This post comes to us courtesy of Graham Randall, Ph.D., MBA, who has agreed to become a regular contributor to Startup Houston and will write on the topic of biotech, life sciences and entrepreneurship. Graham is a Ph.D. candidate in molecular biophysics at Baylor College of Medicine where he was a fellow of the W.M. Keck Center for Computational Biology and a recipient of the prestigious John J. Trentin Scholarship Award. His research focuses on the effects of DNA topology on protein-DNA interactions. Prior to graduate school, Graham spent eight years in Silicon Valley as a software architect working for several startup companies, including Tellme Networks. He has an MBA from Rice University and a B.A. in applied mathematics from the University of California at Berkeley. Graham also writes two other blogs: Driving While Texan and Two Randalls.
Houston lags the major biotech clusters
A lot of energy has been spent in the last 10 years trying to figure out why Houston, with all the research conducted in its world-class medical center, hadn’t spawned more biotech startups. Houston lagged behind the major biotech clusters-San Francisco, San Diego, and Boston-in the number of biotech employees (~10,000 vs. 30,000-40,000), the number of VC deals (<10 vs. ~100), and the proportion of corporate-sponsored R&D (25% vs. 70-90%). The density of technology companies in Houston was far lower than the leading regions, so we had an underdeveloped infrastructure to support startups and a small pool of startup leaders.
Still, the city’s leaders wanted to see biotechnology become a major driver for growth in Houston’s economy over the next 15-20 years by creating 65,000 to 95,000 jobs and allowing Houston to remain competitive. Two organizations in town, the Houston Technology Center and BioHouston, lead the city’s efforts to encourage growth in the biotechnology sector. These organizations deserve credit for more than doubling the number of life sciences companies in Houston, as well as tripling life sciences employment.
But Houston still lags far behind the major biotech clusters. What is missing? For a while, the prevailing reason was that there just wasn’t enough biotech-savvy venture capital in town. Startups were forced to seek funding on the West or East coasts, and those deals invariably required the startup to move away from Houston.
This is only one piece of the puzzle, however.
Results of a competitive analysis
Last spring, I led a team of Rice EMBA students in an analysis of Houston’s biotech cluster. Our analysis included a look at the best practices of Houston’s competitors with the goal of identifying opportunities. The 20 competitors we considered were a selection of universities, economic development organizations (EDOs), non-profits, startup incubators, and state programs.
For each of the competitors, we examined their organizational philosophy and vision, primary target audience, scale, activities, and fundraising model. For the universities, we found extensive cross-campus programs with strong ties to the local business community. The schools actively promote technology transfer to students, postdocs, and faculty through a variety of cross disciplinary events designed to encourage attendees to think about how research can be commercialized. The integration of technology transfer with research stood out at UCSF, in particular, where the Center for BioEntrepreneurship is officially housed in the Office of Research. Similar initiatives to link academic research and local industry were found at the EDOs, non-profits, and state programs, with the additional focus on developing biotechnology-friendly public policy. Continue reading ‘Houston’s Dearth of Biotech Entrepreneurship’
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