I have been in the German alps over the last few days attending a workshop on starting up a biotech. Funded by the Marie Curie foundation and passionately and superbly organized by my bosses, S and F, it has been an enlightening few days and here I summarize what I have learnt.
1. The idea has to bring value and have a substantial market. I suppose this is the thing that most people struggle with i.e. finding a great idea that people would buy into. In the biotech industry as well, the idea has to be grounded by many years of research and usually start out in the laboratories of universities that eventually spin-off into a biotech.
2. As with everything, you need money. This is where investors come in. In Munich as well as Singapore I imagine, good governmental support systems are usually in place in the form of grants that one can apply for. Investors also comprise of business angels (i.e. individuals with lots of private money), venture capitalists, and sometimes banks though rarely. Investors come with their own interests as well, and it is important to match this up with your own expectations. Committing to an investor just to get money may mean giving up something you are not ready to in future, which may cause great distress, and it may prove better to wait for a better-matched investor. To get the support of these investors, this is where your business pitch comes in.
3. The perfect pitch. One has to be ready with the perfect pitch – both short and long forms – to be given at any time to a prospective investor. The relationship with the investor is largely based on competence and trust. So one has to show one has the team, the skills and of course it does not hurt to create a great first impression by dressing well (I personally would not recommend wearing a tie if you are representing the team as the scientist though! Never trust a tie-wearing scientist.). To create trust, one must convince investors you have the right team for the job, balance out your own weaknesses by teaming up with people that can address them. The pitch has to be compelling and inspiring and should also cater to investor interests i.e. exit strategies (i.e. how do the investors get their money back?), timelines and grounded market valuations.
4. Intellectual property. Patents are important. And they are extremely difficult to word so a patent attorney is essential. Patents protect your idea and investors would not invest in something that has not been patented or is extremely hard to copy, so make sure you have one! The timing of patent application is also essential as it can take as long as 10 years to be approved.. giving you only 10 further years for your patent to be in effect. It also struck me how incredibly profitable a cleverly worded patent can be. The key is to make it broad to cover many possibly derived ideas but also substantiated with enough evidence of its novelty to enable approval. An example was how a patent on modifying antibody sequences by a company is now being licensed by many pharma companies that use this technology to produce their antibody-based therapeutics. This can produce substantial passive income for years!
5. The right people. 75% of all biotechs fail and many times this has been attributed to poor management. Having a team as opposed to starting out by yourself usually increases your chance of success but finding the right people with expertise complementary to your own and whom you like to work with may be challenging. As with all relationships, these working relationships require a lot of trust and should endure the test of time. Many a time teams are started among strangers, i.e. you do not have to start a business with your best friend/partner, sometimes it is advisable not to! A leader may be required to drive the process but if everyone in the team is willing to share responsibility, that helps.
6. Focus on the customer. Will customers buy your product/technology/service? This is what drives business and numerous books have been written on how to market/sell/reach out to customers. Contrary to belief, the main customer in biotech may not necessarily be patients, but is usually big pharma, since biotechs are ultimately acquired by big pharma in order to take their techonologies to the patient. As a biotech great investment in business development is required to publicize your expertise and great potential so that big pharma will take notice. A lot of the time, the attention of big pharma rides on ongoing trends – what is hot in the research field. Current hot trends involve immuno-oncology, gene editing/therapy, RNAi, and antibiotics to name a few. So often, your idea may be the bomb but the world has to be ready for it, very similar to the case of journal publications.
The landscape of employment is changing and especially as a scientist, it is no longer safe working in big pharma with their constant mergers and acquisitions often resulting in large lay-offs. Staying in academia is also becoming challenging as limited professorships make it extremely competitive amongst post-docs and PhD students. Currently industrial positions are highly sought after, with more than 70 applicants often responding to a single advertisement. So perhaps starting one’s own business provides a solution. No doubt one learns a lot from the process, with huge potential benefit if the business is a success. But of course, it takes courage… and oh yes, a good idea.