Thursday, July 16, 2009

TruValue is coming. Valuation of GMG......

Valuation, it is a fickle beast. I love this post from

Valuation – especially for early stage companies – falls in the category of “more art than science.” While buyout investors who are acquiring companies with meaningful cash flow streams love their multi-sheet Excel models with 37 pivot tables, most early stage VCs can do valuations on a napkin (or – if they are good at simple math (e.g. addition and subtraction) – in their head.) In the early stages three things drive valuation: (a) ownership dynamics, (b) market terms, and (c) competitive deal dynamics.

Remember Again - this is art - there is no scientific way to really value three guys and a powerpoint slide or a web service with 10,000 subscribers of which 250 are active (although no one can prove that only 250 are active.)

Which brings me to my next point. How do you value a service which has an undisclosed amount of users, immense governmental regulation, and a company who is moving to offer the service for free?

The Art would say, unless you are going to sell the data to someone AND have that contract in is pretty much B.S.

I am surprised Pathway launched simply because of this reason.

Which makes me wonder, do these companies have contracts to sell YOUR genetic data? Did they disclose to you who they have contracts with?

Which also makes me wonder about this whole research revolution.
What's so revolutionary about it? Maybe how they don't use independent reviewers to approve the research and monitor the safety of the participants? Aside from Nazi Germany and Tuskegee, that is pretty much a revolutionary concept....

One thing is for certain, the company which says takes us seriously as we charge you 2500 USD for Gornish has seen the light.

Take their recent Twitter posts

"Navigenics Health Compass: $499 until August 31st. Take control of your health. Use promotion code COMPASS-LTO-26225


New price on genetic testing

So one has to be asking yourself, when market segmentation doesn't work and Big Blimps don't work and Celebrity endorsement doesn't work and super cool bubble conferences don't work what is the value of this and how does the public view it? The value or perceived value must be on the users themselves OR their data..........

I personally wouldn't pay any amount of money to give a single drop of spit to these companies UNLESS I could profit from their companies and the data they sell. Maybe after the companies offer free testing, they will next try to give you dividends for the investment of DNA?

It could happen. Why? 1 year ago asked attorneys about doing this grand Genome Phenome Metabolome study and if we could give people who participate shares in the company.......
The lawyers freaked out. Which is precisely why it sounds just like the thing 23andSergey would do.....and in the end Navi would follow in their footsteps........ Just like they are doing now.

I have been asked why I dislike these companies and distrust them.

1. They give geneticists and genomics a bad name by hyping inaccuracy
2. They are screwing with the public perception of genetics and personalized medicine
3. The infer clinical value and don't offer it
4. They purposely avoid regulations put in place to protect people
5. They have given absolutely NOTHING back to the field of genetics or medicine
6. They are doing "research" on human subjects without protecting them

I could go on and on here, but I will save it for now.....

I like to close with a great quote, edited for Genomics purposes.

"The Silicon Valley is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, Marketers, Hyped Scientists, Programmers. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it."

Have an idea, hype it, put it on Oprah, and hope the hell the sheep buy it........ I have a bad feeling about this. The public is awakening from the slumber here and it is likely that the usual VC stunts are not working......... Uh....Oh........Genomics for free, at a price.

The Sherpa Says: All the tricks the matrix pulls, all of the bamboozling, Ahh Gornish Helfn.

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