New Jersey Entrepreneur

November’s NJEF Meeting featured Paul Gilbert and Amy Ellis of Medavante (Hamilton, NJ). Medavante, Inc. is a six year old company whose mission is to help global Pharma companies conduct smaller, faster clinical trials. The pair was introduced by NJEF Trustee Rick Pinto of Stevens & Lee who has been an advisor to the company for several years (in fact since they attended NJEF in 2002).

Medavante helps run smaller, faster, more accurate clinical trials for the global Pharma industry. Take the assessments of patients in a trial and have a call center staffed with clinical interviewers and determine if they belong in a trial. The Pharma industry thinks that as a result, they can use half the number of people in trials they’ve used before. This is critical in an industry where it takes $800 Million to commercialize a drug.

Their comments on lessons learned in building their business appear below, starting with Amy.

Amy Ellis, COO of Medavante, was a packaged goods marketer with many varied experiences in product development. She has over twenty-five years experience managing and developing national businesses spanning the consumer, industrial, pharmaceutical, household, sports and agricultural categories Her last position was with Church and Dwight. She passed on these thoughts:

• Never do it alone.
• People tell you things you can’t do. Don’t believe it, just do it.
• It is a small world and people who are irrelevant now may be very valuable later. They may help you then. You will tangentially meet people who might turn out to be investors.
• If she had known how hard it was…maybe she wouldn’t have undertaken the challenge.

Paul Gilbert, Medavante’s CEO, worked with Amy in two prior organizations. Paul grew up with a deep passion for business, and knew he wanted to run with a fast team. He thought it best to be trained as a generalist, went to Salomon after college and then to Harvard Business School. He also worked at Johnson & Johnson, Arm & Hammer, Booz Allen, and Gillette among others. When Medavante began he realized the only great risk is to take no risk at all and play it too safe. His advice to entrepreneurs is to embrace unrelenting persistence, employ borrowed credibility, and to have the ability to endure anxiety. He advises that entrepreneurs need to create a fundable proposition in order to obtain any financing – basic building blocks of a story that can obtain financing. Several years ago, with a small group of associates, he researched several business models to leverage the Internet. One was the kernel for Medavante. His advice:

• You need a value proposition that addresses a key industry point of pain.
• Grow the team so it has the ability to execute the strategy. They started out to build the skill set of the team. They first brought on a scientist as a member of the advisory team to give them credibility.
• They then found a person who (after 5 months) became CIO.
• They then went for three years without salary. They had no idea it would take so long, but always assumed they were getting close.
• They got some resources from Pfizer, Astra Zeneca, et al and used to prove concept – needed the data.
• They established a virtuous circle – get data, get feedback, get more data, some money, go back to funders for advice and counsel.
• All the Pharma companies are extremely risk averse. They want to be early, but not first.
• With respect to risk, remember that all funders are very focused on risk. The company tried to looked at risk granularly. Demonstrating technical feasibility. Drive economic value.

Stakeholders. The ultimate stakeholder is the future buyer. Sales meetings (focus groups) with early buyers give the best information. They put the concept in front of 500 people. They were polishing the business model constantly. This strategy was successful because it gave the future buyers a sense of ownership in the organization.

Fund raising. No one wanted to give them any money. Venture capitalists want a high commission. They went to "organizational leaders" by invitation and told them they were going to use a small group, and wanted to vet them. Remember that "no" is just an excuse to come back again with additional information. The important thing is finding one or two "anchors" and then start getting converts. People want to invest in ideas. Once you have the anchors, the outsiders will be interested enough to participate.

NJEF meets monthly at the Centre for Innovative Technologies in N. Brusnwick.  Visit www.njef.org