Thanks for joining me today, Sumitra. Really
excited to have you here. Yo, Rashad. It is good
to see you. I'm glad to be here. Let's start
our journey back in 2005. Talk to me about your
high school days and how you decided to pursue
neuroscience. 2005? I was 15. I only did nerd
extracurriculars and incredibly bad JV tennis.
I think I lost every single game that I ever
played in three years. Incredibly bad tennis,
with an incredibly patient coach, speech and
debate, science research, mock trial, and Science
Olympiad were my really big extracurriculars,
speech and debate really being my passion. I
equivocated a lot on what I wanted my major to
be when I went to college. I actually originally
declared classics. And I was very keen to be
a classics major. The small liberal arts school
where I went to made a bet that no one who wanted
to be pre -med would also want to be classics.
So all the classics language classes conflicted
with science labs. So I could never actually
be a classics major. So neuroscience was very
much a philosophical thing. I always found the
fact that We're conscious and it feels like something
to be alive to be the most strange and mysterious
like thing in the universe and it made me really
curious about neuroscience as a field because
it felt like the most important kind of question
to ask and neuroscience is such a interdisciplinary
science, it's like very much in applied science.
And I love the fact that I got to dabble in the
concepts I was learning in chemistry and physics
and simple biology and computer science and math,
all of those in psychology and cognitive psychology
in particular, like it was a field that had so
many different kinds of lenses from different
fields. So for all those reasons, when I did
go to college, I found all of that very appealing.
There's a general theory in investing that the
people who succeed as founders kind of fit this
persona where they had atypical hobbies in high
school and in undergrad possibly. Do you find
that rings through when you diligence founders
and tell our audience how you spend your days
now? Do you go deep into their careers and into
their history and hobbies when they were children
as well? You know, it's a good question. I'll
start by where I spend my time. I work part -time
as a physician, as an internal medicine hospitalist
at a historic hospital in San Francisco in the
community, treating a mostly poor local population
that I'm very, very fond of. I run my VC fund
full -time at Mountain Ventures, pre -seed seed.
Uh with brandon another physician we helped build
the fund several years ago Uh, and that was a
whole story and we may get into later Uh, and
in my spare time, uh between my two jobs, uh,
my wife and I have recently become obsessed with
surfing Which is our my new version of tennis
something that I love doing and i'm just absolutely
terrible at the you know There's I differ from
a lot of investors. A lot of investors are very
dogmatic about types and vibes. I'm very much
a, you know, see people for all their complexity.
There's many different ways of being right. It
really matters. You know, is your strategy coherent?
Is it coherent with my goals? I'm also a really
big believer that we've had a generation of gut
check intuitions that are sometimes right. Often
wrong and there's a lot of money left on the
table when you over index on those kinds of you
know gut checks and vibes So for me the psychological
profile of founder a typical hobby thing If it's
true, I would find it, you know interesting and
speaking to a certain pattern of facts But if
it's wrong, I wouldn't see it as you know, a
bad thing by any means one of my some of my best
founders came from resource poor very strict,
uh, childhoods overseas, where if they had any
atypical hobbies, they would have been met with
a slap on the face, not with, you know, praise
and validation. And they're incredibly, you know,
serious, competent, well adjusted, you know,
living life of mind founders now, but they didn't
have that particular story. And that makes sense.
Given their background, it wouldn't be what I
would expect for them. So I see it as my general,
my short answer is, I don't think of it in that
way. But my larger answer is the way I like to,
I always like to see people not as just themselves,
but like a whole pattern. And I like to keep
an open mind about all the different ways and
shapes and sizes those patterns could be that
could be coherent. Mindful it may not be the
kind that fits the sort of patterns that I had
when I grew up. We'll go back to your undergrad
days soon. There's a lot of talk in the big VC
firms that AI will replace a lot of jobs, but
it's never their job it will replace. It will
replace all the other jobs of mine. Do you agree
with that statement? And then I'll kind of going
back to your work as a hospitalist as well. Do
you think AI will replace a hospitalist or a
VC's job first? Great questions In both, you
know, there's a commonality with both in both
you have someone who exercises judgment and sits
with liability and There's institutional value
if nothing else in having an individual who sits
with liability as opposed to having You know
kind of like, you know faceless liability. There's
something about you know, the buck stops with
someone someone is on the hook and they respond.
They're on the hook for it. And because of that,
the system kind of pays them mostly for that.
I see a lot of clerical things that I do in the
hospital as an internal medicine hospitalist
really is like the system being like, we need
someone to do this. Who sits with liability?
Who oversees it? Because they make even better
judgments than if that person were out of the
loop. For structural reasons, I think that there's
value in having some number of people. I see
it less as the zero, like the one job going to
zero is. always very hard. It becomes like one
of those asymptotes where it just exponentially
takes off. I see it as more like you may have
100, but maybe you could get by with 80, maybe
you could get by with 60, maybe you could get
back with 40. Could you make that one person
far more efficient? Instead of zero radiologists,
if you have one radiologist doing the work of
1 .4 radiologists, that's still a radical subversion
of the status quo. And that one is much more
achievable. I could see it that way. On the hospital
side, there are parts of my job that with really
good automation, I could greatly scale away.
The most time consuming part of my job is the
sitting at the bedside, holding hands and crying
part of my job. The meeting people on the worst
day of their lives, being there, navigating people,
complex situations, being like, you know, this
old person with dementia lives alone. They have
a daughter who they abandoned when they were
two. They have a landlord who like kind of shows
up and helps them out. The landlord and the daughter
disagree. Who do I make the surrogate decision
maker? Like, you know, who do I turn to to represent
the interests of this person? It's like stuff
like that takes up most. I think also I work
in a really socially complex population. So this
may not be like a representative answer of what
doctors do. This mainland is strange to many
people listening. Like, what does this do doing?
Like, what? But anyways, it's like, these are
like the arts of my job. And those are harder
things to automate. You could have an advanced
AI solution. Do it. Even a perfect solution would
probably just not land as credible in the same
way. So on the hospital side, maybe one hospitalist
can do the work of 1 .4 hospitalists in the future.
Would it go to zero? I don't think so. There's
a certain kind of top -year license craft intuition
thing that you do. On the VC side, it's interesting.
You sent me this message about quantitative trading
a few days ago. And I've been thinking a lot
about that. I think it depends on What is the
kind of transaction you do? How much ambiguity
are you assuming? How liquid is the market? What
are the stakes of being wrong? If I were a high
frequency trader, it would be much easier to
replace me with a machine. And it's sort of a
silly thing to say because high frequency traders
are machines. Like they're essentially people
who program machines like humans can't do that
kind of asset trading anymore. But it's essentially
extremely low transaction cost, super high information
transactions, where if you're wrong in a microsecond,
you liquidate your entire holdings. VC transactions
are like super high ambiguity. They often involve
doing things that are unprecedented and never
seen before. So if you template match off what
existed before, you may get mismatches, and it's
extremely illiquid. So it's harder to do. In
terms of not going from one to zero, but one
person doing the work of 1 .5, the amount of
time I've spent doing admin, overhead, clerical,
et cetera, is exponentially lower today than
it was a year ago, because we built a whole bunch
of internal AI -based workflows. Sorry, Rashad.
You asked for tight answers, and here I am giving
long essays. Please forgive me. Let's stick with
this. Something I've been thinking about is what
patterns can I recognize with founders? And I've
been debating with putting and maybe putting
founders through is not the right terminology
because I would be asking them and they can say
no. Psychological tests and some validated some
not like Myers -Briggs and Enneagrams and other
forms of psychological testing and seeing if
I can find patterns on what archetype makes the
best founder. Now, I know this goes against vibe
investing or, you know, I like this founder,
they can sell. I don't know why they can sell.
I don't know why I like them. They're just a
charming person. Do you think there is an avenue
and are you doing this trying to break down what
founder charm means? and really trying to analyze
that and trying to figure out quantitative patterns
that then you can use to say, all the founders
who apply to my fund do this test and then you
have a filter before you speak to the founder.
In terms of psychometrics, one of the things
I really appreciate about neuroscience and also
all the psychology classes I took was doing a
really deep dive on the academic rigor, the face,
and other kinds of validity for different kinds
of psychometric tests. I would argue that most
of our psychometric tests, the very best psychometric
tests we have, Are not great. There's no universal
test. They tend to be very culturally specific
They tend to be like they tend not to generalize
well over time The rigor of evidence behind them
tends to be poor a lot of them come from a particularly
bad era of like psychology research That was
kind of bogus and bunk. So I see them as very
flawed tools It's okay to use flawed tools. We
do this in science all the time where we're like,
you know, our measure is flawed. We know how
it's flawed. So we can still use it in an effective
way. If it's a final thought or a final part
of a conversation, I would warn against that
kind of workflow. I think that you would leave
a lot of money on the table, filter out a lot
of people. If it's like the start of a conversation
and it surfaces things, I think in that way would
be useful. And I'll toss out something strange
and this is going to sound very flippant, but
I really love tarot. I have this little tarot.
app on my you know like tarot cards those like
you know like i really enjoyed it my wife and
i were bored sometime in the pandemics we like
you know got really into this deep dive of tarot
and tarot i like because you know objectively
and i say this in candor this may offend people
although i doubt the people who listen to your
podcast You know, Tarot is bogus, but it's sort
of fun because you flip something and you're
like, you know, this is death upside down and
it corresponds to this very kind of like vague
and strange thing. But then I'm like, you know,
I never really thought about vague and strange
things that applies to like this decision, but
it's just like a radically different point of
view and a very strange one for me to revisit
this thing that I'm thinking through. And sometimes,
you know, just randomly flipping Tarot and taking
a really weird point of view and being like,
oh, Like I didn't think of this decision with
these considerations, but just getting out of
my head and getting into a radically different
framework, you know, it surface stuff. I see
that as an example of it's okay to use flawed
tools. If you see the flaws and you use it as
starting a conversation, like, you know, MBTI
is great. If you get like an ENTJ or something
and you're like, you know, this person, perhaps
they're gruff, perhaps they're confident. Maybe
they're overconfident. I'm curious to see, you
know, what do they think about this? What do
I learn about? I do some amount of, you know,
psychological pinging when I diligence, but for
me it's much more like how do you and I disagree?
How do you and I have conflict? If I have a point
of view and you have a point of view, you know,
do I have influence with you? Are you like, when
you have a thought process, how do you communicate?
How are you in conflict? How are you with pushback?
How do you treat people on your team? What are
your internal dynamics? Those are some of the
psychological factors that I probe. But I see
it as very much there's no necessarily best pattern.
Really, it's like, is your pattern effective
for the sort of larger strategy that you're taking?
Neuroscience, I think, is a very academic field.
And you can break down our brain. And I think
the science in this has changed recently in different
pathways and cortical tracks. And this is what
this does. This part of the brain is responsible
for this. Political science, I would say, is
on the opposite spectrum, where it's more about
people and how you interact with people. How
can you grow movement? I'm sure that the science
part of political science is challenged at times.
How did you go from neuroscience to political
science? Or is it more streamlined than I'm making
it out to be? When I was in college, I did a
lot of student organizing, student union stuff.
It was also the financial crisis. So a lot of
stuff was going on. I'd see it less as it was
something that I did and more just that the world
happened to us. 2008 happened, budget cutbacks
happened. I was at a college with a very progressive
approach to financial aid. And there was this
tension between faculty who said, don't, you
know, stop hiring like the best faculty and paying
them well. You know, maybe consider not being
so like extremely generous. with your financial
aid is like another area to cut. So we had a
lot of moral gazing about, you know, what is
the mission of this institution? What is important?
How do we treat like, you know, the vulnerable?
How do we see these things? It was one of those
things where, you know, just like. It wasn't
that I sought it out, but the world happened.
And I'm very sympathetic to free societies. It
was like 2011, 2012. Stuff was going on in Russia,
like young people were going on the streets and
protesting. Stuff was going on in Myanmar. Arab
Spring was starting to kindle. There was one
round of... Iran protests, there's a lot of interesting
things happening globally. People who look like
me and you at that time were going and, you know,
being willing to be gunned down or have acid
thrown in their face or all kinds of horrible
stuff. So I got really into I spent this period
of my life thinking, you know, how do I build
organizations and influence and kind of find
like key people and elites and like, you know,
get them resources and back them? I saw that
is a lot of stuff that just sort of happened
and I fell into it. I didn't go towards it. But
when I was in there, it really introduced me
to these frameworks of, and I think this is what
you're talking about when you say political science,
political risk and political economy. Political
risk is thinking for any kind of industry, any
kind of business, any kind of anything. You know,
how does the political situation matter? And
political economy is any country or any sector
where it doesn't matter necessarily, like how
good markets are, et cetera. It's like the role
of government is just so incredibly powerful.
So if you're in like a very corrupt country,
It's all political economy. It doesn't matter
how good your idea is. It's like, but how do
you get it through your local ministry that you
have to deal with? And how do you navigate that?
In health care, it's all political economy. All
costs are driven by political economy. All revenues
are driven by political economy. And it's very
much understanding. How do you see the balance
of power between different stakeholders? How
does it change over time? How do you see the
government's point of view on antitrust creating
windows and weaknesses? A lot of the political
stuff that I did unintentionally just because
the world swept me up in it way back when, it
gave me this sensibility that I found very helpful
as a health care investor. Early on, and I'm
not that I'm only I've only been investing for
almost three years now. When I started, I would
I would have these future maps in my head. I
would say this is where the health care world
is going. And this is what the market needs.
I'm going to define this product I'm looking
for in epigenetics as one of them and home care.
Hospital home care was another one. And then
I'm going to go out and find the best founders
working in these specific niches. Currently,
what I'm looking for is a founder working on
an end -to -end solution for inbox management.
And I still find myself pre -defining the market,
which I'm looking for. There's another train
of thought, and this is a more popular one. As
long as the founder is building something in
health, I will back the best founder I can find.
I will deviate from my thesis of markets I'm
looking for, and I would just go for the best
founders. Do you have these mind maps where you're
looking for these opportunities, and I just want
to find the best person who's building in this?
Or are you just generally, as long as it has
the word health in it, I just want the best founder
building in health care as a whole? I think that's
a very good question. I would say our approach
is very much the second. Because when we raise
these funds, we have these predefined investment
periods. So I have like three years, five years.
So I have to get most of my first checks out
during this pre -specified time. So there's this
thing of what is the best, the most interesting
that I'm seeing right now. But with that said,
how we rank what the best health care idea is,
if we do the second strategy, it really requires
doing the first strategy. Like if you were to
go out and say, who has the most credible health
care ideas right now? It's often not like in
our sector. It's like I think the real winner
I've been thinking a lot about this like the
real winners in our sector long term They don't
win just based on like, you know, I'm making
money or like money is going up month over month
They're doing something like weird and strategic
and like subversive in a very like long -term
visionary way So if you were to go out and be
like, what is the best health care company being
built right now? Doing the second approach you'd
still probably be executing the first approach
where you're like hospital at home is where the
puck is going I have conviction on that, like
enabling technologies today, like those will
be the best value companies today, they're going
to be worth a ton of money in the imminent future.
Like that's like the best most rational place
for me to invest. How does that land on you,
Rashad? Yeah, I think I have under index for
how much the founder matters. And this may sound
funny because you hear all the time, the founder
is the most important thing. But given my somewhat
rebellious thought nature, I inherently want
to think against what everyone else is saying.
And sometimes I think what everyone else is saying
is right. Being consensus correct is easy to
do. Going against the consensus of being correct
is very difficult and usually you're wrong. So
I'm changing my mind there and this is kind of
just born out of experience. I've invested in
in startups, and I'm not going to name names
with amazing products, you know, this product
is at that point, at least, I would say, five
times better than anything else out there. But
the founder conviction and specifically founder
charm and this this I don't like that this is
the truth that founder charm matters so much
because I like to think substance and the product
should matter more than salesmanship. But I'm
starting to realize and I have realized salesmanship
matters a lot more. So, you know, I've changed
my thinking on this and I am more indexing for
the ability to sell and just finding the best
founder, right? If I have these predefined market
maps and I can't find the best founder or no
amazing founders building in them, then that's
okay. I will just go for the best founder. And
they will teach me about the market and where
the world is going. And that's a little bit of
ego because I like to believe because I'm a physician,
because I'm thinking about this a lot, I can
see where the world is going. But I think being
a people picker and not a market picker is probably
the better way to do this. You know, it's a good
question. I was at dinner with a couple of the
physician VCs in San Francisco and one of them
who I believe is a mutual friend. We were just
talking about what we do. And I said, we tend
to be super hands -on. We love finding founders
where we're like, this founder can grow to be
a world -class executive. We can help get them
there. And because we helped build them, we invested
a great valuation now. We're specialists is what
we do. We pick up the phone, we help, we coach,
we mentor. It's what gives me joy. And I will
make this person a total baller. It's going to
be great. Like that's a good formula. And this
person is like, I only choose founders who I
never have to help again. I am a zero value add
investor by design. Our founders have to be so
good. They never need help for anything. And
it was just such a fun and bombastic and wild
point of view that It was it definitely had an
impact on me for what it's worth I See it is,
you know our sector It's not enough just to build
the best product in our sector Our sector is
so busted and super corrupt and crazy that you
have to be it really helps to have good If deeply
favors insiders, it helps to have some kind of
insider ability to navigate. Or at least if you're
a total outsider, have a certain kind of super
sophistication to be able to navigate and execute
in our field. Like too many super smart people,
totally outsiders, actually build the thing that's
very important. But it's not in dialogue with
the health care system as it is. And it can't
be influential if it's not. So I see a lot of
value in Like when I look for a really good founder,
I want to make sure that they can be effective
in the world as it is. I see it as if they have
deficiencies, I think of it as are these things
that I can help with? Can I round it out with
a key hire? Can I round it out with mentorship?
Is it the kind of thing where I have influence,
I don't have influence? But that's also part
of an investment strategy where I actually like
to be really hands on. I like to be like, you
know, super domainy. Like, you know, it's part
of how I source. It's part of how I get into
the best deals of the deals that I get into.
It's part of how I build my relationship and
my brand. It's part of the promise I make LPs.
So I would say it's a very reasonable strategy.
It's coherent for me and our colleague, the one
who's like, I never help people, you know, like
they can get bent after I give them a check,
just go make money. You know, his strategy works
for him because that's like totally the way.
does he's like only moonshots it's either you
know 100x or 0x he doesn't want 5x like you know
and he just wants to like you know spray and
pray and that's also a totally valid coherent
strategy i think where it goes wrong is if you
mix and match like if you You know, spray and
pray, but then you spend too much time trying
to be value -add with a financial strategy that
doesn't support you in being value -add. You
know, it doesn't work. Or in turn, if I do a
lot of, like, prospective bets where, like, this
person could pop and I have a lot of concentrated
risk that they can pop and then I do nothing
to help them pop, it's like a bad execution of
my strategy. So I'd say the behavior could be
a good behavior or bad behavior. It really depends
on how does it fit into, like, you know, a whole
scheme. If a company like OpenEvidence came to
you and offered you something in their next round,
would you invest in them? So a company that's
growing, that has the potential to grow quite
a bit more. But in the general thesis of things,
it's a little bit too big. They're already valued
over a billion. Would you invest in them? You
know, if it was a company with excellent fundamentals,
evaluation that I could believe, and it was,
you know, a deal that I would love, and it was
totally out of scope for the fund, what I would
do is not invest out of the fund, but I'd go
to my LPs and say, listen, it's out of scope
of the fund. I'm not doing you dirty by not investing
your fund money in this. because I made a promise
for how I would spend that. This is out of scope.
But this deal is on the table. I'll go to Insiders
first. If you're interested, we can get you access.
We can create the vehicle to do it. I would first
make sure it's out of scope. If it's totally
out of scope, I'd go to my current fund LPs.
Then I go to all my firm LPs. And then I would
go to just friends and others in the ecosystem
in that order. I feel like that's the honest,
fiduciary thing to do if a really good deal comes
by. How do you think about it? What is your take?
Yeah, to be frank with you, I've been struggling
with this question because I'm sort of dealing
with it right now. And I like your answer because
I don't think it's fair to my investors to not
present that opportunity and not invest in it
myself, given that I believe that there is room
for a considerable more growth. And it's a great
company to invest in a great mission to back.
Yeah, so I'm kind of on board here where I think
it's fair. Now, given the question then becomes
with your investors come back to you said, you
know, I already invested in the fund. Can you
invest in this company out of the fund? Because
my fiduciary duty is to the investors. That's
something I think I would be open to. How would
you deal with that request from your LPs? I you
know, we're going through fun creation right
now. So we spent a lot of time doing some philosophical
reflection I would see it this way our I would
see it is is it Discretionary, is there a wiggle
room or not? If there's wiggle room based on
the fund mandate what we promised etc If there's
wiggle room, then I would consider taking it
to an LPAC like an LP advisory committee And
I would say this deal, it's sort of bending our
scope, but it's not crazy out of scope. What
do you think? What do you think? It's a good
opportunity. The LPs want it. What do you think?
And I would use the LPAC as a way for LPs to
have influence to make the decision. If it's
widely out of scope, It sounds tough, but I would
tell them, you know, people made a bet on us
and they expect their money. I think of it as
Gaussians, like a portfolio is really a bunch
of Gaussians that behave in different ways and
correlate to different things. And what we did
is we promised to be one certain kind of Gaussian
for people's portfolios. And we owe it to them
to behave as we promise them. That's what gives
them predictability. That's what gives them success.
I could easily get into trading corn futures.
And honestly, depending on what's going on with
tariffs and stuff, corn futures are probably
a really good idea right now. I could totally
get into trading corn futures, and I could totally
make some good money. I saw this crypto bankruptcy.
Debt transaction come across my desk that was
extremely attractive and had absolutely zero
relevance and people made some kind of crazy
5x 6x return very quickly doing this bankruptcy
transaction on this Notable recent crypto company
that went down and it was a really cool deal
and it was just so widely out of scope It would
be like wrong for me and the Gaussian behavior.
I promised my LPs if I did make money, but I
did it in a way that was like, you know a risk
profile and a bet that's like way wild from what
I promised. So that's how I'd see it. If it was
plausible to get to LPAC, if it's not plausible,
it sounds tough to say, but I'd say, you know,
it's not right. It's not right. We're not being
a good fiduciary to all of our LPs. If we do
this, even if some LPs want, what I would tell
them is, you know, how can we make this right?
If you want SPV allocation and if it's an all
insider SPV, like we'll do it without fees or
whatever, like we're here for you. I can't do
it out of the fund. It's not right. But I can
like, you know help you otherwise Going back
to your undergrad days was miss school always
on the card. I Did my best to get out of it and
I had a lot of South Asian pressure to go into
it I would describe it as schizophrenic I fell
in love with medicine, but I was pretty far on
my journey before I did I Think that I went into
it Definitely with the wrong motives and definitely
with bad decision -making Whenever I give advice
to people, I'm always like, you know, I'll tell
you what I did. And I'm like, don't do what I
did. Like I'll give you frameworks and I'll tell
you the frameworks I wish I used. But, you know,
I made it work and it is so dumb lucky that I
did. I kind of love medicine. And in hindsight,
you know, I'm glad I did what I did, but by all
means, you know, it's kind of dumb luck that
I fell in love with it. And how did you decide
to do an MBA while in med school? I had this
startup. The political stuff that was going on
in the world just really swept me up into it.
And I was doing a bunch of stuff with this colleague
of mine. He was all in. A lot of stuff was coming
to a head. And we just needed some time to see
if we could make it work and where we could take
it. And there was no way to get time off other
than doing it via degree. So I shot my shot and
I got really lucky. And my very weird application,
which was largely panned by very normal people
was very well received by Stanford for which
I'm very grateful. So then I went and I did my
MBA at Stanford. And I spent my first year basically
treating it as a face -saving excuse so I could
work all my spare time on this other thing that
I had going on. Tell me a bit more about the
other thing you had going on. got really good
at building political movements, both around
famous people and organizing large amounts of
young people in the US and around the world,
and very, very good at trafficking in elites,
trafficking in for young people, student body
presidents of top universities, Rhodes Scholars,
Olympians. kids of billionaires, like, you know,
the kids in Nobel laureates. On the flip side,
it would be like the Nobel laureates, a whole
bunch of US ambassadors, a bunch of foreign intelligence
heads, a couple of heads of state. We got like
really into if anyone was doing something around
any of the causes we cared about. We cared a
lot about countering violent extremism. We cared
a lot about free society movements overseas,
getting people access to Elite resources doing
things like, you know taking someone who's like
an intelligence chief from like, you know, one
of the allied, you know, uh european powers who's
now focusing on countering violent extremism
this one, you know isis was recruiting on facebook
that era taking them around silicon valley taking
them to all the tech companies and Like, you
know sitting them down and doing these like high
-level conversations around Uh, you know, how
do we do this track two diplomacy was also really
interesting at this time. There was a lot of
middle eastern tension, especially around Iran.
It'd be kind of cool that we could do stuff like
get a former head of Mossad and a former chief
nuclear negotiator of Iran who, depending on
how a presidential election goes, is either extremely
influential or hiding out in Princeton and getting
them, you know, talking and arguing on the side
and getting like a smulk, stuff like that. We
were just really good at doing that kind of stuff.
It had And every now and then we'd be really
good at monetizing it, but we kept finding cool
opportunities to have impact that never really
led to monetization. We built a lot of network
power and we never really found a way to make
a lot of cash. It was work that we were really
good at doing and it was work that I enjoyed
until I didn't. It was very much white knuckle
politics and you had to have a very high tolerance
for constant conflict. There's a lot of take
a favor, call a favor, burn people. Like, you
know, there'd be so many people mad at you. Some
of them would be kind of scary people overseas
who were, you know, quasi mobsters. You'd just
sort of, you know, you'd end up in a lot of situations
where you're like, you know, this is, this is
a lot. The person I did it with was both extremely
talented at it and had a supernatural patience
for conflict. But at some point I was just like
so spiritually crushed and unhappy. I didn't
like the way that I was treating people and it
just wasn't work that I wanted to do. So that
was my sort of like full arc of that journey,
which played out during my one and a half years
of my two years of my MBA. What are some tactics
you use to get these people in the same room
together? Because I'm assuming a lot of people
would love to, there's kind of the common saying,
your network is your net worth. How were you
able to get all these very influential people
who run big structures and countries in the world?
come in the same room together as determined
by a couple MBA 20 -somethings at Stanford. You
know good question a lot of it was what I would
call silo arbitrage inside a silo There's a very
clear ladder for influence across silos It's
very unclear and if you take two very different
silos and you cross pollinate them It's very
hard for it's like usually the connections don't
exist People are usually very flattered to be
asked and it's very hard for them to size up
You know, like is this like someone at my ladder
level above me below me? and essentially what
we did is we just sort of like you know parlayed
we'd be like you know we have access here's like
someone who uh we had a my colleague had a mentor
who was a very important civil rights era leader
at the State Department and a very prominent
ambassador to some very key countries. But these
are not like the first 25 countries that you
would name, but they were very important in the
year 1980. And for people in the State Department,
this guy was a legend. And it's like, you know,
his mentorship and sponsorship built us a lot
of goodwill with a lot of recent ambassadors
to a lot of countries. And when you have those
people who are like, you know, the presidential
election change, you know, like with the change
of like already in the like presidency, a lot
of political appointees are out. They're now
back just like in the wild. They tend to be very
powerful and influential people. So you go to
them, they're flattered to be asked because you
have the other guy. They have incredible cache
with like the elites in the countries where they
used to be the US ambassador to, and you get
to know them. And then like you take those elites
and then you're like, you know, in turn, you
sort of like do a parlay where you're like, this
is really siloed, this is really siloed, that's
really siloed. I have connections here and it's
kind of intriguing in their swagger. And how
do I do something that's like very valuable and
useful and use this to meet people in that silo?
And in turn, when I meet people in that silo,
like, you know, what can I do that's very valuable?
I think a lot of it is knowing what is valuable
to people. Who do people not know? And a lot
of it is like, what is the kind of information
that's like intriguing and valuable? Like, It's
much better now, but at that time, the Bay Area
was relatively disconnected from DC politics
and the foreign affairs apparatus. You could
get a lot of interesting conversations and bring
some really visionary people to the table by
bringing interesting foreign affairs types, policy
types out this way. It was just like a pathway
that was not very well -worn. So by doing that,
we would just get interesting people at the table,
and then we'd get to know them. network asset
that we had was also super useful. There was
like a whole bunch of people who were like, listen,
I'm launching a book and I'd love to get like
500 people to turn out for this event. And we
could, you know, swap favors with various people
and like, you don't get those kinds of crowds.
So things like that, you know, a lot of it was,
you know, parlaying, like doing something and
thinking like three steps ahead and being like,
how do we parlay this into this into that? And
what's valuable for everyone? How do we solve
their problems in a way that furthers our work?
I believe that cultural heterogeneity is the
path to, quote unquote, world peace. I think
intermingling cultures, races, and following
the Singapore experiment where we're dividing
residential areas to ensure that the amount of
diversity is stable across the residential areas.
You don't get a little Portugal and a little
Italy. It's all intermixed. I think that is the
only path, I believe, for us to live peacefully
in this world. Given what you know about politics
and people, if you could snap your fingers and
get rid of the concept of nations and have the
world be one country, Would you do it and if
you would why and if not, why not? You know,
it's a good question. I think your point is a
good one that people mixing People mixing is
a good thing If I could get rid of countries
today, I would not if I could make movement between
countries much easier I would I think that the
world I would make two observations. The first
is that The world has many different countries,
all of which have different configurations of
social networks, freedoms, rights, obligations,
etc. And if people could freely move... and find
the place where they agree philosophically with
where they are, that kind of flow of people I
think is a directionally good thing. Like it's
a secular trend, that kind of movement is good.
There's a lot of ambiguity about what the right
way is to dial a lot of these levers. You could
say that the US has a very coherent bet around
innovation versus a relatively brittle safety
net. Canada is on that spectrum, but it's a little
bit closer to like a slightly more robust safety
net, but not more so. Sweden is on that spectrum,
but it's more so on the safety net side. But
innovative enough, certainly not innovative.
And all of those are reasonable bets. A very
reasonable person a priori would be very happy
for doing the whole veil of ignorance thing.
Someone could be very happy through the veil,
choosing to be in any one of those societies
based on totally normal preferences. Fully respect
that. Totally respect that. There was this really
good book. I never actually learned how to say
his last name I'm gonna put it in chat in case
you know how to say it. Have you ever heard of
this guy? He's a MIT economic historian Turkish
I Have his book, but I haven't read it. His book
is awesome. His book is awesome Darren I can
mogul his books are you know, he wrote a really
good book on technology power and social transformation
all of these things that were great technologies
on a secular trend, like a super long 50, 100
year trend, such as automation in the textile
industry in the United Kingdom or England way
back when. All of those were good trends that
lurched society forward, and they were just like
super catastrophic, wrecked a bunch of lives,
people went hungry, people died, like it was
super frictional when it actually went down.
Really good secular trends tend to be very frictional,
and it's useful to buy very I feel like the past
15 years has been like a very humbling demonstration
of, you know, just what those are. I feel like
if nation borders disappeared today, you'd have
7 billion people with wildly different configurations
of how they want to live, what obligations they
feel towards each other, et cetera. Over a thousand
years, it may be a very stable equilibrium that
emerges, but the chaos of that would be quite
high. But if we kept borders today and we had
better and freer movement of people and goods
across borders, that would be still pretty revolutionary,
but I think a much more gentle change. For those
listening, his book, and I have read a third
of it, Power and Progress, Our Thousand Year
Struggle Over Technology and Prosperity, and
it's Darren and Simon Johnson. And I think it
picks on this notion that, and this is again,
a common notion among the investing world that,
you know, all technologies improve humanity and
are net positive. And from what I remember, Darren
argues that that's not necessarily true. When
do you think we will cross the barrier of too
much technology, too much efficiency, and we
will actually suffer? Maybe we will live 200
years, but it will be 200 years filled with depression
and sadness and misery as opposed to living a
happy 70 years. You know, I'm a big fan of growth.
I'm a big fan of growth, and I'm a big fan of
the potential for a great future. Human norms
have to change around the state of technology.
And human norms are very slow to change. You
see this with birth rates, where a lot of countries,
when child mortality drops, birth rates continue
to be very high, and you see a lot of frictions
in population. You'd see that as an example of
how human norms are slow. You see teachers talk
about gen alpha and how spooked they are about
the weird behaviors. I don't know how old your
kids are shot if they're gen alpha or gen z,
but you see teachers, you know, I'm sure you
had a lot of philosophical conversations with
your wife about screen time. It's a good example
of how it takes a hot minute. for people to norm
around technology. I think technology is great
in the long term, and I see it not as we should
see technology as good or see technology as bad,
but we should see it as where there's friction,
there's light, and where there's friction, there's
just so much heat. And the heat to reality, the
heat can be really destabilizing. I think a lot
of the political trends we've seen in the past
five, six years in Europe are an example of very
well -intended visionary policies around... You
know things like refugees an issue very like
close to me and important to me and then like
a wild societal backlash You know against too
many refugees too quickly Leading to like, you
know wild swings in politics and a lot of destabilization
in global politics and you see that and you're
like, you know sometimes it's worth kind of slow
walking and being a little bit more cautious.
If we're really thinking about what stage is
this best on the order of like 200 years and
500 years, sometimes going slower, but I would
say it's definitely not worth stopping. It's
more, we should see it as trade -offs, we should
see it as complex. The startup founding team
A has an amazing AI engineer. But a mediocre
domain expert and for building in health care
a mediocre physician or a clinician So our funding
team be as a mediocre engineer, but an amazing
physician or clinician on the team. Which team
do you pick? Totally depends All my answers every
time we do this for shot. I always give my it
totally depends and my it's not categorical,
it's all hyper contextual, so I must be your
most tedious guest. I would argue this. At every
company, at every phase, there is an axis of
complexity. There's like a single thing that
just stands above as the hardest possible thing
that they do. For example, sometimes it is technology,
like the really hard thing about this company
is this very, very hard tech problem. Sometimes,
especially in our sector, because our sector
is so busted, corrupt, and inefficient, it's
entirely strategic. The technology exists off
the shelf. The exact configuration of how you
use it, how you dial it in, requires an exceptional
strategic savvy well beyond what a common person
off the street can do. Like that itself is distinguishing
enough to be the thing that's basis of the company.
Some companies are like hardcore deep tech companies,
you got to have the smartest people in the world
doing it and it totally pays. And in that case,
it's like do the engineer team and either I play
the role of the clinician or we replace the clinician
or we upskill the clinician, we do whatever.
But the engineer is like a scarce asset and it
makes sense. If that like weak physician strong
engineer is doing something else. So for example,
one of my very successful companies is doing
an MSO strategy with pediatric OTs. It's very
similar to what's been done in mental health
and it is a technologically straightforward almost
trivial company Largely doing technologically
solve problems, but it has an extremely strategic
very domain specific kind of go -to -market if
you have the very weak clinician, strong engineer
doing the latter business, they're totally going
to flounder because like the really good engineer
is using like 1 % of their strength. It's like
if you and I were lifting weights and you could
lift like, you know, if you bench like, you know,
350 pounds and I bench, I forget my real bench
is like, I don't know, like 50, but it's like
the bar plus a little bit, but you and I are
benching one pound dumbbells. Like it doesn't
matter that you can bench like, you know, like,
you know, like my hand will move like pretty
fast as well. Like I'm barely using your raw.
power. So it's like, you know, how much does
the raw power matter in that case? So I see it
as that I see it as like, what is the kind of
problem they're solving? Another company that
I'm very fond of did AI hearing aids, and they
solved a bunch of very complex human audiology
audiogram problems. And it was essentially a
like math company, like a math physiology company
for like, you know, six years. And there it paid
to have the most hardcore domain experts ever.
And now they're commercializing in hearing aids,
which is like a super strategic busted space
and the complexities entirely generic strategy,
go to market complexity. It's not like, you know,
best engineer in the world complexity. Do you
think a good distribution strategy or a good
network into your customers? Could be where defensibility
lies oftentimes when I look for defensibility
as you know, what's IP? But it could it just
be like I'm an influencer in this space and that's
my defensibility I would say more than influencer
if you can get sales and grab land Have you used
a bridge Rashad like have you used a bridge when
rounding? I saw the inpatient workflow for my
hospital and it was garbage. It was like totally
garbage. It was so bad And for this to be the
unicorn, incumbent, best company in the field,
and I'm like, this product is trash. For my use
case specifically, the amount of redundancy and
work that it takes, like opening up a portal,
copying, pasting text, it is so silly and bad
at what it does, at least for Android and for
inpatient hospital is drowning. It just sucks.
It's totally built for a very different use case.
My employer is very much like, it doesn't matter.
This is what we're doing. You know, this is what
Epic likes. This is what like, you know, our
like hospital system likes. This is what's like,
it's entirely a distribution thing. The best
product doesn't win. The meritocracy doesn't
work in healthcare. It is like way too corrupt,
you know, access to distribution, strategic,
you know, strategically navigating tech lockout,
tech value chain is where a lot of value comes
up. There's also why whenever you hang out with
doctors, all we ever do is complain about the
tools we have. it's like weird things lead to
the winners. It's not like the best product won
and next week when a better product comes out,
we'll immediately grab it. It's entirely who
grabbed land and had like, you know, these relationships
to navigate way back when. That being said, how
much do you index for having an amazing product
when looking at founders? And, you know, I'll
kind of... bring this conversation is that I've
had conversations with founders where I'm looking
at their product, I'm looking at what they're
saying, and I'm thinking, you know, there's no
way this is going to succeed. And then they say,
we launched six months ago and we're doing 200
,000 a month in revenue. How do you kind of deal
with that scenario and what do you do when that
happens? I love being wrong because There's something
that I thought was true that's not true. So I'd
be very intrigued in that situation to be like,
why was my gut hunch way wrong? I put a lot of
value in empiric validation. When I think of
products, I think of them in the context of enterprise
sales. In health care, no one can say yes, but
everyone can say no. It's like the worst kind
of and hardest enterprise sale. And I think of
it specifically I use a sales qualification system
called MedPic. I like to go through it letter
by letter. There's a really good Salesforce article
that breaks it down and is like, here are all
the categories. Here's how you kind of qualify
your pipeline to say this is a good customer,
this is a bad customer. I go through that framework
and I try to understand if I was looking at a
sales pipeline, is this a product that... Could
get through an enterprise sales process. I would
think about is this something an economic buyer
an internal champion and an end user would all
be thrilled about and I see it as You know, there's
this joke that I hear from a lot of my friends
who are in their 30s who were single and dating
Where you know anything less than a hell? Yeah
as a hell no where you just have to like, you
know It's like you're kind of like in your groove
and you're very settled if you're gonna change
something You really have to be ripped out of
your seat. The same is true for enterprise sales,
you gotta be ripped out of your seat. It's gotta
be really good. It's gotta be motivating to all
those key holders. So if they don't have sales,
I think a lot theoretically about that framework.
And I think about... How does it, when I picture
a year from now and they're actually selling,
where will this product naturally be successful?
Where will it get stuck? What are the kinds of
customers? Where in those customers will it get
stuck? And how do I form an opinion about, can
any product win in this space and get through?
What do the founders think? Are they sophisticated
in sales? Do they have discipline? If I offer
this framework, how do they engage? If it was
the example you gave where they're like, yeah,
you know, like Mic Drop, we're doing 200K in
sales we just launched. I'd be like, that's pretty
dope. And I'd be like, what worked? What worked?
And how do I use my framework of how enterprise
sales happened to figure out my theory of mind
for all those stakeholders and different kinds
of customers? Clearly, these folks discovered
something interesting. And I'd be like, teach
me what is the signal here? What is the sort
of thing I can learn about the world from what
you guys experienced? Oftentimes, when I look
at DEX, my mind inherently goes, how does this
increase revenue for the organization or the
buyer, as opposed to the other side of the coin
being, how does it save expenses? And I generally
think if there is no CPD court, you can bill
for this and in practice, not just in theory,
and there is no revenue model for this, it's
unlikely to succeed. Now, AIS credits have argued
against this clearly, right? How do you think
of, when a startup is pitching to you, do they
need to tell you, this is a CPD code, this is
how my customer will make money by using my product?
Or is it more, you know, I'm just gonna grow
and grow and grow and I will get sticky enough
that at some point people will pay for my solution
as it becomes incorporated into their workflow
and they cannot work without it. And it seems
like open evidence, Hippocratic AI, AI scribes.
It seemed like they're all like, we're just going
to grow. And then people eventually pay for it
because it's almost like oxygen. Open Evidence
has something clever going on. They have NPIs.
They have search queries by what people submit
and they sell pharma ads. So they've essentially
stolen Doximity's business model, but made it
much more valuable. I see Doximity is a bogus
company that we only use for free facts. It's
like our dirty secret is doctors. I've never
met anyone who's ever used Doximity ever. for
anything and all I do is hang out with Help IT
people. What else does it do? It has a newsfeed.
I don't know. That's the amazing thing. I use
it as a phone, like a phone app and a fax machine.
And basically they have my NPI and they make
all their revenue through ads and open evidence
is done the same. And that is just such a dope
and good business model. If it remains free forever,
they're like... pilling, you know, they're milling,
you know, GLP one adds to me knowing my NPI,
my geography, etc. That will make them boatloads
of money forever. If that's all they do, like
they've already made a ton. So that model I find
really fascinating. For your question, I use
the framework I mentioned, the enterprise sale
framework, I think of for the economic buyer,
different kinds of economic buyers care about
different things. If it's a healthcare system,
they almost always Discount any promise of like
I reduce costs so you will make money in a statistical
sense long term Because it's like the wells been
poisoned so many companies have said that for
so long and it's never true So it's like they
would believe that if you've been on market for
five years and you have Incredible validation
help economic outcomes like they will buy that
story Revenue is a much easier story for them
to tell there are weird niches where people will
pay for other things like if you're in a cash
pay competitive specialty doing something that
really benefits from like white glove concierge
service there's an intriguing willingness to
pay where people are like you know if it makes
people do their knee surgery with me and not
the person next door, you know, that's interesting.
Like that is interesting to me. So for folks
like that, they may pay for different things.
I use that as my wedge to be like, is this a
credible story? Can it move customers? What would
your 20 year old self think of the work you're
doing right now and where you are right now,
your career? You know, I think the most intriguing
thing my 20 -year -old self would clue into is
the fact that I live my life not totally obsessed
with status and with hype when I was 20. And
I think one of the reasons I stuck with this
politics thing as long as I did is I was so...
fixated in the rat race and prestige and hype,
etc. After I had my big burnout and I was like,
I just want to do stuff that I enjoy with people
I like, I had the courage to say, you know, I
don't want to join a fund. I'd rather build a
fund. I'd rather be like, you know, I'd rather
like go to a happy hour and everyone be like,
I don't know this guy, I'm gonna go hit up like,
you know, this dude from like famous fund instead.
Like, I'm totally happy being a background character.
I'm totally happy just being a random like, you
know, guy doing his thing. I'm not so concerned
about like, you know, status, hype, rank. I just
like being good at what I do, doing it with people
I love, you know, hanging out with folks I really
care about. I think that would have been the
thing that really sticks with 20 year old me.
And it would have been very strange and it would
have been very frustrating because it's one of
those things that's like insight versus knowledge.
Like you can give knowledge. You can be like,
yo, like, let me show you this math proof. And
it's like, cool, like, cool. Like now I know
it. Then there's insight, which you just have
to learn. And I think that I'm kind of stupid.
I just couldn't understand the stove is hot until
I kept touching it and burning my hand. And finally
the inside hit me and I'm like, ah, like, you
know, this is how it works. So that would be
the thing that most surprises me. And it probably
would have like perplexed me and maybe infuriated
me because I would have been like, cool. But
like, I don't know how I become that guy, you
know, because I still kind of really care about
these things. What are you excited about in healthcare
in the next five years? And what are you excited
about with your personal career life? In my,
you know, so on the VC side. I think that there
is an unstable we had after like 30 to 40 years
of extremely stable policy consensus, bipartisan
on health care. It's become a total knife fight.
Like the balance of power between payers, big
providers, small providers, life science, pharma
is all kinds of messed up. How it maps to left
and right, how it maps to parties, all messed
up. Who wins and who loses, totally messed up.
The Trump administration has basically burnt
down everything that we understood about, you
know, balance of power in our sector, you know,
when they came in. And if you look at their policy
considerations, it's all over the map. It's terrifying
as a citizen. But the old system that's kind
of burning down had a whole bunch of problems
with it. And I'm very curious about, is there
a window in all this chaos to back the right
kinds of companies, the kinds of companies that
I'd be proud to see exist in the world that can
build and blossom because a lot of stuff is cracking
in our healthcare system? Is there something
that we could do that's interesting and better?
I find that stuff really intriguing. And we always
talk about how there's like a new era of AI,
but this recent era of AI is a whole bunch more
interesting than CNNs were 10 years ago. So I'm
also very intrigued by, you know, what are the
kinds of things like maybe actually, like we're
actually finally getting serious about stuff
that can minimize paperwork burden, etc. really
not by improving the existence of paperwork,
but really just making paperwork a tedious things
that computers fight with each other about and
sort of disintermediate us more and more. These
are some things I'm excited about in my investing
hat. In my personal hat... One of the really
big insights I had as a VCA is that work expands
to fill the time. You probably feel this. There's
like an infinite number of happy hours and things
you can do, et cetera. And sometime in the past
two years, just running a team of four, I got
so busy that I had to cut down a lot and I just
did a lot less. And the amazing thing is I found
out that I could both do a lot less and still
be as or more effective and have actually like
free time to think and do deep work. And the
thing I'm most excited about my personal life
is more deep work. In an entire year, me and
you as VCs, there's one or two documents that
we signed and wires that we approved that were
by and far the single most important stuff we
did that year. And if that was all we did that
year in the story of our lives, that would probably
be enough. Everything else washes away. I like
the idea of more time spinning around in a chair
or floating around in the ocean. thinking, thinking
deep instead of just going, you know, five days
a week, you know, seven to eight hours of 30
minute coffee chats back to back. There's a lot
of physicians listening to this podcast and they're
wanting to break into startup investing, venture
capital, entrepreneurship. What piece of advice
do you have for them? I would toss out a few
things on the entrepreneurship side, I would
say Don't overthink it. Doctors have always been
entrepreneurial. Almost everyone who you think
of when you were a kid and they were doctors
were doing something like very entrepreneurial.
And almost certainly because of the nature of
our work. You have a fixed and totally safe employment
thing that you can turn to if everything blows
up So feel that you have swagger random people
just show up and start doing things people with
less tools than you This is a great era because
there's a million things that you don't know
and there's so many tools that can help you There
are people they can help you and also a chat
GPT now. It's like, you know, it's pretty good
Like, you know, it may not know everything and
it won't be an expert, but it certainly is a
few chapters ahead of you in a bunch of, you
know, entrepreneurship topics you want to learn
about. It'll point you in the way to, you know,
read and learn and grow. We've learned harder
things. I would say on the entrepreneurship side,
go for it. On the healthcare side, I would say
the most important thing for investing either
time or money in a company is no access of complexity
and know where you're smart. And if the main
complexity in something is, let's say you're
a cardiologist, let's say you're an interventional
cardiologist and you're looking at stents. And
if the main axis of complexity for that company
is like a technical innovation in some kind of
technical. innovation that's legible to you as
a proceduralist who does it where you're like,
if we do this, this kind of a big deal, like
I would pay a lot more money, cool, that is a
good bet. If the axis of complexity is totally
illegible to you, if you're an interventional
cardiologist, and you're looking at an orthopedic
screw for hand surgery that angles slightly differently
than the incumbent screw, then it's like, you
know, have humility and like be like, you know,
is this like, you know, like, is this really
like, you know, the right kind of bet? The other
is that you're too smart to have to know everything
and be the extra expert. In the same way, we
don't expect the interventional cardiologist
also to be an expert in, you know, advanced management
of renal tubular acidosis or something. It's
like, use the team, use the team in the same
way. It's like you're too smart to be like, you
know, learning everything and being the expert.
It's like if you see a deal and you love it and
you're like, I love this med device. I love the
technology. But the whole cap table thing, some
of these weird terms that they've given to us,
that's kind of beyond me. It's cool. You're too
smart to become an expert in that. Use the team.
Use the team. Ask friends. Ask your network,
et cetera. It's how we work in the hospital.
I think it's also what makes us successful when
we invest. I think we're much more team player
oriented. It's the same game. Use the same skills.
Awesome. Thanks so much, Dmitry. Cool. Appreciate
you, Rashad. It's always fun to do this.