Steve Burrill, CEO of Burrill & Co., talks about basic methods of building a successful company. He describes spending time in understanding the industry and building expertise, developing a new model by doing things differently rather than trying to change the model of a big company, and creating capacity to have more time.
Burrill talks about how starting a biotech company is different from starting any other company in the world. In other companies, it is the customer who decides whether you will succeed, Burrill says. For a biotech company, the customer is 10 to 15 years away. There is a huge importance of regulators standing between you and the customer. Additionally, in the healthcare world, most of the products in the market increase the cost of the system. Finally, a biotech company is global from the day it has started.
As an entrepreneur, Burrill says, it is essential to constantly challenge backhand knowledge, differentiate information from insight, and have a healthy aggressive attitude towards trying to build something of value. A VC chooses companies based on where the market place will be in the future and not where it is today. In merchant banking business, it is not about how many things one gets started, but how many things one completes, he notes.
According to Burrill, some of the important laws in entrepreneurship are: 1) The importance of balance in teams; 2) Understanding the market place and how technology helps in creating market share; 3) Raising barriers to entry; and 4) Financing and importance of tactics more than strategy.
Despite the huge investments, regulatory burdens, and uncertain market place, Burrill talks about how venture businesses investing in the life sciences industry make money. He stresses the importance of creating a perceived value (which is much higher than the actual value) as well as taking advantage of global arbitrage of technology having a higher value in certain parts of the world as compared to others.