The transcript from this week’s MiB: Safi Bahcall, Loonshots, is below.
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VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
BARRY RITHOLTZ, HOST, BLOOMBERG RADIO: This week on the podcast, I have an extra special guest. His name is Safi Bahcall and he’s the author of a fascinating book called, “Loonshots.” Not only was he on President Obama’s council on the future of technology but he has consulted for the CIA, the Navy, all sorts of organizations teaching them how to nurture innovation in institutions that normally are not very good at that sort of thing.
He’s really a fascinating guy, background in physics, ran a biotech company and along the way, picked up lots of insights into what leads to successful moon shots as projects and why so much innovation is really just smothered in the lab, smothered in the cradle when it has potential to literally change the war, the radars.
Arguably, the technology that won the war for the allies, it had been sitting in in the Navy for 18 years unused and had it not been discovered and brought forward by Vannevar Bush and other people, there’s a very real chance the global map would look totally different.
So, I think you’ll find this conversation to be absolutely fascinating. My conversation with Safi Bahcall.
VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: My extra special guest this week is Safi Bahcall. He is the former CEO and co-founder of Synta Pharmaceuticals. He served on President Obama’s Council of science advisors and he is the author of “Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases and Transform Industries.” Safi Bahcall, welcome to Bloomberg.
SAFI BAHCALL, PHYSICIST AND BIOTECH ENTREPRENEUR: Thanks, Barry. Glad to be here.
RITHOLTZ: So, you have a really fascinating background. Both your parents are physicists or astrophysicists. You eventually go to Harvard, get a degree in theoretical physics, go to Stanford for your PhD in physics, how on Earth does that lead to a career in biotech?
BAHCALL: I was in a little bit of a random walk. But I spent probably the first 29, 30 years of my life on a university and — because my parents were physicists. We grew up in Princeton and then I was in college and then grad school and then post-doc and going to the faculty staff.
And at some point, I realized, and this might be a little shocking, that more than 99.9 percent of the people are not in the world or not theoretical physicists or mathematicians. They do stuff out there. They write papers and go to conferences and I just got curious.
RITHOLTZ: So, you started looking around. How do you go from theoretical physics to stumble into via random walk biotech?
BAHCALL: I was just curious about what is it that makes the world go around and what other people do when they’re not writing papers about mathematics or physics and I — actually, I remember, I was dating a woman at that time and she had a – she was working as a paralegal, which was real job and I’ve never been to an office and I remember asking her, could you take me in — I was in my mid-20, could you take me into this thing you call an office?
RITHOLTZ: Did it horrify you?
BAHCALL: Well, I remember she said, well, listen, I can take you on Friday happy hour. That’s when people start to stand around and can talk. And so, I came in Friday happy hour and I said, well, what should I ask, and she said, well, look, are you happy doing what you’re doing.
And I went around, it was actually a well-known law firm in Silicon Valley and I said, are you happy doing what you’re doing, and I would say pf the 25 people I asked, 25 said no. And I was like, well, that probably set me back another five years in the academic world.
But I just got very curious. And so, I heard from another physicist friend who had gone into consulting world and they had sort of — they’d helped me transition. They kind of …
RITHOLTZ: From academia to a business.
BAHCALL: Yes. So, I went to a consulting firm in New York called McKinsey …
BAHCALL: … and it’s …
RITHOLTZ: (Inaudible) company, always in the news.
BAHCALL: Yes. In the news a lot lately. And it’s kind of like a halfway house for academics. It’s sort of like they don’t want to let you lose on the real world and they sort of coach you on the skills you need to survive, how to speak to people, how to work on teams, how to solve real problems.
And so, that’s how I got a sense of kind of how the real world works. And then I got a taste for wanting to do something, build something, and also bigger than myself, bigger than your own career or your own papers or your own ideas, and bigger than just advising companies.
I had friends whose parents were getting sick, I was going through some illness in my own family and I thought how motivating would it be if when I woke up in the morning, I was working on something that could give people on Earth more time with their loved ones. And it’s just an incredibly exciting and fun way to work.
So, some part of that is you want to do some good but some part of that is selfish. It’s a great way to motivate yourself and others.
RITHOLTZ: So, that’s really fascinating. So, you decide you want to participate in something more than just a narrow little research niche that has big ramifications for friends, families, society, the whole world.
So, from ’98, you’re in McKinsey. By 2008, you’re named the Ernst & Young New England Biotech and Entrepreneur of the Year. What took place in that decade between McKinsey and winning the award?
BAHCALL: Well, a lot of learning. So, when I went to start a company, after a while, I really wanted to start something of my own and I found that I was — there was a niche, which is where a scientist I would talk to in the lab or with biologist or chemist really enjoy talking to me because I wasn’t actually one of some enemy camp. For biologist, I wasn’t a chemist. For chemist, I wasn’t a biologist. As a physicist, you’re sort of like switching.
BAHCALL: You’re neutral. And everybody is sort of intrigued and talking to you and you can ask everybody interesting questions and learn and just it’s kind of fun. And I found out that I was on the one hand good at having those discussions and getting those people fired up about a big goal. On the other hand, I was also good at talking to people in the finance community.
My mother is Israeli. I live in Tel Aviv. We grew up a little bit in Israel. And so, talking to traders and investors is not much different than walking around The Shuk in Jerusalem or Tel Aviv. People are very focused on the immediate, what’s the bottom line, how was this going to help me.
And I found I could bridge those two worlds pretty well and that was actually pretty interesting and there were all these ideas that seem to be trapped in the lab that could help people and they were stuck because there was no bridge between those two worlds.
RITHOLTZ: You mentioned trapped in the lab. There’s a chapter in “Loonshots” that I love this heading, engineers of serendipity. How do people in that line of work, R&D, research, labs, why are so many great discoveries, so much fascinating innovation and discovery, why does that stay trapped in a lab?
BAHCALL: Well, you see this all over the place and we’re talking a little bit about biology and biotech or research companies. But the same thing is true in tech companies and engineering companies and product design companies, and the last few months has actually spent a lot of time with the Department of Defense, the national security organizations, all of whom have the exact same question. Why do good teams keep killing great ideas? Why are all these promising things stuck in the lab?
And part of that is there isn’t this bridge. There isn’t a bridge between those who are focused on the core on how do I improve my operations and my execution, and those who are working on the new.
And it’s because of two people there, the two types of people who work on those things speak different languages, they don’t understand each other and they often don’t like each other. I’ll give you an example.
So, I was a meeting with the admiral who’s responsible for transforming the Navy for the 21st century. And so, I was standing on a nuclear submarine about 30 feet from a nuclear engine and this is exactly what’s on their mind, what was on his mind and his team’s mind, if you are hundred miles from shore deep underwater, you don’t want to start hearing clanking noises from your nuclear engine. That’s the core. But at the same time, you don’t want to be surprised by a new kind of torpedo. That’s the new.
So, for companies, for organizations, for teams, it’s a matter of P&L. You don’t want to be surprised by your competitor. But for national security organizations, it’s a matter of life and death.
But it all comes back to that same question, how do we balance the core and the new. Why do we keep having these battles between here are these promising ideas and here are these people who are shooting them down and what can we do about it? And so, that’s behind some of the research that went to “Loonshots.”
RITHOLTZ: And “Loonshots” is all about the dichotomy between the franchisees and the innovators. We’ll continue discussing that shortly.
So, let’s talk about the early 2000s when you were launching Synta and back up a little bit, how did you meet your co-founder and partner?
BAHCALL: Well, around the time that I was getting kind of antsy as a — after a few years as a consultant, I want to do something, I knew that I wanted to work on helping get those promising ideas out of the labs into the real world. And so, I spent maybe six months, maybe a year going around the universities, academic labs where I had some connections and talking to promising scientists and one thing led to another.
I’ve encountered this guy at Harvard at Dana-Farber Cancer Institute who just was sitting on like this giant untapped mind of really interesting, really promising ideas and I thought this is a guy who would be fun to partner with. And a lot of people listened to him but just missed all the stuff that would — that he was sitting on. Not only him but people he collaborated with. So, I decided to partner with him and start a new company.
RITHOLTZ: And this Lan Bo Chen.
BAHCALL: Yes, it was Lan Bo Chen. Yes.
RITHOLTZ: So, in the book, there was a fascinating discussion about the broad approaches to looking for a drug to either cure disease or manage a disease and one approach is to work backwards. We try and figure out what the mechanism of the disease is and find something that halts that mechanism.
But there was another approach which was people have invented thousands upon thousands of different molecules. Let’s just run these molecules against all these diseases and see what they do. That seems to be his approach. Am I getting that correct?
BAHCALL: Yes. He was – I mean, there’s a combination of two. And if you actually just pick one or the other, you will do less well. So, if you start with, well, here’s how the protein works, here’s what it does in the cell and here’s what we need to get done or let’s put that on a computer, it sounds very logical. It tends to go very badly.