Dr. Mervyn Fathianathan, Managing Director of BioMers Pte Ltd
28 February 2010 By Ai San Yip, Ming Wei Fan and Cheryl Ann Â
28 February 2010
By Ai San Yip, Ming Wei Fan and Cheryl Ann
With a self-confident smile, Dr. Mervyn greeted us from his office at TradeHub21.
1.Â Tell us about your background.
I did my undergraduate studies and PhD in Mechanical Engineering at NUS. After I completed my PhD, I was awarded the Chevening Fellowship to undergo training in technology commercialization at the London Business School in the UK. I spent a lot of time talking and mixing with people who were interested in technology commercialisation, so when I came back to Singapore I co-founded BioMers. It was 5 years ago. I was the founding CEO of the company for two years after which I left the company to become an Assistant Professor in the George W. Woodruff School of Mechanical Engineering at the Georgia Institute of Technology in the USA. We hired a more experienced CEO to lead the company going forward. I was still a director and I had a consulting role with the company. Georgia was a relatively short drive from Florida where our United States office was based. Our board meetings were close, and I was still very involved in the company.
I was always interested in technology commercialization â€“ I took a course in Technopreneurship at National University of Singapore (NUS). In the engineering curriculum, you also did marketing and accounting courses. Therefore I wanted to see what the technology commercialization world was like. The Chevening Fellowship was a joint programme between London business School, Imperial College and Cambridge. London business school taught finance, Imperial College taught marketing and Cambridge taught product development. Actually I met my co-founder, George Aliphtiras, at the course.
After about 1.5 years at Georgia Tech, I returned to BioMers, initially as Vice President of Product Development and was later appointed the CEO again.
2. Could you share with us the motivation and story behind your start-up?
We took part in a number of business plan competitions. We came in first in Startup@SG, was a finalist at University of San Francisco business plan competition, won the best technology impact award at University of California (Berkeley) and won I2P Asia. We amassed cash through this route. Moreover, we were offered incubation space from NUS.Â Â
How we decided to start the company was interesting. At the end of the Chevening program we had to present the business plan to other people in the course. At the end of the presentation, the professor asked us whether we were going to really start a company. George and I looked at each other, and then he said, yes I think so.
And so the decision was made to start a company.Â Â
The initial funding we raised from NUS, our friends and families and several angel investors in addition to the money that we won from the business plan competitions. This brought us all the way to clinical trials. It was then when we started speaking to potential distributors. We realised that we need an experienced person in the company; therefore we brought in an experienced CEO.Â Â
The CEO, Randall Wall, had more than 30 years of senior corporate experience. He used to be the CEO of the largest orthodontic company in the world. He was the one who first introduced the translucent bracket and He had successfully taken companies to IPO or being acquired. He definitely provided us with a lot of knowledge and experience.Â Â
Finding the right kind of people is absolutely important, at the right stages. It was not very easy to raise money in Singapore. If you are a larger company, you can probably raise money, but if you are an entrepreneur starting up a company, it is not easy to raise money. During our start-up days, we did raise money from angel investors in Singapore, although it was a lot easier to raise money in the United States before the financial crisis occurred.Â Â
3. How do you choose your angel investors? Do you do your due diligence before choosing them?
The good thing about angel investors is that they give you more control, have a good relationship with you and give you money because they trust you. The people from whom we raised money in Singapore provided us with advice and we do have a very good relationship with them. We had a good board of experienced directors. The difference is that we had a very experienced CEO as compared to most start-up companies.Â
4. Is there a difference between being a corporate-savvy CEO running a huge business and a CEO running a small start-up?
There is a difference, as when you are a CEO who has been running a large company, you tend to focus on revenues, as that is what you are measured against. In contrast, a start-up companyâ€™s milestones may be somewhat different. You have to know how to introduce a product into the market.
Although it took us many years to get into the market, it was fast given the kind of products we were dealing with. We did raise a bit of money but it was considerably small for a medical device company which does manufacturing. We had to quickly ramp up to get the regulatory approvals in the US (FDA) and Europe (CE mark). In order to get the CE mark, you had to get an ISO certified manufacturing site. Our ex-CEO was someone who knew how to do things, and we did it very quickly. We might have taken a lot more time if Randy was not there.
It really is a question of when you get into the market and how much testing you got to do. There is no science behind this â€“ you cannot predict the market. You would not learn unless you go out into the market.
5. What is interesting about BioMersâ€™ technologies?
(Mervyn got up from his chair, took out the demonstration dentures from the nearby show cabinet and showed us the BioMers Braces, Arch Wire and Retainer products)
The initial patent belonged to NUS. BioMersâ€™s proprietary fabrication technology relies on the use of a shrinkable and flexible die. The technology is highly suited for the fabrication of composite rods at the micro scale. Other fabrication technology is capable in producing composite rods but technical limitations impede its application to the micro scale. This proprietary approach allows us to make high strength polymer composites wires with even distribution of the two materials. In addition, there would be excellent surface finish and allows us to make complex shapes.
People have been trying to develop this archwire for 30 over years, but no one had really been successful until we did it!
6. Why did BioMers chose to enter the orthodontic market, when there could be so much more applications with regards to your manufacturing technology?
This project started out in the Faculty of Dentistry and Faculty of Engineering; therefore we knew the application already.
This question is a fundamental question for an entrepreneur as many people have a core technology, but they do not know which market to enter. You can go for a billion dollar market. I am a product designer, and the way I look at it, we should take something that is going to be successful in the market, something that meets the need. This was a no-brainer for us as almost everyone who we spoke to told us about patients who were using translucent brackets with an obvious metal wire. Every patient who chose a translucent bracket would not want a metal wire. People tried coating the wire with a tooth coloured material. The problem with that is that it wears out very quickly, due to the forces in the mouth. There was also an issue with the wireâ€™s flexibility; hence it was not very popular.
There was an immediate need for a translucent wire, but that wire was not available. We went after this market.
7. What would be in the pipeline for BioMers?
One potential application that we are looking into is medical guide wires. We would update our upcoming products and activities on our corporate website, please check back for the latest news.
(We could see Mervynâ€™s eyes light up in thrill â€¦ )
8. How did you get Nanostart on board as your Venture Capitalist?
We initially got to know them through one of our investors. That was about one and a half years ago. We were to raise funds in the U.S. at that time. However, with the markets crashing, it was the worst time to raise money. So we came back to Singapore and started speaking to Nanostart. They had just set up their office here, and Mr. Andreas, the managing director of NanoStart Asia was based here. We moved quite quickly. They liked the story and we thought they would be a greater partner, so â€¦ it is like seeking romance, and eventually, a marriage.
BioMers Translucent Arch Wire was approved by U.S. FDA in May 2008.
9. How important is business education in setting up a company?
Experience is definitely important, but at the same time if people were too experienced in something, it may be a hurdle in thinking outside of the box in that area. I think education provides you with the fundamental knowledge. Otherwise you could just be clueless â€“ you would not have an idea about the basic terms. So I think that gaining that basic level of education is necessary.
10. If you could go back in time, would you take a PhD or start early?
I would still do a PhD, as I like research. In addition, it trained me in certain thing. If you want to come up with new technologies and innovations, you need to have the technical background and domain knowledge in order to understand and progress these initiatives.
11. What have been your most difficult and challenging times?
There were loads and loads of challenging times.
The most challenging would be the management of cash flow and the whole aspect of running out of cash. In a medical device business, or in the life sciences business, you are dealing with a conservative group of customers. They are not going to jump at your product even if it is the next best thing to sliced bread. When dealing with treatment, efficacy is the key. Many people do not, or will not adopt a product until somebody else has tested it and told them that it works. It is like your technology adoption curve, so you have the early people who adopt the technology. In the medical device section, this is probably a much smaller group of people as compared to consumer electronics. We made a mistake in understanding the cash flow needs of the company, resulting in the most challenging times for the company.
We realised that we needed to invest in marketing and prove without doubt the efficacy of the products. People cannot buy the product if they do not even know your product. You have to let them know about your product first. That costs money. Our most challenging time was realizing this late and trying to raise money in a time period when it was very difficult to do so.
12. What are your team dynamics like?
We have four founders â€“ George, Renuga, the inventor of the archwire technology, Karen, the inventor of the bracket and I. Renuga did her Masters degree on the wire and Karen continued our laboratory work in the Faculty of Dentistry. When we wanted to start this company, we spoke to Renuga and Karen, and they agreed to join us. So it was just four of us in a tiny room at NUS. We had three tables really close to each other and squeezed in space to do some laboratory work in the same tiny room.
My background is in design and manufacturing, and George was more in sales and marketing. His experience is in sales and he is a fantastic sales man. One of the things that I realised is that you got to get a crew of experienced sales people. It is very different as compared to getting a scientist to sell products. We need to hire a lot more sales people to attain greater market adoption.
13. It seems that your team members are always located at different places around the world. Did you face any problems regarding the distance?
We always have been a long-distance management company; we always had people at different locations. At the beginning, we had Randy in Florida, I in Georgia, George in Vancouver and Renuga in Singapore. We had to coordinate product development and manufacturing, getting regulatory approvals, investments â€¦ different people were managing different things. We are used to doing things in a distributed way. Of course, we spent a lot of money on phone calls!
14. What advice do you have for a technopreneur who is just starting out a life science/ biomed tech company?
One advice I would give is to have very realistic expectations of the finances. Cash flow is king, and you have to understand your cash flow. A lot of people, when they first start up and are writing the business plan, their revenues looks crazy. Even if you do use high discount factors, these discount factors just do not work!
The top down approach towards understanding your market is highly inaccurate. If my market is worth USD 2 billion, and after five years I get 1%, I will be the second richest guy in the world. Is that the way to do it?
What needs to be understood is that getting to that 1% is an incredibly difficult task.
I prefer a bottom up approach. This would mean something like our sales guy would visit five orthodontists in a day, and out of that one person is going to say okay. So from there you know that in year, you will get a certain number of customers. When you do that, you will get a much more realistic view of your revenues. If you do not know what your revenues would be like, you will not know how much cash you need to raise. You will end up getting busted very quickly and raising money is not easy at all.
Another advice I would give is know your customers and what they want. It is not just about asking customers what they want. A lot of people cannot articulate what they want. If Thomas Edison wanted to ask people what they wanted, people would say bigger candles, not electricity. There is no way they would know there is such a thing as electricity. What we believe in is observational skills. When we started out, we used to film the orthodontists performing dental procedures. We met very nice orthodontists who agreed to allow us to film them while they were practicing their surgical training. We tried to extract their needs from observation.
We also spoke to a lot of teens and adults who were potentially our end-customers. You have to understand your market.
15. Is it possible for a single person to start a company all by himself?
No single person would have the knowledge or the capability. The team is the single most important thing in any company, especially in an entrepreneurial company. When we started out, we actually sacrificed a lot. We were barely getting paid; we gave up many opportunities that would move us up many levels. George moved all the way to Singapore for close to three years. We gave up good paying jobs in order to start up this company. You have to find people who share the passion with you. You have to give them equity in the company. Some people take equity for salary. Once you get the core team set up, then you can move forward. It is the first step. The team would not necessarily be your friends, unless you have friends who have that exact skill set that you are looking for.
16. Was there anyone who had influenced you in setting up this business?
I think I stumbled into entrepreneurship. I was always interested in the idea of starting up a company, but was entirely clueless of what to do to run a company. We did well in the business plan competitions, and we made a decision there. Sometimes life leads you down a path, and you just follow that path.
I do enjoy this path.
When you are starting out a company, everyday what you do is new, new people, new experiences. There is an incredible amount of new experiences and challenges that you would be facing. This would inspire you to take actions on the challenges that face you!