Deep Tech: From Lab to Market with Benjamin Joffe

First, let’s state that I have been a fan of Xavier since I was first invited to speak about hardware startups at his Hello Tomorrow Global Summit in 2016. Hello Tomorrow is a #deeptech community, and its Summit is the largest deep tech event in the world, featuring yearly 500 global startups.

I was impressed by the production quality and general vibe; I’ve attended every year since then, and it only got better (trivia: on that day, I also remember meeting another man who talked about embracing tech entrepreneurship. He shook everyone’s hand on his way to the stage, where he was speaking right before me. Can you guess who that was?).

ABOUT XAVIER AND HELLO TOMORROW

Now, Xavier Duportet turned out to be more than the founder of what is probably the world’s largest deep tech event. He’s also a synthetic biology PhD with an unusual path:

• He was born in France, grew a passion for insects (especially ants — he hosts a colony of leaf-cutter ants from Trinidad in his office) that lead him to an internship in a genetics lab at age 12, which ignited his passion for science.
• Fast forward a few years, after a first startup attempt, he earned his PhD across multiple labs including a stay at MIT which had a profound effect on his mindset and understanding of ecosystems.
• He came back to France and became a catalyst in the emerging deep tech community by founding in 2011 a non-profit called Hello Tomorrow to bring together scientists, investors and corporates. Today, the event is — afaik — the largest deep tech conference in the world and highlights every year 500 of the top early stage startups. The next summit will take place in Paris and online in October 2020.
• In 2018, he co-founded Deeptech Founders, a 6-months program that already helped hundreds of global scientists and engineers to accelerate their startup projects.
• Today, he is the founder of Eligo Bioscience, a biotech startup using CRISPR to create a new class of biotherapeutic agents to selectively intervene on the microbiome. Eligo raised $27.4M from French and US investors including Khosla Ventures and Seventure Partners.
• Finally, Xavier has been selected as a World Economic Forum Pioneer and Young Global Leader, as well as one of the top innovators under 35 by MIT.

OVERVIEW

• In this episode, Xavier shares ideas about science entrepreneurship and the importance of a product-driven mindset.
• We also discuss how co-founders need be complementary, and combine technology with storytelling and networks to succeed.
• Finally, he shares his hopes about deep tech’s ability to solve critical problems that digital alone can’t solve, and the importance of accessible role models to support this mission (his historical role model could be called ‘the Edison of biology’ — here is one of his key patents).

REFERENCES MENTIONED

• Eligo Bioscience, Xavier’s startup developing new therapies for the microbiome.
• Deeptech Founders, a training program for global founders.
• Hello Tomorrow, organizers of the largest deep tech event in the world.
• Tim Lu, Associate Professor of Biological Engineering and Electrical Engineering and Computer Science at MIT
• The Story of Louis Pasteur. A documentary from 1936 on this unique science entrepreneur.
• A brief history of Genentech, the first publicly-owned biotech company (IPO in 1980 thanks notably to its groundbreaking synthetic insulin).

PREVIOUS EPISODES

This is a a live panel ran by SOSV to introduce and discuss solutions funded by some of the most active investors in deep tech startups fighting Covid-19.

• Each of the three funds (Fifty Years, Khosla Ventures, SOSV) published an impressive list of their relevant portfolio startups.
• IndieBio even made a call to fund Covid-fighting startups as part of its newly launched NYC program.
• Here are the full video and slides.
• If you’d like to know about future events, follow us on Twitter at @SOSV or sign up to our newsletter.
  

This podcast is hosted by Benjamin Joffe, Partner at SOSV, a global early stage fund focused on deep tech with over $700m under management. SOSV runs multiple accelerator programs, including HAX (intelligent hardware) and IndieBio (life sciences).

Episode Overview

This recording has 3 parts:

• Part 1: Some non-biotech solutions, from 3D printing to robotics,
• Part 2, VCs present solutions from their portfolio (mostly biotech),
• Part 3: Q&A.
  

The speakers are:

• Seth Bannon, Founding Partner at Fifty Years,
• Alex Morgan, MD PhD, Partner at Khosla Ventures,
• Jun Axup, PhD, Partner at IndieBio (SOSV).
  

Introduction & Moderation:

• Benjamin Joffe, Partner at SOSV
• Julie Wolf, PhD, Communications Director at IndieBio NYC (SOSV)
  

Part 1

Introduction by Benjamin Joffe, Partner at SOSV

a. What has changed since SARS?

SARS was in 2003. In the span of 17 years, several important developments happened:

• Low-cost genetic tests
• Sensors & robots
• Cloud solutions
  

The challenge of current solutions remain costs, timing and scalability.

b. Prevention

A hundred years ago, prevention was mostly... masks.

Today, we have a much better understanding of the modes of infection of viruses, and many new tools to prevent it.

c. 3D Printing

While we’re still far from the ‘3D printing revolution’ that was announced 10 years ago, some high-resolution 3D printing technology is able to supply useful parts quickly, at low cost, and on-site.

Clips and buckles for masks or door handles but also test swabs.

d. Protecting our face

We need to protect our face from others, but also from ourselves:

• Many masks don’t effectively protect against infection as the virus is too small (about 120nm). Verdex (a SOSV portfolio company) has developed a nanofiber material that filters out particles above 100nm — effectively blocking the virus — and is also more breathable.
• HabitAware, a HAX portfolio company, had created a machine-learning-powered bracelet to prevent body-focused repetitive behaviors (e.g. nail biting) by recognizing and alerting of specific gestures. The pandemic provided a new direct application of their technology

Eric Rosenblum is a Managing Partner at Tsingyuan Ventures, an early stage US fund with over $100m under management. They believe in the opportunity of cross-border and cross-discipline investments and focus primarily on US-based science startups founded by the Chinese tech diaspora.

• Prior to co-founding Tsingyuan Ventures, Eric graduated from Harvard, worked at BCG then got an MBA at MIT and worked as a management consultant and serial entrepreneur in China for 14 years.
• Eric was one of the rare foreign co-founders of multiple tech startups during China’s early Internet wave, and his ventures led to 2 exits (M&As for ChinaNOW and SmartPay).
• Coming back to the states, he then worked at Google and Palantir before co-founding Tsingyuan Ventures with former members of the TEEC Angel Fund.
• TEEC started as a network of Tsinghua University alumni (Tsinghua Entrepreneur & Executive Club (Tsinghua is like the MIT + Harvard of China) and wrote the first checks in 5 unicorns: Ginkgo Bioworks, Carta, Quanergy, Plus.ai, Zoom, and about 160 tech startups.
• While it is a US fund, the Tsingyuan name reflects its focus and strategy by combining part of the Tsinghua (清) name and ‘source/origin’ (源).

Some context

This episode is particularly timely following the recent ‘Proclamation on the Suspension of Entry as Nonimmigrants of Certain Students and Researchers from the People’s Republic of China’ by the White House.

According to the Department of Homeland Security, in the 2018–19 academic year, there were enrolled at U.S. universities:

• 272,470 undergraduate and graduate students from China.
• 84,480 were in a graduate-level STEM program.

These restrictions are focused on students coming from mainland universities associated with the army, but might impact the ‘intellectual balance of trade’ that had been so favorable to the US so far.

Episode Overview

In this episode, we discuss:

• The early days of China’s tech scene and the waves of Chinese PhDs in the US, to highlight the upcoming surge in opportunities, particularly with the many applications of AI at scale.
• The intellectual balance of trade, and the value of this asset for the US.
• The role of non-state actors like Google, Baidu or Alibaba as talent factories .
• The 10-year lag between the moment a foreign student comes for a few years and starts a company, and why he believes we’re still just seeing the upswing of the wave.
• China’s advances with regulation, local support and public acceptance of technology for the new wave of data-driven startups.
• Analogies with basketball and pingpong to compare the impact and legacy of drafting outstanding talent into a system, and the risks of making the talent trade balance less favorable to America.
• How cross-border talent will be key to create more truly global champions from the US.

References Mentioned

• Eric mentions successful companies founded by the Chinese diaspora (including Guitar Hero, Nvidia, Zoom, etc.) More here.
• In addition to cross-border, Eric makes the case for cross-disciplinary investments here.

Last, here are Eric's all-time favorites, that also happen to be very timely:

• Taylor Branch’s series on MLK Jr. Starting with “Parting the Waters”.
• Robert Caro’s series on Lyndon Johnson. Starting with “The Path to Power”.
• (his most recent read): The Fire is Upon Us (about the epic debate between William F Buckley Jr ...

Leslie Jump is the CEO and Mack Kolarich the CPO of Different, an organization that helps institutions and family offices discover, analyze, diligence, and select venture capital funds.

• They recently completed a remarkable DeepTech Investing Report based on more than 150 interviews with VCs, LPs and other stakeholders.
• The report was funded by Schmidt Futures, a philanthropic vehicle created by former Google & Alphabet Chairman Eric Schmidt and his wife Wendy to “advance society through technology, inspire breakthroughs in scientific knowledge, and promote shared prosperity”.

Prior to Different, Leslie and Mack had diverse experiences including founding and investing in tech companies, and running investment workshops around the world.

This podcast is hosted by Benjamin Joffe, Partner at SOSV, a global early stage fund focused on deep tech. SOSV runs multiple accelerator programs including HAX (intelligent hardware) and IndieBio (life sciences).

Episode Overview

In a recent podcast with Joe Rogan, Elon Musk said:

This seems especially true in deep tech.

In this episode, we discuss:

• How scientific entrepreneurs are under-capitalized relative to the market and relative to their own potential.
• What are the causes of this capital gap.
• How media and others have trained VCs and LPs to look for, and expect unicorns, outliers and outsized multiples.
• The optics problem of science vs. software startups with LPs and banks.
• How most deep tech funds partners don’t have PhDs, but rely on networks on experts.
• How — since when asked about a startup potential, 3 PhDs will give you 3 different answers — the job of investors is to figure out which one to believe.
• How talent is spread out geographically more than we might expect, and how deep tech startups do not only come from universities.
• The challenge of training or complementing scientists with business skills , particularly in ecosystems without a critical mass of business talent.
• How LPs suffer from network bias when picking VC funds, and why only a minority is able to vest new deep tech funds, thinking ‘I don’t know how to know if they know what they’re doing’.
• Why, within the ‘alternative assets ’ class, deep tech funds combine the highest risk, highest fees, longest terms, but also how delivering superior returns require new approaches , and how Covid-19 demonstrates that we need deep tech more than ever.
• How deep tech startups differ from FMCG or SaaS companies, and why investors might have to custom-design KPIs for each company.
• How looking outside of tech helps think differently about tech.

References Mentioned

• Different and their DeepTech Investing Report
• Abstract: The Art of Design (Netflix)
• The World’s Most Extraordinary Homes (Netflix)
• The Colors of History: How Colors Shaped the World (book)
• Pepper: A History of the World’s Most Influential Spice (book)
• The Mote in God’s Eye (sci-fi book)
• Ubongo: a leading edutainment company based in Tanzania.

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• Podcast:

Sota Nagano is a Partner at Abies Ventures, a $40m early stage deep tech fund based in Tokyo backed by Taizo Son, a billionare active tech investor, and younger brother of Masa, creator of the famous Vision Fund.

• Abies Ventures invests in Japan and abroad in industrial tech,
• But also opportunistically in multiple sectors including advanced sensors, space tech and life sciences.

Prior to Abies, Sota studied in the US and Italy, worked on Wall Street. He then co-founded an automotive engineering startup named GLM, which Financial Times called Japan’s Tesla, and which he took public for $1.5B in 2017.

This podcast is hosted by Benjamin Joffe, Partner at SOSV, a global early stage fund focused on deep tech with over $700m under management.

• SOSV runs multiple accelerator programs, including HAX (intelligent hardware) and IndieBio (life sciences).
• SOSV is also investing in Japan, via our hardware accelerator program HAX. We opened an office in Tokyo in 2019 with the support of Sumitomo, one of our key Japanese LPs.

Episode Overview

In this episode, we discuss:

• Sota’s journey to deep tech investment,
• The competitive advantages of Abies thanks to their broad industry network.
• The most promising deep tech sectors in Japan and the opportunities for exits, notably with fast IPOs.
• Finally, Sota shares his thought about the cost of failure in Japan, and the parallels he sees between Japan’s tech sector and the situation described in Ayn Rand’s Atlas Shrugged.

References Mentioned

• Mistletoe: Taizo Son’s global investment vehicle for the startup ecosystem.
• Euglena (Japan): $600m public company using ‘euglena’ (single cell flagellate eukaryotes) for food supplements, beauty care, biofuel and more. The stock peaked around $2 bln in 2013.
• Cyberdyne (Japan): the ominous-sounding $500m public company makes futuristic exoskeletons. The stock peaked over $3 bln in 2016.
• JAXA (Japan Aerospace Exploration Agency): Japan’s NASA.
• Ultrasense Systems (USA): small ultrasound 3D sensors for next-generation UI.
• Algal Bio (Japan): a biotech startup that uses thousands of strains of algae to produce functional nutrients, fatty acid, and carotenoids that have applications in food products, cosmetics, medicine, and fuel.
• Pixie Dust (Japan): ultrasound array technology for control and interfaces, founded by Dr. Yoichi Ochiai (@ochyai on Twitter, with over 400k followers, on YouTube and video program on Newspicks, in Japanese). Raised $55.1 million.
• Atlas Shrugged, by Ayn Rand
• Layer Cake, starring pre-007 Daniel Craig as a cool-headed drug lord.

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