Wise Men Learn from the Mistakes of Others

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]

Inspiration:  www.nature.com/bioent/2004/040301/full/bioent796.html

Someone once told me that “smart people learn from their mistakes, while wise people learn from the mistakes of others”. Of course, it takes time and effort to research the blunders of others, valuate them, and apply the new found wisdom to your own life. Well, recently, Nature Biotechnology interviewed some the biotech world’s start-up ‘greats’ on what drives a scientist to start a company. Nature unearthed the following pearls of wisdom:

1) “Mature companies are interested in product development and have an intense need to get products to market; they just don’t have the time to dabble in new technologies. That’s what happened with recombinant DNA—large pharmaceutical companies relied on small ones to carry out development.”

2) “I had the opportunity of working in large pharma but felt that an inherent conservatism in these large organizations would delay bringing the technology to the discovery process. I believed that starting my own company was the only viable option.”

3) Greg Winter, founder of Domantis, saw founding a company as a way of expanding his group out from the confines of academia. With little prospect of enlarging his group, he decided to start a company instead. “It may not be the best reason for creating a startup company, but I needed more hands at the bench, as there were huge technical challenges.”

4) Balancing investor expectations with realistic timelines for technology development was a constant battle. In Biotech, ‘quick money’ is rare. It is best to start small and let the company grow gradually, establishing commercial contracts to keep the company afloat.

5) The high level of uncertainty associated with a startup makes retaining staff, who are key for R&D, very challenging.

6) “It is important to have enough cash in the bank…I have learned that it is a good strategy to raise money, even when it is not needed, so that there is always a sufficient cash cushion for when the market is uncertain.” Further, it is suggested that companies take advantage of every financing opportunity, because, more often than not, you are going to have to work miracles with very little money.

7) With respect to “people”, hire them for their attitude, not just their expertise. Focus on building a team with diverse backgrounds. In other words, do not forget about conducting a gap analysis. Further, never underestimate the importance of a strong management team. Having one allows a company to adapt to adverse conditions. Early on in business development, try hard not to forget about the benefits of collaborations.

8 ) Try to get your employees to be invested in the company. For example, “incentivize” them with rewards such as bonuses and stock options, which will make them feel responsible for the company’s success.

9) Let businessmen deal with business, and scientists with science. As a scientist, sometimes it is best to remove yourself from management in order to have an objective view of the company’s science. That said, it is noted that in smaller companies, the founder will often have to wear multiple hats. Often, the founding scientist is best suited for a consulting role on the company’s advisory board.

So, what does it take to succeed? Will, ambition, great mentors, and the ability to differentiate between the academia and commercial interests of a company. To quote Jim Collins: you’ve got to maintain faith that, against all odds, you can and will succeed…while always confronting the most brutal facts of your current situation, whatever they might be.

Lastly, the article makes the point that being an entrepreneur is a lot like being a leader: you either have it, or you don’t. It’s not something you learn. Here, nature is the controller, while nature takes a backseat.

Slainte Mhath!