Tyler Shultz details time at Theranos in exclusive LGHS interview

By Madeline King


Ms. Messenger: In order to do what was right, he took a journey at great personal cost along the way and it’s quite a fascinating story to tell, some pretty major players. And so we have, of course, Elizabeth Holmes, Tyler’s grandfather George Shultz, and Tyler himself, and as you can see, this has been nationally publicized and we’re really privileged to have Tyler here to tell us [his] story. So I’m going to be turning it over to Tyler. And so I’m going to stop presenting Tyler, and I’m going to let you take it on.


Tyler: Okay. Sounds great, thank you so much for having me. Um, yeah I really wish I could have been there in person; it would have been really fun to come back to my old high school and see my old teachers. But, you know… 


M: Yeah. So, basically, let’s just start at the beginning of your story when you first met Elizabeth.


T: Yeah, sure. So I first noticed that when I was a junior in college, I was at Stanford University, and my grandfather actually lives and worked on the Stanford campus. So I got a phone call from him and he just said that there was a brilliant woman who was coming over to his house and he thought that I would learn a lot by just coming and listening in. So that’s what I did; I biked on over to his house, and that’s where I met Elizabeth for the first time. 

I saw her deep blue eyes, her black turtleneck, and heard her very deep voice for the first time. And that was really the first time that I heard her lay out her vision that I would later hear her tell probably dozens and dozens and dozens of times, which was essentially being able to do hundreds of blood tests with a single drop of blood in a very short period of time, and you could do these tests anywhere where you have power, so in a helicopter or a battlefield or an operating room or in a supermarket or in your home. So, the technology really sounded limitless. And in addition to having this very compelling vision, she also had a great personal story. She dropped out of Stanford when she was 19 years old to start this company. I think at the time she was probably like 27 or 28 so it’s kind of crazy that I’m now just a little bit older than Elizabeth was when I met her.


M: I was gonna say what’s fascinating about your story is someone coming from that industry, did you just sort of believe her in totality with what she was saying because she was so charismatic?


T: Yeah. At the time, I totally believed her, and when she spoke to you, she made you feel like you were the most important person in her world in that moment, and she was just so good at telling you exactly what you needed to hear in order for her to get you to behave the way she wanted you to behave. So I was, I was completely sold, no red flags were raised. I totally just bought in.


M: Did you see the Steve Jobs comparison then, or was that pretty subtle at that point?


T: Um, well it’s kind of funny at that time I only met her one time so I didn’t quite realize that she wore the black turtleneck every single day. She definitely tried to look, behave, and run her company a lot like Steve Jobs.


M: Okay, so then you ended up being able to take a job there. So can you write for us like your first first day on the job, how that went for you?


T: Yeah, so actually my first day was a pretty tumultuous one, because this was actually the day after they did the ribbon cutting ceremony at their first Wellness Center at Walgreens and they finally came out of stealth mode and they told the world about what they were doing, because for over 10 years they were so secret that they didn’t even… On the website it just said we are revolutionising healthcare. They didn’t even tell people that they were a blood diagnostics company for about 10 years and then coincidentally the day that I joined was the day after they made this announcement, they came out of stealth mode, they told the whole world what they were doing. So it was pretty exciting. 

But at the same time, there was a manager of what was called the Assay Validation Team who quit and in a pretty dramatic way. I remember us with a group of scientists and someone came over and said oh [she] is out in the parking lot crying. She just had a screaming match with Sunny and Elizabeth, so if you want to say goodbye, you have to go out now. It’s my first day so I have no idea who this person was, but essentially what I learned later that day was that she went on a three week vacation and when she left she said “Our product is not ready to launch,” and [when] she came back in the product had just been launched. So she wrote, you know, a long email to Elizabeth and Sunny explaining why that was a bad idea. They didn’t listen and she ended up quitting.


M: Um, and this was one of the first technical people to say, I’m out of here, because of what you’re claiming.


T: I don’t think she was one of the first, but she was one of the first that I was aware of. But my manager… So I was in a research lab where we didn’t even work with the Theranos device; none of us had even seen one. So I had been working with people who had worked at Theranos for three, four years who had never actually seen the product, which, in hindsight, was a red flag. But at the time, I don’t know, there was some reason it didn’t bother anybody at the time. 

But our manager pulled my team aside, and he kind of explained that things are really crazy in this Assay Validation Lab, because that lab was in charge of making sure that these blood tests were working before we tested real patients. And we had zero tests that were quote unquote validated on the Theranos product, when we launched it, so it was very unclear exactly why we launched it and what we launched. So when people went into Walgreens to get their finger pricked or actually [get] blood taken from their arm, the tests weren’t even run on a Theranos product; they were all being run on the same type of central laboratory equipment that would be in any central laboratory run by Quest or Labcorp.


M: So how is it that they were able to do that? Do you have an understanding now with hindsight looking back? I know you were brand new to the industry, but as someone coming from it it’s just sort of a stunning story because the regulatory affairs that every company makes sure you follow the rules; that’s sort of what they do.


T: Yeah, well, yeah I mean they definitely fit into a few regulatory loopholes. So, one was this quote unquote, it was called laboratory developed tests. So you develop a test that you only use in your own laboratory, and you don’t sell that test to other people, you are not regulated by the FDA. You are regulated by a body called CLIA and CLIA just comes and they inspect your lab and they make sure that, then you have all the quality controls in place and things like that, but the specifics about your test… Like the FDA would never look at. Yeah, so they kind of fit into this, this loophole where they wouldn’t have a lot of regulatory oversight. 

But it was a shock to me to learn that we launched a product, but that there were no tests that we could actually run on the product. And then our manager also said, you know, life in the Assay Validation Team is crazy. They’re working around the clock. The president of the company would do walkthroughs at three in the morning to make sure that there were people working in the labs, but we were removed from that because we were more research. We weren’t quite on the front lines. So she said we just had to be thankful for that. But then by the end of the week, I received an email that said we should scrap all of our experiments and we’re all being put onto the Assay Validation Team. 

So, that is where I saw this Theranos device for the first time. The manager, whose name was Aruna, side manager of the research lab, it was also her first time seeing this equipment. And as part of that kind of onboarding process, we got to see what was called the open reader, so we had a Theranos device that didn’t have any of the shell on it, so you can see exactly what was inside and you can see what the protocol was doing. And the first time I saw this was the first time that Aruna was seeing this, and Aruna had a PhD in molecular biology, she did her postdoc at Stanford, she went to someone who I thought was really a brilliant person, well educated. And so we’re seeing this for the first time together. And I just vividly remember her face. She turned to the woman who was giving us the demo and she said, “Do you think this is cool?” And the woman giving us the demo just kind of shrugged and went, I’ll let you decide for yourself, and then walked away. So pretty much at that instant I realized that there was this open secret that the technology didn’t really exist because what we saw was a pipette on a robotic arm, and I’m sure anyone that’s gone through Los Gatos High School has used a pipette. So it was really like you could, you know you could kind of Jerry-rig a Theranos device by… materials that you have at Los Gatos High School. You could build a Theranos device. There was nothing really revolutionary, there was no microfluidic technology, it was a huge disappointment. It could only run one test at a time. And so, on top of the fact that we had no test validated on the platform, even if we had hundreds of tests validated, you would need to run those tests on hundreds of different devices in order to actually complete that panel, and then it wasn’t even a standalone platform. 

So, before you put the sample into the Theranos device, you had to put it through a third party piece of equipment called a T-cam, which was a fancy pipetting robot. I was told that that cost hundreds of thousands of dollars. And then when we started working with the devices, we found that they didn’t even work very well. So the tips of the pipette were constantly falling off; they’d get stuck in the gears. So we would have these clothes hangers that we keep around the lab to fish out the tips at the bottom of the Theranos devices. They… like the part… so we will put barcodes on the cartridge before we put it in and then the device would scan the barcode and know what tests to run, but the barcode scanner didn’t even work so we would have to peel the barcode off, we’d stick it on for scissors, and stick the scissors in and rotate it, move it up and down until it’d finally go “boop,” and then we would quickly put it in. 

So, unsurprisingly, the results that we got were just all over the place. And we usually use something called coefficient of variation which measured how much noise there was, and on our website it said that our coefficient of variation was less than 10%. But in the Assay Validation Team I was actually running the experiments to calculate that coefficient of variation. I don’t think I saw a coefficient of variation under 10% for any, any assay. 


M: And just [to] interject for students to give you context, when I was working in medical diagnostics we wouldn’t release products with a claim of less than 10% as being a good thing, we would want to be way down below five;more like two or three. I know you have so much more to share in that area, but I want to honor our time here so I know a lot of people are very interested in sort of the next step which is how the whole Bad Blood book and all of this stuff and your communication with the Wall Street Journal author, if you can go a little bit into that. 


T: Yeah, sure. Um, so eventually I leave the company, I write Elizabeth a long email, and she doesn’t respond, but the president of the company does, and he essentially says that I’m arrogant, ignorant, patronizing, reckless, that I have no basic understanding of math, science, which I know my old teachers at Los Gatos I would disagree with.


M: We completely do. I will speak for all of us.


T: So they booted me, they booted me out of the company pretty hard. So then, a little bit of time passes, and I’m contacted by a Wall Street Journal reporter who’s looking into Theranos. And I talked to my old manager Aruna; I talked to my parents. Everyone says that I should not talk to this guy, um, you know they say it’s great that someone’s finally looking into this because at this point they had raised, like a $700 million round, Elizabeth was on the cover of Forbes, Fortune, Inc. They were very powerful. They had a board that had Jim Mattis on it, other secretaries of state, defense. So basically the advice that I got was stay out of it. And I did that for about a month, but then I got really curious, like, we’re new and what this angle story was, so I went and I bought a burner phone with cash because I wanted to be able to confidently show my call logs to somebody and say, look, I haven’t spoken to this guy. 

Um, so I called John, and he, you know, he was aware of all the problems that I was aware of plus, you know, a bunch more, so I thought that he was pretty well equipped to take this story on. And you know my grandfather was also on the board at this time so on my first call with that reporter I said, you know, my grandfather was part of the Nixon administration during Watergate and he was part of the Reagan administration during the Iran Contra scandal and made it out of both of those with his integrity completely intact. If he’s given opportunities, he will make things right with the people that Elizabeth has hurt, so I want this story sooner rather than later. So I agreed to work with him. 

And then about a month later, I went home to Los Gatos. At the time I was living in a house with a bunch of people in Los Altos, but I went home to have dinner with my parents in Los Gatos and my dad had just gotten off the phone with my grandfather and he said “have you been speaking to the Wall Street Journal.” And I said, “Yes,” and my dad said “well, they know.” I said there’s no way they know, this is, this was a good reporter; he didn’t just give them my name. I did my research on him. So I called my grandfather, and he essentially said that Elizabeth told him that I had been giving trade secrets away to the Wall Street Journal, that there was a one page non-disclosure agreement that I could sign that would, I think he said something like, end a world of suffering. It was like, if I just signed this one thing to avoid just enormous pain. And I said, “Okay, I don’t know why I need to sign it, but I have to so I’ll come sign this non disclosure agreement tomorrow morning. But before then can I just come talk to my grandfather without any lawyers around.” So I went over to his house. Well actually briefly I went back to the house that I was renting with some of my friends, and I was panicking, I was totally panicking. 

I didn’t know what to tell my grandfather, and I’m talking to one of my housemates, and I said you know I’m gonna go over to my grandfather’s house and I’m just gonna tell him the truth. I’ve always told the truth, I just want to keep telling the truth. And I believe that will be the best thing for me. And my friend just said, “Dude, you should definitely lie.” And, you know, essentially, what he was [saying was], he said you don’t know what’s actually on the table. At any point you can decide to tell the truth, but once you tell the truth you can’t go back. So, before you know what’s really at stake and what’s really on the table, you should lie and just gather more information. 

So I went over to my grandfather’s house and I lied to him, and I said that I had not spoken to the Wall Street Journal, I had no idea what I thought I had. And I said that I would still be happy to sign a non-disclosure agreement because, you know, I had nothing, I wasn’t planning on disclosing anything. And he said okay well that’s great. Well there’s actually two Theranos lawyers here right now, and I can go get them. And I was completely blindsided by that, totally unprepared. But I said yeah, go get them. So, I was expecting them to bring this one page confidentiality agreement that I was told about, and instead they come in and they had a notice to appear in court Friday morning, and at the time it was Wednesday night, so I had, you know, just barely more than a day before I was supposed to appear in court. They gave me a temporary restraining order and they gave me a strongly-worded letter signed by somebody named David Boies [whom] I’d never heard of at the time. 

So, I’m no lawyer but obviously this is not a one page non-disclosure agreement. So, things get pretty heated. They are adamant that they know that I spoke to the Wall Street Journal and that I needed to admit that to them right then and there and I said, no, I have not. And eventually my step grandmother was starting to look very uncomfortable so I asked her, I just said, “Is this making you uncomfortable,” she said yes. So I told the lawyers this conversation needs to end, but they kept pressing me. But then eventually my grandfather stood up and kind of shooed them out of the house, and later in a deposition, my grandfather described the incident as the lawyers were like animals who assaulted his grandson; it was, it was that intense. 

So then I go home, and well actually after the lawyers we called Elizabeth and my grandfather said, you know, this is not anything like we had discussed. Tomorrow I want you to send over different lawyers, and it needs to be the one page confidentiality agreement that we discussed. So I go home, I barely sleep, and I come back the next day to my grandfather’s house, and of course the same two lawyers come and of course they don’t bring a one page non-disclosure agreement. They bring an affidavit, which I’d never heard of at the time, but it’s a sworn, it’s a written sworn statement. It is like being under oath in a court of law and giving a sworn statement. And this document said, “my name is Tyler Shultz, I’m 24 years old. I have not spoken to the Wall Street Journal but here’s a list of names of people who I know have.” There was a line that said “under penalty of perjury” and then there’s a line for my name. So even though I didn’t know what an affidavit was, luckily I knew that I didn’t want to commit perjury.


M: Good. So, who was your social studies teacher?


T: So, I knew I didn’t want to sign this, so I said that I wasn’t gonna sign it because I wasn’t gonna list names of people who I thought had spoken to the Wall Street Journal. And they, you know, they argue with me about why they needed that information and they got really heated again. Eventually, my grandfather separated us and put the lawyers in the living room and I was in the dining room, and he was shuffling between these two rooms negotiating.


M: And he’s like, what, 95 when he’s doing this? 94?


T: Yeah, I think, 94, 95 years old. And eventually the lawyers agreed to take out the part about listing names, so my grandfather comes back and says, “guess what…you got what you wanted, you can sign this document now.” And I said, oh, well I had to come up with another reason that I couldn’t sign it… In my hand, I have a notice to appear in court tomorrow morning. And as far as I can tell, I can sign this document and that does not go away, so I need somebody in here that says Theranos will not sue me. So, he wrote at the bottom and pencil he wrote Theranos will not sue Tyler for two years. That’s not long enough. Crossed out two years and wrote forever, and then brought it back to the Theranos lawyers, comes back, and he comes back with the lawyers and they said that they’ve agreed to all, you know, everything that I asked for so there was no reason for me not to sign it. And at that point, it felt like every single person in the room knew that I was lying, and their lawyers were just begging me to commit perjury. They were saying, “it make our day if you lie under oath,” which is fantastic.


M: It would give them just the ammunition they needed to really shut you down, right.


T: Yeah. So I tried to think of another reason to not sign it, but I couldn’t. Eventually I just said, you know, Elizabeth has had lawyers look at this with her best interests in mind. You know, I’m gonna have a lawyer look at this with my best interests in mind. And my grandfather was pretty frustrated when I said that and he said, “Okay,” and then he asked if his estate attorney said it was fine for me to sign, would I sign it, and I said sure, so he said he was gonna go fax this document to his lawyer. And when he left, I went into his kitchen and started flipping through his contacts book trying to find this lawyer’s phone number, and eventually my step grandmother comes in, slaps a piece of paper in my hand with a number written on it, and she just says “go call him.” And so I went outside, I called this lawyer and I just said, “My grandfather’s about to send you something, and he’s going to tell you to tell me that I have to sign up, you have to tell him that I cannot sign it.”


M: That’s some great thinking there, Tyler, it’s pretty impressive.


T: Okay, slow down and he said okay well who’s representing them, and in my hand I had this letter and I said, they’re being represented by someone named David Boies, and he just went holy sh*t. I apologize. Not my words. Not my words. And then I subsequently learned that David Boies has been involved in the most high profile cases in the United States, he’s considered the number one corporate gun in America. So anyway, this lawyer said “you know, this is actually pretty serious you got to come to my office.” And I went to bed that night, with the notice to appear in court the next morning. I woke up in the morning to an email from the parents’ lawyers saying that they were getting more time to negotiate with them. So then, over the course of the next three or four months, yeah, I just, I spent a lot of time with my legal team, I ended up having an IP attorney, a criminal defense lawyer, a defamation lawyer, a litigator. It was really scary. It was really expensive. And luckily my parents were extremely supportive the entire time, even when it was… even when I made it really hard to be on my team my parents were always on my team. I remember my parents telling me that if I did go to court, that a good case scenario would be we would have to spend $2 million and win. And that would be kind of like the best case outcome, and they said that they would have to sell their house to pay for my legal fees and they said “we will do that for you, but please do not make us do that.” 

Luckily it did not come to that. And I also remember my mom would constantly remind me; she would say, “you know they can take all of your money they can take all of our money. But no matter what they can’t take… no matter what at the end of the day you will still be young, you’ll be healthy, you’ll be creative, you will be educated, the things that are most important in life they cannot take away.” So yeah, my parents really helped me get through that tough time. Eventually the Wall Street Journal comes out with their reporting on Theranos, and three years after that, Theranos finally goes bankrupt and shuts their doors. And now this coming summer Elizabeth, and the president are facing their criminal trial.


M: Right, so now I’ve heard from your dad that you’re actually doing quite well for yourself now, so can you explain a little bit more about what you’re doing now, and how this is actually… you’ve actually gotten some silver linings from this horrific experience in your life?


T: Yeah, definitely. Um, so after I quit Theranos I went and started working in a lab at Stanford, that had been working on repurposing old computer hard drive technologies to do molecular diagnostics. So, it’s the idea of magnets flipping up and down to store zeros and ones, but instead of having a computer flip those magnets, we have magnetically labeled antibodies. Turns out to be very sensitive, easily multiplexible, so you can measure multiple things at the same time, and the magnetic nanoparticles that are used are very stable. So, they’re not like enzymes that degrade if they’re in low light or pH or with temperature. So these tests work really well in point of care settings. So it’s kind of funny, because Elizabeth totally sold me on this vision of changing the way diagnostics is being done and I’m still chasing that vision, but going about it in a completely different way.


M: You mean with like, science, and math.


T: Yeah. Peer review is the key. I ended up starting a company with one of my professors from Stanford. We licensed IP from Stanford, and my professor’s been publishing papers, peer reviewed papers, on this technology for over 15 years. So going about it in a very different way, but still kind of going after that same vision.


M: Right, and, you know, meeting the FDA requirements and stuff like that.


T: Yeah, I learned a lot about what not… how to not run a diagnostic.


M: Absolutely. Sometimes that’s what we learn when we meet people, what we don’t want to do. You got the ultimate lesson in that, didn’t you.

So I know we might have some questions just in my room and I think Miss Rothstein has been recording some. That’s the snack bell, so we still have a couple of minutes. Anyone in the room have a question? Carol, go ahead. Did you ever regret it, she said.


T: Um, luckily, so there’s nothing I regret, but there are tons of things that I would do differently. I would do everything that I did, I would do differently. There are actually three protected whistleblowing channels that exist, where you can bring information directly to the government and anything that you bring to them is protected and Theranos couldn’t have threatened to sue me over things like that. I wish that I had better educated myself about what my options were. Part of the problem was that I didn’t actually see myself as a whistleblower, I mean I didn’t really even think the word whistleblower saw I read in a newspaper next to my name.


M: Okay, all right, we have a very relevant one which I almost asked you myself but there it is somebody gave it to us. Given your experience with Theranos and knowing what needs to happen to be accurate on testing results, what do you think of private companies trying to develop a test for novel coronavirus today? Do you trust those tests?


T: We’re in a serious mess right now. It was totally mishandled. So, this laboratory developed test loophole was something that was completely abused by Theranos, but it existed for situations like we’re currently in, and Trump, to his credit recently rolled back in time and opened up this loophole again, which allows laboratories to develop their own tests for this virus, because the CDC test did not work. But even though I think that is overall a good thing, that means that every individual hospital and every individual lab is going to be developing this test themselves. So, it’s gonna be hard to have the same quality controls across labs, you know, just being able to get the same results and I bet if we send the same coronavirus samples to ten different labs, we will not get the same result ten times.


M: And also on that from my years of experience in the same industry, it takes years to develop something to know that you will have the confidence that you get the right answer every time.


T: Right. Actually doing the validation is a ton of work. And not every hospital has someone who’s an expert in developing these tests. Every hospital is saying, “okay you. You don’t look like you have anything to do, you develop the test.” So I’m afraid that there’s going to be a lot of false positives and a lot of false negatives.


M: Right, which are scarier right, false negatives.


T: False negatives are very scary. So I don’t know, I don’t know, it’s a scary situation that we’re in.


M: All right, well we have about two minutes left, are there any other questions? Otherwise we’re gonna have to say thank you so much for joining us. It’s been a journey even to get you here. Oh, one more.


Student: In the documentary, you said that your grandfather didn’t really, like, believe you when you were saying that these tests weren’t working. Did you get, like, reconciliation or, like, did he believe you in the end, or, like what happened with that?


T: Yeah, a very long time to see the light, but after the SEC came out… So the SEC did this big investigation and they ended up saying that it was deemed a massive years-long fraud. And they actually have a sample, where she told potential investors that the revenue was a billion dollars, when in reality the revenue was a few thousand dollars. So that was good.

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