Business Encounters: Life Scientist

Social Responsibility in 2019 and Beyond

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Corporate Social Responsibility (CSR) was all the rage post-Enron. Then we had more disasters, including the BP oil spill, banks selling toxic mortgages, sexual predator behavior by company leaders, ill-treatment of an airline customer, and defrauding bank customers by creating fake accounts. What happened?

CSR was a tag-along. As It’s a Jungle in There implies, if you add the following elements to your business:

  • “be responsible” and,
  •  “give something back,”

you are good to go. The reality was these words are and were hollow add-ons. So, for example, some movie producers gave us wonderful movies and were abusive at the same time. A company was “Beyond Petroleum”, but actually did nothing to move us away from a carbon-spewing economy.

What’s The Problem?

The problem is that being “responsible” wasn’t built into the core company. Even Google’s “don’t be evil” is a little vague. It leaves a lot of wiggle room for “get away with whatever you can as long as no one gets hurt.” Apple’s hiding of profits offshore (and Google’s) is an excellent example of “legal” behavior. Unfortunately, that action is not supporting the country that launched Silicon Valley startups, trained staff in top universities, built communication and travel infrastructure, created the dynamic economy required to develop wondrous innovations, and (lest we forget) invented GPS and the Internet.

Honestly, in a world of “profit” vs. “responsible”, which one is going to win? What will the board of directors demand? How about the investors? Or the stock owners? Or the mutual fund? Is a mutual fund guided by pension plans that are seriously underwater due to overoptimistic (or deceptive) promises of future revenue from investments going to risk a low ROI? They certainly aren’t going to trade ROI for some fuzzy “good for the world/earth/society/individual” mission. If being “responsible” isn’t baked into the core organization then like a bumper sticker that has gotten old and out of date, it will be removed. And “stakeholders” will demand that “responsible” behavior stays on the periphery of the company’s agenda.

Additionally, there is the familiar “everyone else is doing it” argument. If you don’t put profit first (and second and third), then you’ll be out of business in a heartbeat. The mantra says, “Better to live on for another day then to drown in a sea of red ink.” That argument, although quite useful, has never been compelling and lacks ethical rigor.

Think About Your Approach

The winning strategy has been to come up with slogans like “Beyond Petroleum,” greenwash your company, follow the leaders in the industry, and give some money to charity. Prove that yours is a “good” organization and it will be showered with profit.

When corporations and other organizations weren’t looking, the customer suddenly took charge. Sure some industries have successfully treated their customers poorly (e.g., airlines), but the positive feelings toward the monopoly that is Amazon are instructive. At Amazon, the “customer experience” is king. Somehow it is hellbent on providing more products, faster, with unbiased reviews, at lower prices, and with greater convenience. Where is the profit in that? How did that happen? Because Amazon actually responds to customer demand and customers are pretty demanding. Customers want all the aspects of the Amazon experience that Amazon delivers.

Even the punching bag that is the airline industry recently learned that it couldn’t drag a person off of a plane without generating a firestorm of rage from consumers. You won’t see an airline treating a customer like United did again (as long as folks have smartphones in their pocket). “Beyond Petroleum” is gone as a slogan. Wells Fargo paid for is misdeed; again that strategy isn’t likely to be followed by anyone else. Uber’s leader and movie industry leaders have been toppled.

The alternative argument for the rise of consumer power would be to search for examples where organizations have been “irresponsible,” continued that behavior, and still remain profitable and successful. Starbucks settled with the EU. Pharma companies that tried to gouge customers backed off. Companies may stay profitable, but almost always they change their ways. What about Apple, Facebook, Google, and Amazon? When are they going to acknowledge the country that supported the means to acquire such enormous wealth? In the end, they too will need to explain why profit is more important than being responsible. Keep in mind that they are the most powerful companies (and valuable). When they change course, there won’t be many enterprises left that can act like being responsible is a mostly meaningless add-on to fool everyone and justify maintaining the status quo.

Perhaps customers don’t really care about clean water – tell that to folks in Michigan. Do they prefer money or healthy food? We see low-carb diets increasing and people demanding GMOs. Sales of fast food are down even though it is cheaper than “fast-fresh” restaurants. It’s hard to find high fructose corn syrup, and soda profits are decreasing. Customers are demanding more and slowly getting what they want.

Looking Forward

The good news for corporate leaders and future organizational leaders is that customers want you to bake responsibility into your organization and will reward you for it. They have seen the perils of a “profit-first” approach, potentially first hand when they lost their house in 2009 or when yet another company told them “too bad for you, what are you going to do about it?” You can even see the change in autocratic regimes like China where folks are finally fed up with pollution. They may not have the power to attack the political system, but they can demand cleaner air.

So, greenwashing your company won’t work. Nor will adding flowery words to the mission statement. If you want to please customers, you need to provide clear benefit and not sacrifice it when it becomes inconvenient. In a few years, it’ll be the only way to survive in this competitive business environment.

If you are building a new enterprise, take a chance and tell everyone that your goal is only to be profitable and provide high ROI to investors. Or take the safe route and demand that your organization considers its interaction with the environment, society, and individuals in everything it does.

References:

Photo Credit: Deepwater Horizon offshore drilling unit on fire 2010.jpg. 20 April 2010. US Coast Guard – 100421-G-XXXXL- Deepwater Horizon fire. 

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.

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Newsprint Ads Related to Health (Part 3 of 5)

Newspapers hold advertising potential for certain healthcare segments. Here are some examples of newsprint ads that have focused on health in the past few years.

The NY State Nurses Association ad highlights the health support features of Medicaid to a target market of the elderly. The apparent value proposition is that if changes to Medicaid are resisted these benefits will remain; if not they will go away. It engages the user via a small healthy child and teddy bear and text-based pleas to support the needs of children, the elderly, and the disabled. The ad’s call to action is probably related to voting or contacting a politician since both are done frequently by the elderly or to check out a website and is expected to yield the benefit of no change to health services for the respondent. The ad appears to target the elderly because almost all Medicaid funds primarily help the elderly with home care and nursing home costs. The objective was neither measurable nor attainable. Highlighting the value of children, the poor, and the disabled adds emotional appeal but these are not large voting blocks. This ignores the more clear value of Medicaid to the elderly: Medicaid supports them when they become ill or infirm.

Generation Solutions’ newspaper ad highlights the ability of the home health care service to help the elderly with improving “gait speed” to a target market of professional caregivers and primary care providers. The apparent value proposition is that the services will confer a lower risk of mortality to the patients of the market by addressing gait limitations. It engages the user via a frail looking elderly woman (whose life will not end prematurely) and non-emotional data/results related to a study. The ad’s call to action is to contact the agency and is expected to yield the benefit to the respondent that a patient’s gait speed is improved. The objective was measurable in terms of increased calls although not especially attainable unless this ad was in a newspaper only seen by health care providers (which is possible). It would be more effective as an ad targeting family caregivers which had less data and said “talk to your loved one’s physician about gait – it could help her recover and avoid a repeat fall.”

The Carolina Select Home Care newspaper ad highlights the quality of their agency to a target market of the elderly with physical conditions, as well as certified nurse assistants. The apparent value proposition is that the elderly will receive high-quality care and that nurse’s assistants will work in a better facility. It engages the user via a picture of a healthy and smiling older person with the assumption that their service achieves such an outcome. The ad’s call to action is to call a phone number and is expected to yield the benefit of learning about an environment that is good for the elderly person or a nice place to work. The objective was measurable by following call rates after placement of the ad and quite attainable. The one limitation is the ad has two targets. It seems more logical to run two different ads with a more clear focus and see which one is more effective.

Renew Home Healthcare’s newspaper ad highlights the comfort and zero cost of their agency to a target market of the elderly with a physical condition. The apparent value proposition is the elderly person will receive more comfort and achieve higher independence if they use Renew Home Healthcare’s services. It engages the user via a picture of a tidy home and friendly young home health care worker, further supporting an emotion of calm and ease. The ad’s call to action is to call a phone number and is expected to yield the benefit of learning about an environment that will promote their healthy return to independence.The objective was measurable by following call rates after placement of the ad and quite attainable. The ad has a simple message and focuses on the fact that making a choice will not incur costs.

The Overactive Bladder research study newspaper ad highlights the problems of an overactive bladder and implies that by participating in the study the elderly person enrolled will potentially gain access to a medication that might help. The apparent value proposition is potential relief from the effects of an overactive bladder (incontinence). It engages the user via a woman who looks troubled and a smiling man. The ad’s call to action is to call a phone number and is expected to yield no cost for treatment and possible compensation. The objective was easily measurable by phone call records and probably attainable. Since there is a chance the person gets a placebo, it would be helpful to highlight how participation could help others by learning something new. Also, some compensation would likely be received by all participants. If so, that benefit should be more clearly advertised.

Picture Credit: Flickr user Jon S

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

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:

Using Crowdfunding to Build Business and Entrepreneurship Skills

Not every life scientist wants to start a device or pharmaceutical manufacturing company and sell to a major device or drug manufacturer. Perhaps you are interested in a computer/mobile phone application for health purposes. If so, there may be the opportunity to pursue your entrepreneurial interest in parallel with your research. That is, perhaps you don’t have to give up your research career while you are investing the viability of your entrepreneurship interests.

In fact, even for a life scientist interested in marketing a device or pharmaceutical, it may be advantageous to conceive of a technical application to test the waters and develop business and entrepreneurship skills without the complexity of equity arrangements and complex financials. Imagine it as a simple Y-Combinator type training to hone your entrepreneurship credentials.

For any potential enterprise, you need to first:

  1. Get your thoughts organized regarding product, customer, customer need, and value added
  2. Gather feedback to refine the idea
  3. Assess the financial viability regarding costs and competition
  4. Develop a plan to market the idea
  5. Test the market to see if it is viable

A reward crowdfunding site matches up with these steps:

  1. For a life scientist with entrepreneurship interest, a crowdfunding campaign focused on providing a reward versus giving equity is an excellent way to take on Step 1.
  2. Once complete, you can easily proceed to Step 2 and present the enterprise concept to others. Your thoughts can be easily inspected and commented on by others to make further improvements and gather support.
  3. The process will force you to investigate how much money you need and what you would charge. That’s not a complete financial analysis, but it is a useful part of Step 3.
  4. Crowdfunding emphasizes Internet marketing, and for today’s products, social media focused marketing is your most effective strategy to accomplish Step 4.
  5. Finally, the site can perform Step 5 where you obtain qualitative and quantitative input as to the value of the potential enterprise.

Photo Credits: Wikipedia user Bizking2u and Wikipedia image Crowdfundingescense.jpg ‎under the Creative Commons Attribution-Share Alike 4.0 International license. 

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