Monthly Archives: March 2013

The 10 Essential Elements of Every Successful Life Science Startup

Paying attention to these 10 essential elements for a successful startup will greatly increase the prospect that you will get your hands on these keys!

Transforming breakthroughs from the lab into successful companies is a daunting but ultimately rewarding task. For some, there is no better validation of the quality and value of their scientific discoveries than the kind you get when it generates demand from paying customers. However, according to Shikhar Ghosh, senior lecturer at the Entrepreneurial Management Unit at Harvard University, 75% of startups fail largely because they have neglected one or more of the 10 essential elements of successful startups.¹

The 10 Essential Elements of a Successful Startup Are:

Compelling Value Proposition: Having a great idea or discovery does not always mean that you have a product or service that will generate the customer demand required to sustain a business. Having an experienced Board of Advisors can help you figure this puzzle out and will also provide you with the introductions to the industry experts and Key Opinion Leaders you need to feel confident that you have a viable business hypothesis.
Capital: How much money will you need to keep your operation running until you start to generate revues? How will you fund the company? Grants, Foundation money, investments and bootstrapping are just some of the ways that entrepreneurs get the funding they need to get their product or service to market.
Key Resources: You need key people on your founding team with the technical know-how and business sophistication to shepherd you company from the early days to a real going concern. In addition to the people, you need to make sure they have access to the resources they require to succeed like adequate lab space, access to equipment, reagents, regulatory guidance etc.
Key Activities: Seems like an obvious one. It is critical to develop a detailed roadmap that describes all of the strategies, tactics and activities that need to be successfully completed to reach your ultimate goal for the company. This plan will include critical milestones along the way so that the team can monitor progress and make course corrections as needed. Also, this plan will allow you to develop a realistic budget which will help you to mitigate the risk of running out of capital before you have achieved a successful launch. The best roadmaps break this down to enough detail to guide not only month to month activity but day to day efforts as well.
Cost Structure: After you have launched your product or service, your focus now shifts towards expanding profitability. Your Operations team will be looking to reducing the costs of providing your product while your Sales & Marketing team will be executing on tactics that will bring in significantly more leads, and more sales.
Key Partners: You don’t need to go it alone. Establishing strategic partnerships can help you expand your market reach when you set up co-marketing agreements and save capital when you share the cost of space, equipment and other resources that you can both profitably share. Your team will also benefit from the experience and perspective of your partner as your relationship grows stronger.
Customer Segmentation: This is something that needs to be started way before you are even ready to sell. It is important to know both who will want to buy your product as well as who will not. This will not only help you with your marketing efforts but will also insure that you build the right offering.
Demand Creation: Once you have a good idea who your customers will be, figuring out how to reach them and what message they will find most compelling becomes a lot easier. Running an effective beta-evaluation with perspective customers will provide you with key insights that will go a long way to insuring that you have a strong product launch and have a Sales & Marketing plan that will quickly scale up to meet the business growth goals you have set for the company.
Sales Channels: Having a well thought out Channel Management plan will greatly increase the chances that you will have a strong launch. It is important to know how you will sell to your customers and then develop the resources and team that will allow you to execute this well. Different channels have different demands and processes. Be sure to consider whether you will be using a direct sales force, distributors, a combination of the two and how that would work etc. Don’t’ forget to consider e-commerce!
Revenue Streams: Another seemingly obvious ‘element’. Don’t’ forget that you can get revenue for intellectual property that you can monetize through licensing fees if you don’t commercialize it. Be sure to consider other ‘products’ like extended warranties, service agreements and advanced training offerings for example. There are many ways to generate revenue besides what you get from sales of your core product or service.

Making sure your Founding Team has the expertise to manage the “10 Essential Elements” is the best way to improve the odds of success for your startup.2

The Secret to Getting this Right
The secret to keeping on top of all these ‘elements of success’ is having a founding team with the depth and breadth of experience and know-how to cover all of these areas. Each ‘element’ can require very specific skills and tactics. Furthermore, it is critical that these are customized to fit the particular needs of your company. The other thing to keep in mind here is that these ‘elements’ are not static in their timing and demands for resources. Having at least a few team members that have done this before will insure that you get all of this right. Founders should look to establish a Board of Advisors very early on to help manage all of this and or help you to find these key people for your founding team.

Notes:

Picture Credit: © Suravid | Dreamstime Stock Photos & Stock Free Images

Accelerating Innovation through Convergence

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By: Steven Munevar, Ph.D., MBA

Bringing together advances in computer science, engineering and biology is allowing scientists to create complex tissues using live cells with 3D printing.

As a researcher and an entrepreneur, the wonder of discovery and the frustration of practical application often go hand in hand. Coming from a background in engineering and biomedical science, I have found that the answer to this conundrum can be found in one word…convergence. The advent of three dimensional printing or 3D printing captures how the process of convergence can truly accelerate innovation.

What it is
3D printing is the production of any solid object from a digital schematic or model. The process of 3D printing is rather straightforward (in theory anyways) as layers of material extruded from the 3D printer are iteratively laid down in varying shapes (and on varying substrates) until the final object has been “printed”. This process is a novel departure from the usual “subtractive process” of fabrication where material is removed from a starting substrate resulting in the final shape. As this technology has matured the cost of 3D printing has reached a point where it is now more accessible to a greater number of users. So the question now is what exactly do you want to 3D print, in a word – everything!

3D printing in the Life Sciences
Let me begin with an example where the convergence of regenerative medicine and 3D printing has led to a push in 3D printing of tissues and organs, yes that rights “printing” organs. Although still early in its application, examples are growing for the use of 3D printing in regenerative medicine in both academia and industry. One example is the San Diego based company Organovo, which is focused on utilizing 3D printing technology in the form of “bio-printers”. The company’s goal is to create new tissue that can be used for both research as well as therapeutic applications. In this example, the “bio-printers” utilize ink made up of living cells/solution mixtures which are then deposited onto a specialty scaffolding substrate to generate new tissues, layer by layer, yielding for example small blood vessels, among others.

Impact of 3D printing, rethinking manufacturing
Now let’s consider 3D printing technology in the broader context of industrial manufacturing. Manufacturing has been in decline in the US as other countries, with access to lower cost labor, have become favored locations for manufacturing. With the advent of 3D printing, President Obama announced, in his State of the Union Address, that he sought to reignite manufacturing in the US through the creation of 3D printing enabled manufacturing “hubs”. Spearheaded by the National Additive Manufacturing Innovation Institute (NAMII), the goal of this public-private partnership is to bring 3D printing (or additive manufacturing) technology to bear against the challenge of revitalizing the manufacturing industry in the US and regaining our competitive advantage worldwide. The applications for 3D printing enabled manufacturing have been touted to span everything from defense to aerospace as well as automotive parts manufacturing among others.

3D printing and the future
From novel technology to enabling regenerating medicine to revitalizing manufacturing in the US, 3D printing seems to be converging toward a radically disruptive tool. Still not convinced as to the power of technology convergence? Then let me conclude by highlighting a recent event hosted by the Massachusetts Institute of Technology (MIT) Media Lab, and organized by British Broadcasting Corporation (BBC), titled What If…We Could All Talk to Joi Ito? Joichi “Joi” Ito is the current Director of the MIT Media Lab and a well known activist, entrepreneur, and venture capitalist. During this event, when asked to lend his thoughts on the future of technology and the internet, Joi shared a vision where consumers would play an increasingly active role in designing AND producing the retail products they wanted utilizing platform technologies based on 3D printing and enabling design tools. Joi mused on a retail industry completely re-envisioned through the advent of 3D printing technology, the amazing exchange of information through the internet, and our continuous desire as consumers for customization, diversity, and real time access to products.

From medicine, to industrial manufacturing, to customized consumer products, 3D printing continues to converge with enabling technologies, market opportunities, and consumer demands in ever growing and amazing ways. Looking ahead as this technology matures and further grows in accessibility we will likely be seeing more of 3D printing. The real question now is what will you be 3D printing first? Now just imagine if we could have done this for the Segway…

Picture Credit: © Chrisharvey | Dreamstime Stock Photos & Stock Free Images

Never Giving Up After Failure Will Lead to Success

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By: Kelsey McCormick, M.S.

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:

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

Startups and the Role of the “Other” Development

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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

Suggested reading

UpStart Life Sciences

Bringing Science to Marketplace Success

Monthly Archives: March 2013

The 10 Essential Elements of Every Successful Life Science Startup

Accelerating Innovation through Convergence

Never Giving Up After Failure Will Lead to Success

Startups and the Role of the “Other” Development

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