Logo

    Extra: Why Is 23andMe Going Under? (Update)

    Despite a hack and challenges, CEO Anne Wojcicki remains committed to improving healthcare at 23andMe and is considering taking the company private to refocus efforts

    en-usApril 29, 2024

    About this Episode

    Five years ago, we published an episode about the boom in home DNA testing kits, focusing on the high-flying firm 23andMe and its C.E.O. Anne Wojcicki. Their flight has been extremely bumpy since then. This update includes an additional interview with the Wall Street Journal reporter who has been investigating the firm’s collapse.

     

     

     

    🔑 Key Takeaways

    • Genetic testing from home companies like 23andMe has ethical concerns regarding privacy and potential misuse, but also revolutionary potential in solving crimes.
    • The Wojcicki sisters' stories showcase the power of innovation, determination, and challenging the status quo, with Anne's journey from finance to health care entrepreneurship emphasizing the importance of questioning the system and seeking alternative solutions for societal improvement.
    • 23andMe learned the importance of regulatory compliance, eventually gaining FDA approval to provide genetic risk reports, and continues to make a difference in healthcare by empowering individuals with valuable information.
    • Genetic testing offers personal health insights but requires accuracy, completeness, and ethical considerations. Polygenic risk scores are a significant direction, but their effectiveness varies based on ethnicity, and accessibility and inclusivity remain concerns.
    • Despite 23andMe's efforts to increase genetic diversity and provide personalized health risk reports, studies suggest that these reports may not be the primary driver for behavior change. Individuals who are already motivated to make changes may be more likely to sign up for the reports, and receiving the report may be a consequence rather than the cause.
    • Despite knowing the risks, many struggle to change unhealthy habits. The Internet and cognitive behavior tools offer hope, but the complexity of human behavior highlights the need for collective efforts and support systems.
    • 23andMe uses individual's genetic data for research, making it a valuable resource, but raises concerns about privacy and profit.
    • Genetic testing offers valuable insights but raises privacy concerns. Companies prioritize security, but data breaches are possible. Discoveries may impact personal and familial relationships, emphasizing the importance of informed consent and data sharing options.
    • Genetic testing uncovers hidden family connections, challenging identities and offering new possibilities for understanding our ancestry and shared history.
    • Ancestry testing companies faced challenges monetizing one-time purchase tests and struggled to turn a profit
    • 23andMe initially struggled with revenue from subscriptions and now seeks profit from licensing genetic data for drug discovery, but faces long processes, competition, and privacy concerns
    • Despite a hack and challenges, CEO Anne Wojcicki remains committed to improving healthcare at 23andMe and is considering taking the company private to refocus efforts
    • During challenging times, prioritize self-care and consider helping those around you. Freakonomics Radio produces insightful podcasts and publishes transcripts and show notes at freakonomics.com.

    📝 Podcast Summary

    The use of genetic data from home DNA testing companies for crime solving

    The popularity of home DNA testing companies like 23andMe has led to unexpected uses of genetic data, such as helping law enforcement solve crimes. However, the use of this data raises ethical concerns regarding privacy and potential misuse by governments or other entities. Anne Wojcicki, the CEO of 23andMe, has always prioritized the ethical use of customer data and has faced scrutiny from an active community concerned with the consequences of genetic testing. The arrest of the Golden State Killer using publicly available DNA data from 23andMe and other companies highlights the revolutionary potential of genetic testing, but also underscores the importance of addressing the ethical implications as the technology advances. The conversation between Stephen Dubner and Anne Wojcicki on Freakonomics Radio explores these issues and the future of genetic testing from inside 23andMe.

    From finance to health care entrepreneurship

    The Wojcicki sisters, Anne, Susan, and Janet, have made significant impacts in various fields, from academia and technology to health and education. Anne, who studied biology and played ice hockey at Yale, worked in finance and realized the health care system prioritizes profit from illness over wellness. Feeling disillusioned, she co-founded 23andMe in 2006 with a goal to revolutionize the industry by focusing on personalized health reports. Her sister Susan, the first marketing manager at Google and former CEO of YouTube, played a pivotal role in Google's early days. Together, their stories demonstrate the power of innovation, determination, and a desire to challenge the status quo. Anne's journey from finance to health care entrepreneurship underscores the importance of questioning the system and seeking alternative solutions for the betterment of society.

    23andMe's regulatory challenges and eventual approval

    23andMe's journey to becoming a leading genetic research company came with significant challenges, particularly when it came to regulatory compliance. When their health reports were not approved by the FDA, the company was forced to stop interpreting health information for customers and go through an approval process. This was a turning point for 23andMe, as they realized the importance of complying with regulations to ensure public safety. Despite the setbacks, the company persevered and was eventually granted permission to send genetic risk reports for certain conditions to customers in 2017. Through this experience, 23andMe's CEO Anne Wojcicki emphasized the importance of empowering individuals to take charge of their health and making a constructive difference in the healthcare space. The company's success is not just about financial gains, but about helping people make informed decisions and potentially saving lives. However, there is still work to be done in ensuring that medical professionals value and utilize this genetic information effectively.

    Genetic testing comes with risks and ethical considerations

    While direct-to-consumer genetic testing offers individuals the opportunity to educate themselves about their health, it also comes with potential risks and ethical considerations. The accuracy and completeness of the information provided are crucial, and some experts argue that requiring physician approval or genetic counseling can help prevent misinterpretation and poor decision-making. However, not everyone may have a primary care provider or may prefer to have more control over their health information. The development of polygenic risk scores, which consider multiple genes and their small effect sizes, represents a significant direction in healthcare. However, these scores work best for people of the same ethnic background as those who provided the data, and there is a concern that databases like 23andMe's, which are heavily European-dominated, may not be as useful for other populations. The historical mistrust of the medical system among certain populations, such as African Americans, may also contribute to their reluctance to participate in genetic testing. It is essential to address these concerns and work towards making genetic testing more accessible and inclusive for all.

    Personalized health risk reports from 23andMe may not lead to significant behavior change

    While 23andMe strives for genetic diversity in their customer base and research, there is a challenge in ensuring that individuals take action on personalized health risk reports. A study conducted by Robert Greene at Harvard found that over 40% of customers were looking to make diet changes six months after receiving their saturated fat report. However, there is no consistent evidence that specific genetic risk information received from personal genomic testing led to those changes. Another study in the British Medical Journal found no evidence that genetic testing leads people to alter their lifestyles or behaviors. These findings suggest that individuals who are already motivated to make changes may be more likely to sign up for genetic risk reports, and receiving the report may be a consequence of that motivation rather than the cause. Despite these challenges, 23andMe is actively working on programs to help individuals better understand food and behavior, such as their partnership with Lark for AI coaching. Overall, while there is potential for personalized health risk reports to lead to positive changes, it is important to recognize the complexity of behavior change and the limitations of self-reported data.

    The Challenge of Changing Behaviors for Personal Health

    While it may be challenging to get people to change their behaviors for personal health despite having the necessary knowledge, it's not impossible. The potential of the Internet and cognitive behavior tools offers hope for change. However, the prevalence of unhealthy habits, such as poor diet and sedentary lifestyles, despite known risks, highlights the complexity of human behavior. The optimism of Anne Wojcicki, CEO of 23andMe, regarding humanity's ability to change is commendable. The data collected by companies like 23andMe, when aggregated, can have significant implications for healthcare and future investments. It's essential to recognize the difficulty of behavior change and the importance of utilizing available resources to make a difference. Additionally, it's crucial to acknowledge that not everyone may have the same level of discipline or access to resources, making collective efforts and support systems crucial for success.

    Advancing research and improving healthcare with individual's genetic data

    23andMe, founded by Anne Wojcicki, was established to advance research and improve healthcare by allowing individuals to contribute their genetic data for broad use. This was inspired by interactions with sarcoma patients who wanted their data to make a meaningful impact. The company has amassed large numbers of individuals with various health conditions, making it a significant resource for research. However, concerns about privacy and profit have arisen, as individuals pay for the service but their data is used to make commercial deals with pharmaceutical companies. Wojcicki acknowledges these concerns and emphasizes the importance of giving back to customers once therapeutic successes are achieved. The company is currently focused on research and development, with 13-14 compounds in various stages.

    Genetic testing: Balancing privacy and benefits

    While companies like 23andMe provide valuable services and insights through genetic testing, privacy and potential consequences are significant concerns. GSK aids 23andMe in scaling operations, and the company prioritizes internet security to protect customer privacy. However, no system is foolproof, and there's always a risk of data being accessed without consent. The story of Anne Wojcicki and her family highlights the potential impact of genetic testing on personal and familial relationships. While some discoveries may be surprising and even beneficial, others could reveal sensitive information that might affect individuals and their loved ones. It's crucial for companies to offer options for data sharing and ensure explicit consent before sharing any information. Ultimately, the convenience of genetic testing comes with the responsibility to consider the potential implications and make informed decisions.

    Discovering Family Secrets with Genetic Testing

    23andMe, a genetic testing company, is not only helping people discover new connections within their family tree but also unearthing long-hidden family secrets. This reconnection process can be both exciting and challenging, as some people may not be prepared for the revelations. The technology has the potential to change the landscape of anonymous adoption and egg/sperm donation. The discovery of these genetic links can be more powerful than looking in the mirror, as it challenges one's identity and sense of self. Some people may find this revelation jarring, especially if they had strong beliefs about their ancestry or family history. Despite the potential emotional impact, the ability to uncover these connections is a significant development in understanding our genetic heritage. The unintended consequences of this technology add depth to the human experience and open up new possibilities for stories and understanding of our shared history.

    Ancestry testing companies like 23andMe tapped into curiosity of genetic roots

    Our connection to our genetic roots and understanding the reasons behind our unique traits is a question many people are seeking answers to. Ancestry testing companies like 23andMe tapped into this curiosity, gaining popularity and significant investment due to Anne Wojcicki's Silicon Valley connections and the potential value of the vast consumer data they were collecting. However, the business model proved challenging as the tests were considered one-time purchases, and most people did not receive life-altering health results. As a result, the company struggled to turn a profit, leading to a significant decline in stock value.

    Exploring new revenue streams for 23andMe

    23andMe, a consumer genetics and biotech company, initially relied on a subscription-based business model to generate revenue but fell short of their projections. To make up for this, they explored the possibility of monetizing their vast genetic database for drug discovery and licensing to pharmaceutical firms. However, the long process of drug development and regulatory approval, along with competition and consumer privacy concerns, have hindered this endeavor from becoming profitable. Currently, the company's enterprise value is estimated to be around zero, but its valuable data has the potential to attract investors or buyers looking to unlock its commercial potential.

    CEO Anne Wojcicki considering taking 23andMe private

    Anne Wojcicki, the determined CEO of 23andMe, is considering taking her biotech company private due to its low stock value and distraction for employees. This move comes after a hack that exposed names and ethnicities of users without accessing their genetic data, which caused damage to the company's consumer branding. Despite the hack and the challenges, Wojcicki's commitment to improving healthcare remains strong. The company, which aims to change the world for the better, could look similar but under private ownership in the next few years. Wojcicki's ability to overcome obstacles, including a public breakup and a FDA warning letter, showcases her resilience and determination.

    The importance of self-care and helping others

    Learning from this episode of Freakonomics Radio is the importance of taking care of oneself and others during these challenging times. The producers remind us to prioritize self-care and consider helping those around us. Freakonomics Radio is produced by Stitcher and Renbud Radio, and you can find their entire archive on any podcast app or at freakonomics.com, where transcripts and show notes are published. This episode was produced by Alina Coleman and Rebecca Lee Douglas, along with a dedicated team. The theme song is "Mr. Fortune" by The Hitchhikers, and the composer is Luis Guerra. While the host reflects on the significance of his DNA, he acknowledges that there are more pressing concerns in his life, such as caring for his young children. The Freakonomics Radio Network aims to reveal the hidden side of everything.

    Recent Episodes from Freakonomics Radio

    588. Confessions of a Black Conservative

    588. Confessions of a Black Conservative

    The economist and social critic Glenn Loury has led a remarkably turbulent life, both professionally and personally. In a new memoir, he has chosen to reveal just about everything. Why?

     

    • SOURCE:
      • Glenn Loury, professor of economics at Brown University and host of The Glenn Show.

     

     

    Freakonomics Radio
    en-usMay 16, 2024

    587. Should Companies Be Owned by Their Workers?

    587. Should Companies Be Owned by Their Workers?

    The employee ownership movement is growing, and one of its biggest champions is also a private equity heavyweight. Is this meaningful change, or just window dressing?

     

    • SOURCES:
      • Marjorie Kelly, distinguished senior fellow at The Democracy Collaborative.
      • Corey Rosen, founder and senior staff member of the National Center for Employee Ownership.
      • Pete Stavros, co-head of Global Private Equity at KKR.

     

     

    586. How Does the Lost World of Vienna Still Shape Our Lives?

    586. How Does the Lost World of Vienna Still Shape Our Lives?

    From politics and economics to psychology and the arts, many of the modern ideas we take for granted emerged a century ago from a single European capital. In this episode of the Freakonomics Radio Book Club, the historian Richard Cockett explores all those ideas — and how the arrival of fascism can ruin in a few years what took generations to build.

     

     

     

    Extra: Why Is 23andMe Going Under? (Update)

    Extra: Why Is 23andMe Going Under? (Update)

    Five years ago, we published an episode about the boom in home DNA testing kits, focusing on the high-flying firm 23andMe and its C.E.O. Anne Wojcicki. Their flight has been extremely bumpy since then. This update includes an additional interview with the Wall Street Journal reporter who has been investigating the firm’s collapse.

     

     

     

    585. A Social Activist in Prime Minister’s Clothing

    585. A Social Activist in Prime Minister’s Clothing

    Justin Trudeau, facing record-low approval numbers, is doubling down on his progressive agenda. But he is so upbeat (and Canada-polite) that it’s easy to miss just how radical his vision is. Can he make it work?

     

     

     

    584. How to Pave the Road to Hell

    584. How to Pave the Road to Hell

    So you want to help people? That’s great — but beware the law of unintended consequences. Three stories from the modern workplace. 

     

    • SOURCES:
      • Joshua Angrist, professor of economics at the Massachusetts Institute of Technology.
      • Zoe Cullen, professor of business administration at Harvard Business School.
      • Marina Gertsberg, senior lecturer in finance at the University of Melbourne.

     

    Extra: The Men Who Started a Thinking Revolution (Update)

    Extra: The Men Who Started a Thinking Revolution (Update)

    The psychologist Daniel Kahneman — a Nobel laureate and the author of Thinking, Fast and Slow — recently died at age 90. Along with his collaborator Amos Tversky, he changed how we all think about decision-making. The journalist Michael Lewis told the Kahneman-Tversky story in a 2016 book called The Undoing Project. In this episode, Lewis explains why they had such a profound influence.

     

     

     

    Why Are There So Many Bad Bosses? (Update)

    Why Are There So Many Bad Bosses? (Update)

    People who are good at their jobs routinely get promoted into bigger jobs they’re bad at. We explain why firms keep producing incompetent managers — and why that’s unlikely to change.

     

    • SOURCES:
      • Nick Bloom, professor of economics at Stanford University.
      • Katie Johnson, freelance data and analytics coach.
      • Kelly Shue, professor of finance at the Yale University School of Management.
      • Steve Tadelis, professor of economics at the University of California, Berkeley Haas School of Business.

     

     

    583. Are We Living Through the Most Revolutionary Period in History?

    583. Are We Living Through the Most Revolutionary Period in History?

    Fareed Zakaria says yes. But it’s not just political revolution — it’s economic, technological, even emotional. He doesn’t offer easy solutions but he does offer some hope.

     

     

     

    Extra: How Much Do You Know About Immigration?

    Extra: How Much Do You Know About Immigration?

    The political debates over immigration can generate a lot of fuzzy facts. We wanted to test Americans’ knowledge — so, to wrap up our special series on immigration, we called some Freakonomics Radio listeners and quizzed them.

     

    • SOURCES:
      • Zeke Hernandez, professor at the Wharton School at the University of Pennsylvania.