The Field of Entrepreneurial Dreams

My wife is from Iowa, and although I lived and worked there, I have never visited the famous Field of Dreams. I’ve been told it is more a symbolic site than a bona fide tourist destination. Nevertheless, I find myself attracted to the site of the iconic movie that first posited the famous “if you build it, he will come” quote. I’ve met many people who, in business, have invested heavily in technologies where the business plan is hardly more that this: “Build it, and they will come.” Something in my own personality likes this idea and would love it to be real. Alas, my experience tells me otherwise.

It is both a strength and a weakness of technology entrepreneurs. I find it easy to be bewitched by the lure of new discoveries. I may read about a new technology or recent innovation and it triggers something in my head. Perhaps, it engages with some other piece of information I have stored, and forms a hybrid idea that, like many chimaera, would not exist but by human imagination. I might find myself setting off on a curiosity-driven journey of discovery. I first try to understand it, then start thinking about whether there might be a potential market, or where that may be geographically.  I think about the barriers to entry, potential start-up costs and whom I might approach as part of a management team, and so on.

It is a virtual exercise at that point. Something that takes place entirely in my head, or, if it continues to niggle at me, it may even make it to a kind of “hard” record, usually some rough notes on the iPad app Paper by 53. If, after some weeks and some time away from the idea, I find myself still thinking about it, I may jot down a slightly more structured Draft, Potential, Business Plan Proposal (DPBPP). I like this term because it allows me so many steps to drop the idea.

From there, over a period of time, it might progress to a Draft Business Plan Proposal (DBPP), at which stage, I often introduce the idea – no matter how speculative – to someone whom I trust and who is critical enough to point out all its flaws. If it survives this step, and I am finding more positive than negative indicators, I just cannot help but want to pull together a Draft Business Plan (DBP).

By this point, I am invested in spirit if not monetarily. I need to go through all of the usual brutal business plan steps trying to destroy the idea while simultaneously keeping the vision of my “proposed future.”

Many academics studying the attributes of entrepreneurs point to the tendency to create the world in their image, as a major part of the psyche that leads them on the journey. This ability to create a vision of the future completely in their heads isn’t simply seeing a the image of a business idea going through the standard steps to fruition. It is much more esoteric and fundamental. Entrepreneurs will actually create a high quality, highly detailed version of their future in their heads, complete with off-target components like how a proposed business influences some other aspect of their life, or how they might call upon a long-lost friend to help design the product or oversee this aspect or that. The whole things is laid out, like scenes in a play, complete with the actors and all the drama.

I believe that this point of creation is the part I personally enjoy the most – using imagination to paint a picture. In this way, the commercial landscape is a canvas and the new technologies are the palette.

I’m not sure if the idea of an entrepreneur as an artist has been mooted before but I’d be interested in the views of Trade Secret’s readers and contributors on this.

Of course, the hard work is just beginning, and the whole gamut of awaiting obstacles and challenges involve many other skills, attributes and personality traits. Still, I think it’s informative to know my own drivers.

Sometimes I think my interest begins to wane as soon as the company is real and the trading begins. I am certain, however, that in both of my own start-up companies, I felt the pull of new adventures after three to five years, and was happy to pass on the running of the company once it was steadily performing.

If, any of this sounds familiar to you, then you already know that you’ll need to find yourself an anti-version of yourself: a wing-man, or -woman who sees all of the difficulties and all of the reasons why it just can’t work. You need a chief operating officer or chief technology officer who is weighed down with the details of making the vision real but who is a pragmatist, with an Orwellian-vision of your future where utility is king and process is required. These people know that you can’t go from A through Z without putting all the other bits in place first.

The Field of Dreams quote is a great starting point for a business. Dreaming is such a powerful driver. However, in the make-or-break world of commercial reality perhaps a more fitting, realistic statement might be “Dream it, plan it, implement it, and, you know what, they might just come.”

Chris Hillier

Minimum Requirement for a Successful Bioscience Ecosystem

I recently came across the book The New Players in Life Science Innovation by Tomasz Mroczkowski, in which he discusses the role of emerging economies in the global biosciences industry. Of course, in the topsy-turvy economic world we find ourselves in today, countries such as Brazil, China and India are taking leadership based, in part, on their growing economic strength.

How then would a small nation enter the biosciences industry as a novice? What would it need before it could start to develop its own indigenous biosciences industry? Is this even possible without the billions of dollars that is being spent by the aforementioned countries? Are there indeed minimal requirements necessary for the creation of a sustainable biosciences ecosystem, and, if so, what would they be?

If Mroczkowski had written his book 30 years ago, Singapore would have been given a whole section. In economic difficulties and with almost no bioscience infrastructure (although it had already started to make headway with textiles, fuel, and IT), Singapore was able to grow one of the most impressive bioscience ecosystems ever created, becoming a global industry leader with the highest per-capita gross domestic product in Asia outside Japan. The reasons for Singapore’s incredible success is the subject of heated debate, but two factors stand out – its proximity to large and growing markets (China, S. Korea, etc), and its early development of a government-backed bioscience ecosystem to support companies including services, manufactures and, critically, cash.

In large complex economies it is often easy to overlook the enormous advantages that are present simply as a factor of scale. Yes, some economies of scale are straightforward to understand, so it is obvious that the larger the internal market the easier and cheaper it is to reach, and therefore the better margins one can create.

However, as an entrepreneur within a small nation and part of a smaller internal market, the creation of a biosciences ecosystem from scratch is far from straightforward and forces the consideration of the different needs and attributes of bioscience companies.

Clearly, there are generic characteristics that apply to any ecosystem. The most important of these factors are simply “food”, “fuel”, and “space”. In economic terms and from the perspective of a dynamic, young ecosystem, which in my opinion still describes biosciences, then “food” describes a reliable supply of useable innovation; for “fuel” the ecosystem must have access to driving entrepreneurial energy deriving from innovative bioscientists as well as a constant supply of investment cash from biotech-savvy investors, and for “space” there needs to be a supportive environment, both political and economic, allowing embryonic ventures to grow and develop before being released into the economy.

However, these components of a nascent bioscience ecosystem on their own will only be able to maintain a self-limiting bioscience economy. To develop and sustain a high-growth, scalable, bioscience economy there must also be a reliable and economical route to global markets. This is a vital component that requires innovation in terms of business models and in terms of applying government assistance to reach external markets.

These six key factors are described in the simple diagram at the top of this post. In the proximity of these factors a new bioscience venture may at least be assured of a fair crack of the whip and will have a fighting chance, if their product is of sufficient quality and if there is a real need for whatever they are selling.

It is in everybody’s interest if our bioscience revolution continues to expand into more and more parts of our lives, and becomes a standard component of the economies of all countries. If this is to occur, then even current peripheral markets such as the Caribbean with 42 million consumers, or the many growing economies in Africa will need to find ways to build these ecosystems from the bottom up.

There is no reason to suppose that entrepreneurial energy is any less available in these new entrant countries than in today’s industry leaders.  Similarly, innovation is not simply a function of wealth and the size of the research base (although it is a very important advantage to have). So, assuming that the market’s appetite for bioscience products will continue to develop in these countries, as it will globally, the limiting factors may boil down to be political will, economic conditions, and access to start-up and development cash. All three can be influenced by government and all three can each be significantly affected by supportive fiscal policies and legislative structure.

Let us hope that as many of these smaller emerging countries as possible have a growing bioscience initiatives in their policies and have a clear view of what needs to be done to become the next Singapore.

Chris Hillier

And Algae Shall Inherit the Earth

In October, I touched on the promise of biofuels as part of a larger revolution in consumer biology. The recent emergence of biofuels on the political agenda is worthy of note. It is clear that the world’s dependence on fossil fuel is strained on two fronts: the projection that global supplies will eventually run out, and the need to reduce greenhouse emissions and alter the course of global warming.

The world’s largest user of fossil fuels is the United States, mostly for transportation fuel. Therefore, changes to the way that the US uses fossil fuels and any moves to use alternatives are highly significant drivers to the alternative fuels market. Recently, there has been three key developments, all driven by the US, that have created a ‘perfect storm’ of opportunity for strategically placed companies, including well-positioned start-ups.

Firstly, the US Environmental Protection Agency’s new set of Renewable Fuel Standard (RFS) regulations requiring 36 billion gallons of renewable fuel to be blended into gasoline and diesel by 2022. Secondly, regulations due to start in 2015 will require all ships operating within a US designated area, called the Emissions Control Area (an area that includes Canada, Alaska, the US Virgin Islands, and Puerto Rico), to use fuel with less than 0.1% sulfur content (1,000 parts per million). Essentially, opening up the potential for cruise operators and others to now seriously consider using biofuels. Thirdly, and most significantly, the news from last August that the Departments of Energy, Defense, and Agriculture will commit $510 million to build a viable biofuels industry able to provide half of the US Navy’s fuel needs by 2020 – a staggering 5 billion gallons each year. This last measure is born from both strategic and economic needs. The cost of a barrel of oil continues to rise and the Straits of Hormuz is growing more vulnerable in a political game of chess.

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Retail biology

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The recent sad news about Steve Jobs got me thinking about the evolution of markets. In the early years of “information and communication technologies” (ICT) there was an obvious focus on the mainstays. People like Jobs and Bill Gates focused on the hardware and software that would ultimately drive the nascent industry.

Biology is following a similar path, with a natural focus on the development of the main platforms that have gradually improved and been refined much in the same way as ITC. However, like ICT, many (myself included) expect that we are on the brink of an explosion of new, smaller, but very important fragment markets that are best described as consumer biology or perhaps retail biology.

Just as fortunes were made by the designers and manufacturers of the humble mouse mat after the launch of the Apple Macintosh, we are likely to see consumer products exponentially increasing. It is difficult for us now to fully appreciate the number of tiny ICT devices that populate our cars, kitchen goods and even children’s toys; but the time is ripe for a new generation of biotech entrepreneurs to look for novel ways to create consumer products using biological advancements.

It isn’t clear what these products will be or where they might come from, but the starting embers of this revolution can be seen in projects like MIT’s synthetic biology BioBrick programme for schools, where engineering principles are applied to creating genuine, novel and, importantly, useful biological tools. Again, taking a page out of the ICT book, the synergy that could be created by combining novel engineering, exciting design and biological innovation is difficult to overemphasize. There is no way to gauge the potential size of retail biology, but it’s likely to be huge. The initial products probably will be in the food or energy sectors but not on a massive industrial scale. More likely to be smaller, domestic-scale ideas with the potential to catch fire.

For example, in energy, decades of research into the use of biological “feedstocks” for the production of biofuels – mainly biodiesel – are now bearing commercial fruit. Many countries (and some US States – notably Iowa) have taken leadership positions and made huge commitments to this fledgling industry. It’s fair to say that the jury is still out on whether this enormous investment will ever make biofuels the sole replacement for fossil fuels in transportation, but how about retail consumer-level biofuels? Surely, we could very soon see our local Home Depot or Home Base stores selling small toaster- or microwave-sized bioreactors that fit on our patios and generate fuel for our mowers, mulchers or BBQ. With a clever design and some genetically modified microalgae (e.g. from Craig Venter’s Synthetic Genomics, or George Church’s Joule Unlimited) we might have a whole new industry of consumer energy products.

In the food industry, a fear of diminishing food security in the 21st century could get consumers happily shopping for generic protein sources, rather than specific meats like beef, pork or chicken. This surely offers opportunities for entrepreneurial biotechnologists to create novel means to use currently unpalatable sources, such as insects or molluscs. In fact, entophagy (to use the correct terminology), is alive and well in Southeast Asia but is an almost negligible market in the West. Clever biotechnology could, by either altering the insects themselves or by altering their environment, find efficient and sustainable ways to industrialise the farming and harvesting of large flying insects in a similar way to our current harvesting of prawns and shrimp from the oceans. Fresh frozen “locust burgers” in our local supermarkets may not be that far off.

Similarly, the recent invasion of huge numbers of giant African snails that has blighted Florida and many Caribbean islands could easily be turned to the advantage of entrepreneurial scientists with an innovative way to package the protein content.

I will miss Steve Jobs, especially his focus on innovative design and his way of delivering the final product with a flourish. He once famously said, “You know a design is good when you want to lick it.” I now officially throw down the gauntlet to this generation of biotech entrepreneurs – show us something that we want to lick.

Chris Hillier

A Tale of Two Countries

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I have had reason of late to consider the nature of targeted economic development in two disparate countries on either side of the globe. Both are awash with excellent science, have free and highly regarded educational systems, and provide exceptional healthcare to their populations. One is the home of whisky and soccer, the other the home of rum and cricket.

Scotland has experienced two decades of intensive public support via its economic development organisation Scottish Enterprise, which has initiated a plethora of programs, including early stage Proof of Concept schemes, educational fellowships to nurture and mentor budding entrepreneurs (the Royal Society of Edinburgh’s Enterprise Fellowship scheme), and later-stage government supported investment vehicles (e.g., the Scottish Co-Investment Fund).

Barbados, on the other hand, is at a much earlier stage of development, as far as its life sciences industry is concerned, though growing rapidly. Only a few years ago they set out to grow their bioscience base and to develop their biotech credentials by attracting world-class clinical and academic scientists to join their growing cohort of home-grown, ambitious, forward-thinking nascent entrepreneurs. Now, it seems they have sufficient substrate and expertise to move to the next level, and thus seem about to embark on their next stage of evolution. That evolution includes proposals for the development of a world-class biotech park and the implementation of a series of commercial strategies designed to leverage their educated workforce and their unique geographical location, as a natural distribution hub between South America, North America, and Europe.

This is an exciting journey for Barbados, and there is a lot it can learn from Scotland’s experience. The science base and the inventiveness of Scotland are strong assets. This is evident by any number of statistics, including the world’s highest number of bioinformatics research groups per head of population, a single University (University of Dundee) producing more life science citations than Cambridge and Oxford, more medical research per head of population than anywhere else in Europe, and a ranking as No. 1 in the world for stem cell research-based citations.

However, from an entrepreneurial perspective, these have not translated into commercial opportunities at a level that you might expect. For example, in 2010, Scotland’s life sciences companies attracted only £36 million of equity investment. This compares poorly with other biotech hubs, including England, and pales into insignificance against the large hubs of the US.

The reason, often mooted, for this situation is a lack of significant venture capital in Scotland. The fact is, even though early stage companies in Scotland are supported by the aforementioned government initiatives as well as by a vibrant angel network, the funding outlook for early stage biotech companies tends to hit a wall when searching for significant late-stage funding.

As a nation, Scotland has prided itself for its distinctive approach to health care, most recently seen in abolishing prescription charges at a time when England increased its cost. Within the biotech industry, Scotland has also focused most of its life sciences economic development resources on the healthcare sector, including drug discovery, clinical trials, and medical devices. However, we now know that biotech has a ubiquitous role to play in a diverse range of industries. An excessive focus on healthcare can be disadvantageous to those other markets and may steal resources away from overall innovation. This has left Scotland with a perceived narrower portfolio of investment opportunities, of interest to a narrower range of venture funders, and ultimately, addressing a narrower market opportunity. There is evidence now that Scotland is altering its course and developing a wider range of bio-based commercial opportunities, including biofuels.

Barbados, at an earlier stage of development, could learn from Scotland, and ensure that its nascent biotech industry is not overly narrow. It already seems to be committing early to engagement with non-health markets, particularly alternative energy and the environment. This is especially important, since Barbados is endowed with rich and untapped natural resources and biodiversity.

A strategic concerted approach by Barbados Bioscience, the country’s development agency Invest Barbados, and the University of the West Indies (UWI), could carefully position the island as leaders within the Caribbean. Ambitious proposals in the works include those for the new bioscience park, new bioscience regulation and new technology transfer systems.

And deal activity is also ramping up. Earlier this month, a lucrative commercial partnership was announced between the UWI and BioJet International, a leading global supplier of renewable jet fuel for aviation and transportation industries. Under the agreement, UWI and BioJet will jointly develop biofuels IP under the canopy of a proposed UWI/Biojet International Biofuel Research Institute. Deals such as this, which build important strategic relationships with industry and neighbours, are extending Barbados’ reach and influence in the region and wider afield.

If it was to achieve a fraction of the £3.1 billion that the life sciences sector contributes to the Scottish economy annually, then it could be very well pleased with itself indeed.

Chris Hillier