Category Archives: Insights

Running Through Walls: What Financial Advice Should Be

Venrock partner Nick Beim speaks with Jason Wenk, founder and CEO of Altruist, about his mission to increase the accessibility of great financial advice. Wenk walks through his early entrepreneurial endeavors and explains how they’ve contributed to the creation of Altruist. As his leadership style has evolved over the years, Wenk shares the biggest lesson he’s learned while building Altruist and how he’s embraced the fact that it’s okay to not know everything.

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Venrock partner Nick Beim speaks with Jason Wenk, founder and CEO of Altruist, about his mission to increase the accessibility of great financial advice. Wenk walks through his early entrepreneurial endeavors and explains how they’ve contributed to the creation of Altruist. As his leadership style has evolved over the years, Wenk shares the biggest lesson he’s learned while building Altruist and how he’s embraced the fact that it’s okay to not know everything.
  1. What Financial Advice Should Be
  2. The Recipe for Drug Discovery
  3. No Egos, No Jerks, No Politics
  4. Inclusion Comes First
  5. Winning the Digital Shelf

Running Through Walls: The Recipe for Drug Discovery

Cyrus Harmon, co-founder and CTO of Olema Oncology, joins Venrock partner Alex Rosen to discuss the history of Olema. Olema had a successful IPO last year and Harmon sheds light on what biotech companies should look for when selecting banks for an IPO and how to build momentum for financing rounds.  He also dives into the factors that led to the founding of Olema and how the company evolved to develop their OP-1250 drug, used for the treatment of estrogen receptor-positive breast cancer. Harmon shares the biggest challenges he encountered, things he would have done differently, and the importance of perseverance as a leader. Harmon also touches on the biotech trends he’s most excited about, including mRNA vaccines, gene therapy, and AI in computational drug discovery.

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Want more? Here’s the latest on Running Through Walls.

Venrock partner Nick Beim speaks with Jason Wenk, founder and CEO of Altruist, about his mission to increase the accessibility of great financial advice. Wenk walks through his early entrepreneurial endeavors and explains how they’ve contributed to the creation of Altruist. As his leadership style has evolved over the years, Wenk shares the biggest lesson he’s learned while building Altruist and how he’s embraced the fact that it’s okay to not know everything.
  1. What Financial Advice Should Be
  2. The Recipe for Drug Discovery
  3. No Egos, No Jerks, No Politics
  4. Inclusion Comes First
  5. Winning the Digital Shelf

FinOps Automation: It’s Time

Finance and Accounting departments have a scaling problem. Engineering, Product, and Operations often have economies of scale, network effects, and operating leverage. Sales and Marketing benefit from growing brand awareness, category leadership, and expanded distribution. Thus, as companies mature, you usually see these departmental expenses decline as a percentage of revenue.

Finance and Accounting, however, can often exhibit diseconomies of scale, becoming more complicated and costly as more customers need to be “known” and collected from, more suppliers need to be vetted and paid, more complex payrolls calculated, taxes filed across innumerable jurisdictions, more regulations adhered to, more internal and external reports generated, and so on. The net result is finance teams having to expand linearly with revenue growth, often with contingent workers, making company-specific knowledge harder to transfer and recapture.

And… lots of late nights and burnt out finance employees.

So why has technology not solved this problem? We’ve had ERP software for nearly 40 years, and for the past decade, we’ve had some truly terrific cloud-native innovators like Intacct, NetSuite, and Workday. The problem is that, though these Systems Of Record are great at storing data and doing calculations, there are still myriad financial processes that require person-to-person communication, as well as human judgment and exception handling.

For example, “sorry we are late on our payment, but I have a question on the latest invoice you sent”; “thanks for responding to our request for an updated W9, but it appears that there may be a typo in your EIN”; and “this invoice seems to have missed a volume discount specified in our MSA.”

It turns out that it takes a lot of email and spreadsheets to run a modern ERP.

The above examples are not particularly challenging for a human to handle individually (the problem is the volume), but quite difficult for computers to automate given the unstructured data sources and natural language involved. Until very recently, AI/ML was simply not accurate enough to solve the problem effectively. This is especially true when trying to convince hard-nosed CFOs, skeptical and conservative by nature, who are often more willing to spend on other departments than their own. 

Fortunately, advances in natural language understanding and machine learning over the past few years have crossed a similar threshold to computer vision and speech recognition in that they are now robust enough for vital operations, especially when combined with thoughtful humans-in-the-loop to handle escalations and exceptions.

The COVID-19 pandemic has served as a catalyst for financial operations automation as office closures challenged business continuity, raised security and compliance concerns (the thought of payables being processed on an insecure home network is enough to keep any CFO up at night), and made hiring and training entry-level headcount that much harder. Lastly, the SaaS revolution, which was already in high gear before the pandemic, has now “gone to 11”, which means that Finance and Accounting must automate to keep up with the rest of the digital enterprise.

Amidst this backdrop, Venrock is thrilled to have led Auditoria.ai’s Series A funding round. We think their focus on growing mid-market businesses is spot on, given that these businesses are large enough to feel the pinch of complexity and high transaction volumes, but not resource-rich enough to have built custom solutions or require their business partners to adopt specialized means of interaction.

We love Auditoria’s breadth of vision and product approach centered around discrete SmartFlow Skills, which have already been certified by the top cloud ERP vendors. Additionally, leading mid-market accounting and audit firms, including RSM and  Armanino, have already committed to supporting Auditoria’s efforts in their ERP installed bases.

But most of all, we are enamored with this team. Finance and accounting requires specialized knowledge, which relatively few technologists possess, but the Auditoria team is comprised of highly experienced alumni of Oracle, Netsuite, Intacct, and Intuit, who have successfully scaled products and startups in the past. They are also really good people, committed to enriching F&A roles by automating the drudgery, thus saving time for humans to tackle the more interesting and fulfilling work. Auditoria is pioneering FinOps Automation, and we are grateful to be their partners for the journey. 

Source: http://vcwaves.wordpress.com

David vs Goliath: 5 Strategies for Commerce Startups to Succeed in an Amazon World

This article was first published in Business Insider.

Disruptive commerce founders want to revolutionize what we buy, how we buy, or who we buy from. But commerce is a notoriously competitive space with unique hurdles. Standing large against that backdrop is Amazon.  

It’s safe to say that Amazon is the Goliath in the arena. Spurred by the pandemic, US online sales grew +30% year-over-year and the biggest beneficiary was Amazon. By the end of 2020, close to $4 out of every $10 spent online by the US consumer went to Amazon.

And yet, opportunities to capture consumer attention still exist. One only has to look toward Shopify’s $170 billion market cap and its strategy to arm the Davids entering the field.

In this David vs Goliath situation, where and how can startups compete to win?  

As a starting point, here are five observations on what it takes to significantly improve your chance of winning in an Amazon-first world.

1. Know your customer and what matters to them

This seems so silly and basic at first, but you’d be surprised. Oftentimes, we get mired in feature sets and forget to answer the critical starting question, “Who is our customer, what do they want, and what’s critically lacking for them today?”

Where I see startups frequently go amiss: Tackling perceived pain points that aren’t critical for their customer.

How do you know it’s critical? Customers open up their wallets. Better yet, they sing your endless praises, driving significant revenue through word-of-mouth.

2. Provide unique inventory that can’t be found on Amazon

Etsy provides handcrafted, artisanal goods.  The RealReal provides authenticated resale luxury. Dapper Lab’s NBA Top Shot (a Venrock portfolio company) sells unique moments in sports history.

What do they all have in common? They sell products that can’t be found on Amazon. If your inventory can easily be found on Amazon, what’s your competitive edge?

This is an area where founder creativity never ceases to amaze me. Five years ago, most of us wouldn’t have imagined paying for Cameo’s celebrity shout outs, or for Dapper Lab’s NBA digital collectibles. With the rise of creator-led experiences and newly emerging metaverses, we’re seeing a whole new set of discrete, digital-first goods that can’t be indexed and served up by Amazon’s existing taxonomy and marketplace.

3. Support repeatable purchase behavior

If you have a large captive audience (eg Facebook, Instagram) with multiple monetization streams, you can afford to focus on novelty, impulse items where purchase frequency is low. But if you’re a commerce-focused startup, it’s imperative that you’re driving stickiness as evidenced by repeat purchase behavior. We’re looking for customers who are willing to commit, not one-night stands.

Dollar Shave Club (a Venrock portfolio company) sells razors that are needed with such regularity that customers are willing to sign up for a subscription. Wish may feature novelty goods, but they also sell household goods that need regular replenishment. For the sneaker aficionados on StockX, collecting is an ongoing passion that requires replenishment of new finds.

The key is to support a pattern of repeat behavior that already exists in the offline world.

4. Leverage data to inform a continuously improving, personalized experience

We’re still in the early innings of personalization. The old days of guessing your customers’ preferences a year out are over. But compare the personalization of your TikTok feed to the personalization of your Amazon feed. One is clearly superior.

Just remember, it’s as simple and as hard as delivering the right product at the right time at the right price.

5. Harness technology to support newly emerging consumer preferences

I get the most excited when I see the intersection of two things — new technology or applications thereof with newly emerging consumer preferences. Here are two examples:

One, the emergence of iPhone enabled services just a click away from your couch. At the same time, we work more than ever before, putting an ever increasing premium on convenience. You put the two together, and you get the on-demand economy.  

Two, the increasing sophistication of fertility treatments afforded parents-to-be with expanded options for growing their families. At the same time, women are having children later in life than before, due to a number of factors including career expectations, economic stability, and changing cultural norms. This represented an opportunity and unmet need across women’s health and fertility.

We’ll look back on 2020 and 2021 as a messy cauldron of new realities and ideas, many of which feel overwhelming at the moment, but I predict will birth a groundswell of marked innovation. It’s in this messiness that new opportunities abound.

If you’re a founder that’s passionate about re-imaging the future of commerce, I’d love to hear from you!  You can reach me at jpark@venrock.com


David vs Goliath: 5 Strategies for Commerce Startups to Succeed in an Amazon World was first published in Substack.

Source: https://juliepark.substack.com/p/david-vs-goliath-5-strategies-for

Running Through Walls: No Egos, No Jerks, No Politics

Venrock partner Camille Samuels speaks with Angie You, CEO of Amunix, and Rich Heyman, Chairman of the Board, about the dynamics between a CEO and a Chairperson that foster a successful company. You and Heyman dive into the importance of mutual trust and respect between a CEO and the Board, and You shares her passion for people that makes her such a great talent hunter. You shares her experience as an Asian female CEO that has busted through multiple ceilings, and how her supportive friends and network help to make the CEO’s role less lonely. They also discuss how they’ve built an incredibly diverse management team at Amunix and why diversity of thought is so important.

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Want more? Here’s the latest on Running Through Walls.

Venrock partner Nick Beim speaks with Jason Wenk, founder and CEO of Altruist, about his mission to increase the accessibility of great financial advice. Wenk walks through his early entrepreneurial endeavors and explains how they’ve contributed to the creation of Altruist. As his leadership style has evolved over the years, Wenk shares the biggest lesson he’s learned while building Altruist and how he’s embraced the fact that it’s okay to not know everything.
  1. What Financial Advice Should Be
  2. The Recipe for Drug Discovery
  3. No Egos, No Jerks, No Politics
  4. Inclusion Comes First
  5. Winning the Digital Shelf

The $1BN GMV Livestreaming Startup You’ve Never Heard Of

In China, livestream commerce is a $60B market and growing.  Think QVC but interactive, mobile, and highly entertaining.  Ever since Connie Chan’s illuminating post on China’s livestreaming boom, there’s been ongoing debate as to whether or not livestream commerce will catch on with the US consumer.  Will she or won’t she buy?  It’s the perpetual question.

Let’s put this debate to rest.  

Most folks haven’t yet heard of CommentSold.  It’s based in Huntsville, Alabama.  Its founder, Brandon Kruse, is quiet on social media.  And yet, he’s quietly built a powerhouse supporting over $1Billion of livestream GMV.  Yes, you heard that right.

I first ran across CommentSold over the winter holidays.  I was on my couch doomscrolling through Facebook when I noticed a particular trend:  Small boutique owners and resellers, mainly women, hosting livestreams across a wide range of categories from candles to jewelry to clothing.  And their audiences were tuning in daily to engage, interact, and shop – often after dinner or after the kids were asleep.

Southernangelsllc.com | Accessorizewithstyle.com | Simplyobsessed.com 

In the left corner of these livestreams, I noticed the same “Comment” callout.  Having worked at FB, I knew this wasn’t a FB call to action.  Intrigued, I tracked down the origins of “comment selling”, and came upon CommentSold.  

Simply put, CommentSold provides custom checkout and unified invoicing and order management to allow small business owners to easily sell across multiple platforms, whether that’s social channels (FB Live, FB Groups, and IG), an eCommerce webstore or their own branded mobile app through CommentSold.

Having been raised in the south and midwest, I recognize these small business owners.  They may have started their boutiques as side-hustles to supplement their family income, but many are now running full-time businesses.  And with stores closed and everyone cooped up at home, it was clear why they’d jumped online and brought their audiences with them.  

Their livestreams feel intriguingly personal – sometimes a husband or the kids pops by to say hello.  There are inside jokes starting to form amongst the members.  Judging by the comments, you sense the audience is decompressing with some wine on tap.  Or maybe that’s just me.

So what can we learn from CommentSold and Brandon’s success?  

1/ Livestream commerce fulfills an emotional need for American consumers.  Let’s put that debate to rest.  And instead move on to the more interesting question of how it’ll morph and expand in the US, whether as standalone entities or as part of broader social platforms.

2/ Small businesses are increasingly savvy, and in some cases leapfrogging larger brands in discovering and mining new channels.  They are multi-platform sellers and they’re not going back.  They’re no longer content to rely on their physical stores – they’re quickly spreading their presence across multiple platforms and multiple mediums.

3/ Fantastic founders aren’t bound by geography.  They don’t need to live in SF, NY, Austin or even Miami.  Let’s find them and fund them.  I grew up in Nashville and Peoria.  My friends and neighbors were just as smart & interesting with unique viewpoints as the folks I met later in life in New York and San Francisco. 

If you’re like Brandon and quietly building against an audacious goal with seeds of momentum, I’d love to hear from you!  You can reach me jpark@venrock.com 


The $1BN GMV Livestreaming Startup You’ve Never Heard Of was originally published on Substack.

Source: https://juliepark.substack.com/p/the-1bn-gmv-livestreaming-startup

Overcoming the Market Dominance of Hospitals

This article first appeared in JAMANetwork.com. It is co-authored with Soleil Shah and Amol S. Navathe.

Amidst remarkable uncertainty for its future, one of the most concerning and constant trends in US health care has been the increasing consolidation of health delivery organizations. In health care, 2 main forms of consolidation exist. Horizontal consolidation occurs when hospitals or physician groups merge together, enabling the combined entity to increase its market share. For example, in 2015, Stanford Health Care merged with ValleyCare Health System, combining a 2-hospital 613-bed academic medical system with a 242-bed hospital. After hospitals merge, a market often becomes less competitive because of decreased hospital competition. Vertical consolidation occurs when a hospital increases its employed physicians by acquiring a physician practice. Between July 2016 and January 2018, hospitals acquired 8000 medical practices, and 14 000 physicians left private practice to become employed by hospitals.1 This process makes the physician market less competitive by reducing the number of physicians vying for patients.

The coronavirus disease 2019 (COVID-19) pandemic may exacerbate both types of consolidation. Sudden declines in utilization and revenue have threatened financial sustainability or imbued uncertainty into the future of some hospitals and physicians. In a July 2020 survey of 230 independent physician practices, 60 (26%) were considering partnering with a larger entity due to COVID-19.2 Furthermore, of 58 independent physicians without ownership in their practice, 23 (40%) considered employment, creating additional barriers for independent practices to remain competitive.3 Notable hospital mergers have also taken place within the pandemic period. In October 2020, Atrium Health completed a merger with Wake Forest Baptist Health, creating one of the nation’s largest health systems by consolidating 42 hospitals across 4 states (North Carolina, South Carolina, Georgia, and Virginia) with an expected $11 billion in combined net revenue.

Hospital consolidation in the past decade has not improved quality. Among 246 acquired hospitals and 1986 control hospitals, being acquired was associated with a moderate decline in performance on an aggregate patient experience measure (from the 50th percentile to the 41st percentile) but no significant changes in 30-day readmissions or mortality rates.4 Due to a lack of competition, the prices for services provided by physician practices tend to increase after acquisition.5 Additionally, legal limitations have weakened the ability of the Federal Trade Commission (FTC) to enforce antitrust rules on nonprofit hospitals, even though these hospitals are involved in the majority of hospital and health system mergers.6 Thus, consolidation and the creation of multistate hospital systems could continue to have potentially adverse consequences for patients. A new economic and policy framework designed to limit anticompetitive and therefore anti-consumer incentives by market-dominant hospitals (MDHs) may help mitigate the negative consequences of consolidation.

Factors That Influence Health Care Consolidation

Consolidation has been a predominant business strategy for hospitals and physicians in the United States for decades. Hospitals consolidate to gain market share and use resulting leverage to charge higher prices to private payers or employers large enough to self-insure. One major reason this may occur with relatively little resistance is the nature of health care markets. Numerous plans compete to offer health insurance to employers, and employers that self-insure must select from among these plans or third-party administrators (TPAs).

To attract employers, payers and TPAs strive to offer large networks of clinicians and health care centers to minimize care disruptions for employees. But when most physicians in a region are employed by a large hospital network, private payers and employers often have limited options other than to contract with that network, forcing them to tolerate 6% to 10% increases in prices each year.7 Adding to their leverage, these large networks often offer differentiated services like organ transplants or advanced specialty therapies that make them a “must-have” in private-payer or employer networks. Thus, the financial incentive for hospitals to merge or acquire physicians to gain must-have status is high.

Hospital consolidation is also supported by the nature of antitrust regulations, which are limited by how markets are defined. Since the 1990s, academics and regulators have defined local markets in health care using tertiary hospital catchment areas or hospital referral regions (HRRs). HRRs were constructed based on referral patterns of cardiovascular and neurosurgery hospitalizations from 1992-1993 Medicare data for research purposes.8 Yet these outdated HRRs meant for research are frequently used in antitrust enforcement today, despite the hospital mergers that have occurred since their development. In 2018, a review of community hospitals reported that 3491 of 5198 hospitals (67%) belonged to a multihospital health system, compared with just 2524 of 4956 (51%) in 1998.9

HRRs also usually encompass areas much larger than what is practical for most patients to conveniently access. In major metropolitan markets, patients often choose between one or 2 hospitals within a small radius of their residence.10 For example, the Manhattan HRR includes all 4 New York City boroughs other than the Bronx, even though most patients in Manhattan may not travel between boroughs for care. This means hospitals tend to have pricing power much greater relative to their defined market share in the HRR. Thus, using HRRs hampers antitrust regulators from adequately recognizing and responding to the local effects of hospital consolidation.

Now, as hundreds of independent physician practices and smaller hospitals experience revenue losses due to COVID-19, the economic incentive for hospitals to merge, acquire physician practices, or employ more physicians is likely increasing. Both forms of consolidation could lead to more MDH networks. Therefore, it is important for regulators to develop a framework that accounts for the true extent of market dominance among large hospital networks when determining their influence on prices.

Potential Solutions

A first step to addressing hospital consolidation is to update HRRs or develop a methodology for defining hospital markets based on more recent data and geographic care utilization patterns by patients. Regulators could consider localized health service use patterns to match patient choices with market definitions; for example, how likely is it for patients to cross bridges, county lines, or leave their cities for care. Medicare Payment Advisory Commission areas, which are metropolitan statistical areas within a state or rest-of-state nonmetropolitan areas, might be a desired middle ground between county-level and state-level definitions that could be evaluated. Regardless, the definition of hospital markets used in antitrust enforcement needs to be redefined using updated empirical analysis. It is even possible that market definitions will vary by service type (eg, hospital competition over heart valve replacement procedures vs obstetric care).

Once fair market definitions are established, hospitals with more than 50% market share for any service should be deemed as having an MDH label, which could serve as a warning signal for regulators and prompt scrutiny over anticompetitive practices of the new entity. Furthermore, MDHs could be required to accept all forms of public insurance and invest a fixed percentage of their total revenue into health care provisions for low-income or marginalized communities. This could help limit declines in quality and access that result from mergers.

MDH regulation could target horizontal consolidation but may not be sufficient to reduce vertical consolidation since the incentive for financially struggling physicians and smaller practices to be acquired by larger hospitals still exists. Vertical consolidation could be addressed if the federal government coordinated across sectors to create an MDH redistribution fund (MRF). The beneficiaries of the fund would be physician groups and hospitals in financial need, which would reflect their Medicaid case mix, critical access status, and perhaps revenue loss as a result of COVID-19 capacity constraints. MDHs that are nonprofit entities, and thus benefitting from less FTC scrutiny, could be required to donate 5% of their tax exemption to the MRF. The federal government could then redistribute the MRF proceeds to its beneficiaries as loans or, if the beneficiaries choose to remain independent, as grants instead. Insolvent or cash-strapped physician groups that would otherwise consider employment under a larger hospital could then have greater ability and incentive to remain independent. These efforts could help ensure physician markets remain competitive and offer consumers more choice.

Conclusions

COVID-19 has the potential to exacerbate the nation’s history of hospital consolidation. Stronger incentives to counteract consolidation could protect patients against potential adverse effects of anticompetitive hospital networks. Policy makers and regulators should consider legislation that defines and regulates MDHs, while promoting asset redistribution via an MRF, as a potential safeguard to the adverse consequences of the consolidation trend.Back to top

Article Information

Corresponding Author: Robert P. Kocher, MD, Stanford University School of Medicine, 291 Campus Dr, Stanford, CA 94305-5450 (bkocher@venrock.com).

Published Online: February 19, 2021. doi:10.1001/jama.2021.0079

Conflict of Interest Disclosures: Dr Kocher reported working at Venrock, a venture capital firm where he invests in health care businesses, and serving on a board for Premera. Mr Shah reported receipt of personal fees from The Advisory Board Company outside the submitted work. Dr Navathe reported receipt of grants from Hawaii Medical Services Association, Anthem Public Policy Institute, the Commonwealth Fund, Oscar Health, Cigna Corporation, the Robert Wood Johnson Foundation, Donaghue Foundation, the Pennsylvania Department of Health, Ochsner Health System, United Healthcare, and Blue Cross Blue Shield of North Carolina; other from Integrated Services (board member; not compensated) and Embedded Healthcare Equity; and personal fees from the following: Navvis Healthcare and Agathos (advisor services); Navahealth (principal); University Health System-Singapore and the Social Security Administration-France (advisor and travel); Elsevier Press (honorarium for editorial role); the Medicare Payment Advisory Commission (commissioner and travel); and the Cleveland Clinic (speaker fees and travel) outside the submitted work.

References

  1. Physicians Advocacy Institute.  Updated physician practice acquisition study: national and regional changes in physician employment 2012-2018. February 2019. Accessed January 3, 2021.http://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/021919-Avalere-PAI-Physician-Employment-Trends-Study-2018-Update.pdf
  2. McKinsey and Company.  Physician employment: the path forward in the COVID-19 era. July 17, 2020. Accessed November 22, 2020.https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/physician-employment-the-path-forward-in-the-covid-19-era#
  3. Merritt Hawkins.  Survey of America’s Physicians: COVID-19 Edition. August 19, 2020. Accessed February 17, 2021.https://www.merritthawkins.com/trends-and-insights/article/surveys/survey-of-americas-physicians-covid-19-edition/
  4. Beaulieu  ND, Dafny  LS, Landon  BE, Dalton  JB, Kuye  I, McWilliams  JM.  Changes in quality of care after hospital mergers and acquisitions.   N Engl J Med. 2020;382(1):51-59. doi:10.1056/NEJMsa1901383PubMedGoogle ScholarCrossref
  5. Capps  C, Dranove  D, Ody  C.  The effect of hospital acquisitions of physician practices on prices and spending.   J Health Econ. 2018;59:139-152.
  6. Schwartz  K, Lopez  E, Rae  M, Neuman  T.  Kaiser Family Foundation website. What we know about provider consolidation. Published September 2, 2020. Accessed December 5, 2020.https://www.kff.org/health-costs/issue-brief/what-we-know-about-provider-consolidation/
  7. PricewaterhouseCoopers Health Research Institute.  Medical cost trend: behind the numbers 2021. Accessed November 22, 2020.http://www.pwc.com/us/en/health-industries/behind-the-numbers/index.jhtml
  8. Jia  P, Wang  F, Xierali  IM.  Evaluating the effectiveness of the hospital referral region (HRR) boundaries.   Annals of GIS. 2020;26(3):251-260.
  9. American Hospital Association.  Trendwatch Chartbook 2018. Table 2.1: Number of community hospitals, 1995–2018. Accessed January 3, 2021https://www.aha.org/system/files/media/file/2020/10/TrendwatchChartbook-2020-Appendix.pdf
  10. Kocher  B, Emanuel  EJ.  Overcoming the pricing power of hospitals.   JAMA. 2012;308(12):1213-1214.

Source: http://bobkocher.org

Running Through Walls: Inclusion Comes First

Eric Brown, CEO of Dynamic Signal, joins Venrock partner Brian Ascher to speak about diversity, equity, and inclusion. Brown believes you can’t have great culture without putting inclusion first, which is why it was the first thing on his agenda as he stepped into his role as CEO of Dynamic Signal last year. Brown discusses some of the company’s initiatives, including the Mentorship and Access program, and shares how these programs have been received so far. Brown also shares the challenges of balancing family and work and how he had to purposefully make space for each of them to exist in harmony. 

  • Subscribe:

Want more? Here’s the latest on Running Through Walls.

Venrock partner Nick Beim speaks with Jason Wenk, founder and CEO of Altruist, about his mission to increase the accessibility of great financial advice. Wenk walks through his early entrepreneurial endeavors and explains how they’ve contributed to the creation of Altruist. As his leadership style has evolved over the years, Wenk shares the biggest lesson he’s learned while building Altruist and how he’s embraced the fact that it’s okay to not know everything.
  1. What Financial Advice Should Be
  2. The Recipe for Drug Discovery
  3. No Egos, No Jerks, No Politics
  4. Inclusion Comes First
  5. Winning the Digital Shelf

Building for SMBs: 7 Mistakes & Lessons Learned at Facebook

Before I joined Venrock, I was lucky enough to lead the long tail ads business at Facebook.  My customers were realtors, restaurants, accountants, and everyone in between.  Having worked with small businesses throughout the pandemic, I am convinced, now more than ever, that the time is ripe to better support this receptive audience. Building an online presence or embracing digital tools is no longer a “nice to have”;  it’s a survival imperative for most.  This is a profound shift from an audience that has historically been ambivalent to the prevailing “software eats world” narrative.

Although small businesses may ultimately want similar things as enterprise clients (eg find new customer leads, save time & money), the nuances of how she’ll get there will be completely different.  How deeply we understand these differences will determine our success in winning her over.  In sharing my lessons learned – some obvious and some not so obvious – my hope is to shortcut those learnings as we build to support this audience.  

1/ Reskinned enterprise tools =/= SMB tools

At FB, the ads tool for SMBs was internally called “Lightweight Interfaces.”  It was basically a slimmed down version of our core power tools, with a simplified UI.  The front end was different, but the backend was essentially the same.  This was a massive problem.  Here’s one example why:

When I worked with Walmart’s marketing department, there were individual leaders for brand, performance, and social marketing.  We could build distinct products tailored to each.  My SMB client on the other hand?  She was the brand, performance, and social marketing lead rolled up into one.  And she expected one solution that delivered all three outcomes.  She wasn’t asking for a UI/UX change – this was a fundamentally different product than what we offered.

2/ Customer ROI needs to account for both investment of time & money

When I started working with SMBs, I intrinsically acknowledged that our tools needed to be cost effective.  But until I began shadowing our customers, it didn’t really sink in how time constrained they were.  The SMB client had a full-time job – whether that’s selling houses, providing tax advice, or baking cakes.  And now she’s expected to be a marketer, accounting guru, and compliance expert.

3/ Deliver immediate results

Before FB, I had largely worked with Fortune 500 clients with six figure test budgets to “test and learn” over a pilot period.  Test budgets for SMB customers?  LOL.  

4/ Speak plain ‘English’, and don’t forget to localize

When I first transitioned from finance to tech, I kept a little notebook where I wrote down all the terms I didn’t understand.  Then I’d go home and Google terms like “impressions, click through rates, and frequency caps.”  I was mystified and terrified those first few months.

When I started covering SMBs, those emotions came rushing back.  Because in speaking with our customer, we realized that’s how she felt.  We didn’t get better overnight, but this awareness pushed us to get to the heart of what we intended to communicate, vs relying on shorthand.

In that same vein, as startups go global, increasingly from the early days, a reminder to consider how your messaging translates abroad.  Case in point:  We were excited to launch “Ads Camp”, a guided tour on advertising basics.  It was a cute take on summer adventure camps.  But as a colleague from Singapore pointed out, this concept had no relevance in Asia.  D’oh.

5/ Provide encouragement and celebrate the small wins

It’s human nature to enjoy doing the things we’re good at, and avoid situations where we feel inadequate.  It’s why I always avoided playing sports in school.  

The SMB customer feels the same way in this new world of digital tools.  She’s having to learn new skills, and learn them fast.  In situations like this, we all need encouragement.  At FB, we learned to identify ‘small wins’ and celebrate them, showing how she was one step closer to achieving her goals.  This is a concept that many workout apps deploy, and it works elsewhere.  

6/ Mobile first increasingly wins

Although consumer apps are increasingly mobile only, many business apps are still approached with a desktop-first approach.  This isn’t entirely without merit.  When’s the last time you pulled up gDocs or Excel on your phone? But unlike the desk worker, your SMB customer is at the register, on the sales floor, or at a client site.  

In emerging markets, she may not even own a computer.  Partly because of cost, but partly because she doesn’t need to – she’s conducting all her transactions via WhatsApp on her Android phone.  Want to be part of her workflow?  Design it for mobile.

7/ Aim for consumer-grade tools that auto-optimize

TikTok makes it super easy to create content.  Spotify makes it dead simple to find your songs.  Then why do most SMB tools require endless webinars and $100/hr consultants to get going?  

Most consumer products are quietly humming in the background to continuously optimize your experience.  When’s the last time you checked your IG or TikTok analytics to improve your feed?  Answer:  Never.  The same should be said for SMB products.  The best products auto-optimize, vs putting the burden on their users.

Building for SMBs may be hard, but I can’t think of a worthier mission.  If you’re a founder that’s passionate about supporting the SMB customer, I’d love to hear from you!  You can reach me at jpark@venrock.com


Building for SMBs: 7 Mistakes & Lessons Learned at Facebook was originally published on Substack.

Source: https://juliepark.substack.com/p/building-for-smbs-7-mistakes-and

Running Through Walls: Winning the Digital Shelf

Venrock Partner Mike Tyrrell speaks with Jason Purcell, co-founder and CEO of Salsify to discuss his career and how Endeca’s $1B exit lead to the creation of Salsify. Purcell explains how we are in the midst of a “masses of markets” world, and delves into how commerce experience management platforms like Salsify are helping brands navigate a space where consumers engage with products on a broad variety of channels and win on the digital shelf. Purcell shares the toughest part of his journey at Salsify and what the company sees as its “North Star”. They also discuss the importance of repeated clear communication in leadership strategy, particularly when a company grows past the startup stage.  

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Want more? Here’s the latest on Running Through Walls.

Venrock partner Nick Beim speaks with Jason Wenk, founder and CEO of Altruist, about his mission to increase the accessibility of great financial advice. Wenk walks through his early entrepreneurial endeavors and explains how they’ve contributed to the creation of Altruist. As his leadership style has evolved over the years, Wenk shares the biggest lesson he’s learned while building Altruist and how he’s embraced the fact that it’s okay to not know everything.
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