23andMe CEO Anne Wojcicki’s tactics for disrupting an industry

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The healthcare industry doesn’t have the greatest reputation. Service can be lacking, prices are usually sky-high, and understanding insurance is anything but easy.

Why is this? Much of it can be traced to the fact that consumers aren’t the customers, per Anne Wojcicki, CEO of genetic testing company 23andMe. But that misalignment of incentives can be an opportunity for startup founders. Anne credits much of her company’s success to a relentless focus on their customer—and the ability to build a remarkable team.

In a panel called “Leadership Perspectives: On Pursuing the Unconventional” at the 2021 Carta Equity Summit, Anne chatted with Sonal Chokshi, editor in chief of Andreessen Horowitz, about the best leadership lessons she’s learned since co-founding 23andMe in 2006.

 

This transcript has been edited and condensed for length and clarity.

Sonal Chokshi: Anne, thank you again for joining this event! We’re super excited to have you, and I actually just want to jump right in—because, I assume, people will actually learn more if they don’t already know your background or of 23andMe, just through our conversation.

I really want to start, given the theme of leadership, with how you’ve approached company building and evolved the business. Before I begin, let me just quickly give context for our listeners about 23andMe, just so everyone can follow the conversation.

23andMe is a consumer genetics and research company that uses insights, based on hard science data and much more, to inform health, ancestry etc. More recently, you announced that you’re using DNA data to inform immuno-oncology treatments to fight cancer.

On having a vision

My initial question for you is: Did you have this master plan and vision up front when you started the company? Or was it something you figured out as you saw, for example, what was monetizing first? As a leader, did you see this vision going in, and what gave you conviction?

Anne: In some ways, I think companies often seem like they are taking circuitous routes, but the founder always feels like they believe in the core mission. It sometimes comes down to a very simple principle. For 23andMe, it started with data—I always thought that 23andMe is a data company.

Previously, I spent ten years investing in healthcare companies, and biotech was notoriously difficult to be successful in. Most things fail. It’s an interesting area because you should almost never invest and just short everything. 90% of things fail.

I was at a meeting with this company that was a perpetual failure, and I was sitting with one of the scientific advisors and we were trying to figure out what could make a true difference for the company. This was back in 2014, and I said, “Well, what if you had all the world’s health information?” and he said, “That would enable us to solve everything.” 

So we thought, similar to the way Walmart and Amazon know how you’re going to shop, wouldn’t it be great if we could offer a predictive history for personal health using data?

Second is that you would understand human biology. And if you understand human biology, you know how to manipulate it. Drug discovery was always part of the ideas, but the master plan from day one was to drive efficiency through all of healthcare. 

In my mind, efficiency is like keeping you out of the system by making you healthier. And when you do have an issue, we’d have a drug that actually works.

Leadership is focus … and listening

Sonal: That’s great, thank you. But at the same time, whenever one tries to take on something that’s so grand and ambitious, there are a lot of decisions and tradeoffs you need to make. Conviction is key, but where did you feel that you brought in (or ignored) certain mindsets to help you figure out the pacing of that business model? On the outside, it looks so neatly and beautifully linear—but on the inside, I’m imagining it might not have been so clear.

Anne: One thing about me is, I am super impatient. I’m kind of famous for pushing timelines.

One thing we’ve done well is hiring people who are really good in areas that I know nothing about. As a result of that, I have a lot of direct reports. I manage the cross-communication between these people, but I’m not going to manage them, because they’re great at what they do. This also means I have people who are good at pushing back on me all the time. I think one of the most important things for me as the CEO is to push, think big, and to be aggressive—but also be open to people pushing back on what’s potentially realistic, and then for me to listen.

That said, it’s been a very step-by-step approach. One of the first things we said was, “We’re going to dramatically accelerate the pace of research.” And to do that, we first had to show that people were actually interested in research—that was almost like step one. Will people come? Does this crowdsourced method work? Second, we had to prove that our data was equivalent to what was previously used. At each step, my head of research would push back on me and say, “You can’t say this, you can’t say that. We can’t do that now; you have to first prove this out.”

The ultimate test of patience was likely the FDA. We had to prove that people were actually capable of getting this information on their own and that your data quality is good. So it’s great to have that guiding post of knowing where you’re going, but you also have to have the patience to go through the step-by-step process of getting there.

I think that I’m good at seeing point A and the last point, and the team that I have is good at the stepwise functions in between.

Evolving and scaling

Sonal: What I’m hearing is that, as a leader, you have the vision and the push, but you really trust your team to operationalize those things and come up with the in-between steps. But you as a leader are also able to hear them, so it’s not just you push push push, but interacting in that back-and-forth.

Anne: Right, and in some ways there’s a benefit of being naive. Like I can push on areas of research that I’m not an expert in. For instance, in those early days it was like, “Well, why do we have to be HIPAA-compliant if we don’t take insurance?” Turns out we don’t. There are things that people just make assumptions about, but you don’t necessarily have to actually do.

But the only way you can really scale and get these things done is having people that you trust.  Like I can tell my head of marketing that we need to create a consumer brand, but she’s really the one who figures out how to do that. It was me setting that strategic direction of not going after the physician market or reimbursement or employer channels; we’re going direct-to-consumer.

Sonal: Speaking of the business model that you just referenced, that you guys are a consumer brand, you’ve recently made some moves into being a full-stack care delivery provider. It does make me wonder again: As a leader, are there specific qualities or mindsets that you’ve needed to adapt, as you have evolved your business model? Have you had to change your current approach as you made that move?

Anne: I think that your leadership style has to continuously evolve. I often think about how different it was when we started. And there are the obvious things, like how running a startup is different than running a bigger company. For example, we don’t have a senior director title. That wasn’t an issue when we started out, but it’s something we’re having to face as we scale.

The reality is also that the world really changes. Previously, remote work wasn’t really possible. A couple of years ago, at an offsite, we had an employee suggest a four-day workweek, and I really considered it. It’s important as a leader to be very adaptable, with a strong team to surround you. 

There’s this piece of advice I got from Sheryl Sandberg in the early days, that in some ways is the hardest to execute on. She said that you can’t know every single thing going on—you can’t scale that way. If you’re dependent on knowing every piece of information, then you will fail.

It’s also interesting because you hear both sides of that. There’s Elon Musk, who is super controlling and must know every single detail, which is one model. Then you have the other model, where you don’t need to—and can’t—know everything to scale. 

Sonal: That’s great. Where do you focus on the details that you want to have the closest information around and then where do you let your team filter out the rest?

An unwavering customer lens

Anne: It’s more that I need to have the top-level information. I’m very focused on the strategy and the customer. For me, it’s one of the most important areas for me to always keep a reminder on, especially in healthcare, where the individual, the consumer, is often left behind. Like making sure we are always doing what’s right for our customer. I would say that’s the area that I do intervene on—I don’t intervene a lot with people’s decisions, but it’s usually about what’s best for a customer.

For example, lots of pharma, you can imagine, would want to market to our customers. And we don’t do that. If we have your personal genetic information and I’m sending you ads targeted to your DNA, how would you feel?

We’re always thinking about things from the mindset of the customer and imagining what we would want if we were that individual. For me, it’s important to always think about things from the customer perspective and not always the business model.

Sonal: That’s fantastic. What I’m hearing there, which is sort of surprising and counterintuitive, but yet also obvious when you think about it, is that when you’re sifting through that information, your area of focus is actually not necessarily inward but an outward focus—the customer orientation and bringing that lens to the inside.

Anne: A good example of this can be seen with our pharma side, our therapeutics discovery side. I’m not going to give input into how we’re developing antibodies or candidate selection. I’ve hired people who are really, really good at that, and who have a lot more experience, but what I am really good at thinking about is how the customer is going to feel. What is their experience going to feel like, and can we reimagine it?

It’s always interesting when I know about an area but I’m not an expert. I’ve never run a clinical trial, but I’ve seen a lot of clinical trials, so it gives me the ability to ask “Is there a different way to do this? How can we reimagine?”

You don’t have to know everything

Sonal: Another thread that I want to make sure I pull out and highlight for our listeners is how you’re saying that there’s a kind of art of not having to know everything or be an expert in everything. I think that’s a really important underlying message for those listening, especially given the theme of this conference—in terms of leadership and equity, and particularly for women and people who are underrepresented. We don’t have a lot of room to be mediocre. You often feel like you have to be the very best at things. And quite frankly, you can be the very best without having to know everything.

Anne: One of the secrets of it is hiring people who are much better than you. It’s one of the things I’ll always remember learning from my sister: Hire people who are just more talented.

Another thing that I’ve learned is you sometimes get these incredibly talented people, but they’re not necessarily great managers. You need management, and you need incredible execution. The key is finding people who are great, and then you can be the connector, helping put together all the information and having the ideas and helping to execute. That, to me, is where a huge opportunity lies, as well as being that expert and incredible person who just knows their specific space.

Sonal: Yes, talent, talent, talent. That’s definitely a recurring theme, and I hear it frequently from an array of successful CEOs.

“Build vs. buy” is not so simple

Earlier you were talking about how you’re very customer-facing, and you also mentioned how you might be thinking differently in the new kind of remote world. I want to ask you a quick question about your recent acquisition of Lemonaid, a telemedicine platform for accessing medical care that also provides pharmacy services online. What was your biggest insight or takeaway or shift as a leader going in or out of that move?

Anne: I think in every case you have to think about “build or buy.” And in some ways, it’s super easy to just say, “We’ll buy,” but finding the right culture and true right fit is important. Most acquisitions fail. I got a lot of feedback and we’re lucky to have Neal Mohan on our board of directors. He’s the head of product at YouTube, and was part of the DoubleClick team when Google bought them. He’s obviously been through acquisitions and done lots of acquisitions, so getting his feedback has been really helpful regarding how to do integration.

In healthcare, most people are not operating direct-to-consumer. What’s unusual about Lemonaid is that they are a true direct-to-consumer company. It’s a very different product experience when you’re selling to employers. In healthcare, it’s usually the doctors, the hospitals, the employers, but it’s almost never the consumer. And when it’s a consumer-focused customer experience, it’s very different—it’s hard to extract dollars out of a person.

Paul and Ian, who started Lemonaid, are just genuinely lovely people who have been doing this for over a decade. They came here from the U.K. after having healthcare experience there, then started doing virtual care work for Planned Parenthood—they’ve been doing it for a long time. 

What’s interesting about the space is that it’s a bit of the Wild West, so finding people who align with our values and have a consumer endpoint mindset was really key. And it’s been great. Paul is now in charge of the consumer business and we’re focused on figuring out how we can offer genetic-based virtual primary care to 12 million customers.

Sonal: So, along those lines, I have to say I was intrigued by what you said about the biggest challenge when confronted with “build versus buy,” an evergreen question for startups who become incumbent big companies. What was some of the best advice you heard in terms of how to integrate? One thing you already mentioned is that the CEO is now the head of the consumer business, which clicked into my ears as a great example of really centering that person within the company. But I’ve also heard that you know the most successful acquisitions are when they’re kind of siloed.

Anne: Well, I think it can be either way. In the capacity of Lemonaid, they’re completely complementary. Our visions overlap and they brought a completely complementary set of skills that we did not have in the building. But if I was going to, for instance, acquire another diagnostic company, I might easily be able to say that that is a separate company that can run independently, because it doesn’t have to integrate necessarily in the same way. But in Lemonaid’s capacity, everything that we’re planning to do is integrate it.

And I do think that we’re lucky. Paul is a phenomenal executive, and I think we have a great opportunity to make the acquisition successful.

The biggest mistake leaders make

Sonal: I’m going to switch gears a bit and ask some more quick, lightning-round style questions with more concrete takeaways for our listeners about leadership now that we’ve heard about some of your journey. Let me start by asking you, given this journey you’ve been on so far, what was the biggest leadership lesson you learned? You’ve shared quite a good number of them, but between when you started 23andMe over 15 years ago and now, if there was one thing that you could tell yourself, what would that be?

Anne: I think that the biggest mistake people make—and it’s always detrimental to companies—is that when you know someone’s not a fit, you don’t move them out fast enough. And also I’m also a huge believer that everyone’s good at something, and some people don’t fit in the 23andMe environment, but they do really well outside. So you’re doing a favor to both parties. Not doing so can be expensive and it often takes a lot of time to unwind things.

Sonal: Yeah, and it’s an opportunity cost as well in other ways for other talent.

Anne: Right, and I think that as an early CEO, you don’t have the confidence to move people out quickly. People have a really hard time with headcount transitions and laying people off. It’s really an incredibly important skill.

Sonal: Also, one thing I heard was “hire slowly but fire quickly.” That said, a lot of startups don’t have that luxury—sometimes you have to hire quickly to get things done. Do you think that’s something you had to learn through direct experience, or do you think if someone had told you this, that you would have been able to internalize it?

Anne: I mean, I think it’s one of those things you can hear all day long but you’re not going to really internalize until you suffer. And then part of it is learning from that experience of how things changed for the better, and also realizing the consequences. But it’s learning to trust your gut instinct in some ways. You need some experience with it.

Sonal: Earlier, you alluded to what you guys went through with the FDA and the regulatory process. You’re also up against Big Pharma. What was the hardest thing as a leader you dealt with, and what is some advice you would pass on to others going through something similar?

Anne: I would say, whenever you’re entering an established market, it’s going to be tough. It’s key to hire the right team to solve the problem, and then it can be a matter of patience.

In our case, there were some aspects I would probably attribute to gender in some capacity. We’d get dismissed a lot. There was this installed base of industry players who were threatened by an outsider with a different approach. Things will happen, like when our competitor tried to label us as a recreational genomics company, and we’ve spent a lot of time and money trying to change that reputation and show our research prowess.

On driving diversity

Sonal: You mentioned at the very beginning how you were investing before starting 23andMe. And of course you’ve also invested in many startups personally. What is one thing you’d change structurally in the industry? This could be in the startup ecosystem, the funding space, or even within companies themselves structurally.

Anne: I do think that there’s real issues with diversity in these industries. People flock to people that they’re comfortable with.

I remember I chatted with my sister and asked her how she thinks about getting a truly diverse population in the company. She said that either you make it a mandate and put numbers up, or it’s never going to happen.

And I think about the new laws about having to have a woman on the board. I’ve chatted with a few other CEOs who are like, “How can I find a qualified woman?” and I’m like, “There are plenty of qualified women.”

That’s where I think having some of these mandates really drives change. It has to be a priority for people, but also laws help. Sometimes if you don’t make a mandate, then it’s difficult to drive real change. 

So, for all the executives here, everything has to be measurable. If you’re trying to drive change and it’s not measurable, then what are you doing? I always recommend founders do baseline surveys of their employee population. How do they feel, do they feel included, and then have the same survey measured over time. At 23andMe, this has helped us push ourselves to look outside our natural circle and expand our hiring.

Sonal: Having that instrumentation you mentioned is really interesting because it’s another way to track whether you’re moving the needle, whether you’re responding to it, culturally, because a lot of times leaders can be blindsided.

Anne: I mean, I’m lucky to have a survey methodology team. We put out a lot of surveys and they teach me stuff all the time. Because of them, we’re really able to track and detect trends.

Another great example of this is measuring exit interviews. It was one thing that I didn’t until later, but looking at the reasons why somebody is leaving is super helpful. You can then get ahead of the problem instead of being reactive.

Sonal: I agree. I’m also a big believer in people doing a lot more with attrition data. I think people always overlook it when they think about—whatever they’re trying to figure out, from a methodological perspective. It’s the most overlooked, most insightful thing. It can tell you so much, when you pay attention to it.

I want to thank you so much for your time today, Anne. This has been a remarkable conversation. I learned a lot from you, and I don’t think I can do justice to it all by summarizing. But there were a couple of recurring themes I heard. One is having the vision, but also: talent, talent, talent. Hiring the team for the things you don’t know, not having to know everything, but also knowing the things that you do uniquely bring to the table. Things like being a leader and focusing on the customer perspective.

Anne: Thanks for having me.

Sonal: Thanks everyone! Bye, everyone!

Anne: Thanks, you guys! It was fun.

 

DISCLOSURE: This communication is on behalf of eShares Inc., d/b/a Carta Inc. (“Carta”).  This communication is for informational purposes only, and contains general information only.  Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services.  This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests.  Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor.  This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. ©20XX–2021 eShares Inc., d/b/a Carta Inc. (“Carta”). All rights reserved. Reproduction prohibited.

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