Jason Springs is the co-founder and CEO of Endpoint Health which provides precision medicine and integrated therapies for critical care. The company has already secured $12 million in funding from investors, including Mayfield, AME Cloud Ventures, Wireframe Ventures, and Y Combinator. Prior to this, Jason Springs sold the previous company he cofounded, GeneWEAVE, to Roche in 2015 fo $425 million.
In this episode you will learn:
- Jason’s approach to team building and hiring
- Structuring a team to build a business that scales
- Optimizing and navigating the process of selling your company
- The future of personalized and precision medicine
- The most valuable things to focus on in your business
- This founder’s top advice for other entrepreneurs
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Jason Springs:
Jason Springs is a cofounder, a board member, and the CEO of Endpoint Health, whose mission is to use precision medicine to transform the way hospitals care for their sickest and most expensive patients.
Jason Springs cofounded GeneWEAVE, a diagnostics company that developed novel solutions to improve diagnosis and therapy choice in drug-resistant infections. Started in 2010, GeneWEAVE raised $25M in venture financing and was acquired by Roche in 2015.
Jason Springs received a B.S. in Economics and Management from the University of South Carolina and an MBA from Cornell’s Johnson Graduate School of Management in 2009.
Connect with Jason Springs:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have an entrepreneur that is a full-cycle entrepreneur. He has been there and done it a few times now, and obviously, he has built, scaled, financed, exited, and everything that you can think of. So, without further ado, let’s welcome our guest today. Jason Springs, welcome to the show.
Jason Springs: Thank you so much for having me. It’s really great to be here.
Alejandro: So born and raised in South Carolina, and you were there until your mid-20s, so how was life growing up in South Carolina?
Jason Springs: It was great. It’s a lot different than where I live now out in Silicon Valley. I grew up in a small town – a totally normal childhood. I think the biggest thing I took away was having a broader perspective than you get living in just a city. It’s great seeing a wide range of economic and industrial views. It’s great having both coasts in my history.
Alejandro: Very nice. This business part, it seems it’s been quite there. Did you have anyone in your family that was an entrepreneur, or how did you get that influence?
Jason Springs: You know, it wasn’t as much from family. It really came more out of some of my early work experiences. I think the industry I’m in – I work in healthcare, and I’ve been in healthcare for almost 15 years now. That was definitely a family influence. I think a lot of folks that end up in healthcare, they have a parent or loved one that’s had some experiences. That, I definitely took away. I’m sort of the black sheep in the family in an ironic way.
Alejandro: I hear you. In terms of universities, you went to South Carolina, and literally there, you went to work at a company that was not far away and doing aircrafts and satellites. So, tell us about this.
Jason Springs: Yeah. My first job out of college was with Lockheed Martin. For the listeners, Lockheed Martin is a big aerospace company. They make airplanes, satellites, software. That was a really lucky break for me, especially as a freshly-minted college student. I got to jump into what was effectively a new startup inside a company. What we were building there was a new business for aircraft owners around the world to buy replacement parts, services for their aircraft from distributors rather than going directly to the OEM. To make it more personal, if you have a car, and you buy an OEM part, we all know it’s expensive. We go down to Pep Boys. That was an amazing experience to see what it took to build a new supply chain, build data systems, and literally spend four or five years pitching customers in dozens of countries on every continent except Antarctica about how to look at this new business in a regulated, very important area where you can’t make mistakes. I got to work with dozens of small business owners. Many of the manufacturers we worked with had started their own companies. That’s where I started to get the itch of building something myself and learning what it meant to be in a big regulated market.
Alejandro: There you are in your mid-20s, and at one point, you decided that starting your own business was the way to go. How did you come to that conclusion?
Jason Springs: Yeah. One of the interesting things, I think, around – it was probably 2005, I saw an internal memo at Lockheed that there was a new technology expo at Sandia National Labs. Lockheed Martin ran Sandia National Labs. It’s a federally-funded research lab. I took time off and volunteered to hand out flyers at the event. It’s out in Albuquerque. What it actually was, was a venture capital pitch event. I had been thinking that starting a company would be really interesting, and I was like a kid in a candy store watching all these entrepreneurs onstage, pitching venture capitalists. I think Tim Draper from DFJ was the keynote speaker, and I was immediately hooked just thinking, “This is what I want to do. I want to take something new to the world and build a real enterprise around it and make the world better.” The rest was history. There was no going back after that. I came home immediately, and I knew I needed to do two things. I needed to get a bit more experience on some of the financial areas of managing a business, and I needed to find some business partners and some technologies. That spurred me into looking at different MBA programs because it was a nice way to get funding to learn about finance and go to the Ph.D. programs and find some business partners. That landed me at the Cornell Business School.
Alejandro: And there is where you met your co-founders, but when you were there, I’m sure you had some criteria or people that you thought could be a fit or what that ideal co-founding team would look like. So, what kind of framework did you have in mind?
Jason Springs: It definitely took a good amount of work to find the right partners. My past experience working in a very technical industry gave me a very important framework for looking for technical co-founders because it is really critical when you have a new technology or complicated business that both the business people understand and respect what it takes to build a new science or technology. And the inverse is also true that anyone who is building a new technology needs to appreciate that there’s just as much work and effort that goes into building an enterprise and ecosystem around it. So, that was probably the most important framework that, simply put, you need to have a cultural fit. Everyone needs to understand that each person is equally valuable, especially early on. The other one is that you want to have fun with these people if you can. You spend more time with co-founders than you may spend with your family. There has to be an initial culture there. That was definitely important. We had a great entrepreneurship professor there. His name was Wes Sine, and he helped connect my initial GeneWEAVE co-founders and me together, and the rest was history. We met the first month that I was there and have been working together ever since.
Alejandro: Did the idea come before meeting your co-founders or after you met your co-founders?
Jason Springs: You know, startup ideas are oftentimes an evolution. My two co-founders, Diego Rey and Leonardo Teixeira, were Ph.D. students in their third or fourth year of their Ph.D. They had come up with an idea for a new technology, but it really wasn’t until about three or four months working together that we figured out not just what the new technology would be, but what was the best way to use it to improve – it was a healthcare technology – to improve patient outcomes in a way that could be funded by an outside venture capital or a private funding group. It was a collaborative effort.
Alejandro: Then, after this, you come up with the concept, and then all of a sudden, you find yourself in Silicon Valley. The question here is, why did you move to Silicon Valley, and what also ended up being the business model of GeneWEAVE?
Jason Springs: Definitely, the story goes back to the times we were living in. We started GeneWEAVE. At least the three co-founders came together, and we were all there in 2007. As most people know, 2007 to 2008 was at least a minor dip in the economy. Right around 2009, when I was graduating, and we were getting ready to spin the company out, we realized that raising money would still be a big challenge. The east coast, especially the New York area, which is where Cornell is, got hit extra hard because it was certainly a financial crisis, among other things. We knew that if we wanted to raise money, we needed to go where the ecosystem for healthcare investment would be in place. That left us looking at Boston and Silicon Valley. One of my co-founders lived in Palo Alto. Like a lot of good startups, you go where there’s a couch to sleep on until you can raise money, and that’s what we did. We moved out to the Bay Area here and started pitching, and pitching, and pitching. I think we must have gone through 50, 60, 70 pitches before we landed our first term sheet.
Alejandro: Before we actually go into what some of those reflections were to optimize the pitch and end up landing the first round, what were you pitching? What was that concept?
Jason Springs: GeneWEAVE was a medical diagnostics company. What my co-founders had invented was a new basic technology to detect bacteria. That was really important. If you think about people in a hospital getting sick, one of the most important things you want to figure out is, does this patient have an infection? If they have an infection, which drug will work? Which antibiotic should be used? What we were effectively pitching is, we had a new technology that could detect bacteria much faster than traditional technologies in hours rather than days or weeks. It had a very unique capability of telling you when a particular drug you cared about would or would not work. This was becoming a bigger and bigger problem. A lot of people now are aware of antibiotic-resistance. Back in 2008, ’09, ’10, that was something that was becoming a big public awareness then, and it had not been so well-known in the past. So, we were solving that problem. The business model, at the end of the day, was: make diagnostic tests, get them approved by the FDA, and sell them to hospitals, which would be our primary customers.
Alejandro: Thank you for that, Jason. Going back to what you were mentioning, it took about 50 pitches to be able to land your investment, your first early-stage type of investment. Why do you think it took so long? Why so many pitches?
Jason Springs: You know, there are always multiple things going on at the same time. First, we were in a tough business. Diagnostics had historically been a tough business for venture capitalists to make money on. We were coming out of a very large recession, and many of the venture investors still had not recovered from that. Many of their limited partners hadn’t recovered. We were new. We were a brand-new team with no healthcare experience pitching a brand-new technology that had never been tried before to be used in a brand-new way by a set of customers that are enterprise customers. Hospitals are tough to sell to. It probably looked very risky to a lot of investors, but we learned one of those key entrepreneurship lessons that you only need one yes. You just keep going until you get to that yes and build from there.
Alejandro: Did you optimize anything on the pitch as you were going, and you were doing your pitches and seeing some holes or applying some of the feedback or did you just go with the same pitch to all the 50 until you got the money?
Jason Springs: I must have 300 versions of that pitch. I still have an old file of all the pitches. You learn a little something from each question that’s asked. Usually, you’re just figuring out what are those holes and how do you deliver confidence to the person that’s listening to you because it’s very difficult from the outside to understand all these new concepts all at once. I definitely modified the pitch. One of the really important things we learned was: make sure you find the set of investors that have a history of doing the types of deals that you represent. We were very naïve at the time pitching to anyone that would meet with us. By the end, we were very focused on finding experienced diagnostic investors.
Alejandro: That’s a very important point that you make because many entrepreneurs, and I’m sure that many of the people that are on the line, maybe what they’re doing is just throwing spaghetti on the wall and seeing any investor that they can. Probably what they don’t realize is that it’s all about the investment theses and grabbing people to optimize for their time and a potential investment that have to do with their domain, that have to do with their financing cycle, and also with their geographic location.
Jason Springs: Oh, yeah. Yeah, that’s a tough lesson to learn if you don’t listen to it. So, your listeners are getting a lot of value out of that right now.
Alejandro: So, how much capital did you guys raise in total for GeneWEAVE?
Jason Springs: The first round was a million-dollar seed round over the course of the company. We brought in about 25 million dollars over Series Seed, A, and B, and built the company effectively from an idea on a napkin, and I guess maybe on a PowerPoint slide, eventually, and some early proof of concept technology to 40 to 50 people. Two facilities down in Los Gatos, which is on the way to Santa Cruz. Then ended up having an exit. We ended up getting the interest of a number of different healthcare companies in 2015, which turned into an acquisition by Roche.
Alejandro: First company, first exit, and quite an exit, too, Jason. So, tell us about how this acquisition or inbound interest started to form, and then what ended up being the process that led to a 425-million-dollar exit.
Jason Springs: We’d been building the company up. In 2010, we were a true seed company building out initial laboratory work. By 2014, we were building the systems that would be taken through FDA trials. What our technology and our product, more than our technology really did was, we were solving the problem that hospitals had of figuring out who might have a drug-resistant infection. And most importantly, figuring out what in the world would actually treat it. That particular question, that clinical challenge had become publicly very large. In 2014, the World Health Organization and the CDC announced that drug-resistant infections were the greatest threat to modern healthcare. Like any big win in the startup world, a little bit of luck is always involved. That public awareness, I think, drew a lot of eyes toward the work we were doing. In 2014, we had publicly launched the company. We started showing up at the important tradeshows. A number of different diagnostic companies started approaching us and literally walking up to us at our booths and saying, “Would you be interested in talking more?” I learned in hindsight, that meant, “I’m interested in acquiring your technology, your company, so let’s see if there’s something there.” We found a number of different interested parties. Over a year period, we talked to a different number of firms, but we really resonated with the group at Roche. It’s Roche Molecular, the group that’s out here in California. We started a process. We hired an investment bank to help us make sure that we were presenting to all the different interested parties in parallel. I hate to make it sound so simple, but it’s similar to how you might want to sell a house. You want to make sure that you line everyone up so that all the same amount of interest and information happens at the same time. That led to an enormous amount of technical and organizational due diligence by Roche. In late summer, around August of 2015, the conclusion was made that what we were building had the potential to fill a really critical gap that companies’ current products simply couldn’t meet. That’s when the acquisition occurred. They were a great partner. They hired all of our employees. We transitioned over to working at fulltime Roche employees. l
Alejandro: Did you ever encounter any of those 49 investors that rejected you?
Jason Springs: I talk to them all the time, and maybe an important lesson I learned out of that was that some of my most important connections now are people that didn’t just tell me “No” once, that told us “No” maybe two or three times. Some of my best advisors are people that said, “No, you’re not the right fit for us.” Yeah, I talk with these folks all the time. Even people that said “No” will celebrate a success. It’s actually a pretty good community.
Alejandro: That’s amazing. Here you go now; you are part of a bigger organization of Roche, and there you are doing the vesting and resting, and you do it for a couple of years. Then, eventually, it comes to the point, as they say, “Once an entrepreneur always an entrepreneur,” and you decide it’s time to go at it again. Tell us about this.
Jason Springs: Yeah, once you get the bug, it’s hard to get rid of it. I will challenge the resting. I don’t think I’m capable of resting [laughter]. We’re all working pretty hard for those few years. But, yeah, you get the itch to work in a startup area. We love the folks at Roche, but I was still looking at what would the next big thing be? A couple of really interesting things happened around 2015. We were acquired, and we transitioned into Roche. Like anyone in the healthcare field, you pay attention to other big deals, too. At the same time that Roche bought GeneWEAVE, they bought two other companies that are more in the oncology space. One was called Flatiron Health, and one was called Foundation Medicine. What those companies did – Flatiron built software and Foundation Medicine built tests. At a higher level, they enabled clinicians to use broad sets of digital and biological information about patients to personalize cancer therapy and to figure out what the right new therapies are to make. I watched those two companies, and what they were doing, while I was at Roche, and traveled the world looking at the doctors and patients that we were targeting and realized, “Wow. You know what? The real problem” – at Gene, we were just scratching the surface of a much bigger problem or figuring out how to personalize care in hospitalized patients. About two years had passed, I was convinced that had to be the next big area. That was the 10x or 100x bigger problem I wanted to go solve. I left in 2017. I took a little bit of time off. Had my first child, and then my now co-founders who were at Roche, as well, also left a little bit later than I did, and we all got together and said, “Yeah. This is what we have to do.” That was how Endpoint Health ended up starting. We wanted to build the ability to personalize therapy in very critically-ill patients and bring new targeted therapies, new personalized therapies onto market. There was this massive open need that we wanted to go and solve.
Alejandro: Here’s a very interesting shift because you go at it with your same co-founders from your previous business, so I think that was, obviously, a brilliant move because you all know each other very well, and the biggest decision you make is who you choose to go with in the journey. But here, you went from being more on the marketing side on the previous company, GeneWEAVE, to now being a part of Endpoint more on the CEO seat. So, how did that transition come about?
Jason Springs: We had all learned an enormous amount about what it took, not just to build a new startup, but to transition it all the way from those early – you know, when there are two or three people in a room, all the way up to an FDA-approved product by 2017, 2018. We knew we wanted to work together and that we had this vision of what the right company would be. Maybe we looked at it like a heist film where we all brought a certain set of skills to the table, and figuring out what the right products were and how to bring the right people in was something that I brought to the table. My co-founders had a deep amount of experience building technical and operational teams. We also ended up bringing in a fourth co-founder who, by total happenstance, had been a classmate of mine in business school, who was a deeply experienced software and analytics developer. It was the right fit for each of us. We all brought in a unique gift. At the highest level, mine was storytelling for the company – really communicating the scale and importance of what we’re doing and how we would go and do that. At the end of the day, the role of the CEO is, find good people, create a vision, and get the resources those people need to execute. That’s what we set off to do.
Alejandro: In terms of, for example, building the team, because I’m sure you got quite a bit of learnings from not only from building GeneWEAVE, but then the integration process, and then now being part of a much larger organization at Roche, and really, again, continuing to experience those relationships, the structure, the way things are organized, and even more now at a larger level. So, now, going from small to large and then now to small again, how did you think differently around building your team? How did you think about it in a way that perhaps you didn’t think about when you were building GeneWEAVE?
Jason Springs: Oh, wow! It’s totally different. The lessons learned are pretty big, especially when you’re dealing with a complex regulated environment. I think one of the biggest things that we did right – you know, there are two big changes right off the bat. One is when we look at building teams you know right from the start that there are going to be different stages of the company as you move from your initial idea at a round table to having your first five to ten employees working on mostly research, and then shifting into development and commercial stage. One of the things that gets missed a lot, especially in deep technology-focused companies is, understanding that it takes different personalities to excel at those different stages, and it’s not about intelligence, it’s more about finding the right fit. We worked very hard from the beginning, and even right now, we have these discussions every day on how to structure our team today and how we’re going to grow it to one that can scale and produce new technologies at a rapid rate, but also at a manageable scale. You have to bring the right people in at the right time and have them working on the right tasks. Until you’ve seen it done once, it’s pretty hard to get that right.
Alejandro: Very cool. In terms of culture, how do you think about culture?
Jason Springs: That’s funny. Actually, every time we interview someone, we basically tell the folks, “We’re looking for 50% technical skills and 50% culture.” Building new therapies or healthcare products can be a very long process in some cases, although we think we have an accelerated way to do that. It is the team and how cohesive they are all working together that gets it through. Just like I was looking for people that understood and appreciated talents outside of what they had when we were founding GeneWEAVE, we do the same thing at Endpoint Health. I think we focus on culture. Maybe it’s 60/40 now, especially as you have a more distributed environment during COVID-19, where you’ve got to work together at all kinds of crazy hours across video. It takes a lot more work to keep the team cohesive.
Alejandro: In terms of raising capital here, how did you guys go about raising money?
Jason Springs: We were lucky enough to have built a network of different investors that we talk to on a regular basis. What really happened for our first round of financing at Endpoint Health was we met a couple of folks at the Mayfield Fund. We met them through some of the connections that my other two co-founders had. They were both visiting partners at some startup incubators; one is Y Combinator. The way we ended up meeting together was just a connection of a connection of a connection. It goes back to be nice to the folks that tell you “No” and keep meeting more people because we ended up just talking about our ideas at a high level with our main partner at Mayfield. He became so excited about the idea of building a new category of medicine in an untapped area of healthcare, which is mostly hospital care, that the round came together without us actually planning to go and officially raise a round of financing. That firm was the right firm at the right time. They had helped build giants like Genentech and Millennium Pharma, and also small companies like Lyft. It was the right deal at the right time. We were excited to take it, and it’s one of the best decisions we made.
Alejandro: Tell us what the future holds for Endpoint. If you were to go to sleep tonight, and you wake up in a world where the vision is fully realized – maybe you wake up in five years – a tremendous snooze, and you wake up in a world where the vision is fully realized, what does that world look like?
Jason Springs: The best way to see what that world looks like is to think about what it is today and how it will transform. Endpoint Health has two main abilities that we want to make real. One is, we want to enable doctors in intensive care units to personalize therapy to their sickest patients. And we want to bring new therapies and put them in the hands of those doctors. The way to do that is precision medicine. It is looking at lots of data about these patients and figuring out who are the sub-groups of patients that need a specific cocktail of therapies? Today, there are no approved therapies for some of the biggest killers in the intensive care unit – things like sepsis. If you look on the nightly news, you’ll see examples of people dying from critical infections like sepsis and respiratory failure every day because that’s what COVID-19 causes. We’re sitting here, hoping that with our help, five years from now, we will have shifted the standard that people use to care for patients in intensive care units around the world from a one-size-fits-all method of giving exiting therapies and developing new therapies to personalized therapy that should be the way that all patients are cared for with a fleet of new therapies being developed for use in our sickest patients with things like sepsis or pneumonia or COVID-19 induced infections. I think we’re well on our way to do that of all things. The current pandemic, for many companies, it slowed things down for those involved in areas like telemedicine or directly working on new therapies for very sick patients. It has been an unbelievable amplifier to accelerate research and development and partnerships. We think it’s an achievable vision, and we’re very excited to go after it.
Alejandro: Nice and one of the questions that I typically ask the guests that come on the show is if you had the opportunity to go back in time and have a chat with that younger Jason that was in Cornell, finally got his buddies, finally got that band together to do something. If you had that opportunity to have a chat there and say something to that younger Jason, maybe like one thing about launching a business, knowing what you know now, what would be that one piece of business advice that you would give to yourself and why knowing what you know now?
Jason Springs: One thing that I think the me at that point could have done much, much better is reach out for mentors; find people who have built and sold a company in your area or close to your area that can give you guidance because when you go out, especially your first time, and you build a new business, the amount of pressure you put yourself under is just enormous, and it feels like there are a million problems that all must be solved perfectly. What you learn in hindsight is that there is really a subset of 10%, 20%, 30% of the types of problems that you’re thinking about that are really going to matter for raising new financing. If you get the right coaches who can help guide you along that, and listen to the right podcast that can help guide you as well, you can do two things. You can lower a lot of anxiety, and you can focus more acutely on the things that are going to drive value and accelerate your fundraising. I think that’s something I would have told myself, and I still tell myself that every day. It’s a continuous lesson to learn.
Alejandro: Very profound. Jason, for the people that are listening, what is the best way for them to reach out and say hi?
Jason Springs: I think the best way to be LinkedIn. That’s where most of our communications got out. It’s Jason Springs on LinkedIn. Send me a note. We’d love to hear from you, and you can follow us on our website, as well: https://endpoint.health/. We love to hear from interested folks.
Alejandro: Amazing. Well, Jason, thank you so much for being on the DealMakers show today.
Jason Springs: Thank you so much for the opportunity.
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