Why Google Ventures is Making Moonshots in Health (Q&A)

Google Ventures' strategy for investing in health care? Bring together some of the smartest scientists and technologists in the room, and see what happens.

During its six-year history, Google's investment arm has poured millions of dollars into an array of startups, whether it's a new brand of health insurance or a blood test to diagnose people with autism earlier than ever before. In the wake of the Affordable Care Act and other reforms, health care has become the primary focus for the firm.

Google Ventures invests in some trendy areas, like health technology. Investors poured $4.1 billion into digital health in 2014, which is nearly equivalent to the previous three years combined, according to venture firm Rock Health. But Google is also keeping a close watch on more ambitious and emerging opportunities, like gene-editing and therapies that leverage our knowledge of the microbiome, which are poised to transform medicine in the coming years.

Last week, I sat down for coffee with Dr. Krishna Yeshwant, an investor at Google Ventures who specializes in health and life sciences. Yeshwant has a medical degree and he still practices part-time, which gives him a unique perspective on how technology is changing health care. This interview has been condensed and edited for brevity.

What's different about Google Ventures compared to all of the other venture capital firms that are investing in health care?

That's easy. It's all about the team, which is comprised of doctors and science Ph.D.s. Multiple investors in our group, myself included, are currently practicing medicine. We understand how the science development cycles work, the patient pain-points, and the complexity, and we don't shy away from it.

Do most of the entrepreneurs that you invest in have a background in technology, health care or both?

We can take a life sciences entrepreneur and expose them to the latest machine-learning technology, and help them tie that in to their business, and vice versa. One company we invested in that is doing that well is Flatiron Health (an oncology tech startup) in New York City. They brought together life scientists with computer scientists. The only drawback is that it's hard to come up with a culture that supports both these types.

Are you planning to invest more in consumer health, including wearable devices and mobile medical apps? 

We aren't seeing a huge level of adoption in consumer health. I'd be the first on the boat, though, if I saw something that is really catching on. We really need more tools for prevention, rather than treating those who are already sick. I hope we see something as big as Google for consumer health.

What consumer or patient-focused startup idea would get you really excited that doesn't exist yet? 

Gosh, there are many things that I know it's not, like patient portals. I am really impressed with One Medical, which is an actual doctor's office but also offers software for patients and doctors to communicate with each other. With most consumer health products, what's so often missing is the 'why' factor? Why would a patient open up this app? Where's the value?

One of the problems is that most consumer health companies aren't going through a regulatory approval process with the FDA, which would make them more valuable from a clinical perspective. But the person who is experienced with regulation and the person who knows how to build a successful consumer experience aren't typically at the same startup.

At a recent conference, I heard fellow venture capitalist Chamath Palihapitiya talk about all the venture firms that claim to invest in health care, but are really "tourists." They look at the space for a while and then back off because health care is hard and doesn't result in quick returns. Does Google Ventures fall into this camp? 

I wouldn't consider us tourist VCs. Bill Maris (president and CEO of Google Ventures) and Larry Page (the CEO of Google's parent company, Alphabet) have given us the ability to pull our firm into health care in a big way. We were investing back in 2009 before health care was a hot area. It panned out well. A third of our fund is now dedicated to life sciences, and everyone on the team feels strongly that the health system is broken in so many ways.

What are some of your more ambitious investments in health care?

We're looking at CRISPR (a breakthrough gene-editing technology). One startup we invested in is Editas Medicine, which is looking to use genome editing to develop new therapies for disease. With CRISPR, we're talking about extracting immune cells, editing DNA and re-inserting them. Blood cancers are an early focus, but I could see auto-immune diseases being next.

You recently got involved with a revamp of Harvard Medical School's curriculum. What needs to change to make medical schools more relevant? 

The special advisor to the Dean of Harvard Medical School invited me in a year ago to talk to the board about what's going right and what's going wrong with entrepreneurship. The school introduced a new curriculum a few months back, which represents a major shift to focus more on collaborative thinking. Medicine is no longer a thing we practice alone. It's me and about 15 other people, including coaches and nurses. Other new areas of focus are statistics, genetics, and the changing role of data in health care.

I recently interviewed Google Life Sciences, which is making headway into developing new technologies for diabetes management. Are you working with that team? 

Google Life Sciences is their own entity. If it makes sense for us, we'll look at technology to help patients manage diabetes as it's a profoundly impactful disease. I'm particularly interested in exploring investment opportunities to help people with Type 2 diabetes.

As a side point, when I was studying for my medical boards, there was a table for lung cancer with six different disease types that we had to memorize. Now there are more than 60. That same pattern will pan out in other disease areas. Diabetes is a chronic disease that is already so complex, and is only set to become more so. Many genes are partially involved as opposed to one gene, and we need a software infrastructure to study that.

It's now trendy for scientists to research the microbiome and the gut. Is this something you're looking into from an investment standpoint? 

Yes. Everyone experiences a drug or food differently because of the microbiome. How shall we modulate that in the future? This is one of the few emerging areas that will be as big as gene-editing.