NovaXyon Entrepreneurial Seed co-founder Ara Katz On Intestine Well being, Tech Bros And Mike Ovitz

Seed co-founder Ara Katz On Intestine Well being, Tech Bros And Mike Ovitz

What’s got 38 trillion microorganisms and almost as many products to tame it? The microbiome.

It’s boom time for gut health. Or products aimed at the gut anyway, which is said to affect the immune system, inflammation and even our moods. If some of the claims these products make seem dubious, well, that’s by design says Seed Health co-founder (and co-CEO) Ara Katz. Her company aims to disrupt the $50 billion global probiotics market with their first consumer product, the DS-01 Daily Synbiotic, which is clinically validated and—in layman’s terms—makes you poop better.

Seed’s probiotic works on the microbiome, a community of 38 trillion microorganisms that live in and on the body, and perform critical functions like digesting food and synthesizing essential nutrients. Unlike other probiotics, this one arrives in a glass jar so chic you might actually leave it out on the counter. But the product, developed with co-founder Raja Dhir, is also something of a Trojan Horse. In 2021, Katz led a $40 million, Series A round for the company, which includes an environmental research arm called SeedLabs, which studies how to use microbes to tackle the impacts of climate change. (Gwyneth Paltrow, Karlie Kloss and Cameron Diaz are investors; Founders Fund, which has backed SpaceX and Stripe, also participated.) SeedLabs’s early work includes creating a probiotic for honeybees and sending microbes into space.

In a previous life, Katz was the co-founder and CMO of Spring—a mobile commerce platform backed by LVMH. (Spring helped launch ApplePay on the iPhone.) But a personal loss inspired her to pivot. Over breakfast for the new Forbes series “Cereal Entrepreneur,” Katz talks venture capital’s love-hate affair with the microbiome, working with Bob Dylan, and what she learned from her father-in-law, CAA founder (and one-time Disney CEO) Mike Ovitz.

MICKEY RAPKIN: What are we eating today?

ARA KATZ: It’s oatmeal with flax and wild blueberries. And a lot of cinnamon and fresh ginger. I make it for my kids all the time. (laughs) It’s my microbiome breakfast.

Planting A Seed

RAPKIN: Let’s start with Seed. Did the VCs you were pitching understand the microbiome? Or did their eyes glaze over?

KATZ: It was actually worse—contextually. You had this surge of capital. I always feel venture capital is a big immune response. It’s like there’s an infection and everyone goes to it. Then all of these companies didn’t end up yielding anything. We can go into why we think that happened. You almost didn’t want to say “microbiome.” Then it comes back. Basically, every time there’s a scientific discovery in microbiome that shows you can lose weight or look younger the field blows up again. Which is maybe human nature. But we actually had two decks.

ERIC RYAN: For different investors. Smart.

KATZ: We had to articulate things very differently when you’re speaking to the life science-tech investors and the CPG world.

RYAN: What ultimately sold investors on the product?

KATZ: All of these health and wellness brands were telling people that they do all these things—things that you would never be able to say on a package in Europe. Which is a big part of how I got into this. We’re working with scientists that never put their name on a consumer business before. When people think science they think cold, clinical, complex. They think pharma. We had that kind of schism. Who doesn’t want brands that are beautiful? Who doesn’t want that life on Instagram? It was really about reconciling those two worlds. There was an opportunity to re-brand science.

RYAN: Re-branding science. I love that. There is no greater marketing challenge than translating complex science into a simple expression for a package or Instagram.

RAPKIN: It’s almost like the beautiful, glass package was the Trojan horse so you could go deep on the R&D front. Is that how you see it?

KATZ: The world—particularly in business—likes to look at your LinkedIn and decide who you are. Which is a terrifying and dangerous proposition. Fundraising is like storytelling. What would I uniquely be able to take a check for? Where someone sitting in a partner meeting would be like, “That person gets money for this. That makes sense.” The pitch was primarily around DTC probiotics and even a subscription. Certainly there was some bigger vision to it but primarily it was: How are we going to create a differentiated product? The evangelism for the category was way ahead of the evidence. How could we package the movie differently?

RAPKIN: With the probiotic and consumers, is it as simple as telling people, “Hey, you’re gonna poop better?”

KATZ: You have to meet people where they are. Not to get into more gendered attributes of products, but I remember years ago we did a partnership with a media platform that was very focused on sports bros. And it was like, “Best shit of your life.” That’s what converted and that’s what people loved. But I can tell you all the biohackers and a lot of the practitioners in healthcare—both allopathic and integrated functional—they want to talk about gut barrier integrity, they want to talk about NRF2 expression. The best brands in the world provide 1,000 doorways for people to walk through.

A Personal Journey

RYAN: Entrepreneurs always talk about “moving fast and breaking things.” Has that been your path?

KATZ: Absolutely. I come from bro-tech world. Almost everything I did until Seed was move fast and figure it out while you’re going. Building digital products­—there’s user testing. But you really do push something out into the world and kind of don’t know. When I launched Spring we were breaking things with 420 of the world’s best brands who are not used to moving fast and breaking things.

RAPKIN: Spring was back by LVMH. You helped launch ApplePay on the iPhone. Then you left the company. Of that moment you once said, “As a woman in tech, it wasn’t cool to resign from a company.” Would you unpack that for us? Did you feel you were disappointing investors? The team?

KATZ: Resigning as an employee is one thing. Resigning when you’re a co-founder—when you are one of the faces of something, and you were named on all of these lists? I actually have a very different experience than a lot of women in tech. I’ve had great mentorship and support from so many of the men in my life. I did feel very deeply that I was letting my team down. A lot of us go through these moments of our life where work is entangled in our identity in a way we’re not aware of. Then we go through a lot of work and growing up to disentangle our identity—or just to redefine what the work means, which is more my story, and understand what it looked like to prioritize life and create a better source of alignment. The most truthful version of the letdown—it was probably feeling that I had let myself down. It was a heavy moment. I think what’s missing in your question is that it was catalyzed by a miscarriage.

RAPKIN: I had read that. But I wasn’t sure if you’d want to talk about it today.

KATZ: I talk about it very openly. I think they’re biological miracles, which is maybe a different podcast. That life wasn’t viable. And the life I was living is not viable. I don’t want to live on planes. At a certain part in your career you realize what you’re capable of building and creating. Then you have to say, Where am I going to point this? It happened very quickly and was a beautiful, pivotal moment.

RYAN: What a beautiful thought. Thank you for sharing that.

Like a Rolling Stone

RAPKIN: The through-line in your work really is creating. Before Spring, you worked in film, producing an adaption of Howard Zinn’s “The People’s History of the United States.” Bob Dylan was in it. Do you have a good Bob Dylan story?

KATZ: That book changed my life. It’s the history of our country—not told by the victors and cis white men. It’s one of the most profound moments where you realize that your reality, and in this case our history of this country, is perceived by who tells it. Chris Moore—if anyone remembers Project Greenlight—he had the option with Matt Damon and Ben Affleck. Chris asked me to come produce it with him. And it was a beautiful experience. But Bob Dylan—he’s impossible to schedule with. It was unclear when he was going to show up. That was weeks in a row where it was like, He’s coming. No, he’s not coming. He’s coming! No, he’s not coming. I would say that I did not expect him to be so particular. He has his hat in a very specific way, the lighting has to be very specific. But at the same time, he’s Bob Dylan. And he’s earned it.

RAPKIN: Your parents were both psychologists. When did you realize you had the entrepreneurial bug?

KATZ: I grew up probably lower middle class. I had a wonderful childhood in so many ways, and I certainly did not want for food or clothing. But I definitely grew up with this sense that a lot of kids around me had a lot more. I also saw that my parents had no financial acuity whatsoever. But I had hustle. I remember where I placed my lemonade-and-brownie stand on Martha’s Vineyard one summer. It was very strategic. It was at the end of the bike path and right where the beach access was. I just remember at eight years old being like, “That’s a more strategic place.”

RAPKIN: You’re now married to a serial entrepreneur, Chris Ovitz. What kind of challenges does that present? When you’re a founder, it can be all consuming.

KATZ: Interestingly, we’ve ridden different waves at different moments. Somehow our intensity has lined up pretty well. By the way, he’s started and sold three companies since I started Seed. Me and my co-founder are always like, “What are we doing wrong?”

Exit Strategy

RAPKIN: What is your off-ramp then? Do you hope to sell to, I don’t know, Pfizer? What’s the plan?

KATZ: I know what the plan is not. Right now I don’t think the plan is to go public—with Seed Health at least. The public markets don’t really understand the microbiome. Ultimately, it really comes down to distribution for us. There is a moment where you have to decide, Do I need to take more dilutive capital to go try and build the infrastructure to get what we’ve built out to more of the world? Or do I go partner with somebody who basically can turn that on overnight? We’ve been quietly building for so long. We’re such an iceberg. No one is like, Oh God, you guys have a great bioinformatics team. They’re like, “I love your Instagram.”

RAPKIN: I see that. SeedLabs worked on a probiotic to help save coral reefs. That’s the part of Seed’s story that we don’t often hear about.

KATZ: We also sent microbes to space with NASA and the MIT Media Lab to look at how microbes could degrade—and then upcycle—plastic in space. The team got to experience a launch and the launch getting delayed. Actually, it was very much like working with Bob Dylan. It was like, You’re launching. No, you’re not.

RYAN: (laughs) Bob Dylan in space.

KATZ: I got an email from my son’s science teacher yesterday. He’s in second grade. And she said, “I just want you to know that we’ve been learning about this recent astronaut who went up to space, Francisco Rubio, and your company was featured in a news clip. And Pax told me about the microbes that you’re sending up to space to degrade plastic and create new biomaterials.” And I’m like, My son told you that? But yeah, that one was very exciting because it really is the embodiment of everything I didn’t put in those first decks when we were raising capital. But it’s something our whole team felt was a really historic moment in our journey.

RAPKIN: Your father-in-law is Mike Ovitz, the founder of CAA. What’s the best advice he ever gave you?

KATZ: I’ll say one funny story and one thing that I take away from it. We were negotiating something and he said, “This is what you do. You sit down with them and you say, Look, this can go one of two ways.” (laughs) I was like, “Michael, I am not in the mafia.” He goes, “I want you to just call them. And you tell them, This is what we’re going to do.” And from that, we raised the whole rest of the round. But it was very much, like, you just tell people what you want to do. Don’t waste time. Tell them exactly what you want. And that’s how you’re going to do it.

RAPKIN: Meaning we want X amount of money and this is what we’re going to do with it?

KATZ: No, these are the terms on which we’re going to take the money. Michael is known for creating the package—packaging the movie. He fundamentally understood that one plus one is three. When you put this actor with this director and this piece, that’s how you create these beautiful constellations of value and also how you get a lot of shit done. That’s how Raja and I have been packaging the movie since day zero.

RYAN: It’s so interesting. Because I always talk about myself as a showrunner—where I create concepts, bring together capital and a team. But I’ve never heard it articulated in that way.

RAPKIN: Coming back to cereal, what gets you out of bed in the morning?

KATZ: Well, literally, I have a seven-year old and an 18-month old. But existentially? I f— love what I do every day. I love the impact we make.

This conversation has been edited and condensed for clarity. In episode four, Vela co-founder Justin Kosmides talked about the luxury e-bike market, his company’s sudden move to Detroit, and why losing a fight with Walmart was the best thing to happen to his business.

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