Taco Joints to Video Games to Healthcare: Sterling Lanier’s Journey to Startup Success

Posted July 12, 2017
By Ugonna Akuba
MATTER

“The things that I was trying the hardest at failed, and the accidental one worked out.”

At MATTER’s recent Tales from the Trenches, Sterling Lanier, cofounder and CEO of Tonic Health, sat down with Outcome Health CEO Rishi Shah to reflect on his journey through multiple companies that ultimately led him to Tonic Health, the medical data collection company. Tales from the Trenches is produced with Outcome Health and Pritzker Group Venture Capital. Read our summary or watch highlights from the event.

Sterling’s first venture was a burrito joint at Duke University that he founded a few weeks before graduation. The restaurant is still a popular spot at Duke today. While there were bumps along the way, “it was a really good lesson in scrappiness,” Sterling said.

Because he had little money and few resources, Sterling had to scrape together what he could in order to make the burrito joint work. To design and build its brick and mortar storefront, Sterling solicited the skills of architecture students and day laborers, offering free food in return. This experience in making ends meet without an overarching strategy was a valuable precursor to Sterling’s time at Tonic, as he was forced to figure out a way to make ends in an extremely resource-constrained environment.

In the 20 years since founding his humble first venture, Sterling has started more than half a dozen businesses, ranging from a point-of-purchase display business, to a prenatal pill company, to a firm that ran corporate teambuilding events. When Rishi asked Sterling for general insights gleaned from founding so many different kinds of businesses, he suggested that all of entrepreneurship is sales.

“Entrepreneurship is 100% about selling,” he said. Whether selling his products, ideas, or himself, Sterling quickly learned the importance of persuasion – whether he was selling to clients, partners, employees, or customers.

Sterling also stressed the importance of filling an existing market need: “You don’t build an amazingly eloquent solution for a problem that doesn’t exist.”. That’s a challenge with which healthcare startups consistently struggle. “A lot of them have amazingly gorgeous products,” he said, “but there is no real burning need.”

While Tonic Health has grown into a leader in medical data collection, Sterling had no experience in the field prior to Tonic: most of his previous experience was in the video game industry. “We didn’t have any experience in healthcare and, ironically, that turned into our greatest strength,” Sterling said.

Sterling had no preconceptions of the industry and was able to look at it with a fresh perspective, which allowed him to come up with insightful and innovative solutions that solved truly pressing problems.

Tonic Health began with a simple observation: patients at doctor’s offices everywhere spend a lot of time filling out dull, pen-and-paper medical surveys and forms on clipboards. It’s a hassle. And Sterling saw an opportunity. He used lessons learned from his time in gaming to develop crisp, user-friendly menu screens and incorporated gamification principles to encourage patients to finish filling out their medical forms.

Tonic is now the leading electronic patient data collection and payments platform among large enterprise health systems, payers, and pharmaceutical companies. Importantly, Tonic is Apple’s exclusive partner for patient data collection globally.

Sterling has applied lessons from the gaming and entertainment world to build Tonic into the industry standard for automating patient data collection at every point along the care journey, which taught him the importance of learning from your customers.

“Out of pure necessity, we had to be customer centric,” Sterling said. He relies on feedback and input from his customers, tweaking what data his platform requested, the user interface, and more, to ensure Tonic provides something its end-users and customers actually need.

Sterling’s focus on solving a true industry problem, incorporating customer feedback, and learning how to sell his ideas as much as his product has made Tonic Health the force it is today.





Dr. Jordan Shlain Brings 5-star Service to Healthcare

Posted June 26, 2017
By Paige Edmiston
Marketing Associate – MATTER

When a patient suggested he build a software solution, Dr. Jordan Shlain was skeptical.

“Just because I’m a doctor in Silicon Valley doesn’t mean I have to start a software company.”

Fast forward to today, and Jordan is founder of the fast-growing software company HealthLoop. HealthLoop collects individual-level data to enable doctors to make a big difference in the lives of patients. At our most recent Tales from the Trenches – a series we produce with Outcome Health and Pritzker Group Venture Capital – Jordan reflected on his journey from primary care physician to Silicon Valley entrepreneur. Watch the full talk here or the highlights below:

In the late 1990s, Jordan was a young doctor in search of a job. It was a particularly tough time to find a job as a physician in San Francisco. One day – while contemplating his lack of job options – Jordan wandered into a cafe at the Mandarin Oriental Hotel. Out of curiosity, he walked up to the hotel’s concierge and said, “Excuse me. Who do you call when someone at your hotel gets sick?”

“Who are you?” she asked.

“I could be the guy you call when someone gets sick.”

The concierge responded, “With all due respect, this is a 5-star hotel and everything we do here is 5-star service. You are a doctor, so you’re probably 5-star smart, but your industry provides 1-star service.”

“Well, why don’t you teach me how to provide 5-star service?” Jordan asked.

With help from the Mandarin Oriental Hotel concierge, Jordan learned 5-star service, becoming the doctor for San Francisco’s luxury hotels. When a guest required medical assistance, Jordan was the first and usually only call hotels like the Mandarin would make. When the dot-com bubble burst around 2000, Jordan’s business dried up. But he had learned something important: people will pay for a good experience.

“In medicine, we think our healthcare is paid for because we pay for insurance. But insurance is a financial hedge, not a care instrument. You have insurance in case something bad happens.” Dr Shlain joked, “But I’m not insurance. I’m assurance.”

Following the crash, he rebuilt his business, Private Medical, as a subscription model. Well-off patients paid an annual fee for “5-star” healthcare, which includes 24-hour service, house calls, and access to the nation’s top specialists.

Jordan’s newest business, HealthLoop, is democratizing this concierge-style care. The idea began with a spreadsheet.

When one of his patients ended up in the hospital with a preventable pneumonia, Jordan was determined to find a better way to track his patients’ health and intervene when needed. He began to contact his patients with quick, daily questions about changes in their health status. Their responses, which he tracked in a spreadsheet, helped Jordan know which patients he needed to follow up with.

Eventually, Jordan decided to automate this daily communication. An early prototype sent one-question surveys to each patient. At the end of each day, Jordan could see a graph of how all of his patients were trending.

Other doctors liked the idea – and so did investors.

Jordan’s spreadsheet has grown into a market-leading patient engagement tool. The software automates condition-specific check-ins with patients, allowing HealthLoop to collect data at the individual level. When a patient’s health worsens, the software notifies the physician – bringing Jordan’s 5-star, communication-centered care to patients outside of the concierge model.

Jordan continues to care for his patients as a full-time primary care physician. “I never wanted to be the CEO because my best value is as a doctor. Being a doctor is soul food for me.”

To learn more about Jordan, read this feature in the New York Times or view his LinkedIn profile.





The Accidental Entrepreneur: Brad Smith’s Journey From Politics to Business

Posted May 17, 2017
By Paige Edmiston
Marketing Associate – MATTER

Entrepreneurs often follow non-linear career paths. Brad Smith, founder of Nashville-based Aspire Health, has traveled a particularly winding road.

In high school, Brad thought he’d be a trauma surgeon. As an undergraduate at Harvard, his interests evolved to include politics, and in his first job out of college, he worked on the campaign of Tennessee Senator Bob Corker. Brad went on to research policy at Oxford, work for the governor of Tennessee, and establish an education nonprofit.

“The last place I thought I’d end up was at an event for entrepreneurs speaking about a company I founded,” he joked to a room full of entrepreneurs at MATTER’s Tales From the Trenches, the series we produce with Outcome Health and Pritzker Group Venture Capital. In an interview with Outcome Health CEO Rishi Shah, Brad reflected on his winding path to founding palliative care company Aspire Health. Watch the highlights:

The company is a house call physician service for patients facing serious illnesses. Brad first learned about this model of care from his brother, who had taken a year off medical school to learn from leading experts in palliative care.

Unlike patients on hospice, patients who opt for palliative care services like Aspire Health haven’t necessarily made the decision to forego curative care.

“If you ask a doctor, ‘Would you be surprised if this patient passed away in the next year?’ and the answer is no, then they’re a good fit for palliative care,” explained Brad. “If you’re 86, your goal might be to make it to your granddaughter’s graduation in a few months. If you’re 45 facing metastatic cancer and have three kids, your goal is probably to fight as hard as you can, even if there is only a 5% chance of survival.”

While patients and their families can’t control their diagnoses, palliative care offers them the flexibility to decide how they want to experience what happens next. For providers and payers, the model presents an opportunity to improve quality of care while simultaneously reducing expensive ER visits and hospital admissions.

“As someone not in healthcare at the time, I wondered, if this model is working so well – and clinicians and patients both like it so much – why isn’t it happening?” said Brad.

One big reason: Medicare Fee-for-Service does not pay for the type of service that Aspire Health provides. “If they did, there would be a lot of others in this space,” Brad said. “For us, the question was not whether or not the service works. It was: will anybody pay us for the service so we can prove it works?”

This curiosity led to a business plan, and Brad founded Aspire Health with guidance from his cofounder, former US Senate Majority Leader Dr. Bill Frist. Brad met Senator Frist after returning from Oxford to his home state of Tennessee, through their mutual friend and colleague Senator Bob Corker. The two men’s friendship eventually led to a business partnership. Together, they formulated a strategy to sell palliative care services into health plans.

Brad’s first attempts to sell into a health plan failed – miserably. The company had mispriced their services and their first potential customer walked. “There were a lot of moments in the early days of the company where I thought, am I in over my head?” he recalled.

Aspire Health has come a long way. The company now operates in 22 states and has raised over $50 million, most recently in a $32 million Series D investment led by GV (formerly Google Ventures).

Brad attributes this success to the nexus between the company’s business model and its deep mission. “We have the privilege to walk with people through a really difficult part of life,” he said.

The political-insider-turned-entrepreneur is committed to changing how patients across America experience serious illness. The work has changed Brad, too. He reflected, “Do I live my life like I want to live it? Because one day I will be like our patients. It makes you think.”

Interested in aging? MATTER’s Healthy Aging Immersion is accelerating innovation in the space. The next event in this series is Wednesday, May 31. Learn more and register.

Our next Tales From the Trenches is Wednesday, May 24 and features Dr. Jordan Shlain of HeathLoop. Learn more and register.





Live To Fight Another Day – and Other Wisdom From Jellyvision CEO Amanda Lannert

Posted April 14, 2017
By Paige Edmiston
Marketing Associate – MATTER

“I remember exactly where I was sitting when I realized we had to shutter the company.”

At age 28, Amanda Lannert was named president of Jellyvision, then an interactive gaming company best known for YOU DON’T KNOW JACK. Six months later, she had to lay off most of the company’s employees – herself included.

“I wrote a severance letter to Amanda, from Amanda,” she said.

At our most recent Tales from the Trenches event, Lannert joined MATTER CEO Steven Collens in a conversation about getting knocked down, bouncing back up, and seeing the humor along the way. She advised, “Take the lessons, but not the grief, and live to fight another day.”

Watch the event highlights here:

Lannert did just that. When Jellyvision decided to rebuild, she returned – eventually becoming CEO. Under her leadership, Jellyvision has emerged as the global leader in helping employees at big companies navigate complex benefits choices. Last year alone, the company had 850 enterprise customers and 14 million employees on the platform, and they helped orchestrate $91 billion worth of health insurance premiums.

Jellyvision experimented with multiple applications for its technology before making the big pivot from building virtual game show hosts to virtual benefits advisers. The company’s communications and creative expertise – gained from its previous run in the entertainment world – proved invaluable in a space consumers often found confusing and boring. Today the company combines behavioral science, cutting-edge technology, and purposeful humor to help people make better benefits choices.

“Millennials would rather clean toilets than choose their benefits. But it’s important. It can mean a massive financial difference for your family,” Lannert said.

In addition to shaking up the benefits marketplace, Jellyvision is routinely named one of the best places to work in Chicago. The secret to maintaining a great culture, Lannert said, is that culture doesn’t come from the CEO or senior leadership. “Culture is how people treat each other day in and day out.”

This may be true – but having a fun, funny, interesting, and interested leader like Lannert certainly doesn’t hurt.

For more on Amanda Lannert, see her LinkedIn. Our next Tales from the Trenches is Wednesday, April 26, from 5:30 – 7:30pm, featuring Brad Smith of Aspire Health. Learn more and register here.

 

Failing Forward: Paul Magelli’s Non-linear Route to Success

Posted January 17, 2017
by Devon Leichtman
MATTER Associate Marketing Manager

“I don’t necessarily like winning. But I do hate to lose.”

So said serial entrepreneur and founder of Apervita Paul Magelli at our recent Tales from the Trenches event. For someone who launched his first business selling fireworks at 10 years old, clearing five figures in the process, Magelli is more acquainted with failure than you’d expect. He opened up about these failures – and his successes – to moderator Rishi Shah and the gathered crowd of healthcare innovators at MATTER.

“I don’t necessarily like winning. But I do hate to lose.”

Apervita, which raised $18 million in 2015, has created a marketplace that allows analytics developed at one health system to be used by other systems. Magelli compared Apervita’s business model to Amazon’s Kindle, saying “the most successful way to reach thousands, or even millions, in any field is to create a marketplace.” While he took a traditional path to founding and funding Apervita, his perspective on his journey is anything but standard.

Tales From The Trenches Paul Magelli of Apervita YouTube

When asked what sets Magelli apart from other aspiring entrepreneurs, his response had nothing to do with entrepreneurial drive or a knack for building a great team. “I probably just have more scars,” he said with a smile, referencing his years of arduously building software and telecommunications businesses through trial and, more importantly, error. “The great news is that you can make a lot of mistakes running companies,” he joked. “You just need to learn from those mistakes.”

“The great news is that you can make a lot of mistakes running companies”

At this point, Magelli knows his weaknesses. Tales From The Trenches Paul Magelli of Apervita YouTube01I am not an original thinker,” he told Shah. “But this has taught me the magic of forming a good team.” Failure has taught Magelli that his strength lies in being the face of his company, rather than being the idea generator. Through years of failures along the path to building his previous companies to great successes, he learned to work with “people who want to do it again and again and again.”

“Creating something out of nothing sticks with you,” he explained.

Conventional wisdom often says successful businessmen manage to avoid failure. In the spirit of true entrepreneurship, Magelli instead embraces it, learning from experiences to ultimately build great companies. Sun Tzu got it wrong: making mistakes can absolutely create the certainty of victory, as long as you learn from those mistakes to build stronger teams and companies.

For more on Paul Magelli, see his LinkedIn. Our next Tales from the Trenches is Thursday, January 26, from 5:30 – 7:30pm, featuring Mark Bakken of Nordic Consulting and HealthX. Learn more and register here.





If You Can’t Join ‘Em, Beat ‘Em: How Rob Butler Built Maestro Health his Way

Posted December 5, 2016
by Katie Albrecht
MATTER Help Desk Lead

Rob Butler wanted to be a baseball player. He played in college and then semi-professionally, but didn’t quite make it to the big leagues. He did, however, make it to the big leagues of entrepreneurship – having built and sold Payflex and MBI before starting Maestro Health in 2014. Rob was at MATTER recently for an interview with MATTER CEO Steven Collens as part of our Tales from the Trenches series, produced together with ContextMedia and Pritzker Group Venture Capital. Watch the full interview or read our recap below.

Maestro Health is reinventing how employees search for, apply to, and enroll in their employer-sponsored benefits. With more than 350 employees, $35 million in revenue, and $65 million in venture financing, Maestro is positioned to reinvent the employee benefits experience. But the most defining aspect of the company is clearly its culture.

Working at Maestro is anything but boring. Butler drew the company name from a Seinfeld joke, and on employees’ birthdays he favors in-office mariachi bands.

“One of our core values is fun,” said Rob. He believes that a fun workplace keeps employees happier and more productive.

“One of our core values is fun”

Butler hated his experiences in traditional corporate environments, and set out to build Maestro in the opposite vein. He felt that too much emphasis is put on the amount of “facetime” employees show at traditional corporations, and not enough on the quality or quantity of their output.

stevebutler“Staying in the office until 9 pm? That’s just BS,” Butler said. “I decided that if I ever run a company, I’d make sure people go home to their families.”

This culture has helped the company weather conflicting egos, which often sink startups in their infancy.

“If someone tells you they don’t have an ego, they’re lying,” Butler said. “We all have egos, we just check them at the door.” And when people don’t, Butler is quick to move on. He’s let go of employees whose lack of integrity and self-control outweighed their obvious talents. “Words on the wall are just words, after all,” he mused. “But how do you act when things go wrong?”

“If someone tells you they don’t have an ego, they’re lying,”

Butler carries the no-frills, tell-it-like-it-is attitude he displayed at MATTER to Maestro’s external operations as well. When selling Maestro’s solution to a new employer, he doesn’t focus on what Maestro will do right.

“No no no,” Butler smirked. “We tell employers what we’re going to do when we screw up. Then we over-service them.”

In this way, Butler makes sure employers never leave Maestro, likening his company’s hold on its customers to “grimy in-laws.”

Butler is doing something right, with 500 organizations already using Maestro to manage their employees’ benefits, including Blue Cross Blue Shield of Arizona, Mazda, and the University of Texas. But he isn’t resting on his laurels. “We’re going to grow 50% this year,” said Rob.

No matter what’s in store for Maestro’s future, with Rob Butler at the helm, we know it won’t be boring.

For more on Maestro Health, visit their website. For more on Rob Butler, visit his LinkedIn.

steveroblaughingcrop

 

Keeping the Fire: Tim Walbert on Maintaining Company Culture Through Massive Growth

Posted November 7, 2016
by Devon Leichtman
MATTER Associate Marketing Manager

Tim Walbert thrives on growth. As a serial entrepreneur in the pharmaceutical industry, he’s spent his career helping brands and companies grow. When Tim was named Horizon Pharma’s chairman, president, and chief executive officer in 2008 it was little more than a solo operation, and he worked mostly from coffee shops, taking advantage of the free wi-fi and parking. Fast forward to present day, and Horizon has 900 employees and more than $1 billion in annual sales.

While he’s traded working from coffee shops for corporate campuses around the globe, Tim has maintained the small-company mindset and hunger for growth that helped Horizon grow so large so quickly. Tim spoke to his appetite for growth and how he managed this transition from small-to-large company when he told his “origin story” to ContextMedia CEO Rishi Shah at our recent Tales from the Trenches event, hosted in partnership with ContextMedia and Pritzker Group Venture Capital. Watch the full interview or read our recap below.

With the perspective he’s gained building Horizon, Tim is uniquely positioned to understand both the challenges of a small company bootstrapping its way to the next week as well as a large company working to deliver long-term growth for shareholders.

“The things you take advantage of in a big company are the things you die for in a small company,” Tim said, pointing to resources, employees, connections, and especially money. He remembered several times Horizon was only weeks away from the coffers being completely empty. Thankfully, he said, drawing the biggest laugh of the night, “our investors always stuck with us. They just didn’t let us know that they would.”

“Our investors always stuck with us. They just didn’t let us know that they would.”

TTim discussing his path through healthcare with Rishiim contrasted his experience building Horizon with his experience maintaining its current position as a public company. “Now we live quarter to quarter. We have to go out, execute, and convince our investors that [we’re] still worth investing in.” This responsibility to shareholders brings added visibility to everything Horizon does.

“The lights are on 24/7,” Tim said. “When you get to 1,000 people and a billion in sales, you can’t just ‘wing it’ anymore. You can’t use Excel to track your money anymore.”

Though the pharmaceutical industry has a reputation for being traditional, corporate, and slow-moving, Tim repeatedly stressed the need for a strong company culture. He claimed that hiring for culture is more important than hiring for experience when he urged the audience to “hire the right people, [then] teach them the science.” While many entrepreneurs talk about building a strong culture, Tim has made difficult decisions to create the right culture for Horizon. He once fired 80 percent of his sales force because they did not fit the culture he was trying to build.

When pressed for advice he’d give to potential entrepreneurs, Tim was frank. “If you’re not ready to hear ‘no’ more than you’ve ever heard in your life, you’re not ready for this,” he deadpanned.

“If you’re not ready to hear ‘no’ more than you’ve ever heard in your life, you’re not ready for this”

So why do it? Why build a healthcare business when there are markets with significantly fewer barriers to entry? Tim’s response spoke volumes about the internal drive he taps to navigate Horizon through it’s monstrous growth: “You can go build a widget, or you can make a difference in life.”

For more on Tim, see his LinkedIn or the Horizon Pharma website.

Tim, Rishi, and MATTER CEO Steven Collens

 

 

Tales from the Trenches: Rishi Shah and Shradha Agarwal of Outcome Health

Posted September 26, 2016
By Devon Leichtman
Associate Marketing Manager – MATTER

How the Entrepreneurial Wunderkinds have Brought Outcome Health to National Prominence, and Where They’re Taking it from Here

Rishi Shah and Shradha Agarwal founded Outcome Health in 2006, and in the 10 years since they’ve bootstrapped it into a 400-employee company with more than $65 million in revenue and offices in Chicago and New York. Rishi and Shradha discussed their remarkable success with MATTER CEO Steven Collens at MATTER, Pritzker Group Venture Capital, and Outcome Health’s Tales from the Trenches speaker series. Watch highlights from the conversation and read our summary below.

Rishi and Shradha built Outcome Health to “do well by doing good.” They provide educational resources to patients and clinicians at the point of care, providing the technology, educational content, and advertisements. Outcome Health reaches patients at the point of care, when they are most likely to make buying decisions.

What Rishi and Shradha are doing is working. Outcome Health has seen eye-popping growth, both financially and in their reach across the country. They add an additional 1,200 to 1,500 physicians to their network every month. Rishi and Shradha made some deliciously audacious statements about Outcome Health in the interview. Rishi told the crowd that he wants to build “the most impactful company in the world,” laying out his ambition to make Outcome Health an international healthcare giant. By 2020, they hope to serve 150,000 practices, about 70% of all practices nationwide. When Steven asked him where these ambitions came from, we got a telling look into what makes Rishi tick: “nobody dreams of making a middle-market company.”

“Nobody dreams of making a middle-market company”

To keep up with their rapid growth, Rishi and Shradha have quickly scaled their workforce, but always with an eye toward strengthening their culture. Outcome Health has hired more than 400 people according to strict cultural guidelines. They have built a culture of autonomy, comfort with ambiguity, and “communal competition”: Outcome Health employees are fueled by competitive fire, but can collectively channel it to accomplish company goals rather than turn it against each other. Rishi, Shradha, and Steven onstage at Tales From The TrenchesShradha also stressed the importance of hiring reflective, thoughtful people, saying that the tech world is too often filled with “too much doing and not enough reflecting, thinking, ideating, dreaming.”

Though Rishi and Shradha have made the occasional hiring mistakes, they’ve managed to maintain Outcome Health’s autonomous and communally competitive culture despite their ramping scale. Echoing advice from previous Tales speakers, Rishi and Shradha preached a “hire slowly, fire quickly” mantra, encouraging attendees to deal with a hiring miss as soon as possible, before company culture begins to suffer. Rishi summed up Outcome Health’s hiring philosophy when he advised the audience to “only hire people that you’d work for.”

“Only hire people that you’d work for.”

The strides Outcome Health has made to this point haven’t gone unnoticed. In 2009, Rishi was the youngest person to ever make Crain’s Chicago 40-under-40 list and Shradha was named to the list in 2012. Shradha was named Prominent Woman in Tech at the 2015 CityLIGHTS Awards, while Rishi was named CEO of the Year at the 2016 Moxie Awards. Together, the pair received the 2016 EY Entrepreneur of the Year Award.

The pair recognize that they have a long way to go: Outcome Health has grown so quickly in part because of the massive number of patients who still don’t have access relevant information and educational resources at the point of care. As Outcome Health grows, Rishi and Shradha notice this hole – and their company’s ability to fill it – all the more.

“The bigger we get as a company, the smaller we feel,” Rishi said. “We want to 100x this.”

For more on Rishi and Shradha, follow him and her on Twitter. Attend the next Tales from the Trenches, where Rishi will interview Rob Butler of Maestro Health on October 27.






Tales from the Trenches: Eric Langshur of Abundant Venture Partners

Posted July 7, 2016
By Elizabeth Lynch
MATTER Marketing Intern

Eric Langshur, co-founder of AVIA and Abundant Venture Partners, author of Start Here: Master the Lifelong Habit of Wellbeing, and serial entrepreneur, spoke with ContextMedia CEO Rishi Shah at MATTER’s popular Tales from the Trenches live interview series. The two friends talked about the importance of a strong company culture, how to maintain your “true north” in the middle of failure, and the art of personal well-being. Watch highlights from their conversation and read our summary below.

Eric Langshur became a serial entrepreneur by accident. The year was 1998, and the soft-spoken Canadian was climbing the corporate ladder at a global aerospace company when his newborn son Matt was first hospitalized with a serious heart condition. Wanting to give far-flung friends and family members real-time updates on his son’s progress, Eric turned to the World Wide Web, still in its infancy, and built CarePages. Word quickly spread about this novel new “social” use of the internet. Soon, strangers around the world were building personal pages for their own loved ones.  

Fast forward two years. It’s January, 2000, and Eric and his wife Sharon have quit their day jobs to focus on building CarePages full time. Then suddenly, the dotcom bubble burst, and in the tough economic times that followed, Eric and Sharon struggled… a lot. But throughout it all, he never lost his “true north,” the reason he started CarePages in the first place.

Looking back on the first year running his first company, Eric recalled how much harder it was to run a small business than it was to run a big one. The passion Eric had for the business and product he created pushed him through the inevitable uphill battle bringing it to existence. With a small business like CarePages, the buck stopped with Eric – the money, resources and relationships were all on him. There was no room for error. Despite early struggles, Eric loved being an entrepreneur and working in healthcare. When asked about fundraising for CarePages, Eric spoke about the importance of the quality of the money and how the influx of donations and touching letters from users moved Eric and Sharon to start a foundation. His mantra during CarePages’ rough patches: “show up, be vulnerable, be authentic.”

LangshurRishiSummary

After receiving several offers, Eric eventually sold CarePages to Revolution Health, the brainchild of AOL Co-founder Steve Case. Eric was now “hooked on healthcare” and determined to help fix a broken industry. Over the next few years, he became an active angel investor, serving on the boards of various organizations and founding or leading several other startups including RiseHealth, healthfinch, and Frequency 540, before launching AVIA, a healthcare innovation network, and co-founding Abundant Venture Partners, a values-based venture business, with former Starcom Mediavest Group executive Andrew Swinand.

Eric’s core values and personal philosophy that have guided him throughout his business career are woven into his best-selling book, Start Here: Master the Lifelong Habit of Wellbeing. When asked about the book’s beginnings, Eric told Rishi he was interested in faith and his family’s roots. He was a voracious reader of philosophy, religion, and self-help books and eventually synthesized his thoughts into a framework that formed the foundation of Start Here. His work brings together philosophy, science, and the latest discoveries about the human brain to teach the art of well-being.

Rishi and Eric wrapped up their discussion by talking about the importance of creating diverse teams with “purpose, planning, and effort”; how being “self-nurturing” by prioritizing spending time with friends and family and doing activities like meditation and exercise is critical to well-being; and how bringing energy, love, and joy into the workplace can make work restorative and inspiring instead of draining.

Finally, Rishi posed a question in the minds of many during this election year: “What does the next administration need to do for healthcare?” Eric’s advice for the next president: “Pile tons of money into experimentation, get to market, and use money in comparative analytics. If we drop massive experimentation [on the healthcare system], there would be benefits.”

Be sure to watch the full interview here and join us for the next Tales from the Trenches with Timothy Walbert, chairman, president, and chief executive officer of Horizon Pharma, on July 28.





Tales from the Trenches: David Jonas of PharMEDium

Posted May 12 by Ornella Hernández
MATTER Journalism Resident
Medill School of Journalism, Class of 2016

David Jonas, founder of PharMEDium Healthcare Corporation, sat down with ContextMedia CEO Rishi Shah at MATTER’s latest iteration in the Tales from the Trenches series. The hour-long conversation revolved around Jonas’ 35+ years of healthcare industry experience including hiring practices, the importance of service as well as product, and the staggeringly high stakes in healthcare. Watch the interview highlights and read our summary below.

Born in Israel, Jonas spent more than two decades at Baxter International as the chief financial officer of renal therapy services when he saw an opportunity to strike out on his own. Baxter had long practiced compounding – mixing drugs for pain management, surgeries, and epidurals – but was planning to cut the business segment loose in 2003. Jonas seized the moment and left Baxter to start a new company mixing drugs for hospitals who outsource ready-to-use compounding products.

Jonas tells Shah about building PharMEDium, sterile compounding, and his journey through healthcareJonas stressed identifying value proposition in the early stages of entrepreneurship. “You have to decide how different you are. You have to define what the customer wants and needs. Understand both the cost and the value,” said Jonas. In PharMEDium’s case, that value came from providing exceptional customer service. “In today’s environment, you can have a phenomenal product, but the service component will make or break your product,” said Jonas.

PharMEDium set out to provide a drug compounding service which included procurement, sterilization, mixing, packaging, and distribution. This meant building expensive facilities and infrastructures and hiring a core team. Jonas was deliberate in bringing in the right talent to augment the business, and bought 500 contracts from Baxter. “We needed people with an entrepreneurial spirit, who enjoy change, but also adhere to standard operating procedures. No cowboys,” he said.

Patient safety keeps Jonas awake at night, and loose cannons terrify him in the high-stakes drug compounding industry where any mistake could be deadly. Maintaining quality control and sterile procedures that comply with the U.S. Food and Drug Administration is fundamental to compounding, and PharMEDium excelled at it. Today, the company has about 70 percent of the market, according to Crain’s Business.

PharMEDium was able to become the market leader in sterile compounding by fostering a meticulous company culture. With success, however, comes accountability. Jonas recalled an incident involving a competitor whose contaminated batch of steroid injections caused meningitis and resulted in more than 60 deaths and about 750 injuries in 2012.

“This is unacceptable when a customer is trusting you,” said Jonas. “In 2003, The Drug Quality and Security Act passed and clarified the regulatory environment that we were subject to. This brought in all the investors,” said Jonas. This investment buzz continued, and in Fall 2014, PharMEDium was preparing to file their initial public offering. Rishi Shah, David Jonas, and Steve Collens at MATTERs Tales from the TrenchesAt the 11th hour, Jonas “got an offer that was too attractive to pass up,” and AmerisourceBergen acquired PharMEDium for $2.5 billion in November of that year.

“In the last few years, I started spending time in private investment, VC, and in bringing my healthcare experience to the table,” said Jonas. He had founded JVC Investment Partners in 2000 and currently serves as its president. His son Jonathon Jonas, who is a partner of JVC, sat front and center in the auditorium to listen to his father.

Rishi asked which market is most ripe for disruption. Jonas said that the U.S. is, but that Israel is the best for biotech – in particular, cardiovascular tech and neural modulation. As a born and bred Israeli, Jonas will now look back to his home country to invest in the IT business. Watch the full interview and join us for our next Tales from the Trenches on Thursday, June 23.