The DealMakers podcast features entrepreneurs that have been successful with M&A transactions or capital raising efforts.

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Rajaie Batniji is the cofounder of Collective Health which is a company providing an alternative to traditional health insurance. The company has raised over $430 million. Their lineup of tier-one investors includes Softbank, DFJ Growth, Life Financial, Google Ventures, NEA, Formation 8, Great Oaks, RRE Ventures, Signatures Capital, Maverick Ventures, Redpoint, Oakhouse Partners, S28 Capital, MSA Capital, and Green Bay Ventures.

In this episode you will learn:

  • How to get through the dark days of entrepreneurship
  • Tips for growing as a leader as you scale your business
  • How to embrace uncertainty when launching a startup
  • Rajaie’s top piece of advice for starting a business

 

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About Rajaie Batniji:

 

Rajaie Batniji uses his background as both a physician and political economist to create a better, data-driven, and more efficient health insurance experience.

Rajaie Batniji provides direction on Collective Health’s partnerships with healthcare providers and networks and oversees Collective Health’s analytics teams and employee health management programs.

Rajaie Batniji Batniji is also Clinical Assistant Professor of Medicine at the Stanford University School of Medicine.

Rajaie Batniji received his doctorate in International Relations (Political Economy) from Oxford University, an MD from UCSF, and BA and MA degrees from Stanford University.

 

Connect with Rajaie Batniji:

 

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FULL TRANSCRIPTION OF THE INTERVIEW:  

Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. What a guest that we have today. I think that we’re going to learn quite a bit – from going from professor to medical to starting his own business, scaling it, raising money, you name it. I think that it’s going to be quite an exciting conversation. So without further ado, I’d like to welcome our guest today. Rajaie Batniji, welcome to the show.

Rajaie Batniji: It’s great to be with you, Alejandro.

Alejandro: So you were born in Gaza. How was life there?

Rajaie Batniji: Difficult. I don’t remember much of life there. I was born there and moved to the U.S. when I was about two. But it’s certainly a challenge, and thinking about where I came from. My parents told me I was born feet-first in a stairwell in one of the poorest, and certainly most troubled parts of the world. So, it’s a constant reminder of how lucky I am, and how much good fortune I’ve had to have the opportunities that I’ve had to learn as much as I have, coming from a place where very few people have that chance.

Alejandro: Absolutely. So what triggered them to move to the U.S.?

Rajaie Batniji: Well, for my dad, he was the first in his family to really go to college. None of his parents and none of my mom’s parents really had much formal education at all. I think finishing elementary school was as far as most got. So for him, he said education was everything, and education there was really mobility, especially coming from a place where he had been displaced by political instability. He always told me, “The only thing that can’t ever be taken away from you is what you learn.” So, he learned. He became a dentist. He was lucky enough to get a scholarship to go to USC, the University of Southern California to pursue his doctorate, and that’s what brought us to California initially on a student visa, and obviously, we ended up staying.

Alejandro: That’s amazing. I did that journey too; the F-1. And then from that, H1B, and then the green card. So, good stuff. So being raised in Southern California, how was life there, and how was life growing up there?

Rajaie Batniji: I grew up in a town called Diamond Bar mostly. It’s kind of a white picket fence neighborhood. The focus there is on the school and the sports, so it was quite suburban. I think maybe the only thing interesting or unusual about my town growing up was that Snoop Dog lived on our street. But he had a white picket fence. It wasn’t that rough.

Alejandro: Got it. So it wasn’t like you would walk past his house, and you’d get high or anything like that.

[Laughter]

Rajaie Batniji: If I did, I’m not going to talk about it here.

Alejandro: Good stuff. So after that, you decided to go into Stanford. What triggered this, and what was the experience?

Rajaie Batniji: Yeah. Like most kids, they’re ambitious. I visited all the schools and applied broadly. I remember waiting for the calls of acceptance eagerly. I think I sat outside of my house and chased the mailman up the road to grab the letters. Back then, they actually came with physical letters. If it was a big one, you got in. If it was a little one, you didn’t. I saw the big one, and it was like the most exciting thing ever. Yeah, I had a great time there. I think it’s a place that is really unique. I feel very lucky to have been educated there, but even more lucky to have the friendships that have come out of my time there as an undergraduate, and a graduate student, and later on even a physician.

Alejandro: And why history?

Rajaie Batniji: I majored in history. I think, as a kid in high school, I was always really good at math and science. I wanted to learn something that I didn’t think I was that good at. So, maybe it was counter-intuitive. I said, “What am I least strong at? What did I not learn the most? And so, I started taking history classes. I really just got fascinated. I thought I was actually, during college, I loved it so much I wanted to go do a Ph.D. in history. I actually did my Master’s at Stanford in history as well. I think my focus was always on the intersection of history and medicine. I had a real interest in understanding how people thought about their health, how they thought about wellbeing. In the main paper, you do a major paper for your degree, that I did was on different approaches to treatment of the mentally ill in what you think of as the Middle Ages, and Jewish, Christian, and Islamic traditions and the approaches they took, all the way from the Fall of Rome to the Fall of Constantinople. So I was fascinated by the evolution in how we think about health, wellbeing, and disease. I thought I was going to go down that path fulltime.

Alejandro: Very, very cool. Then medicine ended up being the path. Why?

Rajaie Batniji: Like I said, I thought pretty seriously about doing my doctorate in history. It was actually one of my history professors who, in a conversation, expressed frustration about writing about challenges in the world both present and historic, but not necessarily being in a position to help where advocacy action was not part of the profession. Based on that and some experiences that I had as an undergraduate and doing bits of clinical work in developing countries, I decided that I wanted to be a practitioner. I applied to medical school very late. I submitted my applications on the last day that you could submit your application, but I was lucky that it worked out.

Alejandro: Got it. And the Ph.D. Why did you think a Ph.D. would make sense at the time?

Rajaie Batniji: During my last year of medical school, I left to go do my Ph.D. I don’t know that I thought it made sense, so I can’t tell you that it was part of a grand plan. I think if it were, I probably would have done it differently. I think, for me, during medical school, I probably had a bit of an identity crisis. I loved medicine. I loved caring for patients. I focused most of my time at San Francisco General Hospital and did a program there focusing on underserved medicine. I think I was spending all my free time reading about policy and history; scratching an itch that I felt I needed to address. I don’t think I was the star student during medical school. I got by. I did pretty well. Luckily at med school, most was pass-fail. But for me, it was just this curiosity, and this feeling that I wasn’t really fulfilled doing clinical medicine all the time. I wanted to be able to think about the bigger picture. It was driven in part by what I saw on my patients. If I was going to address the concerns that were bringing my homeless patient with alcoholism into the hospital, it wasn’t just about giving them the right treatments at that time. It was about how do we create the structures around them that make for a more equitable, social, and healthcare system, and how do we fix what’s fundamentally flawed in our healthcare system that makes access to care so complex, so aggravating for so many of us that actually leads to the bad-health outcome? It was this desire to want to think about the upstream determinants of health. Now people call those social determinants, but it’s social, it’s policy, it’s economic. I mean, it’s all encompassed in that. That’s part of what drove me to England, where I was lucky enough to get a scholarship that sent me to Oxford and pursue a path thereof really exploring international policy and international political economy.

Alejandro: Wow. What a diverse background. I mean, jumping from history to medicine to international relations. I’m just getting dizzy from all the knowledge that you acquired.

Rajaie Batniji: I think I got dizzy along the way. Maybe not from the knowledge, but from the changes in context.

Alejandro: Got it. So after all these studies, you then became a doctor, or what happened?

Rajaie Batniji: Yes, somewhere along the way, somebody hands you a medical degree, but you really become a doctor when you do your clinical training.

Alejandro: Okay.

Rajaie Batniji: So after I did my Ph.D., I actually came back to Stanford and started my residency training. Stanford was a great place to do that. They actually allowed me, after my first year, to do residency halftime, so I could spend half my time doing research and other work, and the other half actually doing the residency and the clinical work. So, I got to fulfill both halves of my interests.

Alejandro: Very, very interesting. What were you seeing at this point? What were the interests that you were getting? How were you starting to see the future path for you as a professional as well? What was opening for you?

Rajaie Batniji: At the time, I thought my future path was the path that was in front of me, the path that I was familiar with, which was, treat patients in a clinical setting, and then be an academic in addition to that writing papers about how to make the healthcare system better in this country and around the world. I pretty eagerly pursued that path, but not too far into it, as I was starting a faculty appointment, I kind of realized that maybe that wasn’t the best path to change. Maybe that wasn’t the path that would allow me to have the impact that I wanted to have or that would make me fulfilled. It just so happened that my good friend, Ali, who’s my co-founder at Collective Health – he got sick, and incidentally was treated at Stanford. He had what’s known as a volvulus of the small intestine. The small intestine twists upon itself. The bottom line is he was in and out of the ICU. He got really good clinical care, and then afterward, he got a mountain of bills from his insurer. Some of them said they were real bills. Some of them said, “This is not a bill.” Some denied coverage and said he had to pay for it. He came to me, and he said, “You know something about healthcare and healthcare finance. You’re a doctor. This is what your academic work is in. Can you tell me, is this normal?” I was like, “Yeah, it’s normal.” Then in the course of those conversations, it came clear to me, and it was clear to him, “You’re not going to fix this by writing papers. We’re going to fix this by actually creating an alternative to a very broken status quo. If I think back to why I didn’t want to become a history professor in the first place, it was because I wanted to a practitioner. I think what I realized is a combination practitioner of medicine, but a researcher of policy – I wanted to be a practitioner in both realms. There was no more aggressive or rapid way of becoming a practitioner to make an impact on the healthcare system than starting a company that could fundamentally align the incentives in the system and grow that company quickly as we were very blessed to be able to do in this part of the world.

Alejandro: Of course. It makes total sense, and I believe that Ali also had a really interesting background as well, so he had built a bunch of companies too. He had been around the block a few times, and I think he was with Keywill Software or something like that, but the idea, basically, was that he had the entrepreneur bug, and he got you contagious with it.

Rajaie Batniji: I think that’s a fair way of putting it. We both have that bug. I think mine came from inexperience and total naivety about what it meant to build a company, but familiarity with the healthcare system. His came with a personal familiarity and a personal frustration with the healthcare system and a lot of experience in building companies. We’re both grateful to work with one another.

Alejandro: Let’s talk about this brainstorming that starts to happen. You and Ali start to think about how to resolve this problem and how to bring that solution to life. Walk us through what happened.

Rajaie Batniji: Yeah. We started talking about this. We used to cycle together all the time. He was living in Menlo Park. I was living in a little cottage in Woodside. We’d go cycling and chatting about what we wanted to do. It turned into getting together most days for coffee meetings. I remember we came up with a name, Collective Health while having a breakfast at a café in Menlo Park, the one by Kepler’s Books. I forget what it’s called. Borrone – Café Borrone. We immediately went and bought the domain, and then we said, “You know what? We’re going to do this.” We had clarity. It was such an obvious problem that fundamentally what was broken in U.S. healthcare was you had the largest purchasers of care, which were employers, and Ali was on a large employer plan when he had his healthcare incident. Employers buy something like almost 90% of private health insurance. But they weren’t really the ones driving or controlling the coverage, and they weren’t the ones actually managing their population healthcare spend, but they were wanting to, and they were in a better position to do so than the traditional incumbents. So for us, it was how do you align the incentives in this system, and how do you create a company that can align those incentives? That was the brainstorm. The original thesis that we went out with to raise our Series A was really about that – was about incentive alignment in the U.S. healthcare system, and how we would form an administrator that could bring that alignment to the market. It was really a pitch deck based on that idea before any kind of product, or even a concept product was created. But a thesis – hey, no one is going to transform this healthcare system by two people or even a group of people tinkering in a garage. You’re going to have to build a pretty meaningful company before you even release your first product.

Alejandro: The Series A is something that happened pretty quickly after founding the business. I’d like to dig into that a little bit, but before we go there, what happened after that moment when you and Ali said, “You know what? We’re going to do this?”

Rajaie Batniji: Yeah. So we said, “We’re going to do this.” We began to put together a plan. We put together a mission, and we started talking to people. We selected to talk to investors that were going to be thesis-driven and mission-driven. We were lucky to find really, very quickly, an exceptional fit in the team at Founders Fund who took a bet on us as founders, took a bet on this mission before anything was created, but they recognized that this is an idea and hopefully a pair of entrepreneurs who could bring some change to the system.

Alejandro: Then, the team that you guys started to think about, those early folks that you needed to convince to really join you and enroll them in this solution that you wanted to bring to life. Who were those members?

Rajaie Batniji: Yeah. We sell it to employers, not to individuals. I first set of employer customers were really visionary companies in many ways. We had a pilot customer with a small company that does shredding of documents and document pickup and storage in the San Francisco Bay area. They took a bet on us because they knew that they wanted to do something different, and they were small enough that they had confidence that we could handle them. But from then on, in the following year, we signed on several very large marquee customers that had many, many thousands of employees, and they were interesting us with the health of all of their employees. One of the funny stories is, one of the companies that became part of our first set of cohorts, they were asked by one of our potential investors for the Series B, “Would you ever partner with Collective Health? Would you ever give your health insurance to Collective Health?” That company has had a finance, and they said, “There’s absolutely no way that we would ever give our health insurance to a startup.” Nine months later, they did. So, we remind them of that. This industry moves faster than people think, and a transformation that is up afoot in healthcare and healthcare coverage and what we think of as essential coverage. It’s changing quickly. I think those concepts are going to involve rapidly in the next five years.

Alejandro: I think that this is obviously – this is more like from the customer’s perspective, but we’re talking about a space that has regulation and all the other hurdles. When you and Ali started to execute on this, were you set on a specific profile of people that you needed to onboard as team members for Collective Health to really work with you and push on the execution side?

Rajaie Batniji: Yes, you’re right. You mentioned regulations. That was one of the first things that we observed too. And actually, the first person that joined us after Ali was someone who became our Chief Legal Officer. That was an immediate focus for us. We bought all the books that you could on the regulations on governance and self-insured plans, and read, and studied, learned. I’d say, actually, in-between the idea and even raising the Series A, Ali and I spent several weeks, months just reading and educating ourselves on how this space works and the regulations that apply because we knew that we needed a crash course. I had some expertise in healthcare finance, but it didn’t mean that I understood all the nuances of this space. It was an education and a real aggressive effort to learn.

Alejandro: So as you guys were learning and reducing that steep learning curve as well, what were some of the early days like? What were some of the challenges that you were encountering?

Rajaie Batniji: A few challenges. There are the practical ones. We got our first office, and we didn’t have any furniture in there except for standup desks. We had no chairs, so people would come and interview and sit on the floors. We had two bullet holes in the window. It wasn’t exactly a warm and fuzzy space. So those practical challenges of being a very young, strapped company. But then the ones that were, “How are we going to enter this market?” I thought one of the first things we needed to do was form partnerships so that we would have a complete end-product. We weren’t going to build everything all at once, nor do we ever plan everything before building a platform. So we need partnerships to be part of the platform. Then we also needed to find willing customers. We spent a lot of time just on the phone explaining our vision and our ambition to potential partners, most of whom just hung up the phone on us or wouldn’t take a meeting. But we were lucky to find some that took those meetings and had those discussions. There’s no reason they should have. We were a three or four-person company, and they were engaging with us. Honestly, if it weren’t for some of those early partners and some of the early medical networks that we worked with, we wouldn’t be here today. So a certain number of incumbents in this industry did take a bet because they wanted to see change happen. When it came to customers, it was a building of a relationship that showed that every promise we made was something that we delivered on. We were going to be good to our word. They could trust us, and we built that trust over that first year. That’s what led to a lot of those customers very quickly signing up with us.

Alejandro: For the people that are listening, what ended up being the business model for Collective Health?

Rajaie Batniji: The business model is really – we’re allowing employers to run their health plans out of product for the very first time. It’s a nuance known as self-insurance, but it basically means that employers are paying for the doctor’s visits, the labs, the hospitalizations of all their employees out of a bank account the employer owns rather than insuring them. It’s not a new concept. It’s actually the way two out of three Americans with private health insurance get their coverage. What historically has been done is that everything has been done manually, without technology, and with a user experience that frankly leaves us confused and wanting more by big insurance companies. We were approaching this saying, “We’re going to build a product that makes it effortless, to understand, navigate, and pay for care whether you’re a member, a child of an employee, or a spouse of an employee who is accessing care, or whether you’re the HR team at the employer who’s charged with running a benefits program and managing its costs and insuring the health of your population. We need to create products for the very first time so that we can have the experience that we all deserve, and that’s, frankly, on par with the expenditure on healthcare.

Alejandro: On the financing side, you guys raised money lightning fast. We’re talking about January 2014. You guys were founding the company, late 2013. How did you guys manage to do this?

Rajaie Batniji: I think for us, it was a massive problem for the country, a massive opportunity for a business, and an alignment around a plan that could succeed in transforming probably the largest segment of our economy, which is still stuck in the era of fax machines. That’s how we did it. Everyone recognized that, and they recognize that to do this, you’re going to have to have a lot of ambition. Frankly, I think that’s what drove our early Series A investors to want to back the company. It’s what drove our Series B investors in M&A to take a bet on us even before we had demonstrated that the product was really working in the market, which was before we had launched our first customers. They took a bet because they recognized us as a massive challenge, and here’s the first thesis that they saw that could actually invest that challenge.

Alejandro: Did you guys know early on that this was going to be a capital-intensive business?

Rajaie Batniji: We did. Like I said, and actually one of our investors and board members said Scott Nolan says, “You can’t iterate your way to space.” Scott had come from SpaceX. You just can’t do that. You know that you have to make large investments to build a product that frankly, tens of thousands, hundreds of thousands of people rely on for access to their medical care. You can’t just do that lightly. You can’t do it incompletely. It requires a truly massive build, and we knew that would be capital-intensive, but we also knew that it would be worth it.

Alejandro: As you were approaching the fund-raising efforts, what were some of the questions, or what were people really looking into something like this for them to have the checkboxes marked before saying, “Hey, I’m putting in here a check”?

Rajaie Batniji: I think the first thing – and obviously, it varies by stage. We announced recently in June of this year that we raised a Series E of 205 million dollars. But before that, we had raised from different investors at different stages. I think, in each stage, we’re looking for something different. I think early-on, and whether it was the B or the C, it was just is there real market demand for this? And what are employers asking for, and what are your early customers saying about what you’ve done for them? Is this a demand that’s going to be replicated and scaled across segments, across geographies, and can they believe that thesis that it would? Just as importantly are the market conditions and the demand is, who is the team around the table to build this because this is, as I mentioned, a massive endeavor. And do we have the right combination of technology leadership, of operational leadership, of healthcare, expertise to build the company that’s going to define the next error of American health care? I think that’s what the investors are asking themselves because they’re not going to bet on a company who’s going to do something small and incremental. So I think the people that we gathered and the team that we built mattered just as much as the product we built, which also mattered just as much as the customers that we won and their affinity to us, and the metrics that we delivered for them on satisfying their members and managing their cost. All of that mattered, and I think that alignment of those three things that I mentioned was important at every stage.

Alejandro: How much capital have you guys raised so far?

Rajaie Batniji: It’s about 430 million.

Alejandro: Wow. That’s a lot of millions. 

Rajaie Batniji: It is. It’s an enormous responsibility, but it’s certainly what’s required to have the impact on the U.S. health care system that we want to have. Look. As big of a number as that sounds, you have to remember that the competitors that we go up against for any given employer, they’re making a decision between Collective Health and UnitedHealthcare, which has 250 billion in revenue annually. They’re comparing us to giants, and we need to be able to play in that league.

Alejandro: Of course. And you were alluding to the latest round, the Series E Round that was from self-ambition fund, but you guys also have wonderful investors. You have Formation 8, Great Oaks, RA Venture, Founders Fund, Redpoint, Google Ventures, NEA. How did you guys manage to put the Oscars, the red carpet of TR1 investors?

Rajaie Batniji: For us, it’s about having the right people at the table. The first question we asked of any investor that we’re partnering with is, do they share our vision for the future of the U.S. healthcare? And every single one of those does. Second is, do they have the appetite for an effort that is going to take many years because we know, and we knew at the very beginning that this is going to be a multi-year transformation for us to be successful. This is not going to happen overnight, and this is not going to happen like a consumer app that can go viral in the same way. This is a product that takes time to socialize and to build and to expand. We needed investors that have that appetite. I think all the ones that you named and all the others that you didn’t including DFJ Growth, and Mubadala, and so many others have that appetite. Some Life Financial, which is the largest free insure in the United States for medical care. They’re a significant investor and actually our D and E. So it was really making sure the proper people onto our cap table, individuals, and also firms that had that vision and the ambition, but that also had the appetite for how big this is going to be and the timeline that it’s going to take to get there.

Alejandro: Yeah, and as we’re thinking about vision, just to follow-up on that, in a world where the vision of Collective Health is fully realized, what does that look like?

Rajaie Batniji: What it means for a member is it’s effortless to understand, navigate, and pay for care. What it means to an employer is they finally go from just being a passenger in the U.S. healthcare system where they’re paying for all of it but they don’t get to choose where it’s going, and they just pay more and more each year, and they’re getting worse and worse health outcomes, they get to go to being a driver of that U.S. healthcare system and controlling their healthcare spend and their healthcare outcomes just like they would any other part of their population. I think for all of us as Americans, what it means is a healthcare system that is up to par with what we invest. I mean, we have the worst healthcare of any developed country. We spend more than any other developed country on healthcare, almost double to our nearest competitors. We have administrative costs that are way out of proportion with the rest of the world, nearly $1 out of $4 to $1 out of every $3 goes to administrative cost. None of that makes sense. We also have, frankly, healthcare markets that are not competitive, and that’s the root cause of a lot of these problems. So I want us to also create a healthcare system that’s not only easier to use for members and more responsive to the needs of the employers who are paying for all of it, that frankly creates a more competitive healthcare system in the United States so that we can get what we deserve in terms of outcomes and efficiency because that’s what’s fundamentally broken.

Alejandro: Yeah, and obviously, a very ambitious vision here, Rajaie. One thing that comes to mind, also being a founder, and I’m sure that there are a ton of entrepreneurs on the line as well listening. The journey that we go through, there’s no such thing as a straight line. So, you have the days that are beautiful, and you feel like you’re conquering the world, and then the day when you have all fires surrounding you. My question to you is, was there a time for you, and perhaps with Ali, where you felt like it was super dark, it was super challenging, and perhaps a massive breakdown that maybe led into a really magical breakthrough that got you where you guys are today?

Rajaie Batniji: Yeah, more than one, Alejandro. It’s constant, and like you said, it’s cyclical. There are great days, and there are bad days. I think if I’m going to put it in context, I think you almost have to have a certain amount of intentional naivety in building a company but particularly to build one like we are that’s doing something that’s challenging and very established. A lot of people don’t want you to succeed.

Alejandro: Yeah.

Rajaie Batniji: I came into this thinking I had expertise like you said in medicine, and politics, and healthcare finance, and thinking I knew what was going on, but if I knew everything that I know now, and you asked me six years ago, “Do you want to start this business and do you think you’ll succeed?” It’s a good thing that I was almost naïve because expertise brings with it a certain kind of incrementalism. I think I have to work very hard to resist that, and we all do. So to me, when I talk about that, to get past those dark moments, I’m not suggesting that you need ignorance – that’s not what I mean by naivety or disinterest in learning; it’s actually the opposite. It means that when you’re in those moments that you’re constantly asking questions. They might be obvious. They might be uncomfortable. That’s actually the mentality that we’ve had over the past six years in building and growing this business in the face of often a lot of resistance. So that to me is important. Expertise, alone, is not enough. Too often, if you just rely on what you see in front of you, and what you believe the facts to be, you lose the curiosity and the optimism that will allow you to win customers, to build your team and win in the market. You have to have that, and you have to keep that with you to get through those dark moments.

Alejandro: Was there one specifically that comes to mind that you will treasure forever?

Rajaie Batniji: Yeah. One of the things that I often think of is, I think it was in late 2015, the summer of 2015, it wasn’t clear to me that we were going to get any major customer. We had just had one pilot customer with like 80 members. To make our plan work, we needed to go from 80 to 10,000. It wasn’t clear that we were going to get anywhere near that. Instead, we surpassed it. We got a lot of forward-thinking, very large companies to take a bet on us, and I think it was that optimism, that promise, that vision for the future to which they subscribed and to which our team subscribed that got them there. I think you can’t underestimate how important that is in building a company. I often say that we’re building a movement as much as we are building a company. That same sense of mission and purpose has to be not just internal, but external.

Alejandro: How big is the business today, Rajaie?

Rajaie Batniji: We’re growing. We’re about 500 employees today across three offices here in San Francisco; Lehi, Utah; and Chicago, Illinois. We’re growing out headcount. We’re growing about 100% just over the last couple of years in headcount growth. We’re growing more and more members across the U.S. We’re about a quarter-million members today. This past year we had our biggest jump in membership, so we’re growing pretty quickly, and there’s no sign of that slowing down.

Alejandro: Wow! That’s really unbelievable. I saw as well as in terms of valuation, it was reported, obviously, over a billion that there are some thoughts about IPO and things like that. What do you guys think in terms of growth? What’s in store?

Rajaie Batniji: Alejandro, we don’t disclose our valuation, or I can’t say anything about plans for the future in terms of how we might proceed. So I can’t comment on that, but to me, when I think about our growth and what we’re focused on is just making ourselves a profitable company, but more importantly, creating a healthcare system in the U.S. that is sustainable and that serves all of us well.

Alejandro: And the growth that you guys have experienced is really incredible. You were just eluding to it, but I think that for you and Ali, also as founders, you need to experience an incredible growth as well to be in parallel with the growth of the business. So how would you say that you guys have been able to accomplish this?

Rajaie Batniji: That’s a really good question. For both of us, I think we have to be pretty intentional about it. I’m not the best person at being reflective, but I force myself to be reflective and have gotten some really good feedback along the way from peers in the form of feedback, and from my wife who kind of observes me and tells me what I need to do differently, and where she sees me doing well, and not doing so well. So it’s taking that feedback to heart means letting go of some things. As a founder, you’ve got to fire yourself from a whole bunch of jobs along the way. I used to run our payroll and HR. You’ve got to let go of things. But that’s just the tip of the iceberg of what you have to let go of. So that’s important to check-in and ask what’s the value that I bring, and what can I do that’s really important to do today. Not just what seems urgent. And what can I let go of because it’s important that as we grow, the team is really empowered to run with frankly every aspect of our growth?

Alejandro: Got it. The other day, I had a really interesting chat with this individual that has – I really respect him and what he has accomplished. The valuation of his company is over 40 billion, so super hypergrowth, and in many instances he was sharing with me that he’d really felt like being in a Formula 1 dry seat where all of the pieces of the car were wabbly, and you didn’t really know if it was going to be stable enough or if it was going to crash because you’re just going as you go when you’re in the hypergrowth mode. So my question to you, Rajaie, is – it just came to mind – how do you deal with uncertainty? 

Rajaie Batniji: Yeah, I think you’ve just got to embrace it. Uncertainty has been part of this journey since day one. The only thing that’s certain is if we don’t do something to try to make our healthcare system better for the people that we serve, they’re not going to get better. That’s got to motivate us that the incumbents haven’t improved, and you almost just have to come back to your mission to remind you of why you do what you do. It’s not to be grandiose about it, but I think you have to believe that you’re going to make a unique impact to make the uncertainty tolerable and that for me, has been important in grounding. But look. You almost have to just accept that there are going to be things that you can’t predict. There are going to be things that might not work the way that you expect. It’s almost adopting that kind of Zen mindset of that’s okay, and we’ll make it work. It’s asking, what are the uncertainties that are catastrophic that you really need to plan to mitigate, and which are the ones that are okay and okay to live with? I think when you put them in those categories, it sharpens your focus.

Alejandro: Yeah, and definitely especially with uncertainty, and there are tough moments in front of you, which there are a ton of them as an entrepreneur. I remember this quote that I read: whenever you’re thinking about giving up, just remind yourself of the reason why you started.

Rajaie Batniji: That’s a better way of phrasing what I just described.

Alejandro: I’m right there with you. I fully, fully agree. So, Rajaie, for the people that are listening, there is always one question that I typically ask the guests that we have on the show, and that is, knowing what you know now if you had the opportunity to go back in time and have a chat with your younger self, what would be that one piece of business advice that you would give to yourself before launching a business and why?

Rajaie Batniji: I would say it is, embrace learning. It’s to accept that it’s okay to not have the answers and to know that you’re learning every day in launching a business just like you are in any other pursuit. At the same time that you’re embracing learning, to embrace and not lose sight of your naivety – all the things that you don’t know that bring you maybe unreasonable optimism because you also can’t build a business without hanging onto that.

Alejandro: Yeah. 100%. Rajaie, for the folks that are listening, what is the best way for them to reach out and say hi?

Rajaie Batniji: They can reach out to me on LinkedIn. They can look for my profile there or on Twitter. I’d be happy to be in touch and learn more.

Alejandro: Very cool. And what’s your Twitter handle?

Rajaie Batniji: @RBatniji

Alejandro: Fantastic. Well, Rajaie, thank you so much for being on the DealMakers show today.

Rajaie Batniji: All right. Thank you.

 

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