History of Business Models: The Case of 23andMe and Ancestry

Background: Initial research results show that the market of Direct-to-Consumer (DtC) genetic testing today is dominated by heterogeneous business models. Thus, a valuable contribution to the lack of knowledge and understanding about business models in this market is already given. Previous research has been limited to three different research areas: First, the medical and ethical value of DTC genetic tests is expatiated in most of the scientific work. Only little research is found about current snapshots of the business models of various DTC genetic test providers as well as the general market development since the beginning of the sector as second and third research areas.
Objective: This scientific work follows on from this and closes the gap between the current snapshots of the business models and the general market development by examining and comparing the concrete evolution of the business models of two selected DTC genetic test providers.
Methods: Employing a systematic literature review, we reconstruct and analyze the development of the business models of 23andMe and Ancestry that represent probably the two greatest players among this market segment.
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Results: In the past, 23andMe acted very innovatively with huge objectives and visions and benefited greatly from its role as a pioneer while accepting risks. In addition, 23andMe uses the market of direct-to-consumer genetic testing as a base for two additional pillars, namely drug research and -development as well as research services for pharmaceutical-, biological- and research companies. Ancestry, on the other hand, is more cautious. Major modifications only will be made if Ancestry observes the success of a new strategy at another market participant. Otherwise, Ancestry prefers to stick with efficient and well-functioning business models. In addition, Ancestry remains focused on direct-to-consumer genetic testing as its primary market and does not rely on other pillars in its business model.
Conclusion: The development and modification of business models may be strongly influenced by the corporate philosophy and the self-image of the company. Comparing the two providers shows that the development of the business models over time can proceed very differently despite this small niche market.