Unleashing Pet Relief with Jordan Sand

[00:00:01] Speaker A: Inventivity. What does it mean? The state of being inventive, creating or designing new things or thought. Hello, I'm, um, Richard Miles. Welcome to the inventivity pod. Join us as we speak to inventors, entrepreneurs and visionaries who are using inventivity to change the world. They will bring us alongside their journey as they share their personal stories from start to finish, including the hi, I'm. [00:00:31] Speaker B: Richard Miles, and welcome to our series exploring the animal health industry, a look at what it is, who's involved, and what the future is going to look like. Thanks to innovators and their inventivity for this limited series, we're able to talk to subject matter experts who are excited to give our audience a look into the growing and impressive animal health industry, and inventors who are utilizing their inventivity to help animals. My guest today is Jordan Sand. Jordan is the co founder and CEO of Cold Water Technologies, the makers of Happy Scratch. He earned his undergraduate degree in microbiology and biotechnology from North Dakota State University, got his phd in molecular and environmental toxicology from the University of Wisconsin Madison, and did his postdoc studies at the University of Wisconsin's Department of Animal Science. Jordan has 19 peer reviewed publications and is the recipient of multiple awards, including the Wisconsin Alumni Research Foundation Innovation Award, and recently was a finalist in the 2023 Cade Prize. Welcome to the show, Jordan. [00:01:31] Speaker C: Uh, thanks for having me, Richard. [00:01:32] Speaker B: So let's dive right in and start by talking about happy scratch. And then we'll circle back and start talking about you and your development, uh, into the entrepreneurial world. But first of all, this was your entry into the ARC prize competition. I remember the judges being really, uh, excited by it and impressed by it. So why don't you tell our audience, what does it do? And then how did you think about it? [00:01:52] Speaker C: So, happy scratch is essentially a pet supplement where we're looking to help animals that have dermatitis, uh, condition, itchy skin. The way this came about was when I was a postdoc at UW Madison. We were looking to raise money for a new building, and so the state supplied about half the funding and the other half was supposed to be raised by the department. And so the way we decided to do that was to look into, uh, low value products from the slaughter industry and try to find high value uses for them. So what our lab looked into was the intestinal mucosa from pigs. Now, that was being collected at the time, and it still is. It's used, uh, for heparin, the blood thinner. But we thought we could find a higher value use for the producers, where if we just took it, pasteurized it, and dried it, there's a lot of bioactive materials within there that should help animal conditions. So we went through and fed it to nearly every animal under the sun we could find, uh, chickens, cows, pigs, sheep. And we also had a model for dermatitis and mice. And so when we put this into the diet for mice, this spray dried powder, we found that a lot of animals didn't get dermatitis, and some of the ones that had dermatitis actually, uh, reversed the condition. So we went and fed it in a few more studies and purified out what we thought would be the active ingredient, which is part of the immune system called immunoglobulin a, or iga, and found that that was, in fact, the active ingredient. And then we fed it to some beagles for a safety study to ensure that there wasn't any unknown issues by feeding it to dogs and found that it worked great. And, in fact, in that study, we found that we reduced some dermatitis these pets were having in between their feet. So we were very happy about that and moved on and did a, uh, study with UW Madison's veterinary hospital and found that we reduced dermatitis in dogs where no other, even pharmaceutical intervention worked. So we've come about this. This is about five years in the making. I had to take some time off in between discovering this and starting cold water technologies, because I had started a separate company in the interim called Abbey discovery, which was commercializing a different. One of the, uh, many patents that I filed while I was a postdoc. [00:04:19] Speaker B: That's a fascinating journey, Jordan. And if I understand correctly, when you started to harvest the pig mucosa, right. When you started, you're just assuming there would be some beneficial effect, but you weren't sure where or what. Is that correct? [00:04:32] Speaker C: That's correct. And, in fact, when we went to the mice that had dermatitis and saw positive effects, we, of course, like every good researcher, raced to the literature to find out why it worked and come, uh, to find out. There's a condition in humans and actually, a lot of dogs called selective iga deficiency. It can be in as many as one in 200 humans, where you don't make enough iga, this immunoglobulin a that we're harvesting from these pigs. And what you find is people and dogs that have this condition are much more likely to have dermatitis, to have, uh, reoccurring gut infections. And really, it was a nice pathway for us to say, hey, this is why it works. We weren't setting out to find that out, but it was one of the things that we did notice. [00:05:19] Speaker B: That's a great paradigm and illustration. What happens, obviously, to, uh, a lot of inventors and entrepreneurs. You end up going with the thing that you weren't maybe looking for, but it's the thing that worked. So it's no better way of illustrating that than the story switching tracks a little bit. So you did your phd in molecular environmental toxology, and you originally started doing skin cancer research, right? [00:05:41] Speaker C: Yeah, that's correct. [00:05:42] Speaker B: But you found cancer research wasn't really for you, so why not? What turned you away from cancer research? [00:05:48] Speaker C: This might turn into my own little treatise. I have some issues about funding and how funding comes to certain labs. So when I was doing my graduate work, uh, we were working with a protein called protein kinase c epsilon, and it was mainly being expressed in the skin of mice, in these transgenic mice. Well, about halfway through, I found out that that particular protein had absolutely nothing to do with human cancers, especially skin cancer. And the fact that they had enormous amounts of funding to do work that I found not representative of the human condition was pretty demoralizing. And at that point was where I really almost swore off working with model species. So if I wanted to fix cancer in humans, uh, I decided I was going to work with humans. But since that's a lot harder to do, I switched to animal sciences for two reasons. One, because I would work with the animal that I wanted to fix, and secondly, I grew up on a farm in North Dakota, and so it was much more suitable to my background. And so, in that arena, we made great strides in trying to get rid of things like antibiotics and animal feed or fixing dermatitis and pets, we could go much, much quicker because we didn't have to try and translate it from a mouse to the animal we wanted to get to. We could just directly work with that animal. So I didn't like how indirect you had to be. And we've cured cancer in a mouse 100 times over, and it doesn't translate very well to humans. It didn't feel representative. It didn't feel like we were making the progress we should. [00:07:27] Speaker B: Interesting. So tell us about growing up on a farm in North Dakota. So at what point did you decide you did not want to go into farming? [00:07:35] Speaker C: Well, that's a good question. So when I decided I was, I have an older brother, and I just assumed he would farm. [00:07:41] Speaker B: Okay. [00:07:41] Speaker C: Um, both of my parents and, uh, three out of four of my grandparents had college degrees, so they at least had undergraduate degrees. So I was going to end up going to college, and so I went there. Actually, I should back up. When I was like 16 years old, our high school forced us to do science fair projects, and then we'd go and we'd actually compete with them. And I ended up going to international, uh, science and engineering fair in Philadelphia one year. That project was then recognized by the MIT Lemelson folks, and they picked me to win their national award when I was 18. Uh, and so I ended up spending time at Lawrence Berkeley National Laboratories, about three weeks there, about a month there, right before I went to North Dakota State University. And the real funny part about it, and I still laugh about it, was that MIt asked me to apply to go to school there. And then they told me, no, okay, I've never forgiven them. Uh, no, let it go, Jordan. But, yeah, so I figured I was good at the science. I was good at talking to people about it. I was creative enough to find new ways to go to look at old problems. And so that's why I decided to go to North Dakota State University and get degrees. I was interested in microbiology and then just kind of kept know it was something I was good at, and I just kept doing. [00:09:01] Speaker B: So, Jordan, tell me this. Do you remember, I mean, early on, say, uh, as a young kid, do you remember, was there a particular teacher, or maybe it was one of your parents, that you started thinking or kind of looking at animals in a different light? They're not just big creatures. They're things that have their own health and things that make them better or things that make them worse? Did you have sort of like an epiphany at some point, or did you just sort of, um, as you grew a little bit older and understood a little bit more about basic science, that it dawned on you that animals could be helped. For instance. [00:09:33] Speaker C: So when I was growing up, we did raise some pigs, and I found I hated them. Uh, they were ornery and they were mean, and they always got out of their pet. Yeah, I was not a huge fan of that, but it really came later. The guy postdoc with, uh, his name is Professor Mark Cook. Unfortunately, uh, he's passed on in the last few years, but. [00:09:53] Speaker B: Sorry to hear that. [00:09:54] Speaker C: Yeah. Me was, it was working with him that really I enjoyed. I wanted to go work for him because he was the number three earner in patent royalties from the Wisconsin alumni research foundation. He was very inventive. He'd started companies before I knew. By the time I was done with graduate school, that's what I wanted to do. He was working with chickens, and I said, ok, let's work with chickens. And that's kind of where it all started, really. And like I said before, I really wanted to get away from model systems and I wanted to work directly with the animals I wanted to fix. [00:10:28] Speaker B: So, Jordan, this is your second company, right? You funded one about ten years ago, is that correct? [00:10:34] Speaker C: Yeah, about ten years ago. [00:10:36] Speaker B: Did you get the bug from Mark Cook? I mean, you said he had a bunch of patents and he was sort of the top there. University of Wisconsin. Was he the one that sort of can do, in addition to doing good science, good research, you can actually get commercial success out of this. Is he the one that sort of taught you the ropes, uh, of what that looks like? [00:10:53] Speaker C: Yeah, he not only taught me, he taught most of the department the ropes of how to do that. I mean, I always admired and really came to embrace, no matter how great your science is, if someone can't buy it and use it, it's not particularly useful. You can sit in a lab and make these great breakthroughs, but no company will pick it up if you don't patent it, because if they can't protect it, they're not going to invest in it. And if they don't invest in it, they're not going to make a product. If you don't have a product and nobody can buy it, it doesn't matter how awesome it is, it just doesn't. And so looking at that, that's where I really wanted to start my own company. But growing up on a farm is the same thing. It's its own small company, realistically. And so that's something I was always interested in, but now I have the science background to start something new. [00:11:38] Speaker B: There seemed to me a fair amount of similarities between doing research and starting a business, right? Because both of them are about problem solving. You make certain assumptions, and then you got to test those assumptions. And sometimes your assumptions were correct, and sometimes they're wrong and you got to figure out what went wrong and fix them. How would you compare the two disciplines? Because the thing about inventors, particularly research inventors, you get to do both sort of at the same time, right? You've got to do the science part and the research part, and that has its own protocols. But then the entrepreneurial part, it's a little bit like the wild west at certain times, right? You just got to figure stuff out on the fly, and there's no one really there to say, well, in this particular instance, you do x, y, or z because nobody's done it before. So tell us what that experience is like sort of wearing those two hats. [00:12:22] Speaker C: The first thing I'll say is, I haven't done a whole bunch of science recently because so much of my time is spent doing the other parts of the business. They just are. And they're going to be marketing, making sure you make the products production, making sure you deal with city inspectors. Found, uh, myself a red tag today. Dealing with a lot of things that no one teaches you about in the science realm, it's like anything else. A lot of times, nobody has a better answer than your best guess. You're going to reach out, do your best. If it doesn't work, back up, do it again. And that's a lot like trying to discover new products. You'll only ever hear about the two or three successes. You won't hear about the 500 failures. That's not something anyone talks about. And I don't know. In my own opinion, I think there should be some way for scientists at least, to publish the failures, the things that didn't work, because that way we don't have to go down those negative rabbit holes again and again and again, just in different places. A lot of people I know have talked about doing something like that, but I don't really know how the mechanism would be for that. And I think the same thing you can kind of get from entrepreneurs, especially failed entrepreneurs, are people you can talk to and they'll say, hey, this didn't work, and this is why. And this is how we screwed it up. And in fact, my previous company, Abbey Discovery, I learned a lot from that one. So a little background on that particular company, it was another one of the inventions that I had while I was working with Mark. What it was was a new way to feed farm animals without the need for antibiotics. So we put this in the feed. It was made in egg antibodies. Animals would eat it and they wouldn't need any drugs. And the product itself worked great. But I don't know that we did the business the best. We didn't start with the right people. We spent too much money. We had too much staff. We went after the wrong customers, in my opinion. We partnered with the wrong partner. And at the time, it was the right thing to do. And in hindsight, it was the wrong thing to do. And there's no way to know until you're doing. You're eight years out looking back going, man, that wasn't right. I wish there was, like, an easier way to do it, but I don't know if there is. [00:14:29] Speaker B: I was about to say that in hindsight you realize your mistakes, but at the moment that you made the decision right, it's not like there's a fork in a path that says right way, wrong way. You just got to figure it out. Based on your information, you have. Obviously, since entering our prize competition, you've made progress. Uh, we're chatting earlier. You either have or you're about to close the deal on getting a manufacturing facility and then you'll probably start hiring soon. Sort of. Tell us where the company is at and what you think the next, say, twelve months is going to look like for you. [00:14:56] Speaker C: Before I did too much math, I thought I could hire most of the manufacturing out. It doesn't look like I can, so I've actually had to get all of my own manufacturing equipment at a fairly small scale. So I secured a facility in Middleton, Wisconsin. I ordered a dryer, which is now here. I, uh, have the ability to pasteurize and I'll have the ability to package. So we're going to keep it all in house, do it here today. Hopefully I'll hear from my receiving facility within the next couple of hours that they receive the first shipment of our raw material. And then we will, um, start manufacturing fry later this week, get things pasteurized, get it dried, and if I can make the packager work worth a darn. Which is another one of the fun things we do as an entrepreneur is fight with equipment. Um, once I get that to work right, we'll probably have stuff that will be ready for people who preordered. So we have about 40 or 50 people that have preordered and others that are waiting till we have products. So we're pretty excited about that and thanking all of our customers who've already preordered, uh, with us. [00:15:55] Speaker B: Wow, so you really are in the thick of it here. Tell us a little bit about, uh, financing. Right. That's always usually a tough nut to crack for early stage inventors is, uh, even if the idea, as you said, is a great idea and it has a lot of promise, somebody's got to be the first one in the pool in terms of either lending or investing money. How has that been for you? Where did you start? Was it just friends and family or do you have now serious, ah, investors looking at you? [00:16:19] Speaker C: Because this is my second go around. I learned a lot and a lot of people that I've known for a number of years have gotten into doing some institutional investing and so the first round of stuff was basically from my own bank account. I think I spent probably 15,000, $20,000 getting everything up and going. And then we got our first, uh, investor in June of this year. It was a half a million dollar investment, and so we're all set up and ready to go. With any luck, if sales pick up, maybe we don't need another one. That would be ideal for me, because who wants to sign off any more of your company to somebody else? But it's unlikely that that will be true. And so I've been talking with the second stage investor and, uh, already have for probably six months now. These are people that I've known for eight to ten years. Like anything else, it's all about relationships and finding the people that have that, knowing them for a long time and having them see you personally fulfill on promises, because most of these places are going to get 1200 people that apply for funding every year and maybe five will get money. So the only way to really separate yourself out is to have those long term relationships, to know these people and have known them for quite a long time in order to really get that sort of institutional investment. If you're talking about your friends, your family, hope they don't turn you down. But when it comes to getting institutional investment, it just takes a long time and you have to know people. I wish there was, uh, more of a silver bullet, but for people looking to try and do this, my advice to them would be to go to every conference you can talk to people, get to know them, get to know what their investing strategy is, understand their risk tolerance, and what you need to have in order for them to even give you a look, and then keep at know. There's no silver bullet to this. And the quotation I've always liked ends with determination, will solve all of the world's problems and always has. And I forget which us president said it, but I have it hanging over, uh, my bedroom door, because that's one I really believe in. [00:18:21] Speaker B: Consumer spending on pets has risen astronomically in the last few years. Something like $30 billion in the last few years. Have you noticed? Has that changed potential investors, their outlook on something like this or not at all? Are you hoped to be part of that market, of the sort of consumers? I'm willing to spend a lot more on my pet than I used to. [00:18:39] Speaker C: Yeah, the pandemic really helped me out, let's put it that way. Everybody got a pet and that's like an eight to ten year commitment. When you talk about dermatitis, the numbers I have are in dogs only, but I know cats get it, too. That ends up being about a $2 billion a year market worldwide. Three quarters of that's in the US. So it's about 1.75, $1.5 billion. And that really, uh, translates to about 10% of every dog in the United States gets dermatitis. It's a very large market, and since a lot of people got a, uh, Fur baby, I guess, for lack of a better term, uh, over the pandemic, there's just a lot more out there for us, and hopefully it is a fast growing market. As far as, uh, investors, where I'm at, there's not a ton, especially in pets. The people we have targeted, the first one was an early stage group that really focuses on, essentially, seed round investment. The second investor we have targeted is someone who has access to some of my raw material. So they have a vested interest in me working as well. Those tend to be the best investors because they want me to buy their stuff, and I need it. Uh, the nice part for me is that because of the pandemic, a lot of elective surgeries didn't happen. And so what that means for these people that are serving the heparin market is that there's two and a half years worth of, uh, heparin that wasn't used, but is finished on a shelf. So a lot of the supply contracts for the pork people kind of dried up. And so right now, they're looking for a place to sell it to. And so that's very good for me, but that's why, uh, I have a strategy for targeting who I'm targeting and why you have to have the why. Like I say, it usually helps out if you align very well with what they need. [00:20:29] Speaker B: And what is the current standard of care for a pet with a severe dermatitis? I mean, you got to go to the vet and get shots, or what do they do to treat that? [00:20:38] Speaker C: So there's a few options. The front line used to be giving your pet steroids. The problem with giving your pet steroids, while they're very cheap, typically what happens is the dog eats more and they drink more water. And because of that, while you're off at work, they can tend to lose control of their bowels. And now, all of a sudden, you have pee and poop all over your house, and you may still have an itchy pet. So that has changed recently to a couple of drugs. And these are blockbuster drugs, which is a pill that you get your pet to take every day. And the second one, which is a shot that you have to go into the veterinarian and get a shot once a month. These tend to be very expensive, so when you start looking at it in terms of dollars a day, and we've really target ours to be about a dollar. So about $30 a month. Uh, we'll work as a subscription service. You sign up on our website, we'll just start delivering it to you. [00:21:27] Speaker B: And hopefully without the side effects as well. Right. [00:21:29] Speaker C: So hopefully, as far as we can tell, there weren't side effects. And, uh, the only side effect we found is that because of where it comes from and how dogs really like stinky things, they really loved it. In fact, the people we first had spray dry it talked about how they would come home and the pets would be licking their pants. They would go completely insane for it. We were doing beta testing. People talked about having to lock this stuff into drawers. Uh, one cat went through four plastic bags to get to it and was eating. [00:21:57] Speaker B: Oh, my God. [00:21:57] Speaker C: Ripped through them to get to it. Uh, it seems to be highly palatable. And if someone says, oh, have you done palatability studies? The answer is no. But if dogs and cats will lick pants for something like that, we feel like it's pretty palatable. [00:22:10] Speaker B: Yeah, I can already see the commercials coming. Jordan, one last thing. We always like to ask inventors like yourself, who's sort of, uh, a little bit down the road in terms of developing their product, if you had met you, your 20 year old version of you, who comes along and says, hey, I've got this great idea, I think it's make a lot of money. I want to take it to market. Are there already a short list or a long list of things you'd able definitely do this and definitely don't do that. Uh, what do you tell, uh, younger researchers who want to maybe follow in your footsteps? [00:22:37] Speaker C: So the first thing I would tell them with some of the things I've already talked about, like, it's all great to have great science, but having a product for somebody to buy can really actually change society. The second thing I would tell them is things like entrepreneurial boot camps are a good thing. Understanding your market, talking to people who are going to buy it, understanding the needs of those people. So, for example, in our case, I don't know of anyone who wants to give a dog a bath, which you can have shampoos for dermatitis. I don't know anyone who wants to do that. I don't know anyone who wants to give their dog a pill every day. Like, that's such a pain to get a dog to take a pill. So you start looking at where are the real pain points for people. So if I can get them a great tasting powder that can do something similar to these pills, of course they would switch. And now I've lowered the barrier, uh, of entry. Hey, my cost is lower. Hey, we are not a pharmaceutical, we're a nutraceutical. We're just trying to lower that bar to get people to at least try our stuff. So it's all about finding those pain points and then lowering the barriers for your own entry. How can I make it easy for you to use my stuff? And that's really how I look at it. That's what I would tell myself there. The other thing I would say is, find someone who's experienced, because there's nothing in a book that can help you as much as someone who said, yeah, I did all that, and here's where it screwed up or don't work with that person, because, uh, the other thing you'll find is there's a lot of people out there who want to wam on to what you're doing, and they may not be helpful at all. In fact, some people are looking for an easy ride from you. And then the final thing I would say is, be very good with relationships with people. It always comes down when it comes to funding or it comes to finding the right marketer or whoever, it all comes down to personal relationships. It just does. And trust your instincts. I would say, um, on, um, my last company, I may not have been forceful enough in some of the things that I thought I was right on, and I think that was not the best way to go. So, like I said, experience helps. But how do you get experience? By making bad choices. There's no substitute for your own bad choices, I guess, right? But, yeah, those are some of the things that I would certainly focus on. But it's almost like any other profession you want to know. Understand the people that are in that profession, talk to them, try to get experience from people who have lived it, and then go out and try it yourself. [00:25:05] Speaker B: Excellent advice, Jordan. Uh, I actually meant there is one last question, probably the most important one. The interview. Are you a dog person or a cat person? [00:25:12] Speaker C: I have outdoor cats because my wife won't let me have indoor. My boys, my two boys want a dog inside. I want a dog inside, but my wife isn't going to let us do that. I like them both. [00:25:31] Speaker B: You're a split family, mixed marriage, right? [00:25:33] Speaker C: Oh, it is. It very much is, Jordan, great talking to you today. [00:25:37] Speaker B: Wish you all the success with happy scratch or any other company you happen to develop along the way. Wish you the best. And when you're ringing the bell in the New York stock Exchange, then we'll have you back on the show. Or maybe even before that. [00:25:48] Speaker C: That sounds great, Richard. You can stand beside me while it goes ding a ling a ling. [00:25:52] Speaker B: Exactly. Great talking to you, Jordan. [00:25:54] Speaker D: The inventivity pod is produced by the Cade Museum for Creativity and Invention, located in Gainesville, Florida. Richard Miles and me, James DeBorgilio, are your podcast hosts. Podcasts are recorded at the heartwood soundstage in Gainesville and edited and mixed by Rob Rothschild. Be sure to subscribe to the inventivity pod wherever you get your podcasts, and leave a comment or review to let us know how we're doing. Until next time, be inventive.