23andMe is back; but a higher price for fewer results?

23andme_logoIf you’re not sleeping under a rock, you know that today 23andMe has rolled out its plan to provide government (FDA) approved medical results. In the generality I knew this was in the offing. I asked contacts within the company, and they pretty much signaled this was imminent, though they didn’t detail the specifics. This is a big deal because for a lot of people the medical results are big reason you’d get the service. Certainly I have friends who have been waiting for years, who kept asking when this would happen, as then they could the pitch to family to get typed.

But there’s a minor hitch: you’ll be charged more for fewer results. They’re going to be jacking up the price to $199 from $99. Arguably the results they’ll be giving you are more robust than the older full suite, but basically 23andMe is increasing prices, while giving customers a leaner deal than many of us were used to before the FDA clampdown (also, carrier testing is provided pretty much free for many people with insurance if you are going to have a child).

The question then emerges for the rationale behind this price increase. After all, in the tech sector it’s not the norm to charge more for less after users have become used to a particular price point. My own hunch is this: with well over 1 million customers they’re going to aim to squeeze more information out of their current user base than gain more customers. From what I had heard, 23andMe was basically losing on customers in the initial years to grow their data set. But recently SNP array have become cheap enough that on paper they’d actually be making a profit by pushing their product for $199 if you just took the array price into account.

I’m a little disappointed in the particular turn of events, though overall I stand by my assertion from two years back that these bumps in the road will be little in the long run. The future is coming at us, at varying rates of increase or decrease, but always with a positive velocity.

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