Business Strategy – Milestone 1

Team 1: David TseThomas Klejna

Timothy MalcolmKimberly Rocio

23andMe Company OverviewPrivately-held, personal genomics company based

in Mountain View, CA. Founded in 2007.Develops new methods to enable consumers to gain

access to and understand their own genetic information.

Currently providing genetic links to over 100 diseases, conditions, and traits.

Mission & Values23andMe's mission is to:

Be the world's trusted source of personal genetic information.

23andMe’s values:Encourage dialogue on the ethical, social and policy

implications of personalized genetic services.Protect customers’ genetic privacy.Give people control over their own genetic information.Educate users to interpret their data.

Service OfferingsHealth and Traits

Reports on over 40 different human traits

influenced by genetic factors.

Ancestry Discover your DNA ancestry for your entire genome. Relative Finder

Find all other 23andMe members who match your DNA. Genetic Inheritance

Identify traits you and your relatives share in common.

Community Network with other 23andMe users. Contribute to research studies by filling out surveys.

Internal AnalysisCore Competencies

Analysis, interpretation & presentation of genetic data. Technical expertise – scientific advisors.

Technology Outsources testing of SNP for genetic information. Interprets data and presents it to the user as health & ancestry info.

Sales & Marketing Kits sold from 23andMe website only.

Discounts/promotions: DNA day. YouTube channel. Recruit celebrities as customers.

Financial Condition Powerful financial backers (Google, Genentech, J&J). Large total investment.

StrengthsDifferentiating features of service:

Breadth of information available. Gives consumers open and direct access to their data (without

going through their physicians).

Well-funded ($52.6M raised to date).Better brand recognition than competitors.Loyal customer base of early adopters.Strong scientific networking community (key

industry & academic opinion leaders).Relatively low product price point ($99 + monthly

subscription fee).

WeaknessesLack of focus in company direction & how projects

connect to company goals.Poor market research - not targeting potential

customers (i.e., slow growth)Customers unsure how to take advantage of their data.

Customer service infrastructure to help is lacking. Algorithm for determining chances of disease are not

fool-proof (industry challenge). Does not yet have a diverse enough genetic pool for

ancestry data. Recent downsizing and departure of co-founder.

ThreatsCurrently in “The Chasm”.

Ethical and legal questions. FDA threatens to impose regulations on interpretation of

genetic data.

Competitors: Navigenics DeCode Genetics Good Start Genetics GenePartner ScientificMatch

Potential OpportunitiesPersonal genetic make-ups will become a part of

health care.

New technologies are becoming more cost-effective.

Gene therapy or drugs targeted specifically at mutation carriers (do not yet exist).

Market potential is huge.

Problem Statement1. 23andMe has not successfully reached potential

customers with their brand. Have not convinced “main street” users that they need or

want this service.

2. Lacks clear focus – advertises as a health diagnostics company, an ancestry company, a research database. Customers are overwhelmed and confused by the breadth

and presentation of information. Very little a person can do to act on the information

provided by genetic testing.

Business Strategies1. Focus on development of an improved user

interface personalized to the needs of the consumer:Allow users to customize information that is most important

to them.Offer customer service to help consumers understand and

navigate their information.

2. Focus on a sales and marketing campaign that makes product easily accessible & brand easily recognizable to consumers: Sell kits that are available in high-trafficked stores and

websites. Advertise – Internet, TV, etc.

Business Strategies (cont’d)3. Limit company focus to one core emphasis –

health, ancestry, or research Improve competency in one key area and go after a niche

market. Once they’ve defined their target market they can better

define how to generate revenue.

4. Create partnerships that allow user to do something useful with their genetic information: Genetic counseling partnerships - resource to digest data

and make important lifestyle changes. Research community and charity partnerships - further

research by sharing information or making a donation.

Conclusion23andMe is a promising company that has run into

problems achieving its vision.

23andMe has potential to achieve: A large and profitable customer base. Industry leadership. Make a real difference in peoples’ lives.

Questions??

References Slide 5,6: http

://techcrunch.com/2011/01/07/johnson-johnson-leads-9-million-investment-in-personal-genetics-startup-23andme/

Slide 6,7,10: http://www.xconomy.com/san-francisco/2011/05/24/23andme-moves-beyond-simple-consumer-dna-sequencing-sets-sight-on-research/2/

Slide 6,10: http://www.physorg.com/news/2011-06-google-backed-23andme-major-milestone-users.html

Slide 6,7,10: http://www.nytimes.com/2010/03/20/business/20consumergene.html?adxnnl=1&pagewanted=all&adxnnlx=1330304942-mwbYLXt9FVEw3ZGoaNLpqw

Slide 6: http://www.fitsugar.com/Review-23andMes-DNA-Testing-Kit-15179775

Slide 5,6,10: https://www.23andme.com/

Slide 6,10: http://spittoon.23andme.com/2011/10/26/a-prescription-for-personalizing-medicine/

Slide 6,7: http://hmg.oxfordjournals.org/content/17/R2/R180.full

Slide 5,7: http://spittoon.23andme.com/2012/01/08/an-update-to-23andme-customers/

Backup Slides

Management TeamAnne Wojcicki - Co-founder

Esther Dyson - Director

Serafim Batzoglou - Scientific Advisor

Brian Naughton - Product Manager

Patrick Chung - Board Member

Financials$2.00M in sales according to Hoovers.com

FundingSeries A, 5/07, $9M

Genentech, Google, Mohr Davidow Ventures, New Enterprise Associates

Series B, 6/09, $12.6MGoogle, Sergey Brin

Series C, 11/10, $22MJohnson & Johnson Development Corporation, New

Enterprise Associates, Google VenturesSeries C, 1/11, $9M

Johnson & Johnson Development

Funding Total = $52.6M