A decade-and-a-half may not sound long, but a lot has happened in that time. At its launch in 2002, the Pittsburgh Life Sciences Greenhouse (PLSG) stood at the center of a new era.
The organization was poised to serve as the conduit for bringing ideas, innovators and investors together to commercialize life sciences products and services, to provide an attractive return to individuals, and to create jobs throughout the Greater Pittsburgh region.
“Back then hopes ran high,” said James Jordan, President and CEO. “Our region held tremendous promise, driven as it was by the leading research of our outstanding universities. The foundation community believed in the concept, and the investment community took note.”
Fifteen-plus years later, thePittsburgh Life Sciences Greenhouse has proved itself, and is continuing to do so, with a strong track record in many areas. The PLSG has assisted more than 460 life sciences companies and hired 49 executives via the Executive Program, the focus of which is to de-risk the startup journey. Jordan pointed out, “We invested more than $22 million directly into 80 companies, attracting over $1.5 billion in capital and returning $600 million to investors.”
The PLSG wants to attract more government, foundation and other monies into the pre-seed and seed investment segments. These segments are the phases before venture capitalists can invest. Without technology-based economic development (TBED) investment organizations such as the PLSG, Innovation Works and Idea Foundry, technology frequently cannot become de-risked enough to qualify for venture capital. This situation is frequently referred to as the “valley of death” because startups unable to obtain pre-seed and seed funding cannot proceed and frequently fail to progress due to lack of funding.
The life sciences follow a complex commercialization model; good technology is often not enough to win. The model’s complexity favors venture capital firms that wait until much of the commercialization risks have been removed before investing. Organizations at the beginning (pre-seed and seed phases) bear the risk to advance these companies to later-stage capital. The PLSG’s success in doing this is demonstrated in the numbers: its active portfolio companies have introduced 134 products into the commercial marketplace. Of these, 55 have completed regulatory clearances and are treating patients and improving patient-treatment decisions. Pittsburgh’s history of excellence in the field of health information technology (HIT) and software makes for a very attractive future.
Life sciences is a complex, poorly-documented environment. It generally requires 15 to 20 years of work experience for an individual to acquire the knowledge to plot a winning startup strategy. That is why the PLSG has an Executive in Residence (EIR) Program. Pittsburgh is rich with technical and entrepreneurial talent, the challenge is to determine the programs to collapse the learning cycle – the Executive in Residence (EIR) program is such a program. Each EIR converts experience into a curriculum: the “know-how” and “tricks of the trade.” Companies, particularly university spinouts, need knowledgeable management teams. Having management teams with industry-specific experience materially reduces the risk of companies failing. The EIR program has proven to be a means of delivering knowledge and expanding connections among researchers, entrepreneurs, venture capitalists, manufacturers and health care professionals.
“Jobs and financial returns don’t tell the whole story,” said Jordan. “The core mission of the PLSG is to serve as a valuable regional resource of knowledge and connection in the service of our life sciences community.” In the next three years, the PLSG will better serve the life sciences community by increasing social connections to foster the flow of ideas and provide better access to knowledge, the bulk flowing from the EIR program.
After becoming President of the Pittsburgh Life Sciences Greenhouse , Jordan noticed something troubling. “We did not have sufficient programs in place to help the youngest people in our community accelerate their learning,” Jordan said. The environment created to spur as much growth as possible in this particular “greenhouse” may not have been an optimal one. The organization suffered from a lack of young talent participating in its events—a serious and unacceptable flaw.
Jordan and his staff began talking with entrepreneurs and researchers under the age of 40 to learn why they had not been participating in PLSG programs. They provided frank and constructive feedback that their needs were not being met by the PLSG and that they wanted to spend their time wisely and productively. Having drawn negative or neutral conclusions about the PLSG, they chose not to attend PLSG events or to take advantage of its offerings.
Although the life sciences community here was on the rise, it could only continue to grow if all its constituents were engaged. A major part of the PLSG’s mission is to remain inclusive and to meet the needs of the entire life sciences community, including entrepreneurs and researchers under the age of 40.
This recognition led to establishing a new, six-member “Under 40, Underserved” advisory board to enlighten PLSG management regarding the specific opportunities and challenges that confront minorities, women and young entrepreneurs as business leaders in the life sciences.
The primary objective of this advisory board is to develop and enhance PLSG programs to support these underserved groups, spurring partnerships, friendships and alliances, broadening individual networks, and enhancing professional abilities.
“This board will help thePittsburgh Life Sciences Greenhouse connect and cooperate with existing support groups in the region, such as Propelle, the Minority Network Exchange, Vibrant Pittsburgh, Coterie and the T. Howard Foundation,” Jordan added.
As President of the PLSG, Jordan will continue to open doors to the wider community of innovative thinkers, talented entrepreneurs, financing sources, the foundation community, elected officials, governmental representatives and anyone with an interest in the amazing work achieved here in the life sciences in all its forms.
Jordan underscored that the PLSG continues working to capture and share its knowledge of life sciences developments and commercialization through expanding its new website with extensive resources, along with the development of a new website, HealthcareData.Center, populated with up-to-date health-system reference data due to publish in May 2018.
“We will continue to speak out and call attention to successes and challenges as they occur within our regional life sciences community,” said Jordan. “We’ll open our doors to the wider community, so interested influencers can better understand and appreciate the innovative work and ongoing growth happening here.”
The future that looked promising a decade-and-a-half ago has evolved into the impressive world of life sciences across the region today. Through encouraging greater knowledge and cultivating deeper connections, the PLSG plans to make the upcoming 15 years even stronger than ever.
“Our mission remains focused on promoting life sciences by maximizing the value of each company we touch through our Executive Program,” said Jordan. “We extend a heartfelt thanks to all who have worked with us on this journey, and we welcome all the partners yet to be discovered.”