Yilan Shi
Yilan Shi, MS, is the CEO and co-founder of the company Simply Independent Inc., a venture-backed software startup operating out of the Launch Factory incubator in San Diego. She received her Bachelor’s degree in Molecular and Cellular Biology from UCLA and Master’s degree in Biotechnology from Georgetown University. Yilan originally planned to earn a PhD at the University of California San Diego, but decided to leave early with a Master’s degree in Biomedical Sciences to kick start her career in tech entrepreneurship. She also interned at the venture capital firm University Growth Fund before going on to start her new company. At Simply Independent, Yilan is passionate about serving patients, senior citizens and persons with disabilities by providing digital health coaching.
Can you describe your academic and professional background? What path led you to pursue this field?
I was a PhD student in the lab of Dr. Eugene Yeo at UCSD, studying RNA-imaging technologies and applications of CRISPR-Cas systems. Prior to starting the PhD, I was a product development scientist at Bio-Rad and worked with hardware and engineering teams a lot. About a year before founding Simply Independent Inc., I interned at a venture capital firm called the University Growth Fund, which has over $50M assets under management and invests check sizes of up to $1M in companies like 23andMe, Lyft, Pinterest, as well as local companies in digital health and biotech. I would say the most useful preparation for my current role as CEO are the learnings and experiences I received from working at the University Growth Fund. I was trained directly by the partners of the fund, and worked in tight-knit student groups conducting due diligence and deal sourcing. I did this for about 30 hours per week for over a year before founding my own startup. I’d been interested in startups since college, but always felt like I needed more degrees or experience. Then something happened that really accelerated my decision to jump into entrepreneurship full-time.
In 2019, I was diagnosed with autoimmune arthritis, and it was definitely the “trigger point” at which I decided to pursue tech entrepreneurship full-time. I originally wanted to finish my PhD, maybe get an MBA and then start a company because I felt that would make me more qualified. However, my physicians told me I have about 10 good years left in terms of health span, so it’ll be pretty hard to pursue both the PhD and then a startup (which takes about 3-5 years to exit in the best scenarios). Therefore, I had a really hard decision to make at the time – stay in the PhD and finish it, or leave and start a company now.
How did you find this particular position, and what was the hiring process like? Is there a typical structure for this in your field?
In late 2019, I left the PhD program and immediately started raising venture capital funding for a digital health startup. So there was no “hiring process” in this case because nobody really “hires” for a CEO (or a CTO, or COO for that matter). You become CEO when either (1) You get paying customers, and/or (2) You raise a meaningful amount of capital from investors to sustain a company. It’s actually the hardest “job” because nobody tells you what investors are looking for, or what customers are willing to pay for. But you’ll definitely know if someone likes your company and founding team.
It’s kind of like dating – nobody really “hires” for a significant other, and most people don’t tell you (directly) what they want in a relationship (that would make for some pretty awkward first dates!). But you definitely will know if they value you enough to continue the engagement – same thing with raising money for a startup. So, I had to figure out how to convince early-stage investors to take a chance on our start-up idea and our founder team. In addition, I am not a coder nor do I have an MBA, so it was a tall order but it worked out in the end. As for how I discovered my current investors, I raised an equity round from an incubator called Launch Factory in San Diego. They are both the investor and a business incubator that provides value-add services like mentorship, warm introductions to industry experts, and help with staffing. The structure for this particular incubator/investor is that they invest in teams of 2 founders, and the criteria by which they judge you are the thoroughness of your business model, your go-to-market strategy, and your understanding of the customer pain points. It was a great experience by itself, and my co-founder and I learned a lot. The entire investment process took about 8 weeks before a decision was made.
Can you tell us about your current responsibilities? What is a typical day or week like in your role?
I make sure there’s money in our business bank account. That’s my number one responsibility! To break it down more, I also set the strategic long-term vision, as well as assist with tactical planning, while my co-founder, Dr. Jennifer Kan, handles a lot more of the day-to-day planning and internal management. Aside from maintaining a healthy cash balance and managing fundraising efforts, I lead customer acquisition and am usually the point-contact person for anything external-facing. For example, our startup is now looking for an MD Advisor with experience in geriatrics. I am responsible for setting the criteria for what we’re looking for in terms of experience, and then engaging with them. Also external partnerships, such as those with health organizations, insurance companies, or even other startups also fall into my umbrella of responsibilities. As we’re starting to build our first product, defining high-level product requirements is also my job. I do very little management or “corporate stuff.” My style has always been to focus on what matters (customers and product), and not get tangled in minutia like logo design and middle-management!
In a typical week, I stop by my incubator about 3 times every week to have face time with my main investor and hold meetings there (via video, because the background looks a lot better at the office than in my living room). I conduct most meetings in the mornings – they could be with customers, prospective partners, or our business vendors. I never thought I would need to talk so much in this role, but I learned that a lot of startup work is building relationships, negotiation, and “hustle” to get the ball rolling on multiple projects. Since COVID-19 restricted a lot of in-person events, most of my customer interaction is virtual as well. I also video-conference, chat, or call my co-founder almost daily, and with our newly hired interns about 1x a week. Afternoons and evenings are a lot of individual work on 1 specific deliverable, or focused on outreach and digital marketing.
What do you enjoy about your current job and work environment?
The creativity of building something from scratch. It can be overwhelming at first, not having any direction, with only the expectation that you lead your company to a successful exit in 3-5 years (usually via acquisition – though if you make it big, an IPO or direct listing is possible too). In that vein, being a tech CEO is like being a PhD student. The expectation for a PhD student is that you discover something novel and meaningful, useful to the scientific community and maybe even for patients and society beyond within a 4-6 year time frame. But how you get there is 100% your responsibility. Different labs obviously vary in this aspect – independence vs. monitored guidance – but entrepreneurship leans towards independence heavily. My incubator does provide mentorship, but since my co-founder and I own the majority of common stock, we ultimately have the final decision. That’s what I enjoy most about entrepreneurship. You get to be an equity-owner rather than a wage-earner. It’s liberating and a fun challenge at the same time.
What are some of the challenging aspects of your job? Is there anything you wish you had known about your job or industry before joining?
Executing well is hard. What I mean is that most people can come up with a great idea – they may even have a patent approved for that idea. But CXO’s (CEO’s, CTO, COO…etc) do not get rewarded for great ideas. Entrepreneurs get rewarded for executing and building a product around that idea. I think that’s almost the opposite of science. In a PhD, we get rewarded with papers and NIH grants for having original ideas (as scientists should!). A proof of principle experiment that outlines a mechanism and a small animal study is usually sufficient to publish and maybe even graduate. However, in the start-up world, nobody really cares about your ideas (especially investors!). Your technology, product, or service needs to work flawlessly every single time, for every single customer. So the execution of an idea is the most important thing, and (surprise!) is really hard to do well. Secondly, customers are the most important thing in a company, not technology. This was a huge shocker because coming from a science-heavy background, I always thought technology trumped everything else. I was wrong. If your product or tech is really great, that’s wonderful, but it is not the key factor to whether your company succeeds. Does your product solve the right pain point? Will your customers buy it? That’s the billion dollar question, and just as hard to get right.
Do you have any professional plans for the future? What are some future career paths that could open up for someone in your position, 5-10 years down the road?
I’d like to open my own venture capital firm, focused on supporting entrepreneurs from alternative backgrounds, like students (or dropouts haha!), women, minorities and immigrants. I think I’ve been incredibly lucky to have met and been trained by amazing mentors, starting from Dr. Eugene Yeo and the UCSD BMS program, to the partners and colleagues at the University Growth Fund, to my current startup incubator and investor, Launch Factory. But maybe someone else out there also has the drive and dream, but didn’t get the same opportunities. I want to level the playing field for all aspiring entrepreneurs who weren’t as lucky as I was, and access to capital is a big way to do that.
What’s changing in your industry? Are there any future trends we should be aware of?
Entrepreneurs coming from PhD backgrounds. I am seeing more and more non-technical founders who had an entirely different career prior to becoming a startup founder. By non-technical, I don’t mean someone who doesn’t understand tech product development, or is completely uneducated. It’s just that they cannot physically code the software themselves line-by-line. I fall into that category. But I think with smart planning and lots of determination, non-technical founders can still thrive in the tech industry.
What activities, internships, or organizations would you recommend someone get involved with to help them break into this field?
For breaking into either Venture capital or entrepreneurship: Get an internship at a Venture capital or private equity firm ASAP, and make sure you actually get to invest in real companies and sit in on investment staff meetings. It’s the best training you can get to understand what makes a great tech startup, because you’re literally evaluating dozens of companies that are already successful! What better way to learn than straight from the source? I generally avoid coursework, certificates, or even MBA’s (unless your MBA program has a meaningful alumni brand – like Berkeley’s Haas or Stanford Business School, or Rady’s at UCSD if you plan to stay in the southern CA region), because no lecture, book, or degree can replicate learning the ropes in real life. Working at a venture capital firm is akin to being an “Apprentice” at a shop – and not unlike going to graduate school. Your training and experience is highly dependent on the Mentor you follow, so be sure to select notable mentors who also have your best interests in mind! I have a YouTube channel, “Startups and Sushi,” where I talk about how to break into Venture capital/high finance and entrepreneurship as a student. You can check out more “informational tutorials” on venture capital and entrepreneurship here: https://www.youtube.com/channel/UC8WlN6pSssyjfFXy7iIpUoA?view_as=subscriber.
In summary, breaking into VC is a bit more structured (but also higher barrier to entry) than starting your own company. The common ways I see people break into VC is (1) you have a PhD or deep scientific expertise in a hot domain (biotech, pharma, and AI domain expertise are very popular), (2) You have a brand name undergraduate degree (VC firms love the Ivy’s and Stanford somehow), and/or (3) you come in with a super strong finance or management consulting background – think top 4 i-Banks or McKinsey on your resume. I only had the former (domain expertise in gene therapy/CRISPR), so I leveraged that to get into VC. I also really prepared for my 2 interviews and case study writeup for the University Growth Fund internship.
Another plan to break into startups: Aside from working at an investment firm to get second-hand entrepreneurship experience, you can just build a product and start selling it to customers without forming a company. It’s a low-risk way to “test the waters” and see if your technology gains traction. To fund your project, you can apply to various incubators and grants, some of which are specifically geared towards student-entrepreneurs! For example, Dorm Room Fund and the Thiel Fellowship are great examples, although the latter is for college undergraduates and super competitive (because they don’t take equity from your company, so it’s just free capital). You can also crowd-fund to support your product development efforts, which is another form of non-dilutive fundraising. Usually with good marketing you can raise up to $100K on platforms like Kickstarter and Indiegogo, minus the platform and transaction fees (around 10% total). Alternatively, SBIR and STTR grants are government sources of non-dilutive funding for startups, and are popular especially for biotech, health tech, and hardware. But you usually need to have a product in market, and sometimes some sort of user data (ie: health data showing improved medication compliance after using your app). You can do all of this, and basically be an entrepreneur part-time while simultaneously pursuing your PhD/Masters/undergraduate degree. This is the most low-risk way to break into entrepreneurship.
The most counter-intuitive thing about breaking into entrepreneurship is that there’s no internship, class, or degree that can prepare you. The only sure-fire evidence you are ready is when your tech product has traction and customers are paying. Which, ironically, is after you’ve already “broken into” the field. 😊
Is it common for people in your field to have a scientific/academic background (i.e. have PhDs)? Can you think of any advantages or disadvantages someone with a PhD might experience while pursuing or working in your field?
Yes absolutely. My co-founder is a PhD alumnus from Cambridge and did her post-doc at Cal-tech. Last year another startup I know of had 2 PhD Founders as well. I see more and more people with biomedical PhD’s cross over to tech entrepreneurship. I don’t know why exactly– could be coincidence, but here are my theories: (1) The due diligence needed at the beginning of building a company (the research process to figure out customer pain point and design the right solution) is very similar to the scientific process we use in our PhD’s, and (2) PhD’s are already used to really hard work, so the time and salary sacrifices come naturally to us compared to non-PhD’s. We definitely know what grinding looks like, so there’s no “transition period” once you go full entrepreneur. In fact, I actually work less hours now as a tech CEO than as a PhD student (don’t tell my investors that!).
Your PhD prepares you for more jobs than you imagined. So leverage that. I didn’t even finish my PhD, and I got a job in VC and now run a digital health tech company.
Do you have any final words of advice for those navigating these career questions? Is there anything you would have done differently given what you know now?
Start early. You don’t need an MBA to be a CEO, but being early-career really helps. I know this is kind of an uncomfortable truth, but it’s not just about age. Investors are biased towards younger founders because these founders usually don’t have family, mortgage, or entrenched ways of thinking. VC firms are also biased towards hiring younger Associates because it’s always easier to program a blank canvas than rewrite over existing code. So being a blank slate – in both entrepreneurship and venture capital – is a plus, surprisingly. I didn’t know this before. I assumed experience and degrees trump everything else (because that’s what I was taught). In that vein, being an entrepreneur is like being an athlete. Another thought on being a female founder - I don’t believe (and have been lucky to have never experienced) investor bias against female entrepreneurs, and I also believe you can be wildly successful with any of the above limitations. However, investors do expect female founders to work and execute at the SAME caliber as male founders, regardless of family or personal obligations. So keep that in mind when starting your company. You’re also not competing against your PhD classmates, your Linkedin buddies, or high school Facebook friends once you become a tech founder. You’re competing with an international cadre of talent and ambition. Raising money from investors requires conveying that your company and your team are an asset, not a liability that needs hand-holding.
Lastly, it can be super overwhelming to think of all the things that can go wrong with your startup, and beat yourself up for not being __(you fill in the blanks)__ enough (smart enough, technical enough, experienced enough, pedigreed enough…). But building a tech company does not require a specific IQ range. It does require common sense and tenacity over academic smarts. So if you think you’re not prepared enough or smart enough to start a tech company, you’re probably wrong! 😊 I was.
Some definitions:
● Non-dilutive fundraising: money to build your startup that does not require selling shares of your company (aka giving away equity). It can come in the form of business competition prizes, SBIR and STTR government grants, crowdfunding campaigns, or your high-net-worth second cousin.
● Equity round, or equity fundraising: A fundraising round where the co-founders sell shares of the company in exchange for capital. Not as attractive as non-dilutive capital for founders because your own equity gets diluted.
● IPO: initial public offering. Assisted by underwriters, an IPO is when a company sells stock to investors in the public market, as opposed to raising capital in exchange for selling shares in the private markets (which is the space that venture capital, private equity, and angel investors operate in).
● Direct listing: a liquidity event (an event where all outstanding or remaining shares of your company become available to the public) where underwriting is not involved. Pricing can be more variable, but there’s less regulatory hurdles in this scenario than in an IPO. This is still the wild, wild west of finance, but generally it’s best reserved for super successful companies (ie: Spotify) that are household names.
● Managing partner: the fund manager, usually responsible for both raising outside capital from LP’s and deploying capital to startups. He/she/them may also be responsible for sourcing startups to invest in, though that is commonly delegated to Associates and Senior Associates who do more “on-the-ground” startup sourcing and first-pass due diligence. The managing partner(s) of a VC fund are paid in the cash and carry structure. Cash refers to management fees, amounting to anywhere between 0%-2% of the entire fund at any time. Carry refers to the percentage of profits that go back to the VC fund. This is the “cut” that managing partners take from their LP’s (limited partners, or outside investors who entrust all investment decisions upon the fund manager). Carry rates are usually 20%, but can vary between 10%-20% for different sized funds.
