Google’s Android operating system were beginning to usher in a shift
to mobile computing, as cellular networks became faster and capable
of handling larger amounts of data. Wildly popular mobile games like
Angry Birds, which millions of iPhone users were paying a dollar each
to download, seeded the notion that you could build a business around
a smartphone app. In the spring of 2010, an obscure startup called
UberCab did a beta launch of its black car hailing service in San
Francisco.
All of this might not have been enough to ignite the new boom,
however, if it hadn’t been for another key ingredient: rock-bottom
interest rates. To rescue the economy, the Federal Reserve had slashed
rates to close to zero, making traditional investments like bonds
unattractive and sending investors searching for higher returns
elsewhere. One of the places they turned to was Silicon Valley.
Suddenly, the managers of East Coast hedge funds that normally
invested only in publicly traded stocks were making the pilgrimage
West in search of promising new opportunities in the private startup
world. They were joined by executives from old, established companies
looking to harness the Valley’s innovation to rejuvenate businesses
battered by the recession. Among this latter group was a sixty-five-
year-old man from Philadelphia who greeted people with high fives in
lieu of handshakes and went by the sobriquet “Dr. J.”
Dr. J’s real name was Jay Rosan and he was in fact a doctor, though
he had spent most of his career working for big corporations. He was a
member of Walgreens’s innovation team, which was tasked with
identifying new ideas and technologies that could reboot growth at the
109-year-old drugstore chain. Dr. J operated out of an office in the
Philadelphia suburb of Conshohocken that Walgreens had inherited
from its 2007 acquisition of Take Care Health Systems, an operator of
in-store clinics where he’d previously been employed.
In January 2010, Theranos had approached Walgreens with an
email stating that it had developed small devices capable of running
any blood test from a few drops pricked from a finger in real time and
for less than half the cost of traditional laboratories. Two months later,
Elizabeth and Sunny traveled to Walgreens’s headquarters in the