I was the Master of Ceremonies at the Cambridge Phenomenon Conference this past Tuesday - which was a tremendous day - walking amongst the giants of Cambridge. I learned a lot, and thought I would share with you what I had learned - specifically about the bioscience space and how it will develop. Much focus was on how to build sustainable consolidators not just acquirable consolidated companies. Some interesting discussion on how to transfer what is a game of Chutes and Ladders [the lifecycle of a startup] into a Game of Success where you make your own luck and plan resilience, and win consistently.
Julie
- Cambridge Consultants founding in 1960 was a shock to the university that Tim Eiloart and David Southward proposed that the best brains should be in service to industry
- Solutions today are multi-disciplinary, global and technical/practical
Dr Andrew Herbert of Microsoft Research spoke about Molecular Programming. He posed the fundamental question of how do we build structures that are smaller than our tools? We can't; structures should build themselves. Then he described the rather interesting concept of molecular self-assembly. You can predict genetic outcomes with medical doctors by running a simulation.
Warren East, the CEO of ARM Holdings, spoke of a "A Personal Digital World" which will be independent of form factor. They alighted on their business model in 1990 which is a "sharing business model" [some shades of Ariadne's "Ecosystem Economics" here] where their destiny is linked with that of their partners - sharing the risks and rewards. Warren said that Sir Robin Saxby had believed in success before success happened, and had had a global outlook from the beginning.
Mike Lynch, founder and CEO of Autonomy, which is a $6 billion business intelligence software firm and the largest software firm in the UK shared:
- The world's 400 largest software companies use Autonomy's probability theory
- BLINX - one of their spin-outs - has now a $400 million market cap
- A database looks at defined info, but most of the world's data is unstructured; the ability to understand meaning and probability from conditional relationships in an unstructured data set is what Autonomy does.
- They are very interested in healthcare, and I got the sense from a follow up meeting with Mike on Wednesday that we could potentially interest him in private investing in/with Net Scientific if the relationship was developed
- had a door in the early days of Autonomy marked - "Authorised Personnel Only" which was just a broom closet, but it made them look bigger than they were....
Andy Richards, a bioscience investor, said
- Cambridge is a "low risk environment for an individual to take a high risk".
- "We still don't understand a lot about biology"
- Two drivers:
- The entire activity chain is regulated in bioscience - inhibits innovation
- Market Access - medical system in the UK is poor for new drug take - up, so UK market becomes a low priority for bioscientist entrepreneurs.
- Positive though is that the same product not a version of it can be traced through the value chain
- GlaxoSmithKlein cannot engage with you personally; Pharma cannot innovate because of the regulation burden
- Personalised healthcare will come but it will be driven by the Microsofts and IT players not Pharma; "open systems trump closed systems"
John West, Solexa CEO, spoke about genome sequencing
- major problem in bioscience investing is that timecycle is too long;
- When asked whether all of this new healthcare/bioscience would result in an unfair society, John said that he felt high-end consumers of private healthcare and new products from the bioscience world were "early adopters" and would fund the adoption of many new medical technologies.
- Proposition 71 - the funding of stem cell research; an example of non-dilutitive funding; need to be more thoughtful about how to fund medical breakthroughs
- Will there be a consumerisation of medical technology killer application just like Skype was the killer ap which drove the consumerisation of technology in the early 2000's.
David Roux, Chairman of SilverLake Partners:
- Capital scarcity that you may feel here doesn't exist elsewhere; you must source capital globally
- Cambridge needs to build a "headquarter culture" - meaning where more companies like Autonomy or ARM have their headquarters in Cambridge, and they are giants of the industry. Why? Where do you get the best acorns? Not from the government or VC's, but from big forests and trees - meaning - new spin outs from big companies are the way to build successful clusters, and growth communities like Silicon Valley
- The Unit Economics of your business must be profitable. You may be interested in funding your dream, but no one else is.
- Corporate Veal Production - don't sell your best companies too soon.
- Money is the ultimate commodity; it simply moves to the right places where it will be offered the best return.
- The "Myth of Professional Management" - nothing trumps founder passion and persistence.
Jean Tardy-Joubert, Qatalyst:
- What will drive M&A?
- shift of industries from horizontal to vertical
- cloud, Saas, virtualisation
- data management - unstructured
- the web - social, local, realtime, mobile
- payments
Sherry Coutu:
- The rise of the micro VC and super angel fund [a la Ariadne Capital]
Anil Hansjee, Google EMEA M&A:
- being part of a larger parent may be the best way for an entrepreneur
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