Ricky Spero is co-founder and VP of Product Development at Rheomics, a startup born at UNC with a test for measuring the strength of clots to help doctors control bleeding in sick and injured patients.
I was happily nodding along with Bill Bing and Joe Procopio’s recent posts advocating a better exchange of ideas in Triangle Startup. Then a comment by Joe made me pause:
I haven’t cracked the puzzle of getting the gamers more involved at startup events and vice versa. I don’t know if it’s about the fragmentation of the industry or just an independent streak. Maybe it’s like biotech, where those folks really don’t see the need to interact with other verticals.
Joe gives us too much credit. If anyone needs to be spending more time with Triangle hacker-founders, it’s the biotechies.
I’ve spent a lot of time with both crowds. As the hacker-founders know, startup has changed a lot in the last 10 years. But ask a biotechie about Y Combinator, and you’re likely to get a blank stare. Mention “Lean Startup” and the best you’re likely to get back is, “I think I’ve heard of that book.” Drop the factoid that AWS runs a quarter of the internet and you’ll get, “What’s AWS?” Heaven help you if you suggest that seed stage deals could be done on a handshake, without full-cavity diligence.
It’s just a different world
The rebuttals to the last paragraph write themselves. Life science startups have high overhead, but lean startup and accelerators only work when the seed capital requirements are vanishingly small. Software is usually the least expensive part of a biotech company’s OpEx, so the software tech stack doesn’t matter. Life science valuations are IP-driven, so diligence remains critical.
Why stop there? Regulators stand between life science startups and their customers, forestalling any attempt at launch/iterate. Disintermediation is much harder than in the software business, so strategic partnerships are common, which often suppresses retained value.
Yes, the landscape in biotech is different. But not all of these issues apply to every life science startup. That means that some of the modern startup techniques can probably be applied to most of our companies. And the benefits can be profound.
Look at it this way: if software startups routinely take 10x less in investment, exit 2-3x faster, and deliver valuations 5-10x bigger, that’s 100-300x better ROI. Shouldn’t we biotechies at least make sure we know why?
Why is this my problem?
So biotechies should be talking to hackers. But if that’s the bottom line, then I’m posting this article in the wrong place. (If you haven’t noticed, biotechies don’t read ExitEvent.)
That’s not the bottom line. We biotechies also have something to teach you hackers. We know how to structure strategic partnerships. We’ve seen patents awarded and contested, and in a pinch, we can draft our own claims. We know how to find, work with and evaluate performance of people with highly-specialized domain knowledge. We pull down series B-scale dollars through grants and partnerships. We aren’t scared away by hospitals, insurers or regulatory agencies. Content marketing is so old-hat for us that we still use a plain-English phrase for it—publishing a paper.
Biotech may be a different world, but it’s a rich one. These are folks that hacker-founders could have a good time getting to know.
They don’t come to my parties.
I meet a lot of biotech founders, and I tell everyone the same thing. If you want to meet people who know biotech, spend time in RTP. If you want to meet entrepreneurs, go to ExitEvent socials. But I don’t think that most life science types feel terribly welcome.
Bottom line: biotechies aren’t coming to your parties because you don’t invite them.
Which brings me to my suggestion for the Triangle’s hacker-founders. The next time you’re out shaking hands, make an effort to find someone in biotech. (You’re more likely to succeed at a university-hosted event like the Carolina Challenge or a KickStart Showcase.) Make a point of asking what the day-to-day is like. I bet you’ll stumble on expertise that’s worth sharing over a cup of coffee.
As Joe Procopio likes to say, it’s all about relationships. Biotech Startup and Software Startup aren’t sharing knowledge, not because it’s a waste of time, but because we aren’t friends. Surely, we’d be better off if Biotech Startup was speaking at Paradoxos and Software Startup was hanging out at First Flight Venture Center.
And who knows? Maybe we can make RTP the town that breeds the unicorn: the life-saving life science company that looks and acts like a fund-making software startup.