Build enough of a safety margin, and you can survive being wrong (or maybe not).
Benjamin Graham, in his book The Intelligent Investor, tried to distil the secret of sound investment into three words: "Margin of Safety." His argument was in essence that the function of a margin of safety is to render unnecessary an accurate estimate of the future.
Most founders believe that they are doing exactly that. You extend the runway. You broaden the pipeline. You hire ahead of the curve. Each decision feels like discipline. But buying safety in one place often costs it in another and that cost is not always visible at the time of the decision.
This INSIGHTS examines three dimensions of scenario-planning and decision-making that most of you will face, or are already facing, where the perceived safety margin may in fact work against the intention behind it:
Pipeline breadth vs. cash runway. Multiple programs feel like diversification. But great programs are rare, and the probability that a single early-stage company holds several truly exceptional ones is in fact low. The capital required to sustain that bet is certain. The payoff is not.
Speed to clinic vs. quality of product. First-in-class usually beats best-in-class and offers real competitive value in many settings. But asuboptimal molecule or product taken into first-in-man studies too early will spend millions to produce a result that cannot be revised. The question is not only how fast to move, but which end of the trade-off you can recover from.
Building breadth & depth of team vs. burn rate. A complete C-suite signals readiness. But team building should follow strategy, and strategy at the early stages can shift considerably with the data. A team assembled before the data exists to justify it can become a constraint rather than an asset, expensive to change and misaligned to a strategy that the science has since moved on from.
Each of these choices needs to carefully considered in parallel. The question worth asking is whether the protection it creates is real or assumed.
Ankit Mahadevia is a physician–entrepreneur and biotechnology executive with extensive experience in company formation, capital strategy, and clinical advancement. He currently serves as a CXO at Curie Bio, where he works closely with founding teams on corporate strategy, financing, and progression to human clinical trials.
Dr. Mahadevia has co-founded nine biotechnology companies, six of which were acquired in transactions collectively valued at more than $5 billion. Across companies he has led, advised, or supported, more than $1 billion in financing has been raised. He serves as a board member of Judo Bio and advises multiple early- and growth-stage life sciences companies. He earned a BA in economics and biology, summa cum laude, from Northwestern University, an MD from Johns Hopkins University School of Medicine, and an MBA in healthcare management from the Wharton School.
Why This Is Relevant for You
The framework Ankit applies is direct and underused: which end of a tradeoff is recoverable? A weak molecule taken into first-in-patient studies is not. A fractional leadership team can be upgraded. A pipeline stretched across several programs may consume the capital that a pivot would have required.
McKinsey's 2024 analysis found that despite rising investment, biopharma R&D productivity has been flat for over a decade, and identified portfolio prioritisation—the willingness to concentrate resources on fewer, higher-conviction assets—as one of the central levers distinguishing higher-performing companies from the rest: "Making More Medicines That Matter," McKinsey, July 2024.
The three scenarios in this session sit exactly at that decision point:
where to concentrate, when to move, and who to build around.
Questions to reflect on before the session:
Of the three tradeoffs—pipeline breadth, speed to clinic, and team construction—which one are you navigating now, and what single assumption is your current position most dependent on?
For each major capital commitment you have made in the past year, how would you categorise the downside: recoverable, or not?
Where in your organisation is the appearance of a safety net doing the most work—and when did you last examine whether it would hold?