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On this episode of Okay, Computer, Dan & Moxxie Ventures’ Katie Stanton talk about the softening market finally bringing startups valuations to a “normal” place (1:00), how a gloomy economic outlook is altering the war for talent (5:39), Katie’s tenure so far on the board of Yahoo and CEO Jim Lanzone’s plan for the tech company’s future (8:16), and the risks & benefits of working at a startup versus legacy company (11:24). Later, Dan & Katie have a conversation with Forward’s Founder & CEO Adrian Aoun and discuss Adrian’s remarks at the 2022 Code Conference and his key takeaways from the gathering (19:53), Forward’s push to deliver more healthcare innovation than its rivals (23:40), the challenge of bringing scale to primary care (33:33) why the cost of innovating in healthcare is the industry’s biggest problem (45:11), and Adrian’s experience working with Google co-founder Larry Page (48:12).

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Dan Nathan: [00:00:36] Current Ad. Okay. Welcome to Okay Computer I’m Dan Nathan. I am joined with Katie Stanton the Moxxie Ventures. Katie, how are you? [00:00:44][7.9]

Katie Stanton: [00:00:44] I’m great. How are you doing, dan? Good to see you again. [00:00:46][2.0]

Dan Nathan: [00:00:47] It’s been a little bit and you and I have lots to catch up on. You brought a pretty amazing guy. We just got done with this conversation, so you guys have to stick around and check this out. Adrian Aoun, he is the founder and CEO of Forward, an AI based health care system that he founded in 2016. Pretty exciting stuff there. But first things first, Katie, what’s going on? Just in general, you and I have not checked in a little bit what’s going on with the Moxxie portfolio. I know there’s a lot of interesting stuff going on there. The investment environment, some of the deal flow that you’re seeing, valuation. I’m just curious, like just thoughts out there you are in Boulder. I get a good read from the people here in New York. A lot of fintech stuff is kind of depressed here. A lot of the web3 stuff is a bit depressed here. It seems like the West Coast seems to be in the middle of it, too. I’m just curious what’s going on in the middle of this country here and how you’re thinking about things. [00:01:36][48.8]

Katie Stanton: [00:01:36] Yeah, thanks. I’ve been great. You know, aside from being based in Boulder, I spend a lot of time either in the Bay Area or in New York as well. So I feel like I have a good, solid overview of what’s been going on. I think for us at Moxxie and I think this is consistent with a lot of my peers and friends who are also seed investors is that the market has certainly softened, but we remain in the best possible place because we’re early and we have very long time horizons and the next few years are times to build and we have a plethora of big problems in the world health care, climate, economic mobility. So there’s still a lot of work to be done. The other good news, at least for investors like us, is that finally valuations have gotten to a normal place and the speed of doing deals feels a bit more reasonable. It used to be the case, I mean, a year ago so I would get on a call with a founder. They’re like, We need to know by the end of this meeting if you’re in or not, which is ridiculous. Like you have to do your research, you have to do your diligence, and it’s like having a shotgun marriage after one Match.com swipe or something. You have to do your diligence. So I’ve been happy to have been spending more time with founders and also trying to invest at more reasonable prices. And then the other thing, at least for us, over the summer, we spent a lot of time with our existing portfolio companies, basically just looking at their operating health. Do you have enough runway? What does your burn look like? Where can we help with customer intros? Where can we help with hiring? What are the best things that we can do to ride this very crazy time because we don’t know how long the markets will feel depressed. And so you just have to ride these things out. Things are never as amazing as they seem and they’re never as terrible as they seem. So you have to be somewhere in the middle and as practical as possible. [00:03:21][104.6]

Dan Nathan: [00:03:22] What’s the general mood among some of those portfolio companies? They obviously probably made some cost cutting endeavors, if you will. I mean, did you feel that a lot of the companies in your ecosystem, did they cut hard and fast, or are they trying to take a wait and see approach to it? Because it does feel like in different industries there’s different paths forward here because some of these inflationary inputs or some of the weak consumer stuff, it’s just not affecting certain areas. I guess of the private tech, especially where you are probably in climate and health tech because you articulated it I think over a handful of pods in the spring. Some of the stuff that you’re looking at is really recession proof. [00:04:00][38.4]

Katie Stanton: [00:04:01] We think so and we hope so. And I would say the really great founders can anticipate problems before they even occur. And there’s this great Henry Kissinger quote, “Whatever must happen ultimately should happen immediately.” And I think for a lot of those founders, this market is going to be tough for a while. You need to become investable. You need to make sure that you are proactive. You need to make sure that you get a product market fit as quickly and efficiently as you can. And so the best founders in our portfolio were able to anticipate a lot of these things. And quite even before we told them the cut, I would say actually if there were me telling a founder to cut and then they cut, then it’s too late. So most of our he did these warnings really early and now we kind of wait. And we’ve had companies that have gotten into their series A during this time. So that’s a good sign. The bigger investors, the upstream investors, the big multi stage ones and reasons general catalogs like they’re all still deploying capital, but they’re deploying capital, investing in the very best companies out there that are surpassing their metrics. So I’m still bullish in the long run. I feel very privileged to be in the space that we’re in to be able to optimize and affect outcomes, investing in software solutions that help a lot of people. That’s a great place to be in. And again, we’re there for the long term. [00:05:20][79.0]

Dan Nathan: [00:05:20] It’s so funny because we’ve all spend a lot of time thinking about, at least I do in the public markets about a lot of these consumer Internet companies, which are not really solving big problems. They’re actually helping us waste a lot of time. In many ways, you think they’re more productive. So I love listening to you and the stories about the companies that you’re investing in and the founders and these big problems that they are trying to solve. And that was one of the things that really came across in our conversation with Adrian. So last week on the pod, we had Deirdre Bosa. She is a CNBC tech reporter on Techcheck and she was at code along with me and we did a little bit of a wrap and it was kind of interesting with our conversation that the listener will hear with Adrian. He was obviously out there. His comment was that there was a lot of really big names there that said a whole heck of a lot of nothing. Now I come from a little different camp as a public markets investor. For me, it’s always amazing to get access and to see the body language of some of these big CEOs of these companies that are managing tens of thousands of people, deploying billions of dollars or hundreds of millions of dollars in R&D and how they think about their businesses. So to me, it really is often about body language. Sundar Pichai did say something. They want to become 20% more productive. And so what do you take away from that as a public markets investor? There was a lot of analysts who’s a lot of investors were talking about that after the fact. So even though some of these guys and they are generally guys sorry are not laying out these big initiatives or these big areas because they’re always really tight lipped, it is interesting to gain their body language. I didn’t get a sense overall that some of those big companies are that worried about a really deep, long recession. And that’s something that I think the investor base is pretty obsessed on right now. So I’m just curious your thoughts as you broaden it out away from private tech markets. How do you think just the kind of bear market that public tech stocks are and how does that affect the psyche, if you will? Because, again, there is not an all day cable news or financial news channel dedicated to private tech or private markets. It’s about public markets. And I know that oftentimes some of the sentiment seeps into where you live a little bit. [00:07:28][127.6]

Katie Stanton: [00:07:29] Yeah, I think some of the noticeable effects for us in the private markets and especially for early stage, are first getting talent. There was already a talent war, but it’s harder to get people to leave their very secure jobs at Google, at Stripe, at Facebook. Facebook is actually pretty easy because it likes working there, but places where they’re very secure with benefits because they know how rocky things can be in an early stage startup and how risky things can be. The second thing that affects us is that longer sales cycle. So a lot of our software companies, we try to sell into the bigger companies. Either they have pulled back or they’re taking a really long time to buy things. So this summer was pretty rough. We saw a bunch of our companies who are on very steady clip selling into larger companies that only realized that things were taking a longer period of time. But this also made me think of one person that I’m going to segaway here. One person that I want us to have on our pod who I feel has really elegantly navigated a lot of these things is Jim Land’s own, the CEO of Yahoo! Oh, my God. This guy, I swear to God, will go down as one of the best CEOs of all time. I’ve known Jim for now, 20 years. When I was at Google, he was at SGs and we were selling our search and our search results into Jim. And as smart as everyone was at Google, Jim asked the hardest fucking questions and no one could answer them. And he kept pushing and pushing and pushing so much. I was like, I never want to be on the other side of that guy. And we have been friends for a long time, but now I’m on the board of Yahoo! And the way that he has navigated a really tough and erratic market with an older yet beloved brand and delivering a lot of positive outcomes, I think is just it might be a really amazing story to tell whether he may be ready. [00:09:20][111.5]

Dan Nathan: [00:09:21] Well, you know, in late July he was on 20 minute DC with Harry Stebbings and it was actually really surprising. I’d never really heard him speak. I’ve met him a couple of times over the last year or so, and again, I think there’s a lot of investors in the public markets who are probably very skeptical. You and I talked about a little bit of what a Yahoo! turnaround looks like because the brand has not been top of mind, I think, for investors in a very long time. It was obviously sold to Verizon seven years ago, mashed together with AOL. And now I think the best parts spun out. Obviously, Apollo bought it here. What’s interesting to me, though, is just the audience that they still command in finance and sports. And I know there’s other parts of that business mail that are very interesting. So, again, I’ll take your word for it that he’s a grade A CEO. There aren’t too many examples, though, where old great brands have been gobbled up by big stodgy company and kicked back out by private equity, where they’ve been a resurgence. But I use a lot of Yahoo sports. I use Yahoo! Finance, tapping into that user base, figuring out how to better monetize them, keep them there longer, introduce a couple of new services, I guess would make a whole heck of a lot of sense. Is that part of the plan? [00:10:31][70.6]

Katie Stanton: [00:10:32] I will tell you that he is a fantastic CEO who has built and rebuilt his executive team. That is A-plus. Like you, there are millions, hundreds of millions of customers who go back to Yahoo! Finance, Yahoo! Mail, Yahoo! Search every day because they’re comfortable there. They love the brand. It’s trusted, and it’s just something that they’ve always done. And its board is great. I’m not trying to be pompous here, but like the other board members are amazing. I think this is going to be a really I mean, knock on wood, but I feel very lucky to have this front row seat to history because I agree with you. It is very hard to save an old brand, especially technology. It’s always like the new, new, new, new thing. I think Yahoo! Might defy the odds. [00:11:15][43.7]

Dan Nathan: [00:11:16] All right. Fair enough. I’m keeping an eye on that. I’m rooting for you guys. So when you and Jim are both in New York City, let’s all sit down over a bottle of maybe a Komos and we’ll have a little pod there. And I do recommend to our listeners they should go listen to that 20 minute BC with Jim and Barry Stebbings. It was pretty great. One last question here to you, Katie, because you worked again. You started your career at Yahoo! You worked at Google. You worked at Twitter. Talk to us a little bit about like the mindset, what it’s like. You just mentioned Facebook. No one wants to work there. And again, that stock has been more than cut in half. It’s down 56% on the year. It’s down more from its all time highs. It’s pretty astounding when you think about where the stock was trading last year prior to Zuck making this very, very prominent pivot to the metaverse. This stock was almost $1,000,000,000,000 market cap and now it’s below ish, 400 billion or so. Talk to me about the psychology of being an employee. You probably rode out some difficult times over the years. Obviously, stock based comp is a big part of compensation with a lot of these companies. What’s it like being in a place like that in a period like right now? [00:12:21][64.6]

Katie Stanton: [00:12:21] I mean, it’s risky and it depends on where you are in your life cycle. So, for example, if you’re in your twenties, you’re not married and you have an appetite for risk, you don’t have a mortgage. It might be worth that tradeoff to work at any of these companies where it’s bumpy, because if you stick around and the company pulls it through, you could be rewarded handsomely. But if you’re a new parent or you’re taking care of your parents and you have a lot of responsibilities, sometimes that may just place all this added pressure on you. So maybe it is worth finding a place that may be more comfortable. But ultimately you have to believe. You have to love the people that you work with. You have to love the product you’re building. You have to be proud of what you’re doing, and you have to feel like you’re making a reasonable, positive impact in both your work and in the world. And if all those things are true, you’ll be fine. That’s my goal. [00:13:12][51.0]

Dan Nathan: [00:13:13] You know, it’s interesting, some of the hardest hit names in, let’s call it the Internet space, if you will, over the last year, year and a half. I mean, they started correcting well before the Nasdaq started correcting, which was late last year. And it’s interesting, if you pulled up a chart on your Yahoo! Finance or as I use FactSet, pull up a Chegg or a Pinterest or obviously Twitter because it’s got a $44 billion bid lift. Some of these stocks have not made new lows in months. That’s a really interesting thing. Pinterest had an activist. There’s a whole host of other things. There’s been a little M&A, so maybe there’s some more M&A. Gavin Baker of Atreides Management tweeted this last week that if you’re not a FAANG company, you can probably buy whatever you want. You saw Adobe pay $20 billion in cash and stock for Figma, a company that’s going to do, I don’t know, $400 million in revenue this year. You can do the math on that. So maybe there is light at the end of the tunnel. A lot of these companies, despite interest rates going much higher, the cost of capital being much higher, they have a lot of cash. They generate a lot of cash. Maybe there’s some opportunities to kick through the wreckage here a little bit. But to me, I’m seeing some relative strength among some of these stocks that have just been absolutely destroyed over the last 18 months. [00:14:23][70.1]

Katie Stanton: [00:14:24] Yeah, I mean, I’m a long term investor and I buy and hold and I just ignore it. So I’m at the other end of the spectrum. You pay way more attention than I do. [00:14:31][6.9]

Dan Nathan: [00:14:31] Yeah, but any of these stocks that have been down 70, 80% or any of your pals in Silicon Valley saying that was it, that’s enough is enough, this thing is a double or triple from here. Do you ever look at the stock market and think about how I could use your knowledge to generate VC type returns, over let’s say, a 5 to 7 year period, especially after again, I mean, there are dozens and dozens of high quality companies whose valuations have just gotten absolutely destroyed, probably for good reason, that are down 70, 80%. Or you’re just primarily focused on the private markets. [00:15:03][31.7]

Katie Stanton: [00:15:03] Yeah. I mean, I have so much of my own personal capital like in Moxxie, and I’ve invested in much of early stage companies and some funds that I have to be very conservative in the public market. So I’m basically an index fund investor. And then I’ve invested in five companies whose products I admire and I use every day, and I believe in management. And then I just kind of close my eyes and hope it works out as investor do I think we always have FOMO? We have to have a lot of diversification. Now there are a couple of really smart investors and I’m like, I don’t really understand a lot of it, but I know you do. Or You sound like. You do. So here’s a little bit of capital one maybe one day works out. [00:15:40][37.0]

Dan Nathan: [00:15:41] All right. Well, there you have it, Katie Stanton, Moxxie Ventures, my co-host here on okay Computer. Thank you very much for that commentary. And stick around, people. We have Adrian Aoun, the CEO, founder of Forward. [00:15:52][11.0]

Dan Nathan: [00:16:38] Current Ad. Masterworks Ad. Taboola Ad. [00:18:13][95.5]

Dan Nathan: [00:18:17] Adrian Aoun is the founder and CEO for an AI based health care system started in 2016. Before forward, Adrian was the head of special projects for the CEO of Google Alphabet. While at Google, Adrian led the founding of the company’s Sidewalk Labs, which focuses on urban planning and infrastructure solutions. Adrian came to Google after it acquired his startup, Wavii, a natural language processing a news summation app back in 2013. Adrian, welcome to Okay Computer [00:18:44][27.5]

Adrian Aoun: [00:18:45] No, thanks for having me. I’m excited to be on. [00:18:47][1.2]

Dan Nathan: [00:18:47] This is pretty cool. Katie I told you this that I was at code. Kara Swisher Final code conference in L.A. two weeks ago, and I’m looking at the rundown and I’m seeing Sundar. There’s Tim Cook, there’s Johnny Ive. The list went on and on and on. And I see a name that I kind of recognize, Adrian Aoun. And he’s right between Mayor Pete Buttigieg and Bob Iger, the former CEO of Disney. And I’m like, wait, I recognize that name. He’s going to be on our podcast here. So how did it come, Katie, that we have Adrian joining us on okay. Computer, one of the major tech luminaries that was just at the last code conference. [00:19:24][37.1]

Katie Stanton: [00:19:25] Well, a combo of luck and strategy, right? [00:19:28][2.6]

Adrian Aoun: [00:19:29] Yeah. I think the better question is how the hell did I make it on to the code conference? But I think when the program came out and I was on their website and I was very like, my last name starts with an A. So I’m like kind of at the top of the list. And then there’s Tim Cook and then there’s Sundar and John Doerr. And I’m sitting there figuring like, finally I’m among my peers. No, I’m really thinking like, holy shit, who made the mistake and invited me. But Kara was very, very, very kind to invite me and honestly, it was an absolute blast. It’s a great conference, especially since it was her last, though, you know Kara, she’ll say it’s her last and then she’ll just go do three more conferences that are exactly with the same red chairs and just a new name. So I look forward to hopefully being invited back to the next incarnation. [00:20:06][37.8]

Katie Stanton: [00:20:07] Well, you know, Adrian, that okay computer is basically the podcast of the code conferences because we have also had Kara Swisher on our pod. So you’re also in very good company here. [00:20:17][10.1]

Adrian Aoun: [00:20:18] That’s also I just follow Kara wherever she goes. That’s my whole strategy in life as. [00:20:22][3.5]

Dan Nathan: [00:20:22] We do, too. And, you know, it’s really funny because when Kara came on, I think it was in February, Katie, we just launched the podcast and she’s like, What’s up with her name? It’s kind of dumb. And we’re like, You have to let her have that. And I actually really like the name. I came up with it. But Kara is going to be, kara. What was your takeaway? Adrian Because it was really interesting to have in a 24 hour period, three CEOs of a combined $6 trillion in market cap that have a combined $1.2 trillion in annual sales. They were all on the stage there. There was obviously a lot of other very influential investors and founders like yourself and some very large but private tech startup companies. So I’m just curious what your takeaway was from the vibe there. [00:21:03][41.3]

Adrian Aoun: [00:21:04] Maybe I’m going to be a little blunt, forgive me and what I’m about to say, but I’ve never seen so many smart, amazing people say absolutely nothing while using so many words. Look, I’ve been very fortunate. Maybe, you know, my background and I’ve worked very closely with some of these folks, so I’m not trying to say anything super obnoxious, but dear fucking God, can you get on stage and say something. There media training is getting so good they’ve spent too much time with Katie and her expertize. One of the big problems in Silicon Valley these days, if you think about it, is Silicon Valley companies, the big tech companies have become so large, so powerful that their CEOs sit there and they basically play defense because any time they open their mouth, their employees want to jump at them. Any time they open their mouth, the regulators want to jump at them. And any time they open their mouth, the shareholders want to jump at them. So they’ve iterated to this magical world where they come on stage, they spend an hour basically saying really like, fuck all nothing, tell me I’m wrong. And, you know, I’m Sundar’s biggest fan. Like, I think he’s an amazing human. But tell me anything that’s Sundar said or tell me the thing that Tim said and this is my issue. Probably the most interesting one was in some ways Bob Iger, because he’s like, look, I’m not running a company anymore, so let’s say it like it is. And that’s what I think is in some ways incredibly bad for society at this point, because you do have these people that could materially change the world but are shying away from it. And that’s not really great. I think we’re going to end up in a world where this is actually much worse for all of us. [00:22:25][81.2]

Dan Nathan: [00:22:26] All right. Well, actually, that’s a pretty good segway, because you started a company in 2016 that basically wants to make the world a lot better for all of us. Talk to us a little bit about Forward, how it came about. I heard about it on the stage at code. It sounds like you guys are moving very fast to fix a problem that has been I don’t know if you’d say it’s just kind of been pushed under the rug, it seems like almost generationally here in America. And you’re trying to use some of your expertise working at some of these large companies. You sold a company right to Google years ago. And so talk to us a little bit about how you came up with the idea for forward and what the problem is you’re trying to solve. [00:23:02][36.5]

Adrian Aoun: [00:23:03] Yeah. So in some ways it does kind of segway well because it actually kind of half deals with my frustrations from the big tech companies and half deals with my hope for humanity. So I was at Google, you know, I had, as you mentioned, sold an AI. Company to them and help build out a bunch of the AI division over there. But after doing that, I spent a few years roughly as kind of Larry Page’s right hand man, helped him kind of create Alphabet and create a bunch of the alphabet companies. And the whole thesis of this was it was awesome. I mean, it was incredible. It was like, look, we’ve got this war chest of money. We’ve got all this talent. Imagine being like Michelangelo and painting and looking around like, Holy shit, it’s the Renaissance. Well, we are engineers in middle of the information revolution. Like, we could not be better positioned to affect the future of humanities. We said, like, it’s incumbent upon us to go improve the world. So let’s go take on some of the largest problems of the entire world and see what we can do to contribute back to humanity. In some ways, this is fantastic. This is wonderful. You would say like, how could anybody be better set up for this? But at the same time, what you actually find is the reality of that doesn’t come to bear. So it turns out that large companies have a lot of trouble getting out of their own way, whether it’s the regulators, whether it’s literally your own employees. And that could be the individual contributors or frankly, just the management teams fighting with themselves. And so, as an example, one of the things that I was really excited by, I really wanted to go into health care. So I have a brother and my brother, aside from picking on me nonstop when we were kids, when he was older, with the unfortunate circumstance of having a heart attack. And I kind of watched what he went through and I said, this is appalling is all the stuff you and I know, right? Like the health care system is just garbage wasn’t there for them is shitty experience cost every single part of this was garbage and I said we have to do better. And then I kind of looked into it even a little more and I looked around and I was like, and this is from a guy who’s high earner in New York and one of the the most developed cities on the planet. Imagine what the rest of the planet has. I mean, this is really just garbage. And so one of the things that I did was actually while I was at Alphabet, at Google, I said, you know what, let’s go and let’s acquire one medical. I had this idea of far far far before Amazon and I went and I sat with the founder of one medical really nice guy, Tom Lee. And you know, what is a really kind of interesting reaction. So I went up to him and I said, You know what, Tom? So let’s pretend I buy you tomorrow and I give you billions of dollars. What are you going to do? Tell me the brave new world that you’re going to create. And he told me something that was just seared in my brain. He said, You know what, Adrian? In health care technology, investment is not ROI positive. And I was like, What the fuck? Like, what are you talking about in fucking gardening is ROI positive. Like how on earth in health care is it not ROI positive. But think about what he was saying. What he was saying is when he invests in engineers, he doesn’t really get that money back. Now why? Well, it just turns out that in a world based on like billing codes, in a world in which you only make money in the world of health care based upon these insurance decided codes for procedures, it turns out that optimizing what you’re doing does not get you a different billing code. So you ask yourself, Why does my doctor not, I don’t know, sequence my DNA? Why does my doctor not ingest my Apple Watch data or my Strava data? It turns out there’s no billing code for that. Right? And so it’s at the end of the day, you’re just going to waste a bunch of money. And so you have a system that’s literally not incentivized to get better and better and better. And so obviously I looked at that and I said, well, hold on. This is why they’ve iterated to pretty couches not preventing cancer. So why on earth would you ever acquire this thing? That’s a disastrous idea, right? And so all of a sudden, I looked and I was like, wait, what do we need to do if we really want health care to get better? Now, when you take that frame and you kind of look around, you look at the entire health care system as it is today, you actually start to kind of realize that the whole health care system and everything that we talk about is not innovation in care. It’s financial innovation from ACOs to Medicare to high deductibles to Obamacare and the ACA. All of this shit was financial innovation. You know what’s not getting better at my fucking heart? It turns out that financial innovation does not prevent cancer. You know, it just turns out very basic science. It turns out not a single person at all of these companies is actually working on the actual care innovation. And you know this because imagine going up to your kids one day and just telling them what it was like to go to a doctor. It’s like, Well, okay, wait, Mom. So you’re telling me you walked into a room and there was this dude in a white coat and you just told him what was going on and they just kind of divined what was wrong with you? Like, Are you fucking kidding me? You went up to a fortune teller. Let’s be real. Doctors are kind of the fortune tellers of our time. It’s not their fault, right? They went to massive school like they’re super smart. They mean, well, it’s our fault. Like, we just haven’t built them good tools. Like, imagine if you took your BMW to the dealer. You walk in, you’re like, My BMW is making some sounds, and the mechanic just sits there, strokes their beard, and they’re like, it’s your carburetor? What are you going to say? You’re like, Fuck, you plug your damn laptop into the thing and tell me what’s going on, right? And so what you realize is like you literally will not take this substandard care for your BMW, you’re like, No, I want the technology for my BMW yet you will take it for your body. So for some reason, just think about it. You walk up to a software engineer and you ask them to build your website. What do you do? You hand them a laptop, which is the sum culmination of all human advancement and the most beautiful 2 pound device that you’ve ever seen. But for some reason, it’s totally okay to go up to a doctor and say, Save my life, and you start by handing them a shit. You not a stethoscope. A hollow tube invented in the 1800s. You know, when your kids want to hear what you’re saying in the other room, what do they do? They take a glass to the door, right? Come on. We have to do better than this. And so what you realize is we’ve been stuck in the stone ages. And so all of a sudden, all I realized was, if you actually want health care to be better, the first step is really, really simple. You have to align your incentives. You actually have to work for the customer. I always like to think of it as like, we’re kind of in the BlackBerry age and somebody needs to build the damn iPhone. You remember BlackBerry was like, We’re going to build for your I.T. department and it’s going to, I don’t know, do security shit. And IT shit t. It’s like, great, that’s fine. I don’t care about that. I want the phone to do what I want. And so Apple comes out in the high I.T. department. No, we’re not going to give you all your security bullshit. But you know what we’re going to give you? A phone that fucking works. And so that’s what I got. I got a phone that works, and all of a sudden everybody’s like, Wait a minute, this is what phones could look like. And the world takes off and you get this mobile computing revolution. Well, now I would ask you, what would health care look like if it was built for you? And all of a sudden you’re like, wait a minute, you mean health care could catch things before they happen? Wait, you mean health care could be on my terms? Let’s just ask ourselves a really, really simple question. What would health care look like if it was made by Apple? All of a sudden, when I get the flu, the flu would be a very different experience. Let’s just let’s just kind of play out the analogy. Imagine that you’re a Forward member and you have our mobile app and you find a bug in the mobile app. You’re really annoyed. So you walk up to Jess on our engineering team and you say, Hey, just do me a favor, will you fix this bug? Jess is really nice. She fixes the bug. She sends you on your way. The next day katie You have the same bug you walk up to. Jess You know what? She’s nice. She fixes the bug she sends you on right next day. I have the bug. I walk up to Jess fixes bugs. She sends me on my way. At some point, I’m just as boss. What the hell should I? I should fucking fire Jess. Just fix the damn bug once and for all. What the hell? Right. Now let’s pretend you have the flu. You walk up to one of our doctors. Doctor fixes the flu, sends you on your way. Next day, Katie has the flu. Katie walks up to the doctor, fixes the flu, sends you on your way. Next, say, I have the flu. I walk up to the doctor. Doctor fixes the flu, sends me on my way at some point. Why am I not firing the doctor? Just fix the damn flu once and for all. And now you realize the world that we live in. We live in a world where literally something as common as the damn flu that we’ve seen billions of times has literally not been fixed. How are we accepting this? This is the flu. If we can’t fix the damn flu, how are we going to prevent cancer and heart attacks, things that are actually killing us? And that’s the world that we need to get to. We need to get to a world where like health care is actually a product that is truly invested in with real technology. And that’s what we’re trying to build here at Forward. [00:31:16][493.1]

Katie Stanton: [00:31:17] Amen. Adrian, that was so good. And I had told Dan, we have to get Adrian on the pod because one, he’s really smart. Two he’s very opinionated and smart, really great podcast. And I want to share to the origin story of me meeting you, which was very early in my investing career where I was just kind of angel investing. I really didn’t know too much at the time, but I knew the fundamentals of investing, which is just investing in determined, focused, relentless, smart people. And I think a lot Jill, maybe the most prolific, amazing investor of all time who was a mutual friend of ours from Google, he had made the intro and then we had met via hashtag Angels, our investment collective. And I now have probably invested in over 100 companies and have probably met thousands of founders. And there are maybe five founders that I vividly remember exactly the pitch, the moment and the yes, and you’re one of them. I remember sitting at my kitchen table. We were having this conversation and your message is very consistent, which is remarkable because most founders looking to pivot and jiggle around a little bit. But I remember you giving the metaphor of like, why is it that we can walk into the Apple store, someone is there to greet us. They diagnose our problem instantly and very quickly. We can leave with the solution to our problem. Whereas you go into the doctor’s office and there’s a delay, somebody has to go through like records they don’t really know. And then the big question, who’s going to pay? And I remember just hearing your story and how you’re going to make going to the doctor, feel like going to the Apple store. And I was like, I’m in this in that moment and I am very, very proud to be a small angel investor and to know you. And now literally, I will send for everyone else’s benefits. I will send most of the health tech companies I look at To Adrian. What do you think? Is this going to work? Are they full of shit? Is this going to help solve this problem? Because I think you’ve had your thumb on this problem for a very long time and have really helped with the industry forward. So thank you. [00:33:26][129.1]

Adrian Aoun: [00:33:26] Well, you’re very kind. We wouldn’t be here today if it wasn’t for your support. So I really, really do appreciate it. You touched on something that’s kind of really interesting, which is you said you’ve been consistent since the start. And I think the reason for that isn’t that we haven’t, quote unquote, pivoted. The reason for this is, in some ways, I think we’ve pivoted more than almost any company you’ve ever seen. It’s just that most companies, when they start what they fixate on, like if you walk up to any of your friends, I’m starting a company, what’s the first thing they say? Great. What’s your company do? Now I don’t know we build widgets. And every single person, what they do is they fixate on the solution. And at forward we do not fixate on the solution. We fixate on the problem. Problems matter more than solutions. So from the beginning, the only thing that we’ve ever cared about, it’s very, very simple. We want to get health care to billions of people. That’s it. We don’t actually care how we do it. So today we build doctors offices. We put doctors in them. I’ll actually tell you right now, really simply there is no chance in hell that doctors offices with doctors in them ever scales to billions of people. So we know that that’s wrong. Think of how weird that is, right? I just told you that every single thing that we do today, we know 100% for certain is not what we will be doing in years. But that’s okay because once you take that mentality and you care more about the problem than the solution, you realize that all you’re doing every single day is just trying to learn the right answers. We’re just trying to iterate to a better and better solution. So our strategy is incredibly simple. We know that health care for a billion people, if I just came up to you and I said, look, I want to get doctors to the whole planet, middle of India, the middle of Rwanda. I want to get doctors to billions of people. You’re going to say, well, wait a minute, agent, where are you going to get all these doctors and who the hell is going to pay for them? Well, if I walked up to you and I said, hey, I want to get smartphones to the whole planet, I want to get smartphones in the middle of India, the middle of Rwanda. The billions of people you’re in say, well, hold on, Adrien. I think it’s already happened. I think you’re late to the game. So what do you intuitively know? Well, you kind of intuitively know that humans don’t scale in a way that technology does. Another way to say it is doctors don’t scale in a way that hardware and software does. So at Foward we only have one key insight that we believe that no one else believes, which is we believe health care should be a product, not a service. In other words, we just want to take every single thing that doctors and nurses are doing and just migrate it over to hardware and software. That way we can scale it up to billions and billions of people. We know that technology scales and we know that if we do this, we can get health care out to make health care equitable to the whole planet. So if you think about what we’re doing, you can almost think of the doctors offices that we built now, I think 25 of them all across the nation as roughly being our Model S and at some point we need to go to our Model three. So in essence, what we’re doing is we’re just watching every single thing that happens inside of them. You come in, you sit in the exam chair, you talk to your doctor about the flu, and we immediately go, Wait a minute, why did you even come in? Why not build that into the mobile app? Next person comes in, they sit in the exam chair, they talk to their doctor about their skin issues. We build the skin scanner. Next person comes in, they sit in the exam chair. They talk to their doctor about their heart issues. We build a body scanner. Slowly but surely, what you see we’re doing is we’re just migrating every single thing from doctor and nurse to hardware and software. At the limit Forward doesn’t build doctors offices. We just build hardware and software. In fact, we don’t even believe doctor’s offices should exist. And so the key from the very beginning was fixate on the problem because problems will not change. It’s not like the whole planet is going to get health care tomorrow, by the way, if they do, I’m happy to go work on the next job, climate change or you name it. I’d be very happy with that. But the thing I would just emphasize to anyone, if I can just give you one piece of advice, if I can have the arrogance to do that is please care more about problems and solutions. Your solution will change a million times. Problems tend not to change. [00:37:05][218.7]

Katie Stanton: [00:37:06] That’s great feedback and maybe double clicking on that. One of the biggest problems I think in health care are the billing codes. And you had talked about this, the lack of incentives and the lack of aligned incentives. So talk to us a little bit about your business model. How were you able to get this to even work? Who pays? [00:37:25][18.7]

Adrian Aoun: [00:37:25] So good news. There are no billing codes in our system. We don’t understand billing codes. We don’t do this ICD and CBT. And honestly, I barely understand them myself, so I’m bound to say something stupid. Whenever I talk about the health care industry, I honestly say something incredibly stupid. In fact, I’ll give you a really good story and then I’ll answer your question. The other day I was going to be on a panel with a bunch of health care systems, CEO folks and somebody on our team. This really smart girl was prepping me for it and she was like, So, you know, this one, they run a medicare system. This one, they run a medicaid system. And I looked at it and I was like, Hey, what’s the difference between Medicare and Medicaid? And she just looks at me and she turns completely white and she goes, What do you mean you don’t know the difference between Medicare and Medicaid? You run a health care national health care system. What do you mean? You don’t know the difference? And I look at her and I’m like, Well, hold on. But it’s almost like going up to Larry Page and being like, What do you mean you don’t know how the Dewey Decimal System works? It’s like, I’m not trying to build the library of. I’m going to build Google, right? And so fundamentally, like, we do not want to rebuild the existing system. We want to build the new system. And so step one for us was we said, who should be your customer just from first principles, just ask yourself, who do you want to work for? And we realized from day one, our customer should be the member to be the end user, right? The person we want to keep alive in the person we want to keep healthy. So we work directly with you, right? You pay us. That is the most simple model you could possibly come up with. There’s no fanciness here. And then we went a step further and we said, But how should they pay us? And most doctors offices are episodic. What I think of as like a repair shop for humans. You wait for something to go wrong, you pay them, they fix you. But if you think about it, that’s kind of fucked up. You want to wait for something to go wrong. You want it to never go wrong in the first place. And so actually we’re a subscription model. And so what you do is you just pay us monthly. Okay. Again, pretty basic. I think you can explain this to a four year old and they would understand, okay, now we charge $149 a month and immediately you go, wait a minute, this breaks down, Adrian, because if you want to get to the middle of the day and you want to get to the middle of Rwanda, they can’t afford 149 bucks a month. What the fuck are you doing? Walk me through it. And here’s where you just have to remember how technology works. Almost like when Elon comes out and says, I am going to solve climate change. Here’s $140,000 sports car. And you’re like, What are you talking about, dude? And then, you know, 15 years later, he comes out with this thing called the Model three or I remember the first personal computers were like $3,000 and the like the whole world’s never going to get these. And now in the middle of India, we got personal computers for 20 bucks. Well, same thing if you remember the whole pitch. The whole pitch is, wait a minute, we’re going to shift health care from being a labor based business to a technology based business. Well, once you’re a technology based business, what’s your based on hardware and software? You get to do this awesome thing, which is you get to ride this curve called Moore’s Law. And what I love about Moore’s Law is it decreases algorithmically, a.k.a today we charge $149 month. Pretty soon 99, that’s 79, then 59, then 49, then 39. And now you see where we’re going. We’re actually pretty well on our way towards 99. Go to our website and basically at all times we’re discounting to 99. So we’re getting there, we’re getting there and it’s early, but that’s where we’re going to go. So our whole mission is health care for a billion people for free. That’s what we want to do. And we’re either going to get health care to the middle of Rwanda or frankly, we’re just going to leave an enormous crater of destruction in our path to do so. There’s no middle ground for us. This is why we’re here. [00:40:32][186.6]

Dan Nathan: [00:40:33] So, Adrian, in your pinned tweet, we like to check out people’s tweets a little bit here. You laid out a little bit of a mission statement, maybe a gantlet, and you were asking the question of what’s wrong with the health care system. And you basically laid out some of which what you just talked about a little bit with the codes and all this stuff. It really is the insurance infrastructure here, but that’s primarily a U.S. thing. And you talk a lot about what you can do globally. Is it really meant to figure out how to fix the system here and then broaden it out globally? Because of the tech enabled platform that you’re building, you do have the ability to just kind of push it out and maybe some domiciles that are just easier to do it with. [00:41:11][38.5]

Adrian Aoun: [00:41:12] People tend to think of the U.S. health care system as materially different then, I don’t know, the UK health care system. People love to come to our country here and be like, Oh, you guys have shitty health care. But you know what? I’m from the UK and I’ve got great health care. I’m from France and I’ve got great healthcare. Look, I’m French originally, I’ll tell you bullshit, flat out bullshit. And so let’s just ask ourselves a really simple question what is life expectancy in the US and how does it compare to life expectancy basically anywhere else on the planet? Is there some places on the planet where people live to like 250 years old? No. If you got cancer today, are you like, Oh, no worries, I’m just going to fly to London and all of a sudden my cancer is cured. Now it’s as if I can. Then it’s literally the same fucking thing again. All we talk about is the financial innovation difference. The product delta is the thing that actually matters and the product is the same damn product wherever you go. So actually the only reason that the system matters is because the system hasn’t fostered the innovation, the system hasn’t allowed the product to develop, but at some point you just have to be like, We’re all on landlines, we want fucking iPhones. No one built the damn iPhone. We’re on landlines. I don’t care what country you’re in. And so I want to build the damn iPhone of health care. And once you have that, then I want to export that to every damn country that you possibly can to literally hundreds and hundreds of countries. But at the end of the day, to me, what system you happen to operate in, of insurance, etc. is all like inconsequential and bullshit. Can we just make the things so inexpensive that we don’t even need any of that? That’s the world I want to live in. [00:42:39][86.7]

Katie Stanton: [00:42:40] Okay, I want to go back to the practical stuff about what you get for your membership. So this is your marketing sections. Tell us where you have locations. What do people get for the $149 or $99? And I’d love to know a little bit to the data that you’re seeing in aggregate, like what are the most requested features or services that people have? [00:42:58][18.1]

Adrian Aoun: [00:42:59] So the goal of Forward, just to be super, super clear, is we want to rebuild the entire health care system for the entire planet from the ground up. So when I say everything, I mean everything from open heart surgery to delivering babies to oncology to Pharma. We want to do it all, but we want to do it all as a product. So don’t expect. Surgeon, oncologist, expect products, expect hardware and software. Now to get there is obviously a long road. It’s a long path. So it’s a little like when you got your first iPhone. I don’t know for folks that are listening in, if you remember, like the first iPhone a whole bunch of years ago, it was this like really cool phone. But it didn’t have all the apps yet. It didn’t have, I don’t know, the Spotify and the Netflix is those had to get built out over time. So you start with the phone and then every single day what we’re doing is we’re just watching what we have to refer our members out to the existing system for. And every time we do, we just say Dear God, we should have just built that in-house. So early on we realized we were referring our members out for things like genetic counseling, and we said, Let’s build that in-house. Now we sequence your DNA, we tell you what risks you’re going to have, like which diseases you’re going to develop later on in life. We then advise you on how to prevent those. Then we did things like we built a body scanner that helps us track what’s happening to your body. Over time, we built skin scanning to help us catch things like your skin cancers. We do things like managing your prescriptions. We do things like helping you with your heart health. We do a bunch around women’s health and men’s health. We do everything from doing things like your blood tests and your urine tests to helping you with things like weight loss and mental health and everyday what we’re doing is we’re just adding more and more of these services. So we become your doctor. We are your doctor. We do not upsell you. There’s no extra for blood tests or whatever. There’s no co-pays. We don’t do any of that bullshit. And then what we’re doing is just every day we’re adding more and more of these services. We’re live today and roughly, I don’t know, about 20, 25 cities, basically most major cities in the US and we’re expanding pretty fast. You can go into the locations, you communicate from your phone, from your laptop, and we’re there kind of by your side all the time. What’s pretty cool is most doctor’s offices, they want to see you once or twice a year. We want to see you 100 times a year. That’s why you’ve got this thing called the mobile app. So you can communicate with us literally as much as you want. But we’re also going to monitor your metrics and check in with you and kind of keep up and tell you what you need to be doing. Because, again, the whole goal is to be preventive. And once we identify the main things that you should be working on, we’re going to go ahead and kind of check in with you. So we’re just at the beginning of the long road that we want to go down, but already it seems to be working pretty well and people are pretty much liking it. So hopefully that gives you some sense of where we are and where we want to go. [00:45:36][157.3]

Katie Stanton: [00:45:37] I love that. Well, I’m excited for you to hopefully open one in Boulder, which is where I live. [00:45:41][3.9]

Adrian Aoun: [00:45:41] I think we’re in Denver now. We’re not in Boulder, but we are in Denver. [00:45:44][2.5]

Katie Stanton: [00:45:44] Okay, close enough. And I love that you’ve been pushing us and the industry, frankly, from this sick care system that we live in to ultimately the real health care system that we ought to live in and wonder, you know, maybe lastly, for you to talk a little bit about what are what are the open opportunities that you’re most excited about in health care like I for pathology or radiology, dermatology? What are the categories or subcategories that you’re really excited about? [00:46:11][26.5]

Adrian Aoun: [00:46:12] So if you take a step back and you think about health care, in some ways, the biggest thing that we are missing from the world of health care is and there is going to be kind of a counterintuitive view, is not actually these point solutions that anybody is going after. It’s not the, hey, let’s go build the thing for radiology and let’s build the thing for pathology, etc.. It’s actually the number one thing that we are missing today is actually that the rate of innovation in health care is abysmal. And so when you think about why the mobile computing revolution took off, it really comes down to the fact that 22 year old at Stanford named Kevin Systrom could sit at home, have an idea and push it out to the world and boom, we all have Instagram or Daniel Ek can push out Spotify to the world like that. And so the cost of innovation goes down, which means the rate of innovation goes up. And like anything, you get this compounding effect. And so today, the biggest problem in health care is actually just that the costs of innovating in health care is wild. It’s just insane. And so the number one thing that I think that Ford can bring to bear is actually just lowering the cost of innovation. Namely, if you are at Kaiser today, let’s just take a simple example and you just say, you know what, we want a change in people with high blood pressure. We want to change them from this med to this med. You literally I’m not joking. It will take you roughly 1 to 2 years to get Kaiser to switch the med that they use. If you want to do it it forward, take you on and I’ll do it this afternoon. Roll out that change. You’re good to go. And so what you realize is that that pace of innovation is wild. Now, when you can innovate quickly, you can change the world in a super rapid rate. And so I think that the biggest effect that you’re going to see in healthcare, the things that are really going to change the world of healthcare is not that forward, is going to come across all these discoveries, but is that forward over time will enable others to come across all these discoveries? And to me, that’s the part that’s going to be really fascinating when the people who want to work on radiology don’t have to go stand up all of this nonsense, but that they can actually go ahead and build on top of the tools that we’ve built. Or them. And kind of start to experiment at a super, super rapid rate. To me, that’s where the world is going to become incredibly interesting. [00:48:21][128.9]

Dan Nathan: [00:48:21] Adrian It seems very web three for health care as what you just described in some ways. [00:48:25][4.2]

Adrian Aoun: [00:48:26] If you put Web three anywhere near my company, I’m literally come through this screen and I don’t know what I’m going to do, but it ain’t going to be pretty. [00:48:34][7.7]

Katie Stanton: [00:48:34] Way to wrap up the podcast Dan. [00:48:36][1.6]

Dan Nathan: [00:48:37] A year ago. You might have been really open to that. [00:48:39][2.4]

Adrian Aoun: [00:48:39] No. Literally ask Katie. She’s like, Adrian, what sort of deals are you investing in? And I’ll literally reply, anything but crypto and NFT. I need things that actually build value. Come on, build something. Make something. Use your own two fucking hands. That’s my deal. [00:48:55][15.9]

Katie Stanton: [00:48:56] Okay, let’s end on a better note. Who inspires you? Who are the founders? Who are the writers that you get excited about? [00:49:05][8.7]

Adrian Aoun: [00:49:06] I’m maybe not that original, but I had the opportunity. I was very lucky early on in my career. I get the opportunity to work for Bill Gates more recently as I worked a lot for Larry Page. I mean, I’m an engineer in my core, and I think that people who are very, very strong, multimodal engineers are the people that I tend to gravitate towards. Working with Larry Page, his ability to both think at large scale and across domains is pretty incredible. You would sit in a meeting with Larry talking about how to construct the world’s largest building, which we were working on, while at the same time, he would say, yes, but what you’re missing is that one time when we were putting a satellite in space, we use this technology. That ability is really, really fascinating. That’s something that I feel is really incredible. And I took with me now in some ways maybe something that impresses me more because it’s maybe something that I don’t think I will ever be good at, whereas I do think I can get good at the Larry Page thing was actually in some ways I think something that Steve Jobs has that you don’t see and maybe a Howard Hughes or a Larry Page or an Elon Musk is a little actually what they talked about at the code conference. Steve surrounded himself with poets and artists in a way where he surrounded himself with non engineers. In fact, maybe not say something mean, but maybe wasn’t the best engineer. If you don’t believe me, go open the apps on your iPhone. I just got this new iPhone on Friday and it makes me log in to 400 different apps with 400 or four usernames and passwords. It’s like, well, obviously that was parallel architecture. And so you can imagine that actually there’s a bunch of things that he engineered poorly, but he designed fantastically. And I think there’s an element of art in what he did that you don’t see in pure engineering. And that’s something that I would absolutely love to learn or experience. And frankly, I don’t think I’ll ever be great at that. I had the opportunity to go work with him. There was another potential acquirer. We had an offer from my last company to go to Apple instead of Google, and part of me wishes maybe that was a better road to have taken. So I don’t know. I can’t replay history, but certainly that’s someone who inspires me as well. [00:51:08][122.3]

Dan Nathan: [00:51:09] Well, Adrian, we really appreciate you joining us here straight from the code conference to okay computer with Katie and myself. Really fascinating stuff. What’s going on with Forward and I think you sitting there or standing on a stage in front of many of your tech peers who probably get a lot of the stuff that you’re talking about, but they haven’t thought about applying it to such a big problem the way you are doing it with health care. So for us, it’s really fantastic to have you with us. We hope you’ll come back and just kind of update us on the progress of work. So thanks for joining us. [00:51:36][27.4]

Adrian Aoun: [00:51:36] If you are willing to have me back and not talk about Web three, I am willing to be back, my friend. [00:51:43][6.2]

Katie Stanton: [00:51:43] It’s a promise. [00:51:44][0.3]

Dan Nathan: [00:51:44] You got it, man. Thanks, Adrian. Adrian Thanks again to our presenting sponsor Current and our supporters Masterworks and Taboola for bringing you this episode of okay Computer. If you like what you heard, make sure you hit, follow and leave us a review. It helps people find our show and we want to hear from you. Email us at contact at risk reversal. Follow and connect with us on Twitter at okay computer pod. We’ll see you next time. [00:51:44][0.0]


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