Why do we have hub cities?

[Ryan Faisal]

[quote="RSD"]I think there are a handful of reasons that make a pretty solid rationale for locating or re-locating to a biotech hub.

1. Access to venture capital. VC money is concentrated, so companies go to where the money is. Real estate costs and even cost of living/salary costs don't make up that much of a biotech's budget.

2. Access to talent. Biotech hubs tend to have lots of academic research centers and big pharma, which means access to both entry level and experienced talent. If I take a job at the only biotech in Omaha and it fails, I have to relocate again. If my startup in Boston fails there is a significant job market for me.

3. Culture. This ties in with competition for talent. In places where there are no alternative workplaces and relatively few candidates (compared to a Boston or SF), the culture can get stale. I think a bit of turnover and competition makes for a more innovative, driven to succeed culture as opposed to the punch the clock/I've gotten comfortable here and there is no place else in town culture. I think local networking opportunities with other biotech and pharma companies, employees, and academics also helps.[/quote]
RSD, you made a valid point that clearly tell why we have hub cities and how it works. Really great thread. Thanks.

[Nate W.]

Thanks Nate.

I'm trying hard to make my answer something more than "network, network" but in DX's case that advice (classic as it is) comes across as sensible and correct. There ARE some other options. I'm trying to think of those right now, just as Abby is.

Colorado is a good example of one of the problems, not a solution. That is, it's a great State to live in for reasons that have nothing to do with work. You enjoy your life when you live there -- you have options outdoors to hike, climb, bike, ski and everything under the sun. It's the kind of place where companies can build up a presence (Amgen) and then lay people off, and the entire group of laid off people start driving cabs instead of going elsewhere and relocating for work. I don't have a quick answer. I'll talk to some experts and incorporate that advice into my column,

Dave

We talk about hub and non-hub, but alot of this conversation also applies to hub-Areas were supply, outweights demand - you can find similar situations of Folks keeping thier heads down, making those trade-Offs in interest of their outside work life (i.e. Family). Those as noted, risks of not finding a Job is lower, though the risk still exists - I can think of one other advice than Networking.... be entrepreneural and start a Company servicing an outsourced Need that non-hub Company may have. i.e. a medical writing Service? or a supply chain logistics Service, or i don't know ..blue sky thinking here - with the aim to leverage you contacts in that Company to give you Business. Enter Networking again.

DX

DX, You have to consider that most scientists in the life sciences are trained or received their degrees from Universities in non-hub locations. Furthermore, they aren't exactly rolling in the dough in these academic gigs. Networking from a long distance can be quite difficult (unlike the MBA or JD graduate in large non-hub like Atlanta or Dallas) and most academics don't want to see their best students or lab members bolt for industry. Of note, some academics will even try to block such a move with a bad reference (based on inaccurate statements) or hold-up their graduation with excessive BS.

When the supply outstrips the demand in a non-hub, it becomes quite difficult to find a job and the people in the area that hold a job in the biotech field become quite protective of their jobs, even become down right surly. I have seen just about every conceivable dysfunctional behavior when networking locally; jealously, narcissism, an unwillingness to help others, etc. Based on my work in other fields (medical device and legal) and talking with biotech professionals in hub cities, I know this problem is not with me, my behavior, or ability to network; it is their (i.e. some local biotech professionals) problem of job insecurity. Try networking with a local PharmD that is a MSL; you will get a cold shoulder and a statement that I don't think PhDs are qualified for this job; coupled with a smug attitude that they are always right (even when they are wrong and can be contradicted by a more qualified MSL in a hub city). Try asking a local mid-level biotech manager about a possible opening and what they would consider for the position. I get some of the most inconsiderate reactions when I network with local biotech professionals (vs hub professionals and local professionals in other fields). However, when I contact practically strangers in a hub city like Boston, I get a far more gracious response and/or willingness to help.

Starting a consulting firm or small business is often very difficult to do and you must have capital and some influential contacts. Scientists in the life sciences are considerably specialized. Further, they don't have the best understanding of business and finance. DX, this is much more difficult to do that it sounds and it might be easier to reeducate yourself for another profession that fits the local economy. I do agree with you if you stay in a non-hub, you must think outside the box in terms of transferable skills and network like a madman.

PS: I know two PhDs in analytical chemistry with substantial industry experience who are teaching at community colleges for wages that are less than minimum wage because they couldn't find anything more suitable given their background. This is sad. They tried to start their own business with SBIR grants and failed. One has a PhD from Harvard.

[MDM]

I'd agree with a lot of the reasons previously posted about factors that create hub cities. Having spent some time in the Bay Area I've witnessed what an amazing environment it is for collaboration. Lots of VC capital and firms to pitch to, several top-notch research institutions and hospitals to run clinical studies, a variety of small biotechs and everything up to large pharma, as well as several life science reagents and equipment companies that are developing all the technologies and reagents that fill all of our labs.

The trend I'm noticing is that large pharma is basically consolidating all the research back to the large hubs. Research Triangle Park used to have several large pharma companies with Research sites there. They've all pulled out Research operations and have realized that manufacturing is a better prospect in some of these cheaper locales. The RTP area has gone to more of manufacturing and CROs specializing in carrying out clinical trials. Colorado has been kind of the same story. Every time a company does well, they get bought out and move to one of the coasts, but some companies have moved manufacturing operations there.

The kinds of companies that seem to do okay in non-hub cities are CROs and other companies that are life science based and serve a niche to supporting biotech and pharma (life science reagents/technologies). However, any of those companies with a good product are prone to being swallowed up by larger companies on the coasts.

The Los Angeles/Orange County area is a bit of a conundrum to me. It ticks most of the boxes for what you'd need for a hub and is not that different from San Diego and the Bay Area. For some reason, this area became a hub for the medical device industry rather than large pharma/biotech.

[D.X.]

Well, on the Topic of hub cities - if you want to go way back to the origins of the pharmaceutical industry - look no further than...Dye Industry/ Chemical companies!

And where were Dye Companies located way back when? On Rivers! So you start looking at the humble origins of Bayer, Merck, CIBA (now Novartis), etc. were Dye Companies back then it was all linked to textiles and rapid trade routes before fully established Train Networks. Among the first "drugs" manufactured was from chemist working in the Dye industry who started to see linkage of the chemicals used to make Dyes to some pharmacology - i.e. antiseptics and the like and there in start the Revolution when the started testing and developing compounds that had their origins as Dyes. Go figure.

Natrually chemical companies, also near rivers started to expand in to medicinals and well the early start to then hub cities.

My be worthwhile to go do some history on the industry - neat stuff.

DX

[Dan R]

Part of it has to do with target population. I can online imagine the other answers are for political reasons or economics.

[Dave Jensen]

Nate and others . . . Sorry that I couldn't get the next Tooling Up article about this topic after all. I started writing it and it was turning out to be just another networking article, and we've done enough of those to choke a horse. So, I switched gears and my next article later this week is about the "Why should we hire you?" question. Sorry Nate. That topic of writing about people in biotech in non-biotech regions is a tricky one.

Dave

[Parker]

I think there are a handful of reasons that make a pretty solid rationale for locating or re-locating to a biotech hub.

1. Access to venture capital. VC money is concentrated, so companies go to where the money is. Real estate costs and even cost of living/salary costs don't make up that much of a biotech's budget.

2. Access to talent. Biotech hubs tend to have lots of academic research centers and big pharma, which means access to both entry level and experienced talent. If I take a job at the only biotech in Omaha and it fails, I have to relocate again. If my startup in Boston fails there is a significant job market for me.

3. Culture. This ties in with competition for talent. In places where there are no alternative workplaces and relatively few candidates (compared to a Boston or SF), the culture can get stale. I think a bit of turnover and competition makes for a more innovative, driven to succeed culture as opposed to the punch the clock/I've gotten comfortable here and there is no place else in town culture. I think local networking opportunities with other biotech and pharma companies, employees, and academics also helps.

Excellent Analysis. I would say culture is the #1 reason, then access to talent and access to VC money. The stagnate attitude of "I've gotten comfortable here and there is nowhere else to go" is why mediocrity thrives in these places and why so many companies in non-hubs either fail or move. Not everyone who stays in a non-hub fits into that category. Some people stay for personal reasons. When you are in a non-hub city, it's an accomplishment just to have a job in the field that you studied for. You don't need to try that hard to be the best, just good enough to land the job and not get fired. There is not that much turn over so you don't need to try that hard because your boss and co-workers are probably coasting too. And people don't like it when you take your job too seriously and try too hard. And you put enough of those people in one place and it's a recipe for failure, even if not everyone has that attitude. But living in a hub city has its own draw backs. Those places are not cheap to live in, you would probably be away from your family and people can be more uptight.

[Parker]

Nate and others . . . Sorry that I couldn't get the next Tooling Up article about this topic after all. I started writing it and it was turning out to be just another networking article, and we've done enough of those to choke a horse. So, I switched gears and my next article later this week is about the "Why should we hire you?" question. Sorry Nate. That topic of writing about people in biotech in non-biotech regions is a tricky one.

Dave

Dave, this is a great topic (as is "why should we hire you". I think there is something of value you can provide to readers. How about an article on how to effectively network your way into a hub city from a non-hub city? As was mentioned by others, I find that the networking culture in non-hub cities is different than hub cities. How does this effect networking if you are used to non-hub culture where people tend to be stand-offish, protective of their turf and generally not helpful? I find that people in non-hub cities are used to treading carefully when they are networking. They beat around the bush and are not forward with what they want for fear of offending the person they are trying to network with or coming across as too pushy. It's understandable, jobs are scarce and there are too many people asking for their help than they can possibly help. I've seen it first hand. How is this culture different than networking in a hub city? How does one use LinkedIn and other tools to effectively network from afar? Despite there being more jobs in hub cities, chances are you won't get one the minute you land there and those hub cities tend to be very expensive. So most people will try to land a job first before they attempt to move to a city like Boston or San Fran. Networking from afar can be difficult. What are some effective strategies to make it a success? Are there some tools or tricks that maybe most people aren't aware of? Conferences are great for networking but they don't always pan out and sometimes it's not possible to pay for more than one conference per year out of pocket (since most employers won't pay for your job hunt). The types of jobs that are available may also be different. If you are in a non-hub, you may be in a lower position than your background and experience suggests simply because there is not much else available and there is too much competition. Or you may be in a higher position due to a shortage of talent (less likely but still possible). How do you manage your own expectations? Should I expect to all of a sudden jump up in salary and title? Or should I expect to continue where I was and slowly go up the food chain? What is the norm?

Anyways I threw a long list of questions out there as a way to say that advice doesn't have to stop at network, network, network. How you network and strategize matters. Some practical advice from someone like you could be very useful for those looking to transition from a non-hub city to a hub city.