After helping others achieve great exits for their own businesses Patrick Quigley set out to fix some of the biggest problems in the health insurance industry. He has already raised $175M for the mission and is revolutionizing how it works with his own health tech startup. His company has raised $175M from top-tier investors like Tiger Global Management, Alpha Edison, GreatPoint Ventures, and Drive Capital.
In this episode, you will learn:
- Raising millions and picking the best investors for your venture
- How Sidecar Health works
- Patrick’s top advice for new founders
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Patrick Quigley:
Patrick is responsible for building and leading Sidecar Health to achieve its mission: make health insurance more affordable and access to great health care more attainable for everyone in the US. Patrick has more than 20 years’ experience in sales, marketing, product management, and engineering with both public and private companies. Prior to co-founding Sidecar Health, Patrick was Chief Executive Officer at Katch, whose primary business helped carriers enroll new members in individual health plans.
Before leading Katch, Patrick was Senior Vice President and part of the founding management team at QuinStreet, Inc. (NASDAQ: QNST) that grew the company to its IPO. Patrick also held marketing and sales executive leadership positions at BEA Systems (NASDAQ: BEAS – acquired by Oracle Corporation) and was a consultant at McKinsey & Company.
Patrick holds an MBA from The Wharton School at the University of Pennsylvania. He received his B.S. in engineering from Duke University. He is a diehard Cleveland Browns fan even though they have never been to the Super Bowl (maybe this year?)
Connect with Patrick Quigley:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. I’m super excited about the guest that we have today. I think that we’re going to be learning quite a bit when it comes to building, scaling, exiting, you name it. So without further ado, I’d like to welcome our guest today. Patrick Quigley, welcome to the show.
Patrick Quigley: Thank you very much for having me. I really appreciate it.
Alejandro: Originally, you were born in Connecticut, but not really Connecticut because you feel like you’re more a part of Cleveland.
Patrick Quigley: That’s right.
Alejandro: How was life growing up there, Patrick?
Patrick Quigley: I moved around a lot, but I am from Cleveland. All of my sports teams are Cleveland. I’m a diehard Cleveland Browns fan. I have a very found affinity for Cleveland. I live in Los Angeles now, and I joke with my wife all the time that we should move back there.
Alejandro: That’s amazing. How was it there because I know that you were exposed to Duke University very early on? Your father was very much involved there, so how was life growing up? Also, why engineering because, it seems that problem-solving thing has been something that has come with you along the way in your professional journey quite a bit.
Patrick Quigley: Yeah. Growing up in Cleveland was great. The people are wonderful; the weather is terrible, but it’s just a great city. Two great months: May and September, are absolutely tremendous. Yeah, you’re right; my dad is a physician, and growing up with him, I got exposed to healthcare. He was on staff at Duke, and that’s how I learned about Duke early on. But the reason I wanted to go into engineering is actually a different story. My grandfather actually gave me $100 of IBM stock for a gift a long time ago. I used to check on that as a child. Like, how’s the stock doing? How’s the stock doing? For those of you who remember the ‘80s, IBM missed the whole PC thing, so their stock just crashed. Even though they had great tech, they were unable to perform in the market. In watching that, I learned, “I want to be an engineer, but I always want to be in the business side of an engineering company.” I chose to go to Duke because they had this unbelievable program between their engineering school and their business school. So I went there to go do that. Of course, life is different. I got there; I attended engineering school, and after three years, I was like, “Maybe I should know something about business before going to business school,” so I left. I didn’t actually go to the business school program; I just completed engineering. That’s how I ended up there.
Alejandro: Well, look. Duke gave you everything. I gave you knowledge; it gave you the access to understand what you needed to do next, but more importantly, it gave you the opportunity of meeting your wife. It doesn’t get better than that.
Patrick Quigley: Yeah. I met my wife there. We met at a community service program. She was one of the first people I met at Duke. We’ve been together, and we’re celebrating our 21st wedding anniversary this month.
Alejandro: Congratulations. That’s amazing. Let’s talk about you leaving Duke because after Duke, getting that idea that you needed to know more about business. You end up in McKinsey. One thing that is amazing is that some of the best entrepreneurs that I interview are those that have a background in consulting for some reason. I find that maybe it’s the way that you are able to structure big problems into small problems and then tackle those. But in your case, you had a pretty nice journey with McKinsey. You helped them with their branding initiatives as well. How was that journey for you, and what did you get from that experience?
Patrick Quigley: Yeah, that was incredible working at McKinsey. When I was coming out of school as an engineer, again, I always wanted to be on the business side. I had never heard of McKinsey. One of the deans there suggested I learn about it as I met more and more of the people, oh my! I was so blown away at how smart everyone was. I figured I could go there. “Everybody’s smarter than me. I’m just going to learn constantly. I’m going to put myself in places that, frankly, a 22-year-old should not be. You should not be advising the board of any company when you just graduated from engineering school.” It was a great opportunity to go and learn about how the top companies in the world have grown and succeeded and where they made mistakes. It was all about learning. You’re right. I had an opportunity to help [5:20] Practice 20 years ago, but that was one of many things that I got the privilege of getting to work on.
Alejandro: Talking about business, you got quite a Master’s in business even before attending Wharton, which is where you did your MBA. Leaving McKinsey was, obviously, a pivotal moment for you, and that’s because you received the call from one of your colleagues. So what happened there?
Patrick Quigley: One of the things I learned at McKinsey was that everything is about people. It’s not necessarily about what you’re working on. It’s about who you’re doing it with. I got connected with one of the partners that I worked for at McKinsey, who was a former McKinsey guy that was starting a business out in California, a gentleman by the name of Doug Valenti, a great leader. I had the privilege of going out and meeting with him and learning about what he’s doing. It was one of those wonderful experiences where he actually pitched the company to me on a napkin in a restaurant in Palo Alto. I decided to leave McKinsey. I remember him telling me, “If you want to come join me, that’s great, but I’m not moving you, and I’m not going to pay you much of anything.” It was an amazing jump-in full-on. At that point, I asked my wife to marry me and tried to convince her to move to San Francisco with me. We got out there, and it was the opportunity to build a company from a napkin, which, ultimately, ten years later, we took to a public offering, so I feel really privileged to have been able to take some of the learnings that I had and grow and apply to building something. As an engineer, I loved to build things.
Alejandro: What does it feel or look like when you are part of a rocket ship like that? Being one of the first employees, being part of the founding team, and then ringing the bell and taking the company public for over a billion bucks is quite an accomplishment, and I think that that’s a wealth of knowledge that opens your eyes to a whole other level to how business really needs to be conducted. What is it like when you’re part of a rocket ship like that?
Patrick Quigley: When you’re on a rocket ship, sometimes, it doesn’t feel like a rocket ship. It’s just a lot of work. To join a startup—you know this. You’re an entrepreneur as well. You’ve just got to be willing to do whatever it takes. You have to understand what the mission is. I literally helped get cables dragged into the first office so we could have phones. Anything that you need to do to get things done is how startups work. And it’s fun. It’s funny about people. You go from just a few people at Doug’s house to our first office. I think we had packed in on folding tables about 100 people at one point before we got real space. It’s fun to try to build something and be on a mission. That was one of the first online marketing companies ever. That’s what we did, and we felt like it was really pioneering. It was exciting.
Alejandro: What was your key lesson from the experience with QuinStreet?
Patrick Quigley: I think the key lesson is: make no assumptions, try, and iterate. When you’re building a team, focus on getting the right people, people that share your vision and your passion, because you’re going to be in a foxhole with your team. You want to make sure that they believe in what we’re trying to do because when things get hard—because they’re going to get hard, and you’re going to be tested. You need to have the right folks in there to power through it. You’ve got to be very accountable; you’ve got to be constantly wanting to try new things. You’ve got to expect failure. You don’t want patterns of failure, but you want enough failure that you know you’re learning because if you’re not failing, you’re not trying hard enough.
Alejandro: As the saying goes, happy wife, happy life. At this point, your wife wanted to do law school, so she went to Penn, and this was your segue into doing your MBA. How was that going from being in a rocket ship like that to all of a sudden doing an MBA and learning about case studies? You probably knew more than anyone in there about how to build and scale something.
Patrick Quigley: I don’t know about all that. There are a lot of really smart people at Wharton, as you know.
Patrick Quigley: Again, it was a privilege. I went back to Wharton right after the dot-com bust. I went into Doug and took a leave of absence from the startup. For my wife, it was really important to her to go back to law school, so she chose where we went, and it was great. It was a great privilege. I felt a little guilty, to be honest, because she worked really hard. Law school is the real deal. We’d go and try to pull her out of the Law Library, and I couldn’t get her to do it. We’d all go out to dinner and have a good time. It was a great opportunity for people. And, yes, the classes were great because it really rounds out your perspectives on things. But, for me, it also expanded the perspective globally. For instance, I had never worked internationally, and half of our class was from all over and different industries that you would just never think of. It was a really rewarding experience. Constantly, in everything, you’ve got to figure out what you want to get out of it.
Patrick Quigley: As long as you’re focused on that, you’re going to have a great time and a great experience.
Alejandro: One thing that is very interesting here from your story is that, obviously, in Wharton, one of the final projects is to do a startup or do something with some of the classmates there. And as I have mentioned to you, I’ve been a guest lecturer there for seven years. It’s an incredible community. But one thing that is surprising to me is that instead of using this opportunity to launch your own company, you literally went and worked for somebody else, so why did you make that decision?
Patrick Quigley: That’s really interesting. You’re right. I totally remember. I did the class 801. It’s an entrepreneurship class. It was tremendous. We worked on a company that created credit scores in developing nations, leveraging utility bills to try to build a score. That was our concept; we did fine. Interestingly enough, the person that won the contest that year started a pet insurance company, and it’s one of the big pet insurance companies now—just a total sidebar. I didn’t go that direction. I felt like I didn’t know enough yet to start my own thing. I had a great experience at McKinsey to see big companies. I went the exact opposite way with Doug and his company. Coming out of business school, I wanted to go back to the Bay Area, and I decided to join a company called BEA Systems, which is a middleware company. It’s like the plumbing of software for those of you that aren’t software guys. The reason I joined it was that this is an incredible company. It was the fastest company to go from zero to a billion dollars in sales and software at the time. It took them seven years, which today may feel slow, but it felt really fast then. [Laughter] After the dot-com bust, their stock fell through the floor. So I joined their marketing department. I was so excited. Here, I get a chance to learn how does one of the great new companies in the world fail? What’s going on? What can I learn about preventing that so that when I go do my thing, I don’t trip in the same place? I literally remember, the first week I was there, the CMO came on and pulled us into a room and said, “Okay. We’re laying off half of you guys.” That was the first week I’m there. I was like, “Oh, I’m gone. I’m a new guy.” I got to stay. Then, from there, I got the privilege—and the reason I joined it was that it was all engineering, and I had an opportunity to come in and be one of the few business folks. I got to help them launch a solutions business. So creating a business within a business and help figure out, like, how do you go ahead and return sustainable growth to a business. It was an unbelievable experience. I worked with incredible folks. Rich Geraffo came in and ran America’s, and I had the privilege to work with him. He now is one of the senior guys. He went up through HD and everything. He’s one of the CEOs at Salesforce now.
Alejandro: So definitely a good experience to see, as well, how the potential turnaround of a company happens. In that journey, you received a call from QuinStreet, and it was your time to return.
Patrick Quigley: I did. Again, I had a really great relationship with the folks at QuinStreet. Just like I always felt a lot of loyalty toward Cleveland, I felt a lot of loyalty toward the team that I had helped be a part of. Doug called me and said, “We’re at the point now where we’re going to take QuinStreet public. We’ve been a consumer-focused company, and we want to offer a B2B business. We’d like to see if you could come here and help us build a B2B arm of our business in preparation for going public. At that point, BEA Systems was just acquired by Oracle, so I was reflecting on where’s the next place that I can learn. The opportunity to go back to the startup that I was with and help Doug, if we could, accomplish growth enough to get public. It was really exciting, so I felt lucky to go back and rejoin that team and spend the next few years helping them build their B2B business and then help take that public in 2010.
Alejandro: That’s amazing. In this case, you take it to the next level with QuinStreet, and I think that you were able to see the full cycle, too, from the creation to the actual promise land, building and scaling a company. But, at this time, you also have a very interesting conversation with one of the guys at Scale Venture Partners. That was the segue to where you are today building your own baby, and we’ll get to that in just a minute, but what happened during that discussion?
Patrick Quigley: I was approached by Rory O’Driscoll, an absolutely incredible VC. They had acquired a company that was similar to QuinStreet, a company called Vantage Media. They were asking: “We bought this asset. It’s not performing to its potential. Do you think you can come in and help us?” I asked Rory to give me a bunch of data, and I spent a weekend looking at it. I went back to Rory, and I was like, “This is actually an incredible company. You’re doing some things that I have never seen before. There are literally five things you can do to take it to the next level. You guys should go hire somebody to do these five things because you’ll do great, but I can’t be the guy because I’m not moving to Los Angeles. I love San Francisco. I’m here.” So, I said, “No,” at the time. But I think we can all agree, as you’re starting off your career, and you’re growing a career, if a VC asks you to do a favor for him, you try. It was really nice to engage with Scale and give them my perspective on the company. About a month or two later, my wife came to me and said, “My sister is moving to Los Angeles. We’re starting a family, and it would be really nice to be around family. Let’s move to Los Angeles.” As I thought about my career, it was the right time for me to be a CEO for the first time, so I called Rory back and said, “I just wanted to check-in. How’s your search going?” He was like, “It’s terrible. After you came in here and pitched us on the five things we need to do, we haven’t been able to find the right person that can execute on your vision, so if you’re interested, please come on.” So, that changed everything. I moved down to Los Angeles with my wife. Her sister moved to LA, too, so that was great. What we basically did is we took that company, and we pivoted it because the opportunity there was to build something different on the base that they had. We built it into an ad tech company that focused—our largest business became focused on health insurance, a business called Healthplans.com at the time. That was the journey. That got me into my first exposure to healthcare because I had been a B2B guy and a consumer guy prior.
Alejandro: I think that this was a really critical moment in your career because, during the time of doing Healthplans, that point is where you are exposed to the problem that you are essentially solving today with Sidecar Health. Healthplans ended up being acquired by MediaAlpha, but in this case, it gave you access and visibility into a bigger problem that you felt was necessary to cover in the market. So walk us through some of those sequences of events that happened to bring Sidecar Health to life.
Patrick Quigley: Healthplans was an incredible business. This was during the time just after Obamacare, and suddenly health insurance was a consumer product. I’m sure you remember that with the exchanges. Suddenly, consumers were shopping for health insurance for the first time. The Healthplans.com business was incredible. What it did is it helped consumers get matched with health plans that were offering products in their area, and it did it in a way that consumers could choose the right plan for them, and likewise, that the health plans could market to the consumers that they thought were the right plan for them. It’s kind of like eHarmony for health insurance selection. The problem was that nobody wanted to buy anything. So we had 30 million people come to our website to buy health insurance. If you guys remember, that was at the time where there was a mandate that you have to buy this product. Yet, over a four-year period, I think we sold 700,000 policies. That means 29.3 million people didn’t buy anything in a product that you’re forced to own and a product that is mostly paid for by the government. It was one of these aha moments that, as a marketer, when you have this huge community of people trying to buy a product, and they’re not buying it, you start asking yourself why? What’s the problem? That started early in 2017, my co-founder and I, Veronica, are looking at this, and we’re like, “Okay. Obviously, affordability is a huge issue. The ACA has huge deductible-type premiums; they’re expensive. Access is a problem. Networks are very narrow, and everyone believes that with health insurance, you always get surprise bills. I don’t know if you’ve ever had this experience, but it’s happened to me.
Patrick Quigley: It’s not okay. We’re trying to solve this problem, and I had my own health experience that led to the creation of Sidecar Health.
Alejandro: Tell us about the immediate moment. I know that the founding was very interesting, so, like the band coming together, and that moment where you said, “We’ve got to do this thing.”
Patrick Quigley: It all came around this health experience that I had. In 2017, I was having some back issues, and my doctor said, “You need to get an MRI.” So you go, and you get an MRI. Because of how my traditional insurance worked, I ended up getting a bill. I got a bill for $1,330 from this lower-back MRI. I don’t know. Is that a good price? I don’t know. I felt fortunate that I could pay the 1,300 bucks; so, I did, and I didn’t think much of it. But a month later, I had to get a second MRI. Since I knew that I was going to get billed to pay for it anyway, I happened to ask the receptionist if I could pay for this with my Visa card. She’s like, “Sure.” It will be $330. That was a shocking moment for me, a huge aha moment. I said, “Wait a minute. With my traditional insurance company, I am paying over $1,300 for a service that I can buy myself for $300 because it was the same doctor, the same location, the same procedure. I literally ran back to the office to Veronica and said, “I don’t know if this is a thing because I’m not a healthcare guy originally, but if paying for care with cash is cheaper, I think we can solve the affordability problem in the healthcare system. Insurance is just a math equation. It’s the cost of a claim x the likelihood of that claim + the margin. If we could introduce a product that has a lower claims cost, that will translate immediately into a lower insurance cost. So that’s what we did. We said, “That would suggest that we could create a product that’s 30-40% cheaper than the market. We started running around and doing a lot of work. We partnered with a great actuarial firm called Milliman to run the numbers and say, “If this was true, what could the insurance price be?” Then we partnered with a great health policy team called Avalere Health, led by a guy named Dan Mendelson, that’s out of the Obama administration, to help us think about the regulatory approach because what we’re talking about was something totally different. They came up with a structure of how we could launch our product. When this all came together, we went back to the board of the company and said, “Guys, we think this is an incredibly big idea, and we think it’s one that we, as a team, have to go and pursue. We went and said, “We can hire a new team, or we can sell the company.” The board decided, “The company is doing really well. Let’s go ahead and sell it. Let’s monetize that asset.” We did that at the end of 2017, and at the beginning of 2018, Veronica and I started Sidecar Health. We’re really fortunate that our Head of Engineering and our Head of Product came with us, part of the marketing team. We called ourselves the First Five, started Sidecar Health with a PowerPoint deck and an idea, and off we went to see if we could change the world.
Alejandro: That’s amazing. For the people that are listening to really get it, what ended up being the business model of Sidecar Health, and how do you guys make money?
Patrick Quigley: Sidecar Health is a health insurance company, but we’re totally different than every other health insurance company. What we do is we give people the money they need to pay for care when they need it by giving them a Visa card that actually pulls money from our claims accounts and allows consumers to use it to pay for doctors, MRIs, whatever when they need it. Then we combine that buying power with information. We give them an app that tells people what things cost. Effectively, what we do then, is turn patients into purchasers of care. We allow people to shop for care. Our benefit structure is very specific. What we do is we pay a fixed amount for every procedure you can do in the healthcare system. This creates incredible benefits. First of all, our product is dramatically cheaper than anything else that’s out there. Depending on the market, it can be 40% cheaper to a comparable product to a traditional insurance product. The second thing it is, it creates incredible access. It turns out everybody takes Visa, so you can see any doctor you want. That’s really important. You can see. If you’re inner-city or if you’re in a rural area—you may not be by a major health system that’s in-network, and that’s ridiculous. Everybody deserves access to care. That’s the second thing we saw. The third thing that the product does is it solves all the problems around surprise bills. Nobody should be getting a surprise $1,300 MRI bill. That’s not okay. If you’re actually paying for things, it turns out that you know what things cost, and you’re not surprised. So that’s the business model.
Alejandro: Absolutely. How much capital have you guys raised for Sidecar Health, Patrick?
Patrick Quigley: We’ve done three rounds. We’ve raised $175 million. We’re fortunate to have unbelievable investors that are trying to get us to move as fast as we can.
Alejandro: I know that it hasn’t always been a smooth ride raising the money. I know that you had some interesting events happening at the beginning with one of those VC meetings, so what actually happened?
Patrick Quigley: It’s never a smooth ride raising capital. Now that we’re established, and we’ve established product/market fit as the parlay. Let’s call it a different process than it was early on, but early on, it was pretty entertaining. Veronica and I put our own money in to start the company to give us runway to go and find the right investors. I’m sure you know, picking the right investors—when I say right investors, I’m not talking about brands; I’m talking about people. They’re going to be on your board. They’re going to be part of your journey the whole time, so it’s really important—at least, again, this is the third time that I’ve helped build a company, so I’ve learned that I care more about the people around the table than anything else. We’re out starting to meet with different VCs. Again, I’ve raised money before, but never from a PowerPoint deck. When I’m building a team—you’re probably the same—I always look for how do you fill in gaps? Where are your gaps? And luckily, I’ve got lots of gaps, so I have an opportunity to partner with lots of people. [Laughter]. I’m not a healthcare guy traditionally. I grew up in a healthcare family, but I’ve always been a consumer and tech guy. The first thing that I thought was, “I need to go get healthcare investors.” That makes sense. I’m networking to healthcare investors. I sit down with a few of them. The first healthcare investor that I got a meeting with—I will not use their name—they were very nice to meet with us. As soon as I explained the idea and the concept and what we think we can do and why we think that this is a big deal. He very nicely, at the end of listening to the elevator pitch and seeing some screenshots of our product that we expect, he goes, “I tell you what, Patrick, you’re not from healthcare. Healthcare is really hard, but here’s what I’ll tell you to do. I like your idea, but first, prove to me that you can do hard things. I’d like for you and your team to go build a better search engine than Google. After you accomplish that, come back to me, and I will fund your healthcare idea because that will demonstrate to me that you can do hard things.”
Patrick Quigley: That’s kind of an unbelievable no. It’s not just, “No. Let’s keep thinking. Let us know how you do.” It’s like, “This idea is so ridiculous that for me to even consider it, you have to go build a better search engine than Google?” I said to myself, “You don’t need to be mean. You could just say no.”
Patrick Quigley: I left this meeting going, “All right. The healthcare guys are not going to be our people until we prove that you can do this.” I think about it like Tesla. Tesla’s first car, the Roadster, was a Lotus that the team ripped out all the inner drive, and they put in cell phone batteries. “I think I can build an electric car on cell phone batteries that can go 250 miles.” That sounds a little crazy, but they proved it, and then they went, and they did other things, and they expanded market by market. What we did was we realized that what we needed to find were investors that understand consumer vision, and that can really enable us on how to help grow a company in that way. So we chose GreyPoint Ventures to lead our round, and they have been incredible, and we can talk about them at any time. They’ve been incredible partners starting out and throughout our journey to date. Then we went out and proved that actually you can build a health insurance product based on cash. Let’s just say raising money has gotten a lot easier since.
Alejandro: I can hear you. When it comes to people, I’m right there with you. I fully agree that it’s not about the brand; it’s about the people. But when it comes to filtering investors that are in it for the right reasons because as they say, the way that you raise money today is going to impact the way that you can raise money tomorrow. As you’re filtering because now you’ve raised a fair amount of money, but when you were filtering the right people for the right reasons, what were some of the things that you were looking for?
Patrick Quigley: When we sit down as a team to figure out who the right investors are, it’s always a question of what are they going to bring to the table? What’s very, very specific? It’s not just about capital. Especially right now, everybody knows that the private markets are pretty entrepreneur-friendly right now. It’s not about the amount of capital, and quite frankly, it’s also not about the terms. It’s about what value can you add. My best example of this lately is, in our last round, we just did our C, which was led by a company out of Ohio called Drive Capital. They have been exceptional. As we thought about partnering, they came to us and said, “These are the three things that we’re going to do. We’re going to help you find people for your team. You have a consumer product. We’re going to help you accelerate your launch around a business product offering, and this is how we’re going to do it. For us, it’s trying to understand: what are we trying to accomplish during the next period between rounds. As we think about our road-mapping growth, what are the milestones, and then which investors and which bellybuttons can actually influence the outcome, and have proven with what they’re coming and saying that they can do, have they proven that they’ve been able to do for other entrepreneurs by talking to their portfolios? That’s how we always evaluate things, and we’re very thoughtful about where we have gaps. Before that, we chose to go with a fintech investor because a lot of what we do, given the cards, is all fintech-related, so how can we help see around corners? That’s how we think about things.
Alejandro: I love it. As we’re thinking about plan, vision, and future, if you were to go to sleep tonight, Patrick, and you wake up in a world five years later—a tremendous snooze, and you wake up in a world where the vision of Sidecar Health is fully realized. What does that world look like?
Patrick Quigley: It’s a very great world. Right? It’s a world where everybody can afford health insurance; everybody has access to care, and there are no surprises. We like looking at Tesla because Tesla has done a great job of changing how people think about cars. It’s now obvious that we’re all going to be driving electric cars, and all of the traditional car companies are going, “Yep. I guess that makes sense, so let’s all go figure out how to go do that.” What we’re doing is changing consumer behavior. Just like cars, you plug them in now. You don’t go fill up at a gas station. We expect the world to change where people are actually in control of their healthcare. In fact, that’s why we’re called Sidecar Health. We’re putting people in the driver’s seat for their health. We’re just the sidecar. We’re giving you money and the information. That’s the world. The world is where everybody goes, and when they need a knee replacement, they say, “What’s the cost?” They understand the cost, they understand the quality, and they make good decisions. That’s the world where we think it needs to go, and the world where, whether it’s Medicare, or an ACA plan, an employer plan, everybody has coverage, and everybody can afford it, and everyone actually has control over the situation.
Alejandro: For the people that are listening to get an idea on the size of the operation that you guys have today, is there anything that you can share, maybe like the number of employees or anything to get an idea on how big Sidecar Health is today?
Patrick Quigley: Yeah. Sure. We can drive really fast, so ask me tomorrow again. Before the pandemic, we had 30 people. At the end of last year, we had 75. Currently, we have 150. We’re going to have about 250 at the end of this year. We’re really ramping up for our launching of our product on the ACA. Our first product was focused on the uninsured because nobody’s watching out for the uninsured. That was our first product because they have the biggest need. Our next product is the folks from the ACA because they have a big need and employer net. We’ve been growing employees to support that and a great team. From a member perspective—we’re still very young. We’ve only been selling products for 18 months. You go state-by-state in insurance, so we’re going to end with about 30,000 members this year, so we’re really excited about that. It’s pretty great to go from zero to 30,000 people in 18-24 months in the market.
Alejandro: That’s amazing! Congratulations on that remarkable growth. One of the questions that I typically ask guests that come on the show is, imagine that I put you into a time machine, and I put you into a time machine with all the knowledge that you have now, through the ups, through the downs, everything that you’ve seen. And I’m able to put you in front of your younger self, that younger Patrick that is thinking about starting something; maybe that younger Patrick that was at the point where you were having that discussion with a partner at Scale Venture Partners, where you were having exposure to the world of startups. If you could give that younger Patrick one piece of advice before launching a company, what would that be and why, given what you know now?
Patrick Quigley: I’ll tell you what I won’t tell him. I won’t tell him how hard regulatory law is. [Laughter] Like, “You need to know that.” He needs to know none of that. Like, “Oh, my.” What we’re doing has never been done before, so the amount of time we have to spend with regulators getting them to not look at us funny is a lot. It took us 253 days to get our first regulatory approval, so if I knew everything I know now, I think it would be hard to start. So I wouldn’t tell them that. What I would tell them is you just have to lower a shoulder and focus. There are going to be people that tell you no all the time, and you just have to believe in what you’re doing. Before starting Sidecar Health, I spent about 20 years basically doing advertising. I’ve been very fortunate in that we’ve had some SaaS, and I’ve done okay. But I never felt like I helped people. Looking back at my old self, you have no idea how many people you’re going to help with what you’re doing. Our first expense that we ever received was a family of four where the father could not afford health insurance for himself, but he got health insurance for his wife and his two kids. They went out and got a well-child care visit at a doctor they had never been to. Because we pay a fixed amount, and they had shopped around, they actually got cash back after getting care, which is how our product works. If you shop around, you keep the savings if you find a less expensive doctor. It’s so heartwarming to know that we created a good health experience for a family that would otherwise not be able to afford it. I would tell myself, “Everything that you’re doing and all of the ups and downs are going to be worth it because you’re going to have an impact on people on a real basis every day from day one.” That feels really good and is worthy.
Alejandro: Absolutely. Patrick, for the people that are listening, what is the best way for them to reach out and say hi?
Patrick Quigley: It’s easy to find me at Sidecar. The best thing to do to learn more about us is to go to SidecarHealth.com, of course. You can reach me by just shooting me an email. I’m at email@example.com.
Alejandro: There you go. Patrick, thank you so much for being on the DealMakers show today.
Patrick Quigley: I really appreciate the time.
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