A (4:07)

No, it's a terrific, terrific book and thank you, Chris. It's literally 700 pages. Brilliant and thoughtful. Incredible. Thank you. Bo, can you take a second to introduce yourself and tell us about what you do and also your background because you're also a fantastic physician who left practice to found the company that you founded. Tell us a little bit about yourself and about ufi.

D (4:31)

Yeah, thank you, Scott. Thank you for having me with this entire panel. And my name is Bogu. I am a former cardiothoracic surgeon, emergency physician and foolishly decided to get on the administrative side of hospitals and was a physician executive. So that included overseeing medical billing and revenue cycle management. Specifically through kind of my journey on that side, a lot of pain and frustration led me to create my own company, Ulify, to oversee and deliver end to end AI medical billing.

A (5:06)

Well, fantastic. Tell us a little bit about the funding journey of that if you're comfortable doing so, because it's a fascinating story and sort of ventures, funding and getting going and all that stuff. And I think you were also practicing at Stanford. Right? And so tell us a little bit about that. Just take a moment.

D (5:21)

Yeah, yeah. So I've been fortunate to both practice, you know, on the academic side as well as the private community side. I think leaving the clinical aspect of that and kind of delving into the VC world and kind of Getting that backing with fortunate many offers and support. I think it was a relatively painless journey, although I'm sure Manav can empathize here. It is not an easy journey for most, but I think it's about really tackling something that's meaningful, that's really more of a systemic problem and understanding that you demonstrate domain expertise. All help you kind of get through that, I would say. Investment phase.

A (6:08)

Fantastic. Thank you. We'll come back to you in a little bit on that boat. Thank you very, very much. Andy, tell us a little bit about yourself. I know founder of Skinny Pop. You had a partner in that, Pam, a fantastic partner. And there's so many lessons and having a great partner in the business as you drive as well. Tell us a little bit about your background and introduce yourself. Sure.

E (6:28)

Thank you for having me. Nice to be here. Name is Andy Friedman. I'm the founder and former CEO of Skinny Pop Popcorn. Prior to that, I spent a long time as an investment banker and I did a bunch of other things leading up to getting into the Popcorn space, which we eventually sold the majority of that business to a private equity firm. And about a year after that we, we went public on the New York Stock Exchange and I was a very, I was on the board, very active board member. And eventually we sold to a strategic in the Hershey company And so I currently, for the last seven, eight years, I advise a bunch of early stage food and beverage companies. I invest in a bunch of stuff and I see all kinds of deals.

A (7:17)

Andy, let me start with you and then we'll start coming back around the turn on this. Talk a little bit about the drive for energy to found a company and sort of what that looked like when you got started and any advice you would give to other founders and then ask you a second question, and we'll come to that in a second, which is you've invested in a ton of different startups from watching those, what advice for what works and doesn't work and what's critical to success. But start with your founding journey and any advice to founders that comes out of that.

E (7:48)

Yeah, sure. So, you know, I, you know, we started this company not to, you know, not for the exit. We started the company so that we could feed our families. And one thing led to the next, we pivoted and all of a sudden kind of we were living the entrepreneur's dream in that we started a company that became a hot product. And from an energy standpoint, which you had asked about, you would be shocked as to how much one person or two people could get done in a day when you are building a business for yourself. And so a piece of advice that I have for a bunch of for, because I see it all over the place with earlier stage food and beverage companies is that they tend to over hire early on. And I would argue that with one or two people that have the proper incentives in place, you can get a lot done. So you don't need to have a head of marketing and a head of operations and a head of procurement and this, that and the other thing, you can get a lot done as a startup. And you know, as an example with SkinnyPop, you know, we sold our first bag in August of 2010 and we hired our very first employee in September of 2012. So we went over two years but for there was a short period of time when we were popping, packing, ceiling, shipping it ourselves and then we found a third party provider to do the manufacturing for us, for us. So ultimately it's all about outsourcing some of the areas where you're not an expert and really leaning in on some of the areas and dive digging deep to figure out kind of the how can you make this work for yourself. And we were just doing a lot of things that made sense. Kind of not following the typical CPG playbook.

A (9:43)

And talk for a second about so many companies want to build sales in sort of a grassroots type of way. But obviously if you've only got two, you that's kind of hard to do on a small startup. And this is, this is endemic throughout business whether whatever you're building. Commercialization. How did you start to think about distribution and commercialization when you started to have a product? Because you could either go door to door and sell it to grocery stores, which maybe you did some of, but it's hard to get scale that way. How did you sort of look at figuring out distribution and scaling distribution?

E (10:19)

Yeah, so by the way, we did go door to door and we were knocking on doors at grocery stores one at a time and eventually we found a distributor that may knock on 50 or 100 doors on our behalf. And so initially we, you know, we started with one distributor and by the end when we sold the majority of the business, we were working with about 66,0 distributors nationwide. And so that was kind of a, it was an opportunity to leverage experts and their relationships with retailers. But that's one way that you can really ramp up the sales.

A (10:56)

And how was it building those relationships with those channel partners? What was that like and how much of your time and Pam's time was spent building those relations with channel and distribution partners.

E (11:07)

Yeah, we spent a lot of time, I mean, we were, I would say, Pam and I were, we joke that we were kind of at this 24, 7, 365 and we were constantly, we were at food shows that were sponsored by distributors. We were at food shows that were kind of industry food shows where distributors and retailers were walking by. So we were constantly on it, trying to build relationships and, you know, selling the gospel of skinny population, you know.

A (11:37)

Fantastic. Bo, you're, you're working through this founding journey. You had an incredibly successful career as a cardiothoracic surgeon before this. What advice for founders and would you do it again? Are you ready to go back to surgery? Where's your hat at on being a founder and what advice would you give to founders?

D (11:56)

Yeah, that's a great question, Scott. And you know, I would say despite, you know, having done open heart surgery and taking care of the sickest patients in the er, I would agree wholeheartedly that creating a company and being a 24 hours, seven days a week job, it is definitely the hardest job. And actually speaking of right now in the middle of a ASC conference regionally here in the Midwest, and obviously, Scott, you'll have a great conference coming up in a few weeks for ASC as well as the one coming up in a few days. So exactly what Andy kind of hit, you really have to understand your distribution partners, your network. I mean, you know, with that first question of how was that fundraising journey like? It's like, well, the first question investors are going to ask is, what's your distribution network? How are you going to tackle this? And honestly, no matter what you say, there's never a perfect answer, but it really comes down to kind of just that resilience and just hitting everything within your territory and geography and helping raise your brand awareness. A lot of people have this false belief that it's product led, but it's really about making sure people know who you are and the value they can bring. And always kind of have a problem based approach in all those discussions.

A (13:18)

But your point is, well, so well taken that you might have the greatest product in the world and there's this old concept of the best mount trash people will beat a path to your door. But most of us know that that's not really true. You better have a great product, but you better be working on distribution and commercialization really early as well. Yeah. And Paul, what about the effort towards small, medium versus larger customers? How do you Sort of attack that. I know Andy did it ultimately through Channel Partners, distribution partners. How do you sort of look at, you know, are you first working towards smaller and midsize customers or large at the same time? How do you sort of look at that and any advice there?

D (13:57)

Yeah, that's excellent question. And, and I don't want to sound like, you know, I'm the foremost expert in this. This is always a dynamic kind of work in progress, I would say, from a humble perspective. You know, I think you definitely have to have that grassroots kind of small market approach in the beginning and really try to build something that people really want before you start scaling up and moving upmarket. And obviously that product looks very different selling to a healthcare system enterprise level, like a large academic center versus somebody who's a mom and pop shop down the street, who's a primary care physician. But believe it or not, I think there's a recurring theme of that pain and frustration of not understanding, let's say, for example, their cash flow or if they're going to survive two months from now because of declining reimbursement. So that conversation sounds the same, but the way you approach that is very different.

A (14:58)

Thank you. And Manav, let me go to you next. Thank Rista. And back to Bart. Bart, thank you for rejoining. Thank you very, very much. Monav, let me ask you this sort of advice for founders, both on the product side, the commercialization side. What are some of the lessons that you learned in building Memorial Health? Sure.

B (15:22)

I think that the biggest, frankly, what Andy said at the beginning really resonated and was very similar to our story of we, we waited a very long time to hire our first person. So we started the company in June of 2016 and our first employee started in September of 2018. So roughly two and a half years. And part of the reason was that it took us a long time to actually figure out exactly what the company should do and how to find the right kind of product set, how to find the right users for that product, how to aggregate a lot of feedback from those folks and make sure that we're not just building something that's. That's kind of a nice to have. It's something that people actually need and it's critical to the way that they do work in clinical settings. And as painful as that process was of going through lots and lots of iterations and probably changing the product dozens of times, I think it was necessary to build a good foundation for finding something, a set of use cases that people really actually found integral and valuable over the long term. So that was one. I think one thing that's uniquely true today when you see especially technology companies grow from like 0 to 10 to 50 million of recurring revenue in the span of a couple of months or a year or two years, is just having really good moat around what you're building right in the long term, it's a marathon, it's not a sprint. It's not about how you get the most revenue the fastest. It's about what is most defensible, what is actually scalable, what is sustainable over a very long period of time. And a lot of that is just grounded in building two things. One, the best possible products and focusing a lot on delivering truly a 10x experience. And then the second is on making sure that you're actually solving a problem. The unfortunate reality is that there's lots and lots of companies that are started and funded that are things that are kind of nice to have and they're hot for a very short period of time and they flame out really quickly.

A (17:38)

Talk about that founder engagement early to really try and understand what you're doing and what your customers need. Because so many people get money, want to build teams very quickly and sometimes they don't really get clarity about what their exact product market fit is and what their customers really need. Can you talk about that effort early on and that pivoting back and forth in figuring out what customers really want in your journey and any advice there?

B (18:06)

Yeah, our, I mean there were. There are two kind of components to the philosophy for us. I think number one was it's. It's very hard for me at this point in time. Like when our first employee started, I was 20 years old. So it's very hard for me to say, hey, I have a really good sense of how to hire the best go to market or salesperson if I have no sense of how to actually do go to market in any capacity. So I need to learn this muscle. I need to, I will be very bad at it for a long period of time, but I need to at least learn the basics of how to do it before I can figure out what good actually looks like for that particular role and what is best for our company. That's one. The second is it's like I think an integral part of our company's DNA, probably even today that everything we do is built off of feedback that we get from customers. And if the entire kind of inception of the company wasn't designed around that of the founders need to spend a lot of time with the customers, listening to them, understanding them, building really good relationships with them, building trust with them. I don't think that that would be the company's DNA today. The company would not be run the way that it is. So yeah, those would be maybe the two kind of big philosophies around being founder led early on.

A (19:28)

Thank you very, very much. Krista, you've worked with a ton of different startups. Any advice that you would give to startups, what do you sort of see as, you know, keys to success versus things that don't succeed. Any advice for founders?

C (19:41)

Yeah, I think I would just add on to what Manav was just mentioning. You know, making sure that you're solving a real problem and that you're building it with the end users in mind. Great example. We're working with relayed R E L A Y D and they are designing AI enabled inpatient nursing workflows. But the way they're doing that is walking through the unit with the nurses and allowing the nurses to contribute to the design so that it becomes a product that's very usable, you know, to the end user. I think sitting through company pitches over the years from the client's perspective, it's so common to have a founding group come in and pitch their solution without having any understanding of our current problems that we're trying to solve and lack of understanding to our current systems and integration possibilities right now across the healthcare ecosystem. I'm sure BO could add to this. Hospitals are managing dozens if not more of disparate apps. How can your product come in and supplement and enhance what's already in place instead of creating a brand new offshoot that needs to be managed differently. So I think to summarize, I would say tailoring the pitch in the product to solving a problem. You know, healthcare leaders are not looking to just buy tech for the sake of buying tech. Same with AI. They just want the problems to be solved. If AI is part of it and supports it, that's great. But if not, that's fine too because operational excellence types of activities are still needed across the healthcare ecosystem. And then second, I would say making sure you have the right stakeholders in the room. Because with C suite turnover being such that it is, it is not uncommon for a founder to establish a deal with one set of executives only to find when it's time to go live, they have an entirely different set or completely new priorities that suddenly have outranked them. So making sure that they have a broad base of stakeholders and have really brought forth a solution that Solves a real problem.

A (21:58)

Thank you very, very much. Let me come back around for a second. I think we've got Bart back with us. Bart, you've been involved with lots of different companies. Give us second on where you've seen companies have success versus not success and any advice you would give to leaders and founders. And then I'm going to come back in a moment to Indiana on a question about investing in startups because each of you have done a lot of investing in startups and what you've seen is where keys to success versus versus maybe challenges. Bart, talk for a moment about where you've seen businesses led and advice you that comes out of some of that.

F (22:33)

Thanks everybody and thanks for having me. Scott. You know, in terms of advice I would give and what's worked and what hasn't worked, the things that have worked the best from my perspective. And again I work mostly with mature kind of operating profitable cash flowing entities. I also work some with early stage companies and joint ventures that are two strategists coming together which is effectively a startup. One of the things that I've seen is that people that are expanding into adjacent areas to two areas that they know well, not something totally out of left field but rather something that's complementary to the experience they've already got. You know, that may sound pretty elementary but it's often overlooked. The places that we've seen people have great success are if you have a surgery center management and operating business and you're growing into billing and collections or software or it's one of our clients is a big multi specialty physician practice and they've got some homegrown technology that they've managed to commercialize and then turn that into a brand new division and spin that out. And those are the kind of things that I see most frequently in my day to day practice.

A (23:45)

And so there Bart the premium on people being able to connect the dots and then pursue it and then do they have to put a team in place that really pursues that separate business or that spin out part of the business?

F (23:55)

Yeah, at a certain time you do first, at least in my experience in that type of a startup where it starts with a company that then has a product or a feature or some kind of solution they've created that could be valuable to other people, they grow it internally and then they offer it to somebody else that's in the space, usually not in the same market as them and grow it organically that way. But then eventually you have to jump off from that and really staff it as its own thing and hire and, and recruit talent and really add on to it. But it's that incremental approach which, you know, rather than just starting off as a kind of a garage startup, seems like the old, old saw or the old Tail. Instead you're kind of starting with a stable platform and then you're creating something out of that. So there's one way to think about it. A way to be innovative within an existing company.

A (24:49)

No, thank you. We see a lot of that type of success sort of things that are adjacent to the core as they used to be talked about. And I love that. Andy Amanov, let me ask you this question. Each of you have invested in a lot of other companies, other startups. What's the most important thing that you see there when you see success? Andy, I know I've watched you really closely with, I think it's good sport. Is it the driver, the founder? Is it finding private market fit? What's the most important thing you see in all the things you've invested in that gives you indications of potential success versus not?

E (25:25)

So for starters, you have to have product market fit. Without that, you can't muscle your way through it and make it succeed. So you have to have a great product and it needs to work and you need to have an identified, addressable market that demands this product. That's number one. Number two, the team or the founder is critically important because on the early stuff, especially the real early stuff, you don't know if and when there's going to be a pivot. So the product may become secondary and the team becomes the primary driver of that investment and then they pivot and it becomes something completely different. So you have to look at the product, you have to look at the team, you kind of look at the whole package to see do we think this has got a reasonable chance at succeeding. And quite frankly, the early stage stuff, it's a bit of a crapshoot. And so you have to be really comfortable with that team.

A (26:23)

Let me ask you another question, Eddie. What time is the right time for a founder to take in outside capital, to take in venture capital? What point is the right point for.

E (26:31)

That as late as possible, whatever that means. You know, once you, because the, everything kind of changes once you take on venture capital or private equity capital. You go from running an entrepreneurial venture to having a job and reporting to stakeholders and shareholders. And so it's just a, it's a really monumental change in the operations of the business from, from a founder. Once you take on A third party capital.

A (27:03)

Right. And let me ask you a couple related questions. You've also, aside from founding your own business literally in college and having this tremendous success, great investors. Talk for a moment about as you invest in other business. Business is what are indications of success versus not success? What, what do you look for? What do you see that recurring that this works, this doesn't work, or what mistakes you see people make?

B (27:30)

Yeah, sure. One is I, I think that I care a lot about investing in founders who are very passionate about the problems that they're working on. People that are kind of building things for the sake of building things are because it seems like an opportune time, especially for many of these venture scale businesses. Takes a lot of time. You have to work through a lot of stuff. It's very painful, it's very hard. And having the endurance to do that requires you to just care a lot about the problem that you're working on. So that's one is I index very heavily on who is this person, why do they care about this problem, why are they trying to solve this? The second thing that I would say matters a lot is is this something that I personally genuinely believe the world actually needs. And it kind of goes back to what I mentioned earlier, people who are actually kind of solving problems and focused on finding things that, that can have lasting value in the world. The problem with venture companies generally is that you don't really know if they're going to work out for a long time. Right. Like they go through so many ups and downs and it's so hard to go entirely from zero to building something really long and kind of large and painful that you have to be willing to kind of be there for the long ride. And like the majority of your just financially the majority of your return really comes in kind of the last turn of the company which may be 10 to 15 years out. So it's, it's essentially impossible to predict. And the, the kind of indicators that you have to rely on are is this someone that I believe in? Is this someone that is working on a problem that's meaningful and is this someone that I think cares a lot about that problem? And.

A (29:14)

Those are things I echo some of your thoughts. I find it fascinating. I remember a discussion on a seed investment on something with a large fund and the investment firm having a discussion with the two leaders in the investment firm and then basically saying think of this as a 10, 15 year horizon and depending on what your age you are, that either seems daunting or okay. The older I get the 10, 15 year horizon. Seems like a scary thing on the seed to venture to then total exit 10 to 15 years later but, but good for my, my, my children I guess is is great. I'm going to ask each of you one last question. 30 seconds each. Sort of. When you look at sort of what's going on in the startup environment, the world today, what are you most excited about? And Dr. Gu, I'll start with you because I've been so impressed with your journey, your persistence. You exactly have the kind of passion that Manav talks about. Talk about what you're most excited about currently.

D (30:07)

My problem, what I'm currently working on and I think both Andy and Manav just really touched upon that. You really have to be passionate about this problem that you can work on for this journey of 10 years plus. I lost so much sleep and frustration trying to handle the billing and financial side of our department hospital so much that now I have to turn it into that true passion. That's honestly what I think about and what I'm excited about every single day. And honestly, you know, hearing some of the frustrations of my customers who are physician partners and peers and then hearing and seeing their relief after we provide that service is the most rewarding and incentivizing motivated thing to keep on going this journey and realizing that this is like said, not a sprint but a marathon.

A (31:01)

Bo, thank you. We love watching what you're doing. Congratulations. Krista, tell us what you're most focused on and excited about currently.

C (31:08)

Believe it or not, I'm actually excited about how difficult healthcare is right now because I do think it's driving disruption and it's bringing in innovation in areas maybe that hadn't been considered before. I would say I'm most excited though about the talented people that I meet with every day. The founders come up with the most innovative and creative ways to solve problems, especially if they are outside of the healthcare industry. Bringing those perspectives in I think is going to be a game changer. So I do look forward to a lot of the upcoming innovations around hospital operations, throughput and overall patient care.

A (31:45)

Thank you very, very much. You guys have not had a chance to see Bart's face day except for a few minutes, but absolutely brilliant, brilliant lawyer and person, also runs his own school as well and a brilliant, brilliant leader. Bart, can you, can you take a second? What are you most focused on and excited about currently? There is a fascinating story on Bart running his own school that we won't talk about here, but really remarkable. Bart, take a moment and tell us what you're most focused on and excited.

F (32:11)

About currently here at the firm. I'm most excited about our expansion into pharma and pharma services. We've traditionally been a health care services powerhouse and we see a lot of opportunities in things like pharma services, outsourced contract manufacturing, clinical research. So growing the practice in that regard and also just seeing the leaps and bounds in technology in that sector has been really exciting for me.

A (32:34)

Simply remarkable. Andy, I know some of the things that you're focused on and following, but take a moment on what you're most excited about currently. Outside of being a scratch golfer and outside of other projects, what are you most focused on and excited about?

E (32:52)

I mean, just keeping it to the food and beverage space. I love seeing innovation of these entrepreneurs that are trying to create a cleaner version of something that we already know and are comfortable with. And I think the key to success in a lot of these cases is this is a real simple one. The product needs to taste great, period, end of story, full stop. You can have a great name, packaging, but you need to deliver on what's inside of that, inside of the package. And so I love seeing new, innovative twists on something that we're already somewhat familiar with.

A (33:33)

Thank you. And you might take a moment and give a shout out to the colleague you backed or worked with at Goodsport. I think it's called just. Just one moment on that, because that's a tremendous story, too.

E (33:42)

Oh, yeah, sure. Michelle McBride is the founder. She's an incredible force of nature. It is a sports drink that has three times the electrolytes and one third the calories of any of the major sports drinks out there. It's called Goodsport and it's the only scientifically proven hydration beverage on the market that will enhance your hydration performance. And the list goes on.

A (34:09)

No, no. I appreciate. You've got to be so impressed with her drive as well, and her team's drive. It's really remarkable to watch. Thank you. Manav, give us a moment on what you're most focused on and excited about in your business life.

B (34:21)

Yeah, what I'm most excited about is probably just amount of agency that people have today. The ability to start something from scratch has never been easier. The ability for people who traditionally wouldn't have had the resources to be able to build something that's interesting to them or that they're passionate about is easier than ever. And it's resulted in people having a ton of agency to work on the problems that they really care about, and that's really exciting. Obviously, that means that a lot of things that the world may not need probably also gets built. They probably also get built. But at the same time, it also means that there's a ton of people finding their passion and building things that the world does a lot faster than we normally would have. So that's number one thing that gives me a lot of energy and optimism.

A (35:12)

Thank you. I want to thank the five of you for joining this session at Becker Business and Becker Private Equity on startups Andy Friedman, Krista Bragg, Dr. Boku, Bart Walker, and Manav Sivak. Thank you for listening to this special edition of the Becker Business and the Becker Private Equity Podcast. Thank you very much for joining us.