“Jim Mattis invested in Theranos. Osama Bin Laden invested in box cutters. Who changed the world more?”
A couple of weeks ago, I had the pleasure of sitting down with Matt McGuire, CEO of SafeStamp Inc. SafeStamp® is a nanotech product that solves a $1.82 trillion per annum (yearly) global problem and saves a million lives a year. If you are interested in hearing more or want to be a part of this round of fundraising please contact Matt at [email protected]!
Key-Takeaways:
- You can be a Deep Tech founder without actually being an expert in that field, but you must be aware of your weaknesses and recruit around them while being able to take criticism and being persistent. It’s a hard but rewarding life.
- There are fake drugs labeled as authentic brands in circulation that are killing a million people a year (INTERPOL).
- It’s a lot easier to sell something when you deal with loss aversion. Try to explain how much you’re saving rather than how much they will be gaining.
- There will come a day when nanotechnology can rebuild organs in your body from self-assembly, and that day is on the horizon.
- Culture counts.
- We need to change the ethos in everything from venture capital to angel investing in Deep Tech. Deep Tech deserves and needs the support of the entire tech community.
“If you set out to take Vienna, take Vienna” — McGuire quoting french conquer, Napoléon Bonaparte
Can you tell me about yourself and how the idea of SafeStamp® came about?
It began when I was a soldier in Iraq wondering how these insurgent groups had so much money. Turns out they were making fake pills and selling to pharmacies abroad. I didn’t think too much of it until I attended The Wharton School of the University of Pennsylvania. During my MBA, I noticed foreign students buying these pills. When I talked to these students, they said their families trusted the local pharmacy, so I decided to do some research and what I found was pretty shocking.
These fake/counterfeit drugs, which look and smell like the real things are sold at legitimate-seeming pharmacies around the world, kill a million people a year, and cost pharmaceutical firms $200 billion per annum. To put the latter figure in perspective, the illegal cocaine market is only $85 billion per year; to put the former in perspective, a million is a big number. Stalin once said, “the death of one man is a tragedy, the death of millions is a statistic” but after I started this project, I learned that my friend’s brother died of fake chemo. I have decided that I don’t want to live in a world where this is happening, so I set about to change it.
How did nanotechnology come to be the solution?
Nanotechnology was the perfect solution for a number of reasons, but the initial driver for going there was that I wanted to avoid digital. Coming up with a solution that involved programming would be insufficient because it is a ubiquitous skill. Even my 6-year-old nephew can program. I needed technology that was very discreet. So we began to look at mechanoluminescence and uncovered some unique properties.
Can you tell me a little bit more about your product and how it’s going to make counterfeit drugs glow?
What we have is an indicator for packaging, you touch it and it glows. This glow is based on an advanced nanotech reaction and we’re the only people who know how to build valid counterfeit products. Our mission is simple: to save a million lives a year and improve the health of millions more by any form of counterfeiting. And by the way, this universal indicator works for any physical product anti-counterfeiting, and the total cost of counterfeit goods sold last year was $1.82 trillion.
This sounds like you guys have a great opportunity to scale.
This indicator can actually work for any packaging of any physical good. So we can make the P on a pair of Prada sunglasses glow, we can make the Nike swoosh glow. We can serve high-end liquors, we can serve electronics, we can serve a lot of things. But we’re focused on pharma because of the social mission, it’s our big problem. Anyone that has gotten sick from vapes, THC or nicotine, has gotten sick from a counterfeit one. But those fakes, in addition to just costing the vape companies, lost revenue, brought down regulatory pressure that has severely curtailed the industry. What I’m getting at is that there are markets everywhere for this product.
Are you guys ready to launch?
It’s glowing in the lab — we have proof of concept. We need a little more time with it to get it finalized so we can put it on products. We will begin filling our millions of dollars in purchase orders this year though. I’m stoked!
How have things gone on the business side?
Since starting this company in 2014, we’ve had major pharmaceutical companies reach out to us. They’ve called us innovative, exciting, and said the lowest level they would start us at would be the whole country level. We have an arrangement with the government of Ghana (I met with the VP personally) and they are pushing us onto all of their industries. Finally, we have a $10 million pre-order with an electronics company. All of this occurred with no customer outreach, which we just started a couple of weeks ago, and which immediately got us an LOI (Letter of Intent) from a major vape company that specializes in the distribution of vapor liquids and devices.
As a Deep Tech company, what roadblocks do you face?
Deep Tech demands a physical product, and it takes money and time to build a product. It’s not fast and cheap like hiring a couple of programmers for $3,000 to build an app. Also, we are dealing with the chicken-and-egg problem. A lot of companies want to work with us but when we are ready to scale. So fundraising was initially a challenge, especially before we submitted our patents, but we have raised over $1.5 million to date.
Why are you guys not facing the same hurdles as many Deep Tech companies?
Have you seen the studies where people hate losing $5 more than they like gaining $10? It’s the psychological phenomenon of Loss Aversion. These companies know that counterfeiting is a loss for them, that’s money that should be theirs. It isn’t just that I have a Deep Tech solution that is going to get them another $1.82 trillion, our product will keep them from losing $1.82 trillion a year that they’re already losing. That psychological distinction really helps with adoption.
How is SafeStamp® dealing with all the medical policies and regulations?
We don’t have the same hurdles as biopharma. Per FDA regulations, we can’t cover up any writing on the packaging but that’s the only law we have been able to find that applies to us.
How did you build out your team?
When I got the idea, I recruited some scientists (people will talk to you if you’re a veteran) so I started finding one of the best nano polymer people in the world. Also, my friend left Wall Street to be our financial advisor. I recruited a 77-year-old man who spent his whole life bringing pharma products to market, doing operations, selling, compliance, everything. I generally recruited a great team around me.
What do you think a good CEO/Founder should look like?
I think a good CEO or a good founder is aware of their weaknesses and is going to recruit around them too. You know, fill in those holes. I think it’s very important to just be aware of your weaknesses and surround yourself with people who compensate for them. Further, especially as a founder at an early stage, you have to be able to take criticism.
If you can’t critique yourself, then how are you going to ever be able to take criticism from other people? We actually read Kim Scott and have a policy of “Radical Candor” for everyone in our company. You will not only accept criticism from those higher up the chain of command, but you will also give it up the chain of command. This, in my mind, is the only way to get a free flow of information and foster a culture of innovation.
I cannot emphasize culture enough. You want to maintain the agility and innovation of a small startup even as you scale. Even though I was in the military, I do not want to recreate the 82nd airborne. Militaries are big, lethargic, and have cultures of conformity that squelch innovation. This is why they lose to insurgents, who are small and agile and can innovate. I always say: “Jim Mattis invested in Theranos. Osama Bin Laden invested in box cutters. Who changed the world more?” It’s the same with corporations and why they lose to small startups.
Finally, a good CEO, especially a good Deep Tech CEO, needs to be persistent. I have this Calvin Coolidge (30th president of America) quote memorized:
Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan Press On! has solved and always will solve the problems of the human race.
What do you think is the next big thing for nanotech?
I think there will be nanotech that will kill essentially any pathogen, these types of diseases will die in my lifetime. I believe there will be nanobots that can rebuild your internal organs with self-assembly (reference Molecular Manufacturing). I think people having heart problems and liver problems will all cease to exist within my lifetime. Then for energy, there are coatings for solar panels that I think are going to be huge ways to make nuclear fission or fusion.
Outside of nanotech, energy is a really interesting space as well. There are some really cool fusion companies building more viable solutions, and I always like to shout out General Fusion in Canada, which is working on cheap, clean nuclear fusion technology using steam (Bezos invested in it).
How do you think we can encourage more private-equity (VC) funding for Deep Tech companies?
I’m a public policy person, but that’s not the ethos of the valley. I think the government should be funding a lot of this. Still, our government seems completely broken, and I wouldn’t bank on it getting the job done. So, we need to change the ethos in everything from venture capital to angel investing in Deep Tech.
It’s a hard life. I’ve been doing this since 2014. I was funding my startup at one point by Airbnbing my apartment and the thing was it was a studio (so I couldn’t sleep there when there were guests) so while I was renting it out I would just shower in the gym, and then work all-night in a 24-hour coffee shop. One day, I did that five days in a row, and it was a super-rough five days. It’s a hard life to put together a Deep Tech company. It’s a lot harder than building an app. We deserve the support of the venture capital and angel community. And the investor community deserves the incredible returns Deep Tech has to offer: for example, at our current valuation cap, our most conservative projections show a +25x investor return.
If I wanted to join the nanotech industry where do you think I should start?
Everyone is interested in changing the world, right? I would recommend reading Jeff Schmidt’s Disciplined Minds. Schmidt is a physicist, but he goes through why corporate America and the university system here are completely broken. Even if you don’t have a nanotech ability, this will allow you to build something with nanoscientists, which is good. You want to build something special, what Peter Thiel calls a conspiracy to change the world (this is from Zero to One, a very good read on starting a company). The university system is dysfunctional, corporate America is in a lot of ways dysfunctional or functional at one thing (rent-seeking), not at innovation. And I think Jeff Schmidt’s book explains in very interesting and well-versed detail why that is. If you are price-sensitive, he released it and there are PDFs floating around for free.
Patty McCord’s book Powerful is also very good. She helped build Netflix, and I would argue Powerful is the best book on corporate culture. And, as Peter Thiel says, Don’t Fuck Up the Culture.
And of course, if you want to join the nanotech industry specifically, network with nanoscientists! Further, every major university has a tech transfer office, where they will license companies and startups their technology, including their nanotechnology. The future is sitting in labs and patent offices at universities, and it will take entrepreneurial people to realize it.
What if there was a Bloomberg type of platform solely focused on Deep Tech? I’ve been thinking about this for some time. And I think this is why I started this whole DTD Interview thing?
There’s an appetite for that substantive media. Nobody normally wants to read Taylor Lorenz ratting out someone for saying the “r-slur” and then getting it wrong. People want to read about how nanobots are going to build you a new heart.
Catch the latest in my Deep Tech Dive series where I interview Faisal Shah Khan, Co-Founder & Chief Advisor of Dark Star Quantum Lab.
Or check out my first ever Deep Tech Dive Interview with Deep Prasad, CEO of ReactiveQ here.
I understand that innovation is growing exponentially, but I am worried it takes too long for organizations to accept frontier technology. I aim to demystify the complexity of cutting-edge technologies for the average non-technical person. That is why I encourage entrepreneurship while exhibiting my excitement for the acceleration of technology, in hopes that you may feel empowered to engage with the future.
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