Tag Archives: business model

The Successful Startup: Transforming Your Vision into Reality

Night sky with dish

The successful launch and growth of your startup depends on the skillful integration of great vision and ideas with execution and commercial know-how. Finding your business or technical complement on day one will help to insure that this becomes reality.

By:  Andrew Johnson, Ph.D.

Gazing at the night sky can be an inspirational experience.  For some, there is more to this than just naming and tracking the celestial objects in the sky.  Some of the most interesting and bizarre objects in space are invisible to the naked eye (even to the naked eye aided with the most powerful telescope).  The discovery in the 1960’s of the existence of Neutron stars and Black Holes (not visible to the eye) were not only important discoveries in and of themselves but they allowed for some of the most powerful confirmation of Einstein’s General Theory of Relativity by allowing the actual measurement of things like the bending of light by gravity among other bizarre predictions from the theory.

What has this got to do with my startup?
The stories that are told about these discoveries take on an almost mythical narrative.  Think Einstein in his patent office in Berne, independently and brilliantly coming up with his radical new ideas about physics by himself in a sudden flash of insight (not entirely true).  The key here is that these ideas would remain obscure theoretical conjectures without the hard work and ingenuity of the experimental scientists that built the instruments and conducted the experiments that not only confirmed the validity of Einstein’s work but have even allowed them to be applied in ways that make our modern technologies work (GPS would not function properly without accounting for the dilation of time due to the stronger gravitational field at the earth’s surface relative to the global positioning satellites, as predicted by the General Theory of Relativity.  If this was not compensated for in your GPS, you would be off course by 10 meters in 1 minute).

Why the ‘Odd Couple’ has a better chance of launching your next product
So as we can see from this example, the successful transformation of a great idea into a practical and valuable product (your GPS) requires the expertise of complimentary but different professionals.  Theorists and Experimentalists are as different from one another as scientific founders are from their business counterparts.  However, it takes the ingenuity, passion and drive of each to make the alchemy work of transmuting a great discovery and idea from the lab bench into a successful product on store shelves (or e-commerce sites).

Getting theory and practice together
It is the rare individual that has all of the qualities that are essential to making a technology based startup a success by themselves (I would posit that this person really does not exist).  It may seem very early to think about the commercial side of your business when you are still working on its technical feasibility.  However, if your vision and dream is to someday create a company to commercialize your discovery, you need to find your business or technical counterpart as soon as possible.

Most Life Science companies are founded by scientists with exciting discoveries from their lab.  These companies often languish for lack of adequate capital to take them to the next step.   A quick look at the companies that are successful in getting the money they need to make this work reveals that, more often than not, they have a strong ‘Odd Couple’ founding team.  Speak with any investor and they will tell you up front that they would much rather invest in an ‘A-Team’ with a ‘B-idea’ than the other way around.  What is an A-Team?  This is a powerful team composed of both technical and business excellence.  This type of founding team insures that the science is backed by a compelling business model (and plan).   Potential investors find these companies especially attractive since the science and business hypothesis are equally strong.  This also insures that the requisite expertise is in place to actually achieve the milestones that have been presented (thereby de-risking the investment some).

Take Home Points:

  • Look for your counterpart on Day 1:  The day you decide that you would like to start a company to commercialize some great new technology, start looking for your business or technical counterpart.  They should share your passion, be innovative and also compliment your own talents.  For example, if you are an introvert, consider finding an extrovert.  If you are a visionary thinker, team up with a detail oriented achiever.
  • Remember it’s the A-Team that gets the cash:  A well balanced technical and business team with great connections has the best chance of beating the odds in the rat-race to win the funding you need to get things off the ground.
  • Keep your eye on the prize:  The many challenges that startups face along with the issues that can arise when working with team members that differ from you can seem overwhelming.  Remembering that everyone on the team (make sure that they do) wants this to be a huge success can help you make the compromises, delegate authority and responsibility and cultivate the flexibility that are essential elements of a powerful A-Team member.

Further Reading:

Picture Credit:  “Satellite Dish Under Starry Night” by twobee, FreeDigitalPhotos.net

The Startup Business Plan: Charting Your Path to Success without Wasting Time

Treasure Map

Your startup business plan will be like a treasure map to show you and the team the shortest path to the gold while avoiding dangerous traps.

By:  Andrew Johnson, Ph.D.

It might seem trendy to ‘just do it’ but it is pretty difficult to make sure that you are ‘doing’ the right things if little forethought has gone into what is critical for your company’s success.   There are those who propose skipping this step, calling it a waste of time.  The reasons given are that as soon as the plan is ready it is already out of date or “we know what we need to do already”.  Many of these views come about from a misconception of what a business plan really is and what it can do.

A business plan is…
A good business plan gives founders the opportunity to clearly state and communicate their vision of the company with the rest of the team,  investors, key opinion leaders and other VIP’s that are critical to the success of the company.  The founder, his senior team and trusted advisors will be able to use the exercise of preparing a solid business plan to simulate how the proposed company will ultimately achieve success.  Think of it as a dry-run.  Gaps in the business model, feasibility issues with the underlying technology, manufacturing scale-up issues and other key elements that are critical for success will easily be uncovered during this effort.  Since this is essentially a simulation of how you envision things to go, any gaps and pitfalls can be identified early before any time, effort or money is wasted.  In addition to this, the business plan will allow the senior team to get valuable feedback from outside industry experts that will have a direct bearing on the company.

A business plan is not…
Having a clear understanding of what does not constitute a good business plan will not only help you in the preparation of the right plan for your organization but allow you to avoid wasting time.

  • Needed only to attract investors:  Yes, it is true that most investors will insist on reviewing your business plan (often they only read the executive summary) before deciding whether they have any interest in a further relationship (never mind making an investment).  However, the real value here is that you will have a detailed strategy mapped out to guide your progress and even a detailed task list for the team.
  • A long, boring document for ‘business types’:  Nobody wants to read or review anything that is boring or valueless.  If you can cover all of the essentials of your business in 5 pages then that is how long your plan will be.  In fact, it is better to start with a shorter plan in the beginning and then amend it as you make progress and learn more about the things that are most important for your success.
  • A static document:  The preparation of a business plan it not something that you complete and then file away for posterity.  It should be a living document that changes as your company grows and as market conditions that impact it are uncovered.  The key here is that with a good plan in place, you and the team will make conscious decisions to make a change rather than just changing course every time something new comes along.  A business without an ‘Evolving Business Plan’ is doomed to run out of time and money by constantly chasing issues that really should be ignored.
  • Something that can be outsourced:  Some of the hard work here can be defrayed by hiring an experienced consultant.  The founder and the senior leadership team will need to work closely with this ‘hired gun’ to make sure that the final product is a business plan that will drive the success of the company rather than a generic business plan (a true waste of time and money) that has little to do with the particulars of your company.

Spending your time creating the world’s best business plan is a waste of time and money
You don’t need the world’s best business plan.  You need the business plan that will provide you with the details and guidance to chart your company’s path to growth and success.  It should be no longer than that and it need not be fancy looking or printed on heavy bond, acid-free paper.  Spend the quality time you need with your leadership team (and consultant if needed) to draft up the best plan you can in a week or less.  You will need to keep updating it and filling gaps but get at least a reasonable one in place early.  The leadership team will frequently make changes to it as progress is made and new findings are uncovered.  Someone with expertise in creating effective business plans can be a great asset to your team in terms of creating a version of it that will be most appealing to potential investors in your market.

Take Home Points:
You need a right-sized plan to help you avoid wasting time and money and…

  • Avoid creating a great product that does not have a ready market
  • Discover that a huge need in the marketplace does not have a viable business model for growing a profitable company
  • Identify what  the next most important tasks are
  • Reveal underlying risks and opportunities that may not be obvious at first

Resources:

Picture Credit:  nicora via photopin cc