Welcome to the second issue of JayStreet. This journal is entirely the product of an advanced entrepreneurship and communications class offered by the Center for Leadership Education (CLE), part of the Whiting School of Engineering. In September 2009, thirteen students from a variety of majors on the Homewood campus enrolled in the workshop, some flirting with the notion of starting a business someday, others drawn to the opportunity to write, design and produce a magazine and still others who wanted to meet people who had turned ideas into successful enterprises. Over the course of the semester, these students formed teams, interviewed and worked with en-trepreneurs, absorbed business principles, created covers and layouts, wrote draft after draft, and edited each other’s work. Very simply, they fully engaged in the process. The articles, in-terviews and graphics in this Journal represent their take on the bustling intersection of science and entrepreneurship.

This journal would not have been possible without the sup-port of the Center for Leadership Education and the Develop-ment and Alumni Relations Office of the Whiting School. In particular, I want to thank Robert Spiller, Associate Dean for Development, and Development Coordinator Mike Blow for identifying several of the entrepreneurs who worked with us all semester. We owe special thanks, as well, to Montserrat Capdevila, former President of the Hopkins Biotech Network, who generously volunteered her time, expertise and talents to us, recruiting speakers, creating our website (www.hopkinsjay-street.com) and providing expert advice in too many areas to enumerate. Niki Buchholz, our tireless Course Assistant, de-serves special thanks, too, for being there for all of us, keeping the classroom technology – and the copier – always going. Fi-nally, I would like to thank the entrepreneurs themselves, who generously gave their time, energy, insight and guidance to me and to all the students enrolled in Creating JayStreet.

Read, think and engage with us.

Pamela H. Sheff, Ph.D.Lecturer, Professional Communications ProgramCenter for Leadership Education

Letter from the Editor-In-Chief

Fall 20092

Do You Have What it Takes?Business School: Who Needs It

By Stephen Sihelnik, page 6Anatomy of a Dealmaker

By Ilya Subkhankulov, page 10Running a Business of Running

By Brett Schwartz, page 12The Idea Behind Entrepreneurial Thinking

By Dory Giannos & Brett Schwartz, page 15Staying on Top: Innovating to Remain Profitable

By Kyle Halleran, page 16

Doing Business in the 21st CenturyA World Without Google

By Andrew Pevsner, page 4Social Networks: Are they Becoming a Nuisance?

By Elizabeth Lenrow, page 26Academia: Cultivating More than Intellectuals

By Chelsea Gonzalez, page 29Guanxi & Entrepreneurship in China

By Alex Qian, page 39

Biotech- Beyond Biology and TechnologyPlanting the Seed for Biotech

By Dory Giannos & Jose Deschamps, page 19Maturing Biotech Davids & Struggling Pharmaceutical Goliaths

By Jose Deschamps, page 23What is Biotechnology & Why Does it Matter?

By Sean Hennessey & James Teta, page 32BME Design Team: Cultivating the Next Generation of Biotech Entrepreneurs

By Michael Brooks, page 34

CONTENTS

JayStreet Journal 3

It is difficult to believe that in just ten years, Google has grown from a Palo Alto basement to an irreplace-able destination for millions of Inter-net users every day. Google has come to dominate nearly every sector of web usage and has become such a strong influence on everyday life that it was added to the Oxford English Dictionary in 2006. Its unprec-edented growth, hip image, and unparalleled success have given Google an iconic, rock-star status among companies in all indus-tries. It is one of the coolest and most influential corporations in the world, and arguably the most highly sought after employer in the United States. But what if it had nev-er existed?

Before Google Founders Larry Page and Sergey Brinn had even met, Ed-win Addison was running ConQuest, a search engine company based on artificial intelligence that earned Addison “Entrepreneur of the Year” honors in 1994 from the Information Industry Association. Like Google, ConQuest’s success was predicated on search innovation. However, the two search engines worked in com-pletely different ways: Google uses

a keyword search, while ConQuest’s engine was concept-based.

As the name implies, keyword searches simply attempt to match a given word to either the content or title of a website. Engines then in-dex the results; how well they do so determines their success level. The relatively simplistic nature of this

matching process forces users, rath-er than the search engine, to find the precise words that will deliver the most relevant results.

Page and Brinn turned a small in-novation into multi-billion dollar fortunes by providing Internet us-ers with the best available keyword-based search engine on the web. Their brilliance was not in creating a new way to match words to sites, but in developing an innovative and su-perior method of indexing and rank-ing the results returned during the matching process. This complex and mostly secret ranking system is the

source of Google’s competitive ad-vantage over other keyword-based engines. But even Google cannot beat concept-based engines when it comes to searching ability.

Concept-based search engines use algorithms built around artificial in-telligence theory to mimic human thought processes, searching for

underlying meaning in keywords rather than simply identify-ing similarities. The software is so complex that it works in es-sentially the same way that any translator does. There is just one small difference—its translation

enables communication between hu-man language and computer code. For users who want to search through anything electronic, whether it’s a local collection of files or the entire Internet, an effective concept-based search yields much more highly tar-geted results than even the best key-word searches.

But if concept-driven searching is so much better, why do we tell our friends to google something when we want information, instead asking them to “ConQuest it?”

Ed Addison founded ConQuest in the late 1980’s, when the Internet’s

A World Without

GoogleThe Untold Story of Conquest Software

By Andrew Pevsner

Fall 20094

Thoughts For the Future:

Concept-based search-ing is currently dormant but may not be dead. As computing costs con-tinue to come down, concept-based engines may be able to compete with keyword search-es. Ironically, Google is currently in the midst of internal research revolving around solar technology that could bring down computing costs by as much as 60%.

commercial power was just begin-ning to be realized. By the mid-90’s the economy was beginning to grow at an increasing rate but the Inter-net was still in its infancy. In 1995, Addison was running a successful software company in a healthy economy. His concept-driven searching soft-ware, designed using complex algorithms and artificial intelligence, boasted capabilities never before seen. He had created large barri-ers to entry for potential competitors and was facing a market on the verge of exploding. On the surface, the future appeared to hold nothing but smooth sailing. In reality, Addi-son faced a difficult crossroads that had the potential to drastically alter the path of the entire technology in-dustry.

If ConQuest was going to become a dominating force in the industry, the natural next step was to take its tech-nology online and reach the millions of potential users that the Internet provided. But this is easier said than done, and Addison had several fac-tors to consider. His company was doing very well with several large clients, and would likely continue to flourish selling software directly to customers. Launching an Internet search engine would require an en-tirely new and foreign business mod-el, the likes of which did not exist at the time. Google’s model, which was created by first attracting as many us-ers as possible and then figuring out how to make money, violates nearly every historically standard rule of business and has succeeded only be-cause of incredible innovation and pioneering. There was also a final option that Addison also had to seri-

ously consider: a very lucrative offer to sell the company to Excalibur, a firm specializing in multimedia re-trieval software.

While many thought the Internet

was the next frontier, taking Con-Quest online was a risky proposition that would require millions of dollars in additional capital. Concept-based searches do yield better results. But better results require better algo-rithms, which are more difficult and expensive to create and maintain. More importantly, concept-based searching requires the use of expo-nentially more data.

Storing and analyzing this data requires larger and more powerful servers. More servers mean more money. To paint a picture, some es-timate that Google’s 450,000 servers run up monthly bills of over $2 mil-lion in electricity charges alone. Add initial hardware and other mainte-nance costs, and Google’s costs range in the tens to hundreds of millions of dollars annually. And remember, keyword software like Google’s de-mands far less computing power than ConQuest’s software would have.

It is easy to forget that corpora-tions are built and run by human be-ings who have to make decisions just like everyone else. While technology might have dictated that ConQuest go online, the decision that confronted

Addison was solely a business deci-sion. An Internet search engine was an exciting and tempting new fron-tier with the potential to net billions of dollars. But it was also the costli-

est and riskiest option, and carried an equal potential to destroy the company.

After thoughtful delibera-tion, Addison and his man-agement team decided that putting ConQuest online was too risky; the time it would take to net the additional capital required would have given keyword based search engine companies too big of a head start in acquiring market share and establish-

ing brand name. He decided to sell ConQuest and was rewarded hand-somely for his work. The battle be-tween keyword and concept search-es, Google and ConQuest, was not to be. In all likelihood Addison made the right business decision. But his story does leave room for the ques-tion: what if?

How Do We Search?Keyword Based

Matches search words to websitesReturns hits based on exact word matchingRanks sites based on levels of similarities

Concept BasedMatch what search words are ‘‘about’’ with websites

Returns hits based on theme or subject of your searchRanks based on relevance to underlying meaning

JayStreet Journal 5

What next? As a budding entrepreneur, you should (hopefully) be finishing up university and looking towards the future. As you think about what you’ll be doing next, you keep hearing those magic two words ring out in your head. You know, the two words that make everything better: business school. Sure, you need a little work experience before you head off to business school, but after that, you’re set, right? Right?

“Wait a minute.” That’s the response I’d get from some of the entrepreneurs I’ve met with. In their eyes, the business school route is only one of the many paths you could take to get your business education. Heck, even some professors at MIT might not think that business school is the way to go. Andrew Lo, of MIT’s Sloan School of Management, is fond of pointing out that in the physical sciences, three laws can explain 99% of behavior, whereas in finance 99 laws can explain at best 3% of behavior1. Is all that education—and money—really only worth 3% of your time?

Professor Lo commented on finance—what would he have to say about the laws of Entrepreneurship? If Entrepreneurship had 100 laws, could these laws explain any of its behavior? Would learning those laws even be a benefit? The fact is that many, if not all entrepreneurs consider education to be a great thing; however, being in the correct mindset while you are at business school makes the difference between a scrap of paper and a true pedigree that you can be proud of. I talked with several entrepreneurs about what it takes to start your own business. Using Professor Lo’s idea, I molded their advice to explain some of the laws of entrepreneurship.

Business school

Who needs it?

I’ll tell you who.

By Stephen Sihelnik

Fall 20096

NETWORKLaw One: Network, Network, Network. Mike Huerta, Johns Hopkins ’06, Applied Math & Statistics, is co-founder of the solar enterprise

start-up BrightPath Energy. BrightPath Energy integrates the renewable energy of solar power into struc-tures that are in their construction phase. Huerta noted that the level of rigor and discipline required at university prepared him for his job at Lehman Brothers right out of school, “After a certain level of intelli-gence, networking becomes pretty important. Constantly meeting people and making new relationships is key, no matter if they are with a professor, an associate at a private equity firm, or a fellow undergraduate.” Huerta began looking at the renewable energy space when Lehman Brothers started to go under. Utilizing his contacts through family and work, he was able to found BrightPath Energy. In fact, one of the colleagues that sat next to him at Lehman became the other co-founder of BrightPath Energy. Do yourself a favor and ask for a rolodex for Christmas.

Law Two: Don’t be one-sided. Do what you love.Of course, networking isn’t everything that university or business school is about. Who could forget the

classes? Edwin Addison, who received his Masters in Biomedical Engineering and his Ph.D in Computer Science from Johns Hopkins, is the founder of TeraDisc, a high performance modeling and simulation ap-plication. After earning his Ph.D, Addison started teaching at Johns Hopkins as a doctoral fellow. Addison met a bright grad student in one the programming classes he was teaching. He found out just how bright he was when he “took a 100 line coding assignment and turned it into a 5,000 line project—and finished it in the time it was assigned.” Addison realized the potential this student held, and reached out to the student to work on a project that Addison had in the back of his mind. This project turned into ConQuest, a concept-based search engine (opposed to Google’s keyword based one). Addison successfully exited from ConQuest and proceeded to found Powerize.com, another search engine. Again, he exited successfully, this time just before the bursting of the dot-com bubble. After this exit, Addison decided to help launch TeraDisc, a high performance modeler and simulator venture. Addison stated, “For budding entrepreneurs, find and study something that you are passionate about, not something that you think will make you money. Do things so you can become a better person-not for the resume, but for yourself. You want to be a well-rounded person coming out of school.”

Law Three: Tweak the degree, and yourself.During finals week, it’s easy to forget that there’s another world out there. Unfortunately, sometimes

what we are studying may not totally translate to your first job or venture after you graduate. Raul Me-drano is currently taking classes part-time in the Johns Hopkins University Carey School of Business MBA Program as well as working as a business development specialist for the Montgomery County Department of Economic Development (DED). He has over 15 years of experience in the business development, project management, and sales and marketing fields. Medrano has much to say on the translation of your degree to your future job or business.

“In professional life, there is always tweaking. You have to in order to succeed. The college degree is not an automatic recipe for success; it helps prepare you, but ultimately it’s what you, the individual with your personal life, academic, and work experiences, bring to the table.”

Law Four: Experience before Entrepreneurship.Addison also noted that entrepreneurs shouldn’t rush to start a venture right after school: “don’t just

jump in [a venture] without having experience in the industry you have a passion for. Find a job in that in-

PASSION

TWEAK

JayStreet Journal 7

dustry, and work your way along the career path towards that start-up you want to create.” Students often forget that they have been living in a sheltered environment for the past 4 years, which sometimes leads to a false sense of security. Chris Parker is the founder of Applied Imagery, which uses technology created at the Johns Hopkins Applied Physics Laboratory to produce 3-D visualization and exploitation software. Parker’s electrical engineering degree was a strong attractor for those hiring him straight out of school. He landed a position in sales, and has progressed phenomenally since. “Usually, positions that are offered to those coming out of undergraduate require knowledge from university classes, but from then on, your skill sets progress with your job experiences.” He stressed, “part of my success with Applied Imagery stems from past jobs that taught me lessons and new skill sets that are applicable to my current position.” Parker also noted: “Entrepreneurial aspects, the ‘soft skills’, cannot be learned in the classroom-you’d be fooling yourself if you thought they could.” This would also apply to business school—however, in most cases, people have had work experience before going back to school for their MBA. Medrano urges those in school to “apply for internships [paid or unpaid], shadowing the CEO, VP of Marketing/Business Development, and so on for various companies.”

Law Five: Surround yourself with advisors.Mike Ionescu, Johns Hopkins ‘06, Writing Seminars, took a path towards a venture that few decide to take.

Ionescu originally was turned on to business by talking classes with Professor Aronhime, who teaches In-troduction to Business in the Center for Leadership Education. After entering business plan competitions every year from his sophomore year on, he realized that one of his business plans could actually become the basis for Ionescu Technologies. Instead of going to work for someone straight out of university after graduation, Mike took the path less traveled and founded Ionescu Technologies. Ionescu Technologies is an interactive marketing company that puts information in front of users through touch screen kiosks. “Constantly surround yourself with advisors”, said Mike. “They are a great sounding board that you can bounce ideas off of, at any time.” Advisors are there to help you through critical evaluation, and the more you have, the better. By finding advisors from different fields, you can have different experts from all areas of the world of business (or other fields, such as academics) expose the strengths and weakness of your own ideas. I wasn’t kidding about asking for a rolodex.

Law Six: Read.I know, I know—what an anticlimactic law. But as anticlimactic as it is, reading is even more important

to determining the success of an entrepreneur. Medrano advises, “Start reading books in self-improvement and entrepreneurship, as well as biographies of success people in life in general. There are common char-acteristic traits among successful business people and that is what each person needs to discover on their personal journey.” Biographies may just seem like a colorful way to pass the time, but the more you read about the Andrew Carnegies and the John D. Rockefellers of the world, the more you will see what traits it really takes to become a successful entrepreneur.

So there we have it. Those still in university now have a couple of laws to live by—as do those who are gearing up for Business school. Let’s try and answer our original question. Is Business school worth it? Most people agree that a university creates a doorway to vast opportunities in the real world, and to step through that doorway, nine times out of ten you need to receive that degree. But what about Business school? Your MBA can be useful, but it depends on your own perseverance and ability to do more than just “go through the motions.” Use some of the laws of entrepreneurship to enhance your education on all lev-els. All that leaves is this: Are you up to the challenge?

EXPERIENCE

ADVICE

READ

Fall 20098

Even though getting a Business school education does not neces-sarily mean “Pass go, collect a large signing bonus, proceed di-rectly to financial ser-vices,” 30% of Harvard Business school gradu-ates did just that after graduation in 20061. So what are Business school Graduates get-ting out of their educa-tion? We certainly know what they are putting in. Pricing has become a very controversial issue—we’ve entered the era of the $100,000 degree. There are places where getting an MBA—nothing more than tuition and required fees—is hitting the six-figure area. Har-vard Business school ($101,660) and Wharton ($100,860) are two of the characters on that exclu-sive list, with Duke ($99,906) dying to get in2. But it’s fool-ish to think that just tuition and required fees make up the pric-ing for an MBA. You still have to add in the cost of living, as well as the opportunity cost of hav-ing to forgo your salary to attend Business school. With these significant factors added in, there

are now five schools where the total cost of an MBA is well over

$100,000—three times over, in fact. Wharton ($320,000), Harvard ($308,300), Chicago ($305,965), Stanford ($302,664), and Columbia ($301,178) can pat each other on their respective backs for making that list2,3. If money was the only factor in-volved in deciding whether or not you should pursue an MBA, short-term costs might put many people off from attending. But those who follow that reasoning fail to see the bigger picture—in compensation, at least. For HBS graduates, a median base salary in a first job after graduation of

$100,000 may justify this short-term cost (a mighty one, at that)

as a long-term benefit1. While many salivate over the long-term compensa-tion benefits that come with procuring a top-tier MBA, a certain class of bold, brazen warriors scoff at the idea of a base salary or job security. I’m talking about the entre-preneurs of the world. If those who attend business school plan on forming their own business—the 2% “other” category for HBS’s graduating class

of 20062—can they really justify going to business

school?

1: http://www.nytimes.com/2006/06/11/busi-ness/yourmoney/11harvard.html?pagewanted=3&_r=22:http://www.businessweek.com/bschools/blogs/mba_admissions/archives/2008/10/business_school_2.html3:Estimates based on 2 year MBA with forgone salary of $100,000/year.4: picture courtesy of http://images.google.com/imgres?imgurl=http://cache.daylife.com/

How Much I$ That MBA?By Stephen Sihelnik

If you want to join these Harvard Business School grads, you might need a few loans.

JayStreet Journal 9

Peter Boneparth, former CEO of Jones Apparel Group, an American designer, marketer and wholesal-er of branded apparel, is a deal-maker. After spend-ing years as a prime time lawyer at a ma-jor Manhattan firm and an investment banker at mid-size Mabon Nugent, he took the reins at Mc-Naughton Apparel Group (then called Norton McNaugh-ton). By his own measure, this was a risky move at best, but nonetheless a risk he was willing to take. He explained to me that under-standing your own risk profile is key to planning your career. In his case, leaving a successful management posi-tion in investment banking was a change he felt comfortable with.

After two years as president of McNaughton, Boneparth orches-trated a deal to sell the company

to Jones Apparel, allowing the lat-ter company to diversify to the middle market and thus a larger customer base. Appointed as CEO

of Jones one year later, Boneparth saw himself as part of a plan to further expand Jones’ brand port-folio and adapt to changing mar-ket conditions. A professional manager, Boneparth contrasted

sharply with the typical Seventh Avenue fashion experts. His expe-rience centered on bringing fash-ion companies public, not catering

to consum-ers. After m e e t i n g Boneparth, it is easy to see why: his manner-isms and speech are gracious yet blunt and unadorned. As a leader, Boneparth made dif-ficult deci-sions un-waveringly. He hired

and fired Jones’ retail division chief

Heather Pech because she failed to hit revenue targets. During conference calls, sales figures and forecasts were delivered frankly and straightforwardly.

At the time, the fashion indus-

Anatomy of a DealmakerBy Ilya Subkhankulov

Barney’s New York was Boneparth’s big time acquisition for Jones Apparel Group

Fall 200910

try, dominated by big names such as Polo Ralph Lauren, had begun a paradigm shift in the way clothes are designed, marketed and pur-chased. Department stores, key to Jones’ business model, suf-fered as consumer culture moved away from brand names towards consumer-centric stores such as Target and the Gap. Thus, rela-tively small firms such as Jones and Liz Claiborne began acquiring brands to expand their customer. A licensing partnership with Polo Ralph Lauren enabled Jones to sell clothes under the Polo brand. The eight year partnership was very lucrative for both firms, but in 2003 sales fell, reflecting a de-cline in department store sales. Through a clause in the contract, Polo played hardball with Jones: double our royalty fees or we take back our brand. After negotiations and concessions on both sides, the parties agreed to close operations in 2004 and Polo would buy back Polo Jeans.

A major snag arose when Boneparth learned that the sale would yield unsustainable tax consequences for Jones. Meet-ing with Polo executives in their conference room, he wanted new terms for the agreement. Polo executives refused. After a short recess, Mr. Boneparth announced that “We just sued you.” Polo countersued two hours later. Jones immediately cut production on the Lauren line and began a competing Jones Signature. Com-petition quickly ensued.

The sleepy apparel industry is rarely subjected to this side of corporate drama. A supplier as

small as Jones rarely stands up to celebrity designer powerhouses like Ralph Lauren. This experi-

ence helped shift Boneparth’s game plan out of licensing deals and towards acquisitions. Many designers can benefit from sup-pliers’ superior logistical backend that support hundreds of stores.

Soon after, Boneparth devised a deal to acquire Barney’s New

York, a luxury retailer. Jones’ back-end logistics and excess capital would help Barney’s expand and bring products to market faster. Barneys seemed out of place in Jones’ mid-price brand portfolio, but Boneparth held firm; he be-lieved in the brand, the manage-ment and its growth potential. While the Barney’s deal met criti-cism from industry players and the press, it turned out to be an excellent investment for Jones, returning $937 MM on an invest-ment of just $400 MM.

Despite this success, Boneparth and Jones parted ways abruptly in 2007 after six years at the post. With department stores selling their own apparel lines, thereby decreasing supplier’s customer base, Jones’ Board of Directors disagreed with Boneparth and or-chestrated his exit after he failed to sell Jones at a good price to pri-vate equity firms.

Peter Boneparth spent his time at Jones developing its brand value, making deals and cutting costs. His performance was affect-ed by many externalities; judg-ment was very harsh and very public. But his experience helped solidify his retail expertise and he is now a Senior Advisor at Irving Place Capital Partners, a private equity firm, and specializes in the retail sector. He now concentrates solely on private equity deals that call upon knowledge acquired throughout his diverse career in the apparel industry.

Barney’s Picture courtesy ofDesignscene.net

Peter Boneparth

JayStreet Journal 11

On Your Mark, Get Set, Go!

Running A Business of Running

Running a marathon is one of the most grueling and challenging experiences a person can put him or herself through. Starting a business is roughly akin to running a marathon. Kevin Callahan, an avid mara-thoner and a 1999 graduate from Johns Hopkins, is the creator of the product system, Map My Run. John L. Parker, author of several running books, describes the sport of running with great detail. Parker’s insights provide a prism on the intricacies of entrepreneurship as an endurance run.

Pre-Race Training: “In Distance running, courage isn’t merely a helpful trait or a har-binger for success; IT IS THE PRICE OF ADMISSION.”

Kevin Callahan graduated from Johns Hopkins with a degree in Mechanical engineering. With aspirations to be a rocket scientist, Callahan hoped he could work for an aerospace startup. He always wanted to be an inventor as a kid, which led him down the path of entrepreneurship. After several startup ventures in sev-eral different areas of business, Callahan used his passion for running to start his own business, a website designed to help runners map and train their runs called, MapMyRun.

Start: The only true way is to marshal the ferocity of your ambition over the course of many days, weeks, months, and (if you could finally come to ac-cept it) years. The Trial of Miles; Miles of Trials?

The gun goes off and there is no turning back. Callahan decided to take his idea and run with it. He gave up a steady income and a normal routine with his former 9-5 job as a management consultant. Callahan knew how important stability was and how quickly he could be without income for several months at the least. He understood that he would have to live his job, so he wanted to love it, and jumped at the new opportunity. “The idea is to find something that you’re so passionate about that you’re able to

incorporate it into your and your family’s lives. It’s hard I’m not going to lie,” he said.

By Brett Schwartz

Fall 200912

Mile 3-4: “The thing is, everybody wants to be a winner. And when you’re psyched up, you’re willing to make any sacrifice.”

After reaching early success, Callahan decided it was time to get a partner to expand the company. He did not actually meet with Jeff Kalikstein, his partner, for almost a year. Kalik-stein was a user of Callahan’s site and developed a way to visualize GPS data using Google Maps. Kalikstein reached out to Callahan and suggested the two work together. Although they did not meet for almost a year, the two spoke almost daily in starting up their company. Jeff was much less of a risk taker than Kevin, as Kevin describes him as “the ying to my yang.” Jeff kept Kevin and the company on an even keel.

Mile 10: “A runner is a miser, spending the pennies of his energy with great stinginess, constantly wanting to know how much he has spent and how much longer he will be expected to pay. He wants to be broke at precisely the moment he no longer needs his coin?”

Before Callahan’s business caught fire, he had to face very rough beginnings as an entrepre-neur. While in San Diego, Callahan ate 25-cent burritos for every meal, while he pondered his future as an entrepreneur. Callahan had to pass on fun social events and many trips with friends to work constantly on his product. “Not every day was tough like that, just usually around the end of the month when the rent was due. I can imagine that a lot more people have it worse than me -- having to put up their house or max out their credit cards. I think I was lucky...”

Mile 20: “Endurance athletes build it slowly, painfully, along with their con-ditioning, day by day, over the course of months and years. It’s the one thing they all have in common.”

At this point, Callahan was not sure if he could go on much longer. This mark is the most crucial part in any marathon, as a runner starts questioning his motives and ideas. He knew how easy it would be to give up, and knew the challenges ahead. “It’s hard. You think that you have a great idea and money will start raining in, but you have to work hard at develop-ing it, at marketing it, at selling it,” he said. Callahan decided to keep pushing forward toward the goal of a completed product. Two and half years ago, he was approached by a company who wanted to buy his business as well as by an angel group who wanted him to develop a site for cycling. Unwilling to relinquish his dream of a business, Callahan chose to accept the investment from the angel group.

JayStreet Journal 13

Mile 26: “It was the simple keeping of a promise to oneself, to finish, to try.

Endurance athletes are created by that decision, to keep on.”

The finish line was in sight! After working countless 16-hr workdays, it seemed like all Cal-lahan’s work would finally pay off. “Sixteen hour days can get old but sometimes it’s needed to get it done right,” Callahan says. He believed he had to stay positive throughout and find the perfect work-life balance. All his training and experience was finally helping him as he neared the finish line.

Finish: “And there it is. The true courage of the endurance athlete, it doesn’t show on the surface, and it isn’t the product of a single day’s pride in “just finishing.” It doesn’t have to be summoned; it’s already there.”

All the training has culminated in a great finish. Although Kevin has reached financial success, he is not completely satisfied with finishing just one race. Callahan’s company is now believed to be worth 10 mil-lion dollars and he believes the company can be worth over 100 million someday. He has expanded MapMyRun and MapMyRide to MapMyWalk and now, MapMyMountain.

Both an entrepreneur and a runner are defined by their courage to keep on fighting. Through financial hardships or actual physical pain, both understand that there always is a goal in sight. Callahan showed how difficult the entrepreneurial process is to live, but that the rewards at the finish line are plentiful.

Pictures Courtesy of:www.runfresno.com/Race_Information.htmsultanofsnow.wordpress.com/

Screen Shot of MapMyRide.com’s user interface

Fall 200914

The Idea Behind Entrepreneurial ThinkingBy Dory Giannos and Brett Schwartz

“It was a problem I dis-covered when I was run-ning -- how to measure / map your run without buying a $300 GPS de-vice. I knew there was technology around to solve it cheaply so I went for it. My experience with web development enabled me to build the site. My experience with internet marketing al-lowed me to build it in a way that can be easily shared with others that have the same problem.”

“Hopkins had a bunch outdoors [outdoor ki-osks]. I through if they can do that, we can do that. I was just looking for something to do to enter the business plan [Johns Hopkins Business Competition]. Then out of school, I didn’t know what I wanted to do. The only think I knew is that I didn’t want to work for anyone, but I had no real specific goal. I tried by starting out small and surrounded myself with advisors. I realized that just because a product is something you like does not mean it is something everyone else will.”

Patti Chan Co-Founder of 600Block

“It was Tom’s idea [her co-founder]. Tom had just moved in to the city. He couldn’t find anything online that told him best places to go in Balti-more. There were only the weekly newspaper reviews. This was before sites like Yelp became popular. Immediately after we [Tom and me] met in 2004, we started to brainstorm what we thought was lacking on-line and how we could make the website expe-rience fun to use.”

Not all entrepreneurial ideas stem from an analysis of the market and the desire to find a source of com-petitive advantages. Many ideas stem from pure need and a desire to make one’s own life easier. Here is what turned on the light bulb in these entrepreneurs’ minds and made them passionate to start their busi-nesses. Below are their answers to the following question: How did you come up with the initial idea?

Kevin Callahan Founder of

MapMyRun.com

Michael IonescuFounder of

Ionescu Technologies

Chris Parker Founder of

Applied Imagery

“If it is a desirable busi-ness for you, it is going to be a desirable business for many other people and other organizations. I picked my best idea off of the shelf, but it was re-ally my background with technology and expo-sure to the business side of science that made me so versatile in the busi-ness at Applied Imagery. Luck also plays a role in any entrepreneurial venture.”

JayStreet Journal 15

How does a successful business remain successful? Creating a profitable product or service is the easy part, but how does an entrepreneur constantly update and innovate to remain on top? Chris Parker of Ap-plied Imagery took a disregarded invention at the Johns Hopkins Applied Physics Laboratory and turned it into a business. Parker attributes his company’s success to two core elements: a customer focused busi-ness strategy and the security of government contracts. Founded in 2004, Applied Imagery consists of three full-time and two part-time employees and uses LiDAR (Light Detection And Ranging) technology to gather information for its software product, Quick Terrain Modeler.

LiDAR relies on optical remote sensing to measure the physical properties of scattered light in order to gather data from a distant object or target. This data is used to analyze size, shape, distance, and other char-acteristics of the target object. LiDAR collects data through pulses of laser emitted at the rate of 100,000 per second. The distance from the transmitter of these laser pulses and the target object is determined by the time variations between the pulse and the received reflected laser signal off the target. LiDAR collects a vast amount of information, accurate within five cen-timeters. An airplane equipped with LiDAR technology surveys a landscape, collecting all of this data, which is then transmitted with one-meter resolution to Applied Imagery’s product, the Quick Terrain Modeler.

I sat down with Chris Parker in his office at Applied Imagery in Silver Spring to discuss his strategy of constantly innovating to remain profitable and satisfy his government clients.

Staying On Top: Innovating To Remain Profitable

An Interview With A Successful Entrepreneur

A LiDAR Model of Mt.. Saint Helens from Applied Imagery

By Kyle Halleran

Kyle Halleran: Why is your product better than the competition?

Chris Parker: One of the things that we’ve done better than the competition right from the get-go is produce these point clouds. A lot of other software will give you a static view, and maybe you can move to another static position, but you won’t be able to interact with millions and millions of points.

KH: How do you use customer feedback to improve your product?

CP: A year ago one thing that we did was switch

from 32-bit to 64-bit. A 32-bit system means that it can hold 232 bits of data, while a 64-bit system can hold 264 bits of data. What this means to the user is instead of looking at millions of points you can look at billions of points, and this is important because the resolution of this stuff is getting denser and denser. We introduced 64-bit because we knew that there is always competition. If it is a desirable business for you, it is going to be a desirable busi-ness for many other people and other organizations. We were hearing from our customers, constantly on the phone with them, understanding what their pain

Fall 200916

points were, where we could help. The introduction of the 64-bit was a quantum leap in our capability. We had a sense of the marketplace and our custom-ers were very, very happy about this.”

KH: How important is it to know your competi-tion?

CP: Part of what you need to know about your product is what it does better than the competition. That way you can excel in the marketplace. When most people see our software for the first time, they are just shocked at how fast it is. That’s a key prod-uct differentiator for us. We are constantly assess-ing the marketplace and understanding where the competition is.”

KH: How often do you update your software?

CP: We are constantly working on it and come out with an official re-lease four times a year, so every three months.

KH: Do customers pay for these updates?CP: Our business model is selling licenses of soft-

ware and maintenance. When you purchase our software you get one year of maintenance included. When we come out with a new version we just send out notices to our customers and they download it for free. After a year they renew their license.

KH: How often do you include new features?CP: There will be something new every time. We

just released version 7 in September. When we re-lease something new we’ll compile a list of bug re-ports from the customers who notify us what doesn’t work. We fix these quickly so our customers remain satisfied.

KH: So you just always get feedback from your cus-tomers, see what they want, see what they like or dislike and update your product every three months accordingly?

CP: Right. We have an ongoing list of big things, medium things, and tweaks to fix or improve to our

customers’ desires, like this new “line of sight” fea-ture we just added.

KH: How do you recruit employees who share your ambition of customer satisfaction?

CP: There’s no magic formula, I like to think we (Applied Imagery) have a great work ethic and very high ethical standards, and I think it starts there. I look for relevant experience either in the larger field of geospatial or smaller field of LiDAR or software. Certain things you can teach and certain things you can’t teach. You can’t teach a good attitude or good work ethic. You want to make sure you get it right, because mistakes on personnel can be very costly, painful, and cause you some sleepless nights.

KH: Who are your biggest customers and how do they use Quick Terrain Model-er?

CP: A big part of our suc-cess is selling to the De-partment of Defense. This kind of representation of

LiDAR data, called point clouds, is very useful if you are planning to land a helicopter in a situation. You would want to know the heights of buildings, smokestacks, power lines, and other deadly haz-ards.

KH: What is the fundamental difference between doing business with the private sector and govern-ment agencies?

CP: For a company like us that sells a solution it’s very similar in terms of the sale cycle. Once a per-son in private industry or a person from govern-ment becomes interested in your product you have to convince that person that this is useful to them and solves a problem, then they need to decide to purchase it. There’s this unfortunate common be-lief that the government puts out solicitations and you just respond to them.

KH: How does the government sale cycle com-pare with the private sector?

CP: The government will have very rigid, procure-ment guidelines and rules that they have to com-

“You hear horror stories of late payments from the government and having to wait up to six months, but in our experience

they’ve been in line and on time with everybody else.”

JayStreet Journal 17

pete and award this fairly. In the private industry it is more likely that you will find someone who will say okay, I have the budget, I’m going to buy this now, and its over. Part of what we do during the sales cycle for government is the Department of Defense, civilian government, states, and counties will have to issue a sole source letter, stating that we (Applied Imagery) are the only company that can provide Quick Terrain Modeler in America, and they put that on file. This may cause a government sale to take a little bit longer.

KH: Why do you think there is a general perception of that dealing with the government is vastly differ-ent than dealing with commercial customers?

CP: Other than the rigid rules in funding, it’s the same. You have to develop the relationships, con-vince somebody of something, and ship the product. It’s pretty much the same thing.

KH: What is a benefit of selling to the govern-ment?

CP: We have a fear of software piracy. Any of our customers may call us and say they lost their key or they had to reformat their hard drive, and ask for an-other key or license. In the government you will get

fired for this. When government agencies that are customers call up and say they had to reboot their computer or their hard drive got wiped out, we just issue them a new key - we totally trust them. With all of the stereotypes of doing business with the gov-ernment, we find it wonderful doing business with the government on so many levels.

KH: In your experience, is there any truth to the popular perception of the government being late with payments?

CP: When we sell to a government customer I feel like it’s guaranteed that we get paid. We are focused on ARs (Accounts Receivable), once we in-voice a customer. There have been instances when we’ve sold to little companies where I was wondering if we were go-ing to get paid, so it can be a little psychologically tolling. Selling to Lock-heed Martin or SAIC is very much like the gov-ernment.

Chris Parker is at the end of his fifth year as founder and CEO of Ap-

plied Imagery. He is one of the few and fortunate entrepreneurs who has achieved success and main-tained his position as a leader in the field, with no plans of slowing down.

A LiDAR Model of a Power Plant from Applied Imagery

“A creativeand colorful idea!” -Kevin Callahan JHU’99

Looking for a Unique Holiday Gift this year?

www.BlueBirdCandyDish.com

Fall 200918

Although biotechnology dates back to 500 BC when the ancient Chinese used moldy soybean curds as an antibiotic to treat boils, most academics and practitioners date the beginning of the biotech-nology industry in the United States to the early 1970s. Then, investment in research projects and biotech centers flourished in San Francisco and Boston in the fertile grounds of academic insti-tutions such as Caltech, Stanford, Harvard and the Massachusetts Institute of Technology. A decade later, however, the next biotech center bloomed out of an agricul-tural hub.

What Brought Biotech to Montgomery County

Maryland?

The initial seeds for biotech were planted in the 1980s, shortly after the emergence of biotech hubs in other parts of the US. Raul Medra-no, a Business Development Spe-cialist for Montgomery County, explains the birth of biotech in the County as a decision to leverage the many health and resource re-

lated agencies in the surrounding area. Without leading academic institutions, Montgomery County used the proximity of the Food and Drug Administration (FDA) and the National Institutes of Health (NIH). The FDA headquarters are located in Silver Spring, Maryland, approximately 20 miles away, while NIH is located in Bethesda, MD, approximately 15 miles away. One biotech industry observer said that the federal labs are “not so much a magnet as a fountain.” They served as a source of labor, founders and contracts for new companies and initiated the emer-gence of biotech in the area.

Forming the MontgomeryEcosystem

Montgomery County (MC) has created an extensive plan to at-tract and encourage biotech by creating research villages where people can live, work and play. Mini developments have emerged next to science centers to create a biotechnology ecosystem that house researchers, scientists and their families.

The first MC biotech hub was born in the early 1980s when the county developed the Shady Grove Life Sciences Center (SGLSC), a 288-acre park owned and oper-ated by the County and specifi-cally zoned for research and de-velopment. Subdivisions were subsequently created and all land has been sold or leased to biotech entities. When selecting land to develop, county officials decided to position the complex next to the Shady Grove Aventis Hospital, opened in 1979, because they saw plenty of nearby farmland in the proximity that could be used to establish the anticipated biotech ecosystem.

Creating a Wealth of Knowledge

Knowing that academia was needed to sustain and develop biotech in the area, Montgomery County donated 35 acres of the SGLSC to Johns Hopkins Univer-sity and 50 acres to the University of Maryland. Universities help with technology transfer because they posses close links to the pri-vate sector that offers incubator

Planting the Seed for Biotech By Dory Giannos and Jose Deschamps

JayStreet Journal 19

facilities and funding. Technolo-gy transfer is the process of shar-ing of skills, knowledge, technolo-gies, methods or samples from academic institutions to business. Linking these two entities allows a wider range of users to further develop and exploit newfound technologies into new products, processes, or applications.

Johns Hopkins University and University of Maryland have sub-sequently become key to the infra-structure of the area as they have established a technology transfer network and brought funding to the area. For example, the Univer-sity of Maryland developed its Center for Applied Research in Biotechnology with the County land and funds in col-laboration with the National Institute for Standards and Technology. This 120,000 square foot facility has state of the art laboratories for col-laborative research among academic, government and industry scientists. It also houses the University of Maryland System Shady Grove Campus, which is a collaboration of nine, pub-lic degree-granting institu-tions that bring some of the top programs from across the state to one facility in MC. The campus offers four-year undergraduate degrees in over 60 programs, one being a B.T.P.S. in Biotechnology. The establishment of this campus has brought a wealth of intelligent scientists and researchers to the area.

Currently Hopkins is in the pro-cess of inking a memorandum of

understanding with the County to outline Hopkins’ commitment to the area. For example, JHU purchased the 107 acre Belward farm in 1989. This land is the only undeveloped large plot in the Gaithersburg West subset of the biotech ecosystem and Hop-kins intends on creating a“21st century research community that will advance health, science, and education.” The Belward cam-pus is projected to be completed by 2030. This new campus will be just 3/10 of a mile from the present JHU Montgomery County Campus, created from the origi-

nal 35 acres of land donated to Hopkins. The plot has been trans-formed into a campus that accom-modates 4,000 graduate students and 13 life science companies.

Incubators as Helping Hands for Fostering Biotech

These initial steps created the blueprint for the development of biotech in the area. The next step

was fostering biotech through in-cubators, a physical space where companies can rent lab or busi-ness space at low rates and share expenses for access to resources. These incubation spaces aid entre-preneurial companies by provid-ing an array of support resources and services on site, for example advisory boards and mentors. Additionally, incubators typically have networks of contacts such as lawyers to help with filing patents or financial advisors to help with business plan projections.

The National Business Incuba-tion Association (NBIA) projects that overall only 10% of biotech

companies will succeed; therefore incubators help safeguard success by provid-ing crucial resources that help alleviate the financial burden and uncertainties of starting a company. Medrano notes: “There is a lot of hand hold-ing, but when these entrepre-neurs leave the program they are business savvy.” The aver-

age length of stay in the incubator program is five years and allows scientist entrepreneurs to be in a better position with their

product by affordably having ac-cess to an array of resources to execute their business plan. The NBIA calculated that historically 87% of incubator graduates stay in business.

As of October 2006, there were 1,115 incubators in North Amer-ica, up from only 12 in 1980 ac-cording to the NBIA. The first Montgomery County business in-cubator was established in 1999

Jose Deschamps and Raul Medrano in an incubator at the Germantown Innovation Center

Fall 200920

Germantown headquarters of-fice. NBIA estimates that in 2005 alone, North American incubators assisted more than 27,000 start-up companies that provided full-time employment for more than 100,000 workers and generated annual revenue of more than $17 billion. Business incubators not only help advance biotechnology and industry overall, they assist with employment and revenue across the United States.

Sustaining Montgomery County Now The Epicenter of Biotech in

Maryland

Currently, MC has become the heart of Maryland’s biotech com-munity as biotech has predomi-nantly clustered around the Coun-ty and the Washington DC area. As of 2008, about 60% of the state’s 370 bioscience companies call Montgomery County home, according to Maryland’s Depart-ment of Business and Economic Development which compares with 24% in the Baltimore metro-

and the most recent one was built in 2008. The latest addition is the Germantown Innovation Center, which provides 11 wet labs aver-aging 500 square feet, 2 modular clean rooms and 45 offices. It is strategically located adjacent to the Germantown Campus of Mont-gomery College, a public, open ac-cess community college offering two-year associates degrees and a variety of professional certifi-cates and letters of recognition. The Germantown center is poised to benefit from the technology programs offered at the college and the growing “Tech-nology Corridor,” High-way 270, which runs through the area has earned this nickname due to the continual technological develop-ments in the area.

MC’s five incubators form a “network of bio-incuba-tors that provide mentorship, coaching, and ‘affordable’ space to start-up companies,” explains Montserrat Capdevila, President of Johns Hopkins’ Biotech Net-work, a professional, student-run organization whose main mission is to create a stronger biotech community.

Qiagen, a provider of sample and assay technologies for mo-lecular diagnostics, applied test-ing, academic and pharmaceu-tical research, is an example of the County’s incubator success. According to its website, Qiagen started with 5 employees at a MC incubator. Now they employ over 200 trained professionals at their

politan area and 16% in Frederick County.

In size, MC with its 15,000 bio-tech workers, is third to the San Francisco and Boston area for the largest number of firms. Approxi-mately 220 companies related to the life sciences have their head-quarters in the County. Notably Medimmune, Takeda, Quiagen, and Human Genome Sciences have emerged since the late 1980s.

With the County’s boom of suc-cess in its first few decades, Me-

drano explains, “Our vision is to continue fostering and nur-turing growth of the industry. We want to continue to be in-volved with it as it evolves.” Medimmune was recently bought by a larger international company and foretells the future for other

locally grown companies. MC is gravely concerned with the work-force and talent leaving the area. Medrano highlights the fact that with the development of new ed-ucational efforts, development of transportation and residential ar-eas, Montgomery County wants to preserve the strong talented work pool that has developed through the onset of biotech. Maryland Governor Martin O’Malley con-curs, “Together, we will create the most fertile environment for bio-science in the country with the ability to compete and win on the world stage.” This can only occur by cultivating talent.

MC is placing high prior-ity in developing the talent pool

Map of Maryland’s BiotechnologyYellow= Education

Red= IndustryBlue= MD Biotech Org.

JayStreet Journal 21

through education. Educational programs have been installed in the middle schools, high schools and colleges focusing on the busi-ness side of biotech: “We are try-ing to create a pipeline of tran-sitions into biotech starting as early as middle school,” explains Medrano. The County is work-ing to have younger generations interested in biotech and able to understand and be enthusiastic about the concepts of incubators and venture capitalists.

Future of Biotech in the US and Montgomery County

Biotech is considered to be the next growth engine by many poli-cy makers and economic develop-ment scholars. A 2009 survey that polled 36 economic development agencies in the US exemplifies this sentiment; over 80% of re-spondents identified the biotech industry as one of their major in-dustrial development targets.

Montgomery County is concen-trating on maintaining its posi-

tion as a leader in the industry and the future of MC remains very promising. The County has begun to address problems including limited public transportation and competition from other areas. In order to tackle the transportation problem, MC is establishing a new light rail system, which is esti-mated to be up and running in the next five to ten years. It will con-nect the Shady Grove Life Science Center to the new JHU Belward campus as well as the other incu-bators in the County.

The increasing competition and development of biotech in other states is welcomed by Montgom-ery County and Maryland accord-ing to Capdevila: “MC will be able to maintain its position as a strong county and will also be able to stimulate other ‘neighboring’ counties to enhance their growth. The more the counties grow and prosper, the better Maryland is; more jobs and enterprise creation leads to higher tax income and happy voters!”

Nearby, Prince George’s County

is formulating its own biotech hub in quest of capturing biotech funding. A recent article in the Washington Business Journal sug-gests that Prince George has the potential to compete with Mont-gomery due it its close proximity to the University of Maryland and the College Park Metro station. As Montgomery County becomes more crowded and developed, will new biotech innovation flow to Prince George’s County or oth-er counties in Maryland due to the available open space and at-tractive transportation offerings? Time will only tell if a new biotech hub is about to emerge.

History of the Biotech Industry was provided by Raul Medrano and Mont-gomery Planning reports which can be found online at: www.montgomeryplan-ning.org

1 “Koo, Jun & Bae, Jonghoon & Kim, Dohyeong. What Does it Take to Be A Biotech Hot Spot.” Environment and Planning Journal. 27th Volume, 2009. p. 665.

2 Sinha, Vandana. “Prince George’s Identifies Sites for Biotech Cluster.” Wash-ington Business Journal. 13 November 2009. <http://washington.bizjournals.com/washington/stories/2009/11/16/story1.html>

Fall 200922

For years, pharmaceutical companies have been known for two things: finding innovative drugs and reaping huge profits. The industry has spent billions of dollars on research and reaped billions in return. In 2006 alone, the pharmaceu-tical industry introduced 31 drugs and sold $643 billion in products world-wide.2 Howev-er, over the past two decades the p h a r m a c e u t i -cal industry has moved very far from its original high purpose of discovering and producing use-ful new drugs. In the late 1990s, pharmaceutical companies be-gan to divert resources from re-search and development toward attempts to increase revenues from the sale of existing block-

buster drugs like Lipitor or Pla-vix which generate over a billion dollars of revenue each. Now, many pharmaceutical compa-nies are primarily marketing ma-chines that sell drugs of dubious benefit.3

A New Contender in Drug Dis-covery

As hard as it is to believe, only a handful of truly important drugs have been brought to market in recent years, and many of them came from biotechnology com-

panies. Unlike pharmaceuti-cal companies who work with chemically based compounds, biotechs manipulate the function of living cells so that they work in more predictable and control-lable ways. 4 The great majority

of “new” pharma-ceutical drugs are not new at all, but merely variations of older drugs already on the market. These are called “me-too” drugs. The idea is to produce some-thing very similar to a top-selling drug and reap the benefits.3

As Dr. Sharon Levine, associate executive director of the Kaiser Permanente Medical Group, put it,

“If I’m a manufacturer and I can change one molecule and get another twenty years of pat-

Maturing Biotech Davids and

Struggling Pharmaceutical Goliaths

By Jose M. Deschamps

JayStreet Journal 23

ent rights, and convince physi-cians to prescribe and consum-ers to demand the next form of Prilosec, or weekly Prozac in-stead of daily Prozac, just as my patent expires, then why would I be spending money on a lot less certain endeavor, which is look-ing for brand-new drugs?”4

This is the problem with phar-maceutical companies. They are focused more on marketing than actually finding new drugs. Typi-cally the pharmaceutical indus-try spends 15% of sales on R&D while biotech companies spend 25-45% of sales on R&D. Even though this dis-crepancy has not changed the fact that phar-maceutical com-panies rake in nearly 600 bil-lion a year - ten times more than biotech compa-nies – innova-tion is neces-sary for success. When the pat-ents on some of the most prof-itable pharma-ceuticals expire, other drug com-panies are free to sell generic versions, chemically identical copies that typically cost much less than the trademarked ver-sion. This leads to a huge drop in revenue for the pharmaceutical companies that originally pro-duced those drugs.

When the pharmaceutical industry cut back on R&D, it opened the door for smaller

and more research-focused bio-technology companies. Recently, Medimmune, one of the more well known biotech companies, made headlines by creating a vaccine for the infamous swine flu. Unfortunately, most biotech companies are still unprofitable, strapped for cash and find get-ting their products out to market very difficult. Their drugs have to go through several stages of test-ing which takes over ten years. Without revenue coming in, it is hard for these companies to even stay in business.

Michael Rosen, the Senior Vice

President of Forest City Enter-prises, a real estate company that develops and builds biosci-ence parks in the U.S., believes that biotech business model will predominate in the future. Most biotech companies are located in bioscience parks. At the heart is a university like Hopkins that generates the research. You have the industries that do clinical tri-

als, the industries that do manu-facturing, and the industries that do preclinical research all in one area. After working for pharma-ceutical companies like Pfizer and Bristol-Myers Squibb, Mi-chael Rosen has switched over to biotechnology, which he consid-ers to be the future of drug de-velopment. “If the pharmaceuti-cal companies do not change the way they do their business, they will find themselves out of busi-ness,” he says.

What are pharmaceutical com-panies doing to generate new drugs?

They are buying biotech compa-nies.

Marcia Angel, au-thor of The Truth About the Drug Companies puts it best, “Pharmaceu-tical companies are not particu-larly innovative in discovering new drugs, and they are highly innova-tive— and aggres-sive— in dreaming up ways to extend their monopoly rights.”4Many pharmaceu-

tical companies are buying out biotech companies. These merg-ers are sweeping the life sciences sector – a trend that shows no signs of slowing down. In 2006, Big Pharma spent roughly $17 billion for more than 250 biotech deals, up from 150 in 2003, ac-cording to venture capital firm Burrill & Company.2

Fall 200924

It’s much easier for these multi billion dollar pharmaceutical cor-porations to buy innovation than to innovate. As Rosen puts is, “A large pharmaceutical company has many layers of organization so the communication process is very slow. Assistant scientists have to report to a main scientist who reports to a senior scientist who reports to a manager who reports to a director who reports to a senior director who reports to a vice president who reports to a senior vice president who then would report to a R&D pres-ident. It is a very long process for making decisions.” With an in-dustry as over managed as phar-maceutical companies, it is time consuming even to get drugs into the clinical stages.

Drug Development

While biotechs may get drugs into trials faster, it is here where they stumble. Only a fraction of the 1,466 biotech companies in current existence sell prod-ucts.2 Most lack the resources and expertise to fund the lengthy clinical trials necessary for ap-

proval by the U.S Food and Drug Administration (FDA ) which has become more conservative in re-sponse to patient demands.

However, the FDA knows that new therapies for certain dis-eases like cancer or HIV are so important that they have created a fast track policy for approval. This fast track policy will shorten the time to market by about two years. Add in the resources of bioscience parks, and you have a real advantage emerging for bio-tech.

At the end of the day without innovation, drug discovery is im-possible. Unfortunately, innova-tion is not happening in Pharma. It is happening in universities and because biotech compa-nies spin out of the universities, they are developing many more

drugs. Will the pharmaceutical Goliaths change the way they do business or will they simply buy up the biotech Davids? That re-mains to be seen, but the future of drug discovery is firmly in Da-vid’s hands.

1. h t t p : / / g l o b a l t e c h f o r u m .e i u . c o m / i n d ex . a s p ? l ayo u t = r i c h _story&doc_id=8009&title=How+big+pharma+is+picking+the+best+of+biotech&categoryid=7&channelid=3

2. http://www.wetfeet.com/Ca-reers-and-Industries/Industries/Phar-maceuticals-and-Biotech.aspx

3. http://sciencecareers .sc i -encemag.org/career_magazine/pre-vious_issues/articles/2009_04_10/caredit.a0900048

4. http://www.nybooks.com/ar-ticles/17244

5. picture courtesy ofsimeonstewartwordpress.com

JayStreet Journal 25

How many notifications have you received on Fa-cebook in just the last few hours? Have you received so many emails for events on Facebook that you de-lete them because they have become an annoyance? In a candid moment, wouldn’t you say that you don’t really care to know what all of your friends are doing every sec-ond of the day. Twit-ter, a popu-lar social networking site, is cre-ated solely to provide the “status updates” of wh o m eve r you are try-ing to follow. Why are people more inclined to sit online and follow the lives of their friends rather than living their own?

The Intrigue of Social Networking Websites

It is interesting to consider what motivations drive people to these social networking sites (SNS) and leave them spending countless hours glued to their computer, iPhone, or Blackberry. The flip side of this question is whether social networking sites will eventually drive their users away?

Just as we read the tabloids and gossip columns, it is our voyeuristic interest in the lives of others that keeps people hooked. People flip through their friends’ pho-tos and “walls” just like reading celebrity magazines, because they think that their friends’ lives are more interesting than their own. It is not just the SNS us-

ers’ mundane view of their lives that keeps them addicted, but also the design of the websites that keeps us “net-working.” Ev-eryone knows that many peo-ple are con-stantly updat-ing Facebook. Hence, even if you only spend five minutes on the site, you are drawn to sign back on a few hours later to see who put

up new photos, wrote on your wall or created a new event –and, you can easily flip from one person’s page to the next.

Facebook’s addictive features make it “a huge time suck” says Lily Seidel, a senior economics major at the Johns Hopkins University. Fortune Magazine’s, Jessi Hempel (Feb. 2009) points out that Facebook is intentionally taking over our lives. She writes, “the ‘stickiness’ of the site is a key part of 24-year-old CEO Mark Zuckerberg’s original plan to build an online

Social Networks: Are they becoming a Nuisance?

By Elizabeth Lenrow

Fall 200926

version of the relationships we have in real life. Offline we bump into friends and end up talking for hours -- we flip through old photos with our family -- we join clubs. Facebook lets us do all of those things in digital form.” But does it really?

The connection one makes on Facebook or Twitter is by no means comparable to the con-nection formed by actual human contact. Twitter is predominantly a one sided site where there is little to no interaction between users besides looking at the sta-tus updates of the users you are following. On Facebook, there is an instant messaging/email com-ponent, but the only connection made from that is a “cyber” one.

This wall between users on so-cial networking sites allows peo-

ple to create a fictitious persona. For example, you can “friend” peo-ple you wouldn’t normally talk to or know, because you believe that “friending” them in “cyberspace” is somehow okay. This theory is illusory. The lack of real contact on these sites encourages some

people to act out of character in the mistaken assumption that only their mere profile is at stake.

Similarly, as more middle-aged users join Facebook, they are “friending” their kids, and wit-nessing sides of their children that they normally would not see. Hence, parents are trying to be “friends” with their kids—when that is really not their relation-ship at all. Duffy Weir, a market-ing consultant and now a regular user of Facebook adds, “I started using Facebook to observe how

my daughters were using the site. Now, I find it a great way to net-work with people. I have found three or four old college friends and have now been able to con-nect with them and see photos of their families and talk about our lives.” While it is great that Ms.

Weir is able to connect with her old friends from her school days, they may not keep her on the site forever. She will find out that most of her college friends will not be on Facebook. And as Ms. Weir’s daughters grow older, they too will stop posting so many photos, leaving their mother to wonder what she’s doing on Facebook.

The thrill of “Facebooking” may already be losing its hold on the early adapting younger genera-tion. Seidel, who used to enjoy Facebook, now bemoans that

A Screen Shot of Patti Chan’s 600block.com

JayStreet Journal 27

fact that “so many people are us-ing Facebook to advertize events, that the publicity for things you might actually want to attend gets lost.” Dory Giannos, a senior In-ternational Relations major at The Johns Hopkins University, concurs, “I only go on Facebook if I get an email notification that some one has written on my wall, tagged me in a photo, or invited me to an event. I only sign on to Facebook if it contacts me.” For current college seniors who have been on Facebook for the last four years, the addition of many super-fluous applications along with the explosion of its user base has made the site less desirable and often, a nuisance.

The fundamental ques-tion is whether the benefit of being able to live your life from your computer outweighs the benefit of person-ally interacting with others. Does social networking online have to be voyeuristic and isolating? Not according to Patti Chan.

Patti Chan and 600block

Johns Hopkins University alum Patti Chan, cofounder of the web-site 600block, insists that social networking can act as a bridge that takes people away from the keyboard and into the real world. Her online site gives Baltimor-eans the opportunity to find great deals, discover new places, and write reviews for Baltimore’s best restaurants, bars, and clubs. She

takes the issue of “over Social Net-working” very seriously. Her web-site does not send spam emails to its followers but instead sends personalized tweets with updates such as “A new restaurant open-ing in Canton” or a “Chef moving from one restaurant to another.”

600block moves social network-ing to the commercial level by helping individuals manage their time both online and outside of cyberspace. Offering hundreds of specials at local restaurants, bars, and clubs, 600block keeps people socializing in Baltimore while ac-

commodating their tighter bud-gets. LinkedIn, too, is a useful website that encourages people not to waste countless hours on-line. A powerful tool for business networking that helps people con-nect with others who have similar business or volunteer interests, LinkedIn encourages people to gather information online and then go offline to utilize it. Linke-dIn and 600block - unlike Face-book and Twitter – are designed to answer questions, not merely to follow the daily lives of others.

Over the long term, it is the user model of these outward oriented social networking sites that will keep them afloat. People will al-ways be working, exploring busi-ness contacts, or seeking great

deals on entertainment. The long-term future of these specific sites is based on their ability to move people beyond the walled off world of the power button on their computers.

Facebook and other similar pure social networking sites are slowly losing their initial hype. As CEO Mark Zuckerbeg continues to market his product to a larger and more diverse user base, he slowly alienates his initial fan base, the college student. As the makers of luxury goods have known for many years, the more people who

have access to the product, the less desirable the prod-uct becomes. When college students go on to graduate and start working their 9-5 jobs, time constraints will cause their fascination with such sites to wane. While millions of new students

will join these social networking sites, they, too, will go through the same cycle. Most social net-working sites started in the last ten years. During this time, wars have broken out, the economy has hit the fan, and the awareness of climate change has hit its peak. The prominence of the virtual world created by pure social net-working sites may prove to be just as transient.

Fall 200928

University-based research plays a central role in the process of in-novation. It is the intellectuals at universities who are constantly refining ways to produce existing goods and services, developing new prod-ucts and s e r v i c e s , and ul-t i m a t e l y improving our qual-ity of life. However, the roles of these s c h o l a r s cannot be l i m i t e d to just re-s e a r c h e r or inven-tor. Those in academia hold great promise for stimulating high-impact en-trepreneurship.

Jay Watkins is the managing di-rector at an investment firm, De Novo Ventures, and a member of the Kauffman Foundation, an or-ganization that works to cultivate entrepreneurs from among the postdoctoral community. In an

interview for the Kauffman Foun-dation, Watkins shed light about why investors are more likely to invest in a company founded by a postdoctoral researcher.

“… Companies in their early days

are really powered to success by a level of commitment and passion on the part of the founding teams that frankly, is hard to recruit for. But if a scientific or technical founder can be a key member of the team then it is often the case that that passion and that com-mitment to their idea can sustain the company through the inevi-

table challenges.”-Jay WatkinsTim Weihs, Professor of Mate-

rials Science at Johns Hopkins University, is a perfect example of how university researchers can

turn passion into a successful company and why their involve-ment in entrepreneur-ship is contributing to the advancement of our society. With 12 years of experience in materials joining and industrial research, Dr. Weihs identified and solved one of the most critical issues in computer and semi-conductor design: the faster micropro-cessors in comput-ers operate the more

heat they produce. Conducting this heat out of a chip was limit-ing both chip performance and reliability. The most effective way to draw heat into the heat sink would be to use a conductive me-tallic bond, like a solder. Solder-ing the components in a hot fur-nace, however, could damage or destroy the chip. Artificial resins

Academia: Cultivating More than Intellectuals

By Chelsea Gonzales

JayStreet Journal 29

do not damage the chip, but they tend to degrade over time, mak-ing the bond weaker and conduct-ing much less heat than a metallic soldered joint.

Here Entered NanoFoil… As a revolutionary technol-

ogy developed by Dr. Weihs’ and his colleague, NanoFoil creates a strong, thermally conductive bond between a heat sink and a chip,

with no damage to the chip itself. When one end of the foil is pulsed with energy, NanoFoil’s thousands of nanolayers of nickel and alumi-num react chemically and release heat into the surrounding solder material. The process, lasting less than a second, energizes the for-mation of a NanoBond process that works in air, in a vacuum, or in argon gas.

When a NanoFoil is soldered, the reaction region (white area) reaches 1,500 °C, while the rest of the foil remains at room tempera-ture. (Image courtesy of Reactive NanoTechnologies)

The diagram above illustrates the NanoBonding process. The backing plate is laid flat with the

pre-tinned surface up and then the NanoFoil is then placed on top of this solder surface. The NanoFoil can be in the form of a single piece for smaller sputter-ing targets or as a pre-assembled array for larger sputtering tar-gets. The pre-tinned target is then positioned over the NanoFoil and aligned correctly with the backing plate. (Image courtesy of Reactive

NanoTechnologies). Weihs had the option to license

the technology, but he chose to fol-low the entrepreneurial path and launch the technology himself.

“In order to be an entrepreneur you need a deep technical exper-tise, layered with an ability to co-ordinate and manage groups of people, and the curiosity to run and startup a business.”

-Tim Weihs Weihs possessed all three

qualities. In addition, Weihs like Jay Watkins, felt that turning the technology over to someone else this early in the game would only inhibit the potential success of NanoFoil.

“Startups really need the inven-

tors engaged in order to success-fully launch their product.”

-Tim WeihsAfter sharing his plans with

Johns Hopkins University, the in-stitution granted Weihs a three year leave of absence to form Re-active Nano Technologies (RNT) in 2001. Aside from granting Weihs time to launch his company, the university contributed to the

success of RNT in other ways. When becoming an entrepreneur, the hardest part is usually taking the idea in your head and successfully creating a prototype. However, as a profes-sor at Johns Hopkins, Weihs had the resourc-es to conduct research about material science and to successfully de-sign his product. In addition, coming from

Johns Hopkins gave Weihs imme-diate credibility, making it easier to attract venture capitalists.

“There were a number of ven-ture capitalists offering us a lot of money. I soon learned that money was the easy part.” -Tim Weihs

NanoFoil TodayToday, NanoFoil is considered

to be one of the most mature nanotechnologies available. The NanoBond process offers a fast, efficient, and inexpensive method to join and bond materials, while eliminating the need for potential-ly toxic, lead-based solders. Com-pared with other joining methods, NanoFoil is a major cost saver as it can replace expensive equipment such as the furnaces and torches,

Fall 200930

which are used in conventional soldering operations. Similarly, newer bonding methods such as laser and resistive welding, which were developed to get around the limitations of traditional solder-ing, have significant capital costs up front.

NanoFoil is also multifaceted as it can perform various func-tions besides attaching computer chips to heat sinks. It acts as a re-placement for resins and solder in manufacturing circuit boards. It can also bond dramatically dis-similar materials without causing the materials to crack. As the first technology to create strong, large metallic joints between ceramic and metal, NanoFoil can attach ceramic armor tiles to U.S. Army tanks and trucks. For this reason, BAE Systems, an international defense and aerospace contrac-tor, has an exclusive development agreement with RNT to mount ar-mor on military vehicles through the use of NanoFoil. Other pos-sible applications of NanoFoil are as infrared decoys to intercept

heat-seeking missiles. The capa-bilities of the NanoFoil technol-ogy are endless and undoubtedly vital to almost every commercial and defense market today.

Dr. Weihs served RNT as CEO for the first 3 years of its de-velopment and then retreated to his current position as one of the company’s consultants. However, it was undeniably a combination of Dr. Weihs’ technical expertise, entrepreneurial skills, and the university’s aid that allowed RNT to jumpstart efficiently and de-velop into the thriving company it is today. Since the company’s launch in 2001, RNT has devel-oped licensing agreements with numerous Fortune 500 Compa-nies worldwide. In addition, as of September 22, 2009 the Indium Corporation, a premier materials supplier to the global electronics assembly, acquired assets of RNT. Indium’s presence in the global electronics materials market is said to expand the adoption and commercialization of RNT’s tech-nology quickly and largely. The future of RNT can only be seen as promising.

University Partnerships to Foster Entrepreneurs

There are more than 48,000 postdoctoral research-ers throughout the United States. Many of them are at the forefront of new discoveries and have the potential to create high-tech com-panies, just as Tim Weihs did. In addition, over 230 United States universities have developed tech-nology transfer offices to assist in the rapid and efficient commer-

cialization of innovations devel-oped by university researchers . The Johns Hopkins tech-transfer office is leading these research institutions in their pursuit to in-crease the number of technologies transferred from the university. In 2008, the Johns Hopkins tech-transfer office fostered 22 poten-tial start-ups, while most univer-sities average 9 to 15 start-ups per year. Even more impressive is that in 2008, Johns Hopkins start-ups received independent, corpo-rate and venture funding of more than $76 million. The increasing number of partnerships between universities, like Johns Hopkins, and researchers, like Tim Weihs, is ensuring greater technology output and ultimately fostering higher levels of innovative entre-preneurship in the 21st century.

1 Reactive Nano Technologies (www.rntfoil.com)

2 Reactive Nano Technologies3 “NanoFoil Solders with Less Heat,”

Science and Technology Review, October 2005.

4 “NanoFoil Solders with Less Heat.”5 “Entrepreneurial Postdoctoral Fel-

lows Program,” Kauffman Foundation, (2009), www.kauffman.org

6 University of California Technology Transfer Office, www.ucop.edu/ott

7 Johns Hopkins Technology Transfer Annual Report for 2008.

Tim Weihs, Professor of Material Sciences at Johns Hopkins

JayStreet Journal 31

What exactly is biotechnology?

Biotechnology refers to technol-ogy based on biology; it involves agriculture, food science, and medicine. Today that definition encompasses the use of micro-organisms, such as bacteria or yeasts, or biological substances, such as enzymes, to perform spe-cific industrial or manufacturing processes. Scientists in the bio-technology industry are perform-ing ground-breaking research poised to change every aspect of our lives. From what we wear, to what we eat, to how we treat diseases, biotechnology will be changing it all.

In reality, biotech is more than just a lab, instruments and scien-tists. Although scientific research is the starting point for biotech, it is only one piece of the puzzle. Without an educated workforce, the right location, and a supportive community, biotech cannot thrive within any region. But when the right components come together, biotechnology not only holds the potential to cure disease, it can be-come a powerful economic engine, capable of regenerating economi-cally depressed areas. That has already begun to happen around the JHU medical campus in East Baltimore, where the University is building a biopark with devel-oper, Forest City Enterprises.

What is a biopark?

The best way to describe a biopark is to think of a shopping mall. Instead of typical shops and vendors, a biopark houses world-class experts in biology, food science, agriculture, and medicine as well as en-ergetic entrepreneurs who creatively search for ways to commercialize scientific research and discoveries. Usually clustered around a university or government health facility, a biopark houses multiple biotech companies and usually encompass over 1 million square feet of lab and office space.

In short, a biopark is a self-sustaining community with all of the resources to continue ground-breaking biotechnology research while providing its work-ers with a place to both work and live. These parks are normally lo-cated near large research institu-tions or universities and rely on the basic research those institu-tions generate as a starting point for their products.

Who builds bioparks?

A handful of developers around the world specialize in these facil-

ities. Senior VP of New Business Development, Michael Rosen and his partners at the Science and Technology Group of Forest City Enterprises are currently building the first biopark affili-ated with Hopkins, but while the biopark is a first for JHU, Forest City Enterprises is no newcomer to the world of biopark construc-tion. In fact, the Hopkins’ project is the sixth for Forest City. Other schools Rosen and his group have partnered with include MIT, Uni-versity of Pennsylvania, North-

What is Biotechnology and Why Does it Matter?

By Sean Hennessey and James Teta

A graphic depiction of the Mid-Atlantic Life Science Community

Fall 200932

western, University of Chicago, and the University of Colorado-Denver.

In choosing where to build, For-est City seeks a particular triad: key research specialties and a strong university, both located in economically depressed areas. Neighborhoods consisting mostly of vacant buildings are conducive for a number of reasons. One, bioparks by definition are typi-cally enormous and require lots of land, which is more available and cheaper in economically de-pressed sections of urban envi-ronments. Government support is another major factor. Seeking to help their constituents, local and state government officials usu-ally welcome the idea of building a biopark within their jurisdiction and support it with tax and other incentives. Finally, bioparks have great power to spur development in these areas.

What role does the existing busi-ness community play in the

biotech industry?

Without funding from venture and angel investment firms, the biotech industry would not be able to function. The biotech in-dustry is also somewhat depen-dant on outside investment by other companies and especially the National Institute of Health (NIH) to continue its research and to turn its intellectual property into revenue. Those investors, in turn, get a share of the profits once the biotech company starts to see revenue from their prod-ucts. The industry also relies on support from the larger business

community to lobby government for help with a wide variety of key issues ranging from tax incentives to transportation to education. In Baltimore, the Greater Baltimore Committee plays that role and has named biotech as one of its key focus areas.

Do bioparks have a track record of stimulating local economies?

At MIT, Forest City built 668 rental apartments to meet the de-mand for housing that was neces-sary once the biopark was com-pleted. The University Park also contains remarkable landscape sculpture sequences and individ-ual public artworks that would have never been created, nor sur-vived in the previously depressed region surrounding MIT. A com-mon area within the park also contains sculptural and graphical pieces of artwork as part of Traces, which is a compilation of roughly 100 individual pieces that mark moments in the 250 year history of the biopark site.

The Colorado Science + Tech-nology Park at Fitzsimons, linked with the Anschutz Medical Cam-pus in Aurora, Colorado is the world’s only completely new re-search, education, and patent care facility. This new Anschutz Medi-cal Campus is intended to position the University to change and save lives, while building a future for the region. Its construction will stimulate the local economy in several ways, all stemming from job creation. By 2008, the Colo-rado biopark was projected to have created 17,000 jobs within the region. The Center of Innova-

tion and Discovery linked with the park brings in $350 million in an-nual research grants, and “Each million in research produces 37.7 jobs for the state of Colorado.”

Do you have to be a scientist to be involved in the biotech industry?

NO. There are many opportu-nities for people with business, finance, entrepreneurial, or other non-science backgrounds. The biotech industry is like any other industry with accounting, mar-keting, sales, and investment de-partments. Science is the face of biotechnology, but all of these de-partments are necessary to create a successful business.

What is the difference between

the biotech industry and the phar-maceutical industry?

The pharmaceutical industry fo-cuses on the production and man-ufacturing of chemically based drugs and/or vaccines intended to treat or prevent a health condi-tion. The pharmaceutical industry relies on elements and chemicals, rather than cell biology, to accom-plish to produce results. The bio-tech industry, on the other hand, focuses on manipulating biologi-cal processes.

Photo courtesy ofhttp://www.biospace.com/biotech hot-beds.aspx

JayStreet Journal 33

Sean Monagle rolls over in his chair as he tells me that his experience as a student on an undergradu-ate BME Design Team yielded only three credits a semester, though it deserved “ten times that.” After a few minutes of discussing the program, it’s no won-der why he feels this way. Bio-Medical Engineering Design team, which is not required (but convenient-ly counts towards that major’s most difficult course requirement), is a class which takes unassuming un-dergraduates and develops their skills as the future dealers of science. Through weeks of development,

investment and sponsorship from biotechnology firms and hospitals, and an awful lot of sleepless night, the participants use their engineering acu-men and resources to solve real medical problems and commercialize the results.

“That’s the dream,” Monagle recounts. Turning your idea into a commercially viable product, that is. Multiple BME design teams have evolved into start-up companies in the world of biotechnology, includ-ing Seguro Surgicals here in Maryland. In fact, since 2004, 20 to 25 utility patents have been filed and 12 licenses have been arranged through the program. Monagle’s is a rare case, as his project last year to find a third-world available test for protein in urine (to test for birth defects) was more of a humanitar-

B M E Design Team

Cultivating The Next Generation of Biotech Entrepreneurs

By Michael Brooks

Fall 200934

ian idea than a commercial one. Monagle, now a se-nior, spent the entirety of his junior year on a design team which partnered with JHPIEGO, a Hopkins-re-lated humanitarian biotech group, to get his product to millions of underserviced people the world over. The majority of other design teams, however, have less lofty goals in mind: to patent and commercialize their product.

The class, which enrolls 40 to 50 upperclassmen for two consecutive semesters (and 30-40 freshmen as assistants for only the second semester), is ar-ranged as a series of presentations, some of which the instructors present to the students, and some of which the students present to the instructors. The Bio-Medical Engineers must make six presentations

to a professional panel of instructors, engineers, biotechnology experts, and medical doctors to expe-dite the formulation of the idea. Teams are formed, and ideas are drafted from a list posted by medical companies and hospitals of problems they encoun-ter that they believe can be solved with the right ap-proach. The teams draft an idea and enter the long haul of trial and error.

The process of creating the idea is riddled with real-life biotechnology hurdles. Along the way, the students must present their ideas to a board of FDA officials, and attempts to classify the amount of clini-cal testing each prototype requires. Additionally, the students must pass numerous Health Insurance Por-tability and Accountability Act training modules on-

Nikhil Vadhavkar fielding questions at Rice University’s 2009 Business Plan Competition

JayStreet Journal 35

line to legally allow them to continue their research. The results are presented each May on BME Design Day, but where, might you ask, does the entrepre-neurship come in? The answer is everywhere.

Making it Big Time on a Small Scale

Nikhil Vadhavkar, like Monagle, is a senior Bio-medical Engineering major who spent his junior year on a design team. Vadhavkar, unlike Monagle, had a project with serious entrepreneurial implica-tions. As design team leader, Vadhavkar led a team of juniors and freshmen in search of a way to isolate and freeze only cancerous cells in prostate cancer surgery, a procedure which today often freezes and kills healthy cells along with its target. Nikhil had a very limited business background, which consist-ed of Professor Lawrence Aronhime’s Introduction to Business course through Johns Hopkins’ Center for Leadership Education. This fateful encounter between Vadhavkar and Aronhime turned out to be just the impetus for getting the entrepreneurial

wheels turning for this design team.As the weeks progressed and Vadhavkar’s team

went through stages upon stages of presentations,

Aronhime took an interest in their material. “He real-ly liked our value proposition,” Nikhil eagerly spouts to me in a bustling coffee shop on the JHU Home-wood campus. “A business plan is not required for the course,” he continues, “but since you’re already in the process of developing the intellectual prop-erty, you’ve already taken a step there.” Through a

combination of old business plans provided by Pro-fessor Aronhime and advice from Joynita Sur, a pre-vious BME design team participant who years ago took her design to market, the design team crafted a plan which they hoped could realize that evasive dream of commercialization.

Nikhil and his team, armed with a thorough busi-ness plan, applied to three national business plan competitions: two university-based contests, Rice’s Business Plan Competition and Colorado State’s Venture Adventure, and the Mid-Atlantic Business Plan Competition. Each required an executive sum-mary far ahead of time with industry analysis and financials. A written plan was required only after an acceptance. Vadhavkar’s team was offered a stage in each of the three competitions, and it set out first for Rice University.

At this point in the conversation, Nikhil shakes his head woefully and recounts “Boy, did we have a lot to learn.” Rice was unlike anything they had

Fall 200936

expected. As undergraduates with their own intel-lectual property and little business experience, they faced competition from a sea of teams composed of MBA students peddling the IP of an established fac-ulty member. “As a team of kids with an idea of our own, we were no match for the work of professors who have spent decades in the field.” One group had already been sponsored by Master-Card, while another had hundreds of thousands of dollars in fund-ing procured. The mass of judges bombarded the team with in-depth questions about financials and the market, as the team struggled to hold its ground.

“Our greatest weakness,” Vad-havkar explains, “was our man-agement team. Oh, you’ve taken financial accounting? You’ll be our CFO! I’m the design team leader, so I guess that makes me CEO?” The high-level venture capitalists at the Rice competition were not amused. The investors wanted fi-nancial experts or people who had started companies; they wanted to see grounded sales costs and rock-solid sources; and they wanted to see a proven product. The venture capitalists cared about two things equally: the quality of the product and the experience of the management team. Unfortu-nately for Vadhavkar, batting .500 in this league was not going to win you any championships.

The Cross-Country Learning Curve

Fortuitously, while Nikhil was parrying the ques-tions of the Rice judges, another team member was at Colorado State University, representing them in the all-undergraduate Venture Adventure. By fun-neling feedback across the country, the team was able to work with the critiques from Rice and imple-ment them in Colorado, garnering a third place win. Later, the team ended up pulling in a second place victory in the Mid-Atlantic Business Plan Competi-tion.

The design team had a viable business plan ac-companied by the proper technology. The next stop on the biotech entrepreneur express was the patent office. The team filed a provisional patent for under $200 which secured their idea for a year. However, to really run with your idea, according to Vadhavkar, you need a patent portfolio, which does not come

cheap. Staring down a price tag of up to $60,000 per patent, the group had a decision to make. “If we go through JHU Tech Transfer, we only see about 30% of the returns.” Nikhil and his team did some quick math and established that “30% of something is a whole lot more than 100% of nothing.” The team pursued the office of Technology Transfer, and their approval is pending.

Nikhil is a year out of the program and still waiting on the office of Tech Transfer. As for an exit strategy, Nikhil would like to continue research and develop-ment on his design and eventually license the design to Endocare, the manufacturer and developer of oth-er similar procedures. From here though, he imag-ines a “quick and dirty exit” through Tech Transfer. “It’s cool to want to found a company,” Nikhil con-cludes, “but we’re just undergraduates.”

Sean Monagle pictured here with his BME Design Team’s invention ofa viable third world test for protein in urine

JayStreet Journal 37

Do It Yourself Entrepreneurship

Senior Lee Ouyang did not have as smooth a transi-tion into the business of science as did Vadhavkar. As a junior, Lee’s design team created a glaucoma shunt which drains glaucoma-causing eye-fluid from the eye. Like Monagle and Vadhavkar, Lee and his team spent a full year toiling and tinkering, and he found himself with a viable product at May 2009’s Design Day, or so he thought. Initially, the office of Trans-fer was not on board with the team’s design at all. “They didn’t see the market potential,” said Ouyang. “The office dragged out the process and failed to act on our behalf.” Ouyang, after spending months on research and development, had tremendous faith in his project, and one office of non-believers would not be enough to stop him.

After JHU Tech Transfer’s stagnation and rejec-tion of the team’s product, Lee brought his idea to a Hopkins-sponsored “speed dating” event, which ro-tated entrepreneurs and inventors in a round robin fashion. After discussing his idea with a handful of venture capitalists, Lee obtained some phone num-bers and returned to the lab. After following up, Lee received a serious inquiry into his design. “This guy wasn’t ready to talk numbers,” Lee says of his VC re-lation, “but he showed clear interest and we were getting into specifics.” Things were looking up for a team whose idea only weeks ago was going to lay fallow in the underbelly of the Homewood campus. That is until Tech Transfer got word of it.

The JHU office of Tech Transfer was not going to let a venture capitalist steal an idea from right under its nose, even if it had rejected it. Lee betrays an enig-matic grin as he tells me: “Tech Transfer called me up and said ‘if you move forward, we will take action to stop you.’” The idea seemed good enough after all, and Lee has since moved forward with Tech Trans-fer, acknowledging the benefit they provide to the students. “They’re supposed to be helpful,” Lee con-tinues, “and they are. Investors can take advantage of you. Tech Transfer is looking out for our financial interest, as well as that of Hopkins.” Lee goes on to echo Nikhil’s response about whether or not he felt comfortable handing over the reins to Tech Transfer for licensing or ownership. The bottom line is, 10

percent of something is a whole lot more than one hundred percent of nothing.

Success Through the Eyes of an Advisor

Dr. Soumayadipta Acharya, a senior advisor to the undergraduate design team program and to the JHU Center for Bioengineering Innovation and Design, explains his thoughts on what makes a BME design team successful. “It’s often the simplest designs that make it big,” Acharya states. “It’s also very circum-stantial.” As we sit across from each other at a cir-cular table in his office, it is obvious that he is fresh from a meeting with a design team, as the multitude of whiteboards is laden with market analysis tech-niques and design protocol. Dr. Acharya places an incredible emphasis on the circumstances of the team, most important of those being the age of its constituents. “The nature of the project life cycle is that team members graduate and move on.” Teams with juniors and very motivated freshmen are the ones which take a project off of the classroom table and to the bank. Acharya also cautions not to dis-count the freshman. “Their unbiased eyes, unjaded by years of Bio-Medical Engineering classes, bring a freshness and energy that can often revitalize a struggling team.” By the end of their four years at Hopkins, Dr. Acharya estimates that 70% of BME’s enroll in the course at one point or another.

A decade of design teams have passed under the supervision of the program. Dr. Acharya points to one main thing which sets the best teams apart from the good: the attitude. Everyone in the program is a Hopkins BME, and therefore has demonstrated incredible aptitude up to this point. However, the teams who look for what will make a difference, like Monagle’s, the ones who are flexible and personable, like Vadhavkar’s, and the ones who won’t take no for an answer, like Lee’s, are the teams most likely to succeed. Their success then translates into, after at least a year of design team, the next generation of biotech entrepreneurs.

Fall 200938

“We welcome China as a strong and prosperous and successful member of the community of nations. ”

U.S. President Obama on his first state visit to China, Novem-ber, 2009

China has surpassed several developed economies to become the third largest economy in the world after the U.S. and Japan. While the global economic downturn has slowed the pace of growth in this emerging powerhouse, year on year GDP growth was 8.9% in the third quarter of 2009 and economists project a 10% annual growth rate by the end of this year. Complementing this robust growth is a 30% to 40% savings rate. Contrast these figures with the barely

growing U.S. economy and its nearly zero percent average household savings, and you can see the lucrative potential China displays to the world.

What prepared you to be an en-trepreneur? This is the question we asked all the entrepreneurs who came to JayStreet. Answers varied from one entrepreneur to another, but networking is the one factor cited by all. Does the importance of network-ing translate across borders? This article will lead you to the across the Pacific to China, to see how Guanxi, the Chinese word for social networking, works for entrepreneurs in that emerging “opportunity land”.

Q: What is Guanxi? A: It is the Chinese Art of Net-

workingGuanxi describes a personal

connection between two parties in which one is able to prevail upon another to provide a favor or service. In most cases, the two parties are not to be of equal social status. Guanxi can also be used to describe a network of contacts, which one can call upon when something needs to be done, and through which he or she can exert influence on behalf of another. In the entrepreneurial context, Guanxi represents con-nections or relationships with government officials and figures with control of certain critical resources in various sectors.

Q: What differentiates Guanxi from networking in the U.S.?

Guanxi and Entrepreneurship in China

By Alex Qian

JayStreet Journal 39

A: Guanxi involves networking with govern-ment

Networking with entrepreneurs, investors and academia is one of the most important factors in entrepreneurs’ world, according to the most of the American entrepreneurs interviewed on JayStreet. How does Guanxi differ from networking in the U.S.?

“Business success is not only determined by eco-nomic status but also by the political connections of the entrepreneurs.”

Ying Zhang, chairman and CEO of Nine Dragon Paper

Zhang, one of the most successful boot-strap en-trepreneurs in China, founded Nine Dragon Paper in 1995 and led the company to success on Hong Kong Stock Exchange in 2008. Nine Dragon Paper has become the largest producer of containerboard products in the nation and one of the largest in the world. Zhang’s view on connection with govern-ment highlights the unique feature of Guanxi, the connection with government.

The involvement of government in business is not only substantial but also crucial for entrepreneurs. Other than the business registration and regula-

tion that fall under government’s jurisdiction, some industries are deemed potentially “detrimental to the security of national economy; ” these include energy, banking and raw materials and are strictly

controlled by State-Owned Enterprises (SOE’s) where corporate officers are appointed by govern-ment and the government’s directives supersede business interests. In such cases, Guanxi with gov-ernment officials can accelerate regulatory process, lower certain stringent entry standards, or easier access to financial and other production resources.

Q: What other features of Guanxi are important to understand?

A: Two: the way Chinese people think about Guanxi and the clear dis-tinction they draw be-tween Guanxi and what Westerners consider cor-ruption.

Guanxi is

Development of entrepreneurship in China

Until the 1980s Small-scale activities as means of subsistence in retail and services, known as Getihu (solo proprietorship) E.g. Street vendors Late 1980s Large scale of choice businesses in all sectors ran by more highly educated individuals, often State Owned Enterprise managers, known as Siyin qiye (private enterprise) E.g. Restaurants, transportation, manufacturing Starting 1990s Foreign educated or trained Chinese overseas returning to China to start businesses E.g. Internet companies

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a veiled subject in both social and business contexts. People are likely to avoid mentioning Guanxi in open conversations for many reasons, chief among them is the need to protect Guanxi as a valuable private asset. In the U.S. , government officials are often cautious about the personal favors they extend to their con-nections. Western systems rely on comprehensive regulatory oversight systems to guaran-tee the integrity and fairness of regulatory processes and the al-location of resources. As a result, many Westerners misunderstand Guanxi, assuming that it is a form of corruption. In modern China, there is a boundary between Guanxi and corruption. Guanxi is based on trustworthiness, not on money, and it results in conve-nience, without a compromise of principles. Certainly, cases of cor-ruption have appeared in recent years. But in the Chinese mind, the line between Guanxi and cor-ruption never blurs.

Q: What is the root of Guanxi?A: It is rooted in ancient social

norms and in the modern eco-nomic system of China.

Any savvy consultant would advise Westerners who want to do business in China to learn the role of Guanxi. Yet, Guanxi is such a delicate issue that most Chinese are reluctant to talk about it.

Connections have always been the key to Chinese social and economic activities. Under the family-and-community-based economic model that had existed

China Fact Sheet:

• By the end of 2008, China’s population toppped 1.328 billion, 0.67 billion of whom live in urban areas across the country; the total household savings will top 400 billion RMB (approximately 58.8 billion in U.S. dollars) by the end of 20092

• According to the State Administration for Industry & Commerce (SAIC) of China, the country’s market regulatory authority, the number of private enterprises increased to 6.64 million by the end of first quarter of 2009.

• Tsinghua Uinversity, one of China's "lighthouse institutions", could only fill one session of the basic entrepreneurial course for graduate students three years ago. Now, both the graduate and undergraduate business school host four sessions and have a long waiting list. 3

• 179,800 Chinese students left for education institutions overseas, primarily United States, U.K., Canada, Australia and other European countries in 2008; a record of over 200,000 foreigners enrolled in Chinese educational institutions in 2008

2. Statistics, People’s Bank of China,2008

3. Building China’s NextGen Entrepreneurs, Forbes.com, Christopher Thomas

A Few tips For Establishing Guanxi

Treating someone with decency while others treat him/her unfairly could result in a good relationship.

Guanxi starts with and builds on the trustworthiness of the indi-vidual or the company.

Being dependable and reliable definitely strengthens the rela-tionship.

for centuries prior to commu-nism, Chinese people tradition-ally did business with people they knew and trusted, such as families and close friends living in the same communities.

When the Communist Party took over in 1949, Government started to dominate the economy. By the end of 1956, most private businesses had been confiscated and turned into state-run enti-ties. The government and govern-ment-control SOE’s dominated all economic activities until the economic reforms of the 1980s. Those reforms, aiming to build “socialism with Chinese charac-teristics,” were orchestrated to open China to foreign investors and to stimulate the growth of a private sector in the state-domi-nated economy. As successful as the reforms have been in terms of economic growth, they have not changed the fundamental economic model of the nation:

China remains a state-dominated economy, which explains why the government and SOE’s remain greatly important to all busi-nesses in China today, and why Guanxi will continue to play an indispensable role.

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Dear Reader,

Thank you for reading the second annual edition of Jaystreet. For our first-time readers, JayStreet is a journal publication about entre-preneurship and science, created by Johns Hopkins students from all academic disciplines in an interactive workshop course.

JayStreet, the Johns Hopkins Journal of Science and Entrepreneur-ship, focuses on the crossroads of the entrepreneur and several indus-tries, including the growing biotech industry. The journal is divided into three sections: 1) Do you have what it takes? 2) Doing Business in the 21st Century and 3) Biotech- Beyond Biology and Technology.

The objective of the course was to complete and publish a journal, but also to learn the subtleties of the business world. The class has fo-cused on the parts of business you do not usually learn in a classroom setting, including networking, working in teams and learning to feel comfortable in novel environments.

In mid-November, these lessons were put to the test for me in a real-world environment. After reaching out to Lisbeth Pettengill, the Vice President of the Greater Baltimore Committee (GBC) and an en-trepreneur who spoke to our class, I sat in on a meeting with her (of the Licensing Executives Society) on November 19. The meeting was on the 19th floor of the Wachovia building in downtown Baltimore and was a very unique experience. I went in slightly overwhelmed, enter-ing the board room as a mere college student among top Baltimore executives. Using the speaking skills and networking lessons I was taught in class, I gained more confidence as the meeting went on. After the meeting was over, I networked with several influential directors and learned new information about the biotech industry which was supplemental to what I learned in class.

Each member in our class contributed to this publication and went above and beyond. We would like to thank Professor Sheff and our teaching assistant, Niki Buchholz for their passion and support in help-ing us produce the publication.

We hope you enjoyed our journal,

Brett Schwartz and the entire Editorial Board

Letter from the Editorial Board

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