Mike Edelhart: The second is science and technology. We’re deep science oriented. The ideas we hear from the entrepreneur on day one won’t be the ideas by which the company actually succeeds. It’s all delineated by change and unexpected circumstances.
We think that deep science and strong technological differentiation gives a company the space to go through all those changes. We look hard at the team to evaluate if they are the best people to do this in the world.
That’s one reason why we are so intense about finding a lot of companies. We know what we need to know in terms of what’s going on.
We look at temperament. We believe that small groups of humans who love one another and love what they’re doing can basically accomplish anything. Are you doing this for the right reasons? Do you love what you’re doing? Do you love who you’re doing it with? This is not going to be fun.
The moves may make it look like fun, but it’s not. You have to be prepared to go to war with these people. Then we look at terms. Our investment rate is small.
Sramana Mitra: Very well put together. What is one company that is emblematic of all these values that you talked about?
Mike Edelhart: It doesn’t matter what we think. I’ll talk about companies I love in our portfolio and companies that I think highly of. It may turn out I’m wrong because I’m an old white American and I have all my habits and prejudices. It’s about the six plus billion people on earth and what they want. We try and focus on that.
A company that we are proud of and feel strongly is Embr. What’s interesting about that company is that it is a deeply scientific product with five MIT PhD’s with 19 patents. It’s a consumer product. In the past, deep science would be in a clinic or in a hospital with expensive machineries.
Embr is a wrist band. If you hit one side, you’ll feel five degrees cooler and if you hit the other side, you’ll feel five degrees warmer. You can have a personal thermostat if you want to warm up in the office or work in a hot environment. It’s a terrific product producing substantial high-margin consumer sales.
It’s also potentially a valuable clinical product. The company is doing deals with big labs and big pharmas, which take longer. The consumer incomes that are coming in right now will help underwrite that. It’s a whole new approach to the market. It has the potential to produce value. It can help people right now. We love those kinds of companies.
One that tugs my heart strings is called Trexo. It’s an AI-mediated exoskeleton that allows children with difficult syndromes like cystic fibrosis to walk. It’s very clunky. It’s expensive but when the families experience a child out of bed, it’s just extraordinary.
It’s an indication of what’s coming. The next version of Trexo will be a much more elegant exoskeleton. The version after that will be something that’s applied to your legs. The version after that might be functionally invisible. We think we’re at a huge transition point in the science of health and the experience of health.
Sramana Mitra: I love it.