Not all Small Business Expert Providers care very much about money. Many of us have packages from many years in pharma, but are staying involved to contribute value. Some of us, when we have too much work, freely and happily provide references and introductions to clients and other independent experts in the name of Goodwill. This is great!
Others of us expand our practices to subcontract other independent experts, and enjoy the benefits and mark ups of growing one’s “Brand”. As small businesses, we are constantly on the lookout for additional opportunities and growth. Maybe we even have or are considering hiring full time employees.
In all of these scenarios are the issues of Business Development and Mark Ups- where does the work come from, who owns the client relationship and/or contract? In any business school, anywhere, one will learn that any subcontracting warrants at least a 30% mark up, just to cover the costs of administration and Brand risk. Anything above 30% is considered profit.
LifeSciHub appreciates traditional business practices, but also sees two powerful factors that warrant another, more innovative approach:
- In drug development, not all subcontracting impacts one’s Brand. In fact, the convenience of reducing contracting often prompts drug sponsors to utilize preferred providers not for their expertise, but because utilizing an already established contract is far easier than dealing with internal procurement, legal or HR. In these scenarios, the contract ownership is valued more than brand expertise. In other words, the middleman is empowered to pull 30% or more from an engagement simply for contracting and ongoing payment processing, not for project management, owning project risk, or anything else. The engagement operates independently.
- More importantly, 30% or more mark ups are not favorable for independent experts beyond a single middleman, because the only place to find that additional 30% (in the event of a second middleman) is out of the Supply’s pocket- Demand (drug sponsors) have a limit of what they are willing to pay for any given hourly expert.
Essentially, traditional business practices are clunky and inefficient.
Against this backdrop is the fact that we are living in an increasingly networked world. Facebook and Linkedin have shown us that personal and professional networks have unimaginably high, quantifiable value. That value has yet to be realized by the owners of those actual networks, as Zuckerberg, MSFT and their shareholders laugh all the way to the bank.
This is the problem that LifeSciHub’s Connector Model seeks to innovate. LifeSciHub puts a quantifiable value on one’s professional Connections on both the Supply and Demand side of on-demand drug development projects. The intention is to provide passive revenue streams to small, independent businesses, expanding their capacity to earn revenue beyond their own billable hours or own business developed opportunities, without adding additional administrative burden or Brand risk of any kind.
Another innovation: the LifeSciHub Connector is predicated on Radical Transparency. All fees are know to all parties- Supply knows what Demand is paying and what LifeSciHub, and the Connector/s, are receiving. Likewise, Demand knows what Supply is receiving, LifeSciHub fees and Connectors. LifeSciHub discloses its entire Profit and Loss to all users of the platform (Supply, Demand and Connectors for all active or previous projects) annually, and the LifeSciHub Quickbooks file is avaialble for auditing by any user at any time upon request.
In that spirit, LifeSciHub is pleased to share the Connector 2023 terms, below. As you read these terms please note that you do not have to be working projects through LifeSciHub, or change your current practice or business in any way, in order to benefit from being a LifeSciHub Connector.
Questions and comments welcome, scroll down for a place to post any and all, and, as always, please feel free to reach out to Sheila Mahoney, Current Administrator of LifeSciHub, directly at sheila@LifeSciHub.com.[The following is an excerpt from LifeSciHub’s 2023 Expert Provider Agreement]
Exhibit E: EP 1st Degree Connector Model- 2023
For the full year of 2023, ending December 31, 2023, and in conjunction with being a User of LifeSciHub, defined below, LifeSciHub enables Userss to monetize their network assets by acting as “Connectors”.
- A Demand Connector results in: a Hiring Entity (HE) posting a project to the LifeSciHub Platform and/or establishment of a Master Services Agreement (MSA) between LifeSciHub and the HE. This is only available for drug sponsor HEs for which LifeSciHub does not already have an MSA in place. Once an MSA is established the Demand Connector will earn revenue on all projects as described below, permanently.
- A Supply Connector makes first introductions to Expert Providers (EPs) that LifeSciHub does not already know. Should the EP/s be selected for projects through the LifeSciHub platform the Supply Connector will earn revenue on that project as described below, permanently.
- The contracting and payments of all projects will be processed in full by LifeSciHub, including all business administration including contracts, timekeeping, invoicing and payment processing.
- Connector Compensation:
|Scenario||LifeSciHub Mark Up||Connector- Demand||Connector- Supply|
|LifeSciHub + No Connector||0.2||0||0|
|LifeSciHub + Demand Connector||0.15||0.05||0|
|LifeSciHub + Supply Connector||0.15||0||0.05|
|LifeSciHub + both Demand and Supply Connectors||0.1||0.05||0.05|
Connector Compensation Notes:
- If the LifeSciHub fee is negotiated the Connector fees will be adjusted accordingly.
- Connector payments are made based on work completed successfully, not on the terms of the Statement of Work (SOW). For example, an SOW may anticipate 500 hours but only utilize 250. Connector compensation will be based on 250 hours.
- Unfulfilled projects and EP introductions that do not work on projects through LifeSciHub do not qualify for compensation.
- Connector fees are reported transparently to all parties, and are auditable by the LifeSciHub general usership upon request.
- Connector Qualification:
- A project must exist as a posted project on the LSH platform prior to fulfillment.
- Connector must be a LifeSciHub User prior to fulfillment. “User” Definition:
- User must have an approved profile on the LifeSciHub Platform.
- User must have a fully executed LSH Services Agreement prior to project fulfillment, regardless of whether or not that User is actually working their own projects through the LifeSciHub Platform.
- Compensation is distributed to all parties- EP, Connector/s and LSH simultaneously, according to HE payment terms, as dictated by HE Services Agreement.
- Compensation will continue throughout the life of the project and stop: upon project completion or termination; LSH EP Agreement termination.
- There is no limit to the number of Connectors a User can have on either the Supply or Demand side.
- Connector terms are valid for 2023 and will be refined in 2024 and onwards for the intent of enabling 2nd, 3rd and possibly 4th degree “Connections”. As the 20% fee will remain fixed, the goal is to enable compensation beyond the 1st degree Connectors. In this model, the Connector Fees will be less than 5%, but the goal is to enable each User to have multiple Connectors, both on demand and supply side, which, at scale, will provide mutliple streams of passive revenue, all supported administratively via the LifeSciHub platform.
- As of 2023 no Connector fees beyond the 1st degree have been developed.
- Any Connectors established in 2023 will remain bound by the terms herein, regardless of future changes to the Connector model.
LifeSciHub’s current goal is to find a way to extend the Connector value beyond 1st degree connections, maybe to the 4th degree. This is truly harvesting the power of professional networks! However we are far from there at present. This is the true value of a community network, and something we are building towards as a DAO (see more on the Decentralized Autonomous Organization concept here).
Interested in exploring building passive revenue streams by “Connecting” LifeSciHub to drug development gig economy Demand or Supply? Contact Sheila@LifeSciHub.com