Sami Inkinen of Virta Health joins Nick to discuss Lessons from Founding Trulia to IPO, How to Enter New Industries with No Experience, and Why Technology is Critical to Combat Diabetes in an era of GLP-1s. In this episode we cover:
- Early Days of Trulia, Product Market Fit, and Challenges Faced by the Founder
- Building a Successful Company Without an Exit Strategy
- Reversing Diabetes through Nutrition and Technology
- Using Biomarkers and Software to Track and Adjust Diet and Lifestyle for Optimal Health
- Addressing Obesity through Telemedicine and Value-Based Care
- Healthcare ROI and Patient Retention in a US-Based Digital Health Platform
- Managing Complex Stakeholders in Healthcare and Real Estate Industries
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0:18
Sami Inkinen joins us today from Denver, Colorado. He’s the CEO and founder of unicorn Virta Health, a cutting-edge company dedicated to reversing type 2 diabetes through an innovative, data-driven approach. Prior to founding Virta Health, he was the co-founder and COO at Trulia, the online real estate marketplace that IPOd and resulted in a $3B exit. Sami, welcome to the show!
0:42
Well, Nick, thank you so much for having me.
0:45
It’s a pleasure to see you, sir. And my old stomping grounds in Denver, Colorado. You know, I gave a little brief intro, but can you give us kind of a two minute background on your path to becoming an entrepreneur?
0:57
Sure. Well, I grew up in Finland on a farm and my parents didn’t even go to high school. So I guess my question is, how the heck did I end up in America and become an entrepreneur. But I think there’s a couple of things. So I got into computers very, very early. And in fact, I think I was 15. And I was running. One of the first DBS is bulletin board systems from my house as a 1516 year old, one of the first ones in Finland. And I loved putting that thing together. And some users were paying me for those subscriptions. So this was kind of pre internet. And I love this feeling of being able to hack a useful thing together, and then you have people using it, and maybe even paying for it. And that was just captivating. So I think that was kind of my first entrepreneurial experience. And then that kind of fueled me forward. And then in terms of coming to American Silicon Valley, just very briefly, I came to America 2003. And the reason for that is I always say this, if you’re a hockey player in Finland, you want to go to NHL, if you’re an actor or an actress, you want to go to Hollywood. And I felt like as an entrepreneur, Silicon Valley is the place to be. It’s the best competition best coaches, best helpers, best VCs best everything. And so that was my dream. And I came to Silicon Valley and kind of followed that entrepreneurial dream and passion ever since. Amazing.
2:17
And how did you get linked up with your, you know, your co founders and in start Trulia?
2:25
Yes, so So truly, I co founded around 2004. This on my real estate marketplace. And funnily enough, it was founded by two European guys, me and Pete Flint. And I studied physics in Finland. He’d studied physics in Oxford, in England, and we met at Stanford Business School. So that’s kind of how we met. And we’re both very entrepreneurial. And we had kind of experienced the internet at one point in our respective countries, him in UK lastminute.com. And I had started a software company in Finland. So we had very similar backgrounds. But it’s kind of funny that two immigrants fresh off the boat with physics degrees, and then go and try to change the residential real estate industry in the US. And but that’s that’s kind of how it happened. And honestly, America is probably the only place in a world where you can have, again, to immigrants, the rest of the boat, knowing nothing about the industry, and then go and change you.
3:27
Amazing, amazing. I’d love to hear about that early journey and how you found product market fit with Trulia?
3:35
Yeah, well, honestly, the kind of big picture was a conviction, the big picture was conviction. And then I’ll share a few things about the product back then the conviction was that internet had gone from general search, or I should say, portals to church search, like a horizontal search. So Google, you find anything. But then that search was starting to become vertical, if you will, meaning that, you know, you could search cars and you find your dates and, you know, or spouse from maths.com. And you could find airline tickets from Expedia, hotels, and so forth. So the big picture for us was that it was very clear for us that somebody is going to build a consumer oriented destination and service where you can find your dream home. And that did not exist at the time. But again, you could you could you would have a consumer destination of sort of vertical search for cars and spouses and airline tickets and hotels. So that was our conviction that it will happen and it felt like a no brainer for us. But in terms of the specific, I guess, product market fit, the few moments where I felt like we are absolutely on the right track with the product because you can have that vision but if you don’t have the like a tactical product market fit like no traction, right? And the two things that happen was one this sounds like so 1980s But the Google Maps He was just launched. And we were able to literally hack into it and create an interactive mapping interface where you could see all that houses for sale around that corner. And this This sounds crazy. But before that, real estate listings were like, more or less like a PDF file from a newspaper. It’s like a list. And I Yeah, at least, and I remember show demoing this to a real estate company and their executives. Okay, what do you think? Would you like to have listings here, and there VP of marketing in a Bay Area, one brokers from just like, his jaw dropped and touch the table, and he’s like, I need to get our founder and CEO here. This is incredible. This sounds so funny. This was 2004, I guess. But they were like, This is insane, that you can actually have interactive map, you move it and click this bubble and say this house. So that was one feeling. And we had a few of those demos that, wow, there’s something we have the feature, we have sizzle here, in this product that’s going to excite users. So that was one. And it happened pretty quickly, maybe like made May or June 2005. And then the other piece was, we realized pretty early that most people buy a home only every five to six years. So creating a brand around that is much harder than airline TV that you buy once a week or once a month, or once a quarter. So we understood the power and importance of search engine optimization, or SEO, which at the time was still kind of pretty new. So we knew that if you’re looking to buy a home, let’s say single family home in Denver, or I don’t know, condo, Upper East Side, truly, it has to be the first search result on Google results. So that was the other product market fit piece, which was distribution effectively. And again, this sounds very 1980s because everybody knows SEO, but at the time 2004. This was kind of a new thing, and we crushed it. And so and still today, if you if you go I don’t know, Upper East Side homes for sale, I’m sure Trulia is among top five or top 10 search results. So those two were absolutely essential for the initial, I’d say first two year growth and success of the company. So amazing.
7:17
You know, we’ve had many different unicorn founders on the program, but to have somebody that’s built a household name, like yourself, is incredible. And you’re in good company with folks that have started Grub Hub and SeatGeek and others. But I’m curious, you know, what, what did you find was the most challenging part of the journey at Trulia?
7:38
Everything? I mean? Well, let’s see, I can I can give a specific story, but you know, like managing your own psychology and as a founder, how do you, you know, stay sane and energized and your energy feeds off of other like, I do think one of the most challenging things is, especially if you’re a first time entrepreneur, like how do you manage yourself, your mind and your energy? Because that affects how you make decisions, how the team operates, what does the team feel how confident then, and so forth. So I would say that but in terms of if I give just sort of the things that we’re coming at our face kind of situations, I’ll give you a couple of examples. Number one was the day after our launch. So we had just raised I think, our Series A and September 2005, we launched this wonderful online real estate destination. And literally we are a couple of days out. And you know, at the time it was called to launch as a beta. So we launched the beta so people can come and you know, we have this sizzle, use the map and you can find on sale, and then real estate companies whose listings we had on the website sent a cease and desist letters. Cease and desist letter, you have to take down this content. You don’t have agreement with us we don’t like obviously, we we thought you know, we have fair use of copyright and this whole stuff, but they’re like, We don’t care. Susan does. We’re going to sue you you have to take it down. Yes. And so literally within week or weeks of launching a search engine we have a search engine with no search results. Now this is one of 100 stories I could I could tell we just raise series A from XL we launched we get some PR I don’t know maybe it was red herring or Fast Company that still existed wrote about us. And then we have there’s nothing so you didn’t see
9:25
so how long was the gap before you got the results back?
9:28
It was I think now I am absolutely wrong because I blacked out this time but it’s months not years but months. Okay. And you know, I could spend an hour telling like how to but it was so Anyways, that was one and then the other thing it’s very important I think I mentioned here because we were real estate company and those folks who are old enough to remember 2008 Lehman Brothers collapsed and literally the piece of economy that primarily fell apart. Guess what it was? Real estate here sector Oh 2008 We are unprofitable we’re in this kind of like, I don’t know. 10 15 million Raymond like, it’s kind of early. It’s not, you know, it’s a decent business. But so our clients start going bankrupt. And nobody cares about real estate. Nobody wants to spend money on real estate real estate advertising. That was kind of like running through Sahara, with no water. Like running through Sahara with nobody, you know, like, there is no light at the end of the tunnel. Or if there is a default like that. It’s a train. And, you know, the resources we have are limited. And so that was another is honestly I didn’t say this. I didn’t vocalize this, but I did not think we would make it. We made it and it was a learn a lot of Western automatics,
10:48
how much runway in months did you have on hand when the crash hit? Yeah, so fortunately,
10:52
and I’ve used this lesson with verta health now as well, we raised a Series C, in March of 2008. And Lehman Brothers collapsed in like, August, September, October, something like that. Yeah. And we raised the Series C, this thinking we don’t need the money. We don’t need the money. But let’s take then whatever we to, I don’t know 20 30 million or something. I don’t actually not that much. It was 50 million or something, we raised a total of 33 million of zero to IPO. So then we were pretty capital efficient. But anyways, I don’t remember how many months of runway, but that wasn’t the most like it wasn’t like we were, you know, looking at an empty checking account within 30 days or 60 days, we always had some buffer, a decent buffer, but we got quote unquote, lucky that we raised money when the market was hot, and we didn’t need the money. Well, guess what? That is not an anomaly or luck. Now I know it. That’s exactly what you always have to do. Like you raise the capital when you don’t need it. Yeah. Especially if you’re a company that still needs to build for a couple of years. And I’ve done you know that with verta. Health. And sure enough, we got lucky two dozen, two and two dozen one. Sorry, 2021 2022. But yeah, it was but it was tough time. It doesn’t matter. If you have money in a bank, your clients go bankrupt, your revenues are going growing negatively. Are you going down? It’s kind of like this is not fun. Uh, we got got through it. And but that is the norm, like anyone who’s listening who hasn’t started a company, it’s like, think maybe they’re thinking like, Oh, my God, I hope if I start something like that, like, I hope that unlucky thing doesn’t happen to me. That’s bullshit, it will happen to you, it will like countless things that is the norm. Because when you’re building something new, by definition, there’s no roadmap to follow. And competition is trying to crush you. And for you to break through and do something remarkable. unexpected things happen. That is almost by definition.
12:55
I mean, we’ve had a bit of an existential crisis hit the sea, right, coming off. 21, you had one in your industry? How long did did it take before you felt comfortable again, after the 2008 collapse?
13:11
So here’s the beautiful thing, once we got through. And again, I kind of I’ve applied that lesson at verta health when COVID hit, I didn’t know it at the time, but I would say 24 months for us a truly, but here’s the beautiful thing, you have to figure something out to get through it, obviously. And if you make the wrong decisions, company goes out of business, but you have to figure something out. And it is a very coming together kind of moment practically and emotionally for the team. It’s like, holy shit, no more bullshit. Here’s the reality. Something needs to radically change. I think it’s possible that we’ll get through this. But we all know that no one can boast it and say there’s 100% probability we succeed, we can both listen, here’s the two things we think we have to do. Let’s go. We don’t know if this is going to work out. But it is incredibly unifying and brings people together. And it’s like 100%, transparency and honesty. It’s a beautiful time actually. And then if you get through it, guess what? The team trust you they know you don’t bullshit. The team trust themselves, because they go through something remarkable that they thought was potentially impossible. And then thirdly, you basically have a business model, operating model, economic model that works in the toughest of the times. And so then when you get the side wins from a headwind side when a little bit of a tailwind, is actually beautiful. And so that’s what happened to Trulia. So about two years 2010 We’re like, okay, we’re hitting the stride. This is working and then 2012 We went public with, you know, good growth, good economics decent scale, and so it was about two years. Love it.
14:57
Never let a good crisis go to one extra skills, your anti fragility when you can 100%. So Sami, I’m sure there are opportunities to exit along the way, you know, how did you know, when it was the right time obviously took it all the way to IPO and had this massive exit. But I would imagine, you know, this was a very valuable asset that many were interested in acquiring along the way. Yeah.
15:25
Well, first of all, we didn’t start truly at two exited at all me op, we wanted to build something wonderful a product people use, build a business around it. And you know, if it works out, well, like, it should be the Expedia of real estate for the next 30 years. Same for me at verta health. In fact, I wrote a blog post on Medium post, I guess, this time, because a lot of people were asking me early, like, what’s your exit strategy? I’m like, that is exactly like asking me when I get married, and I’d be married for 14 years. What’s your exit strategy? That’s ridiculous. I don’t have an exit strategy to leave my, my wife. If I had, guess what it would be doomed, you know, the marriage would be doomed. And I probably should not be married. Like, I don’t have an exit strategy for my marriage, it may fall apart. But I don’t have the same for like, that is my attitude for building a company. Like I don’t know, if you have an exit shirt. That said, obviously, when you have investors is a family business. It’s not like your personal lifestyle decision, you know, economic speak. And so we did have a handful of situations where sort of outside parties, not Zillah, who we ended up merging at the end, who approached us, and you have to take it seriously. We have a duty for your shareholders. You know, we have VCs and so forth here. What’s the challenge for us? Well, first of all, we as founders wanted, like, eager to sell. But the challenge was always the following. We knew this would work, we could see three years down the road. But then buyers potential acquirers who weren’t crazy strategic, they valued everything Apple like what they see today, or, like next year. So it was always like, we knew it could be 10. And then the acquirer comes like, Oh, my God, we want to acquire you and scale this, and we’ll pay you two. And we’re like, Okay, well, we just have to be executing two years. And it’s 10. Like, why would we sell for two? Yeah. And so we had a few of those moments where there were serious acquires, we had to discuss with some of our board members, some investors, but it was very clear, it’s like they offering to and we know we all we have to do is just do the same thing for another two years, and it’s 10. So we had a few of those moments. And then with Zillow, it’s, again, it’s the investment banker talk is industrial logic makes sense? Industrial logic makes sense, which is to say bad, you have, you know, companies that together, it’s like, sort of one plus one is three, which was the case and then once we were public, there’s not that much you can fool around. Because if somebody makes an offer that you can’t refuse from an economic perspective. And you can see that, yeah, these two companies together, truly one plus one is three, it’s, you’re almost forced to force to do it. So that’s kind of what happened. But I think the foundational thing is we always wanted to build something lasting. And that was always on mindset. And it is that if you have a for profit company that’s not family owned. It’s sort of the nature of the game, that bigger face usually eats the smaller face. And then you end up with two or three big players in the industry. Right?
18:33
Well, kudos to you, sir. You’re in the point 000 1% that have actually done it. And you know, Sama, you’ve done these by entering new industries with limited domain experience. Right, you’ve done this twice. Now. You built two multibillion dollar companies. I’m curious, you know, how have you discovered the right insight and the right problem to address in an area where you have limited background? And what what is the playbook when you don’t have that experience?
19:00
Yeah, no, it is true. I guess there’s America, there’s this saying, like you succeed is like, once you are lucky and twice, you’re good. But my take honestly, it’s once you’re lucky and twice, you’re even luckier. So there’s definitely do I have a playbook? I don’t think so. But if I’m trying to extract some advice for others, because, you know, it wasn’t a complete random walk, I guess, I should say. So what I’ve observed, truly, and then verta health now solving diabetes and obesity in healthcare, which again, is similar. I’m physicist by training and been in tech all my life like I’m not a healthcare person. But the few things I would say is, number one, the insight that you might have as a founder, even if you come from outside, I do think this doesn’t make science but N equals one personal experience and conviction, personal experience and conviction. You know, Obviously you could be wrong. But I think that is needed versus some sort of, by the way, I worked in McKinsey way back when so like, I can do spreadsheet analysis and analysis. But usually when you are quote unquote disrupting or innovating in industry, you, you need something beyond just obvious logical analysis. And that’s usually a personal conviction. In the case of truly I was like, Hey, you can you know, this a consumer destination for everything except for real, like, I feel it in my bone marrow that that’s gonna happen. And then, of course, this Google mapping experience, like everyone was like, Holy shit, this is unbelievable. How did you do this? It’s like, okay, we’ve got something here. verta health, you know, people thought many people still think diabetes, type two diabetes is irreversible. You know, I had a personal experience, learn the science and personal experience to using a certain type of nutritional approach to improve and restore metabolic health and reverse prediabetes like I knew I could see that I could feel I’m like, I have a conviction that 99% of the world does not understand us see. So I think that’s one thing. personal conviction and, and to me, it’s always been like N equals one personal experience, like I can, if I see it, if I feel it, if I experience it. It’s true to me. Okay, so So that’s one thing, then the second thing is what I use this term, I’m like, yeah, it’s good to be naive, but don’t be stupid. So surround yourself with domain experts who’ve been there for 10 years, 20 years, listen carefully, very carefully, then selectively ignore and selectively ignore. And that’s a tricky piece. Because when we were starting Trulia, we spoke with people who had been in residential real estate, the first wave of sort of online tech, they all said, doesn’t make any sense. You can’t you million reasons why you can’t do it. Right? Well, if you could, if they knew how to do it, they would have done it. And so this is a tricky balance. Because I do feel you want to surround yourself with industry experts who know the ecosystem know the players, they know where the dead bodies are buried. So you want to learn all that stuff. But then there’s some piece of their advice that you have to ignore. Because if you don’t, you’re going nowhere. And it same with verta. Health, like I’ve surrounded, we have board members and experts and clinical experts and healthcare experts and this and that. But then you again, you need this personal conviction and say, Okay, well, I think that piece I can push through. And then the third piece I say, which is probably the hardest as you get going. There’s so many people who just, there’s inertia, and they’re like, Oh, well, that doesn’t work. It’s kind of like, you know, I’m sure Tesla had early days, they didn’t they didn’t go from electric to say, oh my god Ford’s winning the game, we’re gonna become a gasoline car. So you have to be like, imagine that like, Okay, this everything is in working, we just the Ford clearly doing it, right. So it’s, you have to be stubborn and say, I know, I have a conviction this works and take your advice. And I’m going to ignore all the people who are punching into my face. They’re throwing the wet towel, they say you’re crazy. And obviously, you might be crazy. So that’s a challenge. Like, how do you know if you’re crazy? Or if you if you just have the secret? that others don’t know that that’s a tough battle? I don’t know. I can’t tell you the playbook. So anyways, and then the last piece, I would say this is just company building one on one. If you have that personal conviction, you’ve surrounded yourself with experts, you kind of know what to do what not to do you ignore some of that advice. Then it’s just a plus everything a plus Team A plus investors, a plus Advisors, a plus board, it’s kind of like going to the Olympic Games. When you build a company like you said, you know, I built two multibillion dollar companies, once actual multi billion the other ones you could say it’s paper number, but whatever. It’s like trying to win an Olympic gold. Like it is that hard. You don’t win Olympic gold by talking. You win Olympic gold by having the best coach best nutritionist best is best that and then you work ridiculously hard. Minimum 10 years. So that’s the basics, the one on one, that’s the basics, like you need the best people best everything. And then you go and then good luck. Love it.
24:16
So So Sami, tell us what is the mission statement in the focus area at verta?
24:21
Yeah, verta. Our mission is reverse diabetes in 100 million people reverse diabetes in 100 million people. And the big picture is, you look pretty fit so and many Americans even have it. So this may be like really, but diabetes and obesity, the health epidemic of our generation, and sadly, you know, more than 100 feet more than half of American adults have either diabetes, obese, it’s insane. There’s billions of people globally. So that is the big freaking tsunami that’s killing us frankly, and then we’re running out of cash and the best that that humanity has to offer you Before Verda, was sponsored pharmaceutical companies, wonderful companies like Novo notice and Eli Lilly that sell drugs to treat the symptoms of those diseases, the symptoms of those diseases guess what is what it does, it makes the problem even bigger and more expensive. It doesn’t eliminate diabetes and obesity. So what we are doing is we say, Hey, these are reversible conditions. And the only way we’re gonna get out of this mess, help individuals save money is to address the root cause of diabetes and obesity, nutritionally and so we combine tech and nutrition to reverse the disease. So that’s what we do.
25:38
Tell us more on how you said you can combine tech and nutrition but can you give us just kind of the high level like yeah, is Yeah. facto solution here?
25:48
Yeah, yeah. Well, first of all, many people like Guinea really reverse diabetes. You know, I don’t have time to pull out peer reviewed papers. So we publish dozen peer reviewed papers, shown Yes, we can reverse sustain it five years. It truly works. We have patient we I have the verta t shirt. There’s this logo, tattoo or logo and we have not one, not two, not three, we have many patients we call the members who permanently tattooed this logo in their bodies. Wow. Permanently tattooed. So I say that’s just illustrate that persists. The outcomes we deliver. It’s it’s life changing life transforming for many of our members. And, you know, as a
26:29
result, the results persist. This isn’t a loser. Were they though? Yeah, you know, boomerang back. Yeah,
26:35
three months, six months, nine months results in obesity, diabetes mean nothing. Like you have to two year three year five year that’s when you change lives. And you can say it works. But anyways, do your question. It’s really a combination of two things. Again, it’s nutrition and texture, the meat is very, very briefly, and the nutrition side, the key thing, what we do, first of all, it’s all through lifestyle change. So we don’t sell food zippo, we’re not shakes, crap, whatnot, we don’t sell or deliver any food, it’s 100% IP, it’s all digital, all virtual lifestyle changes. And then we use nutrition in a way that eliminates hunger and cravings. So it’s not a starvation diet, it’s not count your calories. And the cornerstone of it is is around carbohydrate restriction. So we lower your carbohydrate intake and, and then highly individualize it to, you know, whatever your lifestyle, like we work with large employers like us for to structure ours, the only food they have access to is like fast food on the side of a freeway, we work with Native American tribes, like mass into it to messenger get acquired tribal nation, you know, these folks have access to food in casinos. And you know, Hispanic families, maybe a mom who’s cooking for five kids, like, we can be successful in any group, and we’ve analyzed this data to show that it is possible. But to do that, you have to be very good at individualizing the lifestyle change and you know, obviously, you may have a vegan vegetarian coming in, you can’t tell them to eat bacon, because they’re gonna run to the hills. On the other hand, if you have someone who’s like, I’m a barbecue, that’s my thing. You can’t tell them to steamed spinach for the rest of their life. This is what most diets are like, right? It’s like, okay, we have this vegetarian thing. It’s like, Well, okay, but I love bacon. So too bad. So it’s not so yeah, nutrition is one part. And it’s all through a lifestyle change, and digitally. The second piece is, is technology and we call it tech that powers humans. So we do have real medical doctors, we are telemedicine company, we do have coaches who are behind the screens. But software gives them superpowers to do it cost effectively, they can individualize and we can scale. But the key thing about the, how we use techies that we basically have a closed loop. So we track your biomarkers multiple times a day, through cloud, we get it. So it’s kinda like to give a little bit of engineering analogy, like self driving car, you know, the computer is trying to keep the car between two lanes, I don’t know yet yellow and white or white and white. And whenever it’s a little bit too much to the right, you know, it tends to steering row to the left. That’s how verta works. So we track your biomarkers multiple times a day, and from that data, we know objectively what’s happening in your body and then we can adjust your lifestyle chains like to me Yeah, and like okay, you know that that. So we don’t even ask our members to like, oh, have a food diary and like, let’s come to Account No, we actually track your biomarkers and we know when our system knows from that data, what you had too much what you had too little. And then we use to humans and software, your chest. So it’s again, it’s like a self driving car. We keep you between the two lines. And we do it in such a way that there’s no hunger, there’s no cravings. It’s not a willpower exercise. So that’s a little bit of I don’t know if that makes sense. But companies and industries,
30:02
you get the biomarker, you get the biomarker feedback loop. But how do you know what they’re eating? And how much?
30:09
Well, we don’t know 100%. But we know from a biomarkers like how your blood glucose reacts, how your blood ketones react, how your blood pressure reacts, and then over a longer period of time, like how your weight like if this a big swing, and then obviously, sometimes our coaches and provider asked like they’re like we think this is what happened. Is that what happen? What do you think? And let’s, let’s adjust. So obviously, we don’t know 100%. But we have so much data that we know pretty well. What may have gone off in in your eating so but that’s a company that you combine those two things, and then our years of experience and the science from my scientific co founders. It works obviously, you know, it’s it’s hard because otherwise everyone would have done this. So there’s there’s a lot of nuance to do making it work. But that’s the approach.
30:56
Love it. So I’m going to ask you about headwinds and tailwind. Okay. The obvious question, of course, is GLP ones, but I’m going to put a pin in that first. Okay. So you had mentioned that a tech driver for Trulia was Google Maps right, this accelerated use user adoption with Trulia? Is there a similar tech catalysts with verta that you’re leveraging as a tailwind?
31:17
Yes, the two things one was actually regulatory change. So telemedicine laws were changing state by state when we started dabbling 2014, then we launched with us, if not all states allowed telemedicine the way it is today. So so that was one. So it was legally ethically possible to have medical doctors dosing and pulling you off of insulin because we can get people off of insulin. And it’s kind of precision science to do that. That’s one that’s changed. And the second thing is smartphone, smartphones in a way that everyone’s using them, and I’ll give you an example. Average age of a member we treated early, it’s still around, it was like 55 years of age. And you know, we had 65 year olds and seven year olds and so forth. So I always get got this question from investors, like they’re just 1516 1718 especially. So today, like, seriously, like, an old person, like the seven year old? Are they really going to trust the doctor through a smartphone? Are they really going to use a smartphone? Are they like, seriously, like you’re trying to save their life and you have this medical treatment through a smartphone, they are. And so the acceptance of acceptance and use of smartphones. And then the trust that there’s a real doctor and your life is kind of in there, quote unquote, fingertips digitally. That has been an enabler for for our business like otherwise, it would have been impossible. So I think there’s no way you could have dealt verta, five years earlier. And then five years later would have been too late. And then obviously COVID further accelerated that. But it’s you know, you probably we about someone in the same age group, you remember the internet first wave, and people like why would never leave my credit card online? Well, you kind of have commerce, unless you leave your credit card. So it was the early days, there were those phases, when then suddenly became like, of course, everyone uses credit card and you can buy online, but there were those phases where if you did it five years earlier, this just people weren’t ready. And I think it’s the same thing for for verta. People are ready to literally give their most secret health information, trust the doctor have the biomarkers literally through a smartphone and you don’t have to be 22 year old to do that. Well,
33:32
I’m only 20 years old, so I don’t know why. So I kid so okay, the elephant in the room. Right, a potential headwind would be the GLP ones, right? You’re addressing obesity with nutrition. And now there are these GLP one drugs like Czapek, of course. What do you think this means for your business?
33:53
Yeah, well, we now have, you know, two, three years of data. So I know exactly because I see it every day. It has been a huge tailwind. It’s been a huge tailwind. And it sometimes, you know, people are like, Oh, you help people say lose weight or reverse diabetes nutritionally. Now we have this miracle drug? Like, we don’t need verta. It’s it’s been the opposite. It’s been a huge, huge tailwind for us for a number of reasons. And I’ll explain, I think most fundamentally, these drugs, GOP ones, first of all, they are not new. They’ve been approved by FDA for type two diabetes since 2005 20 years. 20 years. We’ve had GLP one drugs, has diabetes gone away. No. All the people with diabetes, kidney and lean No. So they’ve been here for 20 years. And in fact, we have a delivery
34:41
mechanism is more effective now, right? The
34:44
only differences the same drugs have approved in the same injection for treating obesity and with the higher doses because if you have a higher higher doses, you do deliver a little bit more, quite a bit more weight loss, but I just wanted to We kind of established that these drugs have been here since since 2005. But the reason this has been a huge, huge tailwind for us is is the following. Number one, these drugs turn out to be not the magic pill that’s going to deliver sustained weight loss. People don’t want to stay or cannot stay on these trucks. So they still need, they still need nutrition, lifestyle change delivered to sustain weight loss. These drugs affect how much you eat, but not what you eat. disrupts affect how much you eat, but not what you eat. And the data is out there, like less than 27% of people on these drugs at one year. And when you come off your wage regains very well established even by the pharmaceutical companies. So that’s the number one reason these drugs turn out not to be the magic pill on our magic injection. That’s because you’re going to be forever and you stay lean on everything that it just we now have two, three years of data. People come on, on and off these tracks, and then wage gains. And there’s all kinds of side effects and talk to people who are on them. Like they don’t want to be on them forever. So they still need to use nutrition. So that’s one number one reason number two reason is the payers that we work with the employers like us food so Papa John’s so United Airlines that you name it, that we work with all insurance companies like Blue Shield of California or even the Veterans Administration, we work the payers now have to address obesity urgently. Both from a clinical and cost perspective. That was not the case five years ago, very few payers had interest in investing heavily into addressing obesity, now they have to, because if they don’t, they’re gonna run out of money. They can’t make GOP ones freefall. So they’re coming to Verda, saying, Can you help us? Can you be the holistic approach when attrition comes first. And then for the small group of people when treatment didn’t work, for some reason, we can consider these drugs. And if we consider these trucks, we still want to have the nutrition treatment in parallel, which by the way, is required by FDA as well and a drug label. And then we also need the off ramp. And I think we’re the only company that has published results to show that you come off the ozempic. And for a year or more, you sustained a weight loss, nutritionally that’s published in peer reviewed, we’re the only company in the world with that. So So those are some of the reasons why addressing obesity has has just skyrocketed for us and I should send a thank you note to disarm surgical companies for innovating these drugs and making them for obesity available for people with obesity because it’s been a huge, huge, huge tailwind for for us. And I just in case somebody’s like, oh, you sound like very anti pharmaceutical. No, we’re not anti pharmaceutical, we’re we’re telemedicine company and we’ve been treating patients with diabetes. For a decade now nine years, specifically, through telemedicine, we’ve been prescribing and D prescribing GLP ones for nine years using telemedicine in some cases they appropriate. And these GLP one drugs for obesity, it’s a better drug than anything else in the past for obesity. So we practice evidence based medicine. So we’re not anti pharmaceuticals, it just that somehow over the last 12 months, there was this idea that now we have a drug that’s going to solve obesity and you know, full stop. That’s not true. It is a tool in a toolkit. Like bariatric surgery was a tool in our toolkit and still is a bariatric surgery didn’t eliminate obesity, it is it is a tool in the toolkit, but that main tool has to be lifestyle change and Nutrition has changed and nutrition. are
38:38
physicians able to prescribe verta is it like is it coded in the RPM remote patient monitoring set of codes? And is it prescribe herbal or? Yeah,
38:48
very, very good question. Well, first of all, people can come directly to verta, you can come directly to our website, use your credit card and pay although a majority of our patients, our members come through the employers and health plans and then it’s free for them. You don’t need referral or prescription from from a physician. And to answer your question specifically, if your primary care doctor, you can just send your members to verta. And if we are covered by their health plan or employer, then it’s free for them. So yes, and physicians refer patients to us, but we don’t yet have which is work to do for us. We don’t yet have universal coverage. Because we don’t charge a fee for service. We have value based arrangements with health plans. This probably healthcare mumbo jumbo for your loyal listeners. But that’s kind of what we’re working on that we have value based arrangements with health plans and employers where we only get paid for results, which is how healthcare should be. We don’t build fee for service. I don’t believe in fee for service because it incentivizes you to do all kinds of transactions, including the remote patient monitoring. I feel like it is a dangerous anything that’s fee for service instead. antivirus is providers to have more service. Yeah. And what we want to do is make people healthy and only get paid for that. Outcomes.
40:09
Is there any concern that, you know, the US healthcare system is quite large. Lead is very concerned that you’re operating in a healthcare system that is based on an employer driven health care distribution model. Another way to ask this question is when people move from job to job, and they get their health care through an employer, the the United Health Care’s or the signals or the Kaisers of the world are less incentivized by outcomes, because they’re passing the buck continually, as opposed to maybe from your homeland and Finland, where, you know, there’s a plan that you’re on maybe for life, that can be architected to be based on outcomes, because they’re going to have that population for life. Right. So is there any concern that it will be difficult to drive this effective outcome driven model? In the constraints of the US healthcare system? Yeah,
41:04
it’s a very good question. It shows me that you know, the system very, very well. So yeah, I grew up in Finland, single payer system. America, very fragmented employers cover health plans cover you absolutely right. You have to be able to show some cash and cash savings within the first 12 months, and more or less all the savings or ROI return on investment within the first 24 months. Otherwise, the for profit incentives in US healthcare, are working against you. And why is the reason the reason is kind of what you said, which is, people change their health plans and employers so frequently. So if I make an investment today, and three years later, that lowers your healthcare costs, I don’t want to make that investment. I don’t want to make that investment. So the good news for verta is, and I think this is a lesson for all entrepreneurs going into whatever industries assume that nothing changes, because that’s most likely true. Assume that nothing changes, you have to play in the game with the rules of the game and figure out a way to navigate and succeed. And so what we figured out was, we have to have a product and a model, and ROI for the client, like Papa John’s, so blue California, whoever we work with a pay, we work with 500 Plus payers now that we save money in the first year. And when we reverse diabetes, one example to give you an example, we save $6,000 per patient per year, gross savings, this is not better than 6000. That’s insane. And it starts very quickly, because we start getting people off the medications in the first 30 days. So insulin alone can cost 5000 or 10,000 a year per patient. And on average, we get 80% that insulin on population level eliminated by the end of second year. So you you’re looking at hundreds and 1000s of dollars of savings in people of insulin, but this is it is very important. It’s not impossible to sell something to the US healthcare payers, where they are eyes in, in the first four months. But that’s usually like, like during COVID cycle mental health, like many employers were like, We need something for mental health. Otherwise, our HR peers are fired. So there are some situations where temporarily people buy things where you don’t even have economic ROI. But do you have a sort of a waterproof bulletproof business in US healthcare? You’re absolutely right. The incentives are kind of ruthless, that if you don’t save money in the first year, at most in the first two years, good luck. Nobody wants to buy you. And that’s what we deliver.
43:52
I’m curious at the patient level for those that enroll in verta. You know, how are you defining efficacy and retention in the short term? You know what? Yeah, what does success look like now? Yeah,
44:05
absolutely. Well, first, yeah, I’ll say a couple of things. Most lifestyle treatments, it’s like winning a gold medal, inhale a bit games. Again, if you can keep person in the program for three months or six months. Most things diet exercise, whatever is three months to six months is like phenomenal. Inverter care. Listen to this. Average is more than three years. The average is more than three average for anyone that’s been on boarded. Yeah, more than three years. If we exclude what we just discussed before, which is eligibility losses, like if you send to an employer and you lose coverage, even with the eligibility losses, which eventually will go away when we have universal coverage. It’s more than two years. So our biggest reason why people leave today is they lose covered, unfortunately. So that’s one way in which we measure obviously like do Patients want to stay, our members want to stay, they see value in the service economically, it’s important for business. But it’s, it’s phenomenal. So that’s one. Then the second thing is, clinically, there’s this couple of metrics we look at one is blood sugar is it coming down. Another one is how quickly we can eliminate medications. And here’s the key point. We don’t eliminate many cases, because we’ll go let’s say more money and take people know we practice evidence based medicine. But in diabetes, if your blood sugar comes down naturally, we have to reduce providers have to reduce blood glucose medications, because otherwise you’re in danger, your blood sugar comes down because you eating the right things. If on top of that, you take what glucose lowering medications, that’s actually risky. So so we were in a position to eliminate Medicare. So that’s the second thing we mesh. And the third one is is weight loss. Everybody cares about weight loss. So those are some of the headline things we measure. Now, obviously, our patients go through comprehensive metabolic panel. So we get inflammation and lipids and liver markers and all kinds of things. But the headline figures, retention, engagement, weight loss, blood sugar improvement, and then elimination of unnecessary medications.
46:13
I love what you said before about how the GOP ones help limit how much he but they don’t necessarily change what you eat what you 100%. And like, I grew up in this family where my mother was a nurse. And she always called this brown fat. But there are some people I don’t know if that’s right, but there are certain people in my family that can eat whatever they want. And they will never add a pounce. Like they eat ice cream every night. But and then there’s some like me and my family that if I eat that, like I get fat. So I have to watch that. But the the folks that could eat whatever they wanted developed a lot of hypertension and heart issues later in life. And I think that that could be consistent with this, you know, if you’re just on GLP one, you’re not watching what you eat, you’re still eating junk, just less of it. You’re setting yourself up for probably long term health issues, even if you’re thin, and you know, look a little better.
47:07
100% 100%.
47:11
You know, I’m curious Sami, you’ve now entered two industries with like, complex set of stakeholders like Trulia, you know, you’ve got real estate agents, you got loan officers, you got MLS, you’ve got, you know, brokers, etc. And in health care who patients providers, you know, you know, complex health organizations, how do you think about managing complex stakeholders and getting, you know, getting them to align on a set of objectives and desired outcomes when they often have their own biases and their own, you know, ROIs and models?
47:47
Yeah, that was certainly somewhat true in residential real estate industry and in healthcare, it’s like 1000 precisely say 100% True. It is such a complex web of players, you know, PBMs, and consultants and channels and health plans and health plans, fully insured business and ASL business. These may be mumbo jumbo acronyms for people who don’t know, health care, but like, trust me, it is a webinar, I’ll tell you very brief story here. When we were starting again, listen to experts, and then selectively ignore, there was one expert who told me he said, Hey, you know, in order for you to commercialize initially, like you need to go to the self insured employers, but then you also need the benefits consultants to support you. You want the PBM, not to block you. And then you also want to work with the health plan, who administers the plan for the employers. And I’m like rolling my eyes, I’m like, this is the place where I want to selectively ignore because I know as an entrepreneur, that Simplicity is key, you always want to simplify, you do one thing very well and repeat a million times over like I kind of have a go to market do I need to sell to five players and only one pays is not going to happen. In this case, I was wrong. I was wrong. The US healthcare is like a spiderweb you cannot to score this one thing and ignore others. So maybe, you know, kind of keep can put your elbows out. You can’t do it. It is like a spider web. So. So the adviser in this case was was absolutely right. So how to address that. I think a couple of things. I think one is just honesty and transparency is one thing and what I mean by that honesty, transparency, consistency, so if you you know, you come from outside the industry, I’m going to disrupt I’m going to improve this. You can’t bullshit your way or have three different stories. Guess what these industry incumbents aren’t gonna go away. They’ve been here for 50 years they’re going to be for another 50 years, you might go away and so this idea that I’m gonna go my way and tell one lie here and another lie here and try to be selflessly kind of getting this is never do that. In fact, that’s hopefully good advice that grandparents have told all of us in life like just be honest, but I Think that’s very key, like you want to be very crystal clear why I’m here, what’s my value, and then you repeat the same story to everyone. honesty, transparency, that’s, that’s one thing. And then you can build trust over many years. The second thing is, again, these industry players are probably here to stay for another 50 years. So it’s not about you, it’s about them. So I think it is really understanding, like in a healthcare, this complex web, like, what’s the PBMs interest? What’s the health plans interest? What’s the self insured employers interest? What’s the consultants interest, and usually, you know, follow the money and you figure out the interest, even if they say something else on their website, follow the money, like not to throw PBMs under the bus, but you know, all you have to do is Google PBMs and how they work and you find New York Times articles of like, yeah, rebates and you know, anyway, so you have to understand like, how do they make money? It’s about them not about you. And yeah, figure out your business model and agreements in such a way that somebody makes money. There’s no bad people, there’s just bad systems but you want to figure out how do you help others make money? So I think that’s the second thing it’s not about you, it’s about them. And then the third one is just a reminder that I keep myself sometimes I’m like, Oh my God, but this is going to change this is so crazy. It’s going to change it’s going to be easier legislation will change. No it doesn’t. I remember when we started truly and I’m like this MLSs the Nationals National Association of REALTORS This is cartel This is Oh my god and and it’s going to disrupt this horrible, but guess what? Still there. Like it didn’t change but if you go I think you know, last year there was a class action lawsuit and national association realtors, right finally lost. Now that’s gonna change something 5% But rest assured they’re gonna be there. But I remember dreaming of like, this is insane. Like consumers homebuyers are losing homes sellers are losing. The only entry that’s winning is real estate 86% Commission’s Why is a million dollar home. You know, 60,000 $100,000? Home 6000. It’s the same six but it doesn’t make any sense. Like this has to change and the internet is gonna change that. Well, it didn’t. And so I think this My advice to anyone going to anybody is new industry assume nothing will change for 20 years and make your business work in that ecosystem. It’s a complete anomaly. stroke of luck. If the industry changes for your benefit. It doesn’t.
52:24
Yeah, be careful going head to head against entrenched interests. Yeah, exactly. Sami, if we could feed your anyone here on the show. Who do you think we should interview on what topic would you like to hear them speak about?
52:35
I would. So I love biographies. And the best entrepreneurial biography I’ve read and I’ve read hundreds of them is Phil Knight, Nike founders Shoe Dog shoe duck. So I think I’d have Phil Knight. I’ve never met him in person and talk about building thriving and sustaining teams like that journey that they went through. It’s a bunch of like, I feel like our team pumps are like misfits. And same with Julian and somehow I don’t know, we stay together. But Phil Knight’s team, like talk about bunch of misfits like it’s incredible. I don’t know if you’ve read shoe doc. But yeah, 2030 year journey, I think conversation Phil Knight, about the team and how did he choose them? And was he like, just around like, how does he choose the initial team and how did they stay together? Despite all the insane craziness they went through would be both entertaining, and I think incredibly helpful.
53:33
Sammy, what book article or video would you recommend to listeners? Yeah,
53:39
so I have recency bias. I read a lot, but I always have a recency bias. And so but I would say Trejo, by Danny Trejo. Okay, he’s his more recent, absolutely incredible biography. He’s a gentleman who spent years at San Quentin Prison in San Francisco then became a Hollywood movie star. And probably the best known bad guy in Hollywood movies, became sober, was addicted to alcohol, and then it is and you know, built his own family and it remarkable is, first of all, it’s entertaining story. It’s crazy story. Talk about the drew true American success story. It’s heartwarming. It’s an incredible demonstration of caring as a human and what truly matters. And then also a reminder of, we just can’t control most things in life. It is unbelievable book. I have been recommending it to a lot of people so Trejo by Danny Trejo. And if you listened to the audiobook, he actually reads it himself. Okay, it’s insane and I rarely cry, reading a book or listening a book but I cried many times. No, it’s insane. Sounds
54:58
like he couldn’t get Bahrain sounds like he could be the good Auntie spokesman for verta health.
55:05
And I recommend you to read it. Very good.
55:08
Sami, do you have any habits, tactics or behaviors that are a force multiplier?
55:14
Well, this is easiest question. 100% Yes, like, absolutely. And in fact, if you don’t my wife, she would say, I think he’s half a robot. I just think habits. It’s just like, it’s the foundation of everything. And I have a lot of them and I’ll share some and the first one is like the morning stuff, but I I almost like throw up to say that because it’s become fashionable, like, what’s your morning routine? And all the cool kids have a morning routine? Well, guess what, I’ve had a morning routine, most of my life, but I find it very helpful. The first thing I when I roll up, roll out of bed, like I don’t ask how I feel, what am I emotions, what I like that, to me is totally backwards, I literally jump out. And if I’m at home or home office, I jump into a pond and I swim 100 yards in a freezing cold pond, I swim 100 yards, I do two, three minutes of kind of little exercise, then I have a cup of coffee, then I meditate. And only then I kind of see like, Okay, what’s going on with me and how his day is gonna shape up. I think movement creates feelings. And movement creates further movement and action. So I’m a huge believer in like, not dwelling on like, anything, the first thing you come out of it so that there is one like a massive thing for me. Like, when I wake up, there’s no thinking it’s a robot mode, bang, bang, bang, bang for the next 15 minutes. It just happens. And it’s phenomenal. After that 15 minutes. I’m grateful for being alive. I’m excited about life. I’m excited about the day, it just works for me. And I’ve been doing that for ever. So I’d say that that’s kind of one. One thing. And then another thing is every sunday i i create a plan for the next week, like what are the two to three things that matter. And like then it’s sort of, I just execute that, and I love it. And that’s a huge force multiplier. And I I’ll just stop there. I have a lot of the like, almost everything’s a routine that then allows spontaneity and flexibility in between. But I have so many. I just I go into robot mode, and I love it. Wow,
57:26
incredible. And then finally, here’s Tommy, what is the best way for listeners to connect with you and follow along with verta? Health? Well,
57:33
verta health is go to verta health.com. You can read a lot about us. I am reasonably active on LinkedIn. That’s my current sort of social media platform of choice. Were right. But if you’re going to contact me directly, you will find my email online, not rocket science. And if you don’t, you probably didn’t want it hard enough. But email is the best way you’ll find it. Not rocket science, and you can email me
57:57
is Sami Inc. And then the company is verta health. Sir, thanks so much for the time today. You’ve had quite a journey in some great successes. And it sounds like you’ve really earned it. So congrats.
58:08
Well, thank you Nick. Really enjoyed it. And thanks for having me.
58:11
Thank you, sir.
58:18
All right, that’ll wrap up today’s interview. If you enjoyed the episode or a previous one, let the guests know about it. Share your thoughts on social or shoot them an email. Let them know what particularly resonated with you. I can’t tell you how much I appreciate that some of the smartest folks in venture are willing to take the time and share their insights with us. If you feel the same, a compliment goes a long way. Okay, that’s a wrap for today. Until next time, remember to over prepare, choose carefully and invest confidently thanks so much for listening
