Recently, a blog post about garage biology in Silicon Valley got me thinking more about the role of the garage in life science start-ups. The pictures of tissue culture hoods in a garage warmed my heart and really opened my eyes to the possibilities of doing biology in nontraditional ways and locations. Many more eloquent people have been writing about this coming revolution of do-it-yourself biologists for the last few years, but I think that the idea may become the reality even faster than most expected.
As I started my small, virtual journey into the world of garage biology I quickly found groups like
DIYBio. I am impressed by their combination of virtual and real meet-ups that I feel are often lacking in the world of biotechnology start-ups. From DIYBio I was led to a local project in San Francisco called
BioCurious, which became the inspiration for this post. The idea behind BioCurious is to create a “new biology collaborative lab space”. In other words it’s time to move out of the garage. As listed on the
About page at BioCurious, they are using a similar model to other hackerspaces such as Hacker Dojo. A similar model can also be seen in the Tech Shop, which was recently the subject of a
New York Times article. Basically, members pay a monthly fee for access to lab space and equipment to work on their various projects, whether they are hobbies, bio-art projects or projects for a start-up company. I think a place to work on life science related projects in such a way is a logical extension of these other successful solutions, and will be a welcome addition to the life science community here in San Francisco.
What does this mean for start-ups in the life sciences in San Francisco? I think a place like BioCurious could be a great place to start a lean life science company. The general perception is that it requires a lot of money to get a bio start-up off the ground, as space and resources are so expensive. Not only would a place like BioCurious change that dynamic by providing cheap lab space, it will also provide a community and pooled resources that could have great value going forward. I haven’t had a chance to connect with those behind BioCurious but I hope to do so in the near future and can’t wait to see how things unfold. It would be great if the various life science communities in San Francisco, ranging from the DIYBio community to the more academic communities like QB3 and USCF, were able to cross-pollinate ideas and resources. I know there are groups trying to make this happen and I hope to have more updates on that in the future.
photo credit: odreiuqzide
Earlier this week was the BayBio 2010 conference titled “Life Science Innovation: Drivers and Barriers”. I wasn’t able to attend, but there were a lot of great updates on Twitter from a variety of sources such as BayBio and Michael Fitzhugh. From the updates it appears it was a great conference with a lot of interesting insights about the life sciences industry in general and in the Bay Area. (You can search for the hashtag #baybio to see a recap of the many great updates.)
One of the trends discussed at the meeting was the rise of companion diagnostics, or the strategy of integrating a diagnostic with a therapeutic. A classic example of such an approach is the HER2 test being used to select patients for Herceptin treatment. There are more and more examples of drugs failing to show therapeutic effect on a large, general patient population, but having significant effect on a targeted patient population identified by some diagnostic endpoint. It is effectively the first incarnation of personalized medicine.
The interesting thing about companion diagnostics is how quickly the idea has gained traction in just the last four years. In 2006 Steve Burrill was talking about how “theranostic” companies would be the next big thing in life sciences. That year I participated in the Idea to IPO class offered at UCSF in conjunction with Burrill & Company and worked on a business plan for just such a company combining a diagnostic with a therapeutic. I was surprised at the end of the course when much of the feedback we received from various venture capitalists was to get rid of the diagnostic portion and focus on the therapeutic. In our team’s mind the combined approach was part of the value proposition for that particular technology, but investor sentiment was clearly against it.
Fast forward to 2010 and the companion diagnostics approach can be seen from the smallest therapeutic company to the largest pharma company. In March, Roche held an investor day in New York to give an update on their pipeline developments. One key area that they discussed was their development of a BRAF mutation assay as a companion diagnostic to their BRAF inhibitor. They discussed other companion diagnostics and highlighted their strengths in diagnostic development going forward. Other examples of such practice can be found throughout big pharma, as companies recognize the value of reducing patient pool in exchange for a chance to have increased therapeutic effectiveness.
So what does this mean for life science start-ups? There are a lot of great diagnostic and platform technologies out there that are readily applicable to companion diagnostics. As a part of a larger strategy these start-ups could look at developing a product that could be used as a companion diagnostic. As many therapeutic companies do not have diagnostic expertise, this sort of project could lead to development partnerships, licensing, or even acquisition possibilities for start-ups in the diagnostic space. As a way to help get the ideas flowing there is a BayBio meeting next week focusing on personalized medicine, featuring venture capitalists and their interests in the field. While diagnostics have often been considered a lower priority than therapeutics in many investors’ portfolios, it appears that change is in the air.
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Twitter? The more cynical among you are thinking, “Twitter is the place where I can learn what Bob had for lunch and that Jane is having the worst day ever. How could that be useful for my start-up?” Others may be thinking, “That’s great for tech companies or web start-ups, but pretty useless for my platform/diagnostic/pharm/cleantech company.” As few as three weeks ago my personal opinion of Twitter was very close to those stated above. Although I am admittedly late to the party, I have finally come around on Twitter and it’s usefulness, especially in the world of life science start-ups. Here are the Top 6 reasons you and your start-up should use Twitter (in no particular order):
- Access to industry news – Twitter is most useful as a link-sharing service. This to me is the killer app of Twitter and the feature that finally converted me to using it. There are a bazillion sources of information available on the web and it can be very difficult to filter out the important pieces that you need on a day to day basis. Twitter is a way for you to share links to important information and to have a feed of information filtered through your friends and colleagues. As a start-up working on a biologic therapeutic you may want to follow @FierceBiotech for general news in your field. Any company looking for regulatory approval may follow @FDA for any up-to-the-minute updates. The possibilities and sources are endless, but you can tailor your feed over time so that you are getting links from sources you trust and with topics that are important to you.
- Recruit employees - What is your preferred method of recruitment? Do you really like getting flooded with off-target resumes from craigslist postings? Most start-ups would prefer to hire someone through a referral from someone they trust. Word of mouth and emailing people can work, but Twitter is a way you can get the word out to a larger network and yet still be an avenue to decent referrals. A quick note on Twitter that says you are hiring and either a brief description or better yet a link to the job posting could help you gain access to a wider net than just emails and phone-calls.
- Sales leads - This item clearly only applies to the subset of life science companies that have a product to sell. Research platform companies and others may find Twitter to be another avenue to generate sales leads. If you have a product that a customer really likes and they use Twitter to tell their colleagues, then you have just secured a seal of approval and possible referrals. You can even provide discount codes and other promotions to help with your sales process. There are some companies taking advantage of this, but life science companies are still well behind the curve. It obviously won’t replace a direct sales team, but it can be a great complement in a greater sales strategy.
- Customer service – Again, this is more applicable to companies with products for sale. However, this could be an important avenue for those that are testing products with customers as well. Some customers will prefer using Twitter to contact you. The benefit of using this avenue is that the majority of messages (if not sent as direct messages) can be seen by the public. This is a great opportunity to show the world how great your start-up is at customer service.
- Share resources – This idea gets back to the discussion of a start-up community that I discussed in a previous post. While you clearly won’t want to tell the world the details of your patent application, there are many resources out their that can be useful to life science start-ups whether they are virtual or physical. Someone may have had success hiring someone through Jobs Now SF and they could pass that info along. Someone may have seen the seminar at QB3 about risk and insurance and they could pass that info along. Someone may have found a great discount program on antibodies or an upcoming auction of surplus lab equipment. We all have limited time and resources that make it impossible for us to know about all of the useful resources out there. If the life science start-up community used Twitter for such purposes everyone could benefit.
- Public relations – This could be a positive or a negative depending on whether or not you are in stealth mode. There have been recent discussions for and against having your start-up in the public eye. I think it depends on the company which works best, but for those that want a public face, Twitter is a great tool. The obvious reasons like generating sales and customer service were discussed earlier. So why have a different point here? I think even a therapeutic company with a product that is a decade away from hitting the market could still benefit from positive public relations. The most basic example is access to funding, as when it comes to funding sources, the more the merrier.
Finally I will use 23andMe as an example of a company using Twitter. I’m not saying they are the perfect or only example, they just demonstrate a lot of the above points. One look at their Twitter profile, and you can see examples of sharing relevant research links, discount codes, and customer service interactions. Also, 23andMe has had no problem in the realm of public relations. You may not have a web-based, consumer-oriented genetic testing company, but I think even your life science company can find value by being on Twitter.
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In the last few weeks I have seen a lot of posts and updates on tech blogs and Twitter feeds about angel investment. It seems that a lot of angel deals are getting done right now and there are a lot of great resources out there for those aspiring to raise angel money. I thought I would pass along some of these resources and attempt to address if there are parallels that could exist in the life sciences.
AngelList is a resource from Venture Hacks to connect start-ups with Angel investors. This appears to be an incredible way to access a large number of angels all in one place, and it serves as a way for angels to get intros to start-ups that are vetted by Venture Hacks first. While this is obviously tech specific, it seems like this model could work in the large active life science angel community as well. There are large angel groups, like the Life Science Angels, that use a meeting approach to put deals in front of investors. I think a virtual model could be a very interesting addition to life science angel investing.
MicroVentures is a recently-launched company that is taking a Prosper or Kiva approach to equity investing in start-up companies. It acts as a service to allow start-ups to raise a syndicate from a large number of investors. It also allows angels to possibly invest less money in larger syndicates. There may be some disadvantages to using this sort of method for raising angel funding, but it is always good to have alternative sources of funding. The platform isn’t up and running yet, but it will be interesting to follow their progress.
Thomas Korte is a tech angel investor that has some great posts about his angel investments. His posts on how to cold email or how to meet important people in Silicon Valley are great advice for any entrepreneur looking for funding, regardless of field.
I have a hard time finding any life science angels that blog or that use Twitter. I’ll keep looking and pass them along. If anyone knows of any angels that do so please post it in the comments or contact me.
This is just a small subset of things I have seen in the last few weeks. I hope to do future posts on funding that may include, venture capital bloggers, seed accelerators and term sheets. Stay tuned.
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Earlier this year I was reminded of a little known employment assistance program that exists in San Francisco, called JOBS NOW! SF. Now it may seem a little odd that I would write about an employment assistance program on this blog, but it has some amazing benefits for life science start-up companies in San Francisco. The program in a nutshell is that federal stimulus money will pay 100% of the salary of any worker hired through JOBS NOW SF! through Sept. 2010. The employer simply has to pay for payroll taxes and any “fringe benefits that employees typically receive”. The only catch is that the prospective employee must be a resident of San Francisco, have proof of right to work in the US, and be a parent of at least one child under the age of 18.
Just think, you could have 100% of a new research assistant’s or business development person’s salary paid for you. To sweeten the deal further, the House just passed an extension on the program for another full year and added more money. Approval by the Senate is expected soon. This program could help a start-up add headcount and work to reach a valuation milestone it needs to raise more funding. I know of at least one San Francisco life science company that is trying to use this program (Green Pacific Biologics), and I’m sure there are others. This seems like too good of an opportunity to pass up for a non-dilutive source of funding to build your business. If anyone has any experience with the program, either as an employee or employer, please let us know in the comments.
While I have spent nearly a decade of my life working and training in the life sciences, I have always been a bit of a tech junkie. This is confirmed by one look at my Google Reader, where sites like TechCrunch and Mashable share space with Science and Nature. Reading about and being surrounded by tech start-ups has led me to think of a few things that biotech start-ups could learn from the Tech world:
- Establish better online resources
As I became more interested in getting involved with biotech start-ups I was drawn to sites about venture capital funding and start-up advice, such as Venture Hacks or Both Sides of the Table. These sites are treasure-troves of information for an aspiring entrepreneur, although the majority have a strong tech emphasis. While many of the principles are similar, such as principles for raising capital, I often wish there were similar resources that emphasized biotech specific issues. For a start it would be great if biotech entrepreneurs and investors began to blog about their early stage ventures and shared advice and experiences specific to the life sciences. In the Bay Area and a few other locations there are quite a few real-world workshops and seminars for this sort of advice, but it would be great if there were ways to get this information regardless of location.
- Build better communities – both virtual and real
I am also continually amazed at the strong sense of community that exists in the Tech world. There are both virtual and real-world communities for every tech topic under the sun. There are more and more bio specific meetings of this kind, but there are still nowhere near the number found in the tech world. I have been part of the small start-up community that exists at the Mission Bay campus of UCSF. Between QB3 and other entrepreneurship resources at UCSF there is a strong start-up culture and opportunities to interact. While this community has many positives, it is still small and limited compared to the large number and wide-ranging interests found in the Tech world. There are signs that things are starting to change. Through Twitter I stumbled upon Bradley Miller’s blog and his Bio+Tech effort. His introductory post about his vision for Bio+Tech sums up my thoughts about community much more eloquently than I have done here.
I mean this both literally and figuratively. The world of biotechnology start-ups is often ruled by intellectual property and access to capital. As such, most start-ups have senior scientists from academia or industry at the helm. Unlike the many examples of tech start-ups like Facebook, there are no college kids forming the next Genentech in their college dorm rooms. There are definitely some very trivial answers why that is the case, such as lack of sufficient training, experience, funding and/or space. But are there, or rather should there be, so many obstacles to the formation of innovative biotech companies? The great lure of Silicon Valley has always been about the possibility that the next Apple or Google is lurking in a garage somewhere. Start-ups in the life sciences need this youthful optimism and creativity as well. Again, just as with my previous two points, there are signs of change. One need only look to the garage biology movement and groups like DIYBio to see that in the next few years the next Genentech might be formed in a garage or dorm room. These sorts of changes are encouraging, but much more must be done to help get more young, innovative people access to the resources they need to make an impact in biotechnology.
I do not intend to trivialize the resources and communities that currently exist in the world of bioentrepreneurship. I know I have probably missed many such resources. If anyone is aware of any that I have missed please add them to the comments so we can continue to share and connect as a community. I will attempt to post more in depth discussions of some of these topics in future posts and will file them under Tech Lessons.