Three years ago, 23andMe, the pioneering company in DNA testing, experienced tremendous success, even boasting a share price higher than Apple’s. During those prime days, millions of eager customers sent in saliva samples to receive comprehensive insights about their ancestry, genetic makeup, and familial connections. Unfortunately, the current narrative is starkly different, with the company now facing an uphill battle for survival. Its stock has seen a severe decline, and it came perilously close to being delisted from financial exchanges this week. This precarious situation is compounded by the grave responsibility the company has of safeguarding sensitive personal data related to its customers—raising significant concerns regarding the implications of losing its substantial database of genetic information.
In conversations with the BBC, 23andMe expressed confidence in its future, emphasizing its commitment to ensuring customer data privacy. This assertion raises the pivotal question: How did a once-celebrated tech giant find itself in this distressing predicament?
Once heralded for its innovative contributions to personal genetics, 23andMe enjoyed a vast customer base, including well-known figures like Snoop Dogg, Oprah Winfrey, Eva Longoria, and Warren Buffett. For many consumers, participating in the DNA testing service yielded unexpected results, such as newfound knowledge regarding genetic predispositions to health conditions or uncovering hidden family relations. The company’s share price at its peak soared to an astonishing $321. Fast forward to today, the stock price has plummeted below $5, marking a staggering loss of 98% in market value.
What factors contributed to this drastic decline? According to Professor Dimitris Andriosopoulos, the root causes can be categorized into two critical issues. First, the company lacked a sustainable business model; once customers obtained their initial DNA report, there was little incentive for them to return for continued services. Second, the ambitious plans to utilize anonymized DNA data for research in drug development faced substantial delays, as the lengthy drug development and approval processes hindered rapid profitability. Andriosopoulos’ analysis leads to a grim forecast: He muses that while 23andMe may continue to exist for a while, its long-term viability appears highly questionable.
Compounding the issues is the turmoil within the company’s leadership. Since the summer, the board of directors has seen a significant shakeup, with only CEO and co-founder Anne Wojcicki remaining from the original team. Wojcicki, who happens to be the sister of former YouTube CEO Susan Wojcicki and the ex-wife of Google co-founder Sergei Brin, now bears the weight of leading the company through its current crisis. Amidst rumors of potential acquisition or collapse, the firm firmly contests such claims. In a public statement, 23andMe insists that Wojcicki intends to take the company private rather than entertain any offers from other entities.
However, speculations continue, particularly from competitors like Ancestry, which has urged U.S. regulators to be vigilant if 23andMe seeks a sale. The possibility of corporate transition raises pressing concerns about customer data, as the demographic information collected is uniquely sensitive and far-reaching. As author Carissa Veliz highlights, the data extends beyond the individual consumer, implicating close family members who may not have consented to share their genetic profile. This amplification of privacy issues leads many to view 23andMe’s potential fate with anxiety and caution.
While the tech industry has seen cycles of rising and falling companies as a norm, 23andMe presents a distinctive case due to the sensitivity of its clientele’s genetic data. The stakes are further elevated when one considers that if a breach were to occur, such as what transpired a year ago when the company experienced hacking, the consequences could be catastrophic and irreversible. As consumers surrender their genetic makeup, they remain vulnerable to unintended consequences fueled by the lack of stringent data protection measures.
Conclusively, the narrative surrounding 23andMe isn’t solely about the corporate downfall but underscores the intricate relationship between technological advancement, consumer data privacy, and ethical custodianship. As highlighted by Veliz, until there’s a robust framework prohibiting the trade of personal data, consumers remain ill-protected in a rapidly digitizing world. The fate of 23andMe may still be uncertain, but one thing is clear: its challenges reflect broader trends and concerns within the tech landscape that remain crucial in the ongoing conversation about privacy rights in an age dominated by data.
