Leadership Skills in the Biotech Start-Up

This is a guest post from Isabela Oliva. Do you have a response to Isabela’s post? Respond in the comments section below.

How to survive the expected and unexpected challenges of the start-up lifecycle in the biotechnology business

IMG_2215 linkedin3A major difference between biotechnology and information technology ventures is the time it takes to bring a product to market. Unlike Facebook and Google, innovation in the medical sciences world generally starts from the results of a long, government-funded basic research investigation.

If a scientific discovery is deemed promising and potentially lucrative, a patent is filed to protect the idea until it matures to a final commercial product. Initially, a patent value is very low due to the high risks and uncertainties associated with the early stage discovery, and it can be hard to attract interest and money from big corporations that have their focus on late stage product development. That is why biotech start-ups emerge. They cover the ground of developing the proof of concept of a new technology.

The early stage of the biotech start-up lifecycle is often called “the translational gap” or “the valley of death”, because of the technical challenges and scarcity of funds available for this early stage of product development. When the proof of concept is successfully established and clinical trials begin, patent value starts to increase, attracting big players in the Biotech/Pharma industry. At this more mature stage of the company, new demands arise, and the start-up company structure and priorities will be required to change in order to survive.

Great technology alone is not sufficient to bring a product from research to market, and leaders should be aware, from the beginning, that a start-up structure and focus will most likely need to change to successfully adapt to the different stages of the product development lifecycle.

This article correlates the different phases of a biotech start-up with the leadership skills necessary to address the most relevant challenges of each stage in an attempt to improve the success rate in surviving “the valley of death”.

Early Stage: The visionary and how to move the idea forward

The spark that ignites the creation of a new biotech start-up is the identification of an opportunity or breakthrough solution for problem in a given market. A passion for the cause, a strong belief in the idea and a clear vision of its application are essential to leadership during the first step of the start-up development.

At this stage, most leaders are the inventors or licensees of an intellectual property. In the early stage the leader must have a strong scientific background and be credible when presenting their idea to the scientific community and the general public. A can-do mentality is crucial, since the number of employees is limited and the leader will need to wear many hats to achieve the company’s goals at this stage, such as defining the technical concepts of the business plan and choosing valuable teammates and partnerships. Understanding the market, protecting intellectual property and securing early funding require a business mind-set, and it can be a challenge for scientists without prior experience outside of the academic world. Nevertheless, being passionate about the technology can help the leader motivate people to believe in the idea, and could also provide the stamina required to overcome the obstacles of the early stage.

Commercialization Stage: The fundraiser and science-to-product

The main goal of this stage is the development of concrete routes for commercialization – assuring sufficient funding to bring a product to the market. The day-to-day operations become more complex, resulting in a need for structured management, and a possibility of changing roles and responsibilities for early stage employees, including co-founders.

Commercial interest will likely replace the early-stage scientific focus as requirements for funding increase. The leader becomes the person with the power to realize the commercial vision for the company. Convincing founders that the priority is commercialization might require canceling projects that seem unprofitable, even if it means shifting the priority to a secondary project that had just entered the pipeline.

It is crucial for the leader at this stage to be strong in their decisions, yet sensitive to the company environment, in order to implement necessary changes without affecting employee relations in a negative way.  Communicating and managing change effectively is a key challenge at this stage. A growing biotech start-up cannot afford losing talented employees, many of whom are subject matter experts of the technology being developed. The implementation of professional processes, operations and organizational structures that might make some senior employees uncomfortable will most likely be necessary.

 Operational Stage: The strategist and how to deliver

At this stage the company needs to demonstrate its marketability by strengthening alliances, deals, and strategic partnerships. A shift in focus from project to transaction might take place, and the management team might be under pressure from its responsibility to investors and an imminent IPO or M&A. The main company goals are to maximize investor return while maintaining workforce retention, morale and culture. In general, it is a stage when keeping promises to business partners, investors, and the general public is extremely demanding. The leader now needs to lead a result-oriented, precise, and efficient management team, task comparable to those of managers in the large industry. Investors such as Venture Capital might want to bring their own CEO as a leader and take part in the company board of directors.

The Board and Exit Strategy

The board of directors plays a key role in advising the leader at all biotech start-up stages. Although t the leader chooses the board members during the early and commercialization stages, they may lose this control at the operational stage when investors’ pressure on ROI is high. The board generally plays an important role in deciding the exit timing and strategies, and it is the leader’s responsibility to clearly articulate the company’s strategy internally and externally. The ability to successfully react to change and to deal well with pressure is equally important when planning for the exit.


The growth of a biotechnology start-up company presents unique challenges that should be properly addressed to achieve the business goals at each stage. Common leadership skills such as clear communication and the ability to implement change are necessary throughout the biotech start-up lifecycle; however, a transition from a science-oriented to a business-oriented culture seems to be essential to survive “the valley of death”, and must begin within the company’s leadership. The ability to accept change, to adapt and to build and maintain relationships are the key points in the progression from science to business and finally the success of a biotech start-up company.


Leadership management needs in evolving biotech companies. Andreas Foller. Nature Biotechnology  20,  BE64-BE66 (June 2002).

 Managing change in biotech: startup and growth. Mary Ann Rafferty. Nature Biotechnology 25, 479 – 480 (2007).

Early-Stage Biotech Companies: Strategies for Survival and Growth. Wendy Tsai and Stanford Erickson. Biotechnol Healthc. Jun 2006; 3(3): 49-50,52-53.

About the author

This article was written by Isabela Oliva is a biological scientist currently studying technology transfer.  She can be reached at [email protected].


  1. Dj
      April 22, 2015

    Hi Oliva,

    Just wanted to leave this note to say thank you for giving a step by step guidance to survive the initial stages of Biotech company.

    I stumbled upon this article while researching on a Australian Biotech company and wanted to know if they could weather the challenges of bringing their product to shelf.

    Based on your thesis it appears that the Company is in Commercialization stage, and scrambling for funds to canvas the superiority of their product. Must say it is a very expensive campaign!