Since its inception in 2000, Flagship Pioneering has raised more than $2.32 billion in funds and launched more than 96 portfolio companies with an aggregated valuation of $20 billion. Professor Hong Luo presented an overview of the important elements behind the success of Flagship Pioneering with emphasis on strategy. Materials: Harvard Business School Case “Institutionalized Entrepreneurship: Flagship Pioneering”
MIT CEO hosted the third event of the Entrepreneurs Lecture Series on Monday, Oct 13th. It is our honor and privilege to have Professor Hong Luo from Harvard Business School to lead a case study on Flagship Pioneering.
Hong Luo is the James Dinan and Elizabeth Miller Associate Professor at Harvard Business School, where she teaches strategy courses to MBA, Executive Education, and doctoral students. Her research focuses on the commercialization of innovative ideas and the strategy utilized by entrepreneurs.
The “Entrepreneuring” Vision
In 1987, Noubar Afeyan earned his Ph.D. in Biochemical Engineering from MIT and embarked upon the journey of entrepreneurship. Over the next decade, Dr. Afeyan contributed to the founding of six biotech companies, all of which went public or were acquired by the end of 1990s. As a serial entrepreneur, Noubar has the vision to transform the way startups are built: to systematically perpetuate entrepreneurship. Believing that Greater Boston has a strong ecosystem built of academic science, the hospitals, and the patient community, Dr. Afeyan founded Flagship in Cambridge.
Instituitionalized Innovation
Since its inception in 2000, Flagship Pioneering has raised more than $2.32 billion in funds, launched more than 96 portfolio companies with an aggregated valuation of $20 billion, and managed funds proven to be top performers among all VCs of the same vintage. Compared to a number of medium and large biopharmaceutical companies, Flagship Pioneering exhibited four times productivity in patenting. Some of the successful companies include Moderna Therapeutics, Seres Therapeutics, Agios Pharmaceuticals, and Acceleron Pharma.
Flagship Pioneering is renowned for its tremendous success in transforming highly innovative ideas into thriving new ventures. Within its very unique venture creation process, many special corporate setup are in place to mitigate risks for entrepreneurs, and to refine its decision-making process. While others have attempted but mostly failed to replicate Flagship’s success of institutionalized entrepreneurship, and could not make into a viable business. During the case study, professor Luo led a very interactive discussion, and provided valuable insights into the success of Flagship Pioneering. Key topics including company positioning, value creation process, and risk management were analyzed.
Key Questions Overview
▪ What set of principles that Flagship Pioneering utilized to transform the relationship between VCs and entrepreneurs?
▪ What are the risks that Flagship face? How does Flagship Pioneering attract resources and mitigate risks during the venture creation process?
▪ How could the current business model contribute to Flagship’s growth phase? What is the translatability of such strategy in the context of another industry?
Professor Luo also encouraged participants to analyze business issues by placing themselves in the role of entrepreneurs – what factors would you consider before becoming an entrepreneur? What are the initial asset value and risk aversion level that differentiate people willing to work in organizations from those choosing entrepreneurship?
With participants ranging from researchers to investors, Professor Luo steered active discussions towards exchanging perspectives and reflecting on relevant experience. Her passionate teaching promotes further conversation among participants after the session.
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