Biopharma Startups Should Have A Side Hustle

Ignoring the sounds of a million Boston postdocs crying out in terror before being silenced, I think this is a great way to start talking about how we could build better biopharma startups. (Note: Biopharma is a subset of Biotech, but doesn’t encompass all of it. An Immuno-Oncology startup and Solugen might both be biotechs, but they are not the same type of company at all.)

As Roon mentioned, basic science is hard not only because of the technical difficulty, but also the scientific uncertainty. There’s much more “unknown unknown’s” in basic biology than in a react app.

This doesn’t mean that basic science is a bad bet but it should not be viewed as the main money-maker (and thus the basket where you keep all your eggs) until it moves into the realm of translational science.

Therefore, Biopharma startups should have a side hustle.

I’m not talking about the kind of side hustle that consists of illicit pharmaceutical-related activities, but rather a way to generate revenues that are more dependent on execution risk rather than scientific risk. This could be done in the form of software, hardware, or more de-risked/”safe” modalities such as small molecules, but I’m very partial to software as an initial side hustle.

The margins on software are high and the marginal cost of distribution is near zero, which can add a “buffer” to companies working on scientifically risky projects.

Insilico Medicine is one example of having pulled this off, as they started by selling their AI platform to large pharmaceutical companies before starting their own drug development business which uses their AI platform.

Now, I have a lot of thoughts about AI-driven drug discovery (they’re mostly negative in the present but positive for the future), but my goal isn’t that you walk away thinking that your startup should be selling AI platforms to big pharmaceutical companies.

No, you should walk away trying to sell ANYTHING for ANY MONEY AT ALL to keep your basic science goals nice and cozy.

Have a side hustle; it might save lives.