Welcome to Healthcare PittStop. Today I have with me Lisa Suennen, a friend I first met as part of the Health 2.0 community. Lisa’s had a varied and successful career, both as an entrepreneur and investor. Most recently she took on a role as a senior managing director for healthcare at GE Ventures, and previously she founded CSweetener, an organization that matches women executives with mentors. I read her blog, Venture Valkyrie, regularly, and recommend the books she wrote with David Shaywitz, Tech Tonics and Entrepreneur. Lisa, I want to thank you for coming on today.
My first question is, what are you really looking for in an entrepreneur and innovator?
Of course we’re always looking for a great idea and equally important is a great entrepreneur, by which I mean someone with vision but also the ability to roll up their sleeves and execute. It’s a bit of a “needle in a haystack” exercise because so much of it is intangible. And so much of it is how you got to be sitting in front of each other. But I think in the end what most investors are looking for is companies in their area of interest which have demonstrable proof they can perform, either as human beings, entrepreneurs, or proven by revenue and the like. It’s always a challenge. It’s as much a dating exercise as it is a fundraising exercise.
In one of your blogs you talked about how one needs to be careful about doing pilots, both from the entrepreneur’s and the hospital’s perspective. A young company is constantly looking for ways to get a pilot in a hospital. They think that’s going to be the path to gold. Any comments about that?
Pilots are so fraught. The problem is that there’s no permanent commitment to the company if the pilot goes poorly—or well. It’s sort of, we’ll try you for a while and then God knows. And the problem with that is a lot of times the people who commission the pilots are not the people who are in the flow of buying decisions. So I usually recommend to companies that they don’t do pilots unless they have a contract associated with them, something that says if at the end of this pilot these specific milestones have been met, we’ll agree to work with you. And here are the terms on which we would work with you.
I’ve seen a bunch of pilots drag on forever. What are some other mistakes you’ve seen startups do?
Worry too much about dilution at the expense of raising enough capital. Getting too ambitious about their sales targets and not planning for the long time it often takes to get deals closed. That’s a big mistake that’s made all the time. I can’t tell you how many business plans I see that end in “on the 5th year, we will have a hundred million in revenue.” And the number of companies I’ve seen achieve that is close to zero. I think a big mistake is not hiring a smart sales marketing person early, getting wrapped up in the technology and not thinking enough about customers. I met with an entrepreneur who’s working at a hospital incubator—accelerator if you will—and I asked them how many other hospitals they talked to about their product and they said zero. And you’re building a custom product for this one hospital you’re never going to be able to sell to anyone else. Get outside and talk to customers. Talk to 20 or 30 or 40 of them before you lock in your product. Anyway, that’s a huge mistake not spending enough time on the front end understanding customer needs and understanding also how competitors—including competitor inertia—are standing in your way and what you need to do about it to differentiate.
How about some of the best pitches you’ve heard. Are there 1 or 2 that stand out for you?
I’m attracted to things that are really different. I hear the same story over and over again about population health or telemedicine or whatever, not to pick on any particular field. But every once in a while somebody gives you something completely different. And it’s solving a different problem than others have gone after. I can think of one in particular that I shouldn’t name but where they came in out of left field with an interesting health insurance product. And when I did due diligence on it, a hundred percent of the people I called said it was a bad idea, which proved to me it was probably a good idea because they were so threatened by the idea. So I think about things like that. I always enjoy being taken off guard a little by something different. It’s really hard to stand out from the crowd. When you see a thousand deals a year, which is pretty typical, you’ve got to stand out somehow, either because you’re notoriously excellent as a human at doing this or because you’ve got an unusually good idea that others aren’t doing in droves.
You used to be at some smaller funds, and most recently you transitioned to GE. GE Ventures is a really interesting role because you have the opportunity to enable a broader strategy for healthcare change. Do you have any thoughts on what you’d like to do at GE, or what GE would like to do to really be transformative in healthcare?
GE is a really interesting platform because they are a very old company—started by Thomas Edison—and they have gone through many transformations over the years. And they are going through another one in becoming a digital company. I think it affords a huge opportunity through venture investment and other innovation activities to help advance that effort and speed it along and be the tip of the spear out there looking for where the company should be headed over the next several years. They have—not unlimited resources but—incredible resources and also incredible knowledge in the organization. Not that that always means the people in the organization know the future because often it’s unfamiliar. Most of them are heads down, worried, making their numbers for this year, but the opportunity to see that sort of possible transition path from where it is to where it could be, we get into some really fulsome conversations on that. And that’s a real pleasure. Plus GE just touches so many things and is really in every country in the world pretty much, and we have tremendous, experienced people working in the ventures group.
Do you look at companies in a particular vertical, like artificial intelligence, machine learning, or analytics? Or do you look at broader problems that need to be solved in healthcare?
I think of it more from a problem-solving approach. To me that’s much more interesting. Like, how do you improve the operations of hospitals, clinically and financially? How do you improve the operations of folks that are creating precision medicine products and help them do better manufacturing—supply chain, etc.? How do you make the patient and provider experience of healthcare better? How do you improve clinical outcomes in a world that demands lower costs? Those are the kinds of themes that we look at. Then, if it’s an AI solution that fits that, great. We’re interested in health tech, we’re interested in tech-enabled services, in minimally to non-invasive medical devices, precision medicine tools—all of those areas are of interest to us.
One thing I’ve seen around the country are these evolving innovation centers that are sponsored by healthcare systems. Providence had one recently; University of Colorado; UPMC’s been around for a while; Dignity has an effort to do that. Do you have any thoughts on how to make these solution centers more likely to succeed? Often they don’t have all the pieces they need to go to market with that intellectual property.
This is such a complicated topic. I think one of the things they have to do is get the operations people involved. To me the idea of having innovation as a separate unit off to the side with different people defeats the purpose of the whole exercise. You have to have the core operations people actively up to their elbows in these types of programs or they’re never going to adopt what comes out of it on the other side. So I think it’s a mistake that many of these groups make. When you wall off innovation, I’m not sure what that does for you.
I think the other thing is that they often forget to define over what period of time they’re looking to adopt these innovations. Are you trying to figure out what you’re going to look like 5 years from now or 5 months from now? Focus accordingly, and bring the right resources to bear accordingly, because there are very different strategies for those two things. Especially when you’re doing venture investing in these programs, you’ve got to have people that know how to do venture investing because it’s real easy to lose your money; it’s real easy to turn a good company into a bad investment through mismanagement. So I think you have to have the right team assembled, from core operations, from the experience side of venture innovation, and you have to avoid creating enterprises that serve you and you alone— to be willing to partner and share across other enterprises. So some of the models I’ve seen that take their own assets and spin them out are very interesting because sometimes inside the organization it’s hard to build an entrepreneurial endeavor.
As you pointed out in your book, nobody has the whole package. You have the entrepreneur, you have healthcare, you have the investor, and somehow you have to figure out that mash-up to come up with a solution that’s going to win when you go to market. That’s really tough.
One thing I love about you is that you have such passion for transforming healthcare. You really bring yourself beyond your job. You’ve written books. You have your blog. Can you tell me a little more about CSweetener and how that’s coming along?
Thank you for plugging the blog. It’s venturevalkyrie.com. And also the podcast, Tech Tonics, which is on iTunes. We talk about the intersection of technology and health and the people who are passionate about that. CSweetener is a not-for-profit company I started last year with another gal, Lisa Serwin, in recognition of the challenge women have as executives rising and staying successful in companies. Unfortunately the statistics are pretty grim about women who even make it to the C-Suite, and once there, they generally get judged in a much harsher way than others. One of the things they often lack is the network of experienced mentors to help them succeed, and finding those people is tough. You run into them at a conference or they may not live near you or they may not be in your company’s mentoring program or what have you. So we decided to do like a match.com of women executives to mentors, where we sign up women who are in the C-Suite—or on their way to the C-Suite soon—as the mentees, and on the mentor side it’s men and women who are experienced C-Suite professionals who are willing to give their time. It’s just out of the gate and it’s going gangbusters.
That’s awesome. It’s really key to be able to give back. Certainly you have vast experience. I agree with you that women are the primary decision makers but they don’t get to make the bigger decisions so much, right? And it’s very difficult for them to stand up.
My most hilarious board meeting ever was on a board of a company making surgical tools for gynecology, where every single person on the team was a man, and every single person on the board besides me was a man. Listening to them talk about what happens on a gynecology visit—I swear to God, it was surreal. So, yeah, believe me, I’ve seen it.
[Laughter] By the way, Lisa, I’ve read your book. It was an extremely worthwhile read. I recommend it to everyone out there. I really appreciate your taking the time and sharing your experiences with me and [the listeners]. And I thank you very much. I look forward to hearing all the successes at GE.
Thank you, Alan. It’s always a pleasure to talk to you.
Tags: GE Ventures, healthcare change, healthcare entrepreneurs, healthcare innovation, women executives