Lessons from investing in healthcare startups
Hey everyone,
It's been a while and I am getting back into putting this out regularly again. Thought I would share some lessons from my past 2 years of investing in startups.I have invested in 5 startups in the past 2 years and looked at about 500. Although its too early to tell, 4 of them are doing well. As a general rule of thumb startups fail fast and success takes some time. Here are some of my thoughts, I will highlight my misses as I learn the most from them:
Founders
Once you speak with enough founders, the winners start getting more obvious. The biggest predictors I find are speed to action, radical honesty/ humility and interestingly charm. I am currently reading the Venture Mindset and they mention how some VCs use founder charm as a strong signal for future success.
Tortus
Tortus is a startup I passed on 2 years ago and they have gone on to raise a seed round with Khosla Ventures. While its still early in the game, it certainly appears they are on the path to success. They essentially reduce physician charting time and administrative burden. Their business model at the time being that it saves physicians time and we could potentially see more patients as a result. My main rebuttal was that burnout clinicians do not want to see more patients and I failed to see a future where their tech would receive clinical adoption.What I didn't see is that burnout physicians were at a point where they were ready to pay for a solution which reduces their administrative burden. The rise of AI scribes further corroborates this,
Mental Health Startup
Two years ago I had the potential opportunity to invest in mental health patient community startup at likely a 1/5 of their current valuation. They have achieved powerful network effects and secured a distribution advantage I did not forsee. There are numerous startups building patient communities and networks, I think digging deep into the tech and user interface is important here. As I build my technical diligence team, I will do deeper dives into the underlying software as a potential signal for future growth.
Final Thoughts
Predicting future markets I am finding is near impossible, while in some sense investing in startups is a game of betting on future markets, it might be better to focus more on the founders. Investing in startup is a game of finding a needle in a haystack and you only need one winner. I love Bessemer (one of the best venture firms) approach of publically posting their Anti-Portfolio
Thank you for reading,
Rishad
