Phil Hayes-St Clair

Phil Hayes-St Clair: I’m Phil Hayes-St Clair, the CEO and co-founder at Drop Bio. Drop Bio is a digital health company focused on chronic inflammation. We have a mission to accelerate the world’s transition to personalized health, which means that we’re trying to put really useful data in the hands of consumers and clinicians and researchers to help allow people to understand more about their health, and really take care of themselves more effectively than what they’ve done so far.

Adam Spencer: Why did you decide to start a company focusing on inflammation? Was there a personal motivation there?

Phil Hayes-St Clair: Drop was started thanks to some research that was done here in Australia, which related to what you could see in whole blood. And whole blood is important because when we go and have blood tests done from our doctors, the way that a blood sample is split is that it looks at a particular component of that blood, and not the whole component, and it was discovered that a large number of the really important markers that help your body govern its immunity get discarded when those blood tests are done.

Phil Hayes-St Clair: And so we end up looking at a small cross section of what is actually going on in ourselves when we have a blood test. It’s still accurate, it still tells a good story, but when you are trying to look at those markers that tell the underlying stories, so things that are maybe a million times lower in concentration than the markers being looked at by blood tests of your doctor, those ones aren’t able to be seen easily, and the technology that we use helps us do that.

Phil Hayes-St Clair: And so inflammation is important, chronic inflammation, or systemic chronic inflammation is important because it plays a fundamental role in the early warning of chronic disease, and what gets us out of bed every morning is the idea of unlocking the body’s natural early warning system, because we would like to be able to help people understand that if they do have a family history of chronic disease of any kind, whether it be cancers or arthritis or diabetes, or any of these other conditions, that we would be able to give them the most advanced warning possible so that they could get treatment and support so that they don’t actually have to face into the more sinister complications that come with these conditions.

Phil Hayes-St Clair: And the literature on this has been really clear for the last three or four decades, that if you can detect and measure and track and understand what these markers are telling you, then great treatments can be created, and for the most part we can stop people from having to suffer really sad and lonely and often very painful deaths.

Adam Spencer: When would you say you first got involved in this thing that we describe as the startup ecosystem in Australia?

Phil Hayes-St Clair: I think at the age of seven.

Adam Spencer: Okay, wow.

Phil Hayes-St Clair: So my first entrepreneurial endeavor, I suppose, was as a bored seven or eight year old collecting all of my friends in the neighborhood, ransacking our parents garden sheds, taking out all the tools and running around the neighborhood telling people that for $20, which in mid-1980s money was a lot of money for a kid, we would “fix your garden.” And I’m sure we left the gardens in worth state than what it was, but we were able to get people to pay us to do a service, and then we split the money amongst the little gang that we had running around the neighborhood.

Phil Hayes-St Clair: I’m pretty sure that we lost more tools than we actually had in the first place, but the reality was I found it easy to get people to do things they wouldn’t ordinarily do, reward them for that effort, and I’ve been doing that ever since. So just a really interesting thing that I’ve found I had a knack for, and obviously you learn every time you do it, time and time again, so company building’s a bit of a craft, and if you’re fortunate enough to do this time and time again, hopefully you get better at it.

Adam Spencer: Why do you keep doing it? Because slog,

Phil Hayes-St Clair: I think I’m a square peg in a round hole. So trying to fit in and be part of a larger team was born into me when I was in the military, when I enlisted straight out of school. I wasn’t able to continue that career because of an eye condition, and when I came out of it, trying to find that place to belong was really tough. I wasn’t a lawyer, I wasn’t a doctor, wasn’t an accountant, wasn’t a finance guy, and trying to go to these large organizations didn’t really seem to work for me, yet I kept on seeing these opportunities to improve the status quo. And ultimately a mentor of mindset said, “I think you should start, instead of doing intrapreneurship, building things and changing from the inside, maybe you should go out and start doing it yourself.”

Phil Hayes-St Clair: And so I did that, and started a company, blew up that company, learned a bucket load of stuff, and just realized that the amount that you can learn and achieve by starting something new, or improving something that is already attempted outside of an organization, is something that is intoxicating.

Phil Hayes-St Clair: And anything it takes practice, and sometimes you do quite well, and sometimes you don’t do very well, but I couldn’t really find inside really large businesses and large organizations the escalator for progress. I could try and conform, but I just found that it really suffocated me trying to do that. So I guess I just found a different path, which has been a lot more tumultuous than I think most paths would be, and every founder will tell you that, but it allows you to learn and experiment and create in a vastly different way.

Phil Hayes-St Clair: And I think for the most part, Reed Hoffman captures it well in his book The Alliance, where he talks about the idea of the career escalator being broken, it’s not like it used to be. We don’t all retire like our parents did, or would like to, at age 50, 55 60, we’ve got to forge different paths. Industries that were built on that classic retirement path are not really there much anymore, some of them still persevere, and the internet and information has allowed us to be curious and find out things and try and put new plans into place to create the future.

Phil Hayes-St Clair: So I find that just a really good investment of time, and I try and get people who I teach at the University of New South Wales in the MBA program, I try to get them to think differently about the opportunities they’ve got with the skills they’ve got, and I find that just a massively interesting and invigorating investment of time

 point did you start to see the community really start to gain momentum?

Phil Hayes-St Clair: I think the community was making really good strides well before I even came into it, especially here in Sydney. I think that people like Bill Bartee at Blackbird and of CSIRO did such an amazing job, and it was people like him, but he comes to mind first and foremost, being able to bring together collections of people to try and invest more effectively together, really pay forward all the information they’d accumulated to help founders be more successful, not look at founders as being a product from an investment point of view, but actually trying to find out, how do we skill these people up so that they can become successful in their own right?

Phil Hayes-St Clair: That started the establishment of Blackbird, Nikki and the team there, it’s one example about that started. And then after that there were others that just came either into the market or decided, we can actually do some really fantastic work here. And it just attracted, it had a natural magnetism for people to come and be involved, and the specter of building your own company became mainstream over the last decade, unlike it had ever been before in Australia. It was very culturally accepted to do this in the US, has been for generations, very rugged entrepreneurial approach to life in general. Australia hasn’t had that, but the last 10, 15 years has seen that really take off. And I really only think we’re 10% of the way.

Phil Hayes-St Clair: The ability for us to catch up is immense, and we always punch above our weight as Australians in just about everything we do, but I think we are starting to create a lot more with a lot less, and then finding our ways into much more interesting markets than the traditional startup business here that moved to the US. There are so many other markets of across the world that are just fascinating to be part of, it takes a different approach, but I think we’re, as a country, doing some amazing stuff.

 deciding to bring people together, deciding to help move things along and make it easier for startups and make it easier for people to invest in startups, what do you think was the thinking behind that? Why was that such an important thing to make happen?

 So in the early or late nineties, early 2000, the world looked in on Silicon Valley as just being the epicenter for change. It still is to some extent, but it’s spread further around the world now. You look at places like the Ukraine, Nigeria, the UK, Belgium, Germany, New York, more now Massachusetts, where a lot of the conventional medical technologies, defense technologies, hail from. There are so many places you can go in the world that are now doing such great work, but they all had one thing in common, there is a collection of people that have decided to come together, which is typically the formation of founders, and really interesting and productive investors.

Phil Hayes-St Clair: Entrepreneurs that have turned investors are often the best kind, have decided to go, you know what? some good headway in life. I had these opportunities, if I can replicate these opportunities for younger founders who will think quicker, be smarter, understand the language of consumerism better than any of us will at aged 40 and plus, this is what that effect has had around the world, and I think now as founders who have been in this game for a little while, it’s important that we find time to teach what we’ve learned to people that are coming through to help them avoid making the really basic mistakes that we made in the beginning.

Phil Hayes-St Clair: Because there’s usually 10 or 20% of those founders who are just insatiable to take advantage of those tracks that we’ve already worn. There’ll be many who don’t, but I think the key thing that people like Bill did was that they said, I can’t do this by myself, so I’m going to go and find people who are a bit like me who can add their different level of color and pizzazz to what’s going on and actually make it a real force to be reckoned with. And I think Sydney is one of those, Melbourne is certainly one of those, Brisbane’s got a great ecosystem as well. So I don’t think you’ve got to go far to find ecosystems now, but if we tried to find them a decade ago I think we’d be looking at one or two small spots, and there wouldn’t have been hotspots, certainly not in Australia.

Adam Spencer: You mentioned the community was kicking along quite well before you got involved. What year would you say that was that you jumped in?

Phil Hayes-St Clair: Look, I think it was 2005, ’06, ’07, around that time. The .com had certainly come and gone. There were Australian entrepreneurs coming back from overseas to either resettle or retool and re-arm, and there was certainly the idea of the consumer internet. It hadn’t found its revival yet. Obviously iPhone, 2007, I still remember seeing Steve Jobs release that, and I still, when I think about him saying on stage, “Are you getting it yet?” About the fact that we combined all these things into this device, I did remember thinking, wait a second, this is going to change everything. And now it wouldn’t be understated to say that everyone is trying to pursue something that leverages off the back of that change, and that’s really, really exciting.

Adam Spencer: Some people point to this idea of these Aussies coming back from America, from Silicon Valley, the term that’s thrown around is the Aussie mafia. Do you think around, that 2005 time, what did the community look like? What support systems were around, if any? How big was this the community in Sydney? Was it just those, because I hear it’s just those pub catch ups, the little groups catching up at pubs and talking.

Phil Hayes-St Clair: Yeah, I mean there were those. I mean people like Phil Morle, for example, had Catalyzer and other organizations that doing education and incubation, and trying to get people tooled up so they could understand what it meant to do customer discovery, what it meant to do product development, what it meant to do sales. And there was some real capability powerhouses like that, but they were really small, and they were trying to seek investment, talent to come and join them.

Phil Hayes-St Clair: And I still remember downloading I think one of the first handbooks that was made available for free on their website, where it was these are things you got to think about as a founder, it was an education onto itself. And I’m sure Phil could give us some good anecdotal feedback on what it was like to make that work, and well before the mid-2000s, they were considering this well before that.

Phil Hayes-St Clair: But that’s my memory. There was a few websites, typically you were still going to overseas websites to look at the entrepreneurs that had come before, and there weren’t too many Australians that you would point to beyond some of the larger private equity deals that Macquarie had done for LookSmart and the like, so they were few and far between. It didn’t feel like it was in reach. It was a couple of things that had gone off really, really well, but there wasn’t a set of events you could go to, or an education that you could get from somewhere that would bring you up to speed on what it meant to be an entrepreneur.

Adam Spencer: Talking about present day now, what are some of the gaps like where can we improve?

Phil Hayes-St Clair: There’s always stuff that can improve. I think there’s a huge role to be played at universities, particularly in undergraduate courses, and in TAFE and in other vocations, to help people understand what it means to create a product or a service that people love. To be able to sell well, to build relationships and create, as opposed to going to study a vocation.

Phil Hayes-St Clair: So obviously you need to know skills, you need to know what it is you’re going to go and sell, but if you asked any doctor who was going through med school, how will you run your practice? You’ll be greeted with a complete blank look on your face. They’re not taught what it means to business in medicine, even though medicine is a massive business and industry in and of itself. Ironically, you could go and ask an accounting and commerce student, so what will you do to start running an accounting firm or to make the economics of a big four company work? They won’t know, they’ll just know how to read a balance sheet.

Phil Hayes-St Clair: So all of these, the ability to make this skillset known across every vocation is super, super important. It’s about being entrepreneurial, because you go and do an apprenticeship as an electrician, or as a plumber, or any other trade, at some point you are going to have to sell, and you’re going to have to make sure that you can bring in the money while still doing the work, and that is often learned on the job.

Phil Hayes-St Clair: And a lot of the hand me down skills that comes with are learned because you’re an apprentice. Well, there’s not really an apprenticeship when you graduate from university, you’re thrust into a job, and hopefully at the end of 10 or 15 years, and a massive amount of work and stress, and everything else, you are at a point of leadership, but you never knew how to build a business in the first. And so I think the idea of helping people to understand how to build and create value, there’s a massive opportunity for that.

Adam Spencer: How did you learn to sell?

Phil Hayes-St Clair: Like most other entrepreneurs, learning from other founders, and making a bucket load of mistakes on the way. I think if you have the gift of the gab, if you can talk to people and you’re genuinely interested in how you transform their lives, then that’s probably the best type of selling you could possibly do. What you often see people doing is selling products they don’t really love, they don’t really believe in, and that’s that’s terminal in just about every sense of the word.

Phil Hayes-St Clair: I guess for me, I just love learning about people. When you hear people say, “I love to people watch,” I love doing customer discovery. I could sit in an airport and just watch people go back and forth all day, just observing human behavior. I just love it. And one of my most recent side hustles was off the back of that, I was observing an experience which morphed into something very different, but the reality was that it was just something I couldn’t stop seeing, and it happened hundreds and hundreds and hundreds of times, and it just gave confidence to capitalize on it.

Adam Spencer: What one piece of advice would you give to a new founder?

Phil Hayes-St Clair: Take care of yourself.

Adam Spencer: I haven’t heard that one.

Phil Hayes-St Clair: Yeah, ironic, right? So if there’s one thing that you can do to 10x your own capability, whether that be to sell, to lead, to build, to ship, whatever the case is, if you don’t sleep, and if you don’t eat, and if you don’t move physically, then you are going to absorb a massive amount of stress and pressure on your mind and on your body, which will ultimately end up in burnout, and every investor that’s put any money into your business, any customer that’s backed you to supply them with whatever it is, and any team member who agreed to take a risk and come and follow you, is going to be left with nothing, because you as the founder or founding team has blown up and there’s nothing left.

Phil Hayes-St Clair: So do yourself a favor, get a good amount of sleep. I know we’ve got to work hard, but get a good amount of sleep, eat well, move regularly, and enjoy the process, because if if you do this really well, and it takes 10 years to build a great company, you might have four or five times to do this well in your life. Isn’t that what you want to do? So I think that’s how I think about it. But take care of yourself, you’ll work hard, you’ll get it done, but take care of yourself.

Adam Spencer: Last question, I’m trying to create a documentary here that will hopefully truthfully and holistically tell the history of the Australian startup ecosystem. I want people from all corners of the ecosystem to listen to this story, founders, investors, academics, policymakers, and everyone in between. Any one of those categories, or all of them, what do they need to hear from Phil? What’s something that you think about that maybe we’re not talking about?

Phil Hayes-St Clair: As a country, we have all the building blocks to create amazing industries, to make the country self sustainable, to help our neighbors become more productive than they’ve probably ever been, we just need to get out of each other’s way.

Phil Hayes-St Clair: If you’re in government, think about why grants are so important to get businesses running. Try and get them what they need as quickly as possible. If you’re an investor, say no quickly to an offer to invest, don’t string out the founders. If you’re trying to hire out people for a role and you’re the founder in your team, make sure you give them a quick answer, yes or no. And if you’re the founder trying to do something amazing, don’t go it alone, go and get advice and experience from people who have done it before, and be a constant learning machine.

Phil Hayes-St Clair: If we all did those things, the whole ecosystem would move remarkably well, and a lot faster than what we’re doing it right now. So that’s what I would say to everybody that is involved in this ecosystem. This is not a training ground. You don’t come to startup to learn a new set of skills, you come to learn quickly so you can build something amazing.

Adam Spencer: I hope you enjoyed that interview. More interviews are on the way, follow the podcast wherever you’re listening right now, stay tuned for more interviews with many, many more amazing people from the Australian startup ecosystem. Thanks for listening, and see you next time.

Less