Listen to the Suck with Curiosity

Lots of rubbish has been written on innovation, such as, why you shouldn’t give up, how fortune favours the brave (or the prepared, since braveness is in short supply in this post-industrialisation era), that smart work is better than hard work, only the persistent win, and many such gooey ideas.

I’ve finally come across an antidote to all that BS in Safi Bahcall’s excellent book Loonshots. Using two stories (one long and one short) I’ll introduce you to a framework that explains the relationship between persistence and stubbornness, and the difference between false fails and true fails. Let’s crack on!

Since the 1960s, the rate of heart attacks have decreased by 75 percent. Lifestyle changes—diet, exercise, the decline in smoking—are responsible for some of those gains. The remainder is due to a drug isolated from a blue-green mould found in a grain store in Tokyo by a Japanese mushroom aficionado and microbiologist.

This is the story of that drug.

In 1966 Akira Endo, a scientist from the food-processing division at the Japanese conglomerate Sankyo, read a study that compared the rate of heart disease between Japanese men living in Japan and those who had moved to Hawaii. The Hawaiian Japanese, who ate a western diet, had much higher levels of cholesterol and heart disease than those who had stayed in Japan. Endo realised as Japan became more westernised, heart disease would become more common. He was determined to find a drug that lowered cholesterol.

Endo turned to fungi—moulds and mushrooms. Mushrooms can’t hop away from predators, so to defend themselves, fungi have evolved many ways to kill bacteria. Endo knew that many bacteria require cholesterol to survive. Could fungi secrete a chemical that kills their predators by blocking their cholesterol?

Within a couple of years, Endo had tested over six thousand species when one fine day he found a blue-green mould that blocked a key enzyme needed to make cholesterol. The mould was Penicillium citrinum, the same genus that produced penicillin, but a different species.

Within a year, Endo extracted the molecule that lowered cholesterol. He called it ML-236B. The drug is now known as mevastatin. It is the seed—the original—from which sprang Lipitor, Zocor, Crestor, and all the other statins. These statins would grow into the most widely prescribed drug franchise in history, saving millions of lives.

But first, Endo’s drug had to survive three big failures.

In those days, trials evaluating drugs that lowered cholesterol were failing. Three of the most widely studied drugs were found to increase the overall death rate in trials. Another clearly caused cataracts.

Since normal cell function requires cholesterol, scientists believed any drug that lowered cholesterol must be dangerous because it would interrupt normal cell function. Endo presented his promising results for mevastatin at a conference. Almost no one came to hear his talk. He left dejected. (Failure #1)

But Endo pushed on and, with the support of his superiors at Sankyo, mevastatin soon reached a crucial stage: testing in live animals. With great excitement, his team gave the drug to rats and saw … nothing. Zilch! No cholesterol lowering.

In the world of drug discovery, failure in standard animal studies always kills a project. With no results, there was no hope of persuading biologists at Sankyo to continue evaluating the drug. (Failure #2)

All hope was lost when at a bar near his lab, Endo ran into a colleague from a different department who worked with chickens. It occurred to Endo that hens might have high blood cholesterol, since their eggs have so much of it. Higher starting levels of cholesterol could make the effects of his drug easier to detect. He began without formal approval.

The results were spectacular. Mevastatin decreased cholesterol by nearly half, with no ill effects. Scientists later learned that rats have mostly HDL (“good cholesterol”), and very little LDL, the “bad cholesterol” that contributes to heart disease. Which means that rats are a poor choice for evaluating statins, which lower just the LDL. Chickens have both types, like humans.

Word spread after the test was successful. Endo soon received a call about an 18-year-old girl with severe hypercholesterolemia (FH), a rare genetic condition in which the body cannot pump cholesterol out of the blood, resulting in cholesterol levels to rise to 2-10 times normal levels. Her condition was serious. Endo decided his drug was ready for the trial.

Two weeks into the trial, Endo got a call at midnight. Her cholesterol had dropped by 30 percent—the drug worked! The trial succeeded and the drug became the first big hope for patients with dangerously high cholesterol. Sankyo launched a large study. Endo retired from Sankyo, satisfied that his drug project was secure.

The enthusiasm, however, was short-lived. Three months later, results from a safety study suggested that high doses of mevastatin caused cancer in dogs. Sankyo had had enough. The company stopped the mevastatin research. Rumours about the cancer side effect spread quickly. Other companies and research centres terminated their statin research as well. Although Endo suspected the dog study was flawed, he could only watch from a distance as his program collapsed. (Failure #3)

That might have been the end of the statins, except for a surprising discovery from a parallel research program. Two years earlier, the pharma giant Merck had also initiated a screen of fungi, had also discovered an inhibitor of the same enzyme that Endo discovered, and had also found that it worked well in lowering cholesterol.

But Mercks’s compound was very similar to Sankyo’s (a difference of only four atoms) so they terminated the program following Sankyo’s—fearing it was a dead end. But it was later found that high doses of mevastatin used in dogs led to a harmless condition that looked like cancer but wasn’t: a false positive. Merck began new safety studies again.

After those studies showed no hints of the drug causing cancer in dogs, Merck began large clinical trials required by the FDA. The results were strikingly positive. An FDA advisory panel unanimously recommended approving the first statin: Merck’s Mevacor.

Mevacor and its successor Zocor became the most successful drugs in Merck’s history. Cumulative sales of Merck’s statin franchise have exceeded $90 billion. Cumulative sales from all statins have exceeded $300 billion.

Endo’s story is more than a wild anecdote. The twisted paths leading to great discoveries are the rule rather than the exception.

The negative result in the rat experiment (Failure #2) was a False Fail—a result mistakenly attributed to the innovation but actually a flaw in the test. Sankyo persisted through that fail. But it gave up at the next False Fail, after Endo had left: the spurious results in dogs (Failure #3). The company handed its share of $300 billion to Merck on a platter.

There are many reasons projects die: funding dwindles, a competitor wins, the market changes, a key person leaves. But the False Fail is common in all breakthroughs—both in science and in business.

In the 2000s, many social networks had tried and failed to win the loyalty of users who hopped from one network to the next. Investors concluded social networks were like clothing fads: users switched networks like they switched jeans. Investors passed.

In 2004, when Mark Zuckerberg met with investors to raise funds for his new startup, users were just beginning to abandon the most recent social network success story, Friendster, for MySpace.

This is the story of Facebook’s funding.

After Zuckerberg approached him, Peter Thiel reached out to his friends to learn what was going on behind the scenes at Friendster. He wanted to understand why users were leaving. Like other users, Thiel knew that Friendster crashed often. He also came to know that the team behind Friendster had received and ignored crucial advice on how to scale their site—how to transform a system built for a few thousand users into one that could support millions of users. He received a copy of Friendster’s data on user retention. He was stunned by how long users stayed with the site, despite the irritating crashes.

Thiel concluded that users weren’t leaving because social networks were weak business models, like clothing brands. They were leaving because of a software glitch. It was a False Fail. Thiel wrote Zuckerberg a $500,000 check. Eight years later, he sold most of his stake in Facebook for roughly a billion dollars.

Thiel saw past the False Fail of Friendster, just as Endo saw past the False Fails of the statins.

People may think of Endo and Thiel as great inventors and investors respectively, but arguably their greatest skill was investigating failure. They learned to separate False Fails from true fails. How do you do that?

On every setback or rejection, they tried to Listen to the Suck with Curiosity (LSC)—overcoming the urge to defend and dismiss when attacked, and instead investigating failure with an open mind.

While others gave up when, for example, the rat models didn’t work (Failure #2), Endo asked why they didn’t work, and set about testing ideas. Well before he tested his drug on chickens, Endo had spent many months on experiments trying to understand why his drug didn’t behave as he expected. He already suspected what’s called a species difference (when a drug behaves very differently across animal species). He knew to act quickly when the opportunity appeared.

Where others assumed Friendster was yet another example of a social network fad, Thiel investigated why users were leaving and found a contrarian answer, in which he had confidence. Contrarian answers, with confidence, create very attractive investments.

LSC means not only listening for the suck but also probing beneath the surface, with genuine curiosity: why something isn’t working, why people are not buying, etc.

LSC is the answer to the most anguished question we hear from entrepreneurs, researchers, inventors, and all pursuers: how do I know when to give up?

How does one tell the difference between persistence and stubbornness? When someone challenges the project you’ve invested years in, do you defend with anger or do you investigate with genuine curiosity?

If you defend your position instead of questioning why you might be wrong, you need to worry the most.