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Wall Street’s tech transformation, a divide at Google, and the future of healthcare

Wall Street’s tech transformation, a divide at Google, and the future of healthcare

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Crains New York

Hello!

Wall Street’s tech transformation continues. Our finance team had a number of stories on these efforts this week, each in their own way showing the ways in which tech is impacting competition.

For some, investments in tech are helping drive additional revenue. Goldman Sachs for example for a long time struggled to win business with quant hedge funds, which require the most up-to-date technology for their trading. CEO David Solomon told us last month that “the picture is very different” now.

That progress showed up on Tuesday when the bank reported better than expected equities trading results.

For others, tech hires promise a fresh pair of eyes and new opportunities. Morgan Stanley Investment Management, for example, poached a Google machine learning expert for a newly-created role as head of data and analytics.

“This is a critical component to the future success of our business,” MSIM’s chief operating officer said in a memo announcing the hire.

Private equity giant KKR hired Emilia Sherifova, the top technology officer at Northwestern Mutual, to develop a data-driven approach she says will play a “central role” in KKR’s next stage of evolution. And Deutsche Bank hired AQR’s head of technology to help lead a $15 billion push into digital with a focus on the cloud.

For some newer players, the lack of legacy tech is proving a competitive advantage. Chris Randazzo, Rockefeller Capital’s private wealth head, highlighted the benefits of “having a blank piece of paper” when it comes to technology for example. Before he joined Rockefeller, Randazzo was chief information officer for global wealth and investment management at Morgan Stanley and at Bank of America Merrill Lynch

“The hardest thing with the massive legacy systems that were built over 10, 20, 30, 40 years, the challenge was trying to innovate at the same time while you’re running multi-billion dollar businesses supporting millions of clients and millions of accounts,” he told BI’s Meghan Morris.

And some appear to be taking inspiration from consumer tech success stories like Netflix and Spotify. Charles Schwab rolled out subscription pricing at the end of March for its robo-adviser’s premium service, replacing the traditional fee scale that charges a percentage of assets invested. The robo-adviser said it has added $1 billion in assets since making the pricing change, with a 25% increase in account openings.

As always, we’ll be keeping track of these trends and more.

Before I go, you can now let us know what you think of our BI Prime stories. Look out for box asking ‘How valuable was this story for you?’ at the bottom of our stories, and let us know how we’re doing. Or contact me directly.

— Matt

Quote of the week

“Most of the time, when we find tech people who are interested in healthcare, they spend on the order of three months before they realize how screwed up it is.” – Krishna Yeshwant, who coleads the life-science investment team at GV, on preparing tech entrepreneurs to jump into the healthcare industry.

In conversation

Finance and Investing

Goldman Sachs execs are jockeying for power in the firm’s big new private investing unit – and the stakes couldn’t be higher

Offering a big strategic vision isn’t for those without conviction.

‘A once in a decade’: JPMorgan breaks down how to take advantage of the largest bubble in modern history

As an investor, the last word you ever want to hear is “bubble.” Its mere utterance is cringeworthy.

Ray Dalio just unloaded on ‘worthless’ debt investments he sees headed for disaster – and revealed where you should put your money instead

Ray Dalio, the founder and cochief investment officer of Bridgewater Associates, has shared his thoughts on the late-stage US economy and why, in his view, markets are most likely inching closer to a “paradigm shift.”

Tech, Media, Telecoms

There’s a deepening divide among Google workers: those who get free meals and those who don’t

There’s no more free lunch at Google – at least if you’re among some of the unlucky engineers who belong to the company’s vast workforce of contractors and vendors.

Amazon is hiring for a ‘stealth advertising’ engineering team to disrupt the $100 billion gaming industry

Amazon has been building up its advertising business to compete with Amazon and Google, and now it wants to expand into the gaming industry.

Investors from Comcast Ventures, Lightspeed, and others name hot media companies they think will blow up this year

It’s been bleak for digital media. Headlines blare about fire sales of companies like Mic and Gawker, layoffs at companies like HuffPost and Vice, and consolidation rumors.

Healthcare

Using apps to treat diseases could be the future of healthcare. The first chief digital officer at pharma giant Sanofi told us his strategy for navigating the promises and pitfalls.

As French drugmaker Sanofi’s new chief digital officer, Ameet Nathwani thinks tech like AI could help solve some of the healthcare system’s biggest problems.

Inside Gilead’s unusual $5.1 billion partnership with a Belgian biotech, which was codenamed ‘Project Eagles’ and was sealed the night of a glitzy anniversary party

The night of a big party for the Belgian biotech Galapagos’ 20th anniversary, the Gilead exec Andrew Dickinson flew out to the celebration in Europe.

A superstar ex-Facebook and Google exec is trying to upend a $24 billion industry with devices that spot disease sooner — and she’s already testing it on animals

A superstar ex-Facebook and Google exec is trying to upend a $24 billion industry with devices that spot disease sooner — and she’s already testing it on animals

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YouTube/TED
  • A brush with death inspired ex-Facebook and Google executive Mary Lou Jepsen to embark on her latest initiative as the founder of a San Francisco-based startup called Openwater.
  • Jepsen is working on devices that are akin to portable, miniature MRIs which could do everything from observing the effects of a medication in real time to monitoring a breast cancer tumor to decide if surgery is necessary.
  • Her startup is currently running experiments on rats in a lab in the San Francisco area, she told Business Insider.

Former Google and Facebook executive Mary Lou Jepsen was in her 20s when she went home to die. What began with terrible headaches developed into fatigue so severe she had to use a wheelchair. She’d lost control of movement in half of her face.

It took several months and a handful of doctors before someone recommended that Jepsen get an MRI – a procedure that that lets clinicians peek inside the brain, but that can cost thousands of dollars and is performed exclusively on a two-ton machine in a special room, often at a hospital. The pricey devices use radio waves and strong magnets to create pictures of organs and structures inside the body.

Thanks to Jepsen’s MRI, she was diagnosed with a deadly brain tumor just in time to save her life.

Jepsen’s brush with death drove her to create a startup called Openwater.

Come see Mary Lou Jepsen speak at Business Insider’s Ignition conference, December 3 & 4 in New York.

Its mission is to make portable, miniature imaging machines that everyone can afford – machines that she dreams will one day harbor the power to do everything from detect tumors in any organ to allow for brain-to-brain communication. If it works, her technology could disrupt the MRI market, where patients spend roughly $24 billion a year on scans, according to an estimate from healthcare research firm The Advisory Board Company.

Brain activity measured with an MRI.

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Brain activity measured with an MRI.
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shutterstock/MriMan

Openwater’s existing technology uses a combination of infrared, cell-penetrating laser beams plus two chips – one a camera and one ultrasonic – to look inside the brain and body, Jepsen explained to Business Insider in an interview on the sidelines of a conference held by media group Techonomy in Half Moon Bay, California.

The company is currently performing experiments on rats with prototype versions of its technology at a lab space in the Bay Area, said Jepsen. Already, the images they are able to create are more accurate and better defined than what you’d see with an MRI, she claimed.

Although she has not yet offered a public demonstration of the technology, the company’s investors and board of directors suggest strong scientific potential.

Jeff Huber, the vice chairman and founding CEO of $1.6 billion cancer-detecting Silicon Valley startup Grail, serves on Openwater’s board of directors; Brook Byers, a founding partner of venture capital firm Kleiner Perkins (which has funded Genentech) is an Openwater investor, along with Nicholas Negroponte, the co-founder of the MIT Media Lab and Michael McCullough, who directs the evolution and human behavior lab at the University of Miami.

Jepsen’s ultimate goal is to get her product in people’s homes, where they could be used to observe the effects of a medication in real time or help monitor the progression of a disease like cancer.

“I want everyone to be able to buy these machines in the drug store next to the blood pressure cuff,” Jepsen said.

From a storied career at Facebook and Google to her own startup

Jepsen spoke about her device at the 2017 Rock Health Summit, but remained vague on details.

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Jepsen spoke about her device at the 2017 Rock Health Summit, but remained vague on details.
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Rock Health

Jepsen pitched her project to tech giants Google and Facebook before deciding to strike out on her own. She said the CEOs of each company expressed an interest in the idea at first but ultimately had her focus on other projects in virtual reality and augmented reality.

Her roles at both companies were high-level positions that were heavy on engineering: at Google, Jepsen worked as the head of the company’s display division within its secretive “X” division and reported directly to Google co-founder Sergey Brin. At Facebook, Jepsen served as the company’s executive director of engineering and the head of display technologies at its virtual reality arm Oculus.

But Jepsen, an engineer with a PhD in optical sciences from Brown University, wanted to do more.

“I like video games just as much as the next person,” Jepsen told Business Insider, but their capacity to help people and make a difference is limited, she said.

So last summer, Jepsen announced she was leaving Facebook to create her own company, called Openwater.

‘You don’t have to biopsy if you can monitor’

Last year, Jepsen described Openwater’s device as a new imaging technology that could help “cure diseases” and could even be worn like a hat to see inside the brain. Such a device could help researchers better understand complex organs like the brain, where some aspects of mental illnesses like depression can currently be observed using an MRI.

For the process to work, timing is everything, Jepsen explained: the ultrasonic pings are emitted first so that they arrive at the same time as the infrared light, which is turned on shortly after. The light changes color as it moves past various structures in the brain or body – kind of like how the police siren on a cop car changes pitch as it drives past you.

And the resulting image, which is produced through a combination of the light and the ultrasonic pings, will be able to detect the presence of a tumor, Jepsen said.

Jepsen’s company is also working with a nonprofit organization called the Focused Ultrasound Foundation, based in Charlottesville, Virginia. to explore the possibility of someday using the technology for non-invasive surgery using sound waves, she added.

On Monday, Jepsen described one potential scenario for someone with breast cancer. First, her mini-MRI could likely diagnose the disease earlier because MRIs have 10 times the resolution of mammograms, she said. Currently, MRIs are recommended in addition to mammograms only for women with a high risk of breast cancer.

But in addition, if the device could be worn (for example, as part of a bra) it could be used to monitor the disease and any tumors, allowing the patient and her clinician to decide on surgery only when it was medically necessary, such as if the tumor began to grow.

“You don’t have to biopsy if you can monitor,” Jepsen said.

This story was updated with a new estimate of the MRI market based on estimates from healthcare research firm The Advisory Board.

Google just hired a big name CEO in healthcare to coordinate all of its healthcare initiatives

Google just hired a big name CEO in healthcare to coordinate all of its healthcare initiatives

Geisinger Health CEO David Feinberg

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Geisinger Health CEO David Feinberg
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Geisinger Health via PR Newswire
  • Google hired Geisinger Health CEO David Feinberg to lead its healthcare efforts.
  • Feinberg’s role will be to coordinate all of the healthcare-related initiatives Google already has underway, the Wall Street Journal reported.
  • Google has been hiring healthcare executives as it seeks to expand its presence in the industry.

Google hired Geisinger Health CEO David Feinberg to a new role leading the company’s healthcare efforts.

Feinberg will leave Geisinger on January 3, the Pennsylvania hospital system said in a statement. Jaewon Ryu, currently Geisinger’s chief medical officer, will serve as interim president and CEO at Geisinger.

Feinberg’s role will be to coordinate the health initiatives Google has underway, including the work happening in artificial intelligence and devices, the Wall Street Journal reported Thursday.

Feinberg has been at Geisinger, a health system in Pennsylvania that provides health insurance as well as care through its medical centers, since 2015. Prior to that he served as CEO of UCLA’s health system. Ryu is an emergency medicine physician, who previously worked as an executive at the health insurer Humana. He joined Geisinger in 2016.

A representative from Google didn’t return a request for comment.

At Google, Feinberg will join former Cleveland Clinic CEO Toby Cosgrove, who recently joined as an advisor to Google Cloud. A unit of Google’s parent company also hired former Food and Drug Administration Commissioner Robert Califf last year.

Alphabet, Google’s parent company, has a number of bets in healthcare ranging from Verily, its life sciences arm that’s developing everything from glucose-monitoring contact lenses to surgical robots, to Calico, its life-extension spinoff. Google AI has some projects in the healthcare space as well as through DeepMind.

The company has also made a number of investments in healthcare through its venture funds GV and Capital G as well as through Alphabet itself.

This isn’t the first time Feinberg has had a brush with tech. In June, CNBC reported that he was in talks to lead the Amazon, Berkshire Hathaway, and JPMorgan healthcare joint venture. That role ultimately went to Dr. Atul Gawande.

Google’s life-extension spinoff teamed up with Ancestry to study 54 million family trees — and learned that a surprising factor helps determine how long we live

Google’s life-extension spinoff teamed up with Ancestry to study 54 million family trees — and learned that a surprising factor helps determine how long we live

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Yulia Mayorova/Shutterstock
  • Genealogy and DNA site Ancestry once partnered with Google’s stealthy life-extension spinoff, a company called Calico, to study the genetics of longevity.
  • The new study suggests that our genes play less of a role in how long we live than previously believed.
  • Instead, traits and behaviors that include everything from diet and exercise to friendliness appear to play a strong role in longevity.
  • But surprisingly, we still pass these traits on through generations – mostly by picking partners who look and act like us, the researchers suggest.

The road to achieving a long life is littered with hype. The usual life-extension suspects include pricey pills and supplements; the peculiar involve infusions of young blood and chambers pumped with sub-zero temperatures.

Then there’s science. And one scientific factor that has long been presumed to dictate much of how long we live is our DNA. For decades, it was assumed that the genes we inherit from our parents explain anywhere from 15% to 30% of the variations in longevity that are observed between people.

But a new study that came from quiet collaboration between genetics company Ancestry and a Google life-extension spinoff called Calico suggests that our genes play less of a role in our lifespan than we thought.

Instead, traits and behaviors that include everything from diet and exercise to friendliness appears to play a strong role in longevity. Surprisingly, we still pass these traits on through generations – mostly by picking partners who look and act like us, the researchers report.

In essence, the findings suggest that people effectively transfer longevity from one generation to the next much in the same way that wealth and socioeconomic status are passed from parents to children: by choosing partners with attitudes and attributes that mirror our own, regardless of how different their DNA may be.

Picking partners who act and think like us

older people

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seyfettin dincturk / Unsplash

For decades, researchers studying longevity and genetics had estimated that the genes we inherit from our parents play a significant role in determining how long we live. Previous studies suggested that genes account for as much as 30% of the total variability in lifespan between individuals.

But the new study from Ancestry and Calico indicates that our DNA may be much less important in determining longevity than traits and behaviors like diet, exercise, and personality. After looking at data from more than 54 million family trees and the birth and death information for over 400 million individuals, the researchers concluded that our DNA accounts for less than 10% of lifespan variability.

Instead, we pass on longevity through generations by choosing partners whose attitudes and attributes look much like our own. In research parlance, that’s known as “assortative mating.”

“The true heritability of human longevity for birth cohorts across the 1800s and early 1900s was well below 10%, and … has been generally overestimated due to the effect of assortative mating,” the scientists wrote.

Put another way, we tend to pick partners with attitudes and attributes – from eating and exercising to friendliness – that mirror our own. And as a result, we tend to live similar amounts of time, and have children who do as well.

How friendly we are and how often we work out may play a stronger role in our longevity than our DNA

woman running jogging exercise

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Shutterstock

Previous studies shed light on how important lifestyle factors are when it comes to how long we live. In a recent study published in the journal Circulation, for example, scientists pinpointed five lifestyle factors that appear to be linked with a significantly longer lifespan, judging by the outcomes of two long-term studies that involved about 123,000 adults.

People in the study who lived long lives tended to:

  • Do at least 30 minutes of cardio exercise every day.
  • Eat a Mediterranean diet.
  • Never smoke.
  • Stick to a healthy body weight.
  • Drink no more than 1-2 alcoholic beverages a day.

As part of several other recent studies, scientists have uncovered a handful of personality traits that also appear to be strongly linked to longer-than-average lives. They include:

Taken together, the findings suggest that how long we live may be less a matter of what we’re born with than the circumstances in which we live and the choices that we make. Those choices, as the Ancestry and Google researchers acknowledge in their new paper, tend to be based on everything from social status to wealth and then, just like genetics, passed on from one generation to the next.

Learn how Mary Lou Jepsen left her job at Facebook to transform healthcare with a life-saving imaging technology at IGNITION 2018

Learn how Mary Lou Jepsen left her job at Facebook to transform healthcare with a life-saving imaging technology at IGNITION 2018

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YouTube/TED

Mary Lou Jepsen left behind her successful career in the tech world – which included top executive roles at Facebook, Google, and Intel – to found Openwater, a startup focused on creating a wearable device that Jepsen says will provide MRI-resolution imaging.

Jepsen gave a jaw-dropping talk at TED in April, complete with raw chicken, buckets of blood, and lasers. On a darkened stage, Jepsen demonstrated how bodies are translucent to red light, and how her optical-imaging system can scatter and capture near-infrared light to diagnose cancers, tumors, and other diseases buried deep within our own bodies.

Jepsen is an inventor on over 200 patents, and has been recognized on Time magazine’s Time 100 list as one of the 100 most influential people in the world.

Jepsen will take the IGNITION stage in November to explain where she is in her research and the road to productization. At IGNITION, she will share updates on Openwater’s progress and how she thinks the technology will transform the healthcare industry and society.

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