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1:27

A There it Steven Double. The

1:34

key information came from an interview we

1:37

did with Anne Wojcicki, the founder and

1:39

CEO of 23andMe. A

1:41

couple years after we published that piece,

1:43

23andMe went public after merging with what's

1:45

called a SPAC or a special purpose

1:48

acquisition company. It was backed by Richard

1:50

Branson. This looked to

1:52

be a brilliant move. The company

1:54

was valued at around six billion dollars.

1:57

It entered the stratosphere because we all

1:59

decided to... take these tests. It got

2:01

very popular. That is Ralph

2:04

Winkler. He is a Wall Street Journal

2:06

reporter who covers health technology. And

2:08

what is 23andMe worth now? Right

2:11

now the valuation is zero. So

2:14

today on a bonus episode of

2:16

Freakin' on this radio, we wanted

2:18

to replay that original conversation with

2:20

Ann Wojcicki with updated facts and

2:22

figures. And after that, we'll

2:24

speak with Ralph Winkler to hear about

2:26

all the things that went wrong with

2:29

23andMe and what might still

2:31

go right. Thanks

2:34

for listening.

2:37

In 2018, police in Sacramento, California

2:39

arrested a man who had been

2:41

eluding them for decades. The

2:44

Golden State Killer, as he'd been known, was

2:46

responsible for more than a dozen murders

2:49

and 50 rapes. This

2:51

morning, new details of the rigorous

2:53

investigation that detectives say brought down

2:55

the Golden State Killer more than

2:57

40 years after his alleged killing

2:59

spree began. Detectives

3:02

had uploaded a DNA sample

3:04

from the suspect to an

3:06

open source website called GEDmatch.

3:09

The site provides, in its words, DNA

3:12

and genealogical analysis tools for

3:14

amateur and professional researchers and

3:17

genealogists. We've

3:19

just learned from multiple law enforcement

3:21

sources that investigators use genealogy websites

3:24

to help link D'Angelo to what

3:26

was previously the unknown mystery DNA

3:28

of the attacker. GEDmatch

3:30

lets anyone upload raw DNA

3:33

data from home genetics testing

3:35

companies like 23andMe and

3:38

ancestry.com. It turned out that

3:40

at least 24 relatives of

3:42

the suspect were included in

3:44

the GEDmatch database. The

3:46

police, by cross referencing the suspect's

3:48

DNA data against census

3:50

data and cemetery records, were

3:53

able to confirm that they had the right guy. Police

3:57

say the 72-year-old appeared surprised when they

3:59

swam warmed his home Tuesday evening. More

4:01

than 100 pages of

4:04

heavily redacted court documents read like

4:06

a real-life CSI, revealing that a

4:08

DNA sample recovered this April sealed

4:11

the case against him. How

4:13

remarkable is that? That a

4:15

bunch of civilians just looking to fill out

4:17

their family trees had inadvertently

4:20

crowdsourced the capture of a

4:22

murder. But not

4:24

everybody saw it as remarkable in just

4:27

that way. I'm Anne

4:29

Wojcicki and I am the co-founder and CEO

4:31

of 23andMe. 23andMe

4:34

has become world famous for their mail-in

4:36

DNA spit kit. You send them some

4:38

saliva and for around $100, they'll

4:41

send you an ancestry profile and

4:43

for another $100, a lot of

4:45

health information from your purported risk

4:48

of various diseases to whether

4:50

you should be able to detect the smell of

4:52

asparagus in your urine. But

4:54

since the beginning, Wojcicki says she

4:56

was hypersensitive about how and where

4:58

the personal data of 23andMe customers

5:00

would be used. In our

5:03

consent form, we specifically thought about how

5:05

do we make sure that we're not set up

5:07

for crime, for

5:10

the FBI to come and use this. One

5:12

story we read about recently was how the Chinese government

5:14

has been using DNA testing, much of it driven by

5:17

technology and data from the US to

5:20

enforce what some human

5:22

rights advocates see as discrimination against racial groups

5:24

like the Uyghurs. Does 23andMe

5:26

think about or participate in some

5:28

kind of international regulatory structure to

5:31

ensure that this kind of data

5:33

is not used for discrimination,

5:36

depression, et cetera? Since

5:38

the early days of the company, there's

5:41

a group called the Ethical Legal Social Community

5:43

that has actively followed 23andMe and

5:46

what we're doing and what our consequences

5:48

are. So what's interesting is like people

5:50

often compare us to the tech world and

5:52

what's happening now. There's a big

5:55

difference because there's never really been an

5:57

ethical legal social group following Google and

5:59

Facebook. and others, but we've always

6:01

been hounded by this group. And

6:04

frankly, I'm grateful to them now, because I

6:06

think that we

6:08

premeditated a lot of what's

6:11

coming in things like the Golden State

6:13

Killer. If

6:16

you think the arrest of the

6:18

Golden State Killer represents a revolutionary

6:20

use of personal DNA, just

6:23

wait, because the revolution is only

6:25

just beginning. Today on

6:27

Freakonomics Radio, what the revolution looks

6:29

like from inside 23andMe, and from the user end. This

7:00

is Freakonomics Radio, the podcast

7:02

that explores the hidden side

7:04

of everything. With your host, Stephen

7:07

Dunder. Anne

7:19

Wojcicki's own family tree is pretty

7:21

impressive. She's the youngest of three

7:23

daughters born to Stanley Wojcicki, who

7:25

was a professor of physics at

7:27

Stanford, and Esther Wojcicki,

7:30

a journalist and beloved educator who

7:32

has won many awards. Esther

7:34

recently published a book called

7:37

How to Raise Successful People.

7:40

One of their daughters, Janet, is

7:42

a globe-trotting anthropologist and

7:44

epidemiologist. Here's Anne again. She's

7:47

living in Japan now. She has studies in

7:49

Rwanda and in rural Alaska. And then

7:51

there's YouTube. Come on, don't leave out

7:54

YouTube, sister. Oh, she's interesting too.

7:56

I love her too. Susan

8:00

Wojcicki, the oldest sister, was

8:02

CEO of YouTube, which is

8:04

owned by Google. She was

8:06

Google's first marketing manager, its

8:08

16th employee overall. But

8:11

her Google connection predates her

8:13

employment. When the company was

8:15

just getting started, Susan Wojcicki rented out

8:17

part of her house to Google founders Larry

8:19

Page and Sergey Brin. The

8:21

Google Wojcicki link expanded when

8:24

sister Anne Wojcicki, shortly after

8:26

founding 23andMe, married

8:28

Sergey Brin. They had

8:30

two kids and divorced eight years later in 2015. Anne

8:35

Wojcicki, who is now 50 years old,

8:37

went to college at Yale, where she majored

8:39

in biology and played varsity ice hockey. After

8:42

graduating, she went to work in finance,

8:45

primarily as a healthcare analyst for investment

8:47

funds. Her focus was on

8:49

biotech firms. Wall Street was

8:52

my, like, really in-depth look at

8:54

the healthcare system and how it works. And

8:57

I started to realize that if

8:59

I was a healthy 100-year-old,

9:02

if I was never diabetic, I never had heart

9:04

disease, I never had, you

9:07

know, walking issues, I'm

9:09

not generating money for the

9:11

healthcare system. There's not a money-making

9:14

opportunity in saying, well, I'm going to solve how to

9:16

keep you healthy. Wojcicki realized

9:18

that the U.S. healthcare system

9:20

and its investors were really

9:22

good at monetizing illness. What

9:25

about wellness? Not

9:27

so profitable. The problem is

9:29

that the payment system is set up that

9:32

you pay for treatments

9:34

of conditions, but you

9:36

don't pay for ongoing health. If

9:39

I stay healthy, like, no one

9:42

really cares. Except for

9:44

me. The consumer voice

9:46

was really not represented. And

9:49

it's a shame that there's not really a

9:51

business model in place to say, I'm going

9:53

to reward you for keeping you healthier. And

9:57

then I read that Larry Page, one of the

9:59

co-founders of Google... told you that even

10:01

though you were doing this pretty interesting good

10:03

work on Wall Street, that you were really

10:05

part of the problem and not the solution.

10:09

How true is that story? Is that a really big

10:11

push for you deciding, hey, I'm going

10:13

to get out of this business of

10:16

profiting from this kind of misaligned healthcare

10:18

system and instead try to start a

10:20

company that does something different? Well,

10:23

by the end of my

10:25

tenure on Wall Street, after 10 years,

10:27

I was sort of in this very

10:29

cynical place of like, my sister would give

10:31

a talk. She does work on obesity

10:33

and she would give a talk about obesity in

10:35

the coming crisis and how it's going to

10:38

be detrimental to society. I would give

10:40

the corollary talk that's like

10:42

obesity, the ultimate money-making opportunity.

10:45

You don't say, oh, obesity in China. These

10:48

people aren't just going to get sick and die

10:50

right away. It's 20 years of

10:52

heart disease, diabetes, this and that. People

10:55

would look at me like I was evil. I

10:58

was like, no, I'm just reflective of

11:00

how the system thinks. I

11:02

was becoming really cynical. Like, look, this

11:05

system, it is meant for making money off

11:07

sick people. It was at

11:10

that point I would brainstorm with people, like, what can

11:12

we do? We need a revolution. I

11:14

would complain a lot. I think one day Larry

11:16

was tired of me complaining and was just like,

11:18

in his Larry way, was like, you're either

11:20

part of the solution or you're part of the problem. It sounds

11:22

like you're part of the problem right now. It

11:26

wasn't the only motivating factor, but

11:28

it's a good reminder. In

11:33

2006, Wojcicki co-founded 23andMe

11:36

with the biologist Linda Avey and

11:38

the entrepreneur Paul Kaczenza. It

11:41

was one of the first direct-to-customer

11:43

personal genomics companies. Since

11:45

then, a few dozen DNA testing kit services

11:47

have come to market and more than 30

11:49

million people have taken a

11:52

test. A lot of people

11:54

are just in it for the family connections. That's

11:56

the main appeal of the biggest

11:59

player, ancestry.com. But 23andMe

12:01

has from the outset also offered

12:03

the option of a personalized health

12:05

report. It's a saliva test,

12:07

remember, not a blood test. It

12:09

doesn't diagnose disease. Instead, it

12:11

purports to link your genetic

12:14

makeup to potential risk for

12:16

certain diseases and the likelihood

12:18

of other traits. With

12:20

5 million customers who've bought

12:22

the health reports, 23andMe has

12:24

the world's largest database of

12:26

genetic information for medical research.

12:29

And that, as we'll hear today, comes

12:31

with a lot of complications. When

12:34

23andMe was starting out, their health reports

12:36

were not approved by the FDA. Wojcicki

12:39

didn't think they needed the approval, but the

12:42

FDA disagreed. In November

12:44

of 2013, we got a

12:46

warning letter from the FDA. Federal

12:48

law states that any kit intended

12:50

to cure, mitigate, treat, prevent, or

12:53

diagnose a disease is a medical

12:55

device that needs to be declared

12:57

safe by the FDA. We

12:59

did not believe at that time that we were a medical

13:02

device. And to this day,

13:04

you know, a lot of what we do is

13:07

very different than traditional medical devices. So

13:10

it became abundantly clear, you know, with our

13:12

warning letter, like, there's no more debate. We

13:15

are a medical device. And what we were

13:17

asked to do was to stop returning health

13:20

information. We could continue

13:22

returning raw data, and we could

13:24

continue returning ancestry information, so

13:27

we had to stop interpreting the health

13:29

information for our customers, and we had to go through

13:31

an FDA process. And what

13:33

was the response in your building

13:36

to that letter that must have felt like a punch in

13:38

the gut? It was more like,

13:40

wow, well, the onus is really on us. Like,

13:43

we own the responsibility to

13:46

prove to the FDA that this is

13:48

actually a responsible company

13:50

and product. So we went through,

13:52

you know, methodically trying to go

13:54

and get approvals for our

13:57

past reports. And it

13:59

was hard work. But if

14:01

the FDA wants data, like, wow, we're

14:03

good at generating data. And

14:05

so we'll prove it. And frankly, I am

14:07

grateful to the FDA that when I buy

14:10

a product, I have a

14:12

high confidence that it's safe. So

14:14

as much as I was upset about

14:16

this, I'm also respectful of

14:18

the position that they're in that they

14:20

have a job to monitor public safety.

14:23

In 2017, the FDA gave

14:25

23andMe permission to send their

14:28

customers genetic risk reports for

14:30

10 ailments or conditions, including

14:32

breast and ovarian cancer, celiac

14:34

disease, late onset Alzheimer's disease,

14:36

and Parkinson's disease. Here's

14:39

what the agency said at the time. These

14:41

are the first direct-to-consumer tests authorized

14:43

by the FDA, which may

14:46

help to make decisions about lifestyle

14:48

choices or to inform discussions with

14:50

a healthcare professional. We're

14:52

really trying to make a constructive

14:54

difference in the healthcare space. And

14:57

I'm using all that information I had

15:00

to empower the customer, empower

15:02

all of us to take

15:04

charge and make a difference and actually, like,

15:06

be healthy. Right. So

15:09

by pursuing a vision

15:11

that is about a

15:13

solution and that doesn't monetize

15:15

illness, you started a company

15:18

that's now valued somewhere around between

15:20

$2 and $3 billion. Is that about

15:22

roughly right? You know,

15:24

it's kind of the least of my worries. Like,

15:26

valuations are always important, but to me, the ultimate

15:28

financial success. When I can point to,

15:30

like, hey, like 20 million people didn't die in

15:32

their 40s because of me, then I'll feel like,

15:34

yeah, that's worth bragging about. I

15:37

mean, the irony, though, is that

15:39

you have successfully monetized the, I

15:41

don't know exactly what to call

15:43

it, the curiosity about or

15:45

the pursuit of wellness and

15:47

or connection. I

15:50

think I actually disagree. One thing that

15:52

drives me crazy in healthcare is that

15:54

there's always this assumption that you

15:56

and I, the individuals, the lay

15:58

people, the non-PhDs, the non-MDs,

16:00

that we are incapable of taking

16:03

care of ourselves. And

16:05

I think people, when they're sick or

16:07

they're given the opportunity, like they actually

16:09

want to step up. They just need

16:12

that advice and they need the information.

16:14

You know, the majority of people who

16:16

are thinking about getting pregnant

16:18

don't necessarily get carrier status

16:20

screening before the pregnancy. But

16:23

if I walk into my doctor and I

16:25

say, hey, I'm thinking of having children and

16:27

I'm a carrier for cystic fibrosis and my

16:29

partner's a carrier for this mutation, that's

16:32

a helpful dialogue. So

16:34

we potentially fill in clues

16:36

that wouldn't have otherwise

16:38

come up. And do you feel

16:40

that physicians and medical providers are

16:43

taking this information in the spirit that you

16:45

intended? Well, I think we have a long

16:47

ways to go here. We've put a fair

16:49

amount of resources in the last couple of years

16:52

in terms of outreach to key

16:54

providers. The next phase

16:57

of this company is specifically about helping

16:59

people take action with this genetic information

17:01

and also helping the medical community

17:04

value consumers coming with their genetic information.

17:06

The thing I'm most proud of is

17:08

that we have shown that you can

17:10

get this information on your

17:13

own, truly direct to a consumer,

17:15

without a physician and without a

17:17

genetic counselor. And I think

17:19

that's a monumental step for the customer,

17:21

for the individual. And the reality is

17:23

the average person has less than 10

17:25

minutes with their doctor. This is an

17:27

opportunity for people to educate themselves in

17:29

a way that best suits them. If

17:32

I'm a doctor or the AMA

17:34

hearing you say that, I shudder

17:36

a little bit though, because most doctors I

17:38

know and most literature I've read on it

17:40

says that one of the biggest problems that

17:42

the medical profession has now is

17:44

people coming in with information that's

17:47

often incomplete or wrong. So

17:49

persuade me that you

17:52

defend that position because it's the right

17:54

position and not just because you've chosen

17:56

for your firm to go the route

17:58

of direct to consumer. consumer rather

18:01

than with physician or

18:03

genetic counseling content?

18:06

Well, I think that the consumer

18:08

today often doesn't have

18:10

a relationship with a

18:12

primary care provider. So, I do

18:14

think that there's a responsibility for the consumer

18:16

to get educated, to have information,

18:19

to keep track of it. So,

18:22

as you spoke, you made the

18:24

assumption like, well, some of the information

18:26

is incomplete or wrong. Like,

18:28

we just went through the FDA process.

18:31

We prove the information we have is

18:34

valuable and is correct. There

18:39

are a couple important caveats to consider

18:41

here. Many other

18:43

personal genomics companies do require some

18:45

sort of physician approval or genetic

18:48

counseling to ensure that customers don't

18:50

misinterpret the risk information or perhaps

18:52

make poor decisions based on it.

18:55

Also, even though a 23andMe

18:57

risk report is definitively not

18:59

a diagnosis, you can imagine

19:01

how learning about a risk

19:03

can carry some costs in

19:05

addition to the benefits. It

19:10

sounds as though you believe in the upside of knowing

19:13

as much as you can as early as you can,

19:15

but I'm guessing you can also empathize with those people

19:17

who think that, wow, you know, just

19:19

having that word in my head, Parkinson's

19:21

or Alzheimer's, might exact a cost that might

19:23

not allow me to live my life

19:25

to the fullest. I think

19:27

this is where I go to that whole choice again.

19:30

Too much of healthcare is forced on us.

19:34

I think that healthcare should empower

19:36

people with more choice. And

19:38

it's like when the core tenants that we have, it's

19:40

like if you don't want to know your Alzheimer's results,

19:42

you absolutely should not know them. And

19:45

that's your choice. And so

19:47

that's why we actually do have an

19:49

additional layer of consent on top of

19:51

Parkinson's, Alzheimer's, and mass cancer. So

19:54

we want to make sure that our customers are

19:57

never shocked and surprised. Two

20:02

years after 23andMe was cleared by the FDA

20:04

to deliver those 10 risk

20:06

reports, it launched a new health report

20:09

for type 2 diabetes, one of the most

20:11

common diseases in the world. A

20:14

recent CDC study estimates that roughly

20:16

40% of the adult U.S. population

20:18

is expected to develop diabetes during

20:20

their lifetime. It's the seventh leading

20:23

cause of death in the U.S. The

20:26

23andMe risk report for diabetes is

20:28

particularly interesting in that it was

20:30

developed exclusively using 23andMe customer data,

20:32

more than 2.5 million

20:34

customers who consented to participate.

20:37

It also used a new method of

20:39

detecting disease risk. One

20:42

of the most interesting things that's come up

20:44

scientifically over the last

20:46

decade is these what's called polygenic

20:48

risk scores. So not

20:50

looking at just one gene

20:52

and a disease, but looking

20:54

at thousands or even millions

20:56

of small effect sizes and

20:59

adding all those up to see, wow,

21:01

this really adds up to a risk

21:03

factor for people. And we

21:05

feel like this is a lot of

21:07

the direction where healthcare is going to go

21:10

is in these polygenic risk scores. You

21:13

might have expected that a new diabetes

21:15

risk test would generate a lot of

21:17

enthusiasm, but much of the immediate

21:19

response was critical. Polygenic

21:21

risk scores work best for people of

21:24

the same ethnic background as those who

21:26

provided the data that goes into the

21:28

risk algorithm. And 23andMe's

21:31

database is overwhelmingly composed of

21:33

people of European descent. Diabetes

21:37

is an especially significant threat for

21:39

African Americans. An article

21:41

in Wired argued that the new 23andMe

21:43

diabetes risk test is tuned

21:45

to be most useful for skinny white people.

22:00

know, it's also voluntary. So I

22:02

don't know what kind of

22:05

diversity you're trying to encourage, but let

22:07

me just ask you about one particular

22:09

element of that question. As

22:11

I'm sure you well know, there's a really

22:13

long and terrible history in this country of

22:15

African Americans being exploited by the medical system.

22:18

You know, some of the stories are

22:20

just truly horrifying. And the

22:22

data show that African Americans today are

22:24

still much less likely to participate in

22:26

the healthcare system, whether that's a direct

22:28

cause or not, who knows. And

22:31

that's got a serious downside. So are we seeing

22:33

that same reluctance now, do you think, among the

22:36

African American population, maybe other populations,

22:38

that there's just a

22:40

skepticism, the idea of putting their

22:42

DNA into a database like this

22:44

is too frightening. And if that's

22:46

true, what are

22:50

we, the universe, missing out on by not

22:52

having the sample be as representative as we

22:55

might like? Yeah, I think that's

22:57

a great question. So first, you know,

22:59

we have 20%, roughly, of our customers

23:02

are non European. So while

23:04

that's a small percent, that's

23:08

on our size and scale, it

23:10

is the largest such communities out

23:12

there. So we're actually really

23:15

able to do a lot of research on

23:17

different communities. That said,

23:20

I'm absolutely empathetic to some of

23:23

these communities that have been poorly

23:25

treated. Secondly, we're doing a

23:27

lot to try and improve relationships

23:30

there. And so we

23:32

actually have a global genetic

23:34

diversity project, where we are

23:37

recruiting individuals from specific countries

23:39

like Tanzania, and Cameroon, Chad.

23:42

So we have a bunch of countries where we're actually

23:44

offering, you know, free testing for

23:46

people to come in. And part

23:48

of the reason why we do that is the

23:50

more people who come in from those communities, then

23:52

we can actually develop the reports to

23:55

be representative of all populations. So

24:00

building a risk test that's useful for

24:02

as many people as possible, that's one

24:05

challenge. But there's another

24:07

big challenge, perhaps far greater, when

24:09

it comes to dispensing personalized health

24:11

risk reports. How do

24:13

you translate the knowledge of risk

24:15

into action? How do

24:17

you ensure that someone who learns they're at risk

24:19

for some major disease actually does

24:21

anything about it, other than worry

24:24

or get depressed? We

24:26

have a lot of information on the site in terms

24:28

of like, what are resources for

24:30

you so that people look at

24:32

this and they at least know where to go. We're

24:35

actively now looking at programs of

24:38

ways to help people better understand food and

24:40

behavior. And our first step with that was

24:42

this partnership we have with Lark. It's

24:45

AI coaching, and it's trying to

24:47

help people change their behaviors. And

24:50

I think that's sort of the next generation

24:52

of what's coming. So give me

24:54

whatever evidence there may be that

24:57

learning about an increased risk via

24:59

23andMe or some other genetic test

25:02

actually leads to changes in individual

25:04

behavior. Well, we actually

25:06

did a study with Robert Greene at

25:08

Harvard, and he looked at our saturated

25:11

fat report. And he was looking

25:13

at what people want to do with

25:15

this information. And he found that

25:17

I think it was even at six months over 40% of

25:19

our customers, whether they

25:22

had an increased risk of being overweight

25:24

from saturated fat or not, they were

25:26

looking to make changes to their diet. What

25:28

does that mean, looking to make changes? And

25:31

that was sustainable at six months. Like doing

25:33

it or looking to do it? Well,

25:36

what we find is that a lot of people

25:38

don't know, like, what is saturated fat?

25:40

Well, what do I do? People

25:42

get a BRCA result or they get carrier

25:44

status information. They write into us and

25:47

they tell us what they are doing. And

25:49

it's all over the world that I end up

25:51

meeting and telling me about what they learned and

25:53

how they've changed. A

26:00

study that would just be cited, Robert Greene

26:02

of Harvard, was one of several co-authors. It's

26:05

not quite as persuasive as one might hope. It's

26:08

called Diet and Exercise Changes

26:10

Following Direct-to-Consumer Personal Genomic Testing,

26:14

and it involved an online survey of about

26:16

a thousand users of 23andMe and another personal

26:19

genetics company. First of all, keep

26:21

in mind something we've said on the show many,

26:23

many times. Self-reported data

26:25

are not necessarily the

26:27

most robust data, and

26:30

I'm putting that kindly. This

26:32

survey asked people about their diet

26:34

and exercise habits just

26:36

before they received their health risk reports,

26:39

and again six months later. The

26:41

study's authors write, although nearly

26:44

a third of participants reported making

26:46

diet and exercise changes that were

26:49

directly motivated by their personal genomic

26:51

testing results, there

26:53

was no consistent evidence that

26:55

specific genetic risk information received

26:58

from personal genomic testing were

27:01

associated with the specific diet and

27:03

exercise variables that we measured. In

27:06

other words, maybe people who sign

27:08

up for a genetic risk report are the

27:10

kind of people who are already motivated to

27:12

make a change, and getting the

27:14

risk report may be a consequence

27:16

of that change, not a cause. We

27:19

found another study suggesting this explanation

27:21

may be the truer one. So

27:28

I am looking at

27:31

a 2016 British Medical Journal report

27:33

about whether genetic testing leads

27:36

people to alter their lifestyles or behaviors, and

27:38

it finds basically it doesn't. It says, quote,

27:40

expectations have been high that giving people information

27:42

about their genetic risk will empower them to

27:44

change their behavior, to eat more healthily or

27:47

to stop smoking for example, but we have

27:49

found no evidence that this is the case.

27:52

So we know behavior change is

27:54

really hard, and I'm just curious

27:56

I guess about holistically overall confidence

27:59

that the information... will actually

28:01

be a net gain. I'd

28:03

throw the Larry Page quote back at you. Like,

28:06

if you're really that down on humanity,

28:08

that you don't think people can change

28:10

their behaviors and there's no way of

28:12

getting them to change their behaviors, it's a

28:14

really sad outlook. And

28:16

I believe that there is a way to

28:18

do that. And we just haven't figured

28:21

out the right way. And I look

28:23

at a lot of these

28:25

cognitive behavior tools that are online that

28:28

are working. Like, honestly, you look at the

28:30

diabetes prevention program that started in the

28:32

early 2000s and that

28:35

that was better than most drug therapies

28:37

out there. So there

28:39

are ways to get people

28:41

to change their behavior. I'm

28:43

really optimistic about the

28:45

potential of the internet. I think

28:47

it's a sad state that the

28:50

majority of the medical world has

28:52

essentially resigned themselves that people

28:54

are not willing to change. And

28:57

I'm a believer in humanity that

29:00

people, given the right tools, I

29:02

think people will step up. I

29:05

am so optimistic about your

29:07

optimism, and I'm generally very

29:09

much an optimist as well. But the

29:11

only thing I would say on this

29:13

point in particular in terms of especially

29:15

personal health is that we

29:18

do have a lot of data in

29:20

the modern era when the risk factors

29:22

to personal health have been really pronounced

29:24

in part by the abundance and cheapness

29:26

of low-grade food and

29:29

the ability to be really sedentary. And

29:31

what we see is that even though we have known for quite

29:34

a long time now what a good diet looks like,

29:36

what good sleep looks like, the

29:38

dangers of smoking, the benefits of exercise, et cetera,

29:40

et cetera, et cetera, the vast

29:42

majority of people are not able to

29:45

commit themselves to that routine even

29:48

though the knowledge is there. And it speaks,

29:50

I think, to a lot of things that

29:52

are complicated about humans, which is things

29:55

that are pleasurable are really hard to

29:57

constrain. And I just wonder if maybe...

30:00

The issue is that the people

30:02

like you who are incredibly

30:04

accomplished and intelligent, but also

30:07

disciplined, maybe assume

30:09

that the rest of

30:11

us are as disciplined as you are and

30:13

whether that's a sort of disconnect. I

30:17

base more of this experience and

30:19

even a lot of my customers, like

30:22

customers all over the world that I end

30:24

up meeting or people who are doing

30:26

my hair for a talk and telling

30:28

me about what they learned and how

30:30

they've changed. I think the one thing

30:32

to recognize, it's absolutely hard. It's

30:35

much easier to say, here's a pill. You're high

30:37

risk for type 2 diabetes or you're pre-diabetic, here's

30:39

metformin, like take a pill and be done. It's

30:42

harder to change behavior and

30:45

that's 100%, but it doesn't mean it's

30:47

impossible. And there's something about your

30:49

DNA of getting something that's in black and

30:51

white that's like, wow, we should potentially really

30:54

take this seriously. Coming

30:57

up after a quick break, the clock

30:59

is always ticking. For

31:01

somebody with a fatal

31:04

illness, that can be maddening.

31:07

I just gave you my data. Do

31:09

something. Pre-Conomics

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Your Garage on cars.com. Anne

32:48

Wojcicki is CEO and a co-founder of

32:50

the personal genetics testing company 23andMe.

32:53

It provides for around $100 a

32:56

wealth of information about your ancestry

32:58

and for an additional fee a

33:00

report on your health characteristics and

33:02

risks. The company has

33:05

about 10 million total customers, slightly

33:07

more than half of whom buy

33:09

the full ancestry plus health report,

33:12

but those are one-time fees. Should

33:14

that be enough to justify a

33:16

valuation of several billion dollars? Here's

33:19

another way to look at it.

33:21

23andMe charges people a couple

33:23

hundred dollars to supply individual

33:25

genetic information which when aggregated

33:27

with millions of other people

33:30

creates a database that may

33:32

have massive implications for the

33:34

future of health care and

33:36

for the financial future of 23andMe.

33:40

In 2018 the British pharmaceutical

33:42

firm GlaxoSmithKline made a 300

33:44

million dollar investment in 23andMe

33:46

in exchange for the rights

33:49

to use their genetic data for drug

33:51

discovery. In addition to

33:53

GSK, 23andMe Has partnered

33:55

with or taken investments from Pfizer,

33:57

Genentech and Procter & Gamble. Well

34:00

as several non industry

34:03

partners including universities and

34:05

institutes. So

34:08

let's start with just what you're

34:10

trying to accomplish in these cases

34:12

and how your data gets put

34:14

to use. Or maybe I should

34:16

say how our data collectively get cities. Yeah,

34:19

London I always found interesting when I

34:21

was on Wall Street is that people

34:23

would consent. To be part of

34:25

research. And. Then they'd find

34:27

out that nothing had happened to their sample.

34:30

Moody mean nothing had happened to their said like they

34:32

were disappointed that nothing happened. So

34:34

cancer patients friend since consent to

34:36

a study. At Harvard friend censor Stanford

34:38

and then they find out that their

34:40

samples just sitting in a French writer.

34:43

And for somebody. With.

34:46

A fatal illness. That

34:48

can be maddening. Like. I just

34:50

gave you my data. Do. Something.

34:53

In. The early days of Twenty Three and

34:55

me we just he says they recruited

34:58

a community of sarcoma patience to share

35:00

their genetic data with the hopes of

35:02

advancing research. Sarcoma is one

35:04

of those diseases that to very

35:06

diverse on it's poorly understood. You

35:09

know it's hard for any center

35:11

to have enough patience to do

35:13

big research projects. We had all

35:16

these. People come in and we talked about different

35:18

ways we're gonna do research. And you know, consent

35:20

and we're getting their feedbacks. I member

35:22

the woman looking at me so they

35:24

and I'm gonna die in the next

35:26

four months. Or stop.

35:28

Asking me like, do

35:31

something meaningful. That's. Either

35:33

going to have an impact on me

35:35

or going to have an impact on

35:37

my children and I think about that

35:39

all the time. When I look at

35:41

academia, there's a lotta systems, you know,

35:43

like it's hard for one center on

35:46

the east coast to share samples with.

35:48

it is center on the west coast

35:50

and it became a almost insulting to

35:52

me. It's like I wanna do more

35:54

and so twenty three me as a

35:56

platform snc for people to say I

35:59

want my data. The you'd probably

36:01

and research and and frankly, Pharma

36:03

companies are the companies that are

36:05

discovering treatments for diseases. Twenty Three

36:07

Me has over one hundred and

36:09

fifty publications that we've done, and

36:12

we've done hundreds of studies. Almost

36:14

every disease has representation, so we

36:16

have over nineteen thousand people with

36:18

Parkinson's We. Have. Over a million people

36:20

who are genetically high risk for all

36:22

Simers. Eight hundred thousand people with heart

36:25

disease. Over ten thousand people with colorectal

36:27

Cancer. Seven hundred and fifty

36:29

thousand people with depression so massive

36:31

numbers were trying to allow individuals

36:34

to have an impact on the

36:36

research world and discoveries and an

36:38

improve. You know the say that

36:40

health care for all. Are

36:43

these the largest such numbers in

36:45

the world? Oh, by far,

36:47

there should be more media outcry that I'm

36:49

not doing enough Frankly, Cynics.

36:54

Might have a differently. Cynic

36:56

might say that an would

36:58

just details and origin story

37:01

about Twenty Three and me

37:03

that's based on her disgust

37:05

with how waltz meet monetize

37:07

illness but that the From

37:10

see bill uses consumer data

37:12

to partner with pharmaceutical companies

37:14

in order to monetize illness.

37:18

When we asked listeners who are so

37:21

what the most wanted to hear about

37:23

when it comes to home dna testing,

37:25

a majority dealt with privacy. The privacy

37:27

concern was one that we hear a

37:30

lot and an and another is is

37:32

frankly it's profits. So the ideas like.

37:35

Wait, A minute, I'm paying twenty three me

37:37

for a kid and the test in the

37:40

results. One hundred bucks for just ancestry year

37:42

or two hundred for health and ancestry. So

37:44

I'm paying for the service. But. Then

37:46

I read that Twenty three and

37:49

me use my genetic data to

37:51

make commercial deals with pharmaceutical companies

37:53

are so it's of nicer to

37:55

think woo. Okay, I opted

37:57

in. I understand that I really liked the.

38:00

The Advancing Science. But since you

38:02

be paying me for that instead

38:04

of me paying you could my

38:06

data is worth a lot more

38:08

to you then maybe it is

38:10

to me, right? So. That

38:12

most important thing I sound from customers

38:15

is that they wanna. See that

38:17

results. They're. Not interested

38:19

in. Like a fifty

38:21

dollar check I think. Secondly, like

38:23

we're not a profitable company. Ah,

38:25

We are doing all kinds of research

38:27

the else we have our own drug

38:30

discovery. Team. We are also

38:32

investing a lot in researching

38:34

prevention, so this the are

38:36

radical. Funding. Of like

38:39

oh all this money come in

38:41

is not there. That said, we're

38:43

really committed and I think of

38:45

this is something that we think

38:47

about quite a bit in the

38:49

long term. when we do have

38:51

a successful therapeutic on the market

38:53

or I do have a successful

38:55

way of preventing a condition, how

38:57

do I give back to my

38:59

customers And that's ten years out.

39:01

So at this stage the most

39:03

important thing I can do is

39:05

give people a sense of pride.

39:08

Of what they have done and say, here's

39:10

the papers that you've been part of. Here's

39:12

the contribution that you've had and I think

39:14

that as we. Develop therapeutics,

39:17

When that see a radical you know

39:19

cashflow King com will have to think.

39:21

About what's that right way that our

39:23

customers feel like they've benefited, you know

39:25

what the first one or two therapeutics

39:28

will. I mean

39:30

the one thing I learned from Bio

39:32

Attack is I eat at this stage

39:34

you never know I'm We have thirteen

39:36

fourteen compounds in research stage and in

39:39

development. I'm hopeful that we'll be in

39:41

humans and in the coming years and

39:43

it's diverse from you know, cancer to

39:45

as my heart disease and in a

39:48

we have this big partnership with Cs

39:50

case and what was great there is

39:52

that we needed a partner who could

39:54

help us scale. If I know that

39:57

I have a genetic discovery and I'm

39:59

sitting. on it Like, my

40:01

customers should be angry at me. I

40:04

should do whatever I can to try to

40:06

develop those sooner. And so that was the

40:08

beauty. GSK really helps us scale. How

40:11

does 23andMe protect a

40:14

customer's privacy generally? I mean,

40:17

privacy is key to the company.

40:20

So in terms of like internet security, we

40:22

do everything we can, recognizing that

40:24

there's always limits. We try to be

40:26

very real with people. When you're

40:28

online, there's always a risk. But we do

40:31

everything we can to make

40:33

sure from engineering, infrastructure, and data

40:35

security, we're doing everything we can

40:37

there. Has 23andMe

40:39

ever been substantially hacked? No.

40:43

I'm really proud of the team. We had a

40:45

lot of our core engineers from the early days

40:47

came from banking. And

40:49

I love saying like, look, your DNA is beautiful, but

40:51

would I rather see your DNA or your bank account?

40:54

So there's a lot to learn from

40:56

the banking industry. The thing

40:58

that we've really tried to pioneer is

41:01

sharing options. So

41:03

for instance, right now in

41:05

HIPAA, it's really super restrictive. And

41:07

I would say it's harmful. A

41:10

lot of the ways HIPAA functions,

41:12

it prevents any kind of beneficial

41:14

sharing. And what 23andMe

41:17

has tried to pioneer is saying, I'm

41:19

giving you options. The

41:21

thing people don't understand about privacy is

41:23

what privacy means is choice. Is

41:26

that I want the choice of saying I've opted

41:28

in and I want the choice of opting out.

41:31

Now, let's say I want to opt

41:33

into all those things, but I'm also

41:35

concerned that my data, non-aggregated, non-anonymized data

41:38

may somehow end up in the hands

41:40

of one day a healthcare company or

41:42

insurer or an employer,

41:44

present or future, or a future

41:47

partner or spouse. So we

41:49

explicitly say we never

41:51

share your individual level data

41:53

without your explicit consent. So

41:56

unless you have explicitly told us,

41:59

We can share. They are your individual level data.

42:02

We. Are never going to. When.

42:05

Someone decides to take home Dna

42:08

test whether for the health risk

42:10

profile or just for ancestry purposes.

42:13

There's. One huge variable that is

42:15

perhaps impossible to prepare for.

42:17

How the information contained

42:20

therein. Will. Affect you

42:22

and the people you know. And.

42:25

Perhaps people don't know. What

42:27

We say: The seventy two year old

42:29

appeared surprise when they swarmed his home

42:31

Tuesday evening. A very public

42:33

outcome like the capture of the

42:35

Golden State Killer may be rare

42:37

and least for now much more

42:39

common, or the revelations that can

42:42

reverberate within a given family. In.

42:44

Two thousand and Ten when an would just

42:46

ski Was still married to Sergei Brin, one

42:49

of the founders of Google. Brin.

42:51

Took a twenty three and me test

42:53

and learned he had a genetic mutation

42:55

associate with higher rates of parkinson's disease.

42:58

It's an interesting story because it was

43:01

recommended to us that there was no

43:03

reason to test because it was so

43:05

unlikely. That he would

43:08

have a habit. And so right there.

43:10

It's I can have an example where the

43:12

medical community with like don't bother getting the

43:14

information. There's. No reason to gather in

43:16

in what would you do if he did have a.

43:18

So I'm here. The convenience of having a

43:20

genetic testing company as like as like will

43:22

tell my me will put that mutation on

43:24

our chap and so we were able to

43:26

test for it and I member the moment

43:28

sitting in the kitchen and be like hold

43:30

on a second like. I think

43:32

your mom like Ces two copies of s

43:35

and you have one copy and like the

43:37

surprise of like holy cow. Like.

43:39

You guys have this and the advantage

43:41

of finding out Young's is that it

43:43

gives a lot of time to think

43:45

about what are the actions you're doing and

43:47

how do you want to try and

43:49

prevent and how. Do you want to live

43:51

your life? Did everyone in your family. Do.

43:54

A Twenty three mean Dna test?

43:56

Yeah for a while. Is bad with

43:58

have relatives editing and with. Then them with the

44:00

spit get were like no no no, it's not

44:03

a entry criteria to dinner you know, We just

44:05

were just really interested in building the family tree

44:07

in this way of super interesting. No, I

44:09

understand you learned at least one surprising

44:11

thing in the familial dna testing. Yeah

44:14

my mom called me one day and

44:16

she's like know, There's. This guy

44:18

and twenty three mean it. It looks like

44:20

we're pretty closely related to I'm and. I

44:23

I I joke his. Or his

44:26

brother is who you know who

44:28

never had children but. But lo and

44:30

behold that you arms out that. He

44:33

knows he did have a child and. Was

44:35

given up for adoption and. In

44:37

on this person who's raise as an only

44:39

child. And then suddenly logs and to Twenty

44:41

Three Me. And lo and behold, there's a

44:43

lot of us on Twenty Three Me. And

44:45

so you know it's it's been really lovely.

44:47

There's a lot of things I can see

44:49

enough similarities of my uncle, similarities with the

44:52

family, and they've. Developed the relationship is sounds like

44:54

yeah, oh yeah for sure. I know we we. We

44:56

see him quite a bit to

44:58

me when I most exciting things

45:00

that Twenty three Me as doing

45:02

is redefining family identifying people who

45:04

were part of the family that

45:06

that for one reason or another

45:08

has been disconnected As a child

45:10

of Jewish descent you know, lots

45:12

of family last Russia and and

45:14

the Holocaust and it's amazing to

45:16

be able to reconnect people. I

45:18

love It scene of I Look

45:20

Back Sell Mine the other Day

45:22

and. I saw wow, like a lot

45:24

of a couple other relatively close cousins

45:26

I need to connect with. I'm

45:29

sure you've heard a lot a

45:31

happy stories. I'm guessing you've heard

45:33

weird stories to and it it

45:35

seems that there's like. A

45:37

new literary genre being born right now

45:39

which is. You. Know the memoir

45:42

were someone discovers that the relatives

45:44

aren't who they thought they were

45:46

and you are part of the

45:48

mechanism that made that possible. And

45:50

like you said for you, got

45:52

Greek connotations and great actuality is.

45:54

But it's also they're all these

45:56

family secrets that are being kind

45:58

of. Exploded by

46:01

science and I'm just

46:03

curious. A How you feel

46:05

about the and be. I'm also curious whether

46:07

that was an unintended consequence of what you've

46:09

done or whether you kind of anticipated that

46:11

would be happening. So

46:13

I recognize you have a range of

46:15

stories. I'll. He. The

46:18

people are pretty excited about being united

46:20

and sometimes it's not easy on day

46:22

one, but. That it's It's a journey. And

46:25

I think what's so interesting about the

46:27

time period when right now is that.

46:29

All. Kinds of things that were not disclosed are

46:32

suddenly being. See. Know I

46:34

nursed. And so I think the

46:36

most important thing. We

46:38

can do is make sure that our

46:40

customers are aware of the potential. Is

46:44

this however the end of let's

46:46

say anonymous adoption as we know

46:48

and anonymous egg and sperm donation.

46:52

I think that you know egg and

46:54

sperm donors have to be aware that

46:56

this is a technology that allows people

46:58

to find. Each. Other but a lot of people

47:00

who donated over the past would say be

47:02

one sister years who are now being discovered.

47:04

I mean you can imagine what a jarring

47:06

moment that may be. Yeah, and and

47:08

I I empathize with those people like

47:11

I can imagine the shock for some

47:13

of them. The world is changing pretty

47:15

rapidly and I'm happy that one of

47:17

the unintended consequences of twenty three me

47:20

as is connecting people and. You

47:22

know my hope here is that people. Could start to

47:25

look as it's and it goes from

47:27

the weird to the wonderful people absorb.

47:29

And they can say like this is

47:31

actually pretty common. It's. A as a

47:33

thinking how boring the world would have

47:36

been if you had come along a

47:38

few thousand years ago. Kissimmee story, search

47:40

history from the bible and royal families.

47:42

So many of them are about fertility

47:44

secrets. Think about the please. It couldn't

47:46

have been written so I'm glad you

47:48

waited until the ones who says. That

47:50

now though, the a new generation of fertility

47:53

related stories. There's

47:57

something about your genetics, which is.

47:59

More. Our ball And then looking

48:01

in the mirror, there's a reveal.

48:04

That happens when you think. That is it.

48:06

So curious to because I've read

48:08

you know the book by Danny

48:10

Shapiro Inheritance it's called I have

48:12

I have read it scheme from

48:15

an Orthodox Jewish family. She was

48:17

always the blonde outlier. it's she

48:19

was very very very very proud

48:21

of her family's Orthodox history and

48:23

ancestry and so for for it

48:25

was jarring because she had no

48:27

idea that her father was not

48:30

her biological father. Let

48:32

me tell you what it's like to find

48:34

out you were wrong. Just

48:36

plain wrong about who you are

48:38

and where you come from. And.

48:42

Literally she wrote on the something Like You

48:44

To said that stronger than looking in the

48:47

mirror to. Look in the mirror one day and

48:49

see a. Stranger. Staring back at

48:51

you. That's

48:53

what happened to me. As

48:56

in the secret was kept from me for my

48:59

entire life. And.

49:01

in the middle of the night and

49:03

sometimes ask myself. This question.

49:07

Who am I? Who am

49:09

I now that I knew that says. I'm

49:15

curious why you think that

49:17

is because I. Didn't

49:20

scream at that way in my mind. I think

49:22

that you know. Who. Raises you

49:24

and the environment you're in. You

49:26

know that is so much more

49:28

powerful or meaningful than the biological

49:30

determination. and yet it seems a

49:32

lot of people say what you're

49:34

saying. I'm just curious if you

49:36

have any, I guess philosophical his

49:38

thoughts about why that poll is

49:40

so strong and deep. Fry

49:43

sick a couple things. There's something about.

49:45

Your roots, He, you're connected. To

49:47

these people, there's a story and for

49:50

some people that story is important and

49:52

for some people it's just not. And

49:54

I think that we are in a

49:56

known in society where a lot of

49:58

people don't feel good. Founded And

50:00

there's something about looking at

50:03

your dna. And.

50:05

Finding a trace in the past and

50:07

words, Ben and those roots in the

50:10

connections and understanding. Why? Why are you

50:12

the way you are today? Why do

50:14

I have these preferences? Why do I

50:16

look a certain way? Why

50:19

does my p smell like asparagus

50:21

Hits everyone's top. Question is are

50:23

you can smell? It is Yes!

50:27

I did. They like people I

50:29

think are looking for a question

50:31

of like why am I the

50:33

way I am and that's actually

50:36

a beautiful plus. Said There's spectacular

50:38

human diversity on this planet and

50:40

we're all a little bit different.

50:42

And you see mutations in certain

50:44

areas have given rise to certain

50:46

characteristics and and there's all kinds

50:48

of reasons why those mutations have

50:51

happened. Each mutation actually has a

50:53

story, and those mutations connects you

50:55

to other people into the past.

50:57

One of the favorite things my children and their

50:59

cousins of doing is looking at what Dna do

51:02

they have in common with each other? And

51:04

it's fun to look at like okay, the I genes

51:06

like who has them. In com and who

51:08

gone from other grandparents. There's. A

51:10

different way of feeling like I'm I'm

51:13

connected You I have this bond and

51:15

I think that I guess had people

51:17

are looking for meaningful connections. Coming

51:22

up after the break how an would

51:24

just use vision fell apart. I'm

51:27

Steven Dubner. This is for economics. are you.

51:35

For economics reduce sponsored by Walmart Walmart

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food. The Administration: This product

54:01

is not intended to diagnose,

54:03

treat, cure, or prevent any

54:05

disease. At

54:15

the beginning of this updated episode,

54:17

we heard briefly from the Wall

54:19

Street Journal reporter Ralph Winkler. He

54:21

recently published an article that was

54:23

headlined Twenty Three and Me is

54:25

Fall from six billion dollars to

54:27

nearly Zero dollars. We spoke with

54:30

Winkler the other day. I

54:32

saw what had happened in stock and

54:34

we thought a few years ago this

54:37

company was. So popular

54:39

it was so huge.

54:41

What happened? And. It was

54:43

just a jumping off point for a pretty large

54:45

investigate a project. What? Would you say

54:48

worse? Some of the most noteworthy developments

54:50

in the life of this companies Like

54:52

wouldn't this company do that Made it

54:54

worth a lot of money to some

54:56

people, at least for some time. I.

54:59

Think they had two things going for them early

55:01

on. One saying was sandwich he

55:03

was Silicon Valley royalty. The first check

55:05

into this company was alone from Sergei

55:08

Brin, her then boyfriend. And.

55:10

They got support early on from Google

55:12

Ventures from Google and she was a

55:15

popular person in the valley. People wanted

55:17

to see her succeed. That is something

55:19

that would help any start a pound

55:21

or get a little bit of a

55:23

leg up. But it wasn't just that.

55:25

There was also an interesting Ceases Here

55:28

which is data. Early on

55:30

they thought about well if we're

55:32

doing all these consumer. Tests

55:34

and were collecting this database. This

55:37

could be really valuable. So. What Happened? I

55:39

mean, It's not

55:41

an overwhelmingly complicated story, is it?

55:44

You know it isn't. And there's

55:46

something interesting from your first interview

55:48

with her Steven where you said.

55:51

You. Know what an. You. Successfully monetized wellness

55:54

and you guys talked about that

55:56

a little bit. And the

55:58

problem was. Seen. Or had.

56:01

She made some revenue from it, but

56:03

she never was able to get in

56:05

the black. She never made any profit

56:07

from it. That. Was the key

56:09

challenge that there's never been a to

56:11

profit from. The. Things she's

56:14

tried to do. Maybe. I'm

56:16

just idiotic here but a one

56:18

time use product. Even if

56:20

it costs money, Nine dollars. Which is

56:22

more than a Coca Cola. But I

56:24

can drink a lot more than Ninety

56:26

Nine Coca Cola's in my lifetime. And

56:28

the losing money on that Ninety Nine dollars.

56:30

I wouldn't think that would be a

56:32

great model for a consumer. Good because

56:34

how many people need to take it more

56:37

than once? Well, certainly not. And that

56:39

was the key challenge that we talked

56:41

about in her story is you'd only

56:43

need to take this test once, and you

56:45

aren't actually likely to get any life

56:47

altering health results. Most people won't get

56:49

that. It's. A fun one time saying yes Sure,

56:51

it turns out I'm. Twenty percent Ashkenazi

56:53

Jewish. had no idea I got some

56:55

Irish. That kind of fun for my

56:58

p Smells like asparagus and yours doesn't?

57:00

sure? That fun. These are kind of cool things

57:02

that made this a great. Stocking Stuffer but you

57:04

did it one time. That's the stocking stuffer And

57:06

twenty seventeen and you know we gotta move onto

57:08

the next door the following year. If

57:11

the business model from the consumer end is

57:13

flawed and that it's just you know, once

57:15

and done and you can't get any more

57:17

money from the consumers, what other kind of

57:20

revenue streams did they think about in that

57:22

realm? Well. If

57:24

you think back a few years ago to

57:26

win, all of the streaming channels were popping

57:29

up. The murders plus everything Disney Plus, E

57:31

S P N Plus. They.

57:33

Thought okay, what if we did a

57:35

subscription? People. Are only paying us once for

57:37

this but what if we could see your out a

57:40

product we could sell to them so they would wanna

57:42

pay us yearly. Will. Basically.

57:44

Sell. You. Access to

57:47

new information as it comes out.

57:50

Because. There could be new discoveries related

57:52

to genetics that really to your genome. And

57:54

so will be able to give you new health

57:56

reports. And maybe we can

57:58

track your lifestyle? And give you

58:01

some health recommendations they thought. Were.

58:03

Going to basically sell you the task,

58:05

but then bill you another seventy bucks

58:07

a year in perpetuity. And then

58:10

we'll have may be something closer to

58:12

a money making model. But

58:14

I. Don't know. As I described that

58:16

you did. It sounds like a compelling Consumer

58:18

Products. It

58:21

sounded compelling if it came along

58:23

with Netflix and Hulu. perhaps. maybe.

58:25

So that's the challenge. And when

58:27

they did their motive going public,

58:29

they made a big promise that

58:31

by around this time. They'd. Have

58:33

north of a million people subscribing to this product.

58:35

Thousand other thing you could do with specs that

58:38

was import. You could make projections and you could

58:40

project all these amazing things are going to happen

58:42

the I years. We're gonna make all this money

58:44

and this was one of their big projections. Were

58:46

gonna make all this money from the subscriptions were

58:48

gonna sell. That was one of the most revealing

58:51

parts of my interviews with her for my story.

58:53

I. Said to her, what about the

58:55

subscription product You felt really far short

58:57

of the projections you made and she

58:59

said. We. Didn't make any projections. I

59:02

said you did and I pulled out of

59:05

my bags of presentation. That. Showed the

59:07

projections they're making as she studies of

59:09

for a minute and she just says.

59:11

You. Know there's nothing else to say other

59:14

than that we were wrong with see not

59:16

aware of that component of the spec offering.

59:18

You. Know maybe she'd forgotten it in the

59:21

moment, but be that that was the

59:23

basis of for consumer business getting to

59:25

profitability. It solved a problem for

59:27

them and their business. But it

59:29

didn't solve a problem for consumers. So.

59:31

The idea of then of using

59:34

this ever growing database to fuel

59:36

drug discovery or to license that

59:38

data to firms that do drug

59:40

discovery sounded really logical. Still sounds

59:42

logical to me. What happened there

59:45

was the business model. Not good,

59:47

Was the execution? not good word.

59:49

There are other issues having to

59:51

do with. you know, consumers are

59:53

competitors or regulators. Why did that

59:55

not happen? I think there's. A

59:58

bunch of reasons. One of them is. Haim.

1:00:00

Drug. Development takes a long

1:00:03

time. You have to

1:00:05

discover. The. Shrug candidate.

1:00:08

right? This is this molecule for instance

1:00:10

that we think is gonna treat. This.

1:00:12

Disease you discover it. You have to

1:00:14

spend years developing it in order to

1:00:16

then get to clinical trials. And.

1:00:18

Then clinical trials are a crapshoot and then

1:00:21

that takes even more years and so it

1:00:23

takes time and they're working on it. They've

1:00:25

got stuff and clinical trials now they've got

1:00:27

to. I'm rooting for him. wouldn't be great

1:00:29

if those drugs work. I mean yes, the

1:00:32

tree dancer. So what's the state of play

1:00:34

of twenty three? me right now give me

1:00:36

a sense of for so what the from

1:00:38

his worth and what degree of leverage and

1:00:40

would to ski herself has as I guess

1:00:43

a primary shareholder and I'm curious to know

1:00:45

what options that leaves available to this company.

1:00:48

A Kiss Her lots of leverage I think

1:00:50

the state of players. First off right now

1:00:52

the valuation is Euro I should say the

1:00:54

enterprise value. so the value of the equity.

1:00:57

Is about equal to the value of

1:00:59

the cash in the bank. So.

1:01:02

If you were able to magically bile,

1:01:04

the stock. And shut down the company

1:01:07

and to cash out the banks. You. Wouldn't

1:01:09

have actually lost any money. is the

1:01:11

with think about that. Such a sexually

1:01:13

worth zero dollars that doesn't sound very

1:01:16

attractive to potential investor or buyer. except

1:01:18

if I think that this from that

1:01:20

has an enterprise value of zero, in

1:01:22

fact has a really significant enterprise value

1:01:25

because of the say that hasn't been

1:01:27

harnessed to great commercial success yet, but

1:01:29

theoretically could be so. what kind of

1:01:32

firms or investors would perhaps be interested

1:01:34

in? Why. Great. Question Correct If you

1:01:36

thought that some of these drugs were gonna work out

1:01:38

in the long run, It's. A great

1:01:40

by, but I think investors broadly are throwing

1:01:42

a lot of bio tech stocks out as

1:01:45

they don't want to take risk with six

1:01:47

percent interest rates out there. That puts an

1:01:49

an interesting position because and which is T

1:01:51

after her break up with her former husband

1:01:53

has quite a bit of capital of her

1:01:56

own. twisted say that break up as many

1:01:58

years ago. Correct, Many years ago. Oh, and

1:02:00

by the way, one thing you learn in the course

1:02:02

reporting on this company. That. Break up was

1:02:04

happening. And. Present husband is being

1:02:06

unfaithful with a junior employee at almost the

1:02:09

exact same time is when the Ft a

1:02:11

warning letter came. She. Was dealing with

1:02:13

that and then the Ft a shutdown or

1:02:15

company effectively? And yet she was able to

1:02:17

deal with both. She's. Incredibly determined

1:02:19

and is able to overcome a

1:02:22

lot of obstacles. So given that

1:02:24

the current obstacle sounds perhaps over

1:02:27

combo, Yes, So here's what happened.

1:02:29

The stock falls solo. The valuation

1:02:31

is below zero. She's got

1:02:33

some capital. She also owns a big chunk

1:02:35

of the company, and through Super Voting Shares,

1:02:38

controls Forty Nine Point Nine nine percent of

1:02:40

the votes. Which means she's in pole position

1:02:42

if she wanted to sell the company. She

1:02:44

could do that. And she does want

1:02:47

to sell the company. To herself.

1:02:49

In. Order to do what's next. You see

1:02:51

that stuck out there? At. This

1:02:54

tiny price. And. It's.

1:02:56

Distracting. It's bad for employees.

1:02:59

It says dispiriting. I think she'd like

1:03:01

to just. Take it out of

1:03:03

the public market. Take a private. So

1:03:05

they can just keep concentrating on.

1:03:08

The various missions that she has set out for

1:03:10

it. When we spoke with amateur

1:03:12

Skyn Twenty Nine teen, she said that

1:03:14

privacy was quotes key to the company

1:03:17

and see stress that they'd never been

1:03:19

hacked. But then twenty three, me was

1:03:21

hacked in Twenty Twenty Three, How serious

1:03:23

was that hack? And how damaging was

1:03:25

it to the from. I. Think

1:03:28

pretty damaging from a consumer

1:03:30

branding prospective. You just made

1:03:32

the point Steven, We haven't been hacked. Your

1:03:34

data safe with us. And

1:03:36

then some people effectively break

1:03:39

in. And. Get a

1:03:41

whole bunch of data. Now There's some caveats

1:03:43

here. They. Didn't get genetic data.

1:03:46

Basically. What the got was twenty three me

1:03:48

has a social networks if I opt into it.

1:03:50

There's this thing called the any relatives. I

1:03:53

can find third and fourth and fifth cousins

1:03:55

of mine and connect with them and get

1:03:57

forty eight emails a day telling you you.

1:04:00

The new six cousin living only

1:04:02

eighteen states away. Something like that.

1:04:04

So basically the hackers got names

1:04:07

of people and. The. Fact

1:04:09

that they were asking Ozzy Jewish from that

1:04:11

side of the database without actually getting. Their.

1:04:14

Genetic Library, but it was a particular kind

1:04:16

of hack that had you could imagine dark

1:04:18

undertones to it. Oh, and this happened two

1:04:20

days before the October Seventh Attack in Israel.

1:04:23

My two days before. but but right before.

1:04:25

It's. Just a black guy that right ahead

1:04:27

of the holiday season. Makes.

1:04:30

Things difficult for a company that relies on the

1:04:32

holiday season for it's product. Do we know anything

1:04:34

about the hackers and what was done with that

1:04:36

data? I don't. Seem. To worry

1:04:38

about typically is banking information like somebody

1:04:40

breaks and your financial accounts identity theft.

1:04:43

You. Know. If somebody finds out

1:04:45

on my Skenazy Jewish I am. ah Skenazy

1:04:47

Jewish On my dad's side. I don't know

1:04:50

what he would you gonna do it at.

1:04:52

You're gonna say you like your heroes that

1:04:54

with apple's not with prunes. Maybe that's probably

1:04:56

not that. that sort of is awesome. I

1:04:58

asked him and his it's issue by preseason.

1:05:03

So if you had to predict which I

1:05:05

realize is a fool's game to try to

1:05:07

predict the future but if I forced you

1:05:09

to what would you say twenty three me

1:05:12

your the remnants their of would look like

1:05:14

in two or three years I think they

1:05:16

would look something similar to what they do

1:05:18

now. Except under private

1:05:20

ownership. The story This company is a

1:05:22

person and a team Sit really do

1:05:25

want to change the world for the

1:05:27

better. and unlike a lot of Silicon

1:05:29

Valley which is a lot of hype

1:05:31

and no substance this want to make

1:05:34

their part in Get Out. That's not

1:05:36

this company. They really do want to

1:05:38

change and make health better. I really

1:05:40

do believe her that she's really sincere

1:05:43

about that. It's just very hard. Thanks

1:05:47

to Ruff Winkler from the Wall Street

1:05:49

Journal for giving us more of the

1:05:51

Twenty Three and Me back story and

1:05:53

for sharing his take on would just

1:05:56

give herself. He seems to have more

1:05:58

faith belief than most people. My. After

1:06:00

having just investigated a business failure

1:06:02

like this, what do you think

1:06:04

of would just and of Twenty

1:06:06

Three and me and the company's

1:06:09

future? Let us know our email

1:06:11

is Radio at freakonomics.com Thanks for

1:06:13

listening to this bonus episode of

1:06:15

for Going On with Radio. We

1:06:17

will be back very soon with

1:06:19

another new episode. Until then, take

1:06:21

care of yourself and if you

1:06:23

can someone else to. For Economics

1:06:25

Radio is produced by Spicher and

1:06:27

Redbud Radio. You can find our

1:06:29

entire. Archive on any podcast app.

1:06:32

Also it for Economic Com where

1:06:34

we published transcripts and soon of

1:06:36

this episode was produced by Alina

1:06:38

Common and Rebecca. Lead Douglas or

1:06:41

staff also includes Augusta Chapman, Eleanor

1:06:43

Osborne's also Hernandez, Gabriel Roth, Greg

1:06:45

Griffin, Jasmine Klinger, Jeremy Johnston, Juli

1:06:47

Canter lyric bout it's Morgan Levy,

1:06:49

You'll Caruso Sarah Lily and that

1:06:52

would since keeps. A theme song

1:06:54

is Mister Fortune by The Hitchhikers.

1:06:56

Our composer is Louise Gamma. My

1:07:02

Dna is somewhere and I guess I could

1:07:04

lose sleep over it. but I don't know.

1:07:06

I got a screen a five year old

1:07:08

at home. I'm losing sleep over other things.

1:07:15

On the Radio Network and.

1:07:28

Hi, it's Martha Stewart. You know, I spend

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a lot of time thinking about dirt. At

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3am? At all hours of the day,

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really. What people don't know is that

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not all dirt is the same. You

1:07:41

need dirt with the right kind of

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nutrients. New Miracle-Gro

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Organic Raised Bed and Garden Soil

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is so dense, so

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full of nutrient-rich, high-quality

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ingredients. Miracle-Gro

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is simply the best. Picture.

1:08:00

The drinkers. Did. You Now That's

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a bold, smooth taste of Duncan. Cold coffee

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can be brewed in your chirag coffee maker

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and enjoy it at home. Duncan.

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Scold. Take a pause for crafted to

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of course, they're packed with the Duncan

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flavor you crave. Brew. Of

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her eyes and sip and seconds. Because.

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