Theranos: The Most Evil Business In The World

first they think you're crazy then they fight you and then all of a sudden you change the world what do you want to be when you're older doctor teacher musician nope when nine-year-old elizabeth holmes was asked this question she immediately said i want to be a billionaire and she succeeded elizabeth would become the youngest self-made female billionaire after starting a company called theranos that claimed it was going to revolutionize healthcare and change the world the company became worth around 9 billion and elizabeth was on the cover of magazines being hailed as the next steve jobs

the only problem is it was all a lie this is the story of why and how elizabeth holmes scammed her way to the top and how it all came crashing down can you tell us a secret i don't have many secrets at the age of just 19 elizabeth holmes dropped out of stamford university to start her own business it was originally called real-time shows but elizabeth changed the name after worrying people would be skeptical of the word cures and she certainly didn't want to attract any suspicion so she instead renamed it theranos a combination of

the words therapy and diagnosis elizabeth had a phobia of needles and had a vision where you could simply prick your finger and with a single drop of blood test for hundreds of different diseases since elizabeth came from a well-connected family she was able to raise some initial money to get the company up and running to pursue this idea she was also a very persuasive saleswoman and investors were drawn in by her vision and confidence what was noticeable though is that people who invested did not have medical backgrounds in fact some of the experts in this

field that she spoke to specifically warned her that her idea most likely wasn't even possible but elizabeth ignored those warnings and began hiring a team of scientists to help her unsurprisingly progress on this revolutionary new blood testing device was a lot slower than she'd hoped so she demanded that research start happening 24 7 meaning some employees would have to start working through the night the lab manager thought this was a bad idea as they were already so overworked so elizabeth hired a second team and pitted them against each other the team that made the least

progress would be fired by 2006 the engineers had created a prototype machine called the edison here's how it worked you put a drop of blood on a small cartridge and slide it into the machine which runs the test the data is then wirelessly transmitted via the internet to a lab where it's analyzed and then a report is sent back basically the machine would make blood tests much faster cheaper easier and all from a portable device you could use in the comfort of your own home at least that's what the machine claimed to do but it

very rarely worked and had an extremely high error rate it was clear to everyone working on the machine that it needed a lot more work before it was ready when i was there we could not complete any test accurately on the devices that we were manufacturing the problem was that by this point theranos had burnt through its initial funding and they needed more money fast so elizabeth began sweet talking more investors bragging about this revolutionary new machine they'd created and claiming that it worked perfectly when investors asked to come see the machine in action elizabeth

created an elaborate deception so they didn't realize how faulty the machine was they would get their finger pricked with a small amount of blood then they'd be let out of the room they'd go have a meeting go have lunch whatever and at which point an engineer would run in the room grab the cartridge and bring it out to the lab so was the edison doing the testing no absolutely not who was doing the testing it was scientists at the bench when the investors returned to the lab to see their results they just assumed the machine

had worked perfectly but the test hadn't even been done using the machine the demonstration was all a sham but the investors were fooled many of them were rich older men who seemed especially taken in by elizabeth when the company's financial officer found out about this he told elizabeth they had to stop doing fake demonstrations because it was misleading investors to think the machine worked much better than it really did and not just that elizabeth had also been asking him to significantly increase the revenue predictions to make the company's finances look much better than they really

were when the financial officer confronted elizabeth about all this her expression immediately turned ice cold and she told him he should leave right now and she didn't mean leave her office she meant leave the company for daring to push back against what she was doing he was fired and to make things even worse elizabeth never hired another cfo to replace him meaning there was nobody to question the absurd revenue predictions she was given to investors so she could easily make up whatever numbers she wanted and it worked theranos raised yet more millions of dollars in

funding however the chief financial officer was just one of many in a long line of employees to get fired from the company for example when elizabeth decided to start doing a trial of the edison machine on a group of terminal cancer patients several employees came to her to tell her she shouldn't be doing this since the machine was constantly breaking and giving wildly inaccurate results and they said it wasn't fair to use real patients as guinea pigs but she continued with the trial anyway and anyone who spoke out against her in any way was fired

when someone questioned her she took it as disloyalty and would stare at them without blinking until they broke the silence because of this culture of firing anyone who raised concerns staff turnover was ridiculously high and elizabeth ended up being surrounded by yes men who had blind loyalty to her or people who are simply too terrified to speak up for example the company hired quite a few workers from overseas who had a working visa and would have to leave the country if they got fired so they didn't speak up about their concerns it actually wasn't elizabeth

who did most of the firing though instead it was the number two in command at the company a man named sunny balwani he'd come from a software background so knew very little about medicine and would often randomly repeat technical terms he overheard to make it sound like he knew what was going on the reason he was second in command was because him and elizabeth were in a relationship but this was yet another secret in fact elizabeth outright lied to the board about this since she knew that hiring her partner for the second in command role

was a clear conflict of interests sunny had met elizabeth when she was just 18 years old and he was 37 and they'd been dating ever since however sunny was described by employees as a tyrant he was brutal aggressive and intimidating to employees he watched everyone on cctv to check how long they were working and angrily shouted at them if they weren't working lots of overtime when he found out one employee who had a family was only working the minimum of eight hours a day he told him he'd fix him he made several employees cry with

his interrogations and abuse he tracked everything they did looking through their browsing history and even installing a key logger on their computers to track every word they typed including the company's receptionists this was all part of the company's insanely secretive culture employees all had to sign non-disclosure agreements when they joined in fact anyone who even entered the theranose building had to sign one and would be accompanied to all times by security guards even to the bathroom employees also weren't meant to mention theranos on their linkedin bio or even talk to their families about what they

did theranos had even blocked the chat feature on the company's computers so you couldn't message co-workers on other teams meaning the company was very siloed off and divided this was extremely impractical because it meant the chemistry team and the engineering team weren't in communication which massively slowed research down theranos constantly claimed that this secrecy was simply to protect trade secrets but in reality it was to cover up all the lies about the state of their technology and the way the company was being run and when anyone was fired or if they quit which also happened

very frequently they were forced to sign yet another non-disclosure agreement confirming they wouldn't talk about anything at all that had happened whilst the theranos they couldn't even speak to any of their colleagues on their way out they had to leave immediately theranos had hired one of the top law firms and threatened to sue anyone who mentioned anything about what they'd seen at the company most people were just relieved to get out of there so they reluctantly signed whatever they wanted to avoid more legal threats as a precaution sunny would also ask the head of i.t

to dig up dirt on employees that could be used as leverage against them in future if they ever spoke out there was one incident where an employee refused to sign an nda when he quit though and sonny called the cops on him claiming he'd taken company property but when the police arrived to ask what he'd actually stolen suddenly blurted out he stole property in his mind so to summarize it was an anxious paranoid work environment and yet despite that many in the company believed they truly were working towards something revolutionary elizabeth constantly reminded employees how

impactful their technology would be in making tests more accessible to everyone it would help detect a variety of diseases including cancer and thus saving lives there was a strong driving mission and elizabeth had them all convinced they were going to change the world you want it to be true so badly i was working with these devices every single day and she could still kind of convince me and so whilst many employees did have concerns that the device they'd created still wasn't working the way elizabeth claimed it did obviously theron's wouldn't actually start letting the general

public use these machines until they were properly working right but before that i want to tell you about today's video sponsor purevpn if you're browsing the internet without a vpn your real ip address is visible meaning sites you visit can see your location whereas with purevpn they have a strict no logs policy so you can browse online safely and anonymously they also have thousands of servers across 78 different countries meaning you can change your location bypass geo restrictions and unblock all major streaming services like netflix purevpn is quick and easy to use and has apps

across all major platforms so get started today by using the link in the description below and you'll get a huge discount off your order just use the code magnates media after you've done that let's get to the next chapter [Applause] in 2013 theranos announced a partnership with walgreens and safeway where they would start offering theranose blood tests in their stores for the first time the general public was going to be able to use theranos's machine elizabeth seemed to expect the machines would be fully working by the time they launched in stores but they weren't they

were still breaking and producing inaccurate results did this stop elizabeth from going ahead absolutely not walgreens and safeway were putting up a lot of money for this deal a lot of which theranos had already spent plus by rolling out their machines in stores it helped elizabeth to raise around 400 million dollars more from investors who are now even more convinced that everything with the company seemed to be going great their logic was that there's no way fairenos would be rolling out blood tests in stores unless their technology worked just as well as they said it

did so wealthy investors threw yet more money in without asking too many questions because they didn't want to miss out on investing in such a seemingly revolutionary company and because many of these investors were high-profile names like rupert murdoch and the walton family it gave theranos even more credibility now the idea with this deal with walgreens and safeway was they'd set up theranose booths in their store where people could get a blood test done with just a brick of their finger and essentially choose from a menu of which things they wanted to test for however

this had meant to begin in 2011 but because the machines didn't actually work properly yet elizabeth kept trying to stall for time there was excuse after excuse to delay the launch date often for completely bizarre reasons like she once said that they were behind schedule because of an earthquake in japan even though that had absolutely no impact on their business but anyway after almost two years of delays eventually elizabeth couldn't stall any longer and she had to make a decision admit the technology didn't work and lose the deal with walgreens and safeway which would mean

refunding many millions of dollars or just put the faulty machines in stores and hope it somehow all works out this was a turning point up until now elizabeth had deceived investors but now by letting the general public use these faulty fairness machines she was literally putting lives at risk if someone got a blood test done on a theranose machine and it gave the wrong results it could be fatal they can either be diagnosed with something they don't have or think their results are fine but really they have a serious issue but elizabeth pressed on anyway

and walgreens and safeway started offering theranose blood tests in their stores of course because the machines weren't working properly theranos couldn't get approval from regulators for in-store testing so as a workaround instead of actually doing the blood test in store like elizabeth had promised walgreens and safeway they would do theranos instead simply collected the blood in store and physically sent it off to a nearby lab they'd set up this loophole meant they didn't need to go through the same regulatory checks but not just that one of the biggest selling points of theranos was meant to

be that you only needed a small drop of blood from a finger prick but when people actually arrived to get their blood tested they often had their blood taken with a syringe the traditional way and whereas the results were supposed to be ready in just a few hours instead the results often took weeks basically the whole thing was advertised as some revolutionary experience yep it seemed just like a normal blood test and the reason for that is it was just a normal blood test in order to give the perception everything was going fine theranos were

taking normal blood samples and using third-party machines from other companies to do most of the blood tests but because they were shipping the blood off to a private lab people didn't realize theranos were hardly even using their own technology fairness had promised their machine could perform 192 different tests but in reality they could only perform 12. in fact it was later discovered that over half of the tests they promised weren't even theoretically possible and of the 12 things their machine could test for most didn't work very well so theranose was performing tests on third party

machines and pretending it was their own results and because of elizabeth's insistence on using a small amount of blood they had to dilute the blood samples to be able to run them on the commercial testing machines which reduced the accuracy of the results but it gets much worse the lab there are notes had set up near the stores to process the blood samples had been very hastily put together and many of the staff they'd hired were very inexperienced the people who were more experienced tended to quit or get fired for criticizing the way things were

done for example when one lab director quit over concerns that blood samples weren't being handled properly they were replaced with a dermatologist one of the biggest problems was that in order to send the blood samples from the stores to the lab theranos was simply using fedex and this meant parcels often overheated causing the blood to clot so not only were theranos completely lying about how they were doing these tests they weren't even doing the test properly very soon people started noticing abnormal test results for example one young healthy person got results back implying he had

cancer but when he went and got the blood test repeated by his actual doctor his results were perfectly fine elizabeth was literally putting patients lives at risk by sending out incorrect results and yet they pressed on in order to keep up the pretense that everything was working fine theranos was now live in stores in arizona with plans to roll out all across america soon and then the entire world and yet whilst internally in the theranos labs there was chaos externally elizabeth was securing yet more funding from investors and starting to gain publicity and fame in

2014 forbes named elizabeth holmes the world's youngest self-made female billionaire worth 4.5 billion dollars because she owned around half of there are no shares which was now being valued at 9 billion which raises a very simple question how the hell was she getting away with this to find out the answer to that click right here to watch the second part of this theranose mini series i'll see you there in part two