Raul Zavaleta's Journey from UCLA to Life Science Legend

Meet Raul Zavaleta, the visionary engineer whose innovations fundamentally transformed how clinical trials collect and process data. In this captivating conversation, Raul shares the incredible journey from UCLA graduate to co-founder of what became Covance - one of the world's largest clinical research organizations.

Discover how a simple frustration with keypunch cards led to revolutionary solutions that reduced clinical trial data error rates from 39% to under 2% and compressed data cleaning timelines from six months to 48 hours. Raul reveals the story behind the Zavacor system, the invention of pre-labeled clinical trial kits, and how a cardboard box pitch to FedEx helped build a global empire.

Beyond the technical innovations, this episode explores Raul's remarkable commitment to community building in Indianapolis - from transforming Marian College into a university to mentoring the next generation of life science entrepreneurs. His philosophy is simple yet powerful: understand the real problem, create significant value, and never let anyone convince you that your dream is impossible.

Whether you're an entrepreneur, scientist, or simply curious about how industries evolve, this episode delivers actionable insights wrapped in unforgettable stories.

MUSIC:

Acid Jazz-Kevin MacLeod used under the Creative Commons Attribution 4.0 International License

Main Discussion Points:

• [02:15] From LA to Indianapolis: The five-year promise that became a lifetime commitment
• [10:20] Community transformation: Marian College to University and Hispanic Chamber consolidation
• [16:30] The keypunch card challenge that sparked a career in clinical data innovation
• [21:15] Birth of Covance: Solving the 39% clinical trial data error problem
• [32:20] Innovation breakthrough: Pre-labeled kits and foolproof design principles
• [40:30] Global expansion: From Indianapolis to Geneva and beyond
• [45:10] The ePRO revolution and eventual acquisition by Oracle
• [50:25] Entrepreneurial wisdom: Understanding problems vs. building solutions

Key Shareable Quotes:

1. "You dream it, you can achieve it. Don't let anybody talk you out of that." - Raul Zavaleta
2. "I promise you I can reduce the error rate to less than 2%. At the end of clinical trials, instead of taking six months to clean up data, we will deliver a clean dataset in 48 hours." - Raul Zavaleta
3. "The most important thing is to understand the problem - what is really the root problem? You also have to understand the value proposition." - Raul Zavaleta
4. "We have a lot of good things in Indianapolis and Central Indiana, but we're very shy about speaking about it." - Raul Zavaleta
5. "Don't be afraid to look for somebody to help you. I've been mentored and gotten a lot of good advice, and I do the same for those I mentor." - Raul Zavaleta

Call-to-Action: Ready to transform your industry like Raul? Subscribe to The Life Science Effect for more inspiring conversations with life science innovators who turned impossible dreams into billion-dollar realities. Connect with Raul Zavaleta on LinkedIn to learn more about his mentorship opportunities for entrepreneurs.

Transcript:

[00:00] Podcast Introduction

You are about to experience The Life Science Effect Season 2, brought to you by our presenting sponsor, BPM Associates. Extraordinary people, relationships that matter, important change for a better world, the joy of belonging - Life Science Leadership.

What if I told you that a single engineer's frustration with keypunch cards in 1985 would eventually revolutionize how every major pharmaceutical company in the world conducts clinical trials? That one conversation about data errors would spawn a multibillion-dollar industry transformation?

Today you'll hear the incredible story of Raul Zavaleta, co-founder of what became Covance and architect of the Zavacor system that still powers clinical research today. Raul reveals how he reduced clinical trial data error rates from 39% to under 2%, compressed six-month data cleaning cycles into 48 hours, and built a global empire starting with cardboard boxes as conference tables and a bold promise to FedEx.

Raul Zavaleta isn't just a successful entrepreneur - he's a community transformer who helped evolve Marian College into a university, brought major sporting events to Indianapolis, and continues mentoring the next generation of life science innovators. His philosophy is beautifully simple: understand the real problem, create undeniable value, and never let anyone convince you that your dream is impossible.

Whether you're building your next venture or leading innovation within an established organization, this conversation will change how you think about problems, solutions, and what's truly possible. Let's dive in.

[02:30] Host Introduction & Opening

STEVE: Hey, this is Steve. Thanks for joining. Very honored and thrilled today to have Raul Zavaleta on the show. Raul is a partner at Cogent Scientific and is an advisor, board member and all sorts of things out in the community in the life sciences community. So Raul, thank you for joining. Appreciate you being on.

RAUL ZAVALETA: Oh, glad to be here.

STEVE: Wonderful. What did I miss? You do so much in the community - tell us about how you're involved in things.

[02:15] Community Involvement Origins

RAUL ZAVALETA: Well, when we moved here in 1985, I had promised my wife that we were coming here for five years. She was born and raised in Los Angeles. We both graduated from UCLA, and Indianapolis and the Midwest was foreign to her. I said in five years we will go back. And when the time came, we had sold that first company. And she said, "You know, I really would like to stay here. I think it would be best for our kids to grow up here."

And then I said, "Well, if we're going to do that, I better get involved in the community." So I started looking at what community boards I could join and help. The first one was the Hispanic Chamber of Commerce, which at the time was very small, really not producing anything. There were two other Hispanic boards and I said to my friend Charlie Garcia, "To make an impact, you're gonna have to make something happen. These are too small. Let's put them together and make a bigger idea." And that became what is now called La Plaza.

[05:30] Expanded Community Leadership

It's much bigger, more impactful. The community supported it. Instead of the Hispanic Chamber of Commerce, we went to the Indianapolis Chamber of Commerce and said, "How about you have a chapter called the Hispanic Chamber of Commerce?" And it's been there for more than 25 years.

From that work and talking to people, I was asked to join the United Way of Central Indiana. I was on the executive committee there. I was also on the board of the Indianapolis Arts Council and Indiana Sports Corporation. I was involved in bringing the Super Bowl to Indianapolis and also the Swimming FINA World Championship at what was Conseco Fieldhouse at the time.

[08:45] Engineering Innovation in Community Projects

My role there was to bring the community into it. We came up with this idea of putting cameras where they were building the pool inside Conseco Fieldhouse, and it was fascinating. It was an engineering feat, and we brought high school students from all the various high schools to see what they were doing.

[10:20] Marian University Transformation

I was also involved with what was called Marian College at the time. I was attracted to that based on some of the things that I had done in the past, and Dan Elsener, whom I had met when he was with University of Indianapolis, had become President. He was struggling with this little college at the time. He brought some people on the board, including Jerry Semler, who just recently passed away. After about two years, it was booming. We decided to make it a university. Now look at it - it's got a medical school, an engineering school, a business school, a school of education that is outstanding and nationally recognized. And it has an endowment, which before was in debt.

[12:50] Career Origins: From Chemical Engineering to Innovation

STEVE: So how do you go from chemical engineer to founding a company and handling the informatics piece, the computer systems? How did you find yourself solving these huge problems with your chemical engineering degree?

RAUL ZAVALETA: When I graduated from UCLA, I went to the career fair and got offers from several companies. Dow Chemical came and told me they really wanted me to work for them, but they would put me first in a clinical laboratory, which at the time was called Bioscience Laboratories - the largest laboratory in the country at that time.

The first project they wanted me to do - they said, "Well, you're an engineer. We're a clinical lab and we're still using keypunch cards. Help us figure out how to get rid of that and digitize this place." I went to database classes and took several courses while coming up with the idea, interviewing all the people about what their processes were.

[16:30] The Keypunch Card Challenge

I remember talking to the lab director who had worked with the founder previously. He told me, "I don't think that's possible to do. We use those keypunch cards for a lot of things." I said to him, "We promise you we can do it, and when we finish, the last keypunch card that gets produced, we're going to frame it and put it in your office." And we did.

[18:45] Identifying the Clinical Trial Data Problem

I became the liaison to pharmaceutical companies. At the time, most of them were simply using whatever clinical lab the doctor or investigator used, and that produced a lot of problems because not all labs use the same methods. Then they started using central labs, but part of the problem was it doesn't meet the data requirements that pharmaceutical companies wanted.

After a couple of years, I went to the president of the company and said, "I have an idea. We can fix the system so that we can do clinical trial work." He said, "That may be good, but it's only 5% of our business. We're not interested."

[21:15] The Birth of Covance

At that time, Bioscience was merged with the second largest laboratory in the country and created what became Quest Diagnostics. Three of us - the lab director, VP of Operations, and the marketing person - wanted to create a lab. I said, "Let's do a lab that only does clinical trials. We don't have to worry about insurance reimbursement. We can charge a premium because we will solve the problems."

There was a 39% error rate from the data investigators provided - sometimes simple things like names or initials that computers couldn't recognize. I said, "I will build a system and I promise you I can reduce the error rate to less than 2%." The other thing was turnaround time. I promised we would deliver results in less than four hours, and most importantly, at the end of clinical trials - instead of taking six months to clean up data - we would deliver a clean dataset in 48 hours.

[25:40] Building the Revolutionary System

I wrote the business plan. I was 32 years old - what did I know? We started looking for a commercial available system that could be fixed. Nothing existed. We were gonna have to build it ourselves. I started talking to pharmaceutical companies. Lilly really loved the idea - they said, "We've been looking for something like this. Even if it saves us six months, it's millions of dollars."

They connected us with CID venture capital, which had just been started. The representative came to Los Angeles and said, "We will fund your company with one condition - you have to move to Indianapolis."

[28:50] The Move and FedEx Partnership

The four of us got together and said, "Five years, we get this company going, then we move back." I went to my wife and said, "I've got good news and bad news. Good news is we've got funding and the company is going to be a reality. Bad news? We have to move to Indianapolis."

At the same time we were moving to Indianapolis, so was FedEx putting a hub here. We went to FedEx - we didn't even have a table, we were using cardboard boxes and folding chairs - and I told this guy, "You have to believe we're going to be one of your largest clients in central Indiana."

I said, "I don't want delivery by 10:00 in the morning like you advertise. I want it there by 4:00, 6:00 in the morning." They said they'd see what they could do.

[32:20] The Innovation of Pre-Labeled Kits

We built and invented the kit because we wanted everything prepackaged. I had been to investigator sites and they had boxes of unlabeled tubes here, needles over there - it was a mess. They hated that part. They had booklets telling them what to do, which was another cause of error.

So we decided to make kits with pre-labeled tubes. All they had to do was say, "This is clinical trial ABC, this is visit one," and everything they needed was inside that kit.

[35:15] The Technology Behind Zavacor

STEVE: Was there any thought to sell Zavacor as a system as opposed to building a laboratory business around it?

RAUL ZAVALETA: No, we thought we were building a lab for clinical trials. It never occurred to us to make it commercially available because by then, other companies were trying to hire our programmers. Mayo Clinic hired one of my best programmers because they wanted to compete with us. After about 18 months, he came back and said it wasn't going to work. Quintiles also hired one of my best programmers and they couldn't do anything either.

The original system was built in MUMPS on Digital Equipment Corporation software. It was a combination of programming and database all built into one. The lasting value was that it had a very thoughtful set of datasets to accommodate flexibility from any pharmaceutical company.

[40:30] Post-Acquisition Innovation

After Corning acquired us, the CEO said, "We want to expand this globally. How do you think we should do it?" I looked around Europe and Geneva made the most sense logistically. I built that lab, starting on the top floor of a six-story building. Now they have the whole building.

When FedEx pulled out of Europe temporarily, I went to TNT and explained what I wanted to do. They said, "We will send a plane just for you to Geneva every morning." We became profitable the first year.

[45:10] The ePRO Revolution

Years later, Lilly called me to help with Cialis. They had developed software internally to collect electronic patient reporting outcomes electronically because they thought patients would be more truthful than when speaking with a nurse face-to-face.

I ran across Paul Bleicher again, who was now CEO of Phase Forward. He said, "I would like to invite you to join my team." When I pitched partnering with them, he said, "I don't want to partner. I want to buy it." Eventually, after 18 months of growth, I had five suitors for that company. Phase Forward bought it, and a month later, Oracle bought Phase Forward.

[50:25] Advice for Entrepreneurs

STEVE: What kind of advice do you have for young folks who want to innovate and transform industries?

RAUL ZAVALETA: I think the most important thing is to understand the problem - what is really the root problem? If you don't know that, you're not gonna solve the problem. You'll stay at the superficial level. But you also have to understand the value proposition. Sometimes you may solve it, but it might cost too much. It has to deliver significant value to somebody who wants to solve that problem.

[53:40] Final Inspiration

You know, when I first came up with the idea for Covance, the vice president of information technology at Bioscience said to me, "You cannot beat us. We're too large. What you're describing isn't gonna be compelling enough." About six months later, he called and said, "How are you doing this? All the other players are asking for it. We can't do it."

You dream it, you can achieve it. Don't let anybody talk you out of that.

[55:50] Closing

STEVE: Speaking of calls to action, do you have anything you want to promote?

RAUL ZAVALETA: When I told my wife I'd stay here and get involved in the community, I think that's important. We have a lot of good things in Indianapolis and Central Indiana, but we're very shy about speaking about it. As I got older, my passion became mentoring young entrepreneurs. Don't be afraid to look for somebody to help you. I've been mentored and gotten a lot of good advice, and I do the same for those I mentor. If you have a good idea, pursue your dream.