Can Latin America`s Startups Dream of Biotech Unicorns?
University biomedical research and biotech ventures in Medellín: Excerpts from an exchange with Juan José Zuluaga, founder of TIG
Collaboration between businesses and universities has traditionally been recognized as a field fraught with complications and obstacles. Among the factors making it so are contrasting work cultures and management structures and different time frames. Communication gaps emerge quickly unless considerable attention is dedicated to building mutual trust, leading to a mismatch when it comes to dealing with intellectual property rights over research as well as regarding the relative priority of skill sets delivered by universities vs. the ones most needed in the labor market.
Moreover, new rules of engagement seem to be in order given the ongoing technological revolutions and their association with new ways of organizing business activity. Far from the traditional link between corporations R&D departments on one side, and research institutions or university science departments on the other, the center of gravity of innovation seems to be moving towards complex local entrepreneurial ecosystems. In them, technology startups, business incubators and accelerators, venture capital funds and multiple other actors interact with different degrees of intensity so as to produce innovation, while large companies create their own ecosystems through open innovation initiatives. Universities are left with the urge to engage their local ecosystems by offering training in entrepreneurship and scientific skills, as well as research outcomes that have potential for commercialization, an urge they ignore at their peril.
Few areas are more in need of university-business collaboration in the context of these new rules of engagement than biotech, where the gestation period for new ideas, technological breakthroughs and innovation is typically longer than in the software industry, and requires highly specialized scientific skills and equipment.
What follows are excerpts from an interview with the Colombian biotechnology entrepreneur Juan José Zuluaga. The exchange we had in the headquarters of his Tech Innovation Group (TIG) downtown Medellín, mid-December, focused on two key themes: the relationship between biotechnology ventures and university-generated knowledge, and the evolution of his and his companies’ strategies. During the interview, it emerges that TIG seems to embody the real possibility of unlocking the potential of university-business collaboration in biotech. Juan José elaborates on the developmental stages of various companies under TIG, reflecting on the role of university research in fostering biotech innovation. He emphasizes the importance of creating wealth to combat poverty as a core principle and describes his journey from university graduate to establishing biotechnology ventures. The interview delves into Juan Jose's philosophy and practice of combining university research with business innovation, highlighting several companies and their developmental stages. He also discusses the impact of TIG’s work on Colombian society and the broader biotech industry.1
The key requirement for an entrepreneur is to develop an understanding of how the particular industry he/she is in works and how the company being created or developed fits in that picture. By partnering with research universities, adapting the entrepreneurial strategy to the biotech industry’s dynamic, and getting to know his market, Juan Jose Zuluaga presents us with a fascinating instance of technology-based entrepreneurship in Medellin. All in all, I felt I had found a rare occurrence: a fruitful and well managed case of university-technology business relationship.
Here is a synthesis of our conversation:
Juan Carlos Navarro: Juan José, can you tell us about your background and what motivated you to enter the biotechnology field?
Juan José Zuluaga: Absolutely. My journey began in the halls of academia, where I earned a degree in chemistry and from the beginning was fascinated by the power of biotechnology to address complex societal challenges. This field, I believed, held the key to revolutionary solutions in healthcare, agriculture, and environmental sustainability. I come from a large family in which education was highly valued, but everybody needed to work and contribute to earn a decent living. So, from the outset I look at establishing myself in business as the right answer to my family situation. Beyond this personal element, however, I was also truly motivated by the potential of research and innovation to bring about tangible, positive changes in people's lives, especially in Medellín. This city, vibrant and it is, faced unique challenges that I felt could be mitigated through innovative biotech solutions. So, I embarked on this path not just to securing an income, but to make a meaningful difference in society through technological advancements.
Juan Carlos Navarro: What were some of the early challenges you faced when establishing TIG?
Juan José Zuluaga: Establishing TIG was a project filled with numerous challenges. At this point, I have founded 25 companies, and I have gone through 6 exits. With the proceeds of my early investments I decided, with the full support of my family, to invest in biotech ventures. So, initially, the biggest hurdle was not securing adequate funding to translate our biotech ideas into viable products, since I was funding the project with my own resources. Anyway, finding investors willing to take a risk on a new venture in a field as complex and unpredictable as biotechnology was always going to be very difficult at the early stage. The other very important thing is that I quickly realized that the conventional entrepreneurial approach used in software development was not going to work. Thus, I did not establish startups looking for an idea and a viable product. I rather made a sustained effort to find technologies and potential products and then organized a custom-made company around them. This is the right way in biotech since substantial scientific research and years of effort are necessary to arrive in the market. Assembling the right team of researchers and business people for companies of this type is a very special challenge, since you have to put together not only technically skilled personnel in the area you are working on, but also people that shares the vision and a passion for the kind of innovation you want to produce.
In sum, balancing the scientific aspects with the practicalities of running a business has been a significant challenge. These hurdles have been crucial in shaping the strategic direction of TIG, instilling a culture of resilience and innovation that has become our hallmark.
Juan Carlos Navarro: How significant was the role of university research in TIG’s development?
Juan José Zuluaga: University research played an indispensable role in TIG's development. From the onset, we were committed to bridging the gap between academic research and commercial biotech applications. We collaborated closely with universities, particularly the University of Antioquia, one of the top research universities in Colombia, but also with others, such as the Universidad Nacional of Costa Rica. We knew from the beginning that we were tapping into considerable reservoirs of cutting-edge research and innovative ideas. This collaboration was not just about accessing research; it was about creating a synergy where academic insights could be transformed into practical, marketable biotech solutions. It was also, and this is very important, about building trust between both sides and about respecting each other’s culture. This integration of academic excellence with business acumen has been a key driver of our innovation strategy.
Juan Carlos Navarro: Can you elaborate on the growth and strategy of TIG?
Juan José Zuluaga: Our growth strategy at TIG has been multifaceted. Diversification has been a key element, allowing us to explore and establish ourselves in various sectors within biotechnology, thus the variety of companies that make a part of TIG (Overview of TIG companies) each with its respective focus in terms of technology, potential market and strategy. This not only diversified our risk but also enabled us to leverage different market opportunities. In addition, we've expanded our reach, not just locally in Medellín, but also in international markets, adapting to global trends and demands while staying true to our core values of innovation and social responsibility. A business proposition as ambitious and innovative as TIG needs an international horizon; it is not viable if you think only about the local market. Most recently, we have become active in looking for new investors, since the business proposition is by now clearer and less risky, and we are having some success.
Juan Carlos Navarro: What impact has TIG had on society and the biotech industry?
Juan José Zuluaga: TIG's main impact on society and the biotech industry is still to be realized, but I am persuaded that it will soon be considerable. We have developed biotech solutions that address critical health and environmental challenges, demonstrating the practical benefits of biotechnology in everyday life. This has not only placed us in an excellent launching pad to become an important player in the biotech industry but has also shown the potential of biotech ventures in contributing to societal well-being. Lowering the costs of important products or therapies, or enhancing access to critical medications, has a direct positive social impact. We want our work to be a showcase of how innovative technology can be harnessed for the greater good, so we take our corporate motto very seriously: “Democratizar las ciencias de la vida para un mundo mejor” (Democratizing life sciences for a better world).
Juan Carlos Navarro: How has your business philosophy evolved over time?
Juan José Zuluaga: Over the years, my business philosophy has undergone a significant evolution. Initially, the emphasis was primarily on leveraging academic research for entrepreneurial ventures. However, as the industry evolved, so did our approach. We realized the importance of creating a harmonious blend of academic research, entrepreneurial zeal, and a keen understanding of market dynamics. This evolution in our philosophy highlights the importance of being adaptable and receptive to changes in the industry. Today, TIG stands as a testament to the power of integrating diverse aspects of research that take place both in the academy and within technology companies, and how this can become innovation that has positive commercial value as well as a larger impact in critical areas of health care for the community. Examples include making rare medications widely available, disrupting the international market for hemoderivatives, turning expensive products and treatments affordable through innovation in the production process and unprecedented applications of new approaches such as gene therapy.
Juan Carlos Navarro: How do you see the relative responsibility of the public and private sector in driving technological innovation in Colombia?
Juan José Zuluaga: In Colombia, our investment in research and innovation is just about 0.28% of the GDP, which is quite low compared to countries like Israel and South Korea, investing over 5% and 6% respectively. Yet, while the government should definitely increase its contribution, the real lag is in the private sector, especially among entrepreneurs. Government incentives are in place, and we at TIG have indeed made use of them, a case in point being the tax credit for investing in innovation, but it's crucial that more entrepreneurs step up and leverage these opportunities. I'm convinced that this collaboration between the state and private sector is the key to driving technological innovation in Colombia.
Juan Carlos Navarro: In conclusion, what would you say is the essence of your journey from academia to leading a biotech holding like TIG?
Juan José Zuluaga: The essence of my journey has been about risk taking, partnering with university research, embracing market challenges, fostering innovation, and making a lasting impact. At TIG, we’ve strived to not just advance in the field of biotechnology but to do so with a commitment to societal betterment. This journey has been a blend of scientific pursuit and social responsibility, marking our place not just as a biotech company, but, hopefully, as a catalyst for positive change in society.