Share and share alike: how the sharing economy is influencing biotech innovation and what it means for startups

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Date: Dec. 2015
From: Nature Biotechnology(Vol. 33, Issue 12)
Publisher: Nature Publishing Group
Document Type: Article
Length: 2,526 words
Lexile Measure: 1500L

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Taking a biotech invention from bench to market is an expensive undertaking. Starting with a promising drug target or device prototype, company founders face a series of hurdles relating to space, equipment, personnel and legal and accounting demands. Because the setting up of this infrastructure is capital and labor intensive, and it takes place before the achievement of key clinical milestones, the biotech model has traditionally relied on attracting a large initial round of investment to fence away intellectual property and support translation and commercialization.

Yet the business model for innovation by startup companies is undergoing a remarkable transformation. The past decade has witnessed advances in open-source software, cloud computing, rapid prototyping of hardware, logistics in transportation of goods worldwide and mobile communication, leading to the establishment of a 'sharing economy. In the tech economy, startup companies can now access a co-working space, use cloud-based servers and collaborate with the larger community for coding needs. This sharing model is particularly effective when the resources involved are expensive, specialized or scarce (1, 7).

In the biotech industry, challenges to access such resources are amplified. Companies can benefit from shared access to a variety of resources, including chemical synthesis, molecular biology, cell biology, animal testing and assay development services, instrumentation, and hardware and software development--and this is sparking a proliferation of capital-efficient startups that tap into an expanding ecosystem ofservice companies. Moreover, with increasing competition for academic positions, industry jobs and research funding (2), the talent pool of trained scientists who can offer their knowledge and skills to biotech startups on a freelance basis is growing. On the basis of the above evidence, we believe that a sharing model will become an increasingly popular one for biotech startups.

Mine and yours

Biotech companies are already relying on outsourcing for DNA sequencing and planning of clinical trials (3). Today, there are four large areas emerging for biotech sharing: physical space, equipment and supplies, knowledge, and financing. In the sections below, we take each in turn.

Space. Securing a workspace can be difficult for any early-stage company, given a lack of credit history, dearth of acceptable space to rent and rapidly changing needs. For life science companies, finding a workspace can be doubly challenging owing to the need for specialized infrastructure, such as chemical fume hoods and biosafety cabinets, and the production of medical waste. To address this, some universities are opening incubators on campus with wetlab space (4), but such spaces are typically reserved just for startup companies generated by those institutions. In addition, there are also privately run co-working lab spaces (5), but given the high market rents (especially in biotech hubs), even a small dedicated footprint can be unaffordable to companies that have not yet obtained institutional financing (Table 1).

Box 1 Harlem Biospace's affordable shared biotech lab in Manhattan As one of the costliest real-estate markets in the country, Manhattan has been a difficult place for young biotech companies to find a start, despite hosting seven premier academic medical institutions....

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