Entrepreneurship 101: How to dream big—with your feet on the ground
Hertz Foundation Fellow Dr. Christopher Loose sold his first startup for $80 million. His advice is probably the kind you want to hear.
Chris Loose: As an entrepreneur, focus is critical, especially with a platform technology.
One often knows that you can go after many different product applications, but you ultimately get valued most importantly on the first application you bring forward, and as an entrepreneur you have limited time and limited resources, so you need to choose well and drive deep into clinical and regulatory validation for that first product.
Now, in order to make that often really painful decision about what to invest in and what to leave on the side—at least for a while—there are many aspects of a certain product you need to think through. Obviously market size plays a role. Technical fit to need plays a role.
As I’m looking at new ideas, I often try to follow some of the advice I once got from Bob Langer, who has been very prolific—he has started roughly 50 companies out of his lab, I think, at this point, and I have had the honor of starting two companies with him. Among the other kind of rules of the road he shares, is first: look for a platform company. If you're going to build a company make sure that if you’re successful in one area it can create value in a number of adjacent areas, because that really justifies bringing in the investment, building the whole infrastructure not just for one product but potentially for many.
But within that it's crucially important, and perhaps most important, to select an opportunity that has a very clearly defined first product opportunity that you have the ability to drive to a major value creation event, like a regulatory or a clinical approval.
As you’re building a business you ultimately get valued on that lead asset you’re carrying forward, so it’s important to have a platform but not to lose focus within that platform and make one crucial bet that ultimately can drive the early success of your company.
What really gets me excited is developing new therapies that can help patients. In order to do that you need to think through: who exactly is the patient you’re trying to help? What disease do they have, and what kind of clinical trial could you design that really proves that you’re giving a benefit to that class of patient?
When you do that you have to think through: What type of therapy is practical? How is it given? How frequently and by whom? And understanding that whole pathway from basic discovery to delivering an actual therapeutic requires a great variety of different skills you must bring together.
And early in our startups what we’ve done is first focused on some of the fundamental biology, but then defined: who are the experts along the way that we’re going to need to engage in order to advance all the way through the development, regulatory, and clinical process? And I can’t encourage young innovators enough to think about engaging project development experts and clinical experts early in the discovery process, because that really shapes what you’re trying to discover, and what you’re trying to create that can ultimately help the patient.
As I interact with a lot of young entrepreneurs who are thinking of starting companies, the most important piece of advice I like to give them, particularly on the technical side, is: find someone who has totally different skills from you, that you can trust and will challenge you. It can help you think through the many aspects it takes to build a business or create a new therapy.
For me this was when Bob Langer introduced me to David Lucchino, who in 2005 became my cofounder of my first startup.
And he took me out of the lab, dragged me into the hospital and really started meeting nurses and purchasers and doctors—who are people I never really interacted with at a deep level—so I could start to understand that if we’re to develop a new product, who are all the stakeholders this product would need to satisfy, and how can I understand all of their incentives, all of their constraints?
Because ultimately to get a new product to patients you need to understand the whole delivery system it must go through in order to bring that forward, and who must become champions. And the only way that was going to happen is by that early interaction and introduction to David, who brought a business and marketing and totally different background, but we challenge each other, we have mutual respect, and it has let us build now two businesses that have brought a number of exciting things into the clinic.
In order to enter this industry, particularly as an entrepreneur, as a first-timer, and I was straight out of grad school when I went into my first startup and I really had no experience developing products. The advice I would give is really to engage people who have gone through that product development experience very early on. They’ll have a lot of rules of the road, a lot of mistakes to avoid, and can really help make you successful even if you don’t have the deep domain experience yet. And it’s amazing how much young entrepreneurs who have a passion and enthusiasm and some really big ideas can engage and draw on people who have deep experience even before potentially they could afford them as consultants or employees.
I think, as entrepreneurs are dreaming big, you can share that energy, share that vision, get people involved and really bring in fantastic folks at a very early stage.
One lesson that was imparted to me early in my previous startup was to think very critically about all the testing and all the features that a medical device must go through to be successful. We were essentially creating a new technology to try to make medical devices safer: reducing clots or infection was ultimately our goal for devices that went into the body.
Now, we thought initially as technologists about the new feature we were creating and how powerful it was and how helpful it could be, but as we started to work with experienced product developers they made us realize that these devices were designed with a certain application in mind; they needed to perform certain functions first and foremost, and as we’re adding our new technology, as we’re making our advance, we couldn’t do any harm to the current standard of care as we’re adding new features onto an existing product.
And that even applies in therapeutics, thinking about not in any way falling short of the standard of care in some aspects as you’re trying to improve another aspect is very important, and experienced product developers can really help you understand that process.
In order to drive new innovative medicines to the clinic, a critical aspect of this is developing a strong intellectual property position because of the great resources required to advanced a medicine. It can be hundreds of millions of dollars to advance from concept through trials, and even billions of dollars before ultimate launch of a product. In order to justify those kinds of investments one needs to be able to have a product that one can protect for a period of time on the market.
The benefits of the patent system are—essentially it’s a trade. For a period of time you’re granted that right to be able to have exclusive access to sell a certain medicine, but in trade for that essentially you have to disclose to the world, “Here is exactly how we did it,” and it can let the world start thinking pretty quickly about: how can they do better? And at the end of the day whole fields of science advance, new medicines move forward, and as things become generic, medicines continue to reach a broader and broader patient population.
Hertz Foundation Fellow Dr. Christopher Loose sold his first startup for $80 million in 2012, and co-founded his second startup, Frequency Therapeutics Inc., in 2015, which is developing methods to restore hearing loss, with greater applications in human regenerative medicine. Even if you aren't in the field of medicine, innovators of any kind looking to found their first startup will benefit from his experience and advice on mentorship, building a balanced team, consulting experts, and how to develop the right first product—one that the rest of your career might be valued on. The Hertz Foundation mission is to provide unique financial and fellowship support to the nation's most remarkable PhD students in the hard sciences. Hertz Fellowships are among the most prestigious in the world, and the foundation has invested over $200 million in Hertz Fellows since 1963 (present value) and supported over 1,100 brilliant and creative young scientists, who have gone on to become Nobel laureates, high-ranking military personnel, astronauts, inventors, Silicon Valley leaders, and tenured university professors. For more information, visit hertzfoundation.org.
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