A Letter to Our Founders
Speed wins fights, patience wins wars
Dear Founders & CEOs,
We are in the middle of an unprecedented shock in modern history. Nobody knows how long this will last. Nobody knows how this will end. I do know this. Nothing is ever as good as it looks or as bad as it feels. We will be fine. We may even be better from it. As they say, never waste a crisis. But first, we must survive it.
You are all IndieBio companies. Which means you are already survivors. Born and bred in the basement on Jessie Street in the Tenderloin. Walking into the office meant stepping over the hardships of life just to face it again in the lab. But this shock is different. Covid-19 will test us all. Our businesses, our commitment to community and our commitment to family. It will hurt and frustrate us. A lesson learned from 2001 and 2008 is that good companies will die because the world has changed around them and they do not wish to recognize it. Do not make that mistake. Public equities have been cut 25% in a couple weeks. Where are the private markets?
But we find opportunity in this crisis.
To do so we must defend our business while being prepared to strike offensively at new opportunities afforded by a dynamic market environment. More simply, go into survival mode.
Do not take this as a disruption but as an opportunity to learn and adapt. Remote work, collaboration and sharing is not easy. But with an open mind we may find ways of doing business and science that open up our ideas of what is possible. Second, recessions cull the brittle. Survivors live to inherit a new landscape with fewer competitors and more customers. Live to see the day. Third there is an opportunity for talent. Many companies will not make the right decisions or are positioned in a place they cannot survive. Great talent will become available. Keep an eye out over the next 18 months for the perfect candidates for your team. Fourth is the opportunity to leverage the force multiplier of the IndieBio network. All IndieBio founders have a common experience and we all help each other. Best practices for dealing with labs, protocols for sick leave and other difficult decisions can be made easier by reaching out to each other. In isolation we wither. In solidarity we thrive.
To make the Covid-19 crisis work for you, play great defense. Defense is about preserving the value you have created. Start by creating a worst case scenario that you can build a plan around. The worst case we see is the twin shocks of falling demand from Covid-19 across airline and all other industries along with oil prices putting shale producers out of business cause a chain reaction in the economy, triggering a liquidity crisis that spirals into a major recession that lasts 24 months, perhaps longer. Create a plan for surviving 24 months. Create a plan that ensures not only fiscal but morale survival. You don’t have to implement it right away but knowing you can go there to survive is helpful for strategic decision making. If there is no way to stretch the bank account that long, raise an extension today from investors that missed your last round or were unable to get in at your last round valuations. Great VCs see the opportunity in bargain hunting in these times. Give them a bargain. Find useful milestones to make decisions with spending. For example a second lockdown after our current one indicates the economy will repeatedly suffer. Freeze everything. If a fast, cheap diagnostic is developed and available to everyone, things will return to normal very quickly. Aggressively look for talent.
Every startup on the planet is trying to raise right now. VCs can’t even meet for in person partner meetings. They are trying to figure out their business as much as you are yours. Don’t expect much from VCs right now. Rely on your wits and instinct to slow the burn and focus on high value activities. Win the market while others are scrambling. Stay active. Stay lean.
Now that we have battened down the hatches and defended our value, let’s focus on offense. Winning the market.
Every IndieBio company is a biotech company focused on solving the world’s biggest problems. This pandemic will amplify the need for your existence. It becomes tangible to those that control capital and are sequestered in their homes wondering what they can do. It becomes clear we have underinvested in our healthcare system. The coming shocks from climate change will make it clear we have underinvested in cures for atmospheric carbon dioxide. The entire world suddenly realizes how disruptive biology can be — for good and for bad. Be ready for the market to look to your products as a solution. Don’t sleep on this. Don’t stop business. Have your product ready. Of course this means following government and city guidelines for shelter in place as well as social distancing. But working from home means working from home. Lab work may be halted but experimental design isn’t.
To build product while reducing burn, focus on key customer facing milestones. Slow new product development. Win the market you are in now. Each action you take must have a direct derisking event tied to it. Most VCs in Silicon Valley recently raised new funds. They must deploy them in the next few years. They will come up for air soon. Communicate with newsletters. Show progress. Show traction. Build your customer base. Sales solves everything. Send an update to current investors with your plans. Not just financial plans but what happens if someone in your company contracts Covid-19. The protocol to handle it. Become as prepared as possible. This sets your investors at ease.
Use the IndieBio network for help. You are not as isolated as the virus makes us feel. If you need a reagent, advice, or a protocol reach out to each other. Reach out to the team. Reach out to me. You all have my number. Text me anytime.
IndieBio is reacting to the Covid Pandemic in a number of ways.
First, the next batch, combining SF and NY will start virtually on May 4th. We are creating a core set of talks and looking at online platforms to deliver the content. I am excited to try a new way of delivering our knowledge and panels. As the situation normalizes we will bring everyone into the physical locations to finish the lab work. Demo day will be in the summer and in person. If not possible we will do it virtually with a new web interface facilitating investor interaction with the companies. Second, we will be holding office hours every other day for general questions and a town hall every week to share best practices and the latest in the fight on Covid. Third we have been finding Discord a great way to bring a feeling of hanging out to our social distancing. I encourage you all to find that camaraderie remotely as soon as you can.
We are looking for up to 8 startups that are fighting Covid across all modalities for the next classes. From disinfectants to diagnostics to therapeutics to vaccines. Already we have several portfolio companies working on solutions.
- Caspr is building a rapid point of care diagnostic for Covid-19 using Crispr RNA detection.
- Amaryllis is using universal viral RNA detection for Covid-19
- Diadem is building a pan-coronavirus vaccine program with their exosomal decoration platform.
- Craig Rouskey of Pando Nutrition is spinning up a rapid RT-PCR diagnostic for the population in SF. Get tested at Renegadex.bio
- Girihlet is working on identifying T cell populations to predict severe vs mild disease.
- Dalton is using their mass spectroscopy technology to predict mild vs severe cases and develop adjuvants to therapies.
- We are working with NY State to help with grants to new Covid-19 diagnostic startups.
If you have anyone you know spinning something up, let them know we are here to help. If you know of any investors interested in funding the above approaches, make an introduction. The world needs as many people working on this as possible.
The greatest opportunities come at times of upheaval. Keep a sharp eye and a clear mind. And remember. Speed wins fights but patience wins wars.