What strikes me as a Non-US citizen (UK) is the surprising number of solutions to problems that look like US healthcare specific issues. Drug-peer to peer swapping because of prescription costs seems like it would have no demand in most other rich countries, and no supply elsewhere.
Not saying it's a bad idea, just interesting to see biases - and wonder how we overcome them.
How does the requirement to relocate to SF work for companies with a wet lab or specialized capital equipment requirement? And outside of mentoring/networking (can YC provide in the biotech space?), how is YC a better deal than an SBIR/STTR?
"Industrial Microbes" has a concept that really excites me, I'd have loved to help them develop that idea for IndieBio Ireland.
It's non-obvious ideas like "Why not use natural gas instead of refined sugar?" that are going to make Biotech explode in coming years..while simultaneously putting fossil fuels to more productive or even sequestering use than burning them!
To point out one similarity Founders Fund has invested in all of us. BioTech is a huge space, and to be purposely vague we are working on something pretty far away from the other folks.
There's a big difference between the 5 - 15 years and billions of dollars to product in biotech/pharma, and the few at most years and relatively cheap amount of money for the payoff in software.
And if you think there are shortcuts like uber and airbnb, there are not. Even 23 and me, a pretty innocuous idea, is essentially a failure.
I was also told by the HN crowd that Facebook is a fad that would never make any money :)
The best investments always take a long time. Fortunately we are very patient investors, happy to fund "crazy" things like nuclear fusion and cancer treatments.
23 and me is an example of the least ambitious thing you could do with genomics.
Honestly, I think you are being needlessly negative. There is a lack of life sciences research funding and an oversupply of life science researchers. What's the disadvantage of more biotech startups? Public-private collaborations with small nimble startups sounds like a dream come true, compared to years waiting for the wheels to turn in collaborations with big pharma.
That's a pretty large and unfair statement, and I'd like to know how you are measuring failure.
23andme has created an affordable market for personal genomics, single-handedly forced modernization in regulation and policy, built a mineable database of live genome data that is helping researchers find cures, and amassed nearly 1M paying customers.
I'd love for you to say that just because they aren't yet profitable means that they are a failure.
> 23andme has created an affordable market for personal genomics
Fair.
> single-handedly forced modernization in regulation and policy
Personal DNA kits were not pioneered by 23andme. The NHS in the UK sends out personal kits to test for colon cancer. One rather smart child, Jack Andraka [1], devised a personal kit to test for pancreatic cancer. And regulation in FDA policy is constantly shifting and changing. A notable such shift is due to a club set up by Ron Woodroof in 1988 [2].
23andme may have helped push science further, but single-handedly? Hardly. Science and discovery is a collaborative effort. They couldn't have done it without shoulders to stand on.
> built a mineable database of human genome data that is helping researchers find cures
The Human Genome project is a mineable database of chemical base pairs the make up human DNA. This has been an enabling technology used by researchers for drug and disease discovery since 1987 [3].
> and amassed nearly 1M paying customers.
The article you link to claims the number is closer to 850,000. A claim of 1M implies a relative error of 17.6%.
> I'd love for you to say that just because they aren't profitable means that they are a failure.
I agree that non-profitability does not imply failure.
One of the biggest challenges they've had to and continue to try to overcome is an outdated policy system around personal health data, within the U.S., and I'm not sure if Jack Andraka has attempted to mass produce and mass release his pancreatic kit. The statement was about their recent FDA battles, not about 'advancing science'.
The 23andme dataset provides more value than HGP since it's an dataset of active participants. I don't know too much about the specifics or privacy mechanics, so I can't comment on how, but this article is an example (http://www.mercurynews.com/science/ci_27487046/23andme-quest...). The way researchers are using the dataset is very different because they are able to do followups. That's a very significant difference, it's why they have pharma companies lining up to get access to the dataset.
Last I heard, they were closer to 1M than 850k, unfortunately can't find any live stats. Maybe someone else can chime in?
I don't have any affiliation, and I'm surprised that you'd assume so. I recognize that there's an overeagerness from both startup people and academics to crap on biotech startups, rightly or wrongly. I haven't quite figured out why spectators are motivated to do so.
I figured I could add a little clarification to this comment.
* The human genome project created a "single" genome (thats not quite right, but close enough for this discussion). This was and is incredibly useful, but a single genome can only do so much. To answer population genomics questions (e.g. is this mutation common and therefore probably not disease causative) you need lots of people and the more the better.
* The 23andme dataset is not whole genome data, but instead some subset of genomic locations that they consider more interesting. Still valuable but not as much as whole genome data.
Also, for big whole genome datasets you can check out the 1000 Genomes Project, which has somewhere north of 2000 genomes. And there are many more big datasets in the works, which will continue to be incredibly useful!
Good clarification, amended my comment too. Although, the 23andme dataset is with live participants with genealogy data. That's a dimension HGP doesn't offer.
1000 Genomes looks great, but how is it funded? Also, how is the sequencing done? Presents a few more open variables, and 23andme is orders of magnitude larger.
Absolutely, I meant to add above that the 23andme dataset has huge value due to its size. Also you bring up a good point about potential easy access to participants. If 23andme allows researchers to contact people who were of interest to their particular study and ask for more information, which could be as easy a questionnaire, that could be incredibly valuable. I don't agree with the above commenter that 23andme was a failure. Genomics is still incredibly young and we are just getting to the point where we can have an impact on the average persons life.
As for the 1000 genomes project, it was funded with government money (I think mostly the NIH, although the UK may have been involved too) therefore the data is free and open. The data was generated using illumina sequencers.
Having spent my entire career in biotech startups (mostly digital pathology and diagnostics) I can tell you that you are seriously mistaken. It does not cost anywhere near "billions of dollars" to develop, say, a diagnostic. We get by with ~10-30m funding rounds, perhaps 2-3 rounds. Not sure where you are getting your (mis-)information from. Of course, if you're looking to develop a new drug... yeah, that costs a boatload of money, but that's hardly the only area of biotech.
If you think that biotech = pharma, you're about 2 decades behind. Biotech = fabrics, materials, health, food, chemicals, etc.
Perfumes, flavors, spider silk, biosensors, glowing plants, etc. are all biotechnology that require the one thing cheaper than software on this planet - dirt. They copy code orders of magnitude cheaper than bandwidth - water & sugar & light.
The billion dollar tools developed by big pharma now are running in the thousands of dollars, and there are no shortage of million dollar problems.
They are sitting on a treasure trove of medical and genetic data. And they have begun to monetize this data, which I believe was their endgame all along.
Yes, you're absolutely right, and YC and other SV funders really have no clue what they're doing. It's a boon for biotech startups because the relevant VCs are very puckered up right now when it comes to biotech/pharma.
> the relevant VCs are very puckered up right now when it comes to biotech/pharma.
There are some great posts on the LifeSciVC blog on this topic (and I highly recommend reading all the posts on there for anyone interested in biotech startups):
> Why is biotech startup supply so constrained? First, there aren’t dozens of breakthrough biomedical ideas created every day; while substrate for startups is very rich, figuring out which are likely translate successfully into high impact medicines diminishes the viable number of big, attractive ideas quickly. Second, there are very few biotech venture investors still active today, and fewer still that are focused on early stage company creation. Third, and of critical importance, it’s not easy to start biotech companies, and in most cases requires entrepreneurs with decades of apprenticeship inside larger R&D organizations – navigating the drug discovery and early development process requires experience well beyond simply advanced degrees (MD/PhD).
> The nature of the problems and people involved are very different [between tech and biotech]: Internet-enabled Tech startups launch products on tiny amounts of capital, led by Lean Startup Ninja’s and 22-year old soon-to-be-billionaires, these companies can iterate rapidly around things I don’t understand, minimally viable products, and real-time market feedback...Compare that to Biotech. We are trying to manage the challenge of science-based businesses: biology is full of “unknown unknowns”, drug R&D has long and unforgiving timelines, we face very high project attrition rates, we have to work in a highly regulated environment, capital intensity is typically higher, etc… The people involved are also different: the typical senior team has some grey hair and often collectively has 100+ years of experience in (or biases from) drug R&D.
Life science VCs see themselves and their industry as very different from the tech industry.
As a biologist with over a decade of experience in areas relevant to these startups, I appreciate the movement into biotech, but I'm unimpressed with the actual products.
While everyone might poo-poo academia, it would take little effort to find 100s of projects at universities across the world that are better versions of these projects.
As much as YC dominates software applications, they are woefully inferior in biotech/biomedical applications.
I'm a YC founder (current batch; Shift Labs) and also a tenured full professor at an R1 university. I've got a pretty good view from both sides of this fence. I've spent over 20 years as a faculty member at research universities, produced PhD students, raised millions in grant money, written dozens of articles, yadda yadda yadda.
Universities are really great for many things. They are even really great at commercializing some kinds of technologies. But they are not great for all things, even all things related to bio or tech transfer. Sometimes crazy bets are the only way breakthroughs happen, and generally academia cultivates incremental more than transformational.
I started my company because I wanted to make affordable medical devices. The incentive systems for both med device companies and university commercialization offices are almost completely misaligned with building a business model that works for affordable medical devices.
So I went the entrepreneurial route.
Being in academic research is not the same thing as building a company. They're not the same skill sets, or even the same language. Lots of academics become technical advisers to startups built around their research. That's not the same thing as building a company. YC is about building a company.
I wrote about being a med device company in YC here: http://bit.ly/1LlmZjk, but I think really what I was writing about was being a researcher learning to build a startup.
This may just be a result of their maturity. The YC companies may seem "not very good" because they're closer to market and practical application.
When it comes to research, particularly in academia, it's much farther from market. This makes it much easier to expound on the broad possibilities. News headlines have a bad habit of doing this (think fusion and carbon nano-tubes).
I actually agree. Exactly the same is true for most software coming out of YC. But that's not bad at all: the point of YC is not to do cutting-edge research—although a few companies do—but to execute and take a product to market. It's a vital part of an idea's development, but at a later stage than academic research.
University projects are incredibly valuable, but only the rare exception produces something commercially viable much less supported and marketed enough to be relevant to consumers. Even in CS, an academic field with disproportionately strong industry ties, projects like this a rare exception (see how venerated Spark is); it's even rarer in other fields.
This is a different sort of work than raw R&D, but it's still difficult and relevant—just in a different way. I completely sympathize with not being interested in it, but that says more about you (and often me) than it does about YC.
If anything, the role YC plays is actually more important in biotech than in software because creating, deploying, marketing and supporting a software project is an easier problem with more existing support outside of YC. Software takes less resources, has less risks and has more buy-in from funding sources and other parts of the community than biotech. (At least, and especially, in SV.)
But, unless you're excited by an accessible version of something specific, none of this is going to be particularly relevant to you. Not only is this perfectly fine, but it bodes remembering for people in the startup community who tend to get so enamored with and immersed in what they're doing that they forget that it is not universal.
Yea I mean look at Airbnb. It is, (in software jargon) a "crud" app. Virtually any software project you could care to choose in academia today is more advanced than airbnb's tech.
While I appreciate what you are saying, I think this statement is not really accurate if you look at the facts. I would not say "virtually any" because there are numerous academic projects that are now abandoned and whose creators consider a failure. So, semantically, "some" might be a better word in the place of "virtually any". In any case, I think you are underestimating how complex Airbnb's tech is. They have tons of banking regulations that they have to follow because of their payments and to think that their tech is "crud" is just a testament to how well they make the complex seem easy.
YC is telling us that there may be a lot of value in batching and accelerating these types of products/companies. Maybe we should start a biotech focused accelerator (as opposed to software) that turns post-doc chemists/biologists (as opposed to software engineers) into rockstar founders.
Something like this is already being done. Indiebio just launched in SF and they are doing great work at bringing in pot-doc chemists and biochemists and de-risking their academic work and turning them companies.
Disclaimer, my company Pembient is in the first class.
There are already many well-established biotech accelerators/incubators in Boston (Lab Central, PureTech Ventures, Third Rock Ventures, Flagship Ventures, Atlas Venture, etc.), Seattle (Accelerator Corporation; also in NYC), NYC (Harlem Biospace), and San Diego/Montreal/Vancouver (Inception Sciences).
I want to take issue with "it would take little effort to find 100s of projects at universities across the world that are better versions of these projects", both as a trained biologist (neurobiology), current postdoc, and former entrepreneur.
I share your intuition, I really do. I even said similar things in grad school (and still do, sometimes). But the reality is that:
1. These are not supposed to be projects, they are supposed to be companies creating products. The gulf between "Nature paper" and "something someone will buy" is incredibly long and arduous. Plus, these are VC-backed, meaning there's an expectation of timeline (short) and return (high). These aren't "take $20m from darpa and engage in another four years of R&D" type endeavors. So while they might look trivial scientifically (although I do not think that they do), they have to be working sooner rather than later.
2. "Better versions" is also a tough thing to assess. The people involved matter a lot -- thus even technically superior solutions from very smart people might still not be "better versions". I know many grad students who are much more knowledgable than some of the top data scientists, who nonetheless would fall on their faces if they tried to do a data science startup. Similar for life sciences and biotech.
I think the people who poo-poo academia are largely setting up strawmen -- even Peter Thiel (whose first VC firm, Founders Fund, backed both of my startups) admits that there's a substantial role for government and academic activity in enabling long-term technical innovation.
As biologists, we know just how hard it is to make _anything_ work in this space. Most new drugs fail, most clinical trials fail, most pathways end up being hard to target, etc. etc. Often building a company in the biotech space is like trying to build a microprocessor company where we're still not entirely sure "how the silicon works".
The challenge for YC and other VCs is to identify technologies that are "almost there", and help turn them into companies and products. That's very hard, and I'm not really even sure that we (as academics) are any good at it either.
Will some of them fail? Sure. Will some of them leave the startup scene and maybe go back and do a postdoc or work for an industrial research lab or do another startup, much wiser? Of course. But that hardly seems like a horrible outcome, especially if the scientists learn a lot along the way.
If these biotech and hard-science startups fail, backed by the best startup accelerator on earth, then the effect will be a hard-science investment winter. So there is more at stake than you let on.
It's unfortunate that people are downvoting you since outside criticism is a lot more useful than a thread full of people cheering on YCombinator. (Unless you're a troll, as suggested by your user name.) Still, your comment would be more helpful if you were a bit more specific.
Could you point to a few of the University projects you're referring to? I think we'd especially want to know if they require similar levels of investment, since cheap long-shot approaches compliment, rather than are made obsolete by, expensive traditional approaches. (If you think cheaper approaches are hopeless, maybe you could expand.)
We started our company out of the Stanford Biodesign fellowship and are part of the current YC batch. We are making an implantable medical device - the old school kind with no software involved.
Medical device innovation is broken. Companies developing devices like ours are taking 10 years and $100M to see revenue, and most people in the industry consider this time and cost inevitable. For that reason, investment in the space has plummeted. ROIs suck. The thing is though that it's not inevitable. The space is ripe for smarter and more efficient ways to bring products to market. This process innovation is not coming from academia, nor will it ever. Academics just doesn't think that way, and they're categorically not good at commercialization. This new thinking is coming from independent startups that embrace a hacker mentality and reject conventional wisdom. As we all know, that's very similar to the ethos of YC.
Stanford Biodesign has a stellar track record of producing medtech winners, and that's because its process works. The advice we've heard from the YC partners in the program has aligned very well with the advice we heard from the top forward-thinking entrepreneurs in the industry at Biodesign. They get it. YC partners may not understand the intricacies of healthcare as well as industry veterans, but it doesn't need to. They understand how to build a great company regardless of vertical. YC brings in top founders from industry, who already have the necessary expertise and connections, and encourages them to think big and think differently. I don't see how that's not a winning formula. Yes, healthcare is different, but it's similar to other typical YC verticals in more ways than you think.
Haploid genetics[1] is just one example of a technology that is doing real, far reaching stuff in human genetics (sorry, SNPs). There's numerous companies being developed from discoveries using this technology.
I love YC (and huge props to you personally for all the amazing things you've contributed, I'm very honored to be speaking with you), but in talking to many colleagues, the money involved $100K or the hype machine involved in YC just doesn't move the needle in biology. So, you're unlikely to get any real players interested.
I guess it depends on what YC is trying to do. You have to remember a lot of investors shy away from biotech due to the huge capital investments that need to be made for new drugs or devices.
What I've noticed with the latest YC biotech start-ups is they tend to be much more focused on ideas that don't require a huge amount of capital (diagnostic platforms, biofuels, etc).
Not saying it's a bad idea, just interesting to see biases - and wonder how we overcome them.