Dmitry Kulish, Skoltech - on the “unicorns” of the COVIDTech era and technologies

Dmitry Kulish— Professor at the Skoltech Center for Innovation and Entrepreneurship - Skolkovo Institute

science and technology, integral partSkolkovo infrastructure. Kulish deals with strategic, organizational and technological issues in the Russian and global pharmaceutical and biotechnology industries, as well as innovation in general.

Any scientific discovery breeds innovation

Science is the production of knowledge.And knowledge is an algorithm or equation:twice two is four, a green apple is sour, and a red apple is sweet. These algorithms are obtained from experiments: when we took a closed system, fixed all the parameters in it except one, for example, the color of an apple, and then we measure sweet-sour, sour-sweet, look at the correlation and derive a mathematical relationship.

Innovation is the application of scientific results for the benefit of people or society.But the catch is that once we start decidingreal problems, our system becomes out of control. All parameters begin to creep in different directions. If yesterday a green apple was guaranteed to be sour, then it turns out that some talented breeder made a sweet green apple, and our algorithms went headlong. And at some point, you realize that you need to move away from algorithmic thinking to methodical.

Science produces reproducible results—algorithms.But in an uncontrolled system there are no reproducibleresults, but there are only methodologies. If I take an apple, let go of it and throw it down, then since the time of Professor Newton we know that the apple will fall vertically and fly with acceleration g. Now imagine that we take and throw a squirrel: a lot of options are possible. It may cling on and not fly, or it may turn out to be a flying squirrel and fly horizontally, or it may fall vertically and start digging a hole. It is not clear how to algorithmize this. We can try to describe this squirrel in advance, but what if we have a task: to catch squirrels and release them, but we don’t have time to understand whether it is a flying squirrel or not. Then a methodology arises: first you make sure whether it has flown down or is hanging on your hand, then you look to see whether the squirrel has fallen down or flown to the side. And this methodology is gradually being built and allows us to introduce at least some structure into what previously seemed unstructured.

Any scientific discovery sooner or later gives rise to innovation, but often this "sooner or later" turns out to be a very long period of time.This phrase reflects all the instability and dualismthe situation in which the Center for Innovation and Entrepreneurship is located. On the one hand, we have no doubt that science and technology are at the core of everything. Sustainable innovation is science, technology and, as a rule, a patent. We believe in all this, but when we understand that this story of releasing the squirrel can drag on for many years, we realize that we need to help either scientists or the people who broadcast their science. Innovation needs to be helped somehow. It should also be recognized that those who make a discovery and those who turn it into a commercial product are usually different people.

Innovation theories: from corporations to the consumer

The topic of innovation has been around for over 100 years, although for a long time I believed that the word “innovation” appeared in the 90s of the last century in the wake of the development of Silicon Valley.But it turned out that innovation was inventedAustrian philosopher Schumpeter, who was the main enemy of Karl Marx. After Schumpeter there were Drucker, Porter and someone else. But somewhere towards the end of the twentieth century, a clear image of innovation emerged, based on generally understandable definitions. Definition number one: innovation is so risky that only large corporations can do it. Most people, recalling the name of Clayton Christensen (author of the book “The Innovator’s Dilemma”, professor at Harvard - “High-Tech”), say with a breath that “there is such a book about how to make breakthrough innovations.” Accordingly, I report, Professor Christensen did not know how to make breakthrough innovations. He spent 10 years studying a variety of fast-growing companies and learned two things: some corporate innovations work as Grandfather Schumpeter and Grandfather Drucker prescribed, and some don’t. The meaning of breakthrough innovation according to Christensen is that you need to find a consumer who actively consumes an existing product, but he lacks some important thing, and if he is offered a product, even worse in quality and more expensive, but with this thing, then he takes it. And large corporations, seeing that the product has lower quality and higher price, think: “No, this is not our competitor,” and do not pay attention to it. After 50 years of the “let's hire three strong scientists, they'll make the technology, and we'll shove it down the consumer's throat for him to eat” model, Christensen was the first to say, “No, that's not going to work.” The irony is that when Christensen was consulting on the Intel watch project - a wristwatch with the Intel brand - and this project failed miserably, he walked around genuinely sad and said: “Well, I tried.” It was such a classic disruptive innovation, which for some reason did not work. Now, 20 years later, we realize that Christensen was right. The fact that Samsung Watch and Apple Watch now rule the world is an echo of his wisdom 25 years ago.

10 years after Christensen, MIT published super-classic articles by Eric von Hippel, where it is said that consumers buy not what they are forced to do, but what they have already imitated themselves.When a corporation just does whatIt’s already clear to the consumer, then he buys it. From von Hippel's point of view, this was real science. He proved his assertion that consumers buy only what they understand in advance and have come up with for themselves. Therefore, the best way to innovate is not to invent anything ourselves, but to learn from people what they have already invented for themselves. From this revolutionary theory, the now very fashionable topic of customer-oriented innovation and client-driven innovation has grown.

The California school, represented by Steve Blank, says that one cannot do without technology and science, but one must also ask the consumer.This is the middle position between von Hippel andcorporate innovation. From this statement follows the methodology that is actually taught at MIT, Berkeley and Skoltech. It stands on three legs: problems, prototype and agile or, as they say now, PRIZE - “plan, implement, measure, sharpen”.

"Everyone loves the word 'unicorns' because 'unicorns' are a billion dollars."

Building a prototype is not that difficult when you know the problem.Moreover, agile thinking says thatThe first prototype should be extremely simple and will fall apart after two uses, but it's enough to start a conversation with the consumer. Understanding the problem and formulating it correctly is the greatest difficulty of innovation methodology. When a scientist says: “Look, I made an invention, now tell me why you need it.” But they can’t tell him because: a) they themselves don’t understand well what they want, b) they poorly formulate scientific topics.

Everyone loves the word "unicorns" because "unicorns" are a billion dollars.Unicorn is not an exchange company thatalready now more than a billion, and, therefore, when she agrees to either sell or enter the market, then everyone associated with her will get rich. There are many examples: everyone's favorite Uber and AirBnB, WeWork, SpaceX, Epic. And at first everyone thinks that "unicorns" are loved for money and power. Money is understandable, because a billion, and power - because if you have made a "unicorn" and are the leader of the “unicorn”, you, on the one hand, do not obey anyone, but on the other hand, you are great.

The main charm of "unicorns" is that they are universal killers of monopolies.At the same time, monopolies are our friends and relatives whowork for multinational corporations, receive large salaries and are proud of the fact that they bring us a lot of benefit. Therefore, they cannot be torpedoed so easily; the government always has a problem of how to neutralize monopolies, because they pay huge taxes, wear ties and generally look like wonderful people, but at the same time they are monopolies. And the “unicorn”, which, without selling to anyone, grows to a billion dollars, it, in fact, torpedoes monopolies. Because they are trying to buy it when it is still worth $10 million, and the “unicorn” is not for sale, and that is its beauty. That is, the “unicorn” creates the very macro-movement in the economy that all governments and thinking people need.

The second joy of unicorns is the creation of revolutionary economic models.This is a speculative topic, but the sharing economyconsumption, all kinds of Ubers, the destruction of greedy distributors, who are the second evil of the economy. The best example is AirBnB, which broke through the wall between the consumer and the hotel mafia. But unicorns have one big problem. All people sitting in the market understand why they arose - they arose because after the explosion of the “bubble” in 2002, the Sarbanes-Oxley law appeared, which made it very difficult and tough for startups to go public. And financiers realized that it is now more profitable and easier to grow companies to enormous sizes than to take them to IPO, as they did before. Therefore, most economists note that most “unicorns” are the same monopolies, only from the side. They turn bronze in the same way and begin to slow down.

The first sign of a unicorn is always a network of multidisciplinary solutions, and it doesn't grow on a single solution.Let me remind you of two interesting facts that are notI stop admiring it. Many people think that Apple is an iPhone company. But the profit from the App Store 10 years ago was greater than the profit from iPhones, and now it is still comparable to them. In fact, Apple is a digital content distribution company, and it does this distribution using extremely monopolistic, dirty and indecent methods. Second example: when Tesla users talk about their driving experience, they don’t talk about “saving birds and trees,” but they say: “There’s such a touchpad, it’s so cool to point your finger, and everything goes the other way.” Tesla is not only an electric car company, it is a new user interface company.

The second sign: to become a “unicorn”, you need three different groups of people with three different “pains” into one group that will solve all the problems at once.That is, if we want to sell a Tesla car, we gather on the one hand those who are concerned about global warming, and on the other hand those who are concerned about a beautiful touchpad, and we become a “unicorn”.

The third sign: “unicorns” always appear at the turn of the epoch, when something fundamentally new arises.As a rule, this is a fundamentally new technology. It seems to many that the same occurrence, for example, Uber was not associated with any breakthrough technology,everything existed before them. But if you look closely, it is always associated with a technological breakthrough. Often this breakthrough is not visible, for example, at Skoltech, a lot is happening in solar panels. But, as you know, the solar-powered business has been pretty heavy, if not tragic, over the past 10 years. Many went bankrupt, something didn't work out. And exactly a year ago, many companies raised the efficiency of integrated solar panels from 25% to 50% and now a big breakthrough is expected. Accordingly, in three years, a "unicorn" in solar panels may appear, and I believe that it will arise.

Nobody measured the lifespan of a "unicorn", because the definition itself is vague, and measuring the lifespan of a vague definition is a thankless task, especially from a scientific point of view.But experience shows that those companies thatThey formed their business model and implemented it at a high level; they have been holding the bar for quite a long time. All the companies that we have listed have already been successful for more than five years. In this sense, I believe that if"unicorn "has developed, then it is for a long time.On the other hand, there is a well-known fact: that if you take the list of the top 20 largest companies 20 years ago and today, it is almost not similar, and if you take 40 years ago, you are generally surprised - that there are Martians, or something, walking around the market ?

One-day technologies and pandemic as a factor of pain

It would be nice if technology became ephemeral.Economically, this is destructionmonopoly and increased turnover of assets and funds. But I think that there are many examples when a whole industry exists on very old technologies. But in some industries there really is a change in technology every day, and you need to understand that in fact, a frequent change of technology is a very profitable business strategy, described in many famous business books.

The most famous book with a beautiful title"Only paranoids survive" about Intel. And it says that when Intel realized that they could quickly increase the capacity of their chips, they set a step to increase it a year. Many people say that this is a bad decision - a brakeinnovation. But this created a systematic growth of the innovative economy for many years to come. I think it was a good decision. And in this sense, these are not exactly one-day trips, these are well-planned multi-day moves.

What problems does the pandemic bring?It all starts with the fact that we are afraid of getting infected,and, of course, we can do this through social and professional contacts. And if we sit in self-isolation, most likely we won’t get infected. If we do become infected, we can either get a mild course of the disease or a severe one, and this can cause serious damage to our health. If we have a severe case, we occupy an intensive care bed for 10 days. ICU overload is a much bigger problem than increased mortality. If we have a mild course of the disease, this does not bother us; we are worried about self-isolation, which, no matter how funny it sounds, no one is afraid of. Everyone is only afraid that they will lose their job.

My students and I conducted in-depth surveys of people, where we built two verticals - what is causing you the most pain associated with the pandemic, and what are you afraid/what are you not afraid of.Almost no one is afraid of self-isolation, and even thosethose who are afraid do not do it very much at all. Very few people are afraid of damage to their health. But they are scared to death of him. And again, I already see that people in the audience doubt - you have the right to doubt. 60% of respondents are not afraid of an economic downturn.

Blockchain as a solution to covid problems was found in only one case. Ordinary people agreed that if the infectionwill increase, then entering a room in which several dozen wonderful spectators are sitting will be life-threatening. And a person will come in if there is a screen with information that, according to blockchain records, the immune status of all people in this room is safe. But if it’s just a beautiful piece of paper, there are no guarantees: maybe someone probably bought this piece of paper from the Slavyansky Boulevard metro station.

For people during a pandemic, the main problem is to ensure increased productivity and good communication in a social contract that is protected from infection.We did honest experiments, we have everythingdigitized, specific people answered these questions. Is this guaranteed to work in all populations? Of course not. Because we had a limited sample, 250 people participated in all this. That is, compared to seven billion, this is a very small sample.

Making an important medicine does not mean becoming a “unicorn.”One of the Skolkovo companies - PharmaDiol -makes a patented domestic innovative anticoagulant. They already have an excellent preclinical and first phase, but the only problem is that in pharmaceuticals, anticoagulants are a very tough field, in which two molecules of the great companies Bayer and AstraZeneca - rivaroxaban and dabigatran - are in charge. These molecules solved all problems before COVID-19. In a year they become generics, they will be sold at the price of water, and therefore, when our investor from Skolkovo supported the PharmaDiol company, he asked the question “Where are we going?” — and we couldn’t answer, but proudly reported that anticoagulants are cool. And then it turns out that people with COVID-19 die from blood clots. And in the whole world there is one patented anticoagulant, which, in terms of its economic indicators, is worthy of a clinic in COVID-19. Now the PharmaDiol company is entering the clinic for the treatment of thrombotic complications of COVID-19. If in six months the drug receives approval from the Ministry of Health of the Russian Federation, then PharmaDiol will become the world's first innovative patented anticoagulant that has honestly passed clinical trials in the treatment of COVID-19. But neither PharmaDiol nor Skinport (manufacturer of nanoneedles - Hi-Tech) will become “unicorns” because they are not a cross-functional multi-platform solution. In two years we will sell “PIK-PHARMA”, we will get rich, but no one will ever know these words again, there will be no “unicorn” “Skinport”. There will be another product of the great AstraZeneca, which we will be proud of together. Is it good or bad? You well. What I mean is that a “unicorn” is not necessarily the best thing that can happen to you.

You can get a “unicorn” if you combine technologies.For example, there is another case -mass spectrometric diagnostics of COVID-19 by Professor Evgeniy Nikolaev. It is instant and has huge throughput. You can let a company of soldiers through. Skoltech also has a wearable health monitor that can be worn on a miner. Despite the fact that there are many wearable devices in the world, they cannot be put on a miner, because the miner works all the time, sweats, and bends down, but this gadget can. The invention of Professor Mikhail Belyaev - he made an artificial intelligence system for diagnosing pulmonary pathologies for COVID-19. Before that, of course, he had pathologies, tuberculosis and lung cancer, and now he also had COVID-19. A “unicorn” will be created if we combine these three technologies: we take a miner, put an ICUbit monitor on him, take a signal from him, if something is wrong, then at the exit from the mine a mass spectrum and computer diagnostics of the lungs await him.

Nobody knows who will be the "unicorn" in the post-view time.For two reasons.First, because the system is moving all the time, the parameters are changing all the time and there is nothing constant except change. Secondly, if someone knew that he would be a “unicorn”, then now they would buy him and he would cease to be a “unicorn”. Skoltech believes that a “unicorn” after the pandemic will be a company that solves the problems that we have dug up in our scheme - this is the problem of pleasant, effective professional communication in situations with the danger of social infection. First of all, this is a big topic of hotelling. I sincerely believe that the post-Covid “unicorn” will be a company that will provide something like hotelling - it will be a workplace management system, most likely with other people’s offices. Medical diagnostic tools will be attached to this system. In parallel, of course, people will be provided with the tools for comfortable remote work. He will not only work with someone there, but also go on those same Zooms. And in zooms, a big topic is virtual augmented reality and all types of online education, coaching, and, of course, COVIDTech will reign over all this.

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