Startup Science: How to launch a successful biotech startup

The biotech startup failure rate is often quoted as 90%. Therefore most investors avoid early stage biotech startups like the plague. However research and development costs money that biotech entrepreneurs often don’t have. So what can you, as a new biotech CEO, do to maximize your chances of creating a successful startup and attracting much needed funding? Here are the most common suggestions from many sources around the web. 

  1. Make sure your product addresses a true market need. To be able to do this, you have to do enough market research to truly understand your target market and the competitors already working in this space.
  2. Assemble the right team. One person can’t do everything. You need to add people with complementary skill sets to your startup team. These people must have the right knowledge and skills but also the right attitude and they must truly understand your vision for your company. This is hard to do when you don’t have enough capital to offer attractive salaries. You can dangle the carrot of equity, but be careful how much equity you offer to whom.
  3. Be ready to adapt your product to the market if necessary. Listen to advisors and especially to potential customers and use their advice to shape your final product.
  4. Differentiate yourself. Make sure that potential customers understand how your product is different (and better) than your competitors.
  5. Make sure you have reproducible data early on. Much of the biotech failure rate is due to the fact that 70-90% of scientific data cannot be reproduced.
  6. Have a strong plan for dealing with the FDA and drug regulation. This is a complex field. You may need to hire advisors to help make sure that you have designed your clinical trials properly and you have all the appropriate paperwork in place.
  7. Think strategically about your intellectual property. Patents are expensive but they are the best way to protect your IP and without IP you cannot build a biotech business. Again you may need to hire lawyers to advise you on how you can best protect yourself.
  8. Choose the right investors. There are big differences in the amount of money you will receive and the control you will need to surrender to different types of investors. While any money looks great to struggling biotech boot strappers, be very careful about whom you partner with. Draw up a term sheet as soon as possible with potential investors so that you can understand exactly what the deal means to you and your company.
  9. Branding is more than a logo and marketing is an integral part of a successful company. Even if you have a hot new drug or medical device that truly serves a market need and you have a target market of millions or billions, you still have to tell these people about your product. That takes time and money.
  10. Don’t be afraid to make mistakes. Just make sure you learn from them. It is almost impossible to start a company without making mistakes and they are the best way to learn.
  11. Join SciStart, the new networking and idea development platform that helps entrepreneurs find people with the money and expertise to turn their ideas and technologies into successful startups. It is free to join and open to everyone in Life Sciences. 
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