Robbie Cape is the cofounder of 98point6 which combines deep technology with the expertise of board-certified physicians to provide text-based primary care anytime, anywhere. The company has raised over $86 million. Prior to this Robbie founded Cozi (acquired by Time Inc.) which provided mobile and internet-based applications to help families stay organized. Robbie started initially at Microsoft where he worked for 12 years.
In this episode you will learn:
- When is too long to go on with a project
- Having cofounders vs. being a solo founder
- Healthcare landscape
- Raising capital from friends and family
- Dynamics of marketplaces
- Management shifts to adjust to the growth of the company
- Learning go to resources
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. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE
About Robbie Cape:
Robbie passionately believes everyone deserves excellent, affordable primary care. With that in mind, he co-founded 98point6 in 2015 to harness the power of technology to improve both access and the quality of care.
Robbie’s 25-year career has centered around building consumer technology businesses and products, including founding Cozi Inc., where he served as CEO from its inception until it was acquired by Time Inc. in 2014. Under Robbie’s leadership, Cozi became the number one brand in the family technology category, with more than 14 million family members in 150 countries.
He spent the first 12 years of his career at Microsoft, where he led projects that included Microsoft Money, a program he ushered to profitability. Robbie holds a BS in engineering from Princeton University. He lives on Mercer Island with his wife, three children and their standard poodle Gingi.
Connect with Robbie Cape:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello, everyone, and welcome to the DealMakers Show. I’m actually pretty excited today because we have a guest that has been around the block a few times. So, without further ado, Robbie Cape, welcome today to the show.
Robbie Cape: Thank you, Alejandro. It’s absolutely a pleasure to be talking to you today. Thank you for inviting me.
Alejandro: Robbie, you actually, before you went at it as a founder yourself, you worked at Microsoft for about 12 years. You started there in ’93. So, you definitely experienced what it is like to be part of a rocket ship? I believe the company grew something like 20x during your period here. What did you learn from your experience at Microsoft, Robbie?
Robbie Cape: I learned a phenomenal amount. Way more than I could have expected. When I arrived at Microsoft, as you said it was 1993, and my plan was to spend three years at the company. I come from a very entrepreneurial family, and it almost is practically in my blood to be an entrepreneur. When I went to Microsoft, my plan was to spend three years at Microsoft learning from the best. In the early ’90s, if you wanted to get into software, Microsoft was the best there was. I learned everything I needed to learn in three years there. Then I’d go and start my own business. To make a long story short, 12 years at Microsoft, I was learning literally every day, and it’s the reason why I stayed for as long as I did. There was always more to learn. Finally, in 2005, I was still learning, but by that point, I finally recognized that I needed to go do what I wanted to be doing for the rest of my life. That’s, ultimately, why I left because I wanted to go start building companies. At Microsoft, I’d say three major things that Microsoft just bred into me. I really grew up there. I went there a month after I graduated from college as an undergraduate. First, was how to build just exceptional product. How to both design, build, and launch the best software in the industry. That in and of itself was enough and a skill that I’ve definitely taken from my time at the company. The second thing is how to recruit great talent. I always like to say back in the ’90s that Microsoft was the biggest company in the world that had the most phenomenal talent. Their interview practices and all of their recruiting practices were state-of-the-art. Everything about how they brought talent in and they developed their talent was just off the charts, and that definitely became core to who I was, and I actually took that away with me. Then the third thing that I learned was that my place in the world is not at a very, very large company. I think, ultimately, that was what was part of the calculus that finally got me to realize that it was time to leave. But it was an incredible experience, and I wouldn’t give back any of it.
Alejandro: Got it. How many people were there when you joined, and how many were when you left?
Robbie Cape: This is a guess. I want to say that when I got there, there were somewhere between 13 and 14,000 people. When I joined the company, I heard this rumor that in that year for whatever reasons, and I certainly couldn’t see it, they actually hired very, very few additional people that year, like very, very few. They cut back on hiring in that summer of ’93 dramatically. When I left, again this is just memory. I don’t have the specific number. I think we must have been up north of 70 or 80,000.
Robbie Cape: The company had changed a lot. When the company came out of the ’90s, the company really started to evolve. Some people might argue that it evolved in a good way, but it certainly wasn’t the same Microsoft it was in the early ’90s.
Alejandro: No doubt, 12 years with a comfortable corporate job, and then you decide to take the leap of faith to start Cozi. What triggered this?
Robbie Cape: It was a couple of things. First of all, and I don’t mean to be so dramatic, but two years before I left in 2002 or 2003, a very close childhood friend of mine passed away. She was 30 or 31 at the time. She passed away from cancer. That was emotional, and it affected my whole family deeply. But really, for me, it put this fine point on the need to do today what you want to be doing the rest of your life because, at the end of the day, today might be the last day of your life. You just never know.
Robbie Cape: That was one piece of it. The other piece of it was during that time. I actually built a relationship with a venture capitalist here in Seattle who started to give me a bunch of advice around founding a company and just how to break into that space. He had me read this book that was written by a gentleman who actually became a venture capitalist at Kleiner Perkins. His name is Randy Komisar. He wrote this book titled The Monk and the Riddle. The Monk and the Riddle talks about this thing called the deferred life plan, which as it turned out was sort of the situation I found myself in. Even when I joined Microsoft, I was literally executing the deferred life plan as Randy describes it where you’re living today to learn and grow or save money or whatever so you can live the life tomorrow that you really want to live.
Robbie Cape: He calls that the deferred life plan. These two things together really brought my situation into very sharp focus. I recognize that as a result of that, it was really time to plan my exit from the company. I made the decision at the time that it would be really fun, and educational, and valuable to actually have a startup experience at Microsoft before I left, plus I didn’t feel like I could just rip myself out. I was just deeply entrenched and in love with the company. I mean, I loved everything about the company. So, I decided to move into the position that would be my last position at the company, to basically do a startup within the company. So, I looked for a startup opportunity and found one. I did that for a year and a half. I built a brand-new team doing a brand-new effort. I got that to the point where it was actually acquired. It was moved into another much, much larger group at the company. That to me felt like, okay, now’s the time. That’s when I resigned, and I turned my attention to figuring out what was next.
Alejandro: Got it. How did you meet your co-founder, Jan?
Robbie Cape: Jan Miksovsky and I had worked together on Microsoft Money. The bulk of my time at Microsoft was spent on Microsoft Money. I joined that team just two years after I joined the company in 1995, and I stayed on that team until 2001. For four of those years, I worked with Jan. We worked very well together. I had and still have an enormous amount of respect for Jan’s product skills. His design skills, user experience, product intuition. I developed this incredible respect and trust in him. At that time, when I was thinking about all of the people who I’d love to build the company with, and that’s really where I, personally, start. I know a lot of people start with an idea or a market or a direction, and I really first dream about the who. At the time, when I dreamt about the who, Jan was at the very, very top of my list. I approached him, and he was all game. So, we were off to the races.
Alejandro: Why was he at the top of your list?
Robbie Cape: It’s three things that I think you want to look for in any partner, whether it be a business partner, or a lifetime partner, or any partner. First and foremost, there has to be a strong underlying relationship there, and we had a strong relationship that was built on, first and foremost, trust and integrity. That really solid relationship is essential. Number two: there has to be—I had phenomenal respect for him, and what he was good at, and the degree to which those skills that he had were essential to the enterprise that we were going to build. Then, number three, I felt that I could learn and grow and relentlessly improve myself by virtue of being with him, associating myself with him and spending all that time that you would spend with a business partner. Ultimately, I think that those three things are the key dimensions whenever you’re choosing any partner.
Alejandro: Got it. I’m very glad that you mentioned integrity because I honestly think that without integrity, there’s nothing. And really, like being able to deliver on your words. So, thank you for really sharing that. What was the business model about behind Cozi?
Robbie Cape: Our business model was ultimately bifurcated. We had a two-prong model. On the one hand, it was an advertising model because when we started in 2005 through 2006, and even 2007, advertising models were really the rage. It’s not what it is today. That was really the approach to building any consumer business. The concept of consumer subscription like consumers paying money for software, it really didn’t exist at that time. We started with an ad-based model, and then over the course of the first several years, by 2010 or 2011, we evolved to a freemium model where there was a free ad-supported component to the business. Then there was a subscription upsell for consumers that was based on an annual membership.
Alejandro: How did you capitalize the business?
Robbie Cape: We capitalized the business largely through both angel investors and strategic investors. So, initially, out of the gates—I’ll say I’m going to be honest through all of this, but it was very challenging raising money for Cozi. Even though it wasn’t clear to us, it was very clear to institutional investors that this couldn’t be a billion-dollar business, let alone a ten-billion-dollar business. So, attracting institutional capital was basically impossible. We tried very, very hard, and we got turned down every single time. But we were tenacious, incredibly tenacious, and we kept looking for other potential sources of capital. Ultimately, were able to raise considerable financing early-on from high-capacity—not very, very high-capacity, but high capacity angel investors. I forget the numbers now. I want to say the first six to ten million dollars that we ended up raising on the business was all from angel investors. Later, we developed strategic partnerships that led to additional financing coming from highly-strategic investors. That ended up being a worthwhile source for us.
Alejandro: All in all, how much capital was raised?
Robbie Cape: We actually don’t talk about that.
Robbie Cape: I don’t think we ever published what the total number of dollars were that we raised for the company.
Alejandro: Got it. I think I saw on our website, something around 30 million. But anyhow, the next question here that I have for you is how did you meet those investors? Did you get an introduction, or what was the process of getting in front of these guys?
Robbie Cape: It was exactly as you would expect. It was a lot of networking. We were very fortunate. In the very early stages, my family ended up agreeing to basically match any investment. For the initial round, it was very small. They matched every dollar that we raised outside dollar for dollar which was phenomenally helpful. We still had to go outside and raise all the money in order to close out the round. All in all, it was relatively speaking a small number, but still an enormous challenge. I’d say the turning point in that first external round was attracting the attention of a local, professional angel investor here in Seattle by the name of Benaroya. John Carlton at the time has come from GE Capital, and he had a look at our business and was excited about the business and ultimately made the decision to take a lead position in that first round. Seattle is, obviously, a very big town, but we still operate very much like a small town. The networks are fairly tight, and there’s a set of angel investors here in Seattle who have a lot of respect for John and his ability to identify companies. So, by virtue of his introductions and those individuals’ introductions, just through basic networking we were able to put together a round fairly efficiently back in those early days.
Alejandro: Got it. All in all, you spent about ten years with Cozi until the acquisition happened by timing. How did this M&A transaction come about?
Robbie Cape: It was nine years of building Cozi. It’s safe to say that I’m covered with scar tissue from that experience. Again, I would not give back any of it; phenomenal learning and growth. A lot of it positive and a lot it really hard learning, like very, very hard learning. We did a lot of things well, and we did a lot of things poorly. One thing that we did well was we engaged just a phenomenal number of consumer members in this very, very sticky and daily relevant task of managing family life. When we went out and started talking to potential acquirers, we had about 14 million members on the service, which had never been achieved for a narrow niche service like Cozy and certainly not any calendar service or any service for families. Especially given that most of the things that we were providing at their core level were available for free on Apple, or Google, or Microsoft platforms. We had attracted this incredibly dedicated, and loyal membership was one. Number two, we had built this brand. We worked to build the brand, but it isn’t like we spent millions of dollars developing this brand and marketing and stuff like that. We built the brand through the product that we created. After nine years, we had a brand that was highly respected in that family industry, in the industry of people who want to talk to families and to moms. Cozi was a very well-respected technology brand. It turned out that that membership plus that brand and all the attributes around the brand were quite valuable to several companies out there who were also targeting that very same demographic. When we kicked off the M&A process, we already were having conversations with several of those companies. We decided to kick off a process. We hired a bank and started to talk to a broader set of those types of companies from all sorts of industries, interesting enough. From industries that actually surprised me. It was exciting to see the level of interest across different industries for these two assets that we had built over the course of the prior nine years.
Alejandro: Really cool. How long did the process take from the time, let’s say at a board level you guys agreed, “Let’s go after this path,” until the moment the deal was actually closed?
Robbie Cape: It took six months.
Alejandro: Six months. And the terms are not public. Right?
Robbie Cape: That is correct.
Alejandro: After this experience, you go out and you basically do your most current venture which is 98point6. How did you come up with this idea?
Robbie Cape: Going back, Alejandro, to what I discussed earlier around coming out of Microsoft and starting to think about what was next, I followed that same pattern; exactly the same pattern. The first thing that I did was I started to dream about who would I love to build this next company with. I created my list. There were people at the top of the list, and there were people underneath the people at the top of the list. I ended up over the course of the following year after the acquisition happened to develop a relationship with the individual who was at the very top of the list. Now, it just so happens that the person at the very top of the list, who is very much I consider a partner. He’s one of our lead investors, an absolutely brilliant individual who I learn from just about every day. He happens to be a very private individual who has made the decision not to have his name out in the limelight. So, he’s in the background, and I speak to him all the time still, just about daily. Sometimes, often multiple times a day, but it was ultimately, that partnership with him and the work that we did over the course of that time, over the next year and a half to two years after we sold Cozi, that ultimately ended up evolving into what is 98point6 today.
Alejandro: So, is this partner involved in the day-to-day, or it was just like at that point, and he’s just like for strategy and other stuff?
Robbie Cape: He is not involved day-to-day with the business. As I mentioned, I do talk to him just about every day. He doesn’t have an office here. He’s not operational in the business in any way, but he’s a phenomenal coach. Calling him an advisor understates the value that he brings, and I really do believe that every single CEO out there should have an individual like this who is right there with them, who is actually not in the business. I think there’s value in that individual not being in the day-to-day and really having this highly objective outside view because that’s often what you need. I mean, that’s the role that your board plays, but your board, first of all, they’re involved in the business, is always going to end up being limited. They usually have other full-time jobs. And the amount of time that they spend with the business is typically going to be limited. At best, it’s a full day once every month or two. That’s very different than the sort of relationship that I have with my co-founder. We’re literally on the phone every single day, and he has a direct line into how I’m feeling. I often talk to him about how executives are feeling. He has insight, again, on a very frequent basis into the things that I’m feeling really good about, the things that I’m worried about, and that sort of context is so helpful when I’m faced with an issue that I need to deal with. That doesn’t happen every day because our executive team is incredibly strong. I’m so fortunate to be surrounded by these truly, truly outstanding individuals who are carrying the water in each of their areas and with each other day and day out. But often there are decisions that I need to make, and having an advisor, a coach, a critic, who is capable of talking through those sorts of decisions with me, who doesn’t have a vested interest in the answers other than the success of the business itself. In other words; there’s no operational implications to him. It provides just amazing clarity. It also helps me learn and grow every single time we go through a tough issue like that together.
Alejandro: Got it. Just out of curiosity, the employees know who this person is?
Robbie Cape: Oh, absolutely.
Alejandro: Okay. I was just wondering if this was kind of like a ghost partner that only a few people know.
Robbie Cape: No.
Alejandro: Okay. Cool. What’s the business model of 98point6 so that the listeners understand it?
Robbie Cape: The easiest way to put it is a membership model. We’re providing on-demand primary care through your mobile phone. Obviously, there’s a much larger mission and vision, but to answer the question just about business model, we are delivering unlimited primary care through a text-based, private, secure mobile application on your phone. We can also do video and we can do audio, and those things. But really, our experience is optimized around this text-based experience. The model is membership oriented. So, you pay once for an annual subscription. Then you have unlimited access with no utilization fees, except if you happen to be on a high-deductible health plan. There are a bunch of IRS regulations related to how people pay for medical services when they’re on a high-deductible health plan. So, we have to charge fair market value for the visit in that case. It’s a very low number. We make the service available in that same membership-based model to self-insured employers and to some of our other larger partners. So, it’s very much a membership-based, unlimited utilization service. Very much like the other services that consumers have become accustomed to accessing on their televisions at home, and on their mobile phones and tablets, and throughout their lives.
Alejandro: I heard you say that you want to be in sickness, but also in wellness with your customers. What do you mean with this?
Robbie Cape: That’s exactly right. We are building a service that certainly when someone is sick, that is a very compelling call-to-action for them to try 98point6 and to have a great experience with 98point6 that they will want to tell everyone they know about. Certainly, that’s our goal. However, we want to be engaging that individual in their health. We actually view the transactionalization of primary care that we’ve seen develop in the existing health care system as a rather major problem. We believe that transactionalization is a regressive innovation that has occurred in the primary care industry. We think it leads to a bunch of bad outcomes and bad results downstream. We are trying to deliver what we often refer to as old-fashioned primary care; the primary care that was practiced 30, 40, 50 years ago where an individual’s relationship with their primary care physician at that time was one of the most important relationships in their lives. When they had a major life change, one of the first calls that they would make would often be to their family doctor. That was primary care. When we look at the impact of a relationship with a primary care physician, and the impacts of that relationship are just outstanding. When an individual has a relationship with their primary care physician, they are 19% less likely to die a premature death. They will save 33% on their healthcare costs over the course of their lives. It’s phenomenal, and yet, our nation is driving quickly to a state—well, we already have a shortage of primary care physicians, and that shortage is growing. By the year 2020, we’ll have a shortage north of 20,000. By the year 2025, that number will be over 30,000.
Robbie Cape: The systems, our nation’s response to that has basically been the transactionalization of that care. In other words, almost an innovation on top of fee for service is that you walk into a clinic and you pay them $40, $50, $60, $70, $80 and they write you a script for whatever was wrong with you in almost all cases. That sort of experience doesn’t bring all of those benefits that I was describing around a relationship with primary care. What we’ve done is through technology, we are virtually introducing thousands and thousands of new primary care physicians, the equivalent of new primary physicians into the market. Instead of relying on a relationship with a single individual, we are building out a service that will deliver that relationship. So, in our vision, that relationship that people would have built with a traditional primary care physician, 30, 40, 50 years ago, that is the same relationship that we want to enable them to build with 98point6. Just like that family doctor was there for that individual 30, 40, 50 years ago for all sorts of issues that happened in their lives, we want to be there for that individual, also for all of those issues. We want to be the place that they go for the people who are happy to have that be a technology-based service as opposed to an ambulatory experience. Unfortunately, those ambulatory experiences are few and far between right now and are largely reserved for the people who can afford the hundreds and hundreds and sometimes thousands of dollars that you need to spend for a concierge doctor which is really the analog of what we’re doing digitally. For all the other people who can’t build that sort of relationship, who can’t afford to build that relationship with an individual in an ambulatory setting, we want to build that relationship with them and deliver the full lifecycle of capabilities but do so digitally. It will limit what we can do. There’s no question. We can’t do everything that can be done in an ambulatory setting with that individual, but we can do the vast majority of things.
Alejandro: I imagine, as well, that security and privacy with something like this has probably been a challenge, or maybe not. How did you overcome some of those hurdles?
Robbie Cape: It has to be a focus. The way you do it is by dedicating the resources to being best of breed on that dimension. Unfortunately, what that translates into is needing to behave like a very, very large company. We happen to have been afforded the ability through just exceptional fundraising to do the work necessary to be a large company on the security and privacy front. We can’t be a little startup that puts it together. When you’re a little startup, and you’re delivering social networking capabilities. Pick your startup out there where the stakes around privacy and security are much lower, you can afford to put it together with duct tape and baling wire. That’s an option. For us, that was not an option. We had to be state-of-the-art with security and privacy from day one. The steps that we’ve taken continue to reflect that. As an example, after less than a year with our product actually out there in the early beta. Now, we’re talking about the end of 2017. We were only two years old, and our product had been used by maybe 50, 75, maybe 100 people. We were tiny. We conducted our first SOC 2 audit where an independent firm comes in and looks at all of your security and privacy methodologies and processes and capabilities and platform choices; everything that you do at the deepest, deepest level. It is unheard of for a company at our maturity at that time to conduct that sort of audit. For us, it was obvious. Like, “Of course we have to do that. We have to behalf like a big company.” That has translated into our ability to close some critical contracts. Every contract, we often will be building partnerships with self-insured employers who have 10s of 1,000s and in some cases 100s of 1,000s of employees. They will unleash their security and privacy teams on us, and they are blown away with what they see. They walk in, and they’re used to seeing a startup. They end up coming in and yes, in terms of our age, we look like a startup, but in terms of our maturity on the security and privacy front, and on a lot of other dimensions as well, we look like the company that’s been around for 10 or 15 years. They’re blown away by the ease with which we make our way through these security audits that they put in front of us. We’ve heard from companies with literally millions of members. We’ve heard stories from them like, and I’m quoting here. “A company that we’ve evaluated has never passed our security audit on the first round. It’s never happened. And yet, 98point6 did.”
Alejandro: Let me ask you this: it’s interesting what you were saying on behaving like a mature company and really not acting as a startup. I totally get that. I wanted to follow-up on that and just ask so that the listeners are able to get an understanding on how you capitalize the business itself. How much capital did you guys raise for the business that is publicly disclosed?
Robbie Cape: We have raised 86 million dollars.
Alejandro: Got it. I saw that you did a seed round, a Series A, a Series B, and most recently a Series C. How did you see the expectations from investor change from financing cycle to financing cycle?
Robbie Cape: As you would expect. In the very early days, the investors were expecting us to—if you look at our seed investment, and that was a pure inside round. So, that round was covered by my co-founder and my family. So, his family and my family. They were actually, probably, to date have been two incredibly critical and very high expectation investors because they’re closest to us. They have those relationships to set very, very high expectations. At the early days in their expectations, they saw a plan on the back of an envelope. Now, it turns out that my co-founder was part putting together that plan on the back of the napkin. But there were so many assumptions that we had made. What we did was we established some very clear milestones in that first seed investment. We actually trounced the investment, and we’re not going to be able to take down additional trounces of that initial three million dollars until we achieved those basic objectives in the business. One of the things that we decided that we were going to need to do, we put it down in writing in front of the investors as requirement was, we were going to need to go out and get a third-party legal and regulatory analysis of our vision, and basically, reality check from a legal and regulatory perspective that we were going to be able to deliver on what we wanted to. Now, we had done a bunch of research and had expected that based on our research that we’d be able to do that, but we hadn’t gone very, very deep with a nationally recognized health care law firm to understand our business at a deep level. So, that was a requirement. The expectation of that seed was that we would check that box. Another thing that was an expectation of that seed round was that we would be able to put together a set of medical advisors through this medical advisory board that we established that would—by virtue of their willingness to be a part of the team, they would lend an element of credibility to what we were building. And, also, provide us with phenomenally valuable feedback on the plan because remember, in those very early days, it’s really less about executing the plan, and it’s more about formulating the plan. Then thirdly, obviously, the absolute hardest thing that you do when you’re kicking off a business and there are some really tough requirements that those seed investors put on us was around building the team. So, that was the expectation in the very, very early day. I’m not going to go through each round, but in those early days, the expectation was around creation of the plan. As you move through to the next round like an A, at that point, your plan is established, and really, they’re investing in the plan, and they’re more looking at your ability to actually execute on that plan. To actually begin to build the product that you say you’re going to build and hit the milestones that you’ve established around building that product and get early reaction from people to that product, so really starting to look at the details around the product build. As you move forward to the next round, you start to look at commercial viability, and expectations start to come in. With a company like ours that, obviously, take a little bit of time to get out into marketplace given the decision timelines that self-insured employers who are going to be our first channel engage in that B-round, the expectations there were really around proving that commercial clients, not at huge scale, but at some scale were willing to sign contracts and deploy with their members. It’s really proving that there’s a market need there and that the market is willing to engage with an early company in this space. There are high expectations around that. Then in the C, it’s really more around scaling that you can show coming through the C. The C investors, at least in our case, really want to see that you’re on this growth curve that would enable you, as some investors like to put: that enables you to get to what they call escape velocity, that enables you to build the business that is really going to operate at a substantial scale. I think at this stage, it’s not necessarily that you’ve achieved that phenomenal scale, but that there are many indicators, very real indicators that show that you are going to get to that scale, and it’s just a matter of executing now to get there. Along the thread of all of those are that you’re building the team effectively, that you have the right leadership in place to not only scale the delivery of the product but also scale the team and the operation, that you’re building the right values foundationally in order to scale the organization. One of our investors, and he’s actually a board member, likes to say that “Culture is not the most important thing. It is the only thing.” That’s a quote from Jim Sinegal, the co-founder of Cosco, and the former CEO of Cosco. And it’s true. Our investors have absolutely evaluated through all the rounds at different levels of scale in the organization, have evaluated the culture of the company because ultimately, we’re growing quickly, and that foundation gives us the platform on which to build up this skyscraper that we’re trying to build. So, there are absolutely examining that. Then, lastly, they’re always through all of it, they’re evaluating your execution. At every round, you say, “Listen. We’re going to do A, B, C, D, and E over the course of the next year. Stuff happens, and things change. Still, investors want to see that you’re capable of making commitments and then executing all the steps that you need to execute in order to deliver on those commitments. They understand that things change, and goals change, and we have to be nimble, and certainly adjust on the go. But they also need to see that you can execute, and that’s the case in every single round.
Alejandro: I love it. I think that out of the guests that we’ve had, you probably explained the best, the expectations throughout every single financing cycle, so thanks for doing that, Robbie.
Robbie Cape: You’re welcome.
Alejandro: I always ask this question to our guests. If you could go back to the past and give yourself one piece of advice before launching a business, what would that be?
Robbie Cape: It’s very difficult to zero into one thing. I think there’s a bunch of things that we did well at Cozi, and that we’re doing well at 98point6. There’s a venture capitalist here in town who told me, as we were selling Cozi, he pulled me aside. It’s interesting. At Cozi and not at 98point6, we have never taken money from venture capital, and yet, we have a lot of relationships with venture capitalist. In fact, we have an institutional growth investor on our board of directors here at 98point6. That’s Nader from Frazier Healthcare. So, we have a lot of relationships, and we can gain a lot of learning from those individuals’ experiences building many, many companies. But this one individual here in town who is in the consumer space, he told me, “Robbie, your tenacity is both your greatest strength and your greatest weakness.” Over the years, I thought that was very insightful of him, and over the years, I’ve come to recognize that he probably says that to a lot of CEOs. If there was a class for CEOs, let’s say it was an eight-week class, there would literally be a week about tenacity, and what it means to be tenacious, and what it means to drive through obstacles, and the ups-and-downs, and how you have to power through the downs and celebrate the ups. I mean, that’s all. It’s all about tenacity. Unfortunately, that same course is not going to have a week about how to fail.
Robbie Cape: And it’s really unfortunate because it turns out that the vast majority of CEOs are going to fail, and there’s no playbook page, let alone a chapter or a week of a class that is going to teach you how to fail because remember, they’re just teaching you about tenacity. However, one of the most important things, and when I talk about the scar tissue that I’m covered with from Cozi, and it was a phenomenal experience, and as I said, I would not give any of it up, was that it took too long. There’s no question that given the amount of time that I dedicated personally in my own life to that effort given what we ultimately built, it took too much time. You talk to a CEO, and you talk to them about the things they’re most worried about and the biggest problem that they’re having, and all these things, they all say their scarcest resource is money. They’re always talking about the next round they have to raise and how are they going to get the money. How much money they’re going to raise, and all this stuff. Again, that’s another week of this eight-week class is raising money because money is your oxygen. But they don’t teach you about your time. It turns out that each of us as individuals on this earth, our scarcest resource is not money, it’s time. And in so much as we each are driven by impact, we need to constantly be making sure that we’re making the best use of our time, which brings me back to failing. My bet is that most founders, most CEOs, most co-founders, partners at young companies take too long to fail.
Robbie Cape: Because it’s impossible to know when to be done; when to move on. I like to use this term, although it is way oversimplified. It’s not fair to say it, but I’ll often say it anyhow, I say. The biggest learning I had coming out of Cozi was fail-fast. The truth is putting that into action is almost impossible because how do you know? It’s impossible to know. You’re in the middle of it. Again, it’s another great reason why you want to have these relationships with people who are a little bit on the outside who are a little less emotionally invested, or maybe dramatically less emotionally invested in what it is you’re building to be able to have that conversation with you, but you need to have it frequently. It’s not just something you should be talking about when you’re in the situation at the very end. You want to be thinking about it day one as you’re building the business to begin to establish some of the framework that’s going to help you make that decision that is likely going to be—you hope it’s a decision you’ll never need to make. But you have to develop that rubric when things are good so that when it comes time to potentially, God forbid, make that decision, that you’ve established the framework to go ahead and make it because it is the hardest decision you’ll ever make as the leader of a young developing company.
Alejandro: Yeah. Very powerful, Robbie. You’ve been very generous with your time. So, what is the best way for folks that are listening to reach out and say “Hi?”
Robbie Cape: The best way to reach out and say “Hi” is to go to 98point6.com. Download 98point6. Signup. I mean, it’s $20 for the first year for unlimited access to primary care, and I can assure you that even just experiencing the product once is worth the $20 so that you can then send me feedback, and I think LinkedIn is a great way to do it. Send me feedback on LinkedIn about your experience with the product. That’s absolutely the best way to get in touch with me, and I love getting feedback. Please don’t share any private health information, but I absolutely love to hear any feedback that people can give me and ultimately give us because I share that feedback with everyone at the company. Every individual encounter and we’re doing a lot of encounters every day now, so we get a lot of feedback, but every element, every little kernel of feedback, every little piece of gravel—it’s not gravel. It’s actually a little piece of gold for us, and it helps us relentlessly improve the products. That’s by far and away the best way you can get in touch. Use the product and send me feedback.
Alejandro: Amazing. Well, Robbie, thank you so much for being on the DealMaker’s Show.
Robbie Cape: Thank you so much. I appreciate your time.