James Huang, MBA, founder and Managing Partner of Panacea Venture — a life sciences venture fund and Cure Collaboration Residency company — understands the challenges biotech entrepreneurs face as they launch their companies.
When he first became president of a biopharmaceutical company, it wasn't what he expected. He spent less time running the operations of the company and more time working with investors and raising capital. His experience taught him the importance of building the right team to lead a life sciences company so he could do the work that he found most inspiring.
Now, drawing on more than 30 years in the biotech industry, Huang shares with Cure that tip as well as four others for biotech entrepreneurs who are just starting out in the field.
Tip 1: Coupling business model innovation with scientific innovation brings the greatest chance of success.
"Most people who start biotech companies are scientists by training. They have an idea in mind and they think it's going to change the world," said Huang. "That's what I love about the entrepreneurs I deal with. They come in with incredible passions and dreams."
While passion and scientific acumen have merit, however, it's the life science entrepreneurs with business model innovation who have the greatest chance of success. "If you have both scientific and business model innovation, your probability of success is much, much higher," Huang added.
Part of that innovation is knowing whom to choose as investors. "Not all investors are alike. Very early on, you need to be able to differentiate those who can really help you on the journey from those who are trying to make a quick buck," he noted.
Tip 2: Plan your exit strategy.
When Huang realized he did not enjoy being the president of a publicly traded biotech company, he knew he had to make a change. He encourages entrepreneurs to think about how far they want to go within the company and know when it's time to move on to other opportunities and hand the reins to someone else.
"You should think about what point in your company's life you will want to bring in seasoned professionals who can help you lead the company so you can do the job you want to do," Huang explained. "Bring in those folks to help you and transition in such a way that you can go back to focusing on what you do best."
Tip 3: Be constantly aware of the competition.
"There are thousands of biotech companies. Even if you think your idea is great, you may not actually know what's happening in the rest of the world with regard to competing technologies," asserted Huang. "Be keenly aware of the competitive environment and be able to pivot from time to time into other areas. By understanding the competitive environment, you'll be better prepared to tell your story when you're seeking partners to help you."
Tip 4: Know the milestones you'd like to achieve.
"Set key milestones that you must achieve as a company and know how potential partners can help you get there," said Huang. "Most entrepreneurs don't understand that you're much better off killing a project that doesn't work than dragging it on, because it gets more expensive as time goes on. So be prepared to kill the projects that don't work so you can focus on more promising ones."