#StartupsEverywhere Profile: Olivia Walch, CEO, Arcascope
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Using math to improve shift workers’ sleep quality
Arcascope translates the power of circadian rhythms into actionable products that help prevent shift work burnout. We spoke with its CEO Olivia Walch about the impact of digital trade policies that enable cross-border data flows on her business, the current state of data privacy in the U.S., and her experience navigating recent changes in tax laws for startups.
Tell us about your background. What led you to create Arcascope?
I’m a mathematician by training, with a specific interest in biophysics for medicine. Before the computing power we have now, you couldn’t really apply techniques like “optimal control” to health and biology—the biology was just too complicated. It was easier to use that kind of math for things like putting rockets on the moon than it was to use it for optimizing chemotherapy for tumors. But with Arcascope, we’re changing that by developing algorithms that simulate the way your body works, using feeds of data from your devices and a lot of math.
What does Arcascope do? Who are your users?
We’re a deep tech startup that makes algorithms that help you optimize your health in science-backed, often unintuitive ways. What that means today is that we provide guidance on when to get or avoid light exposure, sleep, eat, drink and avoid caffeine in order to get over jet lag faster or manage shift work better.
In the near future, our goal is to help people understand the best times for them to take pills, or when to schedule surgery— an idea sometimes called “chronomedicine.” Essentially, we want to apply "math for the body" to enhance overall well-being.
Our direct-to-consumer apps have users all over the world—the app is available through the App Store and Google Play store and people find us there. We also have contracts with government agencies, like the U.S. Navy, and large international organizations in the mobile health space.
You have customers located all across the world. How do digital trade policies, like those that enable cross-border data flows, help you reach them?
We use lots of third parties to help us reach people and track how well we’re doing. The Apple App Store and Google Play Store do a lot of work for us when it comes to cross-border data flows because pretty much anyone, anywhere can find our app on those platforms. We also use different vendors to help us make sure our code is running how we’d expect, to track if people are clicking on new features, to monitor how revenue from subscriptions is coming in, etc. If there were more regulations that made this more fragmented or costlier—or placed limitations on which locales’ data could go where— it would be a major headache.
For instance, if we had an Indian user whose data had to be stored exclusively within India, we’d be at the mercy of our third party vendors’ capability to comply with that rule. We’d also face the practical question of how to serve that user. We’re a small team, and I’m based in the U.S. Can I access that data? Would we be forbidden from downloading a local copy or would we have to use a virtual private network (VPN)? It’d be a huge pain, and it probably would make it so it was no longer worth it to us to offer our products in that region.
Moreover, people use our apps when they travel—across time zones, and therefore across borders—to manage jet lag. The logistical nightmares posed by barriers to transferring data across borders or different rules for different places would really undermine our ability to serve our users.
You recently spoke at an event on the WTO e-commerce moratorium—why is it important for startups that the moratorium is renewed this coming Spring?
Margins matter: we’re already paying our team, our third-party vendors, and the 30 percent cut of all our revenue that goes to the app distribution platforms, along with applicable taxes. Any new taxes on top of that just comes out of our bottom line. Even more importantly than that, anything that slows us down is a burden. Working with digital goods often requires adapting quickly to changes and new iterations of products and services. For example, if iOS updates, we may need to get a new version of our product out really quickly to be compatible—slowdowns can really hurt.
Helping consumers with their sleep or optimizing a randomized controlled trial means you encounter lots of data. What has been your experience navigating the legal landscape around data privacy?
Ultimately, varying data privacy rules have caused us to make a lot of choices not to collect certain types of data that would otherwise be useful to us. We’re happy to put the time into protecting user privacy, but uncertainty around different policies in different places is an enduring stressor. It would be better if everything was uniform so we only had to make these investments once and could spend more time and resources to actually do what we like doing and are best at doing.
Are there any local, state, or federal startup issues that you think should receive more attention from policymakers?
Thankfully, I escaped this issue, but for many other startups I know who receive SBIR grants, the recent tax law changes and lack of guidance on them was really devastating. In the past, you received SBIR funding, and the tax law allowed you to categorize it as research and development (R&D), paying taxes on it immediately. Now, you have to amortize it over five years. For a startup that is bootstrapping and only has $200K in the bank, being required to pay almost $40K in taxes would effectively kill the company. There’s been enormous, company-ending stress about this from my founder peers.
Additionally, as a startup working in the sleep field, I’m always interested in regulations related to sleep and safety, along with anything that makes it easier for me to interface with the FDA.
You mentioned the Small Business Innovation Research (SBIR) Grant program. What was that process like for you and what has it meant to Arcascope?
SBIR funding is the only reason my company exists now! I got it first when I was a fresh-faced graduate student, who had no idea how pitching, business plan-making, or acronyms like “B2C” worked. SBIR funds gave me the money to build products that showed what we could do and bought me the time to learn how to talk about them to investors. Since then, we’ve gotten five SBIR grants, and in addition to being our earliest funding, they've also played a huge part in attracting investors and facilitating further investment.
What are your goals for Arcascope moving forward?
Grow our direct-to-consumer app, and then move into the clinical trial space as the best-in-class vendor for chronomedicine solutions.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email advocacy@engine.is.
