After years spent working with and within startup (and grownup) companies, the Chrysalis team has observed repeated themes that prevent good ideas from growing into great companies. The following is a list of the most serious (and all-too-common) mistakes.
1. Lack of focus
The Genomics industry is rich with amazing, multipurpose technologies that can be used for everything from detecting cancer to selecting drought-resistant crops. But if your business isn’t focused on solving a few core problems well, it might just fail to accomplish anything at all. This doesn’t mean giving up on every possible product configuration, application, or additional functionality in the long-term. But initially, startups should focus on solving a critically important problem, and doing this one thing really well.
2. Equating a working prototype with a commercially viable product
Your brilliant engineers and scientists can produce incredible data with your alpha system. But that doesn’t mean your customers can achieve the same results in their own labs. Unless you plan to screen potential customers and allow only the best and brightest work beside you in the lab, you don’t yet have a commercially viable product. It requires a fundamentally different skill set to make a system robust and functional in customers’ hands, so make sure your product works for the many, not just the few.
3. Fighting the enemy on the inside
While not unique to any particular industry, we’ve seen far too many companies with amazing technologies and toxic cultures. You can generally sense this within minutes, and yet it’s one of the things many CEOs fail to recognise, or refuse to address (often being a key enabler of the dysfunction, themselves). Having an external dragon to battle is a great unifying force, but if the dragon lives inside the building, carnage will ensue. If you don’t have the grace to openly encourage feedback, accept and acknowledge criticism, and do something about it, then you might reconsider the “C” in your title.
4. Believing the best technology will sell itself
There are many examples in history books and business school case studies where superior technologies didn’t win the day, and this is just as true in genomics. Often, smart commercial execution can topple a superior technology: a stellar sales channel, better pricing, compelling messaging, showpiece publications, KOL endorsement, and the list goes on and on. So make sure the acumen of your commercial team matches that of your engineers.
5. Missing the ways your customers can best use your technology
You have visions of the great technological feats your system can perform, but are these technical achievements important and useful to large groups of customers? You may have dreamed of a system with the sensitivity and specificity to do a complete genome assembly for every tumor cell, but are you ignoring the fact that most of your customers need targeted gene expression data from FFPE samples? Identify killer apps, which may be different from your latest technological moonshot.
6. Believing that genomics markets behave like retail consumer markets
We’ve seen many small (and large) companies come in late to a market and try to grab their piece of the pie by selling a value-based product, only to find it extremely hard to get any traction with customers. The winners in the genomics market are often decided by the protocols and publications of key opinion leaders, using the latest and greatest technologies. Buyers then tend to play follow-the-leader, often leading to a winner-take-all outcome. The market then moves on to the next big thing. Disruption is the tried and true path to market leadership. So don’t try to grab crumbs from an existing pie; go bake your own.
7. Believing that genomics customers don’t behave like retail customers
You figure that since your customers are scientists, you only need to lay out the facts, and they’ll make the right purchase decision. Wrong! Scientists are people too, and most people make decisions based on both intellect and emotion. Ignore the latter, and you won’t get the customer. The members of the Chrysalis team led an outbound marketing campaign against an entrenched competitor years ago (they outspent us 10 to 1). They focused purely on the performance specifications and underlying technology of their product. We told the stories of real people who were enabled by a technology to accomplish great things. It is critical to build an emotionally and intellectually compelling story to win customers’ hearts and minds.
8. Thinking your technology is so awesome that customers will walk through fire to use it
Your technology produces amazing data. It seems clear to you everyone should grin and bear the pain of using it. Then you are surprised when your systems sit idle in customers’ labs. We all find ways to avoid chores we don’t like doing. If you’ve made a workflow that is complex, difficult, mind-numbingly repetitive, long, and arduous, then customers will find reasons to do something else. Remember that for every system you sell, there is someone who has to run it, and you need to make the workflow as fun and easy as possible. The lab tech may not have been the one to fork out money for the system, but they have a lot of influence over day-to-day operations (and your ultimate success). So don’t make their lives a living hell. Design a system that lures post-docs to come in on the weekend and play with their cool new instrument.
9. Assuming that the medical community will rapidly adopt new techniques that have proven themselves in academia
Scientists love your product, and you’ve set expectations with investors about the $20B opportunity ahead of you in the clinic. But the buying decisions that clinicians, patients, and health systems need to make are very different. Can your product change the way patients are treated (i.e., is there clinical utility)? Does it improve outcomes? Is it cost-effective? Does it lead to more testing? Do clinicians even understand the technology? Will it be reimbursed? Get feedback from physicians, genetic counselors, payers, regulatory experts, and lab managers to understand the rocky path to the clinic before determining if and when it represents a goldmine for your company.
10. Failing to address the entire customer workflow
Even if your company doesn’t provide every piece of the solution (e.g., sample prep, tertiary data analysis), your customers still need tools to complete the entire workflow. In the early days of NGS, our customers were generating ever-increasing amounts of data, and as a result, some would run their systems once and spend the next month or two trying to analyze the data (this wasn’t optimal for consumables revenues). It was critical to address the data analysis bottleneck in order to get those systems running again. So make sure your customers can efficiently get through their end-to-end process.
11. Assuming customers will “get it”
Even though your customers are brilliant researchers and clinicians, you can’t always assume that they understand a new concept or technology. It is often critical to spoon-feed scientists information, even if you are worried about insulting their intelligence. When the Chrysalis team were focused on building the NGS market, we spent time making basic educational materials on how the sequencing chemistry worked, the kinds of data that were generated, and how to analyze those data. We gave countless talks to scientists that often began, “I’m sure you all understand this, but let me run through some background information, just in case anyone is unfamiliar,” only to see relieved faces in the audience and hear many requests for copies of the slides. So don’t be afraid to educate your customers at a more basic level than you might think necessary. If they don’t really understand it, they won’t buy it.
12. Overestimating the size of a market
Let's face it, genomics is a focused market, and if you slice that pie too thinly, you might end up hungry. Just because your mobile plasmon-based tear-duct miRNA detection system solves your problem, doesn't mean there are millions of others waiting to pay for it. Market sizing requires not just a glance at epidemiology statistics, but in-depth understanding of market dynamics and customer needs. And overestimating the size of your market can lead to costly mistakes in staffing, scale-up investment, and mapping out a realistic exit strategy. So really understand the size of your market before investing in ways to conquer it.
13. Choosing the wrong investors
Money is money, right? But if your investors do not share your vision for the company, its focus, timelines, and business strategy, then you are headed for trouble the minute the check lands in your hand. Your investors should bring value that extends far beyond the initial capital infusion. They should help guide you and open doors to partnerships and new customers. Their actions should accelerate the growth of your company and help you avoid missteps. If you and your investors are not explicitly aligned on your vision and plan, then make sure to resolve those differences before the funds begin to flow.
14. Hiring people just like you
Young CEOs fresh out of graduate school often hire other young, brilliant people who happen to share their worldview, their mental acuity, and their glaring gaps in experience. Perhaps no biomedical field is as interdisciplinary as genomics. And certainly few challenges demand a blend of innovative thinking and hardened practical experience like genomics -- turning a biochemical process into a marketable product. So make sure to power your staff with a diversity of viewpoints, experience, abilities, personalities, and worldviews.
15. Neglecting to actively curate a positive, productive culture
It’s important to take an active role in nurturing the culture of your organization. What works best is ultimately up to you, but deep in their minds, great leaders have a strong notion of how their companies’ cultures should function. Here are a few hallmarks of what we’ve seen in great cultures, and what we try to promote in our own company: reaching beyond the boundaries of your job to pitch in and help others, curiosity, willingness to take risks and admit failure, regular communication and a shared vision, personal and shared accountability, humor, admitting what you could have done better (and trying it next time), openness to experimentation, openness to crazy ideas, earned trust, a focus on solutions rather than on blame, empathy, compassion, and friendship. Did we mention humor? Accidental fermentation doesn’t always yield the best wine, so make sure to spend some time defining and cultivating a vintage that gets better over time.
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