Y Combinator ups the ante with bio startups for 2015 (opens in new tab)

I was also told by the HN crowd that Facebook is a fad that would never make any money :)

The best investments always take a long time. Fortunately we are very patient investors, happy to fund "crazy" things like nuclear fusion and cancer treatments.

23 and me is an example of the least ambitious thing you could do with genomics. Honestly, I think you are being needlessly negative. There is a lack of life sciences research funding and an oversupply of life science researchers. What's the disadvantage of more biotech startups? Public-private collaborations with small nimble startups sounds like a dream come true, compared to years waiting for the wheels to turn in collaborations with big pharma.

That's a pretty large and unfair statement, and I'd like to know how you are measuring failure.

23andme has created an affordable market for personal genomics, single-handedly forced modernization in regulation and policy, built a mineable database of live genome data that is helping researchers find cures, and amassed nearly 1M paying customers.

I'd love for you to say that just because they aren't yet profitable means that they are a failure.

http://www.wsj.com/articles/23andme-to-use-genetic-database-...

Having spent my entire career in biotech startups (mostly digital pathology and diagnostics) I can tell you that you are seriously mistaken. It does not cost anywhere near "billions of dollars" to develop, say, a diagnostic. We get by with ~10-30m funding rounds, perhaps 2-3 rounds. Not sure where you are getting your (mis-)information from. Of course, if you're looking to develop a new drug... yeah, that costs a boatload of money, but that's hardly the only area of biotech.

If you think that biotech = pharma, you're about 2 decades behind. Biotech = fabrics, materials, health, food, chemicals, etc.

Perfumes, flavors, spider silk, biosensors, glowing plants, etc. are all biotechnology that require the one thing cheaper than software on this planet - dirt. They copy code orders of magnitude cheaper than bandwidth - water & sugar & light.

The billion dollar tools developed by big pharma now are running in the thousands of dollars, and there are no shortage of million dollar problems.

Regarding 23andMe, I'd reconsider that view.

They are sitting on a treasure trove of medical and genetic data. And they have begun to monetize this data, which I believe was their endgame all along.

More here: http://www.forbes.com/sites/matthewherper/2015/01/06/surpris...

Yes, you're absolutely right, and YC and other SV funders really have no clue what they're doing. It's a boon for biotech startups because the relevant VCs are very puckered up right now when it comes to biotech/pharma.

I'm a YC founder (current batch; Shift Labs) and also a tenured full professor at an R1 university. I've got a pretty good view from both sides of this fence. I've spent over 20 years as a faculty member at research universities, produced PhD students, raised millions in grant money, written dozens of articles, yadda yadda yadda.

Universities are really great for many things. They are even really great at commercializing some kinds of technologies. But they are not great for all things, even all things related to bio or tech transfer. Sometimes crazy bets are the only way breakthroughs happen, and generally academia cultivates incremental more than transformational.

I started my company because I wanted to make affordable medical devices. The incentive systems for both med device companies and university commercialization offices are almost completely misaligned with building a business model that works for affordable medical devices.

So I went the entrepreneurial route.

Being in academic research is not the same thing as building a company. They're not the same skill sets, or even the same language. Lots of academics become technical advisers to startups built around their research. That's not the same thing as building a company. YC is about building a company.

I wrote about being a med device company in YC here: http://bit.ly/1LlmZjk, but I think really what I was writing about was being a researcher learning to build a startup.

I actually agree. Exactly the same is true for most software coming out of YC. But that's not bad at all: the point of YC is not to do cutting-edge research—although a few companies do—but to execute and take a product to market. It's a vital part of an idea's development, but at a later stage than academic research.

University projects are incredibly valuable, but only the rare exception produces something commercially viable much less supported and marketed enough to be relevant to consumers. Even in CS, an academic field with disproportionately strong industry ties, projects like this a rare exception (see how venerated Spark is); it's even rarer in other fields.

This is a different sort of work than raw R&D, but it's still difficult and relevant—just in a different way. I completely sympathize with not being interested in it, but that says more about you (and often me) than it does about YC.

If anything, the role YC plays is actually more important in biotech than in software because creating, deploying, marketing and supporting a software project is an easier problem with more existing support outside of YC. Software takes less resources, has less risks and has more buy-in from funding sources and other parts of the community than biotech. (At least, and especially, in SV.)

But, unless you're excited by an accessible version of something specific, none of this is going to be particularly relevant to you. Not only is this perfectly fine, but it bodes remembering for people in the startup community who tend to get so enamored with and immersed in what they're doing that they forget that it is not universal.

YC is telling us that there may be a lot of value in batching and accelerating these types of products/companies. Maybe we should start a biotech focused accelerator (as opposed to software) that turns post-doc chemists/biologists (as opposed to software engineers) into rockstar founders.

I want to take issue with "it would take little effort to find 100s of projects at universities across the world that are better versions of these projects", both as a trained biologist (neurobiology), current postdoc, and former entrepreneur.

I share your intuition, I really do. I even said similar things in grad school (and still do, sometimes). But the reality is that:

1. These are not supposed to be projects, they are supposed to be companies creating products. The gulf between "Nature paper" and "something someone will buy" is incredibly long and arduous. Plus, these are VC-backed, meaning there's an expectation of timeline (short) and return (high). These aren't "take $20m from darpa and engage in another four years of R&D" type endeavors. So while they might look trivial scientifically (although I do not think that they do), they have to be working sooner rather than later.

2. "Better versions" is also a tough thing to assess. The people involved matter a lot -- thus even technically superior solutions from very smart people might still not be "better versions". I know many grad students who are much more knowledgable than some of the top data scientists, who nonetheless would fall on their faces if they tried to do a data science startup. Similar for life sciences and biotech.

I think the people who poo-poo academia are largely setting up strawmen -- even Peter Thiel (whose first VC firm, Founders Fund, backed both of my startups) admits that there's a substantial role for government and academic activity in enabling long-term technical innovation.

As biologists, we know just how hard it is to make _anything_ work in this space. Most new drugs fail, most clinical trials fail, most pathways end up being hard to target, etc. etc. Often building a company in the biotech space is like trying to build a microprocessor company where we're still not entirely sure "how the silicon works".

The challenge for YC and other VCs is to identify technologies that are "almost there", and help turn them into companies and products. That's very hard, and I'm not really even sure that we (as academics) are any good at it either.

Will some of them fail? Sure. Will some of them leave the startup scene and maybe go back and do a postdoc or work for an industrial research lab or do another startup, much wiser? Of course. But that hardly seems like a horrible outcome, especially if the scientists learn a lot along the way.

It's unfortunate that people are downvoting you since outside criticism is a lot more useful than a thread full of people cheering on YCombinator. (Unless you're a troll, as suggested by your user name.) Still, your comment would be more helpful if you were a bit more specific.

Could you point to a few of the University projects you're referring to? I think we'd especially want to know if they require similar levels of investment, since cheap long-shot approaches compliment, rather than are made obsolete by, expensive traditional approaches. (If you think cheaper approaches are hopeless, maybe you could expand.)

We started our company out of the Stanford Biodesign fellowship and are part of the current YC batch. We are making an implantable medical device - the old school kind with no software involved.

Medical device innovation is broken. Companies developing devices like ours are taking 10 years and $100M to see revenue, and most people in the industry consider this time and cost inevitable. For that reason, investment in the space has plummeted. ROIs suck. The thing is though that it's not inevitable. The space is ripe for smarter and more efficient ways to bring products to market. This process innovation is not coming from academia, nor will it ever. Academics just doesn't think that way, and they're categorically not good at commercialization. This new thinking is coming from independent startups that embrace a hacker mentality and reject conventional wisdom. As we all know, that's very similar to the ethos of YC.

Stanford Biodesign has a stellar track record of producing medtech winners, and that's because its process works. The advice we've heard from the YC partners in the program has aligned very well with the advice we heard from the top forward-thinking entrepreneurs in the industry at Biodesign. They get it. YC partners may not understand the intricacies of healthcare as well as industry veterans, but it doesn't need to. They understand how to build a great company regardless of vertical. YC brings in top founders from industry, who already have the necessary expertise and connections, and encourages them to think big and think differently. I don't see how that's not a winning formula. Yes, healthcare is different, but it's similar to other typical YC verticals in more ways than you think.

The difference between companies and projects is huge. We look for companies.

Care to give a few specific examples? Also, these are companies, not "projects" -- it's important to understand the difference.

I guess it depends on what YC is trying to do. You have to remember a lot of investors shy away from biotech due to the huge capital investments that need to be made for new drugs or devices.

What I've noticed with the latest YC biotech start-ups is they tend to be much more focused on ideas that don't require a huge amount of capital (diagnostic platforms, biofuels, etc).