It is the start of the business week in a secondary city in China. Compared with first tier cities like Shanghai and Beijing, this does not have the feel of a cosmopolitan place. Also, there are many signs that English is not going to be spoken by most of the people we meet. I am bracing for a challenging day: my inability to speak Chinese will mean that I will have to be more alert to non-verbal cues, and cue my guide Joel effectively.
We arrive to our destination office. There are retail-industrial buildings lining a wide and busy street. The buildings are probably about 60 to 70 years old. The architectural layout looks like an older and more industrial version of the Spadina Chinatown area in Toronto. Each building is 4 to 6 stories high, but few, if any, of them have elevators. Most of the lights are turned off to save electricity. When we enter these buildings, they looked closed for business.
When we have a mission to look for the most cutting edge biotech companies in the world, this is not exactly the kind of place one would expect to go. But we hired a business development firm with expertise in Chinese biotechnology, so I am trusting that this firm is not going to send us this far out of the way for nothing.
The company’s founder and CEO sees us through the window of the staircase lining the front of the building. He is waving to us and coming out to the street to greet us. After him and Joel exchange introductions in Mandarin, he turns to me and effortlessly transitions into English. We walk up the stairs to his office on the fourth floor as he continues to comfortably make introductory remarks. He throws in a comment that they are moving next month to the Hangzhou High Tech Park.
His assistant/office manager occupies a desk at the top of the staircase. Immediately behind her is his cramped office that he shares with his Chief Technology Officer. After we are seated, he notices that I am sitting in a spot that is bathed in bright sunlight coming through the window. I am wearing a suit, and he asks if I would like to change places, in case I am hot.
He’s got a very easy going style and he’s very friendly. Then he transitions into a light but pointed question about the purpose of our meeting him. Joel and I each offer an explanation, which satisfies him. He then launches into his PowerPoint presentation.
That is when Joel and I begin an awesome journey. Each slide is a short story that is more impressive than the previous slide. This is the meeting that marks the turning point of our entire trip.
This CEO was educated in China, but continued his studies in the US. He has worked in all of the major global technology companies in this field that we are discussing. This included a big name IT company during the tech boom ten years ago when this IT company wanted him to help them expand into the life science space. He knows all of the competitive technologies with the grasp of an insider. It is clear to Joel and I that he knows what he is talking about. Five years ago, he left the US to return to China to advance his vision.
I see inventor entrepreneurs all the time. Even in the US, almost all of them develop one technology platform. This CEO developed five, and integrated all five of them into one system to address an unmet need.
Sorry, I can’t be more specific about the technology area nor the specific health conditions.
The World Health Organization has endorsed only two products to address this medical need in developing countries. The product made by this CEO’s company is one of them.
The Gates Foundation recently held a global technology competition to identify new technologies to address an unmet medical area. The competition has narrowed the entries into a short list of some two dozen submissions for the final competition round. Three entries in this short list are from this CEO’s company.
He shows us samples of his product. Right now, they are selling thousands of these. They can’t keep up with demand. When manufacturing volumes reach a certain level, the price will come down to about a dollar per unit.
I am awe-struck. I can tell that Joel is similarly impressed.
He gives Joel and I several samples to take home. This is also a surprise, because young companies and companies in China are normally secretive. We can tell that he is confident about the intellectual property covering his product. This is also a sign that he has the business sophistication to be confident in facing a global market.
He takes us for a tour of his facility which occupies the two floors of this building. The labs look like a circa 1950’s underfunded lab, but the manufacturing area looks like any other biomedical manufacturing facility I would find in Toronto. It is fully certified by an European Notified Body as well as by the Chinese Food and Drug Administration.
There are pictures of visits to his facility by all the major global biomedical technology companies.
They take us out to lunch at a restaurant across the street. I find out the Chief Technology Officer has been with this CEO for most of his industry career. I also find out that both of them have wives and children back in the US, while they are here in China building the business. We find out that they were cash strapped for a while, but the staff loyally stuck with them at reduced salaries to help the company move along. They recently raised an important round of financing, whereupon they doubled their staff salaries. The staff all seemed to believe in this company and what it was hoping to achieve.
After lunch, they ask one of their employees to drive us to our next meeting. They walk us towards a brand new BMW 5-series sedan. As we finish our meeting and say our goodbyes, he makes a joke that he bought the BMW as the company car right after they got the financing. We all have a good laugh as we leave to our next meeting.
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We show up at the next company where we are to meet with two managers. The one that meets us doesn’t speak English very well, while the second manager is even less fluent.
Whenever we are meeting with non-executive staff, I know we are not being taken very seriously. Over the course of the next 90 minutes, Joel is translating for me and these two managers.
Over the next 90 minutes, I am also picking up that this manager is not like any ordinary “manager level” staff person. He knows the company business strategy at a high level. He is exhibiting technical and product knowledge with sophistication. He is also exercising all the signs of handling the diplomatic and social aspects of a business meeting. In Canadian and US companies, it is rare that I meet people at this level who exhibit such business sense and level of professionalism.
Over a series of exchanges being translated by Joel, something is communicated that defies spoken words. He shares with us the aspirations of his company to produce good products that will over take the biggest competitors that dominate this industry on a worldwide basis. Usually, comments like this are hubris, but we know that this is not, because he shows us product examples and goes into details about them. The key feature of the products made by this company is that they are based on a simpler and cheaper technology. It is also more stable to harsh conditions. It is truly a disruptive technology.
I leave the meeting feeling that nothing was lost in translation.
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Later that night, Joel and I have dinner at a local restaurant near the hotel. We go over our notes for the day. Joel has been traveling across China and meeting with all kinds companies over the past few years. Even he is surprised at what he has just seen. Our view of the world has changed dramatically by the end of this one day.
[Postcript: in April 2011, a key industry news item reported a Chinese billionaire investing $100 million on a biotechnology company to be based in Hangzhou with a US office. Hangzhou really is a burgeoning area that we discovered.]
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November 2011 postscript: I can now post a picture of the device that we saw in November 2010. The company (bioustar.com/en) has moved far further along, and made next generation products.
Here is the medical challenge: testing for diseases like HIV out in the field in remote places is a huge challenge. The labs and expertise are not there.
Also, the current test methods are not ideal. Once a virus enters the body, the immune system starts to produce antibodies against the virus. Diagnostic tests detect these antibodies to determine if the patient is infected with the virus. These tests cannot detect an infection until the body has had enough time to create a response to it.
There are more sensitive tests that can detect the virus directly, which means they can also make a diagnosis at earlier stages of the infection, but these tests are expensive, hard to perform, and use advanced equipment that needs electricity — certainly not suitable for mass use in developing countries, and they are not even common in developed countries.
What if there was a handheld diagnostic device that can detect the virus, so it is sensitive to even the earliest stages of viral infection? It is cheap, it is accurate, the sensitive test components can withstand high heat and humidity of these environments, it is not electrically powered, and it can be used without the large amount of training required of lab staff to do the analysis correctly? We saw just such a device. It comes in easy to use components, and the parts snap together. Coloured dyes light up to signal a positive test. They have since made this even better than that!
The blood sample is added to the plastic vial (bottom), the vial is snapped into the reagent box (left), the box slides into the final assembly (top right). Snap the handle shut, and the test begins.
The test solutions run up the side of the white strip. Red and other coloured lines light up to show whether the diagnostic test is positive or negative.