[nirvael]

Seems like 23andMe is two businesses: consumer and a B2B data business.

The consumer side is clearly struggling because of the problems mentioned in the article (they only need one test in their life, public perception is bad because their security has had breaches). So this needs a pivot where you can change the public's perception from a one-time test to continuous health monitoring through blood markers or something similar, expand to tests other than genetic and make it a repeatable, accurate test that gives you more information (and obviously stop leaking people's data).

But why not focus on the B2B side? Sell access to their databases. I'm sure computational biology and/or pharma companies need this information. It makes sense to do vertical integration by manufacturing your own drugs, but not for a cash-strapped business that has little incoming revenue to sustain further development. Presumably they are selling their genetic data, but I don't get why it's not giving them a revenue stream. Let GSK manufacture the drugs using your genetic info, with a profit share for any drugs made this way. They mention a collaboration with GSK in the article, but why was this stopped?

[dabber]

> Presumably they are selling their genetic data, but I don't get why it's not giving them a revenue stream. Let GSK manufacture the drugs using your genetic info, with a profit share for any drugs made this way. They mention a collaboration with GSK in the article, but why was this stopped?

In 2018 GSK made a $300M equity investment in 23andMe as part of a 4 year collaboration (with the option to extend for a fifth year) under which GSK had exclusive access to their data for use in drug target discovery programs, but [0]:

> All activities within the collaboration will initially be co-funded (50%/50%), with either company having certain rights to reduce its funding share for any collaboration programme.

So it seems they not only lost out on 5 years of developing their B2B business, but committed to covering a portion of the R&D costs over that period as well. There were terms about profit sharing on new developments, so it was a bet.

It doesn't sound like it worked out quite as well as either sided hoped though because in October 2023 (after the 5 year agreement) they entered into another agreement but this time [1]:

> Under an amendment to their Collaboration Agreement, 23andMe will receive a $20 million upfront payment for a one year, non-exclusive data license. > [...] > for a 12-month period, and [23andMe will] offer its research services for analyses of the data over that same period. Any new drug discovery programs that GSK chooses to initiate during the agreement will be owned and advanced solely by GSK.

[0]: https://www.gsk.com/en-gb/media/press-releases/gsk-and-23and...

[1]: https://investors.23andme.com/news-releases/news-release-det...

[logifail]

> needs a pivot where you can change the public's perception from a one-time test to continuous health monitoring through blood markers or something similar, expand to tests other than genetic and make it a repeatable, accurate test that gives you more information (and obviously stop leaking people's data).

"Stop leaking data"? Sounds like a step forward.

> But why not focus on the B2B side? Sell access to their databases.

So, it's actually: try to sell your customers' data instead of leaking it? :O

Sorry if that sounds snarky, but are we sure there are enough customers who want to pay to give their data to a company so that company can immediately sell their data on to other companies?

[nirvael]

That's the conflict at the heart of the business. But do the public care enough about that? Obviously a HN audience does, but people use Google and Facebook products every day with the awareness that all that data is sold directly to advertisers. With the right messaging ("yes, we sell your data, but it's to drug companies to help make drugs that can cure your illnesses") it's possible that the conflict isnt too much of an issue.

[rchaud]

Drug companies pay pretty well for clinical trials, so why would anyone pay 23andme for their own data, so that 23andme can turn around and sell it to drug companies?

[nirvael]

These are different scenarios, clinical trials are experiments not just genetic information gathering.

[pinkgolem]

i mean, customers are angry if personal data leaks, but a lot of legit usecases can be done with agregate data.

[ibern]

The real value they tried to build was in pharma, which is much more lucrative than either of those. Their data is somewhat interesting but limited by the lack of rich phenotypic/clincial information paired with the genetics.

[michaelt]

> But why not focus on the B2B side? Sell access to their databases. I'm sure computational biology and/or pharma companies need this information.

Are you sure?

I mean, presumably there are different types of DNA testing. Doesn't 23andme run basically the cheapest test they can get away with? A user can't tell if the test measured 16 bytes or 1.6 gigabytes of genetic information, and if I was trying to launch a consumer DNA geneology service, I'd want to get network effects, so I'd want a test that was very easily affordable.

Who says their records are thorough enough to be valuable to drug companies?

[dabber]

> Doesn't 23andme run basically the cheapest test they can get away with?

No. That's part of why they're test is so expensive and their financials are so lackluster. They are apparently using a customized version of the lllumina's Global Screening Array according to their website and several other sources that show up in search results. That's a legit research quality genotyping platform from a world leading laboratory in the genetics space. This post from 2020 has a decent high level overview about it in the context of 23&me [0] though it might be slightly outdated by now and I've never heard of the company (xcode?) that wrote it (nor did I bother to look at what their product is.)

> If I was trying to launch a consumer DNA geneology service, I'd want to get network effects, so I'd want a test that was very easily affordable.

That's a pretty neive perspective. It ignores the value propositions of 23&me's product, economies of scale in the direct to consumer genetic testing space which were in large part enabled by 23&me's success, and all of the thorny bits related to questions about accuracy when presenting results. Not to mention that 23&me certainly capitalized on the network effect (which is being criticized a fair amount in this thread.)

> Who says their records are thorough enough to be valuable to drug companies?

GSK. See my other comment in this thread [1]

[0] https://www.xcode.life/23andme/23andme-v5-chip-dna-raw-data-...

[1] https://news.ycombinator.com/item?id=39202583#39204621

[nirvael]

You make a good point. It's possible it's not useful to them and that's why they can't generate enough revenue from it. I assume the sales pitch to pharma is that it's a wide database, rather than deep.