Fixing the 23andme business model—some lessons from primary care physicians (PCPs). Another 6month update on 23andme—the board is gone, drug discovery is gone, cash is near the end and the company is trying a last ditch effort to to monetize access to its genetic data. 23andme’s issue was never that the science was unsound, or that the company didn’t have a noble mission, or that customers didn't benefit from the data—it's that it couldn’t figure out how to turn a one-time genetic test into a sustainable business. What can 23andme learn from PCPs? PCPs provide physician services for the screening and prevention of disease. The problem for PCPs is that value capture is poor— a PCP correctly diagnosing eg diabetes has value accrue to the patient and elsewhere in the health system (fewer ER visits etc…), not to the PCP. So instead of charging in a pure fee-for-service (ffs) fashion, PCPs have found two business models that work: (a) recurring revenue model (aka membership, eg one medical) (b) vertically integration model, to push patients to high margin inelastic demand services (eg PCP refers knee surgery to the orthopedist; integrated health system benefits from controlled diabetes; etc…) Like PCPs, 23andme strives to use genetic data to screen + prevent disease. Like PCPs, FFS for a one-time genetic test doesn’t work as a business model. Like PCPs, 23andme has (had?) the option to: (a) switch to membership model This has worked great for its competitor Ancestry, who charge a monthly fee to access the genealogical trees built by the genetic data, and has expanded their business into other aspects of building family history/cohesion. Business seems stable/works well. ? Probably too late for 23andme to compete in that space, though I could imagine a nice company built around serial measurement of clonal hematopoiesis and/or other characteristics measurable from a serial blood draw. 23andme’s customer database could be a nice starting point for selling those services. (b)vertically integrate and entice to high margin services 23andme purchased lemonaid and pushed to get into telehealth, but it was unclear to me how good testing was as a top of funnel to entice people into the health services. They also tried to use data to build drug discovery programs. However, it was expensive and they weren’t able to connect their datasets to actual value creation quickly/cheaply enough They probably should have vertically integrated years ago by selling itself to a pharma, rather than try to build out programs from scratch. That ship has probably sailed...
Philippe Samama
1 个月
Except that turning your DNA over to a Pharma would’ve sent many folks into a panic…there’s a lot of sentimentality around this
Science CDO - Head of AI/ML for Drug R&D ??- Bridging Science ??, Data ??, and Technology (AI) ?? to Help Life Sciences Companies Bring Better Products ?? to Market Faster - Linkedin Pharma Top 1%
1 个月Genetic is "what can happen to you" - but it depends on many factors (environment / life style / ...); Combine 23andMe one time testing + longitudinal health service (something like Neko Health) and you would get a recurring service, with personalized recommendations based on your genetics, and yearly update based on key health parameters; combine that with an app that can make suggestions based on user imputs (e.g.: questions) or on-going recording from health trackers - that could be a winning combination! Conclusion: Neko Health should buy 23andMe ??