Our biotech investments are currently all too young for something huge like an IPO, but many are continuing to grow and prosper. For example, Ginkgo just raised a $45M Series B: http://techcrunch.com/2015/07/23/ginkgo-bioworks-takes-on-zy...
Synthetic biology is super interesting, and maybe that is the right space for YC to play in, but it's not the needle mover that the tech crowd thinks it is going to be. Trying to understand the mechanisms of GNRH receptors and developing lead candidates that could be potential therapies is just not as sexy as synthetic biology. Would you fund something in that space?
But this is where my head just starts spinning
"I'm going to help our biotech startups find the partners and tools they need to make wetware at software-like speeds."
That's not going to happen. It's not how biology works in a lot of others, and you lose a lot of credibility when you say that. Unfortunately, a lot of founders say that as well. I forget the name of the company, but there was a recent algorithms startup that made it sound like they were (a) going to change pharma with their methods, and (b) what they were doing was new and unique. None of which was true.
YC (and others) can do a lot here, but I feel you go in without really understanding the space or the pitfalls. A lot of biotech fails not because of the business model, but because biology hard, the human body is unreliable and illogical, and because our understanding of the science is flawed.
I'll get off my soapbox now :-)
That said,these problems must be solved. Which is why over the last thousand or so years, we have built a system of universities, public donations, and taxation, so these problems are addressed by right people.
Here's the relevant thread: https://news.ycombinator.com/item?id=9924807
Biological engineering can and should be a thing separate for biological sciences.
You do not always need to understand biology to be able to hack with it; it's robust that way. Maybe biology can't breakout the way software has, but on the off chance that it could, it's worth having a lot of people trying to figure out how.
Biotech startups are fundamentally different in that they're driven by scientific advances, which is exactly what life scientists in academia are trying to produce.
It's definitely not now. The thing holding back biotech isn't business model innovation, it's technical difficulties - what the scientists are tackling. You can't compare semiconductor innovation to biological research - one system was man-made to be as reliable and robust as possible, whereas the other one is still largely utterly incomprehensible.
My sense is that the vast majority of people on HN touting rapid advances in biology have never actually spent any time reading up on the scientific literature, and haven't spent any time doing life science research. The same goes for most of the YC partners, which has led to their selecting companies that often have fatal flaws that are immediately apparent to anyone with life sciences expertise.
That said, great research projects do not necessarily translate into great startups. People doing fundamental research with no clear path to market likely aren't a great fit for the program at this time.
In biotech, once the technology has been developed, the innovative component has largely been completed. And it's the top scientists that have the institutional knowledge and non-dilutive funding to make that happen. The reason there are so many unmet needs in healthcare isn't for lack of trying or a lack of original thought in the top academic research labs - you can be sure that Bob Langer isn't just trying to up his h-index.
That said, you are right that a recent graduate won't be able to found a company in that model. That's mostly irrelevant though, since recent graduates are rarely capable of creating scientific breakthroughs on their own.
Except for the minor problem that any IP generated through their work is owned by the university. And if the IP's valuable, it typically flows straight into the hands of Flagship, Polaris, Third Rock, & co. The professor might have a say in what happens to the IP, but the students and postdocs have zero leverage with the TTO. And how could they? They are replaceable cogs in the machine (and often in the US on a student/work visa) - Bob Langer is not.
And my original point was that Paul Buchheit's request that "If you know great scientists solving important problems, please encourage them to apply" was unrealistic. YC isn't going to get the crème de la crème of scientists or scientific innovations - they're getting what's discarded by the TTOs.
To be more precise, nobody's going to get the top scientists (they're going to go right back to their labs) and the biotech VCs are going to get the top innovations (for which they often have an informal licensing option with the inventing professor before the academic research even begins). There's a record amount of funding in biotech right now, but why spread it evenly? Might as well just run dozens of trials in parallel for therapies derived from a single technology.
Some Universities don't automatically claim ownership of any IP you create there.
There are some aspects of biology that likely translate better to the tech model. But for most aspects, especially anything to do with therapeutics, it is essentially impossible to avoid the hard slog. No software is going to change how you study efficacy and toxicity in animal models and human testing. With more targeted therapies the complexity only goes up.
I think YC should invest in the life sciences, but it should be a different model, perhaps an innovation on the existing tech transfer model, perhaps building an incubator that ends up being an IP funnel for pharma, or to provide some competition in an underserved area, but the software mindset is generally going to fail.
This is spot-on. The "quickly move to market" approach of the typical VC simply does not work here.
Good science -- in which I include money-making science -- takes time. There's a lot more fiddling involved, as we can't manipulate the system at all levels.
>I'll get off my soapbox now :-)
Please stay on it. It's refreshing.
You reference Gingko, but that company is (in my opinion) uniquely viable in terms of YC biotech investments.
Of course, my perspective is based on media reports (famously unreliable), by public information, and by my own experience in biotech. I would love to be completely wrong, and I could easily be completely wrong since I don't have access to the information that you do. Also, maybe an outside perspective is what is needed in biotech—good things happen when smart people from other disciplines cross-pollenate. Also, my own startup is not yet successful, so I criticize from within a lovely glass house surrounded by stones. That said, based on what is public, I don't have confidence in YC's biotech investments. I am hesitant to even consider applying, given with what is publicly available.
I don't think this is an appropriate forum to be specific with criticisms, nor do I wish to be a "negative Nancy" with YC's new push—if YC could do a fraction of what it did in software in the biotech area, it'd be amazing. I would however like to offer one particular outsider's perspective.
Maybe this is exactly why you should apply :-)
> You reference Gingko, but that company is (in my opinion) uniquely viable in terms of YC biotech investments.
Remember VC economics and the power-law distribution of returns. One big winner pays for a lot of small losing bets.
The calculus is actually quite different in biotech. With proper scientific due diligence (read: late-stage cherry-picking), there are usually more (but smaller) winners and fewer (but larger) losers in biotech than in tech. The absolute number of winners may still be smaller than the number of losers, but there isn't a tech-style power-law phenomenon. This is partly because the needs are often very well understood in the life sciences, so the size of the opportunity isn't that uncertain. It's whether or not the science will pan out that is uncertain (which can be very costly to find out and with little recourse - you can't easily pivot on a therapeutic, particularly if that happens late in clinical trials).
I'm surprised YC is investing in wet science rather than computational life sciences such as cognitive neuroscience, or even bioinformatics.