Software is eating biotech
Long before software VCs ruled Silicon Valley, there was biotech. It was the money, back in the 80s. But today, when it comes to startups, biotech seems 10 to 15 years behind the software community…
SPC member Nish Bhat sees this as an opportunity. Earlier this year, he helped launch the Sci-Founder Fellowship, a program creating a new startup culture for the next generation of entrepreneurial scientists.
Nish is a co-founder of Color Genomics, which builds the technology and infrastructure for large-scale genetic testing initiatives. He left Color last year and joined South Park Commons to think through his next steps. Last week, he sat down with fellow SPC members to share his hypotheses — and hopes — for the new fellowship.
Sci-Founder is establishing a peer community for early-stage founders with backgrounds in biotech and the biological sciences. Through the program, fellows will build relationships and validate their ideas, benefiting from access to contract lab services and physical space. They will also receive pre-seed investment and mentoring from the Sci-Founder team.
Nish hopes this effort will democratize “insider” knowledge about how biotech startups work (which is mostly locked up inside venture studios).
The Sci-Founder team is intentionally following the West coast model for startups: one that is founder-driven, relying on the founding team to adapt its core technology to fit the market. This iterative approach is amenable to problems with platform-based solutions, like Color. It works as well for computational drug discovery (e.g. the enterprise SaaS built by Atomwise) and lab automation (e.g. the cloud robotics startup Strateos).
To some extent, this is in contrast with the East coast model for biotech innovation, which relies heavily on monitoring academic research, identifying labs with interesting intellectual assets, and recruiting lab members to form new companies. This venture studio approach — prominent in places like Cambridge, MA — works nicely for projects that are well-validated scientifically, and have a direct path to commercialization (typically with acquisition as an exit). But it also requires VCs with expertise in clinical trials and regulatory operations.
This is how software eats biotech.
From Silicon Valley’s perspective, founder-driven companies that build platforms are more likely to grow quickly. They generate products that continuously evolve — either by finding the right market puzzle to be solved, or by modifying the underlying tech to solve users’ problems. Sci-Founder is looking for founding teams with strong convictions about how the technology should be designed. It’s not enough to have the technical skills to translate a scientific discovery into a commercial product.
We asked Nish what the first batch of Sci-Founder fellows will be working on. While applications are still under review, he mentioned new variants of immunotherapies and viral-based treatments for cancer. But more important than the idea is the approach to product-market fit. Biotech is like any area of innovation: its goal is to solve problems for people. As a founder, you can read hundreds of journal articles and design elegant systems — but you can’t start solving problems until you talk to technicians in a lab, or connect with the patients in need of a diagnosis. In some cases, you may need to embed in a biotech company, or talk to people who are embedded, to learn about the non-obvious challenges people face.
Nish also mentioned that the Sci-Founder fellowship will look for founders with a shared history of working together. The ideal founding team is a scientist with deep domain knowledge (and accompanying lab skills) working alongside a startup-oriented software engineer. Nish thinks that people from these worlds don’t meet enough. At the same time, he doesn’t want to run a co-founder dating service. Some incubator programs try to pair people with non-overlapping skills, but the match-making approach doesn’t work systematically. And when co-founders have no history of working together, their relationships can fall apart under stress.
So what are the success factors for Sci-Founder? Nish and his co-founders will learn these as they go. Part of the adventure is discovering and defining the key milestones for founder-driven biotech startups. Just as Y Combinator has helped standardize (and democratize) metrics for software startups, Sci-Founder will evaluate biotech ventures as they move through each stage, characterizing the milestones reached with each round of growth. They plan to share these learnings widely across the community.
To learn more about the Sci-Founder Fellowship, or to apply, visit https://sci-founder.com/
And to learn about other innovative startup fellowships at SPC, visit https://medium.com/south-park-commons
