Longevity investing: Navigating hype cycles to preserve reputable technologies

LongeVC’s Sergey Jakimov explains how overhyped healthcare solutions can hinder the reach of life-changing technologies.

The last couple of years have seen the economy sputter and concerns raised about financial institution stability. While the field of longevity continues to pursue extended lifespans and increased healthspans, longevity investors need to be aware of an equally insidious threat that could loom large over the industry: hype cycles.

These cycles occur when new technologies grab the public’s attention and cause a surge in popularity, a tidal wave sometimes resting on no more than soundbites and flashy promises. While hype can drive investor interest as well as headlines, it also has the potential to overshadow genuine progress. Sergey Jakimov, the CEO of Swiss investment group LongeVC joins us to delve into the imperative of preserving reputable technologies amidst the allure of hype in the longevity industry.

Longevity investing: Navigating hype cycles to preserve reputable technologies
Sergey Jakimov, CEO of LongeVC

Longevity investing: Hype cycles must not overshadow reputable technologies
by Sergey Jakimov

While medicines like aspirin and insulin have earned their reputation as trusted components of modern healthcare, history has not been as kind to other “breakthroughs.” You may be familiar with snake oil, a catch-all term encompassing medical solutions with misleading promises. While there are absolutely scammers that promise to sell the “secret to longevity” in a supplement or superfood, there is something even more threatening to the longevity industry’s reputation: hype cycles.

Hype cycles occur when new technologies rise in popularity and dominate an industry. They are typically flashy, with an engaging user interface and attractive outputs. Positive experiences lead to social sharing, which leads to media coverage, which leads to companies or entire industries pivoting to the overhyped trend. In longevity, hype cycles threaten to overshadow progress. Hype cycles preventing life-changing technology from reaching the public is impermissible.

Understanding the hype cycle

The Gartner Hype Cycle offers a lens to understand hype cycles and technology. It has five phases: technology trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment, and plateau of productivity [1]. 

The five phases are a helpful framework for understanding new technologies’ maturity and market potential. Emerging technologies begin with a concept. Depending on the sector, this concept might stay in a “dev” stage, where researchers and engineers explore its possibilities and develop prototypes. Some technologies spend little time in this phase and immediately capture public attention. 

In phase two, the hype is at an all-time high. The sky is the limit, and speculation runs wild. This is the phase where you will likely see articles about “X technology in the industry” – for every industry. Some people change careers to work with the new technology. Others invest heavily in what seems like the next big thing. 

Hype doesn’t last forever. Phase three to phase five represent a downward slope for hype but a positive movement for integration. Developers set realistic expectations, and the first limitations make themselves known. It eventually reaches an equilibrium where companies integrate the technology or move on to other areas. The cycle might take months or even years, but it always gives way to new emerging technology and corresponding hype. 

If hype follows a set cycle, why does it keep occurring? In the social media age, word travels fast. Technology is no longer restricted to IT experts. Businesses or investors may recognize hype cycles for what they are, but individuals are typically not as discerning. It can be a dangerous trajectory with harmful implications.

Overhype threatens our health

In healthcare, hype cycles operate at heightened levels. Breakthroughs are not simply something new to explore; they can mean the difference between life and death. New and “shiny” healthcare breakthroughs also upstage the vital role lifestyle decisions play in general well-being and longevity. The WHO estimates 60% of health factors correlate to lifestyle [2]. These factors include diet, exercise, and other aspects like smoking, alcohol/drug use, and relationships. Society has a basic understanding of what makes something “healthy.” People widely understand the adverse health effects of smoking and drug use and know the value of limiting sugar intake and maintaining body weight. Despite this, the temptation to opt for a quick-fix medicine solution often overrules the decision to commit to a lifelong healthy lifestyle.

Luckily, current regulations exist to balance discoveries with proven results. But this wasn’t always the case. In the 1990s, physicians prescribed thousands of overweight people or people with obesity a new “miracle drug” from Wyeth combining fenfluramine and phentermine, fen-phen for short. People lost weight, but they also lost their lives. The drug was pulled from the market after a study showed it caused heart valve damage and even death [3]. 

This tragic case portrays the dangers of hype cycles in healthcare perfectly. Weight loss is difficult. Doctors, patients, and pharmaceutical companies are eager for new treatment options. Hype cycles cannot outweigh the importance of long-term studies and side effect monitoring. Patients are not the only ones at risk. The FDA ordered Wyeth to pull the drug in 1997, and the company paid more than $21 billion in lawsuit settlements to those affected [4].

Navigating hype as an investor

The fen-phen case is healthcare hype at its most extreme. For investors, it more often appears in everyday settings like pitch meetings or company valuations. Companies pursuing a specific technology can dominate pitches during a hype cycle, overshadowing less exciting but more well-grounded startups. They might attract significant investment and receive overvaluations that impact the entire industry. Not every hype cycle creates potentially dangerous situations. Instead, their poor performance stems from their lack of solid data. Think of the hype cycles around gene editing therapies (most of which failed), AI (and its often unnecessary applications across healthcare), and others. 

This does not mean all emerging technology-driven startups are not fit for investment. After all, the overhype phase always precedes enlightenment and productivity. Applying a critical lens to emerging technologies will ensure successful due diligence and informed investment decisions. 

Here is a list of questions to keep in mind when evaluating whether a startup is buying into hype or leveraging an emerging technology effectively: 

  • When did the company enter the emerging technology field or start using the new technology? Was it part of their business plan, or was there a sudden pivot?
    Understanding their motivation and experience with the industry can offer clues whether they are buying into a hype cycle or developing something for the long term. Ultimately, this differentiates potential visionaries from hype followers. A great example of the former is Insilico Medicine, which started to work with GANs for AI-driven drug discovery long before the current AI hype cycle. 
  • What is the experience of the team? Do they have a background in the technology?
    Biotech rarely sees random founders. The team will usually have some industry-specific experience. The right balance, however, is essential. Ideally, you should be able to see a combination of scientific excellence and market/business development understanding. The claim of an early-stage therapeutic startup not needing a strong business development skillset is not true. Even in the very early pre-clinical stages of fundraising, investor communication and future partner relationship building is crucial. The team should have business know-how and sector-specific knowledge.
  • Have they considered the regulatory implications?
    Many emerging technologies are not yet regulated. Building without regulations allows innovation but can cause problems if regulators introduce new guidelines. Clinical trials remain the gold standard for new therapeutics and treatment protocols. Going after orphan disease indications, on the other hand, remains a viable strategy. If done right, a therapeutic will be granted accelerated approval by regulators, thus reaching the market faster. 
  • Is their entire business based on a single technology?
    Overcommitting to a single vertical, especially an emerging one, is risky. In hype cycles, technologists still need to learn a new feature’s full potential or limitations. Building a business around the unknown is not a promising strategy. 
  • Where in the hype cycle are we?
    Self-awareness is essential. If an emerging technology is everywhere on social media, making headlines in industry outlets and the most prominent topic of discussion at conferences, it is likely in an overhyped stage. Checking with developers and trusted industry connections is an excellent gauge of what is hype and what is true transformation. 

Building a hype-proof longevity sector

An experienced team, proven industry validation, and solid business models hold power far beyond transient hype cycles. In longevity, allowing hype cycles to overshadow critical research is an endeavor we cannot afford. Our industry must tread lightly, meticulously strategizing its public rollouts. If driven by hype, a failure in longevity could inflict irreversible damage on its global perception. This is not just a consideration; it’s an imperative.

Investors are responsible for preventing this grim outcome. They wield tremendous power in shaping the sector and need to think sharply about the role of hype cycles in the growing longevity field. Emerging technology will flourish alongside longevity breakthroughs, but not at the expense of solid technology entering the market.

[1] https://www.techtarget.com/whatis/definition/Gartner-hype-cycle
[2] https://researchonline.gcu.ac.uk/en/publications/the-who-cross-national-study-of-health-behavior-in-school-aged-ch
[3] https://www.medpagetoday.com/PrimaryCare/Obesity/11645
[4] http://www.bloomberg.com/news/articles/2012-08-23/pfizer-asks-end-to-fen-phen-suits-linked-to-lung-ailment

Photograph: Midjourney