Money is a culture medium
for growing viable enterprises into self-sustaining engines of creation.
Bob Swanson was 29 when he
provided the money for Prof. Herbert Boyer to start Genentech. Like all overnight successes, the real story
is more complicated, with deep roots.
Bright, accomplished, and motivated, Swanson had obvious potential – and
a string of failures to show for it. In
the documentary,
Something Ventured
(see below), Thomas J. Perkins said that his firm, Kleiner Perkins Venture
Capital, brought on Bob Swanson, but “there was not much for him to do.” Swanson said that he would look into
biotechnology. Perkins replied that if
something was there, they would be interested, otherwise… And at that point,
Perkins trailed off into a gesture and face. Clues are always little things.
“So we hired Bob Swanson,
whom Eugene Kleiner had known through venture capital circles. Bob had worked
for Citibank in their venture capital operation and he and Eugene had been involved in a failed deal. Eugene had been impressed
with Swanson's ability to think straight and get things done. So when Bob was
looking for a new position, we hired him. That would have been about late 1974.
We were in Embarcadero Center Two then, on the top floor.[…] Bob worked on various
deals for us. And, I have to say, not very successfully. Eugene, in particular, was increasingly
unhappy with Bob. He didn't think much was going to be happening.” – Thomas
Perkins [Source 5]
Robert A. Swanson was born
in Brooklyn, New York, November 29 1947. When he was still an infant, his family moved
to Florida
where his father worked for Eastern Airlines.
He attended MIT and completed his bachelor’s in chemistry in 1969 and
followed that in 1970 with an MBA at the Sloan School of Management. [Source 1] (Wikipedia gives 1970 as the year
of both degrees.)
Immediately after
completing his MBA, he was hired by Citicorp Venture Capital. Within three years, they were impressed
enough with him that he was sent to San
Francisco to open a Citicorp Venture Capital Office
there. In 1975, he joined Kleiner,
Perkins, Caufield & Byers. (Perkins
recalled that as “late 1974.”) [Source 5]
Swanson had read about the
research in recombinant DNA and gene splicing.
He sought out Dr. Boyer and asked for 10 minutes. The two men spent three hours in a tavern. Swanson’s knowledge of chemistry served him
well, as he could understand the nuances in the different techniques being
pursued by different researchers.
Swanson saw the market for Boyer’s work.
They launched Genentech on April 7, 1976. [Source 2]
In 1977, Genentech started
with human growth hormone by contracting for production with City of Hope
Hospital in Los Angeles and with the University of California
at San Francisco. That allowed Genentech to move up to cloned
human insulin in 1978. They followed
that with other successes: alpha interferon, gamma interferon, a hepatitis B
vaccine, and thrombolytic (clot-producing) agents for hemophiliacs, and then tissue
plasminogen activator (TPA) to dissolve blood clots associated
with heart attacks.
America’s bilateral East Coast / West Coast dichotomies
are easy to cite, especially in technology.
(In Hackers: Heroes of the
Computer Revolution, Steven Levy pointed out that the Spacewars video game
came from MIT, whereas Stanford gave us Adventure, based on Lord of the Rings.) But Robert Swanson understood the importance
of social capital, built with strong employee bonds. His scientists could publish their work,
something most big drug companies were reluctant to allow. Also typical of the West Coast, Genentech held
Friday parties known as ho-hos. As
Genentech researchers remembered it:
“The Ho-Ho tradition began simply
with refreshments for employees every Friday afternoon. At the end of one
particularly hectic work week, a manufacturing VP said, "Oh, another
Friday afternoon, ho, ho, ho, ho." And the name stuck. …
The Ho-Ho was an occasion
for play and absurdity. One time Swanson and Boyer came dressed up as
Tweedledee and Tweedledum… But from the start, Ho-Hos were more than just fun.
To Swanson, the Ho-Ho was “a wonderful idea, because you need a place where
people at all levels of the organization, from the president on down, can get
together in their shirtsleeves and talk about the issues, as equals... One of
the things you worry about, as you get higher in an organization, is whether
people are comfortable telling you the truth about the way they see the needs
of the company - where are we screwing up as a company?”
The firm posted a profit in
1979 and went public in 1980. That public offering came at some human cost for
the venture capitalists. Perkins and
Swanson disagreed on the timing, with Swanson being opposed to going
public. Eventually, Swanson saw
Perkins’s point, but their strained relationship was worse off for it. Still, Bob Swanson worked as CEO of Genentech
through its steepest growth curve through 1990. Tom Perkins was chairman of the board. Then, from 1990-96 Swanson served as chairman. In 1990, Genentech and Roche Holding Ltd. completed a
$2.1 billion merger. Initially Hoffman-LaRoche bought a majority interest in Genentech. Then in 2009, LaRoche bought the rest of the stock, but turned around and sold off blocks of it in to the public.
After leaving Genentech Bob
Swanson formed a private investment management firm (K & E Management), and
served as chairman of Tularik, Inc., a firm researching gene expressions that
can be harnessed to produced therapeutics. He also volunteered his time to
civic organizations and to his daughters’ soccer teams.
In the book, 1,000 Years, 1,000 People: Ranking the Men
and Women Who Shaped the Millennium, (New York :, Kodansha International, 1998) the authors ranked Bob Swanson number 612 for launching the biotechnology
revolution.
After a year of battling
brain cancer via surgery and chemotherapy Bob Swanson passed away on Monday,
December 6, 1999, at his home in Hillsborough,
California. (The Guardian gave it as November 30.) He was 52.
Sources:
1. http://web.mit.edu/newsoffice/1999/swanson-1208.html
(Obituary)
2. http://www.gene.com/about-us/leadership/our-founders
(Tribute)
3. http://www.nytimes.com/1999/12/07/business/robert-a-swanson-52-co-founder-of-genentech.html
(Obituary)
4. http://www.guardian.co.uk/science/1999/dec/10/obituaries.genetics
(Biography)
5. http://content.cdlib.org/view?docId=kt1p3010dc
(Program in the History of the Biological
Sciences and Biotechnology: Kleiner Perkins, Venture Capital, and the
Chairmanship of Genentech, 1976-1995; interviews conducted by Glenn E.
Bugos, Ph.D.)
6. "The Origins of
Biotechnology: A Genentech Perspective"
http://blog.zymergi.com/2013/01/origins-biotech-genentech.html
(Personal recollections
and images of artifacts including company newsletters.)
ALSO ON NECESSARY FACTS