From Science-Led to Product-Led: Transforming Deep-Tech Companies
Aligning Objectives with Product Squads in Deep-Tech Companies
Deep-tech companies, especially medTech or biotech companies, are typically spun out from academic environments where hard `R` research drives raw innovation into novel IP that forms the basis of a new venture. However, these companies often struggle to develop a product from this IP because they focus on what is scientifically feasible, rather than on what their target customers need in the form of a product that encapsulates that IP in a way that is valuable and viable.
Marty Cagan, a renowned product management expert, explains why theses attributes are valuable part of a of skill set of a Product Manager
We staff our product teams with the skills necessary to come up with effective solutions that are valuable (our customers choose to buy or use), viable (the solution works within the many constraints of the business), usable (the user can figure out how to use) and feasible (our engineers have the skills and technology to implement).
While the product designer is accountable for ensuring the solution is usable, and the engineers are accountable for ensuring the solution is feasible, the product manager is accountable for ensuring the solution is both valuable and viable.
This is all to say that university spin-out companies are typically science-led rather than product-led. This is a problem because we know that many amazing IPs that are spun out into companies never make it to the market, which is a great loss for all of us. Such IP could have improved health, extended lives, and increased happiness, but due to the notorious commercialization valley of death, they never make it into the hands of customers.
To counter this problem, we’ll explore how shifting to a product-led approach, guided by clear Objectives and Key Results (OKRs), and empowered by product squads, can bridge the gap between the lab and the market.
The Importance of OKRs in Deep-Tech Companies
Objectives and Key Results (OKRs) are a goal-setting framework that can transform how deep-tech companies operate. Originally popularized by tech giants like Intel and Google, OKRs help organizations align their vision, focus efforts, and track progress toward measurable goals.
Why OKRs Matter
The Objective part helps set clear and transparent goals across the company at both the macro (higher company level) and micro (squad level).
The Key Results part allows the company and squads to set measurable outcomes to determine progress toward those objectives and criteria for when they have been met.
These company OKRs set the foundation for product squads to develop squad-specific OKRs in line with the company OKRs, allowing them to develop and prioritise initiatives on the company roadmap that move the needle on these OKRs and deliver valuable and viable products.
A Practical Example: Cancer Next-Gen Sequencing Spinout
Let’s take an example of a Cancer Next-Gen Sequencing University spinout.
This spinout has developed a powerful bioinformatics platform that can identify biomarkers to more precisely determine, at a molecular level, the type of cancer a patient has. Their platform can be used to provide personalised medicine recommendations on drugs that would be the most effective to fight that type of cancer.
The Science-Led Approach
Typically, what would happen in a spinout is that the company would focus on redoubling their efforts in making the platform more reproducible outside of the lab and packing as many biomarkers as possible into their platform for a launch scheduled months into the future. Regulatory planning would be put into the delivery, and some sense of a go-to-market plan would be in mind on how to grow sales once the R&D has finished and regulatory approval has been given. This is a science-led approach and would typically lead to months of cash burn, only to be met with the sounds of crickets when launching this platform.
The Product-Led Approach
Here is what a product-led company would do instead.
First, the company would set OKRs such as the following:
Objective: Commercialize Cancer Testing in Australia
Key Result 1: Public launch before FY Q2 2025
Key Result 2: Over 100 referrals made for testing by FY Q4 2025
Key Result 3: Turnaround testing from sample receipt to result within 15 days by FY Q1 2025
Formation of Product Squads
The spinout now recognizes they need to break down these OKRs into product squads to achieve these objectives. Product squads are small, cross-functional teams dedicated to specific product areas or initiatives. Each squad has a clear mission aligned with company OKRs.
These squads need to be autonomous teams that operate with a degree of independence to make swift decisions. Because of this autonomy and self-reliance, they need to be cross-functional to ensure they have all the skills required to carry out their objectives. Depending on the scope of the squad, they could include science, engineering, product management, design, and regulatory expertise.
Developing Squad Missions
These squads would have their own missions which directly contribute to achieving company OKRs.
For example, there certainly would be a squad with a mission focused on improving the clinical utility of the test in clinical practice. This squad would look into factors such as:
Who are the target customers? Are they the referring doctors or the patients?
What biomarkers are important to them so they can get actionable treatment?
What other information does the test report need to contain for it to be valuable to them?
The testing platform has the capacity to identify 1,000 targets, but should that be the product? The squad may determine that only a subset of those targets are actionable and valuable to the target customers.
In addition, to deliver on the company OKRs, more product squads are required. Another squad could be focused on how those target customers get referred for a test—what solutions are required to build that referral process? How will those customers receive the test results? Yet another squad could be focused on how to deliver that test, such as what are the lab processes and solutions needed to reliably trace samples against patients to the required regulatory standards (i.e., ISO 15189).
Setting Squad OKRs
With each squad’s mission defined, they would develop their own OKRs at the squad level to move the needle toward achieving the overall company-level OKRs.
These can be set for 6-month intervals.
For the Clinical Utility Squad, one OKR could look like:
Objective: Establish Clinical Utility of the v1.0 Testing Platform
Key Result 1: At least 20 oncologists interviewed until 80% concordance of biomarker suitability is determined
Key Result 2: 100% of concordant biomarkers matched with the drug recommendation engine on v1.0 of the test report within 3 months of biomarker suitability determination
For the Squad Responsible for Delivery of Tests, this may look like:
Objective: Process 10 tests through the new Laboratory Information Management System (LIMS)
Key Result 1: Sample Receipt Module v1.2 processing 100% of all received samples by Q3
Key Result 2: Lab Workflow Module 1.0 to reduce DNA extraction to library prep time by 30%
Developing Squad Roadmaps
Now each squad is ready to start building out initiatives on their roadmaps which aim to meet their squad OKRs and, in turn, drive towards meeting the overall company OKRs. Because each OKR may take up to 6 months to meet, it is important to break up the delivery toward these OKRs into approximately 6-week milestones, where each milestone delivers incremental value in meeting that OKR.
For the Clinical Utility Squad, their milestones towards achieving the clinical utility of the v1.0 Testing Platform could be broken down as follows:
Milestone 1: Recommendation Engine 0.5 for preliminary matching against 10 customer insights with a public biomarker database
Milestone 2: Recommendation Engine 1.0 for matching against 10 customer insights with an in-house biomarker database
Milestone 3: Recommendation Engine 1.2 for matching against 20 customer insights with an in-house biomarker database
Conclusion
Shifting from a science-led to a product-led approach is transformative for deep-tech companies aiming to bridge the gap between innovation and market success. By setting clear, customer-centric OKRs and empowering cross-functional product squads with aligned missions, companies can focus on delivering products that meet real market needs through customer-focused roadmaps while leveraging their scientific strengths.
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