Category: Entrepreneurship

Complexity of Drug Discovery Requires More Than A.I.

(p. B1) Every two years, hundreds of scientists enter a global competition. Tackling a biological puzzle they call “the protein folding problem,” they try to predict the three-dimensional shape of proteins in the human body.

. . .

Mohammed AlQuraishi, a biologist who has dedicated his career to this kind of research, flew in early December to Cancun, Mexico, where academics were gathering to discuss the results of the latest contest. As he checked into his hotel, a five-star resort on the Caribbean, he was consumed by melancholy.

The contest, the Critical Assessment of Structure Prediction, was not won by academics. It was won by DeepMind, the artificial intelligence lab owned by Google’s parent company.

. . .

“It is not that machines are going to replace chemists,” said Derek Lowe, a longtime drug discovery researcher and the author of In the Pipeline, a widely read blog dedicated to drug discovery. “It’s that the chemists who use machines will replace those that don’t.”

. . .

(p. 5) Working with two other computer scientists, the DeepMind researcher Rich Evans homed in on protein folding. They found a game that simulated this scientific task. They built a system that learned to play the game on its own, and the results were promising enough for DeepMind to greenlight a full-time research project.

The protein folding problem asks a straightforward question: Can you predict the physical structure of a protein — its shape in three dimensions?

If scientists can predict a protein’s shape, they can better determine how other molecules will “bind” to it — attach to it, physically — and that is one way drugs are developed. A drug binds to particular proteins in your body and changes their behavior.

In the latest contest, DeepMind made these predictions using “neural networks,” complex mathematical systems that can learn tasks by analyzing vast amounts of data. By analyzing thousands of proteins, a neural network can learn to predict the shape of others.

. . .

Mr. Hassabis said DeepMind was committed to solving the protein folding problem. But many experts said that even if it was solved, more work was needed before doctors and patients benefited in any practical way.

“This is a first step,” said David Baker, the director of the Institute for Protein Design at the University of Washington. “There are so many other steps still to go.”

As they work to better understand the proteins in the body, for instance, scientists must also create new proteins that can serve as drug candidates. Dr. Baker now believes that creating proteins is more important to drug discovery than the “folding” methods being explored, and this task, he said, is not as well suited to DeepMind-style A.I.

DeepMind researchers focus on games and contests because they can show a clear improvement in artificial intelligence. But it is not clear how that approach translates to many tasks.

“Because of the complexity of drug discovery, we need a wide variety of tools,” Dr. Alvarez said. “There is no one-size-fits-all answer.”

For the full story, see:

Cade Metz. “Making New Medicines With a Spoonful of A.I.” The New York Times (Wednesday, Feb. 6, 2019): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story has the date Feb. 5, 2019, and has the title “Making New Drugs With a Dose of Artificial Intelligence.”)

“When the Forts of Folly Fall”

When I read the poem below I smiled. Part of me found it inspiring and part of me found it foolish. But I smiled.

(p. A11) . . . from the final stanza of Matthew Arnold’s poem “The Last Word”: “Charge once more, then, and be dumb! / Let the victors, when they come, / When the forts of folly fall, / Find thy body by the wall.”

For the full commentary, see:

Abigail Shrier, interviewer. “THE WEEKEND INTERVIEW; Standing Against Psychiatry’s Crazes.” The Wall Street Journal (Saturday, May 4, 2019): A11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 3, 2019.)

Permissionless Surgical Innovation

(p. 15) When a patient’s heart gave out on the cardiac surgeon Denton Cooley’s operating table in 1969, he refused to let the man go gently into that good night. Instead, he dispatched an associate to find a sheep and pluck out its heart. Cooley sewed it into his patient’s chest. This was apparently the kind of thing you could do — without asking anyone’s permission — in the 1960s.

The patient died (of course) but Cooley pressed on. A year later, he tried another experimental procedure — an artificial heart developed and some would say stolen from his rival at Baylor University in Houston. He never asked the university’s permission because, well, that would have required going through a committee run by said rival. “We administered to Baylor University the biggest enema,” Cooley reportedly told a colleague after the surgery. “It will be remembered in years to come.”

And this, readers, is how the first artificial heart came to be implanted in a patient. (The man survived three days with the device, before receiving a transplant from a donor and dying the following day.) Such are the brazen feats that Mimi Swartz chronicles in her book “Ticker,” a brief history of the artificial heart. Swartz is an executive editor of Texas Monthly, and she is based in Houston, home to four medical schools and much of the last century’s pioneering heart research. These are physicians who have a lot more in common, she writes, “with the people who crossed Everest’s Khumbu Icefall or took the first steps on the moon.”

For the full review, see:

Sarah Zhang. “The Tin Man’s Dilemma.” The New York Times Book Review (Sunday, Sept. 22, 2018): 15.

(Note: the online version of the review has the date Sept. 17, 2018, and has the title “The Quest to Create and Perfect an Artificial Heart.”)

The book under review, is:

Swartz, Mimi. Ticker: The Quest to Create an Artificial Heart. New York: Crown, 2018.

“Confidence Stops You from Learning”

(p. A15) Mr. Karlgaard, a former publisher of Forbes magazine, has plenty of vivid anecdotes to make his case for late bloomers.

. . .

Bill Walsh, the great coach of the San Francisco 49ers, got his first NFL head coaching job when he was 46 and won his first Super Bowl at 50. He was famously twitchy, self-deprecating and eager to learn, and had this to say about confidence: “In my whole career I’ve been passing men with greater bravado and confidence. Confidence gets you off to a fast start. Confidence gets you that first job and maybe the next two promotions. But confidence stops you from learning. Confidence becomes a caricature after a while. I can’t tell you how many confident blowhards I’ve seen in my coaching career who never got better after the age of forty.”

Late bloomers, Mr. Karlgaard argues, are not just people of great talent who develop later in their lives. They also possess qualities that can only be acquired through time and experience. They tend to be more curious, compassionate, resilient and wise than younger people of equal talent. This may be true, Mr. Karlgaard notes, of older people generally, who are being flushed out of the workforce much too early.

For the full review, see:

Philip Delves Broughton. “THE WEEKEND INTERVIEW; Standing Against Psychiatry’s Crazes.” The Wall Street Journal (Tuesday, April 30, 2019): A15.

(Note: ellipsis added.)

(Note: the online version of the review has the date April 29, 2019, and has the title “BOOKSHELF; ‘Late Bloomers’ Review: Please Don’t Rush Me.”)

The book under review, is:

Karlgaard, Rich. Late Bloomers: The Power of Patience in a World Obsessed with Early Achievement. New York: Currency, 2019.

IPO of Vanguard Achieved Only 5% of Goal

(p. A15) The First Index Investment Trust, which tracks the returns of the S&P 500 and is now known as the Vanguard 500 Index Fund, was founded on December 31, 1975. It was the first “product,” as it were, of a new mutual fund manager, The Vanguard Group, the company I had founded only one year earlier.
The fund’s August 1976 initial public offering may have been the worst underwriting in Wall Street history. Despite the leadership of the Street’s four largest retail brokers, the IPO fell far short of its original $250 million target. The initial assets of 500 Index Fund totaled but $11.3 million–falling a mere 95% short of its goal.
The fund’s struggle for the attention (and dollars) of investors was epic. Known as “Bogle’s folly,” the fund’s novel strategy of simply tracking a broad market index was almost totally rejected by Wall Street. The head of Fidelity, then by far the fund industry’s largest firm, put the kiss of death on his tiny rival: “I can’t believe that the great mass of investors are [sic] going to be satisfied with just receiving average returns. The name of the game is to be the best.”
(p. B4) Almost a decade passed before a second S&P 500 index fund was formed, by Wells Fargo in 1984. During that period, Vanguard’s index fund attracted cash inflow averaging only $16 million per year.
Now let’s advance the clock to 2018. What a difference 42 years makes! Equity index fund assets now total some $4.6 trillion, while total index fund assets have surpassed $6 trillion. Of this total, about 70% is invested in broad market index funds modeled on the original Vanguard fund.

For the full commentary, see:
John C. Bogle. “The Father of the Index Fund Sees a Reckoning Ahead.” The Wall Street Journal (Saturday, Dec. 1, 2018): B1 & B4.
(Note: the online version of the review has the date Nov. 29, 2018, and has the title “Bogle Sounds a Warning on Index Funds.”)

Bogle’s commentary is based on his book:
Bogle, John C. Stay the Course: The Story of Vanguard and the Index Revolution. Hoboken, NJ: John Wiley & Sons, Inc., 2018.

F.A.A. Regulations Slow Drone Innovation

(p. B2) Chinese aviation administrators, . . . , have already approved drone deliveries by the e-commerce giant JD.com and delivery giant SF Holding Co. But in the United States, it will depend on whether regulators eventually allow drone companies to have autonomous systems in which multiple aircraft are overseen by one pilot and whether they can fly beyond the vision of that pilot. Current regulations do not permit multiple drones per operator without a waiver. Operators like Wing, the drone-delivery company owned by Google parent Alphabet, have that capability.

. . .

Wing is . . .  one of several companies participating in a pilot program in Virginia. As with its testing in Finland and Australia, Wing will focus on the delivery of consumer goods, including food.

The Virginia site, in Blacksburg, near Virginia Tech, is one of 10 chosen by the Federal Aviation Administration as part of its Unmanned Aircraft Systems Integration Pilot Program.

The 10 were culled from 149 applications from “state, local and tribal governments,” agency spokesman Les Dorr said in an email. Those in the industry didn’t apply directly, but could show their interest, he said, and more than 2,800 companies responded.

. . .

While the F.A.A. has chosen the 10 pilots, the programs still need to apply for agency waivers because they will fly beyond the visual line of sight, fly at night and fly over people, fundamentals not allowed under current law. The agency is seeking comments on expanding permissible uses under current law; it is also testing to evaluate the parameters of regulation.

As a practical matter, this means that some of the pilot programs are not yet operational as they await F.A.A. approval.

That’s O.K., said James Pearce, a spokesman for the North Carolina Department of Transportation, which prefers to ensure that the drones can safely fly and that those on the ground are not exposed to any risks, including those that are self-inflicted. “We need to make sure that people know not to try to grab the drones.”

. . .

While the deliberate pace may seem slow, Mr. Levitt, like others interviewed, remains sanguine. “It’s like the red flag laws when cars began to populate the roads. You had to have someone walking ahead with a flag to warn others. That’s where we are today with drones — not being able to fly beyond the visual line of sight is like not allowing a car to drive faster than a person can walk.”

For the full story, see:

Ellen Rosen.  “No Drones at Your Doorstep, but Don’t Rule Them Out Yet.”  The New York Times (Monday, ):  B2.

(Note:  ellipses added.)

(Note:  the online version of the story has the date March 19, 2019, and has the title “Skies Aren’t Clogged With Drones Yet, but Don’t Rule Them Out.”)

Efficiency Skills Are “Profoundly Different from” Innovation Skills

(p. A15) How do you deliver performance now while developing the products you’ll need in the future? The skills required to support established franchises, he argues, are profoundly different from those required to develop new ones. Management techniques such as Six Sigma, focused on efficiency and execution, tend to be bad for innovation, which is intrinsically messy and inefficient. Companies need a different approach to nurture the radically original projects, or “loonshots,” that are essential for long-term success.
. . .
In Mr. Bahcall’s view, the principal obstacle to innovation isn’t that there are too few creative ideas–indeed, there are plenty of artists, he says. The problem is that original proposals are both discomfiting and imperfect, hence reflexively rejected before they can develop enough to prove themselves in the field.
. . .
Organizations can miss innovation opportunities by accepting the conventional wisdom, Mr. Bahcall observes, a problem he describes as “false fails.” Consider the Facebook predecessor Friendster. Mr. Bahcall explains that while most investors decided that the failure of Friendster was evidence that social-network efforts weren’t sticky enough to retain customers, Peter Thiel’s investment team wasn’t so sure. They dug into the data and were “stunned by how long users stayed with the site,” despite the irritating crashes that dogged the platform. Hence Mr. Thiel’s fund was an early investor in Facebook, confident that, with appropriate attention to the underlying technology, the platform could succeed. Eight years later, he sold most of his Facebook stake and pocketed roughly $1 billion.

For the full review, see:
David A. Shaywitz. “BOOKSHELF; In Praise of Wild Ideas; Innovative proposals can be both imperfect and discomfiting–and are often rejected before they can develop enough to prove themselves viable.” The Wall Street Journal (Tuesday, March 19, 2019): A15.
(Note: ellipses added.)
(Note: the online version of the review has the date March 18, 2019, and has the title “BOOKSHELF; ‘Loonshots’ Review: In Praise of Wild Ideas; Innovative proposals can be both imperfect and discomfiting–and are often rejected before they can develop enough to prove themselves viable.”)

The book under review, is:
Bahcall, Safi. Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries. New York: St. Martin’s Press, 2019.

Private Property Unleashed Innovation

(p. A17)  Enlightenment philosophers recognized that the crown, guild, church and village sometimes acted as rent-seekers stripping away the rewards for work, thrift and innovation, and in the process inhibiting productive effort and progress. The Enlightenment established the principle that labor and capital are private property and not communal assets subject to involuntary sharing, and thus unleashed the explosion of knowledge and production that drives human flourishing to this day.

Extraordinarily in America, the crown jewel and greatest beneficiary of the Enlightenment, political movements are afoot that seek to overturn the individual economic rights secured in the Enlightenment and return to a medieval world of subjects and subjugation.

For the full commentary, see:

Phil Gramm and Michael Solon.  “Enemies of the Economic Enlightenment.”  The Wall Street Journal  (Tuesday, 9):  A17.

(Note:  the online version of the commentary has the date 9.)

Peter Boettke Offers Advance Praise for Openness to Creative Destruction

Prometheus didn’t ask permission for Zeus to bring fire to the humans. It cost him dearly, as Zeus punished him in a rather vicious manner. But human beings were made infinitely better off with fire. Art Diamond relays this story to us precisely because he wants us to understand the great benefits that entrepreneurial innovation deliver for mankind, and yet how the true innovator is often despised and disrespected by the prevailing orthodox establishment. If Prometheus had to get permission before giving fire to man, then man would have never gotten the benefits of fire. Similarly, if our entrepreneurial innovators had to get permission prior to introducing their innovation, we would still be walking around or perhaps at best riding on the backs of beasts but I doubt we would have seen the benefits of automobiles, let alone planes, and we would very well not have modern conveniences such as indoor plumbing, let alone air travel, cell phones, and the world wide web.

Peter Boettke, Professor of Economics & Philosophy, George Mason University; Director F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center.

Boettke’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.

Chinese “Entrepreneurs Were Like Famished Goats Set Free from a Pen and Allowed to Flourish”

(p. 11) YULIN, China — For months, Zhao Faqi was a folk hero for entrepreneurs in China — an investor who fought the government in court and online, and against the odds, seemed poised to win. He accused officials of stealing his rights to coal-rich land, and ignited a furor by accusing China’s most powerful judge of corruption.
Now, Mr. Zhao has dropped out of sight — and the authorities want to erase his story.
. . .
The state news media has painted him as a cunning schemer. A judge who supported his case was paraded on television. A crusading former talk show host who helped bring the case to light has fallen silent.
Mr. Zhao’s arc from self-declared victim to officially designated villain has been dramatic even for China, where the party controls the courts and businesspeople can abruptly fall from grace. Mr. Zhao’s descent — and possible disappearance — is a demonstration of the hazards that entrepreneurs face in taking on powerful Chinese officials.
“I’ve faced a lot of risks and pressure because of this lawsuit,” Mr. Zhao said in an interview in Beijing a few weeks before he disappeared. Chinese entrepreneurs, he said, yearned for the rule of law to replace arbitrary power. “You can’t say someone is protected one day, and take away protection the next day.”
Mr. Zhao drew support from liberal economists and lawyers who have been unsettled by Mr. Xi’s reverence for communist tradition and support for state-owned companies, which he has urged to grow “stronger, better and bigger.”
. . .
Mr. Zhao, 52, was among the entrepreneurs who plunged into business after Deng Xiaoping, then China’s paramount leader, unleashed market overhauls. At the time, Mr. Zhao said, entrepreneurs were like famished goats set free from a pen and allowed to flourish.
“But we’re seeing this vitality steadily shrink,” he said.
. . .
. . . , Mr. Zhao’s phone has been turned off, and he appears to have gone into hiding or official custody.

For the full story, see:
Chris Buckley. “Chinese Entrepreneur Takes On the System, and Drops Out of Sight.” The New York Times, First Section (Sunday, March 10, 2019): 11.
(Note: ellipses added.)
(Note: the online version of the story has the date March 9, 2019.)

Innovative Entrepreneurs Bring Prosperity to the Poor

(p. A17) As the economist Joseph Schumpeter observed: “The capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses.”

For Schumpeter, entrepreneurs and the companies they found are the engines of wealth creation. This is what distinguishes capitalism from all previous forms of economic society and turned Marxism on its head, the parasitic capitalist becoming the innovative and beneficent entrepreneur. Since the 2008 crash, Schumpeter’s lessons have been overshadowed by Keynesian macroeconomics, in which the entrepreneurial function is reduced to a ghostly presence. As Schumpeter commented on John Maynard Keynes’s “General Theory” (1936), change–the outstanding feature of capitalism–was, in Keynes’s analysis, “assumed away.”

Progressive, ameliorative change is what poor people in poor countries need most of all. In “The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty,” Harvard Business School’s Clayton Christensen and co-authors Efosa Ojomo and Karen Dillon return the entrepreneur and innovation to the center stage of economic development and prosperity. The authors overturn the current foreign-aid development paradigm of externally imposed, predominantly government funded capital- and institution-building programs and replace it with a model of entrepreneur-led innovation. “It may sound counterintuitive,” the authors write, but “enduring prosperity for many countries will not come from fixing poverty. It will come from investing in innovations that create new markets within these countries.” This is the paradox of the book’s title.

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