Summary

Saul Orbach discusses his background and his experiences living in different places, including New Jersey, Manhattan, Queens, and Israel. He shares how he ended up working in Silicon Valley and Maryland before returning to Israel. Jothy Rosenberg and Saul Orbach then discuss their time at Angle Technologies, a British company that focused on investing in super early-stage technologies in universities and labs. They talk about the challenges of working with tech transfer officers and researchers, as well as the potential of the investment model. They also discuss the technology behind creating indistinguishable digital doubles for movies and the market potential for this technology. In this conversation, Saul Orbach discusses his experiences with CGI technology and his medical startup. He talks about the growth of CGI in various industries, including film, commercials, design, and architecture. Saul also explains the challenges his CGI company faced during the 2008 financial crisis and the Screen Actors Guild strike. He then shares his journey with his medical startup, which aimed to develop an artificial kidney. Unfortunately, the company faced legal issues that prevented further progress. Saul attributes his determination and grit to his mother, a Holocaust survivor.

Bio

Saul Orbach is a highly accomplished Serial Entrepreneur, Venture Capitalist, Social Impact Investor, C-Suite Officer and Executive, Consultant, Lecturer, Thought Leader, Board Member, and Advisor, with over 35 years of extensive experience building and exiting startup and growth companies, turning around failing companies, as well as training the next generation of entrepreneurs. Saul was the Co-Founder and CEO of his 8th startup, NephFlo, Inc., a company developing artificial implantable and wearable kidneys. Formerly, he was the founder of the Elul Fund venture fund; Impact Jerusalem, a social impact organization focused on the underserved populations in Jerusalem. Prior to that, a Venture Partner at Starta Capital investing in East European technology startups. Saul shares his industry experience and knowledge in many outlets: as a Senior Adjunct Lecturer in the MBA programs at Tel Aviv University, the Technion, and Hebrew University; as a domain expert and mentor in a variety of Accelerator programs around the world; as a popular speaker and guest lecturer at conferences, universities, and other events; and, as a sought-after high-level advisor in both the private and public sectors.

Takeaways

• Saul Orbach has lived in various places, including New Jersey, Manhattan, Queens, and Israel.
• Angle Technologies focused on investing in super early-stage technologies in universities and labs.
• Working with tech transfer officers and researchers can be challenging in the investment process.
• Creating indistinguishable digital doubles for movies has the potential to revolutionize the film industry.
• The market potential for this technology is significant, especially with the increasing use of CGI in movies. CGI technology has become prevalent in various industries, including film, commercials, design, and architecture.
• The 2008 financial crisis and the Screen Actors Guild strike had a significant impact on Saul's Aguru startup.
• Saul Orbach's medical startup aimed to develop an artificial kidney to address the shortage of donor kidneys.
• Legal issues hindered the progress of Saul's medical startup, leading to its suspension.
• Saul's determination and grit stem from his mother, a Holocaust survivor.

Sound Bites

"Angle Technologies is the place where we met. I found that to be a very interesting investment model, except for one thing."

"There's no car commercial today that's actually made with a real car anymore. That's all CGI."

"The film industry was actually the smallest of the markets that we were looking at."

Links

Please leave us a review: https://podchaser.com/DesigningSuccessfulStartups

Tech Startup Toolkit (book): https://www.amazon.com/Tech-Startup-Toolkit-launch-strong/dp/1633438422/

https://www.manning.com/books/tech-startup-toolkit

Site with all podcasts: https://jothyrosenberg.com

Jothy’s non-profit that helps kids with disabilities get into high challenge sports: 

https://whosaysicant.org

Jothy’s TEDx talk about why people with disabilities (and lots of grit) tend to overachieve: 

https://www.youtube.com/watch?v=PNtOawXAx5A

Chapters

00:00 Introduction and Background

07:51 Investing in Super Early-Stage Technologies

18:57 Challenges of Tech Transfer and Research

27:53 Indistinguishable Digital Doubles for Movies

31:04 Market Potential for CGI Technology in Movies

33:18 Challenges Faced During the 2008 Financial Crisis and Screen Actors Guild Strike

36:19 Developing an Artificial Kidney to Address the Donor Shortage

49:18 The Influence of a Holocaust Survivor: Determination and Grit

Okay, and here's Saul. It is great to see you, my friend, all the way over from Israel.

Yes, it's great to see you too. I am sorry it took so long that we screwed up the first time, but this time we're going to get it right.

Well, you know, maybe second time is the charm here. Okay, I do like to start with where are you originally from and where do you live now?

I grew up in, I was born and raised in New Jersey, Northern Jersey, a place called Patterson and then Fairlawn. And then I moved to the city, to Manhattan and then Queens. And in 1979, I actually made Aliyah to Israel. I moved to Israel. I met a woman here.

And then I came back to Zos. So I'm currently living in Jerusalem where I lived for all the years that I was in as well. Not in the same place, obviously, but I'm not with the same woman, different woman. But I'm living back in Jerusalem.

And you do seem settled there. it's, I mean, who knows? You've moved back and forth so many times, but you do seem.

Yeah, I don't know. When I got divorced, my kids stayed here. there was no still my youngest. My oldest had just gotten married and my youngest was in high school. So during the time that I was away, there wasn't really, you know, I visited a few several times a year, three times a year, depending on the year.

I booked an open ticket because I didn't want to miss it. And then two months later, my older daughter, who already had two kids, told me she's pregnant too. And I got off the phone with her and I said, what am I doing here? I mean, I was doing social impact investment in New York, but I was like, what am I doing here? My kids are starting to have, they're really starting to have babies now. So I had an open ticket. I called my travel agent. We still use travel agents back then.

And I said, listen, get me on the first flight out of here. It took about a month because it was the high season in the summer. But I packed two bags and I moved back to Israel. And eventually I went back and cleared up everything. And then my youngest daughter also got pregnant. So I had three male grandsons, or three grandsons, in space of nine months after I got back. And that was like,

It was it. was like, OK, this is why I'm here. This is what it's all about. So I don't know if I'm to be going back to the States for live to live. I was actually offered that shortly after I came back. I had to go back to New York for a. What's it called? A family thing, some family business that I had to be taken care of. And as I'm planning my trip back to New York to be there for about eight

Yeah.

nine days, I get an email from somebody asking if I'll speak while I'm in New York, if I'll speak at an event in New York. And it turns out it's just going to be exactly when I'm there. I was thinking to myself, you know, I could use a break from the family. So I said, sure, I'd be happy to. It turns out it was a lunch event for a Russian VC who set up shop in New York. I went, I spoke.

So

They had some companies there. I said, let me see the companies. I saw the companies. They pitched me. I gave them feedback. And then the next day, they called me up and they said, listen, we'd like you, know, the companies that really enjoyed the feedback and we'd like to bring you in as a partner in our New York firm. And I said, wow, that's very flattering. But I live in Israel. I just moved back to Israel a year ago.

I'm not moving to New York. I said, well, you can commute. And I said, well, I didn't have done that, got the t -shirts and the divorce to prove it. But I said, I'm not that interested in that either. I said, OK, OK, fine. I'm sorry. I'm It didn't work out. So I thought about it. And I called him the next day. And I said, listen, what if I live in Israel and work for you online, remotely? And I'll come visit a few times a year.

I said, sure. So I ended up as a venture partner for a Russian venture capital fund that invested in Eastern European companies and built them up and then transferred them to New York. And I worked with companies and funds in both Moscow and New York before Russia became PNG, the number of San Onan Grada. But it was a great experience. It was just completely happenstance that it worked out that way. So I had the opportunity to move back and

It was a pretty good gig at the time, but I don't know if I was doing it right. I'm happy to travel a little bit more than I used to. But I mean more than I used to now, not what I did in the past. In the past I used to travel 300 500 ,000 miles in New York from this road. Not doing that again. So yeah, I like it here. I'm happy. My kids are here, my grandkids are here.

That's crazy. That's crazy.

you know, it's great.

Yeah. OK. So let's go back to you mentioned Angle Technologies as the place where we met. I found that to be a very interesting investment model, except for one thing. And

Only one?

Well, okay. So let's just say what the model was. So this was a British company and they wanted to set up shop and really focus on what has always been an underserved area or a not served area of venture investing, which is the super early, early stage.

We did that and we can talk about, I want to talk about that a little bit more. That, that, that pro the problem I was referring to is that because we invested or the angle invested off the balance sheet, if anything happens to the stock or the stock market, course, then suddenly you don't have a fund. You know, it never was really a fund, but we pretended it was.

and so.

Well, it sort of was, but it wasn't. I mean, it acted like a fun, but the underlying structure was not a fun.

Right.

Right. And so on the one hand, you could pretend it was an evergreen fund because it was just supposed to always give you a certain amount that you could allocate for each startup. But yeah, it wasn't resilient. And so besides that, what did you think of the model?

Mm

I thought it was really interesting. So like you said, it was super early. What you didn't say was that it really focused on identifying early stage technologies in universities, labs, corporate labs, things like that, and then investing in tech transfer opportunities. So the one thing that is required that there had to be a prototype, a working prototype.

So they could eliminate or reduce in the R and D risks, so it could reduce the R risk, right? That's the way RAP always said it. So we always wanted to reduce the R risk, but we weren't afraid of the D risk, the development risk. So we looked for really interesting opportunities that had commercial, that interesting commercial opportunity that had big market opportunities, but

you caught early enough so that your equity stake would be really big if it hit. So on a suring level, that was great. I saw the problem a little differently. The structure didn't bother me so much as long as the money was there. The problem was that it wasn't always easy to deal with the TTOs, the tech transfer officers.

or the entrepreneurs that we invested in afterwards. I shouldn't say the entrepreneurs, the researchers that we invested in afterwards. So the company that I worked for, that I invest, that I found that grew images, which we worked on together. we licensed technology from NYU and from USC. And we almost licensed technology from Mitsubishi and...

in Boston. So we were the poster child for tech transfer that year because of all the licensing deals that we did. But the truth was, I had in the same batch of technology that we saw at NYU, for example, the deal that I really wanted to do, we didn't get.

that ended up getting sold for $330 million two years later. It was the same researcher, one of the same researchers, but we couldn't reach an agreement with them because they just weren't interested in the kind of deal that we could offer. So when I looked at the weakness in the motto, the idea was just, the idea conceptually was pretty good.

The weakness was...

Tech transfer offers aren't always easy to deal with. The deals that you get aren't always the best deals. It's not the same as negotiating with an entrepreneur over straight equity deals. There's a lot of other baggage that goes with it. And sometimes the researchers also can...

Mm

create hurdles, let's say it that way, in terms of how things play out.

I recently had the displeasure of working with a deal, I shouldn't even say working, dealing with TTO office here in Israel. And I've had experience working with different ones here. Some of them are really good. They're really nice. They're very helpful. They understand. If you can make a win -win deal, they win. That's why it's win -win.

But some people are really not interested in that. It's win -lose. And the one that loses is you with me. And I have experience with these folks from then. So dealing with them now, it's really interesting how.

They haven't really gotten enlightened enough yet. They haven't quite all figured it out. Some of them really have. Like I said, they've made a lot of progress. I always thought that that was the weakness in the model. That aspect of it.

I had, so, you know, for the period of time that I was there, like in anything, you had to first kind of go around and start developing relationships with these tech transfer officers because you weren't gonna be able to just know when there was something interesting at a particular institution. So you needed.

Right.

No, they have to tell you.

that you needed them to do a little bit of push out outwards. Hey, you should come take a look at this. And then there was a scale problem too. The idea was, at least the way I was thinking about it, the idea was I had Andrew Sutherland with me and I was gonna be the initial CEO. He'd be the CTO.

but we had to as quickly as possible bring in the startup team. had to go find them. And you kind of want to have a bench of those kinds of people standing by. And then the scientists at the university who has already chosen their career, they're not going to leave except maybe for a year on sabbatical.

You got to try to get a deal where they're going to be like your chief scientist one day a week. And that could work. So you had a lot of

So that's what we did with Paul, the Portabella. And he agreed to die.

And, and, and, and when I did, you know, many years later, it had nothing to do with angle, but when I did Dover, the current, the current one, I needed the guy that had been the researcher from, University of Pennsylvania on the, research program that where this all came from at DARPA. And I just got so lucky because right when I was ready to take this, you know, out into the commercial world.

Mm

He was ready for a one year sabbatical. And, that made him my full -time CTO. Anyway, back to angle for a second. So you had all these, these moving parts where everything had to line up. and, and if you got one, I guess, that was going to be that you were really pretty sure, you got a good deal and it, and it, and it had a good market. That would be where you could say, okay, I'm going to.

I'm not going to try to do four of these a year. I'm going to just do this one because it's looking so good. It was the scaling part that really had me kind of worried. And I did have one I got started. It was called Mojility. And then I ran into a really interesting problem. So the CEO was going to be an old friend of mine. mean, he was an old friend of mine.

If he was going to be the CEO, then I had to introduce him to some investors because the other part of our model was that we were going to do the initial investment, but not only did we have to find a team, but we had to find investors that would take it on. And so I was introducing him to this investor and he was someone I'd known for a while.

He was a South African guy and we sat down and we met. And I should at this point, just as a little side that's important for the story, mention that my friend, the potential CEO, is black. And we were sitting down and we had a nice introductory 15 minutes. And then the partner...

Okay.

said, I have a call. I'll be right back. And he got up and he walked away and we're sitting there and it was 15 minutes and then it was 30 minutes. And my friend said to me, up your stuff. We're leaving. And I said, what do you mean? He's going to be right back. said, no, he's not. I know he's not. And I know why he's not. And we're leaving. And he was right. And I was really, really, really sad about that.

Wow.

Wow, that's really, that is sad. I haven't heard that story. I shouldn't say it. I haven't heard that story, but I haven't heard that either. That was the reason. I didn't hear it. I haven't heard one of those.

Yeah.

Yeah, there, know, feces are people and there's people of all different, you know, likes and dislikes and prejudices and whatnot. Okay, so back to this. So talk to me about, so you got a guru started and it was just, it was magnificent technology. It was just so fun to visit. so,

Yeah.

nice.

You know, we'll just describe it real quickly. It was this half of a geodesic dome sitting on the on the ground.

Right half, right half. was a foot, dude. Just, you know.

Okay, but you're right. It wasn't a geodesic sphere. You're right. It was a dome. It was probably about 15 feet in diameter.

I'm 6 '2 and when I walked into it I was about half way. So yeah, it was 12 to 14 feet.

Yeah, so that means it's bigger, bigger than that, because you're only occupying half of it.

I was telling you, it was about double my height, like I'm six foot two.

But I mean, at the base, it's a circle, right? And that circle had to be more like 20 -something feet in diameter.

I don't know. Okay. I'm not gonna argue. I don't think you're right, but okay.

So there were like a large number of cameras. I think the number was like...

We had no there was there were 12 counter for 12 or 14 cameras, but we had 800 lights

800 lights and and

The lights, we were competing with the audio industry for LEDs at the time.

yeah. Well, and then the idea was, well, so let's describe the problem, the problem that Hollywood was having.

So we were, the technology that I discovered was, I don't want to get too technical, but if you want to create an indistinguishable digital double of anything, right?

a face, a person, fabric, wood, any surface material, any material. The problem is that you have to, okay, it's going to get a little technical, I apologize. You have to measure the reflectance properties of the surface materials in order to get it to look realistic. When you don't do that or you don't do it correctly, what happens is it looks fake.

looks plasticky if it's plastic. The great example was the movie Spider -Man 2, I believe, with Anthony Molina as Doctor Octopus. And when he was created as a CGI character, computer generated image, character, it looked fake. It looked plasticky. He wore this really shiny leather cape when he was walking around.

And that leather cape looked like dull plastic. It was really awful. And also the whole body, the image of his face, you could tell right away that it was not an indistinguishable digital double. And again, the reason for that is because if you don't measure the reflectance properties of the surface materials, then you don't know what happens when the light is shining on it. Like right now,

Thank God I don't have any hair. So it's a great example. Where this light is hitting my head here, it's much shinier. But over here, it's in shadow. It's all different. So if you want to recreate this image, not that anybody would want to recreate me, but if you wanted to recreate this image, you'd have to measure all of this how the light is being reflected to get it right. And if you don't do it right, it's

It really doesn't look real. That was the problem. So when it came to things like leather, the movie The Matrix, right, with Neo, and all those guys wearing the leather suits, Mr. Smith's wearing the suits, and Neo and the woman, I forgot her name, wearing the leather, and the other guys wearing the long leather jackets. So...

Agent Smiths.

We knew the guy who did it. I mean, I got to know him quite well. He became an advisor to our company, Kim LeBerry. So he was the one who figured out how to do this by taking a machine called the Ganyometer that would actually, it was used by the defense industry to create stealth paint. And he rented it. It cost a million dollars to buy. He would rent it from whoever.

whichever company was in California that was doing the work. And he would use it to capture the leather and the materials of those garments. And there was a paper written about it. In any case, I forgot his name, something, Ken Perlin, the researcher at NYU, he came up with the same idea and did it in three seconds using a kaleidoscope. And that's what I said, I saw the demo and I said,

I don't understand what this is. They said, I said, how did you come up with this? He says, well, I visiting, I was on a sabbatical at Stanford and they showed me a goniometer. And a goniometer is that machine that they use. And basically what you do is you take a object, you take an object and you put it on a tray, you shine a light on it, you take a picture of it.

And then you move the light one degree, and you do the whole thing again, and you move the light another degree, and you do it again and again again until you did a 360. After you did a 360, you move it one degree, and then you start again. And you keep going until you go through, I don't know how many 360s, but you have to move everything, right, completely all around, the light, the camera, and the object, until you've captured every possible angle that you can possibly have of that combination.

of light shining on the object from a different angle. So Ken said, he looked at this, he says, why can't we do the same thing with a kaleidoscope? He did it, and he built one, and it took three seconds. I said, I don't understand it, but there's a value proposition in here. Any, the goniometer took 26 hours to do that. I said, anything you can reduce from 26 hours to three seconds, you have to be able to make money from.

And that's how the whole thing started. that kaleidoscopic device was good for materials, but to do the face, which is really, really difficult, because skin is translucent. And what happens is the light goes into the skin and bounces out when it hits something solid, which has a name for it. I don't remember right now.

Hehe.

The skin was the most difficult thing to do besides something like a mirror, like something that is reflecting all the time, or like stainless steel or something. There were certain materials that were very, very difficult to capture, but skin was one of the most difficult. Now in the movies, the thing that really is the face. So in the old days, when they would do stunts, they would have something called the stunt double.

But you never saw the face of the stunt double except in bad Steven Seagal movies, right? Because you knew that if you would see the face, you'd know it wasn't the actor. So stunt double was always filmed either from behind, like you just see the back of the head. You never see the front and they're wearing a wig, right? Or in what's called a long shot, right? You know, far away. So you couldn't really make out the detail of the face.

our objective and what Hollywood wanted for us to create an indistinguishable digital double. So that meant that in one scene you would have the actor and in the very next scene without any, you know, back shots or anything like that, you'd have a digital indistinguishable digital double of the actor. And that actor, that digital double would be CGI generated. And then

It also helped in all kinds of ways because certain stunts and things you could recreate in CGI that you couldn't recreate physically because it wasn't the right time of day, wasn't the right time of year, the scenery was all gone, the sets were gone, whatever it was. So all of a sudden, CGI was the new wave and our ability to create indistinguishable digital doubles

became a very important component of how movies were being generated at the time.

That was great description. The one part we left out is that the way you basically turned the geodesic dome into the same idea as the kaleidoscope was that the actor would sit in a chair and be told, don't move, and it's only going to take 14 seconds. You can hold still for 14 seconds. Two seconds?

Two seconds. You couldn't even hold still for two. Trust me, two and a half seconds was what it was.

I must have been there for a demo of an earlier version, but anyway. And the computer is basically doing all the movement because it's just flashing different lights at different angles and activating different cameras.

Yeah, it was two seconds.

And a lot of filters as well. We did regular, we did infrared, we did other kinds of filters. I don't even remember all of them. But we had about eight different filters, or six or eight different filters that we used as well to capture different components of the reflective properties. That was what made the skin work for us.

And then wasn't it GI Joe 2 that was the first movie that it was in? That was such a proud moment.

Yes, very much so.

But it was a case where they were going to have an actor out in space. Because GI Joe took place in space. I actually watched the movie.

Yeah, but a lot of the stuff that they did was not in space. It was in the stunts. So in that movie, at one point, they're chasing people on the streets of Paris, if I remember correctly, and there's a train, and they're jumping through the train and breaking all that stuff. It was crazy. There was a ton of stunts that they used us for.

And if Tom Cruise wasn't an absolute maniac with, with, you know, his own body, they would need it for his movies, but he does his own stunts. He's insane. Okay. So they are indeed. But, so the thing is, is that how big a market, what did you think this was going to be?

He is insane. But they're great movies.

we thought it was going be huge. There were a thousand movies made a year in Hollywood. the number, the percentage of movies that was using CGI was growing from 30 % to 50 % to 70%. So, you know, that's a ton of movies and each movie, well, I shouldn't say they weren't all the same, but

all the big blockbusters like the $150 million movie budgets, all the Marvel movies today and all of that. And even a movie that they use this for, what was it called, with Will Smith.

I don't remember the name. No, no, no. Before that, plays him and Charlene Theron, Charlene Theron, they play the superheroes and he's the evil superhero. I forgot the name of the movie.

Independence Day?

it started with an H, Harper.

No, no, no, not Hitch, a different movie. Anyway, it doesn't matter. there wasn't as much in there. But OK, the amount of CGI that was being done was growing and growing. Commercials. There's no TV, there's no car commercial today that's actually made with a real car anymore. That's all CGI. And beyond movies, we were looking at

okay.

know, design, architecture, clothing, materials and everything. So it was a huge, huge market, huge. The film industry was actually the smallest of the markets that we were looking at.

Okay, but

Okay, but what happened to the company?

Well, you know, there's an old saying and that is that, you know, you sometimes need more luck than brains, but timing terms everything. So we started the company in 2007. In 2008, there was the mortgage debacle, right? And the financial markets collapsed. And when the financial markets collapsed,

I know what you're gonna say.

that had a broad effect. The venture capital markets suffered as well. It was very difficult to raise money as a result of that. But worse than that, Hollywood was also pulled back because they, you know, the funding for the movies that they made also came from the markets, you know, different sources. But in addition, if that wasn't bad enough.

If I, if I'm an actor and you're making a movie with me and then you do something with the movie, who owns the rights to the digital actor that you've recreated? And they were saying that the actors should own it. The studios weren't agreeing to it at the time. So the Screen Actors Guild went on strike over digital rights. And then the studios stopped green lighting movies.

So we had a double whammy. First, the mortgage tobacco, which decimated the capital markets, know, in the venture capital markets as well, we had raised about two and a half, three million dollars up until then, but we needed to raise again and there wasn't any money to be had. And then the other thing was, not only couldn't we raise money, but there were very few new movies being greenlit.

And so even though we had a nice pipeline of projects to do, they didn't green light them.

Well, so what did the technology go back to NYU then?

Well, we had a license deal with USC. We gave it back, but it really didn't matter so much. But the more important technology was from USC, and we basically gave it back to them. And that was it.

And have they done anything with it since then?

Yeah, Paul actually, Paul de Bevec was the chief scientist. He was the inventor. He was, he eventually left USC and went to work for Google, believe it or not. And he started doing some of the same things for Google. You know, like all that imagery, CGI stuff. I never really understood why Google was interested in it, but I'm pretty sure he was at Google doing that for them. He was kept in touch over the years a little bit, but not.

Not as much as we used to.

All right, well, let's flash forward to present. So now you're doing a medical startup. Tell us about that.

Yeah.

I was doing a medical startup until this week, actually. So it's a story, unfortunately. It's not the outcome I wanted. But I came across a person who invented, had patents for how to develop an artificial kidney.

I became the co -founder and CEO of the company. It turns out that from a strategic perspective, kidney disease is a very big problem. When you get to a point called end -stage renal failure, which means your kidneys really aren't working, the only way you're going to be able to continue to live is if you get a kidney transplant.

And unfortunately, only about 20 % of the people who need a transplant can get one because there simply aren't enough donor kidneys. And the wait list is three to four years. The average last year was 47 months of it, which meant that a lot of people were dying, literally, waiting for a transplant that never came. 80%.

The alternative to kidney transplant is dialysis. But dialysis is, for somebody in end -stage renal failure, dialysis is an interim solution meant to keep you alive until you can get your transplant, which then didn't always come. Then you have a different kind of patient problem. That's somebody whose kidneys are failing, but they're not in what's called end -stage renal failure.

So for example, 50 % kidney failure. It works, but you don't qualify since the problem is that most 99 .9 % of all transpirons are paid by insurance. So the insurance companies have a standard for what's considered qualifying for a transplant, not ten stage renal failure, which means your kidneys are working below 15%.

more or less, right? And you can't survive without. So if you're at 50 % kidney function, your kidneys aren't really working well, but you don't qualify for a transplant, well, then you have to go on dialysis. And dialysis, as people are, it's for sure now, is not a fun procedure. We all know people are on dialysis. It's three, four, sometimes five times a week, three, four hours.

where they remove your blood and replace it, know, do all the things that are needed. But it's a debilitating, painful, difficult procedure which really takes away your life. You can't do anything else. mean, you're spending whatever time it takes you to get there, a few hours doing it, an hour recovering, an hour at home. It's like a whole day thing. You could be doing it most days. So we came up with a...

an artificial kidney to replace dialysis that would be wearable. You could wear it, walk around with it if you were healthy enough, you know, go to shop, go shopping, go work, go to work, whatever you need to do. So that was version number two. So version number one is implantable, number two is wearable. And then we came up with a third version as well, called tabletop for lack of a better name, that would be used in hospitals or doctor's offices.

So one of the problems with dialysis if you need it is if you're in a remote location You don't have access to it If you're in the Sahara Desert or you some subtropical area where it's really hot There might not be enough water to feed the machines takes a ton of water or ton of electricity So we came up with a tabletop version for non ambulatory patients that could be used in a hospital in a doctor's office

at home to replace the need for dialysis, not the need for dialysis, but the need to go to a dialysis center. The company was going well. We developed proof of concept. were into the what's more called the productization stage, sorority stage. And I was about to go raise money. And I discovered that we had a legal problem that I could not overcome.

which I don't really want to talk about. It had nothing to do with me, but one of the other people. In any case, we had a legal problem I couldn't overcome, it inhibited me from being able to raise money. And so basically I suspended the operations of the company about a month ago.

It's unfortunate because we had the opportunity to really change the world.

Like I said, sometimes more luck than brains.

Well, every startups are fragile and

You know, it's fun to do them. It's fun to have these thoughts of changing the world. And then sometimes, a lot of times, something goes wrong. And we...

I to tell you something. I'm sorry to interrupt you, but I want to say something. You know, I did six years of turnaround work at one point in my career before we met. And what I discovered was that the number one, let me take one step back. If you take a survey, if you look at the surveys of why startups fail. So the number one reason in the survey, forgot the name of the company that did it, was

No market need, 42%. And the second reason was ran out of funding, 29%. Statistically significant difference. That same survey was done two years later, and the number one and number two switched places. Number one was ran out of money, 38%, and number two was no market need, 35%, a statistically insignificant difference.

So my feeling is that the number one reason that startups fail is no market move, which means people haven't done the market research in order to validate the need of the customer.

Mm

When I was doing turnaround work though, the number one cause of company failure that is not a startup is ego. Ego, not willing to admit they're wrong. And in my case, in this company, that was the problem. It was an ego issue. Not about wrong, but I couldn't restructure the company.

People, yeah.

in a way that I needed to in order to be able to raise money. enough said. But it was a tragic, it's tragic, really tragic because we were better than everything else out there. But it is what it is.

Well, you're right about that, that observation, or I guess I would better say that I agree with that observation. I've seen twice where a founder of a company is the reason the company couldn't move forward. Happened twice.

Right.

Do you know, do you ever hear of Derek Siever?

no.

So Derek Siever is, I guess a VC of some place, he put out a thing about the value of an idea, like how valuable is an idea?

So he said something really fascinating, which is 100 % true. An idea is only worth as much as the execution of that idea. So he has two different tables. One is the value of an idea, and the other is the value of execution. So for instance, he says a really bad idea is worth minus 1.

A really great idea with several stages in between is worth $20. Minus $1 and $20. $20, right? But then he says you have different levels of execution. So he goes, no execution, bad execution, right? Good, better, great. And I forgot the scale. 10 million was the top scale for.

for what you will call for great execution. So he says if you have the best idea which we have and you have terrible execution that idea is worthless. It's worth a dollar. If you have the great idea and great execution 20 times 10 million 200 million. And he put it as a scale between these two

I'll send the article to you later. But it was a fascinating idea. We had a great idea and great execution, by the way, but ego got in the way and we couldn't do what needed to be done in order to continue with the execution. That cut off. So you're right.

I have one last question to ask you. It's a no. This is a big one, though. It's about grit. It's about grit. I grit grit.

So, as many as you want.

On board.

About what?

Great, see you all right, too.

Mm -hmm. And I always talk about grit on each episode. because no one has ever done a startup, no one has ever been a guest on my podcast who doesn't have an amazing story of grit. And you've done startup after startup, you've done turnarounds, you've done other

Mm

Yes,

things unrelated like you've been a financial planner, you've done a VC, you've been a lecturer, you've just done all this stuff and you've moved back and forth and back and forth and spent, you've done several million miles on planes. did your, well, other than the fact that of course you're from New Jersey where I guess everybody must have grit, where,

Right, DC.

Hahaha

Where, but seriously, where does your grit come from do you think?

I'll tell you, but I have to tell you something. You know what they say about people from New Jersey, right? That the light at the end of the tunnel, the reason people are so depressed in Jersey is because the light at the end of the Lincoln Tunnel, at the end of the tunnel, which is the Lincoln Tunnel, is hoboken. It's New Jersey. So, you know, it's terrible. Anyway, couldn't wait to get out of there.

The truth is that it comes from my mother, if I had to say anything. So I think that one of the things that characterizes me as somebody is that I never give up. You know, I just keep going. There is no such thing as failure. It didn't happen yet. That's my...

It didn't work yet. We'll still be able to do it. You know, it's yet. It's not done. So my mother was a Holocaust survivor. And she was the youngest of 11 children, married with two kids before the war, lost everybody, her whole entire family in World War II, and met my father after the war.

married him and they came to live in America, in New Jersey, where they had a relative. And she was, both my parents, but my mother more so, was, you just, there is no such thing as giving up.

Like, because it would have been very easy for her to stop living. And I can tell you that in the community of friends that she had growing up, when I was growing up, I saw people who were literally a shell of them, you know, like they weren't living. They were alive, but they weren't living. If you understand what I'm right? They gave up.

I do.

And my mother and my father never did. And that was what they taught us. doesn't matter. wake up in the morning. Something goes bad. You wake up in the morning. It's a new day. And then you do it again.

Now, with.

Now was she a survivor of one of those camps?

Thank God no, she was captured by the Russians and sent to Siberia and that's how she survived because the Russians only wanted to work you to death. The Nazis wanted to kill you. That's how she survived. But it really came from that. There is no such thing as giving up. You just wake up the next day. You want to have a pity party? Okay, sleep it off.

And back to work. That's it.

One more question about this about Siberia though it wasn't like there was you know, the The you know the the US Army, you know moved in and liberated these camps. How did she get out? How did she get out of Siberia?

Hahaha

Well, when the war ended, they let him go.

I see. They just let them go.

They were prisoners of war, so I don't know.

but they were 3000 miles out there.

Yeah, I mean, you know, she was young, she was in her 20s, late 20s at this by then. And she said the conditions were terrible. You know, they, I'm wearing like one layer, you're wearing one layer. That's all they had. But it's summer here. I'm sitting in an under -conditioned room. This was 20 below with one layer, you know, long sleeves. That was it. You know, so.

The food wasn't any good, the conditions weren't good, the work was hard, but you know, if you were young and you had the right determination, you could make it.

How long was she there?

I can't say exactly. I don't really know. I think it was for about three or four years.

Till the end of the world.

There's a relatively new show on Hulu called We Were the Lucky Ones. And it's a true story. I mean, it's a reenactment of exactly that. And it's the ones that were in Siberia. But they had been taken from Poland.

Like, I haven't seen it, but I've heard about it.

Yeah, that's where my mother came from. She ran away. She ran away and she ran east. said, you went the wrong way. She was like, you know. But she said that's what made sense at the time. You know, like the Nazis were coming.

She probably did not appreciate your comment.

Yeah, I can, I, I can actually understand that because I think, I think honestly, if she'd, if she'd gone West, it, it might've been a heck of a lot worse. And you might not be sitting here talking to me.

So it's true. for sure. Yeah, for sure. For sure. Anyway.

Well, you know the funny thing is that my parents after the Vietnam War, they were in what's called the DP camp, a displaced persons camp. And that was for other people who had no homes to go to, right? All the refugees from the war. Both of my parents were from Poland and they didn't have homes to go to. They ended up in DP camp.

And in the DP camp, you had to register for where you wanted to move. So you could go wherever you wanted. As long as you had a relative, you needed a relative. It depended where you wanted to go, but in America, for example, you needed a relative that would vouch for you or whatever. I don't know how worked exactly. But they had, my father had one, so that's where they ended up. But it turns out that my father actually signed up to go to Israel.

And without telling him, my mother went and changed it to America. So I could have ended up in Israel just as easily, and who knows what would have been then. But I ended up here anyway. I would have been a sapper. I would have been a sapper. It's funny.

Well, you would have been a sabre. Yeah, you would have been a sabre. half of my family also was lost in the Holocaust. But my grandparents actually came over in 1914 when they were teenagers to get out away from the Russians because it was Lithuania and Latvia.

Right, right.

one grandparent from each place.

Yeah. So we had, that's why my father had relatives, because after World War I, part of his family, part of his father's family, I should say, like his uncles and his aunts, some of his aunts came to America in like 1920 to get away from that. And that's how they ended up, I never really knew them. They were older. We didn't see them so much.

Mm

That was how they ended up getting to America, through that family. So that's where my determination comes from, for sure. Whenever I think about it, I know that it comes from there. Because it just wasn't something that she accepted. You can't be depressed. If she says it, what am I going to say to her? Like, well, OK. But she was the model for it.

And it was true for all of us, my brother and sister as well, we were all the same. Extremely, extremely determined people.

That's great.

Well, it stood you well. It stood you well.

So far.

Well, I want to thank you for participating and being part of this. This was wonderful.

It's my pleasure. First of all, it's always a pleasure to see you. It's always a pleasure to talk to you. And certainly, talking about if there are lessons that can be learned from any of this, that's great. That's the idea. So you mentioned I teach entrepreneurship and venture capital in three different MBA programs. And the main reason I do is because it gives me an opportunity to sort of train the next generation.

And that's been a really rewarding, satisfying experience. I teach about 250 students a year now in three different programs. So it's a really great way to feel like you're contributing to somebody's future success. That's really nice.

That's.

Well, you know, that's exactly what motivates me to, you know, to write a book like Tech Startup Toolkit, which by the way, is my thank you gift to you for being on. Yeah. Yeah. So, I, I just, I'll pop you, an email to get your current address, but, but definitely, a signed copy is, will be coming your way.

right, was right in front.

Okay, no problem.

Right, yes. People keep wanting me to write a book. And the truth is I hate writing. So, I mean, you I love editing, but I hate writing. So, I don't think there's going be a book coming out of me anytime soon.

All right.