Health Innovators
Health Innovators

Episode · 1 year ago

7X serial entrepreneur sells to Microsoft and gives us his winning strategies w/ Daniel Levitt

ABOUT THIS EPISODE

Startups can be challenging. And, with an abundance of ambiguous tips and strategies available, and it’s almost impossible to distill it down to actionable steps toward success.

Almost. 

Daniel Levitt has spent an entire career in the world of startups, learning the ropes by taking on roles tied to sales and marketing - critical components of any successful venture.

Self-branded a serial BIO/IT entrepreneur,  Daniel pulls back the curtain and gives our listeners a rare glimpse into the strategies he used that helped him sell one company to Microsoft.

In this episode, our viewers are treated to a sincere and thoughtful interview that takes the mystery out of why some companies succeed where others might struggle.

Grab a drink, turn up the volume and get ready to take notes. You’re not going to want to miss this one!   

 

Here are the show highlights:

  • How staying humble can build your expertise and bring more experience to your next venture (2:13)
  • The difference between - and importance of - technical founders and operational founders (6:42)
  • Why the method in which your startup raises money is critically important (9:20)
  • This scientific evidence can be a gamechanger for building a successful startup (24:19)
  • What investors want to see when they’re considering backing a startup (25:59)
  • The critically important reason to include customers in every stage of your ideation processes (30:26)
  • How to navigate success without sacrificing viability (33:10)

 

Guest Bio

Daniel Levitt is CEO and Founder at Bioz, a comprehensive AI search engine that empowers scientists to accelerate research toward cutting edge discoveries and technologies.

With a career dedicated to IT and life sciences, Daniel has successfully built and sold companies to such notables as Microsoft.

A self-professed serial Bio/IT entrepreneur, Daniel earned his BA in economics from the University of Berkeley in California and his M.Sc. in management from Boston University.

If you’d like to reach out to Daniel, or are looking for more information about Bioz, you can reach him by email at daniel@bioz.com, on LinkedIn at Daniel Levitt, or visit his website at Bioz.com.

Welcome to Coiq, where you learn howhealth innovators maximize their success. I'm your host, Dr Roxy,founder of Legacy, DNA and international beath selling author ofhow health innovators maximize market success through handed conversationswith health, innovators earlier doctors and influencers you'll learn how tobring your innovation from idea to start up to market domination, and now,let's jump into the latest episode of Coiq. Welcome back to the show coiqlisteners on today's episode. I have Daniel Levitt with me. He is thefounder and CEO for BIOS. Welcome to the show Daniel Allrigh theare great,to see you and I'm happy to be here yeah. So thanks for joining me, let'sstart off the conversation by giving our listeners and viewers a little bitabout your background and what you've been innovating in yourjourney. It's a very exciting story, so I want to make sure we start off withthat. Absolutely so you know I maybe kind of a little bit different frommost. I spent my whole life and startups founded about seven companiesaround the now bioit area and Hig Tech and the journey's been interesting. Onefirst start up. I spent four years working starting in sales actuallymoving up through roles and marketing, and it was an amazing journey with astartup which eventually did not succeed, but I always tell those whoare young and coming out of college that you know it's tempting to startyour company right when you leave college but often time it's better tojoin an existing startup spend the time learning from others. You know and Reallye getting thatexperience and then maybe start your company. If that's your journey, soyeah. So I in find that to be very important, just so much learning to behad out there, and you know, though sometimes we think we know it all. Wemight know a lot about that small area which we're trying to focus on, butthere's so much out there, which is very generalized and applies to almostevery company N. I really think people should learn and my going back to mybackground a little bit so I did start in a a software company after that company IAD left. Originally,you know I started with which was a software company also- and this was inninety nine, where I cofounded a company was a CO company was calledWeber Point and that company was later on acquired by Microsoft. So that was,you know. You know as a founder, you kind of say wow. This is a dream, youkind of start a company, you know relagiovely quickly, Microsoftcomes knocking on the door. Ou know was a phone call saying we're interested inchatting go through the motions and then be microsofts has acquired yourcompany. Interestingly enough, thet actually offered me a job at Microsoft with a lot of stock options. At thattime I refused my cofounders. The two technical ohiners went to work there, and that was interesting because itsounded like you know. This is an interesting, maybe point for people tothink about. Is You just sold your company? You made some money, you knowthe last thing you really want to do is: okay. Let me just go right to continueworking. If you don't have to. When I look back, you know, was it amistake? Ore? Not a mistake. It's hard to kind of say, okay, know in hindsight,but I think I should have maybe been more humble and went to work forMicrosoft, because thit would have given me another layer of experienceand more of a corporate environment, and I think that would have mabe beeninteresting decisions. I think that's the lesson. There is really you know,even if you feel, on top of everything you're just starting you', justlearning yeah Kno from there- and that was an interesting point after that Ifoundthat another company or gofound thet. Another company has co, which isin the realm of personal protective equipment in the medical field and weprotect against Gamo radiation, and it focuses on three areas and firstresponders on the space area, where astronauts ar of going to space needprotection from radiation and also the medical professionals in the labsetting. They also need radiation protection, a lot of procedures, use high levels or radiation duringprocedures, and that company is now currently doing great. I left it to domy current company Bios and that companyis now got a product actually onthe International Space Station. So we just launched there about two monthsago and it's right there being worned by us or not. So it's really excitingto actually know that something you started from scratch has a physicalproduct with your company name now floating in zero gravity, Wenthernatical, spay station- and you know next year, there's a mission planed forour product to go around the moon, an assist lerna mission with the GermanSpace Agency. So it's wonderful how you can create something from an idea andthen you really see it growing, but I will say it's that company has beenaround for almost ten years. Wow it's a long journey. The average startup takesabout seven to eleven years to exit if...

...they are so lucky so patients his keyhere, a d things can take many years for getting the product out there.Building awareness, penetrating markets monetizing. So that's just anotherlesson there in terms of be very patient and things can really work out,evhen Otey, ten years or fifteen years. It's still fine as long as it's progressing and thenthe third thing, which is kind of my you know what I believe is my my thirdsuccess in this is the current company Bios, which is a kind of a searchengine for life, science, researchers, whether they're, anecademi or Bia Farma,and what it does it helps them conduct experimentation more correctly moreaccurately. So we all know that a lot of scientific research is notreproducible. We think the number is almost eighty percent of scientificresearch. If somebody goes and say, okay, I can see this article that waswritten. Let me go out there and you K O try to duplicat that experiment, ahey, tried, Tofoogat it and get the same results, and then they cant theycan't replicate it. So what we've built to tha searchchangeing, in which kind of uses natural language, processing to analyze,sint dificic articles structure, the data and give the researchers who aredoing these important experiments for us to develop new drugs and Tuediseases just be more effective at that. So this is a this is a wonderful AIcompany and we're doing rat. We have customers like Thermofisar, scientificand in Neuenglan, Barlabs Lonzo, Rosh men. This is a very exciting journeywhich I'm on right now and you know Stanford's invested in us and we'revery excited. But again this is a long journey. We've been doing this foralmost seven years and now we're pushing monitizatian about a year or soin. But again you know you have to be patience. You can take a long timeuntil you really see the fruits of your effort, but I think that's kind of mybackground and Nutshall. I will add one little point which is kind of Nice, asmy dad's, a professor at Stanford, and won the Nobil prize and chemistry intwo thousand and thirteen, so he does help to have influential people eitheras acquaintances or family members, if possible, because that opens a lot ofdoors. You know people listen when they get an email from a Nobel auriat. Theywill respond so fi a liverage people in you'R in your circle that are alreadyconnected, because you know we're all bombarded with so much stuff. Today itdoes help of someone who you know can get you that attention not bad Daniel,not bad. So let's rewind a little bit to the MICROSOFC story, because I'msure our viewers and listeners are pretty anxious to hear a little bitmore about that experience. So you know take us through like when you firststarted. The company was your the mindset or your dreams for the exitstrategy. Did you ever like? Did you have your mind or your heart set onMicrosoft is like from day one. You know, let's kind of just take usthrough that journey and how you got from, and I have an idea to I'm sellingit to Microsoft. Okay, that's very good, so I w will stak that you know there. Ithink thereare different two different types of founders, probably many moreof but just into categories. There are the technical founders, the ones whoare either in my realm, the software engineers, the you know the grarns whowrite to code and come up with a cool idea or therese. Maybe the scientistsWTO have some kind of an idea for medical device or some kind of atechnology platform like my cofhounder, Dr Crin Letchmy, who was at Stanford asa posedockand, came up with the idea for bio. So I find that you know it'snot that. I don't think that I have good ideas. I find that consistentlyover the last twenty five twenty six years of June startups, every singlestartup has been someone else's idea and it's always been a technical person.A scientist or engineer who's had the idea, and I find that my role was O methat other halfe to be the person who comes and you know, helps hem raise themoney, build the team, build an execution plan and operates. So I thinkthat's so. In the Microsoft case, I was the operator I found. You know an in couple ofengineers. Whov E had this idea had some initial working prototype and theidea is okay, let's find investors. Typically Angel Investors are the bestsource for early money. People who can write checks, for you know as much astwenty five hosand fiftythousand hundred thousand dollars and thoseinitial checks are very helpful. We start with small salaries and theinitial objective was not to sell the company. Of course itwas sold relatively quickly. The objective was to raise a certain baseamount of money that we could hire a few people who could not only beengineer so maybe three or four engineers in total and maybe on theBusiness Development saleside a couple of people as well. If we're in thatphase, and to do that, I believe that a company needs to really raise about amillion dollars less than a million dollars. It's hard to operate, and it'svery simply. If you just look at the burn, rade a million dollars requiresmaybe ou f. You spend eighty husand dollars a month that can cover. Maybeyou know, seven eight, nine people in an office for a year, so I would say that if youcan't raise a million dollars, it doesn't have to be one junk. You canstart with say raising fiftyhusand and a couple hundred thousand. Irecommendthat the method to raise that money should always be on. What'scalled a safe note, it's a calld Da,...

...it's a simple agreement for equity,something which why combinator came out with. In the past, people used to useconvertible Lon agreement, clas or convertible notes. It's not meant forstartup environments because they have a maturity day where investor can say.Okay after a year. Okay, I want my money back and that can put the startup into a very difficult situation, they're also interest bearing whichrequires that you have to pay them more than they actually invested, so safenotes or the way to do it raise that money get started higher people again,but don't hire more people than Youneique. Try to have the founders, bethe ones whore doing most of the work, and it's amazing how founder can takeon many many roles, a founder who's, never done. You know managing engineers,sure they can manage engeers. They can start. You know looking at the sprints,they can put together agendas. They can have meetings with the engineers andit's surprising how far you can get without hiring so called professionals.The professional need to come in when you start staling the business, butthat can be many many years Dowon the road its that far off Highe people whocan individually contribute engineers who are going to not do the managingbut do thi do the work. I also find that the type of person you want tobring on, especially in those early days, ires someone who is verycommitted, very entrepreneurial. So you know I'm not. Sayeing people have towork all the time, but you want someone who's excited. WHO has no problem?Answering an email on a Saturday or a Sunday excited to work. You know Fridaynight. You know it could be from home, but you know you wantet to be happy.Someone who expects a nine to five job should absolutely not be involved wi inan early stage startup, even if they want to be an entrepreneur,it's not for them because really ther're, no benefits. The benefit isjust working on something cool with cool people. Learning a lot- and Ithink when you tell people what's the main benefit it's learning, they don'tget it because Theye okay, what's about money? What about my free time? Youknow so so I think you hade to find the right people forthe early stage, adventure and, and then after thatweekhess we raise the money, we hired the small team and then the method wasvery quickly to start getting to modetization. So we immediately startedto find partners. We could have agreements with and and start to show proof that notonly havewe developed, echnology, we've devolted acknowledge that other peopleactually need and want. So if you build something which is cool, it's notenough, it has to be solving a problem or addressing of pain that someone elsehas- and I think there's always this interesting point which I think reallyreally resonates well with any startup. When you think about you, kN W is yourproduct or something you developed going to make money, and that is youknow, are you firing someone else or some otherprocessor task so think about it in that Sene? Now what is being done today,inefficiently or incorrectly, that your solution can actually do better, soyou're actually firing the current way of doing things or you know in termsreally, you know in the sense of firing the person you're firing a current wayof doing thing, something and when you're looking around you, don't reallysee that one thing you're firing it's going to be really hard for you to getyour product out there for service, because you know it's hard to convincesomeone here. I've got something new. They will ask okay, how's it going tohelp me do what I'm doing better. It's going to be a hard cell, so you reallywant to try to look for a don't create things which are more like wants greatthings that address needs and make sure Youre. Actually cund very currentlyfind what your firein in the current process. I think that was something welearnet and then you know out of pure luck. Microsoft called US and wasinterested in learning more about our technology. I think the acquisitionwent very fast and there is a lesson here as well, because the thetechnologyy we had built our platform on happend to be happened to be Microsoft, technology, and so when theydid an evaluation of the technology in their mind, they could very quickly seehow they could incorporate our company's technology into theircurrent platforms, which I think accelerated the process. So I think,after that, acquisition my thinking was okay, let me think about who couldpotentially acquire the company know. Maybe that should influence how we'reactually building our technology, because you can choose to code yourplatform in many ways you can choose the different platforms and I thinkthere's some forethought o o do that process. Okay, you know it'lldefinitely be easier to close an acquisition if you cund be more alignedwith the acquire and certain way so always kind of keep the keep that inthe back of of your mind, but that was a COOLEC cool event. I will say onething which I think is important for founders to realize this is going ofyou know last going on on this Microsoft transaction. Is that there's a content of acceleration ofvesting for stock option so stock options? You know you can also put inplay something where if the company gets acquired, then if you had let'ssay three or four year best thing: all those stocks will vest immediately,which means now you actually own those dock options and convert, convert theminto the shares of the acquiring company or cash okay. So because wehadn't operated for that long, a lot of our employees had stock options. Thefounders are okay, they usually have stock Portesar re, an natural share, sothere're no problem there, but the...

...employees who had worked hard havestock options, not enough of it had vested some of them, maybe not evenpast the cliff pariod and the acceelration cause you know wassomething which would have helped them a lot. Wa Te those agreements- and Iremember this interesting situation with one of our investors, who you knowdidn't agree with me and T en event. I did what I thought was right because Iactually said: okay, if I accelerate all the shares or all these options forthe found for the employees, you know I might personally lose a couple hundredthosand dollars and the investors would lose the other founders it blues, butthese individual would now get another check of eightythousand dollars hundredthousarddollar, which could at that point have been a downcaman on a houseinstead of getting five send dollar and- and I remember the argument with thewith the investor saying hey now- I'm going to accelerate everyone, you knowthe fact that were sold relatively quickly was not in everyone's plan, butthey need to benefit as well. I don't mind giving a bit of my money. Theinvestors were very against that and I think that's kind of a lesson as wellchoose who you want to be on our team as an investor, you want people who arealigned with your values and- and it's always about doing the right thing, soI was believeing doing the right thing. You have to look at the people around.You Karma does exist, and you know just be good, be nice and do the right thingwhether or not others agree with you or not yep, so lots a whole chalk full oflessons already packaged in one story. I love it. So you know one of the things that yousaid. That I think is really interesting. Is this distinctionbetween the the founder being the one that has thebusiness acuman or commercialization acumen versus being the technologist orthe physician or the scientist that has the idea of the technology? I would also say you know: building the company from a differentmindset of being technology, first versus being customer first or Po, isvery different, so just kind of talk about that a little bit, because Iwonder if your early background and sales and marketing you know shapedyour role as the business expert to come alongside these other innovatorsand then, with that sales and marketing background it made you think, not onlyjust about the problem, but even about the customer first versus thetechnology of the Science First Yeah I think, thats a that's all veryinteresting Analai. I definitely agree with whatyou're saying so I did start in sales was tot Nott. I didn't tend on startingin sales. Actually, I think it was a kind of a fluke which happened at thetime. Wherther was in the Ow, the mids and you know, gone to sales and startup act LE wanted to work in marketing. But the interesting point here this iswhat I realize it that yeah about sixty percent of CEOS of companies haveactually started in sales. So, if you think about that sales is a criticalskillset, because you really can understand, know what people want, whatpeople need and how to offer it to them and that's, I think, a critical skillset. So no the idea of here that you know someone is born with te certainskills that I think it's a personality trade. I think some of us are much moreinto the technical side and thinse things. Other people are much more inthe okay, let's raise the money, let's talk to investors and I think that if somebody says againwhat is the skill set which I have, which is you know the thing which makesa difference in my role and now come back to VP, who who I'd worked with a you know many many yearsago, and he basically said you know. You know that my ideal Tago of who I amis basically a product or evangelist. So you know being able to evangelizewhat you believe in and and convince people that what you have is the bestthing since slice. Bread is a huge skill and I believe that people whodon't have that ability to really be convincing and articulating things andwhether it's in writing or in speaking, are going to have a really hard timebeing the CEO or commercialization leader of a company and which is fine becauseobniestly, you know I've met so many amazing technical people and I thinkthat, even if some person had this ability of Camis, you know maybe ElonMusccoul baybe an example of someone who can kind of do both really well. Iactually think that having additional people as founders with you is reallyreally helpful. I would not want to start a company by myself and more thanhappy to give equity so that somebody else can be with me in this journey,and you really want people who are different from you. People who canactually you know, you know, argue or discuss things wif you I'll give anexample like my Myco fonder, Dr Crin Lachmeso, so she came from thescientific background. She's come up with ideas which I initially thoughtdidn't make sense. I thaid there's no way this is going to work thecustomeris not going to accept hit, but...

...you know after seeing her, you know beright about five times over the last few years. I've built this trust that she gets thevision she gets. What customers really want, and it's very comforting to mebecause almost sinkit, if she think this is going to work okay, you knowthere's a high likelihood that she is right, and you know if I was doing thisby myself. I wouldn't have that if she was doing it by hourself, she wouldn'thave someone to kind of challenge her ideas or kind of Sayi. Well, maybe it'swrong or right, so I honestly believe that do not start a company by yourself,but do not randomly find someone find someone who can really be this wbouncing board or something while you can actually actually discuss ideaswith brainstorm way, th politely, even if it's sometimes heated your companywill be much better off for that. So again, coming back to that initialpoint, th, you Mak, I think you know I definitely came from more of a salesevangilizing background which is more in the commercialization aspits and Ithink, where it becomes important, is that you know you know things startwith a product or idea or service right, but ou I'll. Give? U An example, whichyou know Steve Jobs gave, which I think is really really true. Let's all thinkof a a printer, let's think of a laser printer, especially the apple laserprinters, which are kind of these ESE. These very neat clean square boxes,these cubes, which I' Put a paper so the engineers o to develop that printerknow they love they think about the gears inside that printer and how itall works- and you know the lasers moving in there and it's true it'sremarkable than unbelievable. They might even want the side Kenol to betransparent to people to look inside. But what's Steve Job said is thatultimately the customer, the one who has that need all they care about, isthat piece of paper that comes out of that slot? Nothing else and th this isthis, is, I think, a good example for me, because you know you really have tobe thinking in terms of that piece of paper coming out of that printer, notin terms of the years or how the whole thing doesn't get itall right make sure it's all working beautifully and perfectly and reliable,but the key is: does somebody want that piece of faper? What is the quality ofthat piece of paper? So very critical to not, you know, be so super focused on theproduct and developing more and more features, unless you are hundredpercent sure that what you're doing will lead to monitization and lead tomon a physician always quicker than you think you need to, because it's veryvery hard from the second, you start to monotize it could take years. So don'twait at see a huge number of founders waiting too long, focusing too much onthe product without thinking how that product solves a certain need forsomeone else. Yes, yes, yes, yes, so I was talking to a physician who'simmersed in the problem all day. Every day has for years decided that theywere going to develop a product or technology to solve that problem andthey've been iterating on that product. Now it's actually been, you candownload the APP in the APP store, but they have no commercialization strategywhatsoever, and so for three years they just keep adding more features andfunctionality without one payin customer or even a strategy to get onepayin customer, and I it breaks my heart, because I know that this personis so passionate about it, but in the world probably could use it,but the world will probably never know that this even exists yeah. That is sad,and I think someone like that could truly benefit for someone who hasexperienced commercializing something and getting it out there, because youcould have something amazing. But if nobody knows about it, it's unfortunateboth in terms of the utility it cald provide to other people which is beinglost, but also in ten of you personally in your company. So I think thathappens. Much more than people realize that there's some scary numbers outthere that ninety eight percent of startups that have been funded fail. Soyou know the odds are against US essentially, and I do like the pointyou mentioned about e can continue adding features because that's what alot of people do they kind of have developed some kind of a product orcould be a widgit or whatever it is or service, and they think okay, I'm notselling, because it's missing this feature, but almost always is neverthat. It's not that one feture will tell you an you, spend a lot of time,ine your last dollars on developing that feature, then you release it andnothing. Much changes, it's really not about that. You just have to figure outat y solving and COR need. So maybe I have to piveot to a different customer,maybe have to repackage N my technology in a different form, so they'veactually appeal to that need out there, and I will stress one thing that youknow I'm also involved in STARDX, which is a stanfords accelerator. I judge theapplicants for those want to be accepted into the program and you see alot of companies that have amazing ideas, but totally don't understand thecommercialization aspects, and it's really scary, because you know thoseare the people you want to bring into the program if they have somethingamazing, but they have to be willing to learn. And one thing I will add here-which I also think is critically important, which is something which youknow. I'm learning all the time about...

...this is that before you go too far in your companyinterview, customers and I hear the best companies what they do is even ifthey're, four o five six seven years along they're stilln still spendingtime every week talking to Onee two five, ten customers or potential uswe're, just asking themquestions because a lot of times- and this is something I'll give you someinsight- FROR my current company. What we found is that you know we have aservice or our friend and we're going tof pushing it, and you know closingand customers like it. But as soon as you ask the customer- okay we'reoffering this, but what would you like to see you know? What do you think herewould be? You know a little bit, no more customize towards your specificneeds as soon as they feel that they can get something more specificallythat they want the ability to sell it to them switches, a hundred eightydegrees. Suddenly they're saying I want this wherwhen. Can I get this insteadof you pushing it and what't? Have you really done here? You haven'ttransformed your product completely you've, just sudjusted it to be alignedwith what they are asking for. So asking your customers is great forlearning. It helps in selling, and I know, there's a whole program whichSteve Blank it's Stanford put together and it'sused by the national science findation as well. You know ineveren customers isbecome. Like literally you know, scientific evidence for success. FFORall starts an be to do it sooner than later, and it's amazing how much you'RLearne don't be afraid. Don't be shy, just talk to people. What are theygoing to say? You know they'll say I'm not interested in talking to you go tothe next one. Amazing insights, coal be hard, Hey! It's Dr Roxy. Here with aquick break from the conversation. Are you trying to figure out what moves youneed to make to survive and thrive in the new covid economy? I want everyhealth innovator to find their most viable and profitable Pivit Strategi,which is why I created Tha covid proof your business to the kid. The pitokitis a step by step framework that helps you find your best tivid strategy. Itwalks you through six categories. You need to examine for a three hundred andsixty degree view of your business. I call them the six critical pivot lenses,as you make your way through this comprehensive kid, you'll be armed withthe tools, tits and strategies. You need to make sure you can pivit withspeed without missing out on critical details and opportunities, learn moreat legacy: Tythan DNACOM, Backsla Kit, so so Daniel. I think that that is likeprobably the most critical advice or wisdom that we could ever share withany entrepreneur innovator out there that you know the earlier the better somany times I see ive got an idea. I know the problem in the solution. Ibuild the widgit the solution and now I'm going out and I'm going to do thesecustomer interviews. So it's kind of a astatic one moment in time experiencemost of the time, I'm just confirmation, biased, I'm just looking for them toconfirm what I already believe to be true. I'm really not sugek solicitingnew insights, because that would derail my whole strategy and plan and and and I'm going to market andit's so it's like I'm going to do just one time check the box kind of thingYep. I did these interviews and I love what you said, because it's soimportant and it's something that is you're, seeing to be a lot more proaprevalent in both startups and mature companies and other industries, butwe're still just kind of scratching the surface on implementing this and healthcare. From the very beginning like when I think about I'm going to getinvestors, I'm going to get advisors, I'm going to get target customers likeday one day, two really really early on yeah. I agree Ni and I think what I'veseen is so so a lot of the people who come to Stanford stardicks program oractual faculty members at Stanford, so professors whove come up with ideasfrom the medical school yeah and it's they have remarkable things and they'resitting in thei room and they kind of feel they want to re Knowin tre Preneur,but you do feel that they have to bring someone on on the business side ansometimes it's hard, because someone whos professor at Stanford Ow has gonethrough a lot of cordals in life and it's done a lot of amazing things sofor them to now partner. Equally, with someone who's, you know maybe a lotyounger but has start up experience. I think that's always sometimes of amental block, but but they have to do that. It's you know you can have thebest idea in the world, but if you really want to make something, bigyou've got to do that and I think what I see a lot of professors do because ofthat. is they don't start companies themselves? What they'll do they'llstay in the lab day as a professor or in the medical school, and they willbasically sell their idea to another bigger company for peanuts yeah to them.It's just an easier way out, and they don't want to start a company when theycould actually build the companies and what I see, which is quite amazing,because I do see a lot of these medatal companies. You see companies that comeout of, say, Stanford and within three years, get sold for a billion dollarsto companies like like Bristol Myers, it's shocking and then those same Gugoin start another company, which is...

...worth a couple billion. You know aswell just ofter Foso, so so the medical schools, a these. Theseideas are sometimes unbelievable. I think they get sold off prematurely and and and people n professor juststay as advisors to a bigger company that takes it all if those individualswould align themselves more with the business people. People like, I thinkmyself, not giving myself overyer credit, but you know there'sdefinitely another side to this. I'm not a scientist. I don't understandthose areas which you know. People come with these amazing ideas, but Icertainly understand how to form a company responsibly reliably and toinitiate and execute on on commercialization and there's nothing wrong with that,and I think that's a MINSEF. The other thing I would give as point to peoplewho are in the medical feel is that I think they have a very kind of stable,secure position usually, which has taken the many years to get to. I thinkthey're much more scared to leave it and and go and start a company becausethey feel they're like ending that road versus somebody like myself, has alwaysbeen start up doing startup I don't mind, I'm happy to go and do the nextone, and so I think there is some kind of reluctance and it's especially trueof those who are already in faculty positions yeah, and I see that inthestartics interviews, they're kind of they're, just like literally thequestion we ask always is you know? Are you full time you know? Okay, I will befull time later on when what amount of funding doest need to be right so andthat's really kind of the last thing an investor wants to see. Yo know theywant to see everyone full time now not later, when there's money take the risk.Now by S, I think that's an interesting point but yeah. I just think there'snot enough Pushin, that ARA and there's amazing ideas to be had yoere, sure,yeah and so probably similar to Steve Blank's idea. I have a five coframework that I created and one of the things that I think it makes it uniqueis that you know so we're not only including the customers in the idiationphase, but even in launch right. So it's not even just like hey help mebuild this technology solution that you're going to love and want to buy,but also including the customers in the launch process and thinking about thisas just part of the culture. It's just what we do and you touched on that too.You know this. Is it's not like we're going to do a focus group and theneverybody's going to go back, and maybe in another six months or another year,r going to do another focus group like we build it into our operatingprocesses of we've got this continuous flow of information of how are webuilding meeting needs? Launching you know to collectively where we reallystart to see our target customers as part of the team yeah absolutely, and Ithink I think, when we tri to try to think that if I'm trying to close a newcustomer in Ourconarc for our service right now, no in that the salesdiscussion. What is the number thing number one thing I can show them thatwill give them confidence that what I'm selling them has value and well givethem benefit, and it always comes down to reference customers. Everyone Iwants to see your product live on some other customers website being used bysome other customer and and again you can do that through o creating casestudies having press releases where your customers are quoted, but italways comes down to that an that's Qike so hard to get that first orsecond or third dustomer. Once you get them theire amazing references. So Ithink your point is very valid. It's not only in the ideation stage that youwant to ask people and you want to do it. There's really no idiations tat.Just almost like there's endless ideation IGA, boyour ideation stagesfor every feature, every direction you want to take every new market. So it'scontinuous and I think that customer interviewing or customer interactionsand asking not telling asking, is the right way, but I think sometimes,founders ego gets in the way where they think. Okay, I came from this domain. Iknow exactly how it works and that's fine. They might know exactly how itworks in one sense of it, but there's a whole world out there that maybe youhave to educate and they may not understand the way you're presenting it.So you need to switch the way you're conveying the messaging. So I thinkthis is something great out of this. Conversation which is really beingfocused on is talk to those who you want to be your customers all the timethroughout the entire venture, even if it seems artificial, even if it sounds,you know a waste of time. It's really valuable. You wouldn't be shocked howmuch you can learn from talking to them. Yeah, that'sgreat! So do you have any insights in like the size of that customer right?So I also see a lot of folks get a little. I call it like Wuwoo. If youknow a big health system right with a really deep brand, you know ends upbeing their pilot customer or their first customer, and you know there'ssome pros and cons to that. You know this. My customer might end up beingextremely demanding and take over your...

...whole product development, h strategy and and now all of a sudden at the endof the day, you might be in so inclined to invest in that path, because youwant the additional revenue to come in right and you want to make sure thatthis customer is satisfied. But then you might end up with something: that'sreally not commercially viable, it's great for this customer, but notnecessarily commercially valuable across the entire market segment. I in your experience, is there any prosand cons between, like a large player, small player, a middle player and howthat might help with product development, as well as with the launchprocess. So it's actually very common to get into a relationship with a kind ofa big medium size customer, because what what you're doing in that senseyou're actually having them fund your development now the reason they'redoing at it's not you know from fulfilling topic reason they're doingit because they probably see potential in your company as being acquired bythem. So it's more of a strategic partership, but you have to be very,very careful not to create product solely for them that if thatrelationship goes sour or you know if, for example, the money money is notsignificant you're not stuck with something whith, you cannot later onsell to someone elseso again, it's always about how you see yourself yeand then this is again an important tip for raising funding. You have to seeyourself as equal to the partner, whether it's a investor, whether it'sanother company, the problem with a lot of these deal, that's done like okay,I'm small! I have this Delegya you're helping me. Instead of being more of acommercial agreement between two equals, I'm bringing this amazing technology,I'm willing to do development for you, but you have to pay for it and it's youknow a part of what we're doing I's, not the entire to the company. But youknow the last point on this. Is that ultimately, the reason they're doingthis is most often because they want to either raquire the technology forthemselves and they don't really care if they say no at the end and you'restuck with nothing, so got to be very careful, yeah yeah, so so Daniel, as wethink about you, know all of your different experiences, including youknow your current company. What do you think the number one challenge thatentrepreneurs or innovators are facing right now and health care and andwhat's the wisdom or he, the lesson, learn that you would share in responseto that yeah. So so I think one of the problems is that the products and health cartento be very, very narrow in the need, they're solving- and I think, that'ssometimes dangerous, because it's almost like either it works or doesn'twork work, and I think often times it makes you think. Okay, have thisamazing idea and it might be an amazing idea and it might actually solve anneed which is critical, but wouldn't investors want to see they want to seea big market which means that you can just stake. Take the widgeat, take theservice and think about it. Okay, how much money am I going to be able togenerate in sales from this item and sometimes it's difficult forfoundersbecause hey they have a lot of passion to word this one problem that theymight have seen. You know in a clinic environment or maybe in a hospital, andit's truly an important need that needs to be solved, but it might be somethingthat you do need to go and find an metronic or Johnsenman Johnson andactually have them productize it make a company out of it and you maybe are onthe patent and then you could get licensing feece. You have to be carefulbecause a product that you believe, okay, Great, I can make twenty housandthese or fifty husand these and you know I'll make a few million revenue.That is not something people want to invest in investors. whoare seriousinvestors want to see a business that can be worth a billion dollars worth ofbe, and that means an kind of in the best CAE scenari you'll be able toreach fifty million dollars annual recurring sales. That's a lot of salesif your business can generate five ten million a year. I think it's a greatsuccess, but it's not something you can go to traditional investors whete anyou have to find a different route to build your business, but I do find thatin the medical field a lot of these solutions are very, very specific in interms of what they solve and if it's a therapeutic, it's even harder, becausevery often it's just an idea and it's unproven and then the chance of thatsucceeding is very, very low. So I think thenlessoned here as even, if there's a really really deep need for somethingin a specific context. If that cannot be, you know projected out to much muchlarger revenue numbers numbers which maybe seem crazy because to us, if wesell something and generate five or ten million a yeare, it sounds like a lotand its salvs a critical need which saves lives. It's not enough. Investorswill not look at it seriously. Unfortunately, yeah yeah, I thinkthat's so important. I think it's like a balance between you know. My initial commercializationor go to market strategy might be on a single narrow market like a nichemarketing strategy, but but I have in plans in place for it to be thisbowling peneffect of like all right tackled it. You know knock that onedown knock that one down, so you've got...

...the the focus upfront right, so you'renot spreading resources too thin, but at the same time you have plans to beable to sell that to multiple sub submarkets right. So that's good point.So, ultimately, that's it's a little different from what I said earlier interms of like what I earlier is. One thing where you have very specificproduct, which isn't applicable to many markets in your context, is right in adifferent sense that you basically have multiple markets that you can targetwith your product. So if your product is a product that applies to not only a single narrow,vertical market but can apply to many markets, just needs to be kind ofadapted. That's great! That's fine! Because then, what you're talking aboutis more okay, I'm going to choose a first marketor first customer type toPena Right. That typically is called your beachhead customer yeah and that'svery good because it's basically saying okay, I know I can approach a lot ofother markets, but I'm going to be very focused because I don't have enoughmoney. I don't have enough on to develop a product in five differentmarkets. Sumotenuously, I'm going to go after that beachhad customer kind ofthe lowest hanging fruit, the market which will like most and that marketcould generate only five tim fifteen million a year and that's totally fine,because your product afflicable to other things. What I was more worriedabout is that the product is very, very narrow, as as a device which can'tnecessarily be adapted to other markets which to me, is kind of set. It'salmost like orphan drugs. Where you have you know there a lot of diseasesout there, which jis don't affect enough people and therefore the drugcompanies don't address, but at pritically important. So I thinkactually investing in things which are you know, maybe smaller is a good thingand there are probably investors out there who are okay with that. But wetalk to the big ones. If you want to go to the big venture capital firms, youknow if you can't show them that you can be worth the billion, which meansfifty million plus in sales you're not going to be taken. But I think yourpoint is truly remarkably valid. heres that that beach head market is critical,so Youvneif yo develop something which is really cool if it can apply tomultinorl verticles, that's perfect, choose one where you have. You know themost demand the fastest demand, the most alignment without having to adaptyour product too much and then go after that. Prove that thereis demand makesome money and then use that to raise additional funds and go ofteradditional market, but yeah very ever good point yeah, I'm so glad youclarified that, because I do see, a common pitfall is that I can sell many products to manymarkets and- and I don't pick something and so I'm trying to it- seems asthough I'm trying to be all things to all people- and I don't have a wholelot of money- the money aspects, the hard port and Ithink it's sometimes tempting. But again U No! I'm coming from myexperience in the past. I would have just said: okay, let's go after thisand this and this and it's just you kind of have to just choose one rightright, one thing you're doing and and it's sometimes hard because you're kindof but but the focus is crazy, because youav learned so much and U by justdoing that, one one market very focused, th, t's and also investors, love thatinvestors ate that you come and show okay. I can this works for this and forthis and for this, and for this it's great but you're, basically, fiveyears too early andkeep that commercializations tread, he prove enjust get me. One customer Geve me one type of product: worse, O one market,but yeah, very good, the Y. I totally agree withyou so when you think about you, know, commercializing your your current company and yourcurrent solution. What are you doing differently in thiscompany when you think about this? Being the seventh company that you arebuilding from scratch? You know help us debunk, maybe some myths thatentrepreneuers believe or just some additional lessons learned asyou come along yeah. So so I think a lot of it comesto the focus on a very specific narrow area. I think that's that's one thingin our COMPA on our company right now we're selling a content syndicationservice to help. You know, suppliers of lifescieence tools. You know builttrust and confidence in their products now. So I think I think, we've takenone very specific area to monetize. We also have a platform, were scientistsand come in and uses a search engine, but Wi've chosen not to monetize that.So you know it's not that it's not monotizable we've chosen not to monite.That's a big difference there and I think that requires a lot of discipline.I think we've kind of developed that discipline and you be careful because you can getopinions along the way, pulling you in one direction to the other, and I thinkthat's also something which I've learned to listen. Listen to O now.People who talk to you accept the data points, but then analyze it and alwaysgo with what your own good is telling you to do. Even if it's against someonewho might have you know the biggest title in the world or you know titles,you know they don't know your company. Nobody knows your company as well. Asyou know your company, so listen to others and you know, use those datapoints to make maybe better decisions,...

...but still go with what what you thinkis critical. So that's one thing: it's the whole focus aspect in terms ofmonetization, so choose one ind, it's a little different fro what we talkedabout earlier, because earlier we talked about different markets to sellto we're still going to the same market, yeah woing with a much NOC, justmonitizing one aspect of our technology and being very focused and that's ready.The second thing I will bring forth is that I think companies too often juststart okay, I'm just going to build this platform or build this APP or youknow, build this. This product is this tool and they start selling it. Theydon't look at it as okay. You know what is my overall strategy to become aleader in this market and there's this whole term of scalbl monopoly. I thinkPeter Tal broaghten about just really critical, because you want to take amarket where you can actually become monocolistic in that market andactually own it so and that might take more than just developing a product andgoing to market right away. You might have to have different strategicaspects to it, so you might wont in Art Case, for example, we're building theresearcher community, we're building the supplier community, we're kind ofbringing those maybe together. So there's all these concepts of okay, I'mstaging and I'm starting with one thing. Then I'm going to do the next thingthat I'm going to do third thing so kind of like act. One Act, two act,three think of your company in terms of that it doesn't have t o be just onesingle toolor product, because you want to win in the overall strategy, its notjust by SSO, so you're building a company you're, not just developing aproduct, it's very different, think of company is more of a strategic thing. Aproduct is more of a tactical element in building a successful companies. Ithink those are the kind of the main things which Hich which I've owned here,but I do want to say, and I'm very humple, although I've done a lot ofcompanies, it's sometimes scary, how little I feelI know because it'sit's uslerning all the time and I'm not even talking aboutokay, how little I know about other fields. I haven't worked in, I'm justtalking about just common business sense, and you know it's remarkable, so I really feel thatevery entrepreneur they can do themselves. A huge favor remain humbleand just be very open to learning and it doesn't matter who's teaching. Itjust constantly sucking information, try to put into the context that you'recurrently working and then try to convey that knowledge forth to others.But you know I talkd to some very smartpeople who are kind of you know getting on in the years and they basically saidthat what their focuses on life after they've been very successful is twothings: they're focused on teaching and learning yeah, that's er, that's therlife and, if we think about it in that sense, if our lives can be focused onteaching and learning, I think that's really the the courto all of this inthe long run. Absolutely I couldn't agree more. The you know, like mydoctorate, is in a specific business problem that was seven years ago. Ilearned something new every single day. It's just it's incredible, peeling thelayers back, and so I think you just spot on you just we continuously learn,and it's not even that market conditions changed. It's just that.There's a whole lot of information out there even about a single businessproblem, know it's endless. I think that that's always that's, there's aflipsite to this as well is that some people say okay, just sit down and readbooks all the time right. You know there's no way that someof is wantingto start up gens idon and read books all the time and Ivl. If you justlooking at articles, there's so much data out there. So I really suggestthat when somebody's operating a company try to focus on those thingsHar just specifically going to help you continue developing your product and ormonetizing mmercialiand wher. You doing you know it's very easy to get suckedinto all these series and strategies which you know ver often do not applyat all to what you're doing so again, I think that's the flipside of this. Youknow trying not to waste time on just general learning. It might beinteresting if it's not a play cuple to moving you forward, wait until you axitYep. That sounds great. Thank you. So much for sharing all of your wisdomwith our listeners and viewers today. So if folks want to get a hold of youafter the show how dod they do that, so the best way to do dos email maddirectly and my mail is a Daniel at bioscom. So it's Da an Iel at Bizcom,I'm totally happy to help people out and if there', some great ideas therethat I can introduce to the stardek Stanford Accelerator, I'm happy to dothat. Like I said, I'm really excited to behelping others along their journey, fer severance. I will mention towards theend that that is what I have found to be key, because one thing it's hard todo it's hard to time the market. You really do not know if your specificproduct will be most accepted today or in three or four or five years, so oknow continue oing where you doing and your time will come. Thank you. So muchvery welcome really appreciated thanks for so thank you so much for listening.I know you're busy working to bring your life changing innovation to market,and I vawue your time and your attention to save kind and get thelatest episodes on your mobile device...

...automatically subscribe to the show onyour favorite podcast apt, like apple podcast, spotify and stitcher. Thankyou for listening and I appreciate everyone. WHO's been sharing. The showwith friends and colleagues see you on the next episode of coiq.

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