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>> this is what is all about. welcome to the commonwealth club. john was actually asking me a little bit about the commonwealth club and i had to brag about the fact it is a place a place where people of all opinions and points of view and political persuasion come and hear what they have to say where you don't just hear one side of the story. the we should all give ourselves a hand for a place like this or an organization.

but with secrets and lies in the silicon valley. it is a fascinating story about a circumstance it continues to happen. and we will not assume with the familiarity with the subtleties but this is basic framework. >> first i will explain the story of a a young woman named

elizabeth dropped out of stanford university at 19 years old and had a vision for a technology she wanted to create to be a successful entrepreneur. and following in the footsteps of the jobs and that original vision was for a wristband that would have microneedles to draw my youth amount of blood and diagnosed with whatever ails you and simultaneously inject you with the drug to cure you. [laughter] he call this the patch and in that pitch to investors there was a diagram actually was more

science fiction than reality. founder after a few months admitted to something that was more inspired by the portable glucose monitors that they used to monitor blood sugar because elizabeth wanted her portable device to do every blood test, pinprick. if you talk the full range of blood test between several hundred or 7,000 but no one had been able to do that for. so it wasn't a wristband but it was ambitious endeavor and she proceeded to build up the company over the next decade and went through several configuration of the technology

by fall 2013 with a partnership with walgreens, commercialized fingerstick test in the walgreens stores in the palo alto area area another 45 in arizona. and became a a star and a celebrity here and beyond silicon valley she got a lot of press coverage on the cover of fortune magazine june 2014 they photographed her with the steve jobs turtleneck to the the ceo was out for blood and money and became a fixture on the tech conference of healthcare conference circuit and invited to the white house several times one various award and asked to

join the board of fellows that harbored this one -- medical school and was fêted as the world youngest self-made female billionaire because by early 2014 she had achieved evaluation of more than $9 billion and she kept more than half of the equity she was worth almost $5 $5 billion at that point. so in a nutshell that's the story. >> we will be back but two things that are interesting is it wasn't just the blood test became available but it was retail so that you didn't need the doctor. >> exactly. the first part of her history the business model was different she pitched pharmaceutical companies with the idea pharmaceutical companies would use the user-friendly fast and

famous fingerstick test in clinical trials to test drugs of the patient and will would have the blood testing device in their home picking their fingers several times a day and the results would be beamed to the trial sponsor and the pharmaceutical companies would be able to save billions of dollars in clinical trials and that was claimed but only later starting in 2010 that she went to the direct to consumer model and there were two retail partners she glued and one in particular, walgreens is the drugstore chain through which to commercialize the technology. >> the other point but her board of directors who were they?

>> in 2011 he met george scholz threw someone at the stanford medical school. you all know george scholz is a former secretary of state foreign policy to his credit and winning the cold war now in his 90s that remains a revered figure in republican circles and he lives right off of the stanford campus and has always been very passionate about science and when he met with the he was impressed with what she told him about her technology and soon after he joined her board then introduced her to his buddies at the hoover institution the think tank on the campus and that is how she got to meet henry kissinger and

bill kerry former secretary of defense under clinton. sam nunn, bill frist, and former military commanders and eventually they all joined the board so in 2014 he had this unbelievable board of the men and military commanders who had incredible resume even general matus the secretary of defense. yes. >> but there is something interesting there but they are all smart and successful people but what do they know about biochemistry? >> s right. [laughter] not much.

i think a lot of people were impressed with the board and few people stop to think what is george scholz or kissinger or sam nunn know about medicine and lab testing in particular? i think there were about 12 men on that board only two of them had any connection to medicine whatsoever. none of them had any expertise whatsoever in diagnostic. so if you thought about that for a second, that was a major red flag. >> it was either a a hell or a great reason to invest. >> there is a hedge a hedge fund based in cisco called partner for management that met with elizabeth and her number two executive who secretly was the boyfriend in 2013 and 2014 and tried to do due diligence and

essentially boldfaced lie to including revenue and profit projection and die that died it on -- data that wasn't real but what was board of directors. they were really impressed by the credentials of the people and it did not occur to them that a startup with the board that impressive could be up to no good not to mention the lawyer keeping watch on the shop was david boyes. [laughter] from bush v gore. >> let's move back because the culture of the company somehow it started originally and how it involves from walgreens so give

some insight to the anecdotal examples. >> so from early on the culture was one of secrecy and paranoia elizabeth would like to compartmentalize information the over all picture of the development to herself and communication between engineers and the chemist was not necessarily encouraged. she also fired a lot of people during the early years there was constant turnover. there was a culture really went into overdrive when her boyfriend who was 19 years older she had met she was just a a teenager even before starting her undergraduate study, he came from a software background and

had gotten wealthy at the top of the internet bubble when he joined a tiny startup a few months before the tech bubble popped. and a couple months before it got acquired at $250 million he walked away with more than $40 million so when she first met coming out of high school, she saw him as a successful older silicon valley entrepreneur and she wanted to become successful and wealthy so he became her advisor will or teacher about the and silicon valley and eventually they became a couple. he divorced the artist he was married to and moved about a condo she moved in with him

2,005 and for the first five or six years of the company he was her advisor behind the scenes but did not actually work at the company. but then that change late 2,009 when they burn through $47 million and was on the verge of bankruptcy he stepped in and agreed to guarantee a bank credit line that the company took out to stay afloat and then at that point he joined the company as the number two executive operating ofc. than that early culture appear annoying apparently a and secrecy went into overdrive with him. he had a very short temper and the firing increase to the point there was an expression when

they no longer showed up at the office they would say sonny disappeared him or her. and as i recount in the book, it was a constant a constant stream of firings also people quite a few employees who left from their own foolish and because they had developed forms and they didn't want to be a party to it was going on anymore but it was really an unhealthy culture and i was at kepler's book last night doing a talk in a book signing and there were quite a few ex-employees who came. [laughter] a lot of them got in the line for the book signing and some of

them didn't know one another that they had worked at the company and they call themselves survivors. and i heard them use this term in the line. so there was an aspect working largely there it was not a pleasant experience because of this culture. >> it is important not because of the anecdotal nature but you would expect exactly the opposite with the unicorn type of startup particularly those pretend to be disruptive in the industry that it would be openface everybody comes to each other yosef with everybody else and talk and chat. because because that is how ideas. the. >> at a certain point really it

is a story a story of a young startup founder had a habit of overpromising to raise money and with those years it got worse and worse in the gap between where her technology was and what she, became enormous to the point when they went live with the blood test fall 2013 in walgreen, the gap was so huge that they had to cheat and hack commercial machines to uphold the myth that they created new technology. part of that silo weaning in the secrecy and he came to high shenanigan. when i finally published my first story october 2015 a lot of employees were not even aware of what they had done or even a

few of the blood test was done with the device most were done with hack commercial machines because they were not authorized to go into the lab. there was a fingerprint and if you were not and in preapproved you cannot get in you didn't know what was going on. the culture is not just hiding from the outside but also many employees on the inside. >> so the board that was the tell because if you were committed you would operate 180 degrees different. but go back in my mind which was the first encounter with underperformance that was the largest test. >> the prologue is about the

chief financial officer at the time was elizabeth and her call you in november 2006 come back from a demonstration in switzerland at novartis one of the biggest pharmaceutical companies in the world and he is excited and happy go lucky that the employees who went with her are not and they look like something had gone wrong. so he wondered wanders downstairs to figure out what happened and he approaches the cofounder and wasn't exactly sure what happened in switzerland but after talking after a while he while he realizes the demos that they were doing for investors that they were coming by the office were not real because the tests

are prerecorded and not in real time. so the cfo had been the eight-month and his son because he is been bringing around these investors making projections and is under the impression the demos were real and they are under the impression they are real and he learns they are not. so he decides to confront elizabeth and goes to her office meets with her and told her this is a mind taking cross not as a startup founder you can't lie and miss the investors that is security five. so she flipped and goes from happy-go-lucky to life cold and looks at him and says you are not a team player i thank you

should get out of here right now and it's clear she doesn't mean out of her office and she means he's fired. that scene is the prologue because a good way a good way to hook the reader's. [laughter] and make them turn the page but i also thought it was emblematic of the fact that the unethical behavior of this company is something that happens late in the game or put into a corner and had to cut corners it started very on and that the place a couple years after she founded the company she is 22 years old and it shows that unethical behavior was part of the dna of the company.

>> then with the technology there was a microfluidic system that refers to the field that has the purpose the microfiber technique i endeared by the computer chip industry to move tiny quantities of fluid and that he'll was just coming up when elizabeth holmes launched her startup there was a lot of excitement about it and they made a real a real effort to build a microfluidic blood testing system. unfortunately it wasn't working and she lost patience and was probably under pressure because she made promises to investors she put it away even as she pivots away 82007 she 2,007 she already started a pilot study with pfizer whereby the system

has been installed in the homes of terminal cancer patient to see who are in clinical trials getting antitumor drug to arrest the growth of their tumors and hopefully buy them a few more months of life. and back then there were employees that realize it wasn't right to move the blood testing system and granted and it wasn't used to inform the treatment of the cancer patient but a validation experiment compared with the regular blood tests that pfizer was doing regularly. but employees were still all that is terminal cancer patient were being put through the

fingerstick withdrawal several times a day for a technology that absolutely did not work. then in the middle of that study she pivoted away from the microfluidic platform that was essentially a glued and see a robot from a company in new jersey be. >> that is made to dispense glue at the end of the robotic arm has agreed to be the motion and forward and back and he reprogrammed the robotic arm mimic what a scientist would do at the bench testing blood. when that hit it to that machine happened some employees felt let down because it was a huge step

down from the microfluidic so they would rightly refer to the machine as the bought one -- glue robot. [laughter] she had a well-known industrial designer design a me black and white case to hide it inside and christened it the edison after thomas edison and this happens with this visit essentially a completely different machine and much more rudimentary happening in the middle of this validation study cancer patient and the. >> he reminds me that her whole model is blood from capillaries and explain why that's a

different. >> it isn't just the fact get such a small sample a small sample of blood but also capillary blood is polluted by tissue from so and if you are drawing blood from the tip of your finger you just are not getting as pure of the sample as with the needle from the arm. one problem in particular with capillary blood is when you prick the finger then milk it to get the blood out often you are putting on the red blood cells and they explode and that creates more potassium than otherwise there would be in the blood with the fingerstick with capillary blood. there have been studies showing

that potassium test are completely unreliable when done with capillary blood and as i recount in the book of one of the big problems that she encountered as well payment how do you interpret this session with jobs? >> first of all there is a history of the family and her ancestors that were some of the richest people in america at the turn of the 20th century and her father had raised her with the knowledge of the great success that also with the knowledge that the leader generation squandered the wealth and his grandfather had lived a very hedonistic lifestyle with

and i'm just in hawaii and squandered the money to send wonder the rest. so she was raised with this notion that once upon a time they were wealthy people. at the top they were the elite of america once upon a time and a time wasn't the case anymore. he had desire. and steve jobs silicon valley she was starry i and i and he was her idol. did apple and i thank i think intermittently that she is she modeled herself after jobs and basically the computer industry.

in those genentech says the world and instead choosing as her model and it wasn't the right model. and the silicon valley fake it till you make it and the term vaporware where it was going in the 80s and announced with great fanfare and to be delivered years late people like jobs and also were accused of engaging in the practice if you look at it from the point of view that's okay because they

make it with real thing and their founders became founders and met with the plan is the same playbook but you can't rule out vaporware in medicine that is a a different arena in the end consumer is not someone using that aphid is an application to make a crucial medical decision and to lose sight of that or ignore that the traditional silicon valley isn't applicable to medicine but she tried to apply that to medicine. >> so twitter was famously buggy

in those early years it would not work for hours at a and that consequence was frustration but it didn't put anyone in danger him -- at walgreens/202 have those checks in place how did walgreens? >> that is the craziest part there is a chapter in the book i think it is chapter seven where i recount walgreens attempt at call that when they first

approached walgreens and 2010 and they assert that they have this technology with just a drop of blood and the left hadn't even started working on that so anyways that is a a big lie but walgreens should have been able to figure that out they hired a laboratory kick the tires and check out those claims to do some verification and heat throughout and met with elizabeth and sonny and others twice. and he started asking tough questions and suggesting they do a comparison ready with stanford

and they sanford and they didn't like the question at all. and after a couple of months they told us that. i walgreens we don't want this guy in meetings anymore. they either have these in person meeting once a month or video a month or videoconference calls once a week. brett was if they did not exclude hunter from the meeting going forward than they would walk away and walgreens was terrified they would walk away and go to the archrival at walgreens there was tunnel vision in a a battle to the death with you and everything you do see it through that prism.

and strike a deal with them and they are regretting it for the next 20 years. it is fair to say the fear of missing out plays a big role to walgreens dropped the ball and remained there consultant for a while longer but kept it on poorly and they made it impossible for him to do the job and as a result walgreens never vetted that technology that was an important part of the story because everybody that came after assumed the blue trip company that they did their homework. that they kick the tires with

the medical technology everybody assume that walgreens it was good enough for walgreens is good enough for me. >> but with regard to testing customers at walgreens? >> by the time he started to dig into the company they had commercialized the test for more than a year and a half. and they were in more than 40 locations most arizona which they chose because arizona policies are pro- business and light on regulation also high concentration of uninsured patient and they like to

advertise a very low the very low prices and it would offered price and they knew the patients would be sensitive to those low prices with those that had to pay for the labs because medicare has her labs covered by insurance but more they deterred by the fact that technology doesn't work? [laughter] >> asked where it gets unbelievable. they would try to validate test so the many lab which was the last version, the second generation was limited and could only do one class of blood test and there are half a dozen classes so the many lab could do the other classes of blood tests to buy the timetable about the fingerstick test many lab was a

prototype that did not work it was years from functioning so they could not exactly that so they dusted off the edison to try validating the fingerstick test on the edison but according to my source i learned subsequently that the validation experiments that they ran were shoddy and cut corners, ignored data points which is very well known you don't eliminate any data points that is scientific fraud. and they were engaging in behavior because they were trying to get the validation report to look the way they should look to put the test on mine. so they did put half a dozen tests on mine on the other that were not reliable. because the edison could only do

diagnostic that they had to pretend they had technology so they hacked a machine which is a a big poking commercial analyzer not at all made test fingerstick blood that they had the brilliant idea they could modify the machine and adapt to small fingerstick samples and they did that by diluting the blood for the fingerstick temples to create more volume because the machine was built to test normal five samples of blood so they would dilute the blood more volume. . . . .

this led to a series of unreliable tests. >> so that patients were actually getting this. >> they did about 80 tests and using his hacked method. >> we could go on and on about this element i will use the term

scam. i want to goats where you become part of the story if i can put it that way. were you first sniffed out that something was different here and how that led to the investigation. >> reporter: when it first came on my radar when i read a profile of elizabeth holmes in the new yorker in 2014. she had become a celebrity and it had been a year more said she had risen to fame. she had graced the cover of the magazine six months prior. for me that's the first time i discovered the company existed and that this young woman had pounded it. i learned of the company's

valuation and her great wealth. there are a couple things. one thing in particular that struck me as odd when i was reading this which was this notion that a 19-year-old college dropout with just two semesters of chemical engineering classes under her belt had just dropped out. and have pioneered groundbreaking new medical science. this has happened before in silicon valley. there are precedents with mark zuckerberg before them. they were taught how to code and program on the computer when they were young. legend has it that zuckerberg taught himself how to code when he was ten years old. that's believable. you can do that with the computer manual. you can teach yourself how to code. but you can't do that in

medicine. in medicine, you usually have to have formal training go to medical school, get your phd, do postdoctoral studies, do years or decades of research before you start adding value. as a sample, it's no coincidence that most nobel laureates earn this in their 60s. i knew that and so i smelled a rat's. to be fair, i might not have done anything with that hunch if i haven't got that tip three or four weeks later. it's a clinical pathologist who wrote an obscure blog and he spelled it be a wg.

i had come across them the previous year doing a series of stories on medicare for an abuse. i had sought his assistance he had explained the billing to me and i use that to look at the scam at a network of cancer centers. i have not spoken at that point in seven or eight months. he called me because i had read the new yorker to and had been immediately dubious about the claims in it and had posted this on his blog. he had contacted almost

immediately by a little band of skeptics. one was a guy, richard fuse who had been a childhood neighbor of elizabeth and her parents in the 80s when they lived in washington. was a medical inventor and entrepreneur. this is sort of a crazy plot twist, but when elizabeth dropped out of stanford and found, he and his wife the rain were still friends with homes is. and he was a very proud even vain man. his pride was hurt that the hoses have not sought his advice, even though they knew very well that he had decades of experience patenting medical inventions and building companies and selling companies. so at the same time he thought the best decision had merit. he had gone on the website.

he had figured out that there is one part that she probably had not patented which was the alert mechanism to alert doctors when a blood test result is abnormal. this probably is not a very nice thing to do. she did not immediately know that he had done that but eventually did because patent applications are made public in uspto's database 18 months after they are filed. then, elizabeth had come to develop this theory that he had used his son, john, who had worked on the same law firm that he had used briefly for patent work. she developed this very that john fuse has stolen information

from the own provisional patents and given it to his father. i looked at the allegations very closely and came to the conclusion that would fuse had done was a very nice but he had not stolen any information. she did sue him in 2011. that lawsuit and litigation went on for three years. she hired david to litigate that case. throughout the litigation he had a background in medicine and have become convinced that it was a scam. so, he told the pathology blogger of his experience and suspicion and it helped that he had just may contact with an employee who is the outgoing laboratory director the

pathology blogger was three times removed from any primary and that fuse himself, talk to was a secondhand source. the fact that there was a primary source and was alleging that all men are wrong got my ears. >> the lab director. >> from then on, it was my mission to get that on the phone and make contact with them. after a couple of weeks he was terrified. he was being hounded by the lawyers. he had sent a bunch of e-mails to himself to a gmail account and they were pressuring him to delete them. he hired a lawyer and she was nuts very -- she definitely was

not very competent to take on the case and go up against him. so she was intimidated by the heavy-duty lawyers on the other side. he was under all the stress. he would only speak to me if i granted confidentiality. so i figured all i had were rumors and innuendos. i promised him i would treat him as an anonymous source and guard his identity which i still do to this day. he is identified in the book under a pseudonym. he goes by alan beam which is not his real name. during that first phone call with alan beam, muscle lasted an hour or more. i learned about the fact that very few blood tests were done on the technology that the machines were faulty most tests were done sign commercial instruments that they had

modified. that elizabeth and sonny were couple and hiding it from the board of directors from employees from the public henry kissinger had been quoted as saying he and his wife had tried to set them up on dates. so, i immediately knew this was a big story and especially the part about gambling with patient's health and lives. at the same time, the journal was not going to let me go to prints with this story based on one source. however good that source was. so, it became cooperation and that's how i came across other former fairness employees.

one who is tyler scholz which was george scholz's grandson. tyler scholz had worked there eight months and had come to the conviction that it was a fraud and a scam during his eight months. during the tail end of that we tried to open his eyes to what was going on. so we had to leave and keep it all bottled up for a year. when i started poking around and calling his ex- colleagues, he heard the journal was poking around and he the look me up on linkedin. and then alan had told me about tyler is said that connection was interesting. as you know it enables you to

see who's checking you out. so then i sent him and in mail through linkedin and do not hear back from a month. is making headway with this story in other ways when i had lost hope he had got back to me, my phone rings one afternoon and it's tyler also terrified and very nervous calling from a burner phone. he was worried that it would trace our communications once idea, he gradually got comfortable and his story came pouring forth that added and on believable twist to this story.

>> so the last part of this is that you finally decide to publish, october 6, 2015. >> tyler had good reason to be paranoid as did alan because the company figured out they were among my confidential sources and threaten them. there is a surreal incident that recounted in the book about the way tyler was ambushed at his grandfather's own house. then had to withstand months of legal threats, and they wanted him to sign documents basically

recanting and naming my sources. tyler withstood this pressure and never cave. in large part thanks to him i was able to go to press with the story in october 2015. >> the last thing i want to get to with audience questions, tell about how you were treated once you publish the story. >> this story was published in 2015 which so, she went on cnbc incident from boston. she spoke to jim cramer and

pernod said let it be known that she had rebut the article. at that point i was working on the second day story because we had gotten wind before the fda had inspected this but i had not gotten confirmation. i was able to get confirmation the day it was published. i was on deadline with that. she cream on so i was standing over the shoulder and both stopped what we're doing and turned up the volume on the tv. to see what she would have to say. she played the role of the aggrieved startup silicon valley entrepreneur who is being attacked by a reporter in leak

with her competitors in this entrenched duopoly that is pulling my strings. then, cramer although a friendly interview does ask her about some of the allegations in the article. she proceeds to dodge and then that night, she flies back to palo alto to address what is beginning to be a growing crisis. my second story comes out that reveals the fda has done an inspection and has taken away the ability to use the blood file which meant that they could no longer do fingerstick testing. that evening or late afternoon she is together employees in the cafeteria around the headquarters in palo alto.

she gives a defined speech about how i am a biased reporter who is out to get her and that my reporting is heated by competitors and disgruntled employees and how she's going to take on the wall street journal and the wall street journal as a tabloid. and then sonny goes on and gives a defined speech as well. three months earlier, the fda had approved one of the fingerstick tests, this herpes test. it had been a big moment of victovictory and they celebraten the cafeteria and sonny had led the assembled employees in i'm not in an f you chant. they have been directed at quest and lab work.

now were back to two days after my first story, toward the end of sonny's speech one of the senior hardware engineers asks if he can leave them in another chant. everyone understands what they mean. sonny is happy to indulge in. they start chanting f you -- and so then about a week after that she came to our technology conference in laguna beach. a lot of people were wondering if she would come. she came with her security detail and she sat on stage and said through a half an hour interview with our technology editor, there is so much interest in the story at that

point that they lifestream did on the website. i cannot go out to california, so i watched it from the newsroom in new york. she told one lie after another. over the course of that half-hour. i suspected she would come out swinging and she would deny, but her willingness to lie in public, in front of an audience and really say things that were verifiably false, i thought it was stunning. so, the early weeks after the story the response was that the wall street journal is wrong and were fighting this and john kerry was a real reporter. >> i suggest when you read this book, so use your computer like

half an hour 45 minutes before you want to go to sleep, don't read the letter part of this book before you want to go to sleep. he gets to be a real page turner. i want to go to the audience questions because they have good ones. i won't be able to gets all of them but i will try to consolidate some things. one of them suggests that a lot of scams start office scams. but, this did not. this started off as a bona fide effort. >> rate. i fully believe that she did not drop out of stanford at 19 with a premeditated plan to defraud investors into put patients in harm's way. she dropped out as idealistic

young entrepreneur would be entrepreneur who really did want to follow in the footsteps of steve jobs. she had this cool idea i wanted to make it happen. she had this charisma and she raised a lot of money over the years. she made some progress building a device, never really got there and soon started overpromising and lying and exaggerating on the lies got bigger. over 12 years it became a giant i. >> so the show is intended to catch up. >> in her mind, her attitude was

that the end justifies the means. it's okay if i cut the corners until the lies because eventually i will get the technology to deliver on what i promise. it will work and then it will be a great advance for laboratory medicine. there will be for the good of society. >> when you see her interview, she is quite passionate about the long-term social benefit. >> and i think a large part of that is genuine. >> and the many people are curious about what is happened to the company now? >> so elizabeth's laid off another 800 please about a month and half ago, the headcount of the company is about down to 20 people. it's a shell of what it was. when i started digging into the company it had 800 employees. had a beautiful new headquarters on page mill road. they have long since abandoned

that pricey real estate. now that the 20 employees left are in a manufacturing facility across san francisco bay. the fcc has charged her and sonny with fraud. she settled the fraud charges without admitting or denying wrongdoing. she was find half a million dollars, relinquish most of her shares and controlling an interest in the company and agree to a ten year officer director van in the company. a lot of people feel that slight punishment given the magnitude of the wrongdoing. it's really a slap on the wrist. to those people, i say don't forget there's another investigation that's ongoing, criminal one spearheaded by the u.s. attorney's office in san francisco. i'm told that's pretty advanced.

and that criminal charges are very possible and even likely. in terms of the company the company probably has another two months before it runs out of money and then will be liquidated and ceased to exist by august. >> another overarching question that appears, what we learn from this? in the community, what have they learn from it? is everybody was affected by this. >> i think in recent years we have come to lionize these tech entrepreneurs, and they create these companies and become fabulously rich in his creations to impact our lives when we think about facebook and twitter. these are products we use everyday.

we tend to forget that these are young people, barely adults. she was 19 when she dropped out, basically a kid. with the amount of money gushed into silicon valley, in large part because the fed has kept interest rates at rock bottom for ten years so people were no longer able to get returns from traditional investments like bonds. that contributed in a big way to this enormous flow of money. people like elizabeth holmes and the young founders were able to dictate the terms and do what they wanted. and in this case, keep more than 99% of the voting rights. the board of directors couldn't reach a corm without her.

that was not a real board of directors. it had no power whatsoever. it's also given rise to the situation where the companies because they have access to money in the private markets and they put off going public for a long time. they're able to continue operating not in a transparent way, at least not as transparently as they would have to if the ipo and they suddenly it had to purdah earnings every quarter and annual reports and answer questions. >> impure review. >> another lesson is that she modeled herself after the traditional silicon valley. the silicon valley that started with the microprocessor in the 50s and 60s that became the personal computer industry. it is now essentially smart phone apps and companies like uber. that's not medicine an increasingly there's a convergence between traditional

tech and help. >> so increasingly there's going to be this convergence. i think this story is a cautionary tale to tech founders and everyone involved in this health tech space that you always have to remember that when you are building a device that's ultimately a medical device for medical decisions, your and customers the patient. you should always have the patient in mind. vaporware doesn't fly. >> the last question, because one of the lingering thoughts that she had which was really a shift in medicine is the retail

is asian of blood testing so that we could go and find out what her cholesterol was. is that going to occur? >> that wasn't necessarily a bad idea. one of the ironies of it is that safeway invested $350 million in remodeling the pharmacy section of his supermarkets. for years the areas have been empty. in the past couple of years they have reached a partnership with safeway and is offering blood tests to retail consumers. hopefully the results are more reliable.

palace who is. [applause] >> thank you very much. [applause] thank you. [inaudible conversations] [inaudible conversations]

bensinger -- this took place in los angeles. it is just over an hour. >> this book, which i read half of cannot be put down. one of the things that has been interesting to me is people calling saying you know i'm not really interested in soccer. should i read the book? soccer is of passing significance in this book. this is a true crime kind of story. a story about corruption, power and you'll see names that you are familiar with if you are reading newspapers today about what is