Building Biotech in Seattle: Madrona Investor Spotlight with Joe Horsman
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I've always kind of found myself as maybe the outsider sitting inside of Stratis Genomics and then Roche. I'm the one business guy sitting inside of a room or building full of scientists. And now I'm here at Madrona and I'm like the one science guy sitting with a bunch of amazing company builders and VCs. Welcome to Founded and Funded. I'm Coral Garnick-Duckin, the digital editor here at Madrona. And today I'm excited to sit down with Madrona investor Joe Horsman for the latest in our Investor Spotlight miniseries.

These conversations are all about what drives our investors and what they look for in founders. First, a little background on Joe. He has his PhD in biochemistry and has always aimed to sit at the intersection of groundbreaking science and translating discoveries into real world impact.

Before joining Madrona, Joe worked in business development at Roche, where he focused on accelerating DNA sequencing technologies. He actually joined Roche through its acquisition of Stratos Genomics, where he led business development efforts. At Madrona, Joe brings a unique blend of scientific expertise and business understanding to investments in biotech and life sciences companies pushing the boundaries of innovation. So Joe, let's start at the beginning. You have a PhD in biochemistry.

But somehow you didn't end up in the lab, you didn't end up working in academia, and now you're here investing as a VC. So how does that happen? How do you go from one to the other? I mean, it definitely isn't by plan. I've always been drawn to science. This is maybe for the last 20 years, I've always been really driving towards this pursuit of the boundary of knowledge. And maybe it goes back to the beginning of college, where it's like, hey, I'm going to start and take my...

I'm going to take my chemistry classes. I'm going to take my biology class. I'm going to take a few business classes as well. And I've just found the science classes so much more compelling and got drawn down that path. And I still took a few business classes. I took like a 400 level negotiations class in the business school. By the same token, I didn't really aspire to a career holding a pipette. I've done my dues. I stayed my late nights in lab. But

I've always really wanted to see how you can take this amazing research that is sitting inside of academia and sitting inside of these researchers and these research institutions and bring it out to something that is real and has a real impact in the world. And, you know, venture is an amazing way to do that. At what point, you know, along your path, because obviously PhD takes a long time and then you have a lot of... Just a couple years. No, just a couple. Yeah.

And you have a lot of experience working in biotech. So at what point did you kind of realize that, hey, maybe investing in the VC side of things is the path that I'm looking for?

Well, it's funny because I don't even think I knew VC was a thing until probably into grad school. You know, I was looking to differentiate what I had as a skill set, anything that could give me kind of a business sheen to my resume. And I got connected with the small venture fund, the W Fund. I was like, wait, what's this venture capital thing? What do you do? And it was amazing. And, you know, I did that for two years.

And that was kind of wrapping up. I went and looked around and was like, well, there's no jobs in venture. Like that was a fun chapter of my career. And I'm going to go off to biotech, like kind of what I always imagined I would do.

Fast forward a few years, I get connected with this amazing crew here at Madrona. I was like, oh, this is an amazing opportunity to come back to it. I never planned to go into venture with the first place. I never planned to come back to venture. But it's a privileged seat. I get to talk with some of the smartest people in the world on a daily basis. I'll tell them, everyone's always giving you their best idea. They want to

have this amazing thing we're working on for years and years and years and have a partner to help translate into the real world. And that's an incredibly attractive thing to sit there and get to just engage with these scientists and these researchers on a daily basis. So you've got, you've been able to live and breathe the biotech space. Now you're doing it on the other side. How would you say that path that you took has improved?

influenced the approach that you take working with these companies and working directly with founders? I mean, I think it's kind of funny. I've always kind of found myself as maybe the outsider where, you know, sitting inside of Stratogenomics and then Roche, you know, I'm the one business guy sitting inside of a room or building full of scientists and

And now I'm here at Madrona and I'm like the one science guy sitting with a bunch of amazing company builders and VCs. So I think it certainly colors how you see the world differently coming in as a scientist. I think it's helpful as a VC. There is a certain...

dues you pay being a scientist. Like I've done the, you know, late nights in the lab waiting for a protein to purify. I've done the like Saturday morning time points. I go, it's been 12 hours. I got to go head into lab to do that. And so you definitely have been there and done that and been there and done it with the startup scene too, right? Like you're

You drink the Kool-Aid. You're in a foxhole with a bunch of people trying to kind of make the impossible happen. And so coming in from this from the scientist and the operator role, I think gives you a lot of empathy for what it takes and, you know, what it really means to try to build something in the sciences where, you know, it's really hard. Looking at trying to...

build deep tech science innovation inside of a startup, I think it's helpful as an investor to be able to go deep in the weeds. This is not B2B SaaS. There is this universal truth set out there. Biology is the biology. The chemistry is the chemistry. The physics is the physics. And if you bump up against that and you're on the wrong side of this truth set, there's no going back. You kind of are...

You test a hypothesis, you went down it, and you can be wrong, and just objectively so. You know, it's

I think really, really important to have those realizations as a VC trying to build in a really tough field. I think the other piece that really has come out is trying to work with founders to solve really, really hairy problems on the cutting edge. That's what's exciting. That's what we all are here to do. Being able to go into the Madrona partner meeting and say, here is this amazing product.

problem we're going to try to solve. We're going to try to be partners on this. And if we do, there's a big prize both for financial gains, but also for human health on the other side of this. And that's a really fun thing to get across to both the people I'm working with inside of Madrona and also outside in the greater community. So I think that we all kind of, or everybody who knows the name Amazon knows that the Seattle name goes along with it on the tech side of things, as we've talked a little bit about already. But there's a huge

biotech space here in Seattle too that people might not be as familiar with. What does that ecosystem look like? I certainly think Seattle doesn't get as much recognition on its biotech scene. I think we have a lot of work to do here. I think I'm hopeful that Madrona can help build the Seattle biotech scene the way we've helped build the Seattle tech scene. Seattle has amazing scientists and amazing science. Truly world-class researchers come here

We just had the Nobel Prize by David Baker. His lab was right next to mine in grad school. But we really kind of need to build more on the company side of things. Science doesn't spin itself out. Science doesn't build its own companies. And a lot of times these researchers need help, whether it's on the C-level CEO role or whether it's on a CBO or whether it's a funding partner to help them

take this technology that they have spent up to 10 years building and turn it into something impactful. We have Fred Hutch here in Seattle, we have the University of Washington,

We have the Benaroy Institute, we have the Gates Foundation, we have PATH. There's all these resources. I'm leading tons of people out, the Allen Institute. There's an amazing, amazing ecosystem here. I think as we think about what the next wave of really exciting biotech innovation is, it's going to be encompassing more technology. And Seattle is really well positioned for that. You're still going to have to have an eye towards amazing science and amazing scientists.

But for Seattle, the AI talent, the ML talent just isn't the same density as Boston, another huge biotech hub.

And in San Francisco, man, those people are expensive. And so Seattle might be an awesome place. I think it is an awesome place to build this next generation of biotechs where you can go over to Microsoft or Amazon and offer compelling vision to an amazing engineer. It's like, okay, you can do something impactful with your next career step. Do you want to go help cure cancer? Do you want to go help cure sick kids?

And you can do that. And that's what I think I'm really hopeful for this next decade or two for the Seattle biotech scene. I think it's going to take 20 years, but I think we are going to see some really, really impactful companies here. And we have a history of impactful companies. You have Cgen, who just got bought by Pfizer for one of the largest biopharm acquisitions in a long time.

You have Immunex and Amgen that really was impactful for both the biotech ecosystem, undergirded what Amgen became, but also for patients. So we have a rich history of that, and I think we're going to continue, and I think we're going to build on that as well into the future. And you made a good point. This isn't SaaS, one in that it takes a very long time to even realize you're going down the wrong path, perhaps. But also in the

the role that venture capital plays in developing this innovation. It's very different than, you know, we hear about OpenAI and we hear about Anthropic and Runway, all of these very techie companies, but the VC dollars play a very different role when it comes to biotech. Why don't you just sort of break that down for us a little bit? Yeah. I mean, I think there is, to one extent, it does play a different role.

But on the other side, it's all risk capital. These are risky bets that we're taking both in the tech side of the world and in the life science side of the world. And it really has to be venture capital dollars. We are taking a big risk as investors and as founders. And this isn't something you can do inside of academia. This isn't something that can be funded or should be funded by granting agencies. It takes it up to a point.

And then this has to be taken out to a company where you're going to start knocking down different risk profiles and start to make this more like a product, make this more like a drug. So it is just risk capital. And we go into this knowing that it's a really risky venture, just like in B2B SaaS land, right? It's, you know,

perhaps actually not that different in terms of an overall risk profile. If you look just historically about the two sectors who have really been able to generate consistent, durable, venture-like returns, IRR in the private markets, it is software and it's biotech. There's a massive VC ecosystem on the biotech side of the universe. Just there aren't many people who cross those paths over the past maybe 20 years. And now we're seeing that breakdown as technology

technologies come more and more into play, and science isn't so much of a bespoke industry of one scientist making one observation, writing in their paper notebook,

The advent of NGS, where I've spent several parts of my career, had a big part in bringing big data and massive data sets to play. And that's not slowing down. And so that's why I think you're seeing more and more of these hybrid investors and hybrid firms coming over and saying, hey, we can take some lessons from the tech universe and bring them into biotech. And maybe we can change some of the risk calculus. I think the other difference, too, is...

We're doing something good for humanity here. Like, if you want to maximize your dollars as an individual, like, you should go work at OpenAI or Anthropic. Like, they'll pay you a million dollars to be an amazing researcher in AI. Like, there's not very many researchers in life sciences who are making a million dollars a year. We're here trying to make medicines. We're here trying to better humanity. And, like, that's a very exciting thing. It's what gets me out of bed every day. I know we didn't talk about this one beforehand, but I'm curious...

At Madrona, we do have the history on the software side of things, obviously, with Amazon. And we've been now in the biotech space for a lot longer than people really realize. How do you think the expertise on both those sides work well together as an investment firm? One of the special things about Madrona is that it really is...

a fantastic collaborative partnership. Like if there are things that my partners can do to help build biotechs from the tech angle, like people roll up their sleeves and do it every day.

There aren't very many VCs who deeply understand the data infra or infrastructure and all it takes to really spin up things on the tech side. I feel like sometimes this is viewed as magic. We just throw our data into this ephemeral cloud and eventually we can go...

ask it questions or magically accrue some value. Having been built there as a firm, we know what it takes to give scientists, I'll say lab scientists at the bench, this information at their fingertips, help them make better decisions, set up the data architectures, infrastructure, and make them have the right connections with people at Amazon or Google or Nvidia or any other tech company. So, hey, people want to be partners.

This is an industry that I think is on the cusp of some great things, and people want to come around the table and help build. And so that's a place that I think we know some of the ways that you can succeed, but also know some of the ways that you can run into trouble.

So pivoting just a little bit, I know that you are a very active person. We've talked about climbing and you've given me tips on trails to go hike and all this kind of stuff. And I know that actually is a really important piece of how you show up to work as well, the energy that you bring. And you kind of have a lot of thoughts about that.

while you share it. Yeah, I mean, if you want to get me chatting, we can chat about all the adventures and the trails and the climbing. Like that's certainly something near and dear to me. I've always been high energy. Like I'm sorry to my parents. I'm sure they've been chasing me around since I was like, you know, six months old. You know, I'm firmly in the weekend warrior phase of my life. Like I don't get out as much as I wish I did during the week. Maybe I'll make it out for like a before...

work ski once this winter. That's impressive. Trying to go skiing before work. Oh, it's a dawn patrol. It's a wonderful thing. Oh, okay. Getting up at 3am, not so much fun, but like skiing at sunrise, it kind of balances out. But I mean, I love getting out in nature. Like I love backcountry skiing, try to make it out climbing, always been a runner. And I've really found that that's kind of where I can recharge, you know,

As much as I love waking up Sunday morning and getting a good cup of coffee, oh, shout out to Push-Pull, it's an amazing roaster in Seattle. Those weekends where I'm just in the town and I don't manage to make it out for a hike or a ski, like, yeah, I got more sleep, but I don't feel as mentally refreshed. I don't come to work on Monday.

with as much energy as if I went out and slept in my car to trailhead Friday night and then was out all weekend and make it back Sunday evening. Like, yeah, I'm physically much more tired, but mentally much more ready to go, much more refreshed. And I think it makes me more creative. It makes coming to work on Monday with a renewed passion to go do this whole VC thing, which is like the other side of my life.

I feel like it's counterintuitive to a lot of people out there, but I get it. Especially knowing you, I see it every Monday when we come into the house. I'm always down if any founders want to go for a climb or a run. I take all those meetings. Those are the best. Okay. Well, Joe, thank you so much for joining me today and sharing all of this. It's...

I think it's important that founders out there get to know our investors a little bit. And for those of you listening, stay tuned for more conversations with people behind the investments at Maduro. Thanks, Nicole.