Neil Thanedar - Founder at Labdoor and Positive Politics

Welcome to another Founder Wisdom Pod. We have Neil Tanedar with us today. He's an executive director at MCFN. He's an author at Positive Politics. He's a founder and chairman at Labdoor in Flint, Michigan. Neil, welcome to the pod. Tell us a bit more about yourself and what you've been up to.

Yeah, absolutely. Thanks for having me. So yeah, I am born and raised in St. Louis, went to the University of Michigan to get molecular biology and business degrees, really had the idea of creating the next great biotech startup. That was my focus as an 18-year-old, and I got the degrees to do that. And then something happened in college, which was my dad who had run these chemical testing labs in St. Louis and then eventually all over the country. He had built these from a one-person lab, one-room, one-person lab in 1990 to in 2008, this was hundreds of employees all over the country, over $100 million valued company. And in the 2008 recession, he had 2 bad quarters and the bank took the business. And so he fought the bank for 2 years from 2008 to 2010, when I was in my last 2 years of college. And basically got to a place where the bank foreclosed the businesses, took our houses, cars, all kinds of stuff. And then we were left to basically start over again right around the time in 2010 when I was graduating college at the University of Michigan. And so at that time, instead of doing a biotech startup right away, which is what I was looking to do, the obvious solution seemed to be to build another lab with my dad. And so I convinced him to move up to Ann Arbor, Michigan, and then we started a 2-person testing lab in 2010. So right after I graduated, we started building this lab, which became AveMe in Ann Arbor, which is now still a very successful testing lab. It's been— so we built it in 2010. It was profitable by 2012 with about 14 employees in that first 2 years, scaled to about 50+ employees and $10+ million in revenue in 6 years. There was a first exit in 6 years in 2016, a second exit in 2021. And it was a lot of what the success of what he had been trying to do with his first 20 years of his career. We ended up being able to do it in this 6 to 10 year sprint. And so I helped him every single day at the beginning of that. It started at the beginning, just he and I. One of us would be testing, one of us would be answering phones. I built the website. He did a lot of the sales. We kind of traded back and forth on the key work. And that also just from that gave me the idea that there should be a people's lab and that's where Labdoor came from. And so I had the idea around 2012 of this, instead of these thousands of labs that all compete to do this B2B testing services, they work for the manufacturers of these products. There's no real lab that works for the people, right? If you are taking a supplement, a vitamin, there's no one who's doing testing and then publishing the data for you, right? And the company gets the data, but you don't get the data. And I always thought that was wrong. And so Labdoor came out of that understanding. And so I think that, that brings us to how I got to Labdoor.

So I told you like my first company was a nootropic, right? And yeah, then in my days we would use examine.com. Do you remember these guys?

Yeah, I think it's also great, and I've met them too. And I think there's— if you're looking at kind of what the ingredient does, the research on the ingredient, I think something like Examine does a great job. I think what we really focused on at Labdoor is what is in the products. Right? And so the, the testing of the products themselves, that a huge part of that requires this chemical lab testing that was— that's our specialty in the last lab as well. And so this kind of testing focuses on the purity and the accuracy of the products. So the purity being heavy metals in all of the different products, now increasingly things like plasticizers, PFAS, other contaminants like PCBs, Uh, in fish oil or yeast and mold and probiotics, there's all these things that can go wrong in these products. Sometimes even things like nootropics, things that are tableted products, sometimes have fewer risks, but there's still the risk of companies lying to you, right? And so that's where the accuracy comes in. And so sometimes the ingredients are not there at all. Sometimes in a probiotics case, they might have been originally there, but then they've died, and so there are no active cultures in that probiotic. And so that's also— if we're testing the final product, it's not just about what the company says they did at the beginning, it's what the product is like when you take it. If we buy the product off the shelf and test it like a consumer would take it, then we're getting that same result as what a consumer would take.

And how do you make money with that?

So, right, it is a marketplace where The grades and rankings all build the reviews for these products. And so there are rankings for all these products, reviews for all these products, and links to buy these products either at big sites like Amazon or now increasingly at the company's websites themselves. So you can buy direct. Companies like that better. Consumers increasingly are liking that better. And so we get a commission anytime any of those products are sold. Uh, we have also now started to work with companies on certifications of their products. And so if they're, if you see a Labdoor certification on a product anywhere in the world, that means that they weren't just independently tested randomly that one time. They have decided to do consistent testing of every lot, every batch, uh, and have actually are in many cases are actually not just testing the finished products, but are testing the raw ingredients too. And so we've built, we've found that this independent testing is valuable for both. The consumers are using it to buy products. And so we want to make it as simple as possible to buy those products once you make a decision. And the companies are looking to actually, in many cases, improve the quality of their products. They're doing this test. This quality control testing is something that is not government required in these categories. And so it's not often done. And so because it's expensive. But if they can find a way to bundle that and make it something that by paying for the testing cost, by getting this testing done, they're actually opening themselves up to a new set of customers all over the world, that Labdoor customers, right? These people who, these millions of people who use Labdoor before they buy, that becomes a marketing expense instead of quality control. And so that's what we do with certifications.

And why doesn't the FDA or Health Canada do that for the population?

Because it—

in—

there was actually a bill passed in the United States, uh, in the 1990s that actually deregulated the supplement industry. And so the supplement industry used to be much smaller. It's over a $40 billion industry now. It was less than $5 billion a year, uh, over 20 years ago in 1994, I believe, when this dietary supplement law was created. And basically, these supplement manufacturers lobbied to say that their products should be in a special category where the products should be allowed to go to market without testing, and then they could be recalled later if something went wrong, but that they should be presumed safe until otherwise, uh, seen. And so they— it puts the consumer at risk, basically, First, many people have to get sick and then some action will be taken instead of what the Labdoor model is, is we, we test all of these products in each category before you take it, before you buy. And so you actually have that knowledge before you make that purchasing decision.

And I'm on your website, seems you test any per category, right? Protein, probiotics, and as such you test like what, 10, 20? Per category, why not more?

So we have been— we have tested over the past years more products. And so in protein, I think we've tested 50+ products. Some of these products will either go out of business or not do as well over time. And so they eventually— our rankings get more and more focused on the products that we can test more frequently. And so that's actually why the rankings have gotten smaller over time, even though the products that we've tested have been much bigger than what you see. We have— we're trying to figure out if there are ways for us to do historical rankings, or because we have rankings going back as far as 2012. And so we're very curious about how do we— if there's some way to kind of historically go back and, and see like, uh, the Wayback Machine for Labdoor and just kind of go back in history and see what the rankings used to be so that you could see if these products had been tested in the past. Uh, we should be able to show that too.

And I only see like A's and A+. Have you got like D's or shockingly bad products that were advertising everywhere? Do you have an example?

So there have been some, uh, so probiotics that have had absolute zero, uh, active ingredients, right? That's been a huge issue. We've seen over a third of fish oil products have been rancid on the shelves. The thing that happens is those products often either get pulled off the shelves or they— the brand gets changed. It no longer exists after a while. That's a big challenge with the whack-a-mole of what this industry is, is there's a lot of products that once they fail, they die, right? They can, they go away, but then there's kind of new iterations of the same product that come back up. And so even 10 years later, fish oil, a third of fish oil are still being tested poorly. And so that's a big challenge that we have.

What happens? Yeah, like, did you have Companies that were mad at you for just berating them, like giving them a D and reaching out? Like, what do you do at that stage? You have good lawyers, or did you not get any trouble from them?

It's a mix of all of it, right? So, we definitely had complaints, and so, and we've had fights with companies. We had to, you know, we had great lawyers, and we had to do all of that kind of work. So that is, that's part of the process. I think part of it is also we created a challenge process where if companies wanted to challenge whether they think the results are wrong, we did, we would retest it and then we'd figure out, right? If we were right, then they would pay for it and vice versa. We created those types of systems. Some of these companies were even A- or B+ companies where sometimes the, they would come at us originally really frustrated, like, why are we not an A, A+? And then eventually they would wanna work with us. They say, tell us, What did we miss? How badly did we miss? What would it take for us to do better? And a lot of those products fixed themselves and became As and A+s over time. And so that's the positive side of it. So we've definitely seen both the positive and the negative sides of companies.

And would you offer them consulting to help them fix their shit? Was that another revenue channel or?

So we, not consulting to actually product development work. That's something that like a a lot of other labs could do. I think we had the data, so we would do the testing and give them all the data that they need. It's, it's relatively simple from there. One of the biggest challenges is that they don't often have control of the ingredients upstream, and so they don't even know if the— their ingredient supplier tells them that they are being sold pure protein isolate and then they're not. That's something that is out of their control originally. The solution is to get— is more testing, right? Is to say, let's test your ingredient manufacturer versus 5 others and let's figure out what the best ingredient manufacturer for protein is in terms of purity, if you're that serious about improving your purity. And so it come— yeah, it really came down to more testing. And that's one of the things that we've built into the system is just making it as easy to do more testing.

And how complex was the ops and backend of That, like, um, just like a small lab, like one employee or just yourself, and just like test out these substances with various chemicals, various tests? And how scientific was the process?

No, it's, it's an extensive process, right? The equipment that it takes to do this kind of testing can be in the like million-dollar range to like build this lab. It takes a team of, you know, 4 or 5 people at a minimum to run it. It's something that we had through our Series A had actually run our own lab. We'd run our own even e-commerce operations. We'd really built out a lot of physical infrastructure. We've gone a lot lighter now. We've found interesting outsourcing partners and things to be able to do lab testing mostly in different labs that specialize in the different categories. And so whether it's herbal supplements, there might be a lab that specializes in that versus now we're increasingly looking at pharmaceuticals, OTC, right? Other ways that we could expand Throughout telemedicine, right? There's not just supplements that have this issue. These over-the-counter medications, sometimes you don't know whether the generic versus the brand name are really identical. All these types of things we'd love to be able to test and show the purity and accuracy of those products too. And so as we expand into different categories, uh, we use a lot of different labs.

And what if it's destined not to have so much of X in it, but it gives out a great effect to the end user, right? Like because they have X or other ingredients and components in it, they may not have the advertised dose of protein, but they may have something else that makes people feel and digest it better. Have you checked that?

So those are interesting. There's a couple different ways. So one is unlabeled ingredients. So sometimes companies cheat by actually giving you more than they claim. Which we found, right? So we actually tested pre-workout supplements at one point and found companies that no longer exist, but they had real active ingredients.

600 milligram caffeine per scoop.

Right, some, some crazy caffeine numbers, but also sometimes actual like steroid or like banned substances. So like the products that are actually like— there's a list of 200+ ingredients that if you had one of those ingredients and you competed in any sport, professional sport, you would get banned and they would unlabel and add those ingredients into these pre-workouts. So that's, I think that that's the scariest part, especially if you're an athlete. And so though, as those products don't exist anymore in many cases, but that is one of the biggest risks that you have. I think the other part of it is whether like how this works in individual people or in the body. And sometimes just like the same ingredient works differently in different, 2 different people. Right. And so I think that actually is, that goes from what we do, which is analytical testing or lab testing to clinical lab testing, right? It was like the clinical lab testing is the blood testing, right? Instead of the product testing. And I think in a, in a long term, we've been trying to figure that out for a long time at Labdoor, who we should partner with, how we should make this happen. But there is some way that I believe if we partner the product testing and the people testing, And make sure and see the feedback loop of, you know, which products are people taking, what happens when they take it, and just if we're figuring out— give people the best products, test them to see if it's actually working. That is an ideal system that should be together. And so I think in the long-term future of Labdoor, we should build a system that allows that clinical testing and product testing to be built together.

Well, what led to politics and all of that and Your latest book, right? Like, at what point were you like, I need to do something about this?

I think I've always been interested in politics. I grew up reading about it, learning about it. At the same time, I obviously grew up in a family where my dad was an entrepreneur, and so entrepreneurship was really the focus too. And so I think I wanted to be an entrepreneur first, and I had this idea of maybe doing maybe 3 careers in my life. I had this kind of— this— if I could be a businessman, a politician, and a writer in my life. I thought it would be really 3 really cool things. And as I kind of got deeper into— this is now because I'm 38 now, but I started that first business at 20, right out of college. And so now I have almost 20 years in startups. And I think in that last 5 to 10 years, it became very obvious to me that I could do more than one thing at a time. Right. And I just, I had this, I think Labdoor became more stable. I think we had decided we had more structure around it, more people who could run different parts of the business. And then I also just felt like this specific idea of positive politics is something that has been in my head for over 10 years. And I think is increasingly important now is that we need to find a way to focus politics on the positive-sum actions that a government can do, right, and that we all can do together. It is like governments exist to do this communal work that we, that we could not do individually, right? In my hometown, I think of public schools and public parks and roads and bridges and all these different things that come from our government. And 80% of American children go to public schools. And how do you you impact what happens in those places, positively changes the rest of the country and the world, right? You can do so much through politics. Yet I think so much of the politics has gotten to be either partisan or negative in so many ways. And so if there was a way to get people into politics through action, through activism, that was something that was inspiring and appealing to me for, for over 10 years now. I think through the process of working with my dad to build our first lab together, when, when that lab was sold, he finally had an opportunity to retire and do anything he wanted to. And so he had thought about politics. And so one thing that happened in 2017 is that I started helping him run for office, helped him run, uh, for governor, which he lost, and run for state rep and US Congress, which he won. He won 3 of the 5 big races that he was in, in a 10-year period. He ran every 2 years for 10 years. So I saw that process really closely. And I think the amount of impact that you can make through politics is fascinating. And I think that there's a way to start making that— anyone can make that impact early if you start with activism, right? So I think a congressman might focus on thousands of bills a year. of which maybe 100 or more that they actually write and/or co-sponsor directly. If you are an individual, you can start any of those yourself. You can pick any of those bills and run with it. And then you can start— you can go through the same process a Congress member does to get a bill passed, right? You can find co-sponsors, you can get a bill drafted, you can push for legislation to be passed. All of that you can do without ever getting elected. And I think that's something that the more I tell people that, that you can actually pass bills on whatever your most important issue is without ever getting elected, that gives people the power and a sense of possibility that they can pick an idea and actually get something done in politics. And so I really want to change people's perspective from the politics you see on TV, the angry debating and fighting, to to the people who are quietly getting bills passed and changing laws and lives. That's, to me, that's what positive politics really is.

And did you have the impact yet, in your opinion? Do you measure your own impact in that film?

Yes. So we've seen— so campaign finance reform is one of the biggest work that I've been focused on with the Michigan Campaign Finance Network, MCFN, over the last 2 years.

The—

we are working, we've been writing and investigating different cases, including the idea of earmarks in Michigan's budget. And so there's been a case over decades now where now over $1 billion a year in these earmarks, which are money that goes from the state government to either individual nonprofits or companies, Those would happen, they'd be added to a state budget sometimes in the middle of the night right before the budget was passed. And we focused on, we wrote and investigated about a specific $20 million grant that was supposed to go to a startup accelerator, actually a nonprofit startup accelerator, and no money was ever given to startups, no benefits were ever provided to startups. And that is investigation and others around it led to— now there's a 45-day waiting period for all of these earmarks. So any sort of government grants need 45 days. They need to be published publicly on the government website 45 days ahead of time. The public can ask for a hearing on any of these earmarks now. And so the laws have significantly changed where there's much more transparency. in where this billion dollars a year gets spent in Michigan than there was last year before we did this work. And so it's journalism, it's just classic investigative journalism. And there were other Detroit News and Michigan Advance, there's these other great journalists that were working on it as well. But I think that's one big case that's already been broken and the law has changed. And now we're working on Freedom of Information Act and the state-level solutions to Citizens United. So the idea that campaign finance reform has been blocked by the Supreme Court federally, is there a state-level solution to limiting the power of corporate spending in politics? And so FOIA and this corporate power are 2 things that we're still fighting, and I think are the next 2 big cases to get solved.

And what would the YC of politics look like?

We just did the first class in July. And so I'm testing the idea very much like the first class of YC was 2005. I think there were 8 companies in the batch. And Paul Graham did a lot of the teaching and work himself. He was actively with dinners with the founders, all these different things, trying to get them in this summer sprint from idea to a minimal viable product, something real that they could show. And so I wanted to do a test of this. And so I wanted to do a 1-week sprint where in DC, where 5 founders plus me all lived together in one house that I rented near the Capitol and were able to, in this 1-week sprint, we had all our lunches and dinners together. We had these experts on anything from the Supreme Court to legislation, to new bills like this state-level solution to Supreme Court. And we were able to have each of these founders work on one specific bill and one specific idea that they wanted to run with, which were all in different categories. So not so We've worked on ideas with changing the Bill of Rights and adding a new constitution. And we've looked at other factors of how do we get more funding for Native-owned businesses and more testing of sexual assault kits, more manufacturing for the American Midwest. And more digital voting methods, right? And these are like 5 great ideas. And each of those founders were able to sprint on their idea from Monday through Friday to where on Friday they were pitching a specific bill, specific idea, and were ready to run with it. And so we've kind of built this structure where the YC for Politics is in the sprints, whether it's this 1-week sprint, which was really a test, or whether it'd be longer or a bigger program with more founders later. I think this is a great model for what a YC for politics could be, is take an idea and sprint to the minimal viable product, which I think in politics is often a bill. So go from idea to bill as quickly as possible, pitch it to the congressman, pitch it to the different— if it's a local or state bill, pitch it to the Ideal co-sponsors of that bill and make it happen. And I think that that's a very entrepreneurial mindset. And in politics, it's— you never have to get elected to make that happen. You can just start and go now. And that's, I think, what's so exciting to so many people who— these 5 founders already who have gone through the program.

But aren't the founders potentially the best, the best politicians eventually? Because corporations are gonna overtake the world because they're simpler to build rather than trying to change existing broken systems. They also attract very ambitious people as well, right? Like capitalists. Politics doesn't pay so much. Sure, in terms of power, but most people prefer money, right? So isn't that challenging? Shouldn't we start privately and then once it becomes so big, Big à la OpenAI, you have AGI and then you change the full world?

I think the challenge is how much— where the power goes once it's concentrated. I think something like OpenAI, if it had kept its original open structure and had been built in a way that I think that power would've been distributed, I think it could have worked better. I think that could have been That could have been a structure that could have been more beneficial long-term. And I think that's what I think even Elon Musk had been arguing at the time and now even is that that's how the system should have been created. I think the challenge with it is some things like education or healthcare, or how do we start scaling those things up to where it gets to high quality for 100% of people. I think that's where you get a challenge between the public and private markets, where I think I'm fascinated by these school experiments like Alpha School, where they're able to take a small group of students and increase the grades that the students have or have really high quality results. The challenge is how do we And if we can do it, we should do it and share whether it's public or private, do whatever and however we can. But how do we scale that from 0.01% of people to 100% of American students or 100% of the world's students? If that is AI, if that is technology, if there's like solutions to it that are gonna come outta the private market, we should definitely use it. I think that the challenge is, I think the public part of it is actually the More on the distribution of the services. I think a lot of the creation of the services or creation of the technologies will still come from the private markets, and then the distribution will happen publicly.

Hmm. Interesting. Just also like in YC, you know, it's all about product and who you target. And when you're a president of a country or even a municipality, like, you don't really choose your customers, right? And I think that's a fundamental flaw in politics. I think fundamentally that's why the system is broken, is that we're building round pegged holes for square people, right? Like, I think me personally, I target a very specific set of people. I know I can be successful for them. Why? Because I think just like them and I am these people, right?

Mm-hmm.

And I can iterate on that extremely quickly. Do you feel there's progress on that level in politics in which we bring more technology and we can calculate and deploy things faster? Because on my end, I'm quite skeptic and even pessimistic when it comes to changing politics. And if I would start with anything, it would be with the electoral system. which I think is totally screwed. I studied political science, by the way, but I don't ever see myself like going into politics, except if it would be my own countries and only founders would be accepted.

I think founders have excellent ability to focus on the small markets, and I think that's obviously how you should start and how anyone should start. I think the challenge with politics and what should be happening is like, how do you get the best possible thing to the greatest number of people? Right? So how do you— the education example, how do you try to— how do you get the best education to 100% of the country or the world's population is going to be harder than solving it in one school, in one place for a set of students that might have parents that are already startup founders or tech professionals. Right. And so are already educating their kids at home even better than before they enter the school system. And so these are different challenges. What we'd love to figure out is— and so I think that's why I think politics is such an important challenge and why it should be done. I think a lot of what we see, I think, as the bad part of politics is corruption and partisanship. And so I think those things, what I wrote about in Positive Politics is that we should be attacking those things directly. And so I think that's where these things like When the earmarks get dropped in in the middle of the night, that's a huge potential source of corruption. Right? And so, how do we fight those cases? How do Freedom of Information Act is a potential deterrent to corruption? Right? It's a major transparency source. How do we pass bills that do more of that? How do we make it harder for corporations to spend unlimited money in elections? Right? All of these things are. meta solutions. And I think even fixing the Electoral College or fixing the electoral system where there are more open primaries to where this one— I think one major issue we have is so many of our, uh, US elections are either decided first, the Democrats and the Republicans decide who their candidates are, and then you're just, you're just picking between those 2 candidates, right? And so I think making more open primaries is a way to fix the electoral system. So I think Positive Politics, a big part of what we'd want to do is say, let's focus on these meta solutions so that the political system is better and is more able to be fixed. And so I think that, that's where my focus is too, is the structural systemic problems. Can we fix those with the systemic solutions like these laws amendments?

So what do you have in front of you for this year? What else do you want to Accomplish before the year's over?

I'd like to do one more class of at least 5 people by the end of the year, so I'm targeting November. And so if that's interesting to, to your audience, just go to positivepolitics.org and apply. And so I like limiting it to this, this small group of people, uh, working individually with each one to figure out this from a Monday to a Friday sprint in DC meet politicians, meet potentially your congressman or the Congress member that you want to have sponsor your bill, and just sprint to a Friday where you're able to clearly pitch why this idea is important and how you're going to fix it. And if I— that would mean by the end of the year, I helped 10 new people get into politics, which was my big ambitious goal for this year. And if I could do 10 this year, I mean, what could I do over a decade? How big could Positive Politics get? Can we do thousands of people? Like YC's at 3,000+ startups now. What does it look like when there are thousands of founders in politics? I think that's something we both agree on very much is that if we could do anything good in politics, one of them could be to get these thousands of great founders into politics.

There you go. Neil, where can we find out more about you?

Yes, so if you want to work with Positive Politics, uh, positivepolitics.org. Uh, the book is at positivepoliticsbook.com, and the rest of my writing is at neilthanedar.com.

With Neil and Charles for another Founder