23andMe's financial troubles, Paul vs. Tyson and Bitcoin to the moon

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0:11This is The Indicator from Planet Money. I'm Waylon Wong. And I'm Darian Woods. And you're listening to Indicators of the Week. Yes, it is the day where we recap our favorite numbers in the news. And on this edition, we are joined by our colleague from Planet Money, Alexi Horowitz-Gazi. Hello. Hello. Thanks for having me, guys. On today's show, we've got Netflix's blockbuster foray into live sports, a stunning post-election cryptocurrency rally and a struggling DNA company's fight for survival. We'll have all that after the break. This message comes from NPR sponsor Zendesk, introducing the next generation of AI agents built to deliver resolutions for everyone.

0:58With an easy setup that can be completed in minutes, not months, Zendesk AI agents resolve 30 % of interactions instantly, quickly giving your customers what they need. Loved by over 10 ,000 companies, Zendesk AI makes service teams more efficient, businesses run better, and your customers happier. That's the Zendesk AI effect. Find out more at Zendesk.com. It's Indicators of the Week. Alexei Horowitzkazi, take us away. Okay, so my indicator this week is 23. That is the number of paired chromosomes in the human genome. Big news! Big news. News you can use. And it's the inspiration for the name of DNA testing company 23andMe, which recently announced that it would be laying off 40 % of its workforce.

1:40It just seems to be going from worse to worse. What's happening there? Yeah, well, you know, you may remember this. For a while, it felt like you couldn't make it past the water cooler without somebody telling you about how they'd recently discovered they were actually 4 % Neanderthal or whatever. I'm 98 % Neanderthal. I'm proud. That tall forehead suddenly makes sense. I never personally spit into one of their test tubes, but do you guys have spit in the game? I do, yeah. Wow, all right. I don't like spitting. I think I was repulsed by the whole mechanism. Samesies. Anyway, all that hoopla helped push the company's valuation to nearly$6 billion when it went public back in 2021.

2:20And a big part of the business plan then was to leverage all of this genetic data into a medical drug development operation. But since that high point, the company's been on kind of this downward spiral, right? Like orders for individual genetic tests are down. Last year, hackers managed to get their hands on the personal info of 6.9 million 23andMe customers, which led to a class action lawsuit and a$30 million settlement. Wait, I need to get my hands on that. Yeah. Darian, this is really relevant. I didn't think I was involved. Did you not get the email? Maybe it went to spam. It probably went to spam.

2:53Double check. Darn it. Someone's already cloned you. It's too late, Darian. I'm online for an order. You ordered a Darian? Yes. I'm still waiting for my shipment. Supply chain problems. In September, the entire 23andMe board handed in their resignations over disagreements with the CEO's strategic direction to take the company private. And then this week, the company announced it was going to be shutting down its in-house drug development wing. And all this stuff has added up to a growing concern that 23andMe might eventually turn to selling off this massive database of consumer genetic info in order to salvage some value from the company.

3:36So this is Darian's genome being like auctioned off or something? Yeah, there's still a chance for us, Waylon. But anyway, but in the meantime, one of the company's main revenue strategies remains growing its subscription customer base. What do you subscribe to? Yeah, I had the same question. It's a little confusing to me. I just did a Planet Money episode on why so many startups have tethered their financial fate to getting customers locked in like this to recurring payments. And 23andMe offers a couple tiers of subscriptions ranging from$69 to$499 a year, offering things like personalized health reports and lifestyle advice.

4:13But speaking for me, at least, it's like I got my info and I don't really need any more. Yeah. Then again, Darian, it might be worth, you know,$500 a year or so just to try to keep your data out of the hands of the highest bidder. What kind of terrible financial incentive? Is this a hostage scenario, Alexi? Or, of course, Darian, remember, you could also ask the company to remove your data from their database. That's apparently still an option. Okay. I'm glad there's hope. Added to your to-do list today, Darian. Well, thank you for that, Alexi. Waylon, what should we be concerned about or excited about?

4:46Well, I'll let you decide. My indicator is eight. That is the number of rounds that boxer Mike Tyson will go against influencer Jake Paul. They're going to be fighting in a live event that airs tonight on Netflix. Eight rounds, two minutes per round. The fight is being held at AT &T Stadium in Arlington, Texas. And anyone who subscribes to Netflix will be able to watch it as part of their membership. Wait, is this a sponsored message, Waylon, or is there some kind of economic lesson here? Why are we talking about boxing? Right as I heard myself, I was like, why don't I just sound like a commercial?

5:20OK, so we were just talking about subscription models. And Netflix and other streaming services are making a push into live events, which is a relatively new addition to their business model. Sports is a big part of that strategy. This year alone, Netflix announced deals with the NFL and the WWE. That's wrestling. Amazon already has a deal with the NFL. It is live Thursday night football. So these companies want to sell advertising against these big events, and they also want to draw in more subscribers by having, you know, exclusive programming you can't get anywhere else. Okay, so theoretically I could finally make my way through Bridgerton and then watch a kind of brutal or slow boxing match between Mike Tyson and Jake Paul.

6:05Yeah, I mean, how old is Mike Tyson these days? He's almost 60 years old, you guys. And he hasn't boxed professionally since 2005. Jake Paul is a considerably younger 27 years old. Now, I don't know anything about boxing. I think I'm pretty far out of the target demographic for this event. I've read some coverage where some boxing experts are saying this is not a good idea. And then there's also speculation that this is just more of a media stunt and not a real fight. I guess whether you're tuning in because you're morbidly curious or you love the sport of boxing, I guess viewers are viewers as far as Netflix is concerned.

6:41Yeah, I mean, everything is a spectator sport these days, including the markets. Right, Darian? Indeed. So there is wild things going on in the cryptocurrency market. My indicator is$88 ,505. That's how much money you'll need to pay to buy a Bitcoin as of this conversation's recording. Oh my God. I spent all my money on a Darian clone. Money well spent. Bitcoin's been up a lot since Donald Trump won the presidential election. He said he'll make the U.S. the Bitcoin superpower of the world. And it's gone up even more this week. Making me even sadder, I didn't listen to my techno-futurist friends back in 2011.

7:21When they said to buy low. Yeah, get on that blockchain. So I'm sensing a bit of skepticism. You know, this rise and rise and rise of Bitcoin and other cryptocurrencies can be a little painful to watch from those on the outside. It's not turning out to be this flash-in-the-pan craze. Bitcoin started 15 years ago, roughly. So from the skeptic's point of view, why is Bitcoin so persistent? And there's many reasons, but at the risk of inflaming some true believers, I want to make the case that speculative cryptocurrency trading is perfect for our brains. Poke the bear, Darian. Go on, go on. Spit hot theory, let's go.

8:02We could always replace you. So in the book Playing With Reality, I learned that history is full of gaming crazes. So for example, about 4 ,000 years ago, the people who were contemporaries of ancient Greeks, the Lydians, they're documented as using games like dice and knuckle bones as a kind of mental distraction from when there was this multi-decade famine going on. You know, disassociation never goes out of style. Yes, and psychologists have found that intermittent rewards are like catnip to our brains. It's much more rewarding to get these big spikes in the prices that you might get with Bitcoin or meme stocks than, say, the steady rise of, say, a bond or an investment in a house.

8:48So in some ways, these big jumps that you get after news like Donald Trump getting elected or regulators allowing certain crypto products, those reinforce the very popularity of Bitcoin. I fully understand this whole dopamine hit thing to our brains. I just think I get it from scrolling social media, you know what I mean, and checking my notifications instead of gambling. But I think it's the same mechanism. Yes, speculation, whether it's Bitcoin or meme stocks, is incredibly appealing to our brains. You know, this dopamine rush might at least partly explain Bitcoin's persistence. I think all of us just want to feel something.

9:24It is a way to feel something, for sure. Like, I will give it that. Get ready to feel a torrent of angry emails, Darian. I'm ready. This episode was produced by Corey Bridges with engineering by Gilly Moon. It was fact-checked by Sierra Juarez. Kate McKenna edits the show, and The Indicator is a production of NPR.