When web browser pioneer and venture capitalist Marc Andreessen wrote its 2011 editorial prediction that software was about to ‘eat the world’, he prefaced it by referring to leading pivots from hardware to software and vice versa.
At the time, he also noted that tech companies were undervalued in public markets, while at various times over the past two years the opposite could be argued, due to the hyper-emphasis being placed on it. on the digitization caused by the pandemic and the speculative bubbles. Today, the price / earnings ratio of the technology sector seems to be coming down.
In 2011, the crude but indelible metaphor of Andreessen devouring the world was intended to convey the following thesis: “Software companies are ready to take control of large swathes of the economy”.
After the spectacular growth of the digital economy over the ensuing period, a DSI dive big title provided a seal of validation: “10 years later, software has really eaten the world. ” A Forbes item offered the “yes, and…” that “services eat software,” by layering large-scale cloud-based offerings on top of digital infrastructure. (Fortunately, these setups could be more energy efficient than you expected.)
As biotechnology harnesses cellular and biomolecular processes to develop technologies and products beneficial to society, with a potential market size of US $ 2.44 trillion by 2028, the venture capital firm of Marc Andreessen a16z pose now that “biology is eating the world”. They also noted that software “ate” health care relatively late.
So what exactly happened and what’s next?
Health care presents a high degree of complexity and international market differences, especially with regard to funding mechanisms. Digital health is not yet completely standardized or ethically clear. Unlike other, simpler economic fields, technological implementations must be viewed through the prism of multiple stakeholders.
Andreessen observed that pure software companies are now entering historic markets such as healthcare and insurance, and historically when this has happened, incumbents scramble to digitize their options, often without appreciating operational approaches. and radically different cultures that are required of them.
He drew an analogy with the media industry, which was an obvious and early front for digitization. In the case of the recording industry, consumer demand for digital music was overwhelming, but suppliers refused to meet it, possibly due to their involvement in pricing.
Andreessen pointed out that when one layer in one industry effectively commoditizes, the next layer can become incredibly valuable. “You can easily speculate that the same is happening in health care,” he explained. “For example, if more real health products and services could be commoditized and, over time, you could break cost curves and in fact shrink it, maybe concierge medicine would explode.
Andreessen’s thesis is that anything that can become a software product will end up undergoing this transformation, no matter how complex or institutional resistance. Even biology is, from the business point of view of his business, moving “from an empirical science to an engineering discipline.”
The future of biotechnology
Biotechnology has certainly come a long way. The 2007-2008 financial crisis hit the biotech sector during a critical period of market development, but it recovered and contributed significantly to employment growth.
Well-known tools like CRISPR-Cas9 (for genome editing) are an important part of continuing progress. Scientists are even exploring DNA-based data storage systems.
As this is the case with wearable health-promoting technologies, we can expect to see new form factors driving the market growth. For example, compressing bioengineering and engineering technologies for mobile compatibility can aid deployment in the field, both by reducing inequalities in healthcare and expanding markets.
As I wrote before here, AI has already improved operational visibility in healthcare, measurably improving process compliance in areas where the problem is not systemic. And it could be the discovery that generates countless future discoveries.
All of this gives investors and innovators good reasons to anticipate major and transformational biotech growth.
However, Andreessen’s company does not shy away from the main differences between software and biotechnology. They were even hesitant to use the term “biotech fund” because they knew that the cycles of hype passed around biotech had given it a deterrent connotation.
In Silicon Valley, the field is sometimes seen as “expensive, time-consuming, and heavily regulated work compared to what happens with software,” which typically grows faster due to inherent accelerators such as Moore’s Law. and network effects.
Ultimately, the venture capitalist chose to emphasize the distinction between the empirical, time-consuming, and unpredictable aspects of scientific discovery and the incremental and computational engineering of biotech startups, which makes it easier to test. product / market suitability.
For example, the rapid acceleration of genomic sequencing illustrates more engineering than science. It even exceeds well-established, stable but increasingly expensive semiconductor advances.
General Partner Jorge Conde observed, “When engineering, biology and computer science come together, it elevates bio to a ‘read / write’ paradigm. That is, you don’t just read the code of biology, but you can also write, or design, with it.
He added: “If you think of DNA as the genetic ‘source code’ and ‘cell programs’ as the set of genes expressed in different types of cells, then epigenomics focuses on how the levels of specific genes are controlled in these different types of cells. – roughly, the specific parts of the source code on which a particular cell is based.
The size of the epigenetics market is expected to reach $ 22.05 billion by 2025, driven by profound applications such as cancer therapy.
Conde said understanding these biological programs can unravel the mysteries of normal cell development as well as disease development.
He explained, “This code is not necessarily corrupted; it may simply be that the cellular program has been altered for a number of reasons.
With all the well-known dangers of overzealous technological predictions or overconfident cultural resistance, there is perhaps an element of wisdom retained in the venture capital firm’s assessment of likely deadlines: ‘Organic Today’ hui is where information technology was 50 years ago. “