Questions investors ask

Up to this point, the most difficult standing challenge that I’d faced was my doctoral defense.  Lasting about three hours,the panel of professors lobbed questions, criticisms, alternative hypotheses, and prior papers from 1927 that I hadn’t read while I scrawled diagrams and constructs onto a whiteboard. At one (low) point, my advisor jumped up to start erasing what I’d written – we made a pair, with me re-establishing the text behind his erasing it.

Nonetheless, I got the degree.

Syndicate meetings rival these defenses: a roomful of investors chaining off of one another's questions, baying after signs of inconsistency and weakness.  I actually enjoy the experience but it’s very intense.  I think that it went well overall, but the three toughest questions were:

Q:  How do reductions in infection rates expected from clinical trials correspond to reductions in colonization rates during your experiments?

My answer: Yes, they do.

The underlying truth:  Bacteria colonize the surface and secrete toxins that cause infections.  There’s no data linking the three: our assumption is that a 40% decrease in colonization (overall density or growth in patches) leads to a 40% reduction in toxins, hence to a 40% reduction or delay in infection. The last relation is likely to be non-linear though: a lower threshold level of toxin starts to provoke infection in some patients, and a higher threshold beyond which all patients are infected.  We just don’t know.

Ideal answer: We’ll certainly decrease the concentration of toxins in proportion to the decrease in colonization.  This, in turn, will have an impact on infection rates, but we won’t know how much until the clinical trial.

Q: Have you ever run a successful company outside of a corporate environment?

My answer:  There’s no difference.

The underlying truth:  Medical product development is a process, tailored to the product or service that you are trying to deliver.  As you successfully execute, assets and knowledge accumulate, evidence and confidence build, risk reduces.  This process is independent of the development environment: only the immediate sustained availability of cash and experienced people distinguishes the corporate version.

Ideal answer:  We are following established protocols and best practices set out by clinical, regulatory, and industry leaders.  These arte backed by contracts with experienced specialists doing the  market analysis, patent filings, product testing, and clinical trial organization.  Together, I’m leading a team that is stronger and faster than their corporate equivalents.

Q: Without a central location and a staff comes to work every day, it doesn’t feel like a real company.

My answer: A virtual company minimizes costs and maximizes flexibility.

The underlying truth: A project gathers resources to achieve a goal – it has no longevity once the goal is met.  A business remains together to extend the product, serve customers, and  drive growth.It’s reassuring to walk into an office and to see the minions beavering away at their keyboards and telephones: there are people who care and are on-the-job getting it done.  In contrast, a virtual organization feels relaxed and uncommitted: what are the folks up at Sheffield and down at Brighton doing right now; what are you doing other than imaging what they are doing?

Ideal answer:  As development of our lead compound concludes, we will bring the chemists and biologists to a central location to support market entry and secondary products.  In the coming year we will hire a core staff, including a Technical Officer, Business Development, and Marketing Lead, and identify facilities where the company can relocate at the next funding round.

It’s a process: these kinds of questions help to refine the business and identify opportunities to make it better.   I just wish that it didn’t happen in the context of soliciting investment, where we want to put our best, confident foot forward.

And, nonetheless, we’ll get the money.

Refuge in coding

It’s been a very busy week for travel and meetings.  I landed on Tuesday morning and immediately had to head to Sheffield to meet with our chemists.  Then back to Cambridge for a half-day meeting with lawyers, followed by a full-day meeting in London with an investor syndicate.  Happy outcomes and solid progress all around, but the pace and intensity is leaving me a bit brain-drained Friday night.

I’ve been wanting to get back to the basics of building something – the iconic image of a boffin puttering in his shed has been tugging at my imagination all week.  My software products are developed from streams of medical data, and my eZ430-Chronos Wireless Watch arrived last week.  It’s a personal sensor with built-in temperature, pressure, and accelerometer components  – I’ve been itching to start to put it all together and start to create something great.

The data has to go to a repository of some sort where the user can pull up views of patient activity, beginning to build the narrative.  This suggests an MVC software architecture (Model-View-Cointroller) which, in turn, suggests using a rapid prototyping language suited to these functions.

Like Ruby on Rails.

Okay, I know I’m geeking far out now, but this is as far as it goes: I really wanted to make a slightly tangential point.  Everyone finds relief from a intense period of work puttering in a hobby that they can putter and succeed in.  It may be a garden, a kitchen, an atelier, or a studio; I’ve seen people tying flies, practicing petite-pointe, and tuning engines.  The point is, it’s an activity that is both engaging and idle, engaging and inconsequential.

So I lost myself for a few hours in the intricacies of getting Ruby installed, linking in the Gems manager, running through practice tutorials, writing my first program.  It’s a bit of a fugue that distances from the meetings and travel; it’s just what I needed.

On the ground, running

Business wrapped up in the US on Sunday, allowing for a leisurely drive up to Atlanta for my Monday evening flight to the UK.  I stopped along the way for discount outlets (jeans) and dollar stores (kitchen supplies), so I felt fully stocked as I headed back to Europe.  The only item missing off my list was a few bottles of maple syrup: Piggly Wiggly and WalMart are not prime outlets for  pure Vermont honey.

The flight itself was uneventful.  I curled up with some work and with The Social Network, a surprisingly good movie.  From an entrepreneurial perspective I don’t think that there are any good lessons in life or business embedded in the narrative, but it is an interesting story of driven personalities, driven by events.  I still think that the path to success is in being persistent and flexible enough that you can be positioned when the big opportunity hits, then talented and focused enough to outrun any competition.  These folks certainly had that to excess.

While in the US, I had one business succeed, another crash, and a third materialize. 

CamStent is now oversubscribed, so the focus is really shifted to operations, making the most of the interest and resources that we’ve been able to generate.  This was an example of continually honing the message and presentation, and of being willing to go anywhere to meet with anyone, to secure investment and resources. I literally jumped off the plane at Gatwick this morning, then onto a National Express bus and a train north to Sheffield for meetings with angels and scientists this evening.  It secured 100K GBP and will assure commitments to April milestones.

The business acquisition arrangement that I’ve been working on for over a year collapsed: there’s an adage that ‘Time kills deals” and it certainly was the case here.  The longer the talks went on and people got wrapped into the minutia of worst-case contingency planning, the more they lost sight of the vision, dampened their enthusiasm, and lost confidence in one another.  Many lessons were learned, and we’ll have to quickly re-orient plans and goals in an austere situation going forward.

In contrast, our founding team for a new device company met in Jacksonville and got off to a roaring start.  This is when it’s the most fun: four people with united enthusiasm and diverse talents sitting around a kitchen table for a day trading ideas and assembling the business product and plan.  The structures, roles, and product description are all in place, and people left with confidence in one another and tasks lists for the coming weeks.  I am more convinced than ever of the value and necessity of face-to-face communication, even though digital media is getting better and better.

The photographs are of flowering trees that I found throughout Georgia: the question was always “Dogwood or Cherry?”.  The orchid-like center confirms that they are cherry trees – the blooms are amazing all along the highways from Florida through Macon and north to Atlanta.

Dogwood                                   Cherry