They have tons of issues.

Bruce Booth, “Biotech Startups And The Hard Truth Of Innovation,” Forbes, 05-20-2019, https://www.forbes.com/sites/brucebooth/2019/05/20/biotech-startups-and-the-hard-truth-of-innovation/

We work in a high risk field: less than 5% of drug discovery projects ever make it to market. We have to embrace failure. When projects or investments are killed, we should openly acknowledge it in the light of day, not bury the dead in the night, and celebrate the learnings that can be gleaned: as we did with both the Quartet Medicine and OnQity write-offs. Innovative cultures have to convey that its “ok to fail” and foster quality learning loops.

But it’s not ok to fail due to sloppy science or poor decision-making. Not asking the tough killer questions, or using the right controls and comparators, can lead to chasing false positives for too long – which is not acceptable. It’s just too easy to keep drug programs going, overhype the data to get the next dollop of funding, or play around but never truly test the science – simply because we can rather than we should. It’s incompetent not to do the killer experiments, and do them as well as possible. If you are waving your hands too much, maybe the science is too early. Try to invalidate the central biological hypothesis early, before mountains of capital put too much weight on the scales of judgement – leading to low stringency and poor decisions biased by the sunk cost fallacy and the practicalities of being “too big to fail”.

All of this requires not only competence, but a shared view that the collective time of truly competent people is the scarcest and most valuable resource in an innovative culture: don’t waste that resource on ideas that are passed their sell-by-date (or never should have had a date!). Chalk up a failure and spend your time on better things. Move onto the next project, or the next startup, or back to big pharma. But move on nonetheless. Competence, by definition, can’t tolerate complacency around the decision to move on.

There’s another corollary of this observation. We all fail at hiring sometimes, as it’s impossible to hire only truly competent people when you are scaling an organization beyond more than a couple dozen employees. Mistakes in hiring happen, and that’s ok. But there can be no tolerance for keeping underperforming hires around just because we’ve got a “nice” culture. Robust performance management systems need to be in place to weed out those folks who aren’t delivering with high performance. I’m not suggesting it has to be the Jack Welch “fire the bottom 10%” rule – but if you aren’t transitioning some people out of a startup over time than you are almost certainly tolerating too much incompetence. It’s just the practical reality that we all make mistakes in hiring over time. Sadly, I’ve been involved with companies that have tolerated mediocrity for too long. It enables weaker researchers to keep hand-waving around their data, when all the competent folks around them cringe. It feels benign and “nice” not to fire people, but honestly it is enormously corrosive over time.