Telocyte Newsletter, Q1 2024: How to Fail

How can you ensure success for a biotechnology startup?

Five weeks ago, I gave an invited lecture to a Harvard Business School class (Harvard BIOT E-100, “The Business and Science of Biotechnology”) and that question – how to ensure success – was an obvious topic for my lecture. After discussing the science and introducing them to Telocyte as a business, I moved on to the key question: how can you optimize your chances of becoming a successful biotechnology company? The simplest answer is entirely accurate but conceptually lazy: in an absolute sense, no one knows. To say that we don’t know how to ensure success is true, but evades the necessity of finding a helpful answer. A more thoughtful answer – judging by the business literature – involves a thousand varied (and often conflicting) responses, often with magical shibboleths, and focused upon whatever is currently in fashion within the business world. Books, textbooks, talks, and articles in Forbes magazine abound and scarcely does a week go by without a new dictum from soi-disant experts. The question remains the same, but the answers blow with the changing corporate winds. Any question with a thousand answers suggests that we are operating on the wrong assumptions or we are asking the wrong question in the first place.

Any of us might easily list a dozen things that contribute to a success in starting a business, but what if we ask a different question? What if we ask how to ensure failure rather than success? This is what I think of as the sculptor’s view. In carving the dolphins among the stone waves (see above), you don’t so much carve the dolphins, as you remove all the stone that’s not part of the dolphins.

Instead of asking what we should do, we should ask what NOT to do.

So I gave a succinct summary on precisely how to fail. Rather than offering vague conceptual jargon or warm and fuzzy vision statements, my list of how-to-fail is concrete and is based on personal experience and on observation of how others manage to ensure their own failures. These rules let carve away the unwanted stone and get a better view of how to stay afloat when we start a business. The best ways to ensure failure are to:

1. Quit. Quitting guarantees failure. Obstacles abound in any startup and must be surmounted, not succumbed to. In raising funds, for example, a response rate of one percent is not atypical, nor a delay of several years to receive funding. Such obstacles are painful and frustrating, but they should serve to inoculate you with endurance and patience against the myriad future obstacles that will always arise. Quitters fail.
2. Hire bad people. Most startups fail not because of bad business models or bad science (although both are all too common), but from bad people. Egos, dishonesty, infighting, turf wars, status battles, and similar problems are the death of companies. Unless your team respects one another and enjoys working together, you have a recipe for failure. The same applies to your investors: if you don’t like them, don’t take their money or they’ll soon take your company.
3. Ignore regulations. I have seen companies elect to ignore the SEC, the FDA, the IRS, or other relevant regulations, laws, or standards. Regulations may be difficult, laws may be Byzantine, standards may be onerous, but ignoring the legal and regulatory boundaries, even in trivial ways, is an excellent way to ensure a spectacular failure, often with the lawyers, the agencies, and the media displaying a satisfied schadenfreude as you crash.
4. Target stale ideas. Most startups tout an old product in new colors. A startup may muddle along by “perfecting the iron lung” (instead of perfecting a polio vaccine) or “breeding faster horses” (instead of inventing the automobile), but real success lies in innovative risk-taking. The risk is in the degree of innovation, but if you can’t take risks, why are you starting a company at all? If you want to fail quietly and without anyone noticing, try selling yesterday’s product to tomorrow’s public.

These may sound obvious, but these (and a few other) behaviors are precisely why most start-ups sink beneath the waves. It’s not that they don’t have a lot going for them, but that they have even more going against them, and so they fail.

Telocyte has taken a different tack since our inception. We’ve never quit and never will. Our executive team is not only superbly competent and dedicated to improving lives, but we like and respect one another personally and professionally. We understand and adhere to all the relevant regulations, laws, and standards. Our approach is novel and well-supported, as we follow a completely untrodden path toward improving lives in dramatic and unexpected ways.

Success is never guaranteed, but we guarantee that our approach, our vision, and our people intend to make lives better, healthier, and safer. We now have two commitments for full funding of our animal study and our FDA human trials. As the new year breaks, we await only the initial tranche to move ahead as we sculpt our vision into success. So from all of us to each of you: may you have the best of health in the new year and share our success as we move forward.