Craig Shimasaki Ph.D. President and CEO Moleculera Labs and BioSource Consulting
Follow This Expert’s Advice on How to Build a Successful Company
It is impossible to build a successful biotechnology company without the help from a myriad of individuals and external partners. Seasoned entrepreneurs know that success is not solely determined by what they accomplish themselves, rather it is what they achieve with, and through, the assistance of others. Successful biotechnology companies are built by growing teams of diverse, highly skilled individuals, and alliances with selected and experienced partners. Here are some things I learned over the past 30 years as a serial entrepreneur and co-founder of three biotech companies.
Virtual Is Vital
At the outset, most biotech start-ups should operate as “virtual” until they reach critical mass and acquire enough intrinsic value that appeals to shareholders. Virtual means you strategically leverage selected partners’ capabilities, and do not own all the resources, or perform all the activities required to develop your technology and operate your business. Even large corporations outsource some functions so they can focus on their core strengths. Money is critical and you need to ensure that the little you have is predominantly directed toward developing your product, or toward advancing the technology that your product is based upon. Being virtual allows you to extend your time horizons to reach additional value-enhancing milestones and raise additional capital.
HR Challenge Number One: Recruit the Best Team Members and Do Not Fear Diversity
Early hires are critical to establishing a solid foundation for your company, and their skills ensure you can achieve the desired product development progress. Therefore, recruit and hire outstanding and dependable individuals in all functional areas your company professes expertise. Utilize the typical ways to find team members, such as job postings and ads, and communicate with your contacts about open positions. However, the best people are not usually looking for a new position, rather they are found and persuaded to join a venture. Therefore, you should selectively utilize recruiters to identify key hires. You improve your chances of selecting the best hires by developing an interview process that examines three important aspects of fit: relevant experience, ability to execute, and shared core values. Once you identify the best fit individuals, have a well-thought-out strategy for positioning them at an appropriate level within the organization. Do not set people up for failure if they should have been hired as a technical advisor or scientific consultant because their technical skills were great but their leadership skills were not. Also, as the company grows, do not dodge personnel problems. Personnel issues can destroy team motivation and limit a company’s ability to make timely development progress. Each team member will either be an asset or detriment to progress. You must identify the best talent and continually help them learn to become better managers and leaders.
HR Challenge Number Two: Offer Highly Competitive Benefits, Salary, and Incentives
Finding the best team members is challenging. Enticing new talent with adequate compensation to persuade them to leave their current position is a greater challenge. Young biotech companies wrestle with their ability to provide competitive compensation packages required to attract and retain key employees. Smaller startup companies have an advantage since they can be more generous with their equity compensation (such as stock options) compared to larger organizations. And, they can offer key employees a greater level of responsibility in their position. However, larger organizations can offer generous benefits packages because of their size and ability to command reasonably priced medical and dental insurance, retirement, and other perks. I found the best way to compete with larger organizations and access a menu of competitive employee benefits is to partner with a Professional Employer Organization (PEO), or HR outsourcing group. PEOs become co-employers with their client companies and can aggregate employee numbers to offer the same benefit packages that large companies offer. This equalizes the playing field when recruiting critical hires. PEO companies provide the necessary human resource functions such as payroll and withholdings. Most PEOs also provide support with policies for hiring and firing, interpretation and implementation of employment law, and help in implementing an annual review process. There are several good PEOs with varying features and benefits. Check them out and see if they may be right for your organization.
HR Challenge Number Three: Lead vs. Manage
A growing company will endure subtle, continual transitions throughout different corporate life stages over time. Throughout such transitions, business practices and changes in companies’ decision processes evolve. Leaders must adapt management and communication styles as their organization transitions to effectively lead the company and accomplish their goals. At the startup stage the biotech leader quickly learns that they need to be a jack-of-all trades. During this stage, leaders must manage with a command-and-control style—decisions are made by one individual who then directs the work of others. The wrong connotation is a military-style boot camp, where a Sergeant barks orders to everyone. A team looks to a strong visionary leader for direction and to make decisions. As more seasoned key employees join the company, the leader should transition to a delegate-and-inspect management style. This instills greater responsibility in the team and allows you to recruit and retain more talented, seasoned individuals.
HR Challenge Number Four: Build and Maintain a Unique and Personal Corporate Culture
For a biotech start-up company, developing a corporate culture may not seem like a high priority compared to raising capital, hiring teams, and achieving product development progress. However, at some point corporate culture will impact your company’s ability to get work done effectively. One thing is certain—there will be a company culture. The question is, will it be created by design or default? Purposefully choose to build a culture that adds strength and is not divisive. Never forget that an organization’s strength is the sum total of the individual strengths. Individuals make decisions based upon knowledge and their core values. An individual with the core value of “respect for others” will not leave unfinished work for another employee; and, individuals with the core value of “acceptance of responsibility for ones actions” will not hesitate to admit a mistake instead of covering it up or blaming someone else. A fundamental business error is to only focus on products without consideration to the people that produce the products.
Building a successful biotech company requires an ever expanding team of individuals and the ability to lead, manage, and reward them. Begin as a virtual organization and build strengths that are core to your organization but outsource non-core activities to key partners. Lead by vision and manage your growing team through your company’s different development stages. Choose your team wisely, because the credentials and experience of the team are viewed as indicators of future success by your future investors.
Craig Shimasaki, Ph.D. (email@example.com), is president and CEO of Moleculera Labs and BioSource Consulting and advisor to TriNet, an HR leader specializing in life sciences. He is author and editor of two books: The Business of Bioscience: What Goes Into Making a Biotechnology Product and Biotechnology Entrepreneurship: Starting, Managing and Leading Biotech Companies.