This blog was written by Michael Gladstone, Principal at Atlas Venture, as part of the “From the Trenches” feature of LifeSciVC.
Youth is often well represented among entrepreneurs – except in biotech.
William Osler, founder of Johns Hopkins University and the alleged “Father of Modern Medicine” considered youth an asset: he said the most “effective, moving, vitalizing work of the world is done between the ages of 25 and 40 — these fifteen golden years of plenty.” (He also added that “men above 40 are relatively useless,” but out of respect for Bruce’s most recent birthday, we’ll leave this comment untouched.)
So why are there so few folks <40-45 years of age in C-level biotech executive roles? As the most junior member of the Atlas Venture team, I have the double-edged benefit/handicap of youthful naiveté. In my opening “From The Trenches” blog, I’d like to discuss the shortage of this trait among venture-backed biotech leadership.
We know that CEOs in this age range can be incredibly successful. In prior biotech vintages, youthful first-time CEOs were much more common: Henri Termeer at Genzyme, Richard Pops at Alkermes, David Mott at Medimmune, to name just a few. But there are a few great examples today: Nick Leschly took the helm at bluebird bio in his mid-30s, and Katrine Bosley became CEO of Atlas’s former portfolio company Avila Therapeutics right after turning 41. And since entrepreneurial talent is the scarcest resource in the ecosystem, we know we need to expand the size and diversity of the evaluable management pool and ensure that we’re giving a fair shot to the next generation of Nicks and Katrines.
So with this column I’ll make three points:
- We too rarely find younger execs in venture-backed biotech
- We should strive to change this
- To do this, we need to update how we identify and evaluate management talent, and then supplement and develop it
Part 1: We too rarely find younger execs in venture-backed biotech
By a quick survey of Atlas’s 25 life sciences portfolio companies, I counted only 4 C-level individuals under the age of 40. I suspect this is not unique to Atlas, and I encourage others to share data from their portfolios.
In a previous column (here), Katrine Bosley (as mentioned above, an excellent first time CEO herself) notes the robust standing of first-time CEOs among recent biotech IPOs, but points out:
“It’s certainly an experienced group in other ways – the average CEO age across all those newly public biotechs is 53 years old and over 70% (42 out of 58) are in their 50s or 60s.”
So, why is this group weighted so heavily towards the combined age the CEOs of Facebook (30) and Uber (38)?
I asked an assortment of biotech folks far more experienced (pseudo-irony noted) than I:
- Vicki Sato, a successful retired exec at Biogen and Vertex and an active board member for a range of companies (from Neurophage to BMS), summarized that “experience is used as a surrogate for judgment.” An important caveat here: it is, of course, an imperfect surrogate, one that only sometimes predicts future success in new roles and situations.
- Mike Gilman echoed that sentiment, adding that for someone who rises up in the R&D side of a larger organization (as both Mike and Vicki did), it can be difficult to gain adequate exposure to “the business side” of biotech until you’ve reached the executive level.
Many folks also suggested that the lack of <40 C-level biotech execs is, in part, a symptom of VC conservatism. As venture-backed Vaxess’s unusually young CEO Michael Schrader told me, “No one faults the board for bringing in a veteran with big name company profiles. But if you gamble on someone younger and it doesn’t work out, it’s easier to be blamed for that.”
Part 2: We should strive to change this
Investors and management often agree that identifying talent is possibly the single greatest constraint on NewCo formation and growth (e.g., here). This alone makes it imperative to find talented, capable leaders who might otherwise be excluded or overlooked. This is just one part of a larger theme about the benefits of expanding the diversity of executive leadership more generally, including along gender and ethnic lines.
Beyond simply expanding the size and diversity of the evaluable talent pool, there are also very real reasons to see benefits inherent to younger operators. Vicki points out that decades of experience sometimes come with ingrained habits or biases that may rule out or under-execute on new approaches that a refreshingly “naïve” mind may embrace. One big differentiator for the best execs (regardless of age/experience) is their ability to avoid these pitfalls. This is certainly true for experienced yet incredibly creative, open-minded execs in our portfolio like Gilman, Tom Hughes, and Rosana Kapeller, but often it’s the relative newcomers who are best able to avoid saying “but we’ve always done it this way.” As Atlas tech partner Chris Lynch succinctly summarizes in a recent blog post of his own:
Young and old, they each have their stereotypical advantages. At the most basic level, those stereotypes feel true: younger people have fresh thinking, boundless energy, no bad habits to unlearn; older entrepreneurs have management and technology experience to guide them and maturity that may translate to better decision making.
Most biotech leadership teams have ample supplies of the latter, but they may benefit from introducing a bit more of the former, as we more often see in tech companies like Chris’s.
To be very clear, I completely agree that ~15+ years of accretive biotech/pharma experience is tremendously valuable. It usually takes even the best leaders a long time to acquire and refine the full package of skills that a great CEO needs. But let’s not over-value the experience factor (which is just one aspect of a leader) to the point where we miss opportunities to diversify our leadership pool and where we take too few bets on some youthful rising stars. We know folks in their 30s/early 40s range can be successful in this industry and that we need to improve a process that often systematically (or de facto) excludes them.
Part 3: To do this, we need to update how we identify and evaluate management talent, and then supplement and develop it
So perhaps we too aggressively pursue that “experience surrogate” (because it’s easier to measure?) and focus too little on other important skills and capabilities. If that is the case, we should avoid defining a profile (e.g., “50 licensing deals” or “15 INDs”) that is de facto impossible for even the most talented and qualified younger operator to have achieved. I’m hopeful we can find a way to re-write our C-level candidate descriptions (whether literally or just psychologically) so they wouldn’t rule out 1983 Henri, 2009 Katrine, 2010 Nick, and the numerous people who could follow in their footsteps if given the chance.
This will mean adopting more nuanced approaches to our searches and building upon mentorship mechanisms like pairing first-times CEO with more experienced Executive Chairs (e.g., here and here, a crucial tool regardless of the CEO’s age). This pairing of complementary execs is what Chris Lynch calls the “Co-Creation” model, and permutations of it have been very beneficial in both tech and biotech companies.
Perhaps we should also be more supportive of accelerators and other seeding programs that give younger execs a chance to prove themselves in an entrepreneurial setting (and not take the wheel from them too quickly when they hit bumps in the road). And we should be more willing and ready to take a chance on rising stars at the director/VP level who have demonstrated leadership, persistence, and an eagerness to supplement their areas of inexperience with guidance from the board and other mentors.
I realize there are more questions than answers here, but hopefully this can spark more dialog on this topic. I’d welcome more recommendations for both identifying qualified younger operators and for building support systems to complement and develop them. (And, of course, I’d welcome those suggestions from people of all ages and experience levels.)