Rome is famous for persisting for centuries - and having not been built in a day. If you go there, then one of the most magnificent sites is the most famous sporting arena in the world, the Flavian Amphitheater - better known as the Coliseum. Last week there was colossal news in the biotech world that Arena Bioworks was shutting down, after only two years and $100M spent of its "committed' half billion in funding. What went wrong?
Arena was pitched as a big new idea in biotech when it broke into public view in 2023. Top notch scientists would be able to work in an academic-like environment, but without the pesky teaching responsibilities - or the burden of institutional committees. The name sprang from a Theodore Roosevelt quote: "the credit belongs to the man actually in the arena", and the new organization would importantly give its star scientists a much larger share of rewards of spinning out companies, avoiding the share given to the heirs of John Harvard or Leland Stanford. Arena Bioworks would be an academic powerhouse and a machine spinning out new biotech ventures with reliable rapidity. Such a powerhouse that explicit allusions were made to being a new Bell Labs.
Anytime a splashy new venture fails there are many takes - and more than a few are quite nasty. Arena's fall is no different; to say that some tweets dripped with schadenfreude would be to completely underrepresent the intensity of venom. I hope this piece isn't seen as an attack. First, I've been there - having been laid off twice and twice been at companies out of cash - and between those there are three companies. Second, I would like to see success in new experiments of connecting funds to scientists. Certainly this year we have an Administration hell bent on ending the Vannevar Bush vision of public funding - not that it wasn't showing cracks before. I also knew people at Arena who are now disrupted. My new role as automation visioneer prefers audiences on which to project that vision - and ideally interested in talking to my colleagues who sell automation realities. And more Boston-based biotech institutes are more possible future employment destinations - employment in biotech is always a bit contingent.
So what happened? Apparently the billionaire funders got cold feet. There were hints of trouble when biotech veteran CEO Harvey Berger was brought in this summer to run the shop, but he's now out of work as well. But probably the biggest problem was those funders not having sufficient nerve to weather the current biotech slump. They bought high and sold low - investing at the peak of low interest rate bubble in the space and expecting that happy party to continue when any realist would say there will be hiccups. Suddenly $400M in "committed" funding wasn't really committed - Arena didn't run out of cash but out of funder patience for those sweet, sweet startups which would feed money back into the institute and into the funders' portfolios.
Which gets back to the Bell Labs bit - everybody wants their new venture to embody a myth of Bell Labs, but not the reality of Bell Labs. I'll confess that the definitive history, The Idea Factory, is stuck on my infinite reading list, but I have read Claude Shannon's biography. Bell Labs was indeed an amazing place where amazing discoveries were made - information theory, the transistor, the maser, charge-coupled devices, Penzias and Wilson's detection of the cosmic microwave background, UNIX and the C language. Certainly many more. Bell was one of many storied corporate labs that once made magic happen - General Electric supported Irving Langmuir's work, Xerox PARC gave us the mouse and GUI, IBM the scanning tunneling microscope.
But note that none of these made the parent companies torrents of money. Sure, Penzias and Wilson were trying to deal with background noise in microwave transmission of telephone traffic and Shannon gave the theory to drive that. These labs often worked on important problems for the parent company. But the transistor didn't fuel an electronics industry in Holmdel New Jersey - it was the defection of William Shockley that seeded the Silicon Valley (or more precisely, the fact that Shockley was a thoroughly awful boss, which drove his original team to desert and found early companies). I saw an atomic force microscope product - a twist on scanning tunneling microscopy - at ASHG - but not by IBM. UNIX made very little money for AT&T - partly due to the legal situation around the Bell System monopoly. PARC is notorious for not cashing in on their computer interface innovations.
And a big reason for that is because none of these labs was focused on making money or spinning out companies or meeting deadlines - and that's what made them so productive. Because Shannon could be "a mind at play", he could go in any direction he wanted - and so could all his colleagues. No idea was going to be parked because it wasn't commercial enough.
There's also the question of time. It's easy to see from the Wikipedia entry on Bell Labs that it was producing interesting work right away after its founding in 1925 - but none of those innovations are the famous ones I listed above.
Apple's original attempt at launching a mouse and GUI computer wasn't Macintosh, it was Lisa which was expensive and never sold well because of it. Expensive because that's what it took to support the computation required for a GUI. In a parallel universe where PARC tried to immediately commercialize their discoveries, they would have almost certainly face-planted.
Similarly, AT&T's legal issues with selling UNIX led them to give it away (or at least tolerate it being given away), enabling the hacker culture around UNIX to grow and thrive and build the many tools and innovations that drove it to success. If AT&T had launched a UnixCo with a legal department in line with that of 10X Genomics, UNIX would have never been the success it is now.
So if you're going to try to start the next Bell Labs, think carefully. Anything in the mold of the great Labs will not be retrieving huge sums of money.
We don't actually need to wait any for the next attempt at a Bell Labs - it's already supposedly happening. Another venture has already hit the news release wires with claims it will be Bell Labs and PARC all in one. I wish them good luck, as the industry could use a lift - but I don't expect their Labs to fetch the glory of Holmdel.
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