Grow by Experimenting with Cheri Ackerman, Cofounder & CEO of Concerto Biosciences

This week I had the absolute pleasure of chatting with Sheri Ackerman, who is the co founder and CEO of Concerto Biosciences. And we just had a lovely chat. After her PhD, she got her postdoc at MIT where she developed K chip technology that became the foundation of her company. And so she is a classic scientific founder.

And I just loved how real this.

Conversation was because we talked about the challenges of being a scientific founder, having to learn all the business stuff that goes along with creating and growing a company, in addition to nurturing this technology that she's so passionate about. And it's always a struggle and I.

Don'T think enough people talk about it openly.

So I loved how open she was about it. She is clearly so in love with her company and the culture she's created there and the folks that work with and for her. And I just think that you're going.

To get a lot out of this.

Especially if you come from a scientific background and you've found yourself trying to figure out all of the terminology and lingo that goes on the business side of things. And which books do you read and how do you learn things? Sheri is such a pleasure. And without further ado, let's jump into it. Welcome to Building Biotechs by Recredomics Consulting. We've helped over 90 biotech, life sciences and venture capital firms strategize and hire thousands of employees to scale companies that impact human health. We speak with those at the forefront of growing biotechs to learn their tactics on building these companies from the ground up. I'm Karina Klingman, founder and principal at recredomics Consulting. Enjoy the show.

Thank you so much for coming on the show. I'm really excited to have this conversation with you. We like to hear about career paths on this show. So what did you want to be when you were 7? What are you now and how'd you get there?

It was probably a teacher. My mom was a teacher. And I also remember playing school when we were kids, and I often played the role of the teacher. What I do now is I'm the CEO of Concerto Biosciences, which, interestingly enough, has a lot of teaching components associated with it. A good fraction of my job is teaching other people in the world, whether that's partners or investors. What we do and how I got here is I did undergrad at Calvin University. It's on the western side of Michigan. That was in biochemistry and Spanish as a double major. And then I did a PhD in chemistry at the University of California at Berkeley. And then I came out to MIT to do a postdoc. And it was while I was doing my postdoc in biological engineering that I started working on a technology called kchip, which one of my co founders invented. And then he and I and some other people teamed up to form Concerto's co founding team and ultimately spin that out into the company.

So you were actually working on the technology that spun into this company during your postdoc. Um, how did you decide that this was worth building a company around? What was that evolution?

Well, it took us 18 months, so it was not quick. My co founder, Jared K. Was actually the person who sort of asked me whether this was something that I would be interested in. And we did a number of accelerators. The Broad Institute had a biomed startup accelerator, kind of a January term thing. And then the Harvard Nucleate program. Its very first year was 2019, and that was back when it was still called the Activate program. And we did that and that went well. And sort of every, every stage we thought through, are we getting strong enough signals that this can't work, that this technology doesn't have commercial traction? And the answer kept being no. It kept looking like it really had a promising future. And we were very excited about everything that the tech could bring to the microbiome industry. Um, and so ultimately decided to spin it out. But we didn't get money to do that until the spring of 2020, which you'll remember other things that were going on in the spring of 2020. So we finally ended up spinning out in June of, of 2020.

What are you doing over there? What are you bringing to the world?

Usually when I start talking with an, a new investor, a new potential partner, we really start from just what are the assumptions that someone is bringing to thinking about the microbiome? Because I think different people have heard a lot of different things. Um, so where we, we try to meet people wherever they happen to be. And knowing that this is going out to a very broad audience, maybe I'll start from super basic, which is just that your, your body is covered in so many different kinds of bacteria. And I think a lot of the time in our society we think about bacteria as being bad for you, um, but they're actually really essential for your health. They help us digest our food, they train our immune systems, they provide small molecules that go into our blood and get to our brain and impact things like mood. And so we kind of saw this dissonance between the, the types of products that are available for people to interact with bacteria versus the way that science is telling us bacteria are super important. Because if you go to CVS or you go to your doctor and you know, you start talking about bacteria, you're going to find products like shampoo and soap and toothpaste and mouthwash and antibiotics and antifungals and all these things to destroy our bacteria. So where are the products that use our bacteria in a way that is good for us? And one of the things that Concerto really believes is holding the field back is understanding how bacteria work together as complex communities. So a lot of microbiologists in the past have been limited to taking bacteria out of their natural environment, putting them into a petri dish and studying them one at a time. Or we'll try to make lists of the microbes that are in healthy people, in sick people, and kind of compare those lists and oh, maybe this one is good or this one is bad. It's super hard to actually take a complex community of bacteria and study it all at the same time and actually break it down into how does microbe one and two work together? Two and three work, work together. What about one, two and three? Um, this. If you know anything about combinatorial math, this just explodes into billions of combinations that you have to try to study. So what we did while we were at MIT in, in my postdoc and my co founder's grad work is that we invented this technology that solves that problem. It allows you to actually understand how a microbial ecosystem works together. And then we can design products that are based on this much more complete picture of how the microbiome actually works. And then we're using that to make products for things like atopic dermatitis or eczema, as well as other skin conditions. And then we just started a program in women's health, so, so working on chronic vaginal yeast infection, um, if you have a one off yeast infection, not a big deal, take fluconazole. But it's actually quite common to get yeast infections over and over and over again. And there's, there are not good solutions for that. Um, so that's another area that we're working on right now. But you can imagine applying this technology basically anywhere that microbes grow. So places like agriculture and consumer goods, cosmetics, all kinds of food science. So we collaborate with other companies that work in those spaces and then help them also develop products that are hopefully useful and healthful for people.

So I'm imagining the name Concerto is sort of this symphony of everything working together. Is that where the name came from? Am I, am I nailing that?

Okay, got it, got it. Yeah. A concerto is a piece of music where you have a single central player. So a violin concerto has a violinist and then there's a symphony that supports that violinist. And the way that we think about our products, we actually call them ensembles when we make our products and we think about them as a collection of microbes that's supporting some central behavior or function that's useful for the person that we're trying to get everyone to do together.

I love that. That's really good. Marketing and branding is for you. Yes. We've spoken with a couple of people who do branding and marketing for biotechs and one of their complaints is that often names and things are very obscure and hard. They're very scientific. So I feel like yours has real marketing legs, which is cool, especially where your company has a lot of consumer product endpoint possibilities, whereas a lot of biotechs don't, or a lot of them are going to go through, you know, become a cancer therapeutic or things like that. Yours has tons of direct to consumer applications, which is great. Are you also looking at some therapeutics as well?

Our first product is actually specifically for atopic dermatitis and that will. In order to make the claim that this treats ad, we actually need to do the clinical trial process, which we're in the process of starting. Excellent.

What's the, what's the timeline for that? What are you thinking?

Sometime later this year?

Great.

Which is crazy to think that, you know, in 2020 we were a set of post it notes and now we actually have something that could be in the clinic later this year. It's really wonderful.

I want to talk about building the company and some of the challenges you've faced. You started in an interesting time. As you mentioned, 2020, there were some things going on and then we entered and there was a good funding climate, though interestingly at that time, and now we're in a not good funding climate. What have you noticed as you've built this company through that time period? What are the challenges and opportunities in that?

Things that come to mind are things like building a team in a world where we couldn't physically be in the same place for the first year and a half that the company existed and there were challenges associated with that, but there were actually a lot of benefits associated with that too in terms of building resilient systems that now we get to have a hybrid company that exists across many different states and take advantage of a Much wider workforce than what we might otherwise take advantage of. And we did not have to make the transition from being fully in person to dealing with remote. We were born remote. And, yeah, I think that has had some ups and downs. The other thing that comes to mind is just, yeah, fundraising in 2020 was ridiculously easy. And I, and I say that knowing that all of us were fundraising via zoom, which was weird, but the ability to just click in and click out of, you know, 70 different investor meetings and everybody's trying to put money to work, yeah, it was much, much easier. The last time we raised was actually the kind of winter of 2021-2022. And so we were in the middle of raising around as the crash started happening. And so closing ended up taking a lot longer than we thought it was going to. Where we're at now is very much facing the. What had become an uphill battle to get investors to part with capital. Even when the science is awesome, the team is great, the mission is fantastic, it's just super tough. So, yeah, I guess culture is one thing that comes to mind. And then the fundraising climate has changed a lot in the last four years.

Are you raising right now? Is that the next goal?

Well, if you ever meet a CEO who tells you that they're not raising, they're lying to you.

We interview both sides of the table, which is really fascinating to hear. It is difficult. There's less capital and it is. There's wariness about parting with that capital, to your point. So meeting milestones or having met milestones along the way is really key. And it sounds like you have. You're on track to be in the clinic, so that has to be a plus in that category. Right. What other challenges are you finding, though? What are they raising with you that you're having to answer more questions around right now?

I would say being a platform company has stopped being sexy in the last three years compared to when we first started raising money. Everyone is looking for breadth and very much focused on potential upside and how big can this possibly be. And I think where people are now is focusing a lot on downside and more on what are the minimum number of steps to get from where we are to some kind of return or exit. And platforms are a long game, they are not a short game. So it is a lot of people are much more focused on single assets that are later stage. It's a lot easier to calculate the risk reward around. We're going to put 50 million into this asset to run a phase two study. These are the odds of this study going well and therefore this is the value of the company right now? If we invest in 10 companies like this, then the odds of us having, you know, X return are high. And that's what allows biotech VCs to run their shops. So calculating that all out for a platform company is a lot more complicated. Especially when your platform has applications across therapeutics, consumer agriculture, food science. I mean trying to find an investor who's even willing to play in that broad of a space can, can be tough. And so we've really positioned kind of the, the data that we're collecting and how powerful that is compared to what the microbiome has ever had before. And also as you were talking about with the milestones that how do you prove out a platform, you actually get data on people and then you show that the thing that you found works the way that you said it was going to. And that adds a lot of power to the platform. Not just, yes, this asset is now more valuable because it's behaving the way you expected, but also the way that you found the asset is now more trustworthy. And so this just builds the entire, the value of the entire company.

Let's go back to the talent aspect. We worked with many clients that pre pandemic were flying candidates across the country to have in person interviews, you know, we're putting up in a hotel room, they're having dinner with the team, all of that. Obviously that ground to a screeching halt and those companies had to evolve their whole outlook on how do you hire, how do you gauge if someone's going to be a good fit for your company. And so you got to figure that out for yourself and take advantage of a more widespread, geographically widespread workforce. And you mentioned that in terms of being able to leverage a wider network that was valuable to you, have you also found that you've had to do less actual full time hiring? Have you been able to leverage contractors, consultants, firms and things like that?

We do leverage consultants. We have a much more thorough vetting process for full time employees than we do for consultants. Our hit rate is for full time employees is extremely high. The people we hire we love and they stay the. Our hit rate for consultants part time work is maybe less high and sometimes I think that's because it's a lot more transactional where you're just looking for someone to get the thing done. And so putting in all of that time of, you know, am I going to do a full non technical interview deep dive to understand how this person got to where they are in their career and tease apart how they handle conflict and whether they're going to have support our values and those kinds of things. I think we don't do as much of that vetting.

That makes a lot of sense.

It's good.

It's a good outlook to have to hire the full timers and really vet them and then have a contingency crew of contractors. We're seeing a lot of companies do that. Consultants, contractors, fractional help because it extends your Runway. It's expensive to hire people full time. So, you know, when you're looking at commercializing something, a part of your platform that you know, you're going into consumer space, like, do you really want to hire for that or do you want to test the waters first?

That's.

That's sort of the. A great value there.

I love that outlook.

And I think that the newer founders that we're seeing, the folks that were founding companies post, you know, during and post pandemic, they just are comfortable with that. How big is your company now? How many people do you have? Hey there. Just a quick break. I wanted to let you know that if you're listening to this podcast because you are exploring careers in biotech, which it turns out quite a few of our listeners actually are, you might be interested in the Biotech Career Coach podcast. It is brought to you by our sister company, the collaboratory Career Hub, which is our career development community. If you would like actionable tips on job seeking and career development, that is the place for you. It is a companion podcast to our Career Coach column that we write monthly in Biospace, but we go a little more in depth and sometimes we have special workshops and all of that good stuff. So if that sounds interesting, click the link in the show notes or search for the Biotech Career coach on Apple Podcasts or wherever you get your podcasts back to the show.

We are 22. You'll be 23 in about a week and a half.

You're in the. You're in no man's land right now. You're in the putting departments together and getting leadership in. That's a really fun and challenging phase. So how are you navigating that?

With a lot of iteration. The first we. We have a set of four core values, and our first core value is grow by experimenting. And I think that is something that really helps us navigate situations like this because everything we do, we can just frame it as an experiment. We're going to try a world in which we have an org Chart with departments and we can outline the reasons why it is helpful to have departments. And then we can tell everyone we're going to try this for some amount of time and then we'll evaluate are the communication channels that we're setting up working, tell us what's not working about, you know, the organization that we're setting up. Right now going into Q2, we're going to be changing the way that we do our OKR construction. So it used to be that we had a whole bunch of different brainstorming meetings across all of the different teams. And I and all of all of the co founders would sit in on every single brainstorming session so that we would have a full picture of what's going on. It's too much like I can't hold all of these things in my brain and it doesn't really reflect the organizational structure. So this time around we're thinking about what if we actually have hierarchical brainstorming sessions for the first time ever. And so designing that experiment, this organizational experiment of we are going to try to build okrs without Sheri having seen every single thing that's going on and here are the reasons why. And then afterwards getting to evaluate, did that work? Did that not work? Um, I think building that in to the culture from the very beginning gives us a very low bar to clear for trying new stuff. It, it makes everybody calmer about, oh, we're just gonna run an experiment and if it doesn't work, we get to say that it didn't work and then we can change it in the future. Nobody stops stuck. I think it brings out a lot of creativity and buy in from everyone.

That's a great, a great way of explaining it. I love the experimentation angle and I always say you win or you learn. So you're going to either find something that works great or you're going to learn what doesn't work and iterate. And I think too that builds a lot of psychological safety in for your employees. Knowing that this is the environment where we try things and we learn and that lets people tell you what's not working, that psychological safety is really important. So you came in without a network in the biotech space. How did you find that network? How did you grow that network? I know you were part of the Rhodes accelerator and Harvard's accelerator and all of that, but you know, what was the process of growing your network?

I was very happy to have started building that network for a year and change before the pandemic started. I think that is an Area where the pandemic did make things a lot harder for us for the first year and a half. I think the most effective way of building a network is getting referrals. So when we find someone who is excited about what we're doing and that person is willing to advocate on our behalf to someone else who holds resources that are useful to us, whether that is money or connections or influence in some organization, that kind of friend of a friend thing is extremely important. And then building, ideally building a personal relationship with that friend of friend. So now that person is a friend and that person can refer us out to other people and just continuing those building that. I don't know, it's kind of cliche, but building that network out and out and out and helping to make Concerto's name, the names of the co founders familiar in the biotech space.

Yeah, I think it's really valuable and it's not cliche. A network is everything in founding a company. I really believe that, um, we don't do science in a bubble. Are there any specific achievements or milestones you want to talk about?

There are two things that come to mind. One is just the way that we've been able to grow the platform itself since starting the company. Back when we first started, we were collecting a couple hundred thousand data points a day, which sounds like a lot, but now we're over a million in a single day. And back when we started, we could use the platform to do aerobic microbiome work. So anything that's on the surface of skin or the surface of a plant in the soil, now we can also do anaerobic microbiome. And that means that we can study the like oral microbiome as well as gut microbiome, which are things that weren't accessible before. So just it's been so impressive and gratifying to watch our engineering team, our science team build out these capabilities that have a really direct impact on what we can do in terms of business. Because every time the platform gains capabilities, the size of our TAM and our SAM can get bigger. And so it's very cool to see these very direct relationships. That's one thing that comes to mind. And then the other is just the closer and closer we get to clinic. Um, I don't know, I said earlier in 2020 we were a bunch of post IT notes and now we actually have, we've talked with the FDA and had our pre IND meeting and that went super well. And they love the way that we're approaching manufacturing and the way that we're designing our clinical trial and to. I think the thing that I'm very excited about is to get that email that says that this thing that we invented is now on a real person somewhere at our clinical site and we get to see how it works and hopefully it helps.

Yeah, we'll celebrate that with you. As soon as you have your first on human. I guess it would be your first on human study. We will celebrate that with you. That's very exciting. If other people out there are finishing up a PhD, a postdoc, or even haven't done a PhD or a postdoc, but they're passionate about starting a business, starting a company, what advice might you have for those people?

Build your network to bring us full circle. Um, I mean it. A lot of what entrepreneurship comes down to is access. You need access to capital, you need access to the people at pharma companies or if you're in agriculture, then major agriculture companies. You know, whatever your field is, you need to be able to get to those people and have those people take your ideas seriously. Building out a network of people who can advocate on your behalf and put in that good word so that you get the meeting and you can pitch what you have is absolutely critical. And then I think the other piece is learn the vocabulary because it is just a completely different set of jargon and you have to be able to speak biotech startup in order to seem like you're credible, whatever that means in terms of learning just enough finance, just enough law, just enough HR to be able to hold your own and not just sound like you know what you're talking about, but know what it is that you're asking someone else to do for you.

Yeah, I want to echo that. So I started a business with no business experience and it was really that, I mean it was a crash course, but also a lot of reading and I, I took, I joined a few courses, some online education, but I also read just a lot. What have you done to supplement your knowledge so that you feel more up to that challenge? Cuz it is a challenge.

So much reading, so much reading and being willing to ask questions that when, when someone uses a term that you don't know what it is? Ask. Yeah, it's. It's much, much better to ask in that moment so that every moment after that you don't have to ask anymore. This is a little bit embarrassing, but it is true that I didn't know what the XBI was until January. So I'm out at JP Morgan and everybody's talking about the XBI and I'm like can somebody help?

What Define XBI for the audience too.

It's the set of stocks that reflect biotech the best.

Yeah they play heavily into my portfolio and that's the only reason I know and it's because I want to put my money where my mouth is. But. Right. Yeah that's not. I mean there's so many things that people take for granted in the jargon. You mentioned okrs earlier. I think this audience is definitely going to understand what an OKR is but my candidates that I work with are not going to understand what an OKR is. So yeah it's definitely there's jargon that comes along with running a business and that's you can feel like a fish out of water for a while until you learn.

So books that I heavily recommend if you're getting started would be the book who W H o It's about interviewing. A lot of our techniques around non technical interviewing come from that measure. What matters is quite good explains objectives and key results and why you would use that structure. I'm in the middle of good to great right now. I know some it's I. It can be controversial but I'm loving it. So you know whatever read it and take it with. Take everything with a grain of salt. No rules rules. Another one that take with a grain of salt. But it has some really good stuff in it. Founder's Dilemma. I also found that heavily shaped our equity conversations at the very beginning when we were splitting equity and trying to figure out what our salaries were were going to be. Um so that's just a few that when I was getting started read through all of them and then a whole lot of Internet research around what are RSUs, what are NSOs versus ISOs, what is a pro forma cap table. And I mean it's just there's so much. It's not even hard math. It's just math that you have to learn how it works and understand what dilution is and all of those sorts of things. Go read all the Medium articles. Yeah I love that some of the.

Books that that really resonated with me in the leadership space are I liked Good to great. I agree take it with a grain of salt but like good book one I've read maybe four or five times is Radical Candor. Um and then the follow on to that I say read that first and then read Brene's Brown Stare to lead. Uh they are highly related, really solid books on navigating difficult conversations and even difficult Conversations with investors, I think benefit from those because sometimes you have to put your foot down a little bit. You have to. You can't be a pushover. And, yep, I think we're talking about a more diverse founder generation now. We're seeing, you know, a lot more women founders, a lot younger founders. I love it. We always ask people what books they recommend at the end of the podcast. So I've got a great bunch from you. Any others that I should put on the list? We actually have a reading list because our. Our guests are really smart and they read great books, so I steal them.

And another one that I've been reading lately, although it's starting to wear on my soul, so I had to take a break, was this book called the Exceptions. It's about this group of women STEM professors at MIT who systematically documented the sexism that they were experiencing over the course of like 15 years during the 80s and 90s, and did it so effectively that MIT ended up issuing an apology because it was so clear that this was what was going on. And it starts. The book actually starts with the college education, graduate education of one of the main women who was involved in this and really talks through what the rhetoric was around women in the workplace in the 60s and 70s, which is when she was in graduate school. Wow, that's heavy. And I think for me, exactly, it's heavy. It's heavy. And it's really eye opening of, oh, I see. This is where we were like 60 years ago. This is not a long time ago. This was when my mom was. Was a child. This is what she was getting from the world around her. And yeah, it's. It both makes me very grateful for the way that the world has moved and also so aware of how little time we have existed in a space where I can be a CEO and not face a whole bunch of people saying that I am, you know, not living up to my family expectations or something like that.

Well, thank you. Those are fantastic recommendations. I think people will really enjoy those. It's just nice because a lot of founders we speak with don't really talk about how hard it is to make that transition, how much you need to learn. And I think that that's an important consideration. And, you know, we spent a lot of time learning science. It would be unreasonable to think you don't also have to learn more to run a business. So thanks for sharing that. What's next for you?

I suppose we will IPO Concerto or sell Concerto. The timescale for that. Super up in the Air and is something that we're, I think, always working through, trying to figure out exactly what our exit strategy is and on what timescale we would want to do that, because there is so much value that can be extracted from a platform like this. As far as I can tell, I'm nowhere close to bored. So that's typically my major driver for moving on to another thing. Still learning tons and tons and loving the team that we've built and the science that we're working on, the impact that we're lining up to have on the world, it's fantastic. Right now. If I could do anything beyond Concerto, it would be to work on endometriosis. I think it's an extremely understudied area. We have no idea how or why this thing happens. It affects, you know, millions and millions of women. It's extremely painful. And I think probably what needs to happen is more basic clinical research before we actually try to bring it into a company or something like that. So I think my dream would be, again, post Concerto, this does not endanger Concerto in any way. My dream would be to organize basically either a small, dedicated research institute or an arm of a research institute that would focus in a very limited way on. These are the key questions we're going to try to ask about endometriosis. And the goal would be to learn enough that you could start developing medications or some kind of intervention for this condition.

That's a really great goal. I love that there's so much to be done in women's health, and it's very understudied, as I'm sure you're aware. A lot of the founders we speak with, they're serial founders or they have their hands in a few different exciting projects. It doesn't limit you in any way. And there's board seats in the future. There's all kinds of things that you could look forward to and you can have that impact. So I definitely see you having the impact you want to have. And there's so many ways you could go about it. I'm very excited for you and thank you so much for coming on the show. Where can people reach out to you or find you?

Find me on LinkedIn.

We'll link that in our show notes so people can click right through. Um, we'll link your company website and all the good stuff. But this was such a fun conversation. I really appreciate you sharing with our audience.

My pleasure to be here.

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