23andMe: Creating too much value from data?

23andMe is one of Silicon Valley’s latest unicorns – now valued at over $1B with over $491M in venture capital investment. While they provide a valuable service to consumers, should we be wary of handing over this immensely personal data?

23andMe is one of Silicon Valley’s latest unicorns – now valued at over $1B with over $491M in venture capital investment. Founded nearly 12 years ago, 23andMe democratizes a test historically confined to clinical settings and requiring physician approval by selling home DNA testing kits. Sold online for $99-$199 (depending on the breadth of testing chosen), the kits require you to simply spit into a tube and mail it to 23andMe’s lab in prepaid packaging provided in the kit. Your genetic report – with information spanning from your risk of Parkinson’s disease to your earwax type – is then sent to you.


Easy enough, right?

The value 23andMe creates for the consumer is quite straightforward and novel – the company has increased access to genetic testing for consumers, and has done so in a more convenient way that doesn’t require expensive and time-consuming visits to a medical office. In this way, 23andMe is both creating value for consumers and capturing this value. While 23andMe is the undisputed leader in the consumer market, this market potential is quite limited – estimated to be around $100 million-a-year according to 23andMe’s goal of selling 1 million test kits a year.


However, 23andMe’s mission – “to help people access, understand and benefit from the human genome” – is much broader than just selling consumer DNA testing kits. With more than 5 million customers today, 80% of whom have opted-in to let 23andMe use their personal data for research purposes, 23andMe has the potential to create enormous amounts of value for other parties beyond the consumer, such as pharmaceutical companies and researchers. 23andMe has already developed numerous research partnerships – with Genentech, Michael J. Fox foundation, and more – where they sell anonymized genetic information for these companies to analyze in hopes of developing new therapies.


In handing over our saliva to 23andMe for testing, we are also handing over extremely sensitive data, that if in the wrong hands, could lead to compromising privacy consequences. 23andMe’s biobank is reportedly the world’s largest. For example, critics have raised the concern of 23andMe selling this data for advertising purposes, but 23andMe has publicly drawn a very bright line between the use cases where they will and will not sell the data. According to the company’s head of privacy, “We don’t use genetic information for advertising. Or any sensitive information. It’s a pretty black and white line.”


Despite this strong stance on the use case for monetizing the loads of data that 23andMe is sitting on that advertisers and others would love to get their hands on, should we as consumers trust that our most defining data as humans is in the hands of others? With the latest news of the trouble that Facebook is in after allowing consumer data to get into the hands of untrusted sources, it is hard as a consumer not to hesitate when considering how innocent mailing in our saliva.


Another major concern being raised about 23andMe’s potential is the blind spots in the data for people of non-white ethnic background. Most databases that these genetic tests are compared against are under-representative of data for these populations. In certain situations, 23andMe has given away its test for free to recruited patients in order to learn more about rare diseases.


Even though 23andMe is upfront about the fact that they are selling our data to drug companies and that their data may have shortcomings, should we so willingly hand over our most personal data?











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