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Starting Your Life Science Business — The Essential Questions

– Contributed content –

Medical lab

Becoming a life science business owner demands certain skills. (Darko Stojanovic, Pixabay)

10 Oct. 2018. Starting a business in the life sciences sector demands careful consideration to make it work. Every detail, from securing funding and lab space, down to getting investment, hiring technicians, selling into clients and even choosing IT like a secure fax machine, is up to you. The paradox is, that while you might have a brilliant area of research, it needs the touch of an entrepreneur to turn that into commercial applicable solutions, which is a whole different skill set to the one that brings you academic success. However, with a few bases covered, it can be a very satisfying and profitable enterprise. Here’s the inside scoop on what to consider.

Securing the IP

Scientific innovation may be to the greater benefit of humankind, but there’s no escaping the thorny issue of IP (Intellectual Property). If you’re coming out of a university research environment, be aware that some institutions will automatically claim ownership of any work carried out on their premises, especially if it was part of a sponsored research agreement with a state agency or privately owned company. In that case, they will very much own the research.However, you may be able to make a case for licensing the research back from them to develop a commercial application, particularly if that wasn’t their aim or it works better in another field. Just make sure you have everything in writing, as legal disputes can be completely ruinous, both financially and mentally.

What’s the commercial angle?

You can waste a lot of time and money pursuing some fascinating innovation, only to realize there’s no end game in terms of a customer application, and while that may be permissible within academia, as a potential life science business owner it’s critical to start with the end in sight. Your strategy needs to center on the platform, product or service and how that solves a problem for the customer. This mindset of marketing plans and return on investment can be quite an adjustment for those from a research background. If there isn’t a consumer market out there for your development, you simply won’t get the financial backing to make a business viable, no matter how good it is in scientific terms.

Speak to investors early on and get a feel for the market potential – most are very good at spotting applications for new technology, although be careful not to give away too many details ahead of a formal agreement. Also find out what’s going on within the industry and what other companies are launching, as it’s very possible someone else could be developing similar processes.

Where is the market?

In certain fields, such as medical devices, it’s also important to be clear on the difference between end users and customers, and how you approach both differently. A customer is the one who pays, which in this case could easily be hospitals or clinics or even health insurance companies rather than patients. All will need a different approach, and you should seek to involve them in your early stage research. They can also help you to determine your total addressable market, which is defined as the revenue earned if you were to reach 100 per cent of your potential market. You may not reach it, but knowing there is a healthy potential figure there is what you need to get to the next steps: a solid business plan and a committed investor.

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