The Financial Origins of HappiLabs
A message from our CEO, Tom Ruginis....HappiLabs works with a lot of biotechs in Silicon Valley where funding usually goes in a standard pattern: Seed funding (a few $100k) to Series A (in the $5-20 million range) and onto Series B. It's been an exciting few years to watch founders with innovative ideas raise money and turn the ideas into a product.If you've watched the show Silicon Valley, you have some kind of minimal understanding.But don't think that's the best or only way to start a business. As in the case of HappiLabs, there are other routes.
Boot strapping a startup
In 2013, my neurons were building the connections that ultimately would figure out a solution to this problem. I had no money and an "uninvestable idea."As a PhD dropout from a normal middle class family, I had to find creative ways to boot strap. If you are unfamiliar with the term:
Bootstrap is a situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.
The costs were minimal--parking, cups of coffee for some scientists, and a printer.In the beginning, I used my connections from grad school and elsewhere to collect data about the price of lab supplies. This data turned into a "report" comparing the prices of nitrile gloves. I knew of a lab paying $120/case and I knew a few labs paying $70/case for the same gloves. Therefore, I provided the report to that $120/case lab. They were buying about 12 cases per year, saving them $600.I asked the PI for $10 for a "subscription" to the report and he gave it to me.
HappiLabs was in business!
Once I figured out I was on to something, it was clear that I needed to hire help. The data collection was difficult and it wouldn't be long before I exhausted my network. So I took my $10, went to the casino and parlayed that into $10,000.....j/k.I networked, studied entrepreneurship, and put together a short presentation for friends and family. I told them I have this idea, it'll change the world, and I need $20,000 to get started. 2 uncles, 1 aunt, and 1 friend later, I cashed four $5,000 checks.Let's mention one of my favorite pieces of advice from the entrepreneur community in Chicago:
Tell your family that they should expect to lose their money.
It's a looooooooong shot to get your money back, but by being honest and transparent, it actually made the process easier. We've raised $43,000 total since the beginning.
HappiLabs hired part-timers first, which we called microjobbers. They included a grad student (whose PI had abandon her), a former research professor (who had lost funding), and 3 undergrads. We worked in coffee shops or my living room compiling pricing and quality data about lab supplies.We were surprised by the inconsistency of semantics about quality and the documentation that manufacturers provide.The HappiLabs reports grew from 1-pagers to 8-pages of useful info, including fun tips from seasoned PCR'ers to the less experienced scientists:
Now we started charging $500 for an annual subscription. The inspirations for the reports came from Consumer Reports and Angie's List. If you 'd like a copy of one of our original reports, CONTACT US.Two labs at University of IL-Chicago and one at Northwestern signed up. $1,500 in income in 2013. Yay! But it was tough. Data collection was tedious and time consuming, and it was hard to sell as a magazine subscription.One of the PI's gave me great advice:
Tom, the data you have here is very helpful, but it's still a pain in the ass to place an order. I have to ask one of my students or postdocs to do it. Sales reps are always calling, and it's distracting. Can you handle this job?
Lightbulb! The Virtual Lab Manager.I hired an extra person to start applying for an NIH grant that seemed perfect for us, but soon we realized we had no chance of winning. The $20,000 became $10,000, then $5,000, then $1,000.
And lucky for us,
we found Ethan Perlstein tweeting about his new company and needing help with setting up the lab.I jumped on a plane to Silicon Valley, met Ethan, provided a detailed description of the service, and he was in. The Virtual Lab Manager was born. He gave me a $3200 check (2014 income doubled 2013!), I went home and we began calling Fisher, Sigma, E&K Scientific, Amazon, etc. And now look at Perlara (formerly Perlstein Lab).
The rest is history.
I think about fundraising in Silicon Valley but like the idea that I'm in full control of HappiLabs. I fear investors might distract us from our mission, which is the most important part:
To improve the happiness of scientists and the quality of their research
HappiTom.