This blog was written by Ankit Mahadevia, CEO of Spero Therapeutics, as part of the From The Trenches feature of LifeSciVC
Startup life can be grueling. It’s an especially gratifying feeling when your data and your investors signal that it’s time to shift gears and scale into an emerging enterprise. A great culture, strong team, and great science got you here. However, in the words of the biotech philosopher Martin Lawrence, #@$# just got real.
Issues are more complex, bills are bigger, and there’s a much larger group on board to align and unify for a common goal.
Much has been shared about managing growth personally and professionally in general (see here), though (as I’ve found out) very little exists on scaling a biotech startup. A few things we’ve learned through good advice and hard experience about running a growing business as we’ve managed this process:
Growing up by Letting Go
At Spero for example, our team has grown by a factor of ten and our pipeline has doubled in size (lest biotech investor readers get alarmed this was from a small base) in a span of a year. At that level of growth it is impossible to know everything that’s going on to the level of detail you may have during the early days. In my opinion, a member of a scaling company who claims to know everything is either exaggerating or (more worrisome) doesn’t know what they don’t know.
One of my board members is a big proponent of letting go and I’ve found this to be great advice. Trusting that a transparent culture will ensure that complex decisions are aired and addressed by the group is the only way to stay sane, focus on the big picture, and lay the foundation for continued rapid growth. By contrast, trying to hold on to everything stunts progress and impacts the level of trust and autonomy that makes an emerging company thrive.
Safe hands when you pass the baton: hiring the “next level”
There are two (crucial!) assumptions in letting go: first is that the team around you is top-notch. It’s easy and obvious to focus on hiring great C-level leadership around you – this part of your team is highly visible to the outside world and invites evaluation.
In my observations, the “next level” of leadership is a less visible but arguably more crucial factor that differentiates between scaling companies. At this level, much of the actual @#$# getting done is orchestrated by that experienced group underneath the C-team that’s been there before. Another misconception I’ve seen is that this group is best judged by their technical competence alone: in our view it’s their capability as leaders that will set the stage for how fast and how far our organization can go when we’re far beyond what any C-level officer can directly influence or control.
Letting go is not without side effects: especially for long time team members, it’s a tough transition to not being able to touch everything that goes on when it was possible before. We’ve instituted a part of our weekly teamwide meetings an open Q & A to ensure transparency, (when IT cooperates) share our calendars fully with each other to ensure everyone knows what’s going on, and also store in a common place the data used to drive program decisions even if everyone can no longer be involved.
Resources: Just enough to get you into trouble
The other crucial assumption for letting go of the handlebars is that for each decision the organization makes, whether delegated or not, the responsible parties have a heightened sense of rigor with which they commit the organization to initiatives.
On the investor and operating side, I’ve seen organizations, blessed with cash in the moment, make decisions that have come to haunt them when development spend and circumstance start to squeeze the budget. Once, a company in Phase III I had observed took step of investing in its own (vs. a very good contract manufacturer) manufacturing capability several years ahead of need, and this ultimately the cost of owning it was a key driver in its bankruptcy when approval was delayed. As our CSO likes to say, now is not the time to invest in the vertically enhanced water feature in your lobby.
Essentially, it pays to apply the same (or more) rigor when one is cash flush and capability rich as it did when everything was bootstrapped. Fellow bloggers have written eloquently about this process – to add, it pays to justify an investment both in today’s cash-flush context but also in a more pessimistic version of tomorrow. This process has been helpful at Spero as it’s forced us to really focus on what makes us successful and differentiated, and, accordingly,invest in a risk-gated way.
Scaling a biotech is hard work, and involves in many cases unlearning some of the habits that made you successful as a startup. The payoff is well worth it when the whole of your organization becomes so much more than the sum of its parts .