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Honored two years in a row as a top tech podcast by The Webby Awards, CRAFTED. is a show about great products and the people who make them. Featuring incredible founders, innovators, and makers that reveal how they've built game-changing products — and how you can, too.
What trade-offs did they make? What experiments did they run? And what was the moment when they knew they were on to something BIG?
Hosted by Dan Blumberg, an entrepreneur, product leader, and public radio host with chops as both a technologist and as a public radio host. Dan has founded startups and led product releases and growth initiatives at LinkedIn, The New York Times, and as a consultant to big banks and startups. Before getting into tech, Dan produced and guest hosted WNYC's Morning Edition, the most listened to show on the country's largest NPR station.
Listen to CRAFTED. to find out what it *really* takes to build great products and companies.
TRANSCRIPT:
[00:00:00] Christie Nicholson: 14 years ago on these stages, people were like, what? There's no way that's happening. Like, we're not gonna control robots with our minds.
[00:00:09] Dan Blumberg: Hey there, CRAFTED. listeners. We have a special edition this week, straight from a stage at this year's South by Southwest.
[00:00:15] Amy Kruse: Neurotechnology itself has finally caught up with Moore's Law, so we're actually able to put the compute on the person in the brain.
[00:00:24] Humans can, with brain implants, control robotic arms.
[00:00:28] Dan Blumberg: It's all about how software, hardware, and biotechnology are playing an increasingly transformative role in our mental health and wellness. On this episode, we'll discuss what investors look for in these new companies and how they separate what's real and what's near term.
[00:00:43] From what's hype?
[00:00:44] Matias Serebinsky: Psychedelics, definitely. They're overhyped. And so what do I mean by that?
[00:00:50] Dan Blumberg: We'll explore AI powered tools for mental health, psychedelics, the new area of pharmaceuticals, and why what's in your gut is so important to your mental health.
[00:00:59] Amy Kruse: One of the reasons chat, GPT, and and these models work is because they have the world of the internet to work on.
[00:01:05] We are not yet in a place where we have the world of brain data to do the same types of things with ai.
[00:01:13] Dan Blumberg: Welcome to CRAFTED., a show about great products and the people who make them. I'm Dan Blumberg. I'm a product and growth leader, and I'm crafted. I'm here to bring you stories of founders, makers, and innovators that reveal how they build game changing products and how you can, too.
Crafted is produced in partnership with Docker, which helps developers build, share, run, and verify applications.
[00:01:35] Anywhere without environment confirmation or management. Docker, suite of development, tools, services, and automations accelerate the delivery of secure applications. Learn more Docker.com
And Crafted is produced by Modern Product Minds where I advise companies on product discovery, growth, and experimentation.
[00:01:53] Learn more and sign up for the CRAFTED. newsletter at modernproductminds.com. Okay. Now to Austin, Texas, and South by Southwest, we start with my co-host for this conversation. Christie Nicholson:
[00:02:08] Christie Nicholson: thank you so much for joining us. You're in for a exceptionally exciting conversation and I'm excited about it because the body is both chemical and electrical, yet modern medicine. Has continued to focus on the more chemical side of our body. However, this is changing and this is the theme of our conversation today, which is that medicine is now turning its focus much more closely and seriously to exploring the electrical side of our bodies.
[00:02:45] Now, our bodies are entirely electrical. As I move my arm and all of you would move your arm like this. We'd have very similar neuronal patterns in our brain, and those are essentially electrical, uh, sparks. So this is changing now, and the fascinating stuff that's coming out of these discoveries has been done and influenced and is happening because of new hardware and software.
[00:03:12] Very exciting stuff. There's a lot more we're gonna talk about. And so let's get started and I'm gonna throw over you, Dan.
[00:03:18] Dan Blumberg: Well, what I'm excited about is that, and, and Mathias, I got this from your podcast when MIT neuroscientist, ed Boyden was on, he, he talked about how, and it just really stuck with me.
[00:03:28] We're approaching a point where biology will be a mature, as he put it, a mature science. And I would never have thought to call it an immature science, but his point is. That it's a, it's an immature or an unpredictable science now because in physics and chemistry, where he's also worked in physics, you have a sort of small number of things.
[00:03:45] There are electrons, there's protons. In chemistry, there's more things, but still not that many things. There's carbon and nitrogen, et cetera, and in biology you have a lot. Of things, many orders of magnitude, more things. The human genome has 30,000 or so genes, and there are thousands of cell types in the human body.
[00:04:02] And the more and more things there are, the more and more ways that they can interact. But with new technology, there's no reason that we could not understand how all of the things interact. And so what he's working on and what we'll talk about today is how, how these things can be more predictable. And so that's really exciting to me.
[00:04:19] Christie Nicholson: My name is Kristy Nicholson. Um, I'm a former science journalist at Scientific American Magazine, a startup entrepreneur, and now I've got a new service called the Studio for Communicating Complexity.
[00:04:30] Amy Kruse: I. My name is Amy Cruz. Uh, I'm a neuroscientist by training, so I have a PhD in neuroscience, but actually have had quite the winding career.
[00:04:38] I started out, uh, my career as a program manager at darpa, uh, and used neuroscience technology to, uh, improve human performance. So accelerate accelerated learning and training, preventing sleep deprivation. Complex decision making and high stress environments. More recently, uh, transitioned into entrepreneurship and now investing, and so I am the, uh, general partner and chief investment officer of a new fund called Satori Neuro.
[00:05:03] We focus on mental health, brain health and wellness. The application of neuroscience technologies and what I like to call human flourishing.
[00:05:11] Matias Serebinsky: My name is Mattia Rinky. I'm a general partner at a fund called Simon Ventures, where we invest in Frontier Mental Health. As Dan mentioned, I also co-host a podcast that's called Business Trip, where we explore the future of mental health and the startups building it.
[00:05:29] We're gonna spend
[00:05:30] Dan Blumberg: the bulk of our time talking about what is real and what is coming soon, but I do wanna start with one thing that each of you think is hype is overhyped.
[00:05:39] Amy Kruse: Probably not gonna be a big surprise, but it's sort of AI for everything, right? Um, especially as we're seeing in the mental health space.
[00:05:48] I would put it into two camps. One is sort of things that are being discovered from large data sets and you know, and I'll talk about that in a little bit, but there's also the generative. Piece. I've seen a lot of chatbots for therapy and I'm not really sure that chatbots are a good idea for, uh, for therapeutic interventions, but might be good for some other things.
[00:06:05] And so, you know, one of the things that's a challenge as we think about ai, one of the reasons chat GPT and and these models work is because they have the world of the internet to work on. We are not yet in a place where we have the world of brain data to do the same types of things with ai. And so I think there's a lot of development in that space, but there is a little bit of like.
[00:06:25] It's not quite, some of this isn't quite ready for primetime. The other thing is that, um, a lot of these, and I think this is across the board, not only in the mental health space, but in other areas, is is it a feature or is it a company? Right. And I think it's, it's important to think a lot of these things may be eventually rolled up into something else, and not really standalone companies.
[00:06:45] Dan Blumberg: So much of it is open source. And so the benefit may accrue to everybody. Exactly. Yeah.
[00:06:49] Matias Serebinsky: So, and, and then when you say a feature, what, uh, comes up for me again from the lenses of an investor is what is defensible, right?
[00:06:56] Dan Blumberg: Yep. It may be that it's not defensible for any one company to own something. It may, it may cut across many, many, many companies, but I'm interested in where, where is it unlocking new opportunities?
[00:07:06] Yeah.
[00:07:06] Amy Kruse: I would say it's unlocking new opportunities, particularly in the biomarker space because again, in order to leverage ai, you need the data sets. To build up the training examples and then to test against, and then to set out into the wild. And I think we're starting to see data sets in, um, EEG, electroencephalography, um, FMRI, functional magnetic resonance imaging, other behavioral data.
[00:07:30] There's been work in using, um, voice and porosity, meaning the tone of your voice as well as word choice that's being used as a biomarker. What's the consequences of that? Well, so they're essentially, they can detect when someone's actually depressed. I. Or has anxiety right now, there's a company that's using it on just regular like clinician telehealth visits.
[00:07:50] Right? So you're already. Engaged in a telehealth visit with someone that's not with a psychiatrist, but they can use that information to actually say, Hey, to the clinician, you may want to ask this person. You, there may be an opportunity to intervene here in a mental health condition. That was not the primary reason that that person came.
[00:08:09] Uh. Seeking care, which I think is very exciting.
[00:08:12] Matias Serebinsky: Yeah. And then other, let, let's call it a little bit even more basic applications, but we're seeing it with our own portfolio companies. So for example, if a company's therapists are seeing clients 50 minutes once a week, so what happens during the other six days of the week?
[00:08:28] How can you actually, you know, continuously deliver care? While the therapist is not seeing the client. Right, and the thing is that there's a shortage of therapists and so you need things like AI to actually follow up with clients throughout the weekend.
[00:08:43] Amy Kruse: Right. Clinical decision support or clinical support is one of the areas.
[00:08:48] I was just out at the Lake Nona Impact Forum thing where Oracle got up, Oracle Health got up and sort of talked about how they're using this in electronic medical records and how they're starting to use AI to. Assist with, you know, sort of clinical decision making, which is totally different than a diagnostic.
[00:09:03] Right. And I think will be something that will actually come to market much faster.
[00:09:07] Dan Blumberg: What is one area that's you find over hype right now? Psychedelics.
[00:09:14] Matias Serebinsky: Definitely overhyped. And so what do I mean by that? Well, first of all, when you think of something, usually when something's overhyped, it means there is a kernel of truth there, right?
[00:09:24] And so by saying that it's overhyped, I'm not denying that there's a lot of potential. There's very clear data that show that. Uh, psychedelics can be extremely effective and safe for certain mental health disorders, but we are also seeing psychedelics being promoted for any type of disease, any type of condition in any possible way.
[00:09:47] And to give a a specific example, the other, uh, day I was presented with, uh, a pitch from a company that is exploring psychedelics. For folks living with schizophrenia, and that is a very dangerous proposition. At the same time you have, um, microdosing, which is one way of. Getting psychedelics that many people claim, um, presents benefits.
[00:10:12] But when you see the clinical data and the clinical studies, really there's nothing that showed that, uh, microdosing is actually safe and effective for specific mental health disorders. The other example is more on the reimbursement, and so you hear these things like. Everyone will get psychedelics if they're struggling with depression or anxiety or any other type of mental health disorder.
[00:10:39] In reality, if you see how costly, um, psychedelic treatment maybe, you know, could be $15,000, right? For a series of, um, psychedelic journeys plus psychological support before and after. Compare that to going to a primary care practitioner. Or physician and getting an SSI prescribed, which may cost $10 a month.
[00:11:03] So when you think in, in those perspectives, even if something is helpful for a number of people, doesn't mean that most people will get that as a prescription. Uh, and even less that those people will actually get a reimbursement from payers. So, you know, healthcare insurance companies.
[00:11:24] Christie Nicholson: So we've talked about hype. Now we wanna get to, uh, excitement and what excites you. But before we get there, I just wanna understand, just coming back to what I was mentioning earlier, you know, 14 years ago on these stages, and people were like, what? There's no way that's happening. Yeah. Like we're not gonna control robots with our minds.
[00:11:44] And now there's 20 talks on BCI running this year at South by Southwest. What happened that made this suddenly and not so sudden, but in, in 10 years, essentially in the last five years, explode into the mainstream the way it has.
[00:11:59] Amy Kruse: I sort of have three things that I talk about, and I think this is, you know, across the space that we're talking about now.
[00:12:05] Um, the first thing is that, uh, neurotechnology itself has finally caught up with Moore's Law, not the other way around, right? So we're finally starting to use microelectronic circuits, miniature, uh, you know, components. We're actually able to put the compute on the person in the brain, uh, in ways that we've never been able to do before.
[00:12:26] So, yes. You know, humans can, with brain implants, control robotic arms and, and context. The second thing is that I like to call it from synapses to systems. So, uh, neuroscience itself came out of a very molecular biology world. You know how, how excels. Communicate with one another. But now because of imaging, because of cognitive neuroscience, we really understand the networks in the brain, and we're starting to understand disease states as perturbations in those networks.
[00:12:55] That gives us the opportunity to change those networks. In the brain using neurostimulation, using psychedelic medicine, using things like that. And the last point itself is neuroplasticity. When I was in graduate school, we were taught that the brain of adults didn't really change that much through adulthood.
[00:13:12] Now we know that the bl, the brain remains plastic throughout adulthood. And we could use these tools and techniques that we're gonna talk about in order to change our states. And I think those three things for me are what's really causing the revolution in, in the solutions that we're seeing now.
[00:13:28] Christie Nicholson: Yeah, it makes sense that with any innovation, what needs to change is the way the tools that we use to actually observe or measure what's actually happening, and that's starting to get much more sophisticated.
[00:13:38] So given that, let's talk about what are the two of you really? And everyone in the audience should listen up on this because this is important because they're both business people and investing in this. What is most exciting to you? Out of all the things we're about to talk about,
[00:13:53] Amy Kruse: I'll take this and then I'll hand it to you, Mattias.
[00:13:55] So, um, I'm gonna follow it on with saying there are two things that I'm most excited about right now. One is around precision. Psychiatry or precision neuroscience. So I just talked about those networks in the brain, right? I talked about how we're starting to, uh, affiliate and associate those networks in those, those states with actual, you know, disease conditions, whether that's depression, obsessive compulsive disorder, uh, anxiety.
[00:14:20] Um, the idea right now is that we can actually understand how those networks in the brain will predict how someone will respond to a particular treatment. Even, right. So now pharmaceutical companies are starting to engage using these biomarkers to understand if their drugs or devices are working.
[00:14:39] Eventually, we will get to the point where we can actually use that as a screening tool, a diagnostic, to get people into the right treatment the first time right now. We're essentially experimenting some
[00:14:51] Christie Nicholson: of the work in oncology, though I understand. So that with chemotherapy and certain types of chemotherapy that have not been good for somebody, they will now know we should never.
[00:14:59] Right. If you have
[00:15:00] Amy Kruse: a particular type of tumor right now, they can essentially sequence that tumor and say, this will work. That won't work. Just do that first. We're getting to that level with mental health and with with the brain. The second thing I'm excited about is. What I talked about briefly, neuro uh, neurostimulation, non-invasive neurostimulation using low intensity focused ultrasound using, uh, other energy, electricity magnets to actually perturb those brain states.
[00:15:27] That's exciting because now, uh, with like things like low intensity focused ultrasound, you can actually get into the depth of the brain and control nodes in those networks that are deep within our brains. And that's a whole new, uh, whole new capability that we've never had before.
[00:15:42] Christie Nicholson: Well, and on that point, Mathias, you used a word that I'd never heard of before when we were talking, which was enerceuritcals.
[00:15:50] Is that something that you're excited about? And tell us what that might be about. I.
[00:15:54] Matias Serebinsky: Yeah, so usually at summited, we think in terms of, you know, paradigm changes and so much of what you see as innovation, healthcare is like very kind of incremental innovation. That don't get me wrong, it's much needed, uh, to improve processes, to get things like, you know, to work 5% better.
[00:16:14] I think that where venture capital is best suited is to make. Investments and partner with entrepreneurs that are really rethinking how the world works, right? And so, so this idea of pharmaceuticals is a different paradigm than the existing one, which is mostly about pharmaceuticals, right? Drugs. And so, pharmaceuticals is basically using different, um, energy stimuli that could be electrical stimuli or uh, light or sound or magnetic stimulation to, as Amy was saying.
[00:16:48] Modulate different kind of brain systems and brain networks to put it differently, how different parts of the brain communicate with each other. Right?
[00:16:56] Christie Nicholson: And this is to improve. It dramatically alter it. Will it, does it make any kind of, you know, permanent long-term solutions?
[00:17:06] Matias Serebinsky: That's, that's a interesting question about the long-term solutions because, uh, an interesting thing about, uh, neuromodulation, this idea of using energy to stimulate, uh, the brain is that I.
[00:17:19] The way I explain it to my sister or my mom or my dad is that it's somewhere in between a drug and therapy. What do I mean by this is actually retraining your brain to behave and act in specific ways. Right? And so in that sense is more long term. Actin than, let's call it SSRI or you know, pretty much any other psychiatric drug.
[00:17:44] Right. Like an
[00:17:44] Christie Nicholson: antidepressant, which is an SSI. Yeah, and
[00:17:47] Amy Kruse: I was just gonna say that's, that's building into that topic that we talked about, which is neuroplasticity, right? As you put energy into these systems, the, the networks themselves reshape, right? And, and that's why I think we see durability, what we call durability of these, of these treatments, right?
[00:18:04] Because they're actually changing the long term. You know, firing and structure of the brain, which is amazing. And I also think what's great is that in the context of the work that we think about, we think about both clinical applications, but we also think about beneficial applications, human performance applications, you know, I think there's a, there's a broad space there.
[00:18:23] Matias Serebinsky: Yeah. I, uh, there's a, I wanted to give an example that really plays into that. A company we invested in uses transcranial focused ultrasound. What, uh, Amy was mentioned before to. Stimulate or downregulate actually a part of very, uh, deep part of the brain called the amygdala. And this part is, you know, associated with fear or fight or flight mode, which is what folks with, uh, experiencing post-traumatic stress disorder struggle with.
[00:18:51] Right. What's interesting about transcranial focus ultrasound is that if you zap or stimulate that part of the brain, um. Experienced meditators will say that they are in a similar state that they enter when they've been, um, meditating for 10 hours. Right. That's kind of interesting where, how, you know, technology that can be used for, uh, PTSD can also be used to get into this state.
[00:19:18] That's a deep meditative state that it may take you 10 years to get to.
[00:19:23] Dan Blumberg: Can you actually paint a picture of how does this ultrasound work? How frequently do you have to do it? Where do you go? Like what does it look like? What does it feel like?
[00:19:30] Amy Kruse: Yeah, so it's, it's still in development now, but it essentially, ultrasound is sound waves, right?
[00:19:36] So they're using similar types of frequencies that people have been using for. You know, decades now to do actual imaging. But the part that's focused right is essentially, uh, you know, a way of lensing. So imagine it as a lens, and you're actually able to focus those sound, that sound energy, those sound beams into the depth of the brain.
[00:19:56] And then you, you, you modulate it in the same way that you would modulate sound. So is it 10 hertz? Is it 15 hertz? Um, in general, it follows the same type of, um, protocols that people have used in like transcranial magnetic stimulation. So once a day, you know, somewhere between five to 10 minutes a day, and then the person comes in and experiences that over the course of a week.
[00:20:18] Um, so it's pretty exciting because it's, it's something that can actually get into the depth of the brain, whereas magnetics and electricity have not, they mostly stay in the cortex.
[00:20:26] Dan Blumberg: And do, do you have a sense of, is it something you do? Once for a couple days and then you don't go back again for years or, yeah, so,
[00:20:33] Amy Kruse: so right now people are experimenting with protocols that will, uh, take essentially the, a week long, um, and see durable effects probably up to six months, maybe a year.
[00:20:44] We're, you know, as people are working on the clinical implications of this, we're figuring that stuff out. Um, that's where we're talking about durability. Some people will probably be better responders than others, but it's intended to be a treatment that would easily last for months, if not longer. And
[00:20:58] Matias Serebinsky: then, uh.
[00:20:59] The other answer to the question is that we don't know because it's so early, and so I gave
[00:21:04] Amy Kruse: a very sciencey answer. Sorry, Mattia, so
[00:21:06] Matias Serebinsky: it's No, you're absolutely right. Specific. Um, and, but, but what's my point here is that there could be a future where actually there's a very, very small focused ultrasound device where you don't need to go to the clinic and you can do it at home totally for 10 minutes a day.
[00:21:20] And so maybe you just get a maintenance. Dose once every few months. And that's it again, that that's not the future that exists today. Yeah. But there are a lot of very, uh, solid reasons in terms of how technology is progressing. And what I mean in more particular is miniaturization and how you can make these components way smaller so you can actually get it at home.
[00:21:42] Amy Kruse: Moore's law, again, Moore's Law
[00:21:44] Christie Nicholson: R right. Moore's Law being the, uh, exponential reduction of the amount of power on a chip. A lot of people might be thinking, well, we remember for those of us certain age, the electroshock therapy and what came out of that and the negative associated with that, but we're talking about very small, low low.
[00:21:59] Can you give a sense of a sense of Very almost.
[00:22:01] Amy Kruse: It's very. Particular to brain regions, right? So, uh, electroconvulsive therapy, ECT, which by the way is still effective. It's effective, it just has side effects, right? Uh, memory disruptions and other things like that. Think of that as like the big knob, right?
[00:22:17] You, you, you couldn't control that energy going through the brain so that the entire brain got all that energy. Right? Now when we're talking about focused ultrasound, you're saying. I only want to augment this part of the brain like he was talking about, like the amygdala or somewhere in the prefrontal cortex.
[00:22:34] You can be that specific.
[00:22:36] Christie Nicholson: That's amazing. That's amazing. Okay, so you're both investors, so you take two lenses. Both of you have a very strong interest in science as well with both of those lenses in science and business. What's the real deal coming out of, you know, you know, the hype that we're talking about and what you're excited about, what's really going to make a significant and meaningful change in wellness and flourishing of health?
[00:23:01] I.
[00:23:01] Matias Serebinsky: The reason why this is important, and going back to Amy's, uh, kind of what's changed, the why now of all these, the other reason why the why now is that we are in a huge mental health crisis, right? And I'm assuming that's why at South by Southwest we're having this conversation, right? And it's not getting any better anytime soon.
[00:23:22] And so. So when I think of why it's important to discuss this and why it's important to invest in this, it's because we actually need a lot of solutions that we're not getting today. That being said, many of the things we discussed I think are the real deal. I'll, I'll kind of maybe mention another one that's.
[00:23:39] Uh, quite interesting. And again, it explores the frontier of mental health, which is the gut-brain axis. And so what does this mean? The idea that whatever's happening down here in our gut has a huge impact in our mental health. And by modulating, by changing what's happening in our guts, we can actually change our mental health.
[00:24:00] So, uh, an obvious example of this would be, uh, food as medicine, right? Like what you eat has an impact on your mental health. And there are a lot of studies and data showing this, and very interesting one is around the ketogenic diet. So, for example, folks that have done and followed the ketogenic diet are experiencing extremely, uh, positive benefits.
[00:24:23] For schizophrenia or bipolar disorders, these kind of diseases that are mostly intractable today. And these people go into remission. So by something, you know, quote unquote as simple as following the diet, they can go into remission. Um, another example, which again, it's a little bit pushing the frontiers of mental health.
[00:24:42] Is what's called FMT Fecal Matter transplant, literally getting poop transplanted from a healthy donor. And today we, we have studies in animals and also in humans where by getting poop from a healthy donor, your symptoms of uh, things like bipolar disorder can get a lot better.
[00:25:03] Christie Nicholson: I think everyone's sitting there going, really?
[00:25:06] So, yeah. Uh, yeah. I see, I see. Halfway down in this stage. She's like, wait, wait a second. I see somebody nodding their eye. So the, this is literally a poop coming from one person or animal being placed in some sort of a capsule. I hope that's safe and then ingesting.
[00:25:23] Matias Serebinsky: Yes. Um, and, and so, so it's ingested in a capsule.
[00:25:27] It can also be an anima, uh, as well. There, there are like many ways to get it. Again, this is very controlled settings and, you know, don't do it at home. Yeah,
[00:25:36] Amy Kruse: yeah. Don't do it at home. I don't think anyone's gonna do this at home.
[00:25:40] Matias Serebinsky: You, you would be surprised.
[00:25:42] Amy Kruse: I did. I did wanna add onto that and say that we're, we're actively looking at this space as well, and, and the cool thing about.
[00:25:51] Understanding the gut brain axis now is that, I mean, most people don't know this, but there's as much nervous system in your gut as there is in your brain, right? Like they're, they're really, they've never been separate. They've all actually always been together. And so, uh, as we've started to look at these targets in depression and schizophrenia, even in neurodegenerative disorders, you can also come up with, uh, probiotics.
[00:26:17] That put those, and it doesn't have to just be a fecal micro transplant, it can actually be probiotics or other types of food as medicine supplements to actually make sure that those good bacteria are making the products that then influence those conditions. And so I think there are a lot of ways for us to think about, you know, how to start modulating the gut that are really exciting
[00:26:39] Dan Blumberg: with, with both of these areas.
[00:26:41] Mattias, when you, when we asked what's hype, and you talked about psychedelics and one of the things you raise as an investor is. Who's gonna pay for this? Right? And so I'm curious with, with both of these examples here, is there, is there less of a, uh, a question mark of who's gonna pay for these things?
[00:26:55] Or, the regulatory is, is, is less of a, an issue with these? Is, is that part of why these two things are also, uh, the real, the real deal?
[00:27:02] Matias Serebinsky: So when we think of who's going to pay for, uh, what we should also think when they will pay for it. So I would think that as a first line. Therapy. They will not pay for that because there are other more, uh, affordable ways of treating someone with mild depression or anxiety.
[00:27:19] But as a second or third or fourth line treatment, when nothing else works, then it makes sense to pay for that. What's also interesting to consider is with this idea of precision psychiatry or precision mental health, also the who's paying for what will be a little bit easier because if you can really predict.
[00:27:38] What will work for whom then payers will be more, li more inclined to pay for something if they know that that's going to work. And they don't need to cycle through, you know, different treatments, expensive treatments, without knowing if they will actually work.
[00:27:53] Amy Kruse: One of the things I get excited about in this space, talking about food as medicine, talking about supplements, is it's actually another route to market as well.
[00:28:01] Right? So what does that mean? Meaning that that probiotics. Right now, because they're essentially treated as food by the FDA, you can actually get them into commercial products. Like we're starting to see more and more functional foods out there, people adding probiotics to the protein powder, to the whatever.
[00:28:21] And so I'm very excited about it because it's, it's another way, right, of getting things into the market, right? That as an investor is very appealing because, hey, there's this clinical route we could. Talk about it from a, um, you know, an indication and an outcome, a clinical outcome, and we can also say, Hey, we already know that these are beneficial, and we can start putting them into other products as well.
[00:28:44] Yeah.
[00:28:45] Matias Serebinsky: Um, it's again, going back to this idea of hype and, and not hype and what's real and what's not. Another area that has been. Extremely hyped is this idea of digital therapeutics using an app, using some sort of digital game to actually get, uh, improvements in your mental health.
[00:29:04] Christie Nicholson: So what would be an example, I, you may not wanna call one out, but can you describe a little bit more about what kind of game, digital game is actually not.
[00:29:12] Worth our subscription money?
[00:29:13] Matias Serebinsky: Well, well there's a company called Para Therapeutics that, uh, filed for chapter 11, so that's Oh, okay. Unfortunately. So you can talk about that one can dis to call out. Um, and, and then there's a, there's a video game that is being prescribed for A DHD for children experiencing A DHD.
[00:29:29] And it showed to be, it chose to be quite effective. But it's been really hard to get reimbursements. It's really hard for doctors to prescribe a video game because it's so different, right? And so there was this wave of investments in companies working in, uh, digital therapeutics and that kind of wave crashed, and that was very much related to hype.
[00:29:50] But what I'm seeing now is similarly than with couch surfing and Airbnb where. Like there was something there. It's just like, you know, no one had figured out exactly what was the business model until Airbnb happened. Well, I'm seeing the same with digital therapeutics, where you are starting to see kind of like the kernels of truth in this hype and people coming up with.
[00:30:14] Ways that actually can bring these products to market. So I, I do think that, again, thinking about accessibility and affordability, things that are extremely affordable and scalable, like a digital app or digital, digital therapeutic that can be prescribed for a specific condition is the future. And it's a future that makes sense.
[00:30:34] Amy Kruse: Yeah. And I, I was gonna add onto that because I often think of, um, you know, people who work in innovation and people who work, uh, in understanding how it happens. There's, there's sort of two types of innovation, right? There's technical innovation, like some of the science that we're talking about. But sometimes innovation in the business model is as important because there can be an awesome technology, right?
[00:30:56] And it just. Doesn't go anywhere. So I think both are really important and I think we're seeing that like we are going to have to have business model Innova innovation in the psychedelic medicine space. We were talking, you know, backstage around, uh, Lycos Therapeutics now rolling out, hopefully I. You know, getting approval this year in 2024 for MDMA, for PTSD, it's actually one of the first times that the FDA has considered a therapeutic in conjunction with therapy, right?
[00:31:25] Right. That the regulators are essentially saying. It is a business model that includes the drug and the therapy, and I think that's, we're gonna see more of that. Yeah. Right. And
[00:31:36] Christie Nicholson: well, right, but that's important that everyone understands what Amy just said, which is that the therapeutic is, of course, the medicine goes with a therapist.
[00:31:47] So presumably in this case, not a digital therapist just yet, but a human therapist and that that is the protocol. So not only is it a business model, is that what I'm hearing? It is the protocol. So that is a medical protocol and they have to be linked. Maybe we should let everyone know why do they have to be linked just on psychedelics and therapy.
[00:32:04] Matias Serebinsky: So this specific therapeutic that. It's going through the process of getting approved as a, as a drug. Um, it's MDMA and Rick Dublin, the founder of Maps, always says that if by just taking Molly people would be cured, everyone at a rave would have no, no mental health issues, and that's not the case. So that's, that's kind of like the short answer on why you need the therapeutic.
[00:32:26] But the longer answer is that, you know, you need someone to help you work through that experience. And to help you make sense of that psychedelic experience. Right? And so traditional psychotherapy is one way of doing that. There are all, you know, a lot of other ways. I don't want to sound very prescriptive.
[00:32:45] That's the only way. But you do need to make sense of that experience, you know, during an after.
[00:32:51] Amy Kruse: Yeah, and I would just, you know, 'cause I'm, I obviously tie everything bla back to neuroplasticity, which is obviously my theme. Can you just explain what that word means? Neuroplasticity? Yeah, yeah, yeah. So, so again, it's the ability of, of the brain literally to change its function.
[00:33:06] So it changes, its firing, it changes its wiring. There are many ways to induce neuroplasticity. Right? Right. So I, I, uh, one example is a, it's sort of a clinical negative example, but imagine after a stroke when somebody loses function. Right, so they lose the ability to move their arm. They go into therapy.
[00:33:25] And literally you have to start reworking the networks in the brain to, to reroute that function so that they can now move their arm again in some cases.
[00:33:36] Christie Nicholson: Um, so there's something called the visual cortex in our brain and it controls how we see some portions of that type of cortex will then move to motor.
[00:33:46] So the actual regions, which were thought to be, you know, semi right, permanently dictated, you just use this for watching things, for seeing things. Suddenly I'm gonna take some of that and you're going to use it to actually move
[00:33:59] Amy Kruse: your body. Right. It's pretty cool. The brain is an amazing organ, folks. So, so anyway, just to tie it back to the neuroplasticity piece, the really interesting thing about whether it's, you know, let's use the context of psychedelic medicine.
[00:34:11] You may hear in the literature or in, in, uh, in the paper, some people call them psycho plastic. They, they have the ability. So these molecules, um, have the ability to reinduce neuroplasticity in the brain, but you have to have the therapy. You have to have the context, the integration, in order to sort of make that change.
[00:34:33] Stick. Right. It's not like, that's why he was saying it's hype sometimes it's like magic pixie dust, you know? We're just gonna, you know, cure everybody with this. It's really about the work. Put it
[00:34:40] Matias Serebinsky: in the water. Yeah. Yeah.
[00:34:41] Amy Kruse: Put it, put it in. So it's like
[00:34:42] Christie Nicholson: having a physical therapist for the stroke patient that's also getting that, okay.
[00:34:46] Amy Kruse: Right. Exactly. Got it. And it's, it's to really consolidate what we call consolidate that, um, that neuroplasticity, that change, that's really important. And I think that's an important context for them.
[00:34:58] Dan Blumberg: I wanna talk more about the, the, the business models that you brought up and, you know, as, as investors when you're, when people are pitching you on new ideas, new new companies, what are the kinds of questions that you're, you're looking to answer when it comes to business model questions you're asking when, uh, when you meet with, uh, startups?
[00:35:14] Amy Kruse: Yeah, I mean, I, I think, uh, obviously there are things that are. Truly clinical, right? Like they're, that's the only lane they're in. And so, you know, at that point they have to know their pathway. Um, you know, you wanna see them having the right, um, you know, connections and consultants and, and putting that package together, I would say where the innovate.
[00:35:33] So that's a kind of a known thing, right? Both known for drugs and known for devices. I would say in a lot of the things that we've been talking about, there are really new ways, and so when I'm looking for in companies is I'm looking for companies that are starting to build those, uh, connections with those potential.
[00:35:51] Buyers or collaborators or, you know, other things like that. So it's really around, you know, what legwork are they doing on the business development side to ensure that there's a pull or a potential interest in, in what they're working on. That could be, again, maybe a pharma partnership. That could be a commercial partnership that could be working with another device.
[00:36:13] Company that provides compute power or you know, those types of things. And so I think it's, it, it's really incumbent upon startups right now to do a lot of that legwork because as you know, the funding environment has been challenging over the last few years. I think people are looking for, for more and more traction, as we would call it in the companies that we're, that we're looking at.
[00:36:35] Matias Serebinsky: Also hard to be overly prescriptive because we, you know, are in the business of investing in n of ones in exceptions to the rules most times. So, so hopefully, you know, someone comes to me with the, the exception to the rules, not the rules, but, um, I, I, I guess I, I have two ways of, um, thinking about this.
[00:36:53] One is that we are really interested in new biology or like understanding new understanding of biology, and that usually looks like platform companies, right? That then can have. A lot of different applications and in indications in, in the sense of, you know, it could be used for PTSD or depression or anxiety or Alzheimer's, and, and also that's a different conversation.
[00:37:13] Interesting that the boundaries between neurology and psychiatry are a lot more blurry than what. People, you know, make you believe so, so, so having said that, I think the business model innovation comes into how do I partner with different players so I can validate or de-risk my platform without spending hundreds of millions of dollars to kind of validate it myself and.
[00:37:37] Run each one of those clinical trials, um, myself. So, so that's kind of one way of, um, uh, thinking through a business model innovations. And then the other one's more on the, on the side of healthcare and less on the side of biotech, which is. Distribution. Right? There are a lot of different effective ways to treat mental health disorders.
[00:37:58] What's really hard is to get in front of patients most times, right? And also to get in front of the practitioners, the clinicians that are, can deliver these treatments. So, so today when I look at companies in in healthcare or care delivery, a lot of what I look at is how can they have a better distribution system?
[00:38:17] I'll give you one example of this. There's a company called Here, journey Club. And they, what's it called again? Hero Journey Club. And they deliver therapy through video games. So you may be playing Fortnite, you know you're a teenager, you're playing Fortnite, and you're getting psychotherapy. So that's a very clever way of doing How does distribution, how does that work?
[00:38:36] How
[00:38:36] Amy Kruse: does that work? There's psychotherapy embedded within the game. I love it. That's exactly right. I love it. I love it. Oh my gosh, I wanna try that. Yeah. Well, I was gonna, and, and one thing I was gonna say about the partnership piece and, and you know, on the, you know, what we're looking for, we're, we're at a really amazing time right now because there is.
[00:38:55] There is in addition to the, you know, typical capital that people are familiar with coming from venture, uh, there is so much other, what we call non-dilutive. When we say non-dilutive funding, we mean they don't take, these people don't take equity, therefore the founders don't get diluted. Um, but, you know, ARPA H has just stood up.
[00:39:14] So ARPA meaning, uh, you know, an an ARPA type thing, they do projects, they do high risk work, has just stood up for health. Right. This is gonna have a massive impact on our space because they are able to move money very quickly. Right. And they have a lot of money. They have a lot of money, and they can put it on very specific projects and focus areas.
[00:39:36] For example, they just announced their like, you know, focused program in women's health. This is, it's gonna be massive. Right? And so I think the other thing that I look for in our founders and the companies that we work with, and I try to help them, is accessing these other resources and sources of capital because it's so critical now
[00:39:56] Dan Blumberg: with these companies with the long.
[00:39:58] Uh, amount of time that it takes to prove these things? How do you track progress?
[00:40:03] Amy Kruse: Yeah. I would say on the, on the clinical side, you know, it's, it's well established, meaning the, the, you know, the steps and stages that, you know, a company needs to go through, both on the pharmaceutical side as well as on the device side.
[00:40:14] I would say. And I used to use this phrase all the time, like, there are things that money makes go faster. Like you, you know, there are ways to, um, get into the clinic and do early feasibility studies and first in human, uh, types of trials that, um, that are very exciting. And I think people are really starting to understand how to.
[00:40:34] You know, kind of work in that space better. I would also say the thing that Mattias mentioned, which was partnerships, right? Like who are you talking to? Who are you building relationships with? Um, you know, oftentimes you can get, you know, a letter of interest or you can get some, you know, them signing on or even a paid partnership.
[00:40:50] Right, like other companies will pay you to do the work to de-risk it so they can kind of take advantage of it later. We see this a lot in pharma because pharma has essentially gotten out of the business of doing discovery, particularly in mental health and neuroscience. Like they're, they're literally have to rely on startups in order to.
[00:41:08] In order to do that work.
[00:41:09] Matias Serebinsky: Yeah, I, I completely agree. I, the, the way I think about it is that startups are about de-risking stuff and validating hypothesis, and that applies both. So, so of course in, in the consumer world, you can just like use revenue as your KPI, but that's, again, it's just one metric. That doesn't mean that the company will be profitable, right.
[00:41:31] Like, which ultimately needs to happen. Some
[00:41:32] Amy Kruse: companies are never profitable. Exactly.
[00:41:34] Matias Serebinsky: So, so the same, you can have the same kind of. Framework in, in biology as well. It's all about, you know, testing or validating certain hypothesis and de-risking stuff. Right. And, and you can kind of build a very clear roadmap both in biology and in software.
[00:41:51] Amy Kruse: Right. And how efficiently can a company do that? Right. I think right now, especially again in the landscape and the fundraising landscape we're in right now, companies that are efficient, efficient users of capital, um, you know, really trying to. To preserve that capital are the ones who live long enough, right?
[00:42:08] To prove out these points.
[00:42:13] Dan Blumberg: That's Amy Kruse from Satori Neuro, Christie Nicholson from the Studio for Communicating Complexity. Mathias Serebinsky from PsyMed Ventures. If you really want to go deep on the future of mental health and wellness, you should check out Business Trip, the podcast that he co-hosts. The link is in the show notes, and
I'm Dan Blumberg.
[00:42:29] And this is CRAFTED., a show about great products and the people who make them crafted is produced in partnership with Docker, which helps developers build, share, run, and verify applications anywhere without environment confirmation or management. Docker, suite of development, tools, services, and automations accelerate the delivery of secure applications.
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[00:42:57] And CRAFTED. is produced by Modern Product Minds where I advise companies on product discovery, growth, and experimentation. Learn more and sign up for the Crafted newsletter@modernproductminds.com and please share this episode with a friend because transplanting CRAFTED. is safe and effective.
[00:43:14] Christie Nicholson: I think everyone's sitting there going, really?
[00:43:17] Is he halfway down in this stage? She's like, wait, wait.