Opportunity of a lifetime coming: lessons from the 1980’s

by David.Chiang@SageNResearch.com

First off, I may need to apologize to those who take offense at the equivalent of someone trying to lift spirits at a funeral, as I am not trying to make light of the seriousness of today’s challenging economic circumstances.

However, I subscribe to the philosophy of author Anthony Robbins and others that there is always a positive to any negative, and that a proper mindset is key to move yourself forward, no matter what life throws at you. If life gives you lemons, it’s an opportunity to build a lemonade business empire.

Today, it is more important than ever to focus one’s mind on a positive path forward, because quite honestly, there are signs that the post-recession recovery could well be the opportunity of a lifetime for many of you!

It may seem perverse to have such a view given the prevalence of all the bad news, but history is on my side.

In fact, for those of you relatively early in your career, with at least 10 to 20 good working years ahead of you, I believe the career gods may well be smiling on you, as you have the best chances of catching the wave of the upcoming Biotech Revolution 2.0 — the one centered around proteins rather than DNA or cDNA.

Let me explain why this is so, and what you must know to win big in the next decades.

Phoenix from Ashes

I can tell you from direct personal experience that recessions can turn into boom times very quickly without warning if the conditions are right. From what I see, those conditions apply today.

In 1985, I started working in Silicon Valley during one of the worst recessions ever, much like today. Within 5 short years, the company I later joined (Altera) went public, making instant multi-millionaires of early employees. Another 10 years later, I was at Xilinx where 1/3 of its 1500 employees worldwide were millionaires, including the mailroom clerk! These were not isolated cases, but among hundreds of successful new semiconductor companies formed since the 1980’s.

Such is the transformational powers of a technology revolution when its time has come. And it happened quickly without much warning.

Today vs. 1980’s: Deja Vu All Over Again

The parallels between the 1980’s recession and today are uncanny.

Both were the “worst recession since the Great Depression” with record unemployment. There was even a banking crisis requiring massive taxpayer bailout (the Savings and Loan Crisis), as well as a new US president elected based on “hope” (Ronald Reagan). Foreclosures were rampant. Many people felt scared about their future, just like today.

Geometrically more with Moore’s Law

Within the economic ashes laid the seeds of renewal. In addition to all the bad things that happen, deep recessions also clear out weak or non-serious competitors (most retreat to their core competency), and set the stage for innovative, value-added companies to grow unhindered. Note that 16 of the 30 Dow Jones companies were started during a recession or depression, including Disney, Hewlett Packard, Microsoft, MTV, and Proctor & Gamble.

During the 1980’s, those who understood semiconductor technology knew that a quiet revolution was brewing — the technology basis for Moore’s Law — that will revolutionize electronics through geometric scaling. It surmised that a chip will have geometrically more transistors over time — about double every 18 months or 10x every 5 years, leading to exponential improvements in benefits and cost. (Imagine the implications to drug discovery: In the 15 years of a traditional drug development cycle, electronics and computers improve by 1000 times.)

In the early 1980’s, after more than 15 years of steady progress, the new “MOS” semiconductor technology finally reached its tipping point by enabling 100K+ transistors per chip, surpassing its older competition called “bipolar” technology. It also created a demand for newly trained engineers capable of handling larger, more complex chip designs using computers and software. (Previously chip designs had less than 10K transistors and were simple enough to be analyzed by hand.)

In fact, the availability of new talent able to handle new complex designs became the rate-limiting step for a company’s growth, allowing then-midsized companies like Intel to overtake much larger companies like RCA. After all, more complex chips were more valuable to end-customers, driving higher profits for both the vendor and end-user.

10 People to $1B Sales

The tipping point of Moore’s Law also spawned a whole new software industry focused on tools to analyze large chip designs.

Initial semiconductor software were prototype-quality software from academia developed in a hurry, and were difficult to use, not very robust, and difficult to maintain. The first generation of tools also had problems with false positives (sound familiar?).

However, this changed as the economic incentives to handle geometrically more complex chips drove rapid improvements. Then-tiny 10-person companies like Cadence Design Systems grew to become billion-dollar enterprises, whose value proposition enabled well-trained engineers to analyze and accelerate ever-larger and more profitable projects. (Did I mention that  Sage-N Research is a small company today focused on large datasets?)

In effect, people who were expert users of those advanced tools became the productivity stars of the new industry.

Geometrically more with mass specs

Today, I see a similar technology revolution brewing in proteomics mass spectrometry.

After more than 15 years of steady progress, advanced “Proteomics 2.0″ technology — the ability to analyze 100K’s to 1M’s of peptides including post-translational modifications (PTMs) — is reaching a tipping point due to instrumentation (e.g. Orbitrap), algorithms (e.g. Ascore), and sample preparation innovations.

It is a true “Digital Biology” technology in being geometrically scalable, a Moore’s Law of sorts, allowing exponentially more peptides to be analyzed from ever smaller sample sizes. Given proper economic incentives, mass spectrometry can continue to geometrically improve in speed and sensitivity.

Suddenly, protein scientists can see more than one protein or one PTM at a time — a valuable first-mover competitive advantage for strategically minded biopharmaceutical labs.

Oncology as proteomics killer app

This technology is increasingly relevant for worldwide interest in novel cancer drugs, particularly kinase inhibitors that make up an astonishing 1/3 of all new drug programs. (Since tyrosine phosphorylation is not labile, the Ascore algorithm works very nicely here.) However, it requires skillful researchers technically capable of handling large proteomic datasets using relatively complex software on systems like the SORCERER 2, as well as performing tricky sample prep protocols.

Other research areas like stem cells and neurodegenerative disorders will also benefit, as proteomics allows access to PTMs out of reach by gene expression technologies.

It’s good to be king

In a high-growth, hyper-competitive market like cancer drugs, smart companies will be looking for competitive advantages that allow them to do more as well as more quickly. The researchers skilled in new advanced technology will be in high demand, especially by industry that will increasingly become the primary source of research funding and innovation.

If my prediction is correct, they will have the most rewarding experience that professional life can offer — the possibility for fame and fortune while doing what they enjoy, working with talented people of like minds, and being adequately funded without mounds of paperwork.

Even tenured academics will benefit from the rise of industry through commercial partnerships and consulting relationships. For example, many semiconductor professors had part-time stints as chief technical officers or venture capitalists and were compensated handsomely for success.

Not everyone benefits in a revolution

On that note, I should say that there was a flip-side to the semiconductor glory days. Not everyone benefited — only those who added value in the new world order.

The big meteor said to have hit the earth 65 million years ago caused a great revolution for mammals, but not for dinosaurs. (Don’t be a dinosaur.)

As the new industry exploded onto the scene, some perished. Government funding of basic research dried up. (Industry had more money and was more efficient investing it for results.) University analysis labs closed, but the best people started lucrative commercial labs.

The more traditional practitioners — those more comfortable with traditional manual analyses (equivalent of Edman sequencing) — started to fade away.

Nevertheless, the field as whole grew exponentially, and those who added value in the post-revolutionary world benefited greatly.

Thriving in the Digital Biology Era

A major revolution is happening in proteomics and in all of life science. The 1990’s were about cloning Dolly and knocking out mice, but the 2000’s are increasingly about DNA sequencing, microarrays, and proteomics — all true “digital”, geometrically scaled technologies.

A digital revolution can take 15 years or more to reach tipping point, as for digital cameras after first introduction in 1990. But once it happens, the competitive landscape is completely and fundamentally changed forever, often with new leaders — sometimes very small companies — decisively displacing the old guard.

This is happening right now in biology, and so it pays to prepare. Training in advanced technology is the key.