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A role model for startups and new business The CEO/entrepreneur learns Stan Lapidus' first forays into entrepreneurship were not so successful. While he helped launch the machine vision field with the founding of ITRAN, raised $15 million in venture capital, and drove the company to become the #1 machine vision supplier to the automotive industry, ITRAN was a financial failure. Stan remembers, "It was not a lot of fun. It was a failure. The close friends and I who founded ITRAN together are no longer speaking to each other." ITRAN suffered from a Marketing/Engineering Investment Ratio™ (M/E Ratio™) of 0.05. Stan needed a bridge from engineering to entrepreneurship. Marketing (market research) provided that bridge. Stan started Cytyc to pioneer new technology in PAP tests for cervical cancer screening. This time, however, Stan invested 1.5 times as much in Marketing (Market Research) as in engineering while he was still in his basement. Stan invested $210K in Marketing versus $140K in engineering in Cytyc's first twelve months (2006 dollars). Cytyc went public with an IPO, and attained a market value of $6.2 Billion. In MIT's entrepreneurship course, Stan taught, "We didn't plan it that way. We just did what we had to do. In retrospect, it would have been helpful to have such a planning tool. We didn't think in those terms [of the Marketing/Engineering Ratio™] at the time. We just did what was necessary to launch Cytyc successfully. Now, we have a budgeting tool in the M/E Ratio™." Stan invested even more in Marketing, 2.33 times as much in Market Research as in engineering in his next startup, Exact Laboratories, while developing world-class molecular biology technology for colorectal cancer screening, arguably even more complex technology than Cytyc. For example, Cytyc had 17 issued patents and 11 pending patent applications in the United States in 2002, while the much younger Exact had 23 and 31, respectively. Exact went public with an IPO, and attained a market value of more than $300 million. Stan invested only in Market Research when he launched Helicos BioSciences for single-molecule DNA sequencing in 2003. He invested $400K in cash and nearly one man-year in front-end market research and in market validation before commencing any engineering development whatsoever. Armed with a validated business opportunity, Helicos raised $27 million in Venture Capital in six weeks and another $40 million two years later. Stan learned the value of Market Research, using it to create companies with $4 Billion of market capitalization.
Models
of the impact of marketing on success See the Helicos BioSciences, Cytyc, and Exact Laboratories data as Super Successes, as well as ITRAN data in the group of Flaming Failures.
Invited
papers, presentations, and articles Lapidus, "The New Challenge for Genomics and Bioinformatics" MIT Enterprise Forum Case Presenter, Helicos Biosciences Corporation, February 8, 2006. Lapidus, "Marketing, the Bridge for Growing from Engineer to Entrepreneur" MIT's annual entrepreneurship course and MIT Sloan Graduate School of Business course, "Starting and Running a High Tech Company" MIT, Cambridge, MA, January 21, 1998, January 23, 1997, January 19, 1995, January 20, 1994. Lapidus and Grabowski, "How To Raise $100 Million" 128 Venture Capital Group, Waltham MA, December 12, 2002.
Grabowski "In The Beginning, Marketing Steers The Enterprise" Lead speaker at the CEO and Entrepreneur Boot Camp, May 15, 2004, Waltham, MA Grabowski, "Driven By The Data" Boston University Master Class, Boston, MA, October 22, 2003 and October 15, 2002 Langevin and Grabowski, "Market Research Drives Revenue" 128 Venture Capital Group, Waltham MA, July 17, 2003. Grabowski, "What Makes Technology Products Succeed?" The Business Network, Concord MA, February 10, 1997. Grabowski, "Who Is Going To Buy The Darn Thing On The Internet?" Institute of Electrical and Electronic Engineers - IEEE Engineering Solutions Conference, 'From the Desktop to the Internet,' Boston, September 10, 1996. Grabowski, "Marketing - Critical for Success" IEEE Entrepreneurs' Network, 1995-1996 Entrepreneurial Sequence, Waltham MA, October 10, 1995. Grabowski, "Invest More In Marketing Than In Engineering For Success" Entrepreneurial Marketing and Sales, MIT Enterprise Forum Fall Workshop, MIT, October 22, 1994 Grabowski, "Marketing/Engineering Investment Ratio™, a Measure of Success" WPI Venture Forum, WPI, Worcester MA, March 15, 1994. Grabowski, "Market Research BEFORE There's a Market or Perhaps Even a Product" SBIR Briefing - 'From Concept to Commercialization,' Cambridge MA, April 13, 1993. Grabowski, "Product Specs - One Customer at a Time" Boston College, Wallace E. Carroll School of Management, Management of Technology MBA, guest lecture in Professor Barry Unger's course, Strategic Management of Technology and Innovation, Chestnut Hill MA, March 2, 1993; and October 27, July 15, and March 3, 1992. Grabowski, "Raising Capital for a New Venture" Automated Imaging Association (AIA) Business Conference, San Diego, February 26, 1993. Grabowski, "Marketing - Essential for Success" IEEE Entrepreneurs' Network, 1992-1993 Entrepreneurial Sequence, Waltham MA, October 6, 1992. Grabowski, "Marketing, Promotion, and Selling" 'How To Create a Successful New Business,' MIT Enterprise Forum Spring Workshop, April 4, 1992. Grabowski, "Bottoms-up Market Research" Guest lecturer for Professor Ed Roberts in his MIT Sloan School of Management Graduate course, 'New Enterprises,' October 16, 1990.
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