BioMedTech entrepreneur Darrin Disley challenges whether a lot of so-called ‘killer’ technologies are genuinely disruptive.Dr Disley, CEO of Cambridge UK based personalised medicines trailblazer Horizon Discovery, also says too many innovators are churning out technology that has no market.
Horizon was recently voted Business Weekly’s ‘Business of the Year’ and Dr Disley has been devoting hours of free time mentoring Cambridge University Entrepreneurs members.
Dr Disley laid out his mantra for startup success in an interview for Business Weekly with CUE’s Michelle Jane Stewart.
He said: “There are many ingredients to a successful business but it almost always starts with a disruptive solution to a problem. In my experience, rarely are ideas truly disruptive – exhibiting the potential to completely change the way we do things or view the world.
“Many innovators make the mistake of providing solutions to problems that either do not exist or do not have critical value to a clearly-defined market demographic.
“To me, identifying problems is the hardest and most important part! Once you have that sorted, you can begin to innovate, identify a platform, product or service solution and quantify your company's value to investors and most importantly your customers.”
Dr Disley talks from strength. The Cambridge University alumnus has been involved in the founding and growth of 10 technology ventures. He has also advised on commercialisation strategies to key technology centres in Europe, the US, India and Africa.
Dr Disley also stressed the importance of startups building the right team. He said: “It is crucial in any venture to assemble the right team of people who can deliver both the technology and product development plans within the context of a well-conceived and realistic business plan.
“At the end of the day, investors back people as much as, if not more than, any technology, product or service. Personally, I am looking for people who realise that customers should always be the focus of their efforts and placed at the centre of their business plan.
“When I invest in a start-up team, I need to make sure that they are passionate and able to go the distance but at the same time, I also need them to be pragmatic and honest with themselves - knowing when to change course or even stop is just as important as knowing when to persist and not give up.
“I also look at their leader to see if they are able to sell the business, not just to investors, but to the rest of the team and to customers. A good leader will also be able to inspire his team to band together even in the face of adversity or setbacks.”
Dr Disley said it was key for a startup to know when to shelve the business plan and start getting their hands dirty.
He said: “A business plan is only an initial sales and operational planning tool. Soon you will have to make the leap and actually get your hands dirty, to begin implementation.
“As for when to stop planning and start doing, once you have determined the key risk vs reward milestones it is time to push the pedal to the metal. It is essential not to enter what is known as analysis paralysis (i.e. thinking too much) or become gun shy, but to get out there and meet your future partners, customers and investors.
“Many aspiring entrepreneurs I talk to have plans only as far as developing their technology, validating it with a few early-adopter deals, and then sell it off as soon as possible to a larger player (invariably one located outside of the UK).
“The classical start-up route often builds on a period of technology transfer, textbook financing strategies and conservative business development.
“There is a fundamental misalignment between this model and how most entrepreneurs that I know think. I look to build businesses in the most capital efficient and non-dilutive (of equity) manner possible, getting ahead of the classical financing game and gaining early customer validation or even customer investment. This, I would argue, gives you the best chance of building a long-term sustainable business.”
Maintaining control of its own destiny has been one of the main reasons for Horizon’s success, according to Dr Disley.
He said: “I think the management team’s ability to maintain enterprise control of the company has much to do with our success to date. We got ahead of the game by importing a US technology that had been built with >$50m of NIH funding.
“Then by in-licensing a range of derivative products made using this technology at universities located around the world we were able to generate product and service revenue from day one. This is quite unconventional and allowed us to demonstrate a proven track record when we went for larger rounds of funding.
“By bringing in corporate investors (Genentech and Roche) whose motives were grounded more in early technology access rather than early financial returns, we were able to keep close alignment of interest between the early shareholders, investors, and incoming investors (by insisting on only a single share class and the generation of a private market liquidity).
“This allowed the management team much more freedom in decision and deal making. It was a difficult path to take when easier investment was available and we had to operate under sub-optimal operational conditions for a long time (without a fancy building or the usual trappings of a well backed VC start-up).”
Dr Disley has been an avid supporter of CUE through his own mentoring efforts and through his Carpe Diem Trust; collectively they represent CUE’s biggest sponsors with £22,500 of support in 2011/12 (£100k over five years).
He said: “We need to support the next generation of young entrepreneurs. The future of our living standards, social cohesion and the UK’s broader standing in the world is dependent on their success in building the knowledge-based economy essential to deliver high levels of growth for the future.
“It’s important to maintain a healthy entrepreneurial environment at the University and I want to create an environment of challenge and opportunity for the next generation of entrepreneurs by passing on my skills or helping out financially.
“My generation has funded our lifestyles on high levels of debt for 30 years, which is unsustainable in the long run and harmful to the prosperity of future generations.
“We cannot focus solely on selling services to each other, nor can we rely on a contracting industrial base grounded in a golden age long since gone. The UK must build businesses with non-organic growth potential (healthcare, CleanTech & hi-tech) to ensure jobs and prosperity in the future.
“Developing and honing entrepreneurship as well as entrepreneurial talent is paramount. This is why we hire mostly young people at Horizon to give them a chance, train them well and provide them with long-term mentorship and opportunities to lead.”