Insights for biotech founders from a leading voice in genomics commercialization
What’s in a fancy startup C-suite title? The answer from luminaries is: “nothing if the startup fails.” In the first Genome Startup Day of 2021, Phase Genomics’ Founder and CEO Ivan Liachko, PhD, sat down with Mostafa Ronaghi, PhD, Senior VP for Entrepreneurial Development for illumina (retired), founder of multiple companies, and longtime champion of genomics commercialization. In the fireside chat, Dr. Ronaghi spoke of how startup founders should not focus as heavily on their and others professional titles and instead focus more on taking care of their growing team and getting the important work done.
“In order to get the right team, you really need to be generous and have the right people driving the right function. The startup is not about the title… everybody is doing whatever they can,” Dr. Ronaghi said. “So, I announce myself as CJO, I’m the Chief Janitorial Officer, and if you want to, you can give me a title. But the title doesn’t have any value. I mean, you are basically a CEO of a one-man company or a two-man, three-man company, so that doesn’t mean anything. You are there to do something.” (view video clip at 11:39)
Dr. Ronaghi also addressed his thoughts on what newly founded startups (view video clip at 15:04) should aim to optimize first (hint: it’s not revenue). Watch the full fireside chat or read the entire transcript below the video.
Transcription:
| S2: 02:19 | [Ivan Liachko] Hello, everyone. Thanks for coming to another installment of Genome Startup Day. As you can see from my outfit, we’re about to do a fireside chat. We’re very fortunate today we have with us Dr. Mostafa Ronaghi from, well, I was going to say from Illumina, which is largely true. And Mostafa, starting at 2008, he was the Chief Technology Officer and also Senior VP at Illumina. Before that, he was at the Stanford Genome Technology Center. He also founded a number of companies. He was one of the early pioneers of Pyrosequencing technology, and he’s founded a number of startups, including Pyrosequencing AB, ParAllele Bioscience, Nextbio, and Avantome. Just a couple of days ago, he announced his retirement from Illumina, but we’re lucky to have him here to talk to us about– to talk about startups and sort of his history in the space. Mostafa, thank you so much for coming. |
| S3: 03:36 | [Mostafa Ronaghi] Thank you. |
| S2: 03:39 | [IL]So you’ve been a sort of a champion of entrepreneurship for a while. You’ve been with Illumina for a long time. That’s kind of the sort of the top line item on the biographies. But you’ve actually done so much in the entrepreneurship sphere. What sort of drives your interest in supporting biotech commercialization and startups in general? |
| S3: 04:02 | [MR] Thanks, Ivan, for having me and thanks, Kayla, for organizing the event. So, yes, I think it has been, of course, a passion, but the passion comes from the impact that you’re making on human life. So when I was in high school, I decided to be in the field of medicine. I wanted to become a doctor, a physician, and after going to different practices and clinics with my uncle, so I decided doctor is not my thing, but I love medicine, and I want to be an entrepreneur in this field. So when I moved from Iran to Sweden for my education, I knew exactly genetic is the area that I want to focus on. And I did my PhD in Genetic Engineering, and I ended up developing Pyrosequencing technology, which was the first next-generation sequencing technology. And the word of sequencing by synthesis actually was going in my first publication basically which was describing the Pyrosequencing technology, and there are a lot of technologies that we have in offshoot of that. But when I look back, that’s the technology, of course, but that technology was fundamental in enabling a lot of applications. And we knew that some of those applications are going to be developed by other people, which was absolutely fantastic. And we really wanted to see how we can enable people to make that impact. If people think are enabled to make an impact, so I feel that I have impacted people’s life. And that was the biggest satisfaction and the drive during the course of my life. |
| S2: 05:58 | [IL] That’s awesome. Yeah, I mean, one of the kind of themes behind this event, one of the reasons why we started it was really to kind of introduce kind of academics to the biotech life and sort of the switching from the kind of the research community over to the– maybe not switching, but people who are sort of on the cusp of transitioning maybe from academia to biotech, and a lot of folks are thinking about it these days, and so we’re sort of at that interface. And so I kind of want– I like to hear perspectives of folks who sort of have made the switch. So what would you say is your favorite thing about working with startups, especially early-stage startups because you’re involved in the Biotech Incubator or the Illumina Accelerator. So what do you like most about these? |
| S3: 06:52 | [MR] The agility and the fact that you can make fast decisions and honestly startups, they are a source of inspiration for me. And when I look at entrepreneurs that they are in the mission of changing people’s life, and that’s a huge source of energy. And you see that they’re actually doing that. Any technology or any applications that they have been leveraging sequencing or genomic technologies, most of them, they have come into the clinical space, of course, and they are changing [your?] lives in the form of discovery or diagnostics. So I feel that the whole revolution has started. You’re not even in day one of that revolution. And so it’s amazing to see on the side and sometimes be in the action and to watch that revolution that’s happening. |
| S2: 08:01 | [IL] Yeah, well, we’ve certainly seen that, I mean, this year, I think, or at least 2020 and 2021 have shown sort of highlighted how important biotech is for humanity. I get to sit in a lot of these events, and we spend so much money on things that are like the military, etc., and all these other things. But when a big pandemic or something comes through, the biotech groups are the ones who start kind of showing their value. What do you think sort of on the counter side of this, what do you think is maybe the biggest challenge that early-stage founders, especially sort of academic founders have in the genomics space? What have you seen that’s the most difficult to transition? |
| S3: 08:57 | [MR] So when I look at academia, so I have been in academia and Stanford, so Stanford probably is a bit different than other academia. So it’s not taboo to start a company. You get actually a lot of credit to start a company, but the biggest hurdle I see that people, they think that it’s all about the idea. And I would say that probably idea is important, but when I look at how I weight start-up and having been involved in research in academia and going to start a company in scaling and then commercializing at the global level, so there are multiple touch points that are critical. One, of course, critical step is how to transition from academia to the company. |
| S3: 10:03 | [IL] So at that time, you really need to think that who are the right people that I really need to have in the bus? You’re going from point A to point B, and the people are absolutely critical component of how you can make things happen. And they should have enough of incentive to basically take on that mission or to join you in the bus from going from point A to point B. So when you look at a company, at the time you start, so it’s all about team. Of course, the idea that you have is on PowerPoint or on paper. So it’s all about the team. So you should do the evaluation based on the team. And as you make progress, you get to the series A level. So, of course, at that time, people, they look at the team, but they look at what you have achieved, which, in a way, defines how good team you have had. And so you really need have a concept for a biotech or genomic company. And at the time you reach Series B, so you really need to have some sort of revenue validation. So your product should be in the market and you should have some sort of validation, which, in a way, shows how good a team you have had. So it’s all about team, team, team, team. |
| S3: 11:39 | [MR] And in order to get the right team, you really need to be generous and have the right people driving the right function. So the startup is not about the title. So basically everybody is doing whatever they can. So I announce myself usually at startup, I’m the CJO, I’m the chief janitorial officer, and if you want to give me a title. But the title doesn’t have any value. I mean, you are basically a CEO of a one-man company or a two-man, three-man company, so that doesn’t mean anything. So you are there to do something. |
| S3: 12:20 | [MR] And I usually advise startup not to give any title honestly. You have one person like CEO, but other than that, so you have Head of Technology, Head of Product, or Head of Revenue and so on. As you grow and you have significant ownership in the company, you really need to bring value to your shareholders, which means that you bring value to your share, which means that you are making progress on your product or the road-map of the company. So if that’s the case and if you see that by hiring a person to increase that value, you should do it. Even, they would take your job. And that’s the struggle that I see people they have at the company. And you have to realize, okay, this is your capacity, and I could bring experience at this point, or I could bring someone with a different expertise to take the torch and run as fast as you can to go to point B. |
| S2: 13:36 | [IL] Yeah, I can definitely– I mean, definitely emphasize with the fact that as the company grows, having to relinquish and delegate a lot of responsibilities and things like that along the way is definitely one of the challenges, because you start out, like you said, doing everything yourself. And little by little, you have to specialize and try to get the right people for the right jobs and things like that. What do you think– in your experience, what do you think is the most common sort of mistake in the space that startups make? Is it that they just give everybody [Steve?] titles at first and then a weird theme thing? |
| S3: 14:15 | [MR] That’s a red flag. That’s a red flag when I see that a lot of– see their title in a lot of big companies. Easy to give titles, but it’s very difficult to take it back, and people, they’re emotional and you don’t want to be in that position. That’s a red flag usually for me. |
| S2: 14:32 | [IL] Is there something that you see that young sort of early-stage startup neglect that they really should focus more on? I mean, for me, for example– just an example, for me, clearly, sort of marketing and sales in the early days was not something that I was paying enough attention to as much as should have been because coming out of academia is not something you’re familiar with. But are there other things like that that you see that are common patterns that young startups tend to sort of not do right? |
| S3: 15:04 | [MR] Yeah. So usually, the scientific founder, they think that they have done everything and this is it, and they should have the majority of the ownership. And when you look at the cap table, so it’s heavily on the scientific founder. And then, other people, they are not going to have enough incentive, and those companies usually don’t go anywhere. So the way you want to think in a startup is that, okay, there’s a pie, but the size of the pie you define. And if the pie is this small and you have the entire ownership of that pie is not that much. But if the pie is huge and even if you have a slice of that, so that’s a lot. So I really think that you should usually think about how you can make a difference, how you can bring a product to make that difference to the market. You have to look at what’s going to happen. So number one factor for me when I start a company is I can make this company successful, not on how much I’m going to make at this company. So especially for first [a month?] entrepreneurs, they should be super sensitive about this because they should not optimize for their financials, they should optimize for how fast and how good a product they can get into the market because if you get it once, then you can always repeat that. That’s a good thing with entrepreneurship. Everybody wants to work with you, oh, you have some unique experience. You took actually one idea, and you turn that to a product, that’s a unique experience. Everybody wants to work with you, and you are going to have access to amazing, amazing people and work on even larger ideas. So I really think that at the end goes back on your position yourself in starting the company and bringing the right people to the team and give them enough of incentive. Number one goal should be how fast I can go from point A to point B. |
| S2: 17:17 | [IL] Do you think that that sort of roots itself in the idea that most, I guess, at least academic technical founders think that the idea is good, technology is good, this thing is definitely going to work? And so, you try to kind of maximize your outcome, and you don’t realize that the greatest danger is not that your pie slice is going to be too small. The greatest danger is that your entire pie is going to be worth zero. |
| S3: 17:43 | [MR] Exactly, exactly. Yeah. And when I look at a lot of ideas, revolutionary ideas, I usually call them the ideas that they have a miracle to overcome, and usually you see that, okay, there are some miracles that they have overcome in academia, but to make that a product that would require– of course, it doesn’t require a miracle. So, the type of brainpower that you need to have to overcome the miracles are different for type of people that they focus on how to make a product, a concept to feasible product and how to make it a robust product. And those are all different brains. And all of them, they are valuable in a company. And you shouldn’t think that, oh, okay, since I’m the guy who has overcome the miracle and have addressed the challenging issues, which is true, but they shouldn’t think that they should have everything at the company of course. Other people, they are needed. |
| S2: 18:56 | [IL] So, yeah. So, if I may summarize, focus very heavily on the team because that’s what’s going to keep your company, determine if the company is successful or not, spend less time fighting over early-stage equity, and focus on getting the best people and motivating them as much as you can, and not everybody needs to be the same technical mindset. You need to have a diverse set of brains trying to make your company successful. |
| S3: 19:23 | [MR] That’s right. I usually even at this stage when I start a company, people are different that they would have different value. I go equal ownership actually in those companies. That’s basically the way I have done, and I’m interested more having in ownership |
| I put the money in, so, and get some preferred share. But I think you should see yourself on how you can bring value to the company and work hard for the share that you have got. I mean, of course, some people, they feel that they have got less, or they have got more, but the goal of a company is not to financially address some needs of people. The goal of the company is to get their product out, and you really need to have the right people. | |
| S2: 20:15 | [IL] Yes. I’m thinking about the company that the company, if you’re the founder, the company is not you. You work for the company, and the company is really an effort of all of these people. That was another kind of thing I had to learn. What do you think in the greater scheme of things? So right now, obviously, there’s all sorts of tumult going on, but innovation is going so fast these days driven by what seems like millions of startups just all over the place. What do you think– what are you seeing today sort of in the larger scale of things that gets you the most excited? What do you think is the most exciting change that biotech is bringing to the world these days? |
| S3: 20:57 | [MR] I think the sheer amount of data that we have. We have entered into a data-driven biology. It was based on your gut feel a couple of decades ago, but probably even a decade ago, but now we are getting into a data-driven biology, so. And AI is playing a huge factor in it. So I think that’s one of the most exciting area of AI. So if you would bring an AI person to biology, so they are not going to be that actually, right, but if you would bring a genomics guy with AI background so they understand the complexity, and of course, they could have other AI people, but you really need to have a good understanding about the complexity of the biology. Still, your gut feel matters a lot, but we are actually using a lot of data to validate what our gut feel is telling us. |
| S2: 22:00 | [IL] Cool. Yeah. Yeah, definitely. So we’re up in Seattle, which is full of tech AI folks. So we definitely understand the power of that technology has been as well, sort of demonstrated. So we have some questions from the audience. And I think, Kayla, are you going to do them? I do them. Okay. I haven’t been reading the questions along the way. So Mostafa, you mentioned AI, but beyond just AI itself, could you list maybe some of the most important kind of must-know skills that a bio [informatician?] should sort of know in order to effectively transition to biotech? A lot of the– a lot of the point to this event is really to kind of address people who are in academia, like, what’s the best way to get into biotech? What are the most important skills? What should they work on? |
| S3: 23:07 | [MR] So you’re asking specifically about the buying from my people, so is that correct? |
| S2: 23:13 | [IL] More or less, yeah. |
| S3: 23:14 | [MR] Yes, the AI is amazing. But of course, love analytical tools and coding, those are great to know, but one thing that I’ve been super impressed with is from the people that they understand the [inaudible] models. So you’re basically, you look at– to begin with, you have to produce a good set of data. If you don have a lot of junk, of course, you’re going to produce junk. So if you have a noisy model, so it will be quite difficult to analyze the noisy biology. But I’ve seen some people that they have very unique thinking on how they set up their noise model and how they treat noise and they classify that. And those are the people that I saw, well, they are making a huge, huge impact. And that was exactly how when we started GRAIL. GRAIL is a super noisy data and you are going to cancer screening, which would require detection of radio frequency of 1 in 10 to 100,000. And you have basically a tiny tumor, like a chickpea size, and that one is basically you are going to put that in the context of all the tissues in the body. So the DNA that’s secreted from that little, small tumor, you don’t know from there in the body it is, and, of course, it’s circulating among all the other free DNA in the blood. So how would you go about identifying that needle in the haystack? And that, I saw that people that they had a good understanding about the noise model, they were the one that made a huge impact. Otherwise, we were dealing with a lot of noisy data. It was very difficult to interpret. I think people that they have got good signal processing background and they have good understanding about biology and with the noise could potentially have come from, those are the ones that they have an upper hand in the industry. |
| S2: 25:46 | [IL] Cool. Here’s another good one. How do you see– how do you see data security, data sharing, data ownership issues getting out because, again, now that there’s a huge influx of data coming in, what happens in terms of security? What happens in terms of privatizing? |
| S3: 26:06 | [MR] That’s a very, very, of course, good question and a very important question, because health data, if you go to the dark web, I haven’t been there, but my whole day tell about the health data in the dark web actually, full disclosure. In the dark web actually one of the highest money you can get is for the health data, and definitely, there’s security and privacy of the data are of critical issues. But from what I’m seeing and hearing from the experts is that they tell that [X-rayed?] are good, advanced technology that are coming into space that could address the issue. The vulnerability’s mostly at the junction point where we have API. Of course, you could have a secure system, but as soon as you want to go from point A to point B at the junction, so those are the places that you have vulnerability. |
| S3: 27:16 | [MR] And what I’m hearing is that the type of encryption like [morphy?] encryption and those kind of things actually are becoming a reality, so and it’s becoming– I mean, it was not a reality a year or two years ago, but now I see that actually people they have started using those things, and they could address some of the security issues. But absolutely, it’s critical to think about it. If you are a data company, you really need to make sure that you have full privacy and full security of the data. |
| S2: 27:54 | [IL] Great. Well, thank you so much. That’s all the time we have for this segment. Thank you for participating. It’s been really great to hear your insight. |
| S3: 28:04 | [MR] You’re welcome. |
| S2: 28:07 | [IL] And I hope you have a lot of cool startup stories to tell in the future as well. Maybe we’ll hear about them. Maybe in the future you’ll come back. |
| S3: 28:15 | [MR] Hopefully.
|