Hire a Scientist or Two Before Your Biotechnology Startup Engages a CRO
Few new biotechnology startups carry out their initial work in house. Indeed, such new companies probably don't yet possess the laboratory, equipment, and staff required top carry out that work themselves. If the company emerged directly from a research group, led by a scientist-entrepreneur, then the founders may work with a university laboratory initially, even though it is painfully expensive to work with universities. Startups founded by non-scientists, licensing life science intellectual property from the universities or picking up abandoned work from the public domain, will tend to hire one or more contract research organizations (CROs) for the early work of replication and exploration. If carried out sensibly, the use of a CRO offers a better risk and cost profile than the alternative of building and staffing a laboratory, given that the odds of failure are always high in the early days.
Non-scientific biotech startup founders usually have enough life science knowledge to be a danger to themselves. By this I mean that they can read papers and set strategic direction, but these skills are far removed from the hands-on experience needed to lead teams of scientists and lab technicians. The fine details at the interface of theory and praxis are important. But that point is all too easy to forget in the enthusiasm of the moment. There is the temptation to set forth and rapidly engage a CRO with the idea that the CRO staff can provide the scientific knowledge needed for the early proof of concept stages ... and this is where founders get themselves into trouble. This just doesn't work, while all along the way to the inevitable failure it seems plausible to a non-scientist that it can work. It is very likely that all of the funds assigned to a CRO in this scenario will be wasted.
CROs are, in general, perfectly happy to accept funds, carry out a task, and then shrug apologetically when it fails. If you want to try again, that will be another invoice. Some CROs are better than others in terms of providing scientific review of proposed studies, but in all cases the onus is on the customer to provide study designs that will function as intended. A non-scientist cannot review lab notes sufficiently well to understand why a protocol fails. A non-scientist cannot identify subtle flaws in a study in advance. A non-scientist cannot troubleshoot a low-level assay with CRO staff in order to determine whether or not they carried it out correctly. Few projects in the life sciences are so simple and straightforward as to avoid these sorts of issues.
Thus all CRO relationships must involve a scientist on your side: an individual with specific domain knowledge who can vet the CRO and their activities, manage the design of studies, and stay on top of the unexpected technical issues that always arise. Always hire the first scientist or two before engaging a CRO. Doing otherwise is just throwing away money and time.