Comment: Scaling lab success into a viable business

Tim Pryce, Chair of bio-composite manufacturer Cellexcel, talks about the challenges of bridging the gap from late-stage academic R&D to commercial viability.

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Solving current and future global problems relies on innovation and the positive news is that there are a wealth of new ideas coming out of universities. However, the bleak truth is that very few university R&D innovations successfully scale into viable businesses – particularly when they involve complex deep tech.

By increasing the success rate of our university spin-out companies we can better meet challenges in areas such as decarbonisation, food security and sustainability, and enhance the wider UK economy.

As someone currently working with an early-stage university spinout after a career in the mainstream engineering sector, I believe there are things we can be doing differently to maximise the chances of scaling up new technologies.

Strong start-up foundations

The good news is that an increasing number of academics understand the importance and the opportunities that their research breakthroughs offer. Many universities have invested in programmes to aid commercialisation and there are multiple sources of grant funding to support very early-stage companies. Research parks, often linked to universities, provide facilities, and introductions to potential customers and investors.  

This support goes beyond improving the technology – at Cellexcel, with the support of the University of East Anglia (UEA), we participated in an ICURe programme to educate tech founders in creating a successful business. In addition, we have been assisted by the Biotechnology and Biological Sciences Research Council (BBSRC).

Overcoming the scale-up gap

Despite all this help, the majority of UK university spinouts don’t succeed. I think success can be enhanced if you focus on three key factors:

1. Balance leadership and a multi-talented team

Spinouts need to bring together a team with the right combination of talents to accelerate progress, especially in the key role leadership role.

However, the CEO of most spinouts tends to be the technological founder. Obviously, they have the idea, but that’s no guarantee that they have the management and people skills to lead and drive a commercial entity, nor the experience to anticipate needs and challenges.  They are often simply not comfortable in this environment.

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Importantly, the technological inventor can be the major shareholder whilst reporting to a more commercially minded CEO. Even so, this can be difficult for a technology founder who may feel they are losing control. This is where a strong chair, who can take a high level strategic view helps. They can work with the founders to coordinate a road map for the business as well as the technology and should have the experience to anticipate and manage competing agendas, personal fears, or lack of experience with shareholder issues, legal support and finance.  The result is everyone’s skills are fully recognised, harnessed and rewarded to deliver the goals and objectives of the business. A new comfort zone is created for the founders.

Strong communication and commercial skills also provide the ability to engage externally, creating an industry based launch platform, that refines the technology into a commercial solution to genuine problems.

2. Create an effective Vision, Mission, and Values statement

It is vital that early-stage companies have a clear direction of travel and everyone involved understands where it is going, how it is going to get there and what it is trying to achieve. That’s why creating a strong Vision, Mission, and Values document is crucial. Writing it is not as much fun as talking about the technology, but it coalesces everyone around a common purpose and provides a framework for decision-making.  When a new opportunity arises is it a good opportunity or a distraction? 

Many start-ups don’t give the Vision, Mission, and Values processes a high enough priority, but as we’ve progressed and confronted new barriers to success, it acts as a North Star for rapid decision-making to help us move forward as a team.

3. Implement robust management practices

The introduction of management processes and reporting within the organisational structure can be challenging, as entrepreneurial technologists see barriers and loss of control. 

A weekly reporting structure enables the technology to be guided and nudged forward, negating the need for violent and disruptive changes of tack.

Keep decision-making processes agile, yet robust, by gathering data, listening to input and turning it into information so plans can be adapted accordingly through knowledge.

Manage cashflow by aligning expenditure to objectives and milestone achievements, enabling the business to progress on its Technology Readiness Level journey. 

Bringing in outside support for accounting, payroll, marketing, and intellectual property management enables swathes of disciplines to be introduced cost-effectively and allows the technological entrepreneur to focus on what they enjoy and what they do best whilst providing security to the whole team.

Prioritisation through sound decision-making is essential to keep moving forward; gain funding and go again. Rome was not built in a day so define your Vision, build your team, enable them to deliver effectively and spend your resources wisely to deliver success.

Tim Pryce is Chair of Cellexcel