Nathan Clark - Ganymede - 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 Nathan Clark about his early years, the influence his entrepreneurial father had on his career decisions later in life, and his time studying business and finance at UNC. We also discussed his role at Goldman Sachs, where he learned about the intricacies of bond trading and the important qualities needed for success in the fast-paced trading environment. If you missed it, be sure to go back and give part one a listen. In part two, we continue our conversation, discussing Nathan's move from Goldman Sachs to a product management role at a firm and later managing several data products at Benchling. Throughout the episode, Nathan highlights the importance of understanding user needs, aligning product development with real-world problems, and accelerating scientific progress by addressing the challenges researchers face today.

Nathan - 00:01:23: 

One of the things I realized when I was at Goldman was that I loved the finance side. And I loved understanding that and thinking about that, like kind of building on that notion of the intuition. There's almost like a Tetris effect that you get there after a while where I remember one of the analysts on the desk told me that he had a dream about CLOs. And I thought that was so funny. But then nowadays, you know, I still I get to be our CFO, basically. And so I'll go in and be buying treasury bills as our treasury ladder for all the cash we have on hand. And I get that flash of like, oh, let's think about the yield curve and interest rates for a second. It's so satisfying.

Jon - 00:01:58:

Yeah.

Nathan - 00:01:59:

But given that, though, I think what I realized, I also really love project based work. And I love the technology side. And I felt so drawn into the mechanics and the systems, even when I was at Goldman and thinking about them. So when I was looking at roles, I realized I wanted to do something that was more on the technology side. And that was drawing me pretty heavily. So I found this opportunity with a firm, the Buy Now Pay Later company. I had actually heard about it a couple of years ago, funnily enough, back in 2013 or 2014, I think, in the context of Max Levchin, the PayPal co-founder, starting a new company to do real time underwriting for microloans for purchasing things. And I thought, oh, at the time, that's cool. And then I found there was an opening and they were building out their capital markets team. So it was hard to say no to that. So I ended up going there and initially started on the capital market side. I ended up moving to product management after that as I kind of continued barreling down the path of just obsessing over systems and mechanics and data. But that was an awesome experience. Funnily enough, I mean, that was actually going already when I was in CLOs, I was close enough. The stuff like asset backed securitizations were already sort of a cousin product to us. And then we were even closer to that. I don't know if you all securitize your products, but I certainly saw a lot of equipment leases. So I would basically been building out kind of a capital program for, in this case, a firm's loans that it originated. But yeah, I was I was drawn to the technology and it seemed like the kind of company where you could blend business and technology in a really unique case with a really, really strong founder. That would be hard to it was kind of a once in a lifetime opportunity in that sense.

Jon - 00:03:37:

That's amazing, honestly. And just to answer your question, for us, we're just so regarding like securitization of our leases. So because I came from the lab at Berkeley, I had no experience in finance. I was purely, I was like trying to scratch my own itch. And. With that comes exactly what you were describing during your bond trading days, where it was like, we are still to this day, super bespoke, non-standardized. And so when we talk to the capital markets about it, and we don't currently do it. And I think it just makes sense because we're so bespoke. When they see our paper, they're like, what the heck is this? What the heck is this? We don't know what to do with this, right? Versus a mortgage, which is very standardized. But it's definitely something we thought. Because when I was learning from first principles, I was like... Oh, for me, I created the lease program to like scratch my own niche, particularly the scientific community, like my people. But then as I started to do this longer and longer and longer, I learned about securitization. I was like, oh. This is what most credit shops do. They originated and securitize it. I was like, this is news to me because for us, we just, you know, we originate, we work with the lab from start to finish all the way through. So like, and by the way, I didn't know that was weird. Like I did not know that was weird. It's like, I learned, I was like, oh, like banks don't actually hold their loans. They just sell them off. That was like news to me. So like-

Nathan - 00:05:15:

To the CLO trading desk.

Jon - 00:05:16:

Yeah, yeah, exactly. I'm like, huh? I was like, this is a thing? And so for me, it was this interesting thing where, so we originate, we work with the founder all the way through their growth stages, like, you know, precede through whether they sell our IPO. And a lot of the time, and we're there the whole way and supporting them. And then we, a lot of the time founders, you know, when they go do their second venture, we will work with them again on their second venture. And so exactly when I was talking to Capital Markets, they're just like- They like looked at me weird. They're like, that was very weird. I was like, I didn't know better. I'm a biochemist. I had no idea. Anyways, that's a digression. So Affirm sounds like a very, especially at that time, sounds like a very interesting opportunity. How would you describe the difference between working at a fintech company and Wall Street?

Nathan - 00:06:05:

I think it's definitely a big difference. But ultimately, what's nice is data is data and dollars are dollars. And so a lot of the mechanics of things come over. And then it's more just working in the Silicon Valley ethos of, you know, you're talking with software engineers now and you're talking with marketing people and all these things. It's funny because I think a lot of what I was doing also was exactly that exercise that you were talking about of saying, okay, we've got this weird new thing. We've got these point of sale loans that no one's ever heard of. So let's actually start bringing them to the bank because we were growing so quickly. You know, there's no we had no way to have enough cash on hand to actually issue them all. We had to originate them and then sell them and get the cash back to recycle it, sell them or warehouse them. We would leverage them up. So at least we get some of the cash back. And so a lot of it was explaining to Wall Street, again, of saying people kind of, hey, here's what this thing is and here's how it works. And here's how you can think about it from a risk perspective so that we can actually price it and bring some liquidity to ourselves. So it was an interesting like halfway, like talking to those same people, but then also working with the software engineers on my end. But I think what I, continued to see there. What I liked in the culture of the software engineering was that, at the end of the day like, you can, uh, you can find the way to explain the thing or put a price on it, but uh, it's the the merit of building the thing and then also digging into the mechanics and, uh, debugging it was I think to me, everything that I, I love so, I quickly gravitated further and further towards the tech side, and I ended up moving to the product management side, uh, originally working on uh, new financial products including the savings account at a firm. Um, but then taking over a bunch of different uh, kind of mishmash of areas. That needed help like the uh, trust and safety user accounts and fraud systems machine learning, merchant payments, and so on. But I think throughout that what I found was, I just always loved going further and further towards that project side, because it levers you up so much in terms of uh, I do like expanding that window of how long you can have to make decisions, and how deep you can get on decisions, and how deep you can get into the mechanics of stuff. So, I think that's what drew me into that honestly, when I was on the capital market side, I always had a blast and ended up becoming kind of the, uh, the go-to person in terms of the really deep mechanics of the loans. At some point I probably knew maybe, uh, the most of anyone at the company about collectively how all the aspects of the loans worked like, you know, sure, yes they accrue they accrue interest, but what if, you know, it's in bankruptcy proceedings and that turns out the user that had the loan was decease and so the bankruptcy, it turns out that it's a deceased scenario, and they put a hold on the loan and so you have to retroactively stop accruing interest and you get into these third order scenarios, that was just really interesting to go through and that really quickly then turned into, okay well, you're doing this in bulk in some large-scale ledger system, so it also turns into a data products and data infrastructure thing. So yeah, I think uh, I actually don't have strong opinions on like the cultural differences of software engineering versus finance, um, and I think they're smart people uh, in each but the the work in the domain I think was a lot more satisfying to get into once you really just go all the way onto the project side into coding.

Jon - 00:09:13:

That's amazing, and it's funny, like, this is like catnip for me. I'm like, I love going super deep, like it's like, and just like scenario like running scenarios and like trying to think about and assess the risk, like that, you know, having not been classically trained just like, you know, I'm kind of fumbling around doing it but that's super fascinating hearing, how a firm being massive and I'm sure originating a ton, like these are massive data sets. These are not nominal. And so, again, kind of to set the table and maybe zoom back a little bit, for those who are unfamiliar with product management as a discipline, I know it's ubiquitous in software, in the software world. And my wife is in software. So like, I kind of hear it and it kind of like I'd soaked it up via osmosis. But like, you know, I think it would be super beneficial for listeners. Just like, what is product management from your perspective?

Nathan - 00:10:06:

Well, and I guess one quick aside before I go into that, but yeah, the data sets were very large. And I think that's also what pushed me very quickly into the now current vocation I have of data infrastructure and analytics and data science systems. Because, you know, I was a former bond trader, but I spent all my day in Jupyter Notebooks and SQL dealing with these large data sets. So that was great. And I learned to love that. And to this day, I always love any chance I get to do any sort of analysis or stuff like that. But product management was a ton of fun. And I think for me, from my perspective, there's a lot of different definitions on it. But I think the goal of it is understanding the why behind products and decisions and investments that you make for engineering and for the product direction. And mapping, both formulating the why from user needs, trying to understand, okay, people say they want X. People, or we look at what they're doing and it's revealed preference that they need X. What does that mean in terms of what you build? Because the classical sin of very motivated software engineers is that they'll just go build something. They love building. I also love building. But at the end of the day, if you aren't asking people what they need and then tying what you build to that need and proving that it actually solves that need, you're going to build the wrong thing. To this day, when I have founders come ask me, like in the early stages around what they're building, and, you know, it turns out that they're spending all their time coding. And not talking to any customers, I could say, okay, stop coding. Like, do not build anything until you have a pretty good body of customer research that says, okay, customers need this. Here's the considerations. I've done all these interviews. Like the formative ages of like a pre-seed stage startup are like no code allowed.

Jon - 00:11:50:

Yeah.

Nathan - 00:11:51:

 Just compile interviews, which is hard for people to stomach. But I think that's exactly what product management is too, is saying, you know, you have resources, you have engineers. How do you build the right thing? And what is the right thing? Well, of course you're a business, you're trying to make money, but at the end of the day, you will only make money if you're solving a problem that people care about. And so it then becomes this exercise and saying, okay, well, how do we find out what people care about? That's the hard part is to find out what is important to people and how they think about their needs. And then you can find a solution with technology on top of that. But yeah, I think it's a lot of this user interviews, market research. Discussions with people and then trying to synthesize that into taking this kind of disaggregate a bunch of interviews and synthesizing it into knowledge capital of saying, okay, you know, I talked to these seven users and collectively I determined that if people have a savings account, they need it to work in X, Y, Z ways because they can point to this and justify it. So I think that's a lot of what it is, is trying to just figure out user needs and then mapping that through the stages into, okay, this is why we're building the product and this is how we should build the product. And I think sometimes people can get pulled away from that because of practical business considerations or monetary considerations. And it is a luxury of a well-funded company to be able to focus just on user needs, but long-term you will only succeed if you're solving user needs and not trying to. Do like financial first principles thing. 

Jon - 00:13:12:

Absolutely. And it's super interesting. And there's a couple that come to mind. It's that saying where it's like, sell first before you build. And it's like that initial selling is that market research. It's like you're getting in front of the user or the potential customer. And it's like, would you actually pay money for this? And you describe it in the abstract. But something that's always really... I think fascinating. And I, you know, find kind of not a struggle, but just like something that you always have to keep in your mind is that that potential customer or potential user might not be actually telling you a need. And you have to kind of like figure out the right way to ask the question without leading the witness because they're like, oh yeah, yeah, yeah. That's like a big problem. That's a big problem. You build it. And then they're like, here you go. It's going to be X dollars, whatever, whatever the pricing is. And they're like, no way. And you're like, I thought it was a problem.

Nathan - 00:14:15: 

And they're like, not that

Jon - 00:14:16:

big of a problem. And then you're like, is it a pricing thing? Is it a, did you, is this not just a pain? Like, it's not actually painful for you. I just don't know how you suss that out. I mean, how do you suss it out?

Nathan - 00:14:28:

I think in a way that's probably where product management diverges from the market strategy and the business side a little bit. Like you said, every founder has to play a pretty big product management role. So if you've been a founder, you know what product management is, even if you don't call, that per se. I talked to a fellow founder once who said that she loves to hire as product managers, former founders, because they know it in their bones, what they have to be doing. And they've had their back against the wall. So then they really have the kind of oomph to make quick decisions and keep the scope under control too. I guess that's the other thing with product management is to try and be agile and say, okay, you're not going to build the perfect crystal structure. You just, you want small increments that can prove the user value. So I guess that's... Tied into the answer, maybe two thoughts on the dissonance between the need and the payment capability is one, ideally, and this is not always practical, but ideally, agile is a buzzword, but you can be agile enough with shipping small things or having like even just designs that people can be showed to say, okay, yeah, actually, I would pay for that. And I think that from a product management perspective, that signal of, yeah, I would pay for that that can be incorporated into the user need, gauging and strength. Of course, you know, that always may not always be possible. And also, they might not know themselves when the rubber really meets the road. You're like, okay, well, I built it, here it is, go buy it. And then they suddenly get cold feet. I think the reality is that that kind of is just the the risk of the startup in a way. So I do think the only real way to absolve that is to kind of smoothly lever your way into having a commercial relationship. So you can kind of get the earliest possible signal around what their actual willingness to pay is or their budgets. But yeah, it is kind of an unavoidable issue. And the luxury of the big companies is that they can say, okay, well, you know, if I discovered this user need, and then I did some testing, and it turned out people just in the end weren't willing to pay, you're just like, that's okay. That's a dud product management effort. But in a small startup, of course, that can be fatal. But I guess that's the essence of the product market fit, or the willingness to pay kind of risk that people take. And so there's, I guess, from my perspective, not much more that you can do than just trying to as smoothly and absolutely like ease into some sort of signal, the payment capacity side as possible.

Jon - 00:16:47:

Absolutely. And it's kind of like that perennial question, but there's also like, you know, I know no founders who do the opposite where they're, they're just like product visionaries. I don't know what it is, but they, they go in and they're like, got it. They like go into the hermit mode, monk mode and just like work. And then they just like stick the landing. That's not my style. Like I'm definitely more of like an iterative kind of like give me feedback. Um, but you know, seen it done in a couple of ways, but, um, it's, it's always impressive being Elon, you know, it just, it seems like just sticking the landings.

Nathan - 00:17:22: 

My hunch would be that there's probably some survivorship bias in that too, though. Cause I mean, that's, you can pull that off and you can still potentially win, but you know, I'm sure for everyone who does that, then there's a bunch that build something that's ultimately not getting enough traction and then just kind of fade away or pivot or something, or have to then redo it from scratch.

Jon - 00:17:40:

Absolutely. And so like, you know, you're, you're, it seems like you're getting the, you know, you're learning, an incredible amount at a firm. It sounds like the dream, honestly, like it's like a large, large data, well-resourced, you know, you're in the pocket now and you're actually like flexing both sides. You have like the finance side, the finance shops, the Wall Street relationships, but now you're actually like building and you're starting to like really dig into it. As you were starting to spend more and more time in product management, when did you know it was time to, I wanted to move into a different product, a different company? When did you decide it was time to leave a firm?

Nathan - 00:18:16:

I think for me, it was really that much more strategic life decision around saying, okay, I'm going to now abandon my career and go crazy a little bit. The direct catalysts were a, my manager who on the product side, who was amazing, ended up leaving. And the other people I worked with after were great, but it's still that kind of thing of like, okay, things are changing now. You know, I'm, I'm a little bit more liquid in terms of what I'm thinking about. And of course, COVID threw everything for a loop. So I ended up really jumping during that time. And the firm ended up IPO-ing during that time. It was perfect timing for IPO in early 2021. And so once we, once I saw that that was happening, I ended up leaving slightly before it. I saw the writing on the wall and I said, okay, you know, this is the time I'm going to make some money from this. But I think what I realized in that process also, because I have always been kind of going all the way back to the futurism that I've been interested in that drive me towards interest in things like computer science or biology. I think what I had been frustrated by throughout my life in looking at those things was how slow the progress was and how poorly a lot of those predictions were panning out. I remember, you know, I had a personal blog when I was in high school and there's all kinds of, that was like a work product for college applications. And I had all these blog posts on there with all these Ray Kurzweil, you know, exponential Moore's law things on there. And I'm like, okay, well, you know, now 15 years later. Nothing's going anywhere. Where is scientific progress? It's kind of like the Stripe founder or co-founder Patrick Collison writes a lot about this, but like the slowing of progress. And I think that's something that I actually can see all around me. And what I had also realized is I would love to fix that, but money is not the solution. You can get, I'm immersed in funding markets. You can get, and as a startup founder too, if you have a thing that you can, you find that problem, you prove you can solve it, you'll get funding. So the problem is not the money. Which is a scary thing, because what that means is the problem is the people, the problem is you, the problem is you have to go fix it yourself. Like there, it's always going to be more impactful at the end of the day to go directly, just solve the problem and build that than to try and like contribute money to people as a charitable thing. And so that's where I started realizing, all right, well, these things are slowing down. Scientific progress is slowing down. That's something I believe and would go on a diatribe about. But you can see it in things like the cost to get a new FDA-approved drug to market. It's spiking upwards further and further. And so you just have to go solve that problem or at least contribute as much as you can. And I think that's what motivated me to go into biology is this feeling of frustration around the lack of scientific progress. I also, as another aside, I also interned back in 2012 for the Machine Intelligence Research Institute. It's one of the Bay Area rationalist things that was all about AI safety. And nothing personal against them. But even then, when I was looking through it, I was like, oh, yes, I'm worried about AI safety. But this feels like there's a complete lack of understanding of how slow and how difficult it is to move machine learning forward. And then now having product managed multiple. It is extraordinarily hard work. And there's no risk of anything exploding out of nowhere that people won't be able to catch because it's such hard work. It's so incremental. And there's so many people touching these systems behind the scenes. I'm very pessimistic on machine learning and AI. And I think hopefully I get surprised. But it's the same with biology. I wouldn't say I'm pessimistic, but I would say I've come to really be very suspicious of any advances in biology, and I've come to appreciate how hard the work is. And I think that's the thing. You know, being a cheerleader for, you know, the nth, like, cancer cured and nice thing is not interesting. What's interesting is saying, okay, well, how do we actually accelerate scientific progress? And for me, what I think I'm drawn to is specifically scientists. What are they doing with their hands? One of the reasons I didn't go into science. Is because it's really cool conceptually. But then when you go look at what they're spending their time on, bench biology science is probably almost the worst ratio of really smart people to really menial work that they're doing on the lab bench, pipetting things around physically. The amount of time that they have to spend being in creative mode is so small. And that makes it really hard to be a 10x scientist compared to being a 10x programmer. Because like, okay, if you're 10x smarter than the scientists across from you, well, sure, maybe in the 5% of time that you have, you can then be 0.5x better when you multiply that out. So anyway, lots of frustration with scientific progress.

Jon - 00:22:55: 

I'll just pause right there real quick because you're talking about pipetting and founded Excedr because of that frustration of having to hand pipette. I was like, this is not like utilizing my maximum faculties here. And I was like, can we get a robotic automated liquid handler to do this? So I can actually start actually thinking critically about the assays versus just being in the hood. Oh, this is taking forever. But it's like pervasive. It's like super pervasive. So anyways, I definitely agree with that notion. So you're not alone there.

Nathan - 00:23:32:

100%. Well, yeah. And no scientist should have to bear with that. But I think because of the complexity of biology, and there's a reason why it also is that way. And ideally, people can finance it. But also for long labs, they probably just have to kind of bear with it until they're ready to get to the scale where they can actually use it and finance it to begin with. So I think yeah, it's just there's a lot of problems there. And so my solution here was to go in and start learning the space and try to just get immersed. I didn't have plans to launch into a startup necessarily. I just wanted to get into the space and see how I could help. I think later on, I realized there's no substitute for the amount of leverage you can have in doing a startup. But that's what attracted me to BenchLink as well as other places that I interviewed. And so in a lot of the... Towards the end of my time at Affirm, I spent a bunch of time building out that little plasmid editor. I think I saw, I don't remember the name off the top of my head, but there's an old plasmid viewer software out there. I think it's SnapGene. I saw SnapGene. I was like, oh, let me clone that. And then I'll like make a little API to pick from some add gene plasmids and stuff like that. So I did that. And the rest is history with Benchling.

Jon - 00:24:39:

I love hearing that the impetus was just like, there's a lot of problems that need to be solved. And there's no, it's not just a capital problem. Like I need to get my hands dirty. So that's like, that's inspirational for me because like, I totally agree that there's so much to be done. It's going to really truly take a village to do it. And each of us has a small part to play. And again, there's no easy way around it. It's like, you know, clinical trials are becoming. Just a behemoth like just you know it's kind of this like behemoth obstacle. And anyways, I totally agree. And that's kind of like what gets me fired up to every day to just like continue to play our small role in the life science community. So can you talk a little bit about joining Benchling? Like what were your responsibilities there? Kind of talk about that experience, you know, getting your hands dirty and getting into the sciences.

Nathan - 00:25:34:

Yeah. Well, and I'll just say also, I mean, as much as I realized, okay, me, you know, just throwing money at a problem isn't going to solve something, but financializing the market, the very kind of a crass way to put it, but like adding that liquidity and saying, okay, you can actually pay for your lab instruments over time. I think that's also a really cool approach to take. And that is the work is not having money necessarily. The work is setting up the whole structure and actually making it flow. And that's, that's a lot of work to dig into and that's quite important.

Outro - 00:26:05:

That's all for this episode of The Biotech Startups Podcast. We hope you enjoyed our discussion with Nathan Clark. Tune in for 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 Nathan's story. 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.