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Sizing Up The Startup Lifestyle

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Most genomics companies are small businesses, subject to the same rules of risk and likely failure. Is it the right environment for you?

By Meredith W. Salisbury

Across the genomics sector, there’s a generally accepted level of instability. And in that environment, it’s easy to forget that companies in the space are subject to the same problems that plague all small companies. Take, for instance, that much-cited statistic from the US Small Business Administration: one-third of small businesses close down within two years, and 60 percent are goners by year six. With that in mind, GT talked to people in the industry to find out just how risky it is to take a job with a small company, what to look for in one, and whether big companies really are the safe havens they’re cracked up to be.

Risky Business

There’s no doubt that starting or joining a small business requires a drop of daredevil. Jon Morris, president and CEO of informatics company ProSanos, says that before founding what is now a nine-person firm, he enjoyed the feeling of safety at the 41,000-person engineering and tech services company SAIC. ProSanos didn’t come along until “I was at a point in my life personally when I could take the risk,” he says. “There is a risk and you have to believe that you [can] do it. I probably wasn’t in that situation 10 years ago.”

But for people who truly believe in the merit of a job opportunity at a startup, risk is not a dealbreaker. Ron Godiska is a senior scientist at cloning firm Lucigen, with a handful of employees. Before that, he was at another small business that failed. “I was pretty confident that it wouldn’t be the end of the world if the company folded, and it wasn’t,” he says. “If you’re confident with your marketability, it’s not going to be such a terrifying situation if the [firm] closes up.”

Certainly, though, that mentality could be seen as free-wheeling by more risk-averse people. Betsy Nanthakumar, a Sequenom project manager, tends to work for companies that have close to 100 employees or more. She consults for very small firms and says, “There is a lot of excitement, but there’s also a lot of risk. For me, being a parent and trying to raise children, I like to feel stability.”

Such security is historically what people have sought in larger companies, but more and more, it’s considered an illusion. “Celera just cut a sixth of its workforce,” Godiska points out. “I don’t see a big company as necessarily safer.”

Miguel Centeno, a public affairs officer with the Small Business Administration, couldn’t agree more. “It seems as if every other day there are announcements of layoffs and downsizing,” he says.

Nanthakumar knows from experience that the stability she feels at bigger companies is largely unfounded. Before she joined Sequenom, she considered a job offer from a big pharma division in California. She thought about taking the position — “maybe my chances for growth aren’t as big there, but maybe there’s more stability,” she reasoned — but wound up declining in favor of Sequenom, which then had a staff of 80 and now has more than 300. Just a few months later, another pharmaceutical company bought out the one she’d turned down, and the place where she would have been working was shut down. “There was no added security in big pharma,” she says.

‘Family Feel’

For many, the lure of a little company is the chance to have more impact without multiple layers of management to navigate, or to be able to do more on the job. “You don’t look around the room and say, ‘Who’s going to take care of this?’ — it’s you,” says Morris of ProSanos.

Cozier environments also give employees the chance to have more responsibilities and get more experience. “It’s a nice opportunity for people, especially if they’re fairly fresh out of school, to see more aspects of the company,” Nanthakumar says.

That couldn’t be more true for Godiska, whose scientific title is something of a misnomer. “In a real little company, you are all the different teams yourself. I can’t spend my whole day doing science. I’m doing purchasing one minute, then packaging, then some science, then customer relations,” he says.

The informality of this kind of do-it-yourself atmosphere is itself a draw for fans of the small business. People at these companies often cite the nebulous characteristic of “culture” — what Nanthakumar calls “the family feel” — as what separates the two types of organizations. “Anything bigger than about 100 people definitely loses something as far as culture’s concerned,” Godiska says.

For Morris, small-business culture means several things: flexible hours, the ability to telecommute if need be, and no neckties or suits.

Big Benefits

Still, the perks of working for a large firm can make it tough for startups to compete on the staff recruitment battlefield. Big businesses, defined by the SBA as having more than 500 people, have more resources and usually get more respect than their peewee counterparts.

That’s particularly critical in the genomics field, says John West, vice president of DNA platforms at Applied Biosystems. “In genomics these days, people want to do things on a pretty big scale. … There are certain kinds of things that we’re doing now that just wouldn’t be possible in a small company [because of] financing and scale, the number of people that need to be involved.”

Those resources are just as important for launching mega-projects as for sustaining setbacks, Morris notes. “Large companies … can afford more losses, they have more of a buffer. If a business or a technology or a drug fails, that’s just one of a portfolio. For a small company, if that fails, that’s a huge impact.” He also says larger companies get respect in the business world, while “small companies have an uphill battle of credibility.”

What everyone seems to agree on is that size, while an important factor, should not dictate your career. “You need to look at the company and say, ‘Is that something I can really get fired up about?’” advises West.

Also, experiencing the differences between the types of organizations can be beneficial, so these genomics veterans say try them out. “It’s great for a career path to have had both experiences,” Morris says.

Thinking about taking a job with a small company? Here’s what to look for:

Management track record. Because small companies often don’t have an established reputation or success rate, be sure to check out the record of the company founders, Godiska says. Do they have business as well as science experience? That — and a check into management stability (have there been big leadership changes lately that would suggest uncertainty?) — could be a good indicator of outlook.

Funding needs. “Is it crucial for them to get another round of funding?” asks West. With the VC spigot slowing to an occasional drip, a reliance on upcoming financing may be a bad sign.

Business plan. “I’d want to look at the business plan,” SBA’s Centeno says. “I’d want to see that this company has been well thought out, and see what your role is in the context of [the] business.” If there are annual reports available, check those out, too.

Talk to customers. A little legwork can go a long way in figuring out if this is the company for you, Centeno says. “See what the perception is out there of that small business.”

Be ready for transition and risk. There will definitely be a large-to-small adjustment for someone making the move, West says. “You might not realize how much you have in terms of resources and infrastructure [at a big company],” he says. You’ll likely be giving up a lot of that for the tighter budget of a small company.

Also, you have to be prepared for the shaky environment of a small company. “If you’re a person who doesn’t want risk and who couldn’t afford to have things completely flip 180 degrees, then you probably shouldn’t do it,” Morris says.

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