Brian Kenny:
Thanks for tuning into Cold Call's 200th episode celebration this week. Today kicks off the first of three episodes dedicated to cases taught in a new course on the Social Purpose of the Firm that's required for all first-year students at Harvard Business School. Each case raises questions about the role of business in addressing complex societal and environmental issues. The course was organized by the Institute for the Study of Business and Global Society, which we call, BiGS, for shorthand, which is led by Senior Associate Dean and Professor, Debora Spar. And I'm thrilled to welcome her to Cold Call today to discuss her case, Martine Rothblatt and United Therapeutics: A Series of Implausible Dreams.
I'm your host, Brian Kenny, and you're listening to Cold Call on the HBR Podcast Network. Deb, thanks for joining me today.
Debora Spar:
It's a great pleasure. Thank you.
Brian Kenny:
And so great to have these cases as part of the lineup for the 200th episode week. And we're really excited to be able to talk about some of the issues that surface here. And this case is just chock full of really interesting examples. And Martine is an amazing protagonist. So, why don't we just dig right in? If you could start by telling us what the central issue is in the case and what your cold call is to start the discussion.
Debora Spar:
Well, all of the cases in this course have a fairly similar structure because the course itself is new and it's very short. It's only a six class course. But in each of the cases, we feature a protagonist or a company who is trying to tackle a massive problem that nobody else seems to have been able to tackle before. So there's an element of courage, there's an element of audacity. There may be a little bit element of insanity involved here. But in the Martine case, there is a really obvious cold call because the case is about a woman who is trying to create a company to develop the drug to save her daughter's life.
Brian Kenny:
Amazing.
Debora Spar:
It is just an amazing story. And so the cold call is, why was Martine Rothblatt the only person on the planet who could save her daughter's life?
Brian Kenny:
The case reads a little bit like a screenplay. I kept thinking, "Somebody's got to make a movie about this woman.", because she's amazing. I mean, we'll hear more and more. There's layers and layers here that make her really remarkable. Tell us a little bit more about BiGS, if you would, just so that people have a sense for that as they listen to both this conversation and subsequent cases that we'll discuss through the week.
Debora Spar:
So BiGS is the acronym, as you mentioned earlier, for our new institute for the Study of Business and Global Society. And BiGS is the umbrella organization, if you will, to think about all of the issues across the School and quite frankly, across the world, that occur at the intersection of business and society. So part of the BiGS agenda is to consolidate and expand the school's work on gender, on race, on climate change, and all these big hairy, messy, complicated challenges. So as part of the BiGS agenda, 10 colleagues and I decided to create a new course in the required curriculum, and is a-
Brian Kenny:
Which is a big deal, by the way.
Debora Spar:
It is a big deal,
Brian Kenny:
... it sounds like, "Hey, we created a new course." No, there's a lot involved there.
Debora Spar:
The first year of Harvard Business School is all of the required material. So it's marketing, accounting, and finance, and those things that people have known for a hundred years were critical to business. So every time you put something new in the first year, the school is actually saying, "There's something new about business. There's something else that every single student at Harvard Business School has to know." So my colleagues and I felt very strongly that insofar as the school is taking seriously this topic of business and society, then we need some presence in the first year.
So we created this new course, which was terrifying, wonderful, and terrifying. And we wanted to introduce students to this foundational question, what is the social purpose of the firm? And particularly in this political environment, I know that can be seen as woke or anti-capitalist, but it's not at all. It's a deeply intellectual and foundational and historical question. What does the firm do? Why do we need firms? Why was the firm created? Why do we have firms rather than political parties or community groups?
So, we spent a year and a half putting this course together. All senior faculty, I think, because we had the courage to put it out there and risk failure. And it's really designed to prod students to think early in their time at HBS, "What am I supposed to be doing?" Because we all know the mission of Harvard Business School is to educate leaders who make a difference in the world. But our students quietly and sometimes not so quietly say, "I don't know what that actually means. How do I know what kind of difference I'm supposed to make?" And I think for many of our students, it's actually quite troubling, because they feel like everybody else has the answer to that question except them.
And so the purpose... So, we call this course, SPF, Social Purpose of the Firm. And there were a million different ways we could have structured it. What we decided to do was to find five companies that were each tackling a massive societal problem, and to understand why they decided to do this, rather than just opening a lemonade business. And then how they did it. And to try and understand what it is that enables firms to tackle these problems. And what are the kinds of problems or subsets of problems that in fact firms can't address?
And so as we say, we wanted the students to leave the course in equal measure inspired and humbled. We wanted them to really think about all the amazing things they can do in the world through the channels of a for-profit firm, but also where the dangers can lie in that endeavor.
Brian Kenny:
Yeah. Well, I think this case is a perfect starter kit for that whole course. That's amazing. And as I read through the case, I don't think there's much that Martine couldn't take on. So, this is a really interesting one. Let's just talk about her a little bit. Can you describe her background?
Debora Spar:
So first of all, I should say, I stumbled upon Martine several years ago as part of my own research. And most people who stumble upon Martine, became somewhat obsessed with her because she's just extraordinary. Martine is the classic serial entrepreneur. She started what is now, Sirius Radio, and she started it when she was quite young, realizing that there was in fact a business to be made in satellite radio. So, she saw that opportunity. She's a lawyer by training, and she saw how she could be a part of crafting an entire international regulatory system around radio. Most people don't see that.
Brian Kenny:
No. And for a lot of our listeners, they probably just assumed that XM Radio was always here, and it wasn't.
Debora Spar:
It wasn't. And she has that brain. She can see the future and charge through it. After she created that business, sold that business, made a lot of money, she somewhat peripherally also underwent a sex change, gender reassignment surgery, depending on your preference. But Martine was born, Martin, so founded Sirius Radio, became a woman, stayed married to the same woman she had been married to when she was a man. Martine is white, her wife happens to be Black, so they are blended family kind of in every dimension you can think of. And their children are blended as well.
And one of these children, Genesis, who, at the time she was diagnosed, was seven, was diagnosed with a terrible disease called, a pulmonary arterial hypertension, or PAH for short, which is a lung disease that essentially is going to kill you. It's almost always fatal. And again, most parents when faced with this horrific news, would go through a tragic but fairly similar set of circumstances. They would mourn, they would try to get information, they might move if they could, to be closer to the best hospital to treat this. They might do a GoFundMe page. We know these sad steps. Martine decides to start a for-profit company to cure her daughter. And we can come back to that, but the bottom line is, she did. So she started the company, she raised the money, she found the drug, she developed the drug.
Brian Kenny:
She has no pharmaceutical background-
Debora Spar:
No.
Brian Kenny:
... before she goes down this path.
Debora Spar:
She didn't even have a biology class, as my students pointed out when I taught it. She taught herself biochemistry on nights and weekends, which is something that most people don't do. I certainly have not taught myself biochemistry, but Martine did. And again it's a long story, but the short version is, she comes up with a drug, the company produces the drug. Her daughter gets... PAH is never technically cured, but a much better standard of living. The daughter, she's now in her 30s, I believe, and is fine and healthy. And Martine goes on to turn the company into yet another very profitable venture. So much so, because she had linked her own compensation to the company's share price, she wound up being the highest paid female CEO in the United States.
Brian Kenny:
So let's just pause on that for a second, because she's pushing all kinds of social boundaries here. She goes through gender reassignment surgery. So she's experienced the corporate world as both a male and a female now. And I'm wondering how that maybe shapes her view on gender a little bit.
Debora Spar:
We really grappled with whether or not to bring this up in class, because one of the many things I love about this case and about this story is that at a moment when there's such fervor over the issue of transgender individuals, Martine's gender is sort of peripheral to the story. She's living her life and she's lived her life in two different genders. But Martine herself, although she certainly hasn't dedicated her life to transgender issues in any way, she sees her fluidity as crucial to who she is. And just think about it for a moment. So few of us, such a tiny number of people have experienced what it's like to change genders, to go through gender reassignment surgery. But Martine seems to have come out of that experience with this sense of being able to do the impossible. She really believes that once you've lived as a man and then become a woman, and once you've lived as a straight person and become a gay person, that of course you can cure fatal diseases.
Brian Kenny:
Right, right.
Debora Spar:
She's kind of used to doing the impossible, or used to doing what other people deem impossible.
Brian Kenny:
And as we talk about the social purpose of the firm, she finds herself in a situation where she's trying to find a way to save her daughter's life. And she does things that are completely counter to what the pharmaceutical industry does. I mean, how long does it usually take to bring a medication to commercial market?
Debora Spar:
The numbers vary, but it's a long time. It's eight years, it's 10 years. It depends whether you count all of the medicines that you work on that don't ever make it to phase one trials, much less to the market. So one of the many reasons that PAH didn't have a better treatment was because it's what is called, an orphan disease, which is a horrible name. But orphan diseases are those diseases that too few people suffer from. And so, there's not a big enough market. And pharma firms, in my opinion, they're not evil. They're doing what their incentives drive them to do. Pharma firms these days tend to focus on treatments for diseases that afflict large numbers of people. So a disease that only, it's a funny word to use, but a disease that only afflicts a few thousand people a year is not going to be profitable for a standard pharma firm.
But what Martine sees, and this is again, what we call in the teaching of the class, her superpower, she has the ability, just as she did with Sirius Radio to see into a problem in a different way. So people looked at satellite radio and they thought about it as this sort of magical technology or something for fun or something for the military. Martine saw how you could make a business out of it.
With PAH, she had sort of two great insights. The first was that there probably was a cure somewhere. Because as the case described, she didn't cook this up in the laboratory. She had a sense that there was a compound that had been discovered that nobody brought to market. And so she had that intuition, which proved to be right.
But she also saw that it was actually much easier for a small firm like hers to bring this to market than it was for Pfizer or pick any-
Brian Kenny:
Any huge firm. Yeah.
Debora Spar:
... big pharma firm. She had no opportunity costs. She had nothing to lose. She had, because of her success with Sirius Radio, she not only had capital of her own, but she had people who were willing to take a chance on her. So, she brought a different set of characteristics to the problem than any big pharma firm could have done.
Brian Kenny:
And there was another complexity to this. I'm sure it was filled with complexities, but one of the obvious ones was that her daughter needed a lung transplant. And transplants are incredibly difficult to come by in this country, particularly for children. But one of the insights that she came away with was that you didn't necessarily need to get a transplant from a human. There might be a way to get transplants from other mammals that could serve the same purpose.
Debora Spar:
Right. So this is kind of Martine phase three or four. One loses count with Martine. But after she brought the drug to market, which was called, Remodulin... Again, as I say in the case, most people would've stopped there, but not Martine.
Brian Kenny:
Nope.
Debora Spar:
She keeps going because, given the nature of PAH and given the nature of many diseases, sadly, in this world, ultimately sufferers are going to need an organ transplant. And going back to the purpose of the course, the market for organs doesn't work. So, markets solve many things in this country and in this world. Markets don't solve organs. For reasons that are fascinating, albeit morbid and sad to discuss in class, we don't put a price on kidneys because we don't want to. We could, but we don't want to as a society. So lots and lots of smart people, including many at Harvard, have tried to come up with ways to fix the organ transplant market. Nobody's quite done it. Martine, once again, comes at it through a completely different channel. And she says, "Huh. If you can't get enough people to donate organs, why don't we just make them?" Again, something that sounds on the face of it, absurd until you know Martine. And Martine takes what other people think is absurd. And she says, "Well, let's just make them."
Brian Kenny:
Yeah.
Debora Spar:
And that's now the third business she's started. Although, once again, she's super smart. She doesn't start from scratch. She finds something that's out there and grows it. So, she's now purchased and is running a company called... And this is one thing I will say, it's a horrible name, Revivicor. Just not a good name. But Revivicor was a company that was started by Craig Venter, another genius and pioneer, which genetically modifies pig's hearts and pig’s organs to make them suitable for human transplant.
Brian Kenny:
Now, I don't want to overlook the fact that one of the steps that she took along this journey was to make her firm a PBC, give them P Corps status. Can you just sort of explain what that is, because I thought it was pretty significant?
Debora Spar:
Yeah. A PBC is a public benefit corporation. It's a different model of corporate structure. One that commits the firm to being about public benefits, benefits for the good of society, and therefore explicitly not in the business of profit maximization. So Martine did that, but interestingly, she did that after the company had actually already made a lot of money.
Brian Kenny:
Another insight that she had was transportation. You needed to find a way to transport organs so that they could get to a patient in a timely way. And so, she tries her hand at creating an alternate transportation mode for this.
Debora Spar:
Yes, yes. So one of the other new ventures, which is called, Beta, is an electric-powered helicopter. Yet another thing that people thought impossible, because a helicopter is too heavy to be powered by batteries. But Martine figured it out. And I should pause on that for a second, lest I give her even more superpowers than she actually has. Martine is not going to the laboratory to design these technologies herself. She's understanding them at an incredibly deep level. She's super smart. And then she also figures out who in the world is going to have the technology and have the knowledge that she can then help commercialize.
Brian Kenny:
There's a throwaway line in the case that says that she got her pilot's license too.
Debora Spar:
She did get her pilot's license along the way, after her PhD and teaching herself biochemistry.
Brian Kenny:
Yeah, yeah. And let's talk a little bit more about her personal life. You've mentioned that she stayed married to her same partner, and that takes on really increased significance as they begin to age together. And she has some views on end of life that I thought were also pretty remarkable.
Debora Spar:
As I mentioned earlier, I stumbled on Martine a few years ago. And I stumbled onto her, not for anything we've just discussed, but because she is also on the leading edge, some might say, the sort of freakishly leading edge of trying to figure out how human life can be prolonged in a digital format. So her starting assumption, and in this, she's very much a follower of Ray Kurzweil, whose work people may know. Kurzweil is best known for creating or the launching the field of transhumanism, which is something that Martine very much believes in. But she believes that the love she has for her wife, whose name is Bina, is an eternal love. And as she says, if they could love each other in a heterosexual relationship and then shift genders and love each other in a homosexual relationship, why can't they continue to love each other after one of them is no longer living on this earth as we know it?
So Martine has created a digital replica or robotic replica of her wife, Bina, who's still alive. And the robot itself is kind of clunky looking. It looks like a Disney animatronic, which is similar technology. But the really interesting part is that she and Bina have downloaded all of Bina's, if you will, digital memories: photographs, blog posts, Cold Call podcast episodes. We all have this massive digital library of our lives now. They've downloaded those, collected those, and are in the process of animating them with an AI system. And so that the digital replica of Bina can converse, as if she were, alive, may not be the best word, but as if she were real.
Brian Kenny:
Right, right.
Debora Spar:
And again, this all sounded stranger before ChatGPT came out just months ago. Right?
Brian Kenny:
Exactly. Yeah.
Debora Spar:
We are all now increasingly in the business of chatting with things that are not human. And so, this is another area in which Martine is kind of light years ahead of most of the rest of us. Maybe not getting it quite right, but certainly forging a pathway into what a transhumanist future might look like.
Brian Kenny:
Yeah. So as you think about this case, and again, reflecting on the course... And I think the rising significance of this question about what the social purpose of the firm is. We hear it a lot from our students these days. A lot of faculty are writing cases that kind of think about that in a different way than they might have 10 or 15 years ago. What's one thing you think is really important for people to remember about Martine and this case?
Debora Spar:
This is a case about courage and insight. This is a woman for whom no is not an answer. She just charges through. And I think that defines pioneers of any sort. I think it defines great entrepreneurs, great inventors. And she's both of those things. By the same token, and this is something that we talk about in the case and in the course, this is not an unmitigated good. Mutating or engineering pig’s hearts for human transplant may have some problems attached to it. And as Martine will say, "Martine should not be the only one making these decisions." And this is a theme that runs through the course that companies and entrepreneurs are incredibly good, perhaps uniquely good at seeing solutions, and particularly using technology and innovation to create solutions for society's problems. But it's not necessarily part of their remit to fully think about the societal implications. So, there need to be rules around genetic engineering. If Martine does figure out how to make us live forever, somebody else should probably be coming in and figuring out the terms by which this new universe is going to be to unfold. And so what we want people to see in this case is the beauty and the awesomeness of Martine. But also the need for society at large to have some voice in writing the rules that will eventually govern how these new technologies affect society, particularly when they deal, as Martine's technologies do, with matters of life and death.
Brian Kenny:
Yeah. Well, it's a great case. It raises a lot of really interesting questions. Deborah, thanks for being here to talk about it with me.
Debora Spar:
Always a great pleasure. Thank you.
Brian Kenny:
If you enjoy Cold Call, you might like our other podcasts, After Hours, Climate Rising, Deep Purpose, Idea Cast, Managing the Future of Work, Skydeck, and Women at Work. Find them on Apple, Spotify, or wherever you listen. And if you could take a minute to rate and review us, we'd be grateful. If you have any suggestions or just want to say hello, we want to hear from you. Email us at coldcall@hbs.edu. Thanks again for joining us. I'm your host, Brian Kenny, and you've been listening to Cold Call, an official podcast of Harvard Business School and part of the HBR podcast network.