This Serial Entrepreneur Raised $80 Million To Build A PE Firm Supporting AI And ML-Driven Companies Working For Improved Patient Outcomes

In the world of entrepreneurship, visionaries like Bradley Bostic repeatedly navigate the challenges of building, scaling, financing, and exiting companies. His story is about relentless innovation, learning from setbacks, and a deeply personal mission to revolutionize healthcare.

This interview traces Brad’s journey to building Health Cloud Capital and the challenges he handled along the way.

Listen to the full podcast episode and review the transcript here.

Humble Beginnings in the Midwest

Bradley’s story begins in Brookings, South Dakota, a small town of around 15,000 to 20,000 people. Born into a middle-class family, his upbringing was shaped by his father’s career in banking, which required frequent moves across the Midwest.

These early experiences, from Brookings to Sioux Falls and eventually Omaha, Nebraska, exposed Bradley to various communities and laid the foundation for his entrepreneurial spirit. His father’s role as a banker had a profound impact on Bradley’s aspirations.

“My dad was conservative,” Bradley recalls, “but I wanted to build something from nothing. He was constantly exposing me to the businesses he would work with–some good and others not so much.”

Witnessing both the successes and failures of local businesses sparked Bradley’s curiosity and desire to create something impactful.

He also got the opportunity to meet interesting and successful people. Eventually, he started pitching business ideas to get his father’s expert perspective on their potential.

The Early Spark: Tech Meets Business

Bradley pursued a dual interest in business and computer information systems during college in Indiana, a choice inspired by the burgeoning internet revolution of the mid-90s. Around this time, Netscape was released, and it was on computers.

By then, Bradley was already working on the internet through telnetting and other classic methods. He considers himself a self-taught tech person who was exposed to business. But even then, he was sure of the path he wanted to take.

While in college in 1995, Bradley developed his first business plan—an e-commerce platform for college textbooks—that was innovative for its time. Users only had to enter their class schedules, and the system would automatically identify the books they needed and deliver them.

Although the venture gained traction, Bradley chose to finish his degree, influenced by his parents’ insistence on the value of education. After graduation, he joined Ernst & Young, where his consulting work introduced him to addressing the problems and inefficiencies in healthcare.

This experience planted the seeds for Bradley’s eventual pivot into healthcare innovation. “In e-commerce, everything was about making the customer experience seamless,” he explains. “In healthcare, it was the opposite. I wanted to change that.”

Bradley was struck by how caregivers could document and bill for whatever they were doing really without regard for the patient. He wanted to tackle the problem driven by his affirmative, having an abundance mindset.

A Personal Catalyst: Loss Fuels a Mission

Bradley’s journey into healthcare became deeply personal when his mother was diagnosed with stage-four cancer. Her battle exposed him to the fragmented, siloed, and often frustrating nature and environment of the healthcare system.

“She was my best friend,” he shares, “and seeing her navigate such a complex system made me realize I wouldn’t rest until I made healthcare better for millions of people.”

This defining moment fueled his passion and determination, leading him to wake up every day with a mission: to transform healthcare.

Lessons from ChaCha: The Prototype for AI-Powered Answers

Before returning to healthcare, Bradley co-founded ChaCha, an ambitious mobile Q&A service launched in 2005. In many ways, it was a precursor to today’s AI-driven platforms like ChatGPT. Users could type in a question, and a knowledgeable human would answer.

The service provided instant answers via text using a combination of artificial and human intelligence—a groundbreaking idea in its time. Further, if ChaCha had a high probability match to the question in the system, it would answer automatically.

Since Twitter was just starting up, ChaCha integrated with the platform and would divert questions to humans in the community who knew the answer to the question. Essentially, users could ask questions via Twitter and get responses.

ChaCha achieved significant traction, scaling to 28 million monthly unique users. Bradley recalls how their marketing strategy worked brilliantly.

At one point, they associated the service with the Sundance Film Festival, positioning it in a partnership with the organizers to provide mobile answers to fans. People attending the event would see the ChaCha promotion and ask about the movies or performers to get information.

Challenges Faced and Lessons Learned

Yet, ChaCha’s innovative nature came with challenges. The fundamental issue was in the business model from the cost perspective. A microtransaction was getting shared with every single answer that was provided by the community.

But since the service had started providing hundreds of millions of answers, the costs shot significantly. Further, at the time, there was no mobile monetization. Bradley and his co-founder were putting content on the internet and monetizing it with Google Ads on the website.

ChaCha’s revenue model was further disrupted when Google changed its search algorithm. Despite these setbacks, Bradley views ChaCha as one of his career’s most valuable learning experiences.

“We didn’t quite hit the right exit angle,” Bradley reflects, “but the lessons I learned about scaling, marketing, and monetization have been invaluable.” Had the exit been executed differently, they could have sold the company for multiple billion dollars.

Building hc1 and Health Cloud Capital: A Vision for Value-Based Care

Bradley’s true calling materialized with the founding of hc1, a healthcare data analytics platform designed to optimize patient outcomes. hc1 introduced innovative ways to identify risk signals in lab data, enabling healthcare providers to deliver value-based care.

At hc1, they developed a pattern for diving deep into the given healthcare dataset, refining it, enriching it, and identifying risk signals. Instead of having healthcare care payments every time there’s a transaction, test, or appointment, better outcomes would result in higher fees.

“We wanted to move away from the perverse incentives of fee-for-service models,” Bradley explains. “Our goal was to align incentives around better outcomes for patients.” Building on hc1’s success, Bradley co-founded Health Cloud Capital in 2017 with his business partner Travis Morgan.

He recalls that the duo had some opportunities for secondary proceeds from an exit perspective while maintaining control over the company. They leveraged hc1 and diverted the proceeds into their next venture.

The venture capital fund followed a unique model: investing in ideas developed by its own team and leveraging hc1’s infrastructure. This approach allowed them to de-risk new ventures and inject more capital into them.

The Ecosystem of Innovation: A Family of Companies

Today, Health Cloud Capital has birthed several innovative companies:

• 3Aware: A platform using real-world evidence to improve the safety and efficacy of medical devices, developed in partnership with the Mayo Clinic.
• DecisionRx: Looking at prescription data at scale using AI and technology to improve people’s prescriptions, ultimately making them healthier.
• hc1: The flagship company driving advancements in lab data analytics.

Bradley explains that Health Cloud Capital is essentially an incubator or a startup studio. He also has a podcast called Boombostic Health, on which he has conversations with innovators in the healthcare space. These people eventually become CEOs of the companies they start.

Health Cloud Capital’s approach combines capital, healthcare expertise, and an extensive network of trusted relationships. “We have a recipe for success,” Bradley shares. “Our partnerships with institutions like Mayo Clinic unlock immense value, allowing us to create meaningful impact.”

The hc1 Business Model

hc1 makes money by transforming a health system clinical laboratory into a strategic asset that diagnoses patients more effectively.

It also boosts the bottom line of the healthcare system by diverting the right volume to the laboratory from other doctors across the community who can use that lab to do their lab testing as well–similar to any other business.

The lab is a business that manages its costs and works on its growth. Laboratory results inform 80% of all diagnostic decisions. So, typically, the lab is perceived to be a cost center within a health system. It is the central nervous system that controls healthcare care delivery.

hc1 has designed it to be lit up across the entire healthcare continuum to drive optimal value. It leverages AI and RLHF (learning from human feedback) technology so that every provider and healthcare system can do optimal testing of their patients, which ultimately helps them stay healthier and out of the healthcare system.

As Bradley reveals, hc1 has covered over a hundred million unique individual Americans at this point with its systems. And that’s through healthcare system relationships, clinics, and labs across the United States.

Capital Raised for Health Cloud Capital

Health Cloud Capital has raised funding worth $80M to date. Bradley talks about how the partners had retained control over the business, but as it scaled, they realized the company needed additional connections, ideas, and talent.

Accordingly, they have been very selective about the investors they brought into the business. Further, Health Cloud Capital has recently executed an acquisition for its talent while partnering with Arsenal Partners, which owned the asset it acquired.

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Bradley explains how they have connected up to thousands of healthcare systems and labs and generate the kind of value across all the data. They’ve trained their AI algorithms with over 90 billion lab results.

The system can automatically organize and enrich data in a way that could not have been possible without training the models. Moving forward, Bradley expects to scale in additional ways and expand organically and through acquisitions.

A Bold Vision for Healthcare

Bradley’s vision for Health Cloud Capital stems from his experiences with his mother’s illness. At the time, no conventional treatment options were available to help her. They had to rely on experimental treatment. But their research for answers yielded no results.

Bradley foresees a world where every diagnostic test leads to an optimal treatment plan for the patient. Every time patients are identified where they’re eligible for some novel new treatment and an experimental program, they should be matched automatically.

As a result, patients can get the best possible care to increase their life expectancy. More lives can be saved if an accurate diagnosis is made as early in the illness as possible. Next, the treatment being provided should ultimately connect to the pharma industry.

That’s how they can develop new medications, therapies, and treatments. Bradley wants to wake up to a world where all this is made possible. In retrospect, he would have built more sustainable and scalable companies by ensuring they earned recurring revenues.

In Conclusion

Bradley’s passion extends beyond entrepreneurship. Through his Boombostic Health podcast, he connects with bold innovators shaping the future of healthcare. His mission remains clear: to revolutionize patient care through data-driven solutions.

As Bradley continues to lead transformative efforts in healthcare, his journey serves as a testament to the power of resilience, learning, and an unwavering commitment to making a difference.

From his Midwest roots to his current role as a healthcare innovator, Bradley Bostic’s story is one of inspiration and purpose—a reminder that personal passion can drive global change.

Listen to the full podcast episode to know more, including:

• Growing up in a banking family exposed Bradley to the successes and failures of local businesses, igniting his entrepreneurial ambitions.
• Bradley’s first venture—a college textbook e-commerce platform—demonstrated his knack for blending technology and business innovation.
• The loss of his mother to cancer drove Bradley’s mission to revolutionize healthcare and improve patient outcomes.
• His early venture, ChaCha, taught invaluable lessons about scaling, monetization, and the importance of sustainable business models.
• hc1 leverages AI to optimize lab data, aligning patient outcomes with value-based care and transforming labs into strategic assets.
• Bradley’s venture fund serves as a startup studio, creating healthcare companies and fostering innovation through capital, expertise, and partnerships.
• Bradley envisions a future where diagnostic tests automatically guide optimal treatment plans, saving lives and enhancing healthcare efficiency.

 

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