Entrepreneur Report – Lab Connect LLC

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The Company

Lab Connect LLC was founded in 2002. It is a clinical research company that provides global central laboratory services including routine and esoteric laboratory testing, kit building, sample management, bio-storage and scientific support services for biopharmaceutical and CRO clients. The company has a unique combination of state-of-the-art technology, world-class laboratories, easy access to emerging markets and extensive specialized testing expertise, which means the drug development industry can rely on a single provider for all of their central laboratory service needs.

Target market

Its target market is small and mid size biopharmaceutical companies. Its target contacts are decision makers with titles such as Project Manager, Director of Clinical Operations, Clinical Research Associate, etc. with BS, MS or PhD degree, typically 35 to 50 years old, tech-enabled, but not necessarily tech-savvy.

They are disrupting an existing market. The current market size is about 4 billion dollars and the company has more than 20 competitors, including some billion-dollar companies such as Covance, Quintiles, and Quest. But the goal of Lab Connect is to develop a unique, distinctive and memorable brand to effectively differentiate from the much larger, more experienced competition. They want to promote the “decentralized central lab” concept with the messaging of “The world’s local central lab. Global reach. Local expertise”. As the CEO said, Lab Connect should be the “Toyota” or “Crate & Barrel” of the lab industry—connoting a well-designed product with good value. They are striving for a unique and differentiated “look and feel”. Some differentiating factors include connectivity and accuracy, humanness and “high touch” customer service, and high tech yet “user friendly”.

Positioning and Value Proposition

Positioning: The CEO wants to position Lab Connect as the “decentralized central lab” that provides biopharmaceutical companies with strategies for any phase of development, from target identification to commercialization, whether those companies require short- or long-term storage of their samples. He believes that proper sample management is a vital aspect of today’s clinical trials. Because samples may have to be retested for compliance, data or drug-safety reasons, a comprehensive bio-storage plan should be a part of their initial trial outline.

Value proposition: Lab Connect is focusing on taking customizable approach to meet clients’ protocol’s geographic and analytical needs, establishing regional laboratory hubs for site support, building industry leading specialty laboratories, providing unparalleled project management experience, developing innovative sample tracking and reporting technologies and keeping service oriented organizational culture, with solution driven mindset.

Channels and distribution

Since it’s a service company, its current sales channel is direct communications with decision makers of its target companies. They are taking a project management approach. Since the CEO used to work in the biopharmaceutical industry for several years before he founded his own company, he has a strong network in his target companies. He used to list all the primary contacts and let the sales people to call or visit them on a regular basis. Once they acquire a customer, they will have face-to-face meetings and start with project planning and hold routine project team meetings. They also have on-line collaborative tools with their clients.

Their customer acquisition is mainly through word of mouth. Starting from the CEO’s network in the industry, the company now has a stable customer group. Since the company did a good job in improving service quality and keeping a high switching cost, their retention rate is pretty high (around 22%, which is much higher than the industry benchmark). The company’s strategy is always focusing on increasing sales of existing customers. They’ve also tried email and cold-call sales to acquire new customers before, but didn’t achieve as many leads/sales as expected.

Amazon – buying on Black Friday experience

A bit more than one week ago, the day after Thanksgiving, many companies participated in so-called Black Friday, great discounts for different product categories. I have never seen it before, only on TV, because we don’t have it in my part of Europe. Atmosphere was heated not only by upcoming discounts but also by decorating city as a Christmas tree, feeling of the holidays was fully established, everyone started to think about making presents to their parents, friends, relatives, colleagues. I can’t resist a temptation and also succumbed universal gambler mood. I was really excited to get something much cheaper of a real price.

I didn’t plan to buy anything in particular on that day but I had a whole list of products which I suppose to buy before I leave US. One of such things was smartphone for my mother; she just broke her old one month ago and right now using very old phone. At the beginning, me and my father were thinking to buy it in Europe, but I compared prices for different brands and realized that prices in US are much cheaper than in Europe. China was not considered because I had bad experience with phones without brands. Usually, you can buy smartphone from 3 different distribution channels: from company producer, for example, from Apple.com; from retailer – offline and online – Electronics stores, cellphone stores or amazon.com, ebay.com; from VAR – value-added reseller like mobile operator, AT&T, Verizon, T-Mobile – this option is the most cheapest because it is bundling and goes with the mobile operator services. I can’t buy phone from VAR because I am staying in US limited time, they have long-term agreements. Thus, the first place I was looking for smartphones was regular stores, however, some people recommended me to wait the Black Friday deals. They were right! I am subscribed for offers from Amazon, and couple days before, I got an email about their deals, they had every day new products and great prices. I think this sales still runs till Christmas. On the first day of deals, on Black Friday, I found a lot of nice products for a good price but the most appealing for me was Samsung Galaxy III for price 329 $, without contract with local phone companies and free two-day shipping. The deal was limited on time. You need to buy it in one or two hours, I don’t remember, when I came there was 40 minutes left, therefore I hurry up to compare with the prices on ebay and other online retailers; amazon had the best deal for me. Samsung Galaxy III together with iPhone 5 and Nokia Lumia 920 was one of the main smartphones of the 2012. Why Samsung Galaxy III? First of all, it has great functionality, easy to use and convenient smartphone with a big screen. Secondly, it has lower price and uses open-source Android, which is price differentiation strategy, with its main competitor iPhone. Finally, it was on sale and I need a smartphone for my mother present, therefore I bought it, even if it was not intentional purchase. I think it was the cheapest price you can get this phone, thus I did a good deal and I am happy.

Google’s Nexus 5

ImageI recently purchased the Nexus 5 from Google Play.  Typically cell phone distribution comes from the OEM’s channel partner – the cell phone service provider (e.g. Verizon, T-Mobile, AT&T, etc.).  In this instance I was able to purchase the device direct from the manufacturer (Google) on the day the device was launched.  This is usually a very different experience because carrier partners usually have exclusivity contracts that require the Manufacturer to sell only through carrier channels (e.g. Verizon’s website or stores) for a specific period of time.  It was a pleasant experience to be able to purchase the device in a no pressure environment that was not constantly barraging me with up-sells to my mobile plan.

That said, Google did not take advantage of the sales channel they were working in – the web.  There was no way to sign up for email notifications of when the phone went on sale.  Also, they never announced a launch date – I just happened to be reading a tech blog when google released the phone and decided to purchase it on a whim.  Very few people will do this for a $350 device. Another example of their weak on-line sales strategy is that when I was searching (Googling) for the phone online, the top search results were for technology articles about the phone and not the sales page.  I would have expected them to purchase the keyword “Nexus 5” from AdSense – their own service. Ultimately, I had to use a link from a tech blog to get to their purchase page.  It is pretty embarrassing for Google to have this much difficulty with their SEO.

Lastly, there were a few parts of the distribution experience that could have been improved. For example, I had to pay extra to have the phone sent to me on 2-day shipping.  Seeing as they were not doing distribution through standard channels they were relying pretty heavily on their first customers showing off their devices to friends and family to spur sales. Google should have just factored the cost of 2-day shipping directly into the device cost to get these devices out to the public more quickly.  Or better yet, given out free overnight shipping to those people ordering within the first few hours of launch.

All-in-all the Nexus 5 is a great device that I am very happy with it, but I am surprised at all of the missed opportunities that such a large company had in their purchasing and distribution strategies.  I expected a better experience from Google. 

Put Some Hot Sauce on It!!!

I’m willing to bet you’ve had tabasco sauce sometime in your life maybe even recently. I’m willing to bet you’ve not tried tabasco habanero sauce though. If you are a hot sauce connoisseur like I am then you know it will change your life. You can’t get enough. Literally. I can only think of three stores I’ve ever seen Tabasco Habanero hot sauce in and they are so inconvenient for me to get to its ridiculous. Tabasco Habanero combines the perfect amount of heat without overpowering the hot sauce. Its perfect on anything from lasagna to soups to chicken. 

I’m not entirely sure about the reasoning behind Tabasco’s distribution strategy for its products. They are a huge company and can command the shelf space on grocer’s shelves if they wanted to. To exacerbate the distribution problem of Tabasco Habanero it is only sold in the 2 oz size which I can go through in 2 weeks. Tabasco allows for purchase on their website for bigger sizes but I find that to be a pain. I would just rather be able to get it at my local grocer where I can already get other Tabasco products. 

I would change the distribution strategy to include all three sizes of the Habanero sauce in every retailer that carries it. I would insist that my major grocers like Safeway, Ralphs, QFC, Whole Foods, Vons carry more than just the two flavors it usually carries. Or I would at least run promotional periods where I make the grocers carry every flavor and do a marketing campaign to generate buzz of the tabasco brand. 

Tabasco, are you listening? Please help me out. 

XOXO, Gossip Girl