Episode Transcription

00:00 how far was Elizabeth Holmes willing to carry an idea that could become a reality and she has people investing in it before she's willing to admit to herself and her investors that is just not possible. Allegedly pretty stink and far yeah. This week we learned about Theranos, which is a company that I believe earnestly like wanted to accomplish what they set out to do. They brought at least at one point yeah. They brought a lot of investors, but then they started faking some results. 00:26 and the the fraud spiraled and we learned about the downfall of Elizabeth homes and Theranos is a company. So it's wonderful, great thanksgiving top, so to jump into yeah a good thing for the family table. What do you think for for I'm thankful for the downfall of there? I know this is things are the last night comedy podcast where every week we learn about something new. So we're going to laugh a lot along the way and also give you the information about what you came here to learn about. So you know it's gonna be a good time 00:55 this week is thanks kidding. I don't have any shows. So December's off December's pretty full, but they're all Christmas parties, so don't come to those you're not allowed well for real like they're all there's like two to public shows. One of them is like in Florida and the other ones somewhere else. Speaking of private shows, you can join our Pachy. I hate that segue, but they do get private content that's not publicly accessible. 01:23 you can join our patreon. You can get next week's episode right now, yeah, and then you can also join our discord and you can get a bunch of bonus content and we do a monthly live hang out where we just jump on a video call and get to talk and hang out. It's really good time, so it's fun without further ado. Welcome to the episode. 01:45 Hey man, hey, I love Disney. I would never in my life cross them. Nice card, 02:00 their programming was far and superior to anything the Nickelodeon did. They certainly did not orchestrate Dan Schneider's fall. There are no documentaries about Disney producers now coincidence question mark and they're all dead. Anyway, I just want to make sure they know I like them that you're committed. Yeah, I need them to know that I'm not going to 02:29 you know, I've signed the terms and conditions. Yes, so anyway, I haven't. Have you ever heard of Theranos? Oh yes, thank you. Thank you, Timothy Stone for finally after a year and a half, choosing a topic that I said this might be a great episode. Please take us through the journey. 02:57 so they're in. I do know about Elizabeth Holmes. Yes, yeah, yeah, I'm excited for this. Okay, so Elizabeth Holmes, she here's a picture of a bright young mind. Yeah, here's a revolutionary. Here's Elizabeth Holmes. Yes, she was a well. Let's just take it back to the beginning. Let's take it back to the beginning. She was born in 03:25 I'm not saying she's Taylor Swift, but she's born in eighty four. She's blonde and you're a massage. It's who can't tell the difference between any any woman, any blonde girls. Oh yeah, I've seen you before we've met breeze school. We've are you married to do the number of people? We did a gig at a place that I won't make fun of and the number of people who walked up to so I have an all female team 03:50 yes, which I'm very proud of. I love the people who I work with and they work really hard and they're great now, but the number of people who walked up to my manager and asked if she was married to my manager is infuriating. Yeah Yeah, that's rough like. Are you married to their manager? She's like something like that. Yeah, I am the manager. She she responded. I'm married to the game, which is like why I was like heck yeah dude. That's the energy I like 04:19 I said you that tick tock of the high school football coach, who I school football coach. He was like, he was like, he's like, I one of my players on my team, I noticed that every game he ties a ring into his cleat, like into the shoelaces on his cleat, and he's like, he's like, that's kind of weird. And so one day after a few games, he asked about it and he's like, I just assumed, oh, it's just a ring that he normally wears, and then he ties it on there. So it's not. 04:45 in the way like during the game, but then he noticed he's like he never wears the ring outside of the game. He was like I'm married to the yeah. So he asked him one day he's like he's like he's like hey, why do you have that ring in your shoes? Like because I'm married to the game coach and he was like he's like I couldn't decide if I thought that was really cooler. If I wanted him to run gassers after that, you were sat through someone describing a video to you 05:10 fine. I'll stop doing that. Okay, maybe you watch the video because he's like singing in it's it's they've had to fill us on a Sunday. He's in a chick fil a rap and there's the cow is doing the flosser right and then there's a car that's on fire and it's pretty it's. I mean honestly, it's a really great video. You should check it out. It's a really cool video because they're like college students and they're like in their dorm room and they're like drinking orange juice. That's what they tell their parents. 05:36 and then first of all it's apple juice and second of all it's what's worse is whenever someone describes a full video to you and then they make you watch the video. They just described all video and you're like. I literally have a shot. I know this video you described the whole thing to me anyway. 06:07 Can we leave it? I didn't say anything Alex. Do you know the video he's referencing yeah? 06:23 it took me so long. Oh my god, so Elizabeth Lom's born 1984. Oh, I was gonna say so is doing a yeah theme for Halloween this year and it was eras. Oh sure and my brain was just like oh like Taylor Swift. I was going to dress like Taylor Swift and that she's they're dressing disco her team and I was like what era is that and she's like the seventy's and I was like she was born in eighty four. You guys are you guys are doing a different 06:53 yeah they're doing actual eras, not eras tour yeah threw me off anyways. So Elizabeth Holmes born at my wife school. This is real. This isn't a bit stop. My wife school had pajama day yeah and so my wife and I had a disagreement yeah one night and then you know when you wake up the next morning after you've gone to you had an disagreement. You said you're sorry, whatever you talk you go to bed the next morning you're like you're not talking 07:20 you're like you're still you're still not you're like all right, whatever. I'm making my breakfast, whatever my wife is getting ready for work and then she grabs her car keys in her backpack and starts to walk out the door and she's fully in her pajamas and I don't know that there's a day at school for and so I'm sitting there and in my head. I'm like letter I'm like I'm like arguing myself in my head. I'm like she doesn't know she doesn't realize that she's in her pajamas. She's going to go to work. Yeah, it's going to be embarrassing letter 07:48 just let her go and I know you have to tell her you have to you have to say something, but like what if you didn't just I'm like going back and forth and so finally before she left, I said hey, are you aware that you're in your pajamas right now and she went yeah yeah of course I she didn't say anything. She just went yeah and then left and I was like I never say it again 08:14 it was that and then when I got home, I was like what was that about and she's like it was pajama, the jam a day dumb, dumb, yeah like like I was stupid for asking like she was like she said it like she was like leave like she's still mad. Obviously yeah and she's like the whole time she's like. I hope he doesn't say anything to me this morning. You know yeah, we have a really healthy relationship yeah, so Elizabeth was born in 1984. Alex, do you have fights like that with your wife? No, not really 08:44 it's because he does the show, so he gets home too late, so they never have the like you know they fight in it. They're going to have one really big fight in twenty years and that'll just be like a huge fight and they'll be like all right, got it over with you know they got a that's one fight. Some couples are like that okay, so she was born in eighty four to the homes family obviously 09:12 but they have a lineage and I'm confused. I mean, I guess I'm not really confused about it. She related to priest homes pretty sold. Is that what you're saying? No, no no, it's not at all. 09:34 a all of a running back. So she comes for the homes was our one asset in the two thousands like he was all we had. We had train green yeah yeah. 09:54 we had some good. We did. We never synced up the way that we're synced up right now. Yeah, you didn't have. We've got overlap. Yeah, there was got phenomenal defensive coordinator. Finally, we've got eighty read who's insane. Yeah, and then we've got, you know, and right now it's insane that as of recording, I know that we're like we're releasing this right Thanksgiving. This may not be true. I hope it is, but it may not be true by them that right now we're undefeated. Yeah and you see the video of half the team at that high school football game. 10:24 supporting Nagy's son, Oh Agi, son. No, I saw the video where they got to where half the football team got to play a full high school team and they weren't taking it easy either dude like it was like dude, you wash up Chris Jones legs, break a sophomore's collarbone. I didn't know I need is a great video. I watched it and I was so here's so so the ball is high right Chris Jones, just straight out of tackles and you hear this kid go 10:53 right. It was like a like one of those things you give turn it to yeah and then and you know and his rain goes flying yeah, yeah, because he's married to the game. You want to watch it Chris Chris Chris attacks him and go and and then put him on the ground and he goes you've been served divorce papers. You should watch the video. Let's watch the video. So no, I what the story was was it was my homes, Chris Jones, 11:21 I think Kelsey, Andy Reed showed up to spag Harrison Bucker. Yeah, there's so much of the team just showed up to the game and they were just sitting in the stands. Kid was it was Matt Nagy's not nag kid yeah was playing and they just showed at the game. They were just sitting in the stands and it was crazy. One of the craziest things I've ever seen because they were just in the stands. I was like those people or anything. Yeah, those people aren't allowed to just go be in the stands like you when you're at that level like you've not. That is great. We've talked about that on the podcast before like how my homes and Kelsey can't go in public. Yeah, 11:51 but like any lineman came yeah yeah a bunch of them. You know yeah I would recognize Chris Jones. I would recognize I would recognize most of the players. I would. I think I yeah like you know anyway yeah because right now they're really good, but also you recognize have we talked about this before about how you recognize NFL players in real life just based on their sheer mass. 12:15 Yeah, you would see them and you'd be like. I think you might be a professional. I was showing Reagan that me and my homes are the same height and I was like. Look how tiny he looks on the field like when you look at him in the huddle yeah. I was like he's a small one. He's this yeah yeah he's a so when you see a professional athlete in person, it's jar. Remember we were at the we were the Ritz Carlton just a weekend get away and remember when the Cleveland Cavs walked in yeah yeah yeah and it's it is tiring. It's straight up where you're like 12:45 Yeah, yeah, yeah, they really are. Yeah, otherworldly. Yeah, so anyway, so she came from a family line. Her great, great, great grandfather is doing fine. It was Charles Lewis Fleishman. Sorry, I couldn't help it. Charles Lewis Fleishman. He is very wealthy. He was a Hungarian immigrant who came to the states to found a yeast company. And so he was a yeast baron. 13:14 one of the first people who made yeast commercially viable. If it weren't for him, this is what historians say. If it weren't for him, we would not have bread like we do today. We went at least not as much bread as we have to her, which we were talking about bread yesterday. Yeah, which are my mother dough. We're talking about money. No, we were talking about bread and we're talking about mother dough. No, we're talking about bread and how 13:43 Subway's bread is fake. Oh, hey. Hey. 13:50 hey, I accept the terms and conditions. I have nothing bad to say about subways fine restaurants, yeah or Disney, yeah, Disney and subway have real bread dude, the amount of people I'm really finding out a lot about my friends because the people who are worried about McDonald's e coli break yeah. I go really 14:20 Your wor- 14:22 Huh. 14:25 it is pretty. It's a role and be able to judge the past versions of yourself. You know yeah yeah, because I love to judge now you like the things I always did. I have nothing to fear. Yeah, I've literally I've not been any like not even air particles. Yeah, I haven't sniffed a McDonald's and and that was when I knew I needed to lose weight as I used to. Yeah, you drive by head out the window and just 14:53 and that was with Burger King in the car. You had a bag of Burger King. You job. I know you don't. I did when I was fat fat person thing. I did what was Fasoli's breadsticks were a dozen for your money nine and man. I would crush all twelve yeah, which to be fair, great meal, valid great meal. Those are so and without Elizabeth Holmes, great great great grandfather, Fasoli's breadsticks wouldn't exist. It would not exist. They do yeah, so he got very, very rich. 15:20 off this he was a yeast bearer. What do you think, the breadsticks fell out of a coconut tree? They exist in the context of all that we are. They exist in the context of Charles Louis Fleishman. Fleishman? Fleishman. Great. So somewhere along the line they changed their last name to Holmes. That or her father is a daughter in the line or her father is the son of a daughter in the line. Her father is the son of her grandmother in the line. Sure. You know, I don't know. You know how. 15:49 Family lines work. Yeah. So. I do. 15:54 I am one of them. I have family to I do know how you're not robot. What is this? What better you try to do right now? I'm just making sure that my kids and their kids and their kids know that I'm watching so I always remember. We just realized how this stuff lives forever on the internet. You know, like my 16:17 my great is going to see this video yeah yeah yeah and I want them to know that I still expect them to what in the words of my grandmother. Remember whose last name you have. That's what she would say when I wasn't behaving correctly. I would go. Remember we share last name yeah yeah and be like well we don't share first name, so no one's going to think I'm you okay. We did for a while 16:45 that I asked if I could change it. Can I please? I'd like to give up the name Della. I don't want to be Della anymore anymore. It was a really hard conversation when I had my family. Yeah, we just got a new first grader. His name is Joan Judy. All right, so so Fleishman spins a lot of money. 17:07 but does pass on a lot of it to his son. His son says I bet I could spend more, and so he does just that by becoming the youngest ever mayor of Cincinnati. Oh and the early nineteen hundreds passes on a little bit of money to his son and his son, who is Elizabeth Holmes grandfather is like. I bet I could spend the rest of this and he does he does it by opening up like an art institute thing and does philanthropy wonders it yeah, and so she 17:37 doesn't inherit a lot of wealth, but but this is very important. She does inherit a family that's well connected and so even though they're not very wealthy, they swim in the wealthy ponds and so her which does create a dynamic for her, which is like we're not wealthy, but I want to be yes and her. Their family was very, very proud of their history that the direct quote is the family is very proud of their yeast empire. 18:07 and they very much like it's like they they they longed for the days when they were you had those hobby lobby paintings on their wall like those little frames that just said from the west to the east from the east to the west. As for me and my family, we will praise the 18:31 sure praise the mother all the yeast. They they shatter act me shack and a bend to go. They bow a knee to the yeast, so they got thrown in the yeast furnace. I come from mother dough, but they really were like Fleishman was one of the richest people in America when he was a yeast baron. I can't stop saying he's and Elizabeth because 18:59 she was just kind of steeped in this as a child. Like they were, they're like our family was former yeast parents. We are important and special like she kind of grew up in this world where it's like I want to bring back our families yeast glory okay, and so she every year they had a yeast feast try to start a YouTube channel called Mr Yeast. 19:28 didn't go well. She made a snack company called Yeastables. It was just a bunch of stacks without the like. Oh, it seems pretty important to have it doesn't see you want yeast. Don't that is able to be yeasted she became a rapper for a little bit. Her name was yeast, yeast, Kanye, Yeast. This sucks 19:57 this is actually really interesting topic. I'm really excited. I'm really excited for the story. Please get to it, so I know this one, so she she's a vampire. She's in this in this culture with her family. Another important thing about her background before we get into the rest of story was her dad. Her dad was a guy by the name of Christian are homes. The second okay or wait now Christian are homes. The fourth 20:25 That was her grandf great grandfather was the second okay. He's the one who spent the rest of the money her. Her father, Christian Holmes, the fourth was a V P at Enron, which makes a lot of sense. She learned a lot of probably fraud from her dad. He though you gave away the ending. We don't know that yeah. Oh yes, she learned a lot about good moral business practice from in run from her dad and in Ron, which is a company that 20:55 we all know is a good moral business with very sound business practices. Yeah, and I don't know actually if her dad got any fallout from the Enron scandal and she he was a VP, but I don't know if like he he lost his job for well yeah he definitely lost his job and we do know that after the Enron scandal that he did bounce around from job to job and so she started she her like later youth was moving schools often because they were moving for his work. Yeah, because he couldn't 21:23 get a good job, so he must not have gotten like a prison sentence or anything. If he was able to move and find new jobs, he was just a VP. Vice Presidents do nothing. That's true, that's true. Yeah. At what level do you have to be to like and then in a scandal like that to have like probably someone in the C suite, you know yeah. What do you have like an ownership stake? You probably have to have a majority stake yeah. 21:48 interesting. Well, also it depends on how involved you were in the scheme because there's sometimes that is that scheme happened, but the CEO was our paper trail works wasn't involved. Yeah, that's true. Yeah. If you're going to fraud, you got to make sure you're not part of it. Yeah, but also what happens sometimes is that the people at top of the frauds get away with it because they've created a paper trail that that paints the target on someone, some else. Yeah, that's when you know you're really good at it. Yeah, so that's how I've gotten away with it. 22:17 So in high school she her parents like she went to private high schools. She got into computer programming and she actually started her first business in high school selling and I don't know how she pulls this off. She is something we're going to find out is she's really, really good at selling herself yeah and like talking the talk. Oh for sure, and so in high school she manages gift of gab, some my gift of gab yeah. She manages to sell c plus plus compilers, which 22:47 C plus plus is a computer programming language. A compiler Dums down computer programming languages into like dumber versions of languages. That's not the technical term, but essentially like more primitive languages and then allows other devices to be able to read it. So she was selling compliers to Chinese universities in high school. I don't know how she managed to pull that off, but she was selling these compilers because her parents had early in high school. 23:17 arranged for her to learn Mandarin. That was like a extra curricular activity that she had and so she then went to Stanford. Are you trying to learn Mandarin on Duolingo? Technically, I'm not learning Mandarin. I don't think. What are you learning actually just Chinese? Yeah, actually I'm learning that's actually a good question. I don't know what 23:42 I'm obviously not learning a lot. We learn in I was not learning a lot. Yeah, I just called it Chinese. I don't know if I'm actually learning Mandarin or just Chinese. I don't know what the difference is okay. Yeah anyways, so she goes to Stanford. I've got to do a lingo streak. I set mine to learn English, UK and doing really great so far. It's 24:15 I hate you so much. Everyone's like really are and I'm like I've been number one in English UK for months. My street my points yeah yeah yeah my comprehension. There's a couple words that I can't get though pretty difficult, but it's no pronunciation though yeah there's this one word. It's like C O L O U R and I just can't figure out what that is. I don't know what it means. I haven't asked 24:46 so they go to stay. If she goes to Stanford and while at Stanford she's studying chemical engineering and she what is she hoping to do at this point? You know, be rich. I don't know if there's like I don't know if there's a career goal, but she so your goals yeah sure and she's fine. She joined a sorority and she's just doing like the college thing right yeah. While she's there, she develops this theory or this 25:14 plan for business yeah and the plan is she wants to do blood tests with a lot less blood because she doesn't like blood and she doesn't like needles true and so she's like it'd be sweet. If you could do it, we have a lot in common. Her and I yeah you do yeah. You both come from yeast empires different, he's in fire to competing east empires. 25:41 In the early days of this show, we did like affiliate ads where we were like a sign up for grammarly and use code till and and we got like fifteen cents and now we just do patreon. It's a much better way. It's better for us as creators. It's better for you as listeners and it's a much more fun way for us to interact. We do monthly hangouts like on zoom. We just hang out and play games online and and get to know each other. It's a really fun time. So 26:08 but still use our code till in at grammerly dot com because I think it's still I might get like a couple cents from that, but join us on patreon because we're having a great time. If you don't, we're going to have to start doing mobile game ads. 26:25 Yeah, you were the best in the west. She was the best in the east. I hated her growing up. I have the best yeast in the west. She has the best yeast in the east. This is the best east on this side of the Mississippi 26:41 I keep bumping into the book shop. I know every time that you do a topic. I actually want to talk about. You just also do this. This is what I do in every episode. Okay, so she tells one of our professors about it right and she's like okay. So I got this idea and I do this yeah. She's like she's like what if with because I don't like needles and so she tells her professional her professor and her professor is like it's never going to work. She's like that's not enough blood. You need way more blood to be able to do those tests. 27:11 and she's like, well, what if we did less blood and she's like, no, it's not going to work. So then she walked out of that professor's office and walked into another professor's office and said, hey, I have this idea for a business, told him and he was like, that's a cool idea. I like it. The thing is he was he, he wasn't in a subject matter expert and that right. He was a subject matter expert in like engineering while the other one was in like bio engineering. Yes. So this guy didn't know that the idea when it worked was impossible. Yeah 27:36 And so she found someone who was like, that's a good idea. And so she starts pursuing this. Goes to Palo Alto, so she's in Stanford, And I think that this is, So right now... 28:05 Everything is AI. AI is the buzzword. If you can power your technology with AI, you win. In the 2010s, it was data. Everything's data-driven. Data-driven was the word. Democratize X was the early 2000s. We're bringing everybody's power, everybody's hands, and you all have control over your own thing. And so her idea was just that. You could use a take-home finger prick, finger prick your finger, and then you'd have a small little vial of blood. 28:33 which she's actually holding in this picture, small, tiny, tiny little viral, but it looks like maybe a big Tylenol capsule. Is she cross side in that picture? I feel like they probably should have said hey, let's take this again. You look cross side in this picture. She's just looking at the thing, but it is interesting knowing how the story ends like what do you think's going on in her head when she's taking this picture like you, you know? Oh, I have very strong thoughts. All right, let's get to it so 28:58 And then so you finger prick and then you send it off. what I think they were saying was 60 different blood tests. much quicker. make this possible and she's going out and she's getting funding. 29:28 Later in 2010, they raised more than 92 million in venture capital. And she puts together this group, this board of very influential, like big name people. And I think it really does. It just comes down to what I said earlier, where she was just a really good salesperson and selling. So obviously she's in the board. And so she pulled in Riley Bechtel, which was former 29:56 Bechtel Group CEO, major US company, David Boyes, another founder of a major company. And then now is where we start to get to some interesting people. William Foege, which was a former director of the CDC. Richard Kovach, which was the former CEO and chairman of Wells Fargo. And then Jim Mattis, who you might know as General Jim Mattis, who was the US Secretary of Defense. 30:25 and then another former executive of Amgen and then investors included like Larry Fink, members of the PayPal Mafia, yeah and then even George Schultz, which is former Secretary of State, yeah and so she was put together this group of like high ranking government, a snow ball effect things where if you get because you know she went to the professor that you know 30:55 she's got the backing of a professor there. You know one professor told her this isn't going to work yeah and then you get a couple other influential people and once you've got like this is and this is kind of why I'm like hesitant to let people open on my shows and stuff. Yeah is that like it's not not that I'm kind of any kind of big name, but then once you've done that you can say oh I know and I've worked with yes. 31:25 jaren and you can use my credibility with someone else yes and leverage that in your conversation, yes and so you can say well, you know I had this conversation with them. They seem pretty excited about it. Oh well, if they seem excited about it, yes, you know and so it's a snowball. It's not like you know all the sudden she's got this entire list. It's like she gets one at a time, but then it snowballs to where it's like once you've got four of those people, yeah, you can get the rest of them. 31:52 yeah, because they yeah, because they start to see all you've got that person signing off. Yes, this must be legit if they did and what do we just talk about the almost like a confirmation bias type thing of the circular report, circular report, yeah, where it's just like oh they're in. I don't even need to dig any further. Yes, they've probably done their own due diligence, so now I can trust them a hundred percent, you know, and I think this is also a symptom of silicon valley even to this day, but for sure, especially then is just gambling. 32:22 Yeah, because so many of these investors are just like if I invest in six of these companies and two of them pay off, it covers my entire investment. Yes, exactly. And at the at this stage, investing in any business in this stage, like there's not fundamentals you can look at. There's not a you're just looking at a business plan. There's not a product. Yeah, yeah. It's like so many of the ideas in Silicon Valley are just ideas of like this is this is a crazy idea. Now the idea pitched here 32:51 being able to do blood tests on a smaller amount of blood is a crazy idea. Yes, like where it's like if that pays off, if this works, it's huge. If you like even and even of like your, let's say that she starts this and I think she does. I think she's genuinely like. I think I can figure this out. Yeah, you know we know where it leads, but I don't think it. I don't think the whole time was like I'm going to do this like it was like she can figure this out is what she thinks yeah and so 33:20 the amount of upside that could happen if you do crack it huge yeah is insane yeah, because if you were to put a million in in two thousand three, you're a billionaire and the company goes to ten billion like yeah, you've got a major stake in this case, and I think that's what most silicon valley investors and venture capital, especially in that era we're doing, where they said like exactly like you said, I'm going to invest in seven, eight companies. I've got 33:49 ten million to spend my thrum at all. One of them is going to pop and it's going to be worth it for all of that spend all the loss on everyone else, and so it doesn't matter if if it's sound. It doesn't matter if I think you can actually do it. It just matters a number scheme and only in yeah. I mean here we are twenty years later. That's still happening yeah, but it's definitely like after the we work and uber there and there, and I was like 34:17 after a couple big unicorns yeah, you know, turn out or the ogres, stab you in the butt or whatever there's there's a little more. It's harder to get funding than he is yeah yeah. People are a little bit more cautious and I think yeah anyway, so she gets a lot of funding. 34:35 and they start building this company and it's very much like you were saying. I all I was countering was was like it's not just her gift of it's not like she's just a smooth talker one. I think she genuinely believes this is possible yeah and two. She has an idea of how to make it happen. She is talking with reputable scientists and people who are actively working on a way to make this happen yeah and then she's leaning on the credibility of the people she's already got on board. 34:58 Yeah, so it's it's not just like she's smooth talking her way through and getting money is what I was trying to say. Yeah, and she does have like a she does have a good background like she built a business in high school that was very fairly successful. She went to stanford even though she didn't finish stanford, but she went to stanford and she's very well connected as it's like if you're an investor, you see this person and she's good at communicating like you can't really fault an investor for investing at this stage because of all those things like it makes sense that an investor, especially a silicon valley investor would invest in right. 35:28 a business like this. they're building the plane while it's flying. is they're building this business while it's flying Because they don't go public, What I mean is like they are, no one knows about them 35:58 So they're building this whole thing in the dark, seemingly trying to get it right and years for ten years. Yeah, but in this company, they originally launched as real time cures. They changed the name later the same year as they launched to Theranos, which was a combination of the word therapy and diagnosis because they thought that the word cures like people have a bad association with that and so they don't want to keep or also an expectation of like this is going to cure you 36:25 Also true yeah, because it was just supposed to diagnose you. It wasn't supposed to yeah, you don't do that fingerprint and then all of a sudden be healthy and so they in twenty thirteen for the first time ever launch a website and kind of go public with what they're working on and at that time they had already signed a deal with Walgreens and so the deal was they were going to put their device in in Walgreens and so here's here's kind of a quick look at what they're doing so in historically 36:54 if you need to get blood work done, they had to draw, they have to draw like a decent amount of blood and then they put it through this massive device, which is like a full kitchen in most houses and their big, big, huge cabinets, big, huge machines. They're like the size of commercial printers and the blood goes through the centrifuge and gets shaken up and then they run all these tests and diagnostics through this whole process and it's huge. It takes hours upon hours. Your blood that has to get sent off to these third party labs. 37:23 and it and you don't get your results back for weeks to find out what's going on. What Theranos built was this device, which looks like an counter top ice maker, yeah, ice maker or like an early PC, a little bit. Yes, but yeah, early PC is very small fits on a counter and and we saw that picture of her holding the vial. All you need is this tiny finger prick of blood. You shove it in there and it can give you 37:50 I think they said yeah up to sixty different test results with that in minutes, which originally the plan wasn't for it to be sixty right. The plan was for it to be just a certain number of. I don't know when they launched honestly how much they wanted to. She always talked about the story. She would tell the story about her uncle who got sick and died yes and a lot has been said about that story since, but so that was the example she always told. So maybe when 38:18 she started. It was specific to that case and over time it grew. I don't I don't know. Actually, I think if I remember correctly, there was like it started as a smaller panel and then it just eventually out grew, you know, where it's just like listen. If the smaller panel is not possible to do, let's just say that we can do it all. You know yeah, I was like what's the point about lying about four things? If we can lie about six about a bunch of you know interesting so 38:46 and then what Walgreens is good doing is Walgreens was retrofitting their stores and putting in these little Theranos places like they're not like what it was the word I'm looking for like Theranos centers and you were going to have these machines. Yeah, they were going to have those machines on site. You could walk in, they'd finger prick you, they'd plug it in and then they'd be like all right. Here's what your blood says about you and it would say like doesn't look good. It was like it. It's like a magic eight ball. Those kind of responses. Please try again. 39:16 looks bad, that diagnosis is unclear. So yeah, you go in, you get your finger prick and then they give you the results. Walgreens invested $350 million into adding this into all their stores. And it was pretty phenomenal because no one had really heard of it yet. Like she, the company didn't exist, I mean it existed, but as far as the public eye was concerned. 39:41 there was no public trust bill. There was no anything we was walk, but again it's one of those things where Walgreens puts its name behind them. Yes, and now you're now you're both, you know, lean on me. We're both lean together in this. Yes, yes, and so then later that year safeway is like we want it to and so safe way jumps on to and they invest. I think a hundred fifty million into it and they're retrofitting their stores, yeah, putting this in all their stores and so by this. This was twenty thirteen they go public. 40:11 by mid twenty fourteen homes is now like a figure in Wall Street, yes, business world. She's on the cover of Fortune, Fours, New York Times, how many machines are they promising to roll out? Oh, I mean I don't know what the number is, but at this point it's got to be thousands because they're putting in an every Walgreens store, every Safeway store, those machines are going into Walgreens. Yeah, they're going in there yeah okay and so 40:35 she makes on the Forbes four hundred list at number one. Now every Walgreens has one of these machines and every safe ways got wall most yeah. What I should say is every Walgreens every safe ways getting these machines. I was saying I was saying I don't think I don't think everyone has them yet. Everyone's getting them and so she lands on the Forbes four hundred list at position one ten because now the company is catapulted in the matter of a few months to a well yeah. Everyone wants to be early yeah 41:03 Yeah. And so now they're now they're a public company, they're public on the stock market. They hit a nine billion dollar evaluation. And so she becomes the youngest female billionaire in history. And obviously, given her background, what we know about her, this is like a huge thing for her. She's pumped. And she also one thing I don't know if you could guess by 41:24 this picture who her idol is love Steve job. Yeah, she only wears the Steve jobs turtleneck. That's the only outfit she wears okay, and she's a huge Steve jobs fan. She does Steve job in things all the time. So she do so she like builds her life around the things that Steve jobs does yeah, and so she sets up her office and like her company culture in the same way that I see listic very yeah, very simple 41:52 She does the same thing every day. She does the same kind of like cut throat stuff where so Steve Jobs was famous for on I think was the Mac two or three. He put two engineering teams. He pitted them against each other to build it and it was like whoever builds a better product. We launch. She does the same thing but 42:12 on them. She says whoever builds a better product doesn't get fired, keeps her job yeah, and so she does she she takes a lot of the ideas that stop jobs had that were like. Oh, that was kind of a fun good idea to like have this competitive thing in your company and she makes like she goes. Let's raise the stakes. Let's raise the stakes. Whoever does this better. I'm out for blood. Yeah. If you guys don't do this better than we're putting you in the yeast oven. Oh, I'm out for blood. I didn't catch that. That's pretty stuff in. I went. I'm out for blood and you were like I make my another yeast joke. 42:43 I like the he's I'm going to do the use bits of a big fan of the yeast. What else does she do? What other jobs things? No, she does a weird thing. I don't know. I feel like you're looking for something specific. You don't know about oh she has a yeah. She talks with a very she talks with a deep voice and she never acknowledges it. She's like this is just my voice, but there's a lot of analysis that's been done about this. Have you looked in her? Have you looked into the voice at all? 43:12 No, I just assumed her voice was deep. You didn't know this now yeah, so she's taking that and the you can watch the progression of that happening where she starts to talk slower and deeper because she thought that that's how that commanding the room was. Oh, was that she's just you know there's a lot of analysis of early videos of her versus later videos and how you can see it slowly progress to where she talks like she talks like this and 43:40 doesn't open her mouth all the way and does this you know very low voice and this is just how she talks now. Oh no, I did not didn't know she was faking the voice, just faking the voice. That's one of the main things about her. I was going to bring it up because it felt like I was making fun of her for having a really deep voice. She's like faking the voice. It's bad. It's it sounds really weird now that I know that it's fake. It's really it makes way more sense that it's fake. Yeah, that makes way more sense because it sounds labored like it sounds like like 44:08 Obviously I'm a dude, so my voice is naturally deeper, but it sounds like she does. I don't know about that. I don't know about that. I mean, obviously, obviously I'm a dude, so my voice is naturally deeper. 44:23 You know. 44:27 but this is what this is what it sounds like. If you ever heard her voice, this is what it sounds like. It sounds like she's doing. She sounds like she's like down low like yes, like like yeah, like so here's what we do with the blood and we're going talking from the back of her throat. Yeah, doing it's very very weird. Yeah, there's a whole there's a whole like video essays on this interesting. I just thought she just had a weirdly deep voice. Yeah, wow, like internal. If you watch the documentary, the team talks about how her voice change over the years. 44:56 interest and all of them make fun of it. They're like yeah the voice that's pretty funny. Yeah, I just read about this. I thought that be a really you've never. Oh, I just read the stories like I didn't watch anything. There's an there's a before we get too much further into it. There's a really good. Was it on Netflix? Look up the the drama pick of this. What do they call that when someone does a bio pic? Is that what it is? Yeah, a bio pic is like when you dramatize the story or whatever drop out 45:25 the drop out is on Netflix yeah. Okay, well, no, it's on who now okay. It's on who it was on who to begin with. Was it yes, it's on who's called the drop out a very, very good telling of this story and the actress was phenomenal in that, but they nailed it. It really did. Hold on. I just need it. This is crazy. How accurate this is. Oh, how accurate they got the picture. Yeah. Oh yeah, they really did a really good job with the series. Yeah, look at so we're not sponsor anything yeah. 45:55 that's that crazy wild. How much that looks like her yeah they really they really did a great job and like and they and they do the voice change in that as well. That's pretty funny. I did not know that it's like the whole series. She talks she talks like this yeah yeah interesting wow wild okay, so so yeah she got a weird voice. Well she thought that was like you know the cutthroat business leading charge thing yeah yeah which 46:20 to be fair. If we're talking from a psychologically doing a topic where I know it, we're kind of like co teaching it. That's kind of fun. You know, I think from like a psychological sand standpoint, yeah being a woman in business in the early twenty ten for sure like that does make a little bit of sense. Yeah, especially yeah interesting interesting, which is what makes the end of this story that much worse. I think yeah yeah like you know yeah, and so she was running this business like a lot of Silicon Valley 46:49 tech startups. The problem was this wasn't just any tech startup. This was a medical tech, biotech. Yeah, that's the word I'm looking for, a biotech startup. So the standards are a little different and the way you need to confirm some things is a little different because like, you probably heard this, the kind of mantra of Silicon Valley is go fast and break things. And so the idea is you're, 47:18 move as quickly as you can. You want to beat everybody else to market. It's not going to be great, but you're going to figure it out once you're out there and with something like this, that doesn't work great because it's the same thing that uber did though. If we're talking about uber lately, who's that talking about? I was talking about uber with chama and how uber went full circle just straight back to taxis where like uber did all this stuff like we're going to bring. We're going to revolutionize this. We're going to make it so you can put it on your phone and you're going to see that you have all the stuff and then they went back and they were like shoot. 47:48 actually the taxis had this system figured out already. They did better than this royally messed it up. Yeah, yeah and so now they're just re they're trying to slowly walk us back to now. It's just uber. I mean that's what Netflix is doing. Yeah, that's like is like on TV was Netflix like shoot like we love live TV. They were able to make it so cheap because they had ads. Yeah, you know I saw an ad make sense. I saw an ad for Hulu the other day that 48:16 made me so mad because the ad in the ad they said, what did they say? They said for, I think they said for seventy nine ninety nine a month, you get access to ninety nine channels and I was like shut up ninety nine channels. I had ten thousand, I had ten thousand yeah, albeit nine thousand nine hundred and fifty of those were trash, but I 48:43 had ten thousand yeah, and I saw commercial channels. I saw a commercial that royally messed up my day. What the Zillow commercial? Have you seen this now Zillow commercial over? We're back to explaining videos shot by shot. I mean I know I don't know. You tell me the Zillow commercial where it opens on the girl. She's breaking something in the living room, something falls and she's like oh shoot and then up pops her her yearly salary hundred and fourteen thousand right and a voice in the other room goes. What was that 49:12 she was nothing. I broke the thing right and then it cuts to that girl. It shows her salary hundred and ten thousand right and then it's another girl in the other room. They're all roommates obviously yeah, then it pops up with her yearly salary and it's like a hundred and twenty thousand and it pops up and says where she's talking and she's like. I knew I couldn't buy a home of my own, but like going in together with my friends made home ownership possible and it's showing three people with six figure salaries not able to purchase a home. 49:40 buying a home together and Zillow help them do that and that made it through so many levels of marketing admins. No, I don't think that made through. I think they were like we need to get people to buy more homes. Somebody wrote that somebody film that those actors accepted that role 50:01 read those lines, they edited those videos and then they put some ad dollars behind it for it to pop up in my social media feed and they were like oh, you can't afford a home by one with your friends. Yeah, what's crazy is like that's a thing that we're actually hearing about happening now like people like people are actually buying homes with their friends, yeah, which is in insane thing to do 50:29 that stresses me out. I hate that and it's crazy because it's like the salaries they were showing our salaries are great should be able to live. That's the stuff that's made me radicalize and made me really hate the system that we live in. Those are the things that have changed my algorithm and now I'm a coral barks. I'm not I'm not chill. I love ducks. Should I just love ducks? 51:00 Later tonight, when you're sleeping in your bunk, I'm gonna sneak into the... What did you say? 51:10 let me finish. Let me finish or go ahead. I want to sneak into this apartment because I have the key and I'm going to change your algorithm. I really your browsing history. I'm going to delete all your subscriptions. I want to be sus. Is you saying when you're sleeping in your bunk? 51:24 I didn't like that. That's what it is. It's a bunk. My bet here is that we talking about yeah bad bunk. It's the same things not sleeping in your bunk. That's not it. You're all inside your bow, how eventually twelve people are going to buy a three bedroom house. I just called beds bunks. All right, that's one bunky bed, so anyway, we had a story. So we're talking yes, 51:53 So she's got this crazy evaluation from the stock market and she's growing and the thing about the medical industry is that there are more checks and balances than in other industries. So move fast and break stuff is the is the phrase that's in so valley. They're trying to do this company but they have to do what so what's interesting is there are more checks and balances but she's getting around all these checks and balances by 52:24 being a 52:54 take the prim pricks, ship the blood to us, yes, take the samples, they're email you the results yes, and so they start doing that. We're doing off site blood tests for our machines for our machines until when we're doing it on our machines, but we're doing our machines. We're doing it on our machines. Don't worry machines can do the blood test. She's are doing the blood tests and so off site. So what they do while they're still building it, they are having this blood ship to them and they hired a third party that uses these traditional machines to run the blood tests. 53:22 and then said running the blood tests on normal, regular, boring old blood machines, but they're telling everyone about their saying our machine gave these results. Yes, yes, which I mean there's a word for that. I think it's for all. 53:42 Hey, thanks for checking out this episode. In that mailing list, we give updates on past episodes. and every week things are changing. in the happenings of Tillon topics. Also, we give updates on things that's happening 54:08 I like that. I've never said till inverse before, but I'm sticking with it. If you want to know what's happening in the till inverse, that's the best place to do it. You can go to till and dot com. There's a link in the description or you can text till into six, six, eight, six, six. There's a lot of ways to sign up for the mailing list to make sure you keep up to date with everything that we've talked about and everything that's going on in the till inverse. But anyways, now back to this episode. 54:33 So they're they're setting off them the stuff that right right. Meanwhile, everyone believes they're actually getting there in us test sure, and this is like actually real people greens believes they're getting there. Those tests, the patients believe they're real patients are getting tests that are not authentic tests and then Theranos takes it a step further because they say okay. I think we can actually start to use our machines. They haven't shipped them yet, but they're like. I think we can start to use our machines, but they only are about sixty percent accurate at this point, right, and so they start shipping off tests. 55:03 to real patients with 60% accuracy ratings. And blood tests are important. That tells doctors what kind of treatment you should have. And so there are people who are getting false positive for real diseases, and there are people who are not getting positive for diseases that they actually have. And it's actually genuinely affecting people's health. And so this is all happening behind the scenes. And the culture within Theranos as a company, 55:31 has always been pretty toxic. There's always been this this secrecy at all costs sort of things. The way it was taught was we can't let our trade secrets get out right, and so everyone's like you. You can't talk about it. You can't say what's going on. You can't ask questions about the top brass. They were very like if you're questioning us, you you're against us. Basically was the culture and so people who ask questions got fired. You're going to bring up her number two yeah, and so 56:00 If you brought up questions, you got fired. And at this event, they were running this test on the machine the night before, and they realized it's not working. We're going to do the test, we're going to put it in. 56:29 it was no test ran, nothing happened. It just displayed results after they put something in. And so they did it. They ran the test, display the results. She sends out this company wide email. She's like, great job, everyone. You guys did such a good job on your feet, responding to adversity. And she's like, we're really changing the world here. We're doing something great here. Her CFO comes to her after that. And her CFO is like, hey, we can't be doing that. You're deceiving your investors. 56:58 like we can't be lying to people. She fires him on the spot right and when that happens, there becomes this. I should say like larger fear culture looming shadow of I can't speak out against what's happening, even if I know like because there was a suspicion among some people who were 57:21 building the machines, doing the lab, or obviously there are people who are running the actual tests on different machines yeah and they're sitting here going like, but there's also that like there's so many people who are bought into the we're figuring it out. We're doing this and if we stop doing this, the money stops and then obviously we can't figure it at all yeah we're making the address. The ends justify the means in that we're making progress on these things. So we're going to do this unethical thing, but there's also some people in the in the Theranos system who are saying like no, this is wrong. This we can't keep doing this yes and so 57:51 Yeah, when her CFO does that, but a large part of this too is sunny. Are you going to talk about sunny? Yeah, so sunny Balwani, who is like is it the C O O of the company? He has an interesting past. He was a programmer. He works. He essentially groomed her. Are we going to talk about that? Do you know about this? I don't know. I don't know about him grooming her. I don't know about the romantic relationship. I don't know about him grooming. He's significantly older than her 58:19 I didn't know. I didn't know he groomed her, but he I mean he you know was around really early in Theranos interesting. I he was around before the two thousand thirteen stuff yeah like he was around like early two thousands yeah, because he was he was she was a full adult. It wasn't yeah. It wasn't like he groomed her as a teenager yeah, but he did. He was in a power position as far as like someone who had money and status. 58:47 yes, and then he basically you know was I don't say secluded her, but like was her only support and confident during some of the earlier years of the company yeah yeah. He worked for in some scenarios would be categorized as yeah. I guess I guess that's true. He became her protector against some of the other things yeah. He had he he worked for a company called commercial 59:17 bid, he was the president. And so he made a lot of money And so he was a fairly wealthy person. And one of the things that you see a lot at Microsoft, which 59:43 doesn't make any sense because obviously that's a lot sounds great though. Most most developers somewhere in the ballpark of one to maybe two thousand a year and so it's like how do you do in that and so it was a above happy pace baby above likely figure. Also when he was at Microsoft he worked in sales. He didn't work in programming so very clearly right off the bat looks like some sketchy 01:00:12 he's kind of a sleazy guy yeah yeah and so yeah he was he was thirty seven when he met homes. She was eighteen yeah i'm saying yeah so yeah i guess he didn't meet her his senior year her senior year of high school i yeah interesting so yeah so he joined and held with the day to day operations of there in us and it was very interesting because homes would communicate with a lot of people in the company and she when she communicate with people in the company she would often like 01:00:41 restate the vision, bring people back to the mission and to the goal and like try to like paint this picture that they're were making the world a better place. We're changing the world. What would happen after those meetings though she people would bring concerns to her. She would paint the vision. It be. I wouldn't say a positive meeting because she would just kind of deflect all their concerns and say we're doing something well, but like it wasn't like a bad experience until later people would then get an email from sunny 01:01:10 and sunny would just a blue lay into them like paragraph after paragraph, shouty caps, all bold red text, all the negative things you can write in an email and just like degrade people's character. Well, it also was the kind of person that, like when you make an argument and you're like well, you you said this 01:01:32 yeah and they would go. You're putting words in my mouth. I didn't say I did not say that and they repeat the same sentence back to you. Yeah again. You didn't say that exact sentence. You said something to the effect of this well. That's what you need to say. You need to be more clear with your words and if you can't even more clear, you know they just the crazy crazy gas lighting. Yeah, I try not to use that word as much because as soon as you say that the people who do it are like 01:01:55 you're using therapy speak and all that and they gas light you into thinking they never gas you before, so I try to use that work because it immediately turned some people off yeah, that's what he was doing. You explain the concept of gas lighting to anybody in the world. They go that does happen yeah. That's as crazy a lot of people do and then you go you do it and he does it. I'm talking about you right now. 01:02:19 and they go first of all, I've never guess. Tell me when give me one example. Give me one example. Give me one. Oh okay. Give me two examples. Actually, that's not gas like what you're saying is not gas. That's not gas. That's not gas. That's not what you just described. Yeah. Now that you're saying that that should do a podcast where we just try to gaslight each other the whole time as any of our phone calls. So we already did that 01:02:48 that's this whole show. We did that gas like we did a whole episode by gaslighting almost believed. I almost no. We did a whole episode. He took the babe for a second and I'm so mad about it. Okay, so that's you 01:03:11 here a Billy mouth bass. Oh, speaking of bass, have you seen this? Have you seen Green Day's new dukey D mastered? No, you know Green Day's record do key right. They they're doing a remastered version of that record for whatever this is master twenty fifth twenty thirtieth anniversary, something that is bad as possible. Yeah. So what they're doing is instead of buying the full record, you buy a single track. Okay, each track comes on 01:03:39 what they said is like you should have never heard before. And so what they're doing is they're putting it on bad formats. And so, for example, one of them is that Billy Bass and it's just one of the songs and that's pretty fun. So like one of them's a floppy disk, one of them's a Gameboy color game and you put in it just plays the song. That's one of them is a doorbell. You ring the doorbell and the doorbell plays the song. And so it's obviously like bad, like all of them are bad because they're bad audio formats. 01:04:07 but it's the whole area really brilliant, hilarious and so they're all collectors items. They're like limited to five hundred each one and they're pretty pretty pricey, but I love the concept that's pretty great. I love the concept. You can get our tilling episodes as Billy man. Well, yeah, we do have to my neighbor have one of those and now that I'm an adult thinking about what it would take to be a person who hangs out in your living room. It was a different time that's two thousand three. We were in Iraq 01:04:37 and now I was we have till in D mastered. It was episode one through like fourteen before whatever, whatever Alex join. You go to the audio only for the entire first season. If you go to the audio only and listen to what we first did, I edited those in garage bay. That's true. Yeah, that's till in D mastered right. It's bad anyways, so to make a long sunny would sunny with sunny was the enforcer to her 01:05:06 and that's what every good cult needs. Yeah is you need a charismatic leader and then you need someone who makes sure that your followers follow the rules and that's what Sonny wants to her yeah. So the way this all kind of started to crack in twenty thirteen. They go public. All the fanfare comes out a reporter with. Let me make sure I say the right organization. The Wall Street Journal Z a reporter with the Wall Street Journal 01:05:36 cut contacts in the medical world, the lance is the lance at Evangel University. Here's from one of his contacts in the medical space, sure sure and they're like. I don't think that this sounds possible, and so he starts looking into it sure. Meanwhile, at the same time there's a I shouldn't say low level like mid level staffer by the name of Tyler Schultz. Tyler Schultz got connected with the company as his grandfather, his George Schultz, one of those early 01:06:05 investors and also I s what did I say? It was secretary of state state wasn't state or souls to he was a he was very he was a government very influential George and was Charles George Schultz was 01:06:26 can secretary of the treasury point a little bit faster on his wikipedia page, jeez secretary of the treasury yeah yeah and so shalt actually introduced him to yeah so george sholt got him a job at there knows yes yes and so it was like hey i invested pretty pretty big fan on the board yeah hire my grandson exactly he needs a job and then okay and then his grandson starts working there and is like this is 01:06:55 lying. We're just lying. Yeah, yeah, we're lying. Yeah, so he raises some questions. Yes, he starts talking to some people and eventually actually talks to Elizabeth Holmes herself about it, and I think he sends an email to her. She doesn't respond to the email. Right instead, sunny's response to the email is basically like you're out of here, and if it weren't for your name, you would have been out of here a long time ago. You have no qualifications, you're a piece of garbage, all this stuff 01:07:25 and so he reaches out to the government and is like hey, is this okay? Here's what word first went to his grandpa though. Yeah, do you yeah he did talk to his grandpa and his grandpa was like no. I was like shut up. You're stupid. No his grandpa really was like no. I do we trust the vision like you're not going to you know yeah be grateful that I got you this job yeah yeah and then yeah and then when his grandpa realizes the truth, his grandpa was actually really instrumental in the whole flip interesting so 01:07:55 he goes to the government and he's like, hey, I killed was with homes. He's like, he's like, is this legit? They're like, that's definitely not legit. We should look into this. And so he becomes a whistleblower kind of not really. I don't think he like set out from the start to be a whistleblower. I think he was like, Hey, I've got some questions. No one in the company is taking them seriously. So he went outside the company to ask these questions. And when he asked those questions, 01:08:19 with the government agencies he is speaking to, they then were like, okay, hey, you're a whistleblower. Now we need to do this right and he's like, oh, that's not really what I was trying to do, but I guess we're here and so it got it got really nasty really quick because you said like his grandpa ended up joining sides with him, but before that Theranos and their lawyers were getting really intense. Oh yeah and they're like his whole family was trying to be like hey, you need to drop this. The lawyers they're going to financially destroy you and come after us yeah and they also 01:08:49 for a long time like they were kind of family friends with Elizabeth Holmes right and like they at the early phases like sided with her yeah. He put a lot of the line to and so after he left the company they found out that he was quote unquote whistle blowing. They started trying to get him to sign an NDA so they started trying to get him to retroactively, which is yeah to joint to come have a meeting with their lawyers and sign an idiot. They're like it'll just be a one page NDA just very basic stuff. 01:09:17 we just want to want you to sign it and he kept refusing and then finally like his grandpa calls him for a meeting at the house to talk about the issue and tries to get him to sign the India and tries to talk him into going to the meeting to sign the NDA come to find out the lawyers were in the back room at the house like it was like an ambush that's like sign then yeah yeah because they came in the room and so and he was like he's like no and so finally that Wall Street Journal 01:09:47 the person writing that article found out about him. This guy named John Carey, you found out about him and reached out to him, put together the article, released the article, and it was like bombshell. Once everyone found out, oh, they're just faking all these results. A lot of investors started pulling their cash or selling their shares. I mean, and we're going to cover the, one of their main scientists. 01:10:15 Were you going to mention this? Did you do you know about this? One of their main sign is what you're talking about was pushing back on this from the beginning was just like we can't keep doing this. There was a lot of people within the company. I don't know if I don't know who specifically you're talking about, but I do know there was a lot of people in the company who were saying hey, this isn't this isn't realistic like we're trying to do right, possibly achieve and they kept having the the Silicon Valley mindset where it's like oh any problem is solvable. We just need more time. We just need to work harder on it. 01:10:45 and we just need better minds on it and anybody who disagrees just kind of gets ousted right. Ian Gibbons, I don't know him. You don't know about this yeah in Gibbons was one of the biochemists who before they ever went 01:11:04 in two thousand and thirteen before they even went public on stuff. He was pushing, but he didn't want them to do that. Oh yes, they were faking it way back then. Yeah, he knew they weren't ready and he kept saying it was not even ready. He was saying this is not possible and we're lying. We're do you guys are yeah doing this Walgreens deal and all this stuff and it's not a thing and he couldn't. He couldn't take the lie and so interesting yeah. So so all this stuff comes out Walgreens 01:11:32 pulls from the deal safely pulls from the deal right bunch of investors started. So I'm saying one of their main guys from the beginning took his own life in two thousand and thirteen because he couldn't handle like he was like no, this is wrong. Whatever I remember that actually now yes and then they went public with all that stuff. Yeah, I forgot about that. I forgot about that, so they had pushed back the entire time. Oh yeah, I mean 01:11:56 before she even started the company. She went to someone who right they were talking about and they had a they had a culture of silence and not yeah speaking up about it. You know and it very much seems like they they were hiring the wrong kind of engineers to solve this problem. They were hiring engineers who knew how to build machinery, who knew how to write co, but they were not hiring biomedical biochemists right like people who could actually solve the problem. So anyway, yes, the news breaks that hey 01:12:22 we've been taking the tests. We've been testing on different machines. We've been lying about all of our progress. All of your investments are just this is a Ponzi scheme, essentially yeah, so Walgreens pulls Safeway pulls and then Kramer from Seinfeld, Jim Kramer from CNBC's mad money. You know the show where the guy just yells about money for an hour. Yeah, he's a stocks are crazy that guy. Yeah, he brings her on the show and he's a gather articles pretty brutal and she responds to it. 01:12:51 and now that I know I can make fun of her voice, she says now I know that's fair game. She says this is just what happens when you work to change things. First, they think you're crazy and then they fight you and then all of a sudden you change the world. That's what I don't think we gave you the liberty to make fun of her voice that bad 01:13:17 you're like now that I could make fun of it. Like that's not I don't think that was we didn't give you creative license to do that. I took it. That's great. I didn't sign an NDA so she's like oh I'm. This is what happens to everybody who's changing the world. Everyone is making a difference. At some point they face. She really thought that he are away through it yeah and that's the thing. I think is so delusional 01:13:44 That's the thing. I genuinely think you mentioned this earlier. I think even through honestly, probably to today, I think she thought we're going to figure this out. Yeah, we're not there yet. We just once it clicks yeah like this will all be over. Yeah, it's like that. I mean it's the sunken cost fallacy as well, though, where it's like we're this far in. If you if we get arrested, it's like what's the risk? I mean the risk is that we get caught and I get arrested sure, but also tomorrow we could figure this out. Yes, yeah and then it's we're good. Yeah, you know 01:14:12 And I think that's the thing too, And so it's like, at some point they were having results like we're getting there, and this is going to change the world, And so I do think they were, And so the FDA comes down pretty hard on the company 01:14:41 anyone from owning, operating or directing blood tests using their machines and from Theranos doing any testing for two years. So like you're going to add to do any of this stuff for two years. Yeah, and so here's a legal time out. Yeah, here's a legal time out and basically it was like well, twenty seventeen. Then we're going to actually put a suit against you. So like we're giving ourselves some time to figure this all out and so fortune updates their 01:15:07 ranking for her where her ranking was a valuation of four billion dollars. She was worth four billion dollars and they updated it. Just change it to zero. They put her on the website. They said so they don't remove her for the website. They were like zero, which is brutal wolf and so long story short her that's only sixty percent accurate 01:15:31 So Holmes and Sunny both end up in pretty long court And Holmes is found guilty of four counts of defrauding patients, three counts of wire fraud, and one count of conspiracy to commit wire fraud. But what's interesting is they returned him no verdict on three counts of fraud against investors, which is interesting. 01:16:00 Okay, but the government dismissed them, which is interesting. And it's very interesting on that note about Silicon Valley culture because Silicon Valley culture again, these investors are playing a numbers game. They know they're going to lose money on a lot of these investments. They also know that getting the big bucks in this is being the first offer, being the earliest to it. And so 01:16:29 there is a culture not being the last because there were some people that at its height sold yes, yes and they did make money. They made a ton of a ton of money on it yeah and so in the silicon world like you need to. If you're one of those investors, you can't burn bridges, you need all those connections and so there are situations where these investors lose millions on these because and they know it's fraud. They know they were trick. They know they were scammed, but they will not pursue anything on it. 01:16:59 because it's riskier for them and all their other investments to pursue anything on it. They need to save face. And there's questions, especially in this legal proceeding about that, where it's like, oh, these investors, they were OK with losing. I should say they were OK with losing money. They had calculated to lose that money. Yes, they expected it. And they were not going to pursue anything with that. And so the. So it's like there's no complaint and there's no. Yeah. So the charge against investors and all that. 01:17:28 ended up failing, but all the medical stuff and the fraud against the American people went through. So she is convicted to 11 and a quarter years. So that puts her getting out in 2023 and sunny. 01:17:44 she was convicted for eleven and a quarter years, and so that puts her getting out. Oh sorry, she was ordered to surrender in twenty twenty three. Yeah, she will get out in twenty thirty four. So is she in prison then she's in prison. She's in federal prison camp, Brian in Texas, which is like a minimum security prison. Yeah, it's not a bad one. Yeah, I've seen no yeah. I mean pictures of her in prison, 01:18:14 I have picture. I can only find pictures of her reporting for prison. Okay. And so it's yeah, not great. And so she's there now. Sunny was also a part of the trial. He was found guilty on all counts and faced up to 20 years in prison and a million millions of dollars in restitutions, but he received only a sentence of 12 years and 11 months in prison and then three years of probation. 01:18:43 and so he surrendered in March of twenty twenty three. So I don't know exactly why his was. I would guess they're already out. I thought Elizabeth Holmes got out. Maybe she's still in she's still in. I don't know about son. I think that it won't be much longer before they're on twenty thirty four is her expiration. Yeah, and so I mean get probation. Yeah, you can be up for pro pro probably in a few years and I don't expect her to be the person who's getting in a bunch of fights in prison. 01:19:12 unless she's doing that deep voice thing stop doing that with your voice. Why are you now doing what my voice? You doing that with your jaw? You think it makes you look hot? Don't you that's from our favorite movie. That is from our favorite movie. 01:19:31 anyway, Madison picture Madison, so that's Theranos, huh? That's Theranos. That's the story of Elizabeth Holmes and Theranos and their blood thing. Okay, 01:19:45 here's was wild. She had a kid in twenty twenty didn't she? I don't know. Actually, I know she has a child. I have seen pictures of her holding a baby, so I'm she does have someone else does have a kid yeah and you know it's one of those things where like I mean I remember through cove it. She was just out living. She like a beach house. You know that's wild. That's wild that her 01:20:07 net worth can be zero and she could have a beach. That's what I'm saying is stuff like that. We're all like what the heck and like so she was out there living. I mean she she really did just try to soak up the last couple of years that she's had and then she's going to spend eleven years and then she'll be out after that. I mean that's the thing with the situation she was in because she had a net worth of four billion dollars and so when you have a net worth of four billion dollars, you're able to use that that equity. Yes as collateral to get giant loans right to essentially 01:20:37 bankroll your life yeah, and so she probably has even though this company fell apart because of that she probably has a really good assets. Yeah, she's going to be fine for the rest of her life. After that, like you can't and that's also part of the calculation. It's really hard to scrape your life when you're worth four billion dollars. Yep, it's really she did really screw her life. She got a prison sentence for it. Yeah 01:21:01 but she's probably once she's out yeah. She's probably going to live a better life than I saw us. You know I saw some today. This is a different thought, but it's about that same kind of what like the rich people think someone was talking about New York on online and they said that they really love the diversity of New York. Like you can be walking down the street and you'll walk past someone who's a millionaire and someone who's 01:21:17 and I said oh no, no, no diversity is not the word you're looking for. The wealth inequality is the word diversity. I just love how diverse this city is. I love how I love the wealth inequality here. That's great. You see how much worse that sounds that sounds inequality here anyway, but yeah, I is it's really hard. That's why you just got to get rich once yeah rich really hard to doesn't matter how 01:21:46 as long as I thought about this year. We'll talk about this in the after the fiddle. I've thought about some scams. I want to do all right man well. You know I'm going to have to fiddle off the IRS. Oh that's her laugh. That's really dumb. 01:22:09 Hey, thanks for checking out this episode. If you like it, we've got another one you might like called Stanley Meyer. He's the guy who invented a steam powered car and somebody wasn't a fan of it. A little spoiler alert. It does involve olive garden, so maybe go get you some more breadsticks, crack them crack them in half because that's how you breadsticks and watch that episode. It's a really good hot bread stick. I told me before this crack open a hot bread. 01:22:37 Jared said don't try to be funny because you're not good at it, and so here we are like crack over the press and it's like buddy, nobody do the out thing. Anyways, if you like this show and you want to see next week's episode early, you can do that right now over on Patreon. You will come a Patreon supporter at tiller dot com slash support. There are patrons get all sorts of great perks like episodes early ad free. They get to join a discord with our hosts and our producers and there's a lot of other 01:23:05 great benefits. So you can do that at tilland.com slash support. But if not, thanks for being here. We'll see you next week on things I learned last night.