If you’re a lab manager for a biotech facility, buying a specific piece of equipment for a biotech facility isn’t something that you can do as an afternoon errand. The manager will have to go to a specialized retailer that may not be able to deliver the purchase on-time or they may not have it in stock.
ZAGENO is an eCommerce platform for this particular market need and adds simplicity to the shopping experience. The company recently finished its Series B round led by General Catalyst with $20M raised.
We connected with Florian Wegener, ZAGENO’s Co-Founder and CEO, to talk about his background in biotech and medtech, what led him to start the company, and advice for raising capital.
Colin Barry [CB]: Prior to starting ZAGENO, what was your career prior to starting your new company? Can you share the details on your respective professions?
Florian Wegener [FW]: Today, I see myself as an entrepreneur building something new for an entire industry. ZAGENO is the vehicle for this vision but as I estimate this is my fourth career.
To get to ZAGENO I first worked as a physician – specifically as a cardiologist, during which I learned about the healthcare system – within three very different markets where I did my training (US, CAN, DE). There I learned how to make an impact on people’s lives by performing exploratory EP studies, inserting heart caths and measuring electricity within the beating heart. When signs of a life-threatening arrhythmia were detected, I would insert an ICD (implantable cardioverter defibrillator) to prolong the life of the patient and increase their quality of life.
As a second step, I joined the Boston Consulting Group (BCG) where I worked to support clients in the big pharma, med-tech, and biotech disciplines. Importantly, during this period I learned about payers. Given my medical background, I was able to look at these industries from the standpoint of how large entities operate specifically in terms of the patient.
BCG sponsored me to pursue my MBA, which I did from Madrid. This offered me the opportunity to immerse myself in different functions within business such as finance and accounting – areas that I had not previously understood. During this time, I also learned a lot about entrepreneurship. This led to the next phase in my professional journey, when I joined Qiagen, a provider of sample and assay technologies for molecular diagnostics, applied testing, academic and pharmaceutical research.
It was at Qiagen where I really learned how to build things in the business world, such as eCommerce capabilities. This is when and where I realized that my passion and capabilities lay in developing businesses - building.
It was also during this period when I met David Pumberger, who would go on to become my business partner and the co-founder of ZAGENO.
CB: Now onto the story behind ZAGENO. What is the origin of the company?
FW: While at Qiagen I interviewed hundreds of researchers and purchasers, from different countries. Both David and I shared a vision, that the healthcare market needed a digital aggregator. We invested time considered what this should look like and what the customer journey should entail – from a digital, eCommerce perspective.
CB: What kinds of problems is ZAGENO solving in its respective space?
FW: At the time we first developed the idea for ZAGENO we understood that individual websites or call centers were unable to address the problems that researchers experience every day, such as:
Identifying the right product for my experiment.
Invoicing and payment processes, which for research teams in enterprises or institutes must adhere to strict procurement guidelines.
Reducing the administrative burdens associated with procurement and instead working on the next great scientific discovery.
We identified this need for the researcher, lab manager and procurement officer at enterprises and institutes. For this audience:
There had been no transparency or easy model to evaluate the cost comparisons of their supplies
This community has not been able to purchase with a high level of confidence that they ordered the right products for the planned research.
Strictly from a procedural standpoint, the work of ordering products and tracking the supply chain is a time-consuming undertaking.
Looking at ZAGENO from the supplier standpoint…
Quite simply, suppliers want to sell more.
At a brand level they want their products recognized among a peer group of other vendors.
While vendors want an additional sales channel, they need it to be cost effective. Responding to this ZAGENO has offers lean operations for high-value services like order handling and payment processes.
CB: Imagine I am a first-time user...can you explain to me how the software works?
FW: When you arrive at our website you’re greeted by a search bar, which leads to an open marketplace – similar to the Amazon.com marketplace.
Theoretically, a new user could obtain a purchasing card (p-card), similar to a credit card, which is typically provided by the user’s organization after which they can begin placing an order within minutes.
However, the power of ZAGENO is best experienced through the features and functions we’ve developed for our enterprise customers. These users are likely biotech companies and pharma companies, which have hundreds or even thousands of researchers all interfacing with our site and aligning any transactions with their respective procurement procedures. We typically begin these engagements with a small pilot before scaling it out to the entire organization. Because ZAGENO is based on “out of the box” standard APIs, establishing an enterprise account usually takes just a few weeks to go live.
For users, at a higher level, there are different entry points to ZAGENO:
You can identify products through a keyword search.
You can search for a specific SKU number.
You can search in a field of research (e.g. genomics) to identify associated products, where you will find hundreds or even thousands of suppliers selling products.
Like Amazon, customers can drill into a product category and use the hundreds of filters we have developed – as part of our search functionality – to identify precisely what they need from among the 2,000+ suppliers and > 8 million products available on the site.
It all hinges on a quality search that ensures customers can get exactly what they need for the research they have planned. Easy navigation, transparent pricing, reduce buying errors.
Unique to ZAGENO is our Product Comparison Engine, a market-first, allowing customers to compare products across all vendors. Unlike buying a new television where most decisions come down to size and resolution, life science products (e.g. characteristics and attributes) are far more complicated, which is why our comparative tool can process over 130 million product data points.
This data capture not only benefits customers with the best product at the best price but provides market insights into purchasing behaviors, customer needs and even a product’s sales performance.
CB: What are some of the challenges you two have faced since starting the company?
FW: There are different stages of building a company that people read and hear about but it’s very different to experience it, personally. Fortunately, for me, I had gone through much of this “building” when I was with Qiagen. There are three keys points:
Hiring – A great business begins with talented professionals. While this might seem obvious, attracting very good talent is very hard to do when no one knows you or your brand or when you are like us - a “first in category”, “market-maker” company.
Securing the first, big customer – It is often the case that you will need to build your product while, at the same time, need to sell it. This despite the fact that, to an extent, the product may still be theoretical. Further, you need to stay focused on the needs of your customers, which in the beginning is often based on one account and one point of contact. Establishing their needs can be difficult but includes everything from forecasting their unmet needs to helping them prioritize that the “things” important to them are the “things” you can address. In short, you need to work with customers to establish what is valuable and what is not. Inevitably, this leads to an informed decision of what, as a company, you will deploy to that customer.
Satisfying customers - When you speak with people who have built very large organizations, they will tell you that doing so begins with the customization and understanding the customer in order to build the right product. But eventually, companies can reach an inflection point – as we have at ZAGENO – when you pivot from customizing to standardizing your offering in order to satisfy 95% of the unmet needs of a customer segment. I would not advise any young business to do this across every customer segment because, in my view, you won’t be able to scale a business that addresses 100% of the needs of 100% of the customers.
CB: Congrats on the recent round of funding! Could you share some advice to other entrepreneurs working in a similar space?
FW: While every company, its founders and the market it serves are different what remains constant is the need to establish your angle – that unmet need that you think you can solve.
It seems obvious but I always wonder how people can start in an industry that they don’t know that well. Rather, I believe there is a bottom-up evaluation that asks, simply “Is it worth starting this company?” To answer that you need to determine the size of the market and whether it offers attractive margins. One must also ask themselves if the sector will grow in the coming decades or is there a chance it will disappear or devolve out of existence?
But once you’ve begun and you have your first established and hopefully satisfied customers you must then determine how it is you can improve on your initial model and seek to continually improve on the offering.
CB: Any other additional comments you’d like to make?
FW: Beyond the $130 billion size and scope of the life science research market it is an incredibly important industry, which is on the precipice of achieving incredible, life-improving advancements. By developing a one-stop-shop of over 8 million products, ZAGENO plays an important fulfillment role in that journey. To date, we’re able to support approximately 80% of the market’s need. If we execute well, ZAGENO can be a very large company, serving a very important need in helping our customers and the patients that benefit from their research.
Images courtesy of ZAGENO