Sunday, September 24, 2017

Using Crowdfunding to Build Business and Entrepreneurship Skills (650-5)

Not every life scientist wants to start a device or pharmaceutical manufacturing company and sell to a major device or drug manufacturer. Perhaps you are interested in a computer application for a mobile phone application for health purposes. If so then there may be the opportunity to pursue your entrepreneurial interest in parallel with your research. That is, perhaps you don't have to give up your research career while you are investing the viability of your entrepreneurship interests.

In fact, even for a life scientist interested in marketing a device or pharmaceutical, it may be advantageous to conceive of a technical application to test the waters and develop business and entrepreneurship skills without the complexity of equity arrangements and complex financials. Imagine it as a simple Y-Combinator type training to hone your entrepreneurship credentials.

For any potential enterprise, you need to first
  1. Get your thoughts organized regarding product, customer, customer need, and value added.
  2. Gather feedback to refine the idea, 
  3. Assess the financial viability regarding costs and competition
  4. Develop a plan to market the idea
  5. Test the market to see if it is viable. 
A reward crowdfunding site matches up with these steps
  1. For a life scientist with entrepreneurship interest a crowdfunding campaign focused on providing a reward versus giving equity is an excellent way to take on Step 1: Organizing one's thoughts. 
  2. Once complete you can easily proceed to Step 2 and present the enterprise concept to others. Your thoughts can be easily inspected and commented on by others to make further improvements and gather support. 
  3. The process will force you to investigate how much money you need and what you would charge. That's not a complete financial analysis, but it is a useful part of Step 3. 
  4. Crowdfunding emphasizes Internet marketing, and for today's products, social media focused marketing is your most effective strategy to accomplish Step 4. 
  5. Finally, the site can perform Step 5 where you obtain qualitative and quantitative input as to the value of the potential enterprise.
In the next blog, I'll outline how to utilize one of the two most popular reward crowdfunding sites, Indiegogo. I'll use it as an example of how it can organize your future enterprise.

References

Photo Credit: Crowdfundingescense.jpg ‎(630 × 433 pixels, file size: 38 KB, MIME type: image/jpeg) is licensed under the Creative Commons Attribution-Share Alike 4.0 International license. Source. 4 November 2015

8 comments:

  1. Brad,
    It sounds like life scientists are not interested in pursuing an entrepreneurial journey. Is it possible they could be more of an intrapreneur within the company they are working in? I'm guessing someone is funding their research and might be interested in backing a device or pharmaceutical as well as taking on the funding risk even if the developer is not. Just a thought.
    Your breakdown of how crowdfunding could work for a life scientist might give a plan to those toying with the idea.
    Cece

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    1. Most are working in academia and a change to entrepreneurship would be a huge change in direction, so I am promoting the idea of investigating something simpler than a new drug or device. I agree that anyone in a company already would probably be ripe for intranpreneurship. But that's not the folks I am trying to talk to since they have already decided to leave academia.

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  2. I know you mentioned Indiegogo as a crowd funding source. Depending on what the life scientist was to develop or start as a service which crowdfunding sources would be the most beneficial and why?

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    1. A tricky question and I haven't looked into Kickstarter yet. I think the big difference is that with Kickstarter you have to reach your goal to get the money. With Indiegogo you can choose to set it up so you can keep the money (and spend it wisely of course) even if you don't hit the goal.

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  3. I would also add presenting value. What does your business mean for other people in the world? What problem will it help solve? What process will it make easier? I like rewards, but I also want to have a connection with something I plan on investing in.

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    1. Agreed. That's why I see them as the first 2 steps
      1. Get your thoughts organized regarding product, customer, customer need, and value added.
      2. Gather feedback to refine the idea

      No one is going to give you money if the value to them or someone like them isn't apparent.

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  4. Hi Brad,

    I truly enjoyed reading your post - it seems as if an excellent flow-chart could be created from the content you wrote. Your step by step processes are very helpful in making sure that the critical areas of a business concept are thought through.

    Great post,
    Austin

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    1. A great idea. I'm still hunting for the best software for that. I saw that my Office 365 has online Visio, I'll have to try that. I've used draw.io (online creator) but I it isn't as intuitive as I would like. I also like flowcharts that are a part of infographics, but sadly have zero graphics skills.

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