Investible Units

Dr. Lysis: You work with Fixar?

Dr. Lytic: I work for Fixar-nACHr, one of the Fixar Investible Units+.

Dr. Lysis: It must be nice working in a larger company, with access to all the latest technologies?

Dr. Lytic: Fixar Investible Units are really small companies. We’re more like a franchise of Fixar. Through our franchise agreement we get access to all the latest technologies, but we are separate. I own 2% of Fixar-nACHr! We jokingly call ourselves ‘the hyphenated companies’.

Dr. Lysis: 2% … you must be the CEO… that’s got to be worth billions!

Dr. Lytic: I wish. There are only 150 employees in Fixar-nACHr … I just happen to be one of the original employees. Any time Fixar had a trading session I purchased more stock with my own cash. I really believe in Fixar-nACHr. It’s not worth billions, but if all goes right it could be worth millions by the time I’m ready to move on.

Dr. Lysis: And if all doesn’t go right? You’ll just be holding paper?

Dr. Lytic: Essentially yeah, but Fixar maintains an active market in Fixar-nACHr shares, so I will probably never get less than I would have made as a regular Fixar employee. That’s only fair since I took a hit in pay when I switched out of Fixar to join Fixar-nACHr.

Dr. Lysis: You left Fixar?

Dr. Lytic: Yeah, the bureaucracy was killing me. It got to the point where I actually hated to go to work. Not any more though. Any bureaucracy and petty in fighting will be pretty much my own doing. And I’m doing my best to keep it to a minimum.

Dr. Lysis: So you are the CEO of Fixar-nACHr?

Dr. Lytic: No, just a senior staffer. But with only 150 employees, including secretaries and support staff, I’m pretty sure I can get anyone’s ear any time I want.

Dr. Lysis: So you work for a small company … a one-horse show? Must be tough when you have to place all your bets on just a couple of candidates?

Dr. Lytic: It’s not like that at all. Yeah, smaller companies have that drawback. As a Fixar affiliate though, we have much greater access to funding and technology with fewer strings attached. Our charter allows us to develop many promising R&D candidates over 15-20 years. We don’t have to pick any one research candidate warts-and-all and run with it. We just need to show good progress on a year-to-year basis. I find myself, even as a senior staffer, able to spend about 60% of my time on new science. And we have the funding to use the best available outside talent. With just 150 staff we’re running 20 market studies across 10 research candidates!

Dr. Lysis: Fewer strings? Are they just throwing money at you?

Dr. Lytic: Of course not, we’re in constant competition for funding with the other Fixar Investible Units. There are 30 of them. Each year some move ahead, and some fall behind. We know we don’t want to be in that latter group for too many years in a row or we’ll be out on the street, literally, with our hat in our hand. We need a steady stream of commercial products.

Dr. Lysis: So just go for an early win, and you’ll be set for 20 years!

Dr. Lytic: Not entirely, Fixar might decide to cash out. And we never completely know where the overall Fixar priorities are going. If their appetite for risk shifts we can be the best nACHr company in the industry and still not make the cut.

Dr. Lysis: Wow, that’s too much uncertainty for me. I’m starting a family.

Dr. Lytic: What’s the worse that can happen? I walk away with a few million dollars in my pocket? I’ll live.

Dr. Lysis: That’s because you’re a senior staffer. I’m just starting and might not fare as well.

Dr. Lytic: Our junior staffers have many more options. The really exceptional ones are quickly snapped up by other Investible Units. We just grabbed Janice LeDoux from Fixar-mRNA. You remember her from the immunology conference. There are also many Fixar corporate opportunities. Senior staffers who have a proven track record, of course, can decide to start up another Investible Unit – they just need to apply for an investigatory grant that proves their ideas. Fixar is always looking for new areas in which to start Investible Units.

Dr. Lysis: So who loses in this? Seems like a win-win.

Dr. Lytic: You wouldn’t believe the turf battles we had to fight to pull this off. In the end the only way this worked out was we had to terminate many outstanding scientists. They were just too comfortable with the old Fixar way. Some of them are back as consultants or subject-matter-experts. Others have moved on. In the end though we eliminated most of the staff that were already what we called R.I.P., Retired-in-Place.

Dr. Lysis: Sounds great. How do I sign up?

Dr. Lytic: Most folks are hired first by Fixar, though it certainly won’t hurt for me to give you a recommendation from Fixar-nACHr first. There’s a two-year apprenticeship in the ‘Fixar Way for Investible Units.’ We teach you everything they forgot to teach you at Stanford. You’ll rotate through many positions and Investible Units, and support science efforts that cross all the Investible Units. After the apprenticeship when you know what’s up in each of the Investible Units, you petition a few for a position. You may decide you want to spend a couple years in one of the corporate IU-facing support functions. Not as much fun in my opinion but a good place to build your credentials before you petition the Investible Units. You become an expert in a technology area and later make the move. I wouldn’t wait too long though. The openings in the Investible Units are pretty competitive.

Investible Units are a collection of people, technology, intellectual property, mission and organization seeking funding for industrial research. What is an investible unit if it is not typified by most biotechnology firms? Venture Capitalists invest in these firms on a daily basis. Biotechs are however no more successful than their large industrial R&D counterparts with many thousands of researchers. The goal of World Class R&D is to identify the ingredients needed for successful Investible Units.

We use the idea of an investible unit as a touchstone for World Class R&D. Large-small, owned-independent, permanent-virtual. These are just a few of the variables to be considered. This is the thread that wends its way throughout all the thinking of The World Class R&D Institute.

  • What does it take to make an Investible Unit successful, vastly more successful than a typical venture-funded investment?
  • What do I see, what's the look and feel, when I walk into an Investible Unit that sets it apart from typical financial investments in research firms?

The answer is very complex; otherwise it would already be commonplace. We'll explore different aspects of the answer in the teaser links you'll see each month on the home page of the World Class R&D website. There will be up to a half dozen new links each month, each attached to a discussion that will be fresh, controversial and challenging to many preconceived notions about industrial R&D. Enjoy. If you already have thoughts as to what is really needed, then vote for your choices here. You must be logged-in to be able to vote.

Home Page April 2010