The New Economics of Biotech Offers a Third Way for Scientists

Ron Shigeta
Feb 27, 2016 · 3 min read

The falling costs in DNA, first from PCR (polymerase chain reaction) and then from sequencing, has driven an amazing drop in cost of doing business in biotechnology. Plus, the earlier generations of basic tools have come out of patent protection, so expensive equipment has dropped in prices and a robust used market has emerged. Plasmid backbones, PCR machines, incubators, centrifuges, pipettes and other basic lab tools have dropped in price to the point where a much smaller amount of money can put together a serviceable lab bench.

At the same time, the $16 billion in research grants dispensed by the NIH last year trained tens of thousands of post-doctoral fellows and graduate students through 34,197 grants. With the average funding time of 4–6 years, the resulting pool of well trained talent that has no academic or industry options for a job now numbers in the thousands per year.

Unlike in industries like software and hardware, where startups proliferate, trained biologists with advanced degrees have traditionally only had two options available to them: taking an academic path or joining a multinational industrial company.

Now, marketplace conditions in biology are creating an opportunity to open up a third way for trained biologists: to create their own companies. Just as the spawning of the personal computer industry in the 1980s launched the age of thousands of software startups, the dropping costs of biotech now make it possible for scientists to join the entrepreneurial revolution and participate actively and commercially in changing the planet for the better.

The IndieBio SF program includes rent-free lab space with 24/7 access where the teams build their technology while talking to customers. In that unique environment, a conventional amount of seed funding can now get a company with a well-formulated technical plan to the point where a minimum viable product or proving prototype can be produced.

Of the 14 accelerated companies in our second class, all had game-changing potential, and all reached some form of proof of principle. The class included synbio tool companies, and also food companies that brewed protein from yeast for food, formulated shrimp from plants, and cultured meat from stem cells. New dimensions of biodata were also exciting — profiling the immune system, and measuring hundreds of proteins on the surface of the cell or tissue. We also saw biometric space age hardware, the first consumer microbiome-based products, and 21st Century medicine companies for cell and tissue reprogramming. All of these companies and more showed a product at Demo Day on February 4th.

With 27 companies through the program, we are seeing that translating biotech from bench to product can happen in months rather than years. Most scientists can’t fathom such an idea, but with a focused environment and the right support, the third way is open.


Originally published at sosv.com on February 27, 2016.

SOSV: Inspiration from Acceleration

Insights from The Accelerator VC—including our programs (HAX, IndieBio, RebelBio, Chinaccelerator, MOX, Food-X, dLab) & our startups.

Ron Shigeta

Written by

CSO of WildEarthPets, Investor, Future Food Entrepreneur. Co-Founder, IndieBio and Startup Biotech.

SOSV: Inspiration from Acceleration

Insights from The Accelerator VC—including our programs (HAX, IndieBio, RebelBio, Chinaccelerator, MOX, Food-X, dLab) & our startups.

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