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23andMe lays off 100 people as DNA test sales decline

389 points| coloneltcb | 6 years ago |cnbc.com | reply

436 comments

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[+] jsgo|6 years ago|reply
> Wojcicki has theories

Think the obvious one is that the results are shared and whether someone is a criminal or not (or will be one in the future), people are not particularly comfortable with sharing to parties they didn't initially trust it to for the purposes they trusted it for.

Anecdotally, I bought a 23andme kit (just the genealogy one) but never submitted it because the labeling was to send it to the lab in the next town that manages the company I work for's drug screenings. Well, I don't think I have any pre-existing conditions and certainly don't do drugs, but I don't know about any unknowns on the health side that could impact my insurance if they were to share it to the company. Forget that.

[+] bobthepanda|6 years ago|reply
Honestly, I would also say that a partial reason why these would've dropped is that everyone who can do it has done it.

You only need these kinds of results once because your DNA doesn't change. I knew people who were giving or had gotten these as gifts, but those are one-off purchases. And if you've heard of people doing it then you'll do it too but that's also a one-off.

I don't think I'd personally benefit because my family came to the US relatively recently from a country that has very few records going back very far, that haven't been destroyed. So what would be the point for me?

[+] nradov|6 years ago|reply
The Genetic Information Nondiscrimination Act of 2008 (GINA) specifically prohibits health insurance companies from denying coverage or setting rates based on such tests.
[+] mc32|6 years ago|reply
Exactly. Many people naively thought that it was going to be positive. Build your family tree, get better ancestry information.

Even finding family relations can be fraught with issues like illegitimate children, sperm donors who thought they’d remain anonymous, secret affairs now outed and then there is the other health data aspect...

[+] rapnie|6 years ago|reply
I don't know about 23andme, but I have read Privacy Policies of similar services in the past and they are all riddled with legalese and unclear phrasing that make using the service a complete no-go for me.

Also note that if the policy seems clear you have to follow and read the PP's of their partners and 3rd-parties, and then their partners, etc.

IANAL and you should be before bestowing your trust in such service, unless you don't mind having your DNA profile out in the open.

[+] heavyset_go|6 years ago|reply
> Well, I don't think I have any pre-existing conditions and certainly don't do drugs, but I don't know about any unknowns on the health side that could impact my insurance if they were to share it to the company. Forget that.

In the US, only health insurance companies are not allowed to use genetic data to increase premiums or deny coverage, at least for now. I'm not sure what the rules are about using data derived from genetic data, however.

Life insurance, disability insurance, long-term care insurance etc companies are allowed to use genetic data to determine costs for policyholders or to deny coverage[1], however.

That fact alone is the reason I won't hand over my genetic data to a third party.

[1] https://www.npr.org/sections/health-shots/2018/08/07/6360262...

[+] obilecantrem|6 years ago|reply
I also bought a 23 and me test, but I intend on submitting mine with some DNA recovered from a Mummy or something like that.
[+] pvaldes|6 years ago|reply
For people glad that "crimes will be solved", must be noted that criminals could use it in their benefit also. Just submitting a strange DNA, from a deceased people for example, to be linked with their name. That would taint the database, make they invisible to computers searching (dead people don't commit crimes) and send the hounds far away eventually. If caught you can always blame the lab for mixing your data.

Looks like the modern equivalent to having a new identity after a fake new ID card.

[+] kypro|6 years ago|reply
I wanted to buy one for a while, and my girlfriend offered to get me one for Christmas, but this is the reason I didn't.
[+] PaulKeeble|6 years ago|reply
When 23andme first started they were offering that a sample and your data could be destroyed whenever you liked. Then they got bought and their erasure document is a disgrace, their default position is they can't delete your genetic data and they don't say a thing about the sample at all. Those were not the terms under which it was collected.

There is a reason their business is failing and its because of this enormous change to their basic policy. What they have changed to is against the law in the EU and it is definitely not GDPR compliant despite the amount they say it is in their document.

[+] Kiro|6 years ago|reply
No, that's the obvious "reason that you think should matter but doesn't".
[+] ExactActuation|6 years ago|reply
> and certainly don't do drugs

What about alcohol or caffeine?

[+] ThrowawayH4MCb|6 years ago|reply
Current, unaffected employee here. Throwaway for obvious reasons.

A big chunk of the layoff is the new lab that we built in Phoenix. That only made economic sense in the scenario where we were selling far more kits than we succeeded in selling.

The rest of the layoffs have a similar root cause: a massive overestimate of how much we were going to sell.

I'd blame the shortfall on some combination of growing privacy concerns from customers, failure to understand the demand elasticity as we cut back on discounts, maybe some slowing of consumer discretionary spending, and maybe saturating the market.

[+] dragonwriter|6 years ago|reply
> Wojcicki has theories, but she doesn’t have clear proof for why consumers are shying away from getting tests

Because the ones that want them have gotten them and there's no reason to ever buy the product again once you've done it once.

I mean, smartphones are great, but the market for them would have hit a wall pretty quickly if no one ever had a reason to replace them after buying their first.

[+] killjoywashere|6 years ago|reply
The real risk in my mind is that this opens market space for Beijing-backed companies like Novogene in Sacramento. They will occupy that space and every adjacent space as fast as they can. They'll sequence your tumor genetics, or your germline to get a better read on you're kid's inherited disease. And you'll never know it because your doctor contracted with them, they signed a BAA (so it's all legal, right). And then Novogene will take that BAA to the bathroom, piss on it, and send your genome to China for cross-referencing in Face++ and see if you have any Uigher in you.

Everyone will eventually get some amount of sequencing done, probably multiple times throughout their lives. The vastly more important question in my mind is who's going to do it, and what are their incentives?

With cost-conscious medical professionals, you can bet it will be the lowest bidder, and the lowest bidder will not have your best interests in mind.

[+] prepend|6 years ago|reply
I did this almost 8 years ago for the health insights and recommended it to a few dozen friends and family because the UI was nice, they added new reports, and they were the only low cost provider at the time that let me export my data. I loved the service and found an unknown sibling through the site.

The FDA made them remove health insights so that made the service less useful.

But two years ago they started selling data to pharmaceuticals. They claim it is opt in, but I have a hard time believing them. And they prompt me to opt in about once a month. I no longer recommend.

[+] smt88|6 years ago|reply
> The FDA made them remove health insights so that made the service less useful.

This is like saying a medical product is less useful because the FDA made it remove horoscopes.

If the health insights aren't proven to be accurate, they aren't either safe or useful.

My ex is a quantitative geneticist and always said that we know almost nothing about genetics, and these companies are vastly inflating the certainty anyone has about their conclusions.

[+] wutbrodo|6 years ago|reply
> The FDA made them remove health insights so that made the service less useful.

I believe there are third-party sites that will still give you this information if you upload your raw data. Though of course, this has the downside of giving yet another party access to your data.

[+] riversflow|6 years ago|reply
I’m curious for the reasoning behind why selling the data to big pharma is a bad thing? I was thrilled to hear about that personally as I am very supportive of large pools of genetic data being harnessed for drug research. Big pharma has big money and lots of smart folks, if they can leverage 23&me’s data to create better drugs or find the root cause behind diseases, it seems like a win to me.

That said, I hope that we pass stronger laws protecting genetic data from being used for any type of insurance. Genetics =/= genetic expression, and the law should reflect that.

[+] marcell|6 years ago|reply
They sold 10M kits, and they primarily market in the US. DNA never changes, so you have a lifetime max of 1 purchase of 23andMe per lifetime. Their competitors have likely sold 15-30M as well, so maybe 30-40M of these kits have been sold. That's 10% of US market.

What's the max conceivable penetration here? 20%?

[+] stiray|6 years ago|reply
Has anyone read their "research consent"?

https://www.23andme.com/en-int/about/consent/

"If your data are associated with your identity, they may be made public or released to insurance companies, which could have a negative effect on your ability to obtain insurance coverage."

This is about data breach but within, they acknowlidge the potential usability of those data for insurance bussiness. I wonder who would buy them if they go down...

[+] shostack|6 years ago|reply
Is there any way to prevent them from using it for that purpose or to determine if my insurance company has access and is using it?
[+] mterrel|6 years ago|reply
I just wonder what happens to everyone's DNA data as the company faces financial trouble and/or sells itself. That's in addition to any concerns about possible security breaches that might occur.
[+] Paul-ish|6 years ago|reply
This is an important question. Ancestry, for example, has been taking on debt to pay dividends at the behest of its majority shareholder.
[+] dmix|6 years ago|reply
Maybe the industry as a whole should stop handing stuff over to law enforcement and governments.

I was going to buy it for 2 different people for christmas but both declined over privacy concerns as they read in the news they are being used in sweeping investigations. Given the number of wrongful accusations that litter history and the general trend away from any regard for privacy among security agencies this is a very legitimate concern, even for regular folks like my parents.

[+] joshfraser|6 years ago|reply
I did it and then regretted it. Possible outcomes:

You risk getting linked to a crime because your DNA was found at the scene of the crime. You might even be innocent, but just having your DNA in a database increases your risk of a false conviction. Worse, you put your relatives at risk too, regardless of whether they are guilty or not.

Maybe you unknowingly got someone pregnant and now owe child support. Depending on your situation, you may not welcome this discovery.

Best case, you find out that you have a genetic disease that you can't do much about.

[+] brownbat|6 years ago|reply
This was way more appealing to me when they were able to provide (probably spurious) medical predictions, and before it was clear that the ancient ancestry assessments were so much guesswork.

The cost of sequencing keeps rapidly halving, but the price of kits isn't really dropping, so over time it seems like less and less of a good value.

They're clearly spending on social features and development, which is understandable, but it'd be interesting to see an alternate universe firm just dedicated to making sequencing as accessible a commodity as possible--send in butterflies or dog hair or sushi and we'll send you a genome.

Might create interesting opportunities for amateur biology, similar to how popular amateur astronomy has become with home telescopes and ability to search Hubble images and such.

[+] whynotkeithberg|6 years ago|reply
I kinda wanted to get one but the privacy concerns and having my data sold/added to a government database scares me.
[+] awb|6 years ago|reply
Almost any other sensitive data (passwords, bank accounts, etc.) can be changed with enough effort, but your genetics can't.

Even if you think 23&Me is operating ethically today or that you trust the laws protecting your privacy once your genetic data is leaked there's nothing you can do about it.

[+] TaylorGood|6 years ago|reply
Knowing your DNA is basically is a sell-through for these test kit companies makes this is a nonstarter for me.
[+] JacobAldridge|6 years ago|reply
I happily share my income and net worth figures online, post here and everywhere using my real name, and I’m even doing a podcast now sharing all the gory details of going through fertility treatment from the male perspective.

There’s no way in the world I would allow a company, or any other person or entity, to voluntarily have my DNA.

[+] pas|6 years ago|reply
If it could be bought somewhere with only a big QR code one it and prepaid stamped envelope, I might buy it abroad, spit into it, seal it, send it and check results over Tor later.
[+] LatteLazy|6 years ago|reply
Probably a good thing. Since they started cooperating with law enforcement, it's basically a giant exercise is entrapment with a little psudo science to help sell it...
[+] alister|6 years ago|reply
> The company raised ample venture capital -- $786 million, according to Crunchbase

If I might go on a tangent, isn't that an insane amount of money for the VCs to hand out? Apple with a $1 trillion market capitalization (the most valuable company on Earth until Saudi Aramco beat the record a month ago) began with $1M in inflation-adjusted venture funding in 1977.

Is there any way that $786M makes sense or is there just too much VC money sloshing around?

[+] titzer|6 years ago|reply
“This has been slow and painful for us,”

I'm gonna give you some slack here, Anne, but TBH Silicon Valley executives don't really understand what these words mean.

“I think the tech world needs to own this[sic] better communicate privacy standards to build trust,” she said. “I want to jump in and really own it.”

Or maybe instead of jumping in with your billionaire executive pants on, Anne, you could listen. People are sick of being told what's being done to them. You didn't miscommunicate, you screwed up. People are pissed off.

[+] natch|6 years ago|reply
>Wojcicki has theories

I have a theory for her. It's too expensive. It was really cheap when I got it (on deep discount) but there are discounts, and then there are discounts. The discounts in the last few years have been very weak.

For the past few years I would have bought it for as many as five family members if only it had gone back to the price I got it for.

And now that the privacy concerns have understandably scared everyone, maybe privacy has overtaken that theory. But the prices are still too high for the value offered.

[+] joshspankit|6 years ago|reply
I know this has been essentially stated already, but: DUH.

The moment they let anyone have access to that information, they soured the market.

The “least morally questionable” risk is accidentally handing distant cousins over to police, and most people aren’t even comfortable with that.

[+] throwaway5752|6 years ago|reply
Everyone paying attention the pattern of layoffs? Ebay, Mozilla, DigitalOcean, 23andMe, Intel...

Pay down your credit card debt and make sure you have at least 6 months of expenses in the bank, if you're young and haven't been through this before.

[+] baron816|6 years ago|reply
None of these are likely the result of systemic factors. If anything, there being layoffs at some firms without it impacting general employment levels is a sign of a healthy and balanced economy.
[+] jimbob45|6 years ago|reply
Is the intuition on credit card debt just that unemployment can jeopardize your ability to make payments?
[+] inkeddeveloper|6 years ago|reply
You're going to have to prove there's a pattern here. Unless the pattern is companies that haven't maintained their status in their respective industries.
[+] jgalt212|6 years ago|reply
> Pay down your credit card debt and make sure you have at least 6 months of expenses in the bank, if you're young and haven't been through this before.

If you think you're about to get sacked, the last thing to do is pay down debt regardless of the interest rate.

If you're about to get sacked, I'd recommend opening a home equity line of credit. You can live off this while you plot your next move.

[+] AviationAtom|6 years ago|reply
People's heads are in the clouds again, ala 1999 and 2008. You can't believe people are delivering anything more than hopes and dreams unless you lay eyes on said product. Most these startups sell hype and vaporware, but people get starry-eyed over them and turn into Phil "Take My Money" Fry. Cynicism isn't a bad thing when it comes to money.
[+] angmarsbane|6 years ago|reply
Papyrus is closing 200+ retail stores, Express is closing retail stores...the retail apocalypse growing every day too.
[+] bdcravens|6 years ago|reply
Always wise. Also a good idea to remember that there are a large number of software jobs outside of big name tech.
[+] rowathray|6 years ago|reply
Also, there have been a few rather defensive sounding VC posts on HN lately. Usually it's all Techbro Tony Robbins platitudinal stuff, but it's been getting darker these days. Did you see the one with Paul Graham lashing out at "haters" or whatever? Yikes. Gives a sense things aren't going that well, and they want to justify their decisions.

Moreover, I'm getting less recruiter spam on LinkedIn, but to be fair half of that was just WeWork.

[+] OrgNet|6 years ago|reply
I was thinking the same thing... the housing market will probably crash soon... bitcoin to the moon? just kidding.