YES. SIZE MATTERS.
Scale Economies
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This is Part 6 of my 7-part series on the 7 Powers — the frameworks TechBio companies use to build moats and avoid becoming capital-burning science projects.
This week: Scale Economies.
In plain terms: lowering unit costs as you grow.
Previously on Clear Thinking:
Counter-Positioning: Founder–Market Misfit at Delve Health
Cornered Resource: Itay and Beyond (brain-on-a-chip)
Switching Costs: SAP and Flatiron Health
Brand Power: Selmer Paris and Caris
Process Power: Iktos — AI & Robotics Rewrite Drug Discovery
Before we get into TechBio, a quick refresher:
Helmer’s 7 Powers outline the ways companies create lasting advantages: Scale Economies, Network Effects, Counter-Positioning, Switching Costs, Brand, Cornered Resources, and Process Power.
Today, I want to go somewhere unexpected — with a $32B anti-design pattern that shows TechBio founders exactly what not to copy.
Enter: Wiz.
Wiz
One of the fastest-scaling enterprise companies in history is an Israeli cybersecurity rocket ship called Wiz.
Wiz went from zero to $100M ARR in roughly 18 months — a growth curve so violent it breaks your intuition about how companies scale. Founded in 2020 by Assaf Rappaport, Ami Luttwak, Roy Reznik, and Yinon Costica — the same team behind Adallom — Wiz was acquired by Google in March 2025 for $32 billion, the largest cybersecurity acquisition ever.
Wiz is what founders dream about: hyperscale adoption with near-zero marginal cost and compounding network effects across tens of thousands of cloud workloads.
And that’s exactly why it’s dangerous for TechBio founders.
Wiz tempts people into the wrong conclusion:
“If Wiz did it, why can’t we?”
Here’s why:
Wiz is pure software.Infinite distribution. Federated data. Tens of thousands of cloud workloads feeding a single learning loop. Every new customer makes every existing customer safer.
TechBio is none of that. It’s wet lab cycles, biology, regulated markets, batch processes, physical infrastructure, safety layers, and 7–12 year timelines that don’t care how fast you ship product refreshes.
If you use a cyber playbook to scale a TechBio company, the only thing you accelerate is burn.
This is why Wiz is the perfect anti-design pattern — a masterpiece of the wrong genre.
And it’s the right setup for what comes next:
The three design patterns that produce scale economies in TechBio.
3 Patterns for achieving Scale Economies in TechBio
Venture Studio + Industry Partnership
AION Labs, Promise Bio
Building upon the thriving Israeli innovation ecosystem, AION Labs is a first-of-its-kind Venture Studio built by global pharma, technology leaders and investors that have come together to create and adopt AI technologies that will transform the process of drug discovery and development for the betterment of human health.
AION Labs partners are AstraZeneca, Merck, Pfizer, Teva and AWS.
Partner datasets are used to train multiple platforms without compromising data integrity and core IP of the pharma partners.
A single pharma partnership can de-risk an entire pipeline for a TechBio startup
Talent circulates inside the studio, not out of it
Validation cycles shorten; kill rates improve
You can see the Life Sciences Today episode where I talk to Mati Gill who runs AION Labs - here
You can see the Life Sciences Today episode where I talk to Ronel Wexler co-founder and CEO of Promise Bio - here
Academic Partnership
The German model, Nurexone (Lior Shaltiel)
Germany has long had a tradition of cooperation between universities and industry. One of my first guests on the podcast was Dr. Lior Shaltiel, Founder and CEO at NurExone. Lior spent a good portion of his career in Germany and he brought that approach with him when he and his family returned to Israel. Lior leads the Biomed MBA program at the Hebrew University.
You can see the episode with Lior - here
Academia is the TechBio equivalent of a hyperscale cloud: decades of accumulated knowledge, tissue banks, translational programs, wet-lab infrastructure, and researchers who go deep where companies can’t afford to.
Academic ecosystems generate:
proprietary biological insights
defensible platform IP
talent streams
long-horizon research that compounds over years
This produces a different kind of scale economy: deep time.
Government Stimulus & National Infrastructure
Israel Innovation Authority — Shai Melcer’s Bioconvergence Program
This is the rarest and most far-reaching pattern: ecosystem scale.
Synthetic biology, biochips, 3D bioprinting
Multidisciplinary talent pathways
National-level biological data generation
Regulatory fluency with foundation tech + the Israeli single-payer health system
Shai is doing more than making a lot of small bets. He’s building an ecosystem for the next 50 companies.
The Real Lesson
Wiz is a masterpiece — but of the wrong genre.
Cyber scales through cloud effects.
TechBio scales through ecosystem effects.
If you want a defensible company in TechBio, don’t copy cybersecurity.
You already know that wet labs, regulated markets, batch processes, biology, safety, capital intensity, and 10 year timelines are hard.
As Lior Shaltiel put it when I asked him what was his hardest day as a founder? “every day”.
We need to copy studios, universities, and nations that know how to compound biological progress.
Scale economies in TechBio require data, talent, tooling, and regulatory familiarity — assets that get stronger with every additional experiment, dataset, founder, AI model and collaboration in all 3 design patterns: Academic, Industry, Government.
This is what Shai Melcer and the Israeli Innovation Authority’s Bioconvergence program are trying to build: a Bioconvergence ecosystem that can support Scale Economies in a highly competitive, very fast moving market where fund-raising is hard.
More multidisciplinary teams → more novel platforms
More biological data generation → better AI models → faster discoveries
More infrastructure (biochips, biomanufacturing, 3D bioprinting) → lower marginal cost for the next wave
Fluency in frontier tech → regulatory requirements → proximity to hospitals → more Israeli TechBio startups
More successful companies → reinvestment, exits, royalties → more fuel for the system
This Week on Life Sciences Today — the Israel Innovation Authority
This week on Life Sciences Today, I sat down with Shai Melcer, who leads the Bioconvergence programs at the Israeli Innovation Authority — one of the most forward-looking national initiatives in global TechBio. Shai’s team sits at the intersection where biology meets AI, computational science, micro-engineering, and advanced manufacturing. Their mandate is ambitious: build multidisciplinary teams, fund breakthrough platforms, and turn Israel into a global hub for biological data generation, biomanufacturing, and next-generation diagnostics.
Shai oversees a portfolio that ranges from AI-designed enzymes for cell-free manufacturing (Enzyme) to VOC-based early cancer detection using beagles as ultra-sensitive biosensors (Spot It Early). He’s also steering massive investments in synthetic biology, biochips, precision fermentation, 3D bioprinting, and human-capital development.
Israel’s edge, he argues, comes from capital efficiency, fast pivots, world-class engineering talent, and a regulator uniquely fluent in frontier tech.
BUT his goal is more ambitious than funding startups: It’s building an ecosystem for Bioconvergence at scale.
Visit the IIA here
You can see the Bioconvergence at the IIA episode here
About Me
I’m a 5× founder who learned hard lessons the hard way.
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