DNA tester 23andMe’s entire board resigned on the same day. Founder Anne Wojcicki still thinks the startup is savable | Fortune

Anne Wojcicki wanted to run things—alone.

It was 2009 and her startup 23andMe was riding high, fueled by a steady stream of venture money, intriguing personal accounts of genome exploration, and the novelty of “spit parties.”

But something wasn’t right, the then-35-year-old executive decided. According to a Wall Street Journal story published this year, Wojcicki, who had cofounded the company in 2006 with Linda Avey, a genetics expert, and Paul Cusenza, an engineer and executive who left 23andMe in 2008, approached the board with an idea: Fire Avey and let Wojcicki run the company by herself. They did just that, announcing that Avey, who had first conceived of 23andMe, would be leaving to focus on Alzheimer’s research.

“It was not something that I chose,” Avey told the podcast She Leads earlier this year after the circumstances around her departure became public knowledge. “It came as a total surprise to me and just the whole way it was handled was unfortunate.”

Fifteen years later, 23andMe’s board would again play a pivotal role in Wojcicki’s story. Only this time they’d be the ones delivering a blow. In September, all seven board members at the struggling genetic testing company suddenly resigned en masse, publicly rebuking their CEO. In a public letter, the group—which included luminaries such as Neal Mohan, CEO of YouTube, and Roelof Botha, head of Sequoia Capital—wrote that while they “wholeheartedly” believed in the company’s mission to personalize health care with genetic data, they disagreed with Wojcicki’s strategic direction.

The board and the CEO had been on a collision course for months, with Wojcicki pushing for a plan she had hatched to buy the company and take it private as the company’s valuation dropped from a brief high of $6 billion in 2021, to under $150 million. Sales of its consumer testing business had slowed and a massive data breach stoked privacy fears. Meanwhile, the company’s drug discovery business—still in its nascent stages relative to its Big Pharma competitors—was draining the company’s resources and was finally shut down.

For its part, the board had formed a special committee to evaluate Wojcicki’s proposal and protect shareholders’ interests. Wojcicki, who controls 49.75% of the company’s voting rights, told the board she would not accept third-party bids, according to company filings. Given her concentration of power, the best they could do to honor their fiduciary duties was push for the best possible take-private deal. The board rejected Wojcicki’s initial proposal, which didn’t offer shareholders a premium, and pressed for a new detailed plan that would also outline how the deal would be financed. That plan never materialized. Locked in a standoff, the board resigned, something that is almost unheard of in the close-knit startup world. (A spokesperson for the former board declined to comment, and individual board members either didn’t respond to Fortune’s requests for comment or directed Fortune to the board’s letter.)

The headlines shocked Silicon Valley. But behind the scenes, trouble had been brewing for months if not years. And the instincts that served Wojcicki brilliantly while she was launching her startup began to work against her. While she is a dynamic and inspiring leader, former executives who spoke to Fortune on the condition of anonymity explained, Wojcicki also has a tendency to put herself at the center of all decisions, slowing down the machine at 23andMe as brutal market forces bore down. The North Star at the company, said one former senior leader, is “Is Anne happy?”

Amid the board crisis, Wojcicki seems to be doubling down on this approach—a way of leading that Silicon Valley has recently dubbed “founder mode.”

To be sure, Wojcicki pushes back against this assertion, saying that she empowered capable executives and took over in cases where executives weren’t doing their jobs. “I’ve always said ever since the very beginning, I don’t need to be in charge,” she told Fortune in her first on-the-record interview since the board resigned. “There’s no ego for me. I care about the vision and the mission.” It’s worth noting that some women CEOs say sexist double standards make it impossible for women to operate in founder mode; when they do, they risk retaliation from their staff and boards.

Wojcicki sees her extra voting rights as recognition of her dedication to the company’s success. She has said she was also grateful for what Avey brought to 23andMe in its early years, but she and others believed in 2009 that it was the right time for her cofounder to leave.

As a leader, she added, she has had to “dramatically” pivot through trying market dynamics. She has led through the biotech market collapse, the pandemic, and increased competition on the consumer side of her business. “I’m sure we’ll spend a lot of time reflecting about what we could have done in a different way,” she said.

“I think we can navigate and land this plane,” she said of 23andMe, “but it is absolutely complicated.”

Still, another former leader at the company said they were not surprised when the board resigned, adding that Wojcicki could be outwardly charming, but stubborn and controlling behind the scenes. Wojcicki’s leadership shortcomings and her maneuvering to maintain power were made plain once the company went public, former senior employees said. That’s when filings showed that Wojcicki also had a controlling vote on the startup’s board before it went public.

But while control—enabled by a dual-class share structure—was what Wojcicki craved, it may have led to the company’s undoing. Boards exist to check a CEO’s power and to protect companies when the business is in trouble. In the case of 23andMe, former employees say, the signs were there.

If there’s a single theme that runs throughout Wojcicki’s stories about her enchanted early life in Silicon Valley, it’s self-reliance.

The daughter of a particle physicist who taught at Stanford University, Wojcicki grew up on the school’s campus with her two older sisters, Susan Wojcicki, the late former CEO of YouTube, and Janet Wojcicki, a professor of pediatrics at the University of California, San Francisco. Their mother, a journalist and educator, has written a book about how she intentionally gave her daughters room to roam (and roller-skate.) Together the girls would steal their neighbors’ lemons to make and sell lemonade when they needed cash. When the youngest Wojcicki yearned for a ski trip in high school and didn’t have the money, she started a ski trip business, she once explained in an interview for Yale, her alma mater.

It was a mindset that also defined the up-and-coming tech stars of the Bay Area, including her future husband Sergey Brin, whom Wojcicki met when he and Larry Page famously began renting her sister Susan’s Palo Alto garage, in 1998, to build what became Google.

In 2006, a year before she married Brin, Wojcicki essentially crashed Linda Avey’s first meeting with the Google founders, where Avey was pitching her company. Wojcicki and Avey had met by this time, Avey told the podcast She Leads, so while Avey’s staff were taken aback by the surprise guest, Avey found it exciting when Wojcicki, whom Avey describes as “very charming and a lot of fun,” came “bebopping into the room and sat down.” (Avey, who now runs a venture capital fund, declined to comment on the record.)

A year later, 23andMe released its first made-for-consumers genetic test. In exchange for a wad of spit and $1,000, the company gave users reports on their ancestral makeup and data about a few health risks. (Google indeed became one of the company’s first backers. Brin and Wojcicki divorced in 2015.)

The 23andMe test captured the public’s imagination, even one day winning a spot on Oprah Winfrey's list of favorite things. For some users, the test returned potentially usable, even life-changing information; for most people, however, the results were more like infotainment, for instance revealing whether you have the gene that makes cilantro taste like soap.

Despite the buzz, 23andMe for years failed to make a profit, par for the course among early-stage Silicon Valley startups. Wojcicki said she was more focused on building a movement that put genomic information into people’s hands and gave them control of their own health. But 23andMe’s core business featured a fundamental flaw: Once people had their genomic data, they didn’t need to perform the test—or pay 23andMe—again.

Another problem popped up in 2013, one that could have closed 23andMe for good. The Food and Drug Administration decided that 23andMe’s test and health reports about a person’s predisposition to various diseases circumvented the regulator. The company took its health report off the market for two years, while Wojcicki sought advisors and regulatory experts who knew how to work with the FDA. Two years later, the company won FDA approval to offer its health reports again.

Later, she told the Fortune Most Powerful Women conference that when she got the FDA’s warning letter, she buckled down and spent 10 days in her pajamas on the phone with lawyers. The company’s success so far, said the former executive who talked to Fortune, “is all down to Anne and her determination.”

Wojcicki’s determination soon turned to a second major 23andMe business: drug discovery, which would leverage its massive database of genomic information. For years, the company had been analyzing the data it had received from customers, which included results from lifestyle surveys and other information that would help scientists investigate the origins of disease.

Despite having zero experience in drug development, Wojcicki wanted to partner with major pharma companies to sell access to 23andMe’s database and have 23andMe itself begin developing drugs, a process that requires hundreds of millions of dollars and can take years, with few guarantees of success. When he first joined to lead the newly created therapeutics arm in 2015, Richard Scheller, a prominent figure in genetic medicine whose research has led to several drug discoveries, reportedly asked Wojcicki, “Do you understand what you’re getting into?” Wojcicki recalled in a podcast interview that she reassured Scheller: “Yes, I spent a decade investing in biotech. I’m well aware of the failures.” But she saw an “irresistible opportunity.”

In 2018, GlaxoSmithKline bought into Wojcicki’s bold ambition, taking a stake in the younger company in a deal worth $300 million that gave it access to 23andMe’s database. That four-year partnership allowed GSK to find drug targets on an accelerated schedule, which encouraged the company to renew for an additional year—then sign a second one-year agreement. (That contract expires this month.) “Our discovery collaboration with 23andMe was a strong and productive partnership over a number of years, generating multiple programs,” GSK said in a statement to Fortune.

Meanwhile, 23andMe’s progress with drug discovery was promising—it shared positive outcomes from early-stage clinical trials of two potential cancer treatments. But the company had to shut down its expensive therapeutics program in August, a predictable outcome, the former executive said, as it ran out of cash.

The company’s foray into drug development was ill-advised, said the first former executive, and Wojcicki was intent on making it happen despite the costs. “Going down the drug development path there, that was her decision,” this person said. And that decision brought the company to its knees.

In the meantime, the company also failed to enrich its direct-to-consumer offerings by adding other tests, such as blood tests. Like Google, 23andMe had used consumer data to build a secondary business; unlike Google, it allowed its consumer-facing products to wither and lose relevance. “The company could have been the Google of digital health and it completely whiffed on that,” the ex-leader said.

Despite the company’s dismal performance, Wojcicki maintained a public persona as one of Silicon Valley’s most effective leaders. She was a compelling storyteller, casting herself as the rare entrepreneur with the power to disrupt the giants of the pharmaceutical industry, one former senior employee said. She had Barbie dolls made in her likeness, appeared on red carpets, and forged connections to Silicon Valley’s VIPs and even ex-presidents.

In one sense, Wojcicki agrees with her critics. “At the time, in 2015, and 2018, when we went even bigger into therapeutics, it was absolutely the right thing to do,” she said, citing low interest rates, and the company’s valuable database and “spectacular” team. “In 2024, it's absolutely the wrong thing to do,” she argued. "Everyone is pulling back from investing in novel programs and from starting portfolio biotech companies.”

“Part of the challenge I find as a leader is that you'll make a decision, and based on the information you had at that time, that seemed like the right decision, and a couple of years later, it becomes clear that it's wrong,” she added.

It wasn’t long after the company debuted on the public markets via a Richard Branson–backed special purpose acquisition target (SPAC), in 2021, that it became obvious that it would need to raise more funds, as a second former executive who spoke to Fortune explained, but that that would be hard to do given that the company had yet to turn a profit. It was also still evolving. As recently as 2022, Wojcicki told MBA students at Stanford’s Graduate School of Business that 23andMe was still finding its product-market fit, meaning that its tests had not yet become tools people could bring to their doctors to discuss health concerns. (Buying telehealth startup Lemonaid Health for $400 million, in 2021, was a step toward that goal.)

At the same time, Wojcicki was increasingly navigating a different set of challenges—with her own board. Difficulties are supposed to spur innovation, she said on a Sequoia Capital podcast at the end of 2023. “When it’s just up and to the right, anyone can sail that kind of ship, but when it’s a crucible moment, when it’s hard, you do need to galvanize people to get that right kind of creativity.”

As a leader, she said, it was her job to constantly inspire. And in this she succeeded, said the second executive. “Anne is a most wonderful, generous person. She is great fun,” they said, and she cares deeply about her employees. She could also be democratic and open to debate—to a point. She wasn’t one to ask her deputies for advice or to empower them, the ex-executive recalls. Instead, she occasionally sought outside input on company decisions from her many connections across Silicon Valley and in health care because she believed in the wisdom of the crowd. “I believe if you're a leader, you leverage other people,” this executive said. But those people need to be inside the company. “That's why you have a team.”

Wojcicki’s insistence that all decisions run through her—and sometimes her extended network—created what the executive called a “latency” in 23andMe’s operations. The executive and their peers relayed these issues to board members, the executive says.

Meanwhile, it was becoming more and more clear that the math just wasn’t adding up. A story in the Wall Street Journal, published in January, warned that the company could run out of cash by 2025. The company has recently conducted several rounds of layoffs and lost several high-ranking employees, including Joe Arron, the chief scientific officer, and Kathy Hibbs, the former chief administrative officer who, as chief legal officer, had helped the company win FDA approval. Steve Schoch, CFO for four years, left in 2022.

Wojcicki strongly disagrees with claims that she did not delegate or that she handicapped senior leaders by hanging on to power while she crowdsourced major questions. She gave Scheller full control over the company’s therapeutics business, she insisted, and when she needed to figure out how to win approval from the FDA, she gave that project to Hibbs and let her do her thing. Scheller and Hibbs did not respond to Fortune’s requests for comment.

Wojcicki sees herself as a leader who enjoys debate, and loves to push her people to think big, but says that not all of her team leaders took kindly to being challenged. “Those people usually are an issue,” she said.

She also denied that she routinely turns to outsiders to settle big company decisions, but explained that she relishes learning from other people. “I always said one of my superpowers as a child was being able to listen to as many people as I can, but then ignore most of them,” she said. As CEO, she explained, “I love hearing from different people, how they lead, how they make decisions, what they think of different strategies, and then we decide what's best for us.”

Joyce Tung, head of research and a 23andMe employee of 17 years, told Fortune that Wojcicki gives her full autonomy to run her department and make crucial calls about technology investments or research partnerships, and that she admires Wojcicki’s analytical approach and deep knowledge of genomics. However, she also recalled an incident when Wojcicki overturned a product naming decision made by a senior leader after a more junior employee had raised concerns. That senior leader caught in the middle believed the issue had been settled. "If you're the person whose decision got overturned, you might be like, 'Well, that's annoying,’” Tung said, adding that there were several examples of such incidents. But if you’re the junior employee, that’s “hugely empowering.”

“There’s no perfect way of doing things, right?” she said.

Over the past year, Wojcicki had also been dealing with grief and hardships in her personal life—her sister Susan’s illness and death in early August, and the death of Susan’s 19-year-old son last winter. Those events helped her focus, she told Fortune. “[Grief] allows you to sort of cut out the noise and respond to the things that are most important,” she said. At 23andMe, Wojcicki set up a lung cancer genetic study with 20 lung cancer advocacy groups, a development she announced in July.

Those that know her say those losses, combined with the turmoil at 23andMe, must be gut-wrenching. The former board members had once counted themselves among Wojcicki’s close friends, a third executive said, and they were not the kind of people who would have wanted to surprise or embarrass Wojcicki. Many of the board members had put years of their time and energy into Wojcicki’s success. Wojcicki declined to comment about the board beyond saying only that she was “genuinely surprised” by the group’s actions.

The board’s resignation letter was signed by all seven independent directors, including Sequoia’s Botha, as well as Patrick Chung, head of Xfund, who was among 23andMe’s earliest investors; Scheller, the former head of therapeutics who left in 2019; Sandra Hernández, CEO of the California Health Care Foundation; Valerie Montgomery Rice, president and dean of Morehouse School of Medicine; Peter Taylor, former president of the ECMC Foundation; and Neal Mohan, CEO of YouTube, who had tweeted a tribute to his former boss Susan Wojcicki, Anne’s sister, just weeks before the board collectively quit. Mohan met Susan 17 years ago, he wrote on X, adding, “I am forever grateful for her friendship and guidance. I will miss her tremendously. My heart goes out to her family and loved ones.”

“It's a really diverse, thoughtful board, and they chose to resign,” the second executive told Fortune. “You ended up with the immovable object and the unstoppable force.”

Perhaps the staggering governance implosion at 23andMe will prove to be a turning point in investors' tolerance for dual-class shares, says Friso van der Oord, SVP of content at the National Association of Corporate Directors. “It may be a fork in the road, where investors may say, ‘Gee, we don't want to have another 23andMe on our hands,’” he says.

As for Wojcicki, 23andMe has garnered takeover interest from a small New York–based DNA testing startup called Nucleus, but Wojcicki has maintained she is not open to outside offers. If she does manage to retain control, she would join a handful of large company founders who have wrestled back control of their company from public markets, as Michael Dell did in 2013, or as others have from private equity groups. However, says Charles Elson, founding director of John L. Weinberg Center for Corporate Governance at the University of Delaware, the company is almost certain to attract shareholder lawsuits. Even forming a board could prove challenging. Wojcicki can appoint members to finish out the current board term and face an election at the next general meeting, or shareholders could call a special meeting at any time to elect directors, per the company’s charter. “It will be a rather long and tough road for her,” says Elson, “even with the dual-class structure.”

With 23andMe’s future unclear, it continues to announce new products, like the release of a new report that can tell customers whether they’re prone to emotional eating. (If they are, 23andMe has a fix; it has begun selling GLP-1 weight-loss drugs.) It also recently announced that Matthew Knowles, Beyoncé’s father, would become the brand’s ambassador.

But on the board of directors page on 23andMe’s website, there’s now just one photo: Wojcicki, alone.

Correction: This story has been updated to reflect that Steve Schoch left the company in 2022. Also, a previous version stated the board of directors could not fire Wojcicki, which was incorrect.