David Li - Meliora Therapeutics - Part 2

Intro - 00:00:01:

Welcome to The Biotech Startups Podcast by Excedr. Join us as we speak with first-time founders, serial entrepreneurs, and experienced investors about the challenges and triumphs of running a biotech startup from pre-seed to IPO with your host, Jon Chee. In our last episode, we spoke with David Li about his early years in China and Kentucky, his early passion for biology and chemistry, and his experience in the life science and management program at UPenn. We also discussed his time at Goldman Sachs, insights he gained from Fortune 500 CEOs, his mentorship through Need You in New York City, and his ongoing commitment to innovation and patient impact. If you missed it, be sure to go back and give part one a listen. We continue our conversation in part two, discussing David's pivot from finance roles at Goldman Sachs and KKR to early stage entrepreneurship, his time at Benchling as head of commercial operations and Everest Detection as the Chief Business Officer, and the challenges of moving from private equity to startups. We'll also talk about aligning personal values with career choices, building solid teams, and the role of luck in success.

David - 00:01:28:

So in private equity finance and investment banking, and so private equity, which we went to next, you get recruited for your next job very early. So basically, I think nowadays, I've talked to some younger folks in finance, it is literally like the second day you sit on the desk for your first job, you're getting recruited for your next job. It wasn't quite that bad back in the day when I was there, but still fairly quickly after you get settled in, private equity funds start calling you and recruiters start calling you to interview. This is a time in my life, if I had to go back and do it again, I think I would really caution some long-term thinking. And this is probably one of those places where I could have benefited more from thinking independently, thinking about really what do I want for my career and what do I want for myself versus what is everyone else doing? And this by no means is anything to say negative on my experience at KKR. I was there for just about a year, but had a really great experience there as well. I was learning from some credible folks, did a whole variety of different types of deals, not just healthcare. I actually also, was involved in the infrastructure group as well as the natural resources group. And probably the main thing that I've learned from those types of investments that I was helping to execute and analyze was that I actually really did enjoy being in life sciences and really enjoyed being in a place where the ultimate need came from a patient. Somebody needed something that would improve their health or be preventative or what have you. But I learned a lot and learned how to be an investor, learned that they're very, very smart folks and very high quality folks as well. I think I learned quite a bit about, you kind of see it, this trope that as a business person, you have to be kind of ultra cutthroat. I think you can have folks who are good people as well. It's hard. And I met and at least then established the idea that, hey, there is a way to do well in this world without being just a complete cutthroat about it. But ultimately in several months into the job, I knew a really fundamental truth about myself, which then translated to, I probably need to make a switch. And that truth that I found out about myself was, I did not want to in 20, 30, 40 years, at the end of my career, look back on it and say, yeah, okay, if I was an investor, I would have been made partner of some firm, hopefully. And the reason I would have been able to have that opportunity is because I made a small number of investments that turned out really well for the firm. And I kind of wrote a check, turned into, I don't know, a multi-billion dollar outcome, firm made a lot of money. And that was the entirety of my career. That was kind of what I could point to as real contribution. I wanted to look at a product or a team and some sort of concrete impact and say, I'm really, really proud of the fact that I was even involved with that and played a critical role in making it happen. I'm the type of person, I guess, if I know something to be true, then it's really difficult to keep doing the same thing that leads me not necessarily any closer to my personal truth than before. And so I knew I needed to make a switch. But, I knew I also wanted to be thoughtful about what that switch would look like. I was an associate at the time at KKR. It was fairly atypical. To be leaving in the middle of an associate program was almost unheard of. I hadn't met anybody that had done that. There were significant financial reasons why you would finish your time there. And thinking back on it, maybe again, I counseled some long-term thinking that you don't need to be so hasty in making these decisions. But I knew if I wanted to go from point A to point B. And I knew point B was no longer aligned, then kind of the fastest path is going in a straight line from point A to point B. So ultimately, my point B was I really wanted to get into early-stage entrepreneurship, and ideally at the intersection of life sciences and technology in a lot of different forms. And the way I walk people through my decision-making nowadays and thinking back on that time was, if you're going to make a switch into something really early stage, or you're founding something, the only two things that really matter are, one, the team. Is it really, really stellar, best-in-world type team that is fit for doing this thing that they're trying to do? And then two is the market. Do you have a reason to believe that something fundamental is about to change about the market, or something fundamental is about to shift in the market, and that this is a market worth working in? For me, the opportunity that I ended up choosing was a company called Benchling. And Benchling is life sciences informatics collaboration software, lab notebooks, electronic lab notebooks, lab Information management systems and more microbiology tools, etc. And this choice I think really came down to exactly, those two factors. One side known the team at Benchling for a good while be known of them at fairies because they were a friend of friends at MIT founding team. A lot of them are from MIT and from channeling from some folks, I knew that this was a very stellar engineering team, some of the best in the business, best in their grade at MIT in terms of raw engineering talent. And so I thought, okay, well, this is a really talented team. Is this a market that I want to be in, I think is the right market. And a couple of comments on that. On the one hand, I had been in a lab before since high school, right? And I also did obviously some undergrad research and things like that. But I knew how painful it was for any software in the lab, let alone lab notebooks, but everything, man, tracking anything was a disaster. Trying to get any data out from anybody's notebook was a disaster. Had we run this experiment before? Probably. I don't know. Go look in the freezer. There's like-

Jon - 00:07:14:

That's exactly it. That was the exact same experience. I'm like, I don't know, go talk to them down the hall. And you're like, is this how we really do this?

David - 00:07:24:

It seems ludicrous. And by that time, you know, it was 2014. And consumer software was fantastic. It was great. It was fast. It was snappy. It was browser-based. You didn't need a laptop. You just go anywhere there's a computer, you log in and you see your data. So I really felt like something was coming for the digitization of the informatics space in life sciences to kind of complete the story. Benchling, I joined on as employee number six, headed up the go-to-market motion there, sales, marketing BD. Really fortunate that the company started taking off in the time I was there for about three and a half years. And really hit tens of millions of revenue and really grew the organization significantly. I've learned a ton during my time there and happy to go into some of that detail. But I would say that one thing that I only appreciated later, but was a really key driver for the ultimate success of Benchling and probably should have taken more seriously into account was not only that digitization of the life sciences was happening, but there needed to be some fundamental shifts in the science being done. The modalities, the therapeutics that were coming to market, the way that science was being done that would enable this kind of tech for tech focus shift in systems. For Benchling, that ended up being cell and gene therapy really took off in the 2010s. In the early 2010s, cell therapy, maybe there's three or four small handful of clinical trials being run. By 2019, I think there were like 700 clinical trials being run in cell therapy. So why was that important? The reason it was important because it created a new, almost entirely new research-workflow that was very molecular biology based, very much not small molecule, chemical scaffold structure based. And then you needed better tooling, both digitally and from an informatics perspective. And that was the real opportunity for BenchLink because there was so much new innovation, so many new biotechs, so many new firms, so much investment into that area. It's much easier to capture land, essentially real estate and deals, when the alternative is nothing. When you compare it against something, even if that something is terrible, it's hard. It's hard. You have to convince folks that you need to make a switch. So anyway, so I think that looking back on it, I think really understand that market dynamic would probably serve me better. And I definitely, to some extent, got lucky that that was the right time to really be joining a firm like BenchSling, but really learned so much from my time at BenchSling and grew a ton as leader as well during that time.

Jon - 00:09:53:

That's awesome. And for anyone's career journey, knowing what you don't want to be doing is a very important thing, even if you might not know exactly what you ultimately want to be doing for the very long term. The process of elimination is critically important. So I love that you had that introspective moment there. But I know exactly in the middle of an associate program, maybe if I got through the end of the year, for anyone who doesn't know in the investment business, year end is when generally payouts happen.

David - 00:10:22:

Yes.

Jon - 00:10:23:

So I experienced the same thing. I was like, I can't deal with this anymore. And then I was like, oh, crap, 21-year-old Jon, why? You could have made it for a couple more months.

David - 00:10:33:

Yeah, you really could have.

Jon - 00:10:35:

Yeah, yeah, exactly. But hindsight is 20-20. Let's not understate that. There is a luck element to this as well. And with Benchling, again, hindsight is 20-20. And Benchling's story is still unfolding. But there's an element of, I always think about surfing. There's this massive swell coming. And the luck is being in the water at that time. And then after that, it's on you. You better start paddling, because you're either on the wave or you're not. So really cool that you're on the ground floor, number six. Because in Benchling, now you're like, this is a well-oiled machine.

David - 00:11:09:

Yeah, no, it's totally different. I mean, many hundreds of people, very much a kind of true enterprise-grade business now, serving top 20 pharma in all the different ways. Yeah, no, I think there's a huge unlock element. And I think the only thing that you can really control then is figuring out the best people that you can work with, because at my view, our careers, like many other things in life, are compounding. So working with the best people, even if this current wave ends up surfing well and doesn't panning, you build really long-term relationships with folks that you can work with again, that can introduce you to other really high-quality people. So I think it's really, really important, first off, that you just pick the best people that you can find. And then the second, I think, is that you should be passionate about the market space you're in. Otherwise, you don't know whether the wave is going to be coming tomorrow or next year or a couple years after that. And biotech is a little bit different. You can kind of start identifying the technical problem that can then unlock a direct clinical impact or as reason to believe that there's clinical impact behind that technical door. But in other market-based kind of revenue-based business models, it really does depend on some market shift, and we don't control that. You kind of only control, hey, I'm going to land here with these people. I'm passionate about the market, and that's why I wanted to do it. I think in a lot of ways, people ask me all the time, like, how did you know to jump? Like, why did you do that? And the way I respond now is mostly, yeah, it just comes down to if you really feel like you've done your very best to get the best team and it's a market that you really care about, because it's going to feel like the alternative, your existing alternative, is better for some period of time. And so you have to be mentally and psychologically okay with that going into it, and then still feel like, hey, this is the right choice. And it was funny, I probably had this very same conversation, the exact same conversation with my parents, probably multiple times a week for six months about why I was doing this. I remember just constantly having the same conversation. Like my roommates heard it, my girlfriend at the time heard it. They're like, why do you have the same conversation with your parents all the time? I was like, well, you know, I want them to come along with on the ride and understand. But yeah, I think for a lot of people, from their perspective, it just, you know, it didn't really, really make a ton of sense. But you really need to have that conviction and you really double down into what you believe in.

Jon - 00:13:32:

Totally. Again, it gets back to being comfortable in that kind of oddball pocket that we're describing. You're taking a leap of faith. You truly are. You don't have to be a founder to be taking a leap of faith. Early employees, you're building the plane as you try to fly it. If you're joining that, that's a leap of faith. But you have to triangulate the pieces and then you have to take it for your own reasons. Not like because someone else is telling you, you should be taking this.

David - 00:13:56:

Absolutely. I think having that internal conviction is everything. And if you're really thinking from first principles about what you want, and this is your answer, then that's your answer. You can't really can change it for anybody. Now, maybe talking a little bit more on Benchling, I learned a ton, you know, how to be a leader for the first time, really managing people for the first time, which I think back is if I was a founder eventually and thinking about giving someone like that, that much opportunity now, it's hard to imagine, but that's just kind of what everybody did, right? You came in and punched hopefully way above your weight. So I am very grateful for the Benchling founders to have taken me on and taking that opportunity and have been able to help grow the playbook together, set the culture together and really set the foundation for what was to come, learned how to find and figure out who was good talent and scale good talent over time. And also, unfortunately, how to part ways with folks that were not the right fit and how to do it tactfully, how to do it in a way that served both as best we could. Everyone involved, you know, kind of the key stakeholders, the person moving on, the company, the leadership in place, just a very delicate situation that not necessarily 100% right way, but there's definitely ways to handle it better and ways that can really improve the situation. And so I learned tons about early stage startups, how to be a leader and grow into a vision. And at the conclusion of my close to four years there, I was starting to think again about what was the true north for myself. And what I was seeing was Benchling was a very different place than when I first started. When we first started, I remember kind of the very first week I started, we were based in San Francisco in the SoMa area. And we were on the third floor of this artist studio, very cheap rent. It was five software engineers and myself in a room. Two weeks before that, I had just left KKR. At the time, it was on 5th Ave and 57th, overlooking Central Park. You're on the 43rd floor, double mahogany doors open, and you have this breathtaking view. So it was very, very different to come into a place like Benchling at the complete opposite end of the spectrum. And as I was saying, Benchling was growing and grew over time, very fortunate for it to be growing. And so it was approaching, gosh, over 100 people. My team was growing. And so it was just a different place than when I first started. And I knew I wanted to get back to building in a really entrepreneurial way, perhaps even that formation stage. I knew I wanted to do it in the life sciences. I wanted to do it working on a product that actually got to a patient. And this was, I think at the time, also another leap of faith. Because by that time, at least people inside the ship at Benchling knew it was going somewhere. Nobody knew who we were at the time. It was kind of 2018-ish, 2019, probably until like 2020, 2021, when the company raised massive rounds, people started really to stand up and take notice. But everyone on the inside kind of saw that this is going to be something. And obviously, to folks that are not intimately part of the startup community, we get stock. And every month that you stay, you vest more stock. So if you know something's going, there is significant reason why you should consider staying. And that's exactly why they do that, right? They want you to keep that organizational knowledge internal. But then I remember going through a very similar soul-searching exercise, thinking about, is this what I wanted my next stage of my career to be? Did I want to be at this intersection of technology and life sciences? Or did I really want to take another swing and go search for something in the life sciences that was directly going to reach a patient? And I reached my conclusion. And once I did, I kind of knew that I needed to make a switch through that experience. It was, again, kind of really figuring out through my network, speaking to a bunch of different opportunities, very similar to, again, the experience at Benchling for searching for an opportunity. But I was very fortunate through some of my Goldman contacts to met another ex-Goldman banker who turned into a biotech entrepreneur. And his name was Brian Slingerland. Brian was the founder and CEO at Stemcentrx. And he sold Stemcentrx, which was an antibody drug conjugate company, to AbbVie in 2016. So this is a little bit before I met him. And he decided as the next venture, he decided to start a cancer early detection company. And the company ended up being called Everest Detection. And at the beginning, I was really just working with Brian on a whole bunch of different projects, right? I was saying, you want to just get more exposure, try to understand a bit more about how early stage life sciences startups really worked. And then met Brian and said, hey, let's just work on a few projects together. And when he started the early detection company, eventually, I felt like there was a lot going for it that I joined on as employee number two, I could say, kind of very first founding team. And so that was an experience, all in all, I think, kind of wrapped the Benchling chapter, learned a ton. Really, really took away a lot from building early stage Startups, and I was excited to bring some of those lessons into Everest and beyond and later on in Life Sciences.

Jon - 00:19:05:

Very cool. And one thing I'd like to highlight, so my wife is in software tech, and life science tech and software tech, both share tech in their name, but very different in how they operate. Yes, early stage, both share tech, but very different. And again, I'm imagine what it would be like to be there at the ground floor Benchling and what that means above and beyond just working with Scientists. But go to market motion is like something that most biotechs don't do if at all or just way way way later and again, I'm super jealous because like being there so early you probably wore a bunch of hats. And it's going to be like leveling up and leveling up with a great team and a great market working with cool people. It sounds awesome. And before moving on from the Benchling era for you, can you talk a little bit about, I realized you had to build a team and you grew really rapidly. Were there kind of like some technical hats that you had to wear and learn on the fly that you carry to this day?

David - 00:20:06:

Oh, yeah, absolutely. I think being the first couple, you know, is myself and one of the associates that we started in the early days, building the business side. We had to learn how to do sales. I'd never done direct sales before. I had to learn how to do customer success when you land a client. How do you service them? Make sure they're doing well. Make sure they're going to keep expanding their use of the system. How do you do technical sales, demos? I obviously, have been in lab before, but that's very, very different than trying to sell someone a piece of software. And then all the back office stuff, not even back office in the sense of like accounting and things like that. But how do you even track sales? You know, what is this Salesforce thing? Like, how do you even run a sales team? As we started getting traction, we had to bring on full-time professional sales folks. I was their first manager at first, you know, kind of how do you compensate them? What is their bonus? You know, how much of that bonus are you going to pay out as a direct comp versus variable and bonuses, incentives and things like that? Entire nine yards, right? Everything that we did, we had to think just from first principle fundamentals, what makes the most sense here? And I think that was part of the culture. The part of the culture is we just thought about things in probably kind of the most fundamental level and then try to adapt it to our needs. And then eventually as the team started scaling, there's a ton on the marketing side that I learned, whether that was what is content marketing, what's product marketing, what's branding, what's growth marketing, how do you get leads, how do you convert them, what's the sales funnel. I could go on and on and on. There's just so much that we covered, but I thought that was to the phrase that you were using earlier, being the right market, exciting market, and with really great people, talented people, and then starting to win. Win being we started to take market share, we started to get contracts. That's a really magical moment that I think a lot of people say you learn from failures, but I would say in this instance for early stage startups, you really need to see what winning looks like at the kind of nascent formation stage and feel that magic. So learned a little bit about that and still think about that sometimes in terms of just how do we create a version of that that translates in the life science world? What does that feel like? What are the inputs? And how do we really make that magical experience that we're all in this really important mission together and doing well and making progress and really enjoying the experience? Yeah, Benchling was incredible.

Jon - 00:22:28:

Yeah. And I'm seeing kind of a through line here. Like, while at Goldman, you're seeing what winning is like Goldman wins, we don't need to beat around the bush Goldman wins, and they see a lot of winning. So you're like being on a winning franchise, and kind of having that baked in. But again, not to totally neglect, like failures, you learn from failures as well. But again, it's both sides, you got to see both only seeing one or the others like, they're both opposite sides of the same coin. And I think about that a lot on my end too. And I played a lot of sports growing up, so it's just like, I've been on some bad teams. I've been on some really great teams. And I took away a lot from both experiences. And I love hearing about that. Like, you know, what was going on at Benchling and how they just baptismal fired you. You're like, here you go, airdrop, figure it out. For anyone contemplating an early stage venture, that is what it is. Like that is generally what it is, but it's the best experience and you learn the most from it.

Outro - 00:23:27:

That's all for this episode of The Biotech Startups Podcast. We hope you enjoyed our conversation with David Li. Tune into part three of our conversation to learn more about his journey. 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 three of David's journey. The Biotech Startups Podcast is produced by Excedr. Don't want to miss an episode? Search for The Biotech Startups Podcast wherever you get your podcasts and click subscribe. Excedr provides research labs with equipment leases on founder-friendly terms to support paths to exceptional outcomes. To learn more, visit our website, www.excedr.com. On behalf of the team here at Excedr, thanks for listening. The Biotech Startups podcast provides general insights into the life science sector through the experiences of its guests. The use of information on this podcast or materials linked from the podcast is at the user's own risk. The views expressed by the participants are their own and are not the views of Excedr or sponsors. No reference to any product, service or company in the podcast is an endorsement by Excedr or its guests.