Entries Written By Tobin Arthur
A central theme for the AngelMD community from the outset has been one of life-long learning. Specifically, our team includes some avid readers. I count among my personal mentors some of the many authors I have read over the years. I learn from their successes and failures as chronicled in their books. I benefit from the research they conduct to author their books and from the intellectual stimulation they provide.
Today, I am introducing a new way to support and engage our startup community. I want to invite you to join our monthly book club. Each month I will select a book that members of the club will read together. (If you’ve read the book before, re-read the book with fresh eyes.) I have created a Slack channel for members of the club. Each week I will post some questions to keep you progressing on the reading assignment. Toward the end of the month, we’ll open the discussion to ways in which you learned from the book or ways in which it resonates with personal experiences.
Some months I will include the actual authors in our discussion. This will be a fun opportunity to ask them questions or hear insights that may not have made their way into the final written work.
The goal for this club is three-fold:
- Foster camaraderie amongst healthcare startup entrepreneurs. This can be a lonely endeavor and we want you to rub shoulders with people working through similar experiences.
- Create some accountability for ongoing personal learning and enrichment. It’s easy to cut this out when you are in startup survival mode.
- Develop new tools and methods that will help you build and run a more successful business. You may even decide to implement the book club concept among your team.
A few rules:
- This is a no stress group. Especially busy in a given month and cant get the reading done? No big deal. Do what you can. You will get out of this what you put in.
- The discussions will be conducted in a true spirit of camaraderie. We want to help each other win. All ideas are welcome.
- Register HERE (have friends or coworkers who might want to join? Send them this link)
- Join Slack Channel HERE
- Check out the reading assignment once you get into Slack…
- Have fun
January Book of the Month: We aren’t wasting any time. The book for January 2020 and for our inaugural effort is What You Do Is Who You Are by Ben Horowitz.
I am starting with book for a few reasons. First, I believe the old saying by Peter Drucker: “Culture eats strategy for breakfast.” Culture is critical to building the company we want. That said, most people have no idea what culture actually looks like beyond nonsensical mission statements or buzzwords. Horowitz takes a fresh approach to addressing the subject and I found it compelling.
Steve Case has been discussing his concept of market arbitrage through his Rise of the Rest efforts. As a follow up on a recent post, I wanted to dig a bit deeper into the value and power of market networks.
NfX has explained the essence of a market network as well as anyone I have come across. In their words:
“Marketplaces provide transactions among multiple buyers and multiple sellers — like Poshmark, eBay, Uber, Patreon, and LendingClub.
Networks provide profiles that project a person’s identity and then lets them communicate in a 360-degree pattern with other people in the network. Think Facebook, Twitter, Goodreads, and LinkedIn.
What’s unique about market networks is that they:
- Combine the main elements of both networks and marketplaces
- Use SaaS workflow software to focus action around longer-term projects, not just a quick transaction
- Promote the service provider as a differentiated individual, helping build long-term relationships
- Market networks are also unique from a monetization standpoint. They combine the strong network effects defensibility and scalability of direct networks like LinkedIn or Facebook together with the lucrative revenue models of SaaS or marketplace businesses.”
Here is why this is relevant to the world of alternative investing:
Investment platforms that get the market network engagement and workflow dialed in will offer an opportunity to invest more efficiently and intelligently than analog models.
The premise of the advantage is that we are smarter as a community than we are individually. A network can efficiently and effectively tap into the wisdom of its members. A well crafted platform will also make work-flow associated with the investing processes more efficient than is otherwise possible with a host of individual inputs managed offline.
The point of this post is not to linger in the realm of academia, but to encourage readers with a penchant for investing to lean into a marketplace with aligned interests and help mold it into a place where you can gain personal value and advantage.
When you’re ready to stop wasting potential, join us. Sign up to the AngelMD network and you’re immediately part of a community with a potential that is far greater than any one individual.
I enjoy reading material by Ben Horowitz and his recent book “What You Do is Who You Are” is no exception. Ben takes on the task of exploring what makes for healthy company culture and articulating how one shapes said culture. This is no small task, but he takes an unorthodox approach and it worked for me.
Culture is Complicated
Horowitz explores three odd historical figures to demonstrate leaders who influenced culture. He started with Haitian slave Toussaint Louverture then moved to murderer-turned-author Shaka Senghor and finished with Genghis Khan. But he didn’t dwell on their troubled past, he focused on their personal evolution and the subsequent influence on everyone around them.
In other words, culture is evolving just as we are evolving. The question is whether we are evolving toward something worthy. Horowitz also speaks of more modern-day cultures such as Uber, Lyft, Slack, Intel, Netflix, etc.
Culture is Deliberate
Horowitz is transparent about some of his own leadership shortcomings and what he has learned along the way. Among the key lessons was to surround himself with people who offset his weaknesses. All of us have flaws and — presumably — we don’t want to incorporate those flaws into our company culture. One of the best ways to ensure this happens is to find people to counter-balance our flaws. Horowitz points to his interest in long conversations. This can be a productivity killer if not guarded, so he surrounded himself with people who had no interest in carrying on long conversations.
I also appreciate that Horowitz does not subscribe to feel-good nonsense like “do the right thing”. He dives into this mindset by showing how one person may think X is the right thing to do based on some set of values, but another person may find a different response to be appropriate.
Culture gains clarity with specificity and storytelling. The more examples a company can create to reinforce its aims, the better. It’s also the case that culture has to evolve just as companies evolve. The same guidelines that helped a company succeed in the very early days may become counter-productive as it matures.
Quickest Way To Shift Culture? Hiring Practices
In Chapter 8 Horowitz talks about the CEO of Slack:
He decided to orient his culture around the people he wanted to hire.
Who you hire, defines your culture more than anything else. Horowitz follows… “in a meeting I had with Suresh Khanna (the hiring manager) at AdRoll, something he said really stuck with me…He narrowed down a hiring process with the following attributes; (S.H.H.C.) Smart, Humble, Hard-working and Collaborative.”
No matter what culture, no matter how many thousands of years ago, no matter what “business model” one is creating — actions speak louder than words. Culture is an adjective, not a noun. Actions start at the top of the Enterprise.
Thanksgiving 2019 is here and Denver is covered in a snowstorm. It’s a perfect setting to get the Holidays started, and it’s my favorite time of the year. One of the key reasons I love Thanksgiving is because I like to reflect on the year that has passed and remember the people who have been a part of my life. That’s not to say the year hasn’t had its share of obstacles and adversity, but on balance it’s been terrific.
Since this is a post on our company blog, I will skip the gratitude I have for family. Instead, I want to focus on the friends and colleagues who have contributed to the growing AngelMD community.
AngelMD has an extremely talented and hard-working team. It’s led by Michael Raymer, Steve Foster, Dave Farmer and John Cox. Each is amazing and it’s fun to watch their talent in motion.
We have some incredible new additions to our product team including Taylor Dollarhide and Chris Losacco. They are the most talented product – designer duo I have ever worked with and I can’t wait to see what they release for our members in 2020.
Dave Farmer has begun to assemble a really sharp digital studio team that includes Tyler Patterson and Kelsey Seufer. Their digital magic has already begun to impact our community.
Our engineering staff are diligent day in and day out with the foundation provided by Ryan Stephens and Andrew James. We recently added Ty Hyten and Danielle Mullane and they spent no time starting to contribute.
Brad McCarty is our remote Marketing Director from Nashville and even though he is out of site most of the time, he is very much appreciated across the board for all his talent.
Charles Emley, Jeff Ross MD, Reed Hatch, Andrew Malloy and Paul Schuber anchor our financial operations organization and work closely with Mark Mescher who oversees startup operations. All of them work their tails off and are constantly looking for new ways to improve the community experience and drive stronger investments in the process. Roger Hauptman keeps us on track with his thoughtful approach to General Counsel efforts.
While I would stack this team up against any team, we are all blessed to work with amazing startup entrepreneurs from around the world and physicians who are the underpinning of our medical system. The hard work and dedication of both our entrepreneurial community and physician community is the immediate thing they share in common. None of them know what a scheduled break is and we get to see their work in motion every day. Ultimately, all of them want to improve their part of the healthcare system to better serve patients.
There are a few amazing physicians I want to thank by name as they have been a key part of the AngelMD team: Mark Froimson MD, Wendy Whittington MD, J. Michael Bennett, MD, Fred Duffy MD, Ronnie Mimram MD and Joe Macaluso MD.
As I reflect on the growing ranks of members and partners dedicated to healthcare innovation and committed to life-long learning, I cannot approach the holidays with anything less than a deep sense of thankfulness.
Steve Case has worked for the past few years promoting his thesis that investment grade companies are increasingly rising out of non-coastal markets. Through his Revolution venture firm and Rise of the Rest Fund he is putting money to work in markets that aren’t California, New York, and Massachusetts.
At the recent Greenwich Economic Forum, Case shared that investment opportunities in middle-of-the-country markets are acting as an arbitrage against the traditional economics of venture investing. According to the National Venture Capital Association (NVCA), 75% of startup investment dollars in 2018 went to California, New York, and Massachusetts. More than 50% went to California alone.
The glut of capital in coastal markets has led to a rise in valuations as money chases deals. Case and others would say the valuations have become inflated which presents an arbitrage opportunity. These areas allow an investor’s money to go further.
The reality is that most coastal-based venture firms are not going to put serious effort into sourcing and signing deals in the middle of the country. There are a few VCs that have made the move, and we are starting to see new funds cropping up in many of these nascent markets. They bring together LP capital from sources that want to take advantage of the arbitrage opportunity and locals that want to stem the brain drain from their backyards.
The most interesting shift has little to do with the venture firms at all.
Most VCs have poor fund track records. For many of the newer funds, the clock is ticking on the merits of their first efforts. Furthermore, investment marketplaces now democratize early-stage access to private investment opportunities. Sharp investors are less reliant on a venture fund serving as the middle-man to get access to this class of investment. In most cases, these marketplaces will offer access to deals with better economics than can what a Venture firm can offer.
With these new investment platforms and the continued focus on the coasts, the smart move has changed. Those looking to take advantage of the landscape should look to include better economics in non-coastal deals with access to deals with non-venture fees.