Karim Galil:
Welcome to the Patientless Podcast. We discuss the Good, the Bad, and the Ugly about Real World Data and AI in clinical research. This is your host, Karim Galil, co-founder and CEO of Mendel AI. I invite key thought leaders across the broad spectrum of believers and defenders of AI to share their experiences with actual AI and Real World Data initiatives.
Karim Galil:
Welcome, everyone, to a new episode of the Patientless Podcast. Today's guest is Mark Goldstein. Mark is the chairman of the UCSF Health Hub. He is also a general partner at Builder's VC. Mark generally invests in early stage healthcare data companies. But before that, he was an entrepreneur. He started a dozen of companies, and that's not a joke. That's for real.
Karim Galil:
The first time I was introduced to Mark, they told me, "Listen, I want to introduce you to a guy. He's one of the very few people, if any, who was hired by Steve Jobs, fired, then he hired him again." That's not something that usually Steve would have done at the time. So Mark started his career at Apple. He was also an early advisor to Salesforce. Then later on, he decided that he wanted to take all the scars, all the things that he learned from starting his companies, and help entrepreneurs like me start data companies.
Karim Galil:
Mark is the kind of a guy that he can call it 3AM in the morning and you say, "Hey, everything is going wrong. What can I do now?" So, Mark, thank you for coming to the show, and I really appreciate it. Thank you.
Mark Goldstein:
Absolutely.
Karim Galil:
So, Mark, why don't we start by you telling us more about the UCSF Health Hub and your role there, one of the very early people who started this entity at UCSF.
Mark Goldstein:
Sure. Well, UCSF is a pretty amazing place. It's, I would say, worldwide, there's more healthcare innovation that starts and/or happens around UCSF than anywhere else in the world. So here we are in Silicon Valley, and we have this amazing resource called UCSF, but we started Health Hub to help companies around UCSF, more closely work with UCSF and help inventors and doctors and clinicians at UCSF, who were trying to basically start companies, get connected with the right types of advisors and mentors and investors, so they can scale and grow their companies.
Mark Goldstein:
So that's the goal. We've got thousands of member companies at this point in time, and we also produce what's called the UCSF Digital Health Awards, which is really becoming the Academy Awards of digital health.
Karim Galil:
You've put together an amazing team actually at UCSF, like professors that people would wish to just have half an hour of consultation with. How did he convince them? How did you convince them to take some time from their academic work and sit down with startups, founders, and advise and walk them through?
Mark Goldstein:
Well, look, these professors and doctors and clinicians, one of the reasons they're at UCSF, one of the reasons they're in San Francisco, is to basically hang out with people that are changing the world and that are ... So here's an opportunity that says, "Here, I'm going to put together a curated list of absolutely some of the best new entrepreneurs thinking through great new healthcare ideas. Would you like to meet them?"
Mark Goldstein:
So pretty much the universal answer that from them is, "Damn straight, I do. That's why I'm here. That's why I'm at UCSF. That's what it's all about." So it's, it's really a win-win for them, too.
Karim Galil:
So two kinds of industries are really hard to invest in. Hardware obviously is one of them, but also healthcare. It's not easy to invest in healthcare. What attracted you to healthcare? You could have invested in so many different kinds of sectors, but you're very focused on healthcare. Your portfolio is amazing. You actually make very early bets on companies that are even pre-revenue very early on, on ideas, which is quite risky investments. It's not for everyone. Why are you in healthcare?
Mark Goldstein:
Well, there are two reasons. One of which is I give my friend, Marc Benioff, some of the credit because he opened up my eyes to healthcare. I spent a few years making all of his private investments, and he got into healthcare very early on, at least early on from us non-healthcare investor types. So he opened up my eyes. But secondly, I realized that healthcare is, in a lot of respects, behind FinTech. So it's behind financial services. It's behind retail and eCommerce, where all the transformation we've seen in the financial technologies and we've seen in retail haven't necessarily happened yet in healthcare. We can get into the reasons. So I just said, "Well, healthcare is what's next." I love it. There's ... some of the best entrepreneurs in the world are focusing on it.
Karim Galil:
So what are the reasons why is healthcare hard? So from all your investments, what are the friction points? Why aren't we seeing the same progress that we're seeing in other industries happening in the healthcare?
Mark Goldstein:
Well, first of all, it's beginning to happen. So if you look at what's happened in the last few years in digital health, the transformation in healthcare is fast and furious, and it is going on. Relative to five years, there's so much innovation now, it's somewhat mind-boggling. The real reason is data. There's data. You can access a million patient records if you needed to. A great entrepreneur can figure that out.
Mark Goldstein:
So all of a sudden there's data, and from data, you can basically start making inferences. So all of the great analytical ideas that we saw Amazon pull off in the early days, and we saw the E*TRADEs and the Charles Schwabs in the world pull off in the early days of financial technology, hospital systems and entrepreneurs and clinics can do the same things today.
Karim Galil:
So is data now in healthcare a vitamin or a painkiller?
Mark Goldstein:
Oh, a vitamin. So I think that when I look at vitamins, to me, vitamins are things you probably want to eat every day, gobble nonstop. I have vitamin C every day. I don't want to take a painkiller every day. So we need ... to me, data is a requirement. When you say vitamin, it's almost like water. So I would even go beyond that. I would say data is just like air and water. Without it, you're nowhere.
Karim Galil:
So you're in the campus at UCSF. At the same time, you're in the heart of The Valley. You're seeing companies being started. Do you see a gap between the innovation that companies are working on and the bedside, like right next to the patient? Do you see that there is a gap? Obviously, San Francisco is not the center of the world. How do you see it here in California at UCSF? How do you see it in the country in general?
Mark Goldstein:
For sure, there's a gap. The older hospital systems, and you could argue that UCSF is a older hospital system, this is separate from a lot of the research that goes on, but they have legacy software. They have legacy systems. They're forced to use Cerner and Epic and the traditional EHR platforms, because that was the only game in town. That's what they had to use a decade ago when they had to start transforming how they worked and worked with their patients, worked with their doctors, and worked with third parties.
Mark Goldstein:
So, yes, there's a problem. The problem is that you have these legacy systems and we're spending so much time reconfiguring legacy systems to take advantage of the new world.
Karim Galil:
So how can founders tackle that? Is it a problem in their pitch? Is it a problem in their offering? Or is it just a problem that the market is not there yet? It's still early on in the adoption curve.
Mark Goldstein:
The market is here now. So, and you could argue five years ago, for example, when you started Mendel, you were earlier. You've got a lot of arrows in your back and you're starting to ... you're pulling those arrows out. Every few months, another arrow comes out. Today, it's easier. One of the reasons it's easier is if you're a founder and you're not a clinician, you're not a trained doctor, you better find one because if you want to basically get involved in healthcare, you better have someone sitting next to you who understands healthcare, who's basically gotten their degree.
Mark Goldstein:
They have bedside manners with patients. They understand what makes healthcare work. So arguably, if you're a technical founder, if you're not sitting next to someone like that, don't bother. Find one. Now, if you are that type of person, say if you are a doctor, make sure you do sit next to someone who is technically as adept with wrangling data as anyone else, anyone could be in the world.
Karim Galil:
One of the pieces of advice that you gave me early on, and I thought it was funny, yet it's a great piece of advice is you said, "If you start a company and you have your company meeting, if you sit around on the table and you're not the dumbest guy in the room, you just didn't put the right team together."
Karim Galil:
So what is the right team? You talked about the technical founder having also someone with a clinical background. What have you seen work? What kind of teams are there, also commercial side of things? What works? What kind of teams should people put together?
Mark Goldstein:
It's like cooking. You're in the kitchen and you have to know that there's certain ingredients that you've got to put into your cake, your steak, whatever it is that you're making at that point in time. Those ingredients better damn be good because the alternative is you could just order a pizza. So better cook up something great. The only way you're going to be able to cook up something great is to have people or to have the knowledge to know what spice is needed at what point in time.
Mark Goldstein:
When do you turn on the stove? When do you take that pie out of the oven? How long do you wait for it to cool down? These are things that you just can't guess. Now you could guess, but it's probably not going to be a great cake or a great pie. So you better have someone around you or you better have the experience to know when it is to put that cake in your mouth.
Karim Galil:
Many of the guests we invite to the podcast come from the clinical side of the equation or from the technical side of the equation. You come from the funding side of the equation here. In most of our conversations, the theme that I see is you're always questioning where is the money? Okay. Great idea. Great technology. But unless you are making money, there is no company here.
Karim Galil:
So what's your take on that? Why aren't we seeing companies making money easily in healthcare when it's three year-plus industry? What have you seen work? What you haven't seen work? Is it a problem with the payers and the pharma because these are the guys who have deeper pockets? Or is the problem in business modeling? I'm interested to know more from you.
Mark Goldstein:
I used a simple sports analogy on this one. Healthcare companies basically have to realize that they are running a marathon, not a sprint. Now, if you're in some other sectors, for instance, if you're you're focusing on social media or you're coming up with a consumer play, or you're doing something that it's about speed to market, it's about quick validation and quick turnaround, you're running a sprint.
Mark Goldstein:
In healthcare, it's a marathon. Why is it a marathon? It's because there are certain things you have to do. There are certain protections, for example, your patients need that are required, and you're going to have to do to validate your solution. So you have to go through this whole validation process. You have to get your first, what we call, logo or first hospital system on board.
Mark Goldstein:
They have to go through a year or so of, "Does this work?" Some cases, there's FDA approval process. So healthcare just takes longer. So A) you have to recognize it's taking longer, but at the same time, if you're not always looking for where is the money, where is it, what is the outcome here, where do I want to end up, you're going to get lost in your technology, and you're going to get lost in your idea. Before you know, it, you could potentially be out of money without having a solution that people are going to want to buy.
Karim Galil:
So healthcare investors are typical investors. They need to see some thresholds of some commercial activity before they're even able to put more money in. So to your example about the marathon, what are those things that people need to focus on at the time? Are we talking about, as you said, big logos, or is it more like smaller hospitals, people who are willing to sit down and give you more time and test your product, or is it doesn't really matter as long as you have some user traction, the company is in a good shape?
Mark Goldstein:
Well, first thing is you better be really clear about the problem you're solving. Is it a problem? Is it a life and death problem? Is it an important problem? We were talking about vitamins and painkillers before. Make sure you don't focus on a vitamin that people don't have to take. If you're not in healthcare, there are lots of options. There are lots of alternatives. If you're not basically saving lives or meaningfully making people's lives better, you're focusing on a wrong problem. So you might want .. you have to rethink. So that's part one. Focus on a problem that matters.
Mark Goldstein:
The second thing I would say is don't lose sight of who the customer is and why they need to buy, and that you need to be top of mind for them because in a given day, in a hospital system, there's so many things going wrong. Think about it. A patient gets wheeled into the ER, and the number of decisions that have to be made for that patient in the first half hour is mind-boggling. It's in the tens of thousands of decisions, and it requires a lot of insight, and make sure that you're building something that's going to be top of mind. If you're like the 999,000th thing that somebody might have to do, you know what? They're going to forget you, and you're probably not going to get renewed.
Karim Galil:
You've mentioned early on that a great entrepreneur can manage his way or hustle getting access to one million patients. This data should allow them to start building different applications on top of it. One of the themes that we try to have here in our podcast is to define the word "data" because very few people know that 90 or 80% of the data here are actually unstructured. It's not even data that is ready to go. It's not analytics-ready data.
Karim Galil:
What's your take on that? What's the state of the union today when it comes to that quality of the data, and the quality of the data that startups are working with?
Mark Goldstein:
Well, it's getting better. Look, one thing that I've learned is there's nothing called perfection. Don't wait for perfection. You've got to work with what you can work with, and you've got to keep on learning and you've got to keep on testing. Test and learn, test and learn, test and learn. Try to find the best data that you can, recognizing that it's not going to be perfect. Start throwing some of it out, adding some of it new. That's going to help you focus on the problem you're trying to solve, because you don't need an ocean of data. What you need is the right lake of data, but typically you don't jump in the right lake to start, where it's probably more typical you jump in an ocean because oceans are everywhere.
Karim Galil:
I attended one of the webinars that you put together for UCSF. It was amazing. It was 500 plus people on the Zoom call. It was like, "Wow, there's a big audience here." The theme was COVID-19 and healthcare data. How can companies and how can data help in COVID-19? What is the latest here? What have you seen startups doing about COVID-19? Any success stories that you can share with us on that?
Mark Goldstein:
Sure. Well, there's tons of it. First of all, our government completely fumbled everything. We're like, "Oh, well, the CDC is going to come up with a test and we're all going to be good." Well, that clearly didn't work. What did work and what is working is just getting the government out of the way and having private enterprise innovate. So the innovation you're seeing in testing and the innovation you're seeing in tracing and the innovation you're seeing in devices and in RPM is pretty, pretty fantastic over the last six months.
Mark Goldstein:
It's imperfect. There are a lot of problems. Nothing is getting to market as efficiently as we'd like, but in a lot of cases, there's hardware build-outs required. So it delays a lot of devices from coming to market. But I just think across the board, we're starting to see the transformation. Look at the death rates. Look at the learning we have. We used to think, "Oh, well, let's just have a million ventilators in every hospital system. That will solve the problem. When someone comes in, just hook them up to a ventilator."
Mark Goldstein:
Clearly, that is not what's working. Those ventilators, for the most part, are just sitting there. There's a lot more triaging and a lot more intel, a lot more things that we are collectively learning that is making this crisis somewhat less of a crisis.
Karim Galil:
I was amazed by the concept of remote testing in cancer. You guys were mentioning that you were working with companies today who can do some remote testing when it comes to oncology. I see that to be very intriguing because historically, a cancer patient has to leave home, has to travel to the hospital and the ability to get care all the way to his home is amazing. So, Mark, how do you see 2025 in healthcare? Even, you see all the cutting edge technologies that are coming out there. How do you see 2025?
Mark Goldstein:
Well, I see it through the lens of the next entrepreneur that I get to work with. I spend well over half of my time when I'm not at UCSF, it's well over half, investing in companies, and the amazing ideas are all coming from the entrepreneurs that are in there. They're in the foxhole. They're figuring it out. They're trying to solve a problem that honestly, I hadn't thought was a problem or most people hadn't thought it was a problem.
Mark Goldstein:
So what do I see in 2025? It's basically a function of the great entrepreneurs that I have the opportunity to invest in. So that's what I do. I try to invest in 10, up to 10 or so, a year. In a nutshell, one thing that isn't going to change is telehealth. We know that the number of doctor visits that people have today when they have a problem and how they have to go through what we're all calling this triage process, is insane. I think there's going to be probably 50%, if not more, less doctor visits.
Mark Goldstein:
These are basically devices, remote devices and telehealth and various other systems are going to make it so much easier for patients to say, "Hmm, something feels wrong" and basically just strap on their phone or make that telehealth call to a robot or a clinician, before just saying, "Oh, my God, I got to go to the ER."
Karim Galil:
I agree. Talking about talking to a robot, I work in AI and I find the kind of friction, the behavioral friction to get a physician or to get someone even at pharma to interact with an AI system. I cannot see a patient, at least for now. I can't see my mother talking to a robot if she has a health problem and trusting whatever interaction is going to happen there. Any takes on that?
Mark Goldstein:
Well, it's the 80/20 rule. 20% of all patient engagements are going to have to be one-on-one. They're going to have to be, we'll call it ... We'll say "in person" for now. The virtual and tele-technologies are going to get better. So I think increasingly, less and less will have to be done in person. But, look, 20% is always going to end up being there. I'm talking about the 80%, the 80% of visits and meetings and discussions that lead to the 20%. That's what we have to automate. We have to strip the costs out of the system.
Mark Goldstein:
So it's really an imperative. It's not like, "Oh, sorry, Mom. Oh, you don't want to do it this way? Well, you don't have to." No, the system is going to say, "Sorry, you have to do it this way. You have to go through a process, so that we know when we're down to that 20%, what the problem is and what doctor that can best serve you."
Mark Goldstein:
That's what goes on in retail and financial services now. It used to be in financial services, you'd have these meetings with these stockbrokers. They scribbled down a few notes of some investments they'd make. They'd go and they start buying individual stocks for you. Then they'd read the newspaper on their train into the city and decide whether or not they buy or sell those stocks. Think how stupid that is today. None of that goes on. Everything has changed.
Mark Goldstein:
Even I think of retail, how that's all changed. I think of how we buy today. You speak to someone who's been living in a cave for 20 years and you talked about these processes and what's changed, and it's phenomenal. It's phenomenally great. But these changes haven't necessarily occurred in healthcare, but they will by 2025.
Karim Galil:
You talked about AI and robots. How, as an investor, or even seeing how the process at UCSF works, how are you able to weed out good tech out of bad tech? Obviously, all the physicians are not trained to understand what is deep learning, what is symbolic AI? We can keep throwing all these terms every day. How are you able to make investments? How are you able to make diligence? How can people, when they are making solutions, really understand the quality of the technology, given that it's not easy? It requires an engineer in many cases to at least understand the terms that are being coined.
Mark Goldstein:
Well, first of all half of the early stage investments I'll make are not going to work. So I have to be very honest with that, is that that I have to recognize that even though I think I have this amazing intuition, a lot of it is luck. So I got to basically think about how do I mitigate my risks. So one of the way I mitigate my risk is I focus on again, the entrepreneur. Is this founder an entrepreneur who's going to be able to pivot and change and modify how he thinks about things or how she thinks about things? If it's someone who's a little more brittle, there's no way they're going to be able to be successful.
Mark Goldstein:
So I would say that that is my tenant number one. That's where I start with all this. I start with the founder who is thinking through the problem and understanding that whatever they're thinking through and whatever solution they have at the onset, isn't going to necessarily work. That's why this initial validation, getting to your question, that's why having the right hospital system and the right customers, as partners, as you go through validating your initial solution, is so critical because some of your assumptions are simply going to be wrong, and you have to have someone who's willing to work with you.
Mark Goldstein:
It's why in healthcare until you have a good logo and a great hospital system that is fundamentally endorsing what you're doing, it's really tough to scale the business and to sell it to other people because everyone looks for that first validation.
Karim Galil:
So my last question is if you can Zoom call any living person today, who would it be and why?
Mark Goldstein:
Oh, surprise question. Well, if I could Zoom any living person today, so I would basically say I would wake up in the morning and ... You know what? It's going to be different because at this point as an investor, I live for my entrepreneurs and I live for my entrepreneurs that are trying to solve incredible problems. I've made a decision to focus on starting a company. I started a bunch of companies. That's not what I'm doing now. I'm actually helping people with their companies. So I have, call it 20 or so, entrepreneurs that are trying to solve really, really important problems.
Mark Goldstein:
So the answer is that given day, when I woke up whatever entrepreneur I have who I'm trying to help, the biggest problem they're having, their biggest life and death problem, I'm going to basically want to speak to that person that they want to speak to.
Karim Galil:
Mark, that's a really, really nice answer. It's true. I know that it's true. A couple of things that happened to Mendel, I can believe. Four months after Mark made his first bet on Mendel, I came in and I said, "Listen, all the tech is not working. The problem is harder than I thought it is. We're going to have to start all from scratch." I was expecting something around the lines of, "Where's my money? Give me my money back."
Karim Galil:
Actually, he didn't. He was like, "It's fine. Let's sit down and just try to see what we can do." Two, three years later, Mendel was able to build tech like amazing piece of technology, but it's not only because we hired the right people, because we also had the right mentors and the right investors around the table. When COVID started, the first call I got was from Mark. It was like, "Hey, rough times ahead. What is your plan?"
Karim Galil:
Before I even start talking, he was like, "Three points. I need a three bullet-pointed plan." So thank you so much for being always there for us, for founders in healthcare. Thank you also for spending time trying to get all the learnings that you have outside healthcare to healthcare, because I'm a trained physician. I would have never been able to think from a commercial perspective, how can I scale a company? How can I build a team, all that kind of stuff. So thank you again. Thanks for making the time for the show today.
Mark Goldstein:
Absolutely. This is always fun. It's always great seeing you and hearing you, so ever forward. All good.
