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Overcoming the Founder's Dilemma: Why You Should Recruit Outside Your Network

Posted on July 2019

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​Biotech start-ups can be nimble and responsive if they utilize a small, tight-knit, interdisciplinary team. However, the minute work-groups start to expand they are susceptible to the founder’s dilemma. So how can an elite team find the right recruits that will align in terms of their technical skills, experience and vision, as well as their cultural fit? Small teams can be incredibly effective in early-stage R&D but when a start-up begins to experience explosive growth it can also become a turning point for its success or its failure. Read on to discover why start-ups must recruit outside their network to sustain innovation and growth.

Why Small Companies Are Effective 

Lean software, Six Sigma, and agile development are vetted methods for rapid innovation in software. These methods have also been implemented in biotech with astounding results. One principle within these methods is that small teams may be better equipped to excel in the earlier stages of development. The small-team phenomenon, which is well studied, holds true for many disciplines. One example, the Ringelmann effect, is the principle that people’s efforts increase as the size of their team decreases. This applies in science as well as in IT or even sports. For pharma and biotech however, it appears that these smaller teams may further enhance or even inspire additional entrepreneurial behavior which increases R&D innovation and efficiency and also has a direct impact on a pipeline’s success. Studies show that over 33% of candidates in the pipelines of the world’s top 10 pharmaceutical manufacturers were acquired from small research groups working either in academia or in co-operative incubator labs. As detailed in a 2014 analysis published in Nature — these groups operate less expensively and have a better track record for originating state of the art, high-priority medicines with real potential for commercialization. Consequently, many large pharmaceutical companies are redesigning their discovery team structures to allow for smaller, more concentrated work groups. What’s not to like?

Well, it turns out that small is best for innovation, but not necessarily for growth. 

The Founder's Dilemma - When Small Fails

Biotech start-ups typically involve small, like-minded working groups. But what happens when the company outgrows its scientific founders and advisors? Evidence shows that a significant percentage of co-founders are replaced when venture capital firms partner with start-ups, often in favor of more seasoned executives with proven track records in preparing a company for eventual acquisition or an IPO. Accounting for other factors as well, founder replacement appears to have a profoundly positive impact on start-up performance. Therefore since fewer than 25% of founders actually lead a company to its successful IPO, here comes the phenomenon termed The Founder’s Dilemma.

Of the CEOs and scientific co-founders who do remain, studies have shown that previous or frenetically acquired business acumen is a major success factor in those leading high-risk ventures. While initially, a founder's “attachment, overconfidence, and naivete” may be beneficial when starting a new venture, the ability to cede control, work with a larger team, and stay focused on the big picture is associated with higher valuations, typically after 3-5 years. So how does a successful biotech entrepreneur adapt to their own success? You get the right help, at the right time.

Recruiting Outside of Your Network

When it comes to surfacing talent (raw or cultivated) we are often hamstrung by the limitations of our network; who we know, who we don’t know, and the people we have never thought to look at. While early-stage start-ups might benefit from a close-knit group of friends or colleagues, real growth demands the inevitable integration of an ever-widening range of competencies and perspectives. For instance, when Google hires, they use an expert specialized hiring manager to surface candidates, then an independent panel composed of people performing that same function must come to a consensus before a candidate can be hired for the role.

The takeaway? An experienced specialist recruitment partner is the ideal collaborator for small and growing biotech companies. They can introduce candidates from alternative sources that possess the right technical talents but also have proven track records within other successful teams either in industry, in academia, or other privately funded research. An experienced specialist recruitment partner always knows where the best talent is for any given space whether it be biologics, gene therapy, or the ever growing immuno-oncology sector. They have a particular ability to attract that talent, to sell a new company to them, and articulate the intellectual benefits potentially gained within. They can introduce people into the mix that would not have been considered otherwise.

Get Help with Recruiting 

Regardless of your company’s size, the evidence shows that small companies will continue to increase innovation and efficiency in drug development. In order to maintain this and fully enjoy the benefits, biotech start-ups will also need to continue utilizing an external, trust-worthy recruitment consultant to manage the precise hiring demands of managers and department heads.

EPM Scientific has a strong global presence. We ensure the best talent is accessible at the right time to help cutting edge therapies reach the market. Our process is fast, safe, and efficient. If you are a US, Asia, or Europe based biotech company with ambitious expansion plans, let us help you find the right connections. Please feel free to reach out to a consultant directly via


EPM Scientific is a leading specialist recruitment agency for the Life Sciences industry. Since 2012, we have given clients the peace of mind that the recruitment process is in expert hands. Our continual investment in best-in-class technologies and consultant training enables us to recruit with speed, precision and accuracy. Today, EPM Scientific provides contingency, retained search and project-based contract recruitment from our global hubs in London, Berlin, Switzerland, New York and Chicago.

In the face of disruption, innovation and competition, Life Sciences companies and their leaders must find specialist talent faster than ever before. As part of the Phaidon International group, EPM Scientific works with 71 world-leading companies as their recruitment partner of choice to find the Life Sciences talent they need. So, they can focus on what they do best – leading from the front to create a better world.

We pride ourselves in keeping our professional network up-to-date with any changes that will shape the future of work or affect the hiring process. Visit our website to discover more invaluable insights, including exclusive research, salary guides and market trends. 

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