Tuesday, November 26, 2013

Stupid or Cagey?

When I was in college a few decades ago studying computer science, one of my instructors ran a small software company that made telecommunications (modem) software that ran on the IBM PC.  It was patterned after a rather expensive software package, and nearly cloned the user interface.  The product as I remember it was appropriately called Mirror, or something like it.  The bigger and more expensive guy did what you would expect, which was sue to have the software changed.  My instructor took this battle to the courts, and as a result got a lot of publicity.  When the final judgement was made and went against him, he implemented the required UI changes overnight (which had already been under development since the battle started).  Stupid?  Hell no.  He was cagey like a fox.  The publicity covering the court battle also took into account the price (great) and product capability differential (none).  So he wound up with a lot of free publicity, which meant a lot of increased product sales, which more than made of for his costs in the battle.

Was his (larger) competitor stupid?  Not really.  Their moves were quite predictable, because the choreography of that dance was already laid down in business law centuries ago.  It simply had to play out, and my instructor took advantage of how it had to play out.

Why is this relevant today?  Well, I see another battle going on today where many of the moves are completely scripted in law and regulation set forth decades ago.  We could argue about whether those regulations are the right ones, but that's not really the point.  They exist, and so does the FDA, and it has to enforce them.  Whether or not they make sense.

I'm not certain what the goal is from the perspective of 23andMe, and have no insight as to what their strategy is.  However, it's pretty clear to me that all the FDA's moves are fairly predictable.  And so whatever game 23andMe is playing, it can pretty accurately predict the moves of its opponent, and is doing very little to discuss its next moves.  There are plenty of reasons why 23andMe could be playing the game it's playing that make sense, including publicity and getting policy changes made.  The former may not have as big a payoff as the latter (because the publicity available to them by "winning" a battle with the FDA would be huge), but either could be a rational business strategy worked out by 23andMe and its backers, or they could be looking at something completely different.  I have NO clue.  I do know enough to look just a bit deeper under the covers and see that this isn't a normal game.

I'm going to be quite interested in how this one turns out.  I gave my sample several years ago to 23andMe and I find the service to be pretty useful, and would certainly want continued access to my data.  But I'm not going to make any predictions.  I can only guess at the next move by 23andMe, even though all of FDA's options to that response are fairly transparent.

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