Kteily says that by the time the company launched these services, it was too late. Customers had already abandoned the platform. “I think they came up with something viral, which was the concept of where you come from. People found that so fascinating. But once you know that information, you won’t go back five years later and pay a subscription,” he says.
Sumit Nagpal, a serial entrepreneur in the health tech space and a self-described early adopter of 23andMe, says he was among the company’s subscribers but eventually stopped logging into the company. online platform. He says the reports didn’t provide much “actionable” health advice. “It never had any life-changing value,” he says.
Nagpal’s latest company, Cherish, which he founded in 2020, is developing radar-based sensor platforms equipped with artificial intelligence for health and safety monitoring. He believes 23andMe could have had more offerings sooner, for example, personalized advice on diet, exercise and other lifestyle factors on an ongoing basis to keep customers engaged.
In many ways, the 23andMe enigma is similar to the the instant pot problem. Their initial product was so successful that people never had to go back to buy another one.
23andMe has tried to diversify its revenue streams, making deals that allow pharmaceutical companies to mine its vast genetic database for drug leads. It partnered with Genentech in 2015, and when that ended, it struck an exclusive deal with GlaxoSmithKline in 2018. The pharmaceutical company invested $300 million in 23andMe, but that deal expired in 2023, with no major partners stepping in to take the place of Glaxo. And although 23andMe recently closed its drug discovery unit, it continues to advance drug candidates it already has in clinical trials.
Now, the company has focused on growing its telehealth business. In 2021 it acquired the Lemonaid telehealth service. Taking advantage of the Ozempic, Lemonaid craze began offering Ozempic, Wegovy and compounded semaglutide in August through a weight loss program. After an initial consultation with a doctor, membership costs $49 per month with weight loss medications starting at $299 per month for compounded semaglutide. “The addition of weight loss monitoring for our clients fits directly into our strategy of providing health services to approved individuals through preventative actions,” Wojcicki said on an earnings conference call in August.
But it may not be enough. Estelle Giraud, CEO and founder of Trellis Health, which is creating a pregnancy health app, says the anti-obesity space is already crowded. 23andMe will have to prove that it offers something unique compared to other telehealth providers. “If I’m a customer looking for a telehealth solution, it all comes down to brand and trust,” he says.
And establishing trust may be 23andMe’s biggest challenge after last year’s data breach exposed personal information from nearly 7 million customer profiles. It doesn’t help that there has always been confusion among users about the company’s data practices. Clients must give their express consent to share their de-identified genetic data for research purposes, but a survey conducted in 2017 and 2018 conducted by university researchers found that more than 40 percent of customers surveyed did not know that using and sharing customer data was part of 23andMe’s business model. When users opted to share their data for research, many of them probably didn’t realize that “research” included helping big pharma develop new drugs.
