Author Archives: mattkrisiloff

It’s a Good Time for Industry Scientists to Start Startups

One thing I’ve been surprised about since starting SciFounders is how many of the founders we talk to are coming from academia rather than from industry. I think many industry scientists have great ideas too, and more should take the idea of starting a company more seriously.

One big advantage of working in an industrial setting is that you are seeing first-hand the problems larger, very well-funded companies are dealing with in their R&D and commercialization pipelines. This means you are in an ideal position to come up with new ideas for them as your future customers to solve these problems, or improve on existing technological approaches.

If you had the chance to work in a really good, well-run company, you may be better trained in operating your own company than most academic scientists, because you have seen how a company can look up close. I’m a big believer that companies can be very effective social coordination tools for people to work on hard problems– honestly far better than an academic environment that focuses more on the individual and their projects– and if you’ve been at an good company, you’ve seen how this can be an advantage too, and have a better idea of how to replicate that culture. 

Beyond being a unique setting to figure out potential problems of value to be working on, industry companies are also great places to meet co-founders. Scientists and non-scientists that are drawn to working at companies are probably in general more flexible and open to the idea of working in a company setting, and are also likely more comfortable with the twists and turns of what being part of a growing company can entail. By joining a company, it’s easier to grow fast, it’s easier to meet other like-minded people that you may want to team up with ultimately. 

For what it’s worth as I write this right now too, I think timing-wise it could be a particularly good moment to think about building a company if you’re already working at one. The financial markets are very down right now, so that means that most of the companies industry scientists are working at are quite suppressed in their stock value– if they gave you equity, your options might be less valuable than they are thinking [1]. And even worse, a lot of companies will need to do layoffs or may even close altogether, so job security may be less guaranteed with your current employer as well. Perhaps you’re even already currently unemployed – the silver lining of which may be that you are unencumbered to give starting a company a shot.

On the flip side, there are still a lot of early-stage investors that had just closed new funds prior to the downturn, and have plenty of capital they need to still invest as part of their jobs. That is great for if you want to start a company now, but that might not be the case anymore in a year or two if we have a true recession. Now might be the time to take the jump if you’ve been thinking about it.

If you do want to start a company, please feel free to reach out to me — I would love to help you explore. I also help run a fellowship program that gives $400,000 in funding and mentorship to start a startup. If that is something you might be interested in, please apply.

Thanks to Alex Schubert and Lucas Harrington for reading drafts of this post.

[1] If your employer hasn’t given you equity, you’re likely wasting your financial potential working there anyways.  It’s also always good to generally aware of the financial health of the company you work at.

Scientists Should Care More About Equity

One of the biggest differences between the software startup world (where I used to spend most of my time) and the science startup world is how little most scientists seem to value company equity. I think it’d be a really great thing for scientists and startups if this would culturally change. 

For many earlier career scientists that have recently finished a PhD program or completed a postdoc, they have had to live on ridiculously low salaries for many years – the average postdoc salary is below $60,000. Getting a much larger sum of cash understandably feels really nice after a very lengthy period of borderline financial exploitation. 

Almost every recruitment offer discussion I have with scientists ends up revolving around negotiating a higher salary, and hardly anyone asks for more equity instead. As a company founder, I used to not mind this as much – I figured it was easy enough to take said equity that would have been granted, sell it to investors for funding, and pass it onto the scientists in the form of cash compensation. As I’ve started thinking about it more though, I think it’s a real shame, because the biggest losers in this equation are the scientists themselves, and it hurts the company too.

Equity in a company is a very powerful alignment tool. Unlike a lot of software companies where the primary driver of building the business is to make money, science companies generally tend to have the benefit of getting to work on a very exciting mission that can truly impact the world by building new technologies or saving lives. And it’s true too that most scientists don’t go into science for the sake of caring about making a lot of money – overall I think that is a great thing. But honestly, even for many of those types of people, the idea of having the ability to make a lot of money can be a powerful motivating tool too.

If a company succeeds, employees should have the opportunity to get rich, and founders should want to make sure that all of their team members strongly have this chance too. It’s way more fun if everyone gets to succeed together, and it moves the team into the focus rather than the individual.

The more the whole team is invested in the success of their company and feels literal ownership of its entity and its future, the more likely team members will care deeply about making sure it succeeds, strive to work harder, and go beyond the quality bar that is set by their peers. A big part of the reason founders care so much about their companies is because it is *theirs*. As much as possible, scientists should want to feel like the company is theirs too. 

In order to make this change more of the norm, I think scientists need to understand the value and mechanics of ownership further. I find it very rare to speak to a scientist working at a startup who has thought deeply about how their shares could be worth 100x or even 1000x what they were granted at if things go really, really well. 

Most scientists have not been operating in a world where they get to see that successful fledgling companies really can get to the point where they are worth billions of dollars. [1] They do not understand that if things go well, they themselves can experience a life-changing financial event, even if they don’t have as much ownership as a co-founder.

I think it’s really important for this education gap to change across the hard technology ecosystem– not just so individual companies can perform better, but so scientists as a very valuable group of people can appreciate the benefits of working at startups vs. working in larger more established companies, or, perhaps even more importantly, slogging slowly through the mud in academia.

I believe company founders need to do more here to educate their team members on the benefits of ownership and drive this culture change. I’ve seen some science companies with multi-billion dollar valuations give almost zero equity to their collective team, and their team members don’t seem to care. This sucks and feels outright wrong. [2]

I think scientists need to do more here for themselves too. If you’re working at a startup and reading this, great — you have the tools now to understand this dynamic better. Encourage your company peers to think more about equity, and request it for yourself. Educate friends at other companies about how valuable equity can be, and explain the concept to friends in academia that it really is possible to be part of breakthrough, world-transformative research and also have the possibility of a major life-changing windfall if things really work out.

Ask and advocate for ownership – this will ultimately be the way to create this change.

Thanks to Dylan Field, Alexander Schubert, Bianka Seres, and Pablo Hurtado for reading drafts of this post.[1] One example of a scientist-led company that has become so valuable – the mRNA covid vaccine company BioNTech, which at present time is worth 39 billion dollars. That is worth more than Twitter, and its two years younger than Twitter too.

[2] Founders of companies: Be generous, help new and existing team members understand how big of an impact equity could mean under various circumstances. Actively encourage team members to ask for equity. Press other founders to do so too.