Not Deciding is a Big Mistake

Thursday, November 14, 2013

Carl Sahi said entrepreneurs and academics in the bio-tech sector sometimes have trouble making decisions.

And analysis paralysis can lead those businesses to miss big opportunities, the president and co-founder of Danville-based Engineered BioPharmaceuticals Inc. said Thursday during a Virginia Bio lunch. Sahi and two other speakers discussed mistakes they've made during their career and the lessons they have learned from them.

"Making a decision is more important than being right or wrong," Sahi said. "As a CEO I will support you if you make the right decision and if you make the wrong decision. I want people with strong personalities."

Jeff Pompeo, the Charlottesville-based vice president and managing director of Analogic's hand-held ultrasound division, said he realized about 15 years ago that he was an entrepreneur trapped inside large companies -- at the time, General Electric. In 2000 he started a telecom company and has since worked in three other startups. He said entrepreneurs should remember that "Plan A never works."

"You must be adaptable and encourage a culture of risk-taking," he said. "That is much more difficult in a large team. I assume people don't make bad decisions on purpose, so I hold them accountable to make the best decision possible and then to fix it if it is wrong."

Donna Edmonds, CEO and president of the Virginia Biosciences Commercialization Center in Richmond, said she learned the hard way that taking on investors or strategic partners -- even if they receive only a small portion of the startup's equity, carries risks.

She arranged a partnership once with Medtronic, a large medical device company. Though the publicly-traded company owned just 20 percent of Edmonds' business, Edmonds found that it became virtually impossible to do anything without big company's approval.

The same was true for Pompeo when his ultrasound company, then known as PocketSonics, established a strategic partnership with Analogic. Though the larger company only owned 10 percent of Pompeo's business, it had the right of first refusal on various licensing and technology deals. That made it difficult for PocketSonics to develop any other strategic relationships, he said, and eventually led the businesses to realize that a sale and acquisition would be the best strategy.

"If you find a strategic partner for sales or marketing, that's a marriage, even if the partnership is limited to a very small piece of your business," he said.

During the Q&A portion of the event, panelists were asked what advice they would give to students interested in pursuing a startup. Edmonds said it was important to remember that experience usually beats education.

"I always would spend 60 percent of the time doing my job really well, and then I'd spend a lot of time asking other people how their jobs work," she said. "And remember that science without sales is scrap. There must be the potential for future sales."

Sahi said entrepreneurship involved doing uncomfortable things. And he said the best entrepreneurs focused on the long-term opportunities offered by a startup.

 

"Focus on that opportunity, and not on your salary or job security," he said.