Latest / Vanguards of Healthcare by Bloomberg Intelligence / Aegis Ventures’ Blueprint for Building AI-Native Companies

Transcript

Aegis Ventures’ Blueprint for Building AI-Native Companies · Vanguards of Healthcare by Bloomberg Intelligence

0:20
Speaker 1: Welcome to another episode of Boomberg Intelligences Vanguards of Healthcare podcast,
0:24
Speaker 1: where we speak with the leaders at the forefront of
0:26
Speaker 1: change in the healthcare industry. My name is Jonathan Palmer.
0:29
Speaker 1: I'm a healthcare analyst at Bloomberg Intelligence, the in house
0:32
Speaker 1: research arm of Bloomberg. We're very excited to have John
0:35
Speaker 1: Beatle with us today in the studio. John is the
0:37
Speaker 1: co founder and managing partner of EJIS Ventures, which was
0:40
Speaker 1: started in twenty twenty one with a focus on digital
0:43
Speaker 1: health and AI. Prior to starting, he spent half a
0:47
Speaker 1: decade at apl Group, a private investment firm. While EGIS
0:50
Speaker 1: is relatively new to the venture scene, it's partnered with
0:53
Speaker 1: a number of leading healthcare systems like Northwell, UPMC, and Oshner,
0:57
Speaker 1: among others, through its digital consortium. Welcome to the podcast, John,
1:01
Speaker 1: Thanks for having me. Jonathan, great to be here. Why
1:03
Speaker 1: don't we set the stage for the thirty thousand foot view?
1:05
Speaker 1: Where does AGIS sit in the venture community?
1:08
Speaker 2: So you just is a venture studio, So we co
1:10
Speaker 2: found new companies from the ground up in partnership with
1:13
Speaker 2: large health systems as you highlighted, Jonathan, within that mandate
1:17
Speaker 2: we have a lot of flexibility in terms of how
1:19
Speaker 2: we can build new things, so we can start from
1:21
Speaker 2: the ground up. We'll build around teams of investigators, we
1:24
Speaker 2: can do carve outs or spinouts of business units, and
1:27
Speaker 2: then we can do M and a that we can
1:28
Speaker 2: build on top of. But the ethos is really we
1:31
Speaker 2: want to use transformative new technologies to be able to
1:34
Speaker 2: co create something that is brand new and novel and
1:37
Speaker 2: that solves a major pain point in the overall ecosystem.
1:41
Speaker 1: No, that's a great that's a great summary. So maybe
1:43
Speaker 1: we'll rewind a little bit what brought you to the
1:45
Speaker 1: point where you wanted to found this firm.
1:46
Speaker 2: So, as you mentioned in the intro, I was working
1:49
Speaker 2: at APL Group, which is a very flexible global investment firm,
1:53
Speaker 2: was focused primarily on new business creations. So I built
1:56
Speaker 2: a data center business for US in Asia and Southern
1:59
Speaker 2: Japan where we're building a gigawatt campus in Qshu, which
2:03
Speaker 2: is the southernmost style and in Japan. Was also doing
2:05
Speaker 2: a lot of early stage investing for US, where we
2:07
Speaker 2: had made a lot of investments in early stage healthcare
2:10
Speaker 2: and life sciences companies and was seeing all the transformative
2:14
Speaker 2: improvements that there had been in healthcare AI going back
2:17
Speaker 2: eight plus years, and we started working with health systems,
2:21
Speaker 2: you know that long ago. Northwell was our first partnership,
2:25
Speaker 2: did a number of investments together, saw a lot of
2:27
Speaker 2: synergy in that partnership, you know, started to meet with
2:30
Speaker 2: other health systems and saw that there was a need
2:32
Speaker 2: for an innovation partner to be able to help them
2:35
Speaker 2: transform themselves, drive new margin back to the system, and
2:39
Speaker 2: also solve core challenges that they're facing using technology. And
2:44
Speaker 2: you know, Pitch the founder and chairman of apl on
2:47
Speaker 2: launching a new platform which became Aegis, and we thought
2:50
Speaker 2: the most transformative impact would be delivered by not just
2:53
Speaker 2: investing in things that already existed, but co creating new
2:56
Speaker 2: initiatives in partnership with large incumbents that are eco to
3:00
Speaker 2: transform themselves and diversify margin and revenue. And so that
3:04
Speaker 2: was really the genesis of what became ME.
3:06
Speaker 1: Just so, what were some of the projects that you
3:08
Speaker 1: worked on in conjunction with maybe let's just say north
3:10
Speaker 1: Well that you highlighted back back in the day.
3:13
Speaker 2: So back then it was just a lot of early
3:15
Speaker 2: stage minority venture investing. But I think through that experience,
3:19
Speaker 2: we saw the extent to which health systems were going
3:22
Speaker 2: to need to transform themselves to be able to meet
3:25
Speaker 2: the modern age. And I think the thing that I
3:27
Speaker 2: was most interested by was the fact that healthcare, relative
3:31
Speaker 2: to other industries, has had this significant productivity trap over
3:34
Speaker 2: the last couple of decades. Most industries have had greater
3:38
Speaker 2: than fifty percent improvements in productivity over the last two decades,
3:42
Speaker 2: healthcare had not. Many argued that it's actually become less
3:45
Speaker 2: productive as we've brought new technology into the fold, and
3:49
Speaker 2: so it became evident to me that healthcare was going
3:51
Speaker 2: to need to catch up in that regard, and that
3:53
Speaker 2: just given the huge new wave of care that's going
3:56
Speaker 2: to be required as the baby boomers are retiring and
4:00
Speaker 2: our countries getting older, the technology was going to have
4:02
Speaker 2: a huge role to plan that. And so none of us,
4:06
Speaker 2: you know, saw what was going to happen with CHRAT,
4:07
Speaker 2: GPT and JENAI.
4:08
Speaker 3: It's been a huge accelerant to all of our work.
4:11
Speaker 2: But from a structural perspective, you know, we were going
4:14
Speaker 2: to need to be able to develop new technologies in
4:16
Speaker 2: close partnership with health systems, built by health systems for
4:20
Speaker 2: health systems, not you know, folks having technology thrust upon
4:24
Speaker 2: them that don't integrate with workflows, that don't align with
4:27
Speaker 2: their day to day realities, et cetera, which is a
4:30
Speaker 2: lot of how the last generation of health tech companies
4:32
Speaker 2: were built. So we just saw a huge pull for
4:35
Speaker 2: this type of approach. Maybe tease that out a little bit,
4:38
Speaker 2: you know, with the thesis that you started with. Obviously
4:40
Speaker 2: maybe it's shifted a little bit in the last couple
4:42
Speaker 2: of years. I mean, it sounds like the original thesis
4:44
Speaker 2: was focusing on technology and digital, but now it's morphed
4:47
Speaker 2: into AI. Is that a fair fair statement? So we've
4:49
Speaker 2: always been focused on AI from the very beginning. I
4:52
Speaker 2: think what is now possible leveraging these novel forms of
4:56
Speaker 2: AI is now totally different than it was a couple
4:58
Speaker 2: of years ago.
4:59
Speaker 3: And when you you look at the first.
5:00
Speaker 2: Wave of healthcare II, a lot of it was deeply
5:03
Speaker 2: clinical and deeply regulated, and so it would only affect
5:07
Speaker 2: narrow elements of the overall set of workflows that exist
5:11
Speaker 2: within health systems. When we saw CHATGBT launch and GENI
5:16
Speaker 2: just start to unfold in healthcare, and we've been fortunate
5:19
Speaker 2: enough to be on the front lines and have access
5:21
Speaker 2: extraordinary access to workflows, data, etc. To be able to
5:25
Speaker 2: test these technologies. Once that toolkit became available, what was
5:30
Speaker 2: possible using AI became completely different. So all of a
5:33
Speaker 2: sudden you could affect really broad system level type transformations
5:38
Speaker 2: where you could take entire horizontal sets of workflows and
5:41
Speaker 2: processes and systems and leverage AI to execute workflows that
5:46
Speaker 2: enable much more rapid ROI and much more rapid transformation.
5:50
Speaker 2: So we ended up spending a lot of time on
5:52
Speaker 2: those types of problems which were now possible using this
5:56
Speaker 2: novel form of GENI that was available. But I think
5:58
Speaker 2: the thesis has stayed relatively the same, which is, where
6:01
Speaker 2: do we find really kind of painful problems in healthcare
6:05
Speaker 2: that technology can make a major impact in and where
6:07
Speaker 2: incumbents are not delivering solutions that you know our customers
6:11
Speaker 2: are are in need of.
6:13
Speaker 1: Well that's a perfect segue, So maybe why don't we
6:15
Speaker 1: dive into maybe a topical example of that. You know,
6:18
Speaker 1: what's one of your key investments that you've made that
6:20
Speaker 1: that fits that model.
6:22
Speaker 2: So one company that we built from the ground up,
6:24
Speaker 2: this one is front of mind because I was just
6:26
Speaker 2: at a board meeting for it two hours before. This
6:28
Speaker 2: is called ascertain, which is focused on automation for back
6:32
Speaker 2: office processes. And so if you look at the last
6:35
Speaker 2: generation of r PA and kind of other you know,
6:39
Speaker 2: much more brittle forms of automation in healthcare, they didn't
6:42
Speaker 2: really work very often. They would break you know, you
6:46
Speaker 2: would not be able to find where they had broken
6:48
Speaker 2: down the process, et cetera. And so once, you know,
6:51
Speaker 2: once Jennai became available, you could now integrate with legacy systems.
6:56
Speaker 2: You could execute entire workflows, particularly where there's manual, co
7:00
Speaker 2: petitive processes, and you know, we were able to integrate
7:04
Speaker 2: with all these legacy technologies, you know, fax machines, places
7:08
Speaker 2: where folks are making phone calls and spending hours, et cetera.
7:11
Speaker 2: So the workflow we started with with Ascertain, which was
7:14
Speaker 2: driven by Northwell, who we co created the company with.
7:16
Speaker 2: From the ground up, they were having real challenges, as
7:19
Speaker 2: was every health system in the country, with discharge planning,
7:22
Speaker 2: getting patients out of the hospital into their secondary side,
7:25
Speaker 2: into a secondary side of care like a skilled nursing
7:28
Speaker 2: facility or a long term care facility, et cetera. And
7:31
Speaker 2: so delays and prior authorization could mean that a patient
7:33
Speaker 2: would spend three or four days more in the hospital
7:36
Speaker 2: than they needed to, and so that process would take hours,
7:39
Speaker 2: hundreds of clicks. We were able to go in shadow
7:42
Speaker 2: those teams, use AI agents to augment or turbocharge where
7:46
Speaker 2: human beings are doing those processes today and get it
7:49
Speaker 2: down to ninety percent less time, and so patients are
7:53
Speaker 2: out of the hospital a lot more quickly. It means
7:55
Speaker 2: the health system is able to know is able to
7:58
Speaker 2: drive more profitability, put in ways that you know are
8:02
Speaker 2: extremely desirable to them. And you know, these deeply scarce
8:06
Speaker 2: labor pools, you know, uh, nurse case managers, which are
8:09
Speaker 2: an incredible demand across the entire health system, could be
8:12
Speaker 2: turbocharged and used a lot more effectively. And so we
8:15
Speaker 2: took a process where you know, you're using a fax machine,
8:19
Speaker 2: handwritten forms, phone calls, et cetera, and get it down
8:22
Speaker 2: to a couple of minutes, which is a transformative example.
8:25
Speaker 2: I think of how this type of technology can be applied.
8:28
Speaker 1: Well, I'm always so curious when I hear these examples.
8:30
Speaker 1: Can you maybe just walk me through the process of
8:32
Speaker 1: actually standing the company up and how that works with
8:34
Speaker 1: a partner like northwoll sure.
8:36
Speaker 3: It's a great question.
8:37
Speaker 2: So our process really revolves around we will spend time with,
8:41
Speaker 2: you know, all of the management teams that our health
8:42
Speaker 2: system partners. So we now have fourteen health systems that
8:45
Speaker 2: we have strategic collaboration agreements with. They represent a really
8:49
Speaker 2: nice microcosm of the US healthcare system as a whole.
8:52
Speaker 2: And so we have you know, large AMCs like Stanford, Yale,
8:56
Speaker 2: you know, Vanderbilt, et cetera. You know huge kN glom
9:00
Speaker 2: it's like a north Well or EPMC that have a
9:02
Speaker 2: little bit of everything, you know, public land grant universities
9:05
Speaker 2: like an IU or an Ohio State, etc. And it
9:08
Speaker 2: really differs at every place how we go about it
9:11
Speaker 2: just depending on how they organize themselves and how they
9:14
Speaker 2: like to go about those types of needs finding analyzes.
9:19
Speaker 2: But to generalize across all of them, we will spend
9:21
Speaker 2: a lot of time with those c suites. They will
9:23
Speaker 2: tell us what their strategic plans are, where they're deploying technology,
9:27
Speaker 2: what's working, what's not, and where there's places where new
9:31
Speaker 2: companies could fill in gaps. So at north Well, we
9:35
Speaker 2: heard directly from the COO of the health system that
9:38
Speaker 2: they were having a huge challenge with this particular set
9:41
Speaker 2: of workflows, and from there we ended up spending a
9:44
Speaker 2: lot of time shadowing the teams that were doing that
9:46
Speaker 2: set of workflows, thought about how could we build a
9:49
Speaker 2: technology that could really turbo charge their productivity and enable
9:53
Speaker 2: us to drive ROI and impact for the health system.
9:56
Speaker 2: And then you know, it comes down to can you
9:58
Speaker 2: recruit the right leadership team, is the technology going to
10:01
Speaker 2: work as effectively as we wanted to, is there a
10:04
Speaker 2: broader market need for this? And so once we find
10:06
Speaker 2: that there's a need within a particular health system that
10:09
Speaker 2: brought us the challenge, we also want to triangulate that
10:11
Speaker 2: with the rest of our consortium to make sure that
10:13
Speaker 2: we're not building a solution that is overly bespoke to
10:17
Speaker 2: one health system, given that we want to build scaled,
10:19
Speaker 2: venture backed businesses that can succeed in the market independently.
10:23
Speaker 2: And so we have a pretty structured process from going
10:26
Speaker 2: from hearing a problem, prototyping a solution, you know, testing
10:30
Speaker 2: that in the market, broadly, recruiting the team and standing
10:33
Speaker 2: that up, and then launching the company. And it's different
10:36
Speaker 2: depending on each time that we do it, but I
10:38
Speaker 2: think we've created a blueprint or a playbook that is
10:41
Speaker 2: relatively systematic across the board.
10:44
Speaker 1: No, it's interesting because now, I guess my follow up
10:46
Speaker 1: question here is like, so where it sounds like a
10:48
Speaker 1: certains past that initial playbook, right, So where are they
10:52
Speaker 1: in their life cycle? And maybe within the consortium have
10:56
Speaker 1: they expanded into a number of the other members.
10:59
Speaker 2: It's a great questions. So we've launched five. To date,
11:02
Speaker 2: four of the five are now past Series A and
11:05
Speaker 2: so are kind of spun out independent you know, have
11:08
Speaker 2: you know, fully independent management teams. They are all scaling
11:11
Speaker 2: in the market broadly, They've gotten you know, great external
11:15
Speaker 2: funding rounds and we will put anywhere from you know,
11:17
Speaker 2: seven million to twelve million dollars in every company and
11:21
Speaker 2: then after that look for them, you know, to raise
11:23
Speaker 2: money from the venture community. And so four of the
11:26
Speaker 2: five are now past that phase. The fifth should be
11:28
Speaker 2: completed this fall, which is great. So we've come out
11:31
Speaker 2: of the gate really strong. In this current funding environment,
11:34
Speaker 2: around thirteen percent of firms that have institutional series seed
11:39
Speaker 2: rounds end up getting to Series A, and so you know,
11:42
Speaker 2: we think we're going to bat one hundred percent, which
11:44
Speaker 2: is emblematic of the success of the model. And now
11:48
Speaker 2: we're trying to scale up and do a lot more.
11:49
Speaker 2: So we really want to get to a place where
11:51
Speaker 2: we can do four or five a year. So and
11:54
Speaker 2: now that we have more partners, we've laid the foundation
11:57
Speaker 2: with each of those systems. So the consortium launched form
12:00
Speaker 2: only last April, and we spent you know a lot
12:03
Speaker 2: of time and energy to be able to get to
12:06
Speaker 2: be able to get those systems in a place where
12:08
Speaker 2: we feel that we can drive a couple of new
12:10
Speaker 2: opportunities in partnership with each of them, in partnership with
12:14
Speaker 2: all of them through the consortium. And so we you know,
12:18
Speaker 2: were excited for a very busy twenty twenty six ahead.
12:21
Speaker 1: And then on the follow on investments, will you do
12:24
Speaker 1: a Series B and Series C just to maintain your
12:26
Speaker 1: stake or at some point does it become, you know,
12:29
Speaker 1: something that you had others invest.
12:31
Speaker 2: In, So we will do the we'll do we'll do
12:33
Speaker 2: the seed round. You know, we are typically the sole
12:35
Speaker 2: participant in that seed round and you know, have a
12:38
Speaker 2: fair bit of ownership from there. We're open minded on
12:41
Speaker 2: participating in series as it really comes down on the
12:44
Speaker 2: you know, particular opportunity. Typically we don't so the cap
12:47
Speaker 2: tables are able to normalize and then from you know,
12:50
Speaker 2: series A through Series C. That's really where the companies
12:52
Speaker 2: are all at right now. The latest company is at
12:54
Speaker 2: A Series C. The earliest will complete its Series A
12:57
Speaker 2: this fall, so those will go out to the additional
13:00
Speaker 2: venture marketing get funded.
13:01
Speaker 1: Excellent, So maybe let's dive into some of the other
13:04
Speaker 1: theses that you guys have worked on. I mean, we've
13:07
Speaker 1: covered a certain but the other handful pick your favorite child.
13:11
Speaker 2: Yes, So we're very thesis driven generally, and so right
13:14
Speaker 2: now we're investing around five core investment thesies. So the first,
13:18
Speaker 2: which is where ascertain falls, is automating workflows. The second
13:23
Speaker 2: is reimagining the consumer experience. There we've built two companies.
13:27
Speaker 2: One is called hume Ai, which is a voice AI
13:30
Speaker 2: company that is able to drive a lot of automation
13:33
Speaker 2: for customer service applications. In particular, it's able to really
13:37
Speaker 2: deeply understand emotion and drive better empathy for those types
13:42
Speaker 2: of applications. Another company called care Gentic, which is using
13:45
Speaker 2: AI agents to help with care journey automation and so
13:50
Speaker 2: navigating patients a lot more effectively across the health system
13:53
Speaker 2: and creating a digital front door to be able to
13:56
Speaker 2: extend the effectiveness of their care team into their home
14:00
Speaker 2: with them wherever they go, to make it a lot
14:02
Speaker 2: easier to be able to access access the health system
14:06
Speaker 2: without needing to spend hours on the phone or needing
14:09
Speaker 2: to go between lots of different sets of providers. Third
14:13
Speaker 2: one is creating and amplifying new biomarkers, and so that's
14:16
Speaker 2: one that we're really leaning into and that leverages as
14:19
Speaker 2: I mentioned earlier, this thesis we have around finding great
14:23
Speaker 2: teams of investigators that are developing world class science and
14:26
Speaker 2: scientific breakthroughs that we can build around. There, we build
14:29
Speaker 2: a company called Optane, which is in the retinal imaging space.
14:33
Speaker 2: So there we've developed hardware plus software to be able
14:36
Speaker 2: to detect a lot of different diseases at the point
14:39
Speaker 2: of care using a thirty second eye scan. And so
14:42
Speaker 2: you'll take a thirty second retinal scan that will be
14:45
Speaker 2: able to run using this proprietary hardware that we've developed,
14:48
Speaker 2: and then we can detect diabetic retinopathy AMD, glaucoma, cardiovascular disease,
14:54
Speaker 2: neurological conditions and then create a referral from primary care
14:58
Speaker 2: into the service lines to be able to get downstream
15:02
Speaker 2: care to patients that otherwise might not be screened for
15:05
Speaker 2: those types of eye and systemic diseases. And then the
15:08
Speaker 2: last one is around unlocking ruled evidence to accelerate clinical trials,
15:13
Speaker 2: and so how do we partner with health systems and
15:15
Speaker 2: the life sciences community to be able to access you know,
15:18
Speaker 2: patients for trials, data sets, you know, all sorts of
15:22
Speaker 2: resources that are scarce that can enable pharma to be
15:26
Speaker 2: able to get patients life saving therapies a lot more faster,
15:29
Speaker 2: a lot more quickly, and more effectively. There we build
15:32
Speaker 2: a company called Avondra where we actually acquire two of
15:35
Speaker 2: the leading owners of imaging assets in the US and
15:38
Speaker 2: then linked those imaging data sets to the data within
15:41
Speaker 2: our health system partners and provided them a revenue share
15:44
Speaker 2: back and then are able to offer those to life
15:47
Speaker 2: sciences to AI companies that need training, data to researchers, etc.
15:53
Speaker 2: To be able to do things like decentralized clinical trials,
15:56
Speaker 2: you know, AI enabled drug discovery.
15:58
Speaker 3: Lots of different use cases.
16:00
Speaker 1: So it's interesting I'll maybe just key in on the
16:03
Speaker 1: last one because it's the most recent in the discussion.
16:05
Speaker 1: But there's all this discussion about all the data that's
16:09
Speaker 1: locked inside of these healthcare systems. And we've had a
16:11
Speaker 1: bunch of different guests on the on the podcast tackling
16:15
Speaker 1: this a bunch of different ways. So if I understand it,
16:18
Speaker 1: you're primarily focused on imaging in this case, yep, that's right.
16:22
Speaker 1: And then you marry that with the other multimodal data
16:24
Speaker 1: exactly that's in the healthcare system, whether it's just the EMR,
16:28
Speaker 1: you know, maybe some diagnostics, et cetera. Yeah, And then
16:32
Speaker 1: is it typically you said it's a revenue share.
16:34
Speaker 2: That's a revenue share model where we will monetize those
16:37
Speaker 2: data sets on a de identified basis to life sciences,
16:40
Speaker 2: to AI companies, et cetera. And then the health systems
16:44
Speaker 2: that participate in that particular in the generation of that
16:47
Speaker 2: particular data set will receive a revenue stream back.
16:50
Speaker 1: I see. And are they precluded from including that data
16:53
Speaker 1: and other federated networks.
16:56
Speaker 2: They're not, So it's non exclusive, and so most of
16:58
Speaker 2: them typically view it as additive to other strategies they
17:02
Speaker 2: might be leveraging to monetize their data.
17:04
Speaker 1: So I guess you know, as we sit here, you've
17:07
Speaker 1: covered a lot of ground between those five theses. You know,
17:10
Speaker 1: what are some of the other pain points you're hearing
17:12
Speaker 1: from your partners. Maybe there's another thesis that's out there
17:16
Speaker 1: that they'd like you to look at.
17:17
Speaker 2: So I think the biggest one right now that folks
17:20
Speaker 2: are really eager to try to drive greater efficiency around
17:23
Speaker 2: is roughly one out of every four dollars we spend
17:26
Speaker 2: as a healthcare system is on administrative cost. And I
17:29
Speaker 2: think the biggest, fattest, lowest hanging fruit right now as
17:32
Speaker 2: it relates to AI agents and gen AI, is around
17:35
Speaker 2: how do we create a lot more efficiency in those
17:38
Speaker 2: back office processes? And so there's a lot of time
17:41
Speaker 2: that's being spent on revenue cycle for example, you know,
17:44
Speaker 2: lots of focus on you know, billing, on case management,
17:48
Speaker 2: care management as well, you know, how do you control
17:51
Speaker 2: costs a lot more effectively throughout the system using AI
17:54
Speaker 2: And so we're spending a lot of time there. And
17:56
Speaker 2: then I think an area that is emerging and folks
17:58
Speaker 2: are getting a lot more comfort rule with is now
18:01
Speaker 2: around how do you leverage similar technologies to interface with patients?
18:05
Speaker 2: Just because hospitals do not have enough capacity throughout the
18:08
Speaker 2: system to be able to manage the amount of patient communications,
18:12
Speaker 2: care navigation, care management, etc. That's required to be able
18:16
Speaker 2: to provide a great consumer experience, and I think they're
18:19
Speaker 2: under more pressure than ever given all the new entrants
18:22
Speaker 2: into healthcare who are trying to compete, particularly for commercial
18:26
Speaker 2: patients which they rely on to be able to drive
18:28
Speaker 2: margin to the system and subsidize all the government payers
18:33
Speaker 2: and folks that have government insurance where they typically will
18:35
Speaker 2: either just barely break even or lose a lot of money.
18:38
Speaker 3: And so now that you have Amazon.
18:41
Speaker 2: Payers, you know, lots of private equity sponsored type new
18:44
Speaker 2: entrants coming into the market to target those patients. I
18:47
Speaker 2: think health systems are really eager to think through how
18:50
Speaker 2: do we create a consumer experience that is similar to
18:52
Speaker 2: how other industries are able to are able to treat
18:56
Speaker 2: their customers as consumers, not just as patients. And so
19:00
Speaker 2: I think there's a lot more comfort now that we've
19:02
Speaker 2: seen where impact is really driven, where there's risks, how
19:05
Speaker 2: you mitigate against hallucinations, and areas where you know you
19:08
Speaker 2: could create a lot of problems if you're not able
19:10
Speaker 2: to safely deploy the technology, And so I think there's
19:13
Speaker 2: more openness than ever to how do we actually leverage
19:16
Speaker 2: these technologies to improve patient care much more directly.
19:21
Speaker 1: It's interesting as you were talking about I was just
19:23
Speaker 1: thinking about the landscape and we've had a number of companies,
19:25
Speaker 1: you know, tackling I would say, different niches of that
19:29
Speaker 1: that workflow problem, you know, whether it's payment integrity, whether
19:33
Speaker 1: it's prior off you know, r CM, et cetera. Where
19:37
Speaker 1: do you think where do you think this is going
19:39
Speaker 1: to pan out? And I guess I asked that because
19:41
Speaker 1: I see I see the legacy providers from you know,
19:43
Speaker 1: the seventies and eighties, they're still around. Yeah, there's newer companies,
19:48
Speaker 1: you know that have a lot of share. There's private, big,
19:50
Speaker 1: private equity backed companies in the space. A lot of
19:53
Speaker 1: them are new Mountain yep and you know, and then
19:56
Speaker 1: there's you know, Epic is doing tons of stuff and
19:59
Speaker 1: talk about data AAK and all that sort of thing.
20:01
Speaker 1: So I guess, are we going to see a consolidation
20:05
Speaker 1: of all these different solutions under a couple larger flags,
20:09
Speaker 1: if you will.
20:10
Speaker 2: I think one of the questions we spend probably more
20:13
Speaker 2: time discussing than any other is where is there a
20:16
Speaker 2: right to win for different constituents?
20:18
Speaker 3: Much better way to stay at the system.
20:20
Speaker 2: No, no, And so I think you hit on that
20:21
Speaker 2: in the question. So I think it really comes down
20:25
Speaker 2: to what particular challenge is being solved, because ultimately, when
20:29
Speaker 2: you look at, you know, what do incumbents have versus
20:31
Speaker 2: what a startups have? From a starting from the perspective
20:34
Speaker 2: of just you know, starting out, incumbents have trusts, they
20:38
Speaker 2: have access to customers, they have capital.
20:41
Speaker 3: You know, they have all these.
20:42
Speaker 2: Advantages over startups, and startups are able to develop new
20:47
Speaker 2: AI native tech stacks, they can move a lot more quickly,
20:50
Speaker 2: they have less inertia, et cetera. And so, you know,
20:53
Speaker 2: our perspective is where there's places that incumbents are able
20:57
Speaker 2: to form partnerships with startups or able to acquire startups
21:01
Speaker 2: or build new business units internally that can enable them
21:04
Speaker 2: to behave in a much more agile fashion like startups
21:07
Speaker 2: can in those are places where they're probably going to
21:10
Speaker 2: win over startups. But where there's there's a lot of
21:14
Speaker 2: areas where I think the technology is so novel, where
21:17
Speaker 2: the challenge is associated with you know, operating in a
21:20
Speaker 2: completely different way, are so significant that startups are going
21:23
Speaker 2: to be able to come in and completely displace those incumbents,
21:26
Speaker 2: and so I think it really comes down to the
21:28
Speaker 2: particular set of workflows that you're addressing, and in many cases,
21:32
Speaker 2: you know, I think what is ultimately going to happen is,
21:35
Speaker 2: you know, the incumbents that are already either delivering care
21:37
Speaker 2: at scale or that already have you know, the largest
21:40
Speaker 2: surface area in terms of software that they're already selling.
21:43
Speaker 2: In many cases, I think the ones that are able
21:45
Speaker 2: to transform themselves are going to be the smartest bets
21:48
Speaker 2: that you can make. And in places where you know,
21:51
Speaker 2: we're launching companies, we have a pretty strong perspective that
21:54
Speaker 2: there's a need for a new AI native solution in
21:57
Speaker 2: that space. And I think, you know, you mentioned that
22:01
Speaker 2: Epic is always I think an elephant in a room
22:03
Speaker 2: for a lot of folks building startups because they're expanding
22:06
Speaker 2: their service area in terms of the types and the
22:09
Speaker 2: number of solutions that they're going to look to build themselves.
22:12
Speaker 2: We look to do things that are complementary to EPIC.
22:16
Speaker 2: I think in most cases, if EPIC has a great solution,
22:18
Speaker 2: our health system partners want to use that solution, and
22:21
Speaker 2: I think we fully respect that and have never tried
22:24
Speaker 2: to compete directly in anything that Epic wants to do.
22:27
Speaker 2: But I think the way we view all of the
22:29
Speaker 2: startups that we build is how do we help our
22:31
Speaker 2: partners get full value out of the major investments they've
22:35
Speaker 2: made in all the core IT platforms they use, whether
22:38
Speaker 2: that is their CRMs, their EHRs, their ERP systems. In
22:43
Speaker 2: many cases they've spent hundreds of millions or billions of
22:46
Speaker 2: dollars to be able to implement these core systems. And
22:50
Speaker 2: so our big thesis is around this application layer that
22:53
Speaker 2: sits on top how do we make sure that they
22:56
Speaker 2: can get the best value out of those investments. And
22:58
Speaker 2: so I think our thesis is very much in this
23:01
Speaker 2: applied AIE layer of where are there are new applications
23:04
Speaker 2: that are AI native that we can build on top
23:06
Speaker 2: of those source systems to be able to drive you know,
23:09
Speaker 2: effectiveness in you know helping them and helping them you know,
23:12
Speaker 2: drive forward core workflows.
23:14
Speaker 1: Well, so AI is just the buzzword of the day.
23:18
Speaker 1: And I mean we've covered a number of different topics
23:21
Speaker 1: here around you know, different themes over the years that
23:25
Speaker 1: have kind of risen and fallen, But AI is the
23:27
Speaker 1: topic to Jory today. When we think about how the
23:31
Speaker 1: health systems are tackling AI. What are you hearing from
23:34
Speaker 1: your partners from their focus? And we've spoken to a
23:38
Speaker 1: number of big systems and it seems like everybody has
23:41
Speaker 1: their own secret sauce to how they're doing it, and
23:43
Speaker 1: some are pushing that workflow down and some are kind
23:47
Speaker 1: of doing it from the top down, or some are
23:50
Speaker 1: doing it bottoms up and some are doing it top down.
23:52
Speaker 1: What have you found to be the most effective way
23:55
Speaker 1: for a system to manage kind of their go to
23:58
Speaker 1: market with AI.
23:59
Speaker 2: It's a great question. I think the systems we've seen
24:02
Speaker 2: that are doing this most effectively have very strong support
24:05
Speaker 2: from the c suite, very strong strategic direction in terms
24:09
Speaker 2: of where is the health system going, and then you
24:12
Speaker 2: need to marry that, of course, with strong bottoms up
24:15
Speaker 2: support within particular business units or service lines to executing
24:20
Speaker 2: whatever that core strategy is. And then I think encourage
24:24
Speaker 2: leaders within those different business units or service lines to
24:27
Speaker 2: be entrepreneurial and to seek out where are their great
24:29
Speaker 2: solutions you want to use? And then how do we
24:32
Speaker 2: as a health system create mechanisms for people to be
24:35
Speaker 2: able to make recommendations of new solutions that they want
24:38
Speaker 2: to experiment with. And then a set of processes for
24:41
Speaker 2: evaluating ROI, because I think one of the biggest challenges
24:44
Speaker 2: health systems have had over the last ten plus years
24:47
Speaker 2: is they've deployed lots of new digital health technology, but
24:51
Speaker 2: in most cases those solutions have not driven ROI that
24:55
Speaker 2: would justify the investments they've made in those companies. And
24:58
Speaker 2: so I think folks have learned a lot from those
25:00
Speaker 2: experiences and are now creating much more robust mechanisms around
25:04
Speaker 2: how do we evaluate effectiveness ROI, integration, et cetera. Given
25:09
Speaker 2: that you know, in many cases, you know we will
25:11
Speaker 2: talk to chief digital officers or chief information officers who
25:14
Speaker 2: say when they go to a conference, they might get
25:16
Speaker 2: two hundred notes from digital HEALTHRGY companies that are selling
25:21
Speaker 2: to them. And so ultimately, I think as we look
25:23
Speaker 2: at what is the scarce resource, ultimately it's trust. Right,
25:27
Speaker 2: if you're building a new startup from the ground up,
25:29
Speaker 2: what you need to do is demonstrate that you can
25:31
Speaker 2: drive the same accountability and that you were going to
25:34
Speaker 2: perform in the same way that they would trust you know,
25:37
Speaker 2: an epic or a Google Cloud, or a salesforce or
25:40
Speaker 2: a palenteer to perform, which creates a very high bar
25:43
Speaker 2: for you as a startup, and that's one of the
25:44
Speaker 2: things that I think makes it very challenging to build
25:47
Speaker 2: new companies in healthcare. You need to have a solution
25:50
Speaker 2: that is enterprise ready, ready to go in a production
25:54
Speaker 2: environment very quickly, since in healthcare, you know, software mistakes
25:58
Speaker 2: really can kill people, and there's many cases when that
26:00
Speaker 2: has been the case. And so we really believe that,
26:03
Speaker 2: you know, that trust based ecosystem is critical if you
26:07
Speaker 2: are building anything that touches core workflows with hospital systems.
26:11
Speaker 2: And so when they look to agis, I think we
26:14
Speaker 2: want them to know that all of our companies are
26:16
Speaker 2: going to perform and that anytime we bring them something,
26:19
Speaker 2: it's something that we have really rigorously vetted and we
26:22
Speaker 2: know is going to deliver against whatever they're looking for
26:24
Speaker 2: us to achieve.
26:25
Speaker 1: I can only imagine the incoming that a CTO or
26:27
Speaker 1: chief digital officer at a health system.
26:29
Speaker 3: It's a lot, It's enormous.
26:32
Speaker 1: You know, we're recording this right before the health conference
26:35
Speaker 1: out in Vegas next week, and you know, when I
26:38
Speaker 1: go to that conference, I see all the different solutions
26:41
Speaker 1: that are out there, and it's interesting to see, you know,
26:44
Speaker 1: a couple of years ago, the rage was employer points
26:47
Speaker 1: solutions yep, and now it's all AI and so i'd
26:49
Speaker 1: love to get your take on, you know, where we
26:51
Speaker 1: are in the investment cycle from a venture perspective in
26:55
Speaker 1: healthcare AI.
26:57
Speaker 2: So I think what we've spent a lot of time
26:59
Speaker 2: on over the law two and a half to three
27:01
Speaker 2: years is there's been a lot of experimentation, and I
27:04
Speaker 2: think health systems have been open to trying a lot
27:07
Speaker 2: of new technologies, and you've seen there's been you know,
27:10
Speaker 2: some companies have seen absolutely meteoric growth. Growth curves have
27:15
Speaker 2: compressed enormously. It used to be that it would take
27:17
Speaker 2: you four to five years DA hit one hundred million
27:19
Speaker 2: in ARR, and you now have companies that are hitting
27:21
Speaker 2: it in eighteen to twenty four months, which is extraordinary.
27:24
Speaker 2: I think there's still a lot of open questions around
27:26
Speaker 2: durability of that revenue. But you know, across the board,
27:30
Speaker 2: I think you're starting to see places where you're driving
27:32
Speaker 2: real ROI and impact. And I think every health system
27:35
Speaker 2: in particular, when you know, I think life sciences and
27:39
Speaker 2: payers operate similarly, but health systems, I think are laser
27:42
Speaker 2: focused on ROI and impact.
27:44
Speaker 1: Well, the margins so well, they have to be.
27:45
Speaker 3: They have to be.
27:46
Speaker 2: And so I think what you've started to see over
27:48
Speaker 2: the last two and a half years is where are
27:51
Speaker 2: their signs of technologies driving real impact. And the venture community,
27:55
Speaker 2: I think, used to operate in such a way that
27:57
Speaker 2: they would make a lot of bets, and they viewed
27:59
Speaker 2: them more as you know, we're going to sprinkle a
28:01
Speaker 2: lot of seeds. We're not going to know which ones
28:03
Speaker 2: will germinate until later. We're open to having multiple bets
28:06
Speaker 2: in a similar category, et cetera. I think what you're
28:09
Speaker 2: starting to see is folks doubling down a lot sooner
28:12
Speaker 2: than they used to, not making competing bets, being a
28:15
Speaker 2: bit more concentrated in the strategy, and being willing to
28:18
Speaker 2: deploy a lot more capital in single companies that they
28:22
Speaker 2: believe are going to be big winners and so and
28:24
Speaker 2: then venture capital firms in the same way that egis
28:27
Speaker 2: will say, we want to make a bet in a
28:28
Speaker 2: particular space, We're going to bring it to all of
28:30
Speaker 2: our health systems. We're going to make sure there's demand
28:33
Speaker 2: in place before we build a company, and that there's
28:35
Speaker 2: anchor customers, and we'll build case studies, et cetera. I
28:38
Speaker 2: think these C firms now companies will stay in stealth
28:41
Speaker 2: a lot longer, they'll deploy across a lot more customers,
28:44
Speaker 2: and they'll have a lot more funding from day one
28:46
Speaker 2: to be able to blit scale and try to make
28:48
Speaker 2: it so it's very hard to build a competitor. So
28:51
Speaker 2: where I really see us in the cycle is I
28:53
Speaker 2: think folks are doubling down on apparent winners that have
28:57
Speaker 2: been king made in one form or another a lot
28:59
Speaker 2: sooner than these to and you know, it means there's
29:01
Speaker 2: not as many new entrants in a lot of spaces.
29:03
Speaker 1: Interesting, So what do you think the ultimate outcome is
29:05
Speaker 1: for many of those companies. Because they're getting the scale
29:07
Speaker 1: quicker earlier, they're getting capital earlier. Do you think they
29:11
Speaker 1: ultimately come to public markets or do you think they're
29:13
Speaker 1: going to coesque and merge together to form bigger and
29:16
Speaker 1: bigger private companies. It's a really great question.
29:20
Speaker 2: I wish I had a crystal ball and could tell
29:21
Speaker 2: you the last generation of healthcare I companies performed very poorly,
29:25
Speaker 2: as you know on public NOA, oh, yes, so I
29:27
Speaker 2: think there's a lot of trepidation around, you know, going public,
29:32
Speaker 2: Hinge and Omada I think created some level of confidence
29:35
Speaker 2: in the market that you can do Okay. Those were
29:38
Speaker 2: both you know, low single digit billion type outcomes, which
29:41
Speaker 2: is fantastic for early investors and many cases not as
29:44
Speaker 2: great for later stage investors who are investing at very,
29:47
Speaker 2: very high valuations. I think the big open question is
29:50
Speaker 2: going to be the new winners that we've started to see.
29:53
Speaker 2: You know, Bridge is one that I think everyone is
29:54
Speaker 2: thinking about, thinking about are they going to go public
29:57
Speaker 2: in the next two years? They're seeing so much revenue growth.
30:00
Speaker 2: Kmmuras an other which has grown primarily by M and A.
30:03
Speaker 2: And then you have the new winners, the you know,
30:05
Speaker 2: open evidence of the world, which have driven a lot
30:07
Speaker 2: of adoption but not necessarily a huge amount of revenue yet,
30:11
Speaker 2: and are going to need to head into this accelerated
30:13
Speaker 2: phase of you know, now taking forty percent of you know,
30:16
Speaker 2: all doctors in the US are now using the product.
30:19
Speaker 2: How do we monetize that, whether through enterprise subscriptions or
30:22
Speaker 2: whether through going to pharma and selling ads. There's lots
30:25
Speaker 2: of new levers to do that. I think that whenever
30:28
Speaker 2: you don't build one of these companies, you should assume
30:31
Speaker 2: that you're going to need to take it public, and
30:33
Speaker 2: that there's not going to be a you know, a
30:35
Speaker 2: strategic acquirer that's going to buy something for over a
30:37
Speaker 2: billion dollars. We just haven't seen a lot of those
30:40
Speaker 2: exits in digital health yet. There's not very many acquirers
30:43
Speaker 2: in the same way there are in traditional technology that
30:46
Speaker 2: are willing to buy things, you know, in the billion
30:49
Speaker 2: plus dollar range. And so I think there's going to
30:51
Speaker 2: be a lot of strategic exits in the couple hundred
30:54
Speaker 2: million to three to five hundred million. I think there's
30:56
Speaker 2: a lot of appetite among you know, hyperscalers, software players,
31:01
Speaker 2: you know, sponsor backed software companies, whether those are publicly
31:05
Speaker 2: traded or still private. And then once you start talking
31:09
Speaker 2: very large exits, I think you need to assume that
31:10
Speaker 2: you need to ipo and we'll I think we'll see
31:13
Speaker 2: a couple more in twenty twenty six. That will give
31:16
Speaker 2: us a lot more insight into how the public markets
31:18
Speaker 2: are going to treat this generation of digital health companies
31:21
Speaker 2: relative to the last generation.
31:23
Speaker 1: Fascinating. Well, I'm going to be busy next year, I guess.
31:26
Speaker 3: I think it will be busy.
31:27
Speaker 2: I mean a lot I think is up in the
31:29
Speaker 2: air still as it relates to, you know, what the
31:31
Speaker 2: IPO market is going to look like generally, and companies
31:34
Speaker 2: are staying public longer or staying private longer than they
31:37
Speaker 2: ever have before, which I think is probably going to continue.
31:41
Speaker 1: That trend is going to change anytime soon. The capital
31:43
Speaker 1: is still there, I.
31:44
Speaker 2: Don't think so either, And there's a lot more maturity
31:46
Speaker 2: as well as it relates to the secondary market and
31:49
Speaker 2: other ways to be able to get liquidity, both for
31:52
Speaker 2: entrepreneurs and for you know, early investors in these companies.
31:55
Speaker 2: And there's so much capital that I think is chasing
31:58
Speaker 2: post product market fit a native companies that you know
32:02
Speaker 2: founders have a lot more options than I think they've
32:04
Speaker 2: ever had before as it relates to how and when
32:06
Speaker 2: they want to exit. And in many cases, I mean
32:09
Speaker 2: you're seeing now there's Series ease and Series f's and g's,
32:12
Speaker 2: et cetera, which we're unheard of a decade ago. I
32:15
Speaker 2: just don't see that trend changing anytime soon now me either.
32:18
Speaker 1: I think you hit it right on the head. I
32:20
Speaker 1: want to switch gears and go back to the company
32:22
Speaker 1: construction piece to it because one of the things you
32:25
Speaker 1: said just made me think about the team and the
32:29
Speaker 1: leaders that you kind of put in place. You know,
32:31
Speaker 1: what are you looking for in your entrepreneurs and and
32:35
Speaker 1: how do you find the right fit.
32:37
Speaker 2: So we've run a lot of analysis on digital health.
32:40
Speaker 2: I think is in healthcare a I I think are
32:42
Speaker 2: very different than a lot of other industries where you know,
32:45
Speaker 2: if you look at the you know, classic y C
32:48
Speaker 2: founder that I think, you know, Silicon Valley VC firms
32:51
Speaker 2: like to back it's the you know computer science, you
32:54
Speaker 2: know computer science, you know drop out from Stanford who
32:59
Speaker 2: you know has done AI research and has worked at
33:01
Speaker 2: you know, Anthropic or Open AI, etc. That I think
33:04
Speaker 2: still is a very backable founder in generic technology, in
33:09
Speaker 2: health tech. You know, in all the analysis we've run,
33:12
Speaker 2: the most successful founders tend to be more experienced people
33:16
Speaker 2: who you know, know the industry, have industry relationships, have
33:20
Speaker 2: a lot of scar tissue, but are able to surround
33:22
Speaker 2: themselves with folks that I think, you know that span
33:26
Speaker 2: generations and are able to drive that kind of entrepreneurial scrappy,
33:30
Speaker 2: fast moving, you know, up with the technology and up
33:33
Speaker 2: with the times, tyke spirits. So I think as we
33:35
Speaker 2: look at what are the big modes as we build
33:37
Speaker 2: teams and bringing entrepreneurs. For us, it really comes down
33:41
Speaker 2: to interdisciplinary teams where you're bringing people that have a
33:43
Speaker 2: lot of different skill sets and experiences. And I think
33:46
Speaker 2: for CEOs, we tend to like to find people that
33:49
Speaker 2: have been in the industry for a while, have seen
33:51
Speaker 2: the core challenges, know how different that healthcare is than
33:55
Speaker 2: other industries, and all of the different you know, innovation
33:58
Speaker 2: challenges that you need to navigate to be able to
34:01
Speaker 2: build scale and drive trust, et cetera. And so we
34:04
Speaker 2: typically will try to form relationships with entrepreneurs that we
34:07
Speaker 2: will partner with over a year plus and we have
34:10
Speaker 2: a lot of structured ways of you know, creating touch
34:12
Speaker 2: points with those folks where we will host fifteen plus
34:15
Speaker 2: events a year, whether those are you know, we had
34:17
Speaker 2: a summit you know, two weeks ago here in New
34:20
Speaker 2: York where we had two hundred plus people for two days,
34:23
Speaker 2: including all of our digital consorttion partners. We will do
34:26
Speaker 2: you know, dinners at pretty much every event. We'll have
34:29
Speaker 2: hackathons and all sorts of different ways of engaging with
34:32
Speaker 2: the entrepreneurs.
34:33
Speaker 3: So's it's fun.
34:33
Speaker 2: It ends up being a lot of work as you
34:35
Speaker 2: can imagine, because it really does come down to curating
34:37
Speaker 2: the right group of people and then making sure that
34:40
Speaker 2: group of people has a great experience since it's an
34:42
Speaker 2: extension of your brand and how you do things. And
34:45
Speaker 2: I am a big believer that you know, little things
34:47
Speaker 2: are big things, and so whenever you do something, you
34:49
Speaker 2: should aim for it to be exceptional because it's an
34:51
Speaker 2: extension of how you know. The broader ecosystem views you
34:54
Speaker 2: and your brand and how you do things. But for us,
34:56
Speaker 2: we really like to get to know people over extended
34:58
Speaker 2: periods of time because we are true co founders for
35:01
Speaker 2: these companies. It's not just us writing a check and
35:04
Speaker 2: saying we're going to sit on your board and check
35:06
Speaker 2: in once a quarter, like we are a true extension
35:08
Speaker 2: of your management team. And so for us, I think
35:10
Speaker 2: we are looking for a very collaborative person who wants help,
35:14
Speaker 2: you know, wants to have dialogue with us, with our partners,
35:18
Speaker 2: and who wants to build a company in a more
35:20
Speaker 2: collaborative way than some others might build them. And there's
35:23
Speaker 2: a lot of ways to be successful, but we found
35:24
Speaker 2: that that's the pheno type of entrepreneur. This most successful
35:27
Speaker 2: in our ecosystem.
35:29
Speaker 1: Now Well said, you know, you have a couple of
35:30
Speaker 1: people working with you. I think of David Feinberg, you know,
35:33
Speaker 1: from Oracle, Cerner, Gey Singer, John Driscoll from Walgreens. You know,
35:39
Speaker 1: what was the pitch to them to come on board?
35:41
Speaker 2: It's interesting, I think early days, you know, the first
35:44
Speaker 2: you know, really senior executive that joined us was John Knowsworthy,
35:48
Speaker 2: who was the CEO of Mayo Clinic. And doctor Knowswhorthy
35:52
Speaker 2: had gotten a million calls, as you could imagine, given
35:55
Speaker 2: what he achieved during his decade as CEO of Mayo,
35:58
Speaker 2: and had never really answer many of those calls beyond
36:01
Speaker 2: the occasional board role for United or a Merk etc.
36:05
Speaker 2: And I think for him, what he found so unique
36:07
Speaker 2: about this pitch, and he says this often himself, is
36:10
Speaker 2: the pitch was health systems are extraordinary sources of innovation,
36:15
Speaker 2: and they face a lot of challenges in delivering world
36:18
Speaker 2: class patient care, and we know what those challenges are.
36:21
Speaker 2: Our thesis was not that we are going to go
36:23
Speaker 2: build things to give to the health system. It's that
36:25
Speaker 2: we were going to partner with them, shoulder or shoulder,
36:28
Speaker 2: understand what their challenges are, and then bring complimentary skill
36:31
Speaker 2: sets to bear to be able to partner with them
36:34
Speaker 2: to transform themselves. And so I think that pitch very
36:37
Speaker 2: much resonated because it was so different from how the
36:40
Speaker 2: last generation of health tech companies were built. And you know,
36:44
Speaker 2: doctor Feinberg, I think is one of the most interdisciplinary,
36:48
Speaker 2: you know, leaders in healthcare. Where he's been he's a physician,
36:51
Speaker 2: he's led health systems, he's been a technology leader at
36:54
Speaker 2: Google and Cerner and now Oracle, and so his expertise
36:57
Speaker 2: I think spans so many different perspectives, and I think
37:01
Speaker 2: he was a huge believer in that approach and also
37:03
Speaker 2: a huge believer in this notion of health systems coming
37:06
Speaker 2: together to build solutions that can drive really impact in
37:10
Speaker 2: the ecosystem. And so this notion of how do you
37:13
Speaker 2: bring all these regional, non competitive health systems together to
37:16
Speaker 2: build solutions that can be competitive with the things the
37:20
Speaker 2: payers may be producing, or Amazon or the hyper scalers
37:23
Speaker 2: might be producing, et cetera. Because you know, these challenges
37:27
Speaker 2: are too big and too meaty for anyone health system
37:30
Speaker 2: to solve themselves, and so all these folks have similar
37:33
Speaker 2: challenges and so it's crazy for them not to come
37:36
Speaker 2: together and work together to try to, you know, build
37:38
Speaker 2: things that are going to be much stronger than any
37:40
Speaker 2: one system could produce alone. And so I think the
37:43
Speaker 2: pitch is very much aligned to how do we leverage
37:46
Speaker 2: the expertise of all of these amazing leaders. You know,
37:49
Speaker 2: John Driscoll included, who's a different type of leader as
37:51
Speaker 2: you can imagine, where he's been a very senior executive
37:54
Speaker 2: in building you know, large scale technology and tech enabled
37:58
Speaker 2: services companies, and so brings that entrepreneur mindset of you know,
38:02
Speaker 2: how do I build a company from very early days
38:04
Speaker 2: to achieve success for patients, for communities, and also for investors.
38:09
Speaker 2: And so I think we've tried to, you know, build
38:11
Speaker 2: a very complementary team of people who have very different
38:14
Speaker 2: experiences and skill sets, and that is extraordinarily helpful as
38:17
Speaker 2: we're building boards for companies, as we're formulating our strategy,
38:21
Speaker 2: as we're recruiting entrepreneurs into the ecosystem, et cetera.
38:25
Speaker 3: So it's really.
38:25
Speaker 2: About how do we build a team that you know,
38:27
Speaker 2: really melts well together and that has great synergy. And
38:30
Speaker 2: whenever we have, you know, an area that we want
38:32
Speaker 2: to bring an expertise in, we have someone on the
38:34
Speaker 2: team that understands us, our partners, how we work, and
38:37
Speaker 2: we can bring that expertise into the fold very quickly.
38:40
Speaker 1: Thinking ahead, where do you want to be in I
38:42
Speaker 1: don't know what the right time frame is three to
38:44
Speaker 1: five years.
38:45
Speaker 2: So I think for us it really comes down to
38:49
Speaker 2: driving impact in places where we think that, you know,
38:52
Speaker 2: there's the biggest need at any given time, and so
38:55
Speaker 2: I think we're going to continue to build companies. We
38:57
Speaker 2: don't just want to launch lots of point solutions that
39:00
Speaker 2: are solving small issues. We would much rather build a
39:03
Speaker 2: smaller number of companies that each drive very substantial impact
39:08
Speaker 2: and are tackling some of the really hard challenges in
39:11
Speaker 2: healthcare that others have not solved, versus lots of narrowpoint
39:14
Speaker 2: solutions and say, oh, you know, I've gone out and
39:16
Speaker 2: launched twenty companies. I would rather go say, I've built
39:19
Speaker 2: five companies that have each driven extraordinary impact in the ecosystem.
39:23
Speaker 2: So I think it's going to be continuing to lean
39:25
Speaker 2: into that concentrated approach of we don't want to build
39:28
Speaker 2: companies that we don't think are big swings that can
39:31
Speaker 2: solve massive problems and also generate great financial returns to
39:35
Speaker 2: US and to our partners, and we view those as
39:37
Speaker 2: being very complementary since I think at the end of
39:40
Speaker 2: the day, the most successful companies are the companies that
39:43
Speaker 2: solve huge problems that others have not been able to solve,
39:46
Speaker 2: and in the process you can drive a financial return
39:49
Speaker 2: to investors to employees. You know, we view it as
39:52
Speaker 2: kind of a ritual state enforcing virtuous cycle. So I
39:56
Speaker 2: think we're going to continue to lean into that approach.
39:58
Speaker 2: I also think we'll probably take some bigger swings as
40:01
Speaker 2: it relates to particularly larger scale assets that we think
40:05
Speaker 2: are right for AI disruption. I think there's a lot
40:08
Speaker 2: of legacy assets that are out there that have great
40:11
Speaker 2: customer relationships, you know, trusted ecosystems of partners in place,
40:16
Speaker 2: you know, really interesting data and access to workflow, et cetera,
40:20
Speaker 2: which are going to need to transform themselves. And so
40:23
Speaker 2: we've now built this really interesting set of technology companies
40:27
Speaker 2: that I think can do a lot of that digital transformation.
40:29
Speaker 2: And so I think we are going to look to
40:31
Speaker 2: lean into some of the services. You know, heavy companies
40:35
Speaker 2: which today may be thirty percent gross margin, but with
40:37
Speaker 2: AI could be sixty to seventy percent and could be
40:40
Speaker 2: a lot more scalable and the way they approach the market.
40:44
Speaker 2: So I think it's going to be a hybrid approach
40:46
Speaker 2: for us of building more technology and also leaning into
40:49
Speaker 2: legacy companies where we think that we can bring an
40:51
Speaker 2: entirely different approach that's much more tech enabled. And ultimately
40:55
Speaker 2: what that all comes down to is can we serve
40:57
Speaker 2: as egis as you know, a really effective scaled partner
41:01
Speaker 2: to large health systems, to life sciences to payers. And
41:05
Speaker 2: I think as I look at us expanding the number
41:08
Speaker 2: of partners that we have, we're spending a lot more
41:10
Speaker 2: time with the life sciences community, and I think there's
41:13
Speaker 2: a really interesting nexus between you know, providers and pharma
41:17
Speaker 2: around how do you better leverage you know, clinical trials, uh,
41:21
Speaker 2: you know, data assets, you know, all the different things
41:24
Speaker 2: that sit at that nexus to be able to get
41:27
Speaker 2: drugs to patients a lot more effectively, run trials more efficiently,
41:30
Speaker 2: et cetera. And So I think for US, leaning into
41:33
Speaker 2: places where there's friction at an interface and the ecosystem
41:36
Speaker 2: and then thinking through how do we build new technologies
41:39
Speaker 2: and new solutions that can make that exchange a lot
41:42
Speaker 2: more frictionless. So for us, we're you know, engaging more
41:45
Speaker 2: broadly in the ecosystem as well.
41:48
Speaker 1: So one last question here before we maybe wrap it up,
41:51
Speaker 1: maybe one technical question and one personal question. But you know,
41:54
Speaker 1: if you look at the technology roadmap coming in the
41:56
Speaker 1: next couple of years, what are you most excited about.
41:59
Speaker 2: There's so many things, and so if I were to
42:01
Speaker 2: highlight one thing, I think it is starting to see
42:04
Speaker 2: large scale impact of AI agents. I think we're very
42:08
Speaker 2: very early days of seeing AI agents as a technology deployed.
42:12
Speaker 2: But I think as you look at health systems in particular,
42:16
Speaker 2: there is such a massive need across both the back
42:18
Speaker 2: office and the front office, and I think we are
42:21
Speaker 2: only in the very very early days of seeing that
42:24
Speaker 2: technology deployed at scale, and we've been fortunate over the
42:27
Speaker 2: last few years to be some of the earliest deployers
42:30
Speaker 2: of the tech. But I think as it has now
42:32
Speaker 2: demonstrated trust and efficacy and ROI I think you're going
42:36
Speaker 2: to see health systems and other players start to really
42:39
Speaker 2: lean into those technologies, which I think has huge potential
42:42
Speaker 2: to improve access efficiency, make health systems more financially sustainable,
42:47
Speaker 2: which is going to be incredibly important. So I think
42:49
Speaker 2: as I think about where there's the nearest term opportunity
42:52
Speaker 2: for impact. That's probably the place that I see as
42:54
Speaker 2: being really at the knee of the curve in terms
42:56
Speaker 2: of where they go.
42:56
Speaker 1: And maybe finish this sentence in five years from now,
43:00
Speaker 1: now I will be surprised that we still did what
43:04
Speaker 1: without agentic AI.
43:06
Speaker 2: So I think one, and this is actually a slightly
43:09
Speaker 2: different direction than what I was saying on agentic AI,
43:12
Speaker 2: But I think AI is now becoming so effective at
43:15
Speaker 2: clinical decision support that you were going to get to
43:18
Speaker 2: a place in the next five years where it's going
43:20
Speaker 2: to be seen as almost medical malpractice not to have
43:23
Speaker 2: an AI look at a diagnosis, for example.
43:26
Speaker 3: And so I think you.
43:27
Speaker 1: Were not an out of the box prediction. But I'm
43:30
Speaker 1: not surprised.
43:30
Speaker 3: I mean it is so good.
43:32
Speaker 2: I mean even you know, open evidence is a great
43:34
Speaker 2: example of you know, open evidence is I think a
43:37
Speaker 2: lot more effective than you know CHATCHYBT because it is
43:40
Speaker 2: fine tuned and trained on all the leading medical journals,
43:43
Speaker 2: and I think there's a lot less potential of potential
43:46
Speaker 2: for hallucination. But even when you look at chat GIBT,
43:49
Speaker 2: you are seeing individual consumers put their health history in
43:52
Speaker 2: and you know, achieved diagnoses for themselves, not even in
43:55
Speaker 2: consultation with their physicians that they've had, you know, a
43:58
Speaker 2: decade plus of going to doctors and not being able
44:01
Speaker 2: to figure out And so I think it means that
44:03
Speaker 2: people people, for one, are going to take much more
44:05
Speaker 2: control over their own health, which I think is really important.
44:08
Speaker 2: And I think it's going to turbocharge you know, the
44:11
Speaker 2: wisdom and you know extraordinary training that are physicians across
44:15
Speaker 2: the country already have. I think if you can, you know,
44:17
Speaker 2: take that to the next level, it's going to mean
44:19
Speaker 2: that you're able to deliver far better outcomes for patients.
44:22
Speaker 2: They can own their own health a lot more effectively.
44:25
Speaker 2: And the really thorny challenges that you know previously you
44:28
Speaker 2: may have needed to try to access a Mayo clinic
44:30
Speaker 2: or one of the really extraordinary places where they can
44:33
Speaker 2: go to try to diagnose you know, complex serious illnesses.
44:36
Speaker 2: How do you democratize that access more broadly through technology.
44:40
Speaker 2: I think there's a huge amount of potential for that
44:43
Speaker 2: in the next couple of years.
44:44
Speaker 1: I'm an agreement. So maybe as our last question to
44:47
Speaker 1: wrap up, I always ask our guests if there's something
44:49
Speaker 1: personal that they've learned in their their their own experience
44:53
Speaker 1: or in their their professional experience that really drives what
44:56
Speaker 1: they see as their day to day mission. John, is
44:58
Speaker 1: there something in your background that you'd like to share?
45:00
Speaker 2: Sure, So what really motivated me to launch AGIS was
45:04
Speaker 2: my mom, you know, was trained as a nurse. She's
45:07
Speaker 2: a cardiac ICU nurse. When I was three, she had
45:10
Speaker 2: a major traumatic brain injury at a boat race. I
45:13
Speaker 2: appreciate it, where an awning blew off in the wind.
45:16
Speaker 2: You know, she had a horrible brain injury, was in
45:19
Speaker 2: a coma for a long period of time, was never
45:21
Speaker 2: able to go back to work as a nurse again.
45:23
Speaker 2: Has experienced, you know, pretty severe health challenges my whole life.
45:26
Speaker 2: And so I have seen her from the time I
45:29
Speaker 2: was a really small child, struggle to access the health
45:31
Speaker 2: system in the right way. Despite having great access we
45:34
Speaker 2: grew up in Boston, had access to world class care,
45:37
Speaker 2: et cetera, and it was still incredibly challenging. And you know,
45:40
Speaker 2: from an early age, I wanted to do something in
45:43
Speaker 2: healthcare that tried that you know, enabled a system that
45:46
Speaker 2: is more accessible for you know, for everybody. And so,
45:49
Speaker 2: and I've always thought technology had a major role to
45:51
Speaker 2: play in that, and so that's been a huge driver
45:54
Speaker 2: and motivator for me as I've gone out to Beliegius.
45:57
Speaker 1: Well said, and thank you for sharing that so interesting.
46:00
Speaker 1: There's a common thread among a number of the people
46:02
Speaker 1: that we've had on this podcast, whether they're a fair
46:05
Speaker 1: number of them have been clinicians in their past life,
46:08
Speaker 1: but they say, oh, you know, I could have one
46:10
Speaker 1: hundred two hundred, one thousand patients or I could touch
46:13
Speaker 1: thousands of people with the company that I build, And
46:15
Speaker 1: I think that that resonates exactly with that thesis.
46:19
Speaker 2: Yeah, healthcare is one of those unique spaces where I
46:21
Speaker 2: think almost everyone has a story of how the health
46:24
Speaker 2: system has affected them and what drives them to, you know,
46:28
Speaker 2: try to enable change at a much broader scale and
46:31
Speaker 2: you know, broader level of impact. And so you know,
46:33
Speaker 2: I'm encouraged and inspired every day as I meet entrepreneurs
46:37
Speaker 2: and investors and folks who you know, are in health
46:40
Speaker 2: systems that are inspired to try to create a better system.
46:43
Speaker 2: And I think we now have a totally different set
46:46
Speaker 2: of tools and technologies to do it. So I am
46:49
Speaker 2: a chronic optimist, but I think I have never been
46:51
Speaker 2: more optimistic about the potential to create a better system
46:54
Speaker 2: than I am right now.
46:55
Speaker 1: And on that note, we'll wrap it up. Thank you, John,
46:58
Speaker 1: Thank you for sharing that story and for all the
47:01
Speaker 1: details he gave us on that's John Beetle, Managing partner
47:05
Speaker 1: at Ajus Ventures. Thank you so much for joining us
47:07
Speaker 1: on our latest episode, and please make sure to click
47:09
Speaker 1: the follow button on your favorite podcast app or website
47:13
Speaker 1: so you never miss a discussion with the leaders in
47:15
Speaker 1: healthcare innovation. I'm Jonathan Palmer, and you've been listening to
47:18
Speaker 1: the Vanguards of Healthcare podcast by Bloomberg Intelligence. Until next time,
47:22
Speaker 1: take care,