We might look at quiz show contestants and think 'I could do that.' But how many people truly believe that they have it in them to start a successful business? Jonathan Milner didn't. Not until 4 years ago, when he had what he describes as "an entrepreneurial seizure." Despite having worked for a brief period in industry and always having had an interest in commerce, he says that, at that time, he really didn't have a clue about it.
A move to Cambridge for personal reasons had prompted a return to academia, where he was working as a postdoc in the Wellcome/CRC Institute carrying out research on breast cancer. It was, he says, "the most fun of all the time I spent in the lab." But although he was enjoying his working environment, he was frustrated. "I couldn't get on with the research," he explains, because "I couldn't find the antibodies I needed to take it forward."
A business idea was born a year before the end of his postdoc contract. What was needed, he decided, was a one-stop Web site, where all the antibodies in the world could be sourced. But Milner wanted more. He wasn't just frustrated by the difficulty of finding out what was available, but also by the lack of information about the quality of the reagents when he did locate them. These two elements, the importance of being able to find whatever you're looking for in one place, and getting sufficient data about it to perform a successful experiment, form the basis of Milner's company, Abcam.
Jonathan Milner, founder and CEO of Abcam
Simply recognising a customer need isn't sufficient to get a business off the ground, however. Milner asserts that entrepreneurs can be made, as well as born, but he acknowledges that luck played an important part in launching his company. The last 3 months of his postdoc were spent in a frenzy of activity, and by October 1998 a basic Web site was online. Featuring a "very specific search engine" which allowed visitors to search the catalogues of all the existing antibody companies, it immediately attracted "lots and lots of hits." But Milner didn't want to simply act as a broker for other people's wares. This was to be no 'virtual', dot-com enterprise. He too wanted to make and supply antibodies.
That, however, required hard cash--and Milner didn't have any. Fate stepped in. "Being in Cambridge is brilliant," he says, because "you need people to start a business" and Cambridge is heaving with entrepreneurial types. In fact, Milner believes it would have been well-nigh impossible to start Abcam anywhere else in the UK. At a Christmas dinner he met one of those entrepreneurs. David Cleevely had started his own telecomms consultancy in 1988. Ten years later it was one of the leading companies in Europe, with 200 employees, and Cleevely, now chair of Abcam, was looking for a new challenge. He wanted to recapture the buzz of starting a business and sank £40,000 into the fledgling company. Meanwhile Milner took out a £12,500 bank loan. (They wouldn't lend him money to start a company, so he told them it was for home improvements.)
With his small pot of start-up capital Milner rented a tiny lab from the University of Cambridge and with one employee, a biochemist, started making antibodies. They kept the Web side of the business going in one corner of the room.
Milner offers three top tips based on his experience of this early stage of a new business. The first, and most important, is to expend a lot of effort in recruiting people. The first people you recruit will become the senior management team in your growing company, he explains, and will begin recruiting people themselves. Appoint idiots early on and you quickly find yourself with a company made up of nincompoops, he warns. The second essential is to "be really strict with cash." Milner took a pay cut from his postdoc salary, which unsurprisingly he describes as "a real struggle" but asserts "it was worth it to have solid finances." Finally he says, "listen to people." As a result of listening to early customers the company quickly started offering custom-made antibodies, which proved to be an excellent way of boosting vital cash flow. In the early days this custom service provided more than half the revenue, although off-the-shelf products are now becoming more important as the company matures.
Jonathan Milner's Most Important Lessons
Generating sufficient cash flow to be able to grow the business from its own trading revenues was essential in order to be able to create the company Milner wanted, although he acknowledges that this is not possible for all business models. However, his experience of venture capitalists (VCs) and city financiers quickly warned him away from this road to expansion. The VCs didn't like the idea that Abcam would have its own real products, labs, and scientists. This was, explains Milner, "the time of the dot-com frenzy," and the men in suits wanted to push him down the virtual company route. But Milner's response was "how can you make money out of just a Web site?" and he refused to change the business plan.
Money was still needed from somewhere however, and once again the Cambridge-factor came into play. The company's move to its current premises on the Cambridge Science Park was financed by £350,000 raised from local 'Business Angels'--entrepreneurs willing to invest a little of their own hard-won cash in a new venture. With the move the company doubled in size, from five to 10 people. One of the key people recruited was a very experienced financial director. Even at this stage of business development, stresses Milner, it is essential to keep a firm grip on the finances: "You can burn £350k very, very quickly."
Today Abcam has 20 employees (including six PhDs), 70,000 registered users of its site, gets 150 new users every day, and experienced 15% month-on-month growth last year. This success, believes Milner, is due to Abcam's "hugely talented and hard-working employees" and their commitment to the original company vision. The Web site still offers a comprehensive search engine which, if it does not find the antibody you require from Abcam's own catalogue, will search the catalogues of antibody suppliers worldwide. It seems counterintuitive to build a business by advertising other people's products, but this strategy "lowers your risk of not being able to find something" and ensures customer loyalty.
The other key element of Milner's business vision places Abcam's products firmly on the line. Customers are invited to write in with reviews which are published on the Web--so before you buy a product you can read what others have to say about it. And yes, they publish the bad as well as the good. This philosophy of "total honesty" is core to the business, says Milner, a philosophy which all of Abcam's employees buy into. But there is a business benefit too. Many of Abcam's antibodies are so specialised that they might only sell a few units each year. Producing comprehensive data sheets in-house would simply not be cost effective, but by rewarding customers (with Amazon gift certificates and the like) for sending in their own data, the company can build up the information which other scientists need in order to make a decision about buying their products. So far Abcam has only had to pull two antibodies (from its range of 2700 products) as the result of problems demonstrated in this way.
Listening to Milner's story, it strikes you that he is still very much an academic scientist at heart. It seems fairly unsurprising that the venture capitalists were unable to share his vision. Seventy-five percent of Abcam's customer base are in academia, and Milner believes that the company's roots in academic science have been crucial in building trust with this group. "Unless you've been in academia you have no idea about the needs of academic researchers," he says. Nonetheless, increasing sales to industry scientists is part of Abcam's immediate strategy.
So how has Milner himself been transformed over the last 4 years? What qualities has he had to develop to morph from scientist to entrepreneur? The entrepreneur, he says, must be visionary (how is the company going to look in a few years?), motivational (to get others to buy in to the vision), must have the persistence not to be put off by the multitude of problems faced by all companies in their early days, and be incredibly thick-skinned in order to ignore all the people who say that you will fail. Many entrepreneurs, he suggests, also have some less desirable qualities, which must be tamed if they are not to cause the fledgling business to fail. They can be dictatorial, stubborn, always right, and have the attention span of a goldfish. They also have a tendency to "spend money like it's going out of fashion." In addition, when you've started something yourself it can be incredibly hard to let go and trust other members of the team with your baby, says Milner. He struggled with this initially, though he's now finding it "easier and easier."
Keeping the right balance. To make a success of your business you have to change with it, says Jonathan Milner. You need the skills of the entrepreneur, manager, and scientist, but the balance of these different 'personalities' must alter as the company grows.
The successful company founder should in fact be a mixture of entrepreneur, manager, and scientist, he says, and the balance of these roles changes with the developing business. In the early days of one or two employees (see figure) entrepreneur and scientist dominate, with very little management required. As the company grows to between two and 10 people, management becomes far more important, squeezing both the entrepreneurial and scientific elements. This, says Milner, was a shock to him, but it was important to spend time developing things like the employee share scheme. Now that the company has grown to 20 people, the entrepreneurial and management sides of Milner's character must dominate equally, and only a very small part of his scientist personality remains. Abcam's six PhDs are, he admits, "better scientists than myself."
So does he miss being a scientist? Yes, terribly, for the "discovery bit," the 2% of the time when breakthroughs occur. But "I don't miss the long hours of tedium and not getting anywhere," he asserts. In fact, now that Abcam is expanding into the supply of a broader range of reagents including peptides, DNA, and kits, Milner has lost track of all the cutting-edge reagents that the company's scientists are generating--a sure sign that he is more businessperson than scientist these days.
Milner's most useful piece of advice was given to him by veteran British entrepreneur Chris Evans. It was in early 1999 and Abcam was going through a 3-month period when, as Milner says, "things were really black." Evans's input came at just the right time: "Never give up!"
*Jonathan Milner was speaking to PdOC, the Cambridge Postdoc Association.