The Financial Origins of HappiLabs

A message from our CEO, Tom Ruginis….

HappiLabs works with a lot of biotechs in Silicon Valley where funding usually goes in a standard pattern: Seed funding (a few $100k) to Series A (in the $5-20 million range) and onto Series B. It’s been an exciting few years to watch founders with innovative ideas raise money and turn the ideas into a product.

If you’ve watched the show Silicon Valley, you have some kind of minimal understanding.

But don’t think that’s the best or only way to start a business. As in the case of HappiLabs, there are other routes.

Boot strapping a startup

In 2013, my neurons were building the connections that ultimately would figure out a solution to this problem. I had no money and an “uninvestable idea.”

As a PhD dropout from a normal middle class family, I had to find creative ways to boot strap. If you are unfamiliar with the term:

Bootstrap is a situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.

The costs were minimal–parking, cups of coffee for some scientists, and a printer.

In the beginning, I used my connections from grad school and elsewhere to collect data about the price of lab supplies. This data turned into a “report” comparing the prices of nitrile gloves. I knew of a lab paying $120/case and I knew a few labs paying $70/case for the same gloves. Therefore, I provided the report to that $120/case lab. They were buying about 12 cases per year, saving them $600.

I asked the PI for $10 for a “subscription” to the report and he gave it to me.

HappiLabs was in business!

Once I figured out I was on to something, it was clear that I needed to hire help. The data collection was difficult and it wouldn’t be long before I exhausted my network. So I took my $10, went to the casino and parlayed that into $10,000…..j/k.

I networked, studied entrepreneurship, and put together a short presentation for friends and family. I told them I have this idea, it’ll change the world, and I need $20,000 to get started. 2 uncles, 1 aunt, and 1 friend later, I cashed four $5,000 checks.

Let’s mention one of my favorite pieces of advice from the entrepreneur community in Chicago:

Tell your family that they should expect to lose their money.

It’s a looooooooong shot to get your money back, but by being honest and transparent, it actually made the process easier. We’ve raised $43,000 total since the beginning.

Virtual Lab Manager made via microjobs

HappiLabs hired part-timers first, which we called microjobbers. They included a grad student (whose PI had abandon her), a former research professor (who had lost funding), and 3 undergrads. We worked in coffee shops or my living room compiling pricing and quality data about lab supplies.

We were surprised by the inconsistency of semantics about quality and the documentation that manufacturers provide.

The HappiLabs reports grew from 1-pagers to 8-pages of useful info, including fun tips from seasoned PCR’ers to the less experienced scientists:

HappiLabs first report

Now we started charging $500 for an annual subscription. The inspirations for the reports came from Consumer Reports and Angie’s List. If you ‘d like a copy of one of our original reports, CONTACT US.

Two labs at University of IL-Chicago and one at Northwestern signed up. $1,500 in income in 2013. Yay! But it was tough. Data collection was tedious and time consuming, and it was hard to sell as a magazine subscription.

One of the PI’s gave me great advice:

Tom, the data you have here is very helpful, but it’s still a pain in the ass to place an order. I have to ask one of my students or postdocs to do it. Sales reps are always calling, and it’s distracting. Can you handle this job?

Lightbulb! The Virtual Lab Manager.

I hired an extra person to start applying for an NIH grant that seemed perfect for us, but soon we realized we had no chance of winning. The $20,000 became $10,000, then $5,000, then $1,000.

And lucky for us,

we found Ethan Perlstein tweeting about his new company and needing help with setting up the lab.

I jumped on a plane to Silicon Valley, met Ethan, provided a detailed description of the service, and he was in. The Virtual Lab Manager was born. He gave me a $3200 check (2014 income doubled 2013!), I went home and we began calling Fisher, Sigma, E&K Scientific, Amazon, etc. And now look at Perlstein Lab.

The rest is history.

I think about fundraising in Silicon Valley but like the idea that I’m in full control of HappiLabs. I fear investors might distract us from our mission, which is the most important part:

To improve the happiness of scientists and the quality of their research

HappiTom.

 

 

Purchasing Standards for Suppliers

Supplier standards for HappiLabs virtual lab managers

This post is for suppliers.

We want to help you help HappiLabs help scientists.

HappiLabs is developing an evolving set of standards to help our Virtual Lab Managers decide which suppliers to buy from so that scientists get what they want, at a fair price, quickly. Keeping their experiments on schedule, within budget is good for science and global human health.

We manage purchasing for >150 scientists, spending more than $400,000 per month from >200 suppliers. Sometimes we have no choice who to buy from because the scientist has a very specific request. But in many situations, we are given the flexibility to choose the supplier.

Some suppliers stink at what we call the Purchasing Experience, and some are excellent. The gold standards on our internal ranking system are NEB and AbCam. They are reliable, quick, and give us the information we need when we want it.

Here are 3 actions you can implement as a supplier to make us happy with your purchasing experience, and therefore, more likely to keep buying from you.

1) Get us a quote faster than 24 hours.

When we ask for a discount on an item we don’t already have a quote for or we are buying in bulk, we don’t want to have to wait 2-5 days. It’s silly that we depend on sales reps in the field who can’t respond to our requests until they get to a computer. Don’t undervalue the inside sales rep.

Fist bump to Matt G. from LifeTech (Thermo), Sean from P212121, Chris S. from VWR, and Marwan at Bio-Rad.

2) Send automated shipping updates.

To keep scientists on track and on-time we notify them of when their order will arrive. Obtaining a UPS, Fedex, etc tracking # is how we do this.

We do not want to spend 5-10 minutes logging into your website or calling customer service to find the tracking #. NEB and Amazon are exceptional. Once an item ships, they send an email with tracking number. Fisher, you should know your “Shipping Notifications” are useless. Our Virtual Lab Managers have learned to ignore it. The “Here” link is a dead end. Can you fix this?

Useless-Fisher-Shipping-notification-happilabs

This is a winner:

Tracking number for scientific orders

3) Send automated invoice (PDF format is preferred)

Most companies do, but some don’t, which require us to make phone calls to customer service or log into websites. Save us 5-10 minutes and automatically send this via email, and a PDF is preferred. Life Technologies (Thermo), Qiagen, and Amazon we’re looking at you.

Keeping scientists happy is our #1 goal, but keeping the accounting department happy is important too.

Bonus points if….

1) You have online chat.

Online-chatVWR, P212121, IDT, Fedex….great job!

2) You provide us a dedicated customer service agent. 

Our Virtual Lab Managers move fast, like Jimmy Johns. We do not like losing 5-10 minutes on the phone with customer service. Therefore, we’ve started allowing a dedicated customer service agent access to our team via a private Slack channel. Thank you to Sigma, E&K Scientific and the few others who have provided us a dedicated person. It is very helpful and allows us to post a question and come back to it later.

3) It takes less than 2 days to update a shipping or billing address.

We’re constantly baffled by how long this takes for most suppliers. The process requires filling out paperwork and then waiting for some kind of approval. We understand, due to the nature of some supplies that are regulated, that it takes time, but better communication about timing will be appreciated. 🙂

GE Healthcare, it’s taking a week. What does this mean, from a customer service agent:

“I’ve started a work flow to have the address updated in our system.”

Suppliers, we want to build a relationship with you. If you have questions, reach out: https://www.happilabs.org/contact/

The Cost of Moving a Lab out of a Biotech Incubator

A customer of HappiLabs recently moved out of an incubator and into their own space (a big milestone for biotech startups). They hired a Virtual Lab Manager to manage the process of ordering new equipment (since incubators have a lot of shared equipment).

This case study summarizes the cost and time of shopping for, negotiating, and buying all the equipment, along with lessons we learned in the process.

 

Moving A Lab case study (HappiLabs)

If you want a PDF to print and show to your boss: Moving A Lab case study (HappiLabs)

If you want help moving or managing your lab, call HappiLabs!

The Value of a Virtual Lab Manager

Raudel_Sandoval_Happy_Virtual_Lab_Manager

This post will show how a HappiLabs Virtual Lab Manager brings value to any lab in the world, especially a biotech startup. We perform all sorts of tasks to help scientists, but we specialize in purchasing lab supplies and equipment. HappiLabs provides clear savings to labs both in terms of time and money.

We evaluate time savings just as much, if not more, than financial savings. At regular lab meetings, our team of Virtual Lab Managers dissects the purchasing process in an effort to constantly improve and keep our labs running as efficiently as possible.

To supplement our studious efforts, we utilize cutting edge hardware and software.

If your company needs help creating a purchasing department, we can help. Let’s discuss the full purchasing cycle and the time associated.

It’s not as simple as “I need something. Order it. It arrives in 2 days.” There’s a lot more behind the scenes work that goes into ordering, which academics take for granted with help from their department or university purchasing systems. The entire purchasing cycle takes place in seven steps over the course of a few days to weeks.

Purchasing Flow Chart

Remember, in the world of startup biotech, you’re on your own.

1) Identifying supplies to buy

This involves Google, incoherent supplier websites, and phone calls to tech support and sales reps when buying something new. Sometimes our customers do this themselves, sometimes they send the research to their Virtual Lab Manager.

“Hi Raudel, I’m looking for options for DNA extraction kits. Can you find me a couple and their price per extraction?”

This saves 15-60 minutes per request for scientists.

2) Finding fair pricing

Our scientists don’t bother with this and trust HappiLabs will find a supplier with fair pricing. Keep in mind, it’s not always about price. We evaluate the whole value of a product and the supplier selling it (such as customer service, speed of shipping, and communication).

If scientists do this themselves, they’d be on the phone trying to get quotes from suppliers or googling. But their job is science and this is another 30 minutes that can be spent in the lab. That’s why they hire us.

Additionally, HappiLabs has relationships with suppliers so communication is quicker and we can leverage our purchasing power for even more cost savings.

3) Placing orders

This is not always as easy as logging in, click…click….click…done. Sometimes it’s a 5-15 minute phone call as you check stock and availability, double check pricing, and provide your payment info. The simplest order will still take at least 8 minutes online. Go ahead, time yourself. Scientists shouldn’t waste time doing this.

4) Receiving an order confirmation

What? Yeah, the most underrated step. It should not be taken for granted. Just because you called in an order or placed it online, DO NOT assume the order is being processed.

Most scientific suppliers are not as awesome as Amazon, and mistakes happen. Make sure you get a confirmation # otherwise you might be waiting and waiting and waiting for an order that was never processed.

5) Tracking shipping estimates

More important than you know, especially with the big suppliers. DO NOT trust their online estimates. Always call, and even so, believe no one until you have a Fedex or UPS tracking #. HappiLabs keeps scientists on schedule by staying on top of ETAs so experiments can be planned accordingly.

There are no surprise backorders with a Virtual Lab Manager. We spend about 4-8 minutes per order assuring this.

6) Receiving an order

Making sure the shipment gets to the right person is one of the most amusing moments of the purchasing cycle, and often the most difficult. HappiLabs has their secret as to how this happens and packages are rarely lost, especially at incubators like QB3@953, where there are 41 companies receiving packages.

7) Filing the invoice for accounting

It takes about 8-12 minutes per order and crucial for keeping the accountant happy. We work with and intergrate our workflow with many types of accounting softwares or systems.

Tracking down an invoice isn’t always simple. Some suppliers automatically email you, but many don’t, and then there’s the occasional mischarge that only gets caught if someone is monitoring invoices. We always do. There are two unintentional, sneaky ways suppliers make extra money from companies not monitoring invoices:

  • You’ve applied a promo code during the checkout process, but the order doesn’t get invoiced with the discount.
  • You were told “free” shipping, but were charged a “Handling” or “Fuel Surcharge” fee.

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In the long run, a Virtual Lab Manager moves faster and makes fewer mistakes than most lab managers, and especially if someone is doing this job who wears five different hats.

Think about it….an expert, with one hat, sitting at a computer with a load of resources and tools behind them — who do you think will do the job better?

Meet our Virtual Lab Managers.

(NOTE: this post was originally published on the Perlstein Lab blog. We’ve made edits to generalize it.)