By Brandon Lucke-Wold
The entrepreneurial spark started with a rock-climbing excursion with a friend, who happened to be another M.D./Ph.D. student. In between climbing routes, we began talking about how our research was going, and what limitations we were facing. It quickly became apparent that we were both struggling with similar technical limitations and that these limitations were slowing down the research process. One in particular was the archaic way lab animals are tagged and tracked. We were both using small metal ear tags, which were very hard to read when the animal was moving around the cage. After reading the tag, the information about the animal then had to be manually updated every time we ran an experiment. Needless to say the inefficient system was prone to error and time consuming. The frustration that we shared ignited our quest toward entrepreneurship. We began brainstorming that day and decided that we could use advanced technology to streamline the process and save researchers time, improve accuracy, and reduce cost.
The rock climbing excursion occurred over two years ago now, and we have slowly been working on developing a better system for tracking and tagging laboratory animals. After several iterations, securing funding, and developing a team, we have patented the RFID technology and created a fully functional system that is now ready for market. The animals can be tagged with a custom applicator and then tracked with a modified smartphone reader that takes milliseconds to read the tag. All the information is automatically uploaded into a user-friendly software system so that errors are eliminated. Along the road of product development and business start-up, we faced many hurdles but also received success such as winning the West Virginia state business plan competition, placing 3rd in Pitch Texas, and being named the West Virginia University student innovator of the year. The lessons we have learned through the process have been extremely valuable and something most students never get exposed to during the course of their training. In this blog, I’ll highlight several key points that were learned along the way with the hope that it inspires others toward entrepreneurship and to help others avoid some of the mistakes we made.
Lesson 1: Develop a great team. At most of the business symposiums I have attended, the speakers frequently say that investors don’t invest in ideas, they invest in teams. This statement, although simple, is profound and true. Throughout the process of business development this has become exceptionally important. Often the original idea generators don’t have the skill set or background to bring the idea to fruition alone. In our case, we needed an electrical engineer, a patent lawyer, a business manager, and a software developer. These new team members helped refine the idea and make it more realistic. To develop the team it is important to set obtainable expectations, hold members accountable to productivity, and get people involved who are passionate about the idea and/or market. The hardest part is getting people to set the groundwork for the business early when limited capital is involved. Most start-ups don’t have a significant amount of start-up funds to pay team members so team members must be enticed by equity rights in the company. They must believe the company can be successful and work towards the goal of profitability. Although those conversations are difficult, it is important to discuss and be up front about expectations early on. Performance clauses that keep team members accountable for productivity are exceptionally important to keep progress moving ahead with the idea and to ultimately allow the company to be successful.
Lesson 2: Map out a flexible 5-year plan. When starting out in a business endeavor, entrepreneurs often assume that progress will occur rapidly. This, however, is often not the case. Starting a business requires the founders to have perseverance, set up meeting after meeting, and to secure funding through grants and investors. While this can be frustrating, it is an important part of the process, and with time the idea begins to grow from a thought into a reality. Having a long-term plan for the company is vital for team morale and vision. Companies often go two primary directions: initial product sale followed by licensing, or continued growth until eventual buyout. In the realm of biotechnology, growth until buyout is the more common approach. Large biotechnology companies want to see that the product or products have merit through revenue generation prior to negotiations for purchasing the product rights. A good five-year plan is to develop prototypes within the first year, secure intellectual property through patents, trademarks, and copyright in the second year, and begin beta testing in the third year. If a company can begin sales during the third year and move towards profitability by year five, the likelihood of long-term success is much higher.
Lesson 3: Be open to ideas. Once the entrepreneurial process starts, business founders often become hooked to the process of company spin offs. It is important to keep an open mind to new ideas and the development of new teams. In my personal training, the process of the ear tags has allowed me to look for the profitability and potential in other arenas. With my lab research, we have spun off a company for novel treatments of concussions, and I am already thinking about ideas for new medical devices as I participate in clinical work. The key is to establish networks and credibility. Through the process of getting the animal ear tag to market, I am showing future investors that a) I know how to run a company, b) I’ve gone through the hurdles of securing funding and developing prototypes, and c) that I know how to develop a good team. My mentors have told me that like most things, performance improves with practice. The continual entrepreneurial drive will naturally improve the efficiency of business start-ups over time.
Lesson 4: Choose good mentors. Picking well-respected leaders who have been successful entrepreneurs cannot be overemphasized. It is sometimes hard to find these connections but with perseverance and hard work they can be built. Mentors can provide advice on success but also can vet ideas to see if they should be pursued. Ideally, mentors should be sought from the field of business. For example, a biotechnology start-up should have a board of advisors from the biotechnology sphere. Communication is key to keeping these connections vibrant and beneficial. Often times mentors take great interest in providing guidance to young start-up founders with the hope that the founders will one day be able to pass down the wisdom to the next generation.
In summary, entrepreneurial endeavors are a natural progression of scientific training for those with the drive and interest to turn ideas into realities. Although hard and challenging at times, the process is highly rewarding. Investors invest in teams, and teams are built with strategic planning, focus, and clear expectations. Mentors can help navigate the ropes of a business start-up, but success is obtained ultimately through hard work, perseverance, and flexibility.