December 20, 2022
Rick LeMoine: [00:00:00] Well today on Day Zero, it is my great pleasure to introduce Gene Dantsker. Gene is currently the president and COO of EvoNexus. Gene, welcome And why don’t you start by telling us a little or a lot about your back.
Gene Dantsker, Ph.D.: Thank you Rick. Great to be here. You wanna begin this story all the way there? So, I was born in key of Ukraine back when I was still part of the Soviet Union. . I came to the US when I was 10 years old and grew up outside of Washington, DC in Maryland. Went to college there, studying physics at the University of Maryland, and then moved out west for graduate school to do, continue to do physics studies at uc, Berkeley. While I was at Berkeley my area was experimental applied. What I particularly enjoyed in that process is discovering oftentimes experimentally some interesting phenomenon of nature and then if you will, throwing a harness on it [00:01:00] and turning it into something useful. Utilizing it in areas that may have been surprising or not used up until then. And that was actually my first brush with healthcare or medical devices. Cuz prior to that I had no life sciences training. So, my area specifically was a chip called a superconducting quantum interference device, or squid, which is a highly quantum oriented phenomenon. Hard to understand with undergraduate physics, that sort of thing, but if you poke it and do just the right things to it at the right temperatures and so on, it becomes the world’s most sensitive detector of magnetic fields. So my thesis project, amongst other things included utilizing this device in a suitable. To measure magnetic fields of a patient’s heart or a patient’s brain. I’ve done many other things since then. This is just a little emblematic of that. So I did a molecular diagnostics company. I went back to my physics days and did a quantum computing company. I served on various boards and an advisory boards of [00:02:00] companies of over time. And then I also had a couple of stints working for big companies where I basically brought my sort of, if you will, entrepreneurial spirit into them.
Rick LeMoine: Tell us a little more about EvoNexus. Before we get into kind of more details of you specifically.
Gene Dantsker, Ph.D.: Gladly. So EvoNexus is the startup incubator that I currently helped run, but I was a volunteer with this incubator for close to a decade prior to this. Now volunteer is an important word because EvoNexus is a nonprofit startup technology incubator. Started by Rory Moore, Admiral Walter Davis. Back in the back around the time when there was kind of an economic downturn and a lot of venture capital became harder and harder to obtain, and the founders of actually just noticed that having a startup. Have the right kind of mentorship, the right kind of advice, the right kind of home really helps ’em avoid a lot of the avoidable mistakes and [00:03:00] missteps along the way. Over the last 12 years, even access has incubated over 260 startup companies, mostly technology, some not. Those were. Out of about four to 5,000 applicants. So because all this is free, we have the ability to be a little bit selective, maybe a lot selective but our selectivity has resulted in good things because out of those 260 startups that have gone through E one access, over 85% raised capital very successfully, the total amount of capital that they raised to date is about 1.6 to 1.7 billion. And in addition to that, we had 41 exits today, 41 acquisitions, total exit value, about 2.1 billion. So if we were a venture fund, we’d be a good one in terms of being able to pick winners and As a result of that many VCs up to about 400 of different investment groups have invested in even access companies over the years simply because they know that we take these companies through [00:04:00] quite a bit of a set of hurdles, not just getting in, but also mentoring them, applying all the all the expertise that we can muster. And incidentally, that expertise comes from all of our volunteers. We have about 80 of them. And these are volunteers who themselves are either current or former, highly experienced, entre.
Rick LeMoine: So EvoNexus is in some ways a unicorn when it comes to this. Do you specialize in any particular areas?
Gene Dantsker, Ph.D.: So thanks for calling it a unicorn. I think we are unique in a couple of ways. Like I said, we are a nonprofit. The people who work here and the people who volunteer basically do it for the love of the game, and also they do it just for the elegance of it all. If there’s a startup that’s maybe struggling a little bit or about to have a misstep it’s very satisfying to help him out. You know, even if that’s your only compensation, just knowing that, I think that’s a very important desire that I found myself and many others. As far as the kinds of technology kind of businesses that we [00:05:00] tend to accept, I like to think of ourselves as the real deal Smart money incubator. Because the people who work here, they are not simply administrators who simply, who, you know, bring companies in and then throw parties for them. We take extremely deep dives into what the companies do. Many of our volunteers, many of our staffers in principle, could step into the shoes of one of the C-Suite people, you know, executives of the startup. And of course, we deeply understand what they’re doing. And the. Technologically speaking because again, we have the expertise, we have the, a background like mine is pretty typical of a deep access volunteer, I should say. So, as a result of that, we tend to attract a fair share, a very large share of companies, startups that are doing something pretty extraordinary, pretty difficult.
Rick LeMoine: So is MedTech part of your kind of special.
Gene Dantsker, Ph.D.: Very much so. So, we roughly speaking, subdivide the incubator into what we would call MedTech FinTech, and the rest is kind of [00:06:00] telecom tech or 5g iot, you know, telecommunications, semiconductors, microchips, that sort of thing. And many companies fall. In more than one category and some fall a little bit outside of those. We have quite a few SaaS companies, cybersecurity companies so we don’t get too hung up on labels, but MedTech for certain is a big component of of our success. In fact, like I said, our biggest exits today, in fact, our two or three biggest exits today have been in MedTech.
Rick LeMoine: Well, so speaking of exits, what’s different about today than, say, five years ago? For startups and for EvoNexus?
Gene Dantsker, Ph.D.: So a lot of these types of acquisitions Are becoming targeted by a lot of startups these days as opposed to being treated as kind of a consolation prize. What we really wanna do is go public and so on. Ultimately, I think startup founders want to solve a, an important problem or set of problems in the industry. And while there are a few of these unicorns who are solving problems [00:07:00] that we didn’t, real didn’t realize, Or even there, or problems that no one else is working on. Most of the time they’re kind of looking for a way into the larger, you know, stream of these problem solvers and become relevant players and then sort of join them and participate. And that’s particularly true in, in, in MedTech or I would say all kinds of life sciences companies. You know, it’s, it’ll be a while before another Medtronic or another Pfizer is. But many startups are working on de-risking cutting edge opportunities that those bigger companies would ultimately like to incorporate into their workflow.
Rick LeMoine: do you think this is a good time or a bad time for healthcare startup?
Gene Dantsker, Ph.D.: I think this is actually a good time for startups in general right now, as opposed to maybe even as, as recently as six months ago now year and a half ago. There was a lot of funding going on. It was a lot easier to raise capital and happened to, in the early days of Covid when we all thought that capital would dry out like [00:08:00] it did 12 years ago. And innovation was. Slow down, but that actually wasn’t the case. Capital did not dry out. There was plenty of capital and a lot of startups were getting funded, including many that. were probably overvalued and many that may maybe should not have been funded quite as cavalierly and so on. So I think we’ve kind of gone through that cycle. Google was very successful because they really accelerated right after the.com bust. And they were able to hire a lot of good people and also buy up a lot of equipment, a lot of back in. Then in those days there was no cloud computing, so they had to use physical servers, so they bought pennies on a dollar, all kinds of things. So these kinds of industrial, these things happen so quickly, and these kinds of industrial slowdowns create a plethora of resources both in, in, in the form of founders and in the people they will.
Rick LeMoine: Speaking of hiring, tell me. What EvoNexus looks [00:09:00] for in terms of diversity, which is kind of a hot word these days.
Gene Dantsker, Ph.D.: Yeah. Yeah. Let’s just focus on healthcare or med tech. Just for argument’s sake, because I think that’s a very important topic. You know, it is often said that the mother is the chief medical officer of the family. And throwing these kinds of phrases around are interesting. We’ve been doing it over the years, but if you kind of take a business approach to this, you kinda realize. There’s a market out there and in the world of healthcare, in the world of MedTech. And if you look at the strategic plans of even the bigger companies out there, they’re always going after a very diverse set of markets. And one has to know those markets in order to go after them. . So, for example, if you talk about areas like you know, pre-diabetes, hypertension, whether you’re doing therapeutics or diagnostics, whether you’re doing some kind of remote patient monitoring or telemedicine that benefits maybe sick family members, sick kids, and so on. Everything I’m speaking [00:10:00] resonates as much as, if not a lot more with historically underrepresented. Women, minorities younger people, older people, tho those are the, you know, a healthy, you know, maybe I’m getting in trouble, but, you know, a healthy white male is not the biggest market for these areas. And therefore I think a lot of founder teams that I’ve seen oftentimes resonate well with investors because they have kind of a visceral comprehension. Of the markets they’re going after. So it’s definitely a plus. It’s a benefit for startups to have diverse teams that really benefits their mission
Rick LeMoine: what kind of advice do you give to first timers? I know that first timers are not necessarily your kind of target. Audience at EvoNexus, but I’m sure you’re approached by a lot of folks who are anxious to, you know, get a business or an idea off the ground. What do you tell ’em as, as [00:11:00] cheap free advice?
Gene Dantsker, Ph.D.: First timers, what do we say to them? Do your homework. Definitely understand your market. Understand the business environment you’re embarking on. Things like competitive environment, financial environment, regulatory environment. Be a hustler in general. Be ready to pivot. Maybe your initial idea that you build your business around is not your. Maybe all of that idea, all that it did was give you enough insight into the markets that you were pursuing, and you discovered a new market and therefore a new product that fits that market. So you gotta be, you know, that you gotta be able to get the plan B The doing the homework part is very important because investors have become very savvy, especially in, and it’s including in things like net tech and FinTech, you know, hard stuff. Don’t bring in you know, sometimes in people like myself, cause I sometimes do this as a consultant into diligence and they will ask them deep questions about what’s unique about your business. What, tell me about, I’m aware of the last seven [00:12:00] business that tried to do the same thing. You better be aware of them too and talk about how you differentiate it from those and you know, be a hustler, but don’t hustle me. You know, that sort of thing. Be prepared for that. And we actually take companies through a series of pitch scrubs when they get ready to to meet with investors and we introduce ’em to investors subsequent to that. But we take to pitch crops, both involving our staff, our volunteers, mentors outside people and so on. And we give ’em basically, Multiple meetings still with stuff Love, so that they’re ready for anything out there. If they’re extremely early, just thinking about a business idea, something like, I sometimes talk to student groups who simply say, you know, I wanna be a business person. I want to be a, I wanna be an entrepreneur. You know what, you know, I have some things that I’ve worked on, but I, but where do I get started? Say you know, gimme advice. Decide on whether it’s something you wanna pursue, you know, full barrel, or you have other priorities. Maybe you wanna be a professor and have something on other side, you know, that sort of thing. Do you have the right team? That’s extremely important. Do you have [00:13:00] a team? I found like the best, my best point of success in my career, the things I’m most proud of is becoming part of the right team or bringing the right team around myself. It’s incredible how much value that creates, and it’s often underrated.
Rick LeMoine: Gene, what areas of healthcare do you think are either ripe for disruption and therefore invention or look attractive to you as somebody who. Who is going to receive you know, like the next tranche of entrepreneurs.
Gene Dantsker, Ph.D.: Yeah. To take out of a broader view, I would say that, you know, there’s kind of a, if you boil healthcare down to its most foundational problem is, you know, if, how do you dag, how do you do diagnoses that are based on all the necessary data that lead to definitive and ambiguous treatments.
Rick LeMoine: Well, delay in diagnosis is one of the biggest sources of medical error. That there
Gene Dantsker, Ph.D.: [00:14:00] Absolutely. Yes. And it’s underappreciated, so, so like I said, you know, so having the right diagnosis at the right time with all the right modalities, nothing being left out correctly, and And comprehensively. Then you gotta run all of that. Let’s say you collect all the right all the right raw data, if you will, about a patient or about a group of patients. Then you gotta run it through some kind of an engine, which oftentimes is just the brain of the clinician. But these days, more and more tools are being applied, and how do you go from there to a definitive, unambiguous recommendation that creates clinical. For the patient or group of patients down the road. That’s the most founda fundamental way I can describe the healthcare problem. Now, within that, there’s a lot to unpack and there’s a lot of opportunities there. So for example all the right diagnosis, maybe there is, there are certain ailments, certain pathologies that are still very difficult to diagnose in time, to your point, right. And you know, or diagnosed in a way that could be acted upon, [00:15:00] you know, something that’s prescriptive in its nature. Obviously there’s always room for new therapies, you know, that’s why, you know, drug companies exist and that’s why, you know, some a alternatives are out there. But I think there’s kind of a and of course healthcare, by the way, is becoming obviously very value driven, a very outcomes based. So there’s a FinTech component to it as well, which, you know, various organizations, including yours. Have gone through. I’m well aware and we’re working together at that time. There’s a lot of decentralization in where care is delivered. I think Covid finally made telemedicine, you know, kind of seeing a doctor the way I’m seeing you right now, finally made it a, you know, very common place and not just a stop gap as it turned out, but a really valuable. For, you know, for the markets, for the community. And with that much decentralization, you might as well do two things that I like to talk about, which is personalization and data capture. So personalization, you know, has to do with how do you personalize you know, a and medical interaction between the patient and the healthcare industry. As [00:16:00] I’m going that broad right now, something, you know, I’m a, I’m not a phenotype. I’m a very specific expression. Of that, you know, of my you know, of my, of myself. Yeah. So there’s that. As people sometimes say, I’m not a statistic, don’t talk to me about that. Yeah. So that’s that. And the other one is data captures. So if you will, let’s say, you know, you and I are interacting, let’s say you’re my doctor. We’re doing things. There’s a lot in this interaction. That’s everything in this interaction by the way, is already digital. So everything can be captured and it will be captured, it’s gonna be recorded, it’s gonna be transmitted, but also, There are opportunities for digitizing, not just our fun little chat here, but everything else that’s going on. You know, the way I look, the way I say, capture some of the keywords you know, flag for counter-indicated you know, con therapies, things like that.
Rick LeMoine: Yeah. You know, I always remember in medical school, I think you go to law school to learn how to think. You go to medical school to learn how to remember and learn pattern recognition and [00:17:00] you know, it is it. It astounds me that more attention hasn’t been paid to these large language modules that can understand the meaning of the words that are spoken and put that together and then recognize the pattern. You know, 80% of the time when a doctor takes a. The diagnosis should be obvious, or after a history is taken, 80% of the diagnosis should be obvious. And man, it’s I’m always flabbergasted that there has not been more development around this because as I mentioned earlier, delay in the definitive diagnosis is one of the chief causes of medical.
Gene Dantsker, Ph.D.: Yep. Completely agree. I, there’s more and more of it happening. My only caution to everyone embarking on this is make sure that your solution is comprehensive enough to [00:18:00] constitute an an offering. that’s in demand. An offering that can be acquired at a low cost of acquisition. Other words, they’re just paying for the offering and Right, and immediately seeing some kind of a return on investments in that as opposed to acquire the offering and have to do, incur a lot more costs when it comes to integration into workflows.
Rick LeMoine: Gene, this has been a fabulous conversation. Thank you so much for your time today. What kind of lasting comments do you wanna leave our audience with?
Gene Dantsker, Ph.D.: Get the right team together. It’s infinitely better to do with a co-founder. It’s great to be able to do it with the right initial sort of critical mass of resources that not to sound like commercial, but the right kind of mentorship I’m not gonna say it’s instrumental, but it certainly saves you a lot of time, which is instrumental for you and your investors and for any limited resource that you have to apply to your business. So having the right mentorship and having the right. Sort of alignment with the markets that [00:19:00] you’re ultimately trying to penetrate, disrupt, augment, and so on, is incredibly important and is also undervalued. So, get out there, start companies, but those resources are there for you, including an organization such as ours at Lexus.
Rick LeMoine: Gene, thanks very much. Appreciate it a lot personally, and I’m sure our listeners do as well. And see you at the next EvoNexus meeting.
Gene Dantsker, Ph.D.: Looking forward to it. Rick, thank you so much.
Rick LeMoine: Bye-bye. Thank you.