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Book · How it goes wrong

Bad Blood

John Carreyrou · 2018

The definitive account of Theranos, by the journalist whose reporting brought it down — and the best diligence education on this list.

Why it is here

Carreyrou broke the Theranos story and this is the full account: how the technology was misrepresented, how employees who raised concerns were treated, and how an extraordinary roster of investors and board members failed to check claims that were checkable.

For an angel it is a working manual disguised as a thriller. Almost every warning sign it describes is something an investor could have surfaced with an expert call and a refusal to accept trade-secret objections to independent validation. Our Theranos post-mortem lists them.

It is also unusually good on why intelligent people did not act. Social proof, fear of missing out, and the sheer awkwardness of being the person asking sceptical questions in a room full of enthusiasts are all documented, and all of them will apply to you.

Read it if

You invest, or might invest, in anything with a technical claim you cannot personally evaluate.

Skip it if

Nobody. This is the one book on the list we would push hardest.

Pair it withThe Inventor: Out for Blood in Silicon ValleyAlex Gibney (dir.)Gibney's documentary on Theranos, with footage of the company and its founder that no written account can reproduce.

Bad Blood: common questions

Is Bad Blood useful, or just a good story?
Both, and the useful part is unusually actionable. Every failure it documents — no independent validation, no peer review, a board with no relevant expertise — is something an investor could have surfaced before committing.
What does it explain about why sophisticated investors missed it?
The social mechanics. Prestigious backers created proof that made scepticism feel unnecessary, and asking hard questions in a room of enthusiasts is socially costly. Both of those will apply to you at some point.