Could You Start a Life Sciences Business?
Want to solve problems and make the world a better place? Have you dreamed of running your own business? Doing so is not out of the reach of life sciences professionals.
Starting a business in any field is a complex proposition, but in life science, the complexities are especially daunting. These complexities include determining ownership of intellectual property, huge funding requirements, assumption of risk, navigating regulatory requirements, attaining patents and licenses, and building a team.
The traditional route to life sciences entrepreneurship starts with a scientist conducting grant-funded research at a university who discovers a possible solution to a biological problem, often a way to intervene in or treat a disease or condition. The scientist, who thus recognizes an opportunity to commercialize this discovery, then must decide whether to stay at the university and develop a commercial enterprise on the side or begin raising huge amounts of money in active and immediate pursuit of opening a life sciences business.
Shreefal Mehta describes the scientist-turned-entrepreneur as a “technopreneur.” Mehta profiles a different type of life sciences entrepreneur, dubbed a “market perceiver,” who probably lacks the extensive scientific background of the entrepreneur but recognizes an opportunity to build a life sciences venture. In his research, for example, Mehta identified these scenarios in which non-scientists were the drivers behind life sciences enterprises:
- sales executive for a medical health-care provider identifies an unmet need by talking with his customers.
- management consultant meets a scientist who tells him about his ideas and research findings.
- college grad with a biology degree takes course from instructor involved in conducting R&D; grad realizes the instructor’s work can be commercialized.
- scientifically minded businessperson reads about genetic testing in a magazine and sees the business opportunity in it.
The bottom line is that, while these entrepreneurs all had at least an interest in science, a hard-core scientific and research background was not necessary for them to start businesses. In fact, Mehta found diverse backgrounds of founders were advantageous. Adriana Tajonar concurs in How to start a biotech company: “Having a well-rounded team with the best people you can recruit is a key asset for a startup.”
Whether you’ve made a marketable discovery yourself or recognize the opportunity in someone else’s discovery, the next step is to determine whether the technology can be commercialized, writes Leah Cannon, author of How to Start a Life Science Company. Cannon suggests a series of initial concerns that need to be addressed before launching the business. Ownership of the intellectual property must be determined, and if you own it, can you defend your ownership? “Your intellectual property is also one of your most valuable assets, so make sure you secure it early and well,” Tajonar writes. The prospective entrepreneur must also evaluate the strength of the science behind the discovery.
Not only must the founder decide what products, platforms, or services might emerge from the discovery, Cannon notes, but he or she must also gauge the market need for these applications. If a market need exists, is it big enough to be sustainable and are competitors likely? What costs and challenges are involved in
developing applications? Underestimating the technical difficulty of development projects is one of the “trip wires” that derails life sciences startups, writes Chris Cashman of Protez Pharmaceuticals in How To Start and Grow a Life Sciences Company: Practical Advice for Start-up Companies & Incubators, a free PDF book from the law firm Ballard & Spahr.
Additional pitfalls, Cashman says, include underestimating regulatory requirements and failing to raise sufficient funds. If you seek to start a life sciences business, you are probably a problem-solver to begin with and can meet the challenges. “You are in the problem-solving business,” asserts Jane Hollingsworth, another contributor to the Ballard and Spahr book. “Expect problems and be good a solving them.”
Problem-solving is one of three “Ps” that form the traits of successful life sciences entrepreneurs. Another Ballard and Spahr contributor, Richard Pops, cites two common characteristics among flourishing biotech pioneers: passion and pragmatism. Passion is needed to push through the challenges and setbacks that come with the commercialization process. The pragmatism embodied in sound management and finance keeps the startup afloat.
Additional early steps for the startup include securing solid legal advice, raising money, understanding and communicating risk, and building your business model.
Starting a life sciences business is not easy. However, as Tajonar writes: “Despite the plethora of (at times daunting) things to think about, I have not yet met a single entrepreneur who regrets starting a company. There will be ups and downs, much as in academic science, but as with any goal worth pursuing, it will all be worth it.”