By Jerry Mooney
The biotech industry is, according to many notable figures, including the likes of Ray Kurzweil and scientist, Michio Kaku, about to take off in ways that few people are prepared for. It’s going to be like the smartphone revolution, only more, with new companies possibly providing solutions to some of the most pressing challenges faced by humanity.
Of course, this makes biotech a lucrative place to be, if you come up with the right products, Recently, two people trying to make waves as biotech startups - Dominic Falcao and Mark Hammond - shared their advice and lessons learned for how to manage a biotech startup. Here’s what they had to say.
Startups Focus On Fitting The Tech To A Problem
According to Hammond, solutions that are in search of problems to solve, usually don’t make it that far in the market. People are often left scratching their heads, wondering how a particular device can help them on a day to day basis.
Hammond suggests focusing on real world problem. For instance, he’s investing in a company that helps farmers avoid having their crops destroyed by fungi. Current estimates indicate that about €10 billion worth of damage is caused by fungi every year, adding significantly to food bills and damaging farming businesses. So building a startup in this space is targeting a problem and trying to solve it.
Build A Squad Of Committed People
Falcao says that it is important for companies to define what success and failure mean for them at the outset. Having established principles, he says, can help enormously in the long term.
He also suggests bringing onboard new people whenever they are necessary for the business to take the next step. Having the right qualified person in position, he says, helps to clear regulatory hurdles and develop new product lines. He points to a company that wanted to bring the new gene editing technology, CRISPR, to the desktop and hired experienced marketing professionals to do so.
Buckle Up For The Wild Ride Ahead
The two entrepreneurs also warn people wanting to get into the world of biotech that, like most industries, it’s subject to the so-called “hype curve.” The hype curve is structured as follows: first, when a new technology is introduced, it triggers increasing visibly. After a few months, or even a few years, this increased visibility leads to a peak in expectations, as people begin to think through all of the implications of a technology, once fully realised.
But usually what happens is that these expectations don’t immediately come to pass, and investors enter what is called the “trough of disillusionment.” Here, startups start losing money and investors. Eventually, the market recovers when the technology catches up to expectations, but for many startup entrepreneurs, it’s too little too late.
Hammond suggests, therefore, that biotech startups think carefully about where exactly on the hype curve the technologies they rely on are situated. If you’re in the early stages, investing in things like brain-computer interfaces, biochips and machine learning for drug screening, then you've got the hype train still ahead of you. If you’re investing in genome sequences technologies, the hype train is behind you.