In San Jose Business Journal, Barbara Kosacz offers some professional advice for scientists interested in creating startup companies. Summary and commentary:
- No matter how solid your science or engineering argument for the product, more important is sound reasoning in the business of the product: Will it be financially successful?
- Sometimes it is better to promote the product without ever forming a business. I think this is a precious piece of advice — watch your return on investment soar when you sell an idea to an entity that can most efficiently handle bringing your product to market. Why fight a losing battle, investing untold hours and dollars acquiring the skills, training, funds, and influence to form a credible business and product when businesses like GE, Siemens, or BD would be elated to negotiate a price for your original idea? If they can carry the product to completion more effectively and more efficiently than you, then sell them your product! Everyone benefits. You become free to move on to other projects. Take advantage of the fact that as an individual entrepreneur you have agility and freedom that large medtech companies cannot achieve. A business like GSK has so much inertia, it could never make snap decisions and change its entire focus to another product at a moment’s notice. Herein lies an advantage for the small business owner.
- Outsourcing is common even in small companies. The result: employees become polarized into either senior staff or outsourced cheaper labor. This leaves no room for junior employees. This arrangement calls into question the business’ long-term security; once the senior employees retire or seek other jobs, who is able to take over the company? Perhaps this dilemma is best addressed with an exit strategy.
- A growing trend is turning to government funding and other grants for funding, as opposed to venture capital. Government support of science and research is not at its peak, but the hard-won dollars from grant money are often large sums of money. However, these grants have the stipend that the winner must produce a deliverable. One strategy, mentioned here, is to use grant money to postpone the pitch to venture capitalists, until more progress is made in development. According to Nanotechwire, the subtleties of venture investing in nanotechnology are too nuanced to be fully understood; still, the general trend is an upward climb despite nanotech’s unproven track record.
