Apr 2012 04

By: Michelle Jane Stewart

CUE recently sat down for a chat with Dr Darrin Disley, CEO of Horizon Discovery Ltd, to gain some insight into his experience as a Life Science entrepreneur, his time with Horizon and his views on the future of entrepreneurship in Coventry.

As a successful and experienced parallel entrepreneur, Dr Disley has been involved in the founding and growth of no less than ten high-tech business ventures. He is a Coventry alumnus with a PhD in Biotechnology and has been an advisor on commercialisation strategies to key technology centres in Europe, USA, India and Africa. Arguably his most successful venture to date, Horizon Discovery Ltd, a translational genomics company based at the Coventry Research Park, is one of the fastest growing biotech companies in Europe, having raised £14mil of equity investment, closed >£12mil in sales and returned £3.5 mil to founders and early investors. This included an 11x return on the initial seed investment from Coventry Enterprise in 2010.

As a serial entrepreneur, you have founded a variety of companies in the past. Have you noticed any key factors that make certain companies turn out more successful than others?

I think there are many ingredients to a successful business but it almost always starts with a disruptive solution to a problem. In my experience, rarely are ideas truly disruptive, in other words exhibiting the potential to completely change the way we do things or view the world. Many innovators make the mistake of providing solutions to problems that either do not exist or do not have critical value to a clearly-defined market demographic. To me, identifying problems is the hardest and most important part! Once you have that sorted, you can begin to innovate, identify a platform, product or service solution and quantify your company’s value to investors and most importantly your customers.

It is crucial in any venture to assemble the right team of people who can deliver both the technology and product development plans within the context of a well-conceived and realistic business plan. At the end of the day, investors back people as much as, if not more than, any technology, product or service. Personally, I am looking for people who realise that customers should always be the focus of their efforts and placed at the centre of their business plan. When I invest in a start-up team, I need to make sure that they are passionate and able to go the distance but at the same time, I also need them to be pragmatic and honest with themselves - knowing when to change course or even stop is just as important as knowing when to persist and not give up. Additionally, I also look at their leader to see if they are able to sell the business, not just to investors, but to the rest of the team and to customers. A good leader will also be able to inspire his team to band together even in the face of adversity or setbacks.

Often, the hardest step for aspiring entrepreneurs is making the transition from a paper-based business plan to actually establishing the business. Has this been a problem for you and how do you know when to stop planning and start doing?

It is right to say that a business plan is only an initial sales and operational planning tool, and soon you will have to make the leap and actually get your hands dirty, to begin implementation.As for when to stop planning and start doing, once you have determined the key risk vs reward milestones it is time to push the pedal to the metal. It is essential not to enter what is known as analysis paralysis (i.e. thinking too much) or become gun shy, but to get out there and meet your future partners, customers and investors.

I do find it interesting that many aspiring entrepreneurs I talk to have plans only as far as developing their technology, validating it with a few early-adopter deals, and then sell it off as soon as possible to a larger player (invariably one located outside of the UK). The classical start-up route often builds on a period of technology transfer, textbook financing strategies and conservative business development. There is a fundamental misalignment between this model and how most entrepreneurs that I know think. I look to build businesses in the most capital efficient and non-dilutive (of equity) manner possible, getting ahead of the classical financing game and gaining early customer validation or even customer investment. This, I would argue, gives you the best chance of building a long-term sustainable business.

Horizon Discovery is arguably your most successful company to date, having raised £14mil of equity investment, close to £12mil in sales and returned £3.5mil to founders and early investors including an 11x return on the initial seed investment from Coventry Enterprise all over the past 3 years. What has made Horizon Discovery so successful?

I think the management team’s ability to maintain enterprise control of the company has much to do with our success to date. We got ahead of the game by importing a US technology that had been built with >$50 mil of NIH funding; then by in licensing a range of derivative products made using this technology at Universities located around the world we were able to generate product and service revenue from day one.  This is quite unconventional and allowed us to demonstrate a proven track record when we went for larger rounds of funding. By bringing in corporate investors (Genentech and Roche) whose motives were grounded more in early technology access rather than early financial returns, we were able to keep close alignment of interest between the early shareholders, investors, and incoming investors (by insisting on only a single share class and the generation of a private market liquidity). This allowed the management team much more freedom in decision and deal making. It was a difficult path to take when easier investment was available and we had to operate under sub-optimal operational conditions for a long time (without a fancy building or the usual trappings of a well backed VC start-up).

Additionally, we owe our success to the vision, experience and pragmatism of our founder Dr Chris Torrance who managed to bring the right people together for the business. Acknowledging that his scientific background conferred limitations when trying to establish and build the business, he graciously allowed other people (including yours truly) to take control over the broader business strategy, scale-up and globalisation of the business. Since then, we have collectively built an entrepreneur-based management team with a vision of growing and sustaining a successful UK based biotech company.

Horizon and yourself via direct donations and support from Carpe Diem Trust, represent CUE’s biggest sponsors with £22,500 of support in 2011/12 (£100k over 5 years). You also put in a significant amount of your personal time to support CUE business plan training, judging and other events. What motivates you to support us and what value do you see in it?

There are many reasons why I support CUE, but is the  main aim is to support the next generation of young entrepreneurs, as I believe the future of our living standards, social cohesion and the UK’s broader standing in the world is dependent on their success in building the knowledge-based economy essential to deliver high levels of growth for the future.  I think it’s important to maintain a healthy entrepreneurial environment at the University and I want to create an environment of challenge and opportunity for the next generation of entrepreneurs by passing on my skills or helping out financially. My generation has funded our lifestyles on high levels of debt for 30 years, which is unsustainable in the long run and harmful to the prosperity of future generations. We cannot focus solely on selling services to each other, nor can we rely on a contracting industrial base grounded in a golden age long since gone. The UK must build businesses with non-organic growth potential (healthcare, cleantech & high tech) to ensure jobs and prosperity in the future. Developing and honing entrepreneurship as well as entrepreneurial talent is paramount. This is why we hire mostly young people at Horizon to give them a chance, train them well and provide them with long-term mentorship and opportunities to lead.

CUE and its members constantly strive to provide better support for aspiring entrepreneurs in Coventry. Do you have any advice or suggestions on how we can improve in the future?

I think CUE has done a wonderful job over the years but there are definite areas for improvement. While presenting a well laid out business plan is important, care should be taken to balance the academic vs. translational training given. CUE needs to educate its members of the multiple purposes of the business plan competition, namely to take budding entrepreneurs through the process of writing a business plan; provision of a platform for expression and recognition of their future CEO potential and; and in rare cases, the opportunity to deliver on a real business opportunity, as Owlstone Nanotech and Coventry Temperature Concepts have done in recent years.

Enlisting a larger number of entrepreneurs (as opposed to consultants) as mentors/judges, especially at the earlier stages of the competition, would be beneficial to this cause and should achieve a more diversified and “real-world” view point. Secondly, we should focus not only on the quality of the business ideas but also on identifying talented entrepreneurs who might not necessarily have the best idea at that time. This is the main reason I am sponsoring new prizes this year for the most promising general and biotechnology entrepreneurs.


This feature on Dr Disley can also be viewed at Business Weekly.