The Rise of 23andMe: Spit Parties and Silicon Valley Hype
Founded in 2006 by Anne Wojcicki, Paul Cusenza, and Linda Avey, 23andMe rode the wave of excitement around direct-to-consumer (DTC) genetic testing. The company found eager customers among the Silicon Valley elite, even hosting “spit parties” where the rich and famous gathered to submit their DNA.
With Wojcicki’s connections – she was married to Google co-founder Sergey Brin, and her sister Susan was YouTube’s CEO – 23andMe attracted major investments from firms like Sequoia Capital and Fidelity. By the early 2010s, 23andMe was a bona fide unicorn with a valuation of over $6 billion.
Trouble Begins: Founder Ousted and Data Breaches
However, cracks began to show in 23andMe’s gleaming facade. In 2009, Wojcicki orchestrated the ouster of co-founder Linda Avey, the original scientific architect behind the company. Avey later confirmed it was “not something that I chose.”
As 23andMe’s valuation soared, so did its troubles. In 2023, the company suffered a massive five-month data breach exposing millions of customers’ sensitive genetic data. Rather than take accountability, 23andMe blamed users for poor password practices, despite evidence of glaring security flaws on their website.
The Fall: Layoffs, Lawsuits, and a Failed Buyout
The data breach resulted in class action lawsuits and a $30 million settlement – a drop in the bucket for 23andMe, but a blow to its reputation. Hemorrhaging cash, the company laid off 40% of its staff and gutted entire departments.
Wojcicki attempted to take the company private with a lowball offer of $0.40 per share. The board, packed with Silicon Valley power players, resigned en masse in protest. 23andMe’s stock, which debuted at $10, now trades for pennies even after a 20:1 reverse split to avoid delisting.
Lessons from 23andMe’s Downfall
23andMe’s story is a cautionary tale for the Silicon Valley set. Hype, hubris, and mismanagement can bring even “unicorns” to their knees. As the company faces investor lawsuits and an uncertain future, insiders are left wondering how Wojcicki squandered a multi-billion dollar opportunity.
While 23andMe’s trove of genetic data may yet prove valuable, its journey from darling to dud underscores the risks of tech stardom. In the words of one observer, “It’s a stunning example of rise and fall for a Silicon Valley CEO and her social trend genetic testing service.”
