Michael Gladstone

Infusing Biotech With Young Blood

Posted January 30th, 2015 by Michael Gladstone, in Corporate Culture, From The Trenches, Pharma industry, Talent

This blog was written by Michael Gladstone, Principal at Atlas Venture, as part of the “From the Trenches” feature of LifeSciVC.

Youth is often well represented among entrepreneurs – except in biotech.

William Osler, founder of Johns Hopkins University and the alleged “Father of Modern Medicine” considered youth an asset: he said the most “effective, moving, vitalizing work of the world is done between the ages of 25 and 40 — these fifteen golden years of plenty.” (He also added that “men above 40 are relatively useless,” but out of respect for Bruce’s most recent birthday, we’ll leave this comment untouched.)

So why are there so few folks <40-45 years of age in C-level biotech executive roles? As the most junior member of the Atlas Venture team, I have the double-edged benefit/handicap of youthful naiveté. In my opening “From The Trenches” blog, I’d like to discuss the shortage of this trait among venture-backed biotech leadership.

We know that CEOs in this age range can be incredibly successful. In prior biotech vintages, youthful first-time CEOs were much more common: Henri Termeer at Genzyme, Richard Pops at Alkermes, David Mott at Medimmune, to name just a few. But there are a few great examples today: Nick Leschly took the helm at bluebird bio in his mid-30s, and Katrine Bosley became CEO of Atlas’s former portfolio company Avila Therapeutics right after turning 41. And since entrepreneurial talent is the scarcest resource in the ecosystem, we know we need to expand the size and diversity of the evaluable management pool and ensure that we’re giving a fair shot to the next generation of Nicks and Katrines.

So with this column I’ll make three points:

  1. We too rarely find younger execs in venture-backed biotech
  2. We should strive to change this
  3. To do this, we need to update how we identify and evaluate management talent, and then supplement and develop it

Part 1: We too rarely find younger execs in venture-backed biotech

By a quick survey of Atlas’s 25 life sciences portfolio companies, I counted only 4 C-level individuals under the age of 40. I suspect this is not unique to Atlas, and I encourage others to share data from their portfolios.

In a previous column (here), Katrine Bosley (as mentioned above, an excellent first time CEO herself) notes the robust standing of first-time CEOs among recent biotech IPOs, but points out:

“It’s certainly an experienced group in other ways – the average CEO age across all those newly public biotechs is 53 years old and over 70% (42 out of 58) are in their 50s or 60s.”

So, why is this group weighted so heavily towards the combined age of the CEOs of Facebook (30) and Uber (38)?

I asked an assortment of biotech folks far more experienced (pseudo-irony noted) than I:

  • Vicki Sato, a successful retired exec at Biogen and Vertex and an active board member for a range of companies (from Neurophage to BMS), summarized that “experience is used as a surrogate for judgment.” An important caveat here: it is, of course, an imperfect surrogate, one that only sometimes predicts future success in new roles and situations.
  • Mike Gilman echoed that sentiment, adding that for someone who rises up in the R&D side of a larger organization (as both Mike and Vicki did), it can be difficult to gain adequate exposure to “the business side” of biotech until you’ve reached the executive level.

Many folks also suggested that the lack of <40 C-level biotech execs is, in part, a symptom of VC conservatism. As venture-backed Vaxess’s unusually young CEO Michael Schrader told me, “No one faults the board for bringing in a veteran with big name company profiles. But if you gamble on someone younger and it doesn’t work out, it’s easier to be blamed for that.”

Part 2: We should strive to change this

Investors and management often agree that identifying talent is possibly the single greatest constraint on NewCo formation and growth (e.g., here). This alone makes it imperative to find talented, capable leaders who might otherwise be excluded or overlooked. This is just one part of a larger theme about the benefits of expanding the diversity of executive leadership more generally, including along gender and ethnic lines.

Beyond simply expanding the size and diversity of the evaluable talent pool, there are also very real reasons to see benefits inherent to younger operators. Vicki points out that decades of experience sometimes come with ingrained habits or biases that may rule out or under-execute on new approaches that a refreshingly “naïve” mind may embrace. One big differentiator for the best execs (regardless of age/experience) is their ability to avoid these pitfalls. This is certainly true for experienced yet incredibly creative, open-minded execs in our portfolio like Gilman, Tom Hughes, and Rosana Kapeller, but often it’s the relative newcomers who are best able to avoid saying “but we’ve always done it this way.” As Atlas tech partner Chris Lynch succinctly summarizes in a recent blog post of his own:

Young and old, they each have their stereotypical advantages.  At the most basic level, those stereotypes feel true:  younger people have fresh thinking, boundless energy, no bad habits to unlearn; older entrepreneurs have management and technology experience to guide them and maturity that may translate to better decision making.

Most biotech leadership teams have ample supplies of the latter, but they may benefit from introducing a bit more of the former, as we more often see in tech companies like Chris’s.

To be very clear, I completely agree that ~15+ years of accretive biotech/pharma experience is tremendously valuable. It usually takes even the best leaders a long time to acquire and refine the full package of skills that a great CEO needs. But let’s not over-value the experience factor (which is just one aspect of a leader) to the point where we miss opportunities to diversify our leadership pool and where we take too few bets on some youthful rising stars. We know folks in their 30s/early 40s range can be successful in this industry and that we need to improve a process that often systematically (or de facto) excludes them.

Part 3: To do this, we need to update how we identify and evaluate management talent, and then supplement and develop it

So perhaps we too aggressively pursue that “experience surrogate” (because it’s easier to measure?) and focus too little on other important skills and capabilities. If that is the case, we should avoid defining a profile (e.g., “50 licensing deals” or “15 INDs”) that is de facto impossible for even the most talented and qualified younger operator to have achieved. I’m hopeful we can find a way to re-write our C-level candidate descriptions (whether literally or just psychologically) so they wouldn’t rule out 1983 Henri, 2009 Katrine, 2010 Nick, and the numerous people who could follow in their footsteps if given the chance.

This will mean adopting more nuanced approaches to our searches and building upon mentorship mechanisms like pairing first-times CEO with more experienced Executive Chairs (e.g., here and here, a crucial tool regardless of the CEO’s age). This pairing of complementary execs is what Chris Lynch calls the “Co-Creation” model, and permutations of it have been very beneficial in both tech and biotech companies.

Perhaps we should also be more supportive of accelerators and other seeding programs that give younger execs a chance to prove themselves in an entrepreneurial setting (and not take the wheel from them too quickly when they hit bumps in the road). And we should be more willing and ready to take a chance on rising stars at the director/VP level who have demonstrated leadership, persistence, and an eagerness to supplement their areas of inexperience with guidance from the board and other mentors.

I realize there are more questions than answers here, but hopefully this can spark more dialog on this topic. I’d welcome more recommendations for both identifying qualified younger operators and for building support systems to complement and develop them. (And, of course, I’d welcome those suggestions from people of all ages and experience levels.)

Michael Gladstone

Michael Gladstone

Principal at Atlas
This entry was posted in Corporate Culture, From The Trenches, Pharma industry, Talent and tagged , , . Bookmark the permalink.
  • charlestond

    Great post.

    When I was on the train this morning I overheard some academics talk about how hard it was to retain their best students, those that would be competitive for post-grad scholarships. The problem was they were being offered great money, in great oil companies even before they graduate. Did this ever happen in pharma? I have never heard of any scientist that hasn’t faced a lengthy job search leading to a pretty poor (if any) reward at the end.

    The contracting industry leads to an illusion of abundance, because as you say, people are unwilling to take the time to identify true potential; instead relying on something easily measured like past experience. However, ‘past performance is not an indicator of future outcomes’ – you might get the bare minimum with ‘experience’ but you might not get that something extra. The amount of talent I see in my generation just wasted, is astounding. The book ‘Think Like a Freak’ has a lot of ways to identify the right kind of thinkers, but the only way I see hiring heading moving away from the safe choice is when they are forced to due to lack of candidates.

    The C-level problem you outline may also be influenced by people who are exceptionally skilled at political maneuvering and at presenting themselves in a certain way. Which of course, may be good skills in certain organisations, but maybe not in such a technical environment?

    My suggestion is removing all the barriers for investment from people who show the right kind of initiative. How does a working class kid get investment for biotech venture? Maybe also networking events where people actually take the time to speak to the ‘young’ may help? I think the talent is there, you just have to find a way to meet them.

  • davidgrainger

    Like every other “ism”, “ageism” should have no place in selecting talent.

    And I genuinely believe it does not.

    It certainly doesn’t with us at Index, any more than I believe it does at Atlas. We are strongly incentivized to back the best teams with the best ideas. Any “false prejudice” will make what is already a truly challenging task insurmountable.

    The fact remains, though, that we can only back the people who come to us, or use the people we know to supplement management teams. If good young people don’t present themselves in either category then there will be a dearth of them in the portfolio.

    In other words, I think the issue is not prejudice among those doing the selecting, but in the pool of available talent.

    This may reflect the fact that it DOES take a long while to understand our complex business. But maybe more, the fact that young would-be entrepreneurs THINK they need that experience? I founded my first life sciences company at 34 (FingerPrint Diagnostics) and was on to my third (Funxional Therapeutics) before I was 40. That reflected my confidence in my abilities (whether justified or not) – perhaps we simply give younger entrepreneurs the impression they need to be older? Or maybe looking around and seeing all those older faces, they assume they cannot do it?

    Whatever the reason, like you I would encourage young would-be entrepreneurs to give it a go. And more importantly, to treat failure as a learning exercise, not be put off, find new technologies and try again. They will certain face an even playing field at Index.

  • Jens Eckstein

    The lack of young blood in biotech leadership teams was the exact reason why I dreamed up OneStart (http://onestart.co/about) where we instituted the ‘age-discriminatory’ rule of ‘under 35’ and combined it with a heavy dose grey-hair mentoring. Amazing results so far!

  • Michael Gilman

    One thing I’ve learned about the job of CEO is that it’s a generalist role. In our business, however – especially on the science side – careers are built by becoming a specialist. This focus starts in graduate school and only becomes more intense as you launch your career, in both academics and industry. You learn more and more and more about less and less and less. As an academic, I focused the lion’s share of my intellectual energy on one 20-bp piece of DNA – I knew each damn nucleotide inside and out. It seems crazy to me now, but that’s how reputations are built in science; it’s what gets you hired, promoted, and recognized by your peers.

    This phenomenon has significant impact on career timelines in biotech. First of all, it can take a decade or more as a take-no-prisoners specialist to build up the street cred for anyone outside your immediate field to take you seriously. As Gladstone notes, this is perhaps a fault on the hiring side, a sort of shorthand to reduce both the complexity and risk of hiring.

    But, in addition, it can take a long time to make the psychological switch from specialist to generalist. When I first moved to Biogen and found myself in charge of more than two hundred scientists (which over the years and with the Idec merger grew to over four hundred), the most challenging transition for me was getting comfortable with the idea that I was no longer an expert on all of the programs under my watch – indeed, it would have been a grievous error if that were the case. That took a while. And then I had to get OK with not being an expert on ANY of the programs under my watch. That, my friends, is an unnatural act for any scientist.

    On top of all that, effective management of an undertaking with the complexity of a biotech company – the many technical disciplines involved, the multiple interrelated steps in the drug development value chain, interfacing with a regulatory infrastructure that could not be more different from the Wild West of a science lab, dealing with investors who seem to have come from another planet – requires some learning. Sure, much of leadership is instinctive and you pick it up in kindergarten, but most of the shit you are held accountable for day to day is learned on the job. You get it in neither kindergarten nor grad school.

    All that said, I completely agree with Gladstone’s larger point, which is that our hiring practices hold the lion’s share of the responsibility for the lack of diversity in our business. And we’re all guilty of this. Whatever role we’re looking to fill, we typically have a dream date in mind – and that turns into a sharp upfront filter that directs unusual candidates, folks who could absolutely crush the job, directly to the discard pile. I am all for changing that.

  • Great to see this topic come up. It’s striking how different it is from the tech industry. It is also one of the reasons at Ginkgo that we (founders largely < 35) haven't bothered to really engage with the biotech VC community and went to tech folks instead.

  • David Miller

    Don’t underestimate the benefit of pairing an experienced CEO with a younger (or fresher-experienced of any age) person in a COO or similar broad role. You get the benefit of the ‘experienced headliner’ with fresh perspectives of someone newer to the business.

    Great article and an important issue to address.

  • Tethered

    Thank you for your comment! I appreciate your insight. I agree that I know more about less—it took 10 years for me to become a specialist on ~22 nt of RNA! Even though I am an expert at the science, I feel that I am not competitive for a management position, except maybe for a company expanding into RNA based therapeutics. How do you de-risk yourself to avoid the discard pile with only academic postdoc experience? Fortunately, for me the entry route into management of biotech is to co-found a company based on my technology. However that turns out, hopefully I will have gained some generalist skills!

  • Anonymous123

    I’m a mid-thirties woman in the life science finance space – seeking younger candidates for executive-level roles is likely to impact whether women can/will participate (see: tech industry). We bear the brunt of family obligations in our mid-20’s to mid-40’s. Without some flexibility from our employers on how/when we work, we are often forced into less-dynamic roles and then are then out of the running for executive leadership. I’d encourage you to find innovative ways to create flexibility for the people on your team (men AND women) with these types of obligations, so that they can participate in the next generation of executive leadership.

  • Alexander Dilthey

    When compared with tech, it seems that there are far fewer “inventor-entrepreneurs” in biotech – i.e. people like Brin/Page or Zuckerberg who make the complete journey from initial envisioning of the product / underlying technology to market leadership. Perhaps this is a more important variable than average executive age (although certainly correlated with it).

    Why is the inventor-entrepreneur model prevalent in tech? Because great things come from full commitment. If you go the whole way from invention to being personally responsible for successful execution, by the time you raise your Series B you are second to none in understanding the intricacies of your market and your technology. And as it is YOUR baby you are leading on a mission to success, you are almost by definition more obsessively commited than non-founding management.

    Instead many biotech companies are based on technology developed in academic institutions, with only part-time participation of the technology inventors (maybe because by the time you are 45 and have a university chair you have become a bit more risk-averse).

    Does this mean that the advantages of the inventor-entrepeneur model don’t apply to biotech? Certainly not. The part-time academic model is merely easier, not superior.

    So why are there not more fully commited inventor-entrepreneurs in biotech? Speaking from the experience of co-founding a cancer screening startup (which is based on technology invented by the founders): because resource coordination to reach initial validation of market, technology and freedom to operate is more complex and more expensive than in tech. The first 100K go a long way, but are not always easily obtained in the current investment climate.

    Programs like OneStart and the Breakout Labs are great – not only because they contribute to the availability of (effectively) proof-of-concept money, but also because they reinforce the notion that the tech founder model has a place in biotech.

  • Neil Solomon

    Younger talent in the industry gains experience over time as there is no substitute for starting in the trenches and working under excellent leadership . Not every senior level hire is successful and indeed many emerging companies hire far too high as a protection against criticism from investors, the board, etc. Experience in an emerging biotech company is unlike the experience that people from Big Pharma get, no matter how successful they had been so there is no clear formula for selecting the right leadership by age . What one should look for is enough measurable experience demonstrating career advancement in one or more small companies before giving a younger Executive the CEO role.

  • Brad Prosek

    Thanks Michael for an insightful post. Definitely timely.

    As I reflect on Point 3, updating selection processes to take into account more than experience, I am thinking back to some challenges that organizations face building the “right”sales teams. In some cases, after a launch period, it may be important to take a step back and analyze the traits and behaviors that made reps successful (or not) in different territories with different business mixes. Some organizations have actually rebuilt their teams with these insights.

    The results from these behavior:outcome analyses can be surprising, and when combined with some forward-looking cultural thinking about what a management team wants for its team, lead to the development of “behavioral” or “competency-based” frameworks that can help supplement experience-based analyses when selecting candidates to augment or rebuild the team.

    It strikes me that some VC groups may already do this informally or formally. Investors certainly have a great base of behavior:outcome cases. Building these types of frameworks for C-level candidates could be a complementary way of evaluating talent in parallel with traditional approaches

  • Katherine Wang

    Great post–the points you made were the ones that I thought of exactly! To add to them, I had one other point: Fresh PhDs who aren’t inventors should also be recognized and groomed for these types of leadership roles. Although the PhD definitely makes you focus on one very small area for a long time, if you are cognizant that you want to break out of the typical science/research track, you can find a lot of opportunities to help give you breadth along the way (e.g. business classes, tech transfer internships, getting involved with local VCs). These experiences add to the technical training that you receive and the actual budget, management skills that you may actually get from the PhD from writing grants, managing supplies, directing undergrads etc. This is what I did during my PhD to get an understanding of the business side and the industry. However, even with all these efforts, industry often doesn’t recognize these if they see that PhD, which often leads to so many people going back to get their MBA to validate themselves in the business arena. By that time, you could be in your early to mid 30s and just starting out in industry, which gives you a late start, and a disadvantage.

    On the CEO paired with executive board member idea, I can definitely vouch for the benefit of that. As an early 30s US born femaie working in Taipei at a start-up virtual drug development company, I have had the pleasure of working closely with our senior management and scientific team. It has truly been great to learn so much from their 25+ years of experience in pharma but also still have my own input heard.

    At the end of the day, I think it would be great not only to look for younger talent, but specifically also young PhD talent. They can also bring in great technical expertise that can often make them even more invigorated and motivated about whatever therapeutic/medical device/technology the company is about.

  • biotechguy

    Compensation is a key reason for a smaller pool of younger biotech leaders.

    A number of individuals who are qualified to become CEO of a small biotech, currently have lucrative roles at established biotechs or phama companies. As they’re in the late 30’s and 40’s, they typically also have a young family, with known financial obligations and happen to be in their prime earning years.

    The compensation trade-off is fairly clear: typically similar base salaries between the roles, with the CEO role coming with an equity stake and potential for a large cash-out, and the biopharma role coming with cash bonus and stock that effectively doubles one’s salary. For many, giving up the close-to-certain $300K+/year or so is too much risk for the promise of small biotech success. Sure, there are those drawn to the more entrepreneurial nature of small biotech, there are those who are single without a family and associated financial commitments, and those already financially well-off that they can better afford that risk. But the overall pool is unquestionably smaller because the risk/reward trade-off isn’t sufficiently compelling.

    If talent is both critical to success and hard to find, I’d suggest looking more closely at compensation. Something closer to matching 80% of the biopharma compensation plus equity would be more compelling. There is still skin in the game to keep them hungry, but risking 20% of your income is a lot different than 50% when you have a family to support.

  • Steven Ma

    Two reasons:

    1) Biotech proof of concept is too expensive. Pharma won’t buy unless there’s a lot evidence and that evidence takes years and tens of millions if not hundreds to obtain. Nobody will trust a 20 or 30-something with little experience with that much money.

    2) Young PhDs are not trained to be business leaders, and business leaders who have no science background are scared of the science. Nowadays science is incredibly specialized (as opposed to 10-20 years ago) and people with no science training who are great leaders would naturally gravitate to something they understand (namely tech).

    Potential solutions:

    1) Continue to consumerize biotech, meaning make it almost as cheap as tech to do proof of concept studies. This would require a fundamental shift in the currently R&D model, and will likely take many years. However, I suspect 20 or 30-somethings would drive this change.

    2) Provide business training to PhDs. Or provide science training to interested folks who are going into business. The cross fertilization is immensely important for any industry. Biotech R&D productivity is going down and we need more ideas from other industries.

  • Globe99

    > Nobody will trust a 20 or 30-something with little experience with that much money.

    But this is wrong, the 20/30-something founder/CEO’s of tech companies are routinely given $million investments. What do the investors of Uber know that biotech investors apparently haven’t woken up to yet?

    >Young PhDs are not trained to be business leaders

    Again, neither was Zuckerburg…

  • Globe99

    Amen. In “tech,” a single grey hair disqualifies you. In biotech, apparently you can’t have enough grey hair.

    In a world where nanotechnology is increasingly “eating” biotech, why are we helming our companies with men who got their PhD’s when bell bottoms were in style?

  • TJ Eviston

    A great article and a topic which I am quite passionate about. At the outset I must declare my bias – I am the CEO of a biotech company and I am 30 years old. In that 30 years I have completed 13years of medical and surgery training, 3 years of PhD and co-founded 2 not for profit organisations; in terms of medicine, science, people and team building – I know my shit. In terms of risk management/financial stuff/budgeting and business development/fundraising – I need help. but thats why i am surrounded by people with experience. You only learn by doing, and when you are young and driven you learn quick. All of my important decisions are made with support and counsel from people with experience who I trust. As we make these decisions, I learn and grow. Because I am young, passionate, can sleep 4 hours and I don’t have my schedule booked up for 3 months I can get shit done quickly. Talking to manufacturers, meeting lawyers/accountants/suppliers/branding/regulatory/IP/SAB/investors all take time and if you have an established career and a massive mortgage this is hard to do. Every 40+ year old who I look up to professionally is busy. too busy to do what needs to be done for where my company is at.

    As my company grows there may come a time when a different sort of CEO is required. it happens in almost every company (except a rare few) according to Noam Wasserman. The founder/CEO is seen as having the wrong skillset to run a sales or marketing or whatever team and the board moves them aside with or without there consent. The company moulds into risk minimisation and consolidation mode and the skillset the founder had to get the bird off the ground is increasingly seen as the wrong person for the job. The role of consolidation/risk minimisation is not one that I was born to do – I may be happy to do it in another 20years but for now I want to change the world.

    Just because things have been done one way for a long time doesn’t make it right (ie. older CEOs for biotech companies). You have to pick the right horse for the right course but at the same time not be held back by stereotypes and cookie cutters. let talent come through and when you see it – guide it and back it.

  • Max Well

    Youthful and old, they each have their points of interest. At the most essential level, those generalizations feel genuine: more youthful individuals have crisp considering, unfathomable vitality, no negative behavior patterns to unlearn

  • The pay exchange off is genuinely clear: commonly comparable base pay rates between the parts, with the CEO part accompanying a value stake and potential for a huge money out, and the biotech part accompanying money reward and stock that viably pairs one’s compensation

  • Ankita

    Hi Michael- Great post – apparently i’m late to the party to comment, but I will anyways!

    As a millennial with 11 years biotech experience, I am very supportive of efforts to give us a greater voice in how companies are run. I have struggled in large pharma/biotech organizations as I feel there are no venues for middle management to express creative ideas and companies have limited tolerance/willingness to diverge from precedent. As biotech and pharma are relatively capital intensive, have much longer development cycles, and fraught with failure, it’s less clear how to be a disruptive start up (not like one can hold a hackathon and 72 hours later emerge with the cure for cancer!…or could we?). We are already seeing more innovation by millennials in support spaces like med tech, cloud computing, health tech, and patient engagement – all areas with short development cycles and the opportunity develop a product in iterations. All that said, I’m looking forward to see how millennials as a group transform the pharma/biotech business.