The Truth About Entrepreneurship Nobody Talks About - Preston Alexander

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[00:00:00] We have this interesting shift in culture to the entrepreneur is the rockstar of, uh, you know, the 1980s, seventies, whatever, but similar to being a rockstar, they don't see [00:00:10] sleeping on tour buses for however many days out of the year playing in crappy dive bars and getting $4 and tips and they see Aerosmith or, or [00:00:20] whatever on stage, Taylor Swift, you know, on, on stage.

And, and they see the outcome, not the struggle. Sort of, maybe this is the worst forum to say this on, but like. I low [00:00:30] key kind of hate ai. And don't get me wrong, I still retain my misgivings and, um, suspicions about large health systems [00:00:40] owning private jets and having bank accounts in the Caymans with hundreds of millions of dollars.

And thanks so much for joining us today, Preston. Thanks for having me. I'm excited to be [00:00:50] here. For audience who might not have heard of you, could you give us, uh, an intro? Absolutely, which I'm sure is most of, if not all of your audience very unhear about. [00:01:00] But, um, so I'll start, uh, not too terribly long ago, but you know, maybe in the college years as it were, we sort of.

End up [00:01:10] starting in our education. So I went to University of Colorado in Boulder. Um, interestingly, or, or maybe not, just because [00:01:20] I didn't get into very many colleges and came down to two options. One was to be in Vermont and be cold 78% of the time, um, or [00:01:30] be in Colorado and only occasionally be cold. Uh, contrary to popular belief.

So, um. You know, it is a great school. They have a lot of great opportunities there, which I [00:01:40] rationalized, but realistically, it was a weather decision completely. Um, and so I went to the University of Colorado in Boulder. Uh, studied psychology and philosophy of all [00:01:50] things and, you know, had a really nice time.

Thought it was fun, but wound up. Kind of quickly thinking, I don't know that I [00:02:00] love traditional education. Um, and while this is kind of interesting, it was a very structured box still. And so [00:02:10] I graduated in three years. Um, spent one semester during that three years abroad, which is a lot of like cool life experience and then just decided to embark into the [00:02:20] world.

But, um, maybe. Partial older rock climber, uh, philosophy student. I didn't really have much, um, in the way of [00:02:30] traditional. Business or otherwise aspirations. After college, I went and started building furniture. Um, I found myself building interiors of [00:02:40] private airplanes for a short period of time, which was pretty fascinating.

Worked in rock climbing gyms. Just wanted to go out and just sort of live life and travel around and do those kind of [00:02:50] things. But interestingly, uh, and inspired, probably interesting and, and I don't know where it came from, probably have to dissect my childhood a little bit, but, uh, while I was building [00:03:00] furniture.

All I could think about was I loved building it. It was super fun. I still build furniture as a hobby, but most of what I spent my time thinking about [00:03:10] was the business of furniture building and how do you go from your garage shop doing commission work here and there to [00:03:20] something much bigger than that.

And then when I was building interiors of private airplanes, um, that work I actually really did not like at all, but it was fine. [00:03:30] Um. And all I could think about was how do you take this business to the next level? Is there expansion beyond private planes? Can you get into yachts? How [00:03:40] do you grow faster?

We're in this shop, do you move to the airport? It's all this. That's all I thought about, which again, I, I didn't really have much in the way of aspiration along [00:03:50] those lines, but it's all that occurred to me while I was in those settings. So, and I, at the climbing gym. I didn't think about that as much. I just enjoyed climbing and coaching and [00:04:00] route setting.

That was just fun. So after some period of time I decided I like building furniture, but I really wanna pull on this business thread. [00:04:10] Um, I had sort of started some things here and there little kind of pursuits, but never anything substantial. And so [00:04:20] I thought to myself, well, maybe I'll go get a. Corporate jobs, it'll go work somewhere real for a while and I'll learn just more about business hands on.

'cause I was tired of school, I was tired of [00:04:30] this and that. I just wanted to go do something. So I applied to some things. But yeah, at this time it was 20 11, 20 10 [00:04:40] maybe. Job prospects were low for a rock climbing furniture builder with a psychology degree undergrad. Not even any kind of grudge. So. I sort of [00:04:50] hatched a plan, uh, a bit of a scheme, and I, and I thought to myself, all right, I'm gonna do this.

I'm gonna go enroll in an MBA program. And when I. [00:05:00] Yeah, when, when I get in, if I get in wherever it is, then I will maybe take a course or sort of audit a course or just be enrolled. 'cause when I, then I can put on my [00:05:10] resume MBA candidate and I can put in my email thing. So I was like, cooked up this plan.

I was like, all right, I'm gonna, I'm gonna show people and they'll take me seriously. 'cause I'm going [00:05:20] to get an MBA, which I had no intention of doing like at all. I just needed to get in a foot in the door. Um, one thing led to another, and I applied here [00:05:30] locally in Atlanta to Georgia State University, was offered a scholarship and research assistantship and it was gonna be paid for.

So I thought to myself, all right, you know what, [00:05:40] let's just go do it. Let's just go knock this out. And I loved it. It was. Fascinating. I loved learning all of these elements of business and really [00:05:50] for me, even though if people follow me or have talked to me here and there, I often say, you don't need an MBA, just skip it.

Um, which I think is true in a lot of cases, [00:06:00] but for me, I was starting so behind the Eight ball and so much sort of from scratch and zero, and I, I do like learning a lot despite not [00:06:10] really loving college. Um, and I just really found it to be a fascinating, um. Pursuit and, and really helpful for me. So [00:06:20] eventually, uh, to, to weave long tails.

And I, you know, a couple years later have about to graduate and found myself working at a, after [00:06:30] applying, you know, everywhere and in between at a medical device company and at the time. And before, since I haven't mentioned it, I knew just nothing at all about healthcare. [00:06:40] Uh, if you had asked me what. A CA stood for?

I'd have been like, I don't know. I have no clue. You know, all I knew is that I could be on my parents' insurance until I was 26. That's about [00:06:50] the length of it. Um, so, but I found myself at a medical device company and quickly sort of fell in love with the [00:07:00] healthcare industry for a myriad of different reasons.

And in love maybe is a weird word for it, but something about healthcare is drawn to for sure. And at the time it was a very [00:07:10] myopic view. It was very narrow. We sold surgical devices, largely disposable to large health systems. So that's really kind of seeing healthcare from a super specific [00:07:20] pinhole really.

But still, it was a product management job. Um. More upstream in a very large corporation. Did about [00:07:30] $16 billion annually, publicly traded, and I sort of acted as a general manager for product lines, which was really great because [00:07:40] the thing I find the most fascinating about product management in a large company is the.

Ownership over something with no [00:07:50] functional authority whatsoever. So you have to make things happen though. You can't demand that anything happens because the people don't report to you. R and d doesn't report to you. Finance doesn't report to you. Sales [00:08:00] doesn't report to you. Nobody does. And yet you still have to move the needle and you're responsible for the business results of a product or a product line.

I love that because it's very [00:08:10] entrepreneurial. And the whole reason I kind of went back to school and decided to go try to work is because I always was thinking, how do I grow a business? How do I start a business? How can I make this [00:08:20] work? So that was my mindset. And, and by the way, when I, when I started in my brain, I was like, all right, I'm gonna go work for five years and then I'm gonna start a company.

[00:08:30] And which ended up happening. Um, but you know. I got in and I, and I just decided it was, I didn't know what it was gonna be. I didn't intend on healthcare and it happened to be healthcare. So [00:08:40] I, um, was there in that first job for a couple years and then moved to another med device company, another global company, and a less global [00:08:50] role.

More US focused, but it was more downstream. It was fine. It was interesting. Got a little, a little more of the chops under my belt. Much more marketing, much less product. [00:09:00] And, you know, a few years later found myself at the, sort of the five year mark and was like, all right, it's time to start a company. Um, and it was, well, I know now about medical [00:09:10] devices and I know about, um.

You know, furniture making and woodworking. And I was like, all right, which way do I go? Because I was, I still, I loved healthcare, but it wasn't [00:09:20] always gonna be like the thing forever. So after much introspection and, and you know, pressure testing different things and testing some ideas, it was the, it was a [00:09:30] medical device that I ended up starting a company around and we launched it.

We worked on it for a little while. And it was a piece of capital equipment with some [00:09:40] disposable to it used in surgery. Mostly open cases help prevent unplanned hypothermia. And we hunched it in February, 2020. So [00:09:50] set up for tremendous success. I would, I would sit, come like July of 2020 or so, I would sit [00:10:00] in front of my computer and look at this.

You remember those? Uh. Maps of all the states that would like, you know, financial Times in New York, they all had it and it was, you know, [00:10:10] red, yellow, green, super red. I would, I would literally just stare at that and check it every day to look at the states that were declining rates [00:10:20] and which hospitals were at or lower than capacity and cold call hospitals during the pandemic.

Just in case the ones in West Virginia ended up being a decent [00:10:30] place to start because they weren't doing any data reporting, and it ended up that our first customer was in West Virginia. So. To make a, a sort of longer story short in that [00:10:40] era of life. Um, we eventually, uh, sold the business in like a tag along acquisition at the end of, uh, 2021.

[00:10:50] And, but during that time, which sort of has helped lead me to where I am today, is, you know, it was the pandemic. So what do you do during the pandemic? [00:11:00] You know, you start just kind of. Pursuing other things or doing other things or, you know, you maybe start a podcast, which I did and didn't go great, or you start writing a lot more, which I did.

And I started writing a [00:11:10] lot more on LinkedIn. I had been doing it for a while, um, in my product manager days because I wanted to learn more about healthcare. And I thought the way I could do that was to, because again. [00:11:20] Pinhole myopia medical device. I could take to LinkedIn, write a post about an article that I read or something, and inevitably whether it was one [00:11:30] person, two people, 70 people, I would get responses and people would say, oh, that's right, or, oh, that's wrong, or.

You haven't thought about this or my perspective is that. [00:11:40] And so I used it as a good feedback loop and mechanism, and I'd set up calls with people, I'd DM them. It was just a way for me to learn more and get deeper. And so that really started in [00:11:50] 2017. And by 2020 ish, 2021, I thought to myself, all right, I have extra time on my hands.

I now have some formed opinions about healthcare 'cause I've learned a lot over this whole [00:12:00] trajectory. And then I started writing on LinkedIn and I started writing the healthcare breakdown. And where that sort of ties into all this and where it's led to today is I kind of had a [00:12:10] throwaway line at some point and said the business of healthcare is destroying the practice of medicine.

You know, physicians need to take back the business of healthcare. Um, [00:12:20] and, and or clinicians. And so that was really like the. Germinating of what is now forward slash health because I had all this experience. It was business side, but I [00:12:30] saw these misgivings of the healthcare system, talked to so many clinicians and physicians, not for any sort of gain.

I wasn't selling anybody. I just wanted to learn and understand the perspectives of everything. And the [00:12:40] only thing I could like think to myself is. This huge heavy lift corporatization of healthcare is really at the crux of the issue. And yes, there are macro system issues at [00:12:50] play. Um, you know, capitalism in the United States, you know, private for-profit or publicly traded insurance companies dominating how, you know.[00:13:00] 

Private, but for public good entities that are also capital constrained and need public funding to grow and expand and then fight with these big, like those [00:13:10] machinations make it really challenging, but. This sort of idea and like how can I then work towards and position myself to help sort of [00:13:20] shift that paradigm and take back, quote unquote the business of healthcare.

And really the answer was put myself in a position to help those who I believe need to be in the driver's [00:13:30] seat. And that's independent clinicians, physicians, physicians and leadership levels, starting new companies, launching health tech, med tech, et cetera. But just getting it [00:13:40] back to the heart. 'cause you know.

We can say idealistically, the business stuff shouldn't matter at all. Okay, sure. Great. Um, but [00:13:50] in the United States like it does and we operate in a capitalism sys some version of it. And those are just realities. And if we wanna make it better, we either can just [00:14:00] like talk about how it should be or we can work within our con constraints and, and make something happen.

So, very long story, not short. Um. I [00:14:10] met a, a business partner through exploring some different, you know, digital health options. Where can we do, what's the next thing I wanted to work on? Um, and we wanted to work together [00:14:20] and, uh, the first thing we tried didn't really work out is care delivery and wound care.

And then we decided, well, we sort of built a digital. [00:14:30] For a virtual clinic, maybe we could help doctors start their own clinics. And so Forward slash Health was sort of born out of that idea and we've since helped a number of doctors [00:14:40] start. Clinics, we've worked with a couple of existing clinics to help in their financial side, revenue cycle, you know, different kinds of things.

And we really are a, a [00:14:50] consultancy that focuses on finance strategy and systems design, otherwise known kind of as operations, but a little different flavor, um, [00:15:00] to help build amazing healthcare organizations. I mean, that's what we do, and that's my very, very long introduction. Thank you, Preston. That was amazing.

And I have a million questions. [00:15:10] Let's go back to something you said earlier on, which is traditional education isn't for you. Tell me a little bit more about that and how do you think about [00:15:20] educating your kids? And something I am kind of thinking with about right now is really me and my wife, we talk about the movement of unschooling, if you're [00:15:30] familiar with that movement.

Yeah. Um, and, and how can we teach our kids to not. My, my 5-year-old, she's learning math, uh, and she's, she counts on her fingers and the [00:15:40] teacher wants her to draw these lines to tally up the numbers. Yeah. And inherently, I'm like, well, why? Right? If you can count on your fingers, that works. So I think, [00:15:50] how do you kind of think about structure and systems in education and how they help us and sometimes maybe how they trap us inside imaginary boxes.

Mm. [00:16:00] Yeah, that's a great question. And I think about it a lot too. So I have a, a 5-year-old and a 7-year-old, and watching them in respectively, kindergarten and second grade, [00:16:10] um, in public school in Georgia is all, I mean, they're in a great public school, don't get me wrong. But, um, it's all, I, it's, it consumes a lot of my thinking.

And I guess [00:16:20] if I think about projecting out there, there is, I'm gonna tell like if. Weird anecdote, but there was this show called Are You Smarter Than a Fifth Grader? Do you remember that show at all? Yeah. [00:16:30] Yeah. It was like, so everyone's like, I loved show. Oh, this show's, yeah. It was like funny and stuff, but for whatever reason, to me, I, I'm not smarter than a fifth grader.

That's, that's what I'm saying. Right. [00:16:40] That's what everybody said. They're like, I'm not part of the fifth grader. And the only thing I could see when I watched that show was how useless the information you learn in fifth grade is in adulthood. [00:16:50] It was the only thing that ever like stood out to me. I watched it one time and I was like, this just means that you don't need to know any of this information because that's sort of what I [00:17:00] think school becomes kind of quickly.

Sure. You gotta learn how to write letters and just practice it and you have to learn how like. You know, [00:17:10] seven plus 18 equals whatever it equals. Because I'm bad at basic math because I have a calculator, you know? Um, how to multiply, like there are basic things that I think are [00:17:20] important. But when you get into fifth grade, you know, and I just sort of see this, and not every school, but a lot of schools, it's like, well, we teach to the textbook, [00:17:30] textbook.

We teach to pass the test. We have to get the right scores, et cetera, et cetera. I don't know that it's really about learning versus it's about memorization and performance, [00:17:40] which I think becomes not a great. Thing for kids in the short and long term. So as I think about it, I think about projecting out in their, to [00:17:50] their teenage and adult years, and even in college, like I kind of want them to do three things and three things only.

It'd be enough if they know how to think. [00:18:00] And you know, that incorporates a lot of things. Critical thinking, asking questions, all that great stuff. If they can communicate well. Yeah. So you have to know how to write the basics and, you know, [00:18:10] but clear communication is, is really thinking. And then just understanding how to convey it.

And then if they can be kind and empathetic, like. Do you [00:18:20] need much else? Like do I need to know the facts of the war of 1812 or what the Louisiana purchase was? I mean, maybe, but I mean, with the rise of all [00:18:30] technology, even without ai, like Wikipedia has all the information, a book has all the information.

I need to know how to go find it, think critically about it, what it means. The inferences I can make. [00:18:40] I never got. I occasionally got some of that in school, but really it was just. I remember taking a psychiatry psychology test in the [00:18:50] college cramming note cards. Day of sat down, took the test, got like a 97.

Someone asked me a question about it, I mean, [00:19:00] literally three hours later, and I had no id, I was like, I don't remember, because it was just such a, you know, you cram, you, you get a nugget, and then it's just irrelevant. It's because it's not thinking, it's [00:19:10] just the memorization. So that's how I think about education and why I didn't like it.

Especially because I think even if it was just memorization, they [00:19:20] lack being able to tie it to purpose. So why am I learning this? How is this going to help? You know? And, and the only person that could ever tell [00:19:30] you is like history teachers. 'cause they don't want history to repeat itself. And I'm like, okay, maybe.

But yeah, the, the lack of, so what I think in, [00:19:40] in modern education, traditional education is, is a problem. Yeah, it's really interesting that, you know, life is not a a test. In terms of this, there's not a [00:19:50] score sheet for life that's, uh, objective and traditional. And we train our children to look at their school and their success through, [00:20:00] uh, passing tests and achieving a certain grade on tests.

But that's not how even work works, or even the corporate world or the non-corporate world, like, you know, after [00:20:10] you're done with school, it, that's like a different world out there. So it's funny how we train people in a certain way. And then they have to live the rest of their life in a different way. Do you think [00:20:20] entrepreneurship is innate or do you think this it can be learned?

There's something I, um, think about is physicians ask me, you know, I want to get outta medicine. I, I, I [00:20:30] want to launch a sidekick, or I'd like to launch a company. Um. Sometimes I, I ask them some questions about their appetite for risk and uncertainty, [00:20:40] and it's clear that they don't have an appetite for risk and uncertainty, and I think that's what entrepreneurship is.

As you, you're excited about uncertainty and risk and making bigger bets, [00:20:50] um, given that medicine self-selects initially for people who are not excited about those things, how do you, what advice do you have for physicians? [00:21:00] Who are not inherently entrepreneurial, do you think it can, it can be learned? Or do you think it's something that's in it?

I wanted outta medicine the moment I graduated. Right. But there wasn't this like [00:21:10] curve where I'm like, okay, I want something else. It's like I, I already knew I wanted something else. Um mm-hmm. Kind of all along. Yeah. I, yeah, I think that's a great question and I think it can be [00:21:20] both. Honestly. We've all met the person who you're just like, that dude's an entrepreneur that's a, or gal, like they're purebred, right?

They're a business person. They hustled in high school, [00:21:30] they sold candy bars, they did whatever they laddered up to like do something different. They were constantly just like hustling to do something interesting the way they thought was different. Like, so I a hundred [00:21:40] percent think. That it can be sort of innate, but I think that it can be learned too.

I mean, I think I'm sort of a, you know, a more of a learned [00:21:50] entrepreneur than an innate one. And I think both can be equally successful. Um, perhaps on different timelines, perhaps on in different styles. [00:22:00] But I think it can work for both. And if you ask some pretty well accomplished entrepreneurs too about their risk aversion, I think it.

You might be surprised to find [00:22:10] how many would suggest that they are actually rather risk adverse and they only go into decisions that look on the surface, like there might [00:22:20] be a significant or considerable amount of risk, but the asymmetry in the return is such that it's negates to a degree the amount of risk Plus they [00:22:30] have.

Vetted, understand and, and looked at the downside enough to know how to mitigate some of those factors. So I think that even, and whether some of them [00:22:40] do it intuitively or some of them do it analytically, et cetera, I think the best thing you can do going into it is, and again this is to [00:22:50] the school point and why I think it can be hard for physicians because, you know, I spent whatever.

How many years? 12, 16, 18 [00:23:00] years in school, you've spent way more time in school and then not to mention training, which is school esque in a lot of ways. And you have to do it this way. There's performance, there's sort of check [00:23:10] boxes, whatever, it's someone else's. And entrepreneurship, those things don't, just don't exist.

The only thing that exists, the only North Star is market adoption of your [00:23:20] thing. And you know, there's a lot of. Ways you make that work and you have infin at bats, there are no strikeouts. There's no, you got this wrong one [00:23:30] time, bye. You're done. It's, yeah. What's your appetite to get up and do it again?

Did you spend all your money? Do you care if you spend all your money? You know what? Whatever the [00:23:40] thing is. Um, but I think that can be really hard to just recognize that you, like you said, there is no test. Just go, start and do it, and maybe [00:23:50] you decide. Nah, not for me. Great. You know, we, we have this interesting shift in culture to the, the entrepreneur [00:24:00] is the rockstar of, uh, you know, the 1980s, seventies, whatever.

Um. And a lot of people just want to be it because they think, oh man, you know, but similar to being a rock [00:24:10] star, they don't see sleeping on tour buses for however many days out of the year playing in crappy dive bars and getting $4 in tips and, you know, all this travel and [00:24:20] all the headache and lugging their instruments around it.

Like they don't, they see the, they see Aerosmith or, or whatever on stage, Taylor Swift, you know, on, on stage, and, and [00:24:30] they see. The outcome, not the struggle. And I think we've had a lot of that in entrepreneurship. So the best thing to do is say, okay, there is a possibility that I can do this, but also [00:24:40] it might not be for me.

And that's fine too. What's something you've changed your mind on in the past couple years as it pertains to healthcare? That's a [00:24:50] really good question. Lemme lemme, lemme pause and reflect on that for, for a moment. Um, in the last couple years. Honestly, [00:25:00] I think the biggest change for me has been understanding systems and where healthcare exists in the function of macro systems.

[00:25:10] So I used to be very, and I mean I still am critical, maybe just grumpy. Critical of a lot of the players in healthcare, and I talk about it with health systems a [00:25:20] lot, and I've, I've thrown my share of darts at, at large health systems, and I think a lot of those are, are deserve it. But I, I start to find myself more and more pausing and reflecting on [00:25:30] what the, are the conditions and which they're operating.

And I mean, they're almost operating in a possible condition to not function like they do because again, as I [00:25:40] sort of. I think before you started recording, sort of rambled quickly about the sort of macro systems that, that were, that we operate, that healthcare operates within a [00:25:50] hospital, exists to, to essentially provide a public good, um, but is forced to contend with large for-profit entities, [00:26:00] insurance companies who exist solely to make money.

I don't care who says what about anything. If you're in a public market exchange. You have an [00:26:10] obligation to, to your shareholders first. You can literally be sued if you don't do, if they think you are not acting in their best interest, which is to return as much money 'em as possible. And so [00:26:20] we've pitted these two entity types against one another, and we've said to one, well also provide a public good.

And then we said to the other, do whatever you want. Make as much money as [00:26:30] possible. That's your purpose. What do you think the response in the healthcare system is gonna be? All right, we're in an arms race, and the arms are money and [00:26:40] finance and size and scale and leverage and instrument and all these kinds of things that have nothing to do with treating a patient well.

1. They have only to do with a financial battle that [00:26:50] we've set them upon. Um, and so that has been probably the biggest shift is, and, and that's one example, but that's probably the most salient [00:27:00] example. And don't get me wrong, I still, and, and, and retain my, uh, misgivings and, um, suspicions about large health systems owning private [00:27:10] jets and having bank accounts in the Caymans with hundreds of millions of dollars and things of that nature.

But again. Sort of looking at the macro environment, the systems in [00:27:20] which they operate gives me a totally different perspective and also gives a totally different perspective on, you know, the clinic down the road with two docs and how they're running things and how it's [00:27:30] challenging, but also what their opportunities are.

Because if you can design macro systems, you can design microsystems similarly, that can give you really great [00:27:40] output and outcomes. What's the history there? Why did we decide that the organizations delivering the care. Need to be nonprofit versus [00:27:50] everyone else, including pharma and insurance and medical device can be for-profit.

Now we are seeing a shift here with the consumerization of healthcare. Mm-hmm. Companies like Rose and for [00:28:00] HIMS and Cerebral and there's a function health and there's, there's so many of them coming up where the, the care delivery part of, uh, healthcare as for profit as [00:28:10] well. Now, so why did this happen?

Do you think this change is good for patients or consumers? And, and, um, yeah, would [00:28:20] it be better if the care delivery was for profit and then pharma, med device and insurance? And maybe those are, I shouldn't be lumping them together. Um, our nonprofit, [00:28:30] that's an interesting question. Probably someone more, uh, historically inclined could answer it better.

Um, but I think that, yeah, I forget, we just bashed traditional education, so Yeah. [00:28:40] Yeah. I didn't pay, I didn't pay any attention. No, they don't, they certainly don't tell you all these things though in, in history class, but so. Finally enough, and, and I will tell a little bit of history because I do know this [00:28:50] one, I might get some of the exact details wrong, but, so sort of modern day health insurance.

As, as we know it started with, uh, Baylor University in Texas because they had a [00:29:00] hospital and their revenues were declining. So a gentleman whose name I forget, but I wrote an article about it, you can read it at the healthcare breakdown com. Um, he. Which is, [00:29:10] I think a, a really great strategy is a brilliant stroke on his part.

He decided that he would go to the Teacher's Union of Dallas and say to them, for the low, low price of [00:29:20] I, it was like 50 cents a month or a week or whatever it was. Um, you can come to the hospital stay, we'll cover your, it'll be $5, you could stay for a week. And everything [00:29:30] after that, like, we'll cover it.

So, you know, I, the details are a little, you know, whatever. And like the length of stay that it covered, but effectively he created. Insurance model for [00:29:40] his narrow network for Baylor, and if they just paid them, he was the first kind of, and there iterations of insurance before that. This is more modern. Um.[00:29:50] 

He really launched insurance, sort of as we know, uh, hospital insurance part A, if you will, uh, of insurance, and I believe it was called Blue Cross [00:30:00] is what he called it. And then up in, I think it was California, there was like a loggers association and, and they found that, and it was a few years later, they found at the time [00:30:10] that.

Their loggers, obviously it's dangerous work. They were getting hurt very often and so they didn't want to go work anymore 'cause they get hurt and then they'd have to pay all this, you [00:30:20] know, doctors and this and that and they can't afford it. And so they thought to themselves, what if we paid, the employer paid for the medical bills of these [00:30:30] individuals who are working for us?

They called it Blue Shield and. You know, the, the physician side, the Part B sort of was born out of [00:30:40] that. And of course the sort of the rest is, is really history from that. But those were the origins and so we, we look at it. So the point that of, of rounding back around [00:30:50] is like the birth of this was really one side, maybe employee protection or.

Benefits really. How do I get people to wanna work here? Well, I'll make sure that if a sauce [00:31:00] slices your fingers off, I'll pay for the finger reattachment or, or whatever. Um, and the other side was like, our revenue's declining. How do we smooth it out and make sure that we get [00:31:10] money in even if patients aren't coming in the door?

And then they've really. Amalgamated since then. But then on the flip side is you have the hospitals, you have the health systems, and I think nonprofit [00:31:20] ends up being a misnomer. We're really talking about a tax exempt entity, and they're granted their tax exemption because they. [00:31:30] Theoretically, and they do, but they provide, you know, disproportionate share, they follow Tala.

So they have to take anybody, which is a federal statute anyways, they have to do it even if they weren't, obviously [00:31:40] HCA has can't turn anybody away in their for-profit entity, but they, you know, they take Medicaid, pay all this different stuff. So it, it allows them. Basically operate, I [00:31:50] mean, in a way they still operate the same, like the, the difference in non-profit and for-profit is just they don't have shareholders that can derive value, enterprise value, but they [00:32:00] have bond holders because they issue debt and they trade still.

And you can buy bonds that, you know, revenue bonds for a hospital and they get rated by Fitch and [00:32:10] you know, these rating agents. Oh, I didn't know that. Okay. So that's really the an interesting part. So like nonprofit just means that they don't have shareholders that they pay out their [00:32:20] profits to. They retain them and keep them.

But then like if Ascension wants to open a new hospital, they cost a billion dollars, they're gonna go issue a [00:32:30] revenue bond In private market individuals, a lot of times, 'cause they're tax exempt, because it's a tax exempt entity, will go and buy the bond and they raise corporate debt. [00:32:40] And so they don't have shareholders, but all of their financial incentives are aligned to the debt that they have to issue because no one's going to lend you money if they don't think that you can pay them back, [00:32:50] and your bond will become useless if the company becomes insolvent.

So we've really created this interesting, you know, financial incentive. And we [00:33:00] wonder sort of a little bit why some of these large nonprofit organizations, a lot of it's because they have to. One, they have to cover their debt. And two, it's a financial instrument. They're [00:33:10] providing a return despite it not being a stock exchange type of return on these bonds.

So they're quote unquote nonprofit. They're really tax exempt. So we think about them [00:33:20] in this light, but, but they're care delivery. So, so it's, it's altruistic and, and they're all these regulations around and they have to see these patients. And we have Medicaid and you can't turn anybody on all this stuff, [00:33:30] but like at the same time.

They're in this sort of amalgamated mess of everyone's chasing the dollars and all this industry around it. There's so much money going [00:33:40] into it. Even back in the day, there was so much money going in that the industry just developed around it. I mean, and it's become this sort of behemoth and [00:33:50] monster, and I don't know that it's.

I don't think that it was by design at all. It's just a function, again, of a macro system in which it operated, you know, profit driven capitalist [00:34:00] system. If a hospital sees, you know. Hundreds of thousands of patients a year, and they need tools to see them better and to do whatever. [00:34:10] I'm gonna go build a tool and go sell it to 'em, or I'm gonna, you know, make a drug and then go sell it to the doctor to sell it to the patient, you know, and, and just the industry [00:34:20] was created around this incredible need, but pharma device, et cetera, et cetera, has stayed largely out of the realm of.

The same [00:34:30] type of kind of regulation, or at least maybe even more sociologically, the focus of being a public [00:34:40] good because they were sort of an industry. Created to help the public good entity that already existed, independent, and they just kept growing. And by the [00:34:50] time anybody said, wait a second, it's too late, because now they're multi-billion dollar companies with lobbyists and lobby arms and all this stuff, and it's kind of over, you [00:35:00] know, we can't pull that hydra back in, you said, um, the purpose or one of the missions for Four slash Health is to help clinicians [00:35:10] take back healthcare.

How do you think clinicians have lost, uh, the reins in healthcare if they ever had it? Um, and, and what's your [00:35:20] plan to help them take it back? So, I think, you know, the, the reins have been lost a little bit just because, I mean, [00:35:30] really of the function of what we see now. And again, it's. It just says everything has grown as the economy has gotten bigger, as everything's been more [00:35:40] important, scale and size and money and this and that.

And we talk about hospitals a lot, but there are all kinds of different organizations and corporate entities [00:35:50] and you know, Optum employees like a hundred thousand physicians these days. And it's just kind of wild. But it was the shift, the sort of. Maybe necessary, maybe [00:36:00] unnecessary, maybe it shouldn't have ever gotten there, but you know, if you are busy.

Treating patients all day long. And, and even if you think about it [00:36:10] from way back in the day in the 1950s and sixties, and it was a very different huddle and you know, more and more people had insurance, but it was still a new thing and it was still, [00:36:20] you know, whatever. But you, they're private and you look around and you see what are the opportunities and doctors are doing what they've always done.

You're, you're treating [00:36:30] patients and, and you're seeing them, but now you're in this sort of weird. Quandary because someone else is now footing most of the bill because, you know, [00:36:40] insurance became tied to employment during World War II with wage freezes in the United States because the large employers said, well, how do we [00:36:50] incentivize if we can't just pay people more?

That was the only le the benefits we can pay for their healthcare. Like, let's ha. And so by 1950 it [00:37:00] was, you know, in the, in the forties I think it was. 7% something super low if people had health insurance and by the end of the fifties it was like 60 [00:37:10] something percent because it was all employer based.

And then we've, that train has gone, it's run away obviously by now, but so then you have these interesting dynamics that doctors have been [00:37:20] doing. What you've always done care for people. You see patients, but now their payer source is different. Who's paying them? These entities are, you know, becoming increasingly [00:37:30] powerful and they're now want to pay because they take premiums, you know, the whole calculation of insurance.

And then you have more industries coming in to serve hospitals. 'cause more people [00:37:40] have healthcare now and can pay, you know, someone someone else pays. So the industry just all quickly, very quickly maturing and growing. 'cause there's so much dollars coming into it. [00:37:50] Meanwhile, doctors are doing like, what we need you to do is take care of us.

And so, but people are paying them less. People are calling them, more people are pitching them [00:38:00] things. So you need to react and you need to build a business around what you just normally did, sort of as a physician. And you could just go on house calls and do this, and you pay this money and [00:38:10] whatever, and it's just grown up around it.

More leverage from payers. So the business just got outta control because there wasn't time, there wasn't any. [00:38:20] Ability to counteract some really quickly developing forces that were acting on the business front. And then I think, you know, by the, was it seventies, [00:38:30] HMO introduction, you know, eight and then all of the different acts in the eighties and then admin just exploded.

And then we see the, you know, cost curves of healthcare really shoot [00:38:40] up like in a hockey stick 'cause of everything that required. So I think that's how it got sort of outta control. I think it's. I don't know, perhaps Pandora's [00:38:50] box is open and it's impossible to close. I don't, I like to think that that's not the case and whether it's sort of let's just go build something outside of the current system, whether the [00:39:00] system's going to melt down and completely break, you know, I don't know.

I just do know that there was a, there was, and we see it. You see people going back to these old ways [00:39:10] and it's working really well for doctors and for patients. And I spent today two hours, which honestly was so long, but it was great with a physical therapist whose cash only [00:39:20] pay and it's less expensive than if I used insurance and people don't.

Think about it like that. But if I paid insurance, I'd [00:39:30] have to pay my premium, uh, just to be able to then pay for the care, which is, you know, 40 minutes rushed with three other people and it really [00:39:40] amounts to probably the same amount of money if I didn't meet my deductible, whatever, whatever. And someone pays that deductible, right?

If I've met it, someone's paying. So it's so much more expensive. [00:39:50] And I think when people start really seeing that, seeing the. Clinicians are driving all of the value in healthcare and who we need, but we need them now in those positions thinking [00:40:00] about the business. 'cause at the end of the day too, I mean, it's a service, it's an exchange of value.

Um, there's altruism there, a thousand percent, but. It's a [00:40:10] job, it's a livelihood. Physicians have been getting paid for centuries, millennia. You know, that's not gonna go away. But just the biz model is so broken. So we just need the [00:40:20] clinicians to start. We need the public to sort of see what's happening, understand how the money really flows, and then the clinicians just be prepared, ready in the positions to say, all right, I can do this.

I [00:40:30] can manage the finance, I can do the operations. I can, whether you wanna be a big organization or just you going on house calls, you know, four days a week. Whatever it can work. [00:40:40] Moving back to AI and, and, uh, I'll ask you to kind of use your philosophy degree and I'll see if you paid attention. Maybe [00:40:50] I did not.

And I got a D in biology and a d in chemistry. Um, but, but still made it all the way through med school. Right. [00:41:00] Do you think, um, we're pushing very fast in the AI world towards general intelligence. General intelligence is [00:41:10] defined by not the general intelligent of the average human, but the, um, maybe, and that's maybe the terminology needs a little bit more correction there, [00:41:20] but AI becoming the smartest human in each individual field.

So playing chess like Magnus Carson building companies. Um, and this is a very [00:41:30] polarizing figure, but like Elon Musk, um, do you think we. We are making a mistake. 'cause throughout history we have always [00:41:40] been the smartest species. Mm-hmm. And that's good. I think, I think we've survived and we've maintained, um, power, if you wanna use that word over.[00:41:50] 

Mm-hmm. The world. Um, and every other even more dangerous species that lions and tigers, you know, we, we are the ones in charge. Do you think we're making a [00:42:00] mistake by we're, we're letting, you know, maybe opposable thumbs is the other, uh, advantage we have, but, uh, the, the main one being intelligence. Um, do you think we're making a mistake by, [00:42:10] um, you know, seeding that to, and we're building something that that's going to be more intelligent than we are?

I don't know. [00:42:20] My gut reaction is, is yes, like I sort of, maybe this is the worst forum to say this on, but like. I low key kind of hate AI [00:42:30] a lot because first of all, I mean I use chat GPT and I find it. Do you mean like it's a love hate kind of? Kind of, [00:42:40] but I think, I don't, I don't know. I, I kind of feel like it's a just hate, honestly.

'cause I see value in it. I, because I use it because it's, it's faster at, I'm really bad. I've always been really bad at like, internet [00:42:50] searches. I just don't know how to ask questions. Well, maybe or describe what I'm trying to look for. So I find it helpful in, in that regard. But it, it makes things up. It, it, [00:43:00] it's weirdly agreeable.

It's just sort of. You know, and smarter people than me obviously have built these in multi-billion dollar companies and this and that. But, but I started to think about like [00:43:10] fundamentally too, and, and we started this off in like traditional education and our kids and this different things. And you know, if I find myself sitting down to write something [00:43:20] and I.

Oh man, that's gonna be hard. It's gonna be like a few pages and this and that and I just, I'm like, I don't even really know where to start. And then I just go, lemme just see what chat GPT can [00:43:30] come up with first. And I mean, I just don't like that. I don't like that. For me, I don't know that I like it for humanity in a way.

Part [00:43:40] of me is like, that's fine 'cause I'll have a competitive advantage 'cause everyone will stop. We'll, we'll forget how to think. Um. But in a way too, like we've been on that bandwagon. We've been on that train for a long [00:43:50] time. I mean, scrolling Instagram and TikTok and just checking out and consumption over thought process and creation and things like that.

This is just sort of the [00:44:00] next version of it. I do think there's some real danger whether it's. Terminator three, take over the world, [00:44:10] iRobot, whatever, which people think it is and, and can be. And I saw some interesting studies recently about ai, self preservation and, and lying [00:44:20] and you know, threatening and blackmailing and stuff, which is real chat, terrifying.

Um, but on the other side, you know, the humanity. [00:44:30] Danger of us ending up in like a wally situation where no one talks to one another. We can't think anymore. There's no social interaction. [00:44:40] It's just me in a computer, in a room. 'cause I can chat with AI or ask it questions 'cause like, I don't, I'm too lazy to figure it out or even think about it.

And eventually, [00:44:50] what, how do we even know if. You know, all the great writers and content creators and they say, yeah, I use ai, but I'm still thinking I'm just helping me be more [00:45:00] efficient and effective. And it's like the computer of the, who's that being who? Yeah. And like it's the com, it's the internet, you know?

Or it's what a law professor who is [00:45:10] funny and he's old school guy and. He was like, yeah, my law firm, uh, I voted against having a computer in the firm. We took a, you know, partner's vote and I just thought, we don't [00:45:20] need this and this is weird, and whatever. And so we think of that now as being silly and maybe AI becomes the same thing.

But I think that one of the biggest dangers is the [00:45:30] societal element of are we gonna forget how to think? Are we gonna forget how to interact? Because yeah, again, you can be the smart person who uses it to help fuel your efficiency, [00:45:40] but one. Efficiency To what end? Like do we need that or do you wanna be so hyper efficient?

Like why at [00:45:50] the exp in the, the expense of what, and then yeah, it works now until maybe it doesn't because then it's such a crutch that you really have forgotten some of those fundamental things you thought you [00:46:00] had sort of control over. So, I don't know. Jury's out for sure I, you know, low key kind of hate it.

'cause sometimes I feel like it makes me a little bit less sharp [00:46:10] 'cause I. I don't like to rely on it. I, I want to think, and, you know, write and struggle through things and it's making the struggle too easy in a [00:46:20] way. And then what's that gonna do for the future generation? Because again, we talked about it.

I don't think knowing facts is super important. Certainly don't need to know what chat GPT around or [00:46:30] whatever. Um, but thinking is important. If you put a 10-year-old in front of a computer with ai, they're never gonna have to learn how to think. [00:46:40] Let, let's push, uh, deeper here. Um, if we build a world where everything is convenient and easy and you are [00:46:50] constantly fed, dopamine hits.

And I do realize there's, there's somewhat of a hedonic treadmill where you need more and more hits or a higher, um, concentration of dopamine maybe. [00:47:00] Um, why is thinking important? And this, this may sound like a silly question, um, and maybe it is a silly question, but why, why do we need to know how to [00:47:10] think if everything is easy and AI creates this world of abundance and everything is given to us?

I think that's a great question, honestly, and one that maybe I haven't [00:47:20] even thought about. Too much. It's a fascinating question actually, because yeah, if, if I guess at the end of the [00:47:30] day, but who knows? I don't know. I was gonna say at the end of the day, someone's gotta pull the strings or someone, but maybe not.

Maybe the computer just pulls the strings and we just [00:47:40] float around and our wally hover chairs or you know, fluid and we're just. Fed dopamine hits and none of us [00:47:50] exist and really, but we're all happy. And so maybe there's, maybe that's fine. And maybe there's, uh, no existential crisis. [00:48:00] It's a new existence.

'cause I mean, if we're, if we're all ultimately chasing happiness and there's some way that, that happens and then we just, but then I guess the question is, and, and maybe, maybe [00:48:10] one day it'll be weird, archaic thinking is that, I don't know. I, I, we are products of. The earth and land and evolution [00:48:20] and we're animals and we're, I, you know, I want to run up a, a mountain and do hard things and, and struggle and like there's, there's beauty in all of those, [00:48:30] in all of the bad elements.

Of life too, you know, and connection and this and that. And again, we could have the philosophical debate. It's like, great, well what if you [00:48:40] were, you had the brain in the vat thought experiment. What if you're just a brain in a vat and it's all just like electric, feeding you all the things and you thought you did all that.

It's like, how do we know that? Like [00:48:50] any of this is real? It's just sensory interpretations in our brain. Maybe AI gets us there and maybe it's fine, but I, I have no idea. But for whatever reason, the prospect is [00:49:00] like, feels, feels wrong, I guess is is the wor is the worst, best answer I have. That's well said, Preston, last question.

As you're [00:49:10] building, um, forward slash health and as I'm building, uh, manna Health, a couple concepts. I'm always trying to balance out or this, [00:49:20] this concept of optionality and friction when building product for consumers, both on the B2B and the B2C side, how do you think about optionality and friction? And what I mean [00:49:30] by that is friction.

It could be in the onboarding process and the, the product you're building and the user journey and how do you leverage friction to maybe, and this [00:49:40] goes back to, maybe it ties into what we were just talking about is, is friction is important, it it pre-select. Users that will be successful. And it gets people to [00:49:50] experiences and values you want to deliver and, and optionality is important as well, right?

And how much optionality so you can follow maybe the Apple framework, the extent where everything is [00:50:00] designed for you. Um, whereas most engineers and developers want to. Have a lot of optionality and maybe the Android framework where you can do a [00:50:10] lot with it. Um, it's clear which is more successful to an extent if you have a Steve Jobs or if you are Steve Jobs.

Um, and you can instantly listen to a consumer and say, this is what they want [00:50:20] based on their problems. Um, how do you think about optionality and friction when building force slash she and what are some kind of lessons you've learned from your previous companies on those two levers? [00:50:30] Optionality and friction.

So I do think about friction a lot, but maybe slightly differently. I find it in, especially in a B2B space, I think about it mostly in a [00:50:40] sales process versus necessarily a product process. Um, because I find that buying, not that I made a comment the [00:50:50] other day and I was like, really, our job as salespeople is to like help the.

A customer buys something and it's like, duh. But uh, but if you really think about it, it can be really [00:51:00] hard to buy something that we already want and especially in a B2B environment because I mean, yeah, if I'm the CEO of whatever, and I can just say like, sure. [00:51:10] But even then if I have departments and this and that and people are gonna feel different ways if I make decisions unilaterally about their area.

So it can be hard. To buy something that, you know, you [00:51:20] objectively think is gonna be a great thing. So it's, I think about friction in those terms. It's like, how do I help that person achieve what they want, which may be [00:51:30] buying kind of a thing. But I also, you know, it's interesting you say it, this sort of self-selection of the friction and Apple too, to an extent, because Apple had a, a very [00:51:40] specific viewpoint and their specific viewpoint.

Did the self-selection for everybody pretty much. And that is, I think the friction that you mean is that, you know, for this [00:51:50] set of people, this will create a lot of friction. It's, it's basically putting your stake in the ground and saying, this is what my company is about. And you know, it's an [00:52:00] identity play a little bit.

To say, you know, Southwest Airlines, so like classic example, they basically said, we're not for business travelers. Like we don't have a business class. There's no [00:52:10] expensive upgrade thing. Like you just come on this plane and we're gonna compete with you driving instead of flying. And so it was sort of more about what they weren't [00:52:20] than what they are, but that would create friction for a business traveler.

And so they purposefully introduced it to weed out the certain segments that they didn't want to serve and weren't uniquely positioned to serve and [00:52:30] be value added to them. So I think about it in those ways and, and maybe a little less for forward slash health, although probably be me, but I think about a lot for the people that we work for [00:52:40] because as we do strategy work, like these are the types of questions and interesting things that you can kind of start to unpack and unravel.

And then in terms of [00:52:50] optionality, we do think about that a lot. I mean, especially as a consultancy, like if people say, well, you're a consultant, what, what does that mean? And then it's kind of like, well, you know, a [00:53:00] good sales move is to say, well tell, gimme an example of a pain point you're facing in your business right now, because then you're immediately just uncovering problems and maybe they're a good fit or whatever, whatever.

Um. [00:53:10] But you can kind of do it like that. You can kind of be anything to anybody. And so, and I find that in that realm of, you know, if I'm talking to you and I'm like, I don't know, what do you need? Like, what's going [00:53:20] on? And you're like, I don't really, like unlimited options is not helpful. And even too many options because you know, once you identify what's the unique value that [00:53:30] you're uniquely positioned to offer to a market that actually needs it, which really narrows it down to sort of an ICP kind of framework.

And then they really only need like maybe one and a [00:53:40] half things. And so then you saying like, well, they could use this and they could use this, and they could like, yeah, but they really only need one and a half things, so give them one and a half [00:53:50] things. And then I think a lot of companies, like, if you just did something different, it needs to be like.

Different for a different problem and a different segment. Not all of [00:54:00] these just come in and, you know, choose your own adventure. 'cause I think that's, again, going back to buying friction and people are gonna be like, I, I don't know what to do. Like, they want you to tell them [00:54:10] what to do. You're the problem solver.

So optionality is a big thing. We think about four, four slash friction is a big thing we think about for our customers and how they're designing, [00:54:20] developing, launching products, launching tech, you know, building clinics at the same time. Awesome. Um, where can people find you, Preston and physicians are interested in working [00:54:30] with Forward slash Health?

Where should they reach out? Yeah, uh, always on LinkedIn hang out there a lot, so please find me on LinkedIn or slash health.com, [00:54:40] preston@forwardslashhealth.com. Any of those things, uh, you can find me. Always open to having conversations, discussions, seeing how we could maybe help. [00:54:50] Thank you. This has been amazing.

Thank you so much for having me. Appreciate the discussion.