Stephen Chambers spent 22 years in some of the most innovative companies in life science as the director of gene expression and then as a co-founder of his own company. Today he runs SynbiCITE, the UK’s synthetic biology consortium of 56 industrial partners and 19 Academic institutions located at Imperial College in London.
Stephen and SynbiCITE, just launched the world’s first Lean LaunchPad for Synthetic Biology program. Here’s his story.
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Why did you come back? This is the question I most often hear, having now returned to the UK after leaving 24 years ago to work in the US. The answer is simple. The reason I came back is the same reason I left – to be where life science startups are happening.
Hard to imagine now, but in the late ’80s the life sciences startup landscape in the UK was almost non-existent. One or two companies existed which at the time were described as startups, but in reality were government-backed small companies attempting, and ultimately failing, to execute business plans.
At that time for any life-scientist wanting to work in the commercial sector there were few, if any, jobs in the UK. Along with the rest of British industry, the pharmaceutical sector was under going massive re-organization and mergers creating much of today’s big pharma in the process. These where the Thatcher years: when we were told to ‘get on your bike’ and many of us did.
I left the UK joining a newly formed startup, Vertex Pharmaceuticals in Cambridge, Massachusetts, as one of the founding scientists. There were few alternatives then, if you wanted to work in a startup you had to go to the US. Fortunately, Vertex became one of the most successful US pharma companies in recent history. But even if it hadn’t, in the rich life-science ecosystem around Cambridge and Boston, there are plenty of other opportunities. Or you could start your own company, which I did after Vertex.
So what has changed in the UK? Probably the biggest change was the UK government’s recognition of the importance of synthetic biology. (Synthetic biology engineers biologically based chemicals, drugs and materials.) The government designated the field as one of the UK’s Eight Great Technologies (along with advanced materials, agri-science, big data, energy storage, regenerative medicine, robotics, and satellites) that the country would focus on. The UK invested ~ £150 million in synthetic biology research and training through the Research Councils and Innovate UK.
To focus the national synthetic biology effort the UK created SynbiCITE, as the public-private partnership responsible for taking synthetic biology from the lab bench into commercial products in the UK.
And this is what has drawn me back. Looking at the UK, I saw a hotbed of startup activity, especially among companies looking to exploit the latest developments in synthetic biology.
I jumped at the opportunity to be the CEO of SynbiCITE, where I can pursue my passion of working with scientists and entrepreneurs who want to create and build something spectacular in the UK.
The Foundry SynbiCITE provides financial aid for Proof of Concept and collaborative research, and logistical support in the form of access to a state-of-the-art ‘Foundry’ for DNA synthesis, assembly and verification.
Often the limiting step in synthetic biology innovation is the generation of the prototype, the model or the data: the Foundry seeks to bridge the critical gap between ideation and physical product in synthetic biology. Think of it as a “maker-space” specifically designed to support the commercialization of synthetic biology allowing startups to prototype new biologically based chemicals, drugs and materials.
The Foundry accelerates the translation of synthetic biology research into the marketplace. Small and medium-sized companies, startups or virtual companies can use the Foundry as a remote laboratory. We provide automated end-to-end design, construction and validation of synthetic biologic components. It is the generation of these parts, devices and systems, and the diversity of products they can produce and the range of functions they perform, which is creating the enormous excitement around this technology.
Another change in the UK, is the growing acceptance that startups are the true engines of not only economic and job growth but also the medium by which innovation most efficiently takes place. While there are still universities in the UK that would rather not have to deal with messy, cash-strapped entrepreneurs and startups most are beginning to realize that licensing doesn’t create jobs, startups do.
Lean LaunchPad to Accelerate Commercialization The goal of our Synthetic Biology consortium is to turn our world-class scientific research into commercial products. This is why we’re excited about offering the Lean LaunchPad at SynbiCITE. Our goal is to help would-be scientist/entrepreneurs translate their ideas and research in synthetic biology into the marketplace. We want to teach them how successful startups really get built – and do it with urgency.
The goal is to provide them a route from coming up with an idea for a product, through generation of business model canvas via the Lean LaunchPad program and in parallel, harness the Foundry for the production of prototypes, models and data all the while providing evidence of commercial potential.
The program gives those involved direct hands-on experience of identifying a product that the customer really needs and is prepared to buy. I want the participants in the program to have the excitement of finding their first customer, shipping that first product and in doing so learn about all the other aspects of building a successful business. The Lean LaunchPad does that it in 12 weeks.
Going forward this initial Lean LaunchPad cohort at SynbiCITE will be the first of many. The course is the most important of all the innovation programs we are providing.
This will be the first time in the UK, scientists in the field of synthetic biology have being given the unique opportunity to learn how to become would-be entrepreneurs, by getting out of the lab, talking to potential customers and partners, and identifying what’s needed to turn science into commercial products.
Lessons Learned
The UK has established a national effort in Synthetic Biology
The Lean LaunchPad is being used to rapidly turn science into commercial products
Last week I got a call from Patrick an ex-student I hadn’t heard from for 8 years. He was now the CEO of a company and wanted to talk about what he admitted was a “first world” problem. Over breakfast he got me up to date on his life since school (two non-CEO roles in startups,) but he wanted to talk about his third startup – the one he and two co-founders had started.
“We’re at 70 people, and we’ll do $40 million in revenue this year and should get to cash flow breakeven this quarter. ” It sounded like he was living the dream. I was trying to figure out why we were meeting. But then he told me all about the tough decisions, pivots and firing his best friend he had to do to get to where he was. He had been through heck and back.
“I made it this far,” he said, ”and my board agreed they’d bet on me to take it to scale. I’m going to double my headcount in the next 3 quarters. The problem is where’s the playbook? There were plenty of books for what to do as a startup, and lots of advice of what to do if I was running a large public company, but there’s nothing that describes how to deal with the issues of growing a company. I feel like I’ve just driving without a roadmap. What should I be reading/doing?”
I explained to Patrick that startups go through a series of steps before they become a large company.
Search In this first step, the goal of a startup is to search for a repeatable and scalable business model. It typically takes multiple iterations and pivots to find product/market fit – the match between what you’re building and who will buy it.
You’ll realize you’re ready to exit the Search step when you have customer validation:
You’ve found a sales channel that matches how the customer wants to buy and the costs of using that channel are understood
Sales (and/or customer acquisition in a multi-sided market) becomes achievable by a sales force (or network effect or virality) without heroic efforts from the founders
Customer acquisition and activation are understood and Customer Acquisition Cost (CAC) and Life Time Value (LTV) can be estimated for the next 18 months
Startups in Search mode have little process and lots of “do what it takes.” Company size is typically less than 40 people and may have been funded with a seed round and/or Series A.
Most startups die here.
Build At about north of 40 people a company needs to change into one that can scale by growing customers/users/payers at a rate that allows the company to:
achieve positive cash flow (make more money than it spends) and/or
generate users at a rate that can be monetized…
Unfortunately as you hire more people, the casual, informal “do what it takes” culture, which worked so well at less than 40 people, becomes chaotic and less effective. Now the organization needs to put in place culture, training, product management, processes and procedures, (i.e. writing the HR manual, sales comp plan, expense reports, branding guidelines, etc.)
This Build phase typically begin with around 40 employees and will last to at least 175 and in some cases up to 700 employees. Venture-backed startups will often have a Series C or D or later rounds during this phase.
Grow In the Grow phase the company has achieved liquidity (an IPO, or has been bought or merged into a larger company event) and is growing by repeatable processes. The full suite of Key Performance Indicators (KPI’s) processes and procedures are in place.
Lucky you’re not the ex-CEO I pointed out to Patrick that he was in the middle of the transition from Search to Build. And I suggested that he was lucky to be encountering this problem as a 21st century startup rather than one a decade or two ago. In the past, when venture-funded startups told their investors they’d found a profitable business model, the first thing VC’s would do is to start looking for an “operating exec” – usually an MBA who would act as the designated “adult” and take over the transition from Search to Build. The belief then was that most founders couldn’t acquire the skills rapidly enough to steer the company through this phase. The good news is that VC firms are beginning to appreciate the value of keeping the founder in place.
I reminded Patrick that the reality is startups are inherently chaotic. As a founder he got the company to the Build phase because he was able to think creatively and independently since conditions on the ground changed so rapidly that the original well-thought-out business plan became irrelevant.
He managed chaos and uncertainty, and took action rather than waiting around for someone on his board to tell him what to do, and his decisions kept his company from dying.
Now Patrick would have to pivot himself and the company. In this Build phase he was going to have to focus on how to thoughtfully start instituting things he took for granted in the Search phase. He was going to have build into his organization training, hiring standards, sales processes and compensation programs, all the while engineering a culture that still emphasized the value of its people.
Patrick took a bunch of notes, and said, “You know when I figuring out how to search for a business model, I read the Startup Owners Manual and Business Model Generation, but where are the books for this phase? And come to think of it, in the Search phase, there are Incubators and Accelerators and even your Lean LaunchPad/I-Corps class, to give us practice. What resources are there for me to learn how to guide my company through the Build phase?”
Time to Make New Friends I realized Patrick just hit the nail on the head. As chaotic as the Search phase was in a startup, you were never alone. There was tons of advice and resources. But in the past, the Build phase was treated like a smaller version of a large company. Operating execs hired by investors used the tools they learned in business school or larger corporations.
I suggested it was time for Patrick to consider four things:
And potentially the most difficult, think about upgrading his board by transitioning out board members whose expertise was solely rooted in the Search
As we finished our coffees, Patrick said, “Thanks for the advice, though I wish someone had a methodology as simple as the Lean Startup for how to scale my company.”
Lessons Learned
Startups go from Search to Build to Scale
The Search to Build phase happens ~40 people
Very different management tools and techniques are needed to guide your company through this new phase
You need to reset your board and your peer advisers to people who know how to manage building a company versus starting one
K&S Ranch Publishing has an exciting opening for a Book Traffic Coordinator living near Stamford, Connecticut. We need someone who can help get our library of entrepreneurship books into the hands of the startup founders and students who rely on them.
Maybe it’s a position for you or someone you know?
It’s a great opportunity for someone detailed-oriented, and interested in startups and entrepreneurship.
We want you if you are:
Interested in making the numbers go up and not just writing them down
Adept with Excel, QuickBooks and Word (finance, accounting and bookkeeping experience a plus)
And can suggest how to use that data to make a difference in our business
Professional and terrific on the phone with clients and vendors
Web savvy
Able to do your job without standing around waiting for direction
Independently able understand and solve problems
The work environment is casual and fun, hours could be flexible, and you’ll earn your pay every day.
If this sounds like a job for you — or a friend or relative living in or near Stamford, Connecticut — send your resume to Terri S. Vanech at terri@kandsranch.com
Jon Sebastiani and his team came into the 2011 Berkeley Lean LaunchPad class with several key observations:
Snack foods were a large ~$35 billion but the moribund food category was starving for innovation and modernization
Meat snacks were a $2.5 billion subcategory of snacks. So there was plenty of data that proved that Americans loved to snack and loved meat snacks.
There was an opportunity for a new company “Jerky 2.0.” in the snack food market
Jon believed his competition was the conventional “Meat Guys” (the existing beef jerky companies.)
Jon’s big vision was to build a company that disrupted the meat snacks business. He believed that he could use the “go-to-market” strategies of other food/beverage disrupters– companies like Pete’s Brewing Company, Boston Beer and Kettle Chips. These new entrants disrupted their food categories by offering high quality proprietary recipes, outsourcing their manufacturing, and using their cash and resources on sales and marketing to build distribution and a differentiated brand. And Krave Jerky was going to be packaged, priced and positioned to be an everyday high quality snack experience – a “Mass Premium” positioning.
Get Out of the Building Jon and the team came in with all the assurance of a startup that thought they knew what they were doing. Unlike most of the other teams in the class, Krave was already up and running. In fact, by the start of class they had ~$750K in revenue for 2011 – not quite Facebook but a nice small business. But Jon had much bigger ambitions.
(For the teaching team this was our first opportunity to see if the Lean Startup process and this Lean LaunchPad class would work not just for new startups, but also for existing businesses, a test we would face years later teaching established Life Science companies rather than startups for the National Institutes of Health. The question was: Could we get these companies to pivot and learn when they already thought they had an existing business model?)
Their sales had given them some real data on three potential distribution channels: direct to consumer, brick and mortar retail, retailers. But they had minimal understanding of their target customer segment(s), and in the relentlessly direct nature of the class, we let them know it.
Rising to the occasion Jon and the team got out of the building and went to the Sonoma County Fair and Wine and other food festivals, and spoke to 50 customers. They ran 10 in-store demos, which got them talking to 100s of more customers.
Each week the team presented their findings to the class and teaching team. Take a look through the slides below and see how their business model evolved with feedback from customers, channels and partners.
They refined their branding, got a better handle on who their customers were, and in a real-time example for the rest of the class – had a full blown crisis. Krave’s original outsourced manufacturing partner decided to raise their price – to a point that Krave’s business model was no longer viable. The team demonstrated awesome agility and resilience as they scrambled to get a new manufacturing partner while continuing to do customer discovery and validation – and run their company.
What Do You Mean You Only Spoke to 1 Customer? One of the rules of the Lean LaunchPad class is: 10 customer interviews each week (in-person or video Skype) or you get told, “Sit down, you don’t get to present – presentations are only for the teams that did the work.”
In week 9 of the class, the Krave team stood up, looked the teaching team right in the eyes and said, “We only talked to 1 customer this week and we only have 1 slide to present. Let us just put up this one slide and then we’ll sit down.” It was a pretty gutsy request – so sure, put up your slide.
I was completely blown away with what was on the screen.
It was a check for $435,635 from a customer. And not just any customer; it was from one of the largest supermarket chains in the U.S. It was Krave’s first national stocking order.
Krave generated ~$35 million in net sales over the last 12 months.
Hershey plans to operate Krave as a standalone business within its Hershey North America division. Jon Sebastiani will continue to lead the business as President of Krave.
Congratulations to Jon Sebastiani for ignoring the rules!
Lessons Learned
The Lean LaunchPad class works for existing businesses as well as new startups
The only criteria is a willingness to accept that you may have to pivot – from the founders and investors
