Research labs spend more than $35 billion a year on laboratory equipment and supplies. But as big companies restructure their research and development to reduce costs and risks, they rely more and more on research done by smaller companies. These smaller labs are a hard-to-find and valuable population for the makers of lab equipment and supplies.

Nowhere is this emerging market more apparent than at LabCentral, a coworking space in Cambridge for two dozen startups. Together, Lab Central and LabCloud are learning how to meet the needs of these fast growing labs and lab supply vendors eager to do business with them.

The VDC interviewed LabCloud founders, Igor Romashko and Charles Beyrouthy, to get a more in-depth look at the lab management software company and its progress-to-date.

VDC: What’s ground breaking about LabCloud?

CB: I’ll let Sonya from New Worker magazine answer that:  “LabCloud isn’t the first to take a shot at this market.  Other companies (e.g., Y Combinator-backed Quartzy) offer online lab notebooks and procurement but it is difficult to create the right combination of infrastructure, utility, and intuitive integration with laboratory tasks, all in a tool that scientists enjoy using.”

VDC: What was your inspiration for LabCloud?

CB: We realized that the fastest growing demographic of the life sciences space was startup labs comprised of less than 35 people.  These labs did not necessarily have the infrastructure in place to run as efficiently as possible. Many lacked a LIMS (Lab Information Management System), and given their size, cost-effective access to multiple vendors of labs supplies.  We saw there was an under served market opportunity and we decided to provide a solution to address it.  In a nutshell LabCloud created a solution which provides a LIMS to these small labs and just as importantly, a means for lab supply vendors to reach this very fast-growing market. LabCloud’s platform provides a win-win for these two entities.

IR: It was to create an operating system for the lab because what’s out there just doesn’t work. All of the parts can interact, enabling startups to achieve Quality By Design instead of the ad-hoc research methods in place at most small labs. But that doesn’t mean that the software can’t be intuitive at the same time.

CB: For me, this project was personal because after working in lab after lab, this issue became an impediment to my success and one of dire importance.  And in that light, when we built our platform, we built it with the vision that a scientist lives and breathes their work and so should the software he or she works with.  It is tapping into the inner subconscience of the scientist and not necessarily changing what they do, thereby disrupting their workflow, but rather how they do it.

VDC: How’s your design partnership with LabCentral going?  

CB: Over a $1M worth of lab consumables, equipment and office supplies have been processed through LabCloud’s solution and both the labs and the vendors are thrilled with their experiences and the outcomes.

IR: We learned a lot from working with them and developed a whole new business model that we are now deploying outside of LabCentral. It was a crucial point in the history of our company and we are glad we made the choice to work with them – we learned a lot and it shaped our business into what it is today.

VDC: Why are you are flying under the radar?

IR: It’s a question of timing for us.  We can see demand growing for our solution and we have to make sure we are able to support this large pent up demand and volume of transactions before we make this publicly available. The fact is we have an overwhelming amount of interest. We want to make sure that we can provide the same high quality experience to all of our clients.

VDC: How did LabCloud evolve since it has been at the VDC?

CB: John Hamilton has been outstanding and has been a great inspiration to all of us.  He is an amazing mentor that is patient, understanding, and willing to go beyond the call.  We liked him so much, we asked him to be on our board and he agreed.

IR: They have asked the really hard questions, and we are glad they did. It takes a lot to take an idea and make it into a product, and it takes a lot more to make a product into a revenue-generating business.

VDC: How did you guys meet?

CB: We met in the fall of 2007 at UMass Amherst and based on having a lot in common we became friends very quickly.

IR: After graduation I reached out to him about what I was working on and he said, “I wish I had this when I was in college.”

VDC: How do friends deal with business disagreements?

CB: It is a respectful environment but one with some great debate leading to great results and, and yes, the occasional row.  At the end, he is also one of my best friends, and while business is involved, I believe we can take on any challenge together.

IR: Well, we both realize that the other has a point. The key is to come to a mutual consensus and we both know that.
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Charles Beyrouthy, Co-Founder & CEO, has worked at numerous institutions in Applied and Theoretical Medical, Pharmaceutical and Material Science Research as well as Engineering and Process Design Consulting, both in the United States and Internationally. Charles is responsible for Business Development and Operations at LabCloud Inc.

Igor Romashko, Co-Founder & CTO, worked in software development for Pharma/R&D and Healthcare IT before launching the LabCloud project in 2011 when he saw the need for a vertically-integrated solution for laboratories. Igor is responsible for the managing the technology development of the LabCloud platform.