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VizXLabs’ Incremental Victories

By John Russell
Oct 17, 2005 | Don’t tell Tom Rankin he can’t sell informatics software on a seat basis successfully — although even Tom would agree that a great many, perhaps even the majority, of early informatics hopefuls who’ve tried have foundered. It doesn’t matter. He hasn’t.

“My view of what happened in this space is we started on the back end of the bubble and some genomics and informatics companies got funded. They had great technology in many cases but didn’t have business models. The bubble burst and almost all those companies had significant setbacks. In the meantime companies like ours have been focusing on providing value to the end customer. An awful lot of those companies are doing quite well. Locally there’s Teranode which just got some funding, Geospiza, the local elbow-grease company out of Lee Hood’s labs (Institute for Systems Biology), and us,” says Rankin.

Rankin is cofounder and CEO of VizXLabs, a Seattle-based provider of Web-based tools to analyze microarray data. The company’s main product, GeneSifter, is aimed squarely at bench scientists performing microarray experiments. Researchers upload their microarray data to VizXLabs, which stores the data in a security “hardened” data center. The scientists access GeneSifter and the data via the Web and analyze their data.

On the face of it, this sounds like just another ASP model destined to encounter hard limits, including price-per-seat constraints, the low number of seats available, and biopharma’s well-documented paranoia around letting proprietary data stray outside corporate firewalls. Hardly, counters Rankin. There’s plenty of business to be had. In fact, he insists, microarray use is about to hit the post-chasm inflection point described by Jeffery Moore in Crossing the Chasm. He likes to say VizXLabs is democratizing microarray analysis.

Formed in 2001, VizXLabs made the deliberate decision in 2003 to hitch its wagon to market-maker Affymetrix — not that it doesn’t support most other array vendors as well. Last month, GeneSifter became one of a handful of products to earn “GeneChip-compatible” status from Affy. In the same month VizXLabs helped launched, a Web site intended to help researchers new to microarray use. And last June GeneSifter won a “Best Practices in Product Innovation” award from Frost & Sullivan.

Growth Potential
The product seems quite solid. Being Web-based, integration is generally trivial. The kinds of analyses it does are varied and extend beyond simply providing a list of differentially expressed genes to offering biologically relevant interpretations such as families of genes, gene ontologies, and some pathway information. The feature set is updated regularly, and the public databases it taps are updated constantly.

As Rankin sees it, his small company of 12 can mushroom right along with the market. So far, the company has about 100 customers: Avalon Pharmaceuticals; the U.S. Army; the University of California; and the University of Washington are among the notables.

One challenge, says Rankin, was learning the buying process and developing appropriate sales efforts. “It’s a very complex process — dealing with very high-end people, very smart people, with very technical needs, and how to communicate with them effectively and with credibility has been more difficult than I think most people would have anticipated,” he says.

Growing the business is Rankin’s next big challenge. “We’re really very much focused on getting this product out to more customers and hitting cash flow profitability in the course of the next few months.” Doing so, he says, will put the company in a strong position to seek more funding, “We’ll be able to say, ‘Look what we’ve done; we’ve cracked this nut where lots and lots of other guys have failed.’”

It’s definitely a tough nut. On the other hand, the mainstreaming of microarrays suggests the market may become quite large. Sell on Tom. Succeed.

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