Anne Wojcicki : How to Build the Future

Today we are here with Anne Wojcicki, co-founder and CEO of 23andMe. Thank you very much. We always like to start with how you came up with the idea and the sort of the founding story of the company.

So I was working on Wall Street. That doesn't sound very fun. It was fun! I loved it. So I grew up in academia. I always thought I'd end up being an academic. I got buried by my parents. I went to a job fair right out of college; my parents made me go. I got this job offer to go on Wall Street. It's one thing I always tell young people: like, you never really know what's gonna come your way. You know, just take every opportunity.

So I very randomly got this job on Wall Street. I had no idea what it was, but I kind of figured like actually I only took the interview because they gave me free frequent flyer miles. I won the flight; I won the frequent flyer miles!

So you had to fly there, but you got to keep the frequent flyer miles?

Yeah, I was just excited! I was like, it's a free trip! Like, it will be 5,000 miles; like, that's pretty awesome!

So I was on Wall Street for 10 years, and I loved it. For me, it wasn’t just about trading and making money and doing these things, but it was like I got to learn about companies. The one thing that is amazing on Wall Street is that you get to go deep on certain companies when you're really interested in them, and then really broad, knowing a whole sector.

I got to know small cap biotechs, pharma companies, hospital systems, and insurance companies. I got to have like a really broad landscape of health care. In the beginning, I had this eternal optimism like health care is gonna totally change. There's antibodies; there’s like technology; there are all these new discoveries coming. It’s gonna be so different.

And then when the bubble burst in 2000, a lot of innovation dried up, and I started to see more what health care really is. At the end of the day, health care is an amazing business that really effectively monetizes illness. I used to always say, you know, if I successfully get you to never be diabetic, no one makes money.

But if you do become diabetic, there are all kinds of ways I can make money. At the end of the day, when I think about what I care about, what's in the best interest of me, like, I'd rather just never be diabetic. I'd rather never be sick. And there's no one in the system today that really thinks about how to keep me healthy.

So after 10 years of investing, I felt like I really understood the system, and I also understood that you have all these people with the right intentions who really care, but the ship's just pointing in the wrong direction. No one's actually focused on keeping people healthy. I wanted to have a company that was frankly somewhat rebellious and was going to inspire people to try to really be healthier.

You know, it had sort of that Robin Hood mentality in the beginning of you know, we can't change the system from within; we’ve got to do something more radical from outside. One of my favorite Charlie Munger quotes is, "Incentives are superpower," and I always believe this. I think this is the clear problem you just identified.

So how do you think about how you design a system or a company that incentivizes but is incentive to keep people healthy?

Well, I realize like the main thing in health care is that you don't actually ever have a voice. Like you don't; you don't actually because you're not the payer in health care. The individual can’t actually make decisions. It’s your insurance company, your doctor, the pharmacy benefit manager—there are all kinds of people in the back who actually make decisions.

I think there's all this data now about, you know, you go in for surgery, and those doctors coming into the surgery that you've never even met. So for me, what was transformative, like what we did to change the incentives, is to put you in the power seat. Because I feel like you make retail decisions that are in your best interest because you're actually the one paying the bill.

So for us, what we decided to do—that wasn't frankly seen as disruptive—was we are direct-to-consumer. I remember when we launched, doctors were just, your health care professionals in general, were saying, "Patients, this is irresponsible. You need a medical professional to do this. We can't..." I remember one quote that really stuck with me: something like, "We can't have people making their own health care decisions; they don't know how to interpret that data."

There are all kinds of interesting things because people would publish stuff on Facebook, and then doctors would say, "Like you have to," and we’d remind people, "Like, yeah, it's their own information." So there's always been, I’d say, attention a little bit with the medical system.

In the medical system, historically there are tests, like the pregnancy test. The pregnancy test, when it came out, was seen as radical. How could women ever possibly learn at home that they're pregnant? If you look at the literature of, you know, that era, we look at that today and say it’s crazy.

One of my favorite papers is a GMO paper from the Journal of American Medical Association from 1969, I think, where they asked doctors, "Would you tell your patients that they have cancer if they had a cancer diagnosis?" Over 90% of them said no. I always put that in context of, like it helps people understand like physicians were trained in such a way, and so I don't blame the system or the individuals; it's just like that was the culture that was thought of, like what was actually in your best interest.

I think what we do is as we empower consumers, we are showing that people actually can be—like people want to be in charge of their health! They want the information, and they actually want to be in control.

I always like the sort of model of thinking about the world fifty or hundred years from now and looking back at what we think was just totally ridiculous. Yeah, and this sure seems like—I think health care is a type because health care is like, as much as it's science and it's data-driven, it's also not. Like part of what people don't necessarily do—defy different physicians and get five different ways of treating cancer—is because there's the practice of medicine.

You can get different opinions. One of the things that we're specifically trying to change is exactly that: to say that we're trying to get data so that it's no longer a question of like, "Hey Sam, like what’s the best in your best interest?" That there's actually data to say exactly what you should be doing.

How do you think the medical system or the health care system overall will eventually get to a place where we don't have this misalignment of incentives you talked about, and we have data, and we have people in control of their own health care? Like, if you could wave a magic wand and say, "I'm gonna fix the health care system," what needs to happen?

I think the reality is what needs to happen is that we're going to have—like you have a universal payment system, so single coverage. Like the reality is, like who cares about keeping you healthy today? Because you could be overweight, and you can eat poorly, and you can never exercise, and you won't see the consequences of that for the next, let's say, 20 years.

So the reality is, like, who's going to benefit from that? And the reality is, like it’s society, and it's you personally, and it's like, you know, somebody who's willing to invest in you in the long run. I think for a single-payer health care system, or like a country, they care about actually trying to keep you healthy for as long as possible.

I think second, people—like we don’t want—we saw that communism doesn’t support the system that we all want. People have to be willing to spend money, and they have to step up. I think the same way you see people stepping up with yoga, and vitamins, and weight-loss studies, and, you know, all kinds of different alternative cares, people at some point have to stop and say that your health is also your responsibility.

I think the more that we can get people personalized information about themselves, the more that they are willing to execute on taking care of themselves.

Speaking of that, you could have started so many different companies in the health care space. How did you decide this was—it was not an obvious choice at the time?

For me, it was totally obvious. So for me, there are a couple things that were happening. One, I always loved genetics; it was my first investment in 1996, and so in some ways, it was my first and it was my last. So the genetic revolution was happening, like right when I started investing. There was the race of, like, you know, getting the cost of the genome down.

It was super exciting! I started looking at those investments again and real—izing that you’re gonna be able to buy essentially a scan of your entire genome pretty inexpensively. That was the first nugget of, "Okay, well, you can actually start to get huge amounts of genetic information."

And I was seeing this world of, you know, social networking—social networking was happening. And you don't actually need the old guard to get things to happen; I could crowdsource! So it gave me this idea that, wow, if I just empowered everyone with their genetic information, and I crowdsourced all this information—like, if I have the world's health information, what could I do?

People were like, "Well, you could..." You know, a lot. So the idea really was we should do that! Like instead of relying on Stanford or Harvard or Pfizer to go and solve a disease or like how to be healthy, we—the people—we can do it.

So in some ways, I was like having grown up in this Google environment and knowing, you know, the social networking world that was coming up, it was piecing those things together. That was like combining the technology and science with the platform that is really emerging.

I've noticed that many of the most transformative companies come because the founder sees some like an intersection of two pretty different but really important trends a few years before everybody else does. This is clearly one of those.

Like the fact that crowdsourcing works is still amazing to me, just totally. What's also, I think, when a founder really wants something personally—like for me, to really want this personally? Oh yeah! To me, it was like—like the whole beauty for me of genes, of genetics is like you have gene-by-environment.

And I’ll always love, like, people debating, "But is it your genes or is it your environment?" I'm like, "No, the whole beauty of it is that it's both!" So like you might be genetically high risk for diabetes, but like there's your environment. So what can I do? Very few, you know, genetic elements are 100% deterministic, meaning a hundred percent likelihood that you're going to get it.

So that means there’s an environmental component. We can potentially do something, so let's go figure out what you can do and then tell people.

What's the reaction when you first announced that you are going to do this? Like what was it like inside the building?

I think there was—you know, it's always like startups are so fun because you get a bunch of people who really care, really passionate. I think people were excited, and people knew that there would be controversy. In some ways, I think we attract people who have all experienced the health care system in their own way and realize it has its limitations.

So there were people who were excited about 23andMe because of the mission, and they were looking to contribute in some way to helping change the system. So there was enthusiasm, and we had like videos; we were, you know—we were also—we were super excited to launch, and we thought there was gonna be like this big coming like everyone.

We had tons—like we had spit parties. We had the cover of the Style section; we had the spit party in the building! But I have to say we sold a lot the first day, and then it was slow! That happens!

We were probably selling 22, you know, 15 to 25 kits a day, which is not a lot.

How did you—well, I guess two questions: One, how did you eventually fix that? And how do you, as a leader, keep momentum in the building when you know you have this great launch? Everyone, the first day is always awesome, and then you have what we call the trough of sorrow.

Yeah, people get pretty motivated. I tried! So that's actually a good—there’s always a trough of sorrow, and I think it's important to not let people be totally—you know, to not like wait hoping for immediate success and then to be overly distracted by the trough of sorrow.

And I think that actually happens not just in launches, but every time you come up with a product, you have no idea how well it's gonna go. Like I remember when my sister first launched adsense, and she’s like, "I don't know, you know, we'll see how it goes. Like it’s kind of, you know, it's an experiment; we have no idea.”

And then clearly, it went on! But part is it because you like—you work hard at it! And I feel like for us, in that trough of sorrow, we recognized like more we focus—we focus on the long term, like what do we need to do to get to this point?

I think as a leader, for me, one of the most important things is not to wallow on today, but to wallow on like, "Okay, in two years, this is what it’s gonna look like, and these are the steps I need to do to get there." People love a vision, and people love a plan. You just need to outline like, this is where we're going.

So when we saw that sales were slow, we were like, "People don’t understand genetics!" But some basic market research could have told us that. Like people don’t know why they want their genetics, and then it was like, "Okay great! Now we actually need to educate the population about why, like, why would you want your genetic information?"

And how did you do that?

So I started changing my talks. Like I gave—I would speak tons in the early days, like if you gave me a conference invite, I took it, any talk—because part of it is, it's like constant feedback.

So again, for the people who want to be entrepreneurs, like you just—you’re constantly learning, constantly getting the feedback! So I would change my talks—I never gave the same talk twice. Like when I look at my inventory of all my talks, it’s like there are like 500 of them because each one was slightly different.

So I remember specifically getting the feedback: "What is the value proposition in what you're doing?" And I was like, "Great! I can answer that question! Over fifty percent of my customers get a medically meaningful result!"

And then I started like—I started shifting the conversation! So part of it was like getting like real-time feedback, and part of it was helping us like define what we need to do to show the value.

It was clear people need to understand genetics; they didn’t understand the basics! They need to know what is the medical utility of this. And then also, people need to know that they're not the only one; like that's not weird!

Yeah, oh, this is like weird. I did that! We need to drive social acceptance, and, you know, I'm part of also medical acceptance. So we did a ton—it's one thing I always advise science companies: you can’t speak like, I can’t just tell you, like, "Oh, we’re great; we have great science!"

No one—like no one believes that! So what you need to do is you need to publish! Like you put—like I never even argue with a scientist. I just hand over my publications, like, "Here you go!" Because that’s the reality. You speak with your data.

So like I can make all kinds of claims, but like here’s my data to actually support it.

Can you talk about the best decisions you made in the early days? People always ask about the worst—what you can talk about if you want—but I’m curious if you look back, like, were there things like that where you learned, "I need to interact with the scientific community in this way"?

Are there a few decisions you made that looking back have been critical to success?

I think my—the first two hires—the two founding scientists—were just like Brian and Sergey were amazing! So in some ways, like hiring the right people, for me, was such a critical part of the company. It was the scientific integrity of what we were gonna do, and it set a bar for the talent that we are going to hire going forward.

So I think in some ways, like having the right people—we noticed that it is almost impossible to search! You can make a lot of mistakes as a company, but if you screw up the first, yes, five, seven hires, it’s almost—you can—it can sink you!

Yeah, what’s it like being in a regulated industry? I think one thing that a lot of people say when they think about—they have—they want to do this really ambitious startup like genetic testing, but they are afraid because it's regulated.

So I think regulation in some ways—there's like, there are pros and cons. In some ways, like when you're regulated, it means that there's rules—like there's, like there’s guidelines, and you can figure out exactly what that means.

So in some ways, like there's more of a path about actually how you have to execute it. It definitely also means that it's more expensive. Like there are—there are rules, and you don’t always agree with all those rules.

When we went from an unregulated company to a regulated company, there was definitely a pretty major transition for us because we were used to—you know, you hire smart people. What are smart people like to do? They like to question, and they like to argue.

So we would question all the time! Like, "Ah, well why would you need like, why do you need that test? Or why do you need this study? Why do you need that number of samples?" We would question all the time.

One of the things I think in a regulated environment, again, like it’s like the DMV—there's rules! Like you just—you follow! Like there’s a level of obedience! So I’d like to encourage people it’s not—it’s not so overwhelming to be regulated!

That said, it requires a lot of communication, and in some ways it requires a communication style that's not prevalent in Silicon Valley, right?

Yes! That is hard! I think there’s a lot—people—there's an impedance mismatch there. There is! And I think you know, we always said, like we thought we were communic—like I look at some of my old communication, and I'm like oh wow, that's embarrassing!

Now my—the way we thought we were communicating appropriately and how it really wasn't. So there's a style; there's a style and there’s a form and there’s like ways—you know, there’s actually like—there’s a path, and there’s a rule!

It's not terribly clear! You know, I think the regulatory world could do a better job of helping outline! And one thing I do appreciate from now having been regulated for a number of years is that there is a bigger picture that they see.

So people who work at the FDA, or people who work in government—like it’s a public servant job. Like they care; they care about public safety! Like at the FDA, like they care about public safety. There are so many companies—like we can all see them—there are so many companies trying to dupe the consumer.

Yes! And their job, like they are there to keep us safe! So I have a lot of respect for what they do, and the onus is on us as like this startup and the new company—all these people wanting to do things in a new way—the onus is on us a little bit to explain how we're doing it, how that works, and the way they speak.

Just like I mentioned about scientists: they speak in data! Like you can't just say like, "Oh no, no! Trust me, I'm the good guy!" Right? You have to show with data, and you have to show with data in lots of ways.

So in that capacity, I don’t really mind because it's like they do know, they know a bigger picture story! You know, some of the people we worked with have been there for, you know, 20 years and were amazing, and they have a depth and breadth of knowledge that I'm never gonna have. So learning there’s input to genuinely take.

As you look back, you know, from the day you signed that your vision on the day you signed the incorporation paperwork to now—how much did this all play out like you thought it would?

Oh, it was remarkable! I like it! So I actually have this picture of the day we signed, and I always look at it, and I'm like, "One, like I really dressed in a very different way than I do today," but two, our Series A documents and our Okay R’s from 2007 are remarkably similar to what they are today.

That's always—so I think we're unusual. So like when, like one of our investors—like we—he has said—he’s like, "What’s amazing, he’s like, I look back on everything—like you’re a broken record in some ways!" That’s why it’s also so easy to do speaking engagements—because I’ve said the same thing now for a decade!

We have a mission; we have a drive. Like I know where we're going, and it's been—we've been able to continuously execute on it.

The best companies are remarkably steadfast. I think it’s hard to do because entrepreneurs sort of by definition like to start doing new things.

Right. So I think one of the hardest things for an entrepreneur—is like the, you know, the trough of sorrow! I think it’s important to stick with it!

Like one of the things I think like the most important thing I think I've learned at this—like doing this now is the importance of persistence! Like you have to stick with it, and when you stick with it, you really see a benefit!

There are things that I see now I've done it for over a decade, and I tried—like one of our missions is to tell people anyone can be a scientist—anyone, any age level! It’s part of the whole reason we’re directing—we're like I believe anyone—you could be eighth grade level, like—and you have the—the ability!

I love it now when kids come to me, and they're like, "Oh, I saw you speak, and because of you, like I really—I was like yeah! Like even though I like I—you know, my parents don’t know anything and I didn’t really have that degree—like I’m now in a Ph.D. program at MIT!"

Like I get amazing stories, and you never—in some ways, it takes a long time to see the consequences of your actions. So it’s one of the things I emphasize to people: like if you really care about something—like if you’re really passionate—it takes a decade to really see the impact!

Yeah! I mean it’s like compound growth; it’s always misunderstood. It always takes longer, and then the magnitude in the last final years is always bigger than I think! And I think what happens is that people can’t be like, here, the WhatsApp story; they hear other stories, and—and I say it—like the real story is like the companies that continue to persist even if there’s challenging.

And everyone usually—like the WhatsApp story are the rare—but like you can be super consistent!

That’s one thing, like when I see the press about us now, it’s overwhelming! Like we just persisted!

Yeah! That’s it! We don’t know tonight's success!

Yeah, ten years of persistence!

Yes, the overnight success is that ten years of persistence. So you’ve done all these remarkable things as a company, and the one that I think is most remarkable or sort of the most important of the future of the world is that I think in the last 11 years, genetic testing—you know, because of you—has gone from something that people are afraid of to something that is now accepted as a really important part of putting people in charge of their lives and their health.

But I’d love to hear what the next 11 years look like! And, you know, if we had this conversation in 2029, what would we be talking about? New accomplishments then.

So I said, like, my original mission—like if you think back to my Wall Street days—was like I think the system is broken. Like how am I gonna be healthy? So success for me is, like, I would like to be healthy at 200!

So I now know I have my genetic information, I can learn about things, and I have set up this research machine where I can collect data from all my customers. We can make discoveries; we give those discoveries back to our customers!

I have this amazing machine for discovery! Now, I want to execute on the vision of, like, I would like to be healthy at 100! So like success for me is how do I now—I just empowered—you have 5 million people empowered to learn about themselves, and they keep coming back!

We collectively, as a 5 million-person community—and growing—is that the biggest genetic data set in the world by far?

Yeah, that’s awesome! With health information?

Yeah! But like to me that’s where there’s a power in what we can do now to make discoveries about prevention! So we have the drug discovery arm.

To me, I look at it as—like we have two aspects. I hear, like, you’re healthy today; you want to keep staying healthy. You have a condition that like—uh, you just have this, like—we want to have drug discovery for that now! We like to keep you healthy!

And I think about who—like what are the partnerships I can do? What’s like the community I can form to, like, actually help you make behavior changes?

So one thing I see all the time when I meet people—again, all economic levels, all socioeconomic groups—people want to be healthier. They don’t necessarily know how!

And I see this like, you know, people don’t necessarily know like, “Oh, are the Doritos really bad? Soda really bad?” Like it’s remarkable how much—like there's a disconnect between like you hear things, but you don’t really know!

What are the ways that we’re gonna be able to help?

Have you discovered anything that is—I mean obviously the whole point of this is it’s personalized—but any generally, any general trends that you've discovered that apply to a lot of people that they might not already be aware of?

Like, I think most people know they probably shouldn’t drink so much soda. I know, but there’s probably people—like some people who could absorb more sugar than others!

I think those are the types of things—like we’re all pretty different! The beauty of humanity is that you’re meant to survive!

Like you just look at—you can look at it from the perception of viruses! Like you have the 1918 flu; lots of people died, but some people survived! Some people are immune.

The same thing with, you know, foods! Like some people just can eat a lot of sugar; some people can’t! That’s why I like—we are still around on the planet today!

So I think the main thing that I would say, takeaway is that there's a lot of variability! 100%: like you shouldn’t smoke, you should exercise more, you should eat better!

But there is—like there’s some people who can smoke and never get cancer! There are some people who eat a lot and they never get overweight!

Like some people don’t exercise; it doesn’t really matter!

How far away are we from someone being able to spit in a tube, and you tell them like, "Here’s what you need to do to have a good shot at 100!"

So that's one of the things that's most exciting—is like what we can do by having a community of people who are all engaged! We're starting to do what we call these intervention studies!

So we did our first one on weight loss! So we had 70,000 people doing, you know, a six-arm weight loss study! So that’s the first time we're doing it in that kind of scale specifically to see based on your DNA, are there differences in weight loss?

I'm also—I'm personally obviously motivated in the Parkinson's space—of people who are genetically high-risk. Are there behaviors that can lower your risk, and how much then can you lower your risk?

So we're starting to do those types of studies specifically because that's what our customers want! Like our customers specifically want to know exactly what you just said—"Tell me what to do!"

So like my—like when you say again, success for me is, like, at the end of this decade, I will tell you what to do!

At the end of—like by 2020! Why?

I look at it as like, "Well, no, I look—yeah, in the next ten years of the company." So I’m already ten and twelve years in, so they give me another eight years; that’s pretty exciting!

I’m on it! I’m honest. I will follow the instructions to the letter! Thank you very much for taking the time!

You’re welcome! Anytime! It’s really fun! Super fun!