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A Fireside Chat With Tim Gordon: Talent Questions Keeping Founders Up At Night Answered

I don’t have all the answers, and I certainly don’t have all the questions, so rather than taking a stab at what was on people’s minds this quarter, I asked many of the Founders and CEOs we work with what was stumping them. A number of questions popped up consistently, so we took a run at them here.

 

In startup hiring, how do I trade off between drive/raw talent and role-specific experience? (AKA Hiring Athletes)

I’ve always been a fan of hiring athletes (those with drive, motivation and talent) for any role. I’m convinced that you can successfully hire that prototype at all levels successfully, but it takes a specific culture and an open mind to make it work. That said, when it comes to startups – especially in Healthcare – experience with the way things have always been done isn’t necessarily the perspective companies want or need. No matter what, I’d advocate for job descriptions as guideposts, not checklists, because there’s tremendous value in hiring people who have a track record of just figuring out how to get things done. Often times, there’s just no way around it – some criteria to be a CTO or Chief Medical Officer are non-negotiable – but A players who know how to make things happen are invaluable in startup environments where structure is often an illusion.

All of that said, it’s worth noting that hiring for drive and motivation is table stakes, no matter what position you’re filling. I encourage folks not to get too hung up on checking off every bullet point from a job spec – especially when you may be able to fill gaps with other hires you already have planned.
 

What’s the difference between Sales & Business Development?

These two are actually quite different. The reason people conflate the two, I believe, is because somewhere along the way “sales” co-opted “business development.” Maybe ‘Business Development’ is a more elegant, less threatening title for a Salesperson. I’m not sure why sales turned into a dirty word – it’s literally the lifeblood of any product company. In reality, there’s absolutely nothing wrong with driving sales and growth, but we all know how important optics are when it comes to Sales, and so the Business Development moniker seems to have stuck to sales roles.

In practice, business development is something else entirely – call it a cousin to sales. Typically, companies should think about hiring a Sales Executive when they’re past the product-market fit stage, and they need someone who can build a pipeline, qualify leads, manage deals through the pipeline, conduct resources across an organization at various stages of the sales process to ensure the right people are involved, and generate revenue. Business development in my view is more about strategic partnerships; developing channels and driving sales through those channels. A strong BD person can build those partnerships today, as well as establish and foster relationships that drive exponentially increasing value in the channel afterward. There’s also a strategic approach to channel-building. It’s not about just going out and selling your product, but convincing your partners to sell for you as well. That type of channel-building generates revenue without a commitment from your Sales people.

There are even certain cases where business development execs don’t even generate revenue in a traditional sense today, but instead focus on building value-added relationships between organizations. The benefit here isn’t revenue (in the short term), it’s the fostering of credibility amongst the user base, the growth of user adoption, and the evolution of value drivers for those users. It’s this bigger-picture component that separates business development from sales (that’s not to say that sales isn’t a strategic enterprise, it’s simply that the strategic element of business development requires a slightly different approach). I’d argue there’s also a healthy dose of evangelism required in business development, as you’re often convincing folks that they both have a problem, and that you have the solution.

Lastly, it’s important to keep in mind that business development and sales can and should coexist. An organization can have both – effectively acting as peers – performing very different, yet complementary functions. We’ve completed searches where we actually titled the BD role ‘VP of Partnerships,’ just to make it abundantly clear that the position is not a traditional sales role and won’t be generating revenue, instead achieving other objectives such as user acquisition and creating value for users once they’re embedded in the platform.
 

How do I expand my funnel of potential candidates across multiple roles?

The key here is having a plan. Start by breaking down the roles you’re hiring for, the priority of those roles, and what success in each role looks like (for more on the importance of planning before hiring, reference this article from our Q1 2018 newsletter).

Once your plan is in place, harness the power of your network to get as many people working on your behalf as possible. That means ensuring that key stakeholders (leadership, investors, board members and other employees) understand your needs clearly, and that you’re holding them accountable when it comes to uncovering potential candidates. And speaking of accountability – success depends on it. Someone on your team has to own the process internally, and be responsible for managing it and reporting on progress

On a typical search, we identify close to 200 potential candidates, proactively. We get, on average, better than 60% engagement rates, which means there’s a good chance we’ll talk to 120 candidates, if not more. We interview a large portion of those, just to get down to a single hire. That doesn’t include all the networking conversations we have with folks we know. And that’s coming from an organization that spends pretty much all day working on this stuff. This obviously won’t be the only thing on your plate. If you’re relying on inbound resumes, the numbers are even more lopsided, as you’ll be sorting through lots of resumes for folks that didn’t even bother to read your spec. So your goal from the outset should be to make the process as efficient and hassle-free as possible. To that end, we always recommend clients utilize an applicant tracking system. None are prohibitively expensive, and the ROI is immediate.

Another way to simplify the process is to have your current team do the heavy lifting for you. I’m a huge fan of internal employee referral programs. Incentivizing employees to recruit on your behalf is the least expensive and most efficient approach to identifying strong talent. Obviously, you won’t be able to fill every single role this way, but if you manage to source a handful of Engineers from your Development team, that leaves you plenty of resources to invest in finding candidates for senior searches that are harder to fill and will likely require outside expertise. An added benefit is that your people already know your culture. That means they’re likely to refer folks who will be a strong fit. Just be careful when it comes to diversity – you don’t want your entire employee base to look and think the same. Cliques form and groupthink ensues. It can be ugly.

The most important takeaway here is that being proactive is key. Don’t sit back and fall into the trap of assuming that because you know how exciting your business is, everyone else can see that from the job description or your website. They can’t. It’s your responsibility to convey the strong foundation you’ve already established, and the boundless opportunity that lies ahead for your business and employees.

 

When’s the right time to hire XYZ?

Broadly speaking, the right time is always now. If you’ve got the budget and you’re in growth-mode, I’m an advocate of snapping up the best person you can possibly land, any time you can. If you’re not ready to pull the trigger, it’s still worth proactively building relationships with candidates you’re excited about early, so that when the time comes, a quick call gets the job done.

That said, the role you search for is going to be dependent on your current needs. If you’re getting ready to raise a Series B and you don’t have a CFO, it’s probably time to get one. If you have a product that’s already been validated with product/market fit, but no strong pipeline – and no one on your team is particularly sales-oriented – then it’s safe to say that you need a Sales exec. The key is not to wait until the pressure builds before you start your search, that’s when emotional decisions take place. Remember, the process alone can create value, as you build relationships along the way. You might not need that rock star CFO you meet with today, but when the time comes six months from now, you’ll be able to pick up the phone and say, “We’re ready for you.” Most importantly, Founders and CEOs need to know what they are great at, and what they stink at. Hire the people that gap-fill your weaknesses as soon as possible, and get out of their way. Don’t be the hub and spoke CEO.
 

How often should we be giving feedback to employees on performance?

Constantly.

I’m of the view that performance reviews are a necessary evil, because structure is important. It’s critical that people understand from the outset what success looks like in their role, and what their performance is being measured against (this is especially true if their compensation is tied to performance). As the one giving the review, having a scorecard helps me avoid recency bias, since we do our reviews every 6 months. I strongly believe that no one should walk into a performance review and be surprised by the feedback. That implies feedback should be delivered in real-time. This can be challenging for startups, given that startup-life moves quick; months disappear. As a result, there can be an illusion of strong communication, because you’re all so physically close to one another. Sometimes folks who work shoulder-to-shoulder think they’re communicating, when in fact they’re internalizing certain things.

For example, you might have been meaning to give Sally feedback about a few things you’d like her to do differently or improve on, but the right moment keeps getting away from you. Six months go by, and Sally walks into her performance review assuming she’s been doing a bang-up job. Then you deliver your feedback and it’s not as positive as she expected, perhaps signaling that as a result, she didn’t earn her full bonus. She had no clue that was coming, and now she’s shocked. People tend to be at their worst when they’re caught off-guard by bad news; as such, that kind of feedback can intensify an already bad situation, which could have been corrected long ago had the person been made aware of the problem in a constructive fashion. If the underlying thesis is that most people want to kick ass at what they do, consistent feedback is their oxygen.

The ‘togetherness’ of startups creates an additional, often-overlooked challenge for companies when it comes to delivering real-time feedback. CEOs typically want to deliver positive feedback publicly and negative feedback privately, which is difficult when you’re all in a single room together. One solution here is to frame your constructive feedback in such a way that you aim it at the entire group, as opposed to a single person. You can then take that person aside later on to assess whether they absorbed your key points. That way you avoid delivering a public lashing. This amounts to a balancing act, which requires a certain amount of tact, however it’s vital that CEOs and Managers feel comfortable delivering negative feedback. If the aforementioned approach feels too thinly veiled, just grab the person before the day is over and have a chat.

My goal is always to make sure that anyone who is a part of our team has a good sense for where they stand at any given point in time. There are no absolutes, and short of something unethical, there’s virtually nothing that could lead to someone being shown the door out of the blue. Our job is to invest in smart people, know they’ll make mistakes, celebrate that, and learn from it.

An Interview With Dan Weinstein, CEO of Oshi Health

Dan Weinstein is the CEO of Oshi Health, a digital therapeutic platform for the self-management of Inflammatory Bowel Disease, based in New York City. Dan is a serial entrepreneur, and was the Co-Founder and COO of Cohero Health, another digital therapeutic platform for respiratory disease, prior to joining Oshi.

Tim: Dan, tell us a little bit about Oshi Health, and what drew you to the business?

Dan: Oshi Health is a digital health startup based in New York. We’ve launched a mobile app called ‘Oshi,’ which is a chronic disease management platform for people with inflammatory bowel disease (IBD, which includes Crohn’s disease and ulcerative colitis). We launched the app in June and it’s available for free in the Apple and Android app stores.

Oshi helps people better manage IBD through 3 core pieces of functionality: Track, Learn and Ask.

On the Track side, we help patients keep track of their treatments and lifestyle factors which could impact their disease. We also help them track their symptoms.

On the Learn side, we have original content that’s personalized to patients. We provide information on how to manage the disease itself – and how to have a healthy, balanced life with a very debilitating disease.

On the Ask side, people can submit their questions directly within the app, and we have a team of gastroenterologists and IBD experts who answer them in a moderated forum within the app.

Two things to know about Oshi: Right now, we offer the first all-in-one mobile solution to help patients find better control and live better with IBD. But our mission goes much beyond that. IBD is really unique – we don’t know what causes it, and we don’t know what causes flare-ups. Patients will experience remissions – where the disease goes dormant and they feel fine, and then they’ll suddenly have a flare, and we don’t know what causes that. And even if we did, it’s a very personalized disease, so what causes a flare for one person might not cause a flare for another person. And what works to help one person control their disease might not work for other patients. So our grand vision for Oshi is to be the platform that helps build the knowledge of what are the most effective treatments — including lifestyle choices — for different types of people with IBD.

Right now there are about 11 million IBD patients around the world, and each one of them is running a little experiment on themselves – they are doing a clinical trial, in a sense, with an N of 1. They are trying a mix of medication, making lifestyle changes like sleep, diet, exercise and maybe they’re trying some non-traditional medicine. They’re desperate to find a way to control their IBD, so they’re trying a recipe of different things to achieve remission, and some of them are having success. Some of them are figuring out what works for them to achieve remission.

But, right now, they are the only ones who benefit from what they’ve learned. Oshi is enabling there to be 1 clinical study with an N of 11 million. Our platform collects the real-world evidence of ‘what are patients doing, and what are they finding success with to control their IBD?’ And then we can leverage that in the future to make recommendations for personalized treatment. So we should ultimately provide a newly diagnosed patient with the most likely recipe of things that will help them control their specific version of IBD, and then we will be the tool to facilitate their treatment, as well as track and manage it.

Tim: So with that in mind, what has the partnership or origination from Boston Consulting Group’s Digital Ventures team provided in the way of a head start for you guys?

Dan: We were launched in collaboration with a group within Boston Consulting Group called Digital Ventures. They’re a really interesting group that basically creates startups. They helped create our strategy, business model, and early product. So the very first thing they offered was acceleration. After a few months with BCGDV, Oshi was where a normal startup would have been after a year or two. We also had some very smart people helping us develop our plan and business model. We sometimes veer from the original plan – it’s healthy to do that – but it’s always helpful to go back and see, “Are we doing something that was originally envisioned, or are we doing something different? And is there a reasonable cause for us to be doing something different?”

Also, as an early-stage startup, one of the most difficult challenges is getting credibility and getting people to pay attention to you. It totally changes that dynamic when we’re able to mention that BCGDV was involved in our creation. We actually worked out of their really nice space in Hudson Yards for the first few months, so when we’re building our team and interviewing people, it was nice to be able to show off an amazing office space rather than my kitchen!

Tim: That was not the worst setup that I’ve ever seen. It was a pretty good situation in the beginning. Can you share an example of a patient use case with the platform that you guys have seen so far, from a success perspective?

Dan: Imagine you’re diagnosed with Celiac disease: It’s one of the worst days of your life, but it’s also one of the best days of your life because you finally know what’s wrong with you, and somebody can tell you exactly what to do to get rid of the symptoms you’ve been dealing with, but didn’t know how to fix.

The day you’re diagnosed with IBD is just a bad day, because there’s not a great story yet of what are we going to do about it. IBD medications are not ideal; they have really bad side effects, they don’t always work, and it’s hard to predict if they’re going to work for you. So it’s just a bad day.

What Oshi offers patients is some guidance on that dark day. One of the pain points is that patients don’t know where to go for credible, reliable information that pertains to them. Because with IBD, there’s not a lot known – and there’s a lot of misinformation out there. So on the Learn side of Oshi, we have content that helps educate patients – Oshi content is verified by IBD experts, it’s written by experts, it’s all credible information, and it’s personalized. We know if a patient has ulcerative colitis or Crohn’s, as well as if they are experiencing a flare or not experiencing a flare. We know which Oshi articles they’ve preferred in the past. Based on that information, we serve them a personalized news feed that gives them the most relevant information. That’s something that doesn’t really exist anywhere else, and that’s something that patients have really responded to, because they finally have a place to go for something that can really help them.

The Tracking features of Oshi help patients figure out what works best for them. So let’s say that a patient reads that avoiding gluten has helped other patients and maybe it can help them. We offer them a tool to track their progress on that specific regimen that they want to try, and we show them if it’s working for them. It also creates a report that they can share with their physician to make the office visit more productive. No more struggling to remember what happened 6 months ago, or dealing with “recall bias.” Instead, their treatments and symptoms are all mapped out on a nice report that they can share with their doctor to really individualize their treatment.

We already have 20,000 downloads in the first four months of launch, and it just shows you how much patients have been wanting a tool like this.

In the future, the use case will also include aiding with the challenge of IBD diagnosis. It can take years before a patient is properly diagnosed. Imagine a world where you have a tummy issue, you download Oshi and you use the app for a few weeks, and it helps you track your symptoms, helping you identify or screen for what disease you might have. The app could say, “Hey, this might be indigestion, or it might be IBD, or this might be Irritable Bowel Syndrome, which is a totally different disease, and they’re all managed differently.” So it gives you and your healthcare provider a little bit more insight into what the diagnosis might be.

Then, once you go to a doctor and you are diagnosed with IBD, today, there’s a standard of therapy that is tried, and it’s a lot of trial and error: Let’s see how you respond to this drug, and if it works, great, and if it doesn’t, okay let’s try the next drug. In the future, Oshi will have learned about patients like you, and we’ll know which drugs you’re most likely to have success with. And so it will get rid of that trial and error, and we can prescribe you something that is more likely to help you. Then Oshi becomes your tool to help manage that treatment regimen, and then you become a new data point in our global research platform, and we learn about how you respond to that treatment, and we feed our algorithm with more one more data point to make it even more accurate.

Tim: That’s great, that’s awesome to hear. What lessons have you learned from your last entrepreneurial go-around that you want to apply to your time here at Oshi?

Dan: The first thing involves hiring – which is very applicable for this conversation. This is now my 4th startup, and one of the things I’m doing differently at Oshi, based on what I’ve learned, revolves around hiring. I’m now older, I’m a family man, I have two small kids at home. So I can’t just work all day like I used to. I have to go home and be the Chief Diaper Officer. Recognizing that, I’ve hired a Chief of Staff, who can help me do some of the things that as a CEO I need to do: strategy, research, planning, and just someone who can help take the load off. That’s one hire that I made based on past lessons and that I’m thankful for. Another is a Finance and Operations Manager. Somebody who can be our office manager, but also close our books and help model different commercial opportunities. That’s something I’ve learned at my previous company – there’s so much work to be done around that stuff. It was I think the 2nd hire we made, and it’s just been tremendously helpful.

Tim, you’ve helped me think through some other staffing strategy. Especially with the Head of Partnerships role, which I think was a very clever hire. It was clear to me the work to be done, but it wasn’t clear to me how to manage it. Some early brainstorming sessions that I did with the Aequitas team really helped clarify the plan.

Tim: Thanks for the plug! Digital Therapeutics are pretty hot right now. What are you guys doing to bridge the mental gap on the consumer side, where traditionally some people view that the only way to get better is to take a pill?

Dan: I’m going to challenge this question a little bit. In the disease states that I know best – respiratory and IBD – patients really want to get better, and are very comfortable trying things other than traditional medication. Especially with IBD. IBD patients are desperate to get better, and they are trying anything they can to do it. But from both experiences – especially with IBD – the thing we hear the most is that patients want to feel in control of their disease. And a platform like Oshi helps them do that. Just giving them the tools to track what they’re doing helps them feel in control. So I argue that for users – for patients – if you apply good user-centric design and you listen to patients when building your platform, and you incorporate that feedback, patients will love what you’re offering. That’s been my experience at Cohero and at Oshi.

For me the challenge with digital health is not the patients, it’s the enterprise customers. Whether that’s an at-risk health system, or a payer who has a financial interest in better managing their patient populations with chronic disease – they’re the hardest to convince because you need to have the clinical evidence showing that your platform actually does improve outcomes. The only way to address that is to be a real, science-based therapeutic company, and that’s what we’re doing at Oshi. We have a Chief Medical Officer. Our platform is being used in a clinical study out of the University of Edinburgh. We’re also preparing to do a randomized control study, which shows that patients using Oshi have better outcomes, and hopefully reduced costs, and we’re going to publish that in a peer-reviewed journal. Then, we’re going to go after those tougher enterprise customers, with the data packet that you need – that’s the only way to convince them.

Tim: And I think you started to touch on it a little bit earlier, with respect to culture – what aspects of your culture are you looking to hold onto as you grow?

Dan: Startups are fun! It’s a very naturally motivating place to be. We are a small team where people can make a tangible impact on the creation of a company, and our entire mission is to improve the lives of people who really have it tough. So it’s a pretty easy place to get people motivated and excited to be, especially at the early stage where you’re creating.

So to answer your question, the aspects that I try to hold onto as we grow – the very first one is fun. I want people to enjoy coming to work, being with the people that we have here, and doing what we do. I want them to feel that there’s a purpose for what we’re doing, that we as a company have a meaningful objective, and that they have a place to make an impact on that objective. As CEO, I think if I do the hiring part of my job well, it makes the rest of my job easy. So I spend lots of time on hiring, and interviewing maybe more people than other people would. I like to ask people to do homework and do some real work, to see how we work together before making any final decisions.

Then, once the team is hired, I like to recognize people for the impact that they’re making. We actually have an employee of the month! When people do something big for Oshi, we recognize them publicly and put their picture on the wall.

Also, to help keep people inspired, I find it helpful to have them hear from the people we are focused on helping. We had a workshop last week where we sat all day learning from patients about the challenges of having IBD. Oshi shut down – everybody, all hands were there, with laptops closed. I wanted everybody there to hear from patients directly. And that got people really excited and motivated about what we’re doing at Oshi. And then we had a couple beers afterwards, which always helps.

Tim: Beyond that, what keeps you up at night?

Dan: I love being an entrepreneur – to me there’s nothing more exciting or fun, or that has the same potential for making an impact in a positive way. But the definition of entrepreneurship is that you’re operating in unknown territory with a limited amount of resources. I have a chart of our cash burn, and it ends at some point if we don’t get customers or if we don’t raise more money. So that keeps me up at night, just knowing that all these people’s jobs and our mission of creating something meaningful for lots of people… if we don’t play it right, we can miss out.

And I find that it gets harder and harder to sleep as you get closer and closer to success. It’s all just a big dream at that early stage of a startup – you’re just building something, and nobody expects you to really make it, since most startups fail. But as it gets more and more real, and you start having more and more success, and you get closer and closer to achieving your goal, for me that’s when it gets harder and harder to sleep, because that’s when there’s more to lose. The thing about entrepreneurship is, you never get to turn off. Even when you are not working, there’s always this voice in your head saying, “Is this the one hour when if you turned off the TV and sent one email, it will be the difference between being successful and not being successful?”

Tim: What else, if anything, do you want people to know about, in terms of how you guys should be thought of, jobs that you want to hire for, people you want to hear from, partners that you’re looking for…?

Dan: One thing we didn’t talk a ton about is, the real unique thing that we’re doing is collecting real-world evidence on a disease that is very personalized in nature. So kind of like Flatiron Health – they have a product that is useful – but their real value to the world is that they are collecting data about lots of different patients with cancer – which, like IBD, it’s becoming a very personalized thing, where you treat each individual’s cancer, not just cancer the disease. It’s a model that’s pretty new.

At Oshi, we’re collecting data that is directly reported from patients, to build the data set of real-world outcomes to learn how to personalize treatments. That means we partner with a couple different types of people. First are people who care about better managing IBD, so that’s pharmaceutical companies, that’s healthcare providers, that’s actually also OTC companies and nutrition companies. We also have a research mission, so we partner with companies who provide genetic sequencing, companies who do microbiome sequencing, and health insurers, and pharma companies, on the R&D side, because we have a unique data set that’s never existed before.

The current thinking with IBD is that it’s this complex relationship between a person’s genetic history, their lifestyle, what their diet is, their microbiome, maybe a certain event in their lives that impacted them. The best way to manage it is likely a combination of the food that you’re eating, the medication you’re on, the way you live your life, if you’re getting enough sleep, if you’re controlling your stress, etc. So it’s a particularly complex disease that needs information beyond what you get from a randomized controlled study of a pharmaceutical product.

Nobody’s going to do a large randomized controlled study for measuring how stress impacts patients because it costs millions of dollars to do that. And no one company benefits, so who can justify funding it? So there’s just a big gap in the research of understanding the lifestyle component.

We’re collecting that data set, based on real-world patient data, and also tying it to effectiveness of traditional medications. It’s a new paradigm that we believe will lead to a much better understanding of how to treat people with IBD, so that they experience a far better quality of life!

 

Big Problems, Even Bigger Opportunity: What Has to be Done About Post-Acute Care

By: Tim Gordon, Founder & Managing Partner

Perhaps no sector of healthcare is more rife with challenges and opportunities than long-term, post-acute care. The common denominator that one finds when examining the post-acute care landscape is inefficiency. Everywhere you look, things are being done like it’s the 1990s. Phone-tag with patients, faxes to suppliers, manual data entry… how much time and money, and how many positive outcomes for patients are drowning in this archaic system?

Substandard treatment and inadequate monitoring lead to operational delays, which results in huge numbers of adverse and temporary-harm events for patients – the majority of them preventable – according to a March 2014 Office of Inspector General report. The reality is, too many hospitals and emergency rooms treat discharged patients like they are out of the system; an approach that contributes to a revolving door of patient readmissions every single year, which is both damaging to patient health and costly for acute-care hospitals, which remain by far the most expensive site of care, at an average of $2,882 per day.

It’s time for a change.

To manage chronic care effectively, we need to start focusing on preventative strategies, utilizing technology to intervene at precise moments, and increasing patient and caregiver engagement. Fortunately, there is a ray of hope: Just as bright, talented entrepreneurs have disrupted a range of industries by exploiting gaps and plugging holes – so too is the post-acute care industry being transformed. As with all things healthcare, it just takes a little more time. But change is coming.
 

Inefficiencies in the Market

The success or failure of the post-acute care model hinges on the communication and coordination of the healthcare providers involved in the patient-transfer process. Unfortunately, the current system for patient-transfer leaves a lot to be desired. A January 2018 survey of 162 hospitals by HIMSS Media uncovered numerous gaps between hospitals and post-acute providers that result in operational and clinical inefficiencies. For example, only a quarter of hospitals are partnering with post-acute providers to track patient care, and more than half have no established processes to manage post-acute providers, or are uncertain if they do. For those with processes, just 7% make use of automated discharge or referral management software. According to the survey, 25% of hospitals still communicate manually (phone calls, faxes and paper documents). This is mind-boggling.

A manual approach to patient monitoring is both inefficient and expensive. Cloud-based communications portals, telemedicine services, automated discharge or referral management software, and partnerships with preferred post-acute providers will free up nurses’ time and enable them to focus on core activities, as well as provide a consistent flow of touch-points that engenders a deeper sense of comfort in patients. This creates a smoother, more efficient transition from acute to post-acute care. Additionally, patient outcomes are improved, which leads to lower costs in the long run. So integrating technology into the operational workflow of providers is a win-win across the board.

The good news is that some integration is already taking place. Acute and post-acute care providers are finding that technology which synchronizes patient data with care plans gives case managers roughly 50% of their day back, which leads to more time spent with patients and their families, and more bespoke care packages tailored to each patient’s specific needs. Additionally, more and more hospitals are taking the time to determine which of their post-acute care providers are leveraging technology to track and improve patient outcomes. By reviewing readmissions, hospitals and referring physicians are working with post-acute care facilities to figure out what works, what doesn’t, and what can and should be handled differently. Those are the types of conversations that need to be had if our post-acute care model is to evolve beyond its current limitations.

Another positive forward-looking indicator is the willingness of older generations to adopt modern technologies into their lifestyles. Boomers have proven especially adept at doing so, which implies there will be less friction when integrating technology into the next generation’s long-term care continuum. Of course, we still have a lot to accomplish on this front for the current generation of patients – the majority of whom are over 75 and suffer from multiple chronic conditions. Advanced technologies such as biometric remote monitoring and risk-assessment analytics can help predict which patients are at a higher risk of readmission, and which need greater post-discharge oversight. But these advanced tools – which rely on wearable or digital technology – are rendered useless if the patients themselves are incapable of incorporating them into their daily routines. It’s no use having an app that can predict a patient with a chronic hip condition’s risk of falling if that patient has a barrier to utilizing the app in the first place. The solution is to educate patients about new technologies with the same dedication and zeal that goes into educating them about drugs and medical procedures.
 

The Change-Makers

Fortunately, there are a host of companies and startups looking to address these gaps in the post-acute market. To attack the inefficiencies currently embedded in DME, Parachute Health built a platform that allows suppliers to receive clean documentation, as opposed to illegible and often inconsistent faxes, which can delay discharges and create unnecessary data entry tasks leading to operational backlogs. Parachute’s digital platform accelerates the discharge procedure by providing patient management tools, delivery status updates, and MD signature capture all in one easy-to-use interface. And their electronic messaging service means providers don’t have to worry about back-and-forth phone interactions. The end result? Recovering patients get the DME they need, when they need it – before they end up back in the hospital. Hey, it’s the 21st century – it’s time healthcare moved away from faxes and phones and joined the digital revolution. Thankfully companies like Parachute are making that happen.

Another company doing amazing things in this space is Friend Health. We interviewed Founder and CEO Coley Parry in the Q2 installment of our newsletter. Friend Health collaborates with healthcare partners to bring in-home care to some of the most at-risk patient populations via multi-disciplinary care teams and proprietary technology. Their system saves costs by treating patients in their lowest acuity setting – at home, where the vast majority of chronically ill patients prefer to be treated. And because they tailor their care plans to the individual patient, Friend can deliver better patient outcomes all while utilizing a more efficient deployment of resources; exactly the kind of disruptive innovation that the post-acute care space so desperately needs.

And no commentary on post-acute care innovation would be complete without mentioning the impact of telemedicine. Companies like TripleCare and Call9 offer preventative treatment right at patients’ bedsides, affording them quick and easy access to leading physicians and healthcare professionals. Needless to say, patient outcomes improve substantially, as TripleCare and Call9 physicians have treated thousands of conditions on-site, the former avoiding hospital admissions for over 80% of their patient populations, and the latter decreasing hospital visits by over 50% for SNF patients.
 

Challenges and Opportunities

While it’s true that the post-acute care industry faces numerous challenges, it’s also true that beneath every challenge lies an opportunity. Take regulatory uncertainty, for example, which is a core concern of industry participants. What will CMS reimburse for when it comes to Medicare and Medicaid, and how will those reimbursements inform investor decision-making?

If we step back a moment, regulatory uncertainty exists in any industry undergoing innovation. Why should healthcare be any different? Yes, it’s unnerving not knowing how the federal government will react, but the likelihood is that once the benefits to both patients and the country’s bottom line are accounted for, disruptive technologies will continue to be welcomed with open arms (of course, I’m no expert on government policy, so don’t hold me to that one).

Along that same line of thinking, here are some eye-opening stats that you may or may not already be aware of:

  • • 10,000 Baby Boomers reach age 65 every day, and that will continue for the next 19 years
  • • 49 times as many people reach age 85 now than did a century ago
  • • Medicare costs are forecast to increase to $1.087 billion in 2024, reflecting a compound annual growth rate of 6.1%
  • • Spending on Medicare beneficiaries in their last year of life accounts for roughly 25% of total Medicare spending on beneficiaries age 65 or older

Clearly the rise in elderly patient populations and life expectancy will contribute to increased healthcare challenges and put incredible strains on our overall health system, most especially in post-acute care. But let’s not forget all of the positive tailwinds our industry has at its back: the advent of disruptive technology, a tech-enabled patient population primed to take full advantage of that innovation, and ambitious healthcare entrepreneurs working tirelessly to connect the dots. With that foundation laid, we should be comforted in the knowledge that the future for post-acute care will be more efficient, less costly, and produce a greater degree of positive outcomes. It has to.

Cracking the Code: How Growth-Stage Companies Can Build Strong Cultural Foundations

By: Steven Berman & Nina Mermelstein

We’ve all heard the phrase ‘company culture’ a million times. We know what it means; or at least we think we know. But when something is repeated so often it can be tough to cut through the clutter, escape the platitudes, and unpack exactly what needs to get done and the roadmap for how to get there.

Here at Aequitas, we often partner with founders during their initial growth-stage, and at no point in a company’s lifecycle is the establishment of a strong cultural foundation more important. The values and principles that growth-stage startups adopt will inform their worldview and decision-making for years to come. And given how few employees there are, each new hire plays a vital role in shaping the culture of growth-stage companies; the #4 employee has a much greater impact on the long-term sustainability of company culture than the #40 employee does.

Because culture is so integral to the success of growth-stage companies, we thought we’d delve into what founders can do to create and nurture strong cultural foundations. Below is a three-step process for establishing a lasting cultural blueprint.
 

Define Your Culture

Part of the reason there’s so much confusion around what makes a strong company culture is that people are focused on the ‘what,’ as opposed to the ‘who.’ Company retreats, ping pong tables and team happy hours don’t define your culture – your people do. Events and office perks are mere facilitators. So it’s worth asking yourself: what exactly are you facilitating? What types of discussions and interactions are your teammates having? That is your company culture. Culture is people.

Some founders want a gritty, no-nonsense team that’s all about rolling up their sleeves and tackling problems day-in and day-out. Others prefer a more creative dynamic team, where teammates are encouraged to think high-level and question every directive before its implementation. The culture you want to build will unearth itself in the people you hire. They are the ones who will embody your company’s perspective and worldview. Ping pong is just a way for them to let off steam.

Along those same lines, there are some who view culture as a measure of output: if the team is producing at a high-level, that implies the culture must be strong. Others, however, believe that culture is not directly linked to on-the-job performance; rather it is about the values and principles that the company espouses. This type of culture doesn’t directly inform an employee’s everyday performance. Instead, it manifests itself through a zeitgeist – or collective spirit – which transforms into a million-and-one decisions that are made at both a macro and micro-level going forward. If the first type of culture implies focusing on output, such as counting the number of trees you plant, then the second type means landscaping a forest and creating space for the trees to grow.

There is no right or wrong approach to crystalizing a strong culture – the key is to be honest with yourself about who you are as a leader and the type of work environment you’re trying to build, in order to encapsulate your company’s mission. Just remember that talk is cheap, and you must embody the culture you want to create – for nothing is more discouraging to teammates than a ‘do as I say, not as I do’ leadership style.
 

Identify and Attract the Right Team

When it comes to team-building, founders often focus on finding the best and brightest – and with good reason. But there are plenty of ‘best and brightest’ candidates out there. The real question is, which one will be the best fit for your company?

Anyone can read a resume. The trick to finding the right cultural fit is reading the person instead (i.e. understanding your candidates’ goals and what truly motivates them). That means reading between the lines via ‘active listening.’ Active listening implies paying attention to how candidates speak in addition to what they say. Do they speak in lists or are their thoughts more fluid? Do they tend towards the extreme with superlatives or are they comfortable with gray matter? When it’s their turn to ask you questions, pay attention to the types of questions they come up with – are they about product or process? Are they thoughtful? Were they listening, or were their questions canned?

Your goal as an interviewer should be to seek out authenticity above all else; to untangle the real from the artificial. Remember, those first few hires will inform your culture more than any others you make down the road, so it’s important to spend the time now to get it right (for more on the value of formulating a plan before taking action, see our 1Q18 article, ‘Getting Your Ducks in a Row: The Importance of Planning Before Hiring’).
 

Establish a Solid Foundation

A recent Harvard Business School study illustrates the importance of establishing a strong culture early. The study, which analyzed over 100 early-stage startups, found that employee happiness actually drops more dramatically at faster growing startups. Startups with 20-200% annual revenue growth over their first six years reported a much steeper decline in their employees’ overall happiness levels than startups with 0-20% annual revenue growth. The reason is that the faster growing startups were so focused on rapid growth that they neglected to establish a strong cultural infrastructure. So when the company faced challenges later in its life (typically years 3-4), the problems were exacerbated by the absence of a strong cultural foundation.

In effect, the fast-growing startups sacrificed the important for the urgent; they focused on the ‘what’ and the ‘how’ of their business, at the expense of the ‘who.’ This approach has its consequences, as the absence of a strong cultural foundation often leads to voluntary attrition by employees. The same study uncovered that founders who rate the importance of culture lower than 10 on a scale of 1-10 are 70% more likely to have high employee turnover rates than those who rank culture a 10 out of 10. Employee turnover is challenging for any business, but especially so for a growth-stage startup, which lacks the infrastructure needed to overcome the loss of a core executive. Think of investment in culture as an insurance premium against unplanned employee attrition.

When founders begin the sales and marketing phase, they often speak of early adopters. A different approach is utilized when engaging this demographic, since they are the ones willing to take a gamble on your untested product or service. Well, the same should be true for employees – the only difference is that instead of selling them on your product, you’re selling them on your vision. These folks are the early adopters of your company culture, so it’s necessary to treat them with the same patience, care and gratitude that you would an early adopter of your product or service. And just like early-adopting customers, the first employees you bring on will become advocates for your brand, spreading the gospel to future candidates, and by extension making your job of attracting the best and brightest that much easier (for more on the added benefits of a strong interview process, see our 2Q18 article, ‘Designing the Candidate Experience: An Exercise in Brand Stewardship’).
 

Focus on What’s Important

Healthcare is an industry built on empathy; helping others is at the very core of who we are and what we do. Virtually all of the CEOs, entrepreneurs, executives and employees we have engaged with are motivated by that same noble mission. So let’s leverage those common principles as we build and grow our businesses. Connect with candidates by expressing your passion and motivations, and ask current and future employees for the same in return. What may seem like a tenuous aspiration – the development of a ‘strong company culture’ – can in fact be achieved by the simple act of elevating people above process, and sharing your vision with your future teammates. After all, Culture is People.

An Interview With David Gelbard, Founder & CEO of Parachute Health

David Gelbard is the Founder and CEO of Parachute Health, a New York City based healthcare technology company aiming to digitize the post-acute durable medical equipment (DME) space. They recently raised a fresh round of funding, led by Insight Venture Partners, and we sat down with David to talk about his efforts to drag healthcare kicking and screaming into the 21st Century.

Tim: Like many founders in Healthcare, your entrepreneurial story begins with a personal one, so why don’t you tell us a little bit about why you started Parachute in the first place?

David: About 4 years ago, my dad, when he was 78, ended up going to the hospital for life-saving spinal surgery. The surgery was a success and it was a really wonderful day. Unfortunately, upon arriving home the walker that was supposed to arrive never got there. The hospital sent the order across via fax to the equipment supplier and it never actually got to the house. My father ended up falling; 4 years later he still goes to rehab because of the fall, still trying to fix what’s going on, but it’s just like… when you call back into the hospital and ask them why they screwed up, they just say, “well we faxed it.” For something like an oxygen tank, a walker, a wheelchair – things that you need for day-to-day living – it’s just insane to think we’re still using methods of communication like a fax machine in 2018.

At that moment I just felt that it was such an awful thing, an emotional rollercoaster for me and my family. I had a friend’s wedding that weekend that I didn’t go to – my sister had told me it may be the last weekend with our dad. And for him to get through surgery and then fall, it put a bad spin on such a wonderful thing that he had made it through.

So the company was created to make sure that this never happens again, to any family. The concept of a more efficient means of ordering DME – it’s just a no-brainer – it should happen. It’s a real problem that needs to get fixed.

Tim: So as you dug a little bit deeper into this space, what surprised you the most?

David: Two things shocked me: One is that other critical services use the fax too! Home care, ambulance, nursing home, orthotic, wound care – you name it, the fax machine is involved. It’s not just our special corner of the universe. It’s all of the things that get ordered from facility to facility or outside the four walls of a hospital, and that was pretty mind-blowing.

The second thing is this idea of insurance documentation; that today, to get something covered by an insurance company, you have to memorize as a social worker or a nurse or physical therapist tens of thousands of products, for hundreds of insurance plans, for twenty thousand different ICD10 codes, for multiple zip codes. These unique 5-10-20 questions count as the criteria to get things covered and no one knows them! The whole idea that when you use your insurance card, that you feel incompetent – that you don’t even know if you’re covered or not – it’s just something that’s out the door. There’s such distrust, or lack of confidence in the insurance card. That to me was really something – just how global of a problem that is; the level of communication across healthcare – that’s obviously a few things, but… healthcare I think is in the early innings of where it needs to be, in terms of technology and building out an infrastructure. I really think we’re in the first inning of a major healthcare transformation. The things that you think should happen – like not having a fax machine, are still the modus operandi of healthcare.

Tim: It is mind-boggling, if you think about it. No other industry that’s critical to the health and well-being of every person on the planet does stuff this archaically. It’s a little goofy.

David: To use one analogy: imagine going to a restaurant, giving someone your credit card, and then they fax the bank waiting for a response before they serve you. You’re ordering food there. In this case, you’re ordering an oxygen tank so you can breathe.

Tim: The other thing too, is that this space you’re in is fragmented. There’s widely varying degrees of sophistication in the buyers of a platform like Parachute. So how do you get them to think differently about such ingrained ways of doing things?

David: At the end of the day, we have all different users that have all different levels of technology expertise. The key thing to always keep in mind is that these are people, and people are nervous about change. As long as you’re able to understand what their concerns are and bring them up the curve in a way that they want – in an easy way – then at the end of the day, our company, is going to be successful.

So how do we handle that fragmentation? First: One is how you comfort users through the change process. Healthcare rapidly changing is scary and hard.

The second bit is how you deal with the fragmentation in the types of buyers… it has to do with building a product that’s seamless, so that someone that has no sophistication, and someone that has a ton of sophistication can utilize it all the same. The Apple iPhone did that. Whether you’re someone who picks up an iPhone for the first time, or an avid tech user, you can use an iPhone. You just make things so simple, and have such good service, that people don’t even notice the change. They just say, ‘Wow, that was a much easier way of doing it than before.’ I think the problem that many people have is that they don’t know how to simplify the complexity. Healthcare for sure is complicated, but if you figure out a way to simplify things in a way that is understandable and digestible, then you handle the fragmentation by having a product that’s good enough that other people will tell everyone else about it. Then you don’t have to go from door-to-door when other people are sharing their positive experiences with others. I think getting to a place of durability only comes when a user has a really amazing experience.

Tim: At this point you’ve raised a couple of rounds of funding. What are your biggest takeaways with respect to the funding environment, in Healthcare Tech specifically, and how investors’ expectations maybe have changed in the subsequent rounds that you’ve raised?

David: I think the funding environment right now is still pretty positive. I think it’s changed a bit where there’s been more of a migration towards sound business models, real traction, big markets, and more of the fundamentals of what makes a great business, as opposed to an idea that fits into a market that people want to go after. I think there has to be a little more demonstrable traction to be able to get investors today versus, say a couple of years ago, when you could have any idea, and whether you showed execution or not, there was so much capital chasing few ideas that you’d end up raising from somewhere. I do think that the market still has a lot of capital to deploy, but my perception is that investors are becoming a little more focused on business models that have a lot of viability and traction.

The second thing I’d say is that healthcare as a specific vertical is quite different than others. It moves at a somewhat slower pace, and people are a lot more risk-averse about trying new tech, right? Because at the end of the day, if the tech fails, it might mean a patient’s life. So the level of anxiety is just a lot higher than other markets.

I think that the upside is there, but what probably happened over the past few years is that people just didn’t see the traction they were expecting, because either there wasn’t a realization of the sales cycle, or they weren’t building something that was really a product. And most technology we’re finding in healthcare is adding time to someone’s day, and no one has time for another technology tool. The thing about Parachute is, we’re replacing someone’s fax machine. So what takes an hour right now using outdated legacy technology takes a minute or two on our platform. We’re actually giving someone back an hour a day. Very few technology platforms in healthcare are actually built for speed and for getting things done in a more efficient way, but we are. And I think that’s why we were able to see success through the fundraising process, because the business model is sound, the team surrounding it understands healthcare and is really strong. And you know, we’re solving a real pain-point.

Tim: You just mentioned your team, which has been growing rapidly, with a lot of your funding going to building a great organization. Along the way, how do you think about company culture – what is yours, and how do you make sure that you consistently hire for it as you continue to grow?

David: The one thing out of the gate that we are steadfast on is a mission-oriented culture. People who care about others. At the end of the day, we’re helping people, and you want people who aren’t just looking for their next stop or a fast-growing startup. You want people who care. Every fax machine we get rid of, is people we’re helping. That’s something that most of the people we’ve been able to attract have felt in their core. And to me that’s the start – you want to build something bigger than yourself. You get one life, and you want to have a business that actually helps people. There’s an element of ‘it feels good, and you can make money.’ Those values matter, you know?

The second thing we look for, is people who are incredibly confident, and know how to work hard. What we’ve done really well at, is finding people who are scrappy enough to get things done, but are strategic enough and thoughtful enough to think through problems. So they’re not just patching things together to get it out the door, but they’re thinking of the long-term trajectory for the business, how to fit things in, and you wind up getting a lot of people internally who punch above their weight class and collaborate really well together.

The third thing, to me, is that someone has really impeccable communication skills. As the team scales, there has to be an element of information flow across the business, and we’ve found a lot of great success in people who are strong communicators, to our partners, to our investors, to internal teammates. And that’s been able to elevate us quickly. Great communication is a core value of the culture.

The last thing I’d say is that something we push internally is to constantly innovate and push new ideas. So there’s something you see across management teams is that they’re incredibly passionate about getting to the right answers. Digging up ideas, innovating, and not just devolving into group-think is always a big thing. Someone who speaks through problems and is logical in a coherent way. So people can beat up the line of traditional thinking and get to the right answer. And having an honest, open space – a protected space – so people can critique their ideas and not feel judged, but rather feel supported and challenged. I started thinking about our culture in team meetings – people who like working with us are people who like having an idea, aren’t stubborn enough to say that’s my idea and that’s why it’s right… but who say this is my idea, this is why, and get engaged enough to get to a thought-provoking answer. There’s not always a right answer – but many times there is. And I think we’ve fostered a culture that never just says ‘yeah that’s good thank you,’ right? If it’s the right answer, sure. But many times it requires teamwork. There’s no one person who creates Parachute, it’s a team. That’s one thing we harp on internally – it’s never about one person, it’s the team collaboratively.

Tim: So what keeps you up at night?

David: The thing that keeps me up at night is the level of opportunity right now in Healthcare Tech. You can look across the market and see all these opportunities. Obviously that’s a positive. The negative is that that’s a distraction. You see all these opportunities, and the key thing to remember is that not staying focused is an Achilles heel of almost every early-stage company. Because there are only so many people on your team who are only capable of so much, even at 100% capacity or 120% capacity…. And anyone’s eyes looking at this market have got to be bigger than the capacity of their team, especially as an early-stage company. That’s the way I feel. So remaining focused while putting opportunities on the back-burner is one of the hardest challenges – and what keeps me up – because you see an opportunity and you want to attack it. However, often times it’ll wind up being the downfall if you push forward with it.

The other thing that keeps me up is continually attracting great people. We have such a phenomenal culture – we have smart, caring, thoughtful people internally. It’s just about being super-focused on that inner core of people. At the end of the day, yeah it’s a great business model and a great market, but if you don’t have those people internally to get together as a team and go attack it, it’ll never work. So, we have to have such a focus on people, and making sure everyone internally who comes in, they feel good, they get integrated well, and they continually grow inside the organization as well.

Tim: Everyone is talking about value-based care. And to a certain degree every new healthcare organization is trying to figure out how to live in that world. So how do you see Parachute helping its partners achieve their value-based care goals?

David: Value-based care if you simplify it, just means getting closer and closer to a fixed-revenue target, and if an outcome doesn’t work out well, you have incremental costs. What’s happened is that healthcare more and more isn’t just ‘let me bring someone to my hospital or nursing home and do as much as I can for them and not keep costs in mind.’ So how is Parachute impacting that? Right now when someone leaves the hospital, there is next-to-no visibility when it comes to medical equipment. No one knows if they got their oxygen tank, no one knows if they got their wheelchair or walker. And it turns out, 15% of the time, wheelchairs, walkers or oxygen tanks either never get to the patient or get there later than anticipated. And it creates a 60% increase in readmissions, which is a staggering statistic. Until value-based care, Parachute never mattered. Once you discharged someone, it was ‘best of luck to you.’ But in today’s world, value-based care needs Parachute, and obviously vice versa. Because if you want to make sure that someone you’ve discharged has an oxygen tank to breathe, or has a walker to get to the bathroom or go to the kitchen, then at the end of the day we fit squarely into the new paradigm of healthcare, which is ‘we have to take care of the patient outside your four walls, and cost is a consideration.’ You choose how that impacts their care, or the supplier you’re choosing to work with. All that data, all that reporting that flows back in through Parachute is critical to making decisions on who should be in your network and who’s taking care of your patients in the most optimal way.

Tim: What would you want to leave readers with, knowing that this is a pretty diverse cross-section of folks in our industry – investors, entrepreneurs, people within all functional levels of an organization, and even potential future Parachute employees?

David: If you’re looking to be part of a company where you have a ton of autonomy, working on real problems in Healthcare, and working with a team of people that are exceptional, and are truly mission-oriented and have a wonderful way about them – then I think Parachute is a great partner. Every day that we grow and are moving forward, real people’s lives are being impacted for the better. There are very few times you have that immediate gratification, but when you help educate someone in healthcare on technology, when you help someone’s mom or dad who’s a patient get what they need on time and it saves their life, there’s few things that can get you so excited when you wake up in the morning. And when you’re surrounded by great people, there’s nothing better. One of the things I’m most proud of is the people we bring to the table, and that we’re really solving things for people’s families. That was definitely one of the intents of the business when I first started, and I can definitely say that the core of that rings true today.

 

Designing The Candidate Experience: An Exercise in Brand Stewardship

Walk into any Apple Store on the planet, and you’ll receive an immersive customer experience. The sleek layout, meticulous design, and seamless end-to-end experience all serve to generate positive associations in the minds of customers. The end result is that even if you don’t buy anything on a trip to the Apple Store, you end up leaving with a distinct, lasting impression of the Apple brand.

That’s exactly how companies should be designing their candidate experience – with the candidate in mind. Yes, the main goal of a hiring process is to identify and attract the best candidates, but that doesn’t mean we should overlook other opportunities therein, namely brand advocacy. You’re often providing a first glimpse of your company (especially for startups) to every single person who walks through your doors. Think of your candidate experience as an experiential marketing opportunity, not just for future employees, but for all of those industry professionals who you don’t end up hiring. Every company should ask themselves: what lasting impression are we leaving on each individual we interact with?

I was given a stark reminder of the role consumer experience plays in decision making recently, when inside of the same week I had two remarkably different customer experiences. One with AT&T, and the other with Handy. AT&T knocked it out of the park and the other service provider nearly drove me to create a Yelp account just to save others from the misery. The candidate experience is no different, and for me it highlighted our propensity to be more vocal about negative experiences.

A seamless candidate experience doesn’t happen by accident. It takes planning, process and communication, all of which can be achieved by following a set of simple guidelines. While there isn’t a one-size-fits-all structure to interviewing candidates, there exist a clear set of parameters that will help you establish an interview process that not only identifies the best and brightest, but also leaves a positive lasting image in each candidate’s mind.

Failing to Prepare is Preparing to Fail

The first step in any success story involves preparation. To that end, it’s important to establish a clear line of sight between now and your hiring decision. That means the establishment of a process, and – just as crucially – the communication of that process to all key members of your organization. If it’s feasible, start by securing an applicant tracking system that your interviewers and HR personnel can utilize. Greenhouse, Jazz and Thrive are all solid examples. If you’re bootstrapping, even a simple Excel sheet can work wonders. As long as you have a unified system to manage communication, you’re good to go. That way, everyone internally participating in the process is quite literally on the same page. The infrastructure helps facilitate the process. For more on the importance of the planning and communication phase, check out this article in our Q1 newsletter.

It’s important to keep in mind that all of that planning is useless if there isn’t accountability over the process and strong communication internally and externally. That means that someone – the CEO, a hiring manager, an internal or external recruiter – needs to be on top of scheduling interviews, knowing where candidates should be heading and whom they’re meeting with, at what stage of the process each candidate is in, and following up with candidates for interview feedback and next steps. Without proper oversight, the execution of your process is likely to go haywire. It’s a big, important job and someone has to own it.
And communication is key; not just between firm and candidates, but internally. Whoever maintains process accountability needs to ensure that all of the key decision makers are on board, so there aren’t any miscommunications as we delve deeper into the hiring funnel. That’s why we recommend bringing on an internal recruiter much sooner in the process than companies typically think is necessary – the benefits of that specialized expertise far outweigh the upfront costs. For more on the advantages of hiring an internal recruiter, we riffed on it in this article last year.

The How & The Why

So you’ve acquired the right infrastructure, dedicated yourself to a process, and assigned accountability; the next obvious question is: what should that process be? The answer is whatever most suits your needs, style, and company culture. I wish I could tell you there’s a boilerplate approach here, but the truth is, the right process is bespoke to each organization.

The key to a successful process is maintaining a thoughtful chronology of events that isn’t overly burdensome to the candidate, but still gets you the conviction you need. Our clients often start with a phone interview, followed by an in-person meeting, and for those who make the cut – a follow-up with the rest of the team. It’s advisable to limit your broader team’s exposure to only your select finalists, saving substantial man-hours and focusing them on the bottom of your funnel.

Firms with a more sizable Executive Team might opt for select candidates to meet with a handful of key personnel – say 5 interviews conducted by 5 different team members. In this context, we highly recommend a clear delegation for each interviewer – i.e. someone interviews for career transitions, someone else for culture, a third for core competencies, a fourth for soft skills, etc. The reason is twofold: first, you’re affording your interview team a level of depth within each area of assessment, as opposed to having one or two people broadly cover a candidate’s entire profile. So when you circle up to discuss, each of your team members can enlighten the group on one core aspect, leaving you with a holistic picture of the candidate, containing both breadth and depth. But the other reason for interview differentiation is even more important, and directly impacts the candidate experience: you want to keep the interviews interesting for the candidate. It’s counterproductive for a prospective employee – and brand advocate – to have to repeat the same basic facts over and over and over again. There’s nothing more exhausting than having to repeat that ‘overcoming an obstacle’ story 5 different times. That type of experience suggests to the candidate that internal communication is unstructured and the process wasn’t thoughtful. You’re jumbled and disorganized. And if this is how the interview process goes, I can only imagine what it’s like to work here…

Don’t let that thought creep in. The candidate experience is the first glimpse your future employees – and possibly the only glimpse those you don’t hire – will have of your company. So ensure that your process is both challenging and additive throughout. Keep your candidates on their toes by having them discuss various aspects of themselves in each interview – as opposed to the same stuff over and over again. That will leave them with a positive first impression of your company, and we all know how important first impressions are.

The Building Block of Every Relationship

Now we reach the end result of all of that preparation: Communication. Herein lies the key to the entire candidate experience. Communication will make or break your company’s image in a candidate’s mind.

Employers tend to forget that the hiring process is a two-way street. It’s not just the candidate who needs to put their best foot forward, companies do as well. After all, the truly special candidates are likely interviewing you as well, since they’re probably in high demand. Which means you’re in competition here, not just the candidates. And the surest way to promote yourself (without sounding like a used car salesman) is by communicating your hiring process clearly and effectively right from the start. That means laying out each step – from initial screening to final decision – and ensuring that each prospective candidate knows exactly what’s coming. Ever notice that a drive feels shorter when you have great directions? Yeah, it’s like that.

Why is communication so important? Put yourself in a candidate’s shoes (you likely have been in their shoes at one point or another) – you’re actively or passively considering a career change. You’re sending out resumes, speaking with recruiters, researching companies and reaching out to folks on LinkedIn. The entire process is a grind. And when you do finally land that interview you’ve been gunning for, you’re excited and nervous all at once. This could be your future, right here. The first day of the rest of your life (for better or worse). You’ve got a million things to prepare – stories to tell, resume bullets to explain, references to consider – so as you first step through that company’s doors, the one thing you’d like more than anything is visibility; someone to guide you through the process from start to finish. Applying for a job can feel like running through a maze while blindfolded – you aren’t familiar with this place, you don’t know any of these people. So having someone offer you a GPS is, in a very real sense, a lifesaver. Now you can focus on the things you came here to focus on: sharing your story, skill sets and experience, and deciding if this job is the right fit for you.

Communication builds trust – any relationship expert will tell you that. Showing candidates what life will be like at your company, walking them through the structure and explaining the thought process behind that structure helps establish the kind of foundations that long-lasting relationships are built on. And as important as maintaining strong communication is for the candidates you do hire, it’s equally, if not more important for the candidates whom you don’t move forward with. The reason is simple: you’re going to be rejecting more people than you accept. For every one person you bring on, there will easily be 10 or 20 or 100 who don’t get the job. The individual who gets the job will of course be an advocate and evangelist for your brand, but what about all of those people who walk away empty handed? Will they advocate for your company on Glassdoor and with colleagues? Will they talk about the positive experience they had interviewing, the structured process, the deep level of communication, and how they wish they’d gotten a chance to work at that highly efficient company that seemed to be firing on all cylinders? Disconnecting gracefully, with clear and effective communication, is a great way to increase brand advocacy in the long run.

Everyone’s a Critic

Thanks to the internet, there exist endless forums and mechanisms for people to share their thoughts and feelings on any subject imaginable – including a firm’s hiring process. That means disgruntled candidates can leave black marks all over LinkedIn or Glassdoor (“They rescheduled the interview 3 times…” “The interviewer was totally unprepared – hadn’t even looked at my resume…” “It was 6 weeks before I heard back!”). Of course, the opposite is also true; candidates with positive experiences can turn into fierce advocates of your brand – even those who don’t receive an offer. Effective planning, a thoughtful process, and open and honest communication will foster less of the former and more of the latter. The key is designing the candidate experience with the candidate in mind.

Primary Care: Rebuilding the Gateway to Our Healthcare System

The healthcare ecosystem has been experiencing a seismic shift. From companies like Boulder Care who are facilitating innovative treatment strategies for those affected by the opioid crisis, to startups like Robin Care who are changing the face of cancer patient advocacy, it seems that every healthcare institution is being transformed by “disruptive innovation.” The challenge is in bringing change to parts of the care continuum that are trapped in a cycle of misaligned incentives. Our nation’s primary care model is antiquated and broken. Doctors are incentivized to see the maximum number of patients possible, which translates into less quality per patient interaction. A volume-based system leads to fewer questions, more standardization, and less depth of care, which in turn leads to worse outcomes for patients, and helps fuel a bloated and costly system. As the gateway to our healthcare system, we are missing a tremendous opportunity for impact with primary care.

A few years back, I experienced firsthand how our broken primary care model can lead to a dramatic negative outcome, and how as the patient – however “informed” we may be – we often base the quality of our experience on the wrong things. In 2013, my sleep health began to decline dramatically. I was getting a couple of hours each night, if that – not quite full-blown insomnia, but pretty damn close. It went on for close to two years. To this day, I don’t know the root cause.
There was plenty going on in my life at the time, so stress is a likely factor, though it’s possible there were others. To me, the best way to describe it was feeling like my body was out of balance.

I did all of the things they tell you to do when you can’t sleep: I stopped watching TV in bed, kept the phone away from my face before sleep, didn’t eat too close to bed time, cut back on the booze. I took the basic over-the-counter stuff – CVS Sleep Aid, Nyquil, Melatonin – sometimes it worked, most of the time it didn’t. Soon my lack of sleep began to impact my work. I was groggy, out of it, not firing on all cylinders. I didn’t want to over-caffeinate or else I’d be up all night, so I started to feel utterly helpless. I was trapped.

One day at the end of 2013, I visited my primary care doctor for an annual physical. He ran a standard EKG test and did some routine blood work. There was no talk of sleep, since this was just before the value of sleep really permeated the public consciousness. No one was talking about sleep back then, so my doctor just asked basic questions about my diet and exercise. He didn’t delve into any detail regarding my lifestyle – how could he? We had about 7 minutes together.
7 minutes doesn’t leave you much time for a deep-dive Q&A. Thing is, if you asked me if I liked my PCP, my answer would have been a resounding yes. He scheduled appointments on short notice, rarely kept me waiting, would communicate with me via email, wrote a script without requiring a visit, and was pleasant to meet with. Cool stuff? Sure. Right criteria to judge him on solely? Probably not.

In my mind, the only real by-product of my lack of sleep was being tired and not as sharp. My blood work came back, and a bunch of stuff that was green the year before had turned yellow or red, so I could tell I was trending in the wrong direction. I was on a path to pre-diabetes. My doctor’s advice was to eat better and lay off the booze, which is exactly what I did. My plan was to tough it out. After all, I was young, energetic (sorta), in otherwise excellent physical (sorta) and mental condition – so I decided to white knuckle my way through the problem until it subsided and I was back to getting 6-8 hours a night.

Little did I know that if I didn’t change something drastically – and soon – I was about to be in serious trouble.

A few months later, I had lunch with a friend of mine who was the CEO of a population health management company, specifically focused on sleep disorders. He began talking about lack of sleep, and what a problem that is for society. He explained how a lack of sleep has a cascading effect on people’s health and leads to all sorts of co-morbidities, some very serious – even fatal. My jaw hit the floor. I could almost feel the light bulb go off: he was talking about me! That cascading effect, all of those co-morbidities he was describing… that was reflected in my blood work. Finally the dots connected.

During that same time, I had a friend – Alex – who was battling cancer (you can read Alex’s story here). Alex happened to mention an acupuncturist whom he was seeing to alleviate some of the effects of his chemo. After my conversation with the guy running that sleep health company, I knew I had to do something, so I visited Alex’s doc. That decision saved my life. Within a month of weekly acupuncture treatments, I was sleeping through the night 5 nights a week. Within 3 months, my sleep patterns returned to normal. My annual physical was right around the corner, and when my blood work came back, everything was back to normal. And no other variable changed during that time frame – I was eating, drinking, working, exercising and socializing the exact same amount.

When I think back on my ‘years of no sleep,’ I reflect on how fortunate I am. As an educated adult in the healthcare industry, I was entirely ignorant about the effect of sleep on my overall health, yet I had access to people like Alex and others who through their wisdom and expertise could alter my perspective in a single conversation. Imagine if I hadn’t been so lucky. Imagine if I didn’t have access to the same network. Would I have made the necessary changes? What if I couldn’t have afforded those acupuncture treatments? I would have likely ended up with Type-2 Diabetes, which not only affects me personally, but impacts all of society by instantly converting me from a profitable member of a health plan into a costly one. Who knows how many millions of chronic conditions can be averted through enhanced primary care interactions? Is it unreasonable to think that if I had had 30 or 45 minutes with my primary doc, we might have gotten to the bottom of things sooner? Nevermind this doozy from CNN recently…

The problem is, our primary care model is not designed to solve these kinds of problems in its current form. The structure is built for revenue generation, not disease prevention. We need to figure out how to incentivize doctors away from a higher volume of patients, and towards a higher quality of care. There are already a number of companies looking to do just that by coupling standard primary care with intensive preventative care solutions aimed at halting or even reversing the effects of chronic disease. Companies like CareMore, Iora Health and Aledade are utilizing technology and data analytics to organize their practices around patient populations requiring similar types of care. That helps reduce ER visits and unplanned hospitalizations while improving the overall quality of care.

Startups like Eden Health are taking that model one step further by unifying private doctor visits, 24/7 telemedicine, and insurance navigation into a single mobile platform. The result is that undiagnosed conditions are suddenly being discovered and treated. “One patient was bounced around for almost a decade with seasonal effective disorder,” says Matt McCambridge, Eden’s CEO. “It was absolutely a deficiency related to their vitamins. They [the patient’s primary care providers] were saying it’s not really anything, but we spent the time to figure it out. If you have 40 minutes, you can move past the simple stuff to the things that people don’t really feel comfortable talking about.” McCambridge highlights his firm’s infusion of technology as a key differentiator between Eden Health and the standard primary care model. “When a patient signs up with us, we see their medication history immediately. We have a back-end that pulls all of that info, so we have more data on patients than other providers do. The stuff you talk about with a PCMH, it can be put into practice in a more reasonable way when you have access to data. A lot of things aren’t purpose-built for primary care providers.

And therein lies the rub. The primary care model in its current form just isn’t cut out to handle the complex systemic and operational flow of the doctor-patient relationship. The model is built for speed, not depth. What good is blood work done after the primary care visit with no follow up? Thankfully, companies like Eden Health are taking the wheel and steering a new course, aiming to solve for these variables with innovative technology and aligned incentives.
Unfortunately, the deficiencies embedded in our primary care structure are far too sweeping and entrenched for a silver bullet to fix them. It’s going to take significant cross-industry collaboration and empowering primary care providers to truly provide preventative care.

Primary care is the gateway to our entire healthcare system. Optimize the gateway, and you optimize the entire funnel beyond. That gateway represents an opportunity to legitimately alter someone’s lifetime health trajectory – for the good or the bad – but it’s unrealistic to expect any kind of impact in an appointment that lasts a matter of minutes. Real change is out there, it’s only a matter of time.

By: Tim Gordon, Founder & Managing Partner

An Interview with Coley Parry, CEO of Friend Health

Coley is the Founder and CEO of Friend Health, a risk-bearing organization that deploys multi-disciplinary care teams and proprietary technology to bring in-home primary care to patient populations that need it the most. Friend Health works with some of the sickest and highest risk populations, collaborating with their partners to drive reimbursement, better outcomes, cost savings, and the efficient deployment of those resources to patients most in need.

TIM: Like many healthcare entrepreneurs, you founded Friend Health because of a personal experience with the healthcare system that wasn’t good. Tell us about that, and how it led to you starting the company.

COLEY: In the late 80’s, my father had a valve replaced in his heart. He got one of the first human valves, which was fantastic at the time. In the mid-2000’s he started going to the hospital a lot – he had a pacemaker put in, a defibrillator put in, and ultimately was placed on the heart transplant list. He had become an ER super-utilizer. He was in and out of the ER 2-3 times a month by the end of it, and when he’d be discharged from the hospital, that safety net that was supposed to be there via the Visiting Nurses Association and home healthcare just didn’t exist in the way that it should. The local home healthcare companies were a black box on information for my family, my dad’s cardiologist, and his PCP because they have had no incentive to update their technology or business model. They operate on ‘check-a-box’ healthcare: do 5 visits, get paid $2,500 from CMS, and then be on their way. There was no longitudinal care or coordination. My dad was chronically ill, not sick within neat 30 or 60 or 90 day boxes, and neither are any chronically ill patients. They’re sick over a long time period, so we should be seeing them on a longitudinal scale. So our real idea is: how do we deliver a better, more friendly patient experience over the long term, rather than these little boxes that don’t work. Because at the end of that 30 days, my dad is still sick.

TIM: A lot of companies have come at this as a consumer play, but you guys have opted to go after the enterprise. Why? And how has that gone for you so far?

COLEY: We have always been focused on going where the patients are. So, if you’re looking at it from a business standpoint, there’s a very high customer acquisition cost to getting somebody to download your app, then getting them to upload information about themselves so you can go to see them when they’re home. Everybody’s trained from when they’re a 1-year-old to call 911 or know where their doctor’s office is.
Not everybody goes to the App Store to look for healthcare when they’re sick. So we wanted to go to where the patients are; that was always partnering with institutions that need help getting care to their patients fast to close gaps in care – plus, by forwarding the data, we can provide a window into the home of those patients. For us, those partners are at-risk health plans and health systems. Health plans obviously own the patients who are the most at-risk. So we’ve seen the most success going to them in order to close gaps in care on their behalf, because their care management teams are in the flow, right? The care management team knows the languages their members speak, they know the chronic conditions these patients have, and they know where they live. They just don’t have the capability or anyone in their market that can operate at the speed and cost that they need.

TIM: Medicare, Medicaid and dual-eligible patients are responsible for a staggeringly large portion of healthcare spend. Without sharing anything too proprietary, how is Friend Health approaching care for these populations?

COLEY: We talk a lot about reactive versus proactive care here. Reactive care is where a patient walks through the door of their PCP’s office or ER, and the MD or NP works backwards to figure out why they are there. Proactive care is all about delivering intensive care management programs to complex patients tailored to their chronic illnesses that can change behavior and improve health outcomes. Offices and hospitals are set up to be reactive, and they are a necessary tool in the healthcare landscape, but they shouldn’t be the go-to choice for patients because they are incredibly costly, and are at capacity. Medicare and Medicaid patients are often homebound because they are no longer driving a car, or don’t have the money for a bus ticket to get to their PCP office, which means it is very difficult for them to be proactive about their own health in the necessary way to get better outcomes. On a fundamental level, Friend Health is set up to provide proactive healthcare. We are using integrated teams, which means NPs, RNs, behavioral health tools, and health coaches, who are working as a unit on managing the health of complex individuals that need intensive, high-touch care. We deliver it at the lowest cost location, the home, which also solves the access to care problem for many Medicaid patients that live in healthcare deserts, and we use technology to streamline every step of the process. This is all in an effort to keep patients healthier and out of the hospital. So, you can say that we are thinking about Medicare and Medicaid populations a lot!

TIM: There’s been a ton of talk for a long time now about shifting away from a fee-for-service model to value-based care, and VBC can mean different things to different people. What does it mean to you, and to Friend Health?

COLEY: At it’s core, value-based care is trying to align the same incentives of who’s ethically responsible for the patient, with who’s financially responsible for the patient. Healthcare for a super long time has been in fee-for-service land, where they’re not necessarily – even if they’re not ethically responsible for that patient – are they keeping the patient’s best interest in mind? Because financially they’re incentivized to do something else. And humans just on a basic level and on a business level are going to go where the incentives are. So if we can realign the incentive structure in healthcare – it’s an extremely positive thing for the patient, because you’re aligning ethical and financial incentives in the same way. So if the doctor or health plan or hospital system can get reimbursed properly that’s good for everybody… but especially the patient. That’s how I think about value-based care in general: if you can align ethical and financial incentives, the patient is better off.

TIM: You mentioned health systems and other managed Medicaid organizations, but you have an anchor enterprise customer, and it’s a rather large system with an affiliated MA plan. What have you learned from partnering with that kind of organization.

COLEY: It’s a partner that’s all the way along the risk spectrum. They’re an MA plan and a managed care organization, with 50,000 members that they’re responsible for. So, their goal is to figure out how they can pay the least amount of money for them because that means that the patient is healthier and they aren’t over-utilizing the hospital. We have over 50 practitioners in that state now, basically full coverage across the state for our partner, and we’re going to be working directly with the care management teams giving them a new superpower: the ability to walk through the walls of their members’ homes. What I have learned is how dedicated our partner is to their members. They want the best for them, and they know that they can’t just be ‘takers of bills,’ they need to be ‘givers of healthcare.’ And that’s what they’re using us for: proactive healthcare, not reactive healthcare. We’re giving them a new tool to be proactive about going out and giving something as simple as a flu shot, or running the A1C on one of their diabetic members, or doing an anti-depression screening, a fall-risk screening; all of that can be done in the home – as they gather more data about the patients, they’re also delivering higher quality healthcare. As a result, they can get higher quality scores, healthier patients, lower costs, bonuses, and it works out for everybody, but especially the patient.

TIM: Up until this point, what has been your biggest challenge as an entrepreneur, and what keeps you up at night?

COLEY: Besides everything?

The obvious things keep me up at night: competition, are we moving fast enough, etc. etc. But we are at an inflection point now where I am transitioning from doing everything, to managing really talented people. I am lucky to have hired some people that are much better than I am at many things.. My jobs are to keep money in the bank, manage our spend, hire amazing people, set goals, and build a culture. Most importantly, it’s building a culture and hiring the right people who fit into that culture. And that’s what really keeps me up at night. Can I empower the people I’ve brought on to be the best version of themselves, and think openly and honestly about the problems that we are trying to solve. I’m bringing in people who have clinical backgrounds and saying to them, ‘Hey, remember everything that ever worked for you? Let’s do that. And remember everything that everyone told you that you couldn’t do, but you wanted to do? Let’s also do that, too. And we’ll A/B test it, and we’ll know that we’re giving the best care to our patients. So, I’m sort of like head-cheerleader at this point (laughs). But what keeps me up at night is whether I’m finding the right people and whether I’m building the right culture to keep people as open, transparent, and thoughtful about what they’re doing as they can be.

TIM: Which is a decent segue into how you think about culture, hiring for it, and the role that those leaders will play in your success…

COLEY: I think a lot about it. Luckily I have a great team that helps me find great people – you guys (laughs)… but once I get a steady flow of people, it’s my job to set up a process by which we are looking at people on fundamentally the same spectrum so that we can compare people equitably and make sure they are great. You guys have helped us tremendously with that. And I do think there are certain personality types that work well with each other, and the number one thing that I don’t want to see – I’ve seen really smart people that may not have the right personality to work in a culture like ours, which is an open culture, which is a “yes-and” culture – is people who don’t bring positive momentum. We want to attack challenges by finding the ways over the hurdle, not just presenting new hurdles. And when the hurdle comes up, we find another way over that hurdle. So, it’s an optimism thing. If you have somebody who is constantly coming up with the “no’s,” but not providing a way through the “no,” that just becomes a vampire sucking the energy out of the company. And that’s the biggest thing we’re trying to keep away – we’re trying to keep the vampires at bay (laughs).

TIM: Killer analogy (laughs). So big picture, what’s the longer-term vision for the company?

COLEY: Longer-term vision of the company is – I fundamentally believe, and I’m not the only one that does – that hospitals of the future are going to be used for catastrophic care. Doctors will stay there, they will write white papers there, and they will orchestrate on a grander scale what is happening outside the walls of the hospital, because everybody 10 years from now will be in a value-based care scenario somehow. Much more than they are today. That’s where I believe the ball is going and that’s where we’re going to be to catch it. So in that scenario, below the hospital you have care management teams, care coordination platforms, and artificial intelligence which is taking care of a population who is 99.9% of the time in their homes. We should be delivering care there. So within that, if that’s the way we think it might be going, there has to be this network of mobile practitioners who see patients when escalations come, and it will be surrounded by data that’s being pushed back and forth with, ideally, interoperable EMRs – please, fingers crossed – and you can use decision trees, artificial intelligence, machine learning to red-flag vitals and other signs of something amiss. All that will be monitored by MDs and specialists, so we’re not cutting out the doctor – they will be able to see more patients in a more effective way via technology. Ultimately if we can transition to the lowest cost point of care – which is in the home – where 88% of people over 65 want to remain instead of in a SNF, or in a nursing home, then we’re doing a lot for decreasing the massive amount of healthcare spend, increasing how happy people are in the twilight of their lives. And that’s where I see Friend Health, in that band in the middle there, of providing care in the home via human touch and technology.

TIM: What do you want the market to know about you that they might not already?

COLEY: Maybe that we are way more than “Uber for Nurses” (laughs). Seriously, though, there are elements of that in our technology, but everything we build and do comes from a clinical place first: “Does this get us to our end goal of better clinical outcomes.” Because if we get that right, we make a major impact.

Looking Back & Looking Forward: Reflections on 2017, and Predictions for 2018

From the first bio-absorbable stent approved in the United States to the world’s first human head transplant, 2017 was a remarkable year for healthcare. And for Healthcare IT & Digital Health, the year was no less remarkable, as numerous fundraising records were set, and mammoth acquisitions set in motion, despite the sector’s continued consolidation and the looming concerns over industry regulation. We think 2018 brings with it the promise of even more broken records, eye-popping acquisitions, continued innovation, and acceleration in the achievement of value-based care goals. But before we ring in the New Year, let’s have a look at where we’ve been…

An Explosive Funding Environment…

If Digital Health were an Olympic Sport, then 2017 would be our Michael Phelps. Through even just the first half of the year, there were 188 deals worth over $3.5B. With an additional 43 deals and $465MM invested during Q3, 2017 is setting the stage to break both 2016’s record of 296 total deals funded, and 2015’s record of $4.6B invested annually (Q4 2017 hadn’t been totaled when this went to print).

2017 also saw a record 8 – yes 8! – nine-figure fundraising deals. That includes 3 of the largest deals in HCIT history:

1) Alphabet’s venture round for Verily, their Asia-focused life sciences firm, which is being funded to the tune of $800M by Singapore’s sovereign wealth fund, Temasek Holdings.

2) Outcome Health’s $500M Series A led by Goldman Sachs, CapitalG, Leerink Transformation Partners, and Pritzker Group VC.

3) Peloton Interactive’s $325M Series E led by Fidelity Investments, Kleiner Perkins, and a host of others.

Those numbers dwarf the largest 2016 raises, namely Proteus Digital Health’s $172M Series G, the Kuwait Investment Authority’s $162M investment into the ill-fated Jawbone, and Thalmic Labs’ $120M Series B. Proteus and Thalmic amount to 2016’s only nine-figure fundraising events.

M&A and Hiring…

Though not as feverishly paced as prior years, consolidation within our industry continues. HCIT saw 31 M&A transactions recorded through November 2017; down from a total of 49 during all of 2016. But there are some potentially game-changing transactions in those 31 deals, most notably Internet Brands’ $2.8B acquisition of WebMD, a deal size not seen since Facebook’s $2B purchase of ProtoGeo in 2014.

And as Silicon Valley continues its HCIT binge, with firms like Apple, Alphabet, and the Chan-Zuckerberg Initiative all making notable acquisitions (Beddit, Senosis, and Meta, respectively), it seems that more traditional Healthcare organizations are continuing to push through cross-sector consolidation, exemplified by UnitedHealth’s $4.9B purchase of DaVita Medical Group, and CVS’ pending $69B Aetna acquisition – the largest deal of 2017. These deals show that executive leadership in healthcare companies of all shapes and sizes recognize the continued need to get stickier with customers and provide actual value.

From a hiring perspective, all of this funding and M&A activity is a leading indicator of an incredibly hot talent market in 2018. As more companies raise follow-on capital in the form of Series A and B rounds, significant amounts of that will be leveraged to gain competitive advantage through talent. Trends toward hiring top tier marketing and growth talent in 2017 signals an increased emphasis on driving brand recognition and profitability. Strong operators and strategic deal-shapers – along with top tier technical talent, i.e. CTO, CISO and VP of Engineering – will be in high demand this year. Add to that the talent exiting some of these organizations post-acquisition, and you have all the makings of an exciting year in hiring.

Growth on the Home Front

Aequitas came into its own this year, each quarter reflecting on what seemed to be an impossible amount accomplished in the months before. We partnered with more than half a dozen new clients, and continued working with others that have been the bedrock of our business. We founded and launched Aequitas Ventures 1, which made four equity investments via search work over the course of the year. We moved into larger office digs here in our Gramercy Park neighborhood, launched a brand new website, hired our first full time employees, and conceptualized and launched this little ditty you’re reading now – our newsletter!

While we’re proud of what we were able to do as a team in 2017, we are even more excited about what we’ll have to share during this recap next year. So to any of you reading this that played a role in our success this year, we extend to you, a heartfelt thank you.

Speaking of the Year Ahead…

There’s no crystal ball, but based on some of the momentum we saw in 2017, we think there are some themes worth keeping an eye on this year.

Boom Times for Baby Boomers

We believe in the future of clinical care delivery to in-home Medicare populations, specifically aging-in-place. As more Baby Boomers become eligible for Medicare with each passing year, we’re beginning to experience a generation of senior citizens that are more connected and tech-savvy than those of previous generations, making them easier to reach remotely. Today’s seniors have greater access to digital health platforms, and are far more willing to adapt their lifestyles to reap the inherent benefits.

FRND Health is a great example of an organization thinking differently about how they deliver true, clinical, population health to high-risk populations. By leveraging a technology-enabled service model to bring clinicians directly into the homes of those that need it most, they are positioning themselves as the tip of the spear outside the four walls of the hospital for helping this ever-growing population age gracefully in place. Among other things, FRND’s success is predicated on the willingness of today’s seniors to remotely engage with practitioners via smartphone – something that would not have been likely even 3-5 years ago. Which leads us to…

The Human Touch

In our Q4 Newsletter, we discussed 3 trends facing the Healthcare industry. One of those trends – the re-humanization of Healthcare IT through tech-enabled services – is likely to continue its prevalence in 2018, as companies like FRND, that provide a clinically aware human touch, will gain a foothold in markets overlooked by traditional Healthcare solutions. For example, the opioid crisis is reaching epidemic proportions, and mainstream Healthcare has only managed to scratch the surface of helping those in need. Startups such as Boulder Care, which will provide treatment in an end-to-end mobile experience, are likely to disrupt the current paradigm as they offer patients something that traditional Healthcare facilities are unable to deliver: digitally powered solutions augmented by human engagement that meet patients where they are.

The Opioid Epidemic Draws Increased Entrepreneurship

After spending time with Stephanie Papes and Dr. Amanda Wilson for this month’s Aequitas Forum, it was crystal clear to us that there is tremendous opportunity for innovation and impact within this demographic. Slowly but surely, some of the stigmas attached to the disease are being shed, and digital solutions are uniquely suited to reach a cohort that so easily slips through society’s cracks. Look no further than the recent Department of Health and Human Services’ Opioid Symposium and Code-a-thon. Over 300 coders and 50 teams threw down their expertise to aid in taking a more data-driven approach to targeting this plague. As awareness increases, incentives get aligned, and more great minds try to reach this group with innovative solutions, we’re hopeful that they can make an impact.

We think that the digital health and healthcare IT landscape will continue to mature this year, led by some of the aforementioned markets. It will likely lead to fewer Seed fundings, with more emphasis placed on deploying follow-on capital into companies that have demonstrated clear product-market-fit and customer traction. It’ll be fun to look back at the end of the year to see the results.

Another Ball Drops…

2017 was a fantastic year for our industry, and we at Aequitas are eagerly anticipating the year ahead. There’s lots to be excited about, both in terms of what the industry can deliver for patients, and in what our company can deliver for the industry. We hope you’re anticipating 2018 as much as we are, and we’re looking forward to seeing you at the JP Morgan Conference in January, and at the HLTH Conference in May.

Here’s to a Happy and Healthy New Year!

Getting Your Ducks in a Row: The Importance of Planning Before Hiring

“I’m not even sure where to start.”

I heard that from a CEO recently. It wasn’t the first time. It won’t be the last. I get it and I empathize. Hiring right is hard.

My response? Let’s come up with a plan. You wouldn’t just start building a house before you laid the foundation. If you started with your dream master bathroom, you’d probably have a mess on your hands. No, you’d talk to your husband or wife, think about your kids, discuss what you all needed in a home, and then work with an architect and then a builder and so on and so forth. Hiring is no different, and just as complex because these components are people. Additional time up front defining culture, roles & responsibilities and your process will lead to better outcomes.

For example, let’s say you’re a CEO looking to hire a Vice President of Marketing. You could draft a job spec, ping your network and your Board members to ask for a recommendation, or possibly approach a recruiter with a list of specs. You’d also probably post it to your company site and push it out to social media. This action-oriented approach isn’t wrong, but what will dictate your success is what you do before you do any of that. The ideal first step is to pause, and answer the types of questions that facilitate a sharper, more explicit hiring process. Is your VP of Marketing a senior hire overseeing strategy and business development, or do you need someone more tactical and execution-oriented? Is your #1 priority growing the business or growing the brand? Are you in need of a cleaner website, logo, color scheme, a streamlined deck for customers/investors, a 1-pager, etc., or is the current goal to elevate your brand through content marketing, trade shows/industry events, stronger SEO/SEM results, and HubSpot integration? Formulating a strategic, structured approach to hiring will deepen your confidence in individual hiring decisions, which in-turn makes the overall process cleaner, faster, and more efficient across the board. To be clear, requirements can and do change, but having guideposts and a process in place will make it easier to hit those pivots in stride.

We think that Atul Gawande was onto something with his Checklist Manifesto, so here’s ours. If you want to download a copy because, ya know, you want to use it immediately, click here.

  • 1. When do you need this person? Work backwards from when someone must be in the seat. If you’ve been tracking data on time-to-fill internally, then you’ll be able to do this precisely. If not, that’s ok. Assume 6-12 weeks, depending on the role and time of year, from search beginning to start date. You can always ask someone to start after they take a nice vacation if you need to fill a week or two.
  • 2. What’s your culture? You could make the case that this is the first question you need to answer. It’s impossible to hire for culture if you can’t explain it internally, so hash this out as a group, and identify the types of people – regardless of role – that will fit well into it.
  • 3. Who will the new hire report to (near term and long term, if it’s subject to change)? It’s important for a prospective candidate to understand whom they’re working for and where they fit in your org chart. It also should influence who else needs to be involved in the interview process (#10).
  • 4. What’s the budget for role? Create a base case, mid case, and reach scenario. Try to leave some rope for yourself in case you stumble across your unicorn. Include base, bonus, and equity in your calculations. Try to get some market data to make sure your budget makes you competitive with market comp rates.
  • 5. Will the search be handled internally or externally? If external, will it be contingency or retained? If you’re starting internally, you may want to put a clock on how long you work on it before you enlist outside help. For more on how to leverage those options, check out: A Holistic Approach to Hiring: How Internal, Retained and Contingency Recruiting All Play a Role in an Effective Hiring Strategy.
  • 6. What are your top-5 ‘must haves’ in a candidate? What are your top-2 ‘nice to haves?’ Take some time with this one. Lay out a long list of traits, skills and competencies, then whittle it down. Understand that while no candidate is perfect, some are certainly more perfect than others. Once you start interviewing, it will be beneficial to know where you’re willing to make tradeoffs.
  • 7. Is this person managing others? If so, how many now, & how many 12 months from now? Will this person be part of the executive leadership team? Everyone is looking for ‘leadership skills’ when hiring, but the more clearly you define the specifics of the role, the more you can narrow your leadership focus. Is this a small team or a large division? Do you need someone who just manages or is a player/coach? Knowing whom your manager will be responsible for leading helps determine the type of executive you’re looking for.
  • 8. In 12 months, retrospectively, what does success look like in this role? Quantify it. The more clearly and succinctly you answer this question now, the more straightforward you can be with both recruitment personnel and candidates during the hiring process. You’ll have the added benefit of having already created a performance scorecard before the person even starts.
  • 9. What domain expertise is required? An obvious one, but still should not be overlooked.
  • 10. What’s the interview process? How many rounds? Who is interviewing? Will Board members be involved? If so, when? How will the interviews be conducted? Having 5 different team members conduct the same interview leaves candidates exhausted from answering the same questions 5 times, and leaves your team with an incomplete picture. Who’s focusing on core competencies? Intangibles? Behavioral? Culture? Domain Expertise? Now you’re able to develop a holistic portrait of your candidates, which leads to more informed decision-making.

Once your checklist is complete, summarize your findings in a brief email internally which has 3-5 hard hitting bullets that succinctly define your search parameters. This will make it easy for you and your team to share with their respective networks and yield better fits. Help people help you. Draft a position description that clearly defines roles and responsibilities. Ideally, create a scorecard that you can use internally for each candidate so it’s easier to compare side-by-side. The idea is to get everyone on the same page right from the start, so when it comes time to assess your candidate pool, you’re all speaking the same language. That type of planning encourages diversity of thought while still maintaining consistency in evaluation.

When it comes to hiring best practices such as the aforementioned checklist, it’s easy for Founders & CEOs to feel overwhelmed, and sometimes not even sure where to start. Hiring is an area of management that is often overlooked… until it’s actually time to hire. The truth is, CEOs should feel comfortable reaching out to firms like ours to ask for advice. I personally enjoy doing informal advisory calls with CEOs on a regular basis with no strings attached. In fact, I frequently host ‘Expert Hangouts’ with one of our partners, where I answer questions from 10 or so CEOs on a moderated panel via Google Hangouts. Topics range from talent differentiation to delineating roles within an organization, and even defining the differences between a VP of Sales and a VP of Business Development. Honestly, this isn’t work to me – it’s fun to help, and a bit of goodwill on the balance sheet never hurt anyone. On top of that, I’m afforded the opportunity to absorb the concerns and challenges facing leaders trying to build companies and change industries, and I usually end up learning things too – so it’s a win-win.

If you’re a hiring leader who can relate to some of these feelings, I encourage you to reach out to us, or others like us, for advice. I think you’ll find that most folks will be more than happy to take some time to share their wisdom. And for those who prefer to go it alone, our hiring checklist is posted on our website.

What do you think of the checklist? Any points that caught your attention? Anything we missed? Feel free to email me and let me know… We love feedback!

By: Tim Gordon, Founder & Managing Partner