Widely regarded CEO and leader of CONNECT, a technology and business accelerator dedicated to the rapid and sustained growth of high-technology and life sciences companies in the San Diego region.

Recently, Duane sat down with Dana Tennis of RetirementDNA to discuss a wide range of topics – the future of CONNECT, the challenges to innovation in biotechnology, as well as the residual effect of the recent stem-cell scandal in Korea.

Q:1 Duane, tell us a little bit about your background? How did you end up running an organization such as CONNECT?

I was born and raised on a small farm located in Henry County Iowa where I attended high school and college. After graduating from Iowa Wesleyan in 1972, I started my career as a pharmaceutical sales representative for Ortho Diagnostics, a Johnson & Johnson Company. My territory was Iowa and I covered virtually the entire state calling on the many small county hospitals. It was an exciting time for me as I learned a lot about science, sales and marketing.

In 1976, I was promoted to Division Sales Manager in Los Angeles where I was responsible for ten territories in the western US, Alaska and Hawaii – a big change from rural Iowa. From there I was transferred to New Jersey where I eventually headed the Transfusion Medicine business unit and had responsibility for managing all aspects of the business including research, regulatory affairs and manufacturing, all new experiences for me. In 1983, after ten years at J&J, I joined American Home Products (now Wyeth) as Senior Vice President of a diagnostic subsidiary called Analytab Products.  In 1984, I was promoted to President of Analytab and also given responsibility for an additional business unit, Sherwood Medical Products.

In 1985, I joined a biotech start-up, Otisville Biotech as its CEO in upstate New York and, in 1989, engineered the merger with a San Diego company, Fluoromed, which created Alliance Pharmaceutical. We moved all the operations for the company to San Diego and shortly thereafter, I had the good fortune of meeting Bill Otterson, the leader of CONNECT, the person most responsible for San Diego’s transformation into the center of one of the nation’s leading science and technology clusters.

I served on the CONNECT advisory board for many years where I learned so much from Bill and Mary Walshok, Dean of UCSD Extension and co-founder of CONNECT, about the underpinnings of the organization. I continued to be involved when Fred Cutler took over responsibility for CONNECT, as he moved to reorganize programs and make some of the necessary changes to CONNECT. I’m therefore honored to be part of this transformational organization.

Q:2 Tell us about CONNECT and where you see the organization heading in the next 5 years.

For an organization like CONNECT, it is important to be at the leading edge of change. It is our mission to focus on the “conditions” that allow a robust entrepreneurial community where innovation can thrive. Many of these conditions are common to all science and technology clusters and include great research, talented people and investment funding. Currently, we are involved in these requirements in our focus areas. Activities include the need to attract and retain talented foreign-born students that make up a large portion of our local graduate schools. These students represent an important part of our recruiting and we will need to address the shortage of visas to retain this talent. With regard to investment, the biggest challenge is to secure more “early stage” investment funding. There is a large gap between innovation and venture funding that we as a region need to address. We are working with many partners to explore the creation of San Diego Business Accelerators, one in life sciences and one in technology, to help fund and manage these innovations. A final initiative is to prepare our region to compete and partner in the most exciting emerging markets that are India and China. We have many associates and connections in these regions and want to be sure we, in our San Diego tradition of collaboration, share our resources so we can take maximum advantage of these opportunities. 

Q:3 Given your experience working for both a Fortune 500 as well as leading a start-up, how do you intend to incorporate your experiences into what CONNECT can offer?

The advantage of growing up in large organizations is that you benefit from the enormous amount of information sharing, training and experience. In fact, many of my generation of entrepreneurs were the beneficiaries of this experience. The current generation of entrepreneurs is different in that they may have little or no industry experience and are being asked to lead a start-up. To address this, we have started a series of workshops called FrameWorks to provide these bright leaders with the terminology and framework to think about the many disciplines they will now have to manage. We expect to have about 20 subjects, each taught twice a year, and include topics like finance, accounting, human resources, intellectual property, leases, marketing, branding, etc. These workshops will provide in one 3-hour session a “framework” and vocabulary of these specialties. Attendance is limited to 20 participants who include new CEOs, innovative faculty and future executives from existing industry.  

Q:4 Tell us about the recent alliances you’ve formed with a few organizations in town.

When I gave my introduction speech to CONNECT stakeholders, I talked about synergies with the many organizations in our community with a stake in innovation and entrepreneurship and how we might maximize our effectiveness by consolidating activities. Currently we have created alliances with four organizations – The Regional Technology Alliance (RTA), The MIT Enterprise Forum, The Tech Coast Angels and The Commercialization for Advance Technologies (C-CAT). Each has a fit with CONNECT and was incorporated differently – the RTA was merged and Tyler Orion, its executive director, became CONNECT COO. The RTA programs have become part of the CONNECT offerings and include FrameWorks and the Venture Roundtable among others. The MIT Enterprise Forum is an alliance with CONNECT and retained its identity and board and committee structure. The MIT Enterprise Forum adds an important learning and networking program to offer to the entrepreneurial community. We house and manage the events for The Tech Coast Angels, an important investment component for start-up companies and a long time CONNECT partner. Finally we conduct programs like Springboard for C-CAT for commercializing technologies from the defense industries that have domestic commercialization potential.  These alliances are managed by Nepi Ilgaz, who also joined CONNECT as part of the RTA merger.

We are also working to be more collaborative with our industry associations– particularly BIOCOM, CommNexus, the Software Industry Council, the San Diego Venture Group, and The Security Network­– to form stronger partnerships and to strengthen the continuum of support for our emerging companies throughout the region.

Q:5 I recognize the CONNECT model is duplicated in foreign countries.  Do you collaborate with any international organizations or institutes?

We entertain on average one group a week from all concerns of the world who come to San Diego to try to learn about our experience in developing the innovative science and technology clusters. In fact there are a number of CONNECT duplicates located in many US regions and internationally. These organizations fall under Global CONNECT, which is managed by UCSD Extension. We learn a great deal from these affiliations and often benefit from their visits and occasionally end up with partnerships or having their innovative start-ups open operations here in San Diego.

We have also learned, from our frequent visitors, to appreciate the spirit of collaboration which is unique to the San Diego region.  Industry Leaders like David Hale (CancerVax, Chair of CONNECT) and industry association leaders like David Gollaher (CHI) and Joe Panetta (BIOCOM) have helped us form more cohesive partnerships and contributed to establishing San Diego's presence as a leader in the global life science community.

Q:6 What piece of advice do you think is most important for entrepreneurs?

There is no single piece of advice, as there are so many aspects of starting and growing a company. One thing I tell many of the bright innovative people I meet is to first follow your dream – it is so easy to become discouraged, but if you believe, keep going –get all the help you can get from those that have gone before you – and finally, hire strong people that will give you their unfettered advice. 

Q:7 Do you believe our students are falling behind scientifically and if so, what can we do to get back to the top?

We are concerned about the science and math test scores of our young students. As our US economy continues to transform to an innovation- and technology-based economy, we will need virtually everyone to have the background and skills necessary to participate. I’m encouraged that this concern is gaining focus nationally. Locally we have two great charter high schools, High Tech High and The Preuss School that have proven that students from all backgrounds can excel given the right motivation and environment to learn. 

Q:8 With your marketing background can you through CONNECT offer a different perspective and voice to government officials to help them better understand key issues?

I have spent a lot of time in the political arena over the past 20 years, having served on numerous trade association boards including among others the National Biotechnology Organization (BIO), the California Healthcare Institute (CHI) and BIOCOM. I have also been active in the Lincoln Club of San Diego. Through these interactions, I have learned that it is so important to communicate how difficult it is to start and grow a business. At CONNECT, I feel I have an additional responsibility to communicate the importance of legislation that affects innovation. When investors do not believe that there are free and open markets or when they believe that there are restrictive regulations, they stop investing and that more than anything else slows innovation. 

Q:9 When you’re meeting privately with politicians, what message are you delivering about the biotech industry?

There are two major challenges to innovation with regard to biomedical products – regulation and reimbursement; if the FDA regulations are unclear or too risk-adverse, there will be less investment and fewer new drugs and devices. If there is not adequate reimbursement that is in line with the true value of the innovation, investors will not invest. It is hard enough to secure the investment to develop a high-risk new medicine, and therefore, it takes very little to discourage investors, in which case we all lose.

Q:10 What differences - political, economic or regulatory - are you seeing in foreign countries compared to the US?

With regard to innovation, virtually every developed country is trying to encourage innovation in science and technology. The US has been the undisputed leader in this global competition, but the lead is not secure by any means. Other economies are catching up including most notably China and India. While there is a lot of angst about these emerging economies, I see a lot of opportunity to partner with these innovators much as we did with Europe and Japan. If we do and continue to support the environment for US innovations, I think we will be well-served and remain the dominant player. It will require leadership and strong government policy in support of science and innovation.

Q:11 What impact, if any, do you expect on California’s initiative getting off the ground as a result of the recent stem-cell scandal in South Korea?

Well, the news from South Korea was indeed disappointing and a setback for the field. I don’t think anyone expected the degree of fraud in this research.  Nevertheless, the history of science and innovation is laden with large expectations and equally large disappointments. History has also demonstrated that persistence pays off and if we keep at it we eventually overcome the setbacks. I believe everyone in the stem-cell field is redoubling efforts to move the field forward again; I hope so, as many believe that the major breakthroughs in medicine in the next 25 years will come from this field. 

Q:12 Do you believe that San Diego’s recent political and financial problems are having any effect on recruiting companies to San Diego?

No – and besides I believe the worst is behind us –we have new leadership that is committed to get us through this tough spot – I have great confidence in Mayor Sanders and his COO Ronne Froman – they understand the importance of the science and technology clusters to the San Diego economy and their role in the well being of the City. They will advocate for K-12 education, for our research institutions and for innovation investment in our region. 

Q:13 We all know the strength San Diego offers as a biotech hotbed.  What weaknesses do we need to focus on to further improve our positioning?

Our biggest challenges deal with infrastructure and education. With the average price of a home over $500,000, we will depend more and more on growing our workforce locally, which means we need to address the K-12 education issue we discussed earlier. Also, we need to site a new airport if we are going to meet the future demand. Finally, the need for more roads and public transportation so workers can find affordable housing that does not require hours of commuting to work.

Q:14 Could we do for biotech companies what we do as a community for financing ballparks?  In other words, can we somehow use the tax dollars to bring companies and jobs to town?  Once we move past our fiscal crisis, of course!

I’m not sure we would ever want to use taxes to support industry directly – rather I would see the support going to infrastructure and to research institutions. Recall that just over forty years ago, the city leaders had the wisdom to designate Torrey Pines Mesa as a scientific research zone, which is now the heart of both the research institutions and the biomedical industry. Decisions like these were wise and I would support more use of land set-asides for such purposes.  

Q:15 San Diego has many great places to escape to your thoughts. Where do you go to get away and think?

I live near the ocean and find it to be inspiring. I spend time in the village of La Jolla and enjoy the small unique setting. I also go to the gym regularly and find I can do a lot of thinking as I try to forget the part about the workout.

Q:16 When you and your wife want to enjoy a quiet dinner for two, where is your favorite place?

Sante in downtown La Jolla is a great restaurant in a unique local setting and we have known Tony, the owner, ever since we moved to San Diego. Ask Tony to make pasta with truffles when they are in season! 

Q:17 Duane, it’s time for our classic question. What is the Roth signature dish to prepare? Set the ambiance for us as well. What wine would accompany your dish and what music selection would fill the room?

Bone-in New York steak on the grill – “charred rare” and a bottle of Titus “Lot 1” that goes beyond red to “purple”. The music of late is by the crooners like Dean Martin.

Thanks, Duane.