Using ‘Venture Science’ for faster, deeper R&D
Unlocking founder superpowers in research commercialisation
At the start of a company’s life, everything is fragile and yet this is completely ignored in many research commercialisation programs.
Technology transfers are taken out of the hands of the people that ‘carry the flame’ of the idea into the hands of a professional commercialisation officer who ‘negotiates the transaction’. These transactions are often brutal, dispassionate and gut the life out of the opportunity before it has begun.
When the company finally begins its journey in the wild, some of it has shrivelled up & died.
For the last 20 years, I have been interested in bringing this to the surface in the design of company creation by bringing these ‘soft’ components to the front of the process — where an individual’s motivation is considered as thoroughly as the equity allocation on a cap table or the scope of a license.
At Main Sequence, we are calling this pattern, Venture Science.
Of course, for every pattern or principle, there is an anti-pattern — or a reason to do it differently in some particular new case. I will try to explain why so that you understand why a principle worked and then you can apply in your own way to our own work.
A combination of venturing and science
Imagine yourself on the moon. In the quiet of space, look back at this fragile sphere and start making a list in of all the things needed for this remarkable place, and the creatures that live on it, to thrive for millenia to come.
What’s on your list? Here’s some of the things on mine:
- Double food supply while using fewer planetary resources;
- Undo climate change by sequestering carbon in the ground, in buildings, in food, in the ocean;
- Offer the highest quality healthcare to everyone on the planet at the lowest possible cost;
- Stop making plastic waste. Not. One. More. Gram.
I know. An arrogant venture capitalist with a foolish and simple-minded opinion that he can play a part to solve these difficult problems.
I may be all these things, but I am going to have a crack at it anyway. You see, I give a shit. It matters to me. I will work harder, even when the work is impossibly hard. This is what entrepreneurs do in fact. And there is an army of us today, after a remarkable surge in entrepreneurial capacity building across the world over the past decade.
If you think we are foolish, please be quiet, step out of our way, and let us get on with it. We may fail, but at least someone is trying.
This kind of belief is a form of capital. Seth Godin calls it ‘Emotional Labour’ and this capital scales further than money ever can.
This capital fuels how things get done and it is infectious inside a company. While it flows, a shit-tonne of creation happens at a velocity that is difficult to imagine.
Next, we need the how. And the how is out there. Unless you have time travel on your list, every problem you want to solve has at least the seed of a solution and it is happening right now in the research labs of the world.
Venture Science brings these things together and accelerates them with the ‘unfair advantage’ of industry. In Venture Science, we design companies to succeed.
They won’t always. But when we look back, we will hopefully see that they succeed more frequently and, when they do, the impact is bigger.
So let’s begin.
- An urgent need
- 4 founders with advantage
- $ enough
Step 1: Begin with a Need. Don’t lean into the risk until you are excited about the better world possible when you are done
Why should this company exist? Technology transfer often begins with some technology that is looking for a problem to solve. Businesses are easier to build when the team would do it for free if they could and the market will yank it out of your hands if you build it.
Step 2: Design a Founder Team. Founders not Partners
Bring together 4 ‘founders’. Note that we do not call them ‘partners’ or similar. Founders are different to partners. Founders are selected to maximise the chance of success.
The Venture Founder brings company creation capability, brings together the other founders and shapes the early plan for the young company to achieve escape velocity. They also fund the company entirely because it is too early for others to take the risk. Selection criteria includes ability to fund to a point that other sources of capital see proof; ability find world class resources to support the company. I think of this role more like a movie producer than a financier.
The Executive Founder is the CEO of the business and is the first full-time employee. This founder leads strategy and execution whilst bringing the 4 founders together into a single mission and culture. Selection criteria includes a confidence around uncertainty, some advantage in the industry that this company will rise and the ability to synthesise thousands of idea streams into a path with momentum.
The Research Founder is usually a research organisation with the capability to get the company’s science engine running quickly, delivering results faster than hiring people one at a time could ever do. We originally called this model ‘Venture Science’ because it was a way for venture capital to cause new science in a research organisation. Pre-existing IP is not required and can sometimes make it harder. The company must own the IP it develops and IP created is assigned in realtime to the company. Selection criteria includes being a leader in the field of this company’s science with facilities to support the work.
The Industry Founder is a company already operating in this industry that can deliver our new company to the market. They will certainly understand the specifics of the market well. They will understand customers and supply chains and be able to deliver the new company straight to them.
For founders that are organisations, there needs to be involvement at CEO level as well as clarity on who the person is who leads the founder work internally. They need to be able to ‘kick down doors’ and open up the assets of the organisation.
Founders give a shit. Founders lean in. Founders have a creed. For founders:
- We hold ourselves accountable.
- We know we can’t do it alone and hold our co-founders accountable
- Power is personal not positional. If we disagree we say so regardless of our position. Founders take a position on what is possible and then make it real.
- We go fast. We’re impatient if someone is unnecessarily slow. If the plan is too slow, we find a new plan.
- Our aspirations cannot be contained. Sure, we have OKRs or KPIs but we abandon them if they contain us.
- We are fuelled by impact more than $. Our main currency is ‘emotional labour’. It scales more than $ and job descriptions.
- Founders push so pull is not needed.
As the team comes together, if any founder starts treating another like a service provider or employee, call it out.
When thinking about alignment, consider what each founder needs.
- All founders must share a belief that we can solve the problem with this company.
- $/equity blend is a contextual and reflects risk taken and advantage delivered.
- Executive Founders need to be paid a salary which will vary depending on their context. Often we will be bringing in someone experienced from industry and the ‘ramen salaries’ of startup cliches won’t wash. They have material equity in the company that vests over 4 years. This founder did not toil for years alone to get the business to this point and starts on day 1 with capital and advantage.
- Industry Founders can’t convince their boards to fund a high-risk, unproven new company at the start but they are motivated to help the company come to life and deliver the evidence that can convince. We give material equity to an Industry Founder that vests over 4 years. They are paid no $. The Industry Founder should have no exclusivity as this will limit the scale of the new company from day 1. Advantage comes from being an owner and from getting it first.
- Research Founders need to be properly funded. There are different expectations around equity but being paid is a constant if the science stream is going to operate sustainably. We often have a 10 year intention when we begin.
Step 3: Design Escape Velocity
This company does not exist. The natural inertia of the markets and the noise of media will make it hard for the new business to stand up. As company designers, we need to take it to the top of a hill and then give it a nudge to begin rolling.
Escape velocity is the point that this new company has momentum to fly on its own. When the world outside the founding group is pulling it into the market.
On Day 1, the company has everything it needs to sprint. We have avoided the time sync that can come from hunting for resources and talent. We’ll still need to do this as the company unfolds, but it is more likely that what we need will be close.
Our focus is on proof. Proof of business not just proof of science. We are probably building something difficult and the market will doubt that we can do it. Because we are building something difficult, it will likely be expensive to fund so we need to the market to be convinced. Everything in this first period of work is to prove we can do it sufficiently to increase the availability of support from the market. Customers, investors, employees.
Over the next few weeks we will share case studies, tools and specific deep dives into some of the ideas seeded here. I hope that you will follow me and come along for a ride.
If you have any questions, please ask them on Twitter and I will add longer answers to this series.