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On December 13, 2015, sonalibloom commented on 23andMe: Evolution of a genomics company :

Maggie – great post! What an interesting read. I have been increasingly interested in personalized medicine as family members have struggled with disease, and believe the core theory of tailoring diagnosis and treatment down to the genetic level for each individual person will be the future of medicine.

Two things about your post really caught my attention:
1) The interaction with patients to encourage mass sign-ups within groups suffering from a particular disease. The Parkinson’s story is extremely compelling, and the idea that a private enterprise could rapidly access such a high volume of genomic-level data by speaking through the patients themselves is powerful. We often see companies leverage “brand ambassadors” to encourage others to sign up for their services. This takes that idea to a whole new level by delivering both a personal and higher/moral benefit to participating. Curious to see how this evolves.

2) I’m with Arkesh on the hesitance about developing pharmaceuticals in-house. I think this is a natural progression for 23 and Me in the sense that they have gathered an immense amount of data, and would like to convert that data into direct benefits to patients through new medications or treatment protocols. Yet I worry that building the pharmaceutical development pipeline into their business and operating models will require a tremendous effort (and massive amount of funding and specialized talent) that will detract from their current core business. Will they be able to recruit qualified researchers and developers away from other big pharma and biotech companies? Will they be able to develop the commercialization arm needed to bring any new products they succeed in developing to market? Will doing so be worth it, or would they be better off monetizing the aggregate data through sales to other firms that are already positioned to utilize it?

Again – I really enjoyed reading this – thank you for sharing your insights with the group!

On December 13, 2015, sonalibloom commented on VisionSpring: Providing eyeglasses to millions :

Andrea – appreciate you sharing this insight with us! I really enjoyed learning more about VisionSpring, as it partners so closely to the 1-to-1 model that Warby Parker has used in the U.S. The thing that I always found most impactful about Warby Parker was that it connected privileged people in the first world to underprivileged people in the developing world through a shared difficulty: poor vision. The fact that VisionSpring enables the “to-1” half of that equation, and your outline of its strategies, has further impressed me as I think through the mechanics of eyeglass prescriptions, fitting, and distribution in regions that lack funds and infrastructure.

One other thought I’d like to touch on is the idea of selling vs. donating the glasses. There is a vast psychological difference between receiving a pair of glasses as charity, and purchasing an extremely affordable pair of glasses for yourself. We should not forget that every human has a measure of pride – and being able to purchase a pair of glasses empowers the buyer, rather than making her/him feel the weight of her/his poverty. I think the larger benefit of selling glasses is certainly the one you mentioned – providing sustainable income sources to local populations. Yet the idea of accepting charity may have been a barrier to adoption of VisionSpring products in some places, and so I appreciate their ability to surpass that obstacle without diminishing their products’ accessibility.

On December 13, 2015, sonalibloom commented on Everlane Takes A New Fashion Lane :

Cara, I thought this was an excellent outline of Everlane’s strategy and operations – thanks! In thinking about this as an end-consumer and as a retail-veteran, I have a couple of thoughts:

First, does transparency in Everlane’s pricing help or hurt their value proposition? In general, I am a huge fan of transparency, and it has clearly worked well for Everlane. But the pricing breakdown in the graphic above actually raised some questions for me! Should I be comfortable paying $125 for a sweater, when just shy of 10% of that price goes to the actual maker? If the argument is that the new consumer feels empathy for the international labor force producing her/his products, is that consumer comfortable with such a small amount being allocated to labor costs (particularly as compared to Everlane’s profit)? If I know that $125 sweater only cost $64 to produce, does that make me feel more or less comfortable putting the remaining $61 into Everlane’s pocket? Many retailers make even higher margin %’s on their full-priced merchandise, but they do so with the expectation of discounting a significant portion of their stock. Since Everlane doesn’t discount, they may actually have higher margins than (or comparable ones to) mainstream retailers. Finally, will deal-driven consumers switch from buying their cashmere at outlet malls to buying it online at Everlane and possibly paying more, even if it feels like better value for money? I think the move toward transparent pricing is an excellent one, but I am curious about the magnitude of its strength as a competitive advantage.

Second, I tend to applaud the decision to focus on basics or essentials. An evergreen product mix never needs to be discounted, and can match consistent consumer demand for staples. However, a lack of trend-driven or otherwise unique items lessens customers’ incentives to return to Everlane frequently to shop and purchase. In an e-commerce model, customer lifetime value depends largely on average order value and repeat purchase rate. If Everlane’s products are of high quality – and presumably wear out over a longer time period – customers will repurchase less frequently. There is potentially a lower upper-limit to purchasing potential from each customer than for other brands with a more diverse product mix. So it all comes down to whether Everlane can derive enough value from each customer – and grow its customer base – sufficiently, in order to have a sustainable business. I’m curious to see how this shakes out!

Again – great analysis, and thanks for posting!

On December 13, 2015, sonalibloom commented on GNC – Supplementation Gone Wrong :

Great write-up! I worked in the e-commerce division of a vitamin and supplement company for over a year before attending HBS, so can provide some additional color on the issues you highlighted here.

First – you are 100% correct that procurement strategy is critical to companies in this space. My company did all formulations in house, and worked with vertically integrated suppliers to manufacture our products – and tested them after each stage for quality. GNC got in trouble (alongside Target, etc.) because DNA tests on selected products revealed that they did not actually contain the advertised ingredients in any significant concentration. However, it is worth mentioning that the type of DNA testing used on these products was primarily designed for archeology and paleontology, so the relevance to supplement testing was questionable.

Second – an online presence for a supplement company is tricky. While the economics are much more attractive online than in brick-and-mortar environments, you have to keep in mind the nature of your product. At the end of the day, supplements are usually pill-like, and remind people of medicine – and they have to actually swallow the things! It seems trivial, but persuading someone to swallow an unfamiliar caplet is MUCH more difficult than persuading someone to apply a new moisturizing cream, or try out a new brand of razor, or test a new nail polish hue. That barrier to trial makes selling supplements online extremely difficult – and industry conversion rates are consequently low. I kept tabs on the GNC website as part of my competitor analysis efforts in my previous role, and think they do e-commerce very well by leveraging product reviews, expert product recommendations, and A/B and multivariate testing. Yet there are significant obstacles to growth in that channel and I will be curious to see how the industry evolves in coming years.

Thanks for contributing a great post!