Nathan Castro: What Loss Taught Me About Building Startups

Shamil Malachiyev: Hello everyone, and welcome to this week's episode of The Founder's Code. Our guest today is Nathan Castro, a PhD turned entrepreneur. He and his co-founder have raised $6 million to build Nanochon, a health company that's shifting the paradigm of cartilage repair and regeneration. Hi, Nathan.

Nathan Castro: Hi Shamil, nice to meet you.

Shamil Malachiyev: Likewise. Can you tell us a little about yourself and the vision behind Nanochon?

Nathan Castro: Sure. Nanochon was co-founded by myself and my business partner, Ben Holmes, as PhD students at George Washington University in Washington, D.C., back in 2016. My background is more directly related to 3D printing and biomaterials. What started my trajectory down this path was personal injury. I've suffered from knee problems pretty much my entire life, and in adolescence I needed multiple knee surgeries. I looked at graduate studies as a way to better resolve those problems and to introduce products that could alleviate my personal issues while providing the greatest impact to the largest population.

Shamil Malachiyev: And how big is the problem that you're trying to solve?

Nathan Castro: There are different levels of cartilage damage in the knee and in other articulating joints. We classify them between acute and chronic injuries. Acute injuries are things like accidents and falls. Chronic is what we term wear and tear, your body's natural process of breaking down over time. If you're an athlete doing high-impact sports, the probability of an injury manifesting is a lot larger than for the normal population. But even for the normal patient population here in the US, you're looking at millions of patients who suffer from joint pain at different severities, from dullness and limited mobility to the most severe cases that require total joint replacement.

At Nanochon we're developing a technology that addresses those early-stage, younger patients suffering from early-stage osteoarthritis or acute injuries, who aren't quote-unquote old enough to qualify for a total joint replacement. The normal lifetime of a total joint arthroplasty is 10 to 20 years, depending on the joint and the level of activity and the health of the bone that grows onto the implant. Our current target demographic is between the ages of 22 and 60. As the global population lives a more active lifestyle and lives longer, wanting to retain their mobility in their later years, addressing these issues at an earlier stage can prolong the need for the more invasive implantable devices.

Shamil Malachiyev: A lot of sportspeople retire right after that kind of trauma, so it seems an important problem to be solving. Out of all the possible directions in health tech, why specifically cartilage repair?

Nathan Castro: As I mentioned, I myself suffer from somewhat debilitating knee pain, and it's more anatomic than anything else. Without getting too far into human anatomy: your knee joint is composed of the end of your femur and the end of your tibia, and they mate like a pivoting joint. Your patella is suspended in a tendon that keeps those two bones aligned. For me there's a groove in the femur, the trochlear groove, that is a little shallow, so when the patella tries to keep my knee aligned it can slip and move side to side. That resulted in me partially dislocating my knee almost 50 times through my adolescence, up until the age of 18, when I had my first knee surgery. Then I had a subsequent injury in a major biking accident a few years later, which required my second surgery.

The idea was there from personal experience, but going into biomedical research was really a product of the mentors and people I crossed paths with during my academic studies. I didn't follow the traditional pathway. After high school I went to a trade school with the idea of going into IT and some computer-related profession, and I quickly realized it was a little redundant, not as exciting as I would have liked, and that it wouldn't satisfy my inherent need to create something. I grew up in a family of entrepreneurs. Both my grandfathers were small-business owners, and my father was a small-business owner. When I was in elementary school I'd sell school supplies to my classmates. I had that entrepreneurial spirit to be in the commercial space.

Shamil Malachiyev: How did that entrepreneurial spirit play out during your academic years?

Nathan Castro: It was serendipitous, the timing of when I started my doctoral work. When I started at George Washington University, they had just begun an initiative to raise their prominence in science and engineering and to invest a lot more in tech transfer and IP development. So it was a pivotal moment, both in my personal life and in the trajectory of the university. My background going into my PhD was in additive manufacturing, or as we colloquially call it, 3D printing. I worked with materials that could be 3D printed, specifically hydrogels, which are light-sensitive and convert from a liquid state to a semi-solid state when exposed to light. We used the stereolithographic technique to create structures that would otherwise be difficult, if not impossible, to make using traditional manufacturing methods.

Shamil Malachiyev: Similar to teeth fillings.

Nathan Castro: Exactly. In collaboration with the National Institute of Standards and Technology, where I was later a postdoc, and through the American Dental Association, teeth fillings are exactly what these hydrogels are. They're photocurable resins that harden when exposed to light. That was the first adventure I went through in my PhD studies. When I started back in 2011, it was right at the apex of the maker movement, when the governing patent for stereolithography and subsequent 3D printing had expired, so you had this big influx of tabletop 3D printers that could be assembled from off-the-shelf components. What I did for my PhD, and what became the cornerstone for my PI's lab, was take one of these tabletop 3D printers and retrofit it, replacing the tools that came with that model and making a stereolithography system myself. That let us explore embedding different biological materials or nanomaterials within these liquid resins and printing them into a specific structure to look at musculoskeletal applications.

Shamil Malachiyev: When you're working in one of those labs, do the inventions belong to you, the university, or the team sponsoring the experiments?

Nathan Castro: Typically, in doctoral studies at most universities, any IP generated is property of the university. When my co-founder Ben and I were pursuing our PhDs, there were several ideas we generated that we were able to lodge IP for. Some of it we licensed from the university when we founded Nanochon, to pursue our commercial venture. Since then we've generated even more IP that is solely owned by our company. But pretty much all IP rights are property of the university.

I should say that at GW, as they were investing heavily in tech transfer, they also participated in a National Science Foundation program called I-Corps. There's a national program and regional programs throughout the United States. Ben and I participated in the DC, Maryland and Virginia cohort. One of the requirements was that you, as a student and co-inventor, had to have already had IP vetted and lodged by the university. The idea of I-Corps is to do an extensive amount of what we call customer discovery, going out and speaking with any and all parties involved in the manufacturing, commercialization, or end use of your prospective technology.

Shamil Malachiyev: So kind of an accelerator model.

Nathan Castro: It was a 10-week program. Both Ben and I participated in the same cohort, but separately, because we had two different technologies whose commercial viability we were trying to determine. One thing that really helped Nanochon reach the position we have now is the combination of Ben's efforts and mine. During I-Corps, I'll be honest, I was the lowest-performing participant. You had to do 10 or more interviews every week, then give a synopsis of your findings, and use the lean-startup model to populate what's called the business model canvas. At the end of those 10 weeks you determine whether your technology is commercially viable and whether to proceed. I was the lowest performing because I had maybe 40-something customer interviews. Ben, on the other hand, was the best performing, with more than 100 customer interviews. He and I were recently on another podcast together where we spoke about our joint history. At the end of our I-Corps program, what became the seed that germinated into Nanochon was our decision to combine efforts. He's more the front-facing CEO type, and I'm more the research-focused CTO. That's what our positions are within Nanochon.

Shamil Malachiyev: How did that initial conversation to start working together happen?

Nathan Castro: It happened shortly before the end of the I-Corps program, when we both saw commercial potential. We both had the drive to pursue something we felt could translate effectively from the bench to the bedside. And because we were from the same lab, we'd been working together for a few years prior. As the first graduate student for my PI, I really helped her build the lab from a two-person team into one that now has more than 20 alumni. In addition to doing my own research, I was also the lab manager, so I would train incoming people and assist them on their projects, which is reflected in my publication history. Ben came into our lab originally intending to pursue just a master's, then fell in love with the work and saw the potential to stay on for his PhD.

We had a longstanding, good rapport. Something I want to reiterate is that going into business is more of an exercise in social skills than anything else, developing and managing relationships. People come from different backgrounds and personalities. If you really want to be successful, I like to maintain good relations with anyone and everyone I come across, because you never know when your path may cross again and lead to a venture, which with Ben and me it definitely did. I'll also preface Nanochon by saying that before I-Corps, Ben and I were critical members of another GW startup that we helped obtain 510(k) regulatory approval. We had some experience, just not directly related to an idea of our own creation. He and I were the engineering and regulatory side of Sonostek. That's where we honed our skills on what it takes to generate the fundamental data and evidence to show a potential investor the viability of your idea and your product.

Shamil Malachiyev: What does the day-to-day life of a health-tech founder look like?

Nathan Castro: Right now I wear multiple hats, aside from being an active participant in the lives of my partner and my four-year-old. At Nanochon we tend to run lean, so a lot of my work carries over from my PhD days. To this day I have a 3D printer in the other room that I use for R&D parts as well as test parts for some of our preclinical and bench testing. I'm still actively printing and tinkering. One of our lead investors has an organization that has helped us develop custom tooling to accompany our implant. From the time we founded the company in 2016 until now, we've gone through multiple iterations of the implant design and a couple of regulatory submissions, which presented comments we had to address, so we had to pivot a little. My current roles are the initial R&D and 3D printing, and I manage all of our contract services and manufacturing, being really efficient on capital expenditure and applying those finances to value-add testing that gets us either closer to the next milestone to unlock additional funding, or further toward regulatory approval.

Shamil Malachiyev: In health tech, especially with devices that have to pass a lot of hurdles before they're commercially available, there's a substantial period before you're generating revenue to cover the expenses. When raising money, how did you decide how much to raise, who to raise from, and how long a runway you'd need before the product could hit the market?

Nathan Castro: In 2016, when we founded, Ben was able to dedicate a bulk of his time to fundraising. The initial tranches of money came from friends and family, and we also pursued non-dilutive federal funding to support small projects that would be value-add and give us material to present to other investors. Ben led those efforts. I had to pursue the postdoctoral route, because I didn't have the ability to support myself while dedicating a lot of time to Nanochon. So I went overseas, worked in Australia for a couple of years on translational research directly related to what we're doing at Nanochon, then moved back to the US to the National Institute of Standards and Technology, and finally out to UC Irvine.

Shamil Malachiyev: How was the Australian period for you and for your co-founding relationship?

Nathan Castro: It proved a little difficult, mainly because of the time difference. Ben had received a grant to do a small-animal study. On my off time I would send codes to run on our 3D printer, and he would print some of the implants. During that period we also met a gentleman who is still involved in our company to this day, a serial biotech and medtech entrepreneur, and we were able to get guidance from him. It was really imperative to get value-add data. You can easily put money toward projects and experiments that won't necessarily give you a data set that provides a compelling commercial story, but will give you good science. Not to say biotech and medtech aren't based on good science. It's about the specific questions you need to answer to develop the story that translates into a commercial pitch deck, one that keeps investors interested and keeps your technology progressing.

Shamil Malachiyev: You mentioned a mentor who gave you guidance. Can you tell us about some of the people who played that role, and the main lessons they taught you that affected how you run the company?

Nathan Castro: First and foremost, my father and my grandfathers showed me what work ethic is and the amount of time and effort it takes to create a sustainable, successful company. Throughout my professional and academic career, since Nanochon is my first venture into industry outside an academic setting, a lot of my mentors have come from my academic profession. My PI in grad school allowed us the freedom to explore intellectually and to test our ideas empirically in the lab. My postdoctoral advisors, Dr. Atanasio, and most recently Dr. Hutmacher in Australia, are both successful entrepreneurs who have biotech companies and successful launched products. They shared a lot of insight into how to approach an idea, how to cultivate it, and gave me the confidence to continue, because that belief in yourself, plus some partial validation from other people you look up to, is the most crucial thing for anyone.

I'll say that my most recent PI, Dr. Atanasio, makes me a little emotional to talk about, because I lost my father while I was going through my academic career. I've gone through a bit of personal loss throughout my studies, starting with my mother having a major stroke when I was finishing my undergraduate studies, which rendered her quadriplegic. I had to tend to my academic studies and to my mother during her recovery, getting her to a point where she could partially take care of herself with the assistance of my sister and other immediate family, which allowed me to venture away from home. Coming from a Mexican family and a Hispanic background, it's really family-oriented and close. I was born and raised in El Paso, Texas, right on the New Mexico and US border. My parents broke the mold by allowing me to venture away for my own academic and professional pursuits, which I feel isn't very common for most people from where I'm from.

That let me take my first position at a government lab during my undergrad, which led to me publishing my first paper and my first book chapter, established some prominence in the undergraduate research community, and opened doors to fellowships that supported my undergraduate, master's and graduate careers. None of that would have been possible without the support I received from my parents. I finished my undergrad and stayed in El Paso for my master's. Shortly after moving to DC for my PhD, my brother suddenly passed away. And shortly after I moved to Australia for my first postdoc, my grandfather and my father passed away one day apart from each other. I had to fly back halfway across the world to tend to their passing.

Shamil Malachiyev: Sorry to hear that.

Nathan Castro: I moved out to Southern California in February of 2020, literally a month before the shutdown and the pandemic. Shortly after, my partner was pregnant with our son, and we found out in utero that he had several congenital issues whose severity we were uncertain about. Thankfully, my position at the time at UC Irvine allowed me to spend more time with my partner through that pregnancy. When my son was born, we spent his first three months of life in the hospital tending to his medical issues. Without delving too much into his condition, he has what's called VACTERL association. It's referred to as an association because there's no underlying genetic cause. It's a combination of physical abnormalities a child is born with, and VACTERL is an acronym for the parts of the body affected: vertebral, anal, cardiac, tracheal, esophageal, renal, and limb. To be diagnosed with VACTERL association, you have to have at least three of those affected. My son has that, and unfortunately it led to him requiring several major surgeries.

Going back to your earlier question about what inspired me, I'll say that being receptive to inspiration from any direction is critically important. In 2023 my son underwent a major surgery that resulted in him being hospitalized for several months. We were having difficulties stabilizing his blood chemistry, because due to his condition he suffers from kidney disease. We were told early on he'd require a kidney transplant, possibly sooner rather than later, but that if we minimize hospitalizations we can extend the time before that transplant is needed. In 2023 we were close to losing him because he suffered a severe infection. During his recovery he was given a lot of medications, one of which was difficult to administer because he would constantly vomit due to the nature of the medication. Being a scientist by training, and as most parents do, I looked for an answer to the problem my child was facing. I looked through the literature and found a rather austere journal article describing a methodology to treat some of the formula he was being given, to remove one of those components and allow him to tolerate it. As I've done historically throughout my academic career, I do the initial work to prove the idea and then present it. I took the initiative in the hospital, with the nurses and his nephrologist there, and educated his clinical team on the procedure. They received it without pushback, and are looking to adopt it for other patients who could benefit.

Shamil Malachiyev: Nanochon 2.0.

Nathan Castro: Not that it has direct commercial potential, although I'm constantly thinking of how best to optimize a process, or how to package it so a non-scientist parent or patient can use it with little to no issue. It's similar to what we did at Sonostek, where we were looking at peripheral IV access in patients with high BMIs, who are clinically termed difficult sticks and require imaging guidance to locate a vein and place a catheter. With that venture, Ben, myself and the rest of the Sonostek team developed a single-handed-use device to do peripheral IV cannulation under ultrasound guidance. I don't know if it's a unique mentality, but it's really about learning from practical experience, being confronted by a problem, and using the resources available to come to a solution.

Shamil Malachiyev: What helps you cope with all the challenges and difficulties that life throws at you? It must have a huge psychological strain, having so many losses. What helps you get back up and see a positive future, even during the darkest times?

Nathan Castro: Prioritizing my mental health was one aspect that really helped me talk through some of my feelings, talk through the losses, and develop healthy coping mechanisms. Even back when my mother fell ill, there's always a stigma, especially in the Hispanic community, of machismo, of men not speaking about their problems, not opening up, not being vulnerable. My parents gave me the confidence to walk down my own path. When I moved out of El Paso on my own for the first time, I made it a point to understand relationships, to see multiple perspectives, and to understand what really motivates and drives people. For me, it's the day-to-day satisfaction I have with even the most minute successes. In research, or in life in general, nine times out of 10 things don't go the way you planned, but there's always that 10 percent that does. I tend to use those quote-unquote failures as teachable moments: this thing didn't happen, I was expecting it to, so why didn't it, and how could I approach it differently? That's what motivates me to this day, relishing the small snapshots of positivity, even in the overall environment we live in, which is so competitive, where people are unwilling to speak respectfully to one another or give each other the time to express a thought or an idea.

Shamil Malachiyev: Without a fear of being assassinated.

Nathan Castro: Exactly, without the fear of getting shot, literally and figuratively. This also comes in when you're fundraising for your company. Not the assassination aspect, but there can be criticisms, harsh criticisms of your technology or your idea. Not allowing that to dampen your passion, but instead inspiring you to approach it differently, is critically important. My mental health, from individual one-on-one therapy to group settings, being able to be vulnerable and to obtain an objective opinion, matters a lot. A lot of times people confide in friends and family, and sometimes friends and family don't give you an objective assessment or the most healthy advice. I try to pursue advice from objective perspectives, so I don't get lulled into the doldrums of bias.

Shamil Malachiyev: The biased opinion of somebody who doesn't want to risk hurting your feelings.

Nathan Castro: Exactly. Risk is a very important concept for all facets of life. Some people are afraid to risk stepping out the door on any given day; other people are the antithesis of that. Being able to have the strength and the consciousness to take a calculated risk, emphasis on the word calculated, matters, because not all risks are good risks. I can attest to some risky behavior I've done in the past, both academically and personally, but it all has to be thought about and analyzed to a certain degree for the cost and benefit of that risk.

Shamil Malachiyev: If being able to risk being seen in a negative light is something founders almost need, in order to be assertive and stand their ground, what other qualities do you think being a great founder requires?

Nathan Castro: First and foremost, good social skills, being able to effectively communicate with someone. At the end of the day, a business is like a personal relationship. Ben and I have had a longstanding relationship for more than 10 years, and I'd be remiss to say we haven't had our slight disagreements here and there, but we've always had a shared, collective goal: to make Nanochon as successful as we can. In my own day-to-day, managing relationships with vendors, with service providers, and with our limited staff is all an exercise in relationship building, effective communication, and being mindful of other people's time. Sometimes to my own detriment I take a vendor's perspective too much into consideration, being lenient on lead times or missed deadlines, where I could stand to be a bit more rigid, because I have empathy and sympathy. That's another character quality I think is imperative: to have sympathy and empathy for your employees and those around you, because it makes you more relatable as a human being. You can emote and be expressive, rather than being the wizard behind the curtain, the distant, omnipotent being of the organization. You want to be approachable.

Shamil Malachiyev: Thanks, Zuckerberg.

Nathan Castro: You want to be vulnerable. It's a fine line to walk, being that strong, assertive, type-A personality, but also allowing yourself to be critically spoken to and to accept criticism, however harsh, outside of being blatantly offensive. You really need to know how to deal with both praise and criticism.

Shamil Malachiyev: How do you balance it within yourself, the will to seem nice and be perceived as good, but at the same time to not betray yourself, your needs, and your company's needs?

Nathan Castro: What's important there is being genuine. Some of the terms you used, a facade, a projection, I try not to carry on a facade or project a certain personality or behavior.

Shamil Malachiyev: So no fake it till you make it.

Nathan Castro: No. From a personal standpoint, you set yourself up for very difficult times if you tend to be disingenuous and fake certain aspects. Being the CTO of Nanochon, and a scientist by training, I rely on data. As you know, the story of Nanochon is the story of true and honest data. We don't try to oversell or overhype our technology. My critical role is to ensure that the commercial story we tell is reflected in the data, in hard truth and facts. There's no alternative reality or alternative facts in what leads to a successful business, because it all comes full circle. Your personal and corporate credibility carries a lot, especially at Nanochon, where we're developing a platform technology that can expand into other indications, other joints, or even other medical devices, because Nanochon is in essence a material-based technology. Not compromising your credibility for short-sighted gains is critically important.

Shamil Malachiyev: Playing the long game.

Nathan Castro: We're living by those words. We founded in 2016 and we're almost approaching our 10-year anniversary. Ben and I have been at it for near a decade, which isn't outside the realm of normal for a medtech company, though it would be even longer if we were not solely a medical-device company, if we were a combination product or a therapeutic, because there's even more regulatory scrutiny.

Shamil Malachiyev: As a last question: what would you advise all the people currently pursuing academia, PhDs and master's, who are looking at the entrepreneurial world of startups and feeling a bit hesitant or scared, with thoughts in the back of their heads that it's probably not for them, that they're not capable enough or assertive enough? What could you tell them to help them decide to give it a try, or even to decide whether it's really for them?

Nathan Castro: At the end of the day, the opportunities that you miss are the risks that you didn't take. I understand from personal experience how scary taking that first step can be. And I understand that not everyone has the support system I was gracious enough to have, because just this past May I also lost my mother, so my immediate family is dwindling by the day. That's where I value friendships and mentors and keeping good relations, because an individual support system doesn't necessarily start with immediate family. You can create a network, and I encourage people to create a healthy network for themselves.

My piece of advice is: don't be afraid to take even the smallest calculated risk, because over time you're building up your confidence and toughening your skin. What I learned from the time I had with my brother is that he and I were somewhat opposites. I was more extroverted; he was more introverted. I was more the risk-taker; he was very shy and timid. But that didn't stop me from conveying my experiences to him as a source of inspiration, to motivate him to pursue his own pathways, and to share that there's so much to life if you give yourself the ability to take the risk, take accountability for the results, learn from it, and put that effort into moving forward.

One last piece of advice I've carried throughout my academic career, in terms of testing your own ideas: sometimes it's easier to ask for forgiveness than to ask for permission. In an academic setting, where there's a hierarchy, I had ideas that weren't convincing enough to my PI or mentor. So I would go out, buy supplies on my own, do the initial experiments, prove or disprove the idea through empirical evidence, and then present that. I satisfied my own curiosity, but I also created something tangible for the decision-maker, whether that's your advisor, your manager, or the manager of a VC fund. Having something in hand to prove or disprove your idea, if for nothing else than to quell your own curiosity, is something that has led to good results for me.

Shamil Malachiyev: To me this sounds like: live a life that would minimize the number of regrets you'd have. We only regret the things we haven't tried, the risks we haven't taken. We rarely regret something we've done.

Nathan Castro: Mm-hmm.

Shamil Malachiyev: I want to thank you for being so open, authentic and vulnerable on our episode today. I want to wish you and Ben all the best in bringing Nanochon to market. I can't wait to see your first launch, and maybe take another interview to see how much you'll have changed by then and the lessons you'll have learned on the way.

Nathan Castro: I welcome the opportunity, and I applaud you for what you're doing. Getting into the personal lives of founders and giving us a platform to share our own experiences benefits me, because it serves as a catharsis for my own personal feelings, and it serves to enlighten your audience.

Shamil Malachiyev: The real life of a founder is much deeper and broader than what you see on LinkedIn posts.

Nathan Castro: Most definitely.