The Digital Health Mafias
By Rebecca Mitchell, MD and Kathy Ku, MD
This is Part 1 of a series on the “Paypal mafias” of digital health.
As former operators ourselves, we at Vive Collective are big believers in companies founded by digital health operators who helped build and steer a hyper-growth rocketship. These gladiators persevered through the healthcare trough of disillusionment, and can put together a team that has already built together in this tough industry. This series will celebrate and spread the hard-won expertise of these leaders.
Methodology:
Vive Collective used both community sourcing and LinkedIn searches to collect this data. The LinkedIn search function filtered for healthcare and founders, then removed all founders who were previously at high-growth companies but started a company in a non-healthcare industry. This accounted for less than 5% of search results. We checked all community-sourced data against LinkedIn profiles for both accuracy and to ensure we are posting only publicly available information. All data is current as of Oct. 15, 2023.
We have identified 187 founders through this methodology. Please refer here for a snapshot of the raw data.
Recognition of Selection Bias and Other Caveats:
Insights derived from this methodology are directional only and do not reflect a comprehensive list of all digital health companies and their founders’ backgrounds. Given our selection bias, this list will naturally index more toward people who have invested heavily in their public presence, Vive Collective’s own network, and founders who were previously at large high-growth companies.
In addition, founders were attributed to their most recent operator tour of duty - for example, if a Founder was previously at Castlight and then worked at Livongo before starting a company, they were listed under Livongo. This especially impacted Castlight and Athenahealth, which employed many future founders early in their careers! Perhaps they are the OG Mafias.
Finally, we have included founders who worked in high-growth digital healthcare startups and subsequently founded any kind of healthcare company, but more than 90% of those were digital health companies.
Insight 1: Digital health has 4 mafias
Flatiron, Oscar, Babylon, and Cityblock Health were the top mafias having produced 30, 26, 24, and 23 founders respectively. R2 for the trendline comparing company size to the number of founders from that company was 0.349, suggesting a loose relationship between company size and number of future founders. This may be explained by some large companies having a high number of operators in functions that are less likely to start companies, as described in Insight 2. There weren’t any companies that had a surprisingly high number of founders for their small size.
Insight 2: There are clear patterns in functions and experience level
Looking for the next founder to get behind? Buddy up to your colleagues in product and operations. The most common founder by far was a former product individual contributor. Digital health does not appear to follow the trend of general tech in which a software engineer cofounder is always expected. “Technical” in digital health often refers to data science, biological science, or medical expertise.
All experience levels were well-represented, with senior middle management at the SVP/VP/head levels and individual contributors most likely to be founders. Senior middle management had the strongest showing despite fewer (one hopes) employed per company than individual contributors and junior/mid-level managers.
Insight 3: Two years is the sweet spot
Founders spent a median of 2 years in a high-growth company before pursuing their own ventures. There were a few notable outliers, including one person who spent 20! On the opposite end of the spectrum, 11 brave and impatient souls spent less than 1 year.
We will share what we’ve learned from these founders in follow up posts.
Next up: how their experience as an operator both helped and hurt when building and leading a company.