23andMe Board Resigns En Masse, But Founder Anne Wojcicki Remains Confident in Startup’s Future

In 2009, Anne Wojcicki took a decisive step in her role as the leader of 23andMe, the genetic testing company she co-founded in 2006. At the time, 23andMe had gained traction for its groundbreaking approach to personal genomics, boosted by funding and the trend of “spit parties,” where individuals provided saliva samples for genetic analysis. Despite this success, Wojcicki sensed underlying issues within the organization. She proposed to the board that her co-founder, Linda Avey, step down, allowing Wojcicki to lead the company solo. Avey, who played a crucial role in shaping the company, was taken aback by the decision and chose to pursue Alzheimer’s research instead.

In hindsight, Avey described her exit as unexpected and poorly managed. Nevertheless, Wojcicki’s leadership helped propel 23andMe forward. The company thrived on capturing public interest, offering insights into ancestry and health risks, but simmering internal conflicts suggested deeper issues were at play.

A Tumultuous 2023

By 2023, 23andMe was a shadow of its former self. The company’s valuation had plummeted from a high of $6 billion in 2021 to less than $150 million, while sales dwindled significantly. Adding to the turmoil was a major data breach that raised serious concerns about consumer privacy. In response to these challenges, Wojcicki proposed taking 23andMe private once more, a move that sparked a fierce conflict with the board of directors.

By September 2023, tensions reached a boiling point, resulting in the resignation of all seven board members. They openly expressed their disagreement with Wojcicki’s strategic direction in a letter that acknowledged their belief in the company’s mission but criticized her approach. Among the resigned board members were high-profile figures such as Neal Mohan, CEO of YouTube, and Roelof Botha of Sequoia Capital. Their departure marked a significant shift for the company, as the board had been advocating for a more collaborative leadership approach.

With nearly half of the voting rights, Wojcicki held significant control over 23andMe. The board’s rejection of her buyout proposal, which lacked a premium for shareholders, led them to seek a new strategy, which never materialized. Faced with Wojcicki’s resistance to external bids, the board ultimately felt their only recourse was to resign, an unprecedented move in the startup ecosystem.

Criticism of Leadership Style

Wojcicki’s leadership approach, often termed “founder mode,” drew criticism from former executives. While many acknowledged her inspiring vision, they pointed out that her tendency to centralize decision-making stunted the company’s growth. A common question among her team became, “Is Anne happy?”

In her defense, Wojcicki asserted that her intervention was necessary only when other executives fell short. She emphasized her commitment to the company’s mission rather than personal ego. However, critics argued that female leaders often face a double standard, with assertive behavior viewed differently based on gender.

Despite the backlash, Wojcicki remained steadfast in her vision, asserting that her leadership decisions were critical for navigating the challenges posed by a collapsing biotech market and growing competition in the consumer DNA testing sector.

Ambitious but Costly Ventures

Among Wojcicki’s most ambitious initiatives was 23andMe’s foray into drug discovery. The company aimed to utilize its extensive genetic database to identify drug targets and collaborate with pharmaceutical companies, notably partnering with GlaxoSmithKline (GSK) in 2018, which invested $300 million.

While initial results from clinical trials showed promise, the costly nature of drug development soon became apparent. By August 2023, 23andMe had to shut down its therapeutics program due to financial constraints. Critics viewed this as a significant setback, suggesting that Wojcicki’s focus on drug discovery diverted essential resources from the company’s core operations.

Personal Challenges and Reflections on Leadership

Wojcicki’s leadership has been shaped by both business and personal challenges. In 2023, she faced the heartbreaking loss of her sister Susan, the former CEO of YouTube, and her nephew. These events prompted her to launch a genetic study on lung cancer, reflecting her commitment to meaningful causes.

Despite the turmoil, Wojcicki continued to present herself as a visionary leader capable of navigating challenges. However, former employees noted that her centralized decision-making process hindered agility and adaptability, as evidenced by the recent board resignations that highlighted governance imbalances.

The Future of 23andMe

With the board’s resignation and an uncertain future, some believe that 23andMe’s crisis could signal a shift in Silicon Valley’s acceptance of dual-class share structures that grant founders excessive control. For now, Wojcicki remains determined to lead 23andMe through its challenges. Whether she can restore the company to its previous success or will face further struggles remains to be seen.