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Today on This Week Health.

I'm really convinced that there are gonna be a couple of health systems that figure out. The game is to be the living laboratory that you have, what they need. It's really not even about investing. Corporate dollars. It's really about creating some capability and then investing that capability in these companies.

Welcome to This Week Health Community. This is TownHall a show hosted by leaders on the front lines with interviews of people making things happen in healthcare with technology. My name is Bill Russell, the creator of This Week Health, a set of channels designed to amplify great thinking to propel healthcare forward. We want to thank our show sponsors Olive, Rubrik, Trellix, Medigate and F5 in partnership with Sirius Healthcare for investing in our mission to develop the next generation of health leaders. Now onto our show.

Hello, and welcome to this episode of town hall. I'm Dr. Mark Weissman, a CIO and a CMIO, and I have a special guest with us today, Dr. David Lev. So David and I worked together at Sentara healthcare for about a decade together, and he has had an incredible journey. And we're gonna be talking a little bit about the entrepreneurial venture space and Dave, welcome to the show.

Thanks, mark. It's good to connect with you again. We did work together, but we have to tell the audience, it was like the Pleo scene era. I think , there was a paper involved. There was paper involved. Exactly. That era. So yeah. Was the age of carbon instead of electrons. So

yes, absolutely. Well, Dave uh, you have such an interesting background.

If you would briefly tell us about flow, tell us about how you got to flow. And then we're gonna talk more about some of the venture stuff you're doing.

Sure. Well, mark, I often describe myself as the forest Gump of healthcare. I feel like most of my career I've just like wandered into the frame and.

There were these really cool, smart people doing stuff, and they let me hang out. And the story of me joining flow is really just another chapter in the adventures of forest Gump. I had been working at a startup that I had co-founded for about six years and had reached a point where I was ready to do something D.

And I reached out to a friend of mine Dr. Eric Edwards, who was a very successful entrepreneur in the Richmond area. And I really just reached out to Eric to start networking because what I've learned over the years is. Who, you know, and how you network is as important, if not more important than what you know.

I mean, you need to have some subject matter expertise, but if you're trying to move the needle or you're trying to advance your career a lot of times that comes through relationships. And so I honestly, I was just really getting started. Turned on the networking and, and I reached out to Eric for what I thought was gonna be introductions.

And about halfway through that call, he asked me if I'd be interested in coming to work with him at flow. And I didn't really know much about what they were doing. That was in, I think September and November 1st I went to work for them full time. So my role here is I am the chief medical and information officer and it is truly a mashup of the traditional chief medical officer role.

And the CIO role. And so I have all the information systems, cybersecurity as well as many of the clinical aspects of a pharmaceutical startup and manufacturer the part of what's been really fascinating. And I suppose we'll get a little deeper into this is it has taken me into the world of cyber physical systems.

Not something we deal a lot with in sort of traditional provider side of healthcare. Mm-hmm , it's been fascinating and a real education for me.

You were the CMIO at Cleveland clinic for some period of time back in your ancient pest. And. How did that role influence your next leap into the entrepreneurial space?

Cause I know the story, but I think it's fascinating for others to hear how to transition from CMIO to serial entrepreneurial.

Yeah, it's, really interesting. And the experience at Cleveland clinic was as wonderful and as awful as you might imagine, it would be so incredible opportunity with truly talented world class individuals and an amazing organization.

But some world class challenges as well. And I was really fortunate. I came in as their first CMIO at a time of transition. And so I had. A very large team and essentially responsibility for the clinical information systems worldwide, and which many CMIOs can kind of relate to.

But Cleveland clinic also had a tradition of entrepreneurship and innovation and venture investing with Cleveland clinic innovations. And historically that focus was really more on medical devices. And those sorts of things, the inventors were the physicians, of course you, and I know.

Healthcare technology sort of came on, in a blazing sort of fashion in the last 10 or 15 years and has emerged as a major investment opportunity. So the clinic was kind of ramping up that health tech part and me and a couple of my colleagues happened to be standing in the right place at the right moment.

And so effectively we served as the CMIOs for. Cleveland clinic ventures as well. So that gave me exposure to that whole entrepreneurial ecosystem, that mindset and candidly, it was my introduction to a number of different venture investors at different stages. And happily some of those relationships survived my time at Cleveland clinic and continue to this day and continue to provide great satisfaction to me and hopefully some value back to them as well.

Awesome. Well, let's talk a little bit about your current role at 7 57 angels, which for those who don't know, 7 57 is the Virginia Beach area code. Yeah. And there is an investment community there that I can, it's pretty strong. I mean, it's, it's. Wonderful. What they do for the community. Why don't I shut up and let you talk about what you do for them.

Yeah. And what 7, 5 70.

Well, again, mark, it's another forest gum story. Cuz I wandered into the frame after some other really bright, talented, hard working folks had come up with vision and launched this thing. The basic idea here is that if you. Entrepreneurship to drive your regional economy, you have to create an ecosystem.

It takes startup companies. It takes investors, it takes mentors and accelerators. It takes support from other local businesses. And yet, and on the investment side, ideally. You create a series of investors because people invest at different stages of companies. They tend to migrate into an area they're comfortable in.

And so, you really need almost different organizations or collaborations to ensure that an entrepreneur is gonna be, have access to funding throughout the life cycle of their company. So the angels was started by a couple of local folks. the idea was, this is a critical piece of building out that kind of a, ecosystem.

It's a good place to start. And that they felt that there were enough qualified investors in the region that we actually could put together a kind of investment club. So to be really clear, this is not a traditional fund. It's a club that folks paid. Dues to and our staff sources, potential investments.

They do the vetting. We present that to our members. And then in some cases we will like facilitate the formation of an LLC for as an investment vehicle, that sort of thing. It's been remarkably successful organizations, about 10 years old. It is a top 10 angel group in the United States, which is really pretty remarkable.

Again, take zero credit for that. I showed up when they were already successful. So I serve as the board chair and really the focus of our work right now is at like all good entrepreneurs. We built this thing as a startup. And now we're trying to transition into the next stage of growth and to make.

Even, bigger and more Bulletproof and more sustainable over time. We work in collaboration with 7 57 accelerate, which is a local accelerator. And we're trying to participate in some of the other regional and statewide ecosystems and continue to syndicate deals with other angel groups and other funds.

And, and the like, it's been. Really a terrific experience. And for me personally, it's been a chance to meet a lot of really interesting people in the Norfolk, Virginia Beach area. So that's the story and maybe not quite a nutshell, but close to one.

So it's not just a healthcare and

that's right.

And this town hall tends to deal with healthcare. And it really things, but I did see some of those on there. How does 757 Angels or any investor add value to that healthcare it space and what are they bringing to the table? These people who is it just dollars or is it knowledge? Is it connections? What do they bring?

Yeah, terrific set of questions and you're right. It's a, in terms of. The types of sectors that we'll invest in, we're pretty agnostic. What we're more interested in are, really promising companies that are gonna generate jobs in the region.

It turns out that these days, I'm gonna guess a little bit, probably 40-50 of what we see come through the deal funnel is somehow healthcare related. Almost all of that is tech or tech enabled services of some kind. And I think that just reflects what's happened in healthcare and the investment opportunities, in general, over the last 10 years in terms of what.

The investors bring I'm gonna kind of answer this more from the entrepreneur's perspective. so when I'm on that side of the table and I'm looking to raise money, I'm looking for what I call smart money. Anybody can write a check the best investors can write a check, but they can also provide advice.

And they will bring their network so they can make introductions those sorts of things as well. And so the best fit are typically folks who can bring something other than just their wallet to this party. Having said that. We definitely have investors that they'll pay attention, they'll go through the vetting and decide, this is a bet I wanna make.

And then they're pretty passive after that. Which is also okay. And entrepreneurs will have different perspectives on that. Sometimes they like to just take your money and they're happy if you'll go away. others really seek to leverage all the added value they can out of their investors.

So there's, a lot of hospitals across the country with CIOs. Yeah. That aren't Cleveland clinic. They're not gonna have an innovation center with a physical structure that yeah. Helps facilitate this. They're more community hospital based perhaps, or local or regional players. Yeah. How do they get going in innovation without starting necessarily a fund internally? Who do they partner with? How do they connect to other angel funds or other investing funds? What's your advice for the hospital CIO that wants to play in the innovation space? But is not likely to get a $10 million check to go off and start. something

Yeah. So I'm gonna give two answers. I'm gonna give the small ball answer and then the big ball answer.

Okay. So I think the small ball answer is just like any other investing. You should invest in things, you know. and so my advice to CIOs and CMIOs and others, innovation officers, and the like is look for solutions to problems that you actually care about right now. And we could talk about what some of those might be.

But I don't think it's wise to go make these really speculative things. Like I'm gonna go bet that this crazy AI thing is gonna pay off in five years. That's not the type of investing that has a return for the typical health system, but maybe there's a small company that's got an Interesting and elegant solution to a problem that you care about. And now there's an opportunity to be a strategic partner with them, and it may require a little bit of money, but probably as much as that, what they want is. Access, they want your expertise. They want your guidance. They want a place to kind of refine whatever it is they're developing.

And then they would like for you to be a customer who will give testimony so that it helps them scale up and sell. So if I had $5 instead of 10 million, that's what I would do. And, you know, And then obviously I, gotta. Decide how much risk I'm comfortable with if I'm a crazy man like me, I'll probably take a big risk on some real important problem.

Folks that have less risk tolerance would be wiser. And maybe it's a second tier problem and they can afford to fail if they fail, but maybe. This thing will really take off and be a hit. The trick to the small ball approach is, the typical wisdom in venture investing is you need to make about 10 investments because nine of 'em are gonna fail.

And one of them's gonna be wildly successful. So kind of figuring out what's your quote unquote portfolio strategy. May be a challenge. In that approach. So that's the small ball approach that, you know, sort of one by one, one by one. Does that make sense?

Yeah, absolutely. Absolutely. Tell me about the large ball it's

so, so here's the large ball thing and like I almost don't wanna talk about this cuz I think it's a billion dollar idea and anybody could do it, but I've yet to see anybody do it successfully.

So what most of these health tech companies and services companies need. Is a living lab. Candidly, they're often founded by subject matter experts who like, they really know their subject matter area, but they're not experts in business. They're not experts in entrepreneurship and, in scaling and those sorts of things, or it might be the reverse, they might be.

Previously successful entrepreneurs that have now come into healthcare and they're trying to figure out healthcare. I'm really convinced that there are gonna be a couple of health systems that figure out. The game is to be the tested, to be the living laboratory that you have, what they need.

You have patients, you have providers, you have administrators, you're delivering care in all different kinds of venues and what a lot of these companies need is access to that. So they can learn and refine. And I think there's an opportunity there for that to be your, if you will contribution to them and in return, you should get some equity in the company.

There should be an upside. So it's really not even about investing. Corporate dollars. It's really about creating some capability and then investing that capability in these companies. And to me, that's a way to take the small ball thing and turn it into something that's much bigger. And if it works now, you've generated new revenue stream for your company, which will make you a hero mm-hmm for operations.

And it probably allows you. Maintain or even scale that innovation work

now there's switch. Right? I mean, so as the CIO, I have a finite budget. I'm gonna have finite resources and we're gonna go tell operations. You have to wait, cuz we're gonna go do this other entrepreneurial thing over here. We're gonna pull some resources off or are we duplicating our resources so that we can have that flexibility, agility and an entrepreneur.

They're not gonna say. We have to figure out our priority and you're not there. How does that really work?

Yeah. Well, I think the art there is it should be something operations cares about. So to me, the ideal would be you go to your buddy. So I'm gonna use what's one. That's very real for me right now.

I'm really interested in inventory management and pharmacies right now. And it's highly balkanized. There's no interoperability there yet. So I would go to my buddy, the director of pharmacy and say, I know you're really struggling for a real-time view into your inventory. What have you got?

And how's it distributed across the physical footprint and I've come across this little company. It's eight guys. There are two pharmacists that really care about this problem. I think they've built this really neat little elegant solution, but they need a place to kind of test it and refine it. And they're gonna need a reputable health system like us to stand up next to 'em later and say, yeah, this thing works.

We endorse it. What do you think? Are you willing to take a chance on this with. That to me is the right engagement strategy. And then we together, we engage this little startup company and we put 'em through their paces and we drive a really hard deal. Cuz what we're offering is unique and incredibly valuable to them.

And hopefully we all win on the other side of it. So the, to me, that's the kind of. The way to navigate and socialize it effectively. If I'm just the CIO and I show up with this thing, I'm gonna get the back of their hand mm-hmm and probably rightly. Does that make sense?

It does. What's your impression of the appetite today's in current environment, we got a little COVID thing.

Sometimes we've got some financial pressures. What's your gut feel about the vision of the C-suite to see beyond the next two years to position themselves? Cause this is not like you flip the switch and money cut starts coming in. This is that's right. You gotta be thinking down. What do you think the appetite is? What's your feeling?

Well, I think it all depends on what your focus is, what your objectives are. And so, I'm gonna, you're gonna hear me make fun of AI a lot today, and it's not, cuz I don't believe in it, but I just think it. Still off on the horizon. And I don't think it's immediately relevant to important problems.

So you'll, it's not that I don't care about it or it doesn't hold promise. It's always just almost here. So if I show up in the C-suite and I wanna sell this big AI initiative, I probably should be thrown out on my ear but if I show up in the C-suite and I say, Hey, look.

We've got some really core stuff that we still need to solve. I mean, we still don't have interoperability figured out. We've not really figured out how to remove time and space as barriers to care made a big leap forward because of COVID and we all had to adopt telehealth, but there's so much more to do there to refine and optimize.

Revenue ops and, revenue maximization. I, I mean, I know these are all like old tried true chestnuts, but there's still a lot of juice in those oranges. And so my point would be, these are important priorities for us as an organization. These are things that are gonna generate top line revenue and reduce expense, and I'm gonna pursue 'em in some of the traditional ways, but I wanna reserve 5%.

To try some really innovative transformational things. That, to me feels like a pretty reasonable pitch mm-hmm and a reasonable balance between the imperatives of the organization that are right in front of them, but also not completely Moring the future.

All right. Last question for you. Yeah. So you you've got a CIO or a CMIO out there.

Who's interested in this entrepreneurial space, that networking piece that you talk about so important. Who should they be seeking out to network with? They start calling up Silicon valley guys, or like, what does that really look like?

Yeah, well, I think there's a, couple points of entry. The first is.

Look in your region for a local accelerator. And that's always a good place to start look for innovative funds that are investing areas that you care about and angel investors and others. And then there are these occasional, like showcases where you can go and see, it's almost like a shark tank type thing.

But you know, essentially you just need to show up at those places. And what you'll find out is just like health tech is a small world. This is a small world too. And frankly people will be very excited that you're there because. Again, you may not appreciate it, but you bring these really valuable assets to this, which is your knowledge of healthcare.

And the ability to provide folks with real world experience and a real world opportunity. And then I would just, as I said earlier, know, I would look for something that is a plausible solution. There's something you actually care about. I would stay away from the stuff that's like really wild flyers kinds of things.

I just, I think the likelihood of failure is too high and the cycle times are too long that, you need to, it's like anything else when you're starting look for some quick wins mm-hmm look for ways to kind. Tilt the deck in your favor. And again, I think the way to do that is go after things that you really care about and find small elegant solutions and then partner with them.

Be smart money, be smart money for them. Am I making sense here, mark?

Yeah, this is great and stuff. I think it's not the education. The average CIO is going to get in some bootcamp or, or

certainly nothing we got in medical school. Yeah. We got the antithesis

of this kind of advice. Very risk adverse training, but.

This is awesome. It was a great conversation. I greatly appreciate you sharing some of that knowledge. Plus your journey has been really interesting for those of us who kind of follow all what's

Aton now in really fun directions.

So thanks for joining the

show.

My pleasure. Thank you, mark.

You got it.

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