Lisa penned the 13 rules for Healthcare entrepreneurs in a few minutes but it was based on a lifetime of experience. We sat down at the HLTH conference to compare notes on why some entrepreneurs make it and some miss the mark. Hope you enjoy.
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Lisa penned the 13 rules for Healthcare entrepreneurs in a few minutes but it was based on a lifetime of experience. We sat down at the HLTH conference to compare notes on why some entrepreneurs make it and some miss the mark. Hope you enjoy.
Bill Russell: 00:03 Welcome to this week in health it events where we amplify great ideas with interviews from the floor. My name is bill Russell, recovering healthcare CIO and creator of this week in health it, a set of podcasts and videos dedicated to developing the next generation of health leaders. We want to thank our founding channel sponsors who make this content possible health lyrics and VMware. If you want to be a part of our mission to develop health leaders, go to the homepage this week health.com and click on sponsorship information this week we’re at the health conference in Las Vegas and I’m loving the conversations. Several people in my network have told me that I needed to speak with Lisa Suennen a venture capitalist and entrepreneur who and we finally caught up with one another after a long game of email tag at the conference to talk about her 13 rules for healthcare entrepreneurs among other topics. I hope you enjoy.
Bill Russell: 00:48 We’re here with Lisa Suennen. venture Valkyrie. Did you actually go by that? Is that your,
Lisa Suennan: 00:52 you know, I don’t like intentionally go by venture Valkyrie, but people call me that and it cracks me up. I didn’t start off in tending to be a cartoon character, but there you go.
Bill Russell: 01:01 Have you ever had a character made like drawn or something of um, mm.
Lisa Suennan: 01:06 Yeah, I have actually. I mean usually people draw me with like they’ll Viking, you know, hat type of thing on and uh, I’ve had a few of those presented to me. I’ve walked up to speak to, you know, to the right of the Valkyries a couple of times. It’s a funny, yeah.
Bill Russell: 01:22 At the health conference, obviously the, I mean they do the character right, but now they have the, the cutouts. Which cutout do you think you’re going to try to take home?
Bill Russell: 01:30 Try to sneak in, sneak out it.
Lisa Suennan: 01:33 I’m looking, I hoping that there’s one of the rock, that’s what I want to take home. Otherwise I’m good. You don’t want any of the health care in the tail on the healthcare executives, you know,
Bill Russell: 01:42 you don’t want to do to healthcare executives. You’re just looking for the rock that didn’t take them over with me. Wow. Um, so give us a little background on what your, what you do and what you’re doing right now.
Lisa Suennan: 01:52 Okay. Um, well, for most of my career I’ve been either an entrepreneur or a venture capitalists or both. And I’m currently working, um, at Banat Phelps, which is a, uh, multidisciplinary, uh, professional services firm. has a strategy consulting for a law firm and a venture fund. Okay. So I’m running the hudge fund and I’m running the digital and technology practice for the firm. And I spent a lot of my time though at the digital health side of that.
Bill Russell: 02:24 That’s exciting. Well, were you penned the, uh, 13 things? Yes. That, uh, health tech startups need to consider and it’s been written about a bunch already. So, um, I, I don’t know if my audience has, has really delved into it, but I like it as a framework for having a conversation. So I’m just gonna, I’m gonna run through them and we’ll just use them as sort of bullet points to jump off of. So. Okay. Uh, I love the first one. So if the problem you’re solving isn’t keeping customers up at night, keep working. Yeah. I walked through these booths. You walked through HIMSS. How many do you think have that question?
Lisa Suennan: 03:00 5%. Yeah, it’s low.
Bill Russell: 03:03 It is low. I agree. And there’s a couple of others here that I sorta, you know, if you’re not sure who will pay your doing, that’s the second one where you have the conversation and they go, we’re going direct to consumers and I look at them and I go, I wouldn’t pay for that. Why would I pay for that?
Lisa Suennan: 03:17 Consumer healthcare is not worked out so well. I mean there’s a lot of companies have tried and failed. And I think, I think there’s a distinction between consumer fitness and you know, things like sports and athleticism and personal bestness people pay for that right? From January to like March. Yeah, true. And you know, the problem is that, um, many of you cross over into something people think should be covered by insurance. They’re not gonna pay for it and they don’t pay for it.
Bill Russell: 03:47 And that is one of the things down here. Yeah. If they, if they think it’s gonna be covered, but then you have these strengths, so then everybody comes in and says, Hey, we’re selling to the providers, payers and pharma. Um, it’s kinda hard to find somebody that’s going into all three, but there are some platform place or going all three. Um, and it’s, uh, it’s interesting cause it gets into one of your others, which is, uh, you know, you can’t pin them against each other. It’s not like you can be good for the payer and really bad for the provider because you could get stopped at either. There’s a lot of, there’s a lot of Gates that can stop.
Lisa Suennan: 04:20 I think the best businesses align incentives between the patients, the payers of the providers, particularly financial incentives. It’s not always easy, which is why 5% is the answer to the first question. Um, but I think those are the businesses that have the opportunity to be most successful.
Bill Russell: 04:37 So what areas, what areas do you think have the most opportunity? We see a lot of, we used to see a lot of patient engagement that has waned a little bit. No thank God.
Bill Russell: 04:49 It did seem like everybody had mapped that said, Hey, we’re going to be able to get, you know, this many people. But now it doesn’t seem like any one of them has taken hold and we’re back to, uh, health systems believe that the patient engagement can be done through my chart. And it’s, I mean if you think, you know, some of these started for bad, my chart as a patient engagement platform is kind of.
Lisa Suennan: 05:12 I question the whole concept of patient engagement. To be honest, I don’t think that, people don’t want to be engaged as a sick person. Right. I mean, I think when people have like cancer, they’re engaged, you know, they, they care a lot. They’re desperately seeking solutions, trying to survive. I think when people have most conditions, particularly the kind that kill you very slowly, like heart disease and the like, they don’t want to think about themselves as an ill person. They don’t want to engage around illness all of the time. They want to have a perfect world and they’re not going to get it. But in the perfect world, they want a quick fix and just leave me alone. Right? And, um, to feel decent and to live their lives, you know, as I should live their lives. And most people’s lives are not designed, be engaged with healthcare system, you know, if they can avoid it.
Bill Russell: 06:00 So chronic, uh, it’s not hard to get chronic conditions to buy into patient engagement, but healthy people aren’t aren’t generally looking to healthcare. They’re looking at their gym and other areas.
Lisa Suennan: 06:14 Yeah, I mean, I think one of the reasons that we’re seeing so much interest in some of the new primary care models like Walmart and CVS and the like is because patients, people who need healthcare wants convenience. They want predictability of pricing, right? They want good customer service. And so that makes these kinds of things very attractive. That is a way of engaging patients when you need healthcare, it’s a good experience. So I think that that’s sort of where I put that category.
Bill Russell: 06:47 So we have an Amazon care, which is interesting, you know, go directly to the, your employer population, bringing the care directly to them, same day appointments, those kinds of things. You mentioned a Walmart, new, a hundred thousand square foot facility just for care. Um, behavioral health, dental, I mean it’s just across the board. Um, so that you can see all those disciplines as well as get your imaging and your products and whatnot. How disruptive are they going to be to health systems or our health systems going to leapfrog them and just goes directly into the home and start to create, are they going to be that creative and go directly to the home?
Lisa Suennan: 07:25 And Well they’re trying to, I mean they’re certainly trying to, I mean, I think, um, but not with primary care or mostly with some of them. I mean, I think the challenges that most of that relates to value based pricing. So if you’re a general fee for service type of organization, you’re not as motivated to do that because you know, you get paid more by people coming to your health system. Right? Yeah. And so until we have a lot more value based contracting and real capitation for some of these things, I don’t think they’re going to leap frog that right now.
Bill Russell: 08:03 Remember, value base is still a long way off. The business model must account for that. I think the corollary to that is, remember the sales cycle is at least a year to at least yeah. To 18 months. And that’s people when I talk to startups, they’ll say, uh, you know, we have this great idea. we have our first client lined up and, and uh, you know, from the point that you say you have them lined up, so the point you get a check, um, you hope to live that long. Yeah. It’s, it’s, it’s, it’s kinda tough. And then I’ve heard somebody talk about really death by pilot. Yeah. And a lot of these startups allow themselves to get pigeonholed into these pilots all over the place. It stretches their resources. I mean, are you seeing that as well?
Lisa Suennan: 08:47 I think it’s getting a little better on the sophisticated companies? I mean, I think I always, I advise a guy today, I said, you know, if you’re going to sign up and do a pilot with this customer a they should pay and be the contract should provide for on this date certain if these specific things have happened, it automatically converts to it a commercial contract and here’s the pricing in it. You know, prepare for that transition because otherwise you just to struggle on forever. And if they like what you’re doing, they’re not going to want you to walk away.
Bill Russell: 09:16 So how do you coach a startup? One of the things that’s happening now, startups are going into health systems. Every health system has a fund or an innovation group and they look at them and go, that’s a good idea. In order to get into our health system, we want you to go over there and we want a percentage ownership. How do you coach them in that? By the way, I’ve heard that from, I’ve heard that directly from health systems and it’s like there’s two doors in here. That’s the easiest door. Give us ownership. And then the other way is just tooth and nail. Fight your way in and figure out if you can,
Lisa Suennan: 09:46 I either say don’t do that or I say do that. If you can align the incentive, if you can say to somebody, if somebody says to you, I will give you a whole bunch of business, but I want you to give me equity, great. Give them the equity as they give you the business. So if they want 5%, you know, give them 1% for every one fifth of the business they say they’re going to give you don’t just give it to them and hope for success because you know, that’s how people get paid. They get paid for, for performance and they should perform for you just like you’re performing for them. Otherwise it’s not a partnership.
New Speaker: 10:20 It’s interesting. Wow. I’m getting into some things I didn’t really want to get into. If your product helps payers, but hurts providers, you need both to play. Try again.
Bill Russell: 10:35 That’s the alignment of essentially adhere to all these. Yeah. Would you add anything to them at this point?
Lisa Suennan: 10:41 Um, I probably would, I, I don’t remember. There were a couple of really great suggestions and things I missed when I, uh, there was a suggestion of, um, you know, have, uh, a good regulatory or clear and thoughtful regulatory pathway, which I forgot when I did this. Um, but I also think, um, you know, what’s not there is, would you use this yourself? You know, and I think people forget to think about that real people are gonna touch this stuff, right? Not just patients but providers and others. The how’s it gonna effect their wanting to go to work or go to get care and go to whatever. Would you use it yourself? And if the answer is no, then it’s probably not good.
Bill Russell: 11:21 Well that, I mean, patients are the point. Don’t forget to include them in the design and testing or do you find startups still not doing that?
Lisa Suennan: 11:28 I can’t tell you how many companies I’ve talked to over the years that have said to me, I’ve said that. How many patients have tried your product that’s patient oriented, obviously. Well, my grandma tried it, I tried it or what, you know, one person, five people, whatever. Holy cow. It’s so terrible. I mean he really, there’s all this buzz about user centered design, but honestly it works, you know, and I think people should be out to show it to 50 or a hundred patients, you know, show it to a lot of people get real feedback because either do it before you launch or after and after is a lot more expensive.
Bill Russell: 12:02 I did make that mistake, so I’m not throwing stones here. Yeah. We had, uh, we had three startups at the health system I was at and uh, one of them failed. And uh, you know, one of the reasons was we waited way too long. By the time we brought people in, they were looking at us like, where are you going? Yeah. Um, and uh, and you know, and health systems aren’t really that great at engaging. Um, there, there are, at least we weren’t. And I, I know some others that struggle with it. It really engaging that patient community. I know others that are good at it. They’ve brought in, some are very good at, yeah, they, they’ve brought in groups, uh, cohorts for periods of time. They’re constantly iterating on the product. Um, where have you seen like really sound success stories at this point? In what respect? Health tech startups that are, um, that are making it, that are really starting to make it?
Lisa Suennan: 12:58 I actually think there’s some really good examples out there. You know, I don’t wanna I don’t know if it’s, you know, name is tough. I mean, I, you know, in my past history of investment, you know, I’ve had very interesting successful companies as well as not, um, and, but I do think there’s companies now that are finally getting critical mass. We’re starting to see companies get to like 20, 30, 40 million of revenue. That’s like a company, right? And for a long time there was nobody more than five, you know, a long time. So I think, you know, that is not still not massively successful. It’s still small, but it’s certainly, um, clear that they’re becoming more entrenched. No, not all money is the same. Right? Right. So there’c VC money, seed money. There’s a, there’s private equity. I mean, do you, do you end up coaching startups a lot on yes. A lot. Yeah. Because money is, they can, they can end up in a cold, dark place if they do the wrong thing, they take in.
Lisa Suennan: 13:58 And I actually encourage them not to raise any money if they can avoid it for the longest time that they can possibly get away with it. Because, you know, it’s not typical for companies to raise money if, if you, if you think about it, right in history, and I think if you look at the, the, uh, inc 500, you know, maybe something like 30 of them are venture backed, not a lot. So I think it’s good to bootstrap. It’s good to raise it from your family and friends. It’s good to gain it, get, get it from early revenue. The longer you can go without professional money, the better off you are because you just, you know, you lose a lot of control, isn’t there?
Bill Russell: 14:32 Well, you lose control. Absolutely. But isn’t there a concern? Like, if I don’t get the money, I’m not gonna be able to compete. That there’s always somebody else I have.
Lisa Suennan: 14:40 No, I don’t think so. Not if you’re good. I don’t think that the customer generally starts by asking you who your venture backers are. I think they start by asking you, unless they’re very strange. I mean I think they start by asking you what problem are you solving them and how, and what are you gonna do for them. You know.
Bill Russell: 14:53 number 10, wellness and prevention are essential, but no one wants to pay for them. Do employee, is that shifted? Are we seeing employers start starting to say, Hey, you know what, I think I could make the ma, I think I could, I’m selfish. Self-insured.
Lisa Suennan: 15:08 Yeah. There’s, look, there’s a lot of money being spent by employers for wellness programs that a lot of good. It’s primarily, I think, my opinion oriented towards, um, being a good place to work and not oriented really towards major health, you know, prevention and the like. There’s almost no data that suggests any of these wellness programs cause meaningful impact on health. primary prevention. The healthcare system just doesn’t pay for it with with a little bit of exception things that are regulated that you must cover, you know, colonoscopies you must cover, uh, you know, a mammography to a certain extent, you must call it very well baby care, um, or well baby, you know, sort of the early, the early diagnostics when they’re born. So there’s, there are things that are preventive and primary prevention oriented, but mostly those are things that payers are forced to pay for.
Bill Russell: 16:09 Women are 85% of healthcare decisions, make them a key part of the team. So you just came from your panel discussion.
Lisa Suennan: 16:16 Yeah. They’re 85% of decisions issues. Right. So their customer, right. And most companies don’t have any women on their teams. They are 75% of all healthcare workers.
Bill Russell: 16:29 75% of all healthcare workers.
Lisa Suennan: 16:31 are women. Wow. But by the time you get to the CEO level at 6%, right. So it falls off. By the time you get to the C suite, it’s like under 30% in healthcare systems or is that all healthcare in generally in healthcare? 6% six. Wow. Which is stunning really, especially if you add that to, I have forgot to talk to my customers, you know, um, or you wonder why a female CEO would not make that mistake. Well, they wouldn’t make the mistake of forgetting their female customers. Yeah. Yeah. It’s, it’s, it’s an, it’s interesting 85%. Women are used to thinking about their whole family. Right. The men, the women, the kids, the whole shebang. Right. They think about it that way. Yes. Um, so I think, no, no, women’s CEO would forget to think about the female customer. I think that’s right.
Bill Russell: 17:21 I do. The other thing I think is his humility. We just ran into a CEO with a female CEO and a, I was talking to her the other night and uh, she was talking about how she called an old friend who’s also female CEO by those two who were both on the podcast. Um, but she, uh, she said, you know, I, I got into the role and I realized I’m really, you know, I, I’m swimming up here cause it was my CEO role and there’s, there’s not a huge amount of ego just get on the phone and call somebody else and say, Hey, you’ve done this for 15 years. Help me, you know, and they broke down, Hey, what are you working on? What are you? And they said, well, you know, you’re still stuck in your old role. You need to become the CEO. It’s that, it’s the lack of ego. I think that is another attribute that would, uh, really help, uh, really, um, benefit female CEOs over male CEOs.
Lisa Suennan: 18:20 Well, I don’t know. I mean there’s great male CEOs, there’s, there’s great female CEOs, there’s terrible of both as well. Um, I think, you know, women actually tend to be less confident than men. And that’s, you know, nice because it’s makes them more friendly and approachable and it’s terrible because it keeps them back and keeps, you know, holds people back. I think, you know, one of the, I started to see sweetener, which was a, a, is a mentorship platform, kind of like a match.com match women rising women executives in healthcare with mentors for this exact purpose because, you know, women don’t often us have to these roles and they struggle to get there and they struggle to know what to do or what to say in situations that are not familiar with because they’re not there.
Lisa Suennan: 19:04 Right. And we have both male and female mentors and they could just set and you know, it’s been a really cool program because people want that engagement. They want to ask questions in a safe way. They don’t want to feel stupid, but they also recognize both men or women, I think. But in my case, I was focused on the women, you know, that, um, everybody could use a little help, you know, but it’s hard to find. Who do you talk to, right? So actually we were excited cause health announced they were acquiring C sweetener yesterday to scale it and grow it. Um, so it’ll be more, but I think, you know, there’s people with big egos on both sides of the gender, uh, platform, no doubt.
Bill Russell: 19:40 I stand corrected. Yeah. Let me ask you this. The, uh, you know, people who are in the game, I like to ask if you were going to do a startup right now, um, you know, somebody is going to come alongside of you and say, Hey, let’s actually, you’re not going to take the money.
Bill Russell: 19:56 You have a great idea. What area would you focus in on? I’m not going to ask for like the idea, but what’s, what’s the area you think is maybe underserved that has a huge job?
Lisa Suennan: 20:05 Actually, I had pediatrics. I think pediatrics is, um, healthy families, you know, healthy children create healthy adults. Uh, by the time, you know, you’re five, six, seven years old, you’re kind of in a blueprint for your rest of your life. In some ways. There’s not a lot of funding for pediatrics. It’s very under, under funded. And, um, you know, I think there’s, if I could change the dynamic of healthcare, you know, talk about primary prevention is teaching kids how to take care of themselves and keeping them healthy. I wish there was more there. I’d love to do something there that was meaningful.
Bill Russell: 20:41 Yeah. And uh, I’m trying to figure out how to weave this in. Somebody told me I should talk to you about, uh, the infrastructure of healthcare and reliable systems and how important reliable systems are like power grids, those kind of.
Lisa Suennan: 20:53 God. Yeah. Well, you know, I, I live in Marin County in California. Yeah. We’re having a massive intentional blackout right now that PG&E turned our lights out across 20 counties in California for five days. Second time it’s happened in a month now. We’re having terrible fires right now and that’s part of why they did it. But okay, so five, so five days in a row. Yeah. Twice. Yeah. How, I’m not sure how I could live. I imagine it’s a lot to move out so I could live, but it’s incredibly inconvenient. Like, even our cell phones weren’t working. But now imagine somebody who’s on oxygen, they got to plug into a wall. Imagine somebody who has on insulin, it needs to refrigerate it, right?
Lisa Suennan: 21:36 I mean this is life threatening for a lot of people.
Bill Russell: 21:38 Are they taking them into account ahead of time. I would assume somebody is taking that into account. We’re just, we’re just shutting off Marine County.
Lisa Suennan: 21:46 I don’t know. It’s not just Marine County, it’s 20 counties. You know, it’s, it’s, it’s something like, uh, it’s, it’s literally millions of California. 3 million Californians don’t like that. It’s a huge swath of, of area. And no, I don’t think they, I think they thought about it some. I think the state thought about it some and some of the counties I’ve created, you know, some, some support for this. I fundamentally, no, because all of that stuff has been advertised to the damn internet. And if you’re 65 you’re 70 or 80 years old and you’re living alone and you don’t use the internet much, you don’t know. You know? So I think it’s really scary and I think they grid, I think our, our, you know, sort of reliability on the electrical grid and on light and on other things. That’s, you know, intrinsic to healthcare.
Bill Russell: 22:27 Should we, uh, do a start up around basic infrastructure across the country, redo the electrical grid? Yeah, we probably should. Probably should do, redo the electrical. Probably should. It’s pretty bad. California. Any last question? Anything at the conference jump out at you?
Lisa Suennan: 22:45 Not so much yet. I’ve been pretty much in meetings, but I’m actually, here’s what jumped out at me last year. Health was a conference that was dominated by men. There were 18% of the speakers were women and they got a lot of flack for that and this year they really fixed it. I mean now 38% of women speakers are women. It’s not equal, but it’s close to getting there. Big, big change. And they’ve put together a whole bunch of programming that’s focused on supporting women and they really doubled down on doing the right thing. And I’m really, I’m really impressed by that actually.
Bill Russell: 23:15 Congratulations on your success. So they’re going to take C-suite wrote out. Yeah, you’re still going to be involved. Yeah. Fantastic. Yeah. Well thanks for your time. Thank you. Appreciate it.
Bill Russell: 23:25 I hope you’ve enjoyed the conversation. If you’d like to recommend a guest or someone to be on the show, you can do that from our homepage, uh, recommended guests. It’s about three quarters of the way down on the homepage. Please check that out and don’t forget to please come back every Friday for more great interviews with influencers. And don’t forget every Tuesday we take a look at the news, which is impacting health. It this show, a production of this week in health it for more great content. You check out our website this week, health.com or the YouTube channel, which you can get to from our homepage as well. Uh, if you get a chance to take a look at our newly redesigned guest page, I think you’ll find it a fantastic, I love the way you can navigate through the content. Special thanks again to our sponsors VM-ware and health lyrics for choosing to invest in developing the next generation of health leaders. Thanks for listening. That’s all for now.