We recently hosted a webcast conversation between Hisham, Jeff, and Jason about how Lean Startup is applied in the hard sciences. This is part two of a mini-series we’re doing with Rhapsody Venture Partners. Our second conversation focuses on the startup, Sirrus.
Don’t have time for the full webcast now? Catch the webcast highlights and tips from their conversation in our companion blog below.
If you’d like to read the full transcript of Hisham Ibrahim’s conversation with Jeff Uhrig and Jason Whaley, you may download it.
Lean Startup In The Hard Sciences: Sirrus
We recently hosted the second episode on a mini-series we’re doing with Rhapsody Venture Partners on Lean Startup in the hard sciences where we spoke with Jason Whaley, General Partner at Rhapsody and Jeff Uhrig, CEO of Sirrus. Rhapsody is a venture capital firm that specializes in startups in the hard sciences, and Sirrus is a Cincinnati-based developer of novel chemicals that will reduce the time, energy requirements and environmental footprint of many manufacturing processes.
They spoke with Lean Startup Co. faculty member, Hisham Ibrahim about how they were able to take smart steps to successfully build – and sell – Sirrus in just five years and how believing in themselves is an important part of the process.
Thinking Beyond Conventional Wisdom
It can take a lot of time and money for a hard science company to create economic return for investors. But, for Jeff Uhlrig, the challenge of converting a breakthrough technology into a rewarding opportunity for investors was an exciting challenge, and has been his focus since joining Sirrus in 2013.
In those five years, Jeff successfully commercialized and sold the company. No small feat, according to Jason. “The conventional wisdom is that in these hard science technology…it’s gonna take ten, fifteen years and $200 million to prove this product out, and get it out into the market….Jeff was able to take a different approach to building the company, and make it work, and create good outcomes for the investors, and get a technology that has a positive impact on the world out into the market,” Jason says.
Most importantly, he did it in a way that’s repeatable by using concepts and methods that are very viable in high science markets and markets that go beyond software and consumer products.“Jeff was able to take a different approach to building the company, and make it work, and create good outcomes for the investors, and get a technology that has a positive impact on the world out into the market.” Click To Tweet
The Importance of Being Relentless
For Jeff and Sirrus, finding success meant getting back to the basics of what they felt customers and partners would care about most while working within their limited budget. They very quickly concluded that meant being smart about how they spent their money. In their case, using it to develop a minimal viable sample – not a full product. They delivered their product to potential partners with a “highly technical package” that informed them about the product and all of the things it is capable of doing and then asked for feedback. This helped streamline any guesswork in the process and allowed them to focus their next steps into generating the next iteration of a viable sample.
“We were able to generate interest by…only having one sample. Then we just used that to inform future decisions.”
The method worked and they were able to generate strong and productive partnerships, but it took a lot of work. “You have to be relentless,” Jeff says, “[My spreadsheet has] probably over 1,000 names on it of people we’ve talked to over the last five years.” He guesstimates that they have about a 10% conversion rate from turning the samples they sent out into joint development relationships.
Work with People, Not Companies
That’s not to say they weren’t picky. Sirrus was mindfully selective about who they sent materials to and, more importantly, how they cultivated their relationships with partners.
One of their first criteria was finding people who were, “intimately focused on intellectual property development,” Jeff says, because it meant they were generally creative thinkers who liked solving problems and helping to develop the technology further. Finding those partnerships was key to Sirrus’ business model. It not only helped Sirrus develop their product further, but it allowed those companies to file intellectual property and be first to the market using Sirrus’ unique product.
But their most important criteria in looking for partners is finding great people to work with. “Our experience is that people and companies are not synonymous in any way,” Jeff says. Because companies are large entities, and just because one person isn’t interested in your technology doesn’t mean someone else in the company won’t.
That’s why Jeff likes to pursue a highly communicative, “multi-pronged approach” within an organization. Sirrus works closely with people on every level of a company’s organizational chart, from the most junior levels to the CTO. That way there are fewer surprises and hiccups in the process, so the wheel keeps turning smoothly.“Our experience is that people and companies are not synonymous in any way.” Click To Tweet
Measurements of Success
But a company’s success can’t be measured on relationships alone. According to Jeff, it’s important to maintain a focus on your goals and what you want your ultimate outcome to be. For Sirrus, they wanted two things: to create a meaningful exit for their investors and to ensure their technology got commercialized and brought to the market.
With that in mind, they had three metrics they focused on.
The first was the “relentless focus on intellectual property development.” Jeff believes that, “in order to have a successful exit,” they needed patents that were globally issued, not just pending. It’s something that they track every single month.
The second metric, the one they were most rigorously focused on, was their customer adoption cycle. “What it really [comes] down to is somebody committed on paper…that they’re going to assign resources,” Jeff says, “in many cases, they assign significant dollars to the partnership.”
Finally, their third metric – admittedly something that’s not as measurable – was the metric of a team. “A big part of the process…is who [your team is],” Jeff says. So they were diligent about finding the right people to hire for every position. Because, when buyers come in, they’ll talk to every single team member. Jeff thinks it’s important for [the buyers] to feel that no real changes to the team dynamic are required. “We used [how the team is assembled and functioning] as a big part of our evaluation,” he says.
Believing in the Aura of Inevitability
But, Jeff admits, there are a lot of things that have to come together in order for your company to find success. That means there’s a lot of faking it until you make it.
“I think confidence is extremely underrated in startups and organizations,” Jeff says. It’s why Sirrus has tried to change the script internally from doubt to believing in themselves and each other. It’s what Jeff calls “the aura of inevitability.”
“We’ve all made a personal commitment to say, ‘this is the most important thing I could be working on. This is something I want to spend my life on,’” Jeff says, and then if those things hold true, the technology will inevitably be in the market. Which will, in turn, translate into customers and customer adoption.
That also means you have to trust yourself. “Almost every day, you can find hundreds of people to tell you what you’re doing is crazy,” Jeff says, giving you ample opportunity to give up. But if you’re able to look at your product and process honestly and still feel it has value, “don’t lay it down because you face a bit of adversity.”
Thanks to Shannon Lorenzen for contributing this piece. If you seek to bring the entrepreneurial spirit to your organization, Lean Startup Co. can help.
You can catch part one of our Lean Startup in the hard sciences mini-series here.