Left to right: Michael Weintraub, Giovanni Colello, Josh Stein, Nina Nashif, and Juan Enriquez.
The TEDMED organizers tried something new this year: they dedicated Thursday morning to some unscripted meetings of the minds about innovation in healthcare. The first discussion (which TEDMED maintained was not a panel) centered on the topic "From Start to Scale to Exit, the Trajectory of Innovation." Juan Enriquez, managing director of Excel Venture Management, moderated a group of entrepreneurs at various stages in the launch process. Nina Nashif, CEO of Healthbox, a startup incubator, and Josh Stein, founder and CEO of AdhereTech, represented early stage companies, while Giovanni Colella, founder of Castlight Health, and Micheal Weintraub, founder and CEO of Humedica, spoke as experienced founders.
The speakers had a lot of opinions on the question of what drives -- and what should drive innovation.
"It's really important for entrepreneurs to understand industry," said Nashif. "In healthcare, the buyer and the user are not always the same individual, so figuring out who you're going to approach is actually really hard."
Several of the speakers stressed the importance of researching the market, identifying the need, and "skating toward the puck" (in Weintraub's words.) Colella emphasized not research and preparation, however, but passion and risk-taking.
"You need that free spirit, free market mentality, and you need a few people who are unemployable, who just want to do something big," he said. "The guys I can guarantee you will succeed are the ones who say 'I don't know what I want to do, but I want to do something big, I want to change the world.' Once you have the right social structure and the unemployable entrepreneur who wants to do something big, make sure they marry with the right investor. When those three things come together, innovation will happen."
Weintraub also said there's a sweet spot where the best startup ideas fall.
"If there's too many people doing it, you're too late," he said. "And if it seems too simple and no one's done it for a decade, it's probably a bad idea."
Enriquez asked Weintraub, whose company was recently acquired by UnitedHealth Group, and Colella, whose old company Relay Health was acquired by McKesson, about the realities of acquisition.
Weintraub advised founders to never build a company to sell it. He said acquisitions work best when a startup does research well ahead of time on any companies that might make an offer, so founders don't feel pressured to make a decision quickly. Weintraub also offered advice for companies looking to make acquisitions. He mentioned two extremes companies should avoid.
"On one extreme, I call it the 'smash and crash,' which is just smash it all in, merge everything in functionally, and hope -- and hope is never a good strategy. It will not work because the DNA, the culture, the ecosystem will evaporate overnight, and that's not what we're doing," he said. "The other extreme is just leave it alone, leave it as a separate business and do nothing, but then why'd you buy it? So how do you thread the needle and truly have a plan that is not casual, about really finding those leverage points and doing them thoughtfully, not too fast, not too slow? There's an art or a science to that."
Collela said that it's a hard choice, whether to try to push through alone or be acquired.
"There's a point in the life of a company when an entrepreneur has to ask the hard question: can we build a company to last, or are we better off as a feature of a bigger product?" he said. But he warned that being acquired does make a difference. "For a big company, any new dollar is marginal revenue. For you, any new dollar is real revenue. So, your life is going to change."
"Just look at it as a financing effort. I mean there's nothing different -- well its different because it's a public market, but that's how you should look at it, its just one more tool to grow your company," he said.
Finally, the speakers were asked about their strategies for risk management. Stein said risk mitigation meant focusing on your minimum viable product. Nashif said it was about starting small and being realistic. Colella said he was a person who took a lot of risks, so risk management for him was "know your limits and pick the right team."
"I think that managing risk is an oximoron for an entrepreneur. We sort of jump in headfirst and think later," said Weintraub. "If something doesn't feel right, move, because big risks start out as small risks."