Watch or listen to the interview here: https://www.crowleylawllc.com/podcasts/from-concept-to-corporation-navigating-entrepreneurship-with-michael-johnson/
Introduction to the Podcast
Philip Crowley: Welcome to the “From Lab to Patient, Garage to Market” podcast with your host, Phil Crowley. In each episode, we dive into topics crucial to professionals serving the tech startup community. You can find our show on major platforms like YouTube, LinkedIn, Facebook, Apple Podcasts, Spotify, and on our website, CrowleyLawLLC.com. Now, here’s the host of “From Lab to Patient, Garage to Market,” Phil Crowley.
Meet Michael Johnson: Innovator and Entrepreneur
Philip Crowley: Hello and welcome to the podcast. I’m excited to introduce today’s guest, Michael Johnson, President of the New Jersey Innovation Institute, a key hub for innovation in New Jersey. It’s affiliated with the New Jersey Institute of Technology, one of the state’s premier research institutions. Michael is an entrepreneur who’s navigated the challenges of building a company, and I think his journey will resonate with our audience. Michael, welcome to the show.]
Michael Johnson: Phil, thanks for having me. I’m excited to be here today.
The Journey to Entrepreneurship
Philip Crowley: Michael, you had great success in your Ph.D. program at Rutgers and could have pursued an academic career. What inspired you to take the harder path and start your own company?
Michael Johnson: That’s a great question. For me, it started when I worked at NASA during an internship after undergrad. My family didn’t have entrepreneurs—my father was a doctor, my mom a teacher—so entrepreneurship wasn’t something I was exposed to growing up. But I always liked the idea of working for myself. While working at Johnson & Johnson as a co-op, I realized that to make a big impact, starting a company was the way to go. That was the spark. Seeing companies like Facebook, SpaceX, and Tesla showed me what was possible. The stars aligned when I met another Ph.D. student who invented a cool technology. I had the passion for science, and this felt like the perfect outlet for it. It wasn’t something I planned, but it matched my personality and drive.
Building a Business from Scratch
Philip Crowley: So you didn’t come in with a traditional MBA or business background. You had a great idea, passion, and a co-founder. What were some of the early surprises when you started your business?
Michael Johnson: We definitely did things backward. We had a solution looking for a problem. My co-founder, Tom, had developed a new imaging technology at Rutgers, but we didn’t know what problem it would solve at first. We just knew it was cool. We had no formal business training, so we had to figure things out quickly. We made a lot of mistakes—our first financial model didn’t even make sense—but we learned fast. The process of learning was key. As a Ph.D., you’re trained to learn, and that helped us navigate the business world by reading, networking, and attending courses.
Overcoming Sales and Marketing Challenges
Philip Crowley: Many technologists struggle with sales and marketing. How did you handle those areas as you grew the business?
Michael Johnson: It was definitely a challenge. Neither Tom nor I had any experience in sales or marketing, but we approached it scientifically. We tested different approaches, learned from our mistakes, and adjusted. Eventually, we developed a strong process—offering lunch-and-learns with pharma companies where we’d present our work and ask questions. That approach worked well because it led to valuable conversations and new clients. Over time, we refined our sales strategy and trained our team to replicate our successes.
Networking and Building Relationships
Philip Crowley: You were able to attract the attention of Thermo Fisher, a Fortune 500 company. How did that happen?
Michael Johnson: It wasn’t easy. We couldn’t just call them up and pitch our idea. We had to figure out who the key people were and build relationships over time. That often meant attending trade shows, conferences, and networking events. We’d reach out on LinkedIn, get introductions, and eventually, we knew all the key players in our space. It took time, but persistence paid off. Once you’re on their radar, and they see you’re working with their competitors, they take you more seriously.
The Importance of Long-Term Relationships
Philip Crowley: You made a great point about building relationships for the long term. Whether with investors or potential clients, it’s important to nurture those connections. Can you speak to that?
Michael Johnson: Absolutely. I always tell our team that the people we’re interacting with today will likely be leaders somewhere else in the future. Building positive relationships now will pay off down the line. It’s crucial to be patient, keep the long-term view in mind, and follow through on your promises. If you tell an investor or a client what you’re going to do, and then you actually deliver on that, you build trust. And that trust is everything in business.
Reverse Due Diligence on Investors
Philip Crowley: When it comes to investors, it’s often said that startups should do their own due diligence. Can you share your experience with that?
Michael Johnson: It’s important, but it can be hard because, often, you don’t have a lot of options. You might talk to 160 investors and get 159 no’s. So when you finally get a yes, you might not have much leverage to negotiate. However, if you do have options, it’s essential to understand who you’re partnering with. You should call around and talk to other founders who have worked with that investor. In our case, we were more focused on due diligence during our acquisition process when we had multiple offers. We wanted to make sure we chose the right partner who would help us grow and take care of our team.
Philip Crowley: Thank you, Michael.
The Acquisition Process
Philip Crowley: Let me take a brief moment to introduce our viewers to Crowley Law. We’re a boutique law firm with big firm expertise and small firm care and attention. We focus on helping life sciences and technology entrepreneurs take their ideas from the lab to the marketplace, enriching the lives of many. As a former physicist and in-house counsel at Johnson & Johnson, I understand the challenges of R&D and commercializing great ideas. Our team of attorneys is passionate about providing cost-effective services to our clients. Please keep us in mind. You can reach us at [email protected]. We’re here to help. Michael, could you explain more about the process you went through when looking for an acquisition partner? What should our participants expect in that process?
Michael Johnson: It’s a very personal process. You’ve built the company, poured your heart into it, but there comes a time when you realize it’s time to sell or bring in someone to help grow the business. For us, we had just managed through COVID—a stressful period with challenges like capital and client management. We actually grew during that time, which was great, but we realized that the surge in life sciences funding, which fueled our success, might not last.
We worked with a lot of venture-backed companies and smaller biotechs, and their valuations were skyrocketing. But Tom and I saw that this bubble would eventually slow down, which would affect our growth and valuation. We knew if we plateaued, our valuation would decline. We sold because we foresaw this slowdown. Since the sale, we’ve seen companies that didn’t sell lose valuation even as their revenue grew because the growth rate stalled.
We decided to sell while the market was strong. BICO offered us a great valuation, and they also committed to investing in our growth and allowing us to make acquisitions post-sale. This helped us meet our objectives, take money off the table, and continue growing the business. We considered other acquirers, including private equity firms, but we didn’t want to cut R&D or make decisions that would negatively impact employees. In the end, we chose what was best for all stakeholders: shareholders, employees, and ourselves.
In retrospect, we made a good deal. All our shareholders saw significant ROIs. However, not everyone was initially on board with selling.
Philip Crowley: Who helped you make that decision? It sounds like there were discussions, not just a unilateral decision.
Michael Johnson: In every transaction, shareholders have different views. Some want to sell, others want to keep growing. I was the one pushing to sell because I knew the business and the market best. We didn’t use an external advisor—we handled the process ourselves. Tom and I knew all the potential acquirers personally, so it was more of a peer-to-peer negotiation. Typically, that’s not how things work, but given our company size, it was effective.
We did consult with external advisors. Some founders regretted selling too early, others wished they had sold sooner. It’s about applying their insights to your situation. Some shareholders were unhappy at the time, but looking back, they now see it was the right call as the market deteriorated.
Life After Acquisition
Philip Crowley: You successfully sold your company and joined a larger corporation. Was there a culture shock going from an entrepreneurial role to a corporate one?
Michael Johnson: People often assume that entrepreneurs operate independently, but there’s always someone you’re accountable to, whether it’s shareholders or a board. While you have more autonomy in a startup, once you’re part of a larger organization, you have to navigate bureaucracy and politics. It’s different, but it’s not a shock—just part of working within a mature company.
That said, many founders step aside as their companies grow because they don’t want to deal with the complexities of managing a large organization. For me, it was an opportunity to gain experience and expand my knowledge, particularly in areas outside of life sciences. At the New Jersey Innovation Institute (NJII), we work in sectors like defense, healthcare, and education, which is a great learning experience.
I’m especially passionate about translating university research into commercial ventures. Many faculty members create great innovations, but they don’t necessarily want to turn them into businesses. Our focus at NJII is to help with that translational research and build companies around these ideas.
Future Vision for NJII
Philip Crowley: You’ve aligned yourself with a leading research university. What’s your vision for NJII?
Michael Johnson: Our strategic plan aligns with the university’s goals through 2030, and our focus is growth. We currently do about $40 million in contracts with the Department of Defense, Department of Health, and other agencies, but we’re looking to expand. One of the exciting initiatives is building a venture studio. We’ll invest in ideas from faculty and students, partnering with corporate sponsors to fund and develop companies. This is a passion project for me, and it aligns with our mission to spur innovation in New Jersey.
We’re also expanding into artificial intelligence (AI) and machine learning (ML). The goal is to help small and midsize businesses adopt AI into their operations without the high costs of consulting firms. This will give students experiential learning while helping businesses implement AI solutions. We’re aiming to be at the forefront of innovation in New Jersey.
Philip Crowley: That’s fantastic. If our viewers want to get in touch with NJII, where can they find you?
Michael Johnson: The best place is njii.com. We also have a newsletter and are active on LinkedIn.
Philip Crowley: Thank you, Michael, for pulling back the curtain on the acquisition process and sharing insights. For our viewers, Crowley Law is here to help innovators follow the same path. Visit our website at crowleylawllc.com for more information and resources.
