Latest / Lab to Market Leadership with Chris Reichhelm / The Most Undervalued Skill in Deep Tech - Management | Chris Perkins PhD

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The Most Undervalued Skill in Deep Tech - Management | Chris Perkins PhD · Lab to Market Leadership with Chris Reichhelm

• 0:00
  Chris Perkins: That's one of the core lessons.
• 0:02
  Chris Perkins: that I think I've learned over the years is how important, um, good management is, not just senior management, but middle management as well.
• 0:12
  Chris Perkins: And I think that's something that when you look going lab to market, a lot of technical people really undervalue how important people are, who are really good at hearing people, you know, organizing people, but aren't necessarily going to be people that are your mathematical or your physical superstars, you know, and we tend to undervalue people who are just middle managers.
• 0:38
  Chris Perkins: But in reality, that skill set, and it is a skill set that has to be trained.
• 0:43
  Chris Perkins: Of understanding, you know, how to communicate with, you know, people, you know, how, how to get them to set goals and understand how those goals link to the larger goals of the organization, how to make sure they have what they need and speak up through what they need and to take ownership of what they're doing.
• 0:59
  Chris Perkins: Man, finding good, strong, you know, management early on, uh, is the, is really a key to success in scaling a company from your first five people to 40 or 50 people.
• 1:13
  Chris Reichhelm: Welcome to the Lab to Market Leadership podcast.
• 1:16
  Chris Reichhelm: Too many advanced science and engineering companies fail to deliver their innovations from the lab to the market.
• 1:23
  Chris Reichhelm: We're on a mission to change that.
• 1:25
  Chris Reichhelm: My name is Chris Reichhelm, and I'm the founder and CEO of Deep Tech Leaders.
• 1:30
  Chris Reichhelm: Each week we speak with With some of the world's leading entrepreneurs, investors, corporates, and policy makers about what it takes to succeed on the lab to market journey.
• 1:40
  Chris Reichhelm: Join us.
• 1:41
  Chris Reichhelm: Most entrepreneurs dream of getting their exit.
• 1:45
  Chris Reichhelm: Today's guest has had two and what's more, they've been in completely different sectors.
• 1:52
  Chris Reichhelm: How's that for unusual?
• 1:54
  Chris Reichhelm: His first was in energy.
• 1:55
  Chris Reichhelm: His PCR and diagnostics, medical diagnostics.
• 2:01
  Chris Reichhelm: Today, I'm talking to Chris Perkins, an American entrepreneur who has a chemical engineering background and was able to build his first energy company, Copernican Energy, that he later sold to Sundrop Fuels, again out of Colorado, and his second as founder and CEO of Dropworks, a digital PCR, medical diagnostics business, that he sold to Bio-Rad for$125 milion dollars How does one become a founder and CEO of a biofuels company, and then a medical diagnostic company, and have success, not be considered completely crazy, but actually had success and delivered real value.
• 2:48
  Chris Reichhelm: Either he is the luckiest guy in the world, or he has figured out a system building these companies of figuring out the right kinds of problems to solve.
• 2:59
  Chris Reichhelm: of guiding his development and engineering teams of getting to a certain level of product market fit becoming interesting enough where the market takes notice and has to acquire what he's got.
• 3:11
  Chris Reichhelm: This is what I want to figure out today.
• 3:13
  Chris Reichhelm: I hope you enjoy it.
• 3:14
  Chris Reichhelm: Let's get into it.
• 3:19
  Chris Reichhelm: Chris Perkins, thank you so much for joining me.
• 3:22
  Chris Perkins: Oh, it's great to be here, Chris.
• 3:23
  Chris Perkins: Thanks for having me on.
• 3:26
  Chris Reichhelm: You've had two exits, one in energy and the other in medical diagnostics.
• 3:34
  Chris Reichhelm: And you've made very good money from each of these transactions.
• 3:39
  Chris Reichhelm: And that represents the goal for so many entrepreneurs in one way.
• 3:45
  Chris Reichhelm: It's not the whole goal, but it represents a goal for many.
• 3:51
  Chris Reichhelm: And you're still relatively young.
• 3:54
  Chris Reichhelm: And so as you reflect on your, on your success, and it is success.
• 4:00
  Chris Reichhelm: How much do you attribute to luck, and how much do you attribute to something that you've figured out already, that the rest of us are still grappling with?
• 4:17
  Chris Perkins: Obviously, you know, you have to attribute a lot to luck, you know, again, being in the right place at the right time, uh, meeting the right people, you know, um, having, you know, the right conversation at, at, uh, a conference, whether it be JPM or any of the other financing conferences, all of those things matter, you know, um, but, you know, to get to the other side of the question, is there something that I've figured out that, you know, that most other people are struggling with?
• 4:48
  Chris Perkins: I, I don't think so.
• 4:50
  Chris Perkins: I think, um, it's, it's more comes down to, you know, is there something that I've been willing to accept?
• 4:58
  Chris Perkins: Which is that I don't know the answer going in, that my idea of what my company is, you know, when I'm trying to start a company, is it the idea I'm going to end up with?
• 5:10
  Chris Perkins: And that's something that we all kind of are feeling around, but I think a lot of founders, Get wedded to, I've got to have the best idea and that's the idea I've got to come up with that's going to disrupt this market or save the world or have this huge impact.
• 5:25
  Chris Perkins: And instead say, wait, I'm in this to have an impact.
• 5:29
  Chris Perkins: I'm in this to solve somebody else's problem.
• 5:32
  Chris Perkins: You know, and the only way to get there is to go talk to those people.
• 5:37
  Chris Perkins: And, and really, instead of talking to those people, listen to those people and be really curious about What are they dealing with every day?
• 5:44
  Chris Perkins: What are the problems they wake up and think about every day?
• 5:47
  Chris Perkins: And oftentimes those problems, you don't have anything to do with what the technology you have in your lab is and what it could solve.
• 5:54
  Chris Perkins: And then, you know, you think about, well, is there something we could change that would help solve this problem?
• 5:59
  Chris Perkins: Or do I need to move on and find a different set of customers that might have something that's, that there, there's an overlap between problems they have and problems I can solve.
• 6:07
  Chris Perkins: And I think, you know, this is not.
• 6:11
  Chris Perkins: You know, some revelation coming down from the mountain top.
• 6:13
  Chris Perkins: I mean, Steve Blake has been talking about this lean startup process for years.
• 6:18
  Chris Perkins: Um, but I think it's tough to do, uh, because it really requires, you know, something that people who are really ambitious and into starting startup companies, you know, struggle with, which is they've always been the people who have had the answers, you know, and now you have to let go of your ego a little bit and dereligious because the answers aren't you know, in your head, they belong to the people whose problems you're trying to solve.
• 6:45
  Chris Perkins: And, and when you get to that, then it gets to the, you know, the whole underlying idea of why you're trying to start a startup.
• 6:52
  Chris Perkins: You know, if you're trying to do it because you want to make a lot of money, there are easier ways to do that.
• 6:58
  Chris Perkins: You know, go get into finance or something.
• 7:00
  Chris Perkins: You know, you're really into it because you want to have an impact.
• 7:03
  Chris Perkins: And, and then you start to think about, well, who am I serving?
• 7:06
  Chris Perkins: And, you know, what kind of impact am I trying to have?
• 7:09
  Chris Perkins: And then you start to put the focus on, on the people and on listening.
• 7:13
  Chris Perkins: And that's where you uncover, you know, what the, you know, the, the, the, the problem is that you might be able to develop a solution for
• 7:22
  Chris Reichhelm: Is that a challenge.
• 7:24
  Chris Reichhelm: That's a great answer, by the way.
• 7:27
  Chris Reichhelm: Is that challenge greater for academics or for researchers or technology innovators where the love of the technology and often, you know, the birth of the company revolves around their development of an initial idea or a platform, which then often they try to back into as, as a solution to a problem?
• 7:52
  Chris Perkins: Yeah, Chris, I think that's, that's two, there's the answer that it's twofold.
• 7:56
  Chris Perkins: Uh, yes, for, for these two reasons.
• 7:59
  Chris Perkins: Um, the first is that the kind of questions that academics, you know, ask, you know, that, that are important to answer in academia, questions around how the world works from a basic level, you know, are very different than the kind of questions you have to ask when you're trying to bring a product to market and find a product to market fit, you're less interested about fundamentally how a certain material works or, you know, you know, what's going on, you know, in a biological system.
• 8:28
  Chris Perkins: You have to be interested in, well, why does this tool not work well for somebody in the life sciences and what would change their day?
• 8:38
  Chris Perkins: You know, what would change their lives, uh, on a day to day basis?
• 8:43
  Chris Perkins: Um, if, if it were different and oftentimes that doesn't take a huge technological solution.
• 8:48
  Chris Perkins: It takes a little bit of additional technology, integration of a lot of existing technologies.
• 8:54
  Chris Perkins: And you know, oftentimes it's not as interesting for academics because of the way as academics were trained to think, you know, and that doesn't mean that the questions that academics ask are any less value.
• 9:05
  Chris Perkins: That's why, you know, we really want the government to pay for lots of research and to drive those things.
• 9:10
  Chris Perkins: Cause those basic science.
• 9:11
  Chris Perkins: Innovations form the foundations for what will eventually become technology companies.
• 9:16
  Chris Perkins: But, um, those technology companies in the startup phase need to ask different kinds of questions.
• 9:25
  Chris Perkins: Um, you know, questions around what are market need, what, what, what is good enough?
• 9:31
  Chris Perkins: I think that is a really difficult question for academics to ask because, you know, oftentimes they want to understand things at a much deeper level or a much more.
• 9:41
  Chris Perkins: You know, interesting, you know, uh, scientific level than what is required to actually solve the problem.
• 9:49
  Chris Perkins: Um, the, the second piece of this and the reason why I think some academics struggle making that transition is oftentimes there are people who have, who have always been really strong individual contributors.
• 10:02
  Chris Perkins: And so they've always been the people whom everybody, you know, from the moment they were in, in school, they were always the one leading the groups and, and solving the problems and coming up with the answers.
• 10:14
  Chris Perkins: And then now that has continued, they have developed a technology, you know, with, you know, in, in tall capital letters.
• 10:21
  Chris Perkins: And, uh, it's difficult then when you get to the market and the market says, well, We don't need 99 percent of your technology, you know, but there might be one thing that works.
• 10:32
  Chris Perkins: It's difficult for folks to let go of that idea and say, okay, well, I'm willing to put the rest of that on the shelf and go bring the piece to the market that is actually valuable to the people out there doing that.
• 10:45
  Chris Perkins: A good example of this was at Dropworks.
• 10:47
  Chris Perkins: Like at Dropworks, um, we had a technology, I don't know, Um, that I, that came out of Arizona State University, and the entire idea of this technology, um, when it was developed, it was a digital PCR technology that was fully automated, like, you know, to get a sample, to purify the sample, to then analyze the sample, um, and deliver an answer, you know, required no human input, because it was designed to go on this miniature submarine and test, you know, the, the bacteria out in the ocean.
• 11:19
  Chris Perkins: You know, and, you know, when we started to look into the market for ocean going bacterial, uh, analysis and assaying subs, it was a small market.
• 11:30
  Chris Perkins: Um, but it turned out that, like, there was a market for digital PCR tools where people were really frustrated with the workflow of what existed.
• 11:39
  Chris Perkins: You know, there were some really groundbreaking technologies that come into the market and establish that market, but now people wanted things to be as simple as what they're used to using.
• 11:48
  Chris Perkins: with, you know, the real time PCR that preceded that.
• 11:51
  Chris Perkins: And so when we started to ask, it was like, well, we started to pull off pieces of the machine that had been developed, you know, to the point where it was like 10 percent of what it was.
• 12:01
  Chris Perkins: And had we not been able to do that, we wouldn't have been able to really pivot into the direction that the company ended up being, you know, required for, which was to solve a problem that most life science researchers would have, you know, versus this problem that there was very small slice and required a very complicated technical solution that was very creative, um, but didn't bring a lot of value.
• 12:25
  Chris Perkins: You know, all of those automation steps only mattered to a small number of chunks.
• 12:29
  Chris Perkins: Um, and, and so, So, being able to step away from that, um, is something that I think a lot of academics struggle with because, you know, they, they have imagined in their mind how valuable everything can be, uh, to, to the world.
• 12:45
  Chris Perkins: And they're very good at convincing not just other people, but themselves of, of how valuable that can be.
• 12:51
  Chris Reichhelm: How much of a challenge was that for you with Copernican Energy?
• 12:57
  Chris Perkins: Oh, uh, so Copernican Energy was, you know, it's a good example of not knowing what you're getting into.
• 13:03
  Chris Perkins: You know, I was, um, I, I went to graduate school because I wanted to work on, you know, that, you know.
• 13:10
  Chris Perkins: The energy problem in Joe, renewable energy.
• 13:13
  Chris Perkins: It was, you know, 2001 when I was applying for grad school, started in 2002.
• 13:19
  Chris Perkins: And so I worked at hydrogen and, you know, concentrate solar energy and biomass and, and a variety of things.
• 13:26
  Chris Perkins: We started that company, uh, because we thought we were going to change the world.
• 13:31
  Chris Perkins: We're going to make gasoline for everybody from solar energy and biomass.
• 13:36
  Chris Perkins: And.
• 13:37
  Chris Perkins: And there was a lot of, I think, optimism behind that.
• 13:43
  Chris Perkins: What I would say, you know, we did wrong there is first of all, we didn't talk to a single customer.
• 13:48
  Chris Perkins: We just, you know, looked up, you know, what the price of gasoline was.
• 13:51
  Chris Perkins: Uh, and, um, and it was a time of a lot of excitement.
• 13:57
  Chris Perkins: If you think back to like 2008, when we got acquired, it was You know, oil was 140 a barrel, you know, natural gas was four or five times as expensive as it is now.
• 14:08
  Chris Perkins: And so there was a whole lot of enthusiasm for things moving into the space.
• 14:12
  Chris Perkins: I think one of the things, it was not hard for us to say, well, we should, you know, do exactly this technology or versus this technology.
• 14:21
  Chris Perkins: But I think, um, it, it was really hard for me transitioning from there into Sundrop Fuels to let go of.
• 14:29
  Chris Perkins: You know, some of the core pieces of the tech and that transition for me as a, as a, going from a scientist to, uh, you know, because at Copernicus, you're a small company, like I was CTO, but it was, I was really the only person doing technical work for a while.
• 14:46
  Chris Perkins: It was tough to then be managing people and realize I didn't have to be the one to come up with the solutions.
• 14:52
  Chris Perkins: You know, I had to be the one to hire the people and empower the people to do that.
• 14:57
  Chris Perkins: And it didn't have to be the thing we had promised to the venture capitalists at the beginning.
• 15:04
  Chris Perkins: You know, that we're going to use this kind of technology.
• 15:07
  Chris Perkins: In that case, it was like this concentrating solar system at very high temperatures that we could have pivoted into other spaces using pieces of our technology to get where we needed to be.
• 15:17
  Chris Perkins: And, uh, at some point, you know, the, the image, uh, the vision of what we were trying to do and the amount of money we had raised made it very difficult for us to turn that ship at all.
• 15:28
  Chris Perkins: You know, it was like, we are either going to become, you know, a The Exxon of renewable energy or, or we're gonna, you know, really struggle to get where, you know, we're going.
• 15:37
  Chris Perkins: And in the end, that's kind of what happened.
• 15:38
  Chris Perkins: But, um, less out of a technical failure, even though we tried to solve a huge number of technical challenges all at once, uh, and, and, and more out of, you know, we had gotten, you know wedded to a really huge vision, and those are difficult places for startup companies to be.
• 15:58
  Chris Perkins: I mean, you know, when you're trying to invent new materials of construction, at the same time that you're trying to solve how you get a huge amount of biomass into one space in one time, or you're trying to solve how you're going to get the market to accept this, and where you, all those considerations all at once, that's a very tough place for a small company of 24 people to be successful.
• 16:20
  Chris Perkins: Yeah, and we had a lot of really smart, talented people working really, really hard, um, but one of the things I took from that was like, startup companies, you know, really need to be focused on a problem that's, that's achievable right in front of their faces so that they can grow to get to a point that they can start to tackle those bigger problems.
• 16:41
  Chris Reichhelm: Yeah, yeah, I get that.
• 16:43
  Chris Reichhelm: You, um, this switch in mindset that you talk about.
• 16:47
  Chris Reichhelm: Between academia and the love of that initial platform development, the focus on that because of the desire to understand the way the world works, the way particular materials work, the way, you know, the way a particular platform behaves and the mindset required to go into a company where you may be required to pick that apart, to, to strip it down and to rebuild it.
• 17:12
  Chris Reichhelm: Are we talking about two different people?
• 17:16
  Chris Perkins: I think, um, yes, is, is the answer to that question.
• 17:20
  Chris Perkins: It can be a person, but that person's got to change over, over time to get to there.
• 17:25
  Chris Perkins: And oftentimes you see, you know, uh, a model where a postdoc or graduate student of a PI in a lab is, is the person that goes on and takes that, that, uh, challenge forward, because the PI has got a lot of responsibilities and they're still interested in doing your university job.
• 17:44
  Chris Perkins: I think that model can work, um, provided that, uh, person moving into the business side of things understands what they're getting into.
• 17:54
  Chris Perkins: Um, I think a lot of times it is somebody commercializing their graduate research that they did under that PI and then they, they still envision their job as being the core technical person.
• 18:07
  Chris Perkins: But then they also imagine themselves running this company.
• 18:10
  Chris Perkins: And I think we do, there's a popular image of the startup founder as sort of this Tony Stark type person who's, you know, who's not just, you know, really capable and really successful, but like the technical genius who's going to solve every problem in the world.
• 18:29
  Chris Perkins: And that is not how it works.
• 18:31
  Chris Perkins: You know, and a lot of times when I mentor startup founders, And, and they want to be the CEO, but they also want to drive all the technology at home.
• 18:41
  Chris Perkins: You know, one of the questions I asked was like, imagine you're climbing a mountain.
• 18:45
  Chris Perkins: You know, are you the person on the summit day leading that summit team and getting to the top of the mountain?
• 18:51
  Chris Perkins: Are you the person in base camp, you know, organizing all the supplies and, you know, radioing up there and making sure, you know, and, and oftentimes you'll hear, you know, They, they really, they, they know the answer that, that you, they think you want , which is like Basecamp person.
• 19:10
  Chris Perkins: Uh, but they really, they really wanna be the person on the top of the mountain, which is okay, you know, because they need to then realize that's who they are.
• 19:19
  Chris Perkins: If they don't wanna let go of that technical piece, then let's go find somebody.
• 19:24
  Chris Perkins: Who understands how to do, you know, I actually hate the words of the business side of things.
• 19:29
  Chris Perkins: It's actually who understands how to run the search.
• 19:32
  Chris Perkins: You know, how do you go and find out the idea?
• 19:34
  Chris Perkins: Cause the real trick is the CEO isn't the base camp manager either.
• 19:38
  Chris Perkins: They're the person back in the home country who figured out which mountain you were supposed to climb and recruited the team and got all the supplies together.
• 19:47
  Chris Perkins: And, you know, you're really talking about a CTO when you're talking about the person in Basecamp, because they're not doing those day to day technical discoveries either.
• 19:55
  Chris Perkins: And, you know, I had to remind myself of this, you know, every time that, you know, at Dropworks, we were a couple of people to start.
• 20:02
  Chris Perkins: And so, yeah, I mean, there were days, as CEO, you know, that I was writing, you know, microcontroller code, and I was, You know, soldering electrical boards, and I was putting together tubing and, uh, things like that, because that's what you have to do sometimes for a short period of time when you're small and you don't have any money.
• 20:18
  Chris Perkins: Um, but you know, when we were 40 people, I had to remind myself when there was an interesting technical discussion going on in a room that they didn't need me.
• 20:27
  Chris Perkins: They didn't need me to do that.
• 20:28
  Chris Perkins: They needed me to go find them more people to help.
• 20:32
  Chris Perkins: You know, drive their technical, you know, progress forward.
• 20:35
  Chris Perkins: And, um, it's really hard when you're a scientist, yeah, to, to, to do that.
• 20:41
  Chris Perkins: So, um, you know, I, I think it's, it's, uh, the core problem is asking, having somebody who's coming out of academia, ask themselves, What do they see themselves doing at the company that they envision start?
• 20:57
  Chris Perkins: And if it is, I am going to develop the technology, that's great, but you need the rest of the team.
• 21:06
  Chris Perkins: And you need somebody in particular, who's skilled and figuring out what problem you're going to solve, and that really just means dropping your ego, uh, and going and listening to people and being really curious about what their problems are that have been set.
• 21:22
  Chris Perkins: In the back of your mind, you understand what the technology can do, and you're connecting the dots.
• 21:27
  Chris Perkins: But, uh, being able to do that is the most important skill, uh, in figuring and getting a startup off the ground.
• 21:35
  Chris Perkins: Everything else, raising money, um, you know, recruiting a team, you know, uh, getting market traction and, and then eventually getting to exit flows from that piece.
• 21:47
  Chris Reichhelm: How did you guys handle that?
• 21:50
  Chris Reichhelm: How did you figure out that early phase?
• 21:52
  Chris Reichhelm: Cause you're absolutely right.
• 21:54
  Chris Reichhelm: If you want to get on the right trajectory, you've got to, you've got to solve for this early on.
• 21:59
  Chris Reichhelm: How did you guys figure it out?
• 22:02
  Chris Reichhelm: What were the lessons you learned through that process?
• 22:05
  Chris Perkins: Uh, at Copernican, I did, you know, and, and we got really lucky.
• 22:11
  Chris Perkins: What I did, you know, after that is I called, um, you know, 40, 50 different customers within the first, you know, three or four weeks in a space I knew really nothing about, you know, it was like, I didn't, I knew what DNA was and that was about as far as, as anything I knew in the life science.
• 22:29
  Chris Perkins: And so I had always been on the physical side.
• 22:33
  Chris Perkins: Um, you know, and people would ask, well, you know, how did you get to know people so quickly?
• 22:38
  Chris Perkins: And I, I really think it was, I had, I had some friends who were in that space.
• 22:43
  Chris Perkins: And so they made some introductions, but I just asked really naive questions.
• 22:47
  Chris Perkins: And when I would email people, I would take Steve Blank's advice.
• 22:51
  Chris Perkins: You know, and make sure they know you're not selling them, that you really want to understand their problem.
• 22:57
  Chris Perkins: I'm here to listen to you, and people really like to talk about their problems, and so it didn't take all that long, you know, to start to get to know a few of the people, you know, in the space that this could apply to, and I talked to Environmental sampling people first, and that didn't, that was sort of a dead end.
• 23:15
  Chris Perkins: And then I talked to folks in that, um, food safety business and, you know, understood that they had had, you know, their problem was solved by a different, you know, method and then into industrial biotechnology and finally into life science tools.
• 23:28
  Chris Perkins: You know, with an initial idea that we're going to do diagnostics, and then we realized how challenging it would be to get out of the ground, we just focused on research first.
• 23:37
  Chris Perkins: And as we talked to people there, okay, well, we found not just research at large, but a couple of spaces that there was a core problem.
• 23:44
  Chris Perkins: You know, um, you know, that we could really focus on and solve a workflow problem, you know, for G-therapy and, uh, a cost problem for, um, uh, for some of the high throughput applications there.
• 23:58
  Chris Perkins: And so, uh, the way we did that is I just cold emailed folks, and then after I, you know, got a couple of conversations, I always would ask two questions at the end.
• 24:10
  Chris Perkins: You know, the first is, what haven't I asked you that you think I should know?
• 24:15
  Chris Perkins: And then the second is, who should I talk to next?
• 24:19
  Chris Perkins: And on average, every touch point would yield two, two touch points.
• 24:25
  Chris Perkins: Yeah.
• 24:25
  Chris Perkins: And so you can think of that branching out pretty quickly.
• 24:28
  Chris Perkins: Um, you know, and before we knew it, you know, we knew a whole lot of people, uh, that had, uh, experience in the space or that were working in the space we were working in.
• 24:38
  Chris Perkins: And I think that approach works no matter what, no matter what field you're in.
• 24:46
  Chris Perkins: I'm on the board of a company right now that's working in the, um, Uh, uh, pharmaceutical tools space.
• 24:53
  Chris Perkins: And they're doing the same thing.
• 24:54
  Chris Perkins: They have a bunch of customers, but they're reaching out and they're asking questions, you know, we have anything to sell you, but right now we want to understand what the problem is and then they can, you know, pivot into understanding.
• 25:06
  Chris Perkins: Do they have something there that they can, that they can sell to these people?
• 25:12
  Chris Reichhelm: Converting that insight that you're, that you're gathering from these calls and then converting that into activity.
• 25:20
  Chris Reichhelm: within the business.
• 25:23
  Chris Reichhelm: Can you kind of walk us through what that meant?
• 25:26
  Chris Reichhelm: At Dropworks, how did that impact what people were doing?
• 25:32
  Chris Reichhelm: And I guess the second question on top of that, what was the way of, you know, what was the development methodology?
• 25:40
  Chris Reichhelm: Were you guys operating lean and agile?
• 25:43
  Chris Reichhelm: Can you do that in such an environment where it's so multidisciplinary, it's so multidisciplinary, it's so precise?
• 25:49
  Chris Reichhelm: I mean, these sorts of tools are very, very precise.
• 25:52
  Chris Reichhelm: It's not, you know, it's not software.
• 25:54
  Chris Reichhelm: So, so can you walk us through a little bit about the conversion of insight into activity and then the way you went about building out what I'm guessing were prototypes and maybe early pilots?
• 26:07
  Chris Perkins: Yeah, I mean, your first step, you know, when you, when you start to hear what customer are you telling you, you're getting all this relatively unstructured information, right?
• 26:16
  Chris Perkins: And you're trying to see where it overlaps to a specific need, you know, that's got to translate into, you know, uh, requirements, a set of requirements for what, you know, what is, you know, in some of the lean startup parlance, the minimally viable product.
• 26:33
  Chris Perkins: But that really just means it's like.
• 26:35
  Chris Perkins: You know, this thing only needs these two things to be better.
• 26:39
  Chris Perkins: You know, you know, these two features, you know, it's like if, um, yeah, for us at Dropworks, it was, you know, the, everything had to be same, the same as the existing real time PCR machines.
• 26:52
  Chris Perkins: Um, and the workflow had to be same, which was different than in a, in a digital PCR machine, which had like three or four more steps.
• 26:59
  Chris Perkins: You know, so we had to get rid of those three or four steps.
• 27:02
  Chris Perkins: If we could do that, then we had a machine that would, and obviously there are technical specifications that come out of that and all that.
• 27:09
  Chris Perkins: So it's, you know, developing, okay, what are the requirements of this thing?
• 27:13
  Chris Perkins: Because that's going to develop your effort.
• 27:14
  Chris Perkins: And then from there, you have to say, well, what are all the things we don't know right now that we need to know?
• 27:22
  Chris Perkins: Like why can't we build it today?
• 27:24
  Chris Perkins: You know, why, why can't we just put a machine together?
• 27:26
  Chris Perkins: Well, there's a whole bunch of stuff and, um, the process of then solving those questions is, is really the process of, of development of a product.
• 27:37
  Chris Perkins: And.
• 27:38
  Chris Perkins: You have to say, well, did we use a lean or agile type of development process?
• 27:43
  Chris Perkins: Yes, for parts of it.
• 27:45
  Chris Perkins: Um, for parts of it, we wandered around in the dark a little bit and had to realize we didn't, we didn't know enough about the boundaries of where the system worked and didn't work.
• 27:57
  Chris Perkins: to, to move forward.
• 27:58
  Chris Perkins: And we had to go back and do a little bit of that work.
• 28:01
  Chris Perkins: I think there's a big tendency for people who are trying to start startup companies.
• 28:05
  Chris Perkins: And I fall into this bucket of, of saying like, good, it works, let's move forward, you know, and not really taking a step back to say, okay, but where does it not work?
• 28:15
  Chris Perkins: And for us, you know, we were generating these little droplets and it was working great.
• 28:20
  Chris Perkins: And then all of a sudden it wasn't working on any sheets.
• 28:23
  Chris Perkins: We were working hard.
• 28:24
  Chris Perkins: And, uh, it, it, we, we were too willing to have a prototype that works and, you know, not willing enough to do a more structured engineering process around that early on to figure out, okay, well, you know, where doesn't it work?
• 28:40
  Chris Perkins: What are the sizes of these specific things need to be?
• 28:42
  Chris Perkins: What are the materials we can or can't use?
• 28:44
  Chris Perkins: And you want to be careful that that doesn't, Extended to an academic project where you're, you know, you know, over classify or over, you know, doing more science than you need to.
• 28:55
  Chris Perkins: It really comes down to defining those first questions really well.
• 28:59
  Chris Perkins: You know, what do we need to know before we're able to move this product out, you know, and the effort then, uh, that you do, uh, stems around that.
• 29:11
  Chris Perkins: Now, what I would say is, For anybody, one of the key first hires then is, is, you know, is somebody who's going to lead your organizations uh, project management effort and, and lead your organization's technology development effort, you know, and those can be separate roles or the same role depending on the kind of person that you get, but you need somebody who's used to building a structured, you know, a structured environment in which, you know, people have clear deliverables and, you know, they're held to those deliverables and people work a lot better in those environments.
• 29:46
  Chris Perkins: They feel comfortable.
• 29:48
  Chris Perkins: It sounds crazy, but given more constraints, people feel safer, you know, they given more guidance, people feel like they know what they're supposed to do.
• 29:57
  Chris Perkins: That's the more positive way of saying that.
• 29:58
  Chris Perkins: But I think, um, it's really tough for even really, really smart people to, to try to figure out what you want them to do or what they should do without, you know, strong organizational management.
• 30:11
  Chris Perkins: Uh, you know, and Chris, that's one of the core lessons.
• 30:14
  Chris Perkins: That I think I've learned over the years is how important, um, good management is, not just senior management, but middle management as well.
• 30:24
  Chris Perkins: And I think that's something that when you look going lab to market, a lot of technical people really undervalue how important people are who are really good at hearing people, at organizing people, but aren't necessarily going to be people that are your, you know, mathematical or your physical superstars.
• 30:45
  Chris Perkins: You know, the, and we tend to undervalue people who are just middle managers, but in, in reality that skillset and it is a skillset that has to be trained of understanding, you know, how to communicate with, you know, people, you know, how, how to get them to set goals and understand how those goals link to the larger goals of the organization.
• 31:07
  Chris Perkins: how to make sure they have what they need and speak up through what they need and to take ownership of what they're doing.
• 31:13
  Chris Perkins: Finding good, strong, you know, management early on, uh, is, is really a key to success in scaling a company from your first five people to 40 or 50 people.
• 31:25
  Chris Perkins: Um, and you know, it amazed me because our strategy at the beginning of Dropworks was we are going to find the smartest people.
• 31:34
  Chris Perkins: And we're going to, you know, let them, you know, guide us where it needs to go on each of the areas that they're in.
• 31:40
  Chris Perkins: And, and what we ended up with was a lot of Unhappy, unproductive, smart people, you know, and we had to learn, okay, okay.
• 31:50
  Chris Perkins: Some of these people can be empowered to be managers, but they have to then give up.
• 31:54
  Chris Perkins: They can be trained in a direction, but they have to give up some of the technical leadership that they want to do.
• 31:58
  Chris Perkins: So if that's a direction they want to move in, and we had, You know, some people really successful in that space and some of the other places we have to hire in people who are strong technical managers.
• 32:07
  Chris Perkins: Um, and that's a hard job to hire for, but really important.
• 32:12
  Chris Perkins: And we are really, um, on the road to, to, to continuing to transform our culture in a way that people felt, you know, more like they understood where they were going and more like they knew what they were supposed to do day to day, which made them feel safer in the environment and thus overall more productive.
• 32:32
  Chris Perkins: And we forget that when you're five people or six people, you can talk to everybody in the company multiple times every day.
• 32:38
  Chris Perkins: When you're 20, 30, 40 people, all of a sudden that doesn't happen anymore.
• 32:43
  Chris Perkins: And, uh, that the importance of those middle management layers, uh, becomes, you know, stronger and stronger and stronger as you grow.
• 32:54
  Chris Reichhelm: Were those hires you made, were they experienced, domain experienced hires?
• 33:04
  Chris Perkins: Um, yes, uh, but the, the ones that, where we had the most success is in two places, and I'm thinking both at Dropworks and at Sundrop Fuels.
• 33:14
  Chris Perkins: Uh, the places where we had the most success would be, uh, you know, first of all, yes, hiring somebody with some domain experience, but so that they could talk to the technical people and understand what they're going to, but who also had a successful track record of being, yeah, one of these middle managers.
• 33:34
  Chris Perkins: The other place we had some success
• 33:35
  Chris Reichhelm: And if you don't mind me interrupting there, if you don't mind me interrupting there real quick, so they had domain experience.
• 33:43
  Chris Reichhelm: Did they have previous startup experience?
• 33:46
  Chris Reichhelm: Or was it largely corporate experience or SME experience?
• 33:50
  Chris Perkins: Um, for the people who had, I think, the most success, it was in medium sized companies, you know, and, uh, you know, where I, I, startups are tough places for corporate traps, uh, out of large, large corporations, just because you don't have the support systems.
• 34:11
  Chris Perkins: Uh, a lot, and, and you don't oftentimes have processes in place yet, you expect people to put those in place, but a lot of times you've only been in small startups, it's really a roll of the dice as to whether they've had a leader that really valued that early stage, uh, valued that middle management or that management trend, management as a skill.
• 34:32
  Chris Perkins: Uh, we, uh, had a lot of success at Dropworks, uh, particularly in the second half of the company's existence.
• 34:40
  Chris Perkins: in identifying some of our younger subject area experts who had, um, you know, an aptitude for leadership and putting them in those roles and then working to support those.
• 34:53
  Chris Perkins: And I could think it was, you know, multiple people, um, who ended up becoming really strong in that leadership space and have moved on to other things now where they continue to do that.
• 35:05
  Chris Perkins: And so you could do it a couple of ways the most important piece is that management as a skill has to be valued by the company.
• 35:15
  Chris Perkins: You have to invest in it, you have to support those people, so you either have to look to hire it or you have to look to train it.
• 35:21
  Chris Perkins: It's going to cost money, it's going to slow you down, in the end, it's going to make you faster.
• 35:26
  Chris Perkins: You know, and you're going to have a better culture when that happens.
• 35:30
  Chris Reichhelm: We have this very negative association with management, and my hypothesis is it's one of the reasons why we don't have enough of these businesses actually scaling.
• 35:41
  Chris Reichhelm: Because we don't have the systems and processes and people in place, uh, around which you can build, uh, a company capable of supporting the marketplace and whatever solution you're in.
• 35:54
  Chris Reichhelm: So, to hear you talk about the importance of it and, you know, and the importance of that as a lesson, uh, you know, that you've picked up is, uh, is actually really heartening.
• 36:04
  Chris Perkins: Yeah, I mean, Chris, I, I think we have such, I have a hypothesis that we have such a bad association with management is because is, is a symptom of the way that, that a lot of those companies approach management, you know, it's because we have a lot of bad managers because you promoted people into positions of management without supporting them.
• 36:24
  Chris Perkins: Yeah, if, when you have companies that don't value management, the people that become managers.
• 36:29
  Chris Perkins: don't have the, you know, the, the support or the, the, the training or the, um, uh, the focus to end up becoming good managers.
• 36:40
  Chris Perkins: And then thus the technical people in those organizations just end up thinking, well, management's really, really stupid, you know?
• 36:45
  Chris Perkins: And that's a common, um, that happens in lots of human organizations where, you know, the people at the top hold the responsibility up to them.
• 36:54
  Chris Perkins: The people at the bottom push the responsibility up and both are participating in that.
• 37:00
  Chris Perkins: You know, exchange, you know, and a startup company requires you to be really flexible in how you see yourself, you know, what kind of role that you're filling.
• 37:10
  Chris Perkins: And um, I think most people, you know, draw artificial walls around themselves and I have myself at times.
• 37:19
  Chris Perkins: You know, where it's like, well, I can't do that.
• 37:21
  Chris Perkins: I'm not a blank or I'm, you know, I can't look at computer code.
• 37:26
  Chris Perkins: I'm a biologist.
• 37:27
  Chris Perkins: You know what I mean?
• 37:28
  Chris Perkins: It's like, well, we don't have any biology tasks today, but today I need somebody to do this, you know, or I need somebody to learn how to go talk to customers.
• 37:37
  Chris Perkins: And I know you're not a salesperson and we don't have any salespeople yet.
• 37:40
  Chris Perkins: What I need somebody to do is go out there and go find out this piece of information for me.
• 37:45
  Chris Perkins: And the people who are really successful, I think, in startup companies, particularly early in the first 40 people or so, are people who aren't just willing to wear a lot of hats, but are anxious to learn new things all the time.
• 38:00
  Chris Perkins: Yeah.
• 38:00
  Chris Perkins: And, and again, That makes sense, too, because you hope that out of the first 40 people you have, you have a lot, a lot of the leaders that you want to carry on to the first 200 people.
• 38:14
  Chris Perkins: Yeah, right.
• 38:14
  Chris Perkins: You're looking for people who are going to lead groups, if not go into senior management positions, because you're not going to hire.
• 38:22
  Chris Perkins: your C suite that you're going to have through IPO, you know, in the first, you know, three weeks after you're a Series A you know, that's not how that works.
• 38:31
  Chris Perkins: So you're looking to hope that, that the people that you have in that first 34 people are people you develop into positions, but you know, they've got to change to get there.
• 38:40
  Chris Reichhelm: Yeah.
• 38:40
  Chris Reichhelm: Yeah.
• 38:41
  Chris Reichhelm: You are my last question for you, Chris, and I've thoroughly enjoyed this, this afternoon.
• 38:48
  Chris Reichhelm: You're advising a lot of young startups now.
• 38:52
  Chris Reichhelm: And, uh, and you're sitting on boards and so on.
• 38:55
  Chris Reichhelm: What are the key pieces of advice you're giving to entrepreneurs as they set out on this journey?
• 39:03
  Chris Perkins: I, I think, you know, one of the things, the most common thing I get asked is, how do you raise money?
• 39:11
  Chris Perkins: I need to raise money.
• 39:13
  Chris Perkins: You know, look at my deck, tell me what's going on, you know, tell me, you know, how I, or introduce me to these VCs, you know, and, um, that's the wrong focus, you know, and oftentimes I see it right away when I look at the start deck, you know, because, you know, it's 20 pages, 30 pages of dense, we're going to tell you everything about everything we have imagined.
• 39:35
  Chris Perkins: You know, the thing that I really try to align folks to is, is you need to understand your customer and their problem so well that you can express it and a sentence or two and i think a thing a lot of folks really struggle with i struggle with is a Dropworks what is how do i every customers different and how do i fit all the different applications i, Um, see into one slide to be able to let this VC or this, you know, uh, potential customer know like how amazing this is going to be so that they understand they should invest in, you know, and if you can't express it in a few, you know, one to two sentences, maybe three at the most, uh, short sentences, then, you know, You don't really understand it.
• 40:27
  Chris Perkins: You don't have a problem that's clear enough.
• 40:30
  Chris Perkins: And if that's not a problem that people are thinking about every day, it's going to be tough to drive traction because, um, they're not really going out of their way to solve it right now.
• 40:42
  Chris Perkins: You know, it's gotta be, um, something that, you know, the difference between what you should call an aspirin problem and antibiotic problem.
• 40:50
  Chris Perkins: You know, if you have a headache, you could use some aspirin, but if you don't get the aspirin, you're going to be okay, but if you, if you have, an infection, yeah, you need, you need that antibiotic and, and those are the kind of problems that startup companies should be looking to solve, you know, um, which are immediate, uh, things that are going to see rapid uptake, you know, and there has to be overlap with the area you want to impact personally.
• 41:17
  Chris Perkins: You know, you know, it's got to be in the field, you know, like I'm sure there are really important, you know, or really big problems in, you know, some sort of accounting software, you know, out there, but that's not a problem I have passion about.
• 41:30
  Chris Perkins: That's a problem somebody else might have passion about.
• 41:32
  Chris Perkins: Um, and then the problem has got to be big enough that, you know, in your initial beachhead application, it's going to be interesting to investors.
• 41:40
  Chris Perkins: And then you see the pathways to it.
• 41:43
  Chris Perkins: So I think a lot of.
• 41:44
  Chris Perkins: Founders come to me and, and, and they'll say, well, you know, we want to be introduced to X, Y, or Z and I'm like, okay, let me see your deck or they want help with their, their, their pitch deck and they haven't figured out that first piece yet.
• 41:58
  Chris Perkins: And the funny thing about that is once, you know, what that product is, what the, what the, what the problem is and who the customer is.
• 42:07
  Chris Perkins: Everything else flows out of that really, you have like a nine slide pitch deck and it's like, who's your customer and what's their problem is your first slide, you know, what's the impact of solving the problem is your second slide.
• 42:19
  Chris Perkins: Your third slide is, you know, um, how is it being solved now and why doesn't that work?
• 42:26
  Chris Perkins: Your fourth slide is here's how we solve the problem.
• 42:28
  Chris Perkins: Your fifth slide's the one where you get to talk a little bit about your technology, but not in detail, just sort of at high level.
• 42:35
  Chris Perkins: You know, uh, the, the next slide is, you know, what's your business model?
• 42:39
  Chris Perkins: Uh, the slide after that is, is, you know, what do the, your pro forma financials look like, which nobody believes, right.
• 42:46
  Chris Perkins: But you have to have it there, see that so that you can at least show what you've thought about this.
• 42:50
  Chris Perkins: And you showed what the market is in your on slide two.
• 42:53
  Chris Perkins: And yeah, now you're showing this.
• 42:55
  Chris Perkins: And then you want to talk about your team and, uh, and what the exits look like.
• 43:01
  Chris Perkins: Yeah.
• 43:02
  Chris Perkins: That that's a deck, nine slides.
• 43:04
  Chris Perkins: Yeah.
• 43:04
  Chris Perkins: Give or take.
• 43:05
  Chris Perkins: And, um, you want to work on, how can I put as few words as possible onto each one of those?
• 43:11
  Chris Perkins: You know, thinking bullet points, uh, you can't do any of that effectively until you understand that customer's problem really effectively.
• 43:23
  Chris Perkins: Once you do, man, it gets so easy.
• 43:25
  Chris Perkins: And when we talk about exits.
• 43:27
  Chris Perkins: You know, M& A, particularly to, you know, to a strategic, it's the same problem.
• 43:32
  Chris Perkins: What's the problem that strategic is trying to solve and how do you fit into it?
• 43:37
  Chris Perkins: Yeah.
• 43:37
  Chris Perkins: So when you go through your management presentation, you know, when, when, when you get inbound interest to, to be, to be sold.
• 43:45
  Chris Perkins: It's the same kind of pitch, you know, well, here's this problem, you know, that we're trying to solve and you're thinking about it in terms of those customers are also the customers, it's strategic, and you're just pitching the same way, you know, a lot of times founders try to get married on the first contact with the VC, and you're just really, you're trying to get to the second date.
• 44:04
  Chris Perkins: You know, um, yeah, so I think that's, you know, if I were to give advice, you know, to sum things up, you know, it's, it's like at the top, you have to go talk to customers.
• 44:18
  Chris Perkins: You have to be, yeah, drop your ego, realize they have the answers, go be really, really curious, follow where, you know, you have your own hypotheses, but be willing to, to, to cross those off.
• 44:31
  Chris Perkins: So that's number one.
• 44:32
  Chris Perkins: Number two, then as you scale your company, Really invest in culture and, and, and management.
• 44:40
  Chris Perkins: You know, think about you're running an organization.
• 44:43
  Chris Perkins: You're no longer one person doing a PhD project.
• 44:46
  Chris Perkins: Now you are and so an organization needs people to help with this.
• 44:51
  Chris Perkins: Uh, and in the last piece is, You know, don't try to solve all of the world's problems with one startup, you know, solve a problem that's immediate, right in front of you.
• 45:02
  Chris Perkins: Doing that makes the startup successful and enables you to solve the next problem, and the next problem, and the next problem, uh, and eventually get bigger.
• 45:09
  Chris Perkins: Uh, you know, all of the big startup companies that we think of tackling really, really challenging problems today.
• 45:15
  Chris Perkins: Massive scale problems.
• 45:16
  Chris Perkins: They did not start that way.
• 45:18
  Chris Perkins: They started solving small problems that made the money, um, that still overlapped with the impact they were trying to have, but, um, and enabled them to move into bigger spaces so that they became large companies that then had the resources to tackle, tackle things that were much larger scale.
• 45:35
  Chris Reichhelm: Amazing.
• 45:37
  Chris Reichhelm: Amazing.
• 45:38
  Chris Reichhelm: That is valuable advice, Chris.
• 45:40
  Chris Reichhelm: Thank you so much.
• 45:42
  Chris Perkins: Well, it was a hard learned and I continue to make mistakes and learn from those mistakes.
• 45:46
  Chris Perkins: But you know, an environment in which there are no mistakes made is an environment in which there isn't any learning happening.
• 45:53
  Chris Perkins: And so, you know, hopefully, uh, so I hope to continue to make mistakes in the future and, uh, and learn from those and, and keep getting better at this.
• 46:02
  Chris Perkins: And hopefully, uh, uh, you know, I can be of some help to the people that I'm, I'm working with right now.
• 46:09
  Chris Reichhelm: I'm sure you are.
• 46:10
  Chris Reichhelm: I'm sure you are.
• 46:11
  Chris Reichhelm: Chris, thank you so much for joining me on the program.
• 46:14
  Chris Reichhelm: It's been a pleasure having you.
• 46:16
  Chris Perkins: Same here, Chris.
• 46:17
  Chris Perkins: Thanks for having me.
• 46:19
  Chris Reichhelm: You've been listening to the Lab to Market Leadership podcast, brought to you by Deep Tech Leaders.
• 46:25
  Chris Reichhelm: This podcast has been produced by Beauxhaus.
• 46:28
  Chris Reichhelm: You can find out more about us on LinkedIn, Spotify, Apple, or wherever you get your podcasts.