1 00:00:03,080 --> 00:00:06,480 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:06,559 --> 00:00:09,600 Speaker 1: dot com, the Radio plus Mobile Act and on your radio. 3 00:00:09,880 --> 00:00:14,200 Speaker 1: This is a Bloomberg Business flag from Bloomberg World Handquarters. 4 00:00:14,280 --> 00:00:17,439 Speaker 1: Son Charlie Pellett of the equity market rally continues for 5 00:00:17,600 --> 00:00:21,000 Speaker 1: a third day, Dow Jones Industrial Average trading above its 6 00:00:21,040 --> 00:00:25,080 Speaker 1: record close from May of two thousand fifteen, as investors 7 00:00:25,079 --> 00:00:28,600 Speaker 1: way corporate health amid the start of the earning season. 8 00:00:28,920 --> 00:00:32,320 Speaker 1: Alcohol which reported last night rallying five point two percent 9 00:00:32,400 --> 00:00:34,839 Speaker 1: now at ten sixty seven. The Dow is up a 10 00:00:34,920 --> 00:00:37,800 Speaker 1: hundred and thirty four points, gaining seven tenths of one 11 00:00:37,840 --> 00:00:41,080 Speaker 1: percent to eighteen thousand, three hundred sixty one, the record 12 00:00:41,120 --> 00:00:44,120 Speaker 1: on the Dow eighteen thousand, the old record eighteen thousand, 13 00:00:44,200 --> 00:00:48,040 Speaker 1: three hundred twelve SMP up seventeen twenty one fifty four 14 00:00:48,120 --> 00:00:50,440 Speaker 1: now a gain of eight tenths of one percent. Nez 15 00:00:50,520 --> 00:00:52,920 Speaker 1: stan Cup forty, also a gain of eight tenths of 16 00:00:53,040 --> 00:00:56,240 Speaker 1: one percent. The ten year down twenty five thirty seconds, 17 00:00:56,280 --> 00:00:59,960 Speaker 1: the yield one point five one percent, Gold down twenty 18 00:01:00,000 --> 00:01:03,000 Speaker 1: one ninety out four, a drop there of one point 19 00:01:03,080 --> 00:01:06,560 Speaker 1: six percent, and crude oil West Texas Intermediate of a 20 00:01:06,600 --> 00:01:10,600 Speaker 1: dollar ninety five v one. Uh, that is a gain 21 00:01:10,640 --> 00:01:14,080 Speaker 1: of four point four percent. I'm Charlie Putt, and that's 22 00:01:14,200 --> 00:01:18,800 Speaker 1: a Bloomberg business flash. You're listening to taking Stock with 23 00:01:18,920 --> 00:01:22,920 Speaker 1: Kathleen and Pim Box on Bloomberg Radio. How do you 24 00:01:23,000 --> 00:01:28,760 Speaker 1: build a multi billion dollar business? How do you satisfy customers? 25 00:01:28,840 --> 00:01:30,880 Speaker 1: How do you know the right questions to ask in 26 00:01:30,959 --> 00:01:33,920 Speaker 1: order to get the right investors? Well, chances are he 27 00:01:34,040 --> 00:01:37,240 Speaker 1: turned to John Scully. He is, of course, author, entrepreneur, 28 00:01:37,440 --> 00:01:40,200 Speaker 1: former chief executive of PepsiCo and Apple, and the author 29 00:01:40,200 --> 00:01:44,160 Speaker 1: of a new book entitled Moonshot, Game Changing Strategies to 30 00:01:44,280 --> 00:01:47,760 Speaker 1: Build Billion Dollar Businesses, and John joins me in the 31 00:01:47,800 --> 00:01:50,120 Speaker 1: studio today. John, thank you very much for being with us. 32 00:01:51,160 --> 00:01:55,800 Speaker 1: Let's start off by understanding what makes this book different 33 00:01:55,960 --> 00:02:00,360 Speaker 1: than other books about how to build businesses. You've done 34 00:02:00,360 --> 00:02:02,480 Speaker 1: that and one of the things that I wanted to 35 00:02:02,600 --> 00:02:05,240 Speaker 1: zero win on. First of all, is you talk about 36 00:02:05,240 --> 00:02:10,320 Speaker 1: a customer plan, not just a business plan. Explain that, sure, Well, 37 00:02:10,360 --> 00:02:13,560 Speaker 1: first of all, this is not an autobiography. Uh. This 38 00:02:13,680 --> 00:02:16,920 Speaker 1: is really made up of the conversations with so many 39 00:02:16,960 --> 00:02:20,400 Speaker 1: successful entrepreneurs that I've known over the years, and the 40 00:02:20,480 --> 00:02:23,480 Speaker 1: lessons we've all learned. Most of the lessons we've learned 41 00:02:23,480 --> 00:02:26,720 Speaker 1: PIM come from our mistakes, not from our successes, And 42 00:02:27,080 --> 00:02:28,919 Speaker 1: a lot of people are afraid to talk about their 43 00:02:29,520 --> 00:02:32,119 Speaker 1: mistakes because they're afraid of getting ambushed by it. Well, 44 00:02:32,200 --> 00:02:34,480 Speaker 1: I can talk to the two entrepreneurs. They know I'm 45 00:02:34,520 --> 00:02:36,800 Speaker 1: not going to ambush them. But going back to the 46 00:02:36,880 --> 00:02:40,240 Speaker 1: customer plan, so many people in business are used to 47 00:02:40,400 --> 00:02:44,560 Speaker 1: the tedious process of writing an annual business plan, which 48 00:02:44,600 --> 00:02:47,160 Speaker 1: is really a budget, which is really looking back and saying, so, 49 00:02:47,160 --> 00:02:49,400 Speaker 1: where were we before and how much further do we 50 00:02:49,400 --> 00:02:51,720 Speaker 1: think we can go in the future. The customer plan 51 00:02:51,840 --> 00:02:55,160 Speaker 1: starts in a totally different place. It says, what's the 52 00:02:55,280 --> 00:02:59,640 Speaker 1: really big customer problem that needs to be solved, and 53 00:02:59,680 --> 00:03:01,919 Speaker 1: can you be the ones to solve it? And if so, 54 00:03:02,639 --> 00:03:05,080 Speaker 1: how are we going to do it? And how are 55 00:03:05,120 --> 00:03:07,600 Speaker 1: we going to engage the customer? What's the cost of 56 00:03:07,639 --> 00:03:11,600 Speaker 1: customer acquisition? All the metrics are customer metrics. What's the 57 00:03:11,680 --> 00:03:15,079 Speaker 1: cost of customer retention? How do you monetize the customer? 58 00:03:15,480 --> 00:03:18,480 Speaker 1: What's the lifetime value of customer? And when you're building 59 00:03:18,480 --> 00:03:21,639 Speaker 1: the customer plan, you start with the customer problem what's 60 00:03:21,639 --> 00:03:24,440 Speaker 1: in it for the customer? And you look out green 61 00:03:24,960 --> 00:03:28,000 Speaker 1: field out into the future, and you say, you know, 62 00:03:28,560 --> 00:03:31,600 Speaker 1: let's look at what could be, not what was in 63 00:03:31,639 --> 00:03:36,520 Speaker 1: the past. To follow up on that, the questions that 64 00:03:36,760 --> 00:03:40,000 Speaker 1: a potential entrepreneur, or indeed someone that is currently running 65 00:03:40,000 --> 00:03:44,080 Speaker 1: an entrepreneurial company, the questions you say are really more 66 00:03:44,120 --> 00:03:46,800 Speaker 1: important than the answers. Well, of course they are, because 67 00:03:46,840 --> 00:03:49,760 Speaker 1: we're in the era of Google, We're in the era 68 00:03:49,920 --> 00:03:52,880 Speaker 1: of Wikipedia and many other sources. If you want to 69 00:03:52,880 --> 00:03:55,720 Speaker 1: go check answers their commodity, you can get them for free. 70 00:03:56,320 --> 00:03:59,280 Speaker 1: The problem is the way most of us grew up 71 00:03:59,360 --> 00:04:03,120 Speaker 1: and went to school, Uh, we were measured on memorizing 72 00:04:03,120 --> 00:04:06,800 Speaker 1: the answers. But what you really discover in life, it's 73 00:04:07,040 --> 00:04:11,120 Speaker 1: learning the context of the right questions. Ask the right questions, 74 00:04:11,560 --> 00:04:14,040 Speaker 1: and it's amazing how the same set of facts you 75 00:04:14,080 --> 00:04:18,000 Speaker 1: know looks entirely different. So I encourage people, particularly those 76 00:04:18,000 --> 00:04:20,240 Speaker 1: who want to be in an entrepreneurial world where you 77 00:04:20,279 --> 00:04:21,920 Speaker 1: wouldn't be doing it if you didn't think there was 78 00:04:21,920 --> 00:04:25,200 Speaker 1: a better way to do something, to ask the right questions. 79 00:04:25,800 --> 00:04:28,960 Speaker 1: In my opinion, it's always around the context of what's 80 00:04:28,960 --> 00:04:32,440 Speaker 1: in it for the customer talking about asking the right questions. 81 00:04:32,480 --> 00:04:34,800 Speaker 1: I want to turn your attention to a specific industry 82 00:04:34,800 --> 00:04:36,760 Speaker 1: that you have a lot of expertise in and that 83 00:04:36,839 --> 00:04:39,080 Speaker 1: you are working in right now, and this is healthcare. 84 00:04:39,600 --> 00:04:42,320 Speaker 1: What are the right questions to ask when it comes 85 00:04:42,320 --> 00:04:46,120 Speaker 1: to things like the price of pharmaceuticals or dealing with 86 00:04:46,160 --> 00:04:53,039 Speaker 1: health care as a huge, uh tangled mess of of bureaucracy. Well, 87 00:04:53,120 --> 00:04:55,400 Speaker 1: it goes back to what we've been talking about ask 88 00:04:55,480 --> 00:04:58,000 Speaker 1: the right questions. The right question in healthcare that I 89 00:04:58,160 --> 00:05:01,120 Speaker 1: focus on are the chronic care patients. About five percent 90 00:05:01,200 --> 00:05:03,480 Speaker 1: of the population in the US, about one point five 91 00:05:03,600 --> 00:05:06,640 Speaker 1: three dollars have health spent. Around fifty of every dollar 92 00:05:06,760 --> 00:05:10,200 Speaker 1: spent in healthcare goes to that five of chronically old people. 93 00:05:10,960 --> 00:05:15,600 Speaker 1: The whole movement today is to move these chronically old 94 00:05:15,600 --> 00:05:20,599 Speaker 1: people out of the hospitals and to serve them even better, 95 00:05:21,040 --> 00:05:24,560 Speaker 1: better customer experience, better patient experience in their homes. And 96 00:05:24,640 --> 00:05:27,600 Speaker 1: the high technology that we have today with sensors that 97 00:05:27,640 --> 00:05:30,920 Speaker 1: can measure their vital signs, the ability to use video conferencing, 98 00:05:31,160 --> 00:05:35,800 Speaker 1: which is really becoming increasingly increasingly accessible and expensive. The 99 00:05:35,880 --> 00:05:39,480 Speaker 1: part of the business I'm focused on are the pharmaceuticals, 100 00:05:39,520 --> 00:05:45,359 Speaker 1: because the pharmaceuticals UH represent hundreds of billions of dollars 101 00:05:45,360 --> 00:05:48,880 Speaker 1: of annual cost savings if you can be able to 102 00:05:48,880 --> 00:05:52,160 Speaker 1: deal with issues like avoidable drug costs. For example, the 103 00:05:52,200 --> 00:05:55,960 Speaker 1: chronic care patient typically has fifteen meds a day, but 104 00:05:56,040 --> 00:05:59,280 Speaker 1: they're being prescribed by different specialists who don't necessarily know 105 00:05:59,640 --> 00:06:02,360 Speaker 1: what the other specialists are prescribing because they can't get 106 00:06:02,360 --> 00:06:05,240 Speaker 1: the information in a useful form. What we do at 107 00:06:05,320 --> 00:06:08,320 Speaker 1: our company, our x Advance, we're the first cloud based 108 00:06:08,600 --> 00:06:12,960 Speaker 1: pharmacy benefit management platform with actionable intelligence. We use machine 109 00:06:13,000 --> 00:06:17,520 Speaker 1: learning other technologies, and we're able to dramatically cut the costs. 110 00:06:17,560 --> 00:06:20,200 Speaker 1: We believe will probably be about a ten billion dollar 111 00:06:20,240 --> 00:06:23,800 Speaker 1: revenue company. By we expect to be making close to 112 00:06:23,800 --> 00:06:26,280 Speaker 1: a billion dollars of profit. And with that we can 113 00:06:26,360 --> 00:06:29,800 Speaker 1: turn back, you know, at least another billion dollars of 114 00:06:29,839 --> 00:06:33,240 Speaker 1: profit back into the health system and dramatically lower the 115 00:06:33,279 --> 00:06:38,680 Speaker 1: costs of tens of billions of dollars for patients and 116 00:06:38,720 --> 00:06:41,360 Speaker 1: health systems. And we can increase the pay of the doctors. 117 00:06:41,360 --> 00:06:42,800 Speaker 1: And you say, well, how can you do all of that? 118 00:06:43,080 --> 00:06:46,760 Speaker 1: It's because the system is so inefficient. It was built 119 00:06:47,720 --> 00:06:51,520 Speaker 1: thirty years ago and no one upgraded the technology. We're 120 00:06:51,520 --> 00:06:54,880 Speaker 1: still living with technology that was designed for a different era. 121 00:06:55,240 --> 00:06:57,840 Speaker 1: So our company is just one example of that, our 122 00:06:58,000 --> 00:06:59,840 Speaker 1: x Advance, but there are others out there. It's a 123 00:07:00,080 --> 00:07:03,159 Speaker 1: huge industry. They are going to find different opportunities, but 124 00:07:03,279 --> 00:07:05,840 Speaker 1: always start with the customer. In this case, the customers 125 00:07:05,839 --> 00:07:08,160 Speaker 1: a patient, and always say, how do I give that 126 00:07:08,240 --> 00:07:12,680 Speaker 1: patient just an incredibly good experience now, something that not 127 00:07:12,760 --> 00:07:15,920 Speaker 1: many people have always been able to have in the 128 00:07:15,960 --> 00:07:18,480 Speaker 1: health care systems. I think of the frustrations of standing 129 00:07:18,520 --> 00:07:22,320 Speaker 1: in queues, waiting and waiting rooms, not knowing really what 130 00:07:22,360 --> 00:07:25,160 Speaker 1: they want to do, having trouble getting the doctors twenty 131 00:07:25,160 --> 00:07:26,960 Speaker 1: one days on average to get to see a doctor. 132 00:07:27,360 --> 00:07:31,800 Speaker 1: So those things can be dramatically improved on UH and 133 00:07:31,880 --> 00:07:34,160 Speaker 1: taking advantage of the skills of the professionals in the 134 00:07:34,200 --> 00:07:36,640 Speaker 1: health care system. There's nothing wrong with our professionals of 135 00:07:36,680 --> 00:07:39,160 Speaker 1: doctors and nurses, it's how do we get them up 136 00:07:39,160 --> 00:07:42,840 Speaker 1: to date with the same kinds of disruptive innovation that 137 00:07:42,920 --> 00:07:45,640 Speaker 1: have taken place in the private sector part of our economy. 138 00:07:45,840 --> 00:07:50,640 Speaker 1: In putting together are ex advans, you went through some 139 00:07:50,760 --> 00:07:53,400 Speaker 1: of the same issues that you note in your book 140 00:07:53,640 --> 00:07:56,280 Speaker 1: Moonshot one. If you could tell me some of the 141 00:07:56,480 --> 00:08:00,320 Speaker 1: maybe anecdotes that have illustrated your progress to under standing 142 00:08:00,360 --> 00:08:03,000 Speaker 1: what it means to put together a new company. Well, 143 00:08:03,040 --> 00:08:06,480 Speaker 1: one of the real challenges is that, uh, the incumbents 144 00:08:06,960 --> 00:08:09,000 Speaker 1: really don't want to change, you know, for a whole 145 00:08:09,040 --> 00:08:11,600 Speaker 1: bunch of reasons. It may be because they're worried about, 146 00:08:11,680 --> 00:08:14,280 Speaker 1: you know, what does it mean to their particular job. 147 00:08:15,280 --> 00:08:18,000 Speaker 1: How does it um you know, gonna make life different. 148 00:08:18,280 --> 00:08:21,000 Speaker 1: So what we realized was, even though we can build 149 00:08:21,040 --> 00:08:26,280 Speaker 1: an entirely new pharmacy based management supply chain system, that 150 00:08:26,280 --> 00:08:28,360 Speaker 1: that's probably not the best place to start because it 151 00:08:28,440 --> 00:08:31,640 Speaker 1: disrupts too many people's lives in the health care industry. 152 00:08:31,920 --> 00:08:35,280 Speaker 1: So we said, keep what you got and we'll build 153 00:08:35,280 --> 00:08:39,040 Speaker 1: on top of that. So we'll fit in. So you 154 00:08:39,080 --> 00:08:41,880 Speaker 1: can say, we can stand out with many of the 155 00:08:41,920 --> 00:08:44,640 Speaker 1: advantages I was talking about earlier, you know, cost savings, 156 00:08:44,679 --> 00:08:47,360 Speaker 1: better customer experience, more things we can do in the 157 00:08:47,400 --> 00:08:49,840 Speaker 1: patient's home, make it real simple for people who know 158 00:08:49,920 --> 00:08:53,920 Speaker 1: nothing about technology. For instance, we're using um the new 159 00:08:53,960 --> 00:08:58,640 Speaker 1: Alexa smart assistant that was developed by Amazon. Terrific product 160 00:08:58,679 --> 00:09:01,000 Speaker 1: Amazon development. We had corporate it back into our system 161 00:09:01,040 --> 00:09:04,679 Speaker 1: because the Amazon open the technology up. But uh, we 162 00:09:04,720 --> 00:09:07,719 Speaker 1: are trying to say we can fit in. We can 163 00:09:07,760 --> 00:09:10,200 Speaker 1: don't have to force you to change everything that you 164 00:09:10,240 --> 00:09:14,040 Speaker 1: already have. And it's amazing the difference of the reception 165 00:09:14,120 --> 00:09:16,920 Speaker 1: we get from the insurance industry when we say, hey, 166 00:09:16,960 --> 00:09:19,080 Speaker 1: we can fit in and by the way, we won't 167 00:09:19,160 --> 00:09:22,520 Speaker 1: charge your fee for service. We'll take the risk. And 168 00:09:22,559 --> 00:09:24,040 Speaker 1: when they say you mean you'll take the risk, you 169 00:09:24,080 --> 00:09:26,160 Speaker 1: of that much confidence and what you're doing that you're 170 00:09:26,200 --> 00:09:29,840 Speaker 1: willing to bet on performance. You don't get paid unless 171 00:09:29,840 --> 00:09:34,480 Speaker 1: you perform to what you've said to absolutely and why 172 00:09:34,520 --> 00:09:37,360 Speaker 1: can't we do that? Because the inefficiencies of the systems 173 00:09:37,440 --> 00:09:41,520 Speaker 1: are so incredibly big and the advantages of disruptive technology 174 00:09:41,600 --> 00:09:45,440 Speaker 1: can make such an incredibly large impact. How big is 175 00:09:45,520 --> 00:09:49,560 Speaker 1: our x advance today? We launched it in January of 176 00:09:49,600 --> 00:09:52,559 Speaker 1: this year, we started back in. We'll do about a 177 00:09:52,920 --> 00:09:55,040 Speaker 1: D five million revenue this year and next year we're 178 00:09:55,040 --> 00:09:57,200 Speaker 1: looking at well over five hundred million. It could be 179 00:09:57,480 --> 00:09:59,760 Speaker 1: closer to a billion next year. We think we'll be 180 00:09:59,800 --> 00:10:04,880 Speaker 1: at hen billion dollars revenues. Our plan by and we 181 00:10:04,960 --> 00:10:09,800 Speaker 1: think that we have pretty conservative outlook to get um 182 00:10:09,880 --> 00:10:12,080 Speaker 1: somewhere around eight hundred million dollars for profit. Now, there 183 00:10:12,080 --> 00:10:15,600 Speaker 1: aren't many businesses that grow that fast to that size, 184 00:10:15,960 --> 00:10:19,120 Speaker 1: but it's still very small in the context of a 185 00:10:19,200 --> 00:10:22,360 Speaker 1: three training dollar healthcare industry. I mean, even then, we'll 186 00:10:22,360 --> 00:10:25,679 Speaker 1: probably have less than a three percent market here at 187 00:10:25,679 --> 00:10:28,320 Speaker 1: that scale. At that scale, well, I want to thank 188 00:10:28,360 --> 00:10:30,800 Speaker 1: you very much. When you talk about that, it sounds 189 00:10:30,800 --> 00:10:32,959 Speaker 1: almost like a moon shot, and I guess that's a 190 00:10:33,000 --> 00:10:35,000 Speaker 1: good way to describe your book because that's the title, 191 00:10:35,160 --> 00:10:39,880 Speaker 1: Moonshot Game Changing Strategies to Build Billion dollar Businesses. Thank 192 00:10:39,920 --> 00:10:43,760 Speaker 1: you very much for spending time with us. John Scully, author, entrepreneur, 193 00:10:43,880 --> 00:10:47,600 Speaker 1: former chief executive of PepsiCo and Apple much appreciate it. 194 00:10:47,840 --> 00:10:51,199 Speaker 1: I keep him and it's available on Amazon. Maybe you 195 00:10:51,240 --> 00:10:53,840 Speaker 1: can use Alexa to order it as well. You can't. Actually, yeah, 196 00:10:53,920 --> 00:10:56,280 Speaker 1: say Alexa, I want to order John Scully's moon Shot, 197 00:10:56,320 --> 00:10:58,960 Speaker 1: and if you're connected to Amazon Prime, you'll get the book. 198 00:10:59,280 --> 00:11:03,120 Speaker 1: Thanks very much, John Scully, author of Moonshot game Changing 199 00:11:03,160 --> 00:11:07,720 Speaker 1: Strategies to Build Billion dollar Businesses. You're listening to taking Stock, 200 00:11:07,760 --> 00:11:10,560 Speaker 1: I'm pim Fox and this is Bloomberg