Luck, Curiosity, Naivete: The Essential Ingredients of Innovation
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The fund manager’s next door neighbor had a kid with cystic fibrosis, and thought the company’s inhaled antibiotic sounded interesting for it. Later, when it came time to raise more money in a secondary stock offering, the investor bought again. Why? The fund manager saw the 10-year-old child riding a bike, knew the kid was in the clinical trial, and surmised the drug must be working. (If you passed biostatistics 101, feel free to laugh out loud now). “So I was saved by a 10-year-old kid on a bike,” Montgomery said. “You really can’t take your own success too seriously sometimes.”
On how universities could develop more future leaders: “We need to think about how to train people to not just be technically great, but to be leaders. The universities encourage individual performance, and not so much teamwork.” That’s because individual stars are more likely to become grant-winning academic scientists of the future, Montgomery says. Training people to work better in teams, like they must in industry, would be more helpful.
On how to sustain a company in an economic downturn: Montgomery advised getting a diversified investor base, of VCs that invest because they believe in your technology, some that believe in the management team, and some that invest because you fit their strategy of, say, developing late-stage projects. This way, if the technology suffers a setback, some investors will want to get out, but others will stick with you for other reasons. “Hard times are going to happen, you’ll have bad days. You need a diverse investor group.”
On advice to President-elect Obama: The incoming president will have to appoint a strong FDA commissioner, Montgomery said. The FDA is paralyzed, he said, because it has gotten beaten up in Congress over drug-safety scandals like with Merck’s Vioxx. In the last week, the FDA’s safety division said the newer generation of asthma drugs aren’t safe. He called the decision “unscientific” and pointed out that even drug safety critic Sidney Wolfe of Public Citizen said the FDA went too far in castigating the asthma drugs. “The safety people at FDA are running amok,” Montgomery said. He noted he’s encouraged that Obama has picked physics Nobel Laureate Steven Chu of Lawrence Berkeley National Laboratory as the nominee for Secretary of Energy. Montgomery also wants to see a talented head of the National Institutes of Health, who will push to reward more innovative research for the future, rather than letting it become “too much of a good ol’ boy system.” He added, “Obama wants to hire the smartest people, the whiz kids, like Kennedy did. I want to see more of that.”
On roadblocks to innovation: “IP is a real minefield.” He singled out his former nemesis, Chiron, for demanding exorbitant royalties to license patents on its work for hepatitis C, which stifled the field of research for years.
On innovation think tanks, or centers for the study of innovation: “They are worthless.” Margaret Mead had it right when she said that ‘a small group of thoughtful, committed citizens can change the world, Indeed, it’s the only thing that ever has.’” He added, “If you leave innovation in small companies, add water and money, you’ll get growth.”