As you can imagine, with a company named Syzygy Teams, I spend a fair amount of time thinking about, talking about, and working with teams, startup teams in particular. So when a director of a technology commercialization group at a midwestern research university told me that one of her biggest challenges was convincing faculty founders that they needed a team, I said “What?!”
I’d been so hellbent on helping founders build effective teams that it hadn’t occurred to me that there was a whole segment of the science and engineering startup world that thinks a team is unnecessary.
Once I’d collected myself, though, I saw that it made perfect sense. The “currency” of academia, where I’ve also spent a fair amount of time, is ideas and technological breakthroughs. Being the first to identify a phenomenon or to demonstrate biological, chemical, or mechanical capabilities is the key to success in that world. Grants, fellowships, awards, and invitations to give the keynote address at prestigious events can all quickly follow the press release of the latest discovery.
And “team”? Well, that’s baked into the academic structure as well. Grad students and post-docs are a relatively cheap and reliable labor pool eager to work on the next great thing. This is all well and good for the science, but where “deep tech” innovations often get stalled is in the transition to the marketplace.
Biotech researchers with a breakthrough in an area already being investigated by one of the big players might find their innovation being scooped up quickly. Better yet if the research was already funded by one of these companies. If that’s your situation, you’re probably set. Just keep innovating and leave the commercialization to the corporate world.
IF, however, your innovation grew out of basic research funded through grants from the NSF, NIH, HHS, DOD, or other government agency, you will probably need a team to get investor support.
“I am fond of quoting that about 70% of my investment decision of an early-stage company is the team.”
Mark Suster, Upfront Ventures
This makes no sense! you say to yourself. I’ve got a breakthrough technology with a hundred potential uses. What’s wrong with these people?!
Investors are a risk averse lot – conservative gamblers, if you will. When they roll the dice, they often bet big, but only after performing painstaking due diligence to assess the risks and turning away when they detect a potential fatal flaw. Turns out, a solopreneur is considered a potential fatal flaw. Even a solopreneur professor with a small army of graduate students – or perhaps especially a solopreneur professor.
Why? What’s the risk? you might ask. The technology’s proven. The list of potential applications is huge. This should be a no-brainer!
Sound familiar?
As it turns out, an idea, even a technology proven in the laboratory or in the controlled environment of a “real world” simulation isn’t enough. Investors want to see a usable product that a representative client has paid money for, used in a real environment, and signs a Letter of Intent to buy more.
Figuring out how to build the technology at scale is just the first of the challenges on that journey.
- Modifications to the technology to make it reliable under a wide range of conditions, and at a cost customers will be willing to pay are some of the technical challenges.
- Finding potential customers, explaining the groundbreaking technology to them in terms they can understand and appreciate, convincing them to run a pilot, and being able to address any unexpected consequences.
- Learning about the procurement process in the focal industry could be a Masters’ thesis! Even if all your target clients are in healthcare, let’s say hospitals, the process at an academic medical center will be different than at a community hospital which will be different than to a regional or national health system. Selling to physicians? To Ambulatory Surgery Centers (ASCs)? To Accountable Care Organizations (ACOs)? Each is a difference process with unique hurdles.
- And then there’s the whole regulatory approval process – FDA, FTC, FCC and others, depending on the nature of the technology – and the ongoing documentation and reporting required to stay in compliance once approval is won.
Any one of these can stop a company in its tracks if they don’t have the necessary expertise. Investors know that it is unrealistic to expect any one person to know how to do all of these things, much less to manage them well. Plus, it’s just a lot of work!
“Having the right team determines the path and outcome of a new venture more than any decision in the lifecycle of a company.”
Bernd Schoner, author of The Tech Entrepreneur’s Survival Guide
Investors want to see a team of leaders with complementary expertise – science, business, compliance – who can work together to resolve the challenges that are bound to emerge. (see “Capabilities” in an earlier post Building a Fundable Startup Team: The Right People)
Other risks include something happening to the solopreneur – an illness or accident that keeps them from moving forward with the product – or the possibility of a current or former graduate student creating a next-gen version of the product. The list goes on.
This represents my experience. I’m curious about what you think. Under what conditions might building a team NOT be a good idea? If you are an investor, would you invest in a solopreneur without some semblance of a team – or at least a plan to build one?
