Stacking the Odds for Success

Institute for Regenerative
Stacking the Odds for Success:
A Six-Stage Process to Articulate and Promote Your
Entrepreneurial Idea
Inspiration, Innovation, Celebration Conference
June 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’s
Worldwide Pneumonia Outbreak
1891
Greensboro pharmacist Lunsford
Richardson formulates salve
1912
Smith Richardson (son)
rebrands compound as VapoRub®
Company renamed Vick Chemical
1918
Flu epidemic revenue: $2.9 million
1950’s - 1960’s
Cold & Flu: Formula 44, NyQuil®

1890’s
1891
1912
1918
1950’s - 1960’s
1985
Vick Chemical
Acquired by
Procter & Gamble
P&G
2 Greensboro plants
850 employees
5th
largest taxpayer
Sure, Secret, Crest,
Old Spice

1890’s
1891
1912
1918
1950’s - 1960’s
1985
Vick Chemical
Acquired by
Procter & Gamble
P&G
2 Greensboro plants
850 employees
5th
largest taxpayer
Sure, Secret, Crest,
Old Spice
1970
Smith Richardson
Foundation seeds
Center for Creative
Leadership
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 services
2. New business models
3. Entire industries
4. High-wage jobs
5. Jobs requiring minimum of an Associates degree
6. Transition for down-sized corporate executives
7. Sophisticated supplier networks
8. Corporate Headquarters
9. Churn, adaptive behaviors and a culture of risk
10. 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
Create
Going
Concern
Remove
Technical Risk
Remove
Market Risk

Idea
Proof of
Concept
Seed
Funding
Initial Public
Offering
Acquisition
Profits
Debt and
Venture
Funding
Remove
Technical Risk
Remove
Market Risk
ROI ROI
Create
Going
Concern

80% Failure Rate for Start-Ups
Idea
Proof of
Concept
Remove
Technical Risk
Remove
Market Risk
alley of Death
alley of Death
Create
Going
Concern

The Steepest Slope of All
Idea
Proof of
Concept
Remove
Technical Risk
Remove
Market Risk
alley of Death
alley of Death
Incline of Inexperience
Create
Going
Concern

Focus on the Footings

Six Steps
Problem
“Exit”
Team
Solution
“Product”
Funding

1. Problem
• Elevator Pitch
• Articulate “Pain Point”
• Articulate Size of Problem
Including 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-driven
teams 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 conclusion
because problems are solved
• Exits create new opportunities
• Exits build credibility for future
projects:
• 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

Stacking the Odds for Success

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