Riskgaming

Recently in the Lux Capital office, my colleague Chris Gates, the producer of the "Securities” podcast, along with biotech investor Shaq Vayda were talking about the global macro environment and venture capital. Tech stocks hit their zenith in November 2021, and now a lot of VCs have slowed down their investments over the last couple of months. That's led to something among limited partners and asset allocators known as the “denominator effect”, where portfolio managers move money from one asset class to another as each asset class performs relatively differently. And so they talked about the denominator effect, they talked about a couple of other different patterns that they’re seeing in the venture world, and I figured that since it's summer, and it's July and we’ve already have talked about enough terrible news on the “Securities” podcast the last couple of weeks, I figured we could do something a little bit different, which is sort of a Venture 101 on the denominator effect, and talking about basically what we're seeing in the world today. So here's Shaq and Chris, take a listen. Suggested reading: WTF is the denominator effect? by  Danny Crichton

There has been a massive expansion in data emanating from bio labs, and that means next-generation AI algorithms and machine learning models finally have the grist to transform the future trajectories of biology and health therapies. Yet, there’s a key translation challenge: how do  you get computer scientists and biologists — two types of specialists with very different training — to collaborate with each other effectively? Two groups, Bits in Bio and Nucleate, have independently spearheaded new ways of bringing all people interested in tech and biology together to share best practices and think through patterns of startup inception and growth. Today, we bring the founders and early champions of those two groups together for the first time in person to talk about their work. Joining us first is Michael Retchin, a PhD student at Weill Cornell Medicine and one of the founders of Nucleate, a free and collaborative student-run organization that facilitates the formation of pioneering life science companies. Second, we have Nicholas Larus-Stone, the first software engineering hire at Octant.bio, a Lux-backed synthetic biology startup, as well as the founder of Bits in Bio. Finally, joining “Securities” host Danny Crichton is Lux biotech investor Shaq Vayda. We talk about where tech + bio (versus “biotech”) is coming from, how the two community leaders launched and grew their respective organizations, the coming challenges in biology, and our speculative dreams for the future of what biology could look like in the years ahead.

“Securities” podcast host Danny Crichton and producer Chris Gates talk about the last two weeks of “Securities” newsletters. The first, from July 9th called “Dissonant Loops”, discussed the chaos and crises plaguing the world today and why our state capacity to respond to them is so limited. The second, from July 16th entitled “Scientific Sublime”, was a palette cleanser of sorts focused on the human achievement of the James Webb Space Telescope and how this accomplishment can be shared by everyone on Earth. We’ve got the lows and the highs, and then we talk about a few of the top Lux Recommends selections from the two issues, including: “Postcards from A World on Fire” from The New York Times last year showing the scale and diversity of climate devastation IEEE’s overview of the daunting data challenges that come from transmitting those gorgeous images to Earth CLIPasso, a Best Paper awardee at SIGGRAPH 2022, which uses machine learning to abstract complex photography into simpler sketches “Building an Open Representation for Biological Protocols” Daniel Oberhaus’s book Extraterrestrial Languages, which asks two provocative questions, “If we send a message into space, will extraterrestrial beings receive it? Will they understand?” Finally, Kit Wilson’s analysis in The New Atlantis on “Reading Ourselves to Death”

Welcome to “Securities” by Lux Capital, a podcast and newsletter devoted to science, technology, finance and the human condition. I'm your host, Danny Crichton, and today we're talking about the post-Roe world. Tomorrow, it'll be 30 days since the Supreme Court announced in Dobbs v. Jackson Women's Health Organization that there is no constitutional basis for the right to abortion, overthrowing several decades of precedent. It's a decision with huge implications for tech startups, which will now operate across 50 sets of state laws, covering everything from privacy and data governance to who gets to decide which patients receive women's health and who won't. Now that we've had a few weeks to digest the decision, I asked my Lux partner Deena Shakir to bring together a panel of guests to talk more about how startups are responding to Dobbs. Guests: Dr. Neel Shah is an assistant professor of obstetrics, gynecology and reproductive biology at Harvard Medical School and Chief Medical Officer of Maven Clinic. Halle Tecco is an entrepreneur and angel investor passionate about fixing our healthcare system. She is the founder of Natalist, which was acquired by Everly Health in October 2021, and she is also the host of The Heart of Healthcare podcast. Paxton Maeder-York is the CEO and founder at Alife Health.

Today we're talking about the future of American defense. And we have three of the leaders changing the trajectory of this important field with us is the leadership of Anduril Industries. First, Palmer Luckey Founder, also Brian Schimpf Co-Founder, and CEO, as well as Trae’ Stephens, Co-Founder and Executive Chairman, along with us is Josh Wolf from Lux. I want to start out by painting the least rosy picture I can of the American defense industry over the last year and 2021. In Afghanistan, we saw a massive pull out of the American forces there. After more than two decades of war, we saw Russia invade Ukraine, in which Turkish drones some of the cheapest on offer in the market today have become the unlikely hero instead of American defense technologies. Meanwhile, America is not producing anywhere near the hardware, or even the software required to supply Ukraine with javelins and other core defense needs. On Capitol Hill, the defense budget process seems to get more chaotic and confusing every year. And we also found in the last year that China appears to be probably ahead of the United States, on hypersonic missiles. And so when I look at the defense industry today, it seems to me it's just negative after negative after negative news. - Danny Crichton Recommended reading:  Rebooting The Arsenal of Democracy The new apex of “Entropic Apex”

Here is my dilemma, I want custom art for the podcast. Ideally, I would have a new image for each episode. Up until recently, my choices were to use stock photography or work with an artist. I now have a third option, AI art generators. As of late, my Twitter feed has been filled with these AI-generated images and I have become obsessed with them. On one hand, I feel like a superpower of visual communication has been unlocked and on the other hand, I am an artist and creative who wants other artists and creatives to get paid, I am conflicted.  DALLE-mini  What Kind of Sorcery Is This? Why code is so often compared to magic. Hieronymous Bosch fusion reactor #dalle2 - Josh Wolfe DALL-E makes some fantastic World’s Fair posters - Sam Arbesman "Interplanetary Space Empire by Thomas Cole" via DALL-E - Sam Arbesman

SpaceX has grown from nascent dreams of the final frontier into the world’s premier commercial space launch company, with dozens of successful missions that have continually become more and more ambitious. Now, there’s a budding ecosystem of SpaceX alumni who have left the mothership to build their own companies, taking the culture and values they learned and applying it to problems they saw at the front lines of space innovation. On today’s episode of the “Securities” podcast, host Danny Crichton interviews two of those alumni, Laura Crabtree, the co-founder and CEO of Epsilon3, and Will Bruey, the co-founder and CEO of Varda Space. Laura and Will shared a cube at SpaceX, and are now building software and hardware startups, respectively. We discuss how SpaceX’s culture shaped their perspectives as entrepreneurs, why they chose different problem areas of space to tackle, how the 2022 financial markets impact their approach to growth, and how they think about company building and the Los Angeles / Southern California hard tech ecosystem. Recommended reading for this episode: Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX  News: Startup Epislon3 hopes to expand Pentagon reach with launch ‘software service’ Epsilon3’s space industry OS powers more than launches as it brings in $15M in new funding Varda Space Industries closes $42M Series A for off-planet manufacturing

"Where marginal stupidity is about  “how there is a turning point where further information or complexity can befuddle us and simply raise costs without any concomitant value,”  what I am seeing in hard science investing is an outsourcing of thought,  a reliance on the splashy marketing one-pager instead of the agonizingly long technical research with the diligence to match. None of this bodes well for many of the new VC entrants who have suddenly become enamored by the capital return potential of science. We have a  view that real advances in science are relatively rare, that they are hard to produce, and they tend to be signaled by clear research evidence years if not decades in advance. Venture capital is not a fit for the needs of academic researchers who require long time horizons of open exploration without commercial considerations. Skillful diligence is critical to making thoughtful investments, and investors must have a  well of resilience to draw upon, since most diligence will come back relatively negative in the hard sciences compared to software. We need the right dose of vaporware skepticism. We can’t allow the excitement of science fiction to occlude the challenges of realizing it into science fact. Condensing fact from the vapor of nuance means finding the rare but tangible scientific advancements and propelling them forward on the path to commercialization. Otherwise, you’re investing in steam, and those returns on capital will just evaporate right through your fingers." - Danny Crichton Lux Capital's "Securities" newsletter edition: Vaporware skepticism by Danny Crichton "Securities" podcast is produced and edited by Chris Gates Lux Recommends:  The nuclear situation with North Korea has been transformed over the past few months, with changes that will ripple across the Asia-Pacific region and into U.S. foreign policy. Kim Hyung-jin and Kim Tong-hyung in the AP have a great explainer on the latest evolution of nuclear strategy emanating from the DPRK. Our scientist-in-residence Sam Arbesman brings us an article from Nature on the Long-Term Evolution Experiment (LTEE), in which scientists have saved tens of thousands of generations of E. coli over 34 years in order to improve our understanding of evolutionary biology. The scientists are retiring and the bacterial cultures are moving homes in order to continue their lengthy evolutionary run. Shaq Vayda recommends a podcast and attached transcript between Eric J. Topol of Medicine and the Machine and Demis Hassabis, founder of DeepMind. The two discuss the advancements that deep learning affords medical advancements Retired lieutenant colonel Alex Vershinin, writing a commentary for the Royal United Services In

"The world is incredibly complicated, and humans necessarily use heuristics and analogies to process that complexity into simpler forms. These mental shortcuts are never perfect, but they should broadly summarize the complexity they represent while affording their user a sense of their limitations. In that vein, I want to call attention to two lazy tech analogies that I’ve seen lately as examples of the kind of impoverished analogical thinking that the industry needs to actively avoid." - Danny Crichton Lux Capital's "Securities" newsletter edition: American national security and startups + Lazy tech analogies by Danny Crichton "Securities" podcast is produced and edited by Chris Gates

"GPT-3 was trained on is so large that the model contains a certain  fraction of the actual complexity of the world. But how much is actually  inside these models, implicitly embedded within these neural networks? I  decided to test this and see if I could examine the GPT-3 model of the world through the use of counterfactuals. Specifically, I wanted to see if GPT-3 could productively unspool histories of the world if things were slightly different, such as if the outcome of a war were different or a historical figure hadn’t been born. I wanted to see how well it could write alternate histories." - Samuel Arbesman From Cabinet of Wonders newsletter by Samuel Arbesman Great tweet thread summarizing his post "Securities" podcast is produced and edited by Chris Gates