By the time 23andMe introduced new services, it was too late to retain its customer base, according to Kteily. Customers had already left the platform. He noted that the initial fascination with discovering one’s genetic ancestry wore off, and there was little incentive for users to return years later and subscribe again.
Sumit Nagpal, an entrepreneur in the health tech sector and an early adopter of 23andMe, also ceased using the platform. He felt the health reports provided through the service lacked actionable advice and did not deliver life-changing value. Nagpal’s current venture, Cherish, founded in 2020, is focused on developing radar-based sensor platforms with AI for health and safety monitoring. He suggested that 23andMe could have engaged customers more effectively by offering continuous personalized coaching on lifestyle factors such as diet and exercise.
23andMe faces a challenge similar to the “Instant Pot problem,” where the success of its initial product meant that customers did not need to return for additional purchases. To diversify its revenue, 23andMe allowed pharmaceutical companies to leverage its extensive genetic database for drug research. It partnered with Genentech in 2015 and later with GlaxoSmithKline (GSK) in 2018, securing a $300 million investment from GSK. However, this agreement ended in 2023 without a new major partner to replace GSK. Despite closing its drug discovery unit, 23andMe continues with the clinical trials of its existing drug candidates.
The company is now expanding into the telehealth market, acquiring Lemonaid in 2021. In response to the popularity of medications like Ozempic, Lemonaid began offering Ozempic, Wegovy, and compounded semaglutide through a weight-loss program. This service includes an initial clinician consultation, a monthly membership fee of $49, and weight-loss medication starting at $299 per month for compounded semaglutide. CEO Wojcicki stated that the integration of weight-loss management aligns with the company’s strategy of preventive health services.
Despite these efforts, there remain significant challenges. Estelle Giraud, CEO and founder of Trellis Health, pointed out that the anti-obesity telehealth sector is highly competitive. For success, 23andMe must demonstrate a distinct value proposition and build trust with customers. This trust is particularly crucial after a data breach last year exposed personal information from nearly 7 million users. Additionally, there has been ongoing confusion about the company’s data practices. While users must give explicit consent for their deidentified genetic data to be used for research, a survey conducted between 2017 and 2018 found that more than 40 percent of customers were unaware that their data could be used to aid pharmaceutical research.
