“It’s really important to understand the distinction between what it is to build a business, and what it is to build a research program.”
SOSV GP and IndieBio CTO Pae W recently took the stage with Brian Heater at TechCrunch Early Stage to share her insights on how to turn research into a business—and why potential founders should consider leaving the “safety” of the academic nest.
“There are some sectors where it can work very well to have members of your founding team who remain in academia,” Wu explained. “We see this all the time in traditional biotech and pharma. But in other types of situations, it can become, frankly, a drag on the company and problematic for the founders who are full time. This is a very tough conversation that we have quite frequently with some of our committed academics: your stake in this company isn’t really aligned with your time commitment.”
“The majority of the time, the academic founder will come in and out and provide their sage wisdom to the full-time founders who have committed their lives and risked everything for this company. It starts to create challenges in getting the company to move forward. It creates interpersonal challenges as well for the founding team, because you have to be a special kind of saint to say, ‘I’m working 100 hours a week, I don’t make any money, and my whole financial future rests on the success of this company. And this guy keeps coming in to tell me some random thing that he read on the Harvard Business Review.’”
Wu went on to urge “recovering academics” to make the jump: “I feel strongly that your best bet is that, when you’re ready to go full time, just do it. Cut the cord. Stop being paid by the university and truly become an employee of your own business because your mindset will completely change.”
Wu also shared three questions that “recovering academics” building startups should ask to ensure they’re on the right track:
Do you need VC funding?
“There are plenty of other funding streams out there. The distinction between VC funding and other non-dilutive, or less-dilutive funding, is—simply put—the speed at which you want to operate. VC money is really great if you want to sprint.”
Which milestones are most important?
“While you need to have the science and the data—that’s table stakes. The real value-inflecting milestone is showing the world that you’re building a real business, a real product, with a plan to sell to customers.”
Do you really know your customer?
“Get to know the key opinion leaders in your market, and how your product impacts their business. Get your hands dirty, work alongside the community, and smoke out what drives your industry.”
