@February 19, 2023
Lesson 0: TechBio is a movement, not a method.
It’s hard to describe what a TechBio company literally is. People can give great examples, but I haven’t found a persuasive, literal definition yet (despite looking). There are some traits common to TechBio companies but it’s hard to offer a specific litmus test or cutoff line
Defining a field tightly can miss the point of its existence. What matters about TechBio is not quite what it is, but what it is achieving and impacting.
As a result of these lessons, I’ve come to view TechBio as less of a specific company-building method, but more of a movement. This movement, composed of entrepreneurs, scientists, investors, and others, is inspired to apply tremendous advancements in technology to imposing challenges in biology and health.
Don’t focus on what components make a TechBio company; focus on what changes the TechBio movement catalyzes.
Lesson 1: TechBio investors seek to empower founder-led startups.
Investors are a crucial part of the TechBio movement.
There’s a lot of money flowing into techbio companies. These new funds are emerging to back talented, ambitious founders insufficiently incentivized or supported by the prevailing model of biotechnology entrepreneurship. This prevailing model is thought to be insular, equity-hoarding, and overly concentrated in Kendall Square.
I didn’t realize how much of this movement was premised on the notion that there are founders out there waiting to be supported, educated, and empowered. I always thought the challenge was the price tag and the difficulty of the science.
New investors like Elliot Hershberg and Zach Weinberg are betting that with declining experimental costs, new pools of founders will emerge. That’s (part of) why they are actively funding and supporting the TechBio movement.
Lesson 2: Computational advances are necessary, but insufficient.
The problem in biotech is not computation. It's the bio. It’s the same in health tech; the issue isn’t tech, it’s how healthcare works as an industry.
Technology is a necessary but insufficient method of changing the ways industries work.
We’ve seen a wave of early companies in TechBio that promised results based purely on their application of technology to existing paradigms of biology. These companies have impressive results, but not sustaining business models or moats.
On some level, AlphaFold is an example of this dynamic. Of course, the AlphaFold team never set out to build a business. They sought to solve a narrow, difficult challenge and overwhelmingly succeeded. However, a chorus of voices clamorously assumed that the entire biotech industry was on the verge of immediate change and disruption. Evidence of this disruption has yet to emerge.
Future TechBio companies will have an opinionated perspective on biology that they manifest with technology.
Future Lessons To Process
- Proteomics is the most exciting area of TechBio innovation.
- Synthetic biology advances have catalyzed TechBio (more than I expected). The ability to seamlessly buy experimental components has fueled considerable innovation.
- TechBio company construction is still hard. There are no templates for managing timelines, capital, and customers in the TechBio that mirror what is available in the SaaS world or the health services world. The “comps” don’t exist.