Incubating Pheronym: The first nematode pheromone company
We have successfully completed the proof of concept trials for our first product, Nemastim, which is now ready for customer demonstrations. We could not have done any of it without entrepreneurial catalysts: mentorship programs, incubators and accelerators. In biology, enzymes are biological catalysts that lower the high energy barrier in a reaction. Enzymes lower the activation energy to speed up the reactions. Incubators, accelerators, and mentorship programs are entrepreneurial catalysts. They speed up technology development by lowering barriers such as funds, infrastructure, and more. So startups can focus on developing their technology.
Incubators provided us an infrastructure for product development and scale up. The accelerators provided us funding, a network for fundraising and customer discovery, contractors, marketing and more. Mentorship programs helped us with our business plan and introduced us to mentor networks that have helped us move forward. We have been to many incubators, accelerators and mentorship programs. Each program helped our company move to the next level by lowering a different barrier and offered a unique solution for success. We hope that our experience can help you lower barriers in your journey to successful technology development.
I frequently get asked, “What would you do if the money had not been a limiting factor?” My answer today would be “I would start a biotech company”. Biotech startups have many very steep barriers. First, establishing a biotech startup is incredibly expensive. It requires an upfront infrastructure investment without knowing whether the technology is even going to work. So money is a huge barrier to develop a promising technology which can make big difference in our lives. That’s where the incubators come in to the picture.
When my co-founder and I decided to bring nematode pheromones to the market, we thought we could accomplish all of these through grant funding. The examples of technology development we had experience occured within existing established infrastructure. The only thing we needed was to prepare a grant proposal for financial support. With that mindset we started preparing our first SBIR grant proposal for financial support. By the time we were done with the budget, we realized that we did not have the infrastructure we needed. The infrastructure costs a lot money, not to mention the the time required to build it. Now we had two huge barriers, money and time. It is already difficult to raise funds for technology development, there was no way we could raise funds for infrastructure. Should we quit? No. We just needed to get creative. We started looking for infrastructure that was similar to what we had before. And we found incubators!
Incubators are incredibly important for the success of biotech startups. At least, they were for us. We have been to three incubators. Each provided a unique experience, lowered a unique barrier, and contributed to our success moving forward in our product development. The first incubator we moved in was UF Innovate the HUB in Gainesville, FL. This incubator was a hybrid between incubator and accelerator with a business mentorship program. It had co-working space which provided us a very affordable office space when we had very little money. Once we got some funding (our first contract) we moved into lab with an integrated office. The lab was great, but the HUB does not have much shared equipment for biotech. Fortunately, we had all the equipment we needed to fill up the lab and get going.
This incubator also organized pitch presentation events twice a year for their companies to raise funds from investors. Raising funds from multiple sources becomes very important for commercialization. SBIR Grant funding only goes so far. It does not support Phase III commercialization of the technology. Investors are very important for the Phase III funding. We needed to learn how to raise funds from investors, and the business mentors helped us create a business plan and a pitch deck to raise funds. Of course, we made our first presentation to investors at the HUB.
This incubator had other useful perks like library access (our favorite), resident partners such as accountant firms, IP law offices and VC firms. These resident partners provided free office ours where we could get advice from accounting to venture funding/institutional funding. We developed a really good network of business advisors and mentors. By the end of 2017, we (or our needs) outgrew the HUB. Six months ago we moved to the UF Innovate/Sid Martin Biotech, which is a sister incubator to the HUB with the same and different resources and perks.
The Sid Martin Biotech (Alachua, FL) is an award winning biotech incubator. There are many things about this incubator which facilitates our success and growth. The lab space agreement is very startup friendly and affordable. The agreement provides us many necessary things such library access, reduced rate for the core labs at the University of Florida, shared equipement (worth $1 million), greenhouse access when we need, waste disposals, and safety related training lectures for our employees. If we are growing fast and need more space for growth, the space is made available. Some of our favorite perks are negotiated rates with big companies for consumables and highlighting their companies (Pheronym) in social media.
While we were at the HUB, we entered into an accelerator in California. We realized that California had such a supportive ecosystem for startups and that many of our customers for the seed treatment product PheroCoat had a strong presence in California. We had to have a presence in California to make PheroCoat successful. Again, we had the usual barriers; money and infrastructure. This time we knew the solution: Incubators.
A contact from the accelerator introduced us to the HM Clause UC-Davis Innovation Center (Davis, CA). This was the right incubator for us. This incubator provided us a bench space with a $1 Million worth of shared equipment, greenhouse space if needed, lab safety equipment such as gloves, safety glasses, lab coats, waste disposal etc. If we had just started today, this incubator would be the one I would go for. It allowed us to operate indepently in both states without an infrastructure investment and connected us to our customers. I should mention that it has a great network with other business, mentorship programs and seed companies in the area. For example HM Clause provided us a facility tour at their seed facility in Modesto, CA. That helped us think about the best approach to develop our second product, PheroCoat. The incubator is near farms and has its own farm on the premise. We pass by so many farms (Sunflowers, Wheat, Tomato for fresh consumption and canning, Peppers, Safflowers) while we are driving to the incubator. Of course we do not miss the opportunity to observe and learn how the farms operate. The farms here are very different from my family’s hazelnut farm. This environment makes our solutions more realistic when we are at the planning stage of product development.
The HM Clause UC-Davis Innovation Center is also associated with the Venture Catalyst program at the University of California, Davis. Venture Catalyst has business mentors, assistance with market research and many other perks we are still exploring. We will update you as we move forward and learn about the other perks and benefits.
It seems like incubators provided everything we needed; infrastructure, facilities access and business mentors. Do we still need an accelerator? Yes. Stay tune for the Part II: Accelerating Pheronym
Author: Dr. Fatma Kaplan is the CEO/CSO of Pheronym and an accomplished scientist with experience in both biology and chemistry. She has a Ph.D. in Plant Molecular and Cellular Biology and postdoctoral training in Natural Product Chemistry with a focus on isolating biologically active compounds. Dr. Kaplan discovered the first sex pheromone of the nematode Caenorhabditis elegans and published in Nature. Then she discovered that pheromones regulate other behaviors in both parasitic and beneficial nematodes. She has very high impact publications and her dissertation was cited in textbooks within 5 years of publication. Dr. Kaplan worked as a scientist at NASA, the National Magnetic Field Laboratory and the US Department of Agriculture — Agricultural Research Service. Dr. Kaplan co-founded Pheronym to bring nematode pheromone technology to the market and to provide effective, non-toxic pest control for farmers and gardeners.