1 00:00:00,000 --> 00:00:05,600 Hi everyone, I'm really excited to bring you this conversation with Sam Goldberger. 2 00:00:05,600 --> 00:00:10,680 Sam is a managing partner and co-founder of Ambit Ventures, an early stage digital health 3 00:00:10,680 --> 00:00:11,680 venture firm. 4 00:00:11,680 --> 00:00:16,400 He is also on the board of multiple startups, including Soap Health, in which we are co-investors 5 00:00:16,400 --> 00:00:18,600 and that is how I met Sam. 6 00:00:18,600 --> 00:00:23,880 At the age of 53, he decided to pursue an MBA and transition from clinical practice 7 00:00:23,880 --> 00:00:29,600 to private equity, in which he stayed for two years before launching his venture fund 8 00:00:29,600 --> 00:00:31,360 with his co-founder. 9 00:00:31,360 --> 00:00:37,240 We talk about his childhood, launching a venture fund, decision making, life, what he looks 10 00:00:37,240 --> 00:00:39,520 for in founders and startups. 11 00:00:39,520 --> 00:00:42,320 I hope you guys enjoy this conversation as much as I did. 12 00:00:42,320 --> 00:00:44,840 Hi Sam, thanks so much for joining me today. 13 00:00:44,840 --> 00:00:47,560 I'm really excited for this conversation. 14 00:00:47,560 --> 00:00:52,920 I think our childhood has a significant impact in our life. 15 00:00:52,920 --> 00:00:57,320 I want you to talk about how do you think your childhood has shaped you into who you 16 00:00:57,320 --> 00:00:58,320 are today? 17 00:00:58,320 --> 00:01:04,800 And perhaps we can talk a bit about what are some things you had to unlearn from your childhood 18 00:01:04,800 --> 00:01:07,640 to make you the person you are today? 19 00:01:07,640 --> 00:01:10,320 It's great to be here as well and thank you for inviting me. 20 00:01:10,320 --> 00:01:11,720 So it's a great question. 21 00:01:11,720 --> 00:01:13,560 So a little bit about my childhood. 22 00:01:13,560 --> 00:01:19,120 I grew up to two parents who came from foreign countries. 23 00:01:19,120 --> 00:01:23,760 My father was born on the border of Hungary and Romania. 24 00:01:23,760 --> 00:01:26,680 The borders kept changing during those times. 25 00:01:26,680 --> 00:01:27,800 He went through the Holocaust. 26 00:01:27,800 --> 00:01:30,000 He actually worked in the underground. 27 00:01:30,000 --> 00:01:32,360 He has a really fascinating story. 28 00:01:32,360 --> 00:01:38,840 He ended up going through Israel where he fought in the palmach back to America where 29 00:01:38,840 --> 00:01:42,160 he had an uncle and that's where he met my mom who was born in Belgium who also went 30 00:01:42,160 --> 00:01:45,760 through the Holocaust and was hidden during that time. 31 00:01:45,760 --> 00:01:53,280 So I have European parents and they both have thick accents. 32 00:01:53,280 --> 00:01:57,680 As an aside, one kid once said to me, I don't understand your parents so much with their 33 00:01:57,680 --> 00:02:01,360 accents and I said what accent? 34 00:02:01,360 --> 00:02:03,840 But then I realized they had an accent. 35 00:02:03,840 --> 00:02:08,800 I was probably 12 at the time and then I began to realize that that's not what everybody's 36 00:02:08,800 --> 00:02:09,800 like. 37 00:02:09,800 --> 00:02:17,440 So but anyway, I grew up in Beverly Hills and I went to a public, I went to a private 38 00:02:17,440 --> 00:02:25,640 Jewish day school up until eighth grade and then I went to Beverly Hills High School afterwards. 39 00:02:25,640 --> 00:02:31,000 And I guess I saw a lot of affluence just because of where I came from. 40 00:02:31,000 --> 00:02:34,160 My dad was in business. 41 00:02:34,160 --> 00:02:36,560 My mom always worked with my dad. 42 00:02:36,560 --> 00:02:40,440 So I had a lot of business influence on me when I was a kid. 43 00:02:40,440 --> 00:02:44,640 I used to run my dad's business during the summers in high school. 44 00:02:44,640 --> 00:02:48,920 He would go on buying trips and he would put me in charge and I was pretty young for that 45 00:02:48,920 --> 00:02:54,240 but I guess that's a lot of the European way to do it. 46 00:02:54,240 --> 00:02:59,240 And it was actually a lot of fun, a lot of responsibility. 47 00:02:59,240 --> 00:03:06,320 I guess those are things that really, there was a strong work ethic from my parents. 48 00:03:06,320 --> 00:03:10,600 You have to strive, you have to do good, you have to do good for the community. 49 00:03:10,600 --> 00:03:14,320 A lot of my parents don't need a lot of their time for communal events. 50 00:03:14,320 --> 00:03:20,160 I guess those are things that shaped me that you work hard, you do a lot of things and 51 00:03:20,160 --> 00:03:23,200 you do good for the world. 52 00:03:23,200 --> 00:03:24,880 Thanks for that answer, Sam. 53 00:03:24,880 --> 00:03:28,240 Let's go deeper into your dad's business. 54 00:03:28,240 --> 00:03:33,440 If you could tell me a bit about what was the business and was the expectation that 55 00:03:33,440 --> 00:03:36,000 you continue on with the business? 56 00:03:36,000 --> 00:03:39,440 And that would be my assumption when you're telling me that story. 57 00:03:39,440 --> 00:03:42,400 And if so, how did you break from that expectation? 58 00:03:42,400 --> 00:03:43,400 Yeah. 59 00:03:43,400 --> 00:03:46,040 So the truth is my dad is a diamond importer. 60 00:03:46,040 --> 00:03:52,880 He used to go to Europe and Israel, Belgium particularly, every summer and actually in 61 00:03:52,880 --> 00:04:01,480 the winter too, twice a year, he'd buy stuff, he'd bring it back, he'd sell it as a wholesaler. 62 00:04:01,480 --> 00:04:02,800 And my mom always worked with him. 63 00:04:02,800 --> 00:04:05,640 My mom's from Belgium, that was kind of a connection. 64 00:04:05,640 --> 00:04:10,640 And I did work summers and my dad wanted, I have one brother and he's also a doctor, 65 00:04:10,640 --> 00:04:13,640 he's chief of cardiology at the University of Miami. 66 00:04:13,640 --> 00:04:17,840 So he's also well entrenched in medicine. 67 00:04:17,840 --> 00:04:22,560 And my dad wanted us to go into his business, but he always said, you know, you got to do 68 00:04:22,560 --> 00:04:25,760 what you want to do. 69 00:04:25,760 --> 00:04:33,120 And gave us the freedom to go whatever college we wanted to, medical school, et cetera, et 70 00:04:33,120 --> 00:04:34,120 cetera. 71 00:04:34,120 --> 00:04:37,200 He's still around, he's 95, my mom's 88, they still work. 72 00:04:37,200 --> 00:04:41,560 And boy, would they love it for me to go and take over their business now. 73 00:04:41,560 --> 00:04:47,640 But you know, there was a realism that people have to do what they want to do. 74 00:04:47,640 --> 00:04:49,320 And yeah, I mean, you're right. 75 00:04:49,320 --> 00:04:54,520 It was some subliminal pressure that we should do it. 76 00:04:54,520 --> 00:04:59,880 But I think my dad accepted the fact that we did what we wanted to do. 77 00:04:59,880 --> 00:05:04,840 And given that we were successful, he had no real complaints about it. 78 00:05:04,840 --> 00:05:07,520 I'm happy to hear that, Sam. 79 00:05:07,520 --> 00:05:14,600 And I hope moving forward that others from your cultural background and mine have similar 80 00:05:14,600 --> 00:05:16,200 experiences. 81 00:05:16,200 --> 00:05:21,520 And I know too many people who don't. 82 00:05:21,520 --> 00:05:25,360 Let's go a little bit forward to you're in your 50s. 83 00:05:25,360 --> 00:05:30,240 As he said, you're well entrenched in medicine, you have a thriving practice, I imagine. 84 00:05:30,240 --> 00:05:34,720 You're well on your way or you're already reached financial freedom. 85 00:05:34,720 --> 00:05:38,160 And you make a decision to pursue an MBA. 86 00:05:38,160 --> 00:05:43,680 There are a lot of physicians currently burning out, wanting out of clinical medicine. 87 00:05:43,680 --> 00:05:49,720 Take me back to what you were thinking then, why the decision to go for an MBA? 88 00:05:49,720 --> 00:05:52,920 And is that something you would recommend to physicians? 89 00:05:52,920 --> 00:05:56,600 And if so, which persona of physicians would you recommend it to? 90 00:05:56,600 --> 00:05:59,520 So a little background. 91 00:05:59,520 --> 00:06:07,860 When I was about 45, I remember driving to work and saying, wow, I've accomplished everything 92 00:06:07,860 --> 00:06:10,040 I wanted to. 93 00:06:10,040 --> 00:06:12,560 You know, I had multiple practices. 94 00:06:12,560 --> 00:06:16,600 They were going well. 95 00:06:16,600 --> 00:06:20,600 And thinking, okay, you know, can I keep doing this? 96 00:06:20,600 --> 00:06:21,600 Right? 97 00:06:21,600 --> 00:06:26,480 And I kept doing it. 98 00:06:26,480 --> 00:06:29,680 Then one day I said, you know what? 99 00:06:29,680 --> 00:06:33,640 Surgery is really hard on a person's body. 100 00:06:33,640 --> 00:06:37,640 You know, I was doing 10 to 20 cases a week. 101 00:06:37,640 --> 00:06:41,880 It's a lot of bending over and, you know, a lot of stuff going on. 102 00:06:41,880 --> 00:06:48,080 And I said, can I keep doing this when I'm late 60s, 70s, whatever? 103 00:06:48,080 --> 00:06:49,080 My dad's 95, still works. 104 00:06:49,080 --> 00:06:50,080 My mom's 88. 105 00:06:50,080 --> 00:06:54,920 It's like, I don't want to retire, so can I keep doing this? 106 00:06:54,920 --> 00:06:56,600 And I said, probably not. 107 00:06:56,600 --> 00:06:59,480 And I said, I always loved business. 108 00:06:59,480 --> 00:07:01,160 Right? 109 00:07:01,160 --> 00:07:05,320 And math was always my first love. 110 00:07:05,320 --> 00:07:10,280 You know, growing up, there was not much you could do with math except become, you know, 111 00:07:10,280 --> 00:07:18,880 maybe an accountant or do something professionally in a university or something like that. 112 00:07:18,880 --> 00:07:23,600 But there are very few careers in math, in actuary maybe. 113 00:07:23,600 --> 00:07:27,040 So you know, I love medicine and I did it. 114 00:07:27,040 --> 00:07:37,240 But I said, what can I do that can let me also change my career path, but use some of 115 00:07:37,240 --> 00:07:39,540 the other things I love to do? 116 00:07:39,540 --> 00:07:46,600 My wife was extremely positive about it, supportive and said, do what you want to do. 117 00:07:46,600 --> 00:07:48,600 You know, that's the most important. 118 00:07:48,600 --> 00:07:56,200 Again, you know, she was the one that bore the most stress regarding moving and with 119 00:07:56,200 --> 00:07:57,200 the kids. 120 00:07:57,200 --> 00:08:00,680 I have six kids, so it's not so easy. 121 00:08:00,680 --> 00:08:05,120 And so she was extremely supportive and positive. 122 00:08:05,120 --> 00:08:10,000 And I knew MIT where I had gone undergraduate had a one-year MBA program. 123 00:08:10,000 --> 00:08:13,220 So I said, you know what? 124 00:08:13,220 --> 00:08:17,600 People think doctors are really smart, but they're horrible businessmen. 125 00:08:17,600 --> 00:08:18,600 That's the word on the street. 126 00:08:18,600 --> 00:08:20,400 So I said, you know, how am I going to change that? 127 00:08:20,400 --> 00:08:21,400 Right? 128 00:08:21,400 --> 00:08:22,400 How can I change that perception? 129 00:08:22,400 --> 00:08:27,000 So if I get an MBA from a top cure program, you know, people will then look at me maybe 130 00:08:27,000 --> 00:08:29,040 as an MBA and not as a doctor. 131 00:08:29,040 --> 00:08:30,040 Right? 132 00:08:30,040 --> 00:08:32,160 So I said, okay, MIT has a one-year program. 133 00:08:32,160 --> 00:08:33,160 I got their undergraduate. 134 00:08:33,160 --> 00:08:34,480 I knew the area really well. 135 00:08:34,480 --> 00:08:42,600 It would be very comfortable and convenient and, you know, just would feel like I'm right 136 00:08:42,600 --> 00:08:43,600 at home. 137 00:08:43,600 --> 00:08:46,160 And it wouldn't be strange. 138 00:08:46,160 --> 00:08:50,400 So I said, okay, let me apply to that program, see what happens, see if I get in. 139 00:08:50,400 --> 00:08:54,400 And if it does, then, you know, maybe I'll take that route. 140 00:08:54,400 --> 00:08:56,280 And it was in Boston. 141 00:08:56,280 --> 00:08:57,280 We were living in LA. 142 00:08:57,280 --> 00:08:58,860 My wife was extremely supportive. 143 00:08:58,860 --> 00:09:02,600 She was, you know, happy to move out of LA. 144 00:09:02,600 --> 00:09:05,320 We technically were moving for a year and ended up being longer. 145 00:09:05,320 --> 00:09:07,880 We've been in Boston since. 146 00:09:07,880 --> 00:09:11,280 This was in 2015. 147 00:09:11,280 --> 00:09:17,880 So at the age of 53, I went and sold my practice and got the MBA. 148 00:09:17,880 --> 00:09:18,880 Okay. 149 00:09:18,880 --> 00:09:21,920 Thanks for sharing that. 150 00:09:21,920 --> 00:09:24,880 Let's go back to your math brain. 151 00:09:24,880 --> 00:09:28,120 And I'm someone who loves math as well. 152 00:09:28,120 --> 00:09:34,920 It tends well to structured decision making, but it almost disallows intuitive decision 153 00:09:34,920 --> 00:09:36,720 making. 154 00:09:36,720 --> 00:09:39,880 Let's talk about structure versus intuition and decision making. 155 00:09:39,880 --> 00:09:44,960 And I've talked previously about Danny Kahneman's framework about low and high validity environments 156 00:09:44,960 --> 00:09:51,960 and how investing from his framework would be a structured decision making process with 157 00:09:51,960 --> 00:09:54,760 little room for intuition. 158 00:09:54,760 --> 00:10:01,560 Let's focus solely on evaluating founders, evaluating humility, grit, stick-to-itiveness, 159 00:10:01,560 --> 00:10:02,560 founder problem fit. 160 00:10:02,560 --> 00:10:10,480 How to structure an intuition factor in evaluating founders for you in a startup. 161 00:10:10,480 --> 00:10:13,560 It's probably mostly intuition, to be honest with you. 162 00:10:13,560 --> 00:10:18,000 It's hard to structure looking at a person, right? 163 00:10:18,000 --> 00:10:21,080 I mean, you do have a structure. 164 00:10:21,080 --> 00:10:23,580 You say, is this person reliable? 165 00:10:23,580 --> 00:10:25,400 Is this person honest? 166 00:10:25,400 --> 00:10:27,680 Is this person a hard worker? 167 00:10:27,680 --> 00:10:37,080 Is this person willing to be malleable when decisions aren't easy and they have to shift? 168 00:10:37,080 --> 00:10:38,080 Right? 169 00:10:38,080 --> 00:10:41,960 So you talk to them, you kind of get an understanding. 170 00:10:41,960 --> 00:10:46,040 And I guess that's the structure, but it's really more of a feel. 171 00:10:46,040 --> 00:10:49,600 Do I think this person has it or not? 172 00:10:49,600 --> 00:10:52,720 And again, there's no way to be right or wrong about it. 173 00:10:52,720 --> 00:10:55,840 The only way to know is to see what happens in the future. 174 00:10:55,840 --> 00:10:57,760 So nobody has a crystal ball. 175 00:10:57,760 --> 00:11:06,480 But that probably I would say is more an intuition-based decision than a structured-based decision. 176 00:11:06,480 --> 00:11:07,480 Okay. 177 00:11:07,480 --> 00:11:10,800 And how do you refine that intuition? 178 00:11:10,800 --> 00:11:13,800 Do you always go with your intuition? 179 00:11:13,800 --> 00:11:16,040 And if your intuition is wrong, you refine it that way? 180 00:11:16,040 --> 00:11:18,520 Or do you ever go against your intuition? 181 00:11:18,520 --> 00:11:22,320 Which is when your intuition is saying, no, this person is not trustworthy. 182 00:11:22,320 --> 00:11:25,440 You say, maybe my intuition is wrong and let me take a chance. 183 00:11:25,440 --> 00:11:30,360 I have done that and it's very painful to go against your intuition. 184 00:11:30,360 --> 00:11:33,040 I was just wondering what your thoughts were. 185 00:11:33,040 --> 00:11:37,920 Is it better to always go with your intuition when evaluating people and be wrong sometimes? 186 00:11:37,920 --> 00:11:41,400 Or maybe I'll use the phrasing, push yourself more. 187 00:11:41,400 --> 00:11:43,480 Maybe it's not the right phrasing to use. 188 00:11:43,480 --> 00:11:46,160 Go against your intuition at times. 189 00:11:46,160 --> 00:11:49,680 I would follow my intuition on these things. 190 00:11:49,680 --> 00:11:57,960 As someone once said to me, I've never regretted a deal that I've not gone into, but I've regretted 191 00:11:57,960 --> 00:12:01,560 deals that I have gone into. 192 00:12:01,560 --> 00:12:08,080 So if there's a deal that I was wrong, the person was the best CEO for that position 193 00:12:08,080 --> 00:12:15,600 and took the company to wherever it needed to go and there was a great exit and I didn't 194 00:12:15,600 --> 00:12:17,480 invest in it, I'm okay. 195 00:12:17,480 --> 00:12:21,880 I mean, I didn't think it was right, so you have to make decisions. 196 00:12:21,880 --> 00:12:29,320 But if I thought somebody was great and then they weren't, I'm saying, what did I do wrong? 197 00:12:29,320 --> 00:12:35,840 How can I improve my own decision making so that that doesn't happen again? 198 00:12:35,840 --> 00:12:36,840 Okay. 199 00:12:36,840 --> 00:12:39,160 Yeah, I agree with that. 200 00:12:39,160 --> 00:12:41,000 It's too painful to go against your intuition. 201 00:12:41,000 --> 00:12:42,000 Yeah. 202 00:12:42,000 --> 00:12:43,000 Especially in some of that. 203 00:12:43,000 --> 00:12:46,200 The other thing is it's not my decision right now and that's the main thing. 204 00:12:46,200 --> 00:12:49,040 It's like I'm responsible for other people's money. 205 00:12:49,040 --> 00:12:50,360 I have a fund. 206 00:12:50,360 --> 00:12:53,560 So I can't say Sam Goldberger is willing to do it, right? 207 00:12:53,560 --> 00:12:57,240 I might be willing to do something that's just Sam Goldberger, but I'm not willing to 208 00:12:57,240 --> 00:13:00,640 do it if it's my fund's money. 209 00:13:00,640 --> 00:13:05,960 And I also have a partner and thank God I have a great partner and she's got great intuition 210 00:13:05,960 --> 00:13:09,400 as well. 211 00:13:09,400 --> 00:13:13,680 And I take her feedback. 212 00:13:13,680 --> 00:13:18,440 The truth is my wife has amazing feedback on people too and often she'll see people, 213 00:13:18,440 --> 00:13:26,160 meet people and I use her intuition as well because she can pick up on a lot of things. 214 00:13:26,160 --> 00:13:27,440 Yeah. 215 00:13:27,440 --> 00:13:30,520 I would say the same things about my wife. 216 00:13:30,520 --> 00:13:31,920 Let's talk about your fund. 217 00:13:31,920 --> 00:13:39,400 Let's talk about the decision to start the fund and the decision to decide what to focus 218 00:13:39,400 --> 00:13:41,880 on in investing. 219 00:13:41,880 --> 00:13:48,160 Just give me a bit of background about your post MBA career to where you are now. 220 00:13:48,160 --> 00:13:54,360 So right after I got my MBA, I was recruited by a private equity fund to do a large ophthalmology 221 00:13:54,360 --> 00:13:56,000 rollup. 222 00:13:56,000 --> 00:14:01,920 It was extremely successful and I did that for two years and then I said, okay, what 223 00:14:01,920 --> 00:14:04,680 am I going to do next? 224 00:14:04,680 --> 00:14:10,720 So I looked around, I looked at the market, I looked at my skillset, I looked at what 225 00:14:10,720 --> 00:14:16,640 I wanted to do and between all that I said early stage healthcare investing is really 226 00:14:16,640 --> 00:14:17,640 the place for me to be. 227 00:14:17,640 --> 00:14:20,800 I mean, I want to use my medical knowledge. 228 00:14:20,800 --> 00:14:28,560 I thought early stage was the best place for me to be able to understand what products 229 00:14:28,560 --> 00:14:33,180 are going to be out there in the market that are useful for doctors, for patients, insurances 230 00:14:33,180 --> 00:14:38,020 will support them, pay for them, things like that. 231 00:14:38,020 --> 00:14:40,920 So I love experience in that. 232 00:14:40,920 --> 00:14:42,800 So that's where I decided to go. 233 00:14:42,800 --> 00:14:50,760 I formed my own investing company that was just private to get enough infrastructure 234 00:14:50,760 --> 00:14:55,440 and experience and I did several deals myself and then after a couple of years I said, you 235 00:14:55,440 --> 00:14:58,560 know what, it's time. 236 00:14:58,560 --> 00:15:03,160 I found my partner who is somebody that I've known for many years. 237 00:15:03,160 --> 00:15:06,640 Our both of our eldest sons were roommates in college. 238 00:15:06,640 --> 00:15:09,480 They that's still when we were in LA and they were here in Boston. 239 00:15:09,480 --> 00:15:13,520 Turns out when we moved to Boston, we became friends as well. 240 00:15:13,520 --> 00:15:14,720 And it was a really good fit. 241 00:15:14,720 --> 00:15:17,920 She's an expert in digital health and that's what we said. 242 00:15:17,920 --> 00:15:21,040 We're going to really focus most of our efforts. 243 00:15:21,040 --> 00:15:22,420 Okay. 244 00:15:22,420 --> 00:15:24,880 Is that something you look for in founders? 245 00:15:24,880 --> 00:15:30,760 How long have they known each other and have they gone through hard times and arguments 246 00:15:30,760 --> 00:15:36,560 and debates together or are you open to invest in founders who just met? 247 00:15:36,560 --> 00:15:42,920 That's a great question. 248 00:15:42,920 --> 00:15:51,720 I don't structure things that way because I think each case is individual. 249 00:15:51,720 --> 00:15:57,720 I do look at how they interact and how they know each other because people can know each 250 00:15:57,720 --> 00:16:03,800 other for a long time, but never done business together and then it's not a great match. 251 00:16:03,800 --> 00:16:04,800 Right. 252 00:16:04,800 --> 00:16:11,560 So people who wouldn't be friends normally, but business-wise, they're a great match. 253 00:16:11,560 --> 00:16:16,040 So I kind of like look at them individually. 254 00:16:16,040 --> 00:16:19,320 I talk to them. 255 00:16:19,320 --> 00:16:20,640 I see where they're at. 256 00:16:20,640 --> 00:16:27,360 A lot of times when I'm investing, it's actually past the founders stage. 257 00:16:27,360 --> 00:16:29,400 In other words, they've hired a CEO. 258 00:16:29,400 --> 00:16:32,600 Now, founders are still important there, right? 259 00:16:32,600 --> 00:16:36,840 But then it's a different team dynamic and I look at the CEO and I look at the board 260 00:16:36,840 --> 00:16:38,200 and things like that. 261 00:16:38,200 --> 00:16:39,200 Okay. 262 00:16:39,200 --> 00:16:46,240 But I wouldn't say that it's important how they know each other and why they're together 263 00:16:46,240 --> 00:16:48,560 and what their goals are, right? 264 00:16:48,560 --> 00:16:52,880 And if they're aligned, but whether they knew each other for lots of years is not necessarily 265 00:16:52,880 --> 00:16:55,920 the most important thing. 266 00:16:55,920 --> 00:17:02,080 And are you having them take personality tests or is it more based on intuition as you said 267 00:17:02,080 --> 00:17:03,080 previously? 268 00:17:03,080 --> 00:17:04,080 Intuition. 269 00:17:04,080 --> 00:17:06,320 I've not done the personality testing. 270 00:17:06,320 --> 00:17:07,320 Okay. 271 00:17:07,320 --> 00:17:11,640 A lot of people believe in it and the truth is I would have to do more research about 272 00:17:11,640 --> 00:17:12,880 it to figure it out. 273 00:17:12,880 --> 00:17:19,960 I've had to take some myself, but I'd have to do honestly more research about it to see 274 00:17:19,960 --> 00:17:22,680 is this something that's really useful for me? 275 00:17:22,680 --> 00:17:23,680 Okay. 276 00:17:23,680 --> 00:17:26,000 That makes sense, Sam. 277 00:17:26,000 --> 00:17:29,360 Let's go into your PE background. 278 00:17:29,360 --> 00:17:35,520 You have learned deeply about organizational structure, how to make an organization more 279 00:17:35,520 --> 00:17:37,720 productive, more aligned. 280 00:17:37,720 --> 00:17:43,800 What advice do you have for founders in the idea or the very early on stage? 281 00:17:43,800 --> 00:17:48,200 When should they start thinking about structure, hierarchies, decision making, how big their 282 00:17:48,200 --> 00:17:50,800 board should be? 283 00:17:50,800 --> 00:17:57,080 And this is a very open-ended question, so you may answer it as you choose. 284 00:17:57,080 --> 00:18:03,560 What is the ideal organizational structure for a startup pitching to you? 285 00:18:03,560 --> 00:18:09,640 I care less about the organizational structure when they pitched me early stage because I 286 00:18:09,640 --> 00:18:13,520 can dictate that. 287 00:18:13,520 --> 00:18:18,480 Most early stage founders or companies just don't know how to do it. 288 00:18:18,480 --> 00:18:19,480 Right? 289 00:18:19,480 --> 00:18:24,080 I mean, they've never done it before. 290 00:18:24,080 --> 00:18:33,160 So I like seeing a product that has at least a minimal viable product, something that I 291 00:18:33,160 --> 00:18:36,720 can look at, touch, feel. 292 00:18:36,720 --> 00:18:44,120 I like to see that it has applicability in the market. 293 00:18:44,120 --> 00:18:46,440 Patients will like it. 294 00:18:46,440 --> 00:18:47,440 Physicians will like it. 295 00:18:47,440 --> 00:18:50,680 Insurance will pay for it. 296 00:18:50,680 --> 00:18:55,120 I like them to think a little bit about what their business model is. 297 00:18:55,120 --> 00:19:02,640 I like them to think a little bit about what their exit is. 298 00:19:02,640 --> 00:19:09,840 And there are so many companies out there right now that even if you have all of that, 299 00:19:09,840 --> 00:19:14,520 it doesn't mean I'm going to invest in them right now because there's a limit. 300 00:19:14,520 --> 00:19:21,480 So then it has to be something that honestly I feel that I can help the company with because 301 00:19:21,480 --> 00:19:33,440 as a VC, my main advantage is that I know that I can help these companies. 302 00:19:33,440 --> 00:19:35,840 And so I'm going to make the company better. 303 00:19:35,840 --> 00:19:36,840 That's going to bring value. 304 00:19:36,840 --> 00:19:41,740 I'm about bringing value to these companies and to my investments. 305 00:19:41,740 --> 00:19:45,040 So I'm not going to invest in something that I can't bring value to. 306 00:19:45,040 --> 00:19:53,660 So it could be an amazing product, but if I'm superfluous, I'm not giving that little 307 00:19:53,660 --> 00:19:58,460 extra sauce that's going to make the investment better. 308 00:19:58,460 --> 00:20:01,120 So those are the things that I look at. 309 00:20:01,120 --> 00:20:10,360 Organization structure in early stage is too hard to really have something set out. 310 00:20:10,360 --> 00:20:15,840 And usually I will talk to the founders and say, okay, so we're going to do this round. 311 00:20:15,840 --> 00:20:18,280 I always either take a board seat or a board observer role. 312 00:20:18,280 --> 00:20:19,280 How is that going to work? 313 00:20:19,280 --> 00:20:23,560 How are we going to get the people that we want, et cetera, et cetera, et cetera? 314 00:20:23,560 --> 00:20:24,560 And then we work it out. 315 00:20:24,560 --> 00:20:30,360 And if they're not amenable to working it out, then it's probably not for me. 316 00:20:30,360 --> 00:20:35,820 What advice do you have for yourself when you were 30 if you could go back in time and 317 00:20:35,820 --> 00:20:39,200 tell yourself one thing? 318 00:20:39,200 --> 00:20:47,960 I'm going to go back in time and tell myself one thing. 319 00:20:47,960 --> 00:20:53,840 So I have six kids and this is what I tell them. 320 00:20:53,840 --> 00:20:56,600 Do what you like and what you're good at. 321 00:20:56,600 --> 00:20:57,600 Right? 322 00:20:57,600 --> 00:21:03,000 If you play to your strengths, you always do that. 323 00:21:03,000 --> 00:21:04,000 You'll usually like it. 324 00:21:04,000 --> 00:21:07,000 You'll be good at it. 325 00:21:07,000 --> 00:21:09,440 And you'll be successful. 326 00:21:09,440 --> 00:21:10,440 I like that. 327 00:21:10,440 --> 00:21:13,080 Well, it's important to work in your weaknesses. 328 00:21:13,080 --> 00:21:18,360 The focus should be on enhancing your strengths, as I think that's how you stand out in the 329 00:21:18,360 --> 00:21:19,360 world. 330 00:21:19,360 --> 00:21:20,360 Exactly. 331 00:21:20,360 --> 00:21:21,360 No, I'm not saying, right. 332 00:21:21,360 --> 00:21:22,360 It's a good point. 333 00:21:22,360 --> 00:21:24,140 I'm not saying you should avoid your weaknesses. 334 00:21:24,140 --> 00:21:27,480 You have to actually challenge yourself. 335 00:21:27,480 --> 00:21:28,560 Right? 336 00:21:28,560 --> 00:21:30,960 You have to do things that are uncomfortable. 337 00:21:30,960 --> 00:21:38,240 I mean, that's one thing I learned really well in business school, challenge yourself, 338 00:21:38,240 --> 00:21:41,480 do the uncomfortable things, have the uncomfortable conversation. 339 00:21:41,480 --> 00:21:43,000 I never did before. 340 00:21:43,000 --> 00:21:44,000 Right. 341 00:21:44,000 --> 00:21:46,520 But I do now a lot. 342 00:21:46,520 --> 00:21:50,640 And as long as you're doing it for the right reason, it's okay. 343 00:21:50,640 --> 00:21:54,560 Let's go deeper into the business model. 344 00:21:54,560 --> 00:22:01,720 A lot of founders say, as we grow, we will be profitable, economies of scale will make 345 00:22:01,720 --> 00:22:02,720 us profitable. 346 00:22:02,720 --> 00:22:04,880 What does that actually mean? 347 00:22:04,880 --> 00:22:09,640 Does it mean customer acquisition costs will go down, cost of goods will go down? 348 00:22:09,640 --> 00:22:16,420 And do you find that in practice, the cap actually goes down as companies scale? 349 00:22:16,420 --> 00:22:20,920 Looking at the companies recently, like, and I pick on these two companies too much in 350 00:22:20,920 --> 00:22:23,880 my podcast, For Hems and Romans. 351 00:22:23,880 --> 00:22:26,200 It seems like their tech is not going down. 352 00:22:26,200 --> 00:22:29,160 If anything, it's going up. 353 00:22:29,160 --> 00:22:36,120 Give me your feedback on metrics you look at business models and the drive to profitability. 354 00:22:36,120 --> 00:22:39,400 And if that, how important is that for you? 355 00:22:39,400 --> 00:22:43,760 So if someone tells me as we grow, we will be profitable. 356 00:22:43,760 --> 00:22:45,640 I asked to see their projections. 357 00:22:45,640 --> 00:22:46,640 Right? 358 00:22:46,640 --> 00:22:48,640 I mean, that's where my numbers died. 359 00:22:48,640 --> 00:22:50,400 You think that's the case? 360 00:22:50,400 --> 00:22:51,400 Great. 361 00:22:51,400 --> 00:22:53,640 Now let's see what you're talking about. 362 00:22:53,640 --> 00:22:57,280 Are your cogs going down? 363 00:22:57,280 --> 00:22:59,880 Are you being more efficient? 364 00:22:59,880 --> 00:23:04,000 Now you need a huge sales force, your prices, your overheads gone way up. 365 00:23:04,000 --> 00:23:08,080 Are you going to be able to meet that? 366 00:23:08,080 --> 00:23:09,080 It's a numbers game. 367 00:23:09,080 --> 00:23:12,520 If they can show me the numbers and the numbers make sense, because I have to make sense of 368 00:23:12,520 --> 00:23:13,520 the numbers. 369 00:23:13,520 --> 00:23:18,920 Someone tells me that they're going to be a United States distributor but have two salespeople. 370 00:23:18,920 --> 00:23:24,880 Okay, that's just not going to work, right? 371 00:23:24,880 --> 00:23:27,080 I asked them, show me the numbers to support it. 372 00:23:27,080 --> 00:23:31,600 I don't believe in blanket statements like that. 373 00:23:31,600 --> 00:23:35,120 As we grow, we will become profitable because that's not necessarily true. 374 00:23:35,120 --> 00:23:38,800 I can grow a company and grow expenses too. 375 00:23:38,800 --> 00:23:44,680 And my revenue goes way up and my expenses go up and I'm not profitable. 376 00:23:44,680 --> 00:23:49,360 What question do you ask founders that they don't answer well, that they get stumped at 377 00:23:49,360 --> 00:23:52,080 and you wish founders did more research or answered it better? 378 00:23:52,080 --> 00:23:54,600 I don't know if I have one. 379 00:23:54,600 --> 00:23:59,400 To be honest with you, every founder is different. 380 00:23:59,400 --> 00:24:01,040 So I don't know if anyone's stumped. 381 00:24:01,040 --> 00:24:07,880 People get stumped sometimes, but I don't know that people get stumped on the same question. 382 00:24:07,880 --> 00:24:09,440 That makes sense. 383 00:24:09,440 --> 00:24:14,120 Let's talk about what excites you in healthcare? 384 00:24:14,120 --> 00:24:19,960 What is a problem do you think more people should be working on? 385 00:24:19,960 --> 00:24:31,080 So the problem is people don't have access to healthcare as much as they would want, 386 00:24:31,080 --> 00:24:37,560 and there's no reason that really should be that way. 387 00:24:37,560 --> 00:24:47,920 Especially now with telehealth, AI, all these things. 388 00:24:47,920 --> 00:24:53,480 I remember one of my attendings was telling me 95% of your diagnosis is from a history. 389 00:24:53,480 --> 00:24:57,440 Now I don't know if that's true right now, not sure, whatever, but I know as a practicing 390 00:24:57,440 --> 00:25:04,000 physician, sometimes I can tell what people had just by them telling me what's going on. 391 00:25:04,000 --> 00:25:11,040 You don't need everyone to go and make doctor's appointments and take days off of work. 392 00:25:11,040 --> 00:25:12,840 That's one of the main reasons people don't go to the doctor. 393 00:25:12,840 --> 00:25:17,960 They have to take time off of work, they have to travel, they have problems with, let's 394 00:25:17,960 --> 00:25:21,640 say children or whatever. 395 00:25:21,640 --> 00:25:24,920 The appointments are during the daytime and they're working. 396 00:25:24,920 --> 00:25:29,760 There's a lot of reasons why people don't get care and those reasons don't have to be 397 00:25:29,760 --> 00:25:31,400 there in today's world. 398 00:25:31,400 --> 00:25:41,960 So I think we should try to figure out how we can provide care to people that is appropriate 399 00:25:41,960 --> 00:25:47,400 and everyone be able to have good solid care. 400 00:25:47,400 --> 00:25:49,480 I think that's the biggest problem in medicine right now. 401 00:25:49,480 --> 00:25:56,000 That's not an easy answer because a lot of it is not necessarily the system's fault. 402 00:25:56,000 --> 00:26:00,720 Some of it is patients don't know what to do and even if you changed it, they still 403 00:26:00,720 --> 00:26:02,240 wouldn't know what to do. 404 00:26:02,240 --> 00:26:06,320 So we have to figure that out. 405 00:26:06,320 --> 00:26:15,120 I think the digital revolution is a way to get there but it's going to take time because 406 00:26:15,120 --> 00:26:20,640 people need to learn how to use it properly as well. 407 00:26:20,640 --> 00:26:26,680 As someone who's trying to make his life more efficient, I have found you cannot make fatherhood 408 00:26:26,680 --> 00:26:27,680 more efficient. 409 00:26:27,680 --> 00:26:35,800 What my children want is my time and there's no way to play faster or in a more productive 410 00:26:35,800 --> 00:26:38,160 or efficient manner. 411 00:26:38,160 --> 00:26:45,480 What advice do you have for me and for people in my shoes and how to balance fatherhood 412 00:26:45,480 --> 00:26:54,280 being a good husband and working on my ambitions? 413 00:26:54,280 --> 00:27:02,640 So always try to be there for your family. 414 00:27:02,640 --> 00:27:05,880 Whenever there's an important event, you got to be there. 415 00:27:05,880 --> 00:27:11,240 Whenever a child has a question, don't shrug it off. 416 00:27:11,240 --> 00:27:13,720 Try to deal with it. 417 00:27:13,720 --> 00:27:19,040 When your wife needs something, even if you can't do it at the time, say, I'll get to 418 00:27:19,040 --> 00:27:24,080 it but make sure you do. 419 00:27:24,080 --> 00:27:30,120 Try to be around. 420 00:27:30,120 --> 00:27:31,120 You're right. 421 00:27:31,120 --> 00:27:34,960 It's a relationship that you have to give and you have to just be around and you have 422 00:27:34,960 --> 00:27:42,680 to put time into it and you have to think about what they want necessarily and not what 423 00:27:42,680 --> 00:27:45,680 you want. 424 00:27:45,680 --> 00:27:48,160 What is your biggest failure in life so far, Sam? 425 00:27:48,160 --> 00:27:51,360 And how did you move past it? 426 00:27:51,360 --> 00:27:56,560 So I don't look at experiences as failures. 427 00:27:56,560 --> 00:27:57,560 Everything's an experience. 428 00:27:57,560 --> 00:27:59,420 You learn from your failures. 429 00:27:59,420 --> 00:28:05,520 So I look at everything as a learning experience. 430 00:28:05,520 --> 00:28:10,840 And I don't know what my biggest failure is, but I've had lots of learning experiences. 431 00:28:10,840 --> 00:28:23,040 I think I look at things in a positive way that things happen for a reason. 432 00:28:23,040 --> 00:28:27,680 And if you learn from it, you will become a better person. 433 00:28:27,680 --> 00:28:32,280 If you put your head down to the ground and don't want to see what happened, then you 434 00:28:32,280 --> 00:28:35,760 won't learn from it and things won't change. 435 00:28:35,760 --> 00:28:42,200 So I don't look at things as failures really because even in the startup world, everyone 436 00:28:42,200 --> 00:28:48,800 says the most successful people are the ones that had failed startups previously. 437 00:28:48,800 --> 00:28:51,560 And was that really a failed startup or was it a positive experience? 438 00:28:51,560 --> 00:28:54,480 I think it's a positive experience. 439 00:28:54,480 --> 00:29:00,280 That's a beautiful way to look at life, to look at things as learning experiences. 440 00:29:00,280 --> 00:29:10,960 Would you rather have a life full of many successes or big, massive learning experiences 441 00:29:10,960 --> 00:29:12,960 chasing audacious goals? 442 00:29:12,960 --> 00:29:15,120 That's a tough question. 443 00:29:15,120 --> 00:29:27,580 So I think everybody's life should be about what's important to them and it's not selfish 444 00:29:27,580 --> 00:29:28,580 to them. 445 00:29:28,580 --> 00:29:32,760 For instance, I'm very involved in my community and I give a lot back into my community. 446 00:29:32,760 --> 00:29:36,320 When I was in LA, I was very involved here in Boston. 447 00:29:36,320 --> 00:29:45,720 I'm very involved in the community, in my temple, in schools, and whatever, and time 448 00:29:45,720 --> 00:29:49,480 and charity, whatever. 449 00:29:49,480 --> 00:29:56,760 But I also want to be successful and I want to provide for my family and I want to help 450 00:29:56,760 --> 00:30:02,680 the world, both as a doctor, I want to help people and I want to help new medical technology 451 00:30:02,680 --> 00:30:06,040 come out and help the world in that way. 452 00:30:06,040 --> 00:30:16,600 So audacious goals are good if they're for a purpose, right? 453 00:30:16,600 --> 00:30:21,920 But just to have audacious goals is not really useful as far as I'm concerned to say that 454 00:30:21,920 --> 00:30:24,880 I'm the best person in the world, I'm the richest person in the world. 455 00:30:24,880 --> 00:30:32,240 It doesn't really matter. 456 00:30:32,240 --> 00:30:36,520 And lots of experiences, lots of experiences are good because you learn from each one. 457 00:30:36,520 --> 00:30:42,640 Are you someone who are you goal-oriented? 458 00:30:42,640 --> 00:30:48,440 Do you think happiness is, I'll use the word chasing and it may not be the right word again, 459 00:30:48,440 --> 00:30:55,200 chasing new goals as you conquer them, or is it more learning to be in the moment and 460 00:30:55,200 --> 00:31:00,320 more along the lines, the journey is the destination? 461 00:31:00,320 --> 00:31:02,240 I'm more into the moment. 462 00:31:02,240 --> 00:31:06,440 I have goals, but I'll pivot, right? 463 00:31:06,440 --> 00:31:11,760 And it doesn't matter that my original goal wasn't where I wanted to be, right? 464 00:31:11,760 --> 00:31:19,800 If I'm happy with what I'm doing, right, then that's the right thing because situations 465 00:31:19,800 --> 00:31:20,800 change. 466 00:31:20,800 --> 00:31:30,880 What's your biggest tip from early stage VCs or people thinking of starting a fund in terms 467 00:31:30,880 --> 00:31:39,680 of how to raise capital from LPs and how to best manage LP expectations in terms of cadence 468 00:31:39,680 --> 00:31:45,200 of communication and depth of communication? 469 00:31:45,200 --> 00:31:55,680 So someone were to start a fund, I would tell them, think carefully on how big of a fund 470 00:31:55,680 --> 00:32:04,540 you want and what is your strategy in fundraising because people aren't giving you money for 471 00:32:04,540 --> 00:32:05,540 a first fund. 472 00:32:05,540 --> 00:32:08,480 It's very, very hard. 473 00:32:08,480 --> 00:32:14,280 I think I was able to raise my first fund because I was 53 years old at the time. 474 00:32:14,280 --> 00:32:17,120 Actually, no, I was probably 57 at the time. 475 00:32:17,120 --> 00:32:20,840 53 was when I stopped practicing medicine. 476 00:32:20,840 --> 00:32:24,400 And I had a whole lot of life experiences. 477 00:32:24,400 --> 00:32:26,400 Many were positive, many were successful. 478 00:32:26,400 --> 00:32:31,720 So the people that knew me that invested, invested in me, right, because they figured 479 00:32:31,720 --> 00:32:38,000 I knew how to figure things out. 480 00:32:38,000 --> 00:32:43,560 Make sure that the people that you want to go to raise a fund know that that's who you 481 00:32:43,560 --> 00:32:45,640 are. 482 00:32:45,640 --> 00:32:48,960 Institutions aren't interested in investing in a new person. 483 00:32:48,960 --> 00:32:49,960 Extremely unlikely, right? 484 00:32:49,960 --> 00:32:52,040 Family offices, it's too risky. 485 00:32:52,040 --> 00:32:58,600 They have a lot to lose, but people will invest in people. 486 00:32:58,600 --> 00:32:59,600 So that's what I found. 487 00:32:59,600 --> 00:33:04,960 I'd say go to the people you know that really believe in you and trust in you and would 488 00:33:04,960 --> 00:33:09,520 lose some money for that, for a potential gain, obviously. 489 00:33:09,520 --> 00:33:13,920 In terms of communication, you have to let people know every time you do investments, 490 00:33:13,920 --> 00:33:19,320 you should update them, speak to whatever else he wants to talk to you, speak to them, 491 00:33:19,320 --> 00:33:23,840 don't ever ghost anybody. 492 00:33:23,840 --> 00:33:31,360 If it has an issue, you deal with it. 493 00:33:31,360 --> 00:33:32,680 Just regular stuff like that. 494 00:33:32,680 --> 00:33:37,240 You know, quarterly reports. 495 00:33:37,240 --> 00:33:42,440 Which verticals in healthcare do you think will bring the highest return of investment 496 00:33:42,440 --> 00:33:44,480 over the next five to 10 years? 497 00:33:44,480 --> 00:33:52,640 Is it pharma, biotech, digital health, remote patient monitoring, med tech? 498 00:33:52,640 --> 00:33:54,280 I can't predict that. 499 00:33:54,280 --> 00:33:58,520 I just think digital health is ripe right now. 500 00:33:58,520 --> 00:34:02,480 I think traditionally pharma has been great, but no reason to think it's not going to 501 00:34:02,480 --> 00:34:03,480 continue. 502 00:34:03,480 --> 00:34:12,400 So I don't know which is going to be the biggest, but I know for myself, I bring the most value 503 00:34:12,400 --> 00:34:14,400 in what I'm doing right now. 504 00:34:14,400 --> 00:34:17,880 So I want to do what I'm going to bring the most value. 505 00:34:17,880 --> 00:34:21,240 And I think I'll do the best because of that. 506 00:34:21,240 --> 00:34:23,200 That's a good way to look at things. 507 00:34:23,200 --> 00:34:26,720 How has your investment strategy changed given the recession? 508 00:34:26,720 --> 00:34:32,440 The last recession saw the birth of multiple unicorns like Uber, WhatsApp, Fitbit to give 509 00:34:32,440 --> 00:34:34,760 a few examples. 510 00:34:34,760 --> 00:34:41,000 Are you more aggressive, less aggressive, or has your strategy changed at all over the 511 00:34:41,000 --> 00:34:43,760 next few years? 512 00:34:43,760 --> 00:34:46,520 So my strategy really hasn't changed because I'm early stage. 513 00:34:46,520 --> 00:34:49,280 I'm looking at things three, four years from now. 514 00:34:49,280 --> 00:34:54,660 At best two years if it's extremely lucky, let's say. 515 00:34:54,660 --> 00:34:58,280 So the economy will be completely different. 516 00:34:58,280 --> 00:35:00,000 Now valuations are much lower now. 517 00:35:00,000 --> 00:35:07,800 So if someone is coming with a valuation from a year ago, even if I like the product for 518 00:35:07,800 --> 00:35:09,200 my investors, I can't invest in it. 519 00:35:09,200 --> 00:35:10,200 It's just not a good deal. 520 00:35:10,200 --> 00:35:11,200 You know what I'm saying? 521 00:35:11,200 --> 00:35:14,420 So I have to look at what things are right now. 522 00:35:14,420 --> 00:35:24,400 So as investments, I can enter at lower valuations because that's what the market's saying. 523 00:35:24,400 --> 00:35:27,640 My strategy really hasn't changed because I'm still looking for the same types of companies. 524 00:35:27,640 --> 00:35:33,880 I'm not a big believer in looking for unicorns because who knows? 525 00:35:33,880 --> 00:35:38,680 Did Uber know there would be Uber? 526 00:35:38,680 --> 00:35:40,680 Nobody knew any of these things. 527 00:35:40,680 --> 00:35:48,200 There's a lot of being at the right place at the right time. 528 00:35:48,200 --> 00:35:53,440 How much importance do you put into market tailwinds and headwinds when looking at startups 529 00:35:53,440 --> 00:35:55,320 right now? 530 00:35:55,320 --> 00:35:59,600 And I would describe what tailwind, COVID was a good tailwind for remote patient monitoring, 531 00:35:59,600 --> 00:36:00,600 digital health. 532 00:36:00,600 --> 00:36:04,760 What are some tailwinds you're banking on right now? 533 00:36:04,760 --> 00:36:13,360 And the common headwinds would be just regulatory changes, reimbursement structures in startups. 534 00:36:13,360 --> 00:36:19,160 What is the biggest headwind that startups have to keep in mind when trying to form a 535 00:36:19,160 --> 00:36:24,720 digital health company in this environment? 536 00:36:24,720 --> 00:36:31,360 So to me, the biggest headwind is that don't think COVID is there forever. 537 00:36:31,360 --> 00:36:37,040 When I see startups with COVID on every other slide, I'm just not interested. 538 00:36:37,040 --> 00:36:42,200 I mean, two years ago, that might have been something that people were interested in. 539 00:36:42,200 --> 00:36:43,840 Now, it's just not. 540 00:36:43,840 --> 00:36:58,160 So the biggest headwind is that people try to rely on the past too much. 541 00:36:58,160 --> 00:37:00,600 Look at a problem that's been around for a long time. 542 00:37:00,600 --> 00:37:02,560 Try to solve it. 543 00:37:02,560 --> 00:37:04,440 That problem is still going to be there. 544 00:37:04,440 --> 00:37:13,000 Don't look for the new thing that just came out because new things come and go. 545 00:37:13,000 --> 00:37:19,240 You can always rely on, unfortunately, diabetes being there. 546 00:37:19,240 --> 00:37:22,440 You can always rely on glaucoma being there. 547 00:37:22,440 --> 00:37:26,840 You can always rely on a lot of these diseases that are out there. 548 00:37:26,840 --> 00:37:29,640 Osteoporosis will always be there. 549 00:37:29,640 --> 00:37:31,600 Try to solve a problem with that. 550 00:37:31,600 --> 00:37:36,520 Don't worry about COVID affecting, and I'm going to get into this niche because when 551 00:37:36,520 --> 00:37:42,560 you're doing it, so are 50 other people, and as soon as it's over, there's nothing. 552 00:37:42,560 --> 00:37:49,760 Some of these companies have created new markets as they have grown. 553 00:37:49,760 --> 00:37:55,520 How much importance are you putting on the market slide, the time? 554 00:37:55,520 --> 00:37:59,160 And if a startup sees on their slide, we will create our own market. 555 00:37:59,160 --> 00:38:01,960 What is your response to that? 556 00:38:01,960 --> 00:38:04,360 That's a great question. 557 00:38:04,360 --> 00:38:08,280 So I'm going to answer a little bit roundabout. 558 00:38:08,280 --> 00:38:17,280 I like technologies that are new, never been developed, and are very useful. 559 00:38:17,280 --> 00:38:23,640 Now, sometimes those are completely new markets. 560 00:38:23,640 --> 00:38:33,560 You can't possibly look at a previous device, a previous therapy and say, oh, wow, we'll 561 00:38:33,560 --> 00:38:34,560 just do this. 562 00:38:34,560 --> 00:38:35,560 It's completely new. 563 00:38:35,560 --> 00:38:37,360 So you're going to have to teach people how to deal with it. 564 00:38:37,360 --> 00:38:43,200 For instance, there's one company that I invested in bone health technology that has a belt 565 00:38:43,200 --> 00:38:47,080 that treats osteopenia and osteoporosis. 566 00:38:47,080 --> 00:38:53,280 What happens is it increases bone density through vibrations with research from NASA, 567 00:38:53,280 --> 00:38:55,280 et cetera, et cetera. 568 00:38:55,280 --> 00:38:58,800 Now, people are dying for something like that because a lot of people don't want the medicines 569 00:38:58,800 --> 00:39:01,520 that are very toxic, and there's no other medicine for it. 570 00:39:01,520 --> 00:39:03,520 So we're creating a new market. 571 00:39:03,520 --> 00:39:05,960 So I'm not against creating a new market, right? 572 00:39:05,960 --> 00:39:10,120 Because that's the only way you do it in this type of field. 573 00:39:10,120 --> 00:39:14,680 I think it's actually something real interesting and positive. 574 00:39:14,680 --> 00:39:18,520 So when someone says, I'll create a new market, that's okay, as long as there's a pathway 575 00:39:18,520 --> 00:39:19,520 to it. 576 00:39:19,520 --> 00:39:22,560 It may not work, and that's the risk in everything. 577 00:39:22,560 --> 00:39:25,560 But the reward is huge. 578 00:39:25,560 --> 00:39:27,280 I think that it's something reasonable. 579 00:39:27,280 --> 00:39:31,360 I would certainly support it. 580 00:39:31,360 --> 00:39:32,360 Thanks for that answer. 581 00:39:32,360 --> 00:39:40,400 That is truly insightful, and too many investors run away when founders say that, and I think 582 00:39:40,400 --> 00:39:42,360 that's too bad. 583 00:39:42,360 --> 00:39:52,040 If founders are creating a new market in healthcare, would you recommend they focus their business 584 00:39:52,040 --> 00:39:56,200 model on B2C or B2B? 585 00:39:56,200 --> 00:39:59,880 I'm not a big B2C fan for startups. 586 00:39:59,880 --> 00:40:00,880 Okay? 587 00:40:00,880 --> 00:40:01,880 Yeah. 588 00:40:01,880 --> 00:40:06,080 That's just a general rule. 589 00:40:06,080 --> 00:40:07,080 It's hard. 590 00:40:07,080 --> 00:40:08,080 Possibly. 591 00:40:08,080 --> 00:40:12,040 How are you going to get the money? 592 00:40:12,040 --> 00:40:19,040 So I'm a bigger B2B fan, but new markets can occur in so many ways that you can focus on 593 00:40:19,040 --> 00:40:22,800 a B2B plan and get there too. 594 00:40:22,800 --> 00:40:29,240 There's two different schools of thought when hiring people and how to incentivize or motivate 595 00:40:29,240 --> 00:40:30,240 them. 596 00:40:30,240 --> 00:40:36,440 I'll name two big-name VC firms, Andreessen and Sequoia. 597 00:40:36,440 --> 00:40:42,240 I may be getting this wrong, but I believe Andreessen just gives titles to everyone because 598 00:40:42,240 --> 00:40:48,680 they feel if your name says vice president, you will work harder, whereas Sequoia makes 599 00:40:48,680 --> 00:40:55,120 people work more to get their partner title, and it's a more structured, hierarchical path 600 00:40:55,120 --> 00:40:57,400 to it. 601 00:40:57,400 --> 00:41:04,320 Which structure do you think is better for startups, is to give everyone a C-suite title 602 00:41:04,320 --> 00:41:11,040 or to not give titles out easily and make people work hard for them? 603 00:41:11,040 --> 00:41:25,000 So when I was in business school, I took a class that really focused on startups. 604 00:41:25,000 --> 00:41:32,440 It was based on, I think, a class that Noam Wasserman, who was then at Harvard, but now 605 00:41:32,440 --> 00:41:37,760 he's the chief head of business school at Yeshiva University, that he created. 606 00:41:37,760 --> 00:41:44,160 One of the things that the professor then taught me, it was a different one, it was 607 00:41:44,160 --> 00:41:55,120 a C-suite title, but I think it was from there, is that when you give a C-suite title to one 608 00:41:55,120 --> 00:42:07,400 person, you can never take it away without causing a lot of disharmony in the company. 609 00:42:07,400 --> 00:42:14,640 So if somebody is the CTO and now you want to replace them, because really they were 610 00:42:14,640 --> 00:42:20,560 fine early on, but they're not fine when it's getting bigger, that person is going to be 611 00:42:20,560 --> 00:42:24,880 mad, there's going to be less strife. 612 00:42:24,880 --> 00:42:31,120 So I don't believe in giving everybody the maximum title, but I believe in giving them 613 00:42:31,120 --> 00:42:32,600 a real good title. 614 00:42:32,600 --> 00:42:39,160 So give them head of technology title, give them something like that. 615 00:42:39,160 --> 00:42:44,920 But I think C-suite titles are very difficult because once you give them, it's hard to take 616 00:42:44,920 --> 00:42:46,080 away. 617 00:42:46,080 --> 00:42:50,000 And I see that in practice a lot too, that once someone gets a title, they don't ever 618 00:42:50,000 --> 00:42:53,040 want to have that taken away. 619 00:42:53,040 --> 00:42:58,480 A good friend of mine who's a founder was glad to take the CEO title away and give it 620 00:42:58,480 --> 00:43:01,720 to somebody else because he knew it was better for the company. 621 00:43:01,720 --> 00:43:06,560 And he said, at the end of the day, that's what I care about. 622 00:43:06,560 --> 00:43:10,080 He's right, but not most people think of it that way. 623 00:43:10,080 --> 00:43:14,480 This is an incredibly difficult problem most founders face. 624 00:43:14,480 --> 00:43:17,720 Adam Grant talks about this in his book, Originals. 625 00:43:17,720 --> 00:43:21,840 Early on, you should hire for commitment, not the star candidate, not the exceptional 626 00:43:21,840 --> 00:43:23,120 talent. 627 00:43:23,120 --> 00:43:30,760 But as your startup grows, you need talented, exceptional experts to take it to the next 628 00:43:30,760 --> 00:43:32,560 step. 629 00:43:32,560 --> 00:43:35,840 How far ahead are you thinking in your startups? 630 00:43:35,840 --> 00:43:40,240 This person might need to be replaced as we grow. 631 00:43:40,240 --> 00:43:47,160 And if so, how do you balance hiring for commitment, rewarding people who helped you get to where 632 00:43:47,160 --> 00:43:53,240 you were, and they were incredibly important in that journey, but also letting them go 633 00:43:53,240 --> 00:43:56,800 because they might not be the right people? 634 00:43:56,800 --> 00:44:00,520 What advice do you have, I guess, for yourself? 635 00:44:00,520 --> 00:44:06,800 And for founders, when you meet them early on, and you can tell this person is not suited 636 00:44:06,800 --> 00:44:11,360 for an executive role five years from now or three years from now, but you need them 637 00:44:11,360 --> 00:44:16,080 right now because they're so committed to the mission. 638 00:44:16,080 --> 00:44:19,920 So no, I'm very loyal. 639 00:44:19,920 --> 00:44:23,960 Someone helped me bring the company to a certain place. 640 00:44:23,960 --> 00:44:25,640 I'm going to be loyal to them. 641 00:44:25,640 --> 00:44:32,440 I don't believe in being disloyal because I think, first of all, it's not right. 642 00:44:32,440 --> 00:44:37,840 Secondly, it's a bad message for your culture. 643 00:44:37,840 --> 00:44:41,080 And I think the culture of the company is extremely important. 644 00:44:41,080 --> 00:44:47,600 Having said that, I've had discussions with current CEOs of companies I was about to invest 645 00:44:47,600 --> 00:44:52,880 in or potentially invest in and said to them, you're great at taking this technology and 646 00:44:52,880 --> 00:44:54,440 getting it FTA approved, I said. 647 00:44:54,440 --> 00:44:58,240 When it needs to be commercialized, I don't know that you're the right person. 648 00:44:58,240 --> 00:45:00,840 Would you be willing to step aside? 649 00:45:00,840 --> 00:45:02,440 And I have that conversation ahead of time. 650 00:45:02,440 --> 00:45:06,880 Those are the hard conversations that I told you that I never would have had 20 years ago, 651 00:45:06,880 --> 00:45:10,200 but in business school, they taught me you have to have those hard conversations. 652 00:45:10,200 --> 00:45:11,200 And it's right. 653 00:45:11,200 --> 00:45:15,120 So if I have that conversation with someone and someone says, no, I think I can do it, 654 00:45:15,120 --> 00:45:18,720 I'll be CEO, then it tells me I don't really want to invest in that company because I don't 655 00:45:18,720 --> 00:45:19,720 think that person will do it. 656 00:45:19,720 --> 00:45:22,160 And I think it's going to be harmful company. 657 00:45:22,160 --> 00:45:23,920 The person says, I'm willing to step aside. 658 00:45:23,920 --> 00:45:25,240 I want what's best for the company. 659 00:45:25,240 --> 00:45:26,600 I own a big chocolate company. 660 00:45:26,600 --> 00:45:28,600 I will make more money. 661 00:45:28,600 --> 00:45:31,440 Then, hey, that's a great answer. 662 00:45:31,440 --> 00:45:37,360 Doesn't mean it will be easy when it comes time, but at least I'll have the ability to 663 00:45:37,360 --> 00:45:39,320 say, remember, we had this conversation. 664 00:45:39,320 --> 00:45:42,360 Remember you said you would do that? 665 00:45:42,360 --> 00:45:50,160 So that just having that conversation, I think is very helpful. 666 00:45:50,160 --> 00:45:52,960 But I think it's extremely important to have that conversation. 667 00:45:52,960 --> 00:45:57,800 And if you never have that conversation, you shouldn't invest because I think that can 668 00:45:57,800 --> 00:45:59,880 kill a company. 669 00:45:59,880 --> 00:46:04,720 Is it better to be an excellent visionary or an excellent operator? 670 00:46:04,720 --> 00:46:07,200 And which one is more rare? 671 00:46:07,200 --> 00:46:14,000 I go with the operator over the visionary anytime, but the visionary is the one that's going 672 00:46:14,000 --> 00:46:16,320 to have the unicorns. 673 00:46:16,320 --> 00:46:27,520 But I'd rather get a steady return than a huge return on one in a hundred. 674 00:46:27,520 --> 00:46:33,040 And I think operators know what to do to make things happen. 675 00:46:33,040 --> 00:46:46,880 Companies are sometimes too unfocused to run day-to-day operations. 676 00:46:46,880 --> 00:46:51,560 And I think that would be bad for the company. 677 00:46:51,560 --> 00:46:52,560 That's an interesting take. 678 00:46:52,560 --> 00:46:58,840 And it goes against other discussions I've had where people say 20% of your investments 679 00:46:58,840 --> 00:47:06,120 will be duds or you will lose out completely, 60 to 70% might bring you one to two X, maybe 680 00:47:06,120 --> 00:47:08,400 three X. 681 00:47:08,400 --> 00:47:12,480 And then it's a 10 to 20% that will bring you 10 to a hundred X. 682 00:47:12,480 --> 00:47:19,640 And essentially you focus all your energy as well as 80-20 principle on that 20%. 683 00:47:19,640 --> 00:47:25,640 Is that a principle you follow or are you looking for say two to three X on all your 684 00:47:25,640 --> 00:47:27,520 investments? 685 00:47:27,520 --> 00:47:33,960 And is that difference in strategy because of your PE background? 686 00:47:33,960 --> 00:47:38,440 And how did you reach that decision? 687 00:47:38,440 --> 00:47:43,760 My strategy is that any company I invest in, I want to see at least a 10 X. 688 00:47:43,760 --> 00:47:47,440 I want to see that has the ability to have a 10 X. 689 00:47:47,440 --> 00:47:55,040 If it ends up four X, I'm happy because not all will have 10 X. 690 00:47:55,040 --> 00:47:57,680 A hundred X is extremely unlikely. 691 00:47:57,680 --> 00:48:00,960 I'll be dancing if that happens, right? 692 00:48:00,960 --> 00:48:02,440 And extremely happy. 693 00:48:02,440 --> 00:48:09,800 But I don't know that you can rely that that will happen, especially in medical technologies 694 00:48:09,800 --> 00:48:10,800 and stuff. 695 00:48:10,800 --> 00:48:15,560 I mean, I think it's different than pure tech. 696 00:48:15,560 --> 00:48:26,640 So I like that all my companies have the potential to get 10 X and that almost all will be successful. 697 00:48:26,640 --> 00:48:31,720 Now having said that, for sure 20% will fail, right? 698 00:48:31,720 --> 00:48:45,160 And maybe another 60% will be between, let's say two and six X, average of four. 699 00:48:45,160 --> 00:48:54,800 And then the other 20% at 10 X and I'm going to do very well with that. 700 00:48:54,800 --> 00:49:03,120 If I can get a five X average for my investors, I think everybody would be very, very happy. 701 00:49:03,120 --> 00:49:06,000 How do you quantify that potential for 10 X? 702 00:49:06,000 --> 00:49:13,320 Are you looking at, can this start to reach this many million in ARR and what the path 703 00:49:13,320 --> 00:49:14,480 to that is? 704 00:49:14,480 --> 00:49:19,760 Or are you looking at the market as a whole and saying, okay, if they, it's not a popular 705 00:49:19,760 --> 00:49:25,320 way, but if they can get 0.1% of the market or 1% and that is enough for a 10 X, what 706 00:49:25,320 --> 00:49:30,080 metrics or what variables are you using to quantify that? 707 00:49:30,080 --> 00:49:39,280 So I look at exit potential in terms of usually acquisition. 708 00:49:39,280 --> 00:49:42,520 Most of my companies will not IPO. 709 00:49:42,520 --> 00:49:43,520 That's just realistic. 710 00:49:43,520 --> 00:49:50,360 For a company that IPO is extremely difficult. 711 00:49:50,360 --> 00:49:54,440 And actually in today's market, I'm really glad that I've not gone for companies that 712 00:49:54,440 --> 00:50:01,760 want to IPO because I think it's just a really bad market, especially now. 713 00:50:01,760 --> 00:50:03,520 So I look at equivalent acquisitions. 714 00:50:03,520 --> 00:50:09,800 I look at what type of revenue they're going to be able to have and what the exit will 715 00:50:09,800 --> 00:50:11,760 be at a certain point. 716 00:50:11,760 --> 00:50:15,360 What types of companies and come up with valuation that way. 717 00:50:15,360 --> 00:50:18,240 And then I look at future funding that will need and dilution that'll happen along the 718 00:50:18,240 --> 00:50:22,600 way and whether I'm going to continue funding along the way, et cetera, et cetera. 719 00:50:22,600 --> 00:50:30,840 And I come up with some mathematical analysis and then I say, if this meets that I'll make 720 00:50:30,840 --> 00:50:32,200 at least 10 X, that's great. 721 00:50:32,200 --> 00:50:35,940 I mean, sometimes it's way more than that. 722 00:50:35,940 --> 00:50:41,720 I have a million more questions, but in the interest of time, I'll ask one last question. 723 00:50:41,720 --> 00:50:42,720 Okay. 724 00:50:42,720 --> 00:50:45,160 What is the end goal for you, Sam? 725 00:50:45,160 --> 00:50:50,640 You said you will likely never retire in the past. 726 00:50:50,640 --> 00:50:54,480 And feel free to correct me if I'm misremembering that. 727 00:50:54,480 --> 00:50:57,200 What is the end goal? 728 00:50:57,200 --> 00:51:04,120 And talking to yourself when you are 95 or 90, looking back at your life, what would 729 00:51:04,120 --> 00:51:06,920 you be most proud of? 730 00:51:06,920 --> 00:51:12,840 So the end game, I mean that retired, but I don't want to keep working operationally 731 00:51:12,840 --> 00:51:15,280 as hard as I'm doing. 732 00:51:15,280 --> 00:51:21,320 So I want to create a structure so that I can make high level strategic decisions and 733 00:51:21,320 --> 00:51:22,320 be involved. 734 00:51:22,320 --> 00:51:29,840 But have people junior to me, partners who are doing the day to day operational things 735 00:51:29,840 --> 00:51:33,960 that I'm doing right now. 736 00:51:33,960 --> 00:51:42,640 I won't be able to, I mean, I have three grandkids right now, a couple more on the way. 737 00:51:42,640 --> 00:51:46,080 I love seeing my family, I'm involved with my family. 738 00:51:46,080 --> 00:51:48,480 So I want to be able to do all that. 739 00:51:48,480 --> 00:51:50,280 Great wife won't be able to travel with her. 740 00:51:50,280 --> 00:52:00,880 So although I won't retire, I want to be able to have freedom. 741 00:52:00,880 --> 00:52:04,920 Having said that, what am I going to be most proud of? 742 00:52:04,920 --> 00:52:08,200 Probably my family. 743 00:52:08,200 --> 00:52:16,080 It's like who they become, part of that is what they've seen at home from my wife and 744 00:52:16,080 --> 00:52:18,600 myself. 745 00:52:18,600 --> 00:52:23,560 Our values, and we see that in them. 746 00:52:23,560 --> 00:52:30,360 My portfolio companies are not a reflection of me. 747 00:52:30,360 --> 00:52:31,880 It turns out it helped the world. 748 00:52:31,880 --> 00:52:32,880 That's great. 749 00:52:32,880 --> 00:52:33,880 Right. 750 00:52:33,880 --> 00:52:34,880 But it wasn't necessarily me. 751 00:52:34,880 --> 00:52:37,600 I've made it helped a little bit. 752 00:52:37,600 --> 00:52:46,800 Everything I've done in life has had some type of effect on helping the world, whether 753 00:52:46,800 --> 00:52:54,480 it was a doctor right now in venture, even in PE, it was doing a lot of multi-practices. 754 00:52:54,480 --> 00:52:57,320 There's something on healthcare. 755 00:52:57,320 --> 00:53:06,480 So I can be proud of that, but I'd be most proud of seeing my family and what they've 756 00:53:06,480 --> 00:53:09,720 done and where they're at. 757 00:53:09,720 --> 00:53:10,720 I completely agree. 758 00:53:10,720 --> 00:53:13,720 I'm sorry about the grandkids. 759 00:53:13,720 --> 00:53:15,160 And grandkids. 760 00:53:15,160 --> 00:53:18,080 Helping others brings me the most joy as well. 761 00:53:18,080 --> 00:53:20,640 And I think it's a noble end goal to have. 762 00:53:20,640 --> 00:53:22,200 Thanks so much for coming on today, Sam. 763 00:53:22,200 --> 00:53:23,200 I learned so much. 764 00:53:23,200 --> 00:53:28,640 And I hope to talk again, maybe do a part two in a few months. 765 00:53:28,640 --> 00:53:29,640 Great. 766 00:53:29,640 --> 00:53:30,640 Thank you. 767 00:53:30,640 --> 00:53:31,640 Great being on. 768 00:53:31,640 --> 00:53:53,640 Thank you.