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Tyler Shultz: Truth and Consequences from the Theranos Whistleblower — Transcript

by Guy Kawasaki · 7,776 words · 1,198 segments · language en · Watch on YouTube

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0:00listeners of the remarkable people
0:01podcast will learn from some of the most
0:04successful people in the world they
0:06provide practical tips and inspiring
0:08stories that will help you be more
0:10remarkable if you live in the U.S or
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0:19episode
0:21[Music]
0:27I'm guy Kawasaki and this is remarkable
0:31people we're on a mission to make you
0:34remarkable helping me in this episode is
0:37Tyler Schultz saying that Tyler is
0:39remarkably Brave is an understatement he
0:43was The Whistleblower in the terranos
0:45debacle that led to the conviction of
0:47Elizabeth Holmes
0:49someone is truly remarkable when they
0:51aren't afraid to speak up especially
0:54when it means they will pay a big price
0:56in this case big price means upending
0:59your relationship with your grandfather
1:01incurring five hundred thousand dollars
1:03in legal fees occupying approximately 10
1:07years of your life and being harassed by
1:09the terranos team his grandfather by the
1:13way was George Schultz George is a
1:15former secretary of state Secretary of
1:18Labor Secretary of the Treasury and
1:20director of The Office of Management and
1:23budget
1:24this interview starts with the night
1:25that George asked Tyler if he had talked
1:28to the Wall Street Journal
1:30strictly John Kerry rule the author of
1:33Bad Blood secrets and lies in a Silicon
1:36Valley startup if you search for Tyler's
1:39name in the book it appears
1:41approximately 200 times
1:43Tyler studied biology at Stanford
1:46University and was a summer intern at
1:48ternos after his junior year he later
1:51became a full-time employee he worked as
1:54a research engineer for eight months
1:56before revealing the scam
1:58today Tyler is the co-founder of the
2:01healthier company this company enables
2:03consumers to take charge of their health
2:05through early identification of issues
2:07it provides valuable Health insights and
2:11actionable interventions Tyler received
2:13the James Madison Freedom of Information
2:15award along with being placed on the
2:18Forbes 30 under 30 health care list
2:21I'm guy Kawasaki this is remarkable
2:24people and now prepare to hear a
2:27remarkable
2:28arguably depressing story about Silicon
2:32Valley startups here is the remarkable
2:35Tyler Schultz
2:41[Music]
2:43hold your grandfather that you had
2:45talked to the Wall Street Journal when
2:47he first asked you
2:50How would
2:52things have changed yeah that is a
2:55really interesting thought experiment
2:57and I actually was debating whether I
3:00should tell him the truth from the
3:01get-go and I actually I I discussed this
3:04with one of my housemates I was living
3:06with I basically said I'm going to go
3:07over to my grandfather's house and I was
3:09panicking and he said well what are you
3:11going to tell him and I said I'm going
3:12to tell him the truth because I've
3:14always told the truth and I felt like if
3:16I continue to tell the truth that things
3:17would work out for me and he just said
3:20dude you should definitely lie and his
3:24real his reasoning was that I really
3:25didn't know it was at stake and I should
3:27really go over and I should collect as
3:29much information as I could before I
3:31decided to tell the truth and I could
3:32decide to tell the truth at any point if
3:34I wanted to
3:35but first I should just gather
3:37information and make sure that was the
3:39right decision
3:40and I think looking back that was really
3:42good advice and had I gone over to my
3:45grandfather's house and told him right
3:47out of the gates yes I've been speaking
3:48to a Wall Street Journal reporter there
3:51were theranos lawyers in the room right
3:53up the stairs and they would have come
3:55down and they would have they were
3:57ruthless lawyers and they would have
4:00definitely been able to pressure me into
4:02signing their affidavits and
4:04I would have been backed into a corner
4:06that I wouldn't have been able to get
4:07out of so in this situation I think it
4:09was the right decision to lie I told
4:11them that I had not spoken in the Wall
4:12Street Journal when I had
4:14and really that bought me some time to
4:17to get my own lawyers
4:20when you say that would have backed you
4:23into a corner but you were still telling
4:27the truth about what was going at Terra
4:30no so it's not like you were covering
4:32something up so what corner would they
4:34have you in that you violated your NDA
4:36yeah they would have said that I
4:38violated my NDA that I was giving away
4:40Trade Secrets they believed that those
4:42trade secrets were worth literally
4:43billions of dollars I think it just
4:45would have been harder for me to get out
4:47of that specific encounter with the
4:50lawyers in my grandfather's living room
4:52and at that time I had no legal counsel
4:54and I had no idea what I was doing and
4:57so I think it was just a lot easier to
4:59just say no I haven't spoken to them I
5:00don't know why you think I've spoken The
5:01Wall Street Journal but I haven't yeah
5:04so I think things really worked out I
5:06got a little lucky not gonna lie
5:09okay
5:12her team two to you what did they try to
5:15do to you they tried to do a number of
5:17things so one they wanted me to feel
5:19like I was the crazy one they said that
5:21like 80 percent of what the Wall Street
5:23Journal had only came from me and me
5:26alone that there were no other sources
5:29that once the Wall Street Journal
5:31published their article that my career
5:33would be over that I would never get a
5:34job ever again
5:36they tried to run me out of money we
5:39were in an intense legal battle I ended
5:42up spending around five hundred thousand
5:43dollars in legal fees their goal was
5:46just to completely deplete my resources
5:50and my parents resources they had
5:52private investigators following me and
5:55my family and my legal team
5:57and at one point I realized that the
6:01point of the private investigators
6:02wasn't to actually see where I was going
6:05who I was having lunch with any of that
6:07the goal of the private investigators
6:09was to scare me they didn't really try
6:11to hide it like I I met with the Wall
6:13Street Journal reporter once and the
6:16theranos lawyers let me know like in the
6:18next two days that they were aware that
6:20I was meeting with the Wall Street
6:21Journal reporter again
6:23and so you know they weren't trying to
6:25hide the fact that they were following
6:26me and then actually in the trial being
6:29able to actually see the checks written
6:30to the private investigators made it
6:33even more real
6:35it was definitely a a scary it was
6:39definitely a dark time
6:40and your father at Elizabeth home
6:43sentencing said that you were sleeping
6:46with a knife I mean you were like afraid
6:49for your well-being
6:51yeah I was actually so there was one
6:55specific instance where my parents met
6:58with a lawyer I had my own lawyers and
7:01and we decided it made sense for my
7:04parents to get lawyers as well and so
7:06they met with their lawyer for the first
7:07time they exchanged notes and documents
7:10and things like that and then after the
7:12meeting their lawyer went to a wedding
7:15and during the wedding someone broke
7:16into her car and stole her briefcase
7:18that had all those notes and documents
7:20and
7:23it's totally possible that that's a
7:25complete coincidence it's very likely
7:27that that's a complete coincidence even
7:29but when you know you're being followed
7:31and when you know
7:33how
7:35how scary these people are how powerful
7:37these people are how much money these
7:39people have what's at stake for them it
7:42it seriously makes you question where
7:44the line is
7:45and I didn't know where the line was for
7:46them and I thought it's totally possible
7:49that they'll try to just knock me off
7:51and there were times when
7:54in the middle of the night I would hear
7:55rustling outside my window and my heart
7:58rate would just Skyrocket and I thought
8:00I would literally think tonight's the
8:02night that Sonny whacks me and
8:05so it didn't provide a whole lot of
8:07comfort but I did sleep with a knife
8:08just on the other side of
8:11um you know right under my mattress
8:13[Music]
8:14wow I also carried pepper spray with me
8:17for a long time
8:35what was the rationale they're going to
8:38scare you into recanting to lying for
8:40their side
8:42give them more you know crap about the
8:45Wall Street Journal they can use against
8:46the journal like what what was the point
8:48of trying to intimidate you
8:50yeah so they weren't necessarily trying
8:53to convince me that the Thanos
8:55technology really was everything that
8:57they said it was they were just trying
8:59to convince me to back out of
9:02being a source for the Wall Street
9:04Journal
9:05that's all they wanted out of me they
9:07were like we're gonna bully this kid
9:08we're gonna scare this kid until he just
9:09shuts up
9:12and I wouldn't do it
9:16and and now you know after her
9:18sentencing
9:20a week from Sunny sentencing do you feel
9:23safe I mean is this part of the
9:25nightmare over
9:27yeah definitely I have not feared for my
9:30safety for a long long time
9:32can you tell us generally what happens
9:34after you blow the whistle in something
9:36like this what happens to the
9:37Whistleblower
9:39in my experience when you blow the
9:41whistle on something like this you're
9:43bullied and intimidated and threatened
9:45and sued or threatened to be sued
9:48it's just a long
9:50it's a really long ordeal I met I first
9:54met Elizabeth when I was 20 years old
9:56and I'm 32 years old now
9:58so this Saga has consumed my entire
10:02adult life up up to this point I don't I
10:05don't even know how to begin answering
10:06that question it's just a long painful
10:08ordeal
10:10so with hindsight
10:12would you do it again
10:14yeah well
10:17I think I would do it again I if I would
10:19do it very differently I hope that if I
10:22were to go through this again that I
10:24would have learned a lot from the first
10:25go around
10:26but it's it's an interesting question
10:28because when people first started asking
10:30me that question when I was 26 years old
10:33shortly after or while I was still
10:36really in it my answer was no way I
10:39would never do this again it was totally
10:41not worth it
10:43and as more and more time has passed
10:48I think I'm starting to see more the
10:52positives that have come out of it and
10:54now that the threats are totally gone
10:57and I really have been able to turn this
10:59really terrible negative experience into
11:02a positive experience so finally at this
11:04point in my life I'm starting to say yes
11:06I would do it again you know it was
11:08worth it things also really worked out
11:10for me I got extremely lucky yeah so at
11:12this point I'd say I'd do it again
11:15what factors
11:17make you now think you would do it again
11:20I mean what was the positive that came
11:22out of this
11:23one I've been totally Vindicated by the
11:26FDA CMS SEC and now with these criminal
11:30trials by the Department of Justice and
11:33that ultimate form of vindication
11:36took a long time to come like I said I'm
11:3832 years old now but did finally come
11:41all those threats I think are now
11:43mitigated
11:46um and I speak to tons of universities
11:50and classes and at conferences and
11:54I really get a lot out of those types of
11:56events like I'm always having people
11:58coming up to me afterwards saying you
12:01know I was in a very similar situation
12:02and your story inspired me to do the
12:05right thing
12:06and that means a lot to me it really
12:07does and so now I really do see the
12:11the positive impact that my story has
12:13had and
12:15I wouldn't go back in time and not do
12:18all these things to
12:20spare myself some some money and
12:22emotional damage I at this point I'd say
12:24it was worth it
12:26if you were writing a book called
12:29whistleblowing for dummies what would
12:31your advice be for a potential
12:33whistleblower
12:34piece of advice number one would be get
12:36a lawyer
12:38easily and then do what your lawyer
12:41tells you to do
12:43if I could redo one thing it would have
12:46been I wish I had gotten a lawyer while
12:48I still worked at theranos because there
12:51are ways to blow the whistle a lot more
12:54responsibly than what I did like there
12:56are protected government whistleblowing
12:58channels that you can go to
13:00I actually tried to go through one of
13:02those whistleblowing channels initially
13:04and unfortunately my complaint seemed to
13:07have gotten kind of lost in the shuffle
13:08but I wish I had a lawyer who could have
13:11really advocated for me like when I when
13:13I I reached out to
13:16um
13:16it's called the laboratory investigative
13:18unit it's part of the center for
13:20Medicare and Medicaid services and
13:23I use a fake email and a fake name I was
13:26trying to be completely anonymous
13:28because I was just terrified and really
13:30what I I needed a lawyer to say look you
13:33have the right to do this and not only
13:35should you use your real name but we're
13:37going to advocate for you and we're
13:38going to make sure that this complaint
13:39is heard and we're not only going to go
13:41to CMS but we can go to the SEC there's
13:44a lot that a lawyer could have done to
13:46help me
13:47so right now you're in the bio assay
13:50testing kind of right yeah I'm still in
13:53the diagnostic business for better or
13:55worse
13:57when you're out there
14:01out there do you find you have to dig
14:03yourself out of a hole because you're
14:04you know you're tainted with teradose
14:06and you're the terranos Whistleblower or
14:09do people just say wow you got a lot of
14:11cred we can really trust you it's an
14:13interesting question so actually flux is
14:16will soon no longer be a company
14:17unfortunately we had a really amazing
14:21diagnostic technology that used like old
14:24computer hard drive Tech where you have
14:26magnets that flip up and down to store
14:27zeros and ones and instead you have a
14:30biological reaction flip those magnets
14:32so it was very sensitive easily
14:35multiplexable you could use it in point
14:36of care settings the technology itself
14:38was really incredible
14:40and unfortunately I really struggled to
14:43fundraise and ultimately I had to make
14:47like finally make the decision to move
14:49on and it's it was a tough decision to
14:51make because I had been working with
14:53this technology for about six years
14:55I think that overall Venture capitalists
14:58probably trusted me more than your
15:01average entrepreneur especially in the
15:02diagnostic space
15:05but I also think that there are some
15:07people who are really good at raising
15:08money and I'm definitely not one of
15:11those people it's possible that I'm
15:12overly honest I'm too practical and I've
15:15I've been told directly to my face I
15:17need to be more like Elizabeth Holmes
15:18because I'm not very I know I've heard
15:22it many times believe me I'm not a
15:25really good sales person I'm not good at
15:27showing the big Vision I was really good
15:29at talking about what our technology is
15:31what we've accomplished the papers that
15:32have been published the data that we
15:34have and the one thing I couldn't do was
15:37really pitch investors on this huge you
15:40know multi-billion dollar opportunity
15:43and it was really sad because I felt
15:45like I found a technology that could
15:46actually do the things that Elizabeth
15:48was claiming and I thought the business
15:50would basically sell itself and that was
15:52definitely not the case Diagnostics is a
15:55brutally brutally tough business and
15:58it's one where investors have lost a lot
16:02of money over the years it's really
16:03Capital intensive there haven't been a
16:05whole lot of winners
16:07so it's a tough space to raise money in
16:09but interestingly so even though flux is
16:12winding down I actually did co-found
16:14another company
16:15called healthier and with healthier
16:18we're taking a completely different
16:20approach where we're actually using the
16:22same technology that's in central
16:24Laboratories but we're using a
16:27collection device that allows people to
16:28prick their finger and collect the
16:29sample at home and then put it in the
16:31mail and ship it to the lab and I think
16:34it's actually a really practical and
16:36responsible and ethical way to kind of
16:38achieve that same vision that theranos
16:40was going for
16:42and I would say we're even taking it one
16:44step further because we're not in a
16:46Walgreens you can actually do the
16:47collection at home
16:48you know Elizabeth always talked about
16:50these Diagnostics being actionable
16:52information
16:53and for us when you get a result on your
16:56portal right next to your result there's
16:59a button where you can click to schedule
17:01a Telehealth console and you can discuss
17:02your results with a physician who can
17:04either order follow-up tests or say it
17:07looks like you're pre-diabetic or you
17:09have high cholesterol I'm going to
17:10prescribe you some metformin or statins
17:12which are really cheap and effective
17:14medications that can potentially save
17:16people's lives
17:17so long story short still chasing the
17:20vision I think it's a really good Vision
17:22I think there's a much better way to
17:25achieve it
17:26I've been in Silicon Valley for I don't
17:29know 40 50 years and what I've noticed
17:33is that it doesn't matter how many times
17:35you fail all that matters is you succeed
17:39once and then everybody forgets the
17:42failures yeah thanks I appreciate that I
17:45I do feel like I've experienced a lot of
17:46failure thus far in my career like
17:48Thanos was a disastrous flaming ball of
17:51a failure and then flux I think Flex was
17:55a more elegant failure and I even had
17:59some of my investors who I spoke to as
18:01flux was dying out
18:03and they said you know you actually did
18:04the things that you said you were going
18:06to do when you raised the seed round and
18:08now investors aren't really buying the
18:10story you're you're selling and we would
18:12love to back you again if the
18:13opportunity comes up so
18:15I feel like overall it's always sad when
18:18something like that dies but it's best
18:20to just fold when it makes sense and to
18:23not go down the path that Elizabeth did
18:25where
18:26failure was not an option for Elizabeth
18:28and so she did anything she could
18:30possibly do to not fail and that
18:32ultimately led to a massive fraud
18:35one simplistic way of looking at it is
18:39you just saved 11 and a quarter years of
18:42your life by having that moral High
18:44ground but
18:46I digress
18:48um yeah so I I am curious
18:51because one of the things that is most
18:55I don't know confusing to me
18:58are the two people William Frist and
19:02William fogy or fogy whatever so I mean
19:06these guys are like heart and lung
19:08transplant surgeon and former director
19:11of CDC and like how do those kind of
19:15people get snookered I mean I can see
19:17Henry Kissinger he's like trying to
19:19figure out Yeltsin and Gorbachev and
19:21George Schultz is dealing with George W
19:24bush but these guys are in the business
19:27how do they not see
19:30it was just a house of cards
19:33it's a really good question because
19:36I would say it wasn't that hard to see
19:38that's the weird thing about this fraud
19:40is that
19:41it really didn't take
19:43a whole lot of special education or
19:47inside knowledge if you roughly had an
19:50idea of what you were looking at you
19:52could look at it and say this there's no
19:55way that this can achieve the things
19:56that Elizabeth is saying it was really
19:58obvious
20:00I think the problem with those people
20:04with their board specifically is that
20:06they wanted it so badly to be true so
20:09badly I think we all wanted it to be
20:11true she had a very compelling story she
20:13dropped out of Stanford when she was 19
20:14years old she was the next Steve Jobs
20:16she wore the black turtlenecks
20:19she was the youngest self-made female
20:21billionaire
20:24and she was doing well by doing good and
20:28it was just it was a story we all wanted
20:30to believe and I think a lot of those
20:32men they wanted to believe the story but
20:34then
20:35they also
20:36were just infatuated by Elizabeth and
20:39she had this personality that is able to
20:42just suck people in
20:43and she was just incredibly good at it
20:46she knew exactly how to
20:49how to I don't know like exploit
20:53exploit like weaknesses in people's
20:56personalities and she was able to suck
20:58them in and on top of that I think the
21:00board was also overly compensated and
21:03they wanted to become enormously hugely
21:07wealthy
21:08so I think there are a lot of factors
21:10that play I think it's human nature but
21:12it is human nature on steroids in
21:15Silicon Valley which is this dependence
21:18on proxies which I think at the root is
21:22because of laziness and by this I mean
21:24you know well Henry's in it and George
21:28is in it so it must be real and then
21:30they got this guy from the CDC and then
21:33the former secretary of education is in
21:36it and the military guys in it so all
21:39these smart people are in it so it must
21:41be good that's the due diligence where
21:44do I send the money I think that's
21:47exactly right there was this enormous
21:48transfer of credibility that started
21:50with the dean of chemical engineering at
21:52Stanford where he joined theranos and
21:55then because he joined Elizabeth was
21:57able to bring my grandfather in and then
21:59once my grandfather was in they brought
22:01in the Frist and Henry Kissinger and Jim
22:06Mattis and the list goes on and on they
22:09had former secretaries of State former
22:11secretaries of defense Senators it was
22:14really astounding and as an investor
22:18yeah that means a lot especially when
22:20you have someone like Jim Mattis on the
22:22board who was about to become the
22:25secretary of defense he's a four-star
22:26general and
22:29on theranos's website they said that
22:31these devices were currently being used
22:34in Afghanistan in battlefields and there
22:37was a quote attributed to Jim Mattis on
22:39the theranos webpage that said this and
22:43so if you're an investor doing diligence
22:45who better in the world could vet that
22:48statement than Jim Mattis and he's on
22:49the board so of course you're going to
22:51believe it
22:52these lies were just so big that they
22:55were almost unquestionable one of the
22:57craziest things is that that came out is
22:59the SEC found an instance where
23:02Elizabeth was telling a prospective
23:04investor that their revenue the previous
23:06year was 100 million dollars
23:08in reality their revenue the previous
23:10year was a hundred thousand dollars
23:13that's not
23:15a rounding error that's not wishful
23:16thinking that is just a 1000 x
23:20misstatement of your Revenue
23:23someone says you know my revenue is 100
23:25million dollars you think okay maybe
23:26it's like 90 million
23:28you don't think it's a hundred thousand
23:31this may be perverse Logic on my side
23:34but
23:35having seen what happened with your
23:38grandfather and Mattis and Kissinger and
23:42all that
23:43does it ever make you take pause and you
23:46think okay so
23:47the secretary of state Secretary of
23:50Defense Senator is saying there's
23:52weapons of mass destruction we gotta go
23:54invade Iraq if they're so gullible about
23:57terranos how do we know there's really
23:59weapons of mass destruction or the
24:01Russians are going to invade Ukraine why
24:04would you believe them when they say
24:06anything or is it the case that you can
24:09believe them on that kind of stuff but
24:11when it comes to biotech they're just
24:14out of their Lane so just ignore what
24:16they say
24:18Oh I thought the exact same thing
24:20believe me like
24:23you know seeing Jim that is basically
24:25get manipulated by this young blonde
24:28woman and then he becomes this the
24:29Secretary of Defense that kind of that
24:31scared me it's like this the safety of
24:34our country is in this man's hand and
24:37I've I've seen
24:39firsthand how manipulable he is it's
24:43terrifying but I do think you touched on
24:45something that's important where a lot
24:46of these men were very smart and very
24:48accomplished in their field but they
24:50just didn't know what they were looking
24:51at when it came to a medical device and
24:54my grandfather basically told me exactly
24:56that once he said I'm over 90 years old
24:59I fought in a World War I negotiated the
25:01end of the Cold War I've seen a lot in
25:03my lifetime I know what I'm looking at
25:05and I know this is real
25:07and it's a hard argument to to argue
25:10against it's like yeah everything you
25:11just said is true
25:12still does not mean that you're right
25:14but I can tell that you're not gonna
25:16listen to me so it's makes for a very
25:19unproductive conversation
25:21I've heard multiple versions of this
25:25the answer to this question which is
25:28you did or you didn't reconcile with him
25:30before he passed away
25:32I think the reason you've heard
25:34conflicting
25:36reports is that it is a little ambiguous
25:40and so depending on who I'm talking to
25:42they kind of take the ambiguity and and
25:44choose to go One Direction or the other
25:46with it
25:47so the way things ended with my
25:49grandfather he never apologized for
25:51anything he didn't recognize his role in
25:53this
25:54but he did finally say that I was right
25:57which means a lot so he did recognize
25:59that I was right
26:01and he actually ultimately told me a
26:04story where he saw where Elizabeth was
26:06lying and in an instance where I didn't
26:09have to directly tell him and pry his
26:11eyelids open
26:12so I think he finally did come around
26:14and believe you know he started
26:16believing me but
26:18I first came to him with my concerns in
26:2020
26:212013 2014 and then I was getting
26:25threatened with lawsuits in 2015.
26:28and he didn't really come around till
26:32late 2018
26:332019.
26:35and then he passed away shortly later so
26:37it really wasn't by the time he came
26:39around it really wasn't helpful and he
26:41fell pretty far short of apologizing and
26:44actually making things right
26:46so it's wow it's pretty ambiguous so I
26:49don't know how you how you want to take
26:51it
26:51so now that
26:53you're involved first with flock and now
26:56healthier is that the right name
26:57healthier yeah healthier spelled with a
26:59y r so healthy so now now you're sort of
27:03in a management position
27:06have you figured out you know how do you
27:08deal with this sort of dichotomy of
27:12nay saying negativity pessimism versus
27:18honest feedback that we need to take
27:20into account and fix so you you don't
27:22want somebody who is just a total Downer
27:24in your company on the other hand you
27:26need to hear that the technology doesn't
27:29work so what's the advice to a CEO
27:33I mean you're you're exactly right you
27:35need to have a balance and I think it's
27:37important to have balanced people and I
27:39think it's important to have
27:41different people on your team to help
27:43create that balance and it's funny that
27:46you say that because
27:47like I said before I've I've experienced
27:50a lot of failure thus far in my career
27:52I've experienced a lot of positive
27:53things a lot of growing opportunities
27:55for sure but I haven't had that big win
27:57yet but when I look at things I the
28:00first thing I see is the thousand ways
28:02that it fails you know I have I'm always
28:05looking out for how is this not gonna
28:07work and how can we get ahead of it and
28:10I think it's important to balance out
28:12that type of attitude with the attitude
28:14of we're going to make this work like no
28:17matter what happens this is going to
28:18work we're going to push through
28:20everything we're gonna we're gonna be
28:22the ones that make this happen and I
28:24think that I'm not the CEO of healthier
28:26and I do think that the CEO of healthier
28:28her name's Stacy so I think Stacy and I
28:30have personalities that kind of balance
28:32each other out a little bit and she'll
28:33make fun of me and call me the Eeyore of
28:36the company but it's in a very loving
28:38way
28:40when we've come up with our coming up
28:43with our product ideas like there have
28:44been times when I've just told her like
28:46I know you really want this to be a
28:48product we move forward with but it just
28:49doesn't make sense because of XYZ and
28:52she listens to me and that's nice it's
28:55nice to have that person who is you know
28:57super high energy and super like we're
29:00you know this is gonna happen we're
29:01gonna make it work but they can also
29:03listen to someone like me and say okay
29:04this is not the best path forward this
29:06is not what we're gonna do we're gonna
29:07adjust we're gonna find a different a
29:10different path a different product and
29:12so yeah it's been good finding that
29:15balance
29:16there are many allusions to Elizabeth
29:17Holmes wanting to be or thinking she was
29:20the next Steve Jobs and I worked for
29:24Steve Jobs
29:26and I don't want this to be a Daniel
29:27Coyle moment I am not a Steve Jobs I
29:30work for Steve Jobs
29:32and I will tell you I I read your the
29:35book
29:36and there's every two pages somebody
29:39delivers her bad news and he or she's
29:42fired and I double checked with somebody
29:44who worked with me in the Macintosh
29:46division we cannot come up with an
29:48instance where someone went to Steve and
29:50said you know what
29:52um the operating system is buggy or that
29:55disk drive won't work or we're making
29:58the architecture wrong and the person
30:00got fired by Steve Jobs there's no
30:03similarity between
30:05Elizabeth having no tolerance for
30:08negativity
30:09and Steves
30:11tolerance for negativity now when you
30:13went to Steve and said there was a
30:15problem you damn well better be right
30:18don't get me wrong he wasn't like
30:20singing kumaya holding hands wearing
30:23Birkenstocks and being all lovey-dovey
30:26but I don't ever remember him firing
30:28somebody for bringing bad news to that I
30:32would say that I think Elizabeth
30:33emulated the appearance of Steve Jobs
30:36more than she really emulated his values
30:39and she wanted other people to perceive
30:42her as Steve Jobs more than she actually
30:44wanted to be like Steve Jobs she wanted
30:46to
30:47to walk the walk she wanted to be
30:49perceived as Steve Jobs but obviously I
30:51never knew Steve Jobs but I've spoken to
30:53a few people who didn't know him and I
30:57have not seen a whole lot of
30:59similarities
31:02turtleneck right other than the black
31:04turtleneck yeah and the dropping out and
31:07that you can get at the Gap yeah up next
31:10on remarkable people she's really good
31:13at putting on a show she's really good
31:14at presenting an image of herself and
31:16she will strike the perfect balance in
31:18order to win people back over it'll be
31:20like a perfect balance between
31:21remorseful and overcoming adversity and
31:25I don't know being a loving mother and
31:28being brilliant in some respect she's
31:30gonna do it
31:31[Music]
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31:54welcome back to remarkable people with
31:58guy Kawasaki
32:01Wonder like what was going through the
32:04minds of people in the lab who didn't
32:09blow the whistle but knew something was
32:12wrong and resigned because if our
32:15arguably if you had not done what you
32:18did
32:20this charade would have gone on longer
32:23and literally people could have died
32:26right so
32:28when you look back who was resigning
32:33perhaps in protests enough
32:36or did they should they have taken the
32:39next step and done what you did
32:42so we had seen you know instances where
32:44people did speak up like you said when
32:46you read the book it was like every two
32:48pages somebody disagreed with Elizabeth
32:50and was fired and that was not lost on
32:53the employees you know that wasn't
32:54something that was hidden we were very
32:56well aware of this feedback loop and
32:59people saw you speak up you get fired
33:01and in some cases even worse in some
33:03cases those employees were then sued and
33:06when theranos sued former employees they
33:09sent out a company-wide email about it
33:11basically saying we will sue you too
33:13this is not an empty threat we will
33:16follow through with these ndas and we
33:17will sue you
33:18and so people were just terrified
33:21and
33:22I definitely don't hold anything against
33:24my co-workers who did not speak up you
33:27know in a lot of ways it's something
33:29that in good conscience that I could not
33:31recommend to a friend that they do what
33:33I did
33:34a lot of people had mortgages and kids
33:37and visas that were dependent on working
33:39at the company
33:40and
33:42you know it definitely is a path that
33:44comes with a lot of self-sacrifice and
33:47I think it's I think it's acceptable
33:49that in these situations some people
33:51look after their own self-interest and I
33:55think I I really do think that is that's
33:57okay
33:58I read an NPR thing about how after the
34:01sentencing it said that you were
34:04rejoicing might be too strong a word but
34:08so where are you mentally are you like
34:10okay you're Vindicated but are you doing
34:12backflips drinking champagne or you're
34:15just saying oh God thank you very much
34:17let's just get this part out of my life
34:19and I want to go do something positive
34:21yeah thanks for bringing that up
34:22actually I do think that was taken a
34:24little bit out of context as I've
34:26learned most things end up getting or
34:28many things end up getting taken out of
34:29context but basically
34:31when she was convicted my parents called
34:34me that morning and they said regardless
34:36of what happens
34:38we're popping champagne tonight because
34:40this is over this is finally a huge
34:42thing that is a terrible thing that will
34:45finally be behind us after today whether
34:48she's not guilty or whether she's guilty
34:50we're gonna celebrate we need to take a
34:53deep breath and feel like this is
34:55finally off our chest and come home and
34:58enjoy that feeling with us and she was
35:02convicted guilty and I went home and we
35:07had a really
35:08a really great night with
35:11um my family and and my family friends
35:13everyone came over and just
35:15congratulated me and
35:18her being convicted in a criminal court
35:21of law was the ultimate form of
35:23vindication for me
35:24ultimate form and so for me it did feel
35:27like
35:28it did feel like a win
35:30but
35:32then when her sentencing came around I
35:34was kind of expecting to have that same
35:35feeling again
35:37and that is not how I felt and I I got
35:42no enjoyment out of thinking of
35:46Elizabeth sitting in a prison cell for
35:4811 years
35:49and I think I think it's well deserved
35:51the judge said the sentencing guidelines
35:54would be put her between 11 and 14 years
35:56so she got the lightest end of the
35:59sentencing guidelines
36:01but I don't get any joy out of
36:03Elizabeth's suffering I did get some joy
36:05out of being Vindicated though and I'll
36:08also say that it's just a sad situation
36:09with her kids and
36:12it also brings up a lot of bad memories
36:14with me and and my grandparents and the
36:16suffering that me and my parents went
36:18through so her sentencing was not it was
36:21just it was just kind of sad it was just
36:23sad it's not like
36:26like her punishment can undo your pain
36:30right the tour right
36:32orthogonal at best yeah no that's
36:34exactly right her punishment does not
36:36undo my pain
36:38but for me I'm just glad that it's over
36:41and
36:43I'm glad the sentencing is behind us you
36:45know we still have she has a hearing
36:46about her restitution still coming up
36:48and sunny still has his sentencing so
36:50it's not completely over but this did
36:53feel like a huge huge chunk of it is now
36:56behind us and you know that the book is
36:59almost closed
37:01this close let's just say that
37:04she Appeals
37:07it takes two years for the appeal to
37:09come to court or whatever
37:12and in every photo she's holding two
37:15kids and
37:17she gets a book deal for five million
37:19dollars to tell her side of the story
37:23and now she's saying oh I've seen the
37:25light
37:26maybe even starts another biotech firm
37:29like
37:31what do you say you're saying only in
37:33America do you say
37:36[ __ ] I mean what do you say when that I
37:39mean that that's a scenario that could
37:40happen right not only that I almost
37:43think it's inevitable she's not just
37:45gonna go to prison and then
37:48enter
37:50and re-enter Society quietly she's just
37:53not that type of person she's gonna have
37:55some form of a second act
37:58and she'll undoubtedly
38:02convince a lot of people that I don't
38:06even know how to say this but
38:09you know she's really good at putting on
38:10a show she's really good at presenting
38:12an image of herself and she will strike
38:14the perfect balance in order to win
38:16people back over it'll be like a perfect
38:19balance between remorseful and
38:22overcoming adversity and I don't know
38:26being a loving mother and being
38:29brilliant in some respect she's gonna do
38:31it and she's gonna she's gonna convince
38:33a lot of people
38:35she's gonna she's gonna have a lot of
38:36people on her side I'm afraid maybe
38:38Andrew Newman and her can start a
38:41company together and that would be the
38:43perfect combination funded by Elon Musk
38:46that's the Dream Team right there so
38:49uh yeah I mean it is a freaking amazing
38:53story oh my God yeah not only is it only
38:56in America it's only in Silicon Valley
38:58could this happen and there's just
39:02yeah remarkable to use the word I need
39:05to get some like
39:07thoughts about how people listening to
39:10this can apply this to their life so
39:13question number one is
39:17how do you spot this kind of [ __ ]
39:19how do you spot a [ __ ] CEO a
39:22[ __ ] company
39:24that's a tough question I think it's
39:26pretty tough I think the problem is that
39:29human nature gets in the way we we are
39:32we want to believe people that we are
39:34attracted to in some way attracted to
39:37their story attracted their ideals
39:39attracted to their Charisma or the way
39:42they speak and oftentimes that masks a
39:46lot of Truth
39:48and because we are human it's really
39:51hard to see past those types of things
39:53that we're attracted to
39:55so as best you can try to remove
39:57personalities from what you're looking
39:59at and just evaluate a company or
40:01technology just based on
40:05the technology or whatever metric you
40:08have to evaluate the company
40:10and it's really it's it sounds easy but
40:13it's much much tougher much easier said
40:16than done
40:17part of it is a self-selection process
40:20but you only hear I guess that's not
40:25true because we know about wework and we
40:27know about our friend in crypto and we
40:29know about theranos so we we definitely
40:31know about the spectacular failures but
40:34you know people told Steve Jobs that
40:38what he was going to do was impossible
40:39and people told Fred Smith at FedEx I
40:42mean
40:43every big success story there's always
40:46this like everybody says it can't be
40:49done you can't you know nobody wants an
40:51electric car there's no infrastructure
40:53yeah I don't know the answer either I
40:56don't know when you'll be
40:58dialed which is I guess maybe that's why
41:01it's hard to be an entrepreneur yeah
41:05yeah it's tough yeah it's hard to see
41:07and I would also add that a lot of times
41:10people like you said have these crazy
41:12ideas that feel like this could never
41:14work
41:15and then it works
41:17and then the problem is that that person
41:19internalizes that that entrepreneur
41:21internalizes that when everyone tells me
41:24I'm wrong
41:25I'm right
41:26and that I think
41:29it can become pretty dangerous
41:32and it's the same thing we saw with the
41:34theranos board that's that whole I
41:36fought in a World War I negotiated the
41:38end of the Cold War type of I can never
41:40be wrong type of mentality
41:43and ego
41:45ego is uh
41:47is a dangerous thing and I think there
41:49are a lot of Silicon Valley CEOs that
41:51end up with enormous egos because
41:54in a lot of ways maybe and a lot of ways
41:57they've gotten lucky they had crazy
41:58ideas that worked there are a lot of
42:00crazy ideas that don't work but some of
42:02them do work out and
42:04those people then might think that
42:06they're a lot smarter than they actually
42:08are and then get into spaces that they
42:10may not be as familiar with thinking
42:11that they can't be wrong and then
42:17bad things could happen the Silicon
42:20Valley entrepreneurial way is to say
42:22that just because people say
42:25your fail doesn't mean you'll fail
42:28but very few people think about it the
42:31other way which is just because people
42:33say you're fail doesn't mean you'll
42:36succeed either and they never think
42:38about that right all these crypto Bros
42:42pretend the last three weeks didn't
42:44happen but when you talk to crypto pros
42:46and you express negativity about crypto
42:50they always tell a story like well
42:53people doubted that the internet would
42:55be big too and crypto is like the
42:57internet you can doubt it but it's going
42:59to be successful and you're gonna miss
43:01the boat
43:02yeah that logic makes no sense
43:04yeah I mean
43:06for a while people thought that the most
43:08valuable thing in the world was tulips
43:10well that didn't work out either yeah
43:13well Tyler I got to tell you man for a
43:15person of 30 you you sure have had some
43:18interesting experiences
43:20and yeah sorry you had to sleep with a
43:22knife
43:23but at least I'm one person in Silicon
43:27Valley who who deeply admires what you
43:30did and I think you have just
43:33man you have steel balls man that took
43:36courage I really admire what you did
43:39yeah thanks I I really appreciate that
43:41so yeah hopefully now I can take all
43:43these I've I've learned too many lessons
43:46to count hopefully I can take all those
43:48lessons and apply them to healthier and
43:51and finally get that big win I just
43:53thought of something
43:54I'll make you an offer that you can
43:56refuse which is okay I like you so much
43:59and I admire what you've done so much I
44:02have to be a modest for a second
44:04I know how to pitch
44:08okay I've literally written the book on
44:11how to pitch all right so I offer you
44:14free and no options nope nothing you
44:17don't have to give me nothing well you
44:19gave me this gift of this interview
44:21already but I will be happy to meet with
44:24you and the CEO of healthier and offer
44:27you feedback on your pitch if you ever
44:30want that we would very much appreciate
44:32that yeah that'd be great we don't have
44:35to meet on the campus of Stanford we
44:37don't have to hide from the
44:42we can meet and we'll really
44:46stick it in their faces we can meet at
44:48bucks in Woodside and okay yeah that
44:52would be fun seriously I I offer you
44:54that you just let me know I'll be happy
44:56to do that it would be an honor and a
44:58privilege to do that that would be
44:59awesome yeah I'll definitely take you up
45:01on that
45:03we are releasing this episode on
45:05December 7th we timed it this way
45:08because today is the day that Sunny
45:12bawani the other defendant in the case
45:15is being sentenced
45:17we recorded this episode on November
45:2023rd
45:21we don't know what the sentence will be
45:23yet but if Elizabeth Holmes got 11 and a
45:27quarter years you can be pretty sure
45:29that Sunny is going to have a stiff
45:32sentence too you would think that what
45:35you just heard about
45:37is a novel or a movie
45:40but it really happened
45:42only in America only in Silicon Valley
45:45Tyler Schultz should be honored
45:48commended and admired for doing what he
45:52did at Great cost at Great risk
45:56someday if you're running a company
46:00you should never ever put people in the
46:03position or they might have to blow the
46:06whistle and if you are someone who's
46:08working for a company
46:10that is doing something fraudulent
46:13admittedly this is easy for me to say
46:16but remember the example that Tyler
46:18Schultz provided us today he did the
46:23right thing I'm guy Kawasaki and this is
46:27remarkable people my thanks to two
46:30surfing buddies Mark nishimura and Jen
46:33Kroc without their help this interview
46:36would not have happened my thanks to the
46:39remarkable team Jeff C Peg Fitzpatrick
46:43Shannon Hernandez Madison drop-in queen
46:47of Santa Cruz Nismo
46:50Alexis nishimura College applicant
46:53and Luis magana college graduate
46:56remember once you start lying it's very
47:00hard to stop lying eventually you may
47:03end up in prison
47:05remarkable people don't lie
47:08and they don't end up in prison
47:11on this pleasant note let me bid you a
47:15fond Mahalo and aloha
47:18[Music]
47:21thank you to all our regular podcast
47:23listeners it's our pleasure and honor to
47:25make the show for you knowing that you
47:28like our podcast makes all the
47:30difference to us please follow the show
47:32in your favorite podcast app or find the
47:35latest episode every Wednesday at
47:37remarkablepeople.com
47:40this is remarkable people

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