It may seem like a lousy time for a scientist to start a new business. The economy is stuck in the doldrums, established companies are starving for money, and venture capitalists are gun-shy.
None of that bothers Irina Shiyanovskaya, a research scientist at Case Western Reserve University. She's ready to abandon her successful career in academe to become an entrepreneur. It's not that she has a hunger for excitement or fantasies of extreme wealth. She just happens to have an idea, and a good one. Even today, a good idea is still worth something.
Just a few years ago, the opportunities for scientific entrepreneurs seemed almost limitless. Practically any scientific entrepreneur with a business plan (however vague) could expect piles of startup money. While the entrepreneurs certainly believed in their devices, their compounds, and their equations, money was the main motivator.
The entrepreneurial spirit is still moving along, but its engine has been overhauled. Most of today's scientific entrepreneurs dream of changing the world, not taking it over, says Katharine Ku, the director of Stanford University's office of technology licensing. They are driven by innovation, not dreams of IPO's. In a sense, attitudes about scientific entrepreneurship are healthier than ever, a surprising side effect of an ailing economy.
A Winning Idea
Shiyanovskaya's vision is to help rid the world of electronics. In a nutshell, the Ukrainian native plans to market software that could greatly streamline the process for creating photonic devices that are powered by light (photons) instead of electricity. Her husband, Sergij Shiyanovskii, a research associate in physics at Kent State University, developed the algorithms behind the software. Now it's his wife's job to turn those equations into a business she plans to call 3D Optics.
Her first step was to enroll in Case Western's physics entrepreneurship program, a two-year professional master's program designed to give business training to scientists. "I had an idea but I didn't know what to do with it," she says. "I was fortunate to be in a good entrepreneurship environment."
Shiyanovskaya proved to be a quick learner. In the year since she enrolled in the program, she has already hammered out an impressive business plan -- so impressive, in fact, that it earned her the top prize in the university's 2003 Business Launch Competition. The winning purse was $46,000, not nearly enough to get a business running but certainly an encouraging start. "I didn't know it was a national competition," she says. "If I had known that I wouldn't have tried. There were a lot of men in black suits. I figured they would kill me. But my idea was better than theirs."
The Forgotten Lab
Kurt Last, a longtime consultant for scientific startups, has seen plenty of winning ideas over the years. Unfortunately, many died right along with their companies. The road from the bench to the marketplace can be more difficult than most scientists imagine, especially when it comes to developing highly regulated products such as pharmaceuticals, he says. "People get into it with no idea what they are doing, fortunately for them. If they really understood what it took to get from here to there, not many people would try it."
The biggest obstacle, of course, is money. Without careful management, cash can dry up before the company has a chance to succeed, says Last, president of the consulting company, Specialty Operations Solutions. "Every company needs one person with vision. Without that person, nothing happens," he says. "The key is to pair that person with someone who can control spending."
Companies can also be brought down by simple hubris, Last says. Scientists often overestimate their own abilities and fail to call in needed experts. "Don't think you can figure out your own computer network, because you can't," he says. "The more things you think you can do, the more likely you are to fail. You have to zero in on your core competency like a laser beam." One value of entrepreneurial programs such as Case Western's is that they help scientists see their shortcomings, he says.
Even when a scientist calls in outside help, he or she should still keep a close eye on the details. A few years ago, Last was asked to review the blueprints for a medicinal chemistry company that was already under construction. He noticed almost immediately that the plans didn't include a single chemistry lab. Construction screeched to a halt while the company redrew its plans. "That kind of thing isn't talked about much at cocktail parties, but it's very common," he says. "It's a waste of money."
Ingredients for Success
Shiyanovskaya says she knows about the potential pitfalls, and she feels ready to avoid them. "We have all of the ingredients for a success story," she says. In her mind, even the economy is on her side. "You can easily put very good knowledgeable people on your team because of layoffs, and there's a lot of office space available." Shiyanovskaya is currently working on a grant proposal for some state support. Next she hopes to find a few local investors to provide seed money for the company.
At this point, Shiyanovskaya plans to stay away from venture capitalists because big-time investors usually demand a large stake in the company. Such an approach is fairly common, but many entrepreneurs still depend on venture capitalists, and not just because of their deep pockets. "I happen to be an agnostic," says Stanford's Ku, "but a believer would say venture capitalists bring a lot of experience to the table. They've done it before."
When it comes to starting up a new business, experience counts. Ku says all aspiring scientific entrepreneurs should talk with others who have already made the leap. Local entrepreneurs are the best resource of all, she says, but they're harder to find in some places than others. The importance of an entrepreneurial support network helps explain why so many new companies get their start in Palo Alto and Cambridge, despite all of the cheap office space in Decatur.
Have It in Your Guts
For all of her optimism and her well-laid plans, Shiyanovskaya knows she's risking her reputation as well as her finances. She already has a good life and a successful career. She has earned the respect of her colleagues. Her name regularly appears in the literature. In her words, "everything is fine, and now I'm trying to cause trouble. You have to have it in your guts to take the risk."