Tuesday, September 1, 2009

Science and Entrepreneurship: An Introduction

Which of these statements is true?
Science = Mmm . . . this frozen pizza sure tastes good. *Sigh.* Wish I could afford something else for dinner.
Science = I'm glad I spent a gagillion hours on that research project, just to put someone else's name on it. *Sigh.* I wish I were my own boss.
Science = A business opportunity to create high paying jobs, keep what you earn, and be your own boss.
The answer: All of the above. I reluctantly admit the first two are true, but let's focus on the last one. . .
Science = A business opportunity to create high paying jobs, keep what you earn, and be your own boss.
In other words,
Science = Entrepreneurship
By now, it’s clear that science has had some significant benefits on human health and well being. But have you thought about science as the starting point for new businesses? Because of my background in business and entrepreneurship, I decided to research the process of starting a science-related business. Over the course of a few posts, I’ll share some of my research findings with you. Consider this the first in our series on entrepreneurship. If you’ve ever thought about starting your own science-related business, listen up!

Over the next few posts, I’ll explain what exactly it is that an entrepreneur—someone that starts a new business—needs to start a new life sciences company. When you think of entrepreneur, think of William H. Gates III, the man we know as Bill Gates. (For those of us living on intern/student salary--or the comparable--this may not be something you want to hear: Mr. Gates is estimated to be worth $57 billion. And his net worth went down last year.)

Do you want to be in the same position as Mr. Gates? If so, you'll need to know what entrepreneurs and new businesses need to be successful. You'd probably also like to know what state and local governments can do to help new businesses get started.

Note: My project focuses specifically on life sciences businesses, but much of this will be relevant to any scientist who has discovered a great idea that they want to turn into a business. (‘Life sciences’ is the umbrella term for the pharmaceutical, biotechnology, medical devices and the agricultural/industrial biology industries.)

But first things first—what are the different ways you can start a life sciences business? Here are two common options.

First, you could create a new company. A good example of creating a new business is Medtronic. Sixty years ago, two relatives who were operating a medical device repair service realized that they could make improvements to the devices they were repairing. The relatives recognized an opportunity, and created a new company to fulfill a need.

Second, you could create a company out of research from a university or research center. ‘Spin-off’ is the term used to describe a new company that is created based upon research from a university, hospital, or research center. Think of this like a TV spin-off, for example. Create a hit TV show, like CSI, and then create a spin-off, CSI: Miami, for example.

Same applies to research (with some obvious technical differences, of course.) A researcher who discovers a brilliant idea literally takes that research and, with help, spins it off in to a business. Once the research becomes a business, the researcher becomes an entrepreneur.

To whet your appetite, here is a grossly oversimplified diagram that shows the steps to starting a spin-off.

Savor on this for a bit. In future posts in this series, I’ll explain more about the steps in this diagram, focusing on the steps that I think are most important—identifying new ideas from research and acquiring funding. Check back for the rest of this series!

This is Part 1 of 8 in our Entrepreneurship series.
Part 1 - Science and Entrepreneurship: An Introduction
Part 2 - It's All About the Ideas (and Money)
Part 3 - Financing a New Business in the Life Sciences
Part 4 - Leading Life Science States
Part 5 - Life Sciences in North Carolina
Part 6 - Life Sciences in Minnesota
Part 7 - Life Sciences in Kansas
Part 8 - Life Science Industry Overall

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