Entrepreneurship in Synthetic Biology for early-career researchers: An introduction
Introduction
Synthetic biology is a young and exciting engineering discipline, the ability to rationally design and build novel biological systems represents an incredibly worthwhile intellectual pursuit on its own. On the other hand, engineering biology has a significant potential to bring commercially viable solutions to many problems, including the major global challenges such as environmental pollution, pandemics, and famine.
Academics and researchers are bringing the most impactful synthetic biology innovations that are stemming from the fundamental research. Numerous individuals, both students and early-career researchers that are working in the field of synthetic biology have entrepreneurial ambitions and are thinking about the best way to pursue them.
However, making the first steps on this journey can be intimidating. One of the major reasons is that there is a lack of resources that would allow researchers to make an informed decision about how to start their entrepreneurial journey. Furthermore, the availability of the entrepreneurship-related information has a significant geographic variation and there is usually a shorter supply at the European institutions than in the United States. In addition to that, there might be significant differences in the culture - in some academic environments, the research pursuit beyond intellectual curiosity can be frowned upon. Which has been changing the last few years.
In this article, we would like to inform you about the ways to embark on an entrepreneurial journey in Synthetic Biology as early-career researchers (ECRs).
We are also planning a series of talks and discussions with entrepreneurs, founders, investors, and leading academics in the area of synthetic biology, where we will delve into specifics of the topics that will be introduced in this article.
Why create a Synthetic Biology company? Is it a realistic career option?
Frequently, the main options shown as a career option to ECRs are academia or industry. However, the “industry” usually means a big life-science company. On the other hand, the ecosystem made it easier than ever to either create or join a startup in SynBio. Many ECRs may feel like creating a company is impossible and joining a small company is a lesser option compared to joining a big company or university.
However, by joining or launching a small company you may have an incredible opportunity to learn a lot in the process as you will have to work on a lot of different things, potentially a lot more than being dedicated to a small specific task in a big company, and this will give you additional skills such as time management and appropriate task distribution, which will be useful for your research career.
Here are a few reasons why launching your company may be better for you than academia:
1) The academic market is quite stuck, your chances to reach a stable or a group leader position are not that high.
2) You have to solve a practical problem with a tangible and visualisable impact for people (or customers).
3) You get to see science within a social and economic context rather than in a more isolated academic setting, which is sometimes purely theoretical and not directly transferable.
4) You get to choose the working culture and who you work with.
However, it is important to stay realistic with your expectations: there is a big chance that creating your business will fail and it is pretty hard to figure out what went wrong. Working in an early-stage startup as an employee is intense as well; however, you likely won’t be only doing research but you will get an experience that can be valued in industry as well as in academia. In the end, as academics we are quite used to failure and not really knowing what we are doing at first in academia is inherent to the uncertainty of developing technologies.
What kind of company?
There is no one universal model of companies, but some common characteristics exist between the different types of companies that exist.
The Spin-off (or spin-out): A first typical model coming from academia is the spin-out. Frequently, a technology developed in a lab (sometimes a company) shows some promising results and a company can be built around that invention or discovery. These kinds of startups frequently need some form of intellectual property (IP) protection or at least a proof of concept for a particular application showing that the technology works and on which the newly formed company can build a portfolio of IP.
The service-based companies: A company doesn’t have to be the next Genentech but you can also build another type of SMEs based on services you provide to customers, whether it is as a freelancer, consultant, scientific advisor; or even as a contract research organisation. Sometimes these types of companies can grow into something very big, although this is rare.
The bootstrapped companies: this kind of companies can be started from scratch from an idea or a problem identified all the way to market. These companies are generally sustained financially at the start by the founders, built on the side of their day jobs, or on savings, etc. These startups were very rare in biotech entrepreneurship as it frequently requires a very large amount of funding to start a business, however, this model is slowly becoming possible as the initial costs are decreasing. This model is particularly effective in the software companies as the software is becoming increasingly important in SynBio.
One of the big differentiators between these types of companies is the business model and the model of financing. These are the key factors as most SynBio startups need multiple years and need a lot of resources (lab, people, instruments, etc) to build a product ready for the market, so in general, the company requires raising a fairly large amount of money.
A frequently chosen mode of financing for spin-offs from academia are grants that help you take your new technology to the next stage, whether it is proof of concept, or a product ready for market. This mode of financing has the advantage to not require to give away equity (parts of your company) to another organisation or individual. However, this type of financing frequently requires to fit multiple specific criteria to be allowed to access it and it frequently takes long to apply for the grants and they are often very competitive.
Another frequent mode of financing for synbio companies is the private equity model. An organisation can invest in your company against a part in your company (equity). A venture capital (VC) fund, an angel investor, or a structure (i.e., an accelerator) may invest and give you material and consulting support. It is important to keep in mind that private equity, in particular the VC model, requires that you develop a startup capable of growing rapidly to allow a return on investment (within 5 to 15 years depending on the fund). The VC model is based on a couple of companies out of all their investments becoming a hit, which allows them to sell their equity (“exit”) for ideally 10 times or more the initial investment. The startup would need to grow fast enough that it reaches a value that can return enough money to cover all the other unsuccessful investments of the VC fund on exit. There are various forms of an exit: a startup can be acquired by a bigger company, or the startup can enter the public market (Initial Public Offering or IPO). Going this path can help the company grow fast as the investment allows access to a lot of resources, including not only the capital, but also the large network and experience of a VC fund.
Another financing model, closer to what is done in traditional or some software companies, is self-financing. This means you cover the cost by your own means, personal savings, borrowing from family, or debt (here being wealthy can help :-) ). While self-financing is rarely sustainable if you are looking to develop a product that requires a lot of resources, it can help bridge a gap to reach a point where you can raise funds from grants or private funds. This kind of financing is more adapted to a service-based company, for example, if you decide to work as a consultant or a freelance. Otherwise, it can also be used for software companies, if you can develop a software product that can rapidly go on the market.
In many cases, financing is not realized through a single mode but rather by a combination of different financing sources depending on the company, the business model, and the growth. It is frequently necessary to combine different forms of financing. For example, a company can start with a small private investment, which covers the living expenses of the founders. The company can then apply for a grant to build a proof of concept. With that proof of concept, the company can raise pre-seed money to further the product development and secure the first paying customers. Subsequently, the company can raise money from VC funds to accelerate the growth and, ideally, even reach profitability. Finally, the company can get acquired or go on public markets, which may generate a significant
Limits between these different types of companies and financing are blurry as one can pivot or transform from one into another, but the founders should know what is expected from them and their enterprises in the different business models.
How to get involved?
You may not be willing to start your own company now or even later, but entrepreneurship skills are highly valuable in the workplace, whether it is in academia or in companies. The entrepreneurship skills are highly sought in commercial settings so much so that the “intrapreneurship” has been adopted in many large companies to encourage their employees to take initiatives, be independent, take risks (in a balanced way), and be innovative. Many of these skills are already developed in academia but fostering these within a commercial or industrial context can be extremely valuable.
Many different paths are possible to get involved in entrepreneurship initiatives in synbio, which can be translated in many ways in your career. You could be an early employee in a young startup, you could join a co-founder looking for someone with specific skills, you could be a scientific advisor to a company, or do some consultancy.
Where to start?
Get a feel of entrepreneurship: Ask yourself whether entrepreneurship is for you. Answer is likely yes, as it is not only about launching a business but rather about a way of thinking and approaching practical problems. Try to look through the self doubt and imposter syndromes, by reflecting on these founders’ statements previously shared with us: “most people don’t know what they are doing”, “the innovation environment is too complex to have a real grasp of everything”. However, learning to navigate uncertainty is key. Get some advice, learn to build processes and frameworks to avoid mistakes and make sure that you learn from those mistakes to not repeat them.
However, for the ones willing to start a business, but not knowing where to start, here is a few practical points where you could start:
Build a team: Creating a company is a complex task that requires multiple skills, so it is important to gather a team around your project. Ideally, you would be able to have co-founder(s) and some form of advisory board with people who possess significant experience in science and/or business. The team is probably your most valuable asset, if you manage to build a unique team with complementary skills and motivated people that can work well together, you are significantly increasing your chances of success.
Identify a problem and a solution (product-market fit): The first and probably most important part is to identify a real need or a major problem that significantly bothers a sufficient number of people. You could have great technology but if not enough people need/want the product and are willing to pay for it, the business will not be sustainable. The aim is to rapidly find an important problem (market) and build the solution (product). Once again, it is not a one-size-fits-all: you may already have a tech that you want to bring to the market (technology push), or you don’t have a well-defined technology yet but want to identify a problem and market to address with synbio technologies (market pull). Be careful when you already have a solution in mind; it can be really nice and clever but if you cannot find a market for it, you are very likely to fail.
Markets and customers identification: Being able to identify an efficient and profitable fit between your product and the market need is probably one of the most complex parts in an early-stage business. Building a cool product can be fun, but if no one is interested in buying it or if you are not solving a problem faced by potential customers, you cannot build a sustainable business. A common pitfall of synthetic biology startups is their effort to push new technology to the market, rather than searching for the solutions that the customers really need and for which there is a real demand. One way to avoid this pitfall is to build a product after identifying what are the pains faced by a group of potential customers.
Build and test of a minimal viable product (MVP) or a proof of concept (POC): Once you have a concrete idea of the problems faced by potential customers you can build a proof of concept (POC) in the lab based on your solution or a minimal viable product (MVP). The POC can help to show that your solution could work for the problem you are targeting. This can help to convince your university or an external investor to provide you with the first round of funding to help you push the solution and test it with customers; for example, by doing a case study with your solution on a particular customer problem. The MVP will help you to have a first product to give to your customer to test, which will help you get feedback to know if your solution is working and what to improve on your product.
Get some support: Finally, in your business creation journey, you will need support from specialised structures, from peers, and from advisors. In many universities, programs exist to help you start your business, e. g. through an intellectual property transfer office or via a university incubator. Also, many incubators, accelerators, and venture programs now exist for life-science and synthetic biology startups. Out of many, Petri.Bio specializes in SynBio startups. Venture funds like Entrepreneur First have a program in collaboration with SOSV’s IndieBio to help life-science startups. There may be alumni from your university or people in your network that have created a company before and may help you. Also, EUSynBioS Entrepreneurship Team will be happy to help you in any ways we can, either by connecting you to the right people, sharing relevant resources, or just discussing and talking about your future ventures.
Conclusions
We need scientists to create ambitious companies based on proven science to help solve - or at least make a dent to - the major problems we are facing as a society. Humanity has plenty of food delivery apps, but we need new ways to produce this food sustainably and for the populations that cannot simply access food at the tip of their finger. This article really aims to encourage the principles of entrepreneurship in SynBio at large, not only to start a single specific business. Furthermore, we hope that this will encourage a few of you to consider starting a business in SynBio space as a viable career option that can be impactful and fulfilling.
In this article we tried to cover some of the concepts in entrepreneurship, but it is by no means exhaustive. If you are interested in entrepreneurship and synthetic biology startups we can only encourage you to attend our Entrepreneurship Seminar series.
Disclaimers:
This advice and perspectives were written by two ECRs involved for a few years in entrepreneurship so we have a very early stage perspective and opinions on starting a business in SynBio. If you want to learn more about what to expect in the future, talk to people with skin in the game, mainly founders and early-stage employees that are further down the line. Personal perspective: advice from people that never started a business can be useful but rarely as good as the advice from someone who has done it. That’s why we created the series of Entrepreneurship Symposium so you can hear the perspectives and advice from people that actually created and are running businesses in SynBio.
Some resources to get you started or find relevant articles on entrepreneurship in SynBio: