Something Ventured Page #5

bulbs for a whole summertime.

I called it the Bright Boy

Light Bulb Company.

It's a little bit over the top,

but that's what it was.

I was a nerd.

A highly motivated, impatient,

driven workaholic nerd.

Um-Who accidentally

became an athlete,

and got some sort

of social polish...

at a school for nerds-MIT.

I scrambled to get into a degree where

I thought I could earn a living,

which was electronic engineering.

I did that for a while, and I thought,

"God, this is pretty boring."

And I thought, "Well, you know,

I've heard about business school.

Maybe I should

take a crack at that."

And this is where I got inspired

by Georges Doriot.

Professor Georges Doriot...

was a father figure

to a generation of young men...

at Harvard Business School.

This French expatriate

had the distinction of starting..

The first corporation dedicated

exclusively to venture investing,

American Research and Development,

founded in 1946.

Ironically, Doriot's lasting impact...

would not be through A.R.D.,

which in its entire 25-year history

made only one notable investment.

Instead, Doriot's

most important influence...

came through the spell he cast

over his Harvard classroom.

Doriot was very controversial...

even at the time at Harvard.

He taught a course

called Manufacturing,

which really had nothing to do

with manufacturing.

And it was an extremely

popular course,

and it was all about starting companies,

and technology.

He talked about entrepreneurs.

He had some of them as guests-

what it was like

to start a company.

His lectures were how to dress,

how many drinks you should have

at a cocktail party.

It was sort of a Georges Doriot

philosophy of life.

Every year, he'd take

one whole session...

on how to read

the New York Times.

He'd hold up the paper and say-

"You should be able to read

this paper in four minutes.

What is the first section I read?"

He said, "Now the first thing you want

to do is go to the obituary page.

There you will learn

the lives that are important,

and the kind of life

that you can build for yourself."

He would talk about working

with entrepreneurs.

And when times got tough,

as they always will-

and he made that point-

that he would invite

the entrepreneur over to his home.

They'd have dinner, and then he'd

just sit him down in his library...

and play phonograph records

of French marching music.

You know, just to deal with

the psychological wounds, you know.

When he was talking about

venture capital, starting companies,

he was as good as there was, because

he was the only guy who understood it.

I bought it all-

hook, line, sinker.

Yeah, the best things

inlifeare free

But you can give them

to the birds and bees

I want money

That's what I want

So give me muh, uh-huh,

mo-mo-money

At the time we started Genentech,

there was no such thing

as genetic engineering.

And to take the idea

of commercializing gene splicing,

the risks were just enormous.

And I said, "Well, you know,

what if God or Darwin won't

let us make a new life form?"

It was a bet on technology,

and you looked at the value of

the pharmaceutical industry,

and if you had a better

way to develop drugs,

the power was enormous.

Nobody had a clue

whether they could pull that off,

but you did know...

that if they could, it was big.

It came out of the blue for me.

I had not been thinking

about starting a company.

I thought I was going to, uh, die at the

lab bench with a pipette in my mouth.

But, uh, Bob called,

and he wanted to know if the technology

was ready to be commercialized.

Bob Swanson, I think, was the most

prescient individual I've ever met.

Once he understood...

what the potential technology was

in genetic engineering,

he got the whole picture,

way ahead of anybody else.

Eugene and I were looking around

for someone to add to the partnership,

and Bob joined us.

But there just wasn't enough

going on in those days, amazingly,

to really have him

full-time working on our ventures.

We didn't have that many.

But we were interested in doing

something in genetic engineering.

We sort of said,

"Go there, find something.

And if you can, we'll finance it.

If you can't, well-"

You know.

So he was motivated

to find something.

And he calls Professor Boyer

at the University of California.

Boyer said,

"I'll give you five minutes."

It turned into,

you know, many hours.

In those days, funding

for research was, uh, difficult.

And so, you know, I had some,

you know, ulterior reasons...

for paying attention

when he said he had money.

Over the next couple of weeks,

Swanson persuaded Boyer...

to take the idea of gene splicing into

some sort of a commercial operation.

And Bob brought Boyer to me.

So we go into one of

the, uh, Embarcadero Towers,

and we go up to the top floor.

And you can

look out over the world.

It was something like out of a movie,

and holy smoke.

So we go in, and these stern-looking guys

are sitting there in a suit, you know.

Perkins says,

"Okay, Well, what are you going to do?"

What do you do?

What equipment do you need?

How do you know that you've done it?

How do you test?

It's scary.

What are the risks? Contamination?

Everything I could think-

Here was this rich guy, you know, talking

to us about science, and funding science.

I paid attention, you know.

And I didn't know anything

about raising money.

Of course, I knew nothing whatsoever

about the technology. I mean, nobody did.

I had to rely on him.

Because there was so much

to be done.

He was a very hands-on guy.

They wanted to raise, um' about three

million dollars to build the factory,

hire the people,

and then see if it would work.

But underlying it all...

was the-the tremendous risk factor of,

you know, would it be possible?

It was pure research, you know,

and everybody knows that venture capitalists

shouldn't openly fund pure research.

So my idea in everything has always

been to try to put the risk up front...

and get rid of the risk

as fast as you possibly can.

Bob and I were very naive...

about how we were going

to do what we did.

We changed the business plan.

I persuaded them to do it

a different way.

To subcontract the experiment

to two different institutions.

By subcontracting,

Tom Perkins eliminated the need...

to buy equipment, build a lab

and hire staff.

The estimated three million dollar

start-up costs...

were reduced to just 250,000.

Kleiner Perkins put up the money,

and Genentech was in business.

It was Bob Swanson and a checkbook

sitting in our office here.

That was Genentech.

Boyer and Swanson set out

to create human insulin.

But, to test their concept,

they began with a less complex hormone.

City of Hope Medical Center

in Los Angeles...

would try to engineer a gene

for that hormone.

Then, UC San Francisco would

splice that gene into bacteria...

to produce the hormone

in significant amounts.

After a very long time, City of Hope

Rate this script:0.0 / 0 votes