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Speaker 1: Son Charlie Pellett of the equity market rally continues for
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Speaker 1: dollar ninety five v one. Uh, that is a gain
Speaker 1: of four point four percent. I'm Charlie Putt, and that's
Speaker 1: a Bloomberg business flash. You're listening to taking Stock with
Speaker 1: Kathleen and Pim Box on Bloomberg Radio. How do you
Speaker 1: build a multi billion dollar business? How do you satisfy customers?
Speaker 1: How do you know the right questions to ask in
Speaker 1: order to get the right investors? Well, chances are he
Speaker 1: turned to John Scully. He is, of course, author, entrepreneur,
Speaker 1: former chief executive of PepsiCo and Apple, and the author
Speaker 1: of a new book entitled Moonshot, Game Changing Strategies to
Speaker 1: Build Billion Dollar Businesses, and John joins me in the
Speaker 1: studio today. John, thank you very much for being with us.
Speaker 1: Let's start off by understanding what makes this book different
Speaker 1: than other books about how to build businesses. You've done
Speaker 1: that and one of the things that I wanted to
Speaker 1: zero win on. First of all, is you talk about
Speaker 1: a customer plan, not just a business plan. Explain that, sure, Well,
Speaker 1: first of all, this is not an autobiography. Uh. This
Speaker 1: is really made up of the conversations with so many
Speaker 1: successful entrepreneurs that I've known over the years, and the
Speaker 1: lessons we've all learned. Most of the lessons we've learned
Speaker 1: PIM come from our mistakes, not from our successes, And
Speaker 1: a lot of people are afraid to talk about their
Speaker 1: mistakes because they're afraid of getting ambushed by it. Well,
Speaker 1: I can talk to the two entrepreneurs. They know I'm
Speaker 1: not going to ambush them. But going back to the
Speaker 1: customer plan, so many people in business are used to
Speaker 1: the tedious process of writing an annual business plan, which
Speaker 1: is really a budget, which is really looking back and saying, so,
Speaker 1: where were we before and how much further do we
Speaker 1: think we can go in the future. The customer plan
Speaker 1: starts in a totally different place. It says, what's the
Speaker 1: really big customer problem that needs to be solved, and
Speaker 1: can you be the ones to solve it? And if so,
Speaker 1: how are we going to do it? And how are
Speaker 1: we going to engage the customer? What's the cost of
Speaker 1: customer acquisition? All the metrics are customer metrics. What's the
Speaker 1: cost of customer retention? How do you monetize the customer?
Speaker 1: What's the lifetime value of customer? And when you're building
Speaker 1: the customer plan, you start with the customer problem what's
Speaker 1: in it for the customer? And you look out green
Speaker 1: field out into the future, and you say, you know,
Speaker 1: let's look at what could be, not what was in
Speaker 1: the past. To follow up on that, the questions that
Speaker 1: a potential entrepreneur, or indeed someone that is currently running
Speaker 1: an entrepreneurial company, the questions you say are really more
Speaker 1: important than the answers. Well, of course they are, because
Speaker 1: we're in the era of Google, We're in the era
Speaker 1: of Wikipedia and many other sources. If you want to
Speaker 1: go check answers their commodity, you can get them for free.
Speaker 1: The problem is the way most of us grew up
Speaker 1: and went to school, Uh, we were measured on memorizing
Speaker 1: the answers. But what you really discover in life, it's
Speaker 1: learning the context of the right questions. Ask the right questions,
Speaker 1: and it's amazing how the same set of facts you
Speaker 1: know looks entirely different. So I encourage people, particularly those
Speaker 1: who want to be in an entrepreneurial world where you
Speaker 1: wouldn't be doing it if you didn't think there was
Speaker 1: a better way to do something, to ask the right questions.
Speaker 1: In my opinion, it's always around the context of what's
Speaker 1: in it for the customer talking about asking the right questions.
Speaker 1: I want to turn your attention to a specific industry
Speaker 1: that you have a lot of expertise in and that
Speaker 1: you are working in right now, and this is healthcare.
Speaker 1: What are the right questions to ask when it comes
Speaker 1: to things like the price of pharmaceuticals or dealing with
Speaker 1: health care as a huge, uh tangled mess of of bureaucracy. Well,
Speaker 1: it goes back to what we've been talking about ask
Speaker 1: the right questions. The right question in healthcare that I
Speaker 1: focus on are the chronic care patients. About five percent
Speaker 1: of the population in the US, about one point five
Speaker 1: three dollars have health spent. Around fifty of every dollar
Speaker 1: spent in healthcare goes to that five of chronically old people.
Speaker 1: The whole movement today is to move these chronically old
Speaker 1: people out of the hospitals and to serve them even better,
Speaker 1: better customer experience, better patient experience in their homes. And
Speaker 1: the high technology that we have today with sensors that
Speaker 1: can measure their vital signs, the ability to use video conferencing,
Speaker 1: which is really becoming increasingly increasingly accessible and expensive. The
Speaker 1: part of the business I'm focused on are the pharmaceuticals,
Speaker 1: because the pharmaceuticals UH represent hundreds of billions of dollars
Speaker 1: of annual cost savings if you can be able to
Speaker 1: deal with issues like avoidable drug costs. For example, the
Speaker 1: chronic care patient typically has fifteen meds a day, but
Speaker 1: they're being prescribed by different specialists who don't necessarily know
Speaker 1: what the other specialists are prescribing because they can't get
Speaker 1: the information in a useful form. What we do at
Speaker 1: our company, our x Advance, we're the first cloud based
Speaker 1: pharmacy benefit management platform with actionable intelligence. We use machine
Speaker 1: learning other technologies, and we're able to dramatically cut the costs.
Speaker 1: We believe will probably be about a ten billion dollar
Speaker 1: revenue company. By we expect to be making close to
Speaker 1: a billion dollars of profit. And with that we can
Speaker 1: turn back, you know, at least another billion dollars of
Speaker 1: profit back into the health system and dramatically lower the
Speaker 1: costs of tens of billions of dollars for patients and
Speaker 1: health systems. And we can increase the pay of the doctors.
Speaker 1: And you say, well, how can you do all of that?
Speaker 1: It's because the system is so inefficient. It was built
Speaker 1: thirty years ago and no one upgraded the technology. We're
Speaker 1: still living with technology that was designed for a different era.
Speaker 1: So our company is just one example of that, our
Speaker 1: x Advance, but there are others out there. It's a
Speaker 1: huge industry. They are going to find different opportunities, but
Speaker 1: always start with the customer. In this case, the customers
Speaker 1: a patient, and always say, how do I give that
Speaker 1: patient just an incredibly good experience now, something that not
Speaker 1: many people have always been able to have in the
Speaker 1: health care systems. I think of the frustrations of standing
Speaker 1: in queues, waiting and waiting rooms, not knowing really what
Speaker 1: they want to do, having trouble getting the doctors twenty
Speaker 1: one days on average to get to see a doctor.
Speaker 1: So those things can be dramatically improved on UH and
Speaker 1: taking advantage of the skills of the professionals in the
Speaker 1: health care system. There's nothing wrong with our professionals of
Speaker 1: doctors and nurses, it's how do we get them up
Speaker 1: to date with the same kinds of disruptive innovation that
Speaker 1: have taken place in the private sector part of our economy.
Speaker 1: In putting together are ex advans, you went through some
Speaker 1: of the same issues that you note in your book
Speaker 1: Moonshot one. If you could tell me some of the
Speaker 1: maybe anecdotes that have illustrated your progress to under standing
Speaker 1: what it means to put together a new company. Well,
Speaker 1: one of the real challenges is that, uh, the incumbents
Speaker 1: really don't want to change, you know, for a whole
Speaker 1: bunch of reasons. It may be because they're worried about,
Speaker 1: you know, what does it mean to their particular job.
Speaker 1: How does it um you know, gonna make life different.
Speaker 1: So what we realized was, even though we can build
Speaker 1: an entirely new pharmacy based management supply chain system, that
Speaker 1: that's probably not the best place to start because it
Speaker 1: disrupts too many people's lives in the health care industry.
Speaker 1: So we said, keep what you got and we'll build
Speaker 1: on top of that. So we'll fit in. So you
Speaker 1: can say, we can stand out with many of the
Speaker 1: advantages I was talking about earlier, you know, cost savings,
Speaker 1: better customer experience, more things we can do in the
Speaker 1: patient's home, make it real simple for people who know
Speaker 1: nothing about technology. For instance, we're using um the new
Speaker 1: Alexa smart assistant that was developed by Amazon. Terrific product
Speaker 1: Amazon development. We had corporate it back into our system
Speaker 1: because the Amazon open the technology up. But uh, we
Speaker 1: are trying to say we can fit in. We can
Speaker 1: don't have to force you to change everything that you
Speaker 1: already have. And it's amazing the difference of the reception
Speaker 1: we get from the insurance industry when we say, hey,
Speaker 1: we can fit in and by the way, we won't
Speaker 1: charge your fee for service. We'll take the risk. And
Speaker 1: when they say you mean you'll take the risk, you
Speaker 1: of that much confidence and what you're doing that you're
Speaker 1: willing to bet on performance. You don't get paid unless
Speaker 1: you perform to what you've said to absolutely and why
Speaker 1: can't we do that? Because the inefficiencies of the systems
Speaker 1: are so incredibly big and the advantages of disruptive technology
Speaker 1: can make such an incredibly large impact. How big is
Speaker 1: our x advance today? We launched it in January of
Speaker 1: this year, we started back in. We'll do about a
Speaker 1: D five million revenue this year and next year we're
Speaker 1: looking at well over five hundred million. It could be
Speaker 1: closer to a billion next year. We think we'll be
Speaker 1: at hen billion dollars revenues. Our plan by and we
Speaker 1: think that we have pretty conservative outlook to get um
Speaker 1: somewhere around eight hundred million dollars for profit. Now, there
Speaker 1: aren't many businesses that grow that fast to that size,
Speaker 1: but it's still very small in the context of a
Speaker 1: three training dollar healthcare industry. I mean, even then, we'll
Speaker 1: probably have less than a three percent market here at
Speaker 1: that scale. At that scale, well, I want to thank
Speaker 1: you very much. When you talk about that, it sounds
Speaker 1: almost like a moon shot, and I guess that's a
Speaker 1: good way to describe your book because that's the title,
Speaker 1: Moonshot Game Changing Strategies to Build Billion dollar Businesses. Thank
Speaker 1: you very much for spending time with us. John Scully, author, entrepreneur,
Speaker 1: former chief executive of PepsiCo and Apple much appreciate it.
Speaker 1: I keep him and it's available on Amazon. Maybe you
Speaker 1: can use Alexa to order it as well. You can't. Actually, yeah,
Speaker 1: say Alexa, I want to order John Scully's moon Shot,
Speaker 1: and if you're connected to Amazon Prime, you'll get the book.
Speaker 1: Thanks very much, John Scully, author of Moonshot game Changing
Speaker 1: Strategies to Build Billion dollar Businesses. You're listening to taking Stock,
Speaker 1: I'm pim Fox and this is Bloomberg