Being a biotech startup is exciting. Your company is young, energetic, and full of potential. However, your company is likely lacking in two key areas: cash and time. Startups have the difficult task of scaling quickly to profitability, while trying to minimize spending and extend their runway. Several strategies that startups can rely on include:
- Using shared space instead of your own facility
- Building a beneficial ecosystem of partners
- Outsourcing of high-overhead activities
Learning how to harness these strategies can help you navigate your startup to runway liftoff.
The expenses of renting and furnishing an office quickly add up. Tack on the typical lab equipment that a biotech startup needs, and the costs may become prohibitive. Competition for small to midsize lab space is currently high, as an influx of biotech venture capital has driven demand. The answer to this shortage of cash and space may be incubators. The biotech cousin of coworking spaces, incubators offer ready-to-use shared lab equipment and facilities to their occupants. Some even offer training and core services to their occupants. Incubators enable fledgling companies to avoid equipment capital expenditure and lease just the square footage they need.
Tack on the typical lab equipment that a biotech startup needs, and the costs may become prohibitive.
“Virtual companies” take this concept a step further. These companies rely heavily on outsourcing and have few of their own employees, in some cases completely eschewing their own wet lab, IP group, IT support, or sales and marketing team. A biotech company without need of a lab or many desks can easily function from any type of small workspace. As virtual companies and software-based biotechs continue to rise, traditional coworking spaces will begin to host more biotech startups.
One auxiliary benefit of incubators and coworking spaces is the opportunity for partnerships. Look for incubators that can provide you with a trusted network of suppliers. You will also find the close proximity to other biotech startups can lead to strategic future alliances or partnerships.
No biotech company is an island. A network of partners strengthens your company in a number of ways; from providing services outside of your capabilities to working on mutual projects together. You can also develop a network that offers your customers a seamless experience and provides trusted recommendations. Argonaut has written extensively about the benefits of your company’s “ecosystem” in other posts, and we find great value in building these strong relationships. Our partners enable Argonaut to offer a broader project scope to customers than is possible alone, and our supplier relationships facilitate special requests. Strategic partnerships with complementary allies or with service providers can accelerate your business without adding costs.
Our partners enable Argonaut to offer a broader project scope to customers than is possible alone
To build your own ecosystem, look for companies that share your customer base and offer complementary services outside of your own. Conferences, local networking events, and neighboring companies are all good opportunities to scout for and develop partnerships.
Outsourcing is often the fastest, lowest-overhead method for a company to launch. This is a large reason why virtual companies have become so popular with investors. Working with an outsourcing partner means that equipment and personnel are already in place, shortening the timeline to project completion. Additionally, these expenses are variable instead of fixed, so your company only pays for what it needs. This frugality can extend your runway.
Working with an outsourcing partner means that equipment and personnel are already in place.
Numerous business functions can be outsourced. In fact, some companies tightly define their core competency and outsource nearly everything else. This has the added advantage of providing clarity of mission and focusing on key deliverables while in the start-up phase. Working with a Contract Manufacturing Organization (CMO) can get your product to market faster, while contract marketing builds awareness and Contract Research Organizations (CROs) do the scientific legwork. Outsourcing offers the best technology and personnel, without the high overhead or lead-time (not to mention risk) of bringing everything in house.
Whether your company has a product in hand or is just starting out, these strategies can save you money while simultaneously accelerating your launch timeline. Choose the right lab space, build an ecosystem of trusted partners, and outsource everything that makes sense. To survive in today’s competitive startup environment, you should make every dollar count.
Choose the right lab space, build an ecosystem of trusted partners, and outsource everything that makes sense.
Find out how to extend your runway with outsourced manufacturing. Contact Argonaut today to start maximizing your startup’s cash