I think that you have to stay rigorous on disproving the mechanism of your technology, if you want to create a true standard of care.
Marc Beer is the Chief Executive Officer, Chairman, and Co-founder of Renovia Inc. He is a seasoned manager with more than 25 years of commercialization and development experience in the pharmaceutical, biotechnology, diagnostic and device industries. In 2000, Marc became the Chief Executive Officer of ViaCell, a biotechnology firm that specializes in the development, preservation, and collection of blood stem cells of the umbilical cord. Under the leadership of Marc, the firm grew to more than 300 employees.
Marc is the founding chairman of the directors’ board and chairman of the Good Start Genetics Compensation Committee-GSGCC. He is also the founding chairman of the compensation committee and a member of Minerva Neurosciences Inc Audit Committee -MNIAC. Additionally, he is a member of the Business Advisory Council-BAC of Miami University and Graduate Studies Research-GSR of Notre Dame.
Where did the idea for your company come from?
I received a call about two and a half years ago from a brilliant 70 year old gynecologist who had been doing surgery in the pelvic floor for the last 35 years and dedicated the last seven to 10 years to finding out how he could help women avoid surgery, which is kind of the perfect person to think about the innovation that would be needed to keep these patients out of the operating room. And he came up with the idea, he found me through my network and ecosystem. I had never met Dr. Ray Iglesias until I got that phone call. And that’s how Renovia came together.
What does your typical day look like and how do you make it productive?
I believe that a successful healthcare build starts with talent acquisition. If you have the right platform of innovation, it really comes down to people, people, people. My typical week day to day is disproportionately focused on talent acquisition, organizational structure and process around operations. I think my success across seven builds really should focus back on the key leadership teams that I’ve put in place and we’re off to a tremendous start in hiring the best of the best at Renovia as well. If I reflect back on each build, my time was well spent on identifying the greatest leadership team and then helping them recruit and build out their individual domain expertise areas and then keeping the company focused on mid and long term vision and making the right resource allocation decisions.
How do you bring ideas to life?
Depending on what area they’re in, it’s really making sure that the creative ideas get the buy in of multiple disciplines. You need medical science, regulatory, legal, commercial, finance etc. all in the cockpit of the airplane. If one discipline is in coach, there’s a good chance you’re going to crash the plane. Coupled with that, I often try to instill that if you want a conventional outcome then think conventionally, but most innovative companies that are trying to be disruptive and truly either save lives or save money, they can’t think in a conventional wisdom mindset. So I try to drive a nonconventional thought process. If you want to conventional outcome, think conventionally. In healthcare we’re either trying to save lives or save money and it takes a nonconventional thought process to solve these problems. But even if you think in a nonconventional way you need every discipline in the cockpit of the airplane.
What’s one trend that excites you?
I think we’ve never been in an era of support for truly disruptive technologies either in the car industry, in the hotel industry with Airbnb, the car industry with Tesla etc. and in healthcare with digital health. I think within the next decade there’s going to be multiple breakthroughs in digital health where we don’t have to put a systemic med into the body by measuring and using sensors in unique ways, unique form factors, and digitizing the data, doing a big data capture we’re going to make significant breakthroughs in multiple areas.
At Renovia we hope that we’re the leader in women’s healthcare, digital health, but there already have been significant breakthroughs in the area of pain management, peripheral vascular disease, cardiac disorders. But there hasn’t been a major breakthrough in digital healthcare, or in women’s healthcare. And I think in the next decade they’re going to be multiple breakthroughs in this area.
What I like to see happening from a trend standpoint outside of healthcare is that disruptive technologies are really being embraced and within healthcare the greatest disruptive technology, I believe, has the potential to come from digital healthcare.
What is one habit of yours that makes you more productive as an entrepreneur?
I think resource allocation and capital efficiency. It’s so hard to build these innovative healthcare companies and make early and late shareholders both a great return. I think it comes down to critical goal setting, resource allocation and capital efficiency. And I think in digital healthcare, there’s a double effect where we don’t have to do extremely large trials because the data capture on these patients is occurring every day where in traditional therapies, whether it’s a therapeutic company or a molecular diagnostic company, you don’t have data capture 24/7. You ask the patient to come back into a clinic and do a blood test or some other kind of marker.
The capital efficiency in digital healthcare is tremendous and the returns that I’ve been able to drive for my shareholders have been because of a significant focus on critical value creating goals. And what’s the resource allocation that we’re going to apply to those goals? And then how do we approve capital efficiency as we achieve those goals? Those are the fundamentals that I’ve focused on for the last 20 years.
What advice would you give your younger self?
Always focus internally on the fundamentals and in the area of innovation until everything is truly proven. Staying internally focused is of great value. Don’t take shortcuts and understand there’s not a great executive you can’t afford. You can afford anybody who truly is great in their area of expertise.
The last words of wisdom that I really think have been kind of paramount in the last 20 years: You can’t squeeze your way to greatness. In healthcare, it takes significant capital, and having a capital structure that allows you to really support a standard of care change is important. I see too many young biotech companies trying to squeeze their way to greatness. It’s just not possible in healthcare. There’s too much that you need to do right. And there’s too much of an opportunity or chance that you’re going to do something wrong or shortcut something if you don’t have the right balance sheet.
Tell us something that’s true that almost nobody agrees with you on.
I don’t think you could ever stop trying to find truth of disorder and truth of mechanism. I think that you have to stay rigorous on disproving the mechanism of your technology, if you want to create a true standard of care.
I think most people would like to move on and they disagree with me on that. They want to move onto let’s just commercialize, commercialize, commercialize, and I don’t think you can ever stop proving truth of disorder. We often think in the most well understood disorders so that we understand them. And I truly don’t think we do, so I think staying focused on truth, a disorder, truth of mechanism all the way through a standard of care build is critical.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
I think it’s just a focus on a talent acquisition, bringing in the absolute best people, organizing them in the most efficient way. Constantly look at the human capital needed to achieve what you’re trying to accomplish. I think that most companies fail at that. Bringing in the right talent across the organization.
What is one strategy that has helped you grow your business? Please explain how.
I think business leaders always kind of flip nickels like manhole covers from a capital efficiency standpoint. You’ve got to think about cash flow. Most healthcare companies think that there’s another investment dollar behind the last one they received. I think cashflow positive in these in these early healthcare companies is a very positive thing and there are many leaders in healthcare that are too focused on innovation. They lose sight of the fact that at some point in time and sooner rather than later, you’ve got to cashflow these businesses. You have to hit positive cashflow. It’s really benefited me in many of my businesses that I have taken these businesses to cashflow positivity.
The saddest fact about biotech and healthcare innovation broadly is the majority of technologies in healthcare never get the flip the binary data card. They actually fail for a false positive reason and it’s just so sad that they fail because of the fact they run out of cash. The majority of innovative healthcare companies, broadly, and absolutely biotech companies never get the opportunity to flip the binary data card to say whether they’ve got a technology that should be offered to patients and the reason why is they run out of cash. And that’s on the leadership teams. They don’t know how to raise capital. I’ve never started a fundraising round I haven’t finished. I’m proud of that. There’s many, many healthcare fundraisings that start and never get finished. And I haven’t started a company where we didn’t finish the fundraising.
As an example, the most recent we went out to raise $20 million and we closed $42.3 million. So that’s the first reason that companies were out of money. And the second one is that they just don’t plan effectively how much capital they need to make it beyond more than two or three value creating milestones. There’s nothing worse than going out and raising 10 or $20,000,000 and committing to three milestones to be achieved and you blow through that $20 million dollars and you haven’t achieved those three milestones. Investors don’t want to re-up their funding when that’s the case. But the majority of companies in our space run out of money and it’s just a sad thing because there’s great technology out there that could help patients that never make it for the wrong reasons.
What is one failure you had as an entrepreneur, and how did you overcome it?
Well, one of my most passionate builds was ViaCell, which was in the category of stem cells. The objective was to be able to manufacture stem cells, like we can manufacture proteins and small molecules, it’s a logarithmically more challenging development than manufacturing proteins because the cell is much more complex biologically and we failed at it, not because the technology didn’t work. We built a very robust commercial organization and cashflow engine that was pouring cash into our development team. But we didn’t get there in the timeframe that we needed to. And often in this industry it takes 25 years for a new platform, or modality like stem cells or gene therapy from start to finish to actually become a robust category. We’re just now starting to see the fruits of the labor of focusing on stem cells 20 years ago.
And we at ViaCell were just early on in the process and the company got acquired. So the shareholders won, but in eight years we did not achieve the goal of being able to manufacturer cells. And if I had to look back on that, I may have split the two companies and had just a development company and a commercial company. I think that there was potential that we could have built more shareholder value for our shareholders. And I also think that the development company, if that were the case, would still exist today. It could have delivered more than one therapeutic product because those therapeutics in the cell therapy area are just now really starting to come to the market and manufacturing is being understood in a much more robust way than just a short 10, 12 years ago.
That’s why you can never rest on strategy. We debated whether to split the commercial engine and the therapeutic engine as a board and as a management team and we decided not to do it. But in hindsight it looks like we could have created more value if we would have split the companies and capitalized them as independent companies.
What is one business idea that you’re willing to give away to our readers?
A better technological system for maintaining and retrieving medical records. I’ve heard a few people floating some ideas and I can’t wait to see something come into fruition.
What is the best $100 you recently spent? What and why?
It was definitely personal – buying golf balls at Pebble Beach to make sure we didn’t run out. My son is a spectacular single digit scratch golfer and we have a wonderful father-son tradition that is going out and playing Pebble together.
I played it last weekend with him and it was just the best time I’d ever had there with him. I was sitting there with a golf bag with a dozen balls in the back and I thought to myself “Should I buy another dozen golf balls,” because you get charged a crazy amount of money for them. And thank God I did – ended up shooting a lot of them into the ocean!
What is one piece of software or a web service that helps you be productive? How do you use it?
I think there’s a couple of fundamental software packages that are critical to building a company. First off, fundamentally I think that there’s a number of areas you don’t short change. I over invest in IT and that comes from a man who doesn’t own a laptop! I’m one of the few people in the world who’s never been on Amazon. So it’s kind of strange. Everybody who knows me knows that I don’t own a computer and also knows that I’ve never been on Amazon and I’m one of the few people who Googles “Google”. That sounds like a funny thing, but my kids catch me all the time Googling “Google.” And with that backdrop, in every business I build, I absolutely over invest in IT because information technology is absolutely critical. Even though I don’t go and capture the data myself, I rely on it heavily.
I’ll start with a CRM system. You can’t fly a sales meeting in the dark if you’re the pilot of a sales group. You have to have great data. It’s got to be real time and if you could measure it, we measure it in the commercial organization, it comes back to capital efficiency. So dashboards are critical to me. I live and die by dashboards on the commercial side. Every sales and marketing effort that I’ve set up have been very expensive to do and if it’s expensive it doesn’t mean that it’s a bad decision. You have to know how you’re spending those dollars and that doesn’t happen without a great CRM system, customer relationship management system, and really investing in dashboards and having people that really understand how to measure what you need to measure and constantly challenging are we measuring the right thing? That’s number one.
Then I’d go to Gantt management software. I am a strong believer in Gantt management and the best Gantt management from a software standpoint will give you the information to understand what you should be doing simultaneously versus sequentially. I think a lot of mistakes are made in healthcare by sequentially versus simultaneously combining efforts and I don’t know any other way of doing that without giving rise to the key decisions and milestones that are coming up in a development program in that giving rise to that data is accomplished through a great Gantted software system. So we’ve always had that in every business that I’ve built.
And the last is making sure you have the best financial software in place. We’ve always over invested in our financial software to make sure that we’ve got great cashflow analysis. An investor once told me in my first build “Mark, you’ve got to know every day how much money is in the checkbook.” I listened carefully and made sure that I knew how much I had in the checkbook every day. And that’s served me very well. Software and IT are absolutely critical in building a healthcare company.
What is the one book that you recommend our community should read and why?
It’s an Oldie but a goodie. I love Built to Last: Successful Habits of Visionary Companies. It focuses on companies that we all know that have had sustainable value and highly disruptive contribution to society and they compare them to other companies that we absolutely know, but had failed. And it explores some of the fundamental commonalities around the companies that have been successful and comparing them to companies like Microsoft versus Wang.
It’s a book that’s really passed the test of time for me. I often tell people who work with me for the first time if you want to understand what my Bible is for business it’s Built to Last.
What is your favorite quote?
I don’t know that I have a favorite quote from someone else, but one of the ones that I love in the entrepreneurial world that you won’t find in the labs, I guess I attribute it to myself is “your windshield is 100 times the size of your rearview mirror for a reason.”
• A successful healthcare build starts with talent acquisition
• You’ve got to think about cash flow when starting a business
• Innovative companies that are trying to be disruptive can’t think in a conventional wisdom mindset.
• Never rest on strategy