Illumina has a fascinating foundation story that illustrates the early days of the biotech industry.
Two investors pulled together a small team of scientists who had been involved in other startups. The group formed a new company to take advantage of innovative research in technology.
Well, maybe the bare bones don’t sound so fascinating. But when you follow the chain of relationships, you learn how a company with revenue of over 3 billion dollars came about.
But let’s start with the basic question, and then we can get to the interesting stuff.
Who Founded Illumina?
Biotech investor Larry Bock and his associate John Stuelpnagel licensed the initial technology that would underpin Illumina from Tuft University professor, David Walt.
They recruited two more scientists as co-founders: geneticist Mark Chee and chemist Tony Czarnik. Illumina was incorporated in 1998.
Meet Serial Start-Up Founder Larry Bock
I’m going to try to tell the Illumina foundation story in chronological order. That means I start with the late Larry Bock, a legendary founder of biotech start-ups.
Larry Bock was a New Yorker who majored in biochemistry in the early 1980s. His mother was a chef, and his father was a stockbroker who recognized the early promise of the new biotech industry.
Larry Bock went on to business school at UCLA and worked at several venture capital firms.
Larry Meets David Walt, Future Co-Founder Of Illumina
During those early years of his investment career, Larry Bock was interested in a fiber-optic technology developed by a university professor named David Walt.
Remember that name, as he will later be one of Illumina’s co-founders.
But at this time, Bock and his colleagues considered Walt’s technology to be too early-stage for investment and they passed on.
Larry Bock’s Ten Biotech Star Startups
In 1987, Bock joined a small investment group with funds to create ten biotech ventures within five years.
The results were stellar. All ten went public with excellent returns on the initial investment. This made Bock’s reputation as having a sharp eye for talent.
His strategy was to gather good scientific, operational, and business people together to form an advisory board. Then he’d go find a top scientist with developments and patents in innovative applications of biotechnology.
This is how Bock explained his process in an interview in 2014:
You form an advisory board, find a scientific visionary, you have a company.Interview, 2014
Hey, if it was that easy – then everybody would have done it back then. And some did, but nobody had the number of successful hits as this guy.
Most of the ten companies were eventually bought by other ventures, so the names may not be familiar. I’ll mention two there because they are a tangential part of the Illumina story.
Pharmacopeia was one of the notable successes for the investment firm. Bob Grubbs, who would later win the 2005 Nobel Price in Chemistry, was one of the founders of this biotech. He will crop up again in this story.
Caliper Technologies was another successs. Larry had recruited an intern named John Steulpnagel, who he quickly promoted to associate. Steulpnagel was heavily involved in Caliper Technologies. And he would later be a co-founder of Illumina.
Larry Recruits John Steulpnagel, Future Co-Founder Of Illumina
When Larry Bock looked for interns he usually went to his old alma mater, the business school at CalTech. John Steulpnagel was a veterinarian with an interest in investment and biotechnology.
Bock recruited Steulpnagel as an intern in his first year of business school. Steulpnagel worked through the summer for Bock, who was so impressed that he suggested his intern not return for his second year at school.
Steulpnagel preferred to “double-job” by continuing to study remotely while working for Bock’s investment group. Despite the workload, the ambitious young man closed out his studies as class valedictorian.
As I mentioned in the previous section, Bock was heavily involved with founding Caliper Technologies – one of the ten stellar start-ups.
A Rare Pushback For Larry Bock
Up to 1997, Larry Bock seemed to be living a charmed business life. Every venture turned to gold, and every door was opened.
Nate Lewis and Bob Grubbs, renowned chemists at CalTech, were developing a new chip technology that could hold a high volume of sensors.
This is the kind of technology that would eventually be used by Illumina, but Bock wasn’t thinking of genomics at that time. The sensors could identify a wide number of materials.
Bock and Steulpnagel wanted to license the CalTech technology.
Remember I mentioned future Nobel laureate, Bob Grubbs? Larry Bock already had a relationship with Grubbs, who was a founder of one of the ten successful startups. Bock could reasonably expect another joint venture.
But Lewis and Grubbs turned him down in favor of a company backed by a different investment venture. That company was called Cyrano Sciences, after Cyrano de Bergerac of the legendary nose.
Their technology was branded as Cyranose (still makes me laugh).
The idea was that it was “nose” technology that could sniff out different materials.
My take from an interview with Bock was that the rebuff stung a little (this is a transcript).
Yet, Bock and Steulpnagel were still determined to start a venture in this area. So, they looked for competing technologies in the same space.
Bock looked again at the work of David Walt at Tuft University, whose fiber-optic technology been too early stage for his liking a few years previously.
Back To David Walt
About five years since David Walt had first met with Larry Bock, his fiber optic sensors were greatly matured. Bock approached him again, and Walt agreed to license his technology.
At this point, Bock was looking for a general solution, or “nose”, that could detect any pattern. He hadn’t settled on a specific industry for use.
Enter Mark Chee.
Larry And John Meet Mark Chee
Mark Chee had been a leading genetic scientist at Affymetrix, the big dog in genetic chip technology in the late eighties.
Bock and Steulpnagel were looking for a scientist to join Caliper Technologies, one of the ten start-ups. As Caliper’s business was based on chip technology, Chee’s role at Affymetrix looked a perfect fit.
And Chee was recently disappointed that his employers wouldn’t support his efforts to start a new venture. When Larry and John came calling in early 1988, he was ready to listen.
Chee wasn’t so interested in joining Caliper Technologies, but he struck up a strong connection with Steulpnagel. They shared a house for a while, and put their heads together to think about a biotech venture based on David Walt’s technology.
Larry Bock said later that it was Mark Chee who spotted the opportunity in genomics.
Larry And John Meet Tony Czarnik, Future Co-Founder Of Illumina
Before Bock and Steulpnagel had determined the direction for their nose technology, they met with Tony Czarnik.
Czarnik was a senior chemist at a startup called IRORI, which was also based on chip technology. Like Chee, he looked a good fit for their new venture.
His first meeting with Bock and Steulpnagel was in late 1997, and he expressed an interest in being involved.
Over the next few months, Mark Chee was brought on board.
There are some conflicting points between accounts given by Larry Bock and Tony Czarnic about the founding of Illumina.
Bock said that Chee was behind the pivot into genomics. In contrast, Czarnik wrote in a piece on Linkedin that Steulpnagel decided to pursue a genomics application despite Bock thinking it was a bad idea.
Either way, both Chee and Czarnik brought considerable scientific experience to bring the investors’ plans to fruition.
Tony Czarnik was offered the role of Chief Scientific Officer in the new venture.
The Naming Of Illumina
At this point in early 1998, Larry Bock and John Steulpnagel had their team of founders in place.
David Walt would take a senior advisory position in the new company, which lasted for over a decade.
Bock asked Steulpnagel to act as interim CEO until he could fill the position. Jay Flatley would be recruited about eighteen months later, and Steulpnagel would switch to COO.
Meanwhile, the interim CEO had to prepare the paperwork to incorporate a new company. So, he needed a name.
He chewed over some options with Mark Chee and Tony Czarnik. It was John himself who came up with the name “Illumina”.
Until I was researching this article, I assumed that the start-up paid a marketing firm to dream up a name.
I also wondered why on earth a biotech company would accept a moniker that evokes crazy modern conspiracy theories. I’m talking about the Illuminati.
Czarnik would later write that Steulpnagel got briefly worried about this but it wasn’t considered a problem. I doubt a marketing firm would have put it on the table!
Did The Five Founders Stay With Illumina?
Let’s take a look at how each founder fared with Illumina. Once again, we’ll start with Larry Bock.
Larry Bock was a serial investor but he kept involved with Illumina for a few short years. Unfortunately, he developed a medical condition and chose to scale down his business activities.
In 2004, he “checked out” as he put it in an interview and focused on his family and travel.
Over the years, he invested in several startups and gave occasional advice to founders. But he didn’t get pulled back into day-to-day decisions.
In 2014, he was adamant that he’d stick to this new direction to his life. He referred to other investors who stepped away but were later drawn back into the game. Bock swore he’d be different.
I’m not coming back. I’m having too much fun.Interview, 2014
Sadly, Bock was diagnosed with cancer the following year. He died in July of 2016.
Steulpnagel stayed in a leadership role with Illumina for about ten years.
He also co-founded several other companies in the genomics space.
David Walt went on to have the longest association with Illumina of all the co-founders.
He continued as a scientific advisor while continuing his prestigious academic research at various universities.
Mark Chee was Vice President of Genomics and Informatics at Illumina.
He went on to found Prognosys Biosciences in 2005. Ten years later, he co-founded Encodia with Ken Gunderson, who was one of Illumina’s first hires.
Tony Czarnik was Chief Scientific Officer at Illumina from 1998 to 2000. He moved on in acrimonious circumstances in 2000 and won a lawsuit against the company for wrongful termination.
Czarnik has written about the circumstances in an article available on Linkedin. It’s a brave and open account. He is frank about his troubles with mental depression while working at Illumina.
The courts found in favor of his suit for disability discrimination. That includes an appeals court.
I found Illumina’s response in 2005 to be extraordinary. The Illumina lawyers had this to say about losing their case:
Companies are at a severe disadvantage when cases like Czarnik’s are tried by juries. Almost no juror has been an employer, while virtually all have been employees who at some time felt wronged by a boss, so they identify with the plaintiff.Chemical & Engineering News, 2005
I hope a lot has changed since then in terms of corporate attitudes. This was a high-profile company that was found to discriminate on the grounds of mental health. If they made those kinds of statements now, they would rightly be dragged over hot coals.
On a more upbeat note, Czarnick went on to co-found several tech companies. Larry Bock agreed to be a scientific advisor on Protia, which was later sold.
Illumina And Consumer DNA Companies
Most of our readers are interested in consumer DNA testing for genealogy and ancestry research. Illumina played a massive role in making these services affordable. All the big DNA testing companies use Illumina’s chip technology.
But some companies are even more closely intertwined with Illumina. I mention briefly in an article on who owns 23andMe that the chip company was an investor in the 2015 funding found of its customer.
However, Illumina is far more involved in the ownership of a popular DNA company that doesn’t sell its own DNA kits. GEDmatch accepts the upload of DNA results from the major DNA testing companies and provides a suite of free and premium analysis tools.
Our article on who owns GEDmatch goes into its original and current owners. GEDmatch was taken over by a company called Verogen. Illumina set up Verogen in 2017 with a co-owner, an equity investment firm. Our article on who owns Verogen goes into more detail.