Molecular Dynamics was thrilled. The esteemed Lee Hood had just purchased one of the start-up company’s DNA microarray scanners, which measure gene expression in biological samples. On the eve of an important investor conference in January 1998, Molecular Dynamics issued a press release touting this external validation of its technology. Hood also apparently agreed to help the young company further develop its technology.
It was a publicity coup for a young company seeking to woo new customers and investors. “The University of Washington has the expertise needed to refine and push the applications of our technology, which will ultimately benefit our other program partners as well as future system users,” said Molecular Dynamics CEO Jay Flatley. A shrewd businessman, Flatley later left to run Illumina, which became the dominant DNA sequencing company of the early twenty-first century.
Hood hadn’t been very shrewd. A competitor, Rosetta Inpharmatics, saw the news and hit the roof. Hood had cofounded Rosetta the previous year. He’d licensed Alan Blanchard’s ink-jet oligonucleotide printing technology out of his UW lab to create the start-up, which focused on computational analysis of gene expression data. “Rosetta was completely blindsided by the release and dismayed to find one of its founders in bed with a competitor,” an internal memo said. Rosetta asked Hood to resign from its scientific advisory board. Hood had made the purchase over Christmas break, when most everyone else at UW was on vacation.
Within a couple of years at the university, Hood was creating chaos in his administrative role as chair of the Department of Molecular Biotechnology.
Accounting was a nightmare. To pay department bills, Hood tended to reach into one of his two “discretionary” accounts—the Gates funding, or his Caltech royalty stream. It was nearly impossible to keep track of where all the money came from, what it was spent on, and how everything was commingled. An internal audit in 1994 found “systems weaknesses that could cause unallowable expenses to be charged to sponsored agreements.” Yet during university budget cuts, Hood asked administrators for special treatment. “Cuts should be focused on eliminating mediocrity and not on cutting everybody, good and bad alike,” Hood wrote to the UW dean of medicine.
Impatient over securing lab space for an ambitious plant-genome sequencing project, Hood hired his own agent to negotiate over a particular space. It turned out the university also was negotiating for that space—for Hood. Essentially Hood, in his haste, created a bidding war against himself. Previously, he had berated a university real-estate official for dragging her feet. “I got a call from Lee Hood today, who is ‘very’ angry that we haven’t found lab space for him yet,” the real-estate official wrote in a memo to her boss. “He demanded that the UW live up to its commitment to him. . . . I could barely get a word in edgewise. . . . I explained that there’s a shortage, and it’s highly competitive. . . . Dr. Hood’s anger at me, and the university, for ‘doing nothing’ was unwarranted.”
The state passed an ethics law in 1994 to prevent public employees from using public resources for personal gain. Hood complained that it would virtually shut down entrepreneurship among faculty members. “A UW professor would have to resign before accepting the Nobel Prize,” Hood exaggerated.
Inside his university department, Hood clashed with Olson early and often over technical and strategic questions. Above all, their dramatic clash of personalities loomed. One man radiated frenetic energy and sowed chaos; the other was calm and craved order. Olson couldn’t stand the lack of meticulous financials, records, and experimental data. He was almost “morally offended” by Hood’s style, fellow scientist Lee Rowan said. Olson was a classic academic scientist. He didn’t care for the way Hood spun wonderful tales for financiers, or for his brand of entrepreneurial science that led to so much overpromising. “The more people knew about the particulars of what [Hood] was talking about [in genomics], the less tolerant they were of the way he turned it into an almost political-style message,” Olson said. “It’s a message that’s evangelical and brings in converts. The Lee Hood message wasn’t moored in the messy realities of experimental biology. It kind of floated above that.”
Time and again, scientific reviewers tore Hood’s lofty grant proposals to shreds. One proposal for a three-year NIH grant was audacious: sequencing five megabases of DNA in the first year, twenty-five in the second, and seventy-five in the third. At the time of the application, the Hood lab had completed only two or three megabases. “The NIH totally shit-canned that grant,” Rowen said. “But they wrote a lot of thoughtful, helpful criticisms. NIH came back to us and said, how about two megabases, five megabases, and eight megabases? Even I thought we could do more. We wrote the grant for three, six, and twelve. They gave it to us.” A reviewer from the National Science Foundation was skeptical of the claims in another proposal: “It is impressive to say that a new low-pass sequencing strategy will be developed with a 100x cost/time benefit over current methods, but nothing is added to even hint at how this claim might be realized, or how it improves on the prior low-pass gene skimming strategies. The rest of this section continues in the same ‘trust us’ vein.”
Sloppiness also cost Hood in his first major grant proposal for a federally funded UW Genome Center. In 1995, after a site visit by the National Institutes of Health, one reviewer wrote: “When asking for $67 million over five years, one would rather like to see some convincing reasons to spend it.” The reviewer criticized the grant proposal as a collection of “nearly unconnected, separate projects” with “no sense of compelling reasons to suggest why the proposed methods are the best way to proceed.”
Hood was advocating—both in the grant proposal and in public—ways to speed up gene sequencing. To enable his brand of high-speed shotgun sequencing, Hood embraced the use of bacterial artificial chromosomes, developed by Melvin Simon’s lab at Caltech. Short pieces of human DNA could be put in the BAC—an artificial DNA construct placed in a bacterial cell. BACs were handy because they could be used to amplify the short pieces of human DNA before they were fed into the sequencer. Another advantage: BACs could be used to build long cloned stretches of DNA, fed into the machines simultaneously. By using this technique, researchers could proceed across long, repetitive regions of DNA and still be confident that they were aligning the correct matching ends. Other cloning methods used to prepare samples worked only with short stretches of DNA. These sometimes failed to remain stable during a run through the sequencing machine. Longer term, Hood hoped the BAC method could also allow researchers to skip the tedious work of “mapping” DNA. In the early years of the genome project, researchers had to first line up stretches of DNA into their proper position on chromosomes, then sequence from that point of reference. But if scientists could feed longer stretches of DNA into the machines and properly align overlapping ends of sequences, they could assemble a whole genome faster.
The BAC method was Hood’s style: big, bold, and fast for its day. More conservative scientists, including Olson, preferred to stick with the tried and true. Olson had previously developed a technique that used yeast artificial chromosomes (YACs) for cloning segments of DNA before sequencing. These DNA constructs, which operated in yeast cells, could also do the job of preparing many copies of human DNA segments for sequencing. The method was meticulous, proven, and established.
This new BAC method at first seemed sloppy to Olson. What good was a genome if it wasn’t accurate? Hood shot back: What good was a genome if it took forever to get it? When it came to the Human Genome Project, promises had been made to Congress and the public about delivering the genome on budget and on time. The technology needed to improve in a hurry. That meant going out on a limb, tweaking prototypes, trying new methods. Olson, who knew the technical aspects of sequencing inside out, appreciated the practical argument. He’d written an influential editorial in Science in October 1995 titled “A Time to Sequence.” (“For Hood, it was always a time to sequence,” Olson said with a chuckle, years later.) Olson acknowledged some of the technical debates, saying there was a “healthy competition” between those advocating BACs and those who preferred another system. It’s never easy to design an airplane while flying it at the same time.
But as the NIH grant reviewers visited Hood’s lab to consider his 1995 proposal for a genome center, they saw too much disarray. They also knew of the simmering feud between Hood and Olson. “It is a bit depressing that such an impressive collection of bright and talented people could not coalesce better,” one reviewer wrote. “If this is the best that can come out of an academic group that wants to be funded as a genome center, it is no wonder that the NIH-funded genome centers have performed so poorly.”
They rejected the initial grant proposal.
Two years after joining Hood with so much fanfare and excitement, Olson began to distance himself. In 1994, he stopped sharing financial information about his grant proposals with the department chair. Characteristically, Hood didn’t confront him about it. Other administrators complained about Olson’s secrecy and Hood’s unwillingness to address conflict.
By the summer of 1996, Olson was at the end of his rope. He approached Paul Ramsey, then an assistant dean of the medical school, about transferring to another department. Olson offered to surrender some prime lab space in the Health Sciences complex and carry on in Fluke Hall—across campus from Hood’s group. Olson wanted a clean break. He didn’t want to see the man anymore. In a memo to university administrators, Olson wrote:
It is obvious that Hood’s activities and mine will be most harmonious if we restructure our interactions along the principle that “good fences make good neighbors.” . . . The current situation is alarmingly unstable. New problems arise almost weekly. The sooner and more decisively we move from ad hoc management of these problems . . . the better the chance of long-term success.
“I was a [principal investigator] with grants worth millions of dollars a year,” Olson said years later. “When you’re operating at that scale, you can’t deal with uncertain administrative arrangements.” Hood, for his part, remembered personality as the main problem, more than managerial strife. “Maynard . . . was interested in doing science in his own way,” Hood said. “Maynard is really careful, and calculating and precise, and I’m much more flexible and loose and give people a lot more freedom. He didn’t think that was a good idea.”
Olson tried recruiting away some of Hood’s postdocs and technicians, promising sanity and order. “You had the Olson camp and the Hood camp,” said Todd Smith, a former postdoc who initially sided with Olson but switched back to Hood. “Most departments don’t have anyone who ever talks to Congress. We had two people. And they disagreed.”
Hood looked to his most powerful behind-the-scenes fixer, the medical school dean Phil Fialkow, to help. “It is important Maynard be told clearly his behavior is strikingly inappropriate and that it should cease,” Hood wrote to Fialkow. Just a couple months later, in November 1996, Fialkow died. The new dean of medicine, Paul Ramsey, hadn’t been part of the Hood welcoming committee. He hadn’t made Hood any promises. Olson’s transfer was completed that same month.
As the department splintered, many people felt torn. About Hood, they tended to feel both intense repulsion and attraction. There was the chaotic management style, but also the ideas, enthusiasm, and manic energy that continued to pour out of the man. Without a doubt, he inspired many to do their best creative work. People wanted to be a part of that. For example: Graduate students and postdocs typically stay in a lab for a few years. They try to get at least a couple of solid published papers to their name, and then they leave to establish their own identities as independent researchers. But Hood’s force of personality—and stream of exciting, fully funded projects—was magnetic, especially for people who didn’t relish the prospect of raising their own money. Tim Hunkapiller stayed with him almost twenty years. Lee Rowen stayed longer.
Todd Smith was one who couldn’t stay away for long. When he joined Hood’s lab, he had a PhD in medicinal chemistry from the University of Washington, plus five years of biotech industry experience. He spearheaded a collaboration with UW geneticist Mary-Claire King in which they sequenced the BRCA1 gene. King was already famous for identifying the gene and its hereditary role in increasing a woman’s risk of breast and ovarian cancer when mutated. Smith was excited about the high-profile project. He also was interested in computers, using software to analyze DNA. He had a desirable set of skills for the department Hood was building.
But after three years, in spring 1997, Smith was weary of the chaos. He joined a group of four disillusioned postdocs who sided with Olson. Then he got a job at a start-up backed by Kleiner Perkins Caufield & Byers, the venture capital firm. Boldly, Smith took two UW colleagues with him. “Hood was mad that I left,” Smith said, “and even madder that I took people with me.”
One month later, Smith realized joining the start-up was a mistake. He started over with his own company, called Geospiza. Hood wasn’t one to hold a grudge or say “I told you so.” Instead, he hired Smith’s new company to do $65,000 worth of work on a genetic-data visualization project for the National Science Foundation. It was a small contract, but it was a generous move that provided validation for Smith’s start-up. It helped Smith raise further investment.
As he learned to become a manager, Smith saw the good and bad in Hood’s freewheeling style. “He’s the shark in water; he keeps moving forward,” Smith said. “A lot of leaders have this, that really central drive. All he wants to do is science. That singular passion, and focus, is his defining characteristic. It also leads to all the turmoil that goes on all around.”
The rejected genome-center grant and the split with Olson weren’t going to keep Hood from moving forward. He hunted for a new angle in genomics. Drawing on his background in immunology, Hood rebounded from the initial NIH grant rejection and won support for a niche genome sequencing project on chromosomes 14 and 15, which together represent 6–7 percent of the human genome. Lee Rowen was overseeing a small group focused on sequencing T cell receptors, the major histocompatibility complex (MHC) of the immune system, and long regions of chromosome 14. Those were interesting projects with legitimate medical interest because MHC was involved in tissue compatibility for human tissue transplants. T cell receptors were important to adaptive immunity—the body’s ability to fight off infections. But these were still fairly small niche projects in the grand scheme of sequencing.
Hood had his eye on a bigger prize, something that would make a splash. Something that could compete with a new big name in science: Craig Venter.
The biggest promise of DNA sequencing—completing the human genome—inched along. For Venter, a daring entrepreneur and former NIH scientist, it was too slow. The federally funded project, he said, was bogged down by bureaucracy. The NIH’s own grant reviewers said as much. Venter had quit the NIH in 1992 to start his own institute, insisting there were better ways to approach the Human Genome Project. By 1998, he took charge of a company to prove it: Celera. He claimed he could sequence the entire human genome in half the time—at a tenth of the cost—with private money instead of public money.
Those were fighting words.
Generations of scientists had been supported by federal funding. Classic academics, pursuing fame and Nobel Prizes, didn’t appreciate the implication that their work was boondoggle. Researchers were peeved that someone would try biting off the hand that fed them. In Congress, the political parties had set aside their rancor to support biomedical research. US policy makers were searching for advantages in a globalizing economy, and they saw a domestic source of strength in biotech. As the Human Genome Project gained momentum, a deal was struck: Republican House Speaker Newt Gingrich and Democratic President Bill Clinton agreed to double the budget of the National Institutes of Health over five years, from 1997 to 2002. If private money swooped in and showed up everyone else, public support for such federal budget increases might evaporate. Yes, Hood and others had raised private money for their research, but only to make the pie bigger. They had never pitted one funding source against another like this.
Plus, private money rarely had the public’s interest at heart. Profit, not knowledge, was the main motivation. In the public project, the completed genome would be free and available to all researchers. Celera spoke of keeping it private and selling access to pharmaceutical companies. This sparked a great philosophical battle.
Venter was on a crusade, and his timing was flawless. The economy was booming in the mid- to late 1990s. Millions of people logged on to the Internet for the first time. Optimistic visions for the future were everywhere in the popular media. Investors were seeking the next big thing after the dot-coms. They poured billions of dollars into aspiring genomic companies like Celera. The market for selling private DNA code was thought to be immense.
The battle lines were drawn; the competition between public and private interest was on. “Darth Venter” became the most hated man in science.
But not to Lee Hood. He could relate to Venter in some ways. He knew what it was like to imagine a better way of doing things. To pursue an idea with single-minded tenacity. To be a showman. To be skilled at raising money. To relish proving the critics wrong.
As Maynard Olson acidly observed years later: “Lee Hood is kind of like Craig Venter, but with real accomplishments. Craig Venter skipped over the accomplishment phase of his career. I wouldn’t accuse Lee of that.”
Like Venter, Hood in the mid-1990s was increasingly impatient with the cautious, incremental nature of the federal funding system. Hood sometimes sided with Venter in technical debates over how best to kick-start the genome project. After reading about Venter’s 1995 triumph with sequencing Haemophilus influenzae, Hood urged one of his scientists, Greg Mahairas, to keep improving the BAC technique—as applied to plants. In collaboration with Venter, Hood scraped together funding from the Department of Energy (which had a long-standing interest in DNA sequencing) for a pilot project. Hood, Venter, and Hamilton Smith coauthored a May 1996 paper in Nature advocating large-scale shotgun sequencing as a way forward in human genome sequencing.
Mainly, though, Hood saw Venter as a competitor to be beaten.
Hood wasn’t trying to race Venter directly on the Human Genome Project. While he paid attention to it, and oversaw a small UW genome center that sequenced parts of chromosomes 14 and 15, Hood never got involved in high-level day-to-day management of the international consortium. That work was largely done by Francis Collins, Eric Lander, John Sulston, and Robert Waterston. Hood remained mostly on the periphery, thinking about strategies for sequencing and assembly, as well as relentlessly pushing new technology development. Sequencing technology was only one part of his grand plan for interdisciplinary biology at UW, which included proteomics, gene expression, cell sorting, and bioinformatics. He had plates spinning in all of these areas.
Still, he wanted to make a splash in genomics. At the time, the federal government had concentrated much its funding on centers at Washington University in St. Louis; the Whitehead Institute in Cambridge, Massachusetts; and Baylor College of Medicine in Houston. But there was more work to go around, sequencing not just the human genome, but other species as well. Hood had an idea: rice.
It was an odd choice for a career-long human biologist. It was an odd choice for a medical school. But the Department of Energy pilot project with Venter, focused on sequencing plant genomes, had done well. Hood secured $15 million more from the Department of Energy to see how far Mahairas could take it. Scientifically, plant genomes were interesting. And now Mahairas had ironed out some nagging technical issues with BAC sequencing. It was getting exciting. “We started thinking ‘OK, we can do this on any large genome,’” Mahairas said.
Huge agricultural businesses had both money and motivation. If they knew the DNA sequences of cash crops like rice, corn, soybeans, and sorghum, it could be an important step toward engineering in desirable traits, like drought or pesticide resistance. Hood knew some people at Monsanto who wanted a piece of the genome action. Hood’s ties to Monsanto dated to the early 1980s at Caltech, when the company had sponsored research on the DNA sequencer. By the late 1990s, Monsanto was interested in rice.
Rice was an enticing opportunity. Half of the world’s population counted on it as a staple food. Wheat was an important crop, too, but a larger and more complex genome than rice, thought to be beyond the reach of sequencing capabilities at the time. The rice genome was both important and attainable. It was the third-largest genome project undertaken at the time, after human and mouse. Whoever got the rice genome first would make the history books.
Monsanto was ready to pounce. Hood was ready to steal thunder from Craig Venter. There was talk of a ten-year partnership. In July 1998, Hood laid out a plan to Monsanto CEO Robert Shapiro:
There is a unique opportunity for Monsanto to take a major leadership role in plant genomics by carrying out a low-pass sequence analysis of the entire rice genome. There is an enormous opportunity to garner significant intellectual property (e.g., patenting control regions as well as many potentially important undiscovered genes). If we do this, the [UW] and Monsanto will have to create an effective pipeline and analytic tools for handling enormous amounts of data. This is a major step beyond the Perkin-Elmer/Venter proposal to sequence the human genome.
An international consortium of researchers had a head start. But with the BAC method and Monsanto money together under one roof, Hood thought he could chase them down from behind. Monsanto wrote a $30 million check. It was off to the races.
Greg Mahairas had been working in a small room on the main campus—fine for small-scale experiments, but no place for an industrial-scale assault. Lab members competed for time to use the sequencers. That would never fly for a project that was bound to be a full-throttle competitive race. Hood found a facility off campus in Seattle’s Queen Anne neighborhood, a twenty-minute drive from the university. In less than three years, it ballooned into the biggest operation Hood had ever managed, growing from five people to 275 at its peak. The facility brought in almost $100 million of sponsored research.
The scene was chaotic even by Hood’s standards. Mahairas, the primary manager of the site, was surprised one day to see thirty-five new sequencers show up at the loading dock. About 120 such machines ran full tilt at the peak. The prize: the sequence of a variety of long-grain rice cultivated in Japan called the Nipponbare. “It was the biggest and the baddest,” Mahairas said. “It was insanity. It was a huge competition.”
Once, when Mahairas was at the office about 1:00 a.m., he heard a knock. There was Hood, tapping on his window. Hood didn’t have a key to his own building. Along with Hood in the middle of the night were a couple of Nobel Laureates—Phil Sharp of MIT and David Baltimore of Caltech. They wanted a tour.
By 1999, DNA sequencers were no longer Model A Fords. Applied Biosystems had figured out how to build sequencers that handled samples in parallel, through capillary tubes, instead of the previous slab-gel method. “High-throughput” sequencing was like trading in your dial-up Internet modem for fiber-optic cable. Technicians couldn’t keep up with the data coming from the machines. Hood’s lab set up a virtual private network to ship DNA data every night to Monsanto headquarters in St. Louis.
Sequencers ran twenty-four hours a day, seven days a week. Hood assured his financial backers that his team could hit aggressive timelines. So when something broke, it needed to be fixed immediately. The frenetic pace also led to carelessness in handling samples. At one point, glass slides got scratched, which led to botched sequencing runs, wasting $50,000 each. Mahairas spent $10 million to replace all the glass at once.
Just like that, a multimillion-dollar decision was made while Hood was out of town. Mahairas knew the boss would support him. The university was another matter.
The UW Board of Regents asked Hood to testify at one meeting to explain why he bought $5 million of sequencers in one fell swoop. At one point, a special department administrator was brought in to try to understand what was going on and get the rogue operation under control. “We were perceived by the whole medical school as crazy,” Mahairas said.
Olson could only shake his head. “I never set foot over there,” he said. “I had too much on my plate, and I could see it wasn’t going to work. Anyone who knew anything about genomics realized it wasn’t going to work. There were no experienced scientists.”
The rice genome project flew off the rails near the end of 1999. Monsanto was under fire from European activists, upset with its work on genetically modified organisms. With the company under attack, it pulled the plug on the genomics project. Mahairas recalls being told that he had six months to wind down the operation and lay off the entire staff. Hood insisted that the project, about 80–90 percent complete, needed only about three more months of financial support to wrap up. Monsanto gave him no wiggle room. To the horror of all, Monsanto exercised its right to take all of the sequence data from the project for its proprietary purposes. That meant the researchers who had worked so hard wouldn’t have access to the data needed to write papers that could advance their careers.
It was as if an entire, $100 million biotech company was born, raised, and died in the matter of two years. “People were so upset,” Mahairas said. “There were things disappearing. One night, someone goes and takes a crap right in the middle of the bathroom floor.”
Hood had courted Monsanto. Hood had agreed to the insane deadlines. Hood had made promises he couldn’t keep, at least not without creating an environment where $10 million got flushed in a day and people worked around the clock. Hood was ultimately in charge of the project. Yet he didn’t take even half of the responsibility for its spectacular failure:
If Monsanto hadn’t had that tragic GMO challenge just as we were going toward completion of the rice genome, we would have had it done first. We had it 85–90 percent done. It was a crisis the likes of which I never saw. . . . They just shut us down completely. That was probably a year and a half’s work, where we never got one publication out of it. Monsanto swept away all the data.
Olson, by this time running his own NIH-funded genome center, hired a few of the people who had been laid off. Hood said he tried to help people find other jobs, but “there was only so much I could do.”
The nightmare had all started with a dream.
Hood wanted to create his own institute within the university—an institute unburdened by the incremental thinking of the federal government. He’d been thinking about it seriously since late 1996 and early 1997. If Hood raised $100 million to $150 million in private money, he could create an endowment that threw off investment earnings every year, which he could spend with no strings attached. He could more readily pursue his most audacious long-term goals. Goals like systems biology, the attempt to understand how entire biological networks operate in a symphony—way beyond what could be learned from studying just one gene or protein at a time. Nobody in the NIH peer-reviewed grant-funding system was ready to go out on a limb for that just yet. Too much mutual back scratching went on there, Hood thought, among scientists devoted to supporting their small-scale research projects.
Hood also was tired of having to answer to the dean of medicine. He never got along with Paul Ramsey.
One time, shortly after Ramsey succeeded Fialkow as dean, Hood wanted to hire a surface chemist, someone expert at studying chemical reactions at surfaces and interfaces. Ramsey asked why a medical school needed a surface chemist. Hood gave a brief explanation.
“I don’t buy it,” Ramsey replied.
“Well, I’m going to use my Gates endowment money to hire him,” Hood shot back.
“I’m not going to let you use the money to do that,” Ramsey replied, and walked out.
Hood fumed. The dean had that power, but the previous dean had always given Hood latitude. Ramsey was running a tighter ship. The surface chemist went elsewhere.
Technology transfer was another source of conflict between Hood and the university higher-ups. The tech transfer office is responsible for seeking patents on university inventions, building start-up companies, or licensing the intellectual property to businesses that develop products. Hood (and Caltech) had made millions of dollars this way, dating to the formation of Amgen and Applied Biosystems.
Hood believed the UW tech transfer office was too cautious, bordering on incompetent. Afraid of being snookered into giving away a golden goose by savvy industry deal makers, inexperienced university staff swung too far in the other direction, holding out for rich licensing terms that businesspeople considered onerous. At a public university, the office also had to be attuned to political perception—avoiding any scandalous accusations that public resources were being used for personal gain. Hood wasn’t the only faculty member who saw dysfunction in the way the office worked. He was just the most visible critic on campus.
If he had his own institute, Hood would be free from all that. He could raise money from whomever he wanted, bring in the exact people he wanted to carry out his mission, and license out technology on his own terms.
Institutes affiliated with universities were not unheard of. Hood studied the model established by the Whitehead Institute—an endowed, independent institute near MIT. Whitehead director Gerry Fink told Hood that an independent institute needed to be nimble, flexible, and free of oppressive micromanagement from its big academic brother. The Whitehead gave its scientists freedom to pursue their own projects. They maintained prestigious faculty positions, complete with access to students at MIT who could carry out experiments. But MIT and the Whitehead were different animals from UW. They were private institutions. They weren’t accountable in the same way to state lawmakers and taxpayers.
Hood was setting himself up for a battle.
UW administrators were not gung ho about the idea. But they did make an effort to accommodate Hood, according to voluminous departmental records in the university archives. Hood had attracted a lot of talented young scientists, raised a lot of money, and brought a lot of international cachet to the university. It was hard to live with him, but they didn’t want to lose him.
Hood barreled ahead with fund-raising. He had no trouble getting meetings with high-level businesspeople.
John Doerr, the venture capitalist at Kleiner Perkins Caufield & Byers, suggested meeting executives at Microsoft, Oracle software billionaire Larry Ellison, and others. Within days, Hood was on a plane to see Ellison. “It was a great visit yesterday,” Hood wrote to the Oracle chief in February 1997. “Your house, as you know, is spectacular. I hope I will get to see the new one.”
Like any good fund-raiser, Hood tailored his message to the audience. One e-mail to John Neilson, an early Microsoft executive, spoke of a great intellectual puzzle, a big market, and a chance to make history. He wrote:
With Microsoft, I see the areas of collaboration include the need to generate databases that can handle extremely heterogeneous data and at the same time be able to generate complex cross-querying. This, I believe, could have important implications for medicine, human genetics, and biological database opportunities as we move into the twenty-first century. . . . With the expertise Microsoft has, I suspect there would be some people fascinated by the challenge, of, for example, taking DNA sequence data upon which evolution has had 3.7 billion years to inscribe information, and figure out how to decipher that information.
Hood asked Neilson for time to make his case to Nathan Myhrvold, the Microsoft chief technology officer, and Gates. Neilson said he’d work on it.
By fall 1997, UW scientist Robert Franza was charged with working out details on the concept of a quasi-independent institute within the university.
Hood didn’t like the “quasi” part. “I am skeptical about whether it is possible to establish the Institute as part of the University of Washington,” Hood wrote in an October 1997 memo to Provost Lee Huntsman. “I believe the Institute needs to control its hiring, purchasing, intellectual property, endowment, etc.” Hood said he was concerned that if he and his staff were still state employees, they might be hampered by the restrictive new Washington State law on ethics in public service. The dispute was well documented by an early technology for the time—electronic mail correspondence. Hood opened up his e-mail files for review, many of which he had his assistant print for posterity. Copies of many of the same e-mails, memos, and more, were available in the University of Washington archives.
After some of these meetings with Hood and his colleagues, Huntsman worked hard to control his temper.
“Lee started to go off today about the fact that it is obvious that an arrangement of the complexity of the Institute will require one to three years of University deliberation before a decision can be made,” Huntsman told Dean Ramsey in an e-mail. “If the others hadn’t been there, I would have sworn at him. . . . I think the University has moved quickly and correctly and they ought to be bloody appreciative.” He concluded the memo by telling Ramsey “an executive SWAT team” was being assembled to “discern the realm of the feasible.”
University officials hoped to strike a deal. President Richard McCormick sent a handwritten note to Hood on November 5, 1997, that dangled the possibility of a scientific dream home dubbed “K-2”—an extension to the K wing where Hood worked. The name conjured the grand image of the world’s second-highest peak, which appealed to the outdoorsman in Hood. McCormick said he was optimistic he could secure the funds for the new palace. Huntsman had delivered some positive progress reports to the university president. “I am pleased to hear that those discussions are going well, because your work is extremely important and valuable in so many areas,” McCormick wrote.
Things weren’t actually going well. Rumors spread about behind-the-scenes tensions. This time, a surprising suitor came calling. In the six years since Hood had left Caltech, David Baltimore had taken over as president. One of the world’s foremost biologists, Baltimore toyed with the idea of bringing Hood back. Baltimore believed that Hood’s vision for cross-disciplinary biology was farsighted and that Caltech had made a mistake by retreating into small-science fiefdoms after Hood left. Hood sketched out a rough proposal. Baltimore replied in February 1998 with cautious optimism:
I’ve been thinking over the proposal you sent for your institute, and I got to wondering if there is a shot at setting you up back here. I think you will be happiest if the Institute is independent, but has an academic partnership. I’m not sure that Caltech is ready for it. . . . I so often hear your name around here as the paradigm of something exciting but fearful. I think that in the past, the fear ruled, but here is where I sense a change of attitude. Perhaps they are ready for the excitement to rule.
There were allies on campus—particularly in physics, chemistry, and the humanities—who encouraged Baltimore. But not in biology. “The feeling, particularly in biology, was so strong against him that it wasn’t going to work,” Baltimore said years later.
Hood’s files don’t show any evidence that he seriously considered returning to Caltech. He kept negotiating with the University of Washington for his institute. Hood wrote the following in a June 25, 1998, memo to Paul Ramsey and Bob Gust, another administrator:
I am concerned we are not moving forward with the Institute at a reasonable pace. It is time to change the process of taking issues one at a time, and move toward resolution of all the remaining issues by July 14 [1998]. I have several important negotiations coming up for the Institute, and I need resolution of all the major issues in order to proceed.
A week later, Gust wrote back: “I am confident we can work together.”
Hood was on an emotional roller coaster. In one optimistic moment, he told Ramsey he was ready to charge ahead and make his best pitch to Bill Gates, Paul Allen, and Craig McCaw, the Seattle telecommunications billionaire. In the next moment, Hood learned that an important meeting with Gust couldn’t occur because he was booked solid for a month. “It took three weeks to get a five-minute phone call,” Hood complained. Hood hounded Gust and Ramsey to get on their calendars.
Early proposals from the administration revealed some large differences from what Hood had in mind. Hood imagined himself calling the shots. Administrators had other ideas. “Particularly horrifying was the initial draft of the governance document where the Dean was to have absolute control of everything,” Hood wrote.
That summer of 1998, Hood tangled with administrators over matters large and small. In one humiliating move, Hood was reminded that Ramsey needed to sign off on travel expense vouchers for his tiniest cash expenses, like parking at the airport. Around that time, a friend at the Department of Energy tipped Hood off to a university clerical error that jeopardized a $2.5 million federal grant to support his genomics work. Hood exploded. “I am astounded that the University could lose track of such a large amount of money, and that the only reason it was saved from being reclaimed by the Treasury Department was that the head of the DOE Genome Program indirectly called me. . . . I am frustrated that I can not get clear explanations regarding this event in a timely manner from our University bureaucracy. I am embarrassed and angry,” he wrote at the time.
Ramsey had the power to keep everybody at the table, though. Hood knew the dean had gone out on a limb for him on the Monsanto project—given that Monsanto was a lightning rod for activists and that plenty of people on campus were uncomfortable with its sponsorship of academic research. Hood didn’t want his boss to shoot down any existing or future agreements with Monsanto or any other potentially important corporate sponsor.
Ramsey, a cautious and deliberate administrator, lectured Hood in writing on proper procedures at a public institution. Ramsey tried to assure Hood that the dreaded “bureaucracy” was actually working to help make his vision a reality. But Ramsey’s patience was wearing thin. In a five-page memo in October 1998, Ramsey wrote:
We have been timely and generous with the School of Medicine’s resources, and flexible with our response to your somewhat dynamic requirements. . . . Despite the considerable commitment of the [School of Medicine] and the notable progress that has been made over the past year on this complex undertaking, we continue to receive ambiguous remarks from you. . . . I have heard that you are dissatisfied. . . . I am perplexed that you believe our unprecedented efforts are inadequate.
Ramsey tried to leave each side room to maneuver: “I am anxious to move together ‘full speed,’” he wrote. “We can only do that if we are true partners.”
Hood agreed to give it a year. But he couldn’t stand to wait. By New Year’s Day of 1999, Hood was ranting again about foot-dragging. He proposed taking an unpaid leave of absence. He considered resigning.
A thoughtful compromise emerged. What if Roger Perlmutter could be recruited to run the institute’s day-to-day operations, allowing Hood to serve as chairman? The idea had some appeal to Hood, although he imagined it more as a partnership in which he was the boss. He had a close relationship with Perlmutter and respected his scientific mind. But Perlmutter already had a high-powered, high-paid job as an executive vice president at Merck, the pharmaceutical giant. Even so, Ramsey said, they had at least one “very good” conversation. “Both Lee and Paul saw me as someone who could be a peacemaker,” Perlmutter said.
The regents gave their formal blessing to the dean in April 1999 to work on creating an institute. With everyone properly looped in, the public was told of the latest world-changing vision. The Seattle Post-Intelligencer called it “A Big Splash in the Gene Pool.” The institute would be part of UW but located off campus. The annual budget of $100 million would come from government, industry, and foundations. “This represents the future of biomedical research. Ensuring the success of the institute is, and will remain, among the School of Medicine’s top priorities well into the twenty-first century,” Ramsey told reporters.
Perlmutter declined to join, saying he felt “much satisfaction” at Merck. But he expressed interest in Merck sponsoring the institute. Ramsey and Huntsman thought the institute could still proceed. They told Hood he could be the “founding chairman”:
We strongly believe that this extremely important role as Founding Chairman of the Board is the best administrative role for you to have with the Institute . . . given your travel schedule and your time commitments to Molecular Biotechnology and your personal research. . . . We will ask Bob Franza to . . . assume the role of Acting Director of the Institute. It will be necessary to initiate a national search for the permanent Director.
Hood felt blindsided. He didn’t want to be a figurehead. Fearful, Hood saw himself being marginalized at his own institute. He scrambled, trying to arrange a meeting on short notice with billionaire Paul Allen, the Microsoft cofounder. That irritated UW officials.
Even Huntsman, a patient man, started “sermonizing,” in his own words, in an e-mail he sent to Hood that July:
My sense is that we negotiated a pretty clear understanding of how the Institute will be structured last year. . . . Since then, a number of people have worked very hard to advance the governance, facility, IP (intellectual property), and business plans for the Institute, and the result has been excellent progress. During that period it seems that you have been somewhat disconnected and have put little effort into the Institute. . . . Paul [Ramsey] and I have tried to be clear that we need and want your vision and leadership of the Institute while also needing assurance that the operations and vulnerabilities associated with it will be managed carefully.
You have somehow thought that we are trying to take the Institute away from you. That is certainly not the case. . . . There needs to be a title that acknowledges your leadership. We had thought “Chairman” did that; if not, let’s find a more appropriate title.
But, the title is just a small part of the problem. I think the key to moving forward is to establish trust. You have articulated a concern about this. . . . What I’m not sure you understand is that the same question is in our minds. . . . There are several examples, the most recent of which is your statement to me on Wednesday that you sought an appointment with Paul Allen and will soon seek one with Bill Gates. You know full well that that is out of bounds behavior. The University must coordinate its approaches to major donors. . . . It’s foolish behavior.
Hood replied that this was “unfair,” because he gave notice of his outreach to Allen a year earlier. But by this point, misunderstandings were accumulating. People were talking past each other. Exasperated, Hood agreed to one more meeting with Huntsman and Ramsey in August. “Perhaps a miracle will happen,” Hood wrote in an e-mail.
Never much for religion, Hood started laying the groundwork for a totally independent institute, separate from UW. Hood would be president, accountable only to the institute’s board, which he would select. He connected with an experienced administrator named Louis Coffman for help. In an e-mail on September 20, 1999, Coffman told Hood he was ready to work on it “monomaniacally.” By mid-October, Coffman found lab space and a law firm to draft bylaws. Coffman reserved an Internet domain name for the new independent institute. “No bureaucracy here!” Coffman wrote to Hood.
That same day—October 14, 1999—Hood sent a letter to President McCormick that described “failed efforts” to create an institute within UW.
I am . . . concerned about the future of the University of Washington and its aspirations for excellence and academic leadership. I use my failed efforts with the University only as an example to illuminate what I believe to be a fundamental challenge. . . . Six universities, three public and three private, are developing research institutes to take advantage of opportunities for biology in the post-genomic era. Five universities have committed $60–$200 million to their institutes; these same five universities have made space available on campus . . . and they have made significant commitments for faculty staff, and/or administrative positions. Although we started discussions with the School of Medicine two and one-half years ago, the University of Washington did not make any dollar commitments. . . . It made no campus space commitments, nor did it commit a single faculty, staff or administrative position to the Institute. All of these were requested.
Ramsey’s response made it clear that his concerns ran deep. “In the 1960s, 1970s, and 1980s, many medical schools established a variety of private independent entities,” Ramsey wrote. “These decisions led to a balkanization of the activities, and many of these medical schools are now in serious financial difficulty. In some cases, the financial problems are so serious that they are threatening the financial integrity of the parent university.” Ramsey saw conflicts of interest that could undermine the mission of the university. “There is a problem of faculty members simply giving too much time to outside enterprises, diminishing the quality of their University-based research and teaching activity,” Ramsey wrote.
If Hood was going to get access to the assets of the university—faculty, students, and shared resources—then he would have to be accountable to the university. “I do not believe that this proposed arrangement creates a positive model for public/private collaboration,” Ramsey wrote. Ramsey ended by saying he hoped Hood and his colleagues would continue their research entirely within the university.
It was already too late.
Hood faxed a memo to Stephen Friend, the CEO and cofounder of Rosetta Inpharmatics:
A few weeks ago, I decided to take the Institute independent from the University of Washington after months of agonizing. This decision has consequences with the University that are as of yet unclear. . . . My decision to take the Institute independent is irreversible. I want to get together with you to discuss a collaboration.
Hood hadn’t quit. He had one last-ditch proposal to the president and the dean: What if he split his time between an independent, nonprofit Institute for Systems Biology and his job as chairman of UW’s Department of Molecular Biotechnology? He painted a rosy picture of collaboration.
It was “the dumbest idea I’ve ever had,” Hood said years later. “There’s no way I could have done both jobs. . . . But I believed in it at the time. I was desperate.”
Hood submitted a formal request, as required, to do the “outside professional work” of running the institute. Hood proposed transferring NIH and certain other grants, as well as intellectual property, to his institute. He inquired whether a number of university employees could be “dual employees” of the university and the institute. Others could stay at UW and serve as “volunteers” for the institute in their off-hours, Hood suggested.
This proposal was dead on arrival.
“For you to serve as a University faculty member and Chair of a University academic department, while engaging in substantially the same activities . . . on behalf of a private Institute directed by you, is inconsistent with University policies and State law,” Ramsey wrote.
Reading that memo, Hood felt backed into a corner. He was afraid Ramsey might accuse him of violating state ethics law. As Hood recalled years later:
I went home and really thought about it. I thought I’m really in a hard place, because if I push with this, and Paul hits me with an ethics charge, there’s no doubt, within a year or two, I’d be cleared, because there wasn’t anything there, but I’d never start anything again.
I decided that Paul was never really going to understand, would never be sympathetic, and that if I want to do systems biology, it’s not going to be at the UW. It was the same really hard decision that I made at Caltech.
The smart and safe thing at Caltech would have been to forget about the genome project and forget about all this technology development and become a more ordinary biologist and fit in with the rest of the milieu. It’s a great place, great students, has lots of money. Caltech is terrific. But I wanted to do something that didn’t fit into Caltech. And here I wanted to do something that didn’t fit into the UW. It was an enormously scary decision. The move from Caltech was hard because of the quality of Caltech. The move from the UW was hard because I was on my own. As long as you are an academic, you don’t realize how much support you have behind you. You’ve got security.
Hood’s letter of resignation was delivered Friday, December 10, 1999, to President McCormick, Provost Huntsman, and Dean Ramsey. It was effective immediately. The leader of a department with a $30 million annual budget was gone.
“My time at the University has been wonderfully productive; however, I need to devote all of my future efforts to the creation of the Institute,” Hood wrote. “I look forward to many fruitful interactions between the University and the Institute.” The letter was diplomatic in parts, bitter in others. “The University of Washington has not supported the Department very effectively,” Hood said, citing space constraints that drove away faculty.
Hood suggested they appoint Barbara Trask as acting chair to replace him, transfer his grants to the institute and let him keep a UW affiliation, follow through on the K-2 expansion, and keep supporting community outreach. “The Department is very young, and hence, very vulnerable,” Hood wrote.
News reports picked up on the breakup. The university “turned out to be a bit too constrained for the envelope-pushing, entrepreneurial scientist,” the Seattle Post-Intelligencer reported in a front-page story. All players interviewed tried to put out positive spin. Olson was gracious, saying Hood “benefitted the university greatly.” President McCormick said Hood did a “brilliant job” recruiting talent and raising the university’s profile in the fast-moving, competitive world of molecular biology and biotech.
Hood said he was ready to be his own boss. He told reporters he was getting started with an anonymous $5 million donation. He didn’t tell them the donation was from himself. If any high-level businesspeople had been on board for funding a $100 million institute at UW, they weren’t on board for this. Hood wanted to go out on a high note. He made sure to tell reporters that his department’s grant support climbed from $3.5 million in the first year to $32 million in his last.
Valerie Logan had told her husband he shouldn’t quit in a huff. “I pleaded with him to be a little more gracious and slow and give people notice, and he said, ‘No, I’m ready to go,’” Logan said later. Hood had invited her to attend some of the tense meetings with the dean and provost. She never said a word at those meetings, but in postmortems at home, she helped Hood interpret others’ behavior and consider next steps. She knew better than anyone that once Hood had set his mind to something, he would become maniacally focused and determined. “One of Lee’s greatest strengths is that he doesn’t recognize defeat, even when it’s staring him straight in the face,” Valerie once told a friend.
Hood’s son, Eran, visited his parents that Christmas and recalls saying to his father: “Oh my God, what if this doesn’t work? Is this a good idea?” Even in private moments with family, Hood was never prone to self-doubt. Still, this was undeniably a moment of great uncertainty. “He was definitely a little anxious,” Eran said.
Looking back, there were multiple reasons such an institute could never work within the university. There was cultural resistance to breaking down walls between academic departments, which all have their own hierarchical power structures, said Alan Aderem, who joined Hood to cofound the Institute for Systems Biology. There was no way a UW-based institute could interact with companies and develop technologies in the free-form way Hood envisioned. The university was “clueless” in how to manage intellectual property, Aderem said. With its traditional, cheap graduate-student labor model, the university also couldn’t afford to compete with Microsoft, across town, on salaries for technology people. And relations became toxic between Hood and Ramsey. “It was personal,” Aderem said. “Lee’s vision is all that matters to him. Ramsey was in the way.” Years later, Hood noted that the previous dean, Phil Fialkow, was a scientist. Hood could be merciless in his put-downs of Ramsey as a mere clinician who didn’t “understand” science.
Viewing the battle from afar, Bill Gates, years later, said he saw the merits in Hood’s vision, but also saw why he clashed with the administration. “One thing about Lee is that he can be demanding. . . . He’s a wonderful guy, but a very demanding guy,” Gates said. “He was ahead of systems biology. . . . These things are never black and white.”
At the dawn of a new millennium, at a time in life when many men of accomplishment are ready to rest on their laurels, Hood took the biggest gamble of his life.
If the twenty-first century was indeed going to be “the biology century,” he would have to hustle like never before to play a central role. No longer could he count on institutional support. Bill Gates wasn’t writing any big checks. Hood would have to spend his own money, risk his reputation. If the Institute for Systems Biology were to fail, for either financial or scientific reasons, it would be an ignominious end to an incredible career.
For Hood, running a start-up was uncharted territory. He’d advised biotech start-ups, but always as an outside observer, not the company builder. This time he was running the show. He knew the odds were against him. Once, in a meeting with Monsanto, he muttered that bootstrapping an institute on his own dime was nutty. “Those never work. You can’t get anything done,” he said. Yet there he was, doing exactly that. If he failed, he’d have no one to blame but himself. It was terrifying. And, Hood said, “it was enormously exhilarating.”
One former postdoc sent Hood a card; amused, Hood replied with a handwritten note of thanks. The card was a picture of a frog jumping into a frying pan.