mulligan

Information about mulligan

Published on September 18, 2007

Author: FunSchool

Source: authorstream.com

Content

John Mulligan, October 16, 2006 Invention to Startup Seminar :  John Mulligan, October 16, 2006 Invention to Startup Seminar My Background:  My Background Trained as a geneticist BS in biology from MIT Ph.D. with Sharon Long at Stanford Biology Department Post-Doc with Ron Davis in Stanford Biochemistry Dept. Helped set up Human Genome Center at Stanford Director of Genomics at Darwin Molecular Applying genomics / genetics to drug discovery (1993-1999) Founded Blue Heron Scientific strength of Darwin Molecular Clear business goals Strong links between business and scientific planning GeneMaker® Gene Synthesis: Get the Gene You Want:  Customer orders via secure website Blue Heron manufactures and ships DNA molecule(s) About 2 to 4 weeks later, customer receives exactly the DNA they wanted No QC necessary: can download sequence trace data from their secure website Start experiment right away GeneMaker® Gene Synthesis: Get the Gene You Want Blue Heron Biotechnology, Inc.:  Blue Heron Biotechnology, Inc. Custom gene synthesis Fee-for-service No downstream ties Service business based on an assembly-line production process Unique products for every customer Uniform assembly process Automated, scalable, database controlled Large potential market $300-$400 million spent on reagents for cloning Fully-loaded costs 3- to 5-fold larger ($1 to $2 B) Current gene synthesis market ~$25 million (~2% of potential) Blue Heron Biotechnology, Inc.:  Blue Heron Biotechnology, Inc. Established in 1999 Started with a product idea and developed the technology for this product Venture funding in 2000 Commercial launch in 2001 SBIR funding Phase I and II SBIRs, tightly focused on business needs Now use robots developed with first Phase II SBIR Projecting sustained profitability by mid-2007 Plan to exit through acquisition Starting a Technology-Based Company:  Starting a Technology-Based Company Business Model Integration of scientific and business planning The role of professional managers (MBAs) in a technical organization Financing strategies Rewards and costs Business Model:  Business Model How will the company make money? Who is the customer? How will they buy your product? What will it cost to make? How will you get the information to customers? How is this different from what is currently available? Realistic knowledge of the market helps A founder or advisor with direct experience (business development, sales, marketing, etc.) Try to sell something as early as possible Reality check, experience, new ideas, MONEY Scientific and Business Planning:  Scientific and Business Planning Many companies, big and small, fail to integrate business and scientific planning Science should address business needs Business goals and plans should correspond to scientific realities Science is unpredictable, business planning is all about predictions… Both need to be adjusted regularly to continue to match Professional Managers:  Professional Managers Many reasons to choose professional managers (~MBAs) May be needed to raise capital Tackle the vast number of details in starting an organization As a scientist starting a business you have two choices Do a job you are untrained for and may not like Give the job to someone who may not understand the most important issues the business will face Hiring a CEO who is not steeped in the technology can be very risky while technology is the main issue Poor Management is at the Root of Many Failures:  Poor Management is at the Root of Many Failures Scientists may fail to understand how to Focus on the critical issues for the business Manage a large, disparate group of people Do business development successfully Make money Managers may fail by Not understanding science and scientists Managing too much Focusing on GANT charts 'Micro-managing' Hiring other professional managers 'Death by vice presidents' Making decisions that are based on business needs rather than technical reality Managing Your New Company :  Managing Your New Company Find a scientist to run the company when science is the main issue Confident but not an egomaniac Understands science but willing to be wrong Industry experience a big plus Support with business skills early Controller very early, CFO as soon as you can afford one MBA business development, product development or sales But not so soon that they have nothing to do- they will start managing whether or not it is needed… Replace CEO with professional manager when appropriate Investment Financing:  Investment Financing Venture financing vs. 'friends and family' Venture financing Required for many biotech businesses Best chance of getting the technology in use 50% - 80% of your effort while pursuing financing Will consume 20% to 30% of your effort on an ongoing basis Don’t believe the 'added value' stuff- it’s the money Money may get more 'expensive' as the company matures Fantasy, reality, (partial) success, SUCCESS Bootstrap Financing:  Bootstrap Financing Many companies start this way Sustaining this model depends on getting revenue quickly Not feasible for some types of companies Blue Heron is based on a capital-intensive manufacturing process Government grants and partnerships may expand the range of companies that grow this way Randamp;D funding Clinical trial support Contracts Many of the biggest returns to the founders have been from bootstrapped companies Rewards and Costs:  Rewards and Costs Professional Financial Personal Professional Rewards and Costs:  Professional Rewards and Costs Expanded scope for projects SIZE: Larger teams allow you to tackle problems of larger size and complexity COMPLEXITY: Easier to form and manage multidisciplinary teams Concrete impact of your ideas Often the value of basic research, while clear, is abstract Putting an effective new therapeutic or a new tool software engineering on the market impacts peoples lives Learning experience Focus on completion Excel skills… Financial Rewards and Costs:  Financial Rewards and Costs Potential for return implicit in any business Starting a company not the surest route to $$ Many small bets may be better if financial returns are your goal (e.g., consult for several companies) Conflict between maximizing financial return and professional or personal goals Requires an investment, even if you are using 'other people’s money' Time Salary Attention Go in with clear (written?) limits on total investment Personal Rewards and Costs:  Personal Rewards and Costs Satisfaction in building a company where people want to work Stress There is always more to do than you can finish If you fail the happy people mentioned above lose their jobs Payroll comes every 2 weeks Conflict with the home front Time: committed to a 45-50 hour week, still hard on family Emotional: worries and stress can spill over Statistical: up there with remodeling your house Summary:  Summary Have a good business model before you start Test the model with experienced advisors Try to sell something- products, deals, pet care Find a scientist to run the company while science is the main issue Provide strong business advisors and support early Be ready to switch when business issues are most important Choose the timing for venture financing carefully Best returns from boot-strapped companies Better chance of getting the technology out and getting some return with venture capital Consider the rewards and costs

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