Intro - 00:00:08: 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 James Evans about his childhood and the lessons he drew from it, his Belgian lab experience, and his move to the US to pursue his passion for imaging research. If you missed it, be sure to go back and give it a listen. Today we're excited to continue our conversation, diving into James's time at MIT's Whitehead Institute, finding the quickest way to the most effective data, his path to entrepreneurship with PhenoVista, and the culture shock of leaving academia for the private sector. So sit back, relax, and let's get started.
Jon Chee - 00:01:04: After your time at MIT and working in Paul's lab and getting all this experience, did you just wake up one day and you chose entrepreneurship and decided to leave this gig? Like, you know, that gig sounds awesome. I would imagine something kind of lit a fire. What did that for you?
James Evans - 00:01:20: Yeah, well, so Paul made the decision to move to Singapore. There was a lot of collaboration that was great to be a part of between MIT and Singapore the last few years that I was at MIT. Yeah. So Paul had the opportunity to move to Singapore and head up the biology department there and I kind of helped with the transition. But I'd already kind of made my move from the UK to the US and frankly speaking, Singapore is extremely humid and my hair gets really, really, really frizzy. I couldn't afford the hair gel that I would need to survive there. So I thought honestly, like it was time for me to go out on my own.
I had, you know, a great opportunity working with Paul and like I said, a really prestigious, incredible environment for 10 years. Looked around and saw other people who had stayed in that environment. I was like, I can either choose and just stay in this environment for the rest of my career or go out on my own. And I decided to go out on my own. And dude, it was hard. Like I remember just walking the streets, like literally walking the streets thinking how am I going to pay rent? And just trying to get little gigs with this company and that company.
And then a friend of mine introduced me to a, through a VC-funded biotech company who is looking for help with high content that became like half my paycheck a month. And I ended up working for them for a couple of years and helping them kind of get high content up and running and helping them interpret the data and that was really good. Because it helped me pay my rent, but also it helped for sort of as an education to sort of how science is done in that environment. And I worked alongside a lot of scientists there.
And then there was a particular kind of senior guy who I used to work with, who ran the group. And he was like, you know, industry veteran. And he was, in the best way possible, a total bastard. You know, you would present data and he would be like, just tearing it apart. And you'd be like, I hate you. But it would make you, like, have to make it ironclad because you get into this and then like, you know, the next time you'd be okay, well, how is this guy going to, like, take it apart? So you start, you know, defending your data, making it impenetrable to criticism. And, you know, it's just great. It just makes you stronger.
And again, that's another thing that translates now is that it's like we're presenting data to a client. You're like, well, what's the client going to say about this? They're going to have questions about this weird trend there, you know, and so like, let's explain it. If we can't, then we can't. But like, put yourself in that position and stuff. That was great.
For a time there, I lived in Manhattan. I had a client down in Manhattan one day a week. And then I would drive up to Boston and there was always a Tuesday morning meeting at 9:00 a.m. and so I'd have to leave Manhattan at like 5:00 or 6:00 a.m. to drive up. So by the time I got to this like 9:00 a.m. meeting to review data with this very particular director, yeah, you know, I'd be like sleep-deprived and grouchy from driving. So I was just like fired up and ready for a fight. So it was always pretty funny.
Jon Chee - 00:04:05: The baptism of fire, it sounds like.
James Evans - 00:04:07: Yeah, yeah, great. I mean, it is good. And I made lots of friends that I've kept in touch with over the years. And then, yeah, I was working for a bunch of different companies. One of my clients was based here in San Diego and had just been awarded a contract with the EPA to do this tox gas screening. I needed somebody to build up that capability and execute on that contract. And so kind of within a week I had moved to San Diego.
And I like surfing. I've been surfing for 20 years or something now mostly, you know, started surfing on the East Coast and going out to Puerto Rico in the winter and doing that with friends at MIT. And so I used to come out to San Diego whenever I could. So it was a good opportunity and yeah, I moved out here and worked on that contract, built up a team and it was again really good experience.
And that's where I met Tony who was the co-founder of PhenoVista. He was in my group and we saw an opportunity to start our own company kind of with our own kind of rules and sort of focus and everything and yeah, so Tony and I started PhenoVista end of 2014. It was just the two of us, you know, both of our significant others had proper jobs so they agreed to kind of let us go back to sort of postdoc level earning and try and write some grants and see if we can get some momentum going. And I built the first website. We signed a lease in like October, November. We moved in the end of November. We had no clients.
Jon Chee - 00:05:27: Clients.
James Evans - 00:05:28: We had been talking to a couple of people but we had no paying clients at that point. And we just had like kind of a runway and we're like, okay, we're going to pay ourselves, you know, X per month. We got our rent to cover. We have like a year of runway maybe. And then we started making money in January. When I say making money, we were making like a couple thousand dollars, you know, it was like enough to cover our rent maybe. But you know, by March, by like the springtime we were cash flow positive. We were paying ourselves and paying the rent and gathering the momentum. We didn't have time to write grants, we had paying customers.
And then we ended up hiring our first full-time employee within a year. So October 2015 we hired Erica Martin who is still with PhenoVista. Thankfully she's our number one employee. She's our senior director of lab operations. So she was a high school intern at the imaging core facility at the Whitehead. So she had gone through from ground-up microscopy training and she's just been a huge part of the culture of PhenoVista and trains and manages. I mean she does so much.
And yeah, so for about two years, it was Tony, me and Erica and one of the funniest things was just like, when it was Tony and me. We had this, you know, shared office and I would do the music and I would do all the business development, marketing, he would do all the lab work. It wasn't even Spotify because I wasn't aware, with like Pandora or whatever was on, and we'd have like bands that we both hated. So whenever one of these bands would come on we'd add it to the post-it note on the back of the door and we'd be like, no-fly list. This cannot come on. If we get without that.
And we had this, like, tissue culture room in the back of the lab because we had, like, this basement and found these hoods that we thought, oh, there's no way these are going to work. They're going to need, like, maintenance and stuff. But we got them for, like, 500 bucks each and they worked. But we had three of them crammed in this, like, little closet. And so in the summer, it was super hot in there. So Tony's going in there doing tissue culture, and he's like, stripping off the light, you know. You know, he's not work appropriate.
Jon Chee - 00:07:19: Yeah, yeah.
James Evans - 00:07:21: But, yeah, that's what you can do. Other than he would just come out, like, dripping in sweat. Oh, my God, he's gross. So then when we got Erica, that was our first kind of like, okay, well, we're going to have to get a little bit more professional. But still, you know, it was still pretty friendly.
But you know, what was really crazy just from an organizational perspective was miscommunication. Because when it was Tony and me, there was one line of communication. If you're not doing it, the other guy's doing it. You know, there's nowhere to hide. When there's three of you, you suddenly go from one line of communication to three lines of communication, and the rate of error is way higher. And we would drop balls and we would get mad at each other and there could be tears and gnashing of teeth.
And so that was really the start of like, okay, we need to put together a system. We need to have, like, process development. And we used to have these big whiteboards of truth. We'd have, like, the two massive whiteboards with, like, all the projects that were going on and what's happening each day. And that was really the start of what we developed at PhenoVista, which is a lot of internal processes to make sure we don't screw up and we don't make a mistake in terms of the details or, you know, forget to do something or completely forget about a project which back in the day happened. I remember going to Tony, hey, how's that project going? Like, he's like, what project? And we're like, it's supposed to be, you know. Yeah, yeah, yeah, yeah, yeah. So it's definitely a multifaceted problem running a scientific business, for sure.
Jon Chee - 00:08:39: Totally. And I have so many directions I kind of want to go with and pull on the string. So, like, I'm thinking about this chronologically. You know, you're at MIT, which is academic, has one type of lab, work environment and processes there. And then you go into a venture-backed company for profit which has a bunch of different processes. There's clearly with one of the managers who has his own process.
James Evans - 00:08:59: Yeah.
Jon Chee - 00:08:59: And then you go from Boston, then you go to Manhattan and then you go to San Diego and then you end up starting your own business and fulfilling the grant. Moving from academia to this venture-backed startup, obviously defending your work was one aspect. What were some other hard lessons learned or like key takeaways when you made that transition?
James Evans - 00:09:19: So I was working alongside a lot of really talented scientists and this VC-backed company would obviously have changes in direction or priorities or funding or whatever, but you would just see some restructuring that went on and it just seems so unfair having not been used to it. Right. Because you're like, but these scientists are really good and they work really hard and you're just canning them all.
And now fast forward you just realize like, it's not about how hard you're working, we just have a change in priorities. And sure enough, these people went and got jobs elsewhere pretty quickly. It's traumatic, but it was kind of like, oh wow, this is different, you know, because in academia that just really doesn't happen. People are only let go if they did something really terrible or really bad. So yeah, but this is much more based on the company's need for talent and sort of changing that to the changing needs. That was probably the biggest cultural or sort of organizational difference that happened for me.
Jon Chee - 00:10:17: Absolutely. And I had a similar experience too. It's kind of just like a shock to the system coming from academia and then going into kind of private sector. Obviously there's like a weather difference and you know, San Diego surf is great. When you went to the West Coast, what was your experience moving from East Coast to West Coast and working on a lab on the West Coast? What was that like?
James Evans - 00:10:35: It's funny, I mean, I think there is that stereotype of West Coast folks tend to be maybe a bit more upbeat and sort of positive. And I guess it's hard because there is a lot of fluidity and a lot of people move back and forth and everything. But for work now, I travel back to Boston pretty frequently to meet with clients and I should say all our clients are lovely. But there is a sort of a hard edge. And I think California tends to be a little bit more sort of like, let's look at the cup half full a little bit more in general.
But I think even within PhenoVista I'm really proud of how diverse our company is both sort of culturally but also in terms of the type of people and their personalities. So you know, we don't have just a bunch of people thinking the same way. You know, you definitely have people with different perspectives and I think that's really important. And then I think I can see that being important across the industry too with companies having East Coast, West Coast sites and so on.
But definitely it's a lot easier to kind of balance, you know, doing 10 years in Boston and then having spent 10 years in California since then. I'm older and I got family now in California. I didn't have that back when I was a postdoc. It was all just about the lab grind. So you know, that worked out well for me because I could really sort of pour myself into lab life during my sort of 20s and 30s. And then so now, although still work long hours, it's a lot easier to kind of immediately switch from work mode to spending time with the family, run down to the beach after work or something. It's a lot more doable.
Jon Chee - 00:12:04: Yeah, I completely agree. My wife is from Southern California and we actually just came back from a trip. Can't say I'm a surfer but I can appreciate beaches. And something that really resonated with me that you mentioned earlier is your wife and helping with, you know, the original grant writing and having the real job. And Chloe, my wife, has had a similar impact for us in Excedr and just how important it is to have someone who is supportive of it because I don't think it would be, at least for Excedr, be possible if Chloe wasn't there. Especially in the early days when you know, like exactly. We said like before you have a client, it's so difficult.
James Evans - 00:12:38: Yeah, it sounds a bit cliché but I wouldn't have started PhenoVista if it wasn't for my wife. Like she's the one who believed in me and gave me the support and then I get a lot of free advice from things she brings home from her day-to-day day job. So that's been really helpful from sort of an organizational perspective too.
But yeah, I mean running a business is incredibly hard. I mean it's the hardest thing. I mean it's like grad school hard. You know we were talking earlier on about like solving problems. You solve a problem and then the problem evolves and you got to solve it again. It's a little bit more like for me having small kids like you do sleep training and you're like, oh yeah, kids are sleep trained, done and done. Then they grow out of it and you got to do it again and then it's the next thing.
It's a lot like a business in terms of the problems you solved when your company was six or eight or 10 people. Those don't work when your company's 25 people. And you know, I haven't got to 50 plus, 300 plus, but I can only imagine like for me the biggest problems are the science and the imaging, the computational aspects, all those things. You know, that's my wheelhouse. Like, and we have lots of scientists who can kind of tackle those. They're not easy, but we have the skill set.
The tricky things are where we work with people like yourself is getting access to capital to get the instrumentation. We need to like managing HR and benefits and stock options and like, you know, dealing with their HR issues and you know, this kind of stuff. That's horrendous. Yeah, yeah, yeah. Having support for that. Yeah, yeah.
Jon Chee - 00:14:01: Again, it's kind of like no one tells you about all of these things beforehand before you decide to embark on it.
James Evans - 00:14:07: But you wouldn't listen if they did. I mean like, because you wouldn't know. This is the classic is like if the science is good, everything else will be fine. Yeah, kind of. I mean the science does need to be good, but it's probably 10 or 20% of the problem. Like science does have to be absolutely good. So does the accounting, so does the marketing. So do all these other things which you never even thought about, you know, until you start doing it. Insurance, you know, crap like that. It's.
Jon Chee - 00:14:33: Yeah, that's exactly the same feeling I felt too. And I still continue to feel and I guess, you know, the problem solving what you're describing is exactly how I feel about it too. It's like multivariable and the thing mutates and I was playing the new Zelda with my wife and there's a lot of like these temples and shrines where you go in. It's a problem that yes, there are variables, but there's not a growing amount of variables. You can solve this thing and then move on. But with business there's emotions involved, you know, time pressure. Yeah, time pressure. And when you're trying to focus on the science and then you have to learn, like you said, insurance. It's like these feel like very disparate things. So I completely, you know, I'm getting like PTSD thinking about it.
James Evans - 00:15:13: Yeah, yeah, yeah, yeah.
Jon Chee - 00:15:14: When you were just starting PhenoVista. I'm kind of like zooming out. What was the big driving force for you and your co-founder? Was it an instance where you saw a huge underserved market where you thought, we can be the ones to fill this need? Or was it something where it's like, well, the current options are subpar and we can do it better? And I don't want to put words into your mouth, but what were you thinking when founding PhenoVista?
James Evans - 00:15:38: It was kind of a combination of those things, to be honest. I mean, I think the big thing, looking back on it now and having some perspective on it, this is almost 10 years ago now. iPS-derived technology was still relatively new and we were using iPS-derived neurons back when we were doing this work for the EPA. And Fujifilm was really the only provider of those cells at the time, but people in biotech and pharma were kind of jury was still out on sort of whether these were good model systems.
And so when Tony and I started PhenoVista, we were like, oh, okay, well, Tony's really got great hands in the lab and he can make cells jump through hoops. So when we first started, we were doing a lot of bake-offs between human iPS-derived neurons and rat primary cultures and things like that. People were really wanting to kind of see how the data stacked up and we don't do that anymore. Like, people are like, okay, yeah, iPS all the way. You know, let's do co-cultures with astrocytes, let's do tri-cultures with microglia, let's put in some disease phenotypes, let's do it in 3D and make it funny. People are like way more pushing the envelope now.
And so the marketing speak was to democratize access to phenotypic screening. And yeah, it worked out to be pretty good timing. We started off with neurons and you know, working with Fujifilm and we looked for other providers and there are more providers now that are available, but Fujifilm has a really good quality product. And so we definitely still work a lot with Fujifilm.
Jon Chee - 00:16:59: Awesome. And when you and Tony were just starting, like when you were conceptualizing the business model, were you drawing upon a lot of like your core facility grad school experience in Vala and then like kind of modifying and doing it the PhenoVista way.
James Evans - 00:17:12: I mean, honestly, like, it's kind of a funny joke, that business model, like and you know, business plan. We never wrote one, just kind of did. It just kind of like mapped out like, okay, look, this is what we're going to pay ourselves. This is the rent, this is how much time we've got to like earn X, Y and Z. And we had to be really opportunistic. So we didn't know whether this was going to work and weren't in a position to turn down any work. So we took any job for any money we could in the first, you know, six months for like, we'll do whatever.
And I think that's the difference between being bootstrapped, you know, versus sort of venture-backed or something like that where you kind of have a mission and you stick to it. Whereas like bootstrapped you kind of like let's see where this takes us and go with, you know. And so yeah, what we ended up with five years after that is a business model that's like forged in the real world. Right. Like it's market validated. Like, you know, people, people ask us, so you cash flow positive, you're like, yeah, because if we're not, we're not in business, like, you know, that's, you gotta be. So like that's how we ran the business. Very sort of capital efficient. Yeah.
Jon Chee - 00:18:15: And what compelled you to build in the bootstrap kind of path versus your previous role? Had a venture-backed experience. Was there a kind of impetus or kind of a choice, a cognizant choice that you made?
James Evans - 00:18:26: Well, you see, the companies I worked at previously that had venture backing, I wasn't involved in any of that fundraising, right. So I had no skill set or network. So it was really necessity. I was like, well you're going to do it the old-fashioned way. And because that's all I know and I didn't have like a year to go out and raise money and I didn't have a track record. I mean, maybe I did, but I didn't feel that I could go and like kind of do a roadshow and raise.
And to be honest, like a lot of companies had previously tried to do high content screening or affiliate services and not been able to make it work. So it would be a hard sell. So, you know, it was really just sort of set the bar really low in terms of like, okay, what are we going to try and do? And just build on it. And that's what we did. We just managed to sort of get cash flow positive in the first year, hire some people and then just grow organically, get some business development help in Boston after a couple years and yeah, and that started to really sort of grow our revenue and then took on some outside investment in the last couple of years and helped us scaling the growth.
And that's kind of where we're at right now is really keep the growth accelerating and start working on things that we never even thought of, really. I mean, I guess we did that. We were thinking about, you know, margins and EBITDA, all these kind of things, and getting a lot of the support that we never had in the first few years, you know, like having financial professionals full time on the staff to work on cost accounting and forecast and things like that. So it's almost like a real company.
Outro - 00:19:55: That's all for today's episode of The Biotech Startups Podcast. We hope you enjoyed our insightful conversation with James Evans covering his experience at the Whitehead Institute, his move to San Diego, his rollercoaster journey towards entrepreneurship, and the joy of building a culture at PhenoVista that respects work-life balance. To learn more about James's journey, be sure to tune in to our next episode. 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 James's journey, where we will cover his take on solving the growing pains of a startup, what it is like working as a bootstrapped company, and the differences between working with small companies and large corporations. 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.
