Have you wondered what it takes to become an entrepreneur in mHealth?
In this new series, “Women in mHealth”, I will take a look at women entrepreneurs leading the way and innovating healthcare through mHealth startups. I hope their stories inspire you. I know they have inspired me!
My first interview is with Rebecca Woodcock, co-founder of Cake Health, recently named one of the “15 Women to Watch in Tech” by Inc. Magazine. Cake Health is a free web and mobile app to manage healthcare expenses.
Rebecca came up with the idea for Cake Health after experiencing inefficiencies with today’s healthcare payment system. Helping a close friend to manage epilepsy and track expenses convinced Rebecca there was a real need for a better way to manage healthcare plans and costs.
The following is an edited version of our interview. For the full interview, please download or listen to the SoundCloud audio below.
Documentation leads to a diagnosis and a new startup
Cake Health grew out of my experience [with my friend.] I was often the only person around to really know what was happening. He never would have known he had a seizure at all. At one point, I just got so fed up, and started tracking in an Excel spreadsheet every single thing that I could remember. I brought that spreadsheet to one of the doctor’s appointments, and suddenly, they recognized the pattern that identified the type of epilepsy he had. They were able to switch up treatment, and make changes, that really made a huge impact on his life.
Starting Cake Health
I had never in my wildest dreams ever thought I would be a starting a company in the healthcare industry. I was very involved in the startup world, and I knew I wanted to be an entrepreneur. I had these ideas, and I was vetting out these other ideas completely separate from healthcare, but here it was something in my own life that became such a struggle and such an obvious need, that at some point it became so obvious that this would be something that should exist. It took over any of these other ideas that I had, and made much more sense to me. It was completely unexpected though.
The inspiration came from being a Mint user and having that online transparency. And I thought, why doesn’t this exist for the healthcare world? There’s a huge opportunity there.
The right moment to quit your job
The real deciding factor for me was finding the right co-founder, and somebody that I really trusted. I had been working on this idea for a while, moonlighting, having a day job. I was prototyping and working with different people, but never felt that confidence to really go full-time.
In meeting my co-founder, Andy, we started prototyping together to test out our working relationship, and it just made sense. It’s one of those things that people always say– when you are an entrepreneur, and finding your co-founder–it’s like this magical mix that you can’t describe. I didn’t have that until I found Andy. That really gave me the trust and the confidence to quit my job.
Looking back, what advice would you give to yourself as a new entrepreneur
I would tell myself: ‘Don’t waste a single second. Just move forward as fast as you can, and go for it!’
Challenges of being an entrepreneur in mHealth
There are challenges and there are opportunities. I think the healthcare industry is in such a changing environment right now that entrepreneurship is welcomed, and often, encouraged even by the large players, incumbents. There are a lot of vague areas, and I think that that scares a lot of entrepreneurs away.
Data doesn’t move very easily through the healthcare system, and that’s one of the reasons for healthcare reform. But that’s definitely a challenge as an entrepreneur. The people that have the data are very protective of it. So an entrepreneur who wants to partner with someone to use that [data]–there’s often a trust issue. But it’s also why the government is encouraging a lot of these developer challenges, and releasing a lot of data, so that developers can have access to it. There are still challenges there, but that’s where the bridge is being built, and that’s where the opportunities are.
Security of data and the cloud
If you work with Amazon Web Services or Salesforce or any number of cloud services, they have much more protection than you would be able to build as an entrepreneur. There are a lot more third party auditors that can make sure you are complying and that you are following regulatory guidelines.
The rollercoaster ride of entrepreneurship
One day, you can feel like you are on top of the world. The next day, it feels like the world is falling apart, and sometimes, it’s both at the very same time!
On those down days, it’s important to reach out to advisors who have been there. They often have words of wisdom and advise that, “These things will pass, and it’s fine.”
There’s a book that gives me a lot of inspiration, called “Over the Edge of the World.” It’s the story of Magellan’s circumnavigation of the globe, the first person to do that. It’s really an entrepreneur’s story. It’s about a man who had a vision and had to go raise money, pitch to investors–kings, and he had to build a team, and lead them on this crazy vision that nobody else would believe in. Just the trials that they went through, and what they had to endure, really reminds me how easy we have it today.
On protecting your idea
Some investors may just be information-gathering for their other investments, so be careful when you pitch.
We compartmentalize certain ideas into things that might be known or obvious, so we can talk a little bit more freely about those with investors.
But there are other ideas that might be the bigger opportunity. We would then tell an investor that we are talking to: “If the conversation gets more serious, we’ll let you see a little bit more of those ideas.”
On pitching to investors
Our approach is to keep all your pitches condensed to as short a period of time as possible because it is very time-consuming. And your business and your product will suffer while you are going through a fundraising process. Treat it like a Band-Aid®. Don’t do it slowly, just do it very quickly and intensely. So you can get back to the product as soon as possible.
Know your audience, and know yourself. Are you looking to flip your company, or are you looking for that homerun–because there are investors for each one. And you will be asked. Either way, it depends on the investor and how they invest. You will be able to find the right investor for your type of company, so it’s okay to go one way or the other. But you can’t be both.
Startup incubator: The Founder Institute
The same person who gave me the inspiration for Cake Health sent me a link to an article announcing that Founder Institute was launching their first session, their first class, and said “You should apply to this.” And I thought, “Okay, I think I will.”
On being a woman in mHealth, healthcare IT and Silicon Valley
I just always come to the table believing that people would see me as an equal. … But there is some bias. We had the J.P. Morgan conference here in San Francisco, which is a huge networking event in healthcare. And anytime you walked into any room, it was probably three women to every 500 men. And it’s even more dramatic than in Silicon Valley.
I have a couple of advisors I really admire. One is a man, and in getting to know him, he was raised by an entrepreneurial mother. So he has a level of understanding, and he sees the playing field as completely equal. On those days that are a rollercoaster ride, I oftentimes go to him.
The other advisor I have is a woman who was the CIO of a very large tech cloud-based tech company. I just admire her. She is also very positive and a very quick problem-solver. She is just great in helping me to frame problems and execute against them.
I was raised by a single dad. I don’t know if women always seek women mentors, but I like having a balance, too.
The qualities every entrepreneur needs
An entrepreneur definitely needs to have optimism. That is going to be key. Oftentimes, you are doing something very new, and you will be facing or doing business with people who are very risk-adverse, pessimistic. There’s a level of optimism that you just have to be relentless about.
The second quality is resourcefulness. Entrepreneurs are solving problems and you have to be resourceful in order to find a solution. That may sound abstract. But because you are doing something new, you have to just figure it out.
Recommended reading: Be relentlessly resourceful. By Paul Graham
On the future of mHealth
There’s a lot happening at the consumer level. This is a huge shift for the healthcare industry, and it’s something that I think, in other industries, we take for granted as being normal. In the tech industry, for example, it started ten years ago with the iPod. Every pitch deck had one slide that said, “It’s all about the consumer.” Before that, it was all top down, let’s build a product and then sell it. So these were completely new conversations then.
Those conversations are now happening in the healthcare industry. We’re seeing healthcare be, what I like to call it, democratized. The decision-making is being placed on the end-user in all these different way–whether it is costs or trying to keep people motivated about their health or even just being more engaged in their diagnosis or the type of services they are getting. All these things are now decisions the end-user is having to make that they’ve never made before. I think it’s a little bit painful for that healthcare consumer that doesn’t know they are the consumer yet.
I think we’ll see a lot more transparency from top to bottom, and many more decision-making tools for the end-user and more options, more choices.
On the future for doctors
It’s all starting with meaningful use. … The next generation of doctors is looking for more technology and streamlined ways; there is a natural shift, a generational shift.
The future of doctors, and I think there has been some resistance at some level, is around evidence-based medicine and the consumer being part of the decision-making process. Some doctors are a bit resistant to those ideas because they want the decision-making control. But evidence-based medicine is much of that feedback loop to look at that data and say what actually does work and what doesn’t.
The consumer has not typically been involved, so there’s a lot of education process around this. But people are already self-diagnosing by Googling or WebMD, and that’s not necessarily the best approach. I think having the consumer involved in the decision with the doctor and having the tools to facilitate that, is something we will see more and more.
On the future for insurers
This is also part of healthcare reform. In a couple of years, exchanges are going to be going live. This is going to be a much more competitive market. Insurance companies are thinking more and more about loyalty and how do they encourage stickiness with their members, so people don’t leave them. Over the next couple years, we’ll see more initiatives at the insurer level to take better care of their members and build more trust.
Another thing that is part of passing the ball to the end-user are consumer-driven health plans. These are plans that have high deductibles now, and costs that five years ago, your employer would have covered. But now, they can’t afford to support 100 percent, so that is why these costs are being passed down to the end-user. This is changing behavior at the end-user level now as they are starting to see these huge out-of-pocket costs. They are looking to see more transparency around costs. Companies realize they need to build tools on their own portals. People are starting to avoid care because of these costs. You don’t want people to avoid care, you want them to make smart decisions.
Transparency and Cake Health
We will show you not only the plan status, if you are on a high deductible plan. The majority of our users have an average of a $2,000 deductible. That’s a lot of money for the average household. Keeping track of that–where they are meeting that deductible, and if they have a lot of bills coming in–our tool helps them stay on top of those bills, identify errors, see if anything has been rejected or if it has been paid, or any action item that they need to have. Once they do reach their deductible, we show them how their plan changes, so what’s covered now that wasn’t covered before.
We’re developing more insights around the information that we have, and hopefully, we can roll out some more useful tools over the next few months.
Cake Health’s vision
We’re at the very first level adding transparency so that people have the tools to make better decisions. Where we are going is: “How can we make those decisions that much easier?” We want to make the data, and the information and the recommendations we have for you so personalized and so relevant your situation, your family, maybe your conditions, so that you don’t even need to think about what you should do, you just know at any given time. Because people don’t have time to really think about this. People don’t want to think about their healthcare, they just want it to work!
Advice for young women looking at mHealth startups
There is a lot of opportunity at all levels. I would first identify what your passion is. Some people find more passion around the consumer and helping individuals. Some people have passions around helping people with diseases and how can they get better. Or the doctor level–how can we empower doctors to waste less time on administrative work and help the patient? There are all these different levels of areas that need improvement, so looking at it and identifying where it is that you feel the strongest pull–that’s a good start.
Then, start getting to know people in the space who are doing interesting things in that area, and get to know the founders. There are women founders that are doing some very interesting things, and there are men as well. Get to know the players. There are great health startup-focused incubators now–Rock Health being one of them, and we are big fans, members, and love what they are doing. There are incubators popping up all over the country that support health startups. So I would just plug in and start networking with those people, get to know what is happening and what those opportunities are.
Do you need to be in Silicon Valley?
I don’t know that that is necessary, especially with the healthcare space. There’s a lot of activity happening in different areas. I would say Silicon Valley is a unique area for an entrepreneur in general though. So, I would recommend being in Silicon Valley if you can.
For meeting investors and other entrepreneurs, you just can’t replicate Silicon Valley. There’s just such a pay it forward attitude here. Everybody’s so willing to help each other out, because we all know how hard it is.
For the full interview, please download or listen to the SoundCloud audio with Rebecca Woodcock.