"Shared lab spaces provide a streamlined launchpad, offering benches as well as a diverse network of industry mentors.
Johannes Fruehauf recognized a need for co-working laboratories — flexible rental lab spaces with shared equipment and consumables — a few years before he sold his first biotechnology spin-out company, Cequent Pharmaceuticals, based in Cambridge, Massachusetts, in 2010. At the time, he had started providing wet-lab consulting services to venture capitalists, so they could see whether he could replicate results from start-up companies that they were considering investing in. Some of those small companies asked whether they could rent a corner of his lab.
“I realized that this was the better business, and we embraced this idea,” says Fruehauf. His first venture, BioLabs, was launched in 2009 in Cambridge, initially offering fully equipped single bench spaces. As chief executive, he has expanded the franchise to nearly a dozen locations across the United States, as well as to Paris and Heidelberg, Germany. It is supported by sponsors, including Thermo Fisher Scientific in Waltham, Massachusetts.
In 2013, Fruehauf launched LabCentral, a grant-funded non-profit business that now runs three co-working labs in Cambridge, as well as several others there that it runs in -collaboration with other institutions.
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Constructing co-working labs is “more of an art than a science”, says Fruehauf. But there are common elements. “If you were to visit any one of our labs, you would see a lot of glass in use, and very little privacy,” he says. This may seem counter-intuitive in labs that are shared by a number of start-up companies but, Fruehauf says, it’s designed to create a sense of community, which is key to the success of the co-working model.
The co-working lab is becoming the preferred home for many biotech start-ups. Rather than spending time and money creating their own labs, which could cost millions of dollars and take up precious time during these companies’ early days, they can rent venues that offer anything from one bench in a shared lab to an entire floor of ready-to-go lab space — plus a supportive community of experienced innovators and mentors to cushion the journey to commercial development.
Given the current squeeze on biotech venture funding, could this make the difference between success and failure?
Accure Health, which uses artificial intelligence to develop precision medicines, found that one of LabCentral’s co-working labs provided a supportive environment. (Last year, the team moved out owing to a three-year limit on company leases.) The company’s founder and chief executive, Jessica Sang, says that it benefited from the informal training and mentoring that its staff received, which helped them to develop their business skills; the experience, she jokes, was “probably even better than a mini MBA”.
Starting up spaces for start-ups
Investor and entrepreneur Daphne Teo set up NSG BioLabs in Singapore in 2019, after her experiences of starting biotech ventures. “Our companies were finding it very difficult to find good infrastructure,” she says.
“Universities are happy to support a lot of these companies, but often can’t once they reach a certain size.”
Teo points to the financial benefits of co-working labs. “Right now, capital is constrained, so why not just rent a lab space that’s more flexible?” And Erik Lustgarten, a specialist in creative research environments at the Boston office of the architecture firm Gensler, highlights both speed and money as key attractions. The co-working model gives a boost to creative people, he says, because it moves other concerns off the radar and lets scientists focus on their ideas and innovations.
Co-working labs have some similarities to the incubators run by universities to help very early-stage companies.
But to succeed, they must be connected to a wider innovation community, says April Giles, vice-president of business development at Fitzsimons Innovation Community (FIC), a co-working space at the University of Colorado’s Anschutz medical campus near Denver. Opened in 2000, it now houses 80-plus organizations.
“It’s really about that holistic network to help start-ups make more strategic decisions faster, so they don’t have to spend as much capital,” says Giles. At FIC, companies collaborate to share equipment, so no company is slowed down by lack of access, and they often share employment and business opportunities. Giles says that one example of this was a commercial manufacturing company that requested help connecting with a campus hospital that it wanted to supply.
The business of science
Sang says that easy access to equipment and supplies was one of the highlights of Accure Health’s stay at LabCentral. “They have almost everything ready for you — pipette tips, tubes,” she says. Most co-working labs provide distilled water, ice machines, autoclaves and incubators. Plus, more specialized equipment is available to share.
Virginia Burger’s first company, a drug-discovery platform known as New Equilibrium Biosciences, started at BioLabs in 2020 and moved to LabCentral in 2021, where it used shared plate readers and a mass spectrometer to analyse proteins. “The number of people using LabCentral made it very easy to have access to plenty of machines,” explains Burger, now chief executive of NEQ Bio, a computational biophysics company in Boston.
Business models differ between co-working labs, but the majority include costs for shared equipment, known as bench fees, in a company’s rent. In some cases, there will be sign-up time slots; in others, equipment will be borrowed and used in the lab space of a particular company. Other co-working labs have extra equipment available to rent. Teo says that NSG BioLabs includes more than 300 types of equipment in its rental and provides tenants with group discounts from suppliers; such discounts would otherwise be difficult for individual start-ups to negotiate. Giles says that back-up generator power is probably one of the most frequent requests at FIC. It also provides access to 54 fully equipped core labs that are available for specialized areas of research, including immunological methods, biostatistics and genetics.
The availability of a cell-culture core facility led Melissa Krebs, a chemical and biological engineer at Colorado School of Mines in Golden, to set up her company GelSana Therapeutics at FIC at the end of 2020. The company is developing innovative hydrogel wound dressings. “It was basically impossible to rent space at my university,” says Krebs. “FIC was offering one lab bench and one office and so I jumped on that.” She came to appreciate the wealth of resources available, especially the cell-culture lab, which allowed GelSana to grow cells to test its hydrogels. “It was nice that it was already there, in a separate room, because it minimizes traffic and the potential for contamination.”
Made for business mentorship
Co-working labs offer more than lab space and kit, however. When he set up his first company as a postdoc, Fruehauf says that he benefited from the advice of colleagues who had set up their own companies, and he wanted to provide the same sort of mentorship to others. “Most start-up founders haven’t gone to business school; most never took a finance class. But they need to learn about these things,” he says. So, structured mentoring support for clients is a big focus of what his labs offer.
Sang, for example, had access to six mentors, who would be available for weekly discussions. “My mentors didn’t just give me a pat on my shoulders, but really very specific, honest feedback about the things that we should be doing and things we shouldn’t,” she explains. During several meetings with mentors, she was given advice on how to pitch to different types of investor, including detailed suggestions on slide-presentation revisions and audience engagement. “I found those constructive critiques not only helped me deliver a much clearer story, but also further improved our business strategies,” she adds.
Teo also provides this kind of support at NSG BioLabs, including advice on how to incorporate a company, where to find a good intellectual-property (IP) lawyer and even how to set up payroll systems. “We also have a group of advisers that have taken companies from spin-out all the way to NASDAQ-listed,” she says, referring to the US stock exchange. “At any point, they’re just a phone call or e-mail away.”
Lin Zhaoru co-founded and is chief operating officer of AbAsia BioLabs, a small manufacturer of reagents for research and diagnostics, based at NSG BioLabs. For her team of four, many of the advantages were social. “It’s nice not working in isolation,” she says.
Before she moved into a co-working lab, Sang didn’t really understand when people spoke about its sense of community. But after working in one, it became clear that it offers a safe environment in which to share the experiences of setting up a company — including what works and what doesn’t.
Burger agrees that the sense of community is an important asset. “Things that we needed, like a certain pipette tip, or something small like that — a bench next to us would say, ‘You can use ours.’” And she found that people were willing to share their expertise — a colleague of hers helped others with nuclear magnetic resonance spectroscopy samples, then others taught him how to use a biodetection technique called surface plasmon resonance to study protein–protein interactions.
Designed for innovative ‘collisions’
The development of these co-working communities might seem seamless to those working there, but Lustgarten says that a lot of thought goes into designing them — a process that Fruehauf describes as “reducing friction and increasing collisions”.
The spaces cultivate community through social and educational events for tenants, “ranging from scientific seminars to finance meetings and teaching about intellectual property”, says Fruehauf. At LabCentral, the spaces also encourage purely social activities, including launch parties at an art gallery in one of the labs, which puts on rotating exhibitions from local artists.
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Burger’s company was the recipient of a ‘golden ticket’ — awarded through a scheme that several co-working labs run in which an external, big-pharma company pays a portion of the first year of bench fees for a start-up firm. For New Equilibrium Biosciences, the golden-ticket sponsor was Servier Laboratories, based outside Paris. The application process to gain a golden ticket was itself an invaluable networking experience, says Burger. “We got to meet with teams from many different pharmaceutical companies, as we were applying for all of their different golden tickets. It gave us a natural way to be introduced to companies who are interested in what we were doing.”
Fruehauf says that most of the leading pharmaceutical companies now sponsor the golden-ticket schemes at his co-working labs, because it allows the firms to get a bird’s-eye view of coming investment opportunities. Of course, the start-ups that accept a golden ticket are still free to pursue relationships with other companies. LabCentral is also running its own initiative, called Ignite, which provides golden tickets for start-up founders from under-represented groups.
Co-working labs are not only for start-ups. At FIC, a mixture of smaller and medium-sized companies creates a diversity of strengths and perspectives that can be shared between firms, says Giles. The newest co-working lab that FIC is developing will mix start-up lab space with what it calls graduation space, for larger units. The campus also plans to include manufacturing facilities for cell and gene therapies.
NSG BioLabs also houses some large multi-national companies, including contract-research and manufacturing organizations. “Fifty per cent of our clients are actually large multinationals from the US, the UK or Europe, who want to start a subsidiary in Singapore but don’t want to spend a year building a lab,” says Teo. Larger companies usually have their own private labs, but she says that a lot of them are starting to see the benefits of sharing, such as generating new partnerships.
The success of the strategy has led some big companies to set up their own co-working labs, at or near their own research-and-development (R&D) facilities. For example, the Japanese pharmaceutical company Eisai has set up co-working neuroscience labs at its R&D site in Cambridge, in partnership with BioLabs. Bayer’s Co.Lab, also in Cambridge, is designed to support entrepreneurs in cutting-edge cell and gene therapies, and is co-located with the Bayer Research and Innovation Center. Fruehauf is launching a similar facility outside Paris, at Servier’s R&D labs; it is designed to host 20 companies and more than 100 scientists.
One concern that many start-ups have is whether such open co-working environments endanger the intellectual property that small companies are developing, or their competitive advantage. “It’s always a question, but never an issue,” says Fruehauf. “We’ve started more than 600 companies in this network of labs, and there has not been a single such issue.” Fruehauf’s organizations are careful to teach their tenants to keep records and store their notebooks safely. “But that doesn’t mean we need to build vaults and closed doors and walls,” he adds. “We can play with transparency and visibility much more than the industry typically allows itself.”
Burger’s experiences match this. “There’s an element of trust, but it wouldn’t make sense to be there with any goal in mind other than to work on your own company,” she says. This approach works well for most biotechnology ventures, because peering into someone’s petri dish isn’t likely to result in a stolen idea.
But Lustgarten concedes that it might not work in all scientific areas. “Where it gets interesting is when there’s hardware involved, and there are things that are very clearly prototypes and the IP is really on display.” For example, Lustgarten points to The Engine, a co-working space at the edge of the Massachusetts Institute of Technology campus in Cambridge that is focused on ‘tough tech’, which aims to solve the world’s biggest challenges through breakthroughs in science and engineering. The space includes some private lab areas for working away from the public gaze.
Teo has chosen not to allow direct competitors to inhabit the same NSG co-working labs. “Some of my own companies are there and I wouldn’t want competitors to be in that same space,” she says. Given that NSG BioLabs has now grown to three sites in Singapore, there is usually an alternative.
Both NSG and Fruehauf’s BioLabs plan to expand into more territories. And a 22-storey co-working lab building planned for the Canary Wharf area of London is slated to become the largest life-science building in Europe.
The biotech industry seems ahead of the curve in using co-working labs, but Lustgarten says that “other tech areas are going to catch up”. He is particularly excited to see more facilities bringing together different disciplines, including chemistry, biology, engineering and software, to innovate solutions for large-scale world problems. Fruehauf is already expanding his mission at BioLabs to include companies that are using biotechnology to create new materials or tackle climate and environmental issues.
For start-ups looking for a home, Sang cautions that not all co-working labs are equal. Some have better equipment and services or are just geared towards certain specialities. She advises: “If you’re thinking about starting a company, try to visit a few just to see which one is the best.” [1]
1. Nature 626, 221-223 (2024) By Rachel Brazil
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