In a daring second act, Johnson is using the tools of entrepreneurship to tackle humanity’s most pressing problems.
- Byline May 09, 2019
I'm curious about the human brain because I find what I don't know much more interesting than what I do know.
One day my daughter, my seven-year-old daughter, brought up to me that she was concerned about a lot of things in life and we started walking through her list of concerns. To relate with her, I told her that I too was worried about monsters, but not the ones underneath the bed, but the ones inside my head. For example, my father struggled with addiction when I was growing up, my stepfather has signs of Alzheimer's, and I had a decade long of depression. I do feel tremendous personal motivation in building Kernel, because I suffered so deeply in my challenges of the mind. One of my biggest aspirations of the company is that these technologies we can build will eventually be useful for people who find themselves in these desperate circumstances.
Kernel is developing noninvasive brain interface technology that is able to read out your neural activity. Currently we can count our steps and our calories, we can sequence our genome and we can quantify our sleep, but we have virtually no insight into our brain. Imagine if you had a dashboard at the end of the day that gave you your day's activities. How would that change our lives, our behaviors? Our brain tricks us into thinking that we are hyper logical and rational and consistent, when the reality is the exact opposite. At work for example, we're trying to make well-founded, well-reasoned decisions. The cognitive biases we have negatively affect that and they compromise our ability to achieve the level of success we all desire. If we can read out what is really going on in our brain, conscious and subconscious, we now have the opportunity to reflect on how we're using our brains in ways we've never had before.
The most exciting thing about brain interface technology is not the things that we can imagine being able to do, for example, can I text from my brain or can I communicate from my brain. It's what we can't imagine yet being able to do with brain interface technology. To me, humanity is like an eight-billion-person orchestra we're all trying to play our instruments and be in tune with each other. I think one of the opportunities with brain interface is that it gives us the opportunity to create more harmony, more synchronization between us.
“Bryan is one of those rare geniuses that sees things other people don’t see and has the ability to make them happen,” said Waverly Deutsch, clinical professor and academic director of university-wide entrepreneurship content, and Johnson’s longtime friend. Deutsch helped coach Johnson and Braintree to first place in the 2007 Edward L. Kaplan, ’71, New Venture Challenge at the Polsky Center, when he was an Executive MBA student. Deutsch added: “It’s the combination of not only being able to see the future that you want to create, but also being able to bring people into that vision to create it with you.”
Johnson’s future as a pathbreaking entrepreneur truly began to crystalize far away from the shores of Venice Beach. As a 19-year-old Mormon on a proselytizing mission in rural Ecuador, an optimistic Johnson lived alongside neighbors in dirt-floor houses. For two years he did community service in the impoverished regions of Quito. The people around him lacked access to medical care and basic food security. Though Johnson would later leave Mormonism, the experience ignited his still-burning passion to change the world for the better. He returned to the United States fundamentally changed.
“If you go to college, you’re invited to think about what you want to study and what career you want to pursue,” he recalled, sitting in his sunlit living room, a short walk from Kernel headquarters. “None of that mattered to me anymore. The only thing that really mattered was: How do I help the most people possible? What can I do?”
At the age of 21, he came up with a straightforward plan: start a successful business, become a billionaire by 30, and use that money to help others. “In my 21-year-old mind that made sense,” Johnson said, chuckling at his youthful ambition.
He got to work, embarking on a string of ventures that included “one small success and two big failures” that left him heavily in debt—the “splitting the cheapest entrees at restaurants and sticking with water” kind of debt. Desperate, he took a gig selling credit-card processing services door-to-door to small businesses.
It wasn’t glamorous work, and the industry was rife with deception and shady characters. A contrarian at heart, he bet that transparency and honesty would win the day. He was right: a year later, he was breaking sales records. At the same time, he saw software-based businesses struggling with online payments. A thought struck him: “I wondered, is there a business here?”
Johnson’s years of serial entrepreneurship in his early 20s were a frenetic hustle. He somehow found time to earn a bachelor’s degree in international studies from Brigham Young University, graduating in 2003. In a rare moment when he stopped to take a breath, he found himself reading The Economics of Life, a collection of forward-looking essays by the late Gary S. Becker, who was a Nobel laureate and Chicago Booth professor.
“He framed the world quantitatively,” Johnson said. “I had grown up in a religious community, where certainty was created by faith and scripture, not through numbers and models and mathematics. I became infatuated with the idea that you could quantitatively understand the world.”
Inspired by Becker, and with the idea for Braintree kicking around in his head, he moved to Chicago and enrolled in Booth’s Executive MBA Program—becoming one of the youngest students admitted, in his mid-20s.
“I remember arriving feeling overwhelmed by how big the city was and intimidated by my fellow students, who were incredibly smart and accomplished,” Johnson said. “I was this small-town boy who didn’t have much to offer.”
His classmates remember differently. “He was very thoughtful,” said David Chase, ’07 (XP-76), a financial adviser at Wells Fargo, who was part of Johnson’s study group. “He wasn’t the first guy to raise his hand or shoot off the cuff. When Bryan spoke, everyone got quiet, because when he did so, it was usually after a lot of contemplation.”
One day, Deutsch visited their class to pitch Booth’s top-ranked business accelerator, the New Venture Challenge. Johnson signed up, and Deutsch coached his Braintree team. For the first time ever this lone-wolf founder had a network of support.
“I’d never had the benefit of having seasoned people around me to help me mature as an entrepreneur,” Johnson said. “I found it to be immensely helpful to think out loud and work with them on how to build Braintree.”
Limited partners typically approach deep tech investment with incorrect assumptions.
Starr Marcello, AM ’04, MBA ’17, adjunct assistant professor of entrepreneurship, met Johnson around the same time. “Bryan is direct and transparent about his journey as an entrepreneur,” said Marcello, now the Polsky Center’s executive director. “A number of our students have been inspired by his boldness—and have sought out his opinions. On top of this, he has always generously shared his time and his ideas to stimulate our collective imagination. I think people respond to him as a person because he has these qualities.”
When Braintree took first place in the 2007 NVC, no one was surprised—except for the humble founder himself. He now had the chance to chase his grand vision.
The timing couldn’t have been better: though payments processing was a crowded industry, it wasn’t one that was known for innovative software or exemplary customer service. Around the same time, new tech startups such as Uber, Airbnb, and Shopify—all future Braintree customers—were emerging, all needing new digital payment capabilities.
“The difference was in the way he supported his customers,” said Dan Manges, the founding chief technology officer at Braintree, who joined the company in 2008 as one of 10 or so employees. “Bryan talked a lot about trying to be emulation worthy, to be the kind of company that other companies would look to as an example of the type of service they needed to provide.”
That was no small feat—to allow its customers to accept user payments 24-7, Braintree’s own systems could never be down for maintenance. Johnson even tagged along once on an overnight trip to a data center, pitching in alongside his engineers to check logs and calling a customer to troubleshoot.
“That willingness to roll up his sleeves and dive in made Bryan an exceptional person to work with,” said Manges, cofounder of Root, a unicorn tech company in the car insurance space. “I model a lot of my leadership off of Bryan’s. He’s a thoughtful entrepreneur and leader, and his attention to excellence shows in Braintree’s continued success.”
By 2011 Braintree was growing rapidly. The company was processing $8 million in payments every day, and Inc. magazine ranked it among the fastest-growing private companies in the United States. Braintree secured a Series A funding round in June 2011, Johnson hired a CEO, and the company was generating about $10 million in annual revenue. Two years later, in 2013, PayPal acquired the company for $800 million. Johnson suddenly found himself fulfilling that wildly ambitious dream he had as a 21-year-old.
Johnson’s focus turned back to his early promise to himself: that he would do good for humanity if he had the chance.
“My objective was to do something that would matter in 500 years,” he said. “The sooner I could get started on that, the better.”
Intent on making the largest possible impact, he gravitated to deep tech and the kinds of futuristic scientific breakthroughs that, if successful, would result in quantum leaps forward for humanity.
He saw two clashing trends: first, new advances were rapidly decreasing the cost and time associated with doing science. Take, for example, the price to sequence a human genome—the first effort took $2.7 billion and 13 years, but by 2016 it could be done for less than $1,000, according to the US National Human Genome Research Institute.
Suddenly, an entrepreneur in biology or chemistry or genetics could get to market in a matter of years instead of a decade, with far less capital. “It became very apparent to me that this was the next revolution that was going to change the world,” Johnson said.
Second, traditional sources of funding from the government and research institutions were being squeezed. Venture capitalists were loath to step up, still considering scientific investments to be too long, too expensive, and too risky, hinging on a binary outcome of success or failure. Besides, most investors stick to what they know—and very few of them are scientists. In fact, Johnson noted, far more VC dollars today flow into e-cigarettes and scooters than the whole of synthetic biology.
Ever the contrarian, Johnson founded OS Fund with a bold declaration: it’s not only critical for the future of the planet that we invest in these breakthroughs; it’s possible to do so profitably.
The fund is already proving the naysayers wrong. The technologies among the 28 portfolio companies in OS Fund I might seem like the stuff of science fiction: engineering yeast to make custom-designed bacteria for probiotics that can treat antibiotic-resistant germs; storing data on DNA; programming new molecules, atom by atom, like they are LEGO bricks. And yet, the fund performed in the top decile of US firms last year, with 27 of the 28 investments receiving follow-on funding. Two of the companies have been acquired. Three companies are valued at over $1 billion.
“We don’t bet on a single algorithm or a single molecule,” Johnson said. “We take market risk not scientific risk.” Nearly all OS Portfolio companies have already proven out the core science of their product. Nearly all have also received previous nondilutive government funding. “The question is: How do they bring it to market?” Johnson said. “That’s a question of what customers to target, what to build and on what timescale, and what the strategy is for that approach.”
I am a natural pessimist about the world, and even I can almost believe that he can change the world in the way he says he will.
The OS Fund approach is creating a path forward for promising companies in the portfolio. Synthego in Redwood City, California, makes gene-editing tools more widely available and cost-effective for researchers amid a booming interest in the field. San Francisco–based uBiome has become a market leader with the world’s largest database of the human microbiome, our unique gut bacteria that scientists are learning can have huge ramifications for human health. Berkeley, California-based Pivot Bio has developed a microbe that sits on the roots of a corn plant and self-fertilizes it, inviting us to imagine an agricultural future without synthetic pesticides and the damaging effects they have on surrounding ecosystems.
(Learn about the ways the Polsky Center is supporting the commercialization of breakthrough research at UChicago.)
Johnson has already prefunded $30 million for a $250 million OS Fund II, to include 13 companies. He ultimately hopes that the fund’s successes can create social proof that entices typical venture capitalists to get in the game.
“Limited partners typically approach deep tech investments with incorrect assumptions,” Johnson said. “We’re inviting them to say, ‘Hey here’s this investment thesis that’s ready. It’s making money. We have evidence to show this is happening. It’s time to go.’”
While OS Fund supports ventures that largely look to solve threats to humanity with solutions from outside the human body, Johnson’s neuroscience technology company Kernel looks at addressing threats that imperil humans from the inside. Johnson has characterized these perils—diseases such as Alzheimer’s, epilepsy, depression—as “monsters.”
“When my daughter was seven years old, she told me that she was concerned about a lot of things in life,” he recalled. He asked her what she worried about. Her list included concerns such as animals taking over the world and the recently deceased family snake coming back to life. At the top of the list: monsters. “To relate with her,” he said, “I told her that I too was worried about monsters. Not the ones underneath the bed, but the ones inside my head.”
Johnson openly shares his own struggles with chronic depression, which lasted for about a decade. He has watched family members suffer from addiction and Alzheimer’s disease. He hopes Kernel can address these kinds of neurological diseases and dysfunctions. But also, he hopes Kernel’s technology can illuminate our own cognitive biases and extend the very limits of the human brain.
He’s assembled a team to push forward what’s possible. Most recently, noted MIT neuroscientist and entrepreneur Ed Boyden joined as a senior science advisor.
In an essay on the blogging platform Medium, Johnson wrote: “If we could really measure our brain’s activity, it would be a historical turning point for Homo sapiens, making radical human cognitive evolution possible.” The technology envisioned by Johnson and the team at Kernel is the so-called mind, body, machine interface (or MBMI), a noninvasive, wearable device that can read out your neural activity. “We can count our steps and our calories, we can sequence our genome, and we can quantify our sleep,” said Johnson, who swears by his own smart-ring sleep tracker. Comparatively, Johnson notes, the brain is a black box—we have virtually no insight on a day-to-day basis into how our brain actually works. “Imagine if you had a real-time dashboard that showed you your brain activities,” he posited. “How would that change our lives, our behavior?”
The most exciting thing about this kind of technology, he said, aren’t the things we can imagine doing—like texting from our brains. “It’s the things we can’t yet imagine being able to do.”
It’s a topic that consumes his thoughts even in his spare time. He’s a voracious reader, and his coffee table is piled high with science titles (Behave: The Biology of Humans at Our Best and Worst, by Stanford biology and neurology professor Robert M. Sapolsky, currently sits on top).
As part of his mission, Johnson is inviting the world along on his quest to unlock the brain: he’s in a new documentary, I AM HUMAN, which made its world premiere at the Tribeca Film Festival in May.
Above all, Johnson argues, it is a different game right now in the hard sciences. Farfetched breakthroughs are getting to market today. Marrying profitability with purpose is possible. Investing in science and deep tech, he said, “will likely catch on in the coming years as more and more people see the success of these companies. More capital will flow into it—because of how exciting it is for returns, but also for how it will impact the world.”
Johnson spends a lot of time thinking about humankind’s shortcomings and looming global disasters. Paradoxically, that has led him to an optimistic conclusion about mankind.
“Humanity is remarkably resilient and I would not bet against our collective tenaciousness and ingenuity,” Johnson said. “Investing in these companies and seeing what is really going on in the trenches of the future gives me tremendous hope that the technologies we need to solve our problems will, in fact, be online when we need them.”
He finds what he calls “gems” of inspiration in his children, now 15, 13, and 9. “My favorite thing is to listen to them think out loud,” he said, relishing their thoughts that are unconstrained by the societal norms and assumptions that often limit adults.
As Johnson prepares to take on the challenge of his career, he’ll have many supporters by his side. “I am a natural pessimist about the world, and even I can almost believe that he can change the world in the way he says he will,” said Deutsch.
Hazardous journey. Long months of complete darkness. Safe return doubtful.
The odds may be stacked against realizing his vision, yet Johnson remains undaunted.
“It’s exhilarating,” he said. “We’ve had to forge the path ourselves. I feel like I’ve found a true home in OS Fund and Kernel.”
The two companies—indeed all the opportunities Johnson envisions to help humanity thrive—have a common thread. To find solutions for health crises, climate change, really any challenge facing humanity, it all starts with the brain.
“Our brains are the master tool,” Johnson said. “Everything is downstream from our minds. We can evolve ourselves into an existence that is more remarkable than any of us can even remotely imagine.”
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