Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Master's in
Speaker 1: Business with Barry Ridholds on Bloomberg Radio.
Speaker 2: What can I say about this week's rock star guest?
Speaker 2: Annie Lamont incredible track record as a venture capitalist. She's
Speaker 2: co founder and managing partner of Oak HCFT. I can't
Speaker 2: list all her accolades because they're just one hundred most
Speaker 2: influential people in healthcare Forbes Midas List five times, Top
Speaker 2: one hundred venture capitalists according to CBE Insights, Top vcs
Speaker 2: on the New York Times List, Top twenty Private equity
Speaker 2: power Players, Fintech Finance forty. She has had seventy exits
Speaker 2: seven zero over the past twenty five years. Fifth ten IPOs.
Speaker 2: Just an incredible track record of investing, primarily in the
Speaker 2: healthcare but also the financial technology space. There as surprising
Speaker 2: amounts of overlap in terms of access, outcomes, cost speed, friction,
Speaker 2: especially those last three cost, speed, and friction between the two.
Speaker 2: She's also First Lady of Connecticut and married to Governor
Speaker 2: Ned Lamont. She's been doing VC work for thirty five
Speaker 2: forty years and just as as insightful as anyone in
Speaker 2: the world about those areas, especially healthcare. I found this
Speaker 2: conversation to be absolutely fascinating. I think you will also
Speaker 2: with no further ado, my discussion with Oak Hcfts.
Speaker 3: Annie Lamont, thanks very great to be here.
Speaker 2: I've been really excited for this conversation. You do so
Speaker 2: many interesting things. But let's start with OAKEN Investment Partners.
Speaker 2: You were a GP there starting in eighty six and
Speaker 2: eight c ventures. What led you to that part of
Speaker 2: your career.
Speaker 4: Well, very early on, I got out of Stanford when
Speaker 4: Silicon Valley was really at the very beginning of Silicon
Speaker 4: Valley and joined somebody called hambrickton Quist, which was a
Speaker 4: boutique investment bank venture firms or of legendary at that time.
Speaker 4: I think I was the fiftieth employee and really fell
Speaker 4: in love with venture from day one and working with entrepreneurs.
Speaker 4: I Carrie Steve jobs Bags on the Apple IPO road
Speaker 4: show in my first three months there. Wow, the first
Speaker 4: three months we also took Genentech public, so I worked
Speaker 4: with two of the greatest entrepreneurs ever.
Speaker 1: I didn't know that at that time.
Speaker 2: That was my next question is did you have any
Speaker 2: sense of who you were upping shouldiers with or was
Speaker 2: just like fast moving blur.
Speaker 4: I certainly those two seemed like extraordinary people, and I
Speaker 4: extrapolated that to most entrepreneurs. I quickly learned they were
Speaker 4: two extraordinary individuals. But that was it just got me hooked.
Speaker 4: I thought, if I could just learn and be with
Speaker 4: people like this and not be the entrepreneur, but be
Speaker 4: the person that supported, helped, edited, therapist, whatever was required.
Speaker 4: I just wanted to spend the rest of my life
Speaker 4: with people who envisioned the world as it should be.
Speaker 2: And H and Q is known for a lot of
Speaker 2: their software, internet hardware technology. What led you over to
Speaker 2: the healthcare sector.
Speaker 4: So when I joined Oak, which was really just a
Speaker 4: couple of years out of out of Stanford. We were
Speaker 4: founding Genzyme the year that I joined, one of the
Speaker 4: also very first biotech companies, and there was only one
Speaker 4: public software company at that point. And I wasn't really
Speaker 4: interested in one of the three hundred disktrive companies that
Speaker 4: were being created.
Speaker 2: Not an Iomega fan, I remember that one.
Speaker 4: Just yeah, they had done seagates for the original Seagate
Speaker 4: shuegart And so I said, I want to create my
Speaker 4: own space, you know, I want to create my own
Speaker 4: expertise in an area that I could fundamentally be interested in,
Speaker 4: and that ended up being biotech and so focused on
Speaker 4: life science is the first fifteen years of my career,
Speaker 4: and that companies like Alexian, Cephalon, Alkermes, all host of companies.
Speaker 2: Were you anything healthcare or medical or biotech related at Stanford?
Speaker 3: Well would you do?
Speaker 2: Now?
Speaker 4: I should have been a hum bio major, but I wasn't.
Speaker 4: I had no idea how interested I was in the topic.
Speaker 4: But I became fascinated by it and educated myself and
Speaker 4: I wish it would have been nice to have had
Speaker 4: the Internet back then.
Speaker 2: But what what'd you study at Stanford?
Speaker 4: I was a political science major, so of course that
Speaker 4: prepared me for my life with my husband ultimately. But
Speaker 4: I did have an interest in politics, but.
Speaker 2: No technology, no engineering.
Speaker 4: I mean, everybody takes a computer science course at Stanford.
Speaker 2: But huh really interesting. So Oak Investment Partners very sophisticated
Speaker 2: VC platform going back to like the late seventies, I
Speaker 2: think is when they launched. Yeah, so when you joined
Speaker 2: them in the eighties, what did you what did you
Speaker 2: focus on? What? What was was it healthcare right out
Speaker 2: of the gate or how did that transition take place
Speaker 2: from carrying Steve jobs bags on the road show to
Speaker 2: focusing on healthcare.
Speaker 4: I think my interest, I said, and we found a
Speaker 4: genzyme it just intellectually interested in the area, but worked
Speaker 4: on you know, some software companies back then, and then
Speaker 4: decided I really needed my own hook. Like the reality
Speaker 4: is in every career, you know you should, you need
Speaker 4: to create your own expertise and your own special lane.
Speaker 1: And that was going to be my lane.
Speaker 4: I wanted to differentiate myself from all the other engineers
Speaker 4: at at OAK and do my own thing.
Speaker 2: Was was that kind of a white sheet at that point?
Speaker 2: There wasn't a lot of there. Yeah.
Speaker 4: Yeah, that was the other thing. It wasn't any real
Speaker 4: competition at OAK. And in terms of the market, it
Speaker 4: was a burgeoning area and you didn't have to be
Speaker 4: a PhD. You could hire PhDs to help you analyze
Speaker 4: these things.
Speaker 2: What was Oak's core focus when you joined them was
Speaker 2: was healthcare something that had they had previously played in?
Speaker 2: Or you essentially did you stand up that sector? Yes, Oak? Yes,
Speaker 2: huh So what else were they investing in at the
Speaker 2: same time?
Speaker 4: Well, a lot of hardware is, I said, a number
Speaker 4: of disk drive companies PC. I mean we did actually
Speaker 4: invest in compac during that period, and so it was
Speaker 4: more PC hardware telecom related.
Speaker 2: So clients, the LPs who come to Oak, were they
Speaker 2: just giving them cash to be allocated across all these
Speaker 2: different sectors or did people say all right, I'll try
Speaker 2: a little bit of healthcare and a little now.
Speaker 4: We always had and we do have an OKHCFT one
Speaker 4: fund at everything, and we would choose the allocation.
Speaker 3: Huh.
Speaker 2: So that investors are getting bosure to whatever you guys
Speaker 2: think has the most potential. Right, So you're listed as
Speaker 2: a managing partner at Oak as well as a managing
Speaker 2: partner and co founder at Oak HCFT. What's the relationship
Speaker 2: between the two companies?
Speaker 4: There is there is no relationship. Ok Investment Partners is
Speaker 4: Wine is wound down effectively, I'm still there until the
Speaker 4: last company is.
Speaker 2: Just waiting for a right.
Speaker 3: Yes, for the last.
Speaker 4: Exactly have an obligation to those LPs in that firm,
Speaker 4: But the reality is there is no relationship. We started
Speaker 4: ok HCFT because we had had two practices obviously in
Speaker 4: healthcare and fintech. Andrew Adams and myself launched the firm
Speaker 4: and ten years ago and really wanted to focus on
Speaker 4: the new model of investing that wasn't just Jedi Knights
Speaker 4: from you know, twenty five years ago, where it was
Speaker 4: just you're a good advisor and you don't have a
Speaker 4: talent function and you're not The really changed to become
Speaker 4: a service entity to entrepreneurs, to support entrepreneurs. And it
Speaker 4: was always partnering with entrepreneurs in the past, but the
Speaker 4: reality is that became a far more competitive world. You
Speaker 4: really needed to be deep in a specialty to differentiate yourself,
Speaker 4: and you needed to have things like tech support. Talent
Speaker 4: support is enormous because it is all about people. We
Speaker 4: have five individuals that are just singlely focused on talent
Speaker 4: and attracting talent for our companies and also introducing us
Speaker 4: to repeat entrepreneurs we haven't invested in before.
Speaker 2: So you've used the phrase Jedi Knights in the past.
Speaker 2: Tell us a little bit what you mean by that.
Speaker 2: I get the sense the world of venture today is
Speaker 2: very different than the eighties and.
Speaker 1: Nineties, very different.
Speaker 4: I think the Jedi Knights means that it's just a
Speaker 4: group of individuals, maybe a firm, but it's a group
Speaker 4: of individuals that are sort of all out for themselves
Speaker 4: just investing directly with entrepreneurs, with no real overlap between
Speaker 4: anyone else in the firm and that entrepreneur, whereas now
Speaker 4: I would say, like, okay, safety is very much a
Speaker 4: team based approach where we support the entrepreneur in a
Speaker 4: myriadive ways. Whatever they need, you know, will we will
Speaker 4: supply as a firm.
Speaker 2: So some of the VC books and autobiographies and the
Speaker 2: like that I've read kind of imply the early eighties
Speaker 2: and earlier days of venture was first they would write
Speaker 2: a check, and after they had been writing checks for
Speaker 2: a few years, they ended up having a bit of
Speaker 2: a network of other engineers and other venture funds and
Speaker 2: other entrepreneurs, and so people would plug into that network.
Speaker 2: It sounds like you're describing something much more comprehensive and
Speaker 2: holistic than the venture of old. Servicing the entrepreneur put
Speaker 2: some flesh on those bones. How much service does oak
Speaker 2: provide to the companies you work work with besides funding?
Speaker 4: I think that first of all, that we should just
Speaker 4: talk about that the difference between a world where everything
Speaker 4: there was more, There was less capital and more entrepreneurs
Speaker 4: in the early days, so the supply demand balance was
Speaker 4: such that there was a lot more power I would
Speaker 4: say with the money than with the entrepreneurs and the
Speaker 4: great entrepreneurs. And I would say that's flipped in this
Speaker 4: world and that there are obviously many more entrepreneurs, but
Speaker 4: there's also a lot more money in the industry, and say,
Speaker 4: you really have to differentiate yourself. And I think that's
Speaker 4: where this service model came in of support that is how,
Speaker 4: in part, you differentiate yourself. And yes, it's great relationships
Speaker 4: and great advice, but it's also the wrap around of
Speaker 4: talent which is huge, like recruiting and understanding that you're
Speaker 4: providing someone go to market advice at times exit, really
Speaker 4: understanding the process in terms of exiting companies introduce you introductions,
Speaker 4: which is the importance of being deep in these two
Speaker 4: sectors is you know the customers. We know the customers intimately,
Speaker 4: we have great relationships with them broadly, and so we
Speaker 4: can help make the introductions as well as many of
Speaker 4: those customers end up being buyers of the companies, and
Speaker 4: so just understanding that life cycle and being completely connected
Speaker 4: to those communities is really is hugely important.
Speaker 2: So that flipping of the power dynamics from the capital
Speaker 2: to the entrepreneur. Does that have anything to do with
Speaker 2: companies now staying private for so much longer that seems
Speaker 2: like there's endless amounts of money around and no shortage
Speaker 2: of people willing to fund startups. How does that dynamic
Speaker 2: play out with all these companies just postponing IPOs for
Speaker 2: seemingly much longer than they used to.
Speaker 4: Less about postponing ipo. So though certainly some of the
Speaker 4: major you know, some of the very large companies are
Speaker 4: doing that in order to realize full value, I would
Speaker 4: say that the IPO market is not as you know.
Speaker 1: It is so cyclical.
Speaker 4: It's just not For example, it's not friendly right now,
Speaker 4: and it's hard to get exits. So I would say
Speaker 4: in these two sectors, I mean, a stripe can go
Speaker 4: public anytime it wants. Is when to choose to go
Speaker 4: public when it feels like the values there and they're
Speaker 4: in the best position from a profitability standpoint and growth perspective.
Speaker 4: The reality is most companies cannot go public. What has
Speaker 4: changed dramatically in the last thirty years is that companies
Speaker 4: could go public much earlier in their life cycle. Now biotech,
Speaker 4: which we don't do anymore, we do all technology enabled
Speaker 4: software and services and healthcare that it started in two
Speaker 4: thousand with Athena Health.
Speaker 1: The reality is is.
Speaker 4: It is not an exit to go public, and with biotech,
Speaker 4: it's just a funding mechanism, right, there's a it's a
Speaker 4: public private world in biotech. The rest of the universe,
Speaker 4: you really have to be a more mature company. You
Speaker 4: have to be an over billion dollar market cap company
Speaker 4: to haven't make any sense to go public. You know,
Speaker 4: there used to be companies that have one hundred and
Speaker 4: two hundred million dollar market gaps that would go public,
Speaker 4: but it's been it's been made much more difficult to
Speaker 4: be a public company. There are far fewer people that
Speaker 4: play with those companies. If you don't have a large
Speaker 4: market cap, people don't the liquidity isn't there. The dollars
Speaker 4: are so much larger going into these public companies that
Speaker 4: it's just a it's a very different world than it
Speaker 4: was thirty years ago. But now we've created in the
Speaker 4: private markets a sort of private public world. And I
Speaker 4: would say while eighty percent of our exits are through strategics,
Speaker 4: the financial pe world is our buyers for early stage companies,
Speaker 4: but we have to get them profitable, you know.
Speaker 2: It seems odd that markets are at all time highs
Speaker 2: at the same time. Not a friendly IPO market. I'm
Speaker 2: trying to remember the last time those two things happened
Speaker 2: at the same time, right, Like you think back old
Speaker 2: time highs, late nineties, red hot IPO market, even mid
Speaker 2: seventies before the financial crisis, pretty robust IPO market. And
Speaker 2: then again venture and IPO is right up and through
Speaker 2: the early part of the pandemic, you know, red hot market.
Speaker 2: This is my first example of all time highs and stocks,
Speaker 2: but not so much in IPO issuance.
Speaker 4: But I think if you looked at the market, so
Speaker 4: much of it has been driven by the top seven
Speaker 4: tech companies. So it's a bit of a head fake.
Speaker 4: You're now seeing rotation right in terms of other companies
Speaker 4: through you know, other companies now benefiting by the markets
Speaker 4: from being higher. But I think the reality is right now,
Speaker 4: we just have an overhang from certainly in my world
Speaker 4: I can speak to healthcare and fintech, a number of
Speaker 4: companies going public and then disappointing or evaluation just being
Speaker 4: excessive compared to the maturity of the businesses. So I
Speaker 4: think there's just a hangover from that, and people are
Speaker 4: going to invest in known entities that are already public
Speaker 4: at this point, and we still have a ways to go.
Speaker 4: I think for some of those companies, many of those
Speaker 4: smaller to mid sized companies being valued in the marketplace
Speaker 4: and appropriately really interesting.
Speaker 2: So let's talk a little bit about some of the
Speaker 2: companies that you guys have invested in. You were very
Speaker 2: early in some iconic names. You mentioned Athena, there's also
Speaker 2: one medical Village MD Devoted Health. Quite a on of
Speaker 2: really big names. Tell us what led you to these companies?
Speaker 2: How are you so early so often in companies that
Speaker 2: turned out to be, you know, big movers in the space.
Speaker 4: Well, I would say it started with Athena Health, backing
Speaker 4: Jonathan Bush and the Park brothers there, Todd and Eddie Park,
Speaker 4: then founded cast Light actually by Todd, and then then
Speaker 4: devoted So a lot of what we do repeat entrepreneurs.
Speaker 4: Once you find a great entrepreneur, you develop a deep
Speaker 4: relationship with them their friends as well as business colleagues,
Speaker 4: and then you back them over and over again. And
Speaker 4: so we've done that very successfully over time. But it
Speaker 4: did start with that. The whole tech enabled services approach
Speaker 4: and healthcare started with Athena, and it started with our
Speaker 4: view that we really just wanted to invest in things
Speaker 4: that lowered cost, improved outcomes, and patient experience in healthcare
Speaker 4: period the end.
Speaker 2: Give me, give me those three again, improved outcomes and
Speaker 2: patient experiences. Yes, well that sounds like, you know, the
Speaker 2: Holy grail if you can do all three of those.
Speaker 4: So you don't always do all three, but at least
Speaker 4: two of them. It really is a mission for us
Speaker 4: and trying to improve healthcare. And we started Athena was
Speaker 4: the first cloud based healthcare company, and we invested in them,
Speaker 4: and really it was just a red cycle management company then,
Speaker 4: which was part of art thinking also around why we
Speaker 4: did payments and fintech. A lot of overlap in the
Speaker 4: whole payments world in healthcare. But so and then and
Speaker 4: then it became an EHR Electronic health record company seven
Speaker 4: years later actually, and so now they have one of
Speaker 4: the most important EHRs in the country and in that space.
Speaker 4: But really it was just a like paid doctors faster,
Speaker 4: better using technology. And so if you're looking at some
Speaker 4: of the newer companies, think Devoted, which is a fascinating
Speaker 4: company that's focused on medicare advantage and is competing with
Speaker 4: all legacy companies, United, Humanita, Elevants, Anthem. If you think,
Speaker 4: if you look at what Devoted is doing, they have
Speaker 4: redesigned the entire tech stack. They're using gen Ai in
Speaker 4: their function. They are a combination of a villager, Oak
Speaker 4: Street and an MA plan, meaning that they're actually they
Speaker 4: have Devoted Medical Group which started as virtual but as
Speaker 4: a network managing network of the care because you cannot
Speaker 4: you cannot as a health plan, directly manage the cost
Speaker 4: of care is eighty five percent of all healthcare, and
Speaker 4: so as a health plan, in order to manage care,
Speaker 4: you actually have to in part own the care. And
Speaker 4: so Devoted Medical Groups starts with you know, primary care
Speaker 4: docs virtually wrap around services virtually as well as extending
Speaker 4: their networks so that they can actually impact the quality
Speaker 4: and cost of care. So there really is nobody else
Speaker 4: effectively doing both being the NMA plan as well as
Speaker 4: being a source of managing the care. And so they've
Speaker 4: done that amazingly well. The fact that they have a
Speaker 4: modern tech stack that no one else has. Everybody else
Speaker 4: is writing off of thirty and forty year old legacy programs.
Speaker 4: Even I mean, if you look at Epic just from
Speaker 4: the software side. I mean, there's literally based on mumps,
Speaker 4: you know, from the nineteen seventies. So what's exciting about
Speaker 4: Devoted is that you're now seeing the impact of all
Speaker 4: of that, whereas MA plans all over the country are suffering,
Speaker 4: and they're actually excelling this environment.
Speaker 2: So let's talk a little bit about quality and cost.
Speaker 2: It seems like healthcare, unique in the US business space,
Speaker 2: has been so resistant to an end to end form
Speaker 2: of technology that improves quality reduced costs, like technology and
Speaker 2: computers and software seem to have improved productivity and lowered
Speaker 2: costs everywhere twenty thirty years ago, and it's still compounding.
Speaker 2: Why has healthcare been such a challenge to build in
Speaker 2: basic technologies? Why are they still working on thirty forty
Speaker 2: year old legacy systems?
Speaker 4: Well, so a little like banking, as many of those
Speaker 4: are also working off of cobol systems but are now
Speaker 4: finally being reinvented. I would say healthcare. If you actually
Speaker 4: to most people who have worked in healthcare, there's almost
Speaker 4: like a right brain left brain disconnect and that you're
Speaker 4: either tech focustory or healthcare focused. And I would say,
Speaker 4: what's happened in the last decade is that you have
Speaker 4: a younger generation coming into the industry that are just
Speaker 4: naturally tech focused, right your tech savvy users. There are
Speaker 4: a number of technologists that are interested in healthcare and
Speaker 4: so there's been much more reinvention. I mean, I think
Speaker 4: not to talk about devoted too much, but the reality
Speaker 4: is the CEO Eddie Park is a computer science major
Speaker 4: from Herbert So that is is like a different mentality.
Speaker 4: And I would say if you look at most healthcare companies,
Speaker 4: they just have not focused on that and they haven't
Speaker 4: if you're a hospital system in general, you've not been
Speaker 4: forced to be truly efficient. HCA different story they have,
Speaker 4: but in most cases they've implemented epic or in some
Speaker 4: cases than the ambulatory side, maybe in Athena. But they
Speaker 4: are not tech. This is not their business. You know,
Speaker 4: their core business is delivering healthcare and they really haven't
Speaker 4: understood the power of tech. I do think what's changing
Speaker 4: and the massive inflection point right now with jen Ai,
Speaker 4: you now have all this unstructured data that is abundant
Speaker 4: in healthcare, and you now can take that and have
Speaker 4: the power of that to change workflow, to change and
Speaker 4: support the doctors and nurses that are delivering here in
Speaker 4: a way that doesn't require behavior change but makes their
Speaker 4: lives easier, and that is going to be a game changer.
Speaker 2: So I want to put a little It's almost a
Speaker 2: cliche to say flesh on the bones, no pun intended.
Speaker 2: So I have my Charts by Epic on my phone
Speaker 2: and it's the first app I've ever used where I
Speaker 2: can renew a prescription, I could set up an appointment,
Speaker 2: I can ask a doctor question. But literally six months ago,
Speaker 2: if I wanted a record before I put this on
Speaker 2: this phone, the doctor's office would say, fax your request
Speaker 2: to us, Like, what's a fact? I mean, really, we're
Speaker 2: still using fifty year old technologies. But that seems to
Speaker 2: be in most of the medical profession. I know there's
Speaker 2: some security concerns and some rules about what can and
Speaker 2: can't be emailed, but faxes, I mean they're living in
Speaker 2: the nineteen seventies. Is it that far behind the curve
Speaker 2: for much of the medical US?
Speaker 4: Yes, just even in New York City. Just got any
Speaker 4: doctor and you will find that they're still faxing or
Speaker 4: handing you a piece of paper, and they're not integrated
Speaker 4: with their own hospital system that they may be affiliated
Speaker 4: with or have surgical privileges at is.
Speaker 1: It's absolutely insane.
Speaker 4: My images, I'm still carding around on discs right, it's crazy. Now.
Speaker 4: The amazing thing and the problem with Hippa is you're right,
Speaker 4: like you can't do zoom.
Speaker 1: You're not supposed to do zoom.
Speaker 2: Right because it's not secure.
Speaker 1: It's not you don't have it's not hippo compliant.
Speaker 4: You. What makes absolutely no sense is that a fax
Speaker 4: is considered secure.
Speaker 2: Right. It sits on the fax machine somewhere for hours.
Speaker 4: Anybody can see it, right, you know the sanitation worker
Speaker 4: that night, can you know, like see, the whole thing's
Speaker 4: crazy so much somehow you know your private email is
Speaker 4: not private enough?
Speaker 2: So I mentioned my charts. Epic is still private, very
Speaker 2: large private company. There's been some litigation because of any
Speaker 2: trust concerns with them. How big is their penetration if
Speaker 2: so many offices are still you know faxing records around.
Speaker 4: Their penetration is enormous and growing and I effectively you
Speaker 4: know Serner is losing traction and losing clients every day.
Speaker 4: Really and yes, Epic is is owning that market.
Speaker 2: Is that because the software is so good? And I
Speaker 2: will tell you my experience with the app, you know,
Speaker 2: ten out of ten. But what else is happening behind
Speaker 2: the scenes that's giving them such an advantage over everybody else.
Speaker 4: Well, I think Cerner lost its way in manner a
Speaker 4: decade ago. Oh really a decade ago. So it just
Speaker 4: create opened up the it just opened up. There wasn't
Speaker 4: you know. It takes time to create all the different
Speaker 4: modules and all the different departments. So this is just
Speaker 4: a time game almost and that you know, Epic had
Speaker 4: a lot of time to create integrated software across all
Speaker 4: of these different departments. And and because they got every
Speaker 4: academic medical institution in the country to effectively adopt them,
Speaker 4: you know, they they've become a standard and there there
Speaker 4: is a danger in that in terms of talking about monopoly,
Speaker 4: they are going to have a growing monopoly in this market.
Speaker 4: They've also as you say, it's it's a benefit you know,
Speaker 4: their views like Apple, they're going to be a walled
Speaker 4: garden and that'll be a benefit to the customer. And
Speaker 4: that's that's okay. And certainly hospitals you know, like it
Speaker 4: and there's a real benefit to it. I do think
Speaker 4: the issue is, I mean, we would never sue epic
Speaker 4: for any of our small companies that are trying to
Speaker 4: interface with them. That isn't the way we roll. But
Speaker 4: do think that there it's a cautionary note about the
Speaker 4: amount of power.
Speaker 2: They've become the eight hundred pound gorilla in the space.
Speaker 4: Is that what's happened, no question, And you as an
Speaker 4: innovator has to have privileges to link into that system.
Speaker 2: So they were the disruptor, and now like Apple was
Speaker 2: the disruptor, now they become the dominant player. So that's
Speaker 2: why there's some challenges. I was kind of shocked when
Speaker 2: I saw the chatter about anti trust because literally it's
Speaker 2: the first app that just works as a patient. Wait,
Speaker 2: I could do all these things, prescriptions, appointments, I could
Speaker 2: see X rays or whatever. Wow, nothing else has ever
Speaker 2: worked this well, they always send you to a website,
Speaker 2: which opens up a different site. Like nothing really felt secure.
Speaker 2: This really does feel like a secure app. So does
Speaker 2: that create opportunities for other companies to come in and
Speaker 2: being disrupted disruptors or are they sort of blocking the
Speaker 2: entrance way to new startups that want to compete in
Speaker 2: that same space?
Speaker 4: Well, I think you know, let's define the space right
Speaker 4: that is just for providers and hospital systems specifically, not
Speaker 4: independent providers there. But you think about the way we
Speaker 4: think about healthcare in general. What we do in tech
Speaker 4: enabled software and solutions is we're treating pharma services so
Speaker 4: farmer as a client, employers payer, employer market as a client,
Speaker 4: and payers our clients beyond our customers of our companies,
Speaker 4: beyond hospital systems.
Speaker 1: Actually, this has.
Speaker 4: Been the hardest place to play and where we've made
Speaker 4: the least number of investments, the fewest number of investments
Speaker 4: is in hospital systems because Epic owned it, and so
Speaker 4: you know, it's been a sort of dangerous territory for
Speaker 4: a young innovator to go into. But there's plenty of
Speaker 4: opportunity to have payers, solutions to focus on provide creating
Speaker 4: companies that are value based or focused on out how
Speaker 4: do we create better outcomes in medicare, medicaid and commercial.
Speaker 4: That don't mean that you're competing in the hospital environment. Again,
Speaker 4: but back to Jenai, I think the reality is because
Speaker 4: of the power of our unstructured data, I think that
Speaker 4: there will be many more opportunities to be a disruptor
Speaker 4: in the hospital market. And I don't think it's certainly possible.
Speaker 4: My dream would be in a decade, ten to twenty
Speaker 4: years that you wouldn't you wouldn't need an EPIC because
Speaker 4: you would have the ability to integrate with all these
Speaker 4: solutions using unstructured data across the hospital.
Speaker 2: So you guys aren't necessarily an investor in hospital systems
Speaker 2: or hospitals. But when we look in the hospital space,
Speaker 2: there's been a lot of private equity activity. There's been
Speaker 2: a lot of consolidation. A ton of not for profit
Speaker 2: hospitals still carrying that moniker have been picked up by
Speaker 2: for profit private equity players. How do you look at
Speaker 2: the consolidation taking place in the hospital chain area? How
Speaker 2: does that affect how you think about software technology and integration.
Speaker 4: There will be more consolidation, it will mostly be done
Speaker 4: by not for profits. That is, the vast majority of
Speaker 4: hospital systems now are part of not for profits. Right
Speaker 4: the private equity world, we consider ourselves venture capitalists or
Speaker 4: growth growth investors, not PE but p you know, has
Speaker 4: bought several hospital systems, not all of it's gone well.
Speaker 4: I do feel there's some backlash to that. You know,
Speaker 4: our goal is to reduce costs in healthcare and improve
Speaker 4: the patient experience, and you can't really do that if
Speaker 4: you're focused on owning hospitals. The reality is, everything we
Speaker 4: want to do is keep people out of hospitals. That's
Speaker 4: the goal, right. Nobody wants to be in hospital, Nobody
Speaker 4: wants to die in a hospital. So everything that we
Speaker 4: want to do is a better patient experience in the home,
Speaker 4: right in military surgery or in the home, outside of
Speaker 4: the hospital system. So that that's our goal and focus,
Speaker 4: not being not owning hospital systems. I will say I
Speaker 4: was on the board of HCA for a while, not
Speaker 4: as an investor, but an observer of the best hospital
Speaker 4: system in America. And if you think about that, that
Speaker 4: was a pe deal. It was owned by a family,
Speaker 4: but multiple times right they went public, they went private,
Speaker 4: they went public again, and that is the best run
Speaker 4: hospital system in America as a for profit really, yes,
Speaker 4: the best run, the most efficient, great outcomes. And I
Speaker 4: think the way you've got to look at this not
Speaker 4: for profit hospitalism is that every not for profit hospital
Speaker 4: is a for profit hospital because every decision is made
Speaker 4: by a for profit doctor.
Speaker 2: Right somewhere along the line, someone is making a decision
Speaker 2: and obviously.
Speaker 1: That impacts their income.
Speaker 4: Right, So that there's no such thing as a not
Speaker 4: for private hospital in America.
Speaker 2: So what are the better known hospitals that HCA manages
Speaker 2: If I'm not familiar with eight c A generally, Well.
Speaker 1: They're going to be brands.
Speaker 4: You know, there's Baptists, there's They're gonna be brands all
Speaker 4: over the country and they're gonna be different in every
Speaker 4: market because they.
Speaker 1: Want to be local.
Speaker 4: You feel local, and so you wouldn't necessarily know the brands.
Speaker 4: It's gonna be Florida, and it's going to be city
Speaker 4: by city, and every hospital will have a different name.
Speaker 2: Like I've been fortunate to not spend a whole lot
Speaker 2: of time in hospitals, my experience at NYU Lang Gone
Speaker 2: was kind of eye opening. Well, first, you know, sometimes
Speaker 2: you get advice, Hey, go someplace that specializes what you need.
Speaker 2: So they've seen every variant. And even with that, I
Speaker 2: wasn't prepared for what an amazing factory assembly line. And
Speaker 2: I mean that the most positive sense of it. It's like, yeah,
Speaker 2: we do a million of these a day. Whatever you have,
Speaker 2: it's not a problem. We've seen it. And it was true.
Speaker 2: They had it down to like bing bang bing, you're
Speaker 2: in and out and it was really impressive to see.
Speaker 2: I'm just curious if that degree of competency. I think
Speaker 2: my whole copay for the whole experience was fifty bucks,
Speaker 2: which I guess just means my wife has good health
Speaker 2: insurance as a New York teacher. But it was really impressive.
Speaker 2: Is that specifically a function of one hospital or is
Speaker 2: that a broader management approach to the whole chain?
Speaker 4: New York does not allow for hospitals, so you wouldn't
Speaker 4: experience it in New York state.
Speaker 2: It did not feel like it was a not for profit. Yeah,
Speaker 2: it felt like everything was structured to get them in,
Speaker 2: get them out, move on time.
Speaker 4: We have New Yorker's a lucky and that they've got
Speaker 4: a somewhat competitive hospital environment and for sure excellent care
Speaker 4: here right.
Speaker 1: So No, it's and that's that is.
Speaker 4: I think if you sat in a boardroom of a
Speaker 4: not for profit and a for pro hospital, you'd be
Speaker 4: amazed how similar the conversations are.
Speaker 2: I don't doubt that at all. How do you think
Speaker 2: about having sat on a board how do you think
Speaker 2: about managing problem hospitals? I just got off the phone
Speaker 2: with a friend in Florida who jokingly said, you know,
Speaker 2: if you fall and break your leg in Florida, you
Speaker 2: don't call an ambulance, You call cab. You call an
Speaker 2: uber to take you to the airport to fly up
Speaker 2: to New York. I think he was exaggerating a little bit.
Speaker 2: But that's not the first time I've heard things like.
Speaker 1: That over and over again.
Speaker 4: People come dig you know, from Connecticut, and people come
Speaker 4: back to Connecticut all that they do their healthcare. Connecticut
Speaker 4: may be there, or Northeast could be their second home,
Speaker 4: and maybe theyre domicile now in Florida, but they come
Speaker 4: back for the hospital.
Speaker 2: How does the system that has that sort of reputation,
Speaker 2: how do they address that. It seems like in Florida,
Speaker 2: you would think that they have lots of people who
Speaker 2: were older. They should be really good.
Speaker 1: At that, they should be really good.
Speaker 2: It's a it's just a you know, it's just a
Speaker 2: I'm just musing. But it just seems like I mentioned
Speaker 2: somebody I was speaking to you, and they're like, find
Speaker 2: out why Florida hospitals are not good. I don't think
Speaker 2: she invests in hospitals.
Speaker 4: Well, you know, and I think there's there's just a
Speaker 4: long history, like they have doctors going to to Florida
Speaker 4: to there's been a culture of like making money there,
Speaker 4: you know, and the more specialists you have, the more
Speaker 4: it's it's amazing. The more specialist you have, more surgeries and.
Speaker 1: More things to get done it right.
Speaker 4: And so I just don't think they have the same
Speaker 4: tradition of quality that other states have had, or the
Speaker 4: Northeast has had.
Speaker 1: So I can't.
Speaker 4: Obviously they're good HCA hospitals and Florida, but for some reason,
Speaker 4: the whole ethos there has not been the same in general.
Speaker 2: So I'm kind of intrigued by a couple of things
Speaker 2: you've said about wanting to improve outcomes, reduced costs, and
Speaker 2: enhance experiences, and you talk about five levers of change
Speaker 2: that the fun looks at, and let's go through all
Speaker 2: of these access, outcome, cost, speed, and friction that sounds
Speaker 2: like everybody's combined headache in healthcare. Tell us a little
Speaker 2: bit about those five levers.
Speaker 4: Well access. I think we all learned a lot about
Speaker 4: that during covid R. There is differential access and it's
Speaker 4: not just minority or city based. Obviously rural. The rural
Speaker 4: environment is very challenging a.
Speaker 2: Little bit of a healthcare desert.
Speaker 4: In some healthcare desert, you've got pharmacies closing, you have
Speaker 4: hospital that are a year and an hour and a
Speaker 4: half away from people. You have challenged hospital systems. I
Speaker 4: would say in suburbia and urban environments, hospitals are actually
Speaker 4: doing quite well in making a fair amount of money,
Speaker 4: but in rural far more challenged. So that is something
Speaker 4: that we're actually addressing in whatever our company is called
Speaker 4: main Street, which is focused on it's a oak Street
Speaker 4: maybe Village MD for the rural environment, but with a
Speaker 4: different business model, and the point is for them to
Speaker 4: actually own everything in those environments except for cute care
Speaker 4: hospital and try to keep people as much as possible
Speaker 4: out of the hospital, but provide a broader set of
Speaker 4: care opportunities to those in rural environments.
Speaker 2: So I have a vivid recollection of a television show
Speaker 2: called Northern Exposure. They wanted more doctors in Alaska, so
Speaker 2: the state of Alaska would pay for your medical school,
Speaker 2: but you had agreed to practice there for five years.
Speaker 2: It seems amazing that in the United States in twenty
Speaker 2: twenty four there are healthcare deserts. Why haven't states? And
Speaker 2: I know this is not your expertise, but it seems
Speaker 2: like states should have addressed this a long time ago.
Speaker 2: How is it possible in a modern era you could
Speaker 2: be two hours away from an emergency room. It's unthinkable,
Speaker 2: at least in the Tri state area. It's hard to imagine.
Speaker 1: Yeah, no, I agree.
Speaker 4: I'm the fact that they should be in setting primary care,
Speaker 4: paying for people's medical school that will go into primary
Speaker 4: care and go to rural markets, and there are some
Speaker 4: that are doing that. I think about virtualization though, because
Speaker 4: of one of the aspects of a main street or
Speaker 4: some other models we have care Bridge is that virtual
Speaker 4: care and wrap round care so much of this actually
Speaker 4: can be done virtually. You can have specialists in a
Speaker 4: network that don't you know, your best oncologist from MSK
Speaker 4: in New York City can be advising people in rural environments.
Speaker 3: Right, memorials locattering, Ye, yes.
Speaker 1: Memorials loancuttering exactly.
Speaker 2: Difference between virtual and wrap around how do they differ?
Speaker 4: Well? I think wrap around may mean that you have
Speaker 4: a connectivity locally, plus you have virtual care that extends
Speaker 4: what is available locally. But wrap round could be you
Speaker 4: have in Carebridge's case, you're you're managing what we call
Speaker 4: dual eligibles, which are those who have Medicaid and Medicare.
Speaker 4: They're the sickkest of the sick that are in long
Speaker 4: term services home based services, so they're in the home.
Speaker 4: Generally they're sick enough to have a caregiver and who's
Speaker 4: either a family member or a caregiver who's hired to.
Speaker 1: Help them out.
Speaker 4: And then you're supplying you know, nurses and mad and
Speaker 4: others that will they get to know these patients, but
Speaker 4: all virtually but end up you know, developing a relationship
Speaker 4: with the caregivers that have a you know, we have
Speaker 4: an iPad in the home with a button essentially, you know,
Speaker 4: like the nine one one button where you hit the button,
Speaker 4: as opposed to all of a sudden for every issue,
Speaker 4: sending that patient to the emergency room, which is wildly expensive,
Speaker 4: right and not constructive because often they get admitted and
Speaker 4: you know, and then all of a sudden you have
Speaker 4: a thirty thousand dollars expense. The reality is that button
Speaker 4: is going to a nurse that's on you know, on
Speaker 4: call or in a call center for a care bridge
Speaker 4: and or a main street that's taking care of that
Speaker 4: individual and actually knows knows the medical records, has gotten
Speaker 4: developed a relationship with the caregiver and the patient so
Speaker 4: they can walk through what are the issues to say
Speaker 4: mental health crisis, which is you know often is or
Speaker 4: get ahead of some of the challenges of wound that
Speaker 4: gets taken care of as opposed to in the er,
Speaker 4: you know, by somebody going to the home or getting
Speaker 4: them to another facility. So these are the things that
Speaker 4: it's just like long digital care management of individuals and
Speaker 4: the chronically ill are those that end up in the
Speaker 4: hospital most often.
Speaker 2: And you mentioned Carebridge, that's a company you have an
Speaker 2: investment in. It seems I'm so obvious. How do we
Speaker 2: get better outcomes and less expensive costs by intervening before
Speaker 2: they end up in an emergency room? Again, how has
Speaker 2: this not taken place before? Is that is that what
Speaker 2: care bridges business?
Speaker 4: Yes, and yes they mainish the sickness of this chronically
Speaker 4: ill in the home that are in that are dual eligibles,
Speaker 4: and that is what they do. They develop a relationship,
Speaker 4: they wrap around, but they it's all about part of
Speaker 4: this is financial alignment. They have contracts with the health
Speaker 4: plans to take care of these individuals. They get paid Basically,
Speaker 4: they have full responsibility for the cost of care for
Speaker 4: these individuals, so they're highly incentive to take.
Speaker 3: Good care of them, preempt those emergency.
Speaker 4: Those emergencies rooms. The two most expensive things are in
Speaker 4: healthcare are rising hospital costs, which are up like twenty
Speaker 4: percent this year, and drug costs, So if you can
Speaker 4: manage drug compliance better, and most importantly the easiest but
Speaker 4: not easy thing to do is to keep people out
Speaker 4: of the hospital appropriately. Nobody wants to be at the hospital.
Speaker 4: I mean, this is the thing I always hospitals always
Speaker 4: talk about utilization management. You're keeping people out of the hospital. Well,
Speaker 4: that's actually our job is do preventative care and keep
Speaker 4: people from using the most expensive resource in America.
Speaker 2: And it's always astonishing to when you read I think
Speaker 2: medical errors are the third most common cause of fatalities
Speaker 2: in the United States. That's a stunning number. And I
Speaker 2: guess why none of us really want to be in
Speaker 2: a hospital this weekend.
Speaker 4: It's dangerous to be in a hospital. It is dangerous.
Speaker 4: Think about the infection rate in a hospital staff, and yes,
Speaker 4: it is actually dangerous to be in a hospital. So
Speaker 4: there's better be a good reason to be there.
Speaker 2: So we talk about access outcome. I'm kind of intrigued
Speaker 2: by the focus on cost, speed, and friction because all
Speaker 2: three of those seem to apply to both healthcare and
Speaker 2: financial technology. You mentioned they both live on old legacy systems.
Speaker 2: They're not nearly as cutting edge as they should be.
Speaker 2: Is that how you ended up being both a healthcare
Speaker 2: and a fintech investor?
Speaker 4: Certainly between insurance and payments and rev cycle, we thought
Speaker 4: it was in two thousand and two and obvious place
Speaker 4: to go. And having gone into biotech early and then
Speaker 4: tech enabled you know, software using leveraging the Internet in
Speaker 4: healthcare early, I just felt like payments in fintech I
Speaker 4: wanted to be early, like that was an area you
Speaker 4: could just tell the tailwinds were there. And so we
Speaker 4: came in two thousand and two before anybody knew what
Speaker 4: fintech was, and we were focused initially on the sort
Speaker 4: of prepaid underbanked market.
Speaker 2: And prepaid an under bank.
Speaker 4: Underbanked being sixty at that time, sixty million people in
Speaker 4: America did not have checking accounts or credit or debocards, right,
Speaker 4: and think about what you can't do, okay, and you
Speaker 4: had the advident of the internet, you can buy things online.
Speaker 4: You could and reserve a hotel room, you couldn't rent
Speaker 4: a car, like all these things that change your life.
Speaker 1: So by investing in netspend, which is one of the.
Speaker 4: First prepaid debit cards, people could actually do those things.
Speaker 4: They could buy online, they could reserve a hotel room,
Speaker 4: they could rent a car. I mean, these are game
Speaker 4: changing things to someone.
Speaker 1: So that was.
Speaker 4: Exciting because we were changing people's lives and giving them access,
Speaker 4: you know, democratizing credit effectively.
Speaker 2: So it's interesting you started in fintech in two thousand
Speaker 2: and two, because I recall former fitcham and Paul Volker
Speaker 2: said only half in Jess and I want to say
Speaker 2: it was twenty eleven, twenty twelve. You know, what innovation
Speaker 2: is there in the financial space? Other than the ATM,
Speaker 2: nothing's happened, And it seems like that really isn't true.
Speaker 2: There's been a ton of innovation in the financial space.
Speaker 2: Tell us some of the other fintech investments made.
Speaker 1: More recently. And fraud. Just think about fraud as being
Speaker 1: an area.
Speaker 2: Of constant, constant.
Speaker 1: Battle arms race.
Speaker 4: It is an arms race, and well even more so
Speaker 4: when you think about what happened was in the payments
Speaker 4: world you had card present right, you're swiping at the
Speaker 4: point of sale. And then we had the Internet come
Speaker 4: along and they had virtualization of payments. Then fraud exploded, right.
Speaker 1: And now with.
Speaker 4: You know jen ai and obviously deep fakes, you have
Speaker 4: person at present, So you've got a whole different level
Speaker 4: of fraud that is being experienced right now, right where
Speaker 4: somebody's mimicking your voice for a call right.
Speaker 2: Literally, just had this conversation yesterday with my head of compliance.
Speaker 2: It was a I don't remember it was Gizmoto or
Speaker 2: one of those sites that talks about the fake calls
Speaker 2: you're getting supposedly from Google, who will never really call you.
Speaker 2: Assume any foone call you're getting it is a fake.
Speaker 2: But the AI agent on the other side sounds so realistic.
Speaker 2: Always ask them to sing a song and that was
Speaker 2: that was the solution, and AI app will sing it
Speaker 2: until or whatever silly thing you ask. But it just
Speaker 2: seems like the ability to impersonate people is just getting
Speaker 2: better and better. Who's going to win this arms race?
Speaker 4: Yeah, Well, I think it's just going to be a
Speaker 4: continual battle of they'll create new ways to implement fraud
Speaker 4: and then we'll create solutions against that fraud, and so
Speaker 4: it is I think will be a perpetual and continual battle.
Speaker 4: We have companies like feeds I and Prove that are
Speaker 4: focused on that area, and it.
Speaker 2: Be feeds I focuses on risk management and combating fraud.
Speaker 4: Combating fraud for Yes and Prove is that when you
Speaker 4: get the pin and you're you're putting, you're doing sort
Speaker 4: of double authentication. They're the ones that are integrated in
Speaker 4: the operating system of phones and effectively are giving you
Speaker 4: that number that pen when you're typing in that second
Speaker 4: number to authorize a transaction. So so we have a
Speaker 4: number of companies, probably seven or eight in that space.
Speaker 4: Other companies that do If you think about the America
Speaker 4: and where we are here in terms of credit payments,
Speaker 4: think about La Latam is two decades behind us, and
Speaker 4: so we're seeing a number of opportunities in fintech.
Speaker 2: And two decades behind.
Speaker 4: Yeah, two decades behind, which actually will probably be an
Speaker 4: advantage and they will leap frog us because they don't have.
Speaker 2: These they'll start from scratch.
Speaker 4: Those start from crutch and scratch. And if you look
Speaker 4: at Brazil, they've created something called Picks, which they built
Speaker 4: for two million dollars, which is amazing by their central bank,
Speaker 4: and it's real time payments, and effectively it's a protocol
Speaker 4: and effectively allows bank to bank authentication. So if you
Speaker 4: think about ACCH and your cash account to somebody else's gay,
Speaker 4: it is incredibly complicated in the US to do an
Speaker 4: ACCH transfer your bank account to another bank account.
Speaker 1: Right, there's this takes forever.
Speaker 2: I wanted to address that. I grabbed my phone and
Speaker 2: I'm opening the folder with the fin tech apps on it.
Speaker 2: So Venmo is the easiest thing in the world to
Speaker 2: use just to send money to someone else. But I
Speaker 2: did something in South American Colombia. I had an old
Speaker 2: truck rebuilt in Colombia and I was using remitly and
Speaker 2: World remit to send as long as it was less
Speaker 2: than ten thousand dollars at a time. Internationally, it was
Speaker 2: like click click, click done. That was an unthinkable nightmare.
Speaker 2: I don't know five years ago, ten years ago, I'm
Speaker 2: looking at at the t D and the Schwab app,
Speaker 2: I'm looking at the chase. I mean, just the amount
Speaker 2: of things you could do on your phone. So it
Speaker 2: feels like the innovation.
Speaker 4: Certainly, the innovation from the consumer experience is there. It's
Speaker 4: ironic though, because if you think about Venmo, everything runs
Speaker 4: on on the credit card rails right now, right, I
Speaker 4: mean that's actually what's happening on the visa rails, the
Speaker 4: master card rails or MX and the reality is that
Speaker 4: because it scur it exists.
Speaker 1: Right, and it's easy.
Speaker 4: So I mean think about Apple, right, they run on
Speaker 4: you're putting your credit card in for Apple.
Speaker 2: Pay, right, I just drop the phone on it and
Speaker 2: that's right, that goes right through the credit So that's.
Speaker 4: If you think about Latim, that's an expensive option. And
Speaker 4: so what they've done in Latam has created a pretty
Speaker 4: friction free visa like rails, but the very cheap like
Speaker 4: sense pennies like virtually no cost. So that is then
Speaker 4: that is probably taken like forty percent of credit card
Speaker 4: and debit card transactions.
Speaker 2: Really and wasn't there a couple of things done over
Speaker 2: cell phones in parts of Africa where they didn't have
Speaker 2: a credit card system and just you know, necessity being
Speaker 2: the mother invention came up with some things. So my
Speaker 2: question is are all of these various things secure or
Speaker 2: you know, what is the challenge building the next generation
Speaker 2: what's going to replace I think will anything replace credit cards?
Speaker 4: Well, I think real time payments will replace credit cards.
Speaker 4: But you are going to build costs on top of it,
Speaker 4: because if you're talking about large B to B payments, right,
Speaker 4: you're still going to be talking about something that needs
Speaker 4: and even larger B two C payments. There is more
Speaker 4: fraud capability that needs an identity authentication capabilities that need
Speaker 4: to be built on top of it. There will be
Speaker 4: great opportunities for companies for us to invest in that
Speaker 4: will create B to B opportunities on top of picks
Speaker 4: and on top of other infrastructures that are being built
Speaker 4: in Latam or India or Africa.
Speaker 2: H really kind of fascinating. So, given these two areas
Speaker 2: that you focus on and the track record you guys
Speaker 2: have put up, I just wanted to mention again you
Speaker 2: were named one of the top ten venture farms of
Speaker 2: twenty twenty four and a number of other accolades last year.
Speaker 2: How does this affect the deal flow you see in
Speaker 2: the companies you look at. Do you have your own
Speaker 2: space and that's what you drill into or are you
Speaker 2: guys a little broader thinking about a variety of different
Speaker 2: types of companies.
Speaker 4: For example, we define fintech very broadly. If that is
Speaker 4: e commerce infrastructure, you know, it's fraud and identity, it
Speaker 4: is payments, it is general infrastructure. So it's fairly broad
Speaker 4: and to how we look at it. I think the
Speaker 4: as we think about opportunity in the sector, think of
Speaker 4: us as starting things or backing an entrepreneur who has
Speaker 4: started something, because we have a whole thematic approach to
Speaker 4: an area, and I'll talk about something we just did
Speaker 4: all the way up to a classic ABC round, right,
Speaker 4: And we'll even do an occasional buyout or two where
Speaker 4: we think there's huge growth opportunities if we invest in
Speaker 4: the tech portion of it. So something we did recently
Speaker 4: I think is emblematic of what we're doing more lately
Speaker 4: with a two billion. Our most recent fund was two billion,
Speaker 4: and we backed the individual Dave Clark out of Amazon,
Speaker 4: who built the for twenty two years, built all the
Speaker 4: supply and logistics chained at Amazon, and he brought his
Speaker 4: chief scientific officer and a number of people from Amazon
Speaker 4: and others that he's worked with. And when we announced
Speaker 4: this company, twelve hundred people that day submitted resumes. Wow
Speaker 4: to them it was it was extraordinary and speaks to
Speaker 4: his reputation. And the idea is that we will build
Speaker 4: a Jenai software native AI software platform that will incorporate
Speaker 4: some of the supply chain software boutique best to breed
Speaker 4: software systems that are out there that constitute the supply chain,
Speaker 4: because if you are in Amazon or someone else, you're
Speaker 4: working with twenty different vendors to complete your supply chain,
Speaker 4: and the reality is you really want that integrated in
Speaker 4: one infrastructure. And so their plan is to basically build
Speaker 4: the supply chain infrastructure.
Speaker 2: And to end one company for software from when it
Speaker 2: leaves this place to what ends up that place and
Speaker 2: all the quantitative metrics and tracking and everything that with it.
Speaker 1: Huh really really, So we committed one hundred million to that.
Speaker 2: Oh no kidding. Oh so that's you're pretty that sounds
Speaker 2: like a pretty big bet.
Speaker 1: Yeah, we're all in.
Speaker 4: But yes, we're doing more of the one hundred million
Speaker 4: plus investments seventy million dollar investments because we want concentrated
Speaker 4: bets in the areas that are most exciting to us
Speaker 4: with the best entrepreneurs.
Speaker 2: So I only have you for another ten or fifteen minutes,
Speaker 2: and before I get to my favorite questions I ask
Speaker 2: all of my guests. I gotta throw a curveball at you, Okay,
Speaker 2: which is you know, normally at this point in a
Speaker 2: conversation with a VC, we talk about you've had seventy
Speaker 2: exits and fifteen IPOs, and but you're also the first
Speaker 2: Lady of Connecticut. You're married to Ned Lamont, the governor
Speaker 2: of Connecticut. Kind of an unusual role for first ladies
Speaker 2: being a VC. Tell us how you juggle these two roles.
Speaker 2: It's it's You're the first VC I've spoken to who's
Speaker 2: also in a state house.
Speaker 1: Right, it is unusual.
Speaker 4: The great news is that there is no expectation for
Speaker 4: the first Lady of Connecticut either. There is no established role,
Speaker 4: and so I'm really just a partner to my husband
Speaker 4: as I would be in terms of just their support
Speaker 4: and guidance. But I do campaign with him. I go
Speaker 4: on week you know, on weekends, we do things together.
Speaker 4: But he's very much running the state of Connecticut. Well,
Speaker 4: I am doing my thing, you know, during the week,
Speaker 4: and then we come together in Connecticut and Greenwich during
Speaker 4: the weekend.
Speaker 1: But it's been I mean, it's fascinating. He loves the job.
Speaker 4: It's I you know, I'm biased, but I think he's
Speaker 4: done a great job for Connecticut as a businessman himself,
Speaker 4: but somebody who has a you know, his social conscience.
Speaker 4: So it's been fun to watch because he does love
Speaker 4: the job and.
Speaker 2: Really really interesting. All right, let's jump to our favorite
Speaker 2: questions that we ask all our guests, starting with since
Speaker 2: since you mentioned you like to uh spend the weekends
Speaker 2: with your your husband the governor, what do you guys
Speaker 2: do on the weekends? What are you watching listening? What's
Speaker 2: keeping you entertained?
Speaker 1: Right?
Speaker 4: Yukon basketball? I can't wait to have it back. So
Speaker 4: women and men are going to be amazing this year.
Speaker 4: So and they I have been obviously, the men have
Speaker 4: won two years in a row.
Speaker 2: Huskies have a great team. They've been they've been winning for.
Speaker 1: A long time, amazing.
Speaker 2: And the women's team has done really well. Also the past.
Speaker 1: Gina is incredible.
Speaker 4: I mean, the fact that they had five injured players
Speaker 4: and got into the basically the final four was incredible.
Speaker 4: So between Gino Oriama and Dan Hurley to the best
Speaker 4: coaches in the country. So that's been super fun. We
Speaker 4: go to games and we and we watch on weekends,
Speaker 4: but we're we're I don't know, I don't know if
Speaker 4: I'm an athlete, but I love sports, and we love sports.
Speaker 4: We play golf and tennis and hike and it's being
Speaker 4: out ski and being outside as much as possible.
Speaker 1: Uh.
Speaker 4: And he watches and you know, he's been a long
Speaker 4: suffering Jets fan. We're hoping the Jets are back, and
Speaker 4: I having to be a Pack fan being from Wisconsin.
Speaker 2: So really interesting. Tell us about your early mentors who
Speaker 2: helped shape your career.
Speaker 4: Yeah, there was an individual, Jerry Gallagher. I'm from Wisconsin.
Speaker 4: He was from Minnesota and he ran for a prior firm.
Speaker 4: He ran the retail investing and was a brilliant investor.
Speaker 4: I mean it was somebody at Donaldson, Luff and Jen
Speaker 4: Ratt in the early days. He was the retail analyst
Speaker 4: and he actually invented the same store sales metric.
Speaker 2: Oh no kidding.
Speaker 4: If you can imagine, people were just saying, oh, that
Speaker 4: company's growing one hundred percent a year. They didn't know
Speaker 4: if they'd added one hundred store you know, double number
Speaker 4: of stores. But yeah, so he actually invented that. He
Speaker 4: joined us and invested in well, there was a filing's
Speaker 4: basement Whole Foods Amazon Whole Foods, which we sold Amazon
Speaker 4: Dick's Sporting Goods office depot. It was just a pfang Jambajews,
Speaker 4: I mean, just an unbelievable track record, the best retail
Speaker 4: investor in the country. And he taught me a ton.
Speaker 4: So he was the first person, when I was twenty
Speaker 4: seven years of age who said to me, you're focused
Speaker 4: on the idea. You're not focused on the CEO enough,
Speaker 4: You're not focused on the people like you have got
Speaker 4: to raise your bar on CEOs. And of course it's
Speaker 4: of course it's I mean, it's so obvious it's all
Speaker 4: about the people. But I think people you do get
Speaker 4: enamored with trends, secular trends and ideas, and ultimately it's
Speaker 4: it was the most important advice anybody ever gave me,
Speaker 4: because it's it's all about the CEO at the end
Speaker 4: of the day, and the team they can attract and
Speaker 4: how they treat people. It's and I think it was
Speaker 4: very much golden rule, you know, he was. Some might
Speaker 4: have considered Jerry old fashioned, but the reality is that
Speaker 4: that old fashioned message just cycles back and every crazy
Speaker 4: cycle yeah have with entrepreneurs, and that is you know,
Speaker 4: just obviously do the right thing, you know, and treat
Speaker 4: people like you'd like to be treated, and be kind
Speaker 4: and yet you know, be be direct of you tough.
Speaker 2: I don't remember which VC it was that said the
Speaker 2: same thing that you just said about backing the team
Speaker 2: and the entrepreneur, not the idea, but to drive the
Speaker 2: point home. Hey, each of these companies that have had
Speaker 2: a successful exit, they've pivoted five times and however it
Speaker 2: works out. It's never the initial idea, it's always the person.
Speaker 2: And I never really thought about that until right. It's
Speaker 2: if you're betting on the idea, your you're three iterations
Speaker 2: away from where it's going to end up.
Speaker 4: Yeah, and the general idea and secular trend maybe right,
Speaker 4: but actually the business model is wrong. So getting the
Speaker 4: business model is so right is so critical.
Speaker 2: Really really interesting. Let's talk about books. What are some
Speaker 2: of your favorites?
Speaker 3: What are you reading right now?
Speaker 4: Well, original favorite was To Kill a Mockingbird, and but
Speaker 4: that like influenced my sense of social justice. And then
Speaker 4: it's probably the Robert Massey books. And you know, I've
Speaker 4: never been to Russia, but I've been fascinated by you know,
Speaker 4: Peter the Great Nicholas and Alexandra Catherine the Great. I
Speaker 4: mean one, it's so if you look at what's going
Speaker 4: on in Russia now, same exactly like you understand cultures, right,
Speaker 4: I mean, it's sort of like understanding history and culture.
Speaker 4: Don't It doesn't change that much, right, I mean, it's
Speaker 4: a It is a that is a country that understands
Speaker 4: suffering and likes autocrats basically, you know.
Speaker 3: They like Not a coincidence, right.
Speaker 1: Yeah, yeah, not a coincidence. So yeah.
Speaker 4: And then recently The Money Trap, written by a friend
Speaker 4: of mine of Lokes Soma, is a fascinating book. He
Speaker 4: was the head of soft Bank during the crazy period
Speaker 4: in North America. Yeah, and he actually had never written
Speaker 4: a book. He went to the Creative writing program Okay,
Speaker 4: got his visa, was able to stay in America, went
Speaker 4: to the Creative writing program in New York City and
Speaker 4: and wrote this book. And it's absolutely beautifully written and
Speaker 4: it's fascinating. So I highly recommend it Money Trap.
Speaker 2: I'm gonna I'm gonna put that on my list. If
Speaker 2: you're you mentioned books about Russian I know you're talking
Speaker 2: more historically. If you haven't read read Notice.
Speaker 3: By I know Bill and yes, so you did.
Speaker 2: Yeah, astonished. It's it reads like it's fiction and it's
Speaker 2: such a page turner. All right, Our final two questions,
Speaker 2: What sort of advice would you give a recent college
Speaker 2: grad interest in a career in either venture investing, healthcare, fintech?
Speaker 2: What would you would you how would you advise them?
Speaker 4: They have to go work inside companies, and they should
Speaker 4: go work in a startup, in an early stage company,
Speaker 4: and maybe mid stage, and definitely a larger legacy company,
Speaker 4: because they need to understand business. I mean when I
Speaker 4: read the New York Times Business section, now, I think
Speaker 4: these people have never been in business. And obviously Bloomberg
Speaker 4: specializes in it, and so it has a lot of
Speaker 4: reporters that deeply understand it and respect it. But I
Speaker 4: think that you can't write about something you don't haven't
Speaker 4: actually lived at all and truly understand what is. They're
Speaker 4: obviously things that are very flawed in business, and it's often,
Speaker 4: particularly in the early stage, extremely chaotic, but it is
Speaker 4: what drives our economy, which provides jobs for people and
Speaker 4: employees people and allows them to pay their bills and
Speaker 4: support all our great social programs.
Speaker 1: So it's important to understand and.
Speaker 2: Our final question, what do you know about the world
Speaker 2: of investing today you wish you knew back in the
Speaker 2: nineteen eighties when you were first getting started.
Speaker 4: It's an interesting question because I, you know, and maybe
Speaker 4: because I have a tough, long memory, but I feel
Speaker 4: like I only remember the good things. I think, you know,
Speaker 4: knowing that large secular changes are the most important thing
Speaker 4: that drive investment waves and right and and ultimately build
Speaker 4: great companies, just focusing on those. But I feel like
Speaker 4: I ended up actually doing that well, you know, picking
Speaker 4: the secular wave that made sense and getting ahead of it,
Speaker 4: but not too far ahead of it.
Speaker 2: I was going to say you did that well, but
Speaker 2: you were You were also early in a lot of
Speaker 2: big secular trends.
Speaker 4: Yes, So I would say that ended up working out well.
Speaker 4: You can't be Being too early is a killer, right
Speaker 4: right in investing, So that worked out well. But I
Speaker 4: would say, you know, in general, I don't sweat the
Speaker 4: small stuff. You know, get the large things right and
Speaker 4: the rest of it will take care of itself. So
Speaker 4: I would only caution those that are starting out now
Speaker 4: in the investing world, or frankly in any career, to
Speaker 4: just all those things that seems so important that are
Speaker 4: so small during the day, Like just remember that, you know,
Speaker 4: think about yourself forty years from now, what's going to matter,
Speaker 4: what will have mattered to you, what will matter to
Speaker 4: your success, and just focus on those things and don't
Speaker 4: focus on all of the petty small things that it
Speaker 4: may go on wrong or the people around you, you know.
Speaker 4: And then otherwise, just stay away from toxic people and
Speaker 4: make sure you carefully work with people you love and respect.
Speaker 4: And I think in general I've done that, but I
Speaker 4: think there are times where I would have walked away.
Speaker 4: I would have started OKHCFT so much sooner, and that
Speaker 4: would be like the one change in my career that
Speaker 4: I would have made.
Speaker 2: Huh really interesting. Thank you Annie for being so generous
Speaker 2: with your time. We have been speaking with Annie Lamont,
Speaker 2: co founder and managing partner at okhc FT. If you
Speaker 2: enjoy this conversation, well, be sure and look up any
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Speaker 2: I would be remiss if I did not thank the
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Speaker 2: Anna Luke is my producer, Sean Russo is my head
Speaker 2: of research. Steve Gonzalez is my audio engineer. Sage Bauman
Speaker 2: is the head of all podcasts at Bloomberg. I'm Barry Ritoltz.
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