Good morning Daily readers. I have a special treat for you. We’ve got an opening essay from none other than Bryan Roberts, the visionary Venrock VC who just happens to be one of Fortune’s 34 Leaders Who Are Changing Healthcare. Here’s what he has to say:
Hey folks, Bryan Roberts from Venrock here. Cliff was kind enough to offer me the privilege of a guest post in today’s newsletter. So here is the question I want to explore: In our ecosystem, whether as a leader in a start-up, or as an investor or board member, is experience more often enabling or constraining?
People often talk about their knowledge and experience as being an invaluable asset—many call it “pattern recognition.” The TL:DR version here is that, for most decisions truly crucial to company/investment success, the application of pattern recognition is a red herring; and often it is derived from intellectual laziness that takes root once someone has success. For the most impactful decisions, it is crucial not to apply some model but to accept the ambiguity that comes with doing new things, and to undertake the hard thinking from first principles required to construct the best path forward. Maybe that will lead to the same conclusion as prior experience, but most often not.
To be clear, tackling questions for which there are not knowable “correct” answers is both really uncomfortable and a very regular occurrence. Sure, there are places where there is no need to reinvent the wheel, and some are important—approaches to HR for example—but every really successful company across the start-up landscape succeeds because it did something fundamentally new for the first time. It starts with the idea. Disruption doesn’t come in the form of +1 improvements; it comes when you decide to do something others believe is either impossible or silly. Often there have been previous failures in the space, but you believe it could work this time because of people, timing, technology or whatnot. Based on those prior failures to solve that same problem or serve that perceived market need, blindly applied pattern recognition would tell you to stay home. Maybe one should stay home, but then again, Illumina [a Venrock investment] was a follower of Affymetrix, which purportedly had dominant IP.
Misapplied pattern recognition continues to offer temptation incessantly throughout the course of building a company—and at every turn, people provide strongly voiced opinions as to the “right” path. With every problem or challenge, you have to recognize the uniqueness of each situation and invest the time to get to the best solution, even in the face of all this input and too many things to accomplish in any day.
Every time a startup succeeds with a new business model or technology platform, we see a flood of “me too” companies—the model du jour. For sure, there are many ways to skin a cat; the first entrant may not have found the best way and therefore isn’t always the winner. Tech has lots of these examples (Google v. Yahoo; Facebook v. MySpace), and on the healthcare side, Lipitor was the fifth statin to market while becoming far and away the most successful.
On the other hand, the model du jour is often another case of pattern recognition doing you a disservice. Think of the “Uber for X” craze of 2014-15. In oncology, for example, molecular diagnostics now has a multitude of entrants struggling to differentiate and capture share. (And the same is true of the software packages for DNA sequencing/genomics.).
Our ecosystem is about thinking differently and forging your own path. Pretty much the exact opposite of following patterns. And it is hard. Really hard. But so awesome when it works.
Bryan Roberts is a partner at Venrock. He invests actively in the healthcare sector and has ownership positions in some of the companies he mentions above.
|Clifton Leaf, Editor in Chief, FORTUNE|
RapidSOS nabs $14 million to give 9-1-1 a tech boost. Digital health startup RapidSOS has raised $14 million in a funding round led by Highland Capital Partners and backed by a slew of former FCC chairmen, as well as Motorola and Triple A. The company has a smartphone app and API that can be used by consumers and local, state, and federal law enforcement and first responder units that makes it unnecessary to have to actually call 911 in the event of an emergency. Former FCC chairman Tom Wheeler heaped praise on the company’s efforts in a statement. “I spent much of my career as Chairman of the FCC working to strengthen public safety and make improvements to our nation’s 911 system,” he said. “I am thrilled to have the opportunity to work directly with RapidSOS as they deploy their emergency platform to enhance the data available to 911 and first responder systems nationwide.” (MobiHealthNews)
Glaxo’s new CEO isn’t going to break up the company. New GlaxoSmithKline chief Emma Walmsley has a message for the chorus of critics who have been urging the company to split up its trifecta of business units: we’re staying the course. Walmsley said the firm still believes a three-legged structure that includes pharmaceuticals, vaccines, and consumer health is the safest bet in an often volatile industry. “We like to have more certainty in terms of reliable cash flows both from vaccines and consumer health,” she said during Glaxo’s first quarter earnings call Wednesday. This probably isn’t a huge surprise: after all, Walmsley headed up GSK’s consumer health business before being tapped to replace former chief executive Sir Andrew Witty.
The Amgen/Sandoz biosimilars case heads to the Supreme Court. On Wednesday, the Supreme Court heard arguments in a case with major ramifications for the biopharma industry: Sandoz v. Amgen, which centers on “biosimilar” drugs that mimic pricey biologic medicines. Amgen has argued that Sandoz (the generic medicines unit of pharma giant Novartis) and other biosimilar makers must wait an additional six months (on top of the 12 years’ exclusivity already granted to biologics) before selling copycats. And some of the Justices’ statements weren’t exactly reassuring. “We are being asked to interpret very technical provisions that I find somewhat ambiguous and I’m operating in a field I know nothing about,” said Justice Stephen Breyer. “But it’s going to have huge implications for the future.”
THE BIG PICTURE
An Obamacare bill that could pass the House may not be long for the world in the Senate. There’s been a flurry of activity in the Obamacare replacement front in the past week. A new compromise struck with the hardline House Freedom Caucus appears to have won over the support of many of its members; however, even if that support is enough to push it over the finish line in the House (which is still far from a sure thing), it’s likely to take a beating in the Senate since new proposals would push the legislation farther to the right, alienating moderate Republicans. And even some of the staunchest Obamacare opponents in the Senate—including Kentucky Sen. Rand Paul—still aren’t all that pleased with provisions that would use taxpayer money to fund coverage or subsidies. (Politico)
WEF’s radical new health care project brings together an all-star crew of medical leaders. The World Economic Forum is launching an ambitious new project to bring a value-based model to health care—and it has the backing of some of the world’s biggest medical names, including the CEOs of Medtronic, Novartis, Kaiser Permanente, and thought leaders like Harvard Business School’s Michael Porter. Fortune got an early look at the radical initiative and spoke with some of the key players backing it, including Novartis chief Joe Jimenez. Check out my full report here. (Fortune)
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|Produced by Sy Mukherjee|
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