Many entrepreneurs have just one big idea. They then go on to create highly successful businesses based around this one product line that oftentimes can generate huge sums of money. However, this leaves them exposed to a severe lack of diversification in their revenue streams. Most modern startups suffer from this problem. Some of the largest tech companies in the world, such as Facebook and Google, have struggled mightily to diversify into other profitable business lines. This leaves them exposed to the threats of disruptive technologies or market downturns in their primary area of expertise.
The same can be said for many newer biotech and pharmaceutical firms. The ability to successfully diversify a portfolio into a wide array of business lines is among the most important things that a CEO of a modern biotech firm can do. This not only insulates from shocks to the primary market, it also enables for cross-product synergies to take place within the firm, developing multiple lines of deep expertise and the ability to weather any storm that presents itself in any one of the company’s diverse markets.
Of course, all of this is far easier said than done. Many firms are simply unable to successfully diversify into multiple productive and profitable business lines, making great sums of money until they suddenly, one day, don’t. However, this is not a problem for Seattle Genetics, one of the fastest growing biotech startups in the country today.
Founded by star researcher Clay Siegall, Seattle Genetics has quickly become one of the most important biotech firms in the cancer research space. However, the firm started off with the sole focus of developing a particular form of targeted cancer therapy drugs known as antibody drug conjugates. Even though this is the firm’s core expertise, Dr. Siegall quickly moved to diversify the product revenue stream into a wide array of profitable business lines. Today, the company has significant sources of revenues coming from direct drug sales, intellectual property licensing and even the development of new processes for the creation of biomolecular precursors.
This ensures that Seattle Genetics will have strong performance and growth into the distant future.