Founder Stories: Nate Gross, Co-Founder of Doximity and Rock Health

Hi everybody. Thank you very much for having me here today. Personality-wise, this is scary. I'm kind of on the Myers-Briggs scale, INTJ, pretty extremely. I'll try to swing a little E, a little ENTJ for you guys. I'll probably still be pretty J though. Anyway, my name's Nate. I am the co-founder of the seed accelerator for healthcare startups, Rock Health, as well as the physician network, Doximity. And today I'm here to talk to you guys about bridges to innovation. And what I mean by that is the types of connections that can be formed to build really strong types of products and communities and relationships and ideas that would not exist just from a single party in the fragmented healthcare system. And for me, that was a long and expensive lesson. It led to several years of exploring and two different types of student debt. So I'm hoping to share some of these lessons so that for you guys, it could be a little more streamlined. I'm gonna begin This is a story actually somewhere where there are no bridges at all, or very few at least, in Atlanta, Georgia, where I went to medical school. And actually there are some bridges there, but those are freeway overpasses. And this picture is misleading because the traffic on the road is not shown due to the time lapse. But I bash on Atlanta. It was actually a fantastic place to go to medical school. And in large part, it was really due to this hospital, Grady Memorial Hospital. Which is one of the large, public, rough-and-tumble, you know, really elbows-deep hospitals in the country, which is a great place for medical education, and you really want to spend all your waking hours there when you're there. At Grady, we, at least when I started, didn't have electronic medical records, and I realized this picture, after I put it in, did a poor job identifying any sort of timeline, because there are many hospitals today that still don't have electronic medical records. So to put it in a better timeline perspective for you guys, this was before the iPhone, shortly. And it was neat to see the transition. It was neat to be there right as we transformed over to Epic and right as we sort of modernized our curriculum and came in with new facilities and new types of simulators. And from a medical education standpoint, it was very progressive. I was proud to be— at Emory. It was great to be in there right as they switched the curriculum, but I learned that there were still a lot of inefficiencies and a lot of gaps between the types of healthcare that you would see, say, here in Silicon Valley, and the types that we were seeing deployed in the hospital. So I had a mediocre programming ability. I would rate myself at pretty good at front end, and on the back end, probably a 2004 Mark Zuckerberg PHP, but never really gotten better than that. And so I was able to deploy the things that I knew, the outside knowledge, in a few different ways. And those ways were 3 different things. The first was a way that you could quickly log into medical journals. The second was a way that, as we did come to smartphones, you could send a message to the pager directly from your phone, or in 1 or 2 clicks from your computer. And then the third was really just taking a lot of these resources that we had in medical education and the clinic and everything else and consolidating them into, into one single portal for the medical school. None of these are very complex projects by any means. They all, I think, had a great impact, but when I look back at them, they're really small fries compared to what could have been accomplished with collaboration with somebody who had a real strong professional development background. And part of the problem was, you can see Emory in the top right there and Georgia Tech downtown. I had no way to reach those people, get to those people. I barely even knew they existed because in the hospital, you really are with a group of your peers. You're working a lot of hours and you don't have the kind of exposure to the same type of thinking that goes on over there where a lot of that engineering and development talent is. At the same time, they couldn't break through the walls of the medical campus either. And so that sort of collaboration just was not really occurring back in 2006. So I ended up having a lucky opportunity to go to business school. And it was not through any interest in tech whatsoever, but actually I was a government major in college and had gotten sort of riled up about some of the health policy books and articles that I was reading during my government studies. And once I got to medical school, I noticed some of these same authors were appearing regularly in the New England Journal. And so I thought, wow, okay, these business school guys seem to have neat insight into some of the urgent topics of the day. And as far as the medical system perspective, at least in my medical school class, we really didn't branch out much farther than sort of basic health policy, and what is the next presidential election going to say about how we should change healthcare and things like that. And so all of this was very exciting, and I applied to business school and was lucky enough to get in. And again, with no real technical interest outside of the few little side projects that I had done, because to me that felt like the roof. But once I got there, I realized that there was a significant opportunity for exposure to a lot of different industries. There was the chance to meet people in the device industry, the pharmaceutical industry, the delivery industry from the management side, health policy and entrepreneurship and venture investing, and so many different categories that I didn't really even think existed before I got up there. And it was lucky they didn't ask me that in the interview because I would have performed quite poorly. When I went back and talked to all of my peers, the only thing they could really say to me was, "Oh, so you're going into hospital management?" And that's sort of what put it into perspective. To them, they still didn't really understand that there were all these other things that you can do. My father, bless his heart, thought I was going into hospital management for, I think, 2 years after I started business school. And there were certainly people, and I would not be here today or there at that time or anywhere else without the people that did see the potential and did believe in me and did support me, so I thank them a lot. On the other end of the spectrum, there was also a little bit of doubt. This was 2007, 2008. We were seeing a lot of scrutiny applied to hospital campuses against the concept of business on campus. It was right when Senator Grassley was sort of doing his thing, seeing who rightfully on the senator's part had been not reporting money that they had received from pharmaceutical companies and things like that. Now the answer there in my opinion would be a much greater process of transparency and making sure that everything you do, you're comfortable with your mother knowing, your patients knowing and the newspaper knowing the next day. But the way that the pendulum sort of swung was also towards an attitude of academic purity. And so there were many that— and I don't hold it against them— that just said, oh, well, if you're not actively seeing patients, you're not doing anything good for the health care system. And that bothered me. I didn't have much experience in business school yet, but that still bothered me because I did know that health care was approaching 20% of GDP. And at some point you had to have somebody focusing on the P in GDP, and it would be nice if some people that were deeply ingrained in the healthcare system had something to do with that. So the way I explored was I got involved in the conference scene, and I started running, say, the technology panel and the policy panel at the healthcare conference, and the healthcare panel at the technology conference, and I noticed this, the same Brilliant young woman kept showing up every time to run these things with me named Hallie, who eventually became my co-founder and CEO of the Rock Health incubator. And at one of these conferences, I brought out the co-founder and chief operating officer of Epocrates, Jeff Tangney. And Epocrates, for those who don't know, is probably the app most used by physicians in this country. I think they have about 50% penetration to docs, and it's a pharmaceutical reference. They came from here out of Stanford. And they were well on their way to reaching IPO, and he was in the process of leaving the company. And we got to talking and shared some ideas about the importance that we felt towards physician communication and the ability to optimize what is really— if medical errors, sentinel events, are the 5th leading cause of death in this country, and miscommunication is responsible for the majority of those, we thought it would be important to maybe try some of his broad network and talents and some of my perspective towards fighting that problem. And this lesson actually taught me the real value of outside knowledge in the healthcare system. You see, we did pretty well, and, you know, we still had startup struggles, but we were able to recruit developers pretty quickly, we were able to talk to investors relatively quickly, and we were able to grow without too many hurdles. And I think a lot of that was he already understood all of the screwed-up incentives in our healthcare system and understood who you needed to talk to. And because of that, investors trusted him, even if they didn't know exactly what was going on. Now, that same thing does not occur for a lot of first-time entrepreneurs. Hallie, it turns out, we started submitting an app to at the App Store because she started working at Apple. And she was always frustrated because she was responsible for reviewing medical apps. And she always said, "Well, these are just terrible compared to social media and games that we see go through the App Store." And these are just a select few that I pulled out, You certainly, for those of you that recognize some of the apps, at least on the left side, know that there is a pretty big quality difference. And, you know, the medical apps a lot of times weren't even medical. You're saying, "Well, how pregnant am I?" If you're using this app, probably pretty pregnant. And at the same time, you're afraid of spiders. And so we wanted to get a stronger, higher quality, you know, just raise the bar in the App Store for medicine. That was her goal. And we didn't really know how to do that because If you think about it, if you're the next Mark Zuckerberg, a freshman here at Stanford or something like that, and he or she is coming up with an idea, unless they have been really ingrained somehow in a healthcare motivational problem, perhaps through personal interest or through maybe a sibling getting sick or something like that, they're really not going to be exposed to it because we speak a moon language in medicine. It's just not the type of thing that you can really break into without another decade of education on top of the point where you're learning all these cool programming languages. She and I started going back to business school 2 days a week, and we did this study, and we interviewed every possible entrepreneur we could find and investor, and we asked, "Well, okay, what are the biggest problems that you find breaking into the digital health space rather than other verticals?" And for the most— for the majority, they really said a lot of it came down to money, a lot of it came down to funding. And that's understood because investors had a fair bit more hesitation than things that they could easily understand, like social media and games, because investors, again, are generalists. Even if you're a physician, you're less likely to have niche expertise in the exact thing that the entrepreneur is trying to pitch to you. And so there's this natural hesitation compounded by a lot of these outside forces: FDA approval, HIPAA regulations, what's the Supreme Court going to say about Obamacare, things like that. In addition, they echoed the same sort of problems like talent acquisition. How do we get the really talented employees to come in who are otherwise going over to Facebook or something like that? We were learning in school about— this is Eric Ries' model from "The Lean Startup." And, you know, we were learning how well that was working for a lot of startups in a lot of different industries, but a lot of these things just don't apply to healthcare. So, you know, for instance, rapid testing. A game, a social media company can go out and offer free pizza and pull people in off the street, but if you try to do that in the ICU of the hospital, it's just not going to work. First of all, the nurses are going to be furious that you're feeding the patients pizza, But in addition, you can't rapidly iterate. You need this quality bar. And so there were things that could be done if the right connections were made, we realized, that could not be done by a 2-person entrepreneur team. And that's why a lot of these bigger companies held the advantage. So we realized we needed to allay investor hesitation, make health care accessible and sexy to some of these younger employees, and then bring all the relevant stakeholders together. And that idea became our incubator, Rock Health. So it's been around for a year and a half now, and we've had 3 classes go through it so far in San Francisco and Boston, and we're reviewing applications for the 4th class right now. But in a nutshell, we, we took this model and we said, okay, this is what we need to surround startups with. We need to surround them with people in care delivery so that they can rapidly iterate, get the right clinical trials, get the expert advice they need. And so we made partners in that regard. Brought the entrepreneurs to them. Then we said we also need to bring top-tier investors so that it sends a signal to developers that this is an OK environment, and we can help those investors make the right choices to help the size of the pie grow overall. And then in addition, multidisciplinary experts, and that's ranging from everything to Nike to Qualcomm, who makes the chips in your cell phone, Microsoft HealthVault, and law and design, and we brought that same sort of expertise into a mentorship program because we thought, OK, A startup doesn't just need advice from a doctor, and that's actually maybe the last thing that they need in some cases, but rather, why not give them an advice session with the VP of engineering from Twitter so that the next healthcare product can be built on that same sort of high-tech framework? Or why not introduce them to one of the lead designers at Facebook, or the guy who designed and co-founded Guitar Hero, which has nothing to do with healthcare, but if you think about it, you can pick up that guitar and you can start playing that game within 30 seconds and know how it works. Which the same thing cannot be said about the call button in a lot of these ICU room beds. And then of course we thought it was important to surround startups with other startups. You could trade designers for a day, trade CEOs for a day, and we really wanted to make sure that they could learn from each other. So the startups have done a lot of different things. I just want to be adamant that it's not just mobile health, and in fact mobile will soon become ubiquitous in healthcare, but We think that there's much more to digital health than that in platforms, and some of the things that they're doing— CellScope in the top left there is an otoscope that attaches to your iPhone. That's me holding it up to my own ear and taking a picture. Podimetrics in the top middle has developed a floor mat that sits in the bathroom. There's 100,000 amputations a year for diabetic foot ulcers, and their mat can detect changes in circulation and pressure and essentially cut off— that would be the wrong analogy to use. They can essentially stop the need for amputations before they occur. Cardio in the bottom right can read your pulse from across the room, and there's tremendous opportunities for being able to monitor people in MRI machines, track them and triage them as they come into the ER, deploy these things at pharmacies. And so it was neat to get that kind of scientific talent all in one location, and I'm happy to answer more questions about the startups themselves during the Q&A, but I wanted to end with a few different lessons that I've picked up on the way so that hopefully for the budding entrepreneurs or the people that just want to get involved in this kind of scene in the room, they don't have to go through the same 6 years of student debt that I did to sort of awake to the realities of this space. And the first one is disruption is a team sport. And what I mean by that is I try to draw a little picture. So here's our healthcare system, and if you're a startup, you're going to have just a small domain of expertise and a small network. And then I realized that did not look like a good picture of the healthcare system, but it really should be more like lava, because it's impossible to get across and talk to these people a lot of the time. And the people that you're going to need to talk to are going to be scattered all over the place, and you can't just walk on as a for-profit startup. You can as a nonprofit incubator, but you can't as a for-profit startup walk onto a hospital campus and just start— interacting with the people that you need to interact with. So either by assembling the right team of second-time entrepreneurs or by entering an incubator, you can have a lot of that work done for you and shared across multiple teams so it's there when you need it. The next lesson is about inertia. So as much as I want everybody here to just break the rules and not pay attention to them and change the world, inertia does matter in healthcare. And it means that you have to learn the existing incentives and you have to learn why the current system is the way it is. And I'll give you a quick example, and that is this terrible machine which I hate, which is the fax machine. It was invented— early parts, if you Wikipedia it, it says roughly 150 years ago. It hasn't changed that much since. I mean, we've attached telephones to it and stuff, but it's still pretty terrible. The pager, the other main means of communication in the hospital, is 50 years old. And that's how most of healthcare communication is done. We send 15 billion faxes a year. In the US healthcare system. So when we started out with Doximity, we were like, "Oh, we are gonna disrupt this. We're gonna bring secure texting to the hospital, and everyone's gonna start using it right away, and it's gonna be just like on your cell phones, and it's gonna be great." And that didn't actually happen, because if you're a doc and you need to message somebody right now about your crashing patient, you're not gonna trust a new app that you don't know the other person has installed. And so you get this network effect problem where adoption is really hard. So what we learned was, Instead of focusing on secure texting, it would make more sense, as much as we want to kill the fax machine, to move back market, and we integrated faxing into the iPhone. So you get your own 1-800-Negros fax number, and I can send and receive from it, and all the faxes show up on my phone or my computer, and I can be interacting with a guy who will never join Doximity, never join our network, never want to pick up an iPhone, although our median age is 45 or so, thanks to the iPhone being a great equalizer across ages. But I can interact with anyone, and that helps you make change a lot faster. The next thing, and this one seems kind of strange, but work with the government. And that's largely in part due to this guy, Todd Park. Todd Park is an entrepreneur. He is a co-founder of Athena Health and Castlight Health. For those of you that know the healthcare tech space, those are two huge companies. And he's done an incredible job giving it all up, going into the government, and launching things such as the Health Data Initiative, which opens up a lot of data, and the White House Innovation Fellows. And Todd used to quote the Sun Microsystems founder and say, you know, "The smartest people always work for somebody else." And what he meant by that was the government should stop trying to build everything and open up the datasets that can be safely opened up and let entrepreneurs use them. So an example of the way a project that I'm working on right now to do that is looking at the crazy growth of publications. They're skyrocketing exponentially. And yet the way that people read articles nowadays, one article at a time. It has nothing to do with this weekly bolus of the paper journal. And so after we started talking to the government, we realized, well, this like button phenomenon doesn't really work so well for medicine, although it's crazy new. It's only been around for 2 years, and I feel like I've been using it my whole life. And medicine is just still attached to this old paper journal. So we said, "OK, well, what if we take some of these government databases, the NPI, clinicaltrials.gov and PubMed, and then we use the government's list of MeSH terms to compare those to all the interests of the physicians that we have in their profiles? And then we can send them all the articles that they're interested in from every journal under the sun, just so that they can find exactly what they need without trying to subscribe to every journal at once." The last two lessons are get in there, and this is a lesson to the entrepreneurs in the room. You know, I don't mean get in that jar, by the way. There's not enough room for you. But get into the hospital. Like, if you're a designer, you should try to shadow a nurse for 24 hours at the hospital and just learn what that experience is like, because a lot of people build things that are not necessarily needed. And if you can focus your efforts and learn where the real pain points are, that's where you're going to make a huge difference. And for the healthcare providers in the room, I would really say get out there. There has never been a better time to get involved in healthcare entrepreneurship. If you look at investment this year, by June it had already passed all the investment in healthcare digital space last year. People are excited. They're looking for mentors. They're looking for medical advisors and chief medical officers. And you yourself have the ability now, thanks to contests, thanks to a lot of opportunities for raising small amounts of money, and the cost of apps is going down, that you can just build the thing yourself if you want. There are ways to do that. So you are your own businessman, and that's the message that I'd leave to the patients and the doctors in the room. Thank you very much.