Chat with Martin Jones from iZon Science

(This chat occurred in late 2017. Any errors are mine)

Martin Jones was the founding CEO and is currently [as of late 2017] the development director of iZon Science.

”Izon Science is the world leading manufacturer of nano-biological separation and characterisation tools. Its qEV SEC columns have rapidly become the EV separation method favoured by experts. Izon’s TRPS measurement system is the only accurate, standardisable and practical method of measuring complex nano-bio particles, particularly EVs and nanomedicine products.”

Martin runs all the R&D and in house development initiatives. Managing and overseeing the IP, internal infrastructure development , business strategy development.

J: Where did the original plan come from? [note: the “plan” means the idea for the startup and the technology areas it was going to pursue]

MJ: It came out of my mind (laughs). At that time Dunedin [in New Zealand] was the hub of biotech and I moved down from Auckland because I wanted to get into biotech. [Before moving down from Auckland Martin was working at Auckland University – he had received a PHD in archaeology – and spent a lot of time working with and developing Quantum Hydration dating – so if anything his specialities were Archaeology/Anthroplogy and to some extent Physics, not Biology or Biotech].

My first role down here (2004) was as a commercial director for a R&D company – it was the innovation development company for the meat producers of NZ – it was doing primarily real time biological analysis.

After networking with people down here for a while, with some colleagues I started chatting about the idea of doing rapid DNA analysis. Moving from DNA analysis via PCR and gels to instead using a nanopore. The nanopore would act as an instant gel. So the idea was to create a technology that would do DNA analysis in much less time and with far fewer consumable costs.

From those discussions I developed a business plan.

J: So that direction – did it remain fairly stable? And your goal was primarily how to achieve that technology-wise?

MJ: No, the original idea was to use nanopore to do size fraction analysis of DNA digests – hence the instant gel. So we needed to create a technology platform to enable us to do that. However, it became apparent very quickly that doing DNA analysis via a nanopore was going to be extraordinarily difficult and technically harder than we thought, at the same time we realised that there was a large need for nano particle analysis which we could much more easily deliver.

So within about 6 months of starting, our commercial direction shifted.

I was the CEO at the time and it was pretty obvious that the original market was going to be out of our reach. The amount of investment we would have needed to do it would have been prohibitive – especially in NZ.

Oxford Nanolabs [now called Oxford Nanopore Technologies] is doing something similar with their biological nanopores and they have had something like 700 million Pounds of investment and they are only just starting getting products.

J: I’m struggling with an idea, and I’ve chatted with you before about it – but in your view, can someone who is technically oriented can just say to themselves :

“Ok I want to go and create something in the Biotech world – I just need to swot up on a few subjects, pick a direction and then I can make it happen”.

Or is there something special about you – despite not having had a background in biology or biotech – that you could very quickly deep dive on your chosen subject and suddenly create a plan and convince people and investors to join in.

MJ: I think it comes back to being (as we have talked about before) a “Specialist/ Generalist” .

So from my experience yes you can move into a completely different technology area and be successful – but you need certain attributes to be able to do that.

You have to have some good technical background.

When I came into biotech I had no biotech domain knowledge – but I had a good understanding of physics, maths, electronics, I knew how to program.

Whilst I was doing my PHD I had to build instruments to do certain analyses. I had been part of a team that had put together a particle accelerator, I had built equipment to do a new type of radio carbon dating.

So I had been exposed to a wide range of technologies, and while I didn’t know anything about biotech other than what one might read in popular science, I was capable of understanding the technical aspects of it much more so than if I had no technical background whatsoever, I could quickly make links to concepts and ideas that I had already experience with.

The other thing I didn’t do was to try and become the specialist. I had to understand the tech enough to be able to speak to specialists, and I knew going into the area – I would need to find specialists. So going into this process of building a business in biotech, I needed to understand the area enough that specialists would take me seriously, and treat me with a some respect for having some technical capability. Plus you have to have some idea on how to run a business. I didn’t have a great experience in this, but I had run research programmes, putting together research teams, and managed quasi commercial projects at Auckland University with budgets of 10 million plus.

Finally you need to be able to drive your vision across multiple stakeholders – with different backgrounds – like financial investors, advisors, people giving their time and expertise, and the network of people that introduce you to important people needed to keep this endeavour going.

The other side other things, was that because I spent some time as a commercial manager at this biotech research company, it gave me good exposure to what were the hot commercial areas in biotech, and I had developed reasonably good networks with a wide range of different technical providers. So moving into the business I had a ready network of things I could pump into.

Summing up you need to have:

• some technical credibility,
• a good vision and be able to communicate it,
• be able to develop the networks,
• have the courage to go and do it.

As long as you have some semblance of those 4 things, I think you could get into most technology areas. You just need to find the entry into the area – and my way was working (as mentioned) for GlobalTech.

J: Do you think that other biotech startups start the same way? Or do they have some sort of specialist who is the kernel ..

MJ: So all of the ones I ran into down here did start with a specialist saying :

“I’ve got a cool idea, or technical trick, lets try and build a business around that”,

they would say:

“lets see if we can find a use or a market for this, and build apparatus around it”

And I think that situation is the genesis of the saying :

“To be successful you have to shoot the scientist”.

Its borne out of the technical guy that comes in and wants to create a business from the tech, but because of their focus, they cant or wont look at the business requirements, what is needed to take something into the market, make the pragmatic technical decisions. For example, choosing a direction that technically might be suboptimal or stupid, but be commercially optimal. So they can quite often at a certain level of the development of the company become an obstacle to future progress.

J: Yes at one time I interviewed a whole bunch of biotech startups in Switzerland – and with one exception they were all researchers who had come across an idea – and were trying to create a business around that.

The one exception was created by ex Roche executives and within a couple of years was worth over 100 million Swiss franks. They had gone out and found specialists within their network and brought them into the new company.

The other thing I wanted to cover is how important was being part of the tech hub in Dunedin.

MJ: It was incredibly important.

The reason I say that is because without the tech hub I dont think iZon would have happened.

So what happened was there was the Centre For Innovation – and its still here in Dunedin – although it has changed its purpose. The Dunedin City Council, the University and what was the government economic development unit at the time got together, because they realised that there were some really good ideas coming out of Otago university – particularly in biotech, but also software.

They decided to create a dedicated centre the CFI (Centre For Innovation), build a dedicated building for that organisation, jointly owned and funded by these three parties, with the focus for developing commercially innovative companies and spin them out, sort of like – are you familiar with Illumina?

J: Yes. [Illumina is primarily involved with making expensive equipment to do DNA sequencing and analysis].

MJ: They had the illumina model in mind. When Illumina started they had the IP around a particular aspect PCR [polymerase chain reaction – allows the amplification of segments of DNA so as to generate millions of copies aiding in analysis], and they made billions from a couple of patents.

So with the CFI, the idea was (for the benefit of the startups in the building) bring in experts, there would be a regular seminar series, bring in venture capitalists, people like Steve Ballmer from Microsoft [ its CEO at the time] – to foster networks, and idea creation, so as to really create an environment to aid the success of companies.

When we first went in there – there were [a range of] companies who were 6 months into running their businesses, to companies that were several years old and had products in the marketplace, with revenues of maybe NZD 5 million a year.

So it was possible to go and speak to CEO’s, just talk to people form a wide range of companies which were at various stages. So particularly for me, with not much commercial experience, I felt a bit like a …. “fraud” is perhaps the wrong word .. [he talks about imposter syndrome for a minute or two]…where I felt I wasn’t qualified to do this.

It was really useful to chat to people and find that everyone was in the same boat.

The vast majority of the time – you know that old saying that goes something like “The best laid plan doesn’t survive the first clash of battle” ? So you go into it with good intentions but the second the rubber meets the road, you need to pretty quickly evolve, because you are going to realise that a bunch of your assumptions were invalid.

So the great thing about the hub was that it was really useful you could speak to a wide range of people, and get a real world idea of the dark under belly of reality. It was also massively useful to develop networks and contacts. The other side of it, was, once we were in there, was the associated reputational kudos. The fact that we were in the centre opened doors, created opportunities. It mad it much easier to get government grants, there were American investors coming through and so on.

J: Was the technology in the hub primarily biotech?

MJ: There was actually quite a big range of technologies while we were there .

There were quite a few biotech and medtech companies, we were better categorised as nanotech.

There were electronics companies – one of which has grown to be really big now – Kamahi – they have about 50 engineers now. They do a huge amount of real high end electronics development.

Pacific Edge Biotech [cancer diagnostics] was there… Blis [Probiotics dev] was there, there were a couple of software development companies PocketSmith [time management tools], RocketLabs [games]. Isotrace was there as well [analysis for food quality].

J: You once told me a figure of the commercial value of all the companies that came out of the hub.

MJ: Ahh – I cant remember – but just between ADI Instruments, Pebble, PocketSmith, Wick, Animation Research Limited – they would be worth 2-3 billion dollars just by themselves – and they were around just at the same time as ourselves.

J: So now the hub – the CFI, its not really in the same form that it was.. Did the success of all the companies spinning out of the hub have a deleterious effect on the CFI? Or was it something random that happened to change its focus such that it hasn’t had as many successful commercial companies coming out of it?

MJ: Basically what happened was that the university was growing – they didn’t have enough real estate or facilities so it become part of the university land grab.

The CFI still exits – but its purely university based, it doesn’t have the city council or [local] government EDU [economic development unit] involved in it any more. A large part of it is taken up with the Otago innovation limited which ostensibly commercialises university innovations, and of naturally their focus is doing whatever it is that keeps them employed – so now there are few successful commercial outcomes from the CFI.

J: Ok, but there are other similar hubs in NZ?

MJ: There are, and they are starting to form up. Interestingly some of the big successes from the hub are setting up their own hubs in the area (eg Kamahi, Rocket labs).

So now a particular part of Dunedin is becoming known for electronics and software innovation – and people are moving there for that, which is kind of cool.

What really kicks these institutions or hubs off is the involvement of the government economic development units.

At the early stages of startup you are going to lose money, so getting some support, even if its for something as minimal as doing trade trips overseas.. The New Zealand government promotes New Zealand by taking home grown companies overseas to trade shows, and we got to go along on several shows, Even though they wouldn’t pay us money, they paid for our air tickets and for booths at the show. Trying to do that when you are a two or three man show is really difficult financially and logistically. If you can get involved with those its really good.

J: So my last question is based around the perception that here in Australia we tend to focus on low hanging fruit, startups are often software based, doing stuff that anyone else in the world can do, and they are easily copied, they have little that is sustainably differentiable. It feels like this focus (on low hanging fruit) is not a sustainable way to create innovation.

MJ: I would agree.

J: (rant continues) … at least thats the perception – one hears about Atlassian, or some fintech and blockchain companies but not much else.

When one looks at NZ, you see large numbers of biotech companies, rocket engine companies, nanotech in your case, I feel like we’ve come short over here.

I assume that the success of the CFI came about because it used the capability or competencies in technology that aren’t low hanging fruit – that aren’t easily copied.

Eg downloading the latest SDK (software development kit) for something and then 2 weeks later launch a blockchain based startup that tracks ice creams.

MJ: I would agree with you, the success of CFI – when it was really successful – was a result of of the willingness of the government economic development unit (and other partners) to invest money to develop and support high tech innovative ideas.

There was a government initiative at the time to try and transform NZ into a knowledge economy – so rather than focusing on pure low hanging fruit – you are developing high value knowledge based value added endeavours.

I would agree with the importance of that.

This knowledge economy is based around high levels of expertise. But that expertise takes time to develop – it requires a critical mass. You know how economic evolution is driven by specialisation? If you can have within these hubs different specialists, and ways can be found to integrate specialities that haven’t yet before been integrated, thats where the real benefit is.

So for example we are working in nanotech and Isotrace (for example) has absolutely nothing to do with what we do technically. However speaking with them and finding out how they deal with issues from access to market, financial structures, or how a particular piece of kit works for delivering super cooled fluids to a reaction crucible is very helpful. So in this example they have a lot of expertise in particular types of fluid manipulation, and when we are dealing with something even very vaguely related they can come in and say

“Hey, this is how you might want to look a it, and by the way this engineering company down the road has spent 5 years building the expertise to work on our stuff – they might be able to do something similar for you”.

Thats the other side of it, when you get this critical mass of people doing all of these sorts of things – to do nanotech you need engineers that can build stuff appropriately – you cant just go down the road and expect your local engineer to be able to have the kit and materials to create stuff to the tolerances required. The more people that are doing these sorts of different things… We’ve got now (in Dunedin) robotics manufacturing – Scott’s Technologies for example – they make robotic kit for people all over the world. They are going gangbusters at the moment.

They were small and started churning out standard engineering big coarse iron parts when I started at Global Technologies 15 years ago. They are now super high tech robotics manufacturing company. And its off the back of working with these new innovative technology companies, they develop the expertise in parallel. They can provide engineering support for a wide range of innovative companies.

Going for your low hanging fruit is not going to develop in the community all of the highly specialist skills required to support those high tech companies, its going to restrict you to the low hanging fruit.

Start developing the critical mass on how to do these things. How to develop micro fluidics, how to do precision engineering, automation, how to do all these sorts of things.

It’s sort of like silicon valley right? You have a critical mass of people with expertise who knew how to dope silicon, can do nano lithography – so if you want to build a company to do something similar you can get access that skill base really easy. If you are sitting in Dunedin and the closest company that can deliver a component that you need is in Munich – it comes incredibly difficult to build your tech.

Again I think thats why hubs are useful and getting back to your point on low hanging fruit – I think thats why going for highly innovative stuff is important because it builds up that experience base that broad infrastructural base for being able to do innovative stuff, but really does need society to be in behind it – its not going to work with one private enterprise doing their thing – because they will just focus on what they need, and thats not going to support other developments.

J: I think we will finish there – thank you!

MJ: No worries.