Category Archives: Business Development

Three Tips to Insuring That Your First Sales Are Not Your Last

3d line chart

Upward sales momentum is rarely smooth, especially in the early days. Use insights from your first customers to win the larger number of pragmatic customers that dominate your market.

By:  Andrew Johnson, Ph.D.

Growing sales from your initial product launch requires a special approach with disruptive technology in the Life Sciences.   In a typical Life Science or biotech startup, your very first sales will likely come from some (hopefully most) of your beta evaluators.  Often, you will have a slew of sales at the beginning followed by a very frustrating period of time where every new sale takes a huge amount of time and effort to win.  Some have called this the ‘Valley of Death’ since it looks like your sales momentum has fallen off while you are burning through your capital reserves.

What’s going on?
Geoffrey Moore discusses this situation perfectly in his book “Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers” (This book has become a classic and is a valuable source of insight to any entrepreneur with new technologically advanced products).  The premise here is that most if not all of your first customers are ‘Early Adopters’ but the market that you really want to reach and where the success and failure of your company hang in the balance is with ‘Mainstream Customers”.  There are never enough Early Adopter customers to be an attractive market.  However, these customers are valuable since they will help you to figure out how to reach the bigger market later on of the pragmatic ‘Mainstream Customer’.

Know thy customer
Knowing the difference between the characteristics of an ‘Early Adopter ‘ from  a ‘Mainstream Customer’ holds the key for getting across Moore’s ‘Chasm’ or the ‘Valley of Death.’  Here is how he defines both customer types:

Early Adopters … buy into new product concepts very early in their life cycle … they are people who find it easy to imagine, understand and appreciate the benefits of a new technology, and can relate these potential benefits to their concerns … [They] do not rely on well-established references in making … buying decisions, preferring instead to rely on their own intuition and vision…”1

“[Mainstream Customers] … are driven by a strong sense of practicality.  They know that many of these newfangled inventions end up as passing fads, so they are content to wait and see how other people are making out before they buy in themselves.  They want to see well-established references before investing substantially.”1

Tips for winning ‘Mainstream Customers’
The following tips have been field tested and shown to work.  They are based in part on the insights gained from knowing the difference on what it takes to appeal to your first customers and what is compelling to all the rest.

      • Build early credibility using Key Opinion Leaders (KOL’s). – Learn who these people are from your first customers (you might think that you know who they are already, just validate this with these customers first).  Engage with these Key Opinion Leaders through collaborations, sponsorships and other ways (see  blog post ‘The Key to Key Opinion Leaders’ ) and get their endorsements and testimonials.
    • Get published – There is no better way to validate the impact of your new product though publication.  Work with your beta-evaluators and early customers to help them to publish.  Academic journal publications are most desirable but look to get poster presentations, articles in trade publications (printed and electronic) as well.  As good as the papers that your own scientists are publishing, the ones by outside investigators will hold the most value for the ‘mainstream customer’.
    • Stay visible while building credibility – Start a blog where you r scientists can showcase their mastery of this field of study and how your products are impacting your customers. (Be sure to keep your blog posts free of anything that looks and feels like an advertisement, keep this about the science)Where possible, see if you can get early customers and Key Opinion Leaders to be guest bloggers for you by submitting a post or two.

Reference: 

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Never Giving Up After Failure Will Lead to Success

By: Kelsey McCormick, M.S.

Sky with sun and clouds

The passion of your team with the guidance of a regulatory expert will be critical factors in getting the approvals you need for commercial success.

You have to work through the “wrong” ones to get to the “right” one. What does that make you think of? It makes me think of 2 things: 1) Relationships, and 2) Drug Development. I know, you’re thinking, “huh?”

Think about it though . . . dating . . . how many people did you date before you found your “Mr.” or “Mrs. Right?” (Those who are still looking don’t give up!) Think of all the time, emotions and money spent on the “wrong” ones! In my case . . . there was a lot of “sifting” until I found my loving hubby (Brownie points if my husband actually reads this! Better yet, if he doesn’t mention this, he’s sleeping in the shed tonight because it means he didn’t read my newsletter!). It was from those “Mr. Wrongs” that I learned what I ultimately wanted (or didn’t want!) in a life partner! I am now happily married (10 years already!) with two wonderful kids (cue cheesy love song).

The regulatory challenge of drug development
Drug development . . . as you all probably know (and experience!), there is much failure in this amazing, but challenging industry we live in! It can be frustrating and draining to spend so much time, money and even emotion on a product, to then have it fail in Clinical Trials and never make it to market (cue depressing break-up song).

“In general, it costs an average of $800 million and takes 12 to 15 years before a drug makes it from the lab bench to your medicine cabinet!”(1)

The regulatory roadmap
It’s tough to summarize activities over 11-14 years, but in short (as most of you know), the process goes like this:

Drug discovery begins with an idea for a new disease target, often licensed from a university laboratory.

–Industry researchers start sifting through hundreds (sometimes thousands!) of compounds, looking for one that will hit the biological target.

–The lead candidate is tested in animals to look for toxic side effects and potential efficacy.

–IND Phase: clinical trials in humans. These trials eat up much of the development costs.

  • Phase 1: small number (about 20-80) of healthy volunteers to assess safety
  • Phase 2: medium number (about 100-300) of patients (affected by the disease the drug is indicated for) to assess efficacy, safety and pinpointing acceptable dose range
  • Phase 3: large number (about 1000-3000) of patients to assess efficacy, safety and identify side effects.

And even more depressing . . . only about 1 in every 5,000 drugs in development actually make it to market.

What you need to successfully navigate the regulatory roadmap
Talk about a high failure rate (kinda like youngins dating)! YUK! There’s a ton of detail that goes into the above lengthy process. It takes a lot of brains (like yours), a lot of hard work (like mine), and a lot of hope (optimists) to get to market.

In trying to find the bright side of each of these depressing realities, which in turn will help motivate us: as you see, the cost to develop a drug is ridiculously high . . . this helps me feel a little better when I go to buy an OTC or prescription drug and my wallet is quickly emptied! And with the high failure rate, I’m very comforted in knowing how detail-oriented, diligent and CAREFUL drug companies and the FDA are when developing these products and reviewing the data. Makes me feel a little safer knowing the process isn’t rushed just to get a drug on the market.

So how do we continue on with our daily jobs knowing the painfully low success rate in our industry? In my mind, it’s all about perspective, persistence and positive thinking.

Quick Tips:

  • As in dating, we have to weed through the bad ones to get to the good one! DON’T RUSH IT. There’s no turning back (well, not easily and pain-free anyway)!
  • Each failed drug or failed relationship is NOT a waste of time or money. TONS of useful information is gained from these processes. Stay positive no matter the results, and be proud of the work accomplished.
  • Take advantage of all the years of knowledge that’s out there (literature, colleagues), and consider similar products that have failed and/or been approved. You’ll have a head-start!
  • Know your competition . . . risk of failure is that much higher when someone else is developing a similar product with the same disease indication.
  • Have passion for the product you are developing . . . that helps maintain the positive attitude and “I won’t give up” mentality!

I won’t give up, every day that passes; every lesson learned . . . we are that much closer to ‘the one’.”

Notes:

  1. Cost and time line estimates based on over 15 years of industry experience of McCormick LifeScience Consultants, LLC.

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Startups and the Role of the “Other” Development

Business people

There IS a difference between Business Development and Corporate Development

By: Michael Kaiser

It is an accepted fact that Business Development is not the same as Corporate Development, although they may (or can) intertwine. Even today, business development stands as a euphemism for sales and marketing, but especially in the case of high technology that definition is less acceptable and more complex. Whereas business development is an organic growth, corporate development’s inorganic role is the opposite, with its emphasis on mergers and acquisitions, alliances and joint ventures.

What is Corporate Development?
There are several definitions of Corporate Development but the following ones address the essence of this subject:

A) Corporate Development applies to planning and strategies that assist a company to achieve its goals (Wise Geek -1)

B) Corporate Development refers to the planning and execution of a wide range of strategies to meet specific organizational objectives (Wikipedia – 2)

C) Corporate Development encompasses the various facets of the corporate portfolio, growth, and strategy. (Boston Consulting Group – 3)

Does a startup need a Corporate Development team?
The answer could be “No and Yes”.

“No” because the entrepreneur(s) behind the birth of a new company based on their vision, initiative, creativity, technology, personal values, trade connections, etc. are building their product and/or service offering on the premise that the growth of their business is dependent on sales and marketing. At the onset of a startup, its actions will resemble more those of guerrilla warfare than those of a strategic military operation. And therefore…

Yes” because a lack of growth, or inversely, an unexpected growth demand requires the help of seasoned experts for corrective advice to prevent mistakes and steer the company towards success. And that’s where the professional corporate colonels and generals devise the client’s strategies.

More importantly, a primary reason a startup has to deal with a corporate development team is the need for investment sources, such as venture capital and crowd funding described as the “the collective effort of individuals who network and pool their money …to support efforts initiated by other people or organizations… in support of a wide variety of activities, startup company funding, inventions development, scientific research…  Crowd funding can also refer to the funding of a company by selling small amounts of equity to many investors.” (Wikipedia – 2)

Corporate development strategies
The strengths, weaknesses, opportunities and threats (SWOT) analyses of startups, mid-sized or large companies is just one basic tool used by corporate development professionals in order to objectively determine and address the challenges and opportunities of new technologies, products and services. Here is a brief example provided by a consulting firm on the subject of some critical questions for an alliance or joint venture case  (Boston Consulting Group – 3):

  • In which areas—geographies, product lines, or functions—might an alliance or joint venture make sense? Is it better than an outright acquisition?
  • For a given opportunity, who are the right potential partners?
  • How can we prepare for alliance or joint venture negotiations—for example, for value capture and split?
  • How can we ensure constructive management and decision making in the alliance?
    • How can we set up an active joint-venture-and-alliance portfolio-management process for evaluating strategic options?

Another consulting firm defines corporate development as a function with three features of excellence (Ernst & Young – 4):

  • Strategic alignment with broader business goals
  • Well-documented transaction processes
  • Close relationships between corporate development and the rest of the organization

The bottom line
As social media, software and hardware applications, local and global connections and narrower opportunity and time horizons emerge due to advanced technologies, startup companies in the life sciences and other high technology sectors have to increasingly depend much earlier on the role of professional corporate development working in unison with a company’s organic business development in order to sustain their financial and market viability.

References

  1. Wise Geek (http://www.wisegeek.com/what-is-corporate-development.htm)
  2. Wikipedia  (http://en.wikipedia.org/wiki/Corporate_development)
  3. Boston Consulting Group (http://www.bcg.com/expertise_impact/capabilities/corporate_development/default.aspx)
  4. Ernst & Young (http://www.ey.com/GL/en/Services/Transactions/Toward-transaction-excellence–The-DNA-of-the-corporate-development-function)

Suggested reading

  1. Deloitte (http://www.deloitte.com/view/en_US/us/Services/Financial-Advisory-Services/Corporate-Development/696435131bc16310VgnVCM1000001a56f00aRCRD.htm)
  2. Forbes Magazine: (http://www.forbes.com/sites/scottpollack/2012/03/21/what-exactly-is-business-development/)

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Taking Your Show on the Road: Using Your Science to Boost Sales

Green Comet

Dazzle them with your science and you will get more than just sales leads!

By:  Andrew Johnson, Ph.D.

The technical roadshow can be a great way to build excitement for your product(s) with potential customers, build your brand and engage with the researchers and other professionals whose feedback is most valuable to you.  Use these tips to make the most out of the time and effort this requires to make this work for you.

Maximize the Impact of Your Technical Roadshow with These Tips:

      • Frequency – Schedule one or two roadshows per month.  Most academic departments and even some biotech firms have regularly scheduled ‘Journal Clubs’ or ‘Brown Bag’ lunches where speakers are invited to share their work.  These are ideal venues for your technical presentation.  Give each of your sales team members the opportunity to schedule these.

 

      • Content – The goal of these presentations should be to excite your audience about the science.   Interested attendees will seek to learn more about your company, your technology and your products afterwards (sometimes even during the Q&A session).  Keep the sales stuff out of the presentation other than perhaps a slide that briefly describes your products  and focus on how your product has impacted the field.

 

    • The Presenter – The presentation should be given by a scientist traveling with the sales person who scheduled the event.  Make sure that the science and business side are kept separated by having the sales person introduce your speaker and take all questions regarding business (pricing, scheduling demos, etc.)  Nothing turns a scientific crowd off faster than a sales pitch masquerading as a technical talk.  The other benefit of having two people at these events is that the sales person can provide valuable feedback on how well the presentation is being received and where improvements might be made to increase impact.  On the other hand, the speaker can assess how well the audience is interacting with the sales person and provide them with equally valuable feedback for how to better connect with potential customers.

 

  • Duration – Keep the presentation concise and focused.  The presentation should be about 20 slides long and take about 25 – 30 minutes max when you are rehearsing it without interruption.  This will allow for enough time for questions during and after the presentation.  Your goal here is to engage with your audience and the more questions the better.  The comments and questions from your audience are a goldmine of information on how well your technology is perceived, what might be trends in the field that you should be following and even what your next product iteration might be.  (Another reason why it is good to have two people at these events is that they can take notes of all of these insights)

Preparing and delivering a compelling and effective technical roadshow program is not trivial.  There is a lot of work required to not only get your slide-deck right but also making the event itself work well (measured by lots of questions from your audiences and ultimately lots of strong sales leads).  Stick with it, it gets easier over time and you might even find yourself enjoying this!

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Life Sciences in 2013: Startup Opportunities and Challenges

girl on beach at sunrise

Use these Life Sciences market insights from 2012 to maximize your opportunities in 2013

By:  Michael Kaiser

The New Frontier: Bioinformatics, Genomics and Proteomics
The Human Genome Project opened the floodgates for three closely intertwined disciplines:

  • Bioinformatics provide new database methods to store genomic information, evaluation of experimental data and improvement of molecular techniques.
  • It incorporates data from multiple departments within pharma/biotech companies and it is a critical tool for the design and management of smart databases.
  • Genomics is an area that is the vehicle for a dramatic increase in therapeutic and diagnostic pipelines, with a worldwide market potential in the billions of dollars. Genomics is divided into structural and functional areas, the former involving the use of genetic and molecular methods to develop genome maps, the latter aims to discover the biological function of particular genes in health and disease, primarily through high-throughput screening techniques.
  • Proteomics has been described as the link between genetics and pharmaceuticals. The fulcrum of this discipline lies in the proteome, the complement of proteins that are key to the discovery and development of new drugs and this fact explains its scientific and commercial importance for the biopharma sector.

The foregoing demands exposure and experience in dealing with academia, scientific personnel and the highest levels of corporate decision marketing.

Healthcare
The analysis of epidemiological trends allows biotech and pharmaceutical companies to direct their drug discovery and/or marketing efforts. Significant business opportunities exist for development and licensing. For instance, biomaterials may include implant prosthesis, fiber optics for minimally invasive implant or corrective surgery, and biochemical suturing, a significant business opportunity in improving healthcare and a significant contribution in reducing healthcare costs.

Home work
An essential component of the life sciences, it covers areas such as intellectual property, field of use, royalties, head-of-agreement terms, etc. Complex negotiations require the expert advice of specialized legal counsel, experience in business and corporate development, inclusive of technology evaluation (licenses, patents, time-to-market) and last but definitely not least, investor relations.

Competition
Here the key is: “Understand your competition as well, if not better than thyself“.
To that end the development of net-centric skills in knowledge management and data mining proved to be very useful to start-up and established life sciences companies in the planning of their corporate strategies. A clear understanding of e-commerce and sales and marketing tools is now an essential requirement in competitive analysis.

Entrepreneurship
To be one is to understand one. A background in multinational corporations and start-up companies is a plus. Ideally, the entrepreneur will thrive by working in an innovative, fast-paced environment. However, the reality of the economic marketplace dictates that equal attention be given to the ‘intrapreneurs’, those individuals who, from within a formalized corporate structure, implement effectively the vision of the entrepreneur. This is a truly symbiotic relationship.

Globalization
The liberalization of world trade and the integration of regional markets such as the EU, NAFTA and ASEAN dovetail with organizations such as the WTO and GATT. Paradoxically, in the process of lowering trade barriers the pendulum has swung too far and we see an increase in protectionism by both industrial countries and newly industrialized ones. The fact that the Internet has become an effective business facilitator has not replaced the personal contact in science and humanities. In a global economy, dealing with diverse cultures is a clear and professional success marker.

Mergers and Acquisitions; Strategy; Technology Evaluation
The impact of IT on the life sciences has accelerated the process of consolidation and integration in the life sciences, particularly in those cases where a large pharmaceutical concern and a biotechnology company with a valuable technology platform are concerned. Shareholders, institutional investors and venture capitalists have much higher expectations, with a short time horizon, for a return on their investment.

To meet this challenge, due diligence and expert advice in investor relations, marketing and corporate development will allow start-ups to identify and execute the driving forces of this process. The cost of mergers and acquisitions requires careful analysis of corporate synergies, innovative financial instruments and fundamentals, experienced investment bankers and financial institutions, assessment of net present valuation and internal rate of revenue, evaluation of technology and future corporate strategy, top management succession, and ability to transfer technology across corporate and international boundaries.

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