Why Deep TechCompanies Must Align with Industry and Investor Needs: Beyond the Scientific Mindset
The Myth of “They Will Come if the Tech is Excellent”
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The Myth of “They Will Come if the Tech is Excellent”
“They will come when the tech is excellent; that’s why we don’t need to sell.”
“Really?” I asked, surprised.
“Yes, it’s all about the tech. Nothing more and nothing less. We don’t need your sales, marketing, or fundraising advice. We’re scientists. We understand each other.”
This type of conversation is all too common in the world of deep tech startups.
Passionate teams, particularly those with academic backgrounds, often fall in love with their solutions, focusing exclusively on perfecting the technology without considering customer needs or market demand.
Especially for deep tech companies that often originate in academic institutions, the mindset remains tied to research, data, and scientific exploration rather than commercialization.
But once intellectual property is transferred into a corporate structure, it’s no longer just about the science.
Now, understanding market needs and aligning with industry expectations becomes the key to success.
The Reality — It’s Not Just About the Tech
Deep tech startups often measure their success based on academic criteria — publications, patents, and academic honors — because that’s what they were trained to value.
But once the transition from research to business occurs, staying solely within that mindset is a critical weakness.
Success metrics in academia include:
Publishing in high-impact, peer-reviewed journals.
Securing prestigious research grants and funding.
Earning awards and honors from the scientific community.
Positions and Appointments in top research institutions.
Mentoring students and influencing future generations of researchers.
There is nothing wrong with this academic mindset. On the contrary, it is absolutely fabulous as long as people stay in academia.
However, when moving into the corporate world, a new mindset is required.
The focus must shift from scientific exploration to solving real-world problems for customers, whether they are pharmaceutical companies, hospitals, or patients.
“You’ve got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to sell it.”
In deep tech and biotech, the end goal is clear:
To develop products that solve critical customer problems.
Product-market fit is everything.
Whether it’s novel therapies or advanced technologies, understanding market needs and customer pain points is the foundation for success.
Founders who leave academia are often drawn to the massive deal sizes that the industry offers — billion-dollar acquisitions and the allure of transforming the future.
But reality quickly sets in:
developing novel therapies can cost up to $5 billion, far beyond the reach of early-stage research grants.
Securing investment and strategic partnerships becomes essential, and the team’s ability to demonstrate product-market fit is vital from the start.
And yet, the only mindset the team has at hand is the academic mindset.
Why Biotech Startups Fail Without a Shift in Focus
One biotech startup spent years advancing its research, securing patents, and publishing papers.
Initially, everything seemed to work well — they earned non-dilutive startup grants and kept their academic positions intact.
However, when their initial funding dried up, they turned to investors.
That’s when things went wrong.
Despite their scientific excellence, they failed to attract investment because they had no roadmap that connected their research to market needs.
They had developed lead candidates, but those candidates were far from IND stage (Investigational New Drug) — a key milestone for investors looking for clinical-stage assets.
Many VCs are reluctant to invest in early-stage research.
They prefer startups that are nearing or in clinical development, where the risks are lower, and the path to commercialization is clearer.
Without a market-oriented approach, the startup was unable to raise the necessary funds to continue.
This story is not uncommon.
Many biotech companies struggle because their focus remains on science rather than product and business development. They simply don’t realize that in order to thrive, they must shift their approach.
Aligning Scientific Development with Market and Investor Expectations
To succeed, startups must develop a market-ready mindset — one that understands not only how to create great products but also how to solve problems for their target audience.
Scientific excellence must be paired with a clear commercialization path.
Whether it’s pharma, patients, or hospitals, the needs of customers must come first.
In biotech, startups must balance the interests of various stakeholders:
Early-stage investors
Public funds
Scale-up funds
Pharmaceutical partners
A research-first approach that doesn’t cater to these stakeholders will fail to attract the necessary investment or industry partnerships.
Startups must align their vision with the needs of both investors and industry players, ensuring that their development milestones are commercially relevant.
Genentech’s Success Story: A Blueprint for Strategic Value Creation
Founded in 1976 by Herbert Boyer and Robert Swanson, Genentech pioneered the use of recombinant DNA technology and became a groundbreaking force in biotechnology. While their scientific achievements were extraordinary, their long-term success was built on aligning these breakthroughs with a clear business strategy.
1. Investor Alignment
From the beginning, Robert Swanson, a venture capitalist, understood that scientific progress alone wouldn’t attract investment. Genentech crafted a business narrative that showed how their technology could be used to create real-world solutions, starting with human insulin. Swanson secured early funding by clearly demonstrating how their work could lead to commercially viable products, helping bridge the gap between science and business.
2. Product-Market Fit
Genentech’s decision to focus on producing human insulin was strategic. By solving a real-world problem for diabetic patients, they not only proved their technology but also demonstrated early product-market fit — a key factor that attracted more investors. This focus on practical, commercially relevant outcomes is a critical lesson for academic founders, who may otherwise remain focused solely on scientific progress.
3. Strategic Partnerships
Recognizing that they couldn’t scale the product alone, Genentech formed a crucial partnership with Eli Lilly, a pharmaceutical giant. This partnership allowed them to rapidly scale production and distribution, turning their scientific innovation into a viable business. For startups, this highlights the importance of building relationships with industry leaders to scale and commercialize effectively.
4. Speed and Execution
One of Genentech’s greatest strengths was its ability to move quickly. From the discovery of recombinant DNA technology to producing human insulin, Genentech consistently hit key development milestones faster and more cost-effectively than competitors. This agility made them more attractive to investors and industry partners, a lesson that underscores the need for efficiency and speed in biotech development.
5. The Public Offering and Beyond
In 1980, Genentech became the first biotech company to go public. This marked a watershed moment, demonstrating how combining science with strategic business planning can result in massive success. Their later acquisition by Roche for $46.8 billion in 2009 remains one of the most significant transactions in biotech history.
Key Lessons from Genentech’s Success:
Align science with clear investor expectations and real-world applications.
Focus on product-market fit to validate the commercial potential of the technology early on.
Form strategic industry partnerships to scale and commercialize.
Maintain speed and efficiency to stay ahead in the competitive biotech space.
Genentech’s story is a perfect example of how startups can succeed by combining scientific innovation with a sharp focus on business strategy. For academic founders, the lesson is clear: great science must be paired with strategic vision to thrive in the commercial world.
Moving from Science to Market Success in 5 Steps
To follow in Genentech’s footsteps, deep tech startups must:
Conduct Market Research: Attend industry conferences (e.g., BIO Europe) to understand investor and industry needs.
Create a Clear Development Roadmap: Align scientific goals with market needs, establishing clear milestones for both product development and investor expectations.
Focus on Development Speed and Cost Efficiency: Investors want to see that the company can move quickly through development stages while managing costs.
Craft a Compelling Story: Tell a story that resonates with investors, showing how the company will move from lab to market.
Scenario Planning: Develop realistic timelines and scenarios to keep investors confident and aligned.
By aligning their strategy with market and investor needs, deep tech companies can avoid the common pitfalls of focusing solely on science and achieve long-term commercial success.
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