All language subtitles for 1b18803ef1464467b83b8d94903e666f

Interviewer:
We've had
a great opportunity

in asking so many people
so many questions

about things ranging
from the future
to, kind of, advice,

and we thought
we'd ask a few questions

that run a little bit
of a gamut, really quickly.

-Mm. Okay.
-Woman: Can you look
into the lens?

Interviewer:
We thought it would be
interesting to ask you,

in the year 2025,

what's the thing
you're most certain about?

More people will have access
to their own health information.

Interviewer:
What do you dream for?
Something in 2025?

That less people
have to say goodbye too soon

to people they love.

Interviewer:
That's great.
Can you tell us a secret?

I don't have many secrets. Um...

Charlie Rose:
Are you a scientist
or a technologist?

Or an entrepreneur?

Elizabeth Holmes:
I think I'm an entrepreneur.

I was trained as an engineer,

but... now my time is spent

on doing whatever it takes
to realize this mission.

Theranos is the integration

of the words
therapy and diagnosis.

And if we can shift
toward a model in which

we're determining
the onset of disease

in time for therapy
to be effective,

we will change outcomes.

You founded this company
12 years ago, right?

Tell 'em how old you were.

-I was 19.
-Yeah.

(audience applause)

Holmes:
There was never
sort of a plan

to drop out of Stanford,
but I found what I loved.

I found what I wanted
to spend my life doing.

Pattie Sellers:
Elizabeth has raised
more than $400 million.

The company is
valued at $9 billion.

You own over 50% of it, right?

-Congratulations on that.
-(audience laughs)

Holmes:
We've got an incredible
opportunity to try to uphold

a legacy in Silicon Valley
of changing the world.

And we like to think
about it as a movie,

and you can begin to see
that story in a better way.

We see a world
in which every person

has access

to actionable health information

at the time
it matters.

A world
in which

no one ever
has to say,

"If only I'd known sooner."

A world in which

no one ever has
to say goodbye too soon.

This future

is beginning now.

(birds chirping)

Narrator:
Nestled in the foothills
above Silicon Valley,

there is a 700-acre
plot of land

called
the Stanford Research Park.

According to the website,
it's a community
of and for people

who seek to invent the future.

From here came elements
of the microwave tube,

the mainframe computer,
and the International
Space Station.

Steve Jobs spent time here,

so did Mark Zuckerberg
and Elon Musk.

Elizabeth Holmes saw
herself in their company.

So in the fall of 2014,
she moved her biotech startup

Theranos to the research park.

The company
employed 800 people

and was valued
at nearly $10 billion.

Four years later,
it was worth less than zero.

To understand what happened,

it pays to look past
the price of the stock

to the value of the story.

This compelling tale of
divining hundreds of diseases
from a drop of blood

was a testament
to the imagination
of the inventor.

In the deserted
property she designed,

you can almost hear
the echoes of her ambition

and see how glass walls,
promising transparency,

could become
a labyrinth of mirrors.

Was Elizabeth lost
in a landscape

between what
she could make real

and the world
of make-believe?

Dan Ariely:
For me, this was a story
of how people get trapped

over time with trading off
human values.

And then, the way that
they trade off those values

change them as people
and things go down.

So part of it was
trying to understand--

and I think this is
part of the story--

is the journey
for Elizabeth.

Some people take a path,

trying to do positive things
for the world, right?

Nobody questions
that her motives were...

were positive, but end up
being something bad.

How do we react to this?

You can look
at her at the end,

and say how could
she do this,

but I think that
would miss the point

if you don't understand
the journey.

If you look at her
from the beginning,

it will be a cautionary
tale about all of us.

(projector whirring)

(children chattering)

Holmes:
I grew up spending summers

and the holidays with my uncle.

I remember how much
he loved the beach.

I remember
how much I loved him.

He was diagnosed
one day with skin cancer,

which all of a sudden
was brain cancer,

and in his bones.

He didn't live
to see his son grow up,

and I never got to say goodbye.

The right to protect
the health and well-being

of every person,
of those we love,

is a basic human right.

Over the course
of the last 11 years,

we've made it possible to run

comprehensive laboratory tests

from a few drops of blood

that could be taken
from a finger.

And we've made it possible

to eliminate the tubes
and tubes of blood

that traditionally have
to be drawn from an arm,

and replaced it
with the nanotainer.

And if I had one wish,

standing here with all of you,

it would be that no one
has to go through the pain

of traditional phlebotomy.

I was always...

absolutely terrified
of giving blood.

It's the only thing in my life
I've ever been scared of.

(squelching)

If we were to sit here and
dream up torture experiments,

psychologically, the concept
of sticking large needles

over and over into someone,

and draining out so much blood,

while they're watching this
blood being sucked out of them,

that you've basically
completely debilitated them,

that qualifies as a pretty good
torture experiment in my book.

I find it quite disturbing.

Newsreel Narrator:
This technician is preparing
the blood sample

for a white cell count.

She dilutes the blood
with a special fluid

and puts a measured amount
into a pipette.

Holmes:
Since, really,
the clinical lab infrastructure

began to develop, we've had
this highly centralized,

very big,
analytical instruments

which require that much blood,

and therefore, people have
had to take tubes and tubes

every time they do
a blood draw.

So, laboratory testing
hasn't changed since the 1950s.

It's the closest thing
to mainframe computers versus--

it's not even PCs--
versus mobile phones that...

that I've ever seen, right?

So, the timing is very ripe
to change this paradigm.

(clicks)

(snaps)

(clicks)

(clicks)

(whirs)

There's no shortcut
to really hard work.

And we learn so much more
from our failures

than we did from our successes.

We code-named our product
"The Edison"

because we assumed
we'd have to fail 10,000 times

to get it to work the 10,001st.

And we did.

(projector whirring)

Narrator:
What does it mean
to invent something?

It could be an act of creation,

or an act of deception.

The world's greatest
inventor did both.

We think of Thomas Edison

as the inventor
of the phonograph,

the electric light bulb,
and the way we look
at the world.

Edison's company
made one of the first
motion picture cameras

and the very first commercial
movie, Blacksmithing Scene.

His company produced
over 1,200 films,

documentaries
and fiction films,

including
the first screen kiss.

But Edison's greatest invention
may have been himself.

The first celebrity
businessman,

Edison's secret was knowing
how to tell a good story,

in which he cast himself
as the main character.

"The Wizard of Menlo Park,"

a man who could conjure
anything in his laboratory.

(typewriter clacking)

(scribbling)

He had his name
on over 2,000 patents,

from telegraphs to vacuum pumps

to electric cars.

But he often promised
far more than he could deliver.

In 1878, the New York Sun
printed a claim by Edison

that he had solved the mystery
of the incandescent light bulb.

But it wasn't true.

His filaments kept melting.

When reporters and investors

asked for demonstrations,
he faked them.

To keep journalists
sympathetic,

he gave them stock
in his company.

For four years, he pretended
his invention was good to go,

even while he scrambled
to make it work.

Then, just before his money
and credit ran out,

he solved the problem
of how to keep the lights on.

He was the first to practice
the Silicon Valley art

of "fake it till you make it."

More than a hundred years
after Edison's first movies,

Elizabeth Holmes modeled
her own ambitious career

after the great
American inventor,

with a magical machine
named after the man himself.

Roger Parloff:
It was obviously
such an incredible story.

The 19-year-old, the dropout,

a woman creating
this $9 billion

innovative company.

I went out there for four days:

three interviewing her
and one interviewing
some other people.

What are
you working on?

Parloff:
When she was talking
about some subject

other than diagnostic testing,

she was very unprepossessing,

very ingenuous.

When she began to talk about...

the mission,
or the, you know, her business,

then there was a shift,

and she became very,
very focused, very intense.

Firm control of all the facts.

No question surprised her.

Um... very impressive,
and very idealistic.

(applause)

Sellers:
We were the first
to put on the cover

and write a major story about
this amazing woman next to me.

"This CEO Is
Out for Blood."

This is Elizabeth's second

public live interview...

Parloff: Fortune invited her
to the Most Powerful Women's
conference,

even though she wasn't the head
of a Fortune 500 company.

And she was saying to us,

"I'm the only one of these
people that founded a company."

You know, "They're CEOs,

"yeah, but I founded
this company.

"I invented
what this company is about.

I deserve to be here."

I'll talk with people
sometimes, they'll say,

"Oh, you know,
I want to start a business."

And my question is always why,

because there's
gotta be a mission.

Ken Auletta:
I had heard about Theranos

and Elizabeth Holmes,
a woman executive

in the male-dominated
Silicon Valley,

who was starting a company

with some real
potential social good.

I write a lot
about disruption,

and Theranos was
aimed to be a disruptor

of the established
ways of doing things,

the established, inefficient,

and expensive ways
of doing things.

And she was going to herald

a revolution in medical
treatment in this country.

Narrator:
The lab industry
needed disrupting.

It was dominated
by two companies:

Quest and LabCorp.

Between them, they controlled
almost 80% of the market.

Their blood test prices
were always high
and never transparent.

They were sued for overcharging
Medicaid and Medicare

for billions of dollars.

But the size
of their operations,

including the ability to do
over a thousand different
blood tests,

made them difficult
to challenge.

Until Elizabeth Holmes
and Edison.

Auletta:
She had built a staff
of 700 people.

Well, I went out to look
at the Newark, California,
facility,

which was extraordinary.

(machines whirring)

Well, you know,
her story's so compelling.

I mean, if you think about it,
you go in and you see

this woman lives
in an apartment--

basically, she called
her apartment a mattress.

The only thing
in the refrigerator
was bottled water.

She ate all the meals
at the office.

She slept four hours a day.

She worked in the office
till midnight or thereabouts.

You ask, do you date?
"No, I don't have ti--

I'm married to Theranos."

That was her--
that's literally her words,

what she said to me,
and I believed it.

(indistinct chatter)

Auletta:
You wear black
outfits a lot. Why?

Holmes:
Because in line with the...

designing my life
to be able to give

every bit of energy
I have to this,

I have a closet that
has a very large number

of the exact same
set of clothes,

and every single day,

I put the same thing on,
and I don't have to think
about it.

Auletta:
Steve Jobs used
to say that, too.

Holmes:
He wore jeans. (laughs)

Parloff:
She was obviously, you know,

Steve Jobs was her hero.

And I just felt,
oh, well, she's a young person.

You know, I'll give
them their little
hero worship thing. (laughs)

Holmes:
I'm a tremendous admirer
of what Jobs did.

I think he was a genius.

I do have to disclose that

I've been in black turtlenecks
since I was seven. (laughs)

Holmes:
I want to talk for
just a minute about

what it means to be
in this company right now.

I was sitting yesterday
with the president
of Brazil for lunch,

and this woman had invited me,

and Eric Schmidt from Google,
and Mark Zuckerberg,

and the Airbnb guys,
and the Uber guys,
and a bunch of other people,

and she sits down at the table
with all these people,

and we all have
the headphones on, translators,

and she says, "The strategic
priority of Brazil

"is to get access
to low cost diagnostics

"that can facilitate
early detection

-and prevention and..."
-(cheering)

(applause)

We're all kind of sitting there,
and you can see, like,

all the other CEOs' faces
being like...

not wanting to be
the ones in the spotlight,

and she kept on doing this
for like an hour and a half.

And so, of course, I'm trying
to, you know, be humble,

but I'm...

Erika Cheung:
When I first met her,

I thought she was
really interesting.

It was... It was hard
to really get a sense
of who she was,

but in a way,
I felt I idolized her
in so many ways,

based on, like,
the little that I had read.

Nice to meet you.
I'm Elizabeth.

Cheung:
For being a woman
in the sciences,

being a woman in tech,

the fact that she started
her own company,

that really got me excited.

You know, she was
a really good idol to have.

Thank you so much.

In a sense,
I was super naive and like,

almost drank the Kool-Aid,
like, a little too quickly,

and was just more enthusiastic
to be a part of the team.

Holmes:
You all are part of something

that is a revolution,
and you're part of something

that is going to change
our world.

What higher purpose
is there in life

than to be able
to be doing that?

Cheryl Gafner:
When I went on an interview,

Elizabeth was there.

And I was
a little surprised,

considering
I would be the low man
on the totem pole.

I found out later
there was no one

that got past her
in order to get hired.

Um... (laughs)

I know this sounds odd,
but my first impression was

that she didn't blink.

And so, I always wanted
to make sure that I kept

great eye contact 'cause
I didn't want to be the one

to look over, right?

Uh, so, she was very intense.

David Philippides:
Comparing it to the other
interviews that I had

with other tech companies
in the Bay Area,
it was different.

You know, they didn't tell me
nearly as much about
what they were doing.

She never blinked
during the interview.

She did
tell me about

just the one drop
of blood

and it's a medical
testing company.

Um, they didn't say anything
about how it worked,

or what the technology was.

They just said, "You'll be
working with consumables,"

which was kind of vague.

Alex Gibney:
How did they describe
the project?

-They didn't.
-(Gibney laughs)

So, how did you
know what you were
signing on for?

You know, I had
a very vague idea,
but I didn't.

That's actually
not that untypical
in startup environments.

They want to keep
what they're doing secret.

The response
of the major lab companies

was to say,
"Well, we don't know

-how they're doing
what they're doing." And--
-Exactly.

And if it's so great,
why don't they show it?

There's too much secrecy
is what they said.

Right, that's exactly
what they said.

And, you know, our position
on that is, first of all,

we don't think that we need

to explain ourselves
to competitive companies.

What we're working
to do is to invent
an integrated solution

where every person
gets access

to this wealth of information
from tiny droplets of blood,

and then see
how they change over time.

Parloff:
She talked some
about currently,

you get a blood test
maybe once a year,

and so you get a snapshot
of what's going on.

If you were to start doing it
every month, say,

you would get a movie.

(projector whirring)

Holmes:
You have multiple frames
from that movie,

and you can begin
to see the context

of projecting where
someone is heading.

You're seeing changes
in laboratory data over time,

and understanding the clinical
significance of that.

The data can be used
in a more meaningful way.

Parloff:
It was personalized medicine.

Maybe you could catch
something very early.

You know, you could catch
an early cancer,

or you could get-- you know,
when there was still time.

This was sort of
the vast vision.

Ryan Wistort:
So, the idea with
the Edison was to stick

the lab inside the box.

Because it incorporates
so many different disciplines,

it's hard to pull this off.

(beeps)

There's all these
different components

that go into the machine.

There's a centrifuge,
there's a...

a little thing
the samples go into.

There's a way
to prick the blood.

All these things were
prototypes, right?

The first thing is,
you look at what the
chemists are doing.

-Gibney: Right.
-Right?

Because you're automating
what somebody is already doing.

You're not inventing
something totally new.

I'm going to have
to have a kind of dance,
let's say, right?

I'm going to have to have
this thing go to the place,

pick up something,
drop off something,

mix something, etcetera.

(whirring)

Philippides:
The idea was the pipette

poked holes into these
little plastic containers

with reagents in them.

It mixes some of
the reagents with blood.

Matje:
My group was responsible
for developing

about 60 different tests,

and trying to get those
to work on the Edisons.

Wistort:
The trick was how do
you make it dependable,

then how do you incorporate
it into a bigger process

that involves these
50 milliliter samples?

Matje:
It was a complex device.

You know, a lot of moving parts,
and a complicated system.

It's not easy to do
all this stuff, so it was...

You know,
I figured we'd get there.

We felt we were on the path

to be able to make machines
that could do this.

Auletta (on recording):
Elizabeth Holmes,
we're on the record
unless you tell me not.

Let me begin. When you think
about yourself as a child...

Auletta:
I had multiple
interviews with her,

but one of them
was to go to a Chinese
restaurant in Palo Alto.

And it was really good food.

Holmes (on recording):
I had the blessing
of being able to figure out

- what I...
-(waitress
speaking indistinctly)

Holmes:
Thank you.
...wanted to do very early.

And I was very
interested in the concept
of creating things.

I must've been, like, seven,
and I had a notebook

of a complete design
for a time machine.

It was a very detailed drawing

of all the functionality,
in terms of the interface.

I got really
interested in the idea

of creating and building
something.

But ultimately,
it became clear to me

that the vehicle
of a business provides

the greatest tool for being
able to affect change.

Holmes:
I was very studious.

I never really watched TV.

As I went through school
and went through high school,

my best friends were...
were books.

I got into Moby Dick
and The Iliad and The Odyssey

at a pretty young age.

Understanding how
great people and great leaders

led groups of people.

So much changes in our society
technologically,

but as humans,
we don't change a lot,
you know?

Phyllis Gardner:
This is a high tech atmosphere
around Stanford.

Internet, the startups,
the biotech, and medicine.

I started on the faculty
here in 1984.

I'm currently
a tenured professor.

And I was on boards
of companies,

many private
and public companies,

and I started
a couple of companies.

So, I tend to be sought out

by kids who have
an interest in business.

And people have
made fortunes.

Students,
young people,

turn into
multimillionaires.

It makes for
an odd morality.

When I was at Stanford,
I started to spend all my time

thinking about how
you could build something

that would change
what we know

in terms of early detection
and prevention.

I filed my first patent.

Gardner:
One day,
Elizabeth came to me

and she described her idea.

She wanted to incorporate
microfluidics

and nanotechnology
into a patch,

where you could
sample the blood,

and detect an infection,

and then at that point,
deliver antibiotics through it.

Well, you can't do that.
It's impossible, physically.

Antibiotics are not potent.
You cannot do that.

There's a reason you have
a big IV bag when-- Okay.

So I said,
"Elizabeth, that's fun,

but I don't think
that's going to work."

She was a 19-year-old.

She never thought
she had any limits.

She was going to conquer
the world.

She came back twice, I think.

And I just really...

"I try to help students,
but I just feel
I can't help you.

"You're not listening,

but I'll help you find
someone else to talk to."

Holmes:
This used to be
my advisor's office.

We got in. (laughs)

Channing Robertson:
From the very first
time I met her,

it was very clear
she was unusual.

I've taught
thousands
of students,

probably tens
of thousands
of students,

at Stanford,
and...

I knew right away

that I was dealing with
something very, very different.

Auletta:
Channing Robinson, the head
of the science department

at Stanford, leaves his tenured
position to work for her?

Parloff:
He just thought this woman
was something special.

You know, gazing into her eyes,

and realizing that he was
talking to the next...

Steve Jobs or Bill Gates.

There were some
other names mentioned

during the course of our
conversation, like Archimedes.

Holmes:
I actually, originally, did not
intend to drop out of Stanford,

-but I wasn't going to
any classes, and so then...
-(audience laughs)

...logistically,
it just seemed
like a waste of money.

The question was,
as a 19-year-old, how do
you go about the process

of convincing people that
you know what you're doing,

and that you can
pull it off. Um...

I think the first
piece is realizing

that it's not necessarily
about age, and...

um, people, like Steve Jobs,
and Bill Gates,

and the Google guys,

and Michael Dell,
and Larry Ellison,

and others,
have demonstrated that.

You have to have the conviction

in yourself to be able
to make something happen

because, ultimately,
it's up to you.

You know, I don't think
I would want to create

a society where people
were not overconfident

in what they
could achieve.

Like who would
open a restaurant

if that was the case,
or who would...

who would do a startup?

But I think this is
really the issue,

is to say how do you
become a person of vision

on one hand,

and how do you
sell that vision

on the other hand,

but you also want to stay...

not realistic, but, you know,
little closer to realistic

when the task needs it.

Gibney:
You have to be able not
to buy your own bullshit.

Yes. (laughs)

(engines rumbling)

Auletta:
You incorporate
the company in '04.

-Holmes: Yeah.
-What happened in the
intervening nine years?

Holmes:
Our work during
that period of time

was for pharmaceutical
companies,

and for developing
applications for the military.

But that model's
going to evolve now

'cause we're at another
inflection point

-in our life cycle--
-But are you thinking
about an IPO or...

Holmes:
Well, we really believe
that there's value

in being a private company.

It's allowed us
to not have to talk about,

you know, what we're doing
until it's done and introduce,

you know, incredible
innovation without...

Narrator:
Using just her story as
the blueprint for success,

Holmes would convince
private investors

to put up hundreds
of millions of dollars

without ever looking at
audited financial statements.

We like to think that investing
is a rational equation,

a careful balance sheet
of risk and reward.

But in fact, investors,

particularly ones
who come in early,

are often guided by their gut.

Instead of relying on facts,

early investing can be more
like a wing and a prayer.

The word credit comes
from the Latin word credo ,

which means "I believe."

Some of the early
believers included

a former head of software
at Apple, Avie Tevanian,

Oracle's founder,
Larry Ellison,

and a founding investor
of Oracle, Don Lucas.

They conferred
respectability on Elizabeth,

even though they had
no record to go on,

just a vague belief
that business and medicine

were in her blood.

Lucas:
I think she probably
was 21 years old,

had no background
in business,

but her great-grandfather
was an entrepreneur.

So, that's on
the entrepreneur's side,

but she was on
the medical side.

Ah, turns out later

the hospital in there,
where they live

is named after her great-uncle,

who was involved with medicine,
so she came by both of these...

the two things
that are necessary here,

one medicine
and the other entrepreneur...

quite naturally.

Tim Draper:
I remember the day
Elizabeth came in,

full of vim and vigor,

and said, "I'm dropping
out of Stanford."

And I knew her parents,

and I knew her and her brother
as they were growing up.

She was a good friend
of my daughter's.

I said, "Do your
parents know

you're dropping out
of Stanford?" She said,

"Yes, yes!
And they agree,
and it's a great thing.

"And I learned at Stanford

"how this whole health care
thing is working,

and it's just not."

And then she said,
"I'm going to change
health care

as we know it."
I was all over it.

I thought that was
a great opportunity.

Gibney:
I mean, Elizabeth
was a family friend.

You'd known her since
she was a little girl.

Did that go
into your thinking,

in terms of your
initial investment?

No. We've been-- I've been
in the venture business
a long time.

I was the first investor
in Tesla, first investor
in Skype,

first investor in Baidu,
first investor in Hotmail.

I always invest early.

I invest when I see a vision,

I see the opportunity,

and I see the person who
I think can make it there.

I mean, we invest in, you know,

a girl and a dog,
or two guys and a cat.

We just say, "Is this person
going to dedicate their life,

and make something
extraordinary happen?"

And yes, in that case,
she was that person.

So, the reality is that data

just doesn't sit in our mind

as much as stories do.

It's almost like the glue
that takes all of the data,

and even more important,

stories have emotions
that data doesn't.

And emotions get people to...

to do all kinds of things,
good and bad.

And if you think
about the people
who invested in her

with very little
amount of data,

it's about having an emotional
appeal and about having trust,

and believing the story,
and being moved by this,

and being able to tell
themselves a story.

Holmes:
For 10 years, we did this work.
We didn't have a website.

We never put out
a press release.

It was completely heads down.

When we got to a point
in which we realized

that what we were doing
could serve individuals,

I wanted to find the people

who were just
strategically brilliant.

General Mattis,
who was former

CENTCON Commander,
is one of our board members.

Dick Kovacevich, who is

the former CEO of
Wells Fargo is another.

Sam Nunn has done
some incredible work

on nuclear threats
as well as biothreats.

Bill Perry,
former secretary of defense.

Henry Kissinger,
former secretary of state.

And George Shultz,

who was secretary of state

and labor
and secretary of treasury.

George:
About three years ago, I looked
at her and I said, "Well,

I'm about to have a meeting with
a friend of my granddaughter."

(audience laughing)

-Yes.
-As soon as
she started talking,

I did a double take...

Tyler Shultz:
I first met Elizabeth in my
grandfather's living room.

So, he had called me up and
said that he was going to have

some brilliant
woman over to have
a discussion.

He thought that
I would be interested

in coming,
so I went to his house.

It was me,
my grandfather, Elizabeth,

and Dianne Feinstein
was there as well.

Elizabeth kind of pitched
her dream of changing the way

diagnostics is done, really
revolutionizing the field.

Yeah, I was totally
gung-ho about Theranos.

I was really excited about
what she was talking about.

I really wanted to know
what the technology was.

And I actually asked her,
in that meeting,

if I could intern
there over the summer.

I said,
do you guys take interns?

Like, I want to work on this.
This sounds amazing.

We think that...

there's going to be a revolution

in preventive medicine.

I mean, he had a really close
relationship with Elizabeth.

She was almost like...
becoming part of the family.

She was coming to our birthday
parties and Christmases.

George:
We think this is one of
the most optimistic things

out there

about the health care system
and its costs and its problems.

Auletta:
You talk to George Shultz.
He's a very impressive man.

And I was impressed
that he adopted her
like a daughter.

He really believed in her.

Gibney:
From the outside,
all you're thinking is,

wow,
what a board!

Right? I mean,
it's just impressive.

And they were really--
And I talked to most of them.

They were impressed with--
really impressed with her.

Auletta:
This is General Mattis.
I assume we're on the record,

unless you tell me not, and
I'll shut off this recorder.

-But...
-Mattis: Okay.

Auletta:
When you think of Elizabeth,

what are the first words
that come to your mind?

Mattis:
First is integrity,

uh, competence,

and competence is both
technical, scientific,

but also focused
on human rights

in the most classical
sense of what

human rights are about.

And all of a sudden,
you have the ability to know

if someone is ill
or not. I mean,

literally,
within minutes of taking...

you know, a drop of blood.

And I mean, she is really...

a revolutionary
in the truest sense.

It was quite amazing to spend
time with these people.

They were talking about her
as if she were Beethoven.

("Moonlight Sonata" playing)

As if she was
this rare creature

that maybe one in a century
or two in a century come along,

who really can
change the world.

And I remember when
I interviewed Henry Kissinger,

I didn't trust him
on medical stuff,

not to mention on Cambodia,
but... (laughs)

But when I asked him about her,

he described...

Kissinger:
Excellent businesswoman.

Let me see that I can put
this on speaker for a minute.

-Be easier for me.
-Auletta: Okay.

Kissinger: Yeah, but
I don't know how to do that.

(Auletta laughs)

-You put it on ho--
-(receiver clatters)

-Kissinger: How about it now?
- I hear you loud and clear.

-You okay?
-Kissinger: Perfect.

Auletta:
What's your impression
of how she runs the board?

(Kissinger speaking)

Auletta:
I'm told you once said
that these board meetings,

which go on all day...

(Kissinger speaking)

Parloff:
You know, whatever you
think of Henry Kissinger,

he's met a lot of leaders,
he's met a lot of world leaders,

he met a lot
of corporate leaders.

I thought he might be a judge,

but the truth is that

none of these people
were really in a position
to know what--

-Gibney: To judge 'cause they
didn't have the qualifications.
-Yeah. No. No.

She didn't really
want scientific input

from what I could determine.

Engineering a bit more

'cause she was inventing
an engineering device,

but not medicine.

She aligned herself
with very powerful older men

who seemed to succumb
to a certain charm, and...

those powerful men
could influence people

in the government,

influence
the Department of Defense.

Auletta:
When I asked her was
this all about getting
government contracts,

she danced around
my questions about that.

Holmes (on recording):
Everything that we're doing

may go into certain work
we do for the military,

which we really couldn't
put on the record.

Well, off the record,
we were doing some work

for the military,
which we can talk
about off the record.

Auletta:
Why would that be
off the record?

You know, generally,
our philosophy
on these things is

talk about it if there's
a purpose to talking about it,

and there just--

Auletta:
So, could you say
anything about

the military contracts
you have? I mean...

-Holmes: No. (laughs)
-(Auletta laughs)

When you-- I'm going to make
you feel guilty at some point.

Holmes:
You already have.
You're good at it too.

Narrator:
In conversations,
Elizabeth suggested

that she had contracts
with the military.

In a mock-up of
marketing materials,

Theranos invented a quote
from General Mattis

about a battle plan
to use Edisons

on wounded soldiers
in combat zones,

but this never happened.

Before permitting
Theranos to use
the machines on soldiers,

Pentagon officials wanted
to run their own tests,

but Elizabeth declined.

She had a policy of
controlling demonstrations

and tightly guarding access

to the Edison prototypes.

Auletta:
I pressed them

repeatedly, and I wasn't
allowed, and finally,

I persisted in asking.
"I need to see the machine."

And she said to me,

"All right, we'll let
you see the machine,

but you have to agree not
to describe the machine."

It was downstairs,

in an area you couldn't see
from all the glassed offices.

The lab is a large,
labyrinthian place

bustling with chemists
and technicians,

and housing rows of machines,

each easy for
a single person to lift,

in which the container
of blood is placed.

What exactly happens
in the machine

is treated as a state secret,

and Holmes's description
of the process

was comically vague.

Holmes:
A chemistry is performed,

so a chemical reaction occurs

and generates a signal

from the chemical interaction
with the sample,

which is then translated
into a result...

"Which is then
reviewed by certified

laboratory personnel."

End quote. She added
that thanks to, quote...

Holmes:
Miniaturization

"and associated automation
that we're able to...

handle these tiny samples.

(applauding)

All right, so...

Comments? Sunny?

So, I just want
to expand a little bit

on a comment
that Elizabeth made.

You know, we are a very
conservative company

because we think

that you should get things done
before you talk about them.

Right? And that's
the culture we have created.

So, I just want
all of you to remember

that when we come to work
every day that we carry

that sense of mission in your
hearts every single day...

Matje:
Sunny was very successful

in the late '90s
with a tech company

that sold for a lot of money.

He seemed kind of like
a Mark Cuban character,
potentially, to me,

in some ways, where
he was at the right place,
the right time.

Made a lot of money.

His expertise was
software and IT.

What we are doing is
really, really difficult

because we're going
against an entire system

that doesn't believe
that prevention is possible.

I always felt like Sunny
was making a deal, you know?

Like, he knew the technology,
but just enough to sell it.

To him, this was
another home run
that he was going to hit.

Auletta:
He was 49 and she was 30,

but she was the dominant
figure in that relationship.

And when he talked about her,

he talked about her
in a very deferential way,

that she was kind of a genius.

When he spoke about Elizabeth,

he was really...
reverential.

"Elizabeth is
the most important
inventor of our times."

Matje:
You know, I think Sunny saw
her as this iconic figure
that he could never be,

and so he, I think,
found this vehicle for him
to advance himself in her,

and, you know, she was
on board for it, too.

She lived with him
at some condo in Palo Alto.

I thought that
there was definitely

something going on
behind the scenes there.

They certainly
would leave together,

they'd come in
at similar times.

They're always
talking to each other,

offline, online,
in meetings,

outside of meetings.
They were very close.

It wasn't uncommon
for Elizabeth and Sunny

to go to the Silicon Valley
airport

and go off to some meeting.

They were going to go
sell this thing,

go make a deal. (laughs)

(jet roaring)

Narrator:
Without disclosing their
romantic relationship
to investors,

Elizabeth and Sunny
flew off together
to corporate presentations,

touting the potential
of the Edison prototypes.

One company, Walgreens,
loved the pitch.

In this 2010 PowerPoint,

Theranos showcased
an early version of Edison,

a portable
blood testing machine

that could be deployed in
pharmacies all over the world.

Theranos boasted
the device could,

"eliminate the need for a lab,"

by doing up
to 200 tests in minutes

from a finger-prick drop
of capillary blood.

It wasn't true then,
but once Walgreens
signed a contract,

Theranos struggled to make
it true, constantly changing

the machine's color,
shape, and mechanics.

Strangely,
Walgreens never looked

inside any version
of the magic box

to see if it could deliver
what Theranos promised.

Holmes:
There's a great
Martin Luther King quote.

"Take the first step in faith.

"You don't have to see
the whole staircase,

just take the first step."
Right?

And this is...
this is the first step.

Gibney:
So, talk to me a little bit
about the Edison machine.

How would you say
it was working
in terms of

the vision versus
the reality?

(laughs)

Uh, poorly.

(machine whirring)

We couldn't regulate
temperature very well.

We couldn't reproducibly
transfer fluids.

We had all sorts
of design changes constantly

that we were trying
to fight against,

so it was a comedy of errors
in a lot of ways.

Nugent:
The original concept
was to make a machine

that, at least then,
the chemists could work on

to further develop chemistry.

Over time, we were
able to run a sequence

and we were able
to get results.

Getting results
means, you know,

I get a signal
proportional to
what I'm putting in.

It doesn't mean
it's ready for
prime time, right?

(machine whirring)

Philippides:
You're handling a lot
of fluid in the machine.

Things got blood spilled
all over them and got gunky.

Some of the donors
that we had were,

you know,
just people
off the street

who need money,
and I imagine that,
you know,

there probably
was a fair amount

of hepatitis
and things like that.

And the device would
freeze up in the middle
of running a test,

and then I would have to reach
in there with my hands.

There were needles
within the device

that could puncture skin,

and there's reagents

and blood and everything
spilling all over the place.

Blood that's just sitting there
in the bottom of the vessel,

evaporating into
the air in the room.

It was a mess inside.

Tyler:
Pieces of the device
would literally fall off

in the middle of testing.

Centrifuges exploding
inside of it

and things like that.

Philippides:
Obviously,
they didn't want anybody

to actually see what
was going on in there.

Matje:
So, when we had demos,
they would bring investors

or executives from some company
to a room which would have

different styles of Edison
they were prototyping.

(projector whirring)

They would do a fingerstick
on the executives,

so they'd take
a fingerstick of blood.

They would put the blood
into the cartridge,

and then they would put
the cartridge into this Edison.

(clicking)

(whirring)

They'd walk the executives
out of the room to go give
them a tour,

or to go have a meeting,
or go have lunch or whatever,

and immediately afterwards,
an engineer would run in,

grab the cartridge
and bring it out to the lab,

where my team would do
the assays at the bench.

We were on call,
so this could be done
in an hour.

We got reasonable data
every time,

and then we would
get those results,

the engineer would run
into the room with the results,

and these guys would come
back in and they'd say,

"Well, here's your results
from running our tests."

We had listed on the webpage,
like, 200 different assays,

but we had no more than half
of those actually validated
to be working,

even in the lab at that point,
let alone on the Edisons.

Nugent:
Because it's trying
to do multiple analyses,

you need so much hardware
inside the machine,

it was totally impractical.

Wistort:
They were very adamant about

the machine being this big.
It's gotta be this big.

And I said,

"We can't do that.

"The laws of physics just

"are not going to permit
us to cram all the stuff

"that we've decided needs to go
in there into this little box.

Can the box be bigger?"

And a common
response at Theranos

was something
along the lines

of, "Well, maybe
you're not...

"maybe you're not
a Silicon Valley
person.

"You should go work for some
other company if you don't...

"if you don't
believe in the vision

of the product."

And what would start off

as a very serious brainstorming
meeting would turn into

a two-hour conversation about

the name of the cloud
that's going to process
the information.

It's like, time out. How big
does this box need to be

to abide by the laws
of thermodynamics,

and actually function,
and saves people's lives?

Maybe that's more important
than the name of the cloud

that processes
the information,

which I think ended up
being Yoda or something.

-Gibney: Was it Yoda?
-(laughing): I think so.

Interviewer:
What's your favorite sound
from the movie Star Wars?

Yoda.

Interviewer:
What does Yoda sound like?

Yoda sounds like,
"Do or do not. There is no try."

Wistort:
You can't just bend
your way around
the laws of physics.

You can't just have
a great marketing
campaign,

and then get around
these things.

(indistinct chatter)

Matje:
Sunny and Elizabeth,
they didn't care

that we figure out what's
not working, or make sure

that we can actually solve
these problems in a real way.

Nugent:
They always seemed to think
that everything could happen

very fast,
and if you said no,

then they just went around
to find the next person

who would say yes.

And generally, they tended
to start become younger

and less experienced, right?

"We're going to disrupt.
We don't want people

"who are stuck in
the old ways of actually,

"you know, validating
experiments, and, you know,

doing things properly
with documentation."

Narrator:
One of those people who
wanted things done properly

was Ian Gibbons.

The first experienced
scientist hired by Theranos,

he was an expert
in blood testing

and had done much of the work
on the company's key patents,

to which Elizabeth
had attached her name.

Nugent:
Ian was a Cambridge PhD.

He knew things the rest
of us didn't know.

He would work with some
of the younger chemists
and scientists,

and help them
with their experiments,

help them to design
their experiments,

help them to analyze their data,
interpret their data, etc.

He was just a wealth
of knowledge, and it was,

you know, at the time,
it kind of evolved,
I knew him for two years,

and my opinion of him evolved
only just to be better

because he was
just trying to make
the best of his situation.

Like, what I got to see
there, I got to see
how marginalized he was.

Nugent:
So, in about 2012,

Ian didn't have
an office anymore.

I think he felt
slighted by that.

He wasn't involved
with decision-making.

He would look at data
and he said things
were not working.

Ian really got into
bad shape with Sunny--

both Sunny and Elizabeth,

because there's so many things
wrong with that technology.

And isn't that the point of
someone like that being there,

to tell them why
it wasn't going to work?

Narrator:
In early 2013, Theranos
tried to prevent Ian

from having to testify
in a patent lawsuit.

If he were to give evidence
that Elizabeth wasn't

the inventor she claimed to be,

some of the company's
patents might be invalidated.

As the date of his
deposition approached,

he drank heavily and fell
into a deep depression,

afraid that honesty
might cost him his job.

Nugent:
Some time in 2013,

he wasn't in work anymore.

Elizabeth told him
to stay at home

because I guess he was
saying things aren't working.

That was what
the story I was told.

Ian asked me if he thought
that he was going to be fired,

and I told him yes.

Unfortunately.

And that was the night
he killed himself.

He was so distraught
over this stupid, um...

inter-- uh, this...

patent case,
misappropriation case,

and... not knowing
what he was going to do
with the rest of his life,

and that's why
he committed suicide.

Gibney:
What was the reaction
of the company

after Ian
committed suicide?

Um, I don't know because
they never communicated with me,

except to ask me to send back
his confidential stuff.

I brought back his documents
that he had at home,

and left them
at the front desk.

Gibney:
Did you ever hear from
Elizabeth Holmes again?

No.

Holmes:
If today were my last
day on this Earth,

and I could say that

the people who've
gone through hell

in being able to just
get the test done

that they need to get care
now don't...

I've done something
in this world that

has made it a little bit
of a better place, right?

But you've got to be protective
about patent and all of that.

-We do--
-But do you have
something to worry about,

obviously,
competitive businesses

always concerned
about, you know,

-the ideas incorporated
into products.
-Sure.

You have to be on version 10

by the time anybody
else is on version one.

-Yes.
-And that's...

that's what our whole
business is about, so...

So, you're
paranoid?

-Rose: And you have to be.
-We try to be. Yeah.

We want to be the most
paranoid people on the planet.

-Absolutely. Yeah.
-(laughing)

Balwani:
For last two years,

year and a half,
we come under attack,

you know, from outside, and...

it's usually Quest Diagnostics.

Their entire product strategy
is lies, built around

getting people sick and then
living off of their diseases.

And we are trying
to change that, right?

So, it's really important
that you all understand

that what we are doing
here is so disruptive

that we will
always be attacked.

Matje:
The paranoia seemed
to come from the belief that

someone's going to beat
us to it, or someone's
going to steal our ideas,

or we're not going to get
the whole market.

There's a healthy degree
of paranoia and secrecy,

but this was well beyond that.

Matt Hernan:
There was security.

You couldn't go walk up
into her office.

That just doesn't happen.

She had bulletproof glass
on their exterior windows.

There were bodyguards
waiting outside,

you know, couple guys
at the front lobby.

And that increased
more and more later on.

But, yeah, her and Sunny
walk in at the same time
every morning.

"Eagle One,
Eagle Two's
on their way."

And soon as
they start pulling in,
"Okay, be ready.

Have the doors open."

She was Eagle One,
Sunny was Eagle Two.

(lock beeps, clicks)

Philippides:
Sunny supposedly

tracked all the key card
entries and exits,

so you would be
identified each time

you went into any area.

Cheung:
We would send e-mails,

not CC Sunny or Elizabeth,

and we would get
a response back from Sunny.

And I remember that was
a very big turning point for me,

where I was like,
"You are being monitored.
You are being watched."

Gafner:
I found out
that I was being keystroked.

That means that
anything that I typed

was being watched internally.

Gibney: It seems
kind of extreme

for a receptionist,
doesn't it?

-Did that happen to
you anywhere else?
-No.

And, of course, nondisclosure
agreements had to be signed.

Wistort:
A giant stack of paperwork

saying you can't speak
poorly about the company,

you're legally liable
for any detriment caused

to the company. It's like,
who's writing these contracts

and what are
they trying to hide?

Matje:
We weren't supposed to tell
our families what we did.

We weren't supposed
to talk about anything

that went on
inside of Theranos.

Cheung:
Then, after a while,

people became paranoid
of one another.

Nugent:
We became much more siloed.

Walking down the hallway,
you'd say hi and the person
would look

at the ceiling or the floor or
anything to avoid eye contact

and not acknowledge
you back.

Then the next person
and the next person,
and then you'd notice,

there'd be whole groups
that just wouldn't...
you were invisible to them.

It was very hard
to communicate
information sometimes

because there were
so many blockades
and silos

and this emphasis
on secrecy.

If the people from
the chemistry team could talk

about what was coming next
from the engineering team,

they would've said,
"Well, that's not going
to solve the problem,"

but since everyone was
working on it separately,

they could all keep
working forever

without actually
solving anything.

(camera clicks)

The mantra in Silicon Valley
is, "Move fast, break things,"

and that is really dangerous

when people's lives
are in the balance.

Wistort:
Silicon Valley is
really good at making

a web-based e-mail client,

or really great at making
a chat app with emojis on it.

Photographer:
A little mile when you
kind of think about

what is all in that
thing you're holding.

Wistort:
But Silicon Valley
is trying to do things

where people's lives
are on the line.

We're trying to make
autonomous vehicles.

We're trying to make
medical devices.

We're trying to do
these things that
if you don't do it right,

quite frankly, people can die.

You need to approach it
with a different lens.

The problem is that when
you're developing the future,

you don't know what
the impact is going to be

because no one's
seen this before.

And the testing ground is
often just the general public.

Narrator:
In 2013, Theranos went live,

testing real patients
in Arizona

as part of a partnership
with Walgreens.

It was a risky move.

The Edison machines
had problems,

and they weren't approved
by regulators for
in-store testing.

But Theranos was
running out of money

and needed the Walgreens deal
to attract new investors.

So, Elizabeth sold
Walgreens on a stopgap plan

to launch the Wellness
Centers without the Edisons.

Instead of testing
blood on-site,

patients' samples would
be sent to Palo Alto,

where Theranos had hastily
constructed a clinical lab.

Many of the technicians
were inexperienced.

When one lab director quit,
Theranos replaced him

with a dermatologist.

Due in part
to the Walgreens launch,

Theranos was able to raise

over $400 million
from new investors,

like the Walton family,
Betsy DeVos,

the owner of
the New England Patriots,

and Rupert Murdoch,
who put up $125 million.

To investors and patients,

it seemed like the system
was working as advertised.

Patrick O'Neill:
The plan was
launched in Arizona

as if it's
a nationwide campaign,

and then take key markets and
roll it out across the country.

I wasn't an engineer.
I wasn't a scientist.

I wasn't in R&D.

I was there to create
a consumer brand.

We came up
with three adjectives
to describe Theranos:

simple, human, and optimistic.

Because there are
so many barriers

to getting your
blood drawn,

whether it's
fear of needles,

or fear of finding
out the results,

living far away,
can't afford it.

There's just
a lot of barriers.

It's like, people
that have this

fear or this angst
or don't like it,
let's convert them.

-(bell rings)
-So, I hired Errol Morris.

Errol worked with Apple.

Did a lot of great
work with Apple.

And Elizabeth was
taken by that.

This could be potentially
the Apple of health care.

Holmes:
Exactly.

-Morris: I'm a fan.
-Well, likewise.

O'Neill:
We did casting.

Real people that have
all these issues.

We did also reach out
to existing Theranos customers,

and had several of them come
and tell their real story

and their experience
with Theranos.

-Morris: Hello!
-Hi.

Morris:
Thank you for coming in.

-Assistant Camera: A-mark.
-(clacks)

Morris:
So, as usual,
I have no idea

what questions to ask
or where to start.

I think we'll figure it out.

(laughter)

There are so many people
that don't have insurance

and can't afford insurance.

I was going to doctors,

and I couldn't afford it.
I was paying out of pocket.

If you're trying to live a life,
it gets in the way of it.

And if I could receive
this information,

without having to spend all
of this money along the way,

that would be amazing.

Eight hundred dollars
for a series of blood tests?

-It can be pretty stressful.
-It's expensive.

It's ridiculous.

Gibney:
Once they went
live in Arizona...

-Right.
-...dealing now
with real patients...

-Right.
-...as opposed to R&D...

-That's right. Yes.
-...you know,

then you begin
to wonder, like,

-is it--
-Well, I think here's...

my context for this is,

you know, go back
to Jobs for a minute,

and all the people
that said no to him,

and he refused no,

and did it anyway
and proved everyone wrong.

So, my measure
of success at that level,

a visionary,

owns his own company,

in creating products
that change the world,

he did not give up
or give in ever.

So, that was
my measure of success.

Now, on patients,
that's a whole other thing.

Narrator:
In many states,
patients aren't allowed

to order their own lab tests
without a prescription.

Doctors are supposed to provide
guidance and oversight.

But Elizabeth lobbied
the state of Arizona

to pass a law allowing
patients to order lab tests

without consulting doctors.

Giving people the right

to obtain a laboratory test

will, by definition,

begin the process of
enabling them to engage

in their health.

Ms. Holmes, you are magnificent,

and there isn't a question

any of us could ever ask
that you haven't answered

20 or 30 times before.

This law would allow you
to order your own blood work,

and you get the results.

This is what
Theranos puts out.

It's a menu.

You kind of order à la carte,

but there are some
cautions raised

from the medical community.

Stephanie Seitz:
You can't just look at a lab.

You have to look at the whole
patient, the whole person.

We can't write
a prescription
for somebody

that we haven't
done a physical
exam or have seen,

so it kind of
was like,

how are we going
to deal with this?

Low cost was very interesting
to the patients,

but then also being able
to order their own labs,

and they really liked that.

What made me concerned was,
as a physician,

you can call the lab
and ask simple questions,

and these are questions
that we would ask any lab.

But Theranos,
they weren't very transparent.

We tried to tell patients that,

"Listen, we're not getting
a lot of information

"about how they
do their testing,

and so we're kind
of unsure of them."

But then,
Theranos started giving
out vouchers or gift cards

to get labs,
free labs done there.

And so it just kind of...
exploded.

Mom, you really are
an important part

of our family because...

(clears throat)

we really love
you so much.

Your health is
really important to us.

The kids adore you.

Grandmother:
Está bien, chiquita.

Announcer:
Theranos gift cards.

Because nothing is
more important

than the health
of those you love.

(indistinct chatter)

-Assistant Camera: Marker.
-(clacks)

Serena Stewart:
Because of my extensive
background in phlebotomy,

they offered me
the trainer job.

Basically, I was training
the Walgreens technicians

and pharmacist to do the
fingerstick process because...

no one at
Walgreens had ever

handled blood
or bodily fluids.

So, talking about

what do you do in case
of an exposure and...

how do you handle
adolescents,

um, you know, just everything.

What do you do
if someone faints?

Holmes:
Our goal is to be
within five miles

of every person's home
through the Walgreens
nationally.

Our success will be in being
able to make it possible

for no one to ever have
to go through the process

of being stabbed by a big
needle to get blood anymore,

and be able to begin
to get access to this lab...

Parloff:
As I was doing my research,

they had about 90 tests,

and by the time
I was ready to publish,

they had over 200.

I wondered at the time

how exactly was
she miniaturizing

200 different tests,

and how exactly
were you going to get

all of this done
in the small analyzers?

And she was charging
so much less than the others,

so all of that
strained credulity.

I just didn't think that this

very sincere,

earnest, idealistic,
young woman

was deceiving not just me,

but Walgreens Corporation
and investors

to the tune of more than
$400 million at that point.

Holmes:
To be able to give people

the tools to change their life

is an incredible blessing.
It's a privilege.

Every single day,

I'm just so grateful
for the way in which
this is unfolding.

It's a gift from God.

Ariely:
We have to understand
that this is all about

wanting the world
to be a certain way,

and basically being able
to rationalize our actions

to try and make it true.

You have to want
a certain thing,

and then you should be able
to kind of bend reality,

or rationalize things
to allow you
to do that.

But the other
thing is that

what about
reasons for good?

And I'll tell you
about a study we did.

And the experiment
works like this.

We give people a die,
a six-sided die,

and we say, "Why don't
you throw the die?"

And we'll pay you
whatever it comes up.

Comes in six,
you'll get six dollars

five, five dollars, four,
and so on until one.

But you can get paid
based on the top side
or the bottom side.

Top or bottom, you decide,
but don't tell us.

So, I give you the die,
I say, "Don't tell me."

Think top or bottom.
You have it? You know which one?

-Now, toss the die.
-(clatters)

And let's say the die
comes five on the bottom

and two on the top.
And now I say,

"Alex, what did you pick?"

Now, if you picked bottom,
you say bottom,
you get five dollars.

You pick top,

what do you say?
You say the truth? Top?

Or do you change your mind?
You say bottom
and get five dollars.

In our experiment,
people do this 20 times.

And every time they
think top or bottom,

commit it to memory,
toss the die, and they write,

"Five and two.
I chose five," and so on.

And when you do it
20 times, you find that

people are extra lucky.

Right? And luck has
this really nice feature

of focusing on the six-one
die tosses, right?

They're extra lucky on
the six-one die tosses,

not so much on
the three-four.

That's the basic experiment.

Now, here's the thing
I want to tell you.

We do the same experiment,

but we connect people
to a lie detector.

And we ask the question
of whether the lie detector
can detect it,

and the answer is yes,
the lie detector can
detect lies,

not all the time,
but it can detect it.

In another version
of the experiment,

we do the same thing,

but people pick a charity.

And all the money that
they're going to make today

goes to that charity.
Right? For a good cause.

What do you think happened,
people cheat more or less?

People cheat more.

And the lie detector
stops working.

Why? Because what does
the lie detector detect?

The lie detector
detects a tension.

I want more money,
but I think it's wrong.

I want more money,
but I think it's wrong,

but if it's not wrong,

why would you worry?

If it's for a good cause,
you can still think of
yourself as a good person,

and that's how things start,
and then it becomes
a slippery slope.

(vehicles whooshing)

John Carreyrou:
I was at the
Wall Street Journal

on the fifth floor
of the Journal newsroom

in midtown Manhattan.

I had couple weeks
prior finished

a long series
on Medicare fraud.

So, I was looking for

something new
to sink my teeth
into,

and one
afternoon,

I'm at my desk,
my phone rings,
I pick up,

and it's this source of mine.

He asked me whether I'd read
this New Yorker profile

of Elizabeth Holmes
that had been published

a couple weeks prior
in December of 2014.

As it turns out, I had.

And there was a quote
from Elizabeth Holmes

that Ken Auletta described
as "comically vague."

It sounded like the words

of a high school
chemistry student,

as opposed to a sophisticated
laboratory scientist

who'd really
invented new science.

But I might not have
done anything about it

if it weren't for the fact that

my source was now coming
to me with this tip.

He said there's
a laboratory director

who had just left Theranos
on pretty bad terms

because he had become
increasingly concerned

about the practices that
he had witnessed there.

My ears definitely
pricked up at that,

and so I made contact.

-(keypad beeps)
-When I got him
on the phone,

after trying him
a few times,
he was terrified.

-(phone rings)
-He was being hounded
by the law firm

of the famous
lawyer David Boies.

One of Theranos's
strokes of genius was
to hire David Boies

and also give him
stock in the company.

I mean, this is a lion
of the legal industry,

arguably the most well-known
lawyer in America,

who had represented Al Gore
in in the presidential recount
in 2000.

Before that,
won a case on behalf
of the Justice Department

against Microsoft,

and had shred Bill Gates
during 20 hours of deposition.

And he would later become
famous as the legal muscle

for Harvey Weinstein
and his attempt
to silence accusers.

This was someone
who struck fear
in many people.

The lab director said
that Boies was pressuring him

and threatening him
with litigation.

So, I had to agree...

to keep his identity
confidential.

He told me that the Edison
could only do a few tests,

and that all the other
tests on Theranos's menu,

and at that point,
we're talking about
250 blood tests,

were done on
commercially available

laboratory machines
that had been purchased

from companies like
Siemens and DiaSorin.

And then they were also lying

about the reliability
and the accuracy
of the blood tests.

(birds chirping)

So, I went to Arizona

to get myself tested.

And so,
one morning, I went

to the Walgreens
that was closest
to my hotel.

I sat down
in one of these

little Wellness Centers,
and the phlebotomist,

I heard her talking
on the phone,

and typing on a computer
for a few minutes,

and then she turned around
and she came at me

with a tourniquet and a syringe.

And I said,
"Why not a fingerstick?

"I thought
this was all about,

you know,
a fingerstick blood test."

She said,
"No, your order actually

includes tests that
require venous draw."

Parloff:
The truth is that,
before my story came out,

there had already been
instances of people

going in to get
their blood checked,

and they would need
to do a venipuncture

instead of a fingerstick
of capillary blood.

And so, I asked about
that a number of times,

and the answers were
incredibly opaque.

Auletta (on recording):
So, my question is

what percentage
of your tests are

needle rather
than finger prick?

Holmes (on recording):
I-I don't have a really
good number for you

because it's changing.

And we're really confident
being able to say

that we're very close
to 99% being on capillary,

but when you try
to pinpoint a number--

Auletta:
We talking about
in the next

-five years?
One year? Two months?
-Holmes (laughs): No.

Much less than a year,

without question.

Gibney:
At the time, you
didn't think that

that was necessarily
evidence of--

Absolutely not.
I actually believed her.

Of course, I remember
her saying it to me.

And... that's a lie.

Period.

Stewart:
So, after a year or so,

we started to see
the fingerstick
collection dwindle,

and more venipuncture increase.

Gibney:
What did they tell you
about why they were switching

to part fingerstick
and part venipuncture?

They just--
They didn't tell us.
It just happened.

We were told
we would need to say
this blanketed statement:

"Due to the test that
your physician ordered,

"we have to perform
venipuncture

"to make sure
that we had enough

"sample to perform the testing.

Would you like to proceed?"

-That's it.
-That must've surprised you.

Yeah, it surprised
a lot of the technicians.

It surprised
a lot of the patients,

or the customers
that were coming in, too.

Some people, uh,
expressed profanity,

stormed out,
demanded their money back.

Then, during that whole
transition to venipuncture,

we had this big hiring boom
where I had to train
50 more employees

because now we opened up
our next 10 Wellness Centers.

Narrator:
With the Walgreens roll out,

the problems at
Theranos were magnified.

Instead of shutting down
until the Edisons could perform

all the tests on
the Theranos menu,

Elizabeth and her team
invented a workaround designed

to create the illusion
of a new technology.

For most tests, they were
forced to use venous blood,
drawn with needles,

and to buy the same machines
used by every other lab.

But to keep Elizabeth's
fingerstick dream alive,

Theranos modified
some of those machines,

so they would work with
diluted capillary samples.

And for a handful
of patient tests,

the company used
the old Edison prototype

Elizabeth had
pitched to Walgreens.

What we've worked to do
is eliminate the error

and variability
that's associated

with human processing
of samples.

Tyler:
When Elizabeth says
the whole process
was automated

from start to finish,
it was... (laughs)

it was, uh, yeah,
that was a stretch.

Cheung:
It would sometimes
take six hours

just to set up the system

before we could even
run the patient samples.

I was filling up containers,

doing so many manual
things with hands.

And the scary thing about
the nanotainers was they could

hop off your tray and they
would be on the ground,

and you might not be
able to spot them.

Philippides:
They had to dilute
the nanotainers

to run it on
the Siemens machines,

which was not how they
were supposed to be used,

and so people who worked
in the clinical lab

were nervous about that
because they were violating

the operating standards
for those devices,

which, you know,
are rigorous standards

since they're
being used to test

people for diseases.

We were fudging results,

rerunning quality control
tests until they passed.

Matje:
The solution at some point was,

"If you just throw out
that one data point,

then the other three
look beautiful."

And that's not
the way you approach

science that's going to be
impacting people's lives.

Philippides:
There were people
who had to run tests

on devices that they knew
weren't working,

and give those
results to patients.

People were very upset,
you know, crying.

Some members of
the CLIA lab would even

have to call patients
and tell them that
they had to go

to the emergency room
'cause the lab test was,
you know, so far off.

Cheung:
What really hit home for me is

we were starting to do
more infectious disease.

Hepatitis C, prostate cancer,

and even syphilis.

Tyler:
I was running precision
testing for syphilis,

and there was a lot of
variability in the test,

but Theranos said,
"This is safe to use

on real
patient samples."

And I was kind of blown away.

If a hundred people
who had syphilis

came and got tested
on the Theranos devices,

we would only tell 65 of
them that they had syphilis,

and we would tell the other 35,

"You're healthy. No need
for medical intervention."

So, if people are

testing themselves for
syphilis using Theranos,

there's going to be a lot more
syphilis in this world.

Seitz:
Their downfall was
when they started

giving us results that
were not matching up

with other labs.

We started seeing that,
at first, with TSHs,

which is the thyroid
stimulating hormone.

Patients that had been
coming to us for years

to get their TSH done,

they had gone to
Theranos and their labs

were changing
really drastically.

So, we started sending
them to LabCorp,

just to verify, and
that's when we started

seeing some pretty
abnormal results.

I understand
how a patient

would wanna order
their own labs,

but then they get it
and they don't know
what to do with it,

or they go
on Google

and google
everything
under the sun,

and see that
they have cancer, so...

-Gibney: When they don't.
-When they don't!

Gibney:
When you read about how many
tests were actually wrong...

-Mm-hmm.
-...did that concern you?

It did because I had
some of those tests

performed on me
and my children!

(laughing) I did!

So, I immediately
went back to...

the other
big lab companies,

and got my test done,
the same test done,

and I compared them,
and there was
a big difference.

So, yeah, it was scary.

It was very scary.

Balwani:
There are so many people who
reach out to us and thank us.

This one guy, he said,
"Thank God for Theranos."

I mean, how many times you
say that about companies?

You buy a product, and do you
ever say, "Thank God for Uber?"

Well, maybe sometimes, but--

-(laughter)
-But you will say

thank God for
Theranos every day,

because every time
you need a lab test,

every time your
family needs a test...

Cheung:
I couldn't feel
comfortable

with running these
tests on patients

because,
at the end of the day,

I wouldn't run them
on myself.

I wouldn't run them
on my family members.

And it just didn't
make sense that,

internally,
we had so little faith

in these tests,

but we're still resulting
them on patients.

Balwani:
Unprecedented transparency...

Cheung:
I finally decided
enough is enough.

I went into Sunny's
office and I said,

"We're not letting
patients know

when these results are false
or when we make a mistake."

And effectively,
what he did is said,

"What makes you think you're
qualified to make that call?"

And, "You need to just
sit down and do your job."

Thank you.

At that point, I knew.

It's just unacceptable
what this company is doing,

and I don't want to be
a part of that.

The kind of technologies
that you're building

practically are changing
people's lives every single day.

Cheung:
I couldn't understand
how someone could
continuously lie.

It really changed
my perception of her.

That, okay, this person,

you know, plays this role of,

you know, wanting to make
health care more accessible,

of really trying to leverage
innovative new technologies

to solve this huge problem
that we have in health care,

but it's all a show.

I grew up spending summers

-and the holidays...
-(projector whirring)

-...with my uncle. I remember
how much I loved him.
-I have a really vivid memory.

-I loved him so much.
-He was fine.

He was diagnosed one
day with skin cancer...

-All of a sudden,
-And one day,
he has brain cancer...

-And in his bones...
-All of a sudden...

He was gone before
I ever got to...

-My uncle...
-My uncle...

(overlapping voices)

Tyler:
When I think of Theranos,

I really feel like there were
two entirely different worlds.

There was the carpeted world,

and there was the tiled world.

In the carpeted world was
where Elizabeth was a goddess.

Everyone almost worshiped
the ground she walked on.

-(cheering)
-She could do no wrong.
She was the next Steve Jobs.

Theranos was
changing the world.

And then you go into the tiled
side and nothing works.

We're on a sinking ship.

Everything's a lie.

Reconciling
the differences between

those two worlds was
really hard for me to do.

I knew Elizabeth personally
from all these

interactions
through my family,

so I really trusted her.
I believed in her.

I would leave
the tiled world thinking,

"Oh man, sinking ship."

And I would go have one
conversation with Elizabeth.

Holmes:
Theranos was founded
with the goal

of creating a more human,
actionable health experience.

(echoing):
If you can begin to
understand your body...

Tyler:
And I would be so motivated
to go back and work,

and I felt like I was
changing the world again.

And I would go back
into the tiled world,

and I would go, wait,
what just happened?

You want it
to be true so badly,

and even for me, I was
working with these devices

every single day,

and she could still
kind of convince me.

When I think back
on those conversations,

I just think,
how did she do that?

Matje:
You start to believe
that maybe you're
the one who's crazy.

Because everyone else
thinks this woman's great,

and everyone else wants
to throw money at her,

wants to be on board with this,
and wants to be a part of it.

I mean, at the time,
she was this iconic figure,

this woman in tech who was
revolutionizing everything,

this Steve Jobs imitation.

Sometimes, you have to think
maybe you're wrong.

(shutters clicking)

Philippides:
At the time,
you wondered whether

Elizabeth's connections
were protecting her.

It kind of caused a bit
of a crisis of faith

in, you know, just the power
of government, and how

corrupt or not they were for me.

I thought that Theranos
was going to get away with it.

(applause)

Biden:
You're charging
historically low prices,

which is
a small fraction

of what is
charged now,

and while maintaining
the highest standards.

Carreyrou:
With all her
political connections,

she was chummy with
the Obama administration.

The bet that she made was that

if she surrounded herself
with powerful people,

the regulators wouldn't get
confrontational with her.

The end game, I think,

it comes back to
"fake it until you make it."

Elizabeth never gave up
on her ultimate vision

to get the device
not only in stores,

but ultimately,
in the homes of patients.

She wanted to be like
Apple and Steve Jobs,

in the sense that Apple
devices are ubiquitous.

She wanted Edison devices
in every home in America.

The only thing is you need FDA
approval to make that happen.

(cheering)

(camera clicks)

Auletta:
I did talk to the Chief
Medical person at the FDA,

who expressed some
skepticism. He said...

Auletta (on recording):
"They have not provided
enough information

for the agency to clear
or approve the test."

Accurate?

Holmes:
So, is this something that

-you wanted actually
to use in the article?
-Yes.

Holmes:
Okay, so that's
part of a challenge

because that our legal team
is so concerned about this

because there's a lot
of context behind that.

It creates-- causes
a lot of problems for us.

Auletta:
That's why I'm asking
for context.

Give it to me. I'm all ears.

Holmes:
Okay, let me talk
to our legal team.

Right now, they told me that
I can't comment on this...

Narrator:
Elizabeth was tap dancing

around her discussions
with the FDA.

Rather than submit
full applications,

Theranos flooded the FDA with
vague exploratory letters,

trying to stall for time,

till the Edisons
could do all the tests

that Theranos advertised,

and that could take years.

In the meantime, the Theranos
operation in Palo Alto

was being regulated by CMS,

the federal agency
in charge of clinical labs.

Theranos was also
playing games with them.

Even though some patient tests
were performed on Edisons,

Theranos never reported those.

The company only gave
CMS the data from
third-party machines.

Cheung:
The decision was

let's send what was
on the Immulite

and on the Siemens Advia.

Let's not send
the Edison results.

And that really freaked me out

because that was
suggesting that,

okay, we didn't trust
the Edison test.

And here, we were able
to make that discernment

of what was
the appropriate one to send,

but we weren't doing
that with patients.

And when CMS came in
for the inspection,

Sunny and Elizabeth
only showed them the lab

with the Siemens Advia,
the Immulite.

They never took them downstairs
to the secondary lab,

where we processed all the
fingersticks on the Edisons.

They strictly told us

to stay at your desk.

They didn't want
any of us down there

'cause they were scared
if the inspectors

saw what was going on, that
could have huge consequences.

It just seemed
scandalous to us.

Tyler:
It was getting to the point
where there was really no hope.

You know,
I'd pretty much decided

that I was
going to quit.

Right after I resigned,

I went to my grandfather's
office at Stanford,

and actually showed
him a lot of data,

and the discrepancy
between what I was seeing

and what was being published,

and the explanation
for those differences.

But he didn't really seem
to believe what I was saying,

and he said,
"Elizabeth has told me that

"Theranos really can do
all the things that it says
it can do.

"Theranos is more accurate,
going to change the world.

"They're trying to convince
me that you're stupid.

"They can't convince
me that you're stupid,

"but they can convince
me that you're wrong.

"And I do think
that you're wrong,

so move on with your life."

A few months afterwards,

John Carreyou from
the Wall Street Journal

sent me a message on LinkedIn.

I was definitely in a panic.

There were
confidentiality agreements

that I had signed
while I was at Theranos.

So, I went and bought
a burner phone with cash.

-(phone dialing)
-I called him,
and in that phone call,

I decided that I wanted
to help him out.

I said, my grandfather
made it through Watergate,

and the Iran-Contra scandal

with his integrity
completely intact.

Once he becomes aware of
the fraud that's happening,

he will do everything
he can to make things right.

And I want to give
him that opportunity

because, I think he was 94,
95 at the time.

So, I met with John in person,

and then he sent Theranos

some prodding questions,

and there was just
one number in there.

42.9% that I had calculated
for one of these tests,

that was also in an e-mail
that I had sent to Elizabeth.

About a month after that,

I went to go have dinner
with my parents.

I walk in the door,
and my dad says,

"Have you been speaking
to a Wall Street Journal
reporter?"

And I said yes. (laughs)

And he said,
"Well, they know."

(pedestrians chattering)

Cheung:
After I leave Theranos,

I kind of want to be as far
away from them as possible.

I was working another job,
and at this point,

I had talked to John Carreyrou
from the Wall Street Journal,

who was doing
an investigative report.

So, I'm at work one day.
I'm working late,

and two of my
colleagues are leaving,

and I'm going to be
the only one in the building.

And they look outside,
and they're like, "Hey, Erika.

"There's been this guy
who's just been sitting

in our parking lot
for the whole day."

And that's very unusual.

(walking footsteps)

-So, they walk me to my car,
-(car alarm beeps)

and then this guy comes up,
and he gives me this letter.

And it has the address
of this temporary home

that I'm staying at,
so no one knows this address.

And I open it, and it's
a letter from David Boies.

"If you don't come forward with

"X,Y, and Z document,
or report these people,

there's a potential
that we could sue you."

It was quite,
quite scary for me.

Especially coming
from a position of,

what, I was 23 at that point?

You know, I had not really

not really any money to spend
on lawyers or anything.

I was really freaked out.

Carreyrou:
I'd been asking
for an interview

with Elizabeth
for several months,

and they were giving
me the runaround.

Finally, in June 2015,

we agreed that we'd have
a meeting at the Journal
offices.

This Theranos delegation
comes in, it's seven people,

four of whom are lawyers,

led by David Boies,
and one of the other lawyers
is Heather King...

Heather has just joined
us as our general counsel.

Carreyrou:
...who had been
a Boies Schiller partner,

former Hillary Clinton aide.

Couple of minutes into
the meeting, Heather King

puts a little tape recorder
down on the table.

Another Boies Schiller attorney

put a little tape recorder

on the other end of
the conference table,

and it was very clear

that they were approaching this

as a deposition
in a legal proceeding.

If they were going to record,
then I was going to record
as well.

King (on recording):
Okay, so, you know,
we're here today

to do our part to help
educate you on what

I, at least, believe are some,

you know, false premises upon
which the questions are based.

They're very serious questions,
and there's some very serious

allegations in those questions.

I also turn to David Boies.

David attends all
the board meetings.

Boies:
We wouldn't be here,
spend all this time and effort

if the, you know,

-we've got a technology--
- Carreyrou: So, why don't
we discuss it more freely?

Boies:
Yeah, because it's
trade secret! That's why!

And because you
won't sign an NDA!

Carreyrou:
Is there really
new technology?

Jay Conti:
That's the point.

Boies:
Is it really new technology...

This something no one's
been able to do before.

Okay? Theranos is doing it.

-(projector whirring)
-And unless it's magic,
it's a new technology.

I knew that most
of their blood tests

were run on
commercial
analyzers

made by third
party companies.

And so I said,
how can this
even fall

under the bucket
of trade secrets,

if these aren't even
Theranos machines.

Carreyrou:
Are you saying that
the trade secrets also covers

the way in which you
run a blood sample

on the Siemens Advia?

Boies:
I think, I don't know
the answer to that,

but I can tell you that
it could or it could not.

King: It just feels like
you want us to give you
the formula for Coke

in order to convince
you that it doesn't
contain arsenic.

Conti:
Nobody's asked for
the formula for Coke.

We're looking for
a generic explanation.

Boies:
You don't need to know
how they work.

(overlapping,
indistinct arguing)

Conti:
It sounds like
the Wizard of Oz...

Carreyrou:
So, we went around in circles,

and the fact that
they were stonewalling

in such a strong way,

made me feel like
we were on the right track.

King:
You know, it seems apparent
to us that certainly

one of your key sources is
a young man named Tyler Shultz

because the concerns
that you are raising

precisely are concerns

that he raised in
the very brief time

that he was at our company.

I don't know, I don't
remember his exact words,

but he said, "Well,
they know. They know."

So, I called my grandfather
and he said,

"Elizabeth tells me that
you've been speaking...

"that you've been giving
trade secrets away

"to the Wall Street Journal,

"and, you know, if this
story gets published,

"that essentially, your career
will be ruined, but...

"there's a one-page
confidentiality agreement

you can sign to just
make it all go away."

And so, I go to his
house the next morning,
and he said, "Okay, well,

there are actually two Theranos
lawyers here right now."

I was...

extremely nervous about
what was going to happen,

very uncomfortable
with the whole situation.

They come in
and they give me

a notice to appear in court
in about 36 hours,

a temporary restraining order,

and a letter signed
by David Boies.

They really made me feel
like I was alone.

I was the underdog.
I was going to get crushed.

Lawyer:
Good morning,
Mr. Secretary.

Good morning.

Do you recall a time when
Tyler came to your home,

and there were
some attorneys

from the Boies
Schiller firm there?

I wouldn't call them attorneys.

The man was some
sort of an animal.

Wild animal,

and he assaulted my grandson.

Was one of the dumbest
things I've ever observed.

When you say that
the man assaulted

your grandson,
can you be--

Verbally, verbally,
he just went after him.

If it hadn't ended when it did,

my wife was about
to pick an iron out,

hand iron right out of the
fireplace and clobber him.

Tyler:
My grandfather
physically separates us,

and puts the Theranos
lawyers in the living room,

and I'm in the dining room,

and he's going between
the two rooms negotiating--

-Gibney:
Like a Secretary of State.
-Like a Secretary of State.

And my grandfather
seemed like he had grown--

that his allegiance
to Elizabeth and Theranos
had grown even stronger.

Lawyer: Do you have
a high opinion of Ms. Holmes?

Yes.

Do you believe that
Ms. Holmes was truthful

with you in all of your
interactions with her?

Yes, I think so.

In any of her
interactions with you,

did Ms. Holmes
ever do anything

to give you
reason to believe

that she was trying
to deceive you?

No.

Yeah, that's when...

lawyers became a really
big part of my life.

They were threatening
to sue me for

violating my
nondisclosure agreement,

for giving up trade secrets.

Many times, I had written
notices to appear in court,

and at the last minute,
they would cancel it.

Overall, my parents

spent between
400 and $500,000

in legal fees.

It was getting
to the point where

we needed to find money
somewhere, so they...

they said that they
would sell their house

to keep fighting
this legal battle.

(pedestrians chattering)

Cheung:
So, I ended up
talking to a lawyer,

and they said, they're
trying to scare you.

And he said, one of
the options that you can do
is you can whistle-blow.

You could be protected if you
talked to a regulatory agency.

And I'm like, what regulatory
agency? How do you that?

I've been nervous to send
or even write this letter.

Theranos takes
confidentiality and secrecy
to an extreme level...

(statements overlapping):
Mistakes always happen
in a clinical lab,

but what went on in Theranos
was complete negligence

and honestly felt
criminal in many ways.

Upper level management
constantly made excuses

for their misgivings...
but they continue to...

(statements overlapping)

I don't feel like it's sort
of a cold-blooded scam, right?

It just seems it started off

as something small,
like one lie,

and snowballed into this really

crazy situation.

♪ Can't touch this ♪

(crowd cheering)

♪ Can't touch this ♪

♪ Can't touch this ♪

♪ Oh, oh, oh, oh, oh, oh, oh ♪

♪ Can't touch this ♪

♪ Oh, oh, oh, oh, oh, oh, oh ♪

♪ My, my, my music ♪

♪ Keeps me so hard,
makes me say oh my Lord ♪

♪ Thank you for blessing me ♪

♪ With a mind to rhyme
and two hype feet ♪

♪ That's good when
you know you're down ♪

♪ A super dope homeboy
from the Oaktown ♪

So, what do you guys think
about the FDA clearance?

(cheering)

(whistling)

♪ Can't touch this ♪

O'Neill:
It was around
the 4th of July of 2015.

It was euphoria at the company.

It was, you know...

♪ Bust the funky lyrics ♪

♪ Fresh new kicks and pants ♪

♪ You got it like that,
now you know you wanna dance ♪

This is a very
meaningful milestone

for both Elizabeth and Sunny.

It felt like a great
victory at the time.

(music playing)

Narrator:
It was a big celebration
for a little victory.

The FDA had finally approved

one rarely used test for herpes

to be run on
an Edison prototype.

That was too little
too late for Walgreens,

which put the brakes on
opening new Wellness Centers.

And while Theranos
had boasted revenues

of more than a billion
dollars for 2015,

the actual cash in the door was
only a few hundred thousand.

But Elizabeth and Sunny
were not backing down.

Balwani:
We are going to send a message
to Quest Diagnostics.

Remember, these are
the guys who are after us,

and they're attacking the work
that you guys are doing.

-Are you ready?
-Crowd: Yeah!

Balwani:
Okay. One,

two, three.

All:
Fuck you!

(applause)

(phone beeps)

Parloff:
I saw the alert when
I got up in the morning,

and I read it by my bed.

It had this really
understated headline.

But the contents of the article
were just devastating.

When I got to work,
I read it a couple more times.

Suddenly, all of the trade
secret stuff made sense.

Oh, I see. It's
not a trade secret.

Um...

It's a different kind
of secret, and, um...

Stewart:
I did not know that Siemens
were being used

until after the article hit.

And then
that kind of explains

why we were doing
venipuncture,

as opposed
to the fingerstick
collection.

I then started...
revamping my résumé.

(laughing)

I'm sorry, but I did!

Tyler:
I was lucky when
the Wall Street Journal

actually ended up
publishing their article

because once that happened,

Theranos' efforts
were focused elsewhere.

We never went to court.
We never...

had any sort of settlement.
It just kind of died.

O'Neill:
The fate and future of
the company was at stake.

So, we gathered
in our cafeteria.

Elizabeth and Sunny spoke
to what was happening,

and that these
allegations are not true.

And then, Elizabeth
made a comment about

taking on the
Wall Street Journal
as a fight.

Carreyrou:
I knew immediately

when I woke up
that day that the article

was having impact
because e-mails from readers

and from colleagues were
flowing in to my inbox.

And I was also getting asked

to do various media interviews.

Newsman:
New Wall Street Journal story

by John Carreyrou.
Thanks for joining us, John...

Carreyrou:
The article was a wake-up call

for Silicon Valley.

This sort of gold rush
had been going on.

These unicorns
had been created.

Companies that have valuations
of more than a billion dollars.

They were staying
private much longer

than start-ups had in the
dot-com boom of the late '90s.

And as a result, they were
able to be less transparent

than companies
that have to report

to investors every quarter.

And I think suddenly there was
a realization in Silicon Valley

that this has allowed
fraud to thrive.

Parloff:
Obviously,
when I called Theranos

and tried to speak
to Elizabeth and was told

that she was going to be
unavailable all day.

She was being inducted
into the Harvard Medical
School Board of Fellows.

And, um...
I was just stunned.

I was thinking in my mind,

the Wall Street Journal
has just said...

that you're a fraud, and that
you're company is a fraud,

and the company
I put on the cover
of a magazine is a fraud,

and you're going to spend...

the whole day...

hiding out at this, uh...

at this, uh...

honorary horseshit, you know?

You need to get out here,

and go through this article,

paragraph by paragraph,

explaining what the fuck's
going on at your company.

(bell rings)

Jim Cramer:
Your article was
pretty brutal,

but here on Mad Money,
we know something.

We know that there are two
sides to every single story.

Coming to us this
afternoon from Boston,

where she's attending a meeting
of the Board of Fellows

at Harvard Medical School,
to give her a chance to answer

the charges raised
in the article.

Ms. Holmes, welcome
back to Mad Money.

It's great to be
here, thank you.

This is what happens when
you work to change things,

and first they think you're
crazy, then they fight you.

And then, all of a sudden,
you change the world.

And, um, I have to say,

I personally was
shocked to see that

the Journal would publish
something like this.

Every single one
of the sources that

we spoke with who the Journal
had contacted told us

that the statements
that were being
attributed to them

were false or
misleading...

Carreyrou:
She decided to come out and
address my story and rebut it.

Theranos issued a press release
calling my reporting false,

and they were threatening
us with litigation.

Boies:
The journalism here
has been so bad,

they deserve to be sued,

but lawsuits
rarely resolve issues.

What's going to resolve
this issue is the science,

the marketplace.

Um, the company has been
successful in Arizona.

Doctors are happy,
patients are happy...

Narrator:
Doctors and patients
were not happy.

The FDA was so worried
about patient safety

that it banned the use
of the nanotainer,

putting an end to
all fingerstick tests
at Walgreens.

CMS conducted a surprise
inspection of the Theranos lab,

and found the blood
testing so inaccurate,

that it posed a threat
to patient safety,

likely to cause serious injury,

harm, or death.

CMS revoked the lab's
license to operate.

The letter that
prompted CMS to act

-came from Erika Cheung.
-(laughs)

Cheung:
You know, in the end for me,

it was a bit
of a mixed feeling.

I was really excited because
the truth finally got out.

But then also, a bit of
sadness in the fact that, um...

you know, we all really wanted
that project to succeed.

Gibney:
Have you been able
to win your argument

with your grandfather
in terms of persuading him

of the problems
at Theranos?

He said that he had no idea
how much deception there was,

and that he was proud of me.

Yeah.

Yeah, I'm glad he finally
really gets it.

Carreyrou:
There was a Journal
technology conference

taking place in Laguna Beach
in late October 2015,

and it so happened
that more than a year prior

it had lined up
Elizabeth Holmes
as one of the speakers.

Could you get specific
on the key points today...

Carreyrou:
And not only did she come,
she came swinging.

The tests that are offered
are of the highest quality.

We know what we're doing,
and we're very proud of it.

Were there situations
in which you, uh,

had to dilute
blood samples?

What the Journal described

that we take
a sample, dilute it,

and put it on
a commercial analyzer

is inaccurate,
and that's not what we do.

Carreyrou:
I watched it on
the Journal website,

and I couldn't believe
what she just said.

There was no question
that that was a huge lie

because they were
absolutely doing it.

We don't actually
use the technology

that's being referred
to as Edison for anything,

and haven't for
a few years now.

When we do fingerstick,
every time, we use technology

that is not
commercially available.

We have never used

commercially available
lab equipment

for fingerstick-based tests.

(echoing):
Every fingerstick test...

Carreyrou:
I had underestimated
her willingness

to bald-face lie
in public, on our turf.

I guess what I really want
to know is, do you feel now,

in hindsight, that
maybe you went market
a little too quickly?

Did you feel pressured
to do that in any way?

We're the exact same company.

Nothing has changed.

We're working every single day
to try to get these tests

and systems to meet
the highest quality standards.

(keyboard clacking)

Parloff:
Couple of months after
John Carreyrou's article,

I wrote a new story.

It was both a correction
and a mea culpa.

And I said that Elizabeth
had intentionally misled me.

After I published the piece,

Elizabeth called me,

and there was
a long conversation.

She was not apologetic.
She said,

"I never would intentionally
try to mislead you.

Why would we do that?"

She was trying to persuade
me to take out that sentence.

She said something like,

"If you're not going to take
that language out,

we're going to have to do
something about that language,"

which was a little menacing,

but all that they then did
was they wrote a letter.

Toward the end,
there was a weird paragraph,

something to the effect that
Elizabeth didn't even realize

that Fortune was doing
a feature profile,

let alone a cover.

And it was so, such a...

bizarre thing 'cause...

I was out there four days and...

I had called all these
people at her behest.

You know, seven directors,

the head of UCSF Medical Center,

the head of Blue Cross
Blue Shield.

I spent an hour and a half with
her parents. I met her brother.

I asked her about the letter
she wrote when she was nine.

I asked her about the book
her father gave her

when she went away
to school, which was

Meditations
by Marcus Aurelius.

And then there was
the photo shoot!

It was a big-name photographer,

and his assistants,
and the lighting equipment,

and taking
a couple hundred photos

in different locations
and different poses.

That was a clue, you know?

This was real lunacy.

I realized that there was
something wrong with her mind,

that, um, you know, I don't know
if she's lying or if she's...

uh, there's an unconscious, um,

reconstruct-- self-protective,

reconstruction of reality
that's going on.

But what is coming
out of her mouth

is not mapping onto reality

as you or I know it, you know?

(projector whirring)

Auletta:
I wish I could say to her,

"Elizabeth, I'm going to give
you a truth serum,

"and you're going to tell me

what was going through
your mind at that time."

And the question
becomes, do you--

do we believe
that she would say,

"I knowingly lied?"

I have a hard time

imagining her saying that.

She was a zealot, and a zealot
is such a believer,

a true believer,
in what they're doing

that they're blind
to the reality of
what's happening.

Not for a moment do I believe

that she lies in bed
at night and thinks,

"I was a swindler.
I was a crook. I lied."

Ariely:
So one day, I get an e-mail
from somebody who works
with Elizabeth Holmes.

He asked me if I would
come and meet with
their team and with Elizabeth.

I said sure.

Part of my research is actually
about human motivation,

and she was very concerned about
the demotivation in the company.

Right? Because
the continuous stories

around them were demotivating.

My impression was
that she truly believed in
the mission of the company,

and that she also
believes that they are

on the way to achieve something,

and they just need the runway.

There's a lot of lying
in Silicon Valley.

And I remember when my first
book on dishonesty came out,

and I did a book tour,
and I gave a few talks

in Silicon Valley,
some entrepreneur said,

"Oh, we are in technology.
Technology doesn't lie."

-(Gibney laughs)
-Right? So, and they
basically said,

"We are honest,
there's no opportunities."

And I didn't say anything,
but in two minutes,

all kind of people from
the start-ups around him

started talking about
how they lie to investors.

And they have all these graphs
of growth, right?

I mean, they're predicting
the future,

and they putting
exact numbers on their--

And my thought was
that there is this idea

in Silicon Valley,
where you, um...

in a very brave way,

put a post somewhere really far

that you truly have
no idea if you can get there.

And my sense
from the discussion
with Elizabeth was

that she felt
that she was basically

doing the same thing
that everybody else is doing.

We have lots of people
who are overconfident,

and from time to time,
some of them work out,

and we get penicillin,
or the incandescent light bulb,

-or we get...
-(rocket roars)

And if you are
surrounded by companies

who try very hard
and dedicate their lives

to achieve the impossible,

and then sometimes they
are successful in doing it,

why can't you?

Holmes:
At the highest level,

we didn't have the right
leadership in the laboratory,

and I didn't realize

until the inspection

that these types
of issues were in place.

So, until
the government told you

that you were really
out of compliance,

-you didn't know?
-Yeah.

What was your reaction
when you found out

that you had all
these violations

-in your lab?
-It was devastating.

Don't blame anyone else.

You have controlling shares in
that company, Elizabeth Holmes.

The buck stops there.

People make mistakes,
but you must always admit it.

My husband's favorite phrase:

"Excuses are like assholes.
Everyone has one."

-Sorry. You don't have
to put that in there.
-(Gibney laughs)

Sanjay Gupta:
One of the
headlines was,

"$9 Billion Company
Down to Zero."

And your investors
and your board members

are reading those
same things.

It's probably the most
important question, I think,

anybody who's watching
has about this.

-Does it work?
-Yes.

-You're confident in that?
-I am confident in that.

Announcer:
Without further ado, I'd like
to welcome Elizabeth Holmes,

-founder and CEO of Theranos,
to the stage.
-(applauding)

Narrator:
Elizabeth did not give up.

She fought back
by taking center stage

at a clinical lab conference
in front of all her critics.

She defiantly
unveiled the machine
she'd been hiding for so long.

-The miniLab is designed...
-She called it "miniLab,"

as if it were a new invention.

This is an inflection
point for our company...

Narrator:
But inside Theranos,
it had another name.

Edison 4.0.

By 2017, Theranos had spent

virtually all of
the $900 million it had raised.

Nearly 300 million
went to pay legal fees,

settle lawsuits from investors,

and to refund every patient in
Arizona for their blood tests.

Henry Kissinger, George Shultz,

and even David Boies
resigned from the board.

Elizabeth broke up with Sunny

and fired him from the company.

But she never lost her faith
in the power of invention.

It's finding...
what you love,

and finding what
you're born to do,

and when you find that,
whether it's...

you know, writing, or painting,

or science, or whatever
it is, when you...

when you really

give everything to that, then...

then you can realize
great things and...

we'll fail 10,000 times
if we have to,

but we'll figure it out
on the 10,0001st, you know.

Lawyer:
Ms. Holmes, please
raise your right hand.

Do you swear to tell
the truth, the whole truth,

-and nothing
but the truth?
-I do.

♪ You can't touch this ♪

♪ You can't touch this ♪

♪ You can't
touch this ♪

♪ Oh, oh, oh, oh, oh, oh, oh ♪

♪ You can't
touch this ♪

♪ Oh, oh, oh, oh, oh, oh, oh ♪

♪ My, my, my, my music ♪

♪ Keeps me so hard ♪

♪ Makes me say
Oh my Lord ♪

♪ Thank you
for blessing me ♪

♪ With a mind to rhyme
and two hype feet ♪

♪ It feels good when
you know you're down ♪

♪ A super dope homeboy
from the Oaktown ♪

♪ And I'm known as such ♪

♪ And this is the beat
you can't touch... ♪

♪ I told you,
homeboy ♪

♪ You can't touch this ♪

♪ Yeah, that's how
we living and you know ♪

♪ Can't
touch this ♪

♪ Look in my eyes, man ♪

♪ You can't touch this ♪

♪ Oh, oh, oh, oh, oh, oh, oh ♪

♪ Yo, let me bust the funky
lyrics, can't touch this ♪

♪ Fresh new kicks
and pants ♪

♪ You got it like that now
you know you wanna dance ♪

♪ So move out of your seat ♪

♪ And get a fly girl
and catch this beat ♪

♪ While it's rollin' ♪

♪ Hold on pump a little bit ♪

♪ And let me know
it's going on like that,
like that ♪

♪ Cold on a mission
so fall on back ♪

♪ Let 'em know that
you're too much ♪

♪ And this is a beat
they can't touch ♪