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.