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Role Dilemmas and Recognizing Skills

Apr 26, 2019 | Brad Tanner

The best way to found a company is to start with a group of people who work in a shared-decision model. Early emphasis on control and power is likely to choose the wrong leader and to disempower the other members of the team, such that this becomes a weak company lacking in sufficient resources to grow.

From the outset, the founders must decide how to transition from a collaborative-decision company to a more hierarchical company. The collaborative decision model will eventually fall apart because of various power struggles if it is delayed for too long. Plus, it is unlikely that outside funding is going to be interested in a non-hierarchical organization. The reality is that there are not a lot of examples of successful companies that work in a collaborative-decision model. A while ago RIM (Blackberry) was the poster child of this kind of collaborative team; we all know how that ended up.

Set up a transition date and ensure there is a mechanism in place to transition from collaborative-decision to hierarchical structure. Make sure the initial collaborative team is in agreement that someone will be in charge of the CEO position. Other founders will have domains in which they can exercise control. However, their control will not be in the role of the decision-maker for the startup.

There is a good reason why business folks emphasize sports teams. What better example is there of a team of individuals with different skills who work in a hierarchical structure to accomplish a goal?

Who should take on the various roles of this corporation? Don’t assume that the “idea person” should be the CEO. The CEO must be a leader. The CEO must speak for and present the company to others. When the pitch is made, it won’t be the CTO standing in front of the venture capitalists.

Similarly, match the other roles to the skills of the person.

  • CTO – Does the person have the technical expertise to advance your technology?
  • COO – Should be an organized person who gets things done on time and on budget. How are they with details?
  • CFO – If no founder is very good with money then perhaps you need to look outside for a CFO.
  • CMO – Filling the CMO is tricky. You need to have a marketing plan and then find the person who can implement that plan. So perhaps you need a marketing advisor to help develop the plan. And that advisor is not necessarily going to be hired to lead the marketing effort. In the digital era, marketing is changing rapidly, don’t get too focused on past success. Look for vision and passion in marketing products.
  • Sales Lead – Find someone who loves to sell things. The first thing they should be able to sell is themselves. Let them sell you that they are the perfect person for the job. If their personal sales job is weak, keep looking.
  • CIO – Crucial role in the age of cybersecurity and privacy. Solid system admin skills and awareness of the need for tight security and adherence to standards are essential. Here, a little paranoia isn’t such a bad thing.
  • HR – If you have a Chief Human Resources Officer or just the head of HR, this is a critical position and tricky to fill. You need experience, but you need someone who understands today’s young workers. They enjoy the experience, they want to feel wanted, they want to be appreciated. Your company (and thus the person) must reflect a corporate culture that entices them to join you and convinces them they made the right decision.

Once you have a team in place, be flexible. Perhaps your technological needs change, and your CTO no longer has the experience to handle the new requirements. Can you actually wait for that person take a course or slog through endless tutorials on Google? Some things can be taught, but most cannot be learned quickly. Make the change now before you embark on development that takes you the wrong direction. Who is going to do that? The CEO. That is why you chose a hierarchical model.

Further Reading

  1. Wasserman Noam. The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. Princeton University Press. March 25, 2012, ch 5.
  2. Herrenkohl Eric. How to Hire A-Players: Finding the Top People for Your Team- Even If You Don’t Have a Recruiting Department. Vol 1 edition. Hoboken, N.J: Wiley. April 12, 2010, ch 6.

Photo Credits: Wikipedia user Vectortoons under Creative Commons Attribution-Share Alike 4.0 International license and Airman 1st Class Curt Beach 160414-F-IP109-036.JPG US Military.

Category: Business Tagged: structure

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About Health Impact Studio

We are a dedicated team of developers and researchers with the mission to improve the health of individuals through novel technology including games, virtual reality, and role-playing simulations. We welcome input from the full range of stakeholders to create a customer experience with the broadest applicability to improving health outcomes.

Keep Reading

Clinical Tools Wins $200K SBIR Award to Explore Life Science Entrepreneurship

May 1, 2019

FOR IMMEDIATE RELEASE: 5/01/2019

[Chapel Hill, NC – May 1, 2019] – Clinical Tools, Inc. won a $200K Phase I SBIR grant from the National Institutes of Health/National Institute of General Medical Sciences to begin development of the OpenPipe Simulation Experience to Enhance Entrepreneurial Intent and Self-Efficacy. OpenPipe will be a 3D computer role-playing simulation to help post-doc and early-stage life science researchers explore factors that impact entrepreneurial intent and self-efficacy.

The life scientist is key to unlocking the commercial and health impact value of life science research. Unfortunately, scientists have few resources to assess the emotional and logistical ramifications of the challenging change from scientific explorer to entrepreneur. The proposed simulation and decision support experience helps the life scientist explore entrepreneurship, assess entrepreneurial intent, build confidence, and enhance team-building skills. Through subsequent action, they potentially unlock scientific findings that can impact real-world health outcomes.

The simulation will include a game-style interface where life scientists can make decisions on how to best address challenges related to entrepreneurship and experience the outcomes, as well as build knowledge and learn techniques to move from life science to business success!

About Clinical Tools and Health Impact Studio:

Clinical Tools, Inc. (CTI) is a diverse group with expertise in medicine, psychology, public health, basic sciences, programming, project and program management, gaming, information technology, and communications. Based in Chapel Hill, the company has a 20+ year history of success with SBIRT-developed products.

Health Impact Studio, a division of Clinical Tools, utilizes gaming technology to create healthy lifestyle change. The company combines expertise from medicine, psychology, public health with gaming, to create innovative games to positively impact health. Health Impact Studio creates games for healthcare professionals, medical students, and the general public on topics like obesity, addiction, and nutrition.

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For Further Information

Company: Clinical Tools and Health Impact Studio

Email: games@healthimpact.studio

Website: BioStartUpAdvice.com

Founder, President, and Vision Leader: Bradley Tanner, MD, ME

Funding Your Life Science Startup with SBIR Phase I Funds from the NIH

Mar 8, 2019

During psychiatry residency a friend said, “You should consider pursuing SBIR funding.” You may be wondering what SBIR is. This blog hopes to succinctly answer that question and, more importantly, to explain why Small Business Innovation Research (SBIR) is an excellent way for someone interested in the life sciences to fund an entrepreneurial interest. Once a life scientist establishes a small for-profit business, SBIR funds can support the creation of a technological solution to an unmet need in the life sciences.

What is SBIR?
SBIR is a component of all the primary funding initiatives of the US federal government. The SBIR funding solution is not the same as a loan from the Small Business Administration. You do not owe the government anything for its granting of money to you. There is no obligation to pay it back. Still, keep in mind that this is a government-run grant program. You must spend the funds wisely and carefully, follow government standards, and in some cases complete an audit following government standards.

NIH and other branches of government are obligated to dedicate a percentage of their R&D funds to SBIR efforts. SBIR funds are only available to a commercial enterprise, in other words, a for-profit company. This funding mechanism is not designed to complete basic science research or produce a product with no apparent applicability. Funds must yield a viable commercial product sold in the marketplace.

SBIR at NIH
This blog focuses exclusively on the NIH’s SBIR program and specifically Phase I of SBIR funding, which is the most rudimentary and simplest way to achieve funding. There are similar mechanisms such as STTR, as well as more complicated means of obtaining additional SBIR/STTR funds. However, those are less likely to be the optimal choice and are not the focus of this post.

The NIH SBIR program is particularly well-suited to the life scientist-entrepreneur. NIH provides investigator-driven research through its more academic grants, as well as SBIR. That means that the NIH program is unique in that it will consider your idea versus telling investigators what ideas they will fund. SBIR programs in other branches of the government will often specify a need and goal of the research. Your project must fit within that specified need. To sum, the NIH SBIR program can be an excellent solution for an entrepreneur interested in creating a product that will add value in the life sciences. But you must assess if the limitations and conditions are acceptable to your goals.

SBIR Limitations and Focus
Phase I focuses only on demonstrating feasibility. You are not expected to complete the entire product, nor fully assess it in all logical ways. Your goal is to use Phase I to demonstrate that the idea is sound, the team is capable, and with further funding it is likely that you will produce something of value. Some ideas cannot be easily demonstrated in a short time frame and with a limited budget. To fit within SBIR Phase I, you must then roll back your plan and goal to a feasible project. Reviewers will reject a project that over promises as quickly as one that under delivers.

Budget and timeframe for an SBIR Phase I are constrained. SBIR recommends completion of Phase I in six months. With justification, you can request a one-year period for funding. A Phase I SBIR budget is typically limited to $150,000, including any overhead or indirect costs, as well as a fee that the government allows, which is maximum of 7% of the other expenses. This budget request can be raised to $225,000 if the author can justify the higher amount due to the complexity of the project. If your needs fit within time and dollar SBIR limitations, it can be an excellent source of capital to start your company while retaining full ownership of the enterprise and limiting debt.

More funds are available to support your project. If you obtain Phase I funds and complete the project successfully, you can apply for Phase II, which is two years in length and up to $1 million in funding. Phase II has a greater chance of success if you have had a productive Phase I that demonstrated the feasibility of the project to create a valuable product.

Preparing a Phase I SBIR Application to the NIH
Obtaining SBIR funding is complicated and challenging. As with any funding request, you must have a novel idea with potential and definite value. Alongside that idea, you need a team and an organization with the skills to convert that idea into a product that provides health-related value to a potential customer. You must carefully outline the strategy to create the product and describe the underlying theoretical basis that will guide the development.

It’s helpful to consider an SBIR application as a standard pitch to a business audience, except you are pitching using paper to an academic audience that demands that the process and assertions are backed up with quality references.

The decision-makers regarding funding are not business investors looking for a return on investment over time. In fact, those decision-makers are a collection of individuals ranging from university-based academics to practicing clinicians to small business personnel who likely have submitted SBIR applications and/or received awards in the past. Due to the likely academic orientation of reviewers, the emphasis will be more on the scientific basis of concept and rigor of the theoretical underpinnings. It is not just a question of “Is this idea good?”, but “Is this idea based on sound theory?”

All SBIR efforts include research and development to determine the effectiveness of the product. Rigor also applies to the assessment strategy and process as well. The application must provide detail regarding how value will be measured by various metrics and using established methods. For an individual with experience in research, this is relatively straightforward. For an SBIR applicant with no science or research background, the academic component will require guidance from someone with assessment research expertise.

As mentioned earlier, a Phase I application only focuses on demonstrating the feasibility of the concept. In Phase I, you are expected to show that it is feasible to produce the product and that it potentially has value. The typical commercial emphasis on commercial viability is not an essential component of this phase of the application although the potential business value should be relatively clear. In other words, there’s no need for complicated calculations of cash flow, anticipated pricing, or ongoing production costs. The author of an SBIR application focuses more on the customer need, the basis for that need, as well as a discussion of why the intended product will successfully address that need.

NIH provides complete information online, through conferences, and by other means to assist the individual interested in preparing an SBIR application. Contacts in the government can answer questions about the NIH SBIR program in general or the SBIR program for a particular Institute of the NIH can answer questions as well. A local Small Business Technology Center likely has the expertise to assist with a pre-review of the application as well as general guidance. The NIH will not help you write your application or tell you if it’s good or not. That feedback will come from the review committee after you apply.

Applications are submitted approximately every four months on the following deadlines: January 5, April 5, and September 5. Feedback from the review committee comes roughly three months after you submit and will include the overall committee’s consensus about the application as well as individual observations from three reviewers. These comments are an excellent guide to the problems which may have interfered with obtaining a score worthy of funding by the government. You can respond to the comments and resubmit the application at the next available deadline.

Is SBIR For You?
If you are new to SBIR, consider the first few applications to be attempts to understand the process and opportunities to learn how to sculpt a quality application that fits the structure and limitations of the SBIR program and reviewers’ expectations. That is, achieving success the first few submissions is unlikely. As with most other pursuits, success requires diligence as well as perseverance. If you intend to submit one application for SBIR funding and not to resubmit, then in all likelihood you are wasting your time.

Hopefully this blog overview helped get you started in your investigation of the potential of the SBIR program to fund your life science company. Good luck!

Photo Credits: MaxPixel and: US Dept of Homeland Security

Angel Funding: Evaluating Your Life Science Venture (Part 2 of 7)

Apr 13, 2018

From the last blog, you figured out how to get the attention of angels (or a group of angels) for your life science venture. The next goal is to receive a favorable evaluation.

An angel group noted that 86% don’t get the chance to make a pitch1. Venture capital funding is probably worse. You have your work cut out if you want your life science venture to get funded. Keep in mind that there are many funding sources, so the numbers aren’t as bleak as that figure would imply.

So how do you increase your chances of funding from a specific angel?

At the early stage, angels are looking for evidence of:

  1. a value proposition for a life science problem
  2. validity regarding potential clinical impact
  3. use of appropriate technology in the implementation

Those criteria are probably not a surprise to you.

Is this a hot topic?

Since the focus is the life sciences, consider how hot your topic is. Medicine is not neutral in its attention to a disease. And what is “hot” is not based on scientific fact (e.g., years of life lost, incidence, lifelong prevalence, cost to treat, etc.). If “impact” determined funding then almost all funding would go to prevention and basic science breakthroughs. In comparison, the National Cancer Institute receives more than any other institute at the National Institute of Health, over $2B. Cancer wins the prize probably because it is scary. If you want to get funded, the topic must be one that an Angel sees as critical. Thankfully, Bill Gates has shown light on health issues of developing countries, and hopefully such neglected topics will soon be seen as worthy of investment.

So what is hot right now? Orphan diseases? Biologics? Topics related to the opioid or obesity epidemic? Zika virus? Make sure your topic is hot and that you highlight this. And, of course, hot topics come and go. Yesterday’s “bioterrorism” issue is cold until it becomes hot again, when (god forbid) evidence of the use of a biological weapon is demonstrated.

Next consideration is the team.

Since we are talking life science, the team has to be more than a competent bunch of folks who can launch a business. You need to have a team that also has mastery over the topic and the competition that is also addressing that problem. If FDA approval is required, you need folks skilled in that labyrinthine process in addition to lawyers. But don’t go too crazy with details, since it is possible that your venture will be purchased early in the process. It is unlikely that an Angel has no life science expertise.

It’s about health – and honesty.

Outline the upside in both the financial return on investment AND the impact on health. The Angel wants you to achieve positive health outcomes. Finally, the problems of Theranos are fresh on everyone’s mind. Be scrupulous in your development and presentation of the product. Any hint of deception and your venture will be in the 86% that go nowhere.

Where will more money come from?

Finally, an Angel understands how complicated a life science venture can be and you will most likely need additional funding. The Angel needs to know that you intend to eventually access additional funding2.

Hopefully, with the above, your new venture is on its way to a successful evaluation.

Citations:

1. Clark Paul, Banks Charlie, Dunbar Matt, Lackey Mac. Perfecting Your Pitch: VentureSouth’s 101 Tips for Pitching to Angel Investors. April 23, 2017

2. Styhre Alexander. Valuing and Investing in Life Science Companies. In: Financing Life Science Innovation. Vol Palgrave Macmillan UK; 2015:107-136.doi:10.1057/9781137392480_5.

For Further Reading:

  • Soenksen Luis R, Yazdi Youseph. Stage-gate process for life sciences and medical innovation investment. Technovation. doi:10.1016/j.technovation.2017.03.003
  • Evaluating Life Science Companies for Investment, 9/6/2016
Previous Post: « Team Building and the Benefits/Risks of Homogeneous Teams
Next Post: Clinical Tools Wins $200K SBIR Award to Explore Life Science Entrepreneurship »
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