Building A Thriving Healthcare Ecosystem: The Network Effect with Steven Krein, co-founder and CEO of StartUp Health

[00:00:02] Hey everyone, welcome back to another episode of Outcomes Rocket Founder Stories. So excited to have you tune in with us because we have the founder of founders here today. His name is Steven Krein. He's the co-founder and CEO of StartUp Health. I'm so excited to have him here with us. Steve, welcome. Saul, it's so great to see you. Thank you for having me. Hey, it's such a pleasure. We were just chatting about like, why haven't we done this earlier?

[00:00:29] Oh my God. Well, I know we were talking, you had Unity on many, many moons ago and I've been a big fan of the podcast for a long time and it is crazy that we haven't done this. But, you know, it's funny, it's crazy that no matter how long we've been doing this, I feel like it's day one still in the health innovation sector, whether it's digital health, biotech or life science. I think we're on the, you know, as I did 13 years ago when we launched StartUp Health, but I do even more so today, I think we're on the cusp of some really big breakthroughs.

[00:00:57] And I think, you know, a lot of what we're about to go do as a sector, as an industry, as a community is about really leveraging all the practice we've just had for the last 15 years. The good stuff is just getting started. Yeah, it really is. Very optimistic. I love that, Steve. Well, look, I'm excited to connect with you today, share what you and the team, Unity, Logan, the team over there are up to at StartUp Health. I do have my StartUp Health, the network effect issue here from health this year.

[00:01:27] You guys are doing some incredible stuff. So let's get into it. As a founder, you know, and this is founder stories. What inspired your work in health care and why StartUp Health? You look, it's a great question. I ask myself that every day because there's a lot easier industries and places to be an entrepreneur, not only to make money, but to make impact. But, you know, I've been an entrepreneur for 30 years. Actually, this year, I started my first company. And the first decade of being an entrepreneur was focused outside of health care.

[00:01:56] And it was, you know, I call it, there's mercenaries and missionaries when it comes to entrepreneurship. And I was definitely a mercenary entrepreneur my first decade. I built a company called Webstakes and Promotions.com. That's where Unity and I first connected. He was our chief marketing officer. A lot of my team that I worked with then, I still work with.

[00:02:16] And that company really was about, as the Internet was coming of age, the idea that you could use technology and the Internet to really engage with people. It was a direct marketing and, believe it or not, a sweepstakes and contest company called Webstakes and Promotions.com. And we went through the whole life cycle of that company pretty quickly. We raised a lot of money, $50, $60 million, took the company public, you know, within the first four or five years and then sold it.

[00:02:45] And, you know, very financially rewarding. I think for me and for many of us, it lacked, I think, some of the deeper fulfillment that could only come from doing things that are both financially rewarding and impact and impactful. And so, you know, when you look at doctors and physicians and clinicians, they get to wake up every day and help people. And, you know, it's always my brother's a head neck cancer surgeon. My mom was a physician's assistant when she was working.

[00:03:12] And I was always admiring the fact that they get to spend their days just helping people. And while I definitely, you know, didn't go that route, I actually went to law school, graduated and started my first company. I always thought, was there is there a way to combine entrepreneurship and what the rest of my family was doing in health care? And this idea of can you bring your entrepreneurial skills to an industry that definitely needs innovation?

[00:03:38] And when one of our investors from that company who helped me sell the company, a guy named Ian Berg, got diagnosed with pancreatic cancer, it was like an eye-opening experience for us to be useful to him and his family. And that gave birth to what was the predecessor to Startup Health, a company called Organize Wisdom, that really was this idea of helping people find the best resources online.

[00:04:03] And it opened up my eyes not to the problem that people have when they go to their doctor, as much as how many entrepreneurs are all over the world working in silos, not really connected to one another. And the underpinning of this was really, again, outside of health care, my experience when I joined an organization called YPO, Young Presidents Organization, a global peer community and peer network of CEOs and entrepreneurs and founders.

[00:04:32] And we just started talking as an organization, me, Unity, our board, about what would happen if we would marry founder community with health care? What would it look like if the entire founder community were working on solving the biggest health challenges of our time? And so in 2011, the idea for Startup Health really came from this idea of can we unite entrepreneurs all over the world

[00:04:58] who are working on solving the biggest health challenges of our time in a way that really unlocked the power of community, the network effect that comes from having shared problems and challenges, shared opportunities and networks and shared access. And really, the unlock was really this idea of can we wake up every day and spend our time helping people solve these problems

[00:05:23] that are helping people get healthier, be healthier, whatever it is that they're dealing with, disease and illness, you know, et cetera. I love that, Steve. Congratulations on that exit. Congratulations on going from mercenary to missionary. I love that, by the way. I'm going to steal that. Well, I'm definitely not. I'm not the inventor of that. It's interesting. When you talk to entrepreneurs, there are some people, and there's nothing wrong with it,

[00:05:51] just focused on making money and helping, you know, create value for customers that is just about the business idea. And then there are those who are just focused, of course, on making impact and helping people. And then there's the intersection of both. We call it the double bottom line. And what we found is that it's very difficult to find people, both entrepreneurs and founders, but also funders and partners who are aligned with that idea.

[00:06:17] And so a lot of the work that we've done over the last 13 years is really to find those mission aligned people, the founders, the funders, the partners, the customers who believe that you could do both at the same time. And so that's really what I think has been our purpose at Startup Health is really to shine the spotlight on these unique mission aligned people and organizations and then bring them together and help make it happen. That's awesome.

[00:06:45] So, Steve, give me like the elevator pitch. Like, what's the value add? How are you guys making healthcare better? Tell us what you do. Quite simply, we bring together funded mission aligned founders and CEOs to tackle the biggest health challenges of our time, whether it's digital health, biotech or life science companies who are driving innovation. We start with simply this idea of curating the very best people all around the world who are doing that and organizing them into what we call health moonshot communities.

[00:07:15] The Alzheimer's moonshot community, the type 1 diabetes moonshot community, the cardiometabolic health moonshot community, and create this ecosystem of these communities so that founders can be connected 24-7, 365. So we've got a member app where our founder communities can connect with each other. And then we have a lot of different types of events every week. We have fireside chats. We have office hours.

[00:07:41] We have masterclasses that really help the founders level up, not only through our coaching, but quite frankly, the coaching of them with each other, the capabilities that are inherent in our communities are unparalleled. We're, you know, 35, 40 companies strong in the Alzheimer's moonshot community. There's academic founders. There's founders that came from other industries. There's all kinds of talent inherent in these communities.

[00:08:08] And so we're just building the big unlock for them to help each other level up and get closer to achieving their moonshot. And I'd be remiss to not mention, you know, the inspiration for this moonshot framework for us was going back to, of course, the 1960s with the original moonshot. When JFK said, we're going to land a man on the moon and bring him safely back. By the way, key part, bring him safely back before the end of the decade. None of the technology existed.

[00:08:38] None of the funding existed. None of the people were even working together when he said that.

[00:08:44] But that idea of working together on something like landing a man on the moon and bring him safely back by the end of the decade was a catalyzing mission for what became a global collaboration between 20,000 organizations and agencies and 400,000 people to do one thing.

[00:09:08] And whether you were an engineer, whether you were building the space suits or crafting the food, everybody had a role in that.

[00:09:20] And so with our health moonshot communities, the idea is to do the exact same thing, but make it about preventing, managing and curing Alzheimer's disease and related disorders or diabetes or mental health and really create collaboration at scale by curating the people together in a very unique way. That's fantastic. Really appreciate that. And I love the moonshot thing. Actually, that's part of where our name came from, the outcomes rocket.

[00:09:49] It's about moonshots. 10x is inspiring. 10% is not. So I love how you guys are thinking there's a ton of alignment between our organizations. Absolutely. Yeah. And so like, as you, you know, move forward and talk to all these companies and people, what are some of the most common questions that people have when working with you guys? I imagine like, are you a VC? Yeah. Do you like, tell me about that?

[00:10:16] Because I feel like this is a good opportunity to, to help people get some answers. Yeah. So today startup health is a global founder community for founders working on founders and leadership teams. So CEO, CMO, CXO that are working on solving these big problems. We have over the last 13 years experimented with and had very specific approaches to building these communities. One of them was investing.

[00:10:42] So we did have a few funds that have now invested in and have equity in, you know, more than 500 companies in 29 countries. I think the foundational community of startup health was built on the framework of equity and investing, but we really hit a crossroads a couple of years ago where we felt like we either represent the investors only, or we represent the founders. And we're founders. And it wasn't a very difficult choice to make.

[00:11:11] We want to be the best founder community in the world for those who are working on solving these big problems. And that means we represent them. And we then can take the stakeholders, the funders, the customers, and the partners and work with them to find the best companies for their funds.

[00:11:31] And so we have been very honored to have wonderful partners and supporters of our communities for the Alzheimer's Moonshot communities, Gates Ventures, and the ADDF, the Alzheimer's Drug Discovery Foundation. And for the type 1 diabetes, the Moonshot, we've got Helmsley Charitable Trust. And we have this belief that entrepreneurs, of course, can't do it alone. So we have to bring the funders and the partners and the customers to the table in a very curated way as well.

[00:12:00] And so for a founder in a community of ours, knowing that they're talking to mission-aligned funders, much more important than us being a funder is does our community and does our network have access to those funders? And so we're trying to do a big unlock there. But we are a membership-driven community today. We have the ability for companies to come in and join our community at a very affordable level to make it accessible to as many companies as early as possible in their journey.

[00:12:29] So as they get some initial funding, some initial revenue to be able to join the community. And then, as you know from what we do with our media and marketing engine, to be able to turn on some significantly valuable marketing and PR to help raise the visibility of the companies in our community. It's a very important part of being successful as a founder is you got to make sure people know about you and make sure people have the right story and that you're reaching the right people with those stories. That's awesome, Steve.

[00:12:58] And folks, you've heard us talk about this, right? I mean, the number one reason companies fail is lack of product demand. And that goes back to what Steve's talking about, awareness. Are they finding out about you? And if you're too big to fail, your division could still fail. And that's, again, it goes back to that number one. Number two is profitability. So, Steve, I love what you've created. You guys have created something really special. What would you say is unmatched about what you guys do?

[00:13:26] Well, I think I'd be remiss to not mention the fact that the curation of the people in the community we take very seriously. Every single person that joins our community goes through me or Unity. Our team meets them. There's a lot of, obviously, you know, apply to join a community and you might meet other team members. But you're not literally getting in without each person having a chance to meet one of us. And we take interviews very seriously because we're looking for those people who have the right mindset.

[00:13:56] We want to make sure that they are interested in collaborating with other people. So they are the kind of people you want to be with in a community. And they have a belief that it's important to simplify the complexity in their communication and messaging. We, in this day and age, you can't look past the idea that they need to be willing to become AI native if they're not already AI native with every aspect of their business,

[00:14:25] what they're working on operationally as well as their product or their service. And understand the importance of surrounding themselves with mission-aligned people everywhere. Their team, their funders, their board, their customers, even their family members and their friends that support them. You and I were talking about our families right before this call started recording.

[00:14:49] And having spouses, our wives, being very supportive of what we're doing means they're along for the long-term mission that we're all on. So there's this alignment part of joining Startup Health and any of our communities that is critical to the success long-term. And the coachability and the fundability of those entrepreneurs are tied right to that. That's fantastic, Steve. Very tangible. And what about criteria?

[00:15:16] You know, I mean, I want to be able to have people listen to this and self-select. Like, how much should they have raised? What are you looking for there? Number one. And other criteria. Yeah. And other criteria. Yeah. So I mentioned mindsets. I'm not going to spend too much time on if I want to start with the mindset is number one. And by the way, we also feel that entrepreneurs, not only their mindset, but them being acutely aware of the mindset of everybody they meet with.

[00:15:43] Are they meeting with and are they surrounded by other transformationally minded people? And do they have the right growth mindset? Number two is, are they funded for the next 12 to 18 months? And it's not about how much they've raised because some companies need $750,000. Some companies need $7.5 million. And some companies need $70 million to get through the next 12 to 18 months. And companies in startup health are at every stage.

[00:16:11] We have companies that are pre-seed, pre-clinical, that have a little bit of either revenue, grant money, or funding. And then companies that have scaled to the tens of millions or hundreds of millions of dollars in the community. So it's not about how much, it's do you have the fuel for the next 12 to 18 months? That's a key part of it. Because you need to be able to take advantage of all that startup health and our communities have to offer. And if you aren't able to do any of the things that you're able to get access to or benefit from, it's very frustrating.

[00:16:40] So we don't want anybody to be frustrated. And then really, the notion of that collaborative gene. I say gene because some people are rugged individualists. They don't want to or believe they need anyone else. And so the idea that if you've got the right mindset and you've got the funding and you're working on a problem, are you looking to collaborate with other people? And those are the building blocks. There's, I think, a lot of other things built into our rubric.

[00:17:09] But the idea that you come in interested in joining, funded to join, working on a big problem, you can hit the ground running pretty quickly and take advantage of the dozens of other founders in the community that you're in or the hundreds of founders in our broader community that you could meet day one. That's awesome, Steve. Thanks for the clarity there. It's also as important to answer the question, who is this not for? Yeah.

[00:17:38] Well, it's definitely not one. We do not want. We don't want any pessimists. We don't want anybody. You know, if you have become a pessimist, even if you weren't one because of the difficulty of meeting pessimists all day, like the funders and everybody you're talking to, and all of a sudden you're a pessimist, you kind of give off that energy. And so it pulls people down.

[00:18:02] So we need, as a community, to remember that as an entrepreneur, you can get into the valley of despair very easily by many of the difficulties that we all face building companies. Funding either dries up or doesn't appear when it's supposed to. Business partners leave or team members leave. Pilot programs don't work out. Deals don't get signed. It's even above being an optimist, a possible list. If you can't, like, live up there or help each other get there, it's really difficult.

[00:18:30] So we say no to pessimists. We say no to what we call batteries not included people as a hard stop. So there's this idea. I got inspired by my coach, Dan Sullivan, 20 past years ago with this framework of are your batteries included? Do you give energy to people? Are your batteries not included? And so that's the number one non-negotiable. If your battery is not included, you're not welcome here.

[00:18:56] If you become batteries not included, we have a talk with you where other people will sniff you out. And you obviously can shift back into being batteries included because sometimes you come in batteries included. But over time, you kind of get worn down. This industry can wear you down. And being an entrepreneur can wear you down. But this industry is different because adoption is even more difficult, the regulatory environment, the sales cycle.

[00:19:21] I think, in fact, one of the biggest things that surprises so many entrepreneurs is just showing up with a solution to a customer doesn't equal success. Because penetrating a hospital system, a pharmaceutical company, it's so difficult because you can't find those champions and then the other people around that champion to support you. So if you don't have the ability to go long on this, you can't succeed. So these are some of the fundamental parts of it.

[00:19:48] If you don't have funding to execute in the next 12 to 18 months, you're going to be very frustrated. That's why we've made that an important part of this equation because you could survive bootstrapped for 12 to 18 months. So that's cool, too. So it's not about how much it is. It's can you execute on what you need to over the next 12 months and have your best year ever in the community? And then the whole community levels up as a result. Yeah. And you know what, Steve? I really like the idea of this.

[00:20:14] Instead of just having this number, we were talking about intentionality at the beginning before we hit record. It's about, OK, what's your path here? And do you know how much you need? Because I wonder how many people don't actually know the answer to that question. More than you could imagine. I mean, it's amazing to me. We meet founders all day long. You know, we've had thousands of companies apply to be in startup health.

[00:20:41] And when we had a membership model that was just based on equity and it wasn't a membership fee, of course, we met people every day that had not, you know, not two times to rub together. But what you heard from those who had no money still was an idea of exactly how much they need to get to the next milestone. And for us, these are, OK, over the next 12 months, what needs to happen for you to feel happy with your progress? That's achievable, measurable.

[00:21:07] And we'll give funders or customers or partners the confidence that you're making progress. And then if you break down that year into four quarters, what needs to happen over the next 90 days? And if you could just think and break down the complexity of what needs to happen into a couple of different achievable milestones over the next four quarters, people can start to see maybe they don't even need that much money right now because all they need to do is get the filing for the FDA submitted.

[00:21:35] Maybe it's just that they need to do a couple of pilot programs. Maybe it's just they have to get their website launched and a couple of things to start getting a sense of feedback from the market about what they're working on. There's so many ways to just chunk it down and get to the focus of just the next 12 to 18 months. And again, if you go back to that moon shot from the 60s metaphor, JFK had to go to Congress and secure the funding. And there had to be so many different milestones met.

[00:22:03] And even when you look at the different Apollo missions and the pre-Apollo missions, it was about iterating. And so break down that moon landing into little tiny, tiny, tiny bite-sized chunks. Fail a bunch of times on your way, but make progress.

[00:22:18] And therefore, when people read or watch or listen to any of the stories about the members in our community through our newsletters or social media or website or magazine, as you showed us at the beginning of the podcast, you'll see stories of progress. It's little, little, bite-sized stories of progress that help people digest, read, watch, listen to the story. And then they end up showing up to your door as a founder. They want to invest.

[00:22:48] They want to work with you. They want to do that because they're watching you execute little by little. But over a course of a year or two or three, it really adds up. That's awesome, Steve. Well, listen, for anybody that wants to engage with you and learn more, where can they reach out? Oh, my God. Great. Startuphelp.com. So you go to Startuphelp.com. You can sign up for our newsletter, explore our health moonshot communities. We have 24 health moonshot communities we're accepting applications for now.

[00:23:16] Founders and CEOs who fit the criteria we described, they can apply to join the community. Funders and strategic partners and academic institutions are encouraged to apply to become network members that can come to our showcases and meet the founders. And we're just looking to engage those people who want to do it together versus those who think they can do it alone. But Startuphelp.com has got everything you need. Amazing.

[00:23:45] Folks, check out the show notes for ways to get in touch with Steve Krein, co-founder and CEO at Startup Health. This is not going to be the last time he's on. Consider this the first visit with Steve. I love it. We'll be back on some more to share more. But Steve, really appreciate you jumping on and sharing more with us about your community. I look forward to doing it again. So maybe because you had Unity on like six or seven years ago, we'll do the next one together. I love it. We should. And we'll have a lot of fun. Yeah. Let's plan on that. All right. Take care. Congrats on all the success.

[00:24:15] Thanks. Likewise. Take care. Take care.