Why 23andMe CEO Anne Wojcicki Is Raising Prices

It has been a difficult year for 23andMe CEO and co-founder Ann Wojcicki. Her sister, former YouTube CEO Susan Wojcicki, and her nephew both died earlier this year. Plus, the company, once worth $6 billion, has lost 98% of its value and laid off 40% of its staff. In addition, the company agreed to pay a $30 million settlement over a data security incident. And as part of that agreement, 23andMe denies any wrongdoing. This morning, we have an exclusive interview with Ann Wojcicki, who still remains very optimistic about the future of 23andMe. You've had a lot of incoming, the headlines about 23andMe are not good. I know you know it. Headlines say you're fighting for survival, company is sinking fast, burning through cash so fast that you probably won't be around next year. What is happening with your company? We're definitely transforming. You know, 23andMe is a company that was really all about consumer empowerment. Learn about your DNA, learn about your ancestry, learn about your health risks, but also give you the opportunity to opt in to research. So over 80% of our customers opt into research. And one of the really exciting discoveries that's come since we started the company is that if you take a genetic insight and you develop therapeutics based on that genetic insight, you are more likely to be successful. And so we started a drug discovery unit in 2015. But Ann, I have to stop for just a second. I'm just surprised to even hear you say the word exciting in the same sentence as 23andMe. Only because honestly, you and 23andMe have been under such attack that the company's not viable, that it's only a matter of time. You know, you were really in the eye of the storm right now. And I'm wondering how you're feeling about it, what you're thinking about it. I think the most important thing for me is always staying focused on the mission. It's tough, without a doubt. Like there's been a number of things that have happened where I just look at and I say, wow, like we really just got hit. Fundamentally, if I look at the company over the last couple years, I continue to execute. I make really interesting research discoveries. I have a phenomenal team. So we're surrounded by the eye of the storm and all the press and what's out there. But internally, I feel like I'm still executing and I'm still driven. You do feel you're still executing? Is the company still viable, in your opinion? A hundred percent. Is it? Yes, I definitely believe. I believe in the company. I believe in the long-term mission. But I believe it's essential for us to restructure. As Wojcicki was focused on restructuring, in September, her entire board of seven independent directors suddenly resigned, saying in a public letter, they wholeheartedly support the company's mission. But it is also clear that we differ on the strategic direction for the company going forward. Did that concern you when all of them made the decision? Did you feel blindsided by that? Because when I read that, I just went, whoa. I was sort of taken aback by that. I think you and I were both surprised. Yes. You were too? A hundred percent. Yes. I know I got an email telling me that they were all resigning. I don't have great insights into what the... You had no idea that was coming? None? None. I don't have great insights into what the strategic differences were. I think there's absolutely, we see it now, like we've had a push to restructure. But there was not an overt disagreement. Former employees were critical of Wojcicki's management style. In an interview with Fortune magazine, they spoke out on the condition of anonymity. We shared a few lines with her. I love getting feedback. One of my favorite things... You love getting this feedback? Okay. Feedback. Tell me. Wojcicki can be outwardly charming, but stubborn and controlling behind the scenes. Her leadership shortcomings and maneuvering to main power were made plain once the company went public, says a former employee. I don't know if it's a cranky Yankee. I have no idea who that is. I mean, when you hear stuff like that about yourself, do you think, hmm, they have a point or no, they're absolutely wrong? Listen, I'm always going to reach out to people and say, okay, well, what were some examples? Or are there ways I can learn? It's helpful for me to get that feedback. And so if I'm stubborn in some way, I do love to debate. I love to debate. The thing that I find is that people usually don't like to debate back. And so I look at this for all people, whether it's my board or my senior leadership. I might say, let's go and do therapeutics. If they don't agree or they want to, or have other suggestions, then tell me, like voice the opinion. So there's what we do, like fundamentally at the heart of what 23andMe does, like we're about consumer empowerment and research. Okay. So help me navigate because this has never been done before. So I love getting feedback for all those reasons because it has never been done before. We're the only crowdsource research platform. We're doing all kinds of things for the first time. So we will make mistakes, 100% admit all of that, but we will always, my commitment to the world has always been, I will always learn from my mistakes. I will make them and I will learn from them and we will be better going forward. Wojcicki's team sent us emails they received in support of 23andMe, like this one from 70-year-old Rebecca Jones, thanking the company for helping her learn about her increased risk for Alzheimer's. We provide real value. I look at, I have a former employee who just posted this story of like, you know, cheering for 23andMe and saying, I have a friend who's alive today because she was denied genetic testing by her healthcare provider. She got 23andMe as a present, found out that she is a BRCA carrier and she had early cancer and she's alive today because of 23andMe. So that fuels you. Every day I think about like, or people who are, you know, adopted and looking for family or people who really always want to know their identity. Looking forward, one of Wojcicki's plans to make the company profitable for the first time in its history is through a subscription service for existing members. I have this amazing research team and we found things like your historical matches, like ancient people that you are related to, that people love finding out about this or are, you know, new breast cancer variants that came out, new reports that come out. We're putting out a new report every six, eight weeks or so. We were doing that historically, but now we've actually turned that into a subscription product so that all the people I have who are making these brilliant research discoveries, now we can get paid for it. And we see over 50% of our customers coming back on a quarterly basis. So they're engaged. And the CEO says recent layoffs at the company were also an attempt to preserve cash. The focus right now is 100% on making 23andMe sustainable. And I will not be taking on research initiatives at our own cost anymore. So we will be focusing on, you know, the consumer business, the subscription and research partnerships. And I absolutely think like 23andMe will, you know, turn a point at some point of being profitable. So I guess my question is, how are you so optimistic? I look at the year you've had with the death of your sister, the death of your nephew, the incoming on your company. How are you getting through all of this? Because you must have times where, I guess, after sitting here talking to you, maybe you're not at home in the fetal position, because I'm thinking, I might curl up in a ball somewhere. I have. I've had my moments of like, wow. I mean, I think of, like I said, I'm close with my family. It's been a really bad year. But when I think on, you know, my ancestors, my father escaped from Poland, had to go through, escaped on a charcoal boat, middle of the night, his father was caught, his father was imprisoned by Stalin. You know, my grandmother was separated from her whole family, came over on a boat by herself at, you know, 16. And so when I think about like, I come from this legacy of people who've had hard times. And frankly, I still, you know, I'm luckier than all of them. And when I think back on the moral mission of our family, I still am doing good every day. Like I'm fighting the good fight. A year from now, 23andMe will be? A year from now, 23andMe will be growing and thriving. Five years from now, 23andMe will be? Will transform health care. Oh, whoa, whoa, whoa. Whoa is right. I mean, listen, she is very confident. She has a very clear vision right now. She wants to take the company private and buy it all the other shareholders so that it would no longer be a publicly traded company. But I so admire A, that she even did the interview, because most CEOs, especially when you see the word embattled in front of their name, they're heading for the hills. They have no comment. And Gail, you didn't take it easy on her. You presented what was happening. No, no, I really did. I just asked her what was going on. It was not a gotcha or trying to trip her up. She didn't stutter. But she sat there. Yeah, she didn't stutter. She knew what we were going to talk about. There wasn't anything that was off limits. And, you know, to be fair, I marvel that she is still as confident as she is, still believes in her company, that she didn't cancel, that she didn't cancel and say, no, I'm not going to answer certain questions. As the gene for perseverance. Yes, yes, yes.