Eric Kinariwala has revolutionized the pharmacy industry with his latest venture, Capsule.
In a recent exclusive interview on the DealMakers podcast, he provided an insider’s look at what it takes to cultivate one of the fastest-growing companies in the world.
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Building Your Network
Eric got a great start by investing in building his network and learning how businesses work. He attended what are two of the top business schools in the world. Wharton and Stanford. There he built connections in financial services, consulting, banking, entrepreneurship and venture capital.
Eric joined Bain Capital in Boston right after graduating from college and worked in one of their hedge fund groups investing across many different things. Retail companies, healthcare companies, and technology companies.
This was a foundational experience in how to blend this incredible framework around strategy and markets, what makes a good business model, how to evaluate management teams, and what effective management teams look like.
Patterns of Success
During these years Eric Kinariwala learned a lot about success patterns.
He says “the best pattern that has stuck with me is just that great teams create great businesses. And two is that great markets create big opportunities.”
From his perspective, when it comes to creating a successful company, it’s all about a great team, great market, and being laser-focus on whoever your customer is and continuing to deliver value time after time after time.
The $350B Headache
On the show, he told listeners how he came up with the idea for his fast-growing startup Capsule.
He says, “I woke up one day with this crazy headache. I called my doctor. He asked me some questions, and he said, “You have a sinus infection. I’ll write you a prescription. Go pick it up at the pharmacy.”
After visiting the local pharmacy, he ended up going home with no medication in hand and going to bed.”
The next morning he had his ‘Eureka’ moment. “What is going on? How could the experience of getting something so simple as a Z-pak be so terrible and broken that I wasn’t even able to get it? How is there a pharmacy on every street corner in America, and is this happening to the millions and tens of millions of Americans who go to the pharmacy way more often than I do?”
He just started digging in, and very quickly realized that his headache was actually millions of Americans’ headaches with the pharmacy.
As Eric puts it, the pharmacy is actually the most frequent interaction in the entire healthcare system. People use the pharmacy five times more than they go to the doctor. The pharmacy is the second largest category of retail. It’s a $350 billion industry, and there are 70,000 stores.
Eric describes a three-step system for gaining clarity on a startup idea:
1. What are the actual problems? What is broken?
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2. Understanding what’s needed to fix it; the regulatory environment, technology, and product experience to solve these problems, as well as how much money do you need to do that.
3. What kind of team do I need to put together?
The 10x Better Pharmacy
With that idea and desire to solve his own problem, Capsule was born.
Capsule is making the experience of buying prescriptions seamlessly. They have assembled a team to look after people in a more thoughtful and better way.
Eric raised the first round of funding concurrently with thinking “This is what I’m going to spend the next decade or more of my life doing.” They raised $70M from names like Thrive Capital, Glade Brook, the Virgin Group, and Sound Ventures. Most recently the company raised $200M from the likes of TCV.
Storytelling is everything which is something that Eric was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).
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Scaling to 250 Employees
Capsule now has 400 employees. That clearly takes some skill at recruiting and onboarding. Eric says they are very deliberate in how they onboard new hires.
For example, they have a very structured onboarding process where all of the senior executives at the company spend time with people when they join the company.
There’s a pretty deep conversation around how every part of the organization works, Capsule is also pretty big on making and encouraging people to read before they join to give them context on what’s an incredibly complex industry and to share some of their values and some books that we think to highlight those values.
This reading includes:
- The Checklist Manifesto
- On Wings of Eagles
- Setting the Table
Go-To Resources for Founders
From his perspective, as the CEO of a fast-growing startup, you have to evolve fast and have good outside resources to empower great decision making and strategy.
Eric’s top three are:
- Getting an executive coach
- Having a strong network of peers and advisors
Listen to the full podcast episode to find out more, including:
- Ways to build a powerful network
- How to incubate powerful ideas
- Disrupting outdated markets
- Fundraising from the most powerful investors