Safi Bahcall on Why You Need to Take Crazy Risks

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 radar is argued with the technology that won the war for the Allies.

It had been sitting in the Navy for eighteen years unused, and had it not been discovered and brought forward by van Ouer 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 Safie Picoll. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My extra special guest this week is Safie Picall. He is the former CEO and

co founder of Sense of Pharmaceuticals. He served on President Obama's Council of Science Advisors, and he is the author of loon Shots, How to Nurture the crazy ideas that wind wars cured diseases and transformed industries. Sofie Picall, Welcome to Bloomberg. Thanks very glad to be here. 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 in biotech. I was kind of a little bit of a random walk, but I I spent probably the first thirty years of my life kind of on a university. And because my parents were physicists, we grew up in Princeton, and then I was college and then grad school and then post doc and going through the faculty stuff. And at some point I realized, and this might be a little shocking, that more than that people are not in

the world, are not theoretical physicist or mathematicians. They do stuff other than write papers and go down for inces. And I just got curious, So you started looking around. How do you go from theoretical physics to stumble into via random walk biotech. I was just curious about what is it that makes the world go round? And what do other people do when they're not writing pay person

about mathematics or physics. And I actually remember I was dating a woman at the time and she had she was working as a paralegal, which was a real job, and I'd never been to an office, and I remember asking her, could you take me in? I was in my mid twenty Could you take me into this thing you call an office? Did it horrify you? Well, I remember she said, well, listen, I can take you in Friday happy hour. That's when people sort of stand around

you could talk. And so I came in Friday happy and I said, I said, well, what should I ask? And I 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? I would say, of the twenty five people I asked, twenty five 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 a consulting world, and they had sort of they help you transition, they kind of from academia to business. Yes, so I went to a consulting firm in New York called McKenzie and Joint Company, always in the news, US 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 loose on the real world, and they sort of coach you and 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 you know, your your own career or your own papers. Or your

own ideas and bigger than just advising companies. Uh. You know, 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 in something that could give people on Earth more time with their loved ones. It's just an incredibly exciting and fun way to work. So, you know, 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. So that's really fascinating. So you decide you want to participate in something more than just a narrow, little research niche that has bigger ramifications for friends, family, society, the whole world. So from nine you're in Mackenzie. By two thousand and eight your name the Ernstein Young New England Biotech Entrepreneur of the Year. What took place in that decade between Mackenzie and winning that award, 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 scientist I would talk to in the lab, or biologists or chemists really enjoyed talking to me because I wasn't actually one of some enemy camp for a biologist, I wasn't a chemist. For chemist, I wasn't a biologist.

As a physicist, you're sort of like Switzerland, your neutral, and everybody is sort of intrigued and talking to you, and you can ask everybody interesting questions and learn and it's kind of fun. And I found 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's Israeli. I lived in Tel Aviv and we grew up a little bit in Israel, and so talking to traders and investors is not much different than walking around a shook in Jerusalem or Tel Aviv. People are very focused on the immediate, what's the bottom line, How is this gonna 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 seemed to be trapped in the lab.

They could help people, and they were stuck because there was no bridge between those two words you mentioned, trapped in the lab. There's a chapter and loon shot that I love this heading, Engineers of Serendipity. How do people in that line of work R and D research labs? Why are so many great discoveries, so much fascinating innovation

and discovery? Why does that stay trapped in a lab? 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, I've actually spent a lot of time with the Department of Defense and 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 the 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 that 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 meeting with the admiral who's responsible for transforming the Navy for the twenty first century, and so I was standing on a nuclear submarine about thirty ft from the nuclear or engine. And this is exactly what's on their mind, what was on his mind and his team's mind. If you are a 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 and 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 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 led to the loon shots and loon shots is all about the dichonomy between the franchisees and the innovators. Will continue discussing that shortly. So let's talk about the early two thousand's when you were launching Center UH and up a little bit. How did you

meet your co founder and partner? Well around the time that I was getting kind of antsy, as after a few years as a consultant, I wanted to do something. I knew that I wanted to work on helping get those promising ideas out of the labs and into the real world. And so I spent maybe six months, maybe a year, going around universities academic labs where I had some connections and talking to promising scientists, and one thing

led to another. Encountered this guy at Harvard at Dana Farber Cancer Institute who just was sitting on like this giant, you know, untapped mind, really interesting, really promising ideas, And I thought, this is a guy who would be fun to partner with. And a lot of people, you know, listened to him but just missed all this stuff that 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. And this is landbou chan So.

In the book, there's a fascinating discussion about the broad approaches to looking for a drug to either pure 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 am I getting that correct? Yeah? 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. Let's put that on a computer. It

sounds very logical. It tends to go very badly, really, because people don't realize how important serendipity is in drug discovery. Almost all of the major drugs and the vast majority of the major breakthroughs that we have in science, but but especially in drug discovery, there's always some element of

serendipity because the body is so much more complex. What works in a cell dish or what works in a academic paper that you published and submit to prestigious journal very often is completely different, sometimes exactly the opposite of what works in a giant, complex system in a very difficult environment. And so I think what I liked about his approach and what resonated and the people that he worked with in our approach was that we did both.

We looked on the one hand for the underlying science and the rigor, but on the other hand, we balanced that with an understanding of how important serendipity is and

how important surprises are. And one of the things I found really fascinating was the approach, and this was in particular with cancer, of not just trying one thing that might work, put the disease into remission, and then the disease, I don't know if it's evolution or just adaptation, eventually comes back because it's figured out how to overcome whatever

that obstacle is. You write in the book about how a one to three four approach left hook, right jab, an operacot throwing enough stuff at a particular disease not only knocks it out, but it prevents it from adapting to whatever that therapy is discussed that a little bit. I mean, you can imagine it by example with a military and sort of a terrorist. Let's you have a

city that seems to be taken over by terrorists. If you have just one approach for how you're going to go fight those terrorists, Let's say it's a sniper, or it's an air attack or it's a drone attack, they will adapt. They will figure out a way to hide, they will figure out how to evade that particular angle. And so if you want to succeed, you need a shock cannot You need to use the army. You need to use the air force, you need to use the navy.

You need to use drones, you need to use snipers, you need to use cyber You have all of them at once in order to completely wipe it out. And it's the same thing with cancer. Cancer is a rogue set of cells operating in your body. They're just growing out of control. There is an accelerator pedal that's stuck and so it just broke, and there's a brake pedal that halts the growth that also broke. That's why cancer

takes decades to develop. You have to have all these systems just break down, whether it's with time or because you smoke and you're you're you're messing up the cell with the carcinogens and smoke. It takes time to accumulate these failures. And after the first break system fails and the second break system and the backup system fails, and this cancer cell starts growing and doubling and growing and doubling. And you can't just attack it with just the army

or just the navy or just the air force. You need to come at it from all directions at the same time, and then you have a chance. The few cancers that we've cured, and there's a small handful of cancels that we've cured, that's what we've done. It's almost always some combination and shock attack, and it's the right combination at the right time that can actually overwhelm the

cancer and wipe it out. So how far along is humanity in during quote unquote cancer, which we know is three hundred or so separate diseases to be fair, right, And so the reason people in in UH medicine or science on talk so much about curing cancer is because it is three hundred different diseases. You don't your diabetes at the same time as you cure heart attacks at the same time as you cure Alzheimer's, because they're really

different diseases. And cancer is sort of like that. But let's say if you call it roughly three hundred different types of cancer, I mean it's you know, less than ten that we've made such astounding progress on. You know, it's childhood leukemias is one example where it used to be mortality rate within six months or a year, and now it's more like eight or go on to live long lives. That's a stounding and you can see we're

not there yet with many other cancers. But for example, when I started almost twenty years ago, melanoma was a death sentence. Every time you ran a melanoma trial for probably thirty years clinical trial, the placebo arm or the standard care arm and the treatment arm would be identical. He'd spent two or three or four years. Everybody would put in all this time, and it was always the same disappointing result. Now almost so many trials are positive.

Something turned the corner why is that. Why are we now more successful with that form of cancer versus others. Well, melanoma turned out to be a type of cancer that's very sensitive to the immune system, and we still don't know why. There's a lot of theories, but it happens to be one of not many, but a small number of cancer types. And it may be because it's near the skin and the skin is so sensitive to the immune system. There are a lot of immune cells there.

Because when something lands on your skin, you or your cut, you have a cut, the immune system rushes over. So it may be that melanoma is a special case. But in it what was fantastic is when maybe seven eight, nine years ago the first trials started showing dramatic effect. It's not a cure, but we are so much better in that disease. There was a lot of serendipity there. Like even the work on the immune system, that's a

hundred year old idea. People notice that a long time ago that sometimes when the immune system is activated, cancers go away. You you sneeze on people if you just if your treatment is, hey, let's just sneeze on this cancer patient. Right, Five out of a hundred or ten out of a hundred might have complete remissions of their two People knew that. People knew that, they knew that. Actually, fifty sixty years ago from the clinics for tuberculosis, we

don't have those that anymore. These clinics people who had tuberculosis used to get sent to, but people who had melanoma, and we go to these tuberculous as clinics, a surprisingly high percentage of them their cancers would disappear. And that's because they were like fighting this infection and the immune system was activated. So we still don't understand the signs of that. But you said, how far are we We're

at the beginning of the exponential curve. What's happened is about fifteen or twenty years ago we got the tools, we sequenced the genome and the biotech knowledgy kind of revolution of years ago that allowed us to grow proteins in the lab and make those a commercial scale, create a new set of tools, and we're just starting. It's really just the beginning of using those amazing tools to do things like one of those things is getting the

immune system to fight fight tums. And like I said, there was about a hundred years of trying to do that, and none of the standard approaches work, and then no one exactly knows why someone tried a slightly different angle. Let's target this protein, not that immune protein. Boom. It worked, and and it wasn't even the original protein that the scientists had been thinking about would be the key to

it all for many many years. Even the scientist who win the Nobel Prize, they thought it would be this other thing that would be the key. It turns out it was this thing, and nobody knew. So there's so much. It's really the combination of strong science and an appreciation of serendipity. When you can put those two things together, the magic can happen. So taking where we are in that J curve, starting that that ramp up of the hockey stick. UH, is it a fair question to ask,

will we see cancer the Emperor of maladies? To borrow the book title, UH, cured in our lifetime? I think we will see certain cancers we've seen three or four or five go, you know, well beyond of people who are diagnosed with it have more than five or sometimes more than ten years survival. So by any reasonable definition, you could call that a cure. And slowly, we're getting better and better. The survival times in melanoma I have gotten longer and longer multiple mileoma. You know, twenty years

ago that was a death sentence. There was nothing. And then, in an almost serendipitous event, there was a woman here in New York who was thirty one who called a doctor that I actually I used to work with in Boston named Judah Folkman, who had this kind of wild, crazy idea, Hey, let's fight tumors by blocking blood vessels to the tumors. And everybody thought that was the dumbest

idea they've ever heard, really anti angiogenesis exactly. At the time, everybody knew that the only way to fight tumors was to bomb them, would keep poison them with chemotherapy like a giant bomb, or burn them with radiation. The idea that there were these subtle signals that tumors were like homes and they were laying down pipes, and if you could block those pipes, you could slow the growth of

those homes. That was considered radical. Judah was asked to There was a spe shall committee at his hospital that was asked to evaluate his work because it was so controversial and it said, well, we don't think there's any value here. You need to resign, really stop what you're doing. That's astonishing NY. And how did that progress from there? Well, he was I remember he was talking to some post docs and student who said who was like, oh, I'm

really depressed. You know, my paper was rejected. And he said to her said, well, if you want to understand rejection, come to my office. I will show you pink slips with the word clown on them. Right, thirty two years after he first suggested his idea, on a stage in Chicago, a guy got up, a scientist got up, packed auditorium two, present the data from the largest study ever run to that date, and patients with advanced calling cancer pressed a button,

flipped the slide. Patients who had received the drug based on Judah's ideas lived longer on average, and anyone had ever lived with advance It's calling cancer. It was like a standing ovation. This was thirty two years after Judah first suggested his ideas. It was a standing ovation. I remember a speaker said something like, if only Dr Folkman were alive to see this, And Judah was actually sitting in the back, you know, and turned to his neighbor and smiled, and and he didn't raise his hand and

say still here, I'm still here. No, but it was just and you love telling that story, but it's uh an example of all these these ideas that are dismissed as crazy and so many things that we take for granted today, even Facebook. If you remember when Zuckerberg was going around to raise money for it in two thousand and four, every social network had failed. My Space was just failing. Friends to well, my Space was friends to was just failing. And every every investment, almost all the

intelligent investors, said well, there's no money. Social networks can't make any money because they're just fats. Everybody goes to the next one. Well cool, well they were Well one investor took a look at that and he said, well is that really true? And you know that was Peter till and a five thousand dollar check and sold it eight years later for a billion dollars. Not not a bad return. But it was the same thing with so many of these things. Search everybody said, oh, you're crazy,

you can't make it. Was Google and everybody said, you can't make any money. It's just like a Yellow Pages. There's no money in yellow pages. Come on, give us a break. One of my favorite books is William Goldman's Adventures UH in Screenwriting, and he talks about nobody knows anything in Hollywood and the list of of movies that were passed over by every studio from E T two Star Wars, two Raiders of the Law, like one amazing movie after another nobody wanted anything to do with. One

of my favorite is the James Bond story. Ian Fleming when he wrote this, you know, I wrote this book that became reasonably popular but not a huge success. He really wanted that kind of life that, you know, the James Bond, and every studio nine years just said, are you kidding a metrosexual British spy who saves the world. No American audience is going to go for that. And he finally kind of gave up, gave it to these two sort of not very reputable producers, and they the

studio that finally took it, had so little confidence. They said, who is this actor in here? Used to drive a milk truck. He's been in like two movies. His name is Sean what Connery? What? No way, No one's gonna They opened it in to drive in studios in Texas and Oklahoma, and of course it became the most successful, longest running film franchise in history. So most of these things that we take for granted today began life as

a loon shot. And one of the things, one of the lessons that you learn when you work on these things is you need to expect the three deaths, the deaths that they will die several times. Quite fascinating. Let's talk a little bit about life at a pharmaceutical company or a biotech company you mentioned, and how often things are overlooked, How how many times drugs and ideas and concepts have to fail. How frustrating is it for researchers

to constantly be dealing with failure. It's worse than being a hitter in baseball if you hit three hundred and pharmaceuticals, that's crazy. It's like a nincent failure rate, isn't it. That's right, It's very you know, it's a combination of two things. On the one hand, there's this enormous motivation because everybody has someone who is touched by a severe disease, and the idea that you're working every day to make a difference, that idea if something you do contributes to people.

Anybody who's lost a family member or a loved one, how much do they wish they had more time with them? Right? And that's pretty much everybody. And that's what we can do, and that's what we're on the cusp of doing with science and medicine. So being part of that is incredibly exciting. It's the advantage of it. It's unlike almost any other industry or field because you feel like you could do something that just affects millions if you do it well. The flip side of that is, as you say, the

failure rate is astounding. You know, cent of drugs that start clinical trials won't make it to the end, and so you just have to accept that there's the benefits and there's the cost, is that there's a very high failure rate. Was it a ciro endo who said it's not a good drug unless it's been killed three times?

Is that right? And I was actually, Uh. We had an advisor, a guy named Jim Black, Sir James Black, who won the Nobel Prize for developing two of the most important drugs drug categories in the twentieth century, of beta blockers, and histamine antagonists. Anyways, he was in his eighties when I got introduced, and he loved what we were doing at this little biotech company. Reminded him, I guess of how he went his approach and philosophy to

discovering new drugs. And he would fly over from Scotland every now and then and meet with our team and advise us. And I remember one night he came, it was like eight am, it was like seven pm. We sent everybody home for dinner, and we went to dinner, and then it was like nine or ten pm. Everybody went and I was like exhausted, and he was like, Safi, Saffie stayed with me, and have another drink, have some whiskey.

And I was like, how does this eighty two year old guy five three thou miles talk all day long? So I we started chatting and I tell him on I'm feeling kind of down because this very promising project we had in the lab I was really excited about and it just like didn't work negative data. And he leans over to me Pat's money and says, Safie, it's not a good drug unless it's been killed three times. And that stayed with me and I mentioned so to

earlier expect the three deaths. And that's what you see so often with really promising ideas, that you need to expect the fact that you're going to get punches in the stomach many times. Maybe it's three times, maybe it's four times, maybe it's ten times. If it's a really important idea, it will have those big punches in the stomach. So let's talk about something that was punched repeatedly, a less glamle. That's right, So tell us about that drug.

How was that molecule uncovered and how did it actually work to arrest certain cancers? Well, I wish it had a better ending. So it had some very promising early data like a lot of drugs, and then in later stage trials it didn't work like a lot of drugs, and so it sounds like a great story. What was exciting about it is that it did uncover a totally new mechanism, which was what So it targets the way

cancer cells breathe, So it targets and fire. When you say breathe, you mean consume oxygensume oxygen, so the mitochondria and so it specifically went into the mitochondria and specifically targeted a part of the mitochondria in a very unusual way, right exactly, And it did so in a way that nobody had ever thought about doing before. And we found

it because it was a screen. Meaning you take this library of chemicals and you don't the really unusual structures, and we happened to, through all sorts of long back stories, have a collection of chemical structures that nobody else had. Your partner was funded by Michael Milken, anyone out and bought thousands of drugs from all around the world, including Soviet Russia exactly. And so in fact, that's a fascinating story.

Milkin gets colon cancer, writes a four million dollar check to your partner, who says, I know there are all these chemicals and labs that nobody's doing with, send me some vials from the Soviet Union. That's exactly what happened. This was actually a Russian military lab, were just collecting soil samples and they at the time, well thirty years ago, people didn't really think about, oh, what's the value of

having these unknown, uncategorized chemical structures. Today we understand that just the pure science logical, deductive reductionist reasoning of here's the protein, and here's what it looks like, and let's target it on the computer. Or something just misses a ton, and sometimes having a random soil sample that somebody picked

up can contain something that you never expected. I think your partner described that chemical as something some engineer, some chemists made in a lab for fun and then put away and never thought of. Again, that's right, and so many of these discoveries kind of begin like that. And so then this is where you allow room for serendipity. You say, let's just take what we have and see what happens. And then we saw this signal from this molecule,

which was really surprising. Nobody expected to see this strong signal in the lab and a cell cultured dish that this molecule acted in this unusual way, and we said, well, why is it doing that. We actually couldn't figure it out. It took almost twenty years to understand how it was working. And while that might sound sort of surprising today, because today there's this idea that you should be able to

understand everything right away, and that's actually the reverse. That actually is a very bad idea that can really hurt innovation and create the solution for us figure out why it works later. Almost so many of the drugs we used to, like even the anty, almost everything people use in the brain, whether it's antidepressants or anesthetics, they were discovered by accident and it took sometimes a hundred years. With an aspirint, nobody knew how that worked, probably for

close to a hundred years. So, you know, anesthesi was discovered because there was some you know, young guy in the lab who had a chemical and he kind of put it on his finger and he put it on his tongue, which you don't do any more, and then his tongue went nomin He was like, that's weird, and then he kind of explored that, and that became like one of the major classes of anesthetics. Wait, we don't just you know, stick, we don't we don't just lick

new chemicals to see what the results. Generally, generally you don't lick the cultured edition the lab probably probably a smart smart approach um that that that's quite fascinating. And to wrap up a less glamal, somehow the copper gets into the nucleus of the cancer cell and essentially burns it. It blocks the mitochondria from firing, so it basically messes up the battery of which is sort of the breathing engine or the battery the mitochondria of a cancer cell.

It took twenty years to understand how that really works. So one would think that might be effective at fighting cancer. Yeah, and so we ran a couple of clinical trials and some worked and unfortunately the large one that we did in metastatic melanoma didn't work, so we had to halt development on that drug. Now I understand that this is now ten or fifteen years later, there are still people studying,

in fact their papers coming out on it. So maybe someone will pick it up in the future and use either the understanding of the science this is a new way to target cancer drugs or that kind of molecular related molecules in the future. But what we did was a first step. We had uncovered a new way to kind of block the battery of the Kansas cell, which

really hadn't been talked about much before. And to wrap up with Senta, you you left Center after thirteen years the company had gone I p O. What is the state of Center today? Sent emerged with another company. It's publicly traded. There's a different management team and board, and so it's going strong move. It moved to Nash, a different disease, a different therapeutic careers. Quite fascinating. I found the book to be very fascinating. It was a really

interesting read. But one of the themes that keeps recurring is the ongoing battle in institutions between the franchise ers

and the innovators. Explain that, sure, you can think of whenever you organize people into a group with a mission and a reward system tied to that mission, you have just created two different kind of what you can think of as phases of human organization, and it's the same thing as whenever you Then this will sound crazy, but like this glass of water that's sitting in front of me, whenever you put molecules together, they can exist in two phases.

One is liquid where they're all slashing around, and one is solid where they're totally rigid. But it's exactly the same molecules. The behaviors are totally different, and the same thing is true with teams and companies. You can have the same people organized into a group, whether mission and reward system tied to that mission, and you will find there two different phases. There's one let's say a small

company ten people. In that phase, everybody's steak and outcome is huge, and they will unite around the crazy ideas, and when they stumble, they'll go and rescue them. The perks of rank, which is sort of the other force that that's pulling out them, is tiny compared to that incredible steak and outcome. If their drug or their movie project works at a ten percent company, they're gonna be

heroes and millionaires forever. But doesn't they're unemployed. Now, imagine the same people inside a much larger company ten thousand, fifty people. Well, their steak in the outcome of what they're working is much less, but the perks of rank are much more. So these two forces have shifted. Just like in a glass of water, there're two forces, one that wants to make molecules run around and one that

wants to lock them rigidly in place. And in the case of a glass of water, as you rotate temperature,

you change between these two things. And in companies, as you increase team size, increase group size, increased company size, you change between these behaviors of nurturing crazy ideas and rejecting them and the focus on execution and what works well in committees, And so many entrepreneurs who have these, you know, five person companies that go to fifties thousand, and they come to me like, that's exactly what happened. Conversation in the hallway five years ago, when we were

much smaller, was all about the project. Today conversations in the hallway are about politics. And there's this sudden shift. The glass of water has gone from liquid to solid. And while that sounds like an analogy, what makes it genuinely interesting is that you can write that down from first principles. You could look at people's incentives. You can write down an equation for their incentives, and you can

see when that shift will happen. And once you understand that, just like with a glass of water, you can begin to manage it. So let's talk about how to manage that. And the solution you have written about is to take the wild ideas, the loon shots, and put them in a separate organization apart from the franchises. So my favorite example in the book is radar technology that I think the Navy had sometime in the after World War one and it just sat there for a decade or longer.

Tell us about that. Yeah, that's funny. And you know, just incidentally, as an anti I was telling you, I was on a nuclear submarine talking to this senior admiral in the Navy about how do we help the Navy innovate faster and better? And he had my book and we were sitting down, and I was a little nervous

what was he going to say? Because I talked about how radar, which is a technology that ended up turning the course of the Second World War and helping the Allies catch up to Nazi Germany eventually defeat Nazi Germany, was buried in the Navy for eighteen years and we lost lives as a result of that. I lost it wasn't ready in time for Pearl Harbor. And I was pretty nervous that, oh man, because I spend you know, a little bit of this chapter talking about how the

Navy buried this really important technology. And I said, I asked him kind of gingerly, well how did you feel about that story? And he said, that was my favorite story in the book. So you've got to give military people, at least senior ranks credit. They are all historians, and they don't look at the Navy from as their navy. It's just a previous generation and if there's something to be learned from it, they seem to be pretty good about adapting as they go forward. Maybe a little too slowly,

but the better military people are tacticians and historians. With many of the senior leaders in the national intelligence agencies or the Department of Defense, the best leaders are thinking over the course of decades and sometimes century. I think you had Ash Carter on your show is not only a physicist, but a student of medieval history, and those

tend to be the most interesting thinkers. And so, for example, one of the reasons that I'm spending a lot of time kind of pro bono there is that what's worked for the last hundred years is not going to work anymore. And that's pretty much always true. If you're fighting the last war, you're gonna lose that. Well, there's a famous sarying the generals tend to fight the current war with

the technology that won the previous war. But what's happening now, and we started most of if you look at military history, we started most of the wars in the past hundred years behind in some way in technology or in strategy compared to our enemies, but because of some advantages that we have as a country, we were able to catch up. What's happening now is that the source of battlefield advantage is shifting from hardware to software, and our organizations are

designed for hardware. They're not designed for the pace of innovation of software, which is much faster. So they're going to break and we may not be so lucky next time. The next war, the next battle fielded where the last thing any of us wants to see is we put our soldiers on a battlefield surrounded by machine learning robots

and slaughtered. That's one of the reasons I'm having all these discussions, and many of the senior military leaders have realized that what we just talked about just separating is not enough. That's like innovation theater. You create a box, put the artist, the crazy people working on the crazy ideas. Here, there's a widespread perception in the military that innovation labs have maybe a three or four year lifespan and then

they die. So what's missing is the second part of that, which is you need to separate these groups because the people working on the crazy ideas have a very different job than the soldiers who are working on on time, on budget, on spec. So what's the go between these

two radically groups. That's what's been missing people. You know, Let's take the Navy has a seven thousand people at Johns Hopkins Applied Physics Lab, incredible scientists, and they have incredible training and career path and development for the soldiers who are running ships on time, on budget, on spec. But the person going between those two groups is like

a high school kid with the clipboard. Why So in the book you talk about Van over Bush, who is the person who has both the background and m I T and is respected by the academics, but comes from a Navy family. And I believe was he a physicist also he was an engineer, engineer, and he was really not only able to bring radar forward, bring a number of really amazing technological innovations that helped win the war, the radar proximity fuse, the proximity fuse right, that really

changed the course of the war. And as I was reading your description of the war, very much made me feel like, oh, we really could have very easily lost World War two. Yeah, people don't realize by the single greatest set of the war, as Churchill and Roosevelt knew, was the U boats Hitler had. When we started, Hitler had a Nazi Germany had a lot of advantages. Their U boats were something the Allies had no answer for and looked ready to strangle the Atlantic, which they did.

Their planes in the looft Off, the German Air Force outclassed anything the Allies had and looked ready to bomb West in Europe into submission, which they did exactly a year later, within a matter of weeks. And you have these two German scientists who discovered something called nuclear fission, which put Hitler within reach of the greatest weapon ever,

most destructive weapon ever created by man. And so we started behind, and you know, we managed to catch up in some things, but not in the U boats, and Hitler was unable to eat defeated most of Western Europe except for Britain and I. In fact, it was a radar that helped save Britain in the Battle of Britain. But Hitler decided and correctly eventually understood that he could

win the war with the U boats. That those U boats were sinking down Allied ships every single month for the first four years of the war, faster than the Allies could build them. And in spring of nine Britain was down to three months of oil, three months of planes, tanks, trucks all need oil, and we were three months away from a united Nazi Western Europe. The world map would

have been completely different. And that's when the first by Liberator bombers, with a couple of technologies from Van over Bush and his group of loons sailed out over the Atlantic, concluding and most importantly Mike Grave radar that allowed the pilots to see just a periscope, they could exactly and began within a matter of weeks shooting down U boats

like shooting fish in a barrel. And Hitler lost one third of his entire U boat fleet in that four week period, more than in any other year of the war. One month, he lost more than any previous year. That's exactly right. And within six weeks later and they were this close to winning Western Europe. Six weeks later, in the end of May, Admiral Dunnetts, who is the head of the German Navy, sends a radio blast across the Atlantic.

All remaining U boats withdraw the Battle of the Atlantic has been lost, and then the lanes were cleared to resupply Britain, and the lanes were cleared for an Allied invasion of Europe. And a lot of people aren't quite aware of that history. It's left out of many popular histories. But that was the decisive turning point, firstly in the Battle of the Atlantic, but that Battle of the Intic was a decisive turning point in the entire war. Quite fastening and can you stick around a little bit, I

have lot more questions for you. We have been speaking with Sofie Bicol. He is the author of loon Shots, How to Nurture the crazy ideas that wind wars, cure diseases and transform industries. If you enjoy this conversation, be sure and check out the podcast extras, where we keep the tape rolling and continue discussing all things innovation related. You can find that at Apple iTunes, Google podcast, Stitcher, Spotify,

wherever your finer podcasts are sold. We love your comments, feedback and suggestions right to us at m ib podcast at Bloomberg dot net. Be sure and give us a review on Apple iTunes. Check out my weekly column on Bloomberg dot com. You can follow me on Twitter at Rippolts. I'm Barry Dults. You're listening to Masters and Business on Bloomberg Radio. Welcome to the podcast, Sophie. Thank you so much for doing this. I mentioned earlier, I start a lot of books, I don't finish a lot of books.

I plowed straight through this. I found loon Shots to be really interesting and intriguing and filled with lots of of fascinating ideas. You have to be really proud of what you accomplished for this. This was your first book, is that right? It was? It's funny. It was about a year ago. I submitted like the final edits, and I can tell you I knew one thing for sure, my mother would read it, right. I had no idea it was you know, it's a way. It's got physics

and business and history, but it's very accessible. I didn't find it remotely like, oh, this was written for phdl D level. This is this is a straightforward business book. Yeah now, and uh, you know, and I tell stories. For me, it was a lot of fun learning how to tell stories and how to structure those stories, whether it's Panama or James Bond or Pixar or toy story and why the world speaks English and how they're all

connected by one idea. And so I was having fun and my wife would talk about, Sofie, what are you doing. I'm just laughing, like I'm telling thinking something funny and writing it down. But a lot of times you think stuff is funny and then you discover well, other people don't quite think so. So I had no idea. But

then I remember when, um it was not long ago. Uh, someone was interviewing Bill Gates for the Wall Street Journal and they asked him, like what his three favorite recent books were or something, and he mentioned, you know, there was a social justice book because he does Gillapoor the history of pistory. And then he mentioned loon Shots. And then like I get this. I found out about it because like my publisher editor, like fifteen people start calling me,

and I was like, oh, that's nice. I didn't know that that was, but apparently that's a really big deal. He does a booklist every year, and and it is a big deal. If you're a geek or a business person or a software person. You you see bills list every year. Yeah, that was cool. And then when, um, again, I know if anybody would like it. And then when Donnie Kinneman, who wrote Thinking Fast and Slow and you

know as a really interesting, intelligent, thoughtful reader and writer. Um, and when he very early on supported came out very nicely in support of it, I was like, God, I got, I got my mother and Danny k like, dude, that's two people, all right, we have a win. And he is the most charming person he is ever want to meet, so thoughtful and it just likes to think about problems in a deep and big way. Remind me later, I have a hilarious Donny Danny Kneman story to tell. I'll

tell you afterwards. So, um, there's a few things I didn't get to that I have to ask because they're really quite fascinating. But I want to stay with the book, um for for a bit and go over some stuff.

The Moses trap. What is the Moses trap? The Moses trap is this idea, is this myth of great leadership that if you ever read, you know, these business journals with these you know color cove or covers where there's some great leader who's the Moses, who stands on top of a mountain, and they say the reason this leader is so great is they raised their staff and they anointed the chosen project, the whole, the iPod, the Holy loon shot, whatever it is. And that's a complete myth.

What happens in those kind of companies when leaders lead like that is you get into the cycle if you think you're great at choosing product, and so you just keep going bigger, faster better, bigger faster better, and you keep raising your staff and picking that project, and eventually that cycle, that wheel turns one too many times and it's a disaster. That happened to Steve Jobs in his first few companies. It happened to edwin Land and Polaroid.

It happened to one trip at PanAm. I mean Kodak very famously invented the digital camera and then decided, oh no, this will cut film sales. Yeah. So there's uh by the Moses trap, I mean that there's a takeaway there for business leaders, which is, or even anyone who's managing a team or an organization, which is, you want to lead much more like a gardener rather than a Moses. In other words, you want to have these two groups, the artists working on the crazy stuff. Their job is

to take as much risk. You're asking them to take risks. And then the soldiers. Let's say you have some some guy whose job it is to man, you know, make planes. You don't want to tell You don't want him to be saying, well, I have an idea. Let's put ten planes in the sky, see which nine fall down. Okay, it's completely opposite jobs. And the failure point in most innovation is never in the supply of new ideas, or you put ten people in a room with a stack

of posts. For now we're gonnat a thousand ideas. The failure point in most innovation in large companies with a public sector a private sector is in that transfer. The truly great leaders, whether it was Fan of a Bush or even Steve Jobs his second time around it Apple had understood this is they manage like a gardener. They take those baby stage ideas out and they bring it into the field where they will always be resistance. And that's normal, and you want that. You want that conflict.

The group that's making the money rarely likes the group that's spending the money, and vice versa. And you want that tens and you want one group taking as much risk as possible. You want them trying ten things night of which will fail because if they don't, then your competitor is and your competitor will discover that ten thing and you will see it too late when it's a

bullet coming to your head. You mentioned Steve Jobs had Johnny I've as the dreamer and Tim Cook as the soldier and turned out to be a really powerful combination. Right now, this myth that he was the Moses on the mountain raising his staff and anointing the chosen project is really a myth. He did of one of the first things he did when he got into Apple. The second time was promoted Johnny ive is one of the

great product designers. Then the second thing he one of the next things he did is he recruited a guy named Tim Cook, with his previous job was known as the Attila, the hunt of inventory. So if there's a better name for a soldier inside a company, I don't know it. And he led by bringing them together, man eaging the transfer between those two. The iPad when it was introduced was a beautiful design and original product, but if it had cost six thousand dollars, there'd be no

Apple today. It was Tim Cook that got it from six thousand to six hundred. So what people miss is they focused on, oh, you know, he picked this product. Let's they focus. They get to they manage the technology rather than than transfer. What you want to do is manage the transfer, not the technology. So something like Lucent or a te Bell Labs as it was known as previously, that was around for I don't know, almost a century. How often can these labs of innovation execute on that

transference of ideas? And you look at Lucin. A ton of great stuff came out of Bell Labs that got used um and a lot of it was post any trust breakup, so it was offered out as patents more or less for free. In some ways, we owe Van ever Bush, who created this system inside the federal government that allowed the US military to catch up rapidly to Nazi Germany eventually exceed in the technologies that ended up being decisive in the Second World War, actually got his

ideas from Bell Labs. So the guy who was president of Bell Labs at the time, Frank Jewett, was a mentor of his who actually helped bring vanever Bush into Washington. So in some ways vanever Bushes, you know, we owe a lot to bell Ab more than we think because

it inspired Van ever Bush and vanever Bush's system. The organization that he created called the O s r D. Office of Science Research and Development, ended up becoming the National Science Foundation, the National Institutes of Health, and was the backbone, the inspiration for all of the national research infrastructure of the US. And when we look at the post War two era, the Technology Development Group that was put together really was a giant impetus for the next

fifty years of economic growth as well. Well. It was a rate source of competitive advantage and it's a source of concern today. And here's what I mean by that. It is that national research infrastructure, which we understood and many other countries didn't. That investment that gave us the biotechnology industry, GPS, Internet, even the transistor was supported by that integrated circuit. So much of our progress as an economy and as a nation comes from that investment. That

essentially a market failure. No one, no one company could have invested to create the biotech industry decades long. You can't you can't have that. It was It's like a game theory market theory problem, which is it's not good for anyone participant but it's good for everyone as a whole. And that's where the national research labs came in, and that's what drove so much success for the United States.

Roughly half of the many trillions of dollars of GDP growth is attributed to those kinds of technologies since World War Two. The concern is that while we've figured that out seventy years ago and milk that for the last fifty years, China and Russia have understood that now and that's what they're doing now. Have we fallen behind in making those sorts of long term investments in basic science?

Are we lagging China were lagging other cos we're starting to We're declining and they're increasing and that's not a good look. That's not a good trend. Where it's especially dangerous is in the shift from hardware to software as the source of advantage of national security. China and Russia today are weaponizing AI and machine learning. They have an unfortunate advantage, which is they have no ethical constraints and how they use those weapons, and they're using them on

the battlefield in pretty horrific ways. For example, in Ukraine, you had a Russian cybergroup send text messages to families saying your son has been killed on the battlefield, which immediately lead to a lot of text messages are you okay? They looked at that on the grid and then began bombing those targets, and that actually in a two minute attack, turned back so much progress in the UK, so China, and China is using that to all these kinds of

technologies to suppress dissident minorities. So my I'm optimistic about what we can do about many technologies, but I'm very concerned about how totalitarian regimes can use those technologies to advance their interests. So there is now in uh Washington, I met with them a few times a national by part as a National Security Commission on AI, which will hopefully chart a path that we can compete. Quite quite interesting. And in the book, one of the last chapters is

why the World Speaks English? And I love the description you have in it tell the story as to why so much of the world is English speaking. Didn't have to go that way, did it? A thousand years of

history and thirty seconds ago, let's go, let's do it. Well, it's it's actually taking this idea of why is it that small companies seem to be better at embracing new ideas and large companies reject them, and that as you read in the book, it's about this idea of a phase transition and then what you can do about it once you understand it. But let's take that idea of

metal level. So if you look for about a millennium, not one generation or two generations, but about a thousand years, China and India dominated the world in the early science and technology, paper and printing was invented in China. You had the compass and the gunpowder, you had the currency systems, you had advanced mining, advanced drilling, advanced irrigation. There was no competition. I mean, China, India was fifty more than fifty percent of the world GDP. Britain for example, was

less than half a percent. And we were talking between the middle of the yeah, about five to about between hundred thousand years at the time. You know, early science and astronomy in the Islamic Empire far exceed between the ninth and thirteenth century, far exceeded anything in Western Europe. The most widely used medical textbook in Western Europe for seven hundred years was by Ibn Sina an Islamic medical scholar, a scientist and medical scholar. And imagine today using a

book for seven years it's already or seventy years. There's no way you would use a textbook seven hundred years Islamic science and astronomy and technology. The mathematics that Copernicus used, much of the ideas that he based what he did on came from India, from Islamic Empire, from China. So why English, these tiny little countries in Western Europe or like the backwater China and India were dominating the world

and everything that matters. So why Well, what I talked about there is why China, Islam and India were like the Mark Fiser Novartis of their day. They were the dominant global empires. They were great like Laurel. Large companies tend to be at franchises, building the Great Wall, building the Great Canal system, irrigating hundreds of millions of square miles, building the taj Mahal, giant franchises, but they were not

good at nurturing loon shots. They were not good. They About six centuries before Copernicus, san Teco, Brachi and Newton, there was a couple of scientists in Northern Sung dynasty in China. They came up with brilliant ideas about astronomy, and they were really headed in that direction, and they were right on the cusp. You could argue of the scientific revolution happening in China five d six hundred years

before seventeenth century Western Europe. But there was an emperor and they and he quashed that idea after a few years. He said he didn't like it. He was the Moses with his staff, saying, not that idea, this whole thing about how the planets move. Let's move on to something that's boring. Whereas in Western Europe, Western Europe was like the tiny teeming market of biotechs. If China is Slam

in India were the Mark Fiser Novartis. These were the hundreds of little biotechs in Boston or San Francisco, each of whom has some crazy idea and most of them fail. Nine out of ten fail. But here's a crazy idea. The Earth goes around the Sun. When anybody on the planet for two thousand years could see obviously the Sun is going around us, the planets are going around us,

the stars are going around us. And Copernic has kind of switched it around, and he wasn't the first that that idea had been floated around for two thousand years. He made it a little more mathematical, borrowing some science from Islamic astronomers, and that idea was actually quashed by for about seven year eighty years, everybody said, well, that's obviously a deiotic If the Earth is spinning on its axis so fast, why aren't birds flung from their nests.

This is stupid. It's a crazy idea, just like Facebook was a crazy idea. Google was a crazy idea was at But what happened is because you had hundreds hundreds of these tiny little nation states. When Tycho Brahi about fifty sixty years later, said let me measure this thing. Let me see if I could. Obviously Copernicus is an idiot, because we can all tell that the sun doesn't go, but I have this other theory, and let me measure it. And he started trying to measure it, and he was

working on it, and then he got fired. He got fired because he was kind of a big, obnoxious ass, and he had a little The King of Denmark had given him this little little island and he was the old king died. The young king took over and he said, you come visit me. I'm the big shot, and the young king is like, I'm writing your checks, you come visit me. They got into this like pissing battle, and he was fired. But that's just like a little company where has the CEO has a battle with his board

of directors. So then he went and he took his ideas and marched around all the little kings and looking if Europe, and found one in Prague, Rudolph the second. He said, yeah, I can knock yourself out. Go go build another another, another observatory. He brought the young Kepler there and that's where they discovered that what we've been saying for two thousand years was wrong. The planets don't move in circles. They move in this very different way.

And that was, in some ways the spark when you throw away what everybody know to be true for two thousand years, that heavenly bodies always move in circles. They move in these things called ellipses. And nobody saw that.

And Kepler and many others began saying, well, if we've been wrong about that, maybe there's something else maybe there's this thing called laws of nature and they work, not what religious authorities tell us or divine rulers tell us, but maybe there are these fundamental things called laws of nature, and maybe we need to just look at nature, and maybe everybody could figure out. Anybody who can measure well

and can do experiments can figure out truth. It was the beginning of the democratization of truth and that transformed our species and the Enlightenment and and so forth. I'm fascinated by um the idea that what Westerners think of as the Dark Age, the Dark Ages from I don't know, three hundred a d. Tod and something was really not the Dark Ages for most of the world. Rest of

the world. It's just the Western perspective. Oh, this was the Dark Ages, not in India, not in China now, and not only that, we used so much of what we used in advance was just the final icing on the cake that had been built by China Islam in India. That that's quite quite intriguing. Do do you miss physics at all? You have your I think one of your parents was an astrophysicist. Both were. Oh so, so let's talk a little bit about astrophysics. Do you do you like?

What is Thanksgiving dinner commerce station at your home? Like? Uh? Is that a regular um discussion of quasars and black holes and the universal galactic constant? Or what? What's the conversation? Like? It was about you know, I think what was different and what we got, me and my brother and sister got out of having parents who are in science is curiosity. Because what drives scientists is curiosity about how the world works and asking questions. And so that's what our kind

of home life was like. Was about asking good questions. And it wasn't so much about what do you know? What did you learn? But it was about did you ask any good questions? And that actually turns out to be an incredibly important and valuable lesson that I took for many years. I didn't you know that all this stuff about follow your passion, I never really understand. I love banana pudding, but I don't fall not going for a career in banana. No, that's it's a passion for me.

But I don't follow banana pudding. But I do follow my curiosity. So when I sort of plateaued in physics that my curiosity wasn't there the way it was when I was first started. Then I made a switch and when my curiosity plateau about how big businesses work and are structured from the consulting world, and I went and started a company. So I kept following my curiosity. You know, how do you write a book? How do you tell stories that bridge together PanAm and James Bond and why

the world speaks English? With this one theme that seems really difficult? But how do other you know, how do you do that? I'm really curious, and so I just kept following my curiosity. So what you get from that is wonderful and I hope to pass on to my children some day. Is a passion for asking good questions. And I wish more people would ask good questions. Speaking of good questions, before I get to my favorite ones,

I don't I don't have you all day. But there were one or two questions I missed um during the broadcast portion, and let me see what I want to get to, oh um, President Obama's Council of Science Advisors on the National Future of National Research. You served on that. What was that experience like? Well, that actually was the spark for the research. It became this book because when I was called President Obama. I think like to have a lot of academic There were a lot of very

august academics. They are very impressive backgrounds, and I think at some point they realized they didn't have someone in the business world, especially in the startup innovation biomedical. And one of the people there had you know, knew me from when I was a student, and so called me up and said, I hear you do something in this bio world, whatever that is. Could you come on you

have any interest. I was like, sures, I'm But when I got there, the chairman said, there was a small group of us that were selected to work on this project on the future of national research. We've had these national research labs for seventy years, which the next seven years look like. And he stood up and he said, your job is to write the next generation of the van ever Bush Report. What should the future look like? And I remember thinking I have no idea who van

ever bushes or what his report was. You know, I was trying to run a public company I didn't have I wasn't doing a lot of science policy reading or in history. And I remember my first reaction was probably like a lot of people's m how do I get out of this assignment, because like, really, I'm really not the right guy for this job because I have no idea what this guy is talking about, and kind of maybe I can go back to the real world and uh. But then the more I started reading about it, I

was fascinating. He took people talk about, oh, it's hard to innovate when you're large. Well, van ever, Bush was faced with a two million person organization and he created this astonishing system for innovating incredibly fast that played an incredibly important role in Second World War and the future of the United States. How did he do it? Why? Why did it work? What did he understand? And I just got more and more curious about coming back to asking questions, why did it work so well? How did

he do it? What insights did he have? And I've had The more I read about him, the more I found out that there were all these lessons that he had picked up over the years that were really applicable to the business world and private sector, not just the public sector, and nobody had really gone there. And you give some credit to FDR for basically recognizing that Bush had correctly diagnosed the problem with the Pentagon. I don't even know what was closed the War Department then uh

and had some solutions to bridge that gap. I don't know a lot of presidents that would have been as insightful as that pre war time president. It was a ten minute meeting and a Bush was at the time dean of engineering at m i T. Was a provost, He was a number two at m i T to help turn m I T. Was it kind of an organizational genius. He had turn m i T from a average university into the leading technology university in the country and then eventually the world. But he saw the writing

on the wall. He saw from all the fleeing Jewish refugees from Nazi Germany that they were far ahead of us in critical technologies. In yeah. Well, he and several others were hearing this from the Jewish refugees, and he understood.

He had worked with the military, he understood that we were far behind, and so he quit his job as a tenured professor, moved to Washington, talked his way into a ten minute meeting with FDR, and he told FDR there's a war coming and we're gonna lose because the army and the Navy will never catch up in time.

And he gave him a proposal, three short bullets. I want you to authorize a new group inside the federal government that will report only to me, and I will report only to you, and I will mobilize the nation's scientists for war. It was a ten minute meeting. If DR read it, looked him up and down, signed it. Okay, FDR turned around, got to work. That's astonishing, just astonishing. People have no idea how close we really came to losing World War two, and how close we came to

have completely different world map. And and if you take twenty popular histories of the Second World War, you might find van for Bush's name in one or two of them. That's amazing. So I don't have you all day. I want to get to some of my favorite questions I ask all of my guests. I find these are revealing of who they are and what we don't know about them. Um, what are you streaming, watching listening to? Tell us about podcasts or Netflix? What do you what are you enjoying

these days? Well, my wife and I actually really loved Homeland, Homeland and the Americans, and I think if I have a guilty pleasure probably be that new Sherlock Holmes one with Benedict cover Batch. It's a lot of fun. I haven't gotten to that. If you like um Homeland, do you ever watched Fouda so it's an Israeli security group. Do not watch it before you go to bed because it is so gripping f A U d A so gripping and so exciting, Like when you're done, you're like,

So it's very much a challenging thing to watch. And then Jack Ryan is is really worth checking out. It's so funny because I spent we were talking before I spent a while at the CIA, and I remember asking them, I said, to go, like his Tom Crui is gonna come jumping down here from somewhere. Yeah, it's really fun. But I remember asking them about do you guys watch

any of these shows? And they were big fans of The people I spoke to were pretty big fans of Homeland, but the Jack Ryan They're like, yeah, it's just not well, you know, any of the Tom Clancy stuff, the Cold War things that was his forte. Everybody has kind of moved on and it's a little bit of a Cold War story in the modern era. So it it may not be their cup of tea, but everybody in it is really interesting. Tell us some tell us the most

important thing people don't know about Sofia bicol. Wow, I don't even know where to I guess you know. When I was in college, I had this dream. A buddy of mine and I had this dream that we would ride motorcycles across the country. And then when um, when I got out of call, of course I was never happening.

Do you ride at all? So yeah, when as soon as I graduated and moved to the Bay Area, one of the first things I did was bought a motorcycle, and I spent much of that ten years at the time that I was in San Francisco Bay Area on the bike. So I love to ride. You you can't ride around here. When I moved to New York uh years ago, I sold the bike. At that when I first started, I was an idiot, like any of course something.

I remember that there was no helmet law back then, But that's important because there's a shortage of organs and the lack of helmet law. States with no helmets don't have a backup. If you want to do good for the world and don't at your organs, don't wear a helmet. It's because you basically have a nicely preserved body. That's right, it's k or it just goes straight to the hospital, skip the motorcycle and say cut cut off my head.

But I actually I remember one day going out. I was living in Palo Alto and East Palo Alto at the time. People I don't know this, but it was like the murder capital of the United have like the wealthiest group and then you have like the murder capital. And I remember I had to buy a helmet. I remember going, you know, looked into classified I don't even know if there was a Craigslist back then, and I found this guy in East Palo Alto and I remember

driving over there and said, oh yeah. It was like this Hell's Angel guy with a giant gud and the huge beard and the tattoos. And I was like, yeah, man, this sucks. I have to buy a helmet, isn't it really doesn't really suck? And he just looked at me and said, you're an idiot. Really, he said, you're an idiot. Do you know how many friends I've lost because they didn't wear helmets? And you could. We could survive a fall with a helmet pretty sometimes yeah, assuming it's you know,

you're not going a hundred miles, but it was. I was an idiot it and anybody who like you say, when the Hell's angels say you're taking too much risk, you need to you need to head yourself a little bit with a helmet. You gotta pay attention. Um, So, who are your early mentors who affected the way you

look at the world of innovation and franchise and managing institutions. Well, I think when I was really honest with my father, he was just not only an impressive scientist and a real believer in a bigger purpose which is kind of the search for truth and asking questions, but it was also incredibly impressive and motivating people. I think when I got to Stanford there was a scientist named Lenny Suskin

who was like a disciple of Richard Feynman. He had this awesome style of really figure everything out for yourself. Like he said to me, Sophia, never want to see you in a library, really, And that's what Dick Feynman had told him. And it's when you have a problem that's sort of like underlying this book I came into you know, there's two hundred years of people thinking and writing about organization, and I just came from a completely different angle. And in part that's due to just think

about things for yourself. Try to come up. Don't read. Actually the opposite, don't read and absorb what everybody tells you is to try to think of things from first

principles in the business world, probably in your world. I one of my early board members was a guy named Bruce Kavner, I know the name, ran a very successful hedge fund called Caxton and he was a very deep, thoughtful thinker, and he, you know, he said little, but the little that he said was very thoughtful that would help you rethink the strategy, how players are acting in the world around you, strategy, competition, and so I got a lot of useful stuff from him as well, quite

quite interesting. Let's talk about books. What are some of your favorite books? What are you reading? What do you recommend to people? Oh? My god, there's so many. By the way, this is the favorite question. I get more emails about this question than anything else. Many got it. Well, Firstly, I love biographies and I read so many biographies. But there's there's one. When I was writing that book, I was sort of three years in a cave and I was just there's so many histories I had to learn,

and so many industries. So I was really focused on reading for that. There was only one author who made me stop and like read for fun that had nothing to do. His name is Scott Burke. He's a He wrote this awesome book on Charles Lindberg, the best book on Lindbergh, and it is such an incredible story because Lindburgh there really hasn't been a hero, an American hero like that in a century. People don't realize what a hero. When he completed that voyage over the Atlantic. At the time,

flight was this crazy thing. People wouldn't weren't even taking odds on his life because it was so bad, so unlikely that this young kid would make it flying solo across the Atlantic. People across the country were praying for him. And when he came back, it's like a quarter million stories about him. He went on a tour of the United States, literally a third of the population not to see him, and that's and it's this incredible arc because

he was more popular than FDR. He was this unbelievably popular guy, and f DR felt threatened, and FDR orchestrated this campaign against him that painted him as this Nazi sympathizer, appeasement sympathizer, anti Semite even and it just was not the case. But he was a very reserved guy and he didn't fight back, and so he got kind of tainted by a pretty orchestrated campaign against him. And just and he went from the most famous guy in the country,

two people like you know, burning his books. It was just an unbelievable up and down. And then he redeemed himself in the Second World War. And just the life story is an incredible story, and anything Scott and that biographer is a beautiful writer and combines great storytelling with very accurate history. So before I ask you about more books you like biographies and obviously flying, did you read the McCullough book on the Right Brothers. It's on my list,

but I haven't. It's it's I can't wait through, you can't, can't can't recommend enough. What else are you reading? What you know? Biographies? Um, I feel like I used to play competitive tennis in the juniors. Yeah, I am very late to the game of tennis. I picked it up in my fifties and I find it a fascinating and

frustrating sports. I really enjoy it. Well. That an anecdote there is there was a guy I don't know if you know this name, but you know, when you're young and the juniors, you often go around to tournaments with there's somebody local and you're one of your dad's drives you. So the guy would go around to tournaments with him play all the time. Was with a guy named Lyle Menendez, and he became famous later unfortunately for murdering his parents. Yeah, so I began my life in crime with Eric. But

were you? Were you any good? I was ranked in middle state really so, I mean Lyle was better, but I was pretty good. Um, but I grew up in sort of that. Andre Agassi Pete Sampras, the Andrea Agassi biography open. It's like one of the best sports biographies. It's I would never in a million years. Actually, you know what it's funny is that Pete Sampras wrote a biography first, and it was very good, especially if you like tennis, because you know it's it's good. And then

Andrea Agassi comes out with his biography. Second, and he wins like that hand he beats Pete Finally, finally, he beats Pete off. It's a it's a it's not only a sports story, and but it's also called all this drama because he had this huge hatred of the sport and a huge love of the sport that came from his father. And then how he meets stephie Graff. It's an incredible love story, the love story and sports story. Give us one more book, one more book, one more book.

Let's see. There is a book that I like by Gary caspar Off called about How Life Imitates Chess. It's a small book, but cass profits fascinating guy. I mean,

really the longest reigning chess champion in history. And there he kind of breaks down what it was about how he approached the game that helped him become this, you know, the longest reigning chess champion in history, and it was some very interesting insights that actually I still apply to this day, which is that he when he makes a mistake or or loses a game, or even he wins a game, he doesn't ask what was wrong with that move? Why did you know? You know? Night to Bishop three

was good or bad? He has what was in my mind that when I made that decision, What was my decision making process by which I arrived at that conclusion, and how should I improve my process. It's a little like an investor, I think. You don't say you lose money on an investment. You don't say, well, you know, the balance sheet was this, or the p was that, or the team was at and I should look at you say how did I decide? What was I thinking

during that day? What are my mental checklists? And then you go back and try to change your mental checklists, so you gain much more than just the one understanding of the one move. Basically comes down to keep asking why why did you make that move? Always process versus results. If you focus too much on resulting, as any Duke called it and thinking and bets, you're drawing the wrong conclusion as opposed to what process led to that result.

And in a very interesting and strategic way. Speaking of failure, tell us about a time you failed and what you learned from the experience. Oh, there was so many. I mean I don't even know where to start. They could be another hour. Um. In fact, when I first started a company, My favorite question was going around to all the successful people, any successful people that would take five minutes to talk to me, and ask what do you

wish you'd done differently? And by the way, I asked that question to everybody who we talked to about renovating their kitchen, because we're about to start a kitchen renovation. What what did you like about the process? What what would you do differently? What mistakes did you make? And I have found that that question is great for everything.

It's the best question. And I learned so much. And one of my mistakes was not listening enough to what I heard and uh, good advice ignored, you know, I mean, there's there's there's two kinds of failures where you do the right stuff but things don't work out. Like you do all the right stuff about developing a drug, but it just doesn't work and there's something fundamental about the technology.

That's a good failure. That's a failure, but it's very depressing if you've spent years of your life or the team and you had all these high hopes and these it's it's it happens all the time, but still when you go through that and it's you know, people are crying their emotional because of all the promise that we thought we could do for the world and then it doesn't work. It's really and when you go through those

hard times. I had a terrific hr guy who was a great advice are older than me, quite a bit older, and he was a former actually professional football player. He

played for the Patriots in the NFL defensive back. So he had this great way about I mean, was you know, just tough, che feely enough to do the job well, but not so much that you're like, come on, so And one of the things in difficult times like that and failures like that, that you know he coached me on and coached all of us on, was how to make sure you treat people with dignity and fairness and how do you help them because relationships last longer than

any company or any project, and so the importance of relationships and leading by relationships was incredibly powerful and the lesson that I really should have understood better when I was a young guy and asking people, you know all these you know, successful people, Almost invariably the number one answer I got about what do you wish you'd done differently? When I talked to successful CEOs off off the record

was get rid of people faster, real hiring mistakes. I was too slow to make a change anyone who's gott into a large organization. As you you lead through your team, you don't really so much. And if you're trying to make individual decisions, you know it's going to be a big problem. But you lead through the team that you assembled. And almost everyone I talked to he said, I wish I'd move more quickly on some and some bad members.

And uh, you know, ten or fifteen years later, I was saying the same thing because my mistake was me and some of the folks I worked. I was thinking like, oh, we have this bad problem. We think we can fix it. Sometimes you can't fix a problem. Sometimes you just need to make a change. So what do you do when for fun, when you're when you're not down in the c I a telling them how to save the world. What do you do for um to relax and kick back? Well?

I have Uh my wife is pretty cool. So we got from long walks and we have two young kids. We just I could just sit and watch them and that's pretty cool. So now I do running. I don't have so much time for you know, tennis or or other endurance sports. But I go running and endurance sports. Uh yeah, I did tryathlon for quite a while, and uh you've replaced triathlon just with the running portion. Triathlon is another job. If you do kind of long distance like half fire and or iron. I did half firing

it into Iron. I mean it's ten to fifteen hours a week of training, and it's a brutal race and of itself. I think everybody took the wrong lesson from marathons. Remember the first guy who arrived at Sparta, he dropped dead. That's right. That should have been a cautionary tale. Don't don't do that. But he didn't have good shoes. Well that's true. Um so in the world of and I don't even want to limit it to pharmaceuticals, in the world of large important institutions. What are you optimistic about

and what do you pessimistic about looking forward? Well, I'm optimistic about the progress of medicine. I mean, we're just beginnings of growing organs in the lab. And speaking of we were talking about organ replacement if you're ride a motorcycle. But it's unbelievable. We just just recently just a few weeks ago, they are three D printing blood vessels onto early proto organs in the lab. And that's just just

in the last few weeks. Imagine where will be five or ten years from now, and we're kind of on the verge of helping blind people see by rewiring the inputs to the brain if their eyes are fried, or helping deaf people here. It's just incredible the pace of science and medicine and where we might be ten twenty

fifty years from now. What I'm concerned about is where that technology gets used for bad purposes, Specifically what we were talking about earlier in totalitarian regimes taking those some of those technologies, whether it's AI or machine or bioengineering, and what totalitarian regimes can do when they weaponize them, not only against others, but against their own people. It

helps keep them in power. So I'm concerned about something that hasn't happened in the history of our species, which we are creating these new technologies which can actually help keep totalitarian regimes in power longer. And our final two questions, what sort of advice would you give to a recent college graduate who was thinking about a career either in pharmaceuticals or entrepreneurship. What would you advise them? Well, first of all, go around an experiment, because that's the only way.

No amount of reading or listening to people tell you what you should or shouldn't do is going to replace trying something and just getting your hands wet with something. And the second thing is curiosity is ask people. Don't ask people, Go around and ask as many people as you cannot, how did you succeed? Because often people succeed because they got lucky. They were in the right place at the right time. And they're not going to tell you that, But ask them what we just talked about,

which is what do you wish you'd done differently? Because that they've probably thought about a lot. If they're intelligent, thoughtful people, and they can have a pretty good answer because they've there's no I was in the right place at the wrong time. There's some people, if they're not very good at this, will say oh, I was unlucky. But the people who are much better and take lessons, we'll say, well, I should have done X, and I should have done why. That's a great thing to learn.

And and my final question, what do you know about the world of organizations and decision making an innovation today that you wish you knew twenty plus years ago when

you were first getting started. I would say it's important if you're running something of having people around you, whether they're inside your organization or oftentimes even better outside, who you can count on to tell you when you're being an idiot, to tell you the truth, because, especially if you're in some kind of position of authority, people don't want to tell you that if you have some influence over their lives. They have other things that they care

about other than telling you the truth. So it's and sometimes it's important to get out of your organization, listen to people who are really out there and get different perspectives. So I wish I had done more of that. Quite fascinating. Thank you Sophia Picole for being so generous with your time. We have been speaking with the author of loon Shots how to nurture the crazy ideas that wind War's cure

diseases and transform industries. If you enjoy this conversation, well, be sure to look up an inch or down an inch on Apple iTunes and you could see any of the previous three hundred or so such conversations we've had over the past five years. We love your comments, feedback and suggestions. Write to us at m IB podcast at Bloomberg dot net. If you're still here after three hours, well then go to Apple iTunes and give us a delightful review. You can check out my daily reads on

rit Halts dot com. You can follow me on Twitter at rit Halts. I would be remiss if I did not thank the crack staff that helps put together these conversations each week. Carolyn O'Brien is my audio engineer on My head of research is Michael Batnick. Tracy Walsh is my project manager. I'm Barry rit Halts. You've been listening to Masters in Business on Bloomberg Radio