Is Illumina at a Strategic Inflection Point?

Illumina’s CEO Jay Flatley is angry.

Well, we do not know whether he really is, but anybody would be in his position. Competition has been showing up from everywhere, including short- read sequencing machine of BGI and long-read sequencers of Oxford nanopore and Pacbio. Among those, the last one’s developments are funded by Roche, whose offer to buy Illumina was rejected by him a few years back. Will the Swiss company have the last laugh?

Illumina’s stock crashed by almost half within a short span of three months, and is at 52 week low. Negative stories are showing up increasingly at financial sites - “Illumina Sales Disappoint, Will Continue to Do So”. Stock of a company is like its currency. Imagine your country’s currency crashing by 50% in 3 months !

Things were quite opposite a few months back, when one had to search hard to find anything negative about the company. All geniuses everywhere predicted sunny skies, be it Matthew Harper, Luke Timmerman or MIT Tech Review.

[DNA Sequencing Market Will Exceed $20 Billion, Says Illumina CEO Jay Flatley

MIT technology review - Illumina is the smartest company

Inside Illuminas Plans to Lure Consumers with an App Store for Genomes

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Flatley’s law and Intel

In the past, media compared Flatley with Intel’s Gordon Moore, and went to the extent of proposing Flatley’s law in the same tune as Moore’s law. Is it time to look at insights from other Intel CEO’s, such as “Only the Paranoid Survive”?

A few quotes -

a strategic inflection point is a time in the life of business when its fundamentals are about to change. that change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end

The strategic inflection point is the time to wake up an listen

People in the trenches are usually in touch with impending changes early

The person who is the star of previous era is often the last one to adapt to change, the last one to yield to logic of a strategic inflection point and tends to fall harder than most.

Business success contains the seeds of its own destruction. The more Successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing

The Lesson is, we all need to expose ourselves to the winds of change

While the story is unique to Intel, the lessons, I believe, are universal

If existing management want to keep their jobs when the basics of the business are undergoing profound change, they must adopt an outsiders intellectual objectivity. They must do what they need to do to get through the strategic inflection point unfettered by any emotional attachment to the past. Thats what Gordon and I had to do when we figuratively went out the door, stomped out our cigarettes and returned to do the job.

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Edit.

Others may argue about similarities with previous large drop in the Illumina stock during 2007-2009. After that period, company came out even stronger.

One difference - Illumina was a much smaller player then, and Forbes used to praise Affymetrix at that time and Illumina was an ‘upstart’ to them. People writing for Forbes are the smartest.