Often the best investments are those where the entrepreneur is way out on the leading edge of the possible. These break-out deals are generally priced right, with low early valuations/share price, and yet have the potential to disrupt or reinvent existing businesses and sometimes even entire industries.
These break-out developments represent potential opportunities for big profits while also often addressing a major problem or existing challenge to the health and welfare of our society. Solving big problems with disruptive innovation is the way to both riches and honor.
Northfield Laboratories, started just outside of Chicago in Northfield, Illinois, was such a company. In the mid-1980’s, the AIDS epidemic was ravaging society, threatening to move into the mainstream as a serious pandemic. It needed to be contained. It was determined that one major source of transmission was blood transfusions. An “artificial blood” was needed that would be totally sterile and guaranteed free of AIDS or other blood-borne diseases, could be used for any patient without having to match blood types, and could be priced competitively to current blood transfusions.
About a decade earlier, unaware of the AIDS epidemic to come, a U.S. Navy doctor and surgeon in Vietnam saw many soldiers and sailors die on the battlefield because there was not such a product, particularly one that would not require matching blood types. Such a product would be invaluable for urgent battlefield emergency care.
When the doctor returned from the war, he was determined to create such a life-saving blood product. He went to work, recruiting several researchers, funding product development through government and defense grants, and moving the development well along into animal trials. The emergence of the AIDS crisis gave the project even greater urgency.
The nascent team came to the attention of one of this book’s authors while I was a venture capital investor at the Allstate Insurance Company. . . . The Allstate Venture Capital Division would on occasion roll the dice on potentially break-away investments, particularly when there could also be a significant societal benefit. Northfield Laboratories was such an investment opportunity.
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