Start-up Stories with Jason Mellad – Part One
23rd September 2021
Start-up Stories with Rosemary Francis
8th November 2021
Jason Mellad is a passionate entrepreneur, scientist, and CEO. He's also co-founder of Start Codon - a Cambridge based accelerator which aims to identify, seed-fund and drive the success of the most disruptive healthcare Start-ups worldwide. We were delighted to host Jason at our recent Start-up Stories event. He shared so much valuable advice and helpful hints we've split his talk into two - here's the 2nd instalment. Enjoy!.
ONE
What’s your advice on Pitching? Any hints and tips?
Before you even think about putting together your pitch deck, you should have a very well-defined problem that you’ve researched and a solution that you’re proposing. Too often we see people who say, I’ve got a great tech, it’s amazing! It’s the classic analogy of a hammer looking for a nail. I’d much rather invest in a team who have a really clear understanding and have done their market research to identify the problems - and then who convince me they have a solution for those problems. I don’t really care if that solution has 50 patents or hasn’t been done before (I also say you don’t have to be the first or the only person doing it – you just have to convince me that you’re going to be the best). And then craft the story for your pitch deck around that. Start off with – here’s the problem. And be open and honest about other solutions which exist – because there’s always competition..
You don’t have to be the first or the only person doing it – you just have to convince me that you’re going to be the best.
TWO
Are there any trends or changes you’ve noticed in VC’s or accelerators in the last five years?
I can tell you there’s a lot more accelerators than there were five years ago – so that’s definitely a trend! But there’s room for all of us because clearly there’s a need.
From the VC perspective, Covid and Brexit have had a massive impact in a very surprising way. I think because we’re one step removed from the rest of Europe, the UK has become even more attractive to external investment. Every week I’m being contacted by US and Asian VCs – and some European as well, who want to invest in UK companies. They perceive that UK companies have more substance than they do in the US for example.
US companies are very good at having a front but don’t necessarily have the substance behind it. What I mean by that is they’re very good at marketing and selling but there might not be anything to back it up. In the UK we have the opposite problem – people are very good at the substance but not so good at the pitching and selling. US VCs have cottoned onto that – they are realising there are some real gems here and that they are just too humble and self-deprecating to admit it! So, they’re keen to come over here to back UK companies to grow and expand here in the UK. Which is very different to 10 or even 5 years ago – if you wanted access to US capital you’d have to move to the States. So stay tuned for more VC’s from abroad trying to back companies here.
THREE
How would young companies reach out to them?
In a variety of ways. You can reach out directly if you’ve done your homework. Make sure you’ve studied your target. I don’t like the spray and pray approach. Look at databases available such as Crunchbase, at press releases online, and figure out which investors are investing in your space, particularly if you can find investors who aren’t just your local investors and angels.
Do the research to understand their portfolio, read up on the backgrounds of the individual venture partners in those VCs and funds – and contact them. Just make sure your message isn’t generic. Show them that you’ve done your homework and give them very specific reasons why your company would be a match for their VC funds. So I know if I’ve received an email from you, it doesn’t feel like I’ve received the same email that you’ve sent to 100 other people. Also – get a warm introduction if you can - it’s much better than a cold call.
FOUR
Are there any upsides of Covid?
There’s always a silver lining. We now have different ways of working. With Start Codon we were shut down within 3 weeks of launching. We welcomed our first cohort of companies and then everyone had to work from home. But what that meant was that founders from across the UK started approaching us. Previously they would have had to move to Cambridge, which for some founders just wasn’t feasible – but are now able to join us. We even have a company who are based in Singapore.
The way people use space is different. Office and lab space has a different connotation now, and also the areas of investment. From the healthcare perspective, telemedicine and decentralised care are both hot topics. Anything dealing with transportation and last mile delivery is exciting. Also, people previously didn’t care about diagnostics – now everybody’s obsessed with diagnostics! So it’s a change for the better!
We were at ideaSpace in the early days of Start Codon and it was so good just being surrounded by people who are also starting up. Being in ideaSpace made a huge difference.
FIVE
What are the biggest challenges faced by academics when commercialising their ideas and moving into industry?
I think they have to understand what they don’t know. If they haven’t had commercial experience, they may not be prepared for just how long it takes and how much effort is needed to get a company spun out, and up and running. It’s not like applying for a grant or running a project in a lab –here’s so much more to do than the technology you’re developing. There’s the commercial plan, the team you have to build around it, the licence and of course, it all takes time. There’s advice you can get from your tech transfer officers and accelerators for every stage of your journey. Once you have that understanding it’s knowing the difference between the technology and a product solution – just because you have a new tech doesn’t mean it will be commercially viable. Sometimes ‘new’ can blind you to what’s actually good. It’s a mindset change.
The timeframe is also different – start-ups have to move at breakneck speed. Once you have funding and you are ready to go, investors are hungry to see progress. You have to be laser-focused on achieving your key milestones. Distractions will kill your business more than almost anything.
SIX
With Start Codon, was there a fork in the road where you had to make key decisions, whether it be the types of enterprises you were looking at, getting funding etc.?
I’ll mention two. The first was building the team. My co-founder, Daniel Rooke, is fantastic. He’s a lawyer by background and my COO. He’s very organised whilst I’m more about the creative, big picture vision, so together we synergise so well. We have other members of the team that contribute so much and we’re actually looking to expand even more. So, the fork in the road at the beginning is about figuring out who we wanted in the the team that would be running Start Codon.
The second one was when Covid hit, we were like, “Oh no, what do we do now?”. It threw our world. But for the better ultimately. We could have doubled down on the model but we actually evolved and pivoted in new directions because of it.
SEVEN
You also have a bar. When did that happen and how did it come about?
It was one of those opportunistic things. A good friend of mine, Tony Kouzarides, told me he always had a dream to open a pub. I was sitting with some friends one day who mentioned the owner of a bar down the street was planning on selling his stake and moving back to Spain. So I immediately called Tony and said, “Guess what, it’s not a pub but there’s a bar for sale. Do you want to go in?” and he said ,"of course!”. So the rest is history – we decided to call it The Lab. It’s a great place to network and have fun. And it’s actually part of a wider strategy – I’m a firm believer in there being multiple pieces to an ecosystem. It’s not just about, guidance and capital, you also have to have fun. Where can you go to hang out and meet interesting people and enjoy life. You work hard, you play hard.
I’m also a patron for a theatre company called Bread Film & Theatre Co – it’s a student led initiative for students from black and ethnic minority backgrounds to tell their stories. They have their rehearsals in The Lab so it’s finding opportunities like that to shake things up.
Communication is everything!
EIGHT
How important are those collaborative, serendipitous moments for anyone in business?
It’s essential. When we set up The Lab, it was about creating that space so the networking and serendipitous water cooler moments continued throughout the entire day. I think we’ve been isolated so much now, we’re losing out on that human element of just having a random conversation and seeing new sparks fly. So we’re hoping, in this new world we’re living in, that all spaces are going to be a mixed model – and not tying someone to a desk.
When I was at ideaSpace, on the biomedical campus, it was very much like that. We were there in the early days of Start Codon and it was so good just being surrounded by people who are also starting up. Being in ideaSpace made a huge difference. I remember bit.bio was getting up and running and they were there and loads of other companies. bit.bio just raised tens of millions and have built their own office space. So you go from those humble beginnings and you get to witness and keep in touch with those networks as you grow. ideaSpace will always be near and dear to my heart.
NINE
How has all of this journey affected your personal life?
I am fortunate to have a very patient and supportive husband. If I didn’t I couldn’t do anything that I do - and I would have a very poor personal life to go home to. We have our son, who is two, and we are really fortunate to have an amazing group of friends and family. You need that work life balance and have someone in your corner who can keep you grounded. I’m very grateful that my husband forces me to put the laptop down sometimes. I credit him with keeping me balanced and keeping perspective. It’s very important.
TEN
What does the word success mean to you? And if there was one lesson you could go back and tell yourself, what might that be?
It’s very personal. I don’t think there’s an objective metric or definition for success. Success and failure are about whatever outcome your trying to achieve and whether you achieve it. If success for you is financial, that could be your success. It could be how much public recognition you receive or how many lives you feel you’ve had a positive impact on. My measure of success is the latter – it’s about impact. I see Start Codon and everything I do as a way of impacting the world around me and helping right some wrongs that I think need to be addressed. Whether it be in the health space or to do with equality, diversity and inclusion. These are all things I’m very passionate about. If I can make a positive impact on those issues that I’m passionate about, then I’m successful. If I make a bit of money along the way, that’s a bonus. But that’s not the main motivator for me.
In terms of what I wish I'd known early on. Be fearless. I was so concerned about disappointing people, that I didn’t know enough, that I couldn’t do it. Early on, I had to build up enough self-confidence. Which is ironic because people say, “you’ve done a lot, you’ve won awards”. Just because you see on the surface that someone has received an accolade or scholarship etc., it doesn’t mean that deep down inside they are as confident as you think they are . In the early days, I really had to build up my self-confidence and say, “I’m going to go for it!”
ELEVEN
When you were CEO previously, what was the most impactful thing your board did and what has been the least helpful. I also wanted to find out about opportunities for people to be on boards – to be selected for one.
What’s helpful is if they’re supportive – which they should be. I used to get so much anxiety in the early days, feeling like I was facing a firing squad. But a good board are not there to attack you, they’re there to help you. And when they ask you how things are going, they want to hear the good, the bad and the ugly. So be open and honest, and build that level of trust so that if there is an issue, they can help you sort it. It’s much better than trying to hide it and think, “if I tell them, they’ll think I’m rubbish at my job”. That’s something I learnt very early on – to be open.
The thing that boards could do better is learn how to interact with one another. Most people just assume that all the problems are to do with the operational team so they say, “let’s make sure they do ice breakers and away days”. The board should do the same, instead of showing up once a quarter and then having their own individual motives. Sometimes you can get a lot of conflict between board members and it’s not constructive.
And for the second part of the question, a lot of it is who you know – you need to network. I think letting people know you’re actively seeking board positions, both recruitment agents and individuals in the community – they’ll think of you and put you in touch. And if you really want to get started, become an advisor. You don’t have to be a director, or non-exec director, you can be an advisor like on a general advisory group. I’m on a couple of advisory boards – I do it for free and I have no contractual obligations but that will help you understand governance and you can put that on your CV. It’s nice low hanging fruit.
TWELVE
What do you look for in team members? How do you hire, for example, a full stack developer who’s also got your back?
There’s an aspect of understanding what it is you’re trying to accomplish and being very clear on your goals. Often, even if you get the right people but wrong fit, then it doesn’t work. I often find that it’s not that a person is fundamentally useless, it’s that usually they’re in the wrong environment and situation for what you need. Usually, it’s a fit issue.
The other aspect is understanding what gaps you have in your team already and what culture you want to build. So if you know your lacking in a particular area, understand those gaps and bring in people to fill them.
You’ve got to be self-aware. The bias we tend to have is to bring on people that are just like us. It’s a subconscious human bias that too many of us have. And you end up with a homogenous team of people who are all great but it’s not going to move the needle forward. So understand your direction of travel, make sure you do a really thorough gap analysis and have that self-awareness. Then you can bring people in that fit the culture and build the culture you want. If you do those things you’ll find the right people.
Be fearless. I wish I’d known that early on.
THIRTEEN
What do you think is the next trend? What are we going to see in 3-5 years? What’s going to happen with this frenzy on start-ups and people taking big rounds? A look into the future please.
On the negative side, there’s going to a massive cliff, where there are too may start-ups and we’re going to have a contraction in the field. Not everything should be a start-up. Not everybody should have a start-up. Everyone is out there and it’s a very frothy space. So I think there’s going to be a massive drop off for the start-ups that just weren’t viable to begin with and that’s unfortunate, but it happens. And it’s better to do it early.
On a positive note, a lot of investors who have not traditionally been in the start-up space are wanting to get into it. I see late-stage investors wanting to go early, I see tech investors wanting to get into health, I see financial investors wanting to get into consumer. So there’s this interesting idea that people see there’s so much overlap in the different fields. It’s not only tech that’s overlapping, but also investors are moving into new areas and I think that’s really exciting. So I think there will be a bit of a contraction but also there’ll be more capital available from investors with different points of view, which is always good.
FOURTEEN
What do you consider are good communication traits?
When I was CEO, we used to have something called a town hall session every couple of weeks. Especially after we had a board meeting. I would tell the entire company what happened with the board, what was discussed that wasn’t confidential and get their feedback. I’d also try to encourage people to say what was on their mind. For the team to feel like they are really part of the journey and a key component, they wanted to be engaged. I don’t care if you’re the cleaner or the CEO, you’re opinion matters to me. I want people to feel empowered to do their jobs but also feel that they are being communicated with and their views are at least being acknowledged. You don’t have to follow everything they do but at least say, “this is why we made this strategic decision, this is why we’re getting funding from this source. What do you think? We might run out of money at this date. Don’t panic and rush out and get new jobs, we feel confident that the money will come in, but we want you to know that these are the facts.”
I think that open communication is everything. And even in smaller teams, someone will misread an email – so go talk to them. If you find that hard, find someone who’s a good communicator to facilitate that conversation. It’s not just about being transparent, it’s also about developing the tools you need to allow others to speak. A real pet peeve of mine is when you’re in a room and somebody sucks all the air out of it. I like to create space. Just because somebody is quiet, doesn’t mean they don’t have something as important, if not more insightful, to say than those who always like to talk. Be self-aware as well and listen– give people the room to speak.
FIFTEEN
Can you give us some advice on VC funded vs organic growth for tech and biotech companies? Is there a good way for a company to determine which growth path they should choose?
I think it’s very personal. You need to know what you’re trying to achieve, what the timescale is and the likelihood you’ll get there – also why you’re taking on venture capital. In some fields it’s much harder to go it alone and grow organically – like if you’re going in for a deep tech, biotech play and you’re trying to bring a therapeutic to market. If it’s not a digital therapeutic, the chances are you’re going to need somebody with deep pockets because grants aren’t going to cut it as you don’t have a product to sell to support yourself. If you’re in another industry where you have the opportunity to grow organically, you might say, “well I’m going to reach a certain inflection point where I want to accelerate my growth therefore I’m going to bring in venture capital at that point at a favourable valuation because I’ve been growing organically. I don’t need the money, I want the money” – it puts you in a much stronger position to negotiate when it comes to pre-money valuations etc.
So there’s no right or wrong answer – it’s very sector and individual dependent. I would say though, that capital is available, it’s flowing. People may not think that, they’re thinking, “well I’m struggling to raise capital, what are you saying?”. There’s a lot of dumb capital out there – there are a lot of sovereign wealth funds and investors with loads of money. But you have to choose the right person for the right reason. It’s not just, can I get money to do x? What else are they bringing to the table? What doors will they open to help you hone your strategy?
Huge thanks to Jason Mellad for sharing his Start-up Story with us.
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