In this interview, Don Davis PhD, MBA, host of the Life Science Success Podcast talks to Kivo CEO Toban Zolman. Zolman takes us through his impressive journey of over 20 years in life sciences and the transformation he has witnessed in the industry. Zolman speaks about the significant shift in the industry from large pharmaceutical companies running drug trials to now being dominated by smaller companies without a product in the market yet.
Regarding emerging trends, Zolman anticipates artificial intelligence will have a transformational impact on the industry. He also highlights the importance of knowing when to say "no" and making definitive decisions based on customer's needs, aligning company focus to customer growth, and maintaining transparency in their operations.
Watch the full episode below, or listen on YouTube, Spotify, wherever you get your podcasts.
Full Episode Transcript
Don Davis: Welcome to Life Science Success podcast. For those of you who don't know me, my name is Don and I'm a consultant in Life Sciences. I help companies streamline their broken processes and take out inefficiencies so that the revenue they have is more profitable. The types of companies that I help are pharmaceutical companies, medical device and biotech. Typically, the things that we work on are things like mapping inefficiencies, using things like value stream mapping and things like that. We also plan and facilitate improvement events and help companies with things like project management.
In this episode of Life Science Success, my guest is Toban Zolman. Toban has over 20 years of leadership experience in the development, deployment and validation of computerized systems for clinical trials. So with that, welcome.
Toban Zolman: Thank you. Great to be here.
Don Davis: It's great to have you here, and I'm looking forward to this conversation. What specifically do you do at Kivo? What sort of things do you focus on and where are the boundaries? I guess because it feels like there are a lot of companies that are similarly in this space, but as I read more and more about Kivo, you're definitely unique as well. So I would like to talk about that. But before we hop in, would you take just a moment to tell listeners just a little bit about yourself?
Toban Zolman: Sure. Yeah, that'd be great. I started my journey in Life Sciences 20+ years ago. I was actually an early employee at an early electronic submission company called ISI or Image Solutions back in the early 2000s. We were a pioneer in the transition from paper to electronic, especially electronic submissions like eCTD. There I worked very closely with mainly Tier 1 Pharma companies in transitioning business processes from paper to electronic, and electronic to eCTD. [I worked] taking that message global...I think 16 countries, 47 out of the top 50 Pharma companies...something like that when it was all said and done. That was super fascinating, but also soul crushing to spend that much time in windowless conference rooms. So I got out of [Life Sciences] and ended up doing a series of enterprise SaaS startups in other markets. I was early in social, early in cloud DevOps, FinOps, early in IoT. Then a few years ago started to take another look at Life Sciences, and specifically this pendulum swing that was happening in drug development.
[Drug Development has] historically being driven by large Pharma companies. Over the past 10 to 15 years, that's starting to gravitate to 70% of clinical trials now being run by companies that don't yet have a product in market. And that has massive implications for how drugs are developed, how that funding happens for those companies to bring drugs to market, and (I think) offers a lot of area for innovation.So that pulled me back in, so to speak, to the Life Sciences space.
We're trying to take everything that we've learned from digging into technology in these other markets and dovetail that with what we know about business, process and Life Sciences to bring some transformation to the industry.
Don Davis: It's always interesting to hear the journey that everybody takes. People probably heard me say this in other podcasts, but the things that let you capture the capability, let's say, in one hand, to go do something. And then the second part coming back to something that you have a passion about, is also really interesting in terms of the journey.
As you looked at the key challenges that companies could have in this space, what is it that led you in terms of developing the product with Kivo?
Toban Zolman: I think there's a few dimensions to this. I think at some level, just from a personal interest standpoint, what really fascinates me is industries going through transformation. I thought the first time I worked in Life Sciences, that's what I was experiencing. Having been through those sorts of core transformations, witnessing eCommerce move to social, IT move to DevOps, data centers move to the cloud...those are fully transformational sorts of changes where entire new jobs are created, entire departments become obsolete. I think what I have been through, and really what Life Sciences or Drug Development in general has been through over the past 30 years has been a series of evolutions, but not something truly transformational. And I believe, and the reason Kivo exists, is that we're on the precipice of that significant of a transformation in how drugs are developed.
To me, that's super fascinating. The impact for quality of life and health that that could drive the speed at which drugs can come to market, the implications for regulation and government oversight...The whole process, I think, is really ripe for optimization at a minimum, if not complete disruption. That's a space that I love to participate in.
I find it fascinating at an organizational level, a company building perspective, a technology perspective. I think there's a lot of opportunity to help drive that sort of change across drug development. I feel like with what we've done over the past couple of years at Kivo, we're really positioned to take advantage of that and accelerate that type of change.
Don Davis: When you think about the overall experience that you have as a CEO, how do you leverage the experience with regulators and best practices in engineering to innovate the software in your space?
Toban Zolman: I feel really privileged, actually. There were times in my career where I felt like, "My God, I'm doing all this disparate stuff that doesn't connect. What am I up to?" Now I realize, "Oh, it all finally intersects in a way that's meaningful". I was unique in being able to work with very large companies, helping drive business transformation when it comes to regulatory process. I had lots of opportunities to work directly with regulatory agencies and help them make sense of how they're going to receive all of this data as it was coming in. Then I was able to totally step out of Life Sciences, not worry about any regulation compliance, anything like that, and run a series of venture-backed companies where we learned how to develop very quickly, align development and product thesis, both to kind of what customers are demanding, investment strategies, et cetera. What came out of all of that are a series of themes. And I think those themes, when overlaid across the drug development landscape and compliance landscape, click into place where there's some really cool stuff that you can do.
When I talk about those themes, really what I'm referencing are things like, there's constant pull to faster cycles, to supporting distributed teams, asynchronous communication, driving costs down, and leveraging software more than services to get jobs done.
Kivo has unique DNA because we're 50/50 made up of folks with deep clinical and regulatory experience and folks that I worked with in other industries with really deep enterprise SaaS experience. So we know how to build stuff very quickly and iteratively and do that with high quality because of our Life Science experience. We know how to wrap that in a compliant process and validation, and we understand how to really bring value to organizations, how to make recommendations on process alignment. I would say out of any job I've had in my career or any company I've worked in, I feel like we're in a unique position where there is this intersection of meta-level trends in terms of business models for drug development companies, technology transformations that are happening...and that's frankly accelerating with things like AI and broader trends in funding, and how these companies are being developed & bringing drugs to market. Those three things together, I think are just super fascinating. I feel like Kivo is in a really unique position to see all three of those angles based on just all of our backgrounds and really stitch those together in a way that's frankly novel for what the industry is going through.
Don Davis: Speaking of what the industry is going through, my experience has been that I feel like there's a mix of people who are accepting what technology can do, and people who are just having it driven on them day after day after day. I feel like there's this interplay of, "Hey, look, I see the power in the data and everything that we have"...Examples that I have are, during the pandemic, plenty of companies went out and deployed data catalogs to try and tag their information better on the Pharma side, to try and tag their information better so they could find it quicker, so that if there was another pandemic in the future, they'd be able to react faster. Then now with AI, I feel like there's just this wave of, "Hey, we could help you determine the answer better, faster." There are some companies I feel like are accepting it and that's happening naturally. Then I feel like there's a level of resistance as well where companies are just saying, "We're good the way we are." The reality is their competition is either accepting or moving with the wave.
My question for you really is...when you look at that level of digital transformation that you're having to help organizations go through, what have you faced and how are you helping companies go through that transition?
Toban Zolman: It's super fascinating the way you frame that in the context of, I'll call, motivations or perspectives of the folks.
I'll be honest, I don't think I fully understood what was happening or why when we started Kivo. I think we saw like, "okay, there's this trend...scaling companies, emerging companies don't have a product in market, and they don't have tools that are really built for them." And people don't really understand how to run those companies - like the operational model. But now I think it's actually slightly more complicated than that.
I think what's happening at a meta-level is, there's this fundamental change in business model for how drugs are developed.
Historically, what we saw is that a very large company would invest a quarter billion dollars to get a drug to market, and they could do that. They would purchase assets out of universities, or research institutions, or poach companies very early. What started to happen is venture capital really started to focus on drug development. The challenge is there's a structural tension in that funding model that I don't think most people get. That tension is to go from patent application to drug approval, on average, takes 13.6 years. Okay, let's set that to the side. If you're a venture capitalist, you typically raise a fund on a 10-year return cycle to your investors, and it typically takes about 3 years to invest that fund, and then you've got 7 years for it to pay out. So that's half the time of what it takes for drug development to go from idea or patent to approval.
That means one of two things. Either drug development companies have to figure out how to get to liquidity and generate a return to limited partners and VCs in half the time, or they need to reduce the time to approval by half. Neither of those are super practical if you're going to really focus exclusively on ensuring the science happens correctly. When we start talking to these early stage companies, they are very well-capitalized. Funding isn't a problem. They can go spend half a million dollars, in many cases on an enterprise-scale, existing incumbent solution.But they don't have the time to spend six months to a year to get a quality management system implemented, and then a RIM system, and then a CTMS and a TMF. Layer in all the acronyms, and that's just too much time to take out of a 7-year period. So where Kivo, I think, has been really attractive for those companies, is how rapidly we can move based on how we are architected, the validation services that come with the tool, et cetera, where they can pretty much sign a contract and be live same month, and continue to accelerate down that path.
Fundamentally, all of our customers are trying to get to one of three things. 1) Scale. Fnd a drug that works, and scale, and bring it to market. 2) Sell. Whether that is prior to approval, they've got something promising or not, sell the company, or 3) if it's a bust, divest the assets. So we've really centered a lot of our features around two things. One, supporting those outcomes for those companies so that they can align how they're spending dollars with us to what they need to tell their investors.That doesn't matter if this is boom or bust, we have a way to get you your money back. And then second, layering in tools, like you mentioned, collaboration to accelerate and increase the efficiency of how they actually run their operations.
All of that's done in the context of, these new emerging companies aren't bringing drugs to market with thousands of employees. They're doing it with at times a dozen or dozens. They're relying very heavily on outsourced partners, CROs, contractors, you name it. Those resources are coming and going, shifting in and out as trials, progress, and projects start and stop. Everything we've done is really basically taking a step back and saying, this is the world these companies live in. Let's build features on all of those interaction points to optimize handoffs versus optimize core features and sophistication and all the other enterprise-level features. What we found is that that's the perfect mix for an emerging, scaling, fast growing company. It lets them get into a system quickly, scale quickly, both in terms of people and process, and then have all their data organized when it's time to sell it to a Tier 1 company or divest it if the study wasn't successful. That's worked really well for us - to align to that core business model shift that's happening.
Don Davis: Given all of your experience with SaaS software as well, though, you have to also appreciate the perspective that they would have whenever they come to you. What are they experiencing at the point in time where they go, "What I really need is Kivo, and I should be talking to you guys"?
I typically describe this to people as if you were somebody that sold drills. You're not really selling drills in the SaaS software world. You're selling something that can actually create the hole. In the case of your customers, what's the hole? Or what's the gap that they're experiencing at that point in time that they really say, "I need a solution like Kivo"?
Toban Zolman: Great question. I really like how you framed that.
What we typically see is that there are two points where our customers realize we can't keep SharePoint-ing it out, doing a DIY-cobbled-together solution. It's usually they are reaching a point where the preclinical data indicates this is going to be promising. They've reached a funding threshold, early phase 1 result...something where they have to really lean in on the compliance side. And they know that no matter how many SOPs they write, if fundamentally they don't have a compliant solution to handle their process, they're risking their study. So we typically see a lot of conversations start from a compliance standpoint.
The other area is, I'll just say organizational chaos. There's a threshold that usually hits around a dozen people, 12 to 20, where you need some workflows and permissions and structure to what you're doing, and it still needs to be super flexible. It's not like everything is going to go through 14 layers of approval, but it needs a little bit of rigor. That's really where we get involved a lot. I would say most of our new customers range somewhere between 30 and 50 employees, maybe up to 250 if we're replacing an existing system. But when we're coming into a company that literally has nothing in place, it's usually very small handful, but they're super experienced and they know what's about to come, and so they're trying to get ahead of it. Or they've just straight-up broken because they've moved from the organizational scale where everyone knows everything and does everything to everyone knows everything but doesn't do everything.
That sort of inflection point usually triggers a system like ours. We also pick up a lot of customers a little bit further on. The phase I describe as "no one does everything and no one knows everything", [that happens] when you start to have departments form. That is a process inflection point that breaks whatever process or system you have. That's typically where we slot in at Kivo, is helping at one of those inflection points.
I've lived through both sides of this myself, inside of different organizations and on both sides of the fence. One was as a consultant, and then second as a full-time employee. And the scariest thing is, you start to get closer and closer to approval. These reviews with regulators become more and more serious and eventually can result - and I've seen it myself - where it's actually resulted in some sort of government audit for whatever regulators that you're dealing with around the world. The last thing I would think that anybody would want is to have to go chase all this stuff down in file boxes or, heaven forbid, virtual file systems that aren't very well-organized right during an audit. That would be terrifying for somebody!
Our system existed before the pandemic, but we essentially rearchitected and rebuilt that after the pandemic. During the pandemic, so much of those regulatory interactions - whether it's audits, TMF inspections, etc - all went virtual, a lot of existing systems weren't really set up to handle that. The way that those audits typically ran is you would bring the auditor inspector into a conference room that's comfortable, but not too comfortable and bring them a document at a time. That model doesn't work well in a virtual environment. So we literally built our solution ground up to support those virtual interactions, to really facilitate for the sponsor to get back in control of that process versus handing the keys to their document management system over to an inspector, or having to scramble around and figure out how to get every individual piece to them.
It's worked incredibly well. It shifts that power balance back to the sponsor and makes the auditor inspector feel like they're getting a full view of everything that's happening. There have been a lot of subtle evolutions in process and interaction, both between partners and sponsors and regulatory agencies, all of which dictate a new set of tools. That's really what we're out to solve.
Don Davis: Very good. Can you share a specific project or initiative that Kivo worked on that you're particularly proud of?
Toban Zolman: Yes. It's not a super dramatic thing. It doesn't sound super cool, but, man, has it been awesome. We've built a data migration engine.
Going back to what's the business model behind our customers... Emerging companies are constantly buying assets from other companies. They are needing to take documents and data from partners -stats, clinical trials, you name it - get into their system, and then divest assets. They get acquired. They need to go through diligence, you name it. We understood day one that we had to make Kivo so it could, in a very sophisticated and controlled way, get data in and out of the system. And so that's exactly what we built.
We haven't really relied on (although we support it) industry standards for documents and data transformation and transition, like EMS on TMFs and stuff like that. Instead, we just built what we had built in other industries to do large-scale data transformation projects. It's a fully controlled, wrapped in audit trail, wrapped in permission controls, way to map any data without losing anything.
We have a super flexible database that lets us store everything, literally everything, and at any point in the future promote that from data that's just in the database to something meaningful like metadata. That's really novel in drug development right now.
A lot of existing players - not trying to throw shade - but both sponsors and software developers have viewed owning and storing the data as a power move and have made it very challenging to get data in and out of systems. Coming into this from more of an enterprise SaaS worldview, we've taken the opposite view.
If we have a project and we need to transfer data into some competitor system, I pick up the phone and call ahead of engineering or product and get scolded! Like, "Hey, we don't talk to others about our data models". And I'm like, "Ours is public. You want to see how you get data in and out of Kivo, we're happy to share." I think what that's done is made us incredibly powerful in terms of offering a really great user experience for our users.
If they're pulling data in or even pushing it into a competitor system, they can do that quickly and seamlessly and in a controlled way that doesn't require a ton of process and migration plans and QC and all of that stuff. It just further aligns us to the needs of our customers, which is to get data in and out and be nimble as a company. Sell assets, buy assets, you name it. That's an area that I'm super proud of. I think we've got great tech. I think we've got a novel way of thinking about it, and are going to drag the rest of the industry along with us to collaborate more with how data moves from system to system.
Don Davis: Just in case anybody isn't aware of this, I really love your story because I got a call just last week where somebody had said, "I know you have a contact at this vendor, because we've talked to them before to try and get data from them, and this particular person was able to help where nobody else inside of the company really cared about what was going on with the client." And I said, "Yeah, I can remember and track down the contact information." So this story rings true, at least for me, in terms of this one particular project. I mean, this vendor just absolutely had no use for anybody in the outside world that wasn't a client of theirs or was somebody that was trying to even help a client of theirs use the information that they had collected and they more or less had locked it up. And it's like, okay, well, there are lots of other ways that I could try and get this. If I really need to, I can find a way to extract it. My challenge is that I'd like to not do that. I'd like them to just give me the data. It belongs to the client.
Anyway, this is a big deal, and congratulations for the team at Kivo for sort of thinking about it that way, that, why not be more open with the data side of it as well?
Toban Zolman: Well, one of the last projects I worked on before I shifted from Life Sciences into enterprise SaaS was a large data migration project that we did for a Tier 1 pharma company, basically moving document management systems, publishing systems, et cetera. It was a 3-year, $30 million project. Just soul crushing. If you go back to my thesis on where investment dollars are flowing in drug development, how quickly they need to get a return on that, how quickly you would need a deal, an acquisition to close and data to move around...A VC can't wait around for three years and drop another $30 million for data to get merged and a deal to close. So we got to pick up the pace on that sort of stuff. And we've tried to do that in a way where we don't need a whole lot of cooperation from other vendors to make it happen, but it's sure a lot more fun when we do.
Don Davis: There are a few questions about you that I'd like to ask. The first one is, what's the greatest leadership advice that you've ever received?
Toban Zolman: Well, I'll give you two. I think one, I apply for myself a lot. The other is part of how we make decisions at Kivo.
The first one being, if you're the smartest person in the room, you're in the wrong room. That's how I've tried to make career decisions for myself. Constantly looking for situations where the folks around me really stretch my capabilities. I feel very fortunate because when I've got meetings in Kivo, I'm never the smartest person in the room. And that is a blast to be part of. We've got a fantastic team.
The other piece that I would gravitate to is "know your no".
Steve Jobs and others have talked a ton about how powerful saying no is. From a product management perspective, your job is to say no, not yes. For Kivo, we think about "know your no" in a few different contexts. Certainly from a product standpoint. For us to be fast moving and nimble and adaptable to customers as they grow, we can't bloat the software with every feature request we get. We have to be really intentional about building capabilities that can be configured into features versus just carpet-bombing everybody with bespoke features all day long that we then can't maintain over time. But also think just in terms of how we run the company, there are areas that we were super intentional about from day one, like pricing transparency.
First meeting you have with us, we'll tell you exactly what you're going to pay for the next three years. How we price, we charge on one dimension, period. We're not nickel-and-dime people. There are opportunities to make more money, upsell, upcharge, you got to pay to talk to us, pay to issue a support ticket...you name it. But we know our no. We know that we're going to say no to things that align our incentives in a way that is counter to our customers' incentives. We want to grow because our customers are growing. We want our customers to grow based on the features we're building.
We say no a lot. We've said no to more investment money. We've said no to big deals that would totally shift our focus as a company. We've said no to features that we don't think add capabilities, but instead just solve one customer's problems. I think that's important from a leadership standpoint. That's what I focus on a lot. Know your no, and stick to it. That really orients the entire organization to what problems you're solving and why, and aligns everything you're doing.
Don Davis: It takes quite a bit of introspection about where those boundaries are, I would imagine, before the situation happens as well, because oftentimes dangling a carrot, any sort of, "hey, here's the big deal. But honestly, this isn't where we were expecting to go", is something that would take an awful lot of "here are the boundaries of where my "no" is" as well, I would imagine.
Toban Zolman: Yes. The one thing I would say both myself and several of the other core leaders in Kivo - we have all spanned half a dozen different markets in our careers, and done that across probably more companies than any of us would like to think about. What that's done for us, though, I think, is created really strong pattern recognition, where it doesn't matter if this is a DevOps solution or a regulatory solution or a social media solution, we've done them all. At the end of the day, it's the same sorts of decisions that lead you astray, it's the same funding decisions. Like, okay, we're going to take this money, but if we do, the company is worthless until we get a billion data points or 200,000 users, and then we can monetize that in some other way. Our focus from day one has been to build a real product that brings real value to real customers. And if we stick in those three areas, only good things will come.
We may not have rocketship growth every quarter following that approach, but we're building a really sustainable business that we control and we can make the decisions that are really in the best interest of our customers - and ultimately us - to driving long-term growth. For me, that's super critical. I have no interest in running a company that's a pump-and-dump scheme or is funded by insane amount of venture capital money that this thing has to go public or is pointless.
We've got great investors, great leadership, and a really strong path to say no to the right things and build a real company with real value. It's fun.
Don Davis: Thank you for that. What inspires you?
Toban Zolman: This is probably a cheesy response, but I'll say it anyway...what inspires me the most right now is our customers. Because we're working with these scaling companies, it's not like we are interacting with a soulless multinational company. Not that all multinational companies are soulless, but we're working with founders and leaders that believe in what they believe in, the science, and that's why they are there.
For example, we have a company that is focused exclusively on rare childhood diseases. Their first patient was the founder's child. They funded the company through golf tournaments and bake sales and car washes, and raised four and a half million dollars for their first trial. That's really freaking cool to be part of.
We have companies that have raised a quarter of a billion dollars as well. But my God, are they working on some really cool drugs that are going to fundamentally change a host of diseases. Stuff that I get really excited about is the first time we meet with one of these companies, and whether they're three people or 300 people, chances are I haven't heard of them and chances are they're working on something really incredible that is super fun to learn about, see their passion come through, get excited about. It's something internally at Kivo, when we have all hands meetings and share what our customers are up to...It's just really rewarding to see that level of work and passion. And I didn't get that, to be honest, working in windowless conference rooms on multi-country regulatory strategy. That's also a skill set that's interesting, but this is an area that I'm super passionate about and love it.
Don Davis: Absolutely. What concerns you?
Toban Zolman: I don't know if I would frame it as concern...maybe it intimidates me. I'm not alone with this, but I think it's AI.
If you look at how AI is going to intersect with drug development...man, is it fascinating and transformational, especially when you think about it from a preclinical standpoint where you can have AI identifying promising compounds or drugs and spitting out in a matter of hours, days, weeks - whatever it is -thousands of candidate drugs that you can then iterate through. That tsunami is coming.
I think people intellectually get it, but the practical pieces of how many submissions that's going to yield in five years to the FDA...how the heck are they going to scale to support that? How are software vendors going to support that scale? How are Life Science companies going to reformulate their process, their funding model?
If you look at headcount and where that exists in the Life Science company, that's going to have to change once you've got AI involved in the drug development process and potentially involved in the clinical trial and regulatory process. I'm super intrigued by how that's going to shake out. I'm fascinated by work we're doing to support those use cases directly in our platform. I think everything that's happened over the last 30 years in drug development has been an important but steady evolution. And this is just going to be a tsunami that fundamentally changes how this industry works and is funded. It's going to be a bloodbath and it's going to be fascinating.
Don Davis: To go from concern to bloodbath to fascinating is a good leap for me to go to the next question as well. Last question, what excites you?
Toban Zolman: Well, it's maybe the other side of that coin, right? What I've enjoyed the most in my career is probably being in nascent industries where there is true transformation, where there are jobs that didn't exist 18 months ago that are now a required part of every company...fundamental shifts in how things are developed. We saw this 15 years ago with the transition to agile software development and the introduction of DevOps and continuous deployment, and [Cloud] just fundamentally changed how software gets built and delivered. It created a whole new industry of solutions that needed to exist.
That's really exciting work to be part of. And to my point with AI, then you layer in some of these VC models that are happening and just generally how this industry is starting to move...It just, man, this feels so much like the momentum and vibe that I felt outside of Life Sciences through those really transformational moments. That really excites me. Existing approaches, existing process, existing tools, jobs, corporate structures, all of that is going to be turned on its head in the next 5-ish years and it's going to happen at an accelerating pace that many people are not prepared for. Man, it's going to be cool. I'm really excited about how all of that aligns with the tech and market movements and AI and just everything kind of layering in just at the right time to drive that. It is a very exciting time from a technology perspective.
In terms of the science perspective, it's very exciting as well. I mean, you think about CRISPR and some of the things that that promising technology also will continue to deliver throughout our lifetime...I'm amazed. I'm thankful that I'm alive at this point in time and able to live through this portion of the transformation.
Don Davis: Well, Toban Zolman, thank you so much for being on the Life Science Success podcast. Thank you for sharing everything about Kivo and the things that are going on there. I wish you all the success in the future and thanks a lot.
Toban Zolman: Thank you. I had a great time. I appreciate it.
