Five Years Into the LifeSciVC Experiment

Posted March 3rd, 2016 in Atlas Venture

It’s hard to believe how time flies, but I started this LifeSciVC biotech-blogging experiment five years ago today. Since that initial post in March 2011, exactly 250 blogs have gone live, making it an opportune time to step back and reflect.

But before doing so, it’s worth highlighting how much the context for the blog itself has changed since 2011 – both at the biotech industry level and here at Atlas Venture.

  • Unbelievably, the NASDAQ Biotech index was hovering around 1000 in March 2011. It peaked near 4000, and is now around 2700 – still up some 175% since 2011 (vs 50% for the S&P). On the day of the first post, Gilead closed just under $20/share, Biogen at $71, and Celgene at $27.  All are somewhat higher than that now, reflecting successful drug launches, burgeoning revenues around compelling new medicines, and robust pipelines. A multi-year bull market for biotech, and Big Biotech in particular, was about to start.
  • But early in 2011, biotech hadn’t yet come into favor, and the world was full of negative predictions about the space as a whole and about biotech venture capital specifically. The title of a 2011 Xconomy post by Luke Timmerman says it all: “Biotech VCs Have a Problem, and it Will Get Worse Before It Gets Better”. It highlighted the challenges biotech venture was having in raising new funds. BioCentury had a cover story later in 2011 titled “Venture’s Stress” about whether the end of Prospect Ventures was the “canary in the coalmine” for the demise of biotech VC. Limited Partners (investors who fund venture firms) disliked the sector in favor of the sizzle of tech, despite a decade of better deal-specific returns than other venture spaces: as Bijan Salehizadeh and I wrote, life sciences was the Rodney Dangerfield of venture capital in the 2000s (here).
  • At our firm, Atlas Venture, things were also changing. In 2011 we were two years into deploying our 8th fund, a $283M vehicle, with a recently slimmed down seven-person partnership focused on both the Life Science and Tech spaces. We had just shuttered our European footprint, and were focused on the Boston area; further, we had just moved from the suburban woods of Waltham into the bustle of Cambridge.  Despite my concerns about the commute, it was a great move and excellent timing – before the real estate market in Cambridge exploded.  The biotech ecosystem in the region was accelerating and its epicenter was Kendall Square – a theme which only got stronger over the next few years. Today, we’re a biotech-only firm, based right in that global epicenter, with five partners deploying our 10th fund (here).

So it’s against that evolving backdrop that I’ve been blogging. It’s fair to say that some of the views in 2011-2012 LifeSciVC blog posts have evolved (as they should) with the changing times; further, these reflected the strategic themes around biotech venture creation we were working through at Atlas.

For example, after the mediocre public equity markets for young biotechs in the 2000s, we came into this period with a rather anti-IPO bias early on that certainly didn’t predict the exuberant buoyancy of the 2013-2015 IPO window. While we’ve always done platform investing, we also began pushing asset-centric models during the post-2009 period as a solution to a seemingly moribund public equity market – pioneering models like the LLC-holding company for discovery engines and the project-focused Atlas Venture Development Corp (here). Nimbus Discovery LLC had just closed its second seed round with help from Bill Gates (here) in March 2011, and was about to close it’s Series A; in addition, our first built-to-buy “AVDC” deal, Arteaus, had just closed it’s initial financing (here).

But as the biotech bull market expanded in 2013, the sector’s cost of capital went down dramatically as a response to the public market’s increased appetite for early stage innovation – which prompted an evolution in our view of how to build and capitalize biotechs efficiently. This doesn’t change our central thesis that equity capital efficiency is critically important for driving returns, it’s just a more nuanced view that accounts for fluctuations in the cost of capital and relative valuation. We also still believe that a venture portfolio with both big discovery/biology platforms and focused asset-centric investments, including build-to-buy structures, is important for lots of reasons (different market correlations being one), but have obviously matured our view of these models.

Another example of how our thinking evolved is around the value of diversified vs sector-specific venture funds. Atlas was a diversified fund for the first 30 years or so of its existence, and I certainly professed the value of that diversification. Now being on this side of Atlas’ sector-based split into two firms, it seems like such a no-brainer to focus purely on biotech – hindsight is 20:20.

So with an industry and firm backdrop changing this dynamically, blogging is in some ways very risky: you put ideas and perspectives out there in the permanence of the web, forever to be scrutinized – some of these ideas may have seemed right at the time but weren’t in hindsight, or at the very least weren’t nuanced enough. If you’re unhappy about potentially being wrong, you shouldn’t blog in this age of internet perpetuity – it’s bound to happen. But for most of us, change is a constant and we’re happy to evolve our thinking in light of new data (or let new data further reinforce our existing perspectives).

With that context, I thought I’d share a few thoughts about why I have continued to blog, and highlight the advantages to doing it.

First, it’s fun and something I enjoy doing – my guess is most active bloggers would say this is the primary driver – I love writing and always have. Farther back in time, and a long-held secret, I was once the Opinion Editor of my high school paper, the Indian Post, some twenty-five years ago (thankfully there are no online archives). And, no surprise to people who know me, I also love data – analyzing it, boiling up some conclusions, and sharing it – and this has been a steady diet for me with LifeSciVC.

But beyond it just being a fun thing to do, I see at least five business-relevant reasons for blogging:

  • Share. A blog creates a medium for a writer to share their perspective on important topics to the industry and offers a forum for potential thought leadership. I’ve chosen to use data as an extensive part of my approach, and I’ve used blogs frequently as discussion-starters with Limited Partners, entrepreneurs, co-investors, etc. Many of the “best of” posts from the past (summarized here, here) capture some of the more engaging pieces that have triggered these discussions.
  • Reach. Blogging goes well beyond the borders of our conventional, physical social networks. LifeSciVC has readers across the US, Europe and Asia, and even a few in Africa. Along with a reasonable reach into the biotech and pharma industry, there are lots of students, financial types, economic development professionals, and many others outside our sector who have come across the blog. Since inception, the site has had over 800K page views, not including the readership channeled via mirror-posting at Forbes (here).
  • Shape. A thoughtful blog is a far more powerful tool than a banal press release at conveying the “inside baseball” or colorful narrative that often defines a story or topic. I’ve used blogs to share case studies of winners and losers alike. It also lets you strategically define your message, and your firm’s, with far more control and refinement than conventional channels.
  • Impact. This is impossible to measure, in part because it’s often unclear what impact a blog is trying to have. But it’s fair to say that a good blog can raise one’s profile and strengthen both a personal and firm brand. It’s not uncommon for us to meet with Pharma exec’s or LP’s and have them mention something about a recent LifeSciVC post, which helps us build deeper and more substantive connections with key stakeholders.
  • Extend. Lastly, once a reasonable platform of readership is built, it can become a valuable tool to leverage more broadly at a firm or franchise level. Back in 2014, almost exactly two years ago, the From The Trenches feature of LifeSciVC was launched with a few of our entrepreneurs; today we’ve had over 19 C-level entrepreneurs from our portfolio contribute thought pieces on the site. These add unique perspectives to the mix, and have been very well received – creating value for the writers as well as the LifeSciVC audience.

So why don’t more biotech and venture capital professionals blog?

The biggest barrier is almost certainly inertia and time. You need to commit to dedicating a certain amount of time per week to blogging or it just won’t happen. Plus, you need to put out frequent content to warrant following and building up a readership. My favorite blog-writing time is at 6am right after being caffeinated – it’s time that I try to block off multiple times a week. The writing itself gets easier and easier, for sure, but coming up with content is sometimes challenging. I’ve come to appreciate that writer’s-block is indeed a real phenomenon (so feel free to share blog ideas anytime).

Some may be hesitant to put themselves out there, facing the potential criticism of having your opinions naked up on the web. But I’d argue that in a world filled with the real-time nature of social media, blogging actually gives one far more control over your message than finding yourself referenced in a context-less tweet after speaking on a conference panel session.

In my first blog post, I mentioned three reasons for starting it: (a) biotech isn’t well represented in the blogging world and this affects how other stakeholders (like LP’s) see the sector; (b) analyzing and articulating data-infused perspectives is part of my therapy as a “recovering” scientist; and (c) social media connectivity is exploding and blogging is just a natural extension of interactive platforms like Twitter. As they were back in 2011, and again in 2013 at my last “reflection”, all of these three reasons remain well intact today.

It would be great to see more biotech VCs and BioPharma R&D executives engage in the exchange of ideas and perspectives via blogging. I love reading Derek Lowe’s In The Pipeline, David Grainger’s DrugBaron blog, and Robert Plenge of Merck’s blog on drug discovery and genetics. I know many Big Pharma exec’s have internal blogs, and presumably compliance officers prevent them from being shared externally; this is a loss, and hopefully will change over time. I also love the contributor model in place at Forbes that Matt Herper and others have pulled together – some great writers like David Shaywitz, ex-Pfizer R&D head John LaMattina, and Luke Timmerman contribute there. Xconomy’s distributed model also works, and my partner Jason Rhodes has begun writing there (first post here).

But even with these we just scratch the surface – we need more practitioners in drug R&D and venture capital to contribute to the dialogue for the betterment of the sector – more transparency, more challenge, more idea-vetting in the ecosystem. A more active, open debate about topics like translational medicine, R&D productivity, venture capital investment models, and external R&D innovation would be very healthy.

Let’s hope when I write the 10-year reflection in 2021, the blogosphere of biotech has a much broader set of voices.  And hopefully they are opining on the greatest decade-long bull market in the history of the industry…


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