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Techpreneurship: George Rathmann – Biotech Pioneer
Jeff Amerine
Techpreneurship, with Jeff Amerine
(Jeff Amerine is an IA advisor and officer with the University of Arkansas Technology Licensing Office. Each Thursday, his Techpreneurship blog will appear in INOV8. Drop him a line in comments.)
How many of you have ever heard of George Rathmann? I have to admit prior to just recently, I hadn’t. Well, it turns out George Rathmann is often referred to as the “Bill Gates” of biotech…
Back in 1980, George was one of founders and first CEO of Applied Molecular Genetics, now known as Amgen.
Amgen is now the largest independent biotech firm with a $56 billion market cap, $15 billion in annual revenue, and 17,000 employees. Check out its profile at www.amgen.com.
In 1980, George and a few other intrepid techpreneurs and research scientists jumped out of their corporate jobs and academic positions to create a new kind of company…Well, George really did more than create a new kind of company, he created a brand new industry — biotech.
At that time there was no such thing as biotech. 1980 was also a time very similar to 2009. High unemployment, weak economy, significant international strife — these were all attributes of 1980. Per the conventional wisdom, not exactly the best time to leave gainful employment to start a new company, much less create an industry.
Much like most hard-headed techpreneurs, George Rathmann did it anyway. Somehow Rathmann, sometimes called “Golden Throat” for his ability to sell investors on the Amgen story, was able to gather sufficient venture capital to get Amgen rolling. In 1983, they went public with a successful $42 million IPO.
Early investors included legendary characters like Pitch Johnson from The Asset Management Company, one of the first VCs in Silicon Valley.
Pitch is another story for another time…
What is probably the most amusing part of Amgen’s early capitalization efforts was the part beer played in the process. I know what your thinking. Beer, cold pizza, and Mountain Dew play a part in every startup, right? Well, for Amgen, it was a bit different.
You see, one of the major early strategic partners was none other than the Kirin Brewing Company from Japan. At this point, you’re probably saying, what the heck would a Japanese brewing company need from a biotech firm?
It turns out, Amgen’s work in microbiology and fermentation to cook up the “bugs” they needed to create great medicine also had great uses in improving the fermentation processes Kirin needed to make great beer! Current Amgen CEO Kevin Sharer has been quoted as saying “we could see our last dollar prior to closing the deal with Kirin.”
So what’s a techpreneur of 2009 to learn from George Rathmann? Here are my thoughts.
Some of the best companies and industries come out of the worst of times……
And you never know when beer might save the day!
For more on Rathmann, check out this link from Newsweek….http://www.businessweek.com/magazine/content/05_38/b3951047.htm
Let me know what you think, and please share your stories about how beer saved the day for your venture…
Tim
Thanks for sharing this story. We definitely need to learn from and build on the successes, adventures, and misadventures of the past. The more Arkansans gets engaged and talk about the strange twists and turns startups can take, the better chance we all have of really building something enduring. And if the stories involve stale pizza, cold beer, Mountain Dew and little sleep – well all the better!
Thanks for sharing your wisdom and experience!
Jeff
As you brought up beer, it reminded me of a different story that I heard a partner from Sequoia Capital tell about the first time they met with the founders of Yahoo. It was a one platform combination office in the lower rent district of Silicon Valley and when one walked in, you saw some computer equipment, a little furniture and a lot of pizza boxes from dine in meals of previous days. One could here each time this new thing, a website, got a hit; the computer would make a noise. As they returned to Yahoo for follow on meetings, they could here the increasing # of hits that this “new thing,” a website was recieving. On the day of this conversation, it was two years after Sequoia made its first investment and the market value of their investment on this day was in excess of $1 billion. And while the stock market for dotcoms went down, Yahoo held up pretty well and provided some handsome returns to the early investors. Beer was not involved, but pizza certainly was the fuel of choice for the founders of Yahoo during this fledgling yet high growth period. We can never underestimate the potential of technology entrepreeneurs. All the while, technology entrepreneurs will have to go to school on the free markets and how to commercialize their product like one pursues a ph.D. and more. Thanks, Jeff, for all you & IA do to advance Tech Enterprises!