Qiuyan Xu PhD is a statistician, an entrepreneur and a colleague at Walnut. We talked about the startups she has invested in, her immigrant journey and the work she does at Gravitate AI.
Highlights:
Sal Daher Introduces Qiuyan Xu, PhD, Statistician, Entrepreneur and Angel Investor
Qiuyan Xu Talks About Her Investment in AOA Diagnostics
Qiuyan Xu Talks About Her Investment in Octagon Therapeutics
What Sal Daher Looks for in an Academic Founder
Qiuyan Xu Wonders About the Long Holds in Life Science Investments
“It's an important thing to remember now that the early-stage, angel-scale life science investing is really, really just beginning to take off.”
“There are some angels who have done very successfully, with just a handful of companies.”
“Weeding out the obvious losers. I think it makes a lot of sense.”
We Still Know Surprisingly Little in the Life Sciences
Qiuyan Xu Came to the US in 2003 to Study Statistics at UC Davis
“...I got my PhD in 2008, in statistics, in the middle of a recession.”
What Drove Qiuyan Xu to Become an Entrepreneur
Qiuyan Xu’s Company Is Gravitate AI (https://www.gravitate.ai/)
Gravitate AI Helps with Data Cleaning & Automation as Well as Customizing Open-Source AI Solutions
How Qiuyan Xu Became an Angel Investor
Contagious Enthusiasm
Qiuyan Xu’s Advice to Angel Investors
“You're urging angels to step right in, but at the same time, exercise control and have a budget.”
Advice to Founders
ANGEL INVEST BOSTON IS SPONSORED BY:
Transcript of “Gravitate AI”
Guest: Qiuyan Xu, PhD,
Sal Daher: I'm really proud to say that the Angel Invest Boston podcast is sponsored by Purdue University entrepreneurship and Peter Fasse, patent attorney at Fish & Richardson. Purdue is exceptional in its support of its faculty, faculty of its top five engineering school, in helping them get their technology from the lab out to the market, out to industry, out to the clinic.
Peter Fasse is also a great support to entrepreneurs. He is a patent attorney specializing in microfluidics and has been tremendously helpful to some of the startups in which I'm involved, including a startup, came out of Purdue, Savran Technologies. I'm proud to have these two sponsors for my podcast.
Sal Daher Introduces Qiuyan Xu, Entrepreneur and Angel Investor
Sal Daher: Welcome to Angel Invest Boston, conversations with Boston's most interesting angels and founders. Today, we have the privilege of having with us a very special angel, a colleague at Walnut and at TBD Angels, Qiuyan Xu. Say hi, Qiuyan.
Qiuyan Xu: Hi, Sal. Thank you for having me. Good afternoon.
Sal Daher: Qiuyan is someone that everybody at Walnut really, really enjoys working with. Her background is mathematics and statistics. She is an entrepreneur. She has a company that provides services in the data science area, and she is also a very interesting angel investor. We're going to talk a little bit about angel investing and then we'll talk about your entrepreneurial journey that led you to angel investing. Then I'm going to ask you about my hobby horse, which is, how can we promote more investment in the life sciences?
Qiuyan Xu: Yes. Okay.
Sal Daher: What startups are you excited about?
Qiuyan Xu: I started to invest in different kind of startups. Not a lot. I'm very new on this journey, but recently, I'm more interested in life science side. Last year, my investments are all on the life science side.
Qiuyan Xu Talks About Her Investment in AOA Diagnostics
Sal Daher: Excellent. Excellent. I understand that you are an investor in AOA Diagnostics?
Qiuyan Xu: That's correct. Yes.
Sal Daher: Tell us what you saw in AOA and Oriana Papin-Zoghbi, the CEO.
Qiuyan Xu: Yes. I was really impressed. AOA was one of the companies in Walnut when I did the due diligence with Michael Mark. We brought her into Walnut, and I was really impressed. The number one is by the technology itself. The cause behind what is driving Oriana doing this work. I do know a friend who suffered ovarian cancer, or at least scared of. Actually, sorry, let me correct myself. Was like elaborated the process that had a big scare and ended not having that.
Sal Daher: What a relief. Yes.
Qiuyan Xu: I know. I know. What Oriana spoke to us really resonated. I think it's that just the team had that passion, and also being able to clearly articulate the problem, also providing a solution. It speaks to the quality of the team. I think that's really part of the why I got really convinced. A lot is about the team. Definitely, the industry itself, being in Boston, I think it being in Boston life science and technology is a big part of it. Also, impressed by the founders. I'll say the additional reason is that investing in women-led-
[laughter]
Qiuyan Xu: - companies. Also, that's another part of, yes, so another reason, but yes, to that.
Sal Daher: Well, Oriana has been on the podcast. She presents extremely well. I remember her pitch at Walnut. All the other people who pitched that day, and there were some interesting companies pitching at the same time. They just looked gray next to her because she's just such an amazing presence. She's worked in the life sciences in business development. She really understands the business, she knows how things get done.
She did a very purposeful search for a technology that would allow them to detect early on some markers for ovarian cancer in the blood because ovarian cancer, I guess, is very hard to distinguish. The symptoms of ovarian cancer frequently get confused with other things. By the time that physician is suspicious enough to do a biopsy and so forth, it's usually stage three or stage four. Very late-stage cancer.
Qiuyan Xu: Right, very scary. Yes, that's very scary. Very scary.
Sal Daher: Yes, very scary. They get diagnosed very late and kills. They call it the silent killer because by the time they discover, very, very little can be done.
Qiuyan Xu: Right. Yes.
Sal Daher: Yes, no, no. It's really encouraging because usually, the life science companies that I see is an academic founder who has the technology that the academic founder is taking out to the clinic, taking out to market, but in her case, she and her co-founders did a very thorough search and were able to identify both the problem and also a solution that looks very promising. I'm also an investor via TBD [Angels].
Qiuyan Xu Talks About Her Investment in Octagon Therapeutics
Qiuyan Xu: Oh, okay, great. Yes. [chuckles] Great. Yes. No, I think that's part of also linked to another similar aspect of the other investment I did last year. It's called Octagon. They've done in the immune system side of the drugs. The part that I think the similarity, as you said, is that the founder has experience in this area and also on the business side. Not just a pure academic, not that I'm having negative views on academic side. Of course, a lot of these are built on those research foundation.
I think, as an investor, especially myself, it's pretty early in this investment journey, that without knowing a lot of these actual domain knowledge in life science, it is comforting to know that the founder and the team knows the business side as well as the technology side.
Sal Daher: Interesting. Yes, there pros and cons to the two approaches. The academic founder, a strength there, is that the academic founder has domain knowledge and a lot of these projects, a lot of it is just science. Getting enough samples, setting up a lab with the right kind of certification. It's the kind of thing that scientists, if they're high-functioning, if they have good executive function, it actually plays to their strengths. The downside is that an academic founder is limited to her or his technology. Whereas what Oriana did, it is more costly because you have to bring in the intellectual property of the scientific side of things.
They have to license the technology from outside. They didn't have a built-in situation, which is usually what academic founders have. The universities are frequently helpful in getting the stuff out. You don't have the same advantage of having the technology built in for free. You get the founder, you get the technology, but you get to choose which technology to use. Then, you have a lower chance of being stuck with the wrong technology. Riding the wrong horse. Which can-
Qiuyan Xu: Which happens.
What Sal Daher Looks for in an Academic Founder
Sal Daher: - frequently happen. What I like to look for when I'm looking at academic founders, I look for how willing to learn they are. How coachable.
Qiuyan Xu: Right.
Sal Daher: Because they're going to have to learn a lot mundane stuff, but they got to need to learn how to do business.
Qiuyan Xu: Would you say that if the academic founder has a partner on the business side, will significantly transcend the aspect of the startup?
Sal Daher: That could be a very interesting situation. Really, tell me about Octagon.
Qiuyan Xu: Yes. Octagon is a company that provide autoimmune disease drugs. Again, it's also very challenging area. The founder, Isaac Stoner, who also is very experienced, this is not his first company, he has successfully built life science companies before.
Sal Daher: Huge advantage. A huge advantage. Yes.
Qiuyan Xu: Yes, it's definitely that serial entrepreneur, so I think with a success background track record is an advantage. Now, they have again picked the area that is an area really very hard, but with a lot of opportunity. This is where my limited domain knowledge comes in. That my understanding is that current, most of the drugs, they come in only when an autoimmune system symptom flares. When things go really bad, then the drug comes in and try to push it down, to reduce those symptoms. Then when that symptom comes down, the drug still lingers there.
It's like a whack-a-mole, and to be able to really precisely target those, that require a lot more science and the new innovations and discoveries. I think that's part of the whole of how their product is, is positioned. I definitely like the team. Similarly, like the AOA team, that the team is very well, and I think they understand the situation well, they understand the technology well, they understand the market well, and then they were able to present to the investors very clearly, all of these different aspects.
Sal Daher: Excellent. Excellent. Where did you see them?
Qiuyan Xu: Also, from Walnut. [chuckles] AOA, I actually end up investors through TBD Angels.
Sal Daher: Right. Somehow, I missed it. I must have missed the meeting. Sounds like a very interesting company. I like the fact that the founder is a returning founder. That is usually has had successful exits before. At what stage are they? What are they doing?
Qiuyan Xu Wonders About the Long Holds in Life Science Investments
Qiuyan Xu: They're pre-Series A. They've gone through, I think, a couple of rounds of seed round. They're looking for a Series A round at this point, if I recall correctly, of the last communication. Yes. I do have a question, Sal, for you because being newer angel, one of my concerns on the life science side, even though I'm super interested in companies is that there seems to be a pretty long cycle in these investments. When you're asking this question, one thing I'm thinking about is, what do you think for a life science company investment?
Sal Daher: I have two thoughts on this. This is something that's frequently brought up. Life science companies are thought it's going to be a long hold. Yes and no. I can think of a life science company I invested in 12 years ago, Gelesis, for example, where now I have a liquidity event, versus one company that I could have invested back in 2015 and they exited in 2017. This is Quad Technologies. It does happen. It really is luck of the draw. More recently, I invested in 2014, I invested in Mavrck and they exited in 2022. That's a software company.
That was almost a seven-year-old, six-year something old. Those rules are not hard and fast. The other thing that we should keep in mind is that if the company is doing things well, they will build value. If you have a strong intellectual property portfolio, you get paid to wait. It takes a long time, but the company can build a lot of value in that time. The market is restricted. They're the only ones that can practice those. The technology, or the patents that they have. I don't think that that is an insurmountable obstacle.
It also goes to your screen, to what kind of companies are you looking for? If you're looking for a company that's going to build a business from scratch, building a business in life sciences takes a long time. I like to look for companies that have a technology that is enabling of existing players in the market. One of my favorites is Savran Technologies, which is also a Walnut company. I don't know if you saw them there.
Savran is an enabling technology in a sense that if you are someone that is doing non-invasive prenatal testing right now, and you're taking fragments of DNA in maternal blood and doing calculations and so forth, you're limited to how much coverage you can get of conditions and so forth. Now, if you're able to capture individual cells for the fetus, in a maternal blood, you can get the entire genome of the fetus.
Qiuyan Xu: Interesting. Okay.
Sal Daher: Naturally, there's going to be an interest on the part of strategic players to pursue very closely a company that has a technology that can differentiate them from everybody else. The existing technology, the circulating DNA technology that exists right now is not proprietary. It's open source. What they're getting paid is going down and down and down. It used to be $1,500, then it was 900, now it's-- Then it's 350. Whereas if you have a proprietary technology that has full coverage, full coverage of the genome, that could be really valuable.
An enabling technology, somebody who removes a bottleneck for a strategic player. That's something that I really like to look for, and that could potentially shorten the investment cycle.
Qiuyan Xu: I can see that also they don't have to prove the market from the very-- It's already existing chain market there that the opportunity is there.
Sal Daher: Right. If you can strike a deal with an incumbent that already has a significant market share, and you can help the incumbent substitute the existing technology for the new technology. The incumbent has a market position. As opposed to you trying to build the business from scratch, and try to convince people that right there, that's just five years down the drain before anybody pays any attention to you.
Qiuyan Xu: Yes. Convince the market as well as I would assume that in this area, convincing the regulators even, right?
Sal Daher: Well, yes. That's even further.
Qiuyan Xu: [laughs] Okay. Yes.
Sal Daher: That's the other thing. If your technology is very interesting to an existing player, they are much more familiar with the regulatory pathways. It makes sense for you to have a strategy for FDA approval or for starting FDA trials and all that, but a startup should not be expecting to do FDA approval. Unless it's a very, very, very straightforward thing, and even then, it can be daunting. Okay?
Qiuyan Xu: Right. Okay.
Sal Daher: I've seen startups think that they can do it because it's already a well-known product, blah, blah, blah. It's harder than it looks. I like the idea that the startup already has in mind, if they already, in their heads, that a strategic is the one that's going to do the FDA heavy lifting. That's more realistic.
Qiuyan Xu: All right. Yes. That's definitely a lot of learning for me as well as investing in this area.
“It's an important thing to remember now that the early-stage angel-scale life science investing is really, really just beginning to take off.”
Sal Daher: It's an important thing to remember now that the early-stage angel-scale life science investing is really, really just beginning to take off. What's happened is that the VCs have left the field. The VCs are going in the direction of creating their own founded entities. I discovered this from conversations I had with Jeff Behrens, who was an exited CEO of a life science company. He tried to raise money from VCs, and he couldn't, and he knew a lot of VCs, and they finally told him, "Look, we don't do this anymore."
Qiuyan Xu: Okay. When you say that these VCs are mainly here in the Boston area, or you are seeing this from a countrywide perspective?
Sal Daher: The leading VCs in biotech, such as Flagship Pioneering. Flagship Pioneering are the people who backed Moderna. They really put themselves on the map with that, Third Rock. Also, here in New York, those people are leading the trend in the life sciences, and the trend there is towards created entities. They create their own startup and they shop for the technology, they shop for the founders, they do all that, and they create within the venture firm. Because that allows them to do moonshots, allows them to do the whole thing optimally, instead of training an academic founder, they think looking at the tremendous success of Moderna, they're going in that direction.
What that means is, it leaves these small-scale VCs who are just overwhelmed with opportunities, and it leaves the angels. I think there are tons and tons and tons of really interesting companies. The challenge is, how do you do the due diligence of those companies? Because it requires a certain amount of specialization. How do you follow them? I think that part of the answer is investing in fewer companies.
Qiuyan Xu: In fewer companies.
Sal Daher: Yes. Fewer companies, but deeper and longer with more sustained investment over several rounds.
Qiuyan Xu: That's interesting to me because I've been thinking how to really build my portfolio from a longer-term perspective. There are a couple of things. Number one is I need to decide if I want to just focus on life science companies, which I'm very interested. However, I don't really know the areas, the specialization piece very well, or do I want to also diversify on maybe some of other companies. That's one thing. The other thing is that one of the, I guess one of the-- Not lesson, I would say, or my thoughts after the three or four years is it seems like we need to build a portfolio. Unless we really know how to pick the winners, it's very hard.
“There are some angels who have done very successfully, just a handful of companies.”
Sal Daher: No, no, no. Yes. There are some angels who have done very successfully, just a handful of companies. People who come to mind, Frank Ferguson. You knew Frank when he was alive. He was an amazing guy. I don't think he invested in more than a dozen companies, and he had massive successes. One of them was Bose. He happened to live down the street from Amar Bose. He was an early investor in Bose. Bose, the sound giant. He was an investor. He invested in a company called Curriculum Associates.
Qiuyan Xu: Which one?
Sal Daher: Curriculum Associates. He was an early investor in Curriculum Associates. Then the company had needed executive talent, so he quit. He was president of Bose, he quit Bose, and he stepped into Curriculum Associates. Curriculum Associates, the company, because what they did is, remember those card files that you had-- I don't know, you studied in China, but American kids, in high school or junior high school, there was this differentiated learning.
You could have, depending on how far along you were, there were these card files along the side of your classroom that you could go and pull out a reading section, and then you answered questions and then depending on how you did on the multiple-choice, that you could go on to read more advanced. They were very colorful. They had a whole range of colors and so forth. That was Curriculum Associates. Early individualized learning approach. He built that into a very successful company. I don't think he invested in more than a dozen companies. He was a very deep investor.
Another one is Jeff Arnold. I think he invests in one company a year. That's one model. The other model is the one that says that you need at least 20 companies really to have enough exposure so that you don't have these adverse events like you invest in three companies and they all go to zero.
Qiuyan Xu: Never happen to me. [chuckles] That's somewhere I feel like I think that for my journey after-- I've been in this for about three or four years, maybe now four or five. I think the pandemic is taking time away. I feel like the first stage, for me, is to know what kind of company I don't want to invest. I almost learned my lesson, that now I do know, I think, that a company comes in, I would just say, "No, I don't really want to do that."
I don't have the confidence to say to myself, to say, "I know this is a company I should do a longer and deeper kind of investment." Or to pick those winners. I just don't feel like I have that capability to pick winners. I'm building the capability to weed out the losers, but then, no, I-
Sal Daher: The negative selection.
Qiuyan Xu: Negative selection.
“Weeding out the obvious losers. I think it makes a lot of sense.”
Sal Daher: Weeding out the obvious losers. I think it makes a lot of sense. The thing is, with life sciences, you look at it and say, "Oh, I have no chance because this stuff is so complex." Well, it is complex for everyone.
Qiuyan Xu: Okay.
Sal Daher: Qiuyan, even people who are in the life sciences. If you are in a slightly different field, then it takes a lot of effort to even read the papers. It's not like physics, it's not like chemistry, where there are overarching principles. Especially mathematics.
Qiuyan Xu: That's true.
Sal Daher: Theorems and everything. The theories really well developed.
Qiuyan Xu: Life science, yes. A lot of details. Right? A lot of details.
Sal Daher: Everything is in the details.
Qiuyan Xu: Yes. A lot of details.
We Still Know Surprisingly Little in the Life Sciences
Sal Daher: These are evolved systems that are highly complex, they're over-determined, lots of different things doing similar things, and it's difficult to understand. The thing that strikes me, for example, in your lifetime, in our lifetime, they did not understand peptic ulcers.
Qiuyan Xu: What? The what?
Sal Daher: I think you were already born when they discovered that peptic ulcers are caused by bacteria. Bacteria that is resident in the gut of chickens. That's what was causing people to have ulcers. It was treatable with antibiotics, and also with coating stuff to coat the ulcer. In the middle of 2020, we discovered that a fifth salivary gland in the head. We thought we had four salivary glands, and in the middle of COVID, a fifth salivary gland was discovered.
Qiuyan Xu: Wow. Okay. I did not know that.
Sal Daher: Anatomy is one of the oldest parts of medicine. That's how medicine really, really going.
Qiuyan Xu: Wow.
Sal Daher: It was doing dissections and so forth in the Middle Ages, gruesome dissections, and they didn't know there was this fifth salivary gland in the head.
Qiuyan Xu: What? Okay. [laughs] That's amazing.
Sal Daher: It was still the frontier. Physics and all sorts of other areas we're much, much more advanced. That's the thing. It is very complicated, but it pays to come up to speed because it's so consequential and everyone has to come up to speed a little bit, to a certain extent. Even if you have been working in a slightly adjacent area. Don't be intimidated. You can look through the keyhole and learn a lot about that space. Then you need to learn about the economics of the market where the technology could be of interest. Anyway, that's my thought there.
Qiuyan Xu: Oh, actually, my first real job was at Pfizer Oncology R&D.
Sal Daher: Oh, wow.
Qiuyan Xu: [chuckles] Very short period I was a contractor as a preclinical statistician, but definitely, it was really very eye-opening to see on those oncology side of the development.
Sal Daher: Yes, it is. Well, I thought perhaps we could do a little bit more biography. How you came to your entrepreneurial-- Well, first your immigrant adventure. You came to the US in 2003?
Qiuyan Xu Came to the US in 2003 to Study Statistics at UC Davis
Qiuyan Xu: That's correct. Yes, 2003. Yes, from China. I came here to pursue my graduate degree. I got my PhD in statistics in UC Davis, on the other side of the country. Yes, it was definitely very exciting and interesting time. It's... I just wanted to see something new, it's just that sense of exploration from both life and profession perspective.
Sal Daher: That is tremendous. You got your PhD in-- Was it 2008?
“...I got my PhD in 2008, in statistics, in the middle of recession.”
Qiuyan Xu: Yes, I got my PhD in 2008, in statistics, in the middle of recession. That's right. [laughs] Yes, actually, I started-- A lot of my colleague at that point in the statistic department actually were in biostatistics, so a lot of my colleagues actually went to life science afterwards, and pharmaceutical industry. I started my intra at the Lawrence Berkeley National Lab, on genetics side. Genome sequencing. 2008, when I got my degree, my husband was teaching in Taiwan National University, so I made a decision to go to Taiwan to join him with our young daughter at that point. That was another very interesting journey because I grew up in China, so it was very, very interesting. [laughs]
Sal Daher: It's interesting that your doctoral thesis was high frequency trading. In 2008, maybe going to Wall Street was not necessarily an option.
Qiuyan Xu: No.
[laughter]
Sal Daher: It was a total meltdown.
Qiuyan Xu: Yes. That's talking about picking the right investment topics, but yes. I pursued the financial side as the specialty in statistics and actually went through all the CFA exams. I did not have the credential.
Sal Daher: You did the CFA curriculum?
Qiuyan Xu: Yes, I did all of them.
Sal Daher: Right. No, but I was talking about your doctoral work, your dissertation on high frequency trading.
Qiuyan Xu: Yes, that's correct. I did the CFA to making sure I have the enough of domain knowledge for my PhD. No, that's a very bad timing at that point. 2009, we decided as a family to come back to the US. That's actually when I got the job from Pfizer side in San Diego for a R&D researcher on the preclinical side. That's one of their five R&D center[s]. The center in La Jolla, San Diego, is oncology. Genome and sequencing side of things.
Sal Daher: It's interesting. I'm an investor in a preclinical technology company, RockStep Solutions. They have a SaaS platform to help with preclinical trials. Did you see them at Walnut?
Qiuyan Xu: No, I don't think so.
Sal Daher: If I'd known that you had experience in preclinical work, I would have reached out to you.
Qiuyan Xu: Interesting.
Sal Daher: You worked Pfizer, and then you got into-
Qiuyan Xu: Insurance.
Sal Daher: - insurance. Statistician, the skill is highly transferable.
Qiuyan Xu: Yes. Most of my degree work was more on the finance side. Pfizer was a very interesting, great company as well. Great team, but at that point, there was a big merger. It was Pfizer and-- What was that? It was a very big merger in the pharmaceutical industry. There was a lot of-- I was a contractor at that point. Travelers offered me a job on the East Coast. I remember those interviews. After that, I went back to San Diego and I was telling my mother at that point, "Oh, my God." It was November, I think. Maybe even October. I'm like, "The wind just pierces through from my head."
Sal Daher: I know. I know.
Qiuyan Xu: From one ear through the other. I said, "No, I'm not going to move to the East Coast." But you know what? The next day we're here, [laughs] and we loved it. We loved it. My husband, the whole family, we love this area.
Sal Daher: I like this area. I've been to San Diego. It's just a gorgeous place.
Qiuyan Xu: It is. It is a gorgeous place.
Sal Daher: I have family here and so many friends and all this stuff.
Qiuyan Xu: Very different. Yes.
Sal Daher: I appreciate the weather. Then when we get a nice day like today, today is sunny. A sunny, almost spring day, makes you think, "Oh, it's okay. It's okay." Anyway, I'm curious to know how you got onto the entrepreneurial bent. How you decided to have your own company.
What Drove Qiuyan Xu to Become an Entrepreneur
Qiuyan Xu: For working for the larger companies, I think it's interesting, and there's a lot of learning. What really made me to-- Helped me on my journey is that I always want to learn new things. That learning aspect, that I also like to learn quite fast and a lot. In the big companies, there are these opportunities, but I do feel it's just not enough for me. It was just not enough on the speed side, especially. I have friends that perfectly happy in that environment. It's just not me. I just like to see new things and then try new things.
That's how I started to get on the startup side. I think it's the same drive that bring me to start my own business as well. Just explore new opportunities and also have a sense of driving things more.
Sal Daher: Yes. I was business partners with Robert P. Smith, who was a born entrepreneur. He wasn't cut out for being somebody's employee. He was not a good employee. He was too independent.
[laughter]
Qiuyan Xu: Not getting by.
Sal Daher: Couldn't follow instructions.
Qiuyan Xu: I was a good employee. Okay?
Sal Daher: Oh, no, no, no, but my partner, Bob, was one of the worst employees because he never did what he was told. He always argued. He started, "No, why that? No, that's doesn't make any sense to me." It's got be like so independent-minded. The guy was impossible, but as an entrepreneur, he was brilliant. There are certain people who are not cut out at all for being a good employee. I'm sure you were a tremendous employee, but you were more at home being on your own.
Some people are not even cut out to be employees. They're unemployable. They have to go and create their own business because they're so independent-minded. Bob was like that. It a great gift because he saw things other people didn't see.
Qiuyan Xu: Right. I think problems that urge. Then also, I think also my domain, I'm in data science, AI. That domain is just developing so fast in the past 10 years. I just feel like I don't want to miss out of the new cutting-edge technologies, all those possible applications. That's part of it. Then my kids were a little bit older at that point, so I was able to-- Yes. That's definitely part of another parameter or element need to be considered in this equation.
Sal Daher: The business that you're doing, so basically, you're providing data science, the AI services to various types of companies?
Qiuyan Xu’s Company Is Gravitate AI (https://www.gravitate.ai/)
Qiuyan Xu: That's right. Yes. Today, our main business is service, providing service on data pipeline automation. A lot of getting data, clean them, automate them, database solutions that supports our client's products. That's one part, and more on data engineering side. The other part of service is to build the algorithms themselves. Like natural language processing algorithms, like the chatbot, or question-answer system, or image recognition systems that can differentiate different things in different domains.
A lot of them have open-source solutions, but they cannot really be used in-- You can set them up quickly, some of these open-source solutions, but they don't really customize to most of these domains that our customers are in. We provide the service to customize that and really bring that to the next level.
Sal Daher: The additional 10% that you get through customization, which makes the whole difference.
Qiuyan Xu: It makes a huge difference, especially in business. It has to be a business solution that really works for their end-users.
How Qiuyan Xu Became an Angel Investor
Sal Daher: Let's talk about what prompted you to make your first angel investment. What happened?
Qiuyan Xu: I have a friend, so Simon Cui, I don't know if you met him. He's also a Walnut member, but he had been traveling more so, he did not come to the last few.
Sal Daher: I think I've met him in a couple of meetings.
Qiuyan Xu: Okay. That's how I started. I know him for a long time. He owns a very successful international oceanic shipping, and actually, multichannel, all of the shipping stuff. He was actually the person first got interested in this angel investment. Then, I started to work with him on like-- Also being both we're immigrants. We don't really know as many people in the area, at that point, so we tag teamed on that. That's how I got actually into this area. Then gradually, I start to view my own interests as well. That thinking about what exactly I want to invest in as an individual as well.
Sal Daher: Do you want to talk about the company that you're invested in?
Qiuyan Xu: The companies that—
Sal Daher: Yes, your first investment.
Qiuyan Xu: The first investment was one I did with Simon, it's Blur. It's also coming into Walnut as well.
Sal Daher: What is it called?
Qiuyan Xu: Blur, I think. B-L-U-R. It's a mobile application that geofences and then sends alerts to the users when they're in, let's say, a sports venue.
Sal Daher: Okay. B-L-U-R. Blur.
Qiuyan Xu: Yes. B-L-U-R. Yes. I think they're Northwestern students at that point. The founders were.
Sal Daher: What drew you to the company?
Contagious Enthusiasm
Qiuyan Xu: How did we get connected? That was our very first investment that I was involved. We were connected-- What drew us, eventually, was the team. At that point, we were very new in investment, and I was certainly that's very, very new. I think that the passion coming from the founding team, at that point, of the young entrepreneur, from college, hasn't even graduated. How they pursue all of these things they want to do. I think that passion really get me in. [laughs]
Sal Daher: It's very contagious.
Qiuyan Xu: It's very contagious.
Sal Daher: You see these young people with all this enthusiasm, you get caught up in the enthusiasm.
Qiuyan Xu: Right. You do. You do. I think some love. Then I'm a little bit less getting caught up now. [laughs] Yes, definitely.
Sal Daher: Very interesting. Qiuyan, let's think a little bit about what sort of advice. What kind of things would you like to communicate to our listeners who are founders, people who work at startups, angel investors, people thinking of becoming angels, people thinking of becoming founders, are there any parting thoughts that you want to leave them with that we haven't covered?
Qiuyan Xu’s Advice to Angel Investors
Qiuyan Xu: Yes, sure. I will first talk about angel investors and then maybe speak to those getting start-- Think about they want to get started, since myself went through that journey. I think my two cents on that is, number one, is that if you're interested, try. Learn about it, but also do try, because I think a lot of learning, I felt, is really coming from the actual deals that I did. That I did the preparation, I read stuff, but a lot of the learning really has to come through practice itself. I do think that that's one thing.
Now, I think the other thing is maybe talking about, at least from my myself, I have a limited budget for angel investments since I also need operating cash for running my business. Then I think, do think about, how do we want to do this also more from a rigorous perspective. I'm a math person.
[laughter]
Qiuyan Xu: I would love to invest with unlimited capital. That would be great, but I think [unintelligible 00:43:04]. I do think it's good to think about the goal, what's the budget of the year, and is that something that I would be able to allocate while I still satisfy my other cash needs and all of that? I start to think about also consider that as a holistic investment side of things. Consider the other investments I have because this is definitely very risky. Just that portfolio management kind of personal portfolio management view on that instead of having, as I said, at the beginning, get caught in the passion. [chuckles] Right?
Sal Daher: Right. It's very easy to do. Very, very easy to do.
Qiuyan Xu: Yes. I think just balance that urge. I'm almost giving conflicting thoughts here. Try something, but then also balance that urge on doing investment as more as a thoughtful approach.
“You're urging angels to step right in, but at the same time, exercise control and have a budget.”
Sal Daher: Okay. You're urging angels to step right in, but at the same time, exercise control and have a budget.
Qiuyan Xu: Okay, I'll boil down to that. Don't do too large of investment on your first one.
Sal Daher: Right. Yes, that's the usual. Start slow, start small.
Qiuyan Xu: Yes.
Sal Daher: But do start because you will learn a lot.
Advice to Founders
Qiuyan Xu: Yes, exactly. Exactly. I think that applies to entrepreneurship as well. Do start. For founders, I grew up as a technical person and I think it is interesting, back to what you and I were talking about earlier, life science, academic founders versus business founders. I do think founders, especially on the academic side, people grew up "academically", do want to please think about the business side of things and then try to acquire some of those background and knowledge as well. Either through mentorship, either through other venues, we have an ecosystem here, especially in this area.
Sal Daher: We're very lucky in this area. The investment [crosstalk].
Qiuyan Xu: We are. Yes, definitely. A lot of the NGOs that I met through, and Sal, you and through a lot of the people from Walnut and the other groups, they're tremendously helpful, usually, to founders, and they're willing to help.
Sal Daher: Yes. It astonishes me how much help is available. Also, with collaboration with other angels, is just incredibly helpful. I first heard of angel investing, circa 2010. I've been investing in startups for a decade. My brother-in-law comes to me and says, "Hey, Saleh, you know that guy, Michael Mark, that we invested with in Exos? Remember he was an investor in Exos?" It's an early investment that they very nicely and excellent. "Remember that guy? He hangs out with these people called Walnut." I had no idea that angel groups existed.
Qiuyan Xu: That's interesting.
Sal Daher: This is like [crosstalk] 2011 or 2012 or something. They'd been going, I think, for 10 or 15 years already. It dawned on me, "Jeez, there are other people that do this weird thing that I'm doing." It was a real discovery. Don't be angel investing alone, find a group, and also the same thing for founders. There are tons of resources. The Capital Network, there are lots of places where you can get help, mentorship, the accelerators, TechStars, MassChallenge. I can say that MassChallenge and TechStars, even off the record, I've never heard anybody say anything bad about them.
Qiuyan Xu: Right. Yes.
Sal Daher: Except for angels. Angels say, "Oh, they raised the valuations," and so forth, but the founders, it's always worth their time.
Qiuyan Xu: Right. Yes. I did some volunteer work at MassChallenge. It's definitely an incredible organization. I have to say, Michael Mark is just great. [laughs]
Sal Daher: Oh, he's tremendous. He's such a help.
Qiuyan Xu: Absolutely right. He's such helpful. Yes, he's helpful.
Sal Daher: I picked his brain this very week.
[laughter]
Sal Daher: Yes. That's good. Any other thoughts, Qiuyan, before we wrap up? Qiuyan Xu: I think this is good. I think this is wonderful. I think I see not as many founders from-- Not as many, at least, from immigrants' perspective, being myself as immigrant, but I do know there's the One Way Ventures here in Boston that they specialize-
Sal Daher: That focuses on that.
Qiuyan Xu: Yes, focus on that. I do see actually, more female founders these days, but from immigrants, I think part of the reason maybe is because immigration status, like visa, and then we do have a lot of limitation on that. Would be great to see if there's also a more diversified, that founders-
Sal Daher: More immigrant founders. I think you might be surprised how many academic founders are immigrants.
Qiuyan Xu: Oh, okay. No, that's true.
Sal Daher: Because that's one way that people can come in, is getting a visa via university, being an academic.
Qiuyan Xu: That's true. You're right.
Sal Daher: Savran, for example, Çağrı is an immigrant.
Qiuyan Xu: You're right.
Sal Daher: In the life sciences, it's not unusual at all to have immigrant founders. I'm an immigrant as well.
Qiuyan Xu: You are from Brazil, right?
Sal Daher: That's right. I was born in Brazil. I came to the United States when I was 11 years old. My dad came up to do a PhD, and by the time he was done, I was in college. I was just still going to college. It was unbelievable. I was an 11-year-old boy, and just a few years later-- I don't understand how it happened. My mother made me skip a few grades. It's like in six years, I'm in college.
[laughter]
Qiuyan Xu: You graduate at the same time.
Sal Daher: I was so not ready. I was so not. My mother was not somebody-- She's not the tiger mom, she is the onça. Onça is the Brazilian leopard. She was a leopard mom.
Qiuyan Xu: [laughs] Where did you grow up? Here in [crosstalk]?
Sal Daher: I grew up here in the Boston area.
Qiuyan Xu: In the Boston area? Okay.
Sal Daher: Yes, and then I spent some years in Argentina, where I married my fiancé and was down there. I also lived in Singapore for a year. I did a lot of business in Africa. I traveled to Africa quite a bit. So, I've been around.
Qiuyan Xu: Great.
Sal Daher: This has been a delightful conversation. I'm very grateful to you taking time, and I really enjoy working with you on various startups, like the things we've worked on together.
Qiuyan Xu: Thank you, Sal, and I really appreciate this opportunity talking to you on podcast, and been listening to other of the episodes is great. I really appreciate your time, as well as I enjoy working with you.
Sal Daher: I'm very honored that you listen. Let me tell you. I'm yet to be disappointed when I speak to someone who's a listener. I'm like, "Oh, wow. This person listens."
Qiuyan Xu: [laughs] Great. Thank you.
Sal Daher: Qiuyan Xu, thanks a lot for being on the Angel Invest Boston podcast.
Qiuyan Xu: Thank you, Sal. Have a good evening.
Sal Daher: Thank you. To the listeners, thanks for listening. I'm Sal Daher.
[music]
Sal Daher: I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.