Tag: Day One Entrepreneurs

Embracing the Intersections of Innovation: Our Investment in Nautilus Biotechnology

(Sujal Patel and Parag Mallick, co-founders of Nautilus)

The code of life, biology and chemistry, have been constantly evolving for millions of years. The code of computing has functioned for less than 100 years. Today, those domains are coming together to transform the ways we understand and improve life and health. The biological and chemical sciences are intersecting with the computer and data sciences in precision medicine, digital pathology, proteomics and more. At Madrona, we believe these intersections of innovation will be at the forefront of major breakthroughs in research, analysis, diagnostics, clinical processes, preventions and cures. While our 25-year history has primarily been focused on transformations in information technology sectors including cloud computing, applied ML/AL, Software as a Service and Internet/e-commerce, we have more recently embraced opportunities where biotech meets infotech.

A company that embodies this emerging theme is Nautilus Biotechnology. Madrona has helped shape the company for almost four years, working together with founders Sujal Patel and Parag Mallick from day one. We provided office space and support for the company in the early days. We co-invested in the Series A with Andreessen Horowitz’s Bio-fund a few years back. And, today, Nautilus announced their $76 million Series B round with new investors including Vulcan Capital, Perceptive Advisors, Bezos Expeditions and Defy.vc.

What has drawn us to this investment theme in general and to Nautilus in particular? It is a combination of the expansive opportunities for scientific discovery, the scale, speed and agility enabled by modern compute and automation, and the continuous improvement in patient and disease understanding enabled by machine and deep learning. But, more importantly, it is a combination of founders in Sujal Patel who we have worked with for almost 20 years – first as the founder and CEO of Isilon Systems (and Madrona Strategic Director), and Parag Mallick who is a Stanford Professor with a focus on proteomics and systems biology with a background in biochemistry and computer science.

Nautilus’s Approach to Innovative Thinking

Biological sciences have been transformed over the past twenty years first by sequencing the full human genome and then by the “commoditization” of genomic sequencing (Illumina, 10X Genomics). Yet, a human’s approximately 3.2 billion nucleotides and 25,000 genes are just the beginning. The DNA functions as a set of instructions, a static view of what might happen, that needs to be transcribed and translated into the tens of thousands of proteins that drive all life — selective expression of proteins drive cell differentiation, metabolic reactions, stimulus response and, importantly, disease. Those proteins act dynamically to determine how our body functions (and malfunctions) which creates substantial measurement challenges.

From the beginning of Nautilus, Parag and Sujal set out to think differently. The core challenge they were trying to tackle: how do we make the proteome as accessible and impactful as possible by overcoming the limitations (coverage, throughput, ease-of-use) of existing protein analyses approaches. By reimagining proteomics as the foundation for improving the health of millions of people, Nautilus strives to enable new horizons in basic science research while transforming drug discovery and personalized/precision medicine.

Nautilus approaches the challenge of mapping the proteome differently at every stage of their automated and re-imagined process. That starts with the biochemical steps for how samples are prepared on the front end and continues through to the cloud computing, data science and machine learning techniques used continuously on massive datasets throughout the process. They leverage a robust understanding of biochemistry and the abundant technological resources that are only now available in scalable ways through cloud computing. There is so much more for the Nautilus team to share, but we defer to them on how and when to tell their story more fully!

Madrona’s Three Key Intersections of Innovation Concepts

Madrona’s investment in Nautilus and their approach to re-imagining the ability to leverage proteomics is just one area where biological sciences are intersecting with computer and data sciences. In the past several years we have increasingly seen the growing interdependence of these disciplines and the ability they have to change lives.

There are many more categories where the intersections of innovation apply. Digital pathology is developing models for image-based tumor detection, cancer research is applying machine learning to identify genetic or immune system biomarkers, and CRISPR screening techniques are helping to rapidly understand the mechanisms of action underpinning disease. Three key concepts span these intersection areas – discovery, automation and continuous learning.

  1. Discovery: The more we know about human (and non-human) biology, the more we realize there is so much more to learn. The pursuit of basic science research and the curiosity to explore new areas of discovery are central to the breakthroughs that lie ahead. Take the relatively new learnings about how bacteria’s immune system fights viruses by turning the virus’s DNA against itself through CRISPR-associated proteins (Cas) and guide RNA. In just the past decade, the natural function of the CRISPR-Cas systems has been harnessed intro powerful molecular biology tools to edit the genome, to the point that we can now edit at the base level. Modern information technologies will facilitate the front-end research and leverage discoveries, but the opportunities start with new biological insights.
  2. Automation: Biology was historically the world of wet labs filled with samples, test tubes and pipettes. Today, wet labs are combined with dry labs where computer modelling, simulations and in silico analysis occur. And, increasingly the processes of these two lab environments are automated and digitized. New approaches to sample prep and handling, to “seeing” and measuring the impact of reagents and then gathering massive amounts of data to rapidly analyze are emerging. The automation of preparing inputs, running experimental processes and analyzing outputs has the potential to mirror the journey of semiconductor technology from bespoke workflows to highly digitized, specialized and scalable processes. This automation, combined with massive computing resources, can lead to both broad scale breakthroughs and cost-effective precision medicines over time.
  3. Continuous Learning: Digitized data, across a mix of data types and formats, can increasingly be combined and normalized to transform information into insights. There are massive amounts of data to be captured through increasingly sophisticated techniques like high throughput sequencing and screening and cryo-electron microscopy. Elements of data management, modelling and machine/deep learning can then be leveraged to deepen the insights. In fact, operationalized data models can continuously improve our understanding of a mutation, antigen, biomarker or general disease state. In time, this should lead to curative approaches to most cancers, gene editing that prevents diseases and even rapid detection and containment of viruses.

The Road Ahead

The Madrona team is energized by our journey to continuously learn and support companies at the intersections of innovation. In addition to Nautilus, we have made substantial investments in Ovation.io, TwinStrand Biosciences, Accolade and Terray Therapeutics. And, we have seed-stage investments in a few early-stage companies within this investment theme. But today we especially want to celebrate the news about Nautilus’ Series B round and the potential for this outstanding team and company to positively impact the world by providing affordable and accessible proteomic information and insights to all those who may benefit from them.

FreightWeb For The Win

One of the most fun opportunities I get as a venture capitalist is to partner with founding teams from the very beginning of their journey. It’s with great pleasure that I get to announce one such journey, which we have been working on for a while … our investment in and partnership with Will, Marty, Farah and team at FreightWeb Services.

FreightWeb has all the ingredients we love to see in Day One companies:

  • Massive markets ripe for new thinking and innovation
  • Founders with deep domain expertise who understand the customer(s) and pain point(s)
  • Founders who have been part of rocket ship rides and know what to do when they grab a tiger by the tail
  • Products that leverage copious amounts of data to deliver simple and effective solutions
  • Solutions that deliver clear, tangible, and near-immediate customer value

Simply put, FreightWeb Services’ mission is to increase the utilization of trucking capacity that moves freight in the U.S., an $800 billion market in 2018. As we started collaborating with the FreightWeb team and digging into the domestic trucking market, we were surprised to learn that most trucks transporting loads in the United States carry less than half of their maximum freight capacity. There are a number of reasons for this, but a primary one is that, as a shipper, it’s difficult to buy a fraction of the space in a truck. If you have less than 5 pallets to ship, there’s a service called Less than Truckload (LTL) shipping that works reasonably well. If you have 20+ pallets to ship, renting the full capacity of the truck (Full Truckload Shipping, or FTL) is a relatively simple and cost-effective option. But for all of the loads in-between, there is no great option. Mid-sized loads (often called partials) are hard to quote, hard to book capacity, and expensive. But they don’t need to be. And this is the problem FreightWeb is singularly focused on solving.

Will Payson, the co-founder/CEO of FreightWeb, uses the virtualization of cloud infrastructure, and the ability to sell compute and storage in bite-sized pieces, as a helpful (albeit rough) analogy. Many moons ago, when we wanted to run web applications, we’d have to buy or rent a server dedicated to running that application. Renting a server in internet land is akin to renting a full truckload to move your payload. If you don’t have much traffic on your server, the server capacity goes mostly un-utilized and your rental cost per unit of consumption is high. If you don’t have a lot of stuff to put in a truck, the truck space goes mostly un-utilized and the cost to move a pound of goods is very high. If only we could find ways to rent truck space, on-demand, measured in arbitrarily sized chunks, we could make the system much more efficient.

This problem is worth solving for all the players in the freight-hauling ecosystem. For shippers, buying freight in chunks of any size means they no longer need to optimize their shipping to conform to the restrictions imposed by the current system. They can buy smaller chunks of trucking capacity more cheaply while moving freight more frequently, shifting the balance from batch to continuous flow to better adapt to market demand. For carriers, they can better fill their trucks with freight from multiple shippers, increasing capacity utilization and total revenue. Innovations that enable the parties on both sides of a transaction to benefit financially are hard to find, and that’s one of a number of things that make the FreightWeb opportunity compelling.

We were first introduced to Will by Mike Fridgen, co-Managing Director of Madrona Venture Labs (MVL), a startup studio founded at Madrona in 2012 which has grown significantly since then. Many entrepreneurs start their journeys collaborating with MVL to develop their concepts and accelerate early learning and building. In this case, Will and his co-founder Marty were ready to go, but needed a strong technical co-founder to build out the core technology. Even before we wrote the check, our talent team (Matt Witt and Shannon Anderson) and Chief Product Officer/Venture Partner, Ted Kummert, helped define the spec and develop a list of target candidates for the co-founder/CTO role. We were delighted when Farah Ali, a seasoned technology executive and top of our prospect list, chose to come aboard as a co-founder to launch the company.

It’s early days in the life of the company, but we have been very impressed with the caliber of the team that FreightWeb has assembled, we are excited about the vision they have set out, and we look forward to our Day One for the long-run journey together.

Founded and Funded – Building a Customer Satisfaction Team (and a lot more) with Oliver Sharp

In this episode of Founded and Funded, Tim Porter, speaks with Oliver Sharp, co-founder of Highspot about the journey of building the company. They talk about the inspiration behind Highspot (corporate content you need for your job should be as easy to find as a how to YouTube video), building a culture of customer satisfaction from day one, and how people from large companies transition (or don’t transition) to startup life.

Highspot has raised $120 million with their most recent round of $60 million announced in June of 2019. Highspot is a sales enablement platform that helps sales people find the content they need to close deals.

The team came together at Microsoft and the transition to a startup was a return to their roots as hands on learners. Though senior contributors and managers at Microsoft, as Oliver says “a startup doesn’t care how senior you are – you have to learn it all yourself” and they all had to re-learn the hands on work of creating and marketing a product. Customers were at the center of this.

Some lessons from this discussion:

  • Customers have crucial insight, though you have to figure out which ones to pay attention to early on. Oliver talks about how they learned more from the customers who passed than the ones who bought the product in the very early days. The ones who passed had reasons they didn’t and understanding those were key to building the product.
  • But while focusing on the product is crucial it’s not the way you succeed. You have to take your technological masterpiece and tune it to the customers’ needs.
  • And the words are important – How you define the problem may not be how they define it. Highspot originally set out to create the best content search out there to help marketers and sales people identify the best content for a given situation. But your customers “don’t think about search problems, they think about the making more money problem.”
  • So you both need a great product and you need the story you are telling your customer to fit with what they are looking for, or the pain they are feeling. You aren’t selling search (in this case) you are selling the solution to their problem (which you know is mostly search.).
  • CSAT or Customer Satisfaction measurement is not a new thing in business but with SaaS it is more tightly woven into the software renewal cycle. And it’s so much easier to measure and to react quickly. SaaS puts more emphasis on the customer satisfaction as a direct ingredient in sales.
  • Building a successful CSat team starts with the product creators. Start with the people who helped design the product. Those people are the most invested in what the product is now – hearing from customers is the most powerful way to learn where you went wrong.
  • Other topics of interest are building a team from junior on up – how hiring college grads has worked out extremely well for HIghSpot – and Oliver covers what not to say in a startup interview!

You can listen here or on any of the platforms you prefer – iTunes, Spotify, Google Play, SoundCloud, and Stitcher

Our Investment in Kush Parikh and Player Tokens

I am pleased to announce Madrona’s seed investment in Player Tokens Inc. (PTI) and our partnership with Kush Parikh, the founder and CEO. Kush joined Madrona as an Entrepreneur in Residence (EIR) in late 2017 and explored several ideas with the Madrona team, including a nascent category called crypto-collectibles. Player Tokens is launching today.

There have been a number of interesting crypto-collectible projects … this Medium post by CryptoKitties, one of the pioneers of the space, does a nice job covering both the definition of crypto-collectibles and some of the earliest experiments. This post is another good 101.

As Kush and we explored the world of crypto-collectibles together, a few things really stood out. First, there is an opportunity to bring together the digital and physical worlds (something my partner Matt lovingly describes as DiPhy) to create an entirely new and compelling collectible experience, powered by blockchain. Second, this intersection of worlds is particularly powerful in professional sports, where fans have the opportunity to encounter and interact with their favorite athletes, at games, on television, and through social media. Third, the crypto-collectible experience as it exists is entirely too complicated for the typical pro sports fan and collector.

These observations and a compelling vision for ways that crypto-collectibles could be the entry point to a whole slew of digital and physical fan experiences is what prompted Kush to found Player Tokens at Madrona, and for us to begin this journey together. Step one on the journey … talking to fans and collectors. Having lived in epic sports towns like Seattle and Chicago, we’ve had no shortage of conversations with sports fans and collectors who are interested in modern ways to buy, sell, and trade, authentic, rare collectibles for their favorite players. Through Madrona’s partnership with the OneTeam Collective, we’ve also had the opportunity to connect with the players, associations, teams and leagues, all of whom are excited about the future of crypto-collectibles and the opportunities they will enable in the professional sports world.

A mix of product vision from Kush and team, and feedback from fans, collectors and athletes alike, have shaped the initial version of Player Tokens launching today, as well as the long-term roadmap for PTI. We are excited to be working with Evan Kaplan and team at the Major League Baseball Players Association, who represent the Major League players, as our first business partner in this journey; we look forward to building great things together for fans and professional athletes across the globe.

Special thanks to our friends Ahmad Nassar, Ricky Medina, Casey Schwab and team at NFL Players Inc. / OneTeam Collective, who have been great thought partners and connectors for PTI at this early stage in the life of the company and the category.

The Epitome of a Day One Entrepreneur

(Jason LeeKeenan and Russell Wilson of TraceMe)

At Madrona we meet many outstanding entrepreneurs and innovators. Sometimes we meet them when they are starting a company, like Sujal Patel from Isilon or Jesse Rothstein from Extrahop. Other times, like Aaron Easterly from Rover or David Shim from Placed, we got to know them as “rising stars” at prior Madrona companies before they became an entrepreneur. But, this year we got to know someone who for so many of us we feel like we already knew. Over the months of working with him and investing in TraceMe, we have discovered how much more there was to learn about this amazing Day One entrepreneur and the company he started.

The entrepreneur is Russell Wilson and the company he founded is TraceMe. You likely know him best as the All-Pro, Super Bowl Champion, starting quarterback for the Seattle Seahawks. And, attributes that have contributed to Russell’s success in pro football are among those that make him the epitome of a Day One entrepreneur. He is customer-centric, passionate about the opportunity, focused, determined and an attractor of complementary talent.

TraceMe Product Showcase. Russell Wislon, Ask Me Anything.

On the talent front, Russell worked with our friends at Pioneer Square Labs to incubate TraceMe and recruited an amazing star in Jason LeeKeenan to be CEO. Jason’s background includes key roles at Hulu in the early years and Zulily. And, while he is warming up to the Seattle Seahawks as a life-long Patriots fan, he deeply understands the TraceMe opportunity and how to build a sustainable company through innovative content. Jason and Russell are building a world class team of software engineers, video producers and content editors at TraceMe to attack this challenge. Madrona is delighted to be partnering with them as the lead investor in TraceMe’s $9 million Series A financing closed in the spring and announced this week.

At the heart of TraceMe is the idea that celebrities and their loyal fans want more direct and engaging ways to interact. We all see clues about this interest in social media experiences that go beyond current channels in platforms including Twitch for gamers and YouTube for live video bloggers. TraceMe is building a platform tuned specifically for celebrities like Russell and their super fans. TraceMe will create meaningful experiences for fans with compelling content, products and experiences.

We hope that fans will download the TraceMe app this week and give it a try. The app is in beta so your feedback will be helpful as the TraceMe team prioritizes new features and content. Similar to how we have gotten to know Russell Wilson better, we hope you will feel closer to him and the things he is passionate about. These include faith, family, football and finding ways as an entrepreneur to help fans more personally connect with celebrities. As opening week of the regular NFL football season kicks off, we look forward to partnering with the great Day One entrepreneurs at TraceMe to help them win big!