Then, it was like “oh, I guess insurers are paying for it? Well, I don’t get it, but respect to them for getting through that tough a sales process.”
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And then it turns out they only got those sales by committing insurance fraud!https://www.google.com/amp/s/www.cnbc.com/amp/2019/05/02/ubiome-what-really-happened-at-health-start-up-raided-by-fbi.html …
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The point is not just that they crossed an ethical and legal line. The point is that, I think, there was no way that technology, at this time, could produce a unicorn-sized startup by honest means.
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Specifically, personalized medicine tests only make sense if individual differences in test results actually imply different treatment strategies, such that you’ll be healthier if you get the “right treatment for you” than if you didn’t take the test and got standard treatment.
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Without actual evidence that the test matters for patient health, it’s a basic research project and a toy for biohackers — both of which are fantastic but neither of which make sense as VC-funded startups. They should be small businesses or nonprofits!
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As I heard from genetic counselors at Color, a genetic testing company that *does* do tests with practical benefit to patients, most of their customers don’t know what DNA is! If you want to sell to millions of people, you have to offer value to laymen who aren’t into science.
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The point is, if I were Jessica Richman, I would never have gotten past the idea stage with this. I’d have been like “how is this a business?” I wouldn’t have been able to pitch it with a straight face. The only way this business model could work is if she lied to customers.
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I’m not saying we should all pile on her in particular; I’m sure it’s not fun to be her right now and I’m sure there are lots of other founders that have done worse and not gotten caught. (One of the perils of being female in the public eye: your scandals are extra scandalous.)
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In general: there’s more to business success than just revenue & user numbers. You can boost those artificially by shady tactics, in the short run. If the apparent growth is totally out of whack with what you know of the userbase and their needs, something is fishy.
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“Ah yes, health insurers, well known for their willingness to pay for experimental and elective treatments” — wait, no, scratch that, reverse it!
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Love the Willy Wonka reference
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