GIST Innovation Talks Episode 9: Lab to Market
In this episode of GIST Innovation Talks we explore one of the first and most difficult steps an innovator can take on the road to entrepreneurship--leaving the lab and entering the market. Our guest is Christina Pellicane, the VP of Business Development at Lignolix, a specialty chemicals startup focused on converting plant waste into sustainable ingredients and materials. She has a unique crossroads of experiences having begun her career in the laboratory, transitioned into teaching entrepreneurship programs around the globe, and become an entrepreneur. VentureWell comms specialist, Genesis Lodise, leads this discussion as we go from lab to market.
- Transitioning from scientist to business owner
- Using the scientific method for your startup
- Building your team
- Intellectual property
- Company culture
- The role of mentors
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Communications Specialist, VentureWell
Genesis brings years of communications and technical expertise to the GIST initiative where he produces digital content for social media and the GISTNetwork.org website. He produces GIST's Innovation Talks as well as the GIST TechConnect live-streamed panel discussions on a variety of topics for early-stage innovators.
Vice President of Business Development, Lignolix
Christina Pellicane is Vice President of Business Development at Lignolix, a chemical tech startup, as well as a part-time Expert at the National Science Foundation and a consultant, specializing in entrepreneurship education and program management, for institutions such as Princeton University, University of Delaware and VentureWell. She is a nationally certified NSF I-Corps Instructor and Lean Launchpad educator at schools and incubators around the world.
Previously, Ms. Pellicane served as the first-ever Director of Commercialization for the University of Delaware (UD) Horn Entrepreneurship Center. In this role, she developed and/or managed several initiatives including a $2M Proof of Concept program, the Horn Venture Mentoring Service and the UD I-Corps Site. Prior to UD, she served as the first Executive Manager of the NYC Regional I-Corps Node, funded by NSF for $4M, led by CUNY with NYU and Columbia. She also served as CUNY’s manager of the $10M PowerBridgeNY cleantech accelerator with top-tier NYC institutions such as Columbia University, Brookhaven National Laboratory, and Cornell Tech. Before helping scientists become entrepreneurs, she was one herself. Ms. Pellicane held positions as a Clinical Business Administrator and Study Monitor at a veterinary clinical research organization, AlcheraBio, and a Research Associate at a biotech startup, Venenum Biodesign. Christina has also been an independent consultant through her company Antevasin with projects including the U.S. Department of State’s Global Innovation through Science and Technology (GIST) with VentureWell and The New York Academy of Sciences’ NYSERDA Proof of Concept Center Metrics and Evaluation Project.
Ms. Pellicane is a patented inventor and holds a B.S. in Biology and Animal Science from the University of Georgia and a Master of Business and Science with a concentration in Biotechnology and Genomics from Rutgers University.
0:00:10 GL: Hello listeners! Welcome to the US Department of State Global Innovation through Science and Technology or GIST Innovation Talk on “Lab to Market.” My name is Genesis Lodise. I'm a Communications Specialist at VentureWell, the primary implementing partner for the GIST initiative and I'll be your host for today. We have a great guest with us today for this GIST Innovations Talk - Christina Pellicane the VP of Business Development at Lignolix, a cleantech startup focused on converting plant waste into sustainable ingredients and materials. Christina, thanks for joining us.
0:00:44 CP: Thanks for having me, Genesis. It’s great to be here.
0:00:46 GL: Today's episode is a discussion on “Lab to Market.” This is especially important for STEM innovators who are currently working at a lab at a university or another company and are looking at heading out on their own, taking the plunge and entering the world of entrepreneurship. The question is how does one successfully leave the lab and enter the market and what actions can people take to have the best shot at success. Let's start with a general question: what makes getting out of the lab and into the market so hard for so many people?
0:01:18 CP: Great, yeah, so it’s a great please to start. I think the biggest hindrance is just in your mind. A lot of times people who self select for science engineering roles either in Academia or in a company, in what we call industry, they aren't necessarily inclined to be attracted to business or what they perceive to be the responsibilities of running a business. And I would encourage you to think about it from a different perspective. Rather than thinking about it is becoming the salesperson and a business person, think about it as becoming a person who's providing value for a community of people who may also look and be like you. And so if you can provide value and you can provide societal impact with your technology that's a great mission to have and a great reason to get out of the lab and into the market. Generally that's the biggest barrier I've seen in why it's so difficult to transition from the lab to the market. People believe they don’t have the inherent qualities that it takes to be successful at running a business. And let me tell you, I've seen hundreds of people run businesses at this point, and nobody knows what they're doing in the beginning if its their first time so you just gotta get out there and try it and learn, and that's the most important thing is learn from either your successes or failures. And I will say the learning process is so much easier if you are a scientist becoming a business person than trying to do it the other way around. If you get an MBA and then try to learn a science at the level a scientist learns it at, it’s impossible. You can’t get a PhD from Google searching but you can get a lot of knowledge about running a business from online resources and by doing it. I just want to encourage everyone to get out of their lab, out of their comfort zone and into what we consider the market. You have an analytical skill set that you've developed by way of being a scientist, and that can be applied in the same way in derisking a business model as it can be in derisking a scientific hypothesis. And all of these traits that you've developed in running a lab or being a part of a lab, they're all really translatable to entering the market and to starting out in the business world
0:03:22 GL: Yes that scientific analysis mindset testing and refining and retesting... a lot of people in the lab don't give themselves credit for how well that process translates to product development or running a business or customer discovery. What are the major differences though that you do see between running a lab and a business? What are some of the common methods or resources that new entrepreneurs can utilize?
0:03:49 CP: Yeah I love this question too because I started out my career as a researcher in a lab at a biotech startup, and now I am kinda on the other side of the fence working at a startup. So I’ve seen both sides of it and there are a lot of similarities to running or being in a lab and running or being in a business, in a startup. In both, you have to report what you're working on, you have to report what your results are from your studies, your studies are going to be different but you have to report those results. You have to research what has already been done. In the scientific sense it’s by doing publication searches and lit reviews, and then in the business sense it’s looking at what's already out there in the market, either by searching for them online or hopefully by talking to your customers asking what they're already using to solve the problem that your technology might be able to solve. And in both, as you mentioned, you're running experiments. Obviously those experiments will look differently, but you're still running experiments and derisking your hypotheses, in both situations. That being said, the biggest difference is that your experiments look extremely different. When I was in a lab, I was setting up Western blots, running you know key PCRs, and we were doing all kinds of studies that had no application when we’re thinking about experimentation in running a business. But then again that mindset is still the same. You set up a set of hypotheses about what your business could become so what value could you provide, who might your customers be, how will you distribute your product. All of these are hypotheses in the beginning. Hopefully you don't just write them down on a 30-page business plan. Hopefully you make it maybe a one page, something like an ontological model, the business model canvas, the lean canvas or whatever canvas you want to use. They’re all helpful tools. So you write down these hypotheses, these guesses, and you do some experimentation to derisk those guesses and validate or invalidate them. And that experimentation process is very unfamiliar and very different from what you do in the lab because that experiment is talking to your potential customers. And you have to engage with your customers early and often. You can’t just hole yourself away in a lab and build the technology and then once you have it perfected, you'll come out and the world will be lined up waiting to give you their money. So you have to constantly be engaged in this agile development process of test, develop, test, develop and it’s a cyclical process. That experimentation process definitely looks different depending on if you're in the lab or in the business side, but again that the skills are translatable so you can do it, it's just a matter of setting up the hypotheses, the guesses, and then derisking them.
The other difference that I think is important to note is that in the scientific world you are an expert in what your technology or your technical vertical is. Once you step up outside of the lab and into the market, you are no longer an expert and you should never consider yourself to be an expert even if you're 20 years into becoming a serial entrepreneur. Always have a beginner mindset because it's a great place to be at, to constantly be getting advice and feedback and value from mentors, and coaches, and even your employees that you might not have otherwise gotten if you were perceiving yourself as an expert. So there's a little bit of an uncomfortable place in that you're kind of beginning from scratch again, but it's a really exciting place to be at too. You’re a blank slate. You're learning a whole new field and you're learning from your customers that can give you a wealth of knowledge. Stay humble and stay open to learning when you start to transition from the lab to running a business.
0:07:25 GL: That’s great advice. Be humble, be open, be flexible. It really benefits you when you are entering this new field, especially when doing Customer Discovery and Product Market Fit. It can be hard to hear that the solution you've designed isn't exactly right, that there isn't the exact fit that you thought there was. You might at first say, “Well I'm an expert in my field and I know my product is great,” and then you meet with the customers and they say, “Yeah well, I guess I can use this, but it doesn't actually do what it I need it to do.” Being open to that criticism is so important so that your product can evolve into finding the best fit possible.
0:08:09 CP: Just because you are building something that you might want, you might be your own customer, it doesn't mean that everyone else is necessarily going to also be interested in being a customer. And even if it is the case, you still have to understand the quantified value that you're going to provide to that central customer. Is it worth $1 or is it worth a million dollars to them. So understanding what pain points you’re solving I think are super important and quantifying that is where a lot of the Customer Discovery helps to come in.
0:08:38 GL: One of the other issues that innovators coming out of the lab have to face is building a team around their solution. That's another area that might not come naturally or be totally obvious to some innovators. What type of team dynamics should scientists be building around themselves to support their startup’s success?
0:08:56 CP: I think it’s really challenging to be a solo founder. You don't have a sounding board; you don't have another person challenging you and holding you accountable and helping in the brainstorming sessions, so I do think it's great to build a team as quickly as possible and ideally that team is not only your employees but also co-founders and mentors. When you think about your co-founder, which is probably the most important other person on your team in the beginning, don't just look for someone who looks like you, as in has the same background but more importantly make sure that they have the same vision and the same ambition of where this company could go, and the potential of it. And also make sure that your roles and expectations are well-defined and understood and agreed upon, across both founders or however many co-founders you might have, because that's where I've seen people trip up especially when money starts to enter in the scenario, which is a great thing, if you start to generate revenue, that’s fantastic - but early and often, just like you do with your customers, talk to your co-founders about your goals, where you see this going, and have constant check-ins. With Lignolix we have weekly team meetings on purpose, and then in addition to that we are constantly chatting on Signal or Slack. And if you are thinking about employees, separately from co-founders, if you are thinking about employees, try to think about the skillsets that you don't have already. Again if you're a lone founder or even if you and your cofounder are lacking in some skills, what I recommend every founder do is to complete a SWOT analysis for yourself. So a SWOT analysis stands for Strengths, Weaknesses, Opportunities and Threats. Typically you do that for a market opportunity or for a company, but I would encourage you to do it for yourself. What are your strengths? What are your weaknesses? What opportunities do you have maybe even outside of this venture. You know, are there other offer letters you foresee from companies that might want to hire you or could you become a professor at your University instead of doing this company. And then what threats might you have coming in. Maybe that could be perceived as risks, like you know you have only so much savings to have a burn rate of you know six months doing this without getting paid, or whatever it might be. But the most important are the strengths and weaknesses there. So what strengths do you bring to the table? And be honest about that. And identify your weaknesses. A lot of time for technical founders the weakness is around the business side of things. So you don't understand the financials, you don't understand what it takes to build a business. You might not understand what it means to build a team. And so look for people that can fill those weaknesses that you have so that you're creating and building that while rounding a team. And then the final point I have is to think about the culture you want to build. I think this is something that we at Lignolix have just been kind of talking about a bit more because we hired two interns, they’re students, and we were kind of talking about how we want to...just the simple thing of how we wanted to present the offer letter to them. We had to have a conversation about what's the culture here. Are we very buttoned-up and formal, or are who we actually are and we’re homebrewers too and we make our own bread, and you know we're just like cool people that want other cool people to join. So I think it's important to identify your culture that you want to set because that's going to continue to permeate through especially as you grow. It's going to take a mind of its own and so you want to be mindful of it in the beginning. I'd recommend reading Guy Kawasaki’s “Art of the Start.” It's a really great book that helps to talk about setting a mantra. It's not this like mission statement or vision statement, but it’s a simple mantra that you can live to, and maybe it's six words and you have it as your laptop background or a sticky note on your computer or wherever you might be doing a lot of your work and that's just something that you constantly think about.
0:12:32 GL: Great point, that Company culture aspect. A lot of early-stage startups that we've worked with haven't given that a whole lot of thought, and it can get tricky, as you were saying, especially if you get too many people who are very similar and have the same culture. It can make it more difficult to bring people on board who don't have that same culture even though your company may benefit from their skills and their perspectives. It may be difficult for them to feel comfortable within the culture that you’ve set up, it's good to be mindful of that from the onset. You also mentioned mentors. What role do you think mentors have and at what stage do you see them coming into play?
0:13:11 CP: It’s a great question. I think it's really important to find good mentors maybe even before you get started. People who are going to help encourage you to get over that hump of- “okay, I'm a scientist or an engineer in a lab and I need to become this thing that I’m not and who can help me navigate that” and all the way through an exit. Right? If you get all the way to that point 10-15 years down the road, and you’re super successful and you’ve scaled a business and somebody bought you out, hopefully you still have mentors at that point too. There are lots of flavors of what I would call helpers, mentors is one of them, and these are people that are interested in helping you and your company grow, so there's a little bit of a balance there. Whereas a coach is more so interested in helping you personally grow separately from where your business could go, and an adviser is someone who wants to see your business grow and could really care less about your personal issues unless they affect the growth of the company. As a mentor, this kind of balance of being a coach and an advisor is really important. So this is someone that hopefully you can have these regular meetings. Maybe you set it up intentionally every month or every other month or maybe it's just like an as-needed kind of basis. And you know you, if you have an issue that this particular mentor can help you out with then you reach out to them and ask them for their time. What I don't like to see happen is when people recruit mentors to put these like big name, famous people on their slidedeck to say like “this is my mentor.” Is it meaningful? In more cases than not, it's not someone who's really going to be helpful to you on a day-to-day or month-to-month basis so look for someone who's going to be unpaid. They're not looking to get paid as a mentor. That is a huge red flag. If someone says, “I'll mentor you but my time is valuable and here's how much it’s worth” “Great, thank you. When I get to that point if I want to hire an advisor maybe we can have that conversation” but a mentor is someone who's in it for your growth as well. And they should be really well-connected because that’s a really important aspect of being a mentor is they not only understand your situation, but they know how to bring in the resources to help you overcome whatever challenges you have, be it fundraising or customer development or sales strategy, marketing strategy, whatever it is. And then I think a lot of people struggle to find mentors. Look for training programs that provide instruction and education, like accelerators are incubators or maybe there's a program at your university, and those...either the instructor or program manager there could be a mentor or the people they bring in to help with that program could also be a professional mentor for you. And go to events. Go to virtual events that are taking place and see...you know go talk to those presenters afterwards. Send them a message in Zoom or whatever platform you’re on, or send them an email afterwards and say “Hey! Thank you for your time today. I’d love to follow up with you and get some more advice.’ The one book I love that speaks to this is “Startup Communities” by Brad Feld. If you haven't read that one, I would really encourage it. It talks about all the kinds of stakeholders within a community and how they might come together.
0:16:09 GL: Wow, that was so much great knowledge right there from the qualities of a good mentor, to finding them, to how often you might meet with them. And the distinction between mentors and advisors is so important. Mentors are often actively seeking to give back, versus advisors who are usually hired for that role. Mentors are real gems in the ecosystem. It's always great to have that extra insight, that extra encouragement and it's great to have someone on your side.
0:16:37 CP: Yeah, I love being an actual mentor or self-described mentor in other programs in a volunteer sense. So I do executive mentoring with the business school at the University of Delaware and then I mentored high school students at our local high school when I was back on site. I can tell you from a mentor’s perspective, we love to do it. We love to see you as an entrepreneur grow and we love to be some small part of that and we love to hear the progress updates. As a good mentee, it’s great go back to your mentors at any point in time, and say, “Hey! Thanks for your help! We were able to do X Y and Z.” I just got an email this morning from one of the teams that I mentored in the past, and he won a $100,000 grant. He was so happy and I was very happy for him that he was able to do that and that I had some small part in helping him get to that point. It’s a two-way street - the mentor-mentee relationship.
0:17:25 GL: Ah, that’s great to hear. I like that mentors do get something out of that. It can seem like it's just giving, giving, giving, so it’s great to hear about those moments where the successes are shared. Let's switch gears here a bit into intellectual property or IP issues. What kinds of IP issues are you going to have when you are in a lab and you want to use some part of the research that you've been doing for your startup?
0:17:53 CP: Sure. I’ll preface with I’m not an attorney and I understand that there are differences even within the United States. There are differences at each university and college and especially in other countries there’s going to be differences in how your university handles Intellectual Property. But in general, more often than not, the way that it’s perceived is if you are using University resources, like your time while you're being paid as an employee or a researcher at that university, or especially if you’re using any of the actual resources within the lab to develop any novel piece of innovation and IP is generated from that - either patents for trade secrets or copyrights or whatever it might be - it is typically the case that the university owns that Intellectual Property because it was University funded in order to be created. And again it varies but more often than not that's the case. You have to think of it from the legal perspective. You are an employee of the university, a researcher at this university. You have developed some IP that the university owns. If you also are a company, this startup that wants to license this piece of IP within the university, that’s a separate legal entity and you are just like all the other companies out there in the wild that might want to license that IP. So you are now competing with every other potential company and you have to provide a reason as to why your value as the licensee makes sense for the university. So you then have to license your IP to your own company from the university. Thinking about it from this legal perspective of licensing your IP away from your university to your company, it's really helpful to work with an experienced patent attorney to understand the norms of this. So there's going to be a licensing agreement that is put in place, and that licensing agreement has some terms in it. They are all legal jargon, so you are going to want someone to break it down for you. One of the most important things is the royalty rate. That determines how much you're going to have to pay back to the university in order to be the licensee of this piece of IP. And there are industry standards, so you know chemical tech startups like the one that I'm working with, the average is around 4% of royalty rate. You know that's kind of what you look for, a range, but it should always be less than 10%. And in part Tech Transfer Offices are aware that they're not going to be the revenue-generating aspect of the university. That comes from tuition dollars or grants from governments or companies. Tech Transfer Offices are there to support the innovators within the university, to breed the societal and some economic impact and to help translate these phenomenal discoveries out into the real world. And the other big thing is be aware of what you're paying for. If you're going to go for an international patent, a PCT, you need to understand what countries to file in before you even get to that point. Customer Discovery can help you do that. If there are a lot of customers in a certain country or certain set of countries or there are distributors that are going to be located in certain countries or manufacturers, then you need to understand that and file in those countries. But if it's not necessary to, then only go for the countries that you need to be making, using, selling or distributing in because that’s what a patent will cover, or IP will cover. So don't pay for what you don't need.
0:21:15 GL: That's a great mantra in general: Don't pay for what you don't need. Have you seen many differences in the lab to market experience innovators have in the US versus the rest of the world? Are there differences?
0:21:26 CP: There are...again...I feel like there are a lot of similarities. I have worked with entrepreneurs in many countries including South Africa, Ukraine, Vietnam Egypt and most recently I was teaching a Canada program called “Lab to Market.” So I have had the benefit of seeing how different ecosystems work, how different actually technologists approach entrepreneurship and the obstacles they have to overcome. There are different obstacles absolutely in different countries. The obstacles in Ukraine are going to be very different from those in South Africa or Senegal, but nevertheless there are still obstacles that you have to overcome just like in the US there are obstacles that one has to overcome. And obviously culture is going to be different even within the US, we have so many cultures. It's a great blended set of cultures but you have to be mindful of how you approach... you know especially when you’re doing Customer Discovery. This idea of talking to central customers - what's the right way to approach that conversation in different cultures. I will say that the big difference though between US based entrepreneurs and non US based is that in the US we have the luxury of a very large diverse market. So almost anyone can come up with an idea and there's going to be some customer somewhere in the US that you can sell it to. And when I teach US entrepreneurs, I have to push them to sub-segment the market and focus on a beachhead. The beachhead is just another term for your best first market opportunity. It doesn't mean it's going to be your only ever market opportunity, it just means what is the best first. And the way I think about it is that is kind of on a matrix of potential and challenge - so what is your biggest potential and combined with what is the lowest challenge to penetrate that market. The major point here is that the US has the luxury of a big market, but we still have to be mindful of sub-segmenting that market and focusing on a beachhead. Whereas in other countries you might have to look abroad for your customers. Like the Canada “Lab to Market” was all focused on ocean technologies, so people were doing Customer Discovery as far down as into Chile. So I will say though you know the COVID pandemic has changed a lot of our lives in some very negative ways, but the one silver lining I guess if you can call it a silver lining is that it has normalized virtual meetings. So these virtual meetings are agnostic of where you live. These virtual meetings allow you to have these customer interactions with anyone in the world now so you don't have to worry about who is in your immediate geographic range when you're thinking about your beachhead market.
0:23:56 GL: Yes, we often have innovators who come through our programs who are thinking of their market as confined to borders of their home country, but because many countries are much smaller than the US and more homogenized, more similar that maybe can be a much smaller market with a much more narrow focus of needs. We will usually encourage those startups to expand their market to a larger region in the hopes of finding additional audiences. And now, as you pointed out, it is easier than ever to connect with potential customers outside your nearby geographic area using tools such as Zoom. These are all fantastic points Christina. Do you have any closing thoughts that you'd like to share with our listeners?
0:24:39 CP: I just wanted to say, that there are a lot of challenges to becoming an entrepreneur, especially if you're starting out from the scientist or an engineer, some kind of technologist. But I specifically wanted to tell the women entrepreneurs that you are capable and you belong, and you do have the power to make big changes with your technology. And I think a lot of women are underestimating the potential that they have. And there's even a Forbes article I just read recently that mentioned how phenomenal women are performing when it comes to running their own tech companies. one of the stats said that they have achieved 35% higher return on investment than their male analogous companies. So I just want to tell all the women out there you can do this, and it is your right to be out there playing in this field of making it work with your technology in a business aspect. And I look forward to seeing what awesome companies you women create.
0:25:35 GL: Christina that's a great way to close out today’s talk. Christina Pellicane, VP of Business Development at Lignolix, thank you so much for joining us today.
0:25:43 CP: Yeah, no thank you. It was a pleasure being here.
0:25:45 GL: And for our listener's, thank you for joining us and we encourage you to check out our other GIST Innovation Talks by visiting our website GISTNetwork.org