The reporter who broke the Theranos saga wide open pinpoints the moment he knew he had a big story on his hands

Wall Street Journal investigative reporter John Carreyrou knew from his first phone call with a Theranos insider that he had a great story.
Comparing interview accounts and past coverage of Theranos founder Elizabeth Holmes, Carreyrou discovered major discrepancies.
Holmes had not only been lying to the public, she had also been lying to her own board, Carreyrou said.

John Carreyrou knew he had a story on his hand the moment his first phone call ended with Alan Beam, a former laboratory director at Theranos.

Carreyrou in early 2015 had just finished the story "Medicare Unmasked" for The Wall Street Journal and was looking for a new project to work on. Theranos was a healthcare tech company that had become a startup sweetheart in both the media and Sillicon Valley.

"In terms of both the battle we had to wage and how multi-faceted, colorful and sheer entertaining the story has been, this has probably been the best," Carreyrou told Business Insider. His first in a series of detailed exposes about the company was published on the front page of The Wall Street Journal in October 2015. In his new book, "Bad Blood: Secrets and Lies in a Silicon Valley Startup," Carreyrou reveals more to the story beyond The Journal's coverage.

Carreyrou first caught wind of skepticism around Theranos back in early 2015, when Adam Clapper, a pathologist who ran an industry blog, first approached Carreyrou about Theranos.

Clapper's tip and a handful of second-hand sources helped confirm Carreyrou's gut feeling when he read a New Yorker profile on Theranos: Something was off. But Carreyrou knew that to push the story forward, he'd need to talk to someone with first-hand experience at the company.

From that point, it took him about two and a half weeks to make his first contact with Beam (a pseudonym). After one phone call, Carreyrou knew he had a great story on his hands. Beam told Carreyrou everything he knew about the company. The offenses he witnessed included cheating on proficiency tests for the technology and providing false data to patients.

"He was the biggest hero of the story, but he was also a very reluctant hero," Carreyrou said. By speaking with Carreyrou, Beam subjected himself to speculation and relentless harassment from Theranos.

After Beam's recount, Carreyrou went back and re-read past coverage on Theranos and Elizabeth. The lack of peer-reviewed data to back up the company's scientific claims, her vague descriptions about how the Theranos technology worked and the secrecy which shrouded day-to-day operations at the company stood out to Carreyrou.

It became clear to him that there was a discrepancy between what Holmes portrayed to the public and the reality, and that discrepancy was perpetuated through lies, including one regarding the nature of her relationship with Sunny Balwani — a perpetrator of terror and Holmes' confidant — to the board of Theranos.

Once Carreyrou started speaking to Beam, the story unraveled quickly. From there, he was able to reach many other ex-employee sources. Beam, along with a lot of the ex-employee sources were traumatized by what they experienced at Theranos.

"It was like a mind-warping sort of experience," Carreyrou told Business Insider.

Theranos, which at one point was valued at $9 billion, recently laid off the majority of their employees and is pleading with investors for more cash as it faces setbacks in the lab on its Zika test.

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