Startups with platform technologies and infrastructure solutions
An investment thesis focused on composable and extensible innovations
We support innovative biotech and healthtech startups at the earliest stages. Our investment scope focuses on life sciences companies with platform technologies and infrastructure solutions. We believe that there is significant opportunity for our syndicate to make a considerable and durable impact on societal progress by investing in early-stage startups. Moreover, we care about supporting brilliant and kind founders that can advance mankind and build fantastic work cultures. Apply to join our investment syndicate and help support incredible founders and their startups! Read our related notes about community building in biotech venture, biotech venture models, and due diligence in biotech investments.
We will make a societal difference by syndicating high-conviction investments in impactful startups and supporting their incredible founders. We have accumulated extensive relationships through our professional network and organized meetups and plan to fully leverage our social capital to push forth our portfolio companies. We will take founders on virtual and in-person roadshows and help them secure follow-on financing, build teams, strategize, and win deals.
Highlights and takeaways
Exciting and impactful biotech and healthtech startups come in many forms, but we are especially enthusiastic about startups with platform technologies or infrastructure solutions. In the lens of systems design, we believe that the most valuable technologies are those with composability and extensibility. In consideration of these fundamental attributes, startups with composable and extensible innovations can realize significant commercial and societal value as they scale.
The most promising founders are those who are brilliant and kind, in addition to being mission-oriented. To run and grow a resource-limited startup, founders need to be versatile and capable of working with employees across numerous functions. They also need to be able to effectively recruit and retain talented employees. In order to achieve success, founders need to be smart and enjoyable to work with as they assemble the team and push forward.
Architectures of exciting and impactful biotech and healthtech startups
We are excited about early-stage startups with innovative platform technologies or infrastructure solutions. Such startups can create value through generating multiple therapeutic assets or offering a suite of products or services. Moreover, their continued growth is increasingly durable because they can continue to snowball and accumulate more assets, products, and services. Exemplary companies include Genentech, Moderna, Illumina, Benchling, Epic Systems, Teladoc Health, Hims & Hers, etc. Genentech made significant advances in molecular cloning and demonstrated the possibility of expressing human proteins in bacterial hosts. Moderna proved that synthetic mRNA transcripts could be designed as effective vaccines, and incredibly accelerated its clinical development during the COVID-19 pandemic (see this Ergo Bio Insights post). Illumina established a repertoire of instruments for genotyping and sequencing, which have become essential in conducting genomics research. Benchling built a cloud-based informatics platform through comprehensive offerings of digital notebooks, inventory, and design tools. There has been remarkable and rapid adoption of products and services from Illumina and Benchling by academia and industry. Epic developed software for electronic medical records and leveraged this to construct interoperable clinical databases for innumerable hospitals. Teladoc created a virtual platform for on-demand, remote patient care and enabled significant access to a variety of clinical consultations. Hims & Hers created an online pharmacy to sell prescription and over-the-counter drugs, which has greatly increased access to medicines for sexual health, mental health, skin care, hair care, etc. Each of these companies achieved remarkable success and became trendsetters, igniting great enthusiasm in both founders and investors to build and fund startups that follow-on in their wake.
We like to evaluate companies through the perspective of systems design, especially because we love to dig deep and diligence technologies thoroughly. We aim to understand how technologies work and how they can be used effectively. Emerging from these efforts was the recognition of (at least) two fundamental attributes. The best technologies tend to have composability and extensibility. Composability is the capacity for a system to have modular components that can be assembled in a variety of ways. Extensibility is the capacity for a system to accumulate new functions and features, whether by addition or modification. An innovation which is composable and extensible can be readily used for robust value creation. For example, Genentech’s molecular cloning was composable and extensible in the sense that synthetic genes could be placed and rearranged in a plasmid, then used to express a multiplicity of non-host proteins. This led to immense value creation, such as treating diabetic patients with human insulin instead of less tolerable, sometimes deadly animal insulin. Genentech created an impressive and unprecedented partnership with Eli Lilly to manufacture human insulin at scale, which effectively launched the biotech industry and established how business development with big pharma could be done. Similar thought exercises about composability and extensibility can be done for the innovations made possible by Moderna, Illumina, Benchling, Epic, Teladoc, Hims & Hers, etc.
Hallmarks of a promising founder
In addition to thorough technical diligence, we also care a lot about founder attributes. Namely, we look for brilliance and kindness and truly believe that these are the hallmarks of a promising founder. Startups are inherently resource-limited and thus require a team of incredibly talented individuals. The founders need to be smart enough to work with each team member across many different functions. They need to be able to translate findings and improvements across different team members and be effective in driving organizational growth. The founders also need adequately high emotional intelligence to build teams and retain employees. Attrition must be well managed since startups tend to have difficulty in establishing redundant positions (remember, startups have limited resources). Efficient startups are those with minimal turnover.
We believe kind founders have an easier time building teams and retaining employees. Kindness positions their startup to succeed. Some may disagree and say that other successful founders appear to be ruthless and difficult to work with. We argue that these founders likely experienced success despite, not because of, harboring non-ideal attributes. Furthermore, we wish to build a world in which kind founders can be supported in building startups with great work cultures. We are deeply inspired by the late Tony Hsieh and his manic focus on meaning and happiness in the workplace (read this Harvard Business Review note).
Author information
Ergo Bio closely follows innovation in the biotechnology space and evaluates interesting drugs and deals. It is run by Vandon T Duong (LinkedIn), feel free to connect! I am a biotech enthusiast and a molecular engineer by training. I am also an avid consumer of news and research around precision medicine.
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Disclaimer
This article serves informational purposes only and should be treated strictly as educational material, not as investment recommendation or legal advice. The information presented may be inaccurate or out-of-date. The contributing authors and editors disclaim liability for any errors or omissions. Any opinions expressed may change without notice. Ergo Bio LLC reserves all rights to the content generated through this resource hub (Ergo Bio Insights).