E108: Arvind Gupta, General Partner at SOSV, Founder of IndieBio – Interview

April 26, 2017


This engaging interview is with Arvind Gupta. Arvind doesn’t mess around. He’s the general partner at SOSVentures and IndieBio. And he also competes in martial arts at the highest level.

SOSVentures is a VC firm that has invested in over 400 companies in spaces like biotech, software, and food tech. IndieBio, which Arvind leads, is the world’s first startup accelerator for synthetic biology started in 2014.

Arvind has a great background as industrial designer spending a lot of time at IDEO, the well known design firm.

Arvind brings a wonderful energy to this interview and life.

Other things we talk about:

1. Did Arvind actually find his first job out of school approaching people outside of the exchange in San Fran?
2. How can mixed martial arts help prepare you for business?
3. Why did Arvind surf, rock climb and base jump?
4. How does Arvind take care of himself, find happiness?
5. Why is now the right time for synthetic biology?
6. How does IndieBio help its portfolio companies?

Dave Kruse: Hey everyone. Welcome to another episode of Flyover Labs and today we get to talk to Arvind Gupta. And Arvind is the General Partner of SOS Venture and IndieBio. SOS Ventures is a VC firm that has invested in over 400 companies in spaces like biotech, software and food tech. So we will hear more about some of their portfolio companies and IndieBio is the world’s first startup accelerator for synthetic biology which was started back in 2014. So Arvind has a great background as an industrial designer, spending a lot of time at IDEO, the well known design firm and so I had never talked to Arvind before this, but I have seen some of his videos and I just talked to him briefly and he brings some great energy to conversations. So I’m pretty excited to learn more about Arvind and what he is excited about and what makes him content. So Arvind, thanks for coming on the show today.

Arvind Gupta: Yeah, my pleasure.

Dave Kruse: All right, well so.

Arvind Gupta: Thanks so much for having me.

Dave Kruse: Definitely. Well I appreciate your time, and so before we get into what you are doing now, can you just give us a little background so people get to know you a little bit?

Arvind Gupta: Yeah. So I have kind of a strange meandering background of how I ended up doing what I’m doing today. I started out, sort of my education doing Genetic Engineering in college and I was a Generic Engineer. As a college student, high school student I was very clear that the ability to manipulate life and the code of life itself would be a pretty powerful skill set to have in the future and so I was super excited to dive into that, and as I was starting to embark on my genetic engineering degree I found that the one thing that I didn’t count on was how slow it was. It was really interesting and really exciting in what we were able to do, but it was just so slow and I was surfing a bunch at that time and used these kind of ideas where I did my degree and like my lab is right on the point, you know the biology lab is right on campus point and the students wave goodbye and stuff like that and everything is forever and finally I was excited. You know this is very – there is definitely something powerful here, but it takes too long. And at that time I also started getting inside the subject and economies was one of them, macro economics in particular. I thought that biology and macro economies especially was fairly related between the systems level and so I graduated the University with a degree in Genetic Engineering and Economies and I moved to San Francisco to try out how to make money with just the ideas itself. And so I stood on the floor of the auctions exchange, on the steps, and everyone that came out I asked for a job getting coffee and finally one of the dudes was like yeah, you can be my coffee getter. And so I got on to the floor and got the guy coffee and checked his trades in the morning at four a.m. But I got on the floor and I was able to start asking questions and learn and moving the firms in their backseat as their market maker. And so I became a market maker and the Microsoft were like 99. It was a pretty amazing time, because yeah as we now know there was this huge spike in bubble and crash, mostly because the change at that time had a monopoly on tech stock. So it was just, it was pretty cool to hear and see the volume of trades and they do have it for a couple of years but I found to be super meaningless in the long run. What I would tell people is yeah, I create liquidity for a living. I take risk out of this and what I actually told people is I take risk for a living, I take other peoples risk away from them. They give it to me and then I try to get rid of it myself. And I try to make money in the process and it was really fun to do that in the beginning but once you figure out the algorithm it became not only mind numbingly boring, but it also did create any real value in the world that I could see and I young enough to see – well to think that that mattered or naïve enough to think that that mattered at the time because we really had no real need for the money. So I decided to run a quick experiment where I said okay, well if there is – if most people worked to make money so they can buy their life back in their last hours. What if you just barely made your rents and all that kind of stuff by doing something you would have done, had nothing to do at all, then theoretically you’re on vacation for the rest of your life, right. So I was like oh! Well let’s just try that, because I had the means and so I just kind of did nothing for almost two years where I ended up surfing and base jumping and skydiving diving a ton and stuff like that and just kind of exploring myself and art for the first time and started painting and things like that. So a friend of mine who was teaching how to base jump Stephen Morris who is like – I made all this furniture in my apartment out of driftwood and stuff. He was like yeah, you should do a designer. Like, what’s that? And he was like Oh! It’s like you know art and design together and solve problems, and I was like oh! That sounds interesting. Can you make money doing that and he was like yeah. I’m like all right. So I ended up going to do a matches program at the state for industrial design. And from there I got hired at IDEO to joint their design team there and basically you are starting as an industrial designer to design products and then kept asking the question what else can design accomplish? What else can design do? And started designing business as the question becomes more strategy that I’m looking at. And finally did a start up with my wife and learn it from there and that you know created some amazing insights and then was asked to join Venture Capital and that’s when I saw that biology and sewing 20 years almost now, Gee, yeah doing 20 years biology and caught up in speed and I thought well, the world doesn’t really need another hardware VC, but biology is ready for a change and so I joined – and so I agreed to head the biotech in charge and that’s where I am today.

Dave Kruse: Well that’s nice, okay that’s a great overview. And I got…

Arvind Gupta: So long.

Dave Kruse: No, it’s great. I got tons of questions, but I want ask them all, otherwise we will spend the whole time on your background. And so – but – so what – I mean I guess a couple of – you have quick answers. You know what promoted you this, to sit on the steps and have the confidence to go up to people. I mean I’ve never heard anybody hardly doing that. That was pretty good to get a job at the exchange.

Arvind Gupta: Yeah, it was the opposite of confidence, right. I had nothing to lose. I had moved to San Francisco right, like didn’t have a job, didn’t really have a prospect. You know like, I was just kind of like well, I was like trying to write my own networks at home to predict the stock market which was an absolute failure that I was over sitting the training data and you know I was like okay, well I really wanted to just the experiment of figuring out how to earn a living through having ideas and that was really it. To me going into finance or economies way back then was okay, you know I have an idea, since interest was like the X and then what happens to prices at Y, and then how does that effect your corporation and then the price and perceptions, blah, blah, blah. So that was really cool to me and really just sitting on the steps was the easiest way to get access to these guys. So it was you know back then, how do you find them? You can’t, and the exchange is locket and you can’t get in there and so I just sat outside.

Dave Kruse: I like it, I like it. And you mentioned some other things. You seem fairly adventurous and is that because you are just curious, like how it’s going to feel, the base jump or you just like to live life to your fullest or what promoted you to go base jumping and surfing and yeah.

Arvind Gupta: Yeah, nothing like that. I am I mean you know live life to the fullest. I am not – like I never know what that means, but I do know like so – its all – yeah it’s about experiences for me, like in college I wanted to surf, but I was in UC Santa Barbara and you know like how often are you going to live on the beach and surf. I was actually afraid of water. Yeah, I am a terrible swimmer and I’m not really comfortable in the water and I ended up working my way up to you know some decent sized waves and then nearly drowned at Tarantula. It was on a double over head deck and so that was…

Dave Kruse: Oh! You said you nearly drowned.

Arvind Gupta: Yeah, I nearly drowned at Tarantula. The big waves caught up and I was a little bit slow but it was – so I took it too far right and it was never – I shouldn’t have been out there. It was silly of me and I’m thankful that I got lucky. But yeah, you know so like base jumping came very easily like I started climbing, because Santa Barbara has surf and climbing and I really enjoyed the – again its thinking right. Like you are climbing, it’s a bunch of problems you are solving in a row, but you got to think of your forearms and your technique and so that’s a really cool thing for me and so big wall climbing was even more so, which is what I ended up getting into. And so I was on the side of Old Cap when I was 22, I was 19, I can’t remember – in college, ‘97 whatever that was. And two guys, we were waking up in the morning we hear this rock fall, Me and my partner, we were on Old Cap Towers you know and we were scrabbling and paced up to the side of the cliff and two guys fly by. And I was like No way! You can jump of this fricken thing and see what it’s like to live. I was like I am going to do that one day. And so it took me, it took me a few years before I was able to make the money to learn to skydive and do all the things, but yeah then I eventually learned to base jump. I went to startup to learn six months.

Dave Kruse: So you were on the side of the – on the same mountain, the wall when they based jumped? Were you…

Arvind Gupta: Yeah totally. Yeah, I was on Old Cap Towers which was the way and yeah, and so yeah and they totally move up. In the strangest more circular story even, hard being to believe this, the two guys that flew by me were Pied Wirily and I can’t remember the other guy, but Piet Wirily was the first guy I met at the drop zone I ended up going to three or four years later to learn how to base jump. Yeah, it was low dive. So low dive, that’s like the base jump for drop zone and I show up and I’m like I want to learn how to base jump. They are like shhh, you don’t talk about that here. And I was telling the story when I jumped and I remembered because it was my birthday and they are like no way, and they looked up the log book and it was them.

Dave Kruse: So after you almost drowning, did that change your perspective on life at all, or did it – you already had.

Arvind Gupta: No, I mean I think – not that I am aware of I should say. I think – because they are like for instance there are like so many – like many – if you are like a climber that pushes the limit you know I did a lot of free soloing and it’s kind of actually why I kind of got out of climbing. I was just so scared all the time and I started really pushing both my limits on the free solo level and did long run out scary routs. But you know for me it was always about mind control. Like can my mind stay together when it has to and I think that was what I enjoyed the most. Some of it the movement, some of it the excitement you know, but really what I enjoyed was the mind control aspect of it all and for it was very spiritual. So anyway that’s the thread that really put like progressing in a big way and you know hard scary climbs and base jumping and what I do now, mixed martial arts, which is much, much safer than anything else that I have done.

Dave Kruse: So that’s how you practice the mind control now, is through mixed martial arts?

Arvind Gupta: Yeah.

Dave Kruse: Okay, what you do?

Arvind Gupta: That’s exactly it. So I train over you know with [inaudible] and Jake Shield and a bunch of other guys and I’m mostly a ground fighter, but I strike with – I do normal tie and just do wrestling, American wrestling, those are my three main. Yeah, I’m a purple belt under senior grade C and Jake Shield and won world championships in 2016 last year for my division.

Dave Kruse: Wait, you won the world championship?

Arvind Gupta: Yeah.

Dave Kruse: I missed that one out, holy cow. How did I miss that?

Arvind Gupta: I don’t think I said it, I don’t think I said it. Yeah, I mean it was…

Dave Kruse: Wow!

Arvind Gupta: Well, it’s a fun side. I enjoy competing. So yeah again, it’s just mind control like. I think I have learnt more about business from fighting than anything else, from any book from any like – fighting is an incredible megastore for doing business. I can go on and on about it, but yeah.

Dave Kruse: Yeah, you can explain. I would be curious why or how that is?

Arvind Gupta: So there is just – there is so many ways. I mean they are very united right. You know business is a fight for market share, you know it’s a fight for attention. But also from a founder point of view there is also a lot of management that has to happen, energy management, management of others peoples plans that you don’t have control off, your reactions and things like that. Like so one of my favorite ideas out of this was – and it took me many years of training to get like in a hard fight with someone better than you. In the beginning you think speed wins everything right, speed wins battles. What I realize is speed wins battles, but patience wins the war and so for business building, we always talk about speed, speed, speed, speed, speed and for a good reason, because speed it really important to win all the battles. But the real, the actually war of becoming eventually the number one in your industry and really disrupting things, that’s the war that requires a lot of patience; that is going to require energy management, that’s going to require choosing what you are going to go after, what you are not going to go after, making those decisions and that’s a patience game much more so than it is a sort of speed game. So if I hit at right moment I win and knowing when the right moments are. So yeah, I think there has just been you know a lot of – it has really helped me a lot in understanding businesses.

Dave Kruse: Got you. So like when you are fighting yeah, you are waiting, waiting, waiting for the time when you can kind of attack and if you attack too early, attack too soon, similar to the…

Arvind Gupta: Yeah or even better when you are on the defense right. When you are getting your butt kicked and really like you don’t see it now, you are like oh man! Like this guy is better than me and how am I going to do this? You know you are not just going to give up, because then you are not – if you are like the other person you are not going to be doing this sport. So you are, so you got to think right like and over time you start to realize that like oh okay! It’s not – there is no need to panic until there is, until its really curtained and having patience to ride the storms out and not panic and not quit, not do dumb things, which is usually what leads to the quick finish, right. Learning to ride, that was probably the biggest lesson I have learnt and you actually can see it now when you employ it on other people. When you are putting it on someone else, you just you know they are going to panic and give you something easy, right. So it’s the same thing when you have market share and dominance, you could put it on people and cause panic and vice versa when you are the underdog and you are trying to make your way up to the top, riding out the storm is going to be important to learn.

Dave Kruse: No, I like that. And so how will that translate, let’s see to business exactly. So I definitely hear your point about you know you’re getting attacked and you just have to wait it out, but so like in businesses it’s…

Arvind Gupta: Yeah, quite competitive right. Go ahead I’m sorry.

Dave Kruse: Why I’m saying in business, let’s say you have up and downs, right and so it’s a Wednesday afternoon and you are like holy cow, things are just not working out. But you know and with fighting you have minutes, where as businesses you are like have hours, days, weeks where things might not be working out. So how do you like find the patience? How do you relax? Yeah.

Arvind Gupta: Yeah, you got to find those things and I think yeah, it’s really, you got to figure out to breathe through them right. So like you know it’s just – it’s a different level of relaxation. So the way I relax is to make sure that I’m function at the optician performance at all times, is I try to balance my life as much as possible, through kind of spiritual, physical and intellectual pursuits, and I find if any one of those takes over or if I am underbalanced in anyway, it becomes harder to be patient; it’s harder to deal with those things, because you lose perspective and I think perspective is going to be really important. So translating it you know directly into business, it’s just one of those things you have to figure out for yourself. I think for many times is what is that for them. I have worked with you know over – I’ve made 67 direct investments in companies go far and I’ve worked directly with every team and every founder has different sort of approaches, but what we all have in common that they are going to have to struggles and they do have to figure out ways to deal with it. Like Mortaza for kidneys, amazing founder. He has developing artificial implantable kidney and he is taking a very different approach to where he is doing some tiny, tiny dialysis machines that can get inside of your body and then suscepts to the bladder. So the distillate basically goes into your bladder and you can actually just pee it out. So a very innovative approach and I remember one week, when we were working together during the batch he was like this is a dark week for kidney. I’m like why and he is like, one of the prototypes broke. There is an attack on his patent and someone was threatening him that there was an infringement. Basically it looked like his company could be over by the end of the week. And he is kind of just smiling and he was like, this is a bad week for kidney you know and I am like dude, you’re incredibly calm for somebody who has got their entire company on the line and a very promising company of that. And then of course he got through it and everything ended up being fine, the patent wasn’t being infringed upon and you know the prototype was fixed of course and all that kind of stuff. And so it’s just a matter of keeping calm. Other people panic and not focus on the right things and set off an IP law suit or something stupid that costs money and time and ends up you know crushing your burn. So there is all these like very tangible sort of decision points that you are always making, like many people aren’t aware off.

Dave Kruse: Yeah.

Arvind Gupta: And how you are responding – yeah, how you are responding is important, so keep in mind.

Dave Kruse: And talking to others like you who can understand it and be a good sounding board and…

Arvind Gupta: Yeah, exactly. Getting outside perspective is really key. In the startup world there is such an echo chain, right. One of the hardest things about being a startup founder is the loneliness of being a start up founder. You know like very few people understand what you are going through, very few people you know think it’s as cool as you do right. It’s hard. I think being a startup founder is one of the hardest things in the world to do and so it requires a little dedication far beyond, far beyond sort of monetary reasons, but it’s way too painful, it’s way too painful.

Dave Kruse: Well, it’s nice having someone like you on the entrepreneur side to describe it like that, because there is good and bad days. So they can always call up you when they are having a bad day and you understand.

Arvind Gupta: Well yeah, well I’m an operator you know. So I’ve lived it, I’ve done it. I understand what it is like to be up so late and be stressing and you know build a business and know it inside out but not know why it’s painful to translate into a pitch deck. Like pitch deck is so hard, because you know so much about it, it’s hard to explain you know in a clear way. It’s the weirdest put in paradox, but it’s true. I see so many terrible pitch decks from really smart, capable CEOs; it’s phenomenal.

Dave Kruse: Interesting, all right.

Arvind Gupta: But it’s because that you know is you go-to.

Dave Kruse: Yeah, I mean that makes sense. All right, and so we’ll take more about IndieBio VC in a second. Before we leave this topic, I was curious how – you know you mentioned I think it was the three pillars. It was the spirituality, the physical and intellectual, I think those were the three and you mentioned that in the early part. So I was curious how – because I think we all know this that we are supposed to spend time in all those areas. But how do you actually make it happen? Like do you schedule time? I mean you do your fighting, which would be probably a lot with physical, but what about the intellectual and spiritual. I guess intellectual maybe just talking to your portfolio companies, but how do you make time for it all-in-all.

Arvind Gupta: Yeah, that’s exactly right and my family is my spiritual uplift.

Dave Kruse: Okay.

Arvind Gupta: It really is, and I – if I get it that way and in the same way that climbing the walls is a big wave as surfing was for me, because I’m raising two little girls and I want them to be strong, independent, creative, curious people and stuff. So it was like I see everything as a sort of a struggle, but the struggle is what kind of results in happiness, is those little moments of overcoming tinny, tinny little hurdles and each time they will make it happen, it’s really cool and that makes the journey super fun. So you know how do you make time, you just have to – you have to remember and make inviolate certain things. So I have on my schedule and M&A and very few things could ever come in front of it. You have to prioritize, right. So like I have – I leave the office at 5:30 on most days at the very latest, you know 90% of days. And that’s inviolate and you know I might pick work back up and I often do at 10.00 p.m. or 11.00 p.m. you know but that chunk of time is inviolate and again, it’s that simple you know for the mental aspect. And seeking out challenging issues at work, like you know staying at – I had mastered a lot of things that are – I understood my job at IDEO quite well when I left. And so why did I leave? You know it is very counter intuitive to leave a job that you’ve become so senior in and you have established so much credibility and all of those things to start over. Why? Because the mental challenge wasn’t quite there anymore and I needed to learn something new, and so that, keeping that mental part predicated a career change for me. Well, I don’t really call it a career change. It was actually just a business model change, but a big shift, from a lot of pieces of the work. So anyway, that’s how I do it.

Dave Kruse: Okay, all right, that’s helpful, that’s helpful. And all right, so we got like 15 minutes left, so we should probably talk a little bit about your IndieBio VC world and I’m curious.

Arvind Gupta: How did we go talking about business?

Dave Kruse: Yeah exactly.

Arvind Gupta: I’ve had enough, that’s all useless figures. [laughter]

Dave Kruse: No, this is great. I mean the stuff we are talking about now, I can talk about the whole time but the podcast is business innovation too, so we should probably touch on that too.

Arvind Gupta: Yeah.

Dave Kruse: But, so how you know this is all kind of one question or it’s like three questions, but you can kind of answer it all at one time. Why do you change to VC and then can you tell us what IndieBio, like just a brief description and then you know some of the good, give some examples like of problems that IndieBio portfolio companies are tackling. You already mentioned one, about the kidney, the artificial kidney, which is pretty amazing, but yeah.

Arvind Gupta: The genesis of me going to venture capital is really starting a company with my wife called Starters, which was a fitness app. So we are versatile people and we see in our family is actually – well it was kind of for our family, our parents that worried us a bit and they just didn’t know how to fit fitness into their lives and so Carissa my wife had the idea that we could just build a very simply video based app that had a little social network attached to it that would ping a little circle of family members that they did their little workout just to start and that would be like a micro engagement. And so she built that, she has a studio and I supported her and it was a pretty amazing thing. I designed for 12 years at IDEO and you know a lot of things that people use every day I’ve been involved with you know, but…

Dave Kruse: Like what?

Arvind Gupta: So you know the Samsung Galaxy Curve?

Dave Kruse: Oh yeah.

Arvind Gupta: So that was something that I did – I did a bunch of things for Samsung, a bunch of things for like screen players and a bunch of strategy stuff that ended up being services that we can all use. The western use of how My Book involved with, so a lot of stuff that people use. But here we are at Starters and build that in a couple of months and then launched it on app store and within a few months there is 7,000 users in 92 different countries and Crisy gets an email, a couple of emails and people are like, you know this app changed my life. We didn’t think we’ll be able to live a healthier live. And I was like man, I’ve been designing for 12 years and no one is ever sent me an email right and here we are with an idea that we had in – we were in China when we had had the idea and on the walls of Sheong and three, four, months later it’s in reality and people are using it. That was very productive. Again coming back to the side that I love, having ideas and creating change with that, creating value with that and so that experience sort of introduced me to venture capital and I was doing a lot of work for venture capitalist at the time, sort of doing due diligence on product focused companies, consumer focused companies. So I ended up talking to SSV and other VC who were saying Ah! You should be on the VC side, but what I found was biology was ready for a moment, because the cost of doing biology basically is dropping faster than Moor’s law currently. And so – but the funding and the business models had not changed. And so what I thought was there is probably an opportunity to help find those companies at an earlier stage than ever seen, but be able to de-risk them quite a bit relative to what people thought and so I drove IndieBio on that premise and to really make it work, I built a lab for cheap. It’s a world class lab, but you know buying blown up biotech startups, selling brand new equipment because they could manage their expenses for pennies on the dollar and so we have a multimillion dollar lab that didn’t cost that much and we are now converting all the startups that we fund CapEx into operating expenditure right. So basically you could now de-risk your company using salary and using you know sort of more like a tech startup and tech economics but following the scale and the magnitude of biotech impact. So that’s what IndieBio was founded under. So we’ve had some good success at par in this model.

Dave Kruse: I mean you must have some lot of fun days. I mean if you just go through your portfolio companies, it’s just like a sc-fi dream. But I mean you are doing like a really important like – so many of those if they work, it’s just going to change peoples’ lives. I mean not all of them, but yeah its…

Arvind Gupta: Yeah. So I mean I think the most important thing is – like my definition, like a lot of the companies we choose has to change peoples’ lives the way we want to fund them. Because biology and life sciences are such that the new mirror that makes us who we are and the stuff around us what it is, that’s the more powerful technology on the planet. So if you look around the room that you are sitting in right now, most of that stuff is made – a lot of stuff is make from life, right, with building materials you know what we think about, how we are sharing ideas. It’s all coming from people, it’s all coming from animals and from plants and fungi and things like that. So by rewiring this stuff we can actually create massive efficiencies where we’ve never seen them before. So I like to call them intractable problems. Basically problems that don’t seem to be – what seem to be at a paradox or unsolvable, like clear foods is one of them. Clear foods is one of our first just talking about out agricultural companies. They are making chicken egg whites without the chicken by taking the DNA that codes, the chicken egg like proteins and putting them into leaves and then brewing the egg white as we brew beer. Now that you don’t have to raise a chicken, you don’t have to feed it, have it lay eggs and then crack the egg and throw away the yolk right. Because world demand for egg white as far as seeing the egg yolks and so we end up with this incredible waste and cruelty and more issues around the animal. So that…

Dave Kruse: Yeah, go ahead. I was going to say you know how far away is – it’s the size of these companies take a while to nurture and then get out into the commercial world, like that one versus the kidney – the kidney one is I am sure a long path, but you know like with the egg white one, what’s kind of the like the timeframe do you know?

Arvind Gupta: So the timeframe for, for Clear Foods would be rather short, you know two or three years. I mean I have the egg whites already. Producing the egg white isn’t the hard part; its producing it at a scale that would produce tons of it to customers around the world, that’s the hard part and so you know like I think all of these things are really important. Like Memphis Meats was one of our investments. We were the first check-in for them and their making – they are the world leader in making clean meat, and clean meat is meat that has been produce in a lab. A mussel grown literally in a silo with that nutrient and you can grow just the mussel that you want to cook, rather than have an animal be born or slaughter. And not only does it solve a lot of moral issues, but more importantly for me as a venture capitalist, it solves a lot of efficiency issues and it solves a lot of health issue around transportation of rotten meat and things like that and pathogens that occur within animals, and antibiotic resistance and all of these things. So it’s a – these technologies are, you are just starting to see how life can be redesigned and the reason we are, is because these could be too expensive to do anything other than drug. Only drugs produce the risk reward ratio like farm and meat. So it did cost me $10 million to be a first check into an idea. Like scientist said I have an idea, I want to do this right, and I need $10 million to even start. Well, VC math will say that at least – they have at least a $5 billion exist to make that worthwhile. So the only thing that can really do that is okay, well we know pharma, you know therapeutics produces this kind of revenue in part because of that math. Once you lower the costs or life sciences and biology, all of a sudden you end up in a pretty amazing place, you have a Cambridge explosion of new life science vertical, like cellular agriculture because you could take new risks that you couldn’t take before since your cost basis is so much lower. So that was one of the things that I was most excited about trying with IndieBio is, all new verticals open up and I’m very glad to see that they did.

Dave Kruse: Yeah, it’s definitely an exciting time and a nice investment thesis. I mean that was three years ago, when you were looking at this. So now I think people understand that, but three years ago I don’t know if that was quite as accepted.

Arvind Gupta: Yeah, yeah I mean. When we were corresponding to these guys, our big question was will people eat it you know, because the science are fairly simple and straightforward, but the real question is would people eat it? Would the public even take it up and the answer is…

Dave Kruse: I’d eat it.

Arvind Gupta: The answer is pretty amazing, yeah exactly. You know it calls the shot like, this isn’t a scary thing. I’ve been very surprised by the response to be honest, that was the biggest risk to me.

Dave Kruse: Well, I think even the younger generation, I know we are running out of time here, but we are going to have you come on for another show, but my 12 year old niece, she was just talking at dinner about how you know she – I think she is doing like a presentation on this essentially for like animals and like how she is excited for like this, well she called it 3D printing of food, but yeah.

Arvind Gupta: Yeah, I love that. She is great, I certainly got to use that.

Dave Kruse: I’ll ask for that presentation and send it over to you.

Arvind Gupta: That’s amazing.

Dave Kruse: Yeah, in little Madison here. All right so I think we have just a little bit. We got many more questions, but I was curious, from a VC standpoint you have focus on synthetic biology, but you still have a pretty diverse set of companies across different industries. How do you analyze, well the technical and team risk. Of course there is always the team risk, but the technical you bring in outside experts and how do you understand the…

Arvind Gupta: Yeah, we have a really deep mentor network. So you know first our team includes two PhDs, you know one from Harvard, one from Scripps and so they are pretty broad technically. We also have like just like a very strong scientific network and so if something comes in say with antibody drug conjugates or something like that, you can go talk to the head of biologics or of large pharma and say hey, what do you think of this? Or if a computational platform comes in, we could talk to another bench where that’s a leader in bio pragmatics and that kind of stuff. So we leverage our network heavily and for the mentors it’s great because they are seeing the very cutting edge of what people are thinking about. So it’s great for them as well to just keep an eye on where the industry might be headed. So that’s very helpful, but we really have like four due diligence questions that we ask kind of everyone, which is like the first one is, is there a technical insight that solves a deep and vast problem? And so we – that vast problem is to be a billion people. I think that’s really important for what we have seen. But most importantly and I think this is what we have after batch one, the team has to be, has to have Ph.D. level expertise. Biology is something you cannot wing and it’s not something that you learn on the side. It’s not – you know there is no code basic where you can just put stuff together. To have a deep insight, you have to have deep education in science based companies. And then the second one is, general insight that becomes a product that will really change someone by. So if that product can, then we have – could it become a business that would essentially generate revenue. So I think that’s a big, big question. Like there is a lot of great products, but there is no way to extract value from it or its going to be very hard to extract value from it, because maybe the pain is big enough or something like that. So you got to be able to generate the revenue. And then finally the last question is well, even if we can make it a business, can this business become scale to produce a billion dollar outcome or change the life of like I said earlier, a billion people. That kind of gets in the scale and then do it within seven years, which is likely to form data from the 10 years. So if you answer yes to all of those questions, then we move on to doing an interview with the team and then we have two or three interviews. We have a very deep due diligence process, partially because we have a quarter million dollars that we give to the teams, and we just – we have seen over and over again that in the end the team is what matters. The dedication of the founders to solving the problem that they have and that is what we just kind of look for after we pass technical due diligence.

Dave Kruse: Okay, interesting. Well, I think that’s a great way to end the podcast. I think we are out of time unfortunately, but Arvind I definitely appreciate your time and this is awesome. It was great meeting you and learning more about your past and what you are up to now. I definitely appreciate it.

Arvind Gupta: Well, I really appreciate the opportunity to come on to your podcast and wish you luck in this and if there is anything you want to ask me or you need like there is bunch of interesting leads that would happy to chat with you about their perspectives and some of these companies are trying to change the way things are done. I think they would be really interesting to chat with as well. So I’ll be happy to introduce you any time.

Dave Kruse: Yes, those were two things for you, that was one of them. So I would definitely be curious. I can send you a follow up email.

Arvind Gupta: Yeah, we’ll just do a follow up email. It was super helpful. Yeah, I really enjoyed it and thanks again for the invite. I’m really honored to be a part of Flyover Labs.

Dave Kruse: Definitely and thanks everyone for listening to another episode. As always, I greatly appreciate it. Thanks.

Arvind Gupta: Bye.