Shutting Down Eclode

We set out to cure obesity and make gyms obsolete. Unfortunately we’re at an impasse and I must decide to shut down Eclode.

What Went Wrong

Failure is typically so over-determined that people never learn all the reasons for which they failed.

• Raising seed was harder than I expected. We had ~$1.5M in soft commitments from follow-on investors waiting for us to find a lead. We’re out of funds and have been fundraising full time since February and have yet to gain a lead investor for our seed round.
• My lack of bio background was a serious hurdle. I knew this going in but underestimated the size of the hurdle. We had partners at two potential lead VCs who planned to do our deal and were then turned down by their committees (who never met me) because of our team’s lack of experience with bringing drugs to market.
• I didn’t tell our story well. I’m a highly technical thinker, which explains my previous technical successes, but it did not translate to good fundraising. I default to answering questions with technical detail, listing possibilities, and giving probabilities. This is the right way to solve technical challenges but not the right way to win hearts.
• The wet lab experiment we conducted in early 2019 to validate some of our protein designs produced inconclusive results. The lack of strong data here and lack of funds to repeat the experiment meant that traditional biotech investors remained off limits to us.
• Various potential investors emphasized adding bio experts to the team, IP legal work, and marketing materials (website and deck). A lot of our time and money went into these things, but they were premature. Most of the value provided by the experts could be accessed via quick consulting calls. IP work on a company that’s likely to change product direction is a very expensive waste. Marketing materials are important for consumer companies, not bio research companies. All of this time and money should have been funneled into presentable scientific data on designed proteins with a demonstrated therapeutic effect.
• Challenging market choice: One investor who has taken risks on non-bio founders in the biotech space was close to leading our round and then backed away from our market. Muscle is challenging for a lot of reasons. These therapies are going to be very expensive, which requires insurance reimbursement. It’s hard to get insurance reimbursement for obesity when the alternative with no negative side effects is diet and exercise. Furthermore, obesity clinical trials would be extremely expensive. This leads to the need to treat rare muscle diseases as a route into the market. Investors are burned on the rare muscle disease market. There are tons of failures and no successes. Novartis’ gene therapy for muscle wasting that was just approved doesn’t really even work. We had clear hypotheses and arguments to differentiate from these failures, but it was nevertheless a hurdle.
• We pivoted several times: 1) Gene therapy myostatin inhibition 2) Computational protein design for gene therapy 3) Computational peptide design. 4) Some crazy ideas. These were largely improvements that would still enable our original vision in some long term future, but at the end I felt like we were “just another comp bio company” and the markets we were forced to pursue were much less inspiring than “cure obesity.” Overcoming repeated rejection requires knowing what I’m fighting for.

What Went Right

What we did successfully do was build the beginnings of a drug discovery company with connections to all the right people in academic research, business development, pharma, legal work, etc. We spoke to ~70 investors and some of them really loved us and the work we were doing. The computational models we developed are incredibly cool and put to shame the billions of dollars of AI engineers toiling away on ad optimization problems at FANG. We saw early signs of life in our first wet lab experiments and had a clear path toward improving those outcomes.

Now

The prospect of being lonely but right — dedicating your life to something that no one else believes in — is already hard. The prospect of being lonely and wrong can be unbearable.

• I don’t regret taking on this challenge, but I’m devastated that I’m losing my investors’ money, my cofounder’s visa situation is up in the air, and we didn’t reach threshold to fully pay some of our service providers.
• Huge thanks to all our investors and the mentors I’ve gained along the way.

The Future

The trick is to not let failure destroy your psychology.

• Emerald Cloud Labs’ cellular assay automation coming online in 6–8 months will greatly alleviate the need for shared lab space, the use of low quality CROs, and high initial capital costs to run basic experiments. In 1–3 years hopefully early stage in vitro validation will be as easy as spinning up an instance on AWS. Something like this would make it far easier for me to produce early prototyping and validation in this space.
• The TGF-Beta family of proteins have potential. There are yet unmade multi-billion dollar products using these proteins.
• Eclode’s vision will happen within our lifetimes, the question is simply who and when.
• I never had a Plan B, so I’ll go back to thinking from first principles and figure out what’s next for me.