Entrepreneurship boot camps are fun, and always filled with an eclectic mix of people who have a passion – a passion for starting something new.
I spent the past two days at the 10th Biotech Entrepreneurship Boot Camp, that is held in conjunction with the BIO International Convention. Founded by Prof. Art Boni (CMU/Tepper) and Prof. Steve Sammut (UPenn/Wharton) in 2005, this has been a traveling boot camp, bringing its deep subject knowledge with its core faculty while leveraging on local expertise. The two-day, 10h/day boot camp covered a broad range of topics – a high level approach to innovation, elevator pitches, IP, marketing, financing, tech transfer, and even included live pitching of featured local biotechs. 20% of the 100 or so attendees were CEOs; a good 50% were international attendees.
Here are my 9 take home messages that I gleaned from this year’s Biotechnology Entrepreneurship Boot Camp:
1. Technology isn’t enough
So what if you have great technology? Prof. Art Boni described that innovation is when you have technology and a business model that is capable of bringing that technology to market.
2. It’s hard to align interests for all stakeholders
Everybody has a different agenda – entrepreneurs may want to see their technology help people, payers want to reduce costs to the healthcare system, investors want a healthy ROI. Every stakeholder in the company has a different interest, and it’s up to the CEO to identify and navigate that dynamic.
3. Have a (regulatory) plan
Use plenty of regulatory consultants and get lots of good advice early on, says Jim Ackland, President of Global BioSolutions. Insist on constant regulatory oversight from the sponsor whenever you contract the work out. A fellow Boot Camp participant shared with me that he had a Phase II drug (biologic) outsourced to a CMO (contract manufacturing organization), and because of a lack of manufacturing oversight, the company spent $7M more than they should. Ouch.
4. Patents are costly, but they’re worth it
A truly global patent costs at least $500,000. And that’s on the low end, says Kathryn Doyle, of Saul Ewing. Patent strategy is very important, and it is critical to not be passive about it. Multiple layers of protection are needed, which are independently patentable. Also, don’t rely completely on your patent attorney, suggests Doyle, and Michael Ye of Andrews Kurth. The best people who know the patent are the inventors themselves. Take a defensive position and build your portfolio ($$$) and prepare for IP due diligence during funding/partnering/exit. Also, take an offensive position and figure out how to deal with third party blocking patents, and how to enforce your own patents.
5. Marketing matters
Have a Target Product Profile, or TPP, recommends Prof. Thanigavelan Jambulingam, of St Joseph’s University. Early marketing can improve product success, and TPP attributes can be shaped by marketing, such as pharmacoeconomics. Once you identified that ideal TPP, get to creating it.
6. Build your team
David Kabakoff, Executive Partner at Sofinnova Ventures, says that the best way of tech transfer is moving people. Big professors who created invented the technology may not necessarily leave their labs, but it could be possible to attract the younger assistant professor to take a leave of absence and bring with him his graduate students. The scientists know the system and knows how to collaborate. Leave the know-how in-house. Nuances matter.
Kabakoff also recommends to hire people who have worked in multiple environments, not just in startups. They should also have had some success in these environments, interspersed with some failures (so that they appreciate and learn from it).
Joel Martin, President and CEO of Cebix, recommends hiring a good CEO. Find an experienced person who is well known in the industry, who has demonstrated capability to raise capital. The best person for the job has the gravitas and has made money for investors. He/she will be difficult to get, but will also get you credibility and comfort from investors. They are worth it.
7. Do you have an elevator pitch? Yes, you’ll need one, now.
Guy Kawasaki recommends top 10 tips on his blog here. The pitch is key to getting people hooked. And then you engage with them. Tailor your pitch to your audience, and know your audience. Do they have money to invest? Are they engaged with your competitors? What’s important to them? What are their past investments? One tip that was recommended is to have a cheat sheet about every single investor that you are speaking to, and dig up everything you know about them. Know your audience, well.
8. Address your risks
Gail Naughton, CEO and Chair of Histogen, gave a stellar example of a partnering pitch in front of three big pharmas, one lawyer, and a consultant. While her partnering pitch was confident and impactful, what really stood out was how decisive she was in addressing the risks that were raised in the follow up questions, and explaining how Histogen has mitigated each risk. I think it’s a known fact that biotech startups have significant inherent risk. To be able to acknowledge, and then de-risk each point, will give the entrepreneur more credibility.
9. The first meeting with a VC is for them to assess you, not just the company/opportunity
Kim Kamdar, Partner at Domain Associates, says that the Domain style is to stop the entrepreneur before he/she even finishes slide 1. The initial meeting is more of a dialog than a presentation, and the interruptions are to throw the entrepreneur off-balance and see how they react. The interactions that follow guide the VC in deciding whether to move to the next stage or not.