BTO_Julian Pham: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
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, and welcome to another episode of Bite the Orange. And today we have a very special guest and I'll probably say the only guest that's actually been to Cameroon and actually been to.
Julian Pham:
So far.
Emmanuel Fombu:
So far. Actually, it's my hometown, actually, and.
Julian Pham:
We get another great ... Who knows a lot.
Emmanuel Fombu:
That's from Cameroon, doesn't count. As someone that's not from Cameroon and went to Cameroon, that counts. That's the challenge ... to go. And as you can tell, this is a great guest, and I'm looking forward to this great conversation today. And this person is no other than Dr. Julian Pham. He's the founder and managing partner at Third Culture Capital. And I think today we have a very unique point of view here, and it's someone actually admired and look forward to meet him for a long time. And today we get to have a great discussion with all of you. Welcome to the show.
Julian Pham:
Yeah, thanks, Manny, for having me.
Emmanuel Fombu:
So tell us about yourself. You have a quite incredible background from a clinician perspective and your public health background piece in the business world and in adapting into digital health and traditional pharma. It's quite fascinating. So tell us, who are you?
Julian Pham:
Yeah, happy to tell you, but I have to say that as you were introducing yourself earlier, I was thinking, man, this guy must be like 85 years old, given everything that he's done in his life. But yeah, so my journey has been pretty unique and I feel really kind of blessed and privileged of having the opportunities that I've had and the people that I've met. But just briefly to share kind of what got me here today. So I'm a, I'm an immigrant twice over. I was born in Vietnam, grew up in Paris, France. I came to the US as an exchange student, lived in a host family in high school in Seattle, went to undergrad and medical school there, made my way via Chicago, and then ended up in Boston for my fellowship in nephrology at Mass General Brigham. And as I was kind of exploring a career in a more traditional kind of academic path to be the best clinician I could be, at the best institution I could be at, I stumbled upon entrepreneurship and became fascinated by potential that entrepreneurship and business could have on care delivery. And so I founded a company called RubiconMD, and then later on joined an early-stage biotech. And through this set of experiences, both cultural experiences as well as clinical and business experiences, I decided that what the next natural step for me would be to launch an early-stage venture capital firm, because, for many reasons that's what I'm very passionate about. And that has led me to meet some really great people, including you today, and I'm happy to answer some of your.
Emmanuel Fombu:
Oh, thank you. And I'm quite honored that RubiconMD is a company that I personally actually use. I think you were doing this peer-to-peer connection where you connect the product to clinicians to specialists in this field. So tell us, how was that journey? And it's always great when you meet founders that started a company and actually exited, they get to the point of having a fund because, you know, when you start up in your career, especially being a clinician and you try to join the fund, the question always becomes, Oh, tell us your past history of investments and all this, you have a lot of finance people that end up in that space. So having someone with your background that went through the entrepreneurial journey, actually exited, and then now has your own fund, I think it's beautiful. So let's start there. So tell us, how is that Rubicon? What was the idea? How's the journey like? How was the exit?
Julian Pham:
Yeah, yeah, no, I'm happy to share with you the early journey. I have to give credit to Gil and Carlos about the exit, which was quite beneficial to all of us who are early-stage investors and founders, but the journey is actually a really cool story. It was around the time when I personally was starting to explore things outside of traditional medicine in healthcare and started to discover entrepreneurship. It was around 2011, '12, '13 or so, when people started talking about digital health a little bit more, and MIT started organizing events called hackathons. And so I think at the second-ever Hacking Medicine event organized by MIT, they wanted to have clinicians involved, and I showed up and completely fell in love with the premise of that, right? How can we bring together, over the course of one weekend, in a constrained, in a time-constrained way, in a location-constrained way, great and great minds created people, people, physicians, whatever, would not just come up with ideas, but to kind of execute on these ideas in order to build an early business and so ... And so I started doing a bunch of these things, and a couple of years later in 2013, I was invited to be an advisor or a mentor during one of those events because I had done so many and could bring the clinician perspective. And so I was walking from table to table and this guy stopped me. It's Gil, ... met Gil. He's got this very kind of laid-back personality in the way he talks. And I was like, What are you working on? He said, yeah, I'm kind of working on this thing. But his initial idea was really around the personal experience that he had with his grandmother, who had brain cancer, and the hassle of the challenges of getting the right care to her as she was, she didn't live in the US. And so the initial idea of RubiconMD really was was a kind of telehealth experience where you could get second opinions on things. And there had been a few companies that were doing that already, and it was a good experience because it was great working with Gil and Carlos as we were developing the idea further. And it was during the next hackathon that we did together, so we started to, Gil reached out to me after that event and said, Hey, would you join as a co-founder? I said, Yeah, sure, why not? And that kind of prompted me to start thinking about my life and my career. So do I want to be in medicine forever? This seems pretty good and fun and interesting, maybe I should venture into this. So I started doing part-time, but it was maybe a month, a couple months later that really the idea of the RubiconMD truly emerged. We had another hackathon that we participated in and kind of had a light bulb moment. It was like, You know what? Like a patient-to-expert opinion startup is probably not the way our business model, is probably not the way to go. My experience as a nephrologist at an ivory tower medicine, walking down the hallways and having a colleague stop me and say, Hey, Julian, like last week I saw this patient in clinic and they had blood in the urine and this is what I did, and I sent these tests, am I missing something? That patient is not going to die tomorrow, but it would be great, wouldn't it, to do the best possible workup you could do because you have, in your disposal, at your disposal like some great experts in that field. So that was the curbside consult, right, something that you and I do constantly like every day, and we don't get paid for it, but we do it because that's just part of the culture of medicine that you work with your colleagues, you know, you ask them questions, they ask you questions, and that's what we try to do our best for our patients. And we pivoted and we built RubiconMD as it is today, which is what you call peer-to-peer, but really a store-and-forward or a curbside consult-like physician-to-physician platform. And it turns out that that was probably the right way to go. At the time, there was only one other company doing this, but we wanted to do it better. So my role as a chief medical officer was to build the network. So within the span of a few months, we built a network of 100 and something specialists across multiple disciplines, and we asked ourselves all the same questions that any entrepreneurs would ask themselves as they are developing something, right, and especially something like this. One of those questions was, okay, do we want to narrow things down to just the three top specialties, i.e. cardiology, dermatology, orthopedics, or do we want to do it differently? And my perspective in that, was that, imagine yourself if you were a primary care provider in the middle of nowhere, like you want to have access to a platform where you don't have to second guess yourself and just ask the question that you want to ask and know that you have all the answers in all the disciplines and everything. Because if you start asking yourself, Oh, I think RubiconMD does dermatology, but maybe this endocrinology and maybe not that, and then the platform doesn't get used, right? So you want to kind of lower the bar, make it easy for people to ask themselves, to ask the right questions. So we built the platform, we recruited, we recruited the specialists. I had a friend of mine who was a senior cardiology fellow that we sent a consult to, and he responded, and I texted him and said, Hey, you just made yourself like 30-something dollars, which is what we were paying then to the specialists. And he texted me, Oh my God, this is like the easiest $30 I made on the beach in Nantucket. I remember that text so well. And it was kind of cool because it had never been done before, right? When you respond to a curbside consult, you don't get paid for that, but then all of a sudden we were able to kind of monetize that process, so that was interesting. The last kind of story I want to share about the early days of the company is when we were building the MVP, we didn't have a technical cofounder, so there was three of us, and we needed to build a clean, seamless experience for the provider or the primary care provider, and what Carlos came up with was to use a, one of these services, I think it was like SurveyMonkey or something like that, and we bought the premium edition of that so we could white-label it. So we put the RubiconMD thing on there and the PCP would submit their question, their consult, so I think at first it might have been like a, like an orthopedic one. They kind of write this up and kind of put in there the photos or whatever or x-rays that they put on there and then it would get wired, it would get sent to Carlos, who would then redact all the patient information and he would send it to me so I could forward it to the right specialist in the background. This was a complete manual process, and I would probably if.
Emmanuel Fombu:
That was advanced, AI.
Julian Pham:
Probably advanced AI, right? Yeah, and then my friend would send it back to me and made sure it was redacted and clean, and we would send it back to the PCP. So the piece happened really fast. I think it was like less than a day, maybe less a few hours. And the experience for the PCP was like, Oh my God, I just submitted this thing and somebody responded. This seems like a really legit answer from somebody who knows what they're talking about, but the loop itself was a very kind of analog process. Ultimately, we built, Carlos, built some AI and some real technology behind it, but the MVP itself was very analog, which is kind of an interesting lesson learned as you're starting a company trying to test things out first, right, to make sure that the experience is what you want it to be, and then from there, scale. Ultimately, we went into some fairly niche beachhead kind of markets. I know that it was pretty tough from time to time with company, but ultimately it got acquired by Oak Street Health, which is a perfect partner in my opinion for them. I can't be more happy, and I know the chief medical officer there as well, and I know he's a great guy as clinician, and I think they're going to do something great with RubiconMD.
Emmanuel Fombu:
Which, is quite fascinating to hear that story. And the reason why I wanted everyone to hear that story is, if we come down to Third Culture Capital and you are leading that like the whole fund, the idea behind it is having someone that has gone through that journey and gone through the struggle to understands what it takes to become an entrepreneur, right, that has been the bed and by the bedside, understands the challenges of this, and from the international perspective, and actually love the idea of being an immigrant two times over, which is similar to my story, right, except coming from France and Cameroon, and then back to the US, and I'm like, where do you belong? You belong everywhere, and it's this intersection and crossroads of people like us that are just like different, right? You just have this different cultures of places, which is quite interesting. So with that being said, so tell us about Third Culture Capital, what your mission is, were you backed? And yeah, let's hear the story about Third Culture Capital.
Julian Pham:
Yeah, I think, thank you for summarizing that, that's exactly that. I think I'm not surprised that you get what the ethos our fund is about. Yes, Third Culture Capital is really derived from this notion of third-culture kids or cross-culture kids, right? So a third culture kid is a child who grows up in a culture that's different from their parents or their passport culture. So these are the children of immigrants, the children of military, of diplomats, of global executives who grow up in different countries, have different skin colors, speak different languages, but their friends and their peers, when they go to those international schools, or when they play soccer in the dirt or whatever, like the have the model of the place. And what that teaches you is to always pay attention to the cultural nuances of the people around you, to always read the room. Third-culture kids of being highly adaptable because they've lived in different places, have friends from all over the place. They have a very unique worldview and they have grit, right, and resilience. And I think that sounds like your story, my story as well. And so when I started Third Culture Capital, it was really because, to me, venture capital is not so much about the money, not so much about the product or the technology. Yes, it can be, absolutely. These are things that you want to take, you want to pay attention to, right? Because at the end of the day, your job is to return multiples of capital of what you deployed. But for me, venture capital is about the people, right? And the strongest people, in my opinion, are the individuals who had it rough, who have had a unique journey, who have learned from their journey and have something very unique to offer. And so we back what we call third-culture individuals, and for us, third culture doesn't have to be the language that you speak or the color of your skin or the fact that you've lived in another country, it could be the mere fact that you're bringing a different expertise from a different discipline into healthcare innovation. Yeah, we love to meet particle physicists who do, write algorithms all the time and are really good at it, but may not know anything about healthcare to say, you know what, I'm going to use my skill sets to revolutionize or think differently about care delivery by building a better algorithm or looking at data differently or building a better product or whatnot. So it's about being cross-disciplinary, about being cross-cultural, and trying to create impact in healthcare. And so our fund is about investing in these third-culture individuals who have unique lived experiences and are going to kind of use those unique skill sets to create impact in the world, in healthtech, and biotech.
Emmanuel Fombu:
Which is quite interesting. I really like that, it's a very unique kind of perspective. I think that is like where there's this in diversity, it's like I think it's the best definition of what diversity is, right? ... Correct, how you take advantage of that. So with that being said, so what kind of companies do you invest in? Do you, for example, you're like a life science kind of investor where you look at molecules or are you like a digital health kind of investor or are you a medical device company investor? Are you a software ...?
Julian Pham:
Yeah, no, because we are third culture, we hate to be labeled, right, because we think that healthcare care delivery is multidimensional, it's so nuanced. If you want to improve the outcomes for your patients, you have to think about care delivery in a different way. But, you know, in the real world, you have to create your own constraints. With a small $20 million fund like ours, we can't really afford to invest in super early life sciences therapeutic companies, right, because the exits may not happen for maybe a decade from now. So right now our focus is on software-driven solutions, so it could be digital health, it could be digital therapeutics, it could be tech bio application data technology, or algorithmic technologies for the life sciences. But we look at, it could be also devices and IOT and things, so we look a little bit of everything. At the end of the day, the innovation needs to fit the quadruple AIM framework, right? Is this going to improve outcomes for patients? Is this going to reduce the cost of care at a systems level? And is this going to improve the experience of care for both patients and providers? If it does that, or does some of that, and this is something that we will look at, and we look at it from a very keen clinical eye, with a very keen clinical eye, right? We want to understand the nuances of this. And I think that we look at things a little bit differently than if you look at things purely from a, with a financial lens. So to answer your question, software-driven, but really focusing on the entrepreneur and what they're capable of doing at a global scale.
Emmanuel Fombu:
Which is quite interesting that, it was, I did my research prior to the show, I realized that you also deploy capital in three forms, which is quite interesting in places. I looked at your background, I've seen you play different roles in things where it's not just about the money. Like you said, it's not just giving money. And I think in this world, in the virtual world today, it's not just about cash. It's about strategic investors, someone that brings additional value to the idea and concept, which is, which fits perfectly with your story with RubiconMD, right, and how you get involved with them and how things have evolved to where things are. So tell us about these three different forms of capital deployment.
Julian Pham:
Yeah, so we think of it in terms of deploying financial capital, which is pretty straightforward, right? As a VC fund, we deploy money, that's the financial capital. The human capital is exactly what you described a little bit, right? There's a human component to this. Like how can we be of value to the founders by connecting them with the right folks, advisors, mentors, making some introductions to potential customers, and the typical things that you do to help a company scale. And I think what makes us unique is we think about culture, I think about culture constantly, right? It's part of my, the name of my fund, right? Otherwise, we might as well be called like third capital and not Third Culture Capital. But we call cultural capital, it's there, everything else. It's the interstitium, it's the fabric of what makes something work. And people write books about organizational culture, right? And the famous quote saying that, culture eats strategy for breakfast, and all these types of things, but really deeply about it. These days, truly something special about understanding the culture of the, either the organization or that you want to build, but also how your solution fits within the culture of medicine, the culture of care delivery. And for us, like we want to look at it with that degree of nuances to help the companies be successful.
Emmanuel Fombu:
Tell us more about what, so how early do you invest? First of all, we have a listener, and they are looking at this and they fit that profile, and they, of course, have a great team and a great idea. Of course, at the end of the day, you also have to return money on your investments so you could continue doing this. Otherwise, it's called a charity network, which is not the case, it's clearly a VC firm. So how early do you invest in companies and does it sound like a revenue-cutter market before you go in? And the next piece of this is how, what kind of check sizes do you?
Julian Pham:
Yeah, I can answer, I'll answer the second question first, because that's an easy answer. So a typical first check size is somewhere between, I would say $100,000 to $250,000. We'd love to write a $250,000 check, we've written as little as $100,000 and $150,000 or so. And the idea is to deploy up to a million in the life cycle of a company in our portfolio, right? So it could be over the course of one, or over the course of 1 to 3 rounds. Oftentimes you'll see companies will bridge round and we may kind of follow on with that, and then they may do like a seed or a series A, and we can kind of write a bigger check to kind of keep our pro rata or something like that. So that's an easy answer. A harder answer, I would say, is what stage we invest in. So a lot of this, a lot of this kind of depends on where the company is from. We see some European companies and some companies in different regions and whichever you want to label yourself as a seed, pre-seed, pre-A round. Each of these round comes with different races. I've seen like very small A rounds. I've seen very big pre-seed of seed rounds. It also depends on the sector and healthcare is very broad, right? And then depending on whether you do digital health versus hardcore pure life sciences, the check sizes are quite different and the valuations are quite different. So this is more, I would say, exit driven, The way we think about it, financially driven, I guess. We need to ensure that the companies that we invest in have a potential for an exit within the lifetime of the fund, which is ten years. We also want to make sure that whichever round that we invest in, that they're going to see a significant markup in their valuation, meaning significant traction scaling growth between the round that we invested in and the future round based on various factors. And so what that means is that we may invest in the company that pre-revenue and whether they call themselves pre-seed or seed, like it doesn't really matter, and then we have to size it up depending on what valuation they claim they should be at. And this is a very important point that I make for entrepreneurs is, like don't get stuck on the valuation as a number, especially as a fixed number, because you're not that number, right? So you're aspiring to that valuation. That's like a random arbitrary number that is based on kind of markets of kind of what you're doing and what others are doing. But I think it's best to give an example, right? So if you see a company come to you and say, oh yeah, we're raising like 2 million at a 10 million valuation, your company right now when you're pitching me is not worth 10 million, right? You really, what you're doing is you're raising 2 million, whether it's on convertible notes or whatnot, at a valuation, a real valuation of 4.6 million. But what you're telling me is that at some point you're going to get to that 10 million valuation and you would have given up 20% of your company, right, to get to that. So I think you have to look at the stage of the investment, the valuation at which coming at, and what you're raising with kind of a nuanced eye and seeing, does this make sense? Brings me to the point of that, kind of what I believe venture capital firms should be doing. When we're coming into a raise, we should be adding some value to the company, and that value could be strategic, could be in the form of advice, it could be in the form of kind of opening up your Rolodex and making some introductions or whatnot, right? And that's how we think about how we make our investments. We will write, sure, we'll write a $250,000 check, but what that comes with also is to make some introductions, have a group of venture partners who are seasoned healthcare insiders who are very excited about being advisors or board members or even mentors to some of these founders, and they'll try to do some matchmaking and kind of help the founders go that way. And we want to make sure that these companies, when they receive some capital from 3CC can scale appropriately and be successful because we know that we can't follow on forever, right? We're a small fund, right? It's not like we're going to write, I'm not going to write a $10 million check tomorrow because I just can't do that. So we know at some point they graduate from us, but we want them to graduate with the potential for success in the future, right? So that's how we think about our investments.
Emmanuel Fombu:
And I hope anyone listening, I think would love to actually have you as a partner on board, but also invest in the other things you do. Is there other kind of services that you provide? Because you have a wealth of experience, right? Someone is listening right now, how else could they get in touch with you, and what kind of things do you like to participate in to help companies?
Julian Pham:
Obviously, I think you've been there before, right? All the credit goes to the founder, right? Advice is advice, like I can open my mouth and say things, that's just, I don't know, maybe just some wisdom that I can share, but at the end of the day, it's really about execution. It's really about the founders' ability to listen to my advice to other people's advice and make the best decision for themselves. Like I don't get offended at all if they don't do what I'm telling them to do, right? It's like, hey, here's an idea. You should think of this. Do it or don't do it, right? Like you're a clinician before, if you were to follow everybody's advice about how to operate on the heart, at the end of the day, you have to use your own clinical judgment, right? And so we want that, and we pick founders who have good entrepreneurial judgment. And so the value add that I personally bring is just maybe some tactical advice, maybe some strategic advice, etc, etc. We help them in tangible ways as well with kind of design things and a little bit of PR and marketing and kind of promote their story. We help connect the dots and we want to be really good at that. I think as 3CC scales, becomes a global force, we want to be able to connect the best and the brightest with some really unusual ideas in markets that people haven't thought of. If you understand how healthcare is delivered in France, for example, and if you see a solution that is struggling here in the US, but you could see be very successful in France, ... you should let me make an introduction, maybe you should explore that. This is a very radical thought, but the idea is that there are many opportunities out there and I think you've got to be able to use your experience that you've gained to help these entrepreneurs be the most successful they can be with the, in the best markets.
Emmanuel Fombu:
I think, Julian, that's the perfect way to wrap up the podcast piece, and it's quite fascinating the idea of what you just mentioned is that radical in terms of things, right? If you look at the several companies, you look at Babylon Health, for example, right? That was in Rwanda, and Babylon, have survived in Rwanda, but that is big in the UK, and I'm sitting on a part of the world, right? If you look at zip, like drone delivery of drugs, these things are in Rwanda, Uganda, that's done it off, right? And then you see them in Europe and in the Americas. And so the idea is that things that are developed in the Western world that also benefit parts in Africa or South America or in Asia, right? So there's this global way of thinking, which I think only people that believe in that Third Culture Capital kind of mindset can make happen, right, unless you've got a vertical mind. So I really appreciate what you're doing, and I think the fact that you're that early on, that means you believe in those people that going to challenge the status quo right in that early-stage where you really have to have that belief in that person, the right to make sure that progress in the world. Thanks a lot, Julian, I would love to have you again on the show in the near future, to discuss some of the portfolio companies you've invested in and get more insights to that. But I would love to have you, hopefully, you can come back.
Julian Pham:
Yes. No, I'd love to do that. Thanks, Manny.
Emmanuel Fombu:
Thank you for listening to Bite the Orange. If you want to change healthcare with us, please contact us at infoqEmmanuelFombu.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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