Oguzhan Atay - Part 2: From Immigrant Scientist to $140M Biotech Innovator

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 talked with Oguzhan about his upbringing in Turkey, his journey to Princeton, and the interdisciplinary approach to science that shaped his perspective. He also shared how his early experiences instilled in him resilience and a passion for education, laying the foundation for his future in molecular diagnostics. If you missed it, be sure to go back and listen to part one. In part two, Oguzhan reflects on his transition to Stanford, where his groundbreaking PhD research and interdisciplinary focus helped shape the innovative approaches that would go on to define BillionToOne. We'll also hear about his leap from academia to entrepreneurship, the many challenges of building a biotech company, and his mission to make molecular diagnostics more accessible on a global scale.

Jon - 00:01:19: Can you talk a little bit about the origin of BillionToOne? Like, it sounds like you were wrapping up your time at Stanford and you're like, I want to have maximal impact. It sounded like you're like, this is going to probably be a company. Can you talk a little bit about the origin of BillionToOne? And like, you know, when did you know it was time to actually do it officially and spread your wing from Stanford?

Oguzhan - 00:01:39: Yeah, so I think Y Combinator has played a huge role in making Billion to One possible. You know, when we were at Stanford, you know, we started thinking about this problem and we are really trying to solve, you know, the biggest problem that we can solve. And, you know, for us, it was sickle cell disease and beta thalassemias. You know, World Health Organization recognized it as one of the most important healthcare problems in the world. And we knew that, you know, if we could solve it with cell-free DNA, if we could detect these conditions. You know, in the baby, direct from a maternal blood sample, you know, there would be commercial implications of that. And we were thinking, you know, primarily initially for developing countries, because we didn't realize that this was actually a problem in the U.S., right? U.S. Being a very developed economy, we thought that, okay, you know, in the U.S., you screen the mother, you screen the father. It's not a big deal. It's not a resource-limited environment. But, you know, we actually talk with many, many physicians in, you know, developing countries, including in India. And we really realized, okay, this is a big problem that we can solve. And, you know, we also approach the problem from a physics math perspective, you know, really trying to understand, okay, what is the maximum, you know, information that we can extract from cell-free DNA? You know, how can we get to the highest signal noise? You know, if we can get to a single molecule level, you know, sensitivity and precision, what does that look like in terms of actually the sensitivity and specificity of the diagnosis for, you know, these conditions in this cell-free DNA setting? And, you know, we had essentially, I think, good technical ideas and we had some, you know, market validation that this is an important problem. And, you know, we had thought about it, you know, deeply. But, of course, you know, we didn't have, any background in business, you know, Stanford has been very good at providing a lot of courses that you can take during your PhD, you know, design school, entrepreneurship classes. So especially in my, you know, fourth and fifth year, I have been taking those, you know, courses. But we still didn't know, like, how to start that flywheel effect, right? You know, what that, you know, first thing that makes it real would be. You know, we knew about Y Combinator, of course, you know, being at Stanford, you get exposed to those. 

Jon - 00:04:16: Yeah, I'm sure.

Oguzhan - 00:04:18: So we applied and we got invited to an interview, which is already, I think, pretty amazing because, you know, it's a very selective process. And we went there and I think, you know, interview went relatively well, except that at the end, you know, they asked us the question of, you know, if we fund you, are you going to drop out from your PhDs? And we're like, well, this is science. Like, we can't just drop out from PhDs. Like, our credentials are important. And, you know, no one will take us seriously if we are dropouts. And, you know, by the way, I would get kicked out of the country.

Oguzhan - 00:04:59: This is not a good idea.

Jon - 00:05:02: Yeah.

Oguzhan - 00:05:02: And they were like, well, if you don't drop out, we are not going to fund you. They were like, okay, like, you're a little defeated.

Jon - 00:05:10: Yeah.

Oguzhan - 00:05:10: But then they called and they said, look, we have this fellowship program. And they were just like, trying up this program at that time. And we are going to give you just $20,000. And we want you to show that this actually works. You are like, okay, like, you can't even get like lab space in 20 minutes.

Jon - 00:05:28: Yeah, yeah, yeah.

Oguzhan - 00:05:29: How is this going to work? But they were like, you know, just do it. And I think one of the good things that they really forced you to do, even though they don't understand, I think, biotech, you know, as deeply, except for when one or two people there. They asked me a lot of why questions until you say that, okay, I'm going to try. Like, they would be like, you know, I can't do a clinical trial for, you know, $100,000. And they will be like, why? You know, just collect some pregnant patient blood and, you know, test them. It doesn't work that way.

Jon - 00:05:59: Yeah. Yeah.

Oguzhan - 00:06:01: They keep asking you why, like, why it doesn't work that way. You know, you're like, well, like, there are all these rules, regulations, IRB, you know, like, and they're like, well, can you do it somewhere else? Can you do it differently? You know, can you go to another country? And, we actually have done a lot of those things. But, you know, with $20,000, you know, we have been able to show that the idea has technical legs that, you know, it would likely work. We wouldn't have proven it yet. But, like, I think we have shown experimentally that, you know, we could do it. And then, you know, we have talked with a lot of physicians. You know, we actually had a much better sense of, you know, what the company could look like. And then, you know, we try to raise money. And that is when the first hurdle came, because even though Y Combinator's normal program, they create this amazing, you know, fear of missing out, you know, for investors that, you know, it is very easy to raise. It's almost too easy to raise money as a normal Y Combinator company. But that is not the case for fellowship. For fellowship, like they didn't have, you know, that help. Well, they didn't have that as much. So it was like brutally difficult to raise that first $300,000 that we were trying to raise. You know, it took six months, you know, $10,000 checks, a lot of rejections. And a significant portion of that even came from my friends who like literally gave me their life savings, which were like $20,000 for each of them. Wasn't, you know, big checks. But they, really believed in me. Even though I kept telling them that there's a 98% chance that the startup fails, because like, I didn't want to like harm my relationship. 

Jon - 00:07:50: Yeah. Yeah.

Oguzhan - 00:07:51: You know they trusted me you know they were like look you know we know that there's a 9-8% chance of an average startup fails. But we don't think that you are average, we don't think that, you know, those are the, numbers that we need to look at here. And you know they ended up giving more than a hundred thousand dollars of that round.

Jon - 00:08:10: Wow.

Oguzhan - 00:08:10: I could go to investors, and say that, we almost raised half of the round, and they would think that, oh, you know, investors are giving money to this companies.

Jon - 00:08:18: Yeah, yeah, yeah, yeah.

Oguzhan - 00:08:20: They was my friends. 

Jon - 00:08:21: It was just my friends.

Oguzhan - 00:08:24: Yeah. I didn't know, that it was just my friends. So, we were able to raise three hundred thousand dollars. It was tough, it was tough, and the thing is like, that was one of the most difficult rounds that we raised, you know, after that, you know, we actually showed that this would work we started some clinical trials, we started collaborating with baylor, um, you know, we did a clinical trial in India, we were able to get to a much stronger place. You know, we graduated which meant, that you could get into- And then, you know we were able to raise the next round, you know, two million dollars, like that was actually you know so easy, except that there is actually a story there, about that two million dollar raise as well. But you know, from there on, you know every round actually you know, became easier and easier. The last round that we raised this year was you know, challenging? Because of the macro environment, but we were still able to raise like an over-subscribed round, uh, even you know in 2024. Which is I think that you know, extremely rare for any company to raise like, an up round and over subscribed round, during this time. So, it kind of created our culture as well, early on that you know, because it was so difficult to raise that initial fundraising, that we do not waste funds like we are very focused on you know, doing more with less being essentially very careful, about you know, capital spending.

Jon - 00:09:57: That's amazing. And I have the exact same experience, like when it is your close friends, who put their life savings in your company, you're gonna watch those dollars, like, with a crazy level of attention, is you cannot let them down. And that's the same with mine like that first friends and family round five thousand dollars checks, ten thousand dollar checks, even to get them to want to put those checks in, it was like first, I had to do, I had to get the equipment myself, and show them that the thing works, and then they're like, okay, well it seems like you put everything in, they didn't put everything in there, but they're like we'll put something in. And like we'll keep going from there, and I think that level of discipline, is like that, that struggle, like that struggle in the beginning, just builds like incredibly good habits, when it comes to like like operational efficiency. And trying to get as much as you can out of every dollar that you've been given. Because I think you talked about like you know, standard companies who may go through the white the traditional Y combinator experience. There's just like checks that's being dumped on them. You don't really have to build that, like muscle, it really is like a muscle you have to actually use it, and when you don't have those constraints, you're just like, yeah. Screw it, we're gonna have the most wild holiday party, like you know, and just like and then you're like, oh man, we just spent too much money. Whereas like, you know when, your friends and family are just like, no we are relying on you to make this go the distance, you kind of think differently, um, but I guess two questions, throughout this process, how did you meet your co-founder? Was he in your lab at Stanford?

Oguzhan - 00:11:35: So we started as three co-founders, we all knew each other from Princeton, we all went through that science program. 

Jon - 00:11:44: Oh wow.

Oguzhan - 00:11:44: We actually lived together at Princeton in our final year and we all went to PhDs. And we, you know, we started brainstorming about, the you know, this problem you know, and how we can apply you know, mathematical physical principles to solve this problem. So we you know we started as three co-founders you know one of them was a very academic oriented person, brilliant scientist, but like he didn't want to do anything with, I think commercialization. So as soon as the clinical studies were completed, you know he went back to the academia. And my other and I you know, have been, uh, at the company together, you know, throughout all of these and you know, these days we have gone through so much together that, you know, if you ask me a question, and ask him a question you would almost always get the same answer. Because you know, when you have so many shared experiences, you know, you develop you know very similar ways of looking at problems.

Jon - 00:12:42: Absolutely. And I love hearing that. I love that you guys, it went all the way back to Princeton too. And I think when you have a business partner or just a partner in general, where you can get into that rhythm. And I always think about like the ability for an organization to move quickly and decisively. It's just all about this trust. If you build this culture of trust and relationships and like where everyone just trusts each other and you're not second guessing, that's where like magic happens because you can make these like decisive decisions that may be very important because speed, like speed is of essence. And when you find that magic with your co-founder or whoever it may be, amazing things happen. So you and your co-founders, you know, get through YC. And I guess, obviously you have to pitch this. Maybe let's just set the table for the listeners here. You know, when you set out to found BillionToOne , what is your guys like mission and focus? And I guess when you saw the status quo, like the industry out there, how did you guys feel like you were going to disrupt that status quo?

Oguzhan - 00:13:42: Yeah. So, I mean, this is also one of those examples where like you kind of have to not pivot too quickly, but you need to take into the data that you are seeing and take into account to make changes to the plans that you have. So, you know, we knew that sickle cell disease and beta-tolestemios were a big problem. We were able to even, you know, get Minister of Health in India, to be personally involved in the project to try to help us, right? So, we knew that, okay, we are solving an important problem. You know, people want this problem to be solved. And from a, you know, technological perspective, we knew that, you know, we were on the right track, you know, essentially trying to get down to that single molecule level sensitivity. And the problem was, you know, essentially right now finding out whether a baby, a fetus has one of these conditions requires testing the mother. And then testing the father and doing an invasive procedure, taking a sample directly from the fetus, and then, you know, testing that sample. And it's kind of a long, difficult process, especially in resource-limited environments, like in developing countries. It just, you know, it's very difficult to complete that. A lot of the times, even if you can test the mother, you know, that pregnancy, that pregnant mother might not even be going to the same clinic again. So, it's difficult to coordinate, you know, getting the father in. And if you can, doing the MNU is difficult. So, it's, you know, we know that it's a, you know, really broken system, but we didn't know that this is broken in the United States as well. So, we are thinking that, okay, like this is a big problem in developing countries, you know, very common, you know, very severe genetic conditions. You know, we can start from there and expand into, you know, other conditions and other places. What we ended up seeing was essentially twofold. One, it was very difficult to, do clinical studies in India, even with the support of some of the, you know, highest ranked healthcare professionals. And the reason was that infrastructure is not set up for that. They didn't know like what is permissible, what is not permissible, you know, what the approval process should be. And a lot of the things is set up so that something's already approved in Europe or the U.S.. And they are bringing it to the country. And for something, completely novel to be built from scratch, you know, that wasn't really something that the infrastructure was set up for. So, we have been running into so many problems and so much bureaucracy and, you know, so much paperwork. And we are trying to do the things the right way, right? Like in India, you could actually just ignore all of those things and do them.

Jon - 00:16:28: Yeah.

Oguzhan - 00:16:28: But like, we don't want to be like, you know, fly by night lab, like we want to do things the right way, but people didn't even know what that right way was. Like, it's just a very unexplored path. So, we were essentially running into all these issues, even with the support of all these influential people. And at the same time, I was listening to an OBGYN speaking on behalf of one of the competing companies in the field, you know, looking at Down syndromes. And she mentioned something like, you know, I wish this could have been expanded to single gene conditions, you know, like... Sickle cell disease and beta thalassemias. I'm like, that is what we are doing. Like, you know, and it's a webinar, right? Like, you know, I couldn't even interrupt her. You know, I was like, okay, why did she say that? Why did she make this comment? Why did this OBGYN make this comment? So, I kept emailing her, you know, after I think third or fourth attempt, she was like, okay, I'm happy to, you know, talk with you. And I asked, you know, why did you make this comment? You know, why is this a problem in the United States? And she said that, look, I'm an OBGYN in Beverly Hills. And one of my patients came back to let me know that, you know, we missed the beta thalassemia case. And this is top of mind for me. And if we missed one case that, you know, came back to me, you know, this is after the baby is born, you know, they don't get born looking beta thalassemia or like cystic fibrosis. There may be many other cases that we may be missing. And, you know, this is a problem if we could detect it with self-read DNA, it would be, you know, so much more beneficial. I was like, why is this a problem? And she was like, you know, testing the father is actually really difficult. It doesn't always happen. And, you know, if it doesn't happen in Beverly Hills, think about the rest of the country, right? So that was, I think, a kind of a light bulb moment. Like at that time, really, there wasn't any research that looked at this problem. Like after that, actually, you know, now, there is actually a lot of literature around this where it shows that, you know, more than half of the fathers do not get tested. We are missing, you know, at least 60% of affected pregnancies, even though these are very actionable conditions that are so important to detect during pregnancy. So, you know, but at that time, like, there wasn't that research. So like, after that, you know, I started speaking with other OBGYNs in the country, spent a lot of time. And we realized that this is actually one of the most broken workflows in the United States healthcare system. I think we are spending billions of dollars testing the mothers to see whether they are a carrier, but we are not really finding whether the babies are affected. It is just, you know, wasted healthcare dollars that are not actionable. So while we are recognizing how difficult it is to even do a clinical study in India, you know, we are finding that, okay, this is a really big problem in the United States as well. And then, we were able to get a U.S. clinical study started with a remarkable MD-PhD, Dr. Shihan at Baylor. You know, we sent her this, we are three, you know, people. So we sent her like this little animated video that we had created about, you know, what we are doing. And, you know, she spent all of her life, you know, trying to help babies and, you know, toddlers and adolescents deal with sickness. And, you know, she really cared about the problem and, you know, she thought that this would be a really good solution. So it was actually her, you know, not an OBGYN or an MFM who really helped us, you know, get this started. You know, she spent a lot of time with us with, you know, that initially we got an NIH grant as well, you know, to help with the study. You know, that along with the study in India became the core of our first publication and, you know, that is how we were able to launch the test essentially clinically commercially in the United States. But even then, you know, we actually realized later on as well, that if you offer a sickle cell disease and beta thalassemia test in the United States, no one will use it because it is too small of a panel. Like people want to cover at least the ACOG recommended, you know, conditions. So like okay, we need to build now a teest for ACOG recommended use, which is, you know, there are five of them. So we then had to kind of a little bit pivot and, you know, build and validate, you know, all those five before we could launch it. But kind of that tells you the story of like, it wasn't a hard pivot at any one point. It was kind of a similar problem that we were solving, but you had to pivot it based on the data that you were getting. And I think that is something that we see over and over again, you know, in the company, we are very data-driven, but not data driven in the sense that like, you know, data is showing this way, let's completely change our direction. It is a lot of like experimental approaches as well. Okay. Data is indicating that this other approach might be better. Let's do some small experiments there. Let's see, you know, what's happening there. And then if it works, you know, let's do some, you know, bigger bets. And then if that works, okay, you know, now we can, you know, spend a lot of our resources on this area. Now I think we develop a lot of these principles, you know, almost independently. But one book that actually, really speak to a lot of the things that we do at BillionToOne is James Collins, Great by Choice. I love that book, because, you know, we use the terminology from that book all the time. You know, the idea of 20 Mile March, regardless of external conditions, you have to keep growing, you know, at a steady pace. You need to figure out how to do that. The idea of bullets than cannonballs, like don't bet the company on one bet. Try small experimental bullets before you kind of put large bets into different areas. A lot of the way that we approach problems here are really, I think, explained really, really well at that book. And so it was kind of a really cool discovery for us. Like when I read that book, I'm like, oh, this is like, this is all the things that like we are trying to do here. And our leadership team is actually like required to read that book because like we use a lot of those principles, you know, every day when we are making decisions. 

Jon - 00:23:22: Spot on. And we're the same way at Excedr too. And I think it's a different practice, but early days when it was just me doing Excedr, yes, I was doing your standard sales, I was like doing door-to-door sales. I was like cold calling, doing all that. But I was like, this is not going to scale. Like there's only one of me. I can't, you know, then there's only so many waking hours in a day. And so I had to learn how to do basically Google AdWords, basically paid advertising on my own. But exactly the bullets than cannonballs, you're not going to just like dump your whole budget into like this one ad campaign. Like you have to just like start out with like test budgets, just like toggle the variables. And then like to see what comes back. And then when it starts, like you take, oh, these conversion rates are like fantastic. These ones, not so much. This one's just like a money furnace. We're going to turn this one off. And then you start backing up the truck and then you start putting more time, more resource. And, you know, I think exactly what you said, like you don't want to just like bet the farm, like immediately you kind of want to like dip your toes. What was the saying? Like a crawl, walk, run motion. Like it's far safer. Like it's far safer. And so, you know, I guess a question I have for you is like, you, it's kind of like a baptism of fire, honestly. And I'm going to imagine as you are starting to get this momentum and get this traction, you had to scale up physical operations. Like, can you talk a little bit about, because I know in the early days you didn't have like the, the state of the art lab. Can you talk a little bit about kind of each phase of like building this actual physical infrastructure?

Oguzhan - 00:25:03: Yeah, certainly. I mean, when we first started out, it wasn't even a bench space. You know, we were so conservative with respect to use of cash that, you know, we essentially were using the BioCurious space, which is like a $150 membership. And it is just enough for like BSL-1 work. So it's nowhere like, you know, Stanford labs or any other labs. You know, it was kind of like, okay, let's get, you know, a few experiments done here, because that's the only place that we can actually ship chemicals. Like we can't ship it home. And, you know, use sequencing as a service to, you know, get something sequenced, then upload it to AWS, because we don't have any of the infrastructure, you know, analyze the data. And, you know, once we had the $300,000 raise, we were like, okay, you know, now we are ready to, you know, really graduate. And we got a half a bench at Stanford, StarTex. Not one bench, half a bench.

Jon - 00:26:08: Half a bench. 

Oguzhan - 00:26:09: Yeah, being very concerned. 

Jon - 00:26:10: Yeah, yeah.

Oguzhan - 00:26:11: But like half a bench, $1,200 per month, you know, rent for half a bench. We didn't even have office space. We were hanging out in the kind of break room between experiments. 

Jon - 00:26:23: Yeah, yeah.

 Oguzhan - 00:26:24: And we then, you know, raised our, you know, $2 million, you know, seed. And then, you know, we started really scaling up. We went from, you know, half a bench to one full bench. Two benches at StarTex. You know, we had two benches. You know, we felt that, you know, we had so much space, you know, hanging two benches at StarTex. And essentially, that also, I think, changed and defined our culture of hiring. A lot of the times, you know, when you can raise funds easily, I think you end up hiring a lot of people, before you, potentially need them. Like, you feel like, oh, I'm the CEO. And I'm like, no, no, like, I'm going to do, you know, every imaginable thing that is possible, not to hire people. I mean, I think like we hired our, you know, first CFO and was the first, you know, finance person in the entire company. Like when we were 100 employees, first HR, 100 employees. I onboarded the first 100 people myself. We didn't hire HR like until 100 employees. Like you are not going to hire unless it is like an absolute need. So when we were getting to a place, you know, we have 2 million in bank, but we don't want to use it. So we really only hired our first scientist because there were too many experiments, critical experiments that we needed to run. And it was just impossible, you know, for David and me to run all of them. So we hired our first employee then. And really we, you know, started hiring more after series A, you know, once we had $15 million in the bank. And that really defined the culture in two ways. One is we actually set our cultural values very early on. And we said that, you know, we want to, you know, build a culture where essentially, even if we fail, that the people who joined us would have said that I'm glad that I joined the company. And that is a very high bar to set. That is like an almost impossibly high bar to set that even though, you know, we're not essentially, it's kind of like a dead, you know, two, three years in your resume and that like, you can go back and say that I'm glad that I joined the company. And that's only possible, you know, if you're only hiring the truly stellar, brilliant people, you are working on important problems and, you know, you have agency to work on those problems and that you feel that, you know, you are making a difference. Like, and even if, you know, it fails, you can go back and say that, you know, I learned a lot. I worked with, other brilliant people. We tried to solve a really hard, important problem. And sure, like it failed, but like, I wouldn't have changed the experience for anything else. Like that was the bar that we set. That is how we wanted to, you know, build the company. And we set our cultural values even before we hired our first employee. We were like, these are the cultural values that we have. This is what it means. That also meant that like, we wouldn't ever overhire. So, you know, Throughout all of these things, you know, we went from at the beginning of pandemic to, you know, 20 people, 30 people, the beginning of pandemic to 500 employees now, full-time employees. And, you know, throughout that period, we have never did, you know, reductions in forces, layoffs, anything of that sort. You know, it was all 20 mile march, you know, consistent growth, all of that, you know, throughout all of that period. And I think that sounds all great until you realize that, like, there is a trade-off there that, you know, we give people really large projects. There is like a lot of ownership, but that also means that everyone and every team feels that there's always too much to do, that there are not enough people. And I'm like, that is by design, like that this kind of like what the company's culture is, that allows you to have those large projects, that allows people to make a large impact. If we had, too many people, people would work on unimportant things, right? So I think that set a very high bar for hiring as well. So, I mean, we are these days very fortunate that we have like less than 1% acceptance rate, I believe, you know, we are able to attract, you know, such amazing, talented people. But we also try to make it very clear to them that expectations are high here, that this is not an easy environment. But it is also a very much, you know, you can make such a large impact type of environment where if someone comes in, it can be the fastest that they learn and fastest that they grow their, you know, throughout their careers is going to be here.

Jon - 00:31:15: That's amazing. And it's so crazy, just like listening to you kind of like describe the culture and your philosophy on company building and hiring, because I feel the exact same way. I always think about hiring, like I only make the hire when I'm I feel the pinch. Like once you feel the pinch, and they're like, okay, there is like, this is starting to get painful a little bit. I do need more hands. And it's kind of like, it's not talking about it just like slow and steady. It doesn't sound glamorous. It's like, you know, sometimes I remember during the kind of go-go like 2020, 2021, people are just like the headcount was almost like a badge of pride, like overhiring was almost like a badge of pride. And then boom, everything kind of went crazy. And then you go through this like gnarly contraction where there's just like a lot of pain that kind of like came with that kind of like not feeling the pinch, but just like hiring. Before there was a job to be done or pain to be solved. And I do this exactly what you described about onboarding the first set of employees. Like when I do screener calls, like I still do the screening calls and people are always like, what the heck? Like, like, like Jon, the CEO, like, yeah, that's me. Like, and it's because like, we're very, very, like, we know that we have to be so deliberate in these hires because every single person that joins affects like the next hire and the next hire and the culture. And it's almost like there's like a virality to it and it can go both ways. So it sounds like, you know, you've done the slow and steady, your continuous growth. Can you talk a little bit about like, you know, I don't know if this was like easy for you or hard for you, but I know you guys are CLIA and CAP certified. Was that a hard process to get through? Or was it just like smooth sailing? Like we're got it figured out. 

Oguzhan - 00:33:07: Well, initially it wasn't easy because, you know, you have so few people when you are trying to get that certification. So, you know, I remember we actually finished the validation at 2 a.m., before the day that at 9 a.m. The inspector would come. Validation like 2 a.m. at night. You know, we had to generate somewhere between 500 to 1,000 pages of documentation. And we are like 10 people. We had to do that like within like three months while building up the clinical lab, while like hiring and training people, while validating it. You know, and it was a very challenging process. I think everything that we do essentially is like at the beginning, it's challenging. And those challenges, though, I think become really great stories later on.  

Jon - 00:34:00: Yeah, absolutely. If you live to tell the tale, then, you know, it always makes you stronger. And so, you know, you got certified and accredited. And can you just talk about your guys' product lines in a little bit more detail? And did you launch both simultaneously? Was it kind of like a sequential?

Oguzhan - 00:34:16: So, I mean, it has always been part of the roadmap and the plan that, you know, we would first go into the, you know, woman's cell with the prenatal testing, and eventually we will expand into oncology. And the reason is that, you know, prenatal is a large market, you know, it is, you know, two, $3 billion market just with this product, with this test in terms of total market size in the U.S., but oncology is 10 times larger. And, you know, we realized that we wouldn't have the resources to really tackle the oncology market. And it was also the first problem that we were solving. But, you know, we went into that prenatal market, you know, that was the first product that we launched, you know, essentially detecting these recessively inherited conditions. Directly from maternal blood, you know, we expanded to other conditions to have a full package of, you know, all the conditions that are recommended by ACOG. And, you know, that business, that prenatal business is now, you know, highly profitable. It is continuing to grow at, you know, I mean, it is current year, you know, we have done $140 million. We are the second largest prenatal lab in the entire country. Fastest growing diagnostics lab in the country. It is growing, you know, 70 plus percent year over year, which is an, you know, truly unprecedented number because like no company, I think like, except for maybe like Apple, Google, like a few large companies, like companies do not grow 70 to 100% year over year after reaching 100 plus million, you know, revenue rates, you know, at that point. Hyper growth is seen as like 30 to 40% growth.

Jon - 00:36:04: Yeah.

Oguzhan - 00:36:04: And, you know, from last year to this year, we have grown more than 100% year over year and while being profitable. Like that is just, you know, there is normally a rule of 40, kind of like, you know, your profit margin plus your growth rate. If it is 40, it's like, you know, you are golden, you are one of the top companies. You know, we break that formula because, you know, we are growing, you know, close to 100% profitable prenatal business. So we are, you know, really excited about, you know, how that business is growing. But again, it was so much work, you know, getting that business to profitability was so much hard work. Every dollar of insurance payment growth and every dollar of, you know, decreasing the cost of running those tests as we scaled was so, so difficult. It was like such large projects. And, you know, the team executed essentially nearly perfectly with, you know, every single thing that they have focused on there. And it is unprecedented, like no molecular business, molecular diagnostics business line, you know, has shown up like it.

Jon - 00:37:10: It's like software.

Oguzhan - 00:37:12: Yeah. And, you know, our margins are getting to the software levels. You know, our margin is like 67% right now for our prenatal business. And, you know, we are projecting that we can get closer to 75%. So almost like software, like margins, software, like, you know, growth margins and profit margins. So we are excited about that. And that now allows us to really invest in oncology. And use those proceeds as well as the latest race that we have done to grow our oncology business. And we launched our oncology tests last year. So prenatal tests have been around for five years. Now we test almost one in 10, everyone in 10 babies in the United States. So we are a pretty large prenatal operation. And it is continuing to grow at a very rapid rate.

Jon - 00:38:06: Yeah. 

Oguzhan - 00:38:06: But, you know, oncology is in the earlier phases, but we see almost faster initial traction in oncology. And we have two products there. And we are really excited about how that can really, truly transform oncology care. And we have already changed even ACOG guidelines on the prenatal side. That happened this year. I mean, there are more guidelines to change there. But, you know, our tests are truly becoming standard of care there. And, you know, as I mentioned, these are so impactful conditions to screen for. If you detect an SMA baby during pregnancy, if they start the Zolgensma between first week of life, that baby is almost going to have the same normal milestones as a normal baby. But with an SMA, if you don't start that treatment, the baby is going to die at age two, usually. Even if you start it after newborn screening, there is irreversible damage, that already happened. So, you know, it's truly saving lives, saving babies, and it is making a huge difference. But the difference that we can make in oncology is potentially even larger. So we started with two products there. Both of them are pan cancer. So it's for all solid tumors. And both are blood tests only. So they only require a blood sample. They don't require an invasive biopsy. And one of them is for therapy selection. So. So, you know, when you are diagnosed with cancer, you know, the first question that an oncologist asks, okay, you know, what is the mutational profile? You know, why does this person have cancer? What is the driver mutation? Because there are, you know, numerous therapies that target particular mutations. So, you know, there are two ways to handle this. People try to get a tissue sample to try to, you know, analyze that tissue. But a lot of the times the sequencing analysis of that tissue. Sample can fail. But you're also just taking a part of the tumor, not all of the tumor. So it doesn't actually give you the full picture of that mutational profile. So from a blood sample, because that tissue is shedding DNA to the blood, you can actually, you know, try to find that, you know, full mutational profile by using, you know, liquid biopsies, by using your blood sample. And, you know, we haven't invented this. There are other companies in this space that have become public, that have become successful. But we have shown that compared to those companies, we are detecting 50% more actionable mutations. That means 50% more possible therapies for these patients that can change the lives, change the therapy trajectories of these stage three, four cancer patients, you know, can truly save lives. But we are also combining it with a therapy response monitoring product, something that an oncologist can use repeatedly to see. Whether that tumor burden is increasing or decreasing. You know, today they have to rely on scans and scans are so difficult to interpret. A lot of the times they are misleading. You can't do them frequently enough. And we are seeing in our data that sometimes we can detect changes in the tumor that become apparent in the scan six months later. And for a stage four cancer patient, six months is a difference between life or death. You know, we even see patients. Patients who actually stop therapies because they don't think that it is working, even though we see that actually, you know, retrospectively, there was a 90% drop in the tumor burden. You know, so there is so much that we can do on the oncology care and we are not going to cure cancer by 10% better therapies. But if we can really change and figure out, you know, what is the best therapy for this particular patient, right? Truly personalized cancer therapies. And then follow up and find out, you know, before it metastasizes, before it is too late, that is this therapy working? And then eventually, we are not there yet, but eventually move that to a stage one, two cancer, and then maybe even, you know, asymptomatic patient, you know, early cancer screening. That is how you can get to, I think, as close to curing cancer as possible. So, you know, we are really excited about the duality of our businesses as well, right? If you think about it. Prenatal is the beginning of life, you know, and everyone is born at some point and, you know, being able to test for the most severe, most important, most actionable genetic conditions, you know, at the beginning of life is so important. But it is, you know, as important to also be able to solve one of the most important problems that we face as you get to the, you know, closer to the end of life, you know, which is cancer, which impacts, you know, I think approximately one in two people who are alive today will get cancer in their lifetime. So that- It really impacts all of us, you know, both of these problems. And I think, you know, we have the technology to be able to really tackle two of the most important problems in healthcare today and really change the standard of care for both of these areas.

Jon - 00:43:25: Freaking awesome. That's freaking awesome. And I think about the early discipline of billion to one that you kind of like. Instilled and woven to the DNA of the company. Is paying dividends now, right? You're like the prenatal business. And having such a one high quality product and making sure that you're doing this as efficiently as possible. And as you get to scale, you're continuing to reap the efficiencies, which then allows you to tackle even another problem, another subset. And you talked about when you were first getting into Y Combinator, not having the idea of a flywheel. But this is the flywheel. As you start getting these scale economies, and I'm not saying every business has the opportunity to drive these flywheels because it depends on whatever your business model is. But I love seeing it where you can grow very quickly. Profits and growth don't have to be at odds necessarily. They can be synergistic. And also, sometimes, I think when you talk about companies that are profitable, sometimes it's like, oh, but they're not doing new things. They're just here to generate profits. No, no, no. Those profits can then get redeployed. Into other problems and other products that are problems worth solving and products that you can continue. Like hearing your, how you describe your oncology approach is like really exciting for me to hear, because I've like, I think exactly you're right. Like this is not me poo pooing on therapeutics as like a business model or anything, but like first and foremost, you need to diagnose, like diagnosis is first and it's critically important. So I always get fired up when I hear about these new novel ways to do the screen, get it early. So you can have better outcomes and actually apply the therapeutic in the best way possible. When you like, when you stand a fighting chance versus, you know, we can have like, you know, fantastic therapeutics, but if you can't diagnose it properly or early enough. It's kind of moot. So, you know, I love hearing that. And as you are looking one year, two years out, what's in store for BillionToOne and what's in store for you?

Oguzhan - 00:45:51: Well, we think that, you know, within a year, we are going to become a public company because we think all the right milestones are in place, right? Both of these businesses are actually going to be, you know, strong businesses, you know, each of which actually could go public almost separately, but they are together. And, you know, we have a lot of clinical studies around the response side because we believe that it is really going to be the future, but it is going to take a lot of clinical studies to really establish that as the next generation way of thinking about response monitoring. So as we get to those, you know, clinical study readouts and, you know, profitability metrics and the scale of both of those businesses become established, you know, we want to become a public company. You know, we want to be a public company. We also have been essentially executing on this 20 Mile March and, you know, setting goals and achieving them, you know, for the past three years, almost like a public company with that rigor, with that, you know, mentality that I think it is the right time for us. But we see that as an, you know, intermediate milestone in many ways. We want to become a generational company. You know, we want to solve some of these largest problems that we can solve. You know, we want to become a category defining company. And for me, the definition of that, the staying power of that is, I think, best summarized with, you know, S&P 500. So, you know, one thing that we say as a goal is that we want to become the first molecular diagnostics lab to become an S&P 500 company. Because, you know, if you're an S&P 500 company, you are not going to go away in five years or 10 years. You know, you are going to have staying power because that shows that you have the scale and the profitability and that you have solved really large, important problems. From the perspective of, and if you mentioned the scale, the growth and the profitability, I completely agree. If you have the right differentiation factors, in many ways, being a very highly profitable company allows you to invest in other areas. And the other thing that you said, the importance of diagnostics, actually, there was a study that looked at what percentage of healthcare outcomes are due to diagnostics. It is close to 70%. And think about diagnostics. Diagnostics is such a small part of healthcare. You have all the hospital systems, clinics, insurance, you have therapeutics. I think diagnostics gets maybe less than 5% of healthcare dollars. And it is like close to 70% of the outcomes are attributable to diagnostics. It is such a high leverage, impactful area. And I think we are really going through a change in healthcare where diagnostics is becoming differentiated too. It was always the case that diagnostics is very important in determining healthcare outcomes. But the problem was that I think in the past, a lot of the times diagnostics have become commoditized. Even if one company was doing something important. And five other companies could do something very similar. And that created essentially a lot of competition. And it made it difficult for companies to essentially become profitable and then invest that profitability into new product lines and build really large, impactful companies. But that is changing, especially with cell-free DNA testing and personalized medicine and the problems that we are looking at. These are difficult problems. And you need to have that technology differentiation to be able to solve them. And because these are difficult problems where you can't just build a me too, product in a year or two, it allows you to essentially reap the benefits of the investments that you have made. And then that allows you to essentially stay innovative and build even more powerful and impactful diagnostics. So I think we are going to see a change where diagnostics becomes more and more important, not just in terms of determining healthcare outcomes. In terms of innovation, in terms of how it is changing healthcare. And I think we are also going to see larger and larger companies that can be built on diagnostics. If you think about that, you know, oncology market that we talked about, you know, you can build not just a, you know, a successful diagnostics company, you can build one of the largest companies in the United States period, not even healthcare, United States, based on the size of that market and how, you know, you can really make a large impact in oncology care.

Jon - 00:50:45: Yeah, that's amazing. And like, I have, I guess, a soft spot for diagnostics as like an industry. And I saw it firsthand. Our first client was a subsidiary of Quest. You can imagine like the amount of like testing that they had to do. So that was like my first foray. And like there was like one of our first, like for me, pivotal experiences in this learning. Despite all the like the amazing work that was being done in this lab, it's just like diagnostics for a long time. I felt like didn't get like the spotlight that it deserves, in my opinion. I'm speaking for John now. It didn't.

Oguzhan - 00:51:20: I think it's certainly true that it didn't. And I think it kind of changed during COVID-19 where people were like, diagnostics is so important.

Jon - 00:51:28: Yeah, yeah, yeah.

Oguzhan - 00:51:29: And then like more recently, you know, a lot of people forget about that experience again.

Jon - 00:51:34: I know. It's so puzzling. It's so puzzling. I'm just like, guys, it's like, it's not rocket science that you need to figure out if you're sick before you can treat the sickness like that. And, you know, and I think you're absolutely right. Like during COVID, it's kind of like reminded everyone how critically mission critical it is for everyone downstream. But I love to hear your perspective on this because, you know, obviously you're at the forefront of it and you're you're seeing the everything kind of the diagnostics industry unfold. So, you know, I'm super pumped for a billion to one. I'm super pumped for you. It's like, you know, what a journey, like all the way from just like having to piece together. Like. Ten thousand dollar checks from friends and it's like, yeah, we've got one hundred thousand dollars. Like we're like and then from there, snowballing it and just like continuing to keep that discipline and just like one having that North Star of, you know, discipline and just like thinking about the patients and making sure everyone that joins the is along for the ride has, you know, that alignment is is amazing to see. And, you know, you've been frankly so generous with your time and I can go hours and hours and hours with you. But in a traditional closing fashion for the podcast, we have two questions. The first is, would you like to give any shout outs to anyone who supported you along the way?

Oguzhan - 00:52:53: Yes, I would like to do so. So this is maybe a little bit of a story as well. But at the time that we were starting BillionToOne , this is right after graduation. And, you know, I was able to raise that $300,000, you know, and I was very excited, you know, about it. But being a first generation immigrant, it was a little bit tricky. And when I talk with my immigration lawyer, you know, he told me that, look, if you stay at Stanford, you have a very good academic career. You know, you are not a danger. You know, we'll get you a green card. You know, it's going to take two, three years, but, you know, it's going to happen. But if you start the company, you know, I can't guarantee you anything because, you know, you are not a well-established entrepreneur. You know, you did raise this $300,000 and you do have like sort of Y Combinator, but, you know, there is no guarantee that you are going to get a green card and be able to stay in the country. And, you know, at that time, because, you know, I didn't want to use companies' funds much, you know, I had taken out, you know, 12 credit cards, all 0% APR. And, you know, my spouse has been super supportive during that period as well. You know, also Stanford PhD, also first generation immigrant, you know, kind of know what it takes to build something. And, you know, the adversity that we have to go through. But, you know, we said, okay, we are going to take that risk. And, you know, when that was happening, President Trump was elected and immigration became a much bigger problem as well. So when I first applied to get my green card, actually, I was not accepted. And I was going to get deported essentially from the country if we couldn't resolve it. So I, you know, I asked my PIs from Stanford and Princeton, you know, Jan Skotheim, Daniel Fisher, Jacques Fresco, and they have been just, you know, incredible at using their network. You know, I've received support letters that I submitted to USCIS from like head of National Academy of Sciences, former president, you know, also a student of Jacques Fresco.

Jon - 00:55:16: Oh, wow.

Oguzhan - 00:55:17:  I've received support letters from Nobel laureates attesting to the importance of my work and the work that we will be doing at BillionToOne. Like extremely generous with their time, with their support. And we were really only, I think, able to change the decision there because, you know, I was able to submit, you know, this overwhelming number of support letters that really spoke to the importance of the work that, you know, I was doing at BillionToOne. And, you know, we wouldn't be here, you know, without their, you know, unconditional support. They didn't say that, you know, oh, you are not in academia. They said that, you know, we are going to support you. So I think I want to give a shout out to, you know, all those people because, you know, their support was incredible. And, of course, you know, to my spouse as well, because not everyone would support you to take 12 credit cards at zero percent. Especially, you know, with the risk that we are also taking on the immigration. While, you know, the alternative is to take a, you know, really nice cushy job as a data scientist at Netflix. Or, you know, or at a hedge fund. Like those are the options that I had that, like, I didn't take. So, you know, I think, you know, that is really, I think, you know, what made all of this possible. So I really want to acknowledge, you know, what they have done for me.

Jon - 00:56:50: What a story. That is crazy. And it was like on a knife's edge, it sounds like. That like truly on a knife's edge.

Oguzhan - 00:56:56: It was like, you know, every day I would wake up and I would check the website about, you know, whether I am, like, this is fully rejected and I'm going to get deported or whether I can stay in the country. And I like I have 12 credit cards as well that I have to pay somehow. And, you know, again, even though it has been, you know, now seven years, this is a story that I still find emotional to tell because it was like such a difficult time. Their support has been just, you know, incredible. And the way that like they described the work was like so incredibly supportive that it wasn't like they would say like a Nobel laureate would say that this work, is more important than my work.

Jon - 00:57:48: One, I'm blown away. But something that I just think about this is like how important it is for your support network in all things that you do. Like no one can do it alone. And hearing the kind of this outpouring of support is truly beautiful. And also shouts out your spouse. Just like, I was on, God damn it. What are we getting into right now? But obviously it worked out. But I love hearing that because I truly think no one can do it alone. And also there's like these moments where that's a major inflection point. We talked about like the road, right? Like when the road splits and getting through it and just like with the support of your colleagues is just truly a beautiful act. Um, and the last closing question, if you can give any advice to your 21 year old self, what would it be?

Oguzhan - 00:58:45: I think it would be kind of keeping an open mind. I think... Because I knew that I would do molecular biology when I was 10 years old, I always had very much of a driven personality and this is the path that I am on. I wouldn't have guessed that I would be here where I am when I was 21 years old. And I'm glad that I was able to keep an open mind eventually. But I think it is important to have that mentality as early as possible. And I think I was a little bit lucky. All these things that I have done for the sake of knowledge, taking all these difficult, challenging courses, really broadening my education, ended up really being helpful. But it wasn't planned. If I were a 21-year-old, I would have done those things for, for those reasons, but also for the reasons that it actually really helps you in life to keep an open mind. And I think being able to have that open mind was really important. I think the other thing is, I think what you said that, you know, that support network is so important and that you are not alone. You know, even though the things that you are doing, you know, can be challenging when you reach out to people, they are amazing at, you know, what they can help you with. And I think, you know, I used to not feel that, like I used to not think that like I can reach out to someone for help. And it was really kind of an existential crisis that made me say that, look, you know, I have this really big problem. Can you please help me?

Jon - 01:00:32: Absolutely. And I, I think for anyone out there listening, it's like. It's okay to ask for help. Like it's totally okay. Um, we thought I would do the same. I would just try to like white knuckle it and like grit my teeth and just like get through it. But, um, I probably would have saved myself a lot of pain if I maybe asked for a little for help a little bit earlier on and like swallow that pride, um, and not think that you have to take it alone. But that's like incredible advice. You know, every time I ask that question, I'm like, damn, like I truly needed to hear that when I was 21. I truly, every time, every time, like I know probably the listeners out there is like, Todd. I say that, but like, do you mean it? I'm like, I do mean it. Like, it would have been incredibly valuable. But again, I had such a blast. Thank you for taking the time and telling the BillionToOne story and your story as well. You've been super generous. And maybe next time, you know, if you're going to be at JPM, I'm going to assume you're going to be at JPM. We can grab coffee, grab a meal, a bite. I'd love to, you know, chat some more in real life. But thanks again. And, you know, I had a blast.

Oguzhan - 01:01:37: Thank you for having me. I really had a great time as well. And, you know, a lot of these stories, you know, I've told them internally, but I think it is the first time that I'm telling, you know, anyone outside of the company.

Jon - 01:01:49: Thank you. I'm really flattered. Like, honestly, I'm really flattered that you were willing to share these stories. And I'm sure the listeners are going to be excited to hear your experience and learn vicariously. So thanks again. Thank you.

Outro - 01:02:02: That's all for this episode of The Biotech Startups podcast. We hope you enjoyed part two of our conversation with Oguzhan Atay. If you did, consider subscribing, leaving us a review and sharing it with your friends. Be sure to tune in for our next series featuring Kate Yen, founder and CEO of Auron Therapeutics. Auron Therapeutics is using cutting edge science to develop next generation therapies. Targeting the dysregulated cell states of cancer. By combining a proprietary database of single cell genomic data with an AI powered computational platform, Auron compares healthy cell development to cancer cell development. And maps out the drivers of tumorogenesis. Kate has a PhD in biological chemistry from UCLA, where she also completed her postdoctoral fellowship. Before founding Auron, Kate held positions at Merck and UCLA. She also held senior roles at Agios Pharmaceuticals, where she led the IDH translational research team responsible for the preclinical and clinical development of two FDA-approved IDH mutant inhibitors. She also co-led the discovery of Vorasidenib, a promising glioma therapy currently in clinical development. With Kate's extensive preclinical and clinical expertise, a proven track record of bringing innovative therapies to market, and a passion for tackling complex oncology challenges, her journey and insights are not to be missed. 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.