Hemant Taneja: Greater Intention

Yeah, so I grew up in India. It's a typical immigrant story. My parents moved here when I was in the middle of high school, which was in the Boston area, and then I went to college at MIT. Honestly, because the smartest kid in my physics class the year before went to MIT, I figured it was a good school. I didn't know anything about colleges. I studied undergraduate and graduate work there. The plan was to actually be a professor, and this was around 1999. If you think back to that time, the whole internet and the beginnings of mobile data were starting to happen. So I left grad school with a couple of my close friends and we started a company. This company started building applications on mobile devices. This was the very beginning of building applications with the long-term vision that the phones would be the computing platforms, which obviously 20 years later, all glory to them. I did that for about three and a half, four years, we sold a business, and I joined General Catalyst. At that time the firm had just started, it was about a year old when I joined. I joined as an entrepreneur in residence. I was like 26, I figured I made a lot of mistakes with my first company, I'll go build another one. They were a great entrepreneurial firm that had just started, which was often describing itself as entrepreneurs investing in entrepreneurs. So I connected with them and 19 years later I'm still here. I've been investing for the last 19 years at the firm, originally in Boston, then we moved to the Bay Area in 2011.

It's really interesting. In a computer science vernacular, I've always thought of the choices I've made in my life as a greedy algorithm, which is always thinking about what's the most interesting next thing I can do and just follow fundamental curiosity. In fact, when I was a sophomore in college, I called my parents one day and said I'm not going to be a doctor because it was just the expectation of my family that that's what I was going to do. I just fell in love with learning more about technology and what's going on. Then I went down the academic path, and honestly at that time the entire institute MIT had this whole energy around building companies around the internet. It just felt like a moment in time, and I was like, 'I'll come back to finishing my PhD and becoming a professor.' I wanted to be a part of it. That led to the next thing, and the next thing, and obviously I never went back, which honestly my mom regrets for not finishing my PhD. But the choices were always looking forward as to where the world's going and what's interesting. The path wasn't straightforward. The startup we built, if you think about it, mobile didn't truly happen until 2006 when the iPhone was launched, so that company was clearly too early. Not only did I not know how to run a business because I was an academic in training, but it was also the wrong market, too early. That was a challenge. Then when 9/11 happened, if you remember, all hopes of being able to raise capital for us fell apart. I actually had to legally, imagine doing this as a 25-year-old, tell 40 people my lawyers told me I have to lay you off, and I did. I basically said, 'Give me a few weeks, I'm going to try to find a home for us so we can continue our work.' It was amazing because the entire team kept coming in voluntarily to just keep delivering to customers, and we ended up selling the business. That was not easy. In hindsight, it was a gift because it gave me a lot of empathy for what founders go through. For six months I was trying to figure out how to make payroll in the middle of a tough environment in an early market. Then you get into venture capital and you have that empathy, so that failure was actually really empowering. The other time where it was really hard for me emotionally was in 2006. I started seeing everybody on the MIT campus working on climate change. I made a presentation to the firm saying we really should go do something about it with technology and started investing in technologies that can move us to a clean, affordable, secure energy future. As you know, that's a policy-driven market. We invested a hundred million dollars in many companies and it all evaporated. I learned a lot about the interplay of technology, policy, and business, and how to think about what kinds of companies can be created there. That was a blessing in disguise because my partners were supportive of me through that emotionally hard time and empowered me. Then when fintech and healthcare started, I was able to draw on those learnings and go help build impactful companies. There's always setbacks, but there's so much learning in the setbacks, so much more learning in the setbacks that you have to cherish that time as hard as it is.

Look, I think the reality is in this business, failures are part of innovating. That's the way markets develop. Silicon Valley has an amazing culture of paying it forward. 'Fail fast, try the next thing that might work, keep trying, and success will come on the right projects.' The fact that the partnership understood many of these failures were because the market wasn't ready, and the market and policy interplay wasn't right, but we did the best we could, went a long way in establishing my career. I remember saying to the group at that time, 'Hopefully this doesn't scar us from going and taking on challenges in sustainability when the market is right,' because sometimes your failures can scar you and prevent you from taking risk. In our business with founders, we always want to make sure we emotionally empower them to have the appetite for risk because you have to take risks to go change the world. If you actually think about it today, sustainability is becoming an interesting topic again, and our firm is gearing up to figure out what to do about it. I'm excited that the firm had the courage not to be afraid because we had failure in the past, and we can draw from that experience.

Yeah, so health assurance means two things for us. First and foremost, it's about delivering access to health, not access to care, for consumers. After all, that's what consumers want. Sitting in Silicon Valley, we always think first and foremost about putting the consumer in the middle, thinking about the experience we want to build for them, and then think about all the other points. But what does a consumer want? They want to stay healthy. They're not focused on 'give me access to care.' That's the product? Health is the product. I learned that mindset when we were co-founding Livongo in 2012. We were working on design principles for how do we serve the 30 million consumers at that time with chronic conditions like diabetes. The mindset was, 'Do we want to build an app that they engage with that they can do all these things to keep healthy?' We sort of steered there saying, 'Who wants to think about their disease 20 times a day? We want to give them peace of mind, keep them healthy, don't make them worry about their disease.' That's the health assurance mindset versus the healthcare mindset. The second part of health assurance, equally important, is we want to do it in a way that we actually reduce the GDP of healthcare in order to make health assurance or access to better health available to everybody. We have to make the whole system more affordable. Our mindset in writing UnHealthcare was how do we rethink the problem as a whole and reorient our healthcare system from a set of geographic experiences that are in-person to these virtual and physical care continuum experiences that are focused by consumer persona: a person with diabetes, an elderly person, transgender care. What do these experiences look like? And do that transformation in a way that becomes affordable as well. That's been the core ethos of what we wrote about in the book.

We were going to originally publish the book in April of last year, and then obviously when COVID happened, as my co-author Steve, who's the CEO of Jefferson Health, likes to say, we infected the book with COVID. It was incredible because we were starting to see two things at the same time: all the places where the system was broken in its misalignment, its technological capabilities, and on the other side we were starting to see the accelerated promise of what technology could do in the space. With the telehealth work that happened, all the advanced testing and vaccine development, everything came out of necessity. In 2019 when I started writing the book, I had put a plan in place in our firm that the next decade is a decade of healthcare transformation. We're going to lean heavily into it. I went back to the firm in the summer of last year saying, 'Accelerate everything that we said in terms of how this market is going to develop.' We think the next three to five years is just massively transformational. Part of our hope is we can bring the health assurance mindset and principles to bear in how founders of next-generation companies end up creating the future. We're literally creating the future health system right now. Part of our job as investors, and in some cases founders of some of these businesses, is to help set it on the right path around the principles of health assurance.

Healthcare is highly unaffordable. It's about 20% of GDP. That, plus the growth of high-deductible plans, has started to create parts of the healthcare system where there is economically rational behavior. The fundamental issue: who pays, who decides, who benefits? Usually three different stakeholders, creating a highly misaligned system. But consumers with high deductibles now have a bunch of the spend where they think about it with the same economic rigor they think about other e-commerce. There's an opportunity to impact that piece of the spend with a great consumer experience. Employers are finally saying, 'This is a huge part of our cost structure and it's not driving the kind of value for our employees we envisioned. We have to do something about this.' They are becoming sandboxes of innovation. Obviously we built Livongo on the backs of serving the chronic population and employers first. When you see those places of economically rational behavior and you see some companies like Livongo that have shown you can build a technology-centric, consumer experience-first company that can also bend the cost curve, now entrepreneurs are taking over. We've shown the playbook to the industry and it's happening. We meet companies in the space all day and it is amazing how much change is happening in so many different parts of those consumer experiences right now.

Consumer expectation is going up because outside of healthcare, the experiences are transformational. When you think about the just the position of the role of technology empowering society over the last year in the pandemic, and the lack of technology and the set of problems that emerged from it in the healthcare sector, could not be more stark. You could get your food delivered and your groceries delivered to the home and be able to sustain very comfortably, but you couldn't really go get a great experience in taking care of your health. Necessity breeds innovation. A lot of the health system moved towards telehealth, remote care, and that's now been unleashed. When you think back to March, April, it could not be more stark contrast. Consumer expectation has been there because of innovation in other industries. As businesses within the healthcare system, these virtual care businesses are coming up and bringing that same standard of consumer experience into the industry, which is now making the rest of the industry step up. I think it's a great time in that regard where we will see the overall consumer experience in this industry finally materially transform in the next few years. I genuinely believe this: this is the time, this is going to happen.