Why Do Some Life Science Companies Fail Despite Good Ideas?

Life science is about realising the potential of research, which means that, more often than not, a great idea and a powerful goal lie at the centre of a life science company’s mission statement.

We have seen so many examples of life science companies with ideas that could change the world that need to build the capital to make it happen. In some cases, you see some amazing successes but an idea alone is not enough without marketing, sales and effective operations.

This is nothing exclusive to life sciences; after all, 20 per cent of new businesses fail in their first year. However, because life science companies often take a long time to mature from the research and development phase into creating marketable and saleable products, they are more vulnerable than most.

Here are some common reasons why life science companies, unfortunately, fail to launch despite having great ideas.

A Solution In Need Of A Problem

Most life science companies form to commercialise a medical discovery once they find a potential commercial application for it, but the problem is that sometimes they have found something that lacks a demonstrable selling point.

If the market already has an option available that is as good or better than the one being offered, a new product is unlikely to be successful.

Grant Mentality

Many life science founders are academics, and so the early-stage funding for a company is treated more like a research grant for an academic project.

This is not inherently terrible, but it does mean that some companies do not factor in the need for contingency funding and runways, which means that they tend to run out of time before they can get off the ground.

A Fractured Vision

The founder has a very specific goal in mind when the found the company, but this is not always aligned with the management or with investors who are brought in and own stakes in the company. 

This can lead to money being burned with little to show for it besides being dragged in different directions.