From land mine detection to natural and unnatural products!

The preliminary business pitches from the second Faculty Molecules to Market module (Sheffield, Level 2, FCP201), were as inspirational as always. I thought I would capture some of the general points that were apparent to all three of us on the assessment panel. (Specific comments for each presentation will be provided through MOLE). The first thing to comment on is the diversity of business ideas seems never to diminish! The application of synthetic biology to detect persistent landmines in war zones went hand in hand with products for personal care and healthy nutrition. 

I have some very general points that I think would be useful for all teams to consider. You all had the opportunity to use a single slide to convey a message. I don't think any group made the best use of this opportunity. Some were more appealing than others, but they were mostly superfluous or in some cases contained too much detail, so much so that they were a negative distraction and we couldn't see the wood for the trees! There are many different ways to utilise a single image, think of those advertisements that have made an impact with you. Alternatively, use a logo, or a particular image that encapsulates your product or business ethos. Capturing your business idea in a single image is undoubtedly challenging, but that is the whole point of the module!

At the foot of this post, Jorge has provided a long list of point that he suggests need some attention before your poster session. I am going to pick out a few points that encompass in some cases a number of his comments. Probably the most important one is the need to describe your business in an holistic way. What will you make, or what service will you provide? What is your market? What are the achievement milestones: founding, filing (if IP is a component), first sales, first profit, first million etc. Where will the business be located, will it employ 1,10,1000 staff etc. Will Sales and Marketing/PR be a key component, or will the initial priority be a competitive manufacturing strategy, in order that good margins are achieved even on low volume sales? Jorge uses the word road-map, made popular during the Bush administration in the USA, but a nice shorthand for describing the dynamics and vision of your business plan.

The other area for discussion that I would want to encourage amongst the teams, is the contribution of each member. There were examples of full team participation and other pitches largely delivered by a single person. Both are absolutely fine, however, both can go wrong. A single charismatic presenter works really well in business pitches, especially when the pitch is kept short and the other team members then step forward to deal with specific questions on say finance, marketing, technology etc. In contrast a single presenter who also answers all of the questions gives a sense that the remaining team members are either disengaged or have been sidelined. When a carefully choreographed, tag team presentation is given, it speaks positively about team work and preparation. On the other hand, when the positive and clear parts are punctuated by indecision as in the relay racing disasters you will have seen on TV: eg when the baton is not passed cleanly; then the audience gets restless and loses confidence in the team. Rehearse your pitch and choose the right style to suit the business model and the team.

Finally, the Q & A session. Jorge has identified some specific points, but I would draw your attention again to the overall impression that you should be trying to convey. Someone said should we lie (after all these are virtual companies)? The answer is you should provide a clear and plausible answer, which may not be entirely true, but is a reasoned and logical answer in the context of your proposal. If you really are floored by a question, then face it head on, own up and try to engage the audience with a related comment. Investors want to see cohesion and self confidence; they do not like complacency and arrogance. You must earn their respect, their trust and whilst there is always a level of risk in investing, they need to feel confident on the one hand that their money is in safe and responsible hands, but that you also have a certain capacity and appetite  for an adventure that will be needed to turn a good profit from the investment.

Before I go, I couldn't resist a comment about real time analysis. As the afternoon drew on, the audience's questions and challenges became increasingly well informed. I noticed that audience members were checking (via Google) the validity of statements and were obtaining verification of figures and competitive positions. I thought this was on the one hand a welcome level of additional challenge, but I want to caution against full on assault! Leave that until the final competitive phase of the course. This development will inevitably raise the bar of Molecules to Market and we need to be in the vanguard

Dave and Liz

Jorge's points

• IP position - needs to be defined
• Stage of development of the product - needs to be defined
• Specific market share they are after (dominate the market does not sound realistic or professional)
• Specific return to investors and time lines for it
• Roadmap of product development
• To the above add diversification to control risk and increase revenue sources
• Only consider clinical trials if proof off concept and validation has been completed
• If clinical trials are considered then cost needs to be known - crowd-funding unlikely to provide the necessary amounts
• State clearly (integrated into your road-map) - how much money do you need to achieve what by when
• State the team -direct and indirect- core team and functions, plus Board of Directors, Advisory Board as well as consultants and external collaborators and partners
• State the team clearly, do not rush through it or assign roles at the very last instant - no ambiguities
• Everyone in the team should have a good grasp of aspects not necessarily related to them e.g., the scientists need to know about budgets
• Where is the science undertaken - own premises (factor in costs of facilities, equipment, recruitment, overheads, ...), outsourcing versus in-house
• Include costs of process development and manufacturing (and distribution if appropriate)
• What are the sources for it all, e.g., raw materials, processed materials, equipment, human resources, business development, ...
• Science was generally good but gaps need to be covered not by challenging the audience (e.g., investors) but by having reflected on the past achievements, the present undertakings and the future needs - there is need for scientific replies (even if in lay terms) to scientific questions
• Competitor analysis needs to be rather solid (and presented!)
• The name of the company and its mission should be obvious
• Audio/visual tools should be used to the utmost impact - do not assume that the audience will work to understand it
• Stage skills by every single person in the team must be present, rehearsed, and put into play if necessary
• who will reply to what needs to be perfectly defined before the presentation - no hesitation
• If the pitch is only 2 minutes consider having a single presenter  
• Consider alternative scenarios (path to progress) to the ideal programme to mitigate the potential for failure
• Consider the costs of the product in relation to the cost of  production to determine net profit - e.g., antibodies are expensive to produce for many reasons
• Always have a punch line at the end such that the audience knows when the presentation is over, and make the "take-home message" clear
• Stay real, do not glorify the product beyond its real potential, more potential revenue is not necessarily more interesting to investors than less but more tangible revenue/goals
• pre-emptive addressing of delicate issues to remove opportunities of futile or damaging discussions, e.g., genetically modified organisms

Business Pitching: keep it as brief as this post!

The over-arching purpose of a business pitch is to persuade others that your idea and your proposal for bringing it to the market place is both robust and exciting. That is, you have persuaded the potential investor, partner, customer etc., that you have a financially viable proposal that is likely to be a success. You could be "pitching" an idea for a new app, a new drug, a new chocolate bar, a new filter for an exhaust pipe or a new way to cook food. Whatever forms the core of your business idea, if you want to win over the audience, there are some general "rules".

Be concise: keep the presentation to a minimum (this will vary from 60 seconds to maybe 15 minutes, depending on the situation). I think 3 slides is enough.

Show clarity: one speaker (or at least no more than 2, and the team can field questions), simple explanatory slides, key financial information (market size, market opportunity, product costs and an idea of margins)

Identify the competition:why your company and not Coca Cola?

Milestones should be transparent: £1m now, £100m in 5 years? £10 000 now, £100 000 in  1 year? £10m now, £ 10b in 10 years?

Risk assessment: what can go wrong and how to mitigate any such risks

Be passionate and avoid arrogance: everyone likes an enthusiast, few warm to arrogance

Respect your audience. Make no assumptions, other than they are always correct!                                                                                                   

This is by no means exhaustive, but should give you some idea, most of all obey the brevity rule! You will always make friends if you finish on time or early, and questions give the listener a good opportunity to get to know you further.

Good Luck tomorrow 

Productive Brainstorming

By now FCP201 students will be in the thick of it; developing ideas and business planning for your new "companies". One of the expressions commonly associated with the processes of problem solving and developing new ideas is brainstorming. The word was first suggested by an advertising executive Alex Osborn around 75 years ago. It grew out of Osborn's frustration with the slow level of change and creative thinking in his organisation. In 1948, he organised his thoughts on the barriers and vehicles for creative thinking and the value of group "brainstorming" in his book entitled: "Your Creative Power". The principle seems simple now. You bring together your team, you define the problem and you seek a collective solution. However, in my view brainstorming sessions can be both invigorating and can also be a disappointment. In the former, you leave a meeting with a real sense of achievement, optimism and a clear idea of what you need to do next. In the latter case, you may feel an initial high, but you soon realise that a key concept upon which your plans were made, was fundamentally flawed, or that a strategy was largely based on someone's desire to be positive in an uncritical way.

Structuring a brainstorming session is important to ensure that the primary aim is achieved, or at least tracked. The aims and objectives must be crystal clear at the outset, providing participants with a concise set of documents in advance where possible. I think it is useful to designate someone as IT manager as well as a minute taker. This ensures that ideas and suggestions are verified during the meeting and that a good record is kept of who said what and what was said.

An example of one of the most successful brainstorming meetings was at the centre of the film by Ron Howard, in which the catastrophic failure of systems on board Apollo 13 required a life saving solution from the NASA scientists and engineers, based on materials available on board the spacecraft. There was a strict time limit: CO2 levels would become life threatening within a fixed number of hours. There were limited resources: only the materials on board could be used to create the device required to do the job. The reconfiguration of existing equipment was required: the computer had to be saved for key processes, making manual calculations and control essential. Multi-disciplinarity was a key element of success: under such constraints not only resources, but different intellectual approaches proved to be invaluable. The session had a clear aim and a successful outcome. Think carefully when you meet to discuss your business ideas, remember time is perhaps the most valuable commodity in a business, or as Einstein said "Time is an illusion" so be effective when you meet!

Not all Businesses are "Mickey Mouse"

The term Mickey Mouse has become synonymous with shoddy goods. In fact in one dictionary a definition reads: "Substandard, poorly executed or organised. Amateurish". A little surprising perhaps for an iconic cartoon character that defines the Walt Disney Empire! A corporation employing nearly 200 000 staff worldwide. I wonder if the universality of Mickey Mouse combined with "his" screen persona as an imitated small rodent, speaks for the global impact of Disney Studios as a successful provider of animated caricatures rather than the inferior quality of the product! This Blog isn't meant to be comprehensive, but is intended to give you some food for thought in planning your business ideas and in particular addressing the issue of "long term resilience".

The "story" of the Walt Disney studios (which you can read about here and many books have been written) represents an interesting case study of the successful development of a major corporation which began as a start up first as a collaboration with cartoonist Ubbe Iwerks, with whom he founded  "Iwerks-Disney Commercial Artists" in 1920 and more successfully, in partnership with his brother Roy, they formed "Disney Brothers Studio" in 1923 in Hollywood, which was rapidly becoming the hub of the US film industry. Even before Disney Brothers was formed, Walt Disney was producing short animated cartoons, called "Laugh-o-Grams", in 1921. What strikes me about this is the choice of name, which might sound dated now, but nearly 100 years ago, I suspect was a brand name, way ahead of its time. Now let's just think of the technology changes from 1920 to 2015. The first cartoons were hand drawn onto a new material called celluloid (as all of you scientist will know, is a polymer of carbohydrate made by nitration of cellulose and camphor, originally). The number of hours required to produce draft sketches, story-boards and ultimately hand drawn and coloured frames on film, is equivalent to sequencing the human genome by manual methods (well that's the best analogy I could come up with!).

The need for highly skilled artists, the intensity of the work and the demands (to come) for more sophisticated animation, soundtracks that appeal to a mass audience, together with the transition from film shorts to full length feature films, represents an interesting study in managing business growth with a fixed technology. In fact hand drawn animation continued at the Disney studios until the 1960s (you must have all seen the Jungle Book!). But the transition from the exquisite quality of the early Disney productions to "photocopied" animations led to the company's 1960-1980 slump. In fact it wasn't until digital technologies were introduced that the fortunes were turned around. Partnerships with the small start up company Pixar, their subsequent acquisition and the recent acquisition of the Star Wars franchise from George Lucas has stabilised the Disney empire once again. (Did you know that Steve Jobs of Apple fame was a founder of Pixar!).

It would be interesting to look at a time line of employee numbers between 1923 and the present: however I believe that a team of around 10 individuals were at the creative heart of Disney with a massive infrastructure supporting production, distribution and of course....merchandising! 

It is worth just thinking a little longer about merchandising, since this has become the route for profit in many different businesses. Musicians sell very little in the way of hard copies of their music, concerts are prohibitively expensive to mount, music copyrighting can be lucrative for some, but merchandising gets the investors excited more than anything! So, in many ways, Disney started as an innovative company, grew through public demand, especially around the austere times after World War II, but by acquisition, technology switching and by embracing merchandising (think Disneyland!), the company is buoyant as ever today!

Reminder of the key principles of the M2M courses

I have chatted with staff running M2M modules at both Universities and the UTC and there is a recurring question. How do the "teams" move on to develop their Business Plan in the "real world"? This is not the intention at all, although if it can be arranged, this could be a desirable end-point, maybe for the best idea(s)? The concept of M2M was primarily in order to develop a greater awareness of enterprise and in the case of the courses in the Department of Molecular Biology and Biotechnology, Sheffield (and to a large extent at the Life Sciences UTC, Liverpool), in the area of Biotechnology. It isn't intended that the students validate a piece of Chemistry or Molecular Biology, since at both Institutions, this is covered in laboratory sessions. No, the aim is to dig deeper into aspects of business such as fund raising, employment, location and logistics, sales and marketing, competitor analysis etc. 

For example, we have a nice idea around home screening for infections. This involves the harnessing of monoclonal antibody technology and microfluidics. It isn't intended for a proof of concept pilot project in the lab, but rather an investigation of existing technologies and the cost of producing a more competitive (price or simplicity) product. This can be combined with exploring the cost of business set up, fund raising, structuring the business over 1, 3, 5 years etc. This will then lead to a more robust iteration of a business plan. I hope this helps clarify things! I have often thought though, that assessment of competing ideas could be rewarded by provision of resources to "give it a go"!

Company profiles and case studies

One of the tasks I regularly set for my Molecules to Market courses is for students at all levels to perform a short analysis of a company that has either failed or succeeded. This helps them gain an understanding of the forces that are at play in the commercial world. Some choices are predictable: Starbucks, Marks and Spencers, Amazon, Virgin etc. Some are more parochial, Pete's Pet Foods and Geoff's Surf Supplies. There is value in the analysis of all companies. I often think of a discussion I had with a group of PhD students about one of the lowest entry barrier startups: hand car washing. with a few pound coins to invest in a sponge, a bucket and some detergent, an afternoon of door-stepping (in the right area of town!), generally sees a return on investment and a move to profitability by the end of the first day.

It was during a discussion with (mainly) Masters Level Molecular Scientists recently, that we discussed the business model underlying Higher Education. Notwithstanding regulatory issues (accreditation and the investment in infrastructure etc.), the current funding model in the UK, where students can borrow £9 000 pa for course fees, together with a small annual maintenance loan, all repayable at an "affordable" rate post graduation. As a business model, the not-for-profit Universities must "earn" sufficient income from research, teaching and related activities to pay staff salaries, maintain buildings and provide appropriate levels of support (ICT etc). The net profits (minus a small allowable surplus) are re-invested in staff, buildings etc as approved by a board of governors or council. 

So far, an interesting subject, fairly simple revenue streams: undergraduate and postgraduate teaching etc., research council iand charitable income (less salaries and costs for supplies, services and instrumentation) and then less restricted income streams for consultancy work, services and professional training and conferences (not forgetting hospitality and accommodation for students on site). I then asked how many students enrolled into HE courses last year (2013): we agreed that the figure is around 500 000, across just over 100 institutions. Now think about the income from undergraduate teaching provision alone £(500, 000 x 10, 000)! I cant wait to see if anyone chooses to analyse the successes an failures! When they do, I'll report back!

Can co-ops still survive in the current socio-political climate?

One headline from the BBC today reads: 

"Co-op Group members approve sweeping reforms to board"

What is the background to this change to an organisation that has its foundations in working class, Victorian Rochdale over 130 years ago? And why is it important? The principle of shared ownership didn't feature highly outside of the retail sector in the UK, as Britain emerged from the challenges of World War II. However some organisations (John Lewis for example in the UK and New England Biolabs) have employee ownership or shared bonus schemes hard wired into their operations. In addition, many venture capital funded businesses use stock options as an incentive to senior employees and early stage recruits. The concept is very simple: if you own a stake in the company that employs you, you are more likely to contribute to its success. You should take a look at examples of companies and how they manage their employee remuneration and rewards. You might be interested in the history of Unilever (originally Lever Brothers) in this respect.

The Rochdale Pioneers

The Co-operative movement in the UK (and similar overseas organisations exist) is run through a large number of members (8 million in the UK alone), who take decisions ranging from the distribution of local funds to good causes, to management of the funeral service fleet for example. It is this structure that is perceived to have led to the current financial crisis at the Co-op. I wonder whether this model, which in my view combines elements of socialism, philanthropy and fair trade ideologies, is viable in today's world? Is it something that could work best in developing countries? Or is it a threat to those global corporates that operate on stretch sales targets for maximising economic growth, often at the expense of employee satisfaction. Read about the many ways that businesses can operate and decide what mode of governance you feel most comfortable with and how you feel it might impact on financial viability in the short and long term of your virtual business.