Latest / StartUp Health NOW Podcast / Michelle Snyder Brings a Creative Spirit to Marketing and Investing

Transcript

Michelle Snyder Brings a Creative Spirit to Marketing and Investing · StartUp Health NOW Podcast

• 0:00
  [on-hold music] I also think that the best marketing is when you get other people to do your marketing for you, um, rather than me telling them how great the product is.
• 0:21
  And so one of the things we noticed early on were, you know, we would just get unsolicited emails from doctors about how amazing the product was, how it changed how they practice medicine.
• 0:33
  You know, we started thinking like, "How do we harness this?" Right? Now, how do we get these doctors to talk about us to their peers, and then who would be the best influencers?
• 0:43
  [upbeat music] Welcome to StartUp Health NOW, the podcast where we celebrate the entrepreneurs and innovators shaping the future of health. I'm Logan Plaster.
• 0:58
  Today on the show, we've got an interview with one of digital health's pioneers, Michelle Snyder. Michelle has done a bit of everything.
• 1:05
  She helped get Epocrates off the ground in the late '90s, which we'll cover in this interview.
• 1:09
  She worked as a chief marketing officer at Welltok, and she's been on the other side of the table, working as an investor assessing startups, first for InterWest Partners, and now in her new role at McKesson Ventures.
• 1:21
  She brings her years of varied experience to bear when mentoring early stage entrepreneurs, and she brought all that wisdom to our conversation today.
• 1:29
  This interview is an excerpt from a fireside chat we held in front of a studio audience of founders from the StartUp Health portfolio. So you'll get to hear some of their thoughts and questions as well.
• 1:38
  As always, if you want more inspiring content from healthcare's problem solvers, make sure you subscribe wherever you get your podcasts. Now on to the show.
• 1:45
  [upbeat music] Great to have you on, on this fireside chat, Michelle. As a way of introduction, I wanna go back a bit and get some of your story.
• 1:59
  As I mentioned, uh, at, in the opener, talking about your entry into digital health through Epocrates, which was founded in 1998, and is, uh, often cited as the first successful mobile health company, really the dawn of the iPhone.
• 2:15
  So I wanna start with that to kind of get some foundation of your experience. Uh, what were the market forces at play when you joined Epocrates, and some of the big challenges you were trying to solve at the time? Sure.
• 2:28
  Yeah. So, um, I, I've been in healthcare my whole career. So prior to Epocrates, I had spent time in healthcare policy in Washington, DC, and then in strategy consulting.
• 2:40
  And so then this was 1998, and I had moved out to San Francisco, and everybody and their mother went to work at a startup at that point, right?
• 2:50
  And half my business school class, I think, went to a startup in San Francisco. And I just kept thinking, "I can always go back to policy.
• 2:58
  I can always go back to consulting, but this just feels like a really special time with what's happening with technology," which is now it's funny looking back 'cause we didn't even have an iPhone then.
• 3:08
  We had a PalmPilot, which everybody thought was super cool. Um, so that was the technology development. But there was just something, like this energy and something interesting happening, and it...
• 3:21
  You know, probably one of my lessons for later was, so at the time, people were saying, "What can we do with a PalmPilot in healthcare?"
• 3:28
  And there were many companies trying to do things, but many of them were like a technology in search of a problem versus in actually solving a problem.
• 3:38
  But there were kind of three companies I was looking at, and two of them did I prescrib- e-prescribing on the PalmPilot, which at that time, you know, you know how fast it is for doctors to write a prescription.
• 3:51
  And so you'd watch them typing in the, you know, the PalmPilot and take forever to actually get the prescription. And I was like, "It's kinda interesting, but I don't really think doctors wanna do that."
• 4:03
  And then there was this company, Epocrates, that just really did something simple. It was just providing drug information on the PalmPilot for the doctor to look up. And the, the, uh, thesis was that doctors are mobile.
• 4:19
  They're moving around. When they're, they're not at a desk, and they can't flip through books to look up information, and much of the information was on the computer.
• 4:28
  They just need to look up, what's the dosing of this drug, right? What are the drug interactions? Is this drug covered on my patient's formulary? And so I remember, um, launching it in 1999,
• 4:41
  and I think we got, like, 300 doctors in the first day. I mean, it was crazy. We were s- we were so excited. And, um, it, yeah, it took off.
• 4:51
  I mean, it ended up being just this phenomenon with doctors, I mean, just going out to buy PalmPilots to use the product.
• 5:01
  And so that, um, I'll step back and also tell you about, uh, it wasn't a hockey stick, and it, it wasn't, like, this amazing ride to our IPO, but, um, but we definitely, like, were able to get doctors to adopt the technology.
• 5:16
  And Logan and I were talking earlier, you know, kind of what drove that, and I think it was a combination of actually solving a real problem that the doctor had.
• 5:27
  Um, I think we also saw that there was this element of peer pressure involved, right? Where, and we played it up on the marketing side big time, right? You know, do you know...
• 5:40
  Are, are you gonna fall behind your colleagues, right? Do you know what they know? Um, we spent a lot of time upfront getting the residents involved, right?
• 5:48
  Because we're like, "Who's going around with the older physicians," right?
• 5:52
  And if they're using this product, you know, some of the, uh, doctors that we thought might be tougher to get to adopt the product would see these younger clinicians using it and maybe get curious, and, and that's exactly what happened.
• 6:06
  So the original idea was just to have a free product. So we launched it. It was free.
• 6:11
  Any doctor could download it.But, um, um, the concept was that we would monetize through pharma and that is how we made most of our money.
• 6:21
  Uh, but the idea was if we built up a big enough network, there would be other things that we could do with that network. And so, um, we also then eventually...
• 6:32
  I, I, I launched and came up with the idea of having this freemium model where we would have the free product, which would be very good because I would say on average we probably were...
• 6:43
  You could- we could probably monetize a primary care doctor for several hundred dollars a month, and maybe, like, a specialist... Or sorry, a year, a specialist, five, six, $700 a year from pharma.
• 6:55
  But we also thought, you know, doctors love us. They might be willing to pay us directly as well, even though the free product is great. [laughs] Yeah.
• 7:03
  So we developed this paid product, and, um, that ended up doing really well. We, uh, it was, ended up being about a third of our business, so I think that was also one of kind of the first successful freemium models.
• 7:15
  Yeah. Yeah. I was gonna say, you must've been early in that business model- Yeah... because it was, you know, 2007, '8, '9 we started seeing that really come- Yeah... out more, more prominently. Yep.
• 7:24
  It was definitely very early. But, um, you know, going back to what you and I were talking about before, one of the interesting things was how...
• 7:32
  So I don't know how many of you remember, but, um, it was a very bubbly, frothy time back in, uh, 1998, 1999. I mean, I remember living in San Francisco.
• 7:43
  You had your choice of three parties a night for, like, tech companies and, like, free alcohol, like everything. It was, it was crazy out here. And, um, so we raised money.
• 7:56
  We, we got some great firms to come in initially, and, and then, uh, early 2000 hit, right?
• 8:03
  So that was the stock market crash, which I was looking back in the computer, the NASDAQ did not come back to the same level for 15 years. Wow. Right?
• 8:12
  So we had just gotten all this investment, we're super excited, our business was growing, and we weren't gonna need to raise money again.
• 8:21
  And even though we were able to get doctors to use our product, and they loved it, it was hard to raise money. So- Yeah... you know, over the course we had two reductions in force.
• 8:33
  Um, we actually pivoted our model once, maybe once and a half, uh, [laughs] yep, call it half pivot. Um,
• 8:41
  and it w- we had to be very flexible and be open to changes because we just were not expecting that to happen in the market, so.
• 8:49
  O- one of the reasons why you were so successful is that from a marketing standpoint you empowered physicians to be your champions, and- Yeah...
• 8:57
  I recall I was working from 2005 for a decade in the emergency medicine market, and I just remember how excited emergency physicians were.
• 9:05
  They became your evangelists, and I know a lot of folks on this call would love to have a marketing plan that involved getting thousands of doctors to become their evangelists. So m- maybe- Yeah...
• 9:17
  you could share some strategies around that. Why that... I mean, kind of obvious why that was important, but how did you do it? Yeah. So my, you know, I'm...
• 9:25
  It's probably 'cause I'm from the Midwest, I'm super cheap, uh, or frugal as I would like to call myself.
• 9:31
  Um, but one, I don't wanna spend a ton of money on marketing, but two, I also think that the best marketing is when you get other people to do your marketing for you, um, rather than me telling them how great the product is.
• 9:45
  And so one of the things we noticed early on were, you know, we would just get unsolicited emails from doctors about how amazing the product was, how it changed how they practice medicine, um, even admitting they avoided medical errors.
• 10:01
  I mean, most doctors don't wanna, like, say they make medical errors even though we know the numbers out there. But, um, you know, we started thinking like, "How do we harness this," right?
• 10:10
  And, "How do we get these doctors to talk about us to their peers? And then who would be the best influencer?"
• 10:18
  So couple things that we did, I think I mentioned this earlier, we started a medical school and residency program where basically we gave the medical students and the residents a free year subscription for, like, every year they were in medical school, and every year they were in residency.
• 10:37
  How did you go about, uh, accessing, uh, folks at that level? I mean, there, you could go to a, a fair, you know. H- how did you actually reach them at the medical school level? Yeah.
• 10:46
  Well, it was kind of top down, bottom, bottoms up.
• 10:49
  I mean, we, we actually had a plan where we went to all of the kind of the heads of technology at all the medical schools, and we said, "We will give you free subscriptions for all of your students," and there weren't many that didn't take us up on that because, you know, it's like a free subscription and it's a, it was a product that they saw valuable.
• 11:09
  But then we also... You know, it's very important to, like, mine your data and look at who's using your product, right?
• 11:15
  We went in and we identified the residents and the medical students that were kind of our super users, right, and that used us a lot. We could see they're in there looking up information 8, 12, 15, 20 times a day.
• 11:30
  And then actually went out to them and say, "Hey, would you like to be our Epocrates evangelist at Yale Medical School," right? And l- and most of them said yes. There were that, not that many that said no.
• 11:42
  And so we kind of had the, you know, top down from technology, but bottom up. And it's kind of interesting, the thing to me that was key was that we never paid... So, um, so that was kind of the medical students.
• 11:57
  But then we also tapped into the doctors, right? That, or the, you know, physicians who had been practicing for a while that loved us too, that would write us emails. And we said, "Okay, what do doctors crave," right?
• 12:10
  Doctors crave, um, kind of respect, recognition-Um, they also want to do what's best for their patients.
• 12:19
  And so we said, "Let's create this kind of exclusive group called the Epocrates Advocates who, um, will basically, like, pick some of the doctors and say, 'We have this group. Would you like to be an advocate?
• 12:32
  It's an exclusive club. Um, basically we will, we want you to tell people about us. Um, we'll even help you get, um, articles placed. We'll write articles for you.'"
• 12:44
  You know, and nothing that they didn't wanna say, but, you know, many of them also like to be seen as a thought leader in technology.
• 12:51
  So we identified different doctors in different media markets, um, you know, wrote articles on their behalf, they reviewed them.
• 13:00
  They're obviously busy, but if there's a nicely written article with their name on it that they agree with, they're happy if you, uh, you know, pub- put... You know, get that put, um, published somewhere.
• 13:10
  So, you know, we did all of that, and at first the advocate program I would say we were, like, 50 and 100 doctors. By the time I left, we had about 3,000 doctors in this exclusive program. Wow.
• 13:24
  So if you asked any of them, they'd say, like, there w- they were, like, there were probably 100 of them or 50 of them. Um, and I even remember I was on vacation one day. I was in Fiji randomly. I had never been to Fiji.
• 13:38
  I'm walking on this seemingly desert- deserted beach with my Epocrates hat on, and there's, like, one other person, and he passes me, and then he runs back after me. And he's like, "Do you know Epocrates?"
• 13:51
  And I was like, "Yes." And he's like, "I'm an Epocrates advocate. I was, like, their first advocate ever." Um, which was awesome, right? Because that was, like, the whole goal of the program is to make them feel special.
• 14:03
  And I had a, I have one FTE that was their only job. Wow. Their job was to cultivate, you know, the users who loved us, and, you know, you don't need to pay that person a lot of money.
• 14:14
  It just has to be somebody who's a people person- Yeah... friendly, wants to engage. And,
• 14:20
  um, and so I would say, you know, that was by far my, my greatest marketing success, and I really think led to the adoption that we saw at the company. That's fantastic.
• 14:31
  I mean, really foundationally creative marketing strategies. There's so many ways you could have sort of thrown money at the problem, but instead you thought differently about it.
• 14:42
  Um, I'm sure there's many folks on the call who would love to build a enthusiastic community of users.
• 14:49
  So, uh, if, if anyone wants to drop a question about that experience in marketing, you know, please go ahead and do so. Let's, we're gonna fast-forward a little bit.
• 14:58
  Uh, we could, we've just got a lot we could cover here. My understanding is that you, uh, when Epocrates came to a close, you moved to the other side of the desk and became an investor. Is that right? I did.
• 15:09
  In terms of your timeline with- Yes. I went to InterWest partners. InterWest. Okay. Yeah. Why? You were an operator for a long time. I'm sure you loved that. I was. Yep. Having your, getting your hands dirty.
• 15:17
  Why did you move into investment, and what surprised you about it? Yeah. So, um, I, I wouldn't necessarily say it was my plan, per se. So after...
• 15:28
  I mean, I, so I was at Epocrates for almost 12 years, and, you know, that's one of the other things people think, you know, companies are overnight success.
• 15:38
  10 to 15 years is how long it takes to build a digital health company. If you look at any of the guys that went public last year, um, think I even wrote this down. Yeah. I mean, One Medical, 13 years. Teladoc, 18 years.
• 15:52
  Athenahealth, 10 years. Livongo, 12 years, right? I mean, that is, like, the time, how long it takes, right? So when I look back now, 12 years seems so long, but it's kind of par for the course, right?
• 16:04
  [laughs] So, um, that's a long time to be at one company and a long time to, you know, just pour your heart and soul into something.
• 16:13
  And at that point I just, I was a little burned out, but also I thought, "Oh, there's, there's all these exciting things happening in healthcare that I don't know about 'cause I've been in my bubble here."
• 16:25
  And so, um, InterWest Partners, who was one of our investors, uh, asked if I would come on and help just do a short consulting project and help them think about what their investing strategy should be.
• 16:36
  But it was super fun, right? I was, like, up more at the 10,000 foot level thinking about the forces in the market and where I thought, um, there were interesting places to, to make bets.
• 16:48
  And then I ended up staying three years. So I, I, I evolved my role from consultant into executive in residence, which was a really fun, um, role.
• 16:58
  You spend half your time, um, looking for investments, but the other half time helping out portfolio companies.
• 17:05
  So that was a great balance for me because once y- once you've been an operator and you do that, like, it's in your blood, right?
• 17:12
  And, and that was one thing I didn't like about consulting, was you can tell people what to do, but at the end of the day you're not responsible for it. So- Sure... this was a good mix.
• 17:22
  I was looking for companies, but I was still helping and adding value. Um, yeah. So I stayed at InterWest for three years, and I think, um, you know, by that time I...
• 17:34
  That was kind of early in kind of the consumer, like, revolution, I would say.
• 17:38
  And so that's where I ended up, you know, getting more excited, is thinking about, uh, technologies that treat kind of the patients as a consumer.
• 17:49
  And also technologies that, um, start moving towards personalization, right? Where you're using data to figure out how to give people different experiences regarding their health. Got it. Okay.
• 18:03
  So, so fast-forward, that brings you to your time at Welltok. Yes. Uh, correct?
• 18:08
  How did you look at marketing differently at Welltok given your ex- your private, uh, previous experience at Epocrates?So Welltok was very, very different. We, um, Epocrates kind of had a singular focus, right?
• 18:22
  Get as many doctors onto the platform as you can, and then, you know, we will monetize it through mostly pharma, but a few other channels. So Welltok, um, and, and you know, this may be a lesson perhaps to many markets.
• 18:38
  That's probably what I would... [laughs] If you're asking me lessons for entrepreneurs, right?
• 18:42
  But the idea was we built this consumer health platform, and it was really relevant whether you were a health plan, whether you were a large self-insured employer, whether you were a provider health system.
• 18:57
  And so with just some tweaking of the content, right, or how you go after the member or the patient or, um, the employee.
• 19:08
  And so that was very different because I had, you know, a modest marketing budget, but going after very different markets.
• 19:16
  And I think, you know, selling to employers is very different than selling to health plans, which is very different than selling to, um, providers.
• 19:26
  And, you know, that, that actually is, is from my less-- or my experience, one of the, uh, kind of red flags sometimes I see when I look at companies is, okay, we're in this market, and next year we're gonna penetrate this market, and then the next year we're gonna penetrate this market, and, um, which you can do, but it is hard, and it's very different, and it requires resources, so.
• 19:48
  What, what would be your specific advice to the founder that you hear talking like that be-besides just saying, "I hope you have the resources?"
• 19:55
  [laughs] So, um, I would really wanna understand why they believe the product will be successful in that market. Who is the buyer? What are the pain points?
• 20:07
  Because I think if you look across the multiple markets, you'll probably see a tier, right? Like there's probably one of those markets that is going to be a better fit for you at the time.
• 20:19
  And I would say really try to-- There's so much opportunity and money in healthcare.
• 20:25
  Like try to really penetrate or excel at one market versus, you know, first, at least get a foothold before you start moving into the other markets. I think because it can distract you, um, and move your focus.
• 20:43
  And then also, you know, you might start realizing-- the other thing is kind of everyone says, "Fail fast," right?
• 20:48
  But, you know, I can-- I won't mention it, but there was definitely one market we sold into that, you know, we sold into for five years, and it was, it was way tougher than the other markets.
• 21:00
  And, you know, I probably wish we had stopped. I kept pushing to stop selling into that market. We didn't.
• 21:06
  But I think that, um, we may have been better off as a company, uh, focusing on fewer markets and, and doing it better. Interesting. Very interesting.
• 21:17
  Uh, well, that brings us up to your current role at, uh, McKesson, which I'm excited to get into. Yeah. But before we do, I'm gonna take one question from the chat from Mehmet from Cleexa.
• 21:26
  So why don't you come off mute and go ahead, introduce yourself, and ask away. Hi, Michelle. Thanks, Logan. This is Mehmet from Cleexa. I'm the founder and CEO of, uh, this platform. We have been around four years.
• 21:38
  We're doing, um, full end-to-end patient engagement, um, on a mobile, um, kind of, um, form.
• 21:46
  I actually, um, have seen McKesson invested in the past into Change Healthcare, which we are actually, uh, a great partners with. We started using that angle.
• 21:56
  Um, what I'm wondering is, um, I know you have been sitting on the board with, uh, 3M Ventures as well, with Propeller. That was an investment. I'm trying to understand your investment strategy.
• 22:07
  If it's-- I-is it really the same idea with 3M investing in a Propeller in a market that they wanna be focusing on? Um, if so, that's the case with McKesson Ventures.
• 22:18
  What is the next, um, subspecialty specific or patient journey phase that you're focusing on, um, if you can give us any ideas strategically? Um, yeah.
• 22:29
  I think that's probably a great lead into where you're going with it. [laughs] Totally. Uh-huh. Perfect. Um, yeah.
• 22:35
  So let me tell you guys a little bit about McKesson Ventures, 'cause I, I know, um, being on the other side, that is always important to kind of understand the different,
• 22:46
  you know, venture groups out there and where they invest, which is kind of the main thing. You don't wanna waste your time talking to people who really aren't going to invest in the area that you're playing in.
• 22:57
  Um, so McKesson Ventures, we're a four hundred million dollar fund. We've been around six years, made thirty-six investments. And I joined relatively recently, so, you know, I will do my best here.
• 23:08
  I've, uh, been here about seven months now.
• 23:12
  But, um, the I-- the concept behind it is that, um, we're pretty balanced versus other corporate venture groups, and we can talk about that later, like how you should think about corporate venture groups, right?
• 23:26
  But you kind of have two spectrums. One is financially minded, more kind of like an institutional investor. The other is strategic mind, right? And so most corporate venture groups fall somewhere on that spectrum.
• 23:41
  Um, you know, there are some corporate venture groups who only invest in companies where they already are working with that company, right?
• 23:48
  Um, and then there are some corporate venture groups that only invest in companies where they know they wanna do a deal with that company, right? Or it's assumed a deal will get done.
• 23:58
  We're probably a little bit more on the, uh, financially minded side, right? Where we're really looking at the companies, you know, is this a big market? Is this a great team? Is this a great product, right?
• 24:11
  Will we make money from these, this investments? And do we believe that this company will be successful? Um, but we also have our McKesson hat on in terms of strategy, right?
• 24:22
  And, you know-Is this company in an area that provides us insights?
• 24:28
  And is this company in an area where there could be some business value to McKesson, right, and possible partnerships with different, the different business groups? So we kind of y- have those two hats on.
• 24:41
  We definitely make investments in areas that are outside of the core of McKesson, right, especially, um, where healthcare is going, right? 'Cause we wanna be skating to the puck, not, you know, where the puck is.
• 24:54
  But, you know, the best outcome for us is if we find a company to invest in that is a great company, meets all the kind of financial criteria, and could be a good fit with McKesson.
• 25:05
  So to give you a sense of the areas, it's changed a little bit over the years. I would... So today, where we're probably spending our most time are the following areas. Um, biopharma clinical and commercial services.
• 25:20
  So, you know, we look at a- anything selling into pharma. Not, you know, discovery per se, but, um, it could be, uh, around real-world data, real-world evidence.
• 25:32
  Could be around clinical trials, um, tools that help pharma with, um, connecting with patients, medication adherence, things like that. Um, another area is kinda the, uh, transformation of pharmacy. So thinking about...
• 25:50
  And you guys have seen this over the last couple years, right, how pharmacy is changing, right? People aren't all, like, char- going to the brick-and-mortar pharmacies, right?
• 25:58
  With online pharmacy and more thinking about patient convenience, right, and how that's changing the world of pharmacy, and then also how the role of the pharmacist is changing, right?
• 26:09
  And, and how can you use the pharmacist potentially in a different way. We are McKesson, so, uh, we are usually always looking at things related to oncology.
• 26:21
  Um, not really, uh, drug development or devices or diagnostics, so less on kind of regulatory risk and more on operational risk, but what are, you know, kind of the tools and technologies that could help advance, um,
• 26:37
  oncology care, you know, help oncologists, but also help advance patient care. Val-, um, value-based care.
• 26:45
  So we're very excited about kind of tools and technologies that can support clinicians in this value-based world. Um, it, it's still been slow. We've been talking about value-based care forever.
• 27:01
  I do think it's picking up, and I do think COVID is push- you know, has pushed that a bit, and I'm, I'm hopeful we will get there so, so we actually get to a healthcare system where, um,
• 27:12
  you know, you get what you pay for, right? So [laughs] if you're in a value-based world, you'll [laughs] get, you will get more value. Um, but we are in a couple companies in that space, too.
• 27:23
  And then I think the other area we made a recent investment is the, the, you know, kind of alternative sites of care. I don't wanna just say virtual, 'cause I don't think it's just virtual, right?
• 27:34
  But, um, what moving care to the home, right, or virtual or outside of what has traditional been the patient journey, so that area, too. So I, I hopefully that was helpful. That's great. I think. That was great.
• 27:49
  Thank you. Thanks for the question, Mehmet. Um, Michelle, assuming that a startup is a, a good market fit, and you, you gave a pretty, pretty broad list there.
• 27:59
  Uh, you said it's also gotta have a great team, it's gotta have great metrics. Let's drill down on the two of those. Yeah. Uh, in terms of great teams, and you've been, uh, at multiple startups.
• 28:08
  You understand executive dynamics. What are you actually looking for? What are some of the mindsets that you are looking for in a team?
• 28:17
  Uh, maybe even mindsets and abilities that would, you know, allow you to take a risk on a team. You- you're not quite sure- Yeah... but man, this team is, is it. So what are some- Yeah...
• 28:27
  of those things that you look for? Yeah. Um, so being in healthcare so long, I am probably biased towards, uh, you know, I'm one of those old fogies that's probably like, "Healthcare is really complex.
• 28:41
  You need to have people that really understand healthcare."
• 28:43
  Um, but I do think you need some other team members that come from outside of healthcare, right, that kind of bring a different perspective and some different thinking.
• 28:54
  'Cause those of us who have been in healthcare forever, I mean, there's definitely days where I'm like, "Oh, I just wanna go do marketing, you know, for, uh, Lululemon or something," right, where [laughs] I'm not dealing with all this healthcare stuff.
• 29:07
  Um, but, you know, the reality is I love being in healthcare. So I, I think, um, kind of a...
• 29:14
  People on the team have to have some real knowledge and experience in healthcare, but kind of also other people that, um, whether it be, like, amazing marketing experience, right, or technology experience, um, where you're kind of complementing that with the healthcare, um, understanding.
• 29:36
  I think that... And this is kind of hard to measure. You just get this by talking to the entrepreneurs, right? But people who are adaptable and flexible, I mean, there, there's...
• 29:48
  Your, your company is not gonna look the same at the beginning as it does five years later, right? I mean, it's just not gonna happen. Like, things change. The market changes.
• 29:59
  You realize, hey, there's a much better opportunity over here. And that requires kind of being flexible and adaptable and, you know, failing fast and not kind of being wed, "Well, this was the idea.
• 30:13
  We are going to do this."
• 30:14
  Um, and I feel like sometimes you can, uh, get that from, like, meeting with the team and talking to them, like, how they talk about what they're doing, you know, their openness.Do you feel like, do you feel like you can- I would say those are kind of- Sorry, do you feel like you can get that over, over Zoom?
• 30:30
  Uh, we, we've gotten... gone through a phase now where it's like can you- [laughs]... execute a big deal without meeting somebody in person? Yes. I mean, it's always better in person.
• 30:42
  I mean, there are just things you pick up like having dinner with somebody, right? Sure. And being in the office and talking to them in person, um, it's not 100% the same.
• 30:54
  Um, and I'm, I'm excited to get back to those days, but, you know, you do what you can. I, I still think you can pick up, you know, a lot, um, visually, right? Like, just how they speak to you, right?
• 31:10
  Like listening skills. Yeah. Yeah, things like that. Awesome. Uh, we've got another question in the chat from Andre, uh, Diamont from Gray. So Andre, why don't you come off mute, ex- explain what you do, and ask away.
• 31:24
  Yes. Hi, Michelle, thank you for the insights.
• 31:26
  Um, so, uh, at Gray what we're doing is basically building a platform to unify the various sub-disciplines within oncology, chemotherapy, radiation therapy, surgery, and then use that sort of unification to optimize and automate the entire logistical workflow across those three sub-disciplines.
• 31:43
  Um, a big part of that is also putting it in the hands of the patient and allowing them to have more information and trust in the system, um, by understanding that their provider across all these disciplines that is part of their single treatment sees it the same way.
• 31:59
  So my question was sort of as an investor and an entrepreneur relative to each other, how highly do you value the various value propositions?
• 32:06
  And to put that simply, you have the one side, which is just straight up reduction in operating costs for the- Yeah...
• 32:13
  uh, for the healthcare provider, and on the other hand you have an improvement in patient experience, which is less quantifiable, but also very important. Um, so, so I wanted to know sort of how do you compare those two?
• 32:26
  Um, yeah, that's a good question. I would say, well, the way I think about it is probably a little different.
• 32:35
  I'm not sure I'd put a specific value on that, but, you know, you know, in the ideal world, like, you know, the ideal company you wanna invest in, it's a win-win for everybody, right?
• 32:44
  I mean, that, that always said so beautiful about the Apocrates business model, right? Doctors benefited, they saved time.
• 32:52
  Patients benefited, less errors, and pharma benefited 'cause they had access to doctors that they normally wouldn't have access to. And so
• 33:04
  I think the more kind of win-win situations that you have and that you can talk about is super important. I don't necessarily know if one is, at least for us, kind of more important than the other.
• 33:18
  It just has to be that it's solving a real problem, right? Right. Or, and providing a real value. The other, the other question actually I, I tend to ask people is, um, who,
• 33:31
  who's gonna be mad if you're successful, right? [laughs] Because that also kind of tells you about...
• 33:40
  'cause there's other forces, you know, for example, there's a company we were looking at and they were in a market where there are two giant, giant multi-billion dollar players that probably don't want this company to be successful, right?
• 33:53
  It's not that you don't want to invest in that company, like, I love those type of markets, right? I like the David and Goliath story too, but you kinda, you just need to be cognizant of that, right?
• 34:04
  And understand that you are gonna be hitting some, like, headwinds, right? So, so I'm also thinking about that as an investor, like, where's the value, but also
• 34:15
  what are the challenges that you're gonna face even if there are these, like, major obvious benefits for two different groups. It... I don't know if that answered your question, but- Yeah, yeah, it does.
• 34:28
  If you don't mind, Logan, I, I had a quick follow-up. Is that okay? Sure. Um, so the follow-up is now if we zoom in only on the financial side. Yeah.
• 34:35
  What about a reduction in operating costs versus an increase in potential top line?
• 34:39
  It's kind of two sides of the same coin, where you can look at an increase, a 10% increase in efficiency, you can market that or frame that as we're saving you money, or you can frame- Yeah...
• 34:48
  it as we're giving you the potential to make more money. Yeah. In, in your experience, which do you find more successful and why? And I know that's a very broad question. [laughs] Yeah, it's really hard.
• 34:56
  I mean, I think it also depends who you're selling to, right? And, like, what they're thinking more about, right? Because there's different people within the organization.
• 35:08
  So that's where it's really important to match the value prop to the buyer, right?
• 35:13
  Because I've seen that with some companies where they're over here selling on cost reduction, and the buyer is thinking about, like, how do I make more money? Like, they don't care that there's cost reduction, right?
• 35:25
  They're like, "I need to generate more revenue and bring that into my organization." So I guess to me it's more, it's not one is necessarily better, it's like is it the right match? If that makes sense.
• 35:37
  Is it specifically an area where everybody is bleeding money and needs to be s- cutting their costs versus- Yeah... people are more thinking of- Yeah. Okay. That's good. Yeah. Thank you very much.
• 35:46
  It's a great question, Andre.
• 35:48
  Uh, Michelle, you sort of touched on this a little bit before, but maybe you could talk a little bit more about the relationship between McKesson Ventures and McKesson the corporation, and, you know- Sure...
• 35:58
  the ability for a company that's collaborating with you as an investor to trial something on the McKesson platform, et cetera, et cetera. Yeah. So, um, that is a great question. I get that.
• 36:09
  I get asked that all the time, and if I don't get asked it, I make sure to tell people they should ask me that. So you guys should all ask that to investors that you're talking to, right?
• 36:19
  [laughs] Like, how is that gonna work? So, um, as I mentioned kind of before, we have the financial hat and k- and the kind of insights partnership hat.
• 36:28
  And so-When we make an investment in a company, I will be very clear and say, "I cannot guarantee you will get a deal with McKesson." Right?
• 36:37
  I mean, part of why people would like us to invest in them is, you know, to have a partnership with McKesson [laughs] and do something with McKesson. Sure. Um, but McKesson is a large organization, right?
• 36:49
  And we're the venture firm. McKesson has 230 billion in revenue. Um, so I can never promise anything. Um, what I can promise, though, is that I will... A- and it's not just me.
• 37:00
  So we have, um, a portfolio development team. We have two individuals that are kind of the liaison between McKesson Ventures and corporate McKesson.
• 37:10
  And their job is, um, to try to figure out, once we make an investment, you know,
• 37:17
  where we think there could be some value within McKesson by partnering or working with the investment, and try to figure out who the right person is to introduce them to.
• 37:28
  So, so I can't guarantee you'll get a deal, but I can guarantee, like, we'll try to get you to the right person. You'll get to the right person faster than you could if you... we were not an investor in you.
• 37:39
  And, you know, probably the deal will, will be a little bit better than it, you know, as w- being your investor is not, um... But I just, I don't think it's fair to promise that to entrepreneurs, 'cause I've seen that.
• 37:54
  And that's why a lot of companies want strategic investors.
• 37:57
  And this is where it's really important to, you know, to understand the strategic investor, 'cause there are definitely strategic investors out there that if they invest in you, it's because
• 38:06
  you're gonna do a pilot with them, right? Yeah. Or you are going to have a deal, and so that's really important to understand. But, um, you know, we do work really hard trying to introduce the companies around McKesson.
• 38:19
  And also, you know, there's been a couple companies, even since I started, that are too early for us to invest in. Um, and I, I can talk a little bit a- about that, where we invest.
• 38:29
  But, um, I really like the company, and I'm gonna follow this company and, like, hopefully be ready for the B round or the C round. Um, and I might wanna already start introducing them in McKesson, right?
• 38:42
  And- That makes-... and getting some introductions going. That makes tons of sense. Uh, let's go to Richard Hanbury, uh, in the chat. He's got a question. Uh, he's from Sana Health. So Richard, why don't you go ahead?
• 38:54
  Uh, thanks, Logan. Yeah. We do, um, um, at-home mental health and pain relief with, um, audio-visual, uh, neuromodulation.
• 39:03
  Um, and my question sort of dovetails nicely, uh, with, you know, what, what, what size and s- uh, stage and check size.
• 39:10
  Um, we, we just got breakthrough status from the FDA, so our, uh, timeline of expected approval has just been brought forward very nicely.
• 39:19
  Um, and we've probably got until about Q- end of Q1, beginning of Q2 before we can, uh, manufacture at scale. So questions around, you know, check size. Do you lead, um, at home?
• 39:32
  And does h- a- at home health fit that new bucket that, one of the new buckets you were talking about? Yeah. So, um, I'll do the latter one first. So yes.
• 39:40
  So at-home health to me, you know, we're definitely starting to look there more. I mean, that to me falls in the bucket. That's why I don't just call it virtual care, right? Alternative, you know, sites of care, right?
• 39:52
  Whether it's virtual or at home, right? But, but letting patients and consumers get healthcare, you know, where they want it, when they want it, how they want it, right? Which would include home care.
• 40:07
  In terms of where we invest, so we typically, uh, and everything is different now, right? I mean, I would typically in the past say we invest in a Series B, but A is now B, right? I mean, every,
• 40:22
  g- the dollars out there are just crazy, and, uh, things are a little different than they used to be. So what I will typically say is, um, we need to see some meaningful revenue.
• 40:32
  Um, typically, like, we don't invest in companies before they're at 3, 4, 5 million dollars in revenue. Uh, and typically we're looking to invest where, you know, there's kind of a commercial...
• 40:44
  They're at a commercial inflection point, right? And really kind of ready to scale.
• 40:48
  So already have product market fit, already seeing, as I mentioned, generating revenue and seeing some success, and are kind of ready to k- kind of take off. We, um, typically, uh, well, there's no typical.
• 41:04
  We can write a $2 million check. We can write a $10 million check first time we come in. You know, it depends on the company, how big the round is. We also, um, are pretty flexible in terms of leading or not leading.
• 41:18
  I would say most of, more of the time we don't lead. Uh, we can lead, but in, I would say, more of the cases, we come in as part of a syndicate.
• 41:28
  Um, if it's something, probably the situations where we would tend to lead more is if it's, like, directly relevant to McKesson, right? And it really kind of fits with the core businesses. Awesome. That was very helpful.
• 41:43
  Thank you. Thanks for the question, Richard. Uh, let's go to a question from Everardo from Prescripto about investing in Latin America. Go ahead. Yeah. Hi. Hello. This is Everardo from Prescripto.
• 41:56
  Uh, what we're doing is electronic prescription infrastructure for Mexico and, in the future, LatAm.
• 42:03
  So the markets here are in a much earlier stage than they are in the US, and I'm interested to hear what you think about investing in LatAm, because there are many things that can be applied there.
• 42:14
  But there's also a massive arbitrage opportunity where you can invest a very small amount in US dollars and have a asymmetric impact, um, o- on the market. Thanks. Yeah.
• 42:26
  Yeah, no, it's a great question, and I, I agree with you. I think that, um, there are definitely opportunities outside of the US. Uh, for McKesson, we don't typically invest outside of the US.
• 42:38
  Um-With the exception possibly of Canada and maybe Europe, um, just because McKesson has large business presence there. Um, but typically we're just investing in US companies, um, unfortunately.
• 42:54
  I probably would like to look at some other countries [laughs] aside the US. [laughs] Thanks, Michelle. You're welcome. Do you think this will change in the future? After COVID, things have moved around quite quickly.
• 43:05
  Uh... Do you think it might change? I don't think so. I think that would be one of the areas of kind of our investment thesis that probably would change less versus
• 43:16
  adding additional areas, right, like behavioral health or, you know, what, that, that versus going to different geographies. Thanks for the question. Thanks for the question, Everardo.
• 43:29
  Um, you know, we're getting towards the top of the hour so this is our chance to sort of think more big picture.
• 43:34
  Uh, given your, your breadth i- in the marketplace, and thinking about how much COVID really shifted things over the past year, I'd love for you to just, um, talk to us a little bit about ways in which you feel like the market has changed, uh, in ways it's, it's not gonna go back to a pre-COVID reality, and kind of what some of those major forces are that you're watching for the next year.
• 43:59
  Yeah. Yeah, I mean, for me, and I, and many people have talked about this, right? But really kind of what's changed for me with COVID is just kind of access, you know, access to care, right?
• 44:17
  I think that just this whole experience has proven on many levels that maybe the way people thought about how people got care and where they had to get care doesn't have to be that way, right?
• 44:29
  And it's not just getting care, it's even, you know, on the pharma side, you know, things like clinical trials, right?
• 44:34
  If you look at all of the delays, I mean, the billions of dollars of delays in trials because people couldn't get to the facilities, right, you know, that's starting to wake people up to the fact of, you know, why aren't we mixing in, um, you know, remote trials into our mix, right?
• 44:52
  Or having kind of this mix. So I think where we're go- I think there will be some shift back from, uh, the numbers we saw with virtual care. But I think where we will end up is kind of more in this hybrid world, right?
• 45:06
  And you're seeing that with a lot of the companies that, um, are raising a lot of money and that I think will be successful, is that you might start virtual, right, or maybe you start thinking about how you can do things virtual, but virtual's not gonna work for everybody, right?
• 45:22
  And if you're thinking about, and that's the other big thing, right, personalization and, you know, not this end of one thinking in healthcare, is that have, you know, you need a mix.
• 45:33
  You need to figure out when virtual works, um, when home works, and when you kind of need the brick and mortar, right? Uh, or how do, how do you think creatively?
• 45:44
  Maybe you send out your Airstream trailer, right, to a community and things like that. And so, um, I think- Are there-... all of that, th- those discussions are on access.
• 45:54
  Um, I think another area is who provides the care. I think that people have kind of been rethinking.
• 46:03
  It's kind of forced people to rethink, you know, do we really need somebody who's at the top of their license doing this, right? Sure. Sure. Can other people provide these services?
• 46:13
  And especially I think with some of the new, um, primary care models are interesting, right, 'cause many of their, the thesis is that a primary care doctor and/or a team,
• 46:26
  you know, can probably do 70% of what a specialist was doing, right? Sure. And rethinking how that works and, like, when you pull in specialists. So I think that's another area.
• 46:37
  I think also it's COVID, but it's also kind of the, the social changes that we've seen happening kind of at the same time. We had, wow, 2020 was a big year. Um, [laughs] you know, that happening too, right?
• 46:51
  And I think, you know, you're seeing so many companies that are really thinking more about the patient, right, and the consumer, and having different experiences based on, um, age, right, or based on gender, or based on race, right?
• 47:08
  And I think we're gonna continue to kind of see that personalization and youl, you're seeing that in therapies, right, um, kind of personalized, um, medical therapies too.
• 47:20
  And so I think that will continue with COVID and then, you know, underlying that is having the right data, right, and understanding, you know, how do you identify the right people, right?
• 47:33
  How do you identify who you should be reaching out to? How do you identify who you should not be reaching out to? 'Cause they're not gonna be receptive to you. You're not gonna have an impact on them, right? Yeah.
• 47:42
  And that's almost as important in some cases, right, than having a blanket approach. And so pull, you know, pulling in more of kind of the social determinant of health data, right?
• 47:53
  Like I've always been a big believer that, like, claims data and clinical data is not enough if you're really trying to understand the consumer or the patient, and really thinking through the patient journey, and not having the patient journey of the lens from the provider, which I think is kind of one of the things that's been upended in COVID, right?
• 48:15
  So having that data and understanding somebody with more of a 360 degree view. Love it. Uh, you, you are, you are dropping a lot of wisdom. Um- [laughs]... I'm taking furious notes over here.
• 48:28
  We've, we're reaching the top of the hour. Now is the point when we give you the opportunity, uh, as the audience to share your insights if you'd like.
• 48:36
  Uh, something you've heard from Michelle that you'd like to reflect back to the group. Drop your name or your thought in the chat if you'd like. Uh, I have one more question and a couple insights of my own.
• 48:47
  Um, uh, to start it off, uh, I wrote down here 10 to 15 year overnight success. Yeah. [laughs] How important it is to remember the actual time it takes.
• 48:57
  Because, I mean-That's a long ti- it can feel emotionally like a long, long time.
• 49:03
  A- and I think, uh, we can be told by the culture that, you know, you should move on to the next thing every five or seven years, whatever the time period is, that you should keep changing.
• 49:13
  Um, but that long-term commitment, which is one of the big Health Moonshot mindsets that we talk about a lot, long-term commitment is such a key component to success.
• 49:23
  So I loved, I loved you mentioning that, and also this idea of having, uh, potentially having outside healthcare talent on your team, having diversity of thought, um, and, and how important that might be to you, um, as someone who's assessing an opportunity.
• 49:43
  And then my final question to you while we wait and see if anyone would like to share their insights, is around the fact that you have been on both sides of the table as a female executive in healthcare startups and as a founder, and I know there's a lot of folks on the call who would love your advice for, for female founders.
• 50:02
  Uh, you know, going into that investment meeting, um, you know, what your experience taught you about what works and what doesn't. Yes. Oh, oh, so many thoughts on that area.
• 50:14
  Um- I'm sorry to drop that with you at the very top of the hour. [laughs] We could have a whole other discussion. Oh, I know. Um, so it's tough. I'm not gonna lie. It is...
• 50:25
  You will face more challenges than you do as a male executive. Um, but I think number one is being aware of that. Um, I think, you know...
• 50:38
  A- and I didn't talk about this before, but I think one of the most important things is picking the right investor. Now, that can sound easy, right? Especially when you're having trouble raising money, right?
• 50:48
  Like, there's some points where you're just like, "Just somebody give me money," right? Like, I don't care.
• 50:52
  [laughs] Um, but having the right investor that, you know, is looking, like, who are the firms that invest in women, right?
• 51:00
  I mean, there are firms out there, right, that, like, especially, um, firms that have, you know, multiple women VCs or were started by a woman, right?
• 51:10
  I mean, I know many of these women and they, they want to help other women succeed. Now, they're not gonna invest in a women-led company if it's not as good as another company, [laughs] you know, they're looking in.
• 51:21
  Or th- you know, they may, to give a chance, but, but there are so m- th- there are so many great women-led companies that just deserve a chance.
• 51:31
  And so I think it's looking out for people who've already s- made commitments and said, like, "We actually, like, are pro women."
• 51:38
  And also, I will have to say just sitting kind of in an investment seat, and this is more at my days at InterWest, um, there are differences in how women pitch.
• 51:47
  Um, and I think you need to be cognizant of that, and it used to, it used to really bug me because... And I don't wanna generalize women, right, but I'll make s- a somewhat generalization, right?
• 51:59
  Just to make the point, right? Is, um, women tend to come in and be more realistic, right? They're more real. They're telling you, like, "This is the business. This is what I think we can achieve.
• 52:11
  Here are some of the challenges that we face." You know? Ba-um. Um, in many cases, uh, men, uh, not all men, right, but will be more, uh, "This is a $5 trillion market, and blah, blah, blah.
• 52:28
  Nobody else is in this space, blah, blah, blah." Right? And I will meanwhile be sitting there, like, writing down, like, all the questions I'm gonna ask.
• 52:35
  But that, that kind of, like, confidence and, like, you know, bravado, um, can be seen as a positive. And so I think for a woman, just kind of realizing, like, if you have more of the tendency to
• 52:52
  be more realist, right, you know, like, you gotta find that right balance of, like, pumping up your company,
• 53:00
  talking about how great you are, right, showing why this is an amazing investment and that investor's gonna be stupid if they don't invest in you, um, but don't... But you don't wanna be untrue. You don't wanna lie.
• 53:12
  You don't wanna misre- misrepresent. But I think I do see more women kind of underrepresenting their business, so.
• 53:21
  Jean Anne sa- uh, uh, reminisces about 1998 when she was doing her first semiconductor startup, and, uh, remembering how crazy of a time it was.
• 53:30
  Uh, which is a great note to conclude on, Michelle, because it just highlights the, uh, breadth of experience that you bring to this conversation, really understanding multiple ends of the market over a long, committed timeframe, and also different types of businesses.
• 53:47
  Uh, and I think I speak for everybody, everybody when I say, uh, thank you for, for sharing a lot of your wisdom with us, uh, over the last hour. Thanks for listening to Startup Health NOW.
• 53:56
  Startup Health invests in health transformers from around the world who are committed to achieving audacious health moonshots.
• 54:02
  If you wanna learn how you can join this community of entrepreneurs, or if you wanna connect with one of our 350 companies, go to startuphealth.com.
• 54:10
  If you'd like to learn how you can invest in our Health Moonshot Rolling Fund in collaboration with AngelList, go to healthmoonshots.com. Thanks for listening to Startup Health NOW.