Kickigai Weekly
Posts
What does it take to launch a startup in health & bio?

What does it take to launch a startup in health & bio?

The #1 framework of successful founders and how scientists can take the leap

Giammarco Pacifico
September 20, 2023

Startups can change your life.

Joining the right startup at the right time is the best way for most people.

But other people have an itch they must scratch: the desire to become founders.

In this issue, we’ll dive into what it takes to launch a health/bio startup, covering the importance of taking a decade-long view and how scientists and engineers can become great founders.

What great founders have in common

One of the reasons why I love working with health & bio founders is because they cannot take a short-term view of their company.

There is no flipping or get-rich-quick scheme in these fields.

Everybody knows you’ll be building your company for at least a decade because research, approvals and human testing take time.

This is a filtering function with respect to hype-chasing founders who are one day launching a crypto company and the next day an AI company.

Nobody ever woke up one morning and decided to build a biotech company for melanoma (a skin cancer) just because it was cool.

If you’ve been around founders, you know that all of them say that they’re playing the long game because that’s what everybody wants to hear but many times it’s not the truth.

With a health & bio startup, the industry forces you to play for the long game.

And you must be self-aware enough to keep pursuing a goal within this field.

Taking a long-term view is easier said than done.

Here are a few things that help keep the team motivated and excited:

1. Creating momentum from the beginning

Whether it’s because of promising pre-clinical research, a functioning prototype or a small group of enthusiastic users, early wins keep everybody aligned and focused on the bigger goal.

This is the feeling that things are moving and every new thing you build opens up even more opportunities you are dying to try because you’d like to know what happens.

On the other hand, if things are stagnating there is no amount of work that feels enough to propel your company forward.

Stagnation leads to frustration, which leads to all kinds of bad behaviours.

2. A problem you are genuinely interested in navigating

No matter if your company is successful or not, you’ll become one of the world’s experts in the specific problem you’re trying to solve.

You’ll spend thousands of hours speaking with every stakeholder and even more hours ideating and building the best solution you can.

This is going to be impossible if you are not internally obsessed with the problem at hand and if you’re not willing to learn more about that every day.

Motivation evolves and there is nothing wrong with not having a crystal clear mission from day 1 but the lack of a genuine interest can break a founding team over time.

3. The inevitability of founding a company

If you are torn between taking a corporate job and starting your own company, you should go for the corporate gig.

Chances are you won’t particularly enjoy it but it will give you the freedom (in both time and money) to focus on your families, hobbies and passions.

If you instead choose to launch a company, things will get difficult fast.

And as soon as they do, the option of going back to a stable job will keep you up at night, especially as you start having more family responsibilities.

The most successful founders are the ones who don’t particularly enjoy the idea of becoming a founder because they know it’s f*cking hard but they do it anyway because they feel they have no other option.

❝

I don’t like being a founder but there is nobody else I’d rather work for. What would I do during a 9-5 job sitting at a screen crunching numbers?

What a great founder would say

4. Optimize for long-term financial success

Early-stage founders are not paid much.

A pre-seed founder in Europe makes on average between €60k and €80k based on location (with Berlin being the cheapest and London the most expensive).

It might look like an amazing salary if you are coming from academia but anyone who wants to maximize yearly income already took a corporate job.

Risks of taking a long-term view

Not every founder has the right starting skills and resources to go for a home run on their first game.

Many ambitious and talented people often pick problems that are simply too hard to solve at that stage of their careers.

Despite being brilliant at what they do, they might not have the skills, the network or the credibility to assemble a world-class team, raise $100M pre-product and sit down with public agencies to access large-scale contracts.

If this is the case, it will be almost impossible to get the traction you need to kick things off (point #1 above) and the company will be short-lived.

Many legendary entrepreneurs who are now solving massive world-changing problems started with straightforward (not easy) businesses that gave them the financial stability, network and reputation to work on the next phase in their careers.

Elon Musk founded Zip2 and X.com before SpaceX and Tesla
Marc Cuban founded Broadcast.com before his investing career
Sam Altman built Loopt and worked at YC for years before Open AI

The other side of the coin is that it’s much easier to build a hard startup by generating a lot of excitement around a moonshot product and selling the vision instead of facts.

For better or worse, science can’t be faked and “faking it before you make it” is a dangerous route if data clearly tells you won’t ever make it after all.

When this happens, the temptation of raising more money and hoping for that magic breakthrough can lead to a dangerous path.

Promises can easily turn into lies and disruptive companies into scams.

I suspect every venture capital firm investing in deep tech has at least 1 or 2 scams in their portfolio. Here is how they did it.

Scientists & Engineers - are you ready to launch a startup?

If you are thinking of launching a startup in healthcare & biotech, chances are you are not a Bitcoin expert.

Instead, you’ve probably worked in academic labs, hospitals and research centres around the world.

You have been dreaming of becoming a professor and getting the freedom to do your own research but you’ve realized that academic incentives are more limiting than you thought.

Your research is driven by publishing papers in high-raking journals and getting grants by convincing countless committees.

In startups, I can guarantee you’ll still get freedom.

But it’s a different kind of freedom.

You’ll work at the service of your product and your customers, which many times means saying no to fascinating research that does not fit the end goal.

The only way to make such a tradeoff work over the long term is to carefully choose your customer.

Your customer can be a person, a patient, a company or even the government and the best customer is one that you care about and that motivates you.

Compared to working in a university lab, you’ll get extreme operational freedom to set up your lab the way you want, hire the people you believe in, decide salaries, operating procedures and much more.

Your success will also be measured in a very different way.

In research, you are deemed successful if you consistently publish in well-respected and well-known journals. By pushing the boundaries of knowledge you plant a seed that other people might grow and turn into something impactful.

If you do this consistently, you hope one day to get the long-awaited professorship and change your life forever.

Unfortunately, this is not the case and <0.5% of Ph.D. students end up becoming professors:

Source: Royal Society

Once you become a startup founder, your success will be measured by financial criteria.

Some of them probably look shallow to any scientist (money raised, valuation, # of employees) while others may hold more meaning (# of patients/users helped, money/time saved to customers).

Truth be told, they are all important at different stages and optimizing for the right ones is not as easy as it looks but you’ll always have the choice to change the direction.

The PostDoc dilemma

Going for a postdoc is the default path for many scientists and engineers.

There is nothing wrong with going further in the academic path if that’s what makes the most sense for you.

Unfortunately, too many PostDocs take this route because of the inertia and uncertainty of any other options outside of academia.

If you feel this way, you’d better get out of the lab and start talking with people.

You’ll soon understand that getting a job in the “industry” hides a thousand different options.

And one of these options is to launch a company.

The trait you need to launch a company: RESILIENCE

Resilience is the ability to push through when things get difficult and I believe it’s the main predictor of successful founders.

The hard part is that it’s very hard to assess on paper and it must not be confused with confidence.

A shy engineer could have all the necessary resilience to be successful.

Sometimes resilience comes from the inevitability of other paths (above), other times it’s an act of desperation.

Without desperation, it’s not logical to leave your comfortable job to launch a startup.

Because fear of loss is much stronger than potential gains.

So before you start a company ask yourself, what do you have to lose?

Losing 1 year of salary when you are young is completely different than getting rid of the golden handcuff of a corporate job with family and mortgages.

If you are a young scientist or an engineer thinking of launching a company, don’t wait until everything is perfect because it never will.

Instead, this might be the perfect time to launch a company and if you want to talk about it, just get in touch.

This week's top scientific reads

MDMA treatment for PTSD (Nature)
A new function for glial cells (Nature)
An open-source foundation model (Nature)
From proteins to atoms LLMs (ArXiv)
Meet the “unknome” (PLOS Biology)

Read my comments on these articles here.

Latest funding rounds in health & bio

Ready to turn this news into your next career opportunity? Here is how

IOMED raised €10M for their Healthcare Data Activation technology to unlock the value of hospitals and patient data 🇪🇸
Twig raised £3M to develop sustainable alternatives to food ingredients found in common products using AI and robotic automation 🇬🇧
Rejuveron Life Sciences AG raised $75M to further develop its clinical pipeline of therapies against age-related conditions 🇨🇭
BioLamina raised €17M to further commercialize its cell culture matrices made of proteins that are prevalently used in stem cell research 🇸🇪
Microplate Dx raised £2.5M for their point-of-care device that makes diagnostics tech for antibiotics 10x faster 🇬🇧
Kuano raised £1.8M to combine quantum simulation with AI in the next-gen platform for drug discovery 🇬🇧
Multiwave Technologies AG raised CHF 3.8M to secure FDA approval for the world’s lightest portable magnetic resonance imaging device 🇨🇭
Apollo Therapeutics closed $226.5M to further develop its pipeline of over 20 different programs leveraging a “hub-and-spoke” approach 🇬🇧

If you enjoyed this issue, share it with a friend or two