Author: Chandan Seth Edited by: Inês Barreiros
Past years have witnessed great scientific leaps and technological advances which now portrait and define our present. And now here we are, standing at the forefront of a revolution in medicine, technology and economic growth. Like never before, there is an increasing interest and participation of scientists in venture capitalism and small business initiatives. And why not? As more and more academies open to nurture young minds and direct them towards scientific learning and contribution, the amount of globally generated scientific data expands exponentially. With the huge expanse of the data generated, it is almost essential to market one’s effectual research and employ it to advance the medical revolution, using cutting-edge technology at the global economic stage.
Scientists, particularly those specialising in biological sciences, face critical decision moments when thinking about upgrading their scientific ventures into translational mode. All along the career path, most researchers contemplate which of the two they should choose as their working domain: academia or industry. Paradoxically, most of the time, skillset is not the limiting factor. Often, such career choices are made based on personal timelines, work flexibility, economic benefits or job opportunities available. However, the majority of scientists that do opt for academia, consider their own spin-offs as an eventual dream project. So, what stops an innovative and creative scientist from venturing into scientific business and transcending their research from lab to clinics or industrial applications? Is it not knowing how to initiate such a venture? Or what and to whom to sell their product/service? Or where to get the finances from? This article will help readers, especially those facing such dilemma to step ahead and get a bit closer to their dream venture.
A great novel idea is born free spirited and not bound by the realms of academia or industry. Once, you have an idea, ask yourself these questions: a) What exactly you want to do? b) Why will it be better than anything else ever done so far? c) Who will be your team, target customer group and sponsors? d) How will you do it? e) When is the right time to do it?
Let’s dissect the big questions:
a) WHAT exactly do you want to do?
Like any scientific experiment, the success of each commercial entity is deeply rooted in the question “what?”. There are essentially two ways to target a particular area of need: either design a solution to a given problem or fit your idea as a solution to a given problem. It is worth noting that the former is more likely to reap better benefits in the long term. To kick things off, start with a couple of such ideas, and prioritise them based on the area of need. Taking into account the concept of minimum viable product, one should design the simplest prototype to define the core of the idea, and then build upon the model to add requisite features. This skeletal structure helps design the pitch for proposals. On a scale of 1 to 10, most scientists wanting to venture in spin-offs score 8-10 in this section.
Tip: 1. Researchers reign the creative domain of science so they should focus on a product/service with long-term benefits. Without much innovative feat or scientific reason, they should not venture in projects that big pharmaceutical industries are leading, since it is almost impossible to reach the infrastructure essential for the project on a start-up scale.
2. Entrepreneurial ventures should define the value proposition that describes the values of the product/service and protect it through legal protocols wherever necessary. Scientists must ascertain conflict of interest for novel products/protocols. Universities these days lend a helping hand in forwarding financial and legal aid and one must calculate the risks if going beyond their university for help.
3. Discovering mechanisms and modes of action or solving hyped/challenging technical issues in science might seem like a good idea to venture into, but refrain from proposing such ideas to venture capitalists, until you find a suitable problem to translate your work in real life scenario. Applicability is the key.
b) WHY will it be better than anything else?
In the era of fast paced technological advances, one needs to keep abreast of latest developments and developers. Competition lies at the heart of businesses, and to win, one must first develop a well-connected network with all the players in the field. It not only enhances the knowledge spectrum but also provides ample opportunities to meet your potential partners/collaborators/investors/customers. This helps to refine your idea and prove it better than the possible pre-existing versions. It is of utmost importance to carve your idea to fit it perfectly into the problem scenario, just like the lock and key model. It should ideally fit so well that nothing else could be at par as an alternative solution. However, the caveat is: don’t wait till you design ‘the perfect model’; the value of the first move and the first impression can't be stressed enough! On a scale of 1 to 10, most aspirants of a spin-off score 8-10 in this section.
Tip: 1. Scientists should focus on the key innovative method/product/service that ties basic science to translational science. One must not forget, a start-up based on a good idea, with pan-scientific domain applicability, and better monetary rewards is faster to get the attention of financers. All firms, big or small, focus on monetary benefits.
2. When deciding the worth of the idea, use the rule of thumb: will your targeted customer buy it? This means you should estimate the market size and possibility of sale/expansion in long term by drawing analogy to similar markets. In case of complicated/novel products, add additional risk/uncertainty factors.
3. Leading in competition is the key to your business’s success. The value of leaders in competition is not exaggerated. Your past records and publications increase venture capitalists’ trust in your idea. Remember, you are selling your idea to financers, whose expertise is not mainly in science. Why they trust you is based on either your long standing reputation in the field or because of a long-term relation or your very promising solution to a well-known unsolved problem.
c) WHO will be your team, target customer group and sponsors?
No idea is complete without a focussed group of individuals dedicated to make it work. Most scientists wish to have their dream spin-off only on the side, keeping their lab or teaching profile as their main focus, which can make aligning the science with management an initial challenge. This of course, once streamlined, acts as the defining feature of the spin-off’s success. Having a skilled scientific team/partners with you can strengthen the idea, while hiring the right management and intellectual property advisers can take the company notches ahead in the long run. It not only refines the product/services/idea in a more marketable format, but also defines the vision of the company and its sphere of influence. Hence, you should not hesitate in hiring a person or two at the start, which can be done by employing freelance management consultants, trainees and fresh talented graduates from prestigious business schools at Oxford, Cambridge, Harvard, etc.
As important is the internal side of the company is the external side. Having the right team behind you helps acquire the perfect clientele. There is not much to do in this zone, as long as the idea is well defined, since the idea itself defines the clientele. However, network establishment in the community gives leads to how and when you can approach a client. The best way to attract the target group is to promote your idea and launch it at networking hubs. It will not only highlight your presence in the field, but also set you off amidst your competitors face-to-face. This in turn, will open doors for the third most integral part of the team: sponsors.
Choosing the right financial support will not only give stability to the spin-off, but also ensure continuous innovation and creativity. The type of investors depends on the stage of your start-up company. For example, to obtain seed funding, aspirant entrepreneurs invest an initial amount and then present their ideas in competitions and pitches across universities and academic hubs. At this stage, the funding is mainly channelled into developing the minimum viable product. Entrepreneurs of early stage spin-offs can get connected to angel investors. There are private investors that participate in venture events usually as judges of start-up competitions. The next level is venture capital funding. This comes through major pharmaceutical companies, which can be spotted mainly through the network that you have established in the field. On a scale of 1 to 10, most scientists would score 6-8 in this domain.
Tip: 1. Just based on simple probability: the sooner you start networking and connecting with people beyond your subject of study, the faster you can succeed in meeting the right people. Build your network beyond scientists.
2. Brush up your selling skills; prepare and rehearse your elevator speech. Present your idea to venture capitalists at conferences and write personal emails. Seek opportunities to launch/promote your initiative at local and international platforms. If need be, go for collaborations.
d) HOW will you do it?
The “how” of getting your product made or services developed depends on the infrastructure and the amount of money obtained from the investors. This varies from project to project and can require special premises. Initial stage spin-offs normally connect their lab and related support system to get set and go. On a scale of 1 to 10, most scientists would score 8-10 in this domain.
Tip: 1. Developmental strategy needs to be practical. Do not make a hypothetical case; infrastructure is a real thing. Personalise a model for setting up infrastructure based on the product/service. In case you are becoming a manufacturer, estimate your setup and running costs, local environmental concerns, labour intensive jobs, employees, licences required, space and above all, time. Bear in mind, most of these need to be approved by local councils and ethics committees. Policies, reports, audit/legal documentation and intellectual property services take time. If you are venturing in softwares, legal advisors, computational equipment and intellectual property take fore and issues like office space are secondary, since working from home/common rooms is an option.
2. Follow a decision tree, while thinking about important issues. Always have more than one Plan B. A simple decision tree would include at least three low-cost yet efficient techniques to perform at each step.
e) WHEN is the right time to do it?
Well, there is no perfect time to initiate your dream project. If the idea needs to be put in practice as soon as possible, the time is now! Of course the idea can reform over months or years to be the best viable plan, but it needs to be tested through time and several rounds of investor checks; after all, the investors need to be convinced of the need for your idea to be realised. Usually it takes about 1-5 years to reach a perfect plan for your dream project. On a scale of 1 to 10, most scientists would score 8-10 in this domain.
Tip: Plan an entry strategy. A marketing strategy is as important as having a good idea. Create sales models, distribution models and use them to target customers/finances more than once.
A good example of a start-up in Oxford this year is the tech-based project Refugee Connect. The project was initiated at the Saïd Business School by four young entrepreneurs and it aims to bring local communities in Germany closer to the incoming refugees. The leaders of the project first identified a problem: locals wanted to be of assistance but did not know how. Meanwhile, the refugees, after having endured tough trials, had no inkling of where to start piecing together their lives. Refugee Connect’s intention was to provide a platform where locals could participate as mentors and guides to aid the refugee community make sense of basic essentials such as where to look for housing, medical care, education for their children, language classes, etc. using a tech enabled platform i.e. all this would happen online, in-app.
Once the initial proposal was made, the project team launched the idea to their colleagues and professors at the local level, i.e. at Saïd Business School, and discussed the potential and got feedbacks. During rounds of discussions with fellow MBAs, the team was made aware of possible funders and investors in this field by the MBA network. One such investor called ITU Telecom World was then chosen and a finer version of this idea was proposed to them in a young innovators competition. After great appreciation and interest, the team was awarded a travel and accommodation grant in Germany to move on to the next step. The team then distributed tasks and while three team members went to Germany and gauged the real scenario and problems, the other two did background searches and devised possible strategies. Next, the team proposed the idea at Saïd Business School, Oxford, in an entrepreneurial project competition and won accolades and one of the judges of the competition happily offered collaboration and investment. The judge was from Oxfam, a leading charitable organisation based in Oxford. This helped the team build their network further and connected them to local organisations in Germany. This was followed by the participation and victory of the team in Oxford Global Challenge, which led to an initial funding for developing this project on a real platform i.e. in Germany. Meanwhile, the team continued to develop the mobile application and collecting data on volunteers, refugees, legal organisations and procedures in Germany. The software and its technology enabled version is one of a kind and easily translatable, given the widespread use of mobile phones today. Part of the Refugee Connect team is now in Germany starting to translate the idea into real life situations and strikingly, everything was done in six months! For more information please visit: http://www.oxfordglobalchallenge.com/maps_and_reports/
The story presented here is just one of the many examples of start-ups born in Oxford that are reaching out to the world with great impact. So, it does not matter what industry you are in, you can follow similar steps to reach a successful outcome!