The Ansoff Matrix

As mentioned in the previous post, business success involves thinking and planning ahead. The two main vectors of commercial growth are product development and market development. The Ansoff Matrix is probably one of the oldest business strategy tools, designed to help businesses think about strategies for growth and their associated risks. Developed by  Igor Ansoff, a Russian-American Mathematician and Business Strategist, it was published in a 1957 Harvard Business Review article “Strategies for Diversification“.


Image from Wikipedia Commons “Ansoff Matrix

There are four main strategies and the colours represent the extent of risks involved:

1. Market Penetration

Market penetration involves increasing sales of existing product in the existing market. It is the lowest risk strategy as the business has all it needs to make and sell its product in a familiar market, so no new research or development is necessary.

Some key ways to increase market penetration:

  • Competitive pricing (low vs premium)
  • Advertising/promotion
  • Increase sales effort
  • Taking away existing market from competitors e.g. through differentiation or acquiring competitor
  • Increase use by existing customers e.g. loyalty programs
  • Increase ease of purchase
  • Educate potential customers
  • Increase distribution channels
  • Modifying product packaging to increase appeal

2. Market Development

Market development involves selling the same product to new market(s). The vertical movement indicates some risks are involved as one is venturing into new markets. Resources are allocated to expanding marketing efforts so a thorough understanding of the new market is necessary to ensure profit is reaped. The business should also have the ability to cope with increased demands on production.

Ways to develop new markets:

  • Increase geographical reach e.g. sell to other countries or locations
  • Use different sales channels e.g. online vs physical store
  • Advertise through different media
  • Perform market segmentation to identify new customer groups by demography, psychography
  • Pricing strategy to reach different markets
  • Explore selling to other  businesses (B2B) instead of direct to customers (B2C) or vice versa

3. Product Development

This involves enhancing the product, increasing the product range or developing new products with related technologies to sell to the same markets. Again, some risks are involved with the horizontal movement. This is necessary when the product is losing its appeal and is falling behind the competition, or alternatively if the business wants to be the first in the market with a novel product.

This is done by:

  • Investing in research and development to develop new products
  • Acquiring the rights to produce someone else’s product
  • Joint ownership of new product with another company
  • Buying over the product and rebranding it under the company’s name
  • Understanding changing customer needs and creating new products to address them

4. Diversification

Diversification is the highest risk strategy as it involves branching out into a completely new field with new product(s) and new market(s). Some reasons given for diversification include to avoid being technologically obsolete, to distribute risk, to make use of increased production capability, to reinvest earnings, to increase profits by entering a lucrative industry, develop capabilities in a new “growth” industry, or to obtain top management.

There are 3 types of diversification

  • Vertical diversification – where the company decides to make its own production components or materials instead of relying on vendors. The technology involved in making these parts can be very different from assembling the final product, hence it does involve a substantial learning curve.
  • Horizontal diversification – where the product is completely different from the existing one but builds on the company’s existing know-how in technology, finance and marketing.
  • Lateral diversification – where the company delves into a completely new industry. Like when Coca-Cola bought movie production company Columbia Pictures.


Interestingly, there is also a Personal Ansoff Matrix which one can use for career development. Igor Ansoff nicely summarized the necessity of staying ahead of the growth curve by quoting the Red Queen (from Alice in Wonderland):

“Now, here, it takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”


The 10 commandments of business success

We spend most of our lives working for businesses but how many of us actually understand what it takes to run one? Businesses come in different flavors but they are based on one inherent principle – providing value to customers.  The main challenge however is getting the people, machines and communications in place to do this effectively. Being profitable is the main goal of many businesses, but these days it does not usually have to be the case. Amazon for example, pumps all the profits it makes back into the company as a form of investment to make sure it stays ahead of the competition.

There are so many components to a business – marketing, operations, production, customer care, growth strategies etc. – which I am still trying to get my head around. Working in a small biotech and thrust with the responsibility of “managing” marketing and product development, I can only approach this the scientific way – research and experimentation. So for now, here goes the research bit. This post contains some notes I took when I read “The Ten Commandments of Business Failure” by Donald R. Keough. In the book, he wrote the advice in the form of negative statements i.e. what you should not be doing. I converted them into positive ones to avoid wearing out my simple brain. The actual commandments are in the brackets. There are actually 11 as he gave one as a bonus… I hope you find them as useful as I did.

1.  Take calculated risks (Quit taking risks)

Creating profits in the long-term requires innovation in the now. Business leaders are paid to “be discontented”, to take the calculated risks that will ensure the company’s success in the future. “When you’re comfortable, the temptation to quit taking risks is so great, it’s almost irresistible”, but it is the number one way to seal your fate and fail. Mistakes and miscalculations, even very costly ones, are simply the price of staying in business.

2. Keep improving (Be inflexible)

The “if it ain’t broke, don’t fix it” mentality is the second best way to secure the demise of a business. There is no one formula for success that will continue to work always; leaders must constantly challenge themselves to change. “Flexibility is a continual deeply thoughtful process of examining situations and when warranted, quickly adapting to changing circumstances.” Darwin’s concept natural selection is applicable not just to organic species, but to the survival of businesses as well.

3. Talk to ground staff (Isolate yourself)

Staying in touch with customers, distributors, managers and staff is essential to continued growth and success. It is temptingly easy to physically isolate yourself from “distractions” in the comfort of leather sofas and plush carpets in corner offices on high floors guarded by layers of Personal Assistants. Creating your own “executive bubble” is a great way to be the last to know when anything is going wrong. Answer your own phone, make your own coffee, know the names of your people – walk around and find out how they are doing and what the Company needs to be doing better.

4. Remain humble (Assume Infallability)

Another great way to fail successfully is to never ever admit a problem or a mistake. Develop the artful skill of finger-pointing. Blame external forces such as currency fluctuations or the unusually active hurricane season. Cover up mistakes for as long as possible without admitting that anything is going wrong. It’s best to wait until there is a full-blown crisis and then say “mistakes were made…” (but not by me).

5. Keep your integrity (Play the game close to the foul line)

When you consistently “play it close to the foul line”, your employers will not trust you, and neither will your customers. If you achieve success by destroying your principles in the process, it will not last. Build a reputation for doing the right thing – to be forthright, honest and fair. Build trust. Honor and decency are virtues which never become outdated.

6. Think and plan ahead (Don’t Take Time to Think)

“Thought is hard” ~Goethe. In many ways technology often adds to the complexity of life without providing appreciable advantages. With the steady stream of data constantly bombarding us, it is appealing to believe that being busy is the same as being effective. Base decisions on careful evaluation. Objectively analyze mistakes; they are a powerful opportunity to see what went wrong. Making time to think is essential for success.

7. Take responsibility (Put All Your Faith in Experts and Outside Consultants)

“It is better to know some of the questions than all of the answers.” -James Thurber. Putting too much faith in outside expertise can lead to disastrous consequences. Quite often, managers insecure in their authority blame restructuring, layoffs and other unpleasant decisions on plans drawn up by outside experts. This is just another cowardly way of passing the buck. Good business leaders take responsibility for the future of their businesses, they don’t farm out important strategy decisions to third parties.

8. Streamline processes and avoid red tape (Love Your Bureaucracy)

If you want fail spectacularly, put administrative concerns ahead of everything else. Chains of command, paper pushing, and general red tape can lead to endemic dysfunction. Bureaucracy within organizations causes responsibility to become so diluted that the managers become incapable of making objective decisions. Action becomes  impossible. In a crisis, the results can be catastrophic.

9. Communicate clearly and frequently (Send Mixed Messages)

Communication does not occur unless the message is both heard and understood. For example, rewarding employees who have not met performance targets sends the message that the targets really don’t matter. Be consistent in the message you send. Apply accountability and follow through with the consequences.

10. Be optimistic (Be Afraid of the Future)

If you want to paralyze your business, start proceeding with caution all the time, allow pessimism to thrive. Unquenchable optimism is the spirit the engenders achievement and success. Move boldly ahead – approach the future with optimism – especially when the circumstances are unfavorable.

11. Do not settle (Lose Your Passion for Work, for Life)

To fail, just continue to set low expectations for yourself and everyone around you; keep saying “that’s good enough”, or “that’s not my job”. All achievement requires passion. Work is hard, but it is worth the effort to those who are convinced that they are capable of being better. It is the strong desire to do better and solve problems that should drive your passion to work harder. Successful people perform at a higher level, just for the satisfaction of doing it. Passion can be cultivated; form a strong emotional connection with whatever you are doing, and never stop.

Artificial intelligence – fears and cheers in science and healthcare

Artificial intelligence (AI), defined as the theory and development of computer systems able to perform tasks normally requiring human intelligence, is increasingly being used in healthcare, drug development and scientific research.

The advantages are obvious. AI has the ability to draw on an incredible amount of information to carry out multiple tasks in parallel, with substantially less human bias and error, and without constant supervision.

The problem with human bias is one of particular importance. In case you haven’t seen it, watch Dr Elizabeth Loftus’ TEDtalk, on how humans easily form fictional memories that impact behavior, sometimes with severe consequences. I am not sure to what extent AI can be completely unbiased, programmers may inadvertently skew the importance that AI places on certain types of information. However, its still an improvement from the largely impulsive, emotion-based, and reward-driven human condition.

Applications of AI in healthcare includes its use in diagnosis of disease. IBM’s Watson, a question answering computer system designed to successfully beat two human contestants in the game show Jeopardy! outperformed doctors in diagnosing lung cancer with a 90% success rate, compared to just 50% for the doctors. Watson’s success was attributed to its ability to make decisions based on more than 600,000 pieces of medical evidence, more than two million pages from medical journals and the further ability to search through up to 1.5 million patient records. A human doctor in contrast, typically relies largely on personal experience, with only 20% of his/her knowledge coming from trial-based evidence.

AI systems are also being used to manage and collate electronic medical records in hospitals. Praxis for example uses machine learning to generate patient notes, staff/patient instructions, prescriptions, admitting orders, procedure reports, letters to referring providers, office or school excuses, and bills. It apparently gets faster, the more times it sees similar cases.

In terms of scientific research, AI is being explored in the following applications (companies involved):

  • going through genetic data to calculate predisposition to disease in an effort to administer personalized medicine or to implement lifestyle changes (Deep Genomics, Human Longevity, 23andMe, Rthm)
  • delivery of curated scientific literature based on custom preferences (Semantic ScholarSparrhoMeta now acquired by the Chan-Zuckerberg initiative)
  • going through scientific literature and ‘-omic’ results (i.e. global expression profiles of RNA, protein, lipids etc.) to detect patterns for targeted drug discovery efforts. Also termed de-risking drug discovery (Deep Genomics again, InSilico Medicine, BenevolentAI, NuMedii)
  • in silico drug screening where AI uses machine learning and 3D neural networks of molecular structures to reveal relevant chemical compounds (Atomwise, Numerate)

There is incredible investor interest in AI with 550 startups raising $5 billion in funding in 2016 (not limited to healthcare). Significantly, China is leading the advance in AI with iCarbonX achieving Unicorn status (> $1 billion) in funding. It was founded by Chinese genomicist Jun Wang, who previously managed Beijing Genomic Institute (BGI), one of the world’s sequencing centers that was involved in the Human Genome Project. iCarbonX now competes with Human Longevity in its effort to make sense of large amounts of genetic, imaging, behavioral and environmental data to enhance disease diagnosis or therapy.

Some challenges that AI faces in healthcare is the ultra-conservatism in terms of making changes to current practices. The fact that a large proportion of the healthcare sector do not understand how AI works, makes it more challenging for them to see the utility that AI can bring.

Another problem is susceptibility to data hacking, especially when it comes to patient records. One thing’s for sure, we can’t treat healthcare data the same way we are currently treating credit card data.

Then there’s the inherent fear of computers taking over the world. One that Elon Musk  and other tech giants seem to feel strongly about:



Though he wasn’t fearing computers develop a mind of their own, more so that AI may be unintentionally programmed to self-improve a process that spells disaster for humankind. And with AI having access to human health records, influencing patient management and treatment, and affecting drug development decisions, I think he has every right to be worried! If we’re not careful, we might be letting AI manage healthcare security as well. Oops, we already are: Protenus.


Other Sources:

PharmaVentures Industry insight: “The Convergence of AI and Drug Discovery” by Peter Crane

TechCrunch: “Advances in AI and ML are reshaping healthcare” by Megh Gupta Qasim Mohammad

ExtremeTech: “The next major advance in medicine will be the use of AI” by Jessica Hall

What would you do with 900 million dollars of start-up funding?

America, a land of plenty – plenty of land, plenty of food, plenty of crazy politicians and plenty of start-up funding.

Grail, a company formed by sequencing giant Illumina in Jan 2016, recently obtained a hefty $900 million in Series B financing, after already obtaining $100 million in Series A. Grail aims to screen for cancer mutations in circulating tumour DNA (ctDNA) from blood samples via next-generation sequencing (learn more about this booming field in Sensitive Detection of ctDNA). The money came from several large pharmaceutical companies, Johnson & Johnson purportedly with the largest investment followed by others such as Bristol-Myers Squibb, Celgene and Merck. Interestingly, Bill Gates and Jeff Bezos from Amazon has also invested in Grail, together with the venture arm of medical distributor McKesson, China-based Tencent Holdings, and Varian Medical Systems, a radiation oncology treatment and software maker from Palo Alto.

This is the biggest start-up financing deal in biotech by a long-shot, the largest deal in 2016 went to Human Longevity, Craig Venter’s company that raised $220 million in series B. Another one that came somewhat close was RNA company Moderna Therapeutics, which raised $450 million in 2015.

Grail plans to carry out “high-intensity sequencing” on blood samples from vast numbers of people to detect circulating tumour DNA at early stages, essentially in people not showing any signs cancer, as a means of early detection to enable better treatment. This is an especially challenging feat, given that ctDNA makes up < 1% of circulating DNA found in the blood. But there are some hints that Grail is sitting on promising data sets that have turned skeptics into believers.

There are concerns that testing healthy people for cancer might yield false positives that could subject people to unnecessary and potentially dangerous testing procedures and treatments. This was the case for the Prostate-specific antigen (PSA) test used to screen men at risk for prostate cancer. It turned out that PSA testing did not significantly reduce mortality of men with prostrate cancer but did increase the harms associated with the accompanying treatments and tests, some of which are pretty nasty such as urinary incontinence and erectile dysfunction.

So Grail had better be sure the sensitivity and accuracy of their predictions are full-proof as cancer treatments are not exactly pleasant. They seem to be taking it seriously, judging from their embarkation on an ambitious trial called “The circulating cell-free genome atlas study” where they will recruit more than 10, 000 participants – 7000 newly-diagnosed cancer patients of multiple solid tumour types who have not undergone treatment, and 3000 healthy volunteers.  The trial is already recruiting and is projected to be completed within 5 years by Aug 2022, with a primary outcome measure available by Sept this year. Grail hopes to detect shifts in cancer stage severity as they perform their tests over time. How accurately their tests reflect other clinical readouts would give appropriate proof of its reliability. Likely, more trials involving more patients would be necessary to determine if this form of testing is full-proof and whether it may even replace tissue biopsies as a gold standard in cancer diagnosis.

Grail has even drafted plans to make their form of testing available to the medical community by 2019, subject to experimental results. An incredibly ambitious timeline, so its no wonder they need the big amounts of cash to drive it through. Jeff Huber, a former Google Exec, is Grail’s new CEO. His wife Laura died of colorectal cancer, so his new job also fulfils a personal mission. Other members of the team include other former employees from Illumina and Google, including Verily CSO/founder Vikram Bajaj. The Google Life Science company Verily have recently received a similarly outstanding investment of $800 million from who would have guessed, Singapore Temasek Holdings.

The scale of investment in America seriously dwarfs that found in the European biotech scene. Despite conservatives highlighting a potential bubble in US biotech and Trump’s anti-pharma sentiment that may signal a potential decline in available funding, one cannot deny that the lofty research goals being currently undertaken, can only yield an incredible expansion of scientific knowledge. In my opinion, science is expensive, and the more money you have, the more science you can do. They key thing though, is to make sure its good science!



Steps to building a successful Startup

Here it is, my very first infographic:


Disclaimer: It may look easy but its not. i.e. making the infographic….. and building a successful startup of course.


Startup terms you should know

In the startup world, there are several terms that are often thrown around which can become pretty confusing for the uninitiated. So to avoid any head-scratching moments, here is a list of the key few and what they mean:

Note: Some of these terms shall be used again in an upcoming post “Steps to building a successful startup”, so make sure to go through all of them!

1. USP – Unique selling proposition

That special factor that differentiates your company from others and provides benefit to consumers of your product/service. Could be a novel technology, a new approach to doing something already available that either makes it cheaper  or more attractive, a special business culture or a novel focus on a niche market.

2. Deep tech

This is a rather new one and is used to describe companies that use completely novel technology as opposed to currently available technology. Makes the company look more sexy to investors. Not to be confused with deep learning which is a fancy term thrown around by tech geeks to describe a better version of machine learning.

3. Runway

How much time you have before your investor money runs out.

4. B2B, B2C

Often used to describe the nature of your product/service, whether its being sold to businesses i.e. business to business; or directly to consumer i.e. business to consumer

5. Exit

How you want the company to end successfully and make everyone (i.e. investors and startup founders) rich. Either comes in the form of an IPO (initial public offering) where the company gets listed on a stock exchange which allows investors a chance to liquidate their shares, or a buyout, where another company buys the founded company and investors get their ROI (see next).

6. ROI – Return of investment

What the investor would receive when the company exits. Usually expressed as a ratio: (gain from investment – cost of investment)/cost of investment.

7. SaaS – Software as a service

A company model where licences/subscriptions are sold to users to obtain access to a cloud-based software.

8. Vesting

Where employees/co-founders get given shares but receive them over a period of time rather than at one go in order to get them to stay at the company for a longer time. It may follow a vesting schedule where one gets a small portion every year and may include a “cliff” where shares are given only after a fixed period.

9. Unicorns, centaurs and ponies

Derived from Silicon Valley and are used to describe companies with different scales of valuation. Unicorns are valued at over $1 billion, Centaurs at over $100 million and My little Ponies at greater than $10 million.

10. IP – intellectual property

Refers to a creation of the mind that you want to protect, usually by patenting it or keeping it extremely secret (e.g. the recipe for Coke).

11. Traction

Evidence that the company is growing or has potential for growth. This can be shown via customer response or actual revenue.

12. Valuation

This is how much your company is worth in the eyes of investors. Its pretty difficult to decide this in the early stages. Usually investors will come up with this by analyzing similar companies (i.e. your competitors) and seeing how much they are valued.  See here for an infographic on the calculation process. The valuation can be affected by factors such as founder reputation or prior success, traction, current distribution channels (e.g. if you already have an established channel like a blog with a million views by which you can reach many potential customers), and industry buzz like if you happen to be working on the hot topic of the month.

Valuation is also split into pre-money and post-money valuation. If your company was valued by an investor as being worth $1 million for example. That is the pre-money valuation. If the investor decides to invest half a million, the post-money valuation = $1 million + $0.5 million = $1.5 million and the investor now owns 33.3% of your company.

13. Funding rounds: Seed, Series A, B, C..

The seed funding round is the first investment round where a company gets money – usually from friends/family, angel investors, incubators/accelerators or via crowd-funding. Following which a company could approach VCs (Venture Capitalists) for funding rounds named Series A, the next funding round being Series B and so on. The number of rounds can apparently go on as long as the company wants to remain private and not do an IPO. Uber for example went up to Series G! Another nice infographic with more detailed info on startup funding sources here.

14. Venture Capital

Money from a fund run by venture capitalists which pools money from various investors and invests in a portfolio of companies.

15. Angel Investor

A rich individual that provides capital to a startup in return for a stake in the company.

16. Crowd-funding

Getting money from the public masses. Often done through online platforms , see here for a list.

17. Accelerator/Incubator

An organisation that supports startups either in terms of office space, funding, mentorship/guidance and access to professional networks. Most of them take some equity from the company in exchange. Accelerators are said to be for more mature startups while incubators for the newborns but they are often used interchangeably.

18. Due Diligence

A detailed investigation into a business done by investors/companies looking to acquire it. Often involves in-depth analysis of a business’ assets and liabilities to determine its commercial value.

19. Proof-of-concept

Demonstration that your idea is actually feasible and is often required to get VC funding.

20. MVP – Minimum viable product

The simplest version of your product that is required to achieve proof-of-concept.

21. Pivot

When you have to quickly alter the position of your company either by changing the target market, or the application of your product in order to survive in the market.

22. NDA – Non-disclosure agreement

What one signs when a company/individual doesn’t want you spilling their secrets.

23. CRM – Customer relationship management

A system or software used by companies to consolidate customer information so that staff can easily access, manage and record interactions with customer, with a goal to track business performance and drive sales.

24. Burn rate

The money a company is burning through every month before breaking even or making profit.

25. Bridge loans or Mezzanine financing

These are hybrid loans in the form of cash or equity/options given to more mature companies which are cash-positive usually in preparation for an IPO.

26. SOPs – Standard operating procedures

Step-by-step instructions of procedures important for running of the business that employees follow to improve efficiency and communication within organization and to maintain a high quality and uniformity of the product.

Startups – creating value for customers and communicating them

Getting people to buy your product/service can be a challenging process. How do you make your product/service desirable to customers? Bain & Company did a nice infographic on the 30 things that customers value shown below:


Companies that deliver more elements of value perform better i.e. have more loyal customers and a faster revenue growth rate than companies that don’t. Makes logical sense. As to what ranks highest, quality is deemed the topmost priority across all industries. After which, depending upon the industry, values are ranked differently e.g. food and beverage have sensory appeal ranked second highest while tech industries rank functional elements – avoids hassle, saves time, organizes etc. – next highest. Values that are in the emotional category are also ranked higher than those in the functional category.

One thing I realised apart from the importance of bringing value to customers, is the necessity of effective marketing and communication. I work for a startup which offers a life science reagent of higher quality than what is currently available. The founders thought since this was the case, the product would sell itself. But this is only the case if the value provided was blatantly obvious. The problem we faced was no one noticed that what they currently use was inferior unless they looked at certain indicators (which they would normally not study). I’m talking about siRNA and their off-target effects, for those scientists out there:

Most siRNAs are inherently non-specific, knocking down many genes in addition to the target gene. But because most scientists only measure the knock-down of their target gene, they do not see the numerous off-target genes that also get deregulated. They are thus left with the impression that the reagent is working fine. It’s only when screening a large number of siRNAs do these off-target effects become apparent. Go here to learn more.

Anyway, unless the value is obvious, like PokemonGo – Nostalgia, fun, sensory appeal etc. – one needs to really work hard on communicating the values to customers. And usually, the values that most products/services bring need to bring drummed into customers. This is what drives the advertising industry, and funds the paychecks of marketing and sales  consultants. So for those startup owners – what values are you delivering, and.. are they obvious?