2014: The Bay Area Innovator’s Year In Review

Xconomy San Francisco — 

[Updated 1/1/15, 1:37 pm. See below.] When you’re looking back on a year that’s winding up, it’s tempting to try to name the one new product that’s going to change the world.

Our stories from the San Francisco Bay region have certainly turned up some candidates—from the Apple Watch to a potential new method of gene therapy nicknamed CRISPR/Cas9, which a University of California, Berkeley, professor has helped turn into a biomedical research sensation.

But our coverage also suggests another way of looking at innovation. While a sole company or product can sometimes change the economy and even the culture, those big changes often come when a mass of creative people attack the same problems in a similar way. They inspire each other to invent fresh and often unpredictable combinations.

Here are some examples in which a critical mass of innovators has arisen not just to compete, but also to influence each other:

Wearables: One startup founder described the current activity in this field as a “frenzy.” The anticipated commercial debut of the Apple Watch can only stimulate more ideas, as market observers wonder whether wristband devices will take over some of the functions of mobile phones, such as online communication and mobile payments.

Health-related wearables have already blazed a trail. The fitness crowd uses San Francisco-based Fitbit’s Flex device, Misfit’s Shine device, and the Pebble watch to keep track of their physical activity such as miles jogged. Now startups such as Spire and Thync are creating devices that purport to improve our mental outlook as well. Spire’s stone-shaped clip-on measures breathing rates to detect stress, and prompts the user to do relaxation exercises, as Xconomy’s Elise Craig reported. Thync is taking a more direct route with an experimental device that includes electrodes to directly calm the brain.

Investors are putting up lots of cash for all sorts of digital health devices, which include apps that measure vital signs like the heart rate. But our national biotechnology editor, Alex Lash, found that little proof has yet emerged that these technologies actually improve health or save lives. Such evidence may be crucial for devices that may need regulatory approval because they directly affect the body, such as Thync’s, or for expensive wearables that users need their health plans to pay for.

Gene therapy: As we continue to learn ever more about the faulty genes that help cause disease, who wouldn’t want to fix them? Scientists have been developing methods to do this for years, but the field suffered a major setback in 1999 with the death of a patient in one of the first human trials. However, gene therapy is now undergoing a revival, and a number of companies are pioneering the use of a new gene-editing method called CRISPR/Cas9.

Co-founded by UC Berkeley’s Jennifer Doudna, Berkeley startup Caribou Biosciences has licensed its proprietary CRISPR technology to Cambridge, MA-based Intellia Therapeutics, as Alex Lash reported. It’s still early days, but the method may have some advantages over a number of other techniques that are also being explored by a range of companies.

Here’s where the group effort of many innovators over several decades comes in.
Intellia’s CEO Nessan Bermingham told Lash that the company is well-equipped to design tests of the CRISPR technique because it can learn from the library of data built up over the years by its rivals in gene therapy.

Several different gene therapy methods may some day succeed. But even the failures and near-misses in the field will probably have contributed to any eventual victories.

Educational Technology: The Bay Area is the workshop where all kinds of different online technology models are being explored to fill the gaps in our educational system. What are the problems? Tuition at traditional universities is getting more expensive, and students often graduate with a mountain of debt. At the same time, high-tech companies say they have jobs going unfilled because too few college graduates have the right skills.

As Internet bandwidth grew last decade, edtech companies started creating online courses that seemed like an inexpensive solution—but they do not offer a simple fix. Mountain View, CA-based Udacity was one pioneer of the free online classes called MOOCs, or Massive Open Online Courses, in subjects such as app development. But course completion rates were low, and Udacity switched its model this year. It’s now charging tuition for course sequences it calls “nanodegrees” in various programming skills. Udacity designed the courses in consultation with employers such as Google, AT&T, and Intuit.

While Udacity’s courses can be taken from your home computer, some edtech companies are going whole hog and creating physical campuses where students can interact with each other. The Minerva Project intends to offer full undergraduate degrees. It opened its first “campus” in the fall—a student residence hall in San Francisco’s Nob Hill neighborhood. But classes are taught online by teachers who may be in distant cities.

Galvanize, which began its code school in Denver, opened a branch this year in San Francisco’s SOMA district, where it also plans to offer its first degree program in data analysis with expert teachers on-site.

Meanwhile, other Bay Area edtech companies such as Udemy and EdCast are creating online marketplaces where universities and individual instructors can offer courses a la carte to undergraduate students or to working adults who simply want to gain new skills.

Incubators: We don’t usually think of incubator or startup accelerator programs as inventions, the way we classify innovative products. But these organizations are proliferating, creating new models, and expanding the options for startup founders who need seed funding and advice to get going.

Incubators for tech companies have a robust history in the Bay Area, but now similar programs are opening up for fledgling life sciences companies. Y Combinator, the influential Silicon Valley tech accelerator, started recruiting biotech applicants in May and graduated five of them from its summer session.

The international venture capital firm SOS Ventures, which holds accelerator programs for software and hardware companies, launched a separate accelerator program called IndieBio with one of its two branches in downtown San Francisco.

StartX Med, the biomedical arm of Palo Alto, CA-based nonprofit tech accelerator StartX, created lab space for startups in its new headquarters in a joint project with the venerable life sciences incubator network QB3 (the California Institute for Quantitative Biosciences).

The number of big life sciences companies forming their own accelerators is also increasing. JLABS (formerly known as  Janssen Labs), a division of drug giant Johnson & Johnson, is creating a life sciences incubator in South San Francisco with space for as many as 50 young companies. Bioinformatics giant Illumina (NASDAQ: ILMN) set up an accelerator program and welcomed its first three startups to its San Francisco lab space late this year. [Clause added to include the name change from Janssen Labs to JLABS in 2014.]

Life sciences startups, traditionally seen as capital-intensive investments for venture firms, now have the chance to become a bit more like tech startups because of the cumulative effect of all these incubators and their increments of seed funding. This supportive ecosystem in the Bay Area also includes little pockets of lab space that can be rented bench by bench, as well as crowdfunding platforms such as Indiegogo that are becoming alternate sources of early financing.