The Minimally Viable Biopharma Infrastructure Model
Or 'why starting a biopharma company is like playing Zerg in StarCraft'
tl;dr-
Life science research & development (R&D) is often characterized by resource scarcity given the amount of committed resources necessary for clinical research, regulatory approval, and commercialization
While many biopharma start-ups look purely to minimize cost, the advance of healthcare technology suggests the appropriate focus should be on efficiency of spend - i.e. how much improvement, either in net present value (NPV) or in Probability of Technical & Regulatory Success (PTRS), does a given dollar spent on a capability, initiative, or resource represent?
Central to efficiency of spend is identifying the minimally-required infrastructure to achieve your strategic goals-
This mindset is identical to the minimum viable product mindset common in the innovation & technology sector
For biopharma corporate strategy, this means understanding the minimally viable tech stack that supports the business’ day-to-day operations & strategic execution
Two useful benchmarks include Moderna, a digital native biopharma company, and Novartis, a modernized legacy organization
Currently, the minimally viable tech stack for biopharma likely consists of the following elements-
A modern enterprise resource planning (ERP) platform that enables accurate & transparent accounting of financial spend (especially surrounding external partner & vendor management)
Data capture platforms for early-stage innovation, target identification, and asset generation
Real-world data tracking (i.e. Flatiron for oncology)
Device & diagnostic data insights (i.e. Medtronic / Dexcom data ecosystems for diabetes)
Curated databases to support early-stage feasibility & viability analyses (i.e. Microsoft’s Project Hanover)
Modernized tech stack for Clinical Operations;
Project management & clinical trial management software
Fit-for-purpose platforms surrounding data collection at clinical trial sites (i.e. electronic data capture platforms), documentation for quality & compliance (i.e. electronic Trial Master File systems)
Supporting technology for Regulatory Affairs; (i.e. AI-driven document creation, ensuring CDISC compliance for FDA submission, etc.)
Market Intelligence platforms to ensure organizational agility regarding external market trends & competitor dynamics (i.e. PTRS benchmarking, commercial & sales databases, etc.)
A Customer Relationship Management system (CRM) to organize and support external outreach, partnership, and marketing & sales efforts
Supporting technology for business insight generation & execution management:
Fully interoperable data environment to facilitate seamless data integration for ad-hoc tasks
Cloud infrastructure to enable hybrid working, collaboration, and reduce risks associated with on-prem data hosting
Analytics layer to generate business insights from data assets for leadership & oversight roles (i.e. ROI, operations benchmarks, etc.)
Ultimately, the proliferation of digital tools available via Software-as-a-Service business models enables savvy biopharma executives to not only lower required start-up investment, but sustain operational excellence at lower cost throughout the company’s life cycle
Failure to invest in these areas, however, may need to a negative feedback loop in which a company’s real operations consistently go over budget, resulting in cost-austerity practices that further reduce ability to invest in overall sustainability
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First things first - I’m actually really bad at playing StarCraft. I’ll get to why that’s the case at the end.
Second thing - despite my deficiency at playing StarCraft, it’s actually a very good model for dynamic resource management. While many may see the game as just commanding armies (represented by pixels) to go attack other armies (represented by other pixels) and winning when your army of pixels defeats the opposing army of pixels, in actuality the game is actually defined by a series of resource management decisions made in real-time. In fact, gameplay is a rich tapestry of trade-off decisions; do you invest in building infrastructure now or later? Do you invest in improving your technology - which may be a scalable benefit for your army - now or rushing towards a unit that will actually defend against an opposing army? How do you make decisions in without full information transparency (as StarCraft is not like chess; you won’t automatically see what your opponent is doing)? The entire game, frankly, is just resource management under pressure, with the constant threat of your strategy being simply bested by an opponent - perhaps because they are more efficient in their spend, or made better choices as the game progressed.
It should come as no surprise then, that in my current role at a biopharma start-up company, I often find myself feeling as though I’m playing a game of StarCraft against multiple opponents.
There is one key difference between StarCraft and the real world. In StarCraft (at least, competitive StarCraft), everyone starts with roughly the same amount of resources in the microcosm of the game. The real world, of course, doesn’t operate this way. Companies never ‘start’ with even footing; there’s generally always an incumbent, or there’s always someone who had access to more resources than you do, or better people, and so forth and so on. However, this also means that companies that make appropriate strategic bets on infrastructure & capabilities are able to start the game with a competitive advantage - at times, even in comparison on incumbent companies. It’s like starting a game of StarCraft with a free extra unit, or an extra upgrade, or even an extra base - and then if you’re still losing, well, you only have your poor execution to blame (more or less).
It’s why whenever I analyze companies now - including my own - I pay close attention to capabilities. From a resource management perspective, a capability is really a repeating algorithm of business activities & supporting infrastructure consistently provides an ROI to the business along a key measure of success. I especially pay close attention to relative capabilities between competitors, as they inform if - to use the StarCraft example - one player is starting off with that extra unit, or that free upgrade vs another. This thought process culminates naturally not only in what capabilities should companies invest in, but also when in the face of operational pressure & potentially even external market pressure; you know, that one investor who is really hung up on ensuring he or she gets his ROI that they start micromanaging operations.
For biopharma - and really for all companies - the ‘what’ is really more and more about your tech stack more than ever before. Having the right technological capabilities - the right data, the right analytics, the right insights - is one of the core ways biopharma companies can ‘start’ their game of StarCraft with that extra unit, or with that extra upgrade. This is especially vital as the speed of innovation in life sciences - particularly in areas like oncology - continues to accelerate over time. Even regulatory approval - often the bottleneck for a new biopharma product coming to market - is likely to shift to a faster decision-making model, driven by the growing external market infrastructure surrounding real-world evidence generation & data collection. When everything around you is speeding up, it becomes a strategic imperative to ensure that your organization has the right infrastructure - the right tech stack - to keep pace lest you fall behind.
There’s a challenge behind all of this, however - and like most great business problems, it is a ‘people’ challenge. Traditionally-minded business leaders - the ones who favor, for instance, command-and-control organizational structures - would answer this question of speed by maximizing productivity. In the biopharma world, it is this management idea of maximizing output - more assets in your pipeline, for instance, or recruit more sites for your trials, or ‘do more things.’ Oftentimes, this approach ends up failing in the biopharma space because the ‘speed’ I refer to previously is not simply execution speed. It also refers to strategic agility - ability to make decisions faster, and to make more optimal decisions based on data on-hand - as well as optionality - having available ‘choices’ to you to pivot into if the market requires you to do so. While operational speed - the ‘do more things’ approach, or in StarCraft the ‘press your keys faster’ idea - is necessary, it should never overshadow the need for comprehensive strategic agility.
Strategic agility only comes when, ding ding ding, you’re critically thinking about the capabilities your organization has access to because your organization’s capabilities determine the options you have available. And what better place to start than to understand the table stake capabilities needed to be successful so that, even if your opponents have an platoon in your market place, at least you’ve closed that gap with an extra unit or too.
To close off today, you may be asking yourself - hey, if WY can understand strategy to this degree, why is WY so bad at StarCraft? Well, a clarification- I’m bad at playing StarCraft. My fingers can’t keep up with how fast my thoughts are flowing as I play. Even if I were to train extensively, I’m not sure I could ever reach a point where my fingers will 100% reflect where my brain wants them to go 100% of the time. C’est la vie.
Fortunately, the parallel constraint in business is not predetermined by biology; it is determined instead by your leadership’s expertise, your company’s culture, and your strategic mindset. Luckily, that’s all solvable - and hopefully my thoughts above offer you a good place to begin that journey.
Til next time!
-WY