Q&A with CEO of Novus Biologicals

Mainsail Partners By: Mainsail Partners  |  November 1, 2012

Karen Padgett is the CEO of Novus Biologicals, a company she founded in 1996 to help scientists find and purchase the right biological materials for their research. Since then Novus has evolved into a global e-commerce company with over 180,000 products serving scientists and researchers worldwide.

Can you explain exactly what your company does? And what role does e-commerce play?

We produce, test and distribute proprietary antibodies, as well as licensed antibodies from universities and research institutions to aid researchers in the study of diverse disease processes. We stay on top of research trends through reading scientific journals and collaborating with leading-edge researchers around the world.

The importance of our web site and making our products discoverable online is threefold: First, just as in most industries today the scientific community starts its research process online to find companies like us which sell products of interest—in our case, antibodies for scientists. Second, our Web site is a destination for our customers to find relevant information on our products, as well as the pathways and diseases they are related to. And of course our Web site is ultimately designed to facilitate purchase once a scientist or researcher finds what they are looking for.

How did you get started?

Like many entrepreneurs I started the business out of my house. As if starting a new company weren’t hard enough, I did it while I was pregnant with twins and already had a two-year old. I had previously worked for a biotech company but had a vision for a business that was more personalized in terms of customer service, and could offer antibodies that are often difficult for scientists to find. We ran the business out of my house for a year and mainly relied on direct mail to reach customers. But we quickly grew into a global enterprise that now sells products into 60 countries, with 180,000 products marketed namely through our state of the art Web site, email and scientific conference attendance.

For years you were a bootstrapped company, building Novus only with your credit cards and savings account. Tell us about your decision to bring in an equity partner.

About four years ago a deal happened in our space and we began receiving numerous calls from banks and private equity firms. We weren’t looking to sell, but it was also about that time we began to feel bringing in an outside partner could help us solve some of our challenges—most of them related to our fast growth. We needed to add to our management team, build out our infrastructure and update some of our technology, among other initiatives, if we wanted to scale the company. The fact that Mainsail had helped other bootstrapped companies with similar issues really resonated with us and pushed us to engage with them. I also recognized that bringing in an equity partner would generally allow us to get more aggressive in our approach to growing the business.
Some of the people advising us, interestingly, were pretty negative about the private-equity industry. They said we’d get loaded up with debt or lose control of our company. But when we met the Mainsail team, we were basically struggling to find something we didn’t like about them. Trust and integrity is very important to me, so I wanted to make sure we found a partner we had the utmost confidence in. And that’s what we did.
My takeaway from the experience is that finding the right partner, and bringing in the right partner at the right time, are the two most crucial aspects of bringing on an equity partner. If we had raised capital earlier I think we might have left some value on the table. If we had brought on a partner later, I’m afraid we could have missed some opportunities.

What are some of the specific challenges you’ve faced as the company has grown, how have you successfully addressed them?

One of our biggest challenges related to technology. We felt we had great products, and there was a robust market for them, but for a long time we weren’t using best practices in digital marketing or really robust, back-end IT platforms to support them. We had a lot of silos of data and processes that didn’t talk to each other.

We now have an internally developed product called “Product Central” that serves as a sophisticated data warehouse for all of our business data. This has boosted efficiency and sales and also helped us do better budgeting and financial planning. We’ve also adopted new products like Salesforce.com and revamped our external-facing Web site. One of our other challenges is related to how to address the market need overseas. We now have an office in Canada and one in Cambridge in the U.K.—expansion that we were able to do partly because of all the internal IT improvements we made to tie our systems together and improve the integrity of our data.

What’s next for Novus?

We are continuing to focus on improving our Web site and adding high-quality products with extensive data. More broadly, we look forward to further global expansion in 2013.

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