Tech Startups are expensive

by Ryan PawellMay 11, 2014

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Not long ago, when speaking to someone with plenty of experience in technology transfer he emphasized the elegance of tech startups – low assets.

He probably still thinks tech startups are cheap and I respectfully disagree.

The opposite of a tech startup might be one based on hard goods or hard science. For the purpose of this article, we will compare two fictitious early-stage startups TechStart and HardScience.

According to Staff.com, the cost of running TechStart in San Francisco – a designer, developer and office space is $263,088.

Credit - http://Staff.com

Credit – http://Staff.com

 

This is $81,000 for the developer, $79,008 for the designer, $22,080 for the office along with an additional $81,000 for other stuff.

Assume both startups are in the idea phase. Over the course of the year TechStart needs to build their MVP and generate users whilst HardScience needs to generate enough data to file a prototype-backed provisional.

In 1999, just under half the articles published in Science, a decent scientific journal were authored by postdocs and these scientists earn about $36,000.

Moreover, in San Francisco, the cost of a dedicated lab bench, a couple postdocs, professional intellectual property searching and provisional filing works out to about $94,000 ($12,000 + 2 * $36,000 + $10,000) or for the bells and whistles lab and office space this is closer to $132,000.

Thus, leaving $131,088 for bits of equipment, consumables, insurance, pizza and beer along with an epic end of year (or end of startup) party. This is roughly $11,000 per month for the extra stuff and many academic labs spend less per year.

But what about all that fancy lab equipment that costs millions of dollars? Do not worry about it. A 3D printer that used to cost more than a hundred thousand is about to cost a few hundred.

Services like scienceexchange.com can be used to outsource experiments to verified labs or, if you are the DIY type, equipment time can be rented from a nearby research institute for reasonable hourly rate. No dramas.

Tech startups are expensive.

ryan-pawell-290x2901Ryan Pawell is  PhD candidate at the University of NSW and is developing an affordable disposable microfluidic chip to bring down the cost of delivering gene therapy to HIV patients.

He received his BSci, Mechanical Engineering at the University of California, Santa Barbara and led a team of engineering students to prototype a tool for anterior cervical discectomy and fusion.

He also worked in R&D at Inogen developing a portable oxygen concentrator for the treatment of chronic obstructive pulmonary disease.

You can connect with Ryan here linkedin.com/in/rpawell  and see more about his work in the Youtube video at the end of the article

Ryan Pawell is  PhD candidate at the University of NSW and is developing an affordable disposable microfluidic chip to bring down the cost of delivering gene therapy to HIV patients.

He received his BSci, Mechanical Engineering at the University of California, Santa Barbara and led a team of engineering students to prototype a tool for anterior cervical discectomy and fusion.

He also worked in R&D at Inogen developing a portable oxygen concentrator for the treatment of chronic obstructive pulmonary disease.

You can connect with Ryan here linkedin.com/in/rpawell  and see more about his work in the Youtube video at the end of the article

 

Photo by snre

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About The Author
Ryan Pawell
Ryan Pawell
Ryan Pawell is an entrepreneur, engineer, inventor and scientist. He completed a Bachelors of Science at the University of California, Santa Barbara while working with NuVasive to a tool for spinal surgery and developing portable oxygen concentrators obstructive lung disorders with Inogen. Ryan is completing a PhD at the University of New South Wales developing disposable microfluidic devices for processing cells and was the youngest graduate NSW Health & ATP Innovations Ignition Medical program. He also founder of a venture-backed startup developing a new class of therapeutics.

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