Introducing Raising Health: Fireside Chat with Sean Duffy

Big news from a16z: Bio Eats World, our sibling show from a16z Bio+Health, is now Raising Health! We’re excited to share Raising Health’s first episode here where Sean Duffy, cofounder and CEO of Omada Health, joins Vijay Pande, founding general partner of Bio + Health. Sean and Vijay discuss the building and growth of Omada, from the early days to now. As the cofounder of one of the original digital health companies, Sean has unique insight into the growth of both the digital health field and the changing venture capital environment. They also talk about the future of AI, how Omada is leveraging AI, and the challenges that might arise with using a technology in a caregiving environment. You can listen to more episodes of Raising Health here: https://link.chtbl.com/IqBoJ2By?sid=a16z11824

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

• 0:00Speaker 00

  I'm never calling ourselves a startup. We were three people and Omada was a digital health company. What needs to happen for an innovation ecosystem to flourish in a way that wasn't there before? Could it be done more effectively or efficiently? Like, look anywhere besides, you know, the US and you find ways that one could. Let's just pretend I was a hired gun CEO brought in today. What would I be doing differently? Day one, great, just joined Omada, I'm the CEO. What would be the next play? There's a reason that artificial intelligence is a buzzword and artificial empathy is not.

• 0:32Steph Smith?

  Digital health has undergone a remarkable transformation over the past decade, evolving from simple health tracking applications to an interconnected ecosystem of solutions that are totally redefining the way we prevent, treat, and manage medical conditions. And today's guest has actually witnessed this entire shift. Sean Duffy co-founded Omada Health in 2011 with the mission to enable people everywhere to live free of chronic disease. Over the last decade, Sean has actually grown Omada from zero to 1 million patients, giving him a front row seat into the evolution of the digital health industry.

• 1:13Steph Smith?

  So in today's episode, Sean sits down with A16Z Bio and Health founding partner Vijay Pandey for the inaugural episode of Raising Health, formerly known as Bioeats World. Sean and Vijay discuss the building and growth of Omada, how AI is changing the digital health landscape, and what the future of the industry will look like as Omada plants a scale from 1 to 100 million patients. And if you do like this episode, don't forget to go check out our sister podcast, Raising Health, that again, just relaunched and has some pretty incredible episodes on the docket. In the meantime, enjoy the episode.

• 1:52Speaker 02

  Hello and welcome. You know us as Bioeats World, a podcast at the intersection of bio, healthcare, and tech, but today, we're evolving to bring you Raising Health.

• 2:07Speaker 03

  Raising Health is a show for and about the builders who are leading the companies behind the bio and health innovations. In each episode, we'll continue to engage with industry leaders such as Nobel laureate Jennifer Doudna, esteemed clinician Carl June, AI pioneer Daphne Koller, and many more. Today's episode is with Sean Duffy. I'm Olivia. And I'm Chris. Sean is the co-founder and CEO of Omada Health. He is joined by Vijay Pande, founding partner of A16Z Bio and Health. Sean and Vijay celebrated the milestone of Omada achieving 1 million members, and looked back to how digital health has evolved since Sean first started raising capital for Omada more than 10 years ago.

• 2:45Speaker 00

  To be honest, I mean, the last 10 years has been, you know, that scene from Apollo 13 with like the square CO2 cartridges and round hole, where you just try to like somehow pull it off with the parts on the ship before your, you know, your oxygen depletes, which is your bank account, you know, in startup language.

• 2:58Speaker 03

  Maybe because he spent so many years in the wilderness of early digital health, Sean is an optimist about the future of AI. He shared how Omada is leveraging AI today and how the company is shaping its caregiving strategy accordingly.

• 3:10Speaker 00

  There's a reason that artificial intelligence is a buzzword and artificial empathy is not.

• 3:14Vijay Pande?

  Yeah.

• 3:15Speaker 00

  And I don't think there is any substitute for just the human accountability. And in fact, I actually think that maybe in this era of AI, it may be actually become more valuable. Human time, handcrafted goods, like proper human caregivers, that may feel more valuable. So in the same vein, you can leverage not just them, but TIP and augmented support through these models in a way that I think just will transform outcomes and, you know, impact the world.

• 3:41Speaker 03

  You're listening to Raising Health from A16Z Bio and Health.

• 3:51Vijay Pande?

  Welcome to Raising Health. The news for 2024 is that BioEats World is getting an upgrade. We're rebranding as Raising Health. And as our very first guest on Raising Health, it's my pleasure to welcome Sean Duffy, CEO and co-founder of Omada Health. So Sean, thank you so much for joining us.

• 4:08Speaker 00

  Yeah, Vijay, thank you. And thanks for, thanks for allowing me to be the first. What an honor.

• 4:12Vijay Pande?

  This starts with actually that email that you sent me, or I think it was actually maybe even a tweet that I saw that Omada hit a million patients.

• 4:19Speaker 00

  That's right.

• 4:20Vijay Pande?

  And, and so that was a huge deal. And I think that made us very sentimental about like all the whole path that you've been through and the path that we've been through together.

• 4:27Speaker 00

  Oh, for sure. No, I mean, a million, you know, we're really proud of it. I'm proud of it. I'm proud of the team. You know, I think it's a, it's a lot of people. It's big impact. And I think if you pull up, I think it is a statement on where digital health has come from and that it's possible. Admittedly feel two ways about it. I think the positives are, my gosh, it took, you know, so many years of toil to even get to the couple of thousand. But then if you compare the million to the task at hand of actually impacting epidemiology and really, you know, doing what we need to do for the business, we haven't really, really made a dent yet. Kind of told our teams, let's celebrate for 30 seconds and let's go try to get it to 10, 20, 50 and beyond.

• 5:05Vijay Pande?

  Well, that you make a great point because a million is hitting scale, but in principle, you could get to tens, hundreds of millions and even beyond. How do you view the next steps? Well, how do you get to that type of scale?

• 5:17Speaker 00

  Well, I think you're at a million, you're on strong foundations. As long as, as long as you're serving your members well and you're serving your customers well, it does become slightly easier because we're in a new state in digital health where it's a little bit more accepted. There's a little bit more trust. We now have, you know, published trials, you know, data, et cetera. So we're, we're staying hungry as possible. And I think it just shows that the, the space though has progressed a lot. It's still relatively nascent relative to having a, you know, the impact that it can and will.

• 5:43Vijay Pande?

  So before we get too far ahead of ourselves, actually, I'd love to take us back to the beginning.

• 5:47Speaker 00

  Sure.

• 5:47Vijay Pande?

  So to set the stage, I guess it's 2011, right?

• 5:50Speaker 00

  That's right.

• 5:50Vijay Pande?

  And when you started Omada, obviously there were zero patients then, you know, what did that zero to one part of the startup look like? What was that like?

• 5:57Speaker 00

  Yeah. So first just, I mean, you know, I'm here in the, you know, in recent offices, speaking with someone who probably isn't in the same camp, but I've always been pulled between technology and, and science and healthcare. And originally I thought I had to choose. I had to pick, okay, tech or healthcare. So after undergrad, even though I did my pre-med recs, I worked at Google for a couple of years. Went off to medical school. I was enrolled in Harvard's MD MBA. You know, through that came up with the idea for Omada. And really, the key reflection was, you know, a statement of where the market was at at the time. I'd be with my tech friends from Google and oh, my gosh, these like Fitbits are going to change healthcare. My medical school classmates were like, well, where are the level one evidence? What diseases are you targeting? And so the idea for Omada was to build a convergence company.

• 6:39Speaker 00

  One that didn't didn't sacrifice on technology and, you know, and design. But tried to, you know, do so in such a way where it earned earned the trust of the existing, you know, healthcare market. So that that led to the business and zero to one. It was a it was a journey. I mean, we were a little ahead of our times. I think we, when we founded the company, the world kind of didn't know what to do with us.

• 7:00Vijay Pande?

  So yeah, tell us more like they you were a tech company, but you were also a healthcare company.

• 7:04Speaker 00

  Yeah, I know. And I mean, it's in the early days of Omada, as a for instance, you'd say hi to, you know, a health plan and say, I want a contract as a provider. And like, okay, great. Well, where are your clinics? Like, we don't have any like, excuse me, where are your clinics? No, no, no, we're provider. We don't have offices. They're like, well, you can't contract with our network team.

• 7:23Vijay Pande?

  Like a hotel chain without hotels.

• 7:25Speaker 00

  Yeah, exactly. And so to be honest, I mean, the last 10 years has been, um, you know, that scene from Apollo 13 with like the square CO2 cartridges and round hole. We just try to like somehow pull it off with the parts on the ship before your, you know, your oxygen depletes, which is your bank account, you know, in startup language.

• 7:39Vijay Pande?

  Yeah. Well, and I made that analogy to the hotel company without hotels.

• 7:42Speaker 00

  Yes.

• 7:43Vijay Pande?

  Airbnb and then there's, you know,

• 7:46Speaker 00

  Totally.

• 7:46Vijay Pande?

  Fleets without cars and so on.

• 7:48Speaker 00

  Yep.

• 7:48Vijay Pande?

  So it makes sense in that zero to one time, there is probably some surprises. I don't know if there's any known surprises make sense or accounts.

• 7:56Speaker 00

  I quickly realized how hard it was to sell into enterprise healthcare. Though it was a surprise to me. Now it's not a surprise at all. And I'll kind of relay that to any tech founder. It's like the key thing was that it was not sexy to be a startup. This was this was kind of a moment in time where, you know, it's like, oh, my gosh, Zeitgeist was that 20 something founder that goes off and builds like a $10 billion company. And you'd be with these health plans. I'm like, I'm never calling ourselves a startup. We were three people and Omada was a digital health company. But you had to quickly try to, you know, frame yourself as a, you know, a measured thoughtful business in order to have, you know, success.

• 8:29Vijay Pande?

  When you were raising, you were raising probably from tech VCs primarily. And now there are examples of tech bio VCs or health tech VCs that are sort of doing both. And actually, you know, it's worth noting that actually, A60Z's investment in Omada appreciates the biofund itself. How has the sort of investor landscape changed for you?

• 8:51Speaker 00

  I mean, it's night and day different. Yeah, we were, we were the first major healthcare investment from Andreessen, but there were very few conversions funds. And you'd be on the, you know, in the healthcare kind of fun track. And they're like, well, excuse me, like, where specifically is your monopolistic IP? And it's going to be just so easy for any health plan to build software. It's software, you just don't just-

• 9:11Vijay Pande?

  That's what they're known for, right?

• 9:14Speaker 00

  And then on, you know, you go to the tech side and they're like, how about that budget item for that, you know, million dollar peer reviewed study and RCT you're thinking about running? I don't think we need that. And so, you know, and you'd work to kind of, you know, explain and-

• 9:27Vijay Pande?

  And I think that was very much sort of in our mind for launching the biofund, you know, which came after the investment in Omada, that realizing that you were a tech company and there are other tech companies that happen to be in life sciences or in healthcare, but were being built by tech companies. And that was the opportunity.

• 9:41Speaker 00

  Yeah, 100%. Yeah.

• 9:43Vijay Pande?

  Yeah. So, so any other changes that you've seen to the space? I mean, digital health, I mean, you're very much a pioneer of digital health. That's probably changed over this decade as well.

• 9:50Speaker 00

  Yeah. I mean, as we talked about the investment landscape, I think, you know, equally, you've seen drastic differences in both the go to market, you know, landscape and the talent, the talent landscape.

• 10:00Vijay Pande?

  Yeah, we should take each in turn.

• 10:01Speaker 00

  Yeah. Yeah. So, I mean, the go to market, it's very different. I think there are like more plays. There's still, there's still kind of things to be learned. I think if you use Omada as an example, we started targeting self insured employers that can turn into business with plans. And there's a little bit of emotion now that is slightly more codified now, albeit it's still very, you know, difficult, very capital intensive, but it's more of a known thing. And there's been examples-

• 10:24Vijay Pande?

  Well, so what makes it difficult?

• 10:25Speaker 00

  I mean, there's a lot of stakeholders. The buying cycles are really long. You're dealing with not just, you know, HR leaders, but consultants and their plans and their channels. And, you know, it's a very multi stakeholder process and, and still a risk adverse environment, but, but there's a little bit of like a known way to do it. And, you know, when Omada, you know, founded, that was far less so. I mean, you'd seen Castlight work towards selling into employers, but a little bit not the way that Omada was doing it. We figured out a way to bill through claims. We took our trials to the American Medical Association, got them to issue the first ever digital specific CPT code, just literally for billing infrastructure. Now there's many startups that have figured out on the back of that, you know, how to bill through claims and contract, you know, as a provider like we talked about before. So-

• 11:06Speaker 00

  The world has evolved. If I could make one statement that I think is the most, yeah, the most beneficial relative to the go to market is buyers better know how to buy.

• 11:15Vijay Pande?

  So how do you make that happen?

• 11:17Speaker 00

  Well, I mean, it's come as a commodity that you're like, well, and I remember in the early days, you know, you'd be talking to the network teams and you're like, you know, I'm imagining a world where there's actually specific individuals on the network team focused on your digital provider network.

• 11:31Vijay Pande?

  Wow.

• 11:31Speaker 00

  And you just kind of paint this future that could be, but that's not there yet. And then, and then you just kind of work your way to it. And, and a bit of his learning together with your partners, like, how do you implement, you know, what are the claim systems? And then the next one that comes in the door, they're like, oh, we've kind of done this before. And, you know, I remember one experience, it was a, it was a health plan, well, related to health plan. So I get a call from a CEO of another digital health company. She's like, hey, I just want to take five minutes to thank you. Like, well, why? And he's like, I just, we just did this deal with a health plan, kind of named it. And they sent over the papers, the contract, and they just forgot to take one model name out of it all.

• 12:08Speaker 00

  How long did that day get it close? He's like, you know, three months. I was like, well, that took us a year and a half.

• 12:12Vijay Pande?

  Yeah.

• 12:12Speaker 00

  And what that means is, all right, there are, there are plenty of ambitious, digitally forward people in enterprise healthcare. But like, there's also like laid down processes and infrastructure and ways of buying now that are pretty solidified. So it takes a little bit of time to like chip at it, morph it, you know, heat it up, make it a little bit malleable. And then, and then kind of lay new foundations on how to just ingest things like Omada.

• 12:37Vijay Pande?

  Yeah. Once you've re tempered that steel.

• 12:38Speaker 00

  That's, that's right. Exactly. That's right.

• 12:40Vijay Pande?

  Is ready to go. And then you mentioned something on the talent side too.

• 12:43Speaker 00

  This changes from everything to current state to kind of the feeder, the feeder world. And I remember in medical school, it was kind of like me and like two other people in my med school class who had an entrepreneurial bent. Now, you know, there was.

• 12:55Vijay Pande?

  Out of what? Out of like hundreds?

• 12:57Speaker 00

  Yeah, 250. And I restarted the Harvard Medical School, like entrepreneurship society. It died. It had died. It existed. There was only a society of three and then it withered on a vine and like, you know, had to give it CPR and get that thing back going. And now I think that's different. It's like, you know, today's cursive is JavaScript. There's just more tech. Fluidity coming out of the, you know, I think the life sciences.

• 13:21Vijay Pande?

  Yeah.

• 13:21Speaker 00

  Which speaks to more talent that can appreciate both worlds, which speaks to cultures that can build the best of both worlds together, which speaks to it just being easier to build a convergence business.

• 13:31Vijay Pande?

  Yeah, I'd love to see this. I don't know if a graph of time and the fraction of med school students who have taken a CS course.

• 13:39Speaker 00

  Yeah, no, you're right.

• 13:40Vijay Pande?

  And it probably is just like growing dramatically.

• 13:42Speaker 00

  It's growing dramatically.

• 13:43Vijay Pande?

  Well, it's key because like if you really weren't sort of sophisticated on the tech side, you wouldn't be able to handle that side of it. It seems like at least a part of the problem early on was there were just so few people that were conversant in both.

• 13:55Speaker 00

  And it's, and it's funny, it's both like a, a vision issue that's super important, but it's also like a hiring issue.

• 14:00Vijay Pande?

  Yeah.

• 14:01Speaker 00

  Cause you need, you know, at the end of the day, like you need to be able to pull in incredible skillsets in your organization. And if, if the language you're using like doesn't communicate that you understand the skills that that person is bringing to bear, and you can't just like over a beer, like riff on a specific thing in their world, they're not going to join. So I mean, that's, that's one of the reasons why the legacy health services companies have had trouble, you know, hiring talent. They'll, they'll put out a role for like, you know, IT engineer.

• 14:26Vijay Pande?

  Mm hmm.

• 14:27Speaker 00

  And, you know, and it's your, in the language and just the appreciation of the skillsets like matter. And it's hard to get that if you don't, if you're, if you're not fluent.

• 14:34Vijay Pande?

  And the top talent are not going to want to.

• 14:36Speaker 00

  They're not going to do it. Yeah.

• 14:37Vijay Pande?

  They're not going to do that.

• 14:38Speaker 00

  Yeah. And the same, you know, the same is on the healthcare side. Like if you're, I mean, if you're just an amazing tech company, you're trying to hire a great healthcare talent, they're like, they don't know. They don't know what they're doing.

• 14:48Vijay Pande?

  Well, how's it going now? Like, how's it hiring sort of the latest crop like on the ML AI side?

• 14:53Speaker 00

  Well, you know, so much easier because it's specific to that. What's neat is we have just an awesome data corpus. At the end of the day, like, you know, these models are more or less commodities. It's what feeds them. That's important. And um, Omada has operated against our users' preferences, which is asynchronous messaging in large part. So, you know, about 25 million messages that have flown back and forth between our care teams and our members, maybe the richest, you know, data asynchronous text data corpus in metabolic care and what, you know, L L Ms are kind of, they came at a nice time for us.

• 15:24Vijay Pande?

  It's a candy store for any kid would love.

• 15:26Speaker 00

  That's right. So, so that, that talent side is fine. But the, the neat thing relative to the, the last kind of couple of minutes of conversation is. Now there's a crop of folks that have worked in tech and healthcare. Maybe they're at a startup that tried to do both, but you know, didn't work out. Or maybe they're a company that has scaled and they want to, you know, do something different. So there are, there's, there's just actually a richer, you know, crop of talent to pull from. It's no longer, you know, everyone trying to steal from Amada for people that are experienced with both. It's kind of a broader set, which is, which is great. I think it's a, it's an amazing thing.

• 15:57Vijay Pande?

  It's a real ecosystem. Well, also 10 years changes all of us. How have you changed?

• 16:02Speaker 00

  Oh my gosh. I mean, yeah, I mean, I was extremely green when I founded Amada. I was, um, I was in an MD MBA program, but hadn't done any of the business side and I had never hired anybody. I didn't have any managerial experience. I, um, I didn't know what a venture capitalist was. You know, my goal has always been each year, I want to look back at last year's Sean and just feel a little bit embarrassed.

• 16:21Vijay Pande?

  Wow. Oh, that's a really unique way to frame it. But embarrassed, is that being hard on yourself?

• 16:25Speaker 00

  I think it's purposely, you know, hard because it's like, it's the truth. So I think I have been just a little bit embarrassed about every, every proceeding Sean. So the Sean now is very, very different than the, the vintage, the vintage 2011 Sean. And I mean, you know, you've been on the board a number of years. I'm sure you've seen it too.

• 16:41Vijay Pande?

  Yeah. Yeah. Well, actually now I think about it after you said that, the thing that most people get embarrassed about is like when you watch yourself on video or when you listen to yourself, it's actually the fact, it's getting embarrassed is not unusual, is the fact that you're willing to, to look at that and look at it in its face. I think that is really takes bravery and is, most people don't do that.

• 17:02Speaker 00

  I think a way to think through, a way that I think through it is, is to think through decisions or mistakes. Like would, would, would that have happened with today's, you know, Sean, that misstep that we made, would today's Sean have, you know, fallen into that trap? And I think, and it's a good, it's, I think it's a good mindset. I think similarly, you know, I was always encourage entrepreneurs to like, especially founders, um, try to purposely decouple yourself from the founder mind and the CEO mind.

• 17:27Vijay Pande?

  How would you differentiate those two?

• 17:29Speaker 00

  In fact, sometimes I purposely ask, like, let's just pretend I was a hired gun CEO brought in today. Like, what would I be doing differently? Day one, great, just joined Omada, I'm the CEO. Like, what would be the next play? And then you can similarly ask, what do you think the the organization needs from its CEO? Like, next year?

• 17:49Vijay Pande?

  Yeah.

• 17:50Speaker 00

  And beyond? And then that like becomes your L and D plan.

• 17:53Vijay Pande?

  Also, organizations need sometimes things from their founders, too, which are unique from what they need from their CEOs, presumably.

• 17:58Speaker 00

  That's, yeah, that's right. You could reverse it, too. You could reverse it, too. And there have been things, I mean, you know, as the org grows, you have to, even as a founder, especially, learn how to like work with your organization, because your teams, you know, you have so many bright people and they need to like find the energy around a direction and you have to set the strategy. But, you know, there are certain things that, you know, I think is very helpful with kind of founder orientation, like you you almost, that optimism doesn't always tend to like carry forward with scale. And if there's like new things in the market, like for us, this whole GLP-1 landscape, or even the, you know, the generative AI landscape, those new things, like I view it as my job to like just press the organization into seizing those.

• 18:38Vijay Pande?

  Yeah, to really sort of almost keep that spirit that you had when you were like 10 people or 30 people. But now to do that at scale.

• 18:44Speaker 00

  You do it at scale, exactly.

• 18:45Vijay Pande?

  Any advice you'd give to Sean? To 2000 Sean?

• 18:48Speaker 00

  That's a good question. I mean, all sorts of tactical stuff.

• 18:50Vijay Pande?

  Yeah, yeah.

• 18:51Speaker 00

  My number one advice to, not just healthcare entrepreneurs, but on the enterprise side, is put a ton of thought in how you price and package, kind of what you've, what you're buying. That has just so much path dependency.

• 19:03Vijay Pande?

  Yeah, and that sounds like a detail, but that's like the core future of your business, in a sense.

• 19:08Speaker 00

  Yeah, no, it's funny. It's never the strategic stuff that tends to matter as much as the tactical things.

• 19:13Vijay Pande?

  Yeah.

• 19:14Speaker 00

  And some of them you can read about, and others like, you know, it's a little on the job training.

• 19:17Vijay Pande?

  Well, especially if you're creating a field, then there probably wasn't on the job training for digital health.

• 19:22Speaker 00

  Yeah, yeah, it was newer, yeah, exactly.

• 19:24Vijay Pande?

  Yeah. Well, okay, so let's take us to today. So, and actually, you brought up two great topics. I want to hit AI and GLPs.

• 19:31Speaker 00

  Yep.

• 19:31Vijay Pande?

  Let's start with the AI side. So you already mentioned that Omada has this huge corpus. You know, what's your take for how AI is going to change Omada? Where do you go with that? Where do you go from here?

• 19:42Speaker 00

  Yeah, I mean, the whole team and the engineering team is just giddy with it. And there's yesterday's like AI, which we've been doing, you know, build models and ML models and, you know, recommend resources.

• 19:49Vijay Pande?

  Almost like small ML, small AI.

• 19:51Speaker 00

  Yeah.

• 19:52Vijay Pande?

  Versus a large foundation model.

• 19:53Speaker 00

  Yeah, exactly, versus kind of the generative side. I mean, there's hundreds of ideas on how to best leverage our data, so we're still learning and. You know, and growing, but to give you just some specific examples right now, the you know, one thing we launched is the ability for our care teams to just see instantly summarized views of eating history of their members. So what we found is like, if they wanted to talk about food, we had a very beautifully structured like view where they could scroll through the meal patterns, looking at the eating patterns, but they were spending about six minutes getting the context to be able to craft a message. And so one quick hit was have the model do that. And then they can take that and craft it and craft a note to the member that allows them to just feel more insightful, more

• 20:37Speaker 00

  precise and likely more impactful and more efficient. It's like everybody wins in that world.

• 20:41Vijay Pande?

  And maybe even more empathetic sometimes.

• 20:43Speaker 00

  And more, yeah, absolutely. More empathetic. There's like step one for a motto, which is, all right, of these hundred ideas, what are the ones where you have high impact, you know, low regulatory risk because there are considerations that you need to think through here. We're trying to strike that balance of ensuring that, you know, at the end of the day, like we, people feel the compassion of the omadas.

• 21:03Vijay Pande?

  Yeah.

• 21:04Speaker 00

  You know, services as well as the intelligence where, you know, you've got to have the humanness shine through. And so for us right now, we built our care team platform homegrown by scratch. So it's about helping to enable our care teams to be authentic humans, to come across that way, do it more efficiently and per your point. And, you know, many instances with a little tee up, perhaps more empathetically.

• 21:25Vijay Pande?

  Well, it's really interesting because you sort of alluded to the history of virtual based care where not having brick and mortar was like a kind of crazy, right?

• 21:33Speaker 00

  Yep.

• 21:33Vijay Pande?

  And now that's actually, especially post COVID, it's actually been quite routine. Actually, many of us prefer to some degree.

• 21:39Speaker 00

  Yeah.

• 21:39Vijay Pande?

  It has its own conveniences and so on.

• 21:41Speaker 00

  Yep.

• 21:42Vijay Pande?

  Now you're almost like a different type of virtual because now you're even like the caregivers themselves.

• 21:48Speaker 00

  Yeah, it's funny.

• 21:49Vijay Pande?

  How far does that go? Does it, are you always going to have caregivers and you're just massively scaling them? Take us five years into the future, like maybe even 10 years in the future, like how far does this go?

• 21:59Speaker 00

  I mean, it's going to be balanced. I think the, you know, you'll remember in peak COVID, it was like virtual care will do everything. And I literally, I felt like the crazy one being like, guys, like biopsies still need to be done.

• 22:08Vijay Pande?

  Surgeries.

• 22:09Speaker 00

  Smalls need to be removed. So it's, and it'll be the same, the same truth here. I do, there's a reason that artificial intelligence is a buzzword and artificial empathy is not.

• 22:18Vijay Pande?

  Yeah.

• 22:19Speaker 00

  And I, and I don't think there is any substitute for just the, the human accountability. And in fact, I actually think that maybe. In this era of AI, it may be actually come more valuable, like human time, you know, handcrafted goods, like, you know, proper human caregivers, that may feel more valuable. So in the same vein, you can leverage not just them, but tee up an augmented support, you know, through these models in a way that I think just will transform outcomes and, you know, impact the, impact the world.

• 22:47Vijay Pande?

  Yeah. And, you know, we talked about scaling and we're talking about the million members. Maybe this is how you get there.

• 22:52Speaker 00

  Yeah, it helps. Yeah, no question.

• 22:54Vijay Pande?

  So it's such a crazy time because we've got AI.

• 22:57Speaker 00

  Yep.

• 22:58Vijay Pande?

  Like doing this insane thing. And then generally unrelated to AI, but very related to Omada is GLP-1s. You know, like, how does that play into what you're doing in Omada?

• 23:09Speaker 00

  Yeah, I mean, kind of, I just feel giddy with what's happening here because you've got this two parallel tracks, like just extraordinary technology innovation, extraordinary life sciences innovation, like two different silos. And I mean, similar to like the fact that you're a convergence investor, Omada's a convergence company, they just hit each other.

• 23:25Vijay Pande?

  Yeah.

• 23:25Speaker 00

  Like right now, you know, right at the moment. And I think they're both, you know, really have knocked on the doors, you know, of, of Omada as a skilled provider that, you know, has not only the data for the generative AI side, but also just enough scale to, and enough clinical credibility to capture the opportunity in GLP-1s. And, um, you know, the way I look at them is incredible, I mean, incredible breakthrough, like, you know, humanity, we should, we should pat ourselves on the back that these exist.

• 23:49Vijay Pande?

  Yes.

• 23:50Speaker 00

  Them, you know, in large part, especially since the, the data has borne out in type two diabetes, I think they'll, you know, generally considered a very safe medicine. And hopefully that continues to, to be the viewpoint. The challenge is GLPs are great at, at quantity.

• 24:03Vijay Pande?

  What do you mean quantity?

• 24:04Speaker 00

  A quantity of food. So you can and will lose weight on a GLP without changing anything about the, the, the quality of your calories because it will juice the quantity.

• 24:17Vijay Pande?

  You just will lose appetite.

• 24:18Speaker 00

  That's right. You'll lose appetite. So you're, you know, you're, you're dropping your caloric intake, but eating exactly the same foods. The, the challenge with that is most patients. Tend to not want to be on these medicines for life, even though, I mean, you will find the KOLs that argue that that's the right clinical point of view. Right now, that's counter to the patient preference. And then the cost profile is making that for the employers that are covering GLPs for obesity, you know, a challenge as well. There are very few that, you know, are thinking, well, shoot, I'll cover this for life. So you have this issue where, okay, you've got quantity. Well, what does the quality? And that's where Omada thinks we can really differentiate. If GLPs are quantity,

• 24:56Vijay Pande?

  Right.

• 24:57Speaker 00

  Omada's quality, because you can use these as almost a behavioral catalyst, help reframe someone's psychology around, I can lose weight. This is amazing. And then on that, you're like, well, what are your goals relative to the medicines?

• 25:10Vijay Pande?

  Let's do it in a healthy way.

• 25:11Speaker 00

  Exactly. Well, let's take advantage of this therapeutic window.

• 25:14Vijay Pande?

  Yeah.

• 25:15Speaker 00

  Like, let's figure out some new meals that you can just start to incorporate. Great, you're losing weight. What are some new activities that you could do now, you know, that you couldn't do otherwise? And then Omada can address some of the clinical, you know, complexities here. I mean, I think that the next issue that is already starting to bubble up is sarcopenia. I mean, you're, you know, because what's happening with these meds, you'll, you'll lose fat and muscle mass. If you do regain, you're going to regain only fat. So there's, there's always complex body comp questions that are going to require new like, you know, physical activity protocols on top and recommendations and diet and intake to make sure that you're addressing this, this kind of truth about weight loss generally, not specific to the GLP ones.

• 25:51Vijay Pande?

  Yeah, especially if your body muscle mass goes down, then your basal metabolic rate goes down.

• 25:56Speaker 00

  It makes it more likely you'll regain, you'll feel hunger. Exactly. Exactly.

• 26:00Vijay Pande?

  Yeah. And if you're only eating, I don't know, was it 1,500 calories, 1,000 calories with these things, whatever small number it is, then every calorie counts, right?

• 26:08Speaker 00

  Exactly. You know, I mean, Omada's made some decisions that we're happy about. You know, the first is to launch this like GLP-1 care track.

• 26:15Vijay Pande?

  Yeah.

• 26:16Speaker 00

  You know, we've chosen to not initiate people on the medicines, but just, you know, support them regardless of where the script came from.

• 26:22Vijay Pande?

  Yeah.

• 26:22Speaker 00

  So when we work with our partners who are covering GLPs from obesity, for obesity, it's creating a little bit of an all roads lead to Omada strategy. We're like, look for, for these to be covered. We want to make sure that you have the life cell support alongside.

• 26:33Vijay Pande?

  Given all this that's going on, where do you think? This gets us to like, what does digital health look like, you know, five, 10 years from now?

• 26:39Speaker 00

  Well, yeah, I mean, for Omada, I hope these innovations help us do, you know, what would always has kind of been the most important, which is to have tomorrow's, you know, epidemiologists notice like bend in disease curve and have us be a part in that. It's been this weird, weird kind of thing where I feel like every couple of years you see this like report on, you know, diabetes measures, et cetera. And you're like, wow, the nation's gone nowhere.

• 26:59Vijay Pande?

  Was that really true? Have we really gone nowhere? Or we've gone worse than nowhere?

• 27:02Speaker 00

  It's funny, in fact, it's been in a worse direction. We're on a poor trajectory as a country, to say the least. So, now, you know, I think these innovations help us hit, you know, hit a level of scale that matters. And this is the most acute labor crisis we ever had in the U.S.

• 27:15Vijay Pande?

  Yeah, on the provider's.

• 27:16Speaker 00

  On the provider's side. You talk to, you talk to the average provider and the C-suite, like, well, what are your challenges? They list, you know, 10, one through eight are labor. You know, we don't have enough practitioners.

• 27:28Vijay Pande?

  So not enough doctors and not enough nurses.

• 27:30Speaker 00

  Yeah, and I mean, you're not, we're not going to have 200,000, you know, primary care clinicians like show up on a tanker. So, so that, what does that mean? A, like even outside of what we do, you have to find technologies that give more leverage to every credential, like inter L L Ms. You know, B, what you need is to provide care differently. Like, there is no way that a decade from now, the primary care clinician is going to be point on something like longitudinal diabetes care. So Omada can come in as a between-visit care provider, as an adjunct to primary care and a partner, and make it such that really what you need to do is route the person to us and we'll handle that between-visit care and, and take that off your plate, which, which I think is going to be required.

• 28:10Vijay Pande?

  Yeah, I mean, it's amazing that scaling goes from an aspiration almost to an obligation.

• 28:15Speaker 00

  There is a silver lining. I mean, this is, this is just an extraordinary crisis, you know, of labor. What is happening is the everyday provider recognizes that there's not, you know, there's not a solvent. And I mean, you've had providers that like literally, they're like, well, shoot, we've tried almost everything. They've bought nursing schools.

• 28:30Vijay Pande?

  Right, right.

• 28:32Speaker 00

  Gobbled up nursing schools to try to, you know, build, but, but there's nothing that's going to be enough. So it's like, we have to deliver care differently. What does that look like? Who do we work with to do it?

• 28:40Vijay Pande?

  So the, the shortage is one thing. Then the other sort of crisis that we all know about is cost.

• 28:44Speaker 00

  Yep.

• 28:45Vijay Pande?

  So presumably this plays into that as well.

• 28:47Speaker 00

  Oh, yeah, precisely. And oh, my gosh, if we just kept the percent of our GDP spent on healthcare constant, but just use the dollars better, like, we've got an embarrassment of riches to put forward, you know, to the country here relative to the, it's not like, oh, could it be done more effectively or efficiently? Like, Look anywhere besides, you know, the US and you find, you find ways that you, that one could so. But, but you kind of need a rock thrown into the lake.

• 29:12Vijay Pande?

  Yeah.

• 29:12Speaker 00

  And, and there are enough like pressure points there that I do think that the silver lining will be it's, it's, it's kind of hit the fulcrum or it's reinventing the system.

• 29:19Vijay Pande?

  Let's paint the picture. So like you're dealing with something which is one of the biggest crises for America, like prediabetes, type 2 diabetes, um, weight and it's comorbidities. Hypertension or musculoskeletal, all the comorbidities. So that's, the problem is very clear. And then on top of that, you have the provider problem and the cost problem.

• 29:37Speaker 00

  Yep.

• 29:38Vijay Pande?

  You put in AI and GLPs, it's almost like this wonderful, almost Deus ex machina, like to the rescue.

• 29:45Speaker 00

  And, and no technology to the rescue. It's literally, I'm like, in absence of that, plus like, you know, the model layers to tie the room together.

• 29:52Vijay Pande?

  Yeah.

• 29:53Speaker 00

  What happens? It's, you know what I mean? It's like.

• 29:55Vijay Pande?

  Well, well, but then so then what keeps us from the future we're describing? Like what's in our way?

• 30:00Speaker 00

  I think it's coming. I genuinely do. I feel more optimistic, you know, than ever. In general, I don't think there's an overnight success. I think that's especially true.

• 30:07Vijay Pande?

  Yeah.

• 30:08Speaker 00

  In, in healthcare and building a healthcare business, but I, I think it's coming. I mean, I.

• 30:11Vijay Pande?

  Well, what do you think about regulations in this space?

• 30:13Speaker 00

  I mean, that's one of the reasons why it takes a little bit longer.

• 30:16Vijay Pande?

  Especially I'd say additional regulations for AI. Do you see a role for that or?

• 30:19Speaker 00

  Oh, oh, uh, yeah, that's a good question. I mean, I think in right now, the, the, the general basis on how to use generative AI says like, look, guide a licensed practitioner. So, you know, we're at that world where you self-driving is analogy, like it's driver assisted, like you can turn it on, we got to touch the wheel.

• 30:34Vijay Pande?

  And there's already Dr. Google in play, you know?

• 30:37Speaker 00

  Yeah.

• 30:37Vijay Pande?

  And so this is amplifying that, but it's still a practitioner's in play.

• 30:40Speaker 00

  Yeah, exactly.

• 30:42Vijay Pande?

  And practitioners have regulatory bodies that govern their, their work and so on.

• 30:47Speaker 00

  I think there, there will be ways to, you know, create kind of targeted, you know, regulatory like pathways for hyper-specific things that have low patient risk.

• 30:55Vijay Pande?

  No other obstacles, it feels like, the way you're talking feels like it's inevitable.

• 31:00Speaker 00

  I mean, I do, I actually do, you know, I do think it's inevitable. Again, I mean, it speaks to the three things that have changed. What, what needs to happen for an innovation ecosystem to flourish, flourish in a way that wasn't, wasn't there before. You need, you need new capital partners. There's more folks that understand, you know, tech and healthcare and there, and there's some proof points that you can make money here. I mean, you know, there, you need that to create kind of a healthy capital environment. And then secondly, you need like more go to market motion models that make it just a little bit easier for the next person.

• 31:28Vijay Pande?

  Right.

• 31:28Speaker 00

  Right. And that's, that's critical. And then, and then you need the people. And so, you know, I think you've got, you've got the three of those, you know, you've got macro pressures that are requiring not, you know, innovation is not a, not a vitamin, it's a painkiller, you know, at this point. So I'm very optimistic. I, you know, again, I think we're still at the beginning. I think the next, you know, the next two decades are just going to be, you know, extraordinary and we need to make it happen.

• 31:48Vijay Pande?

  Well, it's, it's amazing because not only have you co-founded a model, it basically helped co-found this whole ecosystem, right? I mean, that's what needed to be done.

• 31:55Speaker 00

  Very generous. And thank you for being a partner and Andreessen for being a partner along the way.

• 31:59Vijay Pande?

  Oh, no, it's our pleasure. It's our pleasure. Okay. So obviously you think a ton about healthcare. Like what do you do?

• 32:03Speaker 00

  So I have two kids. I have a four year old and a two year old. A gym called Lifetime opened up near my home and I begged, I would have paid any price to sign up because they have childcare for two and a half hours.

• 32:14Vijay Pande?

  Oh, wow. It's a deal you can't refuse.

• 32:17Speaker 00

  All for you can't refuse. I'm going to be the best shape of my life because, um, you know, I mean, you're busy as an entrepreneur and childcare is so precious and the kids love it. So we, um, we call it the family fun center.

• 32:25Vijay Pande?

  Excellent.

• 32:26Speaker 00

  Not Lifetime Gym, but we, um, uh, yeah, I got a push notification from Lifetime that said, like, congratulations on your, you know, your, your 25th visit.

• 32:34Vijay Pande?

  Oh, wow.

• 32:34Speaker 00

  And I looked up how long it had been open. It was like 45 days.

• 32:39Vijay Pande?

  That's excellent. Excellent.

• 32:40Speaker 00

  It's funny. I try to be like, similar to a model. A model is pragmatic relative to, you know, what fits into your world and what best kind of, you know, fits into your life and, um, tend to not be overly zealous one way or the other, but just try to, you know, abide by the healthy eating and food habits.

• 32:55Vijay Pande?

  That makes sense. Well, thank you so much for joining us on Raising Health.

• 32:58Speaker 00

  You, you got it. And thank you for allowing me to be the, the first guest on this new instantiation.

• 33:03Vijay Pande?

  Thank you.

• 33:03Speaker 00

  All right. Take care, everybody.

• 33:13Speaker 03

  Thank you for listening to Raising Health. Raising Health is hosted and produced by me, Chris Tatiassian,

• 33:18Speaker 02

  and me, Olivia Webb,

• 33:19Speaker 03

  with the help of the bio and health team at A16Z. The show is edited by Phil Hegseth.

• 33:24Speaker 02

  If you want to suggest topics for future shows, you can reach us at [email protected]. Finally, please rate and subscribe to our show.

• 33:34Speaker 02

  The content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see A16Z.com/disclosures.

• 34:02Steph Smith?

  Hey, this is Step again. Just as a reminder, if you did enjoy this episode from our sister podcast, Raising Health, there is a lot more where that came from. New episodes just like this drop every Tuesday with guests just like Sean, or AI experts like Daphne Koller, Aviv Raghav, and Andrew Ng. So, go follow Raising Health wherever you get your podcasts.