Jay Desai committed himself to build a meaningful startup. His health tech venture has already raised $100 million and is growing rapidly.
During our interview on the DealMakes Podcast, Jay talked about transforming the healthcare industry, how he is investing in and advising other startups and entrepreneurs, his take on incorporating your startup, including hiring co-founders, your most important employees, and solving marketplace businesses.
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Entrepreneurial DNA & Career Pivots
Jay Desai was born in Wheaton, Illinois to parents who had immigrated to the United States from India.
His father is a pharmacist. Instead of going to work for CVS, Walgreens, or some other big chain, he decided to open his own business in Chicago’s south side. He says this definitely implanted the seeds of being driven to create your own destiny.
After going to college in Michigan, Jay went on to work in private equity and investment banking.
These proved to be very foundational experiences that helped prepare him to found his own company.
At Lehman Brothers he says he learned:
- How to work hard
- About capital markets, M&A, IPOs and financing
- How to use Powerpoint and Excel, and frame and present arguments
At Parthenon he learned about:
- Market-driven and customer-driven journeys
- The healthcare industry and how it operates as a business
- What makes a good investment
- How to think about financial models and debt versus equity financing
- The type of company cultures he enjoyed, and not
His boss Parthenon Capital ended up being an investor in his current venture. That’s even though Jay had been hired out of the firm to one of the companies that Parthenon had invested in.
Then Desai decided to make a pivot in his career. He joined the Coro Fellowship in NYC and went on to Wharton for business school.
He was one of the few if only in his class to join the public sector, instead of pursuing a feel-good title and just the money. He craved something that felt more mission-driven.
He told our audience that he had become jaded with the healthcare system. Especially, how care is shaped. At the time Medicare was also slashing reimbursements. As an investor, he felt the industry was just chasing where the dollars were flowing. He wanted to have an impact and make things better.
So, after business school, Jay Desai went to work with Medicare and Medicaid. He was passionate about finding ways to improve the quality of healthcare and reduce healthcare costs. As well as investing in preventative care and coordination of care. Things that can help you stay healthy, and reduce the need to have to go to the hospital.
At Medicare, he says he enjoyed working with others who really cared about making things better. He found those engaged in healthcare policy as well as leaders who were inventing solutions.
One of the big problems that Jay encountered was that primary care doctors were only really designed to be motivated to help patients once they walked into their offices.
They really didn’t have a full picture of what was happening the rest of the time. When they did come in, they might be referred out to another facility or service provider or sent home to recover until the next time they felt unwell.
Jay saw the opportunity to change these dynamics. Both to equip and incentivize primary care doctors to engage in more preventative care, but also to equip them with more knowledge about their patients.
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This is the thesis of his startup, PatientPing. A service that enables healthcare providers of all types to be aware of their patients’ interactions, and be able to serve them more holistically.
This way the primary doctor is notified when one of their patients ends up in an ER or hospital. It gives them the chance to provide follow up care and take better care of their whole health, as well as enabling healthcare providers to communicate better around their patients. Think of it as a Slack for physicians and hospitals.
PatientPing has already raised $100M, including a Series B with Andressen Horowitz.
Storytelling is everything which is something that Jay was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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The First Ten
Your early hires are the foundation of your company culture and the DNA of your company. Jay says the first 10 are extremely important. They’ll set the tone for everything. Some may not still be around in 10 years. Most might be.
Either way, they will influence everything from your interactions with customers to your brand and who else comes on board. You may make mistakes and have to make edits as you go, but respect the importance of these hires.
Incorporating Your Startup
Jay says that if you have an idea you are passionate about and you’re ready to commit to it, go ahead and incorporate it.
While many may not agree, he says you can get started using LegalZoom. Or check out law firms who may have a quick startup program that will help you set up for free. The point is to get it done and keep moving forward.
If you haven’t picked co-founders yet, you’ll still have the option to hire them as employees or give them as much equity as you like. At least you’ll already have the structure in place and be positioned as the leader of the venture.
Listen in to the full podcast episode to find out more, including:
- The pros and cons of hiring a cofounder
- Cracking the many chicken and egg problems facing startup businesses
- How Jay found his Seed financing
- Negotiating with investors
- Jay’s top advice for new founders