How to Land a Million Dollar Deal on Shark Tank Ask Mr. Wonderful #24 Kevin O'Leary & Anne Wojcicki

Hey, Mr. Wonderful here, but I'm in the kitchen, so we don't need Mr. Wonderful; we need Chef Wonderful. How are we gonna get them?

Eg, well, um, but there's no Chef Wonderful. You know what? I want to talk about Mother's Day. It's coming up, and this year it's gonna be very tough to get flowers. That's why the great people love LovePop cards! You remember that? One of my favorite Shark Tank companies. These kinds of cards, I love them. Well, they've come up with bouquets! Look at these beautiful flower bouquets ready for Mother's Day, and they ship in this amazing container flat with its card you can fill out for Mom. It's fantastic! And look at this! These flowers fold right back up; you can store them, and they're never dead to me because you never have to water them. They're pieces of art. Where do you get these? LovePop.com! Get me one for Mother's Day! What a great idea! And they're just so beautiful! Oh my goodness, I just love this idea!

Innovation. And I wanted to ask you about your experience on Shark Tank. Let's start there. Your perception of what that show is about, your journey into it, and what you actually learned from it. I, you know, people ask me all the time about what was it like being on Shark Tank. And what was interesting is I didn't—I hadn't watched a ton of Shark Tank when I was first asked. I spent my pregnancy and the first 12 weeks of my daughter being born, intensely watching Shark Tank. Part of the reason why I decided to do it is that my head of research told me, you know, she's incredibly talented; she's a PhD from Stanford and a postdoc. She told me, she's like, "Everything I ever learned about business, I learned from Shark Tank." There was massive enthusiasm within my company from a pretty, you know, scientific crowd of like the impact that Shark Tank has had on them. So, I decided to do it for that reason. And then I became like a very dedicated student to Shark Tank. I watched at least three seasons. Every single season—study, making notes. I wanted to make sure I was really prepared. And everyone I had talked to who'd been on Shark Tank said, you know, "That's your joining; it's kind of like joining someone else's prom," but you are new, and you have to become the prom queen.

That's true! That's true! That is a good analogy, actually. But I'm wondering, all your—you know that there's—because I've talked to many guests who have come on Shark Tank. There's a perception, and then there's the—you know, the casting process, and you come and visit the set. Then, there's the miniature in the chair. And I've always said this to everybody. The niceties are wonderful; shake your hand, get to know you, smile at you. But the minute those cameras roll, we don't really give a about you anymore, and you're just a competitor. And we don't mean any disrespect by it.

But I thought you were able to get into the groove pretty damn quickly! So for me, it's actually almost the opposite. Like, I spend so much time thinking through the scenarios in my head before. Like, I really—like, I have these pictures of myself in labor, like watching Shark Tank, and saying, "No, no, I'm being induced. I'm gonna study!" So you spend a lot of time thinking about like, well, what would I say right now? And so, in some ways, my anticipation was far more stressful than the moment I got in that chair. The moment I got in that chair, I was kind of like, "Shh. What? I'm over. Like, I've been studying this!"

Time for me—that's—everybody noticed that! I think it's fantastic. It was a very enjoyable experience, but I always ask this question of guests: Were you surprised at how long the pitches took versus what you actually saw when you were studying Shark Tank?

That's actually, I would say, my biggest issue with the show. I wanted—I could have gotten longer on the pitches. I'm used to—like, if I'm interviewing a company, it was a couple things. Like, one, I want all the attention—like, I want them dedicated to just my questions, and I want an hour of just my questions! And so, the hardest thing that I had is you guys all kept interrupting. Like, you all had your own set of questions, and oftentimes I was like, "That is not relevant!" And so, I wanted more time! And then, you know, you get the voice in your ear: "Are you in or are you out?" And so, I—that was like the hub. I was like, "What? I'm not done asking my questions!" So it was actually—like I said, I’m really—it went by fast; I was surprised! The fast-moving— the hour that you have the pitches, it's fast-moving, it's intense, and you got all these different questions, and everyone's coming on it from a different angle. So, I mean, I loved it, but it was just like, the number one thing for me is I kind of want you all to shut up, and so I could ask my own questions.

Well then, I'll give you a chance to speak out to the hundreds of thousands of people now that have not yet come into the Shark Tank set. What advice would you give an entrepreneur that is going to stand in front of you there after having gone through it yourself and watching it occur? What—give me some tips for them because they're asking you now. I'm not doing it on their behalf!

I think the most important thing I learned, like I saw, is you gotta be really succinct with your story and your pitch. Like, what's the big picture? How are you different? What's the opportunity? And then studying the Sharks to know everyone has a hotspot! And so, you don't want to touch some of those; you don’t want to say, "I'm selling into China, and if I only get 1% then it’s, you know"—like, that clearly is a no-no for many of you. So, I found sometimes that some people—they got so into the theatrics, which are fun—that sometimes it was hard to say like, I want you to succinctly tell me what exactly is your opportunity.

So, it's very—it's very good advice and do it right up front. I get where you're going with that because if you don't catch your attention; you're a Shark, you brought money to the table, it's never gonna happen. It's just never gonna happen, right? And so, I need to know also that the person I'm giving money to, like, knows how to effectively communicate their idea in an efficient way. Like, as a leader, you need someone who's like direct to the point, who knows how to communicate to all their employees, to the investors, to the world what it is that they're doing. And so that was the thing. Like, sometimes you get some really great theatrics, but I need like to concisely know exactly what is going on here!

Let's pivot. I want to talk to you about your business, 23andMe, which has become a very successful business. You're not really selling DNA kits, are you? That's not your business.

The goal for—like, my original—like, I’m a huge believer in founders who are solving their own problems. So, I came to 23andMe with 10 years of experience on Wall Street saying I’m putting, you know, hundreds of millions of dollars to work in a system that I think is relatively dysfunctional for all of us. I don't think the health care system represents what's in the best interest of us. Meaning that it’s focused really on treatments and not on keeping you healthy. And then secondly, if you do get sick, the biotech industry is the only thing that reminds me of communism. We’re in a communist society; you would talk about how your costs all the time and how they keep going up. Biotech is the only industry I know where they say every single year we’re worse at what we do. When I started investing, it was only $700 million to make a drug, and now it’s $2 billion to make a drug! And so I took a look at that and I said fundamentally, we have a problem with how we’re approaching this. And part of the issue is that you have all these siloed labs working on a part of the problem, but you need to put all those pieces together.

And so, the most important thing I said is like we all collectively—we all care about staying healthier! Like, if I go and I survey all the people with rheumatoid arthritis or multiple sclerosis or HIV—like, they all come together, and they all would love to see a cure. So instead of having all these little tiny silos, let's bring the people together on a platform, and let's empower them to be part of research to find prevention and cures.

If I have a consumer that's never heard of 23andMe, what is the value proposition in the Shark Tank mode that you're pitching me that I should actually go through the process that you're offering me to buy your service? What's the pitch?

23andMe is all about learning your genetic information that is gonna tell you about your genetic ancestry, and it's going to give you a path for your disease risks and how you can live a healthier life. I think that says it in a nutshell!

And how many people do you think never do it because they're just scared to get that information?

I think, you know, when we first started, there was probably, you know, single-digit percentages—5% that just never wanted to be online. I think now there’s worry—understandably—like worried about how is all your information being used. So, that said, over 80% of my 12+ million customers have opted in to research, and so we’ve been able to show that if you’re transparent with people about how your information is being used, people want it used. You just want the transparency!

So one thing I am really proud of with 23andMe is we’ve always said the most important thing that we can do is be transparent because we have your genetic information. It’s incredibly sensitive information about you that we want to empower you with, but we also want to empower you to make these discoveries that are ultimately, in my opinion, gonna change your lives.

How do you deal with the debate when a constituency or any constituent asks you, "Look, you’re getting—I want your service, I’m willing to pay for it. Now you have my DNA information, my fingerprint, that makes me unique globally, and then the police subpoena you for it." What’s the answer to that?

We do not work with the police on any of these. We have been successfully been able to fight all of our—any kind of subpoena that’s coming our way. So, it’s never been a case where they’re trying to solve a murder trial in San Francisco; they use you to solve it. No, no, we do not! We have a transparency report on our website; we are not working with the police or any kind of crime groups at all. And one thing also—who is that? If you spit—you know, I can have Mr. Wonderful in 23andMe; you have the ability to get any time to delete your account, including the information, including the DNA. And people ask about like, do you really do that? And let me tell you, we spend a lot of time in the company making sure that we can honor people’s requests about what they want to do with their data.

That's good to know. And another question. Obviously, we're living in unusual times, I'm going to guess that your office is abiding by the California rules and everybody's working from home. Is that the case?

Correct! Yes.

Okay, so now here's my question. As the weeks roll on and your efficiency remains the same, I'm going to assume that probably you haven't really been hurt that badly sales-wise as people are sitting around at home thinking of things to do with themselves. I'm guessing here. But here's my question. As an investor, one of the biggest asset classes I have on my balance sheet is real estate. I own REITs; I have commercial real estate; I have, you know, pieces of office towers—all that stuff. And I'm looking at all my companies—over 50 of them that I'm a significant investor in—in my portfolio of small businesses, and asking each CEO, as I talk to them every day as they’re trying to solve our problems. As some are doing, it’s exceptionally well because they have sanitization products like Blue Land, or, you know, anybody that’s servicing home gyms or anything like that, they’re doing great. And the ones that are in the restaurant business are dying, and all the rest of it, it’s volatile. But everybody’s figuring out that they’re able to run a business without going to the office. I know! And I’m asking myself, as an—you know, in my companies, I’m telling everybody, “Guys, why do we need to spend $25,000 a month on office rent? Why don’t we do a nip, nip, nip, chop-chop-chop when this is over and figure out what are the essential office tenants?”

What do you think? Is that gonna be a problem?

You know, I’ve been thinking about, like, I think the most interesting thing that’s going on right now is it’s gonna dramatically shift; it’s gonna change the world; it’s gonna change everything. And I think the areas it’s going to change, you know, how people work, and also it’s gonna change digital health. So, I think it’s very clear that people are able to see that, you know, how they work from home; they can actually be quite effective. I actually—like, I was looking at the WeWork news today in terms of that investment—it made me think like, do I need an office space, or do I just need sort of a space that I can congregate two days a week? Because I think there is a value for actually having people come in periodically. But I have been incredibly productive just being at home. I mean, well, I’m more productive because I’ve gone into this crazy cycle with virtual assistants, some in Europe and some—including, I’ll give you an example—I shot an interview, like similar to this, with Maria Sharapova last week, and normally I would go into an edit suite in New York with editors, and I would tell them, I recounted the interview I’m doing with you, just like this. And they would cut it. They would edit it the way that I envisioned the thing would be, and we’d use a beautiful console and all of the equipment, and I don’t have any $1,000 an hour. I don’t even know! Now, there are virtual editors—one is sitting in France, and the other one is in LA! Yeah! And I’m saving thousands of dollars, and they’re so time-shifted that, hey, I got up at 3 o'clock and I cut for an hour with them!

Think about—I mean, think about also because you own a lot of real estate. You know, one of the biggest challenges I have here is recruiting talent to the Bay Area and how expensive it is. But if I can find amazing talent and they can live in lower-cost areas, potentially, like, it really helps my recruiting, and they can be remote. So—but that’s gonna change the way you think of running your business.

So, I would think my point is: Will there be permanent impairments to things like—I’ll give you another example—my favorite restaurant in New York is in the inner basement; it’s packed. It’s jam-packed! I’m sitting like this beside other people I don’t know. Am I gonna do that again anytime soon? I don’t think so! I’m going full Howie Mandel. I’m like, I’m not feeling—I don’t want to be jammed in with a bunch of people on it! And so does that permanently impair certain businesses as behavioral change gets enforced over these weeks and then months until this thing gets resolved?

I think it—it does! I mean, I think that you will have—like, my child was just—my 11-year-old was asking me, he’s like, “Am I gonna be known as a cranial?” Like, “Am I the child of the coronavirus?” "A coronal?” And my child, “A coronavirus where there’s gonna be life before and then there’s life after.” And the world really dramatically changes! And I remember this from 9/11—how much there was sort of that—that point in time where the world really shifted. And I think, like I said, I think the areas that I see most clearly is how people work, and the effectiveness of Zoom, the effectiveness of remote working, and actually the productivity bump that we get from working from home.

So I think there’s potentially a bump in—and how effective people can be. And the other thing that’s, again, near and dear to my heart is telemedicine, digital health. You cannot go to a doctor! Like right now, people—like, if you have an issue, like I had, you know, I had a dermatology question. I just email my dermatologist, but there was no way she was gonna let me come in. So everyone has to be—you can use your phone! I took a picture of my mole; I send my dermatologist, you know, everyone who questioned the idea of digital health is being forced right now to adopt it. And I think that you see how quickly the FDA is moving! Like the policy changes that have happened, that we talked about wanting to have that we anticipated were gonna take five-plus years, happened in a week!

You’re right! It’s an excellent observation. That will be a nascent sector that explodes because, you’re right, I could think my last doctor visit to Boston was a couple of days ago, digitally, with that doctor asking some questions. I was riding my bike and it sliced my ankle pretty badly, and I showed it to him and said, "Do I need stitches, or not?" And normally I would have gone in!

So, there’s a couple—like I’m an investor in a company called Doctors on Demand, and the CEO was saying like, I am the country’s emergency room right now. I’m the emergency room in the country, and it’s exploded! And then this other company that I love, it’s this little tiny thermometer company. And in some ways, this is so basic, but it’s a thermometer with, you know, essentially GPS and sends information. But it’s the ones called Kinsa, and it’s been sending information about where all the fevers are—

That’s fascinating! So, that’s an add-on to your phone, I guess, right?

It’s an app. No, it’s just—you don’t— they don’t do anything. Yeah, well, you take it and it plugs—it has an app that matches with your phone, but then it’s also really convenient.

Well, my kids are sick; I can just track and see what their temperatures are, and I know every time, and it tracks your medications. So, but technology like that is gonna fundamentally change like healthcare! So, I think healthcare—like, I like, there’s so much doom and gloom out there right now, but like the pitch I have given to my employees is that like the world is definitely—like there’s a lot of pain out there right now, but when you have this pain, it’s an opportunity for change! So think about like where do we want to be in two years’ time? Think about all this pain that we’re feeling and how is that gonna force change! And use the time while you’re at home to be creative because it’s this incredible luxury where I’m actually alone. Like I get time to like—I get time to do yoga and to meditate and like to actually think a little bit more because I’m not commuting and I have less meetings. But think about like where’s the world gonna go, and how do we build towards that?

Speaking of that, it’s a great segue to this question. In the last financial crisis—'08—a new asset class emerged, or new services in IndieGoGo and Kickstarter, if you remember, because the entrepreneurial space was shut down by the—you know, since they couldn’t find anything; there was no VCs willing to put capital out. And so, out of necessity those platforms were born, and they grew very large, but it wasn’t—it was a different form of funding because you basically financed the prototype and then eventually the first run of the product. I’m going to speculate, and I want your opinion on this: That right now the VC community is really hunkered down; it’s really hard to get a deal done or even get—meaning—and they’re worried about their portfolios, plenty of many of which might go to zero. We don’t know. But there’s a new form of financing emerging; I’ve been doing a lot of due diligence on it—finally made a decision in terms of investment recently. I’ve been watching the equity crowdfunding market emerge, where a start-up says, “I have an idea; I want to raise a million dollars.” Traditionally, you’d go to a VC that you know probably and say, “I need a million against the five million pre-value. I’m gonna sell twenty, thirty percent of my company to a concentrated shareholder.” It’s great to have a branded VC and all that; now you can go raise a million bucks on a Saturday on an equity crowdfunding platform, and you have 10,000 shareholders that have small amounts of dollars in it. I’ve been watching this, and that the biggest one that has, I guess, is one of the critical mass races: StartEngine—Howard Marks, the co-founder of Activision, put it together, and I was gonna compete with him and said, “No, he beat me, so I’m just gonna buy a piece of his company and join forces,” which is what I’ve done!

What do you think about that platform? What do you think is gonna happen coming out of this? Do you think a lot of entrepreneurs are gonna discover that asset class and start using it instead of the traditional VC?

Interesting question! I think—I mean, I think one of the things that’s changing is you have a lot of wealthy individuals who have angel funds, and you’re gonna have platforms like this that are going to crowdsource equity. And I do think you have a lot of venture capital firms that are like—that do need to protect their existing investments. So, I absolutely think that there’s, you know, a way of getting these off the ground. You know, the thing I would think about—I haven’t looked at a lot of these platforms—is, you know, some of the legal aspects. Like, when you have more than a certain number of shareholders, then the disclosures and the publicity and what you have to do. So one advantage of having a smaller group of investors is the secrecy.

Well, I see that, but the SEC actually created this and intended to create it using the JOBS Act! It’s just that nobody had got enough—the critical mass ended up being success factor was how many investors can you apply and get on your platform. Howard beat everybody! He got 250,000 investors on his platform and he beat everybody. That’s what happened because it’s hard to get them! But those disclosure metrics are very simple: you have a shelf prospectus, so it’s very easy now, and it works! I’m fascinated by it because I've been a private equity guy for my whole investment life and recently got beat out by one of these platforms.

And I waited; I thought—I mean, look, I think competition to the old school, again, it’s a little bit like it’s the institutional VCs are facing competition, and all of these platforms that essentially flatten access, I think are gonna empower and enable a lot of new ideas that otherwise VCs wouldn’t necessarily get, you know? Wouldn’t necessarily always fund and is gonna enable these—you know, it’s gonna have enabled competition!

Well, let them sing for their supper! I’ve got a set of questions from around the world. We’re gonna take a journey around the world for you, and this is kind of like the lightning round! So just give me a minute to get on the server and pull them down. I think you’re gonna find some very interesting ones here.

Let’s see. The first one here looks like it is Kelsey. Alright, let’s hear from Kelsey!

Hi Mr. Wonderful! My name is Kelsey and I’m 27 years old. I’ve just really started diving into my career and I’m very career-focused right now. However, a lot of my friends, family, and loved ones are trying to push me into marriage and starting a family. And everywhere I look, people are getting married, having kids— that whole sort of thing. And that’s just not really where I see my life going. I’m getting a lot of pushback from people saying that this is the time that I should be focused on that, but I just don’t see that where my source of happiness is and where I want my life to go. Should I let those comments deter me in any way? Does being career-focused mean that there’s something wrong with me? I would love to hear your insight on this! Thank you so much for everything. I really, really look up to you and hope to hear from you!

So, Ann, honey, sweetie, poopsie, this is for you. What is the answer?

I tell my kids all the time that one of my superpowers is ignoring people! And I love getting feedback. I love—I love hearing advice! I love—like, my mom is full of advice, and my siblings. And I mean, the world is constantly giving you feedback. But, you know, the one thing I’ve learned, especially as I’ve gotten older, is that it’s your life, and what is right for you is not necessarily what’s right for others. And I can say when I decided I was gonna have my third child on my own, a lot of people thought I was crazy! And I remember actually back in 1991, I deferred college for a year back when it was not common to take a gap year. And I remember one of my friend’s parents yelling at me, saying I was gonna ruin my life! And, you know, part of, again, what I’ve learned to do is—like, it’s ultimately, it’s my life, and what works for me is not necessarily what works for others. And I love getting the feedback! I love understanding where they’re coming from. And, you know, in this case, it’s great to think about like, do you want to have children? It’s great to have like a premeditated decision like no, I do not want to have this right now. These are the way this is how I’m thinking about it. And then it’s ultimately—it’s your life! And you know, Diane von Furstenberg is the one—she has the "In Charge" movement, and I love it. And ultimately, I think about every single day: like, there’s nothing greater than being an adult and being in charge of your life!

So basically your advice is it’s your life; do what you think is right. Tough to say that to a 27-year-old because there’s so much uncertainty in their outcome, right? But I think it’s—I think I've always pitched—so long as when it comes to career, I’ve always pitched people like do things that push you to keep learning. If you’re suddenly bored in a job, don’t just stay in a job because it’s the right thing for you—keep learning! And if you don’t want to have kids right then, and you don’t want to get married—like, my God, don’t! Like, absolutely! You can have kids later! And I think I have seen, you know, it’s—you know, sometimes people marry and they have children, sometimes you can have them on your own. But I think you need to think about it, and you’ve done—you’ve done both. Is one better than the other?

I think that it’s—again, both! I love all my children, but it is, you know, there are pros and cons to being married, and I see—I have some friends who are incredibly happily married, and I have some friends who are not. And the way my life unfolded is that if I wanted to have more kids, I had to have one alone, and I’m really happy!

I’m glad to hear that, because ultimately, you want to be—you want to live your life happy. There's no question! Let's move on. We're gonna hear from—let's try—okay, let’s try Suzanne! Where’s she from?

Hi Mr. Wonderful! This is Suzanne from the Philippines, and I want to ask, how do you know when it’s time to close a business? When do you quit a business that might be having a hard time? Or when do you figure out, you know, it’s just a challenging time in the business, and you need to continue it; you just need to find new solutions for the challenges you’re facing? Thank you!

Okay, and when you take it behind the barn and shoot it! Come on! You know this! How long do you give a startup before you just know it’s not gonna work? When do you tell—?

I tell you what! How do you—I mean, if you’re gonna give me the come-by-I answer: You never give up, yada yada yada. There comes a point where it doesn’t—I mean, I think it’s a hard question because there's not a definitive answer. And I've seen lots of times where you think you know something is going to fail, and then suddenly it turns a corner—that's very hopeful. But it doesn't happen very often! It doesn't happen very often! I think the reality—this isn't—it’s an example thinking even on the other question where sometimes individuals lack perspective. Like, sometimes you’re the person running this; this is an opportunity to get outside advice because sometimes outsiders will put in—should be able to see the potential or the lack of potential better than you.

So this is one thing I think about a lot, is you know, getting that external opinion. And there are some businesses that are not meant to succeed, and if you have—if you just—every so often you come up with an idea, and it’s too early, or you don’t see the market reacting, and you cannot be profitable within a period of time, you have to kill it! So I would say the advice I would almost give is like you put a timestamp on how long you want it to run before you're actually gonna be sustainable, and if you don't hit that, then you kill it!

How do you like—how do you like three years as a time frame? How do you like three years to determine half the profitability or at least find a way to acquire customers profitably? Do you think that’s a reasonable time frame?

I think it’s reasonable, but I think it’s also very dependent on each business.

Well, I’ll just let you in on a secret! If I invest in a company as a startup, and I take a major position in it—more than 40%, and I tell them when we start: if you can't figure this out in three years, I'm taking it behind the barn and shooting it, and I’m putting provisions in for that because I want you to understand I’ll keep funding until it’s clear that this idea doesn’t have merit!

And I think, I mean, that’s what—maybe you think that’s arbitrary, but that’s what I do. I think three years is almost generous for some businesses!

Good! I'm glad to hear that! I don't feel as bad because I have a lot of people whining in the second—yeah, after they get past the second year, they still haven’t...

If you’re not showing—and I tell this to my company, too, because we're not profitable now! Like, I said, you’re either growing or you’re profitable!

Well, you’re growing like a weed!

Right! We are! Right in the market! The market definitely turned on us last year! So we have—we have two aspects of our business: it’s the consumer side, which definitely shrank and is also—has been hit back by the coronavirus. But secondly, we are exploding on the drug development side! So being able to look at all of our data and say I’m gonna look at, you know, people with, you know, with multiple sclerosis, and you’ve got the data set—you’ve got the data right!

We have—the data—data! We have an incredible opportunity in making therapies, but part of the issue is drug discovery is very expensive! I became a large shareholder in a company called MindMed recently, and I'm learning very quickly how valuable data is in that business—we're trying to determine the effectiveness of microdosing psychedelics, and we're getting some very interesting data! And we are the first to—I took that company public along with its Board of Directors a couple of weeks ago, and we've just acquired a whole bunch of data from Basel, Switzerland, the birthplace of LSD!

But what I’ve realized is that the whole value—the market cap is determined on data! The data we have that no one else has on these clinical trials, Stage Two! I think you're going to be shocked at the effectiveness on things like depression, anxiety, alcoholism, drug addiction, on the power of these psychedelics that were shut down in the ‘60s because they thought they were just, you know, recreational drugs! This company is not doing anything recreational, but I'm very excited about that one! But it rings true with me, what you're saying—the value of 23andMe! Now, maybe it's data, which brings me to another question regarding that: When are you gonna merge with Ancestry? That makes so much sense! I mean, if I were an investor in both, I’d just—I’d get you two together on a Zoom call! I mean, don't you see the synergies?

Yeah, no, we see them quite a bit! Oh, there’s a tremendous amount of synergy! You’d be profitable like that! I know! You know, it’s almost like parents can see the match made in heaven, but sometimes the kids—it takes—you know, you've got to figure out—you actually date!

Well, you know, I’m sure based on—you know, I mean, I’m sure both sides can see the opportunity! And I love to—I love to be a mansion—a disturber! But for me, that is such a fantastic combo! And it’s a lot—I mean, I think it’s amazing because people want to do a lot with their DNA! And so clearly there’s more—you can learn about your ancestry, and then you want to go and explore records! We’ve taken more of the pitch that you learn about your DNA, and I put you on this path to be healthier!

And health is a sum of what you've done every single day of your life! You know, it's not like you change your behavior today and suddenly you're like, "Hallelujah, I'm healthy!" So part of what we're trying to do is really go deep on the health side of saying I'm willing to make a bet that by giving you your genetic information, I'm actually going to change the curves, and I'm gonna make you healthier!

I totally get it! But some things are decreed by the power of the force, and this is one of them! So I'm just putting that in your ear!

Well, if I need a bank rocking hire, you Kevin—is there—We can work something! I’m pretty good at that! Alright! Let’s listen to Henry here! What does he got?

Hello, Mr. Wonderful! I hope you're having a good day, and you're staying safe out there! My name is Henry, and I would like to ask you a hopefully simple question: How do I determine the price for my product? I have a product that I’m hoping to launch within the next 60 days—hopefully less. And I don’t know the right price for my product where I could maximize my profit margin. I should also say that I do not have a huge bank account to spend on research and all those things. In fact, like most people in my position, I put most of my money into creating this product. If you can share some advice, I would be eternally thankful! Thank you so much, and you have a good one!

In a nutshell—he’s asking: How do you determine the price when you're launching a new product? You've had to do this!

We do it all the time! You have to do research! We will introduce prices to different sets. We will take a group of individuals that come from different economic backgrounds and different ethnic backgrounds and roll out different prices to them, and we look at the data about what is the price where you’re gonna get the most volume or the most maximizing contribution!

So volume—you know, you don’t want to just—you know, you need to maximize the contribution margin, meaning like, I need to how much volume can I get for the best margins!

So you are geo-locking those offers to different geographies?

We will do it in different geographies and to different—in different, yeah! We can do some of these! There are all kinds of platforms—I don't know the specific names of them, but there's platforms that we use online. We don’t necessarily test it through Facebook, but there’s different platforms that we can do testing on.

I mean, I think in the case of—like, as a start-up, you know, in the early days where we didn’t have a budget to do it—we just like, honestly, I would sit in front of Safeway and just ask people. And so it’s not potentially gonna be less scientific, but there are some of those rogue tactics that you do when you have to be scrappy and don’t have the ability to do it. Or, you know, post on Craigslist that you know, pay people some $—some dollar amount for that feedback!

So I think that there’s a way to potentially get scrappy information or just roll it out at different time points and again, depending on what the product is, different prices and see what the volume is!

Has pricing ever surprised you? Assumptions you’ve made about—you know, most people say, “Ah, the magic price point: $9.99, $19.99, $20.00.” Has pricing ever surprised you?

So we actually did our Series C entirely based on pricing. Where 23andMe in the early days, we were priced at—it was $199 or $299, and we sold less than 20 to 30 kits a day! And we decided that on this made-up holiday, DNA Day, we were gonna discount the price to $99! And I remember at 7:00 in the morning, my head engineer called me and he’s like, “And we sold—we put a limited thousand kits, and we hit it already! What should we do?” I was like, “I don’t know; just let it run!” And this back in the day, I was like, “Oh, whatever!” And by 4 o'clock in the afternoon, we had sold 17,000 kits! And it only later occurred to me, I was like, “Holy cow! This is a supply chain nightmare! Like, do I have this number of kits?”—like all these issues! But it showed to me that there was clearly demand and that price was a huge bottleneck! And so it’s part of where I said like, I didn’t have to pay any kind of expensive study; we just changed the price for a day and we saw what the demand is!

And that’s one of the things that we do! Like, you see us now on Prime Day and on, you know, DNA Day—we will discount and you get massive volume for some of these discounts!

I have a similar story you might find interesting because it was a real— it was a real stressful moment for me. I got a phone call years ago, and I was part of the Learning Company, and the standard price for Read A Rabbit and Carmen Sandiego and all that stuff was $39.95. And we sold half a billion dollars' worth of it. And then the price point of PCs dropped to $999 when Walmart decided to start selling PCs! So, I got a phone call from the buyer. He said, “I want—I want to meet you personally! Like, I know you’re—you know, I want you to come here, and I have an offer for you, but I need—I don’t want your sales guy; I want you!” So I went there, and he said, “Hi, I'm the buyer. I last week—I sold the fishing boot category, which is very big for us in Walmart. Now I’m the software guy.” I said, “Okay, well, I am here.” He said, “I want to sell Read A Rabbit for $14.99.” And I said, "Well, we can't because that's the price we sell it to you for, and then you sell between..." He said, “No, I want to buy it from you for $5.20, and I’d like to order 12 million cents. And just so you know, your competitor is outside in the hall; you’re the category leader, so we always give you the multiple SKUs first. If your answer's 'no,' I have no problem with him, but he’s right outside. Just see him as you leave!”

Didn’t have a chance to call the board or anything! Took the deal!

Wow! Never looked back because he knew something I didn’t know: the demand would explode for Read A Rabbit for test scores! When—when—when everybody American before to PC Neverland, we grew by 40%! And we put out a lot of competitors out of business! Because we scaled! That was the year that "Bad" album came out by Michael Jackson, and we told every press in the world he had to delay the "Bad" release for two weeks because "Read A Rabbit." I’m proud of this!

Wow! That’s amazing! I mean, I’m kind of like I said—I think pricing, like, one of the strategies that we’ve had is that it’s really—it gets the part of the goal of 23andMe is research! And so, I was focused on driving volume! And if you’re focused on driving volume, then it was really important for me to say, “I need to—I’m gonna cut down the price!” And so much—in, name, you must be very, very sensitive versus price by now!

We have been doing it for years!

We have been doing it for years! And we’ve tried all kinds of different pricing! And we can see at different holidays and—and against their seasonality for us—like people never would have expected—like we’re registered medical devices with the FDA, and we do a massive amount of volume during Christmas! So it is—it’s a gift! And that was actually one of the things also that was not anticipated is that this is something that people give on Mother’s Day, Father’s Day, graduation presents, birthday presents—for holidays!

Again, another reason why you gotta merge with Ancestry!

Well, chatter. But I think it’s really—like I said, it’s one of those underappreciated arts!

I totally get it! 'Cause I've learned from my own experience!

Let’s just—hi Mr. Wonderful! This is Brooke. My question for you is, as I'm currently in my second year of university studying and being involved in a bunch of extracurriculars, I'm afraid that I don't have enough time to fully start my own online company, but I really want to! Do you think I should wait until after graduation, which by then I would have gained all my knowledge from my undergrad degree and also some experience from co-ops, to then start it? Or should I start right now? Well, I crave for financial freedom!

I said I think if you have a great idea, you should pursue it!

Well, you’re—you’re cool with it; it just puts more pressure on her! I mean, think about that!

I think there’s ways to— I’m a very effective multitasker, so it’s hard for me sometimes to—not everyone is. But there’s ways to try it! You know, and at least researching the idea—whether you have to go all in versus, you know, trying things! Like you look at Sara Blakely and how she first, you know, you try it—you experiment! And the first couple years of any startup is a lot of experimentation! So, you know something? About being in college, that is you have a great testing ground right there! I think the strategy is you go to a professor in one of your entrepreneurial or business classes to say, “Look, I’d like you to grade me on my ability to start this business while I’m here!”

Now, I mean, maybe that's how you allocate some time, and you actually get graded on them! Do the research or whatever!

I want to end on a topic that, you know, we all deal with, and I’d like to hear your opinion on it! This is about families, but family—you have a very, you know, open view. Obviously, you’re raising—you’ve got a great compound—you’re raising your family there! That's wonderful! You’re financially free! That’s a great thing; you deserve it! You did it yourself! What do you think the modern family looks like coming out of this? And I have some eggs myself, and speaking entrepreneurs now, what to do with children? I’m not sure I want to give my kids a tremendous amount of wealth! I’m not sure that’s a good outcome! What’s your plan?

I’m a huge believer in not—I tell my kids all the time, I was like, “I’m a huge believer in making you suffer!” So I—and I tell them, like, you’re not—when you go to—when you leave the house, like, you will get nothing! Like, you need to learn how to be scrappy! So part of what we’re doing in this quarantine is, you know, how do you make a bed? Like, why do you have a duvet cover? How do you clean the bathroom? And I think that, you know, I didn’t grow up with money, and at the same time, I grew up near Palo Alto, so I saw people who had money. And I always found that there was this incredible creativity when you have constraints and you don’t have cash! My roommate in college, for instance, you grew up, you know, with no money at all and quite before was the most creative person I knew!

And I think that there's something really beautiful that comes from not having easy access to capital—the struggle! And I think also, like you mentioned, I have money now and I’m free, but actually, to me, it’s not the money that makes me free; it’s the ability to know how to live without money! So like the first year I lived in New York, I earned $40,000 a year, and I was determined that I knew I would never make that much money again! And so I needed to save $1,000 a month! So I gave myself $15 a week to spend! And I took the leftover food from the Yale Club! Like I walked 120 blocks every day! I went to any free dinner invite! Like, I learned—I knew how to save! I knew when there was, you know, squash on sale, 12 for a dollar, I bought it! I would like bought it out! Like, I knew—I know how to live on nothing, and there’s freedom! It’s not necessarily the freedom that comes by having a lot of money; the freedom comes by knowing how to manage your expenses and knowing then like to do the things that you want to do in a very limited budget!

So I’m a huge believer: like the kids will not get—they will—they will not get! Like, I will pay for school—I’ll help them as needed, but they really need to struggle because beauty comes from that struggle!

Ashley, give me two ideas for books for our viewers! What do you like to read right now? What’s on your mind?

Oh, I just had my—my son! I’ve been reading some books with him! He just read the Henrietta Lacks book, which was about in part—I'm having a really good time with my son; he's having this little book club with him! And for me, it’s like thinking about like ethical issues in research and the importance of transparency because people are worried about privacy! And for those of you who don’t know the Henrietta Lacks story, it was a story of somebody who was sick—they took her cells, her tumor cells, and they used them in research very widely today! And for me, one of the most important things as we are having a data economy is that people understand how their information is being used, so transparency is really key!

The second book now that I’m reading with my son is an oldie but a favorite: "Tuesdays with Morrie." Yes! Because I think that, again as this time that we’re sitting at home and you have an opportunity to be more reflective—it’s kind of about—and it almost goes with that first question we had: how do you want to live your life? And there’s an opportunity while we’re gonna be quarantined for the next at least four weeks to think about like how is this making you rethink everything? And how do you want to live your life? And when you are at that point in your life where you’re on your deathbed, are you looking back and do you feel like you missed out on anything?

And I always have—ever since I read that book in high school, I’ve always started at that point, and then I make sure that everything I’m doing—like, I’m going to be happy when I’m, you know, fortunate to be, you know, a hundred years old and—and I’ll be, but I want to make sure I don’t have any regrets! And so thinking about that, and they want my kids—like they’re at this lovely young age now where they can think about like what kind of life do they want? What do they dream about?

Listen, we've had a great time today! I've really enjoyed your insights, and I’m sure if yours did, too, particularly some of those insights on these questions! A little tricky, but you seem to call it like it is! I like that!

I try! I hope to see you back on the Shark Tank set! You're a hero! And you’re a meanie! You're just—actually, I almost sent you a picture because I had my potato with my face on it for a long time, and then it finally started sprouting! And so I put it in the compost, and I almost sent you a picture of my lovely potato with my face potato! Those things just keep going! And now, it’s strained with the demand because there’s another business that, you know, people want to send something to make someone else feel better! Whether it’s a cupcake, or potato, or, you know, whatever!

It’s so amazed that which businesses got affected adversely versus the ones that have just exploded! And yeah, it would have been easy to guess, but we've been wrong in multiple cases! And, I’m spending a tremendous amount of time working with my entrepreneurs to get through this; I just ended alone, so what am I—one of my companies in Oklahoma because they’re bank assurance. Mmm—they can’t even go arrange for the government-assisted programs, I know! What—you know, and they have a fantastic business, so it’s crazy! It’s a remarkable time, but anyways, look, it’s been absolutely great!

It’s been great and I just have to say one more thing: My son, like I said, this on the show, my son really wanted me to do a deal with you, so anytime you want to sell part of your potato, you screwed me over so many times! I’m going to talk to your mother’s just really! We’ll make it happen at some point! We want to be in with you on something! Think about the trouble we could cause you!

You had another interview idea for me?

Oh, actually Seth! South Berkeley, he went—you know him?

I don't know, but I know—yes!

Yeah, Seth is—he’s an old friend, who I guess a very eloquent, charming, and I think it would be an important interview in this time! I’m having so much fun doing this given, you know, I kind of sleep for hours that I worked four hours, sleep four hours—it’s a whole new way of living!

I—I’ve learned the time-shifting is very cool. Yeah, if this is gonna—it goes back to what we started—this is gonna change so much!

What the other person—they’ll be interesting is Michael Specter, who is a writer for The New Yorker! Yeah, so he lives out here now; we see him often, but he wrote a bunch of books just on this concept that people, you know, don’t believe a lot of science experts! People would rather believe Gwyneth Paltrow than, you know, Falchi! So, so it’s an interesting moment in time like why is it that the scientists have lost a lot of credibility?

So, he’s—he looks at a lot of that, which is also interesting, you know, around climate change!

I can’t believe it’s the Paris Accord and how that whole mandate is basically falling apart!

Well, in some ways, I mean, look what’s happened now with climate change! Like, the weather is lovely, and whether we liked it or not, we’ve been forced to absolutely cut our consumption!

Yeah, that’s true! I wanted to ask you just your personal opinion on—I’m pretty—after interviewing and then doing the off-camera stuff with David Kennedy, the doctor, and Martin Solomon, it’s very troubling the wet market stuff! Like it’s a social norm, though, and it’s a historical one in many cultures! But I’m feeling like speaking out against it because it’s caused a lot of grief both economic and in human life!

You can’t eat a bad head; you just can’t do it, right? And I think it should be globally acknowledged, and we should modify as a human race!

Yeah, about that! Am I gonna get myself in love?

No, I think it’s—I think it’s worth having that discussion as to where these pandemics come from! Pandemic risk comes from! And clearly, the economic consequences from this one are massive! And if we can go to the root of the cause, I think it’s important for us to say, we need to go to the ROO, the cause! A lot of aspects of society have had to change because it’s in the best interest of the entire population! There is a route! There is a cause! And when you eat species that you shouldn’t, this is what happens! And you can’t contain it in your borders!

And I don’t want to focus on one society or one country, but it should be coming legally globally! It should be a mandate just like war! There are certain things you have agreed to, and I think I’m gonna make it one of my pitches and causes, because I’m pretty unhappy this keeps happening to us over and over again for one singular reason!

I think you look at it as not like anything that has the risk of causing a global pandemic! We need to reduce or cut out! And yeah, clearly wet markets are an important contributor to pandemic risk! And so we need to reevaluate those!

So I—that’s the kind of thing would be really interesting if you chatted with separately or Michael Specter about like bringing in the scientists who are really looking at those—what kind of impact would that have on the world?

Yeah, thank you! Your insight on that, because you’re looking at this from a data basis!

But anyways, give me a call when you start your negotiations with Ancestry! I don’t give you any—

No! Well, I can’t wait! Hopefully, your fees are low!

Oh, it’s so expensive! You know?

I know! You’re not giving your son any money!

I will after I get my fees on that! He might join you; he’s a good negotiator learning how to argue non-stop!

I had a lot of fun! Thank you!

Take care!

Yeah, you, too! Thanks, Mr. Wonderful! Annie, Beach lockdown! I have to get out! Take a cruise on my Viva La Bike! It’s beautiful! Just got it! I need to get out once in a while like anybody else! And I just thought this would be a great way to celebrate a little freedom on a bicycle! Custom made online!

I love what these guys did! Now, I'm not a paid spokesperson! I bought this bike! They’re not asking me to do this! I’m just doing a shout out for a great bunch of entrepreneurs! Everyone said, “Well, you gotta do that!” I love this thing! Go online, talk to Stan the man—that’s what I did on Facebook! Design my own bike, add a little certain junius a quad to it! Now, I'm cycling around getting a little exercise in the Miami sun!

For who? Stay safe, everybody! Bye-bye!