EP 71: TJ Parker (Founder, PillPack) on Selling to Amazon for $1B and Going to War with Big Pharma

TJ Parker is the Founder of PillPack, one of the first-ever DTC Pharmacy companies that sold to Amazon in 2018 for $1B. Prior to founding PillPack TJ worked odd jobs in retail, pharmacy, and real estate and has a deep background in design which informed much of what he built at PillPack. In this episode, TJ shares stories from fighting off Big Pharma institutions that threatened to take his business, advice to founders for managing through a crisis, and why he's recently decided to become a VC at Matrix Partners. (0:00) Intro (1:18) Welcome TJ Parker (7:22) Odd jobs growing up (16:24) Near-death with Pillpack (28:09) Getting approval (32:24) Why sell vs being independent? (40:53) What makes Amazon great (46:12) Keeping the executive team small (52:08) Making decisions as CEO (56:59) Advice if you were to start another company (1:00:49) Transition into venture capital (1:05:01) Requests from startups (1:09:38) Insights on the venture industry Mixed and edited: Justin Hrabovsky Produced: Rashad Assir Executive Producer: Josh Machiz Music: Griff Lawson 🎙 Listen to the show Apple Podcasts: https://podcasts.apple.com/us/podcast/three-cartoon-avatars/id1606770839 Spotify: https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 Google Podcasts: https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5zaW1wbGVjYXN0LmNvbS9zb0hJZkhWbg 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 🐦 Twitter - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode, Logan goes behind the scenes with world-class entrepreneurs and investors. If you're interested in the real inside baseball of tech, entrepreneurship, and start-up investing, tune in every Friday for new episodes. Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 📱 X - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member. Tap follow and enable notifications to stay ahead of the game.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:05Logan Bartlett?

  Welcome to the Logan Bartlett Show. I am your host, Logan Bartlett, and what you're going to hear on this episode is a conversation I had with TJ Parker. TJ is the co-founder and CEO of PillPack, the world's first direct-to-consumer pharmacy that sold to Amazon for $1 billion in 2018. In this episode, TJ talks about what it's like to get acquisition offers from two of the world's largest retailers, and TJ tells his side of the story of the battle between PillPack and Express Scripps, one of the world's largest pharmacy benefit managers, that threatened to put PillPack out of business and left the company days away from failing. TJ shares battle stories, advice for founders, and for the first time ever, talking about his decision to go over to the dark side and become a venture capitalist. Every week, we're dropping episodes with behind-the-scenes

• 0:48Logan Bartlett?

  conversations with legendary founders like TJ, so please hit the subscribe button so you don't miss a future episode. Now, here's TJ. TJ, thanks for doing this. I invited you on thinking that you were just this, you know, healthcare entrepreneur, and now I find out you're a venture capitalist. So I feel like this was set up under false pretenses, but we'll get into your decision to go into the VC world.

• 1:09Speaker 01

  Yeah, so it's what we call bait and switch.

• 1:11Logan Bartlett?

  It really was a bait and switch, yeah. Well, is this your first time talking about going into venture capital? I know there was a nice little Bloomberg article about you, but...

• 1:21Speaker 01

  Yeah, we should have snuck this in like Tuesday before everyone knew I was a VC.

• 1:24Logan Bartlett?

  I know.

• 1:24Speaker 01

  I know. This will be my first time ever talking about being a venture capitalist.

• 1:28Logan Bartlett?

  Yeah, yeah. Hopefully, we keep people listening. I have enough venture capitalists on, but I'm much more interested... Well, I'd be interested in your decision to go into venture and all of that, but I think the PillPack journey is an interesting one. So for people that don't know, PillPack was acquired for $1 billion?

• 1:45Speaker 01

  Yep.

• 1:45Logan Bartlett?

  What's the... Sometimes it says 750, sometimes it says a billion. What... Is that like earn-out? Is the distinction?

• 1:51Speaker 01

  Yeah, typically, the number reported is cash consideration at closing, right?

• 1:55Logan Bartlett?

  Got it.

• 1:56Speaker 01

  That specific moment in time, but the headline purchase price was a billion.

• 2:00Logan Bartlett?

  Billion sounds better. Both of them were pretty good. So that was in 2018, bought by Amazon.

• 2:04Speaker 01

  That was in 2018, yep.

• 2:06Logan Bartlett?

  And you did well in that. It seems like there were reports that you... You weren't a solo founder. You had another founder.

• 2:13Speaker 01

  I had a co-founder.

• 2:14Logan Bartlett?

  Yeah. What did PillPack do?

• 2:17Speaker 01

  So we started the company to make it really easy for folks to manage multiple medications. And did that a couple of ways. One was the packaging, which is the most obvious. So we sorted and packaged medications by the time of day you took it. So you'd get this box in the mail once a month that had medications for 8:00 AM, 12:00 PM, 8:00 PM, whenever you took meds. And then behind the scenes, we were doing all the coordination for the customer. So managing all the refills with the doctors, managing the interactions with their insurance company. Like all the things that are annoying about taking meds and the ambition was just to make it behave like a normal subscription service and sort of get rid of all that complexity and a box just shows up once a month for the for the customer.

• 2:55Logan Bartlett?

  Is is this a US centric problem? Like, does this exist? This, I mean, obviously medicine exists in other places, but is PoPAC a US centric solution to the problem that exists?

• 3:07Speaker 01

  I think there's components of what we built that were US centric. So I think all the complexity around insurance companies and payers, that's pretty US specific. But the actual work to take and manage medications is global in nature, right? So I think regardless of where you live, everyone's still filling those pill boxes every Sunday night. They're still trying to stay on top of remember to take their meds. So there are things that are relevant regardless of where you live, but I think a lot of the pain points in the US are around the complexity of paying for medications and all the issues that that come along with the insurance process.

• 3:39Logan Bartlett?

  So you started the company in 2012?

• 3:42Speaker 01

  2013.

• 3:42Logan Bartlett?

  2013.

• 3:43Speaker 01

  We founded it in early 2013.

• 3:44Logan Bartlett?

  So a five year run as an independent company, 2018 acquired. Then you stayed on Amazon for four years until fall of last year?

• 3:52Speaker 01

  Yep, that's correct.

• 3:53Logan Bartlett?

  Would would the Amazon team deem this like success in their business and what they're now doing? I don't know what like, I don't get my pharmacy medicines through Amazon, but I assume they're doing well.

• 4:09Speaker 01

  Yeah, I think so. I mean, I think if you look at what we set out to achieve when we sold the company. And the real ambition was to build and launch pharmacy on amazon.com. That was the big opportunity. I'm not just from their standpoint. To me, that was the big opportunity.

• 4:20Logan Bartlett?

  And now it's called?

• 4:21Speaker 01

  It's called Amazon Pharmacy. Yeah, because we built a native experience on amazon.com where you can search for medications, you can compare prices, whether you're using insurance or paying cash, using a discount card. And then you can literally transact like you would transact when you're buying anything else on Amazon. And I think we underestimated how heavy of a lift that was going to be from a technical standpoint. And we built and launched-

• 4:41Logan Bartlett?

  Just integrating into Amazon and all that stuff?

• 4:43Speaker 01

  I mean, I think we had to, just to launch the basic Amazon pharmacy experience, we had to integrate with around 40 different teams. So everything from the payments team to the identity team to the fraud team to the address team, like every one of these-

• 4:56Logan Bartlett?

  I'm sure Prime is its own team, whatever.

• 4:58Speaker 01

  Every one of these little features in the CX was a different team.

• 5:03Logan Bartlett?

  Did they know that going in, the complexity associated with that? And it was you guys that underestimated on it? Or was it kind of both sides?

• 5:10Speaker 01

  We, we had the least amount of information. So I think I, like, when I looked at what we had to build, it was like, oh, this will take us six to 12 months to build and launch this thing. And it took us closer to two years just to get to like a V0. So I was probably the one that, and my co-founder misunderstood, like probably misunderstood how hard that was going to be. That being said, we did it, right? So we launched that within two years. And probably the more salient thing is that all the things we built were making a, a tech stack that was never intended to have PHI on it, like health information and HIPAA compliant, able to manage that, right? And so anything else that they build in healthcare, they can build on top of those rails. So it was a big investment and it was a lot of work to get pharmacy launched, but now they could go and build

• 5:50Speaker 01

  and anything on amazon.com that, that is healthcare related without having to redo all that work. So it's extensible.

• 5:56Logan Bartlett?

  So the data permissioning, the access, the controls, the whatever encryption and all that stuff?

• 6:01Speaker 01

  Yeah, and a lot of the different ways that we interacted with these teams, they just didn't get the data in the first place. Like all those different things are extensible. And then just going back to the pharmacy business itself. I think you'll see that over time, Amazon become, it becomes another kind of classic category in Amazon. So I think that is a success. I think they'll build a big healthcare business and a big pharmacy business that customers really love.

• 6:20Logan Bartlett?

  We were together last night and I told you a little bit about this, but I, I don't know exactly what percentage of our listenership is international. But I think people are always bewildered by the American healthcare system. And I've tried to go really deep into that and I find that people in other countries kind of tune out. They're like, I don't fucking care.

• 6:37Speaker 01

  Yeah, we're good.

• 6:37Logan Bartlett?

  This is a US-centric problem. We'll let you guys deal with it. So while I am- Very interested in all that. I think for, for at least our listener, international listeners, I won't go too much into the specifics of the US healthcare industry. But I think it's interesting to talk through like the broader entrepreneurial elements of the business and like what internalizations you had along the way in the journey. One interesting thing in talking to Colin and Nikita, one of our shared friends. I, it sounded like you had a bunch of odd jobs growing up.

• 7:10Speaker 01

  Yeah.

• 7:11Logan Bartlett?

  And what, which of those odd jobs were most helpful to you becoming the entrepreneur that sold PillPack for a billion dollars?

• 7:20Speaker 01

  I did have a slew of odd jobs growing. I had three different jobs in high school when I was like still in school.

• 7:26Logan Bartlett?

  What were the, what were the three? The three I wrote down, property manager, paper boy, restaurants, pharmacies, et cetera. That was from Colin.

• 7:32Speaker 01

  Yeah, that's about right. In high school, I worked at a sort of furniture and rug store. So that I learned a lot about design and things there. I worked at a restaurant and I worked at the pharmacy and I had a paper route. So I was like 16, I guess I had four jobs. And then I worked at Starbucks, I worked at Target, I worked in real estate. Like I did a slew of random menial jobs.

• 7:53Logan Bartlett?

  Let's put the pharmacy thing to aside.

• 7:55Speaker 01

  Yeah, that was obviously relevant.

• 7:57Logan Bartlett?

  Yeah, obviously relevant, but I do want to ask about that because it sounds like you had, even though you went to school for pharmaceutical as well. And your father was a pharmacist and you, you grew up around the business. It sounds like there were elements of naivety as well in like all the implications of building PillPack.

• 8:12Speaker 01

  Yeah.

• 8:13Logan Bartlett?

  Which I think benefited you ultimately, but was a little surprising to hear you talk about. So I do want to talk about that separately. Which of those jobs was most helpful to you building PillPack?

• 8:20Speaker 01

  You know, I think tangibly, probably real estate. I just learned a lot about sales and got very comfortable in self-managing myself. Right? No one's going to look over your shoulder. You live or die on how, how successful you are at the job. I think the, you know, the odd job of working in like a rug and furniture company was, was strangely helpful. I learned, I was, the job for most of the summers was I would stage these houses and they'd come in and do photo shoots. And I would sort of build them up and then take them down throughout the course of the summer. And I had started getting really interested in how you laid things out. How, how do you actually think about the shot? And that sort of, I started pulling on that thread and got more merch in design, which obviously became relevant in Pulpak. We were, we were, uh, we just cared about design a lot and about the CX a lot.

• 9:05Speaker 01

  Um, and then obviously the pharmacy, which I'm sure we'll get into later, but that was probably the most like obviously useful.

• 9:11Logan Bartlett?

  Well, I, I, I want to ask about that because it sounded like while you, you grew up around the business, you, you studied it. It sounded like you resisted it for a little while and, and maybe wandered a little bit out of school, being more interested in art and design and a bunch of different things. So, so, uh, maybe take me through that journey of like, being the prodigal son that doesn't want to go into the family business and then ultimately, uh, capitulating and saying, hey, there's actually a better way of doing this.

• 9:35Speaker 01

  I mean, I remember, so I went to school at Mass College of Pharmacy, which is in Boston. Uh, and we actually shared a bunch of facilities in the cafeteria with Mass Art, which was right across the street. I remember I showed up to pharmacy school the first day and I'm like, I, I should probably be over there. Like those are my people.

• 9:50Logan Bartlett?

  Did you have the beard and the hair?

• 9:52Speaker 01

  You know, I was not, not able to grow quite the same beard at that point in my life, but yes, same vibes.

• 9:56Logan Bartlett?

  Yeah, yeah, yeah.

• 9:57Speaker 01

  And so I was just like, oh man, I'm supposed to be, I actually took like a, I could, I could, we could cross register. So I took like pattern, a pattern drafting class and kind of weird, uh, weird art and design stuff. Um, and then, you know, I think during school for me, it was, I obviously went to pharmacy school. I graduated. I'm, I'm a pharmacist. Um, but most of my time was spent just exploring very unrelated stuff, seeing if there was other things I wanted to do. Um, and so I'd snuck into MIT and helped run the 100K there, which is like their business plan competition. Uh, we started this thing called hacking medicine, which is these hackathons for healthcare stuff. I think all of that was me trying to figure out like, is there more interesting work to be done than, than being a pharmacist? Um, and I think the, the reality is that I was able to combine all these things that were pretty disparate into one,

• 10:40Speaker 01

  uh, one opportunity, which became Pulpak, but it was sort of a way to combine my interest in design, my way to combine my interest in startups and then the. Sort of expertise that at least thought I had in pharmacy going into it. Um, but it was what felt like a lot of kind of just random explorations throughout school.

• 10:54Logan Bartlett?

  There's a balance between being a in industry domain expert and having the first principles kind of naivety of asking questions or trying to reinvent things. And I would have assumed, given your background, where you grew up, all of that, that you would have been much more on the industry domain expert, but it sounded like there were elements of naivety that actually benefited you all going in. Can you talk about that dichotomy of like, how you actually grew up in the industry, studied it, but then also uh still didn't know enough to be dissuaded from going after the opportunity?

• 11:27Speaker 01

  Yeah, I mean, you would have never started PillPack if you were like a true industry expert. Like, it was a terrible idea.

• 11:33Logan Bartlett?

  Did you feel like maybe you just knew 90% of it and the last 10% would have kept you from doing it?

• 11:37Speaker 01

  No, I think I just knew, like, if you think about the the environment that I that I built my expertise in, it was mostly the actual like interaction with the customer, right? It was like working behind the counter, counting pills and checking people out. It was delivering people their meds at home and kind of watching how they manage that, right? Everyone had this-

• 11:55Logan Bartlett?

  Did your dad run a pharmacy?

• 11:56Speaker 01

  Yeah, so this classic like mom and pop pharmacy early on. And then when I was in school, he started another pharmacy. It was actually very similar to PillPack, so sorted and packaged meds. But he was selling into nursing homes, long-term care facilities. It wasn't a consumer business at all. And it was a local business, right? It was just in the state of New Hampshire. So the idea was very much a derivative of that, but for a different customer and a different go-to-market.

• 12:20Speaker 01

  But for me, like, I was definitely an expert in like what the customer was dealing with, where like I saw that day in and day out. And and sort of saw the pattern matching. I knew exactly the problem that they were facing and like very tangibly. But I didn't have any experience thinking about like at the aggregate, like what do payers care about? What do PBMs care about? What do providers care about? Like, I didn't have any of that.

• 12:42Logan Bartlett?

  Yeah, the payment flow, the oligopoly piece.

• 12:44Speaker 01

  Yeah, like I had no idea about like industry dynamics or any of the the more macro stuff, like the things that you would that you would truly understand if you were a real kind of pharmacy expert. I was like an expert in the customer experience and like the- The the sort of status quo on the ground, but was like woefully naive about the the industry dynamics.

• 13:02Logan Bartlett?

  So PillPack was kind of the OG direct to consumer healthcare company, right? And so you're you're helping people fulfill their their medicines. But you were very design centric from the start. And Colin, who we referenced earlier, ultimately became your CMO, right? But he was at IDEO at the time and sort of maybe take me through why design was such a first principles element of the way you built the company and how you thought about it.

• 13:27Speaker 01

  Yeah, it sounds very basic, but for me, I just really cared a lot about it. Or like I the things that I was interested in at the time were all very design centric like.

• 13:37Logan Bartlett?

  You're trying to impress the art school kids.

• 13:39Speaker 01

  I was trying to express, I was trying to like relive when I was supposed to be in art school.

• 13:43Logan Bartlett?

  I'm not a normal pharmacist, I'm a cool pharmacist.

• 13:45Speaker 01

  I'm a cool guy.

• 13:46Logan Bartlett?

  Yeah.

• 13:47Speaker 01

  So it was to some degree was that simple. I do think we felt like there was not, if you think about like pharmacy historically, like it's it's a very non enjoyable experience, just like functionally. And so we were like, how do we both like functionally make this better? But is there any way to make this go from a thing that you sort of embarrassed about at the sort of at baseline, you just don't enjoy? Then maybe it can just be slightly better, right? It could be a little bit more magical, a little bit more pleasant. And we spent a ton of energy just cycling through the physical product, the CX, the the brand. We actually camped out our offices. We did we did Techstars right away, sort of company in January and Techstars for like three months. And then we moved into IDEO where Colin was the was running that office.

• 14:31Speaker 01

  And we were there for like six months, just flushing out the physical product, the digital product, the CX. We went back and did the classic audio thing where we're sitting in people's homes, kind of walking through prototypes and that whole that whole thing. And I think it's a little more normal now, like people historically, like since 2013, there's been a bunch of DTC companies that have more like elegantly designed things. But at the time, that was both weird for a startup and it was certainly weird for like a healthcare business.

• 14:57Logan Bartlett?

  What companies were around then in the D to C broader space? Warby Parker, I guess.

• 15:00Speaker 01

  Warby was around, I think Harry's was probably right around the same time.

• 15:07Logan Bartlett?

  Yeah, great design sort of became the fundamental element.

• 15:09Speaker 01

  It was very early on that curve.

• 15:10Logan Bartlett?

  Pre-Casper, pre-Dolling Club.

• 15:12Speaker 01

  Yeah, I mean, maybe, I mean, Casper's probably right around roughly the same time, that's sort of our era of startups. But there were no like pharmacy startups, right? Like, it was very weird to start like a pharmacy. Now, it's like, it's, it's still maybe not normal, but there's a lot of them and there's a lot of activity in the space.

• 15:27Logan Bartlett?

  Sure.

• 15:28Speaker 01

  And at the time, it was, it was sort of odd. There was GoodRx, it was like the one pharmacy-related tech thing that was in the world. Otherwise, it was, it was us.

• 15:35Logan Bartlett?

  You had a few like near-death experiences

• 15:37Speaker 01

  Yeah.

• 15:38Logan Bartlett?

  that really pushed you to the, to the brink of like, hey, is this actually going to work? Can you, can you talk through the worst of those?

• 15:46Speaker 01

  Yeah, I probably look back on those moments like the most fondly, which is really odd.

• 15:50Logan Bartlett?

  Why, why is that? Just because you got out of it?

• 15:52Speaker 01

  I don't know. It was just like the rush of trying to figure it out and it not, and, and figuring it out. Obviously, if I didn't figure it out, maybe I wouldn't look back on them quite as fondly.

• 16:00Logan Bartlett?

  It's, it's interesting, by the way, like those, those really catastrophic situations, like if you talk to people, I've never gone to war, but if you talk to people like in battle, in war, the closeness of the team and like the enjoyment that they actually have from that experience, they look back with like weird elements of nostalgia, even though like ostensibly it's just terrible.

• 16:18Speaker 01

  Yeah, I think you're just so focused. You can't think about anything else, right? It's hard to find those states where

• 16:23Logan Bartlett?

  Yeah.

• 16:23Speaker 01

  for some amount of time, you have nothing else that you're thinking about other than trying to fix the problem.

• 16:27Logan Bartlett?

  And it builds like the commonality and depth of relationships and all that. So, so where were you? What was the situation?

• 16:33Speaker 01

  Yeah, so if you zoom back to maybe, we launched the product in early 2014. Starting in like the middle of 2015, we started getting these termination notices from PBM. So for, for folks, especially international folks, they don't have to worry about any of this. That aren't familiar, there's things called PBMs, which are pharmacy benefit managers. Think about them as the insurance company for your prescriptions, right? So.

• 16:56Logan Bartlett?

  It's basically, we were talking last night about the Amazon analogy, right? So they are amazon.com and so they're the facilitator of the payment flow, the distribution, the logistics, all of that stuff traditionally.

• 17:08Speaker 01

  Yeah, traditionally, kind of like an old-school demand aggregator, right? So they. They determine which pharmacies you can fill at, how much your copays are, which medications are even covered. That's one half of their business. And then the other half, similar to Amazon, is they owned and operated their own first-party mail-order pharmacy, right? And so

• 17:24Logan Bartlett?

  So it'd be like Amazon having their own products, right?

• 17:27Speaker 01

  Yeah, I think the difference is that historically, they didn't let anyone else compete in that home delivery business, right? So if you're them, you have a captive home delivery business, you don't want any other competitors stealing share in that side of the business.

• 17:38Logan Bartlett?

  So they helped facilitate to the CVSs or whatever, the medicine and the shipments and all that stuff. But they didn't want anyone shipping to individual locations?

• 17:48Speaker 01

  Yeah, it's totally different. They basically had their own DTC company, if you want to think about it like that, where they were doing direct shipments to customers' homes. And then they had this separate business, which was, you can fill out CVS or Walgreens and we'll be the payment rails for that experience. And so it's the reason there's not like a well-functioning e-commerce business and pharmacy today. It doesn't, if you look at kind of market share, it's very small, right? So at this point, like PillPack, Amazon Pharmacy is probably the largest kind of traditional e-commerce pharmacy that exists is because of this one thing. And that's where I was naive, right? I was like, I worked in a pharmacy, we took insurance, like we just filled out this paperwork, we got a network, like, no problem, like, I know how to do that. And I did that, right? Like, I filled out all the paperwork, we got a network with all the major PBMs, nobody cared, we were just a small little pharmacy. And then we started scaling way faster than like Joe's Pharmacy on the street.

• 18:33Speaker 01

  Like, we went from filling, you know, hundreds of prescriptions a day to many thousands of prescriptions a day. And that sets off all sorts of triggers in their systems. And so, starting in like early 2016, we started getting these nasty grams from all the major PBMs, right? So there's really three really big PBMs, Caremark, Optum, and Express Scripts, which is now Cigna and Aetna. And through the first half of 2015, we got termination notices from two out of the three big PBMs.

• 19:03Logan Bartlett?

  Termination notices mean?

• 19:04Speaker 01

  Mean like you can't, you actually can't serve our customers anymore.

• 19:07Logan Bartlett?

  Cease to discuss.

• 19:07Speaker 01

  Yeah, cease to discuss, basically. And they would give us a certain amount of time before they would actually kick us out and we would be done. And we had this guy, Jim Acina, who was Obama's Deputy Chief of Staff, joined our board. And he successfully helped us navigate these quietly in a very kind of standard way. And so they, those were all resolved, no big deal, company's still, company's still operating. And then, beginning of 2016, we got the same type of notice, but from Express Scripts, which was the largest PBM at the time. And I assumed like we'll get Jim involved, we'll make some phone calls, we'll try to find a way to to the exact same, we'll be able to hopefully work this out amicably and find a path forward. And we could not even get them to like return a call or respond to anything. They just went totally dark, like just no engagement at all.

• 19:52Speaker 01

  Um, and so we were about two weeks away from losing the time was about 40% of our revenue, like a solid chunk of our, our revenue. Um, and we made, was definitely a very aggressive decision, but in hindsight was sort of the, the penultimate moment for the business of going to war with them very publicly. We just didn't have any other, like there was no obvious other thing to do, right? We tried all the back channels and things we'd done before.

• 20:15Logan Bartlett?

  How many end customers did you have at this point?

• 20:17Speaker 01

  Uh, I don't remember offhand. I would think order of magnitude, we were probably about

• 20:22Logan Bartlett?

  Couple of thousands, few million?

• 20:23Speaker 01

  Uh, no, probably about 60 million, 75 million in revenue, something like that.

• 20:27Logan Bartlett?

  Yeah.

• 20:28Speaker 01

  But very high, like

• 20:28Logan Bartlett?

  What does that mean from a customer, like?

• 20:30Speaker 01

  Like tens of thousands.

• 20:31Logan Bartlett?

  Tens of thousands, got it, got it.

• 20:32Speaker 01

  Something like that.

• 20:32Logan Bartlett?

  So you had tens of thousands of people that were dependent on you for their medicine?

• 20:35Speaker 01

  Yeah.

• 20:35Logan Bartlett?

  And you said, hey, we're going to go publicly to war. These guys aren't responding to us. And so you started fixpharmacy.com?

• 20:41Speaker 01

  Yep. So we started this website on fixpharmacy.com and the the ambition was to show the tangible impact that we were having on these customers' lives and to make it very clear that the only reason they weren't going to be able to use Poebak anymore was because of this was because of like business interest versus what was actually best for the, for the customer.

• 20:57Logan Bartlett?

  And you did this because you couldn't get them to respond?

• 21:00Speaker 01

  Yeah, we did because we couldn't get any engagement. So you put a shelf in our shoes, like in two weeks, we're going to have whatever the number was, call it 10,000 customers that today are relying on our product and then tomorrow just can't use it, period. Um, and so it didn't feel like we had any other option, but to try to create some amount of noise to, to make it clear what was happening. Um, and you know, I think we had the classic war room, right? We had this like shitty little conference room that we were just piled in there with mocks of the site on the walls. Like Colinville, we had, the lead was like a customer testimonial video. Um, with this kid, Carson, who I still talk to, to this day, that was probably 12 or 13 at the time that used PillPack and was like a huge PillPack fan. And then Colin made this much more wonky, like, here's what a PBM is, here's what they're doing, here's why it's bad.

• 21:45Logan Bartlett?

  So there was the like top of funnel, like, hey, let's appeal to the heartstrings of the people. And then there's like, hey, specifically, here's what's going on.

• 21:53Speaker 01

  Yeah, and you think you have two different audiences, right? You have the general public, which mostly cared about what actually was happening to these customers. So you had a video for that. And then we probably had 1,500 customer testimonials of like 10,000 people. So like a large subset of people that within like two days have provided us like real testimonials about the impact of the customer.

• 22:10Logan Bartlett?

  Which is pretty impressive. I mean, honestly, like that getting-

• 22:12Speaker 01

  We have like raving fans, actually.

• 22:14Logan Bartlett?

  Yeah, getting that number of people to give a shit enough to give you a testimonial in a short turnaround time, right? I mean, it sounds like, I don't know, 15% or 8% or 5% of your user base in a couple of days were able to give you testimonials.

• 22:24Speaker 01

  Yeah, and it wasn't, I think for me, it was like, it was sort of the moment that emotionally, we all felt like we were doing something like incredibly important. But, because it wasn't like testimonials that were like, really, I really love this packaging, like, it's so great, like, look how cool it is.

• 22:39Logan Bartlett?

  Yeah, yeah.

• 22:39Speaker 01

  It was like-

• 22:40Logan Bartlett?

  My razor has extra blades.

• 22:41Speaker 01

  Yeah, no, it was like people like, we've been using PillPack to manage my mom's meds across the country. And like, without this service, like, we're probably gonna have to put her in a nursing home. We can't financially afford to do that. And it was all, it was mostly that. Like, it was like, we, I need this service for my mom, I need this service for myself. Like, I don't have another solution. And so like, if you went on that site, it was the video and then like 1,500 of these testimonials. And that was really appealing to the general public. And then we separately had this more explainer video that was talking about what PBMs are and how they work. And then all sorts of these, and a research articles about what happens in the equipment networks and all this stuff. And that was more for wonks, right? It was for congressmen or senators or policymakers that were gonna end up on the site that would care a lot more about those impacts. And we appealed to both audiences.

• 23:24Speaker 01

  This was really, this was really Jim Acina, who was like, here's exactly how you should architect the campaign. And then Colin and I and other folks executing that.

• 23:31Logan Bartlett?

  Was there any debate to pick this battle or not? Or was it pretty clear this was the path?

• 23:35Speaker 01

  It's definitely a debate, right? So there was a version where you kind of like quietly moped away and

• 23:40Logan Bartlett?

  Yeah, pretty please, pretty please.

• 23:41Speaker 01

  People would have found out, but I don't think it would have really made the news if we didn't make a big deal of it. And maybe you can limp along and find a way to get, maybe you turn into more of a B2B business or something else that that finds other ways to grow the business. We actually had this board call

• 23:57Speaker 01

  before we, before we sort of pressed go on the campaign. And I think it was Fred Destin, who was one of our board members, talked like very eloquently for a while about all the puts and takes, pros and cons, and they kind of netted out, well, like, we should probably do it. This is like rational to do. And I remember George Zachary, who's one of my other board members, just sat kind of quietly the whole call. And at the end, he was like, you know, I think we attacked the Death Star. I don't know what else we're gonna do. And that was like, that was like his one piece of input for the, for the board call.

• 24:22Logan Bartlett?

  George from CRV.

• 24:23Speaker 01

  Yeah, George from CRV. But yeah, it was a big debate. And I think if you look back, it was, it was the moment that it was clear we were staying, but it was also could have been the moment that killed the company.

• 24:31Logan Bartlett?

  Did you reach out to journalists in, in

• 24:34Speaker 01

  Yeah.

• 24:35Logan Bartlett?

  before you were gonna do this? And like you were, you were gonna shout this from the rooftop as loud as you can?

• 24:39Speaker 01

  Yeah, it was like manic, right? So like, we launched the site and then I was just pounding the phones with journalists, both the day before, like embargoed. I'm in the day of, and I think within the first day, we had something like 40 articles that were written about it. And we had a bunch of regulators that made phone calls trying to poke at what was really going on. And I think it was probably within 24 hours that Express scriptures was back at the table, at least like communicating with us, which was the initial goal was like, let's get them to actually engage and have a dialogue here.

• 25:06Logan Bartlett?

  And so that played out and it seemed like you guys reached a, you know, some, some shared understanding of the way it was gonna work, but you had an ad campaign that was, that was in the pipeline and you, you maybe accidentally let fly. Can you talk through the Facebook ad campaign?

• 25:24Speaker 01

  Yeah, so we'd probably been negotiating. We had turned off the, the broader campaigns, just kind of paused everything because they were engaging, right? So the, the goal was like, let's get an engagement. Let's try to get to like a new understanding of

• 25:34Logan Bartlett?

  Within 24 hours they're at the table, within a couple of days, you're making some progress.

• 25:37Speaker 01

  Maybe five or six days later and it's, it's just become a negotiation. Like it, it probably should have been all along. And we were going, we were sort of lobbying paper back and forth, trying to get to a contract that, that made sense for both parties. And we were, we felt like we were close, like we were, we were like, we're just down to like some more minutia details in that contract. And I get this like frantic call from my contact at Express Scripts and they're like, "We thought we had a deal." And I was like, "No, no, we got a deal. Like, we're good. We're gonna figure this out. Like, we're cool." Like, "You guys just launched this massive ad campaign. We're seeing it all over Facebook. Like, what's going on?" And I was like, "Honestly, I, I don't know. Let me, like, let me chat with Colin. I'll call you back." I go talk to Colin and inadvertently, we had set up, when we launched the whole thing, we had this staged campaign, right?

• 26:20Speaker 01

  And one of the things that Jim told us we should do is like, launch a campaign on Facebook that only targets employees at Express Scripts. So that they'll think it's just like massive campaign, but in reality, you, it's this tiny little campaign that's targeting like a couple thousand people.

• 26:32Logan Bartlett?

  And at the time, Facebook was playing a little fast and loose with like,

• 26:35Speaker 01

  Yeah, you could target like, yeah.

• 26:37Logan Bartlett?

  And so you were, you were spending, I think Colin said the whole campaign was $5 or something?

• 26:40Speaker 01

  Yeah, I think it was 13 or something.

• 26:42Logan Bartlett?

  13 dollars. And but it felt to the company-

• 26:45Speaker 01

  To them, they're like, "Every employee is seeing this thing."

• 26:47Logan Bartlett?

  And it's like, "Express Scripts, worst company ever." Or what was it?

• 26:50Speaker 01

  It was just like, it was, it was leading with like the header from the Fix Pharmacy site and then driving traffic to Fix Pharmacy. But it was obviously like very targeted and narrow. Like, "Yeah, no problem. We'll turn off the campaign." Like, we're, but I think in their eyes, like, they're like, "We're going back to war because we didn't like something in the contract." Um, but it's just one of those classic, like, that was a Facebook arbitrage moment, right? Where both, you could grow a company on Facebook, but you also do like really wacky stuff like that. Um.

• 27:13Logan Bartlett?

  Did that actually help, or was that just a, uh?

• 27:16Speaker 01

  It was just kind of a funny, yeah, I didn't, thankfully it didn't blow it up. It was probably the bigger thing, right?

• 27:20Logan Bartlett?

  One thing that they bitched about, uh, was that, and I think maybe you guys got slapped on the wrist a little bit, was like unlicensed, uh, sales, or maybe you had to go get, uh, basically approved in 49 of, the only one you didn't do was Hawaii, or Hawaii and Alaska?

• 27:34Speaker 01

  Yeah, we didn't, we do Hawaii now at Amazon, but we don't think we did Hawaii at the time.

• 27:38Logan Bartlett?

  Yeah, okay. But, and, and so I guess now water under the bridge at that point, but at the time, it was a, whatever, administrative error. Was it actually administrative error? Or was it a beg for forgiveness at that point in time? Let's serve us all the states?

• 27:49Speaker 01

  Yeah, so we were, we had done all the normal administrative work to be licensed and shipped to every state that we could ship to. They were like fishing for anything they could do to paint us as a bad actor was ultimately what was happening because the the fundamental issue was that we were competing with a mail order pharmacy. I guess that's actually just not that complicated. Um, I think if I remember right, like there was maybe a couple of month administrative error that we made at some point that they were

• 28:09Logan Bartlett?

  It actually was an error.

• 28:10Speaker 01

  They were able to, I don't really remember, but they were able to dig up something.

• 28:12Logan Bartlett?

  Yeah.

• 28:13Speaker 01

  Um, but it was totally inconsequential and immaterial. I mean, like, we've never been, we've never had issues with any boards of pharmacy or any actual PBM. And actually, we've never been terminated from like a single PBM network since. Or ever, but like since that moment, it was clear that we were gonna, we were be here to stay effectively.

• 28:28Logan Bartlett?

  Managing through crisis, uh, what advice would you have? I'm sure there's a bunch of founders right now that are having kind of existential crises because of the macro environment or because of access to capital or because of whatever. What did you internalize from that experience that you think would be broadly helpful to founders?

• 28:45Speaker 01

  Yeah, I mean, it's a little corny, but like the whole theory here was if we built something that customers really loved, that we we'd have this issue and that we'd find a way through it because of, because of that, right? And like ostensibly, that's exactly what happened. Um, I think more tactically, we had this issue four or five times with, of course, the company with different entities. And I think the wrong take would be like, oh, you should just always go to war. Like, that's actually not very productive. The only reason we went to war is we had no other path. Like, we were able to negotiate and navigate this with everybody else. Each one was different. So like, it might have been that you lobbied it in over the top of the board, or you went in through like a lobbyist that had a congressman make a phone call. Like, there are always different, like, ways to resolve this stuff. And I think it's just very, I think you have to think about each one of these issues as a very

• 29:30Speaker 01

  situational, dependent on the situation, right? Um, but if you have to go to war as a startup, like, you should go to war because like startups are generally binary at this point.

• 29:39Logan Bartlett?

  Were you transparent with your employees about like, I mean, I guess once Fix Pharmacy lost, everyone had to know, but like,

• 29:44Speaker 01

  Yeah.

• 29:44Logan Bartlett?

  how much leading up to that, did you give like a peek behind the curtains to people, uh, that, hey, we might be fucked?

• 29:50Speaker 01

  Uh, we were very transparent with investors about this issue. Like, when I raised the first $50 million round in the spring of 15, Like I sat George from C I B down and I was like, this is the biggest risk in the business. Like if we lose these contracts, we do not have a business. So like, I was very transparent to people giving me money, which always feels like a good strategy. It actually, it'd recommend that.

• 30:10Logan Bartlett?

  It actually, well, it actually is a good approach to stuff. Some founders try to polish everything up for you. And I actually find the biggest trust is when they're like, hey, by the way, here's why you shouldn't invest. Here's like the three reasons that you might have about our business model. And it builds trust, like in a way, okay, I'll go diligence those three things, right? And maybe there'll be something that someone won't admit, hey, you don't trust me for X, Y, Z reason. But like, it is super helpful and it is a good way of building trust.

• 30:39Speaker 01

  Yeah, I think investors are happy to make bets. They just want to know what bets they're actually making.

• 30:42Logan Bartlett?

  Yeah, it saves a lot of time. It's like, all right, this would I have to go knock out?

• 30:45Speaker 01

  And some were like, that's just too much of a risk point. Like I'm not gonna, especially like healthcare investors who deeply understood the issue. We're like, that feels too risky. Like, so like, not everyone was happy about it, but like, we were always very transparent about that risk. With employees, like, I don't think the average employee understood that that risk vector, right? It just wasn't, it wasn't relevant to their day to day job generally until that moment. Uh, but then by the time we went to war, like everyone deeply understood it.

• 31:08Logan Bartlett?

  Do you remember, was there an all hands that you're like, hey?

• 31:10Speaker 01

  Yeah, there was an all hands before we, before we launched the campaign. It was probably only, we had like two groups of employees, right? We had the kind of corporate team, product tech and marketing. And then we had the pharmacy and operational team. I don't know that, I think we briefed them because they were going to get phone calls and C X was going to get impacted. Uh, but the more sort of tangible briefing was to the corp team who had sort of more a better pulse on like the business itself.

• 31:35Logan Bartlett?

  I want to get to your operating lessons and that stuff, which we, which we had been talking about a little bit before. But, uh, why, why sell? Why not go at it alone in the path of building what could have been, I don't know, an independent standalone company?

• 31:51Speaker 01

  Uh, and there's a couple of factors at play. One was, the first couple of years of the company was building, mostly building all the software behind the scenes that powered the pharmacy. Um, so by 2016, we'd ripped out like the equivalent of like an E H R in a, in a more sort of telemedicine centric business. And we put our heads up and we're trying to figure out like, what else can we do with this infrastructure that we built? And we ultimately ended up launching this, this sort of pharmacy fulfillment business that is now a very big business. But at that point, we were meeting with all the large retailers, all the new startups, trying to figure out if anyone would want to build solutions on our infrastructure.

• 32:24Logan Bartlett?

  Oh, interesting. So there was the D to C business as well, but then, hey, can we expose the underlying infrastructure to other people?

• 32:30Speaker 01

  Yeah. And actually, I don't know the exact numbers now because I'm no longer there, but the B2B business now is at least as successful as PillPack. It is, it is a scaled business that is quite successful. But yeah, at the time, we were pitching all the large retailers, we're pitching all the startups. At one point, Row was doing all the fulfillment on our backend, things like that. And one of those retailers, one of those customers was another large retailer that wasn't Amazon. And that-

• 32:53Logan Bartlett?

  Rumored to be Walmart.

• 32:54Speaker 01

  Rumored to be Walmart. That kind of independently went from what started as a very commercial conversation to, to an M and A centered conversation with the like, this is really cool. We should build something together, but actually, would you ever think about selling the business? And so you have that-

• 33:06Logan Bartlett?

  And they were interested in the B2B component. Hey, we already have in customers.

• 33:09Speaker 01

  No, they were really interested in like refactoring the CX and building a more kind of cohesive multi-channel or multi-channel pharmacy business. And so it was more, there we have a very large pharmacy business and it was how do we make it more efficient, better CX, all the kind of obvious stuff. And so you had that as an input. So like, it felt like there was a tangible path to sell the company. I think we also had decided that the thing we wanted to build was going to be very capital intensive to build. We'd gone from like, oh, we just want to offer this one product to customers that's really convenient. To like, we started pulling on the strings. We had these incumbent issues. Now we wanted to fix a bunch of different stuff, right? We just wanted to fix pharmacy more generally. And I think if the capital intensive thing, like if you look at all the DTC startups, they were all much more capital intensive than people thought they were going to be.

• 33:51Speaker 01

  And that obviously eroded a bunch of the returns and everything else. And then, discreetly, Ellie and I had gotten to the conclusion, like we fundamentally believed that- To fix pharmacy, to fix the supply chain, to fix pricing, you had to make pharmacy shoppable like any other retail category, which means you got to bring price forward. You got to make it easy for customers to understand alternatives. And then literally as easy to check out as buying soap or anything else. And then that led us to like, well, we should sell to an existing retailer that has the customer base, the UI, like all the existing infrastructure. It's what made us the most excited about Amazon because they are the most established ecommerce player, right? And we thought if you could map pharmacy to their traditional ecommerce experience,

• 34:34Speaker 01

  that you wouldn't have to train customers how to navigate it. They would just assume it works like everything else, which is exactly what we ended up building at Amazon. So you had all that at play, right? It was like economically, it was probably smart just from a capital standpoint. There was inbound interest, so then you have to capitalize on that if you have it, if you think it might make sense to sell. And then we very specifically wanted to build this new thing. And that thing would have been best built at Amazon.

• 34:56Logan Bartlett?

  So a big retailer, rumored to be Walmart, is expressing interest in you at the time. How do you compartmentalize? One of the things is like the toothpaste out of the tube mentally of like, hey, probability wise, that's not going to go anywhere, most likely. Like whenever someone shows strategic interest, the vast majority of times that doesn't actually happen, right? And so you kind of needed to dual track the fundraising and also the M and A. And so how did you actually internalize like, hey, this might be the end of chapter one of my journey here, or I might be slogging ahead for another 10 years of building this company. How did you actually go about doing that?

• 35:33Speaker 01

  I mean, I think totally at the parallel processes stuff, or you can't just single path in like an acquisition. So we got to an offer from the other large retailer. And that felt like it was at a value that made sense for the investors, for us.

• 35:46Logan Bartlett?

  And how did they, by the way, just, I mean, you don't have to give the numbers, but like, how did they, how did you internalize what number was going to be acceptable? Was it based on the last round post-money and you had to clear some hurdle? Or was it based on a public market comp? Or how did that work?

• 35:59Speaker 01

  I think it was triangulating between what felt like a reasonable multiple for this type of business and not like. Like a startup reasonable multiple, like an actual established business reasonable multiple. And investors all needed to do well and make money, right?

• 36:11Logan Bartlett?

  And so What was the last round at that time?

• 36:13Speaker 01

  The last round was done, I think, three hundred.

• 36:15Logan Bartlett?

  Three hundred, okay. And ultimately a billion dollars.

• 36:17Speaker 01

  Ultimately a billion dollars. As you would imagine, the offer before that was less than a billion dollars. But it was still, for the early investors, any of these outcomes were great. For the like, the last investors, they were still good for, I think it would have been a two-year hold or something for those investors.

• 36:30Logan Bartlett?

  Did you engage Catalyst at that point?

• 36:32Speaker 01

  We engaged Catalyst when things felt more like they would materialize with that other bidder.

• 36:38Logan Bartlett?

  Yeah.

• 36:38Speaker 01

  And honestly, like, we engaged Catalyst because they had sold basically everything to Amazon. And to me, the only outsized outcome was the two of those folks picking it out.

• 36:51Speaker 01

  And so, but, you know, we had what I felt like a pretty good offer, but it didn't feel like firm enough yet. And so then I kicked off a fundraise in January. I think at the time we had like six to eight months of money, like when you normally, we raised money, we probably had eighteen to twenty-four months. And I had six months of money in the bank, so that's when we'd kick off a normal fundraise. And we did, we had that going, so I was pitching people, east coast, west coast, the whole thing. And I think that applied some amount of pressure, as it should, to the buyer.

• 37:16Logan Bartlett?

  Did you, did you tell the investors that you're talking to at the time, hey, there's some strategic interest as well?

• 37:20Speaker 01

  Yeah, so I was pretty open with the investors throughout this whole thing. Like, everyone was pretty eyes wide open.

• 37:25Logan Bartlett?

  And who was in your circle of knowing that this was going on outside of the investor group? The executive team was, was it Colin, co-founder? Like, how big was that group?

• 37:33Speaker 01

  Yeah, for a while, until we were to like a signed LOI, it was the exec team, so Colin, Yvonne, who was our COO, CFO, Jeff, who's our head of growth and BD, Elliot, obviously my co-founder, and then there were like, we needed more finance folks involved. There was some diligent stuff that, yeah, GC, some more, more operational folks involved.

• 37:56Speaker 01

  And as you can imagine, as it expanded, expanded as things went along. We did, like, I think we, it was probably me, Colin, Jen Harvey, who was our head of design, and Elliot.

• 38:09Speaker 01

  And maybe Gavin, there's like four or five of us that were camped out in my basement in my house for like two and a half months. Building flows and UIs and pitching like pitch decks and everything.

• 38:20Logan Bartlett?

  Sure, your wife loved it.

• 38:21Speaker 01

  My wife loved it. Yeah, she was, she was amazing. Actually, she would like cook us lunch and dinner every day and it was, it was. It's a similar to like the fixed pharmacy thing. Now it's like a very fond memory.

• 38:30Logan Bartlett?

  Totally.

• 38:31Speaker 01

  These things always end up with like whiteboards and screens on the walls and like some version of a war room are like the most fond memories of these things. Uh, but it was a pretty small group at, at that point.

• 38:40Logan Bartlett?

  I'm picturing the always sunny meme or whatever of like the whole board and like the, yeah, yeah, yeah. And so, so, so, uh, in thinking through the process to sell, if you were, if you're talking to a founder or an executive that is fortunate enough to potentially sell right now.

• 38:55Speaker 01

  Yep.

• 38:55Logan Bartlett?

  What internalizations or like postmortem after the fact, what would you say to someone that is making a decision between going the standalone path? Or taking what could be, you know, a life-changing amount of money and outcome for a lot of different people? How did you think about that? And what would you say to those people?

• 39:14Speaker 01

  I think I was pretty rational about it, which is like, this is an outsized outcome right now, given where the business is. And who knows if this type of outcome will be available to us again for however long. And it feels like the right, ultimately, Amazon felt like the right home for this business, right? That we had the opportunity to build a new category in pharmacy and ultimately a new category in health for Amazon, which is a pretty awesome opportunity. And I've never, I don't think I've ever once looked back and really regretted that decision like as hard as like being a VP at a big company was compared to being a founder and all the sort of minutia pain of that, like it's a great outcome for my investors. It's a great outcome for my employees. It's life-changing for a bunch of people. And ultimately it'll help build a thing that will impact millions of customers.

• 39:57Speaker 01

  So I think if it feels right-ish and you have reservations generally, like it's probably a good decision. Like I've never regretted it.

• 40:04Logan Bartlett?

  Based on your Twitter, I would say that you didn't love all elements of working at a big company. First, I want you to say something nice about Jeff Bezos. No, what was the?

• 40:15Speaker 01

  Jeff Bezos is very smart, as you might imagine.

• 40:17Logan Bartlett?

  Yeah, I believe that.

• 40:18Speaker 01

  Jeff Wilkie is very smart.

• 40:19Logan Bartlett?

  Yeah, yeah.

• 40:20Speaker 01

  He's a whole crew of people that are quite smart at Amazon.

• 40:22Logan Bartlett?

  What did you take away from working at Amazon that you would impart to people that haven't about like what makes them great? Were there, I'm sure there were frustrations along the way based on what I've seen. But what were the elements that really you think were really helpful to you now that you're thinking through new business opportunities and all that stuff?

• 40:45Speaker 01

  Yeah, I mean, I think they're obviously incredibly good at scaling businesses that are working, right? Like their ability to just chip away and scale things that have deep product market fit is super impressive. And the amount of process and everything around that that enables that is incredibly impressive. And so I think like you get to the point where you're a true growth company and you're scaling. And there's a lot of relevant lessons to take from Amazon.

• 41:11Speaker 01

  Obviously for us, we were mostly in zero to one the entire time. So it's a bit different, but I think they are very good at that.

• 41:16Logan Bartlett?

  The overlap between your business and theirs, obviously there was a bunch of strategic rationale, but I think both of you were very focused on the end customer as something that you really valued as a north star. You guys were probably a little bit more design and customer experience centric, and they were probably more logistics and engineering centric. What would you maybe compare and contrast those two things? Was it, was it oil and vinegar with you guys coming in and having elements of your culture with elements of their like disciplined supply chain focus, or did they actually come together pretty well?

• 41:49Speaker 01

  I think they came together pretty well. Like we, compared to like a Zappos or probably a Twitch or some of these other transactions, a lot of those companies decided to stay very independent, right? To be a separate subsidiary. To try as best as they could to keep doing their own thing and not get absorbed into the into the machine. I think for us, we thought the opportunity was to build a pharmacy on amazon.com. And to me, the way to do that is to just become Amazon. Like it didn't make strategic sense to try to protect this little pill pack thing when the the big opportunity was to be on Amazon.

• 42:22Logan Bartlett?

  So those things actually fit in like a pretty well, like Tetris blocks fell in together.

• 42:27Speaker 01

  Yeah, I mean, I think within a year, year and a half, like if you spend time with like our team versus the consumables team or the soft lens team, like there was very little tangible differences between the like we had just co-opted being part of Amazon.

• 42:43Logan Bartlett?

  I'm trying to think through like other one medical and Twitch and Whole Foods and Zappos and

• 42:48Speaker 01

  Yeah, they all stayed.

• 42:50Logan Bartlett?

  I mean, I guess.

• 42:51Speaker 01

  Quincy maybe to some degree.

• 42:52Logan Bartlett?

  Yeah, I'm trying to think. I mean, from a success standpoint, I'm sure someone that follows Amazon's business much more, but like in terms of the the Twitch has obviously been enormously successful in its own right, but like almost it would have succeeded absent Amazon, in my opinion, right? This, it feels like in terms of like strategic nature of one plus one equaling something more than one, you guys would be on a short list of their acquisitions.

• 43:16Speaker 01

  Yeah, I mean, I think that was some of those, that was probably the most appealing to me because it was, there was not some existing team that we were competing with. There was not some existing business that we had to fight for resources with like we were able to show up and help them build a net new category on dot com that has the potential to be a massive category. And the things that we had built were highly complimentary, right? It was all the infrastructure, the payer contracts, the licensing, all the software that powered the fulfillment centers. Like you can think about that as like the backend of what became Amazon Pharmacy. The opportunity was to build a net new UI, but even that UI was supposed to be just Amazon. Like we weren't we weren't fighting the the things that they would naturally want to do. Actually, that was that came from us. Like we were like, the opportunity here is to build Amazon and pharmacy.

• 43:57Speaker 01

  And so it was very symbiotic from a from a tactical standpoint.

• 44:04Speaker 01

  I think culturally, we were very different. We were a startup. We were going as fast as possible. Like we were making a lot of intuitive decisions. We didn't over process stuff that didn't need to be over processed. And so the ways of working were very painful to adjust to. And maybe there was a way to balance that from an integration standpoint in a way that would have been more pleasant and productive. But we didn't like we just we made the decision to like we're just co-opting Amazon. And I think it will be the right strategic decision. I think it will make the business very successful. But it was personally not that enjoyable to go from being like a CEO of a thing where you had tons of autonomy to being a VP at a big company that has co-opted all the processes of that big company.

• 44:46Logan Bartlett?

  Did you adopt the one-page memo or the page memo?

• 44:48Speaker 01

  Yeah, on my day one.

• 44:50Logan Bartlett?

  Do you like that? Like, would you do that going forward?

• 44:51Speaker 01

  Yeah, I think I like a writing culture. I think it can be pushed to a place where it's impractical. So like, if I'm trying to review a product, I still want to review screens, not a paper about it. And if I want to review like a financial model, I'd rather review like a financial model, not a document about the financial model. And there's many examples of this beyond those couple. But I do think there is a time and place for papers and for writing. And I think if I were to ever start another company, I would co-opt some of that. But in a much more balanced way versus a sort of binary way.

• 45:22Logan Bartlett?

  You went through Techstars in 2012 with Nikita Beer, one of my friends of TBH and GAS as well. And both of you, was there something that you guys learned in 2012 Techstars that said, hey, once you sell your company and you leave to take to Twitter and kind of bitch about the elements of the company?

• 45:41Speaker 01

  Learned everything I know from Nikita.

• 45:42Logan Bartlett?

  Yeah, right. I mean, he did for Facebook.

• 45:44Speaker 01

  Must have been in the water at the Techstars office or something.

• 45:46Logan Bartlett?

  Yeah, well, it's impressive. Now, operating lessons. One of the things you said when we were talking before, keeping executive teams small was something that you really thought was beneficial to your company. Can you talk through that?

• 45:58Speaker 01

  Yeah, and this is, I think, generally, a lot of the lessons I learned about what went right at PoPAC, we're experiencing the inverse at a big company, right? So like a lot of stuff I didn't even do on purpose or even realize at the time. I was just kind of doing whatever made sense logically. But if our exec team, by the time we sold, you know, we were like a thousand people doing a few hundred million in revenue, something like scale-wise somewhere around there. And the entirety of my exec team was me, Elliot, my co-founder, so I had a product in tech, Yvonne, who's COO, CFO, plus legal, HR, like all the support functions. Jeff, who has had a growth and Colin, who was CMO. So there's only five of us, right? So if you had a two hour weekly meeting where we were debating like the most important decisions in the business, it was literally just the five of us in a room.

• 46:43Logan Bartlett?

  And there were a bunch of VPs or other.

• 46:44Speaker 01

  Yeah, we had lots, obviously lots of VPs. We had all the support functions in place. We had also operational teams, very operational business.

• 46:52Logan Bartlett?

  But the inner circle.

• 46:53Speaker 01

  But the inner circle was very product tech centric. And then Yvonne, who could speak to operations, which obviously was super important. We talked about a lot, but then speak to anything else that was more tertiary. And I think the net result of that is like, you're spending almost all those meetings talking about either product, growth, or to some degree, operations, right? And that that's it. Like you're not, I think a good rule of thumb that I have is that if, if you take the number of people in that meeting every week, would think in the CEO group, the exec team, and cut it, you cut it by that number of people. That's how much time you're going to spend focused on each of those topics, right? And so like, if you have your head of HR there, your head of legal, your head of finance, like all these other kind of VP level folks, you're going to spend a bunch of time talking about that stuff, which maybe like is important, but probably actually for a startup is not

• 47:37Speaker 01

  the thing you want to spend like your most precious two hours a week spending time on. And so I think like.

• 47:42Logan Bartlett?

  It's not exactly proportional to.

• 47:44Speaker 01

  To the value, right? To like what needs to happen. Like, I think the, the best version is you can, those things all are important. Like you have to have well functioning HR and legal and finance and all these support functions to build a big business. But it's probably not what you want to spend like the strategic hours of time debating. And honestly, like when I was at Amazon, I bet I spent 30 or 40% of my time debating HR stuff.

• 48:04Logan Bartlett?

  Yeah.

• 48:05Speaker 01

  Like the only offsites that they have cohesively across the company are HR. Like you spend this all this time on people's stuff and it's very easy for that to just absorb all of your energy. And obviously like Amazon's on one extreme and Pillpack was on the other extreme. And so it's very dependent on where you are at scale, but like, I personally think keeping that team super small and focused on product and the customer and tech and, and growth is, is really productive.

• 48:28Logan Bartlett?

  Did that inform how you hired people?

• 48:30Speaker 01

  Yeah, I think in hindsight, that would have been the smart thing to do. I think I was just meandering my way through it, trying to figure it out and made kind of all the mistakes in the book. I think the thing that we ended up doing that was very productive and I would typically recommend is we hired Yvonne. It was like a very competent COO and CFO. And she managed all of it, right? So like, it was more that I, I personally. For the most part, did not need to deal with any of that stuff. She was, she was better at it than me. She was very competent. And once in a while, there's something that really needed my attention came up. And mostly I just had to think about HR. Like, it just wasn't relevant to my job, right? I didn't have to think about promotions and leveling and all this stuff. Like, Yvonne just handled it. I think the other thing, and this, this is more insidious, that as a startup, like,

• 49:13Speaker 01

  all of your important folks are mostly compensated on equity. And so you just don't have a lot of the things that create, like, HR work at a big company, right? Like, you don't, your employees don't really care about their next promotion the way that you do at a big company. They don't care about their level. Like, they got a big grant upfront and they're just trying to execute and you're gonna win or die as a team. But as a big company, it's pretty rational as an, as an individual actor to care about, like, career pathing your way through the big company, which creates all sorts of HR work that you just can't avoid.

• 49:42Logan Bartlett?

  In talking to people that you worked with, it seemed like you weren't particularly in the weeds on a lot of their day-to-day.

• 49:49Speaker 01

  Yep.

• 49:50Logan Bartlett?

  And it sounds like that was purposeful. How did you think about what your role was as CEO and the, the balance between delegation and also control of decisions?

• 49:59Speaker 01

  You know, thinking about what the job of a CEO is, it's to set the vision and have a really clear perspective on what you're doing. It's capitalize the business, which is incredibly important. And it's to be the external voice of the business. Those things are obvious. I think you have to be world-class at those. No one else in the company can do those things. And then internally, like, for me, it was finding the right exec team, putting them in place and making sure they got along. Like, that was what I viewed my internal job as. And rather than trying to make day-to-day decisions at, at a granular level, even at like a relatively strategic level, it's way more productive to find great people that could do that themselves with a lot of autonomy than it was for me to try to dive in and make those decisions. And part of it was like, I was, when I started the company, I was 26. Like, I was a pharmacist. Like, I had no...

• 50:44Speaker 01

  Super relevant experience and training on how to run a company. So I didn't have any sort of preconceived notion that I was better at marketing or product or engineering or operations. Like, I was just trying to find people that were really smart that knew how to do those jobs and then like help them when they wanted help, but then mostly stay out of the way when they knew what they were doing.

• 51:01Speaker 01

  I think similarly, like, if I found myself diving into a specific function and like making tactical decisions all the time or changing decisions that got made, the solve wasn't to do more of that. It was to realize that the person in that role probably wasn't the right person in the role and replace them with someone that could make those decisions and I didn't need to sort of override or dive in.

• 51:19Logan Bartlett?

  How'd you make decisions or how'd you get the appropriate escalations around the things that maybe were slightly irreversible versus the things that could you could go back on?

• 51:28Speaker 01

  It was clear to the folks that I worked with directly day to day, that kind of five person group, that they had loads of autonomy to make most every decision.

• 51:36Speaker 01

  And we tried to make those decisions as fast as possible, mostly because they just could go make them. There wasn't a lot of process around that.

• 51:42Speaker 01

  But I think there was a handful of decisions where they were incredibly strategic and if you made the decision wrong, you're jammed. There's no way to go back on it, right? I think those decisions, I tried to delay them to the last possible minute. Like, I dried those decisions out as long as possible because-

• 51:58Logan Bartlett?

  What were some examples of those?

• 51:59Speaker 01

  I mean, the PBM one is like the most marquee example, right? Like, we knew that was gonna be like a huge issue in early 2015 when we started getting the first kind of signal that that was gonna be a major issue. And it was like a company killing issue. It's not like a huge issue that you can still navigate. And I think if kind of the anxiety of needing to do something about it got to me, like, we would have made a, we would have blundered that thing, right? Like, I think it would have resulted in me trying to get in the room with some exec trying to convince them that we're doing something really cool and you should really want to partner with us and then get caught blindsided and we would have lost access. Instead, I just let it roll and like, we always were debating, like, Elliot and I probably debated that thing. Certainly hundreds of times of what we should do about it.

• 52:42Speaker 01

  And we just were never satisfied with an action that made sense until we ultimately went to war. Right. And so I think that's one where it maybe felt irresponsible because we didn't have like a solidified answer of how we're going to navigate it. It was more reactive, but it ended up probably being the only way to to navigate that problem.

• 52:59Logan Bartlett?

  And was that because just you kept building scale of customers? And so at the point in time that it ultimately came to a head, you had the most leverage.

• 53:06Speaker 01

  Yeah. And I think actually there's like a, there's a Sloan case study on it that was written like before it all happened. And that was like, one of the net outcomes is like, just build a customer base and they'll, they'll ultimately go to bat for you. So I think that was the sort of always the, the default answer until we came up with something better. And we just never came up with something better. And then it ultimately worked out.

• 53:27Logan Bartlett?

  Recently, I heard you say that you under invested in a handful of operating executives along the way. What point in time would you, besides earlier and whatever, like what point?

• 53:39Speaker 01

  Earlier, better.

• 53:40Logan Bartlett?

  Yeah. It's pretty straightforward. Try too hard, care too much. What would you have done differently in that path? Or how, how would you have thought about it differently to get to a better or earlier answer?

• 53:56Speaker 01

  Yeah, I think this is always like a dance, right? Because I have this, this very negative aversion to, to bringing in like seasoned execs early in a startup's history. I think, I think process is generally counterproductive, trying to get the product market fit and get things going. But at the end of the day, like when you get to a certain level of scale, you need process and you need to put in place the things that a, that a seasoned exec knows how to, to put in place.

• 54:18Logan Bartlett?

  I took down, you said, you ultimately need process, but process is counterproductive early on.

• 54:24Speaker 01

  Yeah. I mean, I think that's, I like to, to shit on investor updates on my Twitter a bit. And that's, for me, that's less about the investor update. It's more like. Things that are formulaic early on seem like positive signal, but generally to me are negative signal that you're not just like heads down trying to figure stuff out.

• 54:42Speaker 01

  But to to jump back to your question, you know, I think we we have this amazing head of ops in New Hampshire, Chris Pickering. That could just like fix anything that went wrong in operations. This is a place where we're talking to customers all day, filling prescriptions, shipping everything. And just could like firefight his way through anything. And I think because of that, we didn't put process in place fast enough because we didn't really need it. Everything was going fine. And by the time things started blowing up and imploding, like it was too late and we needed someone in the seat and we didn't have someone in the seat. And same thing in finance, like we had the same issue where like for a while, like we were budget and actuals were tracking, like bookings were good. At some point that just started to erode and fall apart. Thankfully, we found Yvonne. So like net net, like it worked out.

• 55:26Speaker 01

  But I think the hard thing there is knowing, knowing when to to put those folks in place before things are blowing up. But not too preemptive, right? That's the challenge is that too preemptive is counterproductive. Too late, you probably wasted a bunch of cycles on things you could have preempted. And the whole challenge is like, where are you on that?

• 55:44Logan Bartlett?

  Would you rather be too late or too early?

• 55:46Speaker 01

  I'd rather be too late.

• 55:47Logan Bartlett?

  Yeah.

• 55:47Speaker 01

  Yeah, I mean, I think too early is damaging, but it feels like you're doing things that are productive, which is the worst of all worlds. Like by the time like Yvonne showed up, there was no pretenses that we didn't need Yvonne. Like it was very clear. We need someone to fix this stuff. That's very competent. And I think like ultimately you'd like to just nail it and like land it at exactly the right time. But if I had to pick. There's the the way to be wrong. It's to be late, not early.

• 56:10Logan Bartlett?

  If you were to start another company or giving advice to founders, like were there any things along your journey? That you definitely would have done differently in hindsight?

• 56:22Speaker 01

  Not really.

• 56:23Logan Bartlett?

  Yeah. Pretty serendipitous run.

• 56:25Speaker 01

  It was a pretty serendipitous. It was so fast. Like it was five years start to finish.

• 56:30Speaker 01

  And like think like there are things that I see founders doing that I that is different than what we did that I would say to do differently. Like we were never dilution sensitive even a little bit. Like we just, we basically raised as much money as we could at any given moment and tried to go as fast as we could go. And like. If you're playing the startup game, that's generally a pretty good way to approach it.

• 56:45Logan Bartlett?

  Yeah, better to grow the pie.

• 56:46Speaker 01

  Yeah, just better to just, yeah, I think the dilution sensitivity is like a silly game. And if you're playing this game, like there's dilution sensitivity is fine if you're playing a different game. So like there's stuff like that that we we did that was, I think at the time was actually not that weird. Now it might be a little bit more. A little bit more weird, but no, I think we had a pretty serendipitous run.

• 57:04Logan Bartlett?

  What about picking investors to work with?

• 57:06Speaker 01

  I was very happy with my investor set and mostly because I picked investors that I liked. You know, we had David Frankel was our first institutional investor. And everything from there was because of Dave, he would invent intros to people he knew. And like, we built our investor base off of that, but we were generally in the fortunate position where I could pick people that I liked. And I also specifically did not go raise money from healthcare investors. I raised money from tech investors, like we didn't, we barely even pitched healthcare investors. Partially because we knew of these like fundamental issues that they wouldn't get over. And partially because I wanted help with people, from people that knew how to build consumer businesses, not help from people that knew how to build a healthcare business. And I would do that over again.

• 57:46Speaker 01

  There, I think there's a new generation of healthcare investors that, that know how to build consumer businesses, but that was not the case in 2013, 2014, that era.

• 57:54Logan Bartlett?

  What was it like having your dad on payroll?

• 57:56Speaker 01

  I always say it was much better to have your dad work for you than to work for your dad.

• 57:59Logan Bartlett?

  Yeah.

• 57:59Speaker 01

  I know it's great. I mean, it was especially like when we, we sold the company and announced, like that was a pretty magical moment.

• 58:06Logan Bartlett?

  Is that, is that technically nepotism? I guess it is, right?

• 58:08Speaker 01

  He wasn't allowed to report directly to me.

• 58:10Logan Bartlett?

  Got it.

• 58:11Speaker 01

  So he reported through Yvonne. And same thing at Amazon, I just didn't want him reporting directly through me.

• 58:19Speaker 01

  Well, he reported through me, but not to me. But it was like, you know, he had been the president of the board of pharmacy. He did the first like multi-store acquisition for CVS. He had started, he ran like this big chain of pharmacies. So he had a lot of like very important and relevant decisions. And then things like boards of pharmacy, like I could send my dad to the board of pharmacy who's not like a, a punk 30 year old kid. He's like an established known quantity and help navigate that stuff. But then like more kind of emotionally, like announcing the acquisition with my dad in the room. Like he obviously did very well. We all did very well. It's probably the most fond memory that I have.

• 58:55Logan Bartlett?

  Venture capital. Well, first, what the fuck? Why, how?

• 59:00Speaker 01

  So it's my, my favorite vibe is like other venture capitalists getting mad at founders for doing.

• 59:04Logan Bartlett?

  Yeah, it's a good one. Well, it's, it's funny. You and other motherfuckers like you coming in, uh, make me have to have a podcast to differentiate. Cause you actually.

• 59:15Speaker 01

  I'm not doing a podcast.

• 59:16Logan Bartlett?

  You have to have real.

• 59:17Speaker 01

  I just go on other people's podcasts.

• 59:19Logan Bartlett?

  I don't have real experience to draw on. I just, I just, uh, you know, versus you, you can talk through all these tactical stories and shit. The Bloomberg article announcing your departure, uh, there was, there was some high comedy in there. In the months since he quit, he's worked on a members only call, club for car aficionados, a startup, outdoor retailer at his family's 12 acre farm in Park City. And he's also done a bit of hellish skiing. Parker's social media accounts show him as a dad as well as a thrill seeker with a penchant for fast cars. So I assume, uh, the move to venture capitalist was to fund your lifestyle.

• 59:51Speaker 01

  Yeah, the jokes write themselves.

• 59:52Logan Bartlett?

  It sounds expensive.

• 59:54Speaker 01

  So, so what was. Hellish skiing is not free.

• 59:57Logan Bartlett?

  Yeah, I've, I've, I've heard that. So what was, what actually drew you into venture capital? It sounds like it was, it was, I mean, matrix, you didn't, was not an investor, right? It sounds like a good fit for what you're going to do, but you did a little bit of, uh, dating to figure out what like, this was a purposeful thing. It wasn't like you sort of fell into it. So maybe take me through the inputs.

• 1:00:15Speaker 01

  Yeah. I mean, obviously, uh, leaving Amazon, the question was go start another company, go be a VC or do nothing. The do nothing was appealing for a minute, uh, and then I got pretty over that pretty quick.

• 1:00:27Logan Bartlett?

  Then you heard the, the hellish.

• 1:00:28Speaker 01

  Yeah. Yeah. It just, it wasn't, it wasn't sustainable.

• 1:00:32Logan Bartlett?

  Yeah.

• 1:00:32Speaker 01

  I think to start a company, it has to be serendipitous. Like it has to be organic. And I was, there's nothing that I'm feeling super, that I'm feeling like very committed to starting right now. Um, and then separately, like I've always respected the VCs I worked with, like we had a great relationship. They were super impactful, the business, obviously. And I think I carry a lot of relevant experience in building healthcare businesses and consumer businesses, especially people that are doing the combination of the two. And the way I could have the most impact right now is to help other founders build their businesses. And so venture to me is the most natural way to do that. There's obviously these wackier things, doing the multiple chairman thing or doing a studio. There's other ways to

• 1:01:14Speaker 01

  to do that. But for me, venture felt like the right way to to sort of harness that energy, that experience. I'm going to kind of help the next generation of founders start companies. I think for Matrix specifically, like I was, I was confident I wanted to do early stage investing, but not like super early seed. I wanted to do more concentrated, bigger bets on companies. And it was a platform where there wasn't really an established healthcare practice. And so I could come in with a, with a clean slate and deploy capital in a way that made sense to me from a healthcare standpoint, without having to to sort of navigate an existing thesis. It was sort of blank slate.

• 1:01:47Logan Bartlett?

  We joked about venture capitalists, but interesting to hear you say there that they were super helpful in the journey. I guess just to back up and given now you are one, you can't make fun. Well, I guess I still make fun of them, but yeah, the adding value point, I'd be interested, what, where were they most helpful along the journey and like, what are you hoping to bring elements of to, to the startups you work with?

• 1:02:13Speaker 01

  Yeah, I mean, I think

• 1:02:13Logan Bartlett?

  That's a free commercial right there.

• 1:02:14Speaker 01

  It's a free commercial. I appreciate that. You know, I think my investors are helpful, like very specific things, like one of my investors got me Jim Acina, who like we wouldn't have done that express scripts thing without Jim, period. One of my investors got my Facebook account turned on after that was off for a year and we couldn't acquire any customers. So

• 1:02:31Logan Bartlett?

  We can plug Slow Ventures.

• 1:02:32Speaker 01

  That was quite helpful.

• 1:02:32Logan Bartlett?

  Yeah.

• 1:02:32Speaker 01

  Yeah, Slow Ventures.

• 1:02:35Logan Bartlett?

  Friend of the pod, Sam Lawson. Sam, Sam, actually Slow has had one of the better performing episodes when him and Zach Weinberg yelled at each other.

• 1:02:42Speaker 01

  Yeah, I'm much better at recording podcasts than listening to them.

• 1:02:44Logan Bartlett?

  It's two hours of them yelling at each other. So now you've, now you've lived it.

• 1:02:47Speaker 01

  Maybe I'll commit it.

• 1:02:48Logan Bartlett?

  Yeah.

• 1:02:48Speaker 01

  I commit myself to, to listening to that. I think for, and then they were helpful mostly on building like consumer businesses and like the, the tactics of how to scale the company and all that stuff. I think for me, I do have a unique set of experiences building both a healthcare business that it's one of the few that got into the guts of healthcare. Like we weren't just a cash pay like DTC startup. Like we took insurance, we fought with insurance companies and the incumbents. Like we navigated all of the more kind of difficult components of healthcare. But then at the same time, we built like a real consumer business that has a well-known brand and great design. I think that combination, at least right now, is quite unique from investors.

• 1:03:24Logan Bartlett?

  A lot of people seem to want to avoid the insurance part of this.

• 1:03:28Speaker 01

  It's really hard.

• 1:03:29Logan Bartlett?

  And yeah, it's much sexier just to do the cash pay or much easier to just do the cash pay side of it. But is that something you'll think you'll, I mean, obviously it's a unique experience that you have. Do you think that's a real opportunity for startups?

• 1:03:42Speaker 01

  Yeah, I mean, I'm convinced that startups won't make a serious dent until they're they're playing the real game and they're in the guts of healthcare.

• 1:03:49Logan Bartlett?

  Yeah.

• 1:03:50Speaker 01

  And I have some like controversial takes on how companies should to approach insurance and go to market that are not is really not the status quo right now. But sort of moving away from that, like, I think if you don't take insurance, you're going to be more expensive than your competitive set. Anything that's more expensive than the competitor generally doesn't win. And so I think it's really critical to really get in the guts of healthcare to make an impact.

• 1:04:12Logan Bartlett?

  What are the like requests for startup or types of founders or opportunities that you're kind of noodling on outside of? It sounds like healthcare, maybe a little bit of consumer as well, but like, and things that actually go into the guts of healthcare. But anything that you're thinking about that would be interesting opportunities you think are out there?

• 1:04:30Speaker 01

  I think it's a continuation of the things I've been thinking about for the last five, six years. I'm kind of jumping back to like making pharmacy more shoppable, making healthcare more shoppable. It's everything from how do we expose pricing way better like right now, like as far as I know, the only healthcare service that exposes pricing upfront before you transact is Amazon Pharmacy. With insurance, which is crazy.

• 1:04:52Logan Bartlett?

  Yeah.

• 1:04:53Speaker 01

  So I think there's lots of opportunities, both for companies delivering services, but also for utilities that that can be cross cutting to solve that problem. I think there's lots of other problems around navigation. So how do you make it easy to go from provider A to provider B? How do you make it easy to book an appointment? How do you provide continuity around that? But for me, it's all how do we reorient the healthcare system around the end customer instead of orienting it around the provider and the payer? I think the only way that healthcare gets more efficient and better for the customers for that to happen. Is until you're built products for the customer, their products are going to continue to suck. There's not going to be competitive dynamics, like none of the things work in healthcare because there's no. It doesn't work like other categories when it could work like other categories. And so that's the stuff I'm most interested in. I am sure that as I spend time moving away from operating into investing full time, that I'll get interested in other pockets of opportunity.

• 1:05:38Speaker 01

  But coming in day one, that's the stuff that I think about the most.

• 1:05:41Logan Bartlett?

  What's the interview process for a successful founder that raises their hand and say they want to go into VC? I assume you talk to the existing investors that you already knew, people that you built friendly relationships with that ultimately didn't invest as well. Word gets around that you're going into this. But I guess, how does that process actually play out? When did it happen? How did you go about doing the Goldilocks of this versus that? And sort of trying all the different suit sizes or porridge, you know, temperatures, or whatever the right phrase is?

• 1:06:12Speaker 01

  Coming out of my Amazon experience is a bit damaged on like large scale over processed stuff, which made me really attracted to a more traditional venture, like a small group of people. Typically like GPs that are making specific investments, but the whole fund is not making the same type of investments. So that narrows the field pretty quickly.

• 1:06:29Logan Bartlett?

  Yep.

• 1:06:31Speaker 01

  And then, like, I didn't want to inherit a specific way of thinking about healthcare investing. I wanted to be able to set that. And that also sort of narrows the list down even more considerably.

• 1:06:44Logan Bartlett?

  So a small, no healthcare-ish practice?

• 1:06:47Speaker 01

  Or at least like a, like, Matrix has done some healthcare investments, but they don't have anyone that is focused on healthcare.

• 1:06:52Logan Bartlett?

  Dedicated practice.

• 1:06:53Speaker 01

  And I actually don't have anyone focused on consumer right now. So I have some autonomy to do both of those things.

• 1:06:57Logan Bartlett?

  Yep.

• 1:06:58Speaker 01

  And which is super rare for a fund of that scale, right? It's the last fund is an $800 million fund. We're making like real Series A bets, real seed bets. And so that, like, if you just look at, if you just create a list of funds where those two, those two things are both true, it's a very short list. And then most of Matrix is ex-founders, so that the culture is a very founder-centric culture. I obviously met lots of other funds. We raised money from a bunch of different funds and spent time with other people. But when I decided those are the most important qualifiers beyond the actual people I was working with day to day, it became a pretty obvious choice compared to the rest of the options.

• 1:07:32Logan Bartlett?

  What's the actual dating process like of, I mean, you, did you, did you pitch them back in the day?

• 1:07:37Speaker 01

  They were the first VC fund we ever pitched, actually.

• 1:07:40Logan Bartlett?

  Okay, so they said no.

• 1:07:41Speaker 01

  They said no, yeah.

• 1:07:42Logan Bartlett?

  Yeah, but so they knew.

• 1:07:43Speaker 01

  This time they said yes.

• 1:07:44Logan Bartlett?

  Yeah, yeah, clearly.

• 1:07:45Speaker 01

  This is really just damage, I'm just damaged from the first time around, and so.

• 1:07:47Logan Bartlett?

  I actually got turned out at for associate job at Redpoint in 2012, so I, you know, it was a much more expensive hire for me than they would have gotten back then, but I, so, so what was the actual, like, audition and, I don't know, smelling each other's butts type thing?

• 1:08:01Speaker 01

  Yeah, it was like a pretty standard interview process. I spent the most time with Antonio at first.

• 1:08:07Logan Bartlett?

  Were they purposely hiring for this at the time? They were.

• 1:08:10Speaker 01

  So they were looking for a healthcare GP, which is also serendipitous. I didn't have to, like, try to figure out how to pitch them on, like, the idea of hiring someone, like, that was already an active search for them. And then it was, I spent a lot of time with Antonio and then met the whole rest of the GPs over the course of, it's like in, in the fall, like September, October, November, somewhere in there.

• 1:08:31Speaker 01

  And then I met other folks through Christmas, through early in the year. Ultimately, I made the decision back sometime middle of the winter, but I was committed to taking off the ski season. I had to, I had to get my heli skiing in.

• 1:08:43Logan Bartlett?

  Yeah, yeah.

• 1:08:44Speaker 01

  Before I started a new role.

• 1:08:46Logan Bartlett?

  So now you're full time?

• 1:08:47Speaker 01

  I'm full time as of yesterday.

• 1:08:48Logan Bartlett?

  Wow.

• 1:08:49Speaker 01

  Yeah.

• 1:08:49Logan Bartlett?

  Well, congrats, welcome aboard.

• 1:08:51Speaker 01

  Thank you.

• 1:08:51Logan Bartlett?

  Yeah, any other, I guess, interesting snippets on the venture industry or anything, any other perspectives that you have?

• 1:08:59Speaker 01

  I mean, I think for me coming in, like, so if you think about like my arc, we sold the company in 2018, and then I was basically heads down inside Amazon for four years. Popped my head back up like six months ago, and I'm now obviously moving into investing. It feels to me like much more of a continuation of 2018. Like, I didn't live through any of the 2020, 2021, any of that stuff, so. The market feels quite normal to me.

• 1:09:23Logan Bartlett?

  Kind of checked out, right?

• 1:09:24Speaker 01

  Yeah, everyone's like freaking out, and for me, it's like, this doesn't feel that.

• 1:09:27Logan Bartlett?

  It's like those e-commerce sales.

• 1:09:28Speaker 01

  Exactly.

• 1:09:30Logan Bartlett?

  There's like this weird hole in the middle.

• 1:09:32Speaker 01

  It's just the same graph if you just ignore that little.

• 1:09:34Logan Bartlett?

  Yeah, yeah, a little flip.

• 1:09:36Speaker 01

  So it seems like a great time for me personally to jump into investing. And obviously I don't have the baggage of an existing portfolio like fresh eyes. So I'm excited about the timing. Like it feels like really, really good timing for me.

• 1:09:49Logan Bartlett?

  Yeah, good. Did you go into the decision making, like how, how the firm actually makes decisions and all that? How, I mean, it's obviously a bunch of different flavors of stuff that, uh, the way people go about making decisions, but how, how do you think about like, was that an important consideration to you to have the right level of autonomy within? Cause small partnerships generally, there's going to be some level of, I don't know if consensus, but inputs with one another working together. Was that a consideration?

• 1:10:16Speaker 01

  I was definitely trying to find a platform that I feel like could be the most like me version of me, like make intuitive decisions and have a lot of autonomy to do that. And so, you know, I talked to partnerships that literally take votes, like straight up votes. Matrix is very much a non-consensus partnership. So you can do, as a GP, you can do the deals you want to do, which was important to me.

• 1:10:36Logan Bartlett?

  How do you guys go about making decisions as a group? Like, is it, is it consensus? Is it autonomy for the individual GPs? And how do you prosecute deals? Do you pair up as a team and kind of go about it? Or do you, do you have like a counterpart that keeps you honest on the diligence process? How does that work?

• 1:10:52Speaker 01

  Yeah. So as a GP, if you find a deal that you're interested in, typically pull together like a subgroup of other folks in the firm. Typically like three to five folks total, spend time with that company. And if the subgroup feels good about it, you'll bring it to a partner meeting. The company will come pitch the partner meeting. And ultimately the GP has the autonomy to make the decision. You'll gather feedback from all the other folks in the firm and then at the end of the day, make the call. But there's not some kind of formalized voting or sort of a very formal process. It's very informal and it's very kind of G, single GP led. Obviously ideally everyone is feeling good about deals you're doing as a partnership, but it is intentionally non-consensus.

• 1:11:30Logan Bartlett?

  It's an interesting balance, right? Of having our early stage team operates more in that bucket and our growth team that I'm on is much more consensus of the group. And it's interesting, right? There's trade offs on both. People generally think like, oh, that sounds good. You get. The autonomy to do it, but then the the other side of that is, well, that means you're not signing on for portfolio companies. Like someone might go do a deal that you don't want in the portfolio. And so now your website has this company that you're associated with, that you never even wanted to be a part of the portfolio potentially. Right. And so it's actually, it's an interesting balance between those two. And for whatever reason, on the growth stage, we've decided consensus has led to better outcomes.

• 1:12:14Logan Bartlett?

  And at the early stage, non consensus has led to.

• 1:12:16Speaker 01

  Kind of makes sense though, right? Like early stage investing is more intuitive and more intuition driven.

• 1:12:21Logan Bartlett?

  Yes.

• 1:12:21Speaker 01

  Late stage investing is much more tend trends to more rational, like quantitative investing. But I actually think that delineation is logical and makes sense.

• 1:12:30Logan Bartlett?

  Are there elements of, uh, we were talking, last night I said, don't, don't touch firm website or office space at all. And you and Colin kind of laughed. Do you actually want to, uh, do you actually?

• 1:12:40Speaker 01

  I'm in the classic GP trap of like, it'd be cool to build a new website.

• 1:12:43Logan Bartlett?

  Yeah.

• 1:12:43Speaker 01

  Yeah, it's relatively predictable.

• 1:12:45Logan Bartlett?

  Yeah.

• 1:12:45Speaker 01

  It'd be cool to build a new website. We'll see if it happens.

• 1:12:47Logan Bartlett?

  Listen, if you get the autonomy to go do what you want to do with Colin and the IDO background and all that stuff. If you guys have the autonomy to go do something like that, I a hundred percent would recommend it. The, my experience is everyone thinks they're an expert in websites and office space. And so inevitably it's death by a thousand cuts in trying to do those things. Because everyone has an opinion about what the design is actually should look like on both of those. What level of spend to have on both of those, right? What the, and so, yeah.

• 1:13:14Speaker 01

  I'm the consumer guy though, so.

• 1:13:16Logan Bartlett?

  Yeah, God bless you. Honestly, I, you know, back in portal stuff, you can talk to your, if they give you the autonomy to do it, I'll tell you it's a, yeah, God bless. So, um, cool. Well, thanks for doing this.

• 1:13:25Speaker 01

  Awesome. My pleasure. Thank you.