Episode 3: Why Jason Kelly of Ginkgo Bioworks Is Still Betting on Boston

Yeah, happy to be on. Thanks for having me, guys.

Yeah, let's do it.

Yeah, it was a decade of excellence, as my dad called my time at MIT. Yeah, it was just nonstop.

Yeah.

Yeah, so I mean, we were coming. I started the company with four folks I went to grad school with. We were all students together, and then an MIT professor was the fifth founder. And we were here. We were a little later in our lives, right? So we had done our PhDs at this point. So I guess we're, I don't know, 28 or something. And then biotech is pretty, I would say, strongest in the country here in Boston. And we were doing a biotech company, and so it was a very natural fit. Ironically, that didn't mean we could raise money from biotech venture capitalists or anything else, which I can talk about because we were coming straight out of school. So it wasn't like Boston was very supportive of us starting this company. But we did feel like it was a good place to be. Yeah.

Yeah, definitely. For biotech, I think it's still the strongest ecosystem for biotechnology, and I would actually extend that to a lot of deep tech. Yeah. I think for robotics and for alternate, you know, battery tech, energy tech, I actually think Boston is a stronger ecosystem than anywhere else in the country. Personally, I can talk about why we're not seeing this happening, but I do think it is the strongest place from a standpoint of talent and also culture of the employees. So, we're definitely somewhat biased, but having been working in tech companies, curious to get your take.

So, I usually call it real tech, but that's a little more offensive to the tech industry. So, I call it deep tech now. But yes, we're not a software company. Yeah, that's right.

Quick Ginkgo story, right, for folks that might be in similar shoes to where we were back in 2008. So, we graduate from our PhDs. We did the MIT 50K competition. We didn't even get out of the first round in that competition, by the way. And so then we formed the company and started talking to venture capitalists, and very quickly apparent that we're not going to be able to raise money. So, it was 2008, number one.

Yeah, tough times, financial crisis. We were not trying to make a therapeutic drug, which is really what the biotech venture capital ecosystem here is all about. We wanted to be like a platform tech company and robotics and all this stuff. And then third, we were children, right? Like we were straight out of school, young founders, which, you know, is cool in software, but actually not cool in biotech. Okay. And so I think that's probably generally true across deep tech. And so anyway, so we said, all right, it's fine. And we applied for a bunch of grants, like government grants, actually. So DARPA, NSF, SBIR, probably like 5 million bucks over a four or five year period. And then summer 2014, Sam Altman, Mr. Famous now, takes over as president of YC, and he puts up a blog post, and he's basically like, I think the YC model can apply to more than just software companies. I want to see nuclear energy companies. I want to see biotech companies. I want to see materials companies. And so I wrote him an email. I was like, man, thanks for this blog post because it's like an oasis in the desert, you know, right? I'm like, we've been around for 5 years. Like we got 15, 20 people in this lab in Boston. We don't make sense as a YC company, but it's just refreshing because no one is ever talking about this stuff. The tech people won't invest in us because we're not software. And the biotech people, okay. And so he's like, no, you got to come meet me. So I flew out and met Sam. I was like, love at first sight. YC is amazing. And so we decided to do it, and we were the first biotech to do YC. So even though I was in Boston, my whole fundraising training and mental model is very San Francisco.

And so that has made it very clear to me, like, we didn't raise a dollar in Boston. I mean, I raised 2 billion over the life of this company, right? And I think here and there, I don't know, Polaris or somebody, there's like here and there little bits, but like no funds, no nothing. All my money was New York and California.

Yeah. But well, here's what I actually don't think it's disappointing. Let me tell you a little secret about money. It travels very easily.

You can't believe it. Like it can just move across the whole country instantaneously.

You don't need it to be here. Yeah.

Yeah, it's the dumbest thing in the world. You like just go raise in California, right? So if you're doing seed, you should raise money in California. That's where the money is. And if you're doing growth, go to New York. And now California, back in my time, there was less of this. But now there's a ton of growth in California, too. But like, why the hell would you raise here? Huge mistake. But never like don't waste your time.

Big deal. That's your choice. Like that's still your decision as a founder where you want to put the company.

Well, by the way, like I bet, I mean, we did a total like clown car seed round out of YC. Like I had 60 names on the cap table and Oh, yeah. Like it was never, if you're weird, God bless all the AI companies, right? Like if you're like a weirdo, if you're doing something weird or different, deep tech, and that doesn't make sense, fundraising is always harder, right? So I could have a whole separate tome of advice for raising money if you're a weird company. But yeah, we had like a ton of people on the cap table because, you know, YC is great that you, you know, demo day, meet all these angels. I bet half of them thought we were based in California, right? Because you're meeting people, you're in YC, right? What's the difference? They don't really care, you know? Well, like no one actually cares where the company is based.

Right. And by the way, again, lots of real advantages, right? Like talent in California moves constantly. Like people are staying in a company for two years, right? People stay together for a decade, right? It's just there's a lot of cultural advantages to Boston. It's just don't ever raise money here.

Do not. Huge mistake.

This is a venture firm. I think.

No, no, we're real tech.

We're not real. I feel like you're unreal tech. We're not.

Oh, a few places. There's basically two big tracks if you want to nerd on bio. No, no, zero video. But there's one track which is, you know, if you think about what you're doing in bioengineering, you're basically programming in a coded language. The language is just DNA. And so partially there is how do I design the DNA that makes a cell do the thing I want it to do. And that could range from I want it to be a CAR-T immunotherapy to treat your cancer to I want it to be a corn plant that produces its own fertilizer, like whatever. There's a myriad applications. And in each case, just like writing a software program, you want to write a DNA program that does the job. So one line of AI is can the AI help me write that DNA code just like it's helping Claude code or whatever help you write your nerd code. Okay. And so that's like one branch. And then the other branch is, and by the way, those models are not trained on human language. They're trained on genomes, typically genomes. Yeah. Genomes of like AlphaFold was like a famous thing from Google. They're trained on biological data.

All right. So then there's the other half is the reasoning models. And hey, a lot of doing science turns out is reasoning, right? And so this is where we've been making a big bet, which is can the reasoning models improve the ability for scientists to basically engage with robotics, design their experiments. And so can you piggyback on the reasoning models to start to break through on the laboratory automation side and things like that. And a lot of people are playing, you know, like physical AI, Figure's company and stuff like that. There's a lot of people trying to say, hey, the AI reasoning is going to help robotics break through into more areas. And we're all going to go behind Waymo, which was the first one to really break into the physical world with AI. Well, we want to break it in the lab. You know, all these other companies want to break it into manufacturing, wherever else. Like we're part of that train, but that is relevant for bio just as much as the design models. But those are the two lines of AI work. Does that make sense?

Yeah.

I mean, I don't agree for myself and Ginkgo. We've always been like, you know, freakishly too ambitious or something. Just persistently believe. So like our persistent belief is you can have a platform tech company in biotech, which like to tech people is like, what are you talking about? All the great companies are platform tech, Windows and AWS and Nvidia. Like I get it, everything's horizontal, you know, nothing in biotech is like that. Everything is totally vertical. It's like all unique tech stacks under pharma companies basically all developing their own apps. And so we've had this like donkey kong quest to make a horizontal platform for 15 years now. So that is a level of ambition I think where we're one of the most ambitious from just a pure sort of like technology dream. I want to make a Google thing. But we had that ambition on the technical side.

Coming out of MIT. So I do think at a technical level at the schools here in general, like we are absolutely saying go for pushing the envelope of human knowledge. And we were like this era of synthetic biology, programming DNA, like big, big dreams. Like you get that. And then the next bit is though, are you able to dream big on the business side, right? And this is where I think Y Combinator is a very powerful tool. So Y Combinator is very much teaching entrepreneurs, you know, it's a business school for entrepreneurs basically. And it's teaching them, look, what you should be trying to build is a Google, right? An Intel or whatever, you know, I'm dating myself, but like, yeah, bigger era, right? And like a generational company or nothing, you know, right? Like what's the point of trying for something less? Like it's all tail outcomes, right? And all these things. And so that we don't get that culturally in the startup ecosystem here. So for example, in biotech, again, we're freaks. But the average biotech around here is basically a single, you know, a drug developer with a hope to get acquired by Merck.

So what you do is you start, you know, the company. In fact, you rarely start it yourself. Like almost nothing is founder-led, like they're spinouts of venture funds or whatever. And the venture fund owns 90%, the entrepreneur owns nothing. You hire a team, you get to a certain point, and then you try to sell the asset for 3 billion dollars when it gets to a good phase two result, good phase three, whatever, right? And that's that. And then, you know, everybody cheers. Yeah, big win. Big win, right? But nobody's built a 400 billion dollar company. No, you know, it just never happens. And so that, and in part because it hasn't happened, right? You don't have the pattern matching. Yeah. Right. Like why is Silicon Valley tech like it is, you know? Well, you know, thank Bill Gates, right? You know, like you had this example, right? In that, I mean, he wasn't even in Silicon Valley, but in that industry of just how you did it, right? And then I could see that could be that guy. And right, like YC is really good about that, too. They do those Tuesday night dinners and they bring people in. I mean, the YC program is actually quite simple, by the way. Yeah. Everyone always tries elaborate stuff and these stupid classes that teach entrepreneurship is nonsense. Like what YC is as a program is every Tuesday night they bring in people to talk to the batch and it's like someone famous.

And that's powerful in the same way that like Harvard bringing in a senator to see the undergrads, it humanizes this person. You're like, wow, maybe I could be John Kerry. He's actually that smart or something, right? Like, you know, like there's this sense that they're actually a person, right? So like I think Zuck came in our batch back in 2014, right? I was like, oh, cool. You know, right? But it's like, you know, you ask them questions off the record, a normal person. And so that's one thing they do is that ambition bit gets set. And then the second thing they do is like at the very first meeting, they're like, okay, in 12 weeks or I think it's 12, yeah, 12-week program. 12 weeks we're going to have demo day and you're going to get on stage and there's going to be, you know, 500 VCs in the audience. We're going to be able to say because of YC's reputation, like look, 80 back then, 80 companies are going to get on stage and, you know, historically two of them are going to, it's probably better, our stats now, but two of them are going to be worth more than a billion dollars five years from now. So just pick the right two, you know, right? Like, and so there's this dynamic where like you're going to have this high leverage opportunity on stage 12 weeks from now. So why are you even sitting here listening to me right now? Like why aren't you like working your face off to improve your company so you get the most out of that moment? And so that creates like the second bit after ambition, which is tempo. Like you should be moving fast, right? And that's it. Like that to me, that's the two things that is embedded in the Silicon Valley ecosystem and entrepreneur culture is like max ambition, max speed. That's it. Like it's not more than that, right? Like, you know, all this other nonsense. It's like you take, make a business plan. It's like absurdities that you might still learn, you know, like, but that's the game. And so we got that even though we were in Boston because we went to Y Combinator.

I do think some things are strong suits and not. So if you want me to be a little controversial, the, so I bet there was like some, you know, Twitter debate or whatever over the holidays that I waded into because some guy, Will Mandis or whatever, up in New York. So there's all this stuff going on with like New York and San Francisco politicians, the wealth taxes. And they were all, there's like this, it was like, well, we don't want to turn out like Boston. Look what those liberals did or something, right? And it was like, that's not the story of why, like has nothing to do with it, right? It's just like a, yeah, it was a total red herring. And I'm like, no, that's not it. Like it was like acting like back in 2000, it was like Boston or San Francisco were the two places you would start a software company. And then San Francisco won because of our politics. Back in 2000, I, by the way, I graduated MIT in 2003. Boston was still at that point not a place to start a software company. It was Seattle and San Francisco. And that's because we kind of lost software a whole generation earlier in the minicomputer era. So we had DEC and Wang, which were like computers the size of refrigerators out here in like Route 128 and that whole area. And then very famously, personal computers came online in California and this ecosystem never put forward a personal computer competitor that played in the game. And so then all the center of gravity moved to California. And so after that happened, that reinforcement loop has made it really hard for this area to compete. Now, and God bless Microsoft went to Seattle and Amazon went to Seattle, so Seattle became the other center, but like we just didn't have it right now. Maybe we had a giant software, but there's something to be said there. But so I actually think it's harder, no offense, in software to compete with the ecosystem in San Francisco. But at the same time, I don't know if you've followed our richest man on the planet. He's made his money outside of software.

Now, hasn't he? Right. So what did he build? He built a electric car company and a rocket company. Right. Like absurd. Okay. And so that's the kind of stuff you notice where he did not make those companies.

San Francisco.

Yep. Like San Francisco's not tolerant of rockets blowing up and right. Like this, he had to go elsewhere, right? And so I think that sort of deep tech, like these other areas, I actually think are a good fit for Boston. And so I think that what we're missing is someone like Elon who was Silicon Valley programmed because of PayPal to be max ambition, max tempo. And he just brought it to the hard tech arena. And he made out like a bandit. And so why aren't we bringing that attitude into a lot of these other areas where Boston has like intrinsic, like the thing that's making me crazy right now. So I'll end my rant is the robotic stuff.

Right. Like so if you have been on the internet over the last 10 years, every like dystopian scary humanoid robot video was from a company called Boston Dynamics.

Okay. So how are we not crushing the robotics thing here?

Right. Like I mean that is like our birthright at this point now that it's finally coming online with AI. That should all be happening here. Okay. And so like that's a myth, you know? Defense, yeah, we're Raytheon, like we're actually a big defense state. We do really, people know how to blow shit up in Massachusetts, right? Like that, like we should be leading in defense tech. And there I think we have all the seeds and the main thing we're missing is the culture, the entrepreneurial culture to do like, again, the Anduril guys are Silicon Valley pill, right? Palmer, like the guy was making VR headsets, dude. Like he didn't know shit about defense, okay, right? Like so all he had going for him was the ambition and tempo thing, like he programmed correctly as an entrepreneur and then he just waded into a market where it's like, okay, well, who am I competing with? I'm competing with the sleepiest, oldest companies in the world.