Bad Blood by John Carreyrou
This book tells the story of the meteoric rise and fall of Theranos, the Silicon Valley unicorn that claimed to have technology that could analyze blood samples with just a few drops of blood. It’s written by the Wall Street Journal reporter who broke the original piece exposing them as a fraud so it had an in-depth view of the whole situation stitched together from numerous sources (including himself).
It’s a really interesting story outlining the mania that can happen in Silicon Valley startups when you mix a charismatic founder, a world-changing idea, powerful connections, and cheap VC money. This is really a case of life being stranger from fiction. The dysfunction that occurred at Theranos is just simply unbelievable considering they raised more than $700 million and peaked at over 800 employees with almost no revenue. Here are just a list of some of the ridiculous things that happened:
- Elizabeth Holmes idolized Steve Jobs so much so she started wearing black turtlenecks as her uniform.
- She also would consciously speak in a deep baritone, a few octaves below her real vocal range to have more presence.
- Employees at Theranos were compartmentalized so much so that the technicians trying to work on the blood tests and the engineers building the actual device were only allowed to communicate through Holmes and her inner circle.
- She had 5-star generals, former secretaries of state and billionaire CEOs on her board of directors, none of whom had any doubts that Holmes had build a revolutionary technology (in fact, they defended her from any criticism).
- Any criticism from employees would result in immediate termination and a team of the country’s most powerful lawyers threatening lawsuits (the same ones who dealt with the Microsoft anti-trust case, Al Gore’s presidential recount case, and more recently, Harvey Weinstein’s accusations) and other intimidation tactics like having them being followed around by private investigators.
- Some patients in Arizona actually received false blood tests for things as serious a syphilis or HIV.
It’s an incredibly interesting story and the unbelievable part is how Holmes was able to systematically convince the whole world that her technology actually worked — including the employees at Theranos who could plainly see that it wasn’t working — and, more importantly, how she wasn’t exposed for years. We still don’t know if she actually believed that she was changing the world or it was just a big con. Either way, this book is definitely worth a read.
Shoe Dog by Phil Knight
This is a great book! I heard great things about it and I took it with me on vacation and devoured it. It’s an autobiography from the founder of Nike, Phil Knight, detailing his (and Nike’s) incredible journey from nothing to IPO. It’s written in an easy-to-read, more informal style. Knight is a great story teller (which is what makes it hard to put down) and also sprinkles in loads of wisdom and insight along the way.
The reason why I liked the book the most is because I can identify with a lot of the ups and downs he has had while building Nike. Being part of a startup from early days to (hopefully) success is a unique experience that is hard to describe. Shoe Dog does a great job of conveying that feeling and putting a lot of perspective on the whole experience.
Here are some random thoughts from the book that stood out for me:
- Crises! Boy were there a lot of them! It seemed at almost every turn there was a new crisis where Nike was on the brink of collapse. I think one of the most important things Knight captured in this book is the mood and feeling of those crises. When you have an early stage startup, it really is touch-and-go where the whole thing can come crumbling down at a moment’s notice. Having this view into one of the most successful companies in the world, and knowing they also experienced the same thing, has given me so much perspective.
- Cashflow is king! Among the many crises that Nike had, chief among them were cashflow problems. Sometimes us in technology don’t think about this much because the marginal cost of producing software is zero (you can just copy it), but when you actually have to manufacture a physical good, you need enough cash to bridge the time between paying supplies and actually selling the final good to your customers. On top of this, when you’re growing extremely fast (doubling sales every year) your need for cash is magnified (more cash is tied up paying suppliers but before you have made the sale to the end customer). In the 70s, venture capital was almost non-existent save some early efforts in Silicon Valley, so Nike had to turn to borrowing from friends and family, the bank, and its suppliers. You might thing that everyone would love to invest in a high-growth startup but the banks, being conservative institutions, actually wanted them to slow their growth! With VC money coming easy nowadays, it’s easy to forget that it wasn’t always like this.
- Trade-offs: The other thing that was apparent was the trade-off Knight made between between family life and business. Nike was all consuming for him (and many early employees) and had dramatic effects on his personal life. He admits that his relationship with his sons could have been better and that his wife also put up with a lot. I think this is the harsh reality of building these companies. You have a fixed number of hours in a day and if you’re going to build a new company, it’s going to take up a huge portion of your time, not to mention your mental energy. Life is full of trade-offs and we shouldn’t fool ourselves into thinking otherwise.
- Competition: Throughout their history Nike dealt with some shady businesses both in Japan and America. When you have your primary manufacturer plotting behind your back to drop you, and your competition lobbying the government to tax you to bankruptcy, it’s hard to survive! We like to think that modern economies are relatively fair meritocracies but lots of shady stuff still goes on.
- Maniacs: Knight had built a team of “maniacs”! This diverse group of misfits (his words), who were just as fanatical as he was, really pushed Nike to success. I would wager that this is probably a recurring them for most super successful companies.
- Bias: Throughout the book Knight acknowledged some of his mistakes related to some shady stuff they did (stealing documents from Japanese business partners) to his absence on the home front. It’s great that he included some less favourable views of himself but ultimately, humans will be humans. I did feel that most of these events had a very positive spin on them but it’s interesting to see how we interpret our own mistakes.
In summary, great book, go read it.
Trust Me I’m Lying: Confessions of a Media Manipulator by Ryan Holiday
I think I came across this book in the comments section of Hacker News. The person who recommended it was effusive that it was worth a read, I usually try to pay attention when I hear something like that. Suffice it to say, this book is a definite recommendation from me.
The author, Ryan Holiday, used to run marketing at American Apparel and now consults on various branding and marketing campaigns, particularly in the new age of internet media. The premise of the book is pretty simple: the instant gratification, free, and always on incentives of the internet has created a situation where it’s very easy to manipulate the general public into believing something false. Not only that, the first half of the book goes on to show you example after example of how he (and others) were able to accomplish it. The second part of the book then goes on to show the dark consequences of this brave new world of media manipulation.
The interesting part about this book is that the original edition was published in 2012! This was well before “fake news” became a common part of our vernacular or the awareness of foreign manipulation of democratic elections. At that time, Holiday basically gave a playbook on how manipulate the media and the public (although not specifically for interfering with elections). I don’t know about you, but I certainly like to understand when and how I’m being manipulated.
After reading this book, I’ve become much more aware that most of the “interesting” articles I read on the internet are probably half-truths, exaggerations or outright lies. And for the most part, it’s not malicious by the actual authors of the blog posts, articles or tweets — it’s more of a necessity based on the economics of internet media.
Let’s take a simple case: you’re a writer for a popular internet news media outlet (or even a traditional one). Your company makes money by people viewing ads on your website. This means that the articles on your site need to grab the attention of your audience. Now keep in mind, the average internet user is a fickle creature. Anything can easily divert their attention from a new flashy hyperlinked headline to a picture of a cute dog. So naturally you, as a writer for this site, make your articles with click-baity type headlines, make it simple and short to read (above the fold) and make sure you are the first to actually publish it (who wants to read old news?). Add on top of this that you get paid by the volume (not quality) of articles you produce, putting you in a state of constant grind to write the next viral article.
All of these facts lead to our current state of internet news: barely researched articles based on a single source, exaggerated and misrepresented to get you to click. An exaggeration? Maybe but probably not too far off.
If that weren’t bad enough, this internet news cycle makes it incredibly easy to “suggest” news to these people in order to get your story to the top. I won’t go into too much detail (you should read the book) but if you sat down and thought hard about it, you probably could come up with a handful of ways to do it yourself.
Anyways, this book is definitely worth your time to read. It’s a pretty easy read and the anecdotes about manipulation are both interesting and a bit appalling at the same time — just what you would expect from Holiday.
Books Started but Paused
These are a couple of books that I started to read but put down because I wasn’t getting into them. I saw an interview by the author of Farnam Street who said that we all should get over the need to finish books. You should decide what you want to get out of it, if you got what you wanted out of it but didn’t finish it (or you’re not getting what you want out of it), then stop reading it. There’s no shame in that, instead it’s just rational (we’re not in school anymore, we don’t get marks for finishing books). Anyways, here are a couple of books in that category:
- Retail Disruptors: The Spectacular Rise and Impact of the Hard Discounters by Jan-Benedict Steenkamp and Laurens Sloot: I actually find the topic very interesting from a business model point of view and also because Rubikloud is in the retail industry. However, I just wasn’t in the mood to read the book. It’s a much more academic treatment compared to the above books which are told much more through stories and anecdotes (although I wouldn’t say Retail Disruptors is dry like academic papers, more like digested research for the mass public). It’s probably because I was still in the mood for some great story telling that I put it down (coming off of Theranos and Shoe Dog). I’ll probably pick it up again at some point.
- Deng Xiaoping and the Transformation of China by Ezra F. Vogel: I’ve been meaning to learn more about Deng Xiaoping, the successor of Mao who opened up China and started it along a multi-decade growth streak. The book was ambitious at 900+ pages. I only got through the first 70 or so, which interestingly covered most of Deng’s life (the last 800 pages covered the last decade or two under Mao and afterwards). The issue with this type of biography is that it’s very much told as a series of events rather than a story. I have a hard time getting into these types of books because the whole reason I want to read biographies is to “get to know” the subject, not learn a bunch of facts. I do understand the difficulty for the author though, Deng was an incredibly secretive fellow, never writing anything down for fear it could be used against him. On top of that and he grew up in a time of turmoil where record keeping likely wasn’t a priority. I might end up picking this book up again but I’ll definitely need to be in the right mood to do so.