It’s a top 10 pharmaceutical company with a heritage that stretches back over 150 years, but Bayer is also one of those leading the industry when it comes to working with start-ups, thanks to its Grants4Apps accelerator programme.
To find out how a company, probably best known for its creation of aspirin in the 19th century, is engaging with, and learning from, start-ups, pharmaphorum spoke to its global head of digital health incubation and innovation Eugene Borukhovich.
He talked about Bayer’s innovation team and hacking the corporate system, and also shared three tips for healthcare technology start-ups looking to attract funding and big pharma partners.
It’s not for everyone. However, there are individuals and companies that are challenging the status quo.
The way I look at it, by definition a corporation is executing on an existing business model; in comparison, a start-up is discovering a new business model. If you think about those dynamics it seems impossible.
A friend of mine posted on Facebook: ‘Quick, make a decision. Do things better or do better things.’
In my opinion, a corporation needs the ability to laser-focus on doing things better. I would almost say that being in a smaller team is equivalent to a start-up, in that the team needs to grow and do better things.
You don’t necessarily want the whole corporation to suddenly focus on doing better things, because the business needs to execute on the existing business model, but the smaller team can do this.
We become the bridge between the innovators and the larger Bayer. Even when doing things better, I think you still need the innovation spirit.
I would almost see it as needing to ‘hack the core system’ – and I do not mean in the negative hacking ways. There is a lot of low hanging fruit; you need teams and people who will be ‘celebrated’ for doing what is unfairly called ‘incremental innovation’. So we look at co-developing opportunities, combining with some start-ups that help companies to do things better.
Under GrantsforApps we connect at four different levels, both external and internal. Firstly, we have our own meet-ups in almost 30 cities. This is how we get to know each other and identify some of the innovators who are willing to do something focused on hacking the core.
The second is co-working spaces – we now have these in at least six countries. It gives us another way of connecting and understanding how start-ups try to develop new business models and how we help them bring these to Bayer and access the wider market.
The third way is through a typical accelerator, which we are also expanding into a fourth way, called Dealmaker. This is where we try to manage expectations, because we realised that Bayer, as a large entity, is very hard for young start-ups to work with.
To me it’s not about David versus Goliath. That story says one wins, one loses. Instead, I think it is a match made in heaven, because each party brings a certain unique aspect with it.
Normally a larger organisation prescribes what needs to be done from its ivory tower: here is the governance model, here is what you need to do, here is what to implement. What Jesus [del Valle, head of R&D external innovation digital at Bayer] has done with the team is not just build a brand, but also a family. Nobody asks the teams in the various countries or cities to do any of this – it is not a prescription. These are passionate people who see this, not necessarily internally and on our intranet, but externally too, and are attracted to the idea of stepping up, spending more time in their day that they do not have and saying, ‘yes, I’m going to run a meet-up. Yes, we are going to launch a co-working space’. Then they go out and sell the idea to their local P&L owner and other businesses.
I think the news from the teams that are being created and approaching the global team is probably the best thing that is happening. They dedicate time, outside of their actual job, to organise things. For example, nobody asked the Thailand team to organise Grants4Apps – they just did. To me, that speaks volumes.
The second part is that there are always people from other departments, whether it is sales, marketing etc. popping in to learn or share their experiences with the start-ups, even in Berlin. It has taken on a life of its own. Has it surpassed 100,000 people? Absolutely not, but we are seeing momentum.
We need to be realistic. Keeping the process is important. I think the process-oriented culture that brought us here, to being a very innovative R&D company, provides value and output in the end.
There is a balance and it is a long way to 100,000. We are all innovators. What matters is what entrepreneurs do really well: their high focus and actually getting it done.
I get so many messages through LinkedIn and Twitter saying, ‘Hey, we have this diabetes solution’. If you did your homework you would know that Bayer had sold its diabetes division. To me that is a disconnect. You did not take time to really understand our business. As a start-up, know your customer.
Digital health is no longer hype – there is evidence of it coming out. The practice of medicine is still evidence-based though and I think that will continue. Approach strongly with at least a hypothesis for your evidence. Don’t come to us and just say: here is the technology. What is the hypothesis for the evidence you need to generate to prove that this could be a viable solution for the customer?
I do this both in Bayer and outside: if I am not interested I will tell you, or I will tell you what I need in order to be interested in it. I know it might sound a little harsh, but I’ve spent time on the other side as a start-up co-founder too, so you probably understand how many time-wasting conversations I’ve had. You either have potential interest or you don’t. It’s one or the other. It’s pretty binary.
Eugene Borukhovich is the global head of digital health incubation and innovation at Bayer. He’s also an entrepreneur in residence at Personal Health Solutions and a founder of Health 2.0’s New York, Amsterdam and Dusseldorf local chapters.