Episode 4: From Lab to Company: Engineering the Next Generation of Biotech Founders

 [00:00:00] [00:01:00] ​ 

Armon: thanks for joining. What did you go for with your boba? 

Souf: I think I got the classic brown sugar milk 

Armon: tea. Yes. Apparently we got exactly the same thing. So it's like hard to tell difference. 

Souf: It's usually out or jasmine for me. 

Armon: Okay. Just don't drink too much of mine by accident. 

Uh, well, so great to have you on.

Uh, do wanna give some quick background on yourself, what's your backstory? 

Souf: Yeah, definitely. Uh, born in France, lived in Manningham England for some time. Mostly grew up in California. Um, then came out to Boston to do my PhD in the church lab. Mm-hmm. Focusing on building in neuro functional genomics tools to control how cells move around the body.

Armon: Yep. 

Souf: Um, that was an incredibly exciting PhD During that time, uh, also co-founded an organization called Nucleate that's, uh, now operating at a global scale. Uh, had some fun involvement with the Harvard Biotech Club, um, [00:02:00] and more broadly with the community. 

Armon: What drew you into the nerdy PhD life in the first place?

Souf: Um, it's a great question. Um, I think just the thrill of the experiments. Yeah. In the early days, the joy of using your hands, getting results and that kind of led one thing to another. And then, um, I actually met George serendipitously 

Armon: Yeah. 

Souf: Waiting in line to get inside a museum and have this huge six four giant start talking to me and we hit it off.

He invited me to come do a rotation in his lab. Uh, proposed this idea of in vivo genome replacement, uh, um, from which we broke down into its sum of its various parts, and that's where I decided to work on controlled cell trafficking. 

Armon: Cool. 

And what made, what inspired you to go down the route of, uh, creating nucleate?

Like what problem were you trying to solve for? 

Souf: Well, you know, it started with, um. Spark of inspiration. My first lab meeting, uh, in George's lab actually was not a lab meeting at all. 

Armon: Mm-hmm. I 

Souf: was one of the [00:03:00] postdocs giving a practice pitch before going out and speaking with investors. Yeah. John. Oh, okay.

Simon, now, CEO of bios. I'd never seen anything like that before. Um, so went up to George, what the hell's going on here? Yeah. Um, what are all these words about the inflection use of proceeds, milestones? Um, and then, uh, you know, George is incredibly patient Yeah. With his time and talked about the culture of innovation, the strategy of company formation from the lab, um, and then from there on out.

Um. Got involved with the Harvard Biotech Club just to learn more about biotech. Yeah. I realized how much there was that I just didn't know, let alone, I didn't even know what it was that I didn't know. Yeah. About the ecosystem. So, you know, first things first, you know, we built. What is now nucleate formally activate as a means to learn about the process ourselves.

Yeah. Um, and then the second key thing was that going through this, uh, I underwent a pretty systematic research effort to understand what the needs of the community [00:04:00] were. Yeah. Uh, and scientists after scientists, after scientists would tell me, I think I have a body of research here that has value beyond the bench yet.

I don't know where to begin. I don't have the knowledge, the tools, the resources, the network. Um, and so all of that kind of came together. Um. With the opportunity to meet Mari, who was at the time an HBS student mm-hmm. We decided to team up and create a program that would help these individuals understand the viability of their research from a company formation potential.

So I'd say the large problem was, um, in part just a lack of resources that allowed people to just explore, um, their work through a different lens. Taking a step back, um, you know, on my first day of my PhD, our program director explicitly told us only one in 20 of you are going to become, uh, university faculty and professors.

The other 19 of you are losers. Better start looking for things now. Yeah. Um, [00:05:00] and so a little bit more. Broadly, you know, we really wanted to solve this problem of how to find meaning in one's career without wasting a tremendous amount of time. 

Armon: Yeah. 

Souf: Not that a postdoc, is that, I mean, yeah. Went 

Armon: through an incredible 

Souf: postdoc, and I think there few people would argue in saying that more scientific training.

Is a good thing. 

Armon: Yeah, yeah. 

Souf: But the opportunity cost that comes with that, you know, finishing your PhD around your thirties and then now you have to do 4, 8, 10 years, some of these postdocs nowadays. And that's not necessarily increasing your chances of landing a job, especially in today's market. 

Armon: Yeah. 

Souf: Um, well, you know, it's good to have options.

So a little bit more broadly, just give people meaning and give people options to what they're doing. And the path that we chose to drive forward for that was entrepreneurship. 

Armon: and just so you know, 

folks know what you guys have accomplished, like nucleate started in Harvard. How [00:06:00] many universities is that?

Like, is it at now around how many members do you guys have? We started in Harvard, uh, we built it out in Boston for the first three years to mm-hmm. 

Souf: Get that proof of concept if you'll, uh, one city grew to eight, eight, grew to 18. 18, grew to about 40 cities around the world, representing, um, I believe around 300, two to 300 universities.

I forget what the exact number is right now with, it's a good sign when you last count anywhere between 600 to a thousand. 

Armon: Very good. Uh, now I remember like you guys coming up, I'm like, damn, I wish this stuff was around when we were starting our old company. 

Souf: Well, it's funny that you're here asking me questions today because, you know, for the past eight years I've been coming to you for questions.

Armon: Gotta flip the table at some point. Uh, and when you got Nucle going versus now where you feel like you probably have a much better handle on how these ecosystems work, what are the things that were most different from what you expected, um, from when you got started? 

Souf: Well, I think. First Nucleate today [00:07:00] is a whole different organization.

Armon: Yeah. 

Souf: Um, than it, what it was eight years ago. You know, in our first year, second year, third year when we were just a Boston only program still operating within Harvard Biotech Club. Um, singular focus was identify brilliant innovators working on exciting science and helped them form companies. Yeah. As we've scaled in that core thesis.

You know, remained a focus in the early years of our expansion, but we very quickly, um, I don't know if realized is the right word. 

Armon: Yeah. 

Souf: Um. Came to a conclusion that starting companies is really, really difficult work. Um, even if you're in Boston and San Francisco. Um, and so as you're expanding to other ecosystems, especially emerging ecosystems, um, you start to get a better understanding of how you can deliver impact [00:08:00] Yeah.

Into an ecosystem. And that's not always by starting companies. And so what we learned through that expansion process and where Nucleate is today as an organization is really a focus around the people. 

Armon: Yeah. 

Souf: And specifically the people of tomorrow. 

Armon: Mm-hmm. 

Souf: Um, who are going to go into the industry. Maybe their first gig as a CEO, likely it's not.

Armon: Yeah. 

Souf: Um, but maybe it will be in five years, 10 years, 15 years, 20 years, or maybe it won't and that's perfectly okay. But we create this like really dynamic web of talent that gets to know each other. Um, and so we think that that's really exciting. Um, and that was probably the biggest learning from that expansion was to focus on the people rather than the companies, which are a byproduct of the work of the people.

Armon: And, and as you think about the people side of it, I mean, um, a lot of them are involved with nucleic 'cause they wanna start something. 

What have you seen as correlates of, [00:09:00] uh, you know, you can kind of tell this person's gonna probably make it or at least make it far enough, and then this other set is gonna fall on their face pretty quickly.

What do you think are the characteristics that stand out to you now that you've probably seen that movie many times? 

Souf: Yeah. I mean, I don't know that there is a hard and steadfast Yeah. Rule around this. You know? I think at the time that I was starting nucleate there was yourself that we could look to.

Yeah. Uh, Manny Simmons. Mm-hmm. Um. And then Herbert Boyer, right? Yeah. Uh, over generalizing. But there are very far and few examples of successful scientist founder entrepreneurs that were actively leading their companies. Yeah. Um, and it's a really hard thing to do. A lot of the pieces have to come together in the right time, in the right order, with the right resources.

I now, today. [00:10:00] We're seeing so many more examples of this, and that will only just further improve our ability to pull apart patterns and traits. And so some individuals, you can see it in them from the very beginning that, um, they're well suited for the role. 

Armon: Yeah. 

Souf: Um, of a founder, CEO. 

Armon: Yeah. 

Souf: Eric Kelsick is perhaps one of the best examples that comes to mind here.

Um, individuals like GL as well. Yeah. As Manifold Bio. Um, but I think a few unifying themes. Um, one is a deep focus in the work that they want to do, how they want to do it, and why it's creating value. Yeah. Regardless of what that business model looks like. Um, goes without saying that having just a deep world leading sophistication in the science that you're doing.

Armon: Yeah. 

Souf: [00:11:00] Like critical requirements. Um. And probably a third key one is just a willingness to learn. Yeah. And that can take a million different forms. Some people are more coachable, some people soak up knowledge, some people surround themselves with experience. Um, and then from there, personalities come in all shapes and sizes.

And so sometimes individuals that you might not have predicted. Would've made for great CEO or CSO, um, turn out to be. Um, and that's usually because there's incredible science behind what they're doing as a key requirement. 

Armon: Yeah. 

Souf: Um, and that, you know, other key pieces are coming together. So it's really hard.

I would say these are the exceptions to the rule. 

Armon: Yeah. 

Souf: Um, we all look at them and say like, this is what we wanna do. And it's easy to. Generalize [00:12:00] how frequent that actually happens in the ecosystem. So you said you hundred at this Most, um. And it's completely okay. Mm-hmm. Someone's not of a CEO of phenotype or a csso.

It's incredibly rare. Maybe you're gonna deliver a lot more impact in the company as head of platform or head of corporate development and get opportunity to learn, go through the motions, and then down the career do it again. 

Armon: What, what do you think has been the fastest way for those people who are better off as like PET of platform or CSO or whatever, to find that out for themselves?

Because I think a lot of times the. Nature of the ambitious scientists are like, oh, I could do the CEOs thing a lot. Especially 'cause you don't know what the hell you're getting yourself into. You're like, oh, I can do hard science. So like, managing people. Any ding Don can do that. Um, and they learn the hard way.

Oh, that's not true. Uh, like what, what do you think it often takes for them to realize? Like, maybe I should just be a cs? [00:13:00] 

Souf: Yeah. Or. Whatever role, right? 

Armon: Yeah. Or whatever role. 

Souf: Yeah, yeah, yeah. That's suited to do. Um, you know, I think we try to get people to think about this very early on at Nucleate. Yeah. Um, we have a lot of people come to us and say, I wanna be CEO, and yeah.

Um, usually that's the first opportunity where we can sit down and say, you know, being CEO. We're not saying it's not a career goal, but that shouldn't be the goal of the company. 

Armon: Yeah. 

Souf: Um, you should really think about how are you gonna build a successful company around this. Um, and two. How do I find a meaningful role for myself within this company according to what I like to do, what my skills are?

Um, and then you can start to pressure test that with openness. Um, in some situations, um, you're going to have to do everything yourself and take the title. And I think the reality of early stage companies is that [00:14:00] it's incredibly fluid. Maybe once you reach your seed or your A, now you start to think about bringing people in.

And so I don't know that there's any one given path, but to understand what that road to opportunity looks like within that road to opportunity, value, inflection, and. Moving the company forward. 

Armon: Yeah. 

Souf: Not just the technology, or not just the next round, but kind of really advancing it. And, um, at each successive step, kinda asking yourself what's in the best interest of the company?

What's in the best interest of myself and what does, what made sense six months ago makes sense today? Will that make sense, you know, in 18 months on the next round. 

Armon: Yeah. And, and obviously a lot of times. People are in kind of like little teams wanting to form something and those dynamics can get really drama worthy really fast.

Uh, what are the most common themes of why those dramas happen and like the ones that resolve it and make something good [00:15:00] of it? What did, what did they figure out? Yeah. Um. It can happen 

Souf: at so many levels. Yeah. Um, inter management team, uh, amongst founders, oftentimes between the PI and, you know, those that are still at the company 

Armon: mm-hmm.

Souf: Between investors and the teams, the board and the team. So, you know, conflicts can arise in like a variety. 

Armon: Well, I mean like the 

Souf: co-founding 

Armon: teams, 

Souf: primarily the co-founding, you know, area. And this is where I think Nucleate program really helps. Yeah. Um, for those who are looking to build companies and build companies together.

Yeah. So obviously having a long. Track record of having worked together, uh, de-risks a tremendous amount. Yeah. Um, even if you've been side by side in the lab for the past 2, 3, 5 years, you know, you've gone through things together. Yeah. And you're gonna have worked through [00:16:00] a lot of those challenges. Now those can take a very different form.

Um. Once, once you're at the company. 

Armon: Yeah. 

Souf: But at least for Nucleus program, you know, one of the core components is that we bring together scientists, business students, and clinicians. Mm-hmm. It's a non-binding collaborative, um, partnership. And on the back end of that, if they wanna continue working together, um, they can.

And so I think in those areas, having risk-free, huge upside opportunities to kind of stress test one another. Uh, is really important to kind of mitigating downstream conflicts. 

Armon: Yeah. 

Souf: Um, and then the other thing is just keeping an eye on like the professional goals here, you know? Um, and as those come up and disagreements come up on the business side of things, uh, resolve it in terms of what's best for the company, I would say, or risk shooting it down entirely.

Armon: Uh, yeah. And actually the pairings between MBAs and scientists, I feel like. [00:17:00] On pa. My guess is that on paper the assumption is often like the NBA walks in being like, I'm gonna be the CEO, and the scientist is presumed that they're gonna be the csso type, but that's not necessarily what happens, or those combos don't actually go the way people think they do is my limited observation.

But like what's been your view on that? Because, and I say like I feel like Harvard and MIT like fantasize about. Putting their B school and their grad schools together and having many magical babies come outta it. 

Souf: Yeah. That never used to be the case, by the way. When we started Nucleate, there was no collaboration amongst the two entities.

But in my experience, I've seen it, um, the other way around. Yeah. Um, and then obviously here we're talking within the scope of scientists, founders. Companies get started many, many other ways. In fact, that represents just a minority of the various mechanisms by which companies get started. Um, I've seen it the other way around actually.

It's the scientists who have been working on these projects for so, so long, uh, that tend to have, [00:18:00] you know. Huge degree of attachment. Mm-hmm. Um, to this that's backed by a tremendous amount of contributions and knowledge for sure. But as a result, I think what I've typically seen is that the scientists are kind of down that, you know, tunnel vision of CEO path, when oftentimes they would be much more fulfilled.

In other roles. Yeah. Um, and it can then get challenging to understand how to incorporate others on your team, especially when they're bringing complementary skill sets and maybe more skilled in an area than you, including fundraising. Yeah. Putting materials together and narrative telling. Yeah. Um, and so, you know, we've had a few teams that have figured this out along the way very effectively in Gel Therapeutics is one example.

Um, led by a team of scientists. Um. Pierre and, uh, Patrick, who's an HBS student. Yeah. Um, who as the company progressed, um, especially as it was [00:19:00] advancing into the clinic, um, you know, Patrick took over the rings and led over fundraising and started to drive things, um, forward. And that allowed then the scientists, founders, um, to.

Oversee the scientific development of things and so very natural in those cases. I don't know that we've seen any big divorces in nucleate when things have gotten super messy or maybe we just dunno about them. 

Armon: You guys are just great therapists. They wanna disappoint you, uh, and. I mean, one observation from the outside and I think it's become less true thanks to stuff like what you guys do, but I think it definitely used to be that biotech startups were almost, or biotech startups that were gonna get anywhere were almost exclusively the purview of like.

VCs decided to bless this thing is gonna happen. They brought in a suit from pharma to run it, and then that was the defaults. And there were like very few exceptions to that rule. It seems like it's gotten a little bit better, but it's still way more like that than let's [00:20:00] say tech would be. Sure. Um, you know, classic question of like, why do you think that is?

And if you don't think it should be that way, what are we gonna do about it? 

Souf: Well, I think it's, you know, as an industry. Um, much more, I don't know if technical is the right word, because tech is mm-hmm. Technical, no pun intended. Uh, but it's so specialized and I think the knowledge that's required, um, to advance a product to market looks substantially different.

Armon: Yeah. 

Souf: Those timelines are elongated, to say the least. Um. And are littered with challenges along the way. Some that can be learned, some that come up with just unpredictability of human biology. And so I think it's an industry where experience, um, endows [00:21:00] you with, um, a lot more, you know. Ability to do the job.

Yeah. Without making critical mistakes within a timeframe, um, that's needed to move to that next inflection point and the next one, and the next one and the next one. So you know it in all of this one, I think that is still the predominant way that biotech companies are formed. Yeah. Um, with these specialist firms who.

Have a very, you know, regimented view. On the product and on patient impact. What is the medicine we're gonna build that's gonna make lives better? And how do we structure the company in such a way that like we're moving towards that goal? Yeah, I mean, younger founders, um. It's, it's [00:22:00] so hard to generalize as well, right?

Um, but in so many cases, uh, you can get a little bit lost in the technology and the platform of what you're doing and kind of lose sight of what the ultimate goal is. Yeah. I think that's one like key distinction, um, that when you look at the output of if you were to bucket them across, you know, traditional versus kind of this, this newer age where.

There is a clear distinction. Now, obviously it's very early time. We will tell, we just don't have the data yet. Yeah. Because I would say this is a fairly new, uh, pattern of company formation that that's emerging. I think you were obviously at the forefront of that. Um, whereas we've seen thousands of, you know, traditionally formed biotech s Yeah.

Whether they come from academia, whether they're industry spin outs, or whether they're recycled assets. You know, companies come from any shapes and forms. Fundamentally, though I don't believe that it's a lack of [00:23:00] competency amongst the younger generation. These things can be learned. 

Armon: Yep. 

Souf: They're very difficult.

It takes a while to learn them, but they can be learned and there are a variety of mechanisms through which you can learn those things, even if you haven't done it before. So I think probably the two things that it are challenging. First time founders in this process is just one of efficiency. When you haven't done something before, it takes a little bit longer to figure things out.

Armon: Yeah. 

Souf: And sometimes time is not our friend in this process. Yes. If you're moving slower, you might run outta cash, you might get out competed. And that can be the difference between life or death with these biotech companies. Uh, and then the second might be just the rate of, um. Mistakes that are made naturally, humans make mistakes.

Uh, it's not that these, you know, 40 year industry veterans don't. Um, but I do think they have developed the pattern recognition ability [00:24:00] to avoid making critical mistakes to the companies. 

Armon: And some of 'em are good at pretending it 

Souf: wasn't their faults higher. 

Armon: When 

Souf: it does happen higher. You know, I, we could sit here and pick out dozens of companies that have made terrible decisions by these decades long, you know, entrepreneurs.

So, so again, I think it's hard to generalize. Um, yeah, that's an area where I think there's a benefit to having seen it many, many times and being able to avoid mistakes that are avoidable or that you've made before. 

Armon: Yeah. Yeah. And I think part of it. Is like you're saying, the timelines are long. It costs a lot more before you have a signal as to whether or not this is actually working, because I feel like in tech they can start commercializing quickly.

So you have a feedback loop that says like, Hey, it may be a child straight out of undergrad, but. Revenue is revenue and it seems to be working, so who cares? Yeah. 

Souf: Adoption, growth, revenue. Yeah. Very clear metrics that you can track on a 

Armon: Yeah. Whereas at 

Souf: our once a month, year by year [00:25:00] basis. 

Armon: Exactly. Whereas our world, it's like, oh, we gotta wait five, six years and then there may or may not be a trial, which may or may not work and it's got like a 90% failure rate anyway.

Souf: Yep. 

Armon: So what did it all ever mean? Um, 

Souf: definitely. And then the focus of a company also evolves in biotech, whereas in the early days you're doing a lot of platform development. Yeah. R and d um, enter the clinic. Now all of a sudden things look immensely different and Yeah. Um, might not enjoy that as much anymore.

So, uh, so many factors here, but, you know, be curious to hear your experience on this. 'cause you know, you took what was a very dynamic platform. Um, into multiple clinical stage assets. Yeah. Taking the company public, impacting patient health. So like you've gone through it, but you know, you're also one of those, you know, all in fully dedicated founders that had a deep belief in the science you wanted to do.

You were unapologetic about what that science needed to be [00:26:00] because you knew it was the right thing Yeah. To also impact patient health. 

Um, but you've gone through it. 

Armon: No, I, yeah. Um, I think. It's exactly what you said as far as you need to learn fast enough. It was probably one of the most critical things.

And I think one thing people don't necessarily appreciate is they may not like what the next version of them needs to be. 'cause initially when it's very like r and d science heavy, most PhDs are gonna love that anyway. But then when it gets, let's say a little bit more, um, I and d enabling and manufacturing heavy or clinical, like they may just straight up not like it.

Yeah. Uh, and so much more of their world becomes like finance questions, HR questions, all these other things. Because like when we were. I would say only 5% of my job was science. Uh, I would do the other 95% because I was like, this is what I need to do for the science part to happen, even though I don't get to scratch that itch day to day.

And I think a lot of people don't realize they're not gonna like those parts. Uh, and yeah, you gotta learn it fast enough. 

I think it's interesting on the time efficiency thing you mentioned, 'cause I do, I do think. [00:27:00] People like us are more prone to making stupid mistakes. But I actually think we do a lot of things faster 'cause we have this like extreme fire under us slash in us to do it.

So I think I've actually watched the, like more experienced people take the older, more conservative route. Whereas the newer generation find the shortcuts they would've never thought of taking 

Souf: Yep. 

Armon: Um, that actually end up being very beneficial. So it's kind of like a equation of, is your stupid mistake rate lower than your, um, smart shortcut rate?

And then does that make it work? Or they'll make decisions that are so intertwined between. Let's say understanding the business, the clinical and the science, which a more experienced pair of hands would've never made those connections. Um, so like the more unique case, specific problem solving is something that's way harder for them.

Yeah. And one of my pet theories is that it is that. Obviously I'm biased, but it is that more conservative culture in our space that has meant we [00:28:00] rarely ever have the huge runaway successes that tech has because it's not like healthcare is not important or isn't like a ginormous piece of GDP, uh, but I think you don't have the runaway successes because you don't have people that do that are enabled to do extra crazy things.

Now the flip is you don't have. Insane blowups that are as bad as what can happen in tech. Uh, which may or may not be a good thing because, you know, human health is at risk, uh, if you do make some of those mistakes. But I think people take less risk on the personnel side and it, you know, narrows the curve of what can, narrows the distribution of what can end up happening.

The extremely amazing outcomes won't happen or become very improbable, but also the most terrible outcomes are also improbable. Uh, so it's, 

Souf: yeah, I mean, on that front, I think we could count on two hands the number of companies that started off as biotech platforms that are now standalone revenue generating, right.

In some cases [00:29:00] profitable companies, 

Armon: right? 

Souf: Amongst the thousands and thousands that have been started. So 

Armon: yeah, 

Souf: uh, it's exceedingly rare. And part of that is the system, you know, structured towards m and a. Um, the other part is to that point, do we give this innovative science and platforms enough runway to really demonstrate all that it could do before it's forced to take a very focused lens on what it needs to do moving forward.

Yeah. Deprioritizing everything else in the process. Um. 

Armon: Yeah, 

Souf: and take a look what it can come out of. Great focus on platforms and manifold bio led by GL and peers, you know, are significantly moving the needle towards overcoming massive challenges in delivery, especially as it relates to BB, B. And there you have a couple of technical founders, um, sitting in, in the C-suite who are advancing, you know, frontier science in a very valuable way.

And hopefully the rest continues to move forward nicely as well. Exactly. 

one other 

Armon: experience that [00:30:00] you had that I thought was definitely interesting to talk about is, uh, you know, you've thought about spinning out something yourself, um, and I feel like you guys did something awesome with what you built at Nucleate.

And you were around all these people doing the spin outs, but then you worked on one yourself. What were the things that, despite having watched others go through it, when you had to do it yourself, you're like, oh shit, I didn't realize it was like this. 

Souf: Yeah, it's, it's a great question. Um, 

Armon: like what caught you by surprise?

Souf: You know, it's not the difficulty. We knew science is difficult. Yeah. Knew business is difficult. Um, we knew that operations is challenging. Cell therapies have a litany of, of, uh. All the way from the front end to the backend include pricing and reimbursement. Mm-hmm. Um, so that's stuff. We came in with an open, you know, mind.

We knew that there was gonna be challenges around building [00:31:00] this type of company. Uh, and again, this idea that we could control how cells move around the body and that we would identify the genes that influence, um, how we can get a cell to go from the blood into a organ of arch choice. Yeah. Specifically for engineered T cells to, to solid tumors.

Um. So I think, you know, within that process, probably as we started to ramp up and explore interest around, um, our work, um, the lack of candidness 

Armon: mm-hmm. 

Souf: Uh, that you get from the ecosystem was probably the one thing that, um, was pretty surprising. Yeah. I knew that I can go to RA Capital and. Crystal clear, candid response to, you know, why it's too risky or too early, or all of these things, but so many, you know, you speak within the community.

Don't wanna actually share what they're thinking for whatever [00:32:00] reason. I'm not going to, you know, presume to know what those are. 

Armon: Yeah. 

Souf: I think it's been well spoken about amongst, you know, VC blogs, um, but that doesn't help advance the community forward, right? Yeah, it just kind of leaves it in limbo. And that is also one of the key motivators for building nucleate is that you could get an answer in three months rather than.

Spinning your wheels for a year to two years. So I try to be candid myself now when I meet with entrepreneurs and um. It's not a personal attack, right? When you're giving constructive criticism and feedback on work. Um, so I've tried to incorporate that into my own being. And ultimately I think it benefits everyone to know, um, constructively like where things stand.

Armon: And, and because I'm cynical, like to dig on that problem 'cause ob because like we've both lived it, it's, you know, they're like, oh, sounds great. Like, okay, great. As in term sheet tomorrow, or, great as in you're gonna ghost. [00:33:00] And I, I would cynically say a lot of times they don't even know what they think.

Souf: Absolutely. 

Armon: They're just waiting to see what the momentum's gonna be on the deal where it's like. You come back tomorrow saying, oh, tippy top group X just sent us a term sheet. They're like, of course I'm in. I was always in like, why wouldn't I be in? I said five, I meant 10. Um, whereas if like they don't have that impulse later, and again, facts on the ground, science news, nothing else changed, then I'd be like, oh, maybe it's not a hard deal.

Maybe I don't mind do it. So how often do you think that's the real reason behind that lack of candor? Uh, you know, I, I 

Souf: think 

Armon: it happens 

Souf: more than we'd like. Yeah. Um, so diplomatic of you. That's good. In a perfect world, um, everyone would have candidness and everyone would have their own conviction around things, whether that's a yes or a [00:34:00] no.

Armon: Yep. 

Souf: Or we don't know, you know? Um, even, which is a fair 

Armon: answer 

Souf: too in that as, as well. And so I don't think there's enough people with, um, sufficient conviction behind their own thesis. 

Armon: Yeah. 

Souf: Um, and so the founders building companies, I think one of the most important things is to have someone backing you who has conviction.

In your work and in you, of course. Yeah. Um, I don't think it's good when it's either way too strongly, you know? Yeah. When things are getting funded just because of the person or when things are getting funded. Just because of the work. Because the work without the person won't work and the person without good work won't work either.

Yeah. But having that conviction and uh, on the flip side of things, you know, um, those. Times where it is while we're waiting to see, come back When you have a [00:35:00] lead. Yeah. Yeah. 

Armon: Um, 

Souf: which is basically, you know, is it going to be a reputable source that I feel comfortable following on with? Right, 

Armon: right. 

Souf: Um. Is, I think while you've seen so much fluctuation in the life sciences space and you know, a few years ago you looked at that ratio of generalists to specialists and it's clear that generalists were flooding in even maybe taking a predominant majority of those seed and, and a rounds.

Yeah. And now they're nowhere to be seen. Yeah. Striking. Um, so it does innovators no good either to not have that reliability to know where they can go for sources of support and funding. Now of course, macro markets change and opportunities change. Yeah. And AI certainly today is much more attractive than five years ago.

So. If you're a generalist fund and an LP thinking about where to deploy your cash, it's not clear that biotech is the reason. [00:36:00] So there are various other reasons for why generalists move in and out. Yeah. Um, but when they move in, 'cause everyone else is doing it and move out 'cause everyone else is moving out, um, that's a lot different than a generalist moving in 'cause they have a deep conviction in what biology can do.

Uh, and there are some phenomenal generalists, investors, right? Yeah. That are investing in life sciences companies. That have really strong track records and are staying put within the space, I think we do need more of that to kind of balance things out. 

Armon: Yeah, no, no, that makes sense. 

And be, uh, because you were in like one of the even more infrequent situations of scaling a nonprofit, like what was that experience like?

How would you compare it to what you would observe as far as people doing normal startups? 

Souf: Uh, yeah. I mean, it serves an entirely different mandate. Yeah, right. Um, the way that you're going to be evaluated is not gonna come from your. [00:37:00] Profits or your returns on investments that you're creating. It's on this ambiguous, abstract term that we call impact.

Yeah. Um, that ideally is strong and stable and held together by a strong mission and strong values, um, and a good strategy for the organization. Um, as a result of that, it means that there's no. You know, clear charted, standardized path for how a nonprofit is established and how it grows and how it evolves.

You can look to, you know, comparables. Um, so within that process, there's just so much. Bureaucracy and operations and administrative stuff, legal stuff that, you know, when Oliver and I first decided to incorporate it, you know, we looked at each other, said, this is gonna be easy. And I think, you know, we sat down today and asked ourselves like, what is, was it easy, you know, far from it.

Yeah. It was [00:38:00] incredibly rewarding and incredibly fun throughout that journey. Um, but it, it's much different and you constantly have to ask yourself, um. Are we serving our shareholders effectively and the shareholders of the community that you're providing these nonprofit services for? Yeah. So it's really important to kind of constantly, um, you know, check yourself and that's what led to us kind of evolving our mission away from company formation.

So we're gonna support talent. 

Armon: Yeah. That makes sense. And related to supporting talent, I mean, are there things that you think, um, PhD programs in general or, or the academic ecosystem, so whether it's the PhD program or how the technology, uh, transfer offices work, et cetera, that could be significantly improved on, that would be much more enabling of the right stuff, getting out there and making it.[00:39:00] 

Souf: Yeah. These, these are all, uh, very distinct entities. Yeah, yeah, yeah. Within that group, um, where to start, you know, tech transfer offices, um. I personally only had positive experiences mm-hmm. Um, with them. Um, and I personally, you know, try to view them as a force multiplier Mm. In what you're doing. Um, it's not to say that once it's time to spin your technology out, you're not going to enter tough negotiations.

Yeah. Um. You are, and for good reasons, there's value to create on both sides. But guess what? You're gonna be entering in tough negotiations for the rest of you know, that trajectory. That's the job that you're signing up for your existence. 

Armon: Yeah. 

Souf: You know, um, I, and it can maybe be challenging 'cause you're part of the same system, so you kind of there, but it's part of it and I think come up with good terms and maintain good relationships.

Um. [00:40:00] It's only gonna serve, I think, better on On the backend. Yeah. That's effective. But my observation is most of them are short staffed. Um mm-hmm. And so that, uh, 

Armon: yeah. The caseload, some of them handle is ridiculous. 

Souf: It's huge. Um, and so they can't get to everything and that was one of the key inspirations for building nucleate.

Yeah. You know, um, and especially the, these offices that also serve business development functions or bringing in sponsored research grants. Yep. Thinking about out licensing. So it's a very complete kind of package to, to go through. And, um, then the university is, is really thinking about, you know. How are we gonna create value for ourselves?

And so if you're a founder, it's developed work for 10 years, uh, you're like, of course I have rights to this work. University has, um, a mandate to assist, to think and at least consider the option of, is there gonna be a avail, greater value capture from licensing to a pharma versus, you know, giving it to this founder, starting a company.

It's part of the process. I don't think people should take it personal. Yeah. Ready [00:41:00] to enter in tough negotiations, respectfully with an open mind and, uh, potentially be willing to concede on some things on the backend as any good negotiations. Yeah. So, uh, you know, I love, I know there's a whole community that loves to just bash on TTOs and sure many of them have some good reasons to, to do so.

Oh. 'cause there are some horror stories, but overall I think, you know, it serves a necessary function. And I think from my experience with Nucleate, having seen this at a global scale, I've actually grown a lot of appreciation for the US uh, tech transfer service. 

Armon: I mean, we had a really good experience MIT too.

Yeah. Like I know a lot of people complain about a lot of places, but like I was like, I liked the TLO. 

Souf: Yeah, yeah. 

Armon: Absolutely. They were one of the easier parties we ever dealt with, uh, on, on that front. 

So thinking about all the ecosystems that you guys are starting to get.

Have, um, established chapters in for nucleate, what do you see? It may be kind of obvious, but what, what feels like the biggest differences between, let's say, being in Boston or the Bay Area [00:42:00] for doing a biotech startup versus pick city X, which is not an ecosystem like that. Yeah. You know, I think this is one that over the 

Souf: years, um.

In my mind, the gap has only widened. And I don't think that's, um, in reflection of what these ecosystems are doing, more so than just my own understanding and evolution of. The company formation process, um, where, like we were saying alone, it's hard enough to start a company in Boston Yeah. Or San Francisco.

Um, for a million reasons and even more so for the types of scientist, founders that we're talking about today. Yeah. Um. Which everyone should explore that journey, right? And that's why Nucleate Ex exists. And that exploration, um, we'll give you some good light on whether [00:43:00] you should do it now or maybe never, or maybe in five years or 10 years, right?

Yeah. Like the exploration really important. The commitment, um, gotta take an open look. So, you know, that's, um, true of regardless of, of where you are now, I think. Outside of those areas, and again, you can come up with examples of very successful companies. 

Armon: Yeah. 

Souf: Getting started. Um, there is a big disconnect between, um, the innovation outputs of these ecosystems.

That is what's coming out of these university ecosystems specifically get start companies.

That spread is much lower than if you look at the spread of the company specifically. I think for those reasons, and I don't think there's a single reason why, uh, you know. More traction. [00:44:00] Um, and that tends to grow at an increasing pace. So, you know, Boston and San Francisco continues to accelerate in its output, its quality, um, and that continues to.

Create a gap, just like the person who works 12 hours a day versus eight hours a day, it's gonna compound. Yeah. Um, it's not just the productivity, it's the learnings, it's the traction, it's like everything. So I think that's one key component. Um, another one is available resources. 

Armon: Mm-hmm. 

Souf: Um, and these could be a variety of different things from a community lab space, capital talent is a huge, huge one.

Uh, that continues to create those gaps. And so it's, um, probably much bigger the gap than I think we'd like it to be in that, um, also ready to admit. Um, that being said, and I've gotten to do a lot of traveling through [00:45:00] nucleate. Um, you know, when I'm going to places like New York 

Armon: mm-hmm. 

Souf: And San Diego and London and the UK more generally.

It's very clear that there is like a incredibly strong dynamic ecosystem here, um, that will continue to grow, deliver, impact, incubate incredible companies and talent. So it is happening, but it, it, it takes time, you know? And, um. Everyone looks, looks at Boston as, as a leading example. And that took decades and decades and decades.

You know, look back at the history of Mass Bio and recombinant technologies. Yeah. And all of the things that had to come together to create those communities. Um, so it, it will take time. Um, and then I think you can't get away from the conversation around, um. The innovation advantages that are coming up in Asia, especially in China right now.

I think there's so much uncertainty into what that looks [00:46:00] like in five years, 10 years, 20 years. What does that mean for us, eco US innovation that's, uh, unquestionably leading the world right now. What does that mean for European, European innovation that's accelerating and yeah. Wants to, you know, continue that trajectory.

And so it'll be really interesting and, you know, we should chat again in 20 years and see whether San Francisco and Boston or, or still those, those hubs. And in my opinion, yes, I'm like. Proud American. Yeah. I think we have so much going for us here in, in the us um, really thinking about how to accomplish that collaboratively, um, rather than a zero sum game.

Armon: Yeah. Well if we find ways to grow the pie, then I think that can definitely happen. If we don't, you're doing it with portal right now. There you go. We're gonna grow 

Souf: to balance. 

Armon: Uh, alright. And, and then actually, uh, for the last few, like slightly spicy questions. When you've seen technology spin out where you're like, that's dumb, but it spun out [00:47:00] anyway and got like at least a big bolus of initial funding.

Souf: Yeah. 

Armon: What do you think is the reason that happens? Uh. 

Souf: You 

know, 

Armon: and you're not the only one that thinks it's dumb, like others that also have a valid opinion. Like that's really stupid. But it just got a hundred million for sure. 

Souf: And first, I'll say to close out that last segment, you know, especially for anyone listening in emerging ecosystems, 

Armon: yes.

Souf: You know, like the challenges in bottlenecks in these ecosystems should not be a deterrent. Yeah. To the goals and ambitions. I think they are factors to consider into decision making. And as, uh, you know, an executive of a company, you have the responsibility to do what's best and what's right for the company.

And so you have to take these things into consideration. Um. That's not taking away from these ecosystems. It's not taking away from the excitement. Um, it's just pointing out that, you know, things are different. Yes. Um, [00:48:00] now, you know what's dumb, what's not dumb is very subjective. Yeah. Uh, you know, so what might be dumb to me might be brilliant to someone else.

And what might be brilliant to me might be dumb to, to.

When we see these, they got that big mega 

Armon: and they crashed and burned, and you're like, I called this miles away. 

Souf: Yeah. It, I always wonder, um, what is it that I don't know? 

Armon: Yeah. 

Souf: Behind these things and so often. These big things are released with so limited information. Yeah. Um, so I try not to read too much into it.

Um, one 'cause I have zero skin in the game. Yeah. Um, behind these things. It's, you know, it's not impacting my life on, on a day to day [00:49:00] if it works. Great. Sounds interesting. If it doesn't, I hope they've learned their lessons, so I, I don't have a particular, you know, take on that. Yeah. Um, and that's a little bit different than, you know, these huge mega rounds that you see, um, being done by an incredibly impressive individual where you don't have much information.

Yeah. Maybe they have something special. And, and then of course there's these big mega rounds that are done behind really interesting scientific concepts that sound incredibly risky. 

Armon: Yeah. 

Souf: Um, and so, you know, dumbs a little bit hard to quantify and characterize. Um, there they're, when you see them crash and burn, um, you know, part of it, I think.

You never like to see [00:50:00] failures. 

Armon: Yeah, yeah. 

Souf: Period. Um, but it just, I think Recentralize and Recontextualizes, the very discussion we were having earlier, which is, you know. Failures happen for a variety of reasons, whether young or old. And the number of examples where companies backed by just ridiculous sums of money, um, have crashed and burned while led by world class executives.

Um, and someone should do the math around how many of these are, um, is not infrequent. 

Armon: Yeah. 

Souf: Um. Um, yet we don't talk about those as much as we do, as you know. Uh, who gave, who, what idea gave this first time founder like this much money. Right? Yeah. Yeah. Um, so again, there's so many factors from the people to the science to, to the plan.

Uh, but yeah, it's always interesting. 

Armon: Yeah. All right, last question. If you had a magic wand, you could wave to change one thing about. The ecosystem, whether it's on the [00:51:00] academic side, funding side, whatever it may be. What would you, what would you fix? A magic wand? Very magical. Whatever you want. 

Souf: Yeah. I mean, if we could compress, uh, the entire product roadmap from 10 to 15 years to one year.

Uh, that would be the first wand I wave. All right. Uh, if we could reduce the cost of advancing a product all the way through the clinic by TEDx, I'd wave that wand 

Armon: right. 

Souf: Um, right away without introducing additional risk. Um, yeah, of course. And, um, you know, if those wave of companies that are coming up right now that are.

Increasing efficiency, reducing costs. We've heard this story a million times. I know. Um, like would like to see those start to make more material traction and start to actually implement the kind of change 

Armon: Yeah. 

Souf: In the world that they're looking to drive. And I think once we start to see the first truly successful examples of, you know.[00:52:00] 

Companies, especially AI driven companies that are accelerating timelines or materially decreasing costs, and not just on the very first phase of, you know, development, but the whole cycle. Um, I think we'll start to see, um, huge returns from that. And as a result, uh, I think those are in part outside regulatory, you know, policy changes, the kinds of improvements that we can drive to kind of start to compete on a more global scale.

Armon: Sounds good. Thank you, sir.