Computer Aided Biology: An interview with Bob Wiederhold
In this interview, we sit down with Silicon Valley veteran and Synthace Chairman Bob Wiederhold to discuss electronic design automation, Computer-Aided Biology and scaling disruptive technology companies.
You started your career in electronic design automation, do you see any parallels between the development of that industry with the current status quo of biotechnology?
When I started in electronic design automation, it was in the mid-1980's and by that stage, the design of integrated semiconductor circuits was becoming increasingly complex. By that, what I mean is that we were putting more and more transistors into every integrated circuit that we designed. In the mid 80's, we reached a crossover point where you could not design integrated circuits unless you did so on a computer. It was this turning point that really ushered in the beginning of the electronic design automation industry. Nowadays, you can't design an integrated circuit without the use of computers as it’s just way too complex.
I see the biological industries beginning to move through the same kind of transition. Biological research is getting more complex and increasingly, in order to be able to deal with that complexity, you are going to have to move to a far more engineered, a far more computer automated approach to biology. That's why I think we're in the early stages of development of a Computer Aided Biology industry and I want Synthace to be the leader in that industry.
Do you think hardware or software is the most exciting place to be now?
There are some very interesting hardware plays out there, but, as Mark Andreessen said: "Software is eating the world." So, I think in general, the software is where most of the value is. And as a result, I think some of the biggest opportunities are currently in software companies.
In my career, I've worked in many different industries, and so I don't see myself as someone who is pigeonholed into one particular industry. The things that I'm interested in more fundamentally are companies that are developing technologies in market spaces that they can disrupt with those technologies. As a result of that disruption, they can build large and important companies. And that's what turns me on, it is being involved in an area where there's disruption and the opportunity to build something big and impactful – hardware or software.
Maybe just an aside, what do you mean by "disruption?
You could have a two-hour discussion on what it means to be disruptive and how you disrupt industries but there's usually a trend in the industry that makes the existing technologies no longer work or no longer be as effective. And as a result, there's a great opportunity for new companies with new ideas that are aligned with these new trends to be successful. I'm a big fan of Christensen and the Innovator's Dilemma, the book that he wrote many years ago now. I subscribe to the view there's a lot of technologies that are incremental technologies. And those incremental technologies are relatively easily developed by existing companies - leaders in a particular industry.
But the disruptive technologies significantly level the playing field. If it's new enough, if it's different enough, then start-ups with a relatively small amount of resource have the ability to be successful because the playing field is levelled.
As someone who has scaled companies, what's the advice you'd give to a start-up trying to scale rapidly both from a product and commercial angle?
I think different areas within a company hit different transition points in terms of scaling. And so, for example, in engineering, at first, most companies usually have a relatively small number of very innovative developers that are developing a product and there's very little management - there doesn't need to be. And then, there's one transition, usually when you get around 50, 75 people, where all of the sudden, you've got enough people in engineering where there needs to be a lot more management, there needs to be a lot more processes, you need to be doing a lot more testing because you have to deliver to customers. You need to start to componentize your product and have engineers work on specific components. I won't go through all the transitions, but there are other transitions that the engineering team goes through as it gets to, 100 people, and 200 people.
On the business side, normally the first thing that we try and focus on is product-market fit. Which means you're not really trying to scale at all. You're just trying to get two or three customers that value your product enough to pay you money for it, and that get significant value from it after they pay you money. Some companies struggle even with that first step.
Then after you have product-market fit, then you need what I call product go to market fit. And that basically means: now you’ve got to figure out what's the best way to get at a relatively large number of customers? That might be putting a direct channel in place, a direct sales force, it might be working through channel partners, it might be a combination of the two. And so, figuring out the product go to market fit is very important. And if you don't figure it out or you make lots of mistakes, it will take you a lot longer to be able to get that initial scale.
Then the next thing is, hiring three or four salespeople, and getting them trained and understanding how to position the product and sell the product – this should be relatively easy. But now, the next level of scaling is you need to hire your next 50 salespeople. And, you now can't train these people by word of mouth and mentoring these people, now you need to put sales enablement in place and sales training and you need to develop all kinds of sales tools so that they can efficiently sell. You need to start to put some infrastructure, some foundation in place, to allow you to scale.
I think you can think of business scaling very similarly to scaling up your manufacturing process; at first, you build a prototype, then you do a small run manufacturing, where you're only outputting say 50 widgets. But then, if you want to output 5000 widgets, you may have to organise your manufacturing processes and automate that much more. So that's kind of I think a good analogy for figuring out how to scale the business side through various transition points and phases.
Do you feel that in Silicon Valley - that's there is a secret sauce that explains the success of this cluster?
I don't mean this literally, but, the per capita expertise in how to scale is probably much higher in Silicon Valley than in the UK. So, it, of course, doesn't mean that there are no people here that understand how to scale, but you tend to have a concentration of talent with this kind of expertise in Silicon Valley. And so, I think that's why you made the comment that they have the secret sauce. I don't think it's a secret sauce, it's just a concentration of expertise.
What's the most common challenge you see in companies, especially software companies, that are scaling?
The most common problem, I mean, there's certainly not one, there's lots. And there are so many areas where you can hit snags that if you're a start-up, you're going to hit many of those snags. Figuratively there may be 200 snags you can hit, and most companies are going to hit at least 50. I can't tell you which 50, but it's going to hit 50. And so, your ability to face those snags and then address those snags in a relatively efficient and quick way is going to say a lot about just how quickly the company progresses.
I'll give you some examples from just the stuff we've already talked about.
You may struggle with product market fit initially. And you develop a certain product and you think the features of that product are going to thrill customers and they're just going to want to buy that right away. And then you get out into the marketplace and it's like, "Well, I actually don't have that problem." Or, what you more often hear is, "You know, I haven't had that problem, but I have a bigger problem.” And “I'm looking for solutions for the bigger problem, not the one that you seem to have solved right now”. That's a super simple example, but that's the kind of thing you face in product market fit.
Now you may have product-market fit and you think, "Okay, I'm going to use a direct sales force to go after these customers." And it turns out, well, no, these customers are really used to buying that kind of a solution through some kind of a global system integrator and so, they want to continue to buy from this global system integrator. And so, you need to change things, you need to hire some business development people, you need to establish relationships with the system integrators of the world. That's a completely different skill set, it's a completely different task meaning you might not get your product go to market fit right based on your initial plan.
There are many others. And I think any start-up company needs to prepare generally to hit many snags, and then be really good at figuring out;
- what is the snag?
- how to fix it?
And then - quickly implementing the fix so that they can move through that particular stage.
For our non-tech audience, perhaps you could give an overview of the “as a service”/aaS landscape?
IaaS. Infrastructure as a service is basically the networking and storage resources that are the underpinnings of the software that runs on top of it. You have Amazon as the gorilla in terms of providing public infrastructure as a service. And Microsoft and Google are the second and third players, respectively, in that space.
PaaS. Platform as a service goes up the next level and provides, the operating system environment and various other mechanisms within which software applications can run.
And then you have the software as a service, SaaS, which is the software that sits on these platforms as a service
It's basically just being able to provide different layers of capability to end users. Moving to infrastructure as a service is a massive trend that is taking place right now. Platform as a service is something that took longer to take hold in the market, but it's kind of taking hold in the market right now. And in terms of software as a service, many industries have in essence moved completely to software as a service. I mean, CRM for example with the company Salesforce, they're a software as a service. And that whole industry, you could argue it's pretty much all moved to a software as a service approach.
Looking at a great example of IaaS, what has been the secret behind the rise of AWS (Amazon Web Services)?
I'm not an expert in Amazon web services but I can give you my thoughts on that. Amazon, for their own business, their book business and their retail marketplace business, they had to build an infrastructure and they wanted it to be based on standard commodity hardware with an infrastructure as a service/platform as a service type approach.
My understanding is that in the beginning, when AWS started, their one and only customer was Amazon. So they built AWS in order to support their internal needs and then they exposed that to lots of other customers. They did a phenomenal job in architecting initially the infrastructure as a service in a way that external customers could use it. I think they had a big advantage in that they had a huge initial customer, which was themselves. They also did a great job of implementing the infrastructure as a service and they had a great go to market strategy so that they could take what they had built and build a customer base around that.
So perhaps it’s a long stretch but not too far off, the story behind how Antha (the Operating System for Biology built by Synthace) was initially built for internal use before being opened up to new external customers, sounds similar?
Yeah, I think that that is a good analogy. Obviously, AWS has the advantage that Amazon was a huge company that they were serving. So, they were able to achieve an economy of scale very quickly that would be different than Synthace. But conceptually similar in the way that you described it.
You could've joined many companies including many in Silicon Valley. What was it about Synthace that convinced you or attracted you to join this company?
There are three big things:
Number one, going back to something I talked about before, which is it felt to me, after both talking to Synthace and talking to other people in my network, that the biological research space was going through this big transition. Because as I described before, complexity is increasing. And that it looked like there was this new Computer Aided Biology industry that could develop around that trend.
And second, as I said before, I'm looking for those disruptive technologies and disruptive markets. But then the other thing is I love doing is new things. And it's maybe a little bit of an exaggeration, but not much, that I know nothing about biology. What I know is what I read in my kid's biology high school books, but I just love doing new things. And so it seemed to me that it would be really interesting to learn a lot more about what's happening in biological research and that's really interesting to me.
The third thing is that my experience is really in the information technology space, and it seemed like my expertise could really help a company that's focused in biology. And for that matter, my experience in the electronic design automation industry could really help the company and help develop a strategy. So, I felt like it had a lot of value.
So, again, the combination of disruptive technology in an area that's new and very interesting to me and an area where I think I can add a lot of value. The combination of those three things, I said, "Okay, this will be a fun thing to go do."