Todd Merrill:

Hi, welcome to Tales from the SkyLounge. It’s a podcast about business, consulting, and venture investing. We get out there in the world. We talk to people who are making it happen, and we get their stories. If you can like and subscribe, it makes producer James very happy. So, today’s guest in the SkyLounge, Chris Tomajan. Hi, Chris.

Chris Thomajan:

Hey, Todd. Thanks for having me.

Todd Merrill:

Yeah, it’s good to see you. So, Chris, who are you and what are you working on?

Chris Thomajan:

So, I’ve been a finance guy for most of my career. But before that, I went through the well-trodden path of getting an English major and then converting into a CFO. So, there were some twists and turns along the way. I got out of college with an English major, wondered what the heck I was going to do. So, I traveled for about a year or two. I worked in a disco in London for a year, which was a blast. And then I came back, and I had to find a professional route. So, I threw on a suit, and I worked in a law firm, which I hated every single second of, and that actually kind of steered me to business school. And I ended up going to Columbia Business School and getting a business degree, a great two years of my life. And then for about the last 35 years, I’ve been a CFO, mostly with small startups.

Todd Merrill:

So, English, hospitality, lawyer, MBA, finance. Now you’re home.

Chris Thomajan:

Clear as mud.

Todd Merrill:

So, it’s fun how, you know, the universe kind of puts you on the path you’re supposed to be on.

Chris Thomajan:

Yeah

Todd Merrill:

You know, it just takes you a minute, right?

Chris Thomajan:

Well, and everything you do that doesn’t work out gets you closer to something that will. So, I was never all that concerned that, you know, I didn’t like law, for example. I just crossed it off the list and …

Todd Merrill:

…yeah

Chris Thomajan:

Look at the next thing.

Todd Merrill:

And you know a little bit about law. So, that’s good. So, you’re in Boston right now, right? And so, you’ve been a part of that ecosystem up there. I want to get back to that, but early career, I think you worked at Delphi was kind of the first kind of really big thing, and y’all were doing great things about the internet, you want to talk about, you know, right now, everybody, you know, history rhymes. It never repeats. So, I feel like right now, this kind of AI bubble feels a lot like the internet or the.com or the you know, whatever bubble before it, do you get it? You know, Delphi was kind of real thick and a really hot subject very early on. Can you kind of compare and contrast back then with your English major background? You know, what was going on back then to what’s going on now? Do you feel like this is the same or different or kind of, what are your thoughts on all that?

Chris Thomajan:

Yeah, it was interesting. I joined Delphi in 1989, back when it took half an hour to explain what a modem was. And I think we were using 1200 baud modems, which meant that there was no video or anything like that. It was all text. AOL came along and had a nice-looking frontend and really dominated the market. We couldn’t quite keep up with them, but wound up selling to Rupert Murdoch’s News Corporation. And I’d say along the way, Todd, you know, it does have many of the same feelings. There’s a lot of hubris. It feels like the wild west.

You’ve got a lot of pundits coming out and saying with absolute certainty what’s going to happen. And AI is going to take over jobs, and you know, just don’t even bother leaving the house for the post-graduates. And so I think it’s important to just kind of sift through that. Usually, the truth is somewhere in the middle. And with the internet, I don’t think there’ll ever be another internet. That was just so revolutionary. We went from, you know, telephones and maybe we had a car phone or something, but being able to communicate over the internet was really something else.

With AI, I think we’re going to find out, but there’s certainly a lot of good. I kind of liken it to good AI and bad AI, meaning, it’s kind of like the cops with their radar detectors. They keep getting better technology, and the bad guys, AKA the people, you know, speeding, keep getting better technology, and there’s kind of this leapfrog of. So, I think there’s a real opportunity there in the security space in general with AI, and we’re going to need humans to run it. I don’t really see that disappearing for a long time. So, I think there are some new opportunities that people haven’t maybe scratched the surface of quite yet.

Todd Merrill:

Yeah, I agree with you. I don’t think AI is going to replace people. I think it’s going to make the existing really good people even better and great people. Right. And then we’re not going to get away from that. You know, if you’re looking to make an org chart of bots, like you’re going to be disappointed, I think, that’s my opinion.

So, you know, we always talk about the Gartner hype cycle curve, where it sounds like trough of disillusionment about to kick into whatever’s next, you know, that like realization of, okay, we have this is meaningful, like, we know what the hype was, you know. Let’s heads down and start cranking through this and make it useful. So, okay. Well, I mean, that’s interesting. And then, so, at Delphi, were you CFO over there or what was your role at Delphi?

Chris Thomajan:

I got hired right out of business school, didn’t know a debit from a credit, and I was paid with my skills, which is to say I’ve made 30 grand a year and I got a bunch of stock options. So, I think the first two weeks, I didn’t really even understand what they did. I was just so happy to have a job. I was on the finance side and, yeah, that really evolved quickly. It was, you know, there were two kinds of simultaneous races going on. One was the content and how to provide better enhanced content. A lot of companies just tried to repurpose their content, and guess what? You’ve got to sell something if you want to make money. And I think a lot of people missed that. Mainly, along came eBay and, you know, others like that. And the other thing was the bandwidth race, you know. As the bandwidth improved, we were able to deliver more better-looking services and more video components. And that’s kind of continued to this day, you know, that race continues.

Todd Merrill:

Yeah. It’s kind of like back in the day, you know, we called it, picks and shovels or speeds and feeds, you know, people wanted bandwidth and then somebody else’s job to go figure out what to do with it, and you’re kind of on that, the receiving end, all that, right? So, you know, maybe AI is going to be like the picks and shovels, you know, it’s not about the AI. It’s like, okay, yeah, everybody’s got it. Now let’s all settle down. Like you said, you still have to make something and sell something to somebody, right? That’s never going to change, but you just do it a little bit faster, a little easier, right now. It’s interesting. So, you said you sold Delphi and got out of that, and then what got you… I know you had a pretty good run up there in Boston with biotech. What kind of got you into that area?

Chris Thomajan:

Yeah. So, I went through, probably six or seven startups, always as CFO, always venture-backed, you know, some with good outcomes, some where we folded up the tent, kind of a typical startup resume. And then I joined a company called TechCXO as a partner and provided more of interim and part-time services to multiple clients, and really hit the biotech bubble in about 2008. And what I loved about that was the mission-based nature of that. You get out of bed, and you’re curing cancer. Or in one case, I worked with a company called QurAlis, shout out to them. They have Phase 2 trials going on for an ALS drug. And two of my family members have died from ALS. So, really got my butt out of bed every morning and gave me a purpose, and I enjoyed that.

The nice thing about biotech, life sciences in general, you know, I include med tech and healthcare tech, but I’ve been mostly focused on biotech is, you know, the PhDs who are progressing the science have no idea what I’m doing. And by contrast, I have very little idea what they’re doing either. I get some by osmosis, but there’s this real need for both of those things, which is kind of illustrates how a company should operate is, you know, you should have people focused on their silo, but able to cross for allies with others, and make the trades run. I want them in the lab. I don’t want them worrying about cash or machine or whatever. And they don’t want it to be doing that either. So, I felt like I’ve added a lot in that.

Todd Merrill:

So, you feel like there’s this kind of network effect in Boston where, you know, successful people plow it back in, and then it’s just a little bit easier to raise the next round.

Chris Thomajan:

Yeah. I think Boston’s got a, and it’s not totally unique, but it’s probably pretty extreme in the US is the university system and the research system, you know, MIT, Harvard, BU, BC, Northeastern, whatever. They keep cranking out these really skilled people who, in turn, get together and build companies. Traditionally, up until the last year or two, there’s been a terrific capital network. So, we’ve had venture and PE firms, willing and able to fund these companies. So, there’s never really been a dip. You know, when I was younger, the big companies around here were Wang, Dex, Prime, you know, hardware companies, and those are all gone. And they’d been replaced by these really cool, you know, often healthcare tech companies, internet companies, SAS companies. So, there’s been a rejuvenation every couple of years. And I think Boston’s been unique in that, being able to reinvent itself.

Todd Merrill:

So, you think the talent pool is exceptional, and then smart people are always going to figure it out and find a way, and there’s always going to be capital that wants to go help some really smart people, bet on the jockey, so to speak?

Chris Thomajan:

Yeah. And that underpins the whole entrepreneurial spirit, I think, is if you can raise some money and make a go at it, you know, you’ll be able to find willing and able participants to help you run a company, and that’s, you know, wash, rinse, repeat. And that’s what we’ve been seeing here over the last 20, 30 years.

Todd Merrill:

And you had a good run of folks you were involved with that went IPO and were successful. So, kind of what do you look for? You know, what are those companies? Yeah, I’ve done a bunch of startup stuff, too. And you kind of get a sense real early for like, you know, this is definitely not going to go, you know, and then can they pivot? And then I’ve got my little kind of weird things I look for. What do you look for in a young company that, you know, gives you that confidence that, yeah, okay, these guys are special. They’re going to make it.

Chris Thomajan:

Yeah. I would say, you know, various studies have shown that you need like $2 billion to get a drug approved soup to nuts. So, the only way to do that realistically is to go public. So, anytime I join a biotech, my job is to get them to the point of going public. Now they don’t always get there, but I make sure that the foundation is there. You know, you’re not going public off of QuickBooks, or your systems are up-to-date and ready to go, and you’ve got a team in place that’s ready to go. And so that’s what I see my job as. And as a part-timer, I get to that point, and then I get out right before they go public and that’s happened five or six times. But in terms of your specific question, you know, it’s all about the team, Todd, I think you probably would agree. You get a sense now. I’ve worked for over a hundred different companies and been involved with, you know, over a hundred different management teams, and you just get a sense for the people who get it. Some people are a little hubristic and salesy, and that kind of rubs me the wrong way. You know, not just in and of itself, but it’s the serious people and people who’ve kind of been there, done that, and as you said, I think earlier, you know, you bet on the jockey, and if you got somebody who really knows what they’re doing, you’ve got a much better chance of being successful. You can get a pretty good product to market with a great jockey, but there’s no way you’ll be able to do anything with a pretty good jockey unless you’re super lucky.

And then, you know, that goes beyond the management team to the investor group. Some of the investors I’ve worked with around town are well-known national VCs like Third Rock and Nova Ship, all those types of folks, and they know what they’re doing, too, and they’ve been through the rollercoaster. And that’s the important thing, you know, I think, what I bring to the table a lot of the time is just a little calm under fire. You’ve got these young, talented entrepreneurs, and one day, you’re the toast of the town. The next day, you know, you got three months of cash, and you’re trying to figure it out. Trying to navigate those waters is what I try to do, and try to help people stay steady.

Todd Merrill:

So, do you look for management style? Do you look for experience? Do you look for grit? Do you look for, you know, is there some kind of category that you put these people in, or what do you think is the most important quality for a founding team, particularly in a really technical-type biotech?

Chris Thomajan:

Yeah. You know, I wrote an article comparing CEOs to fine wines. And I really look at the CEO as the key indicator. And the thing I most look for is can the CEO delegate to his or her team? A lot of CEOs just want to be the show, but some of the best CEOs I’ve met are quiet in a pitch meeting. You know, they’ll say, Oh, that’s a question for the CFO. That’s a question for the chief scientific officer. And there’ll be kind of a quarterback. Rather than doing everything, they’re delivering the ball to different people, letting them do their thing. And I think that really displays a team approach and allowing people to really manage their direct responsibilities. And it takes, you know, to be a CEO, you got to have some level of ego, but you also have to have that discipline to delegate and to listen to others and to let the team do the talking rather than just one person. And then I think investors respond really, really well to that. So, I’d see that as the key track criteria.

Todd Merrill:

So, this year for me, you know, I hate saying AI so many times because everybody’s sick of it, but, you know, I have this new thesis that product is no longer a moat, you know, and then therefore, I think a lot of, as an investor, a lot of the things that I want to look at are the team and the people, and then their ability to go product market fit, get something into the market and get it sold. Do you feel like it’s the same? Well, you know, with bio it’s not really … it’s still about the product, right? You still have to have talented scientific people, but it’s still the same issue, right? It’s still not technical part of the company that matters the most in a lot of cases, right? Or it’s going to be the deal breaker or maker?

Chris Thomajan:

Yeah. And that’s, you know, I think you’re talking about total addressable market and there’s certainly some argument for doing say an orphan drug play. But you know, biotech and pharma companies are looking for the next big thing. You could argue that that’s, you know, do we all really need Ozempic for example, might be better examples of a product market fit. For me though, Todd, I let the VCs pick over the companies. I mean, it’s tough enough finding the winners after the VCs have laid their bets. I don’t have the scientific acumen to be able to look at somebody and say, yeah, this is a great diabetes player, or this is going to be the next best, you know, cancer drug. So, I really rely on others to make those determinations and then I do what I can to keep the trains moving.

Todd Merrill:

Yeah. Let’s talk about VC for a second. VC is kind of, you know, not, I don’t know, something weird happened in the last couple of years of VC where they’re not as active. I don’t know if that’s interest rates or the economy’s weird or like what, you know, what do you think? Where are we with VC right now? Obviously, it’s not going to go away. IPOs are not where they were, right? Maybe. What are your thoughts on where we are in the economic cycle with all this stuff?

Chris Thomajan:

One of my VC friends summed it up beautifully. I think he said, Chris, I’ve got too many capital calls and not enough distributions. And that’s just, you know, the liquidity event is becoming more and more scarce because the IPOs are closed. You would think M&A would take over. It usually does to fill the gap. M&A really hasn’t done it. I think the VCs are so focused on keeping their return portfolios alive that they’re not really looking at new deals. And that’s why it’s been so hard for companies to get access to capital. I’ve been through probably four or five of these cycles. The pendulum always swings too far to the left and then too far to the right. I do think it’s very psychological. So, I always kind of joke, you know, just keep telling people that it’s getting better, even if you don’t think it is…

Todd Merrill:

… ha ha ha, yeah.

Chris Thomajan:

It eventually will open up people think it does. It’s that kind of psychological walk. And I think, you know, there’s some signs we’re coming out of it. There are some deals, you know, more M&A deals happening. VCs are still raising a bunch of money. There’s still a lot of cash out there. So, hopefully it’ll loosen up. And, you know, I think the PE players have stepped in as well. And, you know, they’re sort of moving down market to where traditional VCs may be played and taking some of that business and acquiring companies and re-engineering them. And so I’m optimistic. I just, you know … this has been a long time in the desert for a lot of smaller companies, and you know, I just hope that the pendulum swings back.

Todd Merrill:

I kind of feel like, you know, we deal with a lot of very early-stage companies. It’s easier and harder than it ever has been to start a company. Right? So, you can get started, get a little product going. They’ll maybe even have a little bit of something, and it’s not going to matter. Right? You’re still not going to get funded, you know? And then on the investment side, you know, it’s so scary because you have people that with this cool product and are selling it today, what’s to stop some really smart set of kids from MIT or Georgia Tech or wherever from just knocking out on a weekend and going after you, you know, and it’s like, it’s scary, and, you know, what do you find as an investor? So, I think there’s a lot of paralyzation in the market, if that’s a word. Everybody kind of like doesn’t know what to do right now. I don’t know.

Chris Thomajan:

No, and they’re trying to keep their companies alive. So, they’re really not looking; they’re doing a lot of navel gazing. And I think it’s really important to, Todd, as you’re raising money, you know, that’s a whole science in and of itself, but it’s really important to know what your next inflection points are on which you’re going to raise money. It’s not enough to just go out and raise 5 million bucks or 50 million bucks or whatever. You have to know that that money is going to last you X amount of time, and you have to be ready to raise money. And if you’re mid-study as a biotech, or you’ve just launched a product and you don’t have results, it’s going to be really hard to raise money because the VC is going to want to turn that card over. So, it’s really important to map out that fundraising. And it’s hard to do, but you know, you do it conservatively and quite frankly, in these companies, fundraising never ends. It’s just, you put money in the bank and then you go talk to the next set of investors about what that next inflection point will be and you hope you hit it and deliver and that makes for a successful company. Even then you’re under no guarantee. You’re going to get, you know, you’re going to get funded. A lot of ideas are just ending up on the shelf.

Todd Merrill:

What are you coaching people? Like how long does it take to raise around? Like how many months are you telling people to budget?

Chris Thomajan:

Well, traditionally it’s been six to nine months. I think anything under six is really unrealistic, but you know what I mean?

Todd Merrill:

Especially if it’s Christmas.

Chris Thomajan:

Right. Grow out the two months in the summer and two months around the holidays. Yeah. So, I think it’s much more like nine to 12 months. Again, if you’ve got a good management team, I think you can accelerate that. I mean, you know, a management team that’s known to the investors, you can usually pick up the phone and say, “Hey, you want to participate?” And that’ll go quicker. But you know, you’ve got to kiss a lot of frogs and be ready and willing to do that and have the runway to enable you to do it.

Todd Merrill:

Let me ask you about board meetings. You’ve probably been in more board meetings than you can remember. Boy, that sure is a lot of interesting dynamics going on there in the boardroom. What have you seen in your career that’s like if you were going to be, see something, officer of a new company and you’re going to form a board, or say one of your buddies had a company and said, “Hey, I need some help.” What’s the ideal way to do this? What would your advice be to somebody like that? That’s just thinking about forming a board. You might’ve got your first money in the door that’s professional, and then maybe you got a bunch of friends and family who get to be on the board. You know, how do we think about this? How often do you meet? What are your thoughts on all that?

Chris Thomajan:

Yeah, I’d say on my view and maybe a little bit out there, but 9 out of 10 boards need to be managed away. They don’t add value. They just cause disruption. And so it’s really important, as a CEO, primarily to manage those boards and make sure they do no harm. In terms of finding the right board, certainly the lead investor has the right to sit at the table. Some of the larger investors on the VC side will want a board seat. And, you know, I think you hope you have a rapport. You don’t need to agree on everything. In fact, it’s not necessarily a good thing to agree on everything. You want somebody who will challenge you and be a kind of voice of constructive criticism. But with others, more specialized board members, you know, you really want industry leaders, KOLs, who are going to come in and really help you talk to the right people, message things the correct way. And just make sure that your team is thinking about the right things. A board meeting typically takes, you know, they usually have about four of them a year. And I’ve seen the successful companies, you know, they spend a good month on preparation. They really prepare for it. And if you’ve got a good active board asking good questions, giving good advice, making introductions for you, then that’s a really good meeting and a worthwhile time. And the other thing is boards change. So, as you raise new money, some of the earlier VCs will come off. Certainly, as you get ready to go public, you’re very selective about who you need for the boardroom. So, it’s dynamic and not static in any way.

Todd Merrill:

What does that move look immediately pre-IPO? How do you spiff up the board? You know, who goes and who stays or who do you attract? I mean, what’s the new skillset you’re trying to solve for?

Chris Thomajan:

Well, you’ve got a bunch of committees, right? So, you’ve got compensation committee and nominating committee and audit committee. So, you know, for example, on the audit committee, you need somebody with the requisite knowledge to lead the audit committee for public companies. So, you need to go out and find a well-established CFO, or at least somebody with a really good, strong finance background. Product people, salespeople can be really helpful, marketing people. And, you know, there are some, quite a few professionals out there who do nothing but sit on boards. And there is a, you know, as well sort of a specific profile that companies look for, you know, diversity. You want some women on the board, and more and more you’re seeing, you know, in the old days that was dominated by men smoking cigars inside and that sort of thing. But now it’s a much more diverse, and that’s a good thing because it brings a diversity of opinion.

Todd Merrill:

Does it become more financially focused or more, or is it about the fundraise or the IPO right at the end? Is that what you’re solving for? There, you know, people who can go out and represent your company, or is it more about solving the technical complexities? Like, you have to spin up a lot of interesting systems and infrastructure just, you know, to get everything really, really buttoned up going into that IPO. Is that kind of what it’s about or?

Chris Thomajan:

I don’t know. I think IPO is a transactional administrative milestone, and it’s really important not to take your eyes off the business, which is easy to do when you’re doing road shows and talking to bankers, and auditors, and lawyers. So, I think really kind of keep yourself calm about what an IPO really means. It’s liquidity to achieve your goals. And so what are your goals? Don’t take your eye off the goals. If you take your eyes off the goals, then you’re just going to raise a bunch of money and wind up getting delisted in a year or two cause you didn’t deliver.

Todd Merrill:

Have you seen, you know, people kind of get on this treadmill and they get so heads down focused on the fundraise, they forget about their business. You know, is this kind of a distraction danger?

Chris Thomajan:

Yeah. Well, I’ll give you an example. A great company had a cancer drug that was showing just startling results. And so they decided to go public, and they did so. The problem was, Todd, that they didn’t know why their drug worked. They couldn’t find what are known as biomarkers, which are specific, sort of indicators that this patient will respond well to the drug because we’ve seen it. It’s kind of that section of personalized medicine where each person is a little bit different. So, yeah, you could give the drug to every single cancer patient out there, but that doesn’t make any sense. So, they wound up folding their tent and going home cause they had not baked their story completely. They raised a lot of money, and you know, if you got in and got out, you made a couple of bucks yourself, but for the most part, it was a bit of a disaster.

 Todd Merrill:

They just got distracted and then focused on the wrong stuff.

Chris Thomajan:

Yeah. I mean, maybe they couldn’t figure it out, but in order to keep going and to support the value of the company, they had to do this. And it’s kind of biotech one-on-one. You got to know why your drug’s working and on whom.

Todd Merrill:

The whole biotech thing scares me as an investor. You know, I understand SaaS. I’m a software guy so I understand that whole world. But like put some money in and then we’re going to go do research, and we can’t sell anything to anybody for several years after we’ve gone through rigorous, you know, all kinds of scientific stuff, and then government approvals and yada, yada, yada. And then at the end, there are a lot of potholes that can turn you off, right? Yeah. It takes kind of a special kind of investor, or you know, who are those people kind of, where does that money come from? Is it just kind of very incestuous, and it just goes around in a circle? Or does it like who, where, I guess, how do those companies get funded or started? I guess they come out of university or something, and then what happens?

Chris Thomajan:

Yeah. There’s the old friends, family, and fools round, which is usually about 500,000, a million bucks at seed capital. And then you get to the point where you can raise more serious institutional money. It’s really hard to be an early-stage investor, though because what’s going to happen is if it takes too long, those initial investors are just going to get crushed. I’ve seen that over and over again. I don’t know why I would not as an individual invest in a biotech because the cycle is too long. The funding requirements are too great. And it’s a little bit of a blood sport amongst the VCs to, when you have a new round to crush, you know, some of the other earlier investors, there’s not a ton of loyalty amongst the money group that I’ve seen. So, you know, I think you really have to maybe made some money for somebody prior, and then you go to your friend’s family and you raise that money. But really, if you can avoid that, I think it’s best for all because it’s usually not a great outcome.

Look, it’s the 1 out of 10, you know, they’re doing 10 deals. They’re hoping for one home run and eight break evens and maybe one loss. And so they’re looking for that one home run. And there are companies out there who have done it. And so they take the money, they redo it. You know, the ones who don’t hit on it, you know, they’re not around. And a lot of the VCs are shutting down because they haven’t been able to hit, and they got out over their skis with their portfolios.

Todd Merrill:

Yeah. I mean, it’s just fascinating. That’s the thing. And it might be like, man, there’s no home run like a biotech home run, right? And then you’ve cured cancer. So, everybody feels great about it. And there’s a lot of money and, you know, off we go.

Chris Thomajan:

Right

Todd Merrill:

But man shot in the dark, though, roll the dice. So, what are you looking at? Do you invest in little stuff or what do you think is a good area to look at? Don’t say the word AI because that’s obvious, right? But what are we looking for? What do you think the next kind of thing we should be looking for in terms of interesting sectors on the investment side?

Chris Thomajan:

Care tech sector. And that’s a pretty broad sector, but it’s really a software that’s directed at the healthcare market. So, it’s ways of managing patient data. It’s ways of managing insurers, payment plans, and things like that. And I see a lot of opportunity there. It’s kind of a marriage of healthcare and SAS software. So, I tell like that. Again, I’m more of an investor on the jockey. If the jockey is good, I don’t even really need to understand this story all that well. You know, it’s better if you do obviously, but I think, you know, most of my investing has been as part of my consulting work where they treat me like an employee and I get a little bit of stock options with the cash comp and kind of play a portfolio game there. As I said, investing in the early stage is really … I see more often than not, it results in tiers rather than years.

Todd Merrill:

Do you think health tech is so messed up in lots of different ways? It’s not very efficient in a lot of ways. Maybe it’s a better way to say that. But then why haven’t we fixed those problems, you know, and I’m not sure, like, is there too much inertia, is that, you know, if you had the greatest idea ever to fix the healthcare payments crisis, is there just too much junk in the way to get that in the system? Is it just too big and too inertia, too much inertia? What do you think?

Chris Thomajan:

It’s the fractured nature of it and that software in general. I mean, you look at some of the government IT initiatives that are just so screwed up because you got 20 different systems that don’t talk to each other and you know, you’re supposed to somehow integrate them. And, and it’s just, it’s a quixotic really. So, I think that’s been the big challenge. You’ve seen a lot of hospital roll-ups and consolidation. Each one of them has a different patient management system. They’ve got to integrate the two, mistakes happen, you know, with great opportunity comes great challenge, and that’s kind of what we see, but I think that’s a tractable problem for us and it certainly benefits on that personalized medicine score. If you could somehow get information, let’s just say, you know, you’ve got some sort of cancer, and 10% of the cancer population responds to X drug or X, you know, therapy. If you can identify that person as being one of those 10%, you can target the program of recovery and treatment so well, and that’s kind of the holy grail, I think, for healthcare is you know, each of us are individual, and we’ve got slight differences that really impact how we’re treated. I mean, you look at the neurodegenerative diseases, they’re all kind of the same disease with different names, Parkinson’s, ALS, Alzheimer’s, they may have the same mechanism, just they’re different sorts of patient segments. And so if you can really drill down on those segments, I think you’ve got an opportunity to deliver personalized medicine the way we’ve dreamed about for many years now.

Todd Merrill:

I’ve got one health tech company that I’m involved with. The one thing that surprised me was you know, we’re starting to talk about these genetic markers that you’re talking about, like HER2-positive, whatever, and it’s obviously a breast cancer thing, but it’s also good for other drugs in way other, like totally not cancer-type situations. And to me, that’s kind of fascinating. Do you see a lot of that in the companies that you’re involved with, where they, and you mentioned like that one company, they’re like, “Hey, cure for cancer, but we don’t know why.” You know, if they could identify like these biomarkers, the specific one, you think that was the, you know, kind of what was missing, or is that going to be a requirement going forward?

Chris Thomajan:

Yeah. Once, you know, the clinical trial evolution or journey begins with Phase 1, which is all about dosing, you just make sure you’re not going to kill somebody. And you look for the highest tolerable dose, and you see severe adverse reactions up at these high doses, you’re kind of developing where you want to be. In order to go to Phase 2, you really need what we were talking about. You need to describe who these therapies are targeted at and who will respond well to them. And if you don’t have that, you don’t really have a story. And so you know, I see it as a mad scramble sometimes. I mean, sometimes you start with that. You know right from the get-go go and you’re off and running. But a lot of companies, you know, just haven’t segmented the population yet. They haven’t identified it and you know, that creates questions in investors’ minds and challenges for raising money.

Todd Merrill:

Yeah. Neat. Hey, I found your little snippet. You were talking about CEOs and wines.

Chris Thomajan:

Yeah

Todd Merrill:

Can I read a couple of these out and get you to react to it?

Chris Thomajan:

Yeah. Yeah. No, I had fun doing that. And no wine was drunk during the writing.

Todd Merrill:

Oh yeah. I’m sure. None at all. Okay, yeah. This reminds me of, I don’t know if you’ve ever read Robert Kiyosaki, you know, people are loving or hating, but he had a book called Sales Dogs where there’s like different breeds of sales guys or salespeople, you know, like the Pitbull and the Poodle and the Retriever and a Bloodhound. And, I can’t remember what the other one is, but anyway, so, but different personalities, this is kind of struck. It’s like, oh yeah. Wine. So, I’ll just go through these here. You have five types of wines that describe CEOs. Okay. So, Beaujolais Nouveau. Do you want to react to that one, or if I can just listen off?

Chris Thomajan:

Yeah. You know, that’s a fun one. I think, you know, it’s a first-time entrepreneur, and sometimes, they sort of release their product a little early and kind of young, either youngish wine and inexperienced, but they’re enthusiastic, and you know, often the founders of the companies, and any of these phenotypes can work. I’ve got my own preference for what I like working with, you know, the ones I like working with, but these are all kinds of things that I’ve seen and that they can work successfully.

Todd Merrill:

So, young, new, interesting, fun.

Chris Thomajan:

Yeah

Todd Merrill:

Maybe not so experienced, right?

Chris Thomajan:

Not so experienced. That’s right.

Todd Merrill:

Okay

Chris Thomajan:

They’re fresh.

Todd Merrill:

Okay. Is that you find that, you know, in an investing world, we say there’s no mulligans in this environment. You find that that kind of CEO is maybe overlooked a little bit more in this era or the season that we’re in? Or there’s less of a, you know, inclination to go back somebody like that?

Chris Thomajan:

Yeah, I think so, Todd. I mean, the playbook is to go find somebody who’s been there and done that, not only with the CEOs, but with a CFO. You know, find somebody who’s done a public offering. Investors just like experience and steadiness at the wheel, and so, I think these people can, if they have a good idea and they’re certainly enthusiastic about presenting it, they can be successful, but if they’re not, it’s a race to the bottom, and they’re probably not going to get a second chance as a CFO or CEO.

Todd Merrill:

Okay. Oh, yeah. Okay. Number 2, Rosé, a sales-oriented CEO, competitive, goal-oriented, and maybe some hubris notes.

Chris Thomajan:

Yeah. So, I think we all know these types. They’re very salesy. Maybe a little slick, almost like a politician in a way, but they can be very rah, rah. I think, you know, particularly for sales-oriented organizations, that’s not biotech necessarily. It’s more quota-driven companies. These are wonderful leaders. You know, they find people who are competitive. They’re often leads, you know, college pro athletes, and they can really get excited about their companies. You know, they need somebody, like a good CFO or a strong board, who can apply a little discipline and grounding to their pie-in-the-sky ideas.

Todd Merrill:

Okay. Yeah. Interesting. Yeah. I think a lot of people like to back a competitive sales leader as an organization, but, you know, especially if you have the technical or something that requires a lot of discipline and execution, they need that counterbalance. I don’t know if that’s a CFO or COO, but somebody like that.

Chris Thomajan:

On the team, though, and that’s what we touched on at the outset, is, you know, the person that needs to be smart enough to know that they may be the cheerleader, but for the deep technical knowledge, they turn it over to somebody who really knows what they’re doing.

Todd Merrill:

Yeah

Chris Thomajan:

You know, I’ve seen sales guys who are very proficient and knowledgeable, but not always.

Todd Merrill:

Yeah. Okay. Number 3, and I remember what the fifth Sales Dog was Chihuahua. Chardonnay, the engineering or scientific CEO. Yeah. So, what do you, what are your thoughts? That’s the Chihuahua of the Sales Dogs. You know, you show up in your technical and you kind of like too many details.

Chris Thomajan:

Yeah. So, this kind of combines the Beaujolais Nouveau and the Rosé CEOs, because these people have both the technical chops as well as the grounding. They’re serious. They’ve made money perhaps prior. And I think these are very strong people who also know the, you know, I use the word polymath to describe them, but they understand finance. They understand the whole C-suite and are able to manage it. These are very good CEOs.

Todd Merrill:

And then my favorite, number 4, Cabernet Sauvignon, mature serial CEO.

Chris Thomajan:

That’s right.

Chris Thomajan:

This is, you know, oftentimes, VCs will have entrepreneurs in residence, and that will be the Cabernet Sauvignon CEO. That’s somebody who’s maybe done it three or four times, made a lot of people a lot of money. They’ve got a great network. They’ve got investors waiting to bet on them. These are sort of the princes amongst the CEOs, I think.

Todd Merrill:

So, that’s interesting. You said a lot of these funds will have these people hanging around. Like, what do they do? You know, we’ve always seen an entrepreneur in residence. They just kind of look at deals or what, and then wait for the next kind of cool thing to parachute into or.

Chris Thomajan:

Yeah, I think most of their time is spent looking for new deals, but they’ll also be available as a resource for the VCs. You know, as if there’s a sector expert, they’ll be called on to kind of applying on the due diligence. But mostly, I think they’re looking for new deals and, you know, talking to KOLs in a certain sector, trying to come up with a new company idea, or identify a company.

Todd Merrill:

Or go mentor that Beaujolais, new CEO.

Chris Thomajan:

Yeah, right. Get on the board of, yeah, that’s right.

Todd Merrill:

And then the last one is Port, the dictator, authoritarian CEO.

Chris Thomajan:

Yeah

Todd Merrill:

A little too bold maybe. So, what’s that like?

Chris Thomajan:

Well, these are just people who run roughshod over their teams. They’ve got a very, once they’re open, they’ve got a limited shelf life, because they leave a lot of broken glass, but, you know, they know their stuff. This is more of a personality thing. I think, you know, I don’t know. I wouldn’t want to work for Elon Musk, for example. He might be kind of one of the Port CEOs, one example of them. So, I think, you know, this would not be my top choice. This would be, and there are a lot of them out there, just people who were, you know, always often wrong and never in doubt, and, will let you know what they think at the drop of a hat.

Todd Merrill:

Yeah, early in my career, you know, a lot of… I was with a lot of really aggressive companies. The theory was you had to have exactly one hole on your team, not two, not zero, exactly one. And I think as I’ve grown older, I don’t think that’s true. Right? You don’t have to have … I think you have to have a lot of energy, but nobody has to be a jerk about stuff. I don’t know how you feel about that. Or it’s kind of, maybe I ran into a bunch of Port-type people, but, yeah, I don’t know.

Chris Thomajan:

You’re a key defender, Todd. You, you seek them out, I guess.

Todd Merrill:

I don’t know. Maybe. You know, I don’t think you have to be a jerk.

Chris Thomajan:

I think he can be highly professional. What I think there’s a fine line between disagreeing and challenging, which I think is really positive. You don’t want people to get stuck in their echo chambers, which can happen pretty easily. So, I think you want somebody who’s going to question and push, but you can do it in a nice way, and raise everybody. You know, you want to incentivize the team, but fear works as a management tool. I’ve seen it over and over again, so.

Todd Merrill:

For a minute, and until it doesn’t. And then when it doesn’t, it’s really bad.

Chris Thomajan:

It crumbles. The whole cake crumbles.

Todd Merrill:

Yeah. Unzips. Well, what about what you have seen in terms of senior management teams? You got any wisdom there? Like what works, what doesn’t work? I’ve got this theory that companies have to shift through a couple gears and then, you’re more aggressive and then you’re laying down kind of foundational infrastructure and then you kind of win. And then those are three different speeds that require three different types or multiple different kinds of personalities. And it’s necessary to kind of understand that you need a different team to work on different things. Have you seen that play out or you feel like that’s true or kind of what have you seen kind of through your career?

Chris Thomajan:

Yeah, there are stages in the company, Todd, I’m sure you’ve seen the same thing, but you know, that startup 0 to 5 million in revenue, a bunch of hard chargers, and sometimes, you know, leave a lot of broken glass in their wake, but they’re getting things done, and certainly not lacking for enthusiasm. And then, you know, once you evolve beyond that, and I’m thinking of like a SaaS company, for example, once you get up, say above 5 million in revenue, then, you know, you sometimes need a different team, more disciplined, more process-oriented, systems are really important in a growing company. You can’t be building the plane while you’re flying it, and so that reflects on the systems.

Todd Merrill:

Do you think people have trouble with that? Where they’re like, no, but you know, Sally or Joe was our founding salesperson, and then they just kind of outgrew the job?

Chris Thomajan:

I’ve got a book idea, Todd, and it’s called the founder’s conundrum. And it’s really what the right time to get rid of the founder, and meanwhile, to make the most and best use of that person, because they often own more than 50% of the company in the early days, and they can really be a destructive force. If, you know, they can be really smart about their one area of responsibility, but they don’t understand fundraising. They don’t understand finance. They don’t understand marketing. They can be destructive as all hell. So, I think managing the founder evolution. So, maybe they’re part of the management team initially, but then they go on the board, and then, you know, maybe they just become an advisor. So, there are ways of managing that, that are really important to the success. 

Todd Merrill:

You got to write that book. I’ll, sign up now. We’ll put an Amazon link down below.

Chris Thomajan:

Yeah. I’m just going to ask AI to write it and we’ll see a couple of edits and it will be all set.

Todd Merrill:

You know, I, yeah. I think there’s kind of an interesting thing now that I’m doing with AI, this is really kind of a squirrel. But I think if you sit down and you talk in natural language and record it, or have a conversation with a couple of people and then get a bunch of those conversations, and then you plow that in, I think that could be an interesting way to write books and things that are factual or stories without worrying about AI, just making stuff up whole cloth, but you’re getting the flavor of your stuff out.

Chris Thomajan:

No, I agree. The anecdotes and the actual quotes from real events, I think are fascinating, and that’s, I guess, kind of why the SkyLounge is in existence is, is trying to find those stories…

Todd Merrill:

…oh sure!

Chris Thomajan:

Because they really are what make it interesting behind the scenes.

Todd Merrill:

Well, talking about SkyLounge, it’s all about travel and getting out there in the world, and seeing stuff and making it happen. You know, you got any great SkyLounge stories for us?

Chris Thomajan:

Yeah. I’ve always been into travel, done a lot of it. After my freshman year in college, I decided I would hitchhike from Boston to LA and then up to Seattle. So, I took off with a sign that said Denver right outside of Boston, you know, three weeks later, I made it to Seattle. I stopped along the way, [inaudible 00:51:17 – 00:51:20] San Francisco. I just had a great trip, met people. Those days are gone. I would be appalled if one of my kids were to do that now. It’s just not really a thing you do. So, there’s kind of that special feeling that I maybe got in right on [inaudible- 00:51:36]-[00:51:38] hitchhikers, you never see them anymore. And to do a 5,000 mile trip or whatever the heck I did was really something.

Todd Merrill:

Wow. How’d you get home?

Chris Thomajan:

I met my family out there. They were in Seattle, meeting cousins. So, we all just, you know, hung out for a week, and then I flew home with them.

Todd Merrill:

See ya, we’ll pick you up in Seattle. That’s awesome.

Chris Thomajan:

I know.

Todd Merrill:

Man, that sounds really cool. And you’re right, that’s not an experience you can have anymore. Not in the U.S. anyway. Huh? Well, fun. Well, Chris, it’s been great having you here in the SkyLounge. And, how can people get in touch with you if they want to follow up after this?

Chris Thomajan:

Yeah. So, LinkedIn is probably the best way. Message me if you want. And, you know, I’m part of the TechCXO management team, so we’ve got a contact list for the people page. But yeah, always happy to talk to people, and play it forward a little bit. And, yeah. Thanks for having me, Todd. It’s been fun.

Todd Merrill:

Thanks, Chris.

Chris Thomajan:

All right. Take care.

Todd Merrill:

Bye for now.