Inside the Mind of Operators Turned Health Tech Founders
Inside the Mind of Operators Turned Health Tech Founders
By Rebecca Mitchell, MD and Kathy Ku, MD
There is something about working at a high-growth digital health company that inspires operators to found their own thing – even if it wasn’t the original plan.
Vive Collective recently conducted a survey of digital health operators turned startup founders. In Part 1, “The Digital Health Mafias”, we tracked the origins of 187 healthcare startup founders to identify which companies and roles had spawned the most entrepreneurs. Now, we dive into what these founders learned from their experiences as operators, how they apply those lessons in their new roles as founders, and what they had to learn (or unlearn) on the job.
The power of experience
Investors prefer betting on repeat founders, but they should not ignore an operator track record in the same industry. 84% of survey respondents said their experience working at a high-growth digital health company was valuable for launching their healthcare company. Interestingly:
37% of respondents said working at the previous company highlighted an area of digital health they wanted to pursue
32% said their experience helped them identify a way to fix the same problem better than their employer was currently doing it!
Of course these entrepreneurs picked up more than an idea while on the job. Survey respondents cited an expanded industry network, team building and leadership experience, confidence as a leader, and knowledge of commercial strategy and sales. 1 out of 3 even met their future co-founders or founding team members.
What are some things you learned from working at a high growth company that helped you as a Founder?
Entrepreneurial lessons
Nothing fully prepares you for being responsible for everything when starting from nothing. We asked founders what surprised them most in their new roles, where they had skills gaps, and what they even had to unlearn from past experience.
Half said that they underestimated how lonely it would be at the top compared with working as part of a team.
Depending on the founder’s functional focus and seniority level as an employee, there may be a steep learning curve when they have to own and later recruit in other areas. Fundraising exposure in particular was rare for survey respondents. Other common gaps that came up for founders previously at companies like Amwell and Olive included managing contractors, pricing strategy, and product and engineering.
“I wish I would have been closer to the fundraising part of the experience,” said Jessica Bell van der Wal, founder of Frame, formerly of Castlight. “That has been a big growth and focus area for me now as a founder and CEO of my own company.”
Often founders have to shelve lessons learned at a high growth company to focus on different tactics as an early stage startup.
“The experience of being at a high-growth, well-capitalized startup during a meteoric rise can distort your reality of what can be accomplished when you don’t have a massive team of committed, talented colleagues around you and money in the bank,” said Matt Kalina, Founder of TandemStride, formerly of Olive. “Capital efficiency is key early on in a startup and the resources and talent you can attract early on requires you to recalibrate your orientation to goals and deliverables.”
Amar Kendale, founder of Homeward Health, formerly of Livongo, said he had to “exchange the tools and processes he’d used at Livongo for those better suited for a startup.”
“The number of basic tools necessary to run a company is wild!” said Casey Langwith, founder of Multitude Health, formerly of GoodRx. “We have 40+ vendors already from ops basics like Google Workspace, Slack to creative (Figma, Canva) to security and beyond. For most of them we have free versions or discounts through our bank, but the coming bills are insane! Most vendors are focused on big-company pricing, not small teams. As a founder, you have to think a lot about this and as an operator, you don't.”
Some had to retrain behaviors from the recent growth at all costs years. One founder said his previous company’s “obsessive focus on growth over everything else, including margins and profitability” was something he had to unlearn as a CEO.
What are some things you experienced or learned working at a high growth company that hindered you as a Founder?
Advice for digital health entrepreneurs
The entrepreneurs in our survey have plenty of advice for those thinking of following in their footsteps.
“Know what you’re trying to fix,” said Ashley Duque Kienzle, founder of Almma Health, formerly of Babylon. “Focus on building something that clearly solves that problem. Bring on good advisors who know the areas you may not know or who have experiences you don't (corporate or earlier-stage companies).”
“Build a team that will walk through fire with you,” said Erick McKesson, founder of Rotera, previously of Olive and Venddy. “You need people who are willing to share the mental stress of constant mini-pivots, trial and error, highs and lows, and are all in it to power through with confidence.”
Syam Palakurthy, founder of SamaCare, formerly of ClearCost Health, shared this advice: “Healthcare tech has a graveyard of cool companies started by smart people with great intentions. They hit a brick wall if there’s not a nuanced understanding of the incentives of healthcare stakeholders — which can be convoluted because of our complex system. Spending time operating in the space gives you better insight into the (at times, very weird and opaque) incentives that apply to different stakeholders, which is essential to crafting a healthtech business model that can scale.”
We will add another bit of advice:
“At the earliest stage - learn fast and adjust accordingly. Don’t be afraid to prove yourself wrong as quickly as possible, and cultivate a team culture where everyone is ruthlessly truth seeking. Far scarier is the reality that you have no product market fit buffer elsewhere in the business yet - and the market (and your runway) won’t lie to you.” Rebecca Mitchell, EVP at Vive Collective.
Above all, take the plunge!
“Do it,” said Amanda Guisbond, founder of Intersection: Health, previously of Amwell. “It’s never been a better time to be your own boss and chart your own path, especially when you look at the market, layoffs, and impending transformation of AI on job skills and job security. Everyone should adopt a founder’s mindset to succeed in this new world of work.”
Why we back experienced CEOs
Founders who worked at a healthcare startup begin their entrepreneurial journey with significant advantages ranging from a better understanding of a complex problem, to leadership skills, to a network of potential team members and supporters. As investors, one of our favorite parts of the job is leaning in when our own backgrounds in medicine and as operators can help. We spend time with founders helping to think through problems and recruit the right type of team members for the next set of challenges they will face.
It’s why Vive Collective invests in companies led by former digital health operators. Startups are always going to be risky, but these entrepreneurs have the skills and experience that increase the likelihood of success.
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