Biotech is a tough industry, but if you follow a few guidelines you can create a successful company.
Few industries are as challenging or as exciting as biotech. Constant innovation and strict regulation means that you have to be at the top of your game in order to succeed. So before you attempt to start a new biotech company, make sure you have these five key areas covered.
- Recognize where your technology fits in the industry.
It’s easier and less expensive to create a new piece of technology in biotech that provides incremental improvements to existing solutions than it is to create an entirely new category. Everything from regulatory approval to marketing becomes simpler if you have a listed product, a benchmark or an equivalent technology to compare to yours.
Be sure to study similar offerings to understand which listed products, if any, would be suitable for comparisons.
- Understand whether your scientific concept has commercial applications.
You must understand the size of your potential market, the potential risks and the expenses of starting commercial operations before you commit to a biotechnology startup. Sometimes even the best ideas may not be commercially viable. Your idea may be too expensive to develop and bring to market, the research area may be too rare to make your idea profitable or a firmly entrenched competing technology may already provide a less expensive alternative. You can accomplish a great deal of research about the application of your idea on your own by looking at government resources such as FDA.com, FDA.org or by reading trade and regulatory journals such as Health Policy. Even if you aren’t quite ready to look for funding, it may be helpful to talk to a few venture capital firms in your niche to learn about the true costs of bringing a new technology to this market.
- Learn about legal protections for your intellectual property.
People often mistakenly believe that you must apply for a copyright to protect technology, but that is not the case. As soon as you put the idea in writing –- either pen and ink or electronic — it is covered by U.S. copyright laws. However, a copyright only protects the actual written word, not the idea. To protect the idea, you need a patent.
Patents and copyrighted publications may offer you some legal protection as you explore the possibility of bringing your idea to market, but their protection is not necessarily global or all-encompassing. Be wary of where you disclose critical information about your idea since some regions do not respect intellectual property rights. You should seek legal advice to understand the available protections before discussing your concept — even privately. This is especially critical if you are considering outsourcing production or development in parts of the world that don’t have strong intellectual property protections. You must be aware of the right balance between trade secret and patent disclosure.
- Study the leading companies in your area.
Learn as much as you can about companies with ideas, technology or products that are similar or complementary to yours. Public companies often disclose areas of promising research in their annual reports, and scientific journals may contain broad hints about research direction for leading labs. Monitor the FDA submission and approvals publications to understand what potential competitive technologies are on their way to market. Keep an eye on clinical trials, which may show areas of ongoing research.
However, you need to be aware that these sources will not reveal future technology requirements, so you will also want to attend biotech conferences and read scientific journals to learn about emerging trends and technologies. Follow the money by seeing where grants are being awarded, since those labs or companies may be looking to ramp up their research soon, presenting an excellent opportunity for new technology.
This step is critical. You don’t want to sink everything you have into a startup only to find that a competitor has beaten you to the market. It’s worth the time and effort to do the research.
- Map out your product’s strengths and weaknesses.
If your idea improves on an existing one, be sure to map out your strengths and weaknesses against existing and potential competitors. Don’t focus only on your idea’s superiority — look at the size and financial strength of the competition as well as their market awareness. Be realistic about your idea’s chances for success. If a competing technology has captured the minds of doctors and patients, you may have difficulty gaining awareness for your idea even if it is cheaper, safer or more effective. The commercialization of your concept or idea is just as important as its implementation at this stage.
These five factors are crucial to consider before launching a new biotech startup if you hope to succeed in this fast-paced, highly competitive market.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
Image credit: CC by Dinesh Cyanam