Breaking Out: Learnings From a Month Spent Exploring Entrepreneurship

At Petri, we help founders in the earliest phases of launching a company at the frontier of biology and engineering. But what about before they were ready to launch? Months or years before our founders started their companies, many were sitting at home or in a lab considering whether to take the plunge. This summer, we decided to partner with the team at Pillar VC to launch Breakout, a new program to help people explore entrepreneurship and build a community of future founders.

We designed Breakout as a free six-week program to help people understand what’s involved in launching a new startup. From finding a co-founder to choosing an idea and validating a burning problem, the program provides a hands-on way to explore entrepreneurship.

We weren’t sure what to expect, and we were blown away by the response; within one week we received 400+ applications across two tracks — Tech and Bio — spanning 21 universities and institutions, including Harvard, MIT, Stanford, and Oxford. While we chose to limit the Bio Track to 40 participants in order to foster an intimate community, we were thrilled by the response, and are looking forward to hosting the program again soon; we’ve started a waitlist for the application here.

Over the course of Breakout, participants learned the nuts and bolts of getting started through a combination of presentations from proven operators and VCs, peer groups, advisory sessions, and one-on-one coaching. They were also able to learn from accomplished entrepreneurs, listening to founding stories and advice from Dan Pregibon (Firefly Bioworks, Repertoire Immune Medicines), Emily Leproust (Twist Bioscience), Reshma Shetty (Ginkgo Bioworks), and Alec Nielsen (Asimov).

As the sessions went on, we heard the same questions surface again and again from participants. We thought we’d shared a few of them here to help other future founders with similar challenges on their minds.

Here were the top 3:

1. When am I ready?

Focus on whether you have a team that is ready, rather than your technology.

You might be ready if you have (a) a team that is convinced they want to do this; (b) evidence that people want what you are building; (c) a defensible technology or approach; and (d) a plan to hit key milestones coupled with an estimate of how much money you need to make progress.

For much of our audience of students and postdocs, a natural tendency is to be heads down in the lab until they achieve some level of development or validation of technology. Instead, the rate limiting steps for forming the company are (a) building your team, and (b) understanding how your technology supports a business (i.e., what you create, how it impacts the world, and how it earns money).

The sooner you can advance into the world and talk to potential team members, customers, partners, investors, et cetera, the faster you will make progress. Universities are stellar places to do all of these activities, especially at biotech clubs like MIT Biotech Group and Harvard Biotech Club.

2. What are some great ideas to work on?

Let the market tell you.

We cannot, nor can other investors. If they knew, they would do it themselves (and many do). Instead, talk to customers, and learn how not to let them politely confirm what you want to hear (for example, check out The Mom Test).

For startups pursuing applications in medicine (e.g., therapeutics, diagnostics, or medical devices), the company can be sold before a product is even developed (i.e., while in clinical trials). What does it mean to talk to the market?

Talk to as many patients, clinicians, hospital administrators, payers, potential acquirers, investors, and other stakeholders as you can. Read S-1s and 10-Ks of public biotech and medtech companies. Especially in the case of diagnostics and medical devices, do the work to deeply understand reimbursement and distribution.

An unmet medical need afflicting large numbers of people is solid, but be careful to really test whether a need is unmet. Indeed, there are countless examples of biotech and medical device companies that failed to gain broad adoption post-approval.

3. What makes a great pitch?

A great pitch makes a compelling case that (a) there is a clear market opportunity; (b) there is a differentiated and defensible approach; and (c) you have an unparalleled team with a unique insight or advantage.

When pitches fail, it is usually because of the market (do people want it) or economics of the business (does it make money). This is counterintuitive to technical founders coming from academia, because they are trained to focus on if a technology works or if a discovery replicates and generalizes. This isn’t to say that investors ignore this, but that many pitches are not investable even if the technology works as claimed.

The reason stems from the economics of venture capital investing. Most startups fail, and investors earn a return from the top 1–3 outcomes in their portfolio, not the median outcome. Therefore, they can only invest in companies that will generate an exit that approximates the size of their fund (i.e., $100M+). This is why venture-backed startups need to pursue a big opportunity: the magic $1B+ market.

While the technology and team might come naturally, making a compelling case for the market opportunity is where first-time founders often struggle. Don’t claim you can capture a small percentage of a very large market. Instead, hold your market claims to the same standard of rigor that you would hold your science — gather data. How many people have the problem? How much are they currently paying to solve it? How do you reach them? What would invalidate your hypothesis?

Stay tuned for the second round of Breakout! Given the interest we received, we’ll likely be running the program again. You can find the waitlist for the application here.