From Labcoat to jacket and tie: The journey of a Biotech entrepreneur
Do you feel an itching in the back of your head when somebody talks about getting their research to the market? Maybe that thing is called entrepreneurship but, how do you know if you are ready to take this no-safety net walk?
Depending on which part of the world you are doing your research, you can find cultural differences related to scientist going businessmen, in some countries it's encouraged but in others, it`s seen like treason. You can find several courses on entrepreneurship, innovation, and so on but, as Christian Tidona once told me, you have it or not.
Before getting deeper into which skills you need to have, we need to define what`s an entrepreneur and why the biotech breed is special.
A person who undertakes the risk of starting a new business venture is called an entrepreneur but, how can you measure this risk and especially in biotech?
A biotech company is an extremely complex business. It requires the application and coordination of scientific, regulatory, financial, and management expertise to operate effectively. Fundraising and communications capabilities, the ability to negotiate and manage business partnerships, problem-solving skills, strategic thinking, and perseverance are all essential for the company’s success. So, while scientific knowledge is one critical aspect of building a successful biotech company, it is not the only one. This need for multidisciplinary leadership abilities helps explains why, as the industry has developed, individuals with a variety of backgrounds have ended up with overall management responsibility.
Now that YOU know why the biotech business is a complex one, you can find below what I think are the top 4 features a Biotech entrepreneur and CEO needs to have or at least train.
Creativity:
When biotech CEOs are not working to raise money (which is typically every 18 months), they often describe their jobs as creative problem-solving. Their companies are trying to succeed in the same task being pursued by the research divisions of large pharmaceutical companies, but with a tiny fraction of the resources and infrastructure. Creativity is essential, and since the industry is subject to countless laws and regulations, that creative spirit needs to be channeled into pathways that will work effectively in a very carefully regulated environment.
Pro tip: Find time to look for trends and go out of your comfort zone to learn more about design thinking and if you have time, listen to After the Jump hosted by Grace Bonney or read Wired to Create: Unraveling the Mysteries of the Creative Mind by Scott Barry Kaufman and Carolyn Gregoire
High-Risk Tolerance
“In a world that’s changing so quickly, the biggest risk you can take is not taking any risk.”
A primary and mandatory characteristic that is necessary for a biotech entrepreneur is having a high-risk tolerance. This is important because biotech is a volatile industry. The only constant in biotech is change, and entrepreneurs need to have the ability to pivot and change strategies and priorities to shift their focus as new data comes into their decision-making process. A crisis could be a great time for companies if they can leverage their assets and find new opportunities, Pfizer, Moderna, and BioNTech are great examples.
Risks can be classified as:
Pro tip: Always look for opportunities where if they fall short they lose only a certain value, but if they win they could stand to gain 10 times as much.
Wearing Multiple Hats
It helps to have both specialist and generalist knowledge as a biotech entrepreneur. Most biotech professionals will start their career with a specialty in one of the key disciplines, such as clinical sciences and/or operations, regulatory affairs, research, quality, marketing, or manufacturing. However, as one progresses into more senior roles, particularly at small biotech companies or start-ups that have small teams, that person will be called upon to weigh in on and move the needle on all sorts of factors that influence the business, including scientific innovations, legal issues, corporate governance, investor and public relations, regulatory and securities issues, and even patent issues. If an individual is interested in being a biotech entrepreneur, don’t just focus on one’s own specialty; it’s very useful to learn about all issues that influence the business.
I recommend reading a great book called: The Startup Hats: Master the Many Roles of the Entrepreneur by David Gardner.
Pro tip: Take time to articulate your vision and your mission and find ways to communicate both to potential customers, investors, employees and the everyday person.
Be a crazy networker:
Most entrepreneurs can't do it alone. The business world is a cutthroat one and getting any help you can always help and reduce the time it takes to achieve a successful business. Networking is critical for any new entrepreneur. Meeting the right people that can introduce you to contacts in your industry, such as the right suppliers, financiers, and even mentors can be the difference between success and failure.
Attending conferences, emailing and calling people in the industry, and speaking to your cousin's friend's brother who is in a similar business, will help you get out into the world and discover people that can guide you. Once you have your foot in the door with the right people, conducting a business becomes a lot easier.
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Pro tip: “Add value without expecting anything.” - Adam Grant from Wharton
As we all know 9 out of 10 new companies will surely fail within their first 5 years of existence. Entrepreneurs need to learn from other experiences to build a clear and strong strategy in order to succeed. Below you will find a non-exhaustive list of most seen mistakes so you can take note.
Not thinking strategically about IP
Intellectual property and licenses are at the core of everything a biotech company does. But too often, biotechs don't think strategically about their licenses and patents-both what they own and what they'll have to license from others.
"The key is to have the right advisors internally or externally who think long term.”
Not understanding the target market
Before investing millions of dollars and many years into a drug, biotechs should think about the commercial viability of the end product. "Don't treat your R&D process as just a research project,”
How can the product be differentiated? Will it be reimbursed?
Not raising enough money
Too often, biotechs don't raise as much money as they could because management wants to avoid dilution. Often, the decision is made to raise just enough money for the next development milestone, with the assumption that the company will then be able to raise a new round at a higher valuation?and thinks the company has enough cash to get by. "That is just plain dumb”.
Too often founders and investors fight over the relative size of their slice of the pie. Even in this environment, people continue to have unrealistic expectations about valuation. That`s why founders need to raise as much money as they need to get their company to the next level and not just the next milestone.
Most importantly biotech CEOs need to pick their VCs wisely. It's important to pick an experienced VC with deep pockets to lead, one that will be able to syndicate with similar investors. Those are the investors you want on your board to support subsequent rounds, even if they grind you down some on the initial valuation.
Not having a regulatory strategy
Early on, get the latest and greatest in regulatory expertise. Make sure your chosen advisor is well-versed in current FDA requirements and issues so that he or she can recommend the best strategy for clinical development and regulatory approval.
Knowing when and who to partner
Are you a platform company? Are you a product company? An indication company? What indications are you targeting? Are they chronic indications, like diabetes, that require large, long-term trials and a large sales force to market the drug? Or are you targeting a rare or fatal disease with no approved therapy that will require smaller trials with clearer endpoints and drugs that need only be marketed to a defined number of specialized centers? Each situation is unique so companies shouldn't follow generalized trends about when and how to partner.
If you read to the end of this text, you already know the hurdles that need to be accomplished at the beginning of a Biotech startup, while a stressful journey is also a journey of passion and changing people for good.
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