so I would love to welcome to Nay Tandon
onto the stage
uh Tanae as the CEO and founder of
othellis a digital Health company that
you're going to be hearing all about YC
first met tenae when he was 17 years old
when he first won YC's first hackathon
now othellis benefits hundreds of
thousands of patients Across the Nation
and the company is worth more than a
billion dollars welcome to Nay
oh
today thank you so much for being here
thanks for having me yeah of course so
let's start with um can you tell us a
little bit about what othellis does yeah
um fellas builds uh remote patient
monitoring and revenue cycle management
tools for Healthcare systems and
Healthcare practices we started
primarily when we went through YC we
were primarily a Diagnostics company so
we built a device for in-home
Diagnostics associated with febrile
neutropenia patients that were on
immunosuppressive medications and that's
really what got our start and it's still
one of the larger Revenue lines in the
in the business okay amazing so um today
how old were you when you started the
company
um I did YC after I was 19 during YC
okay okay all right and so
um I hear a lot of folks saying hey you
have to be like an executive at a
biotech company before you can start you
know a startup what gave you the
confidence you know at 17 19
um to jump out there and start a company
I I think a lot of times being an
executive in a biotech company could
have helped honestly but um I think I
think the
um the reality is is that you know
things like YC exists now and and these
things didn't exist or you know exist in
biotech 10 15 years ago and and also I
mean the internet the fact that you can
like learn almost anything like we
learned how to do our 510k submission
by Googling like and and so you know the
and the first draft of it the FDA could
tell it was by Googling and so um and
and and and so I think this this concept
that you can actually iterate your way
to to get good at something is fairly
new
um and it's very it's definitely new in
biotech and Healthcare
um and so I you know I think something
that's deep in othellis's culture even
today is just very first principle
thinking there's no Market you can't
actually build in
um and if someone tells you you can't
build and build in it they probably run
it currently and they don't want people
to to enter it and that's what it comes
down to right right so tell us how you
got started how did you find your
co-founder how did you find that first
diagnostic concept you wanted to work on
yeah so I um I was a research intern at
the Stanford AI lab and my co-founder
Deepa one of my best friends since since
high school
um we we've competed against each other
in science fairs
um and her uh her research was at the
Stanford multi-modality Imaging lab uh
right across the street uh and she was
also a research intern there through
high school and then afterwards as well
and I think it was really interesting
because one of the data sets that I came
across we trained you know very simple
uh you know CNN on was essentially
classifying red blood cells that had
malaria and versus those that didn't
have malarial parasites in them and I
think the idea was like okay if we can
get high resolution enough images of a
small volume of blood we could probably
do this for you know any type of blood
cell and as a result you could generate
a CBC from a small volume of blood very
very quickly and and that was that was
really it like I think it was it was
clear from a first principle standpoint
that look Pathologists you know used to
be the primary way of doing a cell count
and if you can automate that with with
computer vision and microfluidics you
can you can generate this really
important blood test
um in in a point of care setting or even
in a patient's home okay so what was
your co-founder doing when you tapped
her on the shoulder to begin this thing
how did that conversation go what was
her initial reaction yeah I mean she was
in she was in school as well and I think
she she sort of saw it as like a summer
research project and and that's how I
pitched it as well and then at some
point during the summer it was like well
now we can't go back to school and and
so we
um I I think I think what interested her
about it and also what interested me
about it was it was a really interesting
application of you know two research
fields that we both worked in and we
both loved
um in a very tangible way and and I
think that's it really started as a
research project and then you know once
we noticed it was working we realized it
was important to build a business here
and actually turn this into a product
okay
how how
your family or other people around you
respond to you wanting to drop out of
school yeah I I think it was it was
definitely a battle uh convincing you
know like both of our parents in terms
of hey we're going to take some time off
and similarly it was pitched as a
quarter off and then a year off and then
we're not going back now and so it but
it I think once once it was even for us
like what gave us conviction to leave
was we could see that it was starting to
work like the the you know our very
first bench trial who worked incredible
our first clinical trial you know we
were able to do during YC and also you
know had some really incredible data and
it was clear that there was something
here okay great so at what point in
those early days did you discover YC
decide to apply to YC what was your
thought process there yeah so I mean
growing up in the Bay Area YC was sort
of ever present
um and I you know I went to Startup
School in in 2013 I think and it was
um you know PG and Sam were interviewing
Zuckerberg and then they had Jack Dorsey
come and speak and so it was I mean it
was just part of The Ether here
um and and I think it was so exciting
that you could see I remember I saw
flexport's YC interview on stage
um and like I think Paul Graham made him
do it live in front of everyone uh and
it was just such an exciting exciting
moment and and so we we ended up doing
like the first version of italus was
actually built at YC hacks when it was
purely focused on can we detect a
malaria parasite versus you know just a
binary classifier
um and and so that's how I got
introduced to YC and then we applied
once and it was too early so we got
rejected and then we played the second
time and we got in and then we you know
we did ycee that's great and so what was
the batch like for you what did you
spend your time doing
I think the it's interesting because
it was really really helpful that there
were software companies in our batch
that had week over week growth metrics
and the thing I loved about it is that
if you're a competitive person and you
see someone else's graph going up and
you're sitting here with this you know
shitty Raspberry Pi and the thing isn't
working you're gonna get really mad at
yourself and and I and I think the the
fact that there was this pacing that
there was someone who pays too uh was
was incredible and like Scalia I was in
our batch I still chased that
company and and you know I think I think
the the the beauty of having people that
are operating faster than you is you
will you will try to acclimate to their
Pace
um and that to me was was one of the
most incredible things about YC uh and
so you know the during our batch we
started we set really aggressive
Milestones around you know yes you know
we didn't we wanted to make sure that
the fact that we were a biotech or
digital Health company was not an excuse
for for delivery results which it can
become because you you convince yourself
that there's you so many there's just so
many roads right which there are there
are a lot of roadblocks when you're
working with hardware and you're working
in a lab
and so we before even starting YC we
said we're going to finish a clinical
trial and it is going to have FDA grade
results by the end of the by the end of
these 10 weeks or 12 weeks uh and and I
think using that as our North Star just
forced a level of speed and execution
that wouldn't have been possible
otherwise okay so you're saying that
during the three months at YC you wanted
to finish your clinical trial that means
you must have started long before you
entered YC right no not not quite so we
we
um we definitely we had early versions
of the device we had a you know a pretty
simple partnership with Stanford where
we would get their residual samples and
we'd be able to run uh run tests but the
trial itself came together during the
batch
um we basically you know we emailed
dozens of labs we emailed dozens of
local clinics
um you know and the brand names like I
think Stanford quoted like half a
million dollars to run the trial and
like we had 120k from YC at the time
it's just not going to happen
um and and also I think Stanford's
timeline was like this will happen like
in Q3 2018 which is like it's just
unfathomable when you're thinking about
you know a 10-week timeline
um and so I think it it was a lot of it
was a lot of Outreach
um and we found you know a lab in Mexico
that was actually run by one of
deepika's uh friends and Friends
families from from college and we were
able to very quickly get something set
up we scoped the trial you know patient
selection IRB approved it in like a week
and it was just a lot of pinging like we
had to get people to conform to our
timelines versus working with their
timelines so you started and finished a
clinical study during the three months
yeah and for what it's worth this is you
know a class two diagnostic you know if
you're working with like implantables or
you're working you know with with a drug
it's a very different I'm sure there's
an equivalently ambitious Benchmark but
it's probably not going to be the whole
clinical trial but but for us we thought
this was the right level of heart where
this was a trial that could actually be
done in you know you sit with the device
you run a comparison study against the
lab you can do it in and you do it with
stations you could do it in a couple
days once you have all the necessary
access so were you also interacting with
the FDA or doing anything on the
regulatory end
we so at this point of time we had I
think we had sent we had one or two
pieces of communication just trying to
honestly just understand and clarify the
requirements for for our device and we
identified that look as a Class 2 device
you know there's a pretty clear you know
a predicate in the form of the sysmax
CBC machine and there was some
clarifying questions but that was it
like if you if you message the FDA they
tell you that
we will schedule a pre-submission
meeting in like six months and that's
like it's just not good enough right and
and the reality is that as a startup you
you're a heat seeking missile for a very
specific goal in a very very fast
timeline
um and so we scrounge together what we
could and we knew the trial probably
wouldn't be perfect because we hadn't
done a pre-submission but we we you know
leveraging what they had publicly
available we we scoped and designed that
on our own okay and what went into the
thought process of you know submitting a
pre-sub or not isn't conventional wisdom
to submit a precept no yeah I I it was
for I think pre-subs are like I said a
waste of time when it comes to
um it's it's just the way I really feel
like it's a way for the FDA to buy time
um and I think the the reality is is
that just get your submission in all the
feedback you're going to get will be in
that response because they're legally
obligated to give you a response within
90 days total and you will then during
that time you will be iterating on you
know your trial design your patient
election probably even parts of your
device
and and I think that it's really
important to find wherever you can
overlap timelines in healthcare you have
to take advantage of that so we don't do
pre-subs we submit the thing we know
we're going to get you know lengthy
additional information requests and then
we run with it we did the same thing at
Envision because uh with a pre-sub it's
90 days before they even schedule a
meeting with you and then it's more time
after that and the feedback they give
you was in binding so
510k thing is faster so I prefer it just
going straight for the kill that's the
other thing the precept feedback isn't
even binding so like they can just tell
you something and then like completely
reverse it like six months later and
I've had I've had companies go through
that where they do the preset they say
oh we kind of like this trial design and
then later they say just kidding so
um and so if so you had all the clinical
trial data you submitted the 5 to 10K
what was it like kind of after you left
YC those first initial years and what
caused the pivot as well yeah I mean I I
think what's interesting is that the
I the the years immediately following YC
though it's like a year year and a half
two year time period was was really
challenging and it was
um there were like moments of serious
despair just because I remember we got
our first additional information request
back
and it was it was pretty much like
getting an F on a report card like it
was just it was it was 40 pages or like
there were 40 additional information
requests most of them were like redo
this redo this redo this and we had like
a year year and a half worth of burn
left
um and so it wasn't we were not in the
most comfortable position
and and I think the
um the thing that kept us going was you
know when I first got that that
additional information request back from
the FDA it was very much so like okay
like they're not going to clear us
that's kind of what it felt like and
then when you broke down the information
and put it on a to-do list I remember
like our CTO dhruv and I we stayed up
till three right after we got the
response and we just made a you know 30
page Google doc with a to-do list of
what are the things the FDA wants from
us and honestly the morning it felt a
lot more attainable and so then we
sprinted for six months and you know in
2018 we were in summer 16 was our YC
batch in 2018 we finally got the
clearance uh and and so I think the two
years in between doing YC and getting
the clearance
something that was really important was
we kept the pace of YC alive because
there were times where it felt like
especially in the six months after it
felt like we were going slower and I
couldn't quite fathom why and I think
part of it was that the batch didn't
really exist in in like and I still saw
you know other other companies but it
wasn't like this like mad rush to to go
um you know to go deliver results and
make your group partner happy and you
know beat your other you know fellow
companies
um and and so I think we figured out
ways to replicate that you know I
started doing check-ins with my group
partner
um again and uh um and and that that
sort of helped reset the tempo uh and
then I think the next thing you asked
about is how the sort of product
transformed and evolved so I mean today
at all's you know the the initial device
is it's a segment right it's it's a it's
a part of our Revenue we after clearance
we in the first six months we scaled to
about one two million in ARR and it was
uh it was great like we had patients
that really needed the device we had
clinicians that were relying on the
system every week for for their for
their patients on clozapine and their
patients on immunosuppressive
medications and we quickly quickly
realized that like look we can scale
this business probably to tens of
millions of ARR over the next four or
five years but if we want to build a
business that is you know doing hundreds
of millions or billions in run rate we
need to expand what we offer these these
these it's almost like the same way
fintechs expands share of wallet we
realized we needed to expand share of
patient in a clinic and what we did is
that we introduced on on the foundations
of that first device we introduced
hypertensive monitoring programs
medication endurance programs uh we you
know started expanding the revenue cycle
in the practice and when you go into a
healthcare clinic they need so many
tools and everything is broken and and I
think the biggest realization was that
once you have the trust of the doctor
and the trust of the patient you can be
that that technology provider that
technology partner that actually builds
so much more than just that first device
for them uh and that's that's really how
I wouldn't even call it a pivot
necessarily because we just added
product lines and you know our our acvs
went from ten thousand dollars per
Clinic to now hundreds of thousands of
dollars per Clinic uh and and that's
that's kind of the the equation we had
in our mind so so clearly that move was
fruitful going from tens of thousands to
a hundred thousand hundreds of thousands
of dollars worth of Revenue per clinic
at the time that you wanted to expand
how did your existing investors react
what was that conversation like with
them
honestly if it wasn't a conversation I I
think the the our approach was look we
have delivered on the initial like you
you I think you earned the right to both
with your customers and your investors
and honestly your employees you earned
the right to to build more as you
deliver customer happiness on on the
first pieces and for us there would have
been you know no remote patient
monitoring Suite or revenue cycle Suite
that is now like that are now the core
Revenue drivers for the business without
without the first device and so I think
there was a lot of trust you know we got
the FDA clearance in in record time
um there was trust that we could execute
and I think the like roll off from from
Sequoia says is you know is that the Tam
is Tam is like a fake number there's no
such thing as a total addressable Market
Tam is just a measure of the ambition of
the founding team that's it and I really
I really believe that which is if you if
you execute again and again and again
you unlock more Tam and if your
customers need you and you continue to
deliver products that help them you will
grow as a business
okay absolutely so you mentioned
employees a little bit and a lot of
early stage entrepreneurs or people who
have been thinking about starting
companies wonder how they're going to
grow their initial team or find the
right people to get the company off the
ground do you have any words of advice
for them
yeah definitely I think I think the our
initial team I mean you know Drew who
joined our founding team is is CTO
um just this like hacker mindset right
like the the two of us could work on
problems for Endless amounts of time
deep gut you know innately a hacker
mindset and I think there's a lot of
push that people get from investors or
people get from you know even just
conventional wisdom that they need to
hire the you know the the biopharma exec
or the med device exec that that went
and did XYZ it's a very different skill
set like and and one example that I use
is even in like even in sales right A
lot of times you'll hear from folks like
you need to go hire the person that's
selling like four million dollars worth
of product a year and I remember we
hired someone from like Salesforce right
that was like selling tons of product
every year and we're like this guy's
going to be an awesome awesome sales
leader Etc the reality is like
Salesforce is like kind of like a tax on
startups at this point of time right
like the money's going to show up
whether that guy was selling or not it's
like it's like hiring someone from the
IRS like it doesn't really matter
because like the money will show up like
people need will always be buying
Salesforce you our most successful sales
reps and this is a slight deviation from
what you initially asked but our most
successful sales reps for example like
one of them was a sold like was it
door-to-door pesticide salesman like
like a really hard product to sell like
that guy was grinding in order to sell
one you know one person and our our
belief has always you know been slopes
versus intercepts which is find people
that will work really hard to learn the
underlying thing
um and and and don't you know haven't
had to Coast uh at any point of time
because like again like there's products
that just sell themselves and they're
not going to be good salespeople and I
think it's similar on engineering the
same philosophy like honestly people
from the Googles of the world just
haven't been great fits at a thousand
and I think you know we've chatted with
other startups this is often the case
um unless you pick from a very specific
team that actually has a fast shipping
Cadence yeah so that's so you think it's
the the fast shipping Cadence that makes
all the difference yeah any anyone
that's had to fight for survival is
going to be good and if they've lasted
long enough and anyone that's had to
deliver results on a you know on a
weekly or monthly time Horizon will be
good and and anyone that you know
doesn't have to do that if their job
would exist if if you know they were
working at 25 it's not going to be a
good fit early on at a startup okay okay
fantastic today can you give us a
snapshot of where othellis is today
Revenue how much money have you raised
dear investors that sort of thing and
maybe what your future plans are for the
company yeah I think I think so you know
the high level we want to end the year
at a 50 million run rate we are you know
in total or 300 people uh you know 150
in India 120-ish here and then like we
have 30 that are kind of remote spread
around the world
um the uh
you know today our product is is
essential to the clinics then and
healthcare providers that we work with
and I think for me it's very clear that
there's so much to build for these
customers which is why we're all here
today uh whether that's in devices
whether that's you know in software
whether that's in other forms of tooling
whether that's bringing care directly to
patients and cutting out middlemen
wherever you can
um I think I think for a Solace really
our end goal is if you look at our
product Pipeline and you look at you
know what we're shipping week over week
it's very clearly just like what is it
that makes the doctor's life 10 easier
right like what is it that they
currently do manually that we can use
software to automate for them or on the
diagnostic side what is another test
that we can launch that eliminates uh
you know a two-hour drive back and forth
for a patient to go into clinic and then
you know come back home and then get
results two weeks later uh and so like
honestly our product Evolution is
somewhat boring I'd say for the next
like two years with the exception of
probably like one or two areas where
we're starting to apply things like
large language models and it's like very
exciting and you can suddenly do things
that we weren't able to do a year ago
um so I I I'd say like just more
infrastructural back-end you know admin
tools for healthcare providers and you
know in-home Diagnostics and sensors for
patients that's fantastic so today in
the audience we have a lot of
entrepreneurs a couple of years into
their journey and some folks who are
just on the fence about whether or not
to take this leap of faith and start a
company any advice for budding
entrepreneurs
yeah I think I think the there's the
um like the Sam Altman saying right of
like uh like the real risk is not taking
a risk and and I think it's super true
and it's it it will be very very hard
like if you're if you're gonna take the
jump be ready for like 10 years of pain
um and and and but but with with pieces
of fun and you know just like really
exciting moments uh that that make it
all worth it and and so I think the the
other thing that I tell people is like
it the only things that are really worth
doing are the ones that you can compound
in for a long time and and so pick
problem spaces that you're genuinely
excited about and and then just you know
I think the score takes care of itself
after that like if you if you work hard
every day nothing else really matters
thank you today for sharing your journey
with us incredible thank you very much
[Applause]