Raising a venture fund in 30 days - Sahir Ali (Modi Ventures)

Sahir Ali is a the founding general partner of Modi Ventures, an early stage venture fund investing in tech-bio startups. He is also an LP in multiple funds including Draper Associates and Khosla Ventures.

He is an accomplished entrepreneur and investor. We discuss his path to launching a venture fund, founder selection, decision making and more!

Transcript

 Uh, there were deals that were coming and I'll be honest to our family office. Hey, you have three days to respond. No time for diligence, either you're in or out. There's so much money, but that is not happening. So from just macro economics perspective, it just felt like an absolute right time to come in.

And what was

your answer to those deals, sir?

Oh, no, I just, you know, fundamentally. No matter how good the team is or or perhaps the product is superficially or has captured the so called the network effects got to do your diligence.

Thanks so much for joining me today, Sair. It's amazing to have you here.

To start, if you could give us a brief introduction and then we'll get into

it. Yeah, thanks for having me. Uh, so my name is Sair Ali. I am. Uh, an entrepreneur. I've been an academic for a bit, and now I have a venture fund. Also, along with my brother, we have a single family office as well. Uh, been always sort of inclined towards, uh, life sciences, biotech, healthcare investments, but we've generally done lots of different investments as well.

Uh, we've been operators as well. Uh, in entrepreneurial capacity and, uh, my previously some academic work involved pathology and AI at the intersection of AI and oncology as well. And I've also spent significant time in the enterprise technology world where. I was very early on Salesforce architect and I've worked with Fortune 100 companies incorporating not only Salesforce, but, uh, early on, very early on, uh, incorporation of machine learning.

So we were doing some propensity modeling and also overall, uh, I've, I've seen a different things in last 10 years from the academic labs to entrepreneurial journey to, um, being in the enterprise setup of large companies. From also the investments and and sort of the family office world as well. So happy to um be here and thanks for having me Perfect.

Let's talk about why you decided to launch your own fund. Tell me how that came to fruition and What are some learnings you've had from talking to lps and raising your fund?

Yes, uh, you know, I think If, if you had asked me about, about a year and a half ago, or even sometime last year, that if I wanted to be a fund manager, my answer would have been no. But last year was very interesting from market perspective last year, by the time November ish came around, which is where I got really serious about launching a fund, there was about 88 percent decline in funding for venture, uh, venture funds.

There was even a further decline in deals that were happening. And post series a, there were, there was a 32 percent decline in a new, new funds coming up. And in fact, interestingly, there was an uptake of about 15 percent in billion dollar funds being closed. So, which was kind of a counterintuitive, actually, when I saw that report, I said, what's going on here?

Uh, they're everyone's struggling yet. There are billion dollar funds being closed last year. And the reason was everybody's toast. took a step back and said, if we are to invest in funds or venture ecosystem, we'd rather go with established players. And so that was one, uh, one sort of motivating factor that I think what this means is all the exuberant valuations and the interest rates going down and the money that was freely available has now tightened up.

This is the right time for, uh, for investors to come in because it becomes what happens is now it becomes investors market. And that's where you find best bang for your buck. Uh, there's a lot of opportunities that may not be open to, um, smaller funds. Uh, there were deals that were coming and I'll be honest to our family office.

Hey, you have three days to respond. No time for diligence, either you're in or out, there's so much money, but that is not happening. So from just macro economics perspective, it just felt like an absolute right time to come in. And what was your

answer to those deals, Sair?

Oh, no, I just, you know, fundamentally, no matter how good the team is, or, or perhaps the product is superficially or has captured the so called the network effects.

Got to do your diligence. Um, and you have to understand based on what your risk appetite is. Not every, not every investment can, has to be based on, um, how good the company is doing. Sometimes a really, really good company you may have to pass on and it depends on your risk. Tight what you're looking for.

Is it going to be a long term play? Do you see a short liquidity? I think so We we come from a background where uh, we haven't Prior to this hadn't dealt a lot with illiquidity and so that's a different mindset And so everybody has different mindset and particularly those in those investments. We were more like a Angel investments rather than, you know, the professional money in.

So that's a different aspect to it. But yes, the answer was typically no, that this is too fast for us. And there's nuance

there. Say you had an opportunity to invest in Adam Newman's new company that Andreessen put in 300 million. Would you say yes, if you had a day for diligence, or would you still say no?

So let's, I think the number is important to keep in mind. If someone's putting 300 million in a company already, and

That's why I picked that one, because the checks are substantial.

I also mean someone's asymmetrically excited about something and it's very seldom you've seen that that kind of exuberance without a product and that kind of money going in yields a lot of interesting things.

It just becomes typically one of the, especially at. After hearing about a few cases, but particularly what comes to mind is Elizabeth Holmes, which kind of is how the initial, there were just extreme exuberance about someone rather than a product, let's start with that. And so when this becomes about somebody, and then the check size just goes into some.

Buddy, that's, that's usually not, not the way I think about investing. I think it needs to, I need to understand what the product is. I need to be able to see things where things are going to pan out. And I, then I'll take my risk, right? Ultimately, everything is our bets. And so. I think in the example, you just said two, I would see two problems with that.

First of all, for, for sort of smaller investors who could write, you know, um, up to a 2 million kind of check sizes, you are eventually going to be pushed out anyway, in, in next rounds and dilutions and all, unless you have the capacity to follow on those big rounds. But beyond that, I just wasn't clear what the product was going to be.

It's yeah. It's just that it was another real estate play, but really it just, it just seemed like that bets were made on an individual and I tend not to do that.

Is that something very interesting there is you, it seems like index the product more than the founder and correct me if I'm wrong there and you're a biotech investor.

The product could be very difficult to understand. I agree with that by the way, I take my time with understanding the product. A company would just invested in her and biosciences, you know, it took me. A few tens of hours to understand exactly their product, but it's necessary for me. Um, is it necessary for you to understand the product?

And then how do you look at the founding team versus the product versus the problem they're solving when you're evaluating

startups? So let me backtrack and say something that. When I meant understanding the product, that's when 300 million are dollars are going into something at that point, the better have a product, which has a right fit to the market.

So in that sense, yes, I need to fully understand it hard. Then at that point, yeah, I'm assuming when that kind of money is going in, there's already a good team and all of that, then the product becomes a big deal because now if 300 million is going in. And what valuation God knows, but to cap, to, to now go two or three X, how much momentum of the market you're going to have to capture.

That's why product becomes important. But now if you're going to ask, say, okay, well, how do I look at companies that are early stage, which are at the vision state? Of course, the, the, who the founder is, the team, that's, that's probably the most important aspect as well, because. Especially if you're doing pre, pre seed and seed, you know, I haven't, they haven't really found the product market fit or so called product market fit.

So it does become about these multifaceted things found the team is important to who the founders are. Uh, what's the, what's even the, uh, dynamics within the founding team? Because as we know, most startups early on failed because. They just can't gel together. The, the vision of the product, how big is the market?

That's a typical thing everybody looks for. And, uh, and how they're going to approach their initial in that, in that early stage, I like to understand how do you plan to go to market? What's the MVP? Yes, you have a big enough vision. That's probably the exciting part, but do you have small enough focus to get that out?

Right? So those are things I'd like to understand because a lot of times founders do tend to get. bogged down in the bigger vision and you can't get anything out, right? And then it has to be an iterative process. And it also depends, right? I'm talking mostly SAS. Now, if you come on the biotech side, it's a different ballgame completely, right?

You, uh, in biotech, uh, it's, it's a lot to do with what kind of assets you have and, and, and what's the regulatory pathways. If it's med tech, it's different. If it's going to be a small molecule, it's different. One area. Yeah, that I particularly like, which I think is a lot more investor friendly is tech bio where it's, it's sort of AI enabling, or I guess, um, AI enabling or technology enabling something, um, in bio health and medicine.

So yeah, discovery would be that. AI, radiology, pathology, uh, any, anytime there's a platform play, so you could start to apply the usual known concepts in the technology to these kind of setups. But yeah, I agree, biotech is a very different beast, but in there we have a team of folks who specialize in certain aspects of those areas as PhDs previously, and so they do the deep diligence as well.

And then you fully understand what that is, and the risk over there would be You know, you break it down by, is this going to go to the, uh, human trials? Can it, if it's in human trials, what's the probability of going into the next one? Is there an MNA in play? Who are some of the potential customers?

Different sort of areas that you look at versus say a technology company, I guess, in that stage. Are

you focused on a specific area of biotech, say diagnostics versus therapeutics? or radiology, cardiology, oncology, or are you looking at it as a whole? And if so, let's talk a bit about portfolio construction because exits and the need for commercialization to an extent can vary depending on what area of biotech you're looking at.

Yeah, I, I, I like the tech biospace rather than the biotech for, for simply two reasons. And I think tech bio evokes a different definition. Many folks, what I like to call that is These are companies that are operating like technology companies, but disrupting something in health, bio, and medicine. And so the, the most prevalent example that anybody will give on TechBio is AI drug discovery.

Yeah, AI drug discovery has been around for, at least got a lot of money in last five or six or seven years. A couple did go to public as well, but we haven't seen a blockbuster come out of that. But I think these kinds of things take time and we're still waiting for a blockbuster success. But that doesn't mean that early investors didn't make some money.

So that's one of separate that out. I think we tend to look at success in terms of if this product came to the consumers, but for early investors, sometimes getting an acquisition or I, I, you know, I'd IPO also means an exit. So that's one aspect. The other, you know, if you look at Moderna, Moderna, yes, you can classify as a biotech company, but so it was actually a platform company.

It's a platform company for taking mRNA in different directions or different, um, capably therapeutics, uh, vaccines, uh, they can tackle infections and things like that. And so it's a platform company. This is why within just seven or eight years, it was, it IPO'd at 8 billion, I believe, which is kind of a very short path.

For typical biotech company without any approvals, without, you know, going through any, having a proper asset in the market. So that's a platform company. I like, I like to invest in platform companies that have, you know, as they call it, the multiple shots on goal, where you're, you're risk, you're, you're diversified your risk with not just not pursuing one asset, but you can create kind of multiple assets.

And then the interesting thing is, how do you make money? There's this multiple ways of making money because farm there's, you're. Pharmaceuticals are your typical customers, they will pay up front, there will be some royalties, there will be some milestone based payments. So, so different kind of, uh, area of how you evaluate that.

But if you're a typical biotech, which has single asset, it's, it's very risky, and it takes a very long time. So unless that. But on the therapeutic side, unless the, unless the drug, the molecule is in some kind of human trial, I kind of don't, I don't have the risk appetite to go in early than that.

I was listening to Vinod Khosla on Harry Stebbings and he said he's excited about single gene mutation for drug discovery in biotech.

Tell me your thoughts on single gene mutation therapeutics. What's missing in biotech? You know, we have a fairly good estimate of protein folding. Um, to an extent of genomics as well. Why haven't we seen an AI drug discovery platform really take off? Um, do we just know that don't have the knowledge of disease process or pathology or pathophysiology?

Or is it something else?

I think you're you're you're probably thinking in the right way as I would is that you look at. So if you look at the workflow of taking a drug out to market, right? There's definitely the discovery part where. just to find those right bindings and the structures can be someone's entire PhD, right?

But once you've done that, then you've got to do this, you know, the preclinical studies and I think So in some ways we're also making a lot of strides. So AI drug discovery is helping finding shortening that route, at least the discovery path quickly. We even have some setup, which helps simulate those mouse models and things like that.

But real deal starts when it goes into human trials and this is still a wild West. The toxicity, the FX season. And so those. Those are hard to predict. And so look at what happened to benevolent, right? Uh, recursion, which had 35 assets. So this is still, they still have to kind of go into the real world.

And this is where things are not progressing well. So I, and I think there are some technological advances that will help, but Ultimately, AI discovery started with a big promise that it not only would we can find these targets, but it can find these precise targets that could actually accelerate and and go through the pipeline quickly.

We haven't seen that, but remember, these are still early days. I mean, if you think about the advances in deep learning, they've just come, the core advances have just come in the last five or six years. Especially the initial kind of the innovations in deep learning. Well, of course, let's start with that neural networks have been around for decades and decades, but the deep.

The proof in the pudding was shown in the computer vision space, right? The, the, the convolution neural network kind of came out and said, look, you can actually bring your networks back and make a deep, and so a lot of that was pixel and convolution based, but then the sequences, which NLP kind of redefined the whole thing with transformers was just in 2016 and 17 time period.

So these are still the early days. So I think we'll probably see a lot more progress, but a lot of money went into AI discovery, that's the only thing, right? So, and, but also market conditions are favorable. There was a lot of quote unquote, free money there, low interest rates. And so now what's, what's happening is obviously.

The money situation is tightened up. Now, investors are actually really saying, okay, well, let us evaluate what really are you working on? Yes, you can, you may be able to find these targets, but really it's going to become about how do you, is there a reliable partnership with pharma? They will want to see that up front.

Previously, they took a lot of bets that, okay, you'll go on and and get these partnerships out. But now can you. Actually, they want to see what's the tangible path they want to see. Do you have a commercialization officer? Typically, that was an afterthought in in platform companies. Do you have a drug hunter on the team?

Do you have these? They might even need some, uh, testimonials and some referrals to potential partners. So they're. They're starting to think about how, what and what things happen beyond it's been discovered and go potentially going into, uh, human trials. So I think that's probably the, the issue and there are now, um, like, for example, actually, before I continue, there are AI discovered drugs that are in phase.

Right. So until like something really makes it out, um, we will still wait for that kind of a blockbuster, but that doesn't mean the innovation is going to stop. I think the money will continue to be in this space. There will be acquisitions. There will be M and A's. But I think if you're asking the question of when are we going to see this kind of a blockbuster success?

I don't know, but I am hoping we will. But early days, though, if you look at the field overall, it's quite new.

I agree with that. And thanks for the well thought out and informed answer. Let's go back to raising a fund. And specifically, let's talk about LP relationships. When did you start developing these relationships and how important were they and your track record when going out to LPs?

Tell me about how many of your LPs you already knew, how many were warm intros and if, if any, how many were cold outreaches or maybe some were inbound. Um, so I'd love to

go deeper there. Yeah, it would be important to understand that. Let's start with it. It's this fund of 32 million was actually raised in about a month or a month and a half.

So, in for the conditions of the market, this was in some sense, uh, uh, that sounds

almost unbelievable. So, yeah,

it's almost pretty unbelievable. And there is, there are a couple of reasons for that. Is that there was, there was a strategic move on my part to look at how do we actually do this fund? And so in this time period, first of all, if anybody is to raise the fund, no matter how of a brand name they are, I'm going to start to think about and rethink their strategy a little bit, because The market conditions are bad.

And so for me, I said, if, if we're going to enter this space, the first of all, the strategy has to be solid. But beyond that, it, it needs to be, it's an investor's market. So it has to be aligned with the values of investors, which are the LPs here. And so what does that mean? It has to mean that I would perhaps have to show skin in the game, which I have quite a bit.

Beyond just the typical, uh, we're going to put 1 percent or 2 percent and, and probably towards the end takeoff fees. So, so first is without diverging details, the structure of the fund is very much aligned, uh, with, with the investors. And most of their, most of the investments that they do goes in actual investments.

So what that means is, uh, what I see as my upside is when the fund does well, not in the fees. And so that's been a very different approach and, and the other was a strategy in this time period. When I look at the ecosystem, there's, there are great startups to invest in, but at the same time, there will be really great fund managers to also invest in, which, which are iterating in, in some of the areas that I like, for example, oncology, life sciences, artificial intelligence, and so.

Some of these funds may have been kind of not available to family office oriented folks, and they would just go to their institutional investors who could write just 10, 20 million dollar check sizes. And so, with that, our strategy as a private fund is to invest in both. And this strategy is based on.

The fact that a typical VC has to continuously look for inbounds and evaluate them and has a large team have to go to events constantly. And this is how you kind of get the deal flow for us. The deal flow also comes from being LP and other funds. And, and, and, and the benefit of that is these funds are pretty tough.

Up notch and these fund managers are, are bring not only in some cases, just experience over a running couple of funds for, for last five, six years, but some of them have seen through a couple of financial cycles too, which is a very important skill. I think that's missing in a lot of GPs right now. Is that because they haven't, including myself, haven't seen.

The financial cycles, right? Of dot com than the financial crisis of 2008. And it's a very different experience. While a lot of funds have done well in last 10 years, not many GPs can say they've gone through the ups and downs of, of the cycles. One of the reasons why we decided to become LPs in coastal ventures is that, you know, Vinod has been around and seen these cycles of exuberance, not only that, but financial ups and downs.

And so last was also track record. You know, um, In this fund, my brother's involved as well. You know, we've been involved with building companies. We've been successful ourselves as entrepreneurs. We've been on. Operators. We've also done investments. We have our own kind of track record in investment world.

And so it was easy to see and follow that for folks who decided to come in. And, and the question about, did we do any cold outreaches? No, this was all just kind of in our network. Um, folks that have either known us and followed my trajectory, um, since I, I guess, left for college, or these are friends of friends who initially started believing in this fund and brought other friends,

Amoeba your decision making framework.

How do you decide what projects to take on in your life? And let's go back to college. Um, let's go back to post graduation and what are you thinking? What opportunities did you have or you were chasing and how did you decide what to do? Yeah,

I, you know, I think it's a, it's a, it's a pretty good question and something that not often has been asked.

So I'll say that the term chasing I was on. I was always chasing through two things and that's since high school. I don't think it was a strategy or some brilliant move. It's just something that's how I was always inclined towards. And that's based on the economic, socioeconomic status that I come from and the, the background, which we don't need to get into.

But what eventually that made me is that I was very inclined towards getting asymmetrical knowledge and asymmetrical access. And what I mean by that is how do I gain some knowledge that will put me on top? Then. My peers, and so I was always in pursuit of that. And so in high school, as you know, as an immigrant who barely could speak English to me, the way to stand out was had to have some, something else that, you know, while I was trying to have a cultural fit, it was technology.

It was, it was programming. I became in fact, a very solid programmer by age 14. I was just full C Programmer did some work at NASA as well, because it was right next to us in Houston. And so that was a symmetrical knowledge while everybody else didn't kind of have that and asymmetrical access would lead to that.

So sometimes these are kind of hand in hand. Sometimes if you have a symmetrical knowledge will get you any access and sometimes having that is medical access will get you that. So I guess that was always a pursuit when I came to college. That mentality and being able to like, look for that got me into very early on computer vision machine, computer vision, machine learning and quantitative trading, which led me to become an intern at a high profile fund, um, in Citi, which was at the time reporting to Vikram Pandit that the fund was.

And so that was a pretty phenomenal, uh, access. In fact, um, my internship was very high profile, highly paid. And that at that time, I also picked up on Salesforce. Remember in my earlier introduction, I mentioned how I was the enterprise world. I became one of the very youngest architects of Salesforce very early while I was just an undergrad because Salesforce was new at the time.

And so again, these things I've always pursued that I was my, my passion. And, and I guess golden at the time was not a job or a certain level of income. I've always pursued these two things and what serendipitously has happened is that I did get the right jobs, I did get a lot of financial success by pursuing these two things, so I don't know if that helps answer the question.

In fact, when I decided to realize that in the middle of my undergrad, by the way, I had a full time job at Wall Street and so I was on campus. Perhaps I need to look at something else beyond just a financial world and being a quant. And so this was after the financial crisis kind of got disheartened. I was only, you know, 19 years old.

So I said, what could be some other field that. Maybe quant or quantitative, but a little bit ahead of his time. Again, I need to be asymmetrical in terms of knowledge. And so this is how I landed on working in the pathology and AI world. If you look at digital pathology in 2009 ish, 10 ish period was still very new, very niche area.

And now add some AI to it. There was very few people working on that. So, so that's my hope right now is the similar strategy. Now, if you go back to the fund, I guess a good venture cap or VC or investment. comes at the nexus of these two things, asymmetrical knowledge and asymmetrical access.

Let's talk about portfolio construction.

I'd love to get deeper later on into how you look at wealth and money and power and status, but let's, let's talk about portfolio construction first. So you have a 32 million fund. How many checks, what size are you targeting in ownership? How many are you falling on? Um, and how are you thinking about risk and reward in terms of the stage of the company?

Um, when you think about portfolio construction,

yeah, I think so. The portfolio construction for me is a little bit different than a typical venture fund. Like I said, we're more of a private fund in that one part of the portfolio is constructing a portfolio of other funds. And so I'll first talk about that and then I'll come on all the direct investments

we do.

And if you could kind of. Give a rough estimate or percent on how much in each. And how do you think about the tension? And if there isn't any, just correct me of competing with the funds you're investing in, um, for deals and maybe at seed stage is more collaborative. And as your fund grows. In later stages becomes more competitive, but just I'd love your thoughts on that.

Yeah. No, I think that's a good question I don't see as a competition fact is quite collaborative because my focus as a fund that is kind of in the fund one stage is Is again, I operate on those two principles access and knowledge and and so when you think about constructing a portfolio of funds, there are these areas that I would like further exposure and And alpha ultimately what I care about are returns.

We're in financial world, right? I mean, yes, we can say everything about impactful technologies and everything else, but we are in the business of making money eventually returned. And so from that perspective, partnering with fund managers, particularly in this time period, is very beneficial because the fees have come down and, and everyone's kind of taken a step back.

So everyone's kind of back to the drawing board and really thinking hard about their strategies and such. So for me, I have, I think of that portfolio in three buckets. One, our established fund managers. Who have been who are on their 8th fund or 9th or 10th or beyond, then you have the sort of the mid to emerging kind of managers who are on their 3rd, 4th fund.

Um, and then the last small bucket is 1st time or very niche focused managers. Right? And so in the established ones need to understand how they're thinking about. Deploying large amounts of capital there because they're these are folks who are raising half a billion dollars plus, right? Uh, or even more.

And so, so there's some strategies there. And for me, what benefits do they give us? I think with those funds, it's just about really alpha. Um, and sometimes if because the LP base there is quite similar, it's mostly institutional. Someone like, yeah. Us, um, tend to have some advantage in terms of moving very quickly if they have co investments and things like that.

Or sometimes, and I'll give you already an example, we are going to be co investing directly on the cap table with, because these deals were brought to us by some of these managers. So to answer your question though, in fact, what I can tell you is that as an institutional investor, uh, at a pension fund, endowment funds can't answer co investments directly.

First, they don't have the capability of diligence. Second, everything runs through an investment committee and it takes time. It's an, it's a corporate thing. It's, it takes a while to move while someone like us, we have the capability diligence, especially fits in the area of what we like and we can move quickly.

And then this time period, again, it's a very powerful thing to bring down table. And so we become very strategic. And so that's, it's a very collaborative thing. And then, so in the middle bucket, what I said, which is the kind of mid to emerging manager, these are the folks that. Are focused on some interesting areas, like, for example, tech bio, uh, there's a fund that's.

Completely focused on oncology. Um, you know, and then I just won't name names just yet, but you can read about, um, that, um, in some of the PRS, but these are funds that just bring a lot of capabilities from prior, um, iterations and they're really focused on certain areas. So that check marks certain, uh, areas that I'm very excited about.

And I, I believe in the next 10 years, because remember, we think about 10 year cycle could bring them. Good returns and have impactful technologies. And the last one is funds that may be operating below 30 million fund managers. And as you know, some of you are some of the folks that are listening to this may have seen cameras reports.

These are the funds if they're successful, can return 678 X. Right? And so that's how I've constructed that. So one part of that is You play it safe with the established fund managers. One part kind of get a diversified, uh, portfolio in different areas you want exposure to. And the last one is little risky.

I mean, actually quite risky with first time, but the upside is too high. And so that's how I think about that. Now, if you come on direct investments, I have, we have our own deal flow for sure, but the deal flow that also comes from this kind of being an LP, it's actually very, it's. It's incredible because first of all, these are deals that have been, you can piggyback on some level of diligence.

You're also understanding that some of these funds are going to make sure these companies succeed in having next capitals and things like that. And so that's one, there's a deal flow where I like to lead. And so that means I'm on the hook for making sure that the founder is successful, make sure that, um, that not only from the.

From just being able to, uh, work with the founder and getting to make sure they meet the milestones and all, but more importantly, getting an ecosystem excited about them. And so guess where we are sitting, all these funds they're invested in can event, we can also bring them on to deals that we find. And that's, that's a very important, uh, strategic sort of advantage than saying, knowing somebody at a fund versus being an LP at a fund.

That's a very interesting portfolio construction. One I haven't come across before.

Also remember, in, to construct a portfolio like that, you have to rethink fees. I'll just leave it at that. I think if a typical 220 model, uh, And I don't think the 20 percent or whatever that carried interest is is the issue because that only comes into play if the fund is going to be Start to return money, but really the typical fee structure starts to become a problem is that it's a two percent let's just keep it for Um argument sake the two percent if someone decides to invest a hundred thousand dollars It's not a hundred thousand that gets invested.

It's really eighty thousand after the you know Everything fees set in on eighty or eighty five thousand depending on how it tapers off. So right off the bill But you start with minus 15, 000. And so the, that's why you have the J curves and things like that. And that what now what's, what has happened in the venture world in last 10 years with the Cambridge report and all is that there hasn't been enough actual cash being returned.

Yes, there's a lot of these paper values of, um, you know, the fund is at this X multiple and all, but from LP, one of the biggest complaints that LPs have is that where is it? If I put in a dollar, am I getting a dollar back in my pocket?

And so fees has one role to play because a lot of times the distributions there's liquidations and distributions sometimes GPs do hold on like to hold on to that and so there's a lot of things that are reshuffled I think in this market conditions a lot of folks are asking for DPIs and so this is also a good time.

At the day my strategy is that on the fund of funds kind of Mindset, you're looking for a non normal kind of distribution with, with, with, um, with direct investments. Yes, you're going to need to construct a portfolio of many companies. And so that's where it kind of. Uh, the power law starts to come in obviously some most of them may fail, but there will be some quote unquote fund returners or or Big bets in the portfolio.

So that's where Once that I have high convictions, of course, no no company you will say I have 100 conviction But extremely high level convictions We like to keep ownership and that will depend on initial stage of the company if a seed, you know Start with it at least having some ownership that we can maintain in And, um, over the course of that company, uh, if, if, if we're leading, then of course, this is going to be very important for us to take our pro ratas and things like that.

So the typical, uh, venture sort of, uh, math and operations come into play there.

Okay. I'll ask a very selfish question. I'm not raising a fund right now, but it's something I'm thinking about in the future. What is the ideal emerging manager to you? What characteristics do they have? What's their background?

Um, what's their deal flow? What's their value add? What's their diligence process? And what's their track record? You know, an ideal answer is I've invested in 20 companies. I have a 10 extra in grade, but I think There's a lot of emerging managers who don't have that track record. How can they get your attention and how will you get to conviction in them?

What do they need to show you without, uh, amazing track record maybe because they're just new in this field? Um,

well, I would, I would, what will get my attention is I've been repeating both of these things, asymmetrical knowledge, asymmetrical access. What I see with a lot of times folks who are raising new fund or first fund. And I've seen at this point about 80 or 90 funds in the last six months, you know, in terms of obviously I get pitched, um, from the fund side a lot as well, right.

Cause we were right in the middle of the ecosystem. And if, if there isn't a track record, say being a principal at other fund and you've done that ones, you can show, look, I led these deals. That's always easy to kind of imagine that, okay, I can take a leap of faith that. Being at a different fund now, you're ready to kind of spin out, but someone with that doesn't have that kind of background.

So then you have to bring something in these two areas. What is that asymmetrical or some deep knowledge that no one else has? And what does that access look like? And an example of that could be, Hey, I was at, um, this, uh, prime base editing gene editing lab while there's only two labs like that in the world.

Well, I'm one of the postdocs or was, and based on that, one of the companies that is now out there and doing very well, and I was somehow involved with that. I think in that area, and then you kind of start to have a thesis that's formed around apes, um, sell. Is the new pill, I suppose. I'm just making things up now that to me, would, would attract my attention because first, not many people know about that space.

Not people may even have, have access to that. And, and so then I would have to ask like, what is the amount they're trying to raise? And, and, uh, and then they'll have to convince that their, their focus area thesis has a very promising next five to six or seven years in terms of going after making these bets.

I think that's, that, that would be at my attention, but I would be honest, I think it would be very difficult for a first time fund manager to come in and say, look, without a big. Sort of some sort of access or a very deep knowledge or understanding of a particular field will be very difficult. Those do get raised, but they do come from investment banking world.

And their claim typically is, look, we've, uh, I come from the banking world. I have relationships with all these funds previously where because my clients were and so I have that access again in that sense, they're bringing asymmetrical access. Typically how fund funds operate. They're not typically deep, um, into the operations or or understanding of the field, but they have previously been in the financial world and, and they have amazing relationships.

And so they formed these fund of funds and say, look, we will expose you to N number of funds through us instead of just taking positions in one or two. So that's, I would say it always boils down to those, these two things for me. Um, if it's not a traditional route, say, some emerging managers taking.

Thank you for clarifying that. And I'll repeat asymmetrical access and asymmetrical knowledge for emerging managers. Um, and. Really try and quantify that it seems like the advice is what I'm getting.

Yeah, that's also a very important thing. I should also mention is being an operator is a very important aspect as well, if, if particularly you're going to take bets on startups, it's one thing to be working for somebody, even though you may be an executive.

And it's one thing to start something from scratch, to take a vision from, you know, napkin, so to speak, and to bring that alive, no matter how big or small that is, is a different experience that you just can't get because the risk, what that shows you have the risk taking abilities. You can be an executive at a company, then you're, you're taking risks just with your career.

Say, okay, I'm just going to spend some time. You always have a fallout fallback option, but when you're executing your own vision, you have stakeholders. It's not easy to just unplug from that. You're, you're on the hook. There's a lot of risks. You're managing risk. You're taking risks. You're going to track.

So I think that also would attract my attention where someone's started something and failed. As well, it doesn't have to be a super successful thing, but is there something, you know, there's some fail fast, fail forward sort of thing. In fact, I came across a LinkedIn profile the other day and, and honestly, the top, I don't caught my attention said serial entrepreneur.

Forex failed or something of that line, right? That's should be a bad, I mean, well in the Valley, it kind of is, but the point is the experience matters a lot in, in doing that. And so I think when you're looking at a founder, especially pre seed, if you're going to be a first time manager. And you have a small fund, you're, you're most likely to be looking at very early stage, which is the most riskiest.

And so how are you going to identify, first of all, what challenges of products, uh, are this vision is going to have, is there a right trait of founders exhibiting? And if you're claiming that you're going to be able to help them without operational background or being an operator, it's very difficult.

That's, uh, when I send emails, my second line is founder of one field startup, um, after my initial intro.

That's, yeah, it's good to mention that. I think it's, it's, it's, it's important to identify that because there's, it's, it's all about experience. You know, like I said, we tend to think about resulting. We were our previous conversation just, just to kind of close the loop on that because we're, we're so tuned to think about our outcomes and decisions in the same kind of way.

Correlation, but they're not really. I mean, I think outcomes sometimes become a function also of right timing and luck. Let's just start with that. But decisions are what are you, what data you have at the time to think that you're making the right decision. Sometimes a brilliant decision will turn up on the pretty wrong side of the equation when it comes to outcomes and a really bad decision could go wrong.

the other way. And so I think that's what it shows that you have the risk appetite. You have the, the sort of the aptitude to go after and make those decisions and outcomes sometimes can, won't go in your favor. And there's a famous, um, you know, popular term resulting in poker.

Yeah. Uh, I think Adam Grant talks about this as well.

And his book originals were reward the process, not the outcome. Don't reward luck. Cause bad outcome could, could come from a good process. Let's go deeper in that and let's get into building a startup and operational experience. And let's specifically go into incentivizing your team and your employees and let's transition to sales.

Right? So oftentimes you will incentivize the outcome in sales. It seems fairly, um, industry, uh, standard. Do you think that's Uh, incorrect thing to incentivize. And how do you think about incentivizing, say your own team, your own principles or analysts? And really focusing on the process, um, there

it's a difficult question.

I'll be honest. And I've seen a lot of enterprise companies and especially when I was one of the leading architects of Salesforce, I got to see the sales part. And sometimes these were very heavy engineering companies. Yeah. The incentives were pretty much towards sales. And so I guess let's start with.

With something that ultimately a company or a startup isn't the business of making money. It's making money for itself. It's making money for its employees to continue paying them. It's making money for the stakeholders and the investors. And would

you say making money is the process or the outcome?

Well, that process, well, it's ultimately the outcome that's going to drive the, the company. I think without getting the right outcome. The company won't survive. So outcome here becomes a survival sort of thing. While in, in many other interpersonal things, we can always say the outcomes and decisions can be sort of, um, separate in, in a lot of the cases here.

I think if we, the company ultimately relies on the outcome, but how the, how the structure of the people involved can be, can be detached and, and you're absolutely right, I think not only companies from their employees perspective, but even the CEOs. Get fired or, or, or let go based on just results, not the quality of decisions they made actually to think about it.

And, and that's something, and the reason, and the reason for that is because we do resulting, so to speak on that and that, and, and it's hard to get away from that because if the company has hit their marks and quarter after quarter, well, then it's a, it's a, it's a tight circle of not being able to get more money or existing investors, um, putting pressure and.

It's, it's, it's, it's beyond just one person's thing into personal. I think Google and technology companies started to incentivize engineers more than say traditional companies were, where they were just kind of one department. And so that thing's definitely changed right now. And so that's what Silicon Valley is all about.

The, the engineering became the Goldman Sachs kind of skills. That, that, you know, nineties were incentivized. So mid 2000s, the high incentives you saw were for engineers, but, but those companies were their entire product was an engineering product, but if we were to look at everything else and also remember, okay, so very important point is most enterprise These companies have a product that makes them money, right?

So an air condition or a car or, you know, any tangible product. Well, a lot of the companies that were incentivizing engineers and not just sales were because the user were the products. They were free products, right? So, so it's a different, it's a completely different, uh, dynamics where traditional companies had to incentivize sales team over.

There, even if it's an air conditioner over their engineers, because engineers can create the best air condition in their, in their warehouse. But if no one's buying it, then that is the best condition that sits there. But in the technology companies, particularly the internet companies, like the Facebooks and the Googles of the world, there's free products.

And the only way you saw adoption was a great engineering. And if you've got a great product out there, that meant. ultimately the outcome of money. So I think it was easy, in my opinion, to incentivize engineers there. It's not so easy if you're selling an actual product, we need to go through sales and the marketing and all.

And I think you need to incentivize that them over, I would say, engineers because they're selling. I'm not agreeing with that. I'm just saying what the dynamics are and how the structures are in place.

I'd love to get your thoughts on digital therapeutics. Specifically, let's talk about the downfall of pair.

It seems like their model was reliant on pharma drug pricing for a SAS service. Do you think the market is ready for digital therapeutics? And if not, when will it be ready? Yeah,

that's actually a good question. Digital therapeutics did have a very exuberant cycle, particularly during pandemic. And now it's starting to kind of.

fizzle down a little bit, but that, but any sort of innovative idea or sort of approach has to go through this kind of cycle. It doesn't mean it's, it's not there. In fact, I feel there's a, there's a really good place for digital therapeutics. The problem, I think, in my opinion, was it's always the over the hype cycle, the old, very, whenever there's a new approach to something, there are a lot of folks who enter the space with half baked ideas and, and then there's money that goes into it.

And especially if this hype cycle happens to be in low interest rate and free money environment, everyone with the PowerPoint will get money eventually even reach. And they're not forced to think business model, really. They're not forced to think, is there really a market that's ready for this? And if so, these are hand in hand question.

If there's a market, how do you get to it? And I think in Paris case was entirely reliant on pharmaceuticals, kind of assumptions that were made that there's a potential customers in this, but I think we're kind of starting to enter the space where I think a lot of that. It's true. Princeton now, I think real.

Real products with wealth out of business plans, business models. And now we have experienced learning from what didn't and did not work or did and did not work. I think you'll start to see some real application of digital therapeutics come together. It's kind of similar to what happened with. It, that, that can be applied really to anywhere in nineties, literally anybody with a PowerPoint deck saying, I'm going to turn this into a website.

Got lots of money. In fact, went to IPOs and we all know what happened, but the real sort of products that came out were after the crash. Um, I, I. I think that that's true for tech bio. I think that's generally true for digital therapeutics, which, you know, I think that's also true overall for digital health.

I think digital health went through the similar kind of cycle. So I think this is the right time to be in it. That's my opinion. But I think mental health, for example, preventative medicine. In terms of diabetes, I think a lot of these things have, uh, something that doesn't need sort of a pharmacological interventions.

We could use digital health technologies and and therapeutics kind to speak to, I think, um, has as a role to play, but I don't know if we have fully figured out the business model because ultimately the answer is who's going to pay for it. I mean, the question is who's going to pay. If for it and where the incentives are going to come from,

I'll push back on this a little bit.

I am not a fan of momentum investing largely because it's very anxiety provoking and it seems like a very difficult way to live life for me as an investor, but a lot of money was made investing in romance and cerebral and for him. Will these companies survive? I don't know, but regardless, falling these hype cycles, these bubbles, as long as you can get out the secondary market, we'll get out at the right time.

You know, momentum investing can make a lot of money. How do you think about emerging managers who come to you and say, I am predicting this next hype. I am predicting AI will take off at this point and there will be a bubble. I'm predicting the bubble. It will be a two year cycle. I'm going to get out at 18 months.

Um, do you think it's impossible? You know, this is a common mantra. It's impossible to time the market in the public markets. I do think the private markets are a bit different and maybe that mantra doesn't apply. Um, what are your thoughts in momentum pipe investing?

Yeah, I was going to say that. I think momentum particularly applies to a lot more in public, private.

The reason why it's private, it's called private markets. Not many people know about it or are playing in that space. So start with that. It's a very small space. Money could be quite, there'll be a lot of money in there, but small space, nonetheless. And so in that sense, if you can take in a contrary opinion and go with something that is.

Going to be very new. And if that works out, you will be called visionary. Sure. But I think those kind of bets are very easy, very hard to make if you're, if you have only a small amount of money to deploy. And so, and if you have a small amount of money to deploy, and you're going to just go into one sort of, um, And, uh, I wouldn't call it a hype cycle.

I would call it, um, the next big thing. That's what private markets are about. I think in fact, fundamentally the power law works and, and what private, what VCs have always kind of the model is to go into the next big thing. It is not about finding something that is stabilized between a, after a bubble or that, then you, you might as well be in a private equity model where you're really taking some step, some establishment and turning that, but it's not going to give you those massive returns that VC sort of promises.

So you have to be in some, some form of fashion, be in something that is going to be the next big thing. And you, you, then you make. Some intelligent bets. That's how I see it. But if you look at, um, how, how emerging managers would think about what's the next big thing, like take a look at example of AI. I think if, if someone was to just say, I'm going to invest in companies that are at the intersection of AI and, and all, I think the question that.

And will be, uh, how do you protect against yourself with the potential bubble that we are probably in and, and there are ways to think about. I mean, that's where the strategy that's where, uh, what you present ultimately will allow someone like me was looking at a pitch for the fund to make sense of, for example, if someone is to say, hey, I think AI and.

Is really ripe for precision medicine, for example, and then you show why such, right? I mean, and so that allows me to start thinking, okay, this is well thought out thesis. At the end of the day, these are all that's there's not nothing certainty and and there's a financial management aspect, which you were alluding to.

How do you get out? How do you have secondary markets? This is where I think season fund managers know how to how to do that. It's very difficult for emerging fund managers to think about, Hey, how do I. Okay. Think about how do I provide liquidity? How do I sell off in enough time to make sure that there is, uh, I'm getting out at the right time.

I think this, this comes from being seasoned. And so this is why I I've constructed my buckets where the established fund managers will do that. Some fourth, fifth fund managers will probably do that now. And that's why I call the last one very risky because you could be a great investor, but. Managing a portfolio is a different skill set.

You eventually start to learn, but you don't want to take a lot of bets on first time managers because as you know, as they say, I shouldn't be paying for your learning experience kind of thing. Those are my thoughts on that.

Yeah. And you know, I have a million questions about, you know, VCs who hold on to companies post IPO, but I want to ask a different question first.

And famously, Sequoia does this to an extent, um, how much do you rely on structure versus intuition when picking your investments? Do you have a scoring sheet? And I don't, I do not score my investments because I think I can talk myself out of investing in anything. I will never invest if I do that. Um, I do have a structured approach and then I apply intuition after I never invest against my intuition.

I have in the past. And I think, uh, it's too emotionally taxing for me, um, to an extent, how do you think about structure and intuition when investing

the way I think about investing, it depends on the sector, I think. In the areas that I'm, I bring that asymmetrical knowledge. And there are some areas where I think I could be a, quite a thought leader myself and we're standout, which is where I do some keynotes in those areas. That's where I really heavily rely on my intuition.

And of course, but for the structure, you know, the team and, you know, the typical structure that everybody has, but areas that I can, I understand. I get excited about. And the areas that I think this is very interesting, then I'll bring in folks that can do the diligence and I'll let them kind of give their independent thoughts, like write up like a very structured memo and what their recommendations would be.

And I will incorporate that. And then ultimately it's a bet. And so that's where intuitions do come in. But I think you can't just completely rely on intuition. I think if you follow a process, you also make it data driven in some. And so look at lots of data, uh, about the market, do some, um, um, sort of, uh, gathering of that on your own.

Ask the right questions, um, and then have the right folks involved in that particular deal to make sure you're getting contrarian views and independent thoughts on what that is, because that's a very important 100 percent of the times there's something you're not thinking of that others picked up on and that's within the team.

Right? And so that's why I have some mentor partners and, and, um, and associates that that really bring that to the table in certain areas. And so, and then ultimately. Okay. But lead the decisions mark and so this is where with everything that you have the diligence you've done Um, then question it's before even the intuition part where you're executing the bet.

It also is, what are you looking from that investment? Do you see that investment as potentially that's going to be the fund returners? Then you have to start thinking about reserves and the ownership, or do you see that this is a, this is an investment that may not scale to beyond like, say, 300 million.

but could have an acquisition in play. It could, it could be acquired and we're getting so early that if it gets acquired within two or two years, it's great outcome. It may not be more than two X, but it is, could be a good DPI, so to speak. And so my thought process is always, how do you invest a dollar and bring that dollar back very quickly?

I mean, I would be very happy with it. Would you invest against

your intuition?

Well, yes, if it's informed by the opinions that I've gathered from the team, and Have you in the past? Yes, and they have worked out very well and in some cases not so very well. So I think both. In fact, um, um, it's it's one of those things where Or, you know, I think your, how is your intuitions informed is also very important and how are you going against your institution based on what is very important.

Intuition ultimately is driven internally by I, I think, but if that I think can be replaced with some, uh, with some informed structures that you've learned to trust. And I think, I think. The mark of a good investor is to make sure that, um, you incorporate that and not drinking your internal Kool Aid all the time.

And, and there will be some strategies where people say, Oh, I'm just going to stick to what that is, but then you just be a solo angel investor. But if you're going to construct a portfolio, you're going to construct a team around you, then that's your best leverage. Yeah.

For those listening, Kahneman's framework of high and low validity environments.

Um, and I, I'll link to something that I wrote on that. Um, let's talk about first mover advantage or disadvantage. Let's talk about Peter Thiel's Zero to One, where you're creating something novel. And how do you value first mover advantage, building something novel versus the fact that oftentimes you're paying for your competitor's education or paving the way for them?

And I'll kind of say, you know, Google was the 18th search engine, which is a, that's repeated famously over and over and as, as pushing against first mover advantage.

Well, I think first mover advantage is only an advantage. If you are going to be kind of cutthroat in the sense that your mentality is to become a monopoly, as I think, uh, Peter Thiel famously points out in zero to one.

If, if you're going to be a first mover in a space and you're thinking incremental stuff, I think you will be replaced. And then you've essentially created market awareness and someone's going to come in. scoop that up. But if you're going to come in and think I, I need to become the dominant and this is going to be a kind of an eventually a monopoly, that's a different mindset.

And then there are different metrics to go after if it's a, if it's a, one of those products that rely. Heavily on users and how are you going to best capture the network effects? How, how is it that your IP structure comes into the play, which, which will allow you to kind of be in a dominant position where the trade secrets and the team that you start building ultimately, you just need to be, the founder has to have a very, I would say a really unique skillset.

To be able to execute some of those, I think those, it's not easy to see that at the time, but you have to pick up on that. Do they have that X factor, especially if it's going to be zero to one company, but you know, if it's going to be one of those where you have an incremental change and you get acquired, that's a different thing.

Otherwise, yeah, first mover is a very tricky situation. You could ultimately. raise good money and be a company. But then what ultimately will happen is someone else will capitalize on where you lacked and because they're going to be lean and things are much better in market awareness, they might outpace you.

If you look at Uber, Lyft was never able to come in and take their first mover advantage. Right. That's one example. But if you look at MySpace and Facebook, it completely flipped. And the reason, you know, if you look at both the reasons, I think MySpace was never thinking that we need to be a monopoly. I think they were thinking, let's just keep capturing, uh, teenagers who just like to have fun online.

And, and that's why they allowed anonymous postings, anonymous profiles. Nobody was who, I mean, you could be anybody and whoever. Well, Facebook said there's a bigger market to capture, but if we give them some security on what the profile, that's why they made it very private. You had to have a college email address.

You had to have email. You had, they made this sort of, uh, a culture to have a proper face profile in my space. These days, people used to put their band's profile too. Uh, and nobody was. Fully comfortable. I mean, there were folks, but as you kind of became older, you were not comfortable putting all your information on my switch.

It was completely open. Anybody could see anything. So this idea of private networks, um, was captured well, and that's, they lost their first movers. And, you know, we know what happened Facebook, but look at Uber though Uber on the other. I was thinking, Hey, this is us. We're going to think like this. We're going to invest so much money and, uh, getting lawyers to go and fight the city municipals and the medallion.

Okay. Things in the cabs, they were not bogged down and so Lyft has come, you know, I think there's, this was a space where there could be multiple winners for sure, but Lyft never came and kind of became the Facebook of that space. So, so kind of some examples, uh, it all depends. I think there are some markets where there could be multiple winners.

There's some markets, there's only going to be one winner. I think it all depends also on what the aspects are.

This reminds me of one of my favorite books that I regret not reading before my startup, the hard thing about hard things by Ben Horowitz. And he talks about wartime CEO, peacetime CEO, ruthless, formidable, radically honest founders.

Do you think all pre seed startups need wartime CEOs?

I don't know, actually. I don't, you know, I don't know. I think pre seed is such an interesting time period for an idea, really. Really, it's an idea that it really tests. As a founder, your resiliency and your commitment, I think if you're fully committed and you're resilient, you will, if you can survive that, uh, then, then your idea will start to take form or shape or form precede.

In the other sense can also be that you might latched on a pretty brilliant idea and you got some, some exciting funding, but you have, but you didn't get focused on execution and, or may not even have that skill. So I think Preseed is actually a very interesting one because there are some founders who can execute things very well, but they just can't fundraise.

They're not good storytellers. And so there are some founders who are really good storytellers. But when it comes to execution, you just can't, they just don't have that. So I think precinct investment is so risky and it's, and I have made. Pre seed investments, but let me just tell you, I've not made any pre seed investments without actually establishing a relationship with the founder, meeting them in person, having a meal, just got to understand beyond what that is.

There are these sort of, uh, soft skills that needs to come into play, uh, because that's what the stage of pre seed is. It's, it's, it's about, it's about soft skills. It's about. Being resilient. It's about, uh, getting, getting the funding in. It's about executing it on your ideas eventually. And this, and so that's why I think, by the way, I was reading some stats that a lot of the Y Combinator founders who kind of don't amount to much and they fold.

And I think one of the things that that's come to bear is that, um, it's, it's the execution or the focus. A lot of founders are also not ready to start. Managing money as well. There's just not. And so you get distracted by lifestyle choices, you know, especially if you're out of college and all of a sudden you have three, four, five, 6 million in funding.

And so are you even mentally ready for that kind of stuff? And it turns out not many are. And so the brilliant idea goes from could be the game changer to amount to nothing. Yeah,

I think, uh, why combinatorial healthcare is interesting, and I'm not sure. Healthcare is so specific where equity of access is paramount.

So a lot of the principles you will learn in business school and in the startup don't apply to healthcare. And a good principle is the 80 20 principle, or focus on 20 percent of your customers who deliver 80 percent of our value. You can't focus on 20 percent of your patients, you have to focus on 100 percent of your patients.

And move fast and break things. Like, there's a lot of mantras that, you know, are dangerous in healthcare. Um. Healthcare,

I guess, also depends what you're saying. Is it B2B focused? Is it, is it consumer tech? I mean, consumer then falls into the traditional stuff we're taking. You look at, uh, ORA rings or Fitbits of the world there.

I would define them as health products, but it doesn't have to be administered. But the whole idea of this health revolution is that it comes to our bedsides. And so in this, in that case, these are traditional tech companies, but I absolutely agree, I think health, if you, if. If there's a healthcare company that's going to help with EMR process or, or helping with detecting, um, postpartum bleeding with an, I mean, these are, yeah, those models absolutely totally upside down there.

You got to think of how the insurance comes into the play. What are the CPT codes or regulatory? Those are different skill sets and different than, than I think the typical, I guess, tech startup, which is, which can just be focused on finding product market fit and the users will network effect will carry you forward.

Yeah, I think the other common adage I'd love to get your opinion on is innovation happens from outsiders. Uh, I'm currently reading innovators dilemma and it kind of touches on this as well. Um, do you think that applies to health care? And a faith made example here is the Wright brothers versus Samuel Langley when they were developing planes.

Samuel Langley had tons of funding. I think he's from the Navy and the Wright brothers were these two brothers with a strong why, but very little funding. Um, do you think this rings true in biotech? Do you need industry expertise or can an outsider be successful in a biotech startup? As a founder.

Yeah, it's how it can be successful.

We've seen this with pharmacyclics. We've seen this with gen and tech. We've, I mean, we have, we have examples already. In fact, um, you continuously see examples of physicists getting into the space of biotech and being very successful. You've now started to see. AI talent come in and be successful, be it academic papers or pushing the field a little bit forward.

Look at DeepMind. I

mean, do you look for clinicians on the advisory board or founding

team or no? Oh, absolutely. I mean, I think if it's one thing to develop a technology and the other is the deployment of it and how, if it's particularly focused towards delivery of care, right? So DeepMind is solving a different problem with AlphaFold, right?

How do You find those structures and, and you can make it. Case that clinicians don't fit into that picture, but if it is, I'll give you the best example. If there's a company that is going to, uh, say we're using AI and to read digital pathology scans and we can identify patterns just from basic. H and E stains that, uh, if chemotherapy or sorry, uh, immunotherapy is going to work or not, which will be phenomenal digital biomarker to, to write a front.

Okay, great. This is a fundamental technology that can be developed by an outsider with, with getting some understanding of. Of how the pathology images are and can just take a view that I'm just going to disrupt this now comes the hard questions about, well, how is it going to deployed? What is the regulatory for?

How are you? How are you going to do clinical trials on this? What are some of the nuances that you missed? Uh, and so this is where the clinician. In the loop has to be very important. The ones who bring the domain knowledge and, um, and guide that through. Because without that, ultimately, the tool that's been developed here.

I'm just giving 1 example is for the clinicians to, to make better, uh, predictions of the outcomes. Right? And so if they're not in the loop. Then, then I think it, it, it, uh, it becomes a problematic thing. So absolutely in that space or anything that involves, uh, diagnostics and prognostics and delivery of care, got to have somebody that is, if, if not a co founder, then prominently present in some operations or advisory, uh, otherwise you're going to iterate on something that you may not find actual use cases for.

Last question, Sair. What is your contrarian truth? And we talk a lot about can AI replace physicians, but as a thought experiment, I'd love for you to give your thoughts on what happens when AI replaces physicians.

I think that the, I've thought about this question, but you know, I came across something that Richard Freiman said in the 80s.

The question about Replacing a human with some technology, be it AI, that question fundamentally is flawed because the question that planes replace the birds, planes are flying, but, but the concept of flying between a bird and a plane fundamentally are, but it's not the same plane doesn't have to flap the wings and plane can carry, uh, massive amounts of load or bird naturally what it does.

Right. And so pros and cons. And so I think that's where. Okay. I kind of start to think about what AI is doing. I think a lot of folks are getting bogged down on, is it going to become more intelligent, super intelligence? Because the, the word intelligence, we don't have a good definition for when a technology and I'll, I'll just keep it a high level technology, not even AI that replaces a human function.

It typically will do that if, if it really outpaces everything that we can do and it has to do it better. And fundamentally better, not only in automation, which is where I think everybody's focused on, but then there's a societal aspect of it. And I want to give you one example. When I was in high school or entering high school or middle school ish in Houston, next to my apartment, um, we had, I don't know if.

You are aware of Kroger's, but Kroger's is like this massive grocery store chain that we have in, I think, Texas and, and Ohio. So Kroger's had just employed these things called Uscans, which you can self scan these things. This is, I think, um, late nineties, early 2000s. And there was an article that came in Houston Chronicle that said, we have these self scanning machines, the future of cashierless.

services are here. And that article went on to make a prediction that his next five years or six years, we'll see less cashiers and self scanning what has happened after 20 years or even 20. We still have cash. In fact, more cashiers, you don't see self scanning as much. In fact, Amazon go did it take on these, you know, they had these airports.

I went back and they're all gone. All I'm saying is just because there's an automation, there's a technology doesn't mean it replaces the human function. And so when I think of physicians and clinicians, I put them in two categories and this might sound sort of crude. One is that are dealing with the humanity or humans that interactions.

And that it's, it's the same question as, do you want to talk to a human and deal with human? Because there's medicine. It's about healing and healing has a human touch to it. And then there's this back end operations of medicine. So radiology, pathology, blood. All of the other things that a patient doesn't have to typically interact with, I think those will be first to get automated and I think maybe potentially completely replaced at some point, but when you think, when you think of a physician that actually has to, that human touch, that's going to be very difficult.

It's the same example. If you want to look at what happened with cashier less systems. If you look at, if you ask most of these stores and I have, because I did Salesforce for them, simply the thing was just having a human present there. Makes better sales. It makes a better interaction. So I, I see a very hard time seeing physicians getting replaced by AI because we are at the end of the humans.

And at least we're not there yet. That was completely want to just sit at home and not no other interaction. But I do think that there are some functions of medicine and health. Delivery that will be fully automated for, for, because they will bring such a huge value add that just outpace what humans can do and the error rates and things like that.

And then, and just the speed of things. But I think the human, the physician that brings the human touch, the, the probial healing, I think that's, that's, that's going to remain. Do you have a hard stop, sir? I can go for maybe another, uh, 10, 15 minutes.

Okay. Um,

Let's talk about, is VC a game of picking the best founders or making them? And there's two kinds of different varieties of venture capitalists here. The founders front variety where it's really about picking the best founders and getting out of their way or the A16Z variety where, you know, you help the founders commercialize or exit as well and hire a team and help them as an operator as well.

Where do you fall in this paradigm? I think it

starts with

Uh, uh, uh, a firm's own capabilities and what they can bring to the table. It's very important for the investor to understand that and then kind of go after that model. I think A16Cs of the world are obviously much bigger with wider networks and they can certainly bring to the table, the value proposition.

And so being, being really tied to the hip with the founder obviously helps. But funds who don't have similar level of capacity, uh, You, you can bring some level of support system. Everybody has a way to bring that. And so I think it starts with internally evaluating what is it that you can do for the founder.

Of course, the, the most important thing you're doing is bringing the capital, but be. Being a strategic investor and being able to help them could be in many capacities. One, it could be helping them in thinking about business strategies, think helping them scale, helping them with next round in capital investments again, because every startup needs more money and helping with potentially getting customers.

And so everyone has that. Capabilities, no matter how big or small. And an example I'll give you is that say there is a company that is, um, bringing out some kind of a robotic automation in dental industry and in a large fund might bring a commercialization officers and things like that. But dental industry is very much mom and pop shop owned as well.

Yeah, there are bigger conglomerates, but there's this individually owned. And so a smaller fund might have Big relationships with these, these, um, sort of family style owned. Dentistries that own hundreds of them or some private equity firm that actually owns, you know, a few hundred dentists place, those could be potential customers.

So I think everybody has their skill set and, and, and capabilities that bring to the table. So I think it starts with understanding what that is and being able to, uh, communicate with that founder. And, uh, I think where you're referring to is that if you're a lead investor and if you're a lead, then you're on the board, that's a different ballgame, I think then you're.

They're on the board, you have to be sure you have to be very involved and not the operations, but just really be involved in what the company's progress are more than you would with any other portfolio of yours. You may rely on just a quarter of the update and you know, their updates, but when you're on board, your responsibilities are different.

Let's go deeper in the AI conundrum. Um, and I love talking about intelligence versus consciousness because we can see AI as being intelligent. Plants are intelligent, but they're not conscious. Um, Yuval Harari talks about this in his book Homo Sapiens quite a bit. I'd love to get your thoughts on consciousness.

What is consciousness? And do you see a future where AI possesses consciousness? And if so, will it pass the Turing test?

Well,

I don't. No, if I have some very well thought out things on consciousness, because that itself is quite a paradoxical if I'm consciousness, I'm thinking about consciousness kind of thing. And that probably what makes I think that my definition of consciousness is that. Beyond my sensory inputs and and just beyond just processing of things and myself my have I become aware of myself in light of everyone around me and I think that is a very different proposition on top of an intelligence.

So I think to me, intelligence and consciousness are different. Um, I think intelligence ultimately being. Is about how do you process data information coming in and to make certain decisions certainly consciousness can be mixed in, but consciousness about being aware of you and where you are in surrounding of the others.

And so example is plants, you know, they, they have an amazing process to stay alive and they do, but they're not, they're not self aware of. You know, in the jungle and things like that, they may have roots and that's what, but again, it's all about sense collecting sensory data consciousness, uh, arises from when you become self aware and, and you can start to observe things beyond just your data, data gathering capabilities.

So I think to me, that's at least what I, I have not done more metaphysical thinking on this intelligence though. The current problem that I have that the LLMs and what's happening, I mean, I think at the end of the day, are they reasoning that's where the everyone's divided on the matter. My thought is that it's not quite reasoning capabilities.

I think it has capabilities of of finding right substructures in this high dimensional space where. where you're, you're starting to, uh, to see where things fall in. So you can do the next predictions and you're aware of where, where things are. So you can start to kind of gather long sequences as output.

Is it reasoning? I think it's to be seen. It may appear like it's reasoning, but that's what predictions can do. It can actually, the stochastic processes can give you this perception that it's. The reasoning, so reasoning to me will be a little bit different than what's currently happening with, it's a phenomenal progress, so don't get me wrong, but ultimately at the end of the day, what large language models, the base models that we get are just capable of predicting the right, right next word with a certain view on the context.

That's kind of what we have. And then on top, we have this kind of the RLHF layer, which. Does the prompting and all of that, but that's just a nifty engineering, the reinforcements and all of that. I think it's still yet to be seen, uh, if we get full reasoning, because reasoning involves a proper reinforcement loops.

And so I'm really excited about reinforcement learning. I see that as the thing. And the last thing I'll say is that the other fundamental thing is that a lot of our models are given an objective function now, just to be a little more technical about it. Intelligence doesn't rely on a very specific objective function.

Our intelligence, if we're now starting, we were not given A particular objective function, we have multiple objective functions, and they all work in tandem in a pretty incredible way. And so an objective function where you're born is to make sure you're being fed milk. But if, if you're not, you will, you will have this thing to cry.

And, and so eventually that objective function over time learns to start becoming self sustaining, you know, I'm going to eat myself, but that's not the only goal. There are so many of these objective functions. So, I guess, ultimately, what I'm saying is, if we are to go toward. towards AGI. My, my, my opinion is that not only these models can really hone in on objective function, but these models will be able to tweak their own objective functions.

That's when we'll start to see real AGI, if that makes sense. This is where we start the reasoning. I can reason. Therefore, I can change my mathematical objective function, but that's not what we have right now. What we have is gradient descent, and it needs to have an objective function. Otherwise you when do you stop and the stop is local minima and such.

So I think it's a it's a it's a pretty catch 22 situation. But I think that's where I would be really convinced that we're moving towards. Yeah,

it would be interesting to see if acts in a social capacity like we do. If it interacts with other AIs, like we interact with other humans,

um, I, I think the social construct is very different.

I think I'm just really focused on just purely operating at a data point of view, social construct of an AI will require. Many different things. It's one thing to interact with Alexa, you know, in a shapeless, formless manner and a response comes back that will eventually become part of us, our, our, our life, kind of like how it.

Having a tv became part of our lives. If you had shown this concept of a portal where you're seeing things about 300 years ago, people would be like, this is not, this is not normal, like to sit there and like stare at moving things on a box. But now, if 100 years from now, maybe speaking to a box and having a proper relationship with that might be a normal thing.

But I think where you may eventually be going towards is sort of these machines that are now. In form of humans, like the humanoids and all. Perhaps there, there is. They have some room to be this, um, to be collaborative machines within ecosystem. And I think this is where really the social construct will come in.

Can they interact with being in the, being in the homes like a human would? And so this is where I think the human centric designs and things like that would come in. Yeah, I think that those are my thoughts on that. Uh, so social, social part is totally different in my opinion. We tend to mix that, but I think at the moment AI is just focused on can I look at large amounts of data and find rules that govern where these things were, how they were generated.

So in that sense, this model could inhibit what human reasoning could be. That's all it's doing right now. Right. I mean, Stack Overflow and Wikipedia, these are human thoughts. So the source, it's not, it's not creating a brand new source. It's just looking at what the human thought process has been. And through this mathematical operations of non and adding some nonlinearities, ultimately with, with massive amounts of layers in the middle, it's starting to say, Hey, I think these are the set of rules that govern these human thoughts.

And so hence I can predict the next word may look like reasoning, but I don't know if it is truly.

Well, thank you, sir. Um, and this has been amazing. Thanks so much for coming on the podcast.

No, thanks. This was a very good conversation, actually. I really enjoyed it.

Finding my purpose as a physician, artist, investor and entrepreuneur

Key takeaways:

1. Selling a product or interviewing for a job isn’t about you, its about the customer, the user and the company respectively.

2. Identify the world as it is, recognize the incentives and levers in place. After doing this, the path you should follow will be easier to pick.

3. The easiest way to build a product is to build something for your past self.

Transcript

Hi everyone, today I'd like to talk to you guys about my journey to where I am in my life right now. I've been spending quite a bit of time recently thinking about my purpose, my why, and really looking at the research behind the subject.

To give you guys a bit of context, I'll start with my med school days. I graduated med school in 2012. It was an interesting experience where I really did not find med school to be my passion until fourth year. So I didn't do too well in med school and by the end of it, I think it was a bit too late. I failed one of my exams called the Step 2 CS.

Now this exam was looked as a marker to see if you could communicate in English and because I failed it, I essentially did not get any interviews for residency programs. For those of you who are not in health care, After medical school, you have to do residency or you can think of it like an apprenticeship.

And if you don't do residency, essentially, you don't have a chance of being a physician, at least in North America. I had a debt of about 300, 000 as well at this point. So the only path to really repay that debt was to get a residency. After I didn't match, I cold called a lot of different programs and I knew what I needed to do is stay in clinical medicine in whatever capacity I could find.

I had a friend who was working in a research capacity at a hospital affiliated with Columbia University in cardiology. I did research there for about a year. I was under the impression that I will get a residency spot for their program if I was contributing effectively in the research. I had a visa issue as well as I was a Canadian citizen staying in the States.

I did not end up matching to that program, but I did get a lot of different experiences and research and publications, which I value and I think which helped me eventually down the line as well. I remember I was crossing the border back to renew my visa and I got denied entry into the States. My parents were in the States at this point as well, so I really didn't have any place to stay or anything.

Any place to stay or any form of a stable place in Canada. Nonetheless, I had friends and I'm very thankful for, um, for my friends who let me couch surf on their, um, couches for months at a time. At this point, without, uh, any in with clinical practice, I kind of learned the power of cold calling. I called every program in Canada asking for observerships.

Essentially, I just shadow physicians and I help out here and there when I can. So I must have, I think I looked into this before, I must have called about a thousand programs in various emails just asking to let me shadow help and research volunteer work. Thankfully, I was lucky and fortunate that a few of these programs and clinics gave me an opportunity.

Um, and I, I did the best I could in these overships and I got some letters of recommendation. I moved to Alberta at one point because to apply for residency in Alberta, you had to have a resident status. So I moved there, got a driver's license, met with the program and I was planning on applying for residency in Alberta as well.

There's a program in Canada where you can come back and do a practice ready assessment if you've done residency elsewhere. So I looked at other countries where I could do residency based on my medical degree. Jamaica was one of those countries, so I went to Jamaica. I met with the Minister of Health, and I remember this conversation very clearly.

The day of the meeting, I could not find My dress pants. Um, so I went in jeans and that was a big no, no. And essentially, from what I remember, he said, you will never get residency here because you're not dressed appropriately and you're not taking this seriously. And funny enough, my dress pants and my tie was in the front zipper of my back or my suitcase, and I didn't, I didn't, um, I didn't think to look there.

I was back in Canada, my brother matched residency in Winnipeg, and I finally had a chance to stay there. So I moved to Winnipeg. Manitoba had this program where if you've done an MD, you can take this exam, and if you pass it, you can work as a clinical assistant, um, which has a really good salary. It's, it's not the same as a physician, but it was definitely a path I was looking at.

So I took that exam and I passed and I got my clinical assistant license. In the meantime, I kept applying for. residency spots as well. I did really well in an exam called the Nagoski, and because of that, I got multiple residency interviews in Ontario. You notice for British Columbia, where I eventually did my residency, initially rejected me, and I wrote them back saying, you know, I think I'll be a really good culture fit for you guys, um, and I'd love to have the opportunity to interview you.

That's all I said. I remember them, um, emailing me back, spelling my name wrong, uh, but I, I think it, it shows effort. and commitment, um, that I did write something. I'll kind of pause here to, to highlight the first lesson I learned. When you're applying for a job, when you're selling something, it really isn't about you.

It's about the customer or the company or the workplace. And what you really want to do is identify what they are looking for. What are their goals? What are their aspirations? So at UBC or any medical school residency program in Canada in family medicine, what they're looking for. is to select people who want to be, uh, family doctors, who are capable, um, but to be frank, to an extent, post medical school, post our exams, most of us are capable, so it really comes down to, well, do you, is this what you want?

Are your goals aligned with our goals? So by this point, with my multiple rejections, cold calling, I had learned that lesson. And in my interview, eventually UBC did invite me for an interview and my first time in B. C. was for my interview, which is another thing going against me because usually residents from the ground, especially out west, um, they look for ties to there because they don't want to train you and then you leave the province and go somewhere else.

Um, but you know, I didn't really have many ties in Ontario either, so I had that going for me as well, or in Manitoba, which is where I was living at that point. I did well in the interview, and I got into residency at UBC. I did my residency on Vancouver Island and Campbell River, which is an amazing program, I think, great group of people.

I was under mediation during residency, and I think, again, my goals were misaligned with the program's goals. And the way the program monitored residents and evaluated them is not something I agreed with. And I think this is a lesson number two. If you want to decide what you want to do in life, the first step is to identify, I think, the roles you want to achieve or your goals.

Say you want to be, um, you want to start a company, you want to be CEO, or you want a nine to find your job and, um, have a more balanced life. And once you identify them, then work backwards. and figure out how people get to those roles. Um, and residency is one of these things where you are in some ways trapped, and if your goal is to furnish your residency, you just have to figure out what your program values, and how they evaluate residents, and just meet those metrics.

Um, I had figured it out, but I didn't accept it. I was still fighting it. Figuring out how the world works, the incentives in place, how leverage happens in this world is one thing. But accepting it is another thing. You have to accept it as well. Once you've mapped out these different paths to different goals you have, then you can decide, you know, which path you want to take or which game you want to play in this life.

So after residency, um, I did fail another exam called the CCFP. Um, and I passed it on the second try. And again, I think both my exam failures was... Linked to hubris, ego, and me not taking those exams seriously. Um, after I finished residency, I was working as a hospitalist at Sutter Memorial Hospital. Again, a great group of people really enjoyed my time there.

But, I was finding medicine and clinical practice monotonous to an extent, and I realized the immense privilege in that statement. You know, I did not grow up rich. I grew up in India. Um, and I remember when we moved here, the four of us left and here being Canada on 40, 000 a year for lots of years. And we were, we were more or less happy.

Um, so that's, that's all to say that, you know. Being able to be unhappy at my job and being able to have the privilege and the luxury to just sit and think about what I want to do, identify the paths, and then again, being able to pick the path I want to take and go on that path is an immense privilege.

I, uh, I realized that completely. So not being happy as a hospitalist, um, I was craving excitement. I was craving growth. There's a big arrival fallacy in medicine and other careers as well, where you learn, you learn. You go through tons of education and then when you arrive, you are at your maximum earning potential in medicine on year one post residency.

The earning potential really does not increase that much. And if you want to chase academic goals or titles, um, that's more of a status game. It's not a game I'm interested in playing, uh, although my ego at times drives me that way. I, I try very hard to temper that ego and largely because the path to success in that game and going back to what I was saying previously is not a path I'm interested in, in taking.

So what I, I kind of uncovered the world of entrepreneurship and the world of startups. Um, I had no idea about business, but I didn't recognize what I need to do is identify pain points in my user and my customer's journey. And again, in healthcare, the user and the customer are very different and I need to pick which pain point I can solve or I am best suited to solve.

And I landed on automated consoles. I started a startup, um, in a telemedicine space called ClinicUp. I have a full video, uh, about 18 minutes outlining my lessons from there, so I won't go through it, uh, for this video. Essentially, my startup closed down last year. It was not a successful exit. I did not make any money off it, but I wanted to stay involved, and I was still working full time in clinical medicine throughout, and I'm still working in clinical medicine in some capacity.

I wanted to stay involved in the startup world. I was really enjoying my time in the startup ecosystem. I really loved being a founder, building something. But I knew family life and that path is not possible with balance. And I'll kind of pause here. There's, there's two ways to go about planning your work life.

One is a balanced life, um, where you have time for family, friends, and your hobbies and interests on a weekly basis. The other path is when you work a hundred hour weeks, or say six months or a year, and then you take a break. I think I prefer the latter path, but my life isn't set up to take that path. At the current moment, I have two young kids, um, I have a loving wife.

And I want to give my time and energy and mental bandwidth, um, to my family. So I said, okay, I can invest in startups as a way of staying involved. So I'm closing it in my fifth investments. Um, I had a couple of friends in the startup ecosystem at this point. Um, and I had one friend in the BC world who introduced me to an angel syndicate, uh, Halo Health.

So I joined them and they taught me a lot and they were very, um, kind in, in teaching me about startups. I launched my own angel syndicate as well, which is health tech investors. It's the focus on education and run a podcast, um, just this podcast and a newsletter as well. And again, I wanted to identify, say, I want to be a venture capitalist or a founder or a successful podcaster or have a successful newsletter.

I wanted to identify what is the path to that. And it's something I'm struggling with right now is as I outlined these paths. It becomes clearer which path I want to take or which path best fits my personality or my goals. Um, and how I want to live my life day to day, week to week, month to month, and year to year.

For venture capital, I kind of realized there are four things I really need to hone down if I want to raise my own fund. The first one is having a track record, which I'm building right now. The second one is deal flow. And the best way to get proprietary deal flow, I find, is just putting myself out there, my thoughts as a physician, what I think is broken in healthcare, where I think the market in healthcare is heading, and what are the opportunities.

You need to be really good at picking as well. This is something that sometimes gets under looked. Picking startups is. I don't want to use the word easy. It is simple in structure. Do doings in startups, if you Google the term, you will get lots of hits. And more or less it's accurate, you know, you look at the founding team, you look at founder problem fate, you look at market timings okay, you look at what they're building.

You look at to see if the founders can build this and can they hire talent as they grow as well. You look for humility, you look to see if they have strong ideas loosely held. And then you get deeper into diligence and technical diligence. Um, and I won't go into due diligence, I've done a couple of videos on that as well.

And the last part is how do you add value to the startup post investment? So for me or for physicians, um, who are venturing in this field, physician founders, I add value because I have a founding experience and also because I have a vast network of physicians. Well, I can call on for startup advice or, um, or potential customers.

I won't go too much into podcasting and newsletters. Um, I find consistencies that can all make different episodes to go into more detail there. I wanted to give you guys some framework on how I am going on finding my why or my purpose. The first framework I want to say is ikigai, which is a Japanese concept of purpose for being, or what gives your life worth or purpose.

It's the intersection of what you love or your passion, what the world needs, your mission, what you're good at, your vocation, and what you can get paid for, your profession. And at the intersection of, of these four things is what your why is, what is your purpose. I don't know my purpose completely yet. I love building communities.

I love sharing my knowledge, my thoughts, which I would say is my selfish goal, or my selfish purpose. Um, my selfless purpose is partly, I see that physicians and clinicians are not involved in healthcare innovation and haven't been in the capacity I would like them to. I think healthcare would be better off, both in terms of equity of access and in terms of quality.

If clinicians were involved in the next startups in the next unicorns in healthcare The two best ways to be involved is either be founders or be investors Um, and as investors, I think we are backing the people doing the hard things which is founding a startup The second concept I want to introduce is called the hedgehog concept.

It's Introduced to me by jim collins and his book good to great a great book. I recommend everyone reading and that's Uh, lies at the intersection of what are you deeply passionate about? What can you be the best at the world and what drives your economic or resource engine? I want to pick on the second point.

What can you be the best at the world? And i'll tie in Naval Ravikant, AngelList. I recommend his almanac as well. I'll put all the book recommendations down below. Is what is your specific knowledge? What are your experiences, your skill set, and what is unique about them? And how can you leverage your specific knowledge to provide value to the world?

And again, going back to what I was talking about, doing something, and it could be anything, isn't about you. It's about what value can you offer to the people? that you're trying to, and I'll use the word sell here, sell to. So, and sometimes, you know, you look at what value can you offer to yourself five years ago, because there are several people, likely in thousands, if not millions, Who are in your shoes that you were one year ago, six months ago, two years ago, five years ago.

And I find this framework helps as what, what value can I offer to myself Last year when I started Angel investing and there's immense value there that current me can offer. And you know, that's, that's something I can package into a course possibly or run more pitch competitions like I did. Um, and I would encourage you guys to kind of write down, okay.

Imagine you're talking to yourself six months ago, or maybe five years ago, and what can you tell yourself? Um, and go in as much detail as you want. Another concept I want to introduce is the Simonson X Golden Circle, which is a why, how, and what. And really hone down into why are you doing this? Why are you doing what you're doing?

And what do you want to do differently? And I do want to double down on the privilege of all of these concepts and being able to say, okay, I am now trapped in a third world country where I don't have opportunities to an extent, where my why how what is putting food on the table, and that is the beginning, the middle, and the end of my why how what.

I have the privilege, and I think a lot of us listening to this video do, of taking time to think about this. I would like to end with, um, I think finding your purpose as you try and... Identify if you want to be a lawyer, a doctor, an entrepreneur, an investor, a podcaster, and you want to be a newsletter person.

Identify those vocations for what they are. See the world as it is, not as you want it to be. You know, identify the games, the structures, the incentives in place, and accept them. Because the world is as it is. You wanting to change the world. And then you can change the world, but again, identify how people have changed the world and how you can change the world.

And once you have these paths to whatever you wanted to lay it out and you have different options, then you can pick which game or which path you want to take. The hard thing about this is not the picking, it's the identification and the accepting.

Profitability in Healthcare: Akhilesh Pathipati - MVM Partners

I am grateful for Akhilesh Pathipati, MD, MBA to share his journey, experience and knowledge. He is a partner at MVM, a healthcare focused growth equity firm.

We talk about:

1. His journey in venture capital

2. AI in Healthcare

3. Profitability in Healthcare

4. Health system design

5. Future of medical education

6. His investment criteria

7. And more!

Transcript

Akhilesh: [00:00:00] AI and software in general doesn't have hard barriers to entry the way something like a medical device would. And so there are a lot of vast followers for any given AI application in healthcare. Certainly that's the case in something like Radiology, uh, A. I.

Rishad: Hi, everyone. Welcome to learning with Rashad on this podcast.

Rishad: I speak with clinicians, investors and health care founders. Today. I'm very excited to bring you accumulation is a partner at MVM, which is a healthcare growth equity firm. We talk about his journey from a physician to venture capitalist. His views on AI in healthcare, profitability in healthcare, health system design, the future of medical education, his investment criteria, and much more.

Rishad: I hope you guys enjoy this conversation. Our childhood defines us to an extent. There are things we learn in our childhood that help us, [00:01:00] and there are things we have to unlearn from our childhood to make us be successful. What are some things from your childhood that you learned that helped you? What are some things you had to unlearn?

Rishad: Just talk to me a bit more about your childhood.

Akhilesh: Yeah, yeah, happy to do that. And, and, you know, thanks for having me. I'm, uh, I'm happy to be here. I'd say my childhood, um, was in a lot of ways pretty idyllic. Um, you know, my parents migrated from India. Uh, you know, worked hard, uh, to take care of the family and...

Akhilesh: Um, you know, in some ways it was sort of a representative American dream kind of childhood. Um, and probably one of the more interesting things about it was that I did move around a lot growing up. So, lived in a whole bunch of different cities across the U. S. Uh, spent a bit of time in India as well. And, I think that contributed to various lessons that I, I was able to...

Akhilesh: Learn and unlearn. Um, [00:02:00] you know, probably the biggest was learning how to adjust to new environments and, and get along, uh, with people in those environments. Um, and I, I'd say the way, or one of the ways that I got comfortable with doing that was by learning to focus on the similarities in, in these different contexts rather than the differences.

Akhilesh: Um, so part of that was superficial. You know, we could always find an olive garden wherever I went, and that, uh, that gave me this deep and abiding love of chain restaurants that I still have, but some of it was also deeper, and by that I mean, you know, being able to focus on the similarities between people, you know, people are kind of the same in a lot of ways, want the same things, want, you know, security for themselves and their families, want to be surrounded by it.

Akhilesh: people that they care about, respected in their community. And, um, you know, it's not necessarily a very profound insight, but I think as a lesson to [00:03:00] internalize as a kid, it was a good way to help relate to people and helped shape the way I think about the world.

Rishad: I find that a commonality in a lot of people I speak with as they moved around a lot when they were children, people define home as a location.

Rishad: They ground themselves with their child at home for someone like yourself. And I'm the similar way. I think I moved 12 times before I graduated high school. How do you define home? Yeah,

Akhilesh: I'd, I'd say that, um, you know, home for me, there is an element of the, the geography of it. You know, the various places I've lived, I consider to be hometowns.

Akhilesh: Um, but a lot of it is defined by where where people are that, uh, that I care about. So, um, you know, my family, my parents, I still sort of, even though I've been away from home a while, I still associate where they are as [00:04:00] home. Um, so it's very, that's very people driven for for me. Okay, perfect.

Rishad: Let's move on to investing and let's move on to the tension between an idea meritocracy and an idea democracy.

Rishad: A true democracy, I would argue, is mob bro. Do you agree or not? And when you're thinking of specifically board composition in a startup, how do you ensure the best ideas when not the most popular ones?

Akhilesh: Yeah, I think that There's a couple of pieces to that to unpack. Um, you know, one is giving deference to, uh, to the people who may have the most experience with the problem.

Akhilesh: Um, and, you know, allowing them to have a little bit more say and what the, what the solution should be. Um, and I think there's a rationale for that where I think it can get [00:05:00] tricky in general is that it's not always obvious who has the most expertise. Thank you. On a given topic and certainly good ideas can come from anyone.

Akhilesh: Um, so I think I think it ends up being a bit of a balancing act. I'm not sure that I have a clear or clean answer to how you strike that balance other than going on a on a case by case basis. And, you know, for example, a boardroom. I think there is another component to it, which is maybe not, um, sort of the idea meritocracy necessarily, but You know, there is an element of different members of a board, for example, may have different levels of skin in the game, so to speak, in terms of investment into a company and the amount of and that's both sort of financial investment, as well as, um, you know, time spent with the company.[00:06:00]

Akhilesh: And I think that, you know, there is a, there is an argument to make that, you know, those who are involved in really in the weeds will often, even if they're not sort of on paper, the ones who have the most. Uh, experience in a given topic, the ones who have the greatest insights. Okay,

Rishad: let's talk about what you look for in a startup in a founding team.

Rishad: I feel like we accept that innovation happens at the edges. It happens from outsiders of industry. But in healthcare, we reject this notion. Are we right to reject this notion? Are we right to look for industry experts, key opinion leaders, subject matter experts on startup teams? Um, or should we look for other things that grant and perseverance and value those higher than industry expertise?

Rishad: Do you invest in startups without a clinical leader on the team in some executive capacity? [00:07:00] Yeah, so it's another

Akhilesh: interesting question. Maybe maybe to start with some context of the sort of investing I do. So I'm with M. V. M. We're a health care growth equity firm. Um, what that translates to is we do make later stage investments.

Akhilesh: Um, so the companies we invest in their revenue generating have a product in the market are focused on scaling commercially. So the needs of the companies we invest in are in some ways different than the needs of Earlier stage ones. With that said, I think that, you know, there are certain commonalities and ways to think about the, the management team.

Akhilesh: Um, in our case, sometimes it's founders, sometimes it's, you know, founders have stepped aside to, um, to, to elevate professional managers. Um, in healthcare, I think that expertise is very important. Um, again, [00:08:00] good ideas can come from anywhere. Um, but having having had experience working through certain types of problems in health care, you, you can't replicate unless you've been through them, you know, understanding what a regulatory pathway looks like.

Akhilesh: It's important to have experienced that in some way before to really know the nitty gritty of it and what sorts of problems will arise. Understanding what obtaining reimbursement looks like again. It's uh, it's a complicated thing and health care. And as you alluded to just understanding the clinical side of the business.

Akhilesh: Um, you know, having having expertise around that, I think is pretty important. Now, all of these things are things that people can learn. Um, but, you know, having having gone through an iteration of it does tend to make that learning a lot faster. Okay, perfect.

Rishad: Let's talk a bit more about your criteria in investing.

Rishad: Apart from the [00:09:00] financial criteria, what do you look for? And some of your investments, you know, they seem like ideas that make sense and are very obvious, like AccuVein. Um, and it's almost like, why has, has this not been done until now? Um, what is your criteria? Do you look for these ideas that are obvious and there is some technology or IP mode?

Rishad: That, um, pushes them into existence. So what is your framework?

Akhilesh: Yeah. Yeah. So it varies by situation, but I'd say there's certain things that were that we're generally looking for. Um, so the first one is a meaningful unmet need. Um, so market need clinical need, and that can take various forms. You brought up acuvene.

Akhilesh: That's a good example. You know, it's, uh, it helps solve the problem of IV placements, the [00:10:00] single most ubiquitous procedure, uh, that happens. And yet people are not very good at it. You know, they take multiple times sticking someone to be able to put an idea. And, uh, you know, it really affects the patient experience.

Akhilesh: I mean, you'll hear, you'll hear patients who went into the hospital to get an organ transplant. And then the thing that they complain about when they walk out is the bruise that they had from their I. V. Um, so it's something that, you know, that that makes a lot of sense. Um, so there's that side, the unmet need, and we want it to be a large market.

Akhilesh: So, uh, It's important to solve small niche problems and certain certain companies we invest and do focus on that. But in general, you want to have a large enough market for the. The technology to be interesting. Um, third thing that we're thinking about is what their commercial experience has been because we're [00:11:00] investing in companies that have product market fit, have a bit of a commercial track record.

Akhilesh: We can look at the numbers, look at the sales, uh, generate metrics that help us project out what that will look like going forward, um, which is helpful. And then we, we plug that into our own models and decision making. And I guess the last big thing I would emphasize is we do think a lot about the team.

Akhilesh: Um, you know, to the discussion we were having. Is it a group that understands this market and understands this technology? Um, is there a track record with them? If there's not a track record, how do we get confidence about their their ability to keep solving the problems that could arise going forward?

Akhilesh: And so that that ends up being a big part of our our thesis as well.

Rishad: Okay. Are you testing the team members to tease out internal team dynamics and also to see if they would be open to being [00:12:00] replaced by an external CEO if needed as often as the case? At later stages.

Akhilesh: I wouldn't say it's something we're explicitly testing.

Akhilesh: Um, I mean, it's the sort of thing that you see as you see how a team interacts and how they answer questions. Um, in general, you know, because we're, we're often betting on a team where we're not thinking about. Replacing them. Um, but if we are, then, you know, we will. We will want to be up front and understand where their head is that and, uh, you know, that's something that they think would be would be beneficial for the business or how they think the company should address potential gaps in the in the personnel.

Akhilesh: It has

Rishad: Um, do you guys buy out previous investors? This is something I've been thinking about when I think about portfolio construction is went to exit. And internally, at times, I would like to exit [00:13:00] around, say, 100 million startups I've invested in, um, so I can invest in more because I really enjoy the initial path in helping startups and investing pre product market fit, pre growth stage, um, what advice do you have for investors like myself who are looking to exit into secondaries?

Rishad: Um, if we see an investor like you, um, Investing in a startup we're invested in. Should we approach you directly? Um, as something I haven't done before. It's something I'm planning in the future. Possibly. Um, so just what is your frank advice for me?

Akhilesh: I'd say You know, we we do, uh, buy out existing shareholders through secondaries.

Akhilesh: In some cases, I think that for an existing shareholder for whom that's of interest, um, you often the best way to communicate that interest is through the management team. So, you know, let them know you'd be interested as part of the financing and, [00:14:00] uh, getting a bit of liquidity and then. The team can convey that on that there would be an opportunity for that to a new investor.

Akhilesh: Um, and that could be through the management team. If that's who's guiding the conversations, if there's any other form of. Intermediary that's helping with fundraising, then that's another, that's another good person to communicate it through. How

Rishad: do you look at consultants and people who help startups fundraisers and take a cut?

Rishad: Is this something I have been approached with? And I've said, no, um, cause it just inherently doesn't feel right to me. And I feel like a, the startup founders that should be one of their skill sets because early on at sales and product. And you need to be able to do both. Is that how you look at it? And what is your, what is your thought on because there is an industry of people who help startups fundraise and take a percent cut of what they raise?

Rishad: Um, what is your, what is your thought on that?

Akhilesh: [00:15:00] From my perspective, I don't, you know, I don't have a problem with that. You know, I think for us, we're always looking for interesting investment opportunities. And sometimes a given, you know, founder or manager isn't going to Know us or have access to us and the people who can help them fundraise, whether it's a, you know, consultant broker in the case of a lot of our investments, and it ends up being an investment bank has a network that that can, uh, bring in additional potential investors.

Akhilesh: And I think it's, uh, you know, very reasonable for someone for that work to, um, You know, to take a fee for it. Now, what you don't want to someone who does not actually contribute much value who then, um, still expects a cut. Uh, so it comes down a little bit to who the person is and what kind of value they can [00:16:00] actually create.

Akhilesh: But but if they are, um, really bringing in investors that are that are good potential leads done. I think it's very fair to, um, you know, have that role in the ecosystem.

Rishad: Would you invest in startups raising funds publicly on one of these platforms? Or is that, is that a, no, when you

Akhilesh: say publicly on one of these platforms, what's

Rishad: your list allocations card?

Rishad: Republic.

Akhilesh: Yeah. So, so for us, that's not really, you know, the right fit for us generally. Um, you know, I think that. For someone, uh, interested in the earlier stage businesses, which is often where you'll find us. Um, you know, there's nothing wrong with those, but for us as a sort of later stage institutional investor, um, it just doesn't tend to align with the types of [00:17:00] companies that we're thinking about.

Akhilesh: So,

Rishad: um, let's talk about yourself and your path from physician to principal to now partner. Um, talk to me about the decision to pursue medicine, to pursue an MBA, and then your path from there to where you are now, and I'd like for you to focus on the why, why did you make those decisions, and at times, I find myself making decisions because of status, because of clout, um, and I'm really trying not to, so I'd love to hear your why and how you made decisions to pursue certain paths that you did, and what other options Were you battling with when you pursued medicine MBA?

Rishad: Um, and, and the various roles you've had post till partner at MBM.

Akhilesh: Yeah. Yeah, no, absolutely. So I guess starting at the beginning, the, uh, the interest in medicine came first and, you know, [00:18:00] we, we talked about childhood. It kind of started there with just an interest in science. You know, I used to watch sort of Bill Nye and the magic school bus and, uh, you know, read Seymour Simon books.

Akhilesh: Hopefully these are relevant references. Um, but you really, really felt curious about it. How the body works, and then I retained that as I as I grew up and got a bit older and started thinking about career choices. And then the other piece that came in, um, you know, as as cliched as it sounds, is that I like the idea of doing something that helped people.

Akhilesh: So you're putting those together. Medicine felt like a very obvious, um, fit for me. And, you know, that was what motivated, um, applying to med school and going down that path. I'd say the decision to do an MBA was a little bit more of a winding evolution in terms of how my thinking went. [00:19:00] Um, so a bit of context there.

Akhilesh: When I was in college was when the debate around the Affordable Care Act was happening. And so that got me quite interested in healthcare systems and care delivery models and how to, how to structure systems to Make the, uh, provision of medical care more effective. Um, so then I started to try to explore that through a bunch of different angles.

Akhilesh: Um, so the, the 1st 1 was through, uh, policy ones. Um, so I did an internship with. California health and human services that was actually focused on implementation and, um, you know, how to how to respond to the changes happening at the national level, uh, looked at it through a sort of health system.

Akhilesh: Hospital lens did another internship with, uh. With the chief medical officer of a large, um, health system and thought it was a really interesting set of problems around, you know, resource allocation within a [00:20:00] system, how to deal with personnel, um, things like that. And then there was a sort of technology entrepreneurship lens.

Akhilesh: Um, so started doing a bit of work with. Organizations that were coming up with with new types of care delivery. So this was this was stuff in the sort of early iterations of telemedicine platforms, devices for remote patient monitoring, uh, stuff like that. And I really enjoyed that. And I felt like An NBA, uh, would be a way to really bring a lot of these interests together.

Akhilesh: Um, you understand how organizations work and and help me better articulate how I could see myself pursuing these interests, along with also just helping me be a better doctor, because I felt like understanding these things would, uh, help me provide better patient care. Um, so that was that was what led to me doing the NBA.[00:21:00]

Akhilesh: Once I was in the NBA, I'd say sort of got a lot of things out of it. Um, if I were to just summarize sort of what I saw as the main the main things I got, you know, one was I think there was some hard skills. And what I mean by that is sort of accounting finance, how to work a spreadsheet. It's helpful stuff to just be able to process what a business is doing.

Akhilesh: A lot of it was soft skills, uh, thinking about interpersonal dynamics. Um, so I went to business school at Stanford. There's a class called interpersonal dynamics, which is more popularly referred to as touchy feely, but it's about, you know, understanding people and sort of dynamics of influence within a group.

Akhilesh: And I think that is a big part of what business school was about. Um, third thing was certainly building the network, meeting a lot of people and that ended up becoming important and sort of later parts of this path. And then fourth thing was the [00:22:00] credential of it. You know, I think people do when a doctor also has an MBA.

Akhilesh: It thinks that, uh, it lends a certain credibility whether or not that that is merited. Um, so anyways, I was going through the NBA. It felt like I was acquiring these skills. Went through a bit of a decision making process around what I wanted to do and actually decided that you know what the future held for me post MD MBA was residency and practicing medicine.

Akhilesh: So that, um, that was what I, uh, decided to go forward with. And, um, you know, matched into an ophthalmology residency was sort of the path I was on. I figured I would incorporate the business interest through maybe working with companies, maybe trying to do Technology development, maybe doing healthcare administration.

Akhilesh: Um, during residency, um, somewhat serendipitously, I happened to meet, uh, a person, uh, one of the team members at MBM, who is [00:23:00] also an MD MBA. And so the meeting came about just as a way to connect with someone with a similar background. And fortunately, I was able to start doing a bit of work with the firm, because I was going to ophthalmology First couple projects were around I care, but then it broadened out and it was a it was a nice way to get exposure to, um, the type of investing that MVM does, uh, you know, got to interact with the people.

Akhilesh: Um, really, really good set of, uh, colleagues. And so. You know, after a bit of time decided that it made sense for me to transition over. Um, so left residency and, uh, joined the team at MVM full time. And so that's now, uh, where I've been for a little over four years. Um, would say that for me, it was, it was very much the right decision.

Akhilesh: I wrestled with it a lot at the time, but, um, it's really interesting work. Get to meet a lot [00:24:00] of interesting companies and, uh, the people that are in a lot of ways pushing medicine forward. So that's that's sort of the overarching path. Let's talk about

Rishad: clinical medicine wrote a paper in 2015, talking about our technology will not replace the doctor patient relationship.

Rishad: Let's dig a bit deeper. Let's talk about AI. And if we break clinical medicine to the art and science of medicine, it's fairly easy to say. AI will replace the science and usually there's not much pushback because we think of AI as intelligent, but we do not think of AI as conscious, as possessing empathy, as being able to love, feel jealousy, feel envy, feel sadness, feel happiness.

Rishad: But we see AI can produce beautiful art with DALI. AI chatbots can provide companionship. We can see a future where our friends, [00:25:00] our partners to an extent, our counselors. In this future, do you still hold true that technology will not replace the doctor patient relationship?

Akhilesh: I would, yeah. And... I guess there's a few pieces of that to unpack.

Akhilesh: Um, so even on the science side, certainly AI has made tremendous progress and being able to manage that side of medicine, even then, you know, I think when I look at the systems that are out there right now, it is more of an adjunct to A doctor's clinical decision making than a replacement. You know, maybe that'll change.

Akhilesh: But in general, medicine is slow to change, especially with, um, sort of handing over that kind of decision making, uh, trust. So, you know, I think there's a ways to go even on that front to A. I really sort of changing [00:26:00] how. Medical care is is provided on the on the art side. Certainly, I is starting to make inroads.

Akhilesh: And as you said, I think that, uh, the intelligence of it is starting to pick up on a lot of the, uh, relationship part of an interaction. That being said, it's hard for me to imagine a replacement. Um, and I think that there's some good examples of this. So, you know, if you look at the sort of explosion of care provided by telemedicine during COVID, you know, people thought that that was a permanent paradigm shift.

Akhilesh: Why would people drive to a clinic and spend time in a waiting room when they could just. Do all their medical care via zoom. Um, and that has not really borne out. People do still go to the office. They do still wait in the waiting room. Um, [00:27:00] and it's because there's something to the in person interaction, not even whether it's with a human or with an A.

Akhilesh: I. But just physically being with a human that seems to be Uh, important to people. Um, all of which is to say, I think, you know, there's there's more to the doctor patient relationship than, um, than what technology, at least, at least at this point, can, uh, can replace. Let's talk

Rishad: about medical education.

Rishad: We've seen this with software engineering, where the value of a computer science degree, it's still valuable, but not as much. And we're open to looking and valuing people as a society and as investors. who have not gone to Harvard or Stanford or MIT for computer science. It's okay if you learn to code on your own or with coding camps or code academy.

Rishad: Do you see that happening in other industries in, um, in medicine first and foremost, [00:28:00] but also in accounting and legal services? Um, and I would say those two are probably more amenable to an LLM or a child GPT, and maybe this is because I don't know them intimately like I do medicine. Um, But do you see the, the pathway of education changing to more a decentralized system of certification and the ability to practice medicine in different ways?

Rishad: And I will caveat this with, as from my perspective, the opportunity cost of med school, residency, financial and time wise is too much, um, for future physicians. And I think we will see a shift in either physicians. For going that path to more, to paths that are shorter in time frame, but also less costly, like NP or PA or just doing something else altogether.

Rishad: Yeah. So,

Akhilesh: you know, again, I think a bit to unpack there, um, you know, like you, I'm [00:29:00] not an accountant or a lawyer. So hard for me to really say if, if those are professions that are going to have. Um, significant changes to, uh, the education path as well as, you know, what credentialing looks like. I would suspect that they are more, uh, accessible to LLMs as a, as a, as an area of expertise.

Akhilesh: Um, you know, to focus on medicine and medical education, I do think that the. Existing credentialing pathways are going to remain in place, um, you know, for medicine and sort of being able to, uh, treat people. I think there's, there's just too much, um, pressure to have that done right to. Sort of, at least in the near term, [00:30:00]

Rishad: change.

Rishad: Do you think that's, uh, that's because of accuracy or because of liability or accountability?

Akhilesh: I'd say it's a mix of all the above. I do think there's an accuracy component. Um, you got to be really sure. Um, not that, not that people are always accurate, but the standard for Changing the decision making is higher.

Akhilesh: Um, and yeah, I think that, you know, sort of liability, the whole, um, yeah, the whole, the whole ordeal of it is more challenging. So what I guess what that means for medical education, I think that the existing pathways will continue to be the pathways to train doctors. I don't really see. Or foresee significant decentralization of, uh, of how that works.

Akhilesh: Um, but in terms of what the existing pathway looks like, I think that can and should evolve. Um, and I guess to take a step back [00:31:00] as far as medical education goes, it is something that I've sort of been interested in. I think education is a an interesting subject in general. Um, and when I was in med school, did a bit of Sort of research and writing on on the education side.

Akhilesh: Um, started out as a parochial interest. Basically, how can I make my experience better but but evolved into some of this discussion around, you know, what is the right way to to really train doctors for for the future? Um, and I'd say there's a There's a few things that I think will probably change over time.

Akhilesh: Um, one is, I think the path to becoming, uh, a doctor will be or should be shorter. There's a lot of inefficiency and the education path. I mean, if you take Medical school alone. You've got the standard path set, you know, 100 plus years ago of sort of two years of [00:32:00] preclinical preclinical education to use a clinical education and within that preclinical part is heavily redundant with what people learn in college.

Akhilesh: You know, people are doing pre med requirements might as well make those useful and pull in a lot of the stuff that that's covered during the preclinical years.

Rishad: I'm still waiting to use the Krebs cycle in my clinical practice.

Akhilesh: Yeah, yeah, and you will, right? You'll just continue to wait indefinitely. Um, and then even the clinical years, I mean, I think that a lot of people, uh, you know, they decide their specialty at some point in their first clinical year.

Akhilesh: And then the 2nd, 1, they're either wrapped up with their rotations and not doing much clinically, or they're doing sort of peripherally relevant elective rotations. Um, and, you know, maybe some people do want to. [00:33:00] Do more and take more time. But for a lot of people, I think that ends up being unnecessary. So that's 1 thing where I think there can be curricular compression and that will happen over time.

Akhilesh: Um, the 2nd thing that I think, uh, there's a bit of a sort of, uh, cause of mine. You could say is, I think the culture around research and medical education is something that should change. Um, and there is valid. Thank you. Historical roots for that. You know, once upon a time, doctors were the main scientists who were, uh, the force behind most discoveries.

Akhilesh: Um, and for people who are interested in research, I think it's important for them to have Resources to be able to pursue that. Obviously, it's very important in terms of pushing medicine forward. But I think in today's, uh You know, medic med ed culture, it's turned into this currency [00:34:00] of achievement that is not linked to actually useful things.

Akhilesh: So routinely for people applying into competitive specialties, you know, they'll have dozens of publications. That's the norm. And yet, if you look at there's a study a few years ago that looked at. medical student publications and found that the majority are never cited, not even once. So you have this explosion of, uh, low quality research just because there's this expectation that everyone needs to be doing research.

Akhilesh: And that's time and money that could be better spent. You know, for people who are not interested in research, they could be doing things like policy or entrepreneurship or just becoming better clinicians. And what that does is it opens up more research resources for the people who are genuinely interested in pursuing research.

Akhilesh: And, you know, it's it's true in med school, [00:35:00] where, you know, sort of rates of people taking research years are at all times, all time highs. And it's certainly true in residency as well, where many programs will have built in research years that just extends the pathway. And then the third thing that I think is important in medical education is making space for, uh, teaching some other skills.

Akhilesh: And the two that I would have in mind. One is, uh, some of the stuff that you do learn in an MBA or things around understanding how health systems work. I think that when you hear about Physician frustration and burnout. Some of that is because of just not understanding how, um, how health care delivery works.

Akhilesh: Um, and I don't mean that in the sense that, you know, doctors don't understand health care delivery. It's that they weren't prepared to Encounter these challenges. And I think that some of that can be addressed. And the second thing is, I think [00:36:00] teaching should be more emphasized in the process of medical education, because In going through it, inevitably, people have to teach others, but they're just kind of thrown into it and told to figure it out, as opposed to there being any formal muscle behind that.

Akhilesh: So that, that's sort of my, you know, let's call it three point plan for fixing American medical education. And, and to the point you raised about, you know, maybe there is a shift to more NPS, PAs, other, uh, sort of mid level practitioners. I do think that, you know, there is likely to be a, uh, increase in, in that type of thing over time.

Akhilesh: Um, just because, you know, it is one, uh, a shorter pathway and two, there continues to be a need for more clinicians and that's a way to get more people, uh, into the field. When you

Rishad: were talking about achievements and how our research is looked at as achievements. by physicians and med students. And [00:37:00] it's almost this pedestal you need to reach by publishing in nature.

Rishad: It reminded me of the book I'm reading right now. It's called Start With Why by Simon Sinek. And he talks about achievement versus success. Something I've seen in myself as well. Oftentimes I am conflating achievements to success and thinking when I reach those milestones, I'll feel successful. I'll be happy.

Rishad: And this arrival fallacy is a massive issue in medicine, where we are told once we become staff, once you become attending, things will be better. You are successful now. You have achieved what you set out to achieve. Um, and then we almost feel, you know, okay, I have achieved what I set out to achieve. I'm attending.

Rishad: Why am I not happy? And it's because of this conflation between achievement, success, and happiness. And I would love to hear your thoughts about [00:38:00] what is achievement? What is happiness? What is success for you? And do you differentiate between the three? Um, or not?

Akhilesh: Yeah, no, I think, I think you're absolutely right.

Akhilesh: Those are not, uh, not all the same things. Um, I think that, as you said, there is this chase of, uh, of the next step. And it's true in medicine. It's true, you know, across professions. I wouldn't, I wouldn't limit that to medicine. And finding these signals of achievement that are sort of externally driven, I think, and it can create sort of transient satisfaction.

Akhilesh: But 1, it does not, I think, create internal feelings of success and happiness. And 2, I think, even externally, it doesn't necessarily accomplish anything if it's, uh, you know, in the example of sort of publishing something that never ends up really [00:39:00] good. Being used for for driving the field forward. Um, so I think that can be a little bit artificial.

Akhilesh: A lot of the signals of achievement. I think that what people feel proud about and feel like when people feel like they have accomplished something, you know that that is a barometer of success for an individual, right? Um, and, you know, that can be, I think, in the context of something That is also regarded as an achievement, but it doesn't have to be.

Akhilesh: Um, that can, that can take many forms. And similarly, you know, what ends up making people feel happy, I think, could be something else entirely. And, and I don't, I don't think there's a one size fits all answer to that. I mean, some people are very driven by achievements and. Success. And that does, I think, genuinely [00:40:00] contribute to them feeling happy.

Akhilesh: But for a lot of people, I think, you know, it does not. And what, what contributes to happiness can be something else entirely. I think for a lot of people, it's You know, time spent with family, for example, or time spent on hobbies, um, or, or other things like that. So everyone's got to find their own balance of, uh, of chasing those things.

Akhilesh: But, you know, as you said, it's worth, it's worth disaggregating what each of them are. When you look at

Rishad: how to design your life, I find there are two paths. One is a balanced path where every day, every week, every month is balanced. You're working nine to five, or you're working 40 hour weeks, and you have balance in life, you have weekends off.

Rishad: The other path, and this is borrowed from Naval Ravikant, who's the founder of AngelList, is the path of what he calls the lion's path, and, you know, he's, he's, [00:41:00] clearly he supports that path, because that's the lion's path, whereas the other one is the, is the, is the sheep's path, but I don't agree with that statement, but the other path is...

Rishad: You sprint and you work 100 hour weeks for six months, a year, two years, and then take a year off. So you have these, these times in your life, but all you're doing is devoting completely to one thing and being a startup founder. I think most founders will resonate with that. Um, and most VCs to an extent as well.

Rishad: Um, although I do believe as, as investors, we are backing the people doing the hard thing, which is founding the company. Um, what is your. What is your intuition there? And what are your thoughts on which path is the best path? And how do you look at balance in life, um, from day to day, month to month, and then also year to year, decade to decade, and in life as a whole?

Akhilesh: Yeah. Well, again, I think there's no one size fits all answer. [00:42:00] And as you said, I'm not sure sheep and lion is the, is the right way to characterize the two paths. The other thing that, you know, occurs to me as you laid that out is It's, uh, both of those paths fall along the spectrum, right? That's not a binary find the balance sheets path or a binary, you know, really sprint.

Akhilesh: Um, you know, I think that for any given person, they'll sort of flicker between the paths, uh, over time to differing magnitudes. Um, you know, certainly, I think a lot of the way high powered professions are set up is is on what you can call the lion's cup. Um, certainly medicine fits that mold and going through training.

Akhilesh: And then there's sort of this promised land of Of being an attending at the end of it. Um, but I'm not sure that that's [00:43:00] actually borne out for people who who set themselves up to follow the lines path. I think a lot of people go through a sprint to get to some point. And then what they find is that they're still sprinting and they they can't get off that treadmill.

Akhilesh: And I'd say that that's much more common than sort of going through it and then and then finding later balance. Um, so I think for any given individual, you know, again, some people want to be sprinting and that's fine. But if someone wants to have balance, they, you know, they, I think it's important to be conscious about finding that and, um, you know, being intentional about finding it.

Akhilesh: And I'd say, you know, that, you know, certainly I have plenty of sprinting that I do, but I certainly value having balance

Rishad: as well. I'll ask a question which may be thought of as crude [00:44:00] or pragmatic, depending on the lens through which you view the world. Would you make more money staying in medicine or being a VC?

Rishad: And then I would like you to balance this with the money in medicine is almost 100% risk free. Whereas the money in VC does involve some risk, which could be looked at as luck, and you can divide luck into dumb luck or luck is where opportunity meets preparation. Um, but do let's let's go with a crude question.

Rishad: Would you make more money as a physician or as a VC? Well,

Akhilesh: I think, um. Maybe a couple of dimensions to this, right? So as you alluded to, I think, you know, different paths have have sort of different trade offs. Um, I think when people leave medicine, you know, let's say to go into investing, there is the potential to make a lot of [00:45:00] money and could be a lot more money than, uh, than a career in medicine.

Akhilesh: Um, certainly, I think that's one goal of, uh, In in leaving medicine, among others, certainly not the sort of only or even necessarily driving goal. Um, however, it's at risk, right? Um, you need to be in a situation where you make good investments need to have access to those investments and put enough money in them to generate returns that, um, that are, uh And that's not by any means guaranteed.

Akhilesh: Um, so you then balance that against in medicine, particularly for someone who wants to make a lot of money in medicine, you can have a very high floor of income and just a very high expected [00:46:00] value, um, professionally. So. I don't know, uh, sort of what what ends up being the higher expected value. But, um, you know, there's different trade offs.

Akhilesh: I think the other thing with medicine that varies from some non clinical paths is, um. You do have certain choices you can make that are not necessarily available in other careers. So for example, a doctor can choose to live wherever they want, right? They can go to a very low cost of living place, in such a place they can Make even more money and have even higher purchasing power.

Akhilesh: Um, for a lot of other things, you have to be concentrated and certain cities, maybe less so now and sort of a remote working world, but still very much. There's a density of people and investing or, um, you know, other other [00:47:00] professions like that and sort of Boston, San Francisco, New York, these types of places.

Akhilesh: And so, you know, that's another what ends up being another sort of financial trade off to think through,

Rishad: you think founders are unnecessarily playing the game on hard mode. They're not in Boston, San Francisco or New York.

Akhilesh: Not necessarily. I think it depends on what they're trying to accomplish. Um, certainly if someone is building a business where they need it. A lot of very high caliber software engineers, they're going to be able to find those in certain cities, much more cinema than others. If they're building something that is, you know, uh, a technology, um, that requires a few people dedicating a lot of effort and those few people, uh, are interested in living [00:48:00] somewhere else, then there's no reason they have to have to be concentrated and in those places.

Akhilesh: Um, So I think it depends on on the circumstance, but I think there's a lot of great companies that are not in those cities. And, um, and I think there's increasing recognition of that in the in the investing world.

Rishad: What are some applications of AI and healthcare you're excited about?

Akhilesh: It's an interesting question. Um, I think that AI and healthcare, it's an area that's very much evolving. Um, and that's happening rapidly. Thank you. Um,

Akhilesh: there are tools around decision support that I think are pretty interesting. You know, you hear about sort of a standard examples and [00:49:00] radiology, let's say, to help clinicians make decisions. Um, there are tools around workflow management that I think are pretty interesting. There are tech enabled tools around things like clinical trial recruiting, um, and commercialization of new technology that are, that are certainly interesting.

Akhilesh: And while there's a, there are a lot of things that are interesting, I, I think that there is also a lot of reason for caution. When evaluating a I and health care on making sure you don't sort of put the cart before the horse on and sort of run ahead of what, uh, improvements it's actually able to deliver.

Akhilesh: Um, and I think there's a little bit of that happening now. So I'd say that that's sort of an important thing to keep in mind. The other thing that I think for people in general who [00:50:00] are working on AI and health care should bear in mind is that AI and software in general doesn't have hard barriers to entry the way something like a medical device would.

Akhilesh: And so there are a lot of fast followers for any given AI application and healthcare. Certainly that's the case in something like radiology, uh, AI and. If there isn't a sustainable way to stay ahead of that competition, what it translates to is a race to the bottom on pricing, maybe something like that's okay.

Akhilesh: When you're doing something consumer facing with really massive markets, if you're targeting one niche application in healthcare, you know, that market may not be large [00:51:00] enough to make that an interesting, uh, An interesting business case once once you start to get a crowded market. Um, so I think that's something that, you know, founders and and startups need to keep in mind when they when they decide on what aspect of A.

Akhilesh: I. And health care. They may be working on

Rishad: one question. I try not to ask founders as I don't think it's a fair question is What if incumbent X does this? What if they copy? What if, you know, we've seen examples of Instagram and Facebook or Zoom and Microsoft Teams, where the startup has achieved distribution before the incumbent has achieve production.

Rishad: Do you think it's different in healthcare? And specifically, I'm referring to Epic and their, you know, somewhat famous mantra that [00:52:00] they do not acquire companies, they copy them. Um, do you think it's a, it's a realistic fear for startups in healthcare? And if so, what is a good answer to that question? If they're building something.

Rishad: That epic could potentially copy. Um, how do they navigate

Akhilesh: that? I think it's a realistic fear. And, you know, certainly investors have to weigh that risk when they're considering investing in a company. That being said, I don't think, you know, someone can just throw their hands up and not try to solve a problem because someone else might try to solve it.

Akhilesh: Right. And I guess there's two things that are sort of worth saying in response to that question. One is that large incumbents, uh, they can only focus on so many things, you know, they're not going to go and reinvent [00:53:00] every single solution. That's out there. There's just not the ability to do that. And, you know, they tend not to be set up to do things like that.

Akhilesh: Most incumbents are set up to innovate. By the, uh, the products and services that they want to expand into. Um, so that's that's the first one. And the second one is exactly that, that, you know, ultimately, the large incumbents are going to have a buy versus build decision, you know, maybe epic is one example where they say they won't buy things, but in most cases, someone else might.

Akhilesh: Um, and so, you know, that's, that's something that I think startup managers need to believe, and that's something that investors and making their investment decisions have to come to a view on. If

Rishad: you could go back in 10 years and give yourself one piece of advice, what would you

Akhilesh: tell yourself? [00:54:00] That's a good question.

Akhilesh: I think for me, you know, 10 years ago, I was, I was very much in the midst of figuring out what I was going to do in life. And so what I would advise is get exposure to as many things as possible. I think that. You know, having very broad exposure is the best way to make informed decisions, and I often talk to people who are roughly at that stage and, um, you know, they're, they're sort of asking, well, how do I get into investing?

Akhilesh: Um, and, you know, there, there are answers to that, but I think a lot of times the, uh, the most important thing for them is to decide. What they want to do and the best way to figure that out is is exposure.

Rishad: Last question. If Elon Musk gave you a one way to get to Mars. To help him build a health system there, [00:55:00] would you go?

Rishad: And you could take as many people, friends, family you want.

Akhilesh: Well, building the Martian health system. Very intriguing. Uh, I, I would not go to Mars. I think, uh, you know, I like it on Earth and got, got more stuff to see here. But, um, you know, I'd be happy to advise him from Earth on, uh, on how to set up that health system.

Rishad: One thing I struggle with. is profitability in healthcare and specifically designing a healthcare system of profitability which has equity of access but also if profitability is the motive the first the easiest way to trim the system of excess Um, expenditure is to fire physicians. I feel we're a very expensive way to deliver care.

Rishad: Um, [00:56:00] so I'd love to hear your thoughts about profitability in health care, um, equity, and then, you know, how do you look at the future of physicians in a profitable system? And also, where should the profits lie? Should they lie in the delivery of health care, in the delivery of primary care, tertiary care, secondary care?

Rishad: Or in innovation or R. N. D. or the pharma biotech side of health care. Yeah, that's an

Akhilesh: interesting question. Um, I guess for me, and this will reveal some of my own biases. I don't have a problem with the profit motive in health care. Um, you know, I'm sort of a, uh, capitalist in that regard. And, uh, I think Private enterprise tends to deliver efficiency and innovation and, uh, in a way that, um, you know, the public sector often can't.

Akhilesh: That being said, I think what you need for it to work is [00:57:00] appropriate guardrails and regulation to, um, to keep the system doing what it's supposed to be doing. Um, and so what does that look like? I think that can take various forms. You know, one is you make sure that. Health insurance is available to everyone, um, in some form or fashion.

Akhilesh: You make sure those plans that are offered have some level of minimum, uh, requirements, uh, minimum standards. Uh, if that's too expensive for people, you know, you can have subsidies to make sure that it's available. So, you know, I think different countries have... Sort of looked at different ways of solving that problem, but I, I think those are, uh, tractable problems.

Akhilesh: Um, you know, another thing that I think is sort of a good example of where, um, you know, regulation can. Bring down costs and then by [00:58:00] extension, increase access is this issue of. Administrative waste and health care. Um, there's there's just a lot of administration and U. S. Health care, right? And you referenced where the expenses in terms of personnel and arguably doctors are expensive, but, um, there's this popular chart you may have seen that shows over time, just this total explosion of non clinical staff and health care Relative to a very stable, um, number of clinicians that are actually providing care.

Akhilesh: And, you know, I think when you look at why that explosion has happened, it's because there is a lot of poorly thought out regulation that creates more bureaucracy. But there's also things that are just unnecessary. So, for example, Every insurance company having a different set of mechanics for billing and [00:59:00] coding, which requires lots of people to be able to work through those mechanics.

Akhilesh: It's because of a lack of interoperability of medical record systems, and people are working on that, but, you know, health systems want non interoperable systems so that it's harder for patients to move and. There's no need for that to be the case. That is something that could be acted on by the government to create standardization around those sorts of things.

Akhilesh: And when you do that, I think you take out a lot of the expenditure, a lot more, in fact, than what is spent on physicians. And, you know, that then contributes to lower costs and being able to dedicate more resources to increasing access. So that's that's sort of a, I guess, set of general thoughts. Um, and I guess 2 other things I might mention just about where I think the profit motive is a little bit underappreciated and, uh.

Akhilesh: In U. S. Health care. Um, you know, [01:00:00] one is around new technology. So you mentioned, you know, should should new technology be an area that's profitable? I think that it should be. I mean, that's why that's why people develop new things and because the strongest profit motive is in the U. S. This tends to be where that technology is developed, validated and ultimately paid for.

Akhilesh: And then it spreads to other countries. often at lower cost for two reasons. One is that companies have made their profit in the U. S. so they're able to offer it elsewhere at lower cost. And two is they go to other countries once they're at a scale where their cost of production can come down. Um, and so what that translates to is it's not actually that other systems Have eliminated the profit motive and have therefore been able to offer more equitable care at lower cost.

Akhilesh: It's that the U. S. system where [01:01:00] there is that profit motive has subsidized care in those systems. I'm not sure that's, uh, talked about enough. And then the second thing that I'd say about the profit motive is that it's a way it's something that enables more patient choice. So again, if you look at the U.

Akhilesh: S. versus other countries, People here do have an inclination to spend more on health care. Um, even when something is cash pay, not covered by insurance, it's much more likely to be taken up here than than elsewhere. Um, and that translates to heavy spending in some areas. I think a couple of good examples.

Akhilesh: One would be end of life care. Another would be on things like cancer care. Um, and You know, I'm not saying that's the right priority, that there should be a lot of spending on those things, but there is an argument that, you know, if a rich society is going to choose to [01:02:00] excessively spend on something, extending life might be that thing.

Akhilesh: Um, and, and I think, uh, it's something that's at least worth, worth thinking about and, and how these systems are constructed.

Rishad: Yeah, I think, um, so I don't know if we talked about this, but I used to do quite a bit of palliative care, um, and end of life care and medical assistance in dying as well, which would be called euthanasia in the States.

Rishad: I think the, the, the quality and quantity of life and patient choice and autonomy comes into play there. And different cultures look at this differently. Um, and some cultures, life on earth is not our life in totality. And death is but a passageway into her future life. Um, in most cultures, I think that is the case.

Rishad: [01:03:00] Um, and in some it's more, this is the life that we know. And even though there might be a life in the, in the future. Um, and I think this is where most atheists and, uh, agnostic individuals stand, um, since we don't know, there's no point in designing this life based on that life, um, and there are people who say life of suffering, and Mother Teresa is a good example here who thought this, a life worth of suffering is a life still worth living, um, whereas there are people who say it's not, um, yeah, I, I agree, depending on where you stand, you should have the choice.

Rishad: To make either decision. Um, and U. S. Most definitely subsidizes innovation for the entire world. I don't think there's a good argument to be made against that. Um, I'd love to talk to you about health system design. I took a course 10 years ago about primary care [01:04:00] design. Um, it's one of these online courses from Hopkins.

Rishad: I believe that one was, um, and essentially the, the takeaway was people don't like traveling for healthcare. So instead of. building these behemoth centers of innovation, we should build a decentralized system, which brings patient care to the home. So I'm a big proponent of the hospital at home model. Um, you know, MassGen is doing this, Mayo has been doing this, Medically Home has been around for 20 years now, although they've recently taken off from a investor or valuation perspective.

Rishad: Um, I, I'd love your thoughts on healthcare system design. Do you agree with that? Do you agree that these, these, these massive centers, I like them, physicians love them because everyone's there, it feels nice, you know, kind of a nice environment to work in, all the specialists right there. Um, but I, I think it's hard to argue against patients, [01:05:00] you know, the traveling component.

Rishad: Now, if, if the decentralized system means that they don't have access to these subspecialists or they don't exist, then I think there's a good argument to be made against a decentralized system, but I'd love to see where you stand on healthcare system design. And, you know, if you were given a clean slate, say you you ended up in Mars, even though you don't want to be there, and you're designing the health system.

Rishad: How would you design it? How would you design in terms of primary tertiary care services offered? Um, and then also, let's talk about the model of payment. Would you design it in a pay writer model? Would you separate insurance from the delivery of care to an extent, at least in terms of ownership?

Akhilesh: Yeah, no, it's a it's a super interesting question.

Akhilesh: Um, yeah, I guess for me, there's a I'll give you sort of a couple of principles that I think are worth having in a, in a health system design and then what I think it would be nice to [01:06:00] translate that to. So, in terms of the principles, I think. Having broad access to care is important. Um, you know, I think everyone should have access to care.

Akhilesh: I do also think everyone should contribute to payment for care and I don't feel that should be. Employer. Sponsored. I think it's better if it's if it's done at the individual level.

Rishad: Can I pause you there? I'm going to forget this question. Why is it employer sponsored? Who came up with that? And, you know, to be blunt, who thought it was a good idea?

Akhilesh: I think the history of that is in the US, there were wage controls around World War Two. And so employers. Got around that by offering health insurance as a, as a way to essentially pay people more. Um, and then that model has just stuck around ever since. So it's just a historical quirk. Um, I think I, and I think a lot of people would [01:07:00] think if employers just paid people more and then individuals made, uh, made their health care decisions that would be a little bit cleaner than the whole employer driven model we have today.

Akhilesh: So anyways, that was one. And then the second thing is, I do think, as I alluded to earlier, that private, um, provision and coverage of care makes a lot of sense. I think you just get more sort of innovative, uh, and efficient thinking that way in terms of what I think it would be nice to translate those lessons to.

Akhilesh: Um, I do like the payvider model. I think that, you know, again, it breeds efficiency. And I think if you look at some of the most Naguchi Effective health systems. They do follow that model. I mean, Kaiser is is the sort of obvious example. Um, huge system keeps cost down. Very high performance on quality metrics.

Akhilesh: Um, the [01:08:00] challenge is that it's difficult to create that model and and, uh, the current environment and. You know, even they themselves have struggled to replicate the model and new geographies. Um, but if you were able to design something from scratch, I think if you could set up a system with multiple competing pay viters.

Akhilesh: Um, you would get that for me would be the optimal system in terms of the site of care. I do think that it should be more and more outside of the hospital. Um, I think decentralizing care, getting the people at home, or if not at home and some sort of more convenient and. Patient centered setting is, uh, ideal and that's playing out in our existing health care system in various ways.

Akhilesh: You know, [01:09:00] there are more at home models. There's a lot more direct primary care with sort of storefront based clinics. Um, you see a lot more retail clinics, things happening in pharmacies. You know, CVS obviously is making a A big push and that kind of model. Um, and I think it's good to see that continue.

Akhilesh: And I think part of what's exciting is seeing how technology is now enabling that through, you know, better patient monitoring, being able to keep track of vitals. Um, we have a we have a company that is in that space. And, um, you know, I think that will only that will only continue to, uh, to accelerate.

Rishad: Perfect. Yeah, I, I think I agree with all the points you made there. Um, the, I like the Swiss model where healthcare is [01:10:00] mandatory, uh, but it's subsidized if needed. Yeah, but it seems like the, the first step is to decouple healthcare from employers and it seems like it's just passing the buck, uh, and so to say, yeah, yeah.

Rishad: Well, this has been a lot of fun. Anything else you want to tell our listeners? Thank you.

Akhilesh: No, no, really appreciate you. Uh, you having me on and, uh, really enjoyed the discussion.

Zain is someone I have known and become friends with over the past year. I am a big fan of his progress so far and can't wait to continue following his journey.

It was a pleasure to have the opportunity to speak with him about his journey into healthcare startups.

We talk about:

• Humility

• Healthcare EMR's

• Clinician Entrepreneurship

• Clinical Trials in Oncology

• Will AI replace clinicians?

• The future of clinical notes

Transcript:

 Hey

Zane, I'm really excited for this. To start the podcast, I would like to start with talking about humility, and I'll ask a simple question that is more nuanced than it may sound. Why do you possess humility, Zane? Why are you humble? Uh, first of all, thanks for having me, Rishad. Um, yeah, no, that's a really big topic, and I think that we were kind of talking about it a little bit before we started.

I think the reason why I'm humble is because I think that, for me, it drives me forward. If I go to a point where I feel like I'm at the top of the world or I'm the smartest person in the room, then where else can I go, right? What else is... There's nothing else to do, right? So I don't ever want to feel that way.

And for me, I feel like I can learn from anything and everyone. Any situation can teach you something. So I approach every situation, every conversation in that manner. Whether, so, so in society now, I guess that's labeled as humble or humility. Like I don't go in thinking that I know everything or anything like that.

I am, it does lead to me sounding a little unsure of myself. Uh, which does hurt me, but I think that overall, for me, for me, it works out because it feeds into my curiosity. It allows me to learn at a much faster rate than I think others, just because I approach just life in a different way. And that might not sound as humble as it's supposed to.

Do you think that curiosity, which sounds like drives the humility is innate or is it learned through your experiences in life? For me personally, I've always been a curious person. I've always been that person, you know, everyone says, Oh, take that. They wanted to take things apart and learn. I mean, I wasn't to that extent, but like, I wanted to see, I love to create and build with my own hands.

Like I want to, for me, like, you know, if somebody can do it out there, then why can't I do it? Right. And I try to like, learn how to do it. So for me, it was, I think for me, it was innate, but I do think it can be taught. And the way I tell people is like, how do you, because people have asked me, like, how do you become more curious for me?

It's, you know, just pick a project, pick something that you want to do, right. That you've always wanted to do. We all have that in us, but over time through, as we get older and older, like life beats us, beats the creativity and the curiosity out of us. But just think about like what you wanted to do as a kid.

And just work towards that or like you see something cool and you don't have to be a master at something right and it's not about you're not learning to be a master you're just learning to just be happy. I think that's one thing that people like a lot of people just go into learning like oh I need to just getting from point A to point B.

Curiosity is about just starting at point A and you don't know where point B is. So just pick something that you thoroughly enjoy and then just dive deep into that one topic. Pick a project and work towards that project. And I think that that's how you can reinvigorate that curiosity. Because I think as kids, we were all curious, right?

No one, if you ever see a child interact with something that to us is really, you know, just a spoon, right? Just a spoon, like you put something in front of them. They don't know what a spoon is. They don't know how to use it. But they see all of us using it and they're trying to use it. And they'll use it in different ways because...

They're just curious. Maybe there's a different way of doing it or just, so I think it is innate in us, but it's just beat, beat out of us during our school life, during life, you know, every, everyone wants to, life makes us conform into one homologous thing when I don't think humans are meant to live that way.

That's well said. Seth Godin calls education compliance training. And I do agree with him to an extent for someone who possesses this drive for curiosity. One would not think pharmacy is the best vehicle to express it. Why did you go to pharmacy school? Why did you pick pharmacy? Yeah, no, that's a good question.

So, um, So my dad actually used to be a pharmacist back in the Middle East, but when we moved here, his degree didn't transfer over. Um, so he had to go back to pharmacy school, but at the time, you know, it was three of three, he had three kids and our grandparents, and they were, my, my grandfather was not, uh, he was, The reason why I moved to America was because of my grandfather.

He was ill. So my dad went into I. T. So I had like a little bit of pharmacy background with him. My cousin was a pharmacist. All I knew, funny enough, I didn't want to go into healthcare at all because of the Every time I walked into a hospital, it was to watch a loved one die, basically. So I didn't, I always associated healthcare with negativity, but as I got older, I saw the value that healthcare can bring, like, you know, we can really help and heal people.

And that, that's a little bit of a hero complex that I'm sure they. All of us in healthcare have, right? We think that we can solve problems, even the most impossible problems. So, so for me, and also growing up South Asian, you really have two options. You should go into healthcare or engineering. So, um, so yeah, I, when I was in school, I, I wasn't the best student in college.

I was just good enough to see the light hanging over me. I knew I wanted to go into medicine. I didn't really know what. And then during my junior year, somewhere between my sophomore and junior year, my dad sat me down and he's like, Like you need to figure out what you're doing. Like, what are you working towards?

Right. I used to joke with my, my friends that I'd say I'm like pre life. I don't really know what I'm doing, but we'll figure it out. So after talking to my dad, kind of figuring, so then pharmacy kind of, I picked pharmacy because I really liked physiology, pharmacopharmacology. I really love those subjects.

Again, going back to curate, like how things work, like how the body works, how medicines interact with things. Like it just. Clipped with me for some reason. So I was like, okay, pharmacy could be a good route. You know, it's a subject. I enjoy I'll go forward with it. So that's kind of why I picked pharmacy honestly, and then from there, you know They became a pharmacist.

But yeah to answer your question. That's why I became a pharmacist. It was kind of just picked During the summer, I wish I had a really like amazing reason why, but that's a great answer. I love the term pre life when people ask me now, what am I doing? I say, I'm not sure. And I don't want to be sure I'm picking projects.

I love picking projects. I enjoy some of these projects have timelines associated with them and I'm committed to them for that timeline, but I don't know what I'm doing after. And, uh, it's not something I'm interested in knowing because in my experience. Having certainty beyond a few years only brings anxiety until you achieve that goal, and shorter term goals are likely the better path to success.

I'm in a very privileged place to be able to say that, but that's kind of where I'm operating from. Yeah, no, um, goals are weird for me, kind of going back to the curiosity thing and it's, it might sound weird. I try not to have goals because I found that throughout my life, like if I set a goal and reach the goal, then I feel like I've accomplished something when in reality, I really haven't, um, at least in my eyes.

So like, I try not to have any goals, like not, not in the sense of like, you know, like I have like. I shouldn't say I don't have any goals. I have like things I'm reaching for, but there's always something beyond that. Like, I don't have like, okay, once I do this, everything is great. And there's also something to that where like, you know, will I ever be happy if I live that way?

I don't really know. Um, so far it's okay. But for me personally, I try not to have goals because I feel like goals limit me personally. And that's just my own, my own brain thinks that way. As someone who sits on the intersection of a nation. I'm curious to hear your thoughts on Chad GPT, generative AI, and specifically, will Chad GPT change healthcare?

And if so, in what manner? I think it's already changing healthcare. Um, I think that there's a big It's stressing out the system in general. I think it's stressing out society in general. And it's really pushing us to the limit of what is ethical. What is true? What is reality? Like all of it. It's all these questions are happening and it's, and in medicine is not out from it.

I personally love AI. I think AI has the ability. To change everything. I do think that the, and I'm not saying this like just to be verbose or, you know, but I do think that this AI revolution that's coming is going to be akin to the industrial revolution that we, you know, none of us lived through. But, you know, we've read about that just completely changed society as we, you know, we live completely different because of the industrial revolution.

I think that's what AI is going to end up doing. And for me, in terms of medicine. I think that it can help, but I'm, what I'm afraid of is it's going to be, it's going to start being used for things it's not ready for, right? Like, for example, like it's not going to, it's not going to replace us as clinicians.

It's not there yet. It just isn't. And whether whoever is telling you that they have no idea what, what AI is, or I've never used it. They're just kind of talking about science fiction. What it can do is those black and white things, right? Like, does this drug interact with this drug, you know, or it can give you some differential diagnoses based on lab work and.

History and things like that, like help us again. I like to say augment, not replace. It can augment us. And I think that's where AI. It would be amazing at, but to even get to that point, we have to answer the data question. Data is really hard in healthcare. It doesn't, it's not as free as let's say, you know, your search history or this and that, right?

Cause that's not our, our data is protected. Healthcare data is protected rightfully. So, uh, in some cases it's protected based on capitalistic intent, but that's a, that's a, that's another conversation, but. I think for AI to really be good, we need a lot of good data and we just don't have that good data yet either.

So we're still a little bit away from AI really taking over medicine, but I think that it has amazing potential. And what I'm afraid of is it's going to be used in a way it's not supposed to be used, or it's not ready to be used and it's going to cause more harm. And then we're going to lose trust in it, in the, in that specific system or that specific company.

And it's going to bring us back. And medicine will shut itself off from AI, anything, and that's what I'm afraid of. That's why I say, like, it's important for clinicians and anyone in healthcare to use things like chat GPT, understand what AI, you don't have to be an expert at it, but just understand what it is, what it's capable of, just play around with it.

So when you are confronted with it, if you're a decision maker, or if you're a clinician, you can approach it with a more measured approach rather than thinking it's going to solve all your problems, or it's going to just kill, you know, kill your old profession. When I think about data in healthcare. I think there is a very, very big sunken cost fallacy and, uh, harmful tailwind behind these big companies.

As a physician, I know there's good data in EMRs. There's a lot of repetitive data and there's a lot of inaccurate data. Talking specifically about physician notes with templates, um, there are, to be completely blunt, lies in the EMR, most physicians, and this is more because of the malpractice issue because of the payment systems based, you can put pe and a full physical exam is there, um, no one's doing a full physical exam, so based on that premise, should we build it?

An EMR system and I, I realized it has to exist in a different malpractice and a reimbursement environment that truly captures our decision making process, not what we wish our decision making process was. That truly captures an audiovisual NLP based system that does not require any charting because charting happens after we make the decision.

It doesn't happen during. It's not an active representation of how we make the decision. And the physical exam has been a smaller and smaller component of our decision making. But there is, for some reason, I feel, um, A lot of push and a lot of organizations behind protecting the importance of a physical exam is give me your frank thoughts on the EMR.

Should they be scrapped? Should we start from NLP and actually reflect how we make medical decisions instead of how we think we should make medical decisions based on the malpractice? And the reimbursement environment. And I, I realize this is a hypothetical question. It's not based in reality. No, I mean, it's, for me, it's based in reality because I'd love to scrap all EMRs and start from the ground up to answer your initial question.

Um, because of all the things you mentioned, they're not built for clinical workflows. They're built for billing. Um, I even talk about this where I would, in my utopic society, we would have Like a health stack where your EMR is your database, your backend database that just has, just holds the information and can build for you.

And then everything else can work through APIs and you can build a custom solution based on your workflow. Like the, the one I bring up a lot is. you know, a cardiologist and a cardiothoracic surgeon, though they're dealing with the heart, they have completely different patient populations and completely different workflows, but they're forced into the same system, same workflow, same everything.

Um, so that, yeah, so I think EMR should be completely scrapped and we need to restart from the ground up. Um, and I, and I, and you brought up NLP and I think that's how we can do it. And I think I'm more excited about NLP and OCR, um, than I am about like chat GPT right now, because, or like, you know, like generative AI, cause at least in healthcare, we.

I know P and OCR can help us get to the point where we can start implementing generative AI and like the chat TPTs and things like that. We're missing that middle step. And that's for me, like, so that for me is what's more most exciting in healthcare. Like you mentioned, you know, you can, I mean, there are companies doing this where it'll transcribe a full, it'll transcribe the whole conversation that you're having with the patient, you know, doctor and you, it'll create a note for you and you can kind of look at it and just make a couple of changes and boom, it's done.

Like you don't have to. I mean, what people don't realize is a lot of times the notes are done like hours later, hours later, right? And you don't remember sometimes what happened and patients are, and especially if you're in a specialized practice, patients start melding together. You do your best to separate it out.

I mean, when I was in practice, I tried to write my notes right away, but I'm a pharmacist, our notes were way less. The reason I laugh is sometimes discharge summaries are months. If not years later. Yeah. So I think that people don't realize all this stuff is happening. And like to your point, some of the stuff in the EMR is not the source of truth.

Like we don't really have the EMR supposed to be our source of truth, but it's a very flawed source of truth. I'll dig deeper here, Zane. I just want to say one thing. I think we would have a better reflection of how we practice medicine if we didn't have notes. What are your comments on that? So what do you mean by that?

So the encounter existed in a video, and the worry is so when I walk in and there's a, there's a child in the room, my initial instinct is sick, not sick. If not sick, come back in two days if you're not better. That is a whole encounter. And everything I do after that is just to please the parents. Yeah. Um, how would regulators and how would patients react if that was the encounter, and there's a, there's a black box there.

Like, why is sick? Why are you saying not sick? And oftentimes, I don't know, it's based on my intuition, based on seeing thousands of patients. Um, yeah. Yeah. I think that, I think if we got rid of the note, we would need something to replace some sort of document like we need documented somehow. It does, it doesn't have to be, it could be visual, it could be auditory, it could be physical written.

Um, and that's why I think like the NLP solution is really interesting because. You can just have your normal conversation, and in some cases you could record it if the patient is allowing it, um, and it will just summarize it for you and then you just move on. And even if, and then your source of truth is not necessarily the note, your source of truth is the conversation that went on, that actually happened, right?

Yeah. Versus right now, the source of truth is... Our brain, which is fallible, right? Um, there's times where I messed up on a note, um, and accidentally had to like redact something or rechange if I remembered or whatever. So I don't know if that really answers your question, but I do think the way we're doing it now is not.

a good way of doing it because all that's really doing is adding work and not really helping anyone in the really it's not really helping anyone it's not helping us it's not helping the patient it's not helping anyone because again it's just we don't have the right interoperability and it could be wrong it's just like it's just kind of a messed up system right now yeah i think um i'll just add one more thing so usually the way our notes are divided um it's called the SOAP format subjective objective assessment plan the subjective and uh objective I believe should not exist in text because it does not portray the whole picture and at times it portrays a different picture than what's happening.

So the subject and objective should exist in a video format. And for example, if a patient says, I'm having crushing chest pain, and they're saying it like that, you know, they're not having crushing chest pain. Or if a patient is like going like that and is in pain and saying, I'm not having chest pain.

There are visual and audio cues that we just cannot have in text. Um, so I think the EMRs of the future that have a embedded video for subjective audio or for subjective and objective and the assessment and plan can still be, um, uh, text if that's needed, but. As our algorithms improve, um, and we don't rely on text because, you know, text is an invention.

We made because we didn't have a better way of passing on knowledge. If our technology is secure enough. I don't necessarily see the need for text to exist. Yeah, no, I'd agree with you. And I think that, I mean, I would be okay with it. I would be okay with what you said. And I think that there is validity to that.

Um, and I don't think people realize. Like, I mean, what you said, I'm just like thinking about like some patients where they're like saying they're like in writhing pain and they're just like smiling at you. I mean, there's, I mean, you can't, you can't judge somebody just by the way sometimes people are good at hiding it.

But I think it would be a good tool to have. And that's one of the reasons why. I like telehealth, like a lot of people, how are you going to diagnose people via this, this, and this? I mean, you can tell a lot from somebody's body language and the way they're talking to you. And you can do a lot via video.

Um, so that's why I've always been a proponent of telehealth. Uh, for one, for access and B, it just allows both sides to kind of do it when they're, when it's happy for them. But I mean, it's an interesting thought. I've never honestly thought about it. I've always, I guess I've never thought that far outside the box.

I thought I thought outside the box, but that's even more further than me. But I like the idea though. Yeah, I just think it will be more of an objective representation of what actually happens in our actual decision making process, and I think it requires a move away from text based notes, text based charting, and it requires regulators, reimbursement, medical legal environment to support the move away, where if I am sued and I say, well, I don't have any notes, I just have videos, because that is how I make decisions, That should suffice.

Yeah, and then the video can, and videos in general give you much more information than like text would, right? Like things can, things get lost in quote unquote lost in translation. Um, and you know, if a patient is being aggressive, you don't have to like write patient is aggressive, you can just see it in the video, right?

You don't have to like prove to anyone like, you know, and if somebody's, you know, so it'll also, it would also help with like those kind of things. And also if like, like you mentioned, like. And then you can go back to it and see, like, did I miss something, right? Because our brains, you know, like, if we don't think about it, they can go back to it if something happened.

Like, oh, let me go back to that last visit. Or somebody else can go back to the last visit and see it. Like, hey, you know what? They were, this is looking weird. Did you check it? No. Then you can kind of call them up. So there's a lot of benefits to what you say. Yeah, this is, um, speaking as an anarchist and someone who hates charting, I love this solution.

I hate charting too, man. Oh my god, it was the worst. So Zane, we have a good idea and understanding of why you began your journey into pharmacy. Why did you leave pharmacy, Zane? Yeah, man. So, I was just tired of telling people no. I was tired of just dealing with the problems instead of fixing the problems.

Um, I couldn't see a path. to change from within the system. So I had to leave the system to hopefully change it from the outside. And that's just my own personal, um, things. And it, it could be my own shortcomings that I couldn't do it from within, but I just, for me personally, I couldn't see a path and my passion is technology and healthcare and, you know, Everything that's going on that was going on, I, you know, with my own personal, uh, endeavors prior to, um, me leaving, but I just feel like, and then also being able to help at scale.

And that to me is something that's, I don't want to say the word intoxicating because that's kind of, it's just something that I would love to do. I want to do something where I'm like, I helped millions, maybe billions of people. Rather than a couple hundred or a hundred thousand, like, you know, I think people don't realize is when you're in medicine or you're, you're, you're a slave to your schedule, right?

You can only see those people. And if there's an extra person that needs to be added on, then everyone is getting pushed down or up or this and that. It completely ruins everything. Then your home life balance, it's, it's all, it's all screwed, right? Um, and especially even in inpatient, right? Like you have to, I mean, think about this, like you have to make, you have to make a decision of whose life is more important.

Like people don't realize that like us as clinicians, even on the hospital side, we're like constantly triaging patients. And that to me was just not the way I wanted to live. Like for me, like everyone is important and I just wanted to help it scale. So that's kind of why I left. And also the other thing was I was sick and tired of solutions being stuffed down my throat that I knew wouldn't work.

And I knew that. If they just had a clinician in the team, it would have stopped it. Like stop that specific thing from happening. It could have built a better product. Right. And I was like, why can't that be me? Like, why can't I be that person that's guiding change? So that's what that's. And then that's what, that's what pushes me.

Right. Like I want to, I want to get to a point where I'm in a position of power. Not in, not because I want to be, I hate, I hate, I don't ever want to be that, but I want to just be in that position where I'm guiding healthcare rather than other people guiding it for us because I come with the empathy of being a clinician, I come with the empathy of having to sit there, stare at a patient and tell them, hey, your copay is 5, 000, you have cancer, and Uh, you know, like people, I think that people need to like sit down and tell bad news to people if they want to come to healthcare because you really need to empathize with what it is.

And that's kind of what I bring and I think we need more clinicians in tech because of that reason because tech is coming, AI is coming, all this stuff is coming, we can't stop it. But we can help guide it and we can help guide the way medicine is done too. So we can, so maybe I can create a, again, this is kind of the God, like the hero complex coming out.

Maybe, maybe I can create a environment for other clinicians to where they never have to think about. They're doing what they love and they're, you know, what they spent hundreds and thousands of dollars and years of their adult life working towards and they're exactly where they want to be and that's kind of why I did it.

I completely agree with that. The system as it exists now, the volumes of patients we're seeing is not sustainable. Most of us are leaving. I remember reading yesterday in the States, 240, 000 nurses graduate every year, 80, 000 of them leave within two years. I think anyone looking in that statistic can say this system is designed for burnout.

It's designed to overwork clinicians and it's not a sustainable system without just constantly increasing the inflow of workforce, which is where the focus is surprisingly enough. Yeah. And then the thing is like. I feel like the system also takes advantage of our personalities. Most people that go into medicine are very like, give, give, give, they don't really take much.

And for them, like what people don't understand about burnout, and maybe you can correct me. I mean, you may be yours, yours was different. It's not the work. We all knew going in, we weren't going to have the greatest. work life balance, there were going to be late nights, there were going to be early mornings, emergencies, all that stuff.

We all knew going in, things were going to happen. We were going to make hard decisions. We might not be able to, the things are going to affect us mentally. What we didn't see, we weren't taught this, told this, is all the other stuff that, you know, the insurance denials, like, like I can't tell you how many times standard of care was denied.

And that's just infuriating. So imagine you have cancer and, you know, we know that, hey, we can wait a week, but the patient doesn't know that I'm not going to sit there. Oh, you know what? It's okay. You can wait a week. You know, you have cancer. Like that's, that's not a conversation I've ever had and never will have.

And you know, they're, they're freaking out. You're freaking out. Like you don't want to bankrupt somebody. You're just trying to help them. And like, you're brought into this, this other world and the majority and the worst part of it is we live in that world more so than we live in the clinical world.

Which we spent our whole life learning about. And it's just like, that's what I think burnout is. It's not the work. It's not the amount of work it's, it's the type of work we're doing because we were ready, we were prepared for the amount of work we were prepared to for that stuff. We weren't prepared for the other stuff.

I completely agree. If my whole day was just seeing patients, I'm happy. That's what I want to do. I would have never left if that's all I was doing. If I was just doing that and things were working the way it should have been working and I was able to help people, I don't think I would ever. And like people, like people ask me, like, would I do it again?

Probably. Like it's maybe it's something weird. Like it's maybe like Stockholm syndrome or something.

I think I would. I think I got to where I got to because of what I did. So that's why I think I would, but Um, it's just an interesting thing. I think most of us would never, would have never left if it was exactly what we thought, not even exactly, but if it was close to what we thought it was going to be.

And the solution is simple. The clinician's job is to see patients. Period. Automate, outsource everything else. And there will be no shortage. People will stay in medicine. But, you know, for, for lots of reasons. And, you know, people might think we're being vague here, but I can be very specific about this.

Literally, if my day, and I'm happy to see 30, 40 patients in a day, if all I'm doing is talking to the patients, and then when I come out, I have a scribe that's assigned to me that does all the charting, if I get a call from public health to, you know, the patient you saw last week, They have been diagnosed with hepatitis.

Can you call their eight family members? Uh, and if that call, um, you know, why don't you call public health or are you asking me to call? So I, I think, uh, if we just saw patients, like, it's, it's, it's not that complicated. I think we overcomplicate in some ways. I agree. And that, I mean, maybe not the calling of the patients, but that's, I think, where AI is great for, you know, it's not, again, replacing us.

It's doing like the, it's doing the documentation, it's doing all that stuff, like NLP, like it's taking care of the stuff, the administrative tasks that no one wants to do, and it can just take care of it. You're not really paying the AI, I mean, you're paying for the use of it, but it's much cheaper. And I think that's, that's what excites me about AI is because I think that AI has the capacity to bring us, to bring clinical work back into the forefront of what we, what we do 90% of the day.

Yeah, I think, uh, I don't know. It'll be interesting, uh, going back to the video analogy. If you ask someone, would you know what goes on in a basketball game by looking at a text? What happened? Everyone would say no. Why do you think you would know what happens in a clinical encounter by just looking at the text of what happened?

Yeah, no, as somebody who has watched a lot of basketball on ESPN, on like their website, um, because I didn't have cable, you're absolutely right. I mean, you know, like the points, like who's winning, you know, who the foul is, but you don't know how hard the foul is, how impactful that shot was, you know, the emotions behind it, like all that can change a game, right?

Now imagine if you never saw a basketball game and all you knew was the text. How, how different is that from, yeah, that's, that's even worse. I mean, that's a great analogy, actually. Thank you. I think the, the, the next question I wanted to ask you is about cumulative health. How did you get into there and what was the outcome?

Yeah. So Cumulo Health, uh, was my startup. Uh, we never left the pre seed stage. Um, so the grand plan of everyone listening to this is going to think I'm crazy, but, uh, this was, I don't know, 2014, 2015 in that range, um, Epic only had, I think 12 to 13% market share. They weren't like as, I mean, now I think they're in the thirties, uh, like upper thirties now.

Um, So there, there wasn't a lot of comfort. I mean, there was competition, but it wasn't like as it is now. So I was sick and tired of faxes and this and that. Like for me, one big thing is I want patients to own their own health care data, because I think it's ridiculous that your health, the most precious thing to you, you have zero ownership over.

So I was trying to create, I was trying to create a cloud based EHR with telehealth, uh, that patients control their own healthcare data. And my target market was. The rural population, because I wanted to have increased access to healthcare. I wasn't going after, you know, the hospital that I worked at, the Mayo clinics and such.

Um, so that was the goal. Uh, we were, obviously that was the end goal. We were working towards it. Initially we were going to come from the pharmacy angle, like doing med recs and like, you know, labs and scans and things like that, and then kind of move our way up towards it. So, uh, we didn't make it. So this was like three years, three, almost four years of my life.

Uh, working and talking to people and iterating, uh, we were bootstrapped by ourselves, made every single mistake in the book. I didn't know what fundraising is. I had no idea what the hell I was doing. Probably still won't. I mean, there's a lot of mistakes I made that I just. And then when I look back at it, it's almost cringy to think about, but, uh, learned a lot for sure.

Um, and the reason why we didn't make it was not because the idea was bad or people didn't believe in us. We talked to a lot of people. They liked the idea. They thought of, even then they thought we were a little crazy, but they loved the vision of it. But what happened was we were, we had, we picked our developers.

We found the developers, the great developers. They, they were experienced in HL7. Um. Fire HL7 fire. And they had built a previous like rudimentary EHR for another like hospital system in, in Europe. So they showed it to us. It was great. And, uh, so we were kind of working towards that. We were about to get our MVP, like sign the dotted line MVP was going to come out maybe in the next couple of months.

And, um, my co founder just. You know, I don't want to go into his thing, but like something happened, everyone was healthy and okay, but something happened that stopped us. Uh, again, we were all self funded. We just. Cause we were the funding and, um, looking back at it, I wish I would, I had the money in the bank to pay the developers at the time.

I wish I would have just done it, but I was in a different place. Like I was staring at 200, 000 of debt. I was just recently married, not saying that my wife held me back. She would have 100% supported me, but I didn't think it was fair to her, um, at the time. And I just was scared. I mean, that's the easiest way to put it.

I was just scared of. Of just moving forward. Right. So that's kind of why it stopped. I've, I thought, and then like the next year I thought about bringing it back. It just never did. So that's kind of it. I wish there was more of an awesome story behind it, but I used to look at it as a failure. I really didn't talk about it too much, but for me now I look at it as kind of why.

And where I am, why I do what I do. Um, but yeah, at that time it was really gut wrenching to kind of like say no to it when we, when we emailed them saying, Hey, we'll come back to you. I knew after I sent that email that we weren't going to come back to them. But I just needed to like have that little bit of hope, uh, for myself to kind of like, maybe we will, but I knew we weren't, um, in the back of my mind.

So, but yeah, but it was, it was a interesting project. That's why I'm really like, so I was talking about, I wanted that I've been a proponent of telehealth for quite a while and patients owning their data. So like, if I can get to a point where. Patients own their own data, I can die a happy man. That's like my white whale if you want to talk, if you want to say.

Talking about patients owning their own data and making their own decisions to an extent, the, the medications that are over the counter and the medications that are prescribed seem somewhat arbitrary. And you can make a good argument that NSAIDs and for those listening, uh, those are non steroidal anti inflammatory drugs like ibuprofen and then some brand names Motrin, Advil are over the counter but a prescription like birth control or even some of the blood pressure medications like Ramipril are prescription.

I think you can make a fair argument NSAIDs are more dangerous. How is that decided? And why, why, why is that safe? Like, explain to me. Uh, no. I can't explain. I mean, honestly, like, even in pharmacy school, we were told that if NSAIDs came out right now, uh, they would probably be a prescription drug. Um, the fact that I think they came out when they did, I can't remember exactly, uh, what year aspirin was created, but it was a long time ago, and I think at the time it wasn't as stringent, like, you know, FDA and everything wasn't as stringent.

I mean, they really became stringent, uh, I forgot what the name of the drug was, um, but, um, after, after, you know, the BERT defects and that, that drug caused, they became, I can't think of the top of my head, Revlimid is the sister drug of it. Yes, the little man. Yes, that's what it was. Um, after that, they became a lot more stringent about things.

And like you said, there are drugs that I mean, like, there are drugs that, like H2 blockers and things like that, that were prescription for the longest time, right? That are, again, way more, way safer than NSAIDs. So, to answer your question, I think it was just a different time. It was just different regulations now where way, way, way, I mean, U.

S., the U. S. has the strictest, most, most strictest regulations. There are drugs that are in Europe for years before they're even, you know, working and have studies behind them before they even get approved here. Yeah, I'm looking at the list of drugs that were made over the counter from prescription, and it's literally one or two drugs a year.

Yeah, and I think that, I mean, I don't know, like, I think the way, I don't know how they, to be honest with you, I've always wondered how they decided. And I can't really tell you why, and I think maybe they can look at safety data and things like that. But I mean, technically speaking, like PPI's for proton pump inhibitors or for acid reflux for people that don't know, they're finding that they cause a lot of issues now too, right?

And like now they're over the counter. Like, it's just like, there's like, I don't know. I don't think there's ever going to be a perfect system. I just don't think you can, because I think over time you're going to find more and more things that come up. Good or bad, right or wrong. So, I think it's always going to be a system that's just going to be a flawed system and we're just going to have to live within it.

That's not probably the answer you were looking for, but I think that is the answer. No, that makes sense. I am excited about precision medicine epigenetics. And the future of disease treatment, including cancer and outside of cancer. What are you most excited about oncology? So, I love, um, I think it's amazing what's happening.

Like, in my practice, when I worked at the hospital, we were using genetic testing for, I think, like, close to six, like, for the last six, seven years. I don't know, maybe not that much, like, six years, six, five, or six years. Uh, we were seeing drugs that were being used for different disease states. Like, you know, for example, Herceptin, it's a drug that's, uh, used primarily in breast cancer for the HER2 positive.

If they're HER2 positive, they'll get that drug. But they were then like with genetic testing, they found that, Oh, some colon cancers are HER2 positive. Let's add Herceptin there. And, you know, Some lung cancers might be so you know, like it was just it was it was cool to see all these things and I think drug development can also like the newer so there's like the newer chemotherapies coming out are targeting specific genes and you're seeing a lot better um patient outcome like a lot less um Okay, they have much better side effect profiles, right?

Like, I know somebody who's been on, like, Nivolumab. I feel like that drug is going to be for everything. Eventually, it's going to get approved for the flu. But, uh, you know, those kind of drugs, like, patients are on it for years. And, you know, the worst they have is maybe feeling a little nauseous. Maybe their creatinine pops up a little bit for a little bit.

Just get some hydration and then move on with their way. So, for me, genetic testing and, like, the move to creating... Like these drugs based on your genetics or giving you drugs based on your genetics is amazing and I think it's, I think eventually what's going to happen, uh, specifically oncology and maybe also other drugs, other things is you're going to have a specific cocktail made specifically for your, your genes and you might, and you'll be specifically catered to you and to me that's exciting and that to me is going to be the future of medicine.

We're not, you're not going to be like, Oh, I'm getting X, Y, and Z drug. No, you're just getting, um, A cocktail of things that are for you, there is still a somewhat of a black box between genotype and phenotype and from genome to proteome and to pathophysiology, where do you think opportunity lies here for more research and potentially more investment?

I think that I think for me, like gene therapy, gene therapy, that's completely different thing. I think like going after the genetic. Is always going to, in my eyes, reap, reap the best rewards, because, um, I mean, I could be wrong, I mean, this has been a long time since I've taken genetics, but, you know, your genetics are what dictate your phenotype, right?

Like, they're what dictating everything about you. So if you're attacking specific genes, or you're basing treatment based on specific genes, you should be able to Get a decent outcome versus going. I mean, that's how we've been treating patients now, right? Like you're basing them on physical characteristics or things like that, right?

Or I mean It wasn't just until recently where they found that certain drugs don't work well for african americans, right? So that you could have you couldn't find out with gene therapy I mean not gene therapy like looking at people's genes, right? You don't need to know that they're african american or not But just their genes will let you know that hey this drug will work better than this drug Tell me about your time in clinical trials.

What did you do? during your time there and what did you learn? I learned that documentation, documenting, documentation. I spend most of my time documenting, um, and then getting yelled at for not documenting the right thing. No, but I think clinical trials, I got a, I had a much more, I think when you're reading papers about clinical trials, you, you like to poke a lot of holes in it.

Like, oh, why didn't they do this? Why didn't do that? Why didn't do this? But when you're part of a, when you're part of, I didn't run a clinical trial. I was part of the clinical team that was looking after the patient, making sure all the drugs were right, and you know, all that stuff. The pharmacy side of it, um, and also workflow from the pharmacy side of it.

I helped, I mean, I helped with it, but I was part of that. Um, you find out that running a clinical trial is really hard. And it's really, really difficult. And each hospital has its own challenges. So you can't just have a blanket statement for everyone and everything. And I can see why they cost so much money, right?

Because of just the, just the mag just how much you have to do and how many people are involved in just getting a drug to the patient. It's just so much involved. So I, I, I gained a really healthy appreciation for clinical trials while I worked there. But in terms of my actual job, I mean, I made sure that the drug was made properly, made sure the dosing was right based on whatever parameters that were, you know, do we need a new height, height and weight every time do we need, or was, you know, for cycle one, was it okay?

I mean, it's really boring. I can go into it, but it was kind of that kind of stuff, just, um, administrative things, mainly making sure that everything is. buttoned up, making sure the drugs are right and all that stuff. So, uh, that's kind of what I did for the most part when I was working in clinical trials.

Yeah. I'd love for you to get into it. Only. Yeah. So, so yeah. So when a clinical trial is, you know, when they, when they come to your site, they do like this huge audit about what your site is, what they can do, how you can do it. You know, they have multiple people involved. You usually have some sort of, um, you know, P.

I. Primary investigator, which usually is almost always is a physician. Um, that's pushing for this. So then pharmacy gets involved. The way pharmacy gets involved is, um, you know, the whole drug delivery part of it. How is it going to me? How is the drug going to be stored? Where is it going to be stored? Um, how who's who has access to that drug?

How is the drug going to get made? Uh, what kind of safety precautions do we need to make? Does it need to be in like a, you know, a completely negative pressure room? Can it be made in like a standard cabinet? Um, then, you know, then, then from there, we need to come up with the whole workflow because we don't, you know.

You have to like, okay, does it need to be diluted? How long does it need to be diluted for? Like, what are the diluents do we need? You know, what's the dose? How do we calculate the dose? You know, do we need a new weight every time? Do we need a new height every time? Like all that stuff goes in. And then, you know, uh, what are standard doses?

What is, do we need a cap on the dose? You know, all these things are. You know, what labs are necessary, what labs do we need, uh, what are, what are the, you know, what are the extremities of those labs when we should be worried, right, you know, if the ANC is below 0. 5, should we care, um, or should we not, right, depending on what the drug is.

So that's all kind of, I mean, the, the, the trial is kind of dictating us to do that, but we as pharmacy need to be cognizant of it and we have to make sure that that all of that is happening. Um, usually, uh, the doctor is involved, but they're involved in the sense of like, hey, they're trying to find the right patient in for the clinical trials.

That in itself is a hard job in itself. Like that requires a lot of, there's a lot of inclusion, exclusion criteria. But once they get past that, then the doctor is just monitoring labs and making sure everything is okay. Then it kind of falls on pharmacy to kind of take over the rest of it. And then, then the nursing staff has to stay up on labs and all that stuff.

So it's very involved. It's not like a standard. Treatment where you can just be like, okay, this person's getting pertuzumab. All right, cool. Just throw, you know, just dry it up, throw it in. Good to go. Like, you know, I remember when pertuzumab was being studied, it was way more complicated. We don't, we don't actually throw drugs.

Yeah, no, no, you know, we don't do that. Everything is safe. Um, but I remember when that drug was being, uh, being studied at our institution, it was, it took like three times as long to get it to the patient. Now it's just like, they come in pre filled vials. No, sorry, you have to dilute them, but you know, it takes like five minutes to make the drug now versus when it was being studied, it was like a whole huge thing to get it out there.

When people talk about decentralized clinical trials, there's a big movement towards it. It sounds to me this process would be difficult to decentralize. Yeah, and that's kind of I think what's stopping a lot of it is you, you, I think the lab work and all that stuff is relatively easy to do. Not, not relative.

I mean, it can be decentralized a little easier because we have RPM, we have like hospital at home and all that stuff coming up. But it's just like the drug delivery part of it is the most complicated things because there are some drugs that are only stable for X amount of hours or X amount of minutes in some cases.

Uh, so you need to get it to the patient right away. So outside of like having like a mobile lab or something, I mean, mobile, like cabinet where you can draw it up or drug companies have to do a better job of creating stability, because that's one thing that people don't realize is the stability of the drug during the study is a lot different than when the drug comes out to market because they're doing stability studies while they're doing it.

So, um, things can change, but while you, while they're there, it's like. I mean, they're going, they're trying to be as safe as possible and going with the worst case scenario, right? Okay, fine. Like, we know it might be able to go to three hours, but hey, let's just make it an hour cut off because they know they need to make sure that they're not wasting all this money.

So yeah, I think the drug delivery part is what holds it back, but I do think that uh, decentralized clinical trials need to happen for a couple of reasons because I think that it's really hard on the patients too because they there's a lot of

Um, and so that's one thing that people don't realize is when when they're picking patients for studies, they're picking patients that are able bodied, and they can make the appointments, so they're not always looking at the worst patients, right? But like, if we have decentralized clinical trials, we can maybe look at patients that really, really needed, right?

I mean, maybe drug companies might do not do that because it's going to skew their results a little bit. But, uh, those are things that I think a lot of people don't realize is, you know, we're picking people with a You know, uh, low ECOG scores. I mean, good ECOG scores and ECOG scores for those who don't know is, you know, just telling people how well they can do their activities of daily living, you know, can they walk and, you know, change and all that stuff.

So they're looking for people that are pretty mobile, that can make their appointments. Uh, every single time. So that kind of rules out a bunch of people that, you know, they might be homebound, that might have really metastatic disease and they can't, they can't, they're tired all the time, right? So, um, that's why I think, uh, and also the other thing is like just the distance, right?

A lot of these clinical trials are done at academic institutions. So we had, we had patients that were driving an hour and a half one way for these clinical trials. That's three hours of your day gone. You have cancer, you are really tired. And those appointments are not like 15 minute appointments. Right.

Those appointments when you're getting infused or they're hours long, like four or five hours long, right? Your drug might be infused really quickly, but they need labs. Prior to you getting the drug, they need labs. After you get the drug, they need to make, monitor your vital signs, your heart rate, all that stuff, blood pressure, everything.

So, it's like a huge process. So, I think if you had At least they could do that process at home, at the comfort of their home. What's the stability study? So stability study basically looks at, um, how stable the drug is. So in terms of like how quickly does it degrade over time, right. Um, does it have, does when.

When or if it develops particulates, right? So particulates are like little, we don't want those infusing in IT. So like things like that, you know, how long can it stay out in the sunlight? Does it need to be protected from light? Uh, can it be given with, what diluent can it be given with? Like sterile water, normal saline, D5W?

I mean, those things are done. The diluent part is usually and they'll protect from like done stuff is done much before we give it to the patient But like they're looking at that kind of stuff. So but then what happens is like during the study and stuff like they'll do like Almost like they'll like, how do I say this?

So they'll basically create the bag and they'll kind of leave it out in a very sterile environment and kind of check to see, okay, is it, you know, what's it, is it going, is it good? Is it developing particulates, things like that. So eventually like physically seeing it and running tests on it, then they can say like, okay, this drug is stable for six days or this drug is stable for four hours outside of the fridge.

You know, this drug is stable for eight hours, whatever it happens to be after it's been diluted.

Where do you think the biggest opportunity lies in clinical trials?

I think the biggest, I mean, I don't know if it's a money making opportunity. I think decentralized clinical trials are great, but there's a lot of companies doing it. And no one's really caught any footing. I mean, there's some great companies out there, but I think like if we can get to a point where we can

I think getting things to market quicker, I think that's, again, going back to AI, that's where I can help a lot with drug discovery. And so it's like, even before the clinical trial, I think like being able to create a drug much quicker and much. And faster and cheaper is where the money truly is. Because if you can get, it's kind of like, you know, creating a product, right?

The more swings you have at something, the faster you can do it, the better you're going to, the better you're going to do it. Right. And so if you, if it takes you like, I'm making this up, I don't really know, but if it takes like five years to come up with a novel drug. Structure. If AI can give you five in the span of a year, right, so you have five shots at it in a much smaller time, you know, and then you can kind of run your, your things.

And then it's, it's even getting to the point where AI can run, um, simulations for you to see, like, is it working? Is it working properly? How is it working? How is it not working? So I think that's where the, like the money, where like the next boom will come in, in terms of like the pharmaceutical industry and the clinical trial industry.

Is this that we can, we'll be able to have more and just move much quicker.

What is one, I'll stick with cancer research a bit more because I find it fascinating and have a lot to learn here. So, I'll ask you some selfish questions. Why do so many medications fail in the clinical trial phase? What are some things you've seen that get wrong or some assumptions they've made that don't, don't pan out?

I think a lot of them, I shouldn't say a lot of them fail, but I think they fail because of, um, safety profiles primarily like it's not it's just it's just causing too much. One thing about like you know cancer drugs is I mean technically we are putting poison inside of you and it causes issues so if you're not having like if it's causing the patient to like be neutropenic all the time or things like that that's one reason why some of them don't make it through.

Another reason is like It's just not statistically significant, um, and they might make it through the FDA, but they just won't get used, right? So we see quite a bit of that as well. But I think safety profile is one that stops a lot of them, um, because they don't want, it might not even make it to the patient because in like their animal studies or whatever, it just wasn't working out that well.

What is the end goal for you, Zain? I don't know. I don't know what my end goal is. Um, I guess it's kind of like I hope that I can leave this world as a net positive. I hope that I can help, um, like truly help, like at scale. That's that's what I hope I can do. If I ever get to that point, I don't know. But, um, I'll try and see what happens.

But I don't really have like a kind of going back to, I don't set really goals for myself. Like I don't have like, Oh, I want to be CEO of a fortune 500 company or anything like that. Like, I just want to just help people. And I just am still trying to figure out what my way of helping people is. And I think that's one thing that I realized when I leave clinic, when I left, it's, it's hurt a little bit when I left.

Cause I felt like I wasn't, I was leaving. That mission behind, but then I, it kind of, the thing that helped me was, you know, we all can help in our own different ways and my way was just not that at the time, um, maybe it will be one day, maybe I'll go back. I have no idea, but I just hope that I can just find a way to help people and just better people's lives.

That's really all that kind of drives me. I agree with that. A servant leadership model brings me more joy as well. I'll ask you a question. I had David Joe from On Deck on this podcast and he said everyone should have a selfless goal and everyone should have a selfish goal. What is your selfish goal, Zane?

My selfish goal is... Huh, that's a good question, man. Um, I've always wanted to have a car for every day of the week. Okay, interesting. What cars would they be? Um, all right. So, um, I've like a E39 M5 or E36, I can't remember it's, I always get the M3 and M5 mixed up. Which day is that? What? Which day is that for?

Is that for Monday? I don't know. It's, I don't know what that would be. I guess it would be like a weekday car. Uh, 911, Porsche 911 would be in there. And one of the, an A Porsche 911, maybe a 964, uh, their rally version. That would be pretty sweet. They're like millions of dollars. Um, I love Porsche. So Porsche Carrera GT.

Um, a Lamborghini would be in there somewhere. Uh, and then some like older cars, like, you know, a Volvo 240 station wagon, um, manual, that would be pretty awesome. I have a, I have a really long list. It'd be hard for me to kind of pare it down to seven, but, uh, probably an old school Toyota Land Cruiser, uh, from the early, 90s, early 2000s.

Um, I mean, I don't even know how many that is, but, uh, I can probably keep going. I like that. There's some good variety there. This has been a lot of fun, Zane. And I'd love to do this again sometime. Yeah, man, I'd love to come back on. Uh, this was, this was awesome.

From Teacher to Startup Operator to Venture Capitalist - Owen Willis (Opal Ventures)

I had an absolute blast speaking with Owen Willis of Opal Ventures. I am thankful that he chose to share his story, knowledge and experience with me.

We talk about:

🔵 Gender
🔵 His childhood
🔵 Solo vs team work
🔵 Profitability in healthcare
🔵 Future of training in healthcare
🔵 How to hire, onboard and scale a team
🔵 Success, failures and market tailwinds
🔵 Introspection, philosophy and reflection
🔵 Is early stage investing a game of picking or making winners?
🔵 And more!

Transcript

Owen: [00:00:00] Uh, I do something that I describe as kind of a deep dive interview. It's an hour and a half long, and I am going through line by line of their resume. Of like, what they did, who they worked with, what that experience was like, what went well, what failed, and what I find is that the best candidates, kind of the A level candidates, are not afraid to really dig in and talk about the things that went wrong.

Rishad: Thanks so much for joining me today, Owen. To get started, let's talk about your childhood. There are things we learn in our childhood that help us in life, and there are things we have to unlearn from our childhood to be successful. Talk to me about your childhood and talk to me through the lens of learning and unlearning behaviors, skills, knowledge, and talent.

Owen: Yeah, that's, uh, that's a really [00:01:00] great question. So, um, you know, I grew up, uh, I grew up in Chicago, suburb outside of Chicago called Evanston. Um, my dad was a grad student. Um, he, uh, would kind of go on to be an archaeologist. Um, my mom was, uh, she had actually stopped going to school, um, when she had me and my brother.

Owen: Um, but on the side, uh, was a folk singer. Um, so she, um, was very, very musically gifted. And, um, You know, I would say kind of up until the age of 10 or so, I had a fairly standard childhood. I mean, I think the, um, the thing that, uh, I think like so many, you know, kids in, in, in the suburbs growing up, going to public school, you know, you're always told you're exceptional, you're gifted.

Owen: Um, and, uh, you know, things just kind of come easy, right. [00:02:00] And I would say, uh, up until about sixth grade, like. You know, everything, everything came fairly easily to me. Um, and you know, that wasn't true for, for my brother. My brother, um, struggled a bit more in school and I would see him kind of struggle and kind of not understand why it was easy for me and hard for him.

Owen: Um, but you know, really kind of the pivotal moment in, in my childhood was my parents getting divorced and. Uh, both, you know, kind of them getting divorced and then actually my mom coming out of the closet. And, um, so this is, you know, in the 90s in Chicago, fairly liberal suburb. Um, and, you know, candidly, it was not okay, uh, for my mom to be gay.

Owen: Um, and I think the, uh, the thing that, that, that I learned was just about, you know, not taking things for granted. I think there's a lot of [00:03:00] learning and unlearning I did around, um, around friendships, right. You know, uh, friends whose parents, um, wouldn't let them play over at my house after, after my mom came out.

Owen: Um, I think there was a lot, uh, for me to kind of learn and unlearn about kind of stability, right? And kind of like, you know, your parents being kind of these, these perfect adults and then all of a sudden not being that, um, and so, I mean, I think, you know, candidly. I grew up pretty quickly after that I had to kind of become a little bit more of an adult after that and for me, like, education and learning was a way for me to kind of escape right and and kind of build my own thing and kind of have ownership over something.

Owen: And so, yeah, I mean, I think that was like a big pivotal part of my childhood. I was, you know, always interested in any kind of, uh, in history that that became a big obsession for me. Okay. [00:04:00] Um, I thought I was really interested in, uh, math and the sciences, uh, until I took chemistry and realized that I was never going to be a doctor.

Owen: Um, it just, like, didn't click in my brain the way, the way that so many other things did. Um, and... I think, I think more than anything else, um, it gave me a, a really strong sense of resiliency, right? Of, of, you know, kind of building and rebuilding, building my own communities, um, and, and understanding the value and importance of, of all of that.

Owen: And, and hopefully kind of think maybe developing a little bit of sense of humor, um, with that as well. Um, but yeah, I mean, I think as a kid, like. You know, every kid has their rebellions and kind of their, you know, their rebellious things like, um, you know, for me, my rebellion with kind of two hippie parents was.

Owen: You know, um, applying and going to college right away. Um, it was being a boy scout and, and eventually becoming an Eagle scout. [00:05:00] It was, um, you know, playing lacrosse, right. Things that like were a chance for me to kind of discover my own person. And I think that ended up being the resilience, the. Community building and understanding the value of those relationships and those bonds that you build, um, and that, uh, curiosity and self discovery, I think those were the big things I took out of my childhood.

Rishad: Thank you for sharing that. To set the record, I almost failed OrgoChem in undergrad and biology. And

Owen: I... I feel, I feel like those, those are, those are, they make them, like, just so much harder than they need to be. Um, One of the things, too, that, like, I did learn out of this was, um, you know, I, I, I think, you know, because my, my dad's from not, not from the us he, he's, he is from the uk, which is, you know, about as close to the US as you can get without being from the us.

Owen: Um, but you know, growing up in the Midwest, uh, you know, he definitely [00:06:00] felt like a little bit of an outsider. Um, having kinda my parent, my mom come out of the closet, like made me a little bit of, of an outsider. Um, and, and I, I think like being an outsider lets you be an observer. Right, in a way that I think, um, is really, really hard to do if you are just kind of fully ingrained and fully involved and everything going on around you, um, at the time, candidly, I hated it.

Owen: Right. It was super isolating and lonely. Um, but like, it's something that I am very, very grateful for. When I think about, like, my ability to spot opportunities and think about, kind of, how things work, I'm able to do it with more of an observer's lens than, um, I think a lot of people are, and that's something I think can be credited to, you know, my parents and a little bit of the way I grew up as well.

Owen: I recently

Rishad: posed a question on my LinkedIn, which I will ask you, [00:07:00] it's not a question we discussed before. The question I posed was, would a genderless, raceless society have more equality? The answers were very interesting, and most of the people said no, it would not have more equality. But the people who said it would, half of them were women.

Rishad: Mm hmm. And the people who said no, I wouldn't. Most of them were men. Yeah. I would just pose that question to you. Would a genderless and I won't say raceless. Let's just focus on gender for now. Would a gender society have more equality?

Owen: I mean, I think I would argue yes. Um, but like, there's a huge caveat.

Owen: Right. So I think that in terms of the way we think about, you know, structures and, uh, Uh, the way we think about equality today. I mean, I think, you know, if we, [00:08:00] I think it's pretty telling that the women that you've talked to and ask this question of would argue that there would be more quality, right? Um, there, there are many things about, uh, culture and society that, that are frankly stacked against women.

Owen: Um, there's a lot about our healthcare system that is, is, Uh, deeply unfair to women. Uh, this is something that I, I, I talk to folks about all the time in terms of thinking about opportunities and healthcare and health tech. Um, and, uh, but, you know, that being said, I think we would just find another way to, for, for there to be hierarchy.

Owen: Right. I think just kind of as, as a, uh, um, you know, you see this in, in kind of any group, right. That groups have all sorts of different ways of organizing themselves and creating hierarchy. Um, I think we just find another way to do it.

Rishad: That, that makes sense. I agree with that to an extent. [00:09:00] I also fall in the camp that we would have more equality, the fewer tribes and labels we have.

Rishad: A

Owen: hundred. Yeah. A hundred percent. I'd agree with that. I mean, to be fair though, like, you know, At a certain point, you know, maybe that hierarchy would be, would end up being people have facial hair versus those who don't. Right? And, and you, you would be up here and I would be down here. Um, because I, I can't grow a beard without looking like a creep.

Owen: So, um, yeah,

Rishad: yeah, exactly, I, I think there's like.

Owen: Humanity like has a strong, strong, it feels like kind of an innate desire to organize, right? You see this across every different type of group out there, you know, there, there are almost no groups that have absolutely no hierarchy or structure, it would just look different. Um, that being said, like, you know, if we're thinking about this as a everyone magically becomes genderless, um, [00:10:00] for the people who were maybe formerly women, things would be better, um, in terms of day to day quality of life and experiences.

Rishad: I would love to go deeper on this, but for the sake of time, let's, let's talk about other topics as well. Yeah, yeah. I'll just say one thing in vitro gestation. The concept of that is fascinating to me, and I think it is a must to move towards more equality. And I'll stop there. Why, why did you become a teacher, Owen?

Owen: Yeah. Um, so, uh, when I was in college, uh, well, when I was in high school, actually, uh, I did a program, um, where we worked with peer students, um, who had autism. And a big part of, uh, a big part of that work was using theater games and workshops to teach social skills. Right. And it was, it was kind of two part one, you know, running through scenarios and kind of helping people figure [00:11:00] out how to work through them and talk through them on the one hand, and then on the other hand, you are building these relationships with peers that you could say hi to in the hallway, right?

Owen: Or that, you know, you could kind of like pat on the back, back in class and, you know, check in and see how they're doing. Um, and that was super impactful for me. I think there's, um, You know, not everyone accesses society. The structure is what we've built to date equally, right? And not everyone can for a number of different reasons.

Owen: Um, and when I graduated from college, um, and I was thinking about what I wanted to do next, uh, You know, Teach for America became this really, really interesting option where, you know, I could go spend a couple years teaching, spending time with students, um, doing something altruistic, really giving back, um, and then from there, figure out what I wanted to do with my life, right?

Owen: I was, you [00:12:00] know, 21 years old. I was a finance major, right? I thought I was going to go into investment banking. Um, there weren't a ton of investment banking jobs in the year that I graduated. Um, and so my initial thought was like, okay, I can go do something really, really good and positive. And then kind of get on with my career.

Owen: So that was kind of my 21 year old brains, uh, thought process there. Um, when I, I started teaching, I was teaching in Washington, D. C. My first year I was teaching kindergarten special education. Um, I was going to school at night as I was teaching, so I was getting my master's degree in education. At night and teaching during the day.

Owen: Um, and, you know, one of the things that, you know, kind of stepping into that is you don't really have a ton of training, right? You get a month of training over the summer. They have this kind of like teacher America boot camp, but like, as a special ed teacher, I just like really had a hard time kind of like getting [00:13:00] up to speed and adjusting to the role.

Owen: And so what would end up happening is, you know, we'd be teaching during the day. And then at night we'd have these classes and we'd be like, okay, like here are the 50 questions we have, like, you know, like, how do we think about this? How do you address this? How do you approach this? And, um, it became just this incredibly strong community of, of, you know, educators and now, um, kind of many, many years on friends, people kind of all going through that same challenging, difficult experience together, um, and, uh, you know, getting through it as, as a group.

Owen: Um, you know, teaching is far and away the hardest thing I've ever done in my career. Um, it is the most difficult job that I have ever had, both on a micro kind of day to day sense and on a macro, like, you know, sustainability sense. Um, one thing I think people don't realize about teaching is that, uh, you know, only a small [00:14:00] percentage of your time, especially if you're teaching special ed, is spent on instruction.

Owen: Um, there's like so much you have to do around instruction before you're even able to kind of get in front of students and make it successful, right? You're creating the space within a classroom that's safe for students to learn. You want, you need to create a feeling of psychological and physical safety for them.

Owen: You need to set these boundaries for them that they are learning within. You need to make it them feel okay with failure and, um, you know, really focus on. Uh, this idea of productive struggle and and making making that productive struggle be something that's fun and encouraged and part of the learning experience.

Owen: Um, and, uh, you have to obviously plan the lessons as a special ed teacher. You also have to do all of this paperwork, right? Because what you are providing the child is legally mandated. Through an agreement between the [00:15:00] school, uh, the teacher, the student and the parent. Um, and so you have to spend a lot of time thinking about that.

Owen: And so what I found was, you know, the things that I was really good at were kind of creating those spaces that were safe for people, right? And building trust with my students and giving them kind of the encouragement to try new things and fail and grow. The thing that I really struggled with was the actual kind of like planning a lesson and like, um, you know, like making sure that it, it checked these four boxes and that sort of thing.

Owen: And so I think for me, like as I got to the end of my third year of teaching, I was thinking like, what are the things I really like about this? I really liked the coaching. I really liked You know, building trust with students and getting them to believe in themselves. I really liked, um, [00:16:00] being able to celebrate their wins and failures with them.

Owen: Um, and so, as I've thought about my career and as I've kind of grown in my career, that's a piece that I always want to keep as part of my job, whatever it is that I'm doing. It's something that I've brought to, you know, startup coaching and advising. It's something I've brought to managing teams. Um, and it's something that I've, I've, I've brought to the table as an investor in terms of building deep relationships with founders.

Owen: Let's

Rishad: talk about managing teams. Do you think humility can be taught or is it something we have to arrive on our own? I

Owen: think it'd be, I think it can be, I think humility can be taught. So, uh, I think a lot of humility though, um, comes from expanding your worldview. I think a lot. It's it's not something that [00:17:00] like I as a manager could necessarily teach somebody.

Owen: It's something that you learn through your experiences in the world. Um, I think there's and there's different types of humility, right? Um, I think if you're a founder of a company, um, you have to have a certain amount of hubris around like you being the person to solve a problem. Um, you also have to have a layer of humility.

Owen: Insofar as you should know and, and, and understand that you are not going to know everything about building a company, right? And that there are going to be people who can step in and do things better than you, if you're able to kind of give, give up the reins and do that at different points in the company building.

Owen: Um, I think, you know, fundamentally, like, a lot of my own personal [00:18:00] humility that I've developed in my career has come from rejection. Right? So, um, it is, it is both the, the chip on my shoulder that is, is my motivator. Um, it is also my understanding that I am not going to be perfect at everything. Uh, there are things that other people are going to know and do way better than me.

Owen: And the big one of the biggest strengths I can bring to the table is understanding what my limits are, where my knowledge ends and where I need to be asking for help and I think that, um, hopefully this is something that's kind of changing in culture and work culture, um, but this idea of kind of like knowing the extent of your knowledge and the need to ask for help, I hope is something that's becoming more prominent and prevalent.

Owen: I think previously it was seen as a sign of weakness. Um, but, [00:19:00] you know, at the end of the day, you are not, you are going to hit a wall if you are not able to ask for help. And that, that's, you know, that wall is going to look very different for different people of different skill sets and backgrounds and networks and things like that.

Owen: But if you don't know how to ask for help, um, there is a ceiling to how

Rishad: much you can achieve. I agree with that. Let's talk about hiring and let's talk about structure versus intuition when hiring. If we borrow Danny Kahneman's framework, hiring is a process which requires structure and you can apply intuition after a structured process.

Rishad: I'm growing my team right now and I am terrible at hiring. I want to rely on intuition. I want to give people lots of roles, give them big titles. And what happens is when they fail, it's very difficult to take away titles from people. [00:20:00] It's easier, um, to withhold titles initially, which is not inherently what I want to do.

Rishad: Talk to me about hiring process and give me advice on, on, on how to hire good people. And what are some questions I should ask? To evaluate specifically for, is this person committed to what I'm doing or not? Because I believe early on where I am in my health tech investors journey, commitment is what I need right now.

Rishad: I don't need rock stars. I don't need super quality candidates in terms of industry experts. I need people who are committed to the mission.

Owen: Yeah. So I think there are, um, a couple of things and what you're describing is, is both hiring and onboarding, right? So I'll stick first to kind of like the hiring side.

Owen: Um, I think, you know, the number, there are like two things that I've learned in hiring. So, uh, [00:21:00] and this is from my time at Osmosis, where we grew the team from, 20 to, um, just over 150 people when I left, um, in, in just a couple of years. And then, uh, when I was at On Deck, um, I think I was employee number 36, we grew to more than 300, um, while I was there.

Owen: And so I would say, you know, on the, on the hiring side of things, you know, first and foremost. A lot of the work happens even before the hiring starts around thinking about and scoping the roles, right? And, um, when I am designing and scoping a role, I'm very, very clear about what the role is and then what the role isn't.

Owen: I think, I think we, everyone spends their time on kind of just what the role is. But there are just, like, certain things that, like, somebody will not be doing in this role, um, or certain types of, of, of candidates or certain qualities that you just, like, don't want in this role. [00:22:00] And I think the more that you understand that, you are going to be able to do a better job of filtering for that early on, uh, as you're looking at candidates, but also, um, it really helps you with expectation setting.

Owen: For the people that you're wanting to bring on. Um, I think so much of why candidates fail early, um, you know, other than maybe the person being the wrong fit for the role is that there are misaligned expectations from the start about what the person is doing or should be doing or what the role can turn into.

Owen: A lot of that, you know, comes with things like title inflation, right? And this idea like, oh, I'm like, you know, VP of product. I'm going to be VP of product forever, whether we, or like, I am like in line to be chief product officer, even though we have a team of 10 right now. And we expect this to be a team of, you know, 200 or 300 in a couple of years.

Owen: Right. Things change, uh, you know, roles [00:23:00] change, um, people's ability to grow into those roles changes. And, um, I think you need to do, spend time setting that expectation really, really early on with, with folks who are joining. Um, and I think part of that is you, you can make it clear as well that like. You know, that includes your role, too, right?

Owen: Like, your role is going to evolve and change over time. You're going to bring in people to do certain parts of your role better than you ever can, um, and that's just, like, behavior that you have to model, um, for, for your employees. So, that's kind of the pre hiring. It's, it's, you know, making sure that you have a good understanding of what it is that you're bringing on, and then, like, what this role is not going to do.

Owen: Um, I think the, the second piece is around kind of the interviewing and kind of hiring process. Um, you obviously want to spend a lot of time on top of funnel, uh, the stronger, obviously it sounds so like [00:24:00] basic, but like the stronger you're at the top of funnel is the more likely you are to bring out a rock star.

Owen: Um, and so, you know, I spend a lot of time, you know, even when I was in very, very senior roles, very actively doing kind of proactive outreach for folks that I think could be a good fit. Um, you know, even so, even if I'm sending out, like, you know, 50 messages and two of them converted to interviews, those are two people that I've, like, gone out into the world and saw, oh, actually, this person seems pretty well aligned to what I'm wanting to do.

Owen: And it helps me just also get a better sense of like, who are the types of people that I wanna hire and how do I want to kind of benchmark this role? Um, and so I think that is, that is something that's, that's incredibly helpful. Um, on the actual interview process, uh, man, I, uh, I would say that like, I'm a pretty annoying [00:25:00] interviewer.

Owen: Um, I am, uh, really, really nitpicky on my interviews. Um, I, uh, with every candidate that I'm hiring for kind of a mid level role or higher, uh, I do something that I, I describe as kind of a deep dive interview. It's an hour and a half long, and I am going through line by line of their resume, of like what they did, who they worked with, what that experience was like, what went well, what failed, and what I find is that the best candidates, kind of the A level candidates, Are not afraid to really dig in and talk about the things that went wrong, um, right, and the learning opportunities and how they responded to feedback, how they responded to failure.

Owen: I think all of that stuff is really, really interesting, um, and I think the candidates that are a little bit more insecure. Um, we'll try to [00:26:00] either sugarcoat it or kind of brush some of those things off. And that for me is a pretty strong signal about resilience in, in, in kind of their, their ability to work.

Owen: Um, it also gives me my list of references. So, um, as I'm going through, I'm writing down names of people and like, out of, out of those conversations, I'll pick two or three people on that list and ask for them as references. Um, and I find that to be, uh, I think jarring, a little jarring for folks. But again, it gives me just a really good sense of kind of who these people are, um, and, uh, you know, their experience, their skill set, who likes working with them, who doesn't like working with them, um, and yeah, I mean, I think on the other side of things, you know, that asking for that level of openness requires candidness.

Owen: So, you know, on those calls with people, I am very open about my own career failures, right? And I, and I use. [00:27:00] My own career mistakes to model the behavior that I want to see from them on those calls. So, again, it's really, it becomes much more of a conversation. Uh, I'm sure it is a very stressful call to be on the receiving end of, but for me, it gives me a really good sense of kind of who this person is.

Owen: What makes them tick? What is their motivator? Um, and by the end of it, I, I know, like, I'm either really excited about this person or I'm not. And at the end of the day, when you're hiring, it has to be a hell yes or it's a no. And so that is my own way of kind of getting to that answer.

Rishad: This is very helpful.

Rishad: And I think a good frame for me to shift my mindset is treat my hires like I evaluate founders. I get very nutty to the founders and give details about their product. Yeah, I think the gold is in the details. It's getting nuanced, getting granular, getting complex.

Owen: And understanding motivation, [00:28:00] right? I think, I think that is a big part too, right?

Owen: Like understanding kind of what makes them tick, how they respond to feedback, how they respond under pressure. Like all those things are really, really important at an early stage company as you're scaling, whether it's a startup or. You know, a a a fund or a media company. Or any. Or anything. Right. Um, I would also add in, I mean, I think there's, uh, um, so the, the, the last thing I'll add in here is, is just kind of that reiteration around trusting your gut.

Owen: Um, I would say, uh, you know, of all I, you know, everyone makes bad hires, right? Um, of all the bad hires I've made, In my career, um, I've had a gut feeling that there's something off, right? And, you know, for whatever reason, um, almost, it's almost always credentials, uh, and credentialing. I, I, I've ignored it and I end up with a person who [00:29:00] might be great in another role.

Owen: But it's not right for this role, right? Either. And oftentimes it's, um, they either just like, don't have the right initiative and kind of self motivation and self drive. Um, or, uh, they can't ask for help, right? Those are kind of the 2 things that I always find, uh, as, as being kind of big issues. And a lot of that comes from the fact that, um, for most of my career.

Owen: Uh, as a consultant at Osmosis and on deck and now, um, with what I'm building, all of my work is remote, right? And so, you know, if I'm operating remotely, I need someone who has a ton of autonomy, uh, who can kind of operate with agency, but who also knows how to raise their hand and say, Hey, I fucked this up.

Owen: Um, or, oh, and you screwed something up, right? We need to kind of talk about it and work through it.

Rishad: That gives me a lot to think about and [00:30:00] gives me a lot of actionable advice. So thanks for that. Oh,

Owen: yeah, of course, of course.

Rishad: I was going to say, I am not a team player. I am a solo person. I like working by myself.

Rishad: I like working alone. I'm happy to work on projects with teams, but I don't like being paired with someone or working in teams in a day to day process. Is there a role for someone like me in any corporation? The moment I say I'm not a team player, people, they don't like hearing that. Yeah,

Owen: well, so in the last two organizations that I was, uh, was a part of, um, and, and, and also, um, just kind of in, in the advice that I give founders that are slightly later stage, um, you know, I think, I think what you would find is that in corporate America today, there is this hierarchy of.

Owen: You know, individual contributor and then kind of that individual contributor because they're [00:31:00] good at that individual job that they're doing, then becoming a manager, right? And the things that make somebody a good individual contributor, uh, don't necessarily make them a good manager and oftentimes actively make them a bad manager, right?

Owen: Um, and so, but like right now, the only way to kind of advance in, um, in roles, I think at a lot of companies is, By going from being, uh, an IC to a manager, to a director, VP, et cetera. Um, when I think about startups. You know, those early hires that you bring on, oftentimes that expectation is that you are going to start again as somebody just doing everything, and then you're going to manage a team, and then you're going to become a VP, and then you're kind of going to grow in a very similar way.

Owen: Um, but like, some of the best people at a startup are like, you know, your 10x engineer. Right? Um, and if you have like a, if you have a [00:32:00] 10 X engineer, do you want them managing a team? Uh, do they want to be managing a team or do they want to continue to bring a tremendous amount of value as C? Um, and I would argue, and I've seen this with a number of companies that you're able to create a structure internally where you are still able to advance in your career as an IC.

Owen: Right. You're expanding the scope of your responsibility. You're expanding the type of work that you do, but you're never directly managing individuals. Um, and that is a parallel path to becoming a manager. Um, now, if you think about it, uh, you know, a lot of the reason why people make that jump to becoming a manager is because it's a promotion, they get a pay raise, et cetera.

Owen: Um, some of the best companies I've seen actually give managers a pay decrease when they go from being an IC to a manager. Thank you. Right. So the ceiling to be a manager is much higher, right? You can make a [00:33:00] lot more money over 10 years in your career at those companies. But to make that commitment to being a manager, you have to take a little bit of a step down from a compensation perspective.

Owen: Um, and honestly, I think that is how most organizations function, right? Like they're going to be people that I hire today who, you know, probably aren't going to be very good managers. Um, but are hopefully going to be really, really good at bringing a ton of value to startups, right? Um, and candidly and selfishly, I want to keep them in those roles, and I want to find a way to compensate them in those roles.

Owen: And so I do think we're starting to see a little bit more of that shift of kind of these, like, super individual contributors. Um, I would also say that, uh, the kind of increase in proliferation around. Um, uh, you know, solo entrepreneuring is is another path for that as well, where you are able to work adjacent [00:34:00] to teams.

Owen: You're probably bringing value to some extent to larger organizations. Maybe you have a small team that is working for you, but it's another path in order to be able to spend the majority of your time focused on the things that you are best at, uh, and the things that bring you the most joy in your work.

Owen: I'm happy to

Rishad: hear my lack of desire for constant collaboration is not a bug and possibly a feature in my programming.

Owen: Yeah, no, I would I would 100% argue that and like, I again I think it I think it's there is this kind of weird. Societal expectation that like, because you are a strong individual contributor around something, because you are an expert around something, that that suddenly means you're good at managing a team.

Owen: Um, I think it honestly devalues what it means to be a manager, right? And what it means to be a good manager. And like, I know I, you know, probably everyone listening to this and I'm sure you have had [00:35:00] terrible, terrible, terrible managers. And I think a lot of it comes from the fact that like, these are people that were kind of shoved into this role.

Owen: There's not a, they don't get a ton of training around what it means to be a good manager. Um, and it's not something that necessarily aligns with their skill set. And so if we were able to kind of separate that out a little bit, I think, I think generally people will be happier, uh, both kind of employees that are reporting into managers, but also individuals who are looking to contribute and bring value, but just not in that way at a company.

Rishad: You know, I wonder if the reason and I'd like you to challenge this as well. I'm not a good manager. I feel and I would, I would separate managing from leadership is because of a very strong bias towards action and chaos. I am not a planner. I don't plan. So if you ask me what my one year plan is, My answer is I don't know, and I don't want to know.

Rishad: I [00:36:00] don't have a desire to make five, ten year plans. Now, if I take on a project that lasts five years, that's different. I'll commit to it. But inherently, I plan in months at the most, not beyond that. Is that something you resonate with? Or is that something, um, that you think is a deficiency?

Owen: So he asked me to challenge you. I'll challenge you a little bit on this. Um, I think that's a little bit of a cop out. Uh, so I think a part of being a manager is the first step of what you described, which is. There is this thing that you know is important in terms of working with and supporting teams, but you know, it's something that you're not necessarily.

Owen: It's not your strength, right? That's step one. Step two of that is, you know, if you are having to manage, right? If you're building a company is building a team [00:37:00] around you that makes up for that, right? Your strength is not planning, right? Um, or kind of that, that, that, you know, long term strategic planning, bring in somebody for whom that is a strength.

Owen: Right. Or like kind of day to day organization is a strength and have that person be kind of a part of that team and part of a part of the process. Right. You know, I, I think the, there are all things, there are things like nobody's a perfect manager. Nobody's a perfect leader. Nobody's a perfect individual contributor.

Owen: Um, the ones that are most successful are doing that first step that you're describing, which is identifying those deficiencies and. You know, to some extent working on them, but really making sure that they're surrounding themselves with people who are going to enable them to succeed and enable the team to succeed, despite that.

Owen: Um, and so that's what I would challenge you to do and challenge you to think about is like, you know, are there people that you can bring on that enable you to not have to worry [00:38:00] about that in the same way? And you can focus on on the things that that you do best. Um, One of the things that I think is, is, you know, really important is that there are, there are always things that we need to work on and improve, but like, at the end of the day.

Owen: You know you or me like, you know, we might not be the best at x y or z thing Um, you could hire to make up for that and you can double down on the things that you are absolutely the best at Um, and I think that's something that I see a lot of great leaders do um, and it takes a a lot of kind of personal honesty Around what your strengths and, and, and what your areas of, of, um, deficiency are.

Rishad: Let's talk about investing. Do you think early stage investing is a game of picking winners or making them?

Rishad: I think

Owen: you, that's a, that's a [00:39:00] great question. So early stage investing is a game of picking the founders who are most. Likely to be successful with the information that you have and then doing everything that you can to stack the deck in their face. Right? So, uh, you know, pre investment, it's obviously making sure that you are understanding the person you're understanding the motivation you're understanding.

Owen: Where they fit within the ecosystem and the problem that they're solving, um, you're making sure that they, uh, know the space better than you do, right? And they are surrounding themselves with the right people to build, right? And at that point, you're putting in, uh, you're putting in a check. Um, I think at the, like, at the earliest stages.

Owen: [00:40:00] You're not going to know everything, right? The, you know, the business model might still be in the process of being defined the exact go to market strategy might change the team composition is certainly going to change over time, but you are going in with confidence that there is a major problem to solve in that space.

Owen: And this person has a really, really good chance of solving it, um, given everything that you know, uh, post investment, um, it is your job to de risk that investment as much as possible, right? It's making sure that they're getting the introductions to the right people that are going to help unlock pieces of everything about health care, little pieces of knowledge around how decisions are made or how things are purchased.

Owen: Or introductions to the right person who is going to help them get that first contract or help them set up a clinic or kind of go through FDA approval, um, [00:41:00] without making a major mistake that's going to take the company, right? You're trying to get rid of as many of the obvious points of failure as possible early on.

Owen: Um, and then making sure that they're not doing anything. That is going to be catastrophic enough to sink the company in two or three years. Um, and I think really at an early stage investing that that's all you can do. Um, a big part of that, uh, and we're seeing this a lot now in, in kind of the healthcare health tech space is just helping them understand what's around the corner.

Owen: And what the expectations are down the road, right? So if you're raising, if you're a pre seed founder, what do you really need to have in place? What are the milestones that you're working towards in order to raise a seed round, right? Like being really, really clear about and helping them think through.

Owen: What are the things that made they need to be focusing on and building [00:42:00] in those early stages to be as capital efficient as possible when they're building on the other side of that coin? You also need to be, uh, doing everything you can to make sure that they are able to stay capitalized, right? As a precede investor, you're, you know, one of your biggest risks is that you are the last person to put a check in.

Owen: Um, and so it's a lot of it is about making sure that you have a network that you can kind of reach out to that is going to be able to be aligned with that founder, um, that is going to be potentially interested in investing and simultaneously, you need to make sure that that founder is actively building that network on their own as well.

Owen: And so, um, yeah, I mean, it's a lot of. Thank you. Information just dropped all at once there. But what I would say is kind of fundamentally it's, it's, [00:43:00] it's about making a really strong decision and who you think has the best chance of succeeding in a space that you know exists in an opportunity that you know exists.

Owen: And then on the other end, how do you do everything you can to make sure that they are successful after the investment?

Rishad: A problem I foresee in my investments is identifying the laggards or the companies that are not going anywhere. Are requiring more and more of my time. There's some things I should look for.

Rishad: Should I look for a exponential burn rate and a stagnant run rate? What are the things I should look for to identify those laggers beforehand? And if I identify them, should I continue my investment or should I look at the secondary market to exit in some capacity? Yeah,

Owen: I think, I think it's hard. [00:44:00] It depends on the stage that you're investing in.

Owen: I think sometimes it's fairly hard to to kind of sell off the secondaries, uh, sell off to the secondaries. Um, and especially in in the earlier stages. Um, and so, you know, I've seen some investors take the approach that, you know, until they hear otherwise, all their investments. You know, kind of go to zero, right?

Owen: And so at the very least, they're just being the most conservative that could be. And then if something kind of comes back, uh, then that's that's a minor miracle. And that makes their numbers look even better, right? It's all about kind of setting those expectations with the LPs, um, or your significant other who might be might be your LP.

Owen: Um, so, uh, there's kind of that side of it. I would say, you know, as you're talking to founders, It's really, I find the most interesting kind of nuggets and insights [00:45:00] in the investor updates. Um, and kind of reading through those and kind of like looking at what is the net change month over month, right? Um, are they kind of focusing on, um, kind of that continued slow kind of building of the business?

Owen: And if that's the case, it might just be that things are moving slowly, right? And obviously you want to check in. Um, Does do their kind of investor updates feel a little schizophrenic, right? Like, are there Are kind of are they kind of pursuing all of these different initiatives trying all of these different things?

Owen: um Kind of seemingly switching their strategy kind of monthly that for me is is much more of a red flag, right? And um, That's where I would want to actually spend some time sitting down with the founder And getting an understanding of where they are, what's working, what's not working, how are they thinking about focus, how are they thinking about burn, [00:46:00] um, and, you know, I think the thing with startups is, you know, there are two versions of what is happening at a startup.

Owen: There's the version that is being shared with investors, which is like this really romanticized version. Of what's happening and what's working and what's not working and and kind of how I'm building a company. Um, what's happening on the inside is almost always chaos. Right, it's all it's almost always like, we are trying everything that we can.

Owen: We are scraping. Everything that we can to get to this next stage of building and. I think sometimes we forget that, um, by being slightly removed from from those conversations. And I found that when I'm able to engage with founders at that level and roll up my sleeves a little bit, you can kind of see pretty quickly, Oh, you know, this is just good startup [00:47:00] chaos.

Owen: Versus this is bad startup chaos and I should be worried. I'll ask you two

Rishad: questions and you can answer either one or both of them. We tend to think of our successes as internal and our failures as external when it's usually the other way around and tailwinds Drive a considerable amount of success, especially in the startup ecosystem Build growth study, but why now or market timing being the biggest predictor of success What are some tailwinds you're banking on in healthcare or what is the biggest opportunity in healthcare right now?

Rishad: Yeah, I mean, I

Owen: would say, uh, there are two things that I'm really excited about in health care right now. So, uh, number one, I'm really interested in what I would describe as kind of health care for the 65%. Right. So, you know, and that's a that's a rough number. Right. But like. There's probably about 65% of Americans have what we would describe as, [00:48:00] uh, subpar access to health care.

Owen: Um, and it's, it's a huge part of the population. Um, these are people with willingness to pay, um, often, um, but are just unable to access health care for a number of reasons, whether it has to do with kind of financial instruments or insurance or geographic access, um, uh, or, or kind of technology limitations, right?

Owen: I'm really interested in companies that are increasing access to care to serve those populations. Um, a really good example, uh, that, that I, I keep coming back to is, uh, the company that, um, and the business that good Rx built, right? The entire good Rx business. Is built around a population of patients that were written off by the health care system, right?

Owen: These are patients who couldn't afford medication for a number of reasons. [00:49:00] And, you know, their doctors assumed that, uh, they were not taking their medication because they didn't care. Right? Um, and GoodRx was actually able to prove out, actually, no, it's a matter of cost. And then were able to turn doctors into the number one drivers of adoption for their business.

Owen: Um, that is a publicly traded company. Uh, they... And they built that business off of a gigantic patient population that people just assumed wasn't worth anything. Right. And so I think there are a lot of other opportunities like that out there in health care. It requires, I think, some unique insight and understanding into what makes those populations tick and why they are not able to access care.

Owen: Um, it takes some unique insight into how you can kind of turn that and align incentives of that into a business. Um, but I think the opportunity is there. 100%. Um, [00:50:00] simultaneously. I am really interested in, uh, what I described as kind of the nuts and bolts of health care. It's how do we actually make sure that there are, that health care businesses are able to run better?

Owen: Um, you know, there are all sorts of opportunities out there that in other industries are already taken care of by software, um, that just aren't in health care. And the thing that I think is kind of a little bit of a moat, um, for people looking to build in those spaces, Is that these topics are and kind of products are going to be really complex, right?

Owen: They involve a lot of understanding of, uh, policy and regulation. They understand they require a lot of understanding of kind of the internal workings of the health care system. Um, and because they're complex and they're kind of boring, uh, people tend to shy away from them. Um, and so I think a lot of, about this idea as, uh, boring as a moat in [00:51:00] healthcare, um, where if you are able to build something in a space that is deeply, deeply complex, you're not going to have a ton of competitors because, you know, most people are not going to be willing to spend the time to learn how to actually solve that problem.

Owen: Um, and so those are the things that I'm, I'm kind of most interested in today. Um, the third, there's a third bucket of stuff, and I think it kind of touches on the first two. The lives of doctors are pretty shitty right now. Um, I feel like I'm preaching to the choir a little bit here. Um, but, uh, you know, what are things that we can do to make the job of being a doctor actually more sustainable?

Owen: Um, based on kind of what we know about what causes burnout, um, and what a lot of what causes burnout is, uh, a feeling of lack of agency, um, and lack of autonomy, um, and for clinicians specifically. It's, uh, the feeling that they are not able to spend enough time with their [00:52:00] patients or that the things that they're doing are not actually helping the patients.

Owen: And so, you know, thinking through what are the opportunities there where we can make the lives of doctors better really address. I think the elephant in the room around potential clinician turnover, um, that's going to be coming down the pipeline in, in the next, you know, five, five or so years. Um, and ideally, you know, any company that I'm personally investing in is going to be touching on all three of these things.

Rishad: Yeah, do not get me started on physician. Um, I will say three things. I will say we cannot continue relying on people to train for 12 to 15 years to become a physician. The opportunity cost is too much. We are not burnt out because of a lack of mindfulness, because of a lack of resilience, because of a lack of wellness, because of a lack of yoga, [00:53:00] because of a lack of meditation.

Owen: You're you're saying you're saying that like perks for doctors are not the solution You don't need a ping pong. You don't need a ping pong table in your break room. No,

Rishad: no and no more pizza You know what would help for me personally? What would help most with burnout is a house cleaning service and a laundry service provided by my employer So

Owen: I think I think that that is a that is a call for a startup right there.

Owen: Um So,

Rishad: uh, physical service, uh, will be a much harder sell to me as an investor than a software service, which might not offer much value. And I will call it common headspace on this, but it's much cheaper and the profit margins are much better. Yeah.

Owen: I, I, to that, to that point, um, like one, one thing to add in here, I, um, the majority of businesses in healthcare are not venture scale, just like flat out.

Owen: And, and like, I, [00:54:00] I think the. You know, when you think about what is the purpose of venture dollars, right? Um, it, you know, I think a lot of kind of healthcare businesses are just not going to fit the mold for that. And I, and I think the thing that I really want to reiterate is that that's not a bad thing.

Owen: Uh, that doesn't mean that they are worse businesses. They are just a different type of business that requires a different kind of capital. Um, and those can still become gigantic successful businesses. Like raising venture dollars is not the mark of success. It is the starting point in a sprint, uh, that you are, you are agreeing to be a part of.

Owen: And so, um, You know, that that is something for folks who are kind of building companies right now. I'm telling you spent a lot of time with founders is, you know, whether or not something that is being built is actually going to be venture scale. If that makes sense from a venture return standpoint. And if it doesn't like helping folks figure out what are the better pathways for building [00:55:00] that are going to candidly make their lives less miserable, um, you know, as, as they're actually building this company.

Rishad: Let's talk about the venture model in healthcare. Do you think there's room for a longer time frame that you want model where funds are returned say over 20 years instead of 10? And what are your thoughts on profitability in healthcare? We are profit driven creatures. It is important to have profit motives to drive innovation, to drive the best of us, to work in healthcare.

Rishad: Where should profit be driven in healthcare you think? Do you think it should be? In care delivery or in pharma or biotech, do you think of it differently? I like the Swiss healthcare model quite a bit, especially from a pay wider insurance perspective where healthcare is mandated, but it is private and [00:56:00] private corporations can deliver it.

Rishad: There is a base level of healthcare that everyone has access to and the government subsidizes it. And then you can sell more tiers of health care for the bells and whistles. Um,

Owen: yeah, those are those are great questions. Um, I think there's room for that model of that kind of like longer time horizon. Uh, but like, that's something that, you know, an investor has to convince their LPs.

Owen: Right. Like that, that's kind of the, that's the trick there is, is, you know, is an LP going to be patient for 20 years, um, uh, as part of a fund. And, and, and honestly, with a lot of funds, you're able to, um, you know, based on kind of the fund structure and, and, and the LPA, like, You can add, you know, 234 years onto the end of the fund, right?

Owen: You just have to get LP approval to do that. Um, so I, I think, I think that model is, is a possibility. I would also say, though, that the, the exits in health care are a little bit different, [00:57:00] right? And the exit opportunities are different. I think you have. Um, a higher likelihood of, you know, things like private equity acquisitions or kind of being part of a roll up.

Owen: Uh, there are a lot of strategic requires and health care a lot, um, compared to other spaces and they're fairly active. Um, and so part of it also, I think, is thinking about, like, fund model and fund structure. You know, maybe you're not going to hit as many home runs in health care as you would. With a kind of, you know, kind of consumer generalist fund, but you're definitely going to hit more doubles and triples.

Owen: Right. And, you know, if that's the case, is your fund designed to maximize returns for LPs based on the realities of health care and the realities of building companies in health care? I think that's something that you should be thinking about and focused on as, you know, as you put together a fund. In terms of the actual kind of model of healthcare, uh, [00:58:00] it's really funny how many conversations I have with healthcare investors, you know, and these are kind of private equity people, you know, um, uh, venture funds and, um, You know, kind of very, very successful founders in healthcare were kind of like out of the corner of their mouths.

Owen: They're like, man, Bernie Sanders might be onto something around, you know, honestly, like the answer to solving healthcare is probably blowing it all up and kind of going with something that's more akin to a single payer. Um, but like,

Rishad: I will say, I'll be fairly quick to say no to that. Yeah, I will not bring the answers that I think it's a, it's a fallacy in comparison because Because we're so close, we compare ourselves to each other quite a bit in terms of Canada's health care system.

Rishad: Our system is as fragmented, if not more. And the lack of interoperability here is, I would argue, more than the states. And it's a single payer system. [00:59:00] The pain of the system is decoupled from the delivery. And a single delivered system would be different. And that could be an answer.

Owen: Totally. And what I would say is, like, I think you're, you're, you know, kind of the Swiss model.

Owen: I think the French, um, and the Dutch have similar models as well. Um, but this idea of, you know, healthcare being a right, um, as a starting point to the conversation, um, there being a, a kind of mandated baseline level of care, and then being able to kind of purchase additional care over the top of that, it makes a ton of sense, right?

Owen: Um, in the U. S., you know, there's a reason why people come to the U. S. from all over the world for healthcare. We have some of the best health care. We have the best health care in the world for those who can afford it and who have access to it. Um, we also have a huge percentage of the population who just cannot access health care or for whom accessing health care is.

Owen: Stressful because they have no idea how much it costs. And so what I would say is like, you know, uh, [01:00:00] those are, those are kind of the two things we need to be thinking about is how do we make sure that we keep having the best care possible? But how do we also make sure that, you know, the 65% of Americans or so who have.

Owen: More limited access to care, you know, aren't worried about bankruptcy because they broke their arm, right? And and I think there's a way to thread the needle there. Um, I think the the system that you described, uh, in in switzerland makes sense, um, But like at the end of the day, you know healthcare in the u.

Owen: s. Really only works for a small percentage of people um, there's some things that you can do to like increase access to care and like, you know when I You know, when I talk to folks about this and kind of that those marginal increases, they might not seem like a big deal to us. But if, if, you know, a startup is able to go out and help someone get access to an OBGYN, um, which is some services they maybe haven't received [01:01:00] in, in three to four years.

Owen: Right. That can be potentially life changing for somebody. Right. And like, I think, like, that's just something that we need to keep in mind is like, because there are all of these opportunities out there in healthcare for folks who, um, really just aren't receiving care right now, you know, it might not feel like a gigantic change day to day for you or I, with some of these companies that are getting up and running.

Owen: But it is going to have a meaningful impact on people's ability to access health care. And for those individuals, it will be life changing. And I think that's something just important for us to consider as we look at founders. Um, you know, and then in terms of like, uh, the actual kind of like, you know, making money in healthcare and kind of that broad question.

Owen: I mean, um, the thing that is most important to me is, uh, you know, I want to be finding companies where [01:02:00] Um, you know, by doing good in the world, they are then doing well financially, right? By increasing access to care, they are, and helping patients get access to care, they are then able to make a lot of money, right?

Owen: And, and I think that is, you know, as an investor, like, Important to be thinking about, you know, what are what is the impact of your investment? How is it impacting? Um, you know the people that are being served by it and you know, it is not a replacement uh for financial success Um, but if it is a driver of financial success, then you are investing in in the right spaces I wanted to

Rishad: ask you a question about our educational institutions as more curiosity.

Rishad: The value of them has decreased quite a bit in the software engineering space. Their value has held, if not increased to [01:03:00] an extent in the physician training space and in the legal space to an extent, although I'm obviously not an expert in that. What do you think is the future of training, do you think we will move towards the certification in health care, which will allow us to provide the same level of care physicians can, but not having to spend 400, 000 on getting an MD?

Owen: Man, that is, that is a good question. Um, I have a couple of thoughts here. So number one, uh, a lot of the people That I see on Twitter, especially talking about how, you know, the education system is broken, right? And it doesn't work and it's failed, uh, our graduates are some of the most prestigious universities in the country, right?

Owen: Um, they benefited from the education system. Like, there's no question. Um, you know, it might not be because of exactly what they learned at those [01:04:00] universities, but those universities. Gave them opportunities in their careers, open doors for them because of the credentialing associated with it. I think credentialing is always going to be a thing, right?

Owen: Um, you know, we need to, like, as an employer, you know, you need to have, like, certain things that you can check a box on to say, I actually feel pretty confident that this person knows enough to do this job. Um, and when we're thinking about healthcare, uh, and, and people's lives and risks of lawsuits and malpractice and things like that, I think it's gonna, I think it makes it really, really hard to move away from that quickly.

Owen: Um, so, I mean, I think we're already seeing it a little bit in terms of the increased roles that nurse practitioners and VAs are playing in the healthcare system around care and delivery. Um, I think we see a lot in startups around, um, building businesses that are being really deliberate about having people operate at the [01:05:00] top of their licenses to drive margin.

Owen: Um, but I don't think that that is necessarily going to replace the role of doctors. Um, similarly, I don't know necessarily if, if, if AI or things like that are going to replace the role of doctors. Um, You know, the, the thing that at least on paper, the value that doctors bring is the relationship that they built with the patients, right?

Owen: And I think more and more and more, the value of the doctor, it has to do is going to have to do more with kind of relationship building bedside manner, um, and, and kind of treatment. Versus diagnoses. I think, I think at the end of the day, like, AI is probably going to take over a ton of that. The, the diagnoses work.

Owen: I think the doctor's job is going to be much more about people, um, and, and relationships with patients, um, and, you know, I, my, my question is, and, and, and, um, this is, I think a [01:06:00] fairly controversial statement, you know, is the, the current training for clinicians, the current selection process for clinicians in the U.

Owen: S. Selecting for people who are going to be good in that role. Um, and my argument is probably not right. We're selecting people who are unbelievably smart, right on wildly, wildly smart, incredibly hardworking, you know, to to prerequisites. Um, but who's, you know, strength is, is taking tests, right? And an ability to kind of perform well on assessments.

Owen: Um, I don't know, necessarily as the role of doctors evolves, if that is going to be the number one thing that we need to look for. in identifying who is going to make a good clinician. I think

Rishad: a quote from Vinod Khosla is appropriate here where he says the future doctors will be actors or counselors.

Rishad: And I agree with that statement. Yeah.

Owen: I mean, I, I would [01:07:00] say, um, anyone who's in kind of a professional services role, you know, you're, everyone's playing a little bit of a part, right? It's, it's a, it's a version of yourself, but it's. Your job is, is to make someone feel safe and welcome and get them help that they need, right?

Owen: Whether or not they know they need it or whether or not they want to receive it. And so I think that is kind of how the role of a doctor is going to evolve and it's how it's going to be kind of complemented by technology. Um, you know, I, I, I think the, uh, like thinking broadly about educational institutions.

Owen: I, I think the, um, I, I'm a very, very fortunate recipient of a liberal arts education. Uh, it's something that I, I hope that my children are able to get as well. Um, it, I took a lot of classes that I think people would probably consider to be kind of [01:08:00] like, not important. Um, but the thing that it, it did was it taught me how to love learning.

Owen: It taught me how to learn and it taught me how to be curious. Um, and, uh, You know, that I think is one of the most important and valuable skill sets that you can have, um, stepping out into your career. Um, and so, you know, I, I, I have a sneaking suspicion that liberal arts education, in person education, education with a live teacher versus AI, um, I think all of that is, is going to eventually become a little bit of a luxury good.

Owen: Um, and, uh, you know, I, I think that's. not great for society. Candidly, I think there's a lot of value in it in person learning. But my sense is that, you know, kind of the people with the most are [01:09:00] always going to make sure that their kids are learning in person. With a real live teacher right in

Rishad: front of them.

Rishad: I think if there's some flexibility in the structure of the curriculum, if each undergrad isn't four years, cause that doesn't make any sense to me and each master is in two years there. Mm-hmm. , there's a lot of room there for different paths. Um, totally. For people just to follow their passions. One of my favorite classes I took in undergrad was cartography or the study of maps.

Rishad: Um, yeah. And which, you know, it's, it's not useful for me

Owen: in medicine. Are you, are you, are you saying you don't use that data? You're not orienteering in, in, uh, in medicine.

Rishad: I use that as much as I use organic chemistry. I'll say that.

Owen: Fair, fair. Yeah. And like, I think from my end, I, you know, the two, um, the two classes in, in college, uh, there, there are three classes that I took that I, that I think were like most valuable for me.

Owen: Um, two of them are ones that I think are, [01:10:00] uh, would would generally be kind of. Seen as kind of fluffy, right? Um, one was, uh, just the, the, the intro to philosophy class. Um, so kind of started down that track and I done a ton of work. Um, I spent a lot of time learning, like, focus on classics in, in, in, in, in college.

Owen: And this was kind of a compliment to that. But a lot of it was about thinking about how to think, right? Like, how to be kind of a really critical thinker. Um, the second one was a, a history course that I took on. Um, Islam, uh, the religion of Islam in Africa. Um, and it was, it was taught by a, uh, a professor, um, who kind of grew up, um, in, in that environment and was kind of sharing, like, his experience about kind of, uh, the religion and that space.

Owen: And it was, uh, you know, learning a ton about, about this, this religion through, um, Um, through history, essentially, [01:11:00] of the African continent. And then, um, those were kind of the two, you know, that would maybe be seen as more fluffy. And then, like, my senior seminar, uh, for, for Econ, um, was on negotiation. And, like, that is, like, maybe the best, you know, most practical class I have taken in all of my schooling.

Owen: I use it every single day. And, like, um, It's something that, like, I think everyone would benefit from, right? Just, like, learning how to, learning how to negotiate, learning how to kind of think about, um, you know, how different parties value different things, um, learning how to kind of build consensus. Um, and, uh, yeah, it was just kind of like a random seminar that we did.

Owen: Right. And so I think to your point, like, you know, one of the things I really liked about a liberal arts education was I could just kind of take all of this. I could just kind of do whatever I wanted. Right. And kind of take all of those things and like, [01:12:00] end up kind of somewhere with an econ degree. But like, um, it allowed me to be curious.

Owen: And it allowed me to kind of explore my curiosity. Um, and it allowed me to fail at a lot of different things, um, in terms of learning about things that I thought I was going to know a ton about, or thought I was going to be really good at. And as it turned out, uh, was, was pretty bad.

Rishad: How did you learn to recognize your biases?

Rishad: How did you learn how to think? What were some takeaways from that class? Yeah.

Owen: So I think a lot of it was, um,

Owen: so it was, it was two things, right? Like number one, it was. Making it very, very clear that, like, a big part of our biases is, are kind of, like, driven and reinforced by what we consume, right? The content we consume. And I think the, [01:13:00] um, you know, a big lesson for me in that was being really deliberate about consuming content that I objectively disagree with.

Owen: Um, right. And so, you know, I, I think about that, you know, I'm very grateful for that in terms of how I think about, like, what I read on a daily or weekly basis, right? Um, or what kind of podcast I listen to, or, um, what I, uh, what I see on, what I see on Twitter, right? Like, Twitter's really good at just showing you the things that you really like.

Owen: And you have to actually work pretty hard to find the things that that you disagree with. Um, and so that pursuit of disagreement, um, even kind of within kind of the things that I believe, I, I, I have found to be really, really valuable at enabling me to kind of challenge my own assumptions. And, and how I think about things, um, and, you [01:14:00] know, honestly, it leads me like reading things that really fucking piss me off, right?

Owen: And like being, and having to be okay with that, right? Um, I think the other piece of it that was really, really helpful was just this understanding that there's no absolute truth, right? Um, you know, I, I, I think there, you know, and, and, and that, you know, there are different, that is a, I'm separating truth from faith.

Owen: I, I think, you know, there, there's, you know. Um, it is a faith and then there's kind of ideas of truth on the truth side, you know, nothing is 100% 1000% true or false. There's always going to be some shade of gray around it. It might be more great. It might be less gray kind of on that spectrum of, like, theory to scientific facts, essentially.

Owen: Right. But, like, that understanding of, like, nothing that there is, there is great area to [01:15:00] explore in every topic. I think was really, really interesting for me in thinking about, like, the things that I assume about the world, the things that I quote, unquote, know to be true versus not, um, and, and, and that was really helpful.

Owen: So, like, I think it's fundamentally again, like, what do you consume? What is the content that you consume and making sure that you are. Being really deliberate about expanding it beyond what is comfortable for you. Um, and then I think on the, on the other end, it's about being able to acknowledge that, you know, there are shades of gray in even the things that we believe kind of wholeheartedly.

Owen: Right. And so I think that was really helpful. The last point I will kind of add in there is when I was a kid, um, I grew up in a Unitarian church. So the Unitarian church, Unitarian Universalist church, um, is, is really driven around this idea of, um, [01:16:00] uh, you know, there being multiple paths, um, to a higher power, right?

Owen: And, and just, and, and kind of understanding your path, um, as, as part of like a broader collection of paths, um, to God or Um, whatever the higher power might be. And, um, a big part of that was, uh, you know, once a month we would actually go to a different house of worship and see how they worshiped. And, um, you know, so we, we got to go to a synagogue, we got to go to a mosque, we went to Hindu temples, we went to a Baha'i temple, we were in Evanston, fortunately, we got to have a big Baha'i temple, um, we went to, uh, Catholic masses, and, um, I think that, for me, was a really, really powerful way to kind of see, like, what are, you know, what are all of the things that these religions have in common, what are kind of the nuances in terms of how they think about things, Um, and then kind of like, what, what are the end goals, right?

Owen: And [01:17:00] kind of what, what are they kind of working towards? What are they thinking about? And, you know, in a lot of ways there, you know, there's a lot of similarities, right? And like, I think that was a really interesting entry point for me in terms of thinking about, um, uh, thinking about kind of what are the different paths to truth and, you know, what are the things that are kind of within our comfort zone and our understanding and what are, what are the things outside of it?

Owen: And to be really, really deliberate about pursuing those. So, I feel very grateful that I got to do that as a kid.

Rishad: That is a beautiful answer, Owen. Recognizing the shades of grey in our truth is incredibly important. It's easy to question beliefs and ideas we hold that are not important to us. It's much harder to question our identity, our gender, our race, our religion.

Rishad: But that is equally important. Thanks so much for this conversation. This has been amazing. I've only asked about half the questions I wanted to ask. [01:18:00] So I think a part two is inevitable, if that is

Owen: okay with you. Of course, man, I really appreciate you having me on. I really enjoyed this conversation and I'm definitely on board for a part two.

A physician’s journey to reduce medical error: Steve Charlap - SOAP Health

It was a pleasure speaking with Steven Charlap, MD, MBA, he is on a mission to reduce diagnostic errors and SOAP Health provides an eloquent solution which addresses pain points for patients, clinicians and payors.

It’s incredibly rare to meet solution which cater to all three of the above. I’m grateful for the opportunity to learn from Steven Charlap, MD, MBA and be an investor in SOAP Health.

We talk about:

1. His childhood
2. Meaning in life
3. How to hire the best people
4. The future of AI in medicine
5. EMR design
6. And more!

Transcript

Thanks so much for being here today, Steve. I'm really looking forward to this conversation to get started. Our childhood shapes us in some capacity. There are things we learned from our childhood which contribute to our success, and there are things we have to unlearn from our childhood for us to succeed.

Talk to me about your childhood, and if you could frame it in the way of, what are some learnings which have helped you and what are some things you had to unlearn?

Yeah, that's a thorny question. I, I had a very interesting childhood because my mother was a Holocaust survivor and she inexplicably decided to share her horror stories with me, uh, which were quite haunting to a small child.

And I often got nightmares of, uh, Nazis chasing me. And I think one of the big takeaways from her Holocaust stories was The Will to Survive, which I think inspired the entrepreneurship in me. Because she was in Hungary and the marching orders from her father was wherever you were. Be clever in finding means to escape, and I think that cleverness and, and finding a solution to every problem to survive, uh, might very well be foundational for me.

And then the other big thing is my mother was very big into prevention. Uh, back in the 1960s, she used to take me to the library where she would read the latest edition of Prevention Magazine. While I would read Curious George and on the way home she would share, uh, everything she read. And then she would use me as her experiment of cod liver oil and back in the day chicken, liver and all kind of vitamins.

And she, in fact, she used to feed me a breakfast that most people wanna bf when they hear that was a combination of cottage cheese, orange juice, applesauce, and wheat drum. Uh, my wife likes to say, I have no taste Pal. I think it's clear. Why not? But I would say that, um, those were two of the valuable lessons.

A third valuable lesson actually came from my brothers. I had two older brothers and one brother said to me, with your attitude towards school, I don't see you getting higher than C and any cost that you take in college. And the other brother said, I want you to know that it's possible to get an A in every single class that you take in college.

And that became kind of a linchpin of, it was easy to fail, but it was possible to succeed. And I would say those three influences, uh, were very powerful. And then the last one, growing up, I would say poor, not poverty level poor, but poor enough that my father wouldn't ask the landlord to increase the heat because he thought he would increase the rent.

So I would have sore throats. Throughout every winter and my room would be absolutely freezing. So growing up poor, uh, definitely inspires you to, um, not be poor anymore. Thanks for sharing that.

I, I recently read Mansur for Meeting by Victor Franco. Have you read that book and what are your thoughts on it if you have?

I mean, I read it a long time ago. Look, there were many different perspectives that people walked away from that type of traumatic experience. Some found meaning, some just survived. Um, quite frankly, I don't know if my mother ever found meaning other than to survive. Uh, she raised a family with three boys.

Um, each of us successful in our own way. But, uh, yeah, I, I don't think I have a strong opinion. It's been too long since I read it. How has

money changed your happiness and your life? When I moved to Canada with my parents, the four of us lived on about $40,000 a year. Now I make well into six figures, but I am not sure if I'm any happier, especially when it comes to buying nicer things, spending more money.

Yeah. Look, I discovered a long time ago that, uh, money doesn't, money doesn't bring happiness. The lack of money can bring pain and dismay. If your refrigerator breaks and you can't afford to replace it, uh, that's a big deal. Uh, but when you get to a certain level of comfort, additional money doesn't add to your happiness.

I think happiness ultimately is an intrinsic point of view. I was accepted into the University of Pennsylvania applied positive Psychology program. Run by Martin Seligman, who's considered the father of positive psychology of the happiness movement. And, uh, I ended up not, uh, matriculating, but I read all the cost material.

So I have a very good sense of what happiness means from a clinical perspective. And he symbolizes it with an acronym called perma. P e r m a p stands for positive emotion. E is engagement r's relationships, M is meaning and a is accomplishment. And, and I think he's pretty spot on with that acronym, and I think about that all the time.

I also think about, uh, the, uh, serenity prayer. You know, Lord, give me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference. So coming back to your question about money. I think, again, at a certain level, additional money is not going to give you any satisfaction if you don't have meaningful relationships, if you don't have purpose, uh, if you don't have positive emotion in general.

So money is important to get to a certain level, but beyond that, uh, it's amorphous.

Let's talk about decision making. Let's talk about structure and intuition and decision making and the framework of when you are trying to pick who you want to work with in terms of a job you're applying or people you're hiring or bringing on.

Yeah. Something I struggle with is either giving people too much freedom and not enough structure, or being too controlling, so to say, a how do you. How do you decide who to hire, who to work with, and B, what is your management style in terms of after they've been brought on?

Yeah, so I would say it's a evolution of sorts from when I was a young man to today, but let me just go back for a second now in the concept of intuition.

I don't know if you read the book by Daniel Canman, thinking Fast and Slow, and the One by Tib, uh, fooled by Randomness. I think both of those books do a very good job of making you step back and say, intuition will only go so far. In fact, I recently saw a study about doctor's intuition about how well a surgery you would go, and it turns out the intuition wasn't particularly meaningful.

So I'm not a big believer in relying on intuition anymore. I think intuition can point you in a certain direction. But analysis ultimately helps you make the decision in terms of hiring people. People are very interesting. Uh, I remember one of the first people I hired for, as a controller with a guy with a Warton mba who was so upbeat in the interview, so, so incredibly upbeat.

And then when he started working, he was kind of a Marose fellow. And I went to him, I said, look, you, you really got me confused here. You were this really upbeat, upbeat guy during the interview, and now you're kind of, uh, depressed. And he said, well, Steve, of course, during the interview I had to put on my best face and I had to make the best impression.

Uh, but right now, you know, this is really me. So once I, one, I realized that the interview process is a process with an end in itself, and it doesn't necessarily reflect who you end up with. Another example was a guy who told me he was, he graduated number two in West Point. And was so positive in the way he spoke in terms of us and we even during his interview.

But then when he joined the company, one of the immediate giveaways were we were playing basketball outside and he got, uh, winded really quickly and I'm thinking, guy graduated number two in West Point. He's just shortly out of the military and he's already outta shape. Yeah, maybe he is a bigger talker than he is.

And the third example was a guy who told me he played division one basketball, joined our company, uh, and turned out to be a lousy basketball player and an even worse billing manager. So people can fool you and you should expect that they're trying to fool you. So I'd like to ask a couple of questions, two or three questions that kind of sets people apart.

One of the questions is, if you don't know where you're going, are you likely to go fast or slower or normal speed? And there's no right answer, but the thoughtfulness by which people answer that question gives me some insight into who they are as an individual. People like me, entrepreneurs tend to say we go fast.

Yeah. In other words, we're gonna rush. We're gonna, we're gonna pick up clues along the way, and we're going the wrong way. We wanna get to where we're going wrong as quickly as possible so we can turn around and go back the other way. Thoughtful, careful, detail-oriented. People tend to say, I slow down.

Yeah. The smartest people say, I stop and get directions, but I, I hardly ever hear that answer, but, but I love that answer. Another question I ask that's really quite telling is, tell me all the ways to get on the other side of a wall, because that's a question that requires not only creativity to. But logic, but also persistence and perseverance.

In other words, what I'm testing in that question is how long will someone try to be creative as long as I give them the opportunity. So one, you know, they'll give me standard answers. I'll go above the wall, go below the wall, go around the wall, but I'll keep pressing them and I'll see how they will good naturedly handle that pressure to come up with yet more answers.

And the ones that are good humored about it, at a minimum, I know that it's gonna be a pleasure to work with them. They may not be the smartest, they may not be the most competent, but they will be the the the easiest to work with. And when you are working on something intensely, working with people that are easy to work with, I think is incredibly important.

The third question I'd like to ask is a brain teaser. And again, You don't have to be a genius to figure out this brain teaser, particularly since I'm helping you, but your willingness to continue to struggle to solve the problem. Just like finding the other side of the wall tells me that you're not gonna be somebody easily dissuaded from achieving your goal.

And the final thing is I look for people who are curious, people who, at the end of that question say, are there any other ways to get around the wall that I may not have thought of? Okay. Uh, how would you have answered that question? I find that the most successful people in the world are the most curious.

When they're listening to somebody speak and they don't understand a word, they never hesitate to ask, what is that abbreviation? Or what did you mean by that? Or, I don't really understand what you're saying. Could you clarify for me? I do that all the time, and some people find it annoying that I pepper them with too many questions.

In fact, when I went to the Mayo Clinic, we were part of a program there, John Aloka stopped calling on me because I kept asking too many questions and he kept saying, Steve, I can't call on you anymore. I gotta call on other people because it's my nature to be curious and want to understand exactly what the opportunity all, all the information in front of me is.

Thanks for that answer, Steve. There, there are a lot of nuggets there and I would love if we have time for you to test me with these questions, cuz I, I think it would be a fun exercise for myself as well. Is it better to be a great visionary or a great operator? And are you someone who follows the philosophy, focuses on your strengths and quote unquote, ignore your weaknesses.

Or do you want to be a more balanced person in the sense, and I use the word balanced on purpose, that you should focus on your weaknesses, so you are more well-rounded. I think you should ignore your weaknesses and just go all in in your strengths. Sure.

So let me unpack that a little bit because there's a whole bunch of stuff there.

Let's talk about strength and weaknesses. I coached basketball teams that won championship, and what I realized was that everyone was not going to be great at everything, but everybody was part of a team and everybody had a role to play. And so I played to people's strengths and whatever they were great at, I tried to make them even better at.

So if you weren't a great shooter, but you were a great defender. I worked on your defensive skills. Yes. We've still worked on some offensive skills. But I just wanted you to be even better in what you were, cause what you're really good at, you're also very confident in that and you're able to execute in, in pressure situations.

And I can't tell you how many times a game was won by a guy who was sitting on the bench who hardly got to play. But I knew defensively would give a a plus effort and I would put him on, let's say the guy who was scoring at will on the other team. And that basically would shut down that guy because this guy knew his role was to ride that offensive player up and down the court.

So that's one thing. Let's talk about vision. Vision is a naturally very interesting word because vision actually means to see things that other people don't see. And I saw a study, uh, a couple of months ago that talked about that creative people. See things differently than other people. For example, when I am often asked a question, my answer might sound like it's nonresponsive to the question I'm being asked.

But what's going on in my brain is that I'm thinking about, not the question you asked me, but the questioning you should have asked me, or you probably wanted to ask me, but you didn't think of it. And so my brain is skipping steps. And so it sounds like my response is not secreted to the question, but in fact it's gone in another direction where, for example, somebody asking me, is the Santa's popular in Florida?

And to me, he's not really asking about the Santa's popularity. He's asking me, is the Santa's gonna be a difficult challenge for Donald Trump? That's what my mind hears. And so I start talking about how DeSantis are viewed and how Trump is viewed. And he is like the guy says to me, I just wanted to know is DeSantis popular in Florida?

And so I didn't answer his question. And in fact, this happens with me with venture capitalists. They ask a question and I'm answering something else because I'm thinking, you're not asking a relevant question. This is the question you should be asking. Therefore, that's the question I'm gonna be answering.

So that's the problem with vision, is taking something that's com almost outta worldly and something you see that they don't see and making it relevant to them. And in order to do that, that's the second part of your question. It's the detail and it's the communication and it's the demonstrate by leadership that gets people to go along Now, So health is actually conducting an incredible experiment.

We recruited all our senior executives by requirement, requiring a significant investment based on the principle that they would be vested and invested on day one. And it is a working process with the results to ultimately be determined. But I have never pulled rank, even though I'm the majority shareholder, I have never pulled rank, even though I'm the ceo.

And I like to joke that nobody reports to me in the company because everybody is an independent owner doing his and her own thing. And so we will see at the end of this grand experiment whether or not this is truly an effective way to build a successful team.

Talking about teams, why do teams fall apart?

Steve, in your experience, what are three things you would say?

Uh, or, that's a great question because it once happened to me in a basketball tournament. I was coaching girls varsity and we, I lost a team because I made a snide comment about one of the players for a player next to me on the bench. And that was a friend of hers and she repeated it and this girl on the court suddenly did not care what I had to say.

And the rest of the team kind of picked up on that vibe. And we lost a couple of critical games in the tournament instead of winning the tournament. Cause we were the best team. Uh, we came like in third in the tournament. And so losing a team is a lot easier than gaining a team because in one moment, one.

Inappropriate comment, one, inappropriate action could have somebody losing respect for you. And that loss of respect can basically turn into a, a, uh, what's the word? Like a snowball rolling down a hill. So losing teams is not being ethical, not being honest, uh, not respecting other people's perspective, uh, not considering other viewpoints, et cetera.

That said, it's often, as I said, I don't pull rank in soap, but if I feel strongly about something, I may talk your ear off about it. And that can get annoying sometimes. But I definitely wanna make sure that, that my perspective is fully heard and understood, even if not agreed upon.

That's a good way to look at this.

I think a lot of people act out or pull away when they don't feel heard and, and making sure everyone has a voice on the table is important. That being said, oftentimes the best ideas are not the most popular ones. And idea meritocracy is not an idea. Democracy. Tell me your thoughts on that. And would a weighted decision making process, say on a board or, or in an election even where people with more knowledge, more experience get more votes and people with less knowledge, less experience get, get fewer votes?

The fact that someone who's a criminal, who's immoral, unethical, gets one vote and someone who is the most moral person and devotes their life, society gets one vote to me, seems like. Stupid process to elect our leaders. Tell, tell me your thoughts about how to build an idea meritocracy where it may not be, you're not falling.

A purely democratic process of decision making and as more of a weighted decision making process based on experience and knowledge.

Yeah. It kind of reminds me of the concept of Marshall Law where the government has to take control because leadership, exertional leadership is required. It's an unfortunate state of event, but it is sometimes required from a, from a health perspective.

Public health initiatives have been known to have the single greatest impact on health issues, uh, whether it's agreed upon things like fluoridation, vaccination, banning of smoking in public areas, et cetera. Those have had huge impacts on. Cancer rates, uh, et cetera. Beyond that, I've had two situations where I didn't want to exert authority, but I needed to.

One, it is, I founded a magazine at Harvard Business School called the Business Ethics Forum, and the principal behind the magazine was that students should be driving Ed ethical dialogue within business. And it turned out that that year at Harvard Business School, the former head of the, uh, stock exchange named uh, shagged had donated 30 million to Harvard Business School for ethics curriculum.

So the school was very reluctant to have a student basically drive something in ethics before the school had a chance to develop something on its own. So I got a lot of pushback from the administration and in fact, they discouraged any professor from working with me and you needed a faculty advisor. I ended up getting a faculty advisor who had been denied tenure, which still made an eligible and they wouldn't allow me to form my own organization on campus.

So I joined a different organization and worked under their auspices, and I finally put together a student board and we had our first meeting and there was so much debating about what the magazine was going to be. I said, if we continue to debate this, the magazine will never get published. So by Pushed comes to shove, we actually got it published and I got the dean to write the prologue to the magazine.

I got a couple professors to write articles. I got the head of Johnson Johnson to write an article about the Tylenol. Scandal and so on and so forth. But it was by basically exerting authority over everybody else saying, okay, listen, we've talked enough, we gotta stop talking, we gotta start doing that. We got the magazine published and I ended up getting an award from the dean in graduation for that effort.

So that was one situation. Another situation of my first company, we used to charge for dental exams to patients because Medicaid didn't pay for dental exams and people hated getting out of

Steve. Can you also tell me about the Tylenol scandal? Cause I don't know about that. The Tylenol scandal

was somebody, uh, opened up Tylenol bottles and put poison in it and there was a big to do whether or not Tylenol should recall all, whether Johnson Johnson should recall all Tylenol on the market.

And James Burke, who was the c e o at the time, made the decision. They, and they've studied this leadership move for years after to pull all Tylenol product off the market, even at great financial loss because he felt that it was the right thing to do cause they weren't sure which bottles had been corrupted.

And then Tylenol came back with a tamper-proof bottle after that. So that was the, uh, Tylenol scandal. Um, coming back to the example, so we used to charge for this dental exam, $25, and people were upset because these were Medicaid patients, but without that $25, we would've ceased to exist as a mobile dental provider to nursing homes.

And because cost kept increasing, I had to make the unpopular decision to increase it to 35. And virtually every single person in the company said, don't do it, because they knew there was already to. Biggest thorn of contention from customers, but I knew that if we didn't increase to 35, we would not be able to keep the lights on.

And so singularly, and with the old adage from Shakespeare Heavy as the head that wears the crown, I made the independent decision that we had to increase it, and it turned out okay. But there was a couple of times where you just had to basically do what you knew you had to do, even if nobody else agreed with you.

And in fact, as a child, I very much remember the famous short Story Enemy of the People by Henrik Gibson. Are you familiar with that story? No. It's about a doctor in a, I think in a Finland town that is the town's doctor, and the town has these sofa baths that everybody comes from all over to bathe in them because they're supposed to be very healthy.

And the doctor discovers. Not only are they not healthy, but in fact they're unhealthy and he starts telling the leaders of the town. We have to tell everybody and the leaders of the town say, if you do that, you'll put us out of business. Nobody will come here. And he becomes an enemy of the people or the movie 12 angry Men, where one juror believes the person is innocent and everybody else wants to convict, and eventually he convinces them.

So leadership really is sometimes the head, the wears, the heavy crown, and sometimes you have to make very tough decisions. And so sometimes you have to be in the position to be allowed to make those tough decisions.

The doctors of the future will be actors. You studied speech, drama, and film in undergrad. Tell me about that time. Tell me if you agree with that statement and what did you learn from your undergraduate studies that are useful as a, as an entrepreneur, as a c, and as a physician? Yeah, so

I've heard Vino KO speak and I've met with him personally a couple of times.

I also read his 20%, uh, solution paper first before it was edited and and copyrighted. And then afterwards what he said was that 80% of what doctors do can be done by ai and the 20%, which is the empathy and handholding could be done by actors and actresses. Do I believe that to be true? Yes. Because I've gone to many a doctor who has not been particularly empathetic, and I do believe that AI will eventually get to the point where like in chess, it will succumb human capability.

What I've learned from speech and drama, and in fact, I get to use it all the time because I mentor up to nine students every year from Stanford Business School in public speaking. And the main thing that I teach in public speaking, which I took away from my speech and drama training, is passion. Ask yourself, what kind of speaker do you wanna listen to?

Someone mundane, someone monotonous, or someone who is passionate. And, and by passionate I don't mean screaming because anybody can scream. Passionate means excited. Thinking carefully about what you're saying, not running on your sentences, making sure that you are connecting with your audience, making sure that your audience is following, holding onto your audience's attention.

So I do that literally every year. For the last five, six years I've been doing that mentoring. I've mentored now at least, uh, 30, 40 students on improved public speaking, and I try to give them little nuggets and gems. I also tell them when publicly speaking, if you can use a prop because a prop is worth a thousand words, use a prop if you can, to make sure the audience can fully relate to what it is that you're trying to convey.

Those are.

Let's go back to the chess analogy. A AI has beaten almost every, it has been every human in chess, but people don't watch AI playing chess. People watch Magnus, Carl Carlson playing chess. People watch a car, they, they still like watching people playing chess. So bring that analogy to medicine.

Say AI is better than the best doctor. Will people actually use AI or will they still want a human involved for whatever reason? And if so, why would they want the human involved?

Yeah. So I've been giving a lecture that I've given twice, and I'm gonna give it to some Harvard MBAs in a few weeks. It's titled The Rise Four of American Medicine.

What comes Next? And at the beginning of the lecture, I asked the audience a very simple question. If you had the choice between an AI doctor that was always accessible, infinitely patient, sometimes funny, inexpensive. And clinically validated, or a human doctor who you have to schedule at his or her convenience, considerably more expensive and prone to human error, which one would you choose?

And the audience inevitably chooses the human doctor by the time I finish my lecture and I describe the woes that are afflicting doctors today, such as 63% report, symptoms of burnout, 53% report burnout, 27% report depression, one outta 10, report suicidal ideation, nine outta 10. Report being verbally or physically abused by patients in the last year adjusted for inflation.

They are paid less money than they were paid in the 1970s. According to a landmark study by the afternoon, they suffer from decision fatigue all day. They suffer from cognitive bias. So by the end of my lecture, when I ask that question, the overwhelming majority of people say the AI doctor. And in fact, I make a joke that's really not so funny and, and at the expense of doctors, I say, the next time you go to your doctor, put your arm around your doctor and say, don't worry, it'll be okay.

And if you're feeling depressed, say to your doctor, by the way, what's been working for you? So these are meant to be humorous, but they're really not funny because medicine is in a very sad shape of affairs. I know a lot of physicians. This burnout thing is very real. It's taken hold. It's driving them crazy.

I heard one of my closest friends on the phone with his answering service who called them accidentally on vacation, and I've never heard him lose it to this answering service, which to me tells me he really needed a vacation. And so any interruption on that vacation was dealt with very harshly. So it's a, uh, the answer to your question is I believe the future of medicine and the future of every medical encounter is going to begin with interface with ai, and that's why Soap Health built and patented the use of a digital human as an interviewer.

Because if you watch sciences fiction, Unlike previous science fiction like 2001, a Space Odyssey, back to the future Star Trek. When they spoke to a computer, they spoke to the ear. In more recent science fiction, when they speak to a computer, they always speak to an embodiment of the computer. Whether it's a hologram, whether it's a physical robot, whether it's a face on the screen, it's always an embodiment because people relate better to an anthropomorphic computer representation than to a non anthropomorphic.

And just to give you a quick example on, on the most basic level, there was a study done at Stanford where they had a automated garbage collector go around to different tables, and when it got to your table, it would open up and people intuitively understood, throw your garbage in. Then they reran the experiment.

With when you put your garbage in, it beat to acknowledge that you put your garbage in. And people were asked in both cases how they felt about the interaction and they felt much better when there was some form of acknowledgement from the robot. And I think that's also true with ai. We want the AI to recognize our pain.

We want the AI to understand and acknowledge what we're saying. Is one of the reasons why soap health reflects answers back to users to say, I was listening. Did I get it right? And if I didn't get it right, please correct it. Now, how often does your doctor say to you, did I get this right? Or, please correct me if I'm wrong.

Not very often. It's a scary

thought to think. It's more likely than not that your doctor is burnt out. It's more likely than not that they're stressed and it's more, much more likely than not that they have been abused in some capacity in the past year. On your LinkedIn, Steve, you say, while at nyu, I studied medicine and was taught that patients have to share responsibility for their health.

Tell me what you mean by this. Where are patients feeling in their health journey and what can they do better? So

back in the 1980s where patient empower was not yet a concept or even a, uh, as they say, a twinkle in somebody's eyes, they showed us a video back at NYU of a nurse attempting to inject something into a patient's iv, and the patient objecting and the nurse insisting and the patient eventually slugging.

The nurse, and I thought they were gonna say, this is inappropriate behavior from the patient. But instead they taught us that the patient had done the right thing because the nurse was attempting to inject the wrong medication. A few years ago I had hip surgery and literally six times nurses tried to give me a medication that had long been discontinued.

And despite my protestations on each and every occasion after the first one, I thought we'd be done. And they came back five more times, over two days, still attempting to give me that medication. So the reality is that most patients are not physicians and are not cognizant or not curious enough to ask the nurse, what are you giving me?

But there's so much human error out there right now that if a patient is not alert, And paying attention, some really bad things could happen. In fact, let's talk about this error thing because it's a big topic. According to the National Academy of Medicine, they now predict that everyone in this country will experience a diagnostic error.

It's estimated that over 18 million errors are made each year, costing over 250,000 lives and nearly a trillion dollars in cost. I lost my brother to an error, a physician. I lost a friend, a physician, to an error, and I almost lost my life to an error. If physicians can't protect themselves against errors, then you gotta believe the National Academy of Medicine is right, that everyone is at risk of errors.

Now, errors not only kill people, but they also create disabilities, and it's believed that for every life loss there are 10 disabilities. That are created and these errors are contributing. The burnout, because it is said for every hundred physicians there are 97 lawsuits. And according to the American Medical Association, 65% of doctors are sued by the age of 55.

That's about two-thirds of their way through the career. Thirds of doctors have been sued, so this error thing is a real problem. So it's not about, you know, going on Google and, and coming prepared and arguing with the doctor. It is about asking questions to really understand why the doctor is proposing the treatment plan or reach the diagnosis that he or she has reached.

Here's one of the big problems in medicine. You leave a doctor, the doctor wouldn't agree with the doctor. You don't come back. Doctor has no idea. He or she got it wrong. We don't close the loop in medicine, which is a big problem, which is one of the other things that SOAP is working on. Is a module that closes the loop.

That is very well said. And I wonder if the ui ux of medicine, the EMRs have made this worse or better recently. I would imagine they're an improvement on paper charts, but as a hospitalist, the way I see the medications is incredibly confusing even to me. Yeah. And I, I think there's, there's so much room for improvement

there.

Yeah. Look, I built the world's first mobile multi-specialty electronic health record some 20 something years ago. And unlike current electronic health records, maybe the more current ones are doing this, we built it to improve productivity, not to comply with some type of regulatory requirement. And the EMRs that were built over since then, many of them were built for meaningful use to comply with all types of regulatory requirements without any real consideration for the physician experience.

And in fact, today I look at these things, and from my perspective, they still look like DOS based applications, even the epics and the CNAs of the world. And you scratch your head and say, couldn't there have been a better ui UX designed to accomplish the same thing? But that would've required more effort.

And I truly don't understand why the U I UX is so poor. One of the, one of the gurus is a group called the Nielsen Group, founded by Jacob Nielsen. He's the kind of godfather of use to face and design, and I read his literature with a religious fervor. Because it is spot on. And, and one of the simplest rules of UX UI is don't make the user think.

In fact, Nissen wrote a book, uh, I don't know, 17 years ago that I read a few months ago called, don't Make Me Think, and it was still relevant. 17, 18 years later. Maybe he was even older than that. Don't make the user think that's, that's the key to good user design

that is, uh, incredibly powerful. Uh, quote, don't make the user think, don't make the physician think, don't make the nurse think.

And I think it's part of the problem is EMRs are trying to build one solution for multiple users where they should be building a diff probably to be frank with you, eight or nine different EMRs depending on who's using it.

Look, I don't wanna give away all our trade secrets, but I, but I'll give away one of them.

I interviewed 25 doctors under a National Science Foundation grant, and one of the things they told me that was very interesting was they skip up to 40% of what patients write on a medical history form. So there are a lot of products out there that are creating dashboards and, and dumping a lot of information on doctors without appreciating that if doctors are not reading a patient's medical history form all that carefully, they're not reading anything all that carefully that's highly detailed.

And so, again, from the principle of, don't make me think, you need to be more clever in the way that you present your data. And I have patented, uh, a way, for example, to visualize family history better than the traditional pedigree. And we use other things that. We've developed that are more creative in the way we put the information in front of the doctor so that the doctor is less likely to scan it and miss it.

I personally experienced in the last couple of years, two doctors who clearly did not read my history form. In fact, I'll give you a quick story. Before my hip surgery, I went to a doctor I'd never seen before because I'm interested in family history and the role it plays in disease. While he was reading my history form, I said, Hey, by the way, you don't have any family history on your two page medical history form, and he's holding the form and you go like this.

He goes, ah, I know he used to be there, but don't worry. I'll ask you all about it. And then proceeded not to ask me a single question about family history. Now, in my case, that's very important because I have extensive family history of cancer, heart disease, diabetes, and knowing that family history could be relevant for somebody undergoing surgery.

I think there's a lot to unpack there. I'm sorry you had that experience, but I, I don't think it's uncommon at all. And the way we collect information from patients before the visit is an incredibly important, and I think what a lot of solutions do, they collect all the informations patients want to give us.

Whereas there is a, there needs to be a triage process to collect pertinent information and also also package it in a way. Um, but again, this is one of those things where AI will be better than us. There. There's no doubt in my mind that decision fatigue, as you said, as unless we can build a system where I'm seeing maximum 10 patients a day, um, which is a sixth of what I see right now.

Yeah.

Decision. So we've taken, yeah, we've taken a contrarian approach. And I'll tell you why. Because during that 25 doctor survey, I asked them, do they want more information on their patients? And they said no. And I was like, okay, how come? And they said, well, more information means more work and I don't have time to do the work I already do.

Yeah. And then they said something that was somewhat bone chilling and quite a number of them said it, more information might include something important and I'll miss it, and then I'll be held liable for it. So you would think that the key to a good patient intake application is the limit, the information that you collect?

Yeah. Well, that's why I'm a contrarian. I say, no, we should do an exhaustive intake, but we should make sense of the data we collect for the doctor. In other words, we should pull out actionable information from that data and present it to the doctor in an easy means to act upon it, which is exactly what so has built.

So we are going for that information for two reasons. One, because we think it could be relevant to this particular visit to the doctor. Two, because we think it could be particularly important to your overall healthcare. And three, we think from a societal perspective, if we can develop these detailed profiles, what we call precision patient profiles, then we can mine that data for greater insight than anyone is getting from electronic health record data, which is full of inaccurate data if needed for billing purposes.

So patients may not be perfect historians, but given the time and effort, they can be exceptional historians and they can share things that nobody else can share. Only they truly know what they ate for breakfast. Only they know how stressed they are in their marriage. Only they know what cancer their uncle had.

If we don't ask them in the United States, there's no other way to get that information. Only they know how many sexual partners they have. Right? Yeah. A, a technical, uh, interesting anecdote related to that. So one of the things we say that is great about using a digital human is that it's able to elicit more truthful responses to questions that many doctors don't even feel comfortable asking.

I think, uh,

let, let's go back to your practicing medicine and you do an mba. Why did you decide to do an mba, Steve?

So, it goes back to my speech and drama major. Uh, I fell into the wrong crowd in college. People who wanted to be doctors, older brother was a doctor. I wanted to do something creative. But it turned out that I was first in my class when I applied to medical school, so medical school seemed like the logical place to go.

I went to medical school and I was really disappointed about how cookbook medicine was, how little creativity or self-fulfillment in terms of bringing part of yourself into practice. I actually enjoyed interacting with patients and actually a couple of patients wrote letters to the dean saying, this medical student really went out of his way to be nice to us.

So I found some satisfaction in that relationship. When it came time to do my residency, I said, I don't wanna do cookbook medicine. At least surgery is proactive, active. But then I found that unlike the cookbook medicine, surgery was almost like a craftman, like a carpenter, building a house. It was all about the skills in your hands.

And around the same time in, um, a couple years earlier, DRGs, diagnostic related groups in 1982 were introduced, which fundamentally changed the practice of medicine and also permanently did away with doctor golf jokes because until 1982, doctors could see patients in the morning in the hospital, a few patients in the office, and be on the golf course by the afternoon and make about 250,000.

This was in the seventies. Okay. After DRGs, they had to get their patients out of the hospital. In two days. They couldn't round and make a thousand dollars rounding on their 20 patients at $50 a piece. They had to see more patients in the office, no more time for golf. So it really changed medicine and I got tired of hearing during my residency.

Their attending physicians kept complaining about, How medicine was changing and then the funny straw that broke the camel's back. But I already was accepted into, uh, HBS At the time, the chief of surgery said that Harvard MBAs were ruining medicine at a grand rounds, and he completely demoralized the re resident staff.

I saw people walking out of the room going, I knew I should have gone to law school. You know, I'm just mumbling to themselves, just completely demoralized. And I was thinking, you know what, what medicine needs is somebody that understands clinical care and understands the business because what I keep hearing from the MDs is that the business people are rooting medicine.

When I hear from the business people is the doctors don't understand this is a business. So having both of those degrees, my belief was that I could have a far greater impact on the system than I could ever have as an individual doctor Talking about business,

do you think healthcare should be profitable?

I think if healthcare is not profitable, we will not track the best people through healthcare because many smart people go where the money is. It's not to say that there aren't smart people that would, there would still be smart people who go into medicine, but as we know in healthcare systems where it's socialized and you get a flat fee, you're not incentivized to see more patients.

They often don't see more patients, and the the waiting list could be huge and so on and so forth. So I do believe healthcare should be profitable. But that's a loaded question because when we talk about healthcare, we really gotta dissect healthcare. I don't think health insurance should be profitable because I don't think it serves any greater societal benefit.

It did when it first came on the SCR scene, when health insurance first became available, it was to counter the fact that doctors and hospitals were charging too much money, and so health insurance was a cost effective solution to that problem Today, health insurance, from my perspective, is part of the problem.

So the answer is, should pharmaceutical companies be profitable? Yes. Or they wouldn't be induced to be creative? Should they be as profitable as they are? Well, given the numbers that fail, there's a balance there between those who succeed and, and go through all the trials and tribulations versus all those that try and fail.

I invested in a company that had a half billion dollar valuation, was waiting for the results of a big STEM trial. On, uh, using stem cells to improve cardiac function, post heart attack, the results came back negative. Even though it had been fast tracked by the F fda, it had incredible animal studies. The stock went from half a billion to 20 million.

And then right now my stock is worth about a thousand dollars.

Let's talk about, sorry, go ahead.

I lost about 90% on the value of my,

let's go deeper into genetic medicine. When I was graduating undergrad, 2004, translational medicine, genetic medicine was all the rage. I remember working in a lab where they were taking, uh, flu puttin stem cells and trying to differentiate them into cardiac myocytes.

Uh, so similar to the company you invested in, why hasn't genetic medicine worked out? Why, why hasn't that taken home? Sure. Why ha, why aren't we using stem cells and when we are using some sort of stem cell therapy for arthritis and, and joint injections, the evidence is lackluster and the studies have not shown clear benefit.

So let me tell you a historical story. In 1907, a physician got up at a major health conference in Boston and said blood chemistry testing is essentially worthless in nine out of 10 patient cases. It does not inform medical decision making. In the article that I read that it goes on to explain that the reason the doctor was so apathetic, if not antipathetic to blood chemistry testing was that he and most doctors at the time did not know how to use blood chemistry testing.

In practice. And even more importantly, it was the blood chemistry labs that were pushing the testing, not the doctors demanding it. And very similarly today with genetic testing, the overwhelming majority of American physicians do not know how to use genetic testing in practice. Pure and simple. So when a patient comes to them with 23 and ME results, they reject it outta hand.

One, because 23andme has limited value in its results, and two, they have no idea how to use that in practice. And patients who come with other genetic test results, whether it's from the En Vita or colors, or myriad, or ambs or, or who, or whatnot, the same thing. They don't know how to use it. And what happened with blood chemistry testing at the turn of the 20th century was it took several more decades until blood chemistry testing became part and parcel of routine medical practice.

And I believe that we are making the same mistake again, which is one of the reasons that Soap Health developed in particularly risk assessment around hereditary risk factors for cancer and heart disease and type two diabetes. Why? Because speak to virtually any cardiologist in the United States today, and he or she will tell you that they hardly, if ever, use genetic testing in cardiology practice, even though we know genetics plays a significant role in cardiomyopathies.

Arrhythmias, hypocholesterolemia, et cetera. There was a study a few years ago where 97% of doctors said they wanted, they were interested or very interested in a point of care cancer assessment tool. Do you know how many doctors have a point care cancer assessment tool right now in the us? Virtually no one.

There's only one other company other than SOAP that has developed a cancer risk assessment tool in the primary care setting using patient reported family history to identify people who require specific genetic testing. And we are waiting on a huge grant from the National Cancer Institute that wants tools that doctors are going to use for cancer risk assessment in the primary care setting.

So think about today, doctors don't have a financial incentive to prevent cancer. They don't have a financial incentive to earlier detect cancer. And among the top two misdiagnosis in the United States is missing early cancers. And I'll give you a perfect example. We're taught in medical school. When you hear horses think of, well, I'm sorry, when you hear hoof beats, think of horses not zebras.

Well, unfortunately, the horses are often not the ones that are gonna kill you. It's the zebras are gonna kill you. Not that cancer and heart disease are zebras because they are the top two killers in the United States. The difference between missing an early cancer and a late cancer is catastrophic cost, catastrophic pain and suffering.

Maybe the difference between life and death. It's life changing. And yet you come in with a sore throat. The doctor's not thinking leukemia and lymphoma as they shouldn't be. But if you have a family history of lots of cancers, or you also have weight loss and fatigue, which is sore throat, and the doctor spends more time collecting that kind of detail, identifying risks, they're more likely to identify that you are at increased risk.

So coming back to genetics, the fundamental issue is that unless we can move physicians, unless we can educate them all, which is highly impractical and unrealistic, we need to hand them tools that baby feeded them, that do the intake, do the assessment, make it easy to order the genetic test, give them the result of the genetic test with specific.

Clinical recommendation so that they can incorporate it with minimal effort for increased reimbursement. Because at the end of the day, I don't wanna say doctors have become mercenary, but making a good living is top of mind. And in the recent Medscape, uh, review, the number one thing the doctors said would address burnout was increase compensation, number one on the list.

And the way they increase compensation is to improve medical complexity. And if you're a patient, you want improved medical complexity because that means the doctor has a more holistic view of you as a patient, which means they're likely to treat you more effectively and more holistic also means earlier detection of disease.

If you look in malpractice suits, it's been shown the number one reason why diagnosis are missed is because risk factors were not considered, which is why SOAP has built the world's first risk and symptom assessment tool because ignoring risk is something you ignore at your own risk. Steve, what is

proudest achievement and what is your biggest failure?

My proudest achieve manage, I'm gonna say is my children. My children are, uh, adults. They give me great pleasure. I was somewhat of a helicopter parent in high school, and then I, I landed and never took off again when they got to college. So I, I made academics a top priority. I. And as a result, all my children went to Ivy League schools.

My daughter went to Harvard. My son went to a joint degree program, university of Pennsylvania, and my youngest daughter went to Barnard Columbia. Uh, so that's my greatest achievement. My greatest failure was my preventive medicine clinic where I was hoping to create a new model of primary prevention in the United States that would change the trajectory of disease.

And I invested 2 million of my own money with a friend, and we built a beautiful primary care center. It was delivering clinically the type of results that everybody in every country would want to take notice of, except here in the United States, the reimbursement was so insufficient that we lost money on making people healthier.

And then my brother got sick. And I ended up closing that down and going back to school to study genetics. But that was my greatest failure and my kids are my greatest success, even though they probably got their intelligence from their mother, I just, I just gave them the, the motivation, but their mother gave them the praise.

Incentivizing prevention is a very difficult problem to solve, specifically because the behaviors we're incentivizing, stopping smoking, healthy eating exercise don't come to fruition in terms of financial savings 40, 50 years down the line

because it isn't about money prevention. Prevention is ultimately about self-awareness, uh, using things like motivational interviewing, tapping into intrinsics motivation.

There are companies, for example, that provide financial incentive around, uh, opioid addiction. So I do believe that you can, financial incentives can drive certain improvement in behavior, but you also have to tap into intrinsic motivation, which is why my second business called MD Prevent had a health certified PhD psychologist on the team.

When people came to me and wanted to lose weight, it's very easy to put somebody on a weight reduction plan. It's much harder to understand why they allowed themselves or whether it was medically predisposed or genetically predisposed to becoming obese. And so a health certified psychologist could help figure out if this was emotional eating or if this was genetically predisposed obesity.

Or what it was. And then we had a, uh, master's level trained nutritionist who could work with people. And we had a master's level trained exercise physiologist who could work on that component. And we had a teaching kitchen, in classrooms, in classes, and a gymnasium and all kind of goodies, which is why we burned through money so quickly.

Uh, and here's the funniest part about that story. So there was a grant application that we applied for, it was called The Billion Dollar Challenge. It's something like that. It was part of the Affordable Care Act. And we submitted an application to open up what we call pre-disease centers. So centers for overweight people, people who were borderline hypertensive, people who were pre-diabetic, et cetera.

And we said, we wanna open up these centers where people could almost, from a community perspective, come in to stop progression of disease. And one of the reviewers asked a question that really blew me away. He said, if your program works, who's going to pay for it?

And the irony of that question, among other things, led me to the conclusion that there is no place for preventive medicine in the United States with simply a society that doesn't buy into prevention. Yeah. We have the worried, well who, you know, takes supplements, which was a whole nother thing. People want pills.

And as I dug into supplements, I became decidedly antis supplement, except in, in very specific situations. So anyway, so prevention is a very tough topic and we as a society are not prevention oriented. The only prevention we do sometimes is, is on our cause and our air conditioners because it's gonna cost us a lot of money to fix it.

But here in the US, if we don't prevent disease, it doesn't cost a lot of money. If you have insurance sometimes to fix it,

the lack of an immediate problem or cause by not falling prevention is, is I, I feel like it's almost an impossible problem to solve. I'll ask you one last question, Steve. What's the end goal for you?

Where, when do you feel you have arrived in life in the sense you have accomplished everything you want to accomplish?

Yeah, that's a great question. I. I tried retiring about 14 years ago, and it was literally the worst year of my life. I had no purpose. I had no meaning. My accomplishment was okay. Done. I had sold my company.

Uh, I did not have a positive emotion. I actually became depressed. So one, I don't think we as human beings are meant to be put out to pasture. This particular effort with self health right now is really born out of losing my brother, the brother I shared a bedroom with the brother whose lap I put my head on, long cart trips.

Uh, the brother that, uh, I often went to because he was a physician, anything medical related and losing him so suddenly as I did, uh, really was a shock to my system. And then losing a friend, uh, who also was misdiagnosed with cancer and again, almost losing my life. Has put me on this trajectory where for the first time in my life, I'm working seven days a week.

And for the first time in my life, I am willing to sacrifice important family events for the betterment of humankind because one, I think I'm in the process of creating something that will transform medical practice. Two, my goal is to save the lives of a million people I will never meet in memory of my brother and my friend.

And three, whatever I do from the healthcare system, not only helps society at large, but also helps my own family, my own friends, my own neighbors, colleagues, et cetera. So it's both altruistic and selfish at the same time. And I want to keep going, even though my co-partners put in my employment agreement.

But I have to retire by 76. Um, that's still a long time away and hopefully I can accomplish all my goals by then. That is a noble comment.

I am sorry to hear about your brother. It sounds like you are ensuring the same does not happen to other people and that that is a very noble thing to do, Steve, so I commend you on taking that path.

Yeah. Look, there's no greater personal satisfaction than knowing that you've really made a difference in somebody else's life.

Is there anything else you want to talk, tell our audience to?

Yeah. The last thing I'll talk about, because you know, the premise of this whole discussion is digital health. Is the need for digital health companies to come together. There is too many one-sided efforts, everybody trying to build the next grade company, to get wealthy, to transform medicine with individual or to distinct group efforts.

I've had conversations with companies outside the US and it's so funny. Everybody wants to be the next great success and I just want to succeed and I'm willing to partner with everybody and anybody that shares my sense of mission and has something of value to bring to the table, I'm more than happy to share the pie and distribute it widely to achieve our goals because we're all part of this healthcare system, and if we don't start working more cohesively together, A lot of things that could happen sooner are gonna happen later.

And I say this half jokingly because I'm really only half joking. My greatest upset is that I believe in the not too distant future. People are going to live hundreds of years and I'm going to miss that opportunity. But I believe if people worked together, we could accelerate that. And I believe that staying alive longer is preferable to the alternative.

And also not just staying alive, but maintaining vitality is preferable to the alternative. And there are so many great ideas out there, but too many people are trying to do it alone. And many of them are gonna fail and their ideas are gonna fail with them. And we need to come together and as we discuss at the beginning of this session, somebody has to be the cohesive.

Force that brings those efforts together. So I hoped I inspired you, Rashad, to possibly take this on, but I think this is a very important undertaking that is long overdue. I wish more startups

thought like that. I, I really do. I wish there was more camaraderie and teamwork in this industry. And it is not purely a, a single player game you can played in teams.

So thanks for

saying that, Steve. It's unfortunate. And, uh, maybe cause I'm, uh, older, maybe wiser, I definitely have the gray hairs to, uh, demonstrate that. Um, I've seen time and time again that teams can accomplish much greater things than individuals. And one of the e earliest experiments that is, they gave us styrofoam cups and told us.

Write down everything you can do with a styrofoam cup, and then they put you in groups and now say, put your ideas together, and you come up with so many more ideas for the Styrofoam Cup as a group than you do as an individual. And so it's proven science that, uh, collective effort is more successful than an individual effort.

That's well said. Thanks for coming on today, Steve. This has been a lot of fun, and we will have to do a part two sometime in the future.

All right. Take care, Rashan. Bye-bye.

How to pick startups (audio only)

In this webinar we start with a short presentation about due diligence followed by a fireside chat with two experienced healthcare venture capitalists.

Key Takeaways:

1. Have a structured due diligence process.

2. Market risk: timing and a big market opportunity are both important.

3. Technology risk: better, faster, cheaper.

4. Team risk: clear founder vision, unique insight, strong leadership and resilient.

5. Execution risk: go to market strategy and business model.

6. Exit risk: what is the potential exit size or channel.

7. You will never get to 100% conviction in early stage investing, you are making decision based on incomplete information.

8. Do both personal founder and customer reference checks

9. An option pool is a must.

10. Interest over background, ability to acquire knowledge is more important than your background.

11. During a pitch introduce yourself, what are you building, what problem are you solving and the market opportunity first.

Transcript

 Hi, everyone. Thanks for joining me on this webinar today. Today, we'll talk about how to do due diligence for healthcare startup. This will be a short presentation followed by a conversation with our guests Liu Zhang and Shubra. I'll be talking about what I look for in the team, the product, the market metrics, and the regulatory framework I look at.

If it's your first time investing in a startup, generally, I would advise you to have a screening criteria. My screening criteria is fairly Simple and it's mostly based around the team. The founders must have known each other ideally for more than six months. It's better if they've worked together in the past and they must be full time in the startup either as a type of investment or shortly thereafter.

I'll make some exceptions for clinical founders if their clinical role adds value to the startup but even in that case the majority of their time commitment and capital commitment should be towards the um, Because it's just, it's so difficult to, to grow a startup and there's so many ups and downs.

Commitment, uh, to the problem they're solving and commitment to the startup is critical. If they pass the screening criteria, I'll ask for their deck. I'll go over what I look for in the deck, but if I am interested in what their deck says, I'll meet with them. After I meet with them, I'll think about the meeting, I'll reflect on it, I'll do some more research.

Generally, when people talk about problems they're solving, they're making a bet about the future of healthcare. And I need to ask myself, am I comfortable with the same bets? AI is a great bet. A lot of people are making right now in clinical decision support tools and replacing or helping our workflows.

And, um, my, um, my thinking on this is AI will help. With patient engagement and help with clinical workflows. I don't think it will replace a decision making in the next five years again. The time frame for venture and the time frame for early stage investing. If you're an angel investors was generally, um, you want returns within 5 to 10 years.

So sometimes you'll see startups are way too early for this, uh, for their stage. And if you don't think they will come to market and if you don't think they will get market adoption within 10 years, At least for venture capital, it doesn't fit the framework. After the research, I'll do deep, deep diligence.

I use my network, um, to do diligence in different aspects. And if I'm still interested in the startup, I will go through the legals and do reference checks. Reference checks are critical. Um, generally a reference check with a previous investor and one to two customers, um, is important. If there's anything I want you guys to take from this talk, it's having a decision making framework.

It's having a balance of intuition and structure. Usually, it's good to have a structured approach and use intuition at the end. I don't invest against my intuition, but I don't rely solely on my intuition for decision making. Thinking is a, it's a very taxing, uh, endeavor. We don't think of thoughts and thinking as energy expenditure, but a chess player burns about 6, 000 calories a day.

A professional chess player, whereas a marathon runner will burn about 2, 600. So you're burning twice as many calories thinking than you are playing chess. Worry of your biases of assumptions you're making, um, a good framework for this. I like Danny Kahneman's framework of when to use your intuition and when not to.

Essentially, he says if you're an expert in something and it is a high validity environment. So, a high validity environment is an environment which is somewhat stable. You're doing an action repeatedly and you know if you're right or wrong fairly quickly. I'm a physician, so working in urgent care is a high validity environment.

Investing is a low ability environment because after you invest in a startup, we don't know if we're doing well really till exit, which is in healthcare generally a minimum of five years. So it's important to have a structure in place. That being said, within the structured process, you can use intuition, um, if you're an expert and it fits that a team?

The two main things I would say I look for is founder problem fit and team dynamics. Why is this founder working on this problem? And why will they stick with this problem? Why will they continue to iterate on their solution until they find product market fit? I look for founders who have a story. I ask them how they became familiar with this problem.

And then I just go deeper into, you know, why are you working on this? Um, why aren't you working on something else? Why aren't you working on something easier? Healthcare is a very difficult industry. I look at team dynamics. I want to know the team has somewhat of a history that will stick together. I want to know what every co founder has the founder problem fit.

So I speak with all the co founders. Mark Andreessen famously says, um, Strong ideas loosely held. There is a balance of humility and conviction. You need to have the conviction that your solution is a solution that will solve this massive problem you're trying to solve. You also need to have the humility to pivot when you're recognizing you're not meeting your metrics or whatever metrics you have where your solution isn't working.

Which is why, again, Founder Problem Fit commitment to the problem you're solving is important because it will, you will continue to iterate to get Product Market Fit or Founder Market Fit. I am not too keen on Founder Market Fit. I know other investors, um, Index founder market fed previous exits very heavily.

I don't. There's very few founders who have two unicorns, especially within one industry. Um, there was a Harvard study in 2004 that says you have a 30% more chance of success if you're a previous founder. But, you know, that's still, that leaves a 70%, um, which you don't need to be a previous founder. And ideally, your previous exit, if we are sticking to data.

Should be a small exit. Um, that's when you, you still have the hunger and you want to do something big. So in terms of product, the founder has to be product problem focused. Lose Lee held strong ideas and customer obsessed. They should have an in depth knowledge of their product, but they need to be focused on the problem.

They're solving a scalability roadmap is important. How will this scale? Early stage investing, following the power law, is a, is a game of outsized returns. It's a game of maximizing your upside while essentially not worrying too much about your downside. What that means is the startup must grow to immense revenue.

Um, usually when I invest either they don't have revenue or they have a couple hundred thousand in revenue. I need a path for them to grow to at least 50 million, if not 100 million in revenue. Um, and, and they need to show me what products, what other verticals we're going to go into, what other products we'll make, or just the product they have right now.

How will this scale to bring that revenue? Idealab did a study in which they, they were asking what is the biggest predictor of startup success? If you ask, um, first time founders, they will often say, Their product or their team. If you ask second time founders, they will usually say distribution or how will they scale.

What this study found is why now. Is the market ready for your product? There's a startup in the 90s that made the iPhone before the iPhone came. There are tons of different versions Instacart. There's countless examples of startups that were too early for the market. The infrastructure wasn't there, people weren't ready to pay for it.

Um, Google was the 17th search engine. So, you know, is the market ready for your product? Are people ready to pay for your product is important. Identifying market tailwinds is critical. And this is why so much money is put into market research. Some market tailwinds I'm banking on is a digital front door hybrid home care model.

AI focused on patient engagement and in the near future I think patients will make their own clinical decisions with the help of AI. Now that requires reimbursement and regulatory changes which I'm backing on but essentially you're making these big bets and that's how you get these outsized returns and especially if you're making bets that other people are missing.

Now, you need to have conviction in your bets. You need to have substance behind it. You need to have research about, okay, how were the previous tailwinds, and why am I predicting this one? Most tailwinds are not predictable. So, COVID, you know, is a perfect tailwind. It blew a lot of startups to success.

We're not doing so well right now, but strictly from an investing perspective, we get our, you get your money out on exit. Um, So, you know, you can't predict Covid, but there are other tailwinds, like when will AI reach adoption in healthcare? Is there precision medicine? It will pay a big part. Will epigenetics pay a big part in medicine And again, stick to the next five to 10 years?

You know, we can all say maybe we will live in the metaverse, but if you don't think we will live in the metaverse within the next five to 10 years, I would advise staying away from investing in it. In the venture model. If you're an angel investor and your timeline is 50 years. Sure. Um, I think you can, you can take a more, a longer timeline approach to investing.

So I look at the business model in general as a B2B B2C. There's pluses and minuses to both B2B is longer sales cycle, but the contracts are stickier. B2C. You know, it depends what you're, if you're competing on price, that is, it's very difficult and, and it opens the door or the door is open for others to kind of just drive their price lower.

And it's, uh, you don't want to be a loss leader, um, in a market competing on value is much better. And I think lots of people who are much smarter than me have talked about this. So I'm not going to get into too much, but essentially do they have a scalable business model or profitable unit economics? Is their customer acquisition cost going to go down?

Are they having more organic growth? What's their cost of goods and will it go down? And cost of goods essentially is, you know, how much does it cost to make your, your good or your product. In competition, startups should have a deep understanding of their competition. Why will they weigh into their better product, their better distribution?

What is their differentiator? I don't worry too much about incumbents, Google, Microsoft, Amazon, stealing their idea. It rarely happens. And generally, there's a competition between the startup getting to distribution before one of these incumbents, if they think this idea is valid enough, the market is big enough, and they want to devote their resources building their product.

Generally, the startup will win, I would say. Um, but again, it's a good question to ask, but I don't index. Why won't Google do this or why won't Amazon do this too much unless they're building something that directly competes with what the incumbent, um, is doing at this point or that they plan to do in the public sets over the next year or two.

So, traction is incredibly important and it essentially validates all the hypotheses that the founders are making, all the assumptions they're making. Ideally, they validate before they build and then they start selling their product in some capacity while they're building. This is more of a mindset. I just want them to value the sales process and not just the product process.

If you build it, they will not come. You have to sell it. You have to have a sales marketing strategy in place. Branding is incredibly important here. Some metrics I look for, what is their run rate, um, which is how much money they're making, what's their burn rate, how much money are they spending, what's their LTV to CAC ratio, um, LTV is the customer, CAC is the customer acquisition cost, a ratio of 3

to 1 or higher is good. In terms of legals, uh, I won't go into too much depth here. The main thing is the CAB table. Which is the breakdown of who owns what in the company. At my stage, the founders must have at least 60%, if not 80%. And this includes, uh, employee stock option tool, which is, uh, some equity set aside for future employees.

They bring on as a company skills, usually 10 to 20%. Um, they should have some intellectual property. Defensibility can be in the distribution. But for biotech, um, medical device, I want to know why is this different from other startups in their space or from people who have done this in the past. And the difference could be that now is the right market timing.

Um, but I want to know why is now the right time and what's different about you. All, um, equity for the founders should be vested, which means they're given the equity usually over four years, sometimes six years. And there's a one year cliff, which means if they leave before 12 months, they don't get any equity.

What you'll see often is they get 25% after a year, and then the remaining 75% over the next 36 months. Which is standard. I'm happy with that. I'll speak a little bit about regular trades. There's three classes, um, that FDA uses. Class 1, 2, 3. Class 1 is low risk. Class 3 is high risk. Class 2 is in the middle.

If you're investing in medical device, most startups will fall into Class 2. And either they will say they're de novo or 510k again, most will be 510k. 510k means that there's a predicate. Someone has done this before and they're using their, um, FDA approval to piggyback on. Now, if they're using a 510k, I would ask them, well, why are you different?

Why didn't the previous one succeed? Or if they succeeded, why will you succeed if they're the market leader currently? Um, in terms of, uh, how much it costs to go through FDA approval and including clinical trials and how long it takes to know, I would say 3, 000, 003 years, 510k, 5, 000, 005 years, class three, you need massive clinical trials, pre market approval, you know, tens of millions, eight years or so.

And again, there's, there's a lot of variance there, but that's, that's in general. So in brief, use an intuition guided structured decision making process. And we'll get started with our questions and answers now. Thanks everyone.

A quantum view into investing and life - Leon Eisen: Entrepreneur, PhD and Investor

Leon is an incredibly intelligent and thoughtful human. After completing his PhD in Quantum Physics he went on to found Oxitone Medical. He is also a Venture partner at Network VC.

We talk about:

1. Intuition vs structure in decision making

2. The quantum world

3. Backwards thinking for startups and in investing

4. How to pick the best colleagues and employees

Transcript:

Rishad: [00:00:00] Leon, I'm so excited for this conversation. I've been looking forward to it for quite some time. To get started, let's go back to your PhD years. Tell me about why did you choose to do a PhD in physics?

Leon: Uh, first of all, I, I was interested in physics from my childhood. Uh, I am not an entrepreneur in my gene, uh, uh, I am from a professor family, scientist family.

Leon: So I consider myself like a scientist. I like it. From my childhood, I did some science all the time. So I decided not to go to, I, I just did my, uh, second degree in physics, like engineer, and decided to continue like, uh, to have PhD and, uh, you know, the difference between PhD and just having master or. As a degree is not a big difference.

Leon: Yeah, [00:01:00] the difference is how you think, because when you're doing PhD, you change your style of thinking, you change your mentality, and you learn methodology. So this is the difference, not in knowledge, not in methodology. Uh, capabilities. I know people with first degree doing things and mathematics much better than PhD.

Leon: Not, not this. It's methodology. How to learn and how to prove. This is what we, um, learned during, uh, five years in PhD. And then if somebody is going to continue in the post doctorate research, what I did as well in quantum computers and laser cooling, this is very exciting. Very exciting.

Rishad: So many of us follow our intuition and gut feeling without even pausing and thinking [00:02:00] about it.

Rishad: Talk to me about your decision making process. How much does intuition play a role? How much does structure play a role? And how does quantum science play a role in that process?

Leon: Oh, it's a very interesting question. You somehow put it in clear. Put everything, all science within one question. That's amazing result.

Leon: Thank you. What is it intuition? Yeah, first. What is it intuition? Intuition, it means you got to some field. You can, I can reference Joe Dispenza. He is great how to monetize quantum field theory, yeah? But, uh, you touch the field. Through the intuition, because the last, uh, research just proves that our brain is just portal into [00:03:00] some, something beyond, uh, beyond just structure, three dimensional structure of our world, or four dimensional if you add time.

Leon: So, that's why people, when they close their cortex, then they meditate, they got into this stage where there is no time, there is no place, and everything exists at the same time. So, tell me, uh, let me tell you a little bit more about it. So, what does it mean? Last year, uh, three scientists... Except, uh, uh, received a Nobel Prize, they just prove that the local, our reality locally is not real.

Leon: Yeah, so our world is not real locally. What does it mean? It mean, means that there [00:04:00] is interaction between entanglement object, which is immediate. No, with the velocity of, of, of light. It's immediate interaction. Independent where I located in a different. The sizes of our world, our universe, they interact immediately, and they should be intelligent for this.

Leon: So there is no time, there is no space, and Einstein, uh, just considered our world is finite because we have finite, uh, velocity of light. So it's all real. If it's real, we have finite, uh, finite, uh, velocity. You cannot move with high velocity. And they prove that we can, not we, entanglement object can move.

Leon: It means that locally our world is not real. But many people [00:05:00] like, for example, I really recommend very interesting book of Donald Hoffman. It's a, he's a researcher, professor, he research consciousness, which tells us that our three dimensional world It's just a data structure. It just was created to accommodate us.

Leon: And we got our perception to navigate our fitness function towards this world. So we somehow be built in this world, but we have, we built out of quarks, leptons, all this stuff, atoms, electrons. And you know, that matter is only 1% of everything. Yeah. So 99% is a vacuum. Because within the atom, the space between electron and atom is a vacuum.

Leon: It could be filled by [00:06:00] a wave function or something like this, but actually this is a vacuum.

Rishad: Is vacuum just another way of saying it is something that our senses cannot detect? And maybe if we had a six, seven, eight, nine, ten sense that we just don't have.

Leon: Yeah, we cannot detect because it's beyond 3D world.

Leon: This is, we call it, people call it quantum warp, some people call it consciousness warp, because consciousness was created. So just imagine that these quarks and this empty space created our brain, and our brain, I don't want to say created consciousness, because consciousness exists. Independent of our brain, and our brain is just the portal to the consciousness.

Leon: It's an instrument. And our world is just an interface. When you see in your computer, you don't know how all electrons, uh, just moving inside all these, uh, [00:07:00] uh, micro scans and all this stuff around. Yeah? Chips. You don't care about it. You cannot get in and, and, and read what happens. Uh, so this is the same.

Leon: We see it's all of reward is our interface. And then we get back to the intuition, we can come to some state where we have some access to, uh, to the consciousness field, conscious, conscious field of consciousness. And this is where I think, and I just, uh, understand that science is going this direction, that, uh, famous people like Da Vinci, like Einstein, they had access there, where everything, exist at the same time.

Leon: So, uh, usually it's called Everett words. Everett just claim that we are living in multi words, infinite world. So it's infinite quantum world. And what do we do?

Rishad: Sorry, Leon, sorry to interrupt. Define, uh, because I think myself and our [00:08:00] listeners will get confused here. Define everything. Do you mean all times?

Rishad: All spaces and because we can, we can say, you know, everything are, we can tangibly make sense of sight, sound, feel smells, but we cannot tangibly make sense of time and space because we can't really sense them given our limitations in our five senses. So define everything. What more do you mean by everything than what we can sense.

Rishad: Uh, we

Leon: cannot sense quantum mechanics, but through the portal in our consciousness, we can get there. And, uh, if you know how to ask, you know, like in GPT, if you know how to ask, you get a good answer. But your question should include half of the answer. In this case, you get the good answer. You have to learn how to ask.

Leon: So people like Einstein, they learn for all their life how to ask correctly, [00:09:00] and they got the answer. answer from this quantum field. And so What we do, what the consciousness from physicalist point of view, it's just a separation of realities. So by your choice, by your intention, you take realities what you want, because all our world is not fundamental, it's just projection.

Leon: It's just projection based on your, uh, uh, the, how deep this projection is based on your, uh, perception of this world. So as I said, perception drives our experience. So we're all built within this world based on experience, experience, and we have fitness function. So to, to feed this world, three dimensional world, and we have experience that shape us within this [00:10:00] world.

Leon: But at the same time, through the intuition, and this is what intuition, you can access to infinite world, no time, no space, everything happens there already. And, uh, this is

Rishad: what we have.

Rishad: The way to access that world, give me some examples on how we could do it. You said we have to ask the right questions. Some people would say meditation is a way to access that world. And when we talk about these things, my mind goes to some concepts that. are, are labeled as science fiction, like time travel.

Rishad: Is, do you foresee a future? And, and this may be a very stupid question because I'm not a quantum physicist, where we could travel time, where you could live in a world that is not the apparent reality for most. And if so, [00:11:00] given the state of our world in lots of ways, why don't you live in that world right now?

Rishad: Why, why do you choose to live in the present world if you have access to different worlds and some monks, um, do live in alternate realities?

Leon: You cannot choose your, uh, your fit to this world. You know, you cannot get inside the computer and, uh, you know, and do things. You need interface. And our world is an interface to get everything what you want.

Leon: And we are, you can consider ourselves like, I don't know, like an icon on this interface, you know. So, uh, There is something, uh, it's called consciousness that I think all our world actually is a conscious world and, uh, everybody has consciousness, even, you know, my, uh, my dog, [00:12:00] uh, could calculate exactly what kind of elevator will, will come, you know, she's waiting for elevator.

Leon: She knows, I know, don't know yet. She knows exactly which elevator will come. So, uh, she is aware. She has awareness. How does she know? I don't know. She has awareness. She hears and she calculates, okay, now this one, now that one, based on her experience and based on her perception. Even the first time she is in a, in some place where you have two, three, five elevators, she understands exactly which elevator will come.

Leon: How is she cannot treat numbers. She cannot treat numbers there. So she calculate based on perception. She, uh, here she look at the people, I don't know, some kind of perpe perception. Tell her what happens and, uh, give her awareness. She is fully conscious, so [00:13:00] consciousness has just different level, even urban country at some level of her access to the portal, to the another war.

Leon: We also have this. So any biological stuff has this. I don't know about non biological stuff. One electron fill another electron in a different, uh, parts of our space. Now just imagine that if we don't have space, if we don't have time, uh, if you tell, I tell you, uh, take myself like entangled to myself in two years, in five years, we have entanglement.

Leon: It means everything what I do today. Immediately change my world in two years. Immediately, right? In the quantum level of field, it's immediately change. I don't have, I wait for two years, but I have sign that something will change even today. [00:14:00] I have only sign, but the world happen already around it. And about your question about monk and, yeah, it's, it's...

Leon: You have to have some tools how to get there, you know, it's it's it's not good. Uh, uh, you can work for a whole day and didn't find any solution in the morning next day or at night. You can find this solution somehow. So because during the day, you created good questions, you tune your brain and it. You got this

Rishad: answer.

Rishad: How do we get access to your dog's perception? The ability to pick the elevator which will come, which we cannot pick, our experiences, intuition, perception, knowledge, does not give us that power. How do we train our [00:15:00] brains, minds, whatever you may call it, to expand our interface?

Leon: Uh, you have to train your perception.

Leon: You have five feelings, feels, feelings, and you have eyes, so you know that people without eyes, they hear much better than we can, so they could hear. So also dog, she has much better. years, you know.

Rishad: So if you think about where we came from and say we were a single celled organism at some point, I would say we probably did not have vision.

Rishad: We did not have all of our senses. We've evolved more senses at some point in our life. Do you think in the future we will have more senses such as consciousness, time, space, and our interfaces will expand? I

Leon: don't think so. I think we will have more tools. So to get into our [00:16:00] world beyond 3D, already we can get there.

Leon: There are string theory and other theories so we can get beyond just, as we say, fundamental So The structure of our world. It's actually not fundamental and locally. It's proved locally. Not real. Maybe it's not real at all at all. It will be proved laterally. So any, any, any science works until another science will replace it.

Leon: Science is not something like ultimate solution. By the way, I'm writing an article now and I'm doing keynote speech about Usually, uh, about what AI will be, uh, how AI will, uh, approach consciousness. And people ask all the time if AI will replace us. Yes, [00:17:00] AI will replace some very low level, maybe middle, middle level of, uh, workers, employers.

Leon: But actually, AI will continuously, asymptotically,

Leon: asymptotically approach the consciousness. I call it ultimate knowledge. Somebody call it God or something like this. Yeah. I'll call it ultimate knowledge, but it will never replace consciousness. It's asymptotically, uh, approach it, but never replace. This is my understanding how it works. Uh, and now, now taking all what I said into account, we can think how we can apply a new knowledge, uh, to, to the business, why business, because we need to feed our free to, to our free dimensional world.

Leon: We have to buy something. We have to live here. [00:18:00] And, uh, knowledge should help us how to, how to better manage our world, how to improve our fitness function to, to this world. This is what our world is expecting from us. This is what consciousness is expecting from us. So if you think about future, not just visualize future, like a People do.

Leon: Yeah, I visualize this my home and future. It helps actually. But you cannot apply this for the business in a good way. If you're going to apply this to the business, I call it quantum backward thinking. You can set up your company where your company in two years, for example, if you take five years, it's difficult because a lot of uncertainties in our world could ruin a lot of black smoke could ruin all this stuff.

Leon: But if you think that there is no big risk of change of [00:19:00] our world within two years, for example, yeah, you can define the stage of your company in two years and understand exactly. And Just in detail, uh, write down what this company is doing in two years. So I call it for a coder. It's a four quadrants and conscience in the middle.

Leon: Conscience means some transformation. People should understand how to tune their perception of the world and how to, how to build intention. This is what we start from when I am working with startup on this stuff. And not only startup, but we're very well developed company as well. And, uh, and then you can have four, four quadrants, four quadrants, right?

Leon: So [00:20:00] Coder, it's a consciousness. One quadrant is opportunity. That is a context, what happens today and what will happen in two years. So like you excavate the tunnel from both directions. And then go to, uh, call it deal. So what kind of resources you, you plan to have in two years? Then you go to the product, what kind of product and what the stage of the product you should have.

Leon: And then you go to marketing and I call it, uh, right people networking, what kind of people you're going to hire, what kind of marketing you're going to make, how you communicate with your partners and customers. So all this stuff, step by step using benchmark, definitely you can build in two years and this.

Leon: It looks like you are living there, and then you can define, [00:21:00] for example, every three months, what I need to get to the next stage. Then again, what I need to next, get to the next stage. So I ask my question, if I have these resources, so what? Or you're going back to the question, why it happens? Why I have these resources?

Leon: And you can build back to point A. So it's from point B to point A. It's like Waze is working. Waze is working like this, it defines your destination and then calculates all the way back. Same way. And if you know exactly all the way back, you, you cannot go in some uncertain direction if you are doing agile.

Leon: If you're, it's a, I call it back in jail, backwards in jail. If you're doing a jail, you do these, then you, you, every time you have to, to make your new strategy. Yeah. And new strategy based on decisions and decisions based on your [00:22:00] perceptions and perceptions based on level of consciousness. And usually you make mistake.

Leon: Yeah. So this is what happens. But if you go back from the future, it's like everything happens already. You know exactly each point what you have to do at each point in your life. And even if some black swan happens, you know how to avoid it. Like a traffic jam, yeah? You know exactly how to overcome it. So, and usually, uh, when my students go to raise money, One investor called me, why did you send this guy to me?

Leon: He raised already money. He doesn't need any money. He has everything. I said, no, he doesn't have anything. Oh, he pitch like he has everything. It was a so strong pitch. Like he was living for this already because [00:23:00] emotions, they don't care about past, future, or current. They are emotions. You can create same emotions, just thinking about future.

Leon: and emotions create your experience. So if you in detail, uh, design your future, you design your emotions in the future. Emotions like billionaire. I want to be billionaire. It's my goal. And I have emotions created like a billionaire. So today you go to the investor, you go to the customer. You position yourself in a totally different way.

Leon: You position yourself like a successful, uh, person. And this is accepted in a totally different way. You can get the deal. Usually I, people ask me, so how, how to understand this just by, by hands? Uh, [00:24:00] if you, for example, going to, you want to go to the cinema tomorrow. To the theater. You check the tickets. And you have only one chair left, only one place.

Leon: You don't have any, uh, free will. You have to take what is left for you. This is usually what people do all the time. If they don't have intention, they take everything what's left for them. And other people who have intention, they did it before. But if you're gonna buy this ticket in a year, You buy it today for the future in a year.

Leon: You can choose any place you want. Any place. You can be everything what you want. And you buy it today. And you keep your ticket in your pocket today. For the future. For your future created today. And this is what we're talking about. [00:25:00]

Rishad: This is incredibly important. And the details here are everything. When people think about that, they, they often jump to, you can manifest your future, and I would say you can, if you have a very detailed plan, now you're at a risk of over planning and Mark Andreessen famously says, strong ideas, loosely held, you're at the risk of having strong ideas, strongly held because you devote so much time into the planning.

Rishad: And you're, you, you. you are prone to being stuck with your plans. So I'll, I'll say two phrases and I want you to tell me if you agree with them and why and why not. So the first one, a strong idea is loosely held. And the second one is our successes are external. Our failures are internal. Repeating success is almost impossible, but avoiding recurrent failures is simpler.

Rishad: All the

Leon: time. I'm not sure [00:26:00] it's possible to avoid failures. It's possible to avoid the same failures, yeah. Do not, uh, do the same mistake twice. But our world is, uh, based on failures. I know people who built a good company. They sold this company. They created another company. Very, very quickly. They built very quickly.

Leon: They sold very quickly. And then they start another company and they, uh, just, uh, start with some problem and they didn't have experience of failure and they don't know how to work on these problems and they fail and fail dramatically because they fail from much higher position than they were before.

Leon: So it's very important. Uh, it's, it's a Silicon Valley, uh, style. Try to fail as soon as possible, and do not be afraid to fail, because in this case, to learn. [00:27:00] Uh, kids, kids learn how to be healthy through being sickle. I was ill all the time when I was a kid, and then I became... So it looks like I took all, uh...

Leon: All the viruses existed in our world when I was a child, and, uh, and for the last, uh, 30, 35 years, I almost do not take any flu or something like this. So, it's very important. This is, this is how our world just works. So, it's very important to fail in the beginning, to learn from failure. Otherwise, I am sure, 100%.

Leon: that people who did even billion very smoothly without failure and never met some failure, lose company or something [00:28:00] like this, you can put them in the beginning and they won't be able to succeed anymore. So it's very important to learn how to fail, not to specifically to learn how to fail. To be prepared for this, because if you do not know how to fail, you do not, uh, you, uh, you do not get details of failure.

Leon: I can share with you, for example, uh, how did I learn during my PhD. Uh, before I didn't do it. And I spent a lot of time on, um, on these, um, exams and all this stuff. And during my PhD, I accepted a totally different approach that helped me to go through very tough courses and to save a lot of time. Because...

Leon: I [00:29:00] came to the lecture prepared, all students come to the lecture and learn from lecturer and they get out from the lecture maximum 10 20% they take out of them, right? And then they go to the cafe, so in a day they lose everything. And then they have to go back to learn from the beginning, and if they have any questions, nobody can answer.

Leon: But if you learn before the lecture, you come to the lecture with all questions, you can ask these questions, and you can, uh, raise your, uh, understanding of the subject 50 60%, up to 60%, for example, because you're ready. And you come to the lecture not to hear some new stuff. You come to lecture to [00:30:00] cement what you know.

Leon: And this is very important in business as well. You have to understand detail. That's why you have to learn before.

Leon: This

Rishad: goes against somewhat the strong bias to action that is touted in Silicon Valley. Adam Grant talks about this in his book Originals and he concludes moderate procrastination is the way to success. Not to start right away and not to wait forever, but let the idea... incubate in your brain. Do you agree with that statement?

Rishad: And what percent, and I want you to give me a number here, Leon, of your success is luck?

Leon: Uh, first of all, let's start from the second question. There are three elements of success. In the first place is luck, maybe 50%. [00:31:00] 30% is intention, and 20% is connection, or maybe 30% is connection, 20% is intention. Doesn't, not a big deal.

Leon: But lag plays. A huge role, but not like coming from their, uh, uncertainty like coming from the potential to different. Again, we're talking about quantum mechanic work because quantum mechanics is talking about potential and probability and probability, this potential and even probability zero has some potential if you're talking about rational, uh, numbers.

Leon: So your luck is your potential. And your potential is based on your intention. And your intention is based on your understanding and fitness to this world. [00:32:00] And what does it mean, fitness to this world? It means connection. For business, it means connection. You know how to build connections, you know how to talk to people, you know how to sell.

Leon: Uh, and, uh, this is what really works in our world. So three things, very important, not only luck, because luck taking itself has no meaning, no meaning, but it should be based on your potential. And what was the first question?

Rishad: In Silicon Valley, uh, people tell to just get started. A strong bias to action is looked at as a great thing and a strong bias to planning, waiting it out is looked down upon almost.

Rishad: I just wanted to get your thoughts on that. My own views are moderate procrastination. My own views is don't get started right away, plan a little bit, wait a little bit, don't wait forever. [00:33:00] And the, the most successful people know when to launch and know what the appropriate amount of planning is. So I wanted to get your thoughts on the Silicon Valley mantra, just, just get started.

Rishad: And this is Charlie.

Leon: Yeah. Very interesting question. Again, we cannot think in a planner way. Our world is three dimensional as you told even beyond. Uh, so if procrastination based on your fears. This is a bad thing. If procrastination is based on your wisdom is a good thing.

Rishad: That makes sense. I think, um, the, the, the quantum science background you have is, I can see how it's contributed quite a bit because it, it almost forces you to dig deeper [00:34:00] and to get to the real truth.

Rishad: Whereas a lot of people would stop. I wanted to talk to you about team building. This is something I struggle with quite a bit. My, for those. Interested in my Myers Briggs personality is INTP, which means I'm an introvert. I don't like managing people. I'm happy to give them tasks and give them all the freedom to do however they desire.

Rishad: In my experience, that does not work. It just fails because People crave structure. They want me to guide them along the way and they want me to give them more specifics. Talk to me about your vetting process for working with people and how do you keep them motivated, give them the freedom, but also provide them with structure.

Rishad: And if you could give me some benchmarks to use specifically, that would help me a lot in my vetting journey.

Leon: Yeah, I would love to, uh, to share my, uh, approach. Yeah, usually I hire very good people, [00:35:00] very good people. And, uh, in my companies, uh, very rarely people leave my company. Uh, because my approach is, uh, uh, fundamental, I would say.

Leon: I know exactly, for example, if I'm looking executive, I'm looking the,

Leon: uh, person, person, uh, to the position. Not position, uh, second, I am looking for position to the person, not person to the position. If I am looking for some low level employer, I am looking for person to the position. There are two different approaches. So, for example, uh, if I, uh, if I build new company, for example, and I need sales manager for the new company, whom I am going to hire?

Leon: Am I going to hire somebody who played music during his childhood? [00:36:00] I'm going to hire players also, forward, who know exactly who is there and can calculate immediately his next action. Definitely, this is whom I'm going to hire. I'm going to hire

Leon: some people or some person who is rebellious, who is against everything. Maybe it should be asshole, because he should go through the walls. This And maybe I'm ready to, uh, to, to accept that he's asshole and he will say everywhere that he sold everything, not me. And he was working for some idiot who is CEO or founder of this company.

Leon: And he did, he built all this company. I don't care about it. I care about performance [00:37:00] because I need sales for this company. But it never goes beyond one year. So for the one year, this guy should build sales. And then if everything is smooth, whom you're going to hire? Player music, just smoothly, walk with customers, you know, step by step.

Leon: So all the time when you consider home to to hire, you should build archetype. of the person you are going to hire. There are four different people, people's archetypes, even more, and you should know exactly whom you are going to work with and how much you are going to suffer from this. So if you know exactly which archetype you're going to hire, you're ready to deal with this type of archetype.

Leon: And a black swan doesn't happen. Everything goes [00:38:00] smoothly, okay? If you are not ready to deal with people who, who just position themselves very good during interview, you hire them very nice and they start working, they become asshole. It means you missed some kind of archetype. So you can build a questionnaire to recognize this archetype.

Leon: Okay. For example, you should again, pay attention to the details, how he's talking about his previous war, previous boss, how he's talking about the team he was working before. So all details, you should just, he's talking, not you. Okay. He's talking to you. He's telling himself to you. If he's talking, you can have just.

Leon: infinite information from him about himself. And [00:39:00] if you know how to read details. You know exactly who we are dealing with.

Rishad: Let's talk about decision making in a board or in a team capacity. I'm running a pitch competition right now. The results actually might be out by the time this podcast is released.

Rishad: I'm deciding how to select the winner. What people are naturally drawn towards is everyone, every investor gets one vote. I don't think that's a fair process because I don't I think there's tension between an idea of democracy and an idea of meritocracy. The best ideas are not the most popular ones. A weighted voting process with people who are more experience knowledgeable in what we're voting about should get more votes.

Rishad: And people who are less knowledgeable experience should get less votes. This inherently gets a lot of pushback whenever I bring it up because everyone's like, just give everyone one vote and that's fair. And I actually don't think that's a fair process. I'd love to hear your opinions and thoughts about it and say, there's a board.

Rishad: And [00:40:00] one, one person on the board, you know, has deep financial background. The other one is an industry expert and say it's a med tech device and they're a mechanical engineer. If you're talking about finances, the mechanical engineer should get half a vote and the finance person should get four votes. Uh, and I'm just using some extreme examples, but I'd love to get your thoughts is not how the world is designed, but I think this should, this could be, I think you're

Leon: too serious about it.

Leon: Okay. I think you are too serious about it. I think it's, uh, everything is the game. It's the game. Finally, you decide whether you're going to invest in this company or not. You cannot rely on people with biases based on their perception of the world we were talking about. Everybody has his own perception or own fitness function to this world.

Leon: And you're going to rely on this. Now, if you have statistics thousand, you bring in the board thousand people and they decide even thousand is not enough because [00:41:00] each people has a, every, every guy has such a huge bias that you cannot just average all these biases, even 1000, taking 1000, uh, people. for statistics.

Leon: So it's a game, no statistics. You cannot decide based on their decisions. So play the game, give everyone Uh, one word, uh, word is it's totally fair because everyone thinks he's a good financial guy, thinks he's good in engineering, engineering guy thinks he's good in finances, uh, this is what happens usually, uh, and they belong to different quadrants of whole brain thinking.

Leon: There is a very interesting theory about whole brain thinking, how they manage to, uh, to, to work with each other. For example, some interesting story. If. I'm like a founder. I'm going to the Venture Fund. [00:42:00] I am engineering founder. I'm Visioner. I'm Steve Jobs, I'm Visioner. I don't know so much engineering. I know vision.

Leon: I know what I'm going to build and I cannot play with numbers. All this stuff. Analytics, I come to Venture Fund whom I meet. So I tried to tell them about my vision, wow, I'm building this, it will change the world. And he's looking at me without understanding any word I'm talking about. It's not his style to understand.

Leon: He's thinking by, so he can, uh, he asked me. Okay, good. So where is your proof? Where is your clinical trials? Where is this? Where is that? How many people? Where is statistics? Where is financial? Financials? I don't know what to say. And now, just imagine, I go to the, I come to the partner of Venture Fund, [00:43:00] who was previously entrepreneur, and he is visionary as well.

Leon: And I talked to him. He said, wow, that's amazing. Very good. Now let's go to my analytics for the numbers. So this is, this is how it works. So all, everything is just the game and don't take it seriously.

Rishad: In your experience, who is more likely to be successful in the visionary or the operator?

Leon: Definitely visionary.

Leon: The real surgeon will never be successful. Interesting.

Rishad: So one thing I wanted to get into is decentralization and how that will play out in the current global macro environment. Governments continue to protect themselves and their self serving interests to an extent, and there is an unwillingness to an extent for them to work with each other.[00:44:00]

Rishad: The location of your startup has been critically important because if I'm investing And certain emerging markets, government interference, tax rules, there's too many unknowns and I would rather put my money in countries which value and incentivize innovation and startups and angel investments. What is your thought process on is the location, is it much harder to build a successful startup in, in Lagos, Nigeria, compared to San Francisco or.

Rishad: Is there some, are things changing there?

Leon: I'm not sure there is a big change. Location is very important. Uh, but at the same time, it depends on your connections. Again, you can live in San Francisco. You're, you're introvert. You don't know how to make connections. [00:45:00] This location doesn't have any meaning for you. Maybe you better go to the village and start business there because in the village, you can just meet in the club with all the people, build connections and become somebody there, but you cannot do it in a very crowded place.

Leon: Again, it's very individual, but for me, if I'm going looking for to do business, I would because I'm not, I am between introvert and extrovert. I told all my life I'm extrovert, but finally understood I'm introvert. So I'm somehow in between. So I usually, uh, I know three best places where I want to be to build the business.

Leon: It's, it's a. United States, specifically Silicon Valley or Boston. It's Israel and it's Singapore. So these three places, [00:46:00] just amazing places for people like me to build business, to create connections and to have a very good perspective. Uh, if definitely if you build in, uh, no, Nigeria has a very good perspective as well, a lot of capital coming there.

Leon: And again, it depends how market is crowded. How much capital capital coming there? What kind of culture behind the venture ecosystem? For example, uh, a lot of, uh, companies could, uh, could be created, uh, you know, I don't know in Arab Emirates, but in our Emirates, usually different type of financing is the family offices.

Leon: It's offices. It's not venture capital. So you have to learn something different, how to manage, [00:47:00] uh, getting capital from the offices. Uh, again, everything is very individual, and you should just understand what is better for you. Definitely, if you go to, to, to, to, to study in Harvard, in Harvard, uh, Harvard, you have much better future.

Leon: If you study in, I don't know, in some places, uh, well, In Africa, okay? Or in even in Asia. So in any case, nobody, nobody just cancel location.

Rishad: That is a very actionable answer. Thank you for those insights, Leon. I'll ask you one last question because I know we have a hard stop. What is one piece of advice you would give yourself if you 10 years ago? [00:48:00] Uh, one piece

Leon: of advice. To, to learn how to pay attention on detail, everything, you know, the devil in detail.

Leon: Uh, I, I, I did a lot of mistakes and failure happened because I didn't account some details and just, you know, there are three levels of thinking of vision of the things. You can have some deep thinking, deep vision. It means. You can, uh, go deeper and deeper into detail. This is in one direction. So it's some three dimensional space.

Leon: Another space is integral vision, or vision from the top. It's like, you know, like a door. You can [00:49:00] see all these stuff at the same time, but you don't see the time. And it could be vision in time, whom I am going to be in a year and two years, again in detail. So in this scale of time. So it's three dimensional vision.

Leon: Which everybody who you should use to decide I built my decision. I would say like this. I do not decide Unless I have vision in all these three dimension. So I call it, you know, like so it's like

Leon: Optics you can see far away. You don't have to details you flip it and you can see immediately what you have here. And you can have a time

Rishad: like, uh, Gail, that resonates with me so much . That is [00:50:00] advice I would give myself as well is plan more, act less, and that someone who has a very strong bias towards action.

Rishad: I jump into products, uh, projects without planning and it has hurt me quite a bit and it's something I'm actively not doing anymore. Thank you for this, Leon. This has been amazing. And I can't wait to do a part two, hopefully soon.

Leon: Yeah, that's amazing. Thank you. Thank you for inviting me. And I wish you a great, great, uh, future like investor.

Leon: And I know you, you moved from a medical field to entrepreneurial and investment field. And it's, it's not easy. And I wish you just success there.

Rishad: Thank you.

Investing in the best venture capitalists and startups

Shubhra Jain is the Head of Healthcare investments at Tarsadia Investments. She moved to US after completing her MBBS in India, to pursue a Masters in mechanical engineering at Stanford after which she completed her MBA from Wharton.

Shubhra is an incredibly sharp, reflective and humble person. I had a lot of fun talking to her about:

1. Due diligence process for startups

2. How she picks VC funds and GPs to invest in

3. Her transition from physician to investor

4. Market tailwinds in healthtech

Transcript:

shubhra pdocast audio

Rishad Usmani: [00:00:00] Hi Shira. Thanks so much for joining me today. I'm really looking forward to this. Let's, uh, start with your childhood. There are things we learned in our childhood that help us with our successes and our failures, and there are things we have to unlearn from our childhood. Talk to me about your childhood.

Rishad Usmani: What are some things you've learned that have helped you, and what are some things you've had to.

Shubhra Jain: going with the first one first. Um, I'd say I was born, um, in a family of physicians. My parents were both physicians. Yeah. And one of the big things that I learned growing up was, I was told always, repeatedly, no work is too big or too small.

Shubhra Jain: There is nothing that you can't do that is beyond your reach, so don't be intimidated. , um, by any task and opt out of it just because you think that it will be too hard or it will take too long, or you won't be able to do it. Um, but at the same time, [00:01:00] don't be ashamed to do the small stuff either. Um, you know, my parents, since they built something from ground up, they, there were times when they were doing all kind.

Shubhra Jain: Things that, uh, you wouldn't think of doing as a practicing doctor, but they never shied away from that. And that's how they raised us. Um, that whatever is needed should be done. And there is no shame in learning to do things that you may not be looking to make a profession out of it. But if they are things that need to be done, then you need to step up and do them and take pride in doing them.

Shubhra Jain: Um, I think that has really helped me in my career and life, uh, because later on, after I left the sheltered home, um, I moved to another country all by myself. I switched career paths and had a lot of time, a lot of times when I was just knocking [00:02:00] against a closed door and trying to figure things out that required some resourcefulness and creativity and, um, because I had that open-mindedness about if this is what, where I want to go, I, I should be able to do it.

Shubhra Jain: Um, and also at the same time, the willingness to do what it takes to get there, um, irrespective of whether that was what I was trying to do up until then or what. Had aspired to do. Um, but just looking at it as a necessary thing to get done in order to get to where I am going. Um, and just that mindset was really helpful in giving me the resilience and, um, the persistence to overcome those

Rishad Usmani: obstacles.

Rishad Usmani: Let's go back to, you've finished your M B s, you've, I, I imagine this is when you've moved to the states and you've landed here. And you're trying to figure out what [00:03:00] you're going to do now. Um, I did my med school in the Caribbean. Um, don't the exact same thing, but you have to do residency all over again.

Rishad Usmani: Um, for those listening, talk to me about that decision. What were you feeling and. How did you make the decision to go into venture? Coming from a clinical background? Um, venture and investing is as far as you can get from clinical practice, I would say. So talk to me about that, that decision you made and, and how do you, how did you make that decision?

Shubhra Jain: Yeah, so at the time when I made the first transition, which was. Outside of clinical medicine, just entering the world of technology and business and leaving the world of clinical practice, I didn't even know what venture capital was. Um, I had no, um, it, it wasn't done with an intention or a goal of becoming an investor.

Shubhra Jain: It was more done by the desire and the drive. Used technology [00:04:00] as a lever to create more impact. Um, so I grew up in a household of physicians. I had seen my parents see, create massive impact in their community. They started the first hospital in the city they lived in and massively impacted the healthcare ecosystem in that community, um, and continue to do so.

Shubhra Jain: But I just wanted to be able to do something at a bigger scale than touching one patient at a time. And, um, Being able to do that. Um, so I used and I thought of technology as a lever to scale that impact and to help me reach more people. And that's what the initial driver was. That's really all I knew that I wanted.

Shubhra Jain: I came here in the, to the states to learn, uh, about technology. That's what I came for, the graduate program at Stanford. and how to use it as a lever to change the world of healthcare. Um, that was the idea. That was the motivation. And then after that, it was [00:05:00] one step after another, right? Like once I landed at Stanford.

Shubhra Jain: that's where I got exposed to the Silicon Valley startup ecosystem. Uh, other people who had made career transitions on campus, uh, even some of my professors who were involved in multiple things. And this whole idea of you can only do one thing, um, was shattered and, um, that that was. liberating. Um, and that empowered me to start looking at how can I leverage what I have already learned and the skills I have gained to create more impact and to go where I want to go in terms of leveraging technology to change healthcare.

Shubhra Jain: After graduating from the program at Stanford, I joined a startup. I led product for them. They were building software service products, selling to hospitals and health systems, and that. My experience on the operating side, um, and the lesson that I took away from there was, it's not [00:06:00] enough to. a great product or to build a great technology because if there is not a good business model around it, if there's not an organization that can, um, actually get people, get, get the product to people and, uh, enable the distribution and reach consumers, then you can build anything in a lab.

Shubhra Jain: But if it can't reach people, then it won't create the impact that you desired it to have. And that was, The light bulb baha moment that led to the interest on the business side of things. Okay? This is really the lever that will unlock the potential of any technology. So how do I, um, how do I learn about that?

Shubhra Jain: And that led to the transition to business school at Wharton. where I did my mba, focused on healthcare and finance, and I did a summer internship in venture capital, uh, at a firm in Philadelphia. And that really was my first exposure to venture capital is the long answer. [00:07:00] Um, that's when I learned what venture capital means, what investing means, and uh, it was really, um, an eye-opener and, uh, I really enjoyed that internship and decided to pursue a career path on that, on that side of the.

Rishad Usmani: do you think it's better to be a generalist or a specialist as an investor? Do you think it's better to hone in one niche or to be more of a generalist and focus on recognizing founders who are experts in tho their own industries and back them? I think

Shubhra Jain: there is no straightforward answer to that. Um, it depends, unfortunately is the the cop out answer.

Shubhra Jain: But, um, it depends on the stage at which you are investing. Um, and while being a generalist may work for. Some industries it may not. For others, there are some industries that are definitely more entrenched and require more [00:08:00] specialized knowledge. Um, for you to be not able, not only be able to understand if this business is solving a real problem, what would it take for them?

Shubhra Jain: What in, from a regulatory perspective, from a policy perspective, from a business model per perspective, to really gain widespread adoption amongst their consumer base. Um, and also to help them materially post investing if you are somebody who's leading rounds and taking board seats and all of that. Um, so the, I think there is room for both.

Shubhra Jain: Um, that said, in industries like healthcare, I think it is very easy to believe in the potential of something without truly being able to estimate and de-risk the roadblocks. Um, that might lie in on the path to achieving that potential. And in order to really be able to have an insightful understanding of the [00:09:00] different roadblocks that a business may need to go through and tack, block and tackle before they can achieve their potential, there has to be somebody around the table who has that domain expertise.

Shubhra Jain: Um, Now, one way that people get around it is take help from experts or consultants and things like that. And that model has worked in more on the private equity side of the world where they will really bring in a specialized firm to do some various. , um, aspects, specific aspects of diligence and the diligence processes run for months and go very deep.

Shubhra Jain: Um, it doesn't typically work in the venture capital world because the speed of decision making on deals is just so much faster and the processes are often very competitive. Um, and to be honest, these companies are so early in their trajectory that there is very little data for us to dig into. And, um, he.

Shubhra Jain: Very often people are making bets based on their view [00:10:00] of the market, which is preformed you form your view on the market and identify the opportunity spaces before you meet a particular business. And often based on their intuition about the ability of the team to execute. Um, now all of those are great markers, but I think.

Shubhra Jain: Well in industries like healthcare, which are regulated spaces and have specific nuances in terms of who makes the decision to buy versus who's the actual user, um, is often very different. And, um, also the, the adoption and implementation of things may not be very straightforward. Um, so really it requires someone to be able to.

Shubhra Jain: have worked in that space before and come in with that understanding or be willing to do the work and go deep and often in terms of how quickly the deals move in venture capital, we just don't have the time to be able to do that [00:11:00] work, even if someone wants to. Hence I, I feel that for industries like healthcare, there's value in being specialists.

Shubhra Jain: Um, that doesn't mean you can't work with generalists because even generalists usually, one or two or three core strengths. So someone may be really good at hiring executives for a team, for their portfolio company's teams. And, um, that person may be good to work with as a co-investor or have someone on the cap table because that they can really help build a team at the early stages of the business.

Shubhra Jain: So they, they, they can come with various trends, even if it's not industry knowledge. That doesn't, I, I think there is room for both.

Rishad Usmani: Okay, that, that's a very thorough and comprehensive answer. Thanks for that, shr. Let's talk about your own diligence process. How much do you rely on structure and how much do you rely on intuition and decision making?

Rishad Usmani: And you can talk about the founders of the [00:12:00] product or whichever part of the diligence process you wanna talk about. Yeah,

Shubhra Jain: so I would say it's a mix. Um, it. and uh, I don't know if you've seen that cycle of it. It's structured, then it's messy in between, then it's structured again. And I think that's, that's what it ends up being.

Shubhra Jain: So we are very thematic in the way we invest and, uh, I would develop my view on certain market spaces, uh, in much. , uh, in advance of meeting a particular business, typically. So every year I'll pick three or four themes and just dive deep into them and try to understand where is the white space, where is the ability to build a good business in this particular space?

Shubhra Jain: And, um, . Then hopefully when I meet a particular company, I can go into that conversation with a little bit of more of an informed view [00:13:00] and ask them some questions to figure out do they fit in that white space or are they playing in a very crowded, uh, part of that market? Or, um, how much of the, how much of the quarters, five forces leverage are they going to have ver versus other competitors and market forces?

Shubhra Jain: Right. now in that same first meeting, the intuitive part of it is how does the founder come across? How does the team come across? Are they a strong team? Um, and so it's a mix of both. I'm going in with a structured view, um, on the, on the market space and trying to figure out how they fit into that. But then at the same time, , my intuition is working in the background and trying to pick up all kinds of signs and signals, um, around the team and the business.

Shubhra Jain: Right. Um, and then I think I would say after that first meeting, if they check some of the very basic boxes on the market view, then. [00:14:00] The decision is guided by intuition as to whether we want to dive deeper into diligence or not. If there was something that just seemed off about the team, the co-founder dynamic wasn't great during that presentation.

Shubhra Jain: Um, something that ticked you off, you know. . Um, then we may, we may just decide to pass, but, uh, otherwise we'll go deeper into diligence. And the diligence process, I would say is relatively structured. Um, so we'll, we'll do the usual suspects. We'll go through all of the financial analysis. We'll do a competitive analysis.

Shubhra Jain: We'll do the reference calls. Now the reference calls is the piece of diligence where. A little bit more intuition playing in, right? You're trying to read between the lines a little bit. You're trying to push people to give you the information that maybe they don't wanna come out, come right out of the gateway.

Shubhra Jain: Um, and your intuition can guide that a little bit. Um, then after we have done all of that analysis and we have the [00:15:00] structured bullets checked, again, the intuition plays a little bit more of a role because the truth is we're al always looking at many opportunities and it has to rise up to the surface in that pool of opportunities, right?

Shubhra Jain: Like, so if I can only spend time on one deal and I have four that I'm looking at, then at some level that becomes an intuitive decision in terms of this seems more exciting than the other. Um, and, um, I, I, I think. , what is intuition? Really, intuition is thousands of years of structured decision making distilled into this fuzzy power that all of us as humans have, which has been generated through our ancestors evolutionary development.

Shubhra Jain: Um, so I would say intuition is nothing but condensed, distilled, structured knowledge. and we [00:16:00] continue to build on top of that by gaining more structured knowledge and doing more analysis in our lifetimes. But it would be stupid to ignore this wealth of resource that you already have. Um, so we try to strike a fine balance between both.

Rishad Usmani: I'm in the midst of, uh, planning a pitch competition, and I'll be launching it soon. I'm figuring out the criteria to evaluate founders from my diligence team. And there are two things I'm debating. A, is the fact that we are over aligned on previous founding experience of fallacy. Uh, I think Harvard Business Visa said that's a 30% chance of more success if you have a previous successful founder.

Rishad Usmani: Is that true still or is that study too old now? And then B, does it matter how long the founders have known each? In terms of months or years. And I would love to hear your thoughts on, uh, those two things in [00:17:00] particular.

Shubhra Jain: Um, I'm gonna take the more conservative and expected answer here probably and say that both of those things do matter.

Shubhra Jain: Um, and, um, here is why, because a lot of times when you're a first time founder, it's, it's just a learning process. And, um, sometimes. Paying for their education. Um, and sometimes that's okay. It depends on their pace of learning and how quick their feedback loops are. If they learn and iterate and execute on that learning really quickly, then it can still work the first time it does many times.

Shubhra Jain: Um, but that said, the second time founder does have an advantage in terms of being able to see around the corners a little bit and skip a few. Missteps. Um, and that can be material in the trajectory of the company in terms of their ability to be a little bit more capital efficient in terms of their ability [00:18:00] to hire better in terms of their ability to choose the best investors to build a better board.

Shubhra Jain: Um, so I, I do think that it matters, um, now that. . You also, if you want to take a more nuanced approach, you have to think about why they were success the first time. Were they really the factor that led to the success? Um, or was it just plain luck, which happens a lot of times? Or was it somebody else on the founding team or, um, and.

Shubhra Jain: See how translatable that is. If that was something else other than them, then see how translatable that is to this current business and this current market opportunity, um, without like giving them too much credit for it. So I, I think you have to balance that a little bit in terms of the length of the relationship between co-founders.

Shubhra Jain: I do think it matters because trust. A weird thing, you [00:19:00] just automatically trust people and more when you've known them for a long time, which is insane. You may have spent three whole days with someone and have spent an aggregate number of hours that is a lot more than someone you've just known for 10 years, but seen them once every two years for an hour.

Shubhra Jain: but you inherently trust that person more. Um, and that's just how human brain works. Um, the other thing that happens is once you dig a little bit deeper into that, and if they have really spent the 10,000 hours or whatever together in any capacity, then hopefully they have been through some ups and downs together and that builds.

Shubhra Jain: A very strong bond and enables them to navigate those ups and downs as eventually will happen during the journey of the startup. Uh, so I do think it matters, but also the intensity of the relationship matters. Um, you can. dig in a little bit deeper by [00:20:00] asking questions like, what are some of the most difficult experiences you have had together?

Shubhra Jain: How did you navigate that? What was a time when you had a fight and how did you navigate that? Uh, what was the longest you went without talking to each other? How do you both handle conflict? So there, those are also things that matter. Length is not the only thing, but it is definitely a.

Rishad Usmani: I love this answer.

Rishad Usmani: Shuber quality over quantity. The gold is in the details. Yeah. I'll give you a scenario. You come across the perfect founder. But they're working on the completely wrong problem in the wrong industry. You can tell they're not going to be successful. Do you invest in them to maintain their relationship and have the opportunity to invest in their next company, or do you pass and try and keep a relationship with them for their next project in some other capacity?

Shubhra Jain: I personally will choose. I know the peop, there are people who do the former, but I personally will choose to pass and try to build a relationship another [00:21:00] way. Um, maybe I can still advise them, maybe I can still be resourceful for them and send them things that may be helpful to them. But I would not invest in a business that I don't believe in, even if there is a founder that I do believe in.

Shubhra Jain: Um, and I will wait for them to come around the next.

Rishad Usmani: Okay. I think that makes sense. Let's talk about markets. Venture is a game of predicting markets five to eight years from now. Predicting M and a activity, if the market's gonna be bullish, what i p o price they're gonna get. We tend to think of our successes as internal and our failures as external, whereas usually it's the opposite.

Rishad Usmani: Tailwinds drive. A considerable amount of success. Bill grossed this study in Ideal Lab that why now our market timing was the most important predictor of success for startups in early stage for the listers. This is completely different from public markets, and there are no parallels to be drawn here.

Rishad Usmani: Tell me about what [00:22:00] tailwinds are you banking on for your investments for the next five?

Shubhra Jain: So I, I, I'll answer that. But with the caveat first, I think this is generally true, but it is relatively speaking, less true for healthcare. Um, I think it's more acyclical, uh, and a little bit longer to play out, um, than some of the other more consumer facing fad industries, right? Like so. . So with that caveat, tailwinds that we are, we believe in and um, are backing, um, one big one is data sharing and interoperability.

Shubhra Jain: I think the whole healthcare industry has been talking about that for a while. And then, uh, and when meaningful use, um, mandated the implementation of electronic medical records, we created the biggest, most rich database of medical information. Sits in silos in various corners of organizations and doesn't talk to each [00:23:00] other, and there has been an increasing awareness and movement within the industry.

Shubhra Jain: Change that and to help us. all as consumers, but also various stakeholders within the healthcare business ecosystem to be able to share that data, glean insights and inform their various business models. Um, and I think that is finally happening with the Fire rule, uh, and the 21st Century Cures Act coming in LA last year.

Shubhra Jain: I, I, I think that there are, , more rules coming from a regulatory perspective and more businesses being built to, um, capture that value. Um, and also more openness from incumbents than we have seen before. Because I think the incumbents are finally starting to realize that if they don't do it, some of Stark will come and do it.

Shubhra Jain: And, um, so they wanna get in on the game finally. Um, so I think that's definitely one of the big. . We have also been talking about value-based care for generations, [00:24:00] um, now and. We now finally have the infrastructure that we need to structure value-based care contracts and to deliver care in that manner.

Shubhra Jain: Um, also forced by necessity a little bit because we spend more than any other country on healthcare. Um, 18% or something of our gdp, which is crazy given the outcomes we have. And we've just hit the ceiling on that. There is. Just, there is no slack left in the system for us to continue to provide fee for service care and keep charging for it and increase that, um, dollar amount spent on healthcare.

Shubhra Jain: And so driven by that necessity, but also enabled by this data infrastructure that we now have access to, we are seeing both existing organizations like Pair. more traditional ones, but also [00:25:00] new kinds of organizations like ACOs and risk taking providers Step Up and Tructure value-based contracts in various shapes and forms.

Shubhra Jain: And we think that that is certainly a trend that will continue. Um, one. . Other big trend that emerged during Covid was telemedicine and there is more adoption and, uh, openness of telemedicine both amongst physicians and amongst consumers. Um, we think there will be a second layer of startups that will. be able to leverage the data that we are getting from telemedicine.

Shubhra Jain: So, so far it was incredibly hard to really know what goes on in a physician patient interaction because of all the privacy laws in HIPAA and everything. And those laws are all still existent and should be. But um, I think there is just more data [00:26:00] on various things even. The traffic of those interactions, but also the details of those interactions with medical ascribing becoming more common with there being more telehealth visits.

Shubhra Jain: And there are a lot of things that don't get recorded in the E M R that that patient physician interaction is a valuable source of information and only some percent of it makes it to the ehr. With these interactions happening more virtually in their medical ascribing being more pro, uh, commonly available and used, we think that there will be this wealth of data that is created and a series of startups that can leverage that, um, to provide better care

Rishad Usmani: delivery.

Rishad Usmani: Those are all great table beans, and I completely agree. I'm banking on a hybrid home care model. Um, especially hospital at home I think will be massive as an lp. Tell me about the [00:27:00] criteria you use to invest in funds and talk to me about. If a fund came to you and say, we will structure our fund over 20 years to better align with value creation in healthcare, how would you react to that statement, Shuber?

Shubhra Jain: Um, so in terms of our criteria to invest in funds, we try to invest in funds that can be synergistic with our direct investing strategy. So just as a recap, our direct investing strategies essentially series A all the way to i p o lead or co-lead rounds, take board seats. and where high conviction investors will look to put a decent amount of money to work in a particular investment and run a pretty concentrated book.

Shubhra Jain: So we're looking to invest in funds that. are synergistic with that strategy and can be good deal flow channels for us, essentially good feeder funds for us. Um, and not in the traditional sense though, because we are not the LPs that want access to [00:28:00] co-invest in SPDs. Um, we don't do that. Uh, we will come in and lead the round of one of your portfolio companies as they're coming up for their next raise, which.

Shubhra Jain: everybody values, especially in this environment, the portfolio company is happy. They don't have to run a full process. The VC fund manager is happy we can mark up their companies and we are happy because it's a deal for a channel for us. So it's a win, win-win situation. . So what does that mean?

Shubhra Jain: Realistically? Essentially, comp funds that are focused on investing in healthcare technology companies in Pree or seed stage. Uh, we don't do therapeutics and we don't do services. So anything that has a technology component could be software or hardware. So we will do diagnostics, devices, digital health, health it.

Shubhra Jain: So if you're a seed, pre-seed focused fund investing in any of these categories, that could be a potentially a good fit.

Rishad Usmani: and are you

Shubhra Jain: looking, you asked a second part of that question.

Rishad Usmani: Yeah. The second part was, [00:29:00] um, there's something I struggle with because I feel like the, the cycle of companies in healthcare.

Rishad Usmani: To go from idea to product market fit to growth would be 20 years, which doesn't fit the traditional venture cycle of a 10 year fund return. How would you

Shubhra Jain: It's, I, I, I don't think it's 20 years for. for a healthcare technology company today. Now it was 20 years for companies like Ooma because they were the first generation of healthcare tech companies being created.

Shubhra Jain: They sort of chartered the path for what it does it look like for to have a healthcare technology company. But I think today we are, we're seeing that accelerate a decent bit. It's still not the same as technology venture capital cycles, right? Like it's not the three to five years. Yeah. , but I'd say it's coming in between five to 10 years, uh, at this point from inception to taking a company public or having a meaningful exit if you execute it right.

Shubhra Jain: And we're starting to see some [00:30:00] examples of that happen. Um, so hopefully if you really are a healthcare technology business and you're not developing a drug and you're not building a variety of clinics around the country, then um, I think it should fit somewhere in that five to 10 year time. .

Rishad Usmani: And what do you look for in gps?

Rishad Usmani: What, what do you look for in terms of, are there previous founders? Do they have a deep finance background? Um, what is the rough criteria used to evaluate them? Yes.

Shubhra Jain: So because we're investing in the seed precede focused funds, I think the finance background is not really as material or important, uh, a.

Shubhra Jain: People who are investing in those stages really are investing in companies before they've built their financial model for the first time. So, um, there's very little financial analysis that can be done. Um, but what matters is, , do they understand [00:31:00] how startups work? Specifically? Do they understand how healthcare startups work because they're a little bit different.

Shubhra Jain: Um, do they have a network to source great deals from? Do they have the reputation in the industry to be able to get in and win the right deals? Uh, cuz it's competitive out there. Um, and then do they have a measured, disciplined investment? Diligence decision process and their own judgment to be able to stay.

Shubhra Jain: Um, true to what they're promising. Their LP is to not have strategy creep or not have, um, inflated valuations just to show activity and do more deals as we saw a. Firms do in the frothy environment in 2020 and 21, right? Like, so we look for a little bit of that discipline and um, are they doing what they say they're going to do and can we trust them with [00:32:00] that?

Shubhra Jain: Um, and are, or are they going to get swayed by what others are doing and what is going on in the market? So a little bit of that is super important. Um, and then I. I think at the seed precede stages, it's about having a good intuition for both the market and the founder. Um, so do they have a good sense of where healthcare is today?

Shubhra Jain: Where is it going? what is needed in terms of startup innovation to help us cover that gap, um, and are able to find and bet on companies that are working to fill that gap. Uh, and do our view, does our view of the world there align with theirs?

Rishad Usmani: There are people who would argue for hype investing, for saying, if Andres invested around, get in, if Sequoia invested around, get in, and just the value of that brand name will.

Rishad Usmani: Start up to, and I, I don't [00:33:00] buy this completely, but to success. What are your thoughts on hype investing? Is that something you're completely against or is that a signal for success to an extent.

Shubhra Jain: Yeah, so again, it's one of those things. Healthcare is a little bit different from generalist investing here. I think the value of those brand names investing in healthcare is a little bit less, and the market recognizes that, uh, as opposed to a consumer startup or a B2B SaaS startup.

Shubhra Jain: Um, . So, so that's the first caveat. The second one is, it depends on what type of an investor you are. If you are a small fund that co-invest alongside marquee funds, and that is what your investment thesis was when you started the fund, that's what you pitched to your LPs. I will manage, uh, to get into the same deals as Sequoia, and that's my edge.

Shubhra Jain: and your LPs were happy with that, and that's why they invested in your fund, then that's great. [00:34:00] Um, but if you're not, if you went to raise the fund with the hypothesis that I will figure out what the best companies are and here is why, because I have a differentiated view on the market or I have a proprietary deal funnel, um, , when you go back to raise the next fund, it will be very apparent what strategy you actually followed.

Shubhra Jain: And if that, that's what I meant in my earlier answer about, that's something we look for, um, in terms of are you staying true to your strategy? Um, because that fosters trust over time. Um, in terms of it being a predictor of success? To some degree it is, because, let's face it, there are thousands and thousands of companies and there is already some degree of filtering that happens.

Shubhra Jain: Obviously, it is an indicator of something might be good [00:35:00] if one of these brand name firms bagged a company. They must have done their diligence. , but the, the failure rate of startups is so high that even then that's not a guarantee of success. And if you are a manager who believes that you have a differentiated viewpoint and you know something about the industry that others don't, or you think differently about something, then I would rather bet on that.

Shubhra Jain: Uh, I would rather bet on your own conviction. of what someone should be building and what you want to be backing than some other firm doing. You don't know what work they did and you don't know what reason they backed them for. Um, so that's how I would think about it. This is something I

Rishad Usmani: struggle with.

Rishad Usmani: Given the high failure rates for early straight startups, is it even possible to have high conviction or that just means you're missing something because [00:36:00] inevitably, at least half of your high conviction startups will fail? That being said, should I invest at 80% conviction or should I still keep pushing myself to find a hundred percent convict?

Shubhra Jain: Yeah. So this is a, this is a genuine dilemma of any early stage investor and, um, it's always possible to talk yourself out of any deal. Um, no matter how good the deal is, you can always find reasons why the company won't succeed and you can talk yourself out of the deal. So what you have to venture as a game.

Shubhra Jain: it's the upside versus downside is skewed. Um, you can only lose one X, but you can make a hundred x and hence you have to think about where does this go? If it goes right, so assume that it goes right and then say, , would this be a hundred x if it goes [00:37:00] right, or am I looking at a two x or a three x if it goes right.

Shubhra Jain: Um, because if you are, then that doesn't, then that doesn't satisfy the power of law for investing in venture. So you have to focus, you have to be an eternal optimist to be an entrepreneur, but also to be an early stage investor, you have to focus on. What can go right And if it goes right, where can this get me?

Shubhra Jain: Um, rather than, these are the seven things that can go wrong. Now, that doesn't mean you ignore the things that can go wrong. You should still do that analysis and figure out what are all the things that can go wrong and then you work to mitigate that.

Rishad Usmani: How deep are you going here? Depending on the vertical you're investing in, SaaS, biotech, pharma, that could mean the company has to go from $0 in a R to 500 million.

Rishad Usmani: Are you actually mapping that out? Are you seeing, you know, this is what they need to do to get to the say a hundred million [00:38:00] dollars in a R and what their path to that looks like? Because I feel like that's the way I would talk myself out of every investment. . Is that something you're doing?

Shubhra Jain: You can't do zero to a hundred because here's the problem.

Shubhra Jain: There's this value of death in between, which is achieving the product market fit. So they have to go from zero to something in order to prove first that they have built something. First of all, they have built something because a lot of products fail just in terms of technological risk of getting built.

Shubhra Jain: Second, people want that thing. And third, there are people which are often different people in healthcare who are willing to pay for that. and then they're able, so, so that's the first value, which is the product market FA value. And that goes from zero to, for lack, I don't think there is a number, but like maybe a 1 million in revenue, right?

Shubhra Jain: Like at that point you've proven that you've built something that people want and there is someone who's willing to pay for it. . Now the next question becomes the unit economics. Like, are they [00:39:00] paying for it at a, in a, at a scale that the margins are sustainable for the business and you can get to cash the positive with that.

Shubhra Jain: Um, so do you have an engine that is, has positive unit economics? Uh, and that's the second valley. Um, and so maybe from pick a number to maybe 50 million in revenue. Million, 40 million in revenue. That's the value you have to cross and get to the positive unit economics. Once you've gotten to positive unit economics, then you are the master of your own fate.

Shubhra Jain: Um, then you can scale and you're scaling with an engine that works instead of just throwing venture money into it and burning. Um, , I don't think you can map out everything, uh, in terms of zero to a hundred million in revenue. But depending on, again, what your investment mandate it is and which risks you feel comfortable taking, some people might say, we, we feel comfortable not, we don't feel comfortable taking the technology or product risk.

Shubhra Jain: So we wanna see that you have at least built a product, [00:40:00] especially true for hardware products. Um, some people say, we don't wanna take the product market fit, fit, risk. We wanna see that you have some revenue. There is somebody who's willing to pay for what you have built. Um, . And then there are people more on the growth equities side of the world who say, you need to have a positive unit.

Shubhra Jain: Economics, we need to see that you have something in EBITDA before we can invest. Um, so it depends. Most venture capital firms, I would say between like series A and series C or D would lie in that product market fit unit, economics place where they'll say, , um, depending on how early they go. We won't take the product market fitness, but we will help you figure out the journey to positive unit economics and we'll help you get there by, um, capitalizing you to get there.

Shubhra Jain: Um, so it depends on which risks you feel comfortable

Rishad Usmani: taking. Talking about unit economics. Something I have recently found is, uh, a few founders have come to me and said, as we [00:41:00] scale, our CAC will go down and will be profitable. I don't find that to be the case. Looking at these, uh, especially B2C healthcare companies like Romans and hymns, it seems like they're CAC took forever to go down.

Rishad Usmani: I haven't followed them recently, but it kind of stayed. , they were not profitable based on their cat. Have you found that to be true as well? In the B2B space?

Shubhra Jain: It will not just automatically go down, um, if you don't make any effort for it to go down. And it also depends on how much of your, um, customer acquisition is organic versus paid.

Shubhra Jain: And is that organic portion going up over time? Is there more word of mouth? , is your customer satisfaction score high? Is there a high net retention? So if all of those things add up, then yes, over time cash should go down. . Um, it also depends on what additional growth levers are you employing? Are you launching in completely new markets?

Shubhra Jain: Are you launching completely new [00:42:00] product lines, which will not have any additional leverage from the, your existing business? And in that case, it may not go down. So the answer is more nuanced than just because I have been operational for x number of years. Over time, my CAC will in a linear fashion, certainly go down.

Shubhra Jain: I, I don't think that statement is true for any

Rishad Usmani: business. , what are some mistakes gps make when they're trying to raise from you, and what advice do you have for them?

Shubhra Jain: That's an interesting one. Um, I would say one, not understanding the LP you're talking to, so any background research you can do or just even in conversation, taking the time to understand.

Shubhra Jain: what kind of an LP they are. What is their mandate? What are they? What is their motivation behind investing in funds? What kinds of managers do they like to back? What kinds of returns do they want to see? Is there any sort of strategic motivation beyond the [00:43:00] financial returns? What other value add can you provide to them or they're looking for from the relationship?

Shubhra Jain: doing your homework and getting to know your audience a little bit more. Um, instead of launching into the pitch, the first chance you get, um, can go a long way in fostering that relationship over time and also in helping you position your pitch correctly because there are a hundred things that you could say in the 30 minutes you have, but you can choose to highlight the ones that may appeal to them a little bit more if you had more information about them.

Shubhra Jain: so that's number one. Second, Understanding that it's more of a relationship business than even investing in startups. So even when we invest in companies, we like to get to know them six months to a year before we invest. We almost never just look at a deal and in four weeks we have written a check to them.

Shubhra Jain: Um, just almost never happens for us. And, um, I think there [00:44:00] are firms on the venture of capital side that will do that just because deals move fast and it's competitive. And I understand that. But on the lp. , it's extremely rare to see that. Um, firms like to get to know the GPS over time and understanding that you're going into this with a long-term goal and you're looking to build a relationship.

Shubhra Jain: Um, and having the patience and the mindset to approach conversations in that manner is really important and will go a long way. Um, and eventually you getting a check from that lp. I think the third piece that I see people missing is a lot of gps, especially the first time funds, do not pay significant attention to, or convey in a very articulate manner, their portfolio construction strategy, their follow on reserve strategy, their portfolio construction strategy, how.

Shubhra Jain: Strategy lead to them achieving [00:45:00] that they're targeting. Um, and that's something that I think a lot of people, if you have only been writing angel checks or if you weren an investor at a bigger firm and never really thought about that, but you learned how to source and pick deals, uh, , then guess what?

Shubhra Jain: You're in a different game now. You're building a firm and a fund and, um, portfolio construction, real matters. It's not just about, you can't say all the 10 deals that I'm going to pick are going to be winners. Uh, we all know they're not. Uh, and so how do you underwrite that? There are two

Rishad Usmani: different camps of fia.

Rishad Usmani: There are people who, like yourself, will invest 10% of their fund size per deal and invest in 10 deals total. But there are people who. Invest one to 2% per deal and invest in up to 50 deals, which camp is more attractive to you? Or would you look at GPS from both camps? And what are some particular [00:46:00] questions or some things you would look for in each camp?

Shubhra Jain: So we would index for to the former because we, again, our own philosophy is that we want to have a reason why we invested and it should be a high conviction bet. And we will go back. The gps who aligned with that philosophy, um, who knows something about. Some markets within healthcare, broadly speaking, that we believe is a differentiated viewpoint or they have some kind of a differentiated access to the deal flow in that space, and they're able to make bets that they believe are, have, uh, an advantaged.

Shubhra Jain: Chance of success over just any other startup, right? So we don't do this brain prey strategy, and I don't think we'll back gps that do. Um, also, very few people actually do this brain prey strategy within healthcare. I think that is more commonly done by [00:47:00] generalists, um, for a variety of reasons, which is understandable.

Shubhra Jain: But in healthcare, I think most people, uh, who start. Come from some specific sector within healthcare. Maybe they spent all their life at a payer, or they have really a lot of relationships on the life sciences side, or they have some edge, some network that they're tapping into as they're starting this fund.

Shubhra Jain: And that's what we're investing in it for, um, to get access to that part of the e.

Rishad Usmani: That is very actionable advice. She, Brett, thank you for that. One last question. What is one piece of advice you would give yourself 10 years ago?

Shubhra Jain: More patience. Um, I was always in a rush to get everything done. Um, and I think, uh, that is, Something that just comes with age and experience and having seen a few cycles played out now, um, just being a little bit more centered, [00:48:00] being a little bit more patient, taking the long-term view, continuing on your path and not getting impatient about seeing results every single day or very, very quickly, but believing in the process, enjoying the process, and, um, giving yourself.

Shubhra Jain: The time to breathe a little and to, uh, enjoy, enjoy the journey.

Rishad Usmani: That's well said. There's a strong push and venture for a very strong bias towards action, which can lead to impatient and poor decision making. And I like Adam Grant's philosophy of moderate procrastination as the best path to success.

Rishad Usmani: Thanks so much for this conversation Shuber. I had a lot of fun and we'll have to do a part two as I only asked about half the questions I have here.

Shubhra Jain: Oh, this was a pleasure. Thank you so much for shock for having me and uh, you have a great rest of the day.

Insights from a physician, entrepreneur and investor.

Shrawan is a physician, entrepreneur and angel investor. He is the managing director at Strategy Health and founding team member at PharmStars. I have known Shrawan for a few months now and find him to be deeply reflective, intelligent, curious and open minded.

We talk about:

1. His childhood

2. Decision making

3. The existence of a soul

4. What he looks for in founders

5. Clinical trials

6. And more!

I am thankful for his friendship and grateful for his transparency and honesty in sharing his experiences and knowledge.

Transcript:

Rishad Usmani: [00:00:00] Thanks so much for coming on today, Charvin. I'm really excited for this conversation. I think to start, let's talk about your childhood. There are things we learn from our childhood and are there are things we have to unlearn as we grow up. Talk to me about your childhood and how has it contributed to who you are today?

Rishad Usmani: What are things you had to unlearn from it, and what are things that helped you? ? 

Shrawan Patel: I'm not sure we have enough time to talk about my childhood, but, uh, , we can give it a go. I'll try. I can try and be brief. My childhood, so I'm, if the accent doesn't give it away or hasn't given it away, I'm English by background, so I was born and bred in the uk, grew up in a, in a city called Birmingham, and I'm kind of the oldest of three, which I think probably plays a little bit into me and, and how I am.

Shrawan Patel: How would I describe [00:01:00] my childhood? My childhood was definitely full of ups and downs from a young age, I think most of my family would describe me as quite a difficult child, and it was pretty often that my grandparents would be more than happy to take my brother and sister for the weekend, but would say, you know, Sharon can stay at home with, with you guys.

Shrawan Patel: To my parents, that was fairly, fairly common. Um, you know, whether or not it was, I had some element of attention deficit issues or as I later found out when I was about 13, 14, that I was dyslexic. Um, and so I think, you know, probably a combination of those two things factored in, but I definitely was a bit of a trouble child and.

Shrawan Patel: you know, academically that kind of factored in. So if I read back through my school reports, it's very often that my teachers would say, you know, very abled [00:02:00] child, but just not trying hard enough or not applying himself or, um, all things along those lines. Um, and I think the real thing that changed was when I was about 13, the school that I had subs subsequently started at, had a teacher that was specialized in special needs and thought, oh, maybe actually there's something there.

Shrawan Patel: And so I went and got tested and, you know, I have mild to moderate dyslexia and quite specifically around languages. Um, and in retrospect, I think I can see that the dyslexia has definitely changed the way or has had an impact in the way in which I function and the way in which I see things, the way in which I learn things.

Shrawan Patel: You know, my nightmare as a child, even now to be honest, is being asked to spell something because I spell phonetically. It's like, cat to me is not c a t, it's, that's how I spell, spell in my head. And I [00:03:00] kinda have to go through the spelling and then imagine the word and then read it out, c a t for me to be able to spell something as people expect.

Shrawan Patel: Um, so that's always a bit of a nightmare for me. And being asked to stand up and write on a Flipboard is, is another nightmare. Um, but in, in a way that's a deficit, but has also changed me massively. Imagine being in an exam, writing an essay for an hour, and your writing. You want to write a sentence? I dunno.

Shrawan Patel: Let's think of a word. Discussion, right? The discussion that was happening within the class, nine times outta 10, I'll have no problems writing, spelling the word discussion one time outta 10. Just in exam conditions I might freeze. I, I'll forget how to write the word. And so I suddenly need to mid-sentence.

Shrawan Patel: The class was having a conversation about where, as opposed to having a discussion. And so I think [00:04:00] after years and years of having to very quickly change sentences on the fly has meant that the way in which I think and the way in which I speak has changed, that I'll, you know, naturally think of slight variations on the same theme to match what I'm wanting to say or to match what other people are saying.

Shrawan Patel: Um, and so I think that's definitely been a big thing, things that I've learned. Has definitely been that right? I now know how I learn what I need to do, that if I have someone there to keep me accountable or I have something to keep me accountable, that's a big driver for me. I will book random things or I will set myself a task where someone else is involved.

Shrawan Patel: And for me, that's a really big way of learning. When I started at university, long story short, a lot of my best friends are non-med and [00:05:00] they did electrical engineering or they did chemistry and, and a whole bunch of my friends were studying IT related courses, kind of data science or, or computer science.

Shrawan Patel: And they had persuaded me or had said, oh, you should start to learn to code. It's going to be forever valuable. And so I started off by learning H T M L C S S and JavaScript. and I did the courses, I think like lots of people. But the thing that I did to drive myself was I have all these, I ha I have leather shoes because I was a medical student and I was going to the hospitals and I needed smart shoes.

Shrawan Patel: And I think as I'd started to buy leather shoes, I realized that you should take care of them. That you should get them sold and resold. You should have, um, kind of rubber souls put on them if you want to keep them protected for a long p long period of time. And so I had a cobbler down the road that I used to go to to get my shoes sold.

Shrawan Patel: He [00:06:00] had no website, no online presence whatsoever. So for me, that was my driver. I went into the shop and I said, Hey Matt, you don't have a website? I'm starting to learn how to code. I have a proposition. Would you be willing to let me build you a website? Set up the seo, set you up on Google and. in exchange, if you see an increase in foot traffic, will you do my, my shoes for free

Shrawan Patel: That was my, that was my bargain, right? And I did it right. I went away and I had my little project, and I had Matt, who is now relying on me. That was my impetus to actually do what I had set out to do. And over the course of a month or two, I kind of learned how to tie everything together. And so how to build the front end and the static pages in HTML and c s s and then build dynamic content with JavaScript.

Shrawan Patel: And then how to, I was originally hosting it on GitHub for [00:07:00] free because, like, it was, this was a, a, a cashless exchange. I didn't want to pay for hosting, and so I'd uploaded it to GitHub and set a CNAME page and, and kind of the website was up for free. And then we migrated it over to a, a normal, um, server domain and, and had the.

Shrawan Patel: The dynamic JavaScript elements, uh, added in. So like, I know that that's what I need to push myself. And so I think that's what I've learned over my childhood is I think people often don't know themselves, that they don't necessarily know how to get the best out of themselves. That there's always this thing of as long as you're good enough, then no one pushes you to be better, right?

Shrawan Patel: If you do well enough at exams, but you're very intelligent, how do you know that the way in which you've learned for the exams is optimal for you? All you know is that it was optimum. To be good enough to get that a or to get that a star or a plus in the exam [00:08:00] doesn't necessarily mean that you writing it out a hundred times was the best way of learning it, right?

Shrawan Patel: Maybe you needed to dictate it into an iPhone and a memo and listen it to it, listen to it in the car a hundred times, and actually that would be a much better way of you remembering it. . Um, and so I think the dyslexia has definitely fed into that, that as soon as we found out that I was dyslexic and I had these very specific areas where I had issues with, suddenly there's this whole structure around coping with those and potentially making them work in your favor, right?

Shrawan Patel: Taking those things that are difficulties and turning them into positives. And so I think that's then begun to pervasively spread into the rest of my life and, and how I see things, things that I would unlearn.

Shrawan Patel: it's a good question being, the one thing that comes to mind and it's [00:09:00] topical because of a recent conversation I've had is knowing your self worth. That when I was going through school parti. Pre dyslexia diagnosis. I was constantly being told I wasn't trying hard enough and I wasn't putting in effort.

Shrawan Patel: And on the sports side of things, I ended up leaving school being for US listeners, varsity sports level in a number of sports. But it was almost by happy accident. Right? The coaches didn't even realize that I was playing varsity other sports. I was just kind of the, we need a 13th person or SP's, SP's the 13th person on the list, so he'll go in.

Shrawan Patel: Um, and so I was never like I individually identified by any sports coaches having some degree of very high level of athletic ability. I was kind of just good enough. Um, and so I spent all of my school life and I think even into med school thinking like that. And [00:10:00] it wasn't until really leaving med school, starting to practice the.

Shrawan Patel: I think suddenly things changed that people would say, oh, you are actually quite good at doing this. Or we, you went above and beyond. Suddenly the, the language changes and it changes your confidence and you suddenly realize, oh actually I can do something and I can do something. Well, and you know what?

Shrawan Patel: I've always been able to do these things. I just never have had someone tell me that I can. And that's definitely changed. Like now I know what my self worth is and I know what I can do, what I can't do, and for the things that I can do, I ask for the appropriate value for my time and energy and expertise.

Shrawan Patel: There you go. It's my long answer to that first question, . I 

Rishad Usmani: think knowing your self worth is something we could all come to sooner in life, and too many of us come to that [00:11:00] evaluation in our thirties or beyond. Yeah. Feel free to answer this question with as much or as little specificity as you'd like. Do you think life happens to you or do you think you make life happen?

Shrawan Patel: All right, so I'll, I'll start. My favorite word is, it depends. Um, that is kind of the running joke amongst my friends is if you're ever gonna ask me a question, my first response will be, it depends. And you know, I think this is a prime example. It depends. I think life does happen and there are definitely elements of right place, right time, and feeding into that right skills, you know, is kind of part and parcel of that.

Shrawan Patel: If I think about me, I was in London, I had had businesses before being at med school, but I was in London starting med school, 2000 [00:12:00] and kind of mid two thousands and. I was beginning to learn HTML c s s JavaScript. At that point, I had also started to learn Python, and I think being in London in 2006 seven, having been involved with businesses and knowing some degree of kind of technology meant that I had the right skills.

Shrawan Patel: I was in the right place, and I was there at the right time to begin working with early stage health tech companies, and it was still called eHealth M Health at that time. It wasn't until Health 2.0 came, I think around 2011 or 12 in London, that kind of digital health as a term started to be used. But you know, that meant that I got to know some of now the kind of the OGs of the British Health Tech scene right at the very beginning had I been in, you know, Nottingham or Liverpool or somewhere [00:13:00] else in the country.

Shrawan Patel: there's plenty of technology and plenty of really great ideas being developed, particularly now all over the uk. But at the time, London was really the epicenter of all of it. And so had I been anywhere else, I probably wouldn't have had the exposure or the opportunities that I had. So that's an element of, I made some of that because I had learned to code and I had made a deliberate decision to go to London for other reasons.

Shrawan Patel: I didn't know I was gonna go into health tech at the time, but wait, I made those decisions. But then there was also an element of life happened alongside, right? I, we don't live in little bubbles. We live in this wider landscape. And so it happened that health technology as an industry was beginning to flourish.

Shrawan Patel: It was particularly beginning to flourish in London. Those people in London building these technologies and building these [00:14:00] companies needed the help of someone that understood tech and business, but maybe more importantly was also quite good on the clinical side and could bring that perspective in.

Shrawan Patel: Like, those aren't me building or me making those things happen that happened on the side. But you know, it's kind of a, a clashing of two worlds. So I, I think it's a bit of both and I'm pretty sure I can go through everything that's happened to me and I'm sure we all can and say there are elements of this that happened and could happen because I had done the work, right?

Shrawan Patel: I had learned a skill or I, I'd developed certain knowledge or I had made the move to, to move. I had made the decision to move to a city because of increased exposure to a a particular industry. Those things are on you, you've done those and you should be, you should pat yourself on the back. But then there are other things around.

Shrawan Patel: like random conversations in a bar that happened and you suddenly start chatting and [00:15:00] you realize, oh, there's a connection here. And you have a lifelong friend who then connects you to someone that's not really looking for an open posi, not really looking for a position of to fill a position, but after meeting you says, you know what?

Shrawan Patel: This is the person we need. Life makes those things happen. Can't plan for them. They happen whether you want them to happen or not. I 

Rishad Usmani: agree. There's nuance and complexity in most questions and answers. and Japan is usually a good place to start. . You said you were a difficult child, but you were also the oldest of three and you went to medical school,

Rishad Usmani: Some people would say those things are not aligned. Talk to me about being the oldest and let's go deeper in being difficult. and how did that play out to your journey to med school? I would classify myself as difficult, and I would think [00:16:00] most people should be difficult, as partly it means they're standing up for what they believe in for themselves and being normal is being conformist, which is arguably, uh, damaging as an entrepreneur.

Shrawan Patel: It's How did it, how did it feed him? That's a good question. I'm not sure I've ever thought about it like that.

Shrawan Patel: So I think being,

Shrawan Patel: I don't think any of this happened consciously or deliberately, but I think being a difficult child meant that my parents in particular were constantly looking for ways. to keep me occupied, , and part of that was sports and activities. [00:17:00] And so I, you know, wasn't a bad figure skater and I played, played ice hockey.

Shrawan Patel: Can you, if you can believe it. I played badminton at a high level. I swam, right? I like did all of these things. I think because my parents kind of just like, they actually just wanted to tie me out so that I would go to sleep at a reasonable hour. But, you know, those things actually ended up being really pivotal and, and quite important to making me into the person that I am now.

Shrawan Patel: Right. I still run every day. I'm still playing sports at a high level and you know, There are skills that you pick up in all of these things that you then pull into other parts of your life. Everything is related in some way or form. It's, that's my philosophy. You can be a, a medic and be a doctor, but there are skills that translate to other things.

Shrawan Patel: Medicine doesn't happen in, its, again, own [00:18:00] little silo that you can take one concept and apply it to lots of other places. And so I think the things that I'd learned as a child then helped me work in teams, helped me to understand the importance of training, for example, right? I remember playing badminton and we would have these sessions.

Shrawan Patel: There's this thing called shadowing in badminton, which is where you're pretty much just practicing footwork. So there's, you have your record in your hand, you're on the court, start in the middle, and then you're doing footwork over and over and over again. . And the reason why you do that is so that when you are in, in a match and you're fighting for a point, if the shuttle goes into one corner, you don't have to think about your footwork.

Shrawan Patel: It just happens because you've spent the last five years of your life, two, three times a week spending an hour just shadowing your footwork. And so you kind of take that and you apply it to somewhere else and you say, okay, well how do I get good [00:19:00] at this particular thing? Is that something that would benefit from a shadowing style of doing something, uh, doing it right?

Shrawan Patel: Do I need to practice it over and over and over again to then make sure that it becomes muscle memory or kind of knowledge, brain memory? Um, you know, think about how we learn for medicine. It's all pattern recognition. The more patterns you see, the better you get. Now, do you need to understand those patterns?

Shrawan Patel: See those patterns? Before you can then pick them up. Do you just need to see as many as you can? Do you need to be more conscious about it? Like there are different layers and complexity to the onion. Um, and I think the, that kind of being a, being a more difficult child definitely meant my parents did things that then impacted my life further down the line.

Shrawan Patel: Um, how did it lead me to med school? That I'm not really sure. I think actually the big shift [00:20:00] was at 13 suddenly being told, oh, you know, it isn't that you aren't trying, it's that actually there are things you can do. You, there is an issue or there are, you know, what's the word? There are certain areas, certain things that you are always going to find difficult.

Shrawan Patel: There happen to be ways in which you can get around that, that changed. Going back to your question, do you make your life or does life? Present you with opportunities, right? That was one of those things. I happened to go to a school where there was a teacher that specialized in or was doing more and more specialization in educational needs and highlighted me as someone that may benefit from being tested, right?

Shrawan Patel: Different school, different time that may not have happened, and my path, my journey might have been very different, but as soon as that was [00:21:00] recognized, suddenly my performance started to get a bit better. And so academically, I was then performing at the right kind of level. And I, I'm definitely the kind of person that tests well, put me in an exam.

Shrawan Patel: As long as I've, you know, done enough work, I'll do pretty well. And so during the year, I'd often be told off my teachers and say, oh, you're not trying hard enough, da da da da da. Thankfully the British system relies heavily on exams. It's a big component of your final grade. Because I'm a good test taker, it meant that academically I stayed kind of at the right level to then apply for med school and, and subsequently get it.

Shrawan Patel: I'm not sure I completely answered your question, but Yeah, it gives you a little bit of a flavor. . No, 

Rishad Usmani: you did. We can talk about standardized testing and education. Let's keep that for later cuz I have too much to say about that and most of it is negative . Okay, [00:22:00] let's, I'll ask you, uh, a shorter question.

Rishad Usmani: Why medical 

Shrawan Patel: school?

Shrawan Patel: It's a good question and I don't think I've ever really figured out the exact answer. I remember. So when I was at med school, later down the line further, Further through med school, I began doing, or being part of the interviews for med school. And one of the questions that's very typical in the UK is why do you want to be a doctor?

Shrawan Patel: And one of the things that question always graded me because, you know, by that point I realized I had no idea that I wanted to be a doctor, specifically the operative word being doctor. Because a doctor being a doctor is a profession. And I don't think at 15, [00:23:00] 16, which is really when you start making that decision in the UK I had any idea of what the profession of being a doctor was like.

Shrawan Patel: What I did know is that I wanted to go to med school. And so I kind of pushed in the interview committees to change our question, our stock question from why do you want to be a doctor to, why do you want to go to med school? And it suddenly opened up people's ability to answer the question. I think more truthfully, because if you get asked why do you want to be a doctor and you don't know the answer, you automatically start confabulating.

Shrawan Patel: You start making something up, or you start reciting the answer that you think the person needs to hit. Whereas if you get asked, why do you want to go to med school? You can be truthful about it and you can say, well, I want to go to med school. So for me, I had, in terms of my A levels, so my final exams or my final subjects, I was doing maths, [00:24:00] chemistry, biology, and fine loved biology, enjoyed chemistry, loved fine art, and.

Shrawan Patel: Enjoyed maths. I think I have a love hate relationship with maths. I enjoy maths now. I think I didn't really enjoy maths quite so much back then, but on the biology and chemistry side, I really enjoyed biology. I really enjoyed human biology. I knew though that I didn't want to study biology as a pure subject because in the UK it's not a liberal arts system.

Shrawan Patel: You go in, you pick your subject and you started at 18, so you're doing biochemistry or straight biology or biomedical sciences, right? You're doing a a specific degree in a subject. And so I knew then that I didn't want to do a pure biology degree or a, or a subset of biology. I knew I didn't want to do chemistry as a pure degree, but I enjoyed both subjects.

Shrawan Patel: I enjoyed art and I [00:25:00] enjoyed humanities and I enjoy being with people, part of teams having a job that. Kind of active or doing a degree that was active and you were on your feet and doing stuff and, and interacting with people. And as soon as you start to lay these things out on a piece of paper, almost like a checklist of what am I looking for in a degree, you whittle the choices down pretty quickly to vet re science at, I think takes a lot of those boxes.

Shrawan Patel: Dentistry, medicine, nursing, school, physician's, assistants, you know, as we now know them, that wasn't a degree back then, but is now. Right? So you start to end up with these mostly health related degrees, professions, and you know, I will be very honest, my grades were good. And so there's definitely an element of, out of all of those things, what's the best that I can [00:26:00] choose.

Shrawan Patel: And it kind of ends up being veterinary science, dentistry, medicine. Didn't wanna work with animals, didn't want to work with just teeth. And so I'm like naturally left with a final option. Medicine. In retrospect, that's probably the subconscious thinking that was going on, the truthful thinking that was going on.

Shrawan Patel: Why I went to med school. I'm not sure. I knew at that time that I wanted to be a doctor. As it happened, I loved practicing. Still miss it. To this day, I'll be moving back to the UK soon, and when I do, there is a high chance that I'll reinstate my license and practice at least a little bit because I loved it, really, really enjoyed it.

Shrawan Patel: But did I know that at 15, when I first made the decision or began the path to med school and at 18 when I started, no, not in the slightest. , 

Rishad Usmani: what advice would you give your 15 year old self if you [00:27:00] could go back in time?

Shrawan Patel: Uh, what advice would I give? It's tough. I think if I, if I were, the one thing I would have wanted is to have found a mentor in some ways, or a, a more senior figure that could have given me some good advice when it came to making some of these big life decisions. Now, I say that, I say that that's something I would've liked.

Shrawan Patel: I don't think that's advice I would give myself as a 15 year old, because knowing the environment and the people I was surrounded with, I don't think there is anyone in there in my network that could have been that person, but my parents. Gotten green cards, and my parents moved to the States pretty much as I started med school, but that process began a little earlier, and so I knew that they were [00:28:00] going, and so I had applied to US schools, US colleges.

Shrawan Patel: I had a bunch of very good offers and the advice given to me was I had these offers at Imperial and a few other universities in the UK for straight medicine. So the advice was you should choose one of the UK universities because you'll go straight into med school and you'll come out with a medical degree, and then you still have a green card.

Shrawan Patel: You can go to the States. The reasoning for that was if I go to the States, you know, I had a offer at Berkeley, nyu, Yale. Even if I'd gone to tho any of those three, I'd still only be doing a bachelor's and then I'd have to apply for med school afterwards, and there was no guarantee I'd get it. , like, now I know that actually that's probably not the best advice to have given , but there was no one I had access to at the time that would've told me any [00:29:00] differently.

Shrawan Patel: So I think now I know that, you know, within my network and for my kids, I'll always be looking out for people that could help and provide some insight into some of these big life decisions. So it's not really advice because I, I could say it to my 15 year old self, but it wouldn't, wouldn't make a difference.

Shrawan Patel: Um, but I don't regret anything. I, I'm very happy where I am now. I think part of regret is making a decision that you, or making decisions that you regret, but realistically, in pretty much all the decisions I've made in my life, if I go back, Were given the same decision to make a hundred times over, I would've made the same decision a hundred times over.

Shrawan Patel: So if that's the case, why would I regret the decision? Because there's no scenario where I would've done anything differently. Um, and so I don't regret where I am now. Therefore, I [00:30:00] think I'd say to my 15 year old self, just, you know, keep enjoying life and everything will be fine. It's a long road, but everything will be fine.

Rishad Usmani: I'm happy to hear that. Shava, let's come back to the present as a question that came to me as you were talking. If you could pick a career knowing you would be successful. So if you're an artist, you're rebrand. If you're, uh, composer, you're a Mozart. If you play basketball, you're LeBron James. You know you're going to be the top of the game.

Rishad Usmani: What career would you pick?

Shrawan Patel: Oh, we're getting into fantasy now. What would I want to do? 

Rishad Usmani: So I would be an artist. I would be an abstract painter. Similar to Montera or Van Gogh and I would paint all day and lose track of time and humanity and being a person altogether.[00:31:00] 

Shrawan Patel: Okay. So I think I would love to do that. I'm going to be, this is going to be the most, you can start with underwhelming answer, I think, or think you're getting a laugh at this answer. You know what? I actually don't think I would do anything differently. There are lots of things I would want to do and I would love to do, but I think for short periods of time, if I were LeBron James, I was playing the highest level of basketball, one of the greatest in the world.

Shrawan Patel: I'm not sure that I personally would. The pressure that LeBron James feels every game that he plays. And it's not just the pressure that he feels during the game, it's that when he goes to dinner with his wife, the paparazzi outside, let's 

Rishad Usmani: say, uh, let's say Lee Chong, we or Linda let, let's say a badminton superstar.[00:32:00] 

Shrawan Patel: But see, even fe, like even badminton, I love playing and I love playing now, and even hockey I, that field hockey is my primary sport nowadays. I love playing it, but it tickles, it ticks a couple of boxes and it tickles a couple of things for me. But, you know, actually the, the way that I've set my life up now is that I run a business or technically part of two businesses, they.

Shrawan Patel: One of the, you know, without tooting horns, farm Stars for example, is, is the premier accelerator for companies trying to break into the pharma space. There is no one that can compete. We are the best of the best and at Strategy Health on the consulting side, we do software as a medical device. And there aren't that many companies that do do what we do or have done what we've done.

Shrawan Patel: Like we are maybe not in LeBron James, but you know, we are [00:33:00] a Lakers player level in the industries that we, we play in. But you know what? I get an evening when I can go play hockey and I have weekends when I can paint and draw and I can go for dinner without being bothered by anyone. But I still get respect in my professional life and I still feel.

Shrawan Patel: Value. I feel like I'm creating value. And you know, those are the things that are actually important to me now, is that I'm doing something that I want to do, that I have autonomy in what I do and how I do it. That what I'm doing brings value. Did I say that? Think I said that already. Um, and I get to do lots of things.

Shrawan Patel: I want to play sport. I want to paint and draw. I want the sculpt. I want to have [00:34:00] a good professional career. I want to have time with my kids, time with my wife. And those are the things that are important to me. It's what I want from, from a career. And, and you know what? I'm lucky. I ha I, I have that. So yeah, it'd be nice to be LeBron James for the day.

Shrawan Patel: It'd be nice to be Rembrandt for the day. But I think to feel and, and experience what it might be like, I'm not sure that I would want to do it full-time. , 

Rishad Usmani: I will refine my answer based on your answer and for similar reasons. I think, uh, more experience I gain. And that's a nicer way of saying the older I get, um, , the more I value balance, the more I value spending time with my family.

Rishad Usmani: And I think art is something I can see as losing myself in and there being nothing else in the world. And I think that is a damaging way to live even though you [00:35:00] might produce things that live on forever. Yeah. It's not fair to myself or my family. 

Shrawan Patel: I think it's going back to that knowing yourself bit, right?

Shrawan Patel: The, now we call it mindfulness. Now it has a name that's in the mainstream mindfulness. So we get told to do mindfulness because if you do mindfulness and you're focused on. One particular task and the action of doing that task, it takes everything away, right? It let's the rest of the world just drift off and all the worry and all the doubt and the anxiety, it gives you some respite, which means that when you suddenly get focused back on the rest of life, you've had some respite, you've had a chance to relax and breathe, and so you can just tackle it all with a fresh head, right?

Shrawan Patel: I have unknowingly been doing mindfulness for the whole of my life. [00:36:00] You know, I can't reach it, but there's a little R two D two metal sculpture up there that my sister bought me for Christmas, and it's these tiny little ity pieces of metal that you have to bend. And I have, you know, an old little pair of, well, these ophthalmology tongues, but, um, like little.

Shrawan Patel: Pair of, uh, tweezers and you have to use them to just bend the pieces of metal and thread them in. And you know what, that was my little evening hobby, and I was doing that at midnight. One in the morning. I was maybe midway through a document, and you know what I thought bad enough, just going to take my mind off it.

Shrawan Patel: And I had this little sculpture that I put together. And there are lots of things like that. I, I, something, one of my fun facts that's on the Web Farmer Styles website is that I sew and I, I can make clothes. And so I have lots of [00:37:00] these little projects in the, in the closets of shirts that I am altering or making or a pair of, almost finished, a pair of gloves.

Shrawan Patel: And those again, are things that I'll just do in the middle of the night. When can I have had enough? And it's mindfulness because, I'm having to really concentrate on a very specific task and I can't think about anything else. Um, and you can get that from your job, but you don't need to do that a hundred percent of the time, at least not for me.

Shrawan Patel: Being able to do it every couple of days is enough for me to stay sane and enjoy the other things in life that are happening. And so, you know, that's kind of, I guess, how I've built my life up. And I know me that I have these little projects that are all in various stages of, [00:38:00] of completion and over time, one by one by one, they get completed and I'll move on to the next thing.

Shrawan Patel: So it might be a drawing, it might be a painting, or it might be this little R two D two sculpture or, or a shirt that needs altering. Those are my mindfulness moments. I don't need that necessarily from a job. , but I do know that I need it every now and then. So that's how I built my life. 

Rishad Usmani: I agree. I I, I don't think we spoke about this.

Rishad Usmani: I did AK a while ago, which is a 10 days long meditation. Mm-hmm. , and I'll talk about in detail in a later video, but being able to sit in stillness by yourself in your own presence is incredibly important. When I meet people, I ask them certain questions to categorize them. , this is something I need to stop doing, but I want to categorize people and to a strong bias or proclivity to action or a strong [00:39:00] bias or proclivity towards planning.

Rishad Usmani: And I won't ask the questions. I ask them, cuz this, this is not a test , but which category do you think you fall in? And do you think that category is innate or learned? 

Shrawan Patel: Again, it depends.

Shrawan Patel: If I think about me making decisions, it'll be, it'll be a mixture of both. I'd say my initial reaction is towards AC action. Maybe it's not the right word. I think it's more about actually how you, how you approach something. I'm very focused on, or a lot of how I approach things is based on pattern recognition.

Shrawan Patel: My gut over the years has gotten better and better and better, and as I see more things, [00:40:00] experience more things, my gut feeling continues to get better. And so if I see something or need to make a decision, I will first just think, what is my gut reaction? and there are times where my gut reaction will be very strong for a particular type of decision, right?

Shrawan Patel: Either buy this or don't buy this, or this seems fishy. We need to take a step back and look at, look at it in more detail, or all of this seems to check out. Let's just go for it. So we don't miss the boat. Like I'll go to my gut and my gut will tell me strong strongly, one way or the other, or something in the middle.

Shrawan Patel: And if I don't have a strong gut feeling, then I'll go into planning and analytics mode. And I maybe do it a bit too much. Like I'm very, very pragmatic in, in how I see things is very analytical, but that [00:41:00] always follows or proceeds gut. Which will dictate whether or not I just do something or don't do something.

Shrawan Patel: And so there are lots of things where I've just made a split second decision, oh, you know what, let's, let's just do that now. I dunno why I can't, you know, I'm sure if I were to take a step back and list it, I could come up with a hundred reasons why I'm coming up with that decision. But my gut tells me that that's the right decision.

Shrawan Patel: So I go with it and I'm constantly trying to think back at decisions and experiences to just make my gut better, because that makes me make better decisions more quickly. Um, and so, again, I don't think I really answered your question . Um, but it would be gut feeling first, strong, yes or no, go of it. If it's somewhere in the middle, take a step back and think through it in more detail.

Shrawan Patel: I think that's [00:42:00] barely, I think that's nature. Sorry. I think that's nurture. I think I've learned that over time. Didn't my gut today is better than it was yesterday, which is better than it was a year ago. I don't think that's, I think there may be some nature to it, right? There's probably some proclivity that's a bit innate, but I think we can all get there.

Shrawan Patel: Think about med med. Think about medicine. You're a gp, you're a pcp. Someone comes in through the door. There's a, I remember one of my first Instagram posts was, uh, a, uh, a question, an E M Q question. Can't remember exact specifics, but it was something along the lines of say 23 year old Indian male comes in with a cough and then, you know, what's the diagnosis, uh, for you on the spot?

Shrawan Patel: Oh, like just in Indian male, 23 chronic cough. [00:43:00] 

Rishad Usmani: I'm tvb is like, I'm zooming it, trying to lead me towards that. But basically prevalence, I would 

Shrawan Patel: say, but it just like, it doesn't need to be okay. The extra information will give you more information. He, you've done an chest x-ray and you see these capacities in the, in the, in the apex of the lung.

Shrawan Patel: Um, that, okay, now you have your answer. But the thing is, is that as medics, if you've got 10 minutes to see a patient, from the moment they step through the door, you begin assessing them and you begin ranking potential differential diagnoses. If they're male, more likely to be certain things, if they're female, more likely to be certain things.

Shrawan Patel: If they're young, female, more likely to be other things. If they're. Young, white female, more likely to be other things, young, black female, more likely to be something else. Right? And you are not discounting anything, but you're taking all the possible differentials [00:44:00] and you are ranking them. And every question you ask is about getting a better top couple of ranking, like differentials.

Shrawan Patel: We are using our guts. Like we're not sitting there thinking, okay, this is a 23 year old white female or a black female. Okay, this is more likely. Okay. Let's ask about why she's, is it gut or 

Rishad Usmani: is it 

Shrawan Patel: pattern recognition? I think it's both, but they're not, are they not the same thing, but you are relying on your gut, your gut feeling is that unconscious, subconscious ability to pick something up.

Shrawan Patel: I don't think that most PCPs or gps are going through every single differential. What they're doing is they ask a couple of leading questions, open questions, and as soon as they get those answers, the differentials start popping in their head. Right? That popping of a differential in their head. Yeah. Is that gut feeling?

Shrawan Patel: You know what? I think endometriosis is more likely to be the [00:45:00] problem here. Let me ask a couple of questions to start seeing if that's true. Now it becomes a conscious decision, right? You're asking very specific questions to rule that diagnosis in and rule other red flag issues out. But when you like, do you not?

Shrawan Patel: I think a lot of doctors get that initial feeling, oh, actually I think I know what's going on here. That initial feeling is your gut feeling, and that's learned. We've seen it so many times. We've read it so many times. We've gone through four to six years of med school and we've had all these questions, and what they've been doing is just teaching our gut to be better and better and better.

Shrawan Patel: Right? Our gut is not just a random thing that just pulls things out of thin air. It's our gut is based on lived and learned 

Rishad Usmani: experience. What's the difference between gut feeling and 

Shrawan Patel: intuition? Same thing for me. I think gut feeling and intuition are, are synonyms of each other. Like your intuition is that this is the right [00:46:00] decision or not.

Shrawan Patel: Your gut feeling is that this is the right decision or not. This synonyms the same thing. 

Rishad Usmani: This gut feeling and intuition is what a lot of people feel distinguishes us from ai. If all it is is pattern for ignition, can AI be human?

Shrawan Patel: Can it act like a human at some point? I think most probably, yes. I'll, I'll ask 

Rishad Usmani: a more esoteric question. Do you think we have a soul or are we billions or trillions of synapses just firing randomly? 

Shrawan Patel: You, you'll get my pragmatic science answer. We are bags of flesh enzymes, proteins, water ions. We live our lives and I think some people don't [00:47:00] like to think about death and, and what happens afterwards, but in my mind and when we are dead, that's it.

Shrawan Patel: Right? There's, there's nothing, I don't think there's anything else that it seems incredib. What's a word? It seems almost impossible that life could have sparked in the way that it did. But when you start to realize that the actual time involved and how vast that is, suddenly you start to realize that we as humans just aren't built to understand certain things.

Shrawan Patel: If you ask someone, you know, there's that common thing you see on TikTok videos, Facebook videos of someone being told, okay, if you take a hun take $1 bills and you have someone that earns a hundred thousand, how far do those bills go? And it's, I don't know, let's say like [00:48:00] a mile, hypothetically. If you now take a millionaire and take those $1 bills, how far would it go?

Shrawan Patel: And people will say, well, if it's one mile, then. one mile's not a good answer because it, it expands out. But, you know, let's say 600 meters, maybe, you know, a hundred miles, but the actual answer is halfway around the world. And then you go to a billionaire and you say, okay, how many, how much would tho those bills go?

Shrawan Patel: And people say, oh, all the way around the world when actually it's to the moon and back. Right? I, it's just our ability to understand the size of things in relation to others is really, is not actually very good. Right? We're good at small scale things. We're good at assessing something that's one centimeter to something that's a meter.

Shrawan Patel: But things like perspective and like even just her ability to quantify stuff, when you start talking about millions, hundreds, millions, [00:49:00] billions, we have very poor understanding of kind of just how vast those numbers are. . So actually if it takes 3 billion years for, you know, things to be right or a basic enzymatic pathway to begin, or a, uh, you know, like a TP pathway for energy creation.

Shrawan Patel: Yeah, 3 billion years, like when you actually think about, or 4 billion years, or 8 billion years, whatever it is, when you think about how long that is, actually probably doesn't, it seems less in uh, less insane of an idea. Cause you also only need it to happen once and then things can begin to grow. And then also going from first pathway to sell takes another billion years.

Shrawan Patel: And when you, again, think about how long a period of time that is, you suddenly realize, well actually I can see that through trial and [00:50:00] error. If it's, if it's happening multiple times a minute or even a second. How many. Variations. Have you gone through over a billion years? I, one of them is gonna stick at some point.

Rishad Usmani: Yeah. I think, uh, our, I agree. We are terrible at quantifying larger numbers. I think a million seconds is 12 days and a billion seconds is almost 40 

Shrawan Patel: years. Yeah, it's exactly. And like, those kinds of things help us realize how bad we are at knowing the size and scale of things. There are some things we're good at, and as humans we're built to do, there are other things that we as humans aren't built to do or we, we are built and built in a way that makes us pretty poor doing them.

Shrawan Patel: So, in terms of a soul, I, I don't think that we, we have a soul in the traditional. . I think we as individuals [00:51:00] have an essence, which maybe you could call a soul, but I think that essence is really what kind of makes us as individuals. But that's how our synapses and our neurons have been arranged. That as a child, you have all these neurons, they're all firing in multiple ways and in all these loops.

Shrawan Patel: And as you grow, you shed a lot of those pathways and you tailor those pathways to make a functioning adult. And even as an adult, you have, you have plasticity in your brain to be able to adapt and change. And that's really the essence, right? It's that pattern of firing neurons in your brain and in your body.

Shrawan Patel: That is you. There is no one else, and there will never be someone else like you. Is that of souls and essence? Is it just. And, I dunno what you want to call it, but sol in the traditional sense, I personally am [00:52:00] I, I'm, I'm not a believer, or there 

Rishad Usmani: will be no one like you until we map out your synapses and replicate you.

Rishad Usmani: At which 

Shrawan Patel: point, I think even then it's difficult because nothing happens in isolation. So your synapses, you can map out your synapses, but within your synapses. Now I'm forgetting my neuro and my neuroscience, but you know, you have, you have your neurons, but how those neurons actually structured will make a difference to how an electrical current passes through them.

Shrawan Patel: So you can map them out and you can build it, but how those neurons react based on how much water you've drunk during the day, for example, or how much you've eaten. Whether you've gone for a run the day before, those make a difference to how your neurons act. [00:53:00] And unless you spend time mapping out the specifics of how your neurons act to different scenarios, you won't be able to necessarily recreate that person.

Shrawan Patel: And even if you do spend whole lifetime mapping out, okay, if someone's dehydrated, how do their neuron firing patterns change? If someone is, has starved for a day, how do their neuro patterns change? Even if you spend a lifetime mapping it all out and understanding it, they'll still be edge cases where you haven't mapped out that specific scenario, or there'll be, you know, gaps or holes that you haven't quite filled in building this knowledge base that you'll miss.

Shrawan Patel: So I think actually as individuals, You'll be the one and only of you.

Shrawan Patel: The 

Rishad Usmani: realization or the acceptance of the [00:54:00] randomness of it all can be either incredibly freeing or incredibly scary. Hmm. For me, it's freeing. It's freeing to know we're here for a minute amount of time, and our scale of our existence of our world is minuscule compared to the universe that it doesn't really matter.

Rishad Usmani: At the end of the day, nothing matters and you should live your life building the most value and creating the most joy you can. 

Shrawan Patel: Well, that also isn't, is based on your perspective and you say we're around for a minus minuscule amount of time. If, if the, if the earth could talk, then yes, it would say. . Each individual human is here for a minuscule amount of time because I've been around for the last however many billion years.

Shrawan Patel: But if you have a task to do and it's gonna take you an hour and you've [00:55:00] got a day to do it, that's a long amount of time. Right? Like it's actually your perspective on, on how long you have. If you're a 30 or a 40 year old, you might think that you are heading into middle age, you know, true middle age and life is short and you need to enjoy it.

Shrawan Patel: But actually the difference between a 40 and a 45 year old is five years. Right? That's the length of med school . Yeah. How much change happens between an 18 year old going into med school and a 23 year old coming out a lot and there's no reason that amount of change or more can't happen to a 40, 40 year old going from 40 to 45.

Shrawan Patel: It's a long amount of time. If you want it to be a long amount of time, it's a short amount of time, and it'll go in a flash. if you want it to be a short amount of time and go in a flash. So it's it's perspective. We live, you know, the length of time this is gonna, I don't, I'm not sure exactly how to phrase it, but it's almost, you know, the, [00:56:00] how you see the length of your life is how you want to see the length of your life.

Shrawan Patel: You either live a short period and you have very little time on earth, and then once it's done, it's done. Or you have 80 odd years to live and enjoy and experience things on a second minute by minute, day by day basis. And, and to be honest, we probably have differing views depending on how life is going, how stressed we are, whether , yeah, they're feeling a bit depressed with where we are in life and, but we, we actually do cycle through all these different feelings.

Shrawan Patel: So, you know, okay, fine. Some people might say yes, but. Then is your life inconsequential? And, and what are you living for? If there's nothing else afterwards, I think I'm living, I'm enjoying what I want to do now. That's it. Nothing more. 

Rishad Usmani: Yeah. Sharon, if you and your family had a one-way ticket to Mars, would you go?[00:57:00] 

Shrawan Patel: No. No. Not at all? Uh, no. It depends. Again, right now, no. If, well, it will, we'll do a couple of scenarios, right? Imagine that climate change continues to progress in a, in this negative direction that we're heading and the world becomes rather inhospitable in 40, 50 years time. Yeah, I'd potentially still be alive at that point, but Mars has been colonized.

Shrawan Patel: Things are well set up. , everything's nice and hunky dory. Would I take a one-way flight to Mars? Yeah, , of course I would. But right now where there is no framework or no setup on Mars where the whole of my life is on earth, and actually my life on earth is pretty good. [00:58:00] No, I, I, yeah, I wouldn't, I wouldn't go, not now.

Shrawan Patel: Sorry. Again, probably not the answer to the question you wanted , but again, it's, it depends. Different scenarios will warrant different responses. So if you're asking, would I go, if Elon Musk called now and said, you can have a one-way ticket to Mars, someone else can volunteer to do that. 

Rishad Usmani: If your previous startups came to you to ask for funding, which one would you give funding and which one would you say no to and why?

Shrawan Patel: Ooh. So I've, I've been involved and had a couple of startups in, in the def or that would be, meet the definition of what we see as startups, kind of venture capital, venture fundable businesses. A lot of my businesses, [00:59:00] however, have been what I now, now know, is called lifestyle businesses. They have positive cash flow pretty much from day one.

Shrawan Patel: They tick over nicely. They have some growth potential, but it's gonna be fairly linear growth. So I, I think it's a little difficult if you call them all startups in the sense of they're all early young businesses. I think the f again, going, you know, going back to my word, it depends. I would fund them in slightly different ways.

Shrawan Patel: I had a. I had a wholesale business. I was distributing a, a particular product. I was buying, buying it, wholesale and selling it. It was a great business, turned over. It was a really nice cash flow business. Would I give that, would I want equity in that company as a, would I invest money like a VC would in that [01:00:00] company?

Shrawan Patel: No. Sure as hell wouldn't. Would I give that company a revolving line of credit? Yeah, probably. Right? I'll make my 5%, 6% interest on whatever money's coming outta the revolver. I'll be happy with that, right? There's more than I'll get in any other investment account and I can look at the financials of that company and see that it's been going for the last year or two and it has really, really solid cash flow, right?

Shrawan Patel: So would I fund that company? Well, if offering a evolving line of credit is funding, which in some ways kind of it is, yeah, I would do that for that business. . I had started this tutoring company business with a couple of friends at university and you know, we got it to the point where actually it was beginning to, you know, slowly still very early days, right at the beginning of the curve.

Shrawan Patel: It was in this section here, but you could [01:01:00] see where it was going. And if you just see what other companies that started a little after us have done, you know, they had that typical hockey stick curve that venture capital firms are looking for that business a hundred percent. I would put money in because we were at the right time, we were at the cusp.

Shrawan Patel: The technology was good. Uh, we had early users. The MVP functioned and did everything that it needed to do, and we were unlike anything else on the market at the time. So I had a hundred percent give money to, are there any businesses I wouldn't give money to?

Shrawan Patel: So this one's gonna be a bit unfair, mostly because it wasn't started by me. So I feel people might think I am having a jab at someone else, but I'll, I'll explain why I wouldn't give money to it. So there was a, a company I was involved with called Med Hunts that was all about educating patients on [01:02:00] how to use and take their meds, how to kind of follow procedures, medical procedures properly.

Shrawan Patel: And it was great. And from a clinical perspective, I could absolutely see the value that it would bring. The clinical practice would make patients better. They would be well educated or there would be their education on their disease, their symptoms, their treatments would be better. And we do know there's a good solid evidence base to say that if patients are more educated on their diseases and their treatments, their outcomes are better.

Shrawan Patel: Great idea, right? Concept really would do good in the world. But what's the business model right? In, in the unfortunate world of healthcare that we live in, the way that money flows from one place to the other, it doesn't flow based on clinical outcomes or primarily doesn't flow [01:03:00] based on clinical outcomes.

Shrawan Patel: It flows based on the provision of services. And those services need to map to particular payment codes, right? They be, all these services are being codified and then you get certain payments based on which codes you, you can tick. That's true in the uk, that's true in the us. That's true in most, most western world countries, if not most countries, with, you know, well-structured healthcare systems, patient education.

Shrawan Patel: What payment code does that tick? It doesn't, unfortunately. Right. Maybe it's beginning to, in the US you're starting to get value-based care arrangements and, you know, you could theoretically say that you could tap into some of that funding. It's done difficult. Um, but that, you know, I think doesn't really meet muster for VC investment because the business model doesn't exist.

Shrawan Patel: There you, there you go. Those are be my two [01:04:00] answers or two parts of the answer. 

Rishad Usmani: I, I've talked about this before, but outlining a financial ROI for your buyers is arguably more important than outlining a clinical ROI when you're a healthcare startup. Mm-hmm. , what do you look for in founders and how much do you value previous founding Experie?

Shrawan Patel: If the last, what has it been? Probably hour. Hasn't teed up this answer. I'm not sure what else will. We spent a big chunk of this conversation talking about experiences, about having seen and done things that will inform you going forward. I don't think I could ever discount that prior founders do a better job of [01:05:00] starting companies than first time founders.

Shrawan Patel: So it's important, but it's also a bias. And so people like me, you, anyone else that invests in in startups should understand kind of the basis of the bias. To what degree are first time founders not as good as Pryor founders? Are there differences between industries? Are there different? If one comp, if one founder had an exit, had built a company in and a machine vision and sold that company and now wants to build a healthcare company in patient workflows or in, uh, , um, clinical workflow management, does that prior experience translate into this new business as well as if the founder had had a prior company in building a patient front door?[01:06:00] 

Shrawan Patel: Right? One probably relates to the other hell of a lot more than than the other. So I think being a part-time, uh, being a first-time founder does put you at a slight disadvantage purely because you're learning everything for the first time, but, , at least when I'm asking founders, I'll actually put them through some scenarios.

Shrawan Patel: I'll, I'll say, okay, well, you know, imagine that this were to happen. How would you approach them? And more often than not, the good first time founders, the ones that really perform as well, if not better than Pryor founders, are the ones that can pull on experiences from outside of building a company because they, they haven't before, but pull an experience from somewhere else and rel see the relationship.

Shrawan Patel: So if it's your, uh, first time founder, you've got your company, you had some seed funding, you're [01:07:00] now starting to get quite close to the end of your runway, but you haven't raised a follow on, kind of, how do you start to deal with that situation? Some founders will, some founders will flounder around in their answer, right?

Shrawan Patel: They'll. Give a bit of an answer, but not a particularly well thought through answer. But the good ones will say, well, you know what? I had this project that at, at the hospital where I was working and it was going on, it wasn't quite finished, but again, we were getting, we were running outta funding, so what we actually ended up doing was putting certain things on hold In the startup relationship in the startup world, that means sunsetting certain product features or slowing the roadmap down.

Shrawan Patel: They would say, um, we actually repurposed staff to other projects so that we could reduce the burn on that project. Well, they wouldn't say burn, but like reduce the, the expenditure on this project whilst [01:08:00] we went back to the drawing board to come up with a plan so that we could apply for an extension of the grant.

Shrawan Patel: You know what that tells me is that that founder is willing to slow down on product roadmap to. Highlight features that are actually important to potentially let go of staff to take a step back and say, here's what we have done, here's what we are doing. Here's how much money we need. Like put a plan of attack in place and then go approach fundraising in a really well organized manner.

Shrawan Patel: If they, if they pull from an experience like that in, they may not say all the right words, but I guess that as someone that's investing in companies, I also need to read between the lines sometimes. So again, I'm not sure that I've necessarily answered your question, but I think first time founders can be as good, if not better than prior founders.

Shrawan Patel: Prior. Founders do tend to have the [01:09:00] edge, but only in certain scenarios, and I think as an investor you need to find out. , whether or not certain scenarios exist, and therefore you can give weight to someone being a prior founder 

Rishad Usmani: early on in a startup. I would say a distribution strategy is more important than the product itself.

Rishad Usmani: Do you agree with that statement? I will add, uh, a good distribution strategy allows you to iterate faster on your product, which seems to be a consistent marker of a successful startup is a speed of iteration and refinement.

Shrawan Patel: So I think yes and no. Again, depends. Some companies, so there's one company that I know very well, they had a couple of options, so they were very early. They had started to [01:10:00] build an m mvp. They had an outline of it, and they had a few options in how to begin testing it. They had an academic medical center, they had a potential distributor that could have given them access to a few different, um, sites, and they had some early inclination that the sites would be of interest.

Shrawan Patel: So they could have worked with more than one kind of first customer pilot customer. You know, my advice to my advice to them was for them specifically, they should find a small private clinical group that's no more than 30 or 40 minutes drive from where they live. They should just draw a ring in Google, type in, you know, that specialty, the, the like, type in that specialty clinical specialty area.

Shrawan Patel: Find all the groups that are within 30, 40 miles away and ring. Find out who the clinicians are. Start ringing and see [01:11:00] if one of them will bite and be your first pilot customer. Then go there. and be on site every other day and be part and parcel of making that product work. And you'll learn more about what features work, what features don't work.

Shrawan Patel: They weren't clinicians. So you'll learn more about how clinical practice actually works, like how long people, some people will say, our people should fill this in before they go see their clinician, if they're in the waiting area. But particularly in US healthcare, when someone's seen by a nurse first, then by a pa, and then by the doctor, actually, they may not spend that much time in the waiting area.

Shrawan Patel: They'll spend five minutes and then they'll get called by the nurse, and then the nurse is taking their blood pressure. They might take some bloods, they might do some weight to height, then they'll go back to the waiting area. Three and four minutes later, the PA will call them and ask them an initial set of screening questions.

Shrawan Patel: Then the patient stays in the room and five minutes later the doctor comes and then finishes off the assessment. [01:12:00] So if you have a five minute questionnaire for patients to fill in, In the waiting area. When, when, when Do the patients actually spend five minutes in the waiting area or that whole concept should be Ben, because the clinical workflow for that practice or that type of practice just isn't amenable to your original idea.

Shrawan Patel: You'll only find that out if you're there on site. If you work with a big academic medical center that's in a different state, you're never gonna go, you're never gonna see all of this in action. You might get some feedback, but the clinicians that you'll be working with will be very busy, may have clinical studies that they're working on.

Shrawan Patel: They may have their own private practice outside of the hospital setting. They may have all these other things. If you go through the distributor and you work with three or four sites, I'm gonna be so spread thin that you aren't gonna get good, valuable feedback and iterate. And so they started, they, they did exactly what I had recommended [01:13:00] and that gave them enough.

Shrawan Patel: Of a final product, like their product got to the point where they could then do a Siri to do their seed rays, and they had a good, you know, healthy seven figure seed rays because their MVP was good and they had data from this clinician and their patients about how the product worked and how it would fit.

Shrawan Patel: They still had to come up with a good distribution plan. Don't get me wrong, I'm not saying that you should just sideline your distribution plan. They had one, they had a good one, but straight off the bat that wasn't the thing that was important. Well, they actually needed to do was make sure that their product met the, or actually solved the problem they were trying to solve.

Rishad Usmani: Cold calling and cold emailing is a superpower. . Every founder should force themselves to do it. 

Shrawan Patel: Oh, absolutely. [01:14:00] The, let's talk about clinical. You know, going back to that whole thing of first time founder versus Pryor founder, you asked that question. A good first time founder will sit there and say, you know what, when I was at college, I used to wait tables and I would have to talk to a hundred people that I'd never met every single day and ask them what they wanted.

Shrawan Patel: Tend to their needs, bring them what they need, deal with problems, right? And if you're a waiter in a restaurant, there are problems galore, right? My food isn't right, it's hot, my steaks undercooked and deal with that in a good way. I'm not sure how any of those skills are different from the skills I'd need to cold call people and find out what their problems are and how I might be able to help fix them.

Shrawan Patel: Like that to me is taking a skill that you've learned in one place, seeing how it relates to what you need to do as a founder and, and use it. . Okay. Um, I agree. [01:15:00] Cold calling, call, emailing. Is, is an art that you learn over time. , I think a 

Rishad Usmani: lot of people fear rejection. My response rate right now when I called email cold call people is I would say 10%.

Rishad Usmani: In the past it was likely 0.1%, but you have to do it. There's no alternative there. Yeah, exactly. Let's talk about clinical trials. This is, uh, this is the last question, Cheryl. Okay. The, from an outsider perspective, the clinical trials recruitment process seems very inefficient and overly reliant on health systems and hospitals, whereas primary care is likely an easier target to acquire patients.

Rishad Usmani: Do you agree with that statement? And if so, why is it so inefficient? And for context, from my conversations, it's about 25,000 to recruit one patient for a clinical trial. 

Shrawan Patel: Yeah. [01:16:00] So you could, there are multi-day conferences on this topic multiple times a year. And even then people haven't figured out kind of the root cause of the problem, root causes plural of the problem and how to really address them properly.

Shrawan Patel: So we can scratch the surface on this now, but it's, it's a whole big topic. And pharma is a mul, you know, multi-trillion dollar industry. Maybe it's a trillion dollar industry and they have money cuz it's such a big. and a lot of the product and how they work is based on trial recruitment. So it isn't for want of trying, want of money, want of priority.

Shrawan Patel: There are just issues with the realities of how clinical trials work and function. So I'll give you an [01:17:00] example that I'll try and tie into a larger thought. If you are a trial looking at colorectal cancer screening and you want to recruit patients that have polyps, most patients in the US have their cancer, have their colon colonoscopies done at at colonoscopy centers.

Shrawan Patel: Small, small to medium sized private groups. So you'd think that that would be a great place to recruit patients. The problem is that. , what do those centers, and what do those clinicians do? 90% of the time colonoscopies, that's their bread and butter. The more colonoscopies they can do, the more money they make.

Shrawan Patel: So if you are a trial and you want to recruit patients that have polyps, you go to these centers and let's say one of them says, okay, we will refer patients to the trial, but we find have, you know, [01:18:00] particular polyps patients. Then go to the trial site that's maybe an academic medical center and will go through the screening process, enroll in the study.

Shrawan Patel: That study may have a one year period where a treatment gets given or a procedure gets done, then they have a colonoscopy in 12 months time. Where does that colonoscopy need to be done? At the academic medical center, because it needs to be, the findings need to be done and recorded. In a very particular way to be able to assess one patient to the next patient and to the next patient because if those, that data goes to the f FDA for a, an approval of a medical device, the FDA will say, make all the patients and the reporting needs to be standardized.

Shrawan Patel: And you can only do that if they're all done within one or two or a handful of centers. So actually what you've ended up doing for the private group [01:19:00] is taking one of their patients and then having that patient do their following colonoscopy somewhere else. None of the private group, so what the private group has actually done is just lost someone.

Shrawan Patel: Right. They've given a patient away. And that's the last thing that private groups want to do is lose patients that they're treating. So that's an example of kind of one of the issues with kind of just how trial recruitment works. Thinking about PCPs and primary care, they're great recruitment OP pathways.

Shrawan Patel: One, there's an issue with identifying the right trials for the right patients. One P C P is seeing, let's say 15 patients in the morning, 10, 15 patients in the morning, 10, 15 patients in the afternoon. They don't have time or even the head space to think about [01:20:00] more than one trial. So then you are competing against each other.

Shrawan Patel: Like actually you might have five or six trials that want someone F to be recruited from a PCPs office. So now the PCP needs to sit there and think, do any of these patients meet the trial criteria or inclusion exclusion criteria? So, okay, the PCP doesn't have time. Maybe a nurse can do it, but then that's a.

Shrawan Patel: Time spend on trial recruitment, not on other patient clinical care tasks. So then the pharma company maybe has to pay for the nurse's time in finding those patients, but then is it worth spending money on that nurse's time? If one PCP practice can only recruit, let's say one patient a week, if you are trying to do a thousand person study and have recruitment done in, let's say five months, six months, it's in feas, it is not feasible [01:21:00] to have a hundred primary care practices where you are funding a nurse to do the inclusion, exclusion criteria and fill your trial funnel, your recruitment.

Rishad Usmani: I'm assuming there are AI startups scanning EMR data to do this already. 

Shrawan Patel: Yeah, so there are a whole bunch of startups. It's actually a really exciting time. There are a whole bunch of startups that are helping with trial recruitment because trial recruitment, as you said, is such a big problem and costs so much money.

Shrawan Patel: There are a plethora of ways in which you can help address the problem. There's one company that, um, I'm an advisor for called New Route. Their whole thing is around looking at social messaging, social content, and using that to start to understand patience, understand where they are, start to put trial information in front of those patients so that [01:22:00] if you have a trial that's recruiting out of an academic, academic medical center, the only patients that are recruited into the trial are patients that come for an appointment at the center.

Shrawan Patel: patients that go to that center are within a certain catchment area, but there are overlaps between centers, right? There's, it's almost like a Venn diagram. There are three hospitals where I live in Manhattan that are within 20 minutes drive. I've got Sinai, Cornell, and Northwell all about 30 minutes away from each other.

Shrawan Patel: So what happens if Northwell is recruiting for a trial that I could participate in, that I go to Columbia? I'll never know that trial exists, but I'm 30 minutes away. So what Nero is trying to do is to say, based on conversations and material that I'm posting, I most likely have this particular disease that I'm geographically located within 30 minutes of the trial site.

Shrawan Patel: So let me [01:23:00] put this information in front of you because then I can reach out to Northwell and maybe get enrolled in this study. That's one issue that's tackling the issue of patients being in between different sites and maybe not going to the one site that's recruiting. There's another study that's looking at, uh, there's another company that we, that I know that uses metadata, EHR metadata to help hospitals identify what patients they have and whether or not they have enough patients that could help with recruitment.

Shrawan Patel: Seems silly, but hospitals often don't. Their patient populations particularly well, you'd think they would because they have EH R systems, but data in the EHR systems may not be always up to date, but also getting that information out of an E H R can be really difficult. So trial sponsors will usually go to academic medical centers that have done trials in the [01:24:00] past because those hospitals have a good handle on what patients they have in their population and therefore can say, yes, we can help with recruitment, or no, we can't.

Shrawan Patel: If I went to a hospital in the middle of New Jersey that's never really been involved with trials and I said, I'm looking for 500 type two diabetics female between the age of 55 and 75, do you think you have 500 of them? The hospitals say, come back to us in a couple of months and we'll, So what this company does is allows that hospital to deliver a metadata extract.

Shrawan Patel: I e has zero patient identifiable information in that, so they can pull that within a day and send it to the startup. The startup can use quite advanced analytics to take that metadata and extrapolate the types of patients in the population, and then the startup can tell the sponsor, yes, this hospital can probably recruit the 500 patients, [01:25:00] or no, they have maybe two or 300 patients that meet the enrollment criteria max.

Shrawan Patel: Now suddenly sponsors can choose better sites because if the rural hospital has the patience, that's probably the only study they're recruiting. Therefore, all their time and energy is spent on recruiting patients for your study, as opposed to an AMC that might have a hundred studies going on at any one time.

Shrawan Patel: And therefore, recruitment may be split between different studies. Right. Studies are competing against each other. Yeah. As you can see, and I could just continue on and on and on, there are, there are an infinite number of issues with trial recruitment and even just how, how studies are designed. Some of that is for scientific purposes, some of that is for regulatory purposes, and some of that is for ethics and for compliance purposes, how trials need to be designed, impacts how you can [01:26:00] do recruitment.

Shrawan Patel: Um, you know, there's, there's a lot. Again, you could go on for days, you could talk for days on this topic. 

Rishad Usmani: I think we need to do a part two. , we didn't really talk. Enough I feel about investing or healthcare . So we should do a deeper dive into pharma and clinical trials. Yeah, sounds good. Yeah, this has been incredibly informative, Charan.

Rishad Usmani: Thanks for taking 

Shrawan Patel: the time to talk to me. It's been a pleasure. Thanks for asking.

Transitioning out of clinical medicine: Harvey Castro - Physician, Author, Entrepreneur

Harvey is curious, kind and humble. He is a physician, healthcare consultant, and serial entrepreneur with extensive experience in the healthcare industry.

He is the author of ChatGPT Healthcare and Success Reinvention. We talk about

1. His journey out of clinical medicine

2. Entrepreneurship

3. Perseverance

4. Profitability in healthcare

I had an amazing time talking with him and am thankful for his generosity with his time.

Transcript:

Rishad: [00:00:00] Hi Harvey. Thanks so much for joining me today. I'm really looking forward to this. To get started, I think let's just get right into it. I'm at a point in my life where I am transitioning out of clinical medicine while building up my side gigs. And enjoying things. I'm building up angel investing newsletters, podcasts, getting more intervention capital, but I'm struggling with expenses and family life as I transition, and I feel like I'm at a point where I could turn, transition and make enough money with my side gigs in about a year or so, but I'm having a hard time balancing, uh, clinical.

Rishad: Venture Capital Podcast, news Letter, and Family Life. Talk to me about your translation from clinical medicine to where you are now and how did you build those passive income, uh, models in your life? 

Harvey: You know, that's a tough question. Uh, first of all, thanks for having me. And, [00:01:00] um, I, I, that's a question that I, I, I personally struggle with.

Harvey: So how I did it, uh, early on in my career, I knew emergency medicine. It was not for me if the sense that it wasn't for me when I was 70 years old, I knew that I could not do that forever. And so I knew my lifespan as an ER doctor was gonna be short. And um, later in my career when I was hiring physicians and I had some physicians that were in their mid sixties, seventies, and they.

Harvey: Would tell me, Hey, I live paycheck to paycheck. I thought in my mind, I I, I cannot be in that place at that age. I, it is just so much stress on your body. And so to answer your question, it goes back to a fundamental, I love Bridge Dad poor debt. And I took the, the principles, which is basically everything I bought.

Harvey: I was always trying to buy assets and all my debt. I was really strict on getting rid of. And one of my good friends, uh, she happened to be the vice president of a large financial company, and she [00:02:00] gave me some really good advice and she basically said, Harvey, before you start investing, make sure your debt is gone because the minute your debt is gone, then that way, that day forward.

Harvey: Anything you make every month is just a surplus. And then now you can play with that money, and now you can, uh, use that for, for invent, uh, ventures and, and things. So my same advice to you o o Obviously I'm not a financial planner. This is just a friend advice to another friend saying, Hey, if I were you, I would consider just hitting all your debt Now.

Harvey: Um, and with that said, balance is key. Uh, it's funny you mentioned that today because I literally am working on an article as we speak about balance. You know, h how do you find that sweet spot? And for me personally, I've been working hard on losing weight and lately, uh, the last month or so, I, I lost balance.

Harvey: And I've been just focused on working to the point where I look at the scale and I'm like, wow, uh, I'm starting to gain weight again and [00:03:00] I need to find. And so for me personally, um, , I keep saying Monday, but the following Monday I plan on start working out. Um, I've started, uh, eating cleaner again and I've started working out, uh, on that side, but I know I need to work out.

Harvey: And so hopefully that kind of sheds a little light for you. 

Rishad: It definitely does. Harvey, let's go back to your finishing residency or you've just finished residency. You're starting your emergency medicine career, and you have this realization that emergency medicine is not for you and perhaps medicine is not for you.

Rishad: Talk me through how that realization came to be and what did you do right after you realized. 

Harvey: You know, I, I think I realized this from day one, applying to er, uh, I just loved it so much that I wasn't gonna give up. That that passion and that passion for medicine for me was never gonna go away. So my goal was always to whatever I did, to stay in healthcare, and I'll take that to [00:04:00] the next level.

Harvey: Um, I knew that to be successful, you have to do what you know. And so you and I are physicians. We know he. It would be really, really difficult if we did another vertical that had nothing to do with healthcare. Not that we can't do it, we are in the top 1%, meaning we study, we we've, we, we have the grit in us to make it.

Harvey: But how I made that decision honestly was family. Uh, I wanted time with my family to, my definition of success was how much time do I get with family? Am I consumed by all the things I buy and all the debt that I have that I get to the point where I was living paycheck to paycheck and paying credit card and living off of credit cards, and I thought, I am making so much money.

Harvey: How? In debt, how, how is this happening? And so pretty quickly I decided I need to step back, analyze what I'm doing, and really start focusing on buying assets and investing. And at that point I [00:05:00] started looking at what I'm good at, which was, uh, emergency medicine. I was blessed then at the time, uh, freestanding ERs in Texas were starting to uh, boom.

Harvey: And so I invested in a company, actually several different companies in this space. . Um, and that was helpful because that was helping me get some passive income, uh, that I wouldn't have had otherwise. 

Rishad: Talk to me about your investment strategy. What do you look for in these assets and how long is your diligence process?

Harvey: That's a good question. Um, so on the dil diligence process, uh, it varies. Uh, obviously for me, if it's in the healthcare space and specifically er, then the due diligence to some extent has already been, been done because I know the space, I know the demand, I know the, uh, the profit margins, and so then I know how to look at that as an entity and see if, if that's something to do or not.

Harvey: And I could do it pretty quickly as far as an assessment. Uh, what was the first question [00:06:00] again? I know that was the second part. What was the first. 

Rishad: What is your investment strategy? How do you pick these assets? If you were to say, these are the three things I look for that are most important, this is one red flag, what would 

Harvey: that be?

Harvey: Got it. My investment strategy is, uh, I try my best to diversify, but I'm probably over the, uh, focused on healthcare and I'm probably overly focused in, uh, digital aspect of healthcare and startups. So that, that is a risk that I know I'm taking. Uh, some of the red flags that I have, uh, come to learn from either bad mistakes that I've done in the past is I've really focused on the team and the ip.

Harvey: Uh, protection, meaning if I see a startup that has a wonderful idea, but I look at the team, and the team for me doesn't convince me of what their goal is, then as much as I love the idea, I will not invest because I, I strongly believe a, a strong team can make a difference, um, in the sense that they may [00:07:00] be going down a certain route.

Harvey: Um, but example Covid hit, they had to pivot. And if they don't have a strong team, they're not gonna pivot and they may. Uh, another red flag for me is just looking at the. And, and what does that mean to me is looking at their website, looking at their email, looking at their, uh, correspondence, looking at how they represent themselves if they represent themselves and it's not professional.

Harvey: For example, I was looking at an IT company that I wanted to invest, and the idea sounded great, but when I went to their website, I felt like the website was, did not reflect the technology that they were working on. And to me, that mismatch. To me meant, uh, a flag. Because if that's the case, then consumers will see that.

Harvey: Or if they're not taking pride, and I'll take it another step in their work, then how are they gonna take pride in their process? 

Rishad: I agree. There's a balance, and this is very difficult to get right between [00:08:00] launching as soon as possible with the bare bones mvp and being polished enough that it doesn't look sloppy.

Rishad: In my experience, people fairly strictly fall into two different categories. Those were the bias to action and those were the bias to plan and how you can infer this. If you ask someone, okay, let's go build a hospital, one person will say, let's do it. The person will say, well, these are the 29 million things we need to do it.

Rishad: Do you fall in the category of bias to action or bias to planning, and how has that helped you and hurt you in your life? So, 

Harvey: That's a good question. Um, I feel like I'm more the pie in the sky kind of thinker. Uh, I see the vision and usually I need a business partner and I recommend usually only having one that is more of the implementer.

Harvey: And so that way between me having the vision and someone that can implement and can look at all the fine detail and [00:09:00] call me out, then together we can create a product. With that said, I think the best entrepreneur as I've been doing this over and over is to have both the visionary and the implementer, and so now I'm overly focused on how I can implement, how I can do things, because with experience now I see things differently and I feel like I can implement a lot easier just because I've learned from so many mistakes that I personally have done.

Harvey: Say 

Rishad: you're looking for a business partner and you're looking for an implementer or a visionary, if you are an operator, How do you test that relationship before you go all in? How do you stress test that? Do you ask certain questions? Do you go, you know, have a have a boxing match? What do you do? 

Harvey: Well, to me, my favorite phrase is the proof is in the pudding.

Harvey: If there has been some history of track record, then depending on the situation, if that track record is there, then it's easier for me to kind of take a look and see what projects they've worked and what [00:10:00] they've done and what their role. As far as the interview, I believe big on the interview. I, I do a lot of mock interviews and mock questions and, uh, group think questions and sit down with the, uh, with the person and say, okay, we have this problem.

Harvey: How would you handle it? What would you do? There's no right or wrong just to understand their thinking process. I think all of us bring something special to the table, and the one thing I have learned over and over is, as much as it sounds great to find a business partner that thinks like you and agrees with you, and everything you say is yes.

Harvey: I fair to say it's better to find someone that compliments you, someone that if you're strong in finance, but the other person's strong in medicine or depending on the business plan, you, you may need cer certain things. You, you need that counterbalance because if everything is a yes, then you may end up going down the wrong road and your business partner's saying yes, and it's just reinforcing it.

Harvey: Uh, you need that person to play devil's advocate and. Business partners, d n a. Ideally, if it could compliment you and, and I don't wanna say you wanna [00:11:00] find someone that's always disagreeing with you, I'm just saying someone that can compliment things that you're weak at, so that can help you see a different angle to the same issue.

Rishad: I completely agree with that and I had this advice with my start for my mentors. As if you are replicating your skills and attributes between you and your co-founder, then there should only be one of you. I ignored that advice and suffered because of it. Let's go back to Harvey as a child, Harvey, as an eight year old, as a 14 year old, talk to me about how has your childhood influenced you into who you 

Harvey: are?

Harvey: That's a, i I think that's the key to me today actually. I wrote a book called Success Reinvention, and I'm not promoting book. I'm just mentioning it. And the book is about reinventing yourself and always being better and always pushing yourself. And, and I'm glad you asked the question because I've done so many things today, but, but what pushed me to get there, and I really think it's having a strong why.

Harvey: And what does that mean? It's just the, the hardships of my. [00:12:00] What has happened to me ranging from being kidnapped, ranging from being in a real bad poverty situation where I didn't know if the next meal was gonna happen, uh, really pushed me to make sure that I was gonna be better. And so as a first generation, American first generation college student, I wanted to make sure that I made it my best, uh, whatever that was gonna.

Harvey: And so at an early age when I was eight, it was interesting. Uh, I remember, uh, from the age five I would walk home cuz I couldn't afford a babysitter. So my mom had several jobs, had my own key, and I would just take care of myself. Um, I remember any coins that I found on the way, any money I would. Gather it.

Harvey: Even if I found it, you know, down the street, I would just gather any pennies and put it on my mom's nightstand cuz I thought that was helping her. When sh uh, when I had my first job is with the New York Times and they would give me a certain amount of extra newspapers to give away. Um, and I didn't, I actually would go, , this was crazy, at age 12 to the subway system and stand in front of, [00:13:00] uh, the station and just, uh, sell the newspaper for like five, 10 cents less than whatever it was going for, just to have that extra cash.

Harvey: And then fast forward, uh, when I was 16, I started my own first, my first, uh, vitamin company. And I was basically, uh, made a deal with. Uh, health food store owner, and I said, Hey, I noticed these invoices say that if you buy more, you get more of a discount. What if I get you to these numbers? Can you gimme part of that discount so I can sell it to others and make money on the margin?

Harvey: And believe it or not, he said yes. And that actually paid for my first car, my first insurance. And that at, at that time in my life, I was actually, uh, giving my mom money every week, uh, for my extra cash that I was making. Do 

Rishad: you think entrepreneurship is innate or is it. 

Harvey: I laugh because I literally, uh, just wrote an article about this and I've been studying this.

Harvey: This is a awesome question and I love this. Um, it's a hard question and complex, so let's go down that road. [00:14:00] Uh, from a genetic point of view, uh, yes, there are some attributes that cause you to be more aggressive and can cause you to pull the trigger, whereas someone genetically may look at the same situation and say, no, I, I'm not going down that path.

Harvey: And I feel like you need a little bit of that because you need that courage to be able to pull the trigger. If not, you may have an amazing idea, but it just stays in your brain and you allow someone else to come up with the same idea and profit. From an environmental point of view, I feel like we're really, really blessed.

Harvey: We, we have studied, we can, we have proven that we have grit. We have proven that we have the brain power to understand complex, uh, problems and apply them. And so I feel like from an environmental point of view, You can make two arguments. Uh, one is that genetic really because you just said your brain power and that's may be more inherited into your brain.

Harvey: Or is it the environment because we are around such amazing people. I remember going to medical school, just being in awe of my professors and [00:15:00] residents and thinking, man, these guys are so brilliant. But then we kind of surround ourselves with these, uh, individuals and I think in essence, our vocabulary gets better.

Harvey: Our ways of thinkings are challeng. And it makes us a better person. And so from an environmental point of view, uh, we have, uh, easier access to, uh, capital as opposed to someone else. We can call some colleagues and say, Hey, would you like to invest in this startup? Or we have the, the network, the other part of it from an environment, um, having that MD or having those initials automatically to some degree opens the.

Harvey: For us, whereas other people try that same approach and they cannot make it. And so I argue that it's actually a combination of both. Um, and then the last thing in my soapbox that I always tell physicians, I think from a grit point of view, we work so hard to get those initials and get to that place. And I often think we forget the fundamentals.

Harvey: And that is our goals. You know, our goal is to become a doctor. And when we get there, I feel like a [00:16:00] lot of physicians, including myself, we sometimes. And we stop reinventing ourself and we stop growing. And so I think, uh, from a genetic point of view, if, uh, you're pushing yourself, but then an environment you got, you stop growing.

Harvey: I think it's important to remember you gotta keep growing. 

Rishad: I k cannot agree more with that. Our arrival fallacy is something we teach our students and our education system does a great disservice. We are told once you're an attending, things will be, But things are generally not better once you get there.

Rishad: I, I think the old adage, the journey is, the destination ranks true. It's something I'm trying to live my life by. The Japanese concept of icky guy is something I'm really fond of, and it's intersection of what you're obsessed with. They're passionate about what you love to do. What you're good at and what the world will pay you for

Rishad: Have you found [00:17:00] your IY guy, Harvey, and if so, what 

Harvey: is it? Uh, I have a tough one with that one. And because healthcare, from an ethical point of view, I, I don't ever wanna make money from patients. I, I remember specifically getting my first paycheck, and I actually felt guilty because I was getting paid to take care of people.

Harvey: And, and because of my background, because how I grew up, I knew that it was difficult. And so, to answer your question, how have I found it? Yes and no. I love medicine. I love healthcare. And so in that respect, I'm still doing it. The difference is how I'm making that passion and how I'm making money is I'm focused now on digital health.

Harvey: And so, uh, you know, startups, ai, uh, telemedicine, those are the things that I'm focused because those are the things that excite me. And those are the things that I can, uh, continue to read, continue to learn, continue to grow. And I'm able to be a consultant now for other companies that ask me for that advice, and I'm able [00:18:00] to make a profit on that.

Harvey: So from that extent, maybe I. 

Rishad: What do you think is the biggest problem in 

Harvey: healthcare Harvey? Oh my gosh, so many facets. That's a hard one again, for me, I, I, I just see so many issues ranging from, you know, uh, the patient care, the long wait times, the quality of care, how much time patients are spending with their doctors down to, uh, mental health bothers me in the sense that.

Harvey: Being an ER doctor, having patients with mental health, having them unfortunately, uh, uh, boarded in the ER and just there for hours waiting for a healthcare provider to help them with their mental state and not being able to, uh, give them the resources because I was waiting on, you know, the local government or the local city to bring a, a healthcare provider to help them take 'em to a facility where they needed help.

Harvey: I think that's a huge hold in in our healthcare system. that that must be addressed to help individuals that are in need. And, [00:19:00] and especially post covid, uh, mental health issues have only gotten worse. And so I wanna make sure that that's one thing that we can't address. And I, I am seeing a lot of interesting, uh, AI projects and digital projects coming out and about that I think will help, uh, these individual.

Rishad: You said you felt guilty from making money by seeing patients. I would infer from that. That you think healthcare delivery should not be profitable? Profits are important to drive innovation and make the healthcare system more efficient. Being from the Canadian system, it's, it's, it's a very inefficient system and for the most part it is non-profitable are parts that are.

Rishad: Do you think healthcare should be profitable? If so, which parts of healthcare should it be, biotech and pharma should be profitable and care delivery not? And if that's the case, how would that reflect into salaries for [00:20:00] physicians versus scientists? 

Harvey: Yeah, no, I love the, I love the question, and it's a good ethical question.

Harvey: I honestly struggle with that. I mean, I totally agree. We need to have profit margins in order to, uh, innovate, in order to create, uh, I would not want to cut. Physician salaries, because guess what? Eventually if you cut it so down to nothing, then we are not gonna have these amazing leaders to take care of us as we get older.

Harvey: So there should be some profit. The question is, what is the right amount? Uh, I know that I always see these studies and I'm not gonna remember how much, but I know that when you look at the top healthcare providers in the United States, uh, insurance wise, and you see what the CEOs make, it's usually in the millions and their options are in the ridiculous millions.

Harvey: And I think, wow, if these insurance companies are making that much, uh, money, then to me, I, I worry them, uh, what's happening because they're probably denying patients care. They're probably not paying for the full care. And I feel like a lot of that [00:21:00] money's going to them. And I know people are cringing when they hear that, but, but it worries me as a society that we need to figure out how, how to best motivate everyone, but also have the refund, uh, funds to help everyone.

Rishad: I completely agree. Let's go move forward to your 17 years outta medical school and you start an mba. Tell me about that decision and what advice do you have Physicians who are around the same time, maybe 10 to 15 years outta medical school, would you recommend an MBA for them? 

Harvey: Excellent question. I feel like by the time I went to get my mba, I all my, excuse me, all my business partners and friends that knew me well, every single one of them discouraged me from going to back to school because they kept telling me, Hey Harvey, you have what's called a street mba.

Harvey: You're wasting your time. And I struggled with that. Uh, my advice is it depends on what your end goal. Do [00:22:00] you need those initials or do, can you get away with not having those initials and still having the same, uh, amount of experience? For me personally, having the street N B A helped me because when I went to get my M B A, I felt like I understood the concepts.

Harvey: I, it was fun to me because at times I would do things and I didn't know why I did it. But then when they kinda explained the theory behind it and why they did it, I said, huh. Okay, that makes sense why I've been doing this a certain way. I didn't even know I did that. And so that was just reinforcement.

Harvey: But then the other part that was fun for me is just the education and, and seeing the different angle from an academic point of view. And so for me personally, I've wanted to have those initials after my name because, uh, personally, I, I kept feeling like every time I introduced myself, somebody would say, oh, Harvey Castro, great doctor, blah, blah, blah.

Harvey: And ironically I wanted to be introduced as Dr. Castro, but also businessman. And I felt like those initials I needed to get through the [00:23:00] doors and not be looked at as a doctor, but looked at as a doctor that understands business. And that's why I did. And so my advice to others is, um, twofold. Number one, do you need it?

Harvey: Probably not. Number two, do you, it all depends on your goals. So if your goal is a certain amount, then you need, you may. The other thing I'm gonna challenge everybody is, um, I think that our, by the time we have grandkids and those guys are out, uh, getting their MBA slash mba, I would argue that degrees are gonna be less of a, a impact than it is today.

Harvey: I'm gonna argue that, uh, they'll be more online learning, more equivalent of a YouTube, that people will go through a course. Say they have their mba, but they may not have the, the initials, but the education is getting to a point out there that they will have an MBA in my eyes, if that makes sense. 

Rishad: Yeah, that makes sense.

Rishad: You mentioned your kids and grandkids. Grit and perseverance is something I'm [00:24:00] struggling with, so I have not have as hard a life as you. I grew up in India. We didn't, we were not rich. There is some abuse involved in my life, which I haven't talked about yet on the podcast. But I would say people, there are people who have had much harder lives than myself.

Rishad: My kids have a fairly luxurious life. We live in a great neighborhood. You know, we have a nice car and they can essentially have anything they want whenever they wanted, within reason. Do grit and perseverance require overcoming obstacles or do they require a loving household and if they require overcoming obstacles?

Rishad: What is your parenting philosophy and how are you ensuring your kids have perseverance and grit? [00:25:00] 

Harvey: I love that question. Uh, actually , it's almost like you read my mind. It's weird. Um, I have been struggling with that particular question, and here's how I see it. We are blessed that I have been able to provide a different life for my children that I didn't have, for better or worse, that life causes blinders on my children.

Harvey: To the point where one of my kids at one point said, Hey, I want to go live in New York City where you grew up. And I thought, oh my gosh, if you lived there, they would eat you alive. You, you have no idea of the world. Uh, you've been sheltered, living in a suburban America and, and you really don't understand.

Harvey: And so I have my parenting style. It's tough love. Uh, I recently remarried and my wife is the perfect can of balance because she's trying to do what you just said. Make sure that I'm giving the children that support, uh, that [00:26:00] love, which I have. But the part that I struggle with is I create, uh, I try to push a need.

Harvey: I try not to give 'em everything they ask for, and I try to push 'em to the extent that it. Uh, avoid in them so that they have to go out and have grit and figure things out. Um, and I know some people may not agree with that, but I just. Do not want to raise my children to the point where they're out in the world and they struggle and they don't understand the world.

Harvey: And so I figure, um, my parenting skills has been a little odd. For example, when we go on road trips, At a very, very young age. They were like, you know, four or five, seven years old. I have four kids. I would literally drive and say, okay, let's pick a business. And we, they see a gas station. I'd say, okay, gas station.

Harvey: How can we make money there? And then I kind go through supply and demand and how to do marketing and, and kind of explain these [00:27:00] concepts. And then Rich that port that, that I mentioned, the, the fundamentals as they were growing up, I would kind of teach them indirectly through stories. And so my parenting style.

Harvey: Now that they're older, uh, my oldest is in college and he's like, Hey dad. He picked up very, very expensive college. And he's like, Hey, dad, I I want you to pay for college. And I said, you know what? I'm gonna help you, but I need you to understand that there's debt, there's loans, there's, uh, you are gonna have to go and figure this out.

Harvey: And so I pushed him, um, because I figure. He needs to have that grit, he needs to have that understanding that he just can't go and buy whatever it is he needs to actually gain it and earn it. And so, uh, unintentionally he ended up and I don't agree with this, but I'm just gonna share the story cuz it's kind of comical.

Harvey: He ended up, um, playing poker. And he ended up doing very well to the point where now he's paying for his own college, uh, through [00:28:00] his poker. Now do I agree with it? No, but I do like the fundamentals, which is he felt a problem, it pushed him to a solution and he's doing well using his, uh, mathematical skills and probability, and he's actually doing well and.

Harvey: You know, am I a bad parent? I don't know. Maybe I, I, I should have given them the full ride and say, here, son, here you go. Or maybe I should have been tough in what I call tough love. And so that's a tough one. . 

Rishad: I like the way of thinking. When people hear tough love, they focus on the tough and not on the love part of the phrase, providing your kids with a strong base so they know if they fall, you're there to catch them as important, but not handing them everything is equally important as well.

Harvey: Yeah. And I'm, I'm trying my best to support them emotionally. Know that they're not, I'm not gonna let them, uh, die. With that said, I know others are gonna cringe, and I know my wife cringes when I say this, I'm like, if my son messes up really bad, I'm gonna let [00:29:00] him fall and I'm gonna let him fall really hard and deep and.

Harvey: will I let him die and all that? No, but, but I would let him just suffer. Um, because I feel like that suffering, um, is that part of where it's tough love? Like I'm not gonna let him, I'm not gonna abandon him, but I think him being in that, him or her in the future, whoever being in that low PO point in their life, that's gonna give him that grit to say, you know what, I don't like this.

Harvey: I'm gonna, I'm gonna always make better decisions. And, and that's the part where I would, you know, let them fall, but then quickly jump in and catch 'em and help 'em back, and then help 'em get to that. 

Rishad: Harvey, how did you learn to write? How did you learn to speak in an eloquent manner? Growing up, I was told I am analytical.

Rishad: I am not creative. I remember entering in an art competition and I was almost made fun of by teachers. I do paint now as well, but it took a lot of unlearning and redefining who I am to myself to allow my creative site [00:30:00] and podcasting. As a creative editor, I would say, Were you always creative? And how did you learn to write?

Rishad: And did you always want to write a book? If not, what changed? 

Harvey: You know, I, I suck at writing , honestly. I, uh, I'm horrible. I think, uh, what helped is I was so 

Rishad: passionate about, I would disagree with that, Harvey, but, uh, you continue , I would disagree that you suck in writing . 

Harvey: So I, I'm so passionate about, uh, my first book that I, I, it, it literally took me like, Seven, eight years to write it cuz I was just so passionate about it.

Harvey: I wanted to just pour my stories, motivate people and I, I was just like, I put heart and soul and how I did better. Now with technology, I'm cheating with Grammarly cuz like, you know, I, I, I literally have a horrible upbringing. I, uh, cut outta school. I. almost failed, like three different grades. So my, my grammar's not the best, but thank God for Grammarly, [00:31:00] cuz it kind of shows me what I'm doing right, wrong, and then I'm learning from it and able to adjust and, and, and write better.

Harvey: And so how things have changed, um, you know, to give a blunt example, when I did my next book, which was chat sheet PT in healthcare, my goal wasn't necessarily being eloquent and flowing. My goal was more. I have a problem, which is healthcare. I have a possible solution with the chat G P T. Let me get this book out before.

Harvey: It's better to be on the forefront than in the back end. And that was my main goal. Now that I'm, I'm literally just submitted the second book for chat t, it's got a different angle now. It's from a patient's point of view, I've taken more time, I'm adding more information that one flows better, that is a better reflection of who I am.

Harvey: And now I'm doing a third book, which I'll announce probably next month, that I'm really passionate about. And it's something that I had already written back last year, but I'm. Fix and edit and change for next year. So, have [00:32:00] I been always good at this? I'll, I'll give another example. Um, I hated being on tv.

Harvey: I hated giving talks, uh, to the point where my hands would get clammy and wet. Uh, but now I, I actually enjoy, uh, doing it. And I think it's just been that, uh, being on the forefront. Uh, there was a time, uh, my first medical. They needed an ER doctor. And all the doctors pointed to me and I said, okay. And I started doing it.

Harvey: And I think just practice, uh, when Covid happened, um, I was, I'm not exaggerating, I was on TV over a hundred times and most of that was all live TV and talk about not making mistakes and being under pressure. And then on top of that, I started doing it in the Spanish network. And I, I don't speak Spanish every day, but I do speak it, um, and talk about pressure there, talking about medical Spanish and live tv.

Harvey: In another language. Uh, that was challenging. But I think doing all that it it, it made it fun. And, and I think the last part I was gonna say is just being around doctors and healthcare professionals, hearing their vocabulary, uh, has [00:33:00] lifted my vocabulary. There's times my wife makes fun of me, cause I'll, I'll drop a word or two and she's like, Where the heck did that come from?

Harvey: And it's just, I guess it's this whole medical care that we get. You know, it's, I'm sure when you went through med school, you hear all the, the stories about Vango and his dig, uh, dig toxin, uh, toxins and how it influences our, you know, that kind of fun stuff that we, we all know these stories, but you know, when you talk with someone else, we're like, oh, where did that come from?

Rishad: let's get into ai. And he. And let's get into, if the goal is to provide ubiquitous access to healthcare, if the goal is for the quality of Mayo Clinic to be available worldwide, I would argue that we should move towards a world where AI does replace physicians because we will never train enough quality physicians to provide that care.

Rishad: What are your thoughts on AI and healthcare and how we can. Best move [00:34:00] forward and optimize healthcare to use ai. 

Harvey: I think AI is in its still infancy. With that said, I think it's an amazing tool. I think, uh, the honest difference is it's gonna lower the price of care in the sense that, for example, uh, reading x-rays, reading radiology, uh, uh, CT scans, the AI is able to look at this and it's able to now allow a doctor to be more efficient.

Harvey: So with time, if you increase that efficiency, you can make the argument that you can start lowering the price because now they're not. Spend as much time. So as a big picture, I feel like this is what's gonna be happening in healthcare. I think this is how we are going to lower the care, lower the price of care, because we're able to use these tools.

Harvey: Um, not that I'm promoting any particular company, but I'm starting to, I won't even mention the company, but I've, I'm starting to see, uh, platforms that allows, uh, certain procedures to be taken outside of the hospital and start being done at home. And [00:35:00] one of 'em is, I've seen a company that does ultra.

Harvey: And what they're doing with the ultrasound is, is they're using AI to teach the layman person how to do ultrasounds on themselves and basically allowing those pictures to be sent to the provider and then the provider knows what's going on. So those kind of tools, I'm thinking that's gonna be the feature and it's gonna lower the price of healthcare and it's gonna help us.

Harvey: I would love to know 

Rishad: the name of that company, cuz that sounds amazing. 

Harvey: Yeah, I'll share it with you. I'm, I'm, I'm, I'm going blank right now, but I'll, I'll, I'll share, I'll send it to you and you can post if you want for sure. Sure. 

Rishad: Why did you start Deep Pocket Series Harvey? 

Harvey: That's a good question. I'll never forget.

Harvey: I got my first iPhone and I got in front, uh, I was, see, I was called, unfortunately, coding a patient, and I remember telling the nurse, Hey, we need to start this strip. And I told her what it was, and she's like, one. She got this big dictionary book out looking and then she flipped through it and took it forever.

Harvey: And [00:36:00] then finally she found a drip amount and, and started it. And I thought, this, this gotta be a better way. And so I created the first IV app med, it was called IV Meds on the App Store. Hit the one top 10 apps in the world. and how I started it is basically from that story, from that I thought, you know, I can start working on healthcare apps that will help, uh, patients.

Harvey: And so being a doctor and being an entrepreneur, I literally taught myself how to program the first one. And then after that it made so much money that I started hiring a team to help me with the following apps. And so it, it was a fun project. The best 

Rishad: startups are, bro, are born from founders experiencing the problem deeply.

Rishad: Yeah. That, that's a good story. Tell me about Trusted Medical and why do you think hospitals have such a difficult time recruiting and retaining physicians? 

Harvey: Good question. So trusted medical. Uh, I was blessed in that I had started, uh, probably at that point about [00:37:00] eight to 10 different freestanding ERs, uh, for other companies.

Harvey: So I knew how to start these ERs. And I knew the billing, I knew the process. I knew all the ins and outs, and I was a consultant for big companies. And then I thought, why not start my own company? And so I created Trusted Medical Centers, had a business partner that, like we talked about, uh, luckily for me, I didn't think about it at the time, but she was an implementer.

Harvey: I was more the visionary and together we were able to create the brand, create the marketing, uh, get the funding. Um, and we started with one and ended with eight. And so the goal was I took advantage that the hospital system, um, and I say advantage in a nice way, they were not doing a good. And I thought I could do a better personalized concierge care.

Harvey: And so I created the business model thinking, let me teach every person that ever interacts with the patient how to give a better care. So down from registration to billing to how the doctors act that I had, all the [00:38:00] doctors at one point wear ties when they see patients and they would be dressed up. Um, and then anytime we had a pediatric patient, I would tell 'em they had to take off their white coat and, and come in.

Harvey: And so I did all these things that were different that a big hospital system couldn't do. And then my favorite phrase is, every time um, I wanted to change things, I could change 'em overnight. And so I could literally go to the hospital administrator across the street and say, Hey, we're about to do this.

Harvey: Let him know, do it. And he couldn't act fast enough to change things, cuz I knew he had to go to corporate, he had to go through all these channels. And by the time he made changes, I'm already ahead. And so that was really special to me cuz I was able to help patients and do things in a better way. 

Rishad: Speed of iteration is something that's quoted often for startup success and it's something big companies lose as they grow.

Rishad: Do you agree with that statement? And what do you think hospitals can learn from startups?[00:39:00] 

Harvey: Speed to market is huge. I, I always try my best if I do, uh, things on my own. I try to be the first to market and I try to come up with ideas that are first to market that no one else has on purpose so that I can beat people.

Rishad: Let's talk about Spring Tide ventures. How did that opportunity come to be and what advice do you have to physicians who want to transition to venture? 

Harvey: So I, I was blessed. Um, I have stayed in my niche, which is healthcare, and so as an investor, uh, I started looking at different VC companies out there and how to best invest.

Harvey: And so originally I started as an investor and I started investing in their fund. And that relationship became interesting because as things, uh, as an administrator of a hospital system and, [00:40:00] uh, owner and entrepreneur, things would fall on my lap and I would literally call them and say, Hey, you may wanna look at this, or, Hey, the future's coming on this particular entity and you may wanna look at businesses.

Harvey: And that. And then eventually he started emailing me back saying, Hey, uh, this one recommendation, you're right. And then eventually they said, Here's a business proposal, here's what's going on. Can you evaluate this and tell us what you think? And for me that was perfect because I enjoyed the space. So then I became more of a reviewer of, uh, of different businesses and, and advisor to say, Hey, look at this, look at that.

Harvey: And so that's kind of how it came to be, which was great cuz I could use my MD and I could use my m MBA and I can use my experience and, and kind of give that added value to those. 

Rishad: Did you start by Angel investing or did you start by investing in funds? And if you started by Angel Investing, how did you get deal flow?

Rishad: I think. 

Harvey: Honestly, it's been at the, [00:41:00] uh, deep Pocket series was all self-funded, so I did it all on my own. Um, I never really ventured out venture capitalists or anything like that. Uh, with bigger entities. I, I knew that I could not self-fund it. So when I would do, I, I did do a one-off project and I got a group of.

Harvey: Doctors, I basically handpicked a group of doctors, said, these are the numbers, this is the need. Um, I need everybody to bring X amount of cash to the table and depending how much cash will determine your equity and that deal. Thank God it happened because it did well and we were all able to. Um, continue.

Harvey: And so it was a good deal in the sense that we were, we, we didn't have to have a third party involved, which I'm glad, um, with trusted. We did have a company come in and fund, uh, a part of it. And then another part was for the physician. So not getting into too much detail, I, I've had to, another ventures go into angel investing or other sources.[00:42:00] 

Rishad: Why do you think cannabis is somewhat shunned in the medical ecosystem? It has some clear benefits, but it's adoption remains very poor in the physician community. Yeah, I 

Harvey: agree. Uh, I think, I think it's been shn because of the stigmatism behind it and because of the stigmatism. It's almost to some degree, the group think in the sense that, you know, the first thing that we were told is don't do it.

Harvey: It's negative. And so right after that, anything after that, it's just. As a healthcare professional, we can look at the science, we can look at, um, the way it's used and, and I'm glad that there is medicinal marijuana and there's different indications and different states are opening up and different countries are allowing it.

Harvey: And the United States, it's, it is changing its laws, uh, in different states, which I'm glad. And, and I'll take it to the next level. I, I am a, an advisor for a marijuana company. Um, and what [00:43:00] I like about it is they, I'm not promoting them, but I'm just kind of sharing the, the mentality behind it cuz I love the science.

Harvey: They basically created a iPhone app. They created a little cartridge, uh, the diffuser, and then you basically load the cart. Um, and it's certain different types of, uh, cannabis in it, and then the physician can. Say, okay, this is the combination based on the patient's ailment. So if the patient has sleep issues, then it will change the combination of can that's in there so that when they use the diffuser, it gives 'em a certain type of strain more.

Harvey: And then it helps 'em with their sleep. But if they have anxiety, then they can be adjusted and then they have it for anxiety, which I think that is the right way to do it. You're giving the right dose, you're not overdoing it. Um, and so they just started clinical trials in Germany and I'm really stoked about that cuz I think that's the way to do it.

Harvey: Yeah, I agree with 

Rishad: that. What is the end goal for you, Harvey? [00:44:00] 

Harvey: My end goal is to , I'll, I'll summarize with this, with this story I told my, my kids say to me, uh, they say, Hey, if, if you, God forbid you're in the nursing home, we know where to find you, and it's not gonna be in your room. It's gonna be next door helping the person next to you, uh, you're gonna be a doctor to them.

Harvey: And I think that's my goal. My goal is just honestly just to continue helping, um, until the day I die. I, I enjoy this. I have, I'm passionate about healthcare. I'm passionate about what I do. Uh, the end in mind is more time with family than others. Uh, it's not really about making money. It's about having the time with my family and, and doing the things that I enjoy and passionate about.

Harvey: So that, that's my end goal. Is there anything else 

Rishad: you wanna tell our 

Harvey: listen. Yeah. Uh, I think it's important to find balance . I know personally I'm not doing a good job this month on it, but, uh, I think it's important to tell everybody, make sure you find balance. I know it's hard. I know when I was starting, uh, trusted medical centers, I was working all night, [00:45:00] driving two hours, getting to Dallas, working all day, and then crashing at night cuz I was exhausted and that was not balanced and I had to do it.

Harvey: So I understand there's times that we need to do things that we don't want to, but as long as you don't do that, the rest of your. That's the goal because as you said earlier in the podcast, we never know our last day and we wanna make sure we make the most of every day. 

Rishad: Thank you, Harvey. This has been an absolute pleasure.

Rishad: Thanks for joining 

Harvey: us. Thank you.

Investing with intuition: David Zhou - OnDeck Angels

David Zhou runs ops and deal flow at On Deck Angels. He is a mentor and advisor to several accelerators and incubators including Techstars, WEVE, City University of New York and Alchemist Accelerator. You can follow his thoughts on his newsletter, Cup of Zhou.

He has an inquisitive, curious and intelligent mind. We talk about his childhood, deal flow, decision making, market risk and more! I hope you all enjoy this conversation as much as I did.

How to get into venture capital as a scientist: Bharat Srinivasa - AmplitudeVC

I had an amazing time talking with Bharat. He is a truly independent and contrarian thinker. I am thankful for his transparency and honesty in elucidating his journey from scientist to venture capital.

Bharat Srinivasa is a co-founder and principal at Amplitude Ventures . They have over $300 million under management and invest primarily in life sciences startups.

He completed his Masters in Immunology and PhD in Experimental Medicine from McGill University after which he transitioned to venture capital.

We talk about his upbringing, investment thesis and what he looks for in startups. We do a deep dive into his path post PhD into venture capital and the future of precision medicine.

Path to a successful healthcare startup: Joshua Liu - SeamlessMD

Josh is the CEO and cofounder of SeamlessMD, a patient engagement platform which improves patient satisfaction while reducing hospital length of stay, readmissions, and costs.. They have raised over $7.5 million and are used by various health systems including Stanford Health. He is intelligent, humble and posses incredible grit. We talk about his childhood, his journey from an interest in coding to medical school and then being a founder. We discuss ChatGPT, AI in healthcare, the future of private healthcare in Canada, raising money for his startup, 90% of the VC he met said no initially and his end goal in life.

He was previously the Chair of the Canadian Medical Association’s Joule Innovation Council and on the Advisory Group to the Office of the Chief Health Innovation Strategist for the Ontario Ministry of Health. Joshua has also served on the Shad Valley Board of Directors and as a Startup Advisor to Northeastern University.

Joshua has received numerous honours, including being named Digital Health Executive of the Year by Digital Health Canada, Forbes 30 Under 30 in Science and Healthcare, Canadian Top 20 Under 20, TD Canada Trust Scholar, Creative Destruction Lab Alumn and NEXT Canada Alumn.

From eye surgeon to venture capital at 53: Sam Goldberger from Ambit Health Ventures

I had an incredibly educational and fun time talking to Sam Goldberger, MD, MBA. He has an intelligent, humble and mindful soul which is focused on bringing value to others.

Sam is a managing partner and co founder of Ambit Health Ventures (an early stage digital health venture firm), he is on the board of multiple startups. We are co-investors in SOAP Health (early disease detection and diagnosis at the point of care). 

At the age of 53 he decided to pursue an MBA and transitioned to the private equity world before launching his fund with his cofounder. We talk about his childhood, launching a venture fund, decision making, life, what he looks for in founders and startups.

I hope you guys enjoy this conversation as much as I did. Links in comments.

What is the future of AI in Surgery? Jawad Ali - Vality Partners

I always have a fun time speaking with Jawad Ali and it’s always a pleasure.

Jawad is a practicing general surgeon, founder of Vality (a physician led consulting firm specializing in digital surgery, patient engagement and surgical devices) and founder of Austin MedTech Connect (a private community connecting founders, clinicians, investors and healthcare stakeholders).

We talk about success, surgical innovation, physician burnout, medtech in Austin and goal setting. I hope you all enjoy this conversation as much as I did.

How to go form idea to execution? Joshua Landy - Figure 1

Josh is the chief medical officer and cofounder of Figure 1, a social network and medical education platform for physicians. Figure 1 has raised $23.5 million and serves over 3 million users worldwide. Josh is also a practicing intensive care physician and the medical lead for medical assistance in dying at Scarborough General Hospital.

We had a frank and honest discussion on the path from idea to execution, the future of Canadian healthcare and medical assistance in dying.

Story of my startup (ClinicUp)

ClinicUp was my previous startup which closed down in early 2022. It was a telemedicine company which served 1100 patients, we hired 10 physicians, we got a 6 million acquisition offer then got sued and lost it all.

Advice for founders on how to sell into health systems: Amit Mehta - BuildersVC

This one is packed with wisdom shared by Amit Mehta from Builders VC. Amit is an interventional radiologist and general partner at BuildersVC, which is a $450 million venture capital firm that invest across various verticals from seed to series B. He was humble, honest and transparent. His breadth and depth of knowledge and experience shine through his thoughtful answers.

We talked about his path from a physician to venture capital, tailwinds, artificial intelligence, how to incentivize prevention, lessons on hiring and more!

What is a good death? Raihan Faroqui - Gauranteed

I always learn from Raihan Faroqui, MD, he has a deep insight into the inner workings of the US healthcare system and how to grow a startup within it. It was a pleasure speaking with him and I think this is part 1 of many!

Raihan is a seasoned physician-entrepreneur. He is currently the Head of Medical Affairs at Gauranteed, a hospice startup. We talked about his journey from physician to entrepreneur, how to sell into health systems, the biggest problem in healthcare, death and identity.