It was a big evening for Lizzo. She kicked off the Grammys and won an armful of awards last night. But those DNA tests she made famous could be on the outs. Today:
- 23andMe’s kits might not strike a chord
- Goldman Sachs wants women on board
- Pawn shops do more than just hoard
Editor’s note: It’s Super Bowl week. If you’re like us, you’re watching the game for the commercials. The best ones win watercooler buzz, and the worst ones make the world cringe. Which Super Bowl ad is your favorite of all time? How about your least favorite? Tell us here.
They didn’t take a DNA test: 23andMe lays off workers as demand falls
The DNA test-kit maker 23andMe laid off 100 people last week — 14% of its workforce — after a slump in sales, CNBC reported.
Does that mean the once-booming market for genetic testing could be headed for a downturn?
Lizzo made them famous, but the truth hurts…
…demand for DNA testing kits is definitely declining. MIT Technology Review said the total number of people who had ever bought the kits doubled in 2018, growing the databases of DNA-testing companies to more than 26m people.
But last year was different. The largest companies sold just 4 to 6m tests in 2019, their slowest growth rate ever.
What explains the market’s retreat? Anne Wojcicki, 23andMe’s CEO, didn’t pinpoint a single cause. But people have a few theories:
- In-home DNA testing is weird science. Different tests can show very different results, and they’re not always reliable.
- Consumers are asking, who’s got my data? The police have used people’s results to identify suspects in high-profile crimes.
- There’s no good reason to buy another one. That DNA testing kit might make a cool gift for Uncle Joe — but probably just once.
23andMe isn’t the only one who’s struggling
Veritas Genetics said in December that it was ceasing operations in the US. 23andMe is hoping that deals with drugmakers like GlaxoSmithKline, which are central to its health-testing business, will keep the company afloat.
Old man Goldman says it won’t take companies public without women on board
Last week, Goldman Sachs CEO David Solomon announced that beginning in July, the investment bank will no longer help companies go public unless they have at least one “diverse” board member, putting a special focus on women.
Women are underrepresented on corporate boards
According to research from Crunchbase and the Harvard Business Review, among “200 of the most heavily funded US-based, private, venture-backed companies”:
- 7% of corporate board members were women.
- 60% of companies had no female board members.
In the last 2 years, more than 60 companies in the US went public without a woman or person of color on their board.
But Goldman thinks targeting IPOs could increase diversity
Goldman isn’t the first institution to call out the lack of diversity on corporate boards:
- California passed a controversial law requiring at least 1 female board member earlier this year.
- BlackRock and Vanguard use their voting power to pressure all-male boards to add women.
- And JPMorgan Chase & Co. and other banks offer advisory services to help companies find diverse candidates.
But since Goldman is the single largest IPO underwriter in the country, the buck often stops with them — and that means this new policy could have a huge impact.
Hi. It’s Bobby.
If you’ve learned anything about me from the ads I write for The Daily, it’s that I’m, uh… all over the place (to put it nicely).
- I frequently oversleep and get lost trying to find shortcuts to work
- I often take last-minute, unannounced trips to Indiana to stare at my nephew
- Sometimes I go for a run at 12:00 and forget I have a meeting at 12:05
All that to say, it’s pretty clear our ads team here at The Hustle needs a special kind of communication software to keep up.
For that, there’s only one choice: Microsoft Teams
Whether I’m stuck working at a Starbucks in Indianapolis or sweatily taking a meeting on a public bench post-run, Teams allows Meg and I to seamlessly exchange everything we need to keep those ads crankin’.
With Teams, we can handle tasks, drafts, feedback, and edits, all within one simple platform… not to mention sharing GIFs when it feels like the ad-valanche is about to overwhelm us (hey, you can’t put a price on your sanity).
So, what would happen without it?
I’m just gonna ignore that question. I’ve got a flight to catch.
(P.S. Meg just messaged. I forgot the CTA — Try Teams today! It’s free!)
|Teams run on Teams →|
At pawn shops, deals that seem really bad are often a very good thing
For a gold ring ring that costs $300 at a jewelry store, a typical pawn shop would pay about $30.
But, as a recent report from The New York Times shows, deals that may seem like rip-offs can actually be really helpful to customers.
Pawn shops make money issuing loans, not selling grandma’s pearls
Although pawn shops are sometimes stereotyped as shady businesses that profit off of others peoples’ poverty, pawn brokerages are also an important alternative credit market.
Here’s how pawn shops are supposed to work.
- Pawn shops DON’T buy valuables from desperate people to quickly resell them at a profit.
- Pawn shops DO issue loans to customers based on their items’ value, and hold them as collateral.
Then, pawn shops make money from interest they earn on those loans.
Customers actually still own the items they pawn
In New York, pawn shops can sell these pawned items only if their owners haven’t paid off their interest after 4 months.
Not all pawn brokers are the same — and not all of them have customers’ best interests in mind (interest on loans can be as high as 200%).
But GEM Pawnbrokers, a NYC chain, told the Times that 80% of its revenue comes from loans, not sales.
And pawn shops allow the unbanked to borrow money
Unlike traditional banks, which use credit as collateral, pawn shops will take anything as collateral — and therefore serve as de facto banks to people without credit.
Small business of the week: How a solo founder hit $4.5m in 3 years
Mike Viskovich built Boldify into a $4.5m business in just 3 years. The secrets to his success? He started with a product he already used, and he leaned heavily on Amazon traffic.
Hair thickener might sound like an unusual product to build a company around, but Viskovich believed in it. The market for hair products typically features healthy margins.
Amazon powered Boldify’s rise in a few ways. It was a major source of customer traffic, and it helped Viskovich keep the company lean, since it takes care of most customer-service and fulfillment issues.
Over the years, Boldify has grown from 1 product offering to 10, which has helped in cross-selling. Viskovich plans to continue investing heavily in product innovation by working closely with a team of chemists. He’s also focusing on driving more “off Amazon” traffic to capture what he believes is a $50m market.
- Founders: Mike Viskovich
- Employees: 7
- Years in business: 3.5
- Cost to launch: $50k
- Funding methods: Personal savings, friends/family contributions, loans
- 1st-year revenue: $200k
- Current annual revenue: $5m
🍎 How Apple headed off a major slump.
🚙 Why safety gizmos make your car insurance more expensive.
👴 Stress really does make your hair go gray faster.
📺 Being a YouTube content moderator can give you PTSD.
🚽 America’s obsession with bathrooms, explained.
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