Why do so many scientists fail as entrepreneurs?
This is a guest post by Gerry Langeler, Managing Director with OVP Venture Partners. Do you have a response to Gerry’s post? Respond in the comments section below.
Many scientists conduct research they believe can have commercial value, and so they fancy themselves as budding entrepreneurs. But a remarkable number stumble over predictable hurdles when they try to make the switch from researcher to start-up founder.
Between academic research and commercial success lie a set of challenges that I discuss in my book “The Success Matrix – Winning in Business and in Life.” It turns out all business endeavors (and for that matter all personal endeavors) consist of three basic elements:
Vision – Process – Output
You have to know where you want to go.
You have to have the skills and resources to get there.
And then you have to execute.
It sounds so simple.
But history shows getting it right is very, very hard.
As a scientist and researcher, you have undoubtedly run this drill many times. The problem is the context changes when you go from academic activities to commercial ones. Regardless of your responsibilities, there are eight possible combinations of presence or absence of Vision, Process and Output, and we can name those combinations as “characters” with predictable strengths and weaknesses.
If you have Vision, but no Process or Output, you are a Dreamer.
If you have Vision and Process, but no Output, you’re an Academic.
If you have Vision, no Process, but Output, you’re a Brute.
If you have no Vision, have Process, but no Output, you’re a Bureaucrat.
If you have no Vision, have Process and have Output, you’re a Merchant.
If you have no Vision, no Process, but have Output, you’re a Grunt.
If you have none of the above, you’re a Loser.
And if you have them all, you’re a Success!
When you change from academia to business the definitions change, too
What makes this difficult for scientists is that the definitions of what makes good Vision, Process and Output are different when you change your objective from accepted peer-reviewed research papers to customer accepted commercial products.
Bulletproof experimental results may be required to pass muster with your peers before you can get published in Nature. But, in the world of commerce, you’ll need to blend scientific integrity with effective cost and time-to-market progress toward commercial stages that keep companies afloat.
Now, that doesn’t mean you can trot off to the FDA with just a smile and shoeshine. But it does mean that you’ll need a different Vision, a different Process, and be measuring yourself against different Output if you want to be considered a Success as an entrepreneur or a member of an entrepreneurial team. That presents for you a required change from what made you successful as a researcher. What got you here won’t get you there.
As a board member of biotech companies, I’ve seen this struggle up close. By definition, we only want to invest in world-class researchers who we believe are on the cusp of scientific breakthroughs. But, then we have to get them accept that our money is not infinite, nor our patience, and so they need to “invent to a schedule.” Yet, as we all know, no one can actually schedule inventions, or breakthroughs.
So, what is needed is an appreciation by the scientists that “the perfect is the enemy of the good” and that “good” is often good enough to move forward, even if that feels uncomfortable to those for whom “perfect” (or nearly so) has been their standard.
It is still publish or perish, but with different rules
To be fair, in some ways the commercial world mirrors the academic when one considers the “publish or perish” doctrine. You can’t go on forever doing research without Output (what you publish) or your source of grant funding will dry up, or your tenure will never be approved. The difference is in the commercial world, the “time to publish” is more constrained. And in the commercial world, “publishing” means demonstrating enough progress, to whoever is your audience, so that checks continue to get written.
But those demonstrations of progress are not nearly as constrained as a peer reviewed research report. Those of us who invest in biotech for a living understand that sometimes your research results are preliminary, or even sketchy, but we need to make informed judgments on imperfect information. What we require from you is your best efforts within the time before we have to make another financial commitment.
And above all, we need the candor that comes from scientific inquiry. Many times your first experiment won’t yield the results you expect. That’s OK. Let’s try to find out why. Is your (and our) hypothesis wrong, or were the experimental conditions wrong, or did you learn something that opens a new avenue of investigation?
Unlike polished documents at the end of the research process, our Process is quite comfortable with the uncertainty that comes with the path to discovery.
So, that might mean for a while you look like a Brute to us. Great Vision and some interesting Output, albeit without a validated, repeatable Process yet. Essentially every start-up we’ve ever backed, not just in biotech but in all technology sectors, has been a Brute when they started out. They understood that to continue to get funding from venture capitalists, and ultimately get products to customers, brute-force was necessary.
Heroes are the stuff of legend, but not of longevity
Heroic efforts are often the difference between success and failure. But what we know is long-term heroes (and Brutes) don’t scale. Long-term, polished, repeatable processes need to be in place for the commercial enterprise to succeed.
Similar things can be said of the other “less than Success-ful” characters. For example, at times you just have to crank out stuff, even if it doesn’t seem to align with the grand Vision, or match up with a sophisticated Process. Welcome the “Grunt.”
Sometimes in a commercial enterprise, some Output is better than none. It keeps the wolf away from the door. Just as with the Brute, you don’t want to rely on Grunt behavior very long. But in the short-term, it can be all you need to fight another day.
What you need to avoid at all costs is to revert into “Academic” behavior, at least as defined in commercial company terms. All Vision and Process with no Output will not keep the lights on.
This is one of the reasons we like to pair up fantastic researchers with others who have already made the leap into commercial companies. Nothing can replace the breakthrough science. But those pragmatists who understand the differences between the two domains can be remarkably helpful in getting the scientists new to the corporate world to understand the different rules of the game.
And instead of failed scientist, the result can be a successful enterprise.
What do you think? Do you know people (or organizations) that fall into the character groups described in the Matrix? How do you deal with them? Sound off in comments below.
For over 20 years, Gerry Langeler has served as a Managing Director with OVP Venture Partners (OVP), the most experienced venture capital firm in the Pacific Northwest. OVP was formed in 1983, and raised seven venture capital funds, the most recent at $250 million. The firm focused on early stage companies in clean tech, digital biology, and information technology. OVP backed over 125 startups and saw over 50 major liquidity events, including 25 IPOs and more than 30 acquisitions by public companies.
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