Hi everyone, I'm really excited to bring you
this podcast with Dr. Sohaib Siddiqui. Sohaib
is the Managing Partner at Healthcare Ventures
for Kettlebuck Family Office, which is his own
family office. He's also an Innovation Fellow
for Women's College. He's on the advisory board
of GE Healthcare. He's an entrepreneur in residence
at the Faculty of Medicine and University of
Toronto. He's an executive in residence at the
Toronto Innovation Acceleration Partners and
he's the chief executive officer of Medley Therapeutics.
We had an amazing discussion and we talked about
what he looks for in general partners and funds,
what he looks for in founders, upcoming tailwinds
in healthcare investing. Is charm or aptitude
a better predictor of success and founders and
outsiders innovate in healthcare? Is contrary
an opinion in healthcare and much more. I hope
you enjoy this conversation as much as I did.
Thank you. Hi, it was great to have you here
today. Thanks for joining me. Thanks for having
me. I really appreciate it. To get started, I'd
love for you to talk about your childhood. Our
childhood defines us in some ways. There are
some things we learn from our childhood which
help us, and there are some things at times we
have to unlearn from our childhood. Talk to me
about your childhood and talk to me about how
it has shaped you into who you are today. Sure.
No, thank you. So, my childhood, I would say,
I think I was blessed to have an overall good
childhood. But having said that, I think I saw
quite a bit of adversity over time. So, I was
born in Boksan originally. I spent a few months
there. So I don't really recall much of it, to
be honest. My family moved a couple of times.
My dad was in some of the banking industry and
had a few moves. So I lived in Egypt for a couple
of years. I lived in England for a couple of
years, all kind of in my very, very early days.
So I only have a few fleeting moments of kind
of recollection of any one of those places. Apparently
Arabic was one of the... first languages I began
to acquire as a toddler. I don't remember any
of it anymore really, but then we came to Canada
in the early 90s and you know it was kind of
a serendipitous move for my parents. You know
they applied for immigration in a few countries
and Canada was kind of the first one that came
up and very typical to the immigrant story where
you know didn't have a lot of money. uh parents
looking for a better life you know they really
struggled they really sacrificed um you know
just in the first few months of moving into canada
we moved in a very very cold environment that
we weren't used to as a family that's a shock
to the system um my dad three months four months
into working a job actually one evening got t
-boned by a drunk driver uh had a fairly you
know pretty extensive accident a couple months
later my grandfather passed away I was sick,
I needed surgery. So like the first year in Canada
was kind of just this concept of when it rains
it pours. And really, my parents struggled. Many,
many years, I, you know, I witnessed my family
struggle a lot. And, you know, it was a big reset
for our family. But having said that, looking
back at it, I don't think I appreciated the struggle
at that time. I don't think I, you know, I was
never felt, you know, my childhood, I guess,
was in a way that I don't think I felt, you know,
poor or lacking of kind of support and resources.
I think my parents were really good. I think
they made the best of, they could. So, you know,
they gave me the best they could afford. They
sent me to a good school. You know, my wishes
as a kid growing up, they fulfilled to the best
of their ability now. And, you know, it does
shape you, right? It sort of appreciating the
fortitude and the kind of focus and diligence
of my parents working around the clock to make
the next generation better. And that's kind of
something that I aspire to with my kids. I've
got two young daughters now. I would say their
upbringing is better than my upbringing. And
I think every subsequent generation, I think
everyone hopes that the next generation is just...
that much more privilege. So, and I think that
kind of is what kind of drives me in my career,
right? It's like, you know, I want intellectual
stimulation, but I want to be able to spend time
with my family. I want to provide a good life
for my family. So I think the goals are pretty
common, right? I think it's appreciating the
struggle on how it shapes you for the good time.
So unconsciously does really drive a lot of the
push and drive that I have to do the best that
I can. for myself. It's a common theme I find
in people I speak with is they have moved a lot
in their childhood and they have been through
hardship. It's something I think about a lot
and I have two young daughters as well as I want
to give them a very comfortable life. Do you
think it's necessary to have hardship in life
and do you think the degree of hardship correlates
with the degree of perseverance and grit you
develop later on? I mean, look, like people's
lives are relative. The word hardship is a relative
concept. You know, I would view many things in
my life as a hardship, but in a relative sense,
I'm very privileged. But my struggles are different
than other people's struggles. I mean, you and
I, we're both clinicians. I mean, I would argue
being a clinician is a hardship. But to the other
person, their dream was to become a clinician.
And that may not have transpired for many people.
They always wanted to be a doctor. They wanted
to be a nurse. And for whatever reason, it couldn't
happen. So hardship, I think, is a relative concept.
Having said that, I do think hardship is a necessary
part of one's journey. I do think we're all tested
in every way. I think it's unfair to compare
yourselves to others, but I think it is a human
trait and perhaps a human flaw. You do compare
yourselves to friends, peers, and how are they
doing? And you may notice, hey, that other person,
the grass is greener on the other side, but if
you take it a deep down analysis, like, yeah,
they might be better off in certain ways, but
they may have hardships in a way that you may
never even begin to kind of appreciate. So I
think we're all kind of in our own journey, in
our own ways we're blessed and other ways we're
tested. But I think the testing is important.
Does more hardship lead to more perseverance,
more grit? I don't know. I think over the years,
I've kind of tried to look at it where I think
I want to. I'm not saying that I do a good job
at it, but I certainly aspire to appreciate people's
achievements. in the relative context of their
environment. So if they started out with very
humble beginnings, are they going to be the unicorn
tech star founder? Maybe, maybe not. But maybe
getting a regular job is a fantastic achievement.
Maybe getting an undergrad degree is an exceptional
achievement. Maybe the first one in their family
to achieve that. I think that's a fantastic achievement.
For other people, the bar maybe is different.
you know, being a tenured professor at Harvard
is the trap. But if you come from a family of
tenured professors, like your, you know, the
delta in which you have to achieve is different.
So I really do try to view it in terms of like,
what were the substrate that you were given?
What did you do with it? How far did you achieve?
So I think the objective comparison between people
I think is kind of unfair. but I do try to look
at it. And it does come into the entrepreneurship
world too. We'll get into it in a little bit,
but comparing different founders, what they had,
what they made of it, what indication were they
going at? Some founders are very blessed. They
don't have to raise money because they've got
really wealthy family and friends and others
who refinance mortgages, had divorces to keep
their things afloat. So I think it's relative,
but I do think the perseverance part. is important
and it certainly is from the entrepreneurial
side of it. And I actually think the perseverance
part will get into this as well. I think it's
an important part of the EQ of evaluating companies
and founders. Can they kind of survive the marathon
that this whole journey is, right? Another common
theme I find is entrepreneurship is innate. people
who are founders were always entrepreneurial
and they would say this is just how I am, this
is how I'm programmed to be. Do you think entrepreneurship
is innate and what was your first entrepreneurial
venture? Yeah, I think, look, I think entrepreneurship
is a is a byproduct of your environment, regardless
of what your career path or job path has been.
I mean, I think many of us work jobs and kind
of at some point reach a point where like, why
is my job functioning the way it is? Why am I
struggling in this aspect? Or why is this particular
procedure failing at 5 %? You know, I think there's
certain people are like, yeah, I'm happy with
that. And I'm happy with the status quo. And
there's nothing wrong with it. I do think perhaps
there's a subset that says, hey, ask likes to
ask five more questions and be like, why is it
inefficient? Why doesn't it work? If you're a
clinician, why are certain patients getting more
sick than others? If you're in the food industry,
why are certain things, why is food more expensive
here than other places? So I think entrepreneurship
is really a byproduct of the environment that
you're in. And I think it forces you to think
creatively, being like, look, the status quo
has been like this. But if I... you know, take
the algorithm and change it upside down, I can
do something with it. Like take clinicians, right?
Like we are very trained to follow algorithms.
Like that's what we have been kind of trained
to do. We've memorized algorithms, we publish
algorithms, we read other people's algorithms.
In fact, when we fall outside of the algorithm
is when we get slapped on the wrist or get sued
or, you know, go up in front of a disciplinary
board. But the entrepreneurship world is actually
quite the opposite. Like, let's take this algorithm.
Let's tear it up. Let's understand why the algorithm,
what's the blind spot in the algorithm. And can
I insert a medical device, a technology, an algorithm,
a therapeutic to kind of solve that delta in
that algorithm? And can I make an impact? Can
I make money? Can I scale it? Can I improve outcomes?
So I guess it's not for everyone. but I do think
many of us fall onto it by serendipity. I wouldn't
have expected to be in the career that I'm in
now. It's kind of just a random assemblance of
steps and ideas that have happened to get me
here. Talk to me about your first entrepreneurial
venture. The first one really started out as
our own kind of family business. I think my dad
took a similar path in his own life where He
worked in a particular industry. This happened
to be banking for many years. And over many years,
realized, hey, I have good bosses. I have bad
bosses. I have departments that work really well.
I have departments that don't work very well.
And whether it's a pioneering mindset or a bit
of arrogance, perhaps a bit of both, at one point
my dad had reached a point like, I can do this
job better than my boss. And then I can do this
job better than this bank. So actually his first
entrepreneurial venture, which became the kind
of the focus of our family office, was starting
an Islamic bank, because that was a kind of a
gap in the market that he identified. He's like,
okay, there's other banks out there trying to
develop, you know, banking practices in line
with sort of Islamic teaching principles. They're
not doing a good job at it, or they're kind of
on the ball kind of do it. So that was a learning
process. Did it go well? In certain ways it did.
It was kind of, it was the first in Canada. Did
it go smoothly? By no means it didn't go smoothly.
But I think, you know, that really changed the
whole formula for my family and myself kind of
taking a back seat in it. And I, and I, and I
too kind of had that kind of exposure saying,
Hey, I, you know, do a career where I learn the
foundational principles, be good at that career.
But then at some point, sooner or later, transition
to, can I look and contribute in that career
at the 30 ,000 perspective? Can I build something
on my own? And that's how I kind of started to
build my own fund within the family office, trying
to change status quo, albeit in a very small
way. I don't want to overinflate what we've tried
to achieve, but can we do things on our own?
Can we own a little piece of the pie? for our
own and I think that that ownership and that
kind of piece is you know it's it's kind of springboarded
me into a lot of the other stuff that I do. In
some ways we're all born entrepreneurs we hear
about children endlessly asking why and it sounds
like we educate them out of entrepreneurship
in some ways. I'd love for you to comment on
that and then if you can go deeper into the thesis
of your fund? What are you investing in? What
stage? Yeah, no, I think, you know, for many
years, I think standard education really does
teach you to follow a very predictable path,
right? High school, go to undergrad, maybe you
do a master's, you do some advanced degree. Maybe
you go do an MBA, grad school, PhD, like it's
a very linear path and job opportunities kind
of follow that. Like if you want X number of
dollars, you get an undergrad degree. If you
want a little bit more and more responsibilities,
you go to a master's degree. I think that was
the case maybe 20, 30, 40 years ago. I think
the job market and expectation is very, very
different now. And, you know, growing up, maybe
I asked, you know, those kinds of questions and
I was told, no, no, don't think too creatively.
fall in line because that's the predictable piece.
I think, once again, going back to my upbringing,
because we were immigrants, because we struggled,
I think a lot of the kind of emphasis on the
career path was more driven out of insecurity.
Like, hey, I want you to have a stable career,
so pick a stable path. In our culture, it's often
a doctor, it's a lawyer, it's an engineer, it's
an accountant. These are predictable, stable
paths. Doing anything deviating from that is
kind of seemed as too risky, unpredictable. you
know, how are you going to, so it's really, you
know, not for many nefarious intent, but it's,
it's, I think, a byproduct or the crush that
you develop from, you know, insecurity of financial
instability that were kind of taught to, you
know, don't ask too many questions, put your
head down, study, get good grades, get good marks,
and like move on to the next thing. And I think
it's been a big career shift, even when I did
it. It's been about six, seven years now. In
the beginning, a lot of my colleagues who are
positions or in sort of the life science PhDs,
they're all like, hey, what's going on? Is everything
okay at home? Why did you study so hard and kind
of leave that all aside to do what you're doing
now? I don't think they understood. Now, I think
it's much more common for folks to have a couple
of different career changes in their life. It's
very rare now that you find people I've worked
at one job nine to five for 55 years. So it's
changing. And then going to your second question
on kind of the portfolio construction. So I split
my time across a few different funds. One is
kind of private equity family office. The other
is kind of an organization called Toronto Innovation
Acceleration Partners. that works with academic
institutions and spinning out IP from those institutions.
And then I advise a few kind of traditional venture
funds that you're kind of bread and butter ones.
They're all in sort of the healthcare space that
is kind of my, I don't know a lot of things,
but healthcare is one where I think I can at
least take a crack at it just with my background.
With all those funds, it's typically, well, I
run the gamut. I think a good chunk of my time
is spent on very early stage companies. I would
say some of them aren't even companies, they're
ideas. But part of my job, especially at TIAP,
is to take IP. So forget revenue, forget regulatory
reimbursements. Someone has a molecule, someone
has an algorithm, a device, a prototype, and
they're like, what can I do with this? And it's
my job to say, okay, does this make sense? would
a doctor, nurse, physiotherapist use this? Would
they pay for it? Is this reimbursable? Is this
going to be regulated? Who's the right CEO to
bring into the fold? Are investors going to get
interested in it? So it's really company creation
from its foundation. It's very challenging. There's
no formula to it, once again. No company is like
the next company. It's really kind of the creative
part to it. So I like that part of it because
I think building companies gives you an appreciation
for existing companies, understanding how to
create companies. I think when you look at well
-run companies, you can dissect them a little
bit better and you can say, hey, I know how to
build companies like you. And these were the
12 steps I took. Did you take these 12 steps?
Did you take nine steps? Or did you take 15 steps?
Did you do three more things I never thought
you should do? So I like to spend my time in
like the very early sandbox thing because it's
intellectually stimulating, it's incredibly difficult,
but I think it gives you good didactic knowledge
on how to build companies. And then the rest
of my time, I'd say 50 % of my time, the remainder
of 50 is probably spent in sort of your typical
seed series A kind of things. I think for me,
When I look at venture funding, I like to spend
time in companies where I think I can add value
intellectually. If there's a company that's kind
of gone public or they've raised 300 million
bucks, they're much smarter than me. Not that
I'm very smart, but I feel my value intellectually
just declines with time. And I'm happy to do
that. If I'm of no value to a company, I think
I've done my job because they have much better,
brighter, smarter... you know, bigger pockets
of checks to kind of chase after. That's why
I like the early stage, because, you know, a
founder is like, Hey, like, should I build this
for the OR or should it be built for the emergency
department? And that kind of, you know, objective
and creative exercises is what really kind of
simulates me. It raised 300 million bucks. We're
not in, we're not asking those questions, right?
We have a fully different set of problems. So,
um, yeah, so, so that's a long answer to your
question, but yeah, definitely spend, uh, you
know, I would say Series A and before is kind
of my expertise. And really getting a company
lined up for Series A financing, just getting
the house in order to make sure that they're
going to be financing Series A. Because I really
view Series A as like the real first grown up
inflection point for a company. It certainly
isn't the end of the story. But for most companies,
I think that is like a major fork in the road.
Can you make it to that point? Because that really
signals that people are really bought into your
idea, right? And now we're buying it on mass.
It sounds like you're investing from pre -C to
series A. And yeah, the evidence backs your experience
as well. There's a 12 % chance of success or
of an IPO post -series A, which is a considerable
percent. I find diligence in the founding team
specifically Diligencing how committed they are
to this idea incredibly difficult at the pre
-seed stage. Talk to me about some patterns you
recognize in successful and unsuccessful founders.
And then what is your framework or what is your
process in diligencing founders specifically
at the pre -seed stage? Yeah, no, it's a good
question. I wouldn't say I've cracked the code
on it because I have made some good bets and
I've made some terrible bets and I think frankly,
at some point it's just a temporal thing. Like
you're going to see, you're going to see your
answer over time. Time is going to be the only
thing that's going to actually tell you what's
right or wrong. But there are certain things
that I think, you know, patterns, you know, once
again, if Rashad, if we wanted to kind of talk
on that, you know, I think technical expertise
is the starting point. I don't think technical
expertise is the, you know, wow, differentiating
factor and the novelty. Like you are going to
meet fantastic software developers, engineers,
physicians, clinicians, you know, thoracic surgeons.
Technical expertise, I think is what gets you
in the door. Cause that gives you subject domain
expertise to say, Hey, I am an expert in this
space. And I am saying that this is a problem
and this is a problem that I face. And it's a
problem big enough that myself or my hospital
would want to buy it. Therefore I want to build
a company. So technical expertise is kind of
just check. Okay, great. you can come to the
table and have a conversation. So versus many
founders, I think that's where they begin and
they stop. They say, because I'm the technical
expert, this is the beginning and end of the
story. At my point, I think technical expertise
is just the beginning. Now what needs to be added
on top of that, right? I think that's the differentiator
between okay teams and great teams is when they
realize where their competency ends and the Delta
where they need to fill in. So they are really
good at one particular specialty. Can they understand
the business? Can they understand regulatory?
Can they understand reimbursement? Humans, factors,
engineering, software development. Very rarely
are you going to meet a person who's going to
be the sort of da Vinci individual who can kind
of be the painter, the sculptor, the mathematician,
the astronomer. Some doctors, we think we are
because we're God's gift to the world, but it's
very, very rare that one person has all these
attributes. So I think it's having the insight
of your limitations and being candid and honest
with it. And often for doctors, it's easy to
pick on. They don't typically make great business
decisions because why should they? They have
never really been trained to be good businessmen.
They've been trained to be good clinicians. I'm
expecting you to do something that is completely
contrary to what you innately kind of been trained
to. So I think it's having insight of where your
limitations are. And I think most importantly
is having good emotional intelligence, how to
regulate yourself in rooms and conversations,
keeping a temper mannerism when things get heated,
when things become difficult as they will. And
I think once again, that EQ, being able to engage
with how do you interact with a clinician versus
an investor versus a patient advocacy group that
you would be dealing with versus a hospital and
strategic, you cannot be the same person to these
people. So it's having the EQ to navigate that.
Because in the beginning, that's all you have.
I don't know where the product is going to be
because it's pre -seed. It's really the team
and their potential ability to adapt to the adversity
that they're going to face. That is a big chunk
of the precede diligence. But the technology
will change, it'll come, it'll fail, you know,
but, you know, I think that's kind of how I approach
it. So team is number one. Sorry, Yandhi. Do
you think you need subject matter expertise?
to be a founder and a healthcare startup? Or
is this a field where outsiders can come in and
that naivety is almost superpower? Yeah, I don't
think there's, I mean, it might sound like a
non -committal answer. I don't think there is
a right answer to this. I do feel at the end
of the day, you need both on the team. Now, whether
that's the founder or the advisory board or the
chief medical officer or the CEO, like, does
the CEO need to be everything? No, by no means.
If I had to take a pick for the CEO, would I
want them technical competence or like more worldly
knowledge? I would say worldly knowledge. Because
you can always fill in technical competency specifically.
But having someone who can fill in that sort
of 30 ,000 foot perspective, that strategic vision,
the, you know, aligning stakeholders, it's not
a competency that's kind of taught as a by -part
of a certification or degree, you know what I
mean? Like that's not a, you know, but if you're
a thoracic, if I need a thoracic surgeon, well,
who's done residency and fellowship in that space,
they should be good enough to give you an answer
in that space, right? Like I know exactly where
to go to. But, you know, I do think, I do think
we kind of, in healthcare, we do have a bit of
a clique mentality where we will value the opinion
of another clinician. If you're talking doctor
to doctor, it really is going to be like, okay,
you're a colleague, you've kind of been in the
trenches with me, I'm going to value your opinion
more over maybe someone who doesn't understand
healthcare, comes in with a naive perspective
and is very bright -eyed and doe -eyed and going
to change the world but doesn't understand the
realities. So you need a bit of both because
I think we can also, clinicians can get stagnated
in our ways. And we need that gentle nudge. We
need the gentle nudge from folks from other industries
to be like, hey, let's incorporate AI. Let's
not be too scared of it. In banking, we're doing
it. In defense, we're doing it. In insurance,
we're doing it. Other risk adverse industries,
we're much further ahead in incorporating AI.
Why can't you do this in health care? What is
so inherently difficult and different? It's a
different problem, but incorporate it. Yeah,
you need both, I think. I don't think it's one
or the other. If you had to pick between a founder
who is exceptionally charming, but with average
aptitude, versus a founder who has exceptional
aptitude, 12 .1 % in their field, but average
charm, who would you pick? Yeah, I would pick
the charm piece. And I would say because at least
in my opinion. I think aptitude is something
that can be learned over time. I think charm
is perhaps more innate. You know, some people
have it or you don't. I think charm is much more
difficult to coach into someone. And once again,
technical aptitude, I hate to say it, but technical
aptitude can be outsourced. If I have a specific
problem, I need to build a medical device that
has such and such dimensions, I can hire technical
aptitude. If I need a neurosurgeon who also has
a histopathology background, I can find that
someone. But charm, and really charm, I think,
I mean, when I think of charm, I really think
once again of EQ is not just about being nice,
but someone who can rally different stakeholders.
Understand the needs of different stakeholders.
Be empathetic, right? Understand what does the
scientific founding team mean? What does the
hospital need? What does a large med device strategic
need? And being able to kind of connect those
bridges. That's the charming piece. That's the
creative part where there is no formula. There
is no formal degree to do that. Now you can learn
that over time. And I think people do because
they've had two or three startups. They've failed
a few times. They've struggled a bit. you can
perhaps, maybe it's not innate, but you can get
better at it. But definitely I think charm is
what it is. Because ultimately it is your relationship.
It is your personality that is going to kind
of carry you through the tough times. And with
that charm, you can hire the right people with
the technical aptitude to compensate for your
inherent flaws or limitations. But you can't
hire charm. I don't think so. This is something
I've changed my mind on, and I hesitate, but
I agree. Charm is more important than aptitude.
And we want to think that charm has no influence
on your success, but I think that couldn't be
further from the truth. If you could go back
in time 10 years and talk to your 25 -year -old
self. What would you say to him? And would you
change anything you've done in the past 10 years
if you could change one decision without it affecting
other decisions? Yeah, that's a tough question.
I think I would tell myself to, once again, push
the boundary a little bit more. I, too, kind
of fell into the pattern of just sequentially
focus on the standard, the status quo, focus,
get the degree, do as well in degree as possible.
I didn't think creatively. I had no concept of
thinking creatively, to be honest. It was just
very singularly focused. While I enjoyed that
time, I do think everyone needs some baseline
technical competency in whatever field of thing
that you're doing. I don't think no education
is the answer to the world's problems. some foundational
education and whatever it may be, I think you
need some grounding. But I think pushing the
limits, I do it now more often because I think
my career and space is more forgiving and allows
me to do that. But before really didn't, it was
just very linearly focused and could it have
changed the outcome? Could I have been better
or more successful or more impactful in my career
by now? probably, maybe, or maybe it was just
a function of time. I don't know, I don't have
that crystal ball, but I think certainly the
career that I have now took a while for me to
get comfortable in, even just speaking to people.
As clinicians, yeah, we speak to doctors, we
speak to patients, but going into a boardroom
with people, interrogating you, criticizing you,
getting up there, making that pitch speech, dealing
with confrontation. happens a lot in the business
world. In the beginning would really stress me
out, would really cause a lot of angst and anxiety.
Now I think I, I don't think I'm perfect, but
you know, it doesn't, it doesn't bother me anymore.
Cause I know it's kind of part of the course.
It's like, I face it like any other problem that
kind of comes towards me. So, so yeah, I think
if I had done it earlier, I would be better than
I am today. And ultimately you just want to be
better. continuously striving to be better in
your career, right? So more time in practice
would have made me better than I am today. One
of the biggest learnings I have from my startup
is to have a structured, slow process for hiring
and a fast process for firing. Do you agree with
that? And does that resonate with your experience?
It goes both ways, right? I think hiring is a,
like in this whole business, I think the hardest
part is the people. The technology, the algorithms,
the pipettes into the receptors and molecule,
that stuff is hard, but it's not as hard as the
people. People are infinitely more complex. Figuring
out a team that jives with each other, that works
together, that supports each other, chemistry
is aligning just from an interpersonal piece,
that's really important. and one or two toxic
kind of relationships, one or two toxic interactions
really do derail, you know, a company. Or not
even derail, it just doesn't, you know, we don't
progress to the level that the organization can.
Having said that, you know, I do think there
is merit, sure, but if you know, if you don't
fit, let's fire you quickly. That's the easiest
solution. Having said that, you know, we're all
kind of learning. We're all in that process.
I'm sure if I went to another organization, people
are like, hey, this guy doesn't know 10 of these
things. He's not useful in this world. Let's
get rid of him. He's not effective. But I've
been given many chances over my life. I've been
given many opportunities. And I've had patient
people put up with my mistakes or inadequacies.
If no one gave me a chance, I'd be unemployed
many years after. So I do think there's a balance
of, OK, Like the limitations that that person
has, is that a fundamental flaw to their character
or their EQ or they lack charm? Or is this something
that is solvable? Is this a solvable problem?
So if there's, once again, aptitude or competencies
that they don't know today, let's say they don't
know Excel today. Let's say they don't know how
to use chat GPT today. Is this something that
they can be taught over time? Yes or no. If you
can teach it. fine, are you willing to invest
in that person over three months, five months,
six months a year? But they're still on the ball.
They still show up. They're still working hard
all day long. So I think there is a balance.
I think, yes, getting rid of folks that don't
fit the culture or the chemistry, I think that
is unteachable. I think we're, you know, if you're
just, if you don't work, nothing that varies.
If you just don't work together, you don't work
together. But I think competencies can be, you
know, alleviated and kind of ironed out over
time. So we do have to make an investment in
people, right? You're not going to get fully
baked, you know, individuals at a time. But,
but yeah, I think there is a cultural difference,
I think, in America and the US, I think, sorry,
Canada and the US. I think Americans are, they
fail fast and even employment is kind of like
that too. And in Canada, we know maybe we're
a little bit too nice and hold on to folks that
maybe aren't the right fit. So, which can be,
you know, stifling innovation too. So, it goes
both ways. Yeah, scaling a service -based business,
a people -based business is exponentially harder
than scaling software, which is why I find VCs
and investors and both me and you, we tend to
deviate more towards the software businesses.
Talk to me about your contrarian opinion in healthcare
investing. Mine is that I think AI should replace
physicians, and I speak to saying that as a physician
myself. The goal of healthcare should be to provide
excellent quality healthcare everywhere. The
Harvard Mayo Clinic healthcare should be ubiquitous
and cheaply accessible. You cannot do that if
humans are involved, especially humans who need
10 years of schooling and $300 ,000 in their
education. The only way to do that is a software
and AI which completely replaces us. So that's
my contrarian opinion and I am working to make
that happen. It makes my colleagues upset at
times. What is your contrarian opinion in healthcare?
Yeah, no, it's an interesting opinion. And you
know, in your opinion, I think like, I don't
think, I don't feel we'll get replaced. But I
do think the nature of our job will significantly
change. And I think what's expected of us will
significantly change, as it does every year in
medical school training. I mean, you know, even
med school training. I know schools that are
beginning to teach financial literacy, they're
beginning to teach software development, because
it's almost becoming an expectation like, 10,
15 years ago, teaching research methods in medical
school was like a groundbreaking idea. Now the
expectation of physicians to also be researchers
is kind of like, you should be. You should be
contributing. You should be a deliverer of medicine
and you should be the one doing the research
too. So it's different. So I think my view, ironically,
I don't like technology. that's too innovative.
I don't like to invest in technology that is
breaking the sand barrier. And maybe that's my
conservative approach. But when I come back to
making business decisions, making recurrent returns
in a fund, I in fact don't want to invest. Ironically,
even though I invest in innovation, I don't like
innovative ideas that are too innovative. Because
I know innovative ideas are going to take longer.
They're going to be the ones that have to fight
and create the codes with reimbursement for the
first time. They'll be the ones having to negotiate
with the FDA and justifying the whole class of
their technology. And yeah, it does make for
good headlines. Maybe you can get a little blurb
in time. Maybe you can get a little blurb on
BetaKit about this new tool that is revolutionizing
health care. And we do need some of those kind
of ideas. People often take Elon, whether you
like him or not, but he's got some crazy ideas,
but some of them are really interesting ideas.
Now are they all going to work? No, many of them
are going to fail. But some of them, yeah, like,
I mean, I think he has, you know, commoditized
electric cars in the last 10, 15 years. I think
the concept of plugging a car in 20 years ago
was just, you know, something you'd see on TV,
but now, you know, it's growing slowly. So if
I take it to healthcare, I rather invest in companies
that are solving important issues. It has to
be an important issue. But it might not be the
one where it's transplanting a brain from one
person to the next, you know, doing, you know,
things in space. I like things that are boring,
unsexy problems, because day to day life is,
you know, repetitive, it can be mundane. But
these are the problems you face every day, right?
Like, you know, how do I schedule, you know,
shifts in the OR effectively? How do I make sure
that the the x -ray at one hospital can be efficiently
transferred over to the other hospital? How do
I make sure that I don't have a data breach?
How do I make sure that if I have to sterilize
a surgical tool, how do I do that in a cost -effective
way? I'm not spending too much time. Many of
these things aren't going to make headlines,
but these are day -to -day problems if you're
living in the clinical world that you're facing.
and if someone solves it for you, yeah, it's
a small piece, but it saved you $10 here, it
saved infection rates, it saved potential morbidity
or mortality in a patient. And sort of in the
venture fund land, I can quantify the value proposition
of something boring and mundane and predictable,
because I know what that means. If I'm kind of
trying to be like Elon and really changing the
face of the earth, And maybe I'm not ambitious
enough, and maybe there's other people out there
who can better tackle. You need the Elans, but
you need the boring folks like Zohaib to kind
of tackle the recurrent problems. Because as
a fund, I know that, hey, if I get a two or three
or four X return on five boring problems, I'd
rather have five or six decent returns on five
boring problems than one fantastic return on
the next thing launching to Mars. Um, and that
kind of leads into portfolio composition as well,
right? You know, do you want to have a portfolio
that's comprised of 10 potential unicorns or
do you want to say to your LPs like, you know,
75 % of the time I'm going to return you two
or three X on, on your money. Or do you want
to say, Hey, one in 20 of my bets is going to
give you a 20 X or a hundred X. Um, that's the,
that's the portfolio composition angle you have
to kind of, you know, way out. And you'll attract
different investors, right? Venture investing
is typically a risky asset class. I think people
treat it as such. But I do think there's a way
to improve incrementally your returns across.
And I think in a portfolio, if you've got 20
companies, maybe 10 % can be ultra for risky.
And, you know, other things are a little bit
more stable, more predictable. Some are early
stage bets, some are later stage bets. So, you
know, I kind of think it ties back into my kind
of portfolio composition angle as well, right?
You know, I like safer bets. And I do think you
need technical, once again, technical expertise
to be able to vet, you know, some of the unsexy
kind of ideas. You need deep market expertise
to know. you know, what's the price point people
are willing to pay for a simple tool? Are nurses
going to, you know, use this at the end of the
day? Are they going to like use it? We've talked
about patterns in founders. What are some patterns
you've seen in successful and unsuccessful fund
managers or VCs over your time? Yeah, I think,
you know, it's and I would break it down in two
ways. One is their investing mindset. And I would
bring like that's one topic. And then the other
topic would be kind of their fundraising perspective
as well, how they feel about fundraising is like
the startups, the fund managers also have to
fundraise, right? So, you know, I think there's
a degree of empathy that the funds kind of established
because they also go through a fundraising piece.
I think in terms of investing too, I think, you
know, I think if you don't have the subject matter
expertise, it's very easy to chase the new shiny,
glamorous thing. I think sometimes venture funds,
once again, going after the thing that Elon Musk
is investing in. I'm not against Elon Musk and
his investment thesis by no means. I keep picking
on him. But I think going after the new shiny
thing and where healthcare is going to go, healthcare
doesn't move in that rate. Healthcare is a very
slow moving gradual piece. It doesn't like to
change. If you push the boundaries too much,
you're not going to see the returns in the timeline
that's going to be conducive to your fund. If
you've got a 10 -year lifecycle, if you're pushing
the envelope, if you're breaking the sound barrier,
you're not going to see that thing built, scaled,
and returned to you within 10 years. And that's
going to affect your ultimate returns. So I think
that's why you got to go, once again, for fund
managers, figure out and I'm biased because I
think this way I could be wrong, figure out the
boring but problem, nagging problems, boring
nagging problems that healthcare has that A,
they feel it and B, they have a budget to support.
Many times you and I see technologies that are
really, really cool, but do the hospitals have
the budget and the support to actually support
that kind of technology? Because otherwise you're
going uphill, right? Yeah, it can be a great
technology. Yes, I can use my smartphone to detect
cancer, detect murmurs, detect signs of depression,
but is there going to be reimbursement and payment
for it? I think that's the tricky part. I think
the other piece that I think venture funds get
too caught up on, and partly because it's kind
of market size on certain products. I've seen
so many times where companies have overlooked
because they don't see the billion dollar market
of that problem. I view that as a very myopic
way of thinking. You know, no company or very
few companies reach that billion dollar market
capture. You know, you don't. I mean, most companies
are sold at, you know, if you go well, you get
100, 200, $300 million exit. Very few companies
are going to go up to the billion dollar size.
you know, and I know when you're evaluating companies,
you want to have a standard process to evaluate
it. You want to make sure there's enough meat
on the bone, but insisting, you know, that the
company has got to hit a billion dollar market
size, I think is like, what's the difference
between a $2 billion market size and $100 billion
market size? Like, really, like, I see pitch
decks proposing such astronomical figures on
their little widget and gap. And they have like
$2 ,000 a month, they recurring revenue, and
they're pitching a pipe dream of like, a trillion
dollars. Let's get down to basics. Let's do some
bottom -up calculations. How many hospitals do
you have? How many hospitals can you tangibly
get in the next six to 12 months? How much money
are you going to get from each hospital? Is it
going to be $1 ,000? Is it going to be $100 ,000?
Is it going to be $100 million? And how many
users are you going to be able to get? And let's
work with that. And what can you do meaningfully
with three to five years and maybe a couple million
dollars of capital? And is that, you know, with
that, you've done a bit of a study, a pilot,
if you could do that, and what can you return?
So that's the, I think, myopic thinking and funding.
They're, they're pushed to get returns. And then
they're also getting pushing themselves to find
the new shiny thing in hopes that LPs are going
to gravitate like, oh, we've got the coolest
deal. Well, we got into this very interesting
deal. Returns are the only thing that matter.
Yeah. How much money will you give me and how
much money will I return? Everything else is
noise and signals, either positive or negative.
It's not a red flag, but it's almost a yellow
flag when a founder tells me if I get 10 % of
this market, this is how big my company will
be. And I think this is one piece of advice to
founders. Do a bottoms up approach. Do not do
a top down approach for market sizing. You're
almost setting yourself up for failure because
I have basically never seen a company hit their
target forecast. It just never happens. So investors
on this side, I think we become jaded. When you
say that, I think it actually lowers your credibility
or lowers your competency, even though you're
very competent. Give me that bottoms up calculation.
And that's something I can actually hold you
to. and I can help you assist and say, hey, I've
got five hospitals, I need to get to 10 more.
That's a tangible goal in the year that you as
a founder and me as a fund can help you achieve.
I can introduce it to five hospitals, 10 hospitals.
I can't get 10 % of the market share for you.
We got to take baby steps first. So I think investors
are just kind of... jaded by that altogether.
No one's impressed. What's one thing you've changed
your mind on in the past 12 months? Yeah, I think
historically, I would really expect companies
to have a really long runway of funding. You
know, this concept of like, you know, you need
18, 24, 36 months of funding. You know, venture
funds typically like to see that. You know, venture
funds are an interesting base because they expect
companies to have the traction and scale of like
a series D company. And they want the valuation
of like a pre -seed company, right? They want
like the world and want to give you nothing in
return for it. You know, yes, in an ideal world,
you have all your ducks in a row and you're served
things on a, on a silver platter. I think that's
what venture funding typically is actually expecting,
this is the disconnect between founders and venture
funds. Venture funds are often expecting the
world, are all the problems to be solved and
all they're really thinking to do is I'm gonna
inject some capital and it's gonna grow. Sometimes
that is what happens and a couple million or
10 million bucks solves the problem. But that's
assuming that money is the only problem that
you have. And very few companies, particularly
healthcare, money is just the tip of the iceberg
of of what the company needs. So yes, I can tell
them to have 18 months of runway or 19 months,
but without that MVP, without that pilot, without
that data, without US data, they're not going
to get the traction to kind of get that of them.
So yeah, I'm not expecting that they can survive
with one or two months of runway, but I think
as fund managers, you have to be a little bit
more realistic, be a little bit more empathetic
on you are going to have to roll up your sleeves.
with alongside the company and, you know, actually
contribute and getting them to that end point.
It's not going to be a passive exercise where
you expect them to just kind of, you know, solve
these things in five years. Now you're going
to get lovely exits. Like you also have to be
in the trenches with them. And that's when I,
when I speak to founders, I think that's what
founders should be vetting. Founders should be
vetting the funds that are investing in them.
Like what are you going to provide beyond capital
into, into my company? And if they can't do that,
then yes, the money's great. But I think you
are setting yourselves up for failure if like,
money's the only thing you're getting from your
investors. Because then you still have to find
that Rolodex, that connection, the chief operating
officer is gonna help you build that company,
right? So it's, yeah, I think it's just investors
being a little bit more realistic in what they
expect of the others. And especially the last
two, three years has not been kind to the market
in general, especially companies. Many companies
have gone under. And I think some of that needed
to happen. Some of it could have been prevented
if supported in the right way. Thank you, sir.
This was amazing. Is there anything else you
want to share with our audience? No, I think
this is good. Thank you for having me. I really
appreciate it.