The hardest thing I have to do is to describe my role as Pheronym’s COO, which is crucial to our product development.
What does a startup COO do? If you search Google for a COO’s role and job description, it says the COO is the second in command and runs the operations. Even though this is a very clear role for big companies, it is not so clear in a startup. Also, the COO role is different for every startup. For example, digital health tech or digital agriculture startups’ needs are very different from pharmaceutical or agriculture biotechnology startups. Furthermore, the description of this role changes depending on the skill sets of the startup’s CEO because the CEO and COO skills complement each other. It is even more difficult for me to explain because what I do constantly changes with the company’s ever-changing needs. It is like caring for a child; one minute it is a baby, next thing you know it starts crawling, then it’s a toddler. Every phase of development requires different skills. Since Dr. Fatma Kaplan, my technical co-founder and CEO/CSO, and I started Pheronym from scratch, my role has changed in every stage of Pheronym’s development.
Pheronym is an agricultural biotechnology company that is developing a new kind of pheromone to control agricultural pests in the soil. We provide eco-friendly and sustainable pest control solutions to farmers. In the beginning, we had an idea that we can use pheromones to control parasitic nematodes’ (roundworms) behavior for agricultural pest control. Our initial product targets beneficial nematodes that are used as biological controls for pest insects. So our idea was to use dispersal pheromones to improve beneficial nematode dispersal leading to increased insect encounter and insect death. To accomplish that, we needed money. We quickly realized that financial milestones are tightly connected to legal milestones. In order to raise money, we needed a legal entity to raise funds.
As you are guessing, my first job as a COO was to accomplish our legal milestones, so my technical founder could submit grants such as Small Business Innovation Research (SBIR) Phase I for proof of concept trials. After reading about the pros and cons of different legal structures (C-corp, S-corp and LLC), I decided to start a Limited Liability Corporation (LLC). After creating an LLC and completing all the state registrations, I had to register the company with the Federal Government in order to submit grants. Effectively, I had to make the company a Federal Contractor. By the time I was done with all the legal milestones, about 6 months had passed. In the meantime, we wrote grants and submitted them.
Initially, our accounting was very easy because the company did not have any income. Then we got funding. Yay! Now I had to do bookkeeping. I have an economics degree and a reasonable understanding of accounting, but accounting for federal grants and contracts is a specialized skill. Luckily I had access to an accounting firm at our business incubator that could help. The accounting firm helped me set up my accounting system in QuickBooks Online and trained me to do bookkeeping. At the end of the year, they helped me prepare my tax returns, which were simple until 2019. I still do bookkeeping and maintain Pheronym’s registrations with the federal government, but I let an accountant take care of my taxes now.
We met our initial financial milestones with non-dilutive funding, also known as grants. My role was making the budget and working with my co-founder to prepare the business section of our SBIR Phase I grant. The business section entailed doing market research and identifying market pain points for our proposed technology. We identified 3 markets where our product would be sold. We also identified our end-user as farmers, greenhouse growers or home gardeners which could be our customers. The question became “How do we reach the end users?” or, “Where do our end-users get their pest control or treated seeds?” We realized that our customers would be biopesticide companies and/or distributors, and seed and seed treatment companies. Next, we determined our customers’ and end-users’ pain points through a combination of third party research reports and our own primary research. We further identified barriers to market entry such as intellectual property (IP), defensibility of IP, and the regulatory landscape. The biggest potential hurdle was EPA regulation, so we recruited an EPA consultant. Finally, we developed a strategy to enter the market (after a successful proof of concept) for successful commercialization.
The SBIR Phase I grant RFA (request for applications) had a strong emphasis on Phase III commercialization which was not funded by the SBIR program. So applicants were strongly encouraged to get outside funding. That brings us the dilutive funding. Everything above prepared a great platform for preparing a pitch deck. Since I have an economics background, my role was to make a model for financial projections for the pitch deck and update it as we made progress. Also, I started presenting at pitch events that my cofounder could not make because she was presenting at another pitch event. With our initial pitch deck, we got seed funding from the IndieBio Seed Biotech Accelerator. The investment came with an additional legal milestone. IndieBio only invested in C-Corporations. So I converted Pheronym to a Delaware C-Corporation. During the IndieBio program, we made a lot of progress on the technical and business side. My role from there evolved in other areas of business including business development, sales, marketing, and branding.
Marketing and branding are important business skills that I have developed. You have to create an identity for your company and product and make sure people know about them. I worked with a graphic designer to create a LOGO for Pheronym. I created Pheronym’s website and prepared technical content with my co-founder. I created a blog on the website. I also established social media accounts for Pheronym on Twitter, LinkedIn, Facebook and Instagram. Then I started posting on social media and improved SEO (search engine optimization) of Pheronym’s website. Finally, I made a mailing list using newsletter software to keep our subscribers up to date about our progress.
Since Pheronym is a small company, I have a hand in every aspect of product development including laboratory work, statistical analysis, and making cost-effectiveness models. I have an M.Sc. degree in pharmaceutical economics and am an expert in bringing drugs to market and FDA regulations. Since agriculture biopesticide product development has very similar steps, I utilize many of the same concepts in Pheronym’s product development. After all, all of the basic methods to prove the safety and efficacy of pharmaceuticals were originally developed for agriculture. This helped me develop a strategy to bring our first product, Nemastim, to market successfully. I don’t just sit behind a computer, I also do laboratory work when necessary. Currently, I am working on an exciting project, called AstroNematode, to send beneficial nematodes to the International Space Station.
Wherever there is a gap, I fill in. For example, I negotiate contracts and cooperative research and development agreements, read and communicate with our lawyers about confidentiality agreements, material transfer agreements, execute lease agreements for our lab space, and pay the bills. When we converted to a C-corporation and we needed a payroll company, I recruited a payroll company for HR and payroll. I manage the intellectual property portfolio and our brand. I am the IT guy and the maintenance guy. Recently, a critical piece of equipment was damaged during a move to a new facility. I diagnosed the problem and repaired it. Everything I do helps my technical cofounder/CEO reach the technical milestones and recruit customers to get Nemastim on the market.
In summary, a digital health startup or a digital agriculture startup may not need a COO at the beginning until scaling up. As you can imagine, to many tech companies and investors my role may seem unimportant or unnecessary, but to an agriculture, biotechnology start-up my role as a COO is absolutely crucial. I enabled my cofounder CEO/CSO to reach her technical milestones as fast as possible to get to the customer trails to get into the market. I helped her to effectively and efficiently leverage the grant funding with incubators, accelerators, and business mentorship programs to create an investor ready startup to commercialize our product.
About the authors: Mr. Karl Cameron Schiller is the co-founder and COO of Pheronym. He is an experienced entrepreneur with a BA in economics and an M.Sc. in pharmaceutical economics. Prior to Pheronym, he co-founded Kaplan Schiller Research LLC. and volunteered as president of a not for profit organization. In addition, he was a freelance consultant in pharmaceutical product development, cost-effectiveness analysis, modeling, and statistical analysis. His clients include the University of Florida, the University of Alabama, Florida Medicaid, and Pfizer.