and went through high school, 484 00:25:14,959 --> 00:25:19,083 my best friends were... were books. 485 00:25:19,166 --> 00:25:22,125 I got into Moby Dick and The Iliad and The Odyssey 486 00:25:22,208 --> 00:25:24,208 at a pretty young age. 487 00:25:26,041 --> 00:25:29,625 Understanding how great people and great leaders 488 00:25:29,709 --> 00:25:31,917 led groups of people. 489 00:25:33,834 --> 00:25:35,709 ♪ ♪ 490 00:25:35,792 --> 00:25:39,166 So much changes in our society technologically, 491 00:25:39,250 --> 00:25:44,208 but as humans, we don't change a lot, you know? 492 00:25:53,291 --> 00:25:56,417 ♪ ♪ 493 00:25:59,000 --> 00:26:02,667 Phyllis Gardner: This is a high tech atmosphere around Stanford. 494 00:26:02,750 --> 00:26:07,250 Internet, the startups, the biotech, and medicine. 495 00:26:09,041 --> 00:26:12,000 I started on the faculty here in 1984. 496 00:26:12,083 --> 00:26:14,000 I'm currently a tenured professor. 497 00:26:14,083 --> 00:26:15,750 And I was on boards of companies, 498 00:26:15,834 --> 00:26:17,500 many private and public companies, 499 00:26:17,583 --> 00:26:19,417 and I started a couple of companies. 500 00:26:19,500 --> 00:26:21,834 So, I tend to be sought out 501 00:26:21,917 --> 00:26:23,667 by kids who have an interest in business. 502 00:26:23,750 --> 00:26:26,166 And people have made fortunes. 503 00:26:26,250 --> 00:26:28,417 Students, young people, 504 00:26:28,500 --> 00:26:30,542 turn into multimillionaires. 505 00:26:30,625 --> 00:26:34,166 It makes for an odd morality. 506 00:26:34,250 --> 00:26:36,000 ♪ ♪ 507 00:26:36,083 --> 00:26:39,166 When I was at Stanford, I started to spend all my time 508 00:26:39,250 --> 00:26:41,750 thinking about how you could build something 509 00:26:41,834 --> 00:26:44,792 that would change what we know 510 00:26:44,875 --> 00:26:47,625 in terms of early detection and prevention. 511 00:26:48,417 --> 00:26:50,792 I filed my first patent. 512 00:26:55,000 --> 00:26:57,375 Gardner: One day, Elizabeth came to me 513 00:26:57,458 --> 00:26:59,291 and she described her idea. 514 00:27:01,000 --> 00:27:03,625 She wanted to incorporate microfluidics 515 00:27:03,709 --> 00:27:07,291 and nanotechnology into a patch, 516 00:27:07,375 --> 00:27:09,083 where you could sample the blood, 517 00:27:09,166 --> 00:27:11,917 and detect an infection, 518 00:27:12,000 --> 00:27:15,333 and then at that point, deliver antibiotics through it. 519 00:27:17,375 --> 00:27:20,750 Well, you can't do that. It's impossible, physically. 520 00:27:20,834 --> 00:27:23,041 Antibiotics are not potent. You cannot do that. 521 00:27:23,125 --> 00:27:25,667 There's a reason you have a big IV bag when... Okay. 522 00:27:25,750 --> 00:27:28,041 So I said, "Elizabeth, that's fun, 523 00:27:28,125 --> 00:27:29,959 but I don't think that's going to work." 524 00:27:32,166 --> 00:27:34,625 She was a 19-year-old. 525 00:27:34,709 --> 00:27:37,166 She never thought she had any limits. 526 00:27:37,250 --> 00:27:39,291 She was going to conquer the world. 527 00:27:40,125 --> 00:27:43,417 She came back twice, I think. 528 00:27:43,500 --> 00:27:45,041 And I just really... 529 00:27:45,125 --> 00:27:47,458 "I try to help students, but I just feel I can't help you. 530 00:27:47,542 --> 00:27:49,458 "You're not listening, 531 00:27:49,542 --> 00:27:51,959 but I'll help you find someone else to talk to." 532 00:27:52,041 --> 00:27:54,166 ♪ ♪ 533 00:27:55,458 --> 00:27:58,792 Holmes: This used to be my advisor's office. 534 00:27:58,875 --> 00:28:00,875 We got in. (laughs) 535 00:28:00,959 --> 00:28:02,643 Channing Robertson: From the very first time I met her, 536 00:28:02,667 --> 00:28:04,792 it was very clear she was unusual. 537 00:28:04,875 --> 00:28:07,250 I've taught thousands of students, 538 00:28:07,333 --> 00:28:09,583 probably tens of thousands of students, 539 00:28:09,667 --> 00:28:12,125 at Stanford, and... 540 00:28:12,208 --> 00:28:13,667 I knew right away 541 00:28:13,750 --> 00:28:18,792 that I was dealing with something very, very different. 542 00:28:18,875 --> 00:28:21,625 Auletta: Channing Robinson, the head of the science department 543 00:28:21,709 --> 00:28:24,959 at Stanford, leaves his tenured position to work for her? 544 00:28:25,041 --> 00:28:28,500 Parloff: He just thought this woman was something special. 545 00:28:28,583 --> 00:28:30,375 You know, gazing into her eyes, 546 00:28:30,458 --> 00:28:34,834 and realizing that he was talking to the next... 547 00:28:34,917 --> 00:28:37,083 Steve Jobs or Bill Gates. 548 00:28:37,166 --> 00:28:39,500 There were some other names mentioned 549 00:28:39,583 --> 00:28:42,166 during the course of our conversation, like Archimedes. 550 00:28:42,250 --> 00:28:44,291 ♪ ♪ 551 00:28:44,375 --> 00:28:47,417 Holmes: I actually, originally, did not intend to drop out of Stanford, 552 00:28:47,500 --> 00:28:50,667 - but I wasn't going to any classes, and so then... - (audience laughs) 553 00:28:50,750 --> 00:28:53,750 ...logistically, it just seemed like a waste of money. 554 00:28:54,917 --> 00:28:58,667 The question was, as a 19-year-old, how do you go about the process 555 00:28:58,750 --> 00:29:01,333 of convincing people that you know what you're doing, 556 00:29:01,417 --> 00:29:04,667 and that you can pull it off. Um... 557 00:29:04,750 --> 00:29:06,667 I think the first piece is realizing 558 00:29:06,750 --> 00:29:09,667 that it's not necessarily about age, and... 559 00:29:09,750 --> 00:29:14,542 um, people, like Steve Jobs, and Bill Gates, 560 00:29:14,625 --> 00:29:15,709 and the Google guys, 561 00:29:15,792 --> 00:29:17,917 and Michael Dell, and Larry Ellison, 562 00:29:18,000 --> 00:29:19,750 and others, have demonstrated that. 563 00:29:19,834 --> 00:29:22,166 You have to have the conviction 564 00:29:22,250 --> 00:29:24,709 in yourself to be able to make something happen 565 00:29:24,792 --> 00:29:27,083 because, ultimately, it's up to you. 566 00:29:33,792 --> 00:29:36,458 You know, I don't think I would want to create 567 00:29:36,542 --> 00:29:41,166 a society where people were not overconfident 568 00:29:41,250 --> 00:29:43,208 in what they could achieve. 569 00:29:43,291 --> 00:29:45,166 Like who would open a restaurant 570 00:29:45,250 --> 00:29:48,417 if that was the case, or who would... 571 00:29:48,500 --> 00:29:49,834 who would do a startup? 572 00:29:50,500 --> 00:29:52,417 But I think this is really the issue, 573 00:29:52,500 --> 00:29:56,166 is to say how do you become a person of vision 574 00:29:56,250 --> 00:29:57,625 on one hand, 575 00:29:57,709 --> 00:30:00,041 and how do you sell that vision 576 00:30:00,125 --> 00:30:01,583 on the other hand, 577 00:30:01,667 --> 00:30:04,125 but you also want to stay... 578 00:30:04,208 --> 00:30:07,500 not realistic, but, you know, little closer to realistic 579 00:30:08,834 --> 00:30:10,291 when the task needs it. 580 00:30:10,375 --> 00:30:12,351 Gibney: You have to be able not to buy your own bullshit. 581 00:30:12,375 --> 00:30:14,333 Yes. (laughs) 582 00:30:15,125 --> 00:30:17,083 (engines rumbling) 583 00:30:17,166 --> 00:30:20,291 ♪ ♪ 584 00:30:23,000 --> 00:30:25,166 Auletta: You incorporate the company in '04. 585 00:30:25,250 --> 00:30:28,583 - Holmes: Yeah. - What happened in the intervening nine years? 586 00:30:28,667 --> 00:30:30,709 Holmes: Our work during that period of time 587 00:30:30,792 --> 00:30:33,083 was for pharmaceutical companies, 588 00:30:33,166 --> 00:30:37,250 and for developing applications for the military. 589 00:30:37,333 --> 00:30:39,750 But that model's going to evolve now 590 00:30:39,834 --> 00:30:42,333 'cause we're at another inflection point 591 00:30:42,417 --> 00:30:46,667 - in our life cycle... - But are you thinking about an IPO or... 592 00:30:46,750 --> 00:30:50,208 Holmes: Well, we really believe that there's value 593 00:30:50,291 --> 00:30:51,792 in being a private company. 594 00:30:51,875 --> 00:30:56,792 It's allowed us to not have to talk about, 595 00:30:56,875 --> 00:31:01,250 you know, what we're doing until it's done and introduce, 596 00:31:01,333 --> 00:31:04,333 you know, incredible innovation without... 597 00:31:04,417 --> 00:31:07,792 Narrator: Using just her story as the blueprint for success, 598 00:31:07,875 --> 00:31:09,959 Holmes would convince private investors 599 00:31:10,041 --> 00:31:12,500 to put up hundreds of millions of dollars 600 00:31:12,583 --> 00:31:16,458 without ever looking at audited financial statements. 601 00:31:16,542 --> 00:31:20,250 We like to think that investing is a rational equation, 602 00:31:20,333 --> 00:31:23,583 a careful balance sheet of risk and reward. 603 00:31:23,667 --> 00:31:25,333 But in fact, investors, 604 00:31:25,417 --> 00:31:27,041 particularly ones who come in early, 605 00:31:27,125 --> 00:31:29,041 are often guided by their gut. 606 00:31:29,125 --> 00:31:30,583 Instead of relying on facts, 607 00:31:30,667 --> 00:31:33,959 early investing can be more like a wing and a prayer. 608 00:31:34,041 --> 00:31:37,083 The word credit comes from the Latin word credo, 609 00:31:37,166 --> 00:31:39,959 which means "I believe." 610 00:31:40,041 --> 00:31:42,333 Some of the early believers included 611 00:31:42,417 --> 00:31:45,542 a former head of software at Apple, Avie Tevanian, 612 00:31:45,625 --> 00:31:48,250 Oracle's founder, Larry Ellison, 613 00:31:48,333 --> 00:31:51,917 and a founding investor of Oracle, Don Lucas. 614 00:31:52,000 --> 00:31:54,041 They conferred respectability on Elizabeth, 615 00:31:54,125 --> 00:31:56,500 even though they had no record to go on, 616 00:31:56,583 --> 00:31:59,375 just a vague belief that business and medicine 617 00:31:59,458 --> 00:32:01,542 were in her blood. 618 00:32:01,625 --> 00:32:04,375 Lucas: I think she probably was 21 years old, 619 00:32:04,458 --> 00:32:06,166 had no background in business, 620 00:32:06,250 --> 00:32:09,125 but her great-grandfather was an entrepreneur. 621 00:32:09,208 --> 00:32:10,434 So, that's on the entrepreneur's side, 622 00:32:10,458 --> 00:32:11,685 but she was on the medical side. 623 00:32:11,709 --> 00:32:12,917 Ah, turns out later 624 00:32:13,000 --> 00:32:15,500 the hospital in there, where they live 625 00:32:15,583 --> 00:32:17,750 is named after her great-uncle, 626 00:32:17,834 --> 00:32:21,959 who was involved with medicine, so she came by both of these... 627 00:32:22,458 --> 00:32:24,458 the two things that are necessary here, 628 00:32:24,542 --> 00:32:27,792 one medicine and the other entrepreneur... 629 00:32:29,083 --> 00:32:30,458 quite naturally. 630 00:32:32,500 --> 00:32:35,667 Tim Draper: I remember the day Elizabeth came in, 631 00:32:35,750 --> 00:32:37,208 full of vim and vigor, 632 00:32:37,291 --> 00:32:40,125 and said, "I'm dropping out of Stanford." 633 00:32:40,208 --> 00:32:41,583 And I knew her parents, 634 00:32:41,667 --> 00:32:44,625 and I knew her and her brother as they were growing up. 635 00:32:44,709 --> 00:32:47,250 She was a good friend of my daughter's. 636 00:32:47,333 --> 00:32:48,750 I said, "Do your parents know 637 00:32:48,834 --> 00:32:50,393 you're dropping out of Stanford?" She said, 638 00:32:50,417 --> 00:32:53,250 "Yes, yes! And they agree, and it's a great thing. 639 00:32:53,333 --> 00:32:55,291 "And I learned at Stanford 640 00:32:55,375 --> 00:32:57,917 "how this whole health care thing is working, 641 00:32:58,000 --> 00:32:59,750 and it's just not." 642 00:32:59,834 --> 00:33:02,000 And then she said, "I'm going to change health care 643 00:33:02,083 --> 00:33:04,792 as we know it." I was all over it. 644 00:33:04,875 --> 00:33:07,750 I thought that was a great opportunity. 645 00:33:08,333 --> 00:33:10,709 Gibney: I mean, Elizabeth was a family friend. 646 00:33:10,792 --> 00:33:13,083 You'd known her since she was a little girl. 647 00:33:13,166 --> 00:33:14,625 Did that go into your thinking, 648 00:33:14,709 --> 00:33:16,291 in terms of your initial investment? 649 00:33:16,375 --> 00:33:20,417 No. We've been... I've been in the venture business a long time. 650 00:33:20,500 --> 00:33:23,667 I was the first investor in Tesla, first investor in Skype, 651 00:33:23,750 --> 00:33:26,959 first investor in Baidu, first investor in Hotmail. 652 00:33:27,041 --> 00:33:28,583 I always invest early. 653 00:33:28,667 --> 00:33:30,875 I invest when I see a vision, 654 00:33:30,959 --> 00:33:32,333 I see the opportunity, 655 00:33:32,417 --> 00:33:36,417 and I see the person who I think can make it there. 656 00:33:36,500 --> 00:33:38,959 I mean, we invest in, you know, 657 00:33:39,041 --> 00:33:42,792 a girl and a dog, or two guys and a cat. 658 00:33:42,875 --> 00:33:46,083 We just say, "Is this person going to dedicate their life, 659 00:33:46,166 --> 00:33:49,333 and make something extraordinary happen?" 660 00:33:49,417 --> 00:33:52,709 And yes, in that case, she was that person. 661 00:33:55,542 --> 00:33:58,125 So, the reality is that data 662 00:33:58,208 --> 00:34:01,041 just doesn't sit in our mind 663 00:34:01,125 --> 00:34:03,625 as much as stories do. 664 00:34:03,709 --> 00:34:07,417 It's almost like the glue that takes all of the data, 665 00:34:07,917 --> 00:34:09,500 and even more important, 666 00:34:09,583 --> 00:34:13,125 stories have emotions that data doesn't. 667 00:34:13,208 --> 00:34:15,041 And emotions get people to... 668 00:34:15,125 --> 00:34:18,166 to do all kinds of things, good and bad. 669 00:34:18,250 --> 00:34:23,208 And if you think about the people who invested in her 670 00:34:23,291 --> 00:34:25,208 with very little amount of data, 671 00:34:25,291 --> 00:34:28,000 it's about having an emotional appeal and about having trust, 672 00:34:28,083 --> 00:34:31,291 and believing the story, and being moved by this, 673 00:34:31,375 --> 00:34:33,500 and being able to tell themselves a story. 674 00:34:33,583 --> 00:34:36,667 ♪ ♪ 675 00:34:36,750 --> 00:34:39,267 Holmes: For 10 years, we did this work. We didn't have a website. 676 00:34:39,291 --> 00:34:41,625 We never put out a press release. 677 00:34:41,709 --> 00:34:43,625 It was completely heads down. 678 00:34:43,709 --> 00:34:46,125 When we got to a point in which we realized 679 00:34:46,208 --> 00:34:50,041 that what we were doing could serve individuals, 680 00:34:50,125 --> 00:34:52,166 I wanted to find the people 681 00:34:52,250 --> 00:34:55,458 who were just strategically brilliant. 682 00:34:57,208 --> 00:34:59,625 General Mattis, who was former 683 00:34:59,709 --> 00:35:02,834 CENTCON Commander, is one of our board members. 684 00:35:02,917 --> 00:35:04,709 Dick Kovacevich, who is 685 00:35:04,792 --> 00:35:07,750 the former CEO of Wells Fargo is another. 686 00:35:07,834 --> 00:35:10,041 Sam Nunn has done some incredible work 687 00:35:10,125 --> 00:35:13,458 on nuclear threats as well as biothreats. 688 00:35:13,542 --> 00:35:15,875 Bill Perry, former secretary of defense. 689 00:35:15,959 --> 00:35:18,792 Henry Kissinger, former secretary of state. 690 00:35:18,875 --> 00:35:20,542 And George Shultz, 691 00:35:20,625 --> 00:35:23,208 who was secretary of state 692 00:35:23,291 --> 00:35:28,000 and labor and secretary of treasury. 693 00:35:28,083 --> 00:35:30,959 George: About three years ago, I looked at her and I said, "Well, 694 00:35:31,041 --> 00:35:33,959 I'm about to have a meeting with a friend of my granddaughter." 695 00:35:34,041 --> 00:35:35,500 (audience laughing) 696 00:35:35,583 --> 00:35:37,250 - Yes. - As soon as she started talking, 697 00:35:37,333 --> 00:35:38,917 I did a double take... 698 00:35:39,000 --> 00:35:41,917 Tyler Shultz: I first met Elizabeth in my grandfather's living room. 699 00:35:42,000 --> 00:35:44,184 So, he had called me up and said that he was going to have 700 00:35:44,208 --> 00:35:47,417 some brilliant woman over to have a discussion. 701 00:35:47,500 --> 00:35:50,083 He thought that I would be interested 702 00:35:50,166 --> 00:35:52,250 in coming, so I went to his house. 703 00:35:52,333 --> 00:35:54,250 It was me, my grandfather, Elizabeth, 704 00:35:54,333 --> 00:35:56,917 and Dianne Feinstein was there as well. 705 00:35:57,500 --> 00:36:01,375 Elizabeth kind of pitched her dream of changing the way 706 00:36:01,458 --> 00:36:04,166 diagnostics is done, really revolutionizing the field. 707 00:36:04,250 --> 00:36:06,750 Yeah, I was totally gung-ho about Theranos. 708 00:36:06,834 --> 00:36:09,625 I was really excited about what she was talking about. 709 00:36:09,709 --> 00:36:12,208 I really wanted to know what the technology was. 710 00:36:12,834 --> 00:36:14,667 And I actually asked her, in that meeting, 711 00:36:14,750 --> 00:36:16,458 if I could intern there over the summer. 712 00:36:16,542 --> 00:36:18,583 I said, do you guys take interns? 713 00:36:18,667 --> 00:36:21,208 Like, I want to work on this. This sounds amazing. 714 00:36:21,291 --> 00:36:23,333 We think that... 715 00:36:24,041 --> 00:36:25,792 there's going to be a revolution 716 00:36:25,875 --> 00:36:27,583 in preventive medicine. 717 00:36:27,667 --> 00:36:31,166 I mean, he had a really close relationship with Elizabeth. 718 00:36:31,250 --> 00:36:34,750 She was almost like... becoming part of the family. 719 00:36:34,834 --> 00:36:38,458 She was coming to our birthday parties and Christmases. 720 00:36:38,542 --> 00:36:41,125 George: We think this is one of the most optimistic things 721 00:36:41,208 --> 00:36:42,625 out there 722 00:36:42,709 --> 00:36:45,875 about the health care system and its costs and its problems. 723 00:36:45,959 --> 00:36:49,709 Auletta: You talk to George Shultz. He's a very impressive man. 724 00:36:49,792 --> 00:36:52,834 And I was impressed that he adopted her like a daughter. 725 00:36:52,917 --> 00:36:54,625 He really believed in her. 726 00:36:54,709 --> 00:36:57,166 Gibney: From the outside, all you're thinking is, 727 00:36:57,250 --> 00:36:59,000 wow, what a board! 728 00:36:59,083 --> 00:37:01,000 Right? I mean, it's just impressive. 729 00:37:01,083 --> 00:37:03,583 And they were really... And I talked to most of them. 730 00:37:03,667 --> 00:37:05,787 They were impressed with... really impressed with her. 731 00:37:05,834 --> 00:37:07,976 Auletta: This is General Mattis. I assume we're on the record, 732 00:37:08,000 --> 00:37:10,101 unless you tell me not, and I'll shut off this recorder. 733 00:37:10,125 --> 00:37:11,625 - But... - Mattis: Okay. 734 00:37:11,709 --> 00:37:13,750 Auletta: When you think of Elizabeth, 735 00:37:13,834 --> 00:37:15,834 what are the first words that come to your mind? 736 00:37:15,917 --> 00:37:18,500 Mattis: First is integrity, 737 00:37:18,583 --> 00:37:20,542 uh, competence, 738 00:37:20,625 --> 00:37:23,792 and competence is both technical, scientific, 739 00:37:23,875 --> 00:37:26,667 but also focused on human rights 740 00:37:26,750 --> 00:37:29,208 in the most classical sense of what 741 00:37:29,291 --> 00:37:30,834 human rights are about. 742 00:37:30,917 --> 00:37:33,917 And all of a sudden, you have the ability to know 743 00:37:34,000 --> 00:37:36,375 if someone is ill or not. I mean, 744 00:37:36,458 --> 00:37:39,583 literally, within minutes of taking... 745 00:37:39,667 --> 00:37:41,875 you know, a drop of blood. 746 00:37:41,959 --> 00:37:44,375 And I mean, she is really... 747 00:37:44,458 --> 00:37:47,959 a revolutionary in the truest sense. 748 00:37:49,291 --> 00:37:52,542 It was quite amazing to spend time with these people. 749 00:37:52,625 --> 00:37:54,875 They were talking about her as if she were Beethoven. 750 00:37:54,959 --> 00:37:58,125 ("Moonlight Sonata" playing) 751 00:38:00,959 --> 00:38:03,375 As if she was this rare creature 752 00:38:03,458 --> 00:38:07,041 that maybe one in a century or two in a century come along, 753 00:38:07,125 --> 00:38:09,834 who really can change the world. 754 00:38:12,750 --> 00:38:14,875 And I remember when I interviewed Henry Kissinger, 755 00:38:14,959 --> 00:38:17,083 I didn't trust him on medical stuff, 756 00:38:17,166 --> 00:38:20,458 not to mention on Cambodia, but... (laughs) 757 00:38:20,542 --> 00:38:21,917 But when I asked him about her, 758 00:38:22,000 --> 00:38:23,208 he described... 759 00:38:23,291 --> 00:38:25,208 Kissinger: Excellent businesswoman. 760 00:38:25,291 --> 00:38:28,709 Let me see that I can put this on speaker for a minute. 761 00:38:28,792 --> 00:38:31,000 - Be easier for me. - Auletta: Okay. 762 00:38:34,166 --> 00:38:36,542 Kissinger: Yeah, but I don't know how to do that. 763 00:38:36,625 --> 00:38:37,917 (Auletta laughs) 764 00:38:38,000 --> 00:38:39,875 - You put it on ho... - (receiver clatters) 765 00:38:39,959 --> 00:38:42,542 - Kissinger: How about it now? - I hear you loud and clear. 766 00:38:42,625 --> 00:38:44,166 - You okay? - Kissinger: Perfect. 767 00:38:44,250 --> 00:38:47,333 Auletta: What's your impression of how she runs the board? 768 00:38:47,834 --> 00:38:50,333 (Kissinger speaking) 769 00:38:56,792 --> 00:39:00,291 Auletta: I'm told you once said that these board meetings, 770 00:39:00,375 --> 00:39:02,333 which go on all day... 771 00:39:02,417 --> 00:39:04,542 (Kissinger speaking) 772 00:39:10,959 --> 00:39:13,159 Parloff: You know, whatever you think of Henry Kissinger, 773 00:39:13,208 --> 00:39:16,625 he's met a lot of leaders, he's met a lot of world leaders, 774 00:39:16,709 --> 00:39:18,291 he met a lot of corporate leaders. 775 00:39:18,375 --> 00:39:20,041 I thought he might be a judge, 776 00:39:20,125 --> 00:39:22,625 but the truth is that 777 00:39:22,709 --> 00:39:26,458 none of these people were really in a position to know what... 778 00:39:26,542 --> 00:39:29,792 - Gibney: To judge 'cause they didn't have the qualifications. - Yeah. No. No. 779 00:39:29,875 --> 00:39:32,041 She didn't really want scientific input 780 00:39:32,125 --> 00:39:34,333 from what I could determine. 781 00:39:34,417 --> 00:39:36,667 Engineering a bit more 782 00:39:36,750 --> 00:39:38,792 'cause she was inventing an engineering device, 783 00:39:38,875 --> 00:39:40,250 but not medicine. 784 00:39:40,333 --> 00:39:43,333 She aligned herself with very powerful older men 785 00:39:43,417 --> 00:39:47,750 who seemed to succumb to a certain charm, and... 786 00:39:47,834 --> 00:39:51,375 those powerful men could influence people 787 00:39:51,458 --> 00:39:52,917 in the government, 788 00:39:53,000 --> 00:39:55,458 influence the Department of Defense. 789 00:39:55,542 --> 00:39:59,375 Auletta: When I asked her was this all about getting government contracts, 790 00:39:59,458 --> 00:40:01,667 she danced around my questions about that. 791 00:40:01,750 --> 00:40:04,000 Holmes (on recording): Everything that we're doing 792 00:40:04,083 --> 00:40:07,333 may go into certain work we do for the military, 793 00:40:07,417 --> 00:40:09,834 which we really couldn't put on the record. 794 00:40:09,917 --> 00:40:12,166 Well, off the record, we were doing some work 795 00:40:12,250 --> 00:40:14,834 for the military, which we can talk about off the record. 796 00:40:14,917 --> 00:40:16,667 Auletta: Why would that be off the record? 797 00:40:16,750 --> 00:40:19,000 You know, generally, our philosophy on these things is 798 00:40:19,083 --> 00:40:21,500 talk about it if there's a purpose to talking about it, 799 00:40:21,583 --> 00:40:22,750 and there just... 800 00:40:22,834 --> 00:40:25,000 Auletta: So, could you say anything about 801 00:40:25,083 --> 00:40:27,458 the military contracts you have? I mean... 802 00:40:28,750 --> 00:40:31,375 - Holmes: No. (laughs) - (Auletta laughs) 803 00:40:31,458 --> 00:40:34,083 When you... I'm going to make you feel guilty at some point. 804 00:40:34,166 --> 00:40:38,083 Holmes: You already have. You're good at it too. 805 00:40:38,166 --> 00:40:40,542 Narrator: In conversations, Elizabeth suggested 806 00:40:40,625 --> 00:40:43,041 that she had contracts with the military. 807 00:40:43,125 --> 00:40:44,834 In a mock-up of marketing materials, 808 00:40:44,917 --> 00:40:47,750 Theranos invented a quote from General Mattis 809 00:40:47,834 --> 00:40:49,709 about a battle plan to use Edisons 810 00:40:49,792 --> 00:40:52,583 on wounded soldiers in combat zones, 811 00:40:52,667 --> 00:40:54,417 but this never happened. 812 00:40:54,500 --> 00:40:57,875 Before permitting Theranos to use the machines on soldiers, 813 00:40:57,959 --> 00:41:01,000 Pentagon officials wanted to run their own tests, 814 00:41:01,083 --> 00:41:02,583 but Elizabeth declined. 815 00:41:02,667 --> 00:41:05,250 She had a policy of controlling demonstrations 816 00:41:05,333 --> 00:41:07,083 and tightly guarding access 817 00:41:07,166 --> 00:41:09,458 to the Edison prototypes. 818 00:41:09,542 --> 00:41:10,875 Auletta: I pressed them 819 00:41:10,959 --> 00:41:14,083 repeatedly, and I wasn't allowed, and finally, 820 00:41:14,166 --> 00:41:17,375 I persisted in asking. "I need to see the machine." 821 00:41:17,458 --> 00:41:19,542 And she said to me, 822 00:41:19,625 --> 00:41:21,583 "All right, we'll let you see the machine, 823 00:41:21,667 --> 00:41:25,625 but you have to agree not to describe the machine." 824 00:41:26,500 --> 00:41:29,542 ♪ ♪ 825 00:41:34,583 --> 00:41:36,792 It was downstairs, 826 00:41:36,875 --> 00:41:40,625 in an area you couldn't see from all the glassed offices. 827 00:41:46,166 --> 00:41:49,250 The lab is a large, labyrinthian place 828 00:41:49,333 --> 00:41:51,875 bustling with chemists and technicians, 829 00:41:51,959 --> 00:41:54,041 and housing rows of machines, 830 00:41:54,125 --> 00:41:56,458 each easy for a single person to lift, 831 00:41:56,542 --> 00:41:59,417 in which the container of blood is placed. 832 00:42:00,709 --> 00:42:03,125 What exactly happens in the machine 833 00:42:03,208 --> 00:42:05,291 is treated as a state secret, 834 00:42:05,375 --> 00:42:07,917 and Holmes's description of the process 835 00:42:08,000 --> 00:42:10,000 was comically vague. 836 00:42:10,917 --> 00:42:14,625 Holmes: A chemistry is performed, 837 00:42:14,709 --> 00:42:16,750 so a chemical reaction occurs 838 00:42:16,834 --> 00:42:18,750 and generates a signal 839 00:42:18,834 --> 00:42:22,083 from the chemical interaction with the sample, 840 00:42:22,166 --> 00:42:25,083 which is then translated into a result... 841 00:42:25,166 --> 00:42:27,333 "Which is then reviewed by certified 842 00:42:27,417 --> 00:42:29,291 laboratory personnel." 843 00:42:30,000 --> 00:42:33,625 End quote. She added that thanks to, quote... 844 00:42:33,709 --> 00:42:35,458 Holmes: Miniaturization 845 00:42:35,542 --> 00:42:39,667 "and associated automation that we're able to... 846 00:42:39,750 --> 00:42:41,834 handle these tiny samples. 847 00:42:41,917 --> 00:42:45,250 ♪ ♪ 848 00:42:52,667 --> 00:42:55,750 (applauding) 849 00:42:58,041 --> 00:43:00,667 All right, so... 850 00:43:00,750 --> 00:43:02,542 Comments? Sunny? 851 00:43:04,083 --> 00:43:06,417 So, I just want to expand a little bit 852 00:43:06,500 --> 00:43:08,667 on a comment that Elizabeth made. 853 00:43:08,750 --> 00:43:12,250 You know, we are a very conservative company 854 00:43:12,333 --> 00:43:13,917 because we think 855 00:43:14,000 --> 00:43:17,542 that you should get things done before you talk about them. 856 00:43:17,625 --> 00:43:20,208 Right? And that's the culture we have created. 857 00:43:20,291 --> 00:43:21,792 So, I just want all of you to remember 858 00:43:21,875 --> 00:43:23,795 that when we come to work every day that we carry 859 00:43:23,834 --> 00:43:27,500 that sense of mission in your hearts every single day... 860 00:43:27,583 --> 00:43:29,208 Matje: Sunny was very successful 861 00:43:29,291 --> 00:43:31,709 in the late '90s with a tech company 862 00:43:31,792 --> 00:43:33,375 that sold for a lot of money. 863 00:43:33,458 --> 00:43:35,643 He seemed kind of like a Mark Cuban character, potentially, to me, 864 00:43:35,667 --> 00:43:38,017 in some ways, where he was at the right place, the right time. 865 00:43:38,041 --> 00:43:40,917 Made a lot of money. 866 00:43:41,000 --> 00:43:43,709 His expertise was software and IT. 867 00:43:43,792 --> 00:43:45,552 What we are doing is really, really difficult 868 00:43:45,625 --> 00:43:48,750 because we're going against an entire system 869 00:43:48,834 --> 00:43:51,542 that doesn't believe that prevention is possible. 870 00:43:51,625 --> 00:43:54,917 I always felt like Sunny was making a deal, you know? 871 00:43:55,000 --> 00:43:58,417 Like, he knew the technology, but just enough to sell it. 872 00:43:58,500 --> 00:44:02,041 To him, this was another home run that he was going to hit. 873 00:44:02,125 --> 00:44:03,333 ♪ ♪ 874 00:44:03,417 --> 00:44:05,709 Auletta: He was 49 and she was 30, 875 00:44:05,792 --> 00:44:08,917 but she was the dominant figure in that relationship. 876 00:44:09,000 --> 00:44:10,875 And when he talked about her, 877 00:44:10,959 --> 00:44:12,959 he talked about her in a very deferential way, 878 00:44:13,041 --> 00:44:14,142 that she was kind of a genius. 879 00:44:14,166 --> 00:44:16,583 When he spoke about Elizabeth, 880 00:44:16,667 --> 00:44:20,583 he was really... reverential. 881 00:44:20,667 --> 00:44:25,208 "Elizabeth is the most important inventor of our times." 882 00:44:29,458 --> 00:44:33,375 Matje: You know, I think Sunny saw her as this iconic figure that he could never be, 883 00:44:33,458 --> 00:44:39,333 and so he, I think, found this vehicle for him to advance himself in her, 884 00:44:39,417 --> 00:44:41,542 and, you know, she was on board for it, too. 885 00:44:44,208 --> 00:44:47,917 She lived with him at some condo in Palo Alto. 886 00:44:48,000 --> 00:44:50,291 I thought that there was definitely 887 00:44:50,375 --> 00:44:52,542 something going on behind the scenes there. 888 00:44:52,625 --> 00:44:54,125 They certainly would leave together, 889 00:44:54,208 --> 00:44:56,166 they'd come in at similar times. 890 00:44:56,250 --> 00:44:58,083 They're always talking to each other, 891 00:44:58,166 --> 00:45:00,375 offline, online, in meetings, 892 00:45:00,458 --> 00:45:02,875 outside of meetings. They were very close. 893 00:45:04,208 --> 00:45:06,750 It wasn't uncommon for Elizabeth and Sunny 894 00:45:06,834 --> 00:45:09,125 to go to the Silicon Valley airport 895 00:45:09,208 --> 00:45:10,333 and go off to some meeting. 896 00:45:10,417 --> 00:45:12,542 They were going to go sell this thing, 897 00:45:12,625 --> 00:45:15,208 go make a deal. (laughs) 898 00:45:15,291 --> 00:45:17,959 (jet roaring) 899 00:45:21,417 --> 00:45:25,458 Narrator: Without disclosing their romantic relationship to investors, 900 00:45:25,542 --> 00:45:29,000 Elizabeth and Sunny flew off together to corporate presentations, 901 00:45:29,083 --> 00:45:33,458 touting the potential of the Edison prototypes. 902 00:45:33,542 --> 00:45:36,917 One company, Walgreens, loved the pitch. 903 00:45:38,041 --> 00:45:39,792 In this 2010 PowerPoint, 904 00:45:39,875 --> 00:45:43,041 Theranos showcased an early version of Edison, 905 00:45:43,125 --> 00:45:44,667 a portable blood testing machine 906 00:45:44,750 --> 00:45:48,917 that could be deployed in pharmacies all over the world. 907 00:45:49,000 --> 00:45:50,625 Theranos boasted the device could, 908 00:45:50,709 --> 00:45:52,792 "eliminate the need for a lab," 909 00:45:52,875 --> 00:45:55,291 by doing up to 200 tests in minutes 910 00:45:55,375 --> 00:45:58,333 from a finger-prick drop of capillary blood. 911 00:45:58,417 --> 00:46:02,000 It wasn't true then, but once Walgreens signed a contract, 912 00:46:02,083 --> 00:46:04,959 Theranos struggled to make it true, constantly changing 913 00:46:05,041 --> 00:46:08,291 the machine's color, shape, and mechanics. 914 00:46:08,375 --> 00:46:10,583 Strangely, Walgreens never looked 915 00:46:10,667 --> 00:46:13,083 inside any version of the magic box 916 00:46:13,166 --> 00:46:17,291 to see if it could deliver what Theranos promised. 917 00:46:17,375 --> 00:46:19,375 Holmes: There's a great Martin Luther King quote. 918 00:46:19,458 --> 00:46:21,792 "Take the first step in faith. 919 00:46:21,875 --> 00:46:23,583 "You don't have to see the whole staircase, 920 00:46:23,667 --> 00:46:25,208 just take the first step." Right? 921 00:46:25,291 --> 00:46:28,291 And this is... this is the first step. 922 00:46:29,291 --> 00:46:31,750 Gibney: So, talk to me a little bit about the Edison machine. 923 00:46:31,834 --> 00:46:34,000 How would you say it was working in terms of 924 00:46:34,083 --> 00:46:35,792 the vision versus the reality? 925 00:46:35,875 --> 00:46:37,834 (laughs) 926 00:46:39,000 --> 00:46:40,208 Uh, poorly. 927 00:46:40,291 --> 00:46:41,458 (machine whirring) 928 00:46:41,542 --> 00:46:43,222 We couldn't regulate temperature very well. 929 00:46:43,250 --> 00:46:46,083 We couldn't reproducibly transfer fluids. 930 00:46:46,166 --> 00:46:48,458 We had all sorts of design changes constantly 931 00:46:48,542 --> 00:46:49,935 that we were trying to fight against, 932 00:46:49,959 --> 00:46:52,709 so it was a comedy of errors in a lot of ways. 933 00:46:52,792 --> 00:46:54,875 Nugent: The original concept was to make a machine 934 00:46:54,959 --> 00:46:57,333 that, at least then, the chemists could work on 935 00:46:57,417 --> 00:46:59,166 to further develop chemistry. 936 00:46:59,250 --> 00:47:02,291 Over time, we were able to run a sequence 937 00:47:02,375 --> 00:47:04,125 and we were able to get results. 938 00:47:04,208 --> 00:47:07,000 Getting results means, you know, 939 00:47:07,083 --> 00:47:10,250 I get a signal proportional to what I'm putting in. 940 00:47:10,333 --> 00:47:12,750 It doesn't mean it's ready for prime time, right? 941 00:47:12,834 --> 00:47:14,750 ♪ ♪ 942 00:47:14,834 --> 00:47:16,542 (machine whirring) 943 00:47:16,625 --> 00:47:19,750 Philippides: You're handling a lot of fluid in the machine. 944 00:47:19,834 --> 00:47:24,458 Things got blood spilled all over them and got gunky. 945 00:47:24,542 --> 00:47:26,125 Some of the donors that we had were, 946 00:47:26,208 --> 00:47:27,917 you know, just people off the street 947 00:47:28,000 --> 00:47:30,709 who need money, and I imagine that, you know, 948 00:47:30,792 --> 00:47:32,417 there probably was a fair amount 949 00:47:32,500 --> 00:47:34,125 of hepatitis and things like that. 950 00:47:34,208 --> 00:47:37,458 And the device would freeze up in the middle of running a test, 951 00:47:37,542 --> 00:47:41,375 and then I would have to reach in there with my hands. 952 00:47:41,458 --> 00:47:43,458 There were needles within the device 953 00:47:43,542 --> 00:47:45,583 that could puncture skin, 954 00:47:45,667 --> 00:47:47,000 and there's reagents 955 00:47:47,083 --> 00:47:49,834 and blood and everything spilling all over the place. 956 00:47:49,917 --> 00:47:52,458 Blood that's just sitting there in the bottom of the vessel, 957 00:47:52,542 --> 00:47:55,542 evaporating into the air in the room. 958 00:47:55,625 --> 00:47:57,792 It was a mess inside. 959 00:47:57,875 --> 00:48:00,208 Tyler: Pieces of the device would literally fall off 960 00:48:00,291 --> 00:48:01,750 in the middle of testing. 961 00:48:01,834 --> 00:48:03,667 Centrifuges exploding inside of it 962 00:48:03,750 --> 00:48:06,083 and things like that. 963 00:48:06,166 --> 00:48:07,810 Philippides: Obviously, they didn't want anybody 964 00:48:07,834 --> 00:48:10,542 to actually see what was going on in there. 965 00:48:12,291 --> 00:48:14,834 Matje: So, when we had demos, they would bring investors 966 00:48:14,917 --> 00:48:18,625 or executives from some company to a room which would have 967 00:48:18,709 --> 00:48:21,000 different styles of Edison they were prototyping. 968 00:48:21,083 --> 00:48:23,542 (projector whirring) 969 00:48:23,625 --> 00:48:25,792 ♪ ♪ 970 00:48:25,875 --> 00:48:28,041 They would do a fingerstick on the executives, 971 00:48:28,125 --> 00:48:30,417 so they'd take a fingerstick of blood. 972 00:48:32,500 --> 00:48:35,125 They would put the blood into the cartridge, 973 00:48:35,208 --> 00:48:37,834 and then they would put the cartridge into this Edison. 974 00:48:37,917 --> 00:48:40,041 (clicking) 975 00:48:40,625 --> 00:48:42,417 (whirring) 976 00:48:42,500 --> 00:48:44,893 They'd walk the executives out of the room to go give them a tour, 977 00:48:44,917 --> 00:48:46,893 or to go have a meeting, or go have lunch or whatever, 978 00:48:46,917 --> 00:48:49,500 and immediately afterwards, an engineer would run in, 979 00:48:49,583 --> 00:48:51,423 grab the cartridge and bring it out to the lab, 980 00:48:51,458 --> 00:48:55,750 where my team would do the assays at the bench. 981 00:48:55,834 --> 00:48:59,291 We were on call, so this could be done in an hour. 982 00:48:59,375 --> 00:49:01,875 We got reasonable data every time, 983 00:49:01,959 --> 00:49:03,625 and then we would get those results, 984 00:49:03,709 --> 00:49:06,291 the engineer would run into the room with the results, 985 00:49:06,375 --> 00:49:08,184 and these guys would come back in and they'd say, 986 00:49:08,208 --> 00:49:10,583 "Well, here's your results from running our tests." 987 00:49:13,959 --> 00:49:16,875 We had listed on the webpage, like, 200 different assays, 988 00:49:16,959 --> 00:49:21,458 but we had no more than half of those actually validated to be working, 989 00:49:21,542 --> 00:49:25,250 even in the lab at that point, let alone on the Edisons. 990 00:49:25,333 --> 00:49:28,083 Nugent: Because it's trying to do multiple analyses, 991 00:49:28,166 --> 00:49:31,250 you need so much hardware inside the machine, 992 00:49:31,333 --> 00:49:33,750 it was totally impractical. 993 00:49:33,834 --> 00:49:35,792 Wistort: They were very adamant about 994 00:49:35,875 --> 00:49:39,250 the machine being this big. It's gotta be this big. 995 00:49:39,333 --> 00:49:41,125 And I said, 996 00:49:41,834 --> 00:49:43,291 "We can't do that. 997 00:49:43,375 --> 00:49:44,750 "The laws of physics just 998 00:49:44,834 --> 00:49:46,917 "are not going to permit us to cram all the stuff 999 00:49:47,000 --> 00:49:49,583 "that we've decided needs to go in there into this little box. 1000 00:49:49,667 --> 00:49:52,250 Can the box be bigger?" 1001 00:49:52,333 --> 00:49:55,333 And a common response at Theranos 1002 00:49:55,417 --> 00:49:56,750 was something along the lines 1003 00:49:56,834 --> 00:49:58,208 of, "Well, maybe you're not... 1004 00:49:58,291 --> 00:50:00,458 "maybe you're not a Silicon Valley person. 1005 00:50:00,542 --> 00:50:02,823 "You should go work for some other company if you don't... 1006 00:50:02,875 --> 00:50:04,142 "if you don't believe in the vision 1007 00:50:04,166 --> 00:50:05,834 of the product." 1008 00:50:05,917 --> 00:50:07,375 And what would start off 1009 00:50:07,458 --> 00:50:10,542 as a very serious brainstorming meeting would turn into 1010 00:50:10,625 --> 00:50:12,250 a two-hour conversation about 1011 00:50:12,333 --> 00:50:15,625 the name of the cloud that's going to process the information. 1012 00:50:15,709 --> 00:50:18,959 It's like, time out. How big does this box need to be 1013 00:50:19,041 --> 00:50:20,792 to abide by the laws of thermodynamics, 1014 00:50:20,875 --> 00:50:22,792 and actually function, and saves people's lives? 1015 00:50:22,875 --> 00:50:26,166 Maybe that's more important than the name of the cloud 1016 00:50:26,250 --> 00:50:28,208 that processes the information, 1017 00:50:28,291 --> 00:50:30,542 which I think ended up being Yoda or something. 1018 00:50:31,083 --> 00:50:33,709 - Gibney: Was it Yoda? - (laughing): I think so. 1019 00:50:33,792 --> 00:50:37,500 Interviewer: What's your favorite sound from the movie Star Wars? 1020 00:50:38,333 --> 00:50:39,792 Yoda. 1021 00:50:39,875 --> 00:50:41,792 Interviewer: What does Yoda sound like? 1022 00:50:41,875 --> 00:50:45,000 Yoda sounds like, "Do or do not. There is no try." 1023 00:50:45,083 --> 00:50:47,417 ♪ ♪ 1024 00:50:47,500 --> 00:50:51,333 Wistort: You can't just bend your way around the laws of physics. 1025 00:50:51,417 --> 00:50:53,583 You can't just have a great marketing campaign, 1026 00:50:53,667 --> 00:50:55,500 and then get around these things. 1027 00:50:55,583 --> 00:50:57,500 (indistinct chatter) 1028 00:50:57,583 --> 00:51:00,333 Matje: Sunny and Elizabeth, they didn't care 1029 00:51:00,417 --> 00:51:02,917 that we figure out what's not working, or make sure 1030 00:51:03,000 --> 00:51:06,125 that we can actually solve these problems in a real way. 1031 00:51:06,208 --> 00:51:09,041 Nugent: They always seemed to think that everything could happen 1032 00:51:09,125 --> 00:51:10,917 very fast, and if you said no, 1033 00:51:11,000 --> 00:51:13,000 then they just went around to find the next person 1034 00:51:13,083 --> 00:51:14,125 who would say yes. 1035 00:51:14,792 --> 00:51:17,667 And generally, they tended to start become younger 1036 00:51:17,750 --> 00:51:19,667 and less experienced, right? 1037 00:51:19,750 --> 00:51:21,583 "We're going to disrupt. We don't want people 1038 00:51:21,667 --> 00:51:23,959 "who are stuck in the old ways of actually, 1039 00:51:24,041 --> 00:51:26,375 "you know, validating experiments, and, you know, 1040 00:51:26,458 --> 00:51:29,667 doing things properly with documentation." 1041 00:51:29,750 --> 00:51:31,875 ♪ ♪ 1042 00:51:31,959 --> 00:51:34,625 Narrator: One of those people who wanted things done properly 1043 00:51:34,709 --> 00:51:36,125 was Ian Gibbons. 1044 00:51:36,208 --> 00:51:39,208 The first experienced scientist hired by Theranos, 1045 00:51:39,291 --> 00:51:41,250 he was an expert in blood testing 1046 00:51:41,333 --> 00:51:44,417 and had done much of the work on the company's key patents, 1047 00:51:44,500 --> 00:51:47,291 to which Elizabeth had attached her name. 1048 00:51:48,125 --> 00:51:50,500 Nugent: Ian was a Cambridge PhD. 1049 00:51:50,583 --> 00:51:53,500 He knew things the rest of us didn't know. 1050 00:51:53,583 --> 00:51:56,959 He would work with some of the younger chemists and scientists, 1051 00:51:57,041 --> 00:51:58,434 and help them with their experiments, 1052 00:51:58,458 --> 00:51:59,959 help them to design their experiments, 1053 00:52:00,041 --> 00:52:02,417 help them to analyze their data, interpret their data, etc. 1054 00:52:02,500 --> 00:52:05,709 He was just a wealth of knowledge, and it was, 1055 00:52:05,792 --> 00:52:08,792 you know, at the time, it kind of evolved, I knew him for two years, 1056 00:52:08,875 --> 00:52:12,041 and my opinion of him evolved only just to be better 1057 00:52:12,125 --> 00:52:14,476 because he was just trying to make the best of his situation. 1058 00:52:14,500 --> 00:52:18,458 Like, what I got to see there, I got to see how marginalized he was. 1059 00:52:19,291 --> 00:52:20,834 Nugent: So, in about 2012, 1060 00:52:20,917 --> 00:52:22,583 Ian didn't have an office anymore. 1061 00:52:22,667 --> 00:52:24,834 I think he felt slighted by that. 1062 00:52:24,917 --> 00:52:28,709 He wasn't involved with decision-making. 1063 00:52:28,792 --> 00:52:32,166 He would look at data and he said things were not working. 1064 00:52:32,500 --> 00:52:35,375 Ian really got into bad shape with Sunny... 1065 00:52:35,458 --> 00:52:37,250 both Sunny and Elizabeth, 1066 00:52:37,333 --> 00:52:41,333 because there's so many things wrong with that technology. 1067 00:52:42,625 --> 00:52:46,417 And isn't that the point of someone like that being there, 1068 00:52:46,500 --> 00:52:49,792 to tell them why it wasn't going to work? 1069 00:52:49,875 --> 00:52:53,166 Narrator: In early 2013, Theranos tried to prevent Ian 1070 00:52:53,250 --> 00:52:55,875 from having to testify in a patent lawsuit. 1071 00:52:55,959 --> 00:52:58,125 If he were to give evidence that Elizabeth wasn't 1072 00:52:58,208 --> 00:52:59,709 the inventor she claimed to be, 1073 00:52:59,792 --> 00:53:02,959 some of the company's patents might be invalidated. 1074 00:53:03,041 --> 00:53:05,041 As the date of his deposition approached, 1075 00:53:05,125 --> 00:53:08,166 he drank heavily and fell into a deep depression, 1076 00:53:08,250 --> 00:53:11,375 afraid that honesty might cost him his job. 1077 00:53:12,166 --> 00:53:14,291 Nugent: Some time in 2013, 1078 00:53:14,375 --> 00:53:17,000 he wasn't in work anymore. 1079 00:53:17,083 --> 00:53:18,542 Elizabeth told him to stay at home 1080 00:53:18,625 --> 00:53:20,750 because I guess he was saying things aren't working. 1081 00:53:20,834 --> 00:53:22,208 That was what the story I was told. 1082 00:53:22,291 --> 00:53:25,959 Ian asked me if he thought that he was going to be fired, 1083 00:53:26,041 --> 00:53:28,041 and I told him yes. 1084 00:53:28,125 --> 00:53:29,834 Unfortunately. 1085 00:53:29,917 --> 00:53:32,959 And that was the night he killed himself. 1086 00:53:33,041 --> 00:53:37,166 He was so distraught over this stupid, um... 1087 00:53:37,250 --> 00:53:39,625 inter... uh, this... 1088 00:53:39,709 --> 00:53:42,542 patent case, misappropriation case, 1089 00:53:43,083 --> 00:53:48,333 and... not knowing what he was going to do with the rest of his life, 1090 00:53:48,417 --> 00:53:50,959 and that's why he committed suicide. 1091 00:53:51,667 --> 00:53:53,583 Gibney: What was the reaction of the company 1092 00:53:53,667 --> 00:53:56,166 after Ian committed suicide? 1093 00:53:56,250 --> 00:54:00,000 Um, I don't know because they never communicated with me, 1094 00:54:00,083 --> 00:54:04,667 except to ask me to send back his confidential stuff. 1095 00:54:04,750 --> 00:54:06,834 ♪ ♪ 1096 00:54:06,917 --> 00:54:11,291 I brought back his documents that he had at home, 1097 00:54:13,041 --> 00:54:15,291 and left them at the front desk. 1098 00:54:16,625 --> 00:54:19,417 Gibney: Did you ever hear from Elizabeth Holmes again? 1099 00:54:19,500 --> 00:54:21,125 No. 1100 00:54:23,125 --> 00:54:26,208 Holmes: If today were my last day on this Earth, 1101 00:54:26,291 --> 00:54:29,834 and I could say that 1102 00:54:29,917 --> 00:54:31,542 the people who've gone through hell 1103 00:54:31,625 --> 00:54:33,750 in being able to just get the test done 1104 00:54:33,834 --> 00:54:36,959 that they need to get care now don't... 1105 00:54:37,625 --> 00:54:40,417 I've done something in this world that 1106 00:54:40,500 --> 00:54:42,460 has made it a little bit of a better place, right? 1107 00:54:42,542 --> 00:54:45,000 But you've got to be protective about patent and all of that. 1108 00:54:45,083 --> 00:54:47,500 - We do... - But do you have something to worry about, 1109 00:54:47,583 --> 00:54:49,375 obviously, competitive businesses 1110 00:54:49,458 --> 00:54:51,709 always concerned about, you know, 1111 00:54:51,792 --> 00:54:55,542 - the ideas incorporated into products. - Sure. 1112 00:54:55,625 --> 00:54:57,750 You have to be on version 10 1113 00:54:57,834 --> 00:54:59,542 by the time anybody else is on version one. 1114 00:54:59,625 --> 00:55:01,208 - Yes. - And that's... 1115 00:55:01,291 --> 00:55:03,208 that's what our whole business is about, so... 1116 00:55:03,291 --> 00:55:04,583 So, you're paranoid? 1117 00:55:04,667 --> 00:55:06,750 - Rose: And you have to be. - We try to be. Yeah. 1118 00:55:06,834 --> 00:55:09,291 We want to be the most paranoid people on the planet. 1119 00:55:09,333 --> 00:55:10,583 - Absolutely. Yeah. - (laughing) 1120 00:55:10,667 --> 00:55:13,709 ♪ ♪ 1121 00:55:14,834 --> 00:55:16,208 Balwani: For last two years, 1122 00:55:16,291 --> 00:55:18,875 year and a half, we come under attack, 1123 00:55:18,959 --> 00:55:20,709 you know, from outside, and... 1124 00:55:20,792 --> 00:55:22,834 it's usually Quest Diagnostics. 1125 00:55:22,917 --> 00:55:25,959 Their entire product strategy is lies, built around 1126 00:55:26,041 --> 00:55:29,667 getting people sick and then living off of their diseases. 1127 00:55:29,750 --> 00:55:31,792 And we are trying to change that, right? 1128 00:55:31,875 --> 00:55:33,834 So, it's really important that you all understand 1129 00:55:33,917 --> 00:55:37,834 that what we are doing here is so disruptive 1130 00:55:37,917 --> 00:55:40,166 that we will always be attacked. 1131 00:55:40,208 --> 00:55:42,625 Matje: The paranoia seemed to come from the belief that 1132 00:55:42,709 --> 00:55:45,142 someone's going to beat us to it, or someone's going to steal our ideas, 1133 00:55:45,166 --> 00:55:46,846 or we're not going to get the whole market. 1134 00:55:46,875 --> 00:55:49,166 There's a healthy degree of paranoia and secrecy, 1135 00:55:49,291 --> 00:55:51,291 but this was well beyond that. 1136 00:55:52,875 --> 00:55:54,458 Matt Hernan: There was security. 1137 00:55:54,542 --> 00:55:57,291 You couldn't go walk up into her office. 1138 00:55:57,375 --> 00:55:59,208 That just doesn't happen. 1139 00:55:59,291 --> 00:56:02,333 She had bulletproof glass on their exterior windows. 1140 00:56:02,417 --> 00:56:04,667 There were bodyguards waiting outside, 1141 00:56:04,750 --> 00:56:06,834 you know, couple guys at the front lobby. 1142 00:56:06,917 --> 00:56:10,125 And that increased more and more later on. 1143 00:56:10,208 --> 00:56:13,917 But, yeah, her and Sunny walk in at the same time every morning. 1144 00:56:14,000 --> 00:56:16,750 "Eagle One, Eagle Two's on their way." 1145 00:56:16,834 --> 00:56:19,917 And soon as they start pulling in, "Okay, be ready. 1146 00:56:20,000 --> 00:56:22,208 Have the doors open." 1147 00:56:22,291 --> 00:56:24,667 She was Eagle One, Sunny was Eagle Two. 1148 00:56:24,792 --> 00:56:28,000 ♪ ♪ 1149 00:56:29,625 --> 00:56:31,000 (lock beeps, clicks) 1150 00:56:33,291 --> 00:56:34,500 Philippides: Sunny supposedly 1151 00:56:34,625 --> 00:56:38,125 tracked all the key card entries and exits, 1152 00:56:38,208 --> 00:56:40,208 so you would be identified each time 1153 00:56:40,291 --> 00:56:42,458 you went into any area. 1154 00:56:45,083 --> 00:56:46,583 Cheung: We would send e-mails, 1155 00:56:46,667 --> 00:56:49,208 not CC Sunny or Elizabeth, 1156 00:56:49,291 --> 00:56:52,125 and we would get a response back from Sunny. 1157 00:56:52,208 --> 00:56:55,125 And I remember that was a very big turning point for me, 1158 00:56:55,208 --> 00:56:58,917 where I was like, "You are being monitored. You are being watched." 1159 00:56:59,000 --> 00:57:01,792 Gafner: I found out that I was being keystroked. 1160 00:57:01,875 --> 00:57:03,792 That means that anything that I typed 1161 00:57:03,875 --> 00:57:06,500 was being watched internally. 1162 00:57:06,583 --> 00:57:07,917 Gibney: It seems kind of extreme 1163 00:57:08,000 --> 00:57:09,375 for a receptionist, doesn't it? 1164 00:57:09,500 --> 00:57:12,917 - Did that happen to you anywhere else? - No. 1165 00:57:13,000 --> 00:57:16,166 And, of course, nondisclosure agreements had to be signed. 1166 00:57:16,250 --> 00:57:17,750 Wistort: A giant stack of paperwork 1167 00:57:17,834 --> 00:57:20,542 saying you can't speak poorly about the company, 1168 00:57:20,625 --> 00:57:23,458 you're legally liable for any detriment caused 1169 00:57:23,542 --> 00:57:25,742 to the company. It's like, who's writing these contracts 1170 00:57:25,792 --> 00:57:27,500 and what are they trying to hide? 1171 00:57:27,583 --> 00:57:29,903 Matje: We weren't supposed to tell our families what we did. 1172 00:57:29,959 --> 00:57:31,709 We weren't supposed to talk about anything 1173 00:57:31,792 --> 00:57:33,333 that went on inside of Theranos. 1174 00:57:34,250 --> 00:57:35,417 Cheung: Then, after a while, 1175 00:57:35,500 --> 00:57:37,500 people became paranoid of one another. 1176 00:57:38,583 --> 00:57:40,667 Nugent: We became much more siloed. 1177 00:57:40,750 --> 00:57:43,875 Walking down the hallway, you'd say hi and the person would look 1178 00:57:43,959 --> 00:57:46,625 at the ceiling or the floor or anything to avoid eye contact 1179 00:57:46,709 --> 00:57:48,291 and not acknowledge you back. 1180 00:57:48,375 --> 00:57:50,559 Then the next person and the next person, and then you'd notice, 1181 00:57:50,583 --> 00:57:54,333 there'd be whole groups that just wouldn't... you were invisible to them. 1182 00:57:54,417 --> 00:57:57,208 It was very hard to communicate information sometimes 1183 00:57:57,291 --> 00:57:59,417 because there were so many blockades and silos 1184 00:57:59,500 --> 00:58:01,208 and this emphasis on secrecy. 1185 00:58:01,291 --> 00:58:03,583 If the people from the chemistry team could talk 1186 00:58:03,667 --> 00:58:06,875 about what was coming next from the engineering team, 1187 00:58:06,959 --> 00:58:09,519 they would've said, "Well, that's not going to solve the problem," 1188 00:58:09,583 --> 00:58:13,000 but since everyone was working on it separately, 1189 00:58:13,083 --> 00:58:14,917 they could all keep working forever 1190 00:58:15,000 --> 00:58:17,125 without actually solving anything. 1191 00:58:17,208 --> 00:58:18,792 (camera clicks) 1192 00:58:18,875 --> 00:58:21,625 The mantra in Silicon Valley is, "Move fast, break things," 1193 00:58:21,709 --> 00:58:23,375 and that is really dangerous 1194 00:58:23,458 --> 00:58:26,041 when people's lives are in the balance. 1195 00:58:26,125 --> 00:58:29,125 Wistort: Silicon Valley is really good at making 1196 00:58:29,208 --> 00:58:31,166 a web-based e-mail client, 1197 00:58:31,250 --> 00:58:35,083 or really great at making a chat app with emojis on it. 1198 00:58:35,166 --> 00:58:37,184 Photographer: A little mile when you kind of think about 1199 00:58:37,208 --> 00:58:39,750 what is all in that thing you're holding. 1200 00:58:39,834 --> 00:58:42,250 Wistort: But Silicon Valley is trying to do things 1201 00:58:42,333 --> 00:58:44,667 where people's lives are on the line. 1202 00:58:44,750 --> 00:58:46,350 We're trying to make autonomous vehicles. 1203 00:58:46,417 --> 00:58:48,333 We're trying to make medical devices. 1204 00:58:48,417 --> 00:58:51,125 We're trying to do these things that if you don't do it right, 1205 00:58:51,208 --> 00:58:53,333 quite frankly, people can die. 1206 00:58:53,417 --> 00:58:57,291 You need to approach it with a different lens. 1207 00:58:57,375 --> 00:58:59,667 The problem is that when you're developing the future, 1208 00:58:59,750 --> 00:59:01,959 you don't know what the impact is going to be 1209 00:59:02,041 --> 00:59:04,291 because no one's seen this before. 1210 00:59:04,375 --> 00:59:07,834 And the testing ground is often just the general public. 1211 00:59:10,458 --> 00:59:13,583 ♪ ♪ 1212 00:59:20,542 --> 00:59:23,542 Narrator: In 2013, Theranos went live, 1213 00:59:23,625 --> 00:59:25,542 testing real patients in Arizona 1214 00:59:25,625 --> 00:59:27,792 as part of a partnership with Walgreens. 1215 00:59:28,542 --> 00:59:30,333 It was a risky move. 1216 00:59:30,417 --> 00:59:32,041 The Edison machines had problems, 1217 00:59:32,125 --> 00:59:35,875 and they weren't approved by regulators for in-store testing. 1218 00:59:35,959 --> 00:59:37,709 But Theranos was running out of money 1219 00:59:37,792 --> 00:59:41,333 and needed the Walgreens deal to attract new investors. 1220 00:59:41,417 --> 00:59:43,959 So, Elizabeth sold Walgreens on a stopgap plan 1221 00:59:44,041 --> 00:59:47,500 to launch the Wellness Centers without the Edisons. 1222 00:59:51,250 --> 00:59:53,208 Instead of testing blood on-site, 1223 00:59:53,291 --> 00:59:55,750 patients' samples would be sent to Palo Alto, 1224 00:59:55,834 --> 00:59:59,417 where Theranos had hastily constructed a clinical lab. 1225 00:59:59,500 --> 01:00:02,000 Many of the technicians were inexperienced. 1226 01:00:02,083 --> 01:00:05,250 When one lab director quit, Theranos replaced him 1227 01:00:05,333 --> 01:00:07,500 with a dermatologist. 1228 01:00:08,500 --> 01:00:10,291 Due in part to the Walgreens launch, 1229 01:00:10,375 --> 01:00:11,750 Theranos was able to raise 1230 01:00:11,834 --> 01:00:14,291 over $400 million from new investors, 1231 01:00:14,375 --> 01:00:17,458 like the Walton family, Betsy DeVos, 1232 01:00:17,542 --> 01:00:19,333 the owner of the New England Patriots, 1233 01:00:19,417 --> 01:00:23,208 and Rupert Murdoch, who put up $125 million. 1234 01:00:24,625 --> 01:00:26,000 To investors and patients, 1235 01:00:26,083 --> 01:00:29,417 it seemed like the system was working as advertised. 1236 01:00:30,500 --> 01:00:34,500 ♪ ♪ 1237 01:00:34,583 --> 01:00:37,208 Patrick O'Neill: The plan was launched in Arizona 1238 01:00:37,291 --> 01:00:39,291 as if it's a nationwide campaign, 1239 01:00:39,375 --> 01:00:43,041 and then take key markets and roll it out across the country. 1240 01:00:44,792 --> 01:00:47,542 I wasn't an engineer. I wasn't a scientist. 1241 01:00:47,625 --> 01:00:49,166 I wasn't in RandD. 1242 01:00:49,250 --> 01:00:52,917 I was there to create a consumer brand. 1243 01:00:53,000 --> 01:00:57,417 We came up with three adjectives to describe Theranos: 1244 01:00:57,500 --> 01:01:00,709 simple, human, and optimistic. 1245 01:01:01,875 --> 01:01:03,917 Because there are so many barriers 1246 01:01:04,000 --> 01:01:05,917 to getting your blood drawn, 1247 01:01:06,000 --> 01:01:07,375 whether it's fear of needles, 1248 01:01:07,458 --> 01:01:09,500 or fear of finding out the results, 1249 01:01:09,875 --> 01:01:11,375 living far away, can't afford it. 1250 01:01:11,458 --> 01:01:13,083 There's just a lot of barriers. 1251 01:01:13,166 --> 01:01:15,291 It's like, people that have this 1252 01:01:15,375 --> 01:01:19,166 fear or this angst or don't like it, let's convert them. 1253 01:01:19,250 --> 01:01:22,542 - (bell rings) - So, I hired Errol Morris. 1254 01:01:23,542 --> 01:01:24,542 Errol worked with Apple. 1255 01:01:24,625 --> 01:01:26,875 Did a lot of great work with Apple. 1256 01:01:26,959 --> 01:01:29,291 And Elizabeth was taken by that. 1257 01:01:29,375 --> 01:01:31,834 This could be potentially the Apple of health care. 1258 01:01:31,917 --> 01:01:33,000 Holmes: Exactly. 1259 01:01:33,083 --> 01:01:36,500 - Morris: I'm a fan. - Well, likewise. 1260 01:01:36,583 --> 01:01:38,750 ♪ ♪ 1261 01:01:40,917 --> 01:01:42,000 O'Neill: We did casting. 1262 01:01:42,083 --> 01:01:44,959 Real people that have all these issues. 1263 01:01:45,041 --> 01:01:47,500 We did also reach out to existing Theranos customers, 1264 01:01:47,583 --> 01:01:50,583 and had several of them come and tell their real story 1265 01:01:50,667 --> 01:01:52,291 and their experience with Theranos. 1266 01:01:52,375 --> 01:01:53,917 - Morris: Hello! - Hi. 1267 01:01:54,000 --> 01:01:55,959 Morris: Thank you for coming in. 1268 01:01:57,125 --> 01:01:58,959 - Assistant Camera: A-mark. - (clacks) 1269 01:01:59,041 --> 01:02:00,917 Morris: So, as usual, I have no idea 1270 01:02:01,000 --> 01:02:03,750 what questions to ask or where to start. 1271 01:02:05,709 --> 01:02:07,208 I think we'll figure it out. 1272 01:02:07,291 --> 01:02:08,500 (laughter) 1273 01:02:08,583 --> 01:02:10,709 There are so many people that don't have insurance 1274 01:02:10,792 --> 01:02:12,375 and can't afford insurance. 1275 01:02:12,458 --> 01:02:13,875 I was going to doctors, 1276 01:02:13,959 --> 01:02:15,935 and I couldn't afford it. I was paying out of pocket. 1277 01:02:15,959 --> 01:02:18,333 If you're trying to live a life, it gets in the way of it. 1278 01:02:18,417 --> 01:02:19,935 And if I could receive this information, 1279 01:02:19,959 --> 01:02:22,792 without having to spend all of this money along the way, 1280 01:02:22,875 --> 01:02:24,166 that would be amazing. 1281 01:02:24,250 --> 01:02:26,792 Eight hundred dollars for a series of blood tests? 1282 01:02:26,875 --> 01:02:28,959 - It can be pretty stressful. - It's expensive. 1283 01:02:29,041 --> 01:02:30,709 It's ridiculous. 1284 01:02:30,792 --> 01:02:32,333 ♪ ♪ 1285 01:02:36,083 --> 01:02:38,417 Gibney: Once they went live in Arizona... 1286 01:02:38,500 --> 01:02:40,142 - Right. - ...dealing now with real patients... 1287 01:02:40,166 --> 01:02:42,000 - Right. - ...as opposed to RandD... 1288 01:02:42,083 --> 01:02:44,458 - That's right. Yes. - ...you know, 1289 01:02:44,542 --> 01:02:46,583 then you begin to wonder, like, 1290 01:02:46,667 --> 01:02:49,083 - is it... - Well, I think here's... 1291 01:02:49,166 --> 01:02:51,083 my context for this is, 1292 01:02:51,208 --> 01:02:52,959 you know, go back to Jobs for a minute, 1293 01:02:53,041 --> 01:02:54,834 and all the people that said no to him, 1294 01:02:54,917 --> 01:02:56,583 and he refused no, 1295 01:02:56,667 --> 01:02:59,417 and did it anyway and proved everyone wrong. 1296 01:02:59,500 --> 01:03:03,291 So, my measure of success at that level, 1297 01:03:03,375 --> 01:03:04,834 a visionary, 1298 01:03:04,917 --> 01:03:06,291 owns his own company, 1299 01:03:06,375 --> 01:03:08,375 in creating products that change the world, 1300 01:03:08,458 --> 01:03:10,959 he did not give up or give in ever. 1301 01:03:11,083 --> 01:03:13,208 So, that was my measure of success. 1302 01:03:13,291 --> 01:03:17,083 Now, on patients, that's a whole other thing. 1303 01:03:17,125 --> 01:03:21,083 ♪ ♪ 1304 01:03:21,166 --> 01:03:23,083 Narrator: In many states, patients aren't allowed 1305 01:03:23,125 --> 01:03:25,458 to order their own lab tests without a prescription. 1306 01:03:25,542 --> 01:03:29,625 Doctors are supposed to provide guidance and oversight. 1307 01:03:29,667 --> 01:03:31,834 But Elizabeth lobbied the state of Arizona 1308 01:03:31,959 --> 01:03:35,458 to pass a law allowing patients to order lab tests 1309 01:03:35,500 --> 01:03:37,667 without consulting doctors. 1310 01:03:38,500 --> 01:03:40,458 Giving people the right 1311 01:03:40,500 --> 01:03:43,083 to obtain a laboratory test 1312 01:03:43,125 --> 01:03:45,375 will, by definition, 1313 01:03:45,458 --> 01:03:49,083 begin the process of enabling them to engage 1314 01:03:49,166 --> 01:03:51,083 in their health. 1315 01:03:51,166 --> 01:03:53,625 Ms. Holmes, you are magnificent, 1316 01:03:53,667 --> 01:03:55,625 and there isn't a question 1317 01:03:55,750 --> 01:03:58,834 any of us could ever ask that you haven't answered 1318 01:03:58,959 --> 01:04:01,083 20 or 30 times before. 1319 01:04:02,291 --> 01:04:05,875 This law would allow you to order your own blood work, 1320 01:04:05,959 --> 01:04:07,291 and you get the results. 1321 01:04:07,375 --> 01:04:10,500 This is what Theranos puts out. 1322 01:04:10,583 --> 01:04:11,500 It's a menu. 1323 01:04:11,583 --> 01:04:13,750 You kind of order à la carte, 1324 01:04:13,834 --> 01:04:16,000 but there are some cautions raised 1325 01:04:16,083 --> 01:04:17,959 from the medical community. 1326 01:04:18,041 --> 01:04:19,333 ♪ ♪ 1327 01:04:19,417 --> 01:04:21,184 Stephanie Seitz: You can't just look at a lab. 1328 01:04:21,208 --> 01:04:24,083 You have to look at the whole patient, the whole person. 1329 01:04:24,166 --> 01:04:26,583 We can't write a prescription for somebody 1330 01:04:26,667 --> 01:04:30,125 that we haven't done a physical exam or have seen, 1331 01:04:30,208 --> 01:04:31,917 so it kind of was like, 1332 01:04:32,000 --> 01:04:34,542 how are we going to deal with this? 1333 01:04:34,625 --> 01:04:36,625 Low cost was very interesting to the patients, 1334 01:04:36,709 --> 01:04:40,250 but then also being able to order their own labs, 1335 01:04:40,333 --> 01:04:42,083 and they really liked that. 1336 01:04:43,291 --> 01:04:46,834 What made me concerned was, as a physician, 1337 01:04:46,917 --> 01:04:48,717 you can call the lab and ask simple questions, 1338 01:04:48,792 --> 01:04:52,083 and these are questions that we would ask any lab. 1339 01:04:52,166 --> 01:04:55,083 But Theranos, they weren't very transparent. 1340 01:04:55,875 --> 01:04:57,250 We tried to tell patients that, 1341 01:04:57,333 --> 01:05:00,500 "Listen, we're not getting a lot of information 1342 01:05:00,583 --> 01:05:02,166 "about how they do their testing, 1343 01:05:02,250 --> 01:05:04,959 and so we're kind of unsure of them." 1344 01:05:05,834 --> 01:05:10,667 But then, Theranos started giving out vouchers or gift cards 1345 01:05:10,750 --> 01:05:13,792 to get labs, free labs done there. 1346 01:05:13,875 --> 01:05:17,250 And so it just kind of... exploded. 1347 01:05:17,333 --> 01:05:19,000 Mom, you really are an important part 1348 01:05:19,083 --> 01:05:21,083 of our family because... 1349 01:05:21,166 --> 01:05:22,166 (clears throat) 1350 01:05:22,959 --> 01:05:25,542 we really love you so much. 1351 01:05:25,625 --> 01:05:27,417 Your health is really important to us. 1352 01:05:27,500 --> 01:05:30,500 The kids adore you. 1353 01:05:30,583 --> 01:05:32,375 Grandmother: Estábien, chiquita. 1354 01:05:32,458 --> 01:05:33,792 Announcer: Theranos gift cards. 1355 01:05:33,875 --> 01:05:35,250 Because nothing is more important 1356 01:05:35,333 --> 01:05:36,875 than the health of those you love. 1357 01:05:36,959 --> 01:05:38,333 (indistinct chatter) 1358 01:05:38,417 --> 01:05:39,768 - Assistant Camera: Marker. - (clacks) 1359 01:05:39,792 --> 01:05:42,125 ♪ ♪ 1360 01:06:00,208 --> 01:06:03,375 Serena Stewart: Because of my extensive background in phlebotomy, 1361 01:06:03,458 --> 01:06:05,792 they offered me the trainer job. 1362 01:06:05,875 --> 01:06:08,709 Basically, I was training the Walgreens technicians 1363 01:06:08,792 --> 01:06:12,375 and pharmacist to do the fingerstick process because... 1364 01:06:13,583 --> 01:06:15,959 no one at Walgreens had ever 1365 01:06:16,041 --> 01:06:18,750 handled blood or bodily fluids. 1366 01:06:18,834 --> 01:06:21,125 So, talking about 1367 01:06:21,208 --> 01:06:23,792 what do you do in case of an exposure and... 1368 01:06:23,875 --> 01:06:26,083 how do you handle adolescents, 1369 01:06:26,166 --> 01:06:28,917 um, you know, just everything. 1370 01:06:29,000 --> 01:06:30,709 What do you do if someone faints? 1371 01:06:30,792 --> 01:06:32,834 ♪ ♪ 1372 01:06:35,792 --> 01:06:37,792 Holmes: Our goal is to be within five miles 1373 01:06:37,875 --> 01:06:41,792 of every person's home through the Walgreens nationally. 1374 01:06:42,625 --> 01:06:46,625 Our success will be in being able to make it possible 1375 01:06:46,709 --> 01:06:50,125 for no one to ever have to go through the process 1376 01:06:50,208 --> 01:06:53,500 of being stabbed by a big needle to get blood anymore, 1377 01:06:53,583 --> 01:06:56,583 and be able to begin to get access to this lab... 1378 01:06:56,667 --> 01:06:58,625 Parloff: As I was doing my research, 1379 01:06:58,709 --> 01:07:00,625 they had about 90 tests, 1380 01:07:00,709 --> 01:07:03,166 and by the time I was ready to publish, 1381 01:07:03,250 --> 01:07:05,417 they had over 200. 1382 01:07:05,500 --> 01:07:06,792 I wondered at the time 1383 01:07:06,875 --> 01:07:09,667 how exactly was she miniaturizing 1384 01:07:09,750 --> 01:07:11,000 200 different tests, 1385 01:07:11,083 --> 01:07:13,208 and how exactly were you going to get 1386 01:07:13,291 --> 01:07:16,208 all of this done in the small analyzers? 1387 01:07:17,667 --> 01:07:20,458 And she was charging so much less than the others, 1388 01:07:20,542 --> 01:07:24,375 so all of that strained credulity. 1389 01:07:25,375 --> 01:07:28,500 I just didn't think that this 1390 01:07:28,583 --> 01:07:30,667 very sincere, 1391 01:07:30,750 --> 01:07:33,959 earnest, idealistic, young woman 1392 01:07:34,041 --> 01:07:37,083 was deceiving not just me, 1393 01:07:37,166 --> 01:07:41,250 but Walgreens Corporation and investors 1394 01:07:41,333 --> 01:07:44,625 to the tune of more than $400 million at that point. 1395 01:07:44,709 --> 01:07:48,500 ♪ ♪ 1396 01:07:48,583 --> 01:07:50,500 Holmes: To be able to give people 1397 01:07:50,583 --> 01:07:52,500 the tools to change their life 1398 01:07:52,583 --> 01:07:55,417 is an incredible blessing. It's a privilege. 1399 01:07:56,667 --> 01:07:58,166 Every single day, 1400 01:07:58,250 --> 01:08:01,583 I'm just so grateful for the way in which this is unfolding. 1401 01:08:02,542 --> 01:08:04,208 It's a gift from God. 1402 01:08:09,917 --> 01:08:11,959 ♪ ♪ 1403 01:08:16,750 --> 01:08:18,834 Ariely: We have to understand that this is all about 1404 01:08:18,917 --> 01:08:22,125 wanting the world to be a certain way, 1405 01:08:22,208 --> 01:08:24,792 and basically being able to rationalize our actions 1406 01:08:24,875 --> 01:08:27,291 to try and make it true. 1407 01:08:27,375 --> 01:08:29,542 You have to want a certain thing, 1408 01:08:29,625 --> 01:08:32,041 and then you should be able to kind of bend reality, 1409 01:08:32,125 --> 01:08:35,291 or rationalize things to allow you to do that. 1410 01:08:35,375 --> 01:08:37,208 But the other thing is that 1411 01:08:37,291 --> 01:08:40,375 what about reasons for good? 1412 01:08:40,458 --> 01:08:43,166 And I'll tell you about a study we did. 1413 01:08:43,250 --> 01:08:45,583 And the experiment works like this. 1414 01:08:45,667 --> 01:08:47,917 We give people a die, a six-sided die, 1415 01:08:48,000 --> 01:08:50,041 and we say, "Why don't you throw the die?" 1416 01:08:50,125 --> 01:08:52,125 And we'll pay you whatever it comes up. 1417 01:08:52,208 --> 01:08:53,559 Comes in six, you'll get six dollars 1418 01:08:53,583 --> 01:08:56,083 five, five dollars, four, and so on until one. 1419 01:08:56,166 --> 01:08:59,834 But you can get paid based on the top side or the bottom side. 1420 01:08:59,917 --> 01:09:02,750 Top or bottom, you decide, but don't tell us. 1421 01:09:02,834 --> 01:09:05,417 So, I give you the die, I say, "Don't tell me." 1422 01:09:05,500 --> 01:09:08,291 Think top or bottom. You have it? You know which one? 1423 01:09:08,375 --> 01:09:10,583 - Now, toss the die. - (clatters) 1424 01:09:10,667 --> 01:09:12,333 ♪ ♪ 1425 01:09:12,417 --> 01:09:14,250 And let's say the die comes five on the bottom 1426 01:09:14,333 --> 01:09:17,083 and two on the top. And now I say, 1427 01:09:17,166 --> 01:09:19,166 "Alex, what did you pick?" 1428 01:09:19,250 --> 01:09:21,750 Now, if you picked bottom, you say bottom, you get five dollars. 1429 01:09:21,834 --> 01:09:22,917 You pick top, 1430 01:09:23,000 --> 01:09:25,208 what do you say? You say the truth? Top? 1431 01:09:25,291 --> 01:09:29,750 Or do you change your mind? You say bottom and get five dollars. 1432 01:09:29,834 --> 01:09:32,125 In our experiment, people do this 20 times. 1433 01:09:32,208 --> 01:09:33,768 And every time they think top or bottom, 1434 01:09:33,792 --> 01:09:37,375 commit it to memory, toss the die, and they write, 1435 01:09:37,458 --> 01:09:40,250 "Five and two. I chose five," and so on. 1436 01:09:41,041 --> 01:09:42,559 And when you do it 20 times, you find that 1437 01:09:42,583 --> 01:09:44,333 people are extra lucky. 1438 01:09:44,417 --> 01:09:47,041 Right? And luck has this really nice feature 1439 01:09:47,125 --> 01:09:49,750 of focusing on the six-one die tosses, right? 1440 01:09:49,834 --> 01:09:51,750 They're extra lucky on the six-one die tosses, 1441 01:09:51,834 --> 01:09:53,709 not so much on the three-four. 1442 01:09:53,792 --> 01:09:54,959 That's the basic experiment. 1443 01:09:55,041 --> 01:09:57,125 Now, here's the thing I want to tell you. 1444 01:09:57,208 --> 01:09:58,834 We do the same experiment, 1445 01:09:58,917 --> 01:10:02,250 but we connect people to a lie detector. 1446 01:10:02,333 --> 01:10:05,875 And we ask the question of whether the lie detector can detect it, 1447 01:10:05,959 --> 01:10:08,959 and the answer is yes, the lie detector can detect lies, 1448 01:10:09,041 --> 01:10:11,583 not all the time, but it can detect it. 1449 01:10:11,667 --> 01:10:13,458 In another version of the experiment, 1450 01:10:13,542 --> 01:10:15,291 we do the same thing, 1451 01:10:15,375 --> 01:10:17,333 but people pick a charity. 1452 01:10:17,417 --> 01:10:19,458 And all the money that they're going to make today 1453 01:10:19,542 --> 01:10:22,166 goes to that charity. Right? For a good cause. 1454 01:10:22,250 --> 01:10:24,917 What do you think happened, people cheat more or less? 1455 01:10:25,000 --> 01:10:27,000 People cheat more. 1456 01:10:27,083 --> 01:10:29,583 And the lie detector stops working. 1457 01:10:30,750 --> 01:10:33,333 Why? Because what does the lie detector detect? 1458 01:10:33,417 --> 01:10:35,875 The lie detector detects a tension. 1459 01:10:35,959 --> 01:10:38,000 I want more money, but I think it's wrong. 1460 01:10:38,083 --> 01:10:39,792 I want more money, but I think it's wrong, 1461 01:10:39,875 --> 01:10:41,625 but if it's not wrong, 1462 01:10:41,709 --> 01:10:43,458 why would you worry? 1463 01:10:43,542 --> 01:10:47,000 If it's for a good cause, you can still think of yourself as a good person, 1464 01:10:47,083 --> 01:10:51,500 and that's how things start, and then it becomes a slippery slope. 1465 01:10:51,583 --> 01:10:54,625 ♪ ♪ 1466 01:10:56,250 --> 01:10:58,291 (vehicles whooshing) 1467 01:11:09,250 --> 01:11:10,935 John Carreyrou: I was at the Wall Street Journal 1468 01:11:10,959 --> 01:11:13,000 on the fifth floor of the Journal newsroom 1469 01:11:13,083 --> 01:11:14,792 in midtown Manhattan. 1470 01:11:14,875 --> 01:11:16,917 I had couple weeks prior finished 1471 01:11:17,000 --> 01:11:19,500 a long series on Medicare fraud. 1472 01:11:19,583 --> 01:11:20,667 So, I was looking for 1473 01:11:20,750 --> 01:11:23,417 something new to sink my teeth into, 1474 01:11:23,500 --> 01:11:25,333 and one afternoon, 1475 01:11:25,417 --> 01:11:27,583 I'm at my desk, my phone rings, I pick up, 1476 01:11:27,667 --> 01:11:29,750 and it's this source of mine. 1477 01:11:29,834 --> 01:11:32,125 He asked me whether I'd read this New Yorker profile 1478 01:11:32,208 --> 01:11:33,959 of Elizabeth Holmes that had been published 1479 01:11:34,041 --> 01:11:37,375 a couple weeks prior in December of 2014. 1480 01:11:37,458 --> 01:11:39,250 As it turns out, I had. 1481 01:11:39,333 --> 01:11:41,709 And there was a quote from Elizabeth Holmes 1482 01:11:41,792 --> 01:11:45,417 that Ken Auletta described as "comically vague." 1483 01:11:45,500 --> 01:11:47,041 It sounded like the words 1484 01:11:47,125 --> 01:11:48,625 of a high school chemistry student, 1485 01:11:48,709 --> 01:11:51,667 as opposed to a sophisticated laboratory scientist 1486 01:11:51,750 --> 01:11:54,917 who'd really invented new science. 1487 01:11:55,000 --> 01:11:58,083 But I might not have done anything about it 1488 01:11:58,166 --> 01:11:59,750 if it weren't for the fact that 1489 01:11:59,834 --> 01:12:03,750 my source was now coming to me with this tip. 1490 01:12:03,834 --> 01:12:06,917 He said there's a laboratory director 1491 01:12:07,000 --> 01:12:09,792 who had just left Theranos on pretty bad terms 1492 01:12:09,875 --> 01:12:12,750 because he had become increasingly concerned 1493 01:12:12,834 --> 01:12:16,125 about the practices that he had witnessed there. 1494 01:12:16,667 --> 01:12:18,709 My ears definitely pricked up at that, 1495 01:12:18,792 --> 01:12:20,834 and so I made contact. 1496 01:12:20,917 --> 01:12:23,208 (keypad beeps) - When I got him on the phone, 1497 01:12:23,291 --> 01:12:25,375 after trying him a few times, he was terrified. 1498 01:12:25,458 --> 01:12:28,625 (phone rings) - He was being hounded by the law firm 1499 01:12:28,709 --> 01:12:31,458 of the famous lawyer David Boies. 1500 01:12:31,542 --> 01:12:34,959 One of Theranos's strokes of genius was to hire David Boies 1501 01:12:35,041 --> 01:12:38,083 and also give him stock in the company. 1502 01:12:38,166 --> 01:12:40,959 I mean, this is a lion of the legal industry, 1503 01:12:41,041 --> 01:12:43,542 arguably the most well-known lawyer in America, 1504 01:12:43,625 --> 01:12:46,959 who had represented Al Gore in in the presidential recount in 2000. 1505 01:12:47,041 --> 01:12:50,458 Before that, won a case on behalf of the Justice Department 1506 01:12:50,542 --> 01:12:52,083 against Microsoft, 1507 01:12:52,166 --> 01:12:55,792 and had shred Bill Gates during 20 hours of deposition. 1508 01:12:55,875 --> 01:12:58,625 And he would later become famous as the legal muscle 1509 01:12:58,709 --> 01:13:02,834 for Harvey Weinstein and his attempt to silence accusers. 1510 01:13:02,917 --> 01:13:06,625 This was someone who struck fear in many people. 1511 01:13:06,709 --> 01:13:09,834 The lab director said that Boies was pressuring him 1512 01:13:09,917 --> 01:13:12,834 and threatening him with litigation. 1513 01:13:12,917 --> 01:13:15,125 So, I had to agree... 1514 01:13:15,208 --> 01:13:17,375 to keep his identity confidential. 1515 01:13:18,875 --> 01:13:23,125 He told me that the Edison could only do a few tests, 1516 01:13:23,208 --> 01:13:25,875 and that all the other tests on Theranos's menu, 1517 01:13:25,959 --> 01:13:29,542 and at that point, we're talking about 250 blood tests, 1518 01:13:29,625 --> 01:13:31,667 were done on commercially available 1519 01:13:31,750 --> 01:13:34,041 laboratory machines that had been purchased 1520 01:13:34,125 --> 01:13:37,750 from companies like Siemens and DiaSorin. 1521 01:13:37,834 --> 01:13:39,333 And then they were also lying 1522 01:13:39,417 --> 01:13:43,500 about the reliability and the accuracy of the blood tests. 1523 01:13:50,125 --> 01:13:52,917 (birds chirping) 1524 01:13:53,000 --> 01:13:54,458 So, I went to Arizona 1525 01:13:54,542 --> 01:13:56,041 to get myself tested. 1526 01:13:56,125 --> 01:13:57,542 And so, one morning, I went 1527 01:13:57,625 --> 01:14:00,458 to the Walgreens that was closest to my hotel. 1528 01:14:00,542 --> 01:14:02,041 I sat down in one of these 1529 01:14:02,125 --> 01:14:04,208 little Wellness Centers, and the phlebotomist, 1530 01:14:04,291 --> 01:14:06,041 I heard her talking on the phone, 1531 01:14:06,125 --> 01:14:08,709 and typing on a computer for a few minutes, 1532 01:14:08,792 --> 01:14:11,917 and then she turned around and she came at me 1533 01:14:12,000 --> 01:14:14,208 with a tourniquet and a syringe. 1534 01:14:14,291 --> 01:14:17,125 ♪ ♪ 1535 01:14:17,208 --> 01:14:19,542 And I said, "Why not a fingerstick? 1536 01:14:19,625 --> 01:14:21,000 "I thought this was all about, 1537 01:14:21,083 --> 01:14:23,458 you know, a fingerstick blood test." 1538 01:14:23,542 --> 01:14:25,542 She said, "No, your order actually 1539 01:14:25,625 --> 01:14:27,875 includes tests that require venous draw." 1540 01:14:27,959 --> 01:14:29,917 ♪ ♪ 1541 01:14:30,000 --> 01:14:33,375 Parloff: The truth is that, before my story came out, 1542 01:14:33,458 --> 01:14:35,542 there had already been instances of people 1543 01:14:35,625 --> 01:14:37,250 going in to get their blood checked, 1544 01:14:37,333 --> 01:14:39,625 and they would need to do a venipuncture 1545 01:14:39,709 --> 01:14:43,208 instead of a fingerstick of capillary blood. 1546 01:14:43,291 --> 01:14:45,917 And so, I asked about that a number of times, 1547 01:14:46,000 --> 01:14:50,375 and the answers were incredibly opaque. 1548 01:14:50,458 --> 01:14:51,935 Auletta (on recording): So, my question is 1549 01:14:51,959 --> 01:14:54,083 what percentage of your tests are 1550 01:14:54,166 --> 01:14:56,250 needle rather than finger prick? 1551 01:14:56,333 --> 01:14:59,208 Holmes (on recording): I-I don't have a really good number for you 1552 01:14:59,291 --> 01:15:01,125 because it's changing. 1553 01:15:01,208 --> 01:15:03,208 And we're really confident being able to say 1554 01:15:03,291 --> 01:15:05,959 that we're very close to 99% being on capillary, 1555 01:15:06,041 --> 01:15:08,834 but when you try to pinpoint a number... 1556 01:15:08,917 --> 01:15:10,834 Auletta: We talking about in the next 1557 01:15:10,917 --> 01:15:13,834 - five years? One year? Two months? - Holmes (laughs): No. 1558 01:15:13,917 --> 01:15:16,291 Much less than a year, 1559 01:15:16,375 --> 01:15:17,750 without question. 1560 01:15:18,709 --> 01:15:20,500 Gibney: At the time, you didn't think that 1561 01:15:20,583 --> 01:15:23,458 that was necessarily evidence of... 1562 01:15:23,542 --> 01:15:25,834 Absolutely not. I actually believed her. 1563 01:15:25,917 --> 01:15:29,291 Of course, I remember her saying it to me. 1564 01:15:29,375 --> 01:15:32,083 And... that's a lie. 1565 01:15:33,000 --> 01:15:34,041 Period. 1566 01:15:38,583 --> 01:15:40,041 Stewart: So, after a year or so, 1567 01:15:40,125 --> 01:15:43,959 we started to see the fingerstick collection dwindle, 1568 01:15:44,041 --> 01:15:47,125 and more venipuncture increase. 1569 01:15:47,208 --> 01:15:49,792 Gibney: What did they tell you about why they were switching 1570 01:15:49,875 --> 01:15:53,083 to part fingerstick and part venipuncture? 1571 01:15:53,166 --> 01:15:56,333 They just... They didn't tell us. It just happened. 1572 01:15:56,417 --> 01:16:01,083 We were told we would need to say this blanketed statement: 1573 01:16:01,166 --> 01:16:03,583 "Due to the test that your physician ordered, 1574 01:16:03,667 --> 01:16:06,375 "we have to perform venipuncture 1575 01:16:06,458 --> 01:16:08,291 "to make sure that we had enough 1576 01:16:08,375 --> 01:16:12,000 "sample to perform the testing. 1577 01:16:12,083 --> 01:16:14,208 Would you like to proceed?" 1578 01:16:14,291 --> 01:16:16,625 - That's it. - That must've surprised you. 1579 01:16:16,709 --> 01:16:19,208 Yeah, it surprised a lot of the technicians. 1580 01:16:19,291 --> 01:16:21,166 It surprised a lot of the patients, 1581 01:16:21,250 --> 01:16:22,890 or the customers that were coming in, too. 1582 01:16:22,917 --> 01:16:27,166 Some people, uh, expressed profanity, 1583 01:16:27,250 --> 01:16:31,333 stormed out, demanded their money back. 1584 01:16:31,417 --> 01:16:35,333 Then, during that whole transition to venipuncture, 1585 01:16:35,417 --> 01:16:41,250 we had this big hiring boom where I had to train 50 more employees 1586 01:16:41,333 --> 01:16:45,959 because now we opened up our next 10 Wellness Centers. 1587 01:16:48,792 --> 01:16:50,333 Narrator: With the Walgreens roll out, 1588 01:16:50,417 --> 01:16:52,875 the problems at Theranos were magnified. 1589 01:16:52,959 --> 01:16:55,500 Instead of shutting down until the Edisons could perform 1590 01:16:55,583 --> 01:16:57,583 all the tests on the Theranos menu, 1591 01:16:57,667 --> 01:17:01,291 Elizabeth and her team invented a workaround designed 1592 01:17:01,375 --> 01:17:04,000 to create the illusion of a new technology. 1593 01:17:04,083 --> 01:17:08,291 For most tests, they were forced to use venous blood, drawn with needles, 1594 01:17:08,375 --> 01:17:11,625 and to buy the same machines used by every other lab. 1595 01:17:11,709 --> 01:17:14,250 But to keep Elizabeth's fingerstick dream alive, 1596 01:17:14,333 --> 01:17:16,625 Theranos modified some of those machines, 1597 01:17:16,709 --> 01:17:19,875 so they would work with diluted capillary samples. 1598 01:17:19,959 --> 01:17:21,500 And for a handful of patient tests, 1599 01:17:21,583 --> 01:17:24,000 the company used the old Edison prototype 1600 01:17:24,083 --> 01:17:26,458 Elizabeth had pitched to Walgreens. 1601 01:17:26,542 --> 01:17:29,375 What we've worked to do is eliminate the error 1602 01:17:29,458 --> 01:17:31,417 and variability that's associated 1603 01:17:31,500 --> 01:17:34,333 with human processing of samples. 1604 01:17:34,417 --> 01:17:37,625 Tyler: When Elizabeth says the whole process was automated 1605 01:17:37,709 --> 01:17:39,917 from start to finish, it was... (laughs) 1606 01:17:40,000 --> 01:17:42,709 it was, uh, yeah, that was a stretch. 1607 01:17:42,792 --> 01:17:45,750 Cheung: It would sometimes take six hours 1608 01:17:45,834 --> 01:17:47,667 just to set up the system 1609 01:17:47,750 --> 01:17:50,166 before we could even run the patient samples. 1610 01:17:50,250 --> 01:17:52,875 I was filling up containers, 1611 01:17:52,959 --> 01:17:56,458 doing so many manual things with hands. 1612 01:17:56,542 --> 01:17:58,792 And the scary thing about the nanotainers was they could 1613 01:17:58,875 --> 01:18:01,000 hop off your tray and they would be on the ground, 1614 01:18:01,083 --> 01:18:03,875 and you might not be able to spot them. 1615 01:18:05,709 --> 01:18:07,542 Philippides: They had to dilute the nanotainers 1616 01:18:07,625 --> 01:18:09,458 to run it on the Siemens machines, 1617 01:18:09,542 --> 01:18:11,959 which was not how they were supposed to be used, 1618 01:18:12,041 --> 01:18:14,208 and so people who worked in the clinical lab 1619 01:18:14,291 --> 01:18:16,458 were nervous about that because they were violating 1620 01:18:16,542 --> 01:18:19,208 the operating standards for those devices, 1621 01:18:19,291 --> 01:18:21,125 which, you know, are rigorous standards 1622 01:18:21,208 --> 01:18:23,125 since they're being used to test 1623 01:18:23,208 --> 01:18:24,875 people for diseases. 1624 01:18:26,166 --> 01:18:28,333 We were fudging results, 1625 01:18:28,417 --> 01:18:31,959 rerunning quality control tests until they passed. 1626 01:18:32,041 --> 01:18:33,583 Matje: The solution at some point was, 1627 01:18:33,667 --> 01:18:35,347 "If you just throw out that one data point, 1628 01:18:35,375 --> 01:18:36,643 then the other three look beautiful." 1629 01:18:36,667 --> 01:18:39,417 And that's not the way you approach 1630 01:18:39,500 --> 01:18:41,709 science that's going to be impacting people's lives. 1631 01:18:41,792 --> 01:18:44,125 Philippides: There were people who had to run tests 1632 01:18:44,208 --> 01:18:46,208 on devices that they knew weren't working, 1633 01:18:46,291 --> 01:18:49,667 and give those results to patients. 1634 01:18:49,750 --> 01:18:52,709 People were very upset, you know, crying. 1635 01:18:52,792 --> 01:18:54,333 Some members of the CLIA lab would even 1636 01:18:54,417 --> 01:18:56,792 have to call patients and tell them that they had to go 1637 01:18:56,875 --> 01:18:59,583 to the emergency room 'cause the lab test was, you know, so far off. 1638 01:18:59,667 --> 01:19:01,709 Cheung: What really hit home for me is 1639 01:19:01,792 --> 01:19:04,542 we were starting to do more infectious disease. 1640 01:19:04,625 --> 01:19:07,083 Hepatitis C, prostate cancer, 1641 01:19:07,166 --> 01:19:09,000 and even syphilis. 1642 01:19:09,083 --> 01:19:11,750 Tyler: I was running precision testing for syphilis, 1643 01:19:11,834 --> 01:19:15,458 and there was a lot of variability in the test, 1644 01:19:16,208 --> 01:19:19,250 but Theranos said, "This is safe to use 1645 01:19:19,333 --> 01:19:22,417 on real patient samples." 1646 01:19:22,500 --> 01:19:24,375 And I was kind of blown away. 1647 01:19:24,458 --> 01:19:26,083 If a hundred people who had syphilis 1648 01:19:26,166 --> 01:19:28,792 came and got tested on the Theranos devices, 1649 01:19:28,875 --> 01:19:31,041 we would only tell 65 of them that they had syphilis, 1650 01:19:31,125 --> 01:19:32,709 and we would tell the other 35, 1651 01:19:32,792 --> 01:19:35,041 "You're healthy. No need for medical intervention." 1652 01:19:35,125 --> 01:19:39,041 So, if people are 1653 01:19:39,125 --> 01:19:42,542 testing themselves for syphilis using Theranos, 1654 01:19:42,625 --> 01:19:44,726 there's going to be a lot more syphilis in this world. 1655 01:19:44,750 --> 01:19:47,792 ♪ ♪ 1656 01:19:49,417 --> 01:19:51,083 Seitz: Their downfall was when they started 1657 01:19:51,166 --> 01:19:54,542 giving us results that were not matching up 1658 01:19:54,625 --> 01:19:56,959 with other labs. 1659 01:19:57,041 --> 01:19:59,834 We started seeing that, at first, with TSHs, 1660 01:19:59,917 --> 01:20:02,834 which is the thyroid stimulating hormone. 1661 01:20:02,917 --> 01:20:05,250 Patients that had been coming to us for years 1662 01:20:05,333 --> 01:20:06,583 to get their TSH done, 1663 01:20:06,667 --> 01:20:08,667 they had gone to Theranos and their labs 1664 01:20:08,750 --> 01:20:11,458 were changing really drastically. 1665 01:20:11,542 --> 01:20:14,333 So, we started sending them to LabCorp, 1666 01:20:14,417 --> 01:20:16,057 just to verify, and that's when we started 1667 01:20:16,125 --> 01:20:19,083 seeing some pretty abnormal results. 1668 01:20:19,166 --> 01:20:20,375 I understand how a patient 1669 01:20:20,458 --> 01:20:22,333 would wanna order their own labs, 1670 01:20:22,417 --> 01:20:25,375 but then they get it and they don't know what to do with it, 1671 01:20:25,458 --> 01:20:27,125 or they go on Google 1672 01:20:27,208 --> 01:20:29,709 and google everything under the sun, 1673 01:20:29,792 --> 01:20:32,083 and see that they have cancer, so... 1674 01:20:32,166 --> 01:20:34,375 - Gibney: When they don't. - When they don't! 1675 01:20:34,458 --> 01:20:37,834 Gibney: When you read about how many tests were actually wrong... 1676 01:20:37,917 --> 01:20:39,834 - Mm-hmm. - ...did that concern you? 1677 01:20:39,917 --> 01:20:42,000 It did because I had some of those tests 1678 01:20:42,083 --> 01:20:44,625 performed on me and my children! 1679 01:20:44,709 --> 01:20:46,375 (laughing) I did! 1680 01:20:46,458 --> 01:20:50,125 So, I immediately went back to... 1681 01:20:50,208 --> 01:20:52,542 the other big lab companies, 1682 01:20:52,625 --> 01:20:55,250 and got my test done, the same test done, 1683 01:20:55,333 --> 01:20:58,208 and I compared them, and there was a big difference. 1684 01:20:58,458 --> 01:21:01,125 So, yeah, it was scary. 1685 01:21:01,208 --> 01:21:02,458 It was very scary. 1686 01:21:02,542 --> 01:21:05,208 ♪ ♪ 1687 01:21:05,291 --> 01:21:08,291 Balwani: There are so many people who reach out to us and thank us. 1688 01:21:08,375 --> 01:21:11,417 This one guy, he said, "Thank God for Theranos." 1689 01:21:11,500 --> 01:21:13,434 I mean, how many times you say that about companies? 1690 01:21:13,458 --> 01:21:16,792 You buy a product, and do you ever say, "Thank God for Uber?" 1691 01:21:16,875 --> 01:21:18,500 Well, maybe sometimes, but... 1692 01:21:18,583 --> 01:21:20,208 - (laughter) - But you will say 1693 01:21:20,333 --> 01:21:22,333 thank God for Theranos every day, 1694 01:21:22,417 --> 01:21:24,542 because every time you need a lab test, 1695 01:21:24,625 --> 01:21:26,333 every time your family needs a test... 1696 01:21:26,417 --> 01:21:28,000 Cheung: I couldn't feel comfortable 1697 01:21:28,083 --> 01:21:30,583 with running these tests on patients 1698 01:21:30,667 --> 01:21:31,959 because, at the end of the day, 1699 01:21:32,041 --> 01:21:33,625 I wouldn't run them on myself. 1700 01:21:33,709 --> 01:21:36,000 I wouldn't run them on my family members. 1701 01:21:36,083 --> 01:21:38,583 And it just didn't make sense that, 1702 01:21:38,667 --> 01:21:41,333 internally, we had so little faith 1703 01:21:41,417 --> 01:21:42,583 in these tests, 1704 01:21:42,667 --> 01:21:45,375 but we're still resulting them on patients. 1705 01:21:45,458 --> 01:21:47,125 Balwani: Unprecedented transparency... 1706 01:21:47,208 --> 01:21:49,375 Cheung: I finally decided enough is enough. 1707 01:21:49,458 --> 01:21:52,417 I went into Sunny's office and I said, 1708 01:21:52,500 --> 01:21:54,000 "We're not letting patients know 1709 01:21:54,083 --> 01:21:57,667 when these results are false or when we make a mistake." 1710 01:21:57,750 --> 01:22:00,667 And effectively, what he did is said, 1711 01:22:00,750 --> 01:22:04,750 "What makes you think you're qualified to make that call?" 1712 01:22:04,834 --> 01:22:07,542 And, "You need to just sit down and do your job." 1713 01:22:07,625 --> 01:22:09,417 Thank you. 1714 01:22:09,500 --> 01:22:11,208 At that point, I knew. 1715 01:22:11,291 --> 01:22:13,542 It's just unacceptable what this company is doing, 1716 01:22:13,625 --> 01:22:15,417 and I don't want to be a part of that. 1717 01:22:15,500 --> 01:22:17,959 The kind of technologies that you're building 1718 01:22:18,041 --> 01:22:21,375 practically are changing people's lives every single day. 1719 01:22:21,458 --> 01:22:25,125 Cheung: I couldn't understand how someone could continuously lie. 1720 01:22:25,208 --> 01:22:27,083 It really changed my perception of her. 1721 01:22:27,166 --> 01:22:28,875 That, okay, this person, 1722 01:22:28,959 --> 01:22:30,709 you know, plays this role of, 1723 01:22:30,792 --> 01:22:33,083 you know, wanting to make health care more accessible, 1724 01:22:33,166 --> 01:22:36,542 of really trying to leverage innovative new technologies 1725 01:22:36,625 --> 01:22:39,750 to solve this huge problem that we have in health care, 1726 01:22:39,834 --> 01:22:41,125 but it's all a show. 1727 01:22:41,208 --> 01:22:43,792 I grew up spending summers 1728 01:22:43,875 --> 01:22:46,583 - and the holidays... - (projector whirring) 1729 01:22:46,667 --> 01:22:50,041 - ...with my uncle. I remember how much I loved him. - I have a really vivid memory. 1730 01:22:50,125 --> 01:22:51,917 - I loved him so much. - He was fine. 1731 01:22:52,000 --> 01:22:54,959 He was diagnosed one day with skin cancer... 1732 01:22:55,041 --> 01:22:57,875 All of a sudden, - And one day, he has brain cancer... 1733 01:22:57,959 --> 01:23:00,417 - And in his bones... - All of a sudden... 1734 01:23:00,500 --> 01:23:02,750 He was gone before I ever got to... 1735 01:23:02,834 --> 01:23:05,375 - My uncle... - My uncle... 1736 01:23:05,458 --> 01:23:08,417 (overlapping voices) 1737 01:23:08,500 --> 01:23:11,625 ♪ ♪ 1738 01:23:20,291 --> 01:23:22,083 Tyler: When I think of Theranos, 1739 01:23:22,166 --> 01:23:25,166 I really feel like there were two entirely different worlds. 1740 01:23:25,291 --> 01:23:26,917 There was the carpeted world, 1741 01:23:27,000 --> 01:23:29,625 and there was the tiled world. 1742 01:23:29,709 --> 01:23:32,917 In the carpeted world was where Elizabeth was a goddess. 1743 01:23:33,000 --> 01:23:36,417 Everyone almost worshiped the ground she walked on. 1744 01:23:36,500 --> 01:23:40,917 (cheering) - She could do no wrong. She was the next Steve Jobs. 1745 01:23:41,000 --> 01:23:43,208 Theranos was changing the world. 1746 01:23:43,291 --> 01:23:46,375 And then you go into the tiled side and nothing works. 1747 01:23:46,458 --> 01:23:48,166 We're on a sinking ship. 1748 01:23:48,250 --> 01:23:50,250 Everything's a lie. 1749 01:23:50,333 --> 01:23:52,250 Reconciling the differences between 1750 01:23:52,333 --> 01:23:54,917 those two worlds was really hard for me to do. 1751 01:23:55,000 --> 01:23:57,500 I knew Elizabeth personally from all these 1752 01:23:57,583 --> 01:24:00,208 interactions through my family, 1753 01:24:00,875 --> 01:24:03,166 so I really trusted her. I believed in her. 1754 01:24:03,250 --> 01:24:05,291 I would leave the tiled world thinking, 1755 01:24:05,375 --> 01:24:06,667 "Oh man, sinking ship." 1756 01:24:06,750 --> 01:24:08,559 And I would go have one conversation with Elizabeth. 1757 01:24:08,583 --> 01:24:11,000 Holmes: Theranos was founded with the goal 1758 01:24:11,083 --> 01:24:13,500 of creating a more human, actionable health experience. 1759 01:24:13,583 --> 01:24:16,000 (echoing): If you can begin to understand your body... 1760 01:24:16,083 --> 01:24:18,500 Tyler: And I would be so motivated to go back and work, 1761 01:24:18,583 --> 01:24:20,423 and I felt like I was changing the world again. 1762 01:24:20,500 --> 01:24:22,166 And I would go back into the tiled world, 1763 01:24:22,250 --> 01:24:24,583 and I would go, wait, what just happened? 1764 01:24:24,667 --> 01:24:27,542 You want it to be true so badly, 1765 01:24:27,625 --> 01:24:31,500 and even for me, I was working with these devices 1766 01:24:31,583 --> 01:24:32,834 every single day, 1767 01:24:32,917 --> 01:24:35,500 and she could still kind of convince me. 1768 01:24:35,583 --> 01:24:37,000 ♪ ♪ 1769 01:24:37,083 --> 01:24:38,834 When I think back on those conversations, 1770 01:24:38,917 --> 01:24:41,417 I just think, how did she do that? 1771 01:24:44,750 --> 01:24:47,542 Matje: You start to believe that maybe you're the one who's crazy. 1772 01:24:47,625 --> 01:24:49,625 Because everyone else thinks this woman's great, 1773 01:24:49,709 --> 01:24:51,267 and everyone else wants to throw money at her, 1774 01:24:51,291 --> 01:24:54,875 wants to be on board with this, and wants to be a part of it. 1775 01:24:54,959 --> 01:24:57,625 I mean, at the time, she was this iconic figure, 1776 01:24:57,709 --> 01:24:59,917 this woman in tech who was revolutionizing everything, 1777 01:25:00,000 --> 01:25:03,041 this Steve Jobs imitation. 1778 01:25:03,125 --> 01:25:05,458 Sometimes, you have to think maybe you're wrong. 1779 01:25:06,500 --> 01:25:08,792 (shutters clicking) 1780 01:25:10,959 --> 01:25:13,417 Philippides: At the time, you wondered whether 1781 01:25:13,500 --> 01:25:17,375 Elizabeth's connections were protecting her. 1782 01:25:17,458 --> 01:25:21,083 It kind of caused a bit of a crisis of faith 1783 01:25:21,166 --> 01:25:25,208 in, you know, just the power of government, and how 1784 01:25:25,291 --> 01:25:27,291 corrupt or not they were for me. 1785 01:25:27,375 --> 01:25:29,709 I thought that Theranos was going to get away with it. 1786 01:25:29,792 --> 01:25:32,834 (applause) 1787 01:25:32,917 --> 01:25:35,166 Biden: You're charging historically low prices, 1788 01:25:35,250 --> 01:25:37,917 which is a small fraction 1789 01:25:38,000 --> 01:25:40,000 of what is charged now, 1790 01:25:40,083 --> 01:25:42,250 and while maintaining the highest standards. 1791 01:25:42,333 --> 01:25:45,083 Carreyrou: With all her political connections, 1792 01:25:45,166 --> 01:25:48,125 she was chummy with the Obama administration. 1793 01:25:48,208 --> 01:25:50,083 The bet that she made was that 1794 01:25:50,166 --> 01:25:53,083 if she surrounded herself with powerful people, 1795 01:25:53,166 --> 01:25:56,333 the regulators wouldn't get confrontational with her. 1796 01:25:57,208 --> 01:25:58,542 The end game, I think, 1797 01:25:58,625 --> 01:26:01,500 it comes back to "fake it until you make it." 1798 01:26:02,667 --> 01:26:05,583 Elizabeth never gave up on her ultimate vision 1799 01:26:05,667 --> 01:26:08,250 to get the device not only in stores, 1800 01:26:08,333 --> 01:26:11,083 but ultimately, in the homes of patients. 1801 01:26:11,166 --> 01:26:13,750 She wanted to be like Apple and Steve Jobs, 1802 01:26:13,834 --> 01:26:18,208 in the sense that Apple devices are ubiquitous. 1803 01:26:18,291 --> 01:26:21,583 She wanted Edison devices in every home in America. 1804 01:26:24,166 --> 01:26:27,667 The only thing is you need FDA approval to make that happen. 1805 01:26:27,750 --> 01:26:30,166 (cheering) 1806 01:26:32,250 --> 01:26:33,709 (camera clicks) 1807 01:26:33,792 --> 01:26:37,250 Auletta: I did talk to the Chief Medical person at the FDA, 1808 01:26:37,333 --> 01:26:40,291 who expressed some skepticism. He said... 1809 01:26:40,375 --> 01:26:42,768 Auletta (on recording): "They have not provided enough information 1810 01:26:42,792 --> 01:26:46,250 for the agency to clear or approve the test." 1811 01:26:46,333 --> 01:26:47,709 Accurate? 1812 01:26:47,792 --> 01:26:49,250 Holmes: So, is this something that 1813 01:26:49,333 --> 01:26:51,792 - you wanted actually to use in the article? - Yes. 1814 01:26:51,875 --> 01:26:53,542 Holmes: Okay, so that's part of a challenge 1815 01:26:53,625 --> 01:26:55,875 because that our legal team is so concerned about this 1816 01:26:55,959 --> 01:26:58,250 because there's a lot of context behind that. 1817 01:26:58,333 --> 01:27:00,500 It creates... causes a lot of problems for us. 1818 01:27:00,583 --> 01:27:02,223 Auletta: That's why I'm asking for context. 1819 01:27:02,250 --> 01:27:05,333 Give it to me. I'm all ears. 1820 01:27:05,417 --> 01:27:07,500 Holmes: Okay, let me talk to our legal team. 1821 01:27:07,583 --> 01:27:10,750 Right now, they told me that I can't comment on this... 1822 01:27:10,834 --> 01:27:12,291 Narrator: Elizabeth was tap dancing 1823 01:27:12,375 --> 01:27:14,458 around her discussions with the FDA. 1824 01:27:14,542 --> 01:27:16,667 Rather than submit full applications, 1825 01:27:16,750 --> 01:27:20,458 Theranos flooded the FDA with vague exploratory letters, 1826 01:27:20,542 --> 01:27:22,125 trying to stall for time, 1827 01:27:22,208 --> 01:27:23,959 till the Edisons could do all the tests 1828 01:27:24,041 --> 01:27:25,834 that Theranos advertised, 1829 01:27:25,917 --> 01:27:27,500 and that could take years. 1830 01:27:27,583 --> 01:27:29,041 ♪ ♪ 1831 01:27:29,125 --> 01:27:32,000 In the meantime, the Theranos operation in Palo Alto 1832 01:27:32,083 --> 01:27:34,000 was being regulated by CMS, 1833 01:27:34,083 --> 01:27:37,375 the federal agency in charge of clinical labs. 1834 01:27:37,458 --> 01:27:40,125 Theranos was also playing games with them. 1835 01:27:40,208 --> 01:27:43,458 Even though some patient tests were performed on Edisons, 1836 01:27:43,542 --> 01:27:45,750 Theranos never reported those. 1837 01:27:45,834 --> 01:27:49,834 The company only gave CMS the data from third-party machines. 1838 01:27:50,583 --> 01:27:51,750 Cheung: The decision was 1839 01:27:51,834 --> 01:27:54,000 let's send what was on the Immulite 1840 01:27:54,083 --> 01:27:55,125 and on the Siemens Advia. 1841 01:27:55,208 --> 01:27:58,041 Let's not send the Edison results. 1842 01:27:58,125 --> 01:27:59,267 And that really freaked me out 1843 01:27:59,291 --> 01:28:00,875 because that was suggesting that, 1844 01:28:00,959 --> 01:28:03,625 okay, we didn't trust the Edison test. 1845 01:28:03,709 --> 01:28:05,709 And here, we were able to make that discernment 1846 01:28:05,792 --> 01:28:08,291 of what was the appropriate one to send, 1847 01:28:08,375 --> 01:28:10,458 but we weren't doing that with patients. 1848 01:28:12,291 --> 01:28:15,208 And when CMS came in for the inspection, 1849 01:28:15,291 --> 01:28:17,959 Sunny and Elizabeth only showed them the lab 1850 01:28:18,041 --> 01:28:20,458 with the Siemens Advia, the Immulite. 1851 01:28:20,542 --> 01:28:23,542 They never took them downstairs to the secondary lab, 1852 01:28:23,625 --> 01:28:27,125 where we processed all the fingersticks on the Edisons. 1853 01:28:27,208 --> 01:28:28,834 They strictly told us 1854 01:28:28,917 --> 01:28:30,375 to stay at your desk. 1855 01:28:30,458 --> 01:28:31,959 They didn't want any of us down there 1856 01:28:32,041 --> 01:28:33,917 'cause they were scared if the inspectors 1857 01:28:34,000 --> 01:28:37,417 saw what was going on, that could have huge consequences. 1858 01:28:37,500 --> 01:28:40,583 It just seemed scandalous to us. 1859 01:28:40,667 --> 01:28:44,542 Tyler: It was getting to the point where there was really no hope. 1860 01:28:44,625 --> 01:28:46,083 You know, I'd pretty much decided 1861 01:28:46,166 --> 01:28:48,166 that I was going to quit. 1862 01:28:51,750 --> 01:28:53,417 Right after I resigned, 1863 01:28:53,500 --> 01:28:57,208 I went to my grandfather's office at Stanford, 1864 01:28:57,291 --> 01:28:59,542 and actually showed him a lot of data, 1865 01:28:59,625 --> 01:29:02,041 and the discrepancy between what I was seeing 1866 01:29:02,125 --> 01:29:03,417 and what was being published, 1867 01:29:03,500 --> 01:29:06,083 and the explanation for those differences. 1868 01:29:06,166 --> 01:29:10,500 But he didn't really seem to believe what I was saying, 1869 01:29:10,583 --> 01:29:12,500 and he said, "Elizabeth has told me that 1870 01:29:12,583 --> 01:29:15,375 "Theranos really can do all the things that it says it can do. 1871 01:29:15,458 --> 01:29:18,041 "Theranos is more accurate, going to change the world. 1872 01:29:18,125 --> 01:29:20,375 "They're trying to convince me that you're stupid. 1873 01:29:20,458 --> 01:29:21,935 "They can't convince me that you're stupid, 1874 01:29:21,959 --> 01:29:23,875 "but they can convince me that you're wrong. 1875 01:29:23,959 --> 01:29:25,709 "And I do think that you're wrong, 1876 01:29:25,792 --> 01:29:27,959 so move on with your life." 1877 01:29:28,041 --> 01:29:30,375 ♪ ♪ 1878 01:29:31,333 --> 01:29:33,375 A few months afterwards, 1879 01:29:33,458 --> 01:29:36,166 John Carreyou from the Wall Street Journal 1880 01:29:36,250 --> 01:29:39,291 sent me a message on LinkedIn. 1881 01:29:39,375 --> 01:29:41,333 I was definitely in a panic. 1882 01:29:41,417 --> 01:29:42,726 There were confidentiality agreements 1883 01:29:42,750 --> 01:29:44,390 that I had signed while I was at Theranos. 1884 01:29:44,458 --> 01:29:47,291 So, I went and bought a burner phone with cash. 1885 01:29:47,375 --> 01:29:50,500 (phone dialing) - I called him, and in that phone call, 1886 01:29:50,583 --> 01:29:52,500 I decided that I wanted to help him out. 1887 01:29:52,583 --> 01:29:53,834 ♪ ♪ 1888 01:29:53,917 --> 01:29:57,667 I said, my grandfather made it through Watergate, 1889 01:29:57,750 --> 01:29:59,166 and the Iran-Contra scandal 1890 01:29:59,250 --> 01:30:02,583 with his integrity completely intact. 1891 01:30:02,667 --> 01:30:04,709 Once he becomes aware of the fraud that's happening, 1892 01:30:04,792 --> 01:30:07,667 he will do everything he can to make things right. 1893 01:30:07,750 --> 01:30:09,267 And I want to give him that opportunity 1894 01:30:09,291 --> 01:30:12,917 because, I think he was 94, 95 at the time. 1895 01:30:14,375 --> 01:30:16,667 So, I met with John in person, 1896 01:30:16,750 --> 01:30:19,375 and then he sent Theranos 1897 01:30:19,458 --> 01:30:21,500 some prodding questions, 1898 01:30:21,583 --> 01:30:24,291 and there was just one number in there. 1899 01:30:24,375 --> 01:30:27,667 42.9% that I had calculated for one of these tests, 1900 01:30:27,750 --> 01:30:31,166 that was also in an e-mail that I had sent to Elizabeth. 1901 01:30:31,250 --> 01:30:33,291 ♪ ♪ 1902 01:30:35,458 --> 01:30:36,875 About a month after that, 1903 01:30:36,959 --> 01:30:39,542 I went to go have dinner with my parents. 1904 01:30:39,625 --> 01:30:41,542 I walk in the door, and my dad says, 1905 01:30:41,625 --> 01:30:44,375 "Have you been speaking to a Wall Street Journal reporter?" 1906 01:30:44,458 --> 01:30:47,375 And I said yes. (laughs) 1907 01:30:47,458 --> 01:30:49,250 And he said, "Well, they know." 1908 01:30:49,333 --> 01:30:51,792 (pedestrians chattering) 1909 01:30:55,041 --> 01:30:56,458 Cheung: After I leave Theranos, 1910 01:30:56,542 --> 01:30:59,875 I kind of want to be as far away from them as possible. 1911 01:30:59,959 --> 01:31:02,792 I was working another job, and at this point, 1912 01:31:02,875 --> 01:31:06,250 I had talked to John Carreyrou from the Wall Street Journal, 1913 01:31:06,333 --> 01:31:08,542 who was doing an investigative report. 1914 01:31:11,542 --> 01:31:13,917 So, I'm at work one day. I'm working late, 1915 01:31:14,000 --> 01:31:15,792 and two of my colleagues are leaving, 1916 01:31:15,875 --> 01:31:17,917 and I'm going to be the only one in the building. 1917 01:31:18,000 --> 01:31:20,125 And they look outside, and they're like, "Hey, Erika. 1918 01:31:20,208 --> 01:31:22,008 "There's been this guy who's just been sitting 1919 01:31:22,041 --> 01:31:25,750 in our parking lot for the whole day." 1920 01:31:25,834 --> 01:31:28,458 And that's very unusual. 1921 01:31:28,542 --> 01:31:31,333 (walking footsteps) 1922 01:31:31,417 --> 01:31:34,083 - So, they walk me to my car, - (car alarm beeps) 1923 01:31:34,166 --> 01:31:37,500 and then this guy comes up, and he gives me this letter. 1924 01:31:37,583 --> 01:31:40,166 And it has the address of this temporary home 1925 01:31:40,250 --> 01:31:43,750 that I'm staying at, so no one knows this address. 1926 01:31:43,834 --> 01:31:47,166 And I open it, and it's a letter from David Boies. 1927 01:31:48,000 --> 01:31:50,458 "If you don't come forward with 1928 01:31:50,542 --> 01:31:53,291 "X, Y, and Z document, or report these people, 1929 01:31:53,375 --> 01:31:55,875 there's a potential that we could sue you." 1930 01:31:57,166 --> 01:31:59,333 It was quite, quite scary for me. 1931 01:31:59,417 --> 01:32:01,333 Especially coming from a position of, 1932 01:32:01,417 --> 01:32:03,834 what, I was 23 at that point? 1933 01:32:03,917 --> 01:32:06,375 You know, I had not really 1934 01:32:06,458 --> 01:32:09,333 not really any money to spend on lawyers or anything. 1935 01:32:09,417 --> 01:32:11,166 I was really freaked out. 1936 01:32:14,250 --> 01:32:16,250 Carreyrou: I'd been asking for an interview 1937 01:32:16,333 --> 01:32:18,166 with Elizabeth for several months, 1938 01:32:18,250 --> 01:32:21,083 and they were giving me the runaround. 1939 01:32:21,166 --> 01:32:24,166 Finally, in June 2015, 1940 01:32:24,250 --> 01:32:27,583 we agreed that we'd have a meeting at the Journal offices. 1941 01:32:28,875 --> 01:32:31,834 This Theranos delegation comes in, it's seven people, 1942 01:32:31,917 --> 01:32:33,750 four of whom are lawyers, 1943 01:32:33,834 --> 01:32:37,875 led by David Boies, and one of the other lawyers is Heather King... 1944 01:32:37,959 --> 01:32:40,083 Heather has just joined us as our general counsel. 1945 01:32:40,166 --> 01:32:43,208 Carreyrou: ...who had been a Boies Schiller partner, 1946 01:32:43,291 --> 01:32:45,792 former Hillary Clinton aide. 1947 01:32:45,875 --> 01:32:49,000 Couple of minutes into the meeting, Heather King 1948 01:32:49,083 --> 01:32:51,500 puts a little tape recorder down on the table. 1949 01:32:51,583 --> 01:32:52,875 Another Boies Schiller attorney 1950 01:32:52,959 --> 01:32:54,875 put a little tape recorder 1951 01:32:54,959 --> 01:32:56,667 on the other end of the conference table, 1952 01:32:56,750 --> 01:32:58,250 and it was very clear 1953 01:32:58,333 --> 01:33:00,000 that they were approaching this 1954 01:33:00,083 --> 01:33:02,417 as a deposition in a legal proceeding. 1955 01:33:02,500 --> 01:33:05,417 If they were going to record, then I was going to record as well. 1956 01:33:05,500 --> 01:33:07,959 King (on recording): Okay, so, you know, we're here today 1957 01:33:08,041 --> 01:33:11,083 to do our part to help educate you on what 1958 01:33:11,166 --> 01:33:12,750 I, at least, believe are some, 1959 01:33:12,834 --> 01:33:15,792 you know, false premises upon which the questions are based. 1960 01:33:15,875 --> 01:33:19,208 They're very serious questions, and there's some very serious 1961 01:33:19,291 --> 01:33:22,083 allegations in those questions. 1962 01:33:22,166 --> 01:33:24,083 I also turn to David Boies. 1963 01:33:24,166 --> 01:33:26,250 David attends all the board meetings. 1964 01:33:26,333 --> 01:33:29,375 Boies: We wouldn't be here, spend all this time and effort 1965 01:33:29,458 --> 01:33:31,375 if the, you know, 1966 01:33:31,458 --> 01:33:34,267 - we've got a technology... - Carreyrou: So, why don't we discuss it more freely? 1967 01:33:34,291 --> 01:33:36,625 Boies: Yeah, because it's trade secret! That's why! 1968 01:33:36,709 --> 01:33:38,542 And because you won't sign an NDA! 1969 01:33:38,625 --> 01:33:40,184 Carreyrou: Is there really new technology? 1970 01:33:40,208 --> 01:33:41,417 Jay Conti: That's the point. 1971 01:33:41,500 --> 01:33:43,041 Boies: Is it really new technology... 1972 01:33:43,125 --> 01:33:45,125 This something no one's been able to do before. 1973 01:33:45,208 --> 01:33:47,375 Okay? Theranos is doing it. 1974 01:33:47,458 --> 01:33:51,500 (projector whirring) - And unless it's magic, it's a new technology. 1975 01:33:51,583 --> 01:33:53,875 I knew that most of their blood tests 1976 01:33:53,959 --> 01:33:56,375 were run on commercial analyzers 1977 01:33:56,458 --> 01:33:58,417 made by third party companies. 1978 01:33:58,500 --> 01:34:01,375 And so I said, how can this even fall 1979 01:34:01,458 --> 01:34:03,834 under the bucket of trade secrets, 1980 01:34:03,917 --> 01:34:05,583 if these aren't even Theranos machines. 1981 01:34:05,667 --> 01:34:08,417 Carreyrou: Are you saying that the trade secrets also covers 1982 01:34:08,500 --> 01:34:10,583 the way in which you run a blood sample 1983 01:34:10,667 --> 01:34:12,000 on the Siemens Advia? 1984 01:34:12,083 --> 01:34:14,166 Boies: I think, I don't know the answer to that, 1985 01:34:14,250 --> 01:34:16,917 but I can tell you that it could or it could not. 1986 01:34:17,000 --> 01:34:19,680 King: It just feels like you want us to give you the formula for Coke 1987 01:34:19,750 --> 01:34:21,685 in order to convince you that it doesn't contain arsenic. 1988 01:34:21,709 --> 01:34:23,393 Conti: Nobody's asked for the formula for Coke. 1989 01:34:23,417 --> 01:34:25,166 We're looking for a generic explanation. 1990 01:34:25,250 --> 01:34:27,083 Boies: You don't need to know how they work. 1991 01:34:27,166 --> 01:34:30,834 (overlapping, indistinct arguing) 1992 01:34:30,917 --> 01:34:33,166 Conti: It sounds like the Wizard of Oz... 1993 01:34:33,291 --> 01:34:35,250 Carreyrou: So, we went around in circles, 1994 01:34:35,333 --> 01:34:39,000 and the fact that they were stonewalling 1995 01:34:39,083 --> 01:34:41,917 in such a strong way, 1996 01:34:42,000 --> 01:34:44,583 made me feel like we were on the right track. 1997 01:34:44,667 --> 01:34:48,375 King: You know, it seems apparent to us that certainly 1998 01:34:48,458 --> 01:34:51,458 one of your key sources is a young man named Tyler Shultz 1999 01:34:51,542 --> 01:34:53,667 because the concerns that you are raising 2000 01:34:53,750 --> 01:34:55,166 precisely are concerns 2001 01:34:55,250 --> 01:34:57,000 that he raised in the very brief time 2002 01:34:57,083 --> 01:34:58,667 that he was at our company. 2003 01:34:58,750 --> 01:35:00,393 I don't know, I don't remember his exact words, 2004 01:35:00,417 --> 01:35:02,417 but he said, "Well, they know. They know." 2005 01:35:02,500 --> 01:35:04,917 So, I called my grandfather and he said, 2006 01:35:05,000 --> 01:35:08,208 "Elizabeth tells me that you've been speaking... 2007 01:35:08,291 --> 01:35:10,500 "that you've been giving trade secrets away 2008 01:35:10,583 --> 01:35:12,208 "to the Wall Street Journal, 2009 01:35:12,291 --> 01:35:15,542 "and, you know, if this story gets published, 2010 01:35:15,625 --> 01:35:19,208 "that essentially, your career will be ruined, but... 2011 01:35:19,291 --> 01:35:21,667 "there's a one-page confidentiality agreement 2012 01:35:21,750 --> 01:35:23,709 you can sign to just make it all go away." 2013 01:35:23,792 --> 01:35:27,834 And so, I go to his house the next morning, and he said, "Okay, well, 2014 01:35:27,917 --> 01:35:31,000 there are actually two Theranos lawyers here right now." 2015 01:35:31,083 --> 01:35:32,625 I was... 2016 01:35:32,709 --> 01:35:35,333 extremely nervous about what was going to happen, 2017 01:35:35,417 --> 01:35:37,250 very uncomfortable with the whole situation. 2018 01:35:37,333 --> 01:35:39,500 They come in and they give me 2019 01:35:39,583 --> 01:35:43,375 a notice to appear in court in about 36 hours, 2020 01:35:43,458 --> 01:35:46,125 a temporary restraining order, 2021 01:35:46,208 --> 01:35:49,917 and a letter signed by David Boies. 2022 01:35:50,000 --> 01:35:53,083 They really made me feel like I was alone. 2023 01:35:53,166 --> 01:35:55,500 I was the underdog. I was going to get crushed. 2024 01:35:55,583 --> 01:35:57,750 Lawyer: Good morning, Mr. Secretary. 2025 01:35:57,834 --> 01:35:59,083 Good morning. 2026 01:35:59,166 --> 01:36:02,208 Do you recall a time when Tyler came to your home, 2027 01:36:02,291 --> 01:36:03,500 and there were some attorneys 2028 01:36:03,583 --> 01:36:05,250 from the Boies Schiller firm there? 2029 01:36:05,333 --> 01:36:07,500 I wouldn't call them attorneys. 2030 01:36:07,583 --> 01:36:11,083 The man was some sort of an animal. 2031 01:36:12,166 --> 01:36:14,250 Wild animal, 2032 01:36:14,333 --> 01:36:17,208 and he assaulted my grandson. 2033 01:36:17,291 --> 01:36:20,041 Was one of the dumbest things I've ever observed. 2034 01:36:20,125 --> 01:36:22,959 When you say that the man assaulted 2035 01:36:23,041 --> 01:36:24,250 your grandson, can you be... 2036 01:36:24,333 --> 01:36:27,333 Verbally, verbally, he just went after him. 2037 01:36:27,417 --> 01:36:28,792 If it hadn't ended when it did, 2038 01:36:28,875 --> 01:36:30,750 my wife was about to pick an iron out, 2039 01:36:30,834 --> 01:36:33,959 hand iron right out of the fireplace and clobber him. 2040 01:36:36,625 --> 01:36:38,750 Tyler: My grandfather physically separates us, 2041 01:36:38,834 --> 01:36:40,959 and puts the Theranos lawyers in the living room, 2042 01:36:41,041 --> 01:36:42,417 and I'm in the dining room, 2043 01:36:42,500 --> 01:36:44,625 and he's going between the two rooms negotiating... 2044 01:36:44,709 --> 01:36:47,750 - Gibney: Like a Secretary of State. - Like a Secretary of State. 2045 01:36:47,834 --> 01:36:52,500 And my grandfather seemed like he had grown... 2046 01:36:52,583 --> 01:36:55,917 that his allegiance to Elizabeth and Theranos had grown even stronger. 2047 01:36:56,000 --> 01:36:58,375 Lawyer: Do you have a high opinion of Ms. Holmes? 2048 01:36:58,458 --> 01:37:00,083 Yes. 2049 01:37:00,166 --> 01:37:02,792 Do you believe that Ms. Holmes was truthful 2050 01:37:02,875 --> 01:37:05,208 with you in all of your interactions with her? 2051 01:37:05,291 --> 01:37:06,792 Yes, I think so. 2052 01:37:06,875 --> 01:37:08,959 In any of her interactions with you, 2053 01:37:09,041 --> 01:37:11,583 did Ms. Holmes ever do anything 2054 01:37:11,667 --> 01:37:13,083 to give you reason to believe 2055 01:37:13,166 --> 01:37:15,125 that she was trying to deceive you? 2056 01:37:15,208 --> 01:37:16,333 No. 2057 01:37:18,125 --> 01:37:19,417 Yeah, that's when... 2058 01:37:19,500 --> 01:37:22,291 lawyers became a really big part of my life. 2059 01:37:22,375 --> 01:37:24,458 They were threatening to sue me for 2060 01:37:24,542 --> 01:37:26,458 violating my nondisclosure agreement, 2061 01:37:26,542 --> 01:37:28,625 for giving up trade secrets. 2062 01:37:28,709 --> 01:37:31,667 Many times, I had written notices to appear in court, 2063 01:37:31,750 --> 01:37:34,875 and at the last minute, they would cancel it. 2064 01:37:35,834 --> 01:37:37,083 Overall, my parents 2065 01:37:37,166 --> 01:37:40,667 spent between 400 and $500,000 2066 01:37:40,750 --> 01:37:42,709 in legal fees. 2067 01:37:42,792 --> 01:37:44,250 It was getting to the point where 2068 01:37:44,333 --> 01:37:47,417 we needed to find money somewhere, so they... 2069 01:37:47,500 --> 01:37:49,250 they said that they would sell their house 2070 01:37:49,333 --> 01:37:51,000 to keep fighting this legal battle. 2071 01:37:51,083 --> 01:37:53,458 (pedestrians chattering) 2072 01:37:53,542 --> 01:37:55,834 Cheung: So, I ended up talking to a lawyer, 2073 01:37:55,917 --> 01:37:57,792 and they said, they're trying to scare you. 2074 01:37:57,875 --> 01:38:01,208 And he said, one of the options that you can do is you can whistle-blow. 2075 01:38:01,333 --> 01:38:04,458 You could be protected if you talked to a regulatory agency. 2076 01:38:04,542 --> 01:38:09,125 And I'm like, what regulatory agency? How do you that? 2077 01:38:09,208 --> 01:38:12,125 I've been nervous to send or even write this letter. 2078 01:38:12,208 --> 01:38:16,166 Theranos takes confidentiality and secrecy to an extreme level... 2079 01:38:16,250 --> 01:38:18,101 (statements overlapping): Mistakes always happen in a clinical lab, 2080 01:38:18,125 --> 01:38:20,875 but what went on in Theranos was complete negligence 2081 01:38:20,959 --> 01:38:23,250 and honestly felt criminal in many ways. 2082 01:38:23,333 --> 01:38:25,834 Upper level management constantly made excuses 2083 01:38:25,917 --> 01:38:28,500 for their misgivings... but they continue to... 2084 01:38:28,583 --> 01:38:30,750 (statements overlapping) 2085 01:38:32,750 --> 01:38:36,583 I don't feel like it's sort of a cold-blooded scam, right? 2086 01:38:37,417 --> 01:38:39,041 It just seems it started off 2087 01:38:39,125 --> 01:38:41,000 as something small, like one lie, 2088 01:38:41,083 --> 01:38:44,333 and snowballed into this really 2089 01:38:44,417 --> 01:38:46,750 crazy situation. 2090 01:38:46,834 --> 01:38:48,333 ♪ Can't touch this ♪ 2091 01:38:48,417 --> 01:38:50,333 (crowd cheering) 2092 01:38:50,417 --> 01:38:52,083 ♪ Can't touch this ♪ 2093 01:38:54,000 --> 01:38:55,417 ♪ Can't touch this ♪ 2094 01:38:55,500 --> 01:38:57,542 ♪ Oh, oh, oh, oh, oh, oh, oh ♪ 2095 01:38:57,625 --> 01:38:58,792 ♪ Can't touch this ♪ 2096 01:38:58,875 --> 01:39:00,083 ♪ Oh, oh, oh, oh, oh, oh, oh ♪ 2097 01:39:00,166 --> 01:39:02,166 ♪ My, my, my music ♪ 2098 01:39:02,250 --> 01:39:05,125 ♪ Keeps me so hard, makes me say oh my Lord ♪ 2099 01:39:05,208 --> 01:39:06,875 ♪ Thank you for blessing me ♪ 2100 01:39:06,959 --> 01:39:08,875 ♪ With a mind to rhyme and two hype feet ♪ 2101 01:39:08,959 --> 01:39:10,667 ♪ That's good when you know you're down ♪ 2102 01:39:10,750 --> 01:39:12,625 ♪ A super dope homeboy from the Oaktown ♪ 2103 01:39:12,709 --> 01:39:15,041 So, what do you guys think about the FDA clearance? 2104 01:39:15,125 --> 01:39:16,375 (cheering) 2105 01:39:16,458 --> 01:39:19,041 (whistling) 2106 01:39:19,125 --> 01:39:20,875 ♪ Can't touch this ♪ 2107 01:39:20,959 --> 01:39:24,041 O'Neill: It was around the 4th of July of 2015. 2108 01:39:24,125 --> 01:39:26,375 It was euphoria at the company. 2109 01:39:26,458 --> 01:39:29,333 It was, you know... 2110 01:39:29,417 --> 01:39:30,625 ♪ Bust the funky lyrics ♪ 2111 01:39:30,709 --> 01:39:32,208 ♪ Fresh new kicks and pants ♪ 2112 01:39:32,291 --> 01:39:34,226 ♪ You got it like that, now you know you wanna dance ♪ 2113 01:39:34,250 --> 01:39:35,959 This is a very meaningful milestone 2114 01:39:36,041 --> 01:39:37,417 for both Elizabeth and Sunny. 2115 01:39:37,500 --> 01:39:39,875 It felt like a great victory at the time. 2116 01:39:39,959 --> 01:39:42,709 (music playing) 2117 01:39:42,792 --> 01:39:46,083 Narrator: It was a big celebration for a little victory. 2118 01:39:46,166 --> 01:39:47,917 The FDA had finally approved 2119 01:39:48,000 --> 01:39:50,333 one rarely used test for herpes 2120 01:39:50,417 --> 01:39:53,000 to be run on an Edison prototype. 2121 01:39:53,083 --> 01:39:54,959 That was too little too late for Walgreens, 2122 01:39:55,041 --> 01:39:57,917 which put the brakes on opening new Wellness Centers. 2123 01:39:58,000 --> 01:39:59,583 And while Theranos had boasted revenues 2124 01:39:59,667 --> 01:40:02,709 of more than a billion dollars for 2015, 2125 01:40:02,792 --> 01:40:06,208 the actual cash in the door was only a few hundred thousand. 2126 01:40:06,291 --> 01:40:07,625 ♪ ♪ 2127 01:40:07,709 --> 01:40:10,500 But Elizabeth and Sunny were not backing down. 2128 01:40:10,583 --> 01:40:13,208 Balwani: We are going to send a message to Quest Diagnostics. 2129 01:40:13,291 --> 01:40:16,083 Remember, these are the guys who are after us, 2130 01:40:16,166 --> 01:40:18,326 and they're attacking the work that you guys are doing. 2131 01:40:18,375 --> 01:40:20,291 - Are you ready? - Crowd: Yeah! 2132 01:40:20,375 --> 01:40:22,291 Balwani: Okay. One, 2133 01:40:22,375 --> 01:40:23,875 two, three. 2134 01:40:23,959 --> 01:40:25,333 All: Fuck you! 2135 01:40:25,417 --> 01:40:26,875 (applause) 2136 01:40:29,542 --> 01:40:31,583 ♪ ♪ 2137 01:40:47,542 --> 01:40:48,709 (phone beeps) 2138 01:40:50,083 --> 01:40:52,959 Parloff: I saw the alert when I got up in the morning, 2139 01:40:53,041 --> 01:40:55,458 and I read it by my bed. 2140 01:40:55,542 --> 01:40:58,667 It had this really understated headline. 2141 01:40:58,750 --> 01:41:00,500 ♪ ♪ 2142 01:41:00,583 --> 01:41:03,959 But the contents of the article were just devastating. 2143 01:41:08,709 --> 01:41:10,750 ♪ ♪ 2144 01:41:13,792 --> 01:41:17,583 When I got to work, I read it a couple more times. 2145 01:41:18,041 --> 01:41:21,667 Suddenly, all of the trade secret stuff made sense. 2146 01:41:21,750 --> 01:41:24,333 Oh, I see. It's not a trade secret. 2147 01:41:24,417 --> 01:41:26,000 Um... 2148 01:41:26,083 --> 01:41:28,792 It's a different kind of secret, and, um... 2149 01:41:30,625 --> 01:41:32,667 ♪ ♪ 2150 01:41:36,542 --> 01:41:40,375 Stewart: I did not know that Siemens were being used 2151 01:41:40,458 --> 01:41:43,208 until after the article hit. 2152 01:41:43,291 --> 01:41:45,375 And then that kind of explains 2153 01:41:45,458 --> 01:41:47,458 why we were doing venipuncture, 2154 01:41:47,542 --> 01:41:50,625 as opposed to the fingerstick collection. 2155 01:41:50,709 --> 01:41:55,083 I then started... revamping my résumé. 2156 01:41:55,166 --> 01:41:57,000 (laughing) 2157 01:41:57,083 --> 01:41:58,417 I'm sorry, but I did! 2158 01:41:58,500 --> 01:42:01,625 ♪ ♪ 2159 01:42:04,250 --> 01:42:06,208 Tyler: I was lucky when the Wall Street Journal 2160 01:42:06,291 --> 01:42:08,542 actually ended up publishing their article 2161 01:42:08,625 --> 01:42:09,875 because once that happened, 2162 01:42:09,959 --> 01:42:12,208 Theranos' efforts were focused elsewhere. 2163 01:42:12,333 --> 01:42:14,291 We never went to court. We never... 2164 01:42:14,375 --> 01:42:16,709 had any sort of settlement. It just kind of died. 2165 01:42:19,041 --> 01:42:21,667 O'Neill: The fate and future of the company was at stake. 2166 01:42:22,875 --> 01:42:26,083 So, we gathered in our cafeteria. 2167 01:42:26,166 --> 01:42:30,250 Elizabeth and Sunny spoke to what was happening, 2168 01:42:30,333 --> 01:42:32,291 and that these allegations are not true. 2169 01:42:33,375 --> 01:42:35,667 And then, Elizabeth made a comment about 2170 01:42:35,750 --> 01:42:39,041 taking on the Wall Street Journal as a fight. 2171 01:42:39,166 --> 01:42:41,250 ♪ ♪ 2172 01:42:45,208 --> 01:42:46,333 Carreyrou: I knew immediately 2173 01:42:46,417 --> 01:42:48,500 when I woke up that day that the article 2174 01:42:48,583 --> 01:42:51,250 was having impact because e-mails from readers 2175 01:42:51,375 --> 01:42:53,709 and from colleagues were flowing in to my inbox. 2176 01:42:53,792 --> 01:42:55,917 And I was also getting asked 2177 01:42:56,000 --> 01:42:57,959 to do various media interviews. 2178 01:42:58,041 --> 01:42:59,601 Newsman: New Wall Street Journal story 2179 01:42:59,667 --> 01:43:01,750 by John Carreyrou. Thanks for joining us, John... 2180 01:43:01,834 --> 01:43:04,166 Carreyrou: The article was a wake-up call 2181 01:43:04,250 --> 01:43:06,333 for Silicon Valley. 2182 01:43:06,417 --> 01:43:08,875 This sort of gold rush had been going on. 2183 01:43:08,959 --> 01:43:10,959 These unicorns had been created. 2184 01:43:11,041 --> 01:43:14,625 Companies that have valuations of more than a billion dollars. 2185 01:43:14,709 --> 01:43:16,625 They were staying private much longer 2186 01:43:16,709 --> 01:43:20,250 than start-ups had in the dot-com boom of the late '90s. 2187 01:43:20,375 --> 01:43:23,166 And as a result, they were able to be less transparent 2188 01:43:23,250 --> 01:43:25,083 than companies that have to report 2189 01:43:25,208 --> 01:43:26,917 to investors every quarter. 2190 01:43:27,000 --> 01:43:29,750 And I think suddenly there was a realization in Silicon Valley 2191 01:43:29,834 --> 01:43:33,750 that this has allowed fraud to thrive. 2192 01:43:33,834 --> 01:43:36,917 ♪ ♪ 2193 01:43:38,625 --> 01:43:40,625 Parloff: Obviously, when I called Theranos 2194 01:43:40,750 --> 01:43:42,470 and tried to speak to Elizabeth and was told 2195 01:43:42,542 --> 01:43:45,792 that she was going to be unavailable all day. 2196 01:43:45,917 --> 01:43:50,375 She was being inducted into the Harvard Medical School Board of Fellows. 2197 01:43:52,458 --> 01:43:56,166 And, um... I was just stunned. 2198 01:43:56,250 --> 01:43:57,959 I was thinking in my mind, 2199 01:43:58,041 --> 01:44:00,083 the Wall Street Journal has just said... 2200 01:44:01,208 --> 01:44:03,792 that you're a fraud, and that you're company is a fraud, 2201 01:44:03,917 --> 01:44:07,583 and the company I put on the cover of a magazine is a fraud, 2202 01:44:08,500 --> 01:44:10,500 and you're going to spend... 2203 01:44:13,750 --> 01:44:15,417 the whole day... 2204 01:44:18,333 --> 01:44:21,250 hiding out at this, uh... 2205 01:44:24,041 --> 01:44:25,625 at this, uh... 2206 01:44:27,917 --> 01:44:30,542 honorary horseshit, you know? 2207 01:44:30,625 --> 01:44:32,500 You need to get out here, 2208 01:44:32,583 --> 01:44:34,667 and go through this article, 2209 01:44:34,750 --> 01:44:37,333 paragraph by paragraph, 2210 01:44:37,417 --> 01:44:41,208 explaining what the fuck's going on at your company. 2211 01:44:41,834 --> 01:44:44,333 (bell rings) 2212 01:44:44,417 --> 01:44:45,685 Jim Cramer: Your article was pretty brutal, 2213 01:44:45,709 --> 01:44:47,226 but here on Mad Money, we know something. 2214 01:44:47,250 --> 01:44:49,959 We know that there are two sides to every single story. 2215 01:44:50,041 --> 01:44:52,458 Coming to us this afternoon from Boston, 2216 01:44:52,542 --> 01:44:54,434 where she's attending a meeting of the Board of Fellows 2217 01:44:54,458 --> 01:44:57,291 at Harvard Medical School, to give her a chance to answer 2218 01:44:57,375 --> 01:44:59,083 the charges raised in the article. 2219 01:44:59,166 --> 01:45:01,750 Ms. Holmes, welcome back to Mad Money. 2220 01:45:01,834 --> 01:45:03,250 It's great to be here, thank you. 2221 01:45:03,333 --> 01:45:06,083 This is what happens when you work to change things, 2222 01:45:06,166 --> 01:45:09,375 and first they think you're crazy, then they fight you. 2223 01:45:09,458 --> 01:45:11,709 And then, all of a sudden, you change the world. 2224 01:45:11,792 --> 01:45:14,083 And, um, I have to say, 2225 01:45:14,166 --> 01:45:16,542 I personally was shocked to see that 2226 01:45:16,625 --> 01:45:18,875 the Journal would publish something like this. 2227 01:45:18,959 --> 01:45:21,458 Every single one of the sources that 2228 01:45:21,542 --> 01:45:24,458 we spoke with who the Journal had contacted told us 2229 01:45:24,542 --> 01:45:27,333 that the statements that were being attributed to them 2230 01:45:27,417 --> 01:45:29,333 were false or misleading... 2231 01:45:29,417 --> 01:45:34,375 Carreyrou: She decided to come out and address my story and rebut it. 2232 01:45:34,458 --> 01:45:37,709 Theranos issued a press release calling my reporting false, 2233 01:45:37,792 --> 01:45:40,500 and they were threatening us with litigation. 2234 01:45:40,583 --> 01:45:43,125 Boies: The journalism here has been so bad, 2235 01:45:43,208 --> 01:45:44,750 they deserve to be sued, 2236 01:45:44,834 --> 01:45:47,917 but lawsuits rarely resolve issues. 2237 01:45:48,000 --> 01:45:50,542 What's going to resolve this issue is the science, 2238 01:45:50,625 --> 01:45:52,125 the marketplace. 2239 01:45:52,208 --> 01:45:55,500 Um, the company has been successful in Arizona. 2240 01:45:56,375 --> 01:45:58,125 Doctors are happy, patients are happy... 2241 01:45:58,208 --> 01:46:00,917 Narrator: Doctors and patients were not happy. 2242 01:46:01,000 --> 01:46:03,500 The FDA was so worried about patient safety 2243 01:46:03,583 --> 01:46:05,750 that it banned the use of the nanotainer, 2244 01:46:05,834 --> 01:46:09,417 putting an end to all fingerstick tests at Walgreens. 2245 01:46:09,500 --> 01:46:12,875 CMS conducted a surprise inspection of the Theranos lab, 2246 01:46:12,959 --> 01:46:15,959 and found the blood testing so inaccurate, 2247 01:46:16,041 --> 01:46:18,542 that it posed a threat to patient safety, 2248 01:46:18,625 --> 01:46:20,583 likely to cause serious injury, 2249 01:46:20,667 --> 01:46:22,500 harm, or death. 2250 01:46:22,583 --> 01:46:26,291 CMS revoked the lab's license to operate. 2251 01:46:26,375 --> 01:46:28,625 The letter that prompted CMS to act 2252 01:46:28,709 --> 01:46:31,000 - came from Erika Cheung. - (laughs) 2253 01:46:32,041 --> 01:46:33,393 Cheung: You know, in the end for me, 2254 01:46:33,417 --> 01:46:35,583 it was a bit of a mixed feeling. 2255 01:46:35,667 --> 01:46:38,667 I was really excited because the truth finally got out. 2256 01:46:38,750 --> 01:46:42,208 But then also, a bit of sadness in the fact that, um... 2257 01:46:42,291 --> 01:46:44,625 you know, we all really wanted that project to succeed. 2258 01:46:44,709 --> 01:46:48,083 Gibney: Have you been able to win your argument 2259 01:46:48,166 --> 01:46:50,417 with your grandfather in terms of persuading him 2260 01:46:50,500 --> 01:46:52,291 of the problems at Theranos? 2261 01:46:52,375 --> 01:46:56,041 He said that he had no idea how much deception there was, 2262 01:46:56,125 --> 01:46:58,667 and that he was proud of me. 2263 01:46:58,750 --> 01:47:00,166 Yeah. 2264 01:47:00,250 --> 01:47:04,917 Yeah, I'm glad he finally really gets it. 2265 01:47:05,917 --> 01:47:08,417 ♪ ♪ 2266 01:47:08,500 --> 01:47:11,250 Carreyrou: There was a Journal technology conference 2267 01:47:11,333 --> 01:47:15,291 taking place in Laguna Beach in late October 2015, 2268 01:47:15,375 --> 01:47:18,333 and it so happened that more than a year prior 2269 01:47:18,417 --> 01:47:21,500 it had lined up Elizabeth Holmes as one of the speakers. 2270 01:47:21,583 --> 01:47:24,834 Could you get specific on the key points today... 2271 01:47:24,959 --> 01:47:27,250 Carreyrou: And not only did she come, she came swinging. 2272 01:47:27,333 --> 01:47:30,208 The tests that are offered are of the highest quality. 2273 01:47:30,250 --> 01:47:33,709 We know what we're doing, and we're very proud of it. 2274 01:47:33,792 --> 01:47:37,000 Were there situations in which you, uh, 2275 01:47:37,125 --> 01:47:39,291 had to dilute blood samples? 2276 01:47:39,375 --> 01:47:40,959 What the Journal described 2277 01:47:41,000 --> 01:47:42,667 that we take a sample, dilute it, 2278 01:47:42,792 --> 01:47:44,667 and put it on a commercial analyzer 2279 01:47:44,792 --> 01:47:47,291 is inaccurate, and that's not what we do. 2280 01:47:47,375 --> 01:47:49,101 Carreyrou: I watched it on the Journal website, 2281 01:47:49,125 --> 01:47:51,959 and I couldn't believe what she just said. 2282 01:47:52,000 --> 01:47:55,083 There was no question that that was a huge lie 2283 01:47:55,125 --> 01:47:56,875 because they were absolutely doing it. 2284 01:47:56,959 --> 01:47:59,250 We don't actually use the technology 2285 01:47:59,333 --> 01:48:01,875 that's being referred to as Edison for anything, 2286 01:48:01,959 --> 01:48:04,250 and haven't for a few years now. 2287 01:48:04,291 --> 01:48:08,583 When we do fingerstick, every time, we use technology 2288 01:48:08,667 --> 01:48:10,959 that is not commercially available. 2289 01:48:11,083 --> 01:48:12,583 We have never used 2290 01:48:12,667 --> 01:48:15,083 commercially available lab equipment 2291 01:48:15,125 --> 01:48:16,709 for fingerstick-based tests. 2292 01:48:16,792 --> 01:48:18,542 (echoing): Every fingerstick test... 2293 01:48:18,625 --> 01:48:21,458 Carreyrou: I had underestimated her willingness 2294 01:48:21,542 --> 01:48:25,709 to bald-face lie in public, on our turf. 2295 01:48:25,792 --> 01:48:28,291 I guess what I really want to know is, do you feel now, 2296 01:48:28,375 --> 01:48:32,458 in hindsight, that maybe you went market a little too quickly? 2297 01:48:32,542 --> 01:48:34,302 Did you feel pressured to do that in any way? 2298 01:48:34,375 --> 01:48:36,250 We're the exact same company. 2299 01:48:36,375 --> 01:48:37,959 Nothing has changed. 2300 01:48:38,041 --> 01:48:40,834 We're working every single day to try to get these tests 2301 01:48:40,917 --> 01:48:43,125 and systems to meet the highest quality standards. 2302 01:48:43,208 --> 01:48:46,250 ♪ ♪ 2303 01:48:47,875 --> 01:48:49,917 (keyboard clacking) 2304 01:48:50,000 --> 01:48:52,041 ♪ ♪ 2305 01:48:55,542 --> 01:48:58,250 Parloff: Couple of months after John Carreyrou's article, 2306 01:48:58,291 --> 01:49:01,750 I wrote a new story. 2307 01:49:01,834 --> 01:49:06,458 It was both a correction and a mea culpa. 2308 01:49:06,542 --> 01:49:10,125 And I said that Elizabeth had intentionally misled me. 2309 01:49:12,417 --> 01:49:14,500 After I published the piece, 2310 01:49:14,583 --> 01:49:16,125 Elizabeth called me, 2311 01:49:16,208 --> 01:49:19,750 and there was a long conversation. 2312 01:49:19,834 --> 01:49:22,291 She was not apologetic. She said, 2313 01:49:22,417 --> 01:49:25,250 "I never would intentionally try to mislead you. 2314 01:49:25,291 --> 01:49:27,166 Why would we do that?" 2315 01:49:27,250 --> 01:49:30,834 She was trying to persuade me to take out that sentence. 2316 01:49:30,917 --> 01:49:32,250 She said something like, 2317 01:49:32,291 --> 01:49:34,500 "If you're not going to take that language out, 2318 01:49:34,583 --> 01:49:38,166 we're going to have to do something about that language," 2319 01:49:38,250 --> 01:49:39,667 which was a little menacing, 2320 01:49:39,750 --> 01:49:43,959 but all that they then did was they wrote a letter. 2321 01:49:44,041 --> 01:49:45,959 Toward the end, there was a weird paragraph, 2322 01:49:46,041 --> 01:49:48,417 something to the effect that Elizabeth didn't even realize 2323 01:49:48,500 --> 01:49:51,709 that Fortune was doing a feature profile, 2324 01:49:51,792 --> 01:49:53,542 let alone a cover. 2325 01:49:53,625 --> 01:49:55,750 And it was so, such a... 2326 01:49:56,709 --> 01:49:59,291 bizarre thing 'cause... 2327 01:50:00,458 --> 01:50:03,083 I was out there four days and... 2328 01:50:03,583 --> 01:50:06,041 I had called all these people at her behest. 2329 01:50:06,125 --> 01:50:07,583 You know, seven directors, 2330 01:50:07,667 --> 01:50:10,542 the head of UCSF Medical Center, 2331 01:50:10,625 --> 01:50:12,625 the head of Blue Cross Blue Shield. 2332 01:50:12,709 --> 01:50:16,083 I spent an hour and a half with her parents. I met her brother. 2333 01:50:16,166 --> 01:50:19,417 I asked her about the letter she wrote when she was nine. 2334 01:50:19,500 --> 01:50:22,208 I asked her about the book her father gave her 2335 01:50:22,291 --> 01:50:24,834 when she went away to school, which was 2336 01:50:24,917 --> 01:50:27,250 Meditations by Marcus Aurelius. 2337 01:50:27,333 --> 01:50:29,417 And then there was the photo shoot! 2338 01:50:29,500 --> 01:50:31,375 It was a big-name photographer, 2339 01:50:31,458 --> 01:50:34,500 and his assistants, and the lighting equipment, 2340 01:50:34,583 --> 01:50:37,041 and taking a couple hundred photos 2341 01:50:37,125 --> 01:50:40,250 in different locations and different poses. 2342 01:50:40,333 --> 01:50:42,709 That was a clue, you know? 2343 01:50:46,333 --> 01:50:49,333 This was real lunacy. 2344 01:50:50,834 --> 01:50:53,291 I realized that there was something wrong with her mind, 2345 01:50:53,375 --> 01:50:58,834 that, um, you know, I don't know if she's lying or if she's... 2346 01:50:59,834 --> 01:51:03,583 uh, there's an unconscious, um, 2347 01:51:03,667 --> 01:51:05,583 reconstruct... self-protective, 2348 01:51:05,667 --> 01:51:08,041 reconstruction of reality that's going on. 2349 01:51:08,125 --> 01:51:10,083 But what is coming out of her mouth 2350 01:51:10,166 --> 01:51:12,750 is not mapping onto reality 2351 01:51:12,834 --> 01:51:14,792 as you or I know it, you know? 2352 01:51:14,875 --> 01:51:17,458 (projector whirring) 2353 01:51:17,542 --> 01:51:19,542 ♪ ♪ 2354 01:51:20,917 --> 01:51:22,750 Auletta: I wish I could say to her, 2355 01:51:22,834 --> 01:51:24,559 "Elizabeth, I'm going to give you a truth serum, 2356 01:51:24,583 --> 01:51:26,166 "and you're going to tell me 2357 01:51:26,250 --> 01:51:29,709 what was going through your mind at that time." 2358 01:51:30,208 --> 01:51:32,875 And the question becomes, do you... 2359 01:51:32,959 --> 01:51:35,792 do we believe that she would say, 2360 01:51:35,875 --> 01:51:38,000 "I knowingly lied?" 2361 01:51:39,166 --> 01:51:41,458 I have a hard time 2362 01:51:41,542 --> 01:51:43,333 imagining her saying that. 2363 01:51:46,250 --> 01:51:49,625 She was a zealot, and a zealot is such a believer, 2364 01:51:49,709 --> 01:51:51,959 a true believer, in what they're doing 2365 01:51:52,041 --> 01:51:55,083 that they're blind to the reality of what's happening. 2366 01:51:56,333 --> 01:51:58,583 Not for a moment do I believe 2367 01:51:58,667 --> 01:52:02,291 that she lies in bed at night and thinks, 2368 01:52:02,375 --> 01:52:06,083 "I was a swindler. I was a crook. I lied." 2369 01:52:10,834 --> 01:52:15,000 Ariely: So one day, I get an e-mail from somebody who works with Elizabeth Holmes. 2370 01:52:15,083 --> 01:52:19,792 He asked me if I would come and meet with their team and with Elizabeth. 2371 01:52:19,875 --> 01:52:21,625 I said sure. 2372 01:52:21,709 --> 01:52:25,375 Part of my research is actually about human motivation, 2373 01:52:25,458 --> 01:52:28,834 and she was very concerned about the demotivation in the company. 2374 01:52:28,917 --> 01:52:32,458 Right? Because the continuous stories 2375 01:52:32,542 --> 01:52:36,417 around them were demotivating. 2376 01:52:36,500 --> 01:52:42,417 My impression was that she truly believed in the mission of the company, 2377 01:52:42,500 --> 01:52:45,208 and that she also believes that they are 2378 01:52:45,291 --> 01:52:48,583 on the way to achieve something, 2379 01:52:48,667 --> 01:52:51,291 and they just need the runway. 2380 01:52:54,625 --> 01:52:57,000 There's a lot of lying in Silicon Valley. 2381 01:52:59,542 --> 01:53:02,583 And I remember when my first book on dishonesty came out, 2382 01:53:02,667 --> 01:53:05,208 and I did a book tour, and I gave a few talks 2383 01:53:05,291 --> 01:53:07,750 in Silicon Valley, some entrepreneur said, 2384 01:53:07,834 --> 01:53:11,083 "Oh, we are in technology. Technology doesn't lie." 2385 01:53:11,166 --> 01:53:13,059 (Gibney laughs) - Right? So, and they basically said, 2386 01:53:13,083 --> 01:53:15,208 "We are honest, there's no opportunities." 2387 01:53:15,291 --> 01:53:17,625 And I didn't say anything, but in two minutes, 2388 01:53:17,709 --> 01:53:20,166 all kind of people from the start-ups around him 2389 01:53:20,250 --> 01:53:23,792 started talking about how they lie to investors. 2390 01:53:24,500 --> 01:53:27,000 And they have all these graphs of growth, right? 2391 01:53:27,083 --> 01:53:28,917 I mean, they're predicting the future, 2392 01:53:29,000 --> 01:53:31,250 and they putting exact numbers on their... 2393 01:53:31,333 --> 01:53:35,041 And my thought was that there is this idea 2394 01:53:35,125 --> 01:53:38,375 in Silicon Valley, where you, um... 2395 01:53:38,458 --> 01:53:41,000 in a very brave way, 2396 01:53:41,834 --> 01:53:45,792 put a post somewhere really far 2397 01:53:45,875 --> 01:53:49,083 that you truly have no idea if you can get there. 2398 01:53:49,166 --> 01:53:52,917 And my sense from the discussion with Elizabeth was 2399 01:53:53,000 --> 01:53:55,917 that she felt that she was basically 2400 01:53:56,000 --> 01:53:58,625 doing the same thing that everybody else is doing. 2401 01:53:58,709 --> 01:54:00,875 ♪ ♪ 2402 01:54:00,959 --> 01:54:02,685 We have lots of people who are overconfident, 2403 01:54:02,709 --> 01:54:05,125 and from time to time, some of them work out, 2404 01:54:05,208 --> 01:54:08,166 and we get penicillin, or the incandescent light bulb, 2405 01:54:08,250 --> 01:54:11,333 - or we get... - (rocket roars) 2406 01:54:13,250 --> 01:54:15,291 And if you are surrounded by companies 2407 01:54:15,375 --> 01:54:17,583 who try very hard and dedicate their lives 2408 01:54:17,667 --> 01:54:20,875 to achieve the impossible, 2409 01:54:20,959 --> 01:54:24,208 and then sometimes they are successful in doing it, 2410 01:54:24,291 --> 01:54:26,208 why can't you? 2411 01:54:29,041 --> 01:54:30,458 Holmes: At the highest level, 2412 01:54:30,542 --> 01:54:33,208 we didn't have the right leadership in the laboratory, 2413 01:54:33,291 --> 01:54:35,083 and I didn't realize 2414 01:54:35,166 --> 01:54:37,417 until the inspection 2415 01:54:37,500 --> 01:54:39,542 that these types of issues were in place. 2416 01:54:39,625 --> 01:54:41,792 So, until the government told you 2417 01:54:41,875 --> 01:54:43,393 that you were really out of compliance, 2418 01:54:43,417 --> 01:54:44,583 - you didn't know? - Yeah. 2419 01:54:44,667 --> 01:54:46,417 What was your reaction when you found out 2420 01:54:46,500 --> 01:54:47,834 that you had all these violations 2421 01:54:47,917 --> 01:54:49,500 - in your lab? - It was devastating. 2422 01:54:49,583 --> 01:54:51,542 Don't blame anyone else. 2423 01:54:51,625 --> 01:54:54,065 You have controlling shares in that company, Elizabeth Holmes. 2424 01:54:54,125 --> 01:54:55,458 The buck stops there. 2425 01:54:55,542 --> 01:55:00,458 People make mistakes, but you must always admit it. 2426 01:55:00,542 --> 01:55:01,875 My husband's favorite phrase: 2427 01:55:01,959 --> 01:55:04,750 "Excuses are like assholes. Everyone has one." 2428 01:55:04,834 --> 01:55:07,250 - Sorry. You don't have to put that in there. - (Gibney laughs) 2429 01:55:07,333 --> 01:55:09,333 Sanjay Gupta: One of the headlines was, 2430 01:55:09,417 --> 01:55:11,667 "$9 Billion Company Down to Zero." 2431 01:55:11,750 --> 01:55:13,583 And your investors and your board members 2432 01:55:13,667 --> 01:55:15,208 are reading those same things. 2433 01:55:15,291 --> 01:55:17,542 It's probably the most important question, I think, 2434 01:55:17,625 --> 01:55:19,458 anybody who's watching has about this. 2435 01:55:19,542 --> 01:55:21,875 - Does it work? - Yes. 2436 01:55:21,959 --> 01:55:25,458 - You're confident in that? - I am confident in that. 2437 01:55:25,542 --> 01:55:28,834 Announcer: Without further ado, I'd like to welcome Elizabeth Holmes, 2438 01:55:28,917 --> 01:55:31,917 - founder and CEO of Theranos, to the stage. - (applauding) 2439 01:55:32,000 --> 01:55:33,875 Narrator: Elizabeth did not give up. 2440 01:55:33,959 --> 01:55:36,000 She fought back by taking center stage 2441 01:55:36,083 --> 01:55:39,709 at a clinical lab conference in front of all her critics. 2442 01:55:39,792 --> 01:55:43,417 She defiantly unveiled the machine she'd been hiding for so long. 2443 01:55:43,500 --> 01:55:46,375 - The miniLab is designed... - She called it "miniLab," 2444 01:55:46,458 --> 01:55:48,000 as if it were a new invention. 2445 01:55:48,083 --> 01:55:50,291 This is an inflection point for our company... 2446 01:55:50,375 --> 01:55:53,375 Narrator: But inside Theranos, it had another name. 2447 01:55:53,458 --> 01:55:55,667 Edison 4.0. 2448 01:55:58,041 --> 01:56:00,500 By 2017, Theranos had spent 2449 01:56:00,583 --> 01:56:03,875 virtually all of the $900 million it had raised. 2450 01:56:03,959 --> 01:56:06,875 Nearly 300 million went to pay legal fees, 2451 01:56:06,959 --> 01:56:08,750 settle lawsuits from investors, 2452 01:56:08,834 --> 01:56:13,000 and to refund every patient in Arizona for their blood tests. 2453 01:56:13,834 --> 01:56:15,667 Henry Kissinger, George Shultz, 2454 01:56:15,750 --> 01:56:18,542 and even David Boies resigned from the board. 2455 01:56:19,458 --> 01:56:21,291 Elizabeth broke up with Sunny 2456 01:56:21,375 --> 01:56:23,125 and fired him from the company. 2457 01:56:23,208 --> 01:56:27,000 But she never lost her faith in the power of invention. 2458 01:56:29,041 --> 01:56:32,542 It's finding... what you love, 2459 01:56:32,625 --> 01:56:34,458 and finding what you're born to do, 2460 01:56:34,542 --> 01:56:37,125 and when you find that, whether it's... 2461 01:56:37,208 --> 01:56:39,166 you know, writing, or painting, 2462 01:56:39,250 --> 01:56:42,166 or science, or whatever it is, when you... 2463 01:56:42,667 --> 01:56:44,375 when you really 2464 01:56:44,458 --> 01:56:47,166 give everything to that, then... 2465 01:56:48,208 --> 01:56:51,542 then you can realize great things and... 2466 01:56:52,291 --> 01:56:54,291 we'll fail 10,000 times if we have to, 2467 01:56:54,375 --> 01:56:58,583 but we'll figure it out on the 10,0001st, you know. 2468 01:57:00,041 --> 01:57:03,375 ♪ ♪ 2469 01:57:21,375 --> 01:57:24,041 Lawyer: Ms. Holmes, please raise your right hand. 2470 01:57:24,125 --> 01:57:25,768 Do you swear to tell the truth, the whole truth, 2471 01:57:25,792 --> 01:57:27,750 - and nothing but the truth? - I do. 2472 01:57:39,041 --> 01:57:40,208 ♪ You can't touch this ♪ 2473 01:57:42,583 --> 01:57:43,750 ♪ You can't touch this ♪ 2474 01:57:46,083 --> 01:57:47,000 ♪ You can't touch this ♪ 2475 01:57:47,083 --> 01:57:49,625 ♪ Oh, oh, oh, oh, oh, oh, oh ♪ 2476 01:57:49,709 --> 01:57:50,625 ♪ You can't touch this ♪ 2477 01:57:50,709 --> 01:57:52,291 ♪ Oh, oh, oh, oh, oh, oh, oh ♪ 2478 01:57:52,375 --> 01:57:54,458 ♪ My, my, my, my music ♪ 2479 01:57:54,542 --> 01:57:55,667 ♪ Keeps me so hard ♪ 2480 01:57:55,750 --> 01:57:57,667 ♪ Makes me say Oh my Lord ♪ 2481 01:57:57,750 --> 01:57:59,125 ♪ Thank you for blessing me ♪ 2482 01:57:59,208 --> 01:58:01,000 ♪ With a mind to rhyme and two hype feet ♪ 2483 01:58:01,083 --> 01:58:02,875 ♪ It feels good when you know you're down ♪ 2484 01:58:02,959 --> 01:58:04,667 ♪ A super dope homeboy from the Oaktown ♪ 2485 01:58:04,750 --> 01:58:06,333 ♪ And I'm known as such ♪ 2486 01:58:06,417 --> 01:58:08,750 ♪ And this is the beat you can't touch... ♪ 2487 01:58:09,500 --> 01:58:11,166 ♪ I told you, homeboy ♪ 2488 01:58:11,291 --> 01:58:12,959 ♪ You can't touch this ♪ 2489 01:58:13,041 --> 01:58:14,792 ♪ Yeah, that's how we living and you know ♪ 2490 01:58:14,875 --> 01:58:16,792 ♪ Can't touch this ♪ 2491 01:58:16,875 --> 01:58:18,375 ♪ Look in my eyes, man ♪ 2492 01:58:18,458 --> 01:58:19,208 ♪ You can't touch this ♪ 2493 01:58:19,291 --> 01:58:20,709 ♪ Oh, oh, oh, oh, oh, oh, oh ♪ 2494 01:58:20,792 --> 01:58:22,851 ♪ Yo, let me bust the funky lyrics, can't touch this ♪ 2495 01:58:22,875 --> 01:58:24,542 ♪ Fresh new kicks and pants ♪ 2496 01:58:24,625 --> 01:58:26,559 ♪ You got it like that now you know you wanna dance ♪ 2497 01:58:26,583 --> 01:58:28,041 ♪ So move out of your seat ♪ 2498 01:58:28,125 --> 01:58:30,166 ♪ And get a fly girl and catch this beat ♪ 2499 01:58:30,250 --> 01:58:31,166 ♪ While it's rollin' ♪ 2500 01:58:31,250 --> 01:58:32,458 ♪ Hold on pump a little bit ♪ 2501 01:58:32,542 --> 01:58:35,166 ♪ And let me know it's going on like that, like that ♪ 2502 01:58:35,250 --> 01:58:36,917 ♪ Cold on a mission so fall on back ♪ 2503 01:58:37,000 --> 01:58:38,875 ♪ Let 'em know that you're too much ♪ 2504 01:58:38,959 --> 01:58:41,250 ♪ And this is a beat they can't touch ♪ 2505 01:58:42,305 --> 01:58:48,328