Kaitek Labs
Date of closure: January 2018
Company Description: Kaitek developed bacterial sensors for food safety. The first product: a rapid detection kit for shellfish toxicity, based on synthetic biology.
Crunchbase profile: crunchbase.com/organization/kaitek-labs
Location: Santiago, Region Metropolitana, Chile
Founders: Emilia Díaz
Number of Employees: 1-10
Founder Twitter: @emiliadiazCL
Reason for failure: Technology couldn't scale properly
Submitted failure story: An autopsy for my first start up
(original post on emiliadiaz.cl/2018/01/22/kaitek-post-mortem)
I steeled myself to write a post mortem article for my company about a year ago, when it was on life support. Life being what it is, things changed mid-article and somehow, the company survived – at least for a while. The article itself went live anyway, both in my personal blog and in my then-savior’s website (SOSV) under the title The talk of shame.
Back then I was already keenly aware of how hard it was to talk about things that once made you who you are in the past tense.
Back then, though, I still had hope and some more coals to burn under my arm. It’s been a year since then and now that I finally sit down to write This, the real post mortem, the autopsy for my dead child, there’s finally a small sense of peace.
It’s over, isn’t it?
Our technology failed to work well enough to sell at scale. That’s the short story. Back in 2012 I dropped out of Engineering School to try and develop a kit for on-site detection of red tide toxicity, the central idea behind Kaitek Labs. The goal was to avoid intoxication and death produced by invisible, odorless and tasteless toxins that accumulate in shellfish worldwide, and that seem to have a knack for appearing in my country, Chile.
My theory was that you could use bacteria (and microorganisms in general) as living sensors for the toxin, modifying them genetically so that they could identify the toxin and then show you their findings, ideally through something as simple as a color change. This was to be packaged in a device that we always imagined to be similar to a pregnancy kit: a dipstick you could put inside a glass of water or crushed mussels, that would show a circle or red or blue to notify the user if the sample was toxic or not.
Now, keep in mind that this was happening in in 2012 – which meant that Chile had about 4 medium biotechnology companies, there was no infrastructure for independent scientific studies (such as co-working labs and the like) and synthetic biology was so new that the first class on the subject had been given only the year previous (attending that class was what made the initial idea spring to life). And also, I was a 21-year old dropout with no previous entrepreneurship experience and most academic research done in computer science rather than biotechnology, struggling to choose my final major between both.
This wasn’t Silicon Valley and this is definitely not a Steve Jobs story and luckily not an Elizabeth Holmes one either, though I clearly felt much closer to the latter than the former.
Still, the amount of support I somehow got at the beginning of the project was overwhelming. I had dropped out so that I could focus on properly fleshing out the project, as well as doing the necessary initial research and drafting a business plan that tied the whole thing together. The dedication paid off, and when I applied for government funding with Chile’s main innovation funding agency (CORFO), I somehow managed to secure a grant for almost $350,000 USD. That secured around 4 years of our development. There was a co-payment which I put together with contest prizes and reinvesting the salary I could assign myself starting the second year of the grant. By year 5, we survived with the timely entrance of SOSV to our cap table when we joined Rebel Bio’s fourth cohort in Cork, Ireland, and got to the end of 2017 by the skin of our teeth with the monetary support of an angel investment from one of our supporters from years back.
The five years of Kaitek were as much of a rollercoaster as everyone tells you your startup life will be. When it began, everything was new and exciting and I had no idea what I was doing. I have a marginally better idea now, but the thrill of novelty has been replaced by the dread of a responsibility that goes beyond what I was able to picture when I began, and that makes the decision of whether to call it quits one of the hardest ones I’ve made so far.
A lot of people talk about founder and CEO burnout and I’ve seen some people saying how it’s even worse when you’re a sole founder and even though I wouldn’t trade my years with Kaitek for anything, I’d very much like to have my health back in instalments.
In five years I managed to get a government grant for R&D in a terribly risk-averse country that also happened to have one of the lowest investments in science in the region. I secured around 45 alliances worldwide to back up our tech development and sell the kit once it was ready. I won entrepreneurship contests worldwide, showcasing Chilean innovation in global stages. I sold a first, unfinished version of the kit the first time I tried during a technical conference – a full suitcase of them. I got us a place in highly prestigious business programs such as Rebel Bio, Singularity University and K-Startup Grand Challenge.
I also managed to lose about half a head of hair, the opportunity to have a degree within a reasonable timeframe, financial security and stability, the ability to not think about work for more than five minutes without feeling guilty, and to estrange myself from a considerable portion of my same-age friends or at least good acquaintances. I also managed to lose my credibility in the biotechnology sphere in my country, and tilt the balance from supporters to detractors way into the latter.
I didn’t manage, however, to deliver on what Kaitek promised.
I believe Kaitek’s tech proposal was good for 2012. But we took too long, and the landscape changed: tech caught up and our window of opportunity closed down. Ours was a brute way of doing biology, trading theory for empiricism and identifying things that worked even if we were not sure why, leaving aside the layers upon layers of theoretical complexity in favor of stuff we didn’t fully understand but that seemed to be working.
Biotech can do better now. As Vijay Pande points out in his brilliant article in Andreessen Horowitz, biology’s technical debt is finally being paid off, and new systems can now be fully understood and created from scratch. Even in 2016 this was just an optimistic future, as I was reminded after reading Melanie Seniors’ exhaustive roundup “Synthetic Biology and the Computerization of Drug Development”, so you can imagine how things looked four years prior.
The biofuel bust was still fresh and yield was not the pebble but the insurmountable rock in synthetic biology’s shoe. There was so much promise but still few champions and fewer victories still. I was brave enough and crazy enough to think one of those could be Kaitek, if we twisted synbio the other way around.
We were a young team in a country penalized with way too much transportation cost and with very limited resources. But now the world has Ginkgo Bioworks and Asimov.io and radical collaborations that bring together all the tech needed, and they are finally looking at the problem we once resurfaced back home, too. If Thermo Fischer can side with Mars and Foldit to solve the problem of aflatoxin, and multiplex assays are now cost-effective even for small labs checking seaside toxicity beyond the USA and Europe, how can we deny that a better kit that leverages all synbio has now will appear soon?
I am shutting Kaitek down knowing that the solution for the problem we obsessed over is almost here, and it happens to be way too different from the one we proposed. And that is okay. This is not a problem that will go unsolved, and that’s one of the few things that gives me a little peace of mind as I make this decision. Even if red tide was not considered interesting enough before, I can say with pride that it is now, in a small measure thanks to how loudly Kaitek managed to blow up.
I gave this startup my all and it gave me so much more back. In the 5 years running this small company, I managed to travel the world reeling in partners and growing my network, lived abroad to partake in entrepreneurship programs in three continents, learnt how a technology can be created and shaped and brought up for the world to use, and how to manage it as a company that aims to be global, sustainable and overall a positive impact in the world.
Of course, it might be more accurate to say that the main things I learnt were how to not run a small company and what road not to follow when developing a technology. My pitfalls were many, and the main ones were people. Managing a team should have been priority zero in my book and yet there was always something else that seemed to be claiming my attention, from research to accounting to grant proposals to meeting prospective partners. I stepped away from the lab thinking I better give my experts the space to work, and work they did, but the vision got lost. There was no sense of urgency in them. I wasn’t there to ask the dumb questions of how this relates to our final objective and is there a way to get there faster, even if it doesn’t look the way you want it to. I thought startups were about dividing and conquering, you do this and I do that and we meet when it is done, and maybe it does work that way when you have a founding team but I was a sole founder. Nobody shares the same level of commitment then – not that the team at Kaitek didn’t work brilliantly and give it their all, because I know they did and I’ll fight anyone that says it wasn’t so – because they are not the ones that incurred in personal debt to pay their salaries, dropped out of a perfectly nice and demanded career, and gave up the semblance of a normal twenty-something life when they said “I’m in”.
So that is, I think, the round-up. Our tech took too long and I wasn’t a good enough CEO to push the team enough to have it done earlier. One could also argue that the tech was doomed from the start, knowing what’s currently in development now and the shifts in the tech and market of the recent past, but hindsight is always 20/20 and with the limited information I had back then, it wasn’t a terrible shot.
I guess one could blame circumstance and the local ecosystem, too. That is always an easy way out. There were people here who straight up considered me a liar, a lazy wannapreneur with an obsession with the spotlight, a kid that had been given way too much money than she deserved. They never told me this to my face – which would have been useful and maybe even allowed me to stop and think whether there was some truth behind their harsh words – but decided instead to relay this to colleagues and mentees and important stakeholders in the country and some were my friends and so their words came back to me. Of course, it hurts to know people speak of you this badly when you considered them allies, but what bothered me most was how unconstructive it was. We are a small, fragile ecosystem still. Backstabbing really won’t help us rise as a group.
But there were, of course, people who supported me. And the overall support I got during my years as Kaitek was truly overwhelming. Even as I write this, the final real-time piece about this story, I have gotten undeserved encouraging words and open invitations for catharsis and great ideas about what comes next and the dream of a brighter future from way too many corners of the world. Some people believed in the project because they saw the technical novelty, or they saw the economic benefit, or the gaping unattended need in the market. Others saw the hardworking team behind it, our relentlessness and ingenuity. Some wanted to see something new emerge. Others saw someone asking for help when they were ready to give it. One way or another, they believed in us and our vision, and they were the cornerstone of what we built and what Kaitek could have been.
I want to apologize to them all.
To Alejandro, who gave us a home without asking any questions, and supports me in all even today.
To Wolf, who was one of the first to open his door to me in 2012, and whom I hope we made proud with how much we grew.
To Matías, who could not bear to see us leave work unfinished to the point he trusted us with his money when nobody else did.
To Joanne, who was not really a mentor to me but an actual living, breathing miracle, and the one person that truly understood everything that went down in this journey.
To Don, who gave us credibility and introduced us to everyone at conferences, knowing being by his side upped our lab cred to no end.
To Andy, who told me that you can’t get the new solutions if you don’t bet on new ideas and proceeded to buy the first batch of our kits to try out, out of sheer curiosity.
To Bill, who never made anything easy and whose voice still nags me to find something else I haven’t learnt yet before I close this chapter for good.
To Ryan, who reminded me that sometimes you need to take a step back and reset your tunnel vision and see what happened while you were drilling the tunnel away.
To Gerardo, my first mentor and my support network and my way too many things in just one person.
To my dad, who allowed me to make the weirdest choice all those years ago and reminds me every day that he’s proud I did so.
To Corfo, and it is weird to thank a whole institution but I do not know which group of people in particular took the chance on me when nobody else did.
To Kaitek, and not just the team that stood by my side when all was sinking (though Carol will forever hold a place in my heart because of that), but to everyone that believed in me enough to put their time and hope in our crazy little endeavor. To Felipe and Cristóbal who were my partners when I needed them; to Valentina and Catalina and Macarena that got to live our last fall and proceeded to bear it with a smile; to Javiera, David, Luis, Catalina, Sonnely, Miguel, Daniela, and all of you who I see now studying and working in our field. It makes me fiercely proud to know that Kaitek was a part of your journey, too.
I am sorry I was not able to fulfill the promises and plans I shared with you for Kaitek. I want to tell you that your help and efforts did not go to waste, even if we didn’t manage to make the working kit that we wanted. We still managed to make this problem a hot topic in Chile. We managed to show that yes, you can build (or at least try to build) technology in far-away developing countries. We made the fishing industry at least consider innovation as a feasible path of growth for the near future. We inspired young scientists and young girls in the whole continent to pursue their vision for the betterment of their countries. We managed to gather and amass so much research and ideas and developments that we might still be able to hand this over to someone that will solve this faster and better.
None of this would have been possible without all of you.
I am sorry I didn’t do better, and I thank you from the bottom of my heart for believing that I could.