331. This PhD became a 3x founder with exits w/ Vivian Chan

0:00Hi, I am Vivian Chan. I currently sit on boards of deep tech and health tech companies and I have a lot of fun actually helping them really become the one in 10 companies that actually make it.

0:11Amardeep Parmar:So you say the one in 10, right? What's behind that? Is it particularly bad in deep tech companies? No. So I think the stat is that a lot of people talk about this, that only one in 10 startups make it. Right. And often there's a lot of support in the ecosystem about how you actually start from zero to one. So how you get your first ideas, your first fundraise, your first clients and sales. But then actually once you've got some traction and some revenue and your raise, then there's actually not a lot of support on teaching you how you actually exit. And that's through my own experience of being a VC first, investing in life sciences business, spinning off from universities in Australia, came over to Cambridge to do my PhD in biochemistry.

0:59and then I built two businesses out of the back of that. And the first one being a PhD in postdoc network, exited that one in six years. And then on the back of that also built an AI company to summarize cutting edge research, was CEO for that for 11 years and took that to the States. But through the two companies, I actually realized that we were spinning a lot and that there is no structure once you've actually gotten to those one. and there is actually from what I've now learned there are operating systems the operating system that gets you from zero to one is a different operating system to actually help you exit and so that's when I started to realize that the same mistakes I was making are the same mistakes that I'm seeing over and over with the founders that I'm now working with so now I've set up my business, mainly to really help with founders become the one in 10.

1:55And so I think there is quite a lot of mindset shift, as well as an operating system that really helps you really determine whether or not you're going to actually be compounding assets or just building revenue, but actually stalling and spinning.

2:10Amardeep Parmar:Interesting too, right? In startup space, people get the initial success. And from the outside, when you're looking in, you don't really know things are actually going well right yes somebody can raise the first round it gets series a series b but the company can be kind of stalling behind the scenes yes and i think a lot of people get to that stage where there's this really weird like paradox between everyone externally is like oh you're doing so well congratulations whereas you know internally everything is kind of a bit messed up right yeah and like did you get to that stage of one of your companies and like what did you do about it so i feel like especially with the way that the media portrays startups, they very much glorify all the success stories.

2:49There's a lot more normalization now where a lot of founders actually talk about how hard it is to actually get those wins. But for every win, there's probably nine losses. And that roller coaster, yes, it's a startup pace, but it also means that a roller coaster of up and downs is also accelerated. One of my mentors has said like if you spend one year in startup I don't know is it really accurate or not she said it's

3:15Amardeep Parmar:about seven years in the corporate because it's the white hairs that coming in now yeah yeah here but everything in terms of all of kind of like you know how you say that the ducks are paddling right they look very graceful at the top but they're really paddling really hard underneath and that's what it's like to be an entrepreneur and a founder for a sustained period of time And what you often don't see is just because someone's fundraised, it doesn't mean that that is a great milestone that the company is doing well. The definition of a business is that it's profitable. But often because of the fundraising, now a lot of the founders I see are reaching for fundraising as a milestone to show that that's the achievement of a company.

4:02but then once you've got the fundraising now you've got other stakeholders to actually account for but then you're starting to actually go well how do we actually generate revenue even once you get to revenue the companies I actually get to see is that they actually stall they hit the first one to five million and then they can't actually progress and that's because they were very reactive they've been reacting to whoever gives them money to whoever gives them sales and they actually haven't been compounding assets towards a successful destination. And the main thing, the main clarity that I think I got, especially in my second company, working with some of the best US mentors and board advisors was clearly that, was really have clarity on what the end goal is.

4:49Not just the vision and mission, and that happens to be a lot with the deep tech and the health tech founders that I work with. They're very passionate about how many lives are changing, where the technology is going to change the world, which is great. But if you've got clarity on the vision, you also need clarity on the commercials to get you there. And if you don't have the clarity, someone else on your cap table will define that for you. And that misalignment, you'll wake up and find that you're going to start building someone else's business. And that's where burnout happens.

5:23Amardeep Parmar:So me and Mecca find together we're going for this right now in terms of we're shifting our model again because we looked at it where we've got like a pretty decent revenue for like a small business, right? But then we looked at it like we've now got such high commitments to the stakeholders, which isn't really why we started the company in the first place. And it's about, in a way, we're intentionally saying no to some revenue more now because we want to decrease that so we can focus elsewhere. And obviously we've got a VC fund coming right so a VC fund longer term is much more income but if you keep chasing the short-term income it's actually making that long-term income harder yes and it's that conflict that we're looking at now like actually we need to say no to somebody now so that we can actually get the longer term more profitable money yep and like in your first company like did you have that transition like when was the first thing that's kind of really hit hard for you and what did you do I feel like you're still spot on right having that clarity that you and the co-founder have right now is so smart and i don't know if that was that like externally like where did that come from it was just the amount of hours we were working so probably i would say march to june i probably work 100 hour weeks every week right yeah like i'm tired of that i don't need working that much anymore yeah exactly so it's like we it's kind of that forcing we need to change something care because this isn't what we want to be doing yeah that which is brilliant because i think once is founder-led and you actually want to crave for that clarity, you often do get clearer definitions of what success looks like from a mission standpoint, but also from a commercial exit standpoint.

6:58And if you actually sit, this is one of the first things I love doing, which is actually forcing the co-founders to sit together and write out their exit vision statement. Because even if you both say you want to exit and it's the same we want to be sold to someone else right but i've often found that the different assumptions behind an m &a or an ipo are completely different and if you catch that early years and years beforehand that's often where you're going to actually compress the timeline and get you there faster rather than what we ended up doing which is oh, hang on a second. No, we're going to pivot.

7:38And then we were pivoting. Hang on a second. That's not going to be long term. Right. But that is the normal way of building a startup, because a lot of mentors just teach you to build from the ground up. Right. Have a problem, build from there and then react and then adapt, react and adapt. That is part of being flexible and adaptable of being a startup. But just like you're going on a road trip, you need to have a destination. Like you're literally saying, I'm going to go to an amazing road trip. I built this amazing vehicle. Come join me for this road trip, whether this is investors, whether you're team members.

8:12They're like, great, where are we going? Don't know. The road trip to Australia is a very, very different road trip to just driving to France, right? And aligning those expectations are very, very different. The first business was four PhD students. So we were just very happy just to be building a company and learning as we go. The second company, and that was foodstrapped, the second company, we took money. So we took VC money. We also had angels, also have family offices. And that was where the complexity of the different stakeholders came through. Because we weren't clear where our end goal was, and how we were going to get there, and how every decision that we were making today compounds towards that.

8:57Then they were like, well, if you're not deciding then I'm going to decide for you um and that was when you're assigned to go hang on a second I'm working 100 hours that was in the second company we literally ended up selling first to b2b farmer because the the the board was like um I've got made GSK and we ended up doing that um and making sales fix five six figures but that was really hard work because there was me flying all around the world, but also because the sales cycles in pharma are really long. They're like 18 to 24 months, very long B2B sales cycle. And we're on a startup runway. The two things don't add up maths wise, but no one in my board mentioned that.

9:47And we were just working ridiculous hours to try to compensate in bringing revenue. And then that was where my first financial advisor, one of my angel investors who were like, why don't you talk to Jim? and Jim came in American, but very entrepreneurial. And he was like, how does the mess add up? So this is where the beginnings of that external mentorship really helped to kind of give me clarity of stepping outside of working in the business, but looking at what's working on the business and also working out of the business. And they're all very different. And he was starting to go, well, this isn't going to be a long-term thing.

10:27and I was like yeah well I never I didn't start my business to sell into pharma that wasn't what I had planned to do and so that was the first pausing point but I felt like that's kind of where we have external experience people come in and kind of sense check now once once I started to get other another guy also called Kevin who was very instrumental in terms of how I started thinking in terms of especially the shift so when i talked about mindset there is a distinct shift in how you kind of transition from being a scientist or phd into being a founder and then being a founder to being an early stage ceo and then being a scale ceo that actually exits Those are very distinct stages and they require different mindsets and thinking and then therefore the operating system.

11:23Because if you don't grow as fast as the company grows, then often you get replaced or you choose to step down. right? But in this case, I think where we're starting to actually have more external kind of questions, where I started to pause and think about the strategy was also when I started to think about actually utilising my board as an asset and an extension of my team, not just people who I report to.

11:55Amardeep Parmar:You mentioned the first company had four PhD students, right? Yeah. So that first transition from PhD student to founder how is that for you and then how do you now help other people who are going for that same transition themselves so that's a great question actually I was very fortunate at Cambridge Cambridge was a very entrepreneurial ecosystem so I because of my VC background there was a student organization called Q-Tech there was a couple of different entrepreneurial organization at Cambridge but one of them that I got involved in was called Q-Tech they were like join you have your VC background etc at that point I think I already realized that I didn't want to stay in academia so one of my kind of life values is to make an impact but also to keep learning so that's quite why I came over to Cambridge the office in both Cambridge and Oxford and I ended up doing a PhD in x-ray crystallography so I thought that was where I was gonna to make impact.

12:56And I soon realized that I don't want to stay in academia. I saw how sad my PI was. His happiest moments was when he was actually in the lab. But when he was outside of the lab, he wasn't the happiest person. But he was such a lovely man. But I just realized that academia wasn't my calling. So I naturally fell into Q-Tech. And Q-Tech was kind of created in conjunction with our sister at university, MIT. So they had brought over this understanding of actually you build a student organization of like a company. So I ended up being in the content team. There was five different teams, exec layer and a CEO.

13:40I ended up being voted in in my third year PhD as a CEO. And I ended up having to learn how to run a whole entire company, was about 50 PhDs and postdocs who were not being paid. So I also had to learn how to motivate and actually deliver projects. And our biggest event was a massive conference using intrinsic motivation and ended up having to delegate, learn about management skills and learn about time management, project management, deliverables. We also had sponsors, so we had to go out and actually negotiate with the companies around the Cambridge ecosystem. So that was where I ended up having a lot of really interesting skill sets.

14:29So what I did learn was that the transition of being a scientist where you are absolutely trying to, you have a hypothesis and you are relentless at trying to find the answer to your hypothesis. and it's got to be crystal clear and you've got to dig really, really, really deep. It's the complete opposite as a founder. You can't afford to only build, build, build, build, build and not be aware of what the commercial implications are. And often when I talk to a lot of the technical companies or technical founders spinning out or starting out from research, they're obsessing around the academic problem but not the commercial problem.

15:13And if you build the world-class solution for a technical solution that doesn't have a problem to solve, you just built a really expensive toy. And often they build nice-to-haves rather than must-haves. But obviously there are some that actually, like especially some of the biotechs and the therapeutics, they're very clear because it's very like we need to go through preclinical and clinical drugs. And that becomes super easy. And their exits often tend to be M &A by biotechs and pharma. But there is a lot of other companies in the space where they have to figure out what the commercial problem is, not just the academic problem.

15:54And as a founder, you're completely thrown into fail, fail, fail very fast. So you don't have time to answer all your questions, but you have to make assumptions and be comfortable making assumptions. and then going out there and actually confidently pitching it, which to a scientist, it's like the complete opposite. But when I then translate it and say, why don't you treat every market research, pitch, fundraising as just experiment and you have a hypothesis and all you're trying to do is collect data, then they go, oh, OK, that makes sense. Then I actually feel scientists are very good executioners and can be great founders if they've been translated that way.

16:40But then from a founder perspective, just because you're a founder doesn't make you a good CEO. And having the CEO skill sets means that you also need to understand, well, once you build a company, you've got many different hats. You're a director, fiduciary duties, you're a CEO, stakeholder duties as well. And then you also tend to be the leader, which is very different to being a manager. And understanding all of those nuances, sometimes you get caught where I want to tell my team, but my lawyers have told me I can't and I have to tell my stakeholders first. And the founder in me goes, oh, that's conflicting.

17:20And I have to go and share with my investors first before I can even tell my team members, even though they're going to be most impacted. So it's many of those kind of complex situations that you can only learn through experience rather than textbook.

17:36Amardeep Parmar:Hello, hello. I hope you've enjoyed the show so far. I'm Amadeek Parma, co-founder of BayHQ and the host of this show. For those of you who don't know, BayHQ is the community for high growth Asian heritage founders and investors in the UK. Over 7 ,500 people have attended our events, 200 people have been for our impact programs, and obviously there's been over 250 episodes of this podcast. If you want to join us and take part in the programs and come to the events, go to behihq.com forward slash join. We also just released our first ever book called Startups for Outsiders, which you can get on Amazon now and the link is in the bio.

18:17Amardeep Parmar:Hope to see you soon at our event. Hope you enjoy the rest of the episode. So speaking about textbooks and students, obviously the audience don't know this, right, but we've got a few students watching today who are on our You Starzots program. So if you were like pre-uni and you're now thinking about like the path you've taken through life and all the different things you've done, what would you do if you had the knowledge you have today, but you're a 17-year-old? What would you tell that 17-year-old to do? What would you encourage them to do if maybe someday they want to start their own company?

18:47Oh, that's a great question. If you're even curious of starting your own company, I think my advice is just to go out there and try it if you go out there and try it as early as you can and this is why I think like there are kids who sell lemonade on the street right just to yes understand the financial accounting part of it but some parents are very entrepreneurial and I think being able to be exposed to understanding how what what decisions you have to make what questions you have to think about uh what kind of um uh hours you need to be considering and how much emotions you will be your identity will be tied to it are things that i think i wish i had learned a lot earlier so some of the mistakes and i've made a lot a lot of mistakes to the point that the second company i was so i was working ridiculous hours um and i was also kind of really burnt out because it wasn't aligned with what I built the business for.

19:54Inflammation, the body knows, right? Just because you're continuing, your body holds trauma and trauma turns into inflammation. And that's where a lot of the chronic diseases happen. I ended up getting lupus and because that was because I was not looking after myself and I was just 100 miles an hour. But that was a calling point. But then some of my other peers ended up having heart attacks. Some had more severe health issues. And that was when we collectively realised that there's something wrong here. But also that we have to pause. And the other thing that I would advise is if you are curious about entrepreneurship, definitely have work-life balance.

20:39because you can't just afford to work and not have a life because then you also won't have your health to actually run the business. And so I think that is quite important to be thinking about early on.

20:52Amardeep Parmar:On that last part as well. So for many people, when you're starting at the beginning and like the work-life balance side, how do you kind of get that at the start? Because when you're trying to like establish yourself, that's oftentimes when people work the hardest. And I think for myself, like I thought like, okay, you work hard for a couple of years and then you start to balance things out. But I think it keeps from working hard, right? It's like trying to understand. I try and now do it in seasons in a way, right? So I know that March, June, I knew it was going to be busy. But then July and August, I'm going to say, ignore everybody and just chill out and spend time with family and friends.

21:23Amardeep Parmar:And I try and work in that kind of seasonal way. But then I'm still constantly adjusting about what's the right way of doing it, what's not the right way as well. And how did you find the balance that works for you? So I think in hindsight, in hindsight, hindsight is such a beautiful thing. And this is why I apply it to now my third business, clarity. So the more clarity you have, which is hard, especially when you first start out. But if your clarity is like, I want to actually IPO this business or I want to change the world versus I want to be my own business owner. Sorry, be my own boss versus I actually just want to have a good life for my family versus I want to go.

22:07retire by 30 in the beach. They're all different things and they're all different metrics. And if you can define which one you're starting at for and hold on to the why, then the why is going to help you filter your day-to-day decisions. And so whenever it's like, do I really need to answer this email now? Most of the time it's no. So I actually turn off all work notifications off my phone. I only have one phone but I actually don't have work notifications because I realized how stressful it was. So I intentionally choose my hours, I intentionally choose when I log in and then when I log in is when I actually you know approach every single problem.

22:50The other thing that I realized was yes there is seasons and peaks and troughs but every single day there needs to be some work-life balance. Otherwise, I think that was what the sustained burnout and sustained inflammation that my body was trying to tell me. So I ended up having to pause. I started to do a lot more internal work. So meditation, yoga, I actually started to do a lot more just physical exercise because a lot of the times the emotions and someone recently taught me this, which I I thought it was a really fresh way of framing it. Emotions is energy in motion. And you're meant to experience it.

23:35And you also are able to shift it by physically going out and doing exercise or going for a walk. And that's often why you might have better ideas when you're out in nature and going for a walk. Or Silicon Valley investors like to have big pitch when they're walking around outdoors. There is a thesis behind that. And I think it's important that because you're so plugged in, and especially in the early years, it's all about firefighting, and you're so reactive, your body's adrenaline is always on. And if you don't know how to switch that off, you can't rest. You might get six hours of rest. You might feel rested.

24:16But if you sustain that over a year period, your body has realized that actually it's not quality sleep. you'll realize you're making really poor CEO decisions and I had that there was a moment in my second company where me and this co-founder realized we were not the right fit but he was also a really dear friend and still is a dear friend but I didn't sleep for a month because I was stressed in the anticipation of having the conversation we're trying to work it all out in left right and center trying to problem solve to make it work for him and him as well but clearly it wasn't working for the both of us and our bodies really held on to that but because I couldn't switch off I couldn't stop thinking I was actually making worse decisions as the month went by to the point that there was consequences for the other parts of the business but once the once we had a chat and realized we were on the same page, the relief, you know, the exhaustion.

25:23So nowadays it is much more how do I approach, I say no a lot more, like you, like you. I have very core values of my own core values and the business's values. Like the first one's like be authentic. But the second one's like have fun. So with this company now, it's like my fun playground. so if I feel like it's not fun I'm just gonna say no and protect your time you said about like the

25:49Amardeep Parmar:emotion side there as well and obviously getting the kind of information the diagnosis you can now kind of talk about in hindsight but at the time that must have been quite hit to you right and to then go and start another company after that it's kind of like an interesting decision too right so how did you get to that phase you're like okay obviously being a founder has done this to me and you could kind of pick an easy life or do something whatever yes then be like I want to do this again how is that thought process and the emotions you're going through at that point great question um I still question myself to this day um but I think once you've been bitten by the bug like once you're an entrepreneur you're an entrepreneur um so going back into when I first realized I had or I didn't realize it was lupus um but it was inflammation uh it was itchy I ignored it I ignored it just because I was like whatever I didn't look after my health and I was just like I didn't even have lunch breaks my my PA was just like I need to put in lunch in your calendar otherwise you won't have lunch breaks um and people were just I just continued working but I literally just went, okay, I'm going to go and get a biopsy and then go straight to an investor meeting.

27:13I didn't actually stop to think what a biopsy was. A biopsy on my scalp was a minor surgery. And only until I went to the biopsy and then I got off the chair because I had anesthesia but I couldn't feel a thing, but the lesion was on my head, I got up and I turned around and I realized how much blood was on the chair was when I kind of hit me. I'm like, hang on a second. What just happened there? I think I didn't even switch off. Like during the biopsy, I was probably thinking about work and that was ridiculous. But you're right. In hindsight, I didn't think anything. I just like just slotted that in just like a meeting.

27:56And then I just slotted back out and I had a lunch meeting.