GOOD MORNING. WELCOME TO OUR PROGRAM ON THE ORGANIZATION OF BUSINESS. THE FIRST QUESTION IS WHY IS SOMEBODY THERE THE STATE COMMERCE DEPARTMENT DOING THIS PROGRAM? >> YOU GOT A NEW JOB. >> I GOT A NEW JOB, THANK YOU. UP UNTIL THE FIRST OF APRIL, I WAS PART OF THE OITE, NOW I'M PART OF THE STATE COMMERCE. SO WE ARE LOOKING TO BRING BIO TECH COMPANIES INTO THE STATE SO YOU GUYS CAN GET JOBS. ALL RIGHT? THIS PROGRAM IS THE LAST OF A COUPLE OF THINGS. NUMBER ONE, THE LAST OF OUR INDUSTRY CAREER SERIES. WE'LL TALK MORE WITHOUT THAT AT THE END WHEN WE TALK THROUGH WHAT THIS IS. THIS IS ALSO MY LAST PROGRAM HERE AT OITE, UNLESS THEY CAN COME UP WITH BIG BUCKS NOW. [LAUGHTER] THAT'S NOT A PROGRAM, THOUGH. SO THIS PROGRAM, BY THE WAY -- MOST OF MY PROGRAMS DERIVED IN PART FROM THE QUESTIONS I WOULD GET FROM PEOPLE AS THEY WENT THROUGH THE INDUSTRY INTERVIEW PROCESS. THIS ONE WAS BUILT ENTIRELY ON QUESTIONS THAT I GOT FROM PEOPLE GOING THROUGH THE INDUSTRY INTERVIEW PROCESS. SO WHAT WE'RE GOING TO DO TODAY WE'RE GOING TO LEARN ABOUT THE INNERS OF A COMPANY. THIS WAS THE STARTING OF THE QUESTION THAT STARTED THIS GOING. YOU SEE THE JOB AD. YOU SAY ALL RIGHT, I'VE DONE ALL OF THOSE THINGS BUT I DON'T KNOW WHAT THIS DIRECTOR OF FORMULATION DEVELOPMENT IS. AND THIS SENIOR HAVEN'T, THAT SOUNDS -- VICE-PRESIDENT, THAT SOUNDS WAY HIGH IN THE COMPANY. SO MY ADVISE IS THINK LIKE THE WIZARD OF OZ. PAY NO ATTENTION TO THE MAN BEHIND THE CURTAIN. DON'T PAY ATTENTION TO WHAT THE POSITION IS TITLE AND WHO IT REPORTS TO. THAT VARIES DEPENDING ON THE COMPANY, THE SIZE OF THE COMPANY, THE INDUSTRY THAT IT'S IN. SO IF YOU'RE LOOKING AT THE RESPONSIBILITIES AND QUALIFIES AND YOU SAY MOST OF THOSE I HAVE, THOSE ARE THE ONES YOU WANT TO SEND YOUR APPLICATION FOR. SO TODAY, THEN, WE'RE GOING TO LOOK AT WHAT ARE THE CRITICAL FUNCTIONS WITHIN ALL BUSINESSES? ANY BUSINESS HAS TO HAVE THESE FUNCTIONS. AND LOOK AT HOW BUSINESSES ORGANIZATION THEMSELVES TO BE ABLE TO PERFORM THOSE FUNCTIONS. AND THERE IS NOT JUST ONE WAY, THERE IS NO ONE SIZE FITS ALL HERE. WE'LL INTRODUCE YOU TO COMPANY RULES AND JOB TITLES WITHIN R AND D SO YOU CAN GET MORE HANDLE ON IF YOU SEE THESE, WHAT DO THEY MEAN? AND THEN WE'LL LOOK AT RESOURCING TOOLS THAT ARE HERE FOR YOU AT NIH. SO WE'LL START AT THE VERY BEGINNING. AND THAT IS, THAT FOR A COMPANY, ANY COMPANY TO SUCCEED, THEY HAVE TO BE ABLE TO DO FOUR THINGS. I SEE PEOPLE TAKING NOTES. WE'LL MAKE THESE SLIDES AVAILABLE FOR YOU. IT IS PRETTY FLATTERING THAT SOMEBODY WANTS TO TAKE NOTES ON WHAT I SAY, SO THANK YOU. SO THEY HAVE TO DO 4 THINGS. THEY HAVE TO BE ABLE TO CREATE THEIR PRODUCT OR THEIR SERVICE. THEY HAVE TO BE ABLE TO THINK IT UP. WHAT IS IT, WHAT DOES IT NEED TO DO? THEN THEY HAVE TO BE ABLE TO MAKE IT. THEY HAVE TO BE ABLE TO SELL IT. AND THEY HAVE TO BE ABLE TO ACCOUNT FOR THE CASH COMING IN AND GOING OUT. ALL RIGHT? AND THIS IS TRUE WHETHER THE COMPANY IS GENERAL ELECTRIC, GENERAL MOTORS, APPLE, OR THE NEIGHBORHOOD LEMONADE STAND THAT YOU SET UP AS A KID. YOU HAVE TO THINK IT UP. DO I SELL LEMONADE? OR PINK LEMONADE? MAYBE ICE TEA. THEN YOU HAVE TO BE ABLE TO MAKE IT. YOU HAVE TO CRAWL UP IN THE CABINET WHERE YOUR MOTHER KEEPS THE STUFF, GET THE SUGAR, MIX, WATER, STIR IT ALL UP. THEN YOU HAVE TO SELL IT. YOU HAVE TO TAKE YOUR TABLE OUT, PUT IT ON THE CORNER. THE BEST CORNER WHERE ALL THE PEOPLE WALK BY. AND THEN YOU HAVE TO ACCOUNT FOR THE CASH. THAT'S THE CIGAR BOX. OR THE COFFEE CAN. BUT YOU MAY HAVE TO REIMBURSE YOUR MOTHER FOR THE LEMONADE MIX. SO THAT'S THE CASH IN AND OUT. LIKE I SAY THAT HAPPENS WHETHER IT'S A HUGE CORPORATION OR WHETHER IT IS A TINY CORPORATION. AND IN EACH ONE OF THESE NOW BECOME FUNCTIONS. THE THINKING IT UP, THAT'S YOUR RESEARCH AND DEVELOPMENT. THE MAKING IT, THAT'S YOUR OPERATIONS. YOUR COMMERCIAL, MARKETING AND SALES, THAT'S SELLING IT. AND THEN THE FINANCE. ALL RIGHT? NOW, INTERESTINGLY ENOUGH, IN DIFFERENT INDUSTRIES, DIFFERENT ONES OF THESE FUNCTIONS ARE MORE IMPORTANT. SO FOR EXAMPLE, IN THE PHARMA INDUSTRY WHICH WE'RE WORKING VERY CLOSELY WITH AT THIS POINT, WHICH ONE WOULD BE THE MOST IMPORTANT FUNCTION IN PHARMACEUTICALS? RESEARCH AND DEVELOPMENT. YES. ALWAYS BEING ABLE TO COME UP WITH CUTTING EDGE TECHNOLOGY. NOW IN OPERATIONS, MAKING IT, THINK ABOUT THAT. WHAT INDUSTRY WOULD BE THE MOST IMPORTANT? MANUFACTURING, BUT MANUFACTURING IS MORE IMPORTANT IN CERTAIN INDUSTRIES THAN IT IS IN OTHERS. FOR EXAMPLE, MANUFACTURING IN PHARMACEUTICALS, IF YOU'VE EVER SOMEBODY A PHARMACEUTICAL MANUFACTURING PLANT IT LOOKS LIKE THE KITCHEN FOR A JOLLY GREEN GIANT. THEY HAVE TEN THOUSAND VATS OF STUFF. THINK ABOUT MANUFACTURING, THINK ABOUT AUTOMOBILE INDUSTRY. WHO CAN MANUFACTURE THE SAME TECHNOLOGY AT THE -- AT A REDUCED COST OR CAN MANUFACTURE INCREASE TECHNOLOGY AT THE SAME COST? HOW ABOUT COMMERCIAL, THE INDUSTRY THAT WOULD RELY ON THEIR COMMERCIAL. MARKETING, YEAH, THAT'S THE COMMERCIAL. WHAT'S AN INDUSTRY THAT RELIES ON MARKETING? >> [INAUDIBLE] >> TELL ME AN INDUSTRY. COMMODITY PRODUCTS. LOOK AT THE PRODUCTS ADVERTISED ON TV AND YOU'LL SEE THAT THE SALES LINE GOES PRETTY MUCH WITH THE ADVERTISING LINE. BEER. YOU SEE THAT ADVERTISED. HOW ABOUT FINANCE? THIS IS AN EASY ONE. BANKS. YEP. BANGS BANKS. FINANCIAL INVESTMENT HOUSES. THOSE ARE THE ONES THAT CAN STIR THE FINANCES TO MAKE THEIR -- TO MAKE THEM LOOK BETTER. ALL RIGHT? SO THEN WHEN YOU HAVE THESE FUNCTIONS, THEN THERE ARE BASIC THINGS THAT FALL INTO THAT. SO IN THE RESEARCH AND DEVELOPMENT, YOU ALWAYS -- YOU OBVIOUSLY HAVE RESEARCH. WHICH IS THINKING IT UP. THAT'S THE EARLY STAGE STUFF. THE DEVELOPMENT WHICH IS MOVING IT ALONG TOWARD THE MARKET. AND THE REGULATORY. MAKING SURE THAT THE PRODUCT WILL MEET THE REGULATORY REQUIREMENTS WHEN IT'S ON THE MARKET. THEN YOU HAVE YOUR OPERATIONS WHICH IS MANUFACTURING. THE PRODUCTION OF THE PRODUCT. AND YOUR QUALITY ASSURANCE. MAKING SURE THAT THE QUALITY OF THE PRODUCT ALIGNS WITH THE REGULATORY REQUIREMENTS. COMMERCIAL, MARKETING, SALES, BUSINESS DEVELOPMENT, COMPANIES OFTEN TIMES WILL USE A BUSINESS DEVELOPMENT STRATEGY WHEN THEY DON'T HAVE A VERY GOOD RESEARCH AND DEVELOPMENT DEPARTMENT. THEY TRY TO END LICENSE THEIR PRODUCTS. AND THEN THE FINANCE. AND NORMALLY, COMPANIES WILL THROW INTO FINANCE THE ADMINISTRATION. WHICH IS THE I.T., THE LEGAL, THE HR, THAT KIND OF THING AS WELL. SO THEN WHAT YOU HAVE -- WHAT THE COMPANIES HAVE TO BE ABLE TO DO IS TAKE THESE FUNCTIONS AND ORGANIZE THEM IN A LOGICAL WAY SO THAT THEY CAN ACTUALLY PERFORM EACH OF THE FUNCTIONS SO IT LEADS TO SUCCESS. AND THEY WILL COME UP WITH A FUNCTIONAL ORGANIZATION SO YOU'VE GOT YOUR EXECUTIVES AT THE TOP. EACH OF THESE REPORT TO THEM. AGAIN, YOU CAN SEE THIS GROUP THINKS THE PRODUCT UP, MAKES SURE IT'S READY FOR THE MARKET. THIS GROUP MAKES IT, THIS GROUP SELLS IT, AND THIS GROUP ACCOUNTS FOR IT. AND ACCOUNTS FOR THE PEOPLE PART OF IT AS WELL. >> [INAUDIBLE] DOESN'T THAT MEAN THE COMPANY SHOULD TALK TO THE MARKET TO MAKE SURE THAT'S WHAT THEY WANT. THAT'S ABSOLUTELY WHAT THEY DO. [TECHNICAL DIFFICULTIES] WHAT SIZE OF COMPANY WOULD USE THIS ORGANIZATION? THAT -- SMALL. SOME OF THE FUNCTIONS MAY BE DOUBLED UP BY ONE PERSON OR THEY DON'T DO THEM. YOU WILL TALK TO COMPANIES -- DON'T HAVE HR. THEY ONLY HAVE FIVE EMPLOYEES. SO YOU WILL DO THAT. ONCE THE COMPANY BEGINS TO GROW, THEN YOU NEED TO PUT THINGS INTO A HIRE ARKAL ORGANIZATION. AND THE THING THING THAT DRIVES THE HIGH ARKANSASICAL ORGANIZATION IS WHAT IS CALLED SPAN OF CONTROL. AND THAT IS HOW MANY PEOPLE CAN ONE PERSON EFFECTIVELY MANAGE. IN THE U.S. INDUSTRY, PRETTY MUCH ACROSS ALL INDUSTRIES, THE AVERAGE SPAN OF CONTROL IS SOMEWHERE BETWEEN 8 AND 10. THAT'S WHERE IT BECOMES -- ONCE YOU GET BEYOND TEN, IT BECOMES MORE DIFFICULT TO EFFECTIVELY MANAGE THEM ONE ON ONE. SO YOU CAN SEE THAT UNDER R AND D YOU HAVE THE RESEARCH, THE DEVELOPMENT, AND THE REGULATORY AS SEPARATE GROUPS ALL REPORTING IN. AND SIMILARLY WITH THE OTHER ORGANIZATIONS AS WELL. NOW, THE ADVANTAGES OF THIS HIRE ARKAL ORGANIZATION, AND BY THE WAY, THERE IS NO ONE SIZE FITS ALL. THE ADVANTAGE OF THIS, IT PROMOTES FUNCTIONAL EFFECTIVENESS AND EFFICIENCY. EFFECTIVENESS ANDTAGEOUS UP AND DOWN IN THE FUNCTION. SO WE CAN GET THE PRODUCT THOUGHT UP, MADE, AND ON THE MARKETS. IT ENCOURAGES SUBORDINATE AND SUPERVISORY RELATIONSHIPS. THESE ORGANIZATIONS, PARTICULARLY AS THEY GROW, SOMETIMES TEND TO HINDER CROSS FUNCTIONAL COMMUNICATION. WHY? THAT'S BECAUSE MY JOB IS TO FET THIS PRODUCT FROM HERE TO HERE. IT DOESN'T MATTER I NEED TO TALK TO SOMEBODY OVER HERE. MY JOB IS TO DO THIS. AND IT CAN RESULT IN FUNCTIONAL POWER CENTERS. IF THIS BECOMES A PROBLEM, THIS CROSS FUNCTIONAL COMMUNICATION, THEN WE CAN TRY SOMETHING LIKE A MATRIX ORGANIZATION. I DON'T KNOW WHETHER YOU CAN SEE THAT SO WELL OR NOT. BUT YOU SEE THAT THIS IS A DOTTED LINE. SO YOU HAVE QUALITY ASSURANCE AND REGULATORY REPORTING IN TO BOTH R AND D AND OPERATIONS, BECAUSE IN THE EXAMPLE OF REGULATORY, IT HAS TO BE THE -- THE STUDIES HAVE TO BE DONE IN SUCH A WAY THAT THEY WILL PASS MUSTER WITH THE FDA. AND IT ALSO HAS TO BE MANUFACTURED IN THE SAME REASON. SO WE SEE THESE ORGANIZATIONS GOING ACROSS. AND ANOTHER PLACE WHERE THIS HAPPENS OFTEN TIMES IS IN BUSINESS DEVELOPMENT. SOMETIMES COMPANIES WILL EITHER IN LICENSE OR OUT LICENSE COMPOUNDS OR PRODUCTS THAT ARE STILL IN THE DEVELOPMENT PHASE OR SOMETIMES THEY MAY IN LICENSE PRODUCTS THAT ARE AT THE POINT WHERE THEY'RE GOING TO BE APPROVED OR MAYBE EVEN ON THE MARKET. SO THERE WOULD BE RATIONALE FOR THIS GROUP TO REPORT INTO BOTH WAYS. AND THE ADVANTAGES HERE ARE JUST THE OPPOSITE. A MATRIX ORGANIZATION PROMOTES MORE CROSS FUNCTIONAL COMMUNICATION. OFTEN TIMES IT CREATES FUNCTIONAL INEFFICIENCIES. THE SAYING IS IF YOU HAVE TWO BOSSES YOU EFFECTIVELY HAVE NO BOSSES. ALL RIGHT? SO THAT CAN BE A PROBLEM. IT TAKES A DIFFERENT SKILL SET TO WORK IN AND MANAGE IN A MATRIX ORGANIZATION THAN IT DOES IN A HIERARCHICAL ORGANIZATION. NOW WE'LL LOOK AT JOB TITLES. REMEMBER THIS GOES TO PAY NO ATTENTION TO THE MAN BEHIND THE CURTAIN HERE. IF YOU'RE INTERVIEWING FOR A CEO OR PRESIDENT'S JOB, THAT'S PROBABLY A PRETTY GOOD JOB. YOU SHOULD PROBABLY GO AHEAD WITH IT, NO MATTER WHAT THEY CALL IT. YOU CAN SEE THERE ARE DIFFERENT NAMES FOR THAT, SOMETIMES IT'S CALLED PRESIDENTS, SOMETIMES IT'S CALLED CHIEF EXECUTIVE OFFICER. AND THEN IN THE VARIOUS FUNCTIONS, THEY MAY HAVE A CHIEF SCIENTIFIC OFFICER WHICH WOULD BE THE HEAD OF R AND D, OR THEY MAY CALL THAT THE VP OF R AND D, VICE-PRESIDENT. AND SIMILARLY THE VICE-PRESIDENT OF OPERATIONS, THE CHIEF COMMERCIAL OFFICER, THE GUY THAT HEADS THE SALES AND MARKETING, AND THEN THE CHIEF FINANCIAL OFFICER OR OFTEN TIMES THE VICE-PRESIDENT OF FINANCE. AND THEN YOU SEE THE VARIOUS VICE-PRESIDENTS DIRECTORS, EXECUTIVE DIRECTORS THAT MAY FIT UNDER EACH ONE OF THESE. NOW, THE REASON IN THE OPERATIONS WE DIDN'T HAVE A CHIEF -- WE DIDN'T CALL IT A CHIEF OPERATING OFFICEer, IS BECAUSE THAT TITLE GENERALLY KE NOTES A DIFFERENT FUNCTION. OFTEN TIMES IN COMPANIES, THEY WILL HAVE A CHIEF OPERATING OFFICER THAT REPORTS THE CHIEF EXECUTIVE OFFICER. AND HIS RESPONSE -- HIS OR HER RESPONSIBILITIES WOULD BE ALL OF THESE FUNCTIONS THAT IT TAKES TO OPERATE THE BUSINESS. SO THE R AND D, THE MANUFACTURING, THE SALES AND MARKETING MAY ALL REPORT INTO THIS OPERATIONS OFFICER. THIS IS A COMMON STRUCTURE IN A COMPANY THAT IS KIND OF A MIDDLE SIZED COMPANY WHERE THE CEO IS BUSY OUT MEETING WITH INVESTORS TRYING TO RAISE MONEY. SO THEY HAVE TO KEEP THE BUSINESS GOING WHILE THEY'RE TRYING TO RAISE MONEY. SO YOU HAVE THAT CHIEF OPERATING OFFICER. AND NORMALLY, THIS DOESN'T HAPPEN ALL THE TIME, BUT NORMALLY, THE FINANCES WILL STILL REPORT IN TO THE CEO. YES. >> [INAUDIBLE] >> HOLD THAT QUESTION. I'LL TRY TO ANSWER IT. THERE GENERALLY ISN'T A REPORTING RELATIONSHIP. BUT THERE IS A FUNCTIONAL RELATIONSHIP. THE FINANCE PEOPLE ARE THE ONES THAT CONTROL THE MONEY. >> [INAUDIBLE]. >> [INAUDIBLE] >> A REPORTING RELATIONSHIP? THAT MEANS ONE PERSON OR GROUP REPORTS TO ANOTHER PERSON. SO THAT PERSON WOULD BE HIS BOSS, HIS OR HER BOSS. SO PERFORMANCE APPRAISALS, THAT KIND OF THING, WOULD BE DONE IN THAT REPORTING RELATIONSHIP. SO THAT'S A DIRECT LINE. THAT'S -- I MEAN IT GOES FOR -- ON ALL THE TIME. HOW OFTEN THEY MEET AND ACTUALLY DO THOSE THINGS WOULD BE DRIVEN BY THE INTERNAL RULES AND REGULATIONS IN THE COMPANY. YEAH. AND MOST COMPANIES, PARTICULARLY THE LARGER COMPANIES, HAVE A SYSTEMATIC PERFORMANCE APPRAISAL PROCESS THAT MAY HAPPEN ON AN ANNUAL BASIS, MAY HAPPEN ON A QUARTERLY BASIS. THERE IS A FORM THAT IS FILLED OUT BASED ON WHAT THE PRIORITIES OF THE COMPANY ARE. AND SO HERE IS YOUR GOALS, HOW DID YOU DO AGAINST YOUR GOALS. THAT'S A GOOD QUESTION. THANK YOU. NOW WE LOOK AT THE R AND D FUNCTIONS. YOU CAN GET A HANDLE ON WHAT SOME OF THESE JOB TITLES THAT YOU MAY BE LOOKING AT MIGHT LOOK LIKE. FIRST OF ALL, IN THE RESEARCH GROUP, YOU CAN SEE THE ROLES AND RESPONSIBILITIES THAT ARE THERE. ALONG WITH THE VARIOUS CAREER TRACKS. FOR THOSE OF YOU AT A ARE HERE AT -- THAT ARE HERE AT NIH DOING YOUR FELLOWSHIP, YOUR POST-DOC, THESE ARE THE MOST SIMILAR JOBS TO WHAT YOU'RE DOING. IN FACT, THEY ARE ALMOST THE SAME. YOU'RE JUST DOING IT IN A COMPANY VERSUS HERE AT NIH. SO THESE ARE THE THINGS YOU WOULD BE DOING. AND SIMILARLY, HERE IN PRECLINICAL DEVELOPMENT, SO IT'S THOUGHT UP THE BASIC TESTING HAS BEEN DONE, AND NOW WE'RE OUT DOING THE ANIMAL STUDIES, THIS, AGAIN, VERY SIMILAR TO WHAT YOU WOULD BE DOING. AND THEN THE CLINICAL DEVELOPMENT IS A LITTLE BIT DIFFERENT. THESE ARE ACTUALLY THE DESIGNING AND MONITORING OF THE CLINICAL TRIALS, THE TRIALS IN HUMANS. OVERSIGHT, VERIFICATION, REGULATORY OVERSIGHTS. YOU CAN SEE THE VARIOUS CAREER TRACKS, PROGRAM MANAGEMENT, THESE ARE PROJECT MANAGEMENT TYPE POSITIONS. MOST COMPANIES DO THEIR CLINICAL WORK OUTSIDE. THEY ARE DONE IN A CLINICAL SETTING. SO MONITORING THAT IS MORE -- IS MORE WHAT THE ROLE IN THE COMPANY IS, RATHER THAN ACTUALLY DOING THOSE STUDIES. AND SO THEN YOU SEE JOB TITLES. SO WHEN YOU SEE THAT REPORTS TO, ON-THE-JOB AD, OKAY, IT MIGHT REPORT TO A DIRECTOR OR A MANAGER. AND THAT MANAGER WOULD BE THE MANAGER OF A LAB. THAT WOULD BE THE POSITION THAT IS VERY SIMILAR TO WHAT YOUR P.I. DOES. AND A DIRECTOR, THEN, MAY MANAGE SEVERAL LABS. GENERALLY, WITHIN THE PHARMA COMPANIES, THEY TEND TO HAVE THE -- THEY T END TO BE SEPARATED BY THERAPEUTIC AREAS. SO YOU MAY HAVE A CARDIOVASCULAR GROUP, EACH LAB WORKING ON A DIFFERENT COMPOUND. AND THEN UNDER THERE, THESE ARE THE POSITIONS THAT YOU SEE. YOU MIGHT SEE SENIOR SCIENTISTS, YOU MIGHT SEE STAFF SCIENTISTS, YOU MIGHT SEE A SCIENTIST ONE, A SCIENTIST TWO, SCIENTIST THREE. YOU MIGHT SEE A RESEARCH ASSOCIATES, RESEARCH FELLOW. THOSE ARE ALL BASICALLY THE SAME JOB. CALLED DIFFERENT THINGS WITHIN DIFFERENT COMPANIES. [INAUDIBLE] YES. YES. RIGHT. SO THE QUESTION WAS WHEN YOU'RE LOOKING AT THESE JOB ADS, IT LOOKS LIKE THE COMPANIES CREATE DIFFERENT NAMES FOR THESE POSITIONS. AND THEY DO. THEY DO. AND THAT'S WHY WHEN YOU'RE LOOKING AT THE JOB AD IT'S MORE IMPORTANT TO LOOK AT THE QUALIFICATIONS AND RESPONSIBILITIES, RATHER THAN THAT POSITION. NORMALLY IF YOU LOOK AT SOMETHING LIKE A SENIOR SCIENTIST AND STAFF SCIENTIST, THAT'S THE SAME JOB BUT DIFFERENTIATED BY HOW MUCH EXPERIENCE THE PERSON COMING INTO THAT JOB MIGHT HAVE. HOW MUCH PREVIOUS EXPERIENCE. AND THE SAME WITH A SCIENTIST 1, 2 AND 3. SCIENTIST 1 MAY BE COMING IN WITH LITTLE OR NO EXPERIENCE. 2 WITH A LITTLE BIT MORE, 3 IS UP THERE. SO THIS IS ALSO AN INDICATOR THAT MOST COMPANIES AND PARTICULARLY THE BIG COMPANIES HAVE CAREER TRACKS WITHIN THEM THAT DON'T NECESSARILY INVOLVE MOVING INTO MANAGEMENT OR MOVING OUT OF THE LAB. SO YOU CAN PROGRESS IN BOTH SALARY AND STATUS, STILL WITHIN WORKING WITHIN THE LAB. IN THE AREAS OF THE PRECLINICAL DEVELOPMENT, YOU SEE THE SAME KIND OF ORGANIZATION. YOU SEE THE DISTRICT, OVER MULTIPLE LABS. THE MANAGER WHICH IS OVER THE LAB, AND BY THE WAY, WHEN WE TALK ABOUT THE HIGHER MANAGER IN HERE, IN MOST CASES, IT WILL BE THAT MANAGER POSITION. AND YOU SEE THE JOB TITLES BECAUSE AS YOU SAW BEFORE, THE WORK THAT IS DONE BOTH IN THE DISCOVERY RESEARCH AND A PRECLINICAL RESEARCH ARE VERY SIMILAR. SO THE JOB TITLES HERE TEND TO BE VERY SIMILAR AS WELL. AND LIKE WE SAID, IN THE CLINICAL DEVELOPMENT, THAT'S WHERE YOU GET YOUR DIFFERENCES. SO YOU GENERALLY HAVE A DIRECTOR THAT REPORTS INTO THERE, THE DIRECTOR NOT ONLY DIRECTS THE OPERATION BUT THEY ARE OFTEN TIMINGS THE ONES CHARGED WITH DESIGNING THE LIBERAL TRIALS AS WELL, ALONG WITH THE VP. AND AS YOU SAW THAT THE JOBS ARE DIFFERENT, SOME OF THE JOB TITLES ARE DIFFERENT AS WELL. AND THESE ARE AROUND MANAGING AND WORKING WITH THE CLINICAL INVESTIGATORS. YES. >> [INAUDIBLE] >> IT'S ALLRISH AND DEVELOPMENT. IT'S ALL RESEARCH AND DEVELOPMENT. TWO DIFFERENT PARTS. RESEARCH TENDS TO BE DOWN AT THIS END. THIS IS THE SCORERY RESEARCH, TENDS TO BE CALLED RESEARCH. DEVELOPMENT IS DIVIDED INTO PRECLINICAL DEVELOPMENT, WORK DONE WITH ANIMALS AND CLINICAL DEVELOPMENT WHERE IT'S DONE ON HUMANS. AND I SHOULD STOP HERE AND IF WE'RE TALKING ABOUT A PHARMACEUTICAL COMPANY, THEY GO THROUGH THE VARIOUS PHASES. SO THEY GO THROUGH THE DISCOVERY RESEARCH. THEN THEY TAKE -- THAT PRODUCT WILL GO TO THE PRECLINICAL PHASE. THE PRECLINICAL PHASE IS WHERE IT IS BEING TESTED ON ANIMALS. THIS IS WHERE THE MAXIMUM TOLERATED KINDS OF STUDIES ARE DONE. AND THEN ONCE IT PASSES MUSTER AT THAT POINT, THE COMPANY MAY BE AWARDED WHAT IS CALLED ABIND, INVESTIGATIONAL NEW DRUG, AND IT CAN PROGRESS TO CLINICAL TRIALS. THAT IS THE PHASE ONE, THE PHASE TWO, AND THE PHASE THREE. PHASE ONE TENDS TO BE -- IT TENDS TO BE -- THAT TENDS TO BE SAFETY WORK. HOW SAFE IS THE PRODUCT. PHASE 2 TENDS TO BE DOSING STUDIES. WHAT IS THE MAXIMUM DOSE, THE MINIMAL DOSE, THE MOST EFFECTIVE DOSE. AND THEN THE PHASE 3 STUDIES TENDS TO BE LARGER SCALE STUDIES. SO THE CLINICAL WORK DONE ON LARGER NUMBERS OF PATIENTS. YEP. >> [INAUDIBLE] >> YES. THE QUESTION IS, TRANSLATIONAL SCIENCE OR TRANSLATIONAL DEPARTMENT IS NOT -- DOES NOT APPLY HERE. THAT WAS THE QUESTION, RIGHT? AND THE ANSWER TO THAT IS YES. IT GENERALLY IS NOT APPLIED. ONCE A COMPANY GETS IT INTO THE DISCOVERY PHASE, IT'S ALREADY IN THE TRANSLATIONAL -- IT'S ALREADY DOWN THE ROAD TRANSSATIONALLY. OKAY? YES. >> [INAUDIBLE] >> IT COULD BE. IT COULD BE A MANAGER OR IT COULD BE LIKE A LEAD SCIENTIST WITHIN THAT DEPARTMENT. AND THERE IS NO REAL WAY OF TELLING. THE QUESTION WAS YOU'VE SEEN THE TITLE, PRINCIPLE SCIENTIST. COULD THAT BE LIKE A MANAGER. THE ANSWER IS Y IT COULD. BUT IT ALSO MAY BE LIKE A LEAD SCIENTIST WITHIN THE LAB AS WELL. SO WHEN YOU READ THESE, AGAIN, GO TO THE RESPONSIBILITIES AND QUALIFICATIONS. AND SO A PRINCIPLE SCIENTIST MAY BE ONE THAT HAS A LOT OF EXPERIENCE IN THAT PARTICULAR AREA. THERE IS ONE OTHER LEVEL THEN, WITHIN A COMPANY, THAT YOU NEED TO BE AWARE OF AS WELL. AND THAT IS THE BOARD OF DIRECTORS. NOW, THE BOARD OF DIRECTORS IS A GROUP OF -- FROM 3 TO 15 GENERAL MOTORS HAS 15 BOARD MEMBERS. AND THEIR JOB IS TO -- IS OVERSIGHT OF THE PROPER FINANCIALS. SO THAT THE COMPANY STAYS WITHIN THE LAWS OF THE SECURITIES EXCHANGE COMMISSION OF THE ACCOUNTING PRINCIPLES AND THAT KIND OF THING. OKAY. AND YOU CAN SEE THERE IS GENERALLY TWO TYPES OF DIRECTERS, THE ONE IS THE INDEPENDENT DIRECTOR, THOSE COME FROM THE OUTSIDE. SO THOSE ARE PEOPLE THAT DON'T HAVE ANY KIND OF DAY TO DAY RESPONSIBILITY WITHIN THE COMPANY. THEN THIS ARE INTERNAL DIRECTORS. THOSE ARE PEOPLE THAT WITHIN THE COMPANY SIT ON THE BOARD AS WELL. IF YOU SEE THE TITLE OF CHIEF EXECUTIVE AND CHAIRMAN OF THE BOARD, THAT'S THE TWO RESPONSIBILITIES. SO HE IS ACTUALLY THE CHAIRMAN OF THE BOARD OF DIRECTORS AND THE CHIEF EXECUTIVE OFFICER. NOW, MOST OVEN THOSE BOARD MEMBERS IN A COMPANY ARE EITHER OR BOTH THE CEO OR THE CFO, THE CHIEF FINANCIAL OFFICER. SO NOW THAT YOU KNOW EVERYTHING ABOUT HOW COMPANIES ARE ORGANIZED, NOW WE'LL START INTRODUCING YOU TO SOME KEY TERMS AND TOOLS. THIS CAME FROM PEOPLE WHO INTERVIEWED AND SAID WHAT IS THIS? WHAT DO THEY DO? ALL RIGHT. SO WE'LL PLAY WITH THEM A LITTLE BIT. TELL ME WHEN YOU GET TIRED. SO THE FIRST IN OPERATIONS AND REMEMBER, OPERATIONS THE MANUFACTURING. WE'RE GOING TO MAKE THIS THING. ALL RIGHT. THE FIRST IS SOP. TELL ME WHAT THAT IS. YEAH. >> [INAUDIBLE] >> RIGHT. IF YOU'RE GOING TO MANUFACTURE SOMETHING, YOU HAVE TO MANUFACTURE IT THE SAME WAY EVERY TIME. OKAY? HOW ABOUT GLP? GOOD LABORATORY PRACTICES. HERE AT NIH YOU HAVE TO USE GOOD LABORATORY PRACTICES. WHO DECIDES WHAT GOOD LABORATORY PRACTICES ARE? >> [INAUDIBLE] >> THERE ARE STANDARDS. AND THERE ARE STANDARDS THAT ARE CALLEDICALLIA STANDARDS. CLIA. CLINICAL LABORATORY IMPROVEMENT AMENDMENTS. TO MAKE SURE THAT WHAT COMES OUT OF THE LAB IS RECOGNIZED AS CORRECT. THEN WE HAVE GMP. ANYBODY KNOW GMP? PRACTICES, PROCEDURES, YEAH. WE'LL TAKE EITHER ONE. OKAY. WHO SETS THOSE? [INAUDIBLE] >> THERE ARE STANDARDS. WHO SETS THOSE? FOR THE PHARMA -- FDA, RIGHT. THAT'S WHY WHEN SOMEBODY TELLS ME THE SCIENCE ISN'T AS BEGIN TRY AS IT IS IN ACADEMIA, I SAY BS. AND THAT'S BECAUSE HERE AT NIH, ALL YOU GUYS HAVE TO WORRY ABOUT IS THE GLP. THE COMPANIES HAVE TO WORRY ABOUT GMP AS WELL. YES. >> [INAUDIBLE] >> GOOD MANUFACTURING PRACTICES. MANUFACTURING. SO AGAIN, IT HAS TO BE MANUFACTURED TO THE EXACT SPECIFICATIONS THAT WERE LAID OUT IN THE CLINICAL TRIALS AND IN THE APPROVAL. YES. >> [INAUDIBLE] GLITHAPPENS -- SHE SAYS THAT IN ACADEMIA, THEY DON'T NECESSARILY STICK TO THE STANDARDS? TO GLP, YES -- >> [INAUDIBLE QUESTION]. >> WELL, BASIC RESEARCH THERE IS A LITTLE MORE SERENDIPITOUS IN NATURE AND WHILE THERE IS A ELEMENT OF GLP IN, THERE IT'S PROBABLY NOT FOLLOWED AS STRICTLY. ALTHOUGH IF YOU HAVE BEEN READING HERE AT NIH, THEY'VE SHUT DOWN A COUPLE OF LABS AND THE REASON THEY SHUT DOWN A COUPLE OF LABS WAS BECAUSE THEY WEREN'T OPERATING UNDER GLP. >> [INAUDIBLE] >> YES, THEY'RE A LITTLE BIT LATER STAGE. AS THE PRODUCT OR COMPOUND GETS CLOSER TO THE MARKET, THE STANDARDS BECOME MORE STRICT. YES. OKAY. HERE IS ONE NOT EVEN IN PHARMA. SKU. ANYBODY KNOW WHAT SKU IS? GO TO THE GROCERY STORE. THE BAR CODE THAT YOU SCAN. THAT'S SELF KEEPING UNIT. SHELF KEEPING UNIT. THAT'S HOW COMPANIES CAN KEEP TRACK OF THEIR INVENTORY. AND THEN A PILOT PLAN. ANYBODY KNOW WHAT A PILOT PLANT IS? PILOT PLANS ARE GENERALLY IN THE -- IN A P HARMA SETTING, AND WHAT THEY DO IS A SMALL MANUFACTURING AREA THAT MANUFACTURES QUANTITIES OF THE PRODUCT THAT ARE USED IN THE CLINICAL AND PRECLINICAL TRIALS. OKAY? SO IT ISN'T -- IT ISN'T GEARED UP FOR MASS DISTRIBUTION. IT'S FOR SMALLER BATCH SIZE. AND IF YOU'RE LOOKING -- WHEN YOU LOOK ON THE -- WHEN I PUT THESE UP ON THE WEBSITE AND YOU WANT TO PULL THESE DOWN, IT WILL HAVE THE DEFINITIONS ON THERE SO YOU CAN LOOK AT THEM. NOW, WHEN WE START WITH FINANCE, WE HAVE TO START, FIRST OF ALL, WITH THE -- WITH SOME OF THE REPORTS FROM THE TOOLS THAT THEY USE. ALL FINANCIAL GROUPS -- IF YOU LOOK AT ANY ANNUAL REPORT FROM ANY COMPANY, YOU WILL SEE THESE FOUR REPORTS THAT WE'RE GOING TO TALK ABOUT. THESE ARE THE FOUR BASIC FINANCIAL REPORTS. LET ME EXPLAIN TO YOU WHAT THEY ARE. WHEN YOU HAVE A COMPANY LIKE GM, THEY HAVE LIKE 30 PAGES OF REPORTS OF THIS STUFF. AND IT'S JUST TO REPORT EVERYTHING THAT'S IN THERE. AND THE FIRST AND THE BASIC ONE IS CALLED THE BALANCE SHEET. THE BALANCE SHEET LISTS THE ASSETS THAT A COMPANY HAS, ALL OF THE POSITIVE FINANCIAL ASSETS. IT LISTS THE LIABILITIES, WHAT DOES THE COMPANY OWE. AND THE SHAREHOLDER EQUITY. IT'S CALLED A BALANCE SHEET BECAUSE THE -- IT ALWAYS MUST BALANCE, AS YOU SEE, THIS ONE DOES. THE TOTAL ASSETS, 2.1 MILLION AND 2.1 MILLION. AND THE REASON THEY ALWAYS BALANCE IS BECAUSE YOU HAVE YOUR ASSETS, SO WHAT'S COMING IN, WHAT DO YOU OWN. YOUR LIABILITIES WHAT GOES OUT, AND THE DIFFERENCE WOULD BE THE SHAREHOLDER EQUITY. THE VALUE OF THE HOLDINGS TO THAT OWNER OR OWNERS. NOW, WHAT HAPPENS IF THE AMOUNT OF THE ASSETS IS LESS THAN THE AMOUNT OF THE LIABILITIES? YOU'RE PROBABLE HEY LOOKING AT MY CHECKING ACCOUNT. [LAUGHTER] THEN THE OWNERS HAVE NEGATIVE EQUITY. THEY HAVE NO VALUE OF THE OWNERSHIP THAT THEY HAVE. OKAY. AND SO IF THAT OCCURS, THEN THIS WOULD BE A -- THE EQUITY RIGHT HERE, THIS AMOUNT, WOULD BE A NEGATIVE NUMBER. NOW, THE NEXT SHEET WE LOOK AT IS THE INCOME STATEMENT. WE START WITH A BALANCE SHEET. THEN WE HAVE THE INCOME. THAT LOOKS AT THE PROFITABILITY OF THE COMPANY. WHAT'S COMING IN VERSES WHAT'S GOING OUT. ALL RIGHT. SO THE -- WHAT'S COMING IN ARE THE REVENUES, SALES. REVENUES OUR INCOME FROM SECONDARY ACTIVITIES. AND THEN GAINS FROM NON BUSINESS ACTIVITIES. WHEN I WORK FOR SANDOs, LONG TIME AGO, ON ONE YEAR THEY ACTUALLY MADE MORE MONEY ON THEIR INVESTMENTS, THIS PIECE OF IT, THE GAINS FROM NON BUSINESS ACTIVITIES, THAN THEY DID ON THE SALES OF THEIR PRODUCTS. OKAY? AND THEN THE EXPENSES WHICH IS WHAT'S GOING OUT. PRIMARY ACTIVITY, SECONDARY, THEN LOSSES. NOW, THIS ONE DOESN'T NECESSARILY NEED TO MATCH. SO YOU SEE WHAT THE REVENUES PLUS ANY OF THE OTHER INCOME, YOUR GROSS PROFIT, MINUS YOUR EXPENSES AROUND YOUR NET INCOME -- AND YOUR NET INCOME IS THE DIFFERENCE. WHEN YOU MAKE MONEY OR LOSE MONEY. THEN YOU HAVE THE CASH FLOW. AND THIS JUST, OVER A PERIOD OF TIME, WHAT IS THE CASH? THE CASH THAT IS COMING IN, GOING OUT. AND YOU CAN SEE HERE THERE IS OPERATING ACTIVITIES, INVESTING ACTIVITIES AND FINANCIAL ACTIVITIES. OKAY. SO THE OPERATIONAL ACTIVITIES, WHAT'S THE MONEY COMING IN AND GOING OUT VERSES THE PRODUCTS RELATIVE TO THE PRODUCTS. THE INVESTIGATING, ARE WE INVESTIGATING IN OTHER -- INVESTING IN OTHER COMPANIES, OTHER TECHNOLOGIES, THEN THE FINANCIAL ACTIVITIES. ARE WE -- ARE OUR INVESTMENTS IN VEHICLES THAT ARE MAKING MONEY OR LOSING MONEY. SO THIS IS A CASH KIND OF THING. AND SO YOU -- SO AT THE END YOU SHOW A NET INCREASE OR DECREASE OF CASH FOR THAT PERIOD. AND THAT PERIOD, THESE ARE USUALLY LOOKED AT ON A QUARTERLY, SEMI ANNUAL, AND ANNUAL BASIS. NOW, JUST TO KEEP THE FINANCE PEOPLE BUSY, THEY DO THESE ALL THE TIME. BUT THEY'RE GENERALLY REQUIRED TO REPORT ON PERIODIC INTERVALS. AND THE FINAL OF THE 4 IS THE STATEMENT OF SHAREHOLDER EQUITY. REMEMBER, FROM THE BALANCE SHEET, WE SAID PART OF THAT IS THE SHAREHOLDER EQUITY, ALL RIGHT, SO THIS IS JUST TURNING THAT FORMULA AROUND AND SAYING THE EQUITY IS SIMPLY YOUR ASSETS MINUS YOUR LIEUTENANTS. AND IT LOOKS AT -- LIABILITIES. IT LOOKS AT WHO OWNS WHAT. SO WHO ARE YOUR SHAREHOLDERS? AND WHAT -- WHAT PIECE OF THE COMPANY DO THEY OWN? WHAT IS THERE VALUE? NOW, THIS IS HOW THEY ALL FIT TOGETHER. WE TALKED ABOUT THE BALANCE SHEET. ASSETS MINUS LIABILITIES EQUALS SHAREHOLDER EQUITY. SO WE START AT THE BEGINNING OF THE TIME PERIOD, AND THEN OVER THAT TIME PERIOD WE'LL CALL IT A QUARTER, A 3 MONTH TIME PERIOD, OKAY, WE HAVE THESE 3. YOU HAVE THE CASH FLOW STATEMENTS, SO WHAT'S THE CASH COMING IN AND OUT. THE INCOME STATEMENT. AND THE SHAREHOLDER EQUITY. AND SO YOU SEE THE NET INCOME FROM THIS STATEMENT FITS INTO THIS BOX RIGHT HERE WHICH IS CALLED RETAINED EARNINGS. OKAY. SO FOR THAT PERIOD OF TIME, OUR INCOME WAS THAT. AND IT GOES INTO THE SHAREHOLDER EQUITY. THEN THESE TWO STATEMENTS, THE CHANGE IN CASH AND THE CHANGE IN EQUITY, FIT INTO THIS ONE. AND SO THIS, WHICH IS THE BALANCE SHEET AGAIN, ANY CHANGES WOULD BE REFLECTED IN THE TOTAL ASSETS. AND THE TOTAL SHAREHOLDER EQUITY. NOW, UNLESS YOU'RE A FINANCE PERSON YOU DON'T NEED TO WORRY ABOUT THIS STUFF BUT YOU DO NEED TO KNOW IT BECAUSE THE FINANCE PEOPLE LIKE TO FINANCIALLY TWADDEL YOU. THAT YOU'RE SPENDING TOO LITTLE OR TOO MUCH, SO THEY NEED TO KNOW WHERE YOU'RE GOING TO GET THAT. AND WE HAVE TERMS. WHAT'S GROSS INCOME? WE TALKED ABOUT THAT. WHAT'S GROSS INCOME. >> TOTAL MONEY EARNED FOR A PERIOD OF TIME. EVERYTHING YOU THROW IT INTO THE POT. GROSS. DOESN'T MATTER HOW YOU EARNED IT. WHETHER YOU EARNED IT YOUR INVESTMENTS, SELLING PRODUCT OR ANOTHER WAY. HOW ABOUT THE GROSS PROFIT? MINUS BILLS, EVERYTHING EXCEPT -- I GOT TO LOOK HERE. IT'S THE PRODUCTION COSTS, SO THE GROSS PROFIT IS THE GROSS INCOME MINUS THE PRODUCTION COSTS. THEN YOU HAVE A NET INCOME. NET INCOME. GROSS INCOME MINUS ALL EXPENSES. REVENUE WHAT ARE REVENUES? >> [INAUDIBLE] >> THEY DON'T TEACH THAT IN Ph.D. SCHOOL, DO THEY? NOW THAT YOU KNOW THIS, YOU'LL GET AN MBA AT THE END OF THIS, I'LL AWARD YOU AN MBA BECAUSE YOU'VE BEEN ANSWERING THESE QUESTIONS SO WELL. SO REVENUES, WHAT ARE REVENUES? >> [INAUDIBLE] >> YEAH, THAT'S A FANCY TERM FOR SALES. THAT'S THE MONEY COMING IN. THE FINANCE PEOPLE TRY TO -- THEY WANT TO CONFUSE YOU. SO THAT'S OUR INCOME. NO, THAT'S OUR REVENUES. ALL RIGHT. HERE IS ONE. IF ANYBODY GETS THIS ONE, EBIT. THIS IS A REALLY FINANCIAL VIEW DO TERM. STANDS FOR EARNINGS BEFORE INCOME AND TAXES. WHAT THEY DO WITH THE -- THE REASON THEY USE THIS IS BECAUSE THIS IS A WAY TO COMPARE COMPANIES ACROSS DIFFERENT INDUSTRIES THAT MAY HAVE DIFFERENT TAX STRUCTURES YOU'RE COMPARING ACROSS INDUSTRIES. >> [INAUDIBLE]. >> YEAH, YOU DO. SOME COMPANIES WILL TRY TO HOCUS POCUS YOU AROUND, THEY MAY HAVE A PFIZER DO, THEY'VE DONE A TAX INVERSION. THEY SAY HEY, LOOK AT YOUR PERFORMANCE. YOU HAVE TO LEVEL THE PLAYING FIELD, SAY IF YOU WERE PAYING TAXES THIS IS WHAT IT WOULD LOOK LIKE. THAT'S EXACTLY RIGHT, THOUGH. YEP. >> KOGS? ANYBODY KNOW WHAT KOGS IS? COST OF GOODS SOLD. SO YOU LOOK AT THE PROFITABILITY OF YOUR PRODUCTS. COST OF GOODS SOLD. THERE ARE TWO ELEMENTS. VARIABLE COSTS AND THERE ARE FIXED COSTS. THE FIXED COSTS ARE THE SAME NO MATTER HOW MANY OF THEM YOU MAKE. SO THERE IS A COST OF RUNNING THE MACHINERY THAT'S A FIXED COST. THE VARIABLE COST WOULD VARY BASED ON THE AMOUNT OF PRODUCT THAT YOU PRODUCE. SO THAT WOULD BE THE SUBSTANCE THAT YOU USE. SO THAT WOULD COST MORE, THE MORE YOU PRODUCED. ANY ACCOUNTANTS HERE KNOW GAP? THIS IS AN AMERICAN TERM, AND AWAY, THESE RULES ARE CHANGING. THIS IS GENERALLY A -- GENERALLY SOMETHING -- ACCOUNTING PRINCIPLES. >> [INAUDIBLE] >> GEM HEY ACCEPTED -- GENERALLY ACCEPTED. THANK YOU. SHE'S THE ACCOUNTANT. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AN AMERICAN TERM WHICH IS A LITTLE BIT DIFFERENT THAN THE WORLD TERM, THE GLOBAL TERMS AND THE U.S. ARE SLOWLY GOING TO THAT. AND THIS IS A REPORTING CONVENTION SIMILAR TO WHAT A CLIA FOR THE LAB, IT'S THE STANDARDS BY WHICH ACCOUNTING NEEDS TO BE SHOWN. WHAT'S THE DIFFERENCE BETWEEN A PUBLIC AND PRIVATE COMPANY? [INAUDIBLE] >> EXACTLY. A PUBLIC COMPANY IS TRADED ON ONE OF THE STOCK EXCHANGES. IT DOESN'T HAVE TO BE HERE IN THE U.S. THERE ARE -- THE GLOBAL EXCHANGES AS WELL T PRIVATE COMPANY IS OWNED BY AN INDIVIDUAL OR A GROUP. IT'S SOLEY CONTROLLED BY THE OWNER OR THAT GROUP. WHEN YOU BUY STOCK IN A COMPANY, YOU'RE BUYING A PART OF A PUBLIC COMPANY. ALL RIGHT. NOW, MOST OFF THESE COMPANIES. -- MOST OF THESE COMPANIES, PARTICULARLY BIG ONES, HAVE MILLIONS OF SHARES. IF YOU LOOK AT THE FINANCE PEOPLE LIKE KARL ICON, THEY MAY OWN 20% OF A COMPANY. SO 20% OF THE SHARES OF THE STOCK. THAT MAY BE THE MAJORITY SHAREHOLDER. BECAUSE ALL THE OTHER SHARES, THE 80%, WOULD BE SCATTERED AMONG HUNDREDS OF THOUSANDS OF INDIVIDUALS. YOU CAN'T BUY STOCK IN A PRIVATE COMPANY THAT IS CLOSELY HELD. AND THE PROCESS THAT YOU GO THROUGH TO BECOME A PUBLIC COMPANY FROM A PRIVATE COMPANY IS CALLED AN IPO. INITIAL PUBLIC OFFERING. YOU'LL SEE THAT IN THE PAPERS A LOT. NOW WE'LL LOOK AT COMMERCIAL. THIS IS MY BACKGROUND, I KNOW THIS STUFF. THIS IS THE FUN STUFF. WHAT'S A BRAND IDENTITY? IT'S WHAT YOU SEE OF MY BRAND. FOR EXAMPLE, IF I WAS TALKING ABOUT AUTOMOBILES AND I SAID SAFETY, WHAT WOULD YOU SAY? VOLVA O, THAT'S THE BRAND IDENTITY THAT THEY WANT YOU TO SEE. AND THE BRAND IMAGE IS WHAT THEY PROJECT. IF YOU THINK ABOUT THE ADVERTISEMENT YOU SEE LATELY IN THE AUTOMOBILES, WHO IS TRYING TO HOW MUCH IN ON VOLVO SAFETY IMAGE? SUBARU. YEAH. SUBJECT.IS LOW. GET YOUR KID IN THE WACK, YEAH. THEY'RE TRYING TO HORN IN ON THAT. SO THAT'S THE IMAGE THAT THEY'RE PUTTING IT THROUGH SO THAT YOU SEE THAT. WHAT'S THE MARKETING MIX? YOU WON'T KNOW THIS ONE. THIS IS THE AMOUNT OF MONEY YOU SPEND IN MARKETING BY CHANNEL. SO FOR EXAMPLE, THE MARKETING MIX FOR BUDWEISER WOULD INCLUDE FAIR AMOUNT OF MONEY THAT IS SPENT ON TELEVISION ADVERTISING. THEY MAY ALSO SPEND IT ON RADIO ADVERTISING. THEY MAY ALSO SPEND IT ON THOSE PLACARDS YOU SEE WHEN YOU GO TO THE LIQUOR STORE. IT'S HOW THEY SPEND THAT MONEY. AND THEY DO THAT VERY SCIENTIFICALLY AROUND MIXING THE DOLLARS IN THERE WHICH HAS THE HIGHEST OVERALL OUTCOME IN TERMS OF REVENUES. 4Ps. YOU WENT TO THE TRANSLATIONAL SCIENCES THING, RIGHT? THESE ARE WHAT I CALL THE LEVERS. WHAT LEVERS CAN A MARKETER PULL TO SELL HIS PRODUCT. P1, PRODUCT. WHAT ABOUT THE PRODUCT GIVES IT ADVANTAGE OVER THE OTHER PRODUCTS? >> [INAUDIBLE] >> PRESENTATION, YES -- WAIT A MINUTE, GOT TO GET MY GLASSES. I WRITE THIS STUFF OUT AND I CAN'T READ IT BECAUSE -- I CAN'T SEE IT. PRODUCT, PLACEMENT, PRESENTATION -- SO HOW DO YOU GO TO MARKET? PRICE. CAN YOU CANE AN ADVANTAGE BY EITHER A LOWER PRICE OR HIGHER PRICE? THE OTHER IS PROMOTION. HOW DO YOU PROMOTE YOUR PRODUCT? AND THEN THE LIFE CYCLE. ALL PRODUCTS HAVE ONE. THE PRODUCT LIFE CYCLE IS THE CURVE OF THE REVENUES OVER THE LIFE OF THE PRODUCT. IF YOU THINK ABOUT A PHARMACEUTICAL PRODUCT, IT WILL BE LAUNCHED AND GENERALLY, THERE IS A FAIRLY RAPID UPTAKE OF THAT PRODUCT. OVER TIME, THE% OF CHANGE TENDS TO DIMINUTE NICHE, AND IT WILL LEVEL OUT, AND THEN IN THE PHARMACEUTICAL INDUSTRY WHAT HAPPENS? SOMEBODY COMES UP WITH A GENERIC, YOUR SALES GO DOWN LIKE THAT. SO IT'S A VERSION OF A NORMAL CURVE TO TRY TO GET UP THERE. MARK SHARE. >> [INAUDIBLE]. >> ABSOLUTELY. HOW MUCH OF THAT MARKET. IF THERE IS TWO PRODUCTS IN THE MARKET IT'S EASIER TO GET A LARGER MARKET SHARE THAN IF THERE IS 8 OR 10 PRODUCTS IN. THIS QUANTITATIVE, QUALITATIVE RESEARCH FROM A MARKETING STANDPOINT. YOU'RE DOING QUANTITATIVE RESEARCH RIGHT NOW. NO, NOT RIGHT NOW. BEFORE YOU CAME HERE YOU WERE. IN MARKETING THEY USE THESE, TOO. THE QUANTITATIVE IS THE ANALYTICS OF THE MARKETPLACE. THEY LOOK AT BEING PATTERNS, LOOK AT COMPETE SALES, LOOK AT A NUMBER OF THINGS. WHAT CAN WE TELL HERE. AND THE QUALITATIVE RESEARCH IS THE ACTUAL WHAT WE THINK OF AS MARKET RESEARCH. THEY GO OUT AND THEY'LL ASK CUSTOMERS, WHAT DO YOU THINK ABOUT THIS? THEY'LL ASK FOCUS GROUPS WHAT DO YOU THINK, AND THEY'LL DRAW CONCLUSIONS BASED ON THAT. SHARE A VOICE. YEAH, OKAY. SHARE A VOICE IS HOW YOU MUCH ONE COMPANY'S PROMOTION IS COMPARED TO PRO MOSE IN THE MARKETPLACE. THIS IS WHERE WE TALKED ABOUT COMMODITY PRODUCTS, HOW IMPORTANT MARKETING IS. YOU WILL SEE A TREMCORRELATION BETWEEN THE SHARE A VOICE AND THE MARKET SHARE T. THE MORE YOU ADVICE IT, THE MORE YOU SELL. AND A DISTRIBUTION CHANNEL. HOW AND WHERE IT'S GOING TO BE SOLD. PHARMACEUTICAL MARKET HAS THE MOST UNIQUE DISTRIBUTION CHANNEL ANYWHERE. WHY IS THAT? THE COMPANY THAT MAKES IT DOESN'T SELL IT TO THE PERSON THAT TAKES THE MEDICATION. THE DOCTOR HAS TO WRITE A PRESCRIPTION FOR IT. THAT PRESCRIPTION HAS TO BE FILLED IN A PHARMACY. AND THE PATIENT GOES DOWN AND PICKS IT UP. AND IT'S PAID FOR BY AN INSURANCE PROVIDER. SOME OF IT IS. NOW WE HAVE FEATURES, ADVANTAGES AND BENEFITS. WE'LL TAKE A LOOK AT THOSE NOW. SO THIS IS A PRODUCT. OKAY? SO THE FEATURES ARE THE PHYSICAL CHARACTERISTICS OF YOUR PRODUCT. OR SERVICE. I USE MY PEN AS AN EXAMPLE. SO YOU SEE IT IS A CROSS PEN. PHYSICAL CHARACTERISTICS ARE IT'S -- IT WAS AT ONE TIME CHROME. THE CHROME IS BEGINNING TO WEAR OFF. THIS WAS MY FATHER'S PEN, AT LEAST 60 YEARS OLD. FEATURES OF THE PEN. THE ADVANTAGES -- WHAT'S AN ADVANTAGE? >> [INAUDIBLE] >> CORRECT. HOW IS THIS PRODUCT -- HOW IS IT BETTER THAN THE COMPETITORS? ANYBODY EVER HAD A CROSS PEN, THE ONE ADVANTAGE IT HAS -- ONE OF THE FEW PENS THAT YOU CAN WRITE ON A VERTICAL SURFACE. ADVANTAGE. WHAT'S THE BENEFIT? [INAUDIBLE] >> THE PERSONAL -- MY PERSONAL ACCEPTANCE OF THAT ADVANTAGE. IT'S HOW I FEEL AND HOW PROFESSIONAL -- WHAT A PROFESSIONAL BUSINESSMAN I FEEL LIKE WHEN I CARRY A CROSS PEN. OKAY? YES. >> [INAUDIBLE] >> YES. PARTICULARLY IN A MARKETING AND COMMERCIAL SENSE, IT IS A COMPETITIVE MARKET OUT DR. THESE ARE ALL RELATIVE TO SOMETHING ELSE ON THE MARKET. YEP. >> SEGMENTATION. >> [INAUDIBLE] >> ONE STEP TOO FAR. IT'S HOW WE SEPARATE THE MARKET INTO VIABLE CUSTOMER GROUPS. OKAY. AND YOU CAN DO THIS IN A NUMBER OF WAYS. AND YOU CAN LOOK -- YOU CAN USE AN AGE SEGMENT, YOU CAN USE A GENDER SEGMENT, AND YOU LOOK AT HOW DOES YOUR PRODUCT PERFORM VERSES OTHER PRODUCTS EARN THAT PARTICULAR SEGMENT. AND THEN TARGETING. YOU GOT THERE. [INAUDIBLE] >> WHICH ONE OR ONES OF THOSE SEGMENTS DO YOU GO AFTER? ABSOLUTELY. YEP. AND THEN POSITIONING. WE TALKED ABOUT POSITIONING, WHEN WE TALKED ABOUT VOLVOs AND SUBARUS. WHAT IS THE MESSAGE YOU USE SO THAT YOUR CUSTOMERS WILL SEE THE -- THE CU STOMERS IN THE SEGMENT THAT YOU WANT WILL SEE THE ADVANTAGE OF YOUR PRODUCT. OKAY? SO WE TALK ABOUT VOLVO, WE TALK WITHOUT POSITIONING. SUBARU POSITIONS THEIR PRODUCT TO WHO? FAMILIES. PEOPLE WITH YOUNG FAMILIES, ABSOLUTELY. THAT'S THE SEGMENT WHERE THEY SAY WE'VE HAD -- WE HAVE AN ADVANTAGE, WE'VE TARGETED THAT SEGMENT AND HERE IS HOW WE'RE GOING TO GO AFTER IT. ARE THEIR ANY QUESTIONS THAT I CAN ANSWER? SO HOPEFULLY NOW YOU'LL HAVE A LITTLE BACKGROUND WHEN YOU GO TO YOUR INDUSTRY INTERVIEWS, AND IF THEY SAY OUR MARKETING TEAM IS LOOKING FOR THIS TO POSITION THEIR PRODUCT YOU'LL KNOW WHAT THAT MEANS. OR THEY'RE SAYING THAT WE'RE OPERATING AT A LOSS FOR THIS QUARTER, YOU'LL KNOW WHAT THAT MEANS. YES. >> [INAUDIBLE] >> I USE THE PHARMA EXAMPLES BECAUSE THAT'S WHERE I GREW UP. THIS WILL APPLY ACROSS ANY INDUSTRY. WHEN WE USED EXES FROM THE AUTOMOBILES, THEY DO THE SAME THING. THEY HAVE TO ACCOUNT FOR THEIR MONEY. THEY HAVE TO GO THROUGH THE R AND D TO DO THE -- TO GET THESE THINGS ON THE MARKET. >> [INAUDIBLE] >> CORRECT. THE TIMEFRAME IS SHRUNK. IN THE PHARMA INDUSTRY, THE CLINICAL AND PRECLINICAL STAGE TAKES ABOUT 7 YEARS, TO GET IT ON THE MARKETS. IN THE AUTOMOBILE INDUSTRY IT TAKES 18 MONTHS. >> [INAUDIBLE] >> WELL, THIS IS REALLY PRETTY GENERAL. AND THESE THINGS THAT YOU LEARN HERE WILL APPLY ACROSS ALL THOSE INDUSTRIES. AND EVEN THE ELECTRONICS. THEY ALL WILL HAVE TO DO THIS. THEY MAY CALL THEIR POSITIONS DIFFERENT THINGS, ALL RIGHT, THEY MAY HAVE IT ORGANIZED A LITTLE BIT DIFFERENTLY. BUT THEY ALL HAVE TO DO THESE THINGS THAT WE TALKED ABOUT. >> [INAUDIBLE] >> THERE IS DIAGNOSTICS. THE QUESTION IS, WHAT OTHER INDUSTRIES IN THE BIO SECTOR ARE THERE THAT ARE NOT PHARMA -- I'M SORRY, THANK YOU. DIAGNOSTICS, DEVISE, THERE ARE THE CONSUMABLES COMPANY. SO THE REAGENTS. THE COMPANIES THAT MAKE THE REAGENTS. THERE IS MEDICAL EQUIPMENT. THE ONES THAT MAKE THE MICROSCOPES, THE ONES THAT MAKE THE eEVEN THE VIALS AND THE CLASS WEAR THAT YOU WOULD USE. GLASSWARE THAT YOU WOULD USE. THERE ARE CONSULTING COMPANIES. SO CSOs. CLINICAL SCIENTIFIC ORGANIZATIONS, OR CROs. CLINICAL RESEARCH ORGANIZATIONS, THE ORGANIZATIONS THAT DO THE CLINICAL TRIALS. SO THERE ARE A WHOLE HOST OF -- IF YOU WANT TO SEE THE WHOLE HOST LOOK AT GO IN AND LOOK AT THIS PROGRAM. AT THE VERY BEGINNING OF THE PROGRAM, THERE IS AISLED THAT LISTS PRETTY MUCH ALL THE TYPES OF COMPANIES IN THE SCIENTIFIC AREAS. >> [INAUDIBLE] >> IT'S THE ONE -- LET ME GET THE OTHER -- INDUSTRY OVERVIEW AND JOB PACKAGES. THAT'S -- THIS IS ALL PART OF THE INDUSTRY CAREER SERIES. IT'S ON THE WEB, THE EASIEST PLACE TO GO, IT'S BEING PUT UP ON THE OITE YouTUBE CHANNEL. LORI JUST TOLD ME, WE DID FOUR OF THESE THE FIRST ONE IS NOW APPROVED. SO IT WILL BE THERE. YOU CAN ALSO LOOK BACK AND THEY WILL RERUN THESE, THIS SERIES, LOOKING AT AN INDUSTRY OVERVIEW. WHAT ARE THE COMPANIES WHAT, ARE THE KINDS OF JOBS OUT THERE? AND HOW YOU GET THE JOB PACK THINGS, INDUSTRY RESUME, COVER LETTER, THAT KIND OF THING. NETWORKING. WHAT DO YOU HAVE TO DO TO MEET THE PEOPLE WORKING IN THOSE POSITIONS? INDUSTRY INTERVIEWS, WE'LL WALK THROUGH THE INTERVIEW PROCESS, GIVE YOU TIPS HOW TO DO THAT, HOW TO IMPROVE YOUR INTERVIEWING SKILLS. THEN NEGOTIATING THE OFFER. WE JUST DID THAT ABOUT A MONTH AGO. HOW DO YOU NEGOTIATE. THESE ARE BEING PUT UP ON THE YouTUBE CHANNEL AS WE SPEAK. THERE IS ALSO SOME GOOD BOOKS THAT ARE HERE AND IN THE OITE CAREERS BLOG THERE IS A LARGE SERIES THAT ARE -- THAT'S -- DEDICATED TO INDUSTRY POSITION. >> [INAUDIBLE] >> THANK YOU FOR BRINGING THAT UP. THE QUESTION IS, WHAT IS NON TRADITIONAL CAREERS? HOOKS AT CAREERS THAT ARE NOT ACADEMIC PIs. IN TODAY'S ENVIRONMENT, MY VIEW IS THE ACADEMIC PI IS THE NON TRADITIONAL CAREER TODAY. YES. >> [INAUDIBLE] >> I CAN BE MY CONSULTANT BEST HERE AND SAY THE ANSWER IS IT DEPENDS. OH, THE QUESTION IS HOW CAN YOU TRANSITION WITHIN THE COMPANY AND -- SO HOW CAN YOU TRANSITION TO OTHER FUNCTIONS, OTHER ROLES WITHIN THE COMPANY AND THEN DO YOU NEED AN MBA, OR THAT KIND OF THING. AND THE ANSWER IS, IT DEPENDS. IT DEPENDS ON THE COMPANY. IT DEPENDS ON WHERE YOU ARE AND WHAT YOU WANT TO DO. WHAT I WOULD SUGGEST YOU DO IS NEXT WEEK ON FRIDAY, THE CAREERS SYMPOSIUM, THERE WILL WE PEOPLE THERE FROM ALL FUNCTIONS WITHIN THE COMPANY. THAT'S AN EXCELLENT QUESTION TO ASK THEM. AND LIKE I SAID, I'VE DONE PRETTY MUCH EVERYTHING THERE IS TO DO IN A COMPANY. PART OF THAT IS BECAUSE I MADE MYSELF AVAILABLE TO DO THAT. AND WORKED IN THAT WAY. >> BUT THE QUESTION [INAUDIBLE] >> THAT WOULD DEPEND ON HOW MUCH OPERATIONS YOU MAY HAVE IN YOUR BACKGROUND. ONE OF THE COMMON WAYS TO DO THAT, IF YOU'RE WORKING IN A SMALL COMPANY AND YOU GO TO A LARGER COMPANY. IN THE SMALLER COMPANY, YOU WOULD HAVE OPPORTUNITY TO WORK ACROSS FUNCTION. SO IT WILL BE DO THEY RECOGNIZE THAT IN YOUR BACK GROUND. AND AGAIN, I THINK THAT'S A QUESTION, I HOPE YOU CAN GO TO THE CAREER SYMPOSIUM. IT'S VERY GOOD. THEY HAVE PEOPLE FROM ALL INDUSTRIES, ALL FUNCTIONS WITHIN INDUSTRIES. THAT'S AN EXCELLENT QUESTION. HOW DID YOU GET WHERE YOU ARE. WHAT WOULD YOU HAVE DONE DIFFERENTLY? THOSE KINDS OF THINGS. OTHER QUESTIONS? ALL RIGHT, WELL, I SAID THAT IF YOU DID THIS YOU GET AN MBA. HERE IT IS! YOU GUYS WERE VERY GOOD WITH THE TERMS HERE. SO THANK YOU FOR PLAYING ALONG. AND I HOPE YOU NOW HAVE A LITTLE BIT MORE BACKGROUND IN HOW COMPANIES WORK WHEN YOU DO THAT.