AI Investor Forum: Gus Tai on AI in Healthcare (Part 8)

Sramana Mitra: What is going on in the thought process of the venture capital community vis-a-vis healthcare drug discovery and general AI in the healthcare and life sciences area? When the lean startup movement came about, SaaS was the dominant field in which VCs were investing for maybe even 15 years, the venture capital industry kind of settled into this model that you bootstrapped to some level of validation and then start raising money.

You could raise a huge amount of money. You could raise $100 million or $200 million of funding. But you starting after you have validated and gotten to a certain point of product-market fit.

Now, as we discussed in this segment, that is not as easy to achieve in AI in healthcare or life sciences.

So how is the VC community thinking about the issue of funding this genre of companies?

Gus Tai: My perspective is that they’re thinking about it in the same way they always have. If you view venture as an industry, it is a financial industry. Its sweet spot has been in funding companies that provide services to enterprise businesses – whether it was a licensed software model in the past, or it’s the SaaS model, or some agent model going forward.

Sramana Mitra: Atomwise is an AI platform selling to the pharmaceutical companies. Veeva is a software service company selling to pharmaceuticals.

Gus Tai: Yeah. Then there are boom-bust cycles around aggressiveness to try new approaches within healthcare. But those are smaller bubbles than the SaaS wave.

Right now, healthcare from my perspective is not as robust as it was several years ago. It’s not going away, but there isn’t a lot of experimentation. Therefore, there would be folks who want to see more evidence.

However, AI is so disruptive. Once there’re a couple companies that spot a trend for how to unlock value, then I think a lot of funding would be available there. So, the spotting the trend can really arise through bootstrapped MVP experimentation. So, I think that it’s a great place to be if you can get by with a lot of experimentation. Here’s a new capability that can transform, at least in the US, a balkanized industry that has a lot of inefficiency and a lot of discomfort with how it’s designed.

So, if there’s a way to unlock that, people will throw money at it to try to manifest success.

Sramana Mitra: Great. Okay. Well, that was fabulous. Next year, we will continue and pick up more topics and do more of these brainstorms, because I think this is incredibly powerful for people who are listening to get an overview of an industry segment to see how you want to approach that segment, especially those who are early on in figuring out how to put one foot before the other.

Thank you, Gus. See you in 2025.

Gus Tai: Thank you again, Sramana. Very much enjoyed it.

This segment is part 8 in the series : AI Investor Forum: Gus Tai on AI in Healthcare
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