There are many ways to found a startup in the science industry. Whether they’re developing a spin-off to a university project or a private business, either alone or in a team, science and healthcare founders are forced to face great challenges. Strict-legal guidelines, a high technical risk, and limited access to capital often prove difficult obstacles to overcome. Founders need a remarkable amount of resilience, which often pays off in the end – startups with smart technologies and scientific points of contact, which in the health sector can, for example, lead to the improvement of existing therapies, are currently sought after by established corporations.
In order to make sure that founding your startup in healthcare, life science or performance materials works out, here are a few points that you should take note of when you’re starting out. More individual advice from experts, as well as financial support is available at the Merck Accelerator.
All technology needs a customer
Consider yourselves from the perspective of your potential customers. Sure, your product solves an urgent scientific problem, but remember that there’s still a customer or user behind your product. Healthcare and life science are special industries that can serve the most diverse range of stakeholders, including those in the science sector, public administration, business industry, and end consumers. Your target group consequently approaches you with certain expectations. This presents a big challenge to startups when it comes to creating a business model. For this reason it’s important that you place yourselves in the role of your target group. The same goes for the use of technology. Here further ideas for a certain field are often hidden behind solutions for a completely different sector that can influence or even inspire your business model. For example, the company PEAT uses photo recognition and artificial intelligence in order to diagnose diseases in plants. A technological macro-trend thus finds an application in traditional agriculture.
It’s a long road to funding
Financing a startup in the science industry is considerably more drawn out and arduous than finding funding for a classic e-commerce company. Investors have to account for the fact that it can take a while until the prototype of an idea is finalized. For the duration of this period you’ll need financial support. As soon as your idea is ready for the market, you’ll see that the wait has paid off. This point makes clear another key requirement for science founders – patience. Innovations that are later to be implemented in the day to day of clinical life and placed in contact with patients have to function beyond any measure of doubt. A prototype that is not quite ready cannot simply be tested out on a patient. Founders are under a great deal of responsibility to offer proper healthcare and research. In the agricultural industry for example, the same goes for food-related products.
An interdisciplinary team forms the basis
For life science and healthcare entrepreneurs in particular, lots of time and hard work is invested in technology. There are often extremely complicated processes hidden behind business ideas. Nevertheless, certain topics that are essential to the founding of any startup must remain on the agenda. This includes, for example, the emphasis on market research, the clarification of legal frameworks, a thorough business model, as well as marketing and financing. Simply employing staff with a background in science won’t work in the long term. Where possible, it’s important to build an interdisciplinary team from the very start, as individual employees often go on to adopt a second role, too.
Always bear the law in mind
The healthcare industry serves as an example here, too: young founders discover many guidelines and laws, in the German healthcare system especially, that put a stop to innovations in the digital age. For this reason it’s important to comb through the legal foundations of the market thoroughly, and to consider any legal frameworks whilst in the early stages of business model development. The example of the startup DrEd helps to highlight exactly how this point can lead to either failure or success.
DrEd is an online doctor service based in England, whose business depends on online consultations during which patients receive a diagnosis and prescription from the comfort of their own home. Since the business is based in England, it has been able to use a legal gray area to bypass German laws governing the medical profession and its related ban on remote treatment. In August 2016 legal loopholes were tightened in order to ban the licensing of online prescriptions. This situation has not had any influence on DrEd’s number of customers. Consultations via remote treatment are still increasing and for patients of DrEd the location of the pharmacy dispensing their prescribed medication is irrelevant.
Turn to market experts
Access to expert knowledge is essential to founders. Not having a degree in biotechnology or medicine etc. means being dependent on external help. It goes without saying that a young startup does not have the same access to expert knowledge as a long-standing company, it simply lacks the experience. Willingness to support startups does, however, seem to have set in amongst larger corporations and businesses. With a little research, it’s not hard to find an Accelerator Program that fits your business field. Almost every program offers ideational as well as financial support . Even if it doesn’t work out with an accelerator, in certain industries there are still opportunities to seek help individually. Even if a lawyer is expensive, it pays to invest in legal protection.
About the Accelerator Program in Darmstadt
The Merck Accelerator Program in Darmstadt supports early stage businesses focusing on the healthcare, life science, and performance materials industries. Further focus fields sought by the Accelerator include bio-interfaces and sensors, precision farming, 3D printing, future-oriented organic chemicals, microbiome research, and smart site management. The program is primarily focused on digital business models. Selected startups will gain access to office space in the new Merck Innovation Center in Darmstadt, which will be completed in early 2018, as well as mentoring and intensive coaching from a network of over 50,000 experts from 67 countries. In addition to this, they will receive up to €50,000 in funding. International startups can apply until November 13 2017 via the following link: https://www.f6s.com/germanyspring2018