As a recent brouhaha at Google has uncovered some unpalatable realities of that business, it is worth remembering that one of the banes of all startups is their inability to quickly diversify often vulnerable revenue streams. In fact, it turns out that Google itself maybe in an incredibly precarious position with regards to its corporate revenues. The many projects that it has taken on over the years, which include some incredibly useful and innovative products, have, unfortunately, not proven to be profitable for the company itself. No matter how incredible of the product something like Google glass or automated speech recognition is, it ultimately is not a sustainable product if it does not make money for the corporation.
If this is a problem that is plaguing one of the largest corporations in the world, which was formed 20 years ago, it is an even bigger problem for many of the current startups across the United States, who have really been built on one sole product and do not have extensive expertise in other areas.
That’s why the smart money in successful startups always seeks to diversify into product lines that are genuinely profitable, as quickly as possible. Clay Siegall, founder of Seattle Genetics, has been doing just that. Dr. Siegall has been working overtime, over the last decade, to ensure that his company is well rounded and has highly diversified revenue sources which are capable of generating truly profitable returns. Over the last decade, Dr. Siegall has pursued a strategy of developing not just new drugs in the research and development pipeline but also concentrating getting many patents for original processes, which can later be licensed out to other biotech firms.
This latter area has proven to be a great source of revenue for the company, with more than 12 licensed processes currently being utilized by outside pharmaceutical companies. Some of these include extremely high-tech proprietary solutions, such as Seattle Genetics’ unique method of synthesizing monoclonal antibodies using a combination of pure organic chemistry and mammalian substrates. By creating the best anti bodies, which have the cleanest clinical profile when used in an actual human subject, Dr. Siegall is ensuring that his company has the keys to producing the most optimal cancer drugs in perpetuity. This is due to the fact that for every 10,000 variants of an antibody, there are only a few that are the best tolerated by the human body. Since Seattle Genetics has the patent on the only way to synthesize these antibodies, it will have a cash printing machine for decades to come.