This article discusses four "laws of entrepreneurship" based on interviews with successful entrepreneurs. The first law is to network extensively to build valuable professional connections. The second law is to pursue your passions rather than just focusing on making money. The third law is to tweak or adapt your degree to better suit your career goals and first job. The fourth law emphasizes gaining relevant industry experience before launching your own startup in order to avoid overconfidence from living in a sheltered university environment.

2. Letter from the Editor-In-Chief
Welcome to the second issue of JayStreet. This journal is
entirely the product of an advanced entrepreneurship and
communications class offered by the Center for Leadership
Education (CLE), part of the Whiting School of Engineering. In
September 2009, thirteen students from a variety of majors on
the Homewood campus enrolled in the workshop, some flirting
with the notion of starting a business someday, others drawn to
the opportunity to write, design and produce a magazine and
still others who wanted to meet people who had turned ideas
into successful enterprises. Over the course of the semester,
these students formed teams, interviewed and worked with en-
trepreneurs, absorbed business principles, created covers and
layouts, wrote draft after draft, and edited each other’s work.
Very simply, they fully engaged in the process. The articles, in-
terviews and graphics in this Journal represent their take on the
bustling intersection of science and entrepreneurship.
This journal would not have been possible without the sup-
port of the Center for Leadership Education and the Develop-
ment and Alumni Relations Office of the Whiting School. In
particular, I want to thank Robert Spiller, Associate Dean for
Development, and Development Coordinator Mike Blow for
identifying several of the entrepreneurs who worked with us
all semester. We owe special thanks, as well, to Montserrat
Capdevila, former President of the Hopkins Biotech Network,
who generously volunteered her time, expertise and talents to
us, recruiting speakers, creating our website (www.hopkinsjay-
street.com) and providing expert advice in too many areas to
enumerate. Niki Buchholz, our tireless Course Assistant, de-
serves special thanks, too, for being there for all of us, keeping
the classroom technology – and the copier – always going. Fi-
nally, I would like to thank the entrepreneurs themselves, who
generously gave their time, energy, insight and guidance to me
and to all the students enrolled in Creating JayStreet.
Read, think and engage with us.
Pamela H. Sheff, Ph.D.
Lecturer, Professional Communications Program
Center for Leadership Education
2 Fall 2009

3. CONTENTS
Do You Have What it Takes?
By Stephen Sihelnik, page 6
Business School: Who Needs It
By Ilya Subkhankulov, page 10
Anatomy of a Dealmaker
By Brett Schwartz, page 12
Running a Business of Running
By Dory Giannos & Brett Schwartz, page 15
The Idea Behind Entrepreneurial Thinking
By Kyle Halleran, page 16
Staying on Top: Innovating to Remain Profitable
Doing Business in the 21st Century
By Andrew Pevsner, page 4
A World Without Google
By Elizabeth Lenrow, page 26
Social Networks: Are they Becoming a Nuisance?
By Chelsea Gonzalez, page 29
Academia: Cultivating More than Intellectuals
By Alex Qian, page 39
Guanxi & Entrepreneurship in China
Biotech- Beyond Biology and Technology
By Dory Giannos & Jose Deschamps, page 19
Planting the Seed for Biotech
By Jose Deschamps, page 23
Maturing Biotech Davids & Struggling Pharmaceutical Goliaths
By Sean Hennessey & James Teta, page 32
What is Biotechnology & Why Does it Matter?
By Michael Brooks, page 34
BME Design Team: Cultivating the Next Generation of Biotech Entrepreneurs
JayStreet Journal 3

4. A World Without
Google
The Untold Story of Conquest Software
By Andrew Pevsner
It is difficult to believe that in just a keyword search, while ConQuest’s source of Google’s competitive ad-
ten years, Google has grown from a engine was concept-based. vantage over other keyword-based
Palo Alto basement to an irreplace- As the name implies, keyword engines. But even Google cannot
able destination for millions of Inter- searches simply attempt to match a beat concept-based engines when it
net users every day. Google has come given word to either the content or comes to searching ability.
to dominate nearly every sector of title of a website. Engines then in- Concept-based search engines use
web usage and has become such a dex the results; how well they do so algorithms built around artificial in-
strong influence on everyday life that determines their success level. The telligence theory to mimic human
it was added to the Oxford English relatively simplistic nature of this thought processes, searching for
Dictionary in 2006. Its unprec- underlying meaning in keywords
edented growth, hip image, and rather than simply identify-
unparalleled success have given ing similarities. The software is
Google an iconic, rock-star status so complex that it works in es-
among companies in all indus- sentially the same way that any
tries. It is one of the coolest and translator does. There is just one
most influential corporations small difference—its translation
in the world, and arguably the most matching process forces users, rath- enables communication between hu-
highly sought after employer in the er than the search engine, to find the man language and computer code.
United States. But what if it had nev- precise words that will deliver the For users who want to search through
er existed? most relevant results. anything electronic, whether it’s a
Before Google Founders Larry Page Page and Brinn turned a small in- local collection of files or the entire
and Sergey Brinn had even met, Ed- novation into multi-billion dollar Internet, an effective concept-based
win Addison was running ConQuest, fortunes by providing Internet us- search yields much more highly tar-
a search engine company based on ers with the best available keyword- geted results than even the best key-
artificial intelligence that earned based search engine on the web. word searches.
Addison “Entrepreneur of the Year” Their brilliance was not in creating a But if concept-driven searching is
honors in 1994 from the Information new way to match words to sites, but so much better, why do we tell our
Industry Association. Like Google, in developing an innovative and su- friends to google something when
ConQuest’s success was predicated perior method of indexing and rank- we want information, instead asking
on search innovation. However, the ing the results returned during the them to “ConQuest it?”
two search engines worked in com- matching process. This complex and Ed Addison founded ConQuest in
pletely different ways: Google uses mostly secret ranking system is the the late 1980’s, when the Internet’s
4 Fall 2009

5. commercial power was just begin- ously consider: a very lucrative offer Addison was solely a business deci-
ning to be realized. By the mid-90’s to sell the company to Excalibur, a sion. An Internet search engine was
the economy was beginning to grow firm specializing in multimedia re- an exciting and tempting new fron-
at an increasing rate but the Inter- trieval software. tier with the potential to net billions
net was still in its infancy. In 1995, While many thought the Internet of dollars. But it was also the costli-
Addison was running est and riskiest option, and
a successful software carried an equal potential to
company in a healthy destroy the company.
How Do We Search?
economy. His concept- After thoughtful delibera-
driven searching soft- tion, Addison and his man-
Keyword Based
ware, designed using agement team decided that
Matches search words to websites
complex algorithms and putting ConQuest online was
Returns hits based on exact word matching
artificial intelligence, too risky; the time it would
Ranks sites based on levels of similarities
boasted capabilities take to net the additional
never before seen. He Match what search words are ‘‘about’’ with websites capital required would have
Concept Based
had created large barri- Returns hits based on theme or subject of your search given keyword based search
ers to entry for potential engine companies too big
competitors and was of a head start in acquiring
Ranks based on relevance to underlying meaning
facing a market on the market share and establish-
verge of exploding. On the surface, was the next frontier, taking Con- ing brand name. He decided to sell
the future appeared to hold nothing Quest online was a risky proposition ConQuest and was rewarded hand-
but smooth sailing. In reality, Addi- that would require millions of dollars somely for his work. The battle be-
son faced a difficult crossroads that in additional capital. Concept-based tween keyword and concept search-
had the potential to drastically alter searches do yield better results. But es, Google and ConQuest, was not to
the path of the entire technology in- better results require better algo- be. In all likelihood Addison made
dustry. rithms, which are more difficult and the right business decision. But his
If ConQuest was going to become a expensive to create and maintain. story does leave room for the ques-
dominating force in the industry, the More importantly, concept-based tion: what if?
natural next step was to take its tech- searching requires the use of expo-
nology online and reach the millions nentially more data.
of potential users that the Internet Storing and analyzing this data
provided. But this is easier said than requires larger and more powerful
done, and Addison had several fac- servers. More servers mean more
tors to consider. His company was money. To paint a picture, some es-
Thoughts For the
doing very well with several large timate that Google’s 450,000 servers Concept-based search-
Future:
clients, and would likely continue to run up monthly bills of over $2 mil- ing is currently dormant
flourish selling software directly to lion in electricity charges alone. Add but may not be dead. As
customers. Launching an Internet initial hardware and other mainte- computing costs con-
search engine would require an en- nance costs, and Google’s costs range tinue to come down,
tirely new and foreign business mod- in the tens to hundreds of millions concept-based engines
el, the likes of which did not exist at of dollars annually. And remember, may be able to compete
the time. Google’s model, which was keyword software like Google’s de-
created by first attracting as many us- mands far less computing power than
ers as possible and then figuring out ConQuest’s software would have.
with keyword search-
how to make money, violates nearly It is easy to forget that corpora- is currently in the midst
es. Ironically, Google
every historically standard rule of tions are built and run by human be- of internal research
business and has succeeded only be- ings who have to make decisions just revolving around solar
cause of incredible innovation and like everyone else. While technology technology that could
pioneering. There was also a final might have dictated that ConQuest go bring down computing
option that Addison also had to seri- online, the decision that confronted costs by as much as 60%.
JayStreet Journal 5

6. Business
school
Who needs it?
I’ll tell you who.
By Stephen Sihelnik
What next? As a budding entrepreneur, you should (hopefully) be finishing up university and looking
towards the future. As you think about what you’ll be doing next, you keep hearing those magic two words
ring out in your head. You know, the two words that make everything better: business school. Sure, you need
a little work experience before you head off to business school, but after that, you’re set, right? Right?
“Wait a minute.” That’s the response I’d get from some of the entrepreneurs I’ve met with. In their eyes,
the business school route is only one of the many paths you could take to get your business education. Heck,
even some professors at MIT might not think that business school is the way to go. Andrew Lo, of MIT’s
Sloan School of Management, is fond of pointing out that in the physical sciences, three laws can explain
99% of behavior, whereas in finance 99 laws can explain at best 3% of behavior1. Is all that education—and
money—really only worth 3% of your time?
Professor Lo commented on finance—what would he have to say about the laws of Entrepreneurship? If
Entrepreneurship had 100 laws, could these laws explain any of its behavior? Would learning those laws
even be a benefit? The fact is that many, if not all entrepreneurs consider education to be a great thing;
however, being in the correct mindset while you are at business school makes the difference between a
scrap of paper and a true pedigree that you can be proud of. I talked with several entrepreneurs about what
it takes to start your own business. Using Professor Lo’s idea, I molded their advice to explain some of the
laws of entrepreneurship.
6 Fall 2009

7. Law One: Network, Network, Network.
Mike Huerta, Johns Hopkins ’06, Applied Math & Statistics, is co-founder of the solar enterprise
start-up BrightPath Energy. BrightPath Energy integrates the renewable energy of solar power into struc-
tures that are in their construction phase. Huerta noted that the level of rigor and discipline required at
university prepared him for his job at Lehman Brothers right out of school, “After a certain level of intelli-
NETWORK
gence, networking becomes pretty important. Constantly meeting people and making new relationships is
key, no matter if they are with a professor, an associate at a private equity firm, or a fellow undergraduate.”
Huerta began looking at the renewable energy space when Lehman Brothers started to go under. Utilizing
his contacts through family and work, he was able to found BrightPath Energy. In fact, one of the colleagues
that sat next to him at Lehman became the other co-founder of BrightPath Energy. Do yourself a favor and
ask for a rolodex for Christmas.
Law Two: Don’t be one-sided. Do what you love.
Of course, networking isn’t everything that university or business school is about. Who could forget the
classes? Edwin Addison, who received his Masters in Biomedical Engineering and his Ph.D in Computer
Science from Johns Hopkins, is the founder of TeraDisc, a high performance modeling and simulation ap-
plication. After earning his Ph.D, Addison started teaching at Johns Hopkins as a doctoral fellow. Addison
met a bright grad student in one the programming classes he was teaching. He found out just how bright he
PASSION
was when he “took a 100 line coding assignment and turned it into a 5,000 line project—and finished it in
the time it was assigned.” Addison realized the potential this student held, and reached out to the student
to work on a project that Addison had in the back of his mind. This project turned into ConQuest, a concept-
based search engine (opposed to Google’s keyword based one). Addison successfully exited from ConQuest
and proceeded to found Powerize.com, another search engine. Again, he exited successfully, this time just
before the bursting of the dot-com bubble. After this exit, Addison decided to help launch TeraDisc, a high
performance modeler and simulator venture. Addison stated, “For budding entrepreneurs, find and study
something that you are passionate about, not something that you think will make you money. Do things so
you can become a better person-not for the resume, but for yourself. You want to be a well-rounded person
coming out of school.”
Law Three: Tweak the degree, and yourself.
During finals week, it’s easy to forget that there’s another world out there. Unfortunately, sometimes
what we are studying may not totally translate to your first job or venture after you graduate. Raul Me-
drano is currently taking classes part-time in the Johns Hopkins University Carey School of Business MBA
Program as well as working as a business development specialist for the Montgomery County Department
of Economic Development (DED). He has over 15 years of experience in the business development, project
management, and sales and marketing fields. Medrano has much to say on the translation of your degree
to your future job or business.
TWEAK
“In professional life, there is always tweaking. You have to in order to succeed. The college degree is not
an automatic recipe for success; it helps prepare you, but ultimately it’s what you, the individual with your
personal life, academic, and work experiences, bring to the table.”
Law Four: Experience before Entrepreneurship.
Addison also noted that entrepreneurs shouldn’t rush to start a venture right after school: “don’t just
jump in [a venture] without having experience in the industry you have a passion for. Find a job in that in-
JayStreet Journal 7

8. dustry, and work your way along the career path towards that start-up you want to create.” Students often
forget that they have been living in a sheltered environment for the past 4 years, which sometimes leads
to a false sense of security. Chris Parker is the founder of Applied Imagery, which uses technology created
at the Johns Hopkins Applied Physics Laboratory to produce 3-D visualization and exploitation software.
Parker’s electrical engineering degree was a strong attractor for those hiring him straight out of school. He
landed a position in sales, and has progressed phenomenally since. “Usually, positions that are offered to
those coming out of undergraduate require knowledge from university classes, but from then on, your skill
EXPERIENCE
sets progress with your job experiences.” He stressed, “part of my success with Applied Imagery stems
from past jobs that taught me lessons and new skill sets that are applicable to my current position.” Parker
also noted: “Entrepreneurial aspects, the ‘soft skills’, cannot be learned in the classroom-you’d be fooling
yourself if you thought they could.” This would also apply to business school—however, in most cases,
people have had work experience before going back to school for their MBA. Medrano urges those in school
to “apply for internships [paid or unpaid], shadowing the CEO, VP of Marketing/Business Development,
and so on for various companies.”
Law Five: Surround yourself with advisors.
Mike Ionescu, Johns Hopkins ‘06, Writing Seminars, took a path towards a venture that few decide to take.
Ionescu originally was turned on to business by talking classes with Professor Aronhime, who teaches In-
troduction to Business in the Center for Leadership Education. After entering business plan competitions
every year from his sophomore year on, he realized that one of his business plans could actually become
the basis for Ionescu Technologies. Instead of going to work for someone straight out of university after
graduation, Mike took the path less traveled and founded Ionescu Technologies. Ionescu Technologies is
ADVICE
an interactive marketing company that puts information in front of users through touch screen kiosks.
“Constantly surround yourself with advisors”, said Mike. “They are a great sounding board that you can
bounce ideas off of, at any time.” Advisors are there to help you through critical evaluation, and the more
you have, the better. By finding advisors from different fields, you can have different experts from all areas
of the world of business (or other fields, such as academics) expose the strengths and weakness of your
own ideas. I wasn’t kidding about asking for a rolodex.
Law Six: Read.
I know, I know—what an anticlimactic law. But as anticlimactic as it is, reading is even more important
to determining the success of an entrepreneur. Medrano advises, “Start reading books in self-improvement
and entrepreneurship, as well as biographies of success people in life in general. There are common char-
acteristic traits among successful business people and that is what each person needs to discover on their
personal journey.” Biographies may just seem like a colorful way to pass the time, but the more you read
about the Andrew Carnegies and the John D. Rockefellers of the world, the more you will see what traits it
really takes to become a successful entrepreneur.
READ
So there we have it. Those still in university now have a couple of laws to live by—as do those who are
gearing up for Business school. Let’s try and answer our original question. Is Business school worth it?
Most people agree that a university creates a doorway to vast opportunities in the real world, and to step
through that doorway, nine times out of ten you need to receive that degree. But what about Business
school? Your MBA can be useful, but it depends on your own perseverance and ability to do more than just
“go through the motions.” Use some of the laws of entrepreneurship to enhance your education on all lev-
els. All that leaves is this: Are you up to the challenge?
8 Fall 2009

9. How Much I$ That MBA?
By Stephen Sihelnik
Even though getting a Business are now five schools where the $100,000 may justify this short-
school education does not neces- total cost of an MBA is well over term cost (a mighty one, at that)
sarily mean “Pass go, as a long-term benefit1.
collect a large signing While many salivate over
bonus, proceed di- the long-term compensa-
rectly to financial ser- tion benefits that come
vices,” 30% of Harvard with procuring a top-tier
Business school gradu- MBA, a certain class of
ates did just that after bold, brazen warriors
graduation in 20061. scoff at the idea of a base
So what are Business salary or job security. I’m
school Graduates get- talking about the entre-
ting out of their educa- preneurs of the world. If
tion? those who attend business
We certainly know school plan on forming
what they are putting their own business—the
in. Pricing has become
If you want to join these Harvard Business School 2% “other” category for
a very controversial HBS’s graduating class
grads, you might need a few loans.
issue—we’ve entered of 20062—can they really
the era of the $100,000 justify going to business
degree. There are places where $100,000—three times over, school?
getting an MBA—nothing more in fact. Wharton ($320,000),
than tuition and required fees— Harvard ($308,300), Chicago
is hitting the six-figure area. Har- ($305,965), Stanford ($302,664), 1: http://www.nytimes.
vard Business school ($101,660) and Columbia ($301,178) can pat ness/yourmoney/11harvard.
com/2006/06/11/busi-
and Wharton ($100,860) are two each other on their respective html?pagewanted=3&_r=2
of the characters on that exclu- backs for making that list2,3. If 2:http://www.businessweek.com/
sive list, with Duke ($99,906) money was the only factor in- bschools/blogs/mba_admissions/
dying to get in2. But it’s fool- volved in deciding whether or archives/2008/10/business_school_2.
ish to think that just tuition and not you should pursue an MBA,
html
3:Estimates based on 2 year MBA with
required fees make up the pric- short-term costs might put many forgone salary of $100,000/year.
ing for an MBA. You still have to people off from attending. But 4: picture courtesy of
add in the cost of living, as well those who follow that reasoning http://images.google.com/
as the opportunity cost of hav- fail to see the bigger picture—in imgres?imgurl=http://
ing to forgo your salary to attend compensation, at least. For HBS
cache.daylife.com/
Business school. With these graduates, a median base salary
significant factors added in, there in a first job after graduation of
JayStreet Journal 9

10. Anatomy of a
Dealmaker
By Ilya Subkhankulov
Peter Boneparth, former CEO of to Jones Apparel, allowing the lat- sharply with the typical Seventh
Jones Apparel Group, an American ter company to diversify to the Avenue fashion experts. His expe-
designer, marketer and wholesal- middle market and thus a larger rience centered on bringing fash-
er of branded apparel, is a deal- customer base. Appointed as CEO ion companies public, not catering
maker. After spend- to consum-
ing years as a prime ers. After
time lawyer at a ma- meeting
jor Manhattan firm Boneparth,
and an investment it is easy to
banker at mid-size see why:
Mabon Nugent, he his manner-
took the reins at Mc- isms and
Naughton Apparel speech are
Group (then called gracious yet
Norton McNaugh- blunt and
ton). By his own unadorned.
measure, this was a As a leader,
risky move at best, Boneparth
but nonetheless a made dif-
risk he was willing ficult deci-
to take. He explained sions un-
to me that under- waveringly.
standing your own He hired
Barney’s New York was Boneparth’s big time acquisition for
risk profile is key to and fired
Jones Apparel Group
planning your career. Jones’ retail
In his case, leaving division chief
a successful management posi- of Jones one year later, Boneparth Heather Pech because she failed
tion in investment banking was a saw himself as part of a plan to to hit revenue targets. During
change he felt comfortable with. further expand Jones’ brand port- conference calls, sales figures and
After two years as president of folio and adapt to changing mar- forecasts were delivered frankly
McNaughton, Boneparth orches- ket conditions. A professional and straightforwardly.
trated a deal to sell the company manager, Boneparth contrasted At the time, the fashion indus-
10 Fall 2009

11. try, dominated by big names such small as Jones rarely stands up to York, a luxury retailer. Jones’ back-
as Polo Ralph Lauren, had begun a celebrity designer powerhouses end logistics and excess capital
paradigm shift in the way clothes like Ralph Lauren. This experi- would help Barney’s expand and
are designed, marketed and pur- bring products to market faster.
chased. Department stores, key Barneys seemed out of place in
to Jones’ business model, suf- Jones’ mid-price brand portfolio,
fered as consumer culture moved but Boneparth held firm; he be-
away from brand names towards lieved in the brand, the manage-
consumer-centric stores such as ment and its growth potential.
Target and the Gap. Thus, rela- While the Barney’s deal met criti-
tively small firms such as Jones cism from industry players and
and Liz Claiborne began acquiring the press, it turned out to be an
brands to expand their customer. excellent investment for Jones,
A licensing partnership with Polo returning $937 MM on an invest-
Ralph Lauren enabled Jones to ment of just $400 MM.
sell clothes under the Polo brand. Despite this success, Boneparth
The eight year partnership was and Jones parted ways abruptly in
very lucrative for both firms, but 2007 after six years at the post.
in 2003 sales fell, reflecting a de- With department stores selling
cline in department store sales. their own apparel lines, thereby
Through a clause in the contract, decreasing supplier’s customer
Polo played hardball with Jones: base, Jones’ Board of Directors
double our royalty fees or we take disagreed with Boneparth and or-
back our brand. After negotiations chestrated his exit after he failed
and concessions on both sides, the to sell Jones at a good price to pri-
parties agreed to close operations vate equity firms.
in 2004 and Polo would buy back Peter Boneparth spent his time
Polo Jeans. at Jones developing its brand
A major snag arose when value, making deals and cutting
Boneparth learned that the sale costs. His performance was affect-
would yield unsustainable tax ed by many externalities; judg-
consequences for Jones. Meet- ment was very harsh and very
ing with Polo executives in their public. But his experience helped
conference room, he wanted new solidify his retail expertise and he
terms for the agreement. Polo is now a Senior Advisor at Irving
executives refused. After a short Place Capital Partners, a private
recess, Mr. Boneparth announced equity firm, and specializes in the
that “We just sued you.” Polo retail sector. He now concentrates
Peter Boneparth
countersued two hours later. ence helped shift Boneparth’s solely on private equity deals that
Jones immediately cut production game plan out of licensing deals call upon knowledge acquired
on the Lauren line and began a and towards acquisitions. Many throughout his diverse career in
competing Jones Signature. Com- designers can benefit from sup- the apparel industry.
petition quickly ensued. pliers’ superior logistical backend
The sleepy apparel industry is that support hundreds of stores.
Barney’s Picture courtesy of
rarely subjected to this side of Soon after, Boneparth devised Designscene.net
corporate drama. A supplier as a deal to acquire Barney’s New
JayStreet Journal 11

12. On Your Mark, Get Set,
Running A Business of Running
Go!
By Brett Schwartz
Running a marathon is one of the most grueling and challenging experiences a person can put him or
herself through. Starting a business is roughly akin to running a marathon. Kevin Callahan, an avid mara-
thoner and a 1999 graduate from Johns Hopkins, is the creator of the product system, Map My Run. John L.
Parker, author of several running books, describes the sport of running with great detail. Parker’s insights
provide a prism on the intricacies of entrepreneurship as an endurance run.
Pre-Race Training: “In Distance running, courage isn’t merely a helpful trait or a har-
binger for success; IT IS THE PRICE OF ADMISSION.”
Kevin Callahan graduated from Johns Hopkins with a degree in Mechanical engineering. With aspirations
to be a rocket scientist, Callahan hoped he could work for an aerospace startup. He always wanted to be an
inventor as a kid, which led him down the path of entrepreneurship. After several startup ventures in sev-
eral different areas of business, Callahan used his passion for running to start his own business, a website
designed to help runners map and train their runs called, MapMyRun.
Start: The only true way is to marshal the ferocity of your ambition over the course of
many days, weeks, months, and (if you could finally come to ac-
cept it) years. The Trial of Miles; Miles of Trials?
The gun goes off and there is no turning back. Callahan decided to take
his idea and run with it. He gave up a steady income and a normal routine
with his former 9-5 job as a management consultant. Callahan knew how
important stability was and how quickly he could be without income for
several months at the least. He understood that he would have to live his
job, so he wanted to love it, and jumped at the new opportunity. “The idea
is to find something that you’re so passionate about that you’re able to
incorporate it into your and your family’s lives. It’s hard I’m not going to lie,” he said.
12 Fall 2009

13. Mile 3-4: “The thing is, everybody wants to be a winner. And when you’re
psyched up, you’re willing to make any sacrifice.”
After reaching early success, Callahan decided it was time to get a partner to expand the
company. He did not actually meet with Jeff Kalikstein, his partner, for almost a year. Kalik-
stein was a user of Callahan’s site and developed a way to visualize GPS data using Google
Maps. Kalikstein reached out to Callahan and suggested the two work together. Although they
did not meet for almost a year, the two spoke almost daily in starting up their company. Jeff
was much less of a risk taker than Kevin, as Kevin describes him as “the ying to my yang.” Jeff
kept Kevin and the company on an even keel.
Mile 10: “A runner is a miser, spending the pennies of his energy with great
stinginess, constantly wanting to know how much he has spent and how much
longer he will be expected to pay. He wants to be broke at precisely the moment
he no longer needs his coin?”
Before Callahan’s business caught fire, he had to face very rough beginnings as an entrepre-
neur. While in San Diego, Callahan ate 25-cent burritos for every meal, while he pondered
his future as an entrepreneur. Callahan had to pass on fun social events and many trips with
friends to work constantly on his product. “Not every day was tough like that, just usually
around the end of the month when the rent was due. I can imagine that a lot more people
have it worse than me -- having to put up their house or max out their credit cards. I think I
was lucky...”
Mile 20: “Endurance athletes build it slowly, painfully, along with their con-
ditioning, day by day, over the course of months and years. It’s the one thing
they all have in common.”
At this point, Callahan was not sure if he could go on much longer. This mark is the most
crucial part in any marathon, as a runner starts questioning his motives and ideas. He knew
how easy it would be to give up, and knew the challenges ahead. “It’s hard. You think that
you have a great idea and money will start raining in, but you have to work hard at develop-
ing it, at marketing it, at selling it,” he said. Callahan decided to keep pushing forward toward
the goal of a completed product. Two and half years ago, he was approached by a company
who wanted to buy his business as well as by an angel group who wanted him to develop a
site for cycling. Unwilling to relinquish his dream of a business, Callahan chose to accept the
investment from the angel group.
JayStreet Journal 13

14. Mile 26: “It was the simple keeping of a promise to oneself, to finish, to try.
Endurance athletes are created by that decision, to keep on.”
The finish line was in sight! After working countless 16-hr workdays, it seemed like all Cal-
lahan’s work would finally pay off. “Sixteen hour days can get old but sometimes it’s needed
to get it done right,” Callahan says. He believed he had to stay positive throughout and find
the perfect work-life balance. All his training and experience was finally helping him as he
neared the finish line.
Finish: “And there it is. The true courage of the endurance
athlete, it doesn’t show on the surface, and it isn’t the product
of a single day’s pride in “just finishing.” It doesn’t have to be
summoned; it’s already there.”
All the training has culminated in a great finish. Although Kevin has
reached financial success, he is not completely satisfied with finishing
just one race. Callahan’s company is now believed to be worth 10 mil-
lion dollars and he believes the company can be worth over 100 million
someday. He has expanded MapMyRun and MapMyRide to MapMyWalk
and now, MapMyMountain.
Both an entrepreneur and a runner are defined by their courage to keep on fighting. Through financial
hardships or actual physical pain, both understand that there always is a goal in sight. Callahan showed
how difficult the entrepreneurial process is to live, but that the rewards at the finish line are plentiful.
Pictures Courtesy of:
www.runfresno.com/Race_Information.htm
sultanofsnow.wordpress.com/
Screen Shot of MapMyRide.com’s user interface
14 Fall 2009

15. The Idea Behind Entrepreneurial Thinking
By Dory Giannos and Brett Schwartz
Not all entrepreneurial ideas stem from an analysis of the market and the desire to find a source of com-
petitive advantages. Many ideas stem from pure need and a desire to make one’s own life easier. Here is
what turned on the light bulb in these entrepreneurs’ minds and made them passionate to start their busi-
nesses. Below are their answers to the following question: How did you come up with the initial idea?
Kevin Callahan Patti Chan Michael Ionescu Chris Parker
Founder of Co-Founder of 600Block Founder of Founder of
MapMyRun.com Ionescu Technologies Applied Imagery
“Hopkins had a bunch
outdoors [outdoor ki-
“It was a problem I dis- “It was Tom’s idea [her osks]. I through if they
covered when I was run- co-founder]. Tom had can do that, we can do
ning -- how to measure just moved in to the city. that. I was just looking
/ map your run without He couldn’t find anything for something to do to “If it is a desirable busi-
buying a $300 GPS de- online that told him best enter the business plan ness for you, it is going to
vice. I knew there was places to go in Balti- [Johns Hopkins Business be a desirable business
technology around to more. There were only Competition]. Then out for many other people
solve it cheaply so I went the weekly newspaper of school, I didn’t know and other organizations.
for it. My experience reviews. This was before what I wanted to do. The I picked my best idea off
with web development sites like Yelp became only think I knew is that of the shelf, but it was re-
enabled me to build the popular. Immediately I didn’t want to work for ally my background with
site. My experience with after we [Tom and me] anyone, but I had no real technology and expo-
internet marketing al- met in 2004, we started specific goal. I tried by sure to the business side
lowed me to build it in to brainstorm what we starting out small and of science that made me
a way that can be easily thought was lacking on- surrounded myself with so versatile in the busi-
shared with others that line and how we could advisors. I realized that ness at Applied Imagery.
have the same problem.” make the website expe- just because a product is Luck also plays a role
rience fun to use.” something you like does in any entrepreneurial
not mean it is something venture.”
everyone else will.”
JayStreet Journal 15

16. Staying On Top: Innovating To Remain Profitable
An Interview With A Successful Entrepreneur
By Kyle Halleran
How does a successful business remain successful? Creating a profitable product or service is the easy
part, but how does an entrepreneur constantly update and innovate to remain on top? Chris Parker of Ap-
plied Imagery took a disregarded invention at the Johns Hopkins Applied Physics Laboratory and turned
it into a business. Parker attributes his company’s success to two core elements: a customer focused busi-
ness strategy and the security of government contracts. Founded in 2004, Applied Imagery consists of
three full-time and two part-time employees and uses LiDAR (Light Detection And Ranging) technology to
gather information for its software product, Quick Terrain Modeler.
LiDAR relies on optical remote sensing to measure
the physical properties of scattered light in order to
gather data from a distant object or target. This data
is used to analyze size, shape, distance, and other char-
acteristics of the target object. LiDAR collects data
through pulses of laser emitted at the rate of 100,000
per second. The distance from the transmitter of these
laser pulses and the target object is determined by the
time variations between the pulse and the received
reflected laser signal off the target. LiDAR collects a
vast amount of information, accurate within five cen-
timeters. An airplane equipped with LiDAR technology
surveys a landscape, collecting all of this data, which A LiDAR Model of Mt.. Saint Helens from Applied Imagery
is then transmitted with one-meter resolution to Applied
Imagery’s product, the Quick Terrain Modeler.
I sat down with Chris Parker in his office at Applied Imagery in Silver Spring to discuss his strategy of
constantly innovating to remain profitable and satisfy his government clients.
Kyle Halleran: Why is your product better than the from 32-bit to 64-bit. A 32-bit system means that
competition? it can hold 232 bits of data, while a 64-bit system
Chris Parker: One of the things that we’ve done can hold 264 bits of data. What this means to the
better than the competition right from the get-go is user is instead of looking at millions of points you
produce these point clouds. A lot of other software can look at billions of points, and this is important
will give you a static view, and maybe you can move because the resolution of this stuff is getting denser
to another static position, but you won’t be able to and denser. We introduced 64-bit because we knew
interact with millions and millions of points. that there is always competition. If it is a desirable
business for you, it is going to be a desirable busi-
KH: How do you use customer feedback to improve ness for many other people and other organizations.
your product? We were hearing from our customers, constantly on
CP: A year ago one thing that we did was switch the phone with them, understanding what their pain
16 Fall 2009

17. points were, where we could help. The introduction customers’ desires, like this new “line of sight” fea-
of the 64-bit was a quantum leap in our capability. ture we just added.
We had a sense of the marketplace and our custom- KH: How do you recruit employees who share
ers were very, very happy about this.” your ambition of customer satisfaction?
CP: There’s no magic formula, I like to think we
KH: How important is it to know your competi- (Applied Imagery) have a great work ethic and very
tion? high ethical standards, and I think it starts there. I
CP: Part of what you need to know about your look for relevant experience either in the larger field
product is what it does better than the competition. of geospatial or smaller field of LiDAR or software.
That way you can excel in the marketplace. When Certain things you can teach and certain things you
most people see our software for the first time, they can’t teach. You can’t teach a good attitude or good
are just shocked at how fast it is. That’s a key prod- work ethic. You want to make sure you get it right,
uct differentiator for us. We are constantly assess- because mistakes on personnel can be very costly,
ing the marketplace and understanding where the painful, and cause you some sleepless nights.
competition is.”
KH: Who are your biggest
KH: How often do you “You hear horror stories of late payments customers and how do they
update your software? from the government and having to wait use Quick Terrain Model-
CP: We are constantly up to six months, but in our experience er?
working on it and come they’ve been in line and on time with CP: A big part of our suc-
out with an official re- everybody else.” cess is selling to the De-
lease four times a year, so partment of Defense. This
every three months. kind of representation of
LiDAR data, called point clouds, is very useful if
KH: Do customers pay for these updates? you are planning to land a helicopter in a situation.
CP: Our business model is selling licenses of soft- You would want to know the heights of buildings,
ware and maintenance. When you purchase our smokestacks, power lines, and other deadly haz-
software you get one year of maintenance included. ards.
When we come out with a new version we just send
out notices to our customers and they download it KH: What is the fundamental difference between
for free. After a year they renew their license. doing business with the private sector and govern-
ment agencies?
KH: How often do you include new features? CP: For a company like us that sells a solution it’s
CP: There will be something new every time. We very similar in terms of the sale cycle. Once a per-
just released version 7 in September. When we re- son in private industry or a person from govern-
lease something new we’ll compile a list of bug re- ment becomes interested in your product you have
ports from the customers who notify us what doesn’t to convince that person that this is useful to them
work. We fix these quickly so our customers remain and solves a problem, then they need to decide to
satisfied. purchase it. There’s this unfortunate common be-
lief that the government puts out solicitations and
KH: So you just always get feedback from your cus- you just respond to them.
tomers, see what they want, see what they like or
dislike and update your product every three months KH: How does the government sale cycle com-
accordingly? pare with the private sector?
CP: Right. We have an ongoing list of big things, CP: The government will have very rigid, procure-
medium things, and tweaks to fix or improve to our ment guidelines and rules that they have to com-
JayStreet Journal 17

18. pete and award this fairly. In the private industry fired for this. When government agencies that are
it is more likely that you will find someone who customers call up and say they had to reboot their
will say okay, I have the budget, I’m going to buy computer or their hard drive got wiped out, we just
this now, and its over. Part of what we do during issue them a new key - we totally trust them. With
the sales cycle for government is the Department of all of the stereotypes of doing business with the gov-
Defense, civilian government, states, and counties ernment, we find it wonderful doing business with
will have to issue a sole source letter, stating that we the government on so many levels.
(Applied Imagery) are the only company that can
provide Quick Terrain Modeler in America, and they KH: In your experience, is there any truth to the
put that on file. This may cause a government sale to popular perception of the government being late
take a little bit longer. with payments?
CP: When we sell to a
government customer I
feel like it’s guaranteed
that we get paid. We are
focused on ARs (Accounts
Receivable), once we in-
voice a customer. There
have been instances
when we’ve sold to little
companies where I was
wondering if we were go-
ing to get paid, so it can
be a little psychologically
tolling. Selling to Lock-
heed Martin or SAIC is
very much like the gov-
ernment.
Chris Parker is at the
end of his fifth year as
founder and CEO of Ap-
plied Imagery. He is one of the few and fortunate
entrepreneurs who has achieved success and main-
A LiDAR Model of a Power Plant from Applied Imagery
KH: Why do you think there is a general perception tained his position as a leader in the field, with no
of that dealing with the government is vastly differ- plans of slowing down.
ent than dealing with commercial customers?
CP: Other than the rigid rules in funding, it’s the
same. You have to develop the relationships, con-
vince somebody of something, and ship the product.
It’s pretty much the same thing.
Looking for a
Unique Holiday
KH: What is a benefit of selling to the govern-
Gift this year?
ment?
CP: We have a fear of software piracy. Any of our
“A creative
customers may call us and say they lost their key or
and colorful
idea!”
they had to reformat their hard drive, and ask for an-
-Kevin Callahan JHU’99
other key or license. In the government you will get
www.BlueBirdCandyDish.com
18 Fall 2009

19. Planting the Seed for
Biotech
By Dory Giannos and Jose Deschamps
Although biotechnology dates lated agencies in the surrounding The first MC biotech hub was
back to 500 BC when the ancient area. Without leading academic born in the early 1980s when the
Chinese used moldy soybean institutions, Montgomery County county developed the Shady Grove
curds as an antibiotic to treat boils, used the proximity of the Food and Life Sciences Center (SGLSC), a
most academics and practitioners Drug Administration (FDA) and 288-acre park owned and oper-
date the beginning of the biotech- the National Institutes of Health ated by the County and specifi-
nology industry in the United (NIH). The FDA headquarters are cally zoned for research and de-
States to the early 1970s. Then, located in Silver Spring, Maryland, velopment. Subdivisions were
investment in research projects approximately 20 miles away, subsequently created and all land
and biotech centers flourished in while NIH is located in Bethesda, has been sold or leased to biotech
San Francisco and Boston in the MD, approximately 15 miles away. entities. When selecting land to
fertile grounds of academic insti- One biotech industry observer develop, county officials decided
tutions such as Caltech, Stanford, said that the federal labs are “not to position the complex next to
Harvard and the Massachusetts so much a magnet as a fountain.” the Shady Grove Aventis Hospital,
Institute of Technology. A decade They served as a source of labor, opened in 1979, because they saw
later, however, the next biotech founders and contracts for new plenty of nearby farmland in the
center bloomed out of an agricul- companies and initiated the emer- proximity that could be used to
tural hub. gence of biotech in the area. establish the anticipated biotech
ecosystem.
What Brought Biotech to Forming the Montgomery
Montgomery County Ecosystem Creating a Wealth of Knowledge
Maryland?
Montgomery County (MC) has Knowing that academia was
The initial seeds for biotech were created an extensive plan to at- needed to sustain and develop
planted in the 1980s, shortly after tract and encourage biotech by biotech in the area, Montgomery
the emergence of biotech hubs in creating research villages where County donated 35 acres of the
other parts of the US. Raul Medra- people can live, work and play. SGLSC to Johns Hopkins Univer-
no, a Business Development Spe- Mini developments have emerged sity and 50 acres to the University
cialist for Montgomery County, next to science centers to create of Maryland. Universities help
explains the birth of biotech in the a biotechnology ecosystem that with technology transfer because
County as a decision to leverage house researchers, scientists and they posses close links to the pri-
the many health and resource re- their families. vate sector that offers incubator
JayStreet Journal 19

20. facilities and funding. Technolo- understanding with the County was fostering biotech through in-
gy transfer is the process of shar- to outline Hopkins’ commitment cubators, a physical space where
ing of skills, knowledge, technolo- to the area. For example, JHU companies can rent lab or busi-
gies, methods or samples from purchased the 107 acre Belward ness space at low rates and share
academic institutions to business. farm in 1989. This land is the expenses for access to resources.
Linking these two entities allows only undeveloped large plot in These incubation spaces aid entre-
a wider range of users to further the Gaithersburg West subset of preneurial companies by provid-
develop and exploit newfound the biotech ecosystem and Hop- ing an array of support resources
technologies into new products, kins intends on creating a“21st and services on site, for example
processes, or applications. century research community that advisory boards and mentors.
Johns Hopkins University and will advance health, science, and Additionally, incubators typically
University of Maryland have sub- education.” The Belward cam- have networks of contacts such as
sequently become key to the infra- pus is projected to be completed lawyers to help with filing patents
structure of the area as they have by 2030. This new campus will or financial advisors to help with
established a technology transfer be just 3/10 of a mile from the business plan projections.
network and brought funding to present JHU Montgomery County The National Business Incuba-
the area. For example, the Univer- Campus, created from the origi- tion Association (NBIA) projects
sity of Maryland developed its that overall only 10% of biotech
Center for Applied Research companies will succeed;
in Biotechnology with the therefore incubators help
County land and funds in col- safeguard success by provid-
laboration with the National ing crucial resources that help
Institute for Standards and alleviate the financial burden
Technology. This 120,000 and uncertainties of starting
square foot facility has state a company. Medrano notes:
of the art laboratories for col- “There is a lot of hand hold-
laborative research among ing, but when these entrepre-
academic, government and neurs leave the program they
industry scientists. It also are business savvy.” The aver-
houses the University of age length of stay in the
Maryland System Shady incubator program is five
Grove Campus, which is a years and allows scientist
collaboration of nine, pub- entrepreneurs to be in a
Jose Deschamps and Raul Medrano in an incubator
lic degree-granting institu- better position with their
at the Germantown Innovation Center
tions that bring some of the top nal 35 acres of land donated to product by affordably having ac-
programs from across the state Hopkins. The plot has been trans- cess to an array of resources to
to one facility in MC. The campus formed into a campus that accom- execute their business plan. The
offers four-year undergraduate modates 4,000 graduate students NBIA calculated that historically
degrees in over 60 programs, one and 13 life science companies. 87% of incubator graduates stay
being a B.T.P.S. in Biotechnology. in business.
The establishment of this campus Incubators as Helping Hands for As of October 2006, there were
has brought a wealth of intelligent Fostering Biotech 1,115 incubators in North Amer-
scientists and researchers to the ica, up from only 12 in 1980 ac-
area. These initial steps created the cording to the NBIA. The first
Currently Hopkins is in the pro- blueprint for the development of Montgomery County business in-
cess of inking a memorandum of biotech in the area. The next step cubator was established in 1999
20 Fall 2009

21. and the most recent one was built Germantown headquarters of- politan area and 16% in Frederick
in 2008. The latest addition is the fice. NBIA estimates that in 2005 County.
Germantown Innovation Center, alone, North American incubators In size, MC with its 15,000 bio-
which provides 11 wet labs aver- assisted more than 27,000 start- tech workers, is third to the San
aging 500 square feet, 2 modular up companies that provided full- Francisco and Boston area for the
clean rooms and 45 offices. It is time employment for more than largest number of firms. Approxi-
strategically located adjacent to 100,000 workers and generated mately 220 companies related to
the Germantown Campus of Mont- annual revenue of more than $17 the life sciences have their head-
gomery College, a public, open ac- billion. Business incubators not quarters in the County. Notably
cess community college offering only help advance biotechnology Medimmune, Takeda, Quiagen,
two-year associates degrees and and industry overall, they assist and Human Genome Sciences have
a variety of professional certifi- with employment and revenue emerged since the late 1980s.
cates and letters of recognition. across the United States. With the County’s boom of suc-
The Germantown center is poised cess in its first few decades, Me-
to benefit from the drano explains, “Our
technology programs vision is to continue
offered at the college fostering and nur-
and the growing “Tech- turing growth of the
nology Corridor,” High- industry. We want
way 270, which runs to continue to be in-
through the area has volved with it as it
earned this nickname evolves.” Medimmune
due to the continual was recently bought by
technological develop- a larger international
ments in the area. company and foretells
MC’s five incubators the future for other
form a “network of bio-incuba- locally grown companies. MC is
tors that provide mentorship, gravely concerned with the work-
Map of Maryland’s Biotechnology
coaching, and ‘affordable’ space force and talent leaving the area.
Yellow= Education
to start-up companies,” explains Medrano highlights the fact that
Red= Industry
Montserrat Capdevila, President Sustaining Montgomery County with the development of new ed-
Blue= MD Biotech Org.
of Johns Hopkins’ Biotech Net- Now The Epicenter of Biotech in ucational efforts, development of
work, a professional, student-run Maryland transportation and residential ar-
organization whose main mission eas, Montgomery County wants to
is to create a stronger biotech Currently, MC has become the preserve the strong talented work
community. heart of Maryland’s biotech com- pool that has developed through
Qiagen, a provider of sample munity as biotech has predomi- the onset of biotech. Maryland
and assay technologies for mo- nantly clustered around the Coun- Governor Martin O’Malley con-
lecular diagnostics, applied test- ty and the Washington DC area. curs, “Together, we will create the
ing, academic and pharmaceu- As of 2008, about 60% of the most fertile environment for bio-
tical research, is an example of state’s 370 bioscience companies science in the country with the
the County’s incubator success. call Montgomery County home, ability to compete and win on the
According to its website, Qiagen according to Maryland’s Depart- world stage.” This can only occur
started with 5 employees at a MC ment of Business and Economic by cultivating talent.
incubator. Now they employ over Development which compares MC is placing high prior-
200 trained professionals at their with 24% in the Baltimore metro- ity in developing the talent pool
JayStreet Journal 21

22. is formulating its own biotech
hub in quest of capturing biotech
funding. A recent article in the
Washington Business Journal sug-
gests that Prince George has the
potential to compete with Mont-
gomery due it its close proximity
to the University of Maryland and
the College Park Metro station.
As Montgomery County becomes
more crowded and developed,
will new biotech innovation flow
to Prince George’s County or oth-
er counties in Maryland due to
the available open space and at-
tractive transportation offerings?
through education. Educational tion as a leader in the industry Time will only tell if a new biotech
programs have been installed in and the future of MC remains very hub is about to emerge.
the middle schools, high schools promising. The County has begun
and colleges focusing on the busi- to address problems including
ness side of biotech: “We are try- limited public transportation and History of the Biotech Industry was
ing to create a pipeline of tran- competition from other areas. In provided by Raul Medrano and Mont-
gomery Planning reports which can be
sitions into biotech starting as order to tackle the transportation found online at: www.montgomeryplan-
early as middle school,” explains problem, MC is establishing a new ning.org
Medrano. The County is work- light rail system, which is esti-
ing to have younger generations mated to be up and running in the 1 “Koo, Jun & Bae, Jonghoon & Kim,
interested in biotech and able to next five to ten years. It will con- Dohyeong. What Does it Take to Be A
Biotech Hot Spot.” Environment and
understand and be enthusiastic nect the Shady Grove Life Science Planning Journal. 27th Volume, 2009. p.
about the concepts of incubators Center to the new JHU Belward 665.
and venture capitalists. campus as well as the other incu- 2 Sinha, Vandana. “Prince George’s
bators in the County. Identifies Sites for Biotech Cluster.” Wash-
Future of Biotech in the US and The increasing competition and ington Business Journal. 13 November
2009. <http://washington.bizjournals.
Montgomery County development of biotech in other com/washington/stories/2009/11/16/
states is welcomed by Montgom- story1.html>
Biotech is considered to be the ery County and Maryland accord-
next growth engine by many poli- ing to Capdevila: “MC will be able
cy makers and economic develop- to maintain its position as a strong
ment scholars. A 2009 survey that county and will also be able to
polled 36 economic development stimulate other ‘neighboring’
agencies in the US exemplifies counties to enhance their growth.
this sentiment; over 80% of re- The more the counties grow and
spondents identified the biotech prosper, the better Maryland is;
industry as one of their major in- more jobs and enterprise creation
dustrial development targets. leads to higher tax income and
Montgomery County is concen- happy voters!”
trating on maintaining its posi- Nearby, Prince George’s County
22 Fall 2009

23. Biotech Davids
Struggling Pharmaceutical
and
Maturing
Goliaths
By Jose M. Deschamps
For years, pharmaceutical buster drugs like Lipitor or Pla- panies. Unlike pharmaceuti-
companies have been known for vix which generate over a billion cal companies who work with
two things: finding innovative dollars of revenue each. Now, chemically based compounds,
drugs and reaping huge profits. many pharmaceutical compa- biotechs manipulate the function
The industry has spent billions of nies are primarily marketing ma- of living cells so that they work
dollars on research and reaped chines that sell drugs of dubious in more predictable and control-
billions in return. In 2006 alone, benefit.3 lable ways. 4 The great majority
the pharmaceu- of “new” pharma-
tical industry ceutical drugs are
introduced 31 not new at all, but
drugs and sold merely variations
$643 billion in of older drugs
products world- already on the
wide.2 Howev- market. These are
er, over the past called “me-too”
two decades the drugs. The idea is
pharmaceuti- to produce some-
cal industry has thing very similar
moved very far to a top-selling
from its original drug and reap the
high purpose of benefits.3
discovering and producing use- A New Contender in Drug Dis- As Dr. Sharon Levine, associate
ful new drugs. In the late 1990s, covery executive director of the Kaiser
pharmaceutical companies be- As hard as it is to believe, only a Permanente Medical Group, put
gan to divert resources from re- handful of truly important drugs it,
search and development toward have been brought to market in “If I’m a manufacturer and I
attempts to increase revenues recent years, and many of them can change one molecule and
from the sale of existing block- came from biotechnology com- get another twenty years of pat-
JayStreet Journal 23

24. ent rights, and convince physi- and more research-focused bio- als, the industries that do manu-
cians to prescribe and consum- technology companies. Recently, facturing, and the industries that
ers to demand the next form of Medimmune, one of the more do preclinical research all in one
Prilosec, or weekly Prozac in- well known biotech companies, area. After working for pharma-
stead of daily Prozac, just as my made headlines by creating a ceutical companies like Pfizer
patent expires, then why would I vaccine for the infamous swine and Bristol-Myers Squibb, Mi-
be spending money on a lot less flu. Unfortunately, most biotech chael Rosen has switched over to
certain endeavor, which is look- companies are still unprofitable, biotechnology, which he consid-
ing for brand-new drugs?”4 strapped for cash and find get- ers to be the future of drug de-
This is the problem with phar- ting their products out to market velopment. “If the pharmaceuti-
maceutical companies. They are very difficult. Their drugs have to cal companies do not change the
focused more on marketing than go through several stages of test- way they do their business, they
actually finding new drugs. Typi- ing which takes over ten years. will find themselves out of busi-
cally the pharmaceutical indus- Without revenue coming in, it is ness,” he says.
try spends 15% of sales on R&D hard for these companies to even What are pharmaceutical com-
while biotech companies spend stay in business. panies doing to generate new
25-45% of sales on R&D. Even Michael Rosen, the Senior Vice drugs?
though this dis- They are buying
crepancy has biotech compa-
not changed the nies.
fact that phar- Marcia Angel, au-
maceutical com- thor of The Truth
panies rake in About the Drug
nearly 600 bil- Companies puts it
lion a year - ten best, “Pharmaceu-
times more than tical companies
biotech compa- are not particu-
nies – innova- larly innovative in
tion is neces- discovering new
sary for success. drugs, and they
When the pat- are highly innova-
ents on some of tive— and aggres-
the most prof- sive— in dreaming
itable pharma- up ways to extend
ceuticals expire, their monopoly
other drug com- rights.”4
panies are free to sell generic President of Forest City Enter- Many pharmaceu-
versions, chemically identical prises, a real estate company tical companies are buying out
copies that typically cost much that develops and builds biosci- biotech companies. These merg-
less than the trademarked ver- ence parks in the U.S., believes ers are sweeping the life sciences
sion. This leads to a huge drop in that biotech business model will sector – a trend that shows no
revenue for the pharmaceutical predominate in the future. Most signs of slowing down. In 2006,
companies that originally pro- biotech companies are located Big Pharma spent roughly $17
duced those drugs. in bioscience parks. At the heart billion for more than 250 biotech
When the pharmaceutical is a university like Hopkins that deals, up from 150 in 2003, ac-
industry cut back on R&D, it generates the research. You have cording to venture capital firm
opened the door for smaller the industries that do clinical tri- Burrill & Company.2
24 Fall 2009

25. It’s much easier for these multi
billion dollar pharmaceutical cor-
porations to buy innovation than
to innovate. As Rosen puts is, “A
large pharmaceutical company
has many layers of organization
so the communication process
is very slow. Assistant scientists
have to report to a main scientist
who reports to a senior scientist
who reports to a manager who
reports to a director who reports
to a senior director who reports
to a vice president who reports
to a senior vice president who
then would report to a R&D pres-
ident. It is a very long process for
making decisions.” With an in-
dustry as over managed as phar-
maceutical companies, it is time
consuming even to get drugs into
the clinical stages.
proval by the U.S Food and Drug drugs. Will the pharmaceutical
Administration (FDA ) which has Goliaths change the way they do
become more conservative in re- business or will they simply buy
sponse to patient demands. up the biotech Davids? That re-
However, the FDA knows that mains to be seen, but the future
new therapies for certain dis- of drug discovery is firmly in Da-
eases like cancer or HIV are so vid’s hands.
important that they have created
a fast track policy for approval.
This fast track policy will shorten
the time to market by about two 1. h t t p : / / g l o b a l t e c h f o r u m .
e i u . c o m / i n d ex . a s p ? l ayo u t = r i c h _
years. Add in the resources of story&doc_id=8009&title=How+big+p
Drug Development bioscience parks, and you have a harma+is+picking+the+best+of+biotec
real advantage emerging for bio- h&categoryid=7&channelid=3
tech. 2. http://www.wetfeet.com/Ca-
While biotechs may get drugs At the end of the day without reers-and-Industries/Industries/Phar-
maceuticals-and-Biotech.aspx
into trials faster, it is here where innovation, drug discovery is im- 3. h t t p : / / s c i e n c e c a re e r s . s c i -
they stumble. Only a fraction of possible. Unfortunately, innova- encemag.org/career_magazine/pre-
the 1,466 biotech companies tion is not happening in Pharma. vious_issues/articles/2009_04_10/
in current existence sell prod- It is happening in universities caredit.a0900048
ucts.2 Most lack the resources and because biotech compa- 4. http://www.nybooks.com/ar-
ticles/17244
and expertise to fund the lengthy nies spin out of the universities, 5. picture courtesy of
clinical trials necessary for ap- they are developing many more simeonstewartwordpress.com
JayStreet Journal 25

26. Social Networks:
Are they becoming a Nuisance?
By Elizabeth Lenrow
How many notifications have you received on Fa- Just as we read the tabloids and gossip columns, it is
cebook in just the last few hours? Have you received our voyeuristic interest in the lives of others that keeps
so many emails for events on Facebook that you de- people hooked. People flip through their friends’ pho-
lete them because they have become an annoyance? tos and “walls” just like reading celebrity magazines,
In a candid moment, wouldn’t you say that you because they think that their friends’ lives are more
don’t really care to know what all of your friends interesting than their own. It is not just the SNS us-
are doing ers’ mundane
every sec- view of their
ond of the lives that keeps
day. Twit- them addicted,
ter, a popu- but also the
lar social design of the
networking websites that
site, is cre- keeps us “net-
ated solely working.” Ev-
to provide eryone knows
the “status that many peo-
updates” of ple are con-
w h o m e ve r stantly updat-
you are try- ing Facebook.
ing to follow. Hence, even if
Why are you only spend
people more five minutes
inclined to on the site, you
sit online are drawn to
and follow sign back on a
the lives of few hours later
their friends to see who put
rather than living their own? up new photos, wrote on your wall or created a new
event –and, you can easily flip from one person’s page
The Intrigue of Social Networking Websites to the next.
Facebook’s addictive features make it “a huge time
It is interesting to consider what motivations suck” says Lily Seidel, a senior economics major at
drive people to these social networking sites (SNS) the Johns Hopkins University. Fortune Magazine’s,
and leave them spending countless hours glued to Jessi Hempel (Feb. 2009) points out that Facebook is
their computer, iPhone, or Blackberry. The flip side intentionally taking over our lives. She writes, “the
of this question is whether social networking sites ‘stickiness’ of the site is a key part of 24-year-old CEO
will eventually drive their users away? Mark Zuckerberg’s original plan to build an online
26 Fall 2009

27. version of the relationships we ple to create a fictitious persona. my daughters were using the site.
have in real life. Offline we bump For example, you can “friend” peo- Now, I find it a great way to net-
into friends and end up talking ple you wouldn’t normally talk to work with people. I have found
for hours -- we flip through old or know, because you believe that three or four old college friends
photos with our family -- we join “friending” them in “cyberspace” and have now been able to con-
clubs. Facebook lets us do all of is somehow okay. This theory is nect with them and see photos of
those things in digital form.” But illusory. The lack of real contact their families and talk about our
does it really? on these sites encourages some lives.” While it is great that Ms.
A Screen Shot of Patti Chan’s 600block.com
The connection one makes on people to act out of character in Weir is able to connect with her
Facebook or Twitter is by no the mistaken assumption that old friends from her school days,
means comparable to the con- only their mere profile is at stake. they may not keep her on the site
nection formed by actual human Similarly, as more middle-aged forever. She will find out that most
contact. Twitter is predominantly users join Facebook, they are of her college friends will not be
a one sided site where there is “friending” their kids, and wit- on Facebook. And as Ms. Weir’s
little to no interaction between nessing sides of their children daughters grow older, they too
users besides looking at the sta- that they normally would not see. will stop posting so many photos,
tus updates of the users you are Hence, parents are trying to be leaving their mother to wonder
following. On Facebook, there is “friends” with their kids—when what she’s doing on Facebook.
an instant messaging/email com- that is really not their relation- The thrill of “Facebooking” may
ponent, but the only connection ship at all. Duffy Weir, a market- already be losing its hold on the
made from that is a “cyber” one. ing consultant and now a regular early adapting younger genera-
This wall between users on so- user of Facebook adds, “I started tion. Seidel, who used to enjoy
cial networking sites allows peo- using Facebook to observe how Facebook, now bemoans that
JayStreet Journal 27