Episode 91: From Surviving to Thriving – How Biotech Companies Can Navigate Lean Times

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Welcome back to Bio from the Bayou. I'm James Zanewicz, one of your hosts from Tulane Medicine.

And I'm Dr. Elaine Hamm, the executive in residence at Tulane School of Medicine.

And we're here to chat today about all things funding and where, where we are right now. And as, as part of that, I thought I'd lay out just a couple little anecdotes of what some things I've heard, if that's okay, which are, are less direct. You know, Elaine's out raising funding for her companies and knows a lot of other CEOs that she networks with. And so hears a lot on the ground, but You know, from the other side, like I do have a little bit of an investor hat now we can talk about later. But, you know, I've talked with several, you know, several recruiters out there just, hey, what trends are you seeing? You know, what are, what are folks doing? And surprisingly, they're getting way more applicants for jobs or people reaching out to them out of investment funds who are concerned about where it might go. And some of, some of the trade journals and things talk about how by the end of 2025, we could see a third less investment funds out there and it could kind of be a great reshuffling. But at the same time, we're seeing a lot of new investment funds come out that perhaps have different operating models. And that's something we can talk about a little bit later too. But while I think, you know, there is some change and some sadness, there's also hope and some rebirth going on. And I thought that was a really interesting perspective on that.

I think so too. I think that we're going to see a shift towards, you know, some newer funds, on scrappier funds. I think a shift towards family offices doing more direct investments. And so it's, times are tough, but you know, we, financial cycles are endemic to markets. And so this is another thing that we have to endure. And I think that there's going to be some really interesting things that actually come out of it too.

And a financial cycle basically is one of your favorite terms to teach people to pay attention to. It's a burn rate, right? I mean, quite honestly, that's a big part of it. So what are your thoughts on burn rates right now?

Yeah, let me talk about like what to do as a startup in these lean times. One of the first things we do is really look at our burn rate. We, we get to know it, we treasure it, we whisper to it at night. We want to make sure that we have tight understanding as to what we're spending and we know what our runway is. And we have my co-founder and I sit down and we think through, okay, like if this happens, what do we need to change in our program? If If by, you know, December, we have, we have runway until December because we're fiscally responsible CEOs and COOs.

So you're not paying yourself? Yeah.

I mean, there's that, but we're not buying ping pong tables and growing out with our craft beer in our startup. No, we're trying to be as efficient and spend money on science. And we have different ways that we are thinking about our program. Like, you know, at this point we'll, we'll probably pivot into this type of program. And so we have a lot of different options on the table ahead of us. Based on, on burn rate, based on how much money we have to spend. And we do think about sort of like how to cut things and when to cut things. You know, there are things that will save us a ton of time, and time is money, but at some point you have to start cutting things. And so you don't need 5 different SaaS programs to help do things. So that's something that we think about. Traveling can be incredibly valuable during fundraising, but at the same time, there's going to be a point where maybe we do more virtual.

Well, Elaine, that, that kind of leads into a topic that, that I know you have always focused on, which is really communicating with your team effectively and keeping a lean team, you know, something tight and aligned. And I think that's something where some other startups that maybe, you know, had thought things were going in a different direction, maybe weren't as eyes on that prize. Do you have some advice for them on how they can do that, how they can communicate with each other better to make sure they're all on the same page and make that plan going forward like you just talked about?

Yeah, I mean, Yeah, I mean, I think that the biggest thing is, I mean, you wanna keep everyone aligned, you wanna keep everyone aware, and transparency is a big piece of that. And, you know, there's no point in hiding that things can be tough. I mean, I think that you have those conversations early and you have them often. Sometimes you have, you know, no news to tell people, but at least there's communication that's, that's occurring and they're, they don't, they don't get worried from a, from existing in a vacuum and not hearing anything. And so, and you're very good about that too. I mean, we, we have to think about our team as well. And like, you're always very communicative about sort of what's happening and what you're struggling with, because I think—

Sometimes y'all wish I was less communicative. I know. It's like, yeah.

But, you know, people really handle bad news better than being just absolutely blindsided. And I also find that the team can really help you come up with solutions. I mean, your team is, I mean, if you've done your job, you've built a good team and your team can really help you in these times and think of some ideas of ways to, to get past sort of rough times as well.

And your team should not just be those voices in your head. It should be people outside of you as well.

Oh man. So not me and not me and Gary Vee.

It can be your dog. That's fine. Your dog is outside of you. May give you a look that you're like, oh, I see.

But really, it really is just one of those things that you have to tell them. You have to tell your board, hey, this is the reality. I mean, I think, you know, you don't, you wanna turn your investors into allies. You wanna make sure that they under— I mean, they know, they know times are tough, but they don't wanna have to go to you and make sure that you have a plan. You should be coming to them and say, hey, I have a plan. Here's what we're gonna do. I want, from you as an investor or as a board member. I want introductions, I need advice, I need, you know, who do you know at this firm? That type of thing. You have to be able to have those conversations early on, not when you're panicking and almost out of money.

Yeah. And letting them know early on, here's how we're being fiscally responsible to stretch the runway. How can you help us extend it more? And yet one interesting thing, you know, we talked about this with Kimberly the other week is, you know, if you work with many universities have investment funds now, and if you're working or collaborating with them in any way, It opens up their ability to invest because, you know, part of that does benefit the university. And in the current funding climate for science, that might be a really interesting opportunity for more companies to access the tremendous resources at universities from the scientific side to drive their commercial pipeline forward, but also to get some cash investment in the process.

Absolutely. And find other— I mean, that's such great advice of just like there's other ways to collaborate and get a little bit scrappy. I think outside the bun.

The bun? Okay, Taco Bell. That just aged you. Are you gonna run for the border next too?

No, really, actually, like, a Taco Supreme sounds really good.

Oh, Taco Bell, we are open to sponsors, by the way. If you want to sponsor us, Taco Bell, we would love that. Yes, please. Taco Bell, reach out. Reach out to me. I'll set you up.

I, I, I could go on and on about a chalupa right now. Really, I do think you should lean into the weird. I think that, you know, you gotta use your ability to pivot and be scrappy to your benefit and band together with other startup companies. I mean, we're working with another startup company that is also facing tough times, and we are figuring out ways we can do things together. And, and, and, and, you know, hey, safety in numbers. But we have, you know, not just like brainstormed and commiserated, but actually found ways to collaborate that isn't gonna cost us money.

And this is where those intentional boards really matter, which we just talked about and, and have an episode that we released on, which I, we, I'm sure we can get Ian to link in the show notes. But that's a great thing. And, and looking at turning both your comp— you know, perceived competitors, which are other companies and your investors, which, you know, while they are on your team, they also have their own interests. But as you always say, turn them into your allies, which is huge. And, you know, I think with some of these new firms coming out, like I'd, I'd love to talk a little bit about Maker that I'm involved in now.

Mm-hmm.

It's maykr.net for anyone who's curious about it. But they're really doing an interesting model where they're investing in companies from a fund that they also have an agency they're standing up to promote those, those companies, like an AI-powered marketing agency, cutting edge, how to promote those companies they've invested in. And then kind of an events and community building entity to pull those people together and pull people in so they can pull other funders, other companies, larger partners, collaborators all into one space. So they're really creating a mini ecosystem.

Yeah.

ecosystem around AI and energy investment. And I, I don't know of anywhere that's done that before, and I just find it fascinating. And it's why I jumped at it when they approached me and said, hey, yeah, do you, do you have a little side time? Would you help us out? And of course, like you and I, we like, yeah, more work. Yay, let's do it. But it's really intriguing, and I'm, I'm so engaged with what they're doing.

I love it. I mean, what, in wearing that hat, like, what are you most excited about? Because this is, this is new. I'm excited for you. So what are you—

I'm learning a lot more because it's always, you know, I always have gotten to learn from you telling what that side's been about from you having been in, you know, having been and being an investor and then working with investors. But, you know, actually seeing it and helping to do it is a little different. I think also because those, those strengths dovetail with what Tulane has so much that I'm really hopeful that, that we'll have some things that we can present as well. And, you know, I don't make the investment decision. I just kind of help pass things along. But we have the pathway to do that, which I think is really important.

That's exciting.

AI or, you know, kind of new energy, reach out to me if you have companies or you're a company out there. Drop me a note. Happy to make introductions for you.

Ooh, careful what you wish for being on this side of the table. You can have all kinds of new friends.

So, you know, I, I think in talking about Maker and, and you showing kind of the different avenues that we can all be in at once and make them all work, that goes to show that when you're not in a massive, massive entity, you can pivot and do different things. And that's something I've always found fascinating about your career, Elaine, is that you are able, you, you are like the, the doctor of all doctors in, in, in, in doing it and doing and showing. But, but how, how would you advise someone to lean into that and turn that to their advantage?

Gosh, that's a great question. I don't know if I know the answer right off the top of my head. I mean, it just, you, you really, you get used to pivoting and, and being Doing less with more. Nope, other way around, doing more with less. One day.

Less with more would be great, right? Then you have all the money sitting there.

Yeah, I can sit on a nice little pile of gold coins like a dragon. No, it's— you just get sort of used to, like, always thinking of 6 different things to do, you know, and thinking through a decision tree of all the things that can go wrong, all the things that will go right. And being able to move quickly is something that I just absolutely— I mean, it's one of the reasons I like being a scientist. Oh, this didn't work? I'm just gonna change this variable and do something else. Not to get dragged down in, in sort of the mire of, of bad data or the email inbox full of nos.

Mm-hmm.

I think that you have to really be able to think of all of the other opportunities that you can have in front of you as well. But re— I mean, we did an, an interesting podcast on resiliency. I think that is something that you have to really think about because I think having resiliency helps you pivot. It helps you, you know, think about different things. And if you're too mired in your own hole that everything's going wrong and I hear no too much, like you're, You're not gonna be able to think creatively and not be able to pivot. So, I think resiliency is a big piece of that.

And you'll be uncomfortable going back for those future conversations with the same people, 'cause a no is not always a no forever. It's a no for right now. And if you can get that information out, like you always talk about, like turn a no into something that can benefit you. Like, yeah, like a no can be one of the best things you get if you find out why.

That's the biggest thing is like, I love it when, I mean, and as a, I'm gonna give you advice being on the investor side, We're good with nos. Nos are perfectly fine. It allows us to move on with our lives instead of like, oh, maybe he just didn't check his email. And I feel like a very desperate, you know, I'd go back to my dating days in college. I'm like, maybe he, he's just super busy right now.

Um, those are, those are still my days. Those are still my days with dating too. So yeah, just 'cause you're married, thanks, Elaine. Now my trauma's all out. So you're basically saying this is just gonna gimme relationship trauma and work trauma all at once. Yeah.

Oh, let's go back to all trauma.

Okay.

Um, yeah, yeah, no, once you hear a lot of nos, it gets really depressing, but you know, it's okay to say no to somebody. We are cool with you saying no and no, I mean, no quickly too. I think some of the most professional investment firms, the ones that I, that are well known, are also very good about Saying no quickly. And you have to be able to, as much as I want to, like, respond sarcastically to, you know, we're really gonna wait until phase 3 before we invest in your company. And yeah, well, who doesn't wanna invest in a phase 3 company? Very innovative.

And everything old is new again, cuz we had come so far towards the front end and now we're moving back towards the back end of the dev lifecycle cuz people are like, no, I need a return quickly because I can't take the gambles right now.

Yep. But you have to be able to like take those nos graciously and know that it's about relationship building. And, you know, just like you said, a no right now is not a no forever. So.

Yeah. And I, I want us, I think, to, to close out on a couple things I have in mind than anything else you have. And one is, is, you know, really focusing on building that long-term relationship. But you can do that, and especially with budgets being a little tighter now, you can do that through LinkedIn and, you know, and posting content. I know I've talked about that on a few other podcasts, but more and more and more like people at BioEU, at BioTrinity, when I went to sessions, which was great, but they were lecturing companies like, hey, investors are out there, they're in stealth mode looking at everything you do on there, they're finding you on there. And also, you know, if your company goes under, your next job might be through there. Somebody wants to bring you on to do another startup, or if you want to go in-house somewhere because you're like, okay, I'm taking a break from startups for a minute and going to go kind of work the, the regular job where I have the full benefits and everything. But LinkedIn is it. And so build your brand and, and you can just do that by, by talking about things you're passionate, sharing information that was helpful for you with a little sentence in front. 'Cause it's, it's not, it's not super difficult and you can use AI to help you and say, hey, here are the things that I like to write about. Can you find some topics? Find a couple articles. I'm like, hey, I want to repost this. Can you write me a lean-in with these 3 bullets highlighted? Then always make sure it sounds like you edit it back. Don't just take what AI gives you completely, but you can create content every week and really build a brand and a presence.

I think the biggest thing is, is to be genuine and to have advice. Don't just take a picture. I mean, we all kind of laugh about LinkedIn being all just like a humble brag and like, oh, honored to be at this blah, blah, blah. And you're like, okay, cool. Like, you have to really think about being helpful to people as it comes to a LinkedIn brand. It isn't just about posting your, your selfie with some fancy pants investor. It's also about— Providing information and professional advice.

So, and all that can do what you always like to— you always tell people to preserve yourself. And what are the ways that you do that? I mean, I think with you it's humor, right?

On this one. Yeah.

You're all about the jokes.

It's just dark humor. It's fine. You gotta laugh so you don't cry in the shower with a glass of wine. Not speaking from personal experience. No, you really have to. I mean, honestly, I build a dataset every time I do a startup. Every time I go through a failure, I'm building a dataset, and that dataset tells me I'm gonna make it through this. I mean, I have raised money in tough times. We have raised money during COVID I opened a wine bar in COVID at times, and it is still open. So, like, I've built a dataset that says that, you know, you're gonna make it through. It's not gonna look exactly like what you thought it was gonna look like, but— There's gonna be things that'll change and, and you're just gonna have to adapt. And I think that knowing that helps me not get too serious about it and making sure that I'm taking care of myself and making sure my team's okay. And that one way or another, we're gonna get through tough times.

So. And look at this. We thought this might be a really sad topic and look how, how much bright—

Oh, did we end up finding the bright?

We, we found the daylight somewhere. I don't know how, but like, you know, it's, it's true.

Well, it's the coffee that's in this cup. That's why.

Mm.

It totally is coffee.

It's 11:00 AM. And she was like, and I'm, I'm, I'm raising money.

Oh, sorry.

What was that, Elaine?

I was like, I'm drinking. You don't know my life, Ian.

She's in a funding raise right now. Like, let her have her. So one of Elaine's tools is alcohol. The other is humor and the other's caffeine. It's the holy trinity.

It's the holy trinity. I do have, you know, I am a little bit of a beverage goblin right now. I mean, I have my caffeine and I have my water and I have a fun beverage, but you know, the real fun beverage doesn't happen till 5 because I'm still a grownup and everything isn't too dark.

And that's when her sommelier husband gets home and makes a cocktail or pours a glass, right?

That's right.

Yeah.

From the, from the wine bar.

Yes.

Made it through COVID.

And the wine bar is The Study. And as I recall, I always love doing this because it's the one time he'll listen. Your husband, Ian Bennett, got a James Beard nomination this year, did he not?

He did.

A national one.

Snap. So yeah, like not just a regional guy, he got national.

So there are bright spots everywhere for, for all of industries, but especially for biotech. I mean, it's, it's hard out there, but there is a community. The community's there for you. And, you know, I'd say if you don't get to go in person to events, you know, create, create ones on LinkedIn, create ones in other places.

Create ones on Zoom. Remember the pandemic? We used to have our, our sort of like happy hour commiseration. Like, I do the same thing now. I mean, of just startup CEOs getting together and being like, oh, it's not— you're not alone. You're not alone.

So, but now you actually are wearing clothes. So you don't call it pajama party like we did during COVID Who can tell these days? Exactly. It's all athleisure.

Pants all blur together.

So, so how do we close out, Elaine? This is a topic near and dear to you. What are your closing pithy thoughts?

Ooh, do they have to be pithy?

No, they can just be a thought.

It's fine. You got this, girl. No.

And guys.

I, yeah, these are lean times, but lean isn't the end. Be focused, be deliberate, be scrappy. Underdogs, I'm not always a fan of underdogs, you know, to be honest, and that's a whole other podcast. But, you know, biotech has always been a long game.

Yeah.

And right now, discipline and resiliency is the differentiator. I mean, keep your science tight, keep your burn rate tighter, and Try to keep your sense of humor intact. We'll get through it.

Do good things and we'll do great stuff for the world. Love it.

All right. That's it. That's all I got.

That's it. That's all we got. All right. Tune in, check out our show notes for all the great stuff we talked about. And we hope to see you.

Advice on shower wine that you may want to drink. What pairs well with a shower? Oh my God.

I'll make sure that gets in the show notes. I think ending this episode of the podcast. Pachinko.

Check out those show notes and stay tuned for our other upcoming podcasts about different aspects of biotech life, including, you know, probably a little more on LinkedIn and how to build a brand, as well as a few other topics that I think are relevant these days.

And for those of you who are being more fiscally responsible this year, make sure you check out BIO on the Bayou, October 28th and 29th. It'll be a $300 registration, not a $3,000 registration like many biotech conferences. We used to be able to do it free. We're moving into a hotel this year, so we have to charge a little bit, but we are breaking even. Elaine won't let me charge any more than we have to, to, to break even, but we do it for the community. It's a great way. We're gonna have slots for startups to be able to apply to present. No extra fee for that. There, there's a lot of opportunity there. So bioonthebayou.com, check it out. We'll have registration open in the next couple weeks. Hotels are up now. You can reserve your room. They're super cheap too, and it's in New Orleans right before Halloween. Who wouldn't want to come? Thanks for joining us for Bio from the Bayou, and we hope you'll join us again.

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