Yug Varma
On Creating A Pain-Free Acne Care Brand
from San Francisco, California, USA
started February 2014
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On Creating A Pain-Free Acne Care Brand

Hi! I’m Yug Varma, co-founder, and CEO of Phi Therapeutics and Phyla. Phi’s mission is to change the way we treat chronic bacterial diseases. We are a biotech startup working on the microbiome, which is the microbial community that lives within each of us and keeps us healthy. Our technology uses bacteriophages, nature’s most powerful defense against bacteria, to kill the disease-causing (bad) bacteria while letting the good bacteria thrive and create a more resilient community that protects us. Our current focus is the skin microbiome, to provide a better solution for diseases like acne and eczema that have been underserved by innovation.

Our brand is Phyla, and our first product is an acne care system with a completely new approach. Current acne products may cure your acne some of the time, but they cause skin damage 100% of the time. Benzoyl peroxide is a type of bleach and accelerates aging. Antibiotics result in frequent relapses and dysbiosis and cause increased resistance. And the use of retinoids involves serious medical risks such as birth defects, liver damage, depression, and suicide, which could affect you for the rest of your life. So people and dermatologists have a bunch of bad options, and it’s not their fault because acne has seen no meaningful innovation in nearly 40 years.

We’re pioneering a new approach that only kills the bad bacteria, without harming the good bacteria on our skin. By addressing the root cause of acne without doing collateral damage, we are able to save people from irreversible skin damage that accumulates from years of harsh acne products.

We just launched a month ago, and we’re seeing an impressive uptick in our sales. We’re also concluding a randomized controlled trial, which should give us lots of insight into the mechanism and effects of our approach. We’re excited to share more about our progress and data in the coming months!


What's your backstory and how did you get into entrepreneurship?

I’m from India, where I grew up and went to university, and got a Master’s degree in physical organic chemistry. I came to the US 15 years ago to do my Ph.D. at Johns Hopkins University. After my Ph.D. I moved to San Francisco to do a postdoc at UCSF, working on microbiome research. I spent 6 years at UCSF studying how our gut bacteria talk to our immune system, which impacts human health in many ways including asthma, allergies, inflammation, and metabolic disease.

It’s important to try to kill your own ideas, because if there’s a fatal flaw in your business model then it’s best for everyone involved to know that as soon as possible.

I loved academia and scientific research really excites me, but I found it frustrating when I would read about some intriguing insight or breakthrough that would be published, but no technological innovation would come out of it. And while converting science into technology is incredibly hard, I started to seriously consider how I might contribute to translating powerful scientific ideas into products that could change peoples’ lives.

At the time that I stumbled across entrepreneurship, I had no idea of what an entrepreneur does, and what it takes to get a startup off the ground. Although I was in the cradle of Silicon Valley and the SF biotech engine, I had never paid much attention to those worlds. I was lucky enough to be at UCSF, which offered several excellent entrepreneurship classes. I took my first class thinking I would dip my toe in it, get a general sense of entrepreneurship, and throw away my idea at the end. But by the end of the class, not only had I realized that my idea had legs, but I knew that entrepreneurship was the only thing that I really wanted to do. And I never looked back.

We used a lean launch methodology to validate our idea and get a product-market fit. It was incredibly hard work given that I was working long hours at the lab and I had infant twins at the time - but I poured all my waking hours into it. I was lucky enough to be taught directly by Steve Blank and got started with terrific mentors who I keep in touch with to this day. I realized that the Bay Area is a very special place for biotech, because of all the support and resources for a young entrepreneur that they freely provide. As a postdoc living in SF with no real backup and a young family, it was a tremendous risk, but I also realized that if I didn’t take my chance then, I would never be in a position to grab that opportunity again.

Take us through your entrepreneurial journey. How did you go from day 1 to today?

The core technology for the startup is something I stumbled upon 15 years ago, early in my graduate career. I came across this very old biotech idea from 100 years ago, which always held promise but never quite made it. I had always been looking to find a way to work on this problem, whether in academia or industry. When I had the opportunity to learn about entrepreneurship, I knew it was the perfect chance to test this idea. Soon after, I assembled my cofounders and we founded the company.

As we all had day jobs at the time and as I was the expert in the field, I worked nights and weekends to gather the initial scientific data to test my theory. We collected some early results this way and submitted an NIH grant to get funding. We were incredibly lucky to get our first grant-funded, and this allowed me to go full-time and for us to get off the ground.

Following the initial NIH funding, we completed our R&D and developed our first prototype for acne. Along the way, we took on industry collaborations and projects to help fund us. It wasn’t easy, and there were a lot of sacrifices along the way, but it enabled us to keep going and got us where we are today. We got a huge amount of work done on a very efficient burn, and the lessons learned from those days are very much a part of our company’s DNA now.

We got venture funding soon after we showed promising results with our prototype formulation, and this enabled us to get to launch. Along the way, we continued innovating in order to bring our vision to life. And while it feels like it took a lifetime of effort to get here, we know we’re still at the very start of our story.

How are you doing today and what does the future look like?

We are a very new brand since we launched only a month ago. But already we’re seeing a shift in consumer’s perceptions of acne products and the choices they’re making for their own health. I get the sense that successful businesses often see a trend before it happens, and position themselves to capture the full potential of that shift. While only time will tell whether we are correct or will be successful, we can already see the change where people want a change from harsh skin products that cause skin damage. And as a company that is innovating with biotechnology with an asymmetrical advantage, I feel like we are creating the shift we want to see as well.

As we launched and spread awareness about current acne products and our different approaches, we’ve seen a definite alignment with, and adoption of, our new technology. This adoption rate is increasing and we’re looking to reach profitability by the end of the year. We’re still a small operation with 5 employees, but our lean beginnings, along with our efficient and supportive culture ensure that we respond to challenges and can scale seamlessly.

We are currently only shipping to the continental US and Hawai’i and Alaska; we are looking to expand to a few other countries where demand for our product is especially high. Additionally, we also have an eczema product in advanced development which is showing impressive results. Given that eczema is another disease with bad options for treatment and care, and which has been on the rise in recent years, we are looking to launch our eczema product by Q2 of 2021.

The short term goal for our business is to reach profitability and then grow beyond that. Although Covid-19 has set us back from where we thought we’d be in terms of growth, we are in a great position to meet our year-end goals and have already identified areas that we can optimize to get even greater growth. Our long term goals are to codify those growth optimizations and accelerate them to achieve growth at scale.

Through starting the business, have you learned anything particularly helpful or advantageous?

I’ve certainly learned many lessons as an entrepreneur, and I think the best lessons to learn are not from successes but failures - because you never forget them, or at least you never should. I learned a lot from failed negotiations where we had no leverage and we almost sold the farm for a pittance. We learned to stand our ground because it was in the best interest of the company, even when we could least afford it.

Some of the best decisions I’ve made have been in terms of partnerships and personal relationships. My co-founder and I are very determined and collaborative, and we’ve built a team that reflects our values of honesty and respect. I think we’re quite lucky to have been in the microbiome space, for two reasons. First I think it’s been quite a ‘hot’ trend, both in biotech as well as skincare. Second, the microbiome community is a wonderfully collegial one, and it’s a pleasure working and sharing insights with some truly collaborative folks.

In terms of successful traits I’ve learned, tenacity and dispassionate analysis have been pretty important for me. It’s important to try to kill your own ideas, because if there’s a fatal flaw in your business model then it’s best for everyone involved to know that as soon as possible. Often these flaws can be overcome by a great team that can pivot nimbly and effectively, but it’s essential to address it directly, and not ignore it.

What platform/tools do you use for your business?

Our website is built in WordPress, and we use the Woocommerce backend. For those who are familiar with Shopify, it’s important to understand the difference between the platforms in terms of scaling and long-term value, as one must plan for the future.

We ship the products from our own facility because we are obsessed with the customer experience and delivering a live probiotic product in the best possible condition. We use Mailchimp and are in the process of integrating HubSpot in the coming months. It’s pretty standard stuff for modern websites, and we’re adding more tools as we scale.

What have been the most influential books, podcasts, or other resources?

If you’re starting out with an idea or still in the process of finding a product-market fit, then I think Alex Osterwalder’s Business Model Generation is a great starting point. I have loved and continue to embrace the lean launch methodology, and there are a number of great books about this, including the ‘Startup Owner’s Manual’ by Steve Blank and Bob Dorf.

I’ve been educating myself about marketing recently, and if you want to start from scratch then Permission Marketing by Seth Godin is an oldie but a goodie. I’m currently making my way through Blue Ocean Strategy by Renee Mauborgne and W. Chan Kim. It’s good so far but I haven’t finished it yet. And I’ve always enjoyed the How I Built This podcast with Guy Raz as a place for inspirational stories from great founders.

Advice for other entrepreneurs who want to get started or are just starting out?

I would say that it’s incredibly difficult in the beginning because, after a day of running hard, it feels like you’ve barely budged an inch. I think that’s where the fire in the belly really helps keep you from giving up and encourages you to stick with it. I would advise you to believe in yourself, but not fall in love with your idea so much that you’re blind to its flaws.

It’s also important to continue to work on your network, although it’s not the most important thing you could be doing - you should be building value, knocking down the biggest objections or obstacles to your success, and showing tangible success. Vanity metrics are to be avoided like the plague.

The product-market fit is key to find in my opinion, and talking to real customers instead of what you think they’re thinking is the only way to find that for sure. That’s probably the action with the biggest impact that you should be taking right now if you haven’t done it already.

Where can we go to learn more?

Yug Varma   Founder of Phyla
Pat Walls,  Founder of Starter Story

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