Spin-Outs and SME's: The Secret To Disruptive Innovation
Updated: Aug 28, 2020
In another interview with Cellix CEO, Vivienne Williams, we cover the importance of university spin-outs and dealing with the challenges presented to her. Vivienne speaks of how she and Dmitry Kashanin (co-founder of Cellix) grew personally from growing a university start-up into the successful SME it is now. As part of the Disruptive Technologies Innovation Fund (DTIF), Cellix will lead a €5M consortium with its partners at TCD and NUIG to develop a Microfluidic Gene Transfection Cell Analysis and Sorting Platform (GTCASP).
How do university spin-outs and SMEs fit into the wider biotech community?
A significant proportion of technologies are actually licensed from universities. Even those that are still at the patent stage and are just an idea. Normally you need to see a proof of concept or prototype before they are licensed but you see patents being licensed even still.
So what happens in universities is crucial, it’s where a lot of the very cutting edge research happens.
In the grander ecosystem, SMEs sit in between universities and corporations/multinationals. SMEs often take on some of the IP or technology from universities and start to validate it and do proof of concept studies. Then SMEs look for partners to scale it up in the industry.
Obviously, we are a commercial organisation but I believe we are more innovative than the larger companies. And that’s well known, it’s why larger companies acquire smaller ones - they acquire them for their tech. In a way, that’s the life cycle of tech development.
"That was a big eye-opener for us. The difference between how large organisations work in tech development verses how we work."
What advantages are there to being a SME rather than a large corporate?
I think part of the beauty of being a small company is that we can actually adapt very quickly. From working with the large corporates (particularly with some of our bigger projects at the moment) we’ve learnt that they struggle to move quickly.
I remember one project we were working with a large partner and they sent us one of their flow cytometers. Within a day I walked past the lab and noticed Dmitry had the whole thing opened and was in there with a screwdriver. This was a piece of equipment worth $150,000!
Not long after, someone from the company actually came round to our lab and told us he thought it was amazing. Saying that, in their company, the amount of paperwork required to make adjustments or integrate different things would be insane, it would never get done!
That was a big eye-opener for us. The difference between how large organisations work in tech development verses how we work. We are by nature an academic spin out and because of that, we are very experimental and agile in terms of our approach.
"It’s not just about how good the tech is, that has to be excellent no matter what. It's all the other things on top of it that matter as well, market conditions, how crucial the team is. We probably underestimated those things at the start."
How have you and Dmitry grown personally from creating Cellix and building it into the company it is now?
We had to develop grit. I’d say now, that when we started, we were quite naive. We thought we would be selling so many products and it would be wonderful. But things didn't work out as easily as we had imagined and we were met with plenty of problems initially.
When you come from the academic community — particularly if you’re someone as smart as Dmitry — you put your mind to it, you understand the physics, you develop something, and that's it. But business is totally different, it can be very unpredictable.
We entered a world that we just weren't used to and it was definitely a culture shock for us. It took a good few years to find our feet.
The grit that I developed in those early years has definitely affected the work I do now. Now we have a much broader view, a better understanding of product evolution, product life cycles, getting a product to market and those hurdles. It’s not just about how good the tech is, that has to be excellent no matter what. It's all the other things on top of it that matter as well, market conditions, how crucial the team is. We probably underestimated those things at the start.
We’re much more decisive now. We said yes to a lot of things that we shouldn’t have at the start and we spread ourselves thin. Now we’re much more focused and that takes discipline.
It’s difficult because Dmitry and I are very excited about technology and we want to develop new tech. When we see a good idea we often think that's gonna be interesting — we could do that.
But now when something new comes up my first questions are what does the market say, what's the business case, who are the competitors? I know we can make the tech, I know Dmitry and his team can pretty much do anything but it’s not about that. There are other equally important factors that have to be considered and I think we didn't really take those into account when we first started. We were a classic academic spin-out.
Have you any over advice for those considering their own university start-up?
When starting a company, one of the crucial points is recruiting the right people. I think we’ve made some mistakes in the past so we are much more diligent in our process now than we were previously. It’s good to make mistakes because you really learn from them. As long as they're not fatal!
Something I’d recommend to someone starting a spin-out now is to find a really good tech business development manager. Someone who can understand the tech but can also translate that to the market. It's a very unique skill.
My advice really is to make sure you get the team right. I know it's such a cliché but it’s so true! People with experience can be worth their weight in gold. They’ll fast track you through processes and end up saving you money in the long run anyway. So they may seem expensive to start with but in the long term, they can be worth it.
In terms of the tech — don't over-engineer it before you get to market. There has to be an iterative and interactive stage with the customer. If you try and do that too late and over-engineer before it gets to market, you’ll end up missing the mark.
In our very early days on the first version of the Mirus pump, we did a lot of work on the development of the analysis software. Dmitry had come up with 20 or 30 different parameters, which was incredibly impressive! I wanted to get it to market but he believed it wasn’t ready yet and wasn’t comfortable releasing it.
In the end, customers were actually only interested in about 4-6 parameters and not the 20-30 we’d developed. The time we spent on all those parameters was probably not worth it. You really need to talk to the customer.
That’s where we are now with the Inish Mini-Bar. We have a prototype and we’re getting it out there into trials. To find the issues and do the troubleshooting.
Stay in the university as long as possible. Once you leave, costs escalate 3, 4, 5 times higher. In university, it’s easy to forget about the overheads you have to pay - rent, utilities, insurance, etc. All of those things cost money. It’s very important that when you launch a company, you consider all the things that you need, not just staff and consumables for the lab to develop your product.
You often will need a lot more money than you think and it will take a lot longer than you think!
The GTCASP project, led by Cellix, is part of the Disruptive Technologies Innovation Fund under Project Ireland 2040.