Categories

Tag: Innovation

The Stanford Lectures: So, Is Software Really Eating the World?

Here at THCB  we really can’t think of many lectures we’d rather sit in on than Peter Thiel’s Stanford course on entrepreneurship. And we can’t think of a better guest to catch than Netscape co-founder Marc Andreeson.  In this talk, Andreeson talks about how healthcare IT is changing in the Facebook and Big Data Era era, the privacy issue and how the cloud may or not be eating software.

Is Software Eating the World?

Marc Andreessen’s most famous thesis is that software is eating the world. Certainly there are a number of sectors that have already been eaten. Telephone directories, journalism, and accounting brokerages are a few examples. Arguably music has been eaten too, now that distribution has largely gone online. Industry players don’t always see it coming or admit it when it arrives. The New York Times declared in 2002 that the Internet was over and, that distraction aside, we could all go back to enjoying newspapers. The record industry cheered when it took down Napster. Those celebrations were premature.

If it’s true that software is eating the world, the obvious question is what else is getting or will soon get eaten? There are a few compelling candidates. Healthcare has a lot going on. There have been dramatic improvements in EMR technology, healthcare analytics, and overall transparency. But there are lots of regulatory issues and bureaucracy to cut through.

Education is another sector that software might consume. People are trying all sorts of ways to computerize and automate learning processes. Then there’s the labor sector, where startups like Uber and Taskrabbit are circumventing the traditional, regulated models. Another promising sector is law. Computers may well end up replacing a lot of legal services currently provided by humans. There’s a sense in which things remain inefficient because people—very oddly—trust lawyers more than computers.

It’s hard to say when these sectors will get eaten. Suffice it to say that people should not bet against computers in these spheres. It may not be the best idea to go be the kind of doctor or lawyer that technology might render obsolete.

Continue reading…

Time For Biopharma To Jump On The “Big Data” Train?

In a piece just posted at TheAtlantic.com, I discuss what I see as the next great quest in applied science: the assembly of a unified health database, a “big data” project that would collect in one searchable repository all the parameters that measure or could conceivably reflect human well-being.

I don’t expect the insights gained from these data will obsolete physicians, but rather empower them (as well as patients and other stakeholders) and make them better, informing their clinical judgment without supplanting their empathy.

I also discuss how many companies and academic researchers are focusing their efforts on defined subsets of the information challenge, generally at the intersection of data domains.  I observe that one notable exception seems to be big pharma, as many large drug companies seem to have decided that hefty big data analytics is a service to be outsourced, rather than a core competency to be built.  I then ask whether this is savvy judgment or a profound miscalculation, and suggest that if you were going to create the health solutions provider of the future, arguably your first move would be to recruit a cutting-edge analytics team.

The question of core competencies is more than just semantics – it is perhaps the most important strategic question facing biopharma companies as they peer into a frightening and uncertain future.

Continue reading…

Is the Center For Innovation Innovating Too Fast?

One of the few health policy issues that receives bipartisan support is the need to dramatically alter the way providers are paid, shifting from “paying for volume” to “paying for value” to alter the trajectory of health care spending while improving health care quality.

To facilitate this shift, the Affordable Care Act equipped the Centers for Medicare & Medicaid Services with a range of cost-cutting and quality-enhancing tools―the most significant of which might be its new Center for Medicare and Medicaid Innovation. In this blog post, we share insights from recent research funded by the Robert Wood Johnson Foundation on the Innovation Center’s new role, organization, and model selection criteria.

Based on interviews with senior leadership, it’s clear the organization sees its role as two-fold: complementing existing efforts to innovate; and delving into new ideas.

Most of the Innovation Center’s efforts to date have focused on the former―implementing congressionally-mandated demonstrations or ideas that Congress or policy experts have already conceived (e.g., accountable care organizations). More recently, the Innovation Center has begun to seek new ideas from innovators across the country and to promote bottom-up innovation―primarily through its Innovation Challenge.

Continue reading…

Innovation is Key to Controlling Health Care Costs

In the battle over health care that lies ahead, how strongly will the public rally around the need for innovation in confronting health care costs?  Does the public view innovation as relevant to the challenge in the first place?

These aren’t idle questions. The news that growth in overall national health care spending has been moderating has raised speculation that innovations in payment and health care delivery are already paying off, notwithstanding the unquestioned impact of the Great Recession.

Looking ahead, uncertainty over the fate of the Affordable Care Act and the likelihood of federal budget cuts yet to come has many fearing that innovations will be vulnerable. And it is not just federal spending that will be at risk. Hospitals and health plans will all be watching their margins carefully to assess how far and how fast they can keep making investments that support innovation (such as investments in healthcare IT, analytics and care coordination) but that may take months or years to generate a return.

All of which places the role of innovation in controlling costs center stage. After all, this is what undergirds the Triple Aim that so many health care leaders have embraced as the only realistic alternative to arbitrary cutbacks in health care services and spending. Health care leaders can defend innovation if they have public support. But do they?

Continue reading…

Seriously: Is Digital Health The Answer To Tech Bubble Angst?

As an ever increasing amount of money seems determined to chase an ever greater number of questionable ideas, it’s perhaps not surprising that inquiring minds want to know: (1) Are we really in a tech bubble? (2) If so, when will it pop? (3) What should I do in the meantime?

I’m not sure about Question 1:  I’ve heard some distinguished valley wags insist we’re not in a tech bubble, and that current valuations are justified, but I also know many technology journalists feel certain the end is neigh, and view the bubble as an established fact of life – see here and here.  The surge of newly-minted MBAs streaming to start-ups has been called out as a likely warning sign of the upcoming apocalypse as well.

I have the humility to avoid Question 2: as Gregory Zuckerman reviews in The Greatest Trade Ever, even if you’re convinced you’re in a bubble, and you’re right, the real challenge is figuring out when to get out.  Isaac Newton discovered this the hard way in the South Sea Bubble, leading him to declare, “I can calculate the motions of heavenly bodies but not the madness of people.”

I do have a thought about Question 3, however – what to do: reconsider digital health — serious digital health.

Here’s why: Instagram and similar apps are delightful, but hardly essential; most imitators and start-ups inspired by their success are neither.  It doesn’t strain credulity to imagine investors in these sorts of companies waking up one day and experiencing their own Seinfeld moment, as it occurs to them they’ve created a portfolio built around nothing.

Continue reading…

Lightning Strikes Datapalooza


It didn’t appear on the lightning strike map, but lightning did indeed strike a young medical student inside the Washington Convention Center right in front of about 1,500 amazed spectators on the first day of The Health Data Initiative Forum III: The Health Datapalooza.  Everyone is fine—though our medical student may never be the same again.

Actually, this story began long before Datapalooza, of course.  Fourth-year medical student, Craig Monsen, and his Johns Hopkins Medical School classmate, David Do, started collaborating on software applications soon after they met in first-year anatomy class.  Craig graduated from Harvard with degrees in Engineering and Computer Science and David from University of Minnesota in Bioengineering.

They’re not quite Jobs and Wozniak—neither dropped out of anything—yet—although Craig, at least, is planning to skip or delay residency.  You see, after seeing the Robert Wood Johnson Foundation (RWJF) Aligning Forces for Quality Developer Challenge last year—they got very serious about bringing to life their vision of new applications that could help patients and consumers make great health care decisions.

Continue reading…

Who’s Running Your Company: You or Your Client?

Venture capitalists like to use the word “traction.” It sounds all glamorous, like an ad showing a Range Rover toughing it out up some impossible incline. But when I hear a company talk about ‘early traction’ in its pitch, I’m always leery of the “First and Worst” effect.

My first customer at my first company was a grandfatherly CIO at a big hospital. Of course I wanted to please him, and was enthusiastic about doing so. But I was also very focused on taking over the world with our software. I told him, “We’ll change anything you want about the product, as long as it’ll be good for all our future [gazillion] customers.”

Of course, The Grandfather wanted lots of one-off customizations that would really only be good for him. I told him that all the time we spent doing custom work for him was going to make us less profitable, and less likely to be able to sell the product to other people. And to survive long enough to do any improvements to the product at all, we needed to be profitable. He seemed to think that made sense, and begrudgingly agreed.

In the end this arrangement was a win for both of us. Our product was a home run for his hospital. We got an evangelical reference customer, and his hospital helped make our product better. The precedent we’d set with The Grandfather gave us the courage to refuse other customers who wanted one-off changes. Sure, we could have done this for one or two hospitals, but by the time we got to hospital 300, it would have been a mess.

Continue reading…

Healthcare Needs a Quaking Aspen

For the majority of my career I have been obsessed with creating technologies to modernize our largely dysfunctional U.S. healthcare system.  To me, it is very clear that the emergence of cloud computing has finally created the opportunity to truly address this daunting problem. Cloud-based solutions are the only viable option for effectively getting providers, patients and other key stakeholders online so that the necessary efficiencies find their way into the system.

To the rest of healthcare IT, however, it is not so clear, as witnessed by the lack of truly cloud-based companies in the marketplace.

Most of the large, established players in this industry continue to rely on the outdated client/server or older technologies, such as MUMPS.  Some of these companies’ products trace their roots as far back as 1969.  These companies and their software were built before the world wide web, before Facebook, the iPhone and iPad, salesforce.com – and even email, for God’s sake!  There also exists a tremendous amount of confusion related to the morass of small, bootstrapped EMR companies, which number in the hundreds.  People do not understand the difference between buying a monolithic single-purpose app to utilizing a robust, cloud-based platform approach.

This lack of understanding has made me realize that we need a better way to explain what the cloud has the power to do, and what true cloud-based technology even is. Easier said than done!

I was recently afforded a breakthrough, though unfortunately at the expense of an ancient treasure.  Allow me to explain:

Continue reading…

Innovation as a Cliché

For the last six years, I’ve written this blog under the title “Medinnovation” with the tag line, “Where Innovation, Health Reform, and Physician Practices Meet.”

The novelty of use of word “innovation” is wearing thin.  And for good reasons.

Sad to say,  as a piece in the Wall Street Journal says. “Companies love to say they innovate, but the term has begun to lose its meaning.” Companies are touting chief innovation officers, innovation teams, innovation strategies, and even innovation days.

  • Companies last year mentioned “innovation” 33,552 times in their annual and quarterly reports.
  • Publishers issued 255 books in the last 90 days with “innovation” in their titles.
  • 43% of 260 companies  said they have appointed chief “innovation” officers.
  • 28% of business schools use the word “innovation” in their mission statements.

So what is “innovation”?

Continue reading…

Activist Seeds – The Latest, Subtle Trend in Seed Investing

When I entered the VC business 10 years ago, I tried to keep thinking about venture capital as a business, where the key focus area was on meeting the needs of our target customers — entrepreneurs and limited partner investors.

In the case of entrepreneurs, those needs have changed radically in these last 10 years.  The surge in seed investing over the last few years has been well-reported and analyzed.  With advances in cloud computing, open source infrastructure, development tools and general “Lean Start-Up” techniques, entrepreneurs need less capital than ever before.  And when entrepreneurs’ needs change (i.e., requiring less capital), smart investors adjust to meet those new needs.  Hence, the rise of angels, super-angels, incubators, accelerators, micro-VCs and VC-led seed programs.

But as the “Great Seed Experiment” (as my partner, Michael Greeley, calls it) matures, a new trend is emerging.  Entrepreneurs are beginning to learn the difference between what I’ll call Passive Seeds and Activist Seeds.  And entrepreneurs are learning that the difference between the two, although somewhat subtle, matters greatly.

Passive Seeds are when a VC invests a small amount of money (for a $200-500M mid-sized fund, typically $250k or less, for a large $1B fund, perhaps $500k or less), to achieve a very small amount of ownership (typically less than 5%) to simply create an option to participate as a more meaningful investor in the future.  Passive seed programs get most of the press attention because of their sheer volume.

Continue reading…

Registration

Forgotten Password?