Investing in AI-Native Healthcare with Venrock's Bob Kocher and Unity Stoakes

Bob Kocher (0:05)

Why did they quit their day job and start this company? I mean, there's always a really fascinating story, because every founder I met was doing something different before they started their business.

And it is a scary giant leap of faith to go start a company. And it's like having a child, you have to bring it to life and bring people to it. It's like the hardest job that exists, I think, is starting a company because we have to make something out of nothing. So I'm just saying, why? Like, why was this the problem that they quit their proper job and spent their life on is like really interesting to me.

Unity Stoakes (0:39)

My name is Unity Stoakes, co-founder of StartUp Health. I'm really happy to welcome Dr. Bob Kocher back to StartUp Health. We go back a long way, I think over 15 years. In fact, Bob was there when we launched StartUp Health at Health Data Palooza, I think in 2011

Bob Kocher (1:00)

Right about then, yeah.

Unity Stoakes (1:02)

And you taught us something very early on that has stuck with us ever since. In fact, we designed it right into everything we always coach to founders ever since, which is in healthcare, the person who pays, the person who buys, and the person who actually benefits are often three completely different people. If you're building a healthcare company, understanding that dynamic can be really the difference between building something people love and building an actual business. Bob has one of those rare vantage points on healthcare. He helped shape national healthcare policy during the Obama administration, helping architect the ACA, in fact. He spent years at McKinsey, trained and still practices today as a physician. And really today is one of the world's great healthcare investors as a partner at Venrock, where he's backed and helped build some of the most important companies in healthcare, including Devoted Health and Virta Health. Companies we're very proud to have invested in at StartUp Health. So today is really our opportunity to learn from Bob. And we hope, as always, you post your questions in the chat.

After Bob and I have a conversation, we'll open it up for questions. Ask your questions early, and I will do my best to call on you and welcome you to the conversation. Bob, great to have you back with the StartUp Health community. Welcome.

Bob Kocher (2:38)

Unity, it's great to see you. I so appreciate the work that you and StartUp Health do. You've created a tremendous movement in the ecosystem and so many great companies. Just follow us when we talk with you and I'm glad to be back to talk with you again.

Unity Stoakes (2:50)

Thank you so much for that. So to kick things off, I thought we'd start macro to better understand what world our founders actually building into. How would you describe the landscape from your vast vantage point today?

Bob Kocher (3:09)

Well, I think we're building into a great opportunity, which is nearly every aspect of healthcare in America can be made better. Access is a giant problem, quality can be greatly improved, and affordability is really a critical issue for us to tackle as a nation. With the magic of AI, I think we can make things faster and better than we could before.

In many ways, I think it's going to become tougher because with HR1 going into effect next year, with many people losing Medicaid, it's going to create a lot of demand for lower cost ways to provide care and a bunch of disruption. So I think we're at a moment where maybe we've been for the last 15 years. Again, it's never been a better time to start a health care company than today. And that remains true. I'm also pleased that the funding environment, I think, is positive. So if you have an idea that TAMs are so big and the demand is so great, and this is kind of a counter-cyclic area, then I think it's a good time to start a business.

Unity Stoakes (4:01)

We couldn't agree more as these windows of opportunity sometimes open up as they did at the dawn of the internet and the world wide web and mobile and other moments, ACA being one. One thing I think is interesting from things I've heard you speak about or write about recently is you have a somewhat contrarian argument right now about AI that while it may make healthcare better in so many ways and more accessible, but not necessarily cheaper.

Tell us more and what you think that means for innovators today who are building.

Bob Kocher (4:39)

Well, AI is going to make healthcare better for sure. As a doctor, I can tell you AI is better at evidence-based medicine than I am and I think double any doctor because it knows all the evidence and it updates all the time. So it's incredible. You can engage patients in dialogue.