James Evans - PhenoVista Biosciences - Part 3

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. 

Recap - 00:01:10: In our last episode, we spoke with James Evans about his time at MIT Whitehead Institute, his journey towards entrepreneurship, and how he created the unique work culture at Phenovista. If you missed it, be sure to go back and give it a listen. Today we are excited to chat with James about solving recurring problems in a startup, the difference between being bootstrapped versus finding venture funding, how to make clients business, the importance of being scrappy, and why adapting and having backup plans is critical. So sit back, relax, and let's get started.

Jon - 00:01:46: You need a lab. It sounds like you found the hoods for 500 bucks, which just sounds like a steal. How did you find your first lab space? How did that come about?

James - 00:01:53: So here in San Diego, there's a JLABS, which at least seemed like an option. And I don't know that we would have been allowed to go in JLABS. We suddenly looked at it as an option and it was relatively expensive and wasn't a great fit for our needs because the one thing that we needed lots of was tissue culture and that was at a premium within JLABS. We were like, well, that's really the only thing we need. And so we looked at the cost of signing a one-year lease at the business park that we're in now, which is the Cornerstone Court. It was more of a commitment. The commitment at JLABS was shorter, but from a dollar's perspective, it was more expensive than signing a one-year lease. So we're like, well, let's go both boots in, sign up for a year and we can cover the cost and let's just see if we can generate some business during that year. So we did that as far as lab space. And then, like I said, we found those hoods, which was a fun adventure. There was also a really great nonprofit that we used. I don't think it's going anymore. They would have this used equipment that they would get donated from big companies. And we bought a centrifuge or just a bunch of generic lab equipment for a couple thousand dollars or something. We had all the basics. So that was really, really great too. And we've tried to sort of hand that equipment down. Companies that have started since and replaced things and were like, well, this still works. We could do something with that, so we tried to hand that down and things like that. And then for us also being a service provider, we wanted to make sure that clients knew that this wasn't just something we were going to do for a few months and then get real jobs or something. So, yeah, having real brick and mortar lab space, really try to convey that, the fact that we planned to be around for a long time. But yeah, signing that first lease was nerve wracking.

Jon - 00:03:35: Yeah, I'm sure. I mean, it's like, it's a big commitment. And I love hearing this story because I think, especially nowadays, it almost feels like dogma. You must run a company like this, fund it like this. It's kind of like this one step after the other, predetermined. It's kind of like run the playbook. But what I'm hearing is very much a blazing your own path and it works.

James - 00:03:58: Sometimes. Yeah, I mean, so far.

Jon - 00:04:00: Yeah, yeah, yeah. I mean, fast forward like a decade later, I think that's something to be proud of, absolutely. And I love to hear that it's kind of like a choose your own adventure in the world.

James - 00:04:09: It's funny how I went for a walk before this. I was talking to my wife, she works for my aunt too. And I was like, oh, I just listened to these other podcasts. Those guys are rock stars. I was like, I guess I'm scrappy. And she's like, yeah, you're totally scrappy. You're a problem solver. And I was like, yeah. I think that's what Jake was saying, like when he was growing up in Guatemala and having a plan A, B, C, D, and E. And going back to where we started the company and not really having a plan so much as a strategy is about just like, okay, well, if something comes, we will do our best to take advantage of it. And I think that's really a hallmark of entrepreneurship. I think it's just like everyone has a plan till they get punched in the face. You can plan as much as you like, but at the end of the day, nothing's going to go the way you think. So just adapt as it comes at you. But yeah, it's definitely a challenging ride. 

Jon - 00:04:59: And that's amazing. I actually say that on my morning meetings sometimes to the team internally, because it's exactly that. And I think being light on your feet and just being able to adjust with what comes is super critical, like super critical. And I think even with outside investors, they want to know that you're quick on your feet too. And I think it is probably better to just like admit that like, you know, some of the things we don't know and we're going to have to figure it out on the fly. Because if you have it all figured out and you presented it as such, they'll sniff it out. Like, do you really have it figured out?

James - 00:05:29: Right. I mean, it's like this year, right? Everybody's been kind of caught out by disruption and industry and then like, so credit challenges that people are having. And it's been hard. It's been a hard few years. Yeah. Every year there's been something, a new challenge, you know, with the pandemic and then supply chain issues, labor shortages, this year's thing. It's been a really challenging year. And I'm very grateful that Phenovista is still growing and got great clients and could repeat business and stuff and growing our team and everything. But it's like an ongoing new challenge and you just wonder what next year's going to be like. It's nice, predictable, easy growth. We do one of those. Yeah.

Jon - 00:06:06: And I'm sure it's invaluable to have built the muscle early days on being efficient. Keeping the lights on without outside investors is no small feat. And I think that's a lesson that anyone can find value in. It's just like treating the dollar as such.

James - 00:06:21: Yeah, I mean, I can't take full credit for it. I mean, it's really the team in the lab, especially obviously the commercial folks too, but in the lab, especially doing more with less and really aligning on what the daily, the weekly, the monthly, the quarterly goals are. Like, okay, what do we have to get done today? Who's doing what? No one's sitting around. There's a lot of things that just I'm not part of anymore that the guys here, Tony and Chris in the lab really make sure that there's really good communication and coordination amongst the team as far as priorities go and making sure the quality of work is always there. And if that's not happening, it doesn't matter what I say, you know, I can say be more efficient, spend less money. It's not going to happen unless you got buy-in from the team. And we're really lucky to have high quality folks working for us.

Jon - 00:07:09: Totally. And if we're going to think about the Phenovista journey as like divided into eras, were there any key takeaways of specific eras of Phenovista and how did you problem solve that? And perhaps someone else could find value in how you did that.

James - 00:07:21: So like getting professional business development involved was an inflection point where we started to know how to do sales more than learning what you've learned as a customer. It's a real skill to be a professional salesperson and BD and marketing and all that. So bringing that capability in-house after like four years or so on, like that really helped us professionalize that aspect of the business. I would say after that sort of the third phase of being an investor has really been coincided with the take-out outside investment and really looking at operationalizing or industrialize making the business more scalable and getting handles on key metrics for productivity and success and making sure that, you know, you aren't doing things that are losing money or if you are like fixing them early on in the business, just do stuff. Don't think just do better thing. You know, now the stakes are a lot higher and it's more about creating efficiencies and priorities, things like that. So yeah, that's kind of a three stages. So sort of initial startup scrappiness, do anything, but just do something to then having professional help on key parts of the business and then just the phase of the scaling.

Jon - 00:08:35: Totally. And I'm always curious about like the sales and marketing efforts. And I know you work with large institutions and also smaller folks as well. And I guess early days it was like almost door-to-door sales for anyone who's looking to secure new business with big folks or small folks. Are there like tips and tricks for anyone looking to do that?

James - 00:08:52: And I wish I had the secret sauce. It's hard. Yeah. I mean, it is still like knocking on doors. There are tools and there are agencies you can use, but it's a mixed bag. And I think the hardest thing is, you know, it sounds contrived a little bit, but if you find something that works great. She had a backup plan. It's probably going to stop working in three to six months. So you always got to be having a multifaceted approach. I mean, did you imagine you'd be doing podcasts three or four years ago, right?

Jon - 00:09:20: I actually pushed back against it. I have my arm twisted.

James - 00:09:24: Yeah, yeah, it's great. I mean, a lot of companies are doing it and it's a great way to showcase that you're involved in this area and your approach on things, but yeah, so it's constantly evolving whereas like email campaigns might've been a thing that worked, you know, last year people's filters evolved to it and they stopped working, so you're back on the LinkedIn cold calls and phone calls. And now the world is kind of slowly opening up and people are getting more to in-person meetings and like lunch and learn, sponsoring coffee, socials and things like that, socials, so do all the things.

Jon - 00:10:00: Yeah. And I keep thinking about skateboarding. Like I keep going back to that. It's like, again, you just try and you try and you try and you try until you land it and then you move on from a kick flip and you try to do a heel flip and then you have to learn something new and then you just continue to like level it up and level it up as best as you can. And once you've secured these clients, and I think for founders who are starting off, they may not know that working with a small business is very different than working with a big business, which is also very different than the government. What has your experience been working with a diverse clientele? And maybe let's start with the big folks.

James - 00:10:36: So big folks, fairly small folks, big folks take forever to get all the paperwork done. And so if you're just starting to have a conversation with a big pharma client, you might not see any money for six months. It might take that long. Like working through some of the marketplaces can sometimes speed that up. So like Science Exchange and Scientist.com, those are both great resources that we use and those can speed things up. But then big pharma companies can vary within that group, some better or faster than others. I think small companies tend to be faster, but I'd say the biggest difference is the maturity between big companies and small companies is big companies, the people there are usually more experienced at working with service providers and know the process and the dance and what's reasonable to ask for and what's considered mission creep and what's unreasonable and the kind of just the professionalism. And it's not all, but some of the smaller companies and of course small companies range from one or two people to 300 people. So there's a big range, but there are definitely more instances with small companies where particularly if the companies come from right now, there's a lot of AI companies who maybe don't understand when you ask somebody to just replay the cells or you're doing the experiment today, can I change all the conditions? You're like, no, that's not acceptable. And part of it is, you know, on us too, you've got to make sure you set expectations and this is just a learning process for us, right? Learning the different types of clients that you work with and what they come to the table with as far as their experiences and sort of making sure that they know how things are going to go. But yeah, with bigger companies, they tend to know what they're doing and it's usually smooth sailing, though slower.

Jon - 00:12:14: Yeah, totally. And the dance with government labs and like going through with the procurement, do you have any experience with that or tips and tricks on that?

James - 00:12:22: Only from past lives, there can be a big company on steroids, so even worse and even slower and more bureaucracy. We've had some grant, but that's not so bad because it can be some more creative work, but we don't necessarily do a lot of government contracts right now. But my past experience would pre-warn me that it tends to be a lot of paperwork and very slow, but it can be meaty, decent sized projects, so it can be worth it.

Jon - 00:12:44: Absolutely. And just kind of looking forward now, we've kind of done a retrospective. What's in store for Phenovista in the next year or two? 

James - 00:12:51: Yeah, right now, so we are scaling our revenue. We're launching some new off-the-shelf services that are pretty exciting in the areas of cell and gene therapy. So some new services that really support AB uptake into different human cell types. Some functional assays, so this is all stuff that's going to launch in the next six months. But then really we're tackling some toxicology areas as well using cell painting, which is pretty exciting right now. And then continue to grow, probably another series of fundraising in the next year or so, which would enable us to develop some essentially like knowledge management platforms that we're looking at. So our measurement technology imaging is really rich in data and being able to measure abundance in space and time and different cell types and locations within cultures. And then, of course, you've got the disease model. So it's a really rich environment to model biology. So it's an area we're looking to explore in terms of capturing that information, some of our AI tools that we have/

Jon - 00:13:53: I'm so excited. I just got pumped up just hearing about it on the roadmap. That's so cool. And thank you for your time, James. And I really appreciate it. And I just have two closing questions I'd like to round things off with. Would you like to give any shout outs to anyone who supported you throughout your career? 

James - 00:14:08: Oh, yeah. I mean, like I mentioned, Alan and Pam back in Grad School really supported me and everybody in the lab back then. In Paul's Lab, Paul in particular, and then I worked with a really talented postdoc there, Ivan Carrera, who really supported me in terms of getting to know my way around MIT and Whitehead. And obviously Sanjoy really has done a great job of equipping me with plenty of caffeine back in the day. So Sanjoy was always an English gentleman. He would be like dressed in a suit and would wear a hat and, you know, he would look like very dapper. And I was always like kind of skate punky and really disheveled and different color hair and things like that. He would always buy me coffee. So I definitely still enjoy several thousand gallons of coffee. And then just ongoing, I mean, especially right now, it's the advisors that we have at the end of it that who just, you know, really experienced and give us great advice on dealing with the stuff we're learning on the go. So, yeah, it's just so many people that have helped along the way.

Jon - 00:15:07: Yeah, I always think about this and how critical it is to have a team. And I'm always so grateful for the generosity of these people. Like, you know, early days, they don't have to take that meeting with you, but they did.

James - 00:15:19: Yeah, in that and even more shocking is the people who believe in you and join your company. And they're like, oh yeah, okay, I'm going to take a job with you and I believe that we can make this work. And yeah, that's always super humbling and especially it's easy when things are going well, but when things are tough, you know, and it's challenging and you have people stick by you and work extra hard to make it happen. It just makes you want to work even harder to make it happen. So that's really humbling.

Jon - 00:15:47: Yeah. And one last question, if you were to give any advice to your 21 year old self, what would it be?

James - 00:15:53: Do more yoga. I wish I'd done more yoga back then that would help. But yeah, I always wish I'd been more skilled in sort of computational approaches, where I would throw together some code and things like that. But I think everything's going all right. It's working out.

Jon - 00:16:07: Yeah, no, totally. And actually nowadays I have to make a concerted effort to actually stretch and after being punched over at a computer all day, it's important to not lose sight of your general physical well-being as well.

James - 00:16:19: It's super important. I mean, like we haven't got a chance to touch on that. But as far as like dealing with the stress, definitely looking after your body as part being an entrepreneur and looking after your cardiovascular and your mental health. I mean, these are really important things that people don't tend to talk about enough. But yeah, I would say that's part of that puzzle, you know, is definitely making sure you're physically and mentally in shape to deal with the ups and the downs.

Jon - 00:16:43: Yeah, totally. And entrepreneurship on paper looks like just a purely cerebral exercise, but it's very physical. If you don't take care of your body, you won't be able to show up to work. So I'm the same, like trying my best to not just have atrophy and just, you know, wither away. But James, thank you so much for your time. It's been super fun.

James - 00:17:04: Yeah, thanks for having me on. Yeah, it's really always very great talking with you and thanks for asking me to be a part of it. I'm looking forward to whoever comes next. We'll be tuning in.

Jon - 00:17:12: Yeah, and I'm so grateful that we're able to do this and also to be able to work with Phenovista. So thanks again. And maybe next time we'll do another deep dive on other aspects of company building. Thanks again.

James - 00:17:22: Yeah, thanks Jon.

Outro - 00:17:24: That's all for today's episode of The Biotech Startups Podcast. We hope you enjoyed our three-part series with James Evans. Be sure to tune in to our next series, where we will be chatting with Alok Tayi, Founder and CEO of Vibe Bio. Vibe Bio is focused on building a community of patients, scientists and partners that work to identify promising treatments for overlooked diseases while financing them in innovative ways. Prior to Vibe Bio, Alok started and ran several life science-focused software companies, including life sciences divisions at Egnyte, TetraScience and PreScouter. Before his time in software, he was an academic scientist working at Harvard, Northwestern and Cornell. His scientific and commercial experience, along with tech-focused mindset, means that he can offer unique insights that all founders can benefit from hearing. The Biotech Startups Podcast is brought to you by Excedr. Don't want to miss an episode? Make sure to search for Biotech Startups Podcasts 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.