Venkat Mocherla
Appearances
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so it's almost impossible for a human being to understand the ground truth when the ground is moving, quote unquote, right, on all three areas. Second is like obviously the ability to quickly analytically think through these things and then summarize in simple English what is actually happening so that I can take a new decision.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And the last thing is actually the most important thing, Scott, is
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
at least our customer base which is health systems are large institutions and there's a lot happening and sometimes the the left hand doesn't know what the right hand is doing right and and not because you know they're not really motivated and determined it's just that there's a lot of people and there's a lot of change and so how do you use intelligence to connect the right next step and you can nudge the right person to take the right item you know for me it's like
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
You know, Scott, I don't know if you remember, but like you'd print these like map quest and like triptych, you'd have triptych maps, you know, and like mom and dad would be arguing. It's like, hey, I've always taken this left here and here's the exit. And at some point we just decided, just listen to Google Maps, take left here, take right here. It's not that, you know, you're not any smarter.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
In fact, you have more cognitive capacity to do your job, to focus on the road. That is a transition taking place. And there's a long tail of things in the health system that I believe we can give superpowers for so that people can take better decisions, we can reduce the cost of care, et cetera. So when I think about use cases, Scott, I think about
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
supply chain where there's immense implications on rebates and pricing tiers and and when i think about pharmacy and there's immense implications on 340b and i when i think about managed care there's immense implications on how do you work with pairs every day so there's an endless amount of use cases for for midstream but i can also talk about you know broader things we're seeing in the market not just about midstream it's let me ask you this question this question van kid in terms of both midstream and the market
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah, I think this is like, boy, Scott, I think you've hit something that is, for me, such an exciting thing. I think about like the human genome project where we had to sequence all the genes to understand. We talk about CRISPR today and gene therapies and all that. But somebody had to sequence these genes through it. There's an equivalent to the business genome, which is.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
and company creation um so i started my career scott you know believe it or not 15 years ago we're talking about value-based care primary care transformation so i was at davida and a handful of us actually were hand-picked to figure out the future of the business beyond ckd and dialysis and so i got to work with a group of people
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think machines can now go through, to your point, not just structured data that's neatly parsed through from an EMR or an ERP, but these unstructured data. Sometimes people have PDFs that literally sometimes people print contracts on their desks, Scott. So how are you supposed to refer to Amendment 27 when it's sitting on someone's desk? Or maybe it's in a CLM system.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so machines now can actually go through and sequence these unstructured data sets. Maybe it's on the internet, Scott. Maybe it's an update that the government just had. And to able to read that, provide context, and then auto-generate a nudge so that somebody can take that decision point, you're avoiding like tens of meetings. Like I sometimes joke about,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
debt by dashboard and debt by meetings. It's because, and by the way, not to mention the millions of dollars people spend on consulting every year, all of that, to your point, Scott, the unstructured data set that now sits within these health systems. I sometimes believe that 70, 80% of the knowledge of these enterprises is actually sitting in unstructured data and not in structured data.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And that I think is a total game changer. So it's a great, great point.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah, I think it's important to understand in all of this, the context of things and where are we sitting today? So if you and I were chatting, I came to the Bay Area in 1999 at the peak of the dot-com era. And the hottest startup at the time was a company called Webvan, right? So if you think about where we are today,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
is we're really in the early 90s era of thinking about everything was a dot-com company and I kind of equate it to sort of AI. The fundamental, if you ask yourself, have we been transformed because of the internet? The answer is absolutely yes. Now, I think what you're trying to get to is where does the value sit over time?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And I think just because Webvan didn't work out, Instacart did, and there's business model changes, there's technology changes, there's cost structure changes that have happened over time for Instacart to be a success and for Webvan to be not a success.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so when I think about, for example, I think you asked about DeepSeek and et cetera, there's been a race, Scott, on the sort of funding of these frontier models for LLMs. And so you've seen OpenAI, Anthropic, and the open source side, there's been a company out of France. There's billions of dollars that have gone into this space. And the reason why DeepSeek is so top of mind right now
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
many of whom I'm still in touch with, started a company called Palladina Health, which is now called Everside and now part of Marathon, I believe, which was the early innings of direct primary care and primary care transformation. And that was for me a blast because I was technically part of a 75,000 employee company.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Obviously, there's a sort of geopolitical arms race that's happening. Some have equated that this is the race towards the atom bomb, right? So there's a geopolitical race of who will develop the most in AI. I genuinely believe in American dynamism, as a lot of people have said, and I think there's been a phenomenal amount of development done here.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The reason why DeepSeek is so top of mind for people is twofold. One is Again, the news is just coming out, and I think everyone should do their own research. But the cost structure, because of the sanctions on NVIDIA, the limitations that it put on, the cost structure is fundamentally quite different than what OpenAI or others can provide.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So there's a phenomenal difference in what cost of compute and the cost of accessing these frontier models. The second piece of this um, you know, obviously is there's a, there's now a sense because you can, you can, if you go to the app store, deep seek is the number one app, um, now over open AI. And there's an open question of how much data are we sending?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
What's the sort of implications of that? There's actually, there's a lot more implications on supervised learning. There's a lot of implications on, you know, what does deep seek mean for the entire ecosystem for startups? But I sort of go back, Scott, again, my one advice for healthcare startups is, Focus on the last mile.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So if you think about compute data algorithms and sort of what is the application layer on the last side, if compute becomes cheaper for everyone, that's great for startups like Midstream and others. Because if you can think about the workflow, the challenges for the front end user, and deliver on a killer app for that person to make that person's life easier, it doesn't change one thing.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so if you're a venture investor in one of these frontier models, I think there's a lot of implications you're asking, you're talking to yourself. But if you're fundamentally an AI startup in healthcare, this is net effect is there's an arms race happening and you need to focus on the last mile problem.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
You know, $6 billion, Fortune 500, but really we're just three or four of us trying to figure out a new company. And for me, as somebody, I grew up in India and I grew up in Silicon Valley, that bug of starting something from scratch kind of got onto me in 2010.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And by the way, you have to do it in a secure way with the right governance, with the right privacy. And so if you are using a model from DeepSeek, there's implications for that. But at the end of the day, it's as simple as that, Scott. Are you delivering value to the end user? So to me, my mantra has always been think about the last mile.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah. Yeah. I mean, I can completely empathize with that. And I think, you know, finding finding the right partner is half the battle in building a company in health care. So I think there's a couple of things, Scott. I think first is understanding there's a there's a sort of there's a famous book that's now been written for a long time called Crossing the Chasm.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And I think in written by the guy named Jeffrey Moore, I believe. But the thing about the crossing the chasm is think about your customers as a sort of like there's tiered of there's early adopters to sort of the late, you know, majority. Right. So Back in the day, there's a person who always lined up for getting the first iPhone to the person who's still using a flip phone.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I also, because, you know, I'm a big believer in not just thinking about American healthcare, but also around the world, I actually got to go work In the Middle East, I got to work in Europe. I got to work in Canada for a research and consulting firm called the Advisory Board.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And I think far too often, entrepreneurs focus on selling. They treat everybody like it's one sort of homogenous customer set. So I think... understanding and doing some research on who are the early adopters of technology and who like to be on the bleeding edge.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
You know, systems, you know, in the health system world, you know, there's systems like common spirit that like to be on the bleeding and trying to think about new things. And in some cases, or New York Presbyterian, like in another, right?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So I think actually doing some homework on not just the systems, but who are the people inside these systems that have successfully brought in AI companies, navigated it through and have a perspective on what does it take to help you do that? So I think first step for any entrepreneur is do your homework and finding the right early adopters of technology. The second piece I would say
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
is trying to actually get to the core P&L owner because, you know, so often I think you might just have an idea, but the operator at the end of the day or the clinician or whoever your end user is can quickly tell you if it's worth their time or not.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so you might spend all of this energy in navigating this organization, et cetera, but at the end of the day, that core user, if they're like, this is not worth my time, then all of it is a waste. So again, somebody told me early in my career, yeses are obviously great, but the quick no after that is your gift. What kills these companies is a maybe. Right.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So so so I think actually getting to that. And the last thing I'll sort of say is, gosh, you need you need a village to to like partner and collaborate with these health systems and payers and life sciences companies. And so, you know, I find the entrepreneur community, the investor community, other health systems, they're incredibly collaborative. And so ask, reach out for help.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And people like me or others who have been in this industry for a long time can kind of give you a little bit of sort of rules of the road. And so those are some thoughts, Scott. And then I will say, because there's so many AI companies, if you're an executive, I feel for them. Every day, their inbox is flooded with 100 new ideas.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think there's actually a lot of thought that these systems are doing in What are they open for and what are they closed for? And I think that, I think also will accelerate a lot of this.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And then about 10 years ago, Scott became convinced that machine learning and AI applications in healthcare are going to play a big role. Fortunate enough to spend... to get to know three wonderful entrepreneurs out of Silicon Valley, a company that's now called Qventus.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I have not. I mean, most of my career has been focused on care delivery and not as much in the life sciences. But all I could say is, you know, Marty McCary, the new FDA commissioner, you know, is very thoughtful and open around new technologies and innovators and entrepreneurs. So I actually think, for what it's worth, that at least from this particular angle set,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
There's a ton of intentionality and thought and openness from what I've heard and seen from the outside in. There are others, for example, my friend Suchi Saria has been focused on, there's a group of advisors in thinking about AI implications for the FDA, others that have been successful there. So I would not comment for more than that.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And that was, Scott, if you remember 10 years ago, we're talking about AI now, left, right, and center, but 10 years ago, people were just talking about SaaS and healthcare.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah, I mean, this is an incredibly important pillar of, I think, being successful for us at Midstream. We take it incredibly seriously. I just think that this is sort of a binary thing. I think either you take security, privacy, seriously, or you just don't belong in the business.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so I think, look, I think maybe 10 years ago, five years ago, you know, you could come to a health system and, you know, talk to them about all sorts of solutions and not take this seriously. They are so much more sophisticated now in their governance and their privacy and how they think about cybersecurity, because this is one of those events that, you know,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
will fundamentally change the way that they're perceived in the market. And so I think Scott, making security and governance a core part of this, one of the first key employees, teammates we got to hire is somebody who is a security expert from GitHub. And I think it's a very important part of this. The other thing I will just sort of say is that
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think we are fooling ourselves if we don't understand the data governance and data security processes as part of the broader sales cycle for entrepreneurs. And so I think actually what I suggest and advise entrepreneurs is getting ahead of this. Even when you've had, for example, your first meeting to share your idea, actually proactively welcoming
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And that was an amazing thing to go see something not at a Fortune 500 scale, but, you know, see a couple of people and a couple of desks in a coworking space with an idea really that got started at El Camino Hospital in Mountain View to see how it scales. How does an idea like AI in at that point in time applying it for length of stay in clinical operations, how do you take it to many hospitals?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
conversations with their security and governance teams and saying, we actually prescriptively have a viewpoint on this. You know, we want to answer as many questions as possible. You know, they have a standard security questionnaire, et cetera, kind of getting ahead of it versus, you know, sort of what tends to happen is people when they think last minute,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
There's no last minute anymore inside of health systems. This is front and center. And this will kill not just, you know, will stall your deal. This will kill your deal if they don't perceive you as as somebody who's extremely competent in this. And so I and this is one where, frankly, the incumbents have tremendous advantages because
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
you know, people trust, you know, the IT teams trust Epic, they trust Workday, they trust Oracle. And so this is one where companies like ours have to go even harder to talk about some of the advantages we have over legacy technology companies.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah. I, you know, the thing, the advice I always give entrepreneurs, including I give this to myself and others I've been fortunate, either I've been invested in or mentored, which is the equation first you have to think through on this is first is the market and the customers. Second is the team. And third is the capital. And so, you know, when you think about
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Does the customer fundamentally want what you're selling and what you're making? Do you have that proof point? And do you have the best team you could find? Everyone doesn't have access to the same people, but whatever team that you could go build for solving this particular customer set, if those two are a slam dunk, Scott, every investor in the world would want to invest in you.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so that's just a... like a sort of a high level advice I always have, because so often entrepreneurs are so excited, which makes sense to get that term sheet. They want the term sheet from, you know, the top tier investor, Andreessen, whatever it is. And they go for that versus what is the substance of what you're making, who you're selling to and who's your team?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Just if you focus on that support, the thing about incubators, accelerators, et cetera. And by the way, I think Y Combinator is world class at what they do. I think it's just not for everyone. That's the one caveat, which is that I think in healthcare, it takes a village, I think like I was saying, to be successful.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And if you're gonna go build a software for health systems, well, having the right angel investors on your cap table might be more helpful than having, who have successfully navigated health systems might be more helpful than having an incubator or an accelerator. The other thing you have to be really thinking about is like the equity exchange you're having.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think Y Combinator is quite fair in what they do. I think it's 7%. But I've seen some really high equity asks. So being thoughtful of that. I do think Y Combinator has done a good job of becoming a phenomenal brand for investors to come to. But it's no guarantee that just because you went to one of these programs, you're going to get downstream financing. And so my...
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And we did that. I was there through the series B, like you said, got to got to lead a bunch of the sort of business building efforts.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Again, I go back to some fundamentals that are simple. Are you focused on making the right thing for the right customer set? And then do you have the right team? And then obviously, look, I'm not going to discount how hard it is to network. If you're not in Silicon Valley, if you're not in New York, if you're not in one of these core markets, these are relationships. You've got to build them.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
You've got to network.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The one thing I'll sort of say, Scott, is that I think that entrepreneurs also have to understand that funds and investors come in all sizes. So if you talk to a multi-billion dollar fund, they want to make sure that if they underwrite your investment, that you're a multi-billion dollar outcome.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
and work with that amazing team and then join Andreessen Horowitz where I was fortunate enough to work with I think some of the best minds in investing and operating and had a real passion for how do you develop a platform that can help and scale the best ideas, the best entrepreneurs to change and transform healthcare. So I was there for about five years
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So if you're a billion dollar fund and they're going to invest in you and they own whatever, a fifth of your business, you better be a $5 billion outcome as, as sort of whatever IPO exit, et cetera, versus going to a $300 million fund or a $50 million fund.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So I think educating yourself in that all sorts of investors come in all shapes and sizes and knowing which one is the right fit for you is also, also goes a long way. Sorry, I didn't mean to mean to cut you off, but it's sometimes people.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah, I mean, I think I'm really conflicted on this. On one side, I think absolutely you need to build a ethical business where you're very clear and transparent with your customer of what do you need the data for? How are you going to train the data?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And, you know, and where is the data going to go and what are all the safeguards behind that data set so that that the customer ultimately knows that you're not packaging that data and selling it to, you know, let's just say that if you're getting data from health systems and you're selling it to, you know, the life sciences companies, you're very clear about that business model and you're very clear about the process and the infrastructure you have to enable that in a very safe way.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And then left that to start a company, like you said, called Midstream, which is all about how do you advance financial sustainability in health care using AI? So that that's sort of my my my career trajectory. It's been it's been really fortunate to work with some amazing people. And I've tried many different purchase, if you will.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So I think there's no ifs and buts on transparency and ethics around that at the same time scott i think i've seen multiple occasions where when the rules of the road have been defined before the as the as the space is sort of infant uh in its nature it's it's you know right now i think AI is still in the neonatal unit infancy.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think we're in the early era of a multi-decade transformation that is fundamentally gonna be as revolutionary as driving with my mom and dad in the Mazda MPV using MapQuest or Triptych. to sitting in, you know, just yesterday they were in a Waymo car in San Francisco.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think that transformation is going to happen where autonomy in health care is possible and it's going to be incredibly revolutionary. But I just think we're in such early innings that I think in the name of I think what I've observed is
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The fastest way that big companies can crush little companies is they use safety as a cloaking mechanism, because they've got the policy teams, the K Street people in D.C. to be able to sort of say, hey, we could do this because we have an army of lawyers and we've got all the quote unquote experts. And so I think I'm sort of speaking of two sides of my...
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think it's like, you know, one, absolutely be incredibly transparent, invest in security, invest in safety. And I think, by the way, increasingly places like the Mayo Clinic and others are establishing frameworks where they can sort of understand the outcomes and efficacy of your algorithms, of your software in AI. So there's sort of gold standards of what's getting stamped.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And by the way, investors do a ton of diligence themselves. At the same time, when we're talking about sort of legislation and policy from DC, I also am sort of mindful of that as well. So there's sort of two sides of the coin.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I mean, my advice to founders is, Scott, I think this is like, boy, this is like one of the most exciting times to be in healthcare. I think, again, I've sort of, I have this,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
This moment where, again, as I saw my parents in a Waymo car yesterday together going off and experiencing the ride, this is like an amazing time to give superpowers to clinicians, to the administrative teams, to patients, and change the experience of how you navigate healthcare, how you administrate it, and how you deliver healthcare.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So I think this is the most optimistic, bullish time I've ever been in my 15-year career doing this. And the advice I always have is this. Focus on customers. I think I've said this before. Focus on your team and then think about capital. Do not invert that trend. Don't think about investment first, then your team, and then customers. So that's one. Focus on the last mile. I think that's another.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The last thing I'll say is it genuinely takes a village. The only reason that Midstream has gotten off the ground with I think a world class team, a world class set of investors, world class set of partners is I've been able to build this village because so many people have generous been generous to me and our team and my co-founder.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so do not you know, people are so generous in terms of people like you, Scott, and others in my career, you know, have been so generous with their time and mentorship. And so you, you often, I think people just, they say, I think you might've told me this, Scott is like, you ask for money, you get advice and you ask for advice, you get money, you know?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so, so you sort of, I think when you reach out to somebody genuinely out of like, Hey, I'm trying to navigate this, you've, you've been in this space for 15, 20 years, whatever it is, can you help me, you know, navigate it versus just asking for dollars or asking for, you know, business from a customer, that's a very different approach.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The last thing I'll sort of say for, you know, I think, you know, investors in this space, I think my advice to investors who are outside of health care coming into health care is that there's just never been a better, better time in this space that this is a four and a half trillion dollar problem set in the US. But globally, I think the issues are actually, you know,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
quite similar in some senses and obviously different. And so I think that there's never been a better time for investors to come in. The only thing I'll sort of tell them is that, you know, from the outside in looking in in American health care, a lot of things might make sense on paper. So, you know, revenue cycle in AI seems like such an obvious fit. But there's so many nuances.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So for people, again, coming into this space for the first time, get into the details of those nuances because payment flows, regulatory policy, all the stakeholders that are involved in making a decision set are radically going to influence an ability for a business to come in and scale at the speed at which venture capital wants it to scale.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
For people who've been inside the space forever in healthcare, who do not need a PhD paper on RevCycle, because they've been through 10 RevCycle companies, I think I've been amazed at the set of talent coming in from the outside in.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
It used to be, Scott, I think you and I have been, we've seen a lot of these entrepreneurs that frankly not are as humble, not as sort of growth-oriented in learning, but this new generation of entrepreneurs, Scott, been very impressed. They are headfirst. They want to learn. They're so eager, so curious.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
They're willing to get on a plane, go see a customer, spend a week in the middle of a state learning the nuances of supply chain or pharmacy or managed care or some of these areas that we mentioned. So I've just been so blown away, frankly, by this new generation of people coming in that I think just because somebody's never not been in healthcare for 10 years, don't discount them automatically.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think, look, I've been now. I've been fortunate enough to be part of startups in the last 15 years of all shapes and sizes. And I think about whether it's angel investing, starting my own company or, or helping an entrepreneur. And I've been fortunate enough to do that over and over again, which is that I think I think a lot, of course you start with a thesis and you know, your thesis,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So that's sort of my sort of high level takeaways.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Thank you, Scott. Really appreciate it. And please feel free to reach out to me. And I want to thank you again to all of you for dialing in and to Scott to making this happen.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
You know, I've got one in sort of thinking about autonomy in health care, and I'm happy to get to that. But, you know, it doesn't take a genius to understand the challenge in health care. We have a massive workforce shortage. You know, we will be a couple hundred thousand physicians and six million nurses short by 2034.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
If you ask any of your friends who are leading health systems, finding, you know, whether it's a phlebotomist or a back office function person is increasingly challenging. Second, we are way too expensive in this country. And, you know, how do we allow as the top economy in the world for a cancer patient to be five times more likely to be bankrupt as an average citizen?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
You know, how are you spending more money than the Italian GDP, you know, in American health care? I mean, like Ferrari's pasta, the whole thing. And American health care outstrips all of that. Obviously, a big burden of that is the administrative function we built on the system. How are outcomes, frankly, not acceptable? How are we 55th in maternal outcomes in this country?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And then I don't have to talk about access and experience, ask anybody the number of people who probably ping you and me to say, hey, do you know someone? And then when unfortunately, when we ourselves have been through the system or a loved one, we don't have to talk about the experience. And so it doesn't take a genius got to sort of understand the problem set.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The question, I think it takes a special kind of entrepreneur, which is beyond the thesis. And I'm happy to talk about autonomy and health care. is the team. And I think in the early stage side, that's what we think a lot about, whether you're an angel investor or a seed stage investor.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
It is that more than the product market fit, that founder market fit of a special kind of person who's willing to understand the payment flows, understand all the sort of regulatory policy stakeholders. Is it a payer, provider, life sciences? government sort of stakeholder play. If you're in pharmacy, there's so many stakeholders involved, like the PBM or any other middleman.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And then, you know, the timing of these things, the average sales cycle, which to me is just a way of how often does it take to take an idea and really start to play around with it? you know, you can say that it's a sales cycle, but that's 18 to 24 months. So by the way, you raise money for 18 to 24 months. So by the time you can get an idea to see it in place, you're running out of money.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so it's a special kind of entrepreneur, Scott. And so when I think about, you know, my co-founder at Midstream, you know, Samit Kadakia, yes, he's built and scaled infrastructure, you know, a healthcare infrastructure company and a pharmacy from zero to 2,500 people. And he's been an entrepreneur, but
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The reason he can go the distance is because his dad, he grew up in West Virginia, Scott, and, you know, as a rural physician, the four hospitals his dad's worked in before this have shut down. And so he's mission oriented to go the distance. When I think about, you know, someone you and I know, Mehul Mehta, who started a company called Fairy Health. Yeah, he's brilliant.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
He's identified this amazing space on how do you apply AI for navigation. But his dad had an acute event and he and his brother got activated around, hey, this is not acceptable. We're really smart people. We've got means. And yet it's so hard to navigate this very complex health system. Or Vikas, in my mind, who...
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
worked at Glassdoor and is now trying to figure out how to navigate for physicians. And so there's this, there's a sort of, I think founder market fit. So we spend a lot about team and then timing. I think that things got, you know, Mark Andreessen famously said is that, you know, you gotta just admit that all ideas actually work out. The question is when.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
you know, and that timing is, that's the last thing I'll sort of say is the timing.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah, yeah. Look, I think it's a phenomenal point because I think if you and I talk to CEOs and CIOs all day long and the thing they're constantly thinking about is they've got a couple hundred, maybe if not a thousand vendors to think about. And if you're coming to them with saying, hey, I'm going to solve this little tiny problem for them.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The question that, by the way, crushes my soul to ask is like, is this on Epic's roadmap, which is basically like that pit in the stomach of this idea might not make it to a meeting. But I think, Scott, I'd say two things. One is that, look, you might be worried about point solution.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And if you're an investor, you're thinking about how does a great entrepreneur come up with a second and a third act? But let me be very clear. You have to nail the first act.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
So I think that if the pain is so high that whatever I have, Epic, Microsoft, Oracle, whatever the platform that I have that's trying to solve everything, if the pain is still too high, I'm willing to sort of think about the second path. And so I think that you're right in the long term. No one point solution can make it. And you need a comprehensive map, I think.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
But I think far too often entrepreneurs at least talk about platforms before they become one. And so you really want to think about the first act. That's great. I think over time, Scott, you're absolutely right. I think the question is, how do you build a space that is unique enough that where other people can exhibit?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think in my experience in the last 10 years of working on AI companies, you know, from the days of Juventus to now Midstream, I think the core differentiation you have is not always in the technology, which increasingly can get commoditized. It is more in the last mile. It's like, how do you understand change management? Can you change someone's behavior? Do you understand the workflow?
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And I think what's really exciting now, Scott, in the way we're building technology is it used to be back in 2015 or 14 when we were selling these things. when I was selling SaaS applications, I would come to you, Scott, and say, I have a throughput widget. And you as the chief medical officer would go back and you would evaluate that against Epic.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Somebody on your IT team will say, well, I can build this thing myself. And then me as the entrepreneur, you compare contrast on build by partner. I think what's fascinating today, Scott, is we're just selling intelligence. And so it's really a race towards use cases. It's the race towards workflow because these agents, if you will, can take on many different things.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
And so I think that the way we're thinking about the point solutions versus the platform will also change, in my opinion. But but it's a really important question. But I think it really depends on the investor versus the entrepreneur, and it depends on temporary versus the long term. So those are those are just some things to think about.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah, I mean, for us, I mean, Scott, this is probably, I've now been part of... three sort of platform shifts. One is to mobile. When the iPhone came out in 07, two is the cloud, and three is AI. This is by far the most exciting time to be building, at least in the 15 years that I've been at the intersection of healthcare and technology.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The thing that I sort of think about a lot about, Scott, and where we we get excited midstream in terms of how do you think applying AI is threefold. First is I think that giving people superpowers in not just sort of clinical applications, not just sort of operational use cases, but financial use cases in the back office.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Yeah, happy to, Scott. So great to do this with you, and I'm genuinely excited for this conversation. I've been quite lucky in my career. I've been in healthcare now for nearly 15 years, and my fortune is I've been at the intersection of technology, healthcare delivery,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
I think it's always been true that people are willing to experiment more with the back office. But the health system business has never been more complicated. The financial implications in the pharmacy with 340B or with supply chain where you've got a 800 page contract and you're negotiating with Fortune 50 companies on complex rebates and pricing tiers.
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
Or in managed care, when every day, you know, you've got payers who are thinking through different levers of, you know, let's say increasing of denials rates with all sorts of interesting new techniques. All of that, I think, is well poised for AI. And so for us, when we think about what can AI do, I think about a couple of things. First is
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
It's really important to know the ground truth in taking a decision. So the ground truth, Scott, might be in a PDF. It might be in a contract before you'd have an army of analysts or an army of consultants come and read that thing for you. You know,
Becker Private Equity & Business Podcast
Fireside Chat with Venkat Mocherla on Early Stage Investing and AI 1-30-15
The ground truth might be in some system of record, but by the way, there's five different systems of record and, you know, the health systems have consolidated. So where does that sit? Or the ground truth might be in a new update, right? Something might have changed from a payer or from CMS or from J&J.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Yeah, I mean, look, I think, again, you know, it's sort of, if you think about the large buckets of work There is the back office work, the operational and financial implications of that. There's the clinical operations piece, and then there's the clinical piece. I think that in all three of these areas, there's massive amounts of innovation and excitement.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I do think that the back office tends to get more involved. um traction early on for companies because frankly it's just less risky that you're willing to and it's sort of a no-brainer nobody wants to do more add more administrative cost to the system. I think if anything, they want to make it more efficient and sort of reduce the cost ultimately to the patient.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And so I think you're seeing, again, a resurgence in areas like revenue cycle. You're seeing call center optimization happening. You're seeing companies like Midstream think about
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
the financial um decisioning and how we can sort of uh you know help save frankly dollars to the health system and ultimately make the system a lot lower in cost now i do think like you know i mentioned in the clinical area and clinical operations um whether it's aspects like um you know throughput and length of stay management whether it's
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
You know, your scribing technology, there's just been a vast array of applications, but there is a different pathway. And this is now we're talking about the hospital area, but obviously there's payers, there's life sciences are applying AI for drug discovery, likes of In-Citro, etc., There's, Matt, the intersection of technologies like AI with CRISPR.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And so there's a bunch of applications even outside of the hospital ecosystem that I'm most familiar with that is equally and incredibly exciting.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And I got to be fortunate enough to be part of a team that was, you know, revolutionizing primary care using these direct primary care models and a company called Palladina at the time. It's now part of Marathon Health. Um, I got to, you know, work on some new value-based care models there.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Yeah, I think, you know, the hardest kind of knock on healthcare is, you know, when you think about how risk averse the market is, and we think about And for the right reasons, right, for obvious reasons, the sale cycles tend to be really long, right? The average sale cycle for a health system is probably around 18 to 24 months.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
What's happened now, Scott, is I think there's a bunch of entrepreneurs not only going after health systems because I think people are curious and genuinely they want to, you know, solve some of these problems, but there's also a tremendous amount of interest now in the SMB and mid-market. So how do you help your three-practice physician, you know, three-doc practice, excuse me,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
um you know because they don't have the kind of frankly thought structure to dictate having a receptionist and having a very advanced revenue cycle suite etc but now you can actually use ai to help you you know create a you know sort of like you know this is this is the era if you know some have said that they are abundant which i tend to agree with that which is how do you give these magical superpowers and and um people behind the scenes
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
to go operate, whether your cost structure before, you had to be a giant health system to go do that. So that's the one area which is like just new markets opening up, which is quite an interesting and exciting trend.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
The second piece is, look, for obvious reasons, there's an entire disconnect that happens between all these stakeholders, between the patient and the provider, between the provider and the payer, between the payer and life sciences. And I think what we're seeing now are people who are
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
not just competing with some of these businesses as full-stack providers, et cetera, but actually connecting with them, right? So you're seeing how do you, for example, use data to connect the dots between a really expensive drug that maybe cost a million or $2 million to administer that, to authorize it, et cetera. You're helping the med device industry with hospitals.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And then, um, I worked globally, uh, in the middle East and Europe and Canada, um, for a consulting research and technology company called the advisory board, which many of your listeners might know of. And then about 10 years ago, got obsessed with the intersection of AI and healthcare delivery. Um, I got to see a company go launch off the ground and a company called Juventus, um,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
These contracts tend to be really complicated. And how do you sort of partner with that? Same thing if you have risk attached to it. So I think that's another very interesting trend where people are finally dissolving some of these silos. And the third piece, I think, that is very interesting to me is, is on, um, the, um, consumer piece itself. Like, so how do you sort of accelerate this?
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And the other part of this that is so exciting to me is obviously we're talking about this from a us context, but. I think global context is also quite interesting where, you know, markets like India and others where you might have, you know, 70% of self-pay.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
So you might have somebody, you know, with a very different regulatory regime, but willing to experiment, you know, using WhatsApp as an interface for an AI application or in markets like the UK and Canada, which have really tough times with access coming up with, you know, uh, new technologies there.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And so I do think this is like an era where if you're an entrepreneur, you should not just be thinking about the U S you can actually think about global markets, which is just a, it's just a fascinating time. So those are some of the, the, some of the trends that we're seeing.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And I think the final point I'll make on this is that I think forever, we were restricted by the percentage of spend on the it budget is a technology spend. Okay. So I've got a solution for you on, um,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
you know, whatever, XYZ topic, and you're going to compare that against, well, maybe I have, you know, the famous thing is it's on Epic's roadmap, or maybe it's, you know, I have a tool that I already have already partnered with a giant company like Microsoft, and I don't want to pay for extra things. But nowadays, Scott, what's so interesting and exciting is,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
is that you're truly competing with like, you know, gosh, I don't have headcount for this, but instead I could use an AI application for that. So I think what's really interesting is thinking about, you know, 70% of the health system cost, for example, is on labor. And how do you think about augmenting my staff?
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
How do you think about automating areas where I don't even have headcount for because I'm doing a, you know, I'm in a financially... Gruden era, and I don't have the ability to go hire a thousand more people. That is very, very new. Instead of hiring a million more people in XYZ categories, I can actually augment my current staff with software.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And I think to me, fundamentally, I think what's exciting is Not just like obviously the financial implications and budgets and all that, but honestly, like we can flip what I look at as a very burnt out, both administrative and clinical workforce to being a much more energized folks as we're getting older, by the way, and as health care costs are rocketing, skyrocketing.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And so it's come at the right time.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Yeah, I think, first of all, I'll say that people in healthcare, leaders, I would say, in healthcare, such as yourself and others,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
are extraordinarily generous with their time so i actually think seek mentorship it's much easier than what people think um and you know if you do it the right way we all get into healthcare to make the lives of our loved ones better we want to make this a higher quality lower cost system and if you are in healthcare most people have gotten into it because they they really get into it because they they care about making life better for themselves their loved ones and their friends and so
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
which is still and now is one of the leaders in applying AI for clinical operations. And 10 years ago, boy, you know, it's so interesting. Some of these trends take a while to catch up. And 10 years ago, nobody was really applying AI for some of these solutions. And now there's a whole host of entrepreneurs and interest and excitement in that area.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think that people are extraordinarily generous with their time and perspective. And this is one place where it's like Don Quixote with tilting at the windmill. You do not want to reinvent the wheel in a lot of places. There are some places that are spectacular for thinking about first principles, but there are some places where you do not want to reinvent the wheel.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
So first thing is just seek mentors who've like been in that space, who've navigated it and can at least tell you the trials and tribulations of what they faced. The second thing, I think, Scott, is just having a dose of reality. I think, look, we're in an incredibly interesting time.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I've painted this very optimistic, rosy picture of abundance, not scarcity, and actually being able to do multiple new acts without requiring to raise a billion dollars. Now, I think so often, especially in my part of the world in Silicon Valley, you think about fundraising. first. And I think that is oftentimes not the right move.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think what you should do first is really think about the customer. Maybe it's the patient, maybe it's the hospital, maybe it's the payer, maybe it's the government, whoever it is.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think you have to really do your homework in, you know, I think my old firm used to call this the idea maze, but, you know, really do your homework and get to customers and try to talk to people even before you start something just to see if this is even worth my time. I think oftentimes I see a lot of people who've
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
you know, gone through that entire journey and now are like trying to figure out, you know, what is the actual customer issue? And I think that is problematic.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
So before you tell the whole world that you, you know, you raised all this money and, you know, from these firms, do your homework and those, you know, angel investors or advisors or whoever that can navigate you to that right group of customers are worth their weight in gold. So that's another point. Second is obviously after you're customer problem and market, you should think about your team.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think so often I see people just racing away with their co-founders. And I think, you know, the thing I heard is, man, you can get a divorce, but like getting somebody off your cap table is, is tricky. And so, Just know that not all relationships work from a founding a company and that's okay.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
This is really a chemistry thing, but try to test it out in the early days to see what works and what doesn't for you and try to figure out your complimentary superpowers. I think that spend a lot of time thinking about the initial team that you want to go build with because successful companies do not happen overnight. they happen overnight after 10 years of work.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And so really in the early days of the company, you know, the first few years really try to think through that piece, especially your co-founder relationship. And then obviously, you know, identifying the right capital partner. I think there's, there's so many great ideas. I think, and there are actually a great amount of investors who are interested in partnering with those ideas, but
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
know again like a lot of these things you have to find the right match for you and necessarily i think not you know not necessarily optimizing for the splash of it all but rather the substance of the kind of persona that you want in your boardroom to go the distance really matters um and so i think in a lot of cases um you know in outside of healthcare you can start businesses that
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And then, as you said, got to be fortunate enough to be part of the incredible venture capital firm, Andreessen Horowitz, for about five years. And I got to partner with many entrepreneurs and helping them bring some of these ideas to scale.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
radically try to disrupt and question things. And that's okay. Being in healthcare requires a tremendous amount of partnership and partnering with giants from day one. And that's okay because actually the giants are interested in partnership. Even health systems, right, which you know this really well, you might have someone be very locally competitive But they're naturally quite collaborative.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
They go to conferences all the time and they talk to each other what they're doing. And so I think that taking that spirit right on, I think it matters a lot. So those are those are some some thoughts to entrepreneurs. And, you know, if if if any one of you is trying to start a company and if I can be of any help, I'd love to share more.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
builders in this space i think um and this is obviously doesn't apply to um entrepreneurs or investors who've been in healthcare for a long time but i think um i i'll tell there's two groups of people i'd love to share some perspective on um you know at least from the sort of seed stage type of arena which is i think oftentimes problems that look really straightforward from the outside
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
It really warrants a lot of calls with the people on the ground because for everything that looks straightforward, there's a hundred nuances. By the way, it can be dealt with. And by the way, I think technology can play a big role in making those nuances much more transparent.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
But I think actually doing your homework and not just waltzing in, you require a really humble mindset to invest in the sector because You know, it's the incentives matter, the funds flow matter. There's a lot of things that the nuances really tend to pay off.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And then not too long ago, got to start my own company called Midstream Health, where we think about fundamentally how do we accelerate and advance financial sustainability using AI for some of the largest healthcare systems in the country. So that's a little bit about me, Scott.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And so, you know, not that most people don't do this, but I think that's another cautionary tale of something might look incredibly expensive. you know, straightforward on the outside, but is incredibly complicated for a hundred different reasons. And you should learn that.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Second thing I would say is that, you know, if strategy eats culture, sorry, if culture eats strategy for breakfast, I think policy eats everything in the sector. So paying attention to, especially in the change of administration that we've just experienced, I think actually understanding what, you know, are the kind of
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
policy trends, whether it's the guide program coming out of CMMI, whether it's some other change that is happening to how coding might work in the Medicare Advantage plan. There's all sorts of nuances that you should pay attention to where DC does matter, or in the case of Medicaid, your local state direction matters.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think for investors in healthcare, I think there is a tendency, frankly, to get jaded by what's worked in the past. And I do think that there is some fresh eyes that are required at times to look at something and say, gosh, we can question things.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
um in a new way using first principles and so i do think there's some opportunity for people who've been in this operating in in the space uh for 30 40 years to sort of actually open a door because i do think there's some incredible work being done now that is possible where you know whether it's the cost and latency of voice that has just dramatically changed
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
things overnight, but, but, you know, especially in the last couple of years, um, where, um, there are now opportunities and avenues and business models are possible. You know, I talked about, you know, for a long time, people on investors were really apprehensive about SMB and mid-market type, you know, go to market motions.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And now all of a sudden, I think that actually that door is open or even, you know, questioning themselves about what is sort of the autonomous healthcare future look like. It sounds very you know, Silicon Valley-like. But I actually think there's a lot, whether it's, you know, from diagnostics to surgery to, you know, how the back office might work, that has massive implications.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And I think that future is, you know, in the words of Alan Key, it's here, it's just not evenly distributed. So I'm very excited about that. But those are some things I would share. And then maybe the final thing, Scott, is I've really been impressed by a generation of new entrepreneurs in their 20s who are coming in from the outside in.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And I've genuinely been amazed at their curiosity and their ability to learn new things and the humble attitude they're bringing. I think there was a wave of entrepreneurs that were, frankly, a little too egotistical to say, you know, we know better. That's not worked. But this next generation of entrepreneurs that are humble, curious, but are coming from the outside in,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I'm genuinely amazed and inspired by them.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Always a pleasure, Scott. Thank you so much for this, and I'm excited to continue the conversation at this time.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Yeah, I've been fortunate, whether as an angel investor in companies or partner with entrepreneurs at Andreessen Horowitz, invested in this part of healthcare,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
One of the, I think there's some very interesting, I think, friends that I think are worth observing if you take one step back and think through some of the patterns that we see now, because I've been fortunate enough to, you know, from the days of Kivanos to A16Z to my own company now at Midstream, got to see some of these patterns play through.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think there's three acts that have really been revolutionary and transformative and I think are fundamentally quite exciting.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
for both founders and for patients and for, you know, clinical and administrative leaders in healthcare, which is, I think, the first kind of trend that I think is so powerful for AI is we talk about all these sort of magical applications like chat GPT or perplexity or whatever you're using. Or, you know, if you come to San Francisco, it's a pretty magical experience.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And now it's in Arizona and a couple of the markets, which is, getting into a Waymo before all of these sort of applied AI applications, you really have to figure out the data piece. And I think we don't talk about that enough. And so, you know, after the high-tech act, we really kicked off. I think we, you know, the example I give is like the human genome project, right.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Where we got to sequence all the DNA to throw out all these magical medicines we can do, um, you know, with genetics. I think there's a corollary there of actually sequencing, I call it the business genome, which is like, how do you capture the data, whether it's from other systems or record like the EMR, Epic, whether it's ERP systems. There's a lot of mapping.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
If you remember back in the day, if you think about using Google Maps, there's a car that's going across every street in America and capturing that picture. There's that work of sequencing the business genome that I think it has made all of these companies even possible in these applications. So that's trend one that I think is so powerful.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think trend two that I think is so interesting and fascinating is people's superpowers. So what do I mean by that? Clinicians are incredibly burnt out. Why are they burnt out? A big part of that driver is what we call pajama time. They're doing clinical notes after seeing a really busy day of patients.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And instead of now typing into the keyboard, you have these ambient devices that can give, basically take their notes on their behalf and summarize it and input it into the EMR with some supervision.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Same thing on the administrative side, like how do you give people superpowers around managing your, you know, or, you know, doing block optimization if you're, if you're Coventus or in the case of Midstream, how are you thinking about financial decisions that are across the, you know, very complex supply chain or the pharmacy or managed care and other areas?
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
So I think, you know, this era of superpowers has sort of unleashed a big opportunity set. The third thing I'll sort of say from a patient perspective is there's a, you know, I think about it as like autonomy in healthcare. So, you know, I talked about the Waymo example where, you know, you have, you know, the self-driving world, actually, you know, this is inspired by DARPA,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
they put a framework around how do you think about self-driving cars. So there's a framework that starts with an L1, level one. They give it some basic, you know, cruise control type stuff to like L5, which is like, you know, your fully autonomous car.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think we're going through that journey right now from a patient perspective because, you know, how do you think about this very reactive system we sit in today compared to,
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Sort of like, you know, my mom and dad would, you know, you have triptych maps, Scott, I don't know if you remember that, or, you know, MapQuest even, you'd print it and you bank on somebody taking, you know, hopefully you take that exit on time. That's how I compare to healthcare as a patient today.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Like, hopefully you caught something, but it's pretty retrospective and it's, you know, hopefully you know someone, et cetera. But this new age of much more proactive autonomy that you provide the patient, I think will be quite revolutionary. So you have so many different mega trends taking place right now that I think unleashed this massive opportunity for entrepreneurs in healthcare.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Yeah, I mean, look, I think that entrepreneurs have gotten to mentor over the time. I'm incredibly lucky there. So much of, you know, I think there's three things you got to think through, which is like the problem area that somebody is focused on. Second is the timing of that particular solution.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And the third, probably most important thing that I think a lot about is the founder themselves and the talent. Because building a company has been described as jumping off of a rooftop while assembling a parachute and hoping that you can land with all your parts intact, right? It's a pretty crazy act. And so it takes a very special person
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Um, to go do it and they come from all backgrounds, all shapes and sizes. Um, but there are pretty extraordinary people and they tend to, you know, they're not sort of. Evenly matched in every category. I think they tend to have superpowers, um, extraordinary superpowers in one or two areas. Um, and then over time, hopefully augment themselves with the team.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
So I think so much of my time, Scott is spent on, you know, I think there's a thing people obviously call, which is like, you know, product market fit, which is like, how do you have this magical moment where the solution you have, you know, um, finds this kind of incredible self-fulfilling prophecy where the market wants it and then you're off to the races.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
But I think a lot about the founder problem fit, which is like, you know, is this particular founder. You know, and their superpowers and their story and their background match the problem set. Right. So, you know, when I think about, you know, some of the entrepreneurs I've gotten to, you know, partner mentor help over time.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think there's just oftentimes health care is such a personal journey that somebody invariably has personally been affected by it, or maybe they had actually worked inside one of these large institutions or partnered with them and they got to see the problem firsthand. I think health care is one area where it's really hard to, given the complexity
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
to just sort of strictly go off of your intellectual understanding and a thesis. You should do that work and you should do all the market research, et cetera. But until you've gotten to these problems up close, whether as a patient, as a caregiver, or as someone who's worked inside these organizations, you don't have the fidelity of that picture to understand the exact issues.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Yeah, thank you, Scott. Gosh, it's such a, you know, I have to say, you know, long-time listener, first-time caller type of thing. You know, so great to be with you and the community you've built at Becker's. Yeah, just to introduce myself, as Scott said, I'm Venkat Macharla. I'm the co-founder of Midstream Health.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Because I think so oftentimes, I think where things tend to go south is a technology hammer looking for a solution. And I think That doesn't quite match up. But if you understand the problem set, then you can bring the right sort of toolkit, if you will, whether it's machine learning or other tools that are available today at your arsenal if you're a technology entrepreneur.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
So that sort of, I think, comes through, Scott. But they truly are incredible people that get to work on some of these problems, and some of them I've been fortunate to work with.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think the thing that for me that is so appealing, I mean, I got to, you know, work with on the, I was actually helped, I helped build the operating platform up at, you know, ASICC's Bio and Healthcare, got to be part of an amazing team of both operators and investors. And I had a blast working there and building those efforts up. But I think, I think to me, I'm a builder at heart.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I was, you know, I got to be, part of the build, uh, there and see, um, that group of amazing investors and operators scale, uh, to an incredible portfolio over time.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
Um, and then I, you know, for me though, I think that the thread that is, and you mentioned Malinka and there's, um, there's others, I think there's another person, um, who was on the Andreessen growth team has also started a company named Mayhole, but the, the, the, you know, the, the clear thing for me is I like taking on big hairy problems with a small group of people.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
And I think that is at my heart. You know, I like to build things. I like to take on things. And I think the other aspect of this is I think, you know, for me, we're, you know, so passionate about the early stage journey is you have to be a practitioner in the field to understand all the areas. And honestly, I think out of the last 15 years, I've seen the mobile revolution, the cloud revolution.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I think this is the most exciting time in this era of intelligence with AI. I think it's the most amount of time you think about the compute available, the data, the algorithms, the talent. Genuinely, I think we're about to enter a magical area where I know people have been really burnt out by the promise of technology solving things.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
The joke, you know, I tend to have is for the longest time for every technology that we've introduced inside the hospital, we've introduced, you know, we've asked for a tech to come with it, right? Because it's just like, gosh, these are some really, you know, incredibly challenging piece of technology. It's not necessarily improving someone's life. It's actually
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
I've been thinking about and working in the intersection of healthcare and technology for, boy, 15 years now. You know, I got to go start my career at a large care delivery provider called DaVita. And at the time, we were thinking a lot about not just, you know, kidney care, but actually how do we sort of build new businesses.
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
um you know it needs a lot of hand holding it requires a lot of um administrative burden to manage these things you know um the emr has you know burnt out a lot of physicians right and so but i think out of all the eras we're in this is probably the most exciting to be an entrepreneur um i genuinely think that you could just achieve a lot more i mean if you think about the tools available through you know whether it's github copilot or cursor or others like there's
Becker Private Equity & Business Podcast
Unlocking AI’s Potential in Healthcare and Early-Stage Investing with Venkat Mocherla 2-16-25
suggested code that can assist engineers. So you have more productivity there. People are honestly more open. They're delighted by it and not generally tired of new solutions. They're actually open and they are curious. So that's the fundamental reason that made me want to jump in to start a company.