Learning from failure and coming back stronger
Podcast transcription - 10th October 2018
Peter Cowley: Hello again, to another Invested Investor Podcast. Today, we have Jelena Aleksic, an entrepreneur from Cambridge, whose business I invested in probably a couple of years ago. Jelena, tell us a bit about your background.
Jelena Aleksic: Hi everyone and thank you Peter for having me on your podcast.
My background is in genetics. I originally came to Cambridge to do a PhD in genetics, and during academic research I worked on a rare disease called Dubowitz Syndrome, which affects children and gives them developmental delay. During that time I got very interested in the problem of early diagnostic in rare diseases because I found that as a scientist, I could send off cells for DNA sequencing and get results back very fast and analyse the data, but from engaging with charities and patient groups, I found out that a lot of them encountered a very different journey. In the UK it takes an average of six years and visits to eight doctors to diagnose a rare disease, so there a lot of people kind of being bounced through the system with very severe diseases and not getting answers. So what this really got me interested in is why the technology for diagnosis some of these disorders is really already there, but there seems to be a huge gap in terms of access to this technology when it comes to patients within the healthcare system.
So teamed up with my co-founder, Dr. Robert Stojnic and what we tried to do was to kind of look at shape of that market and the process within healthcare and really find out why this gap existed and what kind of intervention would be able to build up in order to speed up access to these diagnostic tests. What we found was that within the healthcare system, doctors were spending a long time trying to find the right tests in the system that was quite technologically out dated. For example, a doctor who wanted to diagnose a patient would phone up five or six different labs, check whether they still did the same test, how much it cost, and collectively it was costing the healthcare system a lot of money to waste all of this doctor time.
Peter Cowley: The time, yes. Yeah.
Jelena Aleksic: Also, the doctors weren't necessarily finding the best tests on the market. They were finding the tests from the labs that they were familiar with, so it was quite a fragmented market when we first started this.
Peter Cowley: At this point, you were still both employed, were you?
Jelena Aleksic: We were both post docs at the university.
Peter Cowley: With a steady income, of course?
Jelena Aleksic: Yes, that's right. The nice thing was, so both of us were bioinformaticians by background and our employers were actually very flexible, so we both went through this process of being full-time post docs who were researching a startup on the side to being half-time post docs who were doing a bit more startup work to eventually both quitting our jobs and deciding to focus on the startup full-time.
Peter Cowley: But, that's still a big plunge. Other entrepreneurs need to understand, taking that plunge between the steady income and a lot of uncertainty. How did you guys get through that process in your mind?
Jelena Aleksic: I think it was something that, at least for me, I always wanted to do. It's the first company where I quit my job, and I really tried to build it up full-time. It's not the first company I ever founded, so it's actually the third one, but the others one I did just kind of casually on top of my academic career, so I think I always wanted to be an entrepreneur. But also, going through that process is scary and you're kind of stepping away from what you've always been told will be success in your profession, so we all get to publish and go on with academic success, and actually stepping away from that is difficult. I think for both of us, I mean, we went through a lot of daily work. It took about a year and a half where we still had kind of full-time employment and an income. It was really, the market research data we'd collected during that time was quite convincing, and we started working with the Addenbrooke’s Hospital here in Cambridge to build up the first prototype, which kind of gave us-
Peter Cowley: Even before you raised funding, was that?
Jelena Aleksic: Yeah, that's right. We closed a contract with them before we raised our first funding round, and that's what kind of gave us the confidence to say, okay, we think we have something real and we really want to kind of work on this and pursue this.
Peter Cowley: And you also came from the Cambridge Accelerator Program. What's the timing between full-time role and Accelerator and the funding stage?
Jelena Aleksic: Sure. We were actually two different incubators at different times, so we joined Social Incubator East because we originally started off with social enterprise motivation. We wanted to cut down this diagnostic time for patients. Then, about six months after joining that, we also joined Hanadi's Accelerator at the Judge Business School. The timeline was, we spend about a year thinking about it and doing initial research, then we joined the Social Enterprise Incubator. Then, about six months later, we joined Judge Business School Incubator as well. The Social Incubator, the program lasted a year, so after that-
Peter Cowley: You left to your own devices maybe?
Jelena Aleksic: Yeah, but during that year, you get given a lot of support and we also had office space through that for a year, so that was good. Then, the Accelerator, the Judge Business School, it's a longer program, so the first six months is quite intensive training, but then after that, you still have access to the mentors and you have support for quite a long period of time, so we were part of the Accelerator for a couple of years.
Peter Cowley: And then when in that two years did you go out for funding?
Jelena Aleksic: We closed the funding around a year after we quit our full-time jobs.
Peter Cowley: And you quit your full-time job whilst you were already on the Accelerator, did you?
Jelena Aleksic: Yeah, that's right. Yeah. It took maybe a year and a half from joining the first.
Peter Cowley: And how did you live, pay the bills during that year and half?
Jelena Aleksic: It was tricky. I ate a lot of lentils. But other than that, no, we had-
Peter Cowley: Savings, maybe.
Jelena Aleksic: Yeah. We put in a little bit of money ourselves at the beginning, but it was really a small amount because we were coming out of academia. We got a little bit of grant funding. The Accelerator actually had a kind of pot of money for-
Peter Cowley: 5 or 10K or so?
Jelena Aleksic: That's right. I think they gave us 15k. What we also ended up doing just to kind of bridge the period between kind of going out for funding and closing the funding round, we got a business loan from an organisation called Foundation East.
Peter Cowley: Now, that's Belinda Bell is-
Jelena Aleksic: Yeah, that's right. Because we had this link with the Social Enterprise Incubator, Foundation East were happy to give us a loan because they like to fund businesses that have some sort of social mission. It's quite a range between some businesses are charities and some businesses are clearly commercial but have a set of KPIs that are linked with social impact as well, which was the case for us. So we got 50K from them and that helped us kind of bridge-
Peter Cowley: Bridge this time to you raised the round. So you went out and pitched to a number of organisations-
Jelena Aleksic: Yeah that's right.
Peter Cowley: Including the Cambridge Angels and who else?
Jelena Aleksic: Cambridge Angels, Cambridge Capital Group, I also had a lot of informal conversations with various Cambridge and London Angels that people introduced me to. It was kind a number of different people and some venture capitalists although we were generally kind of too -
Peter Cowley: Too small, yes. So you raised 150K or so right?
Jelena Aleksic: It was 350.
Peter Cowley: 350K yeah. Okay. Jonathan Milner led that round?
Jelena Aleksic: That's right.
Peter Cowley: Yeah fine. And did you collect Angels from a number of different groups then?
Jelena Aleksic: It wasn't that many groups. It was mainly Jonathan Milner and Cambridge Angels. We were backed by Darren Disley, yourselves and the Martlet Group and Simon Cart.
Peter Cowley: That money came in and then you could launch yourself properly.
Jelena Aleksic: That's right.
Peter Cowley: So, find an office, etcetera. Can you talk about hiring at that point?
Jelena Aleksic: At that point our team expanded. Originally we were a team of 2, myself and my co-founder. Quite early on we had some internship schemes which means we got some people in temporarily. And that was supported by just sometime their internships came who gave us half the money and then we paid the other half. That way we got some money market research done more comprehensively than we might of done otherwise. We also had a communications officer, Tomasin, joined quite early on. She stayed with us and then later on joined the social incubator as one of their staff as well. Once we closed the funding round at that point we could expand the team more. We split the funding 50-50 in terms of where we applied it. 50% went towards hiring developers and working on the product and then 50% went towards hiring commercial staff. We had a marketing and communications person and we had a business development officer join as well.
Peter Cowley: And all these staff were in the same office were they? You didn't have some developers in another country?
Jelena Aleksic: We did. The commercial stuff we were all in the same office. It was a team of four of us all working out of idea space for most of this. We found that it was quite difficult hiring developers in Cambridge and that they were generally very expensive to hire so we outsourced a lot of the development work. We had one member of staff based in Serbia and one member staff based in Morocco and Robert, our CTO, spent lots of time on Skype managing our remote development team.
Peter Cowley: You are from Serbia and your co-founder is from where?
Jelena Aleksic: From Serbia as well.
Peter Cowley: Oh as well.
Jelena Aleksic: The nice thing about that is that we had the local connections, we could some really good people through the network we had already. And then to develop in Morocco, we did a more traditional recruitment process of posting adverts everywhere and kind of trying to find somebody who can do some more security focused work. Because we were operating within healthcare data security was one of our key priorities. So we really wanted somebody-
Peter Cowley: We'll lets talk about the platform and the offering in a minute.
The company’s is called Gene Adviser. When was that name chosen? And why did you choose it?
Jelena Aleksic: It was chosen quite early on I think. It took us a couple of months to come up with it in the very early stages there was a group of us who were friends and we were entering business competitions and we were just doing it for fun but we it kind of leads you to play around with ideas and we entered a few and we won of these new £100 for 100 words competitions and went out for dinner.
Peter Cowley: Cambridge University entrepreneurs isn't it?
Jelena Aleksic: Just through this process of entering business competitions and kind of tweaking the idea at every stage it just lead more and more to something that really looked like a business. It's came to a point where we sat down and had the conversation of "sure we can do this? Who wants to stay?" And at that point everybody else left. Which happens when you switch from-
Peter Cowley: You startup weekends are commonly like that.
Jelena Aleksic: Yeah absolutely.
When you switch from "this is an idea" to "okay lets make this happen" but actually at that point, I was talking to Robert and we were both bioinformaticians so we were teaching the same programming course together and we kind of went to lunch and I said "we're starting a company" and Robert said "hmm I really want to start a company" so at that point the two of us partnered up and became business partners.
Peter Cowley: Yes, okay lets talk about the product and I remember that in the early days that the relationship with Addenbrooke’s was really important to me as an investor.
Jelena Aleksic: Yes so that relationship was really important to us as well and in a way that's how the whole company started. So Robert and I teamed up and as I said we wanted to look at these barriers that patients faced when getting this diagnostic test and why they're in place.
And we had a number of ideas around that in terms of what we could offer as a company being bioinformaticians one of our first ideas was to make some data analytics software to deal with this type of data or even potentially setup a lab that could do more diagnostics. But through going out and talking to different bits of the market we actually found that there are plenty of labs already out there and the tests are already out there and there are a number of large companies already offering this type of analysis software.
But, what really seemed to be missing was this kind of link between the different providers and the doctors and that really came out in a conversation that we had with Dr. Steven Abbs who's the director of the genetics lab at Addenbrooke's. At a very early stage he said "I don't need software, I have a bioinformatician I don't need anybody to do the tests, we are already doing the tests but what I really need is a way of reaching customers and really getting our offering out there" so in a way the business model and the whole idea it came up in collaboration with him, we've worked very closely with him in the start.
Peter Cowley: And Addenbrooke's is our local hospital our local teaching hospital here in Cambridge.
Jelena Aleksic: Yeah, that's right they're very good at adopting innovation quite early in terms of they’ve digitised a lot of their healthcare records and they're kind of a good starting point for a lot of projects I think to initially launch kind of their offerings within a particular kind of corner of the NHS before going more broadly.
Peter Cowley: So the customer journey is that somebody in a department in a hospital somewhere else in the world can find your site somehow and then go on it and order a genetic analysis and then they would send the sample to Addenbrooke's and the data would go back is that right?
Jelena Aleksic: Yeah, that's right.
Peter Cowley: So, clearly there is a huge privacy security issue here. Can talk through how you got through that?
Jelena Aleksic: Yes, so there was few different obstacles to overcome in terms of that so we wanted to setup the system in stages so that there was something usable on the customer end at every stage but we wanted to build up on that and provide more comprehensive service over time.
Initially how we got through the security aspects is that the service we offered was very much a kind of financial transactional one rather than the data transfer service so the transfer was that they would order and pay for the test online but then the actual sample would go to Addenbrooke's and the data would be sent from Addenbrooke's to the customer directly on paper so we never handled the data initially and then part of the funding grant that we raised was used to get this ISO 270001 accreditation for the company and we put in a lot of changes in terms of our company processes and data security processes and put it in place and it's quite comprehensive.
Once we had that then we went through the initial information governance for them to approve the processes that we had within the company and make sure everything was up to their standards as well. We actually got through all of those and got to the point where we were able to handle the patient data within the system.
Peter Cowley: And this is using N3 secure network or not?
Jelena Aleksic: So, weren't on the N3 networks so the way it works, and Robert did most of this work so he would be able to advise people in detail but their processes in terms of company practices were basically go through all the potential data risks and what you need to demonstrate that you have looked at them and you have taken actions to alleviate those risks and that looks at where the data's stored physically so we had to move offices for example was one of the things. It also looks at where the data bounces through so we had to switch who our hosting was from.
So, the NHS wanted us to have servers based on UK soil so that was one of the things that we had to change. And then making sure that for example that the staff are trained so you know everybody had to have password block things peoples computers had to lock down after stepped away for a couple of minutes sort of thing so making sure that the various different processes are in place. And it's a process where there isn't really a specific set of conditions you have to meet its more looking at the whole system and whether you sufficiently de-risked every step of it.
Peter Cowley: So you gradually developed a level of product market fit though that was mainly in the UK wasn't it?
Jelena Aleksic: Yeah, so a lot of our early partner labs were in the UK we had a couple of international labs during the early days as well and in terms of the customers it was mainly UK EU Australia some customers from Canada so kind of English speaking commonwealth countries generally.
Peter Cowley: Yes so do you have any transactions on the platform not a great deal, but they were bringing you money because you were taking a margin or commission on that weren't you?
Okay, so as we know, as we find out later this companies in a different form now?
Jelena Aleksic: Mm-hmm (affirmative).
Peter Cowley: So tell me about the pressures from when it was all looking very exciting and positive to the point where you thought "maybe we aren't the right people to do this"
Jelena Aleksic: So, a number of different things happened that kind of lead us to that decision. The main thing that really convinced us we needed to change something really major was I mentioned that our early market projections were based on sales data that was shared with us by Addenbrooke's and other partners this data looked really good. That was the basis for going head and going this, and we had the same data shared a couple of years later having built up this platform and there was a very clear trend in that data and a lot of their sales from overseas had just dropped and what had happened during the two or three years we spent building this up was that the only sequencing had gotten so cheap that most hospitals had setup their own sequencing centres at which point this need to outsource to other hospitals overseas was largely gone.
I think there were still reasons for outsourcing that were good reasons so we still believed that there are centres of expertise that are better at diagnosing certain conditions than other centres and these tests aren't equivalent but that's a real difficult thing to sell to people if they already have a sequencing centre in their own hospital that they're quite happy using.
There were also some regulatory changes. There were some countries where they passed laws saying that the tests had to be done in that country unless there was a very strong reason not to. So the market sort of shifted a bit and turned towards this very international outsourcing model that we had originally relied on.
Peter Cowley: There are two elements too. There's the testing itself using an aluminium machine at one of the competitors and then there's the analysis and surely the analysis is concentrations of skills in certain areas to that.
Jelena Aleksic: I completely agree in that was exactly our thinking. We knew the sales numbers weren't looking that good so we did a lot of research in to a bunch of potential pivots. So one of the potential pivots was looking at being a broker for analysis platforms so putting people in touch with experts or software providers who could analyse this kind of data.
So something we changed over time in terms of how we did things was I kind of worried that I masked some of our early market research. And not in terms of the numbers because those were based on sales but in terms of when you're doing market research interviews you get this kind of feeling of how much of a market pull for something and I think I was just really excited about it. And I went out and I told people "I've got this great platform are you interested?". And people generally say "yeah, yeah that sounds great" but I realised later on that actually it was almost like I was half doing market research and half doing a sales conversation at that point and it was important to do it in a more impartial way. So a lot of the later methods we used Jonathon Milner suggested that we use some methodology from the Lean Startup Book because it's very structured its very scientific and you try and ...
Peter Cowley: And that's Eric Ries' book? Is it
Jelena Aleksic: That's right yeah, so you try and setup experiments where you send out something to customers and you try and make it as impartial as possible so you remove me talking to them from the equation and see if they would perform a particular action. So with the data interpretation providers we found some people who were happy to be the providers of that and then we try and find some customers and we sent out some early links we tried to do some kind of early promotions of that service and there just wasn't very much interest and I think the problem was that even though it's scientifically I believe there is a need for that and that there are experts it's not the problem people perceive that they have and it's actually quite a difficult tale telling somebody "I don't think you're doing that test well enough I think you should really buy from us because we'll do it better" If that's something that people aren't necessarily aware of to begin with so we did do an experiment based around that but we didn't get particular promising results just seemed to be very little perceived need with this.
Peter Cowley: And you were running out of cash.
Jelena Aleksic: Running out of cash yeah.
Peter Cowley: So did you have to shrink the team? What I'd like to understand where you made the decision that this wouldn't work and you didn't go out for extra funding and you decided to shut it down.
Jelena Aleksic: Yes, so first we had about six months where the whole team was working on a number of different build ideas so we went through anything we could best think of that makes use of the resources we had so went through can we specialise? Can we create cancer specific market place can we look at not only prenatal diagnostics we set up a lot of different experiments we did a lot of market research in kind of different adjacent areas and we didn't shrink the team we actually kept the whole team for that but we had everybody really focusing on trying to find a new business model that might work and we just didn't find anything that was connected to what we'd previously done.
We ended up if we wanted to make money we could become a web development agency or a drug developing company and that point you're just so far away from the initial business model that what you find you've got viabilities but you don't really have opportunities kind of stemming from the viabilities that you've built up having built your previous thing.
So what we did at that point was we had a difficult conversation with our investors so we actually had a scratched our head session with Jonathan Milner and we invited all of our investors to that session and it was a couple of hours of going through all the data that we had collected on the different possible pivots where the company was and really just sitting down with everybody and seeing whether anybody had any last minute rescue ideas and whether there was anything we could do with that and I think the decision was unanimous that when people saw the data that we had they also reached the same conclusion as us which is that it just didn't seem to be commercially viable. I think it would have been possible for us at that point to still raise another funding round because I think we did still have support but it felt irresponsible for me to do that if I didn't think there was actually something commercially Viable there.
Peter Cowley: You'd lost faith in the longer term future would be completely irresponsible.
Jelena Aleksic: Correct.
Peter Cowley: Correct exactly. So, the board before we moved onto this elegant failure or elegant closure and it's re-birth effectively the board had consisted of you two and Jonathon was that correct?
Jelena Aleksic: Correct.
Peter Cowley: Okay, and was Darren the advisor and Simon would be advised and I taught you sometimes.
Jelena Aleksic: So Darren was an advisor quite regularly. So we'd meet up for coffee once a month kind of talk about how the company was doing and Simon was also sort of met up for lunch occasionally and we would talk about how the sales were going and see I'd also get some sales advice from the mentor that you pointed me towards. So investors were very involved generally and we got a lot of advice and I think it wasn't that particular business model in that particular market just wasn't commercially viable and that was the decision that came to and at that point closing the company was a difficult decision but it seemed like the right decision at the time.
Peter Cowley: So, how long was it between that stretched mediums effect really company closure?
Jelena Aleksic: At that point was very quick but what had happened leading up to that is about the six months before that everybody was aware there was a problem and we were doing a lot of market research to try and fix the problem and we were reporting those results back so it wasn't a sudden surprise to anybody.
Peter Cowley: Your staff were starting to leave then were they?
Jelena Aleksic: They were starting to look at other opportunities. We actually had a team that was very passionate about the mission behind the company so they really stayed with us until the last minute and everybody was working very hard until the last minute to try and make it happen. But unfortunately we didn't come up with anything that we thought could be long term commercially viable. From what we had built up.
Peter Cowley: And you were running out of cash still so you have to stop paying the salaries.
Jelena Aleksic: Yeah there was a point where we had to make that decision so yeah.
Peter Cowley: Okay, so lets talk about A: the rebirth and where it is and B: how you transitioned to where it is now, the platform.
Jelena Aleksic: What happened after this was that we made the decision that the company was no longer commercially viable and that we had to close down at which point we had to make our stuff redundant inform everybody all of that sort of closing down process and what I really wanted was to make sure we consider all the colours in this and try and do best for everybody because investors put money into the company, the team did a lot of work to make this happen and we did build up a product that people were using and it wasn't commercially viable but it was fulfilling a need.
So it was very important to me to try and find the best home for it that I can if possible and what we ended up doing was actually giving away the product to the NHS so they now own it and they run it and I've been told they actually planning on expanding the genetic testing portal across England which we're really happy about because that was one of the things that we really wanted to accomplish.
So it's an interesting case where definitely commercially the company was a failure I think we can all agree on that but we did start off with this social mission and actually in terms of that social mission we did accomplish some of the changes we set out to accomplish and that's something I'm really happy about and it brings out an example of you can be a failure in one sense but at the same time it's possible to be successful in another sense. And fulfil some of the goals the company was setup with.
Peter Cowley: We had another lady called Katie Tuncer who you may or may not know described the ending you heard was what you were saying taken over by a charity in a similar space but not the same as an elegant failure and I think I would also award you -.
Jelena Aleksic: Thank you, Thank you.
Peter Cowley: some prize.
So, you've now got a situation where the company has closed, it was a solvent failure, it's important to say that so apart from us poor shareholders which we're used to unfortunately, nobody else lost any money. Obviously people lost their jobs I suspect they've all got jobs again.
Jelena Aleksic: Yeah, that's right.
Peter Cowley: Their skillset they had.
So lets talk about the social work you do, this charitable work you do so we'll talk about TReND and we'll talk about what you're doing now.
Jelena Aleksic: Mm-hmm sure. TReND in Africa is a charity that I've been a director of for the last six years and the mission of the charity is to support scientific development in the developing world so the charity was founded by a PHD student in Cambridge called Lucia Prieto and she was doing a PHD in neuroscience and she went to a neuroscience course where she met Sadiq Yusuf who was a professor in Uganda and they kind of got chatting and Lucia was working in fruit flies at the time which is a great role for neuroscience and Sadiq was working on rats. They kind of had this conversation where Lucia went "you're working on rats I mean they're big, they take a long time to breed, they're expensive, why don't you use fruit flies that are a lot cheaper, a lot faster, you get a new generation every four weeks?" And Sadiq kind of went "That's a really good idea, and that would actually be better for us but I don't know how to run a fruit fly lab".
And the problem was that in the situation that he was working in, nobody had this expertise. And so the first course of the charity that I ran was this fruit fly genetics course where it was basically a three week crash course in how to setup a Drosophila lab. Around the countryside of Uganda. And it kind of grew from there because we found that there was a need for this because across Africa a lot of the primary and secondary education efforts are starting to work, people are coming out of this and they want more education. And there's a network of universities who are training a lot of people but often the training the lecturers had is quite outdated so maybe they'd gone to uni in the 70's or the 80's and it's not really been updated since. And also in terms of the research, they are doing research but they might be coming out with research that's already been done or they're not using the most modern methods they could be using.
So the charity's it's entirely volunteer run it's a network of scientists from the top universities across the world. We've got about sixty volunteers. And the type of work we do is running training courses in really cutting edge bio-medical sciences we ship over equipment. So far we have shipped over 12 tons of equipment and helped setup new research institutes. We have a network of partner universities across Africa and we also send over volunteers for short term or long term placements we like to think that the volunteer will bring their skills to the relevant departments and then there's a kind of natural skills exchange.
Peter Cowley: And which countries is it.
Jelena Aleksic: We have partner universities in about 20 different countries and most of our courses have been run in East Africa so Kenya, Uganda, Tanzania. But we recently also ran some courses in Nigeria and Ghana as well. And for the courses that we run we offer student travel scholarships so we actually get students from all across Africa so by this point we've had students from about 22 different countries and the nice thing is that it also creates kind of a new community of scientists because something that the scientists I find is that because they are in resource limited environments often they don't have travel grants and often they don't have a way of meeting other scientists working the same area but this way a lot of our students go on to collaborate and run their own initiatives together.
We also have large outreach branch that's run entirely by African students so they're excited about science they want to spread it into their own communities and that's been working really well because they're very familiar with the needs of their communities so they go in and they run large community events where they basically gather the whole school as well as the surrounding community and get some outreach teach them about neuroscience and really encourage not just the students but also their parents and the surrounding community to consider science a viable career.
Peter Cowley: And, who funds this ... charity?
Jelena Aleksic: It's been mixture of funding, so at the moment it's as I said it's entirely volunteer run and we all spend ...
Peter Cowley: So you have scholarships, and travel ...
Jelena Aleksic: Yeah, so we'll spend a lot of our time applying for grants and looking for funding every year.
Peter Cowley: Okay, so there's not a core funder somewhere.
Jelena Aleksic: No, it's just something we're looking to establish is some core funding to hire at least one other person would be great because at the moment what we've found as an organisation is that it's kind of organically scaled up to a point and at this point we're really struggling because the people who can kind of manage volunteers they're limited and there's a limit to what we can do without securing core funding. It's actually a lot of our focus is on establishing some sort of infrastructure for the charity so we can grow longer term and keep delivering what it's delivering.
Peter Cowley: And its capital T capital R small e capital N capital D what does that stand for?
Jelena Aleksic: Training and Research for Natural Sciences for development in Africa.
Peter Cowley: Alright, so the Africa is not mentioned in the TReND but ...
Jelena Aleksic: So the full name is TReND in Africa.
Peter Cowley: Oh, fine sorry my fault, I misread that.
So, Jelena what have you learned from this two, three, four year journey that will be of use in your next startup?
Jelena Aleksic: So many different things I mean I came out of Academia and so I went into running a business so I had no idea the entire experience was one huge learning curve. I mean the main takeaways for me firstly I already touched on how to do market research and this idea that I might have first learned market research early on so definitely using a more structured approach and trying to test very early on. Not even necessarily whether there's a need for something because there often is but whether there is a commercial interest in it so when testing business models now compared to how I would do it three years ago I would definitely focus on trying to get some early customers and really getting that market validation because you can somehow get the technology to work, you can get all the processes in place but it's just can you get the customers? And really focusing on that more than anything else.
Also, being quite honest about what the risks are and then trying to focus on the biggest risk first and just kind of making sure you can kind of really build up something from there.
Peter Cowley: That's assuming you can work out what the biggest risk is.
Jelena Aleksic: Yeah, I mean depending on the market but they're often commercial so can you get the customers? Can you get the customers willing to pay enough for this? And if that's the case then often everything else can kind of work around that I think.
In terms of business growth and building teams it's a tricky balance when you raise funding and kind of how you deal with that because under one we had this kind of chicken and egg problem almost that we were operating within healthcare and its quite conservative and we had to offer them something. And we needed money in order build up a product to do that. So there were certainly cases where it is important to raise early funding and its not really possible to kind of proceed without that.
But I've also been looking at how to approach business, at least in the early stages in a more organic growth kind of way. And I think for a lot of software businesses it's quite frequent that they will find the first customer who will pay for the first bit of development and then the business grows like that and I think that's quite interesting because it gives you that early market validation as much as anything and I think for my end I'd really really want make sure that ... I'm not kind of going out for investment again but just making sure I have a really solid business model that I know can scale because we also ran into some scaling issues when we went up and tried to spread the system it turned out to be a lot more difficult than we-
Peter Cowley: Are you talking about technical scaling or commercial scaling?
Jelena Aleksic: Commercial scaling.
Peter Cowley: Okay, yeah.
Jelena Aleksic: Yeah, so I think definitely doing a lot of early testing as much as possible identifying and de-risking as much as possible and also just accepting that building something takes a long time so kind of doing organic growth at the beginning and just making sure that I have a really solid business model if something. So I'm really ...
Peter Cowley: So I'm going to ask you a very direct question here, do you regret taking the funding when you did?
Jelena Aleksic: No, it's a tricky question to answer because I think that in order to really test the business model that we had, we had to build up a product and in order to build up a product we needed money so I don't think that question was really possible to answer in any other way.
I wish the answer had been different, but sure. I don't regret that. But ...
Peter Cowley: So on your next startup it sounds like you'll try and get customer traction therefore customer income earlier when you did this time.
Jelena Aleksic: Yeah.
Peter Cowley: In order to delay the equity investment if you need it, maybe forever, maybe you'll never need equity investment.
Jelena Aleksic: Yeah, possibly I wanna be at some point but I think having that early customer relation means that now you can go to investors with a really solid business model that's already been validated.
Peter Cowley: But as you well know, developing a strong piece of technology before it's ready for customers its variable to get any money from the customers imagine drug discovery.
Jelena Aleksic: Of course.
Peter Cowley: Customers for drugs before you develop the drug.
Jelena Aleksic: Yeah, I think it really depends on the business and the industry and I think the drug cases where you absolutely have to raise funding, there's nothing you can do about that. And there you really rely on kind projections and the kind of early market numbers and market research that you do wherever possible trying to test some of the key assumptions behind that sometimes you may not get some early customers but it might be possible to do some early experiments with how interested people are in that and whether the need is really there. Where you perceive the need to be.
Peter Cowley: Yes, okay, lets finish this interview with some tips for entrepreneurs.
Jelena Aleksic: Mm-hmm (affirmative).
Peter Cowley: The audience is made up of angels and entrepreneurs, give the entrepreneurs some tips.
Jelena Aleksic: So I think firstly I really encourage anybody interested in entrepreneurship to kind of just jump in and try and start experimenting I think it is possible to start these things quite gradually so for myself and my co-founder we had full time jobs while we were experimenting with this it's not a case of all or nothing you have to do it you can just come in and get started with it and learn about it and I learned so much through the process of doing it but I think the best way to learn is to jump in and pick up a project and really do your best with it.
And in terms of how you build up a company, I think one of the mistakes a lot of people make, I think we did we hired a team that was pretty much like us so at one point our entire team was made up of PHD's and that felt great and it was a really passionate team I think everybody was really kind of dedicated to the company mission but on hind-sight admin support earlier would have been good you'd assume you'd anything to have a PHD but you have to gradually build up the better capacity the company needs when the company needs it. I think some more commercial expertise would have been really good as well so kind of came out of academia and I think having someone with more commercial experience-.
Peter Cowley: In terms of selling, a PHD will do a great consultative sale but it won't necessarily do a sale that's purely product sale and so if you want to scale something rapidly, you don't have a consultative sale because the cost of acquisition lack customer clearly is more.
Jelena Aleksic: Yeah, absolutely.
I think getting the right expertise on your team and having a team that's quite diverse and not necessarily made up of mostly people who think like you I think is probably good.
And definitely, and try to do early testing wherever possible and kind of being honest with yourself about the risks.
Something else that has been a learning experience for me, I really care about honesty and transparency and I think throughout this process we have tried to be as honest as possible with all stakeholders and I think that's been really important because it didn't go well in some senses as we said its an elegant failure. So it did end up in a place that we're really proud it ended up but it didn't go as planned something that really helped, this wasn't a surprise to anybody, we communicated a lot with our investors, with our customers, with our employees, with everybody involved and I think that meant that when it came to things not going well, we had a lot of support that we wouldn't have otherwise had if this is something that people were blindsided by so yeah, I encourage people to be honest and transparent and have as much integrity in this process as possible because I think that's important.
Peter Cowley: Yeah, of course, that's music to my ears because the whole point in this process is exactly that. And you were, you were very outnumbered through the whole process. So thank you very much for that.
Great Jelena this has been very good, I've learned a lot from the journey and I will definitely, provided you meet my criteria and you want to still funding next time, I will back you.
Jelena Aleksic: Thank you.
Peter Cowley: Thanks very much.
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