Whatever happened to genetic matchmaking?

Online dating websites are very lucrative, and the competition between them is immense. Every other advert on the London Underground seems to be for a dating website catering to one demographic or the other.

A few years ago, a number of startups began to offer online dating based on genetic profiles. Members would send in a sample of their saliva, from which DNA would be extracted. Next, the genes encoding the Major Histocompatibility Complex (MHC) would be genotyped and added to the member's profile. The theory was that we are sexually attracted to partners who have different MHC genes to ours. An algorithm would then identify partners that were a good genetic match.

There were at least half a dozen startups that tried this, including ScientificMatch.com, Gmatch, Basisnote, and GenePartner. All of them, with the exception of GenePartner, are now out of business.

Why didn't this business model work? I don't know about you, but for me, it's a lot more fun to think about why a business might fail instead of why it might succeed. I have several hypotheses:

• It's not particularly romantic to find your partner on the internet. Finding your partner based on a genetic test that is likely to be obscure to most people is even less romantic. Actually, it'd be hard for me to come up with a less romantic scenario.
• Most people (including me) will assume that things like personality, interests and looks are more important in a partner than their MHC genotype. 
• Presumably dating websites have to balance their male and female membership. My guess is that the majority of people interested in finding a partner through genetic matchmaking are male. 
• This type of service may attract people with certain undatable characteristics. 
• The science behind genetic matchmaking is shaky. I only reluctantly include this point because I consider this an unlikely reason for business failure. After all, shaky science doesn't stop other online dating websites that use unvalidated algorithms.

Unfortunately, I have no privileged insight into why the genetic matchmaking startups actually failed, and I'd therefore love to hear from you if you have any other ideas. 

Disclaimer: My interest in genetic matchmaking is entirely professional in nature. However, should you avail yourself to any of the still functional services I have mentioned in this post, I'm not going to judge you. At least I will try not to.

What's wrong with writing a business plan for investors?

I've recently been involved in writing a business plan. Whilst it was a worthwhile experience, it has also prompted me to question whether writing a business plan for investors - rather than for internal use - is in anyone's interest.

We were writing for a biotech business plan competition. The winning team was to get £100,000 ($150,000) and free lab or office space in a biotech incubator. The judges of the competition consisted of venture capitalists (VCs) and other investors, as well as other organizations that are involved in early-stage startups. The selection process was quite similar to that used by VCs when they decide which businesses to invest in.

In principle, there are sound reasons for writing a business plan. It forces the startup to envisage its future and to think through the details of what it will do. Ideally, this process will uncover potential threats and opportunities, strengths and weaknesses.

This is however not what happens in reality. In my experience, people starting a business already tend to be overoptimistic. Unfortunately, I doubt that writing a business plan for potential investors encourages honest and self-critical assessment of how to maximise the startup's chances of success. 

Instead, it becomes an exercise in trying to convince potential investors. When there are several estimates of the market size, the temptation is to pick the biggest one. When there are potential non-obvious threats, the temptation is to either not mention them at all or to explain why they are not going to be a problem, rather than actually thinking them through. Et cetera. Some investors even encourage this by explicitly demanding to be "sold" the idea.

You may think that this is not a big deal. After all, investors are aware that startups will inflate their chances of success and will discount for this: You're hyping, I know that you're hyping, and you know that I know that you're hyping.

The problem with this is that apart from money, time is the most limited resource for startups. Writing a business plan takes time, and the one the startup writes for investors is probably going to be the only one. Writing a second, more realistic one for internal use would be a waste of resources.

A solution would be for investors to stop asking for a business plans and instead relying exclusively on their own due diligence - in close collaboration with the startup of course. The initial communication between the startup and the investor would focus on the science, covering the market and the business model only in general terms. The advantage for startups would be that they could write their business plan without having to keep in mind what the investors want to hear, instead using their resources on planning that actually matters to the business.

If you have any experience of investing in early-stage startups, or if you have ever written a business plan yourself, I'd love to hear what you think about this.

What would free sequencing mean?

This is an essay I wrote for a science writing competition before realising that I'm not eligible to enter. Please don't mock me.

Do you remember the first time you used a computer? I do. It was around 1990, and I was six years old. My father had taken me to his office, and one of the secretaries showed me her PC. I don't remember much about it except that several times whilst she was working on it it gave off a tortured noise to indicate that it needed more time to catch up with her typing.

Today any smartphone has hundreds of times more computing power at a fraction of the cost. That computers steadily get cheaper and more powerful has been recognised for some time now and the phenomenon even has its own name: Moore's law.

Moore's law, interesting as it is, pales in comparison to what is going on the world of DNA sequencing.

The Human Genome Project, which had the goal of sequencing the DNA of a single individual, took more than ten years and cost roughly $3 billion. Today, it costs a few thousand dollars to sequence a genome, and it can be done in a few hours. Over the last years, the pace at which DNA sequencing technology had become cheaper and better has been staggering, and there is no indication of it slowing down. On the contrary, there are several companies that work on innovations that will ensure that sequencing will become faster, and easier to use, and much, much cheaper. The most likely scenario is that in a dozen years or so, sequencing a human genome will essentially be free.

It is worth contemplating for a moment what the implications of that will be. Depending on your attitude towards technological progress in general and genetics in particular, the following may either excite you or make your very anxious.

Sequencing will initially have its biggest impact in the area of healthcare. Already, sequencing enables the accurate diagnosis of children with severe genetic disorders and of adults with certain types of cancers, and in some cases has led to cures that would not have been possible otherwise. 

Another example of how sequencing is already impacting healthcare is the diagnosis of genetic disease in unborn babies as early as in the 10th week of pregnancy. Through the widespread adoption of this kind of tests a lot of severe genetic disorders could be avoided, although this is also likely to lead to an increase in the number of abortions. As time goes by, it'll be likely that sequencing becomes an increasingly important part of everyday healthcare.

Cheap and easy to use sequencing technology may however have its biggest impact outside of the hospital. Computers only really started to change the world once they got cheap enough to become affordable toys for teenage nerds and hobbyists. It may well be that the same is going to happen with DNA sequencers. Handheld sequencing devices could be used by hobbyist entomologists who want to identify bugs in their back yard and by consumers who want to make absolutely sure that their lasagne contains nothing but beef.

The impact of pervasive sequencing could also have more sinister aspects. Today, a lot of effort goes into protecting the data that is obtained by sequencing clinical patients from being accessed by unauthorised third parties. Imagine anyone with a handheld sequencer could get the same data about you from some dandruff you have left behind on your keyboard.

Why has Seqonomics been so quiet recently?

If you come here often, you'll have noticed that I recently haven't kept up with posting every week. The reason is that I'm currently working on another project in my spare time.

In the end of March, I'm going to launch Consultinsider, a resource to help graduates, postgraduates and postdocs start a career in management consulting.

The provisional Consultinsider website

If you like the idea, I'd appreciate your help. Here is what you can do to get the word out: 

• If you want to be notified once Consultinsider launches, leave your e-mail address on http://www.consultinsider.com/ 
  

• For more frequent updates, connect to Consultinsider on Facebook http://www.facebook.com/Consultinsider/ or on Twitter http://twitter.com/consultinsider

But don't worry, Seqonomics isn't going away. Once Consultinsider is up and running, posts will commence once again.

What is going on with the UK?

The United Kingdom is punching above its weight in genomics.

Compared to the other two European countries I've covered on this blog - France and Germany - the UK is the clear genomics leader in genomics. The reason is not so much that the rest of Europe has neglected genomics, but that the UK has gone all in.

The Sanger Institute, where I work, is a good example of this. It made the single largest contribution to the Human Genome Project, and it is still going strong. Together with the Broad Institute, it is today the leading genomics institute worldwide in terms of high-impact citations, and amongst the largest sequencing centres in the world. It is largely funded not by the British government, but by the Wellcome Trust, a charitable foundation.

Sequencing technology is another example. Both the most prominent sequencing technology used today and the technology that many see as most promising for the future were developed in the UK. Sequencing by synthesis, which produces most sequencing data nowadays, was developed at the University of Cambridge before being spun out into a company called Solexa, which was acquired by Illumina in 2007. The company that is most likely to first bring nanopore sequencing to the market, Oxford Nanopore, is also located in the UK.

The British government is keen to keep and expand the UK's capabilities in genomics. Last December, it announced plans to sequence up to 100,000 patients in the NHS, the UK's publicly funded healthcare system. It has not announced many details, except that it has earmarked £100 million for this project. This money will not only cover the sequencing, but also training and the development of bioinformatics capacity. This is about all the information that has been made public about this project, but a more detailed plan is expected by June this year.

Especially compared to similarly sized countries such as France, Germany, or Japan, the UK has a strong base in genomics, and there seems to be enough public commitment to ensure that this is not going to change over the next few years.

This post is a part of a series on genomics in different countries, which has already covered Canada, China, France, Germany, and Japan.

How bad a year has 2012 actually been for genomics investments?

In August, I published a post on how, despite a scarcity of biotech venture capital, there seemed to be a fair amount of VC funding specifically for genomics, at least compared to previous years.

I received a number of fair criticisms for this post. The most important one was that VC investments in the first half of the year are not a good predictor of investments in the second half, as VCs prefer to invest in certain months due to tax reasons.

This is why I have updated and re-analysed my data, and it turns out that my linear extrapolation of VC investments until the end of the year is a reasonable fit to the actual investments ($392m until the end of 2012, whilst the extrapolation suggested $412m). For more information on my methodology, please see my previous post on the topic.

Click on the figure to enlarge. Number of investments in genomics companies, average investment value, and total genomics investments, 2006-12.

The implication is that more money has been invested in my panel of 72 genomics companies than at any time since 2006. This is however due to fewer, but larger deals than in previous years. Whilst it is true that the number of investments in genomics companies for 2012 is probably going to be the lowest since 2008, the average amount invested is higher than in any previous year.

For genomics startups this means that it may be harder to get funding, but that once you get it, it will be generous.

By the way: The largest single genomics investment since August, and  one that has bypassed me completely, was $58m for CardioDx, which is a self-described pioneer in the field of cardiovascular genomic diagnostics. The money comes from more than a dozen different backers.

Another criticism was that I don't properly define what a genomics company is, and that this may actually be an arbitrary term. This is something I'm planning to address in one of my next posts.

Which Seqonomics posts are the most popular?

It has been a year and 50 blog posts since I started Seqonomics. Some of the posts have been popular, others less so.

Here are the four most read posts from Seqonomics from last year:
 

1. New sequencing technologies: Who's next? Which companies are developing next-next generation sequencing technologies, apart from Oxford Nanopore? This is also the second most commented on post.
   
2. Who are the sequencing superpowers? Proportional to national Research and Development expenditure, which country has the largest sequencing capacity?

3. How do genomics companies make money? Who are the customers of genomics companies? This is also the most commented on post.
   
4. Is the NGS market a duopoly? In sequencing, do companies other than Illumina and Life Technologies actually matter?
   

By the way, the probably deservedly least popular Seqonomics post is Who's driving innovation?