How 23andMe went from a $6 billion valuation to trading for pennies
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I'm Yasmin Gagne. I'm Josh Christensen. And this is Most Innovative Companies. On today's episode, Fast Company senior writer Ainsley Harris on CEO and co-founder Ann Wajicki's plan to take 23andMe private. You take your test and then you have your results. You don't need to pay them more than once. Edward Norton from Fight Club on his startup ZEC.

And as always, keeping tabs. Staging the dead bear cub in Central Park on top of a bike...

And leaving. But first, we actually have a show announcement. In two weeks, we're going to change our schedule a bit. So this show will be coming out on Thursdays instead of Wednesdays at the same time around 6 p.m. You got to wait one more day to hear our brilliant news analysis. But it'll be worth it. We promise. Change your calendar alerts. Change all your schedule around to make sure you can listen to us on Thursday nights. That's going to be August 22nd will be our first Thursday show.

So don't complain when you don't get it on the 21st. Don't slide into my DMs about this. Where's show, Yaz? Okay, here's the download.

The news you need to know this week in the world of business and innovation. Kamala Harris has finally announced who she's picking for her running mate. And it's Minnesota Governor Tim Walz, the dark horse, comes through. Also, I said finally. It's been 16 days since she became... But it feels like a really long time. It does become, and it really became this, like...

moment like the pic felt very like all eyes on in a way that I don't think I felt before but uh I gotta ask you how you feel about another bald guy half Indian pairing yes they can't take our our thing this is what we've got going for us half Indian and bald I know I know we literally have nothing else

Well, Walls has really become the online pick. He really went from obscurity to a cult figure overnight. And what we know about Walls is that he's a veteran. He's a former teacher and high school football coach. He also...

was the teacher advisor for a gay straight alliance in the 90s in Minnesota, in rural Minnesota, which is super cool. And he's enacted a lot of progressive policies as a two-term governor in Minnesota. But what really made him catch fire was coining the attack against Trump and Vance that they're just weird. That is weird behavior. And I...

I don't think you call it anything else. It is simply what we're observing. No, no. I think it's a great attack. And it's really just caught on in a pretty incredible way.

That's wild. So good.

The lawsuit also claims that OpenAI broke federal racketeering laws in a conspiracy to defraud Musk. I love when lawsuits just casually admit like faults and flaws in the person. It's like when Fox News had the defamation suits and they're like, yeah, but this isn't news. Yeah. It feels like this. That's so true.

YouTuber MrBeast is under fire for working conditions in his reality show Beast Games, which offers a grand prize of $5 million. That's a lot of money for a reality show. Who joins a MrBeast reality show and is like, I expect to have good working conditions? You know what I mean? I don't know. I think they have something to say because according to complaints, contestants lacked regular access to food, water, and medication during early production. Okay.

at Allegiant Stadium in Las Vegas. That is pretty bad. It's not like they didn't have hot options at Crafty. They just didn't have access to this stuff. Jimmy. Jimmy D. Mr. Beast, who of course his real name is Jimmy Donaldson, blamed the

the CrowdStrike incident and extreme weather in a message to the New York Times, which is wild. Babies R Us is back. After Toys R Us shuttered their stores and filed for bankruptcy in 2017, the company was purchased by WHP Global. It's a private equity firm, obviously. Now their subsidiary, Babies R Us, has a partnership with Kohl's and began opening shops within Kohl's stores. The plan is to have $200

babies R.S. inside Kohl's by the end of September. I actually think Toys R.S. opened a bunch of pop-ups within Macy's a while ago. Welcome back to the world, the R.S. Mafia.

And finally, a big blow to Google this week in a huge antitrust case. A judge ruled that the company was illegally using its dominance as a search engine to cut out competitors, slowing innovation and growth. Google is expected to appeal that ruling. So the legal battle will continue on. Justice for Bing. Justice for Ask Jeeves. Ask Jeeves was amazing back in the day. I mean, their marketing was was top notch.

This antitrust case opens up the possibility of a breakup of Alphabet, Google's parent company, of course. And that would completely up an online advertising and the Internet as we know it. I'm skeptical it'll happen, though. There's no chance, I'm here to say. It's too big to fail. And that's the news you need to know today. ♪

So, Josh, what is your favorite Edward Norton performance? This is going to get me some hate mail. I thought his Hulk was better than Mark Ruffalo. What are you talking about? That's such a bad take. I thought the original Hulk movie in 2008 was pretty good. I don't know. Is that bad? I remember going to see that in cinemas. I saw it in cinemas, too. I was 18, so you can't necessarily account for my taste, but, like...

I kind of genuinely enjoyed it, and I thought he was a better Hulk than Mark Ruffalo. I'm just not a fan of Mark Ruffalo. What? Okay, well, that's a bad take. But wasn't it weirdly serious?

Yeah. Yeah, it was pretty serious. It was a weirdly intense, serious movie. I think that's how I was into it. This guy turns into like a huge green man. Like, let's take a step back, get some perspective. I did. No, it's pretty good. I will say The Illusionist is quite an excellent movie. I did like that as well. Is he in The Illusionist?

He's in The Illusionist. It really didn't have the same cultural effect as The Prestige did, but they came out around the same time. Do you have a favorite Edward Norton movie? Are you a big Edward Norton stan? I liked Fight Club when I was a teenager.

I mean, yeah, everyone had their moment of fight. I mean, he's an exceptional actor. He's really good. He's really good. Yeah, yeah, yeah. He's really funny, too. I think he's sort of... I was happy to see him in Glass Onion being not so serious. I loved Glass Onion. I like that world. I thought Glass Onion was one of the better satires of billionaires. You know what I mean? Where it's just like...

This guy's just kind of dumb and a billionaire. And I thought that was like they did it in a fun, like non pretty way. That was interesting. Yeah. Yeah. So the reason we're talking about Edward Norton is because he's actually a guest on today's show, but he's not here to talk about his best performances. He's here to talk about his new startup, Zach.

But first, we're actually going to talk a little bit about 23andMe. Recently, there was some news that the co-founder and CEO of the company, Ann Wojcicki, wants to take the company private. In 2021, the DNA testing startup was valued at $6 billion. Now it's trading for less than a dollar. It's basically a penny stock.

So we're trying to figure out what happened. Here to explain the situation is Fast Company senior writer Ainsley Harris. I started by asking her what 23andMe was founded to do. 23andMe was founded to provide direct-to-consumer genetic testing. The idea was that insights from those tests would really inform how we think about disease.

and also ultimately transform the entire healthcare system. It's a very grand vision. Consumers have been ordering the tests for years now. They started out costing close to $1,000. Now the price has dropped to under $100. And so millions of people have taken these tests, but 23andMe is struggling nevertheless. Josh, have you taken one?

I have not taken one. I mean, that's really me having a lack of contribution to the true crime industry and podcasting. But no, yeah, it's just never interested. I just know it's going to come back and it's just like you're at risk for heart disease and you're white. It's basically like I know what's coming. That was always so funny to me about those tests. They'll be like, by the way, you probably don't like eating cilantro. And it's like, yeah, I know. Like,

It's going to tell me that I had cancer and I was like, yeah, I've been there. Thank you so much. So can you give us a little bit of background on the co-founder and CEO, Ann Wojcicki? Because she's kind of an interesting person.

She is. Anne is part of a family of sisters that have been really influential and really powerful in Silicon Valley. Her sister, Susan, was the CEO of YouTube for many years. Oh, I did not put that together at all. Yes. What a common last name, Wojcicki, too. Yeah.

The whole family is, you know, a lot of successful women. And Anne herself was formerly married to Sergey Brin, who was obviously one of the co-founders of Google. And so, you know, when she started this company, you know, she didn't necessarily have like a deep background in healthcare, but she certainly had the kind of Rolodex that helps you get a Silicon Valley startup off the ground.

First of all, I always think about her wedding to Sergey Brin where they like swam to an island and then got married because I actually thought that was kind of sick. But I think it's through 23andMe or around the time 23andMe was founded, Brin found out he had a predisposition to Parkinson's disease, right? There's kind of a link between him and the business that's personal. Yes. And in fact, he discovered that through 23andMe's test.

So he discovered that predisposition and that in some ways is this validation of what the company was all about, that it would put information like that in regular people's hands and then you can take action based on that information. If you know you're at risk for something later in life, you

You can make lifestyle changes now. And, you know, I think he, for example, changed his diet and increased the amount of exercise he was getting and focused more on sleep. Left his wife. Yes, that too. Pursued a midlife crisis. But it also is sort of this preview of the company's challenges in that

you know, it's not a diagnostic tool, right? He has a predisposition. He's been able to make these changes. But ultimately, the changes he was able to make are the kind of like just sort of lifestyle health improvements that probably all of us should be making anyway, right? You can reduce your risk for basically any disease you're going to get later in life by eating healthy and sleeping. Yeah. So, you know, I think this is sort of the part of the core issue with what the company has been offering people is that

The tests are not necessarily medically useful. So let's get into that a little bit. The company was valued at its peak in 2021 at $6 billion, which is crazy.

Now its stock has fallen more than 95%, and it's basically a penny stock. It's trading below a dollar a share. What happened? Like, why are the tests not that useful? A lot of different reasons sort of are kind of in play here. One is that the actual demand for the test is not as strong as it once was. You know, it's the type of product you use once, right? You take your test, and then you have your results. And indeed, like on the back end, they can continue updating what...

your results look like just sort of based on that one sample by, you know, improving their panels and running new panels. So you don't need to pay them more than once. And they've sort of run out of market a little bit.

I know. So my sister and parents took it. I didn't. I had kind of a tinfoil hat on. I was like, they're going to use my data. Well, they are. I mean, yeah, but like anybody gives a shit about like Yasmin Gagne's data anyway. It's true. But you are a serial killer and you did not didn't want to be caught. Yeah, I didn't. I'm the Zodiac killer. I thought maybe it would be bad.

But I remember being like, well, now that I've seen my parents and sisters, like, I really don't need to do this. You know what I mean? Yeah. No, I mean, I think there's certainly that as well. You know, I think people do encourage sometimes the opposite is true. You know, if you discover you are at risk, let's say for breast cancer, a lot of people who make that discovery are

through a test like 23andMe's might encourage then all of their relatives to get tested so that they can understand their risk. And then once you're armed with a result like that, you have the beginnings of a conversation with your doctor about, you know, should I be getting increased

Should I be starting to screen for certain things earlier in life? That information becomes sort of a tool, but that tool also has limits. Yeah, so it sounds like the lower prices have not really sparked greater demand. Yeah, they've run out of market, but also it's a much more competitive market, right? Lots of people offer genetic tests. It's cheap now. So that's one piece of it. Another piece of it is that

because the tests are so cheap. If you think about it, DNA information is not exactly in short supply, right? It's like there are billions of people on earth, right? You know, in theory, DNA is actually a really available resource. And so as the cost of the tests has dropped,

there are more and more publicly available research databases and other places where you can go. Like if you're interested in mining genetic information and that data, you don't really need 23andMe anymore. You can go to some of these publicly available databases or you can buy the data that you need that might be more current or more specific in terms of your needs. And so the other side of their business was this

where they were using their data to both partner with pharmaceutical companies and also develop maybe their own sort of therapies. And that side of the business is just also growing

really competitive right now because everyone has access to DNA information. Everyone has access to this data because it's plentiful and now it's cheap. And so that competitive advantage has also eroded. And before we talk a little bit about the sort of line of business with pharmaceuticals, which has its own problems, there was also a hack, right, that made a lot of people suspicious.

There was a hack that affected 23andMe customers. I think this was last year and people's relative connections, I think were revealed, if not their underlying genetic information. You know, I think there's been, you know, obviously been concerns about your genetic information, um,

Once someone has that, like it doesn't change, right? You can change your bank password. You know, you can, there are a lot of things where if there's a hack, it is to some extent fixable, but this information does not change. So even if the information compromised in that hack was not necessarily people's genetic information directly, it really, I think, reminded people of the risks here and the importance of being really careful about who has access to that information.

So, you know, we talked a little bit about the company sort of wanting to work with pharmaceutical companies. Now they're kind of pursuing like a pretty generic telemedicine play, right? Yeah. So two years ago, 2021, they acquired a telemedicine startup called Lemonade Health and they spent $400 million on it. And Lemonade is, you know, one of these sort of online companies

pharmacies, essentially, where, you know, if you want to get the types of pills that are easy to prescribe, you can give them a call or a message. Dick pills, hair loss pills, like all of that stuff, right? Finally, some telemedicine directed towards men. That's finally what we need.

birth control too. But yeah, so they spend $400 million on this company and they have more recently been trying to make it a more cohesive part of what they offer. So they've tried to make it a way to offer sort of genetic counseling and they've offered this sort of premium and more sort of exclusive type services that are cost more money where they're offering you

personalized health tips and using not just your genetic information, but doing like blood tests. And it's this very sort of like high end health package for people who really want to optimize their health. And they're sort of using the telemedicine infrastructure that Lemonade offered in order to kind of build that up. It's, I think, unclear how big of a business that could be. And it certainly has not taken off in a big enough way to revive the stock price.

Again, they are not part of really the health care system because their shtick has always been that, you know, we stand alone. You know, we're direct to consumer. You know, we're not going to integrate with hospitals. We're not going to make an offering for doctors. And so in some ways, this is a little bit of a departure for them to be offering something that looks more like medical advice.

with maybe like nurse practitioners on the other end of the line available to you. You know, it feels like it's like a real revisiting of their whole purpose that they've kind of gone in this direction. But at the same time, they haven't ever built a business that really takes advantage of the scale that partnering with the healthcare system itself can offer you. Yeah, it would be an interesting play for them to get acquired or be acquired by like an aura or a whoop, but they've like...

raise so much money that they're sort of in a weird place for that kind of thing. Well, I think it's so interesting that you mentioned those companies because that's 23andMe. It feels like they are trying to appeal to people who want to optimize in the same way that someone who is buying a ring like that wants to sort of optimize their sleep and their health and be, you know, really taking care of themselves. But

But you don't really, like genetics is not necessarily the best information that you need to do that, right? Or you don't necessarily need someone's DNA. And so this has always been sort of this tension is you do get some health insights, you do get some risk scores, but

If you're trying to sort of really change someone's behavior and give them actionable information, your DNA does not change. And so maybe it is better to track someone's sleep and give them coaching on that. Like, it feels like they're sort of stuck in this place where they're not healthcare, but they're also not as adaptive as some of these other sort of behavioral interventions.

So in your piece, you mentioned the fine print for total health and it said 23 mean do not diagnose any health conditions or provide medical advice, which seems weird because the idea, the premise was to use data from DNA sequencing to improve health.

Indeed, yeah. You know, I want to talk a little bit about the sort of usefulness of DNA structuring because it seems like scientists have either changed their view or that view's always been the case and 23andMe has been ignoring it, which is that DNA is not really a straightforward instruction manual.

So, you know, the Human Genome Project, now, you know, decades old project, I think the hypothesis that many researchers had going into that was that, yeah, DNA was going to be this sort of one-to-one instructional manual. Like, here's the gene for this, and here's the gene for that. And we've known for a long time now, even really before 23andMe got off the ground, that that's sort of not how DNA works. There are, of course, like, you know, certain places you can look where there is

a variant that's highly associated with Parkinson's or with breast cancer. But ultimately, you're talking about risk scores, and it's not this straightforward instructional manual. Also, obviously, gene expression varies based on your behavior and your environmental factors.

It's so complex. And we're really only beginning to understand those complexities. And the problem, if you're a DTC company, is that those complexities are awfully hard to explain to regular people, right? Ultimately, what you get from 23andMe is this sort of set of information that, you know, 20% probability of this, 30% probability of this, 40% probability of this.

And as a consumer, it's sort of like, what do you do with that information? The rest of it is just to your point around sort of the cilantro test, like a little bit like the cocktail party fodder, where it's interesting, but not medically useful. And then the stuff that's potentially medically useful is really hard for you to make sense of or take action based on, you know, in the hands of a

let's say a physician who has been trained in genetics and who also is specializing in a certain disease, they might be able to say like, I see from this risk score that we should run these additional tests or

or maybe we should intervene in your disease in this way. But you as the consumer don't really have that toolkit or that knowledge. I have a hard time figuring out what percent precipitation means in the weather report, let alone risk scores that come out. And didn't 23andMe get in trouble for basically advertising like no more about your health? Yes. So they have gotten in trouble in the past. Specifically, it was a TV ad that sort of pushed things over the edge.

I might have an increased risk of heart disease, arthritis, gallstones, hemochromatosis. That resulted in them, you know, having to take their tests off the market for a while. They're back on the market and, you know, they now work really closely with regulators, I would say, in order to make sure they're doing things by the book. Definitionally, as a DTC company, they have a really high bar that they have to clear in terms of educating people about what this means.

And I think the problem with the business is even if you clear that bar and you are doing a good job of educating people about these risk scores, it's not that valuable to people to have the information, which is why they're not paying for it. Right. And that's sort of the fundamental problem.

Mm-hmm. We talked a little bit about their sort of total health package. That's their premium offering. I basically want to get your take on whether this could ever be a $6 billion business. Like, what are earnings looking like? What is Wajiski telling investors? Yeah.

It's a very good question. It's very hard to see how it becomes a $6 billion business without a serious transformation of some kind. So there are two main sides of the business. There's the consumer tests, which, you know, we've been there from the start. And then there's this other side of the business where they are using their data in different ways. Some of that is developing their own therapeutics. And some of that is essentially like selling the data or licensing it to pharma companies. And

And they do have, you know, like a clinical trial in the works that could turn into something meaningful. I think the challenge is that the consumer side is really stuck. And it's hard to see sort of how you transform that because...

It is such a competitive space with, you know, if you go in the telemedicine direction, any direction you go in, it's very competitive. And then on the sort of data side, again, it's increasingly competitive. And also pharma is like a blockbuster type business or has been in the past where, you know, if you don't get that blockbuster, you're not really going to see the ROI that you need. Interestingly, like I do think that is actually sort of changing a little bit.

with the rise of genetics-based personalized medicine, which is sort of interesting. But in a way that sort of creates further challenges for 23andMe is like, I think it's actually highly unlikely that we're going to see quite as many blockbuster drugs as we used to. Like, you know, as more and more medicine becomes personalized right now, the costs of those treatments are really high. You know, if they figured things out,

and they built the right platform, they're really well positioned because personalized medicine is the future. So they're really going to have to make some tough choices if they want to survive. How are 23andMe's competitors faring? Because there's a fair amount at this point.

Yeah, there are. And a lot of them that have found a way forward have found ways to partner with the healthcare system in some shape or form. Like Color, for example, started out with a model very similar to 23andMe and realized that if they partnered with, let's say, a union, for example, that wants to reduce cancer risk across its entire population in order to save money but also improve patient outcomes,

They've found a way to sort of like work with partners like that and customers like that in order to combine genetic testing with recommendations for increased screening. And you can provide this sort of comprehensive solution when you're willing to sort of bring together patients and physicians and be some of that connective glue. A couple of others are like Ancestry and Invitae. Yes, yes.

doing quite poorly. Is that fair to say? Well, Invitae is straight up bankrupt. Yes. Or declared bankruptcy. You know, we're seeing a huge amount of turmoil in the space overall. It would be wrong to be like, they made all these missteps and it's all their fault. I think these overriding market forces, like the dramatic reduction in the cost of genetic testing, have just wildly transformed what this market looks like and which business models are viable.

Now, there were reports earlier this week that Ann Wojcicki wants to take the company private. Just tell me a little bit about that. What does the sort of future look like for 23andMe in that regard?

and filed earlier in the year that, you know, she's interested in pursuing a path where she would take the company private again. And then this past week, we saw an update where she submitted a proposal. I think she wanted to buy the remaining outstanding shares. She is the largest shareholder in the company. Currently, she was going to buy the remaining outstanding shares for something like 40 cents a share. And the board or the committee on the board that was set up to sort of review these next steps said,

just flatly refused. She, I don't think, had funding secured. Yeah, she was looking for 40 cents a share. Yes, yes. And they said, no way, pretty low. They've said, we're not very happy with this offer, but we understand that, you know, you might need a little bit more time, see what you can do essentially.

So, you know, it's possible that she is going to make it happen. But what the board also said in its letter is if you can't figure this out basically in the next week or so, we're going to start to talk to other potential buyers because the clock is ticking. Who do you think would buy it? That's a very good question. Obviously, it's a complicated question.

There is a lot of scrutiny on acquisitions in tech right now, maybe a little bit less so in pharma. It's unclear what a buyer would look like and the DTC piece and the pharma piece in all likelihood would end up separate, would be my prediction.

It's hard to imagine a buyer who's going to want both of those businesses, but maybe they exist. That makes a lot of sense. Well, thank you, Ainsley, for taking us through all that. We'll be back with Ainsley for Keeping Tabs. But first, a quick break followed by my colleague David Salazar's interview with Edward Norton about improving boardroom communication with the startup SEC.

Edward Norton has been part of the movie business since the 1990s. You may know him from American History X, The Illusionist, or more recently, Knives Out, Glass Onion.

But what you may not know is that he is also really, really, really extremely passionate about board meetings. After years of serving on boards as well as starting companies and working with boards from the management side, Edward co-founded ZEC. It's a cloud-based software platform aimed at changing boardroom communication for the better. For this interview, he talked to my colleague, Fast Company staff writer David Salazar. David started the conversation by asking him what he's learned from past experiences.

since my early 20s, I've certainly been on, I would say close to two dozen corporate or nonprofit boards. I'm actively on over half a dozen right now. And even though on a day-to-day basis, board service isn't that big a demand, when you add all that up and you think about the fact that a lot of organizations have four to eight board meetings a year, sometimes more, and you tally all that up, you actually really spend a substantive amount of time

engaged in that dynamic. And when those dynamics are in any way negative or frustrating or inefficient, I think any reasonable person can relate to the feeling, the growing feeling of like, what am I doing here? Like, why am I willing to invest this much time? I have other things to be doing. So I think a lot of people involved in organizations, and let's remember that

apart from all of the companies in the American landscape and the international corporate landscape, you know, America alone has over 2 million nonprofit organizations in this country. So you talk about boards and you talk about corporate boards, and sometimes I think people, they think of it as sort of a rarefied world, but I disagree. I think actually a lot of people, very smart people, spend quite a lot of time inside that dynamic and that relationship and

There's a human capital cost to board dynamics that aren't working the way maybe they should be. So I guess when you're talking about board dynamics, do you mean within the board, like intra-board dynamics? No, I mean, that can happen. But I think the primary relationship is between the management of an organization and its board. And in theory, it's supposed to be a relationship where...

everyone's working toward the same purpose or is there for the same purpose, which is notionally the advancement of the mission of the organization, right? And in theory, a board should exist to support the organization, although there are those who might argue that the governance function, they're there to provide checks and balances or something like that. I think that in my observation, too often what happens is...

it reverts or it devolves to this kind of monitoring function, right? If you're an investor and you sit on a board, you're there protecting your investment

And if you're a donor, like call it an institutional foundation or something that's donating to an organization or a family foundation, you're on the board, you're there. It might not be an investment, but it still is. It's a philanthropic investment and you're there sort of monitoring it. And then what happens is management sort of intrinsically or almost reflexively feels that they feel that monitoring function and then board meetings and board presentations and board meetings

relationships become ones, it's almost like a hall monitor. It's like management feels that they're reporting on that progress. I think inherent resentments grow. I think basically organizations go pencils down to prepare for these interactions. And it starts to feel like we felt in high school or college before an exam. And people who have better things to be doing with their time, even within the organization, stop and

expend a lot of effort to get ready for board meetings. And frankly, I know from personal experience, they consider it sort of the bane of their time. It's like the worst part of every quarter, right? And there needs to be reformation and reconsideration of that default relationship. And we felt the reason we started ZEC

was from experience, not sort of supposition and just to try to be tricky or neat or clever. We realized in our own experience that we were being driven crazy by how rudimentary and aggressive the basic presentation tools that were used in sort of the board function were. The PDF slide deck that still dominates like

You know, in 2024, the idea that in a cloud-based world with AI and iterative software tools that we're still using PDF slide decks, I get it sent to me like 36 hours before a meeting and I'm expected to read, you know, I'm pinch zooming it on my phone to try to read this slide deck in the airport lounge. And then I get in to a meeting that's half my day.

And what happens? I get it read back to me, you know, verbatim. And I'm like, why the hell did I just sit in a, making the effort to grind through this? And all that happens, I showed up to have this read to me. It's just atrocious. And

Equally so for the management that sends this thing out, puts all this work, and has no idea what anybody read. No idea, no preview as to what was the interaction, what commentary do people maybe have, could we get some of the drudgery of this taken care of before we all show up. We've been using 1990s tools 30 years beyond their technological relevancy. I'm sure that doesn't help with the

if not actively combative, than sort of like uneven feeling relationship between the board and management, right? Absolutely. And I've had professional venture capital partners, they sit on the boards of their portfolio companies and

They want to help them. Of course they want to help them because they're trying to get a return on their investment, right? But nobody likes to show up and hear other board members ask questions that clearly reveal that they didn't read the materials. I've had people say to me, man, the times I would love to just call out people who don't do their homework and waste everybody's time or who really would have liked to just ask a couple of questions, right?

within the platform, get them answered before the meeting so they don't have to waste everybody else's time or pre-vote like minutes approvals. I mean, it sounds ridiculous, but people with a lot to do with their time actually end up spending like 40 minutes per board meeting. We've found on real drudgery, like approvals of minutes and approvals of employee stock option pools that it's all very pro forma and reflexive and doesn't take a lot, but you've

You burn an hour of people's time. And when you add all that kind of stuff up, it builds resentment. They don't look forward to the meeting. They come in in a bad mood. And the amount of time that's actually committed to talking together about what can we be doing on a forward basis is

That's what people are inspired by, and that's notionally what they have in their skill sets to contribute. I was going to say, it sounds like you're solving for the sort of frustrations and, like you said, the resentment that can come out of these relationships by sort of addressing the ease of getting materials to people, handling things that, like you said, can be handled quickly. What are some of the things that you...

built ZEC to solve for that can change how boards operate? It takes way, way, way too long for organizations to get ready for board meetings. Much too much redundant effort. We're in the era of cloud computing. It needs to be almost like a syndicated, always-on platform that each one you've built makes it that much easier to build the next one. And with the implementation,

of this tool in it called ZEC AI, we would argue that we've crushed the preparatory time frame by like down to like 1 20th of what it was before. We've got it so that

as a tool, it is just massively more expedited as a process to get ready for the board meeting. And we would also argue that what we've done with Zeki.ai is because it uses the information, not only of the way you have set each one, the way you've written the narrative, et cetera, but because it feeds the data of how board members interacted with each iteration of their board decks and

We have built a kind of a machine learning capacity within ZEC such that each one you build is going to get better and better and better. And it's going to be more and more automated and optimized for your board and their dynamics. The first thing we tried to solve was just the time function, the wasted time function.

function on getting ready. And then there's the time function, the efficiency for the board members themselves and for management. Think about the fact that you send me a 90-page PDF before the meeting. You have no idea how much time I spent in it. And in ZEC, management can see at an extremely granular level what the engagement was with each and every section of it. So they know down to the individual identified board member exactly where they spent their time in it.

And as you learn more, you can design for those biases or for the, you kind of also have Intel going in, you know, who's done the work, you know, who's focused on what. But then of course, like if I'm reading it and I have a simple question, it's absurd. I can't just ask that question and get it answered prior to the meeting. You know, you ought to be able to have iterative refinement that saves people time. You know, that time in the room should be highly, it should be used for only the most nutritious and valuable things.

Right. There's no reason to ask for a clarification on the financials in a meeting where 15 people are sitting around. If you're asking that question, you're asking it of management or you're asking it of the AI that has helped build the deck? No, of management. OK. And then we've worked with Latham and Cooley and a lot of the best firms.

To build what we think is the best in class, it's the only one of these things that allows for a legally compliant governance function. In other words, you can actually execute pre-vote

authorizations for any actual board approvals, governance, things like that, so that you can set them up such that if people have read everything, queried everything they need to know, and they want to, you can get the voting on a lot of governance matters done prior to the meeting and simply affirm that that's happened. Oh, nice. Let's just pause for a moment and say we're in 2024, and whether in person or in Zoom,

The very idea that you have to circle the table and have people say, I, you know, I mean, it's like, are you kidding? It's like, that's ridiculous. It's just completely ridiculous. You raised seven and a half million dollars. And that was a series A led by Salesforce Ventures. Clearly, there was interest from investors. And I'd love to hear a little bit about what sort of clients you've worked with so far and what you're learning from working with them.

We've got hundreds and hundreds of companies and nonprofits both now using ZEC. I mean, I think very soon we'll be into the thousands. And they range from public companies. We have our first large public companies down to literal startups and then fairly small nonprofit orgs and increasingly some larger nonprofit orgs.

And we're learning constantly. I mean, I'll give you an example. Another company I'm involved with, which was an early adopter because of my involvement of Zach, the CEO liked it so much that he started using it to build his investor updates and as a financing round pitch deck. So he loved it.

being able to have penetration transparency through to the interactions with the materials he sent out. And he said, especially when it came to things like using it for a financing pitch deck,

he told me he actually had one managed capital firm call him back and say, yeah, thanks. We went through it all and it's not for us. And he could see that they hadn't spent any time in it. You know, he could see, he said it was a really easy rejection because I was like, they're full of shit. They didn't even read it. And you know what I mean? And so he loved that. He loved that. That wasn't the core function. We built it to manage board meetings and stuff. But as we began to look at the way

customers were using it, we quickly formalized that. So now in ZEC, you can have files, baskets of ZECs that are for any of those functions for board meetings or for

investor updates or for financing pitch decks. And there's some things like, for instance, we're adding a data room function to our pitch deck because we went through that as well. It's like, why would we send a ZEC-based financing pitch deck, but then you have to link to an outside rudimentary data room software platform? That's crazy, right? Why should a company pay

twice for those things. So those functions were literally within the first six months of having paying clients, we started to see these use cases and we quickly built into those. And I will say partly down to my partner, Robert, being one of the best customer service people I've ever worked with. We have a great relationship. We've built really great relationships with the organizations and companies using it. We get great feedback. We're able to incorporate it pretty fast.

Where are you hoping that goes as you sort of, you've been launched for slightly less than a year, right? I think you debuted last fall. You're about to add thousands of companies. What are you hoping the growth here is? I think our ambition is that people are going to look back and say, like, I am so happy we just don't build board decks anymore. No one defined their aspiration as someone who builds great decks.

Like, it just, it just, you know what I do? I build great decks that no one ever, like that was like, no one wanted that to be what they were known for. They do it because they have to. At the end of the day, we'd be really happy if we saw this become kind of a default thing.

new way of approaching something that we've all been doing in a painful way for decades now. Yeah, absolutely. And I think to your point, a lot of the esoteric stuff is still very ripe for innovation and disruption, right? Like a lot of the broad application stuff, people have already sort of disrupted and there's new ways of doing things, but it's the esoteric stuff that people are like clamoring for some sort of new way to do things.

I think language has weight and I come from storytelling and I'm a writer and, you know, we've used this phrase software as a service for a long time, right? Like we've defined an entire class of companies as SaaS. It has its own acronym and everything. But it is interesting to me that the last S in that is service, right? It's not plumbing. It's not software as plumbing, right?

It's software as a service. And if you're not able to connect through the kind of esoteric functions and UI and all that stuff that people use to talk about tech, if you aren't able to identify what the authentic service is that you're providing, that's positive, that's desired and appreciated because you're giving someone something that's in service of their job being easier and them having more

more time to devote to the components of the job that they actually had ambition to get into the job to do, then maybe you're being clever. The goal of this stuff isn't clever arbitrage of like finding some tricky way to convince someone that they need something.

It should have underneath it like an ethos that you believe you can help with this. And I think the best do. I mean, building a product like that today, you're standing on the shoulders of people who have made a whole shit ton of things a lot easier. I mean, we could have never built that as a product to the level that I think it's functioning at now.

if other people hadn't built really incredible developmental tools that make it so much easier to do that today than even a decade ago, let alone 20 years ago, you know? Yeah. And it sounds like you're sort of then trying to become one of those companies. And it's exciting. It's been really interesting to learn about what you've been doing with it. I really appreciate you taking the time. Absolutely. Thanks for the time. Thank you.

Okay, we're back with Ainsley and it's time to wrap up the show with Keeping Tabs. This is where we look through the mass of accumulated tabs open on our computers and pick a story, trend, or piece of pop culture to share. And Ainsley, since you're our guest, what are you keeping tabs on?

I am keeping tabs on the fact that I feel like the glam at this year's Olympics has been kind of out of control. And in some ways, like really impressive and awesome to see people looking great. But also, it's like a little funny to experience the Olympics, especially since we get so much of our coverage now, you know, through our social feeds.

I feel like half my feed is not just, you know, people's performances, but also the get ready with me for the actual event. And it does sort of change like how sports feels, I guess, in ways that in some ways, you know, I do have like complicated feelings about sports.

As a former athlete, I remember getting, you know, my nails checked that they were short enough. Wait, what did you play? Soccer and basketball mostly. For me, like one of the beauties of women's sports was that it was this safe place where I didn't need to wear makeup or do my hair. But at the same time, like,

I feel like, well, everyone looks great. I hope people are not feeling pressure as the expectations shift, I guess would be my feeling. The one thing I was so happy to see is, oh, now I'm going to blank on his name, but the American sprinter who won gold in the 100 meters, he was bringing the glam too. He had like pearls in his hair. I think it was Noah Lyles.

And he looked amazing. And so it was sort of nice to see. It was like, okay, if this is, you know, if sports are going to like up the glam factor, let's like evenly distribute it. And let's see the men, you know, do their part too, to look amazing. One thing that I really appreciate about social media and the Olympics though, is how it makes stars out of the randomer people. Like the Norwegian swimmer who's like not that good, but he's like made a lot of viral TikToks about being obsessed with the chocolate muffins.

pommel horse Steve, the French pole halter, the French pole halter whose dick was sleeping. And he didn't sleep. Yes.

His own version of glam. Yeah. Kim's is going to be hiring him as a spokesperson. Maybe even Lemonade Health, 23andMe. Maybe all the athletes have taken all the like mental health app endorsements. And so now what's left is you have to go for the next wave. Josh, what are you keeping tabs on?

So RFK Jr. did something with a bear and posted about it on his ex. It's the weirdest thing. I do want to say one thing. Is it weirder to have dumped a bear in Central Park or to have fucked a couch? I'm going to be honest. It's the bear thing. It's all the details around the bear that make it ridiculous. So RFK, over the weekend...

released a video. If you haven't seen it by now, I don't know where you've been, but it's him telling this story about picking up a roadkill bear, driving into the city, and after a dinner, staging the dead bear cub in Central Park on top of a bike, and...

leaving but my favorite part about this whole thing is that he was telling this story to rosanne bar did you not realize this no i did not put that together that's i mean the reason why he was releasing a video is because the new yorker has this big profile that came out about rfk which is i i'm sure batshit crazy i haven't gotten all the way through it it's very long

But they called with a fact check about this story 10 years ago about this bear, which there's a ton of news clips about, by the way. Yeah. Who would do this? One of them written by his niece. One of them written by his niece who I interned with at the time. But he decided to get ahead of the story by releasing this video with, I think, the caption, let's see how the media will spin this. No.

And he's just sitting telling this story about the bear to Roseanne Barr. It's the weirdest possible way to get ahead of a story. Heavy scare quotes implied of getting ahead of a story.

I am very tempted to. Our farmer's market has like an RFK table of supporters have been coming out on Saturday mornings. And I'm really I'm like, should I show up with a little bear mask? Walk on by and wave. Oh, my God. Just on a bicycle. Just ride a bear costume on a bicycle. Unbelievable. So funny. Yeah. What are you keeping tabs on?

I often dislike stunt casting, especially in theater, because I just feel like, you know, I want... I'm on board with you, yeah. People who, like, really care about their craft to do it. But stunt casting is back because this fall, there's a production of Waiting for Godot coming out starring Keanu Reeves and Alex Winter, Bill and Ted. It's so weird. From Bill and Ted's Excellent Adventure. No, it's genius.

I was like, this is the smartest thing I've ever seen in my life. It's so weird. Well, the last time we've got this, we had productions that was like with like Nathan Lane and Billy Crudup, like truly like excellent actors. Patrick Stewart and Sir Ian McKellen. I saw that one. I saw Patrick Stewart and Ian McKellen. Yes. It was one of my first dates with my now husband. He loves it. He's like, isn't this the best? And I'm like, ha ha ha. Like,

Like, what do I say? Like, I want to fall asleep. That's so, yep. That's it for most innovative companies. Ainsley, thank you so much for joining us. Thanks so much for having me. Our show is produced by Avery Miles and Blake Odom, editing by Julia Xu, mix and sound design by Nicholas Torres, and our executive producer is Josh Christensen. Remember again to subscribe, rate, and review, and we'll see you next week.

I don't have much of a need to take a DNA test. What about you? Yeah, I took a DNA test and turns out I'm 100% that bitch. That's so lame. That's so horrible. Why?