1Mby1M Virtual Accelerator Investor Forum: With Julien Nguyen of IT Farm (Part 2)

Sramana Mitra: We’ve seen a bunch of unicorns come out of that part of the ecosystem. There’s Veeva and athenahealth on the payment side.

Julien Nguyen: That is just the beginning. There are deeper problems that can be solved. The number two part is using technology to increase the efficacy of current practices. For example, precision medicine is one of them. How do you pick the right cocktail of drugs for a cancer patient depending on their RNA?

This is not about inventing new drugs and finding new molecules. You’re just applying the ones we already have in a better way. Then you see a new area, which is the blue sky thing on aging, which everybody talks about. We feel that the first two areas are really important. It will decrease the cost of healthcare and at the same time, increase the efficacy of healthcare that we have.

Sramana Mitra: Your preferred area is on the process side; not on new drug discoveries but more in the process and efficiency of the healthcare system.

Julien Nguyen: Absolutely. People have spent tens of billions of dollars to develop molecules. Right now, they’re being applied really badly. Just applying them better will make a huge difference. Our startups don’t use a lot of money. They are very much like software startups. They are very capital efficient.

Sramana Mitra: Talk about your current portfolio. What have you invested in? Talk about some of the deals that you’ve invested in. What is it that you’ve been attracted to and how do you decide what you want to invest in?

Julien Nguyen: I’ll give you a quick example of three companies. One is DoseDr. This is a way for diabetics to have a very accurate measure of how much insulin they should inject themselves with. Diabetics have to measure their glucose several times a day. Every time after that, you have to get an insulin injection. Right now, you get the same dose every time.

With DoseDr, you put in the glucose you measured and the app tells you exactly the dose you have to take. This is completely real-time management. They tried that on several hundred patients. Within four weeks, more than 90% of them became normal. One out-of-control diabetic can cost an insurance company about $100,000 a year.

Sramana Mitra: What is the go-to market strategy for it? Is it going through the insurance companies or going directly to consumers?

Julien Nguyen: The go-to market is quite simple. We, of course, have to find who pays for it. When you talk about large insurance, they all have the problem of controlling the diabetics who are employees. For them, they are very happy to pay even a few thousand dollars a year to those doctors to avoid a hundred thousand a year. We see that insurance companies starting with self-insured employers are the best place to go. Their ROI is obvious. We never had to convince any payer how good this is for them.

Sramana Mitra: Great. What is your second example?

Julien Nguyen: It’s about the process for doctors. Doctors have a hard time collecting the copays from patients. More than $40 billion per year goes uncollected. We invested in a company called Collectly, which is a YC graduate. The first one also came from YC. They apply a very smart way to collect unpaid bills. They can collect 50%, versus agencies who can collect 20%.

Even more important is, they don’t destroy the relationship between the doctor and the patient. When you receive these letters demanding payment, you don’t really feel good about your doctor after that. They basically can collect more than double.

Sramana Mitra: That is the counterpart of athenahealth. athenahealth does the collection from insurance companies and your company does the collection of the copay from the patients.

Julien Nguyen: Actually, we collect right after that. Collecting from patients is more and more important. The number three is a company called Darmiyan. They have a technology that can analyze MRI from your brain and they are able to predict 10 years ahead of time whether you will develop Alzheimers or not. They have done retrospective studies by using MRI of people 15 years ago. They were able to establish that they could predict that a patient would develop Alzheimers with a 90% accuracy.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Julien Nguyen of IT Farm
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