Death And NanoString

What is death?

I’ve been thinking about this a lot today. A quick google search reveals this fascinating document which discuss how our understanding of death has developed beyond a simple binary classification:

Today we have a nuanced understanding of the process of dying, which in its crudest form may be subdivided into roughly six categories:

• Reversible and natural. For example, death may be part of the natural cycle of regenerating the body;

• Irreversible and natural. Death, for example, is part of ageing;

• Reversible and catastrophic. Having a cardiac arrest is reversible, in that the patient can be resuscitated. At this point the patient may be described as clinically but not medically dead;

• Irreversible, catastrophic and unambiguously fatal. Total brain failure that is not redeemable in an ICU environment and is characterised as medical death;

• Irreversible, catastrophic and survivable if technologically aided. Serious brain injury may not necessarily be fatal—persons affected by serious brain injuries survive and sometimes make remarkable recoveries in ICU;

• Irreversible, catastrophic and survivable if technologically unaided. Survivors of major brain injuries that eventually make it out of ICU may be severely mentally and physically disabled requiring life-long support and care. Those who survive the initial crisis and are eventually discharged from ICU and hospital care may have personalities that are barely unrecognisable from before.

Recently I’ve been talking about death in a different context. The death of a company. Apparently someone took exception to my use of the term death here… and suggested I didn’t understand the differences between a chapter 11 and chapter 7 bankruptcy.

This is no doubt true. But in any case I think with analogy to human death I consider what NanoString is going through a kind of death.

What’s A Chapter 11 Bankruptcy Anyway?

For this I call upon the prime Oracle of all lazy bloggers wikipedia:

In order for a Chapter 11 debtor to reorganize, the debtor must file (and the court must confirm) a plan of reorganization. In effect, the plan is a compromise between the major stakeholders in the case, including the debtor and its creditors. Most Chapter 11 cases aim to confirm a plan, but that may not always be possible.

If the judge approves the reorganization plan and the creditors all agree, then the plan can be confirmed.

So… in a chapter 11 bankruptcy the company cedes some level of control to the court and creditors. The body survives, the heart beats, respiration continues. The higher brain functions however…¹

Those who survive the initial crisis and are eventually discharged from ICU and hospital care may have personalities that are barely unrecognisable from before…

…strategic alternatives including a potential sale of all or part of the Company’s business to new owners who will continue the Company’s mission.

The next time you see us on the other side of that process, we will be a different type of company, even stronger than we are today.

Death And Companies

Death is awful. Anyone who has experienced the death of someone they love knows this. The modern mode of dying seems particularly awful… often alone in some awful hospital surrounded by strangers.

Perhaps it would be nice to live forever.

Omniome founder Swamy Vijayan once suggested the notion of “The forever company”². I’ve forgotten almost everything else about the concept. But the idea of a company that is forever vigorous and innovate is captivating and has stayed with me.

But I’m not sure it’s desirable…

“A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die and a new generation grows up that is familiar with it” - Max Planck

Perhaps companies too need to die to allow new and better technologies and strategies to enter the market. Perhaps a world where companies lasted forever would provide employees with limited options. Joining a startup seems like one of the few (though risky) ways of accelerating your social mobility in the modern world.

Would a world with fewer startups and where companies lived longer really be better?

Perhaps it isn’t the fact of death that’s the problem… more the manner in which companies die.

A Good Death

We might describe a ‘good’ death as one by natural causes, whereby a person dies peaceably in the fullness of time. This can be contrasted to the typical narrative of a ‘bad’ death, where a person might ‘suffer’ because they have a disease and choose to ‘fight’ for life regardless and ‘rage, rage against the dying of the light’

Maybe NanoString can be resurrected. Or perhaps they’re choosing to fight against the inevitable. I don’t know.

Either way it seems to me a good death for NanoString would be one that preserves the value they have created. Not one that simply maximizes investor/creditor return.

I would hope that a buyer can be found for the nCounter business. That’s a product that’s being used in clinical settings. And while its market isn’t growing it seems relatively stable at around $75M/yr for the last few years.

A new owner for that could extract what value remains while users and employees transition to other products and projects. Who knows perhaps it will maintain niche viability over the longer term!

Regarding the NanoString spatial business. Would giving it to 10X be something that happens in a bad death? Perhaps Nanostring management might feel that way. Like… donating a kidney to an enemy.

But I’m not so sure… if somehow in death you can find the potential for new life that seems like a good thing to me.

1. Someone brought up the point that the bankruptcy proceeds also stall the IP lawsuits and could be a purely strategic move. This would possibly be a bankruptcy filing in bad faith wouldn’t it?

They do seem to have received $47.5M in debt financing. So I assume the way the chapter 11 plays out is this: You take on debt, have not way of paying it back, file for bankruptcy, then restructure to pay it back. That stalls the lawsuits and gives additional runway to figure things out. But… figure what out exactly. The company is still running at >$100M loss and would need more to fund these lawsuits assuming they believe they can win… in the interim are users going to keep buying their instruments? Do they really have a chance to win against 10X? Will be interesting to see this play out. Even if they do succeed they will no doubt come out of this a very different company…

In any case, I’m going to take their statements at face value and assume that they are looking at selling off parts on the business. And in fact, speculate here that this might be the better thing to do for employees and users..

2. I’ve long since lost the link to the video, and I hardly remember the thesis. But the general notion of a company that you can keep vigorous, innovative and healthy over long periods of time has stayed with me. My apologies to Swamy if I’ve completely misremembered the video and it was actually about something entirely different.