DNA Testing: A Growth MarketThe barriers to entry are daunting, but the DNA market provides opportunities.

DNA technology that can help determine a person's ancestry, predisposition for diseases and possible adverse reactions to drugs has exploded in the past few years, creating a cottage industry of gene-tracing companies that some are comparing to the dotcom boom. "Once these genomic companies get the formula right, they could be very, very successful," says Quintin Lai, senior research analyst at Robert W. Baird & Co.

Mountain View, California-based 23andMe started with seed funding from Google in 2006 and has since become a pioneer in direct-to-consumer genotyping--DNA testing that looks for known markers to reveal information about everything from a person's muscle performance to a possibility that he or she might develop diabetes. Consumers send in saliva and four to six weeks later, log on to a web page with a personalized genetic analysis. "We're confident we will have a viable business," says 23andMe co-founder Linda Avey, 49. "But we're still in startup mode."