The fifth annual Nanotech Commercialization Conference, which took place in Winston-Salem last week, offered an overview of the stateof the nanotechnology industry in North Carolina and beyond.
The conference focused not only on current trends but also on how startups and existing nanotech companies combine innovative science with sound business models to find commercial success.
Several of the conference’s panels focused on successful commercialization of nanotech and other tech-driven companies and featured seasoned entrepreneurs with hard-earned wisdom giving tips for what works and what doesn’t.
Hindsight Is 20/20
Running any company has many challenges, but running a tech company presents a whole new slate of obstacles, said Sunit Talapatra, Ph.D., who moderated a panel of entrepreneurs in nanotech. The panel discussed their experiences and challenges with raising capital and adapting the business models for their companies.
Many entrepreneurs use the resources at their disposal, which often includes working with friends instead of experienced business partners. But this can be potentially harmful to businesses, said Steve Peterson, CEO of Trana Discovery. The Cary-based drug discovery company has received several loans and awards from the North Carolina Biotechnology Center, including a 2008 Small Business Research Loan for $250,000.
It’s not enough, said Peterson, to be friends or get along. Instead, he said, entrepreneurs need someone who is “almost an antagonist,” who is willing to challenge ideas based on their merit, to help refine the company’s ideas and business model.
That sentiment was echoed by Ed Miles, CFO of Carolina Seed Investors. “You don’t start by picking a CEO and seeing if he can fit business to the science,” said Miles. “It’s the other way around.”
The panelists agreed that too often, entrepreneurs ignore the basics, such as determining specifically how their company is going to make money. “Developing a marketing plan is just as important as developing research and development,” said Miles.
Many companies, he said, have lofty goals but should instead focus their efforts on getting a product to market and funding the business. Most successful companies do not launch a high-end or revolutionary product, said Miles, but rather, start with smaller products to raise capital and then reinvest into developing more products.
Flexibility Key to Success
The ability to adapt is one of the most crucial aspects necessary for success, said Bennett Love, vice president and co-founder of Synereca Pharmaceuticals. Adaptability is especially necessary for tech startups, he said, since almost half of all companies find commercial success in something other than what they started with. “Good management will push a company to go out and acquire skill, technology and a product for the marketplace that allows the company to find success,” he said.
While these companies are created from science, they are guided into commercial success by business, said David Himebaugh, president and COO of Blue Nano. The CEO has the duty to make money for investors, which in turn leads to more science, he said. A company’s technical founder has a specific vision, but the CEO’s vision is to keep the company economically viable. “If you make enough money, you can do whatever you want after that,” he added.
“It’s very important that you understand the market you’re launching a product in to,” said Peterson. Successful entrepreneurs determine the market for this product, determining potential competitors and deciding on a price point that is attractive. He pointed out that many companies might be able to make a better product but fail to realize that people are willing to pay more for that product than cheaper alternatives. “You have to be brutal and be able to kill the direction in which you’re heading if you determine it isn’t going to work.
(C) NC Biotech Center