The Most Undervalued Skill in Deep Tech - Management | Chris Perkins PhD

In The Deep Tech Leaders Podcast, serial entrepreneur Chris Perkins discusses the most undervalued skill in Deep Tech – management. Listen as he reveals lessons from his journey through two successful exits, sharing insights on market alignment, team culture, and effective leadership. Perfect for Deep Tech founders looking to scale their innovations and maximise success.

Chapter Notes:

00:00 The Importance of Good Management
01:13 Introduction to the Lab to Market Leadership Podcast
01:41 Meet Chris Perkins: A Serial Entrepreneur
04:17 The Role of Luck and Strategy in Success
05:33 Understanding Customer Problems
07:28 Challenges for Academics in Startups
10:47 Case Study: Dropworks and Digital PCR
12:59 Lessons from Copernican Energy
14:31 The Transition from Scientist to Manager
26:08 Building a Structured Development Process
30:12 The Value of Middle Management
38:43 Advice for Aspiring Entrepreneurs
45:42 Conclusion and Final Thoughts

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Transcript

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Chris Perkins: 0:00

That's one of the core lessons. that I think I've learned over the years is how important, um, good management is, not just senior management, but middle management as well. And I think that's something that when you look going lab to market, a lot of technical people really undervalue how important people are, who are really good at hearing people, you know, organizing people, but aren't necessarily going to be people that are your mathematical or your physical superstars, you know, and we tend to undervalue people who are just middle managers. But in reality, that skill set, and it is a skill set that has to be trained. Of understanding, you know, how to communicate with, you know, people, you know, how, how to get them to set goals and understand how those goals link to the larger goals of the organization, how to make sure they have what they need and speak up through what they need and to take ownership of what they're doing. Man, finding good, strong, you know, management early on, uh, is the, is really a key to success in scaling a company from your first five people to 40 or 50 people.

Chris Reichhelm: 1:13

Welcome to the Lab to Market Leadership podcast. Too many advanced science and engineering companies fail to deliver their innovations from the lab to the market. We're on a mission to change that. My name is Chris Reichhelm, and I'm the founder and CEO of Deep Tech Leaders. Each week we speak with With some of the world's leading entrepreneurs, investors, corporates, and policy makers about what it takes to succeed on the lab to market journey. Join us. Most entrepreneurs dream of getting their exit. Today's guest has had two and what's more, they've been in completely different sectors. How's that for unusual? His first was in energy. His PCR and diagnostics, medical diagnostics. Today, I'm talking to Chris Perkins, an American entrepreneur who has a chemical engineering background and was able to build his first energy company, Copernican Energy, that he later sold to Sundrop Fuels, again out of Colorado, and his second as founder and CEO of Dropworks, a digital PCR, medical diagnostics business, that he sold to Bio-Rad for$125 milion dollars How does one become a founder and CEO of a biofuels company, and then a medical diagnostic company, and have success, not be considered completely crazy, but actually had success and delivered real value. Either he is the luckiest guy in the world, or he has figured out a system building these companies of figuring out the right kinds of problems to solve. of guiding his development and engineering teams of getting to a certain level of product market fit becoming interesting enough where the market takes notice and has to acquire what he's got. This is what I want to figure out today. I hope you enjoy it. Let's get into it. Chris Perkins, thank you so much for joining me.

Chris Perkins: 3:22

Oh, it's great to be here, Chris. Thanks for having me on.

Chris Reichhelm: 3:26

You've had two exits, one in energy and the other in medical diagnostics. And you've made very good money from each of these transactions. And that represents the goal for so many entrepreneurs in one way. It's not the whole goal, but it represents a goal for many. And you're still relatively young. And so as you reflect on your, on your success, and it is success. How much do you attribute to luck, and how much do you attribute to something that you've figured out already, that the rest of us are still grappling with?

Chris Perkins: 4:17

Obviously, you know, you have to attribute a lot to luck, you know, again, being in the right place at the right time, uh, meeting the right people, you know, um, having, you know, the right conversation at, at, uh, a conference, whether it be JPM or any of the other financing conferences, all of those things matter, you know, um, but, you know, to get to the other side of the question, is there something that I've figured out that, you know, that most other people are struggling with? I, I don't think so. I think, um, it's, it's more comes down to, you know, is there something that I've been willing to accept? Which is that I don't know the answer going in, that my idea of what my company is, you know, when I'm trying to start a company, is it the idea I'm going to end up with? And that's something that we all kind of are feeling around, but I think a lot of founders, Get wedded to, I've got to have the best idea and that's the idea I've got to come up with that's going to disrupt this market or save the world or have this huge impact. And instead say, wait, I'm in this to have an impact. I'm in this to solve somebody else's problem. You know, and the only way to get there is to go talk to those people. And, and really, instead of talking to those people, listen to those people and be really curious about What are they dealing with every day? What are the problems they wake up and think about every day? And oftentimes those problems, you don't have anything to do with what the technology you have in your lab is and what it could solve. And then, you know, you think about, well, is there something we could change that would help solve this problem? Or do I need to move on and find a different set of customers that might have something that's, that there, there's an overlap between problems they have and problems I can solve. And I think, you know, this is not. You know, some revelation coming down from the mountain top. I mean, Steve Blake has been talking about this lean startup process for years. Um, but I think it's tough to do, uh, because it really requires, you know, something that people who are really ambitious and into starting startup companies, you know, struggle with, which is they've always been the people who have had the answers, you know, and now you have to let go of your ego a little bit and dereligious because the answers aren't you know, in your head, they belong to the people whose problems you're trying to solve. And, and when you get to that, then it gets to the, you know, the whole underlying idea of why you're trying to start a startup. You know, if you're trying to do it because you want to make a lot of money, there are easier ways to do that. You know, go get into finance or something. You know, you're really into it because you want to have an impact. And, and then you start to think about, well, who am I serving? And, you know, what kind of impact am I trying to have? And then you start to put the focus on, on the people and on listening. And that's where you uncover, you know, what the, you know, the, the, the, the problem is that you might be able to develop a solution for

Chris Reichhelm: 7:22

Is that a challenge. That's a great answer, by the way. Is that challenge greater for academics or for researchers or technology innovators where the love of the technology and often, you know, the birth of the company revolves around their development of an initial idea or a platform, which then often they try to back into as, as a solution to a problem?

Chris Perkins: 7:52

Yeah, Chris, I think that's, that's two, there's the answer that it's twofold. Uh, yes, for, for these two reasons. Um, the first is that the kind of questions that academics, you know, ask, you know, that, that are important to answer in academia, questions around how the world works from a basic level, you know, are very different than the kind of questions you have to ask when you're trying to bring a product to market and find a product to market fit, you're less interested about fundamentally how a certain material works or, you know, you know, what's going on, you know, in a biological system. You have to be interested in, well, why does this tool not work well for somebody in the life sciences and what would change their day? You know, what would change their lives, uh, on a day to day basis? Um, if, if it were different and oftentimes that doesn't take a huge technological solution. It takes a little bit of additional technology, integration of a lot of existing technologies. And you know, oftentimes it's not as interesting for academics because of the way as academics were trained to think, you know, and that doesn't mean that the questions that academics ask are any less value. That's why, you know, we really want the government to pay for lots of research and to drive those things. Cause those basic science. Innovations form the foundations for what will eventually become technology companies. But, um, those technology companies in the startup phase need to ask different kinds of questions. Um, you know, questions around what are market need, what, what, what is good enough? I think that is a really difficult question for academics to ask because, you know, oftentimes they want to understand things at a much deeper level or a much more. You know, interesting, you know, uh, scientific level than what is required to actually solve the problem. Um, the, the second piece of this and the reason why I think some academics struggle making that transition is oftentimes there are people who have, who have always been really strong individual contributors. And so they've always been the people whom everybody, you know, from the moment they were in, in school, they were always the one leading the groups and, and solving the problems and coming up with the answers. And then now that has continued, they have developed a technology, you know, with, you know, in, in tall capital letters. And, uh, it's difficult then when you get to the market and the market says, well, We don't need 99 percent of your technology, you know, but there might be one thing that works. It's difficult for folks to let go of that idea and say, okay, well, I'm willing to put the rest of that on the shelf and go bring the piece to the market that is actually valuable to the people out there doing that. A good example of this was at Dropworks. Like at Dropworks, um, we had a technology, I don't know, Um, that I, that came out of Arizona State University, and the entire idea of this technology, um, when it was developed, it was a digital PCR technology that was fully automated, like, you know, to get a sample, to purify the sample, to then analyze the sample, um, and deliver an answer, you know, required no human input, because it was designed to go on this miniature submarine and test, you know, the, the bacteria out in the ocean. You know, and, you know, when we started to look into the market for ocean going bacterial, uh, analysis and assaying subs, it was a small market. Um, but it turned out that, like, there was a market for digital PCR tools where people were really frustrated with the workflow of what existed. You know, there were some really groundbreaking technologies that come into the market and establish that market, but now people wanted things to be as simple as what they're used to using. with, you know, the real time PCR that preceded that. And so when we started to ask, it was like, well, we started to pull off pieces of the machine that had been developed, you know, to the point where it was like 10 percent of what it was. And had we not been able to do that, we wouldn't have been able to really pivot into the direction that the company ended up being, you know, required for, which was to solve a problem that most life science researchers would have, you know, versus this problem that there was very small slice and required a very complicated technical solution that was very creative, um, but didn't bring a lot of value. You know, all of those automation steps only mattered to a small number of chunks. Um, and, and so, So, being able to step away from that, um, is something that I think a lot of academics struggle with because, you know, they, they have imagined in their mind how valuable everything can be, uh, to, to the world. And they're very good at convincing not just other people, but themselves of, of how valuable that can be.

Chris Reichhelm: 12:51

How much of a challenge was that for you with Copernican Energy?

Chris Perkins: 12:57

Oh, uh, so Copernican Energy was, you know, it's a good example of not knowing what you're getting into. You know, I was, um, I, I went to graduate school because I wanted to work on, you know, that, you know. The energy problem in Joe, renewable energy. It was, you know, 2001 when I was applying for grad school, started in 2002. And so I worked at hydrogen and, you know, concentrate solar energy and biomass and, and a variety of things. We started that company, uh, because we thought we were going to change the world. We're going to make gasoline for everybody from solar energy and biomass. And. And there was a lot of, I think, optimism behind that. What I would say, you know, we did wrong there is first of all, we didn't talk to a single customer. We just, you know, looked up, you know, what the price of gasoline was. Uh, and, um, and it was a time of a lot of excitement. If you think back to like 2008, when we got acquired, it was You know, oil was 140 a barrel, you know, natural gas was four or five times as expensive as it is now. And so there was a whole lot of enthusiasm for things moving into the space. I think one of the things, it was not hard for us to say, well, we should, you know, do exactly this technology or versus this technology. But I think, um, it, it was really hard for me transitioning from there into Sundrop Fuels to let go of. You know, some of the core pieces of the tech and that transition for me as a, as a, going from a scientist to, uh, you know, because at Copernicus, you're a small company, like I was CTO, but it was, I was really the only person doing technical work for a while. It was tough to then be managing people and realize I didn't have to be the one to come up with the solutions. You know, I had to be the one to hire the people and empower the people to do that. And it didn't have to be the thing we had promised to the venture capitalists at the beginning. You know, that we're going to use this kind of technology. In that case, it was like this concentrating solar system at very high temperatures that we could have pivoted into other spaces using pieces of our technology to get where we needed to be. And, uh, at some point, you know, the, the image, uh, the vision of what we were trying to do and the amount of money we had raised made it very difficult for us to turn that ship at all. You know, it was like, we are either going to become, you know, a The Exxon of renewable energy or, or we're gonna, you know, really struggle to get where, you know, we're going. And in the end, that's kind of what happened. But, um, less out of a technical failure, even though we tried to solve a huge number of technical challenges all at once, uh, and, and, and more out of, you know, we had gotten, you know wedded to a really huge vision, and those are difficult places for startup companies to be. I mean, you know, when you're trying to invent new materials of construction, at the same time that you're trying to solve how you get a huge amount of biomass into one space in one time, or you're trying to solve how you're going to get the market to accept this, and where you, all those considerations all at once, that's a very tough place for a small company of 24 people to be successful. Yeah, and we had a lot of really smart, talented people working really, really hard, um, but one of the things I took from that was like, startup companies, you know, really need to be focused on a problem that's, that's achievable right in front of their faces so that they can grow to get to a point that they can start to tackle those bigger problems.

Chris Reichhelm: 16:41

Yeah, yeah, I get that. You, um, this switch in mindset that you talk about. Between academia and the love of that initial platform development, the focus on that because of the desire to understand the way the world works, the way particular materials work, the way, you know, the way a particular platform behaves and the mindset required to go into a company where you may be required to pick that apart, to, to strip it down and to rebuild it. Are we talking about two different people?

Chris Perkins: 17:16

I think, um, yes, is, is the answer to that question. It can be a person, but that person's got to change over, over time to get to there. And oftentimes you see, you know, uh, a model where a postdoc or graduate student of a PI in a lab is, is the person that goes on and takes that, that, uh, challenge forward, because the PI has got a lot of responsibilities and they're still interested in doing your university job. I think that model can work, um, provided that, uh, person moving into the business side of things understands what they're getting into. Um, I think a lot of times it is somebody commercializing their graduate research that they did under that PI and then they, they still envision their job as being the core technical person. But then they also imagine themselves running this company. And I think we do, there's a popular image of the startup founder as sort of this Tony Stark type person who's, you know, who's not just, you know, really capable and really successful, but like the technical genius who's going to solve every problem in the world. And that is not how it works. You know, and a lot of times when I mentor startup founders, And, and they want to be the CEO, but they also want to drive all the technology at home. You know, one of the questions I asked was like, imagine you're climbing a mountain. You know, are you the person on the summit day leading that summit team and getting to the top of the mountain? Are you the person in base camp, you know, organizing all the supplies and, you know, radioing up there and making sure, you know, and, and oftentimes you'll hear, you know, They, they really, they, they know the answer that, that you, they think you want , which is like Basecamp person. Uh, but they really, they really wanna be the person on the top of the mountain, which is okay, you know, because they need to then realize that's who they are. If they don't wanna let go of that technical piece, then let's go find somebody. Who understands how to do, you know, I actually hate the words of the business side of things. It's actually who understands how to run the search. You know, how do you go and find out the idea? Cause the real trick is the CEO isn't the base camp manager either. They're the person back in the home country who figured out which mountain you were supposed to climb and recruited the team and got all the supplies together. And, you know, you're really talking about a CTO when you're talking about the person in Basecamp, because they're not doing those day to day technical discoveries either. And, you know, I had to remind myself of this, you know, every time that, you know, at Dropworks, we were a couple of people to start. And so, yeah, I mean, there were days, as CEO, you know, that I was writing, you know, microcontroller code, and I was, You know, soldering electrical boards, and I was putting together tubing and, uh, things like that, because that's what you have to do sometimes for a short period of time when you're small and you don't have any money. Um, but you know, when we were 40 people, I had to remind myself when there was an interesting technical discussion going on in a room that they didn't need me. They didn't need me to do that. They needed me to go find them more people to help. You know, drive their technical, you know, progress forward. And, um, it's really hard when you're a scientist, yeah, to, to, to do that. So, um, you know, I, I think it's, it's, uh, the core problem is asking, having somebody who's coming out of academia, ask themselves, What do they see themselves doing at the company that they envision start? And if it is, I am going to develop the technology, that's great, but you need the rest of the team. And you need somebody in particular, who's skilled and figuring out what problem you're going to solve, and that really just means dropping your ego, uh, and going and listening to people and being really curious about what their problems are that have been set. In the back of your mind, you understand what the technology can do, and you're connecting the dots. But, uh, being able to do that is the most important skill, uh, in figuring and getting a startup off the ground. Everything else, raising money, um, you know, recruiting a team, you know, uh, getting market traction and, and then eventually getting to exit flows from that piece.

Chris Reichhelm: 21:47

How did you guys handle that? How did you figure out that early phase? Cause you're absolutely right. If you want to get on the right trajectory, you've got to, you've got to solve for this early on. How did you guys figure it out? What were the lessons you learned through that process?

Chris Perkins: 22:05

Uh, at Copernican, I did, you know, and, and we got really lucky. What I did, you know, after that is I called, um, you know, 40, 50 different customers within the first, you know, three or four weeks in a space I knew really nothing about, you know, it was like, I didn't, I knew what DNA was and that was about as far as, as anything I knew in the life science. And so I had always been on the physical side. Um, you know, and people would ask, well, you know, how did you get to know people so quickly? And I, I really think it was, I had, I had some friends who were in that space. And so they made some introductions, but I just asked really naive questions. And when I would email people, I would take Steve Blank's advice. You know, and make sure they know you're not selling them, that you really want to understand their problem. I'm here to listen to you, and people really like to talk about their problems, and so it didn't take all that long, you know, to start to get to know a few of the people, you know, in the space that this could apply to, and I talked to Environmental sampling people first, and that didn't, that was sort of a dead end. And then I talked to folks in that, um, food safety business and, you know, understood that they had had, you know, their problem was solved by a different, you know, method and then into industrial biotechnology and finally into life science tools. You know, with an initial idea that we're going to do diagnostics, and then we realized how challenging it would be to get out of the ground, we just focused on research first. And as we talked to people there, okay, well, we found not just research at large, but a couple of spaces that there was a core problem. You know, um, you know, that we could really focus on and solve a workflow problem, you know, for G-therapy and, uh, a cost problem for, um, uh, for some of the high throughput applications there. And so, uh, the way we did that is I just cold emailed folks, and then after I, you know, got a couple of conversations, I always would ask two questions at the end. You know, the first is, what haven't I asked you that you think I should know? And then the second is, who should I talk to next? And on average, every touch point would yield two, two touch points. Yeah. And so you can think of that branching out pretty quickly. Um, you know, and before we knew it, you know, we knew a whole lot of people, uh, that had, uh, experience in the space or that were working in the space we were working in. And I think that approach works no matter what, no matter what field you're in. I'm on the board of a company right now that's working in the, um, Uh, uh, pharmaceutical tools space. And they're doing the same thing. They have a bunch of customers, but they're reaching out and they're asking questions, you know, we have anything to sell you, but right now we want to understand what the problem is and then they can, you know, pivot into understanding. Do they have something there that they can, that they can sell to these people?

Chris Reichhelm: 25:12

Converting that insight that you're, that you're gathering from these calls and then converting that into activity. within the business. Can you kind of walk us through what that meant? At Dropworks, how did that impact what people were doing? And I guess the second question on top of that, what was the way of, you know, what was the development methodology? Were you guys operating lean and agile? Can you do that in such an environment where it's so multidisciplinary, it's so multidisciplinary, it's so precise? I mean, these sorts of tools are very, very precise. It's not, you know, it's not software. So, so can you walk us through a little bit about the conversion of insight into activity and then the way you went about building out what I'm guessing were prototypes and maybe early pilots?

Chris Perkins: 26:07

Yeah, I mean, your first step, you know, when you, when you start to hear what customer are you telling you, you're getting all this relatively unstructured information, right? And you're trying to see where it overlaps to a specific need, you know, that's got to translate into, you know, uh, requirements, a set of requirements for what, you know, what is, you know, in some of the lean startup parlance, the minimally viable product. But that really just means it's like. You know, this thing only needs these two things to be better. You know, you know, these two features, you know, it's like if, um, yeah, for us at Dropworks, it was, you know, the, everything had to be same, the same as the existing real time PCR machines. Um, and the workflow had to be same, which was different than in a, in a digital PCR machine, which had like three or four more steps. You know, so we had to get rid of those three or four steps. If we could do that, then we had a machine that would, and obviously there are technical specifications that come out of that and all that. So it's, you know, developing, okay, what are the requirements of this thing? Because that's going to develop your effort. And then from there, you have to say, well, what are all the things we don't know right now that we need to know? Like why can't we build it today? You know, why, why can't we just put a machine together? Well, there's a whole bunch of stuff and, um, the process of then solving those questions is, is really the process of, of development of a product. And. You have to say, well, did we use a lean or agile type of development process? Yes, for parts of it. Um, for parts of it, we wandered around in the dark a little bit and had to realize we didn't, we didn't know enough about the boundaries of where the system worked and didn't work. to, to move forward. And we had to go back and do a little bit of that work. I think there's a big tendency for people who are trying to start startup companies. And I fall into this bucket of, of saying like, good, it works, let's move forward, you know, and not really taking a step back to say, okay, but where does it not work? And for us, you know, we were generating these little droplets and it was working great. And then all of a sudden it wasn't working on any sheets. We were working hard. And, uh, it, it, we, we were too willing to have a prototype that works and, you know, not willing enough to do a more structured engineering process around that early on to figure out, okay, well, you know, where doesn't it work? What are the sizes of these specific things need to be? What are the materials we can or can't use? And you want to be careful that that doesn't, Extended to an academic project where you're, you know, you know, over classify or over, you know, doing more science than you need to. It really comes down to defining those first questions really well. You know, what do we need to know before we're able to move this product out, you know, and the effort then, uh, that you do, uh, stems around that. Now, what I would say is, For anybody, one of the key first hires then is, is, you know, is somebody who's going to lead your organizations uh, project management effort and, and lead your organization's technology development effort, you know, and those can be separate roles or the same role depending on the kind of person that you get, but you need somebody who's used to building a structured, you know, a structured environment in which, you know, people have clear deliverables and, you know, they're held to those deliverables and people work a lot better in those environments. They feel comfortable. It sounds crazy, but given more constraints, people feel safer, you know, they given more guidance, people feel like they know what they're supposed to do. That's the more positive way of saying that. But I think, um, it's really tough for even really, really smart people to, to try to figure out what you want them to do or what they should do without, you know, strong organizational management. Uh, you know, and Chris, that's one of the core lessons. That I think I've learned over the years is how important, um, good management is, not just senior management, but middle management as well. And I think that's something that when you look going lab to market, a lot of technical people really undervalue how important people are who are really good at hearing people, at organizing people, but aren't necessarily going to be people that are your, you know, mathematical or your physical superstars. You know, the, and we tend to undervalue people who are just middle managers, but in, in reality that skillset and it is a skillset that has to be trained of understanding, you know, how to communicate with, you know, people, you know, how, how to get them to set goals and understand how those goals link to the larger goals of the organization. how to make sure they have what they need and speak up through what they need and to take ownership of what they're doing. Finding good, strong, you know, management early on, uh, is, is really a key to success in scaling a company from your first five people to 40 or 50 people. Um, and you know, it amazed me because our strategy at the beginning of Dropworks was we are going to find the smartest people. And we're going to, you know, let them, you know, guide us where it needs to go on each of the areas that they're in. And, and what we ended up with was a lot of Unhappy, unproductive, smart people, you know, and we had to learn, okay, okay. Some of these people can be empowered to be managers, but they have to then give up. They can be trained in a direction, but they have to give up some of the technical leadership that they want to do. So if that's a direction they want to move in, and we had, You know, some people really successful in that space and some of the other places we have to hire in people who are strong technical managers. Um, and that's a hard job to hire for, but really important. And we are really, um, on the road to, to, to continuing to transform our culture in a way that people felt, you know, more like they understood where they were going and more like they knew what they were supposed to do day to day, which made them feel safer in the environment and thus overall more productive. And we forget that when you're five people or six people, you can talk to everybody in the company multiple times every day. When you're 20, 30, 40 people, all of a sudden that doesn't happen anymore. And, uh, that the importance of those middle management layers, uh, becomes, you know, stronger and stronger and stronger as you grow.

Chris Reichhelm: 32:54

Were those hires you made, were they experienced, domain experienced hires?

Chris Perkins: 33:04

Um, yes, uh, but the, the ones that, where we had the most success is in two places, and I'm thinking both at Dropworks and at Sundrop Fuels. Uh, the places where we had the most success would be, uh, you know, first of all, yes, hiring somebody with some domain experience, but so that they could talk to the technical people and understand what they're going to, but who also had a successful track record of being, yeah, one of these middle managers. The other place we had some success

Chris Reichhelm: 33:35

And if you don't mind me interrupting there, if you don't mind me interrupting there real quick, so they had domain experience. Did they have previous startup experience? Or was it largely corporate experience or SME experience?

Chris Perkins: 33:50

Um, for the people who had, I think, the most success, it was in medium sized companies, you know, and, uh, you know, where I, I, startups are tough places for corporate traps, uh, out of large, large corporations, just because you don't have the support systems. Uh, a lot, and, and you don't oftentimes have processes in place yet, you expect people to put those in place, but a lot of times you've only been in small startups, it's really a roll of the dice as to whether they've had a leader that really valued that early stage, uh, valued that middle management or that management trend, management as a skill. Uh, we, uh, had a lot of success at Dropworks, uh, particularly in the second half of the company's existence. in identifying some of our younger subject area experts who had, um, you know, an aptitude for leadership and putting them in those roles and then working to support those. And I could think it was, you know, multiple people, um, who ended up becoming really strong in that leadership space and have moved on to other things now where they continue to do that. And so you could do it a couple of ways the most important piece is that management as a skill has to be valued by the company. You have to invest in it, you have to support those people, so you either have to look to hire it or you have to look to train it. It's going to cost money, it's going to slow you down, in the end, it's going to make you faster. You know, and you're going to have a better culture when that happens.

Chris Reichhelm: 35:30

We have this very negative association with management, and my hypothesis is it's one of the reasons why we don't have enough of these businesses actually scaling. Because we don't have the systems and processes and people in place, uh, around which you can build, uh, a company capable of supporting the marketplace and whatever solution you're in. So, to hear you talk about the importance of it and, you know, and the importance of that as a lesson, uh, you know, that you've picked up is, uh, is actually really heartening.

Chris Perkins: 36:04

Yeah, I mean, Chris, I, I think we have such, I have a hypothesis that we have such a bad association with management is because is, is a symptom of the way that, that a lot of those companies approach management, you know, it's because we have a lot of bad managers because you promoted people into positions of management without supporting them. Yeah, if, when you have companies that don't value management, the people that become managers. don't have the, you know, the, the support or the, the, the training or the, um, uh, the focus to end up becoming good managers. And then thus the technical people in those organizations just end up thinking, well, management's really, really stupid, you know? And that's a common, um, that happens in lots of human organizations where, you know, the people at the top hold the responsibility up to them. The people at the bottom push the responsibility up and both are participating in that. You know, exchange, you know, and a startup company requires you to be really flexible in how you see yourself, you know, what kind of role that you're filling. And um, I think most people, you know, draw artificial walls around themselves and I have myself at times. You know, where it's like, well, I can't do that. I'm not a blank or I'm, you know, I can't look at computer code. I'm a biologist. You know what I mean? It's like, well, we don't have any biology tasks today, but today I need somebody to do this, you know, or I need somebody to learn how to go talk to customers. And I know you're not a salesperson and we don't have any salespeople yet. What I need somebody to do is go out there and go find out this piece of information for me. And the people who are really successful, I think, in startup companies, particularly early in the first 40 people or so, are people who aren't just willing to wear a lot of hats, but are anxious to learn new things all the time. Yeah. And, and again, That makes sense, too, because you hope that out of the first 40 people you have, you have a lot, a lot of the leaders that you want to carry on to the first 200 people. Yeah, right. You're looking for people who are going to lead groups, if not go into senior management positions, because you're not going to hire. your C suite that you're going to have through IPO, you know, in the first, you know, three weeks after you're a Series A you know, that's not how that works. So you're looking to hope that, that the people that you have in that first 34 people are people you develop into positions, but you know, they've got to change to get there.

Chris Reichhelm: 38:40

Yeah. Yeah. You are my last question for you, Chris, and I've thoroughly enjoyed this, this afternoon. You're advising a lot of young startups now. And, uh, and you're sitting on boards and so on. What are the key pieces of advice you're giving to entrepreneurs as they set out on this journey?

Chris Perkins: 39:03

I, I think, you know, one of the things, the most common thing I get asked is, how do you raise money? I need to raise money. You know, look at my deck, tell me what's going on, you know, tell me, you know, how I, or introduce me to these VCs, you know, and, um, that's the wrong focus, you know, and oftentimes I see it right away when I look at the start deck, you know, because, you know, it's 20 pages, 30 pages of dense, we're going to tell you everything about everything we have imagined. You know, the thing that I really try to align folks to is, is you need to understand your customer and their problem so well that you can express it and a sentence or two and i think a thing a lot of folks really struggle with i struggle with is a Dropworks what is how do i every customers different and how do i fit all the different applications i, Um, see into one slide to be able to let this VC or this, you know, uh, potential customer know like how amazing this is going to be so that they understand they should invest in, you know, and if you can't express it in a few, you know, one to two sentences, maybe three at the most, uh, short sentences, then, you know, You don't really understand it. You don't have a problem that's clear enough. And if that's not a problem that people are thinking about every day, it's going to be tough to drive traction because, um, they're not really going out of their way to solve it right now. You know, it's gotta be, um, something that, you know, the difference between what you should call an aspirin problem and antibiotic problem. You know, if you have a headache, you could use some aspirin, but if you don't get the aspirin, you're going to be okay, but if you, if you have, an infection, yeah, you need, you need that antibiotic and, and those are the kind of problems that startup companies should be looking to solve, you know, um, which are immediate, uh, things that are going to see rapid uptake, you know, and there has to be overlap with the area you want to impact personally. You know, you know, it's got to be in the field, you know, like I'm sure there are really important, you know, or really big problems in, you know, some sort of accounting software, you know, out there, but that's not a problem I have passion about. That's a problem somebody else might have passion about. Um, and then the problem has got to be big enough that, you know, in your initial beachhead application, it's going to be interesting to investors. And then you see the pathways to it. So I think a lot of. Founders come to me and, and, and they'll say, well, you know, we want to be introduced to X, Y, or Z and I'm like, okay, let me see your deck or they want help with their, their, their pitch deck and they haven't figured out that first piece yet. And the funny thing about that is once, you know, what that product is, what the, what the, what the problem is and who the customer is. Everything else flows out of that really, you have like a nine slide pitch deck and it's like, who's your customer and what's their problem is your first slide, you know, what's the impact of solving the problem is your second slide. Your third slide is, you know, um, how is it being solved now and why doesn't that work? Your fourth slide is here's how we solve the problem. Your fifth slide's the one where you get to talk a little bit about your technology, but not in detail, just sort of at high level. You know, uh, the, the next slide is, you know, what's your business model? Uh, the slide after that is, is, you know, what do the, your pro forma financials look like, which nobody believes, right. But you have to have it there, see that so that you can at least show what you've thought about this. And you showed what the market is in your on slide two. And yeah, now you're showing this. And then you want to talk about your team and, uh, and what the exits look like. Yeah. That that's a deck, nine slides. Yeah. Give or take. And, um, you want to work on, how can I put as few words as possible onto each one of those? You know, thinking bullet points, uh, you can't do any of that effectively until you understand that customer's problem really effectively. Once you do, man, it gets so easy. And when we talk about exits. You know, M& A, particularly to, you know, to a strategic, it's the same problem. What's the problem that strategic is trying to solve and how do you fit into it? Yeah. So when you go through your management presentation, you know, when, when, when you get inbound interest to, to be, to be sold. It's the same kind of pitch, you know, well, here's this problem, you know, that we're trying to solve and you're thinking about it in terms of those customers are also the customers, it's strategic, and you're just pitching the same way, you know, a lot of times founders try to get married on the first contact with the VC, and you're just really, you're trying to get to the second date. You know, um, yeah, so I think that's, you know, if I were to give advice, you know, to sum things up, you know, it's, it's like at the top, you have to go talk to customers. You have to be, yeah, drop your ego, realize they have the answers, go be really, really curious, follow where, you know, you have your own hypotheses, but be willing to, to, to cross those off. So that's number one. Number two, then as you scale your company, Really invest in culture and, and, and management. You know, think about you're running an organization. You're no longer one person doing a PhD project. Now you are and so an organization needs people to help with this. Uh, and in the last piece is, You know, don't try to solve all of the world's problems with one startup, you know, solve a problem that's immediate, right in front of you. Doing that makes the startup successful and enables you to solve the next problem, and the next problem, and the next problem, uh, and eventually get bigger. Uh, you know, all of the big startup companies that we think of tackling really, really challenging problems today. Massive scale problems. They did not start that way. They started solving small problems that made the money, um, that still overlapped with the impact they were trying to have, but, um, and enabled them to move into bigger spaces so that they became large companies that then had the resources to tackle, tackle things that were much larger scale.

Chris Reichhelm: 45:35

Amazing. Amazing. That is valuable advice, Chris. Thank you so much.

Chris Perkins: 45:42

Well, it was a hard learned and I continue to make mistakes and learn from those mistakes. But you know, an environment in which there are no mistakes made is an environment in which there isn't any learning happening. And so, you know, hopefully, uh, so I hope to continue to make mistakes in the future and, uh, and learn from those and, and keep getting better at this. And hopefully, uh, uh, you know, I can be of some help to the people that I'm, I'm working with right now.

Chris Reichhelm: 46:09

I'm sure you are. I'm sure you are. Chris, thank you so much for joining me on the program. It's been a pleasure having you.

Chris Perkins: 46:16

Same here, Chris. Thanks for having me.

Chris Reichhelm: 46:19

You've been listening to the Lab to Market Leadership podcast, brought to you by Deep Tech Leaders. This podcast has been produced by Beauxhaus. You can find out more about us on LinkedIn, Spotify, Apple, or wherever you get your podcasts.