Summary:

"The real trade secret was that there was no secret."

Elizebeth Holmes—Founder of Theranos—raised billions of dollars in startup capital. The entire company failed to produce a functioning technology, putting customer's lives in danger and defrauding investors.

Tyler Schultz recounts his harrowing experience as a young graduate working in one of the Theranos labs. Insisting on doing the right thing, he blew the whistle on one of the biggest corporate frauds of all time. Along the way, he teaches us key lessons about having an ethical career and living an ethical life.

About Our Guest:

Tyler Shultz is the CEO of Flux Biosciences, a biotech firm. He graduated from Stanford with a Biology degree and entered the national scene when he blew the whistle at Theranos. Tyler complained to the public health regulators in New York and was a source for a series of Wall Street Journal articles exposing Theranos’ dubious blood-testing practices. Owing to his role in exposing the fraud.

Useful Links:

Thicker than Water is Tyler's Audible Original where he tells his story, first-hand. There's no better way to get his unique perspective on all that happened.

Bad Blood, this book features Tyler Schultz and the Theranos scandal. Penned by John Carreyrou, the original author of the Wall Street Journal articles,

“The Inventor” Alex Gibney’s HBO documentary

Flux Biosciences, Inc., Shultz is the CEO and Co-Founder of a bay-area start-up that aims to bring medical grade diagnostics into the homes of consumers.

Forbes name Tyler as “30 under 30” Health Care 2017 list.

CNN highlights tech ethics venture Ethics in Entrepreneurship

Wallstreet journal "Theranos Whistleblower Shook the Company - and His Family."

Pleasant Pictures Music

Join the Pleasant Pictures Music Club to get unlimited access to high-quality, royalty-free music for all of your projects. Use the discount code HOWTOHELP15 for 15% off your first year.

So, is she practicing now as a dentist?

Well, she's doing her residency in pediatric dentistry,

so it's a three year residency.

Wow.

That's awesome.

And she's in her last year of that just started her last year.

Yeah, I have all the admiration in the world for pediatric dentists,

because I think you're trying to get kids to do the hardest thing you can

get kids to do, which is sit perfectly still in an uncomfortable position and

subject them to add a discomfort and somehow do it in a way that makes them

feel happy and cheerful and appreciated.

It is.

It is so hard.

I could not do her job.

I don't know.

I just don't have the patience for it.

Yeah, I don't think I, I barely have the patience for my own kids.

Let alone for a bunch of other people's kids.

Hi, I'm Aaron Miller and this is How to Help a

podcast about having a life and career of meaning, virtue, and impact.

This is season one, episode four, Blowing the Whistle, how to help it's

sponsored by Merit Leadership home of the Business Ethics Field Guide.

The odds are very high, that you've had your blood drawn

at some point in your life.

I don't find it terribly uncomfortable, but my wife hates it to be clear.

She is a strong, confident woman who raised four boys.

Discomfort is not foreign to her, but for whatever reason, having

her blood drawn is too much.

I just asked her now to explain it.

And she was at a loss for the right words, after some groans and sighs.

She finally settled on tiny violence, which is perhaps the best description

of the experience that I've ever heard.

Of course, for many people having blood drawn is more than just a discomfort.

It's a constant difficult reality.

Easing that experience could improve the 400 million blood draws that

happen every year in the U S alone.

But that's just the beginning.

Also imagine being able to test blood a much smaller samples

with portable lab equipment.

Technology like that would change the world.

This was the exact vision of the company Theranos and its founder Elizabeth Holmes.

You've probably heard of her.

And has she raised a billion dollars in startup capital?

If so, you also heard how our entire company failed to produce a functioning

technology while she covered it by defrauding our customers and investors.

The Theranos story was told in the best-selling book, bad blood by John

Kerry Rue and in the HBO documentary, the Inventor who was also covered

in the popular podcast, the Dropout.

Holmes is currently facing criminal charges with the trial

to start in the coming months.

But for a small handful of whistleblowers Theranos might

still be defrauding investors.

And threatening the safety of its customers.

One of those whistleblowers is Tyler Schultz, who at the time was just a young

graduate working in one of the labs.

He's my guest today.

I'm excited share this interview with Tyler, where we talked about his harrowing

experience, blowing the whistle on one of the biggest corporate frauds of our time.

I first asked him to talk about the original vision of Theranos and why

the idea is still so compelling today.

So, yeah, just really quickly the vision was anything that a central

laboratory could do, you could do in a single drop of blood, and you could do

it in point of care settings, meaning you could get that information like

where you actually needed to have it.

So that could be in a battlefield for instance, or in a medevac helicopter or

perhaps in a, in a doctor's office or in an operating room or in a Walgreens,

or maybe even in your home one day.

So the power of that is just immense.

I think one of my, one of my favorites.

Tweets that I've seen recently was something that said, imagine if there

was a device that could diagnose 300 different diseases from a single drop

of blood, there are no such devices.

There are no such devices, I can't say.

Right.

But imagine right now in the middle of this pandemic, imagine if we had a

technology that you could put in Walgreens or in your home or bathroom, even where

you could go get tested for COVID-19.

And get the results within four hours.

Yeah.

Yeah.

And it's not just COVID right.

I mean, I know that there are a lot of blood tests that are used

for detecting cancer, obviously all kinds of communicable diseases.

It feels like having that really quick and efficient and hopefully

even also more inexpensive access to blood testing really could change.

Yeah.

Oh, it absolutely could.

I mean, yeah.

The first time that I met Elizabeth and she gave me this pitch.

I just immediately started coming up with ideas of different applications that

you could use for this different places.

You could put it.

And really once you open those doors, the opportunity is enormous.

This sounds amazing.

Doesn't it?

You can see why the vision being sold by Elizabeth Holmes was so energizing.

Why couldn't Theranos get it to work?

So what makes really hard is that there's some tests use

different ways of measuring things.

So you first have to have one product or one technology that is able to

measure things in different ways.

So for instance, the COVID, the active COVID test is a DNA based technology where

you're looking for the well, actually RNA.

From this virus, whereas the antibody tests, you're looking for antibodies

that your body develops against the virus and you measure those two

things in very, very different ways.

So part of the problem that Theranos had was trying to combine these different

assay types all into one on box.

Just so you know, an assay is the medical term for a lab test.

Like the kind that Theranose was trying to do.

Here's where Tyler helps us understand why the technology was so unbelievably hard.

You had immunoassays, you had nucleic acid assays, you

had general chemistry assays.

And the specifics of those don't really matter to the average listener,

but essentially we're trying to do a whole bunch of different types

of things all at the same time.

And even within one of those groups, there's subgroups of

different ways to do things.

So there's competitive and, you know, essays and direct immunoassays

and sandwich immunoassays.

And then it comes down to having repeatability and at Theranos.

I think one of the biggest challenges we faced was repeatability.

And you just have a sequence of events that have to happen exactly the same way

every single time in order for you to get a result that is actually meaningful.

The idea was that the Theranose machine called the Edison who

be capable of all these different tests.

And in fact, this is what Elizabeth Holmes was telling the world

her machine could do, but that wasn't how it worked in reality.

So one of the things that I think isn't emphasized enough

is that the Theranos platform wasn't a standalone product.

So before we even put the sample into a Theranos, the device first, a human

would get this little nanotainer and we would put it in a centrifuge.

Then a human would go in with a pipette and try to take out a

very small amount of serum without disrupting the red blood cells.

Then a human would put it into a different nanotainer and put it inside

of this robotic device that then pipetted the sample out of the nanotainer

and into the Theranos cartridge.

And then someone would take that cartridge and put it into the Theranos device.

And then that, that Theranos device had all kinds of problems on its own

with temperature, with pieces of it literally falling off and getting stuck

in the gears, but there are tons of ways that human differences between humans

to humans could impact the results.

So one simple example would be.

You take a cartridge out of the refrigerator and you put it

directly into the Theranose product.

Well, that cartridge is still cold because it's, it just

came out of the refrigerator.

So some people started taking these things out and leaving them

out on the bench top for half an hour before they would use them.

So they would come to room temperature, but not everybody was doing that.

We just had kind of scientists thinking, Oh, I think that the temperature might

make a difference, so I'm going to let it warm up to room temperature.

And then some people started putting it in an oven that was heated to like 37 degrees

before they put it in the fairness device.

So we didn't really have very good like standard operating procedures

that everyone just followed to the T.

So there's just, you know, there's so many of these factors that you wouldn't ever,

that you wouldn't immediately think of that can impact the quality of a result.

So repeatability is tough.

And then, you know, just the dream of doing hundreds of things from a single

drop of blood is, is so difficult because every test is going to

require, you know, X amount of blood.

Right.

So then you end up having to dilute the blood, which means you have to have

a very sensitive technology in order to actually measure the thing you want to

measure after it's been diluted, or you try to truly measure all of those things

simultaneously without splitting it up into separate tests, but then you get

things like cross-reactivity problems that I don't really need to get into, but

yeah.

There's just a million ways for it to fail is the short answer.

Is there a million ways for something like this to fail and you have to make

sure that it works every single time.

So you have to just have a very controlled process.

And I don't think we ever, we didn't have the technology that

could enable us to do that.

And we didn't have the right processes in place.

I mean, maybe someday we'll have a machine like the size of

the Edison, but why not start with one or two common tests rather than

trying to do everything all at once?

I actually think that's a really great idea.

I think it is not a very good business model to think that you're

going to upend the entire laboratory diagnostic industry in one fell swoop.

And that's essentially what Theranos was trying to do, you know, Quest

or either Quest or Lab Corp.

I forget which one had a $9 billion evaluation.

And I'm pretty sure that's where that Theranos $9 billion valuation came from.

They, they said Quest is worth $9 billion and we're going

to put Quest out of business.

So now we are worth $9 billion.

So they were trying to do everything that those labs could

do and a single drop of blood.

And I think that that doing that is an impossible task in a better way

to go about it is to find one very specific market where you can make an

impact, find success in that market, show the technology works, learn

from it and then grow into the next market, and move much more slowly.

And this is exactly what Tyler's doing now after

leaving Theranos and once the legal threats went away, he co-founded a

company called Flux Bio-sciences.

The goal is to see through the same ideas behind Theranos, but with

better science focus and transparency.

Yeah.

So essentially after I left their notes, I went back to a professor that I had

at Stanford and I had just said, Hey, can I come start working in your lab?

And so I, I just, I just joined his lab.

I wasn't a student.

I was just there to do research, essentially.

They repurpose computer hard drive technology.

So magnets that usually flip up and down to store zeros and ones.

In a computer hard drive, we would instead use magnetically labeled antibodies would

bind to the surface of those sensors.

So they flipped based on a biological reaction rather than

from a computer read-write head.

And those sensors turned out to be extremely sensitive.

They were quantitative and they're really small, so you can fit

a lot of them in a small area.

So your multiplexable.

So all of a sudden it's starting to sound a lot, like.

Theranos where you can accurately, sensitively, quantitatively

measure a lot of things.

And when I joined the lab, we put a lot of effort into developing

the point of care version of this.

So being able to do all of those things in the place where you need the

information, so like a doctor's office.

Or at home or in a grocery store or something like that.

So I say that Elizabeth was so good at selling a vision that I'm still

sold on the vision and I'm still chasing after it, but just going

about it in a very different way.

And I think there are a few very key differences between Flux and Theranos.

One is that the professor who is my co-founder has been publishing papers

and filing patents on this technology for nearly 20 years and Elizabeth

didn't license, any IP from Stanford.

So she supposedly dropped out and then came up with this revolutionary

technology, somehow never published any peer reviewed papers on it.

So there was no third-party validation.

And then the other big difference is just, we're trying to find small markets

where we can make a big difference and then grow market by market.

So where are they starting?

What problem is important enough that also lines up with what this technology can do.

Flux has turned its attention to women who are trying to conceive.

We are initially planning on using these sensors to measure a panel

of female fertility hormones at home.

And we really liked this market because the tools that are available to women over

the counter are frankly not very good.

They're typically lines that appear or don't appear.

And so if you think about it, those manufacturers have to develop one test.

That is suppose one cutoff level where the line appears or doesn't appear.

That's supposedly works for every woman in the entire world.

And what we know about menstrual cycles, even cycle to cycle or woman to women, is

that the cycles have a lot of variation.

And because we're quantitative, we can actually see that very, those variations.

And because we can measure multiple things at the same time,

we can get a much better picture.

And we're initially specifically focusing on.

On measuring biomarkers that will let us know if a woman

is actually ovulating or not.

And it turns out that in ovulatory disorders is the leading cause

of female factor infertility.

And we think that we can help diagnose that much earlier

than what is current practice.

And I mean, it's a very frustrating process as well because people end up

having these ideas of having a very specific family timeline and it gets

completely disrupted because it turns out that having a baby is way harder than.

Then what your fifth grade teacher taught you when you first learned about

sex ed, that turns out to be a lot more difficult than that takes a lot more time.

And right now you're just supposed to try for a year before a fertility doctor will

really consider even running a blood test.

From our perspective, we, we believe that there are hormones

that you can measure even before you start trying to get pregnant.

That would let you know if, if you're going to have a high chance of success

or not, and potentially improve your chances of conceiving much earlier.

Starting a company in Silicon Valley has always

been about telling a good story.

That's what every startup founder does to an investors.

And that's what Elizabeth Holmes was especially good at doing.

There's now a well-known name for it, fake it till you make it.

It's obviously an idea that at best flirts with dishonesty and at worst embraces it.

What's your perspective on Silicon Valley culture generally as

it relates to ethics and transparency does fake it till you make it create

dangers, or is it just simple confidence?

Yeah, those are all really great questions.

So just first and foremost, I've met a lot of other startup founders and

I can't think of a single one where I thought this person is just trying

to take money from people for the sake of taking money from people.

So.

I, I don't think there are many startup founders that are really

out there to defraud people.

Yeah.

But like you did mention there is this fake it till you make it culture.

And I think the problem with fake it till you make it, is that for a

lot of tech companies, it actually actually worked, I think, and

you're promising a software product.

It's easier to say we have this feature.

When you don't quite have it yet, but you can be very confident that a smart

software engineer will be able to build it right with theranos it was very different

because she was saying, we have this feature that we can diagnose or measure

300 things from a single drop of blood, but that was so far away from reality.

So it was fake it till you make it, but it was just on a completely different scale.

Than what is typically seen in these smaller tech type startups.

So I don't know if that really answers your question, but I do

think that Elizabeth kind of took something that was part of the

Silicon Valley tech culture and just.

Took it way too far, this fake it till you make it was to the extent that

Theranos was offering tests that were, I don't know the exact number, but

somewhere around $2, you know, really cheap and we would get those samples

and we would just send it to UCSF.

And UCSF would charge us $300.

Oh my gosh.

To run that test.

And meanwhile, we're saying that we ran that test for $2 in our laboratory

on this revolutionary technology.

That's the business model.

It's a bad business model.

We were bleeding money and I kind of make this joke that it was socialized medicine.

Cause you had a bunch of billionaires who were paying for the blood

tests of people who walked in to the Theranos wellness centers.

Yeah.

Not knowing they were doing that, but they were doing it.

Yeah, without knowing it, they were, they were

funding socialized medicine.

That's great.

So Theranose, that is peak had 800 employees.

How did the lie endure for so long?

Surely there must have been signals that things weren't right.

I mean, looking back there were so many red flags that I didn't see.

Cause when I was an intern, I'd never worked with a Theranos device, so I didn't

have that kind of inside knowledge of what the technology was really capable

of, but there were other cultural, red flags that I should have seen.

And I think probably the biggest one was that I was working with people who

had senior scientists as their title.

Who had never seen the product they were working on.

They had never seen the Theranos product and they had been there for

years, where senior scientists and had actually no idea what the technology was.

That's a huge red flag to me, especially for a company that had,

that needs to have a scientific community in order to function, you

can't innovate without scientists being able to talk to each other without,

scientists even really knowing the end product that they're working on.

So the claim was, they just, they wanted to keep the trade secrets.

Um, you know, like a need to know basis and they just wanted to reduce

the potential for leaks getting out.

But then I remember there was one specific incident where the light

went out in the lab and the Theranose devices were behind these barricades.

So I could walk into the lab that had the Theranos that had a version

of this Edison device, but it was behind a 10 foot high barricade.

And it was kind of on the honor system that I was not supposed to

just like walk through this maze of barricades to find the Edison.

But I remember on one occasion, a light went out and so an electrician

comes in, he's escorted by security.

He puts up this 12 foot ladder climbs to the top, fixes the light bulb.

And I remember thinking.

That guy can definitely see the Edison device, but my manager

who's a senior scientist is not allowed to see that Theranos device.

So it kind of retrospectively, it gave me the feeling that the barricades

were there, not so much to prevent the trade secrets from getting out,

but they were there to prevent people from being able to connect to the

dots from within and the real trade secret was that there was no secret.

There was no technology.

So, and a lot of the scientific community was genuinely working really

hard to get these things to work.

There's kind of this cycle that you would see where someone would come in, they

would be totally sold on the vision.

They would be gung-ho.

They would work 14 hours a day.

They would try to get it to work.

They thought they could change the culture and they they'd just get beaten down,

beaten down, beaten down until they quit.

And.

That was just kind of like the cycle that, that you would see eventually

what happened to me and to Erica and to most of my colleagues.

Yeah.

Wow.

So that was what the culture was like inside the company.

But corporations are designed to have outside experts validate what's going on.

Boards of directors, creditors, customers, and regulators.

When those external checks fail.

Like with what happened at Enron, for example, that's when fraud can

go undetected, I asked Tyler how Theranos could keep up the facade

for so long after all, they even had Walgreens as a major customer

for a device that didn't even work.

How did they get away with it?

Well, so a lot of systems had to fail in order for fairness to work and.

I believe that they were engineered by Elizabeth so that they would fail.

And if you think about like an, a general company structured, there's a

lot of checks and balances in place.

You know, you have the executive team, you have board members, you have investors,

you have employees, you have media.

And all of those things existed at Theranos, but they were just, they were

just designed to not function the way that they were supposed to function.

So.

For instance on the board, you had my grandfather who is now 99 years old, and

he got a bunch of his friends who are also well into their eighties or nineties

who don't have backgrounds in medicine.

So they don't really know what they're being told.

And to be honest, they're a little bit past their prime and.

Then because they have such a fantastic board.

She's able to raise a bunch of money from investors who then point to the board and

say, Hey, look, she must be the real deal.

Otherwise, how could she have gotten that board?

And specifically, even she had Jim Maddis on her board, who was the soon to become.

The secretary of defense for the United States and on the Theranos

website, she made up a quote from him saying that they were using

this product in the battlefield.

So if you're an investor and you go, and Elizabeth tells you, we're using

this product in the battlefield in Iraq and Afghanistan and Jim Madison

is on the board, how are you going to do due diligence on that claim?

Who would you better ask?

Who is in a better position to know if that is true, then Jim Mattis, right?

No buddy.

So you don't question it.

You believe it, but the investors were also pretty negligent.

And I think one of the, one of the funnier facts of, of this

whole Theranos thing is that.

She was able to raise something like $900 million and not a single investor

ever saw an audited financial statement.

Oh my gosh.

I never heard that detail.

That's mind blowing.

Yeah, it is mindblowing.

I raised a million dollar seed round and I have investors who have asked

me for audited financial statements.

And she raised several orders of magnitude more than that.

And she was somehow able to talk her way around any kind of

verification and due diligence.

Then she also, they also had this partner, Walgreens and Walgreens

hired someone to go in and do due diligence on the technology before they.

You know, signed off on this big partnership deal.

And he went in there and they wouldn't show him the product.

So he went back to Walgreens and said, you should not do business with them,

but they had this fear of missing out and they ignored the expert that they hired

and they did business with them anyway.

So.

There was just something about her charisma, where she was able to get

people to do things completely blindly.

Nobody would get verification.

Nobody would do due diligence.

They would just believe her word.

And to me it started feeling like it was a cult following.

Like she was like, her word was like the word of God.

It's like, whatever she said was truth.

And you just believed it was, it was a faith.

It was.

It was a faith.

You just had to have faith and Elizabeth.

It's pretty notable that the board was just a bunch of old guys, right?

I mean, especially for a Silicon Valley company, like these days, there's a lot

more pressure for diversity inclusion, especially at leadership levels.

And so for a company of that size and notoriety, especially one run

by a woman, it's pretty crazy that there were no other women on the

board besides Elizabeth Holmes.

I mean, how do you think it might've been different if there had been

a couple of women on the board, along with all these old guys?

Well, I do think that women were much more skeptical of her

in general, and she did have this kind of like charisma around her.

And I think it works especially well on men and especially well on older

men where they just treated her more like a daughter than they did a CEO.

I tell this story in, in my audible, but Elizabeth 30th birthday party,

I listened to Henry Kissinger, read her a Limerick that he wrote

for her, where the punchline was.

You're not the next Steve jobs.

Steve jobs was an earlier you, so they were just acting like these.

Boys out on the school yard, just trying, they're just like vying for

the attention of the prettiest girl.

It felt like to me, rather than a board who would go in and, and

actually question things and represent the interests of the shareholders.

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I don't want to simply retell Tyler's story of blowing the whistle, because

it's already been told in better, more engaging ways than I ever could.

In fact, I strongly recommend you listen to the Tyler's audible

original called Thicker than Water.

We've linked to it in the show notes and it Tyler himself, or counselor

crazy experiences that he had with private investigators, stalking him,

even breaking into his own lawyer's car and having a showdown with Theranos

lawyers in his grandparents' living room.

You can also read all about this and bad blood.

The book by John Kerry Ru it has the makings of a Hollywood movie, which is in

the works by the way, and slated to star Jennifer Lawrence as Elizabeth Holmes.

But anyway, the short version of Tyler's story is that he tried to

raise concerns with Elizabeth and with his grandfather, George Shultz,

who is on the Theranos board Tyler's questions caused enough concerns

about his nosiness, that he was fired.

Then after leaving the company, he started communicating privately

withCarreyrou, who is writing an expose, the time for the wall street journal.

Eventually Theranos figured out tyler was a source for the article

and sent the lawyers after him.

One of them included David Boyce, the notoriously hard-nosed attorney, who

among other things held Harvey Weinstein, silence his accusers, as you can imagine,

this was an incredibly trying time.

Tyler's parents spent half a million dollars helping him with his legal

defense, but throughout the experience, he insisted on doing the right thing.

He was what any normal person would describe as courageous.

But when you hear Tyler talk about it, he doesn't think of himself that way.

On my last day, when I left Theranos, Sunny Bolani, the president

of the company described me as arrogant, ignorant, patronizing, and reckless, and

retrospectively, I think he was pretty spot on, on three out

of the four of those things.

I don't think I'm patronizing, but I think the other three things it

turned out to actually be true.

And I look back on what I was doing and I was totally arrogant.

I was totally ignorant.

I was totally reckless and

things just worked out really well for me.

I got super, super lucky in the end and, and it turns out that

that fairness was actually much worse than what I had even known.

You know, as soon as regulators start digging into things, they

find, they found all kinds of things that I had no idea existed.

So in a lot of ways, I, I think I just, I got,

really lucky, but I was very stubborn.

I stuck to my guns and ultimately what it came down to was I was not going to admit

that I was wrong when I knew I was right.

And I wasn't going to retract any kind of statement.

I wasn't going to do any of that when I knew I was right.

And when all these, you know, all this legal pressure came down on me,

they wanted me to sign affidavits.

And I'm not supposed to say exactly what was in a lot of those

affidavits, but I didn't sign them.

And my reasoning was I was not going to sign something under penalty of perjury.

That was not true.

And what they were asking me to say, I did not believe was true.

So in my mind, if I said what they wanted me to say, I would be committing perjury.

And so, yeah, I was just really stubborn.

You know, I also talk about this in, in the audible, but you know,

my parents sat me down and said, If you end up in a courtroom, a good

case scenario is we spent $2 million.

And when that is a good case scenario, they said, we will sell our house

to pay for your legal fees, but please do not make us do that.

Just sign whatever it is they want you to sign.

This is not your responsibility, but the Wall Street Journal handle it.

Let the FDA handle it.

Let CMS handle it.

Let the SCC handle it.

This is not your responsibility, you've done enough sign, whatever it

is, they want you to sign and move on.

And I just said, I'm not going to sign it because it's not true.

What they want me to say is not true.

Yeah.

I love that.

And I love the way you described that, because I think a lot of

courage looks like stubbornness and it looks like recklessness, but it's

based on a deeper core principle.

I think the way you described that illustrates how that looks

and the extreme circumstance.

Yeah, but at the same time, think of an alternate reality.

Okay.

Right.

I refuse to sign this thing.

They decide to Sue me.

They somehow show some data.

You know, look, we have some things that work I'm found guilty.

Maybe go to prison, end up with millions of dollars in legal fees.

My parents sell their house and that's kind of how the story ends and.

If he could look back and say, wow, before any of that happened, all you had to do

was sign your name on a piece of paper and you could've made all that go away.

And I think people see what I did as courageous, because it turned out so well.

Right.

But.

What I didn't quite realize was how badly Theranos had to

fail in order for me to win.

Once CMS and FDA and SCCgot in there, they just found an abundance

of evidence, so much evidence.

I would be worried if I were to go through this similar type of process

again, that if there weren't that strong abundance of evidence in my

favor that I would have ended up losing.

Simply because they had the firepower that I didn't have.

They had hundreds of millions of dollars to spend.

And I didn't, they had the number one corporate gun lawyer in America.

And I didn't.

And you just realize that the cards are so stacked against you.

And when you're a whistleblower that in order to come out on top, you

have to be right about things that you don't even know you're right.

About yet.

Even though everything worked out for Tyler,

does he have any regrets or things that he would have done differently?

Luckily, everything worked out well for me.

So I don't really have any regrets.

Like I don't look back on a decision and say, Oh man, that was a terrible decision.

If I had done things differently, things would have worked out better.

Luckily I have none of those, but there's a ton that I would have done differently.

Probably I would have done everything differently.

I think, I mean, what I would've done differently is number one, I would have

consulted with a lawyer before I even.

Left Theranos.

Well, while I was still working there, I wish I spoke to a lawyer who said, this

is what you can take out of Theranos.

This is who you can give it to in a way that's protected because there

are protected whistleblowing channels within the government that exists

that I just did not know about.

So I didn't use, so that's one thing I would have done differently.

But if I'm thinking about like a decision that I made, that I wish I had.

Done differently.

I can't really think of like, I don't really have any regrets.

People tend to think of blowing the whistle

as one big dramatic decision.

The kind that you'd see in a movie, but that's not how it usually works.

And it didn't work that way for Tyler ethical courage usually requires

dozens or hundreds of hard decisions.

Yeah.

That's exactly what it was, is just.

I never even really saw myself as a whistleblower.

I was really just reacting to situations as they came.

And I did the best I could with the information and the knowledge

that I had, and I trusted my gut, but there wasn't really a decision

point where I thought, okay, I'm going to blow the whistle on this.

It was so some of those kind of like slower cascading type events

were, you know, first I spoke to my grandfather about it, who

was on the board of directors.

Right.

Then I spoke directly to the company executives.

I also reached out to actually a government entity and lodged

a complaint about the way we did some kind of audit on us.

And unfortunately they essentially, what happened to that complaint is that they,

it got lost in the shuffle somehow.

So nothing ended up happening with it.

And then after that, the.

The big big step was to speak to the Wall Street Journal reporter John Carreyrou

and he initially contacted me on LinkedIn.

And I talked to my former manager at Theranos about it.

I talked to my parents about it.

They said, do not talk to him.

You know, it's great that he's looking into this, but stay out of it.

It's not your responsibility.

But I was just so curious about exactly what he knew, what the

angle of the story would be.

And it just, it bothered me to no end that she was on the cover of magazines,

that she was the next Steve Jobs that she was right on, you know, Obama's.

Board of innovators or whatever it was.

And I just knew that there was no there, there, and it just drove me insane.

And even though I knew it wouldn't be in my best interest to contact that

reporter, it was like trying to hold in a sneeze that was just going to come out.

It was, it was just, there was no way I could keep myself bottled up.

So I eventually contacted him and, and gave him.

Some information that he found to be very useful and his reporting.

And then kind of a very similar situation to that was when I decided

to go on the record because after the Wall Street Journal started publishing

articles about Theranos a year passes.

And my grandfather is still on the board.

Theranosis still in business and I feel like.

They're lawyers and Theranos is still pushing me around in a lot of ways.

And I just felt like I really needed to stand up for myself.

And this was another one of those instances where my parents just thought I

was out of my mind for, for trying to get more involved in this than I already was.

But I just, it was just like that sneeze that I couldn't hold in.

I just.

It was like a compulsion.

I just had to tell my story.

I had to tell the stories I had about their lawyers and trapping

me at my grandfather's house.

And I just felt like I had, I had so much ammunition against them and

they were still pushing me around.

And I just felt like, why am I the one who needs to be bullied into silence here?

I'm going to stand up for myself.

I don't really care what the consequences are.

I'm going to go.

I'm going to go fight.

I'm going to stand up for myself.

Yeah.

And had you not one wonders how much farther they would've made it

down the road before it all blew up and how much more damage could

have been done in the meantime.

And I think that's one of the things that's so important to appreciate

is that, you know, there are people who sometimes want to blow the

whistle out of anger or frustration.

Or whatever, and that's always going to be part of it, especially if

you're mistreated, but I think there's something else going on here too.

Right.

Which is that there were a lot of people like patients whose was threatened

because of what their nose was doing.

No, definitely.

I mean, that was really the impetus for when I first started

speaking up to my grandfather and to Elizabeth and Sunny and.

Yeah, the executives directly was because I did the validation studies

on a syphilis test, and I thought the data clearly showed that this syphilis

test did not work, but Theranos decided to launch it that you could walk into

Walgreens and get tested for syphilis.

And that just, that just scared me, frankly.

It scared me because I knew that we would be giving people incorrect diagnosis.

I just knew it because I saw the data and I saw what we were working

with and I knew people were going to be getting bad syphilis data.

And so that was really the first thing.

Well, maybe not the first thing, but that was the straw that broke

the camel's back for me where I thought, okay, I need to speak up.

And I thought it was a really clear.

Example where the bad practices that we had led to bad data and this product

should not be available for public use.

I thought it was just so clear.

I thought it was an argument that I could win maybe with the executive team and

maybe they would go, Oh, you're right.

You know, maybe we need to slow things down a little bit.

Backtrack try to do science the right way, but no, that's not what happened.

You know, it's fascinating that syphilis is an example, too.

So I teach at the Tuskegee syphilis study that was done in Mississippi, in

the thirties and forties, where they were telling them they were treating

them for syphilis when they weren't.

Yes.

And what's really scary about syphilis as a disease is when it enters it's

late in stage, it can be doing all kinds of nervous or organ damage or brain

damage in a way that's asymptomatic.

So if you get it there and those tests saying you're negative for

syphilis, but you actually have it.

Not only could you be potentially spreading it to other people, but it

could be wreaking havoc inside your body.

You wouldn't know until it's way too late.

Yes.

That is exactly what I was thinking.

Because with this disease, especially since.

We had that study where it's very clear what syphilis does,

if you don't treat it right.

It's one of those diseases where if you get a correct diagnosis and the test

says you're positive for syphilis and you catch it early and you get treatment,

it's really not that big of a deal.

It's really not.

Yeah.

But if you're told you don't have syphilis and you do, and you just let

it go untreated, it can wreak havoc.

And it can kill you eventually.

And of course you can also spread it to other people.

So that was why I was terrified because the stakes just seemed really high.

And at that time, I think we were only offering seven tests that

were actually run on the Theranos platform and everything else

we were sending out to labs or running them on third-party equipment

in our own, in our own labs.

So syphilis just seemed.

No, it was, it would have been like the eighth thing.

And to me it felt like the stakes were just way too high for that one to be

kinda messing around with people's health

Blowing the whistle against a huge

well-resourced company is not the kind of thing you want to do alone.

Who are the people who help make the experience easier for Tyler?

Yeah.

My parents were awesome.

They supported me no matter what, no matter how strongly they disagreed

with me, they always supported me.

Which is not easy to do as a parent.

So I really appreciate that from them.

I could openly talk about the problems that I was seeing with some of the senior

scientists and they would, they would say, yes, we see the exact same problem.

You're not crazy.

This, this is not good scientific method.

This product is not working.

So I was able to get a lot of validation by talking to people

who had a lot more experience and who were a lot smarter than I was.

And then kind of, as I was going through the whistleblowing

experience, I th I had two friends who, who I was really close with.

And I, I, again, I didn't tell them anything about what was going on, but

they could tell I was very stressed.

And so they, we, we just hung out.

Probably like four or five days a week and we would play music together

and I just love playing music.

So we would just sit around the living room, I'd play

guitar and we'd sing together.

And that was the best stress relief that I could have possibly asked for.

So those little jam nights definitely helped me get through.

Are there any lingering burdens for Tyler from

his time at Theranos after all, he still has a whole life ahead of him.

I would say the only lingering thing is the trial and I just really want

it to be done with it just keeps getting pushed, keeps getting pushed, and I just

want it to happen and for it to be over.

And then really just finally get closure on this.

I really just want it to be over because I first met Elizabeth when I was 19

years old and I turned 30 in November.

So this has been, this has been my life for a long time.

It has completely consumed by twenties.

And I just want that book to close.

And then my thirties, we'll just start a whole new chapter and

hopefully my thirties will be better.

That new chapter for Tyler.

It's very exciting.

Flux bio-science has an opportunity to help a lot of people.

I asked him if his time at Theranose has influenced how he's running flux.

I think the biggest difference is making sure that there's a culture

where everyone knows that it's okay to disagree with each other.

And at Theranos you were just not allowed to disagree with.

With this idea that the product was revolutionizing the world.

Like you just couldn't disagree with that.

You, it was like you, you weren't allowed to acknowledge bad data.

You weren't allowed to, you know, if you can't acknowledge that things aren't

working, then you can't improve them.

And at my company, I just want to make sure that everyone is comfortable voicing

concerns over either the way things are done or their interpretation of data

and we have arguments all the time.

And I think it's actually really healthy because of it means we're

communicating and we can have arguments.

Luckily in science you can actually oftentimes design and experiment and then

figure out what was actually happening.

And maybe I was saying that A is happening and my coworker

was saying B was happening.

But then we run an experiment to see what was actually happening.

It turns out neither of us were right.

And it was something else that we hadn't thought of before.

So I think the biggest thing is just having a culture where people

are allowed to disagree and that there's a healthy way to express it.

And to resolve it.

You can tell the Tyler's going to continue to make a big

impact on the world here at the end of the interview, listen to how clearly he

sees what needs to come next for him.

He's taken the original noble vision of Theranos and is

seeing it through for real well.

I, I hope that we're able to put a flux product into someone's home.

So I, I want to be able to just get to that point, you know, I will, I think that

there's a lot of success in that because there's so much work that has to happen

in order for that to actually take place.

And whether that happens as, you know, as we're our own entity or for

acquired and whoever we're acquired by ends up putting it in someone's

home, either of those paths is great.

I just hope that we are able to.

Actually put this diagnostic product in someone's home.

I think that would just be a huge milestone for, for

diagnostics and for science.

I hope that none of you ever have to blow the whistle

and take the risks that Tyler did, but the odds are very good that

you will have to stand up for.

What's right.

From time to time, there are some great lessons to learn from Tyler's experience.

You'll have more success.

For example, if you do your research and get an outside perspective,

have good people in your corner

who can give you courage and help you feel supported?

Finally standing up for what's right.

Might mean you're called arrogant, ignorant, or any other accusations,

like the ones that were hurled at Tyler, but that doesn't mean you're

wrong because of Tyler and the other brave people at Theranos like, Erica

Chung, a lot more harm was averted.

Hopefully Tyler's experience will help you trust that you can have the same

courage that he did when it mattered most.

Many thanks to my guest, Tyler Schultz.

He's so friendly and fun to talk to.

I look forward to seeing the big difference that he will

continue to make in the world.

Be sure to check out his audible original called Thicker than Water.

It has 4.7 stars and thousands of positive reviews.

You can find it@audible.com.

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Be sure to join me in the next episode, when I talk with chaplain George , he's

the former command chaplain of the U S special operations command and also the

former chaplain for the joint chief.

He's also a six foot eight former Greenbrae.

And he's going to be talking about characters, service, and sacrifice.

And the role of chaplains in the U S military, we're grateful as always

to Merit Leadership who sponsors this podcast and to our production team, which

included Cindy hall, Travis Stevenson, yours truly, and Eric Robertson,

who did the editing and the music.

Our music comes from the pleasant pictures, music club.

If you want to use their music in your projects, you can find a link

and a discount code in our show notes.

Finally, as always.

Thank you so much for listening.

I am Aaron Miller and this has been how to help.