Bootstrapping a Biotech: The unlikely tale of how we became a market leader
The year was a sunny 2011. Around the world, joyous tears were shed at the wedding of Will and Kate, and the youth of Great Britain rioted in London for apparently no reason, other than desiring a 64-inch looted TV. But in a rural corner of Oxfordshire, UK, I was hatching plans for my big entry into the world of Biotech.
I had an idea, well kind of a half-baked idea, to create a biotechnology company that worked with DNA a little differently. The only problem was, I had no money. The low paid years of a PhD had taken their toll on my finances. I was left in serious student debt, jobless, and in desperate need of something to distract me from being in debt and jobless.
So I turned to starting a biotech, the industry where you can buy a 1 ml tube of clear liquid that looks like water for a £1000, do an experiment that goes wrong, and you get nothing for your money. You know… the industry where most companies burn in flames in less than 2 years and require a huge capital investment to get going. That was the industry I picked, probably not the wisest move I ever made…
After approximately 200 cups of tea, I had concluded there were two major hurdles I faced, one was knowing nothing about business, the other was having no money, the latter, however, could be solved. As a 1990’s child I was well familiar with the art of borrowing, so I decided to take out a £20K loan to get the business off the ground.
I also managed to convince my ex-PhD supervisor that investing in this hair-brained opportunity was a wise manoeuvre. What could possible go wrong? Well, quite a lot it turns out.
I still didn’t have enough money to rent a lab, but I knew I could make and clone DNA. So I went knocking on the laboratory doors of anybody I knew who had a lab and needed DNA engineering. The offer was simple; I’ll design and make you the DNA you need, and you give me a lab bench to work on.
Amazingly, it worked, and for the first 18 months of the company I paid no rent at all! My overheads were less than 3%. I think I paid for it in late nights making DNA for people, but that was cheap in comparison. Why did I have to do this? Well, put simply, nobody was going to trust an academic with absolutely no business experience with any kind of significant investment. It had to start this way.
I didn’t have all the equipment I needed, but in my PhD years I had fallen in love with what is now my favourite shop, Ebay. First up, an incubator. I managed to find a New Brunswick Orbital shaker, a real beauty from 1986, for the bargain basement price of £200.
So, I got in my dad’s Transit van and off to the tropical heights of Stoke-on-Trent in England I went. Having lost 3 vertebrae and 2 toes lifting the machine into the van, I finally managed to get it back to my grandma’s garage to switch it on. To say this thing was loud is an understatement, the bearings were completely shot.
So, I bought new bearings from Ebay (obviously…) from Boston, they had to come from the US because the bearings were so old that the UK had switched from inches to millimetres between the incubator being born and its arrival at my grandma’s house. I stripped this thing down to its bare bones, spray painted it (because the company where I had ‘borrowed’ lab space would not have let in unless I had!) and it ran like a charm.
Next up, the UV imager that ran on a mobile phone charger, the water baths that ran at a constantly incorrect temperature, and my personal favourite, the floor standing Sorvall centrifuge that was transported to the lab in the back of a Ford Ka (type it into Google, it’s probably the worst car in human history, and not ideally suited for transporting heavy centrifuges). So now I was set up, I could make some DNA.
How the hell do you sell DNA? Thanks to Tim Berners Lee, such products could now conveniently be bought over the internet, however, I still couldn’t afford a web developer, so in the evenings I learnt HTML and how to use some of the off-the-shelf web building tools such as Joomla and WordPress.
With some extra help from a team of Bulgarian developers I had been put in touch with, I managed to cobble together a website, with a cart and a whopping 24 DNA products. The vision of the business was to build DNA like we use Lego, in pre-made blocks that were pre-designed to fit and work together so that making new pieces of DNA could be done in fewer steps.
The business would then develop other technologies and services based on this DNA system to generate additional revenue. On the 27thJuly 2012, I sold my first product. 16 months after starting the business. The sale was for a grand total of £165.00 to Louisiana State.
I’m running out of money. I suspect most entrepreneurs can relate to this bit, it’s the horrible sinking feeling you get when you know you’re running on fumes. Although to be fair, most of my efforts so far had been that way.
At this point, my short-lived joy at having made some early sales was somewhat waning, and I think that almost every single day I wanted to give up. The amount of times I must have sat with my head in my hands at how hard it was to make any progress at all I cannot even recall.
Getting the business to this point had been at least 10 times harder than even the most challenging parts of my PhD, it was pure hell, and I saw no way out. The business needed more money.
So, I went to my wise ex-PhD supervisor again and asked if he wanted to invest further in this fledgling nightmare I had created for myself. Rather surprisingly he seemed keen. We shook hands, no contract, no guarantees, ordinary shares, and the money was in the bank by the evening.
I cannot express my gratitude to him more for doing this. He showed faith in a clearly dishevelled, despondent, and exhausted ex-student, who probably looked more like he belonged in the film ‘Oliver’ than in any board room.
Glimmer of hope
We got a grant! The government of the United Kingdom, in all their infinite wisdom, decided to award us with £24K in non-dilutive grant funding. I remember opening the email on my phone whilst walking my dog through a field, it was a great feeling.
For the first time I could employ someone, Dr Richard Parker-Manuel. I worked side-by-side with Richard for a year, we made hundreds of DNA pieces and started doing contract work for customers on a regular basis. We got the DNA catalogue up to about 400 validated pieces. But more importantly we were able to leverage another grant, this time it was for £50K.
At this point I also met an investor who seemed interested in what we were doing and put in some initial capital. His message to me at the first board meeting, which was pretty much just him and me; was that I needed to forecast the financials.
I said yes, of course, will do, sure thing, no problem buddy, I’ve got this covered….I was way too excited just to have a store room I could call an office at this point. I also rented my first lab, a small room, maybe 20ft x 20ft square.
To say I was proud of this tiny single room where I could build my empire from was an understatement. It had taken 2.5 years just to get there.
Glimmer is gone
And so was the cash. The first seed funding lasted me about 8 months. By that point we had about 1000 products, so things had gone really well scientifically, but I had completely ignored what our investor had said, and continually requested throughout!
On April 22nd 2013, I knew we were in big trouble. I remember the day like no other. We would be out of money in 4 weeks, big time, and until that day, I hadn’t even seen it coming. It hit me like a brick wall, no matter what I tried to cut back on financially, the dream was 100% dead. But first, I had to call the investor and tell him the bad news.
I will always reflect on how well he took it, I was expecting to have my ear bitten off, but I imagine as an investor in early stage biotech a call of this type was not his first! I explained the situation, I had essentially over-committed us, and he reminded me of his earlier (multiple) suggestions about financial forecasting, to which I admitted I had paid way too little attention.
As sales were increasing and the R&D looked promising, he agreed to support the business with a small investment to solve the immediate problem, and allow me to show I could get costs under-control.
The Devil is in the Detail
After that very painful experience I realised how little I knew about how a company runs; a balance sheet, cashflow forecasts, taxation, depreciation, profit and loss, calculating profit margins, shares, share options etc. I turned to YouTube, Coffee, and a seriously painful 6 months of learning. I hated it, from start to finish.
However, it was probably the most useful thing I ever did in business. Without that knowledge, you may as well give up if you’re planning to run it yourself. Forecasting and forward planning was probably the most important thing I ever learnt.
What you realise is that even if things are not going exactly to plan, if you know they are not going to plan, that’s ok, because you have time to do something about it, and you can see the consequences a long time in advance. It’s the only reason Oxford Genetics is still alive today.
After 7 years, I am pleased to say the company is somewhat different, and looks much more like a business. The old equipment has gone and we now occupy 12,000 sq./ft. of lab space and the team is comprised of 50 of the brightest people I have ever worked with.
In 2017, we raised a total of £8M million in external investment, and since that first grant back in 2012 we have also managed to increase our grant funding, having been awarded £1.9M in 2017 to continue our research. We sell to overseas customers every day, and offer a range of services and technologies for improving the design and development of biological therapeutics for customers.
I spent 4 years hating the business, absolutely, unequivocally, everything about it. It was self-imposed prison cell with a flickering strip light overhead that prevented me from sleeping. Now, I love running the business, I get to the end of a Sunday night and I look forward to work, which remains an alien feeling.
If I had to impart a single lesson to anyone who’s considering the same journey, it would be to think like a builder. If you knew you wanted to build a huge mansion, you would lay the foundations accordingly. So sit back, think big, and draw out what your buildings going to look like.
Then work backwards. However, even with this advice, if you are thinking of starting a business, with not enough money to realise the vision, it will be hell, you will do things and take risks that you will look back on with utter dismay. You will work harder than you have ever worked, and feel and experience more failure than you ever thought possible.
This is probably the hardest thing to deal with. But eventually, after you have literally given up, things will start to turn in the right direction, and slowly, very very slowly, you realise that the time you lost killing yourself was probably the most interesting part of your life.