This blog was written by Jason Gardner, Atlas EIR and founding CEO of a new stealth-stage startup, as part of the From The Trenches feature of LifeSciVC.
What are you doing? This is the most frequent yet simple question that I have been asked since joining Atlas Venture last November as an Entrepeneur-in-Residence (EIR). What’s that job? Is a closely-followed second.
I will tackle both questions in this blog, and give some perspectives on how there are some surprising learnings from pharma that apply in early stage biotech venture creation.
My story starts earlier in 2015, when I met the Atlas team through an unlikely route as I joined their regular Thursday morning running group for a few brisk miles along the Charles River. Good ideas ignite anywhere, and I fell into a pace and conversation with Bruce, who described the EIR role. Over a few more miles of running we convinced each other that this might an interesting path.
The past three months at Atlas have been an invigorating journey and, together with Third Rock Ventures, we are now building a spectacular company in a challenging area of medicine that is ripe for biotech innovation. The details of that story will be the topic of a future post. This blog is about entrepreneuring in venture capital, and although there are some parallels with pharma, there really is nothing that can prepare you for the transition.
The notion of biotech entrepreneurship is exciting, risky and conjures up images of a glorious new company launch or abject shark-tank failure. It is taught at several university courses and is the topic for many excellent books or websites. Some of my friends thought it sounded cool, and former pharma colleagues who had made the transition waxed lyrical of the uninhibited joys ahead. To me, it represented a unique challenge where I could work with a great team, think differently, and ultimately create a new biotech company that would make a difference for patients.
At the most basic level, the entrepreneur identifies and builds a scientific idea or dataset into a new company by forming a team, fundraising, and progressing programs to create value. Often the nucleating science emerges from an academic lab or a company spinout program, but both starting points need some skillful facilitation to extract and create a new enterprise. It’s hard work, requiring a decent nose to sniff out the good from the mediocre science, together with a reasonable understanding of the business principles at stake in early stage investment.
The -in residence suffix provides the most curious part of the job description. This has been liberally adapted from a university origin where a member of staff is provided time, space, and sometimes funding to purse professional interests – usually with a creative mandate (think artist/poet-in-residence). Many venture firms, pharma and academic institutions have pioneered this role in biotech, and now have multiple EIRs on their team. The vast majority (>90%) of the Atlas EIRs over the past few years join with significant experience from pharma or large-cap biotechs where they have worked not only on successful projects, but also learned some of the judgment skills in spotting early winners and losers across multiple therapy areas. This expertise base is invaluable to new startups. Although 75% of recent EIRs on the Atlas roster work in post-Series A portfolio companies, they still spend a decent amount of time engaged in the new seed stage efforts at the firm.
The Atlas Venture headquarters in the Kendall Square penthouse perch provides an ideal microcosm for entrepreneuring in the vibrant surrounding ecosystem. The entrepreneurs cohabit the residence with the Atlas partnership and associate team members with half a dozen young biotech companies that are either in the seed stage or have recently launched with a Series A funding commitment. After months of diligence on the scientific and business questions in parallel with repeating and extending the original experimental findings, some of the EIRs will transition with projects to Atlas companies in operating roles. Others will work with the Atlas team to review new incoming ideas and some will bring new ideas with them to Atlas and start de novo on the company creation journey. There are a lot of sand-boxes in the Atlas playground, and this leads to plentiful open cross-talk between EIRs on key questions, developing clinical and business plans in tandem and sharing networks in the CRO world that are the vital lifeblood of the validating data from the early experiments as a gateway to early funding.
Other thorny questions in the Entrepreneur’s job include how to build the best team and find lab space for the company to grow in. Fortunately, advice is close at hand with the Atlas partners and graduating company teams available to help in recruiting from a network of people interested in joining the startup work together with inside knowledge of the local lab space that might be coming available. Sharing experience (including what not to do), provides an essential value proposition for the semi-virtual biotech looking to leanly leverage its capital.
Moving into this new world from a career in pharma has revealed a few common truths that transcend both worlds and are central to success:
- The primacy of science. Robust, well-validated science that translates to important medicines for patients is the cornerstone of venture-backed biotech. This is mind-and-body-energizing for Atlas where the partners really do roll up their sleeves and immerse cheek-to-jowl with the EIRs on seed-stage and portfolio companies. Significant time and resource are invested to ensure that the path is real, and companies are launched after deep, long-term diligence with external expert input. As a humble EIR, overlooking this scientific primacy principle evokes an adapted Drucker-ism: Science will eat culture for breakfast, strategy for lunch and your business plan for dinner. The same philosophies are at work in pharma; however, the stripped-down, lean startup venture model favors the new areas of breaking science (eg CRISPR/Cas9, Immuno-oncology) where the VC-based EIR model has a competitive advantage and can favor the nimble, carefully-selected team.
- Team, Team, Team are the three most crucial factors for success. Science is difficult and drug discovery is even harder, so the optimal team is central to not only powering up the new company but also to dealing with the challenges ahead as the project inevitably evolves. Attracting a balanced blend of scientific experience, clinical depth, business acumen, judgment and credibility make the ongoing dialogue with investors and potential partners easier and can inspire confidence that you are equipped with the tools to face the journey ahead. Placing the team in an environment that plays to its strengths and does not consume time on group consensus decision-making or long meetings fosters the innovation required to take on the hard biology that always takes longer to resolve. The creation of a vibrant and stable ecosystem along the Boston-Cambridge axis allows more mobility between companies and a broader talent base where migration from large biotech and pharma has been prevalent over the past few years. The best scientists always have choices, and the availability of exciting new projects works to self-select for the best teams, which can be the difference in success and failure for a start-up.
- Focused execution. One of my pharma mentors always said that science and the team were the two key ingredients for making a medicine, but that effective delivery was the difference for success and failure. Simply repeating the initial set of experiments that underlie the central thesis of the science using blinded controls in an independent lab can be the first step on the path to the startup. Confirmatory data in-hand, the team moves to testing the hypothesis with the hard experiments in the “killer” study. Removing the fear-of-failure culture that leads to project creep in pharma enables the team to conduct the most direct evaluation of their science and minimize the probability of the grey results that cloud conclusions. Balancing the focused approach with enough time to understand a new area of complex biology that often requires a deep-dive is a real challenge. Most startups begin with a few projects and apply rifle-focus at progressing through to clinical translation studies. This culture aces sideways pipeline proliferation as a successful metric: one great post-candidate program on track for a solid IND file will be much better regarded by early investors than a dozen early targets without much validation.
So where’s the rub? The EIR role is not for everyone and stakes are high with investors’ money and people’s time as scarce resources. Couple this to a healthy dose of ambiguity and the intensity can amplify in the spotlight. There is no place to hide in the focused VC team culture. The playbook is different for each startup and the elongated business plan has been eclipsed by a return to principles of Science and Team-Team-Team as the motherhood and apple-pies of our industry.
Execution excellence and strong culture of innovation are alive and well in the early stage venture world. Having spent a rewarding decade in Pharma working in various scientific, clinical, business and strategic leadership roles, it felt right to be running with the Atlas team and working together on biotech company creation. The opportunity, including blog invitations, was not to be missed and staying on a focused path should make the next update here on the new company creation path an interesting story.
Many thanks to the EIRs, past and present, who contributed their ideas and discussed this post – George Vlasuk (Navitor), Kevin Pojasek (Quartet) and Stuart Chaffee (Atlas).