Posts Tagged ‘Genealogy market size’

Genealogy: A $1B Market? Maybe

Monday, March 1st, 2010

one_billion_dollarsI’ve spent a sizeable fraction of my evenings the past few weeks working on applications to summer startup accelerator programs. Genlighten’s to the point where we could really benefit from the mentoring, community, focused intensity, and access to seed-stage funding that these programs offer. The ones we’re particularly aiming at are:

The application questions reflect each program’s unique personality, but they also share some predictable common elements (What will your startup do? Who are your competitors? How do you plan to make money?) Though none of them specifically ask for revenue estimates (they’re smarter than that), they all imply that they’re looking for startups that are attacking large potential markets.

The Challenge of Sizing the Genealogy Market

That’s a problem for us. Just how big is the genealogy market? This question has been addressed in numerous forms over the years, usually phrased as “Just how popular is genealogy anyway?” Dick Eastman has taken a serious crack at answering this question in the past and arrived at the answer (paraphrasing slightly) “probably not as popular as we think.”

When I tell people I meet at startup-related events that I’m working on a genealogy website, they usually say something like “Oh… that sounds like a nice little niche.” Their body language sends the message that they don’t think I’m going to be getting rich anytime soon. I’m tempted to offer a response like “It’s actually a pretty big market,” but  I just don’t have the numbers to back that claim up.

My Estimate and How I Arrived At It

For the applications I’ve submitted so far, I’ve basically tossed out a made-up genealogy market size number: $1 billion in annual revenue. How did I come up with that number? Here’s my back-of-the-envelope calculation (all figures annual):

  • Ancestry.com 2009 revenue: $225M
  • All other genealogy websites: $100M
  • All other genealogy software: $50M
  • Professional genealogy services: $100M
  • FHL microfilm orders: $10M
  • Government archive film/document orders (NARA, State, County): $100M
  • Vitalchek: $50M
  • Other genealogical record retrieval (libraries, historical societies): $25M
  • Genealogy societies (membership, conferences,  transcriptions): $15M
  • Other genealogy merchandise (books, accessories, etc.): $25M
  • Specifically genealogy-related travel: $300M

Feel free to check my math, but I get that to add up to $1B annually.

Probing My Assumptions

Of the figures I’ve listed, only the Ancestry revenue number is anything other than a wild guess. The travel number is particularly suspect. I’m thinking about “pilgrimages to ancestral homelands” like Ireland, Germany or Poland, so they’re probably pretty expensive, but how many people are actually making those kinds of trips in this economy? And what about professional genealogists? Are they really making $100m in annual revenue, or is the real number more like $50M?

I feel a little more confident about the web and software company revenue figures, though they’re also probably a bit generous. But very few genealogy-related firms are public, so it’s always going to be difficult to refine these numbers without direct input from the leadership of these firms.

Does It Matter?

To the majority of family history enthusiasts, the size of the genealogy market probably isn’t that important. But if we’re going to encourage entrepreneurs to build innovative genealogy-related companies, and if those companies are going to receive the funding they need to grow and succeed, someone’s going to have to come up with a better estimate than I have. Hopefully a much bigger one!