I had the good fortune to attend a venture capital forum recently and thought I would share what that cabal of capitalists is cooking up.  This particular forum was focused on medical start-ups.  The event consisted of very young companies doing presentations to some well-established venture capital firms who specialize in medical investments.

The simplest summary of the event is that Adam Smith was 100% right.  Both the entrepreneurs and the investors were totally dedicated to developing new medical services and products that would benefit you and me but they were doing it to make money.  The desire to make money (often disapprovingly but inaccurately labeled as greed) guided them to things that society needs and values.

There was much discussion of how many potential customers a company was projecting to serve with their product, what price they thought they would charge, how they would distribute their product, how they would assure low costs, and how they planned to mature their companies so that the investors would get their payout via selling the company or IPO.  Money, money, money.  Except, the answers to all the questions always led back to whether the product would actually help patients and doctors to improve health or lower the cost of providing health.  Why?  Because if the investors do not believe that the product provides a clear benefit to patients and doctors then there are no customers and no revenue and no reason to invest.

The founders of these companies were interesting people as all have invested their own money and enormous hours of time and personal expertise in the hopes of developing a company that can make money.  And, all know that the odds are against them succeeding.  But, they do it anyway.

You might say, “Who cares what these business people are doing to satisfy their greed?”  Well, one company that I was impressed by has developed a new breast cancer screening technology that is more comfortable for the patient than mammograms and can be used in your local doctor’s office.  Potential benefit to you: Your screening can be done more conveniently and comfortably with fewer trips to specialists and less wait to get your results.  I spoke with the CEO of this company and he was not some arrogant rich person with no compassion for others.  He was someone who could easily be anyone’s neighbor and had a passion for assuring that this technology saved lives.

Another company is developing a better method to provide single use injections that can be carried by the patient in a form that can be used immediately in an emergency with no preparation.  Think of people with severe diabetes who have an event and need an injection quickly but may have to do the injection themselves while nearing incapacitation.  The challenge being solved is how to make the preloaded liquid drug stable at room temperatures for long periods of time so that the patient can carry one device for months at a time in case it is needed.  There is somewhat of a competition occurring between large and small companies to get this type of product right.  I am glad that multiple groups are trying different methods and racing against time to succeed so that people who need this service can get it sooner rather than later.

To avoid the critique that these companies are primarily seeking retail-type services, there was a company designing improved protocols and software automation to accelerate the diagnosis of infections in ICUs and improve the selection of drugs to better assure that the right drug is chosen for the patient’s exact infection.  If they are successful, then lives can be saved, people can get out of ICU quicker, and costs will go down because ICUs are very expensive.  Everybody wins.  A good example of why capitalism is the opposite of a zero sum game.

The above are complex technologies and hundreds of thousands of dollars (maybe more than a million each) have already been spent before anyone could know or prove that the technologies would work.  Which ever companies turn out to be right in their product and how to deliver conveniently to customers will make a lot of money.  And, you or someone who know will benefit.

The people behind these innovations are not heroes.  They are business people with skill-sets and interests in the medical arena.  But, the results that the few who succeed will achieve can have heroic benefits to all of us.  And, most of these entrepreneurs proudly spoke about why they were passionate about the product they were developing.  They were aware of their multiple motivations and believed that they would generate more value and wealth by actually focusing on benefiting people first.

Oliver Stone really put the wrong words into Gordon Gekko’s mouth.  Greed is not good.  But, greed can motivate people to do things that are good.  Adam Smith was right.