Nonprofit Startups a Nonstarter? Non True.

6/2/08

It is nice to see that a nonprofit like Diagnostics For All (DFA) can actually garner attention and interest from both the MIT and Harvard communities by winning the MIT’s 100K competition and Harvard Business School’s Business Plan Contest. Just a year ago George Whitesides and I were repeatedly told that if we stuck to our nonprofit strategy it would be hard to realize our goal of bringing healthcare solutions to the poor. We were told by many that we would not get the attention that is needed to launch such an effort. We were told that the best students would never work for a nonprofit instead of a for-profit opportunity. But when I heard DFA being discussed on NPR a couple of weeks ago I realized that I am glad we did not listen to the people who told us that “nonprofit” was a “nonstarter.”

About two years ago George and I went for a long walk to talk about ways we could position his paper-based diagnostics technology towards the developing world. The technology seemed perfect for use in developing nations because paper is a very flexible, inexpensive substrate for manufacturing and it can be disposed in a safe manner after it is used. The paper diagnostic approach allows us to format existing, proven assays for just a fraction of their current cost. The technology also allows DFA to create brand new tests that would otherwise not exist. This paper invention is a pure example of a true platform technology. But George had tried to position some other technologies towards the developing world, and they always get repositioned for the U.S. and Europe first. The developing world then turns into a secondary effort or side project. He was fairly frustrated with this outcome and so was I. We wanted to see if we could figure out how to keep it centered on products for poor people first.

We decided that the best way to do this is to create a nonprofit enterprise where all of the paper technology, IP, and creative minds would reside—we’d just eliminate any for-profit objective in favor of a complete focus on nonprofit. We realized that the business model and financing model would be “different” but everything George and I do tends to have an element of uniqueness so we are very comfortable—at times more comfortable—with “different.” Fortunately Isaac Kohlberg who heads the Office of Technology Development (OTD) at Harvard also agreed that the nonprofit was the way to go and Harvard supported our concept of a nonprofit as the central entity to advance this technology. We formed a type of collaboration with Harvard and worked together in organizing the basics of the organization. We also benefited from some initial pro-bono support from the local community on legal, science, and business matters.

Honestly, most of the credit for our short-term success should be given to the students who have been relentlessly dedicating their time towards advancing low-cost technologies in George’s lab. George is the first to say that the students never get enough credit. I tend to agree but I am admittedly biased since once upon a time I was a post-doc student in George’s lab as well. But there is no question that without the lab there is no technology or DFA. I was also impressed with the quality and commitment of the Harvard and MIT students who came together to do the hard work on the DFA business plan. I believe these students were more motivated than other teams; they were driven by the mission and purpose of DFA.

We still have a long way to go before we can really claim victory for DFA. Our goals go well beyond winning business plan competitions. We need to see our technology and approach make a difference in the poorest of areas before we can celebrate. But it is nice to know that the best and the brightest have been supportive of our initial efforts even if it is in the structure of a nonprofit. Thank you Harvard and MIT! I am extremely hopeful.

Carmichael Roberts is a General Partner at North Bridge Venture Partners where he finances and builds companies that make new products using chemistry, materials science and/or materials engineering. Follow @

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  • http://dlweinreb.wordpress.com Daniel Weinreb

    I’m surprised that anyone said that the best students would never work for a non-profit. I guess I’m not sure about new students per se, but I know a lot of senior technical people who are highly motivated by the cause that their employer is serving. One example is the One Laptop Per Child program: they got lots of good people, and now that the mission has changed, many are leaving because they came there to work on the mission.

    Best of luck on your startup!!