How to Build a Billion-Dollar Company (And Keep An Academic Day Job), According to David Walt
Anyone compiling a list of the most successful life sciences entrepreneurs of the past decade would have to consider a soft-spoken academic named David Walt. He’s the chemistry professor at Medford, MA-based Tufts University who co-founded Illumina in 1998.
San Diego-based Illumina (NASDAQ: ILMN) found its niche in the past decade by boosting the efficiency of fiber-optic sensors to do high-speed analysis of genes, and the subtle ways they can get turned on or off. It’s one of the bigger success stories in San Diego’s biotech cluster, having grown to 1,600 employees and a stock market valuation of more than $4 billion.
I spoke with Walt last week when he was in Seattle to give a keynote presentation at a bioengineering entrepreneurship symposium organized by professor Buddy Ratner at the University of Washington. During his talk, Walt offered some valuable lessons learned from his Illumina experience to young scientists thinking about the entrepreneurial leap.
Walt, 56, urged the young scientists to align themselves with seasoned venture capitalists, who can introduce them to people with the best business skills to implement a new idea. His big break came one day when he gave a talk about his research at The Scripps Research Institute in San Diego, and venture capitalist Larry Bock was in the audience. Bock followed up with him to learn more, and ended up providing seed capital to Illumina, along with Arch Venture Partners and Venrock Associates.
“A lot of this has to do with human relationships, and the serendipity of who you bump into,” Walt said.
While Walt encouraged scientists to think about entrepreneurship, he warned them they have to be willing to accept the realities of business. “Decisions get made at a company for business. The goal is to make money, not to support your lab,” he said.
And, while starting a company that ultimately succeeds can pay off for years’ worth of royalty streams and the coolest new “widgets” to keep an academic lab doing groundbreaking science, there isn’t much glory in it, he said.
“Don’t do it for your ego,” Walt said. “If you’re successful, you will not be recognized. The only people who will know who you are on the board of directors and senior management. You need to prepare for that.”
I followed up with Walt after his talk to ask about some things he didn’t cover, including the race to make gene sequencing better, faster, and cheaper—and his thoughts on his latest idea for a company that he hopes will make it big, Cambridge, MA-based Quanterix.
Here are edited highlights from the exclusive interview:
Xconomy: There’s been a lot of talk lately about bringing down the cost of sequencing entire human genomes to $5,000. Is that really possible or realistic?
David Walt: Absolutely. I think the $5,000 genome is going to be here within a couple years. Right now, Illumina has announced it can do consumer sequencing for $40,000. The expectation is that there will be a decrease in the price in the next few years. That’s for raw sequence. People are still going to have to access bioinformatics to be able to interpret the genome. But for raw sequence, the scientific community is probably not going to be that far off from the $1,000 genome in three or four years.
X: Is there some peril in this race when people are trying to bring the cost down this quickly? Are we going to get a lot of errors, bad sequences from this?
DW: No. There’s a lot happening … Next Page »