Ever wondered about the challenges and opportunities of merging technology and healthcare?
In this episode of Bite the Orange, Alex Trombetta, Principal of New Ventures at Initiate Studios, shares his experiences in biotech, healthcare consulting, and his involvement in launching an analytics platform for total cost of care management. He delves into the complexities of integrating technology into the intricate healthcare landscape, emphasizing the challenges of navigating various incentives, like charity work. Furthermore, Alex explores the challenges faced by healthcare providers and patients, underlining the importance of involving all stakeholders in addressing these issues collaboratively. In this conversation, he describes his role at Initiate Studios, which includes co-founding companies, portfolio management, and venture evaluation, highlighting the studio model's capacity to align incentives and drive innovation in the healthcare sector.
Tune in for a journey through the dynamic world of healthcare innovation through the lens of Alex Trombetta!
FULL EPISODE
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Emmanuel Fombu:
Welcome to Bite the Orange. Through our conversations, we create a roadmap for the future of health with the most impactful leaders in the space. This is your host, Dr. Manny Fombu. Let's make the future of healthcare a reality together.
Emmanuel Fombu:
Good morning, good afternoon, good evening, ladies and gentlemen. Welcome to another episode of Bite the Orange. And today we have a very special guest, probably our second person in the venture capital space, ..., but Alex comes from another coast on the West Coast, but I'm sure provided unique ideas and visions of what drove him into this particular space, like all of us. So I'm sure if you're listening, Alex, I'm sure you add, you get to add to what you know. And if you don't, ... your honor today, as I am, to meet Alex Trombetta. Welcome to the show, Alex.
Alex Trombetta:
Thanks, man. I really appreciate being here. The show is awesome, so I'm excited to be a part of it.
Emmanuel Fombu:
Thank you, Alex. For those that don't know you, so, who is Alex? If someone asked who was Alex, who is Alex, and what's the reason why you got into this space? What's your why?
Alex Trombetta:
That's a great question. I'm still trying to figure out who Alex is myself. I can walk through a little bit of my background, and maybe that'll help answer the question a little bit. I've been in healthcare for a long time now, most of my career has been focused on healthcare, and when I graduated undergrad, I did pre-med. I thought I was going to go to med school, and unlike you, Manny, I didn't have the chops to go through with it, but I decided that I really loved the space. I wanted to work in healthcare. I ended up, my first role, really working in a biotech lab was mainly focused in pharmaceutical research, doing a lot of like bioactive polymer kind of work. Love that, love still nerdy out of the science all the time, but really just wanted to get closer to the business of healthcare. So moved over to a healthcare consulting role, did that for a while, mostly based in New York. A lot of Medicaid redesign work, a lot of value-based care work. Really loved diving into what the incentives that actually drive healthcare are. I spent the last bit of my time there actually working on helping launch the, this internal analytics platform that we were building to help manage total cost of care. And that was really the first foray I had into kind of this intersection between healthcare and technology. And I loved building and being a part of that build for that tool. Being a value was adding and where technology could augment the healthcare, but also where there were challenges to adopt, which is a big part of a lot of the things that you like to talk about on this podcast. I'm excited to dive into that a bit more later. In more recent years, recently moved out to California, did an MBA and a master of public health at UC Berkeley, really just delve into entrepreneurship and venture space when I was there. Started a couple of companies on my own. Those companies, one of them is still operating as small, some awesome healthcare accelerators, which is great seeing that one move ahead. Did some fellowships on the venture capital side and got connected to, through the Berkeley network to my current employer, Initiate Studios, which is a company creation and venture investing platform between healthcare, life sciences, and technology. Been there for about a year now, really driving all aspects of company creation and the venture studio model. So that's things like actually co-founding companies with the founders who come to us, building kind of company plans internally to find people to help spin them up. A lot of portfolio management work and then just new venture evaluation and diligence work as well. I just want to add, one thing I'm super excited about, I think the name of the podcast you have here, Bite the Orange, is really awesome. I think it's a, it's such a tangible analogy for anyone who has worked in healthcare or spent time in healthcare. I think the newcomers, especially in the health, tech, and innovation space, are maybe shocked by all the challenges and all the red tape that's at every single place you turn in healthcare. And I think people think that there's, I'll just come in and disrupt this, like Airbnb kind of style or whatever it might be, and they are shocked by the challenges. I think I'm the right amount of healthcare-jaded, like anyone who's worked in this space, that there's challenges, but I don't want to keep people out of the space who maybe don't have the same background because we're still not exactly solving the problem. I think it's an interesting analogy. I think everybody who is moving into the space should adopt that adage as well.
Emmanuel Fombu:
Now, thanks a lot, Alex. And this work, just when you look in your background, you also understand you do a lot of volunteer work in general. I believe you're a cyclist as well.
Alex Trombetta:
Yeah, I spent a lot of time and actually started to cycle when I was living in the Boston area. There's an awesome bike ride that goes, called the Pan-mass Challenge that raises money for the Dana-Farber Cancer Institute, which is a great event, a lot of fun because it raises a crazy amount of money. They do an amazing job over there. Everybody that's involved with it is awesome. And then, yeah, in California, cycling a lot of great hills to struggle up.
Emmanuel Fombu:
And so, so the reason behind that, that piece in general is, and I like that story, if anyone listening, this is the holistic story behind Alex's background. One of the key things you mentioned was about his values in healthcare, right? And I will come back to that topic of value-based care. And so a lot of times when we get interested in the idea of like technology in general, or it's not about just about tech, it's about what the tech enables in overall run, right? Whether it's getting people employed in the industry from different kinds of backgrounds, sexual orientation, whatever it is that it is, to make it more ... people to get interested. In my case, my family is from Cameroon, for example, right? And I know that most drugs that, I was working in pharma developer, would never make it to the hands of the people where I'm from. Absolutely no way, right? My grandmother died from heart failure herself. And so the idea was, how can we do things that could empower other people's lives like we minorities, that might not be the position of advantage to actually get access? And what are some of the main things that you learned from your time working on the payer side or looking at the value in healthcare, right, from that angle, from the payer side, or right, from that perspective? What were some of the challenges that you think that as a payer, what did, what they faced, and making sure that you're, the payer is correct?
Alex Trombetta:
We were mostly consulting on the provider side with health systems in the New York area. But yeah, it's a really great question. I think it's definitely health equity is obviously an important topic to talk about these days and kind of all aspects of the continuum of care, and there's huge relevancy to actual care delivery and then also relevancy, like you were saying earlier to the pharma and drug development side as well. And actually, how you create drugs that work in the population that are tended to be working in and actually enrolling the right people in the correct kind of equitable representation in those trials is obviously a huge problem that is popping up all over recent drugs that are coming out. But more on the delivery side, I think one of the biggest challenges I think we found was that, how we talked about ourselves from the position of the health system when we were talking to community organizations that we were partnering with. We were in a unique position where we part of the Medicaid redesign team efforts to partner with community-based organizations and faith-based organizations in the community in different parts of New York City. We were basically coming with the, with a blank check to say, Hey, we're here to help. Tell us what we can partner on together to help, increase screening in different areas or increase access to care increase or whatever it might be. And I think we were met with an unexpected but not surprising amount of distrust of the system. These health systems, and the medical establishment overall, especially with more community-based organizations, has not necessarily always been a friend, and there was obviously some well-founded skepticism for what the things that we were trying to do, even when it felt like from our perspective. At a quick glance, we were like, Oh, we're just coming with money and support. There's obviously the concern that there might be strings attached in different ways, or that this could actually be hurting and harmful in the long run. So that was a big learning and learning actually how to develop the relationships and the friendships and the trust and the way we talk about ourselves to the community-based organizations to actually drive change was really impactful and really a good lesson to learn. I think more bringing it back to the tech side, a lot of the things that we had thought about and a lot of things we admired, the accessibility of different technologies with all sorts of populations, and what the, especially, I don't necessarily think some founders who are working in the tech space, who are malicious in their intent to, or in their intent, to go out and restrict access to certain communities. I think oftentimes it's negligence, or it's just a lack of awareness of what some of the challenges might be, but it does underscore the need for better evaluation of who you're actually working with and what their unique needs might be. One example from a company that I like a lot that works in that the community social determinants of health space has really been not doing a lot of advocating recently with their platform and just general lobbying for tech space, telehealth, versus just app-based or phone-call-based telehealth, and having that be a channel to actually reach patients via, versus just saying that are just app-based, or phone call versus Zoom-call-based, different kind of accessibility channels based on what people need.
Emmanuel Fombu:
Which is interesting you brought that up. I was in New York City during the whole the pandemic era, and I co-hosted a show on Hot 97 with Lisa Evers. So every morning on Sundays, I'll go down to the radio station, and we'll have this, we have this show people call in. And the idea was to talk to people in these minority roles. A lot of them were the frontline workers. And so they gave me a tour of actually the different boroughs in New York City and ... funded projects. And I'll tell you, which is quite interesting, I met people that lived in some of these places where one guy was, I think was 43, had his legs amputated because he told me it was cheaper for him to buy soda in a big bottle than to get access to water. So he went ... the street for three years without actually drinking water, right? He was drinking sodas, right? And we see this all the time. We go to the grocery store. $0.99, you get a big bottles of Coke or Pepsi or whatever it is, right? But that water is like $5.99 right next to it, which is the same size. And so those things are real, and these things happen in communities. And then you find out there's a lot of, people have a lot of trust, right? It doesn't matter what you offer, right? Like in your case, you mentioned even though you bring funds in, and you say, Hey, we have these dollars to actually help improve healthcare, not even bringing drugs, but just bringing ways to actually innovate and help create a much better experience. You ... find a challenge there. So it sounds to me from what you discussed that the challenge is not just necessarily the provider side or the mission is the providers and the patients, both sides of it. How do you go about solving that particular problem? Do you think it's an approach where we just talk to the patients or the people in the trade to get them to create awareness around them and then bring the providers? Or do you think it's how do we go about solving this problem since you actually face this first thing?
Alex Trombetta:
I wish I had a good, I wish I had a good answer to that. I feel like that's a loaded question, but I think some of the things that worked well for us are obviously getting patients and getting a community involved from the ground up and actually including them in the planning and strategy for whether it's a health system-based initiative, obviously including that from the very beginning. If you are creating a tech platform or product and looking to go out to different groups of people, actually talking to the people that might use it and talking to people, the groups of people that, not just your earliest adopters who are going to use the tool first, but the people who will use it when it actually transitions to different kinds of payment models or different kind of communities that people are actually using. And I think one thing that's rung true that I've seen a lot in a lot of the research that I did when I was in grad school, and I actually wrote a lot about the topic at the time was in adoption of different technologies by different healthcare stakeholders. And it's not rocket science when you think about it, but at the end of the day, I think a lot of especially digital health solutions launched with kind of this myopic focus on what they're actually trying to do or who they're selling to and not realizing that healthcare is an incredibly complex web of stakeholders that are all interconnected in different ways, and that the incentives amongst them are all unique and different and incredibly, much more complicated than other industries. Healthcare is really, one of the only industries where the main consumer of the product is typically a patient, and they're typically, oftentimes, not the one paying for it. So there's obviously a huge incentive misalignment around how things get paid for, how things get used. But one thing that in some of the interviews and research that I did when I was in grad school on the topic was really focused on how to understand what the different requirements and value propositions that all these different stakeholders care about, and then ensuring you actually address those when you go out to go to market and go to sell to them and really looking at the organization as a whole. So for a hospital, for example, you're you have to bring in a patient perspective, whether they be patients that are actually admitted or patients in the community that use the hospital as a point of care: the clinicians, the tech, and the IT point of view, the product point of view, the financial point of view, the security point of view, cybersecurity point of view. And really make sure you're checking all those boxes because it's often a decision by a committee in those cases, and that's without speaking to each of those individually; you're going to have a lot of pushback.
Emmanuel Fombu:
That is great. I agree with you. I think those are the best way you could answer that question, as we don't know, and we have to go out there and try to solve it the best way we can. But with that being said, talk about problems and experience in the last part of, the initial part of the podcast. Now, let's take it to your work over at Initiate, right? So I'm actually quite impressed by Initiate in general, the Initiate Studios program, because I know ... out of that. And actually, to see a ... Chief Medical Officer at a startup when I worked at the San Francisco, right? So I know pretty well, I've seen what has happened. Companies like Grail that came out of there, a lot of genomic companies also as well that came in. So I know what your models is ... and owned. So tell us what got you interested in Initiate and what that philosophy of Initiate is, for people listening, right? Because, I think it's a great way to go about solving problems, not just talking about problems, and you are a member of that team, so please tell us about it more.
Alex Trombetta:
Yeah, absolutely. That's a caveat. Anything on the Initiate side that is my opinion is not attributed to Initiate Studios or ventures overall. But with that said, yes, the team is amazing. The three partners, Gianna, Jessica, and Rohan, have incredibly storied backgrounds all across different parts of healthcare. I had the pleasure of meeting Gianna through, as I mentioned of course at UC Berkeley a couple of years ago now and was just blown away by the model. I didn't, as I was working in grad school on things focused on kind of entrepreneurship, and co-founding my own companies, and working on VC on the other end of the spectrum, I liked a lot of pieces of both types of working styles. And I didn't honestly even know that, like the venture studio was a thing, and the more I dove into and understood was like, This is actually a perfect fit for what I'm looking to do right now. I think, from an individual perspective, I get the benefit of kind of being an entrepreneur and really getting to go deep on building transformative companies that I really care about and actually get to create something much more tangible than just being a pure VC investor. But then also, rather than just being an individual entrepreneur, I get to have a little bit of a portfolio approach where I work with a number of different companies and get to think about or try new ideas and talk to people in different spaces and stay sharp on the landscape overall. So, for me, it was a no-brainer. I've been lucky enough to have been introduced the right time, right place to the team and was elated to join. And thus far, now a year in, I think the model does do both of those things perfectly well. I think for me, it's a great way to learn a lot about specific topics and learn a lot about specific areas while building companies in those spaces, while continuing to evaluate new opportunities about things we want to build going forward. I think, in my opinion, the studio model is really purpose-built for healthcare, I think can be purpose-built for healthcare in such a way that I think there's a lot of unique challenges, but venture investing in healthcare that have come to light recently. I think a lot of even a lot of just healthcare-focused, VCs have come or have come out, or people have talked about the issues with pure-play SaaS companies and the returns that you typically see in the, just more tech side of the house versus SaaS healthcare companies. And if SaaS healthcare companies are even really a viable business model that exists in such a service-driven, people-driven industry, is that even viable? They're starting to see a little bit more of this renaissance back towards tech-enabled services and actually driving value and having accurate customers that can help do that, and then finding what the SaaS multiple that you can find in the back end is. I also think healthcare is incredibly challenging, as we were talking about earlier, this complex web of incentives and stakeholders that new founders, or experienced founders who have worked in healthcare before, often struggle to know who they're even selling to. Who's paying for what they're doing? What are the common pitfalls that founders in this space face? And through Initiate, through kind of the venture studio model more broadly, it enables us to partner as co-founders with new founders coming to the space and build companies side by side and provide a lot of that expertise and guidance. I think another piece related to incentive alignment is a really important one. I think, I've been thinking about it as like this, innovation as a service space, where studios really combine financing, whether it be endogenous to the studio or via syndicate partners and other follow-on rounds, lets us invest and co-create together, and really lets us be co-founders and, when we come to the negotiating table to get valuations. So it does align incentives that way, but I think avoid some of the challenges of the investors seeking return profiles that may not be feasible for earlier-stage healthcare companies. But the model, I think is great. I think it's a really, as a scientist and a healthcare professional yourself, I think anyone who thinks this hypothesis-driven approach to company creation where you're constantly iterating, putting in smaller amounts of money in different kind of gates to understand what's working, what's not working, change the approach, pass this gate, let's sounded a bit more and then find these other customers, it's really like a scientific, method-driven approach to company building that reduces overall risk and actually does help bring the right stakeholders to the table a lot sooner.
Emmanuel Fombu:
Which I agree with you on that piece. And Alex, you do have a unique background, like you have that unique New York Yorker experience ... in New York, and you have that Boston kind of experience and then, yeah, the San Francisco Valley kind of experience. So, as we wrap up here, one question. What's your favorite city?
Alex Trombetta:
I think right now it's San Francisco because that's where I am now. But definitely, New York still has a place in my heart, and family is in Massachusetts now. All three still are important to me, but San Francisco, I think, for the time being, is where I'm the place in most of my eggs.
Emmanuel Fombu:
And that's good, though. It was great to have you, Alex. I would love to keep in touch. I would love to have you again on the show as you progress through your journey, even through Initiate or any other journey piece that you go on. And anyone listening, please, I'd like to have Alex contact information in the show notes. Feel free to reach out to Alex as well, he's on LinkedIn, please, Alex Trombetta. It was an honor to have you on the show, my friend. Hope to see you again soon in person.
Alex Trombetta:
Thanks, Manny. It was an honor to be here. Really appreciate it. Thank you all.
Emmanuel Fombu:
Thank you for listening to Bite the Orange. If you want to change healthcare with us, please contact us at info@EmmanuelFombu.com, or you can visit us at EmmanuelFombu.com or BiteTheOrange.com. If you liked this episode and want more information about us, you can also visit us at EmmanuelFombu.com.
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Alex Trombetta:
Alex is a Principal, New Ventures at Initiate Studios, where he creates companies at the intersection of healthcare, life science, and technology.
Alex joined Initiate after completing a dual-degree MBA and Master's of Public Health at the University of California, Berkeley. While at Cal, Alex co-founded two startups in the digital health and wellness space, both of which raised capital from the Berkeley seed fund and top-tier accelerators. Alex also participated in fellowship programs with Flare Capital Partners and the UC Berkeley Entrepreneurship Department.
Before Cal, Alex spent four years with COPE Health Solutions, a boutique healthcare management consulting firm focused on provider/payor strategy and delivery system transformation. At COPE, Alex launched the firm's proprietary SaaS platform, which enabled total cost of care management for risk-bearing entities, and developed and implemented value-based contracting strategies for some of the largest health systems in the U.S.
Before COPE, Alex spent three years in biotech research with BASF, supporting pharmaceutical and agriculture service lines. He earned his bachelor's degree in biology/pre-medicine, with honors, from Boston College. Alex currently advises multiple digital health and life science startups, mentors an entrepreneurship class, and coaches healthcare-interested students at Cal and Boston College.
Things You’ll Learn:
Building trust is crucial in healthcare collaborations, particularly when working with community-based organizations, as trust forms the foundation for successful partnerships and addressing healthcare issues.
Alex's commitment to volunteer work underscores the significance of contributing to healthcare causes beyond one's professional career.
Effective solutions in healthcare require the involvement of all stakeholders, as healthcare is characterized by a multitude of incentives and participants.
A hypothesis-driven approach to healthcare company creation, akin to scientific experimentation, allows for iterative development and risk reduction.