Science has an enormous potential to improve our world (think of the many scientific innovations that already drastically improve our everyday life). If you are a scientist who has interesting ideas with both commercial and impact potential, you should definitely consider turning those ideas into a business.
However, the business environment is a very different game than working on your idea in the lab. So, we condensed our best advice into the most crucial steps to starting any science business.
- Find and validate your business idea.
You’ve been thinking about or even working on a breakthrough scientific innovation for years now. “That could be a scalable business,” you think. You might be right, but as the first step, you have to answer these questions as honestly as possible:
- What exactly do you want to do? What will your product be? What problem is it going to solve?
- Why will it be better than anything else? What are the existing solutions’ strengths and weaknesses, and how exactly are you going to be better?
- Who exactly will be your customer? How do you plan to reach them or how they will learn about your product?
- How much will it cost to make your product or service? How much will customers pay you? What is the difference between the revenue and cost of making one unit of your product? Don’t forget to add 20%–40% for additional costs to your structure, such as employees, R&D, offices, and other costs. Does the math add up? In other words, is your profit margin (the difference between the unit’s revenues and total costs) at least 30%?
- Evaluate your capability to sell your ideas and convince people. Like everyone, a scientist can be a great salesperson (or not). If you’re not good at sales yet, your task as a CEO will be difficult, even if you have good business sense.
However, there is no doubt that some of the most useful insights are generated by talking directly with other people, from your potential customers to experts in the field you want to launch your business in. Check out this great video from YC Startup School on how to talk to your users.
Also, a very wise next step would be joining the Merck Innovation Cup, a business plan competition where you could receive up to €25,000 in addition to mentorship and networking opportunities with managers and specialists who have a love for science and a passion for technology. Learn about the biopharma R&D business at the oldest chemical and pharmaceutical company in the world, before kick-starting your own!
2. Protect your IP.
As the backbone of your potential business, your intellectual property (IP) is a precious commodity. And unlike with other types of businesses, in order to form the basis of a new scientific company, your research should either be the first or best of its kind. If you do not have the resources to file for a patent, you have to be very careful about what you publish about your research.
3. Test the product with an MVP.
Before you invest an enormous amount of time and money into building a product, we highly advise you to build an MVP. A minimum viable product (MVP) is a version of a product with just enough features that early customers can use and then provide feedback for future product development. In other words, it’s the simplest version of your product that enables customers to just get the idea of your product’s future potential. Do not bother to build a market-ready product; just pick 1–2 core features and build that prototype.
Use the MVP to source customer answers to these important questions:
- Does this product solve your problem? How? If not, how could it solve your problems?
- What features would you add? How would you improve this product?
- Would you use it?
- Would you pay for it? If so, how much would you pay to use it?
If you can get some financial commitments from your customers (in the form of cash or at least contracts for future purchases), that’s perfect! It drastically increases your chances of receiving funding from investors. For full guidance on your MVP phase, check out this video.
4. Get funding and support.
Theoretically, you could start looking for external funding even after formulating your idea in step one. However, your chances of getting funding will be way higher upon completing the MVP phase and having that strong market validation about your product desirability and ideally even some commitments from your future customers.
Since your business traction probably won’t be sufficient for VC (venture capital) funding (unless it’s among breakthrough scientific discoveries), the best way forward would be to get funding from startup accelerators or government grants.
Here are some potential funding sources for you:
a. Government funding
- EU Commission grants: The EU offers many different grants in various industries. For a comprehensive overview of the EU funding, refer to this page.
- Check your local government since many public bodies have dedicated funding programs with the aim to encourage R&D and scientific innovation.
If you get selected for an accelerator or any other mentorship program, expect exponential growth in all aspects of preparing your company for market entry. This includes customer validation, developing your products and/or services, setting up a lab or research facility, completing your paperwork and other legal documentation, employment, funding capacity, marketing, and other related developmental strategies.
Not sure where to start? Apply to the Merck Innovation Cup for a chance to receive funding and mentorship support from the oldest chemical and pharmaceutical company in the world.