What if we understood the software that runs the human body as well as a Goldman Sachs investment banking analyst understood Microsoft Excel financial model that he pulled an all-nighter last night building? What if we could identify and fix any malfunction in the software that runs the human body that could potentially lead to disease as fast as the analyst could discover what is causing the “#REF!” error in his freshly minted model?
Human Longevity Inc. (“HLI”) is a harnessing the power of big data and machine learning to gain a better understanding of how the human body works to revolutionize healthcare. In April 2016, the company raised $220 million at a $1.2 billion valuation to pursue its strategy of aggregating the world’s largest reliable database of genetic, behavioral, biological, and clinical medical data, and is applying supercomputing and machine learning algorithms to make discoveries within that massive data-set. (Newswise, 2016) The opportunity for HLI exists because of the convergence of four trends: improvement in computing power, exponential human genome sequencing cost reduction, advancement in machine learning technologies, and the health care system moving towards ‘value-based’ models (Rundel, 2015). HLI is leveraging this new technology to build the digital infrastructure and tools to allow us to better understand the software that run’s our bodies to predict, prevent, and cure disease.
- (B2B) Discovering and licensing diagnostics, pharmaceuticals, therapies and vaccines;
- (B2B) licensing its database to biotechnology, insurance companies, hospitals, and academic organizations; and
- (B2C) concierge medicine services through the Health Nucleus (described below) (Human Longevity Inc., 2016)
The company has developed a vertically integrated operating model than that can be segmented into four operating units, positioning the company to execute its business model:
- Information Generation and Discovery – creating the world’s largest genetic sequencing center allowing high-speed and low cost sequencing from different collaborators and industries
- HLI Database and Knowledgebase TM – developing proprietary machine learning and analysis tools enabling the development of the world’s largest medical database
- Genome Analysis – Machine learning to provide analysis of the HLI Database and Knowledgebase to provide integrated assessment health status and risk factors providing predictive, preventive, and individualized care.
- Health Nucleus – The world’s highest end annual physical checkup, charging $25,000 for the most comprehensive assessment of an individual’s health status that involves 8 hours of testing at its flagship office in La Jolla, San Diego of essentially everything that can be tested in the human body (Full genome & microbiome sequencing, metabolome and clinical testing and imaging, etc.)(Human Longevity Inc., 2016)
HLI’s business model is particularly clever because it has found a way to create an income producing data collection model by targeting wealthy individuals and charging them $25,000 for their Health Nucleus visit and 600 page comprehensive individual health assessment report. (Parkins, 2016)
There is an inherent network effect associated with this operating model. As more and more data is collected, the value of and insights that can be inferred from the dataset increases. This means that an individual can continuously learn more about themselves as the number of participants in the dataset grows. The company’s current operating model can be characterized as centralized, narrow, and deep and is not aligned to best deliver value on its business model, which is dependent upon the network effect associated with aggregating as much data as possible.
I believe that HLI’s business and operating models would be better aligned by pursuing a decentralized, distributed, wider, and shallower operating model. Specifically, I would suggest that the company offer a less comprehensive health assessment that focused on a few key tests through various clinics around the world that is within reach to the masses. The company’s primary focus should be maximizing data collection to build out its database and charging $25,000 is not the best way appeal to the masses.
Further, I think that the company should focus on partnering with hospitals around the country and offer its sequencing and technological capabilities to those hospitals at or potentially below cost in exchange for de-identified patient clinical medical data and samples (of course with the patient’s permissions) to build its database bigger faster to maximize value from the network effect.
HLI believes that most diseases are predictable years before they happen and with the right insights, data, and monitoring the company can develop individualized longevity plans to prevent the most likely risk factors from manifesting. HLI’s mission is to add 40 healthy and productive years to human life.
However, in evaluating HLI’s business model, I think the question that we should be asking is: what will be the effects on climate change associated with the resources required from the resulting population growth if they achieve their mission…Is this a goal we should even be aiming for?
Human Longevity Inc. (2016). Retrieved from Corporate Fact Sheet: http://www.humanlongevity.com/wp-content/uploads/HLI-FactSheet.pdf
Human Longevity Inc. (2016). Frequently Asked Questions. Retrieved from Revolutionizing Healthcare: http://www.humanlongevity.com/wp-content/uploads/HLI-FAQ.pdf
Newswise, P. (2016, April 04). Human Longevity, Inc. Completes $220 Million Series B Financing. Retrieved from http://www.prnewswire.com/news-releases/human-longevity-inc-completes-220-million-series-b-financing-300245761.html
Parkins, D. (2016, August 13). Adding Ages. The Economist.
Rundel, M. (2015, April 24). WIRED. ‘Supercharged’ genomics: 100 years of breakthroughs possible in 10 years.