Monday, April 30, 2012

Don’t Play That Song Again

I hesitated posting this because it sounds very self-serving, and because I’ve made the point before. And before that. But I think it’s worth noting, and the validation of the point is noteworthy.

I recently attended the Xconomy Forum: New England’s Emerging Biotech Stars. It was an interesting juxtaposition of panels and company presentations. The point that stood out for me, that was made by both Joe Yanchik, CEO of Aileron and by George Scangos, CEO of Biogen Idec, was how important “team” is for biotech companies. The point was made in two very different ways, reflecting the vast differences in the two companies.

In his presentation, Yanchik repeatedly pointed out how impressed he was with his team, and how much of an impact a small group of people has been able to make. It’s a cool technology, and they’ve attracted a great syndicate of investors. If you look at the company’s history, they operated with a very small team until they had validated some key scientific findings before hiring a bunch of people. Great. I totally support that plan. There’s no need to hire me to find a bunch of senior executives when they’re not really needed. This point was echoed by Mike Webb in another forum a couple of weeks later. Mike reminded the group about the days when a young entrepreneur would found a company, walk across Kendall Square, pick up a big check from a VC, hire a complete staff of VPs, and start burning cash. His analogy was to a fire station. With all due respect to firefighters, we’re all very happy they’re there when there is a fire, but most of their time is spent not fighting fires. The senior executives in startup biotech companies back in the day spent a lot of time sitting in their offices reading Nature Biotech.

But once a company reaches critical technology mass, it’s important to have the right group of seasoned executives to carry the technology to market. That’s when you call me. And it’s important to do so, because that’s when there’s tremendous value in being able to walk down the hall to someone’s office and talk about the article you just read (last night at home) in Nature Biotech.

Scangos made the same point in a different way. One of the first things he did after coming on board in 2010 was to initiate plans to bring the entire organization back under one roof. Well, ok, not precisely one roof, but at least all within walking distance of each other. Interlocking his fingers, he underscored the importance of having R&D, Sales, Marketing, Finance, etc. all working together and able to interact. It’s what humans do. The move back from Weston is expected to be complete by the end of next year, and will cost millions. He’s a smart guy, and recognizes that it’s worth it. (Do you think he’d get BoD approval if it weren’t?)

Just to add icing to the cake, at a WPI Venture Forum event last year, Kevin Bitterman was asked to rate the relative importance of technology and management team when Polaris evaluates an investment opportunity. His answer? “Management team, management team, management team, management team and technology.”

The point was furthered by Mark Levin of Third Rock. In a free-wheeling interview by Tuan Ha-Ngoc, CEO of Aveo, Levin commented that the fastest way to be shown the door at Third Rock is to come in with a slide deck articulating a plan for a quick flip. They’re interested in building companies. Maybe not the next Amgen or Genzyme, but a company. And companies consist of teams. And teams get things done, not CROs that are 8 time zones away.

Well, as I said, it may sound self serving, coming from a recruiter’s perspective, but I think it’s an important point. And it’s nice to know that I’m not the only one who feels that the expense incurred in building top executive teams is worth it. There are some people putting real dough against it. I just can’t countenance plans to build “companies” with 3 FTEs and a host of outsourced support.

Wednesday, March 14, 2012

Getting From A to B

I had coffee with a biotech CEO the other day, and as is often the case, the conversation turned to building top tier executive management teams. We spoke about a need in the company’s Board of Directors, and how some of the other BoD members were seeking a very high profile candidate. They wanted an “A team” director. Through their own personal networks, they had identified three very high profile people, all of whom I knew. We both danced around it for a while, but it ultimately came out – none of them would have been good for the company’s board.

What I knew, and what the CEO suspected, was that all three had been very fortunate in their careers. Not that they lacked any talent, but in large measure, they happened to be in the right place at the right time. They had had some early successes in their respective careers, but had all been drinking their own Kool-Aid for too long. One in particular, perhaps the most high-profile of the group, was on the board of a company that I knew and had personal knowledge of his participation there – or should I say lack of participation. He was known to come to board meetings never having read the board book, completely unprepared, believing that the mere aura of his presence in the room justified his compensation.

I said to the CEO: “That’s why I always cringe a little inside when people tell me they want an A team candidate.” It depends on what you mean by the A team. If you’re looking for “marquee value,” then yes, perhaps the heavyweight who doesn’t do anything is appropriate. However, I’d argue that what you really want is someone from the B team. Now before you all jump on that, let me explain.

If any of you have college-aged kids, you know how impossible it is to get even the brightest, most qualified students into the “top” schools. The competition is unfathomable, and is orders of magnitude more so than when I was applying. My advice to college bound kids? There is a small club of the very top schools – the Ivys and the “Ivy rejects.” There’s also a tier at the very bottom with shaky credentials. But in the middle, there is an enormous range of perfectly good schools that will provide you with tremendous opportunity, where you will get a world class education, and with faculty and facilities that can compete with any Ivy. Many of the students at the schools in that middle range could easily have been at a “top” school, but there simply isn’t room for everyone. Any arguments so far?

So when we’re looking for top talent, I’m far more impressed with what someone has done, than I am with their pedigree. A resume with top schools and “Academy” companies is nice, but when I’m building a team, I’d rather stock the pond with eager, energetic, roll-up-the-sleeves types, not the folks who are riding on past successes and have great resumes, but are secretly relying on the hard work of subordinates to get things done. That’s what I mean by the B team. They’re the executives who, by sheer chance, were the ones who were not selected for the position at the top company at some point in their careers. Maybe they were the number two or three candidate, and the HR person didn’t like their shoes. Maybe the chemistry between the CEO and the successful candidate was just better. It doesn’t mean the B teamer isn’t capable or couldn’t meld well in a different culture.

Of course, none of this is to say that there aren’t great, accomplished, hard working, skilled executives (with nice shoes) who are at the top tier companies. It’s just a caveat – don’t get taken in by the brand names, when there are “generics” that are “bioequivalent.”

Thursday, February 16, 2012

The Impossible Dream

It’s been a long while, but I have a reasonably legit excuse. It’s been crazy busy, including a sellout for the second annual Startup Downhill. I have several topics started, but this one trumps them.

This morning I attended the Mass High Tech BioForum. The topic was quite broad – how to get your life sciences product to market. As you can imagine, the discussion was similarly wide-ranging, though nicely kept apace by the co-chair of Foley Hoag’s life sciences practice, Jeff Quillen.

When it was announced that another Foley Hoag attorney was going to give the keynote, I didn’t have high hopes, since my experience is that in this type of setting, lawyers get way too deep into technical details, and lose sight of the objective. I was pleasantly surprised when Paul Kim gave a great overview, with particular focus on the FDA and some of the challenges of commercializing products in this highly regulated context.

There wasn’t time for my question, but as you know by now, I sure had one. It was intended mostly for Paul, and here’s the issue:

Years ago, my kids were watching some DVDs in the back of the car while I was driving, so I was only half paying attention. There was a scene with what must have been an ad on TV for a drug. One character says to the other, “Wow, all those nasty side effects.” The other says, “Oh, they just say all that. Those side effects never happen.” “Well, then why do they put them on the ad?” Pause. “In case they happen.” I was secretly chuckling to myself, because it is precisely true.

So my question for Paul was, “Is it possible to have an agency that works?” On one hand, the public wants absolute safety. The role of the FDA is to ensure that drugs and devices that make it to market are safe. We don’t want to think of ourselves as Guinea Pigs. On the other hand, patient advocacy groups and others exert constant pressure to get drugs to market rapidly, and criticize the agency for unnecessary delays. So what’s it gonna be? Safety or access? I would argue that you can’t have both. If someone from the agency is going to get dragged in front of a Congressional Sub-Committee every time someone has an adverse reaction (or death) from a drug product, who at the agency would ever take any risk? There was a time, in the memory of some of us, where the mood at FDA was to evaluate products based on safety and efficacy. The feeling was that it was not their job to determine whether or not the market needed another me-too product. That pendulum has swung completely in the other direction to a far more paternalistic attitude, where me-too products now need to show a clinical benefit that exceeds that of existing approved products. (Which begs the question, is it ethical to do a placebo controlled trial when there are approved products for the condition?)

I’m not a huge fan of the FDA in general, but agree with panelist Bruce Booth that they do shine in certain areas of regulation. In their defense, I don’t see how a government agency can effectively navigate the balance between protecting the public and facilitating rapid deployment, within a political climate where a single misstep is grounds for dismissal.

Once again, no solution, just framing the problem.