stacking the odds for success
DESCRIPTION
Obermeyer, Lunchtime speakerTRANSCRIPT
1 Institute for Regenerative Medicine
Stacking the Odds for Success:A Six-Stage Process to Articulate and Promote Your
Entrepreneurial Idea
Inspiration, Innovation, Celebration ConferenceJune 3, 2009
Jon Obermeyer, Director of External Education and Outreach
2 Institute for Regenerative Medicine
About the Institute
• One of the largest institutes globally for regenerative medicine
www.wfirm.org
• 180 researchers (faculty, post-docs, graduate students) led by Dr. Atala
• 23 countries represented in 10 research cores - 60,000 s.f. facility
• 30 academic collaborations, with joint institute in Kyungpook, Korea
• Co-lead with UPMC, Rutgers and Cleveland Clinic on $85 million, 39-member Armed Forces Institute for Regenerative Medicine (AFIRM)
• 22 different organs and tissues
• First in the world to successfully implant a laboratory-grown organ into humans (bladder)
• Discovered new type of stem cell in amniotic fluid and placenta
• Biomaterial innovation (electrospun scaffolds for vasculature)
• Enabling technologies (ink-jet printing of organs and tissues)
• More than 100 projects in the translational pipeline to treat patients
• Nine spin-off companies (MA and NC)
• Regenerative Medicine Foundation and Regenerative Medicine Alliance
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Entrepreneurial CV
• MFA 1985 – Creative Writing
• Banking: training manager, branch manager and commercial lender
• Economic development: high-growth focus
• Project manager for entrepreneur
• Owner and GM of exhibition services company
• Two investor-backed start-ups
Piedmont Triad Entrepreneurial Network
• Portfolio of 32 ventures: $650k in grants leveraged to $8.8 million
• PTEN Capital Connects! forum ventures: $35 million raised
• Network of attorneys, “angel” investors and venture fund executives
• Domains: medical devices, logistics technology, financial services, new media, nanotechnology/advanced materials, regenerative medicine
• In-depth consultations and assistance to an average of 40 start-up companies annually since 1989 (data set = 800+)
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Defining Entrepreneurship
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Entrepreneurship
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Entrepreneurs Learn on the Fly
Not exactly like the crosswind in the flight simulator….
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Entrepreneurs Without Borders
“There’s quite a bit we can learn from a company like Dell.”
– Dr. Steven Nichtberger, CEO, Tengion
CHILE BOLIVIA
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Elm Street Entrepreneur
A Tale of Pneumonia, Blue Gum Eucalyptus,
the 8th Largest Company in the World, Greensboro’s Center for Creative Leadership,
and Potential Cures for Diabetes, Cancer and CNS Disorders
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Solve a Problem, Leave a Legacy
1890’sWorldwide Pneumonia Outbreak
1891Greensboro pharmacist LunsfordRichardson formulates salve
1912Smith Richardson (son)rebrands compound as VapoRub®Company renamed Vick Chemical
1918 Flu epidemic revenue: $2.9 million
1950’s - 1960’sCold & Flu: Formula 44, NyQuil®
10 Institute for Regenerative Medicine
Solve a Problem, Leave a Legacy
1890’sWorldwide Pneumonia Outbreak
1891Greensboro pharmacist LunsfordRichardson formulates salve
1912Smith Richardson (son)rebrands compound as VapoRub®Company renamed Vick Chemical
1918 Flu epidemic revenue: $2.9 million
1950’s - 1960’sCold & Flu: Formula 44, NyQuil®
1985Vick Chemical Acquired by Procter & Gamble
P&G 2 Greensboro plants850 employees5th largest taxpayerSure, Secret, Crest, Old Spice
11 Institute for Regenerative Medicine
Solve a Problem, Leave a Legacy
1890’sWorldwide Pneumonia Outbreak
1891Greensboro pharmacist LunsfordRichardson formulates salve
1912Smith Richardson (son)rebrands compound as VapoRub®Company renamed Vick Chemical
1918 Flu epidemic revenue: $2.9 million
1950’s - 1960’sCold & Flu: Formula 44, NyQuil®
1985Vick Chemical Acquired by Procter & Gamble
P&G 2 Greensboro plants850 employees5th largest taxpayerSure, Secret, Crest, Old Spice
1970Smith RichardsonFoundation seedsCenter for CreativeLeadership
VapoRub® Multiplier- Vanguard Cellular(1999:$1.5B to AT&T)- TransTech Pharma- Buzz Off
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A Cast of Entrepreneurs
•Porter & Tate (retail drug store)
•Lunsford Richardson (Inventor)
•Smith Richardson (Marketing Genius)
Marketing Innovation: free samples, in-store displays, streetcar advertising, roadside signs
•Edward Mabry (Vick Chemical growth through R&D)
•Procter & Gamble (acquisition creates wealth)
• Richardson family (Center for Creative Leadership)
• Leeolou, Griffin, Preyer et. al. (Vanguard Cellular)
•Vanguard executives at TransTech Pharma, Buzz Off
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Return on Innovation (ROI)
Entrepreneurs Who Solve Large Problems Create: 1. New products and services2. New business models3. Entire industries
4. High-wage jobs 5. Jobs requiring minimum of an Associates degree 6. Transition for down-sized corporate executives7. Sophisticated supplier networks
8. Corporate Headquarters9. Churn, adaptive behaviors and a culture of risk10. Wealth and philanthropy
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WIFM
Well, that’s all very interesting Jon, but what does any of this have to do with me or my library?
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No Librarian Left Behind
Entrepreneurial Fluency Means a Place on the Bus
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Gown Embraces Town
Trustees are more than likely entrepreneurs or represent entrepreneurial interests
General Administration mandates (economic engines)
Bayh-Dole: Tech Transfer v. Tenure Track (profit or perish)
Chancellors, Provosts and Deans are creating entrepreneurial ecosystems on campus
Ph.D.s in Entrepreneurship are commanding the highest B-School salaries
With $ cutbacks, how else do you support enrollment growth, financial aid and development of new schools and programs?
= Ubiquitous entrepreneurship
= Comprehensive reach of libraries makes you ideal conveners of the disparate elements needed for innovation
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Cost and Time to Market
• Blockbuster Drug ($1.5 billion - 14.2 years)
• Class III Medical Device ($20 million – 5 years)
• Software Package ($7 million – 4 years)
• Class II Medical Device ($3 million – 3 years)
• Energy Drink ($1.2 million – 3 years)
• Daycare Center ($250,000 – 6 months)
• Hot Dog Stand ($15,000 – 60 days)
• Sole Proprietorship/Services ($0 – 1 day)
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The Entrepreneurial Process
Idea Commercialization Exit
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The Entrepreneurial Process
Idea
Proof of Concept
Commercialization Exit
CreateGoing
Concern
Remove Technical Risk
RemoveMarket Risk
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The Entrepreneurial Process
Idea
Proof of Concept
Seed Funding
Commercialization Exit
Initial Public
Offering
Acquisition
Profits
Debt and VentureFunding
Remove Technical Risk
RemoveMarket Risk
ROI ROI
CreateGoing
Concern
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80% Failure Rate for Start-Ups
Idea
Proof of Concept
Commercialization Exit
Remove Technical Risk
RemoveMarket Risk
alley of Death
alley of Death
CreateGoing
Concern
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The Steepest Slope of All
Idea
Proof of Concept
Commercialization Exit
Remove Technical Risk
RemoveMarket Risk
alley of Death
alley of DeathIncline of Inexperience
CreateGoing
Concern
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Focus on the Footings
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Six Steps
Problem
“Exit”
Team
Solution
“Product”
Funding
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1. Problem
• Elevator Pitch
• Articulate “Pain Point”
• Articulate Size of ProblemIncluding Growth Trends
• Cite Credible Sources
• Clear
• Concise
• Compelling
• Usually the weakest link
Problem
“Exit”
Team
Solution
“Product”
Funding
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2. Solution
• Strategic versus tactical
• Highlight benefits, not features• Saves Time
• Saves Money
• Convenience
• Peace of Mind
• Why is solution unique?
• Why is it worth investigation?
• Platform versus product
• Sets stage for details
Problem
“Exit”
Team
Solution
“Product”
Funding
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3. Product
• Easiest Part
• Details
• Technical Specs
• The “What”
• Scale and Scope
• Numbers and Stats
• Logical conclusion to problem-solution set-up
• Voted “Most likely to be modified”
Problem
“Exit”
Team
Solution
“Product”
Funding
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4. Team
• Build the Team• Functional Experience
• Domain Experience
• Initiative and Value-Add
• Political Considerations
• Succession
• Conduct Gap Analysis
• Add Outside Resources• Advisory Board
• Vendors
Problem
“Exit”
Team
Solution
“Product”
Funding
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5. Funding
• Entrepreneurs embrace risk
• Investors reduce risk
• Investors back solution-driventeams with vision and drive(jockeys versus horses)
• Create Pro Forma budget for three to five year period
• Ok to lose money (red numbers)if your exit is the payback
• Rule of Thumb: 2-3x what you think
Problem
“Exit”
Team
Solution
“Product”
Funding
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6. Exit
• Failure is a possible exit
• Look for salvage value
• Exits are a natural conclusionbecause problems are solved
• Exits create new opportunities
• Exits build credibility for futureprojects:• Investors return funds upstream
• Teams identify new problems
• Teams disband or disperse and re-form
• Successful team members become investors, philanthropists, advisors, teachers
Problem
“Exit”
Team
Solution
“Product”
Funding
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Six Steps = Six Paragraphs
Template for a one-page Executive Summary
Problem
“Exit”
Team
Solution
“Product”
Funding
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Thank you
Create the Special Place
We are all born entrepreneurial
Innovation is innate
Create conditions for serendipity and spontaneous discovery
Celebrate connections
Inspire the next generation