The Nēsos Journey

 

Mayfield’s commitment to Conscious Capital guides us to partner with entrepreneurs who are focused on improving human and planetary health. Today, I am proud to welcome Konstantinos Alataris and his team from Nēsos to the Mayfield family. We salute their efforts to apply neuroscience through a consumer-friendly, non-invasive device to treat diseases of inflammation, which are the primary or significant contributor for over half the deaths in our world today.

Nēsos, using purpose-built earbuds that retrain neural pathways to control inflammation, defines an all-new category of e-mmunotherapeutics. Through its novel approach, Nēsos offers the first non-invasive, drug-free  treatment option for a range of auto-immune and neurological conditions. There has been a lot of excitement surrounding the next generation of neuro-devices like Neuralink which have to be implanted in people. While we applaud those efforts, we feel they will remain limited in application to only small groups of patients. In contrast, Nēsos’ consumer-friendly devices have the power to make a difference in the lives of hundreds of millions of patients within the next 5 years, much like what Livongo is able to do for diabetes.

Existing treatments for auto-immune conditions, such as Humira for Rheumatoid Arthritis (RA), are the highest revenue drugs of all time. However, these drugs often cause debilitating side effects and leave patients’ immune systems highly compromised and susceptible to infections including COVID-19. Nēsos has demonstrated in pilot human clinical trials that its platform can potentially offer comparable treatment efficacy to drugs like Humira, without the side effect profile. The results of these trials have been presented in key medical conferences and will soon be published in a leading peer-reviewed medical journal.

A Personal Interest Leads to A Serial Entrepreneur

I have always been fascinated with the brain and frustrated by how long it has taken to translate research findings into new treatments. The brain is different from other organs, in that it is highly protected by the blood brain barrier and is in a state of constant evolution, in response to new electrical signals from the senses and nerves. The human brain is also very different from the brains of animals. The result is that for diseases like Alzheimers, clinical trials take 10 years and over $200M, while having a very high failure rate.

Starting a couple of years ago, I had been investigating neuroplasticity targeting therapies and was looking for an entrepreneur who understood the science but could also build a company with a fast iteration business model. The only successful startup which had leveraged the science of how the brain works for therapeutics was Nevro (NYSE:NVRO), where as founder and CEO, Konstantinos led the development and commercialization of Senza, a market-leading, implantable neuromodulator for the treatment of chronic pain. He knew that there was a lot of potential in neuroplasticity control, and was convinced that a mainstream, consumer-led approach, supported by science, would make the broadest impact.  I was delighted by our interactions, as I could see that Konstantinos had the passion and pedigree to build a movement and lead a company. We decided to partner and led the Series A for the company in the spring of 2019.

A Science Breakthrough Gets Industry Acceptance

Inflammation is a vital part of the immune system’s response to injury and infection, but chronic inflammation is at the root of auto-immune, neurological, and neurodegenerative disorders. Current treatment methods require systemic drug delivery, risking adverse side effects from broad immunosuppression.

E-mmunotherapeutics are research-derived, targeted, electrical field sequences to retrain the brain pathways that control inflammation. Nēsos’ e-mmunotherapeutics are delivered by purpose-designed earbuds, leveraging existing nerve pathways (the auricular vagus nerve) to reach the target brain regions.  A mobile app connects to the ear piece and a cloud service tracks the treatment and connects to the patient’s doctor/insurance company.  Nēsos’ breakthrough approach is already being recognized by the industry with the results of their clinical study having just been accepted for publication in a peer-reviewed journal. Nēsos is also critically supported by close clinical and scientific collaborators from top academic institutions, including Stanford, Vall d’Hebron, Harvard, Mount Sinai, Feinstein Institute, University Of California, San Diego (UCSD), and the University Of California, San Francisco (UCSF), among others.

Experience Counts

As a serial entrepreneur and experienced leader, Konstantinos has made tremendous progress since founding the company. The first product — aimed at treating Rheumatoid Arthritis — recently completed its multicenter, single-arm, 30-patient feasibility clinical trial. The data, which show a meaningful reduction in RA disease severity, were first presented at the Annual European Congress of Rheumatology. Additional data will be presented at the upcoming American College of Rheumatology. The platform is also in clinical trials for two other disease conditions. These three products could help treat diseases afflicting more than 25 million patients in the US alone. In addition, Konstantinos has rounded out his team with co-founder Vivek Sharma, who led product at Nevro and brings experience from St. Jude and Boston Scientific; Gary Heit, Chief Scientist, Founder/Director of Functional Neurosurgery at Stanford School of Medicine; and a team of early world-class employees.

There is a joy to being a founding investor in companies, working side-by-side with the team at the inception stage. Some recent examples of engineering biology entrepreneurs we have partnered with include Trevor, Janice, and Lucas with the guidance of Jennifer Doudna at Mammoth Biosciences and Jason, Diego, Leo and Jeff at Endpoint Health. We are excited to begin the next phase of the journey with Konstantinos and the Nēsos team and look forward to working with them to improve hundreds of millions of lives.

Engineering Biology: Five Silver Linings from 2020

Mayfield Engineering Biology

 

We all know that 2020 was a very challenging year on the human and planetary health front.  While we would not wish to go through this collective experience again, as we go into 2021, with hopeful signs of a vaccine to control Covid, here are five silver linings for entrepreneurs looking to build lasting engineering biology companies.

Leaders who Unleash Innovation are Being Heralded

Jennifer Doudna, who discovered CRISPR, and co-founded Mammoth Biosciences to build a platform company around it was awarded the Nobel Prize in Chemistry.  She joins a small group of academic legends (George Church, Steve Quake) who are able to translate scientific discoveries into companies by nurturing the scientist-entrepreneurs who work on them.

The Pace of Healthcare Innovation Will Remain Accelerated

A lasting legacy of Covid is an acceleration of healthcare innovation pace & velocity of solutions. Engineering biology played a key role to get us to treatment faster – CRISPR-based tests from Mammoth Biosciences & others, vaccines from Pfizer, Moderna and AstraZeneca, and monoclonal antibodies from Regeneron & Eli Lilly. By digitizing biology, delivering applications and platforms, and investing in biomanufacturing, we are closing the engineering biology innovation loop.  This accelerated pace from bench to bedside will result in precision treatments for disease areas that have not made progress in a long time.

Policymakers are Nurturing Innovation

The Supreme Court has signaled the survival of ACA. The FDA has approved treatments at a speed that was unthinkable till recently. The FDA has also heralded a new age in the use of Real World Evidence as part of new treatment development that is accelerating time to market and reducing costs.

Telehealth Delivered the Amazon Moment for the Industry

Remote living propelled the growth of telehealth services. As proven, repeatable business models such as subscriptions became mainstream, investors became bullish in supporting digital health companies.

Engineering Biology will Reinvent Trillion Dollar Industries

With food as the vanguard, scores of entrepreneurs are targeting other industries like fashion, construction, biomanufacturing, brain health, and more to use biology to reinvent industries, while improving human and planetary health.

Endpoint Health: Partnering with Founders Building the Precision Medicine Platform to Save Millions of Lives

Sepsis and Acute Respiratory Distress Syndrome (ARDS) are big and silent killers – they are #1 cause of deaths in hospitals and account for over 10M deaths a year.  However, while there have been significant advances in applying precision medicine to treat cancer by looking at mutations and applying personalized therapeutics, treatment for sepsis and ARDS care has been stuck where cancer was in the 1980’s: with guessing games and one size fits all treatments. The fact that most of the COVID-19 deaths are a result of Sepsis and ARDS, has brought collective focus on this woeful state of affairs. Moreover, the bundled payments model of Medicare threatens the viability of many hospitals due to the high costs of treating these complications while having bad outcomes.

Enter Jason, Diego, Leo, and Jeff – the founders of Endpoint Health which debuts today.  When I first met them in 2018, I was intrigued by the statement that they planned to reinvent a company like Roche to build a new kind of precision medicine company for acute care.  They intended to combine the biology-driven therapeutics of companies like Genentech & Amgen, the therapy-targeting diagnostic approach of Foundation Medicine, and the cloud and data leverage of Flatiron Health (3 out of 4 companies acquired by Roche) to provide doctors with the ability to save lives of patients that develop critical illnesses. Endpoint is thus taking many of the precision medicine approaches pioneered in oncology to the fast paced ICU environment where the course of treatment over a few hours can determine life or death.

Most investors are skeptical of healthcare platform companies that are not focused on a specific drug or device. However, Mayfield has a long history of spotting and investing in new categories  that create big companies including Genentech, Amgen, Intuitive Surgical, Millennium Pharma and others. Starting about five years ago, we have been making investments across the engineering biology innovation loop, a new way of looking at today’s landscape. This loop lays out how data unleashed by rapid advances in digitizing biology and the development of precision low-cost bioengineering platforms, when paired with cloud and AI advances, enables fast development of applications including new therapeutics and diagnostics. Endpoint is building a true therapeutic platform that embodies the increased innovation velocity of this loop which combines the best of cloud/ML on patient information to guide treatment, advances in next-gen sequencing (NGS) and digitization of biology for its next gen diagnostics, and precision approaches for new therapeutics. They join some of our existing investments including CRISPR pioneer Mammoth Biosciences, single cell sequencing provider Mission Bio, and AI-based hospital operations platform Qventus.

As people-first investors, we respond positively to a bold vision but then wonder if the founders can pull it off.  The answer in this case was a resounding yes. This team of repeat founders had known each other for more than a decade – Jason, Leo, and Diego had started GeneWEAVE at the bottom of the great recession and later sold it to Roche where they got valuable experience interacting with their global customers. They are mission oriented, self aware, and frugal, with a collaborative DNA tuned to building an ecosystem of partners.  They bring complementary skills – Jason is a great product CEO who is in touch with customer needs; Diego is a deep science guy who has built multidisciplinary research teams from scratch; Leo has led large AI workbench teams to translate research into products; and Jeff is a world-class enterprise-grade software engineer.  Together they have ushered products from ideas to FDA approval.
We led their Series A in January 2019, initially housed the team in our offices, and collaborated closely as they evolved their business plan. By leveraging the hospital system leaders in our health innovator network, we have been able to support Endpoint to test and refine their model. These leaders have confirmed the real and urgent need for their platform which helps understand the various forms of the underlying disease, with a framework of precision therapy clinical trials, and a decision guidance system that works fast (hours with sepsis vs months for cancer). As their name Endpoint connotes, they are focused on delivering outcomes to medical professionals who only have minutes or hours to make decisions that can make a significant impact on reducing the #1 cause of deaths in hospitals. We are honored to be their partners on this journey and welcome them to the Mayfield family.

Originally published on LinkedIn.

The Rancher Journey

Rancher, the computing everywhere platform leader, today joined forces with SUSE, the global open source, software-defined infrastructure company, making this a landmark cloud native transaction. Today Rancher is the most widely-adopted enterprise Kubernetes platform, with 100M downloads, and 30K active deployments across 300 global enterprise customers from Disney to Fidelity Investments to Verizon and beyond. Rancher has been an exceptionally well run and capital efficient while remaining one of the fastest growing mid-stage software companies. The company consistently beat revenue targets for sixteen quarters in a row. Developers and ITOps professionals love the product for its ability to elevate them from individual contributors to strategic leaders. The founding team has worked together for a decade and were united in delivering on their mission of giving customers the freedom to compute everywhere – from the data center, to the cloud, to the edge, and beyond. As I reflect on our 5+year journey with Sheng, Shannon and the rest of the Rancher team, here are some learnings that come
to mind.

It’s always about the people

I have known Rancher CEO Sheng Liang since 2009.  He was the founder of Cloud.com, a peer company of the one I led, StorSimple, both of which went on to become successful first-generation cloud infrastructure companies.  After StorSimple was acquired by Microsoft to become a key part of the Azure offering, I joined Mayfield, which had been one of my investors, in 2013. In the fall of 2014, Sheng came by to share the vision for his new company, then called Granite Systems. I pulled out a concept deck on the future of computing everywhere that I had been working on, and we came to a complete mind meld on what the industry needed.  We believed this would be a nextgen computing platform which would allow users to deploy applications on public and private clouds, on the edge and on iOT devices. He had already assembled the founding team with the key leaders from Cloud.com – Shannon Williams, Darren Shepherd and Will Chan – and we were honored to co-lead their Series A.

Culture has to be built into the founding DNA of companies

Sheng is one of the smartest but also the most humble person I know and that was the culture he built at Rancher. He is also a very transparent, intellectually honest leader which allowed us to have drama-free conversations in and out of the boardroom.  Their culture of listening extended to their community, even leading Rancher to make the tough decision to kill their darling – a beloved but closed product – in favor of embracing Kubernetes, the open source standard. The company was able to attract amazing talent at all levels and had one of the lowest attrition rates in the industry.

It takes products, not hype, to build companies

As containers replaced VMs for the cloud age, there were many players claiming to solve customer problems. Rancher quietly focused on building delightful products, developing a community-first, bottoms-up adoption strategy, a sustainable and scalable business model focused initially on usage over revenue; and worked with an ecosystem of partners to build key components. They also stayed true to the open source model, rather than adopting a hybrid open source/closed product model.  All this served them well, and they soon found their go to market motion.

Pivots take the courage of conviction

While early stage companies have to always be nimble and adaptable, Rancher definitely had its share of challenges. They switched from Docker to Kubernetes, from a services to a SaaS recurring revenue model, and from Kubernetes distribution to Kubernetes management.  Despite all these changes, by staying close to the pulse of the community, they built a strong fan following and user retention. Their product-led GTM delivered capital efficiency and allowed them to beat and exceed their forecasts for sixteen quarters in a row.

Success is never accidental

This is one of my core beliefs and the journey with Rancher has proved that.  They built a culture of  intellectual honesty as well as continuous learning, prioritized teamwork, developed a collaborative dynamic with all their partners and investors, and always kept their customer needs front and center. They innovated beyond the feature sheet to ensure that their technology solved customer problems. They took their learnings from leading a company during the 2008 downturn to stay focused on their true north.  Along the way, they took advantage of all the ways investors can amplify the impact of companies – getting early feedback on their value proposition from our CXO network, joining a CEO coach cohort of our companies, participating in our storytelling workshops, and working with me on many strategy sessions outside of the board meetings.   One of the most rewarding phases was to work closely with them as they went from start-up to scale-up, and to help them evaluate their options to join forces with a larger company. With the acquisition by SUSE, a global open source leader, Rancher now provides customers an accelerated path to digital transformation and a way to seamlessly innovate across their business from the edge to the core to the cloud.

As people first investors, we look forward to watching them continue to elevate the community of developers and ITOps professionals worldwide. Please join me in congratulating Sheng, Shannon and the entire team on the next phase of their journey.

Originally published on LinkedIn.

The Secrets Behind Built-to-Last Companies

Two men sitting in chairs talking

 

Mayfield has a fifty year history of partnering with entrepreneurs who built iconic companies such as Genentech, Amgen, Millenium Pharmaceuticals and Intuitive Surgical.  Starting in the 90s, a lot of biotech investing moved into a model of  creating companies which built assets for other people to buy. We believe that the existing challenges of our healthcare system are not addressed when amazing companies get merged into larger companies. It’s only when we have the next generation of companies that can do things 10x or 100x better, own their commercial paths, reinvent significant parts of the ecosystem, and even do things with newer business models, that can we actually make a big impact.

In the past decade, we have seen a resurgence of the appetite to create built-to-last companies.  One of the great examples of that is Moderna, a next generation life sciences leader founded in 2011 and at the vanguard of creating a vaccine for COVID 19, which leveraged the trend of engineering biology to create a platform company.

In December 2019, I chatted with Stephane Bancel, Moderna’s founding CEO, in preparation for his participation in our Health Innovator Summit alongside the JPM conference.  He reflected on the key drivers that enabled Moderna to grow into a stand-alone leader. Here are the key takeaways from our conversation.

Building a platform company has to be part of the founding DNA:

The founding team and I very quickly agreed that it made no sense to be a one-drug company.  You cannot know if and when you can get a single molecule to work. Whereas with a platform, you can scan and you can move your investment in science, you can move the investment to manufacturing, to really build the business.  We believed that it was never going to be zero or lots of drugs. We were never worried about not having enough drugs. We always worried about, how do you learn, how do you de-risk, how do you find things, how do you get expertise.

This approach profoundly shaped company strategy, how we managed risk, our culture, and the kinds of investors we partnered with. A company with a long-term view has to manage a product portfolio (we have 20 ongoing projects with the government right now), and be willing to deal with multiple technologies for different products. It has to have patient investors, which we did by staying private for eight years, as that let us pick our investors. It has to have a built-to-last versus a build-to-sell culture. It follows a strategy of maximizing the shots on goal vs going after the drug for the largest opportunity, and mitigating risk to prove the platform out.

Balance biology risk with technology risk:

One of the most difficult things is to balance technology risk and biology risk, because if you try something with a new technology and with new biology and it fails, you will have no idea if it failed because the biology was incorrect or because the technology was not ready. And since our technology was so new, we decided not to be too cute to think we knew what application would work best. So we did six different applications, and chose to start with the one with the lowest biology risk. That way if it failed, we could be 100% certain it was because of the technology.

This led us to focus our first product on the flu, where there’s very little money to be made. In fact, many people in the biotech industry called us names. But we weren’t solving for the drug. We were solving for our platform. Because if we could get one drug to the finish line, we would be able to create thousands of other drugs.

Partnering is key to your success:

The right time to partner is basically as soon as you can partner, because how much of the initial assets you own doesn’t really matter, as you are proving the platform out. Partnering helps with validation as well as fundraising. We spent a lot of time thinking of risk, value sharing and getting validation. We have always tried to work with partners when they can help us by funding new technology discovery in new technology applications. That’s why Novartis is funding all our work in the lab. And the other example where we partner is when the biology risk is very high. AZ is running a phase two, injecting mRNA in people’s hearts, hoping to grow brand-new blood vessels in their heart after a heart transplant. We got a quarter billion dollar of cash up front. That was a lot of cash, because I had at that time, $20 million capital. So that was massive for the company, and the quality of the science we could do, and the shots on goal and so on.

You can do that if you believe you have a problem of abundance. But if you have one drug, you might make a mistake selling the company 10 cents on the dollar if it’s wrong. But if you believe you have a golden goose called a platform and you’re going to make thousands and thousands of eggs over the years, you are okay to mess up the pricing of one egg. The egg allows you the capital, the capabilities, the validation of our partner, to take risks that you would not want to take with your own capital.

Staying private can be an advantage:

Besides the benefit of picking investors who align with your vision,  staying private can also help you fulfill your destiny.  For example, CRISPR companies that went public very early on in their life cycle have faced a challenge. If you’re only doing science, people are looking at the science very closely. They are asking – You are investing too much in the science, I want to see drugs. By staying private for eight years or seven years, and being very clear with investors of the type of company we’re going to build helped us. I told people, – I’m not rushing to the clinic. I want to de-risk. I want to build the science. I want to build IP, because I’m playing the long game. I want to own a special market space. So if you want a quick drug in a clinic, don’t invest. This is the company we’re going to build. So staying private was the key strategy I think that got us to where we are today. If we went public within the first two years as a quick clinical company, it would have been a very different company when I look back today.

Three Post-Pandemic Areas of Opportunity in Digital Health & Genomics

As we all know, our world changed starting about 90 days ago. I salute the leaders who are working on saving lives and livelihoods and front-line workers who are keeping us safe and healthy. We are hoping that scientists, healthcare leaders, and small and large technology companies can help us innovate our way out of this crisis. Over the last decade, the Mayfield digital health and genomics investing team has partnered with over a dozen entrepreneurs, who join iconic founders of our companies from prior decades such as Genentech, Amgen, Millennium Pharmaceuticals, Heartstream and Intuitive Surgical. We typically join forces with entrepreneurs who are at the idea stage and work closely to help them build companies that last.  

I believe that the pandemic has only increased the urgency of investing in innovative ideas in digital health, healthIT and genomics, including the role of biology as technology to improve human and planetary health. Here are three areas of opportunity for entrepreneurs to leverage behavior trends, scientific breakthroughs, and innovative business models to build big companies.

At-Home Experiences for Physical and Mental Health Will See Exponential Growth: Entrepreneurs who are building consumer offerings will need to meet their users where they are (at home or on their mobile devices) with delightful products and friction-free onboarding.  The growth of Peloton vs the decline of gyms, the obsession with Nintendo’s Animal Crossing, and meditation apps such as Calm going mainstream are good examples of this trend.  In our own portfolio, Tonal, a home strength training system and TRIPP, a VR-powered mindfulness and resilience building experience, have seen increased adoption over the last 90 days.

Hospitals Will Need to Leverage Technology to Deliver Better Outcomes: We have seen how hospitals are under siege with PPE shortages and limited beds to treat patients.  While software has taken over on the input side (with EMR systems such as EPIC), there is still a huge gap in using technology to automate patient flow for better resource planning.  One of our companies, Qventus, built a scenario planner for hospitals that uses AI to predict usage for COVID-19 patients.  Another which is still in stealth mode is bringing precision medicine with genomics based diagnostics, machine learning and new treatments for complications like sepsis and acute respiratory distress that is the top cause of death in hospitals including most fatalities from Covid-19.

Scientific Breakthroughs Will Accelerate the Public Health Response: For life to get back to normal, we know we need a vaccine.  A great example of a leader using cutting-edge science is Moderna whose mRNA-based vaccine candidate has been fast-tracked by the FDA.  The urgent need for rapid testing exposed the limits of the PCR model which requires laboratory settings and specialized supplies.  Our company Mammoth Biosciences has leveraged CRISPR technology to deliver a test that is as easy to administer as an at-home pregnancy test, uses off-the-shelf reagents and disposable strips, and can deliver a result in 45 minutes. 

There will be many examples of innovative start-ups that will leverage these trends and others to grow into the giants of the post-pandemic age.  However, building a platform company is fundamentally different from a build-to-sell value proposition.  A good example is Moderna, where the founding team decided early on that they would not be a one drug company.  This approach profoundly shaped company strategy, how they managed risk, their culture, and the kinds of investors they partnered with. A company with a long-term view has to manage a product portfolio, and be willing to deal with multiple technologies for different products. It has to have patient investors, which Moderna did by staying private for eight years, as that let them pick investors who were aligned with their views. By following a strategy of maximizing the shots on goal vs going after the drug for the largest opportunity, and mitigating risk to prove the platform out, today they are our best hope for a vaccine and a way out of the pandemic.

Portfolio Spotlight: Mammoth Biosciences

Mammoth Biosciences team

In 2018, Mayfield partnered with Trevor Martin, Janice Chen, Lucas Harrington and Jennifer Doudna on their mission to build a new-age CRISPR company by leading the Series A investment. Their vision was to transform human health with fast innovation to support the entire ecosystem in the “Intel Inside” business model. In the last six months, the company has demonstrated exceptional execution in the realization of that vision. Here are some of the big milestones the company has achieved in 2020:

Mammoth extended its CRISPR platform to next generation of gene editing CRISPR proteins and entered into an agreement to power Horizon Discovery’s cell and gene therapy manufacturing efforts.

Mammoth developed the industry’s first clinical CRISPR product with its COVID-19 lab test created with UCSF. The test demonstrated unprecedented sensitivity and accuracy with the results of the same published in Nature Biotechnology.

GlaxoSmithKline’s (GSK) consumer health unit has tied up with Mammoth to bring to market a clinical-grade CRISPR-enabled consumer self-test for COVID-19. This is a major milestone for CRISPR diagnostics in taking them mainstream.

Engineering Biology Company Building

This interview was originally published by VSC.

A conversation with Ursheet Parikh of Mayfield

In this edition of M*A*S*H* (Marketing Advice for Startups in Healthcare) we’re speaking with Ursheet Parikh, Partner at Mayfield Fund. Prior to joining Mayfield in 2013, he was a co-founder & CEO of StorSimple and then a GM at Microsoft. Ursheet holds an MBA from the Wharton School and a Bachelor’s in Computer Science from the Indian Institute of Technology in Mumbai, from which he received the Young Alumni Achiever award in 2015. We sat down with Ursheet to get his thoughts on investing, what he looks for in a founder, the impact marketing can have on a healthcare startup, and much more.

Tell us about your journey to becoming an investor:

I came to Silicon Valley because I believed that if you wanted to change the world, you did it with a company. And this was a place where your ideas could be funded, no matter how crazy they were — as long as you could execute them.

I was a part of several companies that failed before joining a team that was acquired by Cisco, where I was able to build a business from concept to $100M. Then around 2008, I went on to co-found StorSimple as the CEO, which was acquired by Microsoft. That was one of the first cloud acquisitions in the early days of cloud computing, and it became a significant amount of Azure’s revenue at the time.

After that, I tried to figure out what I was going to do with the rest of my life. I loved the full product life cycle, and I felt I was ready to move from being the quarterback to being the coach, helping others realize their ideas. So I started investing in core deep-tech enterprise IT, and over time I felt there was an opportunity to fundamentally impact healthcare and engineering biology. I didn’t know much about healthcare then, so it’s been a five-year learning journey, with an amazing set of people in this ecosystem.

You have to believe that you can out-execute competition, and will need the confidence to communicate your vision to the world so the best talent and investors in the world can find you.

That seems like a big break from enterprise to healthcare. What was driving that evolution?

For many people who dedicate themselves to working in healthcare, you’ll find there is a personal experience driving their decision.

I had developed some health complications back in 2013, and the healthcare system was treating me like one of a million cases. That experience got me thinking about the intractable problems faced by the health system, and it became clear that computational biology would have a massive impact there, apart from AI. That same year, I found myself at Mayfield, one of the seminal birth funds of biotech with companies like Genentech, Amgen, Applied Biosystems, and others.

It was also the biggest entrepreneurial opportunity of all time.

In the 70s and 80s, entrepreneurs and investors were building companies to last – not to be acquired. By the 90s, the advent of the PC and the internet had accelerated innovation. At the same time, biotech investing became about outsourced R&D and build-to-sell.

In the past decade, the digitization of biology has created another digital transformation of healthcare. The cost to sequence biology, for example, has gone from $1B per person to $1K per person and is tracking to $100. All of this newly quantifiable biological information can now be applied to cloud technology, machine learning, and so on.

In parallel, the biology space itself has developed an incredible set of engineering technologies in the past eight years. CRISPR editing, DNA printing, biomanufacturing, and cell engineering have become powerful building blocks. Suddenly, to start a biotech company, you no longer need $10M. With $100k, you can lease out a bench in an accelerator and be in business.

2019 was a seminal year for this shift. Impossible Foods has brought engineering biology to planetary health and the food supply chain. Adaptive Bio and 10x Genomics are building platform biology companies for human health.

It has become clear that investing in these companies needs to follow the built-to-last model. These products need to solve tough problems and change lives, they need to find a way of building a scalable commercial model to bring the business to hundreds of millions in revenue for >10 years, and they need to start a movement to enable change in an ecosystem.

So it seems like there’s a shift here, with two different strategies to build a company in the space: One where M&A is the key exit, and another which takes a page out of the enterprise Silicon Valley playbook.

I’d say one approach is to build a fantastic technology or product, and sell the company. The second is to start with some great technology, then build a sustainable business, where either a consumer or another business has to pay you for your invention.

The latter is a relatively new thing in the bio ecosystem, and it’s really come of age in the last six to eight years. You’ll see funds like Mayfield or Andreesen or Khosla creating very focused, targeted deep practices for building companies in this way.

It’s only in 2019 that you started seeing sizable exits emerge around this new approach to engineering biology. It’s pretty clear that most classic tech firms are also investing in some way, shape, or form because it’s a wave that people don’t want to miss due to the sheer size of the opportunity. But the volume of exits in this newer model is still minuscule compared to those from the traditional built-to-sell model, in terms of dollar amount.

But it’s never too early to start applying a marketing mindset to category leadership, building a movement, and attracting amazing people to your company. If you want to create a company that’s going to excel, you need to excel at communications as well.

Do you think having so many new sources of venture capital in the biotech ecosystem is good or bad for the industry?

When I look at the traditional biotech investing model – funds like Third Rock, Arch, and Atlas Ventures – these firms have done a phenomenal job and are by far the best venture incubators out there for outsourced R&D and creating returns.

Companies that started in these venture incubators have actually created drugs in the market, and the top tier investors have created returns for their LPs as well. That approach is working well, with several $10 billion acquisitions, and that is attracting a whole new flood of investors that want in.

However, when you have different types of investors in an ecosystem, it’s essential that you bring on the right stakeholders, those that will align with your mission and goals for the duration. On the one hand, you have a set of funds that are looking to exit in three to five years. On the other, you’re looking at a seven to ten-year relationship, but are expecting to create a multibillion-dollar company. If you’re not aligned on the time commitment, you won’t have the right decision-making dynamic, and you won’t have the right prioritization.

When we’ve worked together, what has stood out to me is that you bring a marketing mindset to managing your companies. What is your passion for the value of storytelling and how is it reflected in the advice you give to your companies?

If you’re building a technology to sell as an asset, you don’t need to care as much about marketing. But, if you’re trying to build a platform company in a category, you need to make sure you’re building the best IP, assembling the best team, attracting the best investors, and selling the best product. To achieve that, you can’t also be a best-kept secret.

You have to believe that you can out-execute competition, and will need the confidence to communicate your vision to the world so the best talent and investors in the world can find you.

One of the questions that every entrepreneur needs to consider as they’re building a built-to-last or standalone company is, “what is the category of company we’re creating, and are we emerging as a leader in this category?” That’s where marketing comes in. Done right, it will create non-linear outcomes.

Ninety-eight percent of the time, when it comes to product marketing, a scientist or an engineer will do a better job than most marketers out there. But when you find the top 1% marketeer, they’ll put your company in a non-linear zone and create acceleration.

It takes a lot of money to grow in this world, and storytelling is a powerful tool to attract investors. How do you help founders think about how much to budget for marketing?

You need to start by getting the core of your offering right. Once you have that, I find that most companies underinvest in marketing and sales. That is because the people who build new products and companies don’t often come from a marketing background. They’re scientists, engineers, and technical managers, who don’t have a natural tendency to beat their chests.

But it’s never too early to start applying a marketing mindset to category leadership, building a movement, and attracting amazing people to your company. If you want to create a company that’s going to excel, you need to excel at communications as well.

To build a great company, you should find what you’re going to be great at, then find people who are going to be great at everything else. So instead of hiring your 30th scientist or engineer, founders may want to consider who is the right marketing partner. Ninety-eight percent of the time, when it comes to product marketing, a scientist or an engineer will do a better job than most marketers out there. But when you find the top 1% marketeer, they’ll put your company in a non-linear zone and create acceleration.

Mayfield has a track record of working with second- and third-time founders. How do you determine the importance of a founder with experience versus first-time founders, which historically have great outcomes of their own.

Two-thirds of the investments we make are with first-time founders, and one-third are repeat founders. There is no fixed formula, but there are entrepreneurial characteristics that define a successful leader.

Being a continuous learner is critical. Even if someone sold their last company for $10B – if they feel that they know it all, they’re probably not going to be an amazing founder.

If someone’s a first-time founder, there’s not a long track record that we can evaluate. So when I’m looking at a founder, I want to assess if they’re able to create a movement compelling enough to convince the best people to be advisors, board members, etc. Are they solving a hard problem, with a hard to replicate solution? Is the science already proven out and it’s now about building the product? Are they committed to understanding who their user is, and how they’re going to address an essential need? Are they demonstrating an understanding of what it takes to get paid through a complex ecosystem? What are their core values driving them to build the company?

In a given year, we’ll meet with hundreds of companies for every one investment, so this is not a transaction – it’s a 7-10 year relationship. A lot of first-time founders will only talk to investors when they need to raise capital. A good time to talk to a series-A investor is actually right after raising a seed round — this will help you understand what we’ll be looking for at the A.

A good time to talk to a series-A investor is actually right after raising a seed round — this will help you understand what we’ll be looking for at the A.

We’re in the business of influence – trying to help our companies best position themselves. What influences you? What does your consumption diet look like?

I learn from entrepreneurs. Every day, I believe that the people walking in the door are smart, motivated, and focused. The highest learning happens when I’m engaged in conversations with other amazingly smart people.

Besides entrepreneurs, we have a health innovator network that has >500 people in the health / biopharma space, which we can call on for advice. I do a lot of one-on-ones with other investors and academics and participate in board meetings. I truly feel blessed to be in a place where the more I learn, the less I know, because I’m always talking to someone who’s expanding my horizon.

In terms of social networking, I have a LinkedIn profile, and that’s it. My Twitter account is dead as a doorknob, and I can’t remember the last time I logged in to Facebook.

What are the problems that you think need to be solved through a startup?

Any version of a problem I can think of, an entrepreneur is working to solve that problem. Company building is hard, and over the last several years, there has been so much capital available that I feel the experience creating built-to-last companies has diminished. That, to me, is the biggest bottleneck from inspiration to impact.

Do you think there are lasting companies that will emerge from solving the COVID challenge?

COVID is a wave. If you can ride the wave, it can be awesome for you. Otherwise, it will be a tsunami.

There’s a lot of COVID-washing going on right now in the ecosystem. I’m optimistic that 24 months from now, we’ll have a handle on this epidemic, so a company expressly created for that will probably not be a lasting company. There is a subset of companies already running that have core ingredients that will see significant uplift from the accelerated approval paths and refocusing on infectious diseases.

The lasting impact will really be the behavioral change among consumers and institutions. There’s no reason that telehealth shouldn’t have been the first path to healthcare before this – but there wasn’t the momentum. There’s no reason that diagnostic technologies should have required the same long road to market as therapeutics. Now, accelerated approval paths are changing the fundamental economics of building a diagnostics company.

Innovators Accelerating Delivery of COVID-19 Solutions

We hope that you are and your loved ones are staying healthy and wish you the best as we collectively work to get to the other side of this crisis.

When we assembled as a gathering of innovators in January for the inaugural Mayfield-AWS Health Innovator Summit in what seems like a lifetime ago, we knew that accelerating healthcare innovation was critical to saving lives. The key takeaways of the event are summarized in this newly published eBook.

Over the last month, several leaders from this Innovator network have spearheaded inspiring response efforts on COVID-19.  Below is a short summary of some of the initiatives:

Our closing speaker James Madara, CEO @ American Medical Association was passionate in his assertion that doctors need to take a more active public role. We are glad that so many doctors have become leaders directing our nation’s response in this crisis and trusted sources for the public.

The COVID-19 crisis has brought unprecedented urgency to the role of healthcare leaders in keeping us safe and healthy. We salute the innovators and healthcare professionals who are working so hard today and deeply appreciate their contribution.

Enabling the Next Generation of CRISPR Products

Mammoth-Bio_Series-B_UP-Blog

For the past seven years, CRISPR has been the fastest-growing and hottest area of research in translational science. The gene-editing technology is best known for its scissor-like ability to cut DNA and replace bits of genetic material, which holds massive potential for treating common diseases, genetic disorders, and even cancer.

While other companies have been focused on the protein Cas9 and its applications for therapeutics, Mammoth Biosciences is more interested in discovering novel proteins and characterizing new applications for CRISPR. Mammoth was the first to invent the field of CRISPR diagnostics, leveraging the search function of CRISPR to create an affordable, accurate and rapid diagnostic test for the point of care. Additionally, Mammoth’s co-founders discovered the Cas14 family of proteins, the smallest CRISPR proteins to date that work similarly to a word processor and whose ultra small size enables accurate delivery to make precise repairs — opening enormous opportunity to develop in-vivo therapies.

For current proof of this point, the company announced today that it is extending its CRISPR-based platform to build the next-generation of CRISPR tools for gene editing, therapeutics, and beyond.

Mammoth’s mission is to enable the use of thousands of CRISPR-based products. To make this happen, Mammoth is partnering closely with other biotech companies to power its product development efforts. One of those partners, Horizon Discovery, currently builds its next generation bioproduction products using Mammoth’s CRISPR applications platform.

In the coming years, Mammoth expects to power hundreds of other biotech companies’ CRISPR-based products, similar to the “Intel Inside” model. The potential is enormous, especially when compared to other companies that strictly use CRISPR for their own clinical products. It’s similar to how personal computing companies such as Intel and Microsoft democratized information technology, which was previously dominated by vertical companies, with platforms such as the PC and the Cloud that could be used by developers to build new applications. By democratizing access to its CRISPR platform, Mammoth has the potential to accelerate new product development for the biotech industry.

An example of how Mammoth accelerates product development for the biotech industry is a recent partnership with Dr. Charles Chiu, MD, PhD, an infectious disease expert at UCSF, where Mammoth will help create a prototype of a rapid molecular test for coronavirus (2019-nCoV) which can quickly, and with a high degree of certainty, distinguish 2019-nCoV from all other infectious diseases. The “point-of-care” diagnostic technology will enable clinicians to identify patients wherever they are – whether at the emergency department at a community hospital, or at the airport.

That’s why we at Mayfield are delighted to continue our investment in Mammoth and welcome new investing partners such as Decheng and Verily on this journey. Their support is a testament to the promise Mammoth has delivered on since the beginning. Mammoth boasts of an all-star team, including Ph.D. researchers from Stanford and Berkeley led by co-founder and CRISPR pioneer Jennifer Doudna, and leading entrepreneurs and scientists leaders on its board, including Grail CEO Jeff Huber and new advisory board member Stanford University School of Medicine Dean Lloyd Minor. Mammoth’s team, tech, and advisors place it in the best position to drive the biotech field forward.

Mammoth is one of the fastest-growing engineering biology startups in California. We continue to be excited about Mammoth’s development of next-generation CRISPR tools and how it will enable the biotech industry at large.

Originally published on LinkedIn.