What's Next for 23andMe?

 

Less than two hours before our local genealogical society's monthly meeting the other night, one of the group's board members sent me a text. Linked to an article she had found regarding last Tuesday's startling resignation, en masse, of all board members of genetic testing company 23andMe, she asked, "How will this affect us?"

My answer, as usual, was, "It depends."

The sticking point is whether the (hopefully) forthcoming plan of action in response to this resignation will lead to a successful outcome for the business, of course. I'm no financial analyst—and am certainly not invested in the company, other than in using their products and advising others in interpreting their test responses—but accurately determining what is next for 23andMe can only follow more information. Lots of it.

There is far more that this organization is involved in than the direct-to-consumer DNA test kits many of us have used in building our family tree. Just perusing the 23andMe blog gives an idea of the wide circle cast by the company's mission, involving partnerships in drug development and genetic health research and education. And yet, in those many aspects of the company's development, momentum is faltering. 

The termination of one exclusive partnership with pharmaceutical giant GlaxoSmithKline last year may be one difficulty faced by 23andMe's embattled CEO, but issues such as this only serve to remind us of the other challenges the company has faced over the years, and the organization's inherent survival gene which still seems to be part of its makeup. Yet the recent—and yet to be finalized—$30 million settlement in a class-action lawsuit regarding a 2023 data breach isn't helping the company's financial standing, despite most of that payout likely to be covered by insurance policies.

While 23andMe's board of directors has spent significant time in negotiations with its founding member and CEO, Anne Wojcicki—whose preference in the face of the public company's falling stock valuation is to take the company private—lack of a "fully financed" plan to do so was the impetus for the en masse resignations.  Indeed, falling stock prices—dropping well below the dollar mark following the resignation announcement—only accentuates the company's recent failure, year over year, to report a profit.

While we, as genetic genealogy enthusiasts, may appreciate the insights companies like 23andMe provide us in placing those mystery ancestors in their proper place in our pedigree charts—or even helping us better address the physical challenges bequeathed upon us by those same ancestors' health legacies—those same results we've received through their tests are beholden to the continued operation of the organization which first provided us with that information. With the pay-once but forever-access model which DNA testers now have for checking out our latest DNA matches, 23andMe's business model sorely needs a compelling way to convert to a subscription-based model, yet it has failed to do so to a sustainable level for ongoing operations.

Looking at the situation from a systems-based model, it is clear that the multiple inputs needed to sustain such a business are complex. If only we could all promise to buy multiple DNA kits for holiday gifts this year to solve those bigger issues, that would be wonderful. But worse than helping in the short run, it would likely only perpetuate the problem. Perhaps in hunkering down for the worst, those of us with that well-meaning get-around-to-it gene might consider harvesting all the information needed to get in touch with our 23andMe DNA matches now, before those overarching systems break-downs edge into an inevitable death spiral.