Eight leaders of the Top 25 Science Meets Business R&D spin-off companies answer the question: What major challenge did you face as you were moving to market and how did you tackle it?
“As we understood more about the market, we believed our product was most differentiated and better suited to very large enterprise customers.
But understandably, such large customers are not inclined to buy off an unproven, unknown start-up. So we spent a lot of time trialling our product with smaller early adopters and leveraging the results to win over increasingly bigger customers.“
– Gary Pennefather, Chief Executive Officer
“In the biotechnology/pharmaceutical space the major challenge that is often outside our control is the time taken to get the regulatory and pricing approvals necessary to enter markets where the only purchasers are governments.
We faced significant delays and hold-ups that required a different set of competencies to tackle than the scientific and clinical experience that had got us to that point.
Your business model has to be robust enough to withstand delays in time to market and increasing regulatory costs. Having a plan that only works if everything goes well is asking for trouble.“
– Gary J Phillips, Chief Executive Officer
“An ongoing challenge when moving into new markets is educating the value of the technology based on experiences in other regions, and trying to keep down the cost of individual sales with a complex technology.
We’ve alleviated this challenge with staff based around the world and by setting up established offices in Chicago (USA) and Leeds (UK), but you still need to get creative in penetrating new markets and generating revenue right away while demonstrating value.“
– Shaun Holthouse, Chief Executive Officer
“With two platform technologies and an extensive number of possible R&D programs, determining the right projects to progress forward and balancing capital allocation are key. Detailed program and market understanding is also essential.
We’ve overcome this by maintaining regular and consistent communication with our investors and working closely with our customers to understand their needs.“
– Dr Julian Chick, Chief Operating Officer
“The most difficult challenge ended up being establishing the right management team for the business – it is difficult to identify and parachute in the skilled, motivated management team a start-up needs; one that is able to operate effectively with researchers, investors, and so on.
For this to happen, CRCMining, as the major shareholder, first ensured the company had an independent governance arrangement in place by establishing a board for SmartCap with significant successful commercial experience – one that we felt was very competent, able to ask hard questions, and make difficult decisions.
The board led the process of putting in place a management team that has resulted in the company reaching the point of being a very well-run organisation.“
– Kevin Greenwood, Chief Operating Officer
“We chose to partner our lead product with a strong international pharmaceutical company rather than working through alternative go-to-market strategies. On that basis, selecting and negotiating a good commercial deal is critical.
Not all partners are created equal. On that basis, there are other challenges prior to this step that must be appropriately addressed.
The quality of the commercialisation partner and the strength of your position in a negotiation with that partner are the result of good outcomes in the pivotal steps prior to your licensing negotiations.”
– Michael Kotsanis, Chief Executive Officer
“Once clinical proof-of-concept was successfully announced by Spinifex in August 2012– that is, the Phase 2a clinical trial in patients with postherpetic neuralgia, which is a type of peripheral neuropathic pain that is often intractable – the Spinifex Board again needed to raise capital to progress from Phase 2a to Phase 2b clinical trials.
However, these funds were not available in Australia and so the company had to move to the USA in early 2014. Soon after, they successfully raised $45M in the USA to progress the clinical development program.”
– Professor Maree Smith, Executive Director of the Centre for Integrated Preclinical Drug Development and Head of the Pain Research Group at The University of Queensland
“Identifying early adopters.“
– Stuart Smith, Chief Executive Officer
Click here to see the full list of Top 25 Science Meets Business R&D spin-off companies, or for further insights from the Top 25 leaders, read their interviews on attracting venture capital, learning from overseas markets and overcoming the valley of death.