Entrepreneur Christy Jones is trying to create a new venture to help women preserve their eggs and postpone motherhood. But what would an egg-freezing service sell – and to whom?
Harvard Business School professor Debora Spar discusses the challenges of commercializing fertility in her case, “Extend Fertility: Conceiving the Market for Egg Preservation.”
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BRIAN KENNY: Fertility rituals and the deities associated with them date back to the Stone Age. Venus and Aphrodite may get the limelight, but there are gods and goddesses associated with love and fertility that cut across nearly every faith and culture around the world. All of which reinforces the innate, often overwhelming desire of the human species to procreate. For some, this is easier said than done. Infertility affects about 10% of women under 44 in the United States. That’s six million people. For others, the demands of burgeoning careers put the pause button on starting a family. Regardless of the reason, fertility is an issue that looms large in the lives of many. Today, on Cold Call, we’ll discuss the case entitled, “Extend Fertility, Conceiving the Market for Egg Preservation,” with professor Debora Spar. I’m your host, Brian Kenny, and you’re listening to Cold Call.
Deb Spar’s research primarily explores how political forces shape and constrain market behavior. In 2006, she published “The Baby Business,” a book that studied the specific politics of reproductive science and tracked the emergence of the commercial market for fertility. And boy, that is appropriate for the case we’re going to talk about today. Deb, thanks so much for joining me.
DEBORA SPAR: Well, it’s a pleasure. Thanks for having me.
BRIAN KENNY: It’s your first spin on Cold Call, so we’re going to hope that you enjoy it and come back as a repeat guest here. We’d like to have you again. I’m going to ask you to start by the way we usually start here, which is if you’re stepping into the MBA class and you’re kicking things off, what would your cold call be to start the class?
DEBORA SPAR: Okay, well, if you’ll excuse me before I do that, I’m going to be nasty and just correct or amend one thing you said. Because you described infertility correctly as a problem that faces about 10% of women. But it also faces men. So, I think we need to be careful here, infertility is a human issue, it’s not just a women’s issue, which is why in part it’s such both a complicated business opportunity and a big business opportunity. So, we can come back to that. But in terms of the cold call, I actually have taught this case a few times now, and I begin with a slightly odd cold call as I often do. I actually remind the students of a Lady Gaga song called, “Give Me One Good Reason.” And although the song itself has nothing to do with the case, I think it’s an interesting line. And I ask the students to think about that line, and I say, “Give me one good reason why anyone would possibly want to create a market in egg preservation.”
And as the conversation goes on, I ask the participants to think about three different buckets. Why might it be a good reason for individuals to create this kind of a market? Why might it be good for societies? And why might it be good for corporate customers? And the last two are harder than the first one. But I think that’s a big part of the conversation that I try to get going.
BRIAN KENNY: Yeah, that’s sounds like a great way to start things off on a pretty rich discussion, I’m sure. Let me ask you why you decided to write the case and how it relates back to the research that you do.
DEBORA SPAR: Well, as you mentioned at the outset, I wrote this book in 2006, called “The Baby Business.” And in my experience now, everyone presumes that I wrote that book out of personal reasons. When they see a middle-aged lady, they presume that if you’re writing about fertility it’s because you’ve experienced it. And it’s not personal for me. I’ve been incredibly lucky. I had two children the old-fashioned way, and my husband and I chose to adopt our third, so I haven’t been in this market personally. But what happened to me was I wrote a book in 2001 called, “Ruling The Waves,” which was about cycles of innovation, looking in particular at the innovation that had created the internet, and then at the regulation and the rules that I argued that would eventually fall upon that sector, which I will say in a footnote, is now pretty much coming true.
But when I was doing sort of the book tour for that book in the early 2000s, almost every time I presented, I would get the same question, which was some version of, “Okay, what comes next? What’s the next sector in which we’re going to see this technological breakthrough creating markets that didn’t exist before?” The more I thought about it, the more I became convinced that the next area in which we would see this kind of breakthrough technology was biomedicine. But I was looking at this in the early 2000s, and as I started looking into the biomedical sector, it struck me that that sector wasn’t quite there yet, that people kind of foresaw what we’re now seeing in the genomics genetics revolution, but it wasn’t really happening yet.
But I literally sort of stumbled into this area of reproductive medicine. And two things just struck me that the more I looked at it. The first was that this was just kind of amazing, that people had been making babies the same way for literally millions of years, and all of a sudden there was, as I sort of somewhat flippantly said in that book, 15 other ways to have a baby, which just ipso facto was kind of cool. The other thing that struck me as a business school professor was that no one in this market or in this sector would acknowledge that they were actually engaged in commercial relationships. So everyone talked about giving the gift of life and love, or creating forever families, all of which is lovely, but they were also in business. And it’s so funny because in every other business enterprise I’ve ever visited, everybody wants to brag to you about how much money they’re making. Whereas in this sector, people were completely reluctant to talk about the financial side and the economic side of their enterprise. So that’s when I knew I wanted to start looking at this.
So, I wrote that book in 2006. I wrote a case that I taught at HBS shortly thereafter, and then I went away for 10 years, I left HBS to become the president of Barnard College, but kept looking at this area, albeit peripherally for that decade. And then when I came back and wanted to start getting back into the business of case writing, it was kind of the obvious thing for me to do. I’ve remained deeply fascinated in this sector. And in the 10 years that I was away, I’ve seen way more interest blossoming, not just among our students, but in general
BRIAN KENNY: Could you talk a little bit about, and your correction by the way on my introduction as well, is well taken, how common is infertility in the US? We’ll just kind of focus on the US for now.
DEBORA SPAR: Well, you know it’s hard to focus just on the US, because I think it’s important to look more broadly. Because one of the things that’s important to know here is that infertility is a constant across time and space and place. And when demographers look at records, which they do, they look at birth records and marriage records and death records, it turns out that roughly 10 to 15% of all human couples, heterosexual couples, are infertile. And that’s from the Amish people, to Russians, to Native Americans, to every single population. Mother Nature seems to have decided that 10 to 15% of us are not going to be able to procreate the way the other 85% can. And at a human level, as you indicate, this is tragic. And people who are dealing with infertility generally judge it as being more difficult to deal with than even a cancer diagnosis. So, it’s just devastating.
But if one abstracts away from that and puts on the cold-hearted economist or businessperson’s lens, if there’s a market that’s going to affect, there’s a condition that’s going to affect 10 to 15% of all human beings, this is an incredible market opportunity. And in again, sort of the 15 years now that I’ve been looking at this world, the willingness of people to both acknowledge the potential size of the market and the willingness of people to sort of get over the taboos that have long been associated with this area and actually treat it as the medical condition that it is, we’ve seen tremendous movement in that direction.
BRIAN KENNY: So, let’s talk a little bit, because the case does a great job of going into sort of the evolution of the fertility industry. It goes back quite a bit further than I realized. Can you tell our listeners a little bit about how it’s evolved over time?
DEBORA SPAR: We have prayed for fertility for as long as humans have been around. One of the quotes that I use pointedly in the book is from Genesis, appropriately, where Rachel cries, “Give me sons, oh Lord, give me sons or I shall die,” which just captures the poignancy around this. But for millennia, there was nothing one could do about infertility. And it wasn’t until the late 19th century that a small group of doctors began to understand both the mechanics of fertility, obviously, and then more to the point, the possible ways of fixing infertility. And the first breakthrough, and this is in part why I corrected your opening statement, the first breakthrough was from a doctor who realized that infertility could actually be caused, if you will, by the man. And this was because the doctor was treating young people who he had sort of treated as children, and then as they became married. And in a couple of cases he realized that young men who he had treated for syphilis were now coming in because their wives were infertile. And he began to suspect that the underlying cause of the infertility might lay with the man’s history of syphilis or other venereal diseases rather than with the woman.
And he was right, of course. And the way he treated this leads to one of the most unsavory stories to come out of the history of medicine, which was that he anesthetized the woman in this case, and without her knowledge, inseminated her with sperm of one of his good-looking medical students. A child was born, and the woman was never informed. He had told her he was curing her infertility. The story came to light when the medical student became a doctor and later in his own career actually reported the story. So that’s sort of the first known instance of a fertility treatment that worked.
And then it led, over subsequent decades, to what became the first commercial market for addressing infertility, which was sperm donation. And one of the most interesting things to note about that sentence is that right from the beginning, it was referred to as sperm donation. And it wasn’t a donation. It was euphemism for a cash transaction. And yet it set what became sort of the template in this industry, and again, one of the things that first intrigued me, which is this sort of covering up of the commercial-ness of the underlying transaction. So, we first developed commercial sperm banks, and this was a US creation, in the 1970s. And then after that point, the rest of the market developed much more quickly and much more in line with technological developments. The next great breakthrough and arguably the most important breakthrough, was in vitro fertilization and the infamous creation of Louise Brown, the world’s first test tube baby. And after Louise’s birth and a short period of hand wringing, couples, regardless of religion, regardless of what sort of initial cringing people might’ve had around this idea of creating babies, they’re actually not created in test tubes, they’re created in Petri dishes, but couples who were dealing with infertility just raced into the market for in vitro fertilization. And as I’m sure your listeners will know, it’s become completely commonplace technology, so that people who are dealing with infertility, if they can afford it, and this is a huge and important “if,” raced to use that technology pretty quickly.
BRIAN KENNY: Early on though, there were definitely people who were uncomfortable with the notion that we were playing with the creation of life.
DEBORA SPAR: That we were playing God. There was a huge amount of outcry, outrage. I think every magazine, when we still had magazines, in that era had sort of the same terrifying cover of this poor little baby sort of squeezed into a test tube. But what’s been so interesting, to me at least having been watching this for a while, is that people’s moral outrage and moral concern went away quite quickly, with a couple of major exceptions. So, the Catholic church has been steadfast against the use of any intervention with natural procreation since the beginning. And regardless of one’s views, I respect them for being this consistent over this period of time. But most other religions have either embraced or endorsed or turned a blind eye to the use of technology. And although the data are not good here, so I’ll say this with some caveats around it, it generally appears that there’s very little difference across religious groups in the use of these technologies. So, when people are struggling with infertility and they have no other options other than IVF, people appear to use IVF rather than going without a child.
BRIAN KENNY: You talked a little bit about the cost earlier. Can you sort of lay out for us what are these procedures cost and how do people pay for them?
DEBORA SPAR: So, there are a range of procedures now. And again, without going into too much detail, since the creation of IVF, we’ve had a progressive increase of other components that are part of the reproductive process. So today, people can go through IVF, but they can also go through pre-implantation genetic testing, which is if you will sort of an add on to IVF. They can purchase sperm; they can purchase eggs. So, there’s a whole menu of options here, each of which is very expensive. So, sperm are the least expensive part of the process. I always apologize to men when I say that. But sperm are pretty cheap to come by, generally a couple of hundred dollars for what is still called a donation. Eggs, if one needs to buy eggs, are much more expensive. Eggs will generally cost sort of $8,000 through a clinic. And there are these infamous stories of what are often called Ivy League eggs going for $50 to $100,000.
Then cycles of IVF themselves are very expensive, usually in the order of $12 to $15,000, although that varies with state and with insurance coverage. But if you just start doing the math here, you can see how this becomes incredibly expensive. Sort of the most expensive babies if you will, are generally those for gay men or gay couples who have to buy virtually every part of it. So, if a gay couple wants to produce a child who’s genetically related to at least one of the fathers, they have to purchase eggs, they have to use IVF, and they have to procure the services of a surrogate who is willing to carry that child.
BRIAN KENNY: This is probably a good time to transition to Christy Jones, who’s the protagonist in the case, and to talk about the idea that she had and sort of where that came from. Can you tell us a little bit about Christy?
DEBORA SPAR: Sure. So, I knew Christy in passing, not super well, when she was an MBA student at HBS. And she’s one of these iconic stories we love so much at HBS, that as she was in her first year of the MBA program, she was already working on this idea, the idea of creating a market for eggs. Christy had been a successful entrepreneur twice already. She’s graduated from Stanford, so was super smart, super entrepreneurial, a real rock star. And she tells the story, and as I related in the case, she came upon this idea, as so many people often do, kind of by accident, a casual conversation around the dining room table with her mom and her sisters, referring to a family friend who was having difficulty conceiving, and an offhanded comment of, “Gee, too bad you girls can’t freeze your eggs.”
And it caught Christy’s attention and she started looking at it. And again, to her credit, incredible diligence in doing the research and learning science that she had not been schooled in up until that point. She was just at the right moment, or arguably maybe a little early, in coming upon a technology that was just evolving. So again, going back to the history, scientists and clinicians have been able to freeze both sperm and embryos for several decades now. Eggs are the hardest thing to freeze because they have a very high-water content and the water forms crystals that destroy the nucleus. But for reasons that I won’t go into, small groups of scientists were coming up with new procedures that would enable the eggs to be frozen more successfully. And that was their genius and the genius of their science.
Christy’s genius, and I think she’s really most a marketing genius, was to see how that technology could be used to, one cannot avoid the pun here, conceive a new market. And other people had realized that there might be opportunities for, in particular, cancer victims, young women going through cancer treatment, to freeze their eggs proactively and preemptively. Christy’s genius was to realize that egg freezing might be something that could be sold to perfectly healthy young women who would use it as a tool of preserving their fertility without knowing whether or not they would ever need that kind of insurance. And it was really a leap of faith on her part. I think it was intellectually quite brilliant leap. And then as she left HBS, she went out and made it happen.
BRIAN KENNY: What you’re describing too are some of the qualities that we hear our entrepreneurship faculty talk about a lot with somebody who is able to see an idea in the very early stages and then able to somehow muster the resources to bring it to life in some way. Christy certainly fits that mold. What is she like? Can you talk a little bit about her background and sort of what she’s like?
DEBORA SPAR: Sure. I think she has that entrepreneur’s mindset. She formed a very successful company while she was still at Stanford, immediately after Stanford. And she has that quality I always respect in people because I do not have it myself of just being totally accepting of risk. Not being foolhardy about it, but as you said, she saw this idea for the egg freezing company and then she was just dogged. She taught herself science, in a serious way. She found the best people out there. She reached out to them. She is also very inclusive. So, as she built this business, she partnered with the scientists, she partnered with the clinicians, she partnered with the clinics. In retrospect, as the B case describes, she was a little bit early to the game. She saw it before the market was quite ready, and she wasn’t able to sort of grow it to the scale and at the speed she had hoped. But she launched it, she created this business, she created the market. And Extend Fertility now is being run, it was bought by another HBS MBA, and they are working now to try and scale the business up. But I think she really gets the credit for being, in every sense of the word here, a visionary.
BRIAN KENNY: She had some things to consider about how she was going to enter this market. Can you describe what those were?
DEBORA SPAR: Yeah. I think for me the most interesting piece is perhaps the most foundational. Who is your audience? Who are your customers? Who are you selling this to? And one of the things she really struggled with, and again, I think it’s very perceptive even to see this as an issue, is infertility, the people who have been in the market for infertility services, are people who by definition are infertile. She was expanding or turning that market on its head to sell services to fertile people. So physically, how and where do you want to do that? Are fertile, young women going to want to go to an infertility clinic? Do they want to medicalize this procedure? Because it’s not a medical issue for them yet. Or, do you want to make this sort of more an issue of women’s empowerment? Do you want to sell this not as an insurance or protection or medical procedure, but as a way to liberate women? Do you sort of want to tap into the feminist strand, which is completely different than sort of the medicalization of the infertility markets? So, at that very foundational level, she had to decide what this product was. And I think she got it right. She went much more on the sort of empowerment side, but without trivializing it.
BRIAN KENNY: Does that in some way, though, kind of stoke those flames about inequality and affordability for people who just aren’t in a position to do this necessarily? Is she sort of tapping into more of the elitist vein when she’s going in that direction?
DEBORA SPAR: I think yes is the answer to that. But I think that’s sort of what you have to do, particularly in the United States. So, something we haven’t spoken about yet is other markets around the world operate very differently where fertility services are bundled in with healthcare, particularly in places where there’s a national health service. So that’s why if you go all the way back to my Lady Gaga opening question where I sort of forced the students to think about societal reasons for this, you could imagine a completely different market, which you get in places like Denmark and Israel and some other countries. If the country decides that fertility is a good thing and procreation is a good thing and giving women options is a good thing, you could just bundle this into the national healthcare. In which case its cost does not become an issue.
Sadly, in the United States, we do not treat fertility as a medical issue in most states. So last time I looked, I believe only 16 states have insurance coverage for fertility. And so without kind of a national health system or wider insurance coverage, you kind of have to sell it into the elite market. Which I think is unfortunate, not just in egg preservation, but more importantly within fertility services in general.
BRIAN KENNY: She identified this new market that you described, and I guess what she was really selling it to some extent was peace of mind. It was a little bit of an insurance policy to the extent that maybe if I wait 10 years to have a child, my medical health might be different, I might not be able to do it. So, it’s a little bit of an insurance policy, and she’s sort of selling people that peace of mind. Is that an accurate way to assess it?
DEBORA SPAR: I think yes, that’s accurate, and it’s also a little bit more complicated as the market’s evolved. What she and others have discovered, and I don’t know that there was any way of learning this upfront, is that the women who choose to freeze their eggs do it for a variety of reasons. The model that I think many people presumed, which is this would be sort of Harvard MBAs and young lawyers, sort of very career-minded women who were trying to buy this insurance policy for career reasons. That’s part of the market. But another part of the market is women who think they want to have partners, would like to have raised a child with a partner, but don’t have the right partner at a moment in time. And so oftentimes they’re kind of, if you will, the hedge is less of a career hedge than it is a personal partner hedge. And what I’ve heard just anecdotally from women who’ve done this is that once they’ve frozen their eggs, it takes some of the stress out of their relationships because they don’t feel like they have to sort of push a relationship faster because they want to have a baby. It’s almost like they get more of a personal window than a career window, which I think is just fascinating and I don’t know that anyone could have predicted it upfront.
BRIAN KENNY: Right, right. So, one final question for you then. As you teach this class to MBA students, is there one thing you want them to walk away with? Is there one thing you want our listeners to take away from hearing you describe the case?
DEBORA SPAR: Well, I think there would be sort of two things. I think people should understand in fertility as a medical issue and an important issue and an issue that has to be taken out of the shadows, which I think is already underway. And then I would hope, and it’s related, that people come to think about the market for products that have sort of been feminized over time, that these are really good markets. That egg freezing is not only an interesting, perhaps fraught area, but it’s an interesting area of commerce. I think of it almost as akin to cancer drugs. There are emotions involved, there are true life and death issues involved. But we have built robust commercial markets, well-regulated markets, in cancer therapies. And I would like to see that same kind of commercial, well-regulated market, emerging in the fertility space as well.
BRIAN KENNY: Deb, it’s a great case. It raises a lot of important questions. Thanks so much for joining us today.
DEBORA SPAR: My pleasure. Thanks so much for having me.
BRIAN KENNY: If you enjoy Cold Call, you might like other podcasts on the HBR Presents Network. Whether you’re looking for advice on navigating your career, you want the latest thinking in business and management, or you just want to hear what’s on the minds of Harvard Business School professors, the HBR Presents Network has a podcast for you. Find them on Apple podcasts or wherever you listen. I’m your host, Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School on the HBR Presents Network.