Challenging the Status Quo of Healthcare Investment with Annie Lamont
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What can I say about this week's rockstar guest? Any lamont incredible track record as a venture capitalist. She's cofounder and managing partner of oak H.

C. F. T. I can't list all her accolades because they are just hundred most influential people in health care. Forbes, my test list five times top one hundred venture capitalists, according to cb insights top the seas on the new york times list top twenty private equity power players fin tech finance, forty SHE has had seventy eggs over the past twenty five years.

5 ipos， just an incredible track record of investing primarily in the health care, but also the financial technology space. There are surprising amount of overlap in terms of access, outcomes, cost, speed, friction, especially those last three, cost, speed and friction between the two. She's also of the first lady of connected ted, mary to governor net lamon.

She's she's been doing B, C work for thirty five, forty years. And just as as insightful as anyone in the world about those areas, especially health care. I found this conversation to be absolutely fascinating. I think you will also, with no further to my discussion with oak, H, C F, any lemon.

thanks. Very great to be here.

I've been really excited for this conversation. You do so many interesting things, but let's start with oak investment partners. Uh, you A G, P there, starting in eighty six and eighty ventures, what LED you to that part of your career? Well.

very early on, I got a stanford when silicon valley was really the very beginning of silicon valley, and joined to the gold hamburg inquest, which was a particular vest. Inventer firms were legendary at that time. IT was the fifty eth employee and really fell in love with venture from day one.

And working with entrepreneur S. I Carries Steve jobs bags on the apple IPO rojo. And the first three months there, the first three months we also took to an antec public. So I worked with two of the greatest entrepreneurs ever. I didn't, I didn't know at that at that time.

That was the next question, did you have any sense of who you Robing soldiers with? Or I was just like fast moving blur. I certainly.

those two seemed like extraordinary people, and I extrapolated that to most entrepreneurs. I quickly learned they were to extraordinary individuals. That was IT just got me hooked. I thought, if I could just learn and be with people like this, and not be the entrepreneurs, be the person supported, helped edited therapies, what, you know, whatever was required. I just wanted to spend the of my life with people who envision the world as IT should be.

And h and q is known for a lot of their software, internet hardware, technology. What LED you over to the health care sector?

So when I joined oak, stas really have just a couple of years out of of stanford. We were founding jensine the year that I joined one of the also very first biotech companies. And there was only one public software company at that point. And I wasn't really interested in one of the three hundred describe companies that were being .

created none an mega fan. I remember that was just yes.

they had to see gates for the sea. Ge, um and so I said I want to create my own space, you know, I want to create my own expertise in an area that I could fundamental be interested in. And that ended up in my attack. And so focused on life science is the first fifteen years of my career. And that can be like alex and self comes um how .

host companies will you um anything health .

care or medical or biotic related? But I became fascinated by and educated myself, and which that would be nice to have the internet back. What would you study its effort? I was a political science major. So of course, that prepared me for my life with my husband. I did have an interest in politics.

but no technology, no engineer.

I think everybody takes a computer science, stanford, but really .

interesting. So all investment partners, very sophisticated VC platform going back to like the late seventies I think is when they um so when you join them in the eighties, uh, what did you what did you focus on? What what was was IT health care right out of the gate or how did that transition take place from Carrying Steve jobs bags on the road show to focusing on health care?

I think my interest said we'd found a jensine just intellectually interested in the area, but worked on some software companies, back them, and then decided I really needed my own hook. Like the reality is, in every career, you know, you should, you need to create your own expertise and your own a special lane. And that was going to be my line. I wanted to differentiate myself from all the other engineers at adobe and do thing was that .

kind of a White sheet at that point? There was an a lot of competition there.

Yeah, yeah. That was the other thing. Wasn't any real competition ao can in terms of the market.

IT was a new burgin ing area. You didn't have to be A P, H D. You could hire P, H, D to help you analyze these things.

What was oak core focus when you join them? Was was health care something that had they previously played in? Or or you essentially did you stand up that sector? yes. OK, yes. So what else were they investing in at the same time?

Well, a lot of hardware, I said a number of destroying an's P. C. And we did actually invest in compact during that period. Um and so IT was more PC hardware, telecom related.

So clients, the lp s who come to oak, were they just giving them cash to be allocated across all these different sectors? Or did people say or i'll try a little bit of health care?

No, we always had and we do have a OK C F, T one fund that everything and and we would choose the allocation .

so that in investors are getting exposure to whatever you guys think is the the most potential, right? So you're listed as a managing partner at oak as well as um a managing partner and co founder OK H C F T. What's the relationship between the two companies?

There is there is no relationship. Open west partners is is well down effectively. And so there until the last company is just waiting .

for a right yes.

exactly of an obligation to those lp s in that firm. But the reality is there is no relationship. We started O K C F T because we had had two practices, second health care in fin tech.

Uh Andrea ams and myself launched the firm. And ten years ago um and really wanted to focus on the new model of investing that wasn't just ji nights from twenty five years ago. Where was just you a good adviser and you don't have a tAllent function and you know the model really changed to become me service and the two entrepreneurs to support entrepreneurs.

And IT was always partnering with entrepreneurs in the past. But the realities that became a far more competitive world, you really needed to be deep, and especially to differentiate yourself. You needed to have things like and tax support, talent support is enormous because that is all about people. We have five individuals setter to singly focused on talent, attracting talent for our companies and also introducing us to repeat on terms we haven't invested in before.

So you've use the phrase ji nights in the past. Tell us a little bit what you mean by that. I get the sense the world adventure today is very different than the eighties and nineties.

very different. I think the gene nights means that ever it's just a group of individual, maybe a firm, but it's a group of individuals that are of all out for themselves just investing directly with entrepreneurs with no will overlap between anyone else in the firm and that entrepreneur where now I would say like OK, safety is very much a team based approach where we support the entrepreneur in a mirram ways um whatever they need, you will, we will supply as a firm.

And so so some of the VC books in and autobiography and the like that i've read kind of implied the early eighties and earlier days adventure was first they would write a check, and after they had been running checks for a few years, they ended up having a bit of a network of other engineers and other venture funds and other entrepreneurs. And so people would plug into that network.

IT sounds like you describing something much more comprehensive and holistic than the venture of old serving. The entrepreneur puts inflection on those bones. How much service does oak provide to the companies you work with besides funding?

I think the first of all that you wish talk about that the difference between the world where sure, everything there was more there was less capital and more entrepreneurs, they so the supply demand baLances was such that there was a lot more power, I would say, with the money than with the entrepreneurs and the great entrepreneurs.

I would say that's flipped in this world and that there are obviously many entrepreneurs, but there's also in a lot more money in the industry and say you really have to differentiate yourself. And I think that's where the service model came in of support. That is how in part you difference yourself.

And yes, it's great relationships and great advice, but it's also the rampant of talent, which is huge, like recruiting and understanding that they are providing someone go to market advice at times um exit, really understanding the process in terms of exciting companies, introduce introductions, which is the importance of being deep in these two sectors. As you know the customers we know the customers intimately. We create relationships with them broadly, and so we can help make the introductions as well as many of those customers and at being buyers of the companies. And so just understanding that lifecycle and being completely connected to those communities is really is hugely important.

So that flipping of the power dynamics from the capital to the um does that have anything to do with companies now staying private for so much longer? That seems like this endless amounts of money around and and no shortage of people willing to to fund startups. How does that dynamic play out with all these companies just postponing ipos for seemingly much longer .

than they used to think, it's less about postponing idea also. Certainly some of the age, some of very large companies are doing that um in order to realized full value. I would say that the IPO market is not as IT is so cyclical. It's just not, for example, is not friendly right now um and it's hard to get exit.

So I would saying these two sectors mean a strike can go public any time IT wants is when you choose to go public when he feels like the values there and there in the best position from a profitability standpoint and growth perspective, the reality, most companies cannot go public. What is changed dramatically in the last thirty years? Is the comes to go public much earlier in their life cycle.

Now biotech, which we we don't do anymore, we do all technology enabled sufferer gn services and healthy care. And that that pivot started in two thousand with a final health. The reality is, is IT is not an exit to go public and with biotech is just a funding mechanism, right? There is is a public private world in biotech.

The rest of the universe, you really have to be a more mature because you have to be an over billion dollar market company haven't make any sense of public. There used to be companies that one hundred and two hundred million dollar market cap, so we go public. But it's it's been made much more difficult to be a public company.

There are far fewer people to play with. Those comes if you don't have a large market cap, people don't. The liquidity isn't there. Um the dollars so much larger going into these public companies that it's just a it's a very different world in a was thirty years ago, but now we created in the private markets sort of private public world um and I would say well, eighty percent of our exit or through strategic the financial in A P E world is our buyers for early stage companies, but we have to get them .

profitable. You know IT seems add that markets at all time, hires at the same time, not a friendly IPO market. I'm trying to remember the last time those two things happen at the same time, right? Like you think back all time hires, late nineties red hot IPO market, even mid seventies before the financial crisis, pretty robust IPO market. And then again, venturing and IPO right up and through the early part of the pandemic. You know, red hot market, this is my first example of all time highs stocks, but not so much in IP oceans.

But I think you looked at the market, so much of that has been driven by the top seven to companies. So it's a bit of a head fake. You're now seeing rotation right? In terms of other companies, yeah, yes, other companies now benefiting by the markets from being higher.

But I think the reality is right now, we just have an overhang from I absurdly in my world legend speak to health care and fin tech and number of companies going public. And then disappointing or or evaluation has been excessive compared to the maturity of the businesses. So I think there's is a hangover from that and people are going to invest in known entities that are already public at this point. And we still have a ways to go. I think for some of those companies, many of those smaller to midsize companies being valued in the marketplace and appropriate.

really interesting .

quant computers aren't like ordinary machines. They're built from the ground up on the physics of the very small. And by harnessing the power of the quantum scale, we can now see and understand the world down at the level of individual atoms and molecules.

I wanted to find out about the hope that this new tool could help cure cancer or be a game changer. The climate change joined me, hana fry, on the exponents era, a blue bag dot com for its national nokia. You made IT through all the stars and stops of your tech business.

And when you're with M, X business plan, you can cut on a network of benefits to keep going, including access to over one thousand dollars in business and travel value anally. And thanks to five times membership rewards points on flights and prepaid hotels booked on M X travel 到 com， you and your plugin engineers can get rewarded for working in the cloud. That's the powerful backing of american express term supply. Learn more at american express dog comsat max business.

So let's talk a little bit about some of the companies that you guys have invested in. You were very early in some iconic names. You mention the thea.

There's also one medical philae d devoted health, quite a run of really big names. Tell us what LED you to these companies. How are you so early, so often in companies that turned out to be, you know, big movers in the space?

Well, I would say it's started with a thea health backing. JoNathan bush in the park brothers, they are taught in at park with founded catholic, actually be tired and then then devoted. So a lot of what we do, or repeat, entrepreneurs.

Ce, you find a great entrepreneur. You develop a deeper relationship with them, their friends as well as business colleagues, and then you back them over and over again. And so we've done that very successfully over time. But I did start with that. The whole tech enabled services approach and health care started with the atha, and I started with a review that we really just wanted to invest in things that lowered cost, improved outcomes and patient experience in healthcare period.

The end, give me, give me those three again, lowered cost, improved outcomes and patient experiences. Well, that sounds like you know the holy grail. If you can do all three of those.

so you don't always do all three, but at least two of them really is a mission for us and trying to improve health care. And he started, I think I was the first cloud based health care company, and we invested in them. And really this is a red cycle management company, which was part of our thinking also around why we payments and in tech lot of overlap and all payments world in health care.

But so and then and then I became an E H R electronic health record company um seven years later actually and so now they have one of the most important hr in the country um and in that space but um but I really IT was just like pay doctors faster, Better using technology um and so if you are looking at some of the newer companies, they devoted, which is A A fast line company that's focused on medical advantage. And he is competing with all legacy companies, united, humana, elevations, anthem, though if you think, if you look what devoted is doing, they have redesigned the entire tax tax. They are using G, A, I in their function. They are a combination of A, A villager, oak street, N, N, M. A plan mean.

meaning that they are actually.

they have devoted medical group, which started as virtual, but as a network, managing network of the care. You cannot, you cannot, as a health plan, directly manage the cost of cost of care is eighty five percent of all health care. And so as a health plan, in order managed care, you actually have to impart own like hair. And so divided medical group starts with, you know, primary carer x virtually wrap around services virtually as well, like is extending their network so that they can actually impact the quality and cost of care. So there there really is nobody else effectively doing both being the inm a plan as well as being a source of managing the care.

And so they've done that amazingly in the world, the fact that they have a modern text that that no one else has everybody else riding off a thirty and forty year old legacy programs even I mean, if you look at at back just from the my software aside, I mean, that was legally based on mop sit out from the nineteen seventies. So what's exciting about devoted is that you're now seeing the impact of all of that. We're ma plans all over the country are suffering and their access excel this .

environment. So let's talk a little bit about quality and cost. IT seems like health care, unique in the U. S. Business space, has been so resistant to an enter in form of technology that improves quality, reduce costs like technology. And computers and software seem to have improved productivity and lower costs everywhere twenty thirty years ago. And it's still compounding why has health care been such a chAllenge to build in basic technologies? Why are they still working on thirty, forty old legacy systems?

Well, so like banking, as many of those are also working off of cobo systems but are now finally being reinvented. I would say health care, if you actually do, the most people who worked in have worked in health care, there's almost like a right brain, left brain disconnect and that you're either tech for castor or health care focused.

And I would say what happened last decade is that you have a Younger generation coming into the industry that are just naturally tech focused, tech service users. There are a number of technologies that are not interested in health care. And so there's been much more reinvention, I when I think not to talk about devoted too much.

But the reality is the CEO at the park is a computer science major from over. So that is is like a different mentality. Uh, and I would say if you if you look at most health care companies, they just have not focused on that and they haven't.

If you're at hospital system in gentle, you've not been forced to be truly efficient. H, C, A different story. They have, but in most cases are theyve implemented epic, or in some cases than the ambulatory side and maybe in etha.

But they are not tech. This is not their business. Other court business is delivering health are and they really haven't understood the power of tech. I do think with changing in the massive inflecting point right now with gene I, you now have all this on structure data that they that is abundant and health care, and you now can take the that and have the power of that to change workflow, to change and support the doctors and nurses that are delivering here in a way that doesn't require behavior change, but makes their lives easier. And that is gonna game change.

So I want to put a little it's almost declined to say flesch on the bones. No, no one intended. So I have my charts by epic on my phone, and it's the first APP i've ever used where I can renew a prescription.

I could set up an appointment. I can ask IT after question, but literally six months ago, if I wanted a record before I put this on this phone, the doctor's office would say, facts, your request to us. Like, what's the facts? I mean, really, we're still using fifty year old technologies, but that seems to be in most of the medical profession.

I know there's some security concerns in some rules about what can and can be emailed, but faces, I mean, they're living in the one thousand nine and seventies. Is IT. Is IT that far behind the curve for much of the medical? Yes, yes.

yes. Just even in the new york city just got any doctor and you will find that there is still faxing or handing you a piece of paper and they're not integrated with their own hospital system that they may be affiliated with, with their have surgical privileges at. It's absolutely ane my know images i'm still carting around on disk or it's it's crazy. No the the amazing thing and the problem with hipper is you're right .

like you .

can't do zone suppose zoom. What makes absolutely no sense that the fact is considered secure.

right?

IT sits on the facts machine somewhere. anybody. The worker that night can be an exxon, the whole thing crazy. And somehow, you know, your private email is not private enough. So I .

mentioned my charts. Epic is still private, very large private companies. There's been in some litigation because of any trust concerns with them. How big is their penetration if so many offices are still you know faxing records around the .

penetration is enormous and growing. And I effectively sener is losing traction and um losing clients every day. And and yes, epic is is owning that market. Is that .

because the software so good? And I will tell you my experience with the APP, you know, a ten at a ten. But what else is happening behind the scenes that giving them such an advantage over everybody else?

Well, I think senor lost its way in management a decade ago, really a decade ago. So just really .

opened up IT just opened up.

There wasn't IT takes time to create only different models and only different departments. So this is just a time game almost. And that no epic had a lot of time to create integrated software across all of these different departments.

And and because they got every economic medical institution in the country to effectively adopt them, you've become a standard and there is a danger in that, right? In terms of the talk about they they are going to have a growing monopoly in this market. Um there well, you say it's it's a benefit.

You know their views like apple, they're going to be a world garden and that will be a benefit to the customer. That's that's okay. And certainly hospitals, you know like IT and there's a real benefit to IT. I do think the issue is, I mean, we would never sue epic uh, for small companies that are trying to interface with them, that isn't the way we roll. But I do think that there um it's a cautionary note about the .

amount of power the hundred .

you as an innovator has to have privileges to link into that system.

So so they were the disruptor and now like apple was the disrupt. Now they become the the dominant player. So that's why there is some some chAllenges.

I I I was kind of shocked when I saw the chatter about any trust, because little is the first APP that just works as as a patient wait, I can do all these things, prescriptions, appointments. I can see x rays, whatever. Wow, nothing else has ever work this.

Well, they always send you to a website which opens up a different side like IT. Nothing really felt secure. This really does feel like a secure APP. So so does that create opportunities, uh, for other companies to come in and being disruptive ruptures? Or are are they sort of blocking the the entrance way to new startups that want to compete that same space, right?

What I think yeah let's define the space right. That is just for providers and hospital system specifically um not independent providers um there. But you think about the way we think about um health care in general.

What we do to enable offering solutions is we are we're treating farmers services. So farmers, a client, employers, payer, employer market, is the client and payers, our clients beyond our customers, our companies beyond just hospital systems. Actually, this has been the hardest place to play.

And where we've made the least number of investments, the viewers number of investments is in hospital system speakers, epic owit um and so it's been its through dangerous territory for a Young innovator to go into. But the plenty of opportunity to have pair solutions to focus on provide creating companies that are value based or focus on out how do we create Better outcomes in medicare h and commercial that don't mean that you're competing in the hospice environment. I get but back to G A.

I, I think the reality is because of on the fat, the power of unstructured data, I think that there will be many more opportunities to be a disrupter in the hospital market. And I don't think it's surely possible. My dream would be in a decade, ten to twenty years, that you n ouldn't need an epic, because you would have the ability to integrate with all these solutions and using instructive data. Ross, the hospital.

So you guys aren't necessarily an investor in hospital systems or hospitals. But when we look in the hospital space, there's been a lot of private equity activity, has been a lot of consolidation. A ton of not for profit hospitals still Carrying that moniker have been picked up by four profit, a private equity players. How do you look at the consolidation taking place in the hospital chain area? How does that affect how you think about software technology and and integration?

There will be more consolidation. IT will mostly be done by not for profits, that is the vast majority of hospital systems in our part of not for profits, right um the private equity world we consider ourselves capable growth growth investors p but he has has bought several spital systems. Not all of its gone well um and I do feel there's some backlash to that.

You know our goal is to reduce cost in health care and improve the patient experience, and you can't really do that if you're focused on only hospitals. The reality is everything we want to do is keep people out of hospitals. That's the goal, right? Nobody wants to be in hospital.

No one who wants to die in a hospital. Um so everything that we want to do is a Better patient experience in the home in lita surgery or in the home outside of the hospital system. Um so that that's our goal and focus not being not owning hospital systems.

I will say I was on the board of H C A for a while, not as a investor, but an observer of the best hospital system in america. And if you think about that, that was A P E deal, was by a family, but multiple times, right? They went public.

They went private. They went public again. And that is the best run hospital system in america. Is a for profit the best, the most efficient, great outcomes? The and I think the way you've got to look at this, not for profit hospitals m, is that every not for profit hospital is a four profit hospital because every decision is made by a four profit doctor.

Somewhere along the line, someone is making a decision that .

impacts their income, right? So that you there's no such thing as are not for about a hospital america.

So what are the Better known hospitals that A C A managers, if if i'm not familiar with A C A generally, well.

they're going to be brands there there. They're going to be brands all over the country. There are going to be different in every market because they want to be local, feel local.

And so you wouldn't necessarily know the brands. It's going to florida and it's going to city by city. In every hospital have a different name .

like i've been fortunate to not spend a whole lot of time in hospitals. My experience in N, Y, U. Land going was kind of eye opening. Well, first, you know some sometimes you get advice, hey, goes some place that specializes what you need. So they've seen every, every variant.

And even with that, I wasn't prepared for what amazing factory assembly line and I mean that the most positive sense of IT, it's like, yeah, we do a million of these a day. Whatever you have, it's not a problem. We've been seen IT and IT was true.

They they had IT down to like being bang, being you're in and out and IT was really impressive um to see i'm just curious if that degree of competency um I think my whole cope for the whole experience with fifty box which I guess just means my wife as good health insurance as a as a new york teacher but but IT was really impressive. Is that specifically a function of one hospital? Is that a broader management approach to the whole chain?

New york does not allow for the hospital, right right? So you would experience IT in your state.

IT did not feel like I was a not for problem. IT felt like everything was get him and get him out.

Move on time. And Lucy. Somewhat competitive hospital environment and an excEllent care here, right? Um so no, it's that that is I think if you SAT in the wardroom of a not for profit and a for a profit hospital you'd be amazed .

similar the conversations are I I don't at all how do you think about um having SAT on the board? How do you think about managing problem hospitals? I just got off the phone with the friends in floria who jokingly said, if you can break your leg in fla, you know, call an ambiance, you call cab, you call an uber to take you to the airport to fly up to new york. I think he was exaggerating a little bit, but that's not the first time .

i've hurt things like over again from the people come back to connect gate, all that they do their health care connect cate, be there or northeast could be their second home and maybe they're demos a now in florida, but they come back for the the care.

How does the system that has that sort of reputation? How do they address that IT IT seems like you would think that they have lots of people who are older. They should be really good at.

They be really good.

It's it's just a um you know it's just i'm just using but I just seems like I mentioned somebody I was speaking to you and they are like find out White flour hospitals are not good. I don't think you invest in .

hospitals know. I think there there's this a long history. Think of doctors going to to florida to there's been a culture like making money there, you know and the more specialist you have, the more it's it's amazing, the more special you have more surgeries and more things get done, right? And so I just don't think they have the same tradition of quality that other states have had or northeast has had. Um so I kay, obviously they're good H C A hospitals in florida, but for some reasons on the whole ethos there is not in the same. In general.

quanta computers aren't like ordinary machines. They are built from the ground up on the physics of the very small and by harney, the power of the quantum scale. We can now see and understand the world down at the level of individual items and molecules.

I wanted to find out about the hope that this new tool could help cure cancer or be a game changer for climate change. Join me, hana fry, on the expansion al era, a blind bag 点 com forwards national nokia， you made IT through all the stars and stops of your tech business. And when you're with M X business plata, you can cut on a network of benefits to keep going, including access to over one thousand dollars in business and travel value annually.

And thanks to five times membership rewards points on flights and prepaid hotels booked on M X travel 到 com， you and your plugin engineers can get rewarded for working in the cloud. That's the powerful backing of american express term supply. Learn more at american express g consist M X business.

So i'm kin intrigued by um a couple of things you've said about wanting to improve outcomes, reduce and enhances experiences. And you talk about five levers of change that the fun looks at. And let's go through all these access, outcome, cost, speed and friction that that sounds like everybody's combined static in health care. Tell us a little bit about those five levers.

Well, access. They think we all learned a lot about that during covered there is there is differential access and it's not just a minority city based obviously rule. The rural environment .

is very chAllenging.

A healthcare pharmacies closing, you have hospitals that are my year, you know an hour and a half away from people um you have chAllenged to hospital systems. I would say in suburbia and uh urban environments, hospitals are actually think quite well in making their money of money, but in rural farmer chAllenged so that that is something um that we're actually addressing. One of our company to al main street, which is focused on. It's a oak street, maybe village md for the rural environment, but with a different business model. And the point is for them to actually own everything in those environments except for cute care hospital and try to keep people as much as possible out of the hospital but provide a broader set of care opportunities to those in rural environments.

So I, I have a vivid recollection of a television show called northern exposure. They wanted more doctors in alaska. So what the state, alaska, would pay for your medical school.

But you had agreed to practice there for five years IT seems amazing that in the united states and twenty twenty four there are health care deserts. Why have in states and I know this is not your expertise um but IT seems like states should have adresse this a long time time ago. How is that possible in a modern era, you could be two hours away from an emergency room. It's unthinkable, at least in the try state area. It's hard to imagine.

Yeah, no, I am in the fact that they should be in setting primary care pink for people's medical, go into primary care and go to real markets. And there are some that are doing that. I think about virtualization though, because of one of the aspects of a main street or some other models.

We have care bridge is that virtual care and rap round care. So much of this actually can be done virtually. You can have specialist in a network that don't your best oncologists from msk in new york city can be advising people in real environments, right? Morial watering, yes. Or kettering ing, exactly.

So so what's the difference between virtual and rapper around how how do they differ?

What I think rap around may mean that you have a connectivity locally, plus you have virtual care that extends what is available locally um but rap around could be you have um in carriage case you you're managing what we call dual eligible um which are those who have medicated and medicare. There are the sick is that the sick that are in long term services, home base services. So they're in the home gene, their thick enough to have a caregiver and whose either family member or a career who's hired to help them out and and then you are supplying you nurses and I made and others that will they get to know these patients, but all virtually.

But at the end of that kind of developing a relationship with the caregivers that have and we have an ipad in the home with a button, essentially, you think like the nine one one button where you hit the butter as opposed to of a sudden for every issue, sending that patient to the emergency room, which is widely expensive, right? And not constructive because often they get admitted and you know and they are almost have a thirty thousand dollar expands. Um the reality is that bun is going to a nurse is on on a in a school center for a care bridge and or a main street that's taking care of that individual and and actually know launch knows the medical records has gotten developed a relationship with the caregiver and the patient so they can walk through what are the issues to say mental health crisis which is that you know often is or uh get ahead of some of the chAllenges of wound that gets taken care of as opposed in the E.

R. About somebody going to the home, we're getting them to another facilities. So these are the things that is just like long dial care management of individuals. And the chronically ill are those that end up in the hospital.

More often. You can craft that the company, you have an investment in IT IT seems so obvious. How do we get Better outcomes and less expensive cause by intervening before they end up in emergency room again? How has this not taken place before? Is is that what care bridges .

core business? The of the chronically ill in the home that in that are dual eligible. And that is what they do.

They develop a relationship. They are ground. But they is all about part of this as financial alignment. They have contracts with the health plant to take care of these individuals. They could paid. Basically, they have full responsibility for the cost of care for these individuals, so they highly incentive to take good .

care of them .

for those emergencies. The rooms, the two most expensive things in health care are rising. Hospital costs, which are up like twenty percent this year, and drug costs.

So if you can manage drug compliance Better, and most importantly, the easiest but not easy thing to do is to keep people out of the hospital appropriately. Nobody wants to be at the hospital. I mean, this is the thing I always hospital who you talk about, your za management, you're giving people out of the hospital. Well, that's actually our jobs do preventative care and keep people from using the most expensive .

resource in america. And it's always astonishing to when you read, I think medical errors are the third most common cause of of fatalities in the united states. That's a stunning number. And I guess why no one, none of us really wants to be in a hospital. And this we .

have erred to be in hospital. You want IT is dangerous. Think about the infection right in the hospital, right to staff. And yes, it's IT is actually dangerous to be in a hospital. So they're going to be a good reason to be there.

So so we talk about our access outcome. I'm kindly intrigued by the focus on cost, speed and friction because all three of those seem to apply to both health care and financial technology. You mention they both live on old legacy systems, are not nearly as cutting edges they should be. Is that how you ended up being both the health care in a thin investor.

certainly between insurance and payments and website? We thought IT was in two thousand and two and obvious place to go and having going into biotech and then enable software of using leveraging the internet in health care early, I just felt like payments and fin tech. I wanted to be like that was an area.

You could just tell the tailwinds we're there and said we came in two thousand and two before anybody knew what in tech was. And we were focused initially on prepaid under bank to market uh, and prepaid under sixty. At that time, sixty million people in amErica did not have checking account or credit or debit cards.

And think of about what you can do, okay, you have the evident of the internet. You can buy things online. You couldn't reserve a hotel room, you couldn't run a car, like all these things that I change your life.

So by investing in net span, which on the first prepaid debit cards, people could actually do those things, they could buy line, they could reserve a hotel room, they could run a car. I mean, these are game changing things to someone. So that was exciting because we were changing people's lives and giving them access, democratizing credit effectively.

So it's interesting you started in fin tech in two thousand and two because I recall former vecher and paul voca said only half and jess and I want to say I was twenty eleven, twenty twelve. Um you know what innovation is there in the financial space other than the A T M, nothing's happen. And IT seems like that really is in true. There's been a ton of innovation in the financial space. Tell us some of the other fin tech investments you've .

made more recently and fraud just think about fraud is being an area .

of stant stand stant .

battle s is an arms .

race and will .

even more so think about what happened was the world you had card present right you may or swiping and peat the point of sale and then we had the internet come along and virtualization of payments. Then fraud exploded and now with um gena I and obviously d fakes you a personal present. So you've got a whole different level of a fraud that is being experienced right now, right where somebody y's mimicking your voice for a call right um .

literally just had this conversation yesterday with my head of compliance um IT was I remember with giz motto or one of those sites that talks about the fake calls you're getting supposedly from google who will never really call you assume many phone so you're getting IT is a fake but the A I agent on the other side sounds so realistic um always ask them to sing a song and and that was that was the solution in A I apple sing IT until or whatever silly thing you ask um but IT just seems like the ability to in personal people is just getting Better and Better a who's gonna in the arms race.

I think it's just gonna a continual battle of they'll create new ways to implement for us and then will create solutions against that fraud. And so IT is I think we will be a perpetual and continual battle. We have come as like feeds, die, improve that are focused on that area. feeds.

I focuses on race management and combatting fraud.

Combating fraud for and proof is that when you get the painting you're putting you're doing through of double of indication, there are the ones that are integrated in the Operating system of phones and effectively are giving you that number, that pain when you're typing in the second number to authorize a transit action. So so we have a number of companies, probably something RAID in that space. Um other companies that do, if you think about the market, amErica and where we are here in terms of credit payments, think about latin is two decades behind us. And so we are seeing a number of opportunities in fin tech .

and two decades behind .

yeah two decades behind, which actually will probably be an advantage and they will leave progress because they don't have .

this will start from scratch.

scratching and scratch. And if you look at brazil, we've created something called pics, which they built for two million dollars, which is amazing by their central bank. And its real time payments and effectively, it's a protocol and effectively lose bank to bank authenticity.

So if you think about A C H and your cash account to somebody else's get IT is incredible complicated in the us. H to do an A C, H, transfer your bank account to another bank account, right? There's this takes forever. I.

I, I wanted to address that. I grab my phone and i'm opening the folder with the fin tech apps on IT. So then mo is the easier thing the world to use just to send money to someone else. But I did something in um south american columbia.

I had an old truck rebel t in columbia and I was using um remitted and world rimming to sends as long as IT was less than ten thousand dollars at a time internationally IT was like click click done. That was an unthinkable nightmare. Uh hundred five years ago, ten years ago.

I'm i'm looking at the T D in the swat bab. I'm looking at the chase. Um I mean, just the amount of things you could do on your phone. So IT feels like the innovation.

certainly the consumer experience there. It's onic though, because if you think about them, but everything runs on the credit rails, right? I think that actually was happening on the VISA rails, the mascot rails m max. And the reality .

is something always .

cure in exist, right? It's easy. So I mean, they about apple, right? They run on you.

You're putting your credit card in for apple pay in that I drop the phone .

on IT and that that goes right through. And so what they've done in the attempt is created a pretty friction free VISA like rails, but the very cheap like sense pennies you like virtually no cost. So that is then that is promptly taken like forty percent of um creditor and democrats actions really.

And and wasn't there a couple of things done um over cell phones in in parts of africa where they didn't have a credit at system in just you know necessity being the mother invention came up with some things. So my question is, are all of these various things secure um or you know what is the chAllenge building the next generation? What's going to place will anything replace credit cards?

Well, I think real time payments will replace creditors, but you are going to build costs on top of IT because you're time about large B2B pay ments, right? You're still gonna talking about something that in even larger B, D, C payments, there is more fraud d capability that needs an identity, authentic abilities that need to be built on top of the there will be great appetites requests us to invest in that will create B2Be Ope rated on top of pet s and on top of, uh, other infrastructures that are being built uh, in h later or india or or africa.

really, really kind of fascinating. So given these two areas that you focus on and the track record you guys have put up. But I just wanted to mention again, um you were named uh one of the top ten venture firms of twenty twenty four and a number of other um accolades last year.

How does this affect the deal flow you see in the companies you look at? Do you have your own space and that's what you drill into? Or are are you guys a little broader thinking about uh, a variety of different types of companies?

We for example, we have defined vintage very broadly. If that is e commerce infrastructure, it's it's fraud and identity. IT is payments um IT is general infrastructure um so with fairly broad and to say how we look at IT, I think the as we think about an opportunity in the sector, think of us is starting things or backing an entrepreneur who has stated something because we have a whole thematic approach to an erano or dark with something we just did all the way up to a classic A, B, C round, right? And we'll even do an occasional biot too, where we think there's huge growth opportunities if we invest in the tech portion of IT.

So something we did recently, I I think that is emblematic of what we're doing more lately with the two billion. Our most recent fun was two billion. And we backed the individual, dave Clark, out of a amazon who are built for twenty two years, built all the sibly logistics s change at amazon.

And he brought his chief scientific officer and a number of people from amazon. Others see that he's work with. And when we announced this company, twelve hundred people that they submitted resumes to them, IT was IT was extraordinary and speaks to his reputation.

And the idea is, is that we will build A I software native, a software platform that won't incorporate some of the supply chain software boutique, best breed, the of systems that are out there of the constitute of supply chain because if you are an amazon or someone else, you're working with twenty different vendors to complete your supply chain. In the reality, you really want that integrated in one infrastructure. And so their plan is to basic build the supply chain .

infrastructure from from when .

he leaves .

this place to the ends of that place and and all the quality tail metrics and tracking and everything that goes with IT, really.

So we commit .

a oh no oh, so that you you're pretty that sounds like a pretty big bed.

Yeah, we're all in. But yes, we're doing more of the hundred million plus investments, seventy million or investments as we want concentrated bets uh, in the areas that are most exciting us with the belt entrepreneurs.

So I only have you for another ten fifteen minutes and and before I get to my favorite questions, I ask all and I guess I gotto throw a curve ball at you, kay, which is Normally at this point um in a conversation with A A V C we talk about you've had seventy exits and fifteen IP s and but you're also the first lady of connect cut you're married to netley's the governor of connecting kind of an unusual role for first ladies being a VC tell us how you juggle these two roles it's you're the first VC i've spoken to who's also .

in a statehouse the great news is that there is no expectation for the first lady of connect cut the there is no established role um and so I really is a partner to my husband as I would be in terms of just their support and guidance. But um I do campaign with them. I go on weekends, we do things together, but he's very much running the state of connect gate.

Well, I am doing my thing you during the week um and then we come together in connecting and renege during the weekend. But it's been am is fascinating, loves the job. It's on biased. I think he's done a great job for connected good as a business man himself, but so many who has a um man of his social conscience. Um so it's been funded water because he does love the jone.

Really, really interesting, right? Let's jump to our favorite questions that we ask all our guess. Starting with since you mention you like to uh, spend the weekends with your your husband, the governor, what do you guys do on the weekends? What you watching, listening, what's keeping you entertain.

can you can't basketball? I can't wait to have you back. So women and men are going to be amazing this year. So only I have been with the man of one a .

two years in a row. Huskies have a great team. There's they've been winning .

for a long top five injured players got into the basically the final four was incredible. So between geno oyama and then hurry to the best coaches in the country. So that's been superfine.

We go to games and we and we watch on weekends, but I don't I don't know if i'm an athlete, but I love sports. And we like sports. We play golf and tenison.

Hiking is being out ski, being outside as much as possible. And he march, expense long suffer. Jets fan, we're hoping the jets back. And I want to be a packers fan being from my concern .

really interesting tell us about um our early mentors who helped shape your career.

Yeah there was an individual jury galera i'm from wisconsin. He was from metal sota and he ran for um a prior firm. He ran the retail and gusting um and was a brilliant investor and he was somebody don t love and jn red in the early days he was the retail analyst and he actually invented the same store sales metric.

Oh no. Can if you can imagine people are just saying, oh, that company is growing under percent year. They didn't they had added one hundred store you know double stores.

But yeah so he actually invented that. He joined us and invested in one of the filing basement um a whole foods amazon whole foods which we saw the amazon um dicks sporting goods office depot. If it's just a little pf chain jump a you so we just believable to act record with the best retail investor in the country.

Um and he taught me at ton as so he was the first person when I was twenty seven years of age. He said to me, you've focused on yeah and you're not focused on the CEO. And if you're not focused on the people like you have got to raise your bar on CEO.

And and of course, it's of course it's I mean, so obvious it's all about the people, but I think people you do get in emerged with trans, secular trans and ideas and ultimately it's IT was the most important I said anybody ever gave me because it's all about the CEO of the day and the team they can attract and how they treat people. It's and I think he was very much golden rule. No, he was. Some might have consider Jerry old fashion, but the reality is that that old fashion message just cycles back in every crazy cycle. Have a entrepreneurs and that is not just obviously do the right thing, I know, and three people like you'd like to be treated and be kind and yet be directing.

You have I I don't remember which V C. I was that said the same thing that you just said about backing the the team and the the entrepreneurs. A but to drive the point home, hey, each of these companies that have had a successful exit, they've pivoted five times. And however IT works out, it's never the initial idea. It's always the person um and I never really thought about that until right is is if if you're betting on the idea, you your three iterations away from where it's going to end up.

the general idea idea trend may be right, but actually the business models wrong. So getting the business model is so right is is so critical.

Really, really interesting. Let's talk about books. What are some of your favorites? What are you reading right now?

Well, original favourite was to kill a marking burden. I would say that that like I influence my sense of social justice um and then it's probably the rover macy books and i've never been to russia, would have been fascinated by. Peter the grade, netlist Alexander Catherine, the grade.

I mean, one is so if you look at was going on to russia now seem exactly like you understand cultures, right? I mean, it's not like understanding history and because they don't doesn't change that much trade. I mean, you say that is a that is a country that understands suffering and legs.

Other crabs basically like not a coincident right? Yeah yeah not a coincident. So yeah.

Then as recently the money trap writing by a friend of m. Min, a log summer is a fascinating book. He was the head of soft bank during the crazy period in north america.

Yeah and he actually never write a book. He went to the creative writing program. He got this they stay in america, went to the create writing program in new york city and um and read this book nis absolutely beautiful written and it's fascinating .

so I highly recommend to put that on my list. Um if you you mention books about russian, I know you're talking more historically if you haven't .

read read notice by I did well and .

yes did not IT IT reads like it's fiction and it's such a page Turner um alright, our final two questions. What sort of advice would you give a recent college grad interested in korea in either venture investing, health care for tech? What would would you? How would you advise them?

They have to go work inside companies, and they should go work in IT, start up in an early stage company and maybe mid stage and definitely larger legacy company because they need to understand business. When I read the new york times business section now, I think these people have never been in business, and I obviously blimber specializes in IT.

So as a lot of reporters that deeply understand that and respected, but I think that you can't write about something you don't haven't actually lived at all and truly understand what is there are obviously things that are very flawed in business and it's often protein. The last stage, extremely chaotic. But IT is what drives our economy, which provides jobs for people and employees, people and allow them to pay their bills and support all our great social program. So it's important. understand.

And our final question, what do you know about the world of investing today? You wish you knew back in the one thousand eighties when you are first getting .

started is an interesting question. Because I, you know, maybe because I have a tough lone memory, but I feel like I only remember the good things. I think you know knowing that large secular changes of the most important thing that drive investment waves and right and ultimately build great companies.

I'm just focusing on those. But I feel like I ended up actually doing that well. Um you know picking the circular wave that made sense and getting ahead but not too far ahead of you is going .

to say you did that well. But you you also early in a lot of big secular.

So I would say I that ended up working well. You can be being too early as a killer investing. So that worked out well.

But I would say I you know in general, I don't SAT the small stuff. You get the large things right and the rest of IT will take care of itself. So I I I only caution those that are starting out now in the investing world.

They're Frankly, in any career to just you, you all those things that seems so important, that are so small during the day. I just remember that. Think about yourself, forty years now, what's gonna matter? What will have matter to you?

What will have matter to your success and just focus on those things and don't focus on all of the petty small things that they may go wronger the people around you, you know, and then otherwise just go stay away from xi people and make sure you carefully work with people you love and respect. And I think in general, i've done that. But I think there are times where I would have walked. I would have started OK safety so much sooner. And that would be like the one change in my career that I .

would have made really interesting. Thank you any for being so generous with your time. We have been speaking with any lamon co founder and managing partner and O, K, C, F, T. If you enjoy this conversation well, be sure to look up any the previous five hundred discussions we've had over the past ten plus years.

You can find those at bloomberg, itunes, spotify, youtube, wherever you find your favorite podcast, and be sure and check out my new short form m podcast act the money conversations with experts about your money earning IT, spending IT and most importantly, investing IT. Add the money in the masters and business feed or wherever you find your favorite podcast. I would be remissions ed.

Do not think the crack team that helps me put these conversations together each week. Analog is my producer. Sean rosea is my head of research.

Steve gunn zell's is my audio engineer. Sage bowmen is the head of all podcast at bloomberg. I'm barry results. You've been listening to masters and business on bloome berg radio.

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