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Using Data to Tackle Disease: Founder of iLof Joins Startup Savants

Adriaan Brits

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This episode of Startup Savants features Luis Valente, co-founder and CEO of Intelligent Lab on Fiber (iLof). Luis is an award-winning business manager and engineer who founded his first company as a teenager. He has been named one of Forbes’ 30 Under 30 for Science and Healthcare. 

Chatting with podcast hosts Annaka and Ethan, Luis revealed the events that drove him to abandon a computer science background and found a company in the healthcare sector. He also talked about his experiences in putting together a team, funding a startup, and the challenges of scaling an enterprise. 

What’s the problem that iLof aims to solve?

“So, iLoF was born out of the realization that for the past centuries treatments have been developed based on this idea that the same medication would work equally for everyone. Which, unfortunately … is really not the case and I mean, there’s a very clear case of that which is Alzheimer’s disease. So for the past 20 years, there’s been more than 400 tries of well getting a successful and disease-modifying treatment into the market and they mostly all failed for various reasons.

So, it’s really important to develop medications that are tailored to specific patient groups, and this is basically what iLoF was born to do. So, we are helping researchers, physicians in biotechs and pharmaceutical companies understand better the patients that they are creating the medications or the treatments [for]. And so we are cutting the time and the cost that it takes them to create these medications and hopefully this will allow, well, millions of patients currently living with complex neurological diseases to finally get a treatment that it’s actually useful for them. Starting with neurodegenerative diseases, which unfortunately are one of the biggest epidemics of our times.”

Can you walk us through what iLof does?

So, in developing this medication, it’s really important that we have information about the different profiles of a disease and we had that … And in order to study these profiles further, there really needs a way to collect mass amounts of data on patients’ biological profiles. And well, the last couple of decades some companies have been trying to do it with let’s say genomics, with multi-omics approaches.

But if biological profiles can be curated through genomics, why is another method needed?

“The truth is that collecting data on genomics, it only gives you half of the picture, it’s very interesting in telling you what can happen to your body. So, let’s say your baseline profile when you’re born, but it’s not so useful in telling you how your profile changes as you grow old, as you make different lifestyle choices, as you eat differently, live differently, so you need different kinds of data aside from genomics.”

What is the iLof methodology?

What iLof is doing, we are using optical data, so we are using, let’s say spectrums, the way that the light interacts with patients’ biological fluids, to understand the ensemble of particles in patients’ biological fluids. Your peptides, proteins, exosomes, lots of very small particles that are in your blood, in your plasma and that really make your biological profile. So, what we do is we collect mass amounts of this biological data using, again, optical sources. So literally, we shine a laser beam into a sample, we collect a reflection pattern and then [perform analysis] using very advanced machine learning and deep learning methods.”

How is this data put to use?

“We’re able to extract a lot of information that is then very useful for this drug discovery and drug development processes. So, we sometimes say that what we’re doing is astronomy for biology, so we’re actually stacking together a lot of very noisy and complex data. And this allows us to see very small, so astronomy normally does the same for seeing very big things that are very far away. We are seeing very small things that are very close to us but that are actually very hard to identify. So, this is basically what we do, collecting very large amounts of data. That’s basically what we do and working with pharmas and biotechs to help them cut the time and the cost.”

Your background is computer science, how did you get involved with the digital health sector?

“That’s an awesome question. So, first of all, yes, my background is in computer science, but I had some background in healthcare before. So I was working in, let’s call it tech transfer, so I was working in taking innovations in the healthcare sector into the market. And basically what I understood is that there’s a lot of very great science being done that can actually help and solve a lot of, well, some of the biggest world problems. But researchers have a hard time translating it into the market, and this is something that got me very curious.”

And this experience led to the notion of starting a company?

“So, I eventually left that job, but I remain in close contact with the team that was developing what today is iLoF when back then was just still mostly an idea. And so basically with three other co-founders that have, well, PhDs in biochemistry and then let’s say a healthcare background, we in late 2018 started making the first steps to launch this company. And I don’t think I could have done it without my co-founders, but I guess that’s what startups are, right? It’s building something out of nothing with the help of hopefully very smart and dedicated people.”

Your co-founders were all PhDs and already established in their respective organizations. How did you convince them to trade that stability for the uncertainty of starting a business?

“So, the problem needs to be big enough, and the opportunity needs to be big enough … I think what really makes people drop their day jobs and join you on the journey is just this idea that when they hopefully change the lives of millions of patients with something that you built from scratch.

Your current focus is on Alzheimer’s. Why is that?

“Every year, the number of people that are diagnosed with Alzheimer’s is growing and growing, and it will grow tremendously in the next decades. There’s no disease-modifying treatment, and there are very few ways of actually understanding how to create better drugs for these diseases. So, when you’re faced with such a big problem, and of course, there’s also a big market opportunity to match it, well, I guess if you have that founder I would say mentality, you just feel like a social responsibility to do something about it, and this is what I guess every one of us felt. So, eventually, we all came together and said, ‘Let’s start this and let’s create iLof.’ And three years later, here we are.

How was the balance of power with your co-founders worked out?

“[By using] as much data points as possible. I’m very much against the idea of ‘let’s split it equally.’ And I have a lot of founders, which are my friends that are also very much against this idea because even if in the beginning it might seem like it’s the easiest way to go, in the long-term it actually doesn’t work. So, I think we used some calculators in the beginning that were online where we just inputted and responded to a couple of questions. And it just output to the number, and then we started working around those numbers. But I would say it’s a very important thing, and I’m firmly again against equally dividing because situations are different, people are different. And you should take all of that into account when starting a business and assigning ownership.” 

Your technology is a novel tool meant to improve research capabilities. This is a step up from the use of digital communication technologies to improve access to healthcare, right?

“I would make a distinction between med tech and digital health. There’s a lot of companies, especially during COVID that were created, working on the digital health space. That was in a way working in this middle ground between pure tech and pure health. And we are talking about telehealth companies … facilitating access to healthcare services or something like that. 

In our case, we’re purely deep tech, and this is why I would say since day one, we kind of were supported by also very renowned institutions. So, we were and still are incubated at The Oxford Foundry, which is the Oxford University accelerator, and since day one used a lot of that ecosystem to well develop our product, develop our technical and commercial relationships. So, building a deep tech company in healthcare but also in other areas is definitely a different beast. And I understand why some founders are moving into less regulated and less complicated spaces, and I can’t blame them actually, because it is hard.”

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How is iLof affected by data privacy rules?

“A good question. First of all, I think there’s a significant difference between the use of data and healthcare and the use of data in other industries and I’ll give you an example in advertising. Yes, Facebook and Google, they want to know profiles. But if they can, not only do they want to know a certain profile, as they want to know who you are, right? Because they want to sell you something to you as an individual, okay?

Now in healthcare, it’s very different, right? The only situation where you are … interested in the private information of a single individual is when it’s trying to help that specific individual, a physician, right? You go to the doctor, I mean, if he could, you would like to have access to all your medical information. Not because he wants to sell your services hopefully but actually because he wants to help. He wants to make the right decision, he wants to make the right prescription for you. 

Now in healthcare and speaking of iLof, we are not interested in data about individuals; we are interested in … profiles, okay? And this is why we only receive anonymized data … And then, of course, we use it to create profiles that well could never be traced back to a certain individual but can actually help millions of patients.”

Do regulatory authorities place any restrictions on your marketing communications?

“Well, it depends … In healthcare, it’s a lot about the claims that you make, okay? If you make a claim that you’re going to cure some illness or that you’re going to diagnose cancer, then this is a very big and a very bold claim, which most healthcare companies are actually not allowed to do… Even if we have very strong, scientific data to say that, we’re not actually allowed to say that we can because it’s regulated. And this was actually one of the reasons why we chose to be working mostly with businesses. So biotechs, pharma, hospitals, where we’re actually not claiming to be let’s say interfering into the patient’s pathway. The only thing that we’re doing is we’re helping them do their job better. ‘Oh, you’re developing a new medication, I’m going to help you do your job better. Oh, you’re trying to understand what is the best treatment to this patient, I’m going to help you do your job better.’

How are you affected personally by data privacy issues?

‘It’s scary, I can give a data point very quickly. I think I’m profiled everywhere as a founder and it’s really interesting seeing what Google and Facebook and Amazon think that a founder would buy. Because it’s really interesting what they sell; coaching services, they sell a lot of services for people that don’t have time, like those 10-minute grocery delivery things. And it’s really interesting because in a way it’s like, ‘Is this who I am? Like, is this the kind of consumer that I am?’ But it is scary, and we don’t have that in healthcare. We couldn’t care less about specific individuals, and actually, we would respect people’s private data too much to do something like that.”

How is iLoF funded?

“So, we are funded since the start by a mix of let’s say private and also public funding, I would say in a proportion of 80% private, 20% public, let’s put it like that. And so we … raised a couple of funding rounds with investors that we are very happy to have with us. And some of them are corporates like, well, Microsoft and Osram and also very good VCs like, well, Mayfield, Luna Ventures, Favor, a couple of others. And I think that this mix between grant funding and equity funding has been working very well for us in healthcare. I actually don’t think there’s a way for you to really get to the market without using some public funds…we also have some sales and clients. But at this point I’ll say in the very startup way, we’re not profitable, so we mostly rely on equity funding and grants.”

You’ve used the term ‘smart money.’ What is smart money?

“First of all, being in an investment relationship is like a marriage … especially in healthcare, the average time from inception until exit is seven to nine years … So, when you’re getting investors at seed-stage … you’re three years in and you’re raising a round, and you have probably four years to go until an exit … You need someone that can [help] your business because otherwise just dumb money … I mean you’re just competing on terms. It’s just like, ‘Okay, who can give me the most money at the cheapest cost, right? At the highest evaluation, whatever.’ And that normally never goes right. So you need someone that can help your business through connections, through introductions to customers, to partners, to other investors, actually because again, this is a perpetual process. You’re raising a seed, 12 months later you’re raising A, 12 months later you’re raising a B. And a lot of times these intros actually came from the investors that backed you in the beginning, so this is number one.”

Number two, there needs to be a fit … You are in a way dating … a lot of people are super cool [but] we choose a certain person to live with us and to marry … because we feel like there’s a fit … So, when I say smart money, you really need to think … is this relationship going to work in the next four years or one year down the line I’m going to be, ‘I have a call with this guy tomorrow, I really don’t want to go.’ And if this is the case, then no matter how good the terms of the money are, just don’t take it because it will not be worth it, it will go terribly wrong. And number two, can he help you? Because if he can’t help you sooner or later, you’re just going to start looking at that, that’s just money. And this is like when people … choose their partners just based on their bank account. There’s always someone who has more money … And you’re always going to say, ‘Okay, why did I choose this one and not the other one?’ And so this is why smart money is the right way to go … So, basically at this point, it’s really important to understand what people can bring to the table. ”

How does a founder make initial contact with the VC community?

“So I can tell you how I do it, right now it mostly comes from networking with other founders… intros from other founders are actually a very good way of getting to know investors… 

Number two … if you want to see giraffes, you need to go where giraffes are, okay? So going to places where VCs normally go, it’s also a very good place to meet them. I think I’ve actually met half of the investors that have invested in iLoF in conferences or startup events where I just had, ‘Hey, okay. Hi, I’m Luis.’ I just introduced myself, or I asked someone, ‘Hey, you know this guy? Okay, can you introduce me?’ 

Now, when you’re really, really, really starting, and when I say starting is literally just created a website, a LinkedIn page, a Twitter, and an Instagram. You just created an email, and you are like, I don’t know, three co-founders in a garage thinking, ‘Okay, now what?’ I would create a narrative, I would create a pitch deck, and what I would do, which is basically what we did is I would apply to every single startup competition out there, okay? And you would go, and you would pitch, okay? And you would sell yourself like crazy yourself, like the company.

And then eventually you will get picked up because this is actually a way that a lot of investors have deal flow. They are juries in this startup company. The words don’t mean anything, well, sometimes they give you money. I think we got like $50,000 at a time and one time we got like $30,000 and like that was the maximum, right? But in the big scheme of things, it actually doesn’t move the needle, but it really helped us, no VCs, no partners, no clients. So I would absolutely advise in the early stages, just do as many startup competitions as possible but of course, don’t stop building the product, right? So, this is advice to mostly CEOs, right? Okay, not to CTOs that should be helping build a product, but at least it worked for us, it worked quite well.”

What should be done to gain credibility with investors?

“In the beginning, there’s not a lot of social credit that you can actually take and you really need to put yourself out there and in a way, appear more professional than you are, okay? Yes, you are three guys out of a garage, but you don’t need to seem like three guys out of a garage, okay? And this means website, this means the way you speak, and this means pitch deck, just the way you communicate, okay? So, when you go to these competitions, in the beginning, you won’t have much, okay? So all you’re selling is the product, the team, and the vision, this is all you’re selling, right? I’m sure you still don’t have a product, right? This is why you’re raising, you’re raising to build a product, you’re pre-seed, right?”

At the point where the product is still in the making, what do you have to sell?

“So, you need to sell your team like crazy. Okay, ‘this is why we are the best, this is why we are the best guys in the world to tackle this problem.’ Because I did this course, because I found the X company, or just because I’m going to work harder than everyone else because I’ve always wanted to do this all my life. And people really need to believe, people really need to see. So sometimes I see VC saying, ‘That founder’s spark, it’s like, it’s sparks. Like just you see an aura around him.’ And you just know, I mean, I don’t understand half of what he’s saying, but I see he’s going places, right?”

How are market considerations factored into your pitch?

“You really need to pick a big problem. VCs don’t invest in markets smaller than 1 billion normally, okay? Normally. Because the way the VC model is structured, 80% of the companies will die, 15% of those companies will exit at cost, so they will now win or lose, and then 5% will pay the entire fund. So, those 5%, they really need to be moonshots, okay? So, if when you’re starting you’re selling a problem that’s going to have a market of 500 million, just forget it, it’s not going to work. They won’t invest, and they won’t tell you why and this is what’s frustrating. They won’t tell you, ‘you have a great idea, you have a great vision and a great team, and I’m not funding you because the market is not big enough.’ Most times they won’t tell you that, but that’s actually why they’re not funding you.”

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How was your idea validated by experts in the medical field?

“We joined a pre-accelerator [in Germany] and they forced us … to attend a Boston-based program called CRUSH … a very reputable healthcare organization … with various members like Harvard Medical School, MIT, and a couple others, that just come together to bring innovation into healthcare, okay? And what they do is they have this six-week program where … they put these ideas through a meat-grinder.

And one of the things they do is they force these companies to every week speak with 10 global experts on the area that you’re creating your idea and report back the detailed interviews. [Over] eight weeks we ended up speaking with more than 100 global stakeholders in personalized medicine with written interviews, okay? Where we were validating, what is the problem? And we started out by Alzheimer’s, okay? What is the problem? Why are these clinical trials not working? Why have for the last 20 years, 400 clinical trials failed, and no new treatment was approved? What is the patient problem? Okay, why are patients actually complaining that they don’t want to be part of these clinical trials? And the reason, in that case, is because they’re using very invasive techniques and well. So, for example, there’s a procedure that involves sticking a very large needle into your back to extract, no one wants to do it, right? No one wants to do that, it’s part of a clinical trial.

So, we validated … our business proposition speaking … In that process, we ended up getting … 15 letters of intent from a mix of pharmas, biotech, and hospitals that said, ‘Okay, these guys, they’re a good team. They seem to understand the problem very well. If these guys get funded, we really believe in the product they’re going to build.’ And again, at that moment, we don’t have a product, it’s just an idea, right? It’s just in that idea stage, so all you can sell is the team and your vision.”

What is the biggest roadblock you’ve had to overcome while launching and scaling your startup?

“Getting people to believe that you’re the right person to tackle the problem you say you’re tackling. There’s billions of persons, why you? Why your team?”

What is your number one piece of advice for aspiring entrepreneurs?

“Make sure you are solving a problem that’s worth the effort, really because there’s going to be a lot of effort. Make sure you’re solving the right problem number one and make sure you are ready to really work for it. All that idea, founder cocktails on the beach, awesome dinners with investors, just it’s not like that, that’s like 0.001% of your time. I spend most of my time doing very boring things and very unimportant things, well important I’ll say for the company, but they seem very simple. If you’re not solving a problem big enough you’ll get bored, and you’ll quit long before you actually reach your goal. Make sure the problem is worth it.”

You can find the Startup Savants podcast on Apple Podcasts, Google Podcasts, or wherever you listen to podcasts for more startup stories, entrepreneur advice, and industry insights.

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