Biotech is booming. The Massachusetts Biotechnology Council estimates that in 2017 alone, biotech companies in the Cambridge-Boston area
received more than $3 billion in venture funding. The organization also reports that jobs in the Massachusetts biotech sector have grown by 28
percent since 2007 — and by 4.8 percent in the last two years. Moreover, many of the world’s most prominent biotech organizations are
located here, including Sanofi Genzyme, Shire, Biogen, Novartis and Pfizer.
Clearly, the business environment in Massachusetts — and specifically in the Boston area — is favorable for biotech companies. But if you’ve
just founded your own biotech startup, it’s important to be aware that there will be obstacles in your path — and whether or not your company
will succeed depends on your ability to successfully overcome them.
Five of the most important challenges you’re likely to encounter include:
1. A lack of lab space: Due to the rapid growth of the biotech sector in the Cambridge-Boston area, lab space is in short supply — despite
the fact that in recent years, many office-to-lab conversions have been carried out. New, lab-capable projects can’t go up quickly
enough. To make matters more complicated, biotech companies now have to compete with the growing number of tech companies that
want offices in the area in order to be in close proximity to the talent pipeline of graduates from MIT, Harvard, Boston College and other
universities, as BisNow reports. Rents can range from $75/SF to $90/SF, which can be steep for any startup, so it may be challenging to
find affordable lab space that’s large enough for your needs, offers the right amenities and services, and is located in an area that’s easily
accessible to your employees, investors and associates.
2. Cyber threats: Cybercrime is on the rise, with cybercriminals targeting organizations in every industry, including biotech. Especially with
advanced technology, the Internet of Things (IoT) and employees accessing your network remotely, your company is vulnerable to
everything from ransomware that can cripple your computer system to the theft of IP, personnel data or information from clinical trials.
That’s why you need to make sure you have a robust IT system with top-notch security measures that are regularly reviewed and
updated. You should also educate your employees about good cyber hygiene practices, since many data breaches are tracked back to
employees falling prey to phishing scams or using the same password for multiple sites and devices. If all this sounds intimidating, consider
outsourcing your IT security to a reputable information security company.
3. Talent shortage: Finding the right talent for the right price is critical to your startup’s operations. However, as the Boston Globe reports,
there’s a significant talent shortage in biotech — particularly for entry-level workers with associate’s degrees, as well as for candidates
who hold Ph.Ds. Add to this the fact that experts predict that between 2017 and 2023, 12,000 new jobs will be created in the sector,
and it’s clear that biotech roles are becoming harder to fill. In short, it’s a candidate’s market — meaning that job seekers can select
positions that provide work that interests them and offer high-paying salaries. As such, it can be challenging for startups to compete with
established biotech companies that have multiple projects in the running and offer higher remuneration. For this reason, you may have to
focus on advantages you can offer, such as the opportunity to work on groundbreaking initiatives; a good work-life balance; and an
employer value proposition that emphasizes diversity, sustainability and innovation.
4. Identifying the best opportunities: Many biotech companies start out with one or more great ideas. However, great ideas by
themselves aren’t sufficient. You need to determine whether there’s a market for the product you want to create; what risks are involved
in the research, development and manufacturing processes; the type, availability and cost of talent you need for the project; and whether
another company is developing a similar technology. Only by doing this groundwork can you assess whether an opportunity is truly worth
pursuing from a business perspective.
5. Continuing to innovate: Many companies start out with the drive to discover new solutions and a culture that supports that drive — but
as they grow, their culture changes and becomes less conducive to innovation. However, to ensure your company’s longevity, you need to
continue to innovate. That’s why it’s critical to foster an organizational culture that enables experimentation and exploration so you can
attract talent who are inspired to develop cutting-edge technologies, therapies and products.
To help ensure your biotech company gets off to the best possible start, it’s advisable to purchase business insurance as soon as possible. Many Startups feel that their company is too small to require insurance. However, just because you just launched, doesn’t mean you’re not at risk. McSweeney & Ricci can recommend coverage tailored to your budget and each stage of your business. A good business insurance program can help protect your company from damages arising from a myriad of challenges ranging from property damage and specimen destruction to data loss and liability claims.
McSweeney & Ricci can help you assess your business risk and will create an insurance program that provides the proper levels of coverage — a program that can scale as your company grows. For more information and a free quote, call us at 1-844-501-1360.
Sources:
http://www.wbur.org/commonhealth/2018/06/05/biotech-startup-failure-success
http://files.massbio.org/file/MassBio-Industry-Snapshot-2017.pdf
https://www.bisnow.com/national/news/office/office-tenants-are-snatching-up-lab-space-in-tight-us-markets-88371
https://www.bostonglobe.com/business/2018/05/16/the-growth-massachusetts-biotechs-outpacing-number-qualifiedworkers/
5mL4ry6YvZeP5CTaDrSmPI/story.html
