Successful life science startup entrepreneurs share the basics on starting a business.
Aspiring entrepreneurs received advice from an optimistic panel at the recent San Diego Biotechnology Networking group event. The life sciences and pharmaceutical industries are experiencing significant changes in the wake of funding reductions and the expiration of major patents. Interestingly, new opportunities for innovation are emerging as new business models are being adopted. Surprisingly, this might be the right time to found a life science startup.
To provide advice on what to consider when entering the startup arena, moderator Joe Payne, CEO of Arcturus, asked the panel to go through what it takes to get a company up and running: having the right idea, recruiting the right people, doing it at the right time, and getting the funding to get started.
The panel included a prestigious group of successful leaders in the life science industry:
The Right Idea
The time to develop a drug, medical device, or diagnostic is lengthy and therefore requires a well thought out plan for capitalizing on your idea. There is also a great deal of competition. If a startup has a great idea, it’s likely that someone else is thinking about it too. Think about and focus on the science, but follow through with appropriate market analysis and due diligence. Find the experts in your space; get to know them and collaborate with them. Critically, Susan emphasized the importance of shielding your ideas by creating a long-term strategy for intellectual property protection and the costs involved in supporting that strategy.
The Right People
Human capital is your greatest resource. Having a great idea is the first step for a life science startup. In order to bring your idea to fruition, you must find the appropriate partners. This requires stepping back and looking at the big picture and the roles required for the lifetime of the project. Kevin shared the example that when starting Assay Depot, he knew the science industry, but he needed a strong software developer to create the online platform necessary for the research exchange he envisioned.
Scientists are frequently criticized for being bad business people. However, there are examples of both scientists leading a life science startup forward successfully independently and scientists relying on business partners to help them navigate the path. Develop the acumen to recognize your strengths and weaknesses and find partners who compensate for your shortcomings.
The Right Time
You may have an amazing idea, but the market for your idea might not exist yet. Knowing your space and being active in industry trends and conversations will help you determine, when the time is right. Melinda cautioned that as people feel the excitement of an upswing in the market, they jump into a startup without thinking through the current market need, their competition and the long term resources needed for success.
There are many ways for a life science startup to bring in funding initially, including bootstrapping, offering services to jump start revenue, seed funding, angel investors, and venture capital investments. Envision long term how you see the business functioning. Evaluate where you will benefit from outside influence and control versus where it will hinder your plan. You don’t want to bring in venture capital funding too soon. But don’t try to do everything yourself, if you lack the experience for success. As life science startups approach investors, they need to remember that they need to offer investors something of value. They are looking to make money too. Be creative. Determine what your core competency is and build around that. Richard shared his experience in starting a contract research organization with little money. Rent and salary are your two major expenses as you begin, how can you be creative in getting those needs met. He bartered services for space.
Overall, the panelists encouraged the audience to examine their expertise and passions, and from that foundation life science startup opportunities will appear. As your idea progresses, find the right partners, determine when the market will be ready for your idea. Find the right financial support for you long term goals; recognize that these relationships will be long term. Take the time to think things through and make the right decisions.
Go! Be Brilliant!