Before HandyLab was sold for $275 million, the biotech startup failed miserably on its first application test and later changed strategy on its primary product model, said Kalyan Handique, a founder of the company.
“There were many things we did wrong, but one thing we did right was to stay true to our mission,” said Handique, now vice president of research and development for systems development for Beckton Dickinson Diagnostic Systems, which bought HandyLab in 2009.
Handique described the decade-long path to entrepreneurial success to Chicago Booth students at Gleacher Center on August 21. The event was sponsored by the student-led Technology Entrepreneurship Chicago (TECH) Group and the Polsky Center for Entrepreneureship. “We wanted to develop, manufacture, and sell novel molecular diagnostic products. We said our products would reduce time, cost, and complexity, while improving the quality of the results. Everything else changed along the way, but this mission stayed constant.”
The initial HandyLab Analyzer worked but was not commercially viable, he said. “We decided to focus on a product that would most meet current customer need,” Handique said. “We decided an open technology format would be easier. We decided to use technology that was more tried and tested.”
The result was the company’s trademark Jaguar for laboratory-developed tests, which focused on a market of 1,600 mid-sized labs, rather than the initial target market of 4,400 smaller decentralized labs in the United States, he said. “Instead of going to doctor’s offices, we decided we’d go to the hospital testing market,” Handique said.
After seven years of funding without a product, HandyLab faced a difficult task in persuading investors to back the change in course, he said. ”At some point, even VCs don’t want to change what they started,” Handique said. “Those board meetings were quite interesting at that time. But I think we pulled it through. Even though we had friction, people ultimately got on the same page.”
Two of the most important aspects of HandyLab’s success were assembling the right team and maintaining the right culture within the company, he said. “You have to have a can-do attitude,” Handique said. “Setting milestones is key. If you do not reach one, you might not get a chance to get to the next step. You must be committed and hard-working, and you must be honest about your capabilities. Ask for help when needed. Lastly, you must have fun working, because it’s a long haul.”
Regardless of culture, for any startup to succeed, it simply must have a superior business model, he said. This includes:
- Rapid, sustainable revenue growth.
- High gross margins.
- Efficient operating costs.
Handique’s journey ties very well with the TECH Club’s mission of promoting the use of technology in entrepreneurial ventures, said Imttiaz Ali, a student in the Evening MBA Program at Chicago Booth who co-chairs the club. “He showed that you have to have a really solid product, know what your customer wants, and stay true to your mission,” Ali said. “Secondly, he showed that failure should not deter you. During his journey in the last 10 years, Handique had some setbacks but he learned lessons from them and further progressed. In this industry, from inception to exit, it’s a very long duration. You need to have a lot of patience and a motivated team in order to be successful as an entrepreneur.”
— Phil Rockrohr