Anti-signal: The long line of DTC genetics isn’t looking too hot
2017 was the year that consumer DNA took off. 2020 might be the year that bubble bursts.
- In recent weeks, 2 of the genealogy bigwigs — Ancestry.com and 23andMe — announced plans to lay off hundreds of people.
- Other genetic sequencing companies like Veritas Genetics have struggled to raise funds. In Veritas’ case, they ceased operations in the United States and also laid off 50 people.
- Illumina (NASDAQ: ILMN), the biotechnology company that some refer to as the “backbone for genetic testing companies,” took a hit in 2019, after several years of consistent growth. They warn of short-term uncertainties in the DTC consumer testing market.
What’s going on?
- Ancestry CEO Margo Georgiadis cited in its announcement that the “entire DNA category” is seeing a slowdown in consumer demand. Others refer to the era of influence for these companies as a “DNA testing fad.”
- There are also privacy concerns, both on the part of companies and how they handle data and about people who can download consumers’ DNA sequencing. It may look like a bunch of ATGGGCTGAG on paper, but it’s also your biological blueprint. “You can cancel your credit card. You can’t change your DNA,” warns Matt Mitchell, the director of digital safety and privacy for Tactical Tech, an advocacy organization. Recode wrote an investigative piece on genetic testing, warning that it may even be a national cybersecurity threat. (And we did a deep dive on digital privacy last week.)
- It’s an increasingly competitive space. In addition to the industry leaders, as of 2018 there were approximately 75k “genetic tests” on the market.
These companies aren’t “cancelled”, but are facing an uphill battle. There’s a lot of catchup for privacy laws to reflect the relatively new DTC genetics space, so while the early adopters have already sent their saliva in to Anne Wojcicki, the remaining pool is getting tapped out, as others shy away due to privacy concerns. Companies, including Ancestry (which launched Ancestry Health last fall), are looking to focus on genetic health screening.
Available exclusively to Trends subscribers
Understand upcoming market trends, receive our premium weekly report, access our database of research, and network with the smartest people we know
14 Day Trial
Join Trends now for $1!
Already a member? Log In.
Hear from our members:
Co-Founder / Udemy
Founder / Author of "Free PR"
Co-Founder / Vungle
What do you get with Trends:
The most powerful business peer group
Connect with thousands of the world’s most successful entrepreneurs, executives and insiders. Collectively, Trends members have companies with tens of billions in revenue.
They say you’re the average of the 5 people you spend most of your time with. Are you surrounding yourself with the right people? You are now.
Weekly Case Studies
Curated stories from the business world
Dive into the success stories of companies around the world and discover how they achieved.
In-depth trends analysis & monitoring
Discover what’s trending before it goes viral
Don’t press snooze on this opportunity: sleep supplements
The signal: As meditation becomes mainstream, people may be surprised to find that searches for sleep apps double their meditation counterpart. As people invest in getting a better night’s rest, there’s opportunity abound, including physical products like weighted blankets or premium PJs, supplements, popular insomnia drugs having their patents expire, companies paying their employees to sleep better, marketing for sleep specialists, or online sleep education (ex: sleep apnea test has 27k searches per month).
The alternative milk market is getting frothy
The signal: As more people wave goodbye to dairy, alternative milk is slowly taking over; it has already cornered 13% of the market. With the exception of soy milk, all of the alt-milks have been on the up, with some of the newer entrants including hemp milk and pea milk. Other alt-products are getting attention, including cashew cheese, with 18100 searches per month.
Capitalizing on the Airpods market, making more money than Shopify
The signal: Since killing the headphone jack, Apple has graced the world with AirPods, which did an estimated 60m units in 2019. That means AirPods alone are bringing in approx ~$10b in revenue, more than Twitter, Shopify, or Spotify, to name a few popular tech giants. Opportunity lies in Apple opening up SiriOS or the wave of iPhone accessories (including cases, cleaning kits, hooks, and keychains) which have shown “hockey stick” growth alongside their hardware predecessor.
Leading experts share their knowledge
Attend exclusive lectures from experts in the industry and stay in the know
14 Day Trial
Join Trends now for $1!