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. 

What price a new cure?

The recent announcement by NICE, the National Institute for Clinical Excellence to deny NHS patients access to the anticancer drug trastuzumab emtansine (called Kadcyla by the manufacturers, Roche) is a result of their cost benefit analysis. It is useful to consider not only the cost of drug discovery, development and clinical trials, but also the price a particular market (or health economy) will stand. The NHS in the UK is facing increasingly tough decisions on how to allocate its annual budget (of just under £100bn), especially when a single drug for a single patient, for one year is just under £100 000: clearly this is why prevention is their byword!  At the same time $800m (approx £480m) is the generally agreed cost of anti-cancer drug development. It is inevitable that some will feel that the NICE decision is harsh, but it has to be seen in the context of other priorities. It also has raises important issues for drug discovery management by the Pharmaceutical sector.

In an earlier Blog I discussed the challenge of making a profit from the sale of

paracetamol, this is the other end of the spectrum. The challenge here is to meet the demands of the UK population whose average lifespan is significantly higher than say that in a developing country (typically by 30 years!) and around 10-15 years more than in the UK when the NHS was established. How might you therefore persuade an investor to back your business plan to develop a new anticancer treatment given the economic climate in the UK and the even greater pressures on healthcare budgets in the majority of the developing countries? It is worth thinking about the cost of typical treatments and the difficulties faced by NICE alongside those facing the drug companies.

For example, a kidney transplant which lasts for about 10 years saves the NHS £24, 000 pa against the comparative cost of renal dialysis. The upfront transplant surgery costs and the post operative care are significantly lower than the annual costs (around £30 000) of renal dialysis. Importantly, this needs to be considered in the context of the 40 000 cases of renal failure diagnosed per year. And that's just one example. The amount spent per capita per year in the UK on health care works out at around £300. Clearly, the system we operate of redistributing tax revenues and National Insurance contributions is under extreme stress, both as a consequence of increasing life expectancy and probably also a result of a long period without a major conflict involving citizens! You will of course be aware of the influence of the last century's two World Wars, which were only separated by 21 years.

On the topic of conflict driven innovation, I am reminded that it is the centenary of the discovery of citrate as an anti clotting agent. A most timely intervention for the start of WWI and the important discoveries made on the biochemistry and physiology of haemoglobin, driven in part by the need to manage the high casualty levels resulting from trench warfare: in particular the valuable practice of blood transfusion. WWII by comparison, presented a major stimulus for antibiotic development on an affordable, large scale in order to combat field infections. Finally, having spent some time working at the Liverpool School of Tropical Medicine, I am still taken aback by the age of some of the drugs used to treat TB and malaria: TB combination therapies were developed 50 years ago and in the case of malaria, quinine based drugs remain in widespread use after nearly 100 years. However, the need for drugs to treat tropical diseases has probably been influenced significantly by our involvement in conflicts in the East illustrating once again that the drivers behind drug development are complex and often surprising! Hopefully, the intensive research efforts to produce artemesin at an affordable price will be successful and the influence of the Bill and Melinda Gates organisation will catalyse further developments.

I wanted to make you think about the economics of drug discovery when you are discussing your business plans. I firmly  believe that taking stock of historical influences and events can be informative. Now you have a think and discussion amongst yourselves about the government's decision to stockpile Tamiflu from around 2006-2010! 

From the hook-and-eye to velcro: does a new invention always displace the previous one?

I was listening to the Book of the Week on Radio 4, B is for Bauhaus, and I was taken with the history of the invention and patenting of the zip or zipper. It reminded me of how human invention and design is reflected in Nature. The hook-and-eye was major step forward in the clothing business, since it allowed a whole range of items to "stay up!". As clothing became increasingly sophisticated and those with sufficient money would buy and wear more and more individual items, the demand for secure fasteners also increased. However, which came first the hook-and-eye or the button. It is clear that ornamental buttons have been around for a couple of thousand years, but buttons and importantly, button holes developed before the hook-and-eye, which surprised me. 


The question I asked myself as the author began discussing the impact of the arrival of the zip fastener in its current form: did it ring the death knell for the button? (Moreover, did velcro seal the fate of the zipper?) Well yes the zipper did for trousers, but not for suit jackets (well not all). But more importantly, this is a story of niche businesses and the adjustments and the accommodations made by society (globally) to make way for a new invention that improves upon one idea in many ways.....but not all. What is the lesson from this story? Well as an undergraduate it was made very clear that all enzymes are proteins. However, in the mid 1980s, it emerged that certain RNA molecules possessed catalytic activity. Did this turn the world of Biochemistry upside down? No, it just made everyone rethink their fundamental assumptions and it became clear that catalytic RNA was not as effective in general terms as protein catalysts, but rather there are some aspects of bio-transformation that are best achieved by RNA enzymes. Moreover, maybe catalytic RNA preceded protein-based enzymes....

Today, you can by a box of hooks and eyes on E Bay just as easily as a box of buttons or zips. You can also expect to find a hook-and-eye in one or two places where you will never find a button or a zip. The point is you may have to adjust your business plan/model in order to survive, but this is where long term business planning and foresight management is important. Other examples would transport: ships, trains, planes....bicycles. They all co-exist and different opportunities exist in different markets. So include some thoughts on long term sustainability and think of examples of coexisting products and examples were an invention has been completely replaced (I immediately think of a product that goes together with a TV). 




And then of course there is velcro, and its biological mimic! 

Poster Preparation Tips

The poster is a tried and tested format for the presentation of scientific data at conferences. It is probably quite a recent development (it has been suggested it was first introduced at European scientific symposia as a means of dealing with language barriers). The earliest references to posters I have come across in the USA go back to the early 1970s. However, today, no scientific meeting would be the same without the animated poster sessions. A poster is often a useful vehicle for PhD students to "exhibit" their work to an audience of scientists, young and old, providing essential experience in communication skills and as a means of simply meeting the community of scientists in your chosen field of research. In recent years, the poster has become a means of enabling students to deliver all kinds of verbal "pitches" and as a focus for discussion as part of the assessment of a module or course.


When planning the design of your own poster, the rules are pretty simple; indeed the conference or class organiser often lays down the size of paper and font etc, in order to manage the display space and poster numbers. Your poster should be readable (from a reasonable standing distance), it should follow a systematic "path" (each text block and image should be in a clear order: use numbers if necessary). It should be appealing, use colour and striking images: I like the use of infographics as pioneered by the newspapers in weather forecasting: see the Economist and newspapers such as the Financial Times for examples. Here, you combine data with explanations in a way that makes the poster person-independent. In other words, when you walk away from your poster, anyone interested can get the"message" without you being there.

The poster session will provide you with the opportunity to "pitch" your ideas to members of staff as well as experienced entrepreneurs, who will be taking part in the evaluation. For the Molecules to Market Poster session, you should think about including the following sections:

1. Company name and names of members (Title)
2. Introduction/Company Mission
3. Description of your product or idea
4. Market and competition
5. Financial model
6. Milestones: from incorporation to exit
7. Why should we invest in you?

The poster size information is made available at the FCP201 Edmodo site (entitled Poster Template). The date and time for the poster session, which will be held in the Council Room on D floor of Firth Court is Wednesday afternoon, 7th May, 2014. There will be prizes for the best posters on display and the best presentation skills.