Stacking the Odds for Success: A Six-Stage Process to Articulate and Promote Your Entrepreneurial Idea--Obermeyer

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


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


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+)


Defining Entrepreneurship


Entrepreneurship


Entrepreneurs Learn on the Fly

Not exactly like the crosswind in the flight simulator….


Entrepreneurs Without Borders

“There’s quite a bit we can learn from a company like Dell.”

– Dr. Steven Nichtberger, CEO, Tengion

CHILE BOLIVIA


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


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








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


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


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


WIFM

Well, that’s all very interesting Jon, but what does any of this have to do with me or my library?


No Librarian Left Behind

Entrepreneurial Fluency Means a Place on the Bus


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


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)


The Entrepreneurial Process

Idea Commercialization Exit



Idea

Proof of Concept

Commercialization Exit

CreateGoing

Concern

Remove Technical Risk

RemoveMarket Risk



Idea

Proof of Concept

Seed Funding


Initial Public

Offering

Acquisition

Profits

Debt and VentureFunding


RemoveMarket Risk

ROI ROI

CreateGoing

Concern


80% Failure Rate for Start-Ups

Idea

Proof of Concept



RemoveMarket Risk

alley of Death

alley of Death

CreateGoing

Concern


The Steepest Slope of All

Idea

Proof of Concept



RemoveMarket Risk

alley of Death

alley of DeathIncline of Inexperience

CreateGoing

Concern


Focus on the Footings


Six Steps

Problem

“Exit”

Team

Solution

“Product”

Funding


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


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


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


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


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


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


Six Steps = Six Paragraphs

Template for a one-page Executive Summary

Problem

“Exit”

Team

Solution

“Product”

Funding


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