Sam Altman: Accelerating Biotech’s Metabolism
Out of the Crisis Podcast Transcript
Sam is one of the most prolific company builders in Silicon Valley. He’s also one of the first people I saw taking action to help fight COVID-19. In this episode, Sam and I discuss the investor’s perspective and role in helping with a crisis, how he thinks we’ll move on from the pandemic, and whether the pandemic will lead to a paradigm shift in work, science, and crisis prevention.
Show Notes
Panelists
Producer: Ben Ehrlich
Editor: Jacob Tender
Links
For those who want to get involved in the initiatives we discussed please visit:
The original audio can be found on Breaker, Apple Podcasts or wherever you listen.
Eric Ries
Welcome to Out of the crisis. This is Eric Ries.
My hope with this series is to highlight the people in teams who are working to address the coven 19 crisis in sharing the stories of those that are leading is to inspire others to take action that really is what is needed now. And by now, I mean today, in the coming weeks and months, everyone’s 2020 plans have been blown to hell. Nobody can make a strategic plan now for next year or the year after, we’ll need at least a month to even understand what this business context means. All of us have an obligation to act right now in ways that minimize the damage that look after the people who are affected. But most importantly, begin to lay that foundation for the future, to make those investments that can only be made in a crisis, to support people to figure out what went wrong and how to prevent it next time and to build nucleus capabilities that will allow us to react quickly. Whatever the situation is no matter how uncertain again, I wanted to start with a recent conversation I had with Sam altman. Sam was one of the first people I saw in the tech world jumping up and taking the leadership position related to Cova 19. Our conversation focuses on what investors can do, but also what all of us can do to help lead in a time like this. And although we’re very clear in the conversation, that the true heroes of this situation are the frontline medical personnel and the people in all walks of life and ordinary people who put their lives on the line to keep our society functioning under these extraordinary circumstances, there is nonetheless a role for those who are positions of privilege to play in leading our society out of the crisis. Here’s my conversation with Sam altman.
You were one of the first people who when the prices was breaking, I saw your name all over Silicon Valley in the white comic In your forums, your name was attached to a whole bunch of different things that seemed to be related to getting us out of this crisis. And so I wonder if you could just talk a little bit about how did the virus in the pandemic first come onto your radar? And what motivated you to want to jump in and try and help?
Sam Altman
I think like a lot of people, I just wanted to help in whatever way I could figure out what I knew how to do. And this is like, well out of my area of expertise. So the thing that I thought I could help with was funding startups and research labs, nonprofits, whatever, that were trying to make a difference. Obviously, I think that in a time like this, it this is when we should have a government response, but I don’t think there’s been enough of a government response focused on funding the things that can get us out of this. And so I decided I would I would focus on that. Um, I think I first heard about this are in early January, I saw something online and then sort of a few people in my Twitter feed started tweeting about it a lot in, in sort of middle to late January. And you know, this is the kind of thing I worry about. So I had been paying a lot of attention. I think that it’s been really cool to see, as terrible as this is one entire industry focus on one problem. And the speed with which biotech startups in labs have been moving to figure out how to help with this has been quite inspiring. I’ve never seen one industry do this. I’ve never seen biotech move this fast. And although I think it’s going to take a while I am optimistic that we’re going to solve this particular crisis and also that the world is now woken up to the dangers of pandemics again in the modern era. And we will have a huge amount of talent and resources go towards this.
Eric
Before we get into the things that you’ve been funding and working on. You said that this is the kind of thing that you pay attention to talk about what your level of interest was in this or why it was on your radar. before the crisis started.
Sam
It’s more just like I think that and I’m not alone in this. I think a lot of people think this that the risk of a pandemic, and the health and economic impacts that would have on the world were just sort of like much higher than people realized. Like, I couldn’t guarantee this was gonna happen this year. But we knew this would happen eventually. And I don’t think it was something clearly that the world was very prepared for.
Eric
Why do you think people didn’t take the warnings seriously, given that the experts in the field have been talking about this? I mean, for many years now.
Sam
I think it was in the category of an important but not urgent problem, and it’s easy to put those aside. It doesn’t it’s really sort of like, I think hard to think about something like this before it actually happens. It doesn’t it doesn’t feel that real. And I think unfortunately, just have a culture of ignoring a lot of experts.
Eric
Yeah. Is that is the truth? Was there a single moment for you that you remember where you woke up and say, Wow, this this really Israel?
Sam
This particular one or pandemic risk in general?
Eric
This one in particular?
Sam
Um, I yes. So I was like very afraid, early on, it seemed to be spreading quickly and move on. And then if you watch the Chinese case, numbers, they sort of started to level off a little bit. And I thought there was like some chance that it would stay contained or that the rest of the world would follow their example and do really great, you know, in the stage where you still can contain it. Really great job with that. And then I remember seeing back when there were only maybe like 1000, worldwide cases outside of China, the shape of that graph. And I sort of realized, at some point when it just looked like this perfect exponential, that it was beyond what was going to be contained.
Eric
What was the first thing that you got involved in in the response once you had that moment?
Sam
I don’t remember the very first company. But so I generally think there are three ways or experts think and i agree with them that there are three ways out of this. There’s a, there’s a good enough vaccine to get the virality. Rate below one, there is a, a very good treatment, good enough that people sort of aren’t afraid and can live their lives. And then there’s like a great culture of testing in isolation like China did. And I haven’t heard a really convincing fourth. So I’ve been recently trying to focus on a funding efforts in that category. earlier on, I was also helping with efforts trying to produce more ventilators or personal protective equipment. But at this point, I’m focused on things and those three categories. And now that testing is really ramping up, really, really more on the therapeutics in the vaccines.
Eric
Do you want to walk us through some of the specific teams that have been You are making progress in those three areas.
Sam
I will say as a general statement, it ranges from labs to new companies to existing startups and even bigger companies that have totally repurposed what they’re doing. And one of the coolest things is seeing everyone be willing to work together on people who don’t like each other people is everything. That’s been awesome.
Eric
Can you tell us some stories without naming this specific companies of just people who have made that hard pivot and just dived into this with two feet?
Sam
Um, yes, and but the cool thing that I really think is, it would be hard for me to name a reasonably sized biotech startup that’s anywhere in the realm of this sort of work that has not sort of changed what they’re doing and put everything else on hold just to work on this. There are companies that were you know, some that make more sense like companies We’re working on antibody therapies for other things that just put their entire working plans on hold, and said, We are going to get antibodies from our patients. And we’re going to figure out, we’re going to sequence them figure out what to do, and we’re going to make antibodies for for Cova 19. And it’s just like, you know, the CEO woke up one day, six weeks ago decided to make the entire change. And the entire company came in the next day doing something different. They’re entrepreneurs who have a background in biotech, but we’re doing a non biotech thing, who put their web services or whatever company on hold, and said, You know, I know something that could be helpful to people trying to produce a vaccine here, I’m going to make a company to start that. There have been a lot of examples for that for for testing. And then there have been entrepreneurs who sort of don’t don’t do anything in the realm of biotech but can somehow help with logistics or distribution or whatever they’d like. I am going to ask My friends who do run biotech companies, or hospitals or whatever, what they need me to do, and then all of our plans are out the window, we’re just gonna do that.
Eric
We’ve really never seen anything like that in our lifetime, in terms of the whole industry, just putting everything on hold and all hands on deck.
Sam
I don’t think we have. And I think it’s going to be, I mean, I think there’s many ways in which this is going to not mean I think there’s a handful of ways in which this is going to be a before and after a moment for the world. But one of them is I think biotech is gonna move with a different clock cycle.
Eric
Could be an incredible silver lining. I do think it’s also interesting given how I’ve talked to a lot of CEOs of companies of pretty much every size you can imagine since this started, and it seems like a lot of the larger companies are struggling to respond and react quickly. And yet, it’s the startup community that has gone all in on decisive action, even though relatively speaking the cost for some of these startups, it’ll be you know, suspending the whole company or maybe risking the whole company on the solution. What have you noticed in that kind of the startup communities ability to move fast and kind of double down on this?
Sam
I want to echo again, that in a perfect world, this response would be led by the government, not the private sector. I think this is the kind of thing the government’s supposed to be good at. And big companies are supposed to have a hard time you know, turning on a dime, so I don’t fault them for that. startups have more flexibility and less to lose so they can do more. I’d love to see big companies do more but I understand the challenges and and the economic impacts here obviously just massive, a lot of a lot of medium size or larger companies will not survive it. And then prioritizing trying to keep their employees getting paychecks i think is I think it’s understandable and fine. But the people who can help and are able to help.
I think that’s been awesome to see. And again, terrible thing to be in the situation we’re in but watching the world, the business world come together and say, those of us can can help, like, what can we do? That’s been cool. I think I’d love to see more of and that I hope will start to happen is more investors helping out with startups or medium sized companies that need funding and connections. I, I think we’ll start to see that. But I’d love to see it happen faster. There’s incredibly talented people that want to figure out how to how to help and what they need is capital and connections.
Eric
If someone right now is listening, and they’re in that category, what how would you urge them to get started? Maybe I think for a lot of people has been overwhelming to know how to help, how to start what to do. It’s such a big problem. How would you advise them for an investor
Sam
Yeah, if you put out the word to your network and I’ve done this myself and seen other people try it as well, that you would like to allocate significant capital, ideally both for profit and nonprofit, but even just for profit, two companies trying to fight kovan, you will be overwhelmed with the response. It’s much I got much more of one than I ever imagined and very high quality people that wanted to work on it. new companies or pivots, temporary pivots. So the trick is to be able to evaluate them and most investors will probably need to rely on experts to help them with diligence. But I’ve also been pleasantly surprised with just how many people are willing to help again, this is this moment where everyone wants to pitch in and we need more capital focused on on the problem.
Eric
So beyond investors, what type of people are needed to help you know, if you’re not an investor, you’re not a healthcare worker. What can you do?
Sam
Why do the people who can help most of this point are the scientists. The the healthcare system is going to do its thing. And I think they’re going to make the best of an extraordinary difficult situation. And I think that when we look back at this, the the health care system is going to be the equivalent of the first responders on 911. The risk that these people are taking to keep as many people as they can healthy and alive is incredible. And we will remember that with an incredible debt of gratitude for a long time. But I think the thing that’s really going to where one person can make a difference, or a small group of people is a startup that does something and one of those three categories that I mentioned earlier. And, you know, I think a lot more people can figure out ways to help out than they think. I just saw a friend of mine who’s a finance person temporarily lost his job and volunteer to be the best CFO or investor whatever investor relations person for for a startup is trying to work on a cure so that they, the founders could have more time to do the science. So I think people are finding all kinds of ways to help out.
Eric
You know, when I echo what you said about the medical first responders, if you will, it’s been it’s been amazing to see people rally to get PP for those folks to try to help them and support them in in whatever way possible. And, you know, I don’t want in this conversation to minimize the just incredible national tragedy of the federal government’s lack of leadership here and the fact that we missed the window to do prevention and mitigation. And I don’t want to sound like oh, we’re overly focused on the silver lining the the human and economic toll of this is, is absolutely devastating. But I’ve seen that too, that the the kind of response of individual people of civic society of people just stepping up and being leaders in in whatever way they can to address whatever part of the crisis it’s it’s been really inspiring.
Sam
Most people step up in a crisis not they don’t disappoint you, and certainly been true, mostly here.
Eric
Are you involved in some of those efforts? You mentioned earlier about ventilators and equipment.
Sam
Yeah, I was earlier I funded maybe three or four efforts trying to make new ventilators, for example, I have since been more focused on what I view as this as this next phase. And I think there’s now a lot of, I’m sort of a believer in try to allocate capital where it is most needed relative to how much is there, and there’s not so much so many, like, really great people focused on helping with the equipment side that I’ve tried to move on to these other areas.
Eric
That makes a lot of sense, Ivan, now we have the problem of lack of coordination of those people who are all bidding against each other on the same gray market in China. So if anyone’s interested learning more about that, yeah. Yeah, got a PP coalition comm You can learn more about the problem there. So let’s say somebody has an idea, but they need funding, they need volunteers. What would you advise them to do? How can they get the word out?
Sam
Um, a friend of mine named Roger made a site called help with CO vid for connecting volunteers to projects. It’s been
Eric
Helpwithcovid.com right?
Sam
And then for fundraising. I think it’s like, I think we are now at a moment where many investors are considering really jumping in here and fast and be indecisive. And so I would encourage people to just reach out to the normal crew of Silicon Valley investors. That’s in a premier nonprofit capital or for a research lab. I think a lot of the family offices are now making this a significant priority.
Eric
Are you aware of anybody who’s trying to coordinate among those different funding sources make it easier for people to access?
Sam
Um, no, but that would be a good thing to do.
Eric
Yeah, someone should post that to help with coven issues. You know, I’ll just say on top of Cova, I now have three or four projects listed there. I find it incredibly helpful. And I’ve probably placed I don’t know, maybe 100 volunteers.
Sam
That’s been super busy just like in a normal environment, something like that wouldn’t work, right? Like someone throws together a website says list a project or volunteer. And people would be like, okay, whatever. And I think the fact that that works shows how many people really want to figure out how they can help.
Eric
You know, that is one of the big surprises for me is how many people who have come applied for a volunteer position through help with Kovac are like legitimate Silicon Valley people, you know, who either I know who they are, they have a pretty big time job. It surprised me that their own companies aren’t giving them enough opportunities to be part of the relief effort that you know, they’re having to go through help with covin. Do you have advice for people who are leading companies how they should be engaging their own employees or their company’s resources to get people involved in the relief efforts. You know, of course, they can work on antibodies, that would be a pretty obvious connection. But what about the rest of us?
Sam
I think we’ve seen a handful of companies now tell their engineers that if you want to take paid time off to go work on a software project, related to kovat one particular example that came up recently was a contract contact tracing software, that you could do that. And I thought that was a really cool response, again, like different companies have different flexibility. And so many companies are just trying to stay in business. But for companies that have the flexibility to offer something like that, I think it’s a wonderful thing to do.
Eric
I’ve really found that help has helped a lot with morale, you know, at ltse. We’re in a relatively strong place. And so we haven’t had this kind of crisis fundraising and, you know, grappling with some of the harder choices that I know a lot of startups are making and yeah, you know, for people who are in a privileged position It’s actually psychologically very difficult to feel like you’re just, there’s this problem and you’re not part of the solution, and you feel like you shouldn’t be doing something. And so I think that’s really powerful for companies to think about, you know, as a way of investing in their own employees and their skills,
Sam
to be part of it, to be doing anything at all. And it feels really good to be helping other people to do anything at all. I had this period, back to back once where I was just like, reading about this impending disaster and feeling like I couldn’t do anything. And then another where I was working 16 hours a day trying to help and you know, hopefully it actually turned out to be helpful, but the difference in my own personal mood when I had something to do versus nothing about this was so different.
Eric
I had to totally same experience. It’s been nerve racking and so stressful to be working on the solution, but at least you’re doing something it’s so much better than despair. We’ll talk a little bit about the role of science and how this might change people’s relationship to science in our society. You’d said at the beginning that we have kind of a culture of not listening to experts. And we certainly have lived through an age now where there’s been a diminishment of science in the public eye and a kind of reduced institutional credibility of scientific institutions. Now, all of a sudden, you know, all of us are praying in our homes every day that scientists will make a breakthrough that will allow this nightmare to pass. What do you think the consequences of that are going to be for our society?
Sam
Um, you know, I try not to make predictions about long term mass scale human behavior, because I usually get them wrong. But I do think there will be at least a short term moment where after a period of a lot of despair and economic and health disaster huge number of people die in tragedy by mega tragedy by any metric on science. I think at some point in the next year is going to deliver for us and we will get either a pretty effective vaccine or a very effective treatment for this. And that is going to feel like a magic moment. People will be able to walk the world again. And, and life will be back to some semblance of normal. I mean, I think people will be in fear of another pandemic as they should be. But, but that will be a moment that will feel like a miracle. And I think for some period of time, there should be some return to a belief in gratitude for science and scientists.
Eric
I want to talk a little bit about something you said at the beginning, if you don’t mind where you were saying that this will change the clock cycle, cycle time of biotech. Yeah, just expand on that a little bit and and talk about why you think that could potentially be important.
Sam
So let’s say I’m working with 20 companies that I’ve in, in some cases known for a while, and some are brand new, that are working on this. I’ve got some data points on the maybe five companies that I already knew and invested more into focus on this. And I sort of have a sense of how much they used to get done a month and how much they now get done in a day. And they feel within striking distance of each other. Um, I’d say biotech startups now feel like they are moving with the urgency and efficiency of software startups. And I don’t think people go back from that. The things that I always say you need for a startup to be successful are a fast cycle time and low costs. And biotech had the capability to have those things, but didn’t have them in practice. And now they do. And once people have like, tastes Did that they won’t they never go back.
Eric
I’ve seen it in so many industries, you know, through lean startup in manufacturing in all kinds of r&d heavy places at once you get that taste of the possibility of going fast. You know, it can be a wellspring of so much startup activity.
Sam
Yeah, totally.
Eric
It’s interesting, because you said that they had the capability earlier, but but didn’t do it. So just talk a little bit about the mental shift, the mindset change, that this crisis has driven for those folks who have realized something new with the same tools they had before?
Sam
Well, I think people just now feel something where they’re, like, you know, every day that we don’t get this done, is one day more of this current awful situation. So let’s get as much on every day as humanly possible. So tell me a little bit about why you personally have moved from despair to Hope about the crisis. The main reason is just that the scientists working on these things. And the result the early results they’ve had in the lab, or in animal studies. And again, you like, you never know you try these things in humans, sometimes they don’t work. But there’s so many things that seem individually really promising, some of which we have similar data, like creating antibodies for it and using that for a treatment to have like a more educated guess. But the probability of none of them working seems low. Now, none of them will work really fast. And unfortunately, this is going to get worse before it gets better. But I do think like, we’re not going to be locked in our homes forever.
Eric
Do you want to talk a little bit about just for people who don’t know like the background of how long these things take and why it takes so long, like how a vaccine gets made or anything like that?
Sam
Yeah, you know, it’s easy to blame the FDA and I think they deserve a lot of it. For, for making things take a long time, they do generally keep us safe. And if you’re going to create a new molecule, and inject it into a lot of people, or give them pill or whatever, you know, I would say it doesn’t need to take as long as it does, but it should be done with caution. And that does take some time. And if you’re going to give people a vaccine, like it takes a while to find out how well that works, unless you’re going to like spray virus in their face. There are some things that can move quickly. So one thing that I’m hopeful for, but it may not happen, is repurposing existing approved drugs or new combinations or reformulations of drugs. That could happen pretty quickly. And there were a number of drugs that already that might help for this that were already not approved, but like pretty far along in the process, and those can happen quickly. But what won’t be the case and sort of the 10 years that people say it takes to get a new vaccine into humans. It’s going to be much faster than that this time.
Eric
Tell us one good thing that’s happened to this past week.
Sam
I mean, a lot, right? Like I’m here, I’m not sick, I’m able to help. I’m cooped up, but with people that I love. And I have no complaints, I feel terrible for what’s happening to the world, trying to do my part to help him to be a good citizen, but I have no serious problems. Everything has been good.
Eric
Can you just say a little bit about your personal social distancing setup, and especially think about folks maybe that aren’t totally on board with 100% social distancing, or think it’s an overreaction? Just say a little bit about what that’s been like for you personally.
Sam
It’s definitely, I’m thankfully in lockdown with people I really like but it’s definitely hard not to see friends. And not to go outside even like basic stuff. You forget how nice it is to just like walk through grocery store or around the block or Whatever. But um, I think there was this photo on Twitter that I really loved of healthcare workers saying please stay home for our sakes. And I think like anything we can do if we don’t need to be out doing things to help if people can stay home and take social distancing really seriously. Even though it sucks like zooming zoom dinner parties are not the same thing as real dinner party is not even close. And the day we get those back, we’re going to appreciate them so much more. You know, I think everyone who takes it really seriously slows the spread a lot. And it’s worth doing.
Eric
I read somewhere that one infection prevented today saves 2600 infections over the next three months.
Sam
Wow, that seems surprising to me. But that is amazing.
Eric
I mean, that’s it’s exponential. It’s you know, man, it’s just it’s so it’s so wild. And we have bad in tuition for that.
Sam
That is true.
Eric
What about? Oh, hold on, let me just think for a second. Who else has impressed you with their leadership? During this time? Who are the people you would say that that’s a leader who has stepped up or who has kind of taken the right or bold action? Maybe when they didn’t have to, or it wasn’t obviously the right thing to do.
Sam
Can I pick slouchy? I mean, I know that’s like a no please, whoever, whoever’s on your mind, whoever you’re interested. I mean, I’ve like been a fanboy of his for a long time. I like wrote a paper about him in high school.
Eric
Really? Wait, hold on. Well, go back. Go back. Tell us about that.
Sam
I don’t remember how like this first came about but I had like, taken some interest in infectious disease in high school, and my dad told me about him. And like, I studied him for a term paper.
Eric
What was the paper about?
Sam
Just like, infectious disease and him and sort of history of stuff in the past? It’s so cool. But yeah, I like seeing him on TV every day. Have a sudden I think he’s great. I think he is like such a calming expert presence.
Eric
Who else would you give kudos to anyone in the startup community, either investors or CEOs who have impressed you.
Sam
I again, I there are many of many people in the community who have done a great job. I think none of us deserve nearly as much credit as any healthcare worker that’s still going to work every day.
Eric
Do you mind talking a little bit about your conversations like with startups in your portfolio, people have reached out to you for advice about how to handle a crisis like this.
Sam
Sure. Yeah. So a lot of startups have been reaching out for advice not about how they can help with the epidemic, but how they can survive and not have to layoff their employees. Um, I think, first of all, a downturn can be an amazing moment for startups. The only thing that is really cheap, in a bubble is capital, all the other things that matter, aggregating talent, getting people to care, all of that stuff. That’s that’s hard in a Boom and easier now. So I think this is a moment from which great startups will emerge or strengthen. However, surviving is important. And although I think startups are thoughtful about their expenses, and how they can rein those in, there’s another calculation. There’s another input in the burn calculation, which is revenue. And the startups that have sent me their models so far for feedback, do a good job on the expenses, but they do not get nearly bearish enough on what can happen to revenue. Again, same thing, people say, Oh, I’m a sass company, you know, my customers never go away. They never stop paying. Meanwhile, like, then I have a call to another company who’s like, Oh, I’m thinking about stopping paying this company told me they’d never stopped paying, you know, what do you think about that? When I’m reducing my own expenses. So I think the important thing to really be severe about is modeling a decline in revenue as you’re redoing your fpn a two To survive this
Eric
what kind of advice? Have you given them about their like personal obligations as leaders taking care of themselves taking care of their teams how to treat people with respect in very intense times? Oh, boy, but those kind of conversations that yeah,
Sam
that’s that’s probably what most of the conversations are about. And I have this sort of like general theory that when a founder calls asking for vague help, what they’re really calling for is like a friend to or a therapist. And a lot of it is about that, which is just the, the overwhelming responsibility that founders feel right now. And also, just the intense uncertainty. You know, like, not a lot of founders I know right now are like sleeping great through the night. Not and people are going to have to face some very tough decisions. And I’d say most founders still don’t realize how tough those decisions might be. might get, I think there’s still a little bit of delusion or excessive hope or whatever you want to call it, and we might pay. But I think I think this is a moment to plan for the worst and hope for the best for startups that have relatively short runways, especially if revenue declines.
Eric
I’ve been urging the startups that I talked to, to to budget on a net burn basis. So that you know, spending is gated behind net burn targets and so therefore, if revenue declines, you automatically cut back or don’t hire or do whatever, whatever you need to do. Do you have like a favorite tactical tip in that category?
Sam
I don’t have good schematics. I don’t have like good rules for this. You know, I This doesn’t scale but for the startups that I’m really close to, I just try to like look at their model and tell them where I think it’s wrong. But I don’t have like, good rules. Your sounds like a good one. Do that systematically. And I think like a lot of VCs aren’t helping by telling founders Oh, yeah, we’re gonna keep investing at the same pace as normal, they might even believe it. And they might not do that after, like science may deliver us a miracle here. But even if we got the vaccine in a month, which I don’t think we will. We haven’t run this experiment before of what happens when you freeze the economy, and then
Eric
start to try to restart it.
Sam
And maybe that works. I sure hope it does. Um, you cannot stimulate yourself out of a world where business entirely stops for very long, and I just I don’t know how this is gonna go. And I you know, I think it’s like always a little frustrating when you give advice to people, which is just I don’t know what’s going to happen here. But it’s the only thing thing anyone can say. And in times of great uncertainty, I think you should do what you can to reduce volatility.
Eric
One of the reasons that these kind of crises become macroeconomic depressions is that my spending is your revenue and vice versa. So everyone who’s giving advice about cutting back and I’ve seen so many posts on the yc forums and elsewhere about how to renegotiate all your contracts with all your vendors, how to stop payment, how to get discounts. And so same people who are saying and also make sure that you try to find new sources of revenue, and check in with your customers and see if there are ways that you can serve them better. And a lot of times, it’s the same companies that are gonna be renegotiating with each other. And
Sam
this is worse for startups who mostly sell to other startups. Um, but but there is this this was the point that I was less eloquently making earlier, which is if, if your assumption is you’re going to cut back on spend, but your revenue is not going to cut back and everybody else’s assuming the same thing. Something doesn’t add up.
Eric
It’s gonna be it’s gonna be super painful. Let me do one more economics question. And then I want to close with some virus related stuff. Is that right? Great. So, one of things I’ve been really thinking about is just struck me is the differences between now and 1918. And, I mean, there’s so many of course the world was at war at that time, the technology has advanced so much, we have so much better scientific understanding. But in terms of the economic consequences, one of the differences is, think how much of our life has been able to sort of kind of keep going thanks to technologies like zoom. What do you think is going to be the impact economically and socially have, you know, will it will it change people’s relationship to technology or how they see the role of technology if that winds up being one of the reasons why the economic damage was to some extent blunted? Um
Sam
Well, I think most people actually like most technology and that you get a skewed opinion If you mostly like, listen to what the media thinks about technologies, I think people already, like the fact that they can do a video conference instead of driving somewhere for a meeting. And I think that will only be more cherished. Now. My concern view is that this whole thing is actually going to be a net negative for remote work and not a net positive. I think remote work great for some people at some jobs some of the time. But when I think people are going to realize there’s a whole set of things that are very hard to do remotely. And although everyone thinks remote work is now like, just the whole world is going to shift. I would my Yeah, my country, and it would be it goes somewhat the other way.
Eric
Yeah. I’ve wondered about how many conferences and how many meetings will people realize, gosh, we cancelled that and it didn’t matter.
Sam
So that will be true. I think there will be less business travel as a new default and that’s not going to go away. I think people will realize like, hmm, is it really worth it? like flying halfway around the world for one meeting, then flying back, given the time and the cost and the carbon footprint of the jet lag and everything, or is that something I can do via zoom, so that I don’t expect change? I think travel patterns will just be different for business. But in terms of people like companies going fully remote, I expect a reaction the other direction
Eric
Who is leading us out of this crisis?
Sam
The health care workers, keeping things going at all. And the scientists working on tests, vaccines and treatments, and the logistics people that will make everything in between happen.
Eric
What gives you hope that we will get out of this crisis,
Sam
deep seated belief in science and that we have figured out how to vaccinate effectively against or treat many other viruses. I don’t expect this one to be the One that we can’t, the data that I’ve seen from companies or labs working on vaccines and treatments so far. Again, you never know and it’s not going to be quick. But something in there should work.
Eric
What do you hope we as a society will take away from this crisis and do differently in the future?
Sam
You know, we talked earlier about a, a belief in experts some of the time obviously, sometimes experts are wrong. I believe in science a lot of the time, a reminder that when the whole world focuses on one problem, no matter how bad it is, we can take it out pretty quickly. And one thing that a lot of people have said, but I certainly myself feel is how much the whole world is like in things together, and how some of us do or don’t do something that affects all of us and how interdependent all of these systems are You know, it’s a terrible moment, but I sort of believe that sometimes you come out of terrible moments stronger. And I hope we have like a pretty big resurgence after we got through this.
Eric
What’s the expression from your lips to God’s ears?
Sam
I think that’s it.
Eric
Yeah. What are you excited about in the next couple of weeks?
Sam
I’m kicking off a handful of helping to kick off a handful of clinical trials.
Eric
Any trials or experiments that you’re like waiting with bated breath to see the results or you have a special affinity for hoping that they’ll work? Um,
Sam
I’m not sure if I can see it. I will say like, I think so. I’ve been watching some of the antibody stuff that is been widely reported already with a lot of excitement.
Eric
You’ve mentioned a few times. You’re you’re kind of deep abiding belief in science as an engine of progress and a way to get out of the crisis. Where did that come from, from you Personally,
Sam
I mean, I was like a science nerd growing up. And like, the thing that I did in my spare time as a kid was like, read about science or the history of science or discovery or whatever. I don’t invest that much in startups anymore. But the startups that I still do get excited about our sort of the big iron science projects, I think being on the frontier of discovery is like the most exciting thing in the world. And I think it is truly remarkable what people can do and figure out and understand about the world and I think people should just be like, much more amazed than they are.
Eric
In the startup world, you know, that hardly anybody who doesn’t, doesn’t know who you are, know your story already. But for those who are coming in from outside the startup world, just Tell us a little bit about your path from science nerd to start up investor into what you’re doing now.
Sam
Sure. Um, I went to college, I studied a bunch of science, and a lot of CS nine, dropped out and started a company, I ran that for a while, became an investor took over Y Combinator. And then, while at Y Combinator got interested in science startups helped start a handful of them, one of which is open AI, which is trying to do the science to discover how to make and then build superhuman general intelligence. And that I believe will be the most important project I ever worked on by far. And now I run that, but I’m taking a short refocus on startups to see if I can help fund startups working on profit.
Eric
I just want to personally say thank you for your leadership in this area, and for the resources and time and energy you’ve put into defining solutions. Like I said, I want to interview you first because your name has popped up just absolutely everywhere as I’ve done my own relief work, and just
Sam
that doesn’t mean I’m doing a good job. That just means I’m spraying and praying, but thank you.
Eric
Well, at least you’re doing something.
Sam
I’m writing a lot of checks. That part’s true.
Eric
Yeah, that part. I mean, I know a lot of people who could be doing that and who are doing a lot of talking or a lot of thinking about how to help. And I worry that by the time they actually get around to taking any action, you know, they’ve missed their opportunity to truly make a difference.
Sam
Honestly, it’s kind of like this, this normal. I am normally this like pretty disciplined, thoughtful investor and this cowboy approach of like, you know, what, if I lose a bunch and do one thing, that’s helpful, it’s worth it. So I’m just gonna come out swinging. It’s been pretty fun.
Eric
Yeah, so here’s two. Here’s two silver linings. Let me ask you one last question, which is, where do you think we go from here? What we need to do to see the real impact that is needed to get us out of here? How can we get out of this crisis,
Sam
we are going to get out of the specific one again, it will take longer than anyone will like the economic and human damage will be extraordinary and terrifying. But we will get out of it. Um, where we need to go from here is to invest now, so that this doesn’t happen again. Um, and, and I don’t yet know for sure what that looks like. But I do know that like, clearly the private sector, economics and incentives have not worked well enough for us to already developed rapid response, antivirals, whatever you want. And when you try something new, and I think that means some version of aggressive government funding to make sure this doesn’t happen again. And I and I sure hope and expect will have the will to do that now.
Eric
This has been Out of the Crisis. Out of the crisis is hosted by me Eric Ries, produced by LTSE’s Ben Ehrlich, and edited by Breakers’s Jacob Tender. Music composed and performed by Cody Martin. Out of the Crisis was created in partnership with breaker the best platform to create and listen to podcasts. For more information on ways you can help, visit help with covert Comm. I have several projects on there and feel free to message me that way. I’m also @ericries on Twitter and if anyone has ideas or is working on a project related to solutions, please do reach out to me. Thanks for listening.
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