蘑菇视频APP

Noubar Afeyan has dedicated his career to improving the human condition by systematically creating science-based innovations that are the foundations for startup companies. At 蘑菇视频APP, which he founded in 2000, Afeyan built an enterprise where entrepreneurially minded scientists ask, 鈥淲hat if?鈥� and iterate toward the answer 鈥淚t turns out 鈥︹�� in order to create first-in-category companies in health and sustainablity. Over two decades, Flagship has fostered the development of more than 100 scientific ventures resulting in $30 billion in aggregate value, thousands of patents and patent applications, and more than 50 drugs in clinical development.

Afeyan spoke to , a professor at Harvard Business School and the author of Creative Construction: The DNA of Sustained Innovation, at Flagship鈥檚 offices in December 2019.

Gary Pisano: What was your journey from the time you were young to starting Flagship?

Noubar Afeyan: I was born to an Armenian family living in Beirut, Lebanon, and in 1975 immigrated in a hurry to Canada, which graciously accepted my family as escapees from the civil war, giving us citizenship. I grew up in Canada, went to college there, and ended up coming to Boston to attend MIT. My interests at the time were in engineering, particularly chemical engineering. But the frontier of that field was focusing, for the first time, on biological engineering. So I did my PhD in one of the very first cohorts to be educated in this hybrid way between engineering and science.

In 1987, I ended up taking a big leap of faith and starting a company, which back then was not the traditional path. I grew and ran PerSeptive Biosystems for 10 years, five of them as a public company. It ended up becoming the largest instrumentation company on the protein side of the life sciences. I got involved in a number of other startups along the way in the 鈥�90s. That all led to the formation of Flagship some 20 years ago.

GP: Why Flagship? Why didn鈥檛 you just start other companies? Some folks start a company and then they start another, but you took a different route.

NA: PerSeptive Biosystems was an intense 10-year, postgraduate education in everything related to applying science, engineering, innovation, IP, and marketing to business. It was an intense learning process. One of the things I became drawn to was all the ways in which you could create value from breakthroughs. Because I had the good fortune of having a strong team of innovators inside a company of some 880 people, over 200 with advanced degrees, I became interested in doing entrepreneurship in parallel. I was running one company, and I started spinning out other companies and partnering to start new companies. I realized that becoming a co-founder is an interesting concept relative to a solo founder and that you could do more than one thing in parallel. The notion of parallel entrepreneurship made me ask: Can you do more this way than improvisational entrepreneurship? That led to the founding of Flagship.

In 1997, PerSeptive successfully merged with the DNA leader in the instrumentation space [Perkin Elmer/Applera, in a stock swap valued at $360 million]. A number of the other startups I was involved in co-founding had gone public, or had been sold. And on the heels of all that, I developed the basis of the belief that the only way to do this type of activity for a living was not serial entrepreneurship, which is the traditional notion, but a more disciplined professional process. I set out on a journey: Flagship is just the instantiation of figuring out whether, how, how well, with whom, one can do this.

In its initial formative stage, Flagship was called NewCoGen, which stood for 鈥渘ew company generation.鈥� Two years later, people had convinced me that it sounded like a disease of some sort, and I picked a different name. But new-co-gen was what we did. We wanted our products to be other companies, and that journey continues 20 years later with exactly the same notion, although we鈥檙e getting a little better at it and have scaled quite a bit.

It鈥檚 a completely different way to think about entrepreneurship, because the context within which startups operate historically, at least when I started, celebrated a romantic, chaotic, improvisational kind of culture. They tell majestic birthing stories, where eventually, if the company succeeds, the birthing process gets more and more glamorized. And the reality is it鈥檚 messy, unpredictable, fraught with risks and errors. And whether it can only be done that way instead of being a little more thoughtful, a little more planned and disciplined, and a little more consequential, seemed like appropriate questions to ask, especially having received a classical engineering education. It鈥檚 been an interesting battle to figure out what can and what cannot be operated in an institutional way when it comes to startups.

GP: What鈥檚 different about Flagship from a traditional venture capital firm? You do raise funds. But from what you鈥檙e describing, you鈥檙e not a venture capital firm at all.

NA: We鈥檙e not actually structured as a venture capital firm. Or put it this way: A venture capital firm is just a part of how we鈥檙e structured. It鈥檚 how we source capital: We raise funds and deploy them to finance our activities over a limited time frame. Instead, we are organized as a company where our deeply experienced leadership team manages all aspects of company creation and development in the same way that another business would manage the process of making medicines, or cars, or what have you.

So we centrally have operations that involve research and development, which we call origination; growth, which is like manufacturing; and finance, IP, legal, etc. But we operate organizationally as a company that happens to avail itself of venture financing. We don鈥檛 have a singlular consolidated balance sheet as would a conglomerate. We鈥檙e not operating off a permanent base of capital. We鈥檙e going through cycles of fundraising with each representing a new beginning. Part of the reason is historical: When we started, the only money available for this kind of portfolio came from the people who invested in other portfolios of companies, who invested in venture capital.

But more specifically, the way we鈥檙e different is the following: In traditional venture capital, everything that happens involves science that comes from academia or research institutions, hospitals, etc. If you bring in scientific breakthroughs that have already been made, hire appropriate people, and deploy capital, you can do a startup today in the life sciences. By the way, in each of those categories, there are multiple instances of each. So there are multiple sources of science in typical venture-capital funded startups, multiple people that get brought together, and multiple sources of capital. It鈥檚 all syndicated.

All those things must come together and coexist and operate harmoniously through thick and thin and create value: That is a successful startup. In my 32 years of starting companies, and a lot of it with venture capital, I鈥檝e come to the conclusion that the most remarkable thing is that this method actually works once in a while. The science may not work, or the products may not work; the organization is fraught with all sorts of conflicts and all sorts of misinformation. What Flagship set out to do, and what has evolved over the last decade at a much larger scale, is to combine the capacity to innovate, the people to lead the formation of companies, the people to grow companies, and the capital, all in a singular institution.

So Flagship is completely different from a capital provider in that we鈥檙e not providing capital to anybody. We are deploying our own capital around our own ideas and our own team to generate companies that we eventually spin out. There鈥檚 no notion of spin-out in the venture world. There鈥檚 no notion of having all the elements win together or lose together, as opposed to having completely different agendas. All of those things are absent. Of course, we have our own additional set of risks. But first and foremost, organizationally, Flagship is very much an innovation company, which accesses capital.

GP: You manufacture firms. That鈥檚 the way I鈥檝e come to understand it鈥攐r you manufacture new ventures.

NA: We produce new ventures. And in fact, the shares that we ultimately sell to others who co-invest with us are their options to the future value created by those companies. That鈥檚 the way we view it.

GP: You鈥檝e used the phrase 鈥渋nstitutionalized entrepreneurship鈥� to describe what you do. That鈥檚 interesting, because for some people that combination of words is an oxymoron.

NA: Since I have the opportunity, let me repeat what I usually say about entrepreneurship. First, it鈥檚 ironic that the English word鈥檚 root is a French word for undertaking, so the literal translation of 鈥渆ntrepreneur鈥� is an undertaker鈥攚hich is funny because usually entrepreneurs preside over things that don鈥檛 exactly go well. Secondly, and more seriously, I think the word is a misnomer in that the suffix 鈥�-ship鈥� in English means the state of being something, its condition. We talk about leadership, sportsmanship, friendship, or craftsmanship: These are all states of being something. Well, you know, I鈥檓 an engineer. I don鈥檛 do engineership; I do engineering. That ending鈥攅ntrepreneuring, if you will鈥攚ould be much more appropriate to how I think about the activities involved in creating companies, rather than just the state of being an entrepreneur.

By the way, this emphasis on being something is not much different from architecture or medicine before they became real professions. People used to think that people were born with a predisposition to be an architect or doctor, as opposed to learning, perfecting, improving the practice of architecture or medicine. When people say of entrepreneuring, 鈥淵eah, but you can鈥檛 create a Bill Gates,鈥� the answer is, that鈥檚 true. You also can鈥檛 create a phenomenal brain surgeon. That doesn鈥檛 mean that people can鈥檛 do brain surgery. People can learn how to do brain surgery, and the phenomenal ones will always be phenomenal. It鈥檚 a complete misunderstanding to think that the only way you can be a phenomenal brain surgeon is to have no preparation and wing it.

This sort of thinking bothered me in my 30s. And I decided to do something about it in my 40s, and now in my 50s I鈥檓 increasingly certain that entrepreneurship can be done institutionally. I wish the world would call it 鈥渆ntrepreneuring,鈥� but so far I can鈥檛 seem to change the language.

You can do entrepreneuring individually. A founder is just the conductor of a process: Founders pull together the orchestra; maybe they play an instrument or two themselves; but they cannot do it all on their own. The person who organizes the resources, sets the direction, and undertakes the most risk鈥攎ore than anything else鈥攊s the founder. But you could also think of those functions as the purpose of an organized team, occurring within a learning environment where entrepreneuring is done collectively and practiced repeatedly against metrics that increase what leverage can be brought to bear. Done individually, collective action, serial company creation, and measurement and leverage are a distraction at best. So by saying 鈥渋nstitutional entrepreneuring,鈥� I鈥檓 really comparing it to institutional investing.

When I was an entrepreneur for the first time, starting PerSeptive at 24 years old, I looked at venture capital firms and I was very envious. All of them seemed to know an incredible amount. They were all geniuses to me. They could look at their Rolodexes and contact 50 different CEOs and 10 different partner companies. And I thought, how could they know all this? By comparison, we entrepreneurs knew nothing. And the answer was, because venture capital firms are institutions. They have institutional memory. They have a set of people who invest in companies over and over again. People leave, and other people come. They think about the institutionalization of investment over the long term, particularly in the world of early-stage companies. I thought, why can鈥檛 one also do that with how innovations are made and how the companies are formed?

And of course I was told, 鈥淣o, no, no, no.鈥� And the reason was that investors wanted to build portfolios and the individual constituents of their portfolios had to be entrepreneurs that had no other activity. So the notion was, you can only diversify if the pieces in it are not diversified, so that every one of them was in this life-or-death struggle. And I thought, well, how is that fair for the entrepreneurs, the teams, and the science, that it has to be completely boxed in to one out of 20 bets per fund cycle? That was my initial thought, 20 years ago.

Gradually, what Flagship has begun to do by institutionalizing this act of innovating and entrepreneuring is to say, can鈥檛 all of it be part of portfolio formation? So that as an entrepreneur, if you鈥檙e more inventive or better at strategy, you can contribute to many company foundations and still be part of dedicated teams working as part of a single institution. That鈥檚 the experiment we鈥檙e running.

GP: The traditional model of venture capital as you鈥檝e described it creates all sorts of conflicts of interest. It creates what we economists call moral hazard. You鈥檝e got an entrepreneur who is completely undiversified in their career risk, whose financial risk is totally undiversified. But the venture capitalist has a diversified portfolio: They鈥檙e hedging their bets. That leads to some dysfunctional behavior, doesn鈥檛 it?

NA: It certainly creates a lack of trust and alignment. It鈥檚 hard to align when your end result is going to be different. Ironically, beyond the risk you run as an entrepreneur, you want the company to work and you鈥檙e supposed to be all in, and therefore you will do whatever you can with the information you鈥檝e got to survive. And it鈥檚 not clear that is necessarily the best position to put an entrepreneur or a team in if you want to make sure that they鈥檙e asking the right questions in the right sequence.

But an investor has no choice, because investors want entrepreneurs in that box. The reason, by the way, serial entrepreneurs tend to do better, from the data I鈥檝e seen, is that they learn the value of diversification, and their learning cycles help avoid getting completely pigeonholed into some arbitrary idea that they now have to take forward. This struggle between startups, science, the sources of science in academia, and venture capital is very clear to most people. But they think it鈥檚 all part of what it takes to succeed. Flagship is asking, is this the only way to do it?

GP: Describe Flagship鈥檚 process of company creation in detail.

NA: Maybe I should start by saying that a big part of what we do is highly iterative, fashioned after the idea of Darwinian evolution. We experiment with how we do what we do, all the time. It鈥檚 an integral part of the culture to question and to adjust鈥攕ometimes improve, sometimes not.

Over time, we decided that applying what we do, with the rigor with which we apply it, to a crowded space, to opportunities that everybody can see because they are adjacent to what is already being done, would not be the best place to situate ourselves鈥攅ven if we could more professionally conceive and create companies that have certain advantages over others. We decided a decade ago to move away from what is here and now in order to work on what others might view as distant, future-oriented projects. Our process is designed to work in that area code: on the kinds of things that people think five years from now might sound really reasonable but today have no connection to reality. We also reasoned that the notion that we would wing it, in such a way-out-there place, was reckless. So we said, either work on well-known spaces in an improvisational way; or, if we鈥檙e going to go out to completely unknown places, we should at least protect ourselves with a repeatable process. So we thought a lot about what could be repeatable. For where we aim to operate, it鈥檚 a form of protection.

We have a four-phase process. It starts out with what we call explorations. Explorations are conducted by small teams that generate what we call venture or value hypotheses. Explorations start out by wondering about a new space that might exist. We don鈥檛 have any reason to believe it does. We ask questions like, 鈥淲hat if this could be done?鈥� or 鈥淚f only that could be done, what would that mean?鈥� By asking those kinds of questions directionally, an exploration takes that initiative and instantiates it into a set of hypotheses. What is a venture hypothesis? It is a scientific or technological advance that has not yet been made but that we assume could be made. That results in an imagined product, sometimes a service, that does not yet exist, which can deliver value to a putative beneficiary that of course we鈥檙e also describing but who doesn鈥檛 yet know they could have this capability, let alone the need. And that allows us to describe a hypothetical future source of value. We don鈥檛 do one of these; we do several. Why? Because we want to make sure we don鈥檛 have the bias of our starting point. Once you start at one place, our fear is that you鈥檒l end up in proximity to that initial place. We want to sample a broad set of starting points within a particular zone that we鈥檙e after.

Next, we take these venture hypotheses and engage the current experts, nonexperts in academia, in startups, in the incumbent large companies, and we present to them our initially bad ideas. I say 鈥渂ad ideas鈥� because they鈥檙e uniformly bad鈥攂ecause how could they be good since they鈥檙e just a starting point? But then by engaging with people who know what there is to be known about a subject and can speculate a bit about the future, we get massive critical feedback. And in fact, that鈥檚 part of the scientific process of organized skepticism. We tap into a collective source of organized skepticism through a broad network of people. And what happens is they engage with these ideas and they tell us all the things that were wrong with them. Some of them are knockout blows. They tell us, here鈥檚 exactly why it can鈥檛 work. Maybe it violates some law of physics. Perhaps it鈥檚 already been done. There鈥檚 a set of things that will get thrown at us and our team. Then our teams iterate the hypotheses to overcome those problems if possible, or else say, okay, that鈥檚 a dead end鈥攍et鈥檚 move on to another one.

So what happens is that descendant versions of the original conception are constantly being created as we鈥檙e trying to overcome the objections that are coming to us, as best we can. We do some 50 to 100 of these types of Explorations per year, so that there鈥檚 a scale to this process. We鈥檙e not hoping that the one thing we鈥檙e working on produces a company. We鈥檙e actually quite ambivalent as to which company comes out of which starting point or which exploration. It鈥檚 very much a merit-based thing. But if a hypothesis, or a descendant of a descendant of a hypothesis that we started with in the beginning, becomes, as we present it to more and more people, something they cannot find fault with, then we go to the next phase.

GP: There鈥檚 no lab work at this stage?

NA: There鈥檚 no lab work yet. In fact, our firm belief is that there鈥檚 no point in showing that something can be done if you can鈥檛 first understand for whom it鈥檚 useful and to what extent. So we purposely do not look at current science or find applications for it. That鈥檚 what the rest of the world does; that鈥檚 what innovating within adjacencies is all about. And they鈥檙e good at it. By the way, some adjacencies can be far out. Others could be closer in. But the reason they鈥檙e adjacencies is that they鈥檙e grounded in the present. We鈥檙e trying not to operate in a way that鈥檚 grounded in the present. We鈥檙e trying to say, 鈥淥kay, what could exist?鈥� And then we want to work backward. That鈥檚 what the second phase is about.

What we call the prototyping phase is very much copied from the way industrial companies design a product: First you do research and development; then you put something together against some list of goals for the product. But then you must actually prototype it, and you see whether the thing works and you beat it up, and you show it to people and they beat it up. So experimentally prototyping the venture hypotheses is our second phase, and we call the result ProtoCos. We made up the word to describe not a company but a prototype of a company. It鈥檚 something that wants to become a company but isn鈥檛 yet a company. In that phase, it鈥檚 the founding team who worked on the exploration, plus maybe three or four people that have expertise in a particular scientific area. This team of maybe six or seven will engage in answering literally killer questions. We want to falsify our hypotheses experimentally.

Interestingly, this notion of experimentally verifying our hypotheses is the same idea as reduction to practice for an invention. In other words, underlying these things is an invention that is looking to be made by the experimental validation of a hypothesis. If we get that validation in the experimental phase, it typically takes nine months to 12 months of work. It usually costs us $1 million to $1.5 million to do that work鈥攚hich, by the way, very strictly confines the kind of things we can work on because they have to be things that are experimentally verifiable. With that as a limitation, we鈥檙e not going to work on laser fusion. We鈥檙e not going to work on space flight, because it鈥檒l take $100 million to verify anything.

We鈥檙e trying to figure out: Can we get some key killer experiments done? The ProtoCo phase will kill off a subset of the seemingly infallible descendant hypotheses that now are being really tested experimentally. Now, one might say, listening to this, 鈥淲ell, how do you know that the questions that were asked were the best questions and that you won鈥檛 find out later that it鈥檚 not going to work?鈥� We don鈥檛. But, boy, do we front-load the killer questions, because the culture here is such that people are incentivized to continually wonder whether this is the best thing for them to be working on. And we want them to be critical in that way. The best way to find out if it鈥檚 the best thing or not is to try to knock it out. So everybody鈥檚 incentives are to figure out what鈥檚 wrong with it, versus figure out how to convince the world not to ask the tough questions so that it can survive鈥攂ecause we鈥檙e kidding ourselves if we do that. There鈥檚 nobody else to kid. In the first two, three years, it鈥檚 just us working on the projects.

GP: What鈥檚 next?

NA: The third phase, what we call the NewCo, is what the world would consider a startup company. By this time, we鈥檝e spent a year or more on the idea. We start getting the larger team assembled. The exploration team continues to work on the project. One of our origination partners will lead the effort. We start bringing on board scientific leadership. We have a team internally that supports the operations of the company. So all aspects from talent to finance to everything else is done and owned centrally. It鈥檚 specifically not a service providing model. We do this so that the founding pioneering team can focus on science and products. NewCo phases usually last two years, plus or minus. Some 25-plus million dollars are spent on each NewCo, and it鈥檚 all financed internally through our own sources of capital.

At which point, if all goes well, the company is spun out with an externally sourced CEO, a board, a leadership team that now has quite a bit of velocity, quite a bit of early de-risking, and a clearer articulation of the products that derive from the original innovation. At this final stage, called GrowthCo, the process is focused on both execution and further pioneering, doing new innovations. Our GrowthCos represent a very different stage of a company than traditional startups when you have absolutely nothing and you鈥檙e trying to put the pieces together. These then are the four phases: Exploration, ProtoCo, NewCo, and GrowthCo.

GP: Can you give us an example of a company that went through this process?

NA: We do maybe six or seven of these a year. And so there are many that exist. They follow the same pattern. So I can pick from probably 60 of them that we could use. They have more in common than they have differences, because we really are operating against this model consistently. Our decision-making process going from an exploration to a ProtoCo and then a NewCo is a stage-gated process. This is ironic because everybody who works in large companies gets enslaved by stage-gate processes and thinks that when they go to startups they鈥檙e free to not follow any process. Here, that鈥檚 not the case, because we realize that winging-it is a difficult thing to scale up.

A good example that is now in the GrowthCo phase is the company called []. Rubius started out as an exploration in 2013, where we wondered whether we could render red blood cells into therapies, because red blood cells are the carriers of oxygen. Of course, we were aware at the time that people were playing with other kinds of cells鈥攆or instance, T cells and other immune cells. For a variety of reasons, we did an exploration, asking how we could think of red cells as a therapeutic. We looked pretty systematically. Could we ultrasonically shock things into red cells so they go inside the cells? Could we link things to their surface? Could we convert them into a therapeutic all inside the body? We looked at a whole lot of different ways of doing these things.

Among the ways that we hypothesized might work was not to work with red cells themselves but to work on their precursors. These are what鈥檚 called hematopoietic stem cells. We were aware of academic work funded by DARPA to produce red blood cells from hematopoietic stem cells. This seemed to be an artificial way to make more red blood cells. Of course, the quantity of red blood cells we would need in their more canonical use as oxygen carriers is gigantic, and that鈥檚 why it鈥檚 really never been a cost-effective approach. But we weren鈥檛 interested in that. What we were interested in, what we hypothesized, was: If you could start with a hematopoietic stem cell outside the body and convert that cell into a red blood cell鈥攚hich it had just begun to be shown was possible; no rigorous process, no scale, nothing鈥攚ell, what if we came in with a virus, early in the maturation of that cell into the red blood cell and had the virus now express a protein of interest, or more than one, that in the fullness of the making of the red blood cell would effectively be eliminated, leaving behind only the red cell and the protein or proteins that you want?

That was Rubius鈥檚 initial hypothesis. There was no scientific basis to believe that it could work. We talked to lots of experts who told us all the reasons why it wouldn鈥檛. In fact, there wasn鈥檛 much known about one of the key processes in making a red blood cell, which is called enucleation. There was also a big mystery about whether you could virally tranduce these cells. The answer to that turned out to be yes. With that as the resultant descendent hypothesis, we went into labs and said, 鈥淥kay, if you can do it, you should be able to go in with many different payloads and watch what happens experimentally.鈥� We tried some 50 payloads in this way.

Also, you want to convince yourself that you can make enough of the actual protein in any given cell for it to have a therapeutic effect. We reasoned that if you could have, say, 100 copies of a protein per cell and you need a million copies, then you need to give your patient 10,000 cells to get the same job done. I鈥檓 just making up numbers, but if you had 100,000 copies per cell, then one cell would do the job, let鈥檚 just say. By that logic, we wanted to see how much expression we could really get. Because that would dictate whether we need to give patients pints of blood or a milliliter of blood. And of course, a milliliter would be better for both safety and convenience, but also because of manufacturing, because we were going to have to manufacture that much more to get the same therapeutic effect. We had to convince a lot of people that a red cell could be a therapeutic. But we likened it to T cells, which by 2014 already had 15 startups. Long story short, we went from an exploration to a ProtoCo.

During the ProtoCo stage, we technically demonstrated both that you could actually make many different payloads and cells, at least in the first instance, and that you could make quite decent quantities of them. We had reason to believe we could improve it even thereafter. That became a NewCo initially under the leadership of Avak Kahvejian, who is one of our origination partners, and that grew to be some 17 people in the labs. Around this time, we attracted the former CEO of Novartis Pharmaceuticals, David Epstein, who joined Flagship as an executive partner to take on the executive chairman role at Rubius. And Torben Straight Nissen, who came out of Pfizer, joined as president. The two of them led the GrowthCo spin-out phase of the company, attracted quite a bit of capital, grew the team, and just a year and a half ago, we added as CEO , who was from Novartis and Amgen and had a long, distinguished background in both drug development and scientific medicine. The company is now just about to dose patients and has multiple programs developed only a few years after our initial notion that was based on no real experimental proof of concept.

GP: I wrote a Harvard Business School . When I teach the case, it always strikes me that the process sounds so easy. And yet there鈥檚 something here in terms of the behaviors that is absolutely critical to make this institutionalized process work. Talk about Flagship鈥檚 culture.

NA: There are several elements that come to mind. First of all, you know, we are living at a time when entrepreneurs are celebrities. People who work here are not celebrities, and they understand that what they鈥檙e doing is a responsible act. We鈥檙e taking other people鈥檚 money. We are causing people to leave their jobs and join projects we鈥檝e proposed. And there is a seriousness to that, you know.

Another element of our culture is that we accept that breakthroughs and things that are transformative emerge. They鈥檙e not designed or specified a priori. We have reconciled ourselves to the fact that we are managing an emergent process. I spoke earlier about Darwinian evolution. Darwinian evolution, simplistically, is variation, selection, and iterative cycles of descendancy or inheritance. It turns out we know about that in DNA and in nature. But you can look at the same phenomenon in ideas and products and all sorts of spaces and you see the same variation, selection, and iteration. It鈥檚 not what we鈥檙e brought up with in our schools. We don鈥檛 actually expose ourselves to problem-solving in this way. When we hire our associates for Flagship鈥檚 origination teams, we hire out of a graduate education program. We haven鈥檛 so far tried to rewire or retrain people to figure this out after they鈥檝e had a lot of experience, because what would have made them successful in the more traditional goal-based way of doing innovation would be lost at Flagship. So the culture at Flagship is one where you must subject your ideas to fierce criticism and not have that depress you.

Relatedly, to be able to articulate initial ideas that you know are kind of silly in order to arrive at serious-seeming ideas, is super difficult to behaviorally adjust to when you come out of a school where you鈥檙e the top in an area and you鈥檝e been rewarded for being right. And when you get here you have to say things that are almost certainly wrong or not known to be right all the time in order to discover the ones that are actually valuable. In the fullness of time, I think that transformation of people鈥檚 thinking can be achieved.

Those are all things that are based on rewards, based on just how we think about what matters. People talk a lot about celebrating failure, as if it were an ancient saying by a sage. But in our case, failure is, in an evolutionary sense, the discriminator that produces success. The reality is, failure is integral to what we do. It鈥檚 celebrated here because we know that if we fail more, we will eventually find some valuable things.

GP: What do you do as a leader to help shape this culture?

NA: One of the mindsets that I feel is important in general in entrepreneurship, but essential to the form of extreme entrepreneurship we practice at Flagship, is what I鈥檇 call a kind of paranoid optimism. If you鈥檙e only optimistic, which most people who do entrepreneuring are, you will do things that have no checks and balances. If you鈥檙e only paranoid, you鈥檙e generally depressed because you don鈥檛 think anything is going to work. Being willing to toggle between them is an important capability. Well, I embody that because I鈥檓 never taking what we鈥檙e saying for granted or to be the truth. I have a belief that if we can figure out how to do this institutionally and we can let the values that matter emerge out of doing them, we can find people who can embody those values.