freedom and why we need to continue to be focused on manufacturing policy here in america today. >> booktv wants to know what you're reading. send us your summer reading list at booktv on twitter, instagram or facebook. book, tv on c-span2, television for serious readers. [applause] >> i have to have this. it's what it's all about. welcome, john. let me add my welcome -- >> thank you for having me. >> yeah. john was actually asking me a little bit about the commonwealth club, and i was happy to brag about the fact that it's a place where people

of all opinions and points of view and political persuasions come, and we can hear what they have to say. it's a rare forum in today's world where you don't just hear one side of the story, right? so i think we should all give ourselves a hand for the that it that there is, exists in the world a place like this organization. well, we're here tonight to principally talk about your brand new book. the title is not one that would make you buy it in an airport store -- [laughter] but -- >> a. [inaudible] >> yeah, but maybe second tear title, "secrets and lies in a silicon valley start-up. " that would catch my attention. but it's a fascinating story about a circumstance that i suspect be many of you are familiar with because it

happened right in our own backyard. in fact, i shouldn't use the past tense, because it technically continues to happen. and so what i'm going to do is not assume even has such a tactile familiarity that we can just get into the subtleties of the story. let's start with the basic framework, an executive summary of what brought you to this book. >> right. well, i guess, first, i'll explain the story of theranos. >> right. >> a young woman named elizabeth holmes dropped out of stanford university when she was 19 years old in the middle of her sophomore year because she had a vision for a technology that she wanted to create. she wanted to be a successful entrepreneur, follow -- she very much wanted to follow in the footsteps of steve jobs, whom she admired.

the original vision was for a wristband that would have these microneedles that would draw minute amounts of blood from your wrist and diagnose you with whatever ail you and simultaneously inject you with the appropriate drug and cure you. [laughter] >> that's ambitious. >> she called it the therapatch. in her early pitches to investors, there was a die frame that showed the patch. -- diagram. actually, it was more science fiction than reality, and she and her co-founder realized that after a few months and pivoted to something that was more inspired by the portable glucose monitors that diabetes patients use to monitor their blood sugar. except elizabeth wanted her portable device to be able to do

every blood test from -- >> and how many is that, approximately? >> i mean, if you're talking the full range of laboratory tests it's anywhere from several hundred to several thousand. >> wow. and no one had been able to do that before, so, you know, it was still an -- it wasn't the wristband, but it was still an ambitious endeavor. and she proceeded to build up this company over the next decade, went through several iterations of the technology, and by late 2013, fall of 2013 via a partnership with wall between's specialized her finger stick tests in walgreens stores and two with blood draw centers in the palo alto area and another 40 or 45 in arizona. and became a star and a

celebrity here and even beyond silicon valley. she got a lot of press coverage. a very catchy headline, the ceo is out for brood. and, you know, became a fixture on the tech conference. the health care conference circuit, was invited to the white house several times. won various awards, was invited to join the board of fellows at harvard medical school which is a very prestigious body and was feted as the world's youngest self-made billionaire because by early 2014, he -- thera, no s had -- she had kept almost half the ec by d equity.

so in a nutshell, that's the story of they are nose. >> it wasn't that they became available, they became available retail, right? >> right. >> so you didn't need a doctor to go through -- >> exactly. and the first part of theranos' history, the business model had been different. she pitched pharmaceutical companies, and thed idea was that pharmaceutical companies would use these user-friendly, fast, painless finger-stick tests in clinical trials to test new drugs and so the patients enrolled in clinical trials would have the theranos blood testing device, and they would prick their finger several times a today, and that the results would be beamed to the child's sponsor, and pharmaceutical companies would be able to save

billions of dollars on clinical trials or so elizabeth claimed. and it was only later starting in 2010 that she pivoted to a direct to consumer model. and there were two retail partners that she wooed and one in particular, walgreens, is the drugstore chain through which she was able to commercialize the technology. >> and the other point, just to get our fact base here, is her board of directors. who was -- >> right. >> -- the board of directors? >> so in 2011 she net george schultz through someone at stanford medical school, and you all know who george schultz was. crafted the reagan administration's foreign policy, is credited by many with winning the cold war.

in his 90s now but remains a revered figure, in republican circles, and he lives right off the stanford campus. has always been very passionate about science. and when he met elizabeth holmes, he was really impressed with what she told the him about her technology. and he soon thereafter joined her board and then introduced her to his buddies at the hoover institution, the think tank on the stanford campus, is and that's how she got to meet henry kissinger and bill perry, former secretary of defense urn bill clinton -- sam nunn, bill frist and only former military commanders like admiral roughead, they all eventually join joined the board. so by time 2013-2014 came around. she had this unbelievable board

of ex-statesmen and retired military commanders who had incredible resumés. >> and general mattis. >> general mattis. our current secretary of defense, yep. >> but there's something interesting there in that they are all really smart, successful people but what did they know about biochemistry? >> that's right. [laughter] not much. >> not much. >> you know, if you thought about i think a lot of people were impressed with this board, and new people stopped to think but what does george schultz and what do henry kissinger and sam nunn and jim mattis know about medicine and lab testing in particular? and i think there were about 12 men on that theranos board and only two of themed had any coast to medicine whatsoever. and none of them had any expertise whatsoever in

diagnostics. and so if you thought about that for a sec, that was a major red flag. >> yeah. it was either a tell or a great reason to invest. >> right, right. and there's this hedge fund based in san francisco called partner fund management that met with elizabeth and sunny be, her number two -- sonny, her number two executive who also secretly happened to be her boyfriend. tried to do due diligence, and were essentially bald-faced lied to about profit projections and binders of data that weren't real. but one thing that really sold them was the board of directors. they were really impressed by, you know, the credentials of these people. it didn't occur to them that a

start-up with a board that was that impressive could be up to no good, not to mention, you know, the lawyer keeping watch on the shop was david boies. >> right. bush v. gore. >> right. >> so let's loop back, because a a lot of your book is about the culture of the company from where it, how it started originally -- >> right. >> -- and how it evolved particularly with the walgreens and safeway situation. so give us some insight into some of the anecdotal examples, for example, the way the company worked. >> yeah. so from early on the culture of theranos was one of secrecy and pair paranoia. and elizabeth liked to compartmentalize information and to, you know, keep the overall picture of the twice's

development -- device's development to ourselves. communication between the engineers and the chemists wasn't necessarily encouraged. she also fired a lot of people during the early years. there was constant turnover. i would say this culture really went into overdrive when her boyfriend, sonny -- who was 19 years older whom she had met when she was just a teenager before even starting her undergraduate studies at stanford -- and -- >> and he was a software. >> he came from a software background. >> right. >> and he had gotten wealthy at the very top of the internet bubble when he had joined a tiny start-up a few months before the tech bubble popped and a couple months it got acquired for some $250 million, and he had walked away with more than $40 million. so when elizabeth first met him coming out of high school, you

know, she i saw him as this successful, older, successful silicon valley entrepreneur. and she wanted to become successful and wealthy. and so he became sort of her adviser, the guy who would teach her about business and silicon valley. and eventually they became a couple. he divorced the artist he had been married to and moved to palo alto, bought a condo. she moved in with him in 2005 and for the fist five, six years of the company he was her adviser behind the scenes, but he doesn't actually work at company. and he -- that changed in late 2009. at that point theranos had burned through $47 million that it had raised in three rounds and was on verge of bankruptcy.

and he stepped in and agreed to guarantee a bank credit line that the company took out to stay afloat. and at that point he joined the company as the number two executive, the president and chief operating officer and that early culture of paranoia and secrecy really went into overdrive with him. he had a very short temper, and, you know, the firings, if anything, increased to the point that a new expression was coined inside theranos which was to disappear someone. [laughter] when colleagues no longer showed up at the office, you know, their former colleagues would say, well, sonny disappeared him or her. >> yeah. [laughter] and, you know, as i recount in the book, it was just a constant stream of firings. there were also people, quite a

few employees who left of their own volition, you know, because they had developed qualms, and they didn't want to be a party to what was going on anymore. but it was really an unhealthy culture, and i was at kepler's books last night doing a talk and a book signing in menlo park, and there were quite a few ex-theranos employees who came -- [laughter] and a lot of them got in the line, the book-signing line. .. microphone.

yes, sir, sorry. >> can you hear me? change of focus. you described the hierarchy of the kennedy brothers. what was their relationship of john and bobby to teddy?