93: Biotech with Rachel Craig

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Hosted by
Will Jarvis

In this episode, I talk with Motionhall co-founder and CEO Rachel Craig to talk about biotech, the state of R+D, how drugs get commercialized, the rate of innovation int he life sciences, and a whole lot more.


Will Jarvis 0:05
Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it’s a better, more definite vision of the future. I’m your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.

Well, Rachel, how are you doing today? I’m doing good. Excellent. Excellent. Thank you so much for taking time to come on the show. I really appreciate it. I want to get started. Can you give us a brief bio and some of the big ideas you’re interested in?

Rachel Craig 0:53
Yeah, so be a little bit from motion Hall focus and satsa. What takes up a lot of my time and attention. So motion halls, co founder and CEO. We do deal enablement for biopharma licensing, mergers and acquisitions. And so I’m sure we’ll get to talk about a little bit more. I think the big vision there is that we’re trying to move Life Sciences innovation faster from patent patients who are trying to hack the entire life sciences tech transfer cycle. And know my background, usually what people want to know, when we’re talking about motion Hall is how I got into it. So I started coding when I was five, not because I was brilliant, but because my dad was really nerdy. So it’s like, alright, Rachel, take this computer. Here’s a book of basic, this is what we do. So I grew up coding first and getting online early running web based businesses as a teenager, everybody said, Rachel go to Silicon Valley. And the joke is on me, because eventually I did. But at the time, I was like, if everybody says this, Then I better do something else. So I went and did philosophy and computational neuroscience, and really fell in love with the life sciences. Then through that work, I started to watch some of my professors try to spin up biotechnology companies and mobilize their innovation out to the market work and help people and I thought, Gosh, why is this so hard? Why are they so stuck? And why is somebody who’s just really the world expert trying to mobilize their life’s work, and dealing with all this complexity to just to try to move what they’ve discovered, to where people can use it. So that’s a bit about my background, and why I do what I do. And then other big interests, I think, then we go beyond motion hog, always interested in solving big coordination problems. I’m interested in progress and impact. And I think a lot about how we can apply what we’ve learned that motion Hall and tech transfer there to energy and climate.

Will Jarvis 2:35
Excellent. Excellent. Well, I really love that that vision. And you know, I’ve really been interested in life sciences innovation, just as a topic I like to read about, I’m no expert at all. But it does seem like you know, the price to get a drug to market has just been expanding rapidly there. This is like, this is law. It’s like anti Moore’s law. It’s like, it’s a room’s law, and it’s that the prices of drugs are, you know, it’s doubling every so often, every couple of years is getting more expensive, more expensive. You know, and I remember the internal rate of return for pharmaceutical companies, I think went negative like last year, a couple years ago. I don’t know the exact exact figures, but it seems like Like, like, what’s the big stumbling block? It seems like we have a lot of innovation, we have CRISPR, you know, maybe the scientists are less productive than they were 50 years ago. And maybe even significantly, so. But we’re still spending a lot more money directed toward these these scientists, we’re getting some amount of innovation, but why are we have like, where’s the stumbling block in tech transfer? From science to like, actually, in vivo in patients? Yeah, like, what’s the big place? Is it like with the universities with the IP protections? Like, is it matching scientists with companies? What does that look like?

Rachel Craig 3:44
Sure. Um, yeah, and there’s probably, there’s a few different ways to answer that one, I’ll answer with the one that I just said, I think, sometimes I think a lot about, you know, where do people tend to go, they tend to go if we just dumped more money on the universities and basic research with that help? And the answer is probably right. That’s not the one I’m most excited about. You know, if we just waived all the regulation, would that help? I’m, uh, I’m less excited about that, too. Although, you know, I’m sure there’s some good arguments in favor. The place that I think about the most is that these transfer points. So I’m gonna give you some context here. The average Biotechnology Innovation changes hands four times before it ever reaches a commercial patient. Right. So in addition to that, you’re depending on how you count it $1.6 billion $2.6 billion for drug, you know, 11 to 12 years to get it to the first commercial patient. It’s trading hands multiple times. So maybe that looks like transfer to the university. Then it goes to a little biotech, that biotech sends it to another biotech, that biotech sends it to maybe a farmer in Japan, and then another company has to pick it up for the rest of world right. So that’s a lot of transfer, just to get something to its first commercial patients, and add all of those transfer points. There’s a tremendous amount of complexity and coordination that has to happen both between the biotech that owns the IP rights and the people who work there and understand it, and the company that’s going to pick it up and finance, next stage of development and distribution and so on to make sure that I say it in a way that’s impactful enough, it’s very, very hard for human beings to get their heads around everything that needs to happen to go through that if you transfer points successfully, right. So you’ve got huge teams of scientists at a potential pharma company that’s going to pick up that IP that the business teams, you’ve got the legal teams on both sides of the fence, and everyone has to agree and see the opportunity in a somewhat similar way just to get it off the ground. And so if I can kind of extend that line a little bit more, from my vantage point, I talked to companies with really incredible biotech innovation, every day of my life, it doesn’t appear to me that there’s a shortage of innovation and opportunity out there. What there is, is a lot of trouble understanding where the real opportunities are matching that up with capital. Right. So capital allocation problem, and then coordinating people to actually distribute the best of that science out to people. Does that make sense?

Will Jarvis 6:11
Yeah, absolutely. Absolutely. It. It makes a lot of sense. So it’s not you don’t think it’s like a low hanging fruit problem where it’s just gotten too hard to you know, find new ideas or anything like that. It’s actually just like, that we’ve got this really Byzantine tech transfer process, which prevents us from getting real innovations like into people.

Rachel Craig 6:30
Yeah, I think I wouldn’t even call it Byzantine. I think some of the things work, it’s just maybe the complexity around what it takes to coordinate humans there is bigger than it was right. So I see, I definitely can’t believe that there’s a shortage of innovation, to talk to such amazing companies all the time. And they’re everywhere, right. So we’ve got companies that we work with incredible innovation coming out of Chile, who are now able to access the world, right, and, you know, all these platform technologies that spit out incredible numbers of drug candidates, the complexities, understanding, coordinating understanding on the other side. So something we talk about a lot is, you know, it’s great to be novel, because if you’ve done something novel, and it’s a breakthrough, you can change the world. It’s also bad to be novel, because nobody can understand it, right. And so it’s really, really hard to dig inside these companies, that you absolutely need to license your IP to get your product, right, because the costs are high, because you need all that infrastructure to distribute drugs successfully to patients, you have to go to the transfer point, which means you have to arrange for the people at that company to see your science believe that it’s real. It’s similar to like, a late stage VC investing problem, right. But I’d say the complexity has exploded, because you’re not just evaluating business fundamentals, technology of people, but you know, maybe some very, very complex new science, and you’ve got 100 opportunities to look like, look at that per day. Does that? Does that kind of make sense? Where there’s a complexity point there?

Will Jarvis 7:55
Absolutely. Absolutely. Yeah. And there’s, there’s all these crazy, like, knowledge transfer problems about, you know, you know, how do you decide what’s what I’m curious, is, how much of this this problem is just the fact that, you know, there? We don’t see scientist founders? I’m not sure why, like, you know, in in it, yeah. You know, founders can, you can have a founder led company, you can take it all the way from nothing to, you know, IPO the whole way through, this is very common, it’s rare that it doesn’t happen other in other ways, relatively rare, but you very rarely see, like scientists, led companies go all the way through. And I wonder from the back end, that means they don’t get much liquidity. They don’t have much ability to invest in, you know, companies, they know they will, will be successful. They’ve got special expertise in that front, because they’ve actually been through the whole process. So you don’t these people don’t really exist, there aren’t many of them. And then you don’t have these kinds of special capital allocators that can signal to the market like, this is a great idea. You need to invest here. I don’t know. Does that make sense at all?

Rachel Craig 8:52
Yeah, no, I think I think about that, and problems like that a lot. Right? So I mean, I think biotech and solving problems in the life sciences building a company in the life sciences, not always, but usually pretty different from building a tech company, it’s much more rare to get somebody who’s a world expert in their particular slice of novel science, who can also lead a company and become a fabulous capital allocator. They’re out there, but it’s much more rare. Could there be more of them? I think there could be right, so then what do we need to do to make it so that there could be more sort of empowered, empowered scientific founders that are leading companies maybe helping nurture the next round of companies, particularly around they’re either going to focus around their AI or is it scientific expertise, right, because there is that complexity there. And, you know, what they think about when they’re thinking about this, this problem? Another really big difference for scientific founders and for biotech companies are trying to build is just the right enormous costs of drug development, right? And then they’ve got no so on like, a tech company again, with some exceptions there. is no easy route to revenue. Right? Right. So if you wanted to get leverage on your investors, which a lot of us who are building software companies do, so that we have more choice, then you build revenue, and you get, you know, Paul Graham’s ramen profitability or something like that. But you can’t do that if you’re a biotech investor, you absolutely need that capital of large amounts of adjust to get the company moving. And so that means investors really have biotech founders over a barrel, right. And it’s very hard for them to generate leverage. And so it’s much more common for them to take more of the company to take. I mean, I’ve never seen a biotech company structure with super founder shares where the founders have control, right? Usually, the VCs get control of the company very quickly. And then I think the attitudes and norms there are really different, sometimes for the better of the company, sometimes for worse. So it’s common to me teams out there that that will find it, they like back it and then fire the founder scientist and the rest of the team and replace them. Right. So something that was much more common in tech, I think, before Paul Graham kind of came in introduced some new norms. Right? And so what would a healthy set of norms look like for biotech? And, you know, I think about that all the time. I wonder if you know, we’ll be in a position to socialize some of them. From our vantage point in motion Hall, I’m sure there’s other people who are thinking very hard about how to how to do that to

Will Jarvis 11:19
Absolutely, no, yeah, it, it makes a lot of sense. And it also, it’s notable, I remember, this is this weird anecdote, but in college, like, I was looking at a wide range of startups doing some projects at the business school, and, and I was looking through things, and I noticed that most of the biotech startups were led by NBA founders who were clearly like, you know, they hadn’t had the idea originally, right. And so this was like, very, very distinct from most successful IT companies, you know, it does happen, right, you’ll have like an NBA founder, but it’s much more rare. And so I it is that it’s very notable, right, like, that just is kind of a signal,

Rachel Craig 11:54
and it kind of runs all the way up the chain. Right? Um, you know, and I think it’s harder, right? If that’s scientists founder has to be so focused on being the world expert in their science, right, that it’s really hard for them to cross that bridge, they have to trust, there’s a whole world of I think, not to pick too much on MBAs, but you know, often somebody with lower conviction, who’s looking to make a buck maybe has a different sense of mission around the company. Right? And, and so things get choked up. Like they get choked up there. Right. And I don’t know how we, you know, I think you’d have to change the whole culture, maybe create a lot more transparency around opportunities, which is something we’re trying to do definitely to, to drive that down. Yeah, well,

Will Jarvis 12:35
and maybe like you said earlier, like, it’s even worse that the NBA is indicative that oftentimes these people were installed. Because by you know, VCs, because we need, you know, we need this, like, the business person to come in and like actually run things and I don’t know, like, and they don’t have that specific vision of like, what the future will be like, it’s just kind of like a job at the end of the day.

Rachel Craig 12:55
Maybe? Can I say something nicer about some of the business people? Think you do you see that structure. But I think particularly at the biotech company level, you know, we do see a lot of really good partnerships between, you know, a scientific leader who has respect for a business teammate that they’ve selected, that person probably has like a PhD in molecular biochemistry as well, maybe they’ve also got a law degree or an MBA, and then there is an alignment and that everyone understands, like, this is their life’s work. There’s a lot of capital, you know, they can make money here, but also, you know, they’re very focused on their patients. I think sometimes the job is just hard. And there’s, to me, there’s another opportunity to little light shone on the people who are doing heroic work trying to mobilize new medical innovations to patients. Right, and doing that with a lot of mission orientation.

Will Jarvis 13:45
Absolutely. No, yeah, definitely. And I think too, in the box leadership works really well, you know, like a business person technical person together, it off can be can be quite helpful, kind of dividing up those duties in a robust manner. Yeah, I’m curious, do you see like, this kind of situation changing just at the macro level, you know, interest rates are very, very low. This has pushed a ton of capital into the VC market, you know, it’s up to like $650 billion last year, and most of that, it’s just people searching for yield, right? This is like a longer like, 800 year trend of interest rates, like intersecting like, getting lower and lower and lower. Maybe we’re running out of days, we’re not sure why. But interest rate, right, sim seemed to be like, they will probably be lower in the future than they are now. But this is my guess, do you think like that will encourage more capital in the, into the markets. And as a result, you know, scientists founders will get better terms in the future because they, you know, if there’s more capital, there’s more competition for that capital. And maybe they don’t have like the ramen profitability kind of leverage, but at least like there’s more competition for capital, if that makes sense. Yeah,

Rachel Craig 14:50
I guess my answer is maybe on a long enough time horizon, probably. But short term, why do I think short term I think it really looks like a Mass guns right now a lot of capital being misallocated, the companies don’t have the talent and structures to mobilize it properly, right. Usually when there’s waves like this, there’s a big, you know, people get their fingers burned, and then they recoil. And, you know, my short term bet would be that we’re gonna go through that pattern. Before we get to this kind of golden age of biotech, I think we have to get there, there’s so many hands working on it right now. And everybody understands the importance and the COVID pandemic shone a lot of light on that. But if I look at where the money is going, right now, the way it’s being used the lack of talents in the biotech space as well, right, so there’s scientific talent, I think the innovation around that is actually pretty good if you ask me, but the talent with that, I think, also that mission orientation and drive is in such high demand, right to actually successfully mobilize things and coordinate a team to do that. And that’s where a lot of these companies have been capitalized recently are falling down, because they’re hiring quickly, like a Blitzscaling. Startup does, but they’re a biotech. And it just takes more time and attention and a study your hands to actually move things successfully. So I think a lot of them are in trouble.

Will Jarvis 16:07
Gotcha, gotcha. Now, that makes a lot of sense. And these things can’t go backwards. Like we saw it with the.com bubble, it took a whole generation to kind of for that to filter out. And these things can take a long time to work out. So I’m curious, you know, I know you probably can’t go into specifics, but it, what I’m guessing is, is that what you do at motion Hall is you try and match these inputs together, better to get more, you know, more successful innovations on the back end. So you’ve got, you know, early stage scientists to get all this capital. And, you know, there’s, you know, the contract research organizations in between and all these different steps you have to do it’s very complex process. And if you could coordinate this better, you could get more outcomes. Is that correct?

Rachel Craig 16:46
Yeah. And so I think and when we talk about like that failure rates in drug development, right, so biology is hard, I would say, oh, maybe only one in 3000 drugs that gets started actually makes it to a commercial patient, right? So could you drive down everything else that introduces unnecessary risk in that process, and you know, in terms of motional, so we don’t work with CROs we don’t do any sort of matching or driving down complexity, they are all about this matching problem, right? So if you have to take your IP, transfer it to another part of, you know, to another group, whether that’s another biotech or pharma, which you do, because that’s how you’re going to, for most, for almost every biotech company, that’s how they’re going to bring revenue into the company to fuel the next round of development in their pipeline, right? And then Pharma has to buy to fuel what’s in their commercial marketed portfolio? And so if you have to make these transfers, then yeah, not just matching them. So so we’ll do the matching. Sometimes people say we’re like almost like OKCupid for biotech and pharma companies, right. So sort of a logical matching, but then also providing all that context and best practice around it to core help people coordinate to understand the match, because it’s one thing to say, hey, look, bio in text, you know, mRNA vaccine, Pfizer is a 90% match for what you want to do now that there’s a pandemic, right? You know, and then there’s a lot of information that’s needed. Do I really believe that? That’s true, right. How do I know that it’s true? How do we see that this is the right partnership on both sides of the fence? And that’s where that’s where I think we’re trying to shine a lot of light. And then we do bring huge amounts of data to bear and workflows around that so that it’s easier for people to see each other. What’s a good analogy for that? You could almost imagine are merging together something like OKCupid with a Bloomberg terminal. Right. So yeah, if that’s helpful,

Will Jarvis 18:29
yeah, absolutely. Now, that makes a lot of sense. And it seems like traditionally, excuse me, I just don’t know much about the space. But yeah, traditionally do people that are trying to like, buy this IP? I’m assuming? Is it m&a people at large pharmaceutical companies? Is that kind of correct? Yeah,

Rachel Craig 18:47
let’s talk about the structure. Because I think, okay, right, you have your corporate development that’s doing m&a. And maybe they have some different focuses than so in the life sciences, you’ve got these really structured groups on both sides of the fence to deal with these transactions, because they really are lifeblood of the industry. So it’s different from other verticals, right. So farmers will have their business development and licensing group, right, and you can find them maybe at Pfizer, it’s a 70 person group or something like that. And their job is to search and evaluate, right, so to look for IP that they can license in, that aligns with whatever strategic priorities are top of mind for them. They’re scientists around the playing a role. And on the biotech company side, you’ve got both your heads of corporate development who are looking at either looking at the m&a components, buy or sell. And then you’ve got your chief business officer who’s looking at licensing and IP, maybe from a university and then licensing IP out. So there’s a huge what I’m trying to say, there’s departments and job functions that all they do is think about these transaction pieces for IP on both sides of the fence.

Will Jarvis 19:48
Gotcha. So so it’s matching those two together. It’s making that easier, it’s matching

Rachel Craig 19:51
those two together. And then and then a little bit of breaking it up, right. So you might think differently about buying a whole company than just licensing IP even though you get total rights to that piece of science if you license in the IP?

Will Jarvis 20:03
Gotcha. And traditionally, is it just kind of like a super manual process where maybe, you know, like, Sally down here at Duke, and she’s got a great idea. And, you know, like, maybe there’s like these, like, very rough networks of people. And maybe you’re on Google trying to figure these things out, like I,

Rachel Craig 20:19
ya know, I think it’s been through, like, several iterations over the last so many decades, right. So if you go back far enough, it was really, very, who, you know, very geographically locked, lots of networks of trust. And that makes sense, because there wasn’t a lot of information available. I think over, particularly in the 90s, a lot of databases were developed, tried to scrape clinical trials and get manual input on the world of biopharma. And those have helped, right. And so I think before motion Hall, the best practice was a lot of poring over those databases and Googling, plus using networks of trust, and then still a lot of geographical locking in hoping you bump into the right person at a conference and spray and pray strategies to try to match with the right person. And then I think some of those dynamics that you see in venture come into play too, right. So, you know, people do move based on fear of missing, you know, greed and fear of missing out right with these with these products. And I think what we’re trying to facilitate with, you know, now a global customer base, and a fair amount of success is, you know, can we drive down that geographical locking, by making this really transparent, showing people exactly where the fits are and what they need to know, to actually start to build a successful relationship with the company on the other side of a transaction? What else has been great there? The pandemic did do a few things that are very good for the biopharma industry. And one of them is that instead of having to meet at conferences and shake hands, people get on Zoom now with their video on and that’s been really, really good for companies that are, for example, in Chile, building something absolutely tremendous for cancer or in Australia or Korea, right. So it means that they’ve got more windows plus the tools to connect to the right people and and move some of that globally, whereas in the past, I think people literally walked around Sandhill Road and South Bay and you know, tried to meet the right person. Say I’ve got a cute story. So one of our board members, Rod Fergusson led the Rituxan deal for Genentech and so Rituxan is one of the most important cancer drugs from the last decade and more on the market is available to patients everywhere. And that’s more than a billion dollars for Genentech every year. I think it was past two last time I looked. And so literally rod found IDEC and the Rituxan molecule, because they were down the road from him where he lived. And then he was able to license that, for what he says is a song but $7 million, right. And people really didn’t fully understand the potential of that drug at the time. And yet, it’s been absolutely incredible. Right? So that’s how it has been done. Wouldn’t the world be much better if you could see globally where all that innovation is was much more transparent if people could connect and have the right conversations faster? Right? So that’s, that’s what we’re trying to facilitate?

Will Jarvis 23:14
Got it? Got it? No, I really love that. I, I, I’m curious. It’s such a it’s such a big problem, right? Because, you know, if traditionally, people are literally like, just this incredibly ad hoc manner, and you can in some way, kind of much more systematize these things you can get, you can bath much more important together, get a lot more outputs on the back end.

Rachel Craig 23:36
So realize I got the redacted number, it’s really wrong. Like 10 million. Yeah, that’s right. I’m gonna fact check me.

Will Jarvis 23:43
So that’s good. That’s good. Well, I’m curious do um, when you’re looking for a successful drug candidate in this, this might not be exactly in the area you guys are working in, but you’re looking for a successful drug candidate like retox. And generally, it seems like people have taken a very kind of statistical approach, it’s like, we’re just gonna get a bunch of like compounds and try to find them or something like that. Whereas it seems like the best way to do it and the way most drugs have been discovered, I read this kind of popular science book on it. So I don’t know much about this. But it seems like most the way these drugs have been discovered is because people find some big something that does something like a big effect size. So you know, like, this is how we found like, some of the first cancer drugs and all these different, like antibiotics and things like that. It was just like, wow, like this is doing something. It’s doing, like a big thing. And then you can apply it in different areas. So I don’t know, like, Are there any, like heuristics you look for when trying to evaluate candidates like molecules?

Rachel Craig 24:40
I mean, I say there’s gonna be a lot of answers. I think some of that just falls outside of my expertise, right? It’s going to be so different, depending on different companies. What we look at much more boring heuristics, but I think they’re worth noting so you know, when we’re working with companies will say look, you’re you’re going to know your Science best. So apply your best scientific lens on top of all the candidates that you have, right. And sometimes we’re working with companies that have the the 700 candidates that they’re looking at, or you know how many permutations of clinical trials programs that they could run. So pick out the ones that are the strongest scientifically and then let’s apply a business lens over top of that, right. So if you know that you have to match this is a constraint on the market, right? If you know you have to match with a company that can help you distribute that, then before you dump all this money in here. And maybe somebody’s got a solution to this, this is not ideal. But if you know, you have to match them, let’s see who’s out there that you can even match with, right? Because the way that you’re going to get more capital to fuel, the next program that you want to develop is by finding that partner who’s going to put capital back into your company and take it through the next step, right. And so one of the places that companies fall down is optimizing scientifically, but then not thinking about the fact that they’re going to have to partner and if you build something that the rest of the biopharma market doesn’t want to cooperate with you on or that’s very hard to get them to cooperate with you on and that innovation just sets. And I think a real shame there is right, the patent ticker is going right, so becomes less attractive, the longer it sits, and the longer you have to fight to get somebody to pick it up. Right, then the animation is really at risk.

Will Jarvis 26:14
Gotcha, gotcha. No, that makes sense. It sounds like the red haired boy problem they talked about in in like it venture investing. Have you ever heard of this?

Rachel Craig 26:24
I don’t know, the red haired boy problem telling me this?

Will Jarvis 26:27
Yeah. So it’s a you’d kowski kind of idea where, you know, if you’re an early stage investor, and later stage investors just refused, like, they don’t like red haired, you know, founders, for whatever reason, are purple, like you name like some characteristic, even if like the business is a really good idea if they can’t get capital later stages, because, you know, people aren’t interested in some aspect of the company like we don’t invest in like marketplaces, like, if common knowledge is marketplaces are a bad idea. Even if it’s a good idea to invest in the company. If they can’t raise money later, you’re much more solid. This is exactly

Rachel Craig 27:01
how biopharma works, right. And so right now, like, Alzheimer’s is super on popular. Diabetes is super popular, right? I’ve seen amazing drugs in the diabetes space that have a real value proposition to just like, cure diabetes, right? Amazing. It’s almost impossible to get people to look at it. When I’m talking to those teams, and like luck, okay. Like, I do believe if you have something that good, you can find buyers and partners, but we’re going into heroic sales here. Right? So, um, and, you know, I’d love to work with you on Heroic sales. And then, you know, are they up for that type of task, right when the markets really, really rough. So it’s absolutely like that. And it goes through trends and fads, just like the tech scene does. So right now, a lot of capital is going into web three, maybe if you’re not web three, certain investors don’t want to look at you. Something we hear from biotech companies is everybody’s interested in immuno oncology right now. Nobody wants to look at a chemotherapeutic. It’s viewed as last generation, but look at the lives that I’m saving, right? And so then we say, okay, how do we get into figuring out how to develop you? Right? So you get into heroic sales, right? How do you develop those, you know, fit points that are out there, generate understanding, again, I always think there’s a way but but the it gets harder and harder and harder, right, just like I think it doesn’t take and maybe some ways even harder, because if you’re trying to raise capital, and what you’re, you’re the red haired boy, you can probably find somebody who doesn’t hold that bias. And, and get that done. If you’re a biotech company, you have to claim, usually, you have to convince full committees of people, right. So there’s just a lot more stakeholders, to arrange to have move. And so that just really exacerbates the scope of the problem and how much heroic efforting it takes to get it over the fence, it will give you something that I think is really neat. That’s also been possible with some of the new transparency in the space. It’s something we’re working on. But there’s other ways to look at this to the farm. The big farm is right, like your Pfizer’s have the biggest committees, right? And they have a lot of trouble coordinating amongst themselves, right. So, um, you know, and because science is complex, and the business is complex, adding more headcount money doesn’t actually help you solve that coordination and complexity problems. In some ways, it makes it worse. There’s all these little medium and specialty firms out there that are maybe not beholden to the same rules that have smaller committees or fewer decision makers, they’ve been traditionally very hard to find. But it’s easier to match them now and find them now. And so sometimes there’s a way to get something moving through one of the when right provided that the biotech and that pharma can come to an agreement. And the edited thing was like that maybe the board blocks it because it’s not a big enough deal. Right. So yeah,

Will Jarvis 29:50
that’s good. I mean, that’s a really good development, right? It’s like like smaller players who can can actually like, get more conviction because then what can convince like large groups of people internally Yeah to buy into, like good ideas can can really help.

Rachel Craig 30:03
Absolutely. I,

Will Jarvis 30:05
I’m curious, it almost sounds like the Yeah, like the venture model model where like partners can make. This is not all venture firms, but some hedge funds on the model, right, you know, partners can make their own decisions. And like, we just kind of like outsource that all, it seems like important to do that. Especially in biopharma, because, you know, like, trends can really influence like, whether or not you you invest in the, you know, it’s just unpopular. You know, like, it’s almost like the, the problem I see where, you know, football coaches never go for it on fourth down, even though they always should, because, like, you know, like, if you still lose, you lose bigger, and that looks worse, right? Nobody ever got fired for, you know, like hiring a Harvard grad,

Rachel Craig 30:47
even if they’re like a bad fit. That’s right, very similar problem. That’s right. Know that, um, that kind of fear is a really big problem in the farmers, right? And nobody wants to be the person who did like, you know, what, this multibillion dollar stem centric steel, but it fails, right? Like, two people yell and scream inside the big companies, both about missing things and about buying a dud. And, you know, there’s a lot of capital that goes into it, and the stakes are high, right? So the pharma companies know that if they don’t renew their pipeline, right, drugs go off patent, they’re gonna go generic, which is good for all of us, right? The way the machine works is good for all of us, but it means they have to renew and have another big moneymaker in there before their portfolio goes off patent. Otherwise, they’re looking at layoffs and their stock price goes down. And so the tension and the pain there is really real for them. And I’m sympathetic to that, you know, there’s different comp structures to the try to push these people to make deals on time. And then, you know, a lot of folks in buyside licensing or company m&a, right. And sometimes I’m just just for context, sometimes m&a in the biotech and pharma space just looks like another straightforward transfer of IP. That’s right. So it’s less moving parts, right? We’re buying the IP, so this company can move that. You know, you’ll hear a lot of people say that the hardest negotiation they have to go through is and with the biotech company, it’s with their internal stakeholders, right. So you could have even a few really motivated champions for a piece of science, and still have been spending a tremendous amount of time on that, I think, a really amazing example of that. So again, Rod Fergusson, who’s on our board has done two sort of oral histories with us. One is on how he led the purchase of a toxin and what that was like for Genentech. The other he does is talking about the auction of Herceptin, which is another really important molecule. And what’s fascinating about that is what he needed to do, as a BD person at Genentech under Roche to auction that and he had the world’s CEOs from pharma companies coming to buy this at the notion that Roche was out of the deal. And the way that works is, so Roche didn’t believe in Herceptin. And if you read the story, where you can see it’s only once everybody else wants it, does Roche come back in and say, Actually, we have a first ride on this. And now we’re going to exercise it late in the auction phase. So those stories are amazing, because things still work that way, even though the stories are dated. Now, those human realities and coordination realities are still how the drug industry works and struggles to understand things.

Will Jarvis 33:21
Absolutely, yeah. And it sounds like, just like everybody there, they’re just highly mimetic, and it’s like, and that drives a lot of light, a lot of activity they, and a lot of their decisions, right? You just talked about Roche, like, you know, they didn’t want it until everybody wants wants it. And they

Rachel Craig 33:35
want it, ya know, I mean, so. So, yeah, very similar in terms of, you know, greed and fear of missing out driving a lot of decisioning. And then if you’ve got a team on the other side, who really knows how to amplify those dynamics, you know, then that can help them get a deal done. And it can also contribute to maybe not the wisest allocation of tech capital. Right. So a lot of challenges there. Yeah.

Will Jarvis 33:58
It’s a It’s really fascinating talking to you, I, you know, I’ve had some my suspicions that you’d probably, you know, works like this and drug development, but you know, I don’t know. But, you know, the ideal state world would just be like, well, we all sit down and objectively evaluate what are the best molecules and then we move forth through the process. And instead, it’s just like, it’s, it’s incredible how it actually works.

Rachel Craig 34:19
I mean, I wonder, if you look way, way into the future, right. You know, maybe there is some sort of, you know, with enough data capture and a big exchange, right? It does seem like it’d be possible to get line of sight on where the best innovations are, where the best matches are moved them or the whole structure changes, right. But um, what do I tell people? I think I’ll be old. You know, quite old. By the time that happens. I’d love to help. Yeah, absolutely. Right now, it’s still very people, right, right now, it’s really about helping people navigate these dynamics. I think that’s the most powerful place to make an impact.

Will Jarvis 34:51
That makes sense. That makes sense. How did you first identify this problem as a problem? We’re solving that like it? Was there an aha moment where you realize Uh, wow, this is, uh, this is this is an area where a robust solution could really, really help things, or was it just kind of like a gradual process? And the second question going off that is, you know, how sure, were you that it would work?

Rachel Craig 35:14
Yeah, those are both great questions. I’d love to say I could tell right away that it was the gradual, is a gradual process with a lot of horror, I think is what I would say. I think everybody wants to believe that the world works better than it does. And it’s poorly understood. Right. So like we talked about earlier, people tend to have this perception that all the innovation happens in the universities, and that the farmers just take it and charge a lot of money for it. And that’s really not true, right? There’s all these biotechs in the middle who are doing a tremendous amount of work. And then right, all these kind of transaction points that we’ve talked about. How did I get into it? So I have that three point background I talked about, right. So I grew up coding and running my own web based businesses, I did neuroscience, I watched my professor spin out, I started to work with them. Because I saw that problem, I started to work with the CEOs and boards of biotech spin out companies. And at first I thought it was going to buy and I was like, these are data problems, right? There’s information problems here, I’m just going to buy the software that must exist to help solve these problems. And then I did find these kind of 90s era databases. And it’s a really classic tech story, right? Why is everything? So broken? Let me call some people up, it was pretty easy to find people who are willing to talk to me, it’s like, what do you like about the databases? What are you not? Oh, they’re full of duplication errors, and they don’t have most of the information they need. And they’re manually curated and focused on public companies. And, you know, I guess, because I have that tech background. I was like, Okay, there’s room to do a lot more here. But even then, I think it’s been a multi year journey, just appreciating the full scope of the complexity, how inefficient and opaque market is, it’s truly horrifying. And to amplify that, you know, the young people who join my team are people who just haven’t worked close to these problems in the past, as they’re oriented with motion Hall, you can almost seem like, it can’t work this way. It can’t be this bad. No, it’s just bad. Like, you know, we’re sitting on top of, you know, we see some of the world’s most amazing innovations for COVID, for cancer, for preventing future pandemics for diabetes. And, and then we look at the teams and we look at the challenges they have. And this is it. Right? Like it’s a really big, messy problem area that suffers from the information complexity, the opacity, the market. Yeah, human limitations, lack of talent. It’s a mess. My take is, it’s

Will Jarvis 37:34
a mess. Definitely. No, that makes sense. And this question, I always like to ask founders, because I’m always trying to try to level set this. You know, Elon says he thought there’s like a 10% chance he would be successful with SpaceX, you know, like, like, Did you you know, like, I don’t know, did you assign odds to it? Did you? And like, exactly, exactly. Yeah,

Rachel Craig 37:58
I think, um, what do I think? Because what the vision would be not just to solve the places that we’re playing now, but you know, what, how much can we do to move things from pot into patient more efficiently in a way that’s better for for people and patients and companies and economies? What am I thought, you know, I did think getting into this, that it was a lower risk prospect than some of the other things I might build, right? Because, right tech, life sciences, a bit of business, I had a lot to learn. But that’s an interesting three point background. And I am very tenacious, and I’m good at eating complexity, as like, this is a really ugly baby, right? This problem is, it’s ugly, nobody wants to love it. In fact, nobody else does love it, I took a good look. I don’t I still don’t think anybody else loves this problem, but me. And so, you know, that gives you time to become a real expert, and managing this really important on labs baby right in there all over the place. And so those things made me feel like if I pursued the problem method at all, you know, with a strong methodology, and followed strong playbooks, we would be successful. And so that’s worked, right like we’re now a global company, the technology works people told me you’d ever be able to do it. And you know, we’re helping companies all over the world you know, the grander vision right? How far we can take this I think I’ve still I wish I could say I have 100% convinced eviction will get there but no, they’re still open questions for me how far can we really take this and it probably depends in part on you know, how many willing hands want to join and help me push the vision who are truly exceptional, but um, you know, for the pieces that we’ve cracked already they are they are done. It’s just scale now, right?

Will Jarvis 39:46
Absolutely. Absolutely. I love it. Do you think generally people should be more confident about Yeah, should people that I guess at the metal level, be more confident generally, about their ability like if they plan well and they have a unique insight to kind of do something that kind of gives them an outside return. Does that make sense?

Rachel Craig 40:08
Yeah, yeah, people shouldn’t? Yeah, I think so. I mean, there’s always this kind of funny conversation happening about well, is starting a startup actually risky, right in the tech scene? And, you know, for a lot, you know, for some people, the answer is yes, you’ve got to know yourself and think about the opportunity, and who you are and what you bring to the table. But I think there are more people for whom it’s not as risky as it appears, right. And, you know, you plan, you certainly have to grind and put in the time, but the outsize return is there. The networking opportunities and learning opportunities are fabulous. And maybe it takes a little bit of bravery, right to that classic. And, you know, it’s bravery in shorter supply than genius, perhaps more people should more people should seriously consider it. And then it’s about being ready to think long term, I guess, the other pieces, you know, what’s the good advice, but good advice is think about what business you’re uniquely suited to build that nobody else is building? Right? I did that. You know, think about what you can do on 10 years, not just one year. So people tend to overestimate what they can accomplish in a year and be very impatient and think, much more poorly about what’s possible if they dedicate themselves to something for 10 years, which, you know, things compound. So if you’re willing to compound over a decade, you can accomplish a tremendous amount and really change many, many lives, not just your own. Yeah, you know, I don’t know if I’m saying particularly normal here, but I do wish more people would try. And I think, you know, it’s really attractive about going to these ugly baby problems, to kind of talk about that as you’re not just trying to catch a trend or away if you’re looking at a real problem. That’s all in love that exists out in the world today. They’re everywhere, especially if you’re willing to go places that aren’t as hot or trendy. Right. So maybe less fun, maybe where you’re going to be more alone, but, you know, boundaries of you know, government or legal complexity deep inside companies, right, finding things that have really high leverage, they’re just being neglected, because no one has the time to chase them. You know, with the right tenacity and methodology, I think it’s, I want to say easy, but it’s very predictable that you can build a business there, right, if you just stick with it. It’s not a good answer.

Will Jarvis 42:24
Yeah, I think it’s really good. And if I had to summarize it, the message I think I get from you. And this is from like, third party perspective. I don’t know you that? Well. But I would say is, you know, you should spend a lot of time thinking critically about, you know, like, how you can do it and plan and like, have a robust, like, process for doing that. But once you’ve done a lot of critical thinking, and like, you know, you have a good shot, you shouldn’t be afraid to be be confident you can go out there and actually make something happen.

Rachel Craig 42:53
Yeah, absolutely. Right. And I think, I think if you put in that time and thought, it’s easy to become convicted, right? Like, it didn’t take me long to be like, Okay, this is really s, I’ve done my research, I understand the path to get to revenue, I understand the path to finance. And I just have to, you know, be ready to do what it takes, right? So um, what’s an interesting one, for an enterprise sale, like what we do, it can take up to four years to really crack a predictable sales cycle. So you might be looking at four years of unpredictable sales and difficulty cracking that sales cycle. And it did take us a long time to crack the sales cycle. But if you know that you budget accordingly you plan mythologically, right, then you’re not gonna be discouraged. And that’s a huge accomplishment when you do do it. And then like compound, compound compound, right?

Will Jarvis 43:41
Absolutely. Absolutely. Then nobody can really catch you. But I think, yeah, there’s nothing like enterprise sales cycles. They’re quite bears. Very cool. What do you mind if we do a quick round of overrated or underrated in our last couple of minutes? Sorry, let’s do it. Absolutely. So Halifax, Nova Scotia, overrated or underrated?

Rachel Craig 44:02
So, you’re gonna see this one? It’s funny. I usually don’t talk about Halifax because most Americans don’t know what it is. Like, I’m from the East Coast of Canada, like like Toronto, and I say, Yeah, sure. Well. Let’s move on. Um, but um, what Halifax is my hometown? It’s a university town. What I really love about Halifax still, we hire a lot in Halifax. I think the talent that comes out of the universities there is underrated. And I’ll share that with people even though it might give me more competition for that talent. I think incredibly talented, hungry people huge intake of immigrants. So Canada’s really, really good at opening the door to talented immigrants. A lot of them land in Halifax. Great. I’d love to meet them. And then they go to the universities and they’re excellent. So that’s wonderful. But Halifax beautiful to visit in the summer, too. So I’ll give Halifax underrated.

Will Jarvis 44:57
That’s great. Discourses on Livy over a underrated.

Rachel Craig 45:00
Yeah. Sounds really cute. get me in trouble. Um, I think it’s underrated and maybe vehemently so right. So Machiavelli gets a pretty bad rap, but I’m a little nervous talking about it. So he’s maybe maybe gonna judge me. But I think if you read Discourses on Livy, what did I really appreciate about that book? I think I am with the campus sees Machiavelli as a patriot who’s really trying to figure out what’s right. For the people in his nation. Some of the things that he talks about Discourses on Livy digs into sort of long standing truths of how people think, and organizing can be moved, right, you can recognize and extract those truths without having to, you know, then go with a medieval prescription of how to apply those truths, right. But if you want to solve grand global challenges, coordination problems, work with large groups of people, then it really behooves you to understand how people work both as individuals and groups, right. So there’s a saying that great CEOs become masters of people. And certainly my experience on this journey is that that is very necessary and so underrated and doesn’t deserve the bad rap that it gets. But certainly, you need to read it with a modern, you know, I write and think about what’s true to extract there and what doesn’t, what do you what can you leave behind? Because it is a very old book.

Will Jarvis 46:24
Absolutely. I might mispronounce this edge of minicab.

Rachel Craig 46:29
Also, I think you’ve been great, I think you did great. What do I want to say about the Alzheimer’s drug? You know, I think that one’s been overrated. I think the consensus view is now that it’s been overrated. You know, what’s really sad is that, with that one moving, there was a lot of hope for Alzheimer’s companies. I mentioned earlier that it’s an unpopular, it’s like a red haired boy, nobody wants to work with Alzheimer’s. And yet, there are fabulous interventions and treatments out there that just need some financing or someone to pick them up and take them the rest of the way. And there was a lot of hope, with that drug, that the industry would start to change its mind and attitudes will change that easier to move through but kind of Alzheimer’s companies are doing. Yeah, they’re doing heroic sales and the winds have really blown in the opposite direction for them. So I’ve got companies that I work with right now, where we’re talking about how that’s impacting the way that they’re perceived and how we use and the tools that we have to overcome that challenge.

Will Jarvis 47:27
Awesome. Bertrand Russell, overrated or underrated?

Rachel Craig 47:31
I don’t know. I don’t know the answer that why I like Bertrand Russell. I don’t know what most people think about Bertrand Russell underrated overrated. I’m only tell you about Bertrand Russell, I just really enjoyed his autobiography, which is a zoom, where are you pick this one up. And I think there’s something really nice about how human and raw he is about his life’s journey. And that particular book. And for those who are listening, who haven’t read it to maybe do enjoy Bertrand Russell, one of the things that’s very cool there beyond and talking about growing up going through university, some of the big transitions in his life that I think are mirrored and transitions that you can go through today is that he spends the end of his life writing letters with all these, you know, kind of leading intellectuals of his time, right? So he’s writing letters, swig, and Stein and Einstein. And it’s really quite interesting to see those exchanges. And I think there are echoes of that. And what the internet allowed a lot more people to find their tribe, right, maybe that’s Bertrand Russell finding his tribe over time, internet for a lot of us find our tribe, right, maybe it’s something mirrored and you know, the way that we talk to each other about progress, the progress studies community or other communities. And anyway, that’s what I liked about Bertrand Russell’s autobiography.

Will Jarvis 48:39
I really love that a little bit. Well, Rachel, thank you so much for taking the time to come on today. On a Saturday, I really appreciate it. Where can people find you? Where should we send them?

Rachel Craig 48:50
Or should we send them? I think the best place for people who found me here to find me is my kind of give him my my personal email address. Sure, yeah, sure. Yeah. Don’t come to my company website, you’ll go through a whole round of triage, and you get treated like a company. So don’t do that. But I’m certainly welcome to find me on Facebook. I think that’s a good place to connect with folks affiliate with the pro progress community. And then, if you find me on medium, I’ve got a page about myself, where I think you got both Discourses on Livy, and Bertrand Russell, and my email is written out at the bottom. So maybe, maybe we won’t say it for the transcript but Rachel at mine vehicle from my vehicles.com. Hopefully, we can break that up so it doesn’t get scraped. But if you want to drop me a note there, I’d love to hear from people and maybe when requested if you’re listening to this, and you think you can apply some of what I’ve talked about or learned that motion haul to the energy sector, boy, but I love to meet somebody who’s interested in mobilizing tech transfer more efficiently in the Energy and Climate Change sector. I think a lot of the things that we’ve learned do transfer but I can’t take it on in addition to Life Sciences at this time, so that’s somebody I’d

Will Jarvis 49:58
love to meet. That’s great. All Some well thank you so much, Rachel. I really appreciate it. Thanks.

Rachel Craig 50:01
Well, this is really fun.

Will Jarvis 50:07
Special thanks to our sponsor, this market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence great analysis of key industries, organizations and live players. You can subscribe to Bismarck free at brief dot biz market analysis.com Thanks for listening. We’ll be back next week with a new episode of narratives.

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