Everyone’s got one. You know, that idea that’s been banging around in the back of your head with annoying frequency. One prospective entrepreneur described his to me after a Contract Pharma event, “It seems like a great idea, but I just don’t know where to take it from here. I don’t have money or experience in running a business, but I can’t help but feel that this concept would really make a cool biotech startup.” 

Some people launch a new business simply because they need a job . . . My son graduated a year ago and it was only out of desperation that he and a couple of college friends formed a startup in the motion picture industry. But in the scientific marketplace, it takes a lot more than hard work and a couple of good friends. 

Biomedical startups require an original concept with solid science, leading very quickly to something that can generate revenue for investors. Ideas are easy to come by when you are young and full of energy, but sometimes your best ideas come after you’ve been given the old heave-ho in a corporate “rightsizing.” 

No matter when the idea hits you, it’s not easy to dig up the required chutzpah — and the backing necessary from other risk-takers who will support you. In this month’s column, I’ve interviewed two entrepreneurs behind a new business; these contacts have helped me come up with some great rules of the road for those considering something far afield from the traditional career in a company.

Vascular Magnetics

Dr. Bob Levy had a great idea. As the William Rashkind Profes-sor of Pediatric Cardiology at Children’s Hospital of Philadel-phia (CHOP), he and his team had been working with biodegradable polymer nanoparticles infused with iron oxide. Levy found that these nanoparticles can be site-directed by a low-power magnetic field, and that they can slow the arterial blockage that causes Peripheral Artery Disease by releasing the drug paclitaxel into selected blood vessel tissue.

Dr. Levy’s idea proved a really interesting nucleus for a company — after all, it’s a combination of nanotech, biotech and medical device technology all rolled into one. But what he needed early on was someone to help him with business advice. In short, he needed a person who could convert the concept into a business plan, one that is presentable to those discerning and hardened investors who put angel money or venture capital into biomedical ventures. After all, it’s the ability to attract funding that separates the “maybes” from the “also rans” in the biotech world.

Dr. Levy’s partner is Dr. Dick Woodward, a consultant and former biotech industry business executive. The two were put together through their participation in a unique “Proof-of-Concept” Program sponsored by the University City Science Center in Philadelphia. The program pairs academic scientists, such as Dr. Levy, with experienced business executives like Dr. Woodward.

The UCSC program solicited conceptual white papers and then paired scientists with business people. Dr. Levy’s idea and many others were presented in a protracted, competitive process, with some significant initial funding available to those who made it through the review. Vascular Magnetics emerged as one of the funded projects. “We were lucky,” said Dr. Levy. 

“We had focused on an unmet need — something that actually looked commercially supportable.” 

Is This Truly a New Idea, and Does It Meet an Unmet Market Need? 

“It’s the first thing that any investor will want to know,” said Dr. Woodward. “Even a smaller angel investor would pass on a business that doesn’t address a need in some unique way. 

A promising technology is only as good as the benefits others derive from it; cool technology on its own is a business plan destined to fail.”

I describe this common mistake in my seminars as “technology push versus market pull,” because many ideas fall into the former category. Their concepts are, as Dr. Woodward describes, “cool” — but they don’t address a market need. Slick new technology doesn’t solve a problem or cure a disease on its own. Dr. Levy’s nanoparticles were just a curiosity until he found out how to direct them and tie them to a drug delivery method. 

The preferred approach to a new business idea is “market pull”: prove that the technology fills a need, and then quantify that need to show investors how the market will pull the business into profitability. In the case of Vascular Magnetics, the revenue projections for the company suggest sales exceeding a billion dollars per year just four years after commercial launch. Investors will soon get the opportunity to determine whether Drs. Levy and Woodward’s projections meet with reality.

Don’t Be Wedded to the Original Idea – Be Flexible

Despite feeling great about their very early progress after being selected by the Proof-of-Concept program in Philadelphia, the two entrepreneurs soon learned their second major lesson. That is, don’t get stuck thinking that your only options lie with the original idea.

“After we started the program a lot of evolution went on,” said Dr. Levy. “Our original idea used our technology for a different space entirely, but we got feedback that said no one cares about that area. Our advisors suggested, why not go into the Peripheral Artery Disease space?”

Dr. Woodward added, “We were also experiencing some regulatory pathway issues with the original idea. Had we been wedded to Bob’s original concept, we’d be fighting a battle we don’t have to deal with today. Bob came in one day and said that there’s a better way. Its so important to be adaptable.”

Get As Much Good Advice As You Can – And Then Listen to It

All along, Drs. Levy and Woodward took the advice of their advisors seriously. The change in direction noted above was a direct result of feedback from those consultants.

Good advice — especially from world-class clinicians such as those Vascular Magnetics identified — can be expensive. In the formative stage many entrepreneurs wouldn’t even make the approach. But Dr. Levy knew that these kinds of recommendations would be worth going after.

“You need to have significant people giving you advice. They are working with us under the premise that we will get them some stock options further down the line,” Dr. Woodward said. “My guess is that they came on board because of their respect for Bob and the fact that they know his reputation for getting things done.” 

Check Your Ego at the Door

When I asked these two entrepreneurs about the kind of advice that other entrepreneurs might seek out, they commented that getting some additional experience into the budding business is really important, but that often, the original founder’s ego gets in the way.

Dr. Woodward cautioned, “You’ve got to check your ego at the door and work with others, perhaps even others of a different generation. Good seasoned business advice is critical. There are enormous numbers of mistakes you can fall into, and any one of them could trash your company.”

Both of these experienced biotech executives recommend that founders find a way to “pair up” with someone more seasoned, someone who complements their own strengths and field of expertise.

Avoid All Get-Rich-Quick Fantasies

The founders of Google or Facebook, barely into their 20’s when they struck gold, found incredible riches shortly after their businesses blossomed. I can tell you with great certainty that this isn’t the norm in the biomedical arena.

“It takes years to build a successful startup company, one that will transition through a number of stages before anything ever reaches the market and benefits a patient,” these entrepreneurs say. And as a recruiter who has worked with startup companies for many years, I can validate that comment.

So, what’s the best indicator of at least the possibility for success, and perhaps even later riches? I like this idea, from Dick Woodward, who suggests that anyone considering becoming an entrepreneur take his or her idea and put it through this simple filter first:

“You can put any business idea to task with two simple questions,” said Dr. Woodward. “Ask yourself – So what? And who cares?” 

David G. Jensen is Managing Director of Kincannon & Reed Executive Search (www.krsearch.com), a leading retained search firm in the biosciences. You can reach Dave at (928) 274-2266 or via [email protected].