The Virtuous Cycle: Innovation and Investment
One reason why ALPHA10X is uniquely positioned to connect investors with promising start-ups in the life sciences is because of the intellectual capital we have accumulated. Our team includes experts, not just in finance and AI, but also in the pioneering life sciences fields in which we invest.
Long known as one of the premier hubs for innovation and company creation in the world, the Bay Area brings together the key ingredients for success: cutting-edge research talent housed in the nation’s top biomedical institutions, successful companies with serial entrepreneurs, and knowledgeable investors who provide working capital to take scientific discoveries from the bench-to-bedside. In today’s connected, globalized world, geography is no longer a constraint; however, there are several enduring principles that will continue to drive innovation in the life sciences.
Curiosity
Zora Neale Hurston has this great quote that really embodies science and experimentation : "Research is formalized curiosity. It’s poking and prying with a purpose." At ALPHA10X, we believe that behind every great discovery and every transformative innovation are people that are deeply curious....they are constantly asking ‘Why? How? What happens if...?’ and they never rest until they have the answers. And since each line of investigation almost invariably opens a new one, the quest for understanding is a lifelong journey for these explorers and pioneers. There are many stops along the way, some of which are victories and others defeats, and often the path is winding. Fortunately, academic and research institutions are dedicated to supporting discovery and exploration despite its unpredictable nature, and unsurprisingly this is where many groundbreaking findings occur.
Another key facet of curiosity is asking the question ‘How can we make / do it better?’ The willingness to challenge the status quo or improve upon what has come before is a critical ingredient for innovation, especially in a commercial setting: in Silicon Valley, the ‘hacker’ mentality, also known as ‘out-of-the-box' thinking, has been the driver of many success stories in tech and biotech.
Collaboration
It definitely takes a village to nurture a great idea into a transformative medicine or product in the life sciences, as the road is long and arduous. From the laboratory environments that are often the seeding ground of the foundational science or technology, to tech transfer offices and entrepreneurial education programs at research institutions, to the government and philanthropic funding agencies, to the professional investors in venture funds and corporate innovation arms – all of these stakeholders are a necessary part of the ecosystem that supports new ideas and startups, and they work together to enable great things.
Furthermore, success requires collaboration between people with different skill sets: scientific and technical founders are rarely able to take something forward on their own, and benefit greatly from the expertise of long-time operators, investors, and business people who have a complementary perspective. Alternatively, innovation happens by cross-pollination of established approaches taken from one industry or discipline and applied to a new one. Since everyone is coming with a different background, they often are speaking in seemingly different languages, which can sometimes cause confusion and impede progress. A collaborative mindset is absolutely necessary to patiently tease apart the important issues, and to align on a productive solution.
Concentration
Velocity is speed with direction, and this is a critical operating tenet for startups. With really cool, high-potential technologies or platforms, it can be hard to pick which thing to go after first. However, it’s important to concentrate on what matters, to prioritize and make sure that you can create and show value as early as possible. People sometimes talk about ‘failing fast’, which is another way of getting to the root of things: in science, it’s about designing the right experiment that will give you important information about what to do next, regardless of the outcome. In business, it can mean going out to the market with a product to see whether it gains traction (or not) with your customers. Either way, it’s important to ask the hard questions up front and in a systematic way, so that you can find the path forward.
On a more personal level, it’s about figuring out what is important to you as an individual and focusing on that. There will be challenges and difficult times when things just aren’t working. I’ve been really fortunate in my life to have worked with some incredible people, and a common feature is that they are all driven by a greater cause: sometimes it’s the thirst for knowledge, and especially in the biomedical sciences, it’s often a deep desire to make people’s lives better through life-saving treatments.
Capital
The final ingredient for success is investment. Obviously, people need to invest their time and effort in order to innovate, but another crucial investment is that of capital: without financial resources to make things happen, great potential is nothing more than great ideas. However, when capital is applied, these ideas become a reality, which then is the seeding ground for even more innovative ideas.
It’s important to call out the nuance, though. It’s not particularly efficient to spread money around indiscriminately: while some great outcomes have resulted from the ‘spray-and-pray' method investment, thoughtful deployment of capital to the teams, technologies, and businesses that have the greatest likelihood of success is the strategy that will yield the greatest returns. For the unassisted human mind, it’s not easy to predict when and where these outcomes will occur given the sheer complexity of the world in which we live and the vast amounts of information (some good, some bad) that’s out there. But here’s the good news: the data is out there, and the tools for sorting and mining have reached a level of maturity and sophistication that provide actual knowledge about where the meaningful outliers are. We’ve reached a significant inflection point in the development of AI where we are starting to see its immense value in directing capital, where it is likely to have the greatest impact. And for me, it’s really exciting and invigorating to be able to find these opportunities, perhaps in historically overlooked corners, that can change the world for the better. ALPHA10X offers us a unique opportunity to make a difference.
