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Copying 23andMe’s DNA

NOTE: The Iron Edge VC Client Care Team suggests that you consume one cup of black coffee before reading the first paragraph of this article.

 Genomics is the study of the sequencing, analysis and interpretation of the genome of an individual. It differs from the study of genetics in that genetics focuses on individual genes and what role those genes play in hereditary matters, whereas genomics looks at the bigger picture. A genome is an organism’s collective genetic profile, or, its complete DNA set. Personal genomics makes use of various techniques (notably partial or full genome sequencing) to conduct what is known as genotyping, or the determination of a complete DNA set. Genes that are common within a species can experience different known mutations at the same place on a chromosome, thereby making genotyping relevant by creating subsets within that species. Genotyping is what makes you “you”. Genomic analysis is conducted on a solitary cell from an organism, whether the cell came from an intestine, a skin sample, or saliva. Once an organism’s genotypes are laid out, the data can be compared to established and well-documented records that provide strong clues about the organism including things like ancestry and predisposition to specific diseases.

 Okay, now WAKE UP! The boring part is over. I’ve always wondered what it feels like to be a high school biology teacher. Now that itch has been scratched, so let’s move on to business.

 23andMe is a personal genomics company that exclusively caters to human organisms. So if your goal is to determine if the habanero pepper in your fridge has legitimate Havana lineage, or if your French poodle is really descended from France, I’m afraid you’ll have to keep looking. But if you are interested in discovering your own ancestral makeup or how concerned you should be about your chances of one day suffering from Type II diabetes, then 23andMe is for you.

 The title of this article is not meant to imply that 23andMe is the inventor of personal genomics and that all of their competitors are copycats. This company has been around for less than fourteen years, while the discipline is traced back to 1953 and James Watson and Francis Crick’s publication of their findings on DNA structure. RNA sequencing started around 1972, and the first full DNA genomic sequencing was achieved in 1977. 23andMe wasn’t even the first commercial application of the science, but they arguably are the largest and most visible provider of home DNA analysis kits. They have ascended the concept of commercial personal genomics from the musings of futurists to a commonly accepted part of modern life. This private company is notable for its proven effective business plan. This kind of success often invites an unavoidable onslaught of imitators.

 A couple of weeks ago, Bloomberg reporter K. Oanh Ha wrote about her experience simultaneously submitting saliva samples to 23andMe and China’s 23Mofang.  The differences between the two competitors’ results were striking. 23Mofang provided a much more elaborate and detailed report while 23andMe stayed within more disciplined boundaries. While the American company stuck to ancestral lineage and diabetes risk, 23Mofang went farther out on the limb by telling Ha that she was likely to possess strong leadership skills and that she would live to be 95 years old. They warned that she might experience sagging skin, though, well before attaining that ripe old age. This more elaborate outlook comes with some serious issues. For one thing, it’s hard to make the case that something like leadership skills results from genes more than life experience. Great leaders are made, not born. As for the longevity claim, Scripps Research geneticist Eric Topol laughed when he was told of this, and he called it “a gimmick”. This is another easy “nature vs. nurture” calculation. How long you live is affected by family history, but not nearly as much as other factors like tobacco use, dietary habits, and frequency of experimenting with homemade jet packs. As for the sagging skin — that dire prediction was followed by a cheerful advertisement for brand-name skin creams.

 Ha described an important contrast between the two sets of results in the ancestry section. The first-generation American child of immigrants from Vietnam, Ha has always understood herself to be at least 75% Vietnamese. 23andMe got this right, while 23Mofang didn’t detect any lineage from that country. This is likely because 23andMe’s data set is derived from a much more diverse population than the one 23Mofang can sample within China. But much more alarming is that 23Mofang determined that Ha is partially of Uighur descent. It’s no big deal for an American like Ha to learn such a thing, but in China that little fact can put you in a detention camp as the Chinese government is actively persecuting against Muslim Uighurs.

 We imagine that the people at 23andMe feel secure in their domination of the personal genomics market despite the presence of creative competitors like 23Mofang. The consistency of their ancestry determinations and their lack of creepy product placement lend them an air of credibility that will serve them well. Underscore this point with a “money talks” closer: The rapidly ascending valuation of this private company is intriguing. From $45 million in 2007 to $1.1 billion in 2015 to today’s estimated $2.5 billion, this certainly looks like an enterprise on the move.

 We at Iron Edge VC are proud to have pre-IPO access to 23andMe shares. If you would like to learn more, or if you know of anybody else who would, please do not hesitate to contact us by clicking “Get in Touch” below.

As always, our inventory is available on a first come, first served basis.

5f6e0d464e388c4975685025 Paul Min

Paul Maguire

Founder And Managing Partner