Melinda Richter may take no for an answer sometimes, but you’d better have a good reason.
Ms. Richter heads Johnson & Johnson Innovation Labs (JLABS) a unique incubator for medical technology startups that provides “large company” resources, including funding, to boost the success rate of fledgling companies. JLABS boasts an incredible 80% success rate — 8 of 10 firms they’ve funded are still in business six years later. In case you’re thinking that it’s merely a lucky streak for JLABS, I assure you it isn’t. They’ve backed 400 companies, which means they’ve gone 320/400. Show me any investment fund, VC or private equity group with that success rate at that volume of investments.
Richter doesn’t even have a science background. Her career prior to JLABS was focused on marketing/business development. She worked with telecoms as well as life sciences firms. Through that work, she developed a keen ability to raise capital, something vital to her current role. She also developed — or perhaps was born with — a certain “superpower,” something I’ll discuss later in this post.
So, how did Ms. Richter find her way from the world of telecom sales to the world of medical science?
She was bitten by the bug. Literally. While on business in China, Ms. Richter was bitten by a tick that carried a disease known as scrub typhus. The bite left her with an enlarged heart, as well as meningitis. Doctors were unsure how to treat the condition at first, leaving Richter fearing death. In those uncertain hours Ms. Richter made a promise to herself: If she survived, she’d dedicate her business pursuits to improving the rate at which innovative scientific research could be translated into meaningful patient outcomes. Of course, she did survive. Shortly after winning her battle with scrub typhus Richter formed Prescience International. a consulting firm that helped early-stage medical industry companies streamline the process for funding, clearances, and sales. Richter parlayed the success of Prescience into her current role at JLABS, even though she didn’t carry the ubiquitous Ph.D. title into her new position. This was more than a shift of career; it was a shift of life purpose. Sometimes it takes a near death experience to shift a life.
JLABS itself was borne out of J&J’s (Johnson & Johnson’s) desire to elevate the quality of its own R&D process. However, as Ms. Richter frequently points out, JLABS does not make the startups it works with into captive organizations under the J&J banner. Richter has a much larger ambition, one that J&J supports: to improve the human condition by ensuring that companies with innovative technologies get through the long, expensive journey from concept to product as efficiently as possible so that patients have faster access to the best available technology. The fact that JLABS-spawned companies have an 80% success rate speaks to the purpose-driven rigor Ms. Richter and her team brings to their work.
Readers of this blog will recall that a major purpose of Intelliversity is to increase the percentage of worthy companies that receive funding, by virtue of educating investors AND Vision Masters (CEOs and Founders) about the science of success, i.e. the true factors that lead to success or failure based on evidence. JLABS is a testament to the fact that proper selection of companies for investment can be a data-driven, scientific process, rather than a random crap shoot. I know that you Vision Masters out there share this belief. So, it’s useful to explore exactly how Ms. Richter selects the companies with whom she chooses to work.
Here’s how Ms. Richter selects companies. Consistent with what Intelliversity has discovered, you won’t be surprised to learn that it comes down to people — she backs teams with specific characteristics. Typically, by her standards, they share one of the following characteristics. Either they’re incredibly experienced or they’re incredibly passionate. A few may be both. The important point is that she backs the right people, more than the right products.
Richter arrives at these investment decisions by assessing her “3 P’s” — Problem-solving, persistence, people. She favors strong teams over lone rangers, even if their experience level isn’t high. It is their willingness to be mentored, their appetite for problem-solving, their persistent drive towards measurable goals that Richter looks for. It’s the team that matters not so much the technology.
San Diego-based Arcturus Therapeutics is a prime example. The Company’s co-founders left their day jobs in biotech to found their own business. As Ms. Richter describes it in an article in Eye For Pharma, “They were not proven entrepreneurs, but they were bright and passionate young men who wanted to make a difference. We set them up for coaching and offered them a no-strings research collaboration.” The company is now a rising leader in RNAi technologies for the treatment of Hepatitis B and rare orphan diseases. Today, Arcturus boasts two billion dollars worth of business deals. They accomplished this in two years. These are not visionaries. They are Vision Masters.
Two years! In an industry with 12-year development/approval/marketing cycles. This is the measure of success for JLABS — adding critical resources, at the critical times, to young companies that otherwise wouldn’t have them, so timelines are reduced, failure is mitigated, life-saving products/drugs get to market faster. The identify potential Vision Masters and then support them with resources. This is Melinda’s vision.
Earlier I mentioned that Melinda Richter has a “superpower” that she attributes to a large measure of her success in picking winners. In her own words, that power “is to take in a bunch of information and see patterns and trends that other people may not see.” Needless to say, this is a highly useful superpower. As stated earlier, she applies her superpower in assessing which teams have what it takes to win. As someone who does this every day myself, I know how challenging it is to be objective about team assessment. She applied this power to the development of the unique JLABS approach, which is aimed at getting promising ventures across the wide chasm from concept to product-in-the-market.
Another Melinda Richter practice that’s fascinating to me is the unique assistance JLABS provides to the companies by working with both Vision Master as well as Execution Master. The mentoring from experienced J&J executives and R&D scientists is certainly beneficial to Vision Masters. The critical assistance in the realm of legal, regulatory, FDA clearance, plus fundraising maps to essential duties of Execution Masters (the Vision Master’s CEO or COO). Therefore, both parts of an effective senior management team are assisted in mission-critical areas. By strengthening the capabilities of Vision Masters as well as Execution Masters, the JLABS approach makes great teams into extraordinary teams.
This is precisely what Intelliversity faculty and I do in our work with entrepreneurial teams, though we aren’t limited to the medical space. Our comprehensive work with select senior managers is designed to shorten the path to funding by sharpening all of the critical skills managers need to succeed in an extremely competitive environment. I encourage every Vision Master or Execution Master to find, to utilize, to profit from purposeful, committed mentorships like JLABS or the resources that Intelliversity can provide. The odds are against you, but they can be evened out when you have the right support.
For her part, Ms. Richter cites simple curiosity as a key component to her success. She wants to know. She wants to understand. She wants to make a measurable difference in people’s well being. So she creates a space where innovators are honored but encouraged to do more, be more, get results. Her team provides critical guidance at every step, bridging the experience gaps in young teams. The result is 80% success. This is a real, measurable impact on millions of lives.
Given the above, here’s a question to ponder: Is Melinda Richter a Vision Master or an Execution Master herself? There are clues here. Give me your opinion in comments to this post.
In conclusion, imagine a world where 80% of worthy ventures in every field of endeavor are mentored, funded, then find lasting success. That’s the world Melinda Richter is making real. It’s the world I’m working for every day as well. I know its the world you’re committed to.
Let’s make it a reality.
Key Takeaways:
- Melinda Richter is the driving force behind Johnson & Johnson Innovation Labs (JLABS).
- In six years JLABS has mentored more than 400 companies — 80% of them got traction.
- Ms. Richter’s “Super Power” is in finding meaningful trends/patterns in fields of information.
- She uses it to help select worthy innovative teams in which to invest time, money, resources.
- Using this approach she is getting critical new technology to people far faster than usual.
- She is also proving that a scientific approach to investment works, with the result that more worthy companies are funded.
- Intelliversity shares that commitment in the work we do.
- Innovative teams are encouraged to find good mentors or incubators to provide mission-critical support and increase their chances for long-term success.