Alok Tayi - Vibe Bio - Part 2

Intro - 00:00:00: Welcome to The Biotech Startups Podcast by Excedr. Join us as we speak with first-time founders, experienced scientists, serial entrepreneurs, and biotech investors about the challenges and triumphs of running a biotech startup. Gain actionable insight into navigating the life sciences industry in each episode as we explore the business of science from pre-seed to IPO with your host, Jon Chee. 

Disclaimer - 00:00:31: The purpose of The Biotech Startups Podcast is to provide general insight into the ever-changing world of life sciences through the experience of a variety of guests. The use of information on this podcast or materials linked from this podcast are at the user's own risk. The views expressed by guests and any employee of Excedr on the podcast are their own and do not necessarily reflect the views of Excedr or content sponsors. Any appearance on the program does not imply an endorsement or recommendation of any product, service or entity referenced in the podcast by Excedr or by its guests. 

Introduction - 00:01:10: In our last episode, we spoke with Alok Tayi about his childhood and how his early introduction to science affected his choices of what and where he studied. We also talked about his experiences at Cornell, Northwestern, the University of Tokyo, and Harvard, and the many lessons he learned throughout that journey. If you missed it, be sure to go back and give Part 1 a listen. We continue our conversation in Part 2, diving into what sparked Alok’s entrepreneurial drive, the origins of PreScouter, the power of having a .edu email address, his reason for creating TetraScience, and his time at Egnyte.

Jon - 00:01:50: I know you started to make a transition into entrepreneurship. Was it at Harvard where the entrepreneurship kicked in? Is that where you found the spark?

Alok - 00:01:58: Yeah. My entrepreneurial interest began actually when I was at Northwestern. Again another aspect of happenstance, I happened to be walking down the hall. I remember one day just randomly from class to class or from the lab to class and saw this interesting poster that was hanging on the department bulletin board asking for anyone with a scientific background interested in doing a little bit of consulting. It was posted by a business school student who was looking for some help in a project they were working on. I pulled the little tab off with a number, sent an email, ended up grabbing coffee with them. Then it turned out that it was an MBA student who was looking to start a startup. What they were trying to do was build an approach by which they could take technologies that were coming out of universities, labs being announced globally and be able to share that with innovators across different industries. It turned out that the first two or three projects they had were with really big companies, but specifically their materials teams like packaging or electronics or chemicals, folks with that sort of background. And so, another guy who answered it happened to also be a PhD student in Fraser's lab. I hadn't known him at the time, but that nucleus of the three of us plus another business school student ended up becoming the foundation of PreScouter. We started PreScouter in 2010. It's now an eight-figure year of business, a couple hundred employees across a couple continents, basically helping Fortune 500 companies find technologies at universities and startups. That was a really awesome experience where early on as a grad student, being able to build that business, interact with customers, understand what their pain points were, and then find ways to be able to connect that to solutions or products that we were spending time building. The thing I think I realized about myself during that experience was that though I loved science, I also really loved the go-to-market aspect of building a software business. Jon, as a CEO, you also can appreciate that at some level, everyone's a salesperson, right? But being able to develop that at a young age, I think was definitely super valuable and helpful. I remember, again, coming to our earlier discussion that was before we said it hit record. When you are young and a grad student, just power through any sort of workload and schedule. I remember I'd wake up at eight o'clock. From eight to five, I would actually go do cold calls for the startup. Then from five till two a.m., I do experiments in the lab. And then I'd go home and sleep a couple hours and then come back in and start all over again. So it was a pretty intense year or two, but it was such a formative and enriching experience to be able to do both at the same time. I often, outside the earshot of the PI, encourage a lot of PhD students and postdocs to have that kind of side hustle because I think it often gives you a new perspective and helps work a different part of your brain that actually enriches and enforces the work that you're probably doing in the lab from a scientific standpoint.

Jon - 00:04:47: Absolutely. And it's that cross disciplinary kind of breadth that you just can find inspiration anywhere. When I was just science, I used to think sales. What does sales have to do with any of this? But in retrospect, learning that kind of like sales muscle, it just made me a better communicator in the lab. You're in the hood and you're just by yourself. You don't really have to interact with anyone if you don't want to. And I think I learned to just be way more empathetic. No one really wants to work with an asshole. Not that I was like an asshole. I hope I wasn't. But I kind of shed some of this tough kind of like hardness that I think probably built up by just like being by myself, working the lab and sales kind of like humbles you a little bit. On PreScouters, it sounds like you are doing almost like enterprise sales, like, I mean, kind of the Fortune 500. So that's like truly the baptism of fire.

Alok - 00:05:35: Yeah, no, absolutely. And I remember our first deal that we closed was like eight grand. The second deal we closed was 12 grand. And then I remember we closed like an 80K deal with a big household name company. And we're like, whoa, that was the first time we're like, what's the saying in Christianity? Like ask and you shall receive. Right. Like I think it was a great experience to see and have your eyes open to what the potential is. If you all have a good product, a good way to kind of distribute and create value for the customer. And so, yeah, that was a trial by fire. It was mostly an inside sale even at that time, but eventually moved to an outside field sort of motion. And yeah, for me, it gave me a first kind of view into what it was like to kind of hire SDRs, what it was like to kind of do marketing messaging, what it was like to do product and enterprise sales and enterprise sales. I think everyone who does it and especially every CEO probably has a love hate relationship with it, right? You love the energy, the adrenaline that comes with doing it, but you also hate the lumpiness, the uncertainty, the politics. Right. Half my gray hairs are probably a result of enterprise sales. I don't know about you. You don't have much gray hair. So I mean, it's easier for you than it was for me.

Jon - 00:06:45: Yeah, no, it was definitely hard. And it's like finding your champion and figuring out. I was like, org charts within my own company are like enough to navigate. How can you navigate this outside organization that's just a behemoth? And then figuring out who are the stakeholders and who actually cares about this thing? You know, you get on a call and there's like seven people. You're just like, all right, who should I be talking to here? And so your PreScouter days, it sounds like this was truly a baptism of fire. Looking back on it and reflecting it, what was kind of advice for other founders who are embarking on these like early stage venture are some takeaways for you that you think other founders could find value in?

Alok - 00:07:20: For sure. I think in most SaaS companies or most like B2B circumstances, the rational nature of the decision and the value to be created, I think gives you an opportunity by which you can assess upfront before you build anything, spend anything, do anything. Is there a real market you can truly understand by simply talking to people? What are their real pain points? What is their true propensity to pay? As well as what's the kind of value that you can deliver to them if such a solution existed? And that is, I think, the beauty of B2B type startups, where you actually don't need to build anything to do that. The other thing that I often also talk about, especially for the startups I created while I was in university, was that I think the most powerful thing you have when you're a student in this environment is your .edu email address.

Jon - 00:08:08: Yes. You said that. I was like, I just immediately flashed in my head. I was like, yes, the edu email.

Alok - 00:08:15: Yes, you got it right. And I think the big part of it for me was whether it was at Northwestern or PreScouter. In all cases, a lot of my early customers came from basically sending emails from my .edu email address, simply asking for advice, because at least in the life sciences space and I think in the other space more broadly, everyone wants to help the next generation. And if they don't, they're not going to reply to your email. But the folks who do reply are particularly keen and interested in being a supportive partner to you. And some of those folks end up being friends. I think some of my early customers, some companies end up being my roommates at some point. They ended up just being folks that you can really connect with. And I think that .edu email address really serves as an opportunity by which you can disarm the person on the other side of the call. They are in a position where they want to help and support you. Opportunity to basically just learn and let them be the teacher so that you can understand whether you're on the right track or not. And everyone wants to help, I think, in that regard.

Jon - 00:09:08: Yeah, totally. It is actually crazy. You bring that up, because that was like the very first go-to-market motion that we had was the Gmail not so compelling. As we're looking at conversion rates, open rates, nobody cares about this Gmail. And then utilizing the edu, it opened up doors like no other. And we still keep in touch for sure. It's been many, many years now. And I guess the last question I have on the PreScouter front, interfacing with these large Fortune 500s, but also the technology that stemmed from the academic labs. How was that relationship? Tech transfer, I know, varies from each school. How did you navigate that kind of tech transfer ecosystem?

Alok - 00:09:46: So the way we saw it was that PreScouter essentially served as a facilitator of those connections. So it ended up being an accelerant and a complement to the existing activities that went on. Tech transfer teams generally are lightly staffed and don't have a huge capacity to interact with every single prospective company. Further, every single prospective company doesn't have an infinite budget or conference spend to be able to go to every university or lab. The other piece, as we talked about earlier, was that the biggest opportunities we saw were those when you're taking a technology from one industry and moving it into an adjacent one. And that for sure required a lot of dedicated expertise and insight. That's just hard for any one group or team to have within their organization. So what we were able to do is actually facilitate hundreds of different kind of interactions and scoping of technologies whereby different labs with interesting intellectual property could then connect directly with pharmaceutical companies, chemical companies. We had a bunch of food companies that were interested, that use our technology to find the intellectual property, the science that they needed to advance their own product development portfolios. And so the tech transfer offices, I think, loved having those introductions being made because it served their mission. And they also were able to take over those conversations over time as well. So it ended up being a pretty good path.

Jon - 00:11:03: That's awesome. Yeah, I can imagine it would feel for them, the tech transfer offices, like we have superpowers now. I don't know how we were going to humanly get through these apps, but that sounds fantastic. And so after PreScouter, I know you had another entrepreneurial venture and TetraScience. How did that come to be? How did you know it was time to move on?

Alok - 00:11:21: Yeah, I love the team at PreScouter. For me, it was really just thinking about do I still want to become an academic or do I want to stay in the entrepreneurial lane? I still had the scientific itch. So I went to work for George at Harvard while I was in the lab. I remember having to walk in the lab at two o'clock in the morning to turn off a hot plate and sitting there at the same time. It was right around when things like Nest Thermostats became really successful. I was like, if we have technology like Nest in the home, why don't we have it in the lab where the value is 100 times higher? And that sort of began this whole thought process of like, well, how do we use technology to now start to enable all these different equipment, workflows, datasets in labs in a more systematic and holistic way? That began the company TetraScience, you know, founded with a couple of friends, one from Harvard, one from IIT. TetraScience has now gone on to raise, I think, 80 plus a million in venture, has a few hundred employees. And the interesting thing is, you know, we started that business around initially sensors and this concept of Internet of Things, but specifically focused on labs. And it was very much focused around driving efficiency and data capture for scientists. But we also always wanted to move into the analytics and the data space, given the volume of data that's being generated in the lab, and just sort of saw sensors and these sort of benchtop instruments as the place to start. Interestingly, as the company grew, we ended up getting really lucky with this broader tailwind of AI and ML and biotech becoming really exciting and interesting. But in order to do machine learning, you need centralized, standardized data to do it in a systematic way. And so this sort of data platform ended up becoming a critical piece of what a lot of pharma companies needed. And now you have, I think you walk down the street at BioIT or you walk down the hall at any of these conferences and you have a dozen data platforms, right, doing the same thing. So it felt pretty good to be sort of early on in that process and being able to pull together an interesting sort of technology set, one that was able to get in the hands of real scientists and now is actually baked into a myriad of different high impact workflows across dozens of big pharma companies. So that was also, again, leaning on some of the inside sales and enterprise sales sort of experience, a dragon slaying as some folks describe it. But now sort of in a slightly different mode where you're sort of selling software to IT teams and scientific teams.

Jon - 00:13:32: That's super cool. And when we got coffee, we were like talking about there's so much data and it's garbage in, garbage out. So you want to make sure that you get it right and you get it tight as you are kind of formulating, you know, developing the product in addition to doing sales. What were some obstacles and triumphs that you overcame at the early days of TetraScience?

Alok - 00:13:51: I think in both cases, whether it's PreScouter or TetraScience, there's always highs and lows. And I think as a founder, when you're doing it for the first time, it's really hard to truly contextualize those highs and lows. But when you do it a second time or a third time, you start to realize that though this specific problem might be unique to my scenario, I know it's not nearly as bad as it seems. And it's also actually not nearly as good as it seems. So you end up having a much more metered kind of response to these sorts of things over time. I'd say big triumphs in both cases were probably really big lands, contracts and customers. I remember early on, TetraScience, one of the big customers we worked with, one of the biggest biotechs in Boston, they were trying to bring a new drug to market and had an experiment that we were able to help save and capture data for them that took three to four months off the development time of that specific drug. Which in the case of that specific drug, I think it ended up doing like a billion dollars plus top lines, probably doing like three billion now top line. So that was a couple hundred million dollar savings that we were able to deliver for them for a fairly modest set of technology. I think in the case of PreScouter, the ability to actually build out a several dozen person team overseas to actually be able to bring to the forefront new job opportunities for them in their world. I think in the country that they were based, the average individual made something like four to five dollars an hour and we were paying like two to three X that amount. And so being able to bring new job opportunities to a part of the world that historically didn't have them, I think was also a really rewarding thing along with being able to help facilitate technologies to be found across different industries. So a lot of ups and downs across both, but those I think would be some of the characteristic examples that often stick with you for a long period of time. 

Jon - 00:15:30: Absolutely. And I think the lows are so low and the highs are so high that it can just like put you in a whirlwind and exactly what you said, just like having a more metered response and just realizing that, hey, this is not going to be the end of the world and this isn't going to be necessarily the big break. It could be, but just coming into that with that more level head has paid dividends on our side too. Especially with the last year being just like a complete torrential storm for the life sciences and kind of now seeing how the dust is settling and we're starting to come outside. It's like it's safe to go outside again. Everything will be okay as long as the science is sound. Whenever I talk to grad students, they'll talk to me when they're actually encountering their first real low. And it's kind of like, let's take the temperature down just like a little bit. We'll, you know, let's think this through, but yeah, it totally resonates with me. And after TetraScience, I know you made a move over to Egnyte. How did that come to be? When did you know it was your time to move on to your next venture? 

Alok - 00:16:24: Yeah, you know, so Egnyte is an amazing company based in Mountain View, California. It's been around for about 15 years or so now. And Egnyte's core strength is in the data governance and file collaboration space. And so it was one of the companies that had built a partnership at a prior startup and great company, founder-led. We also had shared some investors in common. So, you know, there was some good meat on the bone. Interestingly for Egnyte is that over its sort of decade plus long history at the time, they had identified that with something like 12,000 customers, they were doing 100 million plus in recurring revenue at that point, that there were certain industries that just happened to need their software more than others. And Egnyte at the time competed a lot with like, you know, Microsoft SharePoint and Box and Dropbox and these other players. And what they had observed was that there were certain industries like construction, financial services, amongst others, media, that needed their technology more than others. One of them happened to be life sciences. And so at the board level, they had made us concert effort to say, hey, look, if we're going to compete with these other players, one known strategy and one approach by which we can do that efficiently is to lean into our strengths around these specific industry verticals. And one way you do that is you go hire basically a VP or a GM to basically run that business unit and build out a verticalized function. And so I had never seen a scaled organization and one that was going from a hundred million to, you know, a billion. I think they just recently crossed 200 million. So they're on path to kind of getting there. And so got a chance to go and basically be the first kind of vertical head at the organization and lead and build the life sciences business unit. When I joined, it was pretty small. It was maybe two, three million bucks a year in recurring revenue, modest number of customers. Over the subsequent two to three years since then, it's grown to a low to mid eight figure year business, was the fastest growing industry vertical at the company. And I think at least at the time when I moved on had about 60 or so team members, right? So from one to 60 in about a two to three year period. The thing about it though is that while I was there as I joined sort of mid-2019, which is just before COVID. And so I was maybe two, three quarters in and then COVID hits. And COVID is this really interesting impact because in some industries, like say financial services, we had some growth because people needed to go work remote. And so we need more file sharing software. We need more collaboration digitally. Some industries like hospitality got destroyed. And so no one knew what was happening with the world at the time, but the one sector that was growing really fast or had the opportunity was biotech. So I went from being sort of just one guy, kind of trying to move like one other team member to being like, look, we need you to kind of go fill the revenue gap that was created in these other spaces. And so it really allowed us to embark on a very ambitious journey where we went from one kind of conventional product to five vertically specific life science products, highest margin in the company, highest growth rate in terms of industry sector. And I think double digit percentage of their revenue comes from life sciences space. So at least at the time that I was there. And that was, I think a big part of it was the big market tailwind along with the foresight that the board and Vineet, the CEO had around the potential of verticals, but especially life sciences. And so that was also a really interesting, amazing experience and one that, you know, eternally grateful to Vineet and Rajesh and Amrit and Chris for the opportunity to kind of go build the business unit there and the trust they placed in me to kind of go make that happen as well.

Jon - 00:19:50: Very cool. And it seems that like it went from, okay, we're going to build out this vertical and then it's now becomes like a focus, high growth scale this thing. Like it sounds like a rapid clip. What was your experience building something large quickly?

Alok - 00:20:05: Yeah, it was very hard. There were a couple of things that were difficult. One was you kind of felt like you had every appendage in the levy trying to make sure that you can keep customers and that you were kind of able to get product at the door, that messaging was working. One of the other challenges that you had, the rest of the organization and functions were used to moving at a certain pace, but it's like, no, I need you to move like literally 10 times faster because expectations of this team, which is now different than the rest of the organization needs you to kind of get there. So I remember like the biggest challenges we had were like seemingly simple operational things. Like we didn't even have a budget for life sciences. I would just go kind of like beg different C-suite people like, hey, Dave, who was the mark to CMO at the time? Can I just like have a little bit of marketing budget to kind of run this campaign? We didn't have dedicated head count. I remember another part, again, seemingly simple was like, we didn't even have dedicated SKUs. It was a many months long process just to get life science specific purchase orders out the door, right? For life sciences and products, right? You wouldn't expect that to be an issue, but the organization like, look, we've got two products, the same two products for like the past decade of life. Why do you need more, right? And we're not set up to add more because that's just not what we've had to do in the past. So it was like really interesting to see kind of some of the fault lines that started to emerge. Fortunately, again, I think I give credit to the founding team who still runs the company for having the urgency and the focus like, no, we need to go get this done. And so that kind of cascaded down to the rest of the org over time as well. But yeah, fairly difficult and fairly different, especially when you had, yeah, that sort of lattice mismatch as we say in material science.

Jon - 00:21:33: Yeah, absolutely. And on our side experience similar kind of like growing pains, it is the seemingly simple, creating a workflow for something that didn't have a workflow at all. It's almost like a playbook. You're like, okay, step one through whatever, this has how it should go. And then you kind of create like an appendix for like here are the things when it doesn't fall into this. And I remember that first experience being like, whoa, is it like a step change? It's like a very different means of operating. And then also too, just like your exact same kind of experiences when a team who's kind of like used to a certain pace and a certain workflow, getting them onboarded and integrated is a whole nother thing too that takes time. And it can also be very emotional too. And in addition to the process improvements, how did you manage personnel during this hyperscale moment?

Alok - 00:22:17: Yeah, it was interesting because it was in the midst of COVID, everything was remote. So we had to kind of create some new tactics, right? Egnyte at the time did have multiple offices. So they were a little bit used to Zoom calls, all that sort of stuff, but the team would travel, the executive team would travel to the different sites. I had not had a chance to do too much travel instead of in Boston. We sort of had to implement process and approach to do it in our case, because we had to scale so quickly. And it was a remote team for life sciences. So we did a couple of things. The first was we set some really clear ground rules and processes and protocols around how we hired and who we were going to hire for and made sure we had alignment around that. Second was we made sure that we had regular cadence meetings and check-ins, like I had effectively leaders for each of the inner functions, marketing sales, engineering products, customer success, et cetera, made sure we had a regular cadence there. And also as a broader team, we also had a regular cadence, right? We benefited from some of the same infrastructure that the broader company had in terms of how frequently you get together, what the priorities were, et cetera. So I had to maybe only focus on 70% of that work, which did move the needle, but keeping everyone on the same page and for me to kind of be in the weeds on a bunch of stuff, also I think helped because it allowed me to sort of see where the gaps in communication were and also help kind of cross across the organization, make connections as needed. So that helped a lot, I think as well. Obviously once you hit sort of 50, 60 people, that was hard to scale, but that's why I think the org now, I think sort of figured out some of those pieces over time.

Jon - 00:23:48: Absolutely, and at Excedr we'll do, obviously you have regular check-in with your direct reports, but we kind of do that like skip level too, where you talk to colleagues who are out there executing. And I think doing those kind of like skip levels, it almost feels like you're fortune telling. You're like, okay, you can kind of see around the curve and then fill those gaps exactly like what you're describing. I think Home Depot does this too, where it's like managers always checking in with the associates on the floor at all times and seeing like, what is the feedback here? Where are the pain points? And Home Depot very different than software, but lessons learned or just best practices across industries.

Alok - 00:24:25: 100%, I think Vineet an executive team and he's an E-staff, he was very insistent. He would almost require every team member, especially executive team member to move outside their role and do a different job for a day. And he would always say, the two hardest jobs at Egnyte are being in SDR and being in customer support. Can you imagine some morning a million customers globally and the kinds of questions and crap that gets thrown at you all across every hour, every minute of every day? And being in SDR, when you just have people hanging up on you every day for not wanting to buy anything and not want to hear what you want to sell them. So he was very insistent on developing a culture that valued and respected those individuals, but also required that we kind of spend time there empathize and understand what the market is saying to you, but also the challenges of that kind of role in the trenches.

Jon - 00:25:12: Yep, absolutely. And you can't fake that empathy either. You can tell when someone is trying to fake it. It's like you haven't been in the trenches and you can smell it from a mile away. So that's an incredible practice in my opinion, to get people to truly feel what they feel. My wife is in customer success, which sometimes has customer support elements to it. And I'm not on the calls, but I can hear how heated calls can get and just like so much empathy and just like seeing her go through it. This is hard, but it's so critical.

Outro - 00:25:40: That's all for this episode of The Biotech Startups Podcast. We hope you enjoyed our conversation with Alok Tayi. To learn more about his journey, tune in to our next episode, part 3, where we cover the origin story of his Biotech2050 podcast, how a family member’s diagnosis led to Vibe Bio’s creation, and how Vibe Bio’s ethos helps facilitate the finding and funding of cures for a wider range of diseases. If you enjoyed this episode, please subscribe, leave us a review, and share it with your friends. Thanks for listening, and we look forward to having you join us again on The Biotech Startups Podcast for Part 3 of Alok’s story. If you enjoyed this episode, please subscribe, leave us a review and share it with your friends. Thanks for listening, and we look forward to having you join us again on the Biotech Startups Podcast for part 3 of Aloks's story, where we will cover the origin story of his Biotech2050 Podcast, how a family member's diagnosis led to Vibe Bio's creation and how Vibe Bio's ethos helps facilitate the finding and funding of cures for a wider range of diseases. The Biotech Startups podcast is brought to you by Excedr. Don't want to miss an episode? Make sure to search for Biotech Startups podcast in Apple podcasts, Spotify and Google podcasts, or wherever you get your podcasts and click subscribe. To learn more about our leasing program, visit our website www.excedr.com. We provide research labs with equipment leases on founder-friendly terms to support path to exceptional outcomes. On behalf of the team here at Excedr, thanks for listening.