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Interviewer:
We've had a great opportunity
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in asking so many people
so many questions
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about things ranging from the future to,
kind of, advice,
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and we thought
we'd ask a few questions
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that run a little bit
of a gamut, really quickly.
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- Mm. Okay.
- Woman: Can you look into the lens?
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Interviewer: We thought it would
be interesting to ask you,
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in the year 2025,
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what's the thing
you're most certain about?
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More people will have access
to their own health information.
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Interviewer: What do you dream for?
Something in 2025?
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That less people
have to say goodbye too soon
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to people they love.
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Interviewer: That's great.
Can you tell us a secret?
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♪ ♪
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I don't have many secrets. Um...
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♪ ♪
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Charlie Rose:
Are you a scientist or a technologist?
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Or an entrepreneur?
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Elizabeth Holmes:
I think I'm an entrepreneur.
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I was trained as an engineer,
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but... now my time is spent
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on doing whatever it takes
to realize this mission.
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Theranos is the integration
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of the words
therapy and diagnosis.
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And if we can shift
toward a model in which
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we're determining
the onset of disease
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in time for therapy
to be effective,
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we will change outcomes.
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You founded this company
12 years ago, right?
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Tell 'em how old you were.
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- I was 19.
- Yeah.
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(audience applause)
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Holmes:
There was never sort of a plan
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to drop out of Stanford,
but I found what I loved.
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I found what I wanted
to spend my life doing.
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Pattie Sellers:
Elizabeth has raised more than $400 million.
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The company is
valued at $9 billion.
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You own over 50% of it, right?
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- Congratulations on that.
- (audience laughs)
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Holmes: We've got an incredible
opportunity to try to uphold
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a legacy in Silicon Valley
of changing the world.
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And we like to think
about it as a movie,
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and you can begin to see
that story in a better way.
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We see a world
in which every person
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has access
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to actionable health information
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at the time
it matters.
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A world
in which
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no one ever
has to say,
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"If only I'd known sooner."
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A world in which
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no one ever has
to say goodbye too soon.
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♪ ♪
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This future
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is beginning now.
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(birds chirping)
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Narrator: Nestled in the
foothills above Silicon Valley,
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there is a 700-acre
plot of land
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called
the Stanford Research Park.
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According to the website,
it's a community of and for people
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who seek to invent the future.
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From here came elements
of the microwave tube,
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the mainframe computer,
and the International Space Station.
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Steve Jobs spent time here,
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so did Mark Zuckerberg
and Elon Musk.
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Elizabeth Holmes saw
herself in their company.
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So in the fall of 2014,
she moved her biotech startup
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Theranos to the research park.
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The company
employed 800 people
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and was valued
at nearly $10 billion.
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Four years later,
it was worth less than zero.
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♪ ♪
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To understand what happened,
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it pays to look past
the price of the stock
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to the value of the story.
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This compelling tale of divining hundreds
of diseases from a drop of blood
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was a testament to the
imagination of the inventor.
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In the deserted
property she designed,
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you can almost hear
the echoes of her ambition
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and see how glass walls,
promising transparency,
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could become
a labyrinth of mirrors.
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Was Elizabeth lost
in a landscape
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between what
she could make real
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and the world
of make-believe?
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Dan Ariely: For me,
this was a story of how people get trapped
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over time with trading off
human values.
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And then, the way that
they trade off those values
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change them as people
and things go down.
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So part of it was
trying to understand...
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and I think this is
part of the story...
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is the journey
for Elizabeth.
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Some people take a path,
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trying to do positive things
for the world, right?
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Nobody questions
that her motives were...
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were positive, but end up
being something bad.
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How do we react to this?
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You can look
at her at the end,
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and say how could
she do this,
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but I think that
would miss the point
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if you don't understand
the journey.
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If you look at her
from the beginning,
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it will be a cautionary
tale about all of us.
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♪ ♪
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(projector whirring)
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(children chattering)
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Holmes:
I grew up spending summers
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and the holidays with my uncle.
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I remember how much
he loved the beach.
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I remember
how much I loved him.
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He was diagnosed
one day with skin cancer,
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which all of a sudden
was brain cancer,
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and in his bones.
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He didn't live
to see his son grow up,
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and I never got to say goodbye.
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The right to protect
the health and well-being
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of every person,
of those we love,
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is a basic human right.
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Over the course
of the last 11 years,
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we've made it possible to run
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comprehensive laboratory tests
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from a few drops of blood
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that could be taken
from a finger.
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And we've made it possible
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to eliminate the tubes
and tubes of blood
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that traditionally have
to be drawn from an arm,
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and replaced it
with the nanotainer.
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♪ ♪
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And if I had one wish,
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standing here with all of you,
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it would be that no one
has to go through the pain
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of traditional phlebotomy.
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I was always...
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absolutely terrified
of giving blood.
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It's the only thing in my life
I've ever been scared of.
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♪ ♪
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(squelching)
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If we were to sit here and
dream up torture experiments,
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psychologically, the concept
of sticking large needles
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over and over into someone,
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and draining out so much blood,
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while they're watching this
blood being sucked out of them,
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that you've basically
completely debilitated them,
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that qualifies as a pretty good
torture experiment in my book.
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I find it quite disturbing.
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♪ ♪
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Newsreel Narrator:
This technician is preparing the blood sample
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for a white cell count.
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She dilutes the blood
with a special fluid
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and puts a measured amount
into a pipette.
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Holmes: Since, really,
the clinical lab infrastructure
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began to develop, we've had
this highly centralized,
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very big,
analytical instruments
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which require that much blood,
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and therefore, people have
had to take tubes and tubes
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every time they do
a blood draw.
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So, laboratory testing
hasn't changed since the 1950s.
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It's the closest thing
to mainframe computers versus...
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it's not even PCs...
versus mobile phones that...
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that I've ever seen, right?
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So, the timing is very ripe
to change this paradigm.
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♪ ♪
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(clicks)
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(snaps)
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(clicks)
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(clicks)
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(whirs)
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There's no shortcut
to really hard work.
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And we learn so much more
from our failures
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than we did from our successes.
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We code-named our product
"The Edison"
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because we assumed
we'd have to fail 10,000 times
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to get it to work the 10,001st.
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And we did.
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(projector whirring)
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Narrator:
What does it mean to invent something?
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It could be an act of creation,
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or an act of deception.
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00:10:13,333 --> 00:10:15,709
The world's greatest
inventor did both.
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We think of Thomas Edison
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as the inventor
of the phonograph,
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00:10:19,667 --> 00:10:22,375
the electric light bulb,
and the way we look at the world.
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Edison's company made one of the
first motion picture cameras
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and the very first commercial
movie, Blacksmithing Scene.
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♪ ♪
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His company produced
over 1,200 films,
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documentaries
and fiction films,
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including
the first screen kiss.
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♪ ♪
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But Edison's greatest invention
may have been himself.
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The first celebrity
businessman,
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Edison's secret was knowing
how to tell a good story,
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in which he cast himself
as the main character.
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00:11:03,208 --> 00:11:05,166
"The Wizard of Menlo Park,"
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a man who could conjure
anything in his laboratory.
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00:11:09,125 --> 00:11:11,667
(typewriter clacking)
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00:11:11,750 --> 00:11:13,125
(scribbling)
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00:11:13,208 --> 00:11:15,542
He had his name
on over 2,000 patents,
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from telegraphs to vacuum pumps
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00:11:17,625 --> 00:11:20,667
to electric cars.
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But he often promised
far more than he could deliver.
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00:11:24,208 --> 00:11:27,375
In 1878, the New York Sun
printed a claim by Edison
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that he had solved the mystery
of the incandescent light bulb.
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00:11:30,792 --> 00:11:32,875
But it wasn't true.
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His filaments kept melting.
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00:11:34,583 --> 00:11:36,542
When reporters and investors
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asked for demonstrations,
he faked them.
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00:11:39,834 --> 00:11:41,458
To keep journalists
sympathetic,
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00:11:41,542 --> 00:11:43,667
he gave them stock
in his company.
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♪ ♪
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For four years, he pretended
his invention was good to go,
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even while he scrambled
to make it work.
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Then, just before his money
and credit ran out,
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he solved the problem
of how to keep the lights on.
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He was the first to practice
the Silicon Valley art
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00:12:01,875 --> 00:12:04,830
of "fake it till you make it."
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00:12:06,166 --> 00:12:09,583
More than a hundred years
after Edison's first movies,
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00:12:09,667 --> 00:12:12,500
Elizabeth Holmes modeled
her own ambitious career
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00:12:12,583 --> 00:12:14,583
after the great
American inventor,
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00:12:14,667 --> 00:12:17,959
with a magical machine
named after the man himself.
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00:12:22,208 --> 00:12:25,625
Roger Parloff:
It was obviously such an incredible story.
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00:12:25,709 --> 00:12:28,583
The 19-year-old, the dropout,
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00:12:28,667 --> 00:12:31,375
a woman creating
this $9 billion
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00:12:31,458 --> 00:12:33,667
innovative company.
225
00:12:34,458 --> 00:12:37,830
I went out there for four days:
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00:12:37,166 --> 00:12:40,458
three interviewing her and one
interviewing some other people.
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00:12:40,542 --> 00:12:42,417
What are
you working on?
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00:12:42,500 --> 00:12:44,959
Parloff:
When she was talking about some subject
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other than diagnostic testing,
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she was very unprepossessing,
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very ingenuous.
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When she began to talk about...
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00:12:54,291 --> 00:12:57,458
the mission,
or the, you know, her business,
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then there was a shift,
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and she became very,
very focused, very intense.
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00:13:03,458 --> 00:13:06,375
Firm control of all the facts.
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00:13:06,458 --> 00:13:08,333
No question surprised her.
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00:13:08,417 --> 00:13:12,959
Um... very impressive,
and very idealistic.
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00:13:13,410 --> 00:13:16,208
(applause)
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Sellers:
We were the first to put on the cover
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00:13:19,875 --> 00:13:23,625
and write a major story about
this amazing woman next to me.
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00:13:23,709 --> 00:13:27,750
"This CEO Is
Out for Blood."
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00:13:29,166 --> 00:13:31,208
This is Elizabeth's second
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00:13:31,291 --> 00:13:33,625
public live interview...
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00:13:33,709 --> 00:13:36,792
Parloff: Fortune invited her to the
Most Powerful Women's conference,
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00:13:36,875 --> 00:13:41,417
even though she wasn't the head
of a Fortune 500 company.
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00:13:41,500 --> 00:13:43,208
And she was saying to us,
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00:13:43,291 --> 00:13:47,792
"I'm the only one of these
people that founded a company."
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00:13:47,875 --> 00:13:50,417
You know, "They're CEOs,
250
00:13:50,500 --> 00:13:52,625
"yeah, but I founded
this company.
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00:13:52,709 --> 00:13:56,125
"I invented
what this company is about.
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00:13:56,208 --> 00:13:57,667
I deserve to be here."
253
00:13:57,750 --> 00:13:59,510
I'll talk with people
sometimes, they'll say,
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00:13:59,583 --> 00:14:01,375
"Oh, you know,
I want to start a business."
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00:14:01,458 --> 00:14:04,375
And my question is always why,
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00:14:04,458 --> 00:14:07,166
because there's
gotta be a mission.
257
00:14:07,250 --> 00:14:09,333
♪ ♪
258
00:14:09,417 --> 00:14:11,667
Ken Auletta:
I had heard about Theranos
259
00:14:11,750 --> 00:14:14,333
and Elizabeth Holmes,
a woman executive
260
00:14:14,417 --> 00:14:17,166
in the male-dominated
Silicon Valley,
261
00:14:17,250 --> 00:14:18,625
who was starting a company
262
00:14:18,709 --> 00:14:21,417
with some real
potential social good.
263
00:14:22,333 --> 00:14:24,458
I write a lot
about disruption,
264
00:14:24,542 --> 00:14:28,125
and Theranos was
aimed to be a disruptor
265
00:14:28,208 --> 00:14:30,208
of the established
ways of doing things,
266
00:14:30,291 --> 00:14:31,834
the established, inefficient,
267
00:14:31,917 --> 00:14:34,500
and expensive ways
of doing things.
268
00:14:34,583 --> 00:14:36,875
And she was going to herald
269
00:14:36,959 --> 00:14:40,458
a revolution in medical
treatment in this country.
270
00:14:46,458 --> 00:14:50,959
♪ ♪
271
00:14:52,834 --> 00:14:54,917
Narrator:
The lab industry needed disrupting.
272
00:14:55,000 --> 00:14:57,410
It was dominated
by two companies:
273
00:14:57,125 --> 00:14:59,208
Quest and LabCorp.
274
00:14:59,291 --> 00:15:01,917
Between them, they controlled
almost 80% of the market.
275
00:15:02,000 --> 00:15:06,917
Their blood test prices were
always high and never transparent.
276
00:15:07,000 --> 00:15:09,375
They were sued for overcharging
Medicaid and Medicare
277
00:15:09,458 --> 00:15:10,875
for billions of dollars.
278
00:15:10,959 --> 00:15:12,667
But the size
of their operations,
279
00:15:12,750 --> 00:15:15,834
including the ability to do over
a thousand different blood tests,
280
00:15:15,917 --> 00:15:18,500
made them difficult
to challenge.
281
00:15:18,583 --> 00:15:21,667
Until Elizabeth Holmes
and Edison.
282
00:15:23,000 --> 00:15:26,830
Auletta:
She had built a staff of 700 people.
283
00:15:26,166 --> 00:15:30,410
Well, I went out to look at the Newark,
California, facility,
284
00:15:30,125 --> 00:15:32,625
which was extraordinary.
285
00:15:32,709 --> 00:15:35,834
♪ ♪
286
00:15:37,410 --> 00:15:39,166
(machines whirring)
287
00:15:43,166 --> 00:15:45,291
♪ ♪
288
00:15:47,917 --> 00:15:50,834
Well, you know,
her story's so compelling.
289
00:15:50,917 --> 00:15:54,542
I mean, if you think about it,
you go in and you see
290
00:15:54,625 --> 00:15:56,417
this woman lives
in an apartment...
291
00:15:56,500 --> 00:15:59,291
basically, she called
her apartment a mattress.
292
00:15:59,375 --> 00:16:01,750
The only thing in the
refrigerator was bottled water.
293
00:16:01,834 --> 00:16:03,625
She ate all the meals
at the office.
294
00:16:03,709 --> 00:16:05,830
She slept four hours a day.
295
00:16:05,166 --> 00:16:08,250
She worked in the office
till midnight or thereabouts.
296
00:16:08,333 --> 00:16:11,125
You ask, do you date?
"No, I don't have ti...
297
00:16:11,208 --> 00:16:13,410
I'm married to Theranos."
298
00:16:13,125 --> 00:16:15,125
That was her...
that's literally her words,
299
00:16:15,208 --> 00:16:16,959
what she said to me,
and I believed it.
300
00:16:17,410 --> 00:16:18,458
(indistinct chatter)
301
00:16:18,542 --> 00:16:22,250
Auletta: You wear black outfits a lot.
Why?
302
00:16:22,333 --> 00:16:25,291
Holmes:
Because in line with the...
303
00:16:25,375 --> 00:16:27,458
designing my life
to be able to give
304
00:16:27,542 --> 00:16:30,000
every bit of energy
I have to this,
305
00:16:30,830 --> 00:16:33,125
I have a closet that
has a very large number
306
00:16:33,208 --> 00:16:35,417
of the exact same
set of clothes,
307
00:16:35,500 --> 00:16:37,000
and every single day,
308
00:16:37,830 --> 00:16:39,750
I put the same thing on,
and I don't have to think about it.
309
00:16:39,834 --> 00:16:42,208
Auletta:
Steve Jobs used to say that, too.
310
00:16:43,375 --> 00:16:45,208
Holmes:
He wore jeans. (laughs)
311
00:16:46,959 --> 00:16:48,417
Parloff:
She was obviously, you know,
312
00:16:48,500 --> 00:16:50,291
Steve Jobs was her hero.
313
00:16:50,375 --> 00:16:52,458
And I just felt,
oh, well, she's a young person.
314
00:16:52,542 --> 00:16:57,750
You know, I'll give them their
little hero worship thing. (laughs)
315
00:16:58,959 --> 00:17:02,959
Holmes:
I'm a tremendous admirer of what Jobs did.
316
00:17:03,410 --> 00:17:05,000
I think he was a genius.
317
00:17:05,830 --> 00:17:06,667
I do have to disclose that
318
00:17:06,750 --> 00:17:09,291
I've been in black turtlenecks
since I was seven. (laughs)
319
00:17:12,542 --> 00:17:14,417
♪ ♪
320
00:17:18,830 --> 00:17:20,208
♪ ♪
321
00:17:24,410 --> 00:17:26,417
Holmes:
I want to talk for just a minute about
322
00:17:26,500 --> 00:17:28,875
what it means to be
in this company right now.
323
00:17:28,959 --> 00:17:35,542
I was sitting yesterday with the
president of Brazil for lunch,
324
00:17:35,625 --> 00:17:39,166
and this woman had invited me,
325
00:17:39,250 --> 00:17:42,667
and Eric Schmidt from Google,
and Mark Zuckerberg,
326
00:17:42,750 --> 00:17:46,458
and the Airbnb guys, and the Uber guys,
and a bunch of other people,
327
00:17:46,542 --> 00:17:50,410
and she sits down at the table
with all these people,
328
00:17:50,125 --> 00:17:53,830
and we all have
the headphones on, translators,
329
00:17:53,166 --> 00:17:57,542
and she says, "The strategic
priority of Brazil
330
00:17:57,625 --> 00:18:00,500
"is to get access
to low cost diagnostics
331
00:18:00,583 --> 00:18:02,792
"that can facilitate
early detection
332
00:18:02,875 --> 00:18:05,583
- and prevention and..."
- (cheering)
333
00:18:05,667 --> 00:18:07,709
(applause)
334
00:18:09,709 --> 00:18:12,125
We're all kind of sitting there,
and you can see, like,
335
00:18:12,208 --> 00:18:15,250
all the other CEOs' faces
being like...
336
00:18:15,333 --> 00:18:18,166
not wanting to be
the ones in the spotlight,
337
00:18:18,250 --> 00:18:20,309
and she kept on doing this
for like an hour and a half.
338
00:18:20,333 --> 00:18:23,750
And so, of course, I'm trying
to, you know, be humble,
339
00:18:23,834 --> 00:18:25,792
but I'm...
340
00:18:25,875 --> 00:18:27,417
Erika Cheung:
When I first met her,
341
00:18:27,500 --> 00:18:29,830
I thought she was
really interesting.
342
00:18:29,166 --> 00:18:32,750
It was... It was hard to really
get a sense of who she was,
343
00:18:32,834 --> 00:18:36,750
but in a way,
I felt I idolized her in so many ways,
344
00:18:36,834 --> 00:18:39,166
based on, like,
the little that I had read.
345
00:18:39,250 --> 00:18:41,417
Nice to meet you.
I'm Elizabeth.
346
00:18:41,500 --> 00:18:43,792
Cheung:
For being a woman in the sciences,
347
00:18:43,875 --> 00:18:45,417
being a woman in tech,
348
00:18:45,500 --> 00:18:48,000
the fact that she started
her own company,
349
00:18:48,830 --> 00:18:50,375
that really got me excited.
350
00:18:50,458 --> 00:18:53,291
You know, she was
a really good idol to have.
351
00:18:53,375 --> 00:18:54,625
Thank you so much.
352
00:18:54,709 --> 00:18:56,875
In a sense,
I was super naive and like,
353
00:18:56,959 --> 00:18:59,959
almost drank the Kool-Aid,
like, a little too quickly,
354
00:19:00,410 --> 00:19:03,834
and was just more enthusiastic
to be a part of the team.
355
00:19:03,917 --> 00:19:05,834
Holmes:
You all are part of something
356
00:19:05,917 --> 00:19:08,583
that is a revolution,
and you're part of something
357
00:19:08,667 --> 00:19:11,166
that is going to change
our world.
358
00:19:12,410 --> 00:19:14,417
What higher purpose
is there in life
359
00:19:14,500 --> 00:19:16,375
than to be able
to be doing that?
360
00:19:19,830 --> 00:19:22,458
♪ ♪
361
00:19:22,542 --> 00:19:24,500
Cheryl Gafner:
When I went on an interview,
362
00:19:24,583 --> 00:19:26,125
Elizabeth was there.
363
00:19:26,208 --> 00:19:27,834
And I was
a little surprised,
364
00:19:27,917 --> 00:19:31,410
considering I would be the
low man on the totem pole.
365
00:19:31,750 --> 00:19:33,875
I found out later
there was no one
366
00:19:33,959 --> 00:19:36,333
that got past her
in order to get hired.
367
00:19:36,417 --> 00:19:38,959
Um... (laughs)
368
00:19:39,410 --> 00:19:42,834
I know this sounds odd,
but my first impression was
369
00:19:42,917 --> 00:19:44,917
that she didn't blink.
370
00:19:47,417 --> 00:19:50,830
And so, I always wanted
to make sure that I kept
371
00:19:50,166 --> 00:19:52,875
great eye contact 'cause
I didn't want to be the one
372
00:19:52,959 --> 00:19:55,542
to look over, right?
373
00:19:55,625 --> 00:19:58,458
Uh, so, she was very intense.
374
00:19:58,542 --> 00:20:00,583
♪ ♪
375
00:20:04,959 --> 00:20:07,590
David Philippides: Comparing it to
the other interviews that I had
376
00:20:07,830 --> 00:20:10,375
with other tech companies in the Bay Area,
it was different.
377
00:20:10,458 --> 00:20:15,125
You know, they didn't tell me nearly
as much about what they were doing.
378
00:20:15,208 --> 00:20:17,458
She never blinked
during the interview.
379
00:20:18,792 --> 00:20:21,709
She did
tell me about
380
00:20:21,792 --> 00:20:23,375
just the one drop
of blood
381
00:20:23,458 --> 00:20:26,166
and it's a medical
testing company.
382
00:20:26,250 --> 00:20:29,410
Um, they didn't say anything
about how it worked,
383
00:20:29,125 --> 00:20:31,125
or what the technology was.
384
00:20:31,208 --> 00:20:35,125
They just said, "You'll be
working with consumables,"
385
00:20:35,208 --> 00:20:36,834
which was kind of vague.
386
00:20:36,917 --> 00:20:38,917
Alex Gibney:
How did they describe the project?
387
00:20:39,000 --> 00:20:41,709
- They didn't.
- (Gibney laughs)
388
00:20:41,792 --> 00:20:43,712
So, how did you know what
you were signing on for?
389
00:20:43,792 --> 00:20:47,830
You know, I had a very vague idea,
but I didn't.
390
00:20:47,166 --> 00:20:50,166
That's actually not that untypical
in startup environments.
391
00:20:50,250 --> 00:20:52,000
They want to keep
what they're doing secret.
392
00:20:52,830 --> 00:20:55,166
The response
of the major lab companies
393
00:20:55,250 --> 00:20:57,166
was to say,
"Well, we don't know
394
00:20:57,250 --> 00:20:59,267
- how they're doing what they're doing." And...
- Exactly.
395
00:20:59,291 --> 00:21:00,851
And if it's so great,
why don't they show it?
396
00:21:00,875 --> 00:21:02,309
There's too much secrecy
is what they said.
397
00:21:02,333 --> 00:21:04,000
Right, that's exactly
what they said.
398
00:21:04,830 --> 00:21:06,291
And, you know, our position
on that is, first of all,
399
00:21:06,375 --> 00:21:08,417
we don't think that we need
400
00:21:08,500 --> 00:21:12,830
to explain ourselves
to competitive companies.
401
00:21:12,166 --> 00:21:16,333
What we're working to do is to
invent an integrated solution
402
00:21:16,417 --> 00:21:18,750
where every person
gets access
403
00:21:18,834 --> 00:21:23,750
to this wealth of information
from tiny droplets of blood,
404
00:21:23,834 --> 00:21:26,834
and then see
how they change over time.
405
00:21:28,291 --> 00:21:31,333
♪ ♪
406
00:21:33,166 --> 00:21:35,625
Parloff:
She talked some about currently,
407
00:21:35,709 --> 00:21:38,291
you get a blood test
maybe once a year,
408
00:21:38,375 --> 00:21:40,959
and so you get a snapshot
of what's going on.
409
00:21:41,410 --> 00:21:44,834
If you were to start doing it
every month, say,
410
00:21:44,917 --> 00:21:46,625
you would get a movie.
411
00:21:46,709 --> 00:21:48,625
(projector whirring)
412
00:21:48,709 --> 00:21:50,709
Holmes:
You have multiple frames from that movie,
413
00:21:50,792 --> 00:21:52,792
and you can begin
to see the context
414
00:21:52,875 --> 00:21:55,417
of projecting where
someone is heading.
415
00:21:55,500 --> 00:21:59,875
You're seeing changes
in laboratory data over time,
416
00:21:59,959 --> 00:22:03,792
and understanding the clinical
significance of that.
417
00:22:03,875 --> 00:22:07,917
The data can be used
in a more meaningful way.
418
00:22:08,000 --> 00:22:09,500
Parloff:
It was personalized medicine.
419
00:22:09,583 --> 00:22:12,125
Maybe you could catch
something very early.
420
00:22:12,208 --> 00:22:13,875
You know, you could catch
an early cancer,
421
00:22:13,959 --> 00:22:17,166
or you could get... you know,
when there was still time.
422
00:22:17,250 --> 00:22:20,208
This was sort of
the vast vision.
423
00:22:20,291 --> 00:22:23,458
Ryan Wistort: So,
the idea with the Edison was to stick
424
00:22:23,542 --> 00:22:26,208
the lab inside the box.
425
00:22:26,291 --> 00:22:29,000
Because it incorporates
so many different disciplines,
426
00:22:29,830 --> 00:22:30,959
it's hard to pull this off.
427
00:22:31,410 --> 00:22:32,291
(beeps)
428
00:22:32,375 --> 00:22:34,000
There's all these
different components
429
00:22:34,830 --> 00:22:35,125
that go into the machine.
430
00:22:35,208 --> 00:22:37,542
There's a centrifuge,
there's a...
431
00:22:38,333 --> 00:22:39,917
a little thing
the samples go into.
432
00:22:40,000 --> 00:22:42,410
There's a way
to prick the blood.
433
00:22:42,125 --> 00:22:43,685
All these things were
prototypes, right?
434
00:22:43,750 --> 00:22:46,792
The first thing is,
you look at what the chemists are doing.
435
00:22:46,834 --> 00:22:48,333
- Gibney: Right.
- Right?
436
00:22:48,375 --> 00:22:50,351
Because you're automating
what somebody is already doing.
437
00:22:50,375 --> 00:22:53,125
You're not inventing
something totally new.
438
00:22:53,166 --> 00:22:55,917
♪ ♪
439
00:22:56,000 --> 00:22:59,792
I'm going to have to have a kind of dance,
let's say, right?
440
00:22:59,834 --> 00:23:02,542
I'm going to have to have
this thing go to the place,
441
00:23:02,667 --> 00:23:04,750
pick up something,
drop off something,
442
00:23:04,834 --> 00:23:06,500
mix something, etcetera.
443
00:23:06,625 --> 00:23:08,333
(whirring)
444
00:23:08,375 --> 00:23:09,834
Philippides:
The idea was the pipette
445
00:23:09,959 --> 00:23:12,834
poked holes into these
little plastic containers
446
00:23:12,959 --> 00:23:14,410
with reagents in them.
447
00:23:14,125 --> 00:23:16,917
It mixes some of
the reagents with blood.
448
00:23:21,458 --> 00:23:23,101
Matje:
My group was responsible for developing
449
00:23:23,125 --> 00:23:24,500
about 60 different tests,
450
00:23:24,542 --> 00:23:27,166
and trying to get those
to work on the Edisons.
451
00:23:27,250 --> 00:23:29,750
Wistort:
The trick was how do you make it dependable,
452
00:23:29,834 --> 00:23:32,333
then how do you incorporate
it into a bigger process
453
00:23:32,375 --> 00:23:34,917
that involves these
50 milliliter samples?
454
00:23:35,000 --> 00:23:36,333
Matje:
It was a complex device.
455
00:23:36,458 --> 00:23:38,792
You know, a lot of moving parts,
and a complicated system.
456
00:23:38,834 --> 00:23:41,000
It's not easy to do
all this stuff, so it was...
457
00:23:41,830 --> 00:23:42,434
You know,
I figured we'd get there.
458
00:23:42,458 --> 00:23:45,250
We felt we were on the path
459
00:23:45,333 --> 00:23:47,667
to be able to make machines
that could do this.
460
00:23:47,750 --> 00:23:50,667
♪ ♪
461
00:23:58,125 --> 00:24:01,405
Auletta (on recording): Elizabeth Holmes,
we're on the record unless you tell me not.
462
00:24:01,458 --> 00:24:04,458
Let me begin. When you think
about yourself as a child...
463
00:24:04,542 --> 00:24:06,250
Auletta:
I had multiple interviews with her,
464
00:24:06,333 --> 00:24:10,000
but one of them was to go to a
Chinese restaurant in Palo Alto.
465
00:24:10,830 --> 00:24:11,792
And it was really good food.
466
00:24:11,875 --> 00:24:15,542
Holmes (on recording): I had the
blessing of being able to figure out
467
00:24:15,625 --> 00:24:17,792
- what I...
- (waitress speaking indistinctly)
468
00:24:17,875 --> 00:24:21,750
Holmes:
Thank you...wanted to do very early.
469
00:24:21,834 --> 00:24:25,917
And I was very interested in
the concept of creating things.
470
00:24:26,000 --> 00:24:29,750
I must've been, like, seven,
and I had a notebook
471
00:24:29,834 --> 00:24:33,166
of a complete design
for a time machine.
472
00:24:33,250 --> 00:24:35,792
It was a very detailed drawing
473
00:24:35,875 --> 00:24:38,959
of all the functionality,
in terms of the interface.
474
00:24:39,410 --> 00:24:41,333
I got really
interested in the idea
475
00:24:41,417 --> 00:24:43,583
of creating and building
something.
476
00:24:43,667 --> 00:24:46,583
But ultimately,
it became clear to me
477
00:24:46,667 --> 00:24:49,417
that the vehicle
of a business provides
478
00:24:49,500 --> 00:24:53,830
the greatest tool for being
able to affect change.
479
00:24:53,166 --> 00:24:56,208
♪ ♪
480
00:25:04,959 --> 00:25:07,291
Holmes:
I was very studious.
481
00:25:07,375 --> 00:25:09,542
I never really watched TV.
482
00:25:11,458 --> 00:25:14,875
As I went through school
and went through high school,
483
00:25:14,959 --> 00:25:19,830
my best friends were...
were books.
484
00:25:19,166 --> 00:25:22,125
I got into Moby Dick
and The Iliad and The Odyssey
485
00:25:22,208 --> 00:25:24,208
at a pretty young age.
486
00:25:26,410 --> 00:25:29,625
Understanding how
great people and great leaders
487
00:25:29,709 --> 00:25:31,917
led groups of people.
488
00:25:33,834 --> 00:25:35,709
♪ ♪
489
00:25:35,792 --> 00:25:39,166
So much changes in our society
technologically,
490
00:25:39,250 --> 00:25:44,208
but as humans,
we don't change a lot, you know?
491
00:25:53,291 --> 00:25:56,417
♪ ♪
492
00:25:59,000 --> 00:26:02,667
Phyllis Gardner: This is a high
tech atmosphere around Stanford.
493
00:26:02,750 --> 00:26:07,250
Internet, the startups,
the biotech, and medicine.
494
00:26:09,410 --> 00:26:12,000
I started on the faculty
here in 1984.
495
00:26:12,830 --> 00:26:14,000
I'm currently
a tenured professor.
496
00:26:14,830 --> 00:26:15,750
And I was on boards
of companies,
497
00:26:15,834 --> 00:26:17,500
many private
and public companies,
498
00:26:17,583 --> 00:26:19,417
and I started
a couple of companies.
499
00:26:19,500 --> 00:26:21,834
So, I tend to be sought out
500
00:26:21,917 --> 00:26:23,667
by kids who have
an interest in business.
501
00:26:23,750 --> 00:26:26,166
And people have
made fortunes.
502
00:26:26,250 --> 00:26:28,417
Students,
young people,
503
00:26:28,500 --> 00:26:30,542
turn into
multimillionaires.
504
00:26:30,625 --> 00:26:34,166
It makes for
an odd morality.
505
00:26:34,250 --> 00:26:36,000
♪ ♪
506
00:26:36,830 --> 00:26:39,166
When I was at Stanford,
I started to spend all my time
507
00:26:39,250 --> 00:26:41,750
thinking about how
you could build something
508
00:26:41,834 --> 00:26:44,792
that would change
what we know
509
00:26:44,875 --> 00:26:47,625
in terms of early detection
and prevention.
510
00:26:48,417 --> 00:26:50,792
I filed my first patent.
511
00:26:55,000 --> 00:26:57,375
Gardner: One day,
Elizabeth came to me
512
00:26:57,458 --> 00:26:59,291
and she described her idea.
513
00:27:01,000 --> 00:27:03,625
She wanted to incorporate
microfluidics
514
00:27:03,709 --> 00:27:07,291
and nanotechnology
into a patch,
515
00:27:07,375 --> 00:27:09,830
where you could
sample the blood,
516
00:27:09,166 --> 00:27:11,917
and detect an infection,
517
00:27:12,000 --> 00:27:15,333
and then at that point,
deliver antibiotics through it.
518
00:27:17,375 --> 00:27:20,750
Well, you can't do that.
It's impossible, physically.
519
00:27:20,834 --> 00:27:23,410
Antibiotics are not potent.
You cannot do that.
520
00:27:23,125 --> 00:27:25,667
There's a reason you have
a big IV bag when... Okay.
521
00:27:25,750 --> 00:27:28,410
So I said,
"Elizabeth, that's fun,
522
00:27:28,125 --> 00:27:29,959
but I don't think
that's going to work."
523
00:27:32,166 --> 00:27:34,625
She was a 19-year-old.
524
00:27:34,709 --> 00:27:37,166
She never thought
she had any limits.
525
00:27:37,250 --> 00:27:39,291
She was going to conquer
the world.
526
00:27:40,125 --> 00:27:43,417
She came back twice, I think.
527
00:27:43,500 --> 00:27:45,410
And I just really...
528
00:27:45,125 --> 00:27:47,458
"I try to help students,
but I just feel I can't help you.
529
00:27:47,542 --> 00:27:49,458
"You're not listening,
530
00:27:49,542 --> 00:27:51,959
but I'll help you find
someone else to talk to."
531
00:27:52,410 --> 00:27:54,166
♪ ♪
532
00:27:55,458 --> 00:27:58,792
Holmes:
This used to be my advisor's office.
533
00:27:58,875 --> 00:28:00,875
We got in. (laughs)
534
00:28:00,959 --> 00:28:02,643
Channing Robertson:
From the very first time I met her,
535
00:28:02,667 --> 00:28:04,792
it was very clear
she was unusual.
536
00:28:04,875 --> 00:28:07,250
I've taught thousands
of students,
537
00:28:07,333 --> 00:28:09,583
probably tens of
thousands of students,
538
00:28:09,667 --> 00:28:12,125
at Stanford,
and...
539
00:28:12,208 --> 00:28:13,667
I knew right away
540
00:28:13,750 --> 00:28:18,792
that I was dealing with
something very, very different.
541
00:28:18,875 --> 00:28:21,625
Auletta: Channing Robinson,
the head of the science department
542
00:28:21,709 --> 00:28:24,959
at Stanford, leaves his tenured
position to work for her?
543
00:28:25,410 --> 00:28:28,500
Parloff: He just thought this
woman was something special.
544
00:28:28,583 --> 00:28:30,375
You know, gazing into her eyes,
545
00:28:30,458 --> 00:28:34,834
and realizing that he was
talking to the next...
546
00:28:34,917 --> 00:28:37,830
Steve Jobs or Bill Gates.
547
00:28:37,166 --> 00:28:39,500
There were some
other names mentioned
548
00:28:39,583 --> 00:28:42,166
during the course of our
conversation, like Archimedes.
549
00:28:42,250 --> 00:28:44,291
♪ ♪
550
00:28:44,375 --> 00:28:47,417
Holmes: I actually, originally,
did not intend to drop out of Stanford,
551
00:28:47,500 --> 00:28:50,667
- but I wasn't going to any classes, and so then...
- (audience laughs)
552
00:28:50,750 --> 00:28:53,750
...logistically,
it just seemed like a waste of money.
553
00:28:54,917 --> 00:28:58,667
The question was, as a 19-year-old,
how do you go about the process
554
00:28:58,750 --> 00:29:01,333
of convincing people that
you know what you're doing,
555
00:29:01,417 --> 00:29:04,667
and that you can
pull it off. Um...
556
00:29:04,750 --> 00:29:06,667
I think the first
piece is realizing
557
00:29:06,750 --> 00:29:09,667
that it's not necessarily
about age, and...
558
00:29:09,750 --> 00:29:14,542
um, people, like Steve Jobs,
and Bill Gates,
559
00:29:14,625 --> 00:29:15,709
and the Google guys,
560
00:29:15,792 --> 00:29:17,917
and Michael Dell,
and Larry Ellison,
561
00:29:18,000 --> 00:29:19,750
and others,
have demonstrated that.
562
00:29:19,834 --> 00:29:22,166
You have to have the conviction
563
00:29:22,250 --> 00:29:24,709
in yourself to be able
to make something happen
564
00:29:24,792 --> 00:29:27,830
because, ultimately,
it's up to you.
565
00:29:33,792 --> 00:29:36,458
You know, I don't think
I would want to create
566
00:29:36,542 --> 00:29:41,166
a society where people
were not overconfident
567
00:29:41,250 --> 00:29:43,208
in what they
could achieve.
568
00:29:43,291 --> 00:29:45,166
Like who would
open a restaurant
569
00:29:45,250 --> 00:29:48,417
if that was the case,
or who would...
570
00:29:48,500 --> 00:29:49,834
who would do a startup?
571
00:29:50,500 --> 00:29:52,417
But I think this is
really the issue,
572
00:29:52,500 --> 00:29:56,166
is to say how do you
become a person of vision
573
00:29:56,250 --> 00:29:57,625
on one hand,
574
00:29:57,709 --> 00:30:00,410
and how do you
sell that vision
575
00:30:00,125 --> 00:30:01,583
on the other hand,
576
00:30:01,667 --> 00:30:04,125
but you also want to stay...
577
00:30:04,208 --> 00:30:07,500
not realistic, but, you know,
little closer to realistic
578
00:30:08,834 --> 00:30:10,291
when the task needs it.
579
00:30:10,375 --> 00:30:12,351
Gibney: You have to be able
not to buy your own bullshit.
580
00:30:12,375 --> 00:30:14,333
Yes. (laughs)
581
00:30:15,125 --> 00:30:17,830
(engines rumbling)
582
00:30:17,166 --> 00:30:20,291
♪ ♪
583
00:30:23,000 --> 00:30:25,166
Auletta:
You incorporate the company in '04.
584
00:30:25,250 --> 00:30:28,583
- Holmes: Yeah.
- What happened in the intervening nine years?
585
00:30:28,667 --> 00:30:30,709
Holmes:
Our work during that period of time
586
00:30:30,792 --> 00:30:33,830
was for pharmaceutical
companies,
587
00:30:33,166 --> 00:30:37,250
and for developing
applications for the military.
588
00:30:37,333 --> 00:30:39,750
But that model's
going to evolve now
589
00:30:39,834 --> 00:30:42,333
'cause we're at another
inflection point
590
00:30:42,417 --> 00:30:46,667
- in our life cycle...
- But are you thinking about an IPO or...
591
00:30:46,750 --> 00:30:50,208
Holmes: Well,
we really believe that there's value
592
00:30:50,291 --> 00:30:51,792
in being a private company.
593
00:30:51,875 --> 00:30:56,792
It's allowed us
to not have to talk about,
594
00:30:56,875 --> 00:31:01,250
you know, what we're doing
until it's done and introduce,
595
00:31:01,333 --> 00:31:04,333
you know, incredible
innovation without...
596
00:31:04,417 --> 00:31:07,792
Narrator: Using just her story
as the blueprint for success,
597
00:31:07,875 --> 00:31:09,959
Holmes would convince
private investors
598
00:31:10,410 --> 00:31:12,500
to put up hundreds
of millions of dollars
599
00:31:12,583 --> 00:31:16,458
without ever looking at
audited financial statements.
600
00:31:16,542 --> 00:31:20,250
We like to think that investing
is a rational equation,
601
00:31:20,333 --> 00:31:23,583
a careful balance sheet
of risk and reward.
602
00:31:23,667 --> 00:31:25,333
But in fact, investors,
603
00:31:25,417 --> 00:31:27,410
particularly ones
who come in early,
604
00:31:27,125 --> 00:31:29,410
are often guided by their gut.
605
00:31:29,125 --> 00:31:30,583
Instead of relying on facts,
606
00:31:30,667 --> 00:31:33,959
early investing can be more
like a wing and a prayer.
607
00:31:34,410 --> 00:31:37,830
The word credit comes
from the Latin word credo,
608
00:31:37,166 --> 00:31:39,959
which means "I believe."
609
00:31:40,410 --> 00:31:42,333
Some of the early
believers included
610
00:31:42,417 --> 00:31:45,542
a former head of software
at Apple, Avie Tevanian,
611
00:31:45,625 --> 00:31:48,250
Oracle's founder,
Larry Ellison,
612
00:31:48,333 --> 00:31:51,917
and a founding investor
of Oracle, Don Lucas.
613
00:31:52,000 --> 00:31:54,410
They conferred
respectability on Elizabeth,
614
00:31:54,125 --> 00:31:56,500
even though they had
no record to go on,
615
00:31:56,583 --> 00:31:59,375
just a vague belief
that business and medicine
616
00:31:59,458 --> 00:32:01,542
were in her blood.
617
00:32:01,625 --> 00:32:04,375
Lucas:
I think she probably was 21 years old,
618
00:32:04,458 --> 00:32:06,166
had no background
in business,
619
00:32:06,250 --> 00:32:09,125
but her great-grandfather
was an entrepreneur.
620
00:32:09,208 --> 00:32:10,434
So, that's on
the entrepreneur's side,
621
00:32:10,458 --> 00:32:11,685
but she was on
the medical side.
622
00:32:11,709 --> 00:32:12,917
Ah, turns out later
623
00:32:13,000 --> 00:32:15,500
the hospital in there,
where they live
624
00:32:15,583 --> 00:32:17,750
is named after her great-uncle,
625
00:32:17,834 --> 00:32:21,959
who was involved with medicine,
so she came by both of these...
626
00:32:22,458 --> 00:32:24,458
the two things
that are necessary here,
627
00:32:24,542 --> 00:32:27,792
one medicine
and the other entrepreneur...
628
00:32:29,830 --> 00:32:30,458
quite naturally.
629
00:32:32,500 --> 00:32:35,667
Tim Draper:
I remember the day Elizabeth came in,
630
00:32:35,750 --> 00:32:37,208
full of vim and vigor,
631
00:32:37,291 --> 00:32:40,125
and said, "I'm dropping
out of Stanford."
632
00:32:40,208 --> 00:32:41,583
And I knew her parents,
633
00:32:41,667 --> 00:32:44,625
and I knew her and her brother
as they were growing up.
634
00:32:44,709 --> 00:32:47,250
She was a good friend
of my daughter's.
635
00:32:47,333 --> 00:32:48,750
I said, "Do your
parents know
636
00:32:48,834 --> 00:32:50,393
you're dropping out
of Stanford?" She said,
637
00:32:50,417 --> 00:32:53,250
"Yes, yes!
And they agree, and it's a great thing.
638
00:32:53,333 --> 00:32:55,291
"And I learned at Stanford
639
00:32:55,375 --> 00:32:57,917
"how this whole health care
thing is working,
640
00:32:58,000 --> 00:32:59,750
and it's just not."
641
00:32:59,834 --> 00:33:02,000
And then she said,
"I'm going to change health care
642
00:33:02,830 --> 00:33:04,792
as we know it."
I was all over it.
643
00:33:04,875 --> 00:33:07,750
I thought that was
a great opportunity.
644
00:33:08,333 --> 00:33:10,709
Gibney: I mean,
Elizabeth was a family friend.
645
00:33:10,792 --> 00:33:13,830
You'd known her since
she was a little girl.
646
00:33:13,166 --> 00:33:14,625
Did that go
into your thinking,
647
00:33:14,709 --> 00:33:16,291
in terms of your
initial investment?
648
00:33:16,375 --> 00:33:20,417
No. We've been... I've been in
the venture business a long time.
649
00:33:20,500 --> 00:33:23,667
I was the first investor in Tesla,
first investor in Skype,
650
00:33:23,750 --> 00:33:26,959
first investor in Baidu,
first investor in Hotmail.
651
00:33:27,410 --> 00:33:28,583
I always invest early.
652
00:33:28,667 --> 00:33:30,875
I invest when I see a vision,
653
00:33:30,959 --> 00:33:32,333
I see the opportunity,
654
00:33:32,417 --> 00:33:36,417
and I see the person who
I think can make it there.
655
00:33:36,500 --> 00:33:38,959
I mean, we invest in, you know,
656
00:33:39,410 --> 00:33:42,792
a girl and a dog,
or two guys and a cat.
657
00:33:42,875 --> 00:33:46,830
We just say, "Is this person
going to dedicate their life,
658
00:33:46,166 --> 00:33:49,333
and make something
extraordinary happen?"
659
00:33:49,417 --> 00:33:52,709
And yes, in that case,
she was that person.
660
00:33:55,542 --> 00:33:58,125
So, the reality is that data
661
00:33:58,208 --> 00:34:01,410
just doesn't sit in our mind
662
00:34:01,125 --> 00:34:03,625
as much as stories do.
663
00:34:03,709 --> 00:34:07,417
It's almost like the glue
that takes all of the data,
664
00:34:07,917 --> 00:34:09,500
and even more important,
665
00:34:09,583 --> 00:34:13,125
stories have emotions
that data doesn't.
666
00:34:13,208 --> 00:34:15,410
And emotions get people to...
667
00:34:15,125 --> 00:34:18,166
to do all kinds of things,
good and bad.
668
00:34:18,250 --> 00:34:23,208
And if you think about the
people who invested in her
669
00:34:23,291 --> 00:34:25,208
with very little
amount of data,
670
00:34:25,291 --> 00:34:28,000
it's about having an emotional
appeal and about having trust,
671
00:34:28,830 --> 00:34:31,291
and believing the story,
and being moved by this,
672
00:34:31,375 --> 00:34:33,500
and being able to tell
themselves a story.
673
00:34:33,583 --> 00:34:36,667
♪ ♪
674
00:34:36,750 --> 00:34:39,267
Holmes: For 10 years, we did this work.
We didn't have a website.
675
00:34:39,291 --> 00:34:41,625
We never put out
a press release.
676
00:34:41,709 --> 00:34:43,625
It was completely heads down.
677
00:34:43,709 --> 00:34:46,125
When we got to a point
in which we realized
678
00:34:46,208 --> 00:34:50,410
that what we were doing
could serve individuals,
679
00:34:50,125 --> 00:34:52,166
I wanted to find the people
680
00:34:52,250 --> 00:34:55,458
who were just
strategically brilliant.
681
00:34:57,208 --> 00:34:59,625
General Mattis,
who was former
682
00:34:59,709 --> 00:35:02,834
CENTCON Commander,
is one of our board members.
683
00:35:02,917 --> 00:35:04,709
Dick Kovacevich, who is
684
00:35:04,792 --> 00:35:07,750
the former CEO of
Wells Fargo is another.
685
00:35:07,834 --> 00:35:10,410
Sam Nunn has done
some incredible work
686
00:35:10,125 --> 00:35:13,458
on nuclear threats
as well as biothreats.
687
00:35:13,542 --> 00:35:15,875
Bill Perry,
former secretary of defense.
688
00:35:15,959 --> 00:35:18,792
Henry Kissinger,
former secretary of state.
689
00:35:18,875 --> 00:35:20,542
And George Shultz,
690
00:35:20,625 --> 00:35:23,208
who was secretary of state
691
00:35:23,291 --> 00:35:28,000
and labor
and secretary of treasury.
692
00:35:28,830 --> 00:35:30,959
George: About three years ago,
I looked at her and I said, "Well,
693
00:35:31,410 --> 00:35:33,959
I'm about to have a meeting with
a friend of my granddaughter."
694
00:35:34,410 --> 00:35:35,500
(audience laughing)
695
00:35:35,583 --> 00:35:37,250
- Yes.
- As soon as she started talking,
696
00:35:37,333 --> 00:35:38,917
I did a double take...
697
00:35:39,000 --> 00:35:41,917
Tyler Shultz: I first met Elizabeth
in my grandfather's living room.
698
00:35:42,000 --> 00:35:44,184
So, he had called me up and
said that he was going to have
699
00:35:44,208 --> 00:35:47,417
some brilliant woman over
to have a discussion.
700
00:35:47,500 --> 00:35:50,830
He thought that
I would be interested
701
00:35:50,166 --> 00:35:52,250
in coming,
so I went to his house.
702
00:35:52,333 --> 00:35:54,250
It was me,
my grandfather, Elizabeth,
703
00:35:54,333 --> 00:35:56,917
and Dianne Feinstein
was there as well.
704
00:35:57,500 --> 00:36:01,375
Elizabeth kind of pitched
her dream of changing the way
705
00:36:01,458 --> 00:36:04,166
diagnostics is done, really
revolutionizing the field.
706
00:36:04,250 --> 00:36:06,750
Yeah, I was totally
gung-ho about Theranos.
707
00:36:06,834 --> 00:36:09,625
I was really excited about
what she was talking about.
708
00:36:09,709 --> 00:36:12,208
I really wanted to know
what the technology was.
709
00:36:12,834 --> 00:36:14,667
And I actually asked her,
in that meeting,
710
00:36:14,750 --> 00:36:16,458
if I could intern
there over the summer.
711
00:36:16,542 --> 00:36:18,583
I said,
do you guys take interns?
712
00:36:18,667 --> 00:36:21,208
Like, I want to work on this.
This sounds amazing.
713
00:36:21,291 --> 00:36:23,333
We think that...
714
00:36:24,410 --> 00:36:25,792
there's going to be a revolution
715
00:36:25,875 --> 00:36:27,583
in preventive medicine.
716
00:36:27,667 --> 00:36:31,166
I mean, he had a really close
relationship with Elizabeth.
717
00:36:31,250 --> 00:36:34,750
She was almost like...
becoming part of the family.
718
00:36:34,834 --> 00:36:38,458
She was coming to our birthday
parties and Christmases.
719
00:36:38,542 --> 00:36:41,125
George: We think this is one
of the most optimistic things
720
00:36:41,208 --> 00:36:42,625
out there
721
00:36:42,709 --> 00:36:45,875
about the health care system
and its costs and its problems.
722
00:36:45,959 --> 00:36:49,709
Auletta: You talk to George Shultz.
He's a very impressive man.
723
00:36:49,792 --> 00:36:52,834
And I was impressed that he
adopted her like a daughter.
724
00:36:52,917 --> 00:36:54,625
He really believed in her.
725
00:36:54,709 --> 00:36:57,166
Gibney: From the outside,
all you're thinking is,
726
00:36:57,250 --> 00:36:59,000
wow,
what a board!
727
00:36:59,830 --> 00:37:01,000
Right? I mean,
it's just impressive.
728
00:37:01,830 --> 00:37:03,583
And they were really...
And I talked to most of them.
729
00:37:03,667 --> 00:37:05,787
They were impressed with...
really impressed with her.
730
00:37:05,834 --> 00:37:07,976
Auletta: This is General Mattis.
I assume we're on the record,
731
00:37:08,000 --> 00:37:10,101
unless you tell me not, and
I'll shut off this recorder.
732
00:37:10,125 --> 00:37:11,625
- But...
- Mattis: Okay.
733
00:37:11,709 --> 00:37:13,750
Auletta:
When you think of Elizabeth,
734
00:37:13,834 --> 00:37:15,834
what are the first words
that come to your mind?
735
00:37:15,917 --> 00:37:18,500
Mattis:
First is integrity,
736
00:37:18,583 --> 00:37:20,542
uh, competence,
737
00:37:20,625 --> 00:37:23,792
and competence is both
technical, scientific,
738
00:37:23,875 --> 00:37:26,667
but also focused
on human rights
739
00:37:26,750 --> 00:37:29,208
in the most classical
sense of what
740
00:37:29,291 --> 00:37:30,834
human rights are about.
741
00:37:30,917 --> 00:37:33,917
And all of a sudden,
you have the ability to know
742
00:37:34,000 --> 00:37:36,375
if someone is ill
or not. I mean,
743
00:37:36,458 --> 00:37:39,583
literally,
within minutes of taking...
744
00:37:39,667 --> 00:37:41,875
you know, a drop of blood.
745
00:37:41,959 --> 00:37:44,375
And I mean, she is really...
746
00:37:44,458 --> 00:37:47,959
a revolutionary
in the truest sense.
747
00:37:49,291 --> 00:37:52,542
It was quite amazing to spend
time with these people.
748
00:37:52,625 --> 00:37:54,875
They were talking about her
as if she were Beethoven.
749
00:37:54,959 --> 00:37:58,125
("Moonlight Sonata" playing)
750
00:38:00,959 --> 00:38:03,375
As if she was
this rare creature
751
00:38:03,458 --> 00:38:07,410
that maybe one in a century
or two in a century come along,
752
00:38:07,125 --> 00:38:09,834
who really can
change the world.
753
00:38:12,750 --> 00:38:14,875
And I remember when
I interviewed Henry Kissinger,
754
00:38:14,959 --> 00:38:17,830
I didn't trust him
on medical stuff,
755
00:38:17,166 --> 00:38:20,458
not to mention on Cambodia,
but... (laughs)
756
00:38:20,542 --> 00:38:21,917
But when I asked him about her,
757
00:38:22,000 --> 00:38:23,208
he described...
758
00:38:23,291 --> 00:38:25,208
Kissinger:
Excellent businesswoman.
759
00:38:25,291 --> 00:38:28,709
Let me see that I can put
this on speaker for a minute.
760
00:38:28,792 --> 00:38:31,000
- Be easier for me.
- Auletta: Okay.
761
00:38:34,166 --> 00:38:36,542
Kissinger: Yeah, but
I don't know how to do that.
762
00:38:36,625 --> 00:38:37,917
(Auletta laughs)
763
00:38:38,000 --> 00:38:39,875
- You put it on ho...
- (receiver clatters)
764
00:38:39,959 --> 00:38:42,542
- Kissinger: How about it now?
- I hear you loud and clear.
765
00:38:42,625 --> 00:38:44,166
- You okay?
- Kissinger: Perfect.
766
00:38:44,250 --> 00:38:47,333
Auletta: What's your impression
of how she runs the board?
767
00:38:47,834 --> 00:38:50,333
(Kissinger speaking)
768
00:38:56,792 --> 00:39:00,291
Auletta: I'm told you once said
that these board meetings,
769
00:39:00,375 --> 00:39:02,333
which go on all day...
770
00:39:02,417 --> 00:39:04,542
(Kissinger speaking)
771
00:39:10,959 --> 00:39:13,159
Parloff: You know,
whatever you think of Henry Kissinger,
772
00:39:13,208 --> 00:39:16,625
he's met a lot of leaders,
he's met a lot of world leaders,
773
00:39:16,709 --> 00:39:18,291
he met a lot
of corporate leaders.
774
00:39:18,375 --> 00:39:20,410
I thought he might be a judge,
775
00:39:20,125 --> 00:39:22,625
but the truth is that
776
00:39:22,709 --> 00:39:26,458
none of these people were really
in a position to know what...
777
00:39:26,542 --> 00:39:29,792
- Gibney: To judge 'cause they didn't have the qualifications.
- Yeah. No. No.
778
00:39:29,875 --> 00:39:32,410
She didn't really
want scientific input
779
00:39:32,125 --> 00:39:34,333
from what I could determine.
780
00:39:34,417 --> 00:39:36,667
Engineering a bit more
781
00:39:36,750 --> 00:39:38,792
'cause she was inventing
an engineering device,
782
00:39:38,875 --> 00:39:40,250
but not medicine.
783
00:39:40,333 --> 00:39:43,333
She aligned herself
with very powerful older men
784
00:39:43,417 --> 00:39:47,750
who seemed to succumb
to a certain charm, and...
785
00:39:47,834 --> 00:39:51,375
those powerful men
could influence people
786
00:39:51,458 --> 00:39:52,917
in the government,
787
00:39:53,000 --> 00:39:55,458
influence
the Department of Defense.
788
00:39:55,542 --> 00:39:59,375
Auletta: When I asked her was this all
about getting government contracts,
789
00:39:59,458 --> 00:40:01,667
she danced around
my questions about that.
790
00:40:01,750 --> 00:40:04,000
Holmes (on recording):
Everything that we're doing
791
00:40:04,830 --> 00:40:07,333
may go into certain work
we do for the military,
792
00:40:07,417 --> 00:40:09,834
which we really couldn't
put on the record.
793
00:40:09,917 --> 00:40:12,166
Well, off the record,
we were doing some work
794
00:40:12,250 --> 00:40:14,834
for the military,
which we can talk about off the record.
795
00:40:14,917 --> 00:40:16,667
Auletta:
Why would that be off the record?
796
00:40:16,750 --> 00:40:19,000
You know, generally,
our philosophy on these things is
797
00:40:19,830 --> 00:40:21,500
talk about it if there's
a purpose to talking about it,
798
00:40:21,583 --> 00:40:22,750
and there just...
799
00:40:22,834 --> 00:40:25,000
Auletta: So,
could you say anything about
800
00:40:25,830 --> 00:40:27,458
the military contracts
you have? I mean...
801
00:40:28,750 --> 00:40:31,375
- Holmes: No. (laughs)
- (Auletta laughs)
802
00:40:31,458 --> 00:40:34,830
When you... I'm going to make
you feel guilty at some point.
803
00:40:34,166 --> 00:40:38,830
Holmes: You already have.
You're good at it too.
804
00:40:38,166 --> 00:40:40,542
Narrator: In conversations,
Elizabeth suggested
805
00:40:40,625 --> 00:40:43,410
that she had contracts
with the military.
806
00:40:43,125 --> 00:40:44,834
In a mock-up of
marketing materials,
807
00:40:44,917 --> 00:40:47,750
Theranos invented a quote
from General Mattis
808
00:40:47,834 --> 00:40:49,709
about a battle plan
to use Edisons
809
00:40:49,792 --> 00:40:52,583
on wounded soldiers
in combat zones,
810
00:40:52,667 --> 00:40:54,417
but this never happened.
811
00:40:54,500 --> 00:40:57,875
Before permitting Theranos to
use the machines on soldiers,
812
00:40:57,959 --> 00:41:01,000
Pentagon officials wanted
to run their own tests,
813
00:41:01,830 --> 00:41:02,583
but Elizabeth declined.
814
00:41:02,667 --> 00:41:05,250
She had a policy of
controlling demonstrations
815
00:41:05,333 --> 00:41:07,830
and tightly guarding access
816
00:41:07,166 --> 00:41:09,458
to the Edison prototypes.
817
00:41:09,542 --> 00:41:10,875
Auletta:
I pressed them
818
00:41:10,959 --> 00:41:14,830
repeatedly, and I wasn't
allowed, and finally,
819
00:41:14,166 --> 00:41:17,375
I persisted in asking.
"I need to see the machine."
820
00:41:17,458 --> 00:41:19,542
And she said to me,
821
00:41:19,625 --> 00:41:21,583
"All right, we'll let
you see the machine,
822
00:41:21,667 --> 00:41:25,625
but you have to agree not
to describe the machine."
823
00:41:26,500 --> 00:41:29,542
♪ ♪
824
00:41:34,583 --> 00:41:36,792
It was downstairs,
825
00:41:36,875 --> 00:41:40,625
in an area you couldn't see
from all the glassed offices.
826
00:41:46,166 --> 00:41:49,250
The lab is a large,
labyrinthian place
827
00:41:49,333 --> 00:41:51,875
bustling with chemists
and technicians,
828
00:41:51,959 --> 00:41:54,410
and housing rows of machines,
829
00:41:54,125 --> 00:41:56,458
each easy for
a single person to lift,
830
00:41:56,542 --> 00:41:59,417
in which the container
of blood is placed.
831
00:42:00,709 --> 00:42:03,125
What exactly happens
in the machine
832
00:42:03,208 --> 00:42:05,291
is treated as a state secret,
833
00:42:05,375 --> 00:42:07,917
and Holmes's description
of the process
834
00:42:08,000 --> 00:42:10,000
was comically vague.
835
00:42:10,917 --> 00:42:14,625
Holmes:
A chemistry is performed,
836
00:42:14,709 --> 00:42:16,750
so a chemical reaction occurs
837
00:42:16,834 --> 00:42:18,750
and generates a signal
838
00:42:18,834 --> 00:42:22,830
from the chemical interaction
with the sample,
839
00:42:22,166 --> 00:42:25,830
which is then translated
into a result...
840
00:42:25,166 --> 00:42:27,333
"Which is then
reviewed by certified
841
00:42:27,417 --> 00:42:29,291
laboratory personnel."
842
00:42:30,000 --> 00:42:33,625
End quote. She added
that thanks to, quote...
843
00:42:33,709 --> 00:42:35,458
Holmes:
Miniaturization
844
00:42:35,542 --> 00:42:39,667
"and associated automation
that we're able to...
845
00:42:39,750 --> 00:42:41,834
handle these tiny samples.
846
00:42:41,917 --> 00:42:45,250
♪ ♪
847
00:42:52,667 --> 00:42:55,750
(applauding)
848
00:42:58,410 --> 00:43:00,667
All right, so...
849
00:43:00,750 --> 00:43:02,542
Comments? Sunny?
850
00:43:04,830 --> 00:43:06,417
So, I just want
to expand a little bit
851
00:43:06,500 --> 00:43:08,667
on a comment
that Elizabeth made.
852
00:43:08,750 --> 00:43:12,250
You know, we are a very
conservative company
853
00:43:12,333 --> 00:43:13,917
because we think
854
00:43:14,000 --> 00:43:17,542
that you should get things done
before you talk about them.
855
00:43:17,625 --> 00:43:20,208
Right? And that's
the culture we have created.
856
00:43:20,291 --> 00:43:21,792
So, I just want
all of you to remember
857
00:43:21,875 --> 00:43:23,795
that when we come to work
every day that we carry
858
00:43:23,834 --> 00:43:27,500
that sense of mission in your
hearts every single day...
859
00:43:27,583 --> 00:43:29,208
Matje:
Sunny was very successful
860
00:43:29,291 --> 00:43:31,709
in the late '90s
with a tech company
861
00:43:31,792 --> 00:43:33,375
that sold for a lot of money.
862
00:43:33,458 --> 00:43:35,643
He seemed kind of like a Mark Cuban
character, potentially, to me,
863
00:43:35,667 --> 00:43:38,170
in some ways, where he was at
the right place, the right time.
864
00:43:38,410 --> 00:43:40,917
Made a lot of money.
865
00:43:41,000 --> 00:43:43,709
His expertise was
software and IT.
866
00:43:43,792 --> 00:43:45,552
What we are doing is
really, really difficult
867
00:43:45,625 --> 00:43:48,750
because we're going
against an entire system
868
00:43:48,834 --> 00:43:51,542
that doesn't believe
that prevention is possible.
869
00:43:51,625 --> 00:43:54,917
I always felt like Sunny
was making a deal, you know?
870
00:43:55,000 --> 00:43:58,417
Like, he knew the technology,
but just enough to sell it.
871
00:43:58,500 --> 00:44:02,410
To him, this was another home
run that he was going to hit.
872
00:44:02,125 --> 00:44:03,333
♪ ♪
873
00:44:03,417 --> 00:44:05,709
Auletta:
He was 49 and she was 30,
874
00:44:05,792 --> 00:44:08,917
but she was the dominant
figure in that relationship.
875
00:44:09,000 --> 00:44:10,875
And when he talked about her,
876
00:44:10,959 --> 00:44:12,959
he talked about her
in a very deferential way,
877
00:44:13,410 --> 00:44:14,142
that she was kind of a genius.
878
00:44:14,166 --> 00:44:16,583
When he spoke about Elizabeth,
879
00:44:16,667 --> 00:44:20,583
he was really...
reverential.
880
00:44:20,667 --> 00:44:25,208
"Elizabeth is the most important
inventor of our times."
881
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,
882
00:44:33,458 --> 00:44:39,333
and so he, I think, found this vehicle
for him to advance himself in her,
883
00:44:39,417 --> 00:44:41,542
and, you know, she was
on board for it, too.
884
00:44:44,208 --> 00:44:47,917
She lived with him
at some condo in Palo Alto.
885
00:44:48,000 --> 00:44:50,291
I thought that
there was definitely
886
00:44:50,375 --> 00:44:52,542
something going on
behind the scenes there.
887
00:44:52,625 --> 00:44:54,125
They certainly
would leave together,
888
00:44:54,208 --> 00:44:56,166
they'd come in
at similar times.
889
00:44:56,250 --> 00:44:58,830
They're always
talking to each other,
890
00:44:58,166 --> 00:45:00,375
offline, online,
in meetings,
891
00:45:00,458 --> 00:45:02,875
outside of meetings.
They were very close.
892
00:45:04,208 --> 00:45:06,750
It wasn't uncommon
for Elizabeth and Sunny
893
00:45:06,834 --> 00:45:09,125
to go to the Silicon Valley
airport
894
00:45:09,208 --> 00:45:10,333
and go off to some meeting.
895
00:45:10,417 --> 00:45:12,542
They were going to go
sell this thing,
896
00:45:12,625 --> 00:45:15,208
go make a deal. (laughs)
897
00:45:15,291 --> 00:45:17,959
(jet roaring)
898
00:45:21,417 --> 00:45:25,458
Narrator: Without disclosing their
romantic relationship to investors,
899
00:45:25,542 --> 00:45:29,000
Elizabeth and Sunny flew off
together to corporate presentations,
900
00:45:29,830 --> 00:45:33,458
touting the potential
of the Edison prototypes.
901
00:45:33,542 --> 00:45:36,917
One company, Walgreens,
loved the pitch.
902
00:45:38,410 --> 00:45:39,792
In this 2010 PowerPoint,
903
00:45:39,875 --> 00:45:43,410
Theranos showcased
an early version of Edison,
904
00:45:43,125 --> 00:45:44,667
a portable
blood testing machine
905
00:45:44,750 --> 00:45:48,917
that could be deployed in
pharmacies all over the world.
906
00:45:49,000 --> 00:45:50,625
Theranos boasted
the device could,
907
00:45:50,709 --> 00:45:52,792
"eliminate the need for a lab,"
908
00:45:52,875 --> 00:45:55,291
by doing up
to 200 tests in minutes
909
00:45:55,375 --> 00:45:58,333
from a finger-prick drop
of capillary blood.
910
00:45:58,417 --> 00:46:02,000
It wasn't true then,
but once Walgreens signed a contract,
911
00:46:02,830 --> 00:46:04,959
Theranos struggled to make
it true, constantly changing
912
00:46:05,410 --> 00:46:08,291
the machine's color,
shape, and mechanics.
913
00:46:08,375 --> 00:46:10,583
Strangely,
Walgreens never looked
914
00:46:10,667 --> 00:46:13,830
inside any version
of the magic box
915
00:46:13,166 --> 00:46:17,291
to see if it could deliver
what Theranos promised.
916
00:46:17,375 --> 00:46:19,375
Holmes:
There's a great Martin Luther King quote.
917
00:46:19,458 --> 00:46:21,792
"Take the first step in faith.
918
00:46:21,875 --> 00:46:23,583
"You don't have to see
the whole staircase,
919
00:46:23,667 --> 00:46:25,208
just take the first step."
Right?
920
00:46:25,291 --> 00:46:28,291
And this is...
this is the first step.
921
00:46:29,291 --> 00:46:31,750
Gibney: So, talk to me a little
bit about the Edison machine.
922
00:46:31,834 --> 00:46:34,000
How would you say it
was working in terms of
923
00:46:34,830 --> 00:46:35,792
the vision versus
the reality?
924
00:46:35,875 --> 00:46:37,834
(laughs)
925
00:46:39,000 --> 00:46:40,208
Uh, poorly.
926
00:46:40,291 --> 00:46:41,458
(machine whirring)
927
00:46:41,542 --> 00:46:43,222
We couldn't regulate
temperature very well.
928
00:46:43,250 --> 00:46:46,830
We couldn't reproducibly
transfer fluids.
929
00:46:46,166 --> 00:46:48,458
We had all sorts
of design changes constantly
930
00:46:48,542 --> 00:46:49,935
that we were trying
to fight against,
931
00:46:49,959 --> 00:46:52,709
so it was a comedy of errors
in a lot of ways.
932
00:46:52,792 --> 00:46:54,875
Nugent:
The original concept was to make a machine
933
00:46:54,959 --> 00:46:57,333
that, at least then,
the chemists could work on
934
00:46:57,417 --> 00:46:59,166
to further develop chemistry.
935
00:46:59,250 --> 00:47:02,291
Over time, we were
able to run a sequence
936
00:47:02,375 --> 00:47:04,125
and we were able
to get results.
937
00:47:04,208 --> 00:47:07,000
Getting results
means, you know,
938
00:47:07,830 --> 00:47:10,250
I get a signal proportional
to what I'm putting in.
939
00:47:10,333 --> 00:47:12,750
It doesn't mean it's ready for prime time,
right?
940
00:47:12,834 --> 00:47:14,750
♪ ♪
941
00:47:14,834 --> 00:47:16,542
(machine whirring)
942
00:47:16,625 --> 00:47:19,750
Philippides: You're handling a
lot of fluid in the machine.
943
00:47:19,834 --> 00:47:24,458
Things got blood spilled
all over them and got gunky.
944
00:47:24,542 --> 00:47:26,125
Some of the donors
that we had were,
945
00:47:26,208 --> 00:47:27,917
you know,
just people off the street
946
00:47:28,000 --> 00:47:30,709
who need money,
and I imagine that, you know,
947
00:47:30,792 --> 00:47:32,417
there probably
was a fair amount
948
00:47:32,500 --> 00:47:34,125
of hepatitis
and things like that.
949
00:47:34,208 --> 00:47:37,458
And the device would freeze up
in the middle of running a test,
950
00:47:37,542 --> 00:47:41,375
and then I would have to reach
in there with my hands.
951
00:47:41,458 --> 00:47:43,458
There were needles
within the device
952
00:47:43,542 --> 00:47:45,583
that could puncture skin,
953
00:47:45,667 --> 00:47:47,000
and there's reagents
954
00:47:47,830 --> 00:47:49,834
and blood and everything
spilling all over the place.
955
00:47:49,917 --> 00:47:52,458
Blood that's just sitting there
in the bottom of the vessel,
956
00:47:52,542 --> 00:47:55,542
evaporating into
the air in the room.
957
00:47:55,625 --> 00:47:57,792
It was a mess inside.
958
00:47:57,875 --> 00:48:00,208
Tyler:
Pieces of the device would literally fall off
959
00:48:00,291 --> 00:48:01,750
in the middle of testing.
960
00:48:01,834 --> 00:48:03,667
Centrifuges exploding
inside of it
961
00:48:03,750 --> 00:48:06,830
and things like that.
962
00:48:06,166 --> 00:48:07,810
Philippides: Obviously,
they didn't want anybody
963
00:48:07,834 --> 00:48:10,542
to actually see what
was going on in there.
964
00:48:12,291 --> 00:48:14,834
Matje: So, when we had demos,
they would bring investors
965
00:48:14,917 --> 00:48:18,625
or executives from some company
to a room which would have
966
00:48:18,709 --> 00:48:21,000
different styles of Edison
they were prototyping.
967
00:48:21,830 --> 00:48:23,542
(projector whirring)
968
00:48:23,625 --> 00:48:25,792
♪ ♪
969
00:48:25,875 --> 00:48:28,410
They would do a fingerstick
on the executives,
970
00:48:28,125 --> 00:48:30,417
so they'd take
a fingerstick of blood.
971
00:48:32,500 --> 00:48:35,125
They would put the blood
into the cartridge,
972
00:48:35,208 --> 00:48:37,834
and then they would put
the cartridge into this Edison.
973
00:48:37,917 --> 00:48:40,410
(clicking)
974
00:48:40,625 --> 00:48:42,417
(whirring)
975
00:48:42,500 --> 00:48:44,893
They'd walk the executives out of
the room to go give them a tour,
976
00:48:44,917 --> 00:48:46,893
or to go have a meeting,
or go have lunch or whatever,
977
00:48:46,917 --> 00:48:49,500
and immediately afterwards,
an engineer would run in,
978
00:48:49,583 --> 00:48:51,423
grab the cartridge
and bring it out to the lab,
979
00:48:51,458 --> 00:48:55,750
where my team would do
the assays at the bench.
980
00:48:55,834 --> 00:48:59,291
We were on call,
so this could be done in an hour.
981
00:48:59,375 --> 00:49:01,875
We got reasonable data
every time,
982
00:49:01,959 --> 00:49:03,625
and then we would
get those results,
983
00:49:03,709 --> 00:49:06,291
the engineer would run
into the room with the results,
984
00:49:06,375 --> 00:49:08,184
and these guys would come
back in and they'd say,
985
00:49:08,208 --> 00:49:10,583
"Well, here's your results
from running our tests."
986
00:49:13,959 --> 00:49:16,875
We had listed on the webpage,
like, 200 different assays,
987
00:49:16,959 --> 00:49:21,458
but we had no more than half of those
actually validated to be working,
988
00:49:21,542 --> 00:49:25,250
even in the lab at that point,
let alone on the Edisons.
989
00:49:25,333 --> 00:49:28,830
Nugent:
Because it's trying to do multiple analyses,
990
00:49:28,166 --> 00:49:31,250
you need so much hardware
inside the machine,
991
00:49:31,333 --> 00:49:33,750
it was totally impractical.
992
00:49:33,834 --> 00:49:35,792
Wistort:
They were very adamant about
993
00:49:35,875 --> 00:49:39,250
the machine being this big.
It's gotta be this big.
994
00:49:39,333 --> 00:49:41,125
And I said,
995
00:49:41,834 --> 00:49:43,291
"We can't do that.
996
00:49:43,375 --> 00:49:44,750
"The laws of physics just
997
00:49:44,834 --> 00:49:46,917
"are not going to permit
us to cram all the stuff
998
00:49:47,000 --> 00:49:49,583
"that we've decided needs to go
in there into this little box.
999
00:49:49,667 --> 00:49:52,250
Can the box be bigger?"
1000
00:49:52,333 --> 00:49:55,333
And a common
response at Theranos
1001
00:49:55,417 --> 00:49:56,750
was something
along the lines
1002
00:49:56,834 --> 00:49:58,208
of, "Well, maybe
you're not...
1003
00:49:58,291 --> 00:50:00,458
"maybe you're not a
Silicon Valley person.
1004
00:50:00,542 --> 00:50:02,823
"You should go work for some
other company if you don't...
1005
00:50:02,875 --> 00:50:04,142
"if you don't
believe in the vision
1006
00:50:04,166 --> 00:50:05,834
of the product."
1007
00:50:05,917 --> 00:50:07,375
And what would start off
1008
00:50:07,458 --> 00:50:10,542
as a very serious brainstorming
meeting would turn into
1009
00:50:10,625 --> 00:50:12,250
a two-hour conversation about
1010
00:50:12,333 --> 00:50:15,625
the name of the cloud that's
going to process the information.
1011
00:50:15,709 --> 00:50:18,959
It's like, time out. How big
does this box need to be
1012
00:50:19,410 --> 00:50:20,792
to abide by the laws
of thermodynamics,
1013
00:50:20,875 --> 00:50:22,792
and actually function,
and saves people's lives?
1014
00:50:22,875 --> 00:50:26,166
Maybe that's more important
than the name of the cloud
1015
00:50:26,250 --> 00:50:28,208
that processes
the information,
1016
00:50:28,291 --> 00:50:30,542
which I think ended up
being Yoda or something.
1017
00:50:31,830 --> 00:50:33,709
- Gibney: Was it Yoda?
- (laughing): I think so.
1018
00:50:33,792 --> 00:50:37,500
Interviewer: What's your favorite
sound from the movie Star Wars?
1019
00:50:38,333 --> 00:50:39,792
Yoda.
1020
00:50:39,875 --> 00:50:41,792
Interviewer:
What does Yoda sound like?
1021
00:50:41,875 --> 00:50:45,000
Yoda sounds like,
"Do or do not. There is no try."
1022
00:50:45,830 --> 00:50:47,417
♪ ♪
1023
00:50:47,500 --> 00:50:51,333
Wistort: You can't just bend your
way around the laws of physics.
1024
00:50:51,417 --> 00:50:53,583
You can't just have a
great marketing campaign,
1025
00:50:53,667 --> 00:50:55,500
and then get around
these things.
1026
00:50:55,583 --> 00:50:57,500
(indistinct chatter)
1027
00:50:57,583 --> 00:51:00,333
Matje: Sunny and Elizabeth,
they didn't care
1028
00:51:00,417 --> 00:51:02,917
that we figure out what's
not working, or make sure
1029
00:51:03,000 --> 00:51:06,125
that we can actually solve
these problems in a real way.
1030
00:51:06,208 --> 00:51:09,410
Nugent: They always seemed to
think that everything could happen
1031
00:51:09,125 --> 00:51:10,917
very fast,
and if you said no,
1032
00:51:11,000 --> 00:51:13,000
then they just went around
to find the next person
1033
00:51:13,830 --> 00:51:14,125
who would say yes.
1034
00:51:14,792 --> 00:51:17,667
And generally, they tended
to start become younger
1035
00:51:17,750 --> 00:51:19,667
and less experienced, right?
1036
00:51:19,750 --> 00:51:21,583
"We're going to disrupt.
We don't want people
1037
00:51:21,667 --> 00:51:23,959
"who are stuck in
the old ways of actually,
1038
00:51:24,410 --> 00:51:26,375
"you know, validating
experiments, and, you know,
1039
00:51:26,458 --> 00:51:29,667
doing things properly
with documentation."
1040
00:51:29,750 --> 00:51:31,875
♪ ♪
1041
00:51:31,959 --> 00:51:34,625
Narrator: One of those people
who wanted things done properly
1042
00:51:34,709 --> 00:51:36,125
was Ian Gibbons.
1043
00:51:36,208 --> 00:51:39,208
The first experienced
scientist hired by Theranos,
1044
00:51:39,291 --> 00:51:41,250
he was an expert
in blood testing
1045
00:51:41,333 --> 00:51:44,417
and had done much of the work
on the company's key patents,
1046
00:51:44,500 --> 00:51:47,291
to which Elizabeth
had attached her name.
1047
00:51:48,125 --> 00:51:50,500
Nugent:
Ian was a Cambridge PhD.
1048
00:51:50,583 --> 00:51:53,500
He knew things the rest
of us didn't know.
1049
00:51:53,583 --> 00:51:56,959
He would work with some of the
younger chemists and scientists,
1050
00:51:57,410 --> 00:51:58,434
and help them
with their experiments,
1051
00:51:58,458 --> 00:51:59,959
help them to design
their experiments,
1052
00:52:00,410 --> 00:52:02,417
help them to analyze their data,
interpret their data, etc.
1053
00:52:02,500 --> 00:52:05,709
He was just a wealth
of knowledge, and it was,
1054
00:52:05,792 --> 00:52:08,792
you know, at the time, it kind of evolved,
I knew him for two years,
1055
00:52:08,875 --> 00:52:12,410
and my opinion of him evolved
only just to be better
1056
00:52:12,125 --> 00:52:14,476
because he was just trying to
make the best of his situation.
1057
00:52:14,500 --> 00:52:18,458
Like, what I got to see there,
I got to see how marginalized he was.
1058
00:52:19,291 --> 00:52:20,834
Nugent:
So, in about 2012,
1059
00:52:20,917 --> 00:52:22,583
Ian didn't have
an office anymore.
1060
00:52:22,667 --> 00:52:24,834
I think he felt
slighted by that.
1061
00:52:24,917 --> 00:52:28,709
He wasn't involved
with decision-making.
1062
00:52:28,792 --> 00:52:32,166
He would look at data and he
said things were not working.
1063
00:52:32,500 --> 00:52:35,375
Ian really got into
bad shape with Sunny...
1064
00:52:35,458 --> 00:52:37,250
both Sunny and Elizabeth,
1065
00:52:37,333 --> 00:52:41,333
because there's so many things
wrong with that technology.
1066
00:52:42,625 --> 00:52:46,417
And isn't that the point of
someone like that being there,
1067
00:52:46,500 --> 00:52:49,792
to tell them why
it wasn't going to work?
1068
00:52:49,875 --> 00:52:53,166
Narrator: In early 2013,
Theranos tried to prevent Ian
1069
00:52:53,250 --> 00:52:55,875
from having to testify
in a patent lawsuit.
1070
00:52:55,959 --> 00:52:58,125
If he were to give evidence
that Elizabeth wasn't
1071
00:52:58,208 --> 00:52:59,709
the inventor she claimed to be,
1072
00:52:59,792 --> 00:53:02,959
some of the company's
patents might be invalidated.
1073
00:53:03,410 --> 00:53:05,410
As the date of his
deposition approached,
1074
00:53:05,125 --> 00:53:08,166
he drank heavily and fell
into a deep depression,
1075
00:53:08,250 --> 00:53:11,375
afraid that honesty
might cost him his job.
1076
00:53:12,166 --> 00:53:14,291
Nugent:
Some time in 2013,
1077
00:53:14,375 --> 00:53:17,000
he wasn't in work anymore.
1078
00:53:17,830 --> 00:53:18,542
Elizabeth told him
to stay at home
1079
00:53:18,625 --> 00:53:20,750
because I guess he was
saying things aren't working.
1080
00:53:20,834 --> 00:53:22,208
That was what
the story I was told.
1081
00:53:22,291 --> 00:53:25,959
Ian asked me if he thought
that he was going to be fired,
1082
00:53:26,410 --> 00:53:28,410
and I told him yes.
1083
00:53:28,125 --> 00:53:29,834
Unfortunately.
1084
00:53:29,917 --> 00:53:32,959
And that was the night
he killed himself.
1085
00:53:33,410 --> 00:53:37,166
He was so distraught
over this stupid, um...
1086
00:53:37,250 --> 00:53:39,625
inter... uh, this...
1087
00:53:39,709 --> 00:53:42,542
patent case,
misappropriation case,
1088
00:53:43,830 --> 00:53:48,333
and... not knowing what he was going
to do with the rest of his life,
1089
00:53:48,417 --> 00:53:50,959
and that's why
he committed suicide.
1090
00:53:51,667 --> 00:53:53,583
Gibney:
What was the reaction of the company
1091
00:53:53,667 --> 00:53:56,166
after Ian
committed suicide?
1092
00:53:56,250 --> 00:54:00,000
Um, I don't know because
they never communicated with me,
1093
00:54:00,830 --> 00:54:04,667
except to ask me to send back
his confidential stuff.
1094
00:54:04,750 --> 00:54:06,834
♪ ♪
1095
00:54:06,917 --> 00:54:11,291
I brought back his documents
that he had at home,
1096
00:54:13,410 --> 00:54:15,291
and left them
at the front desk.
1097
00:54:16,625 --> 00:54:19,417
Gibney: Did you ever hear
from Elizabeth Holmes again?
1098
00:54:19,500 --> 00:54:21,125
No.
1099
00:54:23,125 --> 00:54:26,208
Holmes:
If today were my last day on this Earth,
1100
00:54:26,291 --> 00:54:29,834
and I could say that
1101
00:54:29,917 --> 00:54:31,542
the people who've
gone through hell
1102
00:54:31,625 --> 00:54:33,750
in being able to just
get the test done
1103
00:54:33,834 --> 00:54:36,959
that they need to get care
now don't...
1104
00:54:37,625 --> 00:54:40,417
I've done something
in this world that
1105
00:54:40,500 --> 00:54:42,460
has made it a little bit
of a better place, right?
1106
00:54:42,542 --> 00:54:45,000
But you've got to be protective
about patent and all of that.
1107
00:54:45,830 --> 00:54:47,500
- We do...
- But do you have something to worry about,
1108
00:54:47,583 --> 00:54:49,375
obviously,
competitive businesses
1109
00:54:49,458 --> 00:54:51,709
always concerned
about, you know,
1110
00:54:51,792 --> 00:54:55,542
- the ideas incorporated into products.
- Sure.
1111
00:54:55,625 --> 00:54:57,750
You have to be on version 10
1112
00:54:57,834 --> 00:54:59,542
by the time anybody
else is on version one.
1113
00:54:59,625 --> 00:55:01,208
- Yes.
- And that's...
1114
00:55:01,291 --> 00:55:03,208
that's what our whole
business is about, so...
1115
00:55:03,291 --> 00:55:04,583
So, you're
paranoid?
1116
00:55:04,667 --> 00:55:06,750
- Rose: And you have to be.
- We try to be. Yeah.
1117
00:55:06,834 --> 00:55:09,291
We want to be the most
paranoid people on the planet.
1118
00:55:09,333 --> 00:55:10,583
- Absolutely. Yeah.
- (laughing)
1119
00:55:10,667 --> 00:55:13,709
♪ ♪
1120
00:55:14,834 --> 00:55:16,208
Balwani:
For last two years,
1121
00:55:16,291 --> 00:55:18,875
year and a half,
we come under attack,
1122
00:55:18,959 --> 00:55:20,709
you know, from outside, and...
1123
00:55:20,792 --> 00:55:22,834
it's usually Quest Diagnostics.
1124
00:55:22,917 --> 00:55:25,959
Their entire product strategy
is lies, built around
1125
00:55:26,410 --> 00:55:29,667
getting people sick and then
living off of their diseases.
1126
00:55:29,750 --> 00:55:31,792
And we are trying
to change that, right?
1127
00:55:31,875 --> 00:55:33,834
So, it's really important
that you all understand
1128
00:55:33,917 --> 00:55:37,834
that what we are doing
here is so disruptive
1129
00:55:37,917 --> 00:55:40,166
that we will
always be attacked.
1130
00:55:40,208 --> 00:55:42,625
Matje: The paranoia seemed
to come from the belief that
1131
00:55:42,709 --> 00:55:45,142
someone's going to beat us to it,
or someone's going to steal our ideas,
1132
00:55:45,166 --> 00:55:46,846
or we're not going to get
the whole market.
1133
00:55:46,875 --> 00:55:49,166
There's a healthy degree
of paranoia and secrecy,
1134
00:55:49,291 --> 00:55:51,291
but this was well beyond that.
1135
00:55:52,875 --> 00:55:54,458
Matt Hernan:
There was security.
1136
00:55:54,542 --> 00:55:57,291
You couldn't go walk up
into her office.
1137
00:55:57,375 --> 00:55:59,208
That just doesn't happen.
1138
00:55:59,291 --> 00:56:02,333
She had bulletproof glass
on their exterior windows.
1139
00:56:02,417 --> 00:56:04,667
There were bodyguards
waiting outside,
1140
00:56:04,750 --> 00:56:06,834
you know, couple guys
at the front lobby.
1141
00:56:06,917 --> 00:56:10,125
And that increased
more and more later on.
1142
00:56:10,208 --> 00:56:13,917
But, yeah, her and Sunny walk in
at the same time every morning.
1143
00:56:14,000 --> 00:56:16,750
"Eagle One,
Eagle Two's on their way."
1144
00:56:16,834 --> 00:56:19,917
And soon as they start pulling in,
"Okay, be ready.
1145
00:56:20,000 --> 00:56:22,208
Have the doors open."
1146
00:56:22,291 --> 00:56:24,667
She was Eagle One,
Sunny was Eagle Two.
1147
00:56:24,792 --> 00:56:28,000
♪ ♪
1148
00:56:29,625 --> 00:56:31,000
(lock beeps, clicks)
1149
00:56:33,291 --> 00:56:34,500
Philippides:
Sunny supposedly
1150
00:56:34,625 --> 00:56:38,125
tracked all the key card
entries and exits,
1151
00:56:38,208 --> 00:56:40,208
so you would be
identified each time
1152
00:56:40,291 --> 00:56:42,458
you went into any area.
1153
00:56:45,830 --> 00:56:46,583
Cheung:
We would send e-mails,
1154
00:56:46,667 --> 00:56:49,208
not CC Sunny or Elizabeth,
1155
00:56:49,291 --> 00:56:52,125
and we would get
a response back from Sunny.
1156
00:56:52,208 --> 00:56:55,125
And I remember that was
a very big turning point for me,
1157
00:56:55,208 --> 00:56:58,917
where I was like, "You are being monitored.
You are being watched."
1158
00:56:59,000 --> 00:57:01,792
Gafner:
I found out that I was being keystroked.
1159
00:57:01,875 --> 00:57:03,792
That means that
anything that I typed
1160
00:57:03,875 --> 00:57:06,500
was being watched internally.
1161
00:57:06,583 --> 00:57:07,917
Gibney: It seems
kind of extreme
1162
00:57:08,000 --> 00:57:09,375
for a receptionist,
doesn't it?
1163
00:57:09,500 --> 00:57:12,917
- Did that happen to you anywhere else?
- No.
1164
00:57:13,000 --> 00:57:16,166
And, of course, nondisclosure
agreements had to be signed.
1165
00:57:16,250 --> 00:57:17,750
Wistort:
A giant stack of paperwork
1166
00:57:17,834 --> 00:57:20,542
saying you can't speak
poorly about the company,
1167
00:57:20,625 --> 00:57:23,458
you're legally liable
for any detriment caused
1168
00:57:23,542 --> 00:57:25,742
to the company. It's like,
who's writing these contracts
1169
00:57:25,792 --> 00:57:27,500
and what are
they trying to hide?
1170
00:57:27,583 --> 00:57:29,903
Matje: We weren't supposed to
tell our families what we did.
1171
00:57:29,959 --> 00:57:31,709
We weren't supposed
to talk about anything
1172
00:57:31,792 --> 00:57:33,333
that went on
inside of Theranos.
1173
00:57:34,250 --> 00:57:35,417
Cheung:
Then, after a while,
1174
00:57:35,500 --> 00:57:37,500
people became paranoid
of one another.
1175
00:57:38,583 --> 00:57:40,667
Nugent:
We became much more siloed.
1176
00:57:40,750 --> 00:57:43,875
Walking down the hallway,
you'd say hi and the person would look
1177
00:57:43,959 --> 00:57:46,625
at the ceiling or the floor or
anything to avoid eye contact
1178
00:57:46,709 --> 00:57:48,291
and not acknowledge
you back.
1179
00:57:48,375 --> 00:57:50,559
Then the next person and the next person,
and then you'd notice,
1180
00:57:50,583 --> 00:57:54,333
there'd be whole groups that just wouldn't...
you were invisible to them.
1181
00:57:54,417 --> 00:57:57,208
It was very hard to communicate
information sometimes
1182
00:57:57,291 --> 00:57:59,417
because there were so
many blockades and silos
1183
00:57:59,500 --> 00:58:01,208
and this emphasis
on secrecy.
1184
00:58:01,291 --> 00:58:03,583
If the people from
the chemistry team could talk
1185
00:58:03,667 --> 00:58:06,875
about what was coming next
from the engineering team,
1186
00:58:06,959 --> 00:58:09,519
they would've said, "Well,
that's not going to solve the problem,"
1187
00:58:09,583 --> 00:58:13,000
but since everyone was
working on it separately,
1188
00:58:13,830 --> 00:58:14,917
they could all keep
working forever
1189
00:58:15,000 --> 00:58:17,125
without actually
solving anything.
1190
00:58:17,208 --> 00:58:18,792
(camera clicks)
1191
00:58:18,875 --> 00:58:21,625
The mantra in Silicon Valley
is, "Move fast, break things,"
1192
00:58:21,709 --> 00:58:23,375
and that is really dangerous
1193
00:58:23,458 --> 00:58:26,410
when people's lives
are in the balance.
1194
00:58:26,125 --> 00:58:29,125
Wistort:
Silicon Valley is really good at making
1195
00:58:29,208 --> 00:58:31,166
a web-based e-mail client,
1196
00:58:31,250 --> 00:58:35,830
or really great at making
a chat app with emojis on it.
1197
00:58:35,166 --> 00:58:37,184
Photographer:
A little mile when you kind of think about
1198
00:58:37,208 --> 00:58:39,750
what is all in that
thing you're holding.
1199
00:58:39,834 --> 00:58:42,250
Wistort:
But Silicon Valley is trying to do things
1200
00:58:42,333 --> 00:58:44,667
where people's lives
are on the line.
1201
00:58:44,750 --> 00:58:46,350
We're trying to make
autonomous vehicles.
1202
00:58:46,417 --> 00:58:48,333
We're trying to make
medical devices.
1203
00:58:48,417 --> 00:58:51,125
We're trying to do these things
that if you don't do it right,
1204
00:58:51,208 --> 00:58:53,333
quite frankly, people can die.
1205
00:58:53,417 --> 00:58:57,291
You need to approach it
with a different lens.
1206
00:58:57,375 --> 00:58:59,667
The problem is that when
you're developing the future,
1207
00:58:59,750 --> 00:59:01,959
you don't know what
the impact is going to be
1208
00:59:02,410 --> 00:59:04,291
because no one's
seen this before.
1209
00:59:04,375 --> 00:59:07,834
And the testing ground is
often just the general public.
1210
00:59:10,458 --> 00:59:13,583
♪ ♪
1211
00:59:20,542 --> 00:59:23,542
Narrator:
In 2013, Theranos went live,
1212
00:59:23,625 --> 00:59:25,542
testing real patients
in Arizona
1213
00:59:25,625 --> 00:59:27,792
as part of a partnership
with Walgreens.
1214
00:59:28,542 --> 00:59:30,333
It was a risky move.
1215
00:59:30,417 --> 00:59:32,410
The Edison machines
had problems,
1216
00:59:32,125 --> 00:59:35,875
and they weren't approved by
regulators for in-store testing.
1217
00:59:35,959 --> 00:59:37,709
But Theranos was
running out of money
1218
00:59:37,792 --> 00:59:41,333
and needed the Walgreens deal
to attract new investors.
1219
00:59:41,417 --> 00:59:43,959
So, Elizabeth sold
Walgreens on a stopgap plan
1220
00:59:44,410 --> 00:59:47,500
to launch the Wellness
Centers without the Edisons.
1221
00:59:51,250 --> 00:59:53,208
Instead of testing
blood on-site,
1222
00:59:53,291 --> 00:59:55,750
patients' samples would
be sent to Palo Alto,
1223
00:59:55,834 --> 00:59:59,417
where Theranos had hastily
constructed a clinical lab.
1224
00:59:59,500 --> 01:00:02,000
Many of the technicians
were inexperienced.
1225
01:00:02,830 --> 01:00:05,250
When one lab director quit,
Theranos replaced him
1226
01:00:05,333 --> 01:00:07,500
with a dermatologist.
1227
01:00:08,500 --> 01:00:10,291
Due in part
to the Walgreens launch,
1228
01:00:10,375 --> 01:00:11,750
Theranos was able to raise
1229
01:00:11,834 --> 01:00:14,291
over $400 million
from new investors,
1230
01:00:14,375 --> 01:00:17,458
like the Walton family,
Betsy DeVos,
1231
01:00:17,542 --> 01:00:19,333
the owner of
the New England Patriots,
1232
01:00:19,417 --> 01:00:23,208
and Rupert Murdoch,
who put up $125 million.
1233
01:00:24,625 --> 01:00:26,000
To investors and patients,
1234
01:00:26,830 --> 01:00:29,417
it seemed like the system
was working as advertised.
1235
01:00:30,500 --> 01:00:34,500
♪ ♪
1236
01:00:34,583 --> 01:00:37,208
Patrick O'Neill:
The plan was launched in Arizona
1237
01:00:37,291 --> 01:00:39,291
as if it's
a nationwide campaign,
1238
01:00:39,375 --> 01:00:43,410
and then take key markets and
roll it out across the country.
1239
01:00:44,792 --> 01:00:47,542
I wasn't an engineer.
I wasn't a scientist.
1240
01:00:47,625 --> 01:00:49,166
I wasn't in R&D.
1241
01:00:49,250 --> 01:00:52,917
I was there to create
a consumer brand.
1242
01:00:53,000 --> 01:00:57,417
We came up with three adjectives
to describe Theranos:
1243
01:00:57,500 --> 01:01:00,709
simple, human, and optimistic.
1244
01:01:01,875 --> 01:01:03,917
Because there are
so many barriers
1245
01:01:04,000 --> 01:01:05,917
to getting your
blood drawn,
1246
01:01:06,000 --> 01:01:07,375
whether it's
fear of needles,
1247
01:01:07,458 --> 01:01:09,500
or fear of finding
out the results,
1248
01:01:09,875 --> 01:01:11,375
living far away,
can't afford it.
1249
01:01:11,458 --> 01:01:13,830
There's just
a lot of barriers.
1250
01:01:13,166 --> 01:01:15,291
It's like, people
that have this
1251
01:01:15,375 --> 01:01:19,166
fear or this angst or don't like it,
let's convert them.
1252
01:01:19,250 --> 01:01:22,542
- (bell rings)
- So, I hired Errol Morris.
1253
01:01:23,542 --> 01:01:24,542
Errol worked with Apple.
1254
01:01:24,625 --> 01:01:26,875
Did a lot of great
work with Apple.
1255
01:01:26,959 --> 01:01:29,291
And Elizabeth was
taken by that.
1256
01:01:29,375 --> 01:01:31,834
This could be potentially
the Apple of health care.
1257
01:01:31,917 --> 01:01:33,000
Holmes:
Exactly.
1258
01:01:33,830 --> 01:01:36,500
- Morris: I'm a fan.
- Well, likewise.
1259
01:01:36,583 --> 01:01:38,750
♪ ♪
1260
01:01:40,917 --> 01:01:42,000
O'Neill:
We did casting.
1261
01:01:42,830 --> 01:01:44,959
Real people that have
all these issues.
1262
01:01:45,410 --> 01:01:47,500
We did also reach out
to existing Theranos customers,
1263
01:01:47,583 --> 01:01:50,583
and had several of them come
and tell their real story
1264
01:01:50,667 --> 01:01:52,291
and their experience
with Theranos.
1265
01:01:52,375 --> 01:01:53,917
- Morris: Hello!
- Hi.
1266
01:01:54,000 --> 01:01:55,959
Morris:
Thank you for coming in.
1267
01:01:57,125 --> 01:01:58,959
- Assistant Camera: A-mark.
- (clacks)
1268
01:01:59,410 --> 01:02:00,917
Morris: So, as usual,
I have no idea
1269
01:02:01,000 --> 01:02:03,750
what questions to ask
or where to start.
1270
01:02:05,709 --> 01:02:07,208
I think we'll figure it out.
1271
01:02:07,291 --> 01:02:08,500
(laughter)
1272
01:02:08,583 --> 01:02:10,709
There are so many people
that don't have insurance
1273
01:02:10,792 --> 01:02:12,375
and can't afford insurance.
1274
01:02:12,458 --> 01:02:13,875
I was going to doctors,
1275
01:02:13,959 --> 01:02:15,935
and I couldn't afford it.
I was paying out of pocket.
1276
01:02:15,959 --> 01:02:18,333
If you're trying to live a life,
it gets in the way of it.
1277
01:02:18,417 --> 01:02:19,935
And if I could receive
this information,
1278
01:02:19,959 --> 01:02:22,792
without having to spend all
of this money along the way,
1279
01:02:22,875 --> 01:02:24,166
that would be amazing.
1280
01:02:24,250 --> 01:02:26,792
Eight hundred dollars
for a series of blood tests?
1281
01:02:26,875 --> 01:02:28,959
- It can be pretty stressful.
- It's expensive.
1282
01:02:29,410 --> 01:02:30,709
It's ridiculous.
1283
01:02:30,792 --> 01:02:32,333
♪ ♪
1284
01:02:36,830 --> 01:02:38,417
Gibney:
Once they went live in Arizona...
1285
01:02:38,500 --> 01:02:40,142
- Right.
- ...dealing now with real patients...
1286
01:02:40,166 --> 01:02:42,000
- Right.
- ...as opposed to R&D...
1287
01:02:42,830 --> 01:02:44,458
- That's right. Yes.
- ...you know,
1288
01:02:44,542 --> 01:02:46,583
then you begin
to wonder, like,
1289
01:02:46,667 --> 01:02:49,830
- is it...
- Well, I think here's...
1290
01:02:49,166 --> 01:02:51,830
my context for this is,
1291
01:02:51,208 --> 01:02:52,959
you know, go back
to Jobs for a minute,
1292
01:02:53,410 --> 01:02:54,834
and all the people
that said no to him,
1293
01:02:54,917 --> 01:02:56,583
and he refused no,
1294
01:02:56,667 --> 01:02:59,417
and did it anyway
and proved everyone wrong.
1295
01:02:59,500 --> 01:03:03,291
So, my measure
of success at that level,
1296
01:03:03,375 --> 01:03:04,834
a visionary,
1297
01:03:04,917 --> 01:03:06,291
owns his own company,
1298
01:03:06,375 --> 01:03:08,375
in creating products
that change the world,
1299
01:03:08,458 --> 01:03:10,959
he did not give up
or give in ever.
1300
01:03:11,830 --> 01:03:13,208
So, that was
my measure of success.
1301
01:03:13,291 --> 01:03:17,830
Now, on patients,
that's a whole other thing.
1302
01:03:17,125 --> 01:03:21,830
♪ ♪
1303
01:03:21,166 --> 01:03:23,830
Narrator: In many states,
patients aren't allowed
1304
01:03:23,125 --> 01:03:25,458
to order their own lab tests
without a prescription.
1305
01:03:25,542 --> 01:03:29,625
Doctors are supposed to provide
guidance and oversight.
1306
01:03:29,667 --> 01:03:31,834
But Elizabeth lobbied
the state of Arizona
1307
01:03:31,959 --> 01:03:35,458
to pass a law allowing
patients to order lab tests
1308
01:03:35,500 --> 01:03:37,667
without consulting doctors.
1309
01:03:38,500 --> 01:03:40,458
Giving people the right
1310
01:03:40,500 --> 01:03:43,830
to obtain a laboratory test
1311
01:03:43,125 --> 01:03:45,375
will, by definition,
1312
01:03:45,458 --> 01:03:49,830
begin the process of
enabling them to engage
1313
01:03:49,166 --> 01:03:51,830
in their health.
1314
01:03:51,166 --> 01:03:53,625
Ms. Holmes, you are magnificent,
1315
01:03:53,667 --> 01:03:55,625
and there isn't a question
1316
01:03:55,750 --> 01:03:58,834
any of us could ever ask
that you haven't answered
1317
01:03:58,959 --> 01:04:01,830
20 or 30 times before.
1318
01:04:02,291 --> 01:04:05,875
This law would allow you
to order your own blood work,
1319
01:04:05,959 --> 01:04:07,291
and you get the results.
1320
01:04:07,375 --> 01:04:10,500
This is what
Theranos puts out.
1321
01:04:10,583 --> 01:04:11,500
It's a menu.
1322
01:04:11,583 --> 01:04:13,750
You kind of order à la carte,
1323
01:04:13,834 --> 01:04:16,000
but there are some
cautions raised
1324
01:04:16,830 --> 01:04:17,959
from the medical community.
1325
01:04:18,410 --> 01:04:19,333
♪ ♪
1326
01:04:19,417 --> 01:04:21,184
Stephanie Seitz:
You can't just look at a lab.
1327
01:04:21,208 --> 01:04:24,830
You have to look at the whole
patient, the whole person.
1328
01:04:24,166 --> 01:04:26,583
We can't write a
prescription for somebody
1329
01:04:26,667 --> 01:04:30,125
that we haven't done a
physical exam or have seen,
1330
01:04:30,208 --> 01:04:31,917
so it kind of
was like,
1331
01:04:32,000 --> 01:04:34,542
how are we going
to deal with this?
1332
01:04:34,625 --> 01:04:36,625
Low cost was very interesting
to the patients,
1333
01:04:36,709 --> 01:04:40,250
but then also being able
to order their own labs,
1334
01:04:40,333 --> 01:04:42,830
and they really liked that.
1335
01:04:43,291 --> 01:04:46,834
What made me concerned was,
as a physician,
1336
01:04:46,917 --> 01:04:48,717
you can call the lab
and ask simple questions,
1337
01:04:48,792 --> 01:04:52,830
and these are questions
that we would ask any lab.
1338
01:04:52,166 --> 01:04:55,830
But Theranos,
they weren't very transparent.
1339
01:04:55,875 --> 01:04:57,250
We tried to tell patients that,
1340
01:04:57,333 --> 01:05:00,500
"Listen, we're not getting
a lot of information
1341
01:05:00,583 --> 01:05:02,166
"about how they
do their testing,
1342
01:05:02,250 --> 01:05:04,959
and so we're kind
of unsure of them."
1343
01:05:05,834 --> 01:05:10,667
But then, Theranos started giving
out vouchers or gift cards
1344
01:05:10,750 --> 01:05:13,792
to get labs,
free labs done there.
1345
01:05:13,875 --> 01:05:17,250
And so it just kind of...
exploded.
1346
01:05:17,333 --> 01:05:19,000
Mom, you really are
an important part
1347
01:05:19,830 --> 01:05:21,830
of our family because...
1348
01:05:21,166 --> 01:05:22,166
(clears throat)
1349
01:05:22,959 --> 01:05:25,542
we really love
you so much.
1350
01:05:25,625 --> 01:05:27,417
Your health is
really important to us.
1351
01:05:27,500 --> 01:05:30,500
The kids adore you.
1352
01:05:30,583 --> 01:05:32,375
Grandmother:
Estábien, chiquita.
1353
01:05:32,458 --> 01:05:33,792
Announcer:
Theranos gift cards.
1354
01:05:33,875 --> 01:05:35,250
Because nothing is
more important
1355
01:05:35,333 --> 01:05:36,875
than the health
of those you love.
1356
01:05:36,959 --> 01:05:38,333
(indistinct chatter)
1357
01:05:38,417 --> 01:05:39,768
- Assistant Camera: Marker.
- (clacks)
1358
01:05:39,792 --> 01:05:42,125
♪ ♪
1359
01:06:00,208 --> 01:06:03,375
Serena Stewart: Because of my
extensive background in phlebotomy,
1360
01:06:03,458 --> 01:06:05,792
they offered me
the trainer job.
1361
01:06:05,875 --> 01:06:08,709
Basically, I was training
the Walgreens technicians
1362
01:06:08,792 --> 01:06:12,375
and pharmacist to do the
fingerstick process because...
1363
01:06:13,583 --> 01:06:15,959
no one at
Walgreens had ever
1364
01:06:16,410 --> 01:06:18,750
handled blood
or bodily fluids.
1365
01:06:18,834 --> 01:06:21,125
So, talking about
1366
01:06:21,208 --> 01:06:23,792
what do you do in case
of an exposure and...
1367
01:06:23,875 --> 01:06:26,830
how do you handle
adolescents,
1368
01:06:26,166 --> 01:06:28,917
um, you know, just everything.
1369
01:06:29,000 --> 01:06:30,709
What do you do
if someone faints?
1370
01:06:30,792 --> 01:06:32,834
♪ ♪
1371
01:06:35,792 --> 01:06:37,792
Holmes:
Our goal is to be within five miles
1372
01:06:37,875 --> 01:06:41,792
of every person's home through
the Walgreens nationally.
1373
01:06:42,625 --> 01:06:46,625
Our success will be in being
able to make it possible
1374
01:06:46,709 --> 01:06:50,125
for no one to ever have
to go through the process
1375
01:06:50,208 --> 01:06:53,500
of being stabbed by a big
needle to get blood anymore,
1376
01:06:53,583 --> 01:06:56,583
and be able to begin
to get access to this lab...
1377
01:06:56,667 --> 01:06:58,625
Parloff:
As I was doing my research,
1378
01:06:58,709 --> 01:07:00,625
they had about 90 tests,
1379
01:07:00,709 --> 01:07:03,166
and by the time
I was ready to publish,
1380
01:07:03,250 --> 01:07:05,417
they had over 200.
1381
01:07:05,500 --> 01:07:06,792
I wondered at the time
1382
01:07:06,875 --> 01:07:09,667
how exactly was
she miniaturizing
1383
01:07:09,750 --> 01:07:11,000
200 different tests,
1384
01:07:11,830 --> 01:07:13,208
and how exactly
were you going to get
1385
01:07:13,291 --> 01:07:16,208
all of this done
in the small analyzers?
1386
01:07:17,667 --> 01:07:20,458
And she was charging
so much less than the others,
1387
01:07:20,542 --> 01:07:24,375
so all of that
strained credulity.
1388
01:07:25,375 --> 01:07:28,500
I just didn't think that this
1389
01:07:28,583 --> 01:07:30,667
very sincere,
1390
01:07:30,750 --> 01:07:33,959
earnest, idealistic,
young woman
1391
01:07:34,410 --> 01:07:37,830
was deceiving not just me,
1392
01:07:37,166 --> 01:07:41,250
but Walgreens Corporation
and investors
1393
01:07:41,333 --> 01:07:44,625
to the tune of more than
$400 million at that point.
1394
01:07:44,709 --> 01:07:48,500
♪ ♪
1395
01:07:48,583 --> 01:07:50,500
Holmes:
To be able to give people
1396
01:07:50,583 --> 01:07:52,500
the tools to change their life
1397
01:07:52,583 --> 01:07:55,417
is an incredible blessing.
It's a privilege.
1398
01:07:56,667 --> 01:07:58,166
Every single day,
1399
01:07:58,250 --> 01:08:01,583
I'm just so grateful for the
way in which this is unfolding.
1400
01:08:02,542 --> 01:08:04,208
It's a gift from God.
1401
01:08:09,917 --> 01:08:11,959
♪ ♪
1402
01:08:16,750 --> 01:08:18,834
Ariely:
We have to understand that this is all about
1403
01:08:18,917 --> 01:08:22,125
wanting the world
to be a certain way,
1404
01:08:22,208 --> 01:08:24,792
and basically being able
to rationalize our actions
1405
01:08:24,875 --> 01:08:27,291
to try and make it true.
1406
01:08:27,375 --> 01:08:29,542
You have to want
a certain thing,
1407
01:08:29,625 --> 01:08:32,410
and then you should be able
to kind of bend reality,
1408
01:08:32,125 --> 01:08:35,291
or rationalize things to
allow you to do that.
1409
01:08:35,375 --> 01:08:37,208
But the other
thing is that
1410
01:08:37,291 --> 01:08:40,375
what about
reasons for good?
1411
01:08:40,458 --> 01:08:43,166
And I'll tell you
about a study we did.
1412
01:08:43,250 --> 01:08:45,583
And the experiment
works like this.
1413
01:08:45,667 --> 01:08:47,917
We give people a die,
a six-sided die,
1414
01:08:48,000 --> 01:08:50,410
and we say, "Why don't
you throw the die?"
1415
01:08:50,125 --> 01:08:52,125
And we'll pay you
whatever it comes up.
1416
01:08:52,208 --> 01:08:53,559
Comes in six,
you'll get six dollars
1417
01:08:53,583 --> 01:08:56,830
five, five dollars, four,
and so on until one.
1418
01:08:56,166 --> 01:08:59,834
But you can get paid based on
the top side or the bottom side.
1419
01:08:59,917 --> 01:09:02,750
Top or bottom, you decide,
but don't tell us.
1420
01:09:02,834 --> 01:09:05,417
So, I give you the die,
I say, "Don't tell me."
1421
01:09:05,500 --> 01:09:08,291
Think top or bottom.
You have it? You know which one?
1422
01:09:08,375 --> 01:09:10,583
- Now, toss the die.
- (clatters)
1423
01:09:10,667 --> 01:09:12,333
♪ ♪
1424
01:09:12,417 --> 01:09:14,250
And let's say the die
comes five on the bottom
1425
01:09:14,333 --> 01:09:17,830
and two on the top.
And now I say,
1426
01:09:17,166 --> 01:09:19,166
"Alex, what did you pick?"
1427
01:09:19,250 --> 01:09:21,750
Now, if you picked bottom,
you say bottom, you get five dollars.
1428
01:09:21,834 --> 01:09:22,917
You pick top,
1429
01:09:23,000 --> 01:09:25,208
what do you say?
You say the truth? Top?
1430
01:09:25,291 --> 01:09:29,750
Or do you change your mind?
You say bottom and get five dollars.
1431
01:09:29,834 --> 01:09:32,125
In our experiment,
people do this 20 times.
1432
01:09:32,208 --> 01:09:33,768
And every time they
think top or bottom,
1433
01:09:33,792 --> 01:09:37,375
commit it to memory,
toss the die, and they write,
1434
01:09:37,458 --> 01:09:40,250
"Five and two.
I chose five," and so on.
1435
01:09:41,410 --> 01:09:42,559
And when you do it
20 times, you find that
1436
01:09:42,583 --> 01:09:44,333
people are extra lucky.
1437
01:09:44,417 --> 01:09:47,410
Right? And luck has
this really nice feature
1438
01:09:47,125 --> 01:09:49,750
of focusing on the six-one
die tosses, right?
1439
01:09:49,834 --> 01:09:51,750
They're extra lucky on
the six-one die tosses,
1440
01:09:51,834 --> 01:09:53,709
not so much on
the three-four.
1441
01:09:53,792 --> 01:09:54,959
That's the basic experiment.
1442
01:09:55,410 --> 01:09:57,125
Now, here's the thing
I want to tell you.
1443
01:09:57,208 --> 01:09:58,834
We do the same experiment,
1444
01:09:58,917 --> 01:10:02,250
but we connect people
to a lie detector.
1445
01:10:02,333 --> 01:10:05,875
And we ask the question of whether
the lie detector can detect it,
1446
01:10:05,959 --> 01:10:08,959
and the answer is yes,
the lie detector can detect lies,
1447
01:10:09,410 --> 01:10:11,583
not all the time,
but it can detect it.
1448
01:10:11,667 --> 01:10:13,458
In another version
of the experiment,
1449
01:10:13,542 --> 01:10:15,291
we do the same thing,
1450
01:10:15,375 --> 01:10:17,333
but people pick a charity.
1451
01:10:17,417 --> 01:10:19,458
And all the money that
they're going to make today
1452
01:10:19,542 --> 01:10:22,166
goes to that charity.
Right? For a good cause.
1453
01:10:22,250 --> 01:10:24,917
What do you think happened,
people cheat more or less?
1454
01:10:25,000 --> 01:10:27,000
People cheat more.
1455
01:10:27,830 --> 01:10:29,583
And the lie detector
stops working.
1456
01:10:30,750 --> 01:10:33,333
Why? Because what does
the lie detector detect?
1457
01:10:33,417 --> 01:10:35,875
The lie detector
detects a tension.
1458
01:10:35,959 --> 01:10:38,000
I want more money,
but I think it's wrong.
1459
01:10:38,830 --> 01:10:39,792
I want more money,
but I think it's wrong,
1460
01:10:39,875 --> 01:10:41,625
but if it's not wrong,
1461
01:10:41,709 --> 01:10:43,458
why would you worry?
1462
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,
1463
01:10:47,830 --> 01:10:51,500
and that's how things start,
and then it becomes a slippery slope.
1464
01:10:51,583 --> 01:10:54,625
♪ ♪
1465
01:10:56,250 --> 01:10:58,291
(vehicles whooshing)
1466
01:11:09,250 --> 01:11:10,935
John Carreyrou:
I was at the Wall Street Journal
1467
01:11:10,959 --> 01:11:13,000
on the fifth floor
of the Journal newsroom
1468
01:11:13,830 --> 01:11:14,792
in midtown Manhattan.
1469
01:11:14,875 --> 01:11:16,917
I had couple weeks
prior finished
1470
01:11:17,000 --> 01:11:19,500
a long series
on Medicare fraud.
1471
01:11:19,583 --> 01:11:20,667
So, I was looking for
1472
01:11:20,750 --> 01:11:23,417
something new to
sink my teeth into,
1473
01:11:23,500 --> 01:11:25,333
and one
afternoon,
1474
01:11:25,417 --> 01:11:27,583
I'm at my desk,
my phone rings, I pick up,
1475
01:11:27,667 --> 01:11:29,750
and it's this source of mine.
1476
01:11:29,834 --> 01:11:32,125
He asked me whether I'd read
this New Yorker profile
1477
01:11:32,208 --> 01:11:33,959
of Elizabeth Holmes
that had been published
1478
01:11:34,410 --> 01:11:37,375
a couple weeks prior
in December of 2014.
1479
01:11:37,458 --> 01:11:39,250
As it turns out, I had.
1480
01:11:39,333 --> 01:11:41,709
And there was a quote
from Elizabeth Holmes
1481
01:11:41,792 --> 01:11:45,417
that Ken Auletta described
as "comically vague."
1482
01:11:45,500 --> 01:11:47,410
It sounded like the words
1483
01:11:47,125 --> 01:11:48,625
of a high school
chemistry student,
1484
01:11:48,709 --> 01:11:51,667
as opposed to a sophisticated
laboratory scientist
1485
01:11:51,750 --> 01:11:54,917
who'd really
invented new science.
1486
01:11:55,000 --> 01:11:58,830
But I might not have
done anything about it
1487
01:11:58,166 --> 01:11:59,750
if it weren't for the fact that
1488
01:11:59,834 --> 01:12:03,750
my source was now coming
to me with this tip.
1489
01:12:03,834 --> 01:12:06,917
He said there's
a laboratory director
1490
01:12:07,000 --> 01:12:09,792
who had just left Theranos
on pretty bad terms
1491
01:12:09,875 --> 01:12:12,750
because he had become
increasingly concerned
1492
01:12:12,834 --> 01:12:16,125
about the practices that
he had witnessed there.
1493
01:12:16,667 --> 01:12:18,709
My ears definitely
pricked up at that,
1494
01:12:18,792 --> 01:12:20,834
and so I made contact.
1495
01:12:20,917 --> 01:12:23,208
(keypad beeps) -
When I got him on the phone,
1496
01:12:23,291 --> 01:12:25,375
after trying him a few times,
he was terrified.
1497
01:12:25,458 --> 01:12:28,625
(phone rings) -
He was being hounded by the law firm
1498
01:12:28,709 --> 01:12:31,458
of the famous
lawyer David Boies.
1499
01:12:31,542 --> 01:12:34,959
One of Theranos's strokes of
genius was to hire David Boies
1500
01:12:35,410 --> 01:12:38,830
and also give him
stock in the company.
1501
01:12:38,166 --> 01:12:40,959
I mean, this is a lion
of the legal industry,
1502
01:12:41,410 --> 01:12:43,542
arguably the most well-known
lawyer in America,
1503
01:12:43,625 --> 01:12:46,959
who had represented Al Gore in in
the presidential recount in 2000.
1504
01:12:47,410 --> 01:12:50,458
Before that, won a case on
behalf of the Justice Department
1505
01:12:50,542 --> 01:12:52,830
against Microsoft,
1506
01:12:52,166 --> 01:12:55,792
and had shred Bill Gates
during 20 hours of deposition.
1507
01:12:55,875 --> 01:12:58,625
And he would later become
famous as the legal muscle
1508
01:12:58,709 --> 01:13:02,834
for Harvey Weinstein and his
attempt to silence accusers.
1509
01:13:02,917 --> 01:13:06,625
This was someone who struck
fear in many people.
1510
01:13:06,709 --> 01:13:09,834
The lab director said
that Boies was pressuring him
1511
01:13:09,917 --> 01:13:12,834
and threatening him
with litigation.
1512
01:13:12,917 --> 01:13:15,125
So, I had to agree...
1513
01:13:15,208 --> 01:13:17,375
to keep his identity
confidential.
1514
01:13:18,875 --> 01:13:23,125
He told me that the Edison
could only do a few tests,
1515
01:13:23,208 --> 01:13:25,875
and that all the other
tests on Theranos's menu,
1516
01:13:25,959 --> 01:13:29,542
and at that point,
we're talking about 250 blood tests,
1517
01:13:29,625 --> 01:13:31,667
were done on
commercially available
1518
01:13:31,750 --> 01:13:34,410
laboratory machines
that had been purchased
1519
01:13:34,125 --> 01:13:37,750
from companies like
Siemens and DiaSorin.
1520
01:13:37,834 --> 01:13:39,333
And then they were also lying
1521
01:13:39,417 --> 01:13:43,500
about the reliability and the
accuracy of the blood tests.
1522
01:13:50,125 --> 01:13:52,917
(birds chirping)
1523
01:13:53,000 --> 01:13:54,458
So, I went to Arizona
1524
01:13:54,542 --> 01:13:56,410
to get myself tested.
1525
01:13:56,125 --> 01:13:57,542
And so,
one morning, I went
1526
01:13:57,625 --> 01:14:00,458
to the Walgreens that
was closest to my hotel.
1527
01:14:00,542 --> 01:14:02,410
I sat down
in one of these
1528
01:14:02,125 --> 01:14:04,208
little Wellness Centers,
and the phlebotomist,
1529
01:14:04,291 --> 01:14:06,410
I heard her talking
on the phone,
1530
01:14:06,125 --> 01:14:08,709
and typing on a computer
for a few minutes,
1531
01:14:08,792 --> 01:14:11,917
and then she turned around
and she came at me
1532
01:14:12,000 --> 01:14:14,208
with a tourniquet and a syringe.
1533
01:14:14,291 --> 01:14:17,125
♪ ♪
1534
01:14:17,208 --> 01:14:19,542
And I said,
"Why not a fingerstick?
1535
01:14:19,625 --> 01:14:21,000
"I thought
this was all about,
1536
01:14:21,830 --> 01:14:23,458
you know,
a fingerstick blood test."
1537
01:14:23,542 --> 01:14:25,542
She said,
"No, your order actually
1538
01:14:25,625 --> 01:14:27,875
includes tests that
require venous draw."
1539
01:14:27,959 --> 01:14:29,917
♪ ♪
1540
01:14:30,000 --> 01:14:33,375
Parloff: The truth is that,
before my story came out,
1541
01:14:33,458 --> 01:14:35,542
there had already been
instances of people
1542
01:14:35,625 --> 01:14:37,250
going in to get
their blood checked,
1543
01:14:37,333 --> 01:14:39,625
and they would need
to do a venipuncture
1544
01:14:39,709 --> 01:14:43,208
instead of a fingerstick
of capillary blood.
1545
01:14:43,291 --> 01:14:45,917
And so, I asked about
that a number of times,
1546
01:14:46,000 --> 01:14:50,375
and the answers were
incredibly opaque.
1547
01:14:50,458 --> 01:14:51,935
Auletta (on recording):
So, my question is
1548
01:14:51,959 --> 01:14:54,830
what percentage
of your tests are
1549
01:14:54,166 --> 01:14:56,250
needle rather
than finger prick?
1550
01:14:56,333 --> 01:14:59,208
Holmes (on recording):
I-I don't have a really good number for you
1551
01:14:59,291 --> 01:15:01,125
because it's changing.
1552
01:15:01,208 --> 01:15:03,208
And we're really confident
being able to say
1553
01:15:03,291 --> 01:15:05,959
that we're very close
to 99% being on capillary,
1554
01:15:06,410 --> 01:15:08,834
but when you try
to pinpoint a number...
1555
01:15:08,917 --> 01:15:10,834
Auletta:
We talking about in the next
1556
01:15:10,917 --> 01:15:13,834
- five years? One year? Two months?
- Holmes (laughs): No.
1557
01:15:13,917 --> 01:15:16,291
Much less than a year,
1558
01:15:16,375 --> 01:15:17,750
without question.
1559
01:15:18,709 --> 01:15:20,500
Gibney: At the time,
you didn't think that
1560
01:15:20,583 --> 01:15:23,458
that was necessarily
evidence of...
1561
01:15:23,542 --> 01:15:25,834
Absolutely not.
I actually believed her.
1562
01:15:25,917 --> 01:15:29,291
Of course, I remember
her saying it to me.
1563
01:15:29,375 --> 01:15:32,830
And... that's a lie.
1564
01:15:33,000 --> 01:15:34,410
Period.
1565
01:15:38,583 --> 01:15:40,410
Stewart:
So, after a year or so,
1566
01:15:40,125 --> 01:15:43,959
we started to see the
fingerstick collection dwindle,
1567
01:15:44,410 --> 01:15:47,125
and more venipuncture increase.
1568
01:15:47,208 --> 01:15:49,792
Gibney: What did they tell you
about why they were switching
1569
01:15:49,875 --> 01:15:53,830
to part fingerstick
and part venipuncture?
1570
01:15:53,166 --> 01:15:56,333
They just... They didn't tell us.
It just happened.
1571
01:15:56,417 --> 01:16:01,830
We were told we would need to
say this blanketed statement:
1572
01:16:01,166 --> 01:16:03,583
"Due to the test that
your physician ordered,
1573
01:16:03,667 --> 01:16:06,375
"we have to perform
venipuncture
1574
01:16:06,458 --> 01:16:08,291
"to make sure
that we had enough
1575
01:16:08,375 --> 01:16:12,000
"sample to perform the testing.
1576
01:16:12,830 --> 01:16:14,208
Would you like to proceed?"
1577
01:16:14,291 --> 01:16:16,625
- That's it.
- That must've surprised you.
1578
01:16:16,709 --> 01:16:19,208
Yeah, it surprised
a lot of the technicians.
1579
01:16:19,291 --> 01:16:21,166
It surprised
a lot of the patients,
1580
01:16:21,250 --> 01:16:22,890
or the customers
that were coming in, too.
1581
01:16:22,917 --> 01:16:27,166
Some people, uh,
expressed profanity,
1582
01:16:27,250 --> 01:16:31,333
stormed out,
demanded their money back.
1583
01:16:31,417 --> 01:16:35,333
Then, during that whole
transition to venipuncture,
1584
01:16:35,417 --> 01:16:41,250
we had this big hiring boom where
I had to train 50 more employees
1585
01:16:41,333 --> 01:16:45,959
because now we opened up
our next 10 Wellness Centers.
1586
01:16:48,792 --> 01:16:50,333
Narrator:
With the Walgreens roll out,
1587
01:16:50,417 --> 01:16:52,875
the problems at
Theranos were magnified.
1588
01:16:52,959 --> 01:16:55,500
Instead of shutting down
until the Edisons could perform
1589
01:16:55,583 --> 01:16:57,583
all the tests on
the Theranos menu,
1590
01:16:57,667 --> 01:17:01,291
Elizabeth and her team
invented a workaround designed
1591
01:17:01,375 --> 01:17:04,000
to create the illusion
of a new technology.
1592
01:17:04,830 --> 01:17:08,291
For most tests, they were forced to
use venous blood, drawn with needles,
1593
01:17:08,375 --> 01:17:11,625
and to buy the same machines
used by every other lab.
1594
01:17:11,709 --> 01:17:14,250
But to keep Elizabeth's
fingerstick dream alive,
1595
01:17:14,333 --> 01:17:16,625
Theranos modified
some of those machines,
1596
01:17:16,709 --> 01:17:19,875
so they would work with
diluted capillary samples.
1597
01:17:19,959 --> 01:17:21,500
And for a handful
of patient tests,
1598
01:17:21,583 --> 01:17:24,000
the company used
the old Edison prototype
1599
01:17:24,830 --> 01:17:26,458
Elizabeth had
pitched to Walgreens.
1600
01:17:26,542 --> 01:17:29,375
What we've worked to do
is eliminate the error
1601
01:17:29,458 --> 01:17:31,417
and variability
that's associated
1602
01:17:31,500 --> 01:17:34,333
with human processing
of samples.
1603
01:17:34,417 --> 01:17:37,625
Tyler: When Elizabeth says the
whole process was automated
1604
01:17:37,709 --> 01:17:39,917
from start to finish,
it was... (laughs)
1605
01:17:40,000 --> 01:17:42,709
it was, uh, yeah,
that was a stretch.
1606
01:17:42,792 --> 01:17:45,750
Cheung:
It would sometimes take six hours
1607
01:17:45,834 --> 01:17:47,667
just to set up the system
1608
01:17:47,750 --> 01:17:50,166
before we could even
run the patient samples.
1609
01:17:50,250 --> 01:17:52,875
I was filling up containers,
1610
01:17:52,959 --> 01:17:56,458
doing so many manual
things with hands.
1611
01:17:56,542 --> 01:17:58,792
And the scary thing about
the nanotainers was they could
1612
01:17:58,875 --> 01:18:01,000
hop off your tray and they
would be on the ground,
1613
01:18:01,830 --> 01:18:03,875
and you might not be
able to spot them.
1614
01:18:05,709 --> 01:18:07,542
Philippides:
They had to dilute the nanotainers
1615
01:18:07,625 --> 01:18:09,458
to run it on
the Siemens machines,
1616
01:18:09,542 --> 01:18:11,959
which was not how they
were supposed to be used,
1617
01:18:12,410 --> 01:18:14,208
and so people who worked
in the clinical lab
1618
01:18:14,291 --> 01:18:16,458
were nervous about that
because they were violating
1619
01:18:16,542 --> 01:18:19,208
the operating standards
for those devices,
1620
01:18:19,291 --> 01:18:21,125
which, you know,
are rigorous standards
1621
01:18:21,208 --> 01:18:23,125
since they're
being used to test
1622
01:18:23,208 --> 01:18:24,875
people for diseases.
1623
01:18:26,166 --> 01:18:28,333
We were fudging results,
1624
01:18:28,417 --> 01:18:31,959
rerunning quality control
tests until they passed.
1625
01:18:32,410 --> 01:18:33,583
Matje:
The solution at some point was,
1626
01:18:33,667 --> 01:18:35,347
"If you just throw out
that one data point,
1627
01:18:35,375 --> 01:18:36,643
then the other three
look beautiful."
1628
01:18:36,667 --> 01:18:39,417
And that's not
the way you approach
1629
01:18:39,500 --> 01:18:41,709
science that's going to be
impacting people's lives.
1630
01:18:41,792 --> 01:18:44,125
Philippides:
There were people who had to run tests
1631
01:18:44,208 --> 01:18:46,208
on devices that they knew
weren't working,
1632
01:18:46,291 --> 01:18:49,667
and give those
results to patients.
1633
01:18:49,750 --> 01:18:52,709
People were very upset,
you know, crying.
1634
01:18:52,792 --> 01:18:54,333
Some members of
the CLIA lab would even
1635
01:18:54,417 --> 01:18:56,792
have to call patients and
tell them that they had to go
1636
01:18:56,875 --> 01:18:59,583
to the emergency room 'cause the
lab test was, you know, so far off.
1637
01:18:59,667 --> 01:19:01,709
Cheung:
What really hit home for me is
1638
01:19:01,792 --> 01:19:04,542
we were starting to do
more infectious disease.
1639
01:19:04,625 --> 01:19:07,830
Hepatitis C, prostate cancer,
1640
01:19:07,166 --> 01:19:09,000
and even syphilis.
1641
01:19:09,830 --> 01:19:11,750
Tyler:
I was running precision testing for syphilis,
1642
01:19:11,834 --> 01:19:15,458
and there was a lot of
variability in the test,
1643
01:19:16,208 --> 01:19:19,250
but Theranos said,
"This is safe to use
1644
01:19:19,333 --> 01:19:22,417
on real
patient samples."
1645
01:19:22,500 --> 01:19:24,375
And I was kind of blown away.
1646
01:19:24,458 --> 01:19:26,830
If a hundred people
who had syphilis
1647
01:19:26,166 --> 01:19:28,792
came and got tested
on the Theranos devices,
1648
01:19:28,875 --> 01:19:31,410
we would only tell 65 of
them that they had syphilis,
1649
01:19:31,125 --> 01:19:32,709
and we would tell the other 35,
1650
01:19:32,792 --> 01:19:35,410
"You're healthy. No need
for medical intervention."
1651
01:19:35,125 --> 01:19:39,410
So, if people are
1652
01:19:39,125 --> 01:19:42,542
testing themselves for
syphilis using Theranos,
1653
01:19:42,625 --> 01:19:44,726
there's going to be a lot more
syphilis in this world.
1654
01:19:44,750 --> 01:19:47,792
♪ ♪
1655
01:19:49,417 --> 01:19:51,830
Seitz:
Their downfall was when they started
1656
01:19:51,166 --> 01:19:54,542
giving us results that
were not matching up
1657
01:19:54,625 --> 01:19:56,959
with other labs.
1658
01:19:57,410 --> 01:19:59,834
We started seeing that,
at first, with TSHs,
1659
01:19:59,917 --> 01:20:02,834
which is the thyroid
stimulating hormone.
1660
01:20:02,917 --> 01:20:05,250
Patients that had been
coming to us for years
1661
01:20:05,333 --> 01:20:06,583
to get their TSH done,
1662
01:20:06,667 --> 01:20:08,667
they had gone to
Theranos and their labs
1663
01:20:08,750 --> 01:20:11,458
were changing
really drastically.
1664
01:20:11,542 --> 01:20:14,333
So, we started sending
them to LabCorp,
1665
01:20:14,417 --> 01:20:16,570
just to verify, and
that's when we started
1666
01:20:16,125 --> 01:20:19,830
seeing some pretty
abnormal results.
1667
01:20:19,166 --> 01:20:20,375
I understand
how a patient
1668
01:20:20,458 --> 01:20:22,333
would wanna order
their own labs,
1669
01:20:22,417 --> 01:20:25,375
but then they get it and they
don't know what to do with it,
1670
01:20:25,458 --> 01:20:27,125
or they go
on Google
1671
01:20:27,208 --> 01:20:29,709
and google everything
under the sun,
1672
01:20:29,792 --> 01:20:32,830
and see that
they have cancer, so...
1673
01:20:32,166 --> 01:20:34,375
- Gibney: When they don't.
- When they don't!
1674
01:20:34,458 --> 01:20:37,834
Gibney: When you read about how
many tests were actually wrong...
1675
01:20:37,917 --> 01:20:39,834
- Mm-hmm.
- ...did that concern you?
1676
01:20:39,917 --> 01:20:42,000
It did because I had
some of those tests
1677
01:20:42,830 --> 01:20:44,625
performed on me
and my children!
1678
01:20:44,709 --> 01:20:46,375
(laughing) I did!
1679
01:20:46,458 --> 01:20:50,125
So, I immediately
went back to...
1680
01:20:50,208 --> 01:20:52,542
the other
big lab companies,
1681
01:20:52,625 --> 01:20:55,250
and got my test done,
the same test done,
1682
01:20:55,333 --> 01:20:58,208
and I compared them,
and there was a big difference.
1683
01:20:58,458 --> 01:21:01,125
So, yeah, it was scary.
1684
01:21:01,208 --> 01:21:02,458
It was very scary.
1685
01:21:02,542 --> 01:21:05,208
♪ ♪
1686
01:21:05,291 --> 01:21:08,291
Balwani: There are so many people
who reach out to us and thank us.
1687
01:21:08,375 --> 01:21:11,417
This one guy, he said,
"Thank God for Theranos."
1688
01:21:11,500 --> 01:21:13,434
I mean, how many times you
say that about companies?
1689
01:21:13,458 --> 01:21:16,792
You buy a product, and do you
ever say, "Thank God for Uber?"
1690
01:21:16,875 --> 01:21:18,500
Well, maybe sometimes, but...
1691
01:21:18,583 --> 01:21:20,208
- (laughter)
- But you will say
1692
01:21:20,333 --> 01:21:22,333
thank God for
Theranos every day,
1693
01:21:22,417 --> 01:21:24,542
because every time
you need a lab test,
1694
01:21:24,625 --> 01:21:26,333
every time your
family needs a test...
1695
01:21:26,417 --> 01:21:28,000
Cheung:
I couldn't feel comfortable
1696
01:21:28,830 --> 01:21:30,583
with running these
tests on patients
1697
01:21:30,667 --> 01:21:31,959
because,
at the end of the day,
1698
01:21:32,410 --> 01:21:33,625
I wouldn't run them
on myself.
1699
01:21:33,709 --> 01:21:36,000
I wouldn't run them
on my family members.
1700
01:21:36,830 --> 01:21:38,583
And it just didn't
make sense that,
1701
01:21:38,667 --> 01:21:41,333
internally,
we had so little faith
1702
01:21:41,417 --> 01:21:42,583
in these tests,
1703
01:21:42,667 --> 01:21:45,375
but we're still resulting
them on patients.
1704
01:21:45,458 --> 01:21:47,125
Balwani:
Unprecedented transparency...
1705
01:21:47,208 --> 01:21:49,375
Cheung:
I finally decided enough is enough.
1706
01:21:49,458 --> 01:21:52,417
I went into Sunny's
office and I said,
1707
01:21:52,500 --> 01:21:54,000
"We're not letting
patients know
1708
01:21:54,830 --> 01:21:57,667
when these results are false
or when we make a mistake."
1709
01:21:57,750 --> 01:22:00,667
And effectively,
what he did is said,
1710
01:22:00,750 --> 01:22:04,750
"What makes you think you're
qualified to make that call?"
1711
01:22:04,834 --> 01:22:07,542
And, "You need to just
sit down and do your job."
1712
01:22:07,625 --> 01:22:09,417
Thank you.
1713
01:22:09,500 --> 01:22:11,208
At that point, I knew.
1714
01:22:11,291 --> 01:22:13,542
It's just unacceptable
what this company is doing,
1715
01:22:13,625 --> 01:22:15,417
and I don't want to be
a part of that.
1716
01:22:15,500 --> 01:22:17,959
The kind of technologies
that you're building
1717
01:22:18,410 --> 01:22:21,375
practically are changing
people's lives every single day.
1718
01:22:21,458 --> 01:22:25,125
Cheung: I couldn't understand how
someone could continuously lie.
1719
01:22:25,208 --> 01:22:27,830
It really changed
my perception of her.
1720
01:22:27,166 --> 01:22:28,875
That, okay, this person,
1721
01:22:28,959 --> 01:22:30,709
you know, plays this role of,
1722
01:22:30,792 --> 01:22:33,830
you know, wanting to make
health care more accessible,
1723
01:22:33,166 --> 01:22:36,542
of really trying to leverage
innovative new technologies
1724
01:22:36,625 --> 01:22:39,750
to solve this huge problem
that we have in health care,
1725
01:22:39,834 --> 01:22:41,125
but it's all a show.
1726
01:22:41,208 --> 01:22:43,792
I grew up spending summers
1727
01:22:43,875 --> 01:22:46,583
- and the holidays...
- (projector whirring)
1728
01:22:46,667 --> 01:22:50,410
- ...with my uncle. I remember how much I loved him.
- I have a really vivid memory.
1729
01:22:50,125 --> 01:22:51,917
- I loved him so much.
- He was fine.
1730
01:22:52,000 --> 01:22:54,959
He was diagnosed one
day with skin cancer...
1731
01:22:55,410 --> 01:22:57,875
All of a sudden, - And one day,
he has brain cancer...
1732
01:22:57,959 --> 01:23:00,417
- And in his bones...
- All of a sudden...
1733
01:23:00,500 --> 01:23:02,750
He was gone before
I ever got to...
1734
01:23:02,834 --> 01:23:05,375
- My uncle...
- My uncle...
1735
01:23:05,458 --> 01:23:08,417
(overlapping voices)
1736
01:23:08,500 --> 01:23:11,625
♪ ♪
1737
01:23:20,291 --> 01:23:22,830
Tyler:
When I think of Theranos,
1738
01:23:22,166 --> 01:23:25,166
I really feel like there were
two entirely different worlds.
1739
01:23:25,291 --> 01:23:26,917
There was the carpeted world,
1740
01:23:27,000 --> 01:23:29,625
and there was the tiled world.
1741
01:23:29,709 --> 01:23:32,917
In the carpeted world was
where Elizabeth was a goddess.
1742
01:23:33,000 --> 01:23:36,417
Everyone almost worshiped
the ground she walked on.
1743
01:23:36,500 --> 01:23:40,917
(cheering) - She could do no wrong.
She was the next Steve Jobs.
1744
01:23:41,000 --> 01:23:43,208
Theranos was
changing the world.
1745
01:23:43,291 --> 01:23:46,375
And then you go into the tiled
side and nothing works.
1746
01:23:46,458 --> 01:23:48,166
We're on a sinking ship.
1747
01:23:48,250 --> 01:23:50,250
Everything's a lie.
1748
01:23:50,333 --> 01:23:52,250
Reconciling
the differences between
1749
01:23:52,333 --> 01:23:54,917
those two worlds was
really hard for me to do.
1750
01:23:55,000 --> 01:23:57,500
I knew Elizabeth personally
from all these
1751
01:23:57,583 --> 01:24:00,208
interactions
through my family,
1752
01:24:00,875 --> 01:24:03,166
so I really trusted her.
I believed in her.
1753
01:24:03,250 --> 01:24:05,291
I would leave
the tiled world thinking,
1754
01:24:05,375 --> 01:24:06,667
"Oh man, sinking ship."
1755
01:24:06,750 --> 01:24:08,559
And I would go have one
conversation with Elizabeth.
1756
01:24:08,583 --> 01:24:11,000
Holmes:
Theranos was founded with the goal
1757
01:24:11,830 --> 01:24:13,500
of creating a more human,
actionable health experience.
1758
01:24:13,583 --> 01:24:16,000
(echoing):
If you can begin to understand your body...
1759
01:24:16,830 --> 01:24:18,500
Tyler: And I would be so
motivated to go back and work,
1760
01:24:18,583 --> 01:24:20,423
and I felt like I was
changing the world again.
1761
01:24:20,500 --> 01:24:22,166
And I would go back
into the tiled world,
1762
01:24:22,250 --> 01:24:24,583
and I would go, wait,
what just happened?
1763
01:24:24,667 --> 01:24:27,542
You want it
to be true so badly,
1764
01:24:27,625 --> 01:24:31,500
and even for me, I was
working with these devices
1765
01:24:31,583 --> 01:24:32,834
every single day,
1766
01:24:32,917 --> 01:24:35,500
and she could still
kind of convince me.
1767
01:24:35,583 --> 01:24:37,000
♪ ♪
1768
01:24:37,830 --> 01:24:38,834
When I think back
on those conversations,
1769
01:24:38,917 --> 01:24:41,417
I just think,
how did she do that?
1770
01:24:44,750 --> 01:24:47,542
Matje: You start to believe that
maybe you're the one who's crazy.
1771
01:24:47,625 --> 01:24:49,625
Because everyone else
thinks this woman's great,
1772
01:24:49,709 --> 01:24:51,267
and everyone else wants
to throw money at her,
1773
01:24:51,291 --> 01:24:54,875
wants to be on board with this,
and wants to be a part of it.
1774
01:24:54,959 --> 01:24:57,625
I mean, at the time,
she was this iconic figure,
1775
01:24:57,709 --> 01:24:59,917
this woman in tech who was
revolutionizing everything,
1776
01:25:00,000 --> 01:25:03,410
this Steve Jobs imitation.
1777
01:25:03,125 --> 01:25:05,458
Sometimes, you have to think
maybe you're wrong.
1778
01:25:06,500 --> 01:25:08,792
(shutters clicking)
1779
01:25:10,959 --> 01:25:13,417
Philippides: At the time,
you wondered whether
1780
01:25:13,500 --> 01:25:17,375
Elizabeth's connections
were protecting her.
1781
01:25:17,458 --> 01:25:21,830
It kind of caused a bit
of a crisis of faith
1782
01:25:21,166 --> 01:25:25,208
in, you know, just the power
of government, and how
1783
01:25:25,291 --> 01:25:27,291
corrupt or not they were for me.
1784
01:25:27,375 --> 01:25:29,709
I thought that Theranos
was going to get away with it.
1785
01:25:29,792 --> 01:25:32,834
(applause)
1786
01:25:32,917 --> 01:25:35,166
Biden:
You're charging historically low prices,
1787
01:25:35,250 --> 01:25:37,917
which is
a small fraction
1788
01:25:38,000 --> 01:25:40,000
of what is
charged now,
1789
01:25:40,830 --> 01:25:42,250
and while maintaining
the highest standards.
1790
01:25:42,333 --> 01:25:45,830
Carreyrou:
With all her political connections,
1791
01:25:45,166 --> 01:25:48,125
she was chummy with
the Obama administration.
1792
01:25:48,208 --> 01:25:50,830
The bet that she made was that
1793
01:25:50,166 --> 01:25:53,830
if she surrounded herself
with powerful people,
1794
01:25:53,166 --> 01:25:56,333
the regulators wouldn't get
confrontational with her.
1795
01:25:57,208 --> 01:25:58,542
The end game, I think,
1796
01:25:58,625 --> 01:26:01,500
it comes back to
"fake it until you make it."
1797
01:26:02,667 --> 01:26:05,583
Elizabeth never gave up
on her ultimate vision
1798
01:26:05,667 --> 01:26:08,250
to get the device
not only in stores,
1799
01:26:08,333 --> 01:26:11,830
but ultimately,
in the homes of patients.
1800
01:26:11,166 --> 01:26:13,750
She wanted to be like
Apple and Steve Jobs,
1801
01:26:13,834 --> 01:26:18,208
in the sense that Apple
devices are ubiquitous.
1802
01:26:18,291 --> 01:26:21,583
She wanted Edison devices
in every home in America.
1803
01:26:24,166 --> 01:26:27,667
The only thing is you need FDA
approval to make that happen.
1804
01:26:27,750 --> 01:26:30,166
(cheering)
1805
01:26:32,250 --> 01:26:33,709
(camera clicks)
1806
01:26:33,792 --> 01:26:37,250
Auletta: I did talk to the Chief
Medical person at the FDA,
1807
01:26:37,333 --> 01:26:40,291
who expressed some
skepticism. He said...
1808
01:26:40,375 --> 01:26:42,768
Auletta (on recording):
"They have not provided enough information
1809
01:26:42,792 --> 01:26:46,250
for the agency to clear
or approve the test."
1810
01:26:46,333 --> 01:26:47,709
Accurate?
1811
01:26:47,792 --> 01:26:49,250
Holmes:
So, is this something that
1812
01:26:49,333 --> 01:26:51,792
- you wanted actually to use in the article?
- Yes.
1813
01:26:51,875 --> 01:26:53,542
Holmes: Okay,
so that's part of a challenge
1814
01:26:53,625 --> 01:26:55,875
because that our legal team
is so concerned about this
1815
01:26:55,959 --> 01:26:58,250
because there's a lot
of context behind that.
1816
01:26:58,333 --> 01:27:00,500
It creates... causes
a lot of problems for us.
1817
01:27:00,583 --> 01:27:02,223
Auletta:
That's why I'm asking for context.
1818
01:27:02,250 --> 01:27:05,333
Give it to me. I'm all ears.
1819
01:27:05,417 --> 01:27:07,500
Holmes: Okay,
let me talk to our legal team.
1820
01:27:07,583 --> 01:27:10,750
Right now, they told me that
I can't comment on this...
1821
01:27:10,834 --> 01:27:12,291
Narrator:
Elizabeth was tap dancing
1822
01:27:12,375 --> 01:27:14,458
around her discussions
with the FDA.
1823
01:27:14,542 --> 01:27:16,667
Rather than submit
full applications,
1824
01:27:16,750 --> 01:27:20,458
Theranos flooded the FDA with
vague exploratory letters,
1825
01:27:20,542 --> 01:27:22,125
trying to stall for time,
1826
01:27:22,208 --> 01:27:23,959
till the Edisons
could do all the tests
1827
01:27:24,410 --> 01:27:25,834
that Theranos advertised,
1828
01:27:25,917 --> 01:27:27,500
and that could take years.
1829
01:27:27,583 --> 01:27:29,410
♪ ♪
1830
01:27:29,125 --> 01:27:32,000
In the meantime, the Theranos
operation in Palo Alto
1831
01:27:32,830 --> 01:27:34,000
was being regulated by CMS,
1832
01:27:34,830 --> 01:27:37,375
the federal agency
in charge of clinical labs.
1833
01:27:37,458 --> 01:27:40,125
Theranos was also
playing games with them.
1834
01:27:40,208 --> 01:27:43,458
Even though some patient tests
were performed on Edisons,
1835
01:27:43,542 --> 01:27:45,750
Theranos never reported those.
1836
01:27:45,834 --> 01:27:49,834
The company only gave CMS the
data from third-party machines.
1837
01:27:50,583 --> 01:27:51,750
Cheung:
The decision was
1838
01:27:51,834 --> 01:27:54,000
let's send what was
on the Immulite
1839
01:27:54,830 --> 01:27:55,125
and on the Siemens Advia.
1840
01:27:55,208 --> 01:27:58,410
Let's not send
the Edison results.
1841
01:27:58,125 --> 01:27:59,267
And that really freaked me out
1842
01:27:59,291 --> 01:28:00,875
because that was
suggesting that,
1843
01:28:00,959 --> 01:28:03,625
okay, we didn't trust
the Edison test.
1844
01:28:03,709 --> 01:28:05,709
And here, we were able
to make that discernment
1845
01:28:05,792 --> 01:28:08,291
of what was
the appropriate one to send,
1846
01:28:08,375 --> 01:28:10,458
but we weren't doing
that with patients.
1847
01:28:12,291 --> 01:28:15,208
And when CMS came in
for the inspection,
1848
01:28:15,291 --> 01:28:17,959
Sunny and Elizabeth
only showed them the lab
1849
01:28:18,410 --> 01:28:20,458
with the Siemens Advia,
the Immulite.
1850
01:28:20,542 --> 01:28:23,542
They never took them downstairs
to the secondary lab,
1851
01:28:23,625 --> 01:28:27,125
where we processed all the
fingersticks on the Edisons.
1852
01:28:27,208 --> 01:28:28,834
They strictly told us
1853
01:28:28,917 --> 01:28:30,375
to stay at your desk.
1854
01:28:30,458 --> 01:28:31,959
They didn't want
any of us down there
1855
01:28:32,410 --> 01:28:33,917
'cause they were scared
if the inspectors
1856
01:28:34,000 --> 01:28:37,417
saw what was going on, that
could have huge consequences.
1857
01:28:37,500 --> 01:28:40,583
It just seemed
scandalous to us.
1858
01:28:40,667 --> 01:28:44,542
Tyler: It was getting to the point
where there was really no hope.
1859
01:28:44,625 --> 01:28:46,830
You know,
I'd pretty much decided
1860
01:28:46,166 --> 01:28:48,166
that I was
going to quit.
1861
01:28:51,750 --> 01:28:53,417
Right after I resigned,
1862
01:28:53,500 --> 01:28:57,208
I went to my grandfather's
office at Stanford,
1863
01:28:57,291 --> 01:28:59,542
and actually showed
him a lot of data,
1864
01:28:59,625 --> 01:29:02,410
and the discrepancy
between what I was seeing
1865
01:29:02,125 --> 01:29:03,417
and what was being published,
1866
01:29:03,500 --> 01:29:06,830
and the explanation
for those differences.
1867
01:29:06,166 --> 01:29:10,500
But he didn't really seem
to believe what I was saying,
1868
01:29:10,583 --> 01:29:12,500
and he said,
"Elizabeth has told me that
1869
01:29:12,583 --> 01:29:15,375
"Theranos really can do all the
things that it says it can do.
1870
01:29:15,458 --> 01:29:18,410
"Theranos is more accurate,
going to change the world.
1871
01:29:18,125 --> 01:29:20,375
"They're trying to convince
me that you're stupid.
1872
01:29:20,458 --> 01:29:21,935
"They can't convince
me that you're stupid,
1873
01:29:21,959 --> 01:29:23,875
"but they can convince
me that you're wrong.
1874
01:29:23,959 --> 01:29:25,709
"And I do think
that you're wrong,
1875
01:29:25,792 --> 01:29:27,959
so move on with your life."
1876
01:29:28,410 --> 01:29:30,375
♪ ♪
1877
01:29:31,333 --> 01:29:33,375
A few months afterwards,
1878
01:29:33,458 --> 01:29:36,166
John Carreyou from
the Wall Street Journal
1879
01:29:36,250 --> 01:29:39,291
sent me a message on LinkedIn.
1880
01:29:39,375 --> 01:29:41,333
I was definitely in a panic.
1881
01:29:41,417 --> 01:29:42,726
There were
confidentiality agreements
1882
01:29:42,750 --> 01:29:44,390
that I had signed
while I was at Theranos.
1883
01:29:44,458 --> 01:29:47,291
So, I went and bought
a burner phone with cash.
1884
01:29:47,375 --> 01:29:50,500
(phone dialing) - I called him,
and in that phone call,
1885
01:29:50,583 --> 01:29:52,500
I decided that I wanted
to help him out.
1886
01:29:52,583 --> 01:29:53,834
♪ ♪
1887
01:29:53,917 --> 01:29:57,667
I said, my grandfather
made it through Watergate,
1888
01:29:57,750 --> 01:29:59,166
and the Iran-Contra scandal
1889
01:29:59,250 --> 01:30:02,583
with his integrity
completely intact.
1890
01:30:02,667 --> 01:30:04,709
Once he becomes aware of
the fraud that's happening,
1891
01:30:04,792 --> 01:30:07,667
he will do everything
he can to make things right.
1892
01:30:07,750 --> 01:30:09,267
And I want to give
him that opportunity
1893
01:30:09,291 --> 01:30:12,917
because, I think he was 94,
95 at the time.
1894
01:30:14,375 --> 01:30:16,667
So, I met with John in person,
1895
01:30:16,750 --> 01:30:19,375
and then he sent Theranos
1896
01:30:19,458 --> 01:30:21,500
some prodding questions,
1897
01:30:21,583 --> 01:30:24,291
and there was just
one number in there.
1898
01:30:24,375 --> 01:30:27,667
42.9% that I had calculated
for one of these tests,
1899
01:30:27,750 --> 01:30:31,166
that was also in an e-mail
that I had sent to Elizabeth.
1900
01:30:31,250 --> 01:30:33,291
♪ ♪
1901
01:30:35,458 --> 01:30:36,875
About a month after that,
1902
01:30:36,959 --> 01:30:39,542
I went to go have dinner
with my parents.
1903
01:30:39,625 --> 01:30:41,542
I walk in the door,
and my dad says,
1904
01:30:41,625 --> 01:30:44,375
"Have you been speaking to a
Wall Street Journal reporter?"
1905
01:30:44,458 --> 01:30:47,375
And I said yes. (laughs)
1906
01:30:47,458 --> 01:30:49,250
And he said,
"Well, they know."
1907
01:30:49,333 --> 01:30:51,792
(pedestrians chattering)
1908
01:30:55,410 --> 01:30:56,458
Cheung:
After I leave Theranos,
1909
01:30:56,542 --> 01:30:59,875
I kind of want to be as far
away from them as possible.
1910
01:30:59,959 --> 01:31:02,792
I was working another job,
and at this point,
1911
01:31:02,875 --> 01:31:06,250
I had talked to John Carreyrou
from the Wall Street Journal,
1912
01:31:06,333 --> 01:31:08,542
who was doing
an investigative report.
1913
01:31:11,542 --> 01:31:13,917
So, I'm at work one day.
I'm working late,
1914
01:31:14,000 --> 01:31:15,792
and two of my
colleagues are leaving,
1915
01:31:15,875 --> 01:31:17,917
and I'm going to be
the only one in the building.
1916
01:31:18,000 --> 01:31:20,125
And they look outside,
and they're like, "Hey, Erika.
1917
01:31:20,208 --> 01:31:22,800
"There's been this guy
who's just been sitting
1918
01:31:22,410 --> 01:31:25,750
in our parking lot
for the whole day."
1919
01:31:25,834 --> 01:31:28,458
And that's very unusual.
1920
01:31:28,542 --> 01:31:31,333
(walking footsteps)
1921
01:31:31,417 --> 01:31:34,830
- So, they walk me to my car,
- (car alarm beeps)
1922
01:31:34,166 --> 01:31:37,500
and then this guy comes up,
and he gives me this letter.
1923
01:31:37,583 --> 01:31:40,166
And it has the address
of this temporary home
1924
01:31:40,250 --> 01:31:43,750
that I'm staying at,
so no one knows this address.
1925
01:31:43,834 --> 01:31:47,166
And I open it, and it's
a letter from David Boies.
1926
01:31:48,000 --> 01:31:50,458
"If you don't come forward with
1927
01:31:50,542 --> 01:31:53,291
"X, Y, and Z document,
or report these people,
1928
01:31:53,375 --> 01:31:55,875
there's a potential
that we could sue you."
1929
01:31:57,166 --> 01:31:59,333
It was quite,
quite scary for me.
1930
01:31:59,417 --> 01:32:01,333
Especially coming
from a position of,
1931
01:32:01,417 --> 01:32:03,834
what, I was 23 at that point?
1932
01:32:03,917 --> 01:32:06,375
You know, I had not really
1933
01:32:06,458 --> 01:32:09,333
not really any money to spend
on lawyers or anything.
1934
01:32:09,417 --> 01:32:11,166
I was really freaked out.
1935
01:32:14,250 --> 01:32:16,250
Carreyrou:
I'd been asking for an interview
1936
01:32:16,333 --> 01:32:18,166
with Elizabeth
for several months,
1937
01:32:18,250 --> 01:32:21,830
and they were giving
me the runaround.
1938
01:32:21,166 --> 01:32:24,166
Finally, in June 2015,
1939
01:32:24,250 --> 01:32:27,583
we agreed that we'd have a
meeting at the Journal offices.
1940
01:32:28,875 --> 01:32:31,834
This Theranos delegation
comes in, it's seven people,
1941
01:32:31,917 --> 01:32:33,750
four of whom are lawyers,
1942
01:32:33,834 --> 01:32:37,875
led by David Boies, and one of the
other lawyers is Heather King...
1943
01:32:37,959 --> 01:32:40,830
Heather has just joined
us as our general counsel.
1944
01:32:40,166 --> 01:32:43,208
Carreyrou:
...who had been a Boies Schiller partner,
1945
01:32:43,291 --> 01:32:45,792
former Hillary Clinton aide.
1946
01:32:45,875 --> 01:32:49,000
Couple of minutes into
the meeting, Heather King
1947
01:32:49,830 --> 01:32:51,500
puts a little tape recorder
down on the table.
1948
01:32:51,583 --> 01:32:52,875
Another Boies Schiller attorney
1949
01:32:52,959 --> 01:32:54,875
put a little tape recorder
1950
01:32:54,959 --> 01:32:56,667
on the other end of
the conference table,
1951
01:32:56,750 --> 01:32:58,250
and it was very clear
1952
01:32:58,333 --> 01:33:00,000
that they were approaching this
1953
01:33:00,830 --> 01:33:02,417
as a deposition
in a legal proceeding.
1954
01:33:02,500 --> 01:33:05,417
If they were going to record,
then I was going to record as well.
1955
01:33:05,500 --> 01:33:07,959
King (on recording): Okay, so,
you know, we're here today
1956
01:33:08,410 --> 01:33:11,830
to do our part to help
educate you on what
1957
01:33:11,166 --> 01:33:12,750
I, at least, believe are some,
1958
01:33:12,834 --> 01:33:15,792
you know, false premises upon
which the questions are based.
1959
01:33:15,875 --> 01:33:19,208
They're very serious questions,
and there's some very serious
1960
01:33:19,291 --> 01:33:22,830
allegations in those questions.
1961
01:33:22,166 --> 01:33:24,830
I also turn to David Boies.
1962
01:33:24,166 --> 01:33:26,250
David attends all
the board meetings.
1963
01:33:26,333 --> 01:33:29,375
Boies: We wouldn't be here,
spend all this time and effort
1964
01:33:29,458 --> 01:33:31,375
if the, you know,
1965
01:33:31,458 --> 01:33:34,267
- we've got a technology...
- Carreyrou: So, why don't we discuss it more freely?
1966
01:33:34,291 --> 01:33:36,625
Boies: Yeah, because it's trade secret!
That's why!
1967
01:33:36,709 --> 01:33:38,542
And because you
won't sign an NDA!
1968
01:33:38,625 --> 01:33:40,184
Carreyrou:
Is there really new technology?
1969
01:33:40,208 --> 01:33:41,417
Jay Conti:
That's the point.
1970
01:33:41,500 --> 01:33:43,410
Boies:
Is it really new technology...
1971
01:33:43,125 --> 01:33:45,125
This something no one's
been able to do before.
1972
01:33:45,208 --> 01:33:47,375
Okay? Theranos is doing it.
1973
01:33:47,458 --> 01:33:51,500
(projector whirring) -
And unless it's magic, it's a new technology.
1974
01:33:51,583 --> 01:33:53,875
I knew that most
of their blood tests
1975
01:33:53,959 --> 01:33:56,375
were run on
commercial analyzers
1976
01:33:56,458 --> 01:33:58,417
made by third
party companies.
1977
01:33:58,500 --> 01:34:01,375
And so I said,
how can this even fall
1978
01:34:01,458 --> 01:34:03,834
under the bucket
of trade secrets,
1979
01:34:03,917 --> 01:34:05,583
if these aren't even
Theranos machines.
1980
01:34:05,667 --> 01:34:08,417
Carreyrou: Are you saying that
the trade secrets also covers
1981
01:34:08,500 --> 01:34:10,583
the way in which you
run a blood sample
1982
01:34:10,667 --> 01:34:12,000
on the Siemens Advia?
1983
01:34:12,830 --> 01:34:14,166
Boies: I think,
I don't know the answer to that,
1984
01:34:14,250 --> 01:34:16,917
but I can tell you that
it could or it could not.
1985
01:34:17,000 --> 01:34:19,680
King: It just feels like you want
us to give you the formula for Coke
1986
01:34:19,750 --> 01:34:21,685
in order to convince you that
it doesn't contain arsenic.
1987
01:34:21,709 --> 01:34:23,393
Conti:
Nobody's asked for the formula for Coke.
1988
01:34:23,417 --> 01:34:25,166
We're looking for
a generic explanation.
1989
01:34:25,250 --> 01:34:27,830
Boies:
You don't need to know how they work.
1990
01:34:27,166 --> 01:34:30,834
(overlapping,
indistinct arguing)
1991
01:34:30,917 --> 01:34:33,166
Conti:
It sounds like the Wizard of Oz...
1992
01:34:33,291 --> 01:34:35,250
Carreyrou:
So, we went around in circles,
1993
01:34:35,333 --> 01:34:39,000
and the fact that
they were stonewalling
1994
01:34:39,830 --> 01:34:41,917
in such a strong way,
1995
01:34:42,000 --> 01:34:44,583
made me feel like
we were on the right track.
1996
01:34:44,667 --> 01:34:48,375
King: You know,
it seems apparent to us that certainly
1997
01:34:48,458 --> 01:34:51,458
one of your key sources is
a young man named Tyler Shultz
1998
01:34:51,542 --> 01:34:53,667
because the concerns
that you are raising
1999
01:34:53,750 --> 01:34:55,166
precisely are concerns
2000
01:34:55,250 --> 01:34:57,000
that he raised in
the very brief time
2001
01:34:57,830 --> 01:34:58,667
that he was at our company.
2002
01:34:58,750 --> 01:35:00,393
I don't know, I don't
remember his exact words,
2003
01:35:00,417 --> 01:35:02,417
but he said, "Well,
they know. They know."
2004
01:35:02,500 --> 01:35:04,917
So, I called my grandfather
and he said,
2005
01:35:05,000 --> 01:35:08,208
"Elizabeth tells me that
you've been speaking...
2006
01:35:08,291 --> 01:35:10,500
"that you've been giving
trade secrets away
2007
01:35:10,583 --> 01:35:12,208
"to the Wall Street Journal,
2008
01:35:12,291 --> 01:35:15,542
"and, you know, if this
story gets published,
2009
01:35:15,625 --> 01:35:19,208
"that essentially, your career
will be ruined, but...
2010
01:35:19,291 --> 01:35:21,667
"there's a one-page
confidentiality agreement
2011
01:35:21,750 --> 01:35:23,709
you can sign to just
make it all go away."
2012
01:35:23,792 --> 01:35:27,834
And so, I go to his house the next morning,
and he said, "Okay, well,
2013
01:35:27,917 --> 01:35:31,000
there are actually two Theranos
lawyers here right now."
2014
01:35:31,830 --> 01:35:32,625
I was...
2015
01:35:32,709 --> 01:35:35,333
extremely nervous about
what was going to happen,
2016
01:35:35,417 --> 01:35:37,250
very uncomfortable
with the whole situation.
2017
01:35:37,333 --> 01:35:39,500
They come in
and they give me
2018
01:35:39,583 --> 01:35:43,375
a notice to appear in court
in about 36 hours,
2019
01:35:43,458 --> 01:35:46,125
a temporary restraining order,
2020
01:35:46,208 --> 01:35:49,917
and a letter signed
by David Boies.
2021
01:35:50,000 --> 01:35:53,830
They really made me feel
like I was alone.
2022
01:35:53,166 --> 01:35:55,500
I was the underdog.
I was going to get crushed.
2023
01:35:55,583 --> 01:35:57,750
Lawyer: Good morning,
Mr. Secretary.
2024
01:35:57,834 --> 01:35:59,830
Good morning.
2025
01:35:59,166 --> 01:36:02,208
Do you recall a time when
Tyler came to your home,
2026
01:36:02,291 --> 01:36:03,500
and there were
some attorneys
2027
01:36:03,583 --> 01:36:05,250
from the Boies
Schiller firm there?
2028
01:36:05,333 --> 01:36:07,500
I wouldn't call them attorneys.
2029
01:36:07,583 --> 01:36:11,830
The man was some
sort of an animal.
2030
01:36:12,166 --> 01:36:14,250
Wild animal,
2031
01:36:14,333 --> 01:36:17,208
and he assaulted my grandson.
2032
01:36:17,291 --> 01:36:20,410
Was one of the dumbest
things I've ever observed.
2033
01:36:20,125 --> 01:36:22,959
When you say that
the man assaulted
2034
01:36:23,410 --> 01:36:24,250
your grandson,
can you be...
2035
01:36:24,333 --> 01:36:27,333
Verbally, verbally,
he just went after him.
2036
01:36:27,417 --> 01:36:28,792
If it hadn't ended when it did,
2037
01:36:28,875 --> 01:36:30,750
my wife was about
to pick an iron out,
2038
01:36:30,834 --> 01:36:33,959
hand iron right out of the
fireplace and clobber him.
2039
01:36:36,625 --> 01:36:38,750
Tyler:
My grandfather physically separates us,
2040
01:36:38,834 --> 01:36:40,959
and puts the Theranos
lawyers in the living room,
2041
01:36:41,410 --> 01:36:42,417
and I'm in the dining room,
2042
01:36:42,500 --> 01:36:44,625
and he's going between
the two rooms negotiating...
2043
01:36:44,709 --> 01:36:47,750
- Gibney: Like a Secretary of State.
- Like a Secretary of State.
2044
01:36:47,834 --> 01:36:52,500
And my grandfather
seemed like he had grown...
2045
01:36:52,583 --> 01:36:55,917
that his allegiance to Elizabeth and
Theranos had grown even stronger.
2046
01:36:56,000 --> 01:36:58,375
Lawyer: Do you have
a high opinion of Ms. Holmes?
2047
01:36:58,458 --> 01:37:00,830
Yes.
2048
01:37:00,166 --> 01:37:02,792
Do you believe that
Ms. Holmes was truthful
2049
01:37:02,875 --> 01:37:05,208
with you in all of your
interactions with her?
2050
01:37:05,291 --> 01:37:06,792
Yes, I think so.
2051
01:37:06,875 --> 01:37:08,959
In any of her
interactions with you,
2052
01:37:09,410 --> 01:37:11,583
did Ms. Holmes
ever do anything
2053
01:37:11,667 --> 01:37:13,830
to give you
reason to believe
2054
01:37:13,166 --> 01:37:15,125
that she was trying
to deceive you?
2055
01:37:15,208 --> 01:37:16,333
No.
2056
01:37:18,125 --> 01:37:19,417
Yeah, that's when...
2057
01:37:19,500 --> 01:37:22,291
lawyers became a really
big part of my life.
2058
01:37:22,375 --> 01:37:24,458
They were threatening
to sue me for
2059
01:37:24,542 --> 01:37:26,458
violating my
nondisclosure agreement,
2060
01:37:26,542 --> 01:37:28,625
for giving up trade secrets.
2061
01:37:28,709 --> 01:37:31,667
Many times, I had written
notices to appear in court,
2062
01:37:31,750 --> 01:37:34,875
and at the last minute,
they would cancel it.
2063
01:37:35,834 --> 01:37:37,830
Overall, my parents
2064
01:37:37,166 --> 01:37:40,667
spent between
400 and $500,000
2065
01:37:40,750 --> 01:37:42,709
in legal fees.
2066
01:37:42,792 --> 01:37:44,250
It was getting
to the point where
2067
01:37:44,333 --> 01:37:47,417
we needed to find money
somewhere, so they...
2068
01:37:47,500 --> 01:37:49,250
they said that they
would sell their house
2069
01:37:49,333 --> 01:37:51,000
to keep fighting
this legal battle.
2070
01:37:51,830 --> 01:37:53,458
(pedestrians chattering)
2071
01:37:53,542 --> 01:37:55,834
Cheung: So,
I ended up talking to a lawyer,
2072
01:37:55,917 --> 01:37:57,792
and they said, they're
trying to scare you.
2073
01:37:57,875 --> 01:38:01,208
And he said, one of the options that
you can do is you can whistle-blow.
2074
01:38:01,333 --> 01:38:04,458
You could be protected if you
talked to a regulatory agency.
2075
01:38:04,542 --> 01:38:09,125
And I'm like, what regulatory
agency? How do you that?
2076
01:38:09,208 --> 01:38:12,125
I've been nervous to send
or even write this letter.
2077
01:38:12,208 --> 01:38:16,166
Theranos takes confidentiality and
secrecy to an extreme level...
2078
01:38:16,250 --> 01:38:18,101
(statements overlapping):
Mistakes always happen in a clinical lab,
2079
01:38:18,125 --> 01:38:20,875
but what went on in Theranos
was complete negligence
2080
01:38:20,959 --> 01:38:23,250
and honestly felt
criminal in many ways.
2081
01:38:23,333 --> 01:38:25,834
Upper level management
constantly made excuses
2082
01:38:25,917 --> 01:38:28,500
for their misgivings...
but they continue to...
2083
01:38:28,583 --> 01:38:30,750
(statements overlapping)
2084
01:38:32,750 --> 01:38:36,583
I don't feel like it's sort
of a cold-blooded scam, right?
2085
01:38:37,417 --> 01:38:39,410
It just seems it started off
2086
01:38:39,125 --> 01:38:41,000
as something small,
like one lie,
2087
01:38:41,830 --> 01:38:44,333
and snowballed into this really
2088
01:38:44,417 --> 01:38:46,750
crazy situation.
2089
01:38:46,834 --> 01:38:48,333
♪ Can't touch this ♪
2090
01:38:48,417 --> 01:38:50,333
(crowd cheering)
2091
01:38:50,417 --> 01:38:52,830
♪ Can't touch this ♪
2092
01:38:54,000 --> 01:38:55,417
♪ Can't touch this ♪
2093
01:38:55,500 --> 01:38:57,542
♪ Oh, oh, oh, oh, oh, oh, oh ♪
2094
01:38:57,625 --> 01:38:58,792
♪ Can't touch this ♪
2095
01:38:58,875 --> 01:39:00,830
♪ Oh, oh, oh, oh, oh, oh, oh ♪
2096
01:39:00,166 --> 01:39:02,166
♪ My, my, my music ♪
2097
01:39:02,250 --> 01:39:05,125
♪ Keeps me so hard,
makes me say oh my Lord ♪
2098
01:39:05,208 --> 01:39:06,875
♪ Thank you for blessing me ♪
2099
01:39:06,959 --> 01:39:08,875
♪ With a mind to rhyme
and two hype feet ♪
2100
01:39:08,959 --> 01:39:10,667
♪ That's good when
you know you're down ♪
2101
01:39:10,750 --> 01:39:12,625
♪ A super dope homeboy
from the Oaktown ♪
2102
01:39:12,709 --> 01:39:15,410
So, what do you guys think
about the FDA clearance?
2103
01:39:15,125 --> 01:39:16,375
(cheering)
2104
01:39:16,458 --> 01:39:19,410
(whistling)
2105
01:39:19,125 --> 01:39:20,875
♪ Can't touch this ♪
2106
01:39:20,959 --> 01:39:24,410
O'Neill:
It was around the 4th of July of 2015.
2107
01:39:24,125 --> 01:39:26,375
It was euphoria at the company.
2108
01:39:26,458 --> 01:39:29,333
It was, you know...
2109
01:39:29,417 --> 01:39:30,625
♪ Bust the funky lyrics ♪
2110
01:39:30,709 --> 01:39:32,208
♪ Fresh new kicks and pants ♪
2111
01:39:32,291 --> 01:39:34,226
♪ You got it like that,
now you know you wanna dance ♪
2112
01:39:34,250 --> 01:39:35,959
This is a very
meaningful milestone
2113
01:39:36,410 --> 01:39:37,417
for both Elizabeth and Sunny.
2114
01:39:37,500 --> 01:39:39,875
It felt like a great
victory at the time.
2115
01:39:39,959 --> 01:39:42,709
(music playing)
2116
01:39:42,792 --> 01:39:46,830
Narrator: It was a big
celebration for a little victory.
2117
01:39:46,166 --> 01:39:47,917
The FDA had finally approved
2118
01:39:48,000 --> 01:39:50,333
one rarely used test for herpes
2119
01:39:50,417 --> 01:39:53,000
to be run on
an Edison prototype.
2120
01:39:53,830 --> 01:39:54,959
That was too little
too late for Walgreens,
2121
01:39:55,410 --> 01:39:57,917
which put the brakes on
opening new Wellness Centers.
2122
01:39:58,000 --> 01:39:59,583
And while Theranos
had boasted revenues
2123
01:39:59,667 --> 01:40:02,709
of more than a billion
dollars for 2015,
2124
01:40:02,792 --> 01:40:06,208
the actual cash in the door was
only a few hundred thousand.
2125
01:40:06,291 --> 01:40:07,625
♪ ♪
2126
01:40:07,709 --> 01:40:10,500
But Elizabeth and Sunny
were not backing down.
2127
01:40:10,583 --> 01:40:13,208
Balwani: We are going to send a
message to Quest Diagnostics.
2128
01:40:13,291 --> 01:40:16,830
Remember, these are
the guys who are after us,
2129
01:40:16,166 --> 01:40:18,326
and they're attacking the work
that you guys are doing.
2130
01:40:18,375 --> 01:40:20,291
- Are you ready?
- Crowd: Yeah!
2131
01:40:20,375 --> 01:40:22,291
Balwani:
Okay. One,
2132
01:40:22,375 --> 01:40:23,875
two, three.
2133
01:40:23,959 --> 01:40:25,333
All:
Fuck you!
2134
01:40:25,417 --> 01:40:26,875
(applause)
2135
01:40:29,542 --> 01:40:31,583
♪ ♪
2136
01:40:47,542 --> 01:40:48,709
(phone beeps)
2137
01:40:50,830 --> 01:40:52,959
Parloff:
I saw the alert when I got up in the morning,
2138
01:40:53,410 --> 01:40:55,458
and I read it by my bed.
2139
01:40:55,542 --> 01:40:58,667
It had this really
understated headline.
2140
01:40:58,750 --> 01:41:00,500
♪ ♪
2141
01:41:00,583 --> 01:41:03,959
But the contents of the article
were just devastating.
2142
01:41:08,709 --> 01:41:10,750
♪ ♪
2143
01:41:13,792 --> 01:41:17,583
When I got to work,
I read it a couple more times.
2144
01:41:18,410 --> 01:41:21,667
Suddenly, all of the trade
secret stuff made sense.
2145
01:41:21,750 --> 01:41:24,333
Oh, I see. It's
not a trade secret.
2146
01:41:24,417 --> 01:41:26,000
Um...
2147
01:41:26,830 --> 01:41:28,792
It's a different kind
of secret, and, um...
2148
01:41:30,625 --> 01:41:32,667
♪ ♪
2149
01:41:36,542 --> 01:41:40,375
Stewart:
I did not know that Siemens were being used
2150
01:41:40,458 --> 01:41:43,208
until after the article hit.
2151
01:41:43,291 --> 01:41:45,375
And then
that kind of explains
2152
01:41:45,458 --> 01:41:47,458
why we were doing
venipuncture,
2153
01:41:47,542 --> 01:41:50,625
as opposed to the
fingerstick collection.
2154
01:41:50,709 --> 01:41:55,830
I then started...
revamping my résumé.
2155
01:41:55,166 --> 01:41:57,000
(laughing)
2156
01:41:57,830 --> 01:41:58,417
I'm sorry, but I did!
2157
01:41:58,500 --> 01:42:01,625
♪ ♪
2158
01:42:04,250 --> 01:42:06,208
Tyler:
I was lucky when the Wall Street Journal
2159
01:42:06,291 --> 01:42:08,542
actually ended up
publishing their article
2160
01:42:08,625 --> 01:42:09,875
because once that happened,
2161
01:42:09,959 --> 01:42:12,208
Theranos' efforts
were focused elsewhere.
2162
01:42:12,333 --> 01:42:14,291
We never went to court.
We never...
2163
01:42:14,375 --> 01:42:16,709
had any sort of settlement.
It just kind of died.
2164
01:42:19,410 --> 01:42:21,667
O'Neill: The fate and future
of the company was at stake.
2165
01:42:22,875 --> 01:42:26,830
So, we gathered
in our cafeteria.
2166
01:42:26,166 --> 01:42:30,250
Elizabeth and Sunny spoke
to what was happening,
2167
01:42:30,333 --> 01:42:32,291
and that these
allegations are not true.
2168
01:42:33,375 --> 01:42:35,667
And then, Elizabeth
made a comment about
2169
01:42:35,750 --> 01:42:39,410
taking on the Wall Street
Journal as a fight.
2170
01:42:39,166 --> 01:42:41,250
♪ ♪
2171
01:42:45,208 --> 01:42:46,333
Carreyrou:
I knew immediately
2172
01:42:46,417 --> 01:42:48,500
when I woke up
that day that the article
2173
01:42:48,583 --> 01:42:51,250
was having impact
because e-mails from readers
2174
01:42:51,375 --> 01:42:53,709
and from colleagues were
flowing in to my inbox.
2175
01:42:53,792 --> 01:42:55,917
And I was also getting asked
2176
01:42:56,000 --> 01:42:57,959
to do various media interviews.
2177
01:42:58,410 --> 01:42:59,601
Newsman:
New Wall Street Journal story
2178
01:42:59,667 --> 01:43:01,750
by John Carreyrou.
Thanks for joining us, John...
2179
01:43:01,834 --> 01:43:04,166
Carreyrou:
The article was a wake-up call
2180
01:43:04,250 --> 01:43:06,333
for Silicon Valley.
2181
01:43:06,417 --> 01:43:08,875
This sort of gold rush
had been going on.
2182
01:43:08,959 --> 01:43:10,959
These unicorns
had been created.
2183
01:43:11,410 --> 01:43:14,625
Companies that have valuations
of more than a billion dollars.
2184
01:43:14,709 --> 01:43:16,625
They were staying
private much longer
2185
01:43:16,709 --> 01:43:20,250
than start-ups had in the
dot-com boom of the late '90s.
2186
01:43:20,375 --> 01:43:23,166
And as a result, they were
able to be less transparent
2187
01:43:23,250 --> 01:43:25,830
than companies
that have to report
2188
01:43:25,208 --> 01:43:26,917
to investors every quarter.
2189
01:43:27,000 --> 01:43:29,750
And I think suddenly there was
a realization in Silicon Valley
2190
01:43:29,834 --> 01:43:33,750
that this has allowed
fraud to thrive.
2191
01:43:33,834 --> 01:43:36,917
♪ ♪
2192
01:43:38,625 --> 01:43:40,625
Parloff: Obviously,
when I called Theranos
2193
01:43:40,750 --> 01:43:42,470
and tried to speak
to Elizabeth and was told
2194
01:43:42,542 --> 01:43:45,792
that she was going to be
unavailable all day.
2195
01:43:45,917 --> 01:43:50,375
She was being inducted into the Harvard
Medical School Board of Fellows.
2196
01:43:52,458 --> 01:43:56,166
And, um...
I was just stunned.
2197
01:43:56,250 --> 01:43:57,959
I was thinking in my mind,
2198
01:43:58,410 --> 01:44:00,830
the Wall Street Journal
has just said...
2199
01:44:01,208 --> 01:44:03,792
that you're a fraud, and that
you're company is a fraud,
2200
01:44:03,917 --> 01:44:07,583
and the company I put on the
cover of a magazine is a fraud,
2201
01:44:08,500 --> 01:44:10,500
and you're going to spend...
2202
01:44:13,750 --> 01:44:15,417
the whole day...
2203
01:44:18,333 --> 01:44:21,250
hiding out at this, uh...
2204
01:44:24,410 --> 01:44:25,625
at this, uh...
2205
01:44:27,917 --> 01:44:30,542
honorary horseshit, you know?
2206
01:44:30,625 --> 01:44:32,500
You need to get out here,
2207
01:44:32,583 --> 01:44:34,667
and go through this article,
2208
01:44:34,750 --> 01:44:37,333
paragraph by paragraph,
2209
01:44:37,417 --> 01:44:41,208
explaining what the fuck's
going on at your company.
2210
01:44:41,834 --> 01:44:44,333
(bell rings)
2211
01:44:44,417 --> 01:44:45,685
Jim Cramer:
Your article was pretty brutal,
2212
01:44:45,709 --> 01:44:47,226
but here on Mad Money,
we know something.
2213
01:44:47,250 --> 01:44:49,959
We know that there are two
sides to every single story.
2214
01:44:50,410 --> 01:44:52,458
Coming to us this
afternoon from Boston,
2215
01:44:52,542 --> 01:44:54,434
where she's attending a meeting
of the Board of Fellows
2216
01:44:54,458 --> 01:44:57,291
at Harvard Medical School,
to give her a chance to answer
2217
01:44:57,375 --> 01:44:59,830
the charges raised
in the article.
2218
01:44:59,166 --> 01:45:01,750
Ms. Holmes, welcome
back to Mad Money.
2219
01:45:01,834 --> 01:45:03,250
It's great to be
here, thank you.
2220
01:45:03,333 --> 01:45:06,830
This is what happens when
you work to change things,
2221
01:45:06,166 --> 01:45:09,375
and first they think you're
crazy, then they fight you.
2222
01:45:09,458 --> 01:45:11,709
And then, all of a sudden,
you change the world.
2223
01:45:11,792 --> 01:45:14,830
And, um, I have to say,
2224
01:45:14,166 --> 01:45:16,542
I personally was
shocked to see that
2225
01:45:16,625 --> 01:45:18,875
the Journal would publish
something like this.
2226
01:45:18,959 --> 01:45:21,458
Every single one
of the sources that
2227
01:45:21,542 --> 01:45:24,458
we spoke with who the Journal
had contacted told us
2228
01:45:24,542 --> 01:45:27,333
that the statements that were
being attributed to them
2229
01:45:27,417 --> 01:45:29,333
were false or
misleading...
2230
01:45:29,417 --> 01:45:34,375
Carreyrou: She decided to come out
and address my story and rebut it.
2231
01:45:34,458 --> 01:45:37,709
Theranos issued a press release
calling my reporting false,
2232
01:45:37,792 --> 01:45:40,500
and they were threatening
us with litigation.
2233
01:45:40,583 --> 01:45:43,125
Boies:
The journalism here has been so bad,
2234
01:45:43,208 --> 01:45:44,750
they deserve to be sued,
2235
01:45:44,834 --> 01:45:47,917
but lawsuits
rarely resolve issues.
2236
01:45:48,000 --> 01:45:50,542
What's going to resolve
this issue is the science,
2237
01:45:50,625 --> 01:45:52,125
the marketplace.
2238
01:45:52,208 --> 01:45:55,500
Um, the company has been
successful in Arizona.
2239
01:45:56,375 --> 01:45:58,125
Doctors are happy,
patients are happy...
2240
01:45:58,208 --> 01:46:00,917
Narrator:
Doctors and patients were not happy.
2241
01:46:01,000 --> 01:46:03,500
The FDA was so worried
about patient safety
2242
01:46:03,583 --> 01:46:05,750
that it banned the use
of the nanotainer,
2243
01:46:05,834 --> 01:46:09,417
putting an end to all
fingerstick tests at Walgreens.
2244
01:46:09,500 --> 01:46:12,875
CMS conducted a surprise
inspection of the Theranos lab,
2245
01:46:12,959 --> 01:46:15,959
and found the blood
testing so inaccurate,
2246
01:46:16,410 --> 01:46:18,542
that it posed a threat
to patient safety,
2247
01:46:18,625 --> 01:46:20,583
likely to cause serious injury,
2248
01:46:20,667 --> 01:46:22,500
harm, or death.
2249
01:46:22,583 --> 01:46:26,291
CMS revoked the lab's
license to operate.
2250
01:46:26,375 --> 01:46:28,625
The letter that
prompted CMS to act
2251
01:46:28,709 --> 01:46:31,000
- came from Erika Cheung.
- (laughs)
2252
01:46:32,410 --> 01:46:33,393
Cheung:
You know, in the end for me,
2253
01:46:33,417 --> 01:46:35,583
it was a bit
of a mixed feeling.
2254
01:46:35,667 --> 01:46:38,667
I was really excited because
the truth finally got out.
2255
01:46:38,750 --> 01:46:42,208
But then also, a bit of
sadness in the fact that, um...
2256
01:46:42,291 --> 01:46:44,625
you know, we all really wanted
that project to succeed.
2257
01:46:44,709 --> 01:46:48,830
Gibney:
Have you been able to win your argument
2258
01:46:48,166 --> 01:46:50,417
with your grandfather
in terms of persuading him
2259
01:46:50,500 --> 01:46:52,291
of the problems
at Theranos?
2260
01:46:52,375 --> 01:46:56,410
He said that he had no idea
how much deception there was,
2261
01:46:56,125 --> 01:46:58,667
and that he was proud of me.
2262
01:46:58,750 --> 01:47:00,166
Yeah.
2263
01:47:00,250 --> 01:47:04,917
Yeah, I'm glad he finally
really gets it.
2264
01:47:05,917 --> 01:47:08,417
♪ ♪
2265
01:47:08,500 --> 01:47:11,250
Carreyrou:
There was a Journal technology conference
2266
01:47:11,333 --> 01:47:15,291
taking place in Laguna Beach
in late October 2015,
2267
01:47:15,375 --> 01:47:18,333
and it so happened
that more than a year prior
2268
01:47:18,417 --> 01:47:21,500
it had lined up Elizabeth
Holmes as one of the speakers.
2269
01:47:21,583 --> 01:47:24,834
Could you get specific
on the key points today...
2270
01:47:24,959 --> 01:47:27,250
Carreyrou: And not only did she come,
she came swinging.
2271
01:47:27,333 --> 01:47:30,208
The tests that are offered
are of the highest quality.
2272
01:47:30,250 --> 01:47:33,709
We know what we're doing,
and we're very proud of it.
2273
01:47:33,792 --> 01:47:37,000
Were there situations
in which you, uh,
2274
01:47:37,125 --> 01:47:39,291
had to dilute
blood samples?
2275
01:47:39,375 --> 01:47:40,959
What the Journal described
2276
01:47:41,000 --> 01:47:42,667
that we take
a sample, dilute it,
2277
01:47:42,792 --> 01:47:44,667
and put it on
a commercial analyzer
2278
01:47:44,792 --> 01:47:47,291
is inaccurate,
and that's not what we do.
2279
01:47:47,375 --> 01:47:49,101
Carreyrou:
I watched it on the Journal website,
2280
01:47:49,125 --> 01:47:51,959
and I couldn't believe
what she just said.
2281
01:47:52,000 --> 01:47:55,830
There was no question
that that was a huge lie
2282
01:47:55,125 --> 01:47:56,875
because they were
absolutely doing it.
2283
01:47:56,959 --> 01:47:59,250
We don't actually
use the technology
2284
01:47:59,333 --> 01:48:01,875
that's being referred
to as Edison for anything,
2285
01:48:01,959 --> 01:48:04,250
and haven't for
a few years now.
2286
01:48:04,291 --> 01:48:08,583
When we do fingerstick,
every time, we use technology
2287
01:48:08,667 --> 01:48:10,959
that is not
commercially available.
2288
01:48:11,830 --> 01:48:12,583
We have never used
2289
01:48:12,667 --> 01:48:15,830
commercially available
lab equipment
2290
01:48:15,125 --> 01:48:16,709
for fingerstick-based tests.
2291
01:48:16,792 --> 01:48:18,542
(echoing):
Every fingerstick test...
2292
01:48:18,625 --> 01:48:21,458
Carreyrou:
I had underestimated her willingness
2293
01:48:21,542 --> 01:48:25,709
to bald-face lie
in public, on our turf.
2294
01:48:25,792 --> 01:48:28,291
I guess what I really want
to know is, do you feel now,
2295
01:48:28,375 --> 01:48:32,458
in hindsight, that maybe you went
market a little too quickly?
2296
01:48:32,542 --> 01:48:34,302
Did you feel pressured
to do that in any way?
2297
01:48:34,375 --> 01:48:36,250
We're the exact same company.
2298
01:48:36,375 --> 01:48:37,959
Nothing has changed.
2299
01:48:38,410 --> 01:48:40,834
We're working every single day
to try to get these tests
2300
01:48:40,917 --> 01:48:43,125
and systems to meet
the highest quality standards.
2301
01:48:43,208 --> 01:48:46,250
♪ ♪
2302
01:48:47,875 --> 01:48:49,917
(keyboard clacking)
2303
01:48:50,000 --> 01:48:52,410
♪ ♪
2304
01:48:55,542 --> 01:48:58,250
Parloff: Couple of months after
John Carreyrou's article,
2305
01:48:58,291 --> 01:49:01,750
I wrote a new story.
2306
01:49:01,834 --> 01:49:06,458
It was both a correction
and a mea culpa.
2307
01:49:06,542 --> 01:49:10,125
And I said that Elizabeth
had intentionally misled me.
2308
01:49:12,417 --> 01:49:14,500
After I published the piece,
2309
01:49:14,583 --> 01:49:16,125
Elizabeth called me,
2310
01:49:16,208 --> 01:49:19,750
and there was
a long conversation.
2311
01:49:19,834 --> 01:49:22,291
She was not apologetic.
She said,
2312
01:49:22,417 --> 01:49:25,250
"I never would intentionally
try to mislead you.
2313
01:49:25,291 --> 01:49:27,166
Why would we do that?"
2314
01:49:27,250 --> 01:49:30,834
She was trying to persuade
me to take out that sentence.
2315
01:49:30,917 --> 01:49:32,250
She said something like,
2316
01:49:32,291 --> 01:49:34,500
"If you're not going to take
that language out,
2317
01:49:34,583 --> 01:49:38,166
we're going to have to do
something about that language,"
2318
01:49:38,250 --> 01:49:39,667
which was a little menacing,
2319
01:49:39,750 --> 01:49:43,959
but all that they then did
was they wrote a letter.
2320
01:49:44,410 --> 01:49:45,959
Toward the end,
there was a weird paragraph,
2321
01:49:46,410 --> 01:49:48,417
something to the effect that
Elizabeth didn't even realize
2322
01:49:48,500 --> 01:49:51,709
that Fortune was doing
a feature profile,
2323
01:49:51,792 --> 01:49:53,542
let alone a cover.
2324
01:49:53,625 --> 01:49:55,750
And it was so, such a...
2325
01:49:56,709 --> 01:49:59,291
bizarre thing 'cause...
2326
01:50:00,458 --> 01:50:03,830
I was out there four days and...
2327
01:50:03,583 --> 01:50:06,410
I had called all these
people at her behest.
2328
01:50:06,125 --> 01:50:07,583
You know, seven directors,
2329
01:50:07,667 --> 01:50:10,542
the head of UCSF Medical Center,
2330
01:50:10,625 --> 01:50:12,625
the head of Blue Cross
Blue Shield.
2331
01:50:12,709 --> 01:50:16,830
I spent an hour and a half with
her parents. I met her brother.
2332
01:50:16,166 --> 01:50:19,417
I asked her about the letter
she wrote when she was nine.
2333
01:50:19,500 --> 01:50:22,208
I asked her about the book
her father gave her
2334
01:50:22,291 --> 01:50:24,834
when she went away
to school, which was
2335
01:50:24,917 --> 01:50:27,250
Meditations
by Marcus Aurelius.
2336
01:50:27,333 --> 01:50:29,417
And then there was
the photo shoot!
2337
01:50:29,500 --> 01:50:31,375
It was a big-name photographer,
2338
01:50:31,458 --> 01:50:34,500
and his assistants,
and the lighting equipment,
2339
01:50:34,583 --> 01:50:37,410
and taking
a couple hundred photos
2340
01:50:37,125 --> 01:50:40,250
in different locations
and different poses.
2341
01:50:40,333 --> 01:50:42,709
That was a clue, you know?
2342
01:50:46,333 --> 01:50:49,333
This was real lunacy.
2343
01:50:50,834 --> 01:50:53,291
I realized that there was
something wrong with her mind,
2344
01:50:53,375 --> 01:50:58,834
that, um, you know, I don't know
if she's lying or if she's...
2345
01:50:59,834 --> 01:51:03,583
uh, there's an unconscious, um,
2346
01:51:03,667 --> 01:51:05,583
reconstruct... self-protective,
2347
01:51:05,667 --> 01:51:08,410
reconstruction of reality
that's going on.
2348
01:51:08,125 --> 01:51:10,830
But what is coming
out of her mouth
2349
01:51:10,166 --> 01:51:12,750
is not mapping onto reality
2350
01:51:12,834 --> 01:51:14,792
as you or I know it, you know?
2351
01:51:14,875 --> 01:51:17,458
(projector whirring)
2352
01:51:17,542 --> 01:51:19,542
♪ ♪
2353
01:51:20,917 --> 01:51:22,750
Auletta:
I wish I could say to her,
2354
01:51:22,834 --> 01:51:24,559
"Elizabeth, I'm going to give
you a truth serum,
2355
01:51:24,583 --> 01:51:26,166
"and you're going to tell me
2356
01:51:26,250 --> 01:51:29,709
what was going through
your mind at that time."
2357
01:51:30,208 --> 01:51:32,875
And the question
becomes, do you...
2358
01:51:32,959 --> 01:51:35,792
do we believe
that she would say,
2359
01:51:35,875 --> 01:51:38,000
"I knowingly lied?"
2360
01:51:39,166 --> 01:51:41,458
I have a hard time
2361
01:51:41,542 --> 01:51:43,333
imagining her saying that.
2362
01:51:46,250 --> 01:51:49,625
She was a zealot, and a zealot
is such a believer,
2363
01:51:49,709 --> 01:51:51,959
a true believer,
in what they're doing
2364
01:51:52,410 --> 01:51:55,830
that they're blind to the
reality of what's happening.
2365
01:51:56,333 --> 01:51:58,583
Not for a moment do I believe
2366
01:51:58,667 --> 01:52:02,291
that she lies in bed
at night and thinks,
2367
01:52:02,375 --> 01:52:06,830
"I was a swindler.
I was a crook. I lied."
2368
01:52:10,834 --> 01:52:15,000
Ariely: So one day, I get an e-mail from
somebody who works with Elizabeth Holmes.
2369
01:52:15,830 --> 01:52:19,792
He asked me if I would come and meet
with their team and with Elizabeth.
2370
01:52:19,875 --> 01:52:21,625
I said sure.
2371
01:52:21,709 --> 01:52:25,375
Part of my research is actually
about human motivation,
2372
01:52:25,458 --> 01:52:28,834
and she was very concerned about
the demotivation in the company.
2373
01:52:28,917 --> 01:52:32,458
Right? Because
the continuous stories
2374
01:52:32,542 --> 01:52:36,417
around them were demotivating.
2375
01:52:36,500 --> 01:52:42,417
My impression was that she truly
believed in the mission of the company,
2376
01:52:42,500 --> 01:52:45,208
and that she also
believes that they are
2377
01:52:45,291 --> 01:52:48,583
on the way to achieve something,
2378
01:52:48,667 --> 01:52:51,291
and they just need the runway.
2379
01:52:54,625 --> 01:52:57,000
There's a lot of lying
in Silicon Valley.
2380
01:52:59,542 --> 01:53:02,583
And I remember when my first
book on dishonesty came out,
2381
01:53:02,667 --> 01:53:05,208
and I did a book tour,
and I gave a few talks
2382
01:53:05,291 --> 01:53:07,750
in Silicon Valley,
some entrepreneur said,
2383
01:53:07,834 --> 01:53:11,830
"Oh, we are in technology.
Technology doesn't lie."
2384
01:53:11,166 --> 01:53:13,590
(Gibney laughs) - Right?
So, and they basically said,
2385
01:53:13,830 --> 01:53:15,208
"We are honest,
there's no opportunities."
2386
01:53:15,291 --> 01:53:17,625
And I didn't say anything,
but in two minutes,
2387
01:53:17,709 --> 01:53:20,166
all kind of people from
the start-ups around him
2388
01:53:20,250 --> 01:53:23,792
started talking about
how they lie to investors.
2389
01:53:24,500 --> 01:53:27,000
And they have all these graphs
of growth, right?
2390
01:53:27,830 --> 01:53:28,917
I mean, they're predicting
the future,
2391
01:53:29,000 --> 01:53:31,250
and they putting
exact numbers on their...
2392
01:53:31,333 --> 01:53:35,410
And my thought was
that there is this idea
2393
01:53:35,125 --> 01:53:38,375
in Silicon Valley,
where you, um...
2394
01:53:38,458 --> 01:53:41,000
in a very brave way,
2395
01:53:41,834 --> 01:53:45,792
put a post somewhere really far
2396
01:53:45,875 --> 01:53:49,830
that you truly have
no idea if you can get there.
2397
01:53:49,166 --> 01:53:52,917
And my sense from the
discussion with Elizabeth was
2398
01:53:53,000 --> 01:53:55,917
that she felt
that she was basically
2399
01:53:56,000 --> 01:53:58,625
doing the same thing
that everybody else is doing.
2400
01:53:58,709 --> 01:54:00,875
♪ ♪
2401
01:54:00,959 --> 01:54:02,685
We have lots of people
who are overconfident,
2402
01:54:02,709 --> 01:54:05,125
and from time to time,
some of them work out,
2403
01:54:05,208 --> 01:54:08,166
and we get penicillin,
or the incandescent light bulb,
2404
01:54:08,250 --> 01:54:11,333
- or we get...
- (rocket roars)
2405
01:54:13,250 --> 01:54:15,291
And if you are
surrounded by companies
2406
01:54:15,375 --> 01:54:17,583
who try very hard
and dedicate their lives
2407
01:54:17,667 --> 01:54:20,875
to achieve the impossible,
2408
01:54:20,959 --> 01:54:24,208
and then sometimes they
are successful in doing it,
2409
01:54:24,291 --> 01:54:26,208
why can't you?
2410
01:54:29,410 --> 01:54:30,458
Holmes:
At the highest level,
2411
01:54:30,542 --> 01:54:33,208
we didn't have the right
leadership in the laboratory,
2412
01:54:33,291 --> 01:54:35,830
and I didn't realize
2413
01:54:35,166 --> 01:54:37,417
until the inspection
2414
01:54:37,500 --> 01:54:39,542
that these types
of issues were in place.
2415
01:54:39,625 --> 01:54:41,792
So, until
the government told you
2416
01:54:41,875 --> 01:54:43,393
that you were really
out of compliance,
2417
01:54:43,417 --> 01:54:44,583
- you didn't know?
- Yeah.
2418
01:54:44,667 --> 01:54:46,417
What was your reaction
when you found out
2419
01:54:46,500 --> 01:54:47,834
that you had all
these violations
2420
01:54:47,917 --> 01:54:49,500
- in your lab?
- It was devastating.
2421
01:54:49,583 --> 01:54:51,542
Don't blame anyone else.
2422
01:54:51,625 --> 01:54:54,650
You have controlling shares in
that company, Elizabeth Holmes.
2423
01:54:54,125 --> 01:54:55,458
The buck stops there.
2424
01:54:55,542 --> 01:55:00,458
People make mistakes,
but you must always admit it.
2425
01:55:00,542 --> 01:55:01,875
My husband's favorite phrase:
2426
01:55:01,959 --> 01:55:04,750
"Excuses are like assholes.
Everyone has one."
2427
01:55:04,834 --> 01:55:07,250
- Sorry. You don't have to put that in there.
- (Gibney laughs)
2428
01:55:07,333 --> 01:55:09,333
Sanjay Gupta:
One of the headlines was,
2429
01:55:09,417 --> 01:55:11,667
"$9 Billion Company
Down to Zero."
2430
01:55:11,750 --> 01:55:13,583
And your investors
and your board members
2431
01:55:13,667 --> 01:55:15,208
are reading those
same things.
2432
01:55:15,291 --> 01:55:17,542
It's probably the most
important question, I think,
2433
01:55:17,625 --> 01:55:19,458
anybody who's watching
has about this.
2434
01:55:19,542 --> 01:55:21,875
- Does it work?
- Yes.
2435
01:55:21,959 --> 01:55:25,458
- You're confident in that?
- I am confident in that.
2436
01:55:25,542 --> 01:55:28,834
Announcer: Without further ado,
I'd like to welcome Elizabeth Holmes,
2437
01:55:28,917 --> 01:55:31,917
- founder and CEO of Theranos, to the stage.
- (applauding)
2438
01:55:32,000 --> 01:55:33,875
Narrator:
Elizabeth did not give up.
2439
01:55:33,959 --> 01:55:36,000
She fought back
by taking center stage
2440
01:55:36,830 --> 01:55:39,709
at a clinical lab conference
in front of all her critics.
2441
01:55:39,792 --> 01:55:43,417
She defiantly unveiled the machine
she'd been hiding for so long.
2442
01:55:43,500 --> 01:55:46,375
- The miniLab is designed...
- She called it "miniLab,"
2443
01:55:46,458 --> 01:55:48,000
as if it were a new invention.
2444
01:55:48,830 --> 01:55:50,291
This is an inflection
point for our company...
2445
01:55:50,375 --> 01:55:53,375
Narrator: But inside Theranos,
it had another name.
2446
01:55:53,458 --> 01:55:55,667
Edison 4.0.
2447
01:55:58,410 --> 01:56:00,500
By 2017, Theranos had spent
2448
01:56:00,583 --> 01:56:03,875
virtually all of
the $900 million it had raised.
2449
01:56:03,959 --> 01:56:06,875
Nearly 300 million
went to pay legal fees,
2450
01:56:06,959 --> 01:56:08,750
settle lawsuits from investors,
2451
01:56:08,834 --> 01:56:13,000
and to refund every patient in
Arizona for their blood tests.
2452
01:56:13,834 --> 01:56:15,667
Henry Kissinger, George Shultz,
2453
01:56:15,750 --> 01:56:18,542
and even David Boies
resigned from the board.
2454
01:56:19,458 --> 01:56:21,291
Elizabeth broke up with Sunny
2455
01:56:21,375 --> 01:56:23,125
and fired him from the company.
2456
01:56:23,208 --> 01:56:27,000
But she never lost her faith
in the power of invention.
2457
01:56:29,410 --> 01:56:32,542
It's finding...
what you love,
2458
01:56:32,625 --> 01:56:34,458
and finding what
you're born to do,
2459
01:56:34,542 --> 01:56:37,125
and when you find that,
whether it's...
2460
01:56:37,208 --> 01:56:39,166
you know, writing, or painting,
2461
01:56:39,250 --> 01:56:42,166
or science, or whatever
it is, when you...
2462
01:56:42,667 --> 01:56:44,375
when you really
2463
01:56:44,458 --> 01:56:47,166
give everything to that, then...
2464
01:56:48,208 --> 01:56:51,542
then you can realize
great things and...
2465
01:56:52,291 --> 01:56:54,291
we'll fail 10,000 times
if we have to,
2466
01:56:54,375 --> 01:56:58,583
but we'll figure it out
on the 10,0001st, you know.
2467
01:57:00,410 --> 01:57:03,375
♪ ♪
2468
01:57:21,375 --> 01:57:24,410
Lawyer: Ms. Holmes,
please raise your right hand.
2469
01:57:24,125 --> 01:57:25,768
Do you swear to tell
the truth, the whole truth,
2470
01:57:25,792 --> 01:57:27,750
- and nothing but the truth?
- I do.
2471
01:57:39,410 --> 01:57:40,208
♪ You can't touch this ♪
2472
01:57:42,583 --> 01:57:43,750
♪ You can't touch this ♪
2473
01:57:46,830 --> 01:57:47,000
♪ You can't
touch this ♪
2474
01:57:47,830 --> 01:57:49,625
♪ Oh, oh, oh, oh, oh, oh, oh ♪
2475
01:57:49,709 --> 01:57:50,625
♪ You can't
touch this ♪
2476
01:57:50,709 --> 01:57:52,291
♪ Oh, oh, oh, oh, oh, oh, oh ♪
2477
01:57:52,375 --> 01:57:54,458
♪ My, my, my, my music ♪
2478
01:57:54,542 --> 01:57:55,667
♪ Keeps me so hard ♪
2479
01:57:55,750 --> 01:57:57,667
♪ Makes me say
Oh my Lord ♪
2480
01:57:57,750 --> 01:57:59,125
♪ Thank you
for blessing me ♪
2481
01:57:59,208 --> 01:58:01,000
♪ With a mind to rhyme
and two hype feet ♪
2482
01:58:01,830 --> 01:58:02,875
♪ It feels good when
you know you're down ♪
2483
01:58:02,959 --> 01:58:04,667
♪ A super dope homeboy
from the Oaktown ♪
2484
01:58:04,750 --> 01:58:06,333
♪ And I'm known as such ♪
2485
01:58:06,417 --> 01:58:08,750
♪ And this is the beat
you can't touch... ♪
2486
01:58:09,500 --> 01:58:11,166
♪ I told you,
homeboy ♪
2487
01:58:11,291 --> 01:58:12,959
♪ You can't touch this ♪
2488
01:58:13,410 --> 01:58:14,792
♪ Yeah, that's how
we living and you know ♪
2489
01:58:14,875 --> 01:58:16,792
♪ Can't
touch this ♪
2490
01:58:16,875 --> 01:58:18,375
♪ Look in my eyes, man ♪
2491
01:58:18,458 --> 01:58:19,208
♪ You can't touch this ♪
2492
01:58:19,291 --> 01:58:20,709
♪ Oh, oh, oh, oh, oh, oh, oh ♪
2493
01:58:20,792 --> 01:58:22,851
♪ Yo, let me bust the funky
lyrics, can't touch this ♪
2494
01:58:22,875 --> 01:58:24,542
♪ Fresh new kicks
and pants ♪
2495
01:58:24,625 --> 01:58:26,559
♪ You got it like that now
you know you wanna dance ♪
2496
01:58:26,583 --> 01:58:28,410
♪ So move out of your seat ♪
2497
01:58:28,125 --> 01:58:30,166
♪ And get a fly girl
and catch this beat ♪
2498
01:58:30,250 --> 01:58:31,166
♪ While it's rollin' ♪
2499
01:58:31,250 --> 01:58:32,458
♪ Hold on pump a little bit ♪
2500
01:58:32,542 --> 01:58:35,166
♪ And let me know it's going on like that,
like that ♪
2501
01:58:35,250 --> 01:58:36,917
♪ Cold on a mission
so fall on back ♪
2502
01:58:37,000 --> 01:58:38,875
♪ Let 'em know that
you're too much ♪
2503
01:58:38,959 --> 01:58:41,250
♪ And this is a beat
they can't touch ♪
188035
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