Daniel Lambert – Former CEO, PathologyWatch

Introduction to the Podcast (00:00:02)
Julian Castelli welcomes listeners and introduces the podcast’s focus on leadership in technology companies.

Community of Tech Founders (00:00:29)
Julian discusses Growth Elevated, a community for tech founders, and mentions the annual tech summit in Utah.

Introducing Dan Lambert (00:01:16)
Julian introduces Dan Lambert, highlighting his entrepreneurial background and his current work with Pathology Watch.

Dan’s Founding Journey (00:02:15)
Dan shares his experiences leading up to his current venture, emphasizing the challenges and learning from past startups.

First Startup: Grocery Couponing (00:02:33)
Dan describes his first company that enabled digital coupons in grocery stores, replacing outdated systems.

Second Startup: Medical Education (00:04:05)
Dan discusses his second venture, Board Vitals, which focused on providing medical education and compliance resources.

Transition to Healthcare Technology (00:05:09)
Dan explains how his experiences led to the founding of Pathology Watch, aiming to modernize pathology processes.

Background in Medical Sciences (00:05:37)
Dan reflects on his initial interest in medicine and how he transitioned to engineering and technology.

MBA Experience (00:06:52)
Dan shares insights from his MBA program, emphasizing the value of diverse perspectives in business.

Identifying the Cancer Challenge (00:08:24)
Dan discusses the decision to tackle cancer, noting the advancements in radiology compared to pathology.

Building a Comprehensive Solution (00:09:02)
Dan explains the need for a complete solution in pathology, integrating software with laboratory processes.

Understanding Pathology Watch’s Customers (00:11:04)
Dan clarifies who their customers are and the outdated processes they are replacing in pathology.

Old Pathology Process (00:12:03)
Dan describes the traditional manual process of analyzing biopsies and how it is inefficient.

Pathology Watch’s Digital Solution (00:12:51)
Dan outlines how Pathology Watch digitizes slides and integrates with dermatologists’ systems for better efficiency.

Benefits of Digital Pathology (00:14:38)
Dan highlights the advantages of digital pathology, including improved communication and patient care.

Impact on Healthcare Costs (00:16:26)
Dan discusses how their technology aims to reduce healthcare costs while improving cancer detection and treatment.

Company Launch and Growth Timeline (00:17:33)
Discussion on the timeline of Dan Lambert’s company from inception to acquisition.

Finding Co-Founders (00:17:44)
Dan shares how he found his co-founders and their complementary skills.

Anticipating Regulatory Changes (00:18:28)
Importance of building a business with expected regulatory shifts in digital pathology.

Client Engagement Strategy (00:19:12)
The significance of consulting dermatologists before product development.

Acquisition and Growth Metrics (00:21:17)
Details on company growth, revenue, and the decision to sell or raise funds.

Acquisition by Sonic Healthcare (00:22:14)
Insights on the acquisition by Sonic Healthcare and its strategic advantages.

Industry Adoption of Digital Pathology (00:23:10)
Discussion on the rapid adoption of digital pathology as a standard of care.

Regulatory Challenges in Health Tech (00:24:50)
Challenges faced with compliance to various health regulations during startup.

Staying Informed on Regulations (00:26:36)
Methods for startups to keep up with complex health regulations.

Leadership Lessons from Experience (00:28:19)
Dan shares key leadership lessons learned throughout his entrepreneurial journey.

Importance of Hiring the Right People (00:29:31)
Focus on recruiting top talent and maintaining cash flow as a CEO.

Navigating Challenges as a CEO (00:30:05)
Insights on recognizing when to delegate and not micromanage.

Learning from Feedback (00:31:12)
The value of early client feedback and how it shapes product development.

Personal Impact of the Technology (00:32:13)
Dan shares a personal story of how the technology saved his life.

Recommendations for Entrepreneurs (00:33:43)
Dan discusses his involvement in venture capital and suggests resources for entrepreneurs.

Favorite Startup Book (00:34:01)
Dan shares his favorite startup book, discussing its insights on the challenges of entrepreneurship.

Struggles of Startups (00:34:16)
The conversation highlights the harsh reality that many startups fail and the importance of perseverance.

Encapsulating the Struggle (00:34:42)
Dan and Julian reflect on how the book helps others understand and navigate their struggles.

Gratitude and Experience (00:34:51)
Dan expresses his appreciation for the podcast experience and the insights shared.

Lessons for Listeners (00:34:55)
Julian acknowledges the valuable lessons Dan has provided for the audience.

Closing Remarks (00:35:02)
Dan thanks the hosts, wishing them well as the episode concludes.

Podcast Outro (00:35:08)
Julian invites listeners to subscribe and explore more resources for leadership development.

Speaker 1 00:00:02 Welcome to the Growth Elevated Leadership podcast with Julian Castelli. Each week, we talk with senior tech leaders to explore stories and insights about the challenges involved with growing technology companies. We hope that these stories can help you become a better leader and help you navigate your own growth journey.

Speaker 2 00:00:29 Good morning. I am Julian Castelli. I’m the host of the Growth Elevated Leadership podcast, where each week I talk with inspirational entrepreneurs and leaders in the tech industry. Past guests on this podcast have included CEOs and CXOs of great companies like Work Front, CHG, Healthcare Systems, and Moment Retail. Me not the San Francisco 40 Niners and many more. This episode is brought to you by Growth Elevated. Growth elevated is a community of tech founders, CEOs, and CXOs who are committed to working together to share best practices and learnings in an effort to help all of us become better leaders. We do this through educational programs like this podcast, as well as our blog and of course, our annual Tech Summit, which just so happens to be at the base of beautiful, beautiful Alta mountain in Utah this year.

Speaker 2 00:01:16 So if you enjoy skiing and talking tech, check out the Growth Elevated Tech Summit. If you’d like to learn more about how to participate in this community, check out. Check us out at Growth elevated.com. Today, I’m super excited to welcome Dan Lambert to the program. We’re going to talk to him about his latest successful company Pathology Watch. But Dan is a multi-time founder. He’s founded two companies, both of which became Inc 500 award winners. And his current company is actually using AI to battle cancer. Talk about a big a big problem to tackle. His business was recently acquired. and, and, you know, we’re to hear his founders journey about that. Dan is a computer engineer by training, also a graduate of the Harvard Business School. And he resides in Salt Lake City, Utah. Welcome to the program, Dan. Thanks for having me. Hey. It’s great. Great to chat with you. And I can’t wait to to hear about. Congratulations on about pathology. Watch your recent sale.

Speaker 2 00:02:14 That’s pretty exciting. But I want to go back to the beginning of the story, because it’s sometimes it looks easy when you just hear the headlines like, oh, so-and-so just sold the business, and and isn’t that great? And I, I want to just do that. But I’d love to hear your, your, your complete founding story about like, how how did you build up to that point?

Speaker 3 00:02:33 Yeah, absolutely. So thanks for having me on. This is this was my third venture backed startup. And you learn a lot of different things running these running these companies along the way. My first company was actually not in healthcare. It was a grocery, grocery couponing company. So we built the infrastructure way back when to enable digital coupons inside of the inside of the grocery store. So a person would come into the into the grocery store, they’d see a product like peanut butter. We’d find coupons, digital coupons for peanut butter, jelly bread. Anything related to what they were looking at? You’d hit redeem on your phone and the coupon would go directly onto the store loyalty card.

Speaker 3 00:03:11 On the back end, we were replacing a lot of these, a lot of these old systems for tracking coupons. The the industry was was, you know, felt like 50 years behind where the coupons were having to go to counting warehouses in Mexico and then paper checks between the.

Speaker 2 00:03:27 Oh my goodness.

Speaker 3 00:03:28 The manufacturer and the and the grocery store. So we really fixed that layer and we grew very quickly. We got into 8000 grocery stores pretty quickly. Eventually the grocery stores kind of wanted to control the experience in the store. And so we sold the we sold the business called Pushpins. We sold that to Rakuten because the grocery stores couldn’t kick out a bigger, a bigger company. But kind of, you know, that kind of said those kinds of things happen sometimes in venture backed companies where you get, you know, fast growth, but you don’t know where it’s going to land, and I think everyone was happy with it. At least a, you know, at least a modest first exit. The second, second company that I ran was a company called Board Vitals.

Speaker 3 00:04:05 It was medical education specifically for doctors, nurses, continuing medical education credits, compliance board prep. We brought together all the very best medical sources in the industry into a single source, and that that source became kind of a living document where doctors that were preparing could update us on guidelines or leave notes in the content or make continual changes. And so we ended up covering the vast majority of the medical specialties. It’s one of the most used medical question banks in the world. Now. We grew it to about 20,000,000in revenue. and then sold it to Blackstone owned portfolio company. And they were they were wrapping up a bunch of smaller companies and then preparing to take the bundle private. So I think they did very well. We did very well. Our our investors were really happy on that. And in the process of running that company, that’s actually when I ran across the the concept of building pathology watch, which is replacing a very old. A very old industry that’s mostly fax machines and microscopes with digital processes, web based software using algorithms, etc..

Speaker 3 00:05:06 That’s the that’s the that’s the back story. I’m like you mentioned, I’m a computer engineer, so I just I wake up and love solving technical problems.

Speaker 2 00:05:15 Yeah. So so you started in retail and then you kind of moved over into the medical world and, and, you know, that that clearly has really big problems to solve and, and, really great, great return when you can apply technology. Did you have a medical sciences background before or just you saw the opportunity and applied your problem solving to it?

Speaker 3 00:05:37 Yeah. So that’s a good question. I when I started, when I started my undergrad, I was fully expecting to go into the into the pre-med route. My father’s a cardiologist. He was he was also fully expecting me to go into the into the medical route. But I, I started taking engineering classes and just fell in love. you know, I think my first class was design. You have to design a vending machine from scratch without using much in the way of electronics, so that you kind of learn how to do, you know, you learn how to do state machines, basic components.

Speaker 3 00:06:07 and I just, you know, I stayed up until 3 or 4 a.m. trying to build, you know, trying to, like, build a vending machine. Now, that and I realized after that, this is this is what I was born to do. Like this kind of thinking and problem solving. I just absolutely love it. but, you know, my whole family’s in medicine. So when I was ready to come back, you know, to help out. To help out on the healthcare side, you know, I had some early science classes, I had some background. I talked to a bunch of practicing physicians to get a sense of what the industry needed, and decided to build this. And healthtech health tech legitimately is five times harder than than any other business that I’ve run, but also very rewarding personally as well.

Speaker 2 00:06:49 That’s awesome. And we’re we’re on the journey to the NBA. Come in?

Speaker 3 00:06:52 That was like right before I started my first my first venture back startup. So I started the I started my first venture.

Speaker 3 00:06:59 Kind of the summer after first year of first year of business school. Business school. Two years. First year is required. Courses, second year as electives. so I was trying to trying to run a venture back company at the same time while finishing up the elective courses that second year, which I wouldn’t necessarily recommend.

Speaker 2 00:07:16 But yeah, you know, that’s got to be a big load for sure.

Speaker 3 00:07:20 Yeah, yeah, I had a great experience with my MBA. I think the, the biggest value of, of an MBA is that you’re if you’re in a classroom with a bunch of smart people and they’re all seeing the world through a very different lens based on their background of, you know, marketing or sales or engineering or management consulting, and you just kind of learn to think or absorb the, you know, the thoughts of how they see the world. And you just don’t get a lot of experiences like that in life where you you end up being able to see the world from many different perspectives.

Speaker 2 00:07:53 Yeah, I agree, I really enjoyed that and still have great relationships with with my classmates from that. Okay, so so you had some entrepreneurial experience. You’ve got your MBA, you’ve gotten, an exposure to the whole medical world through through, the, the board vitals company. Now, you’re you’re going to attack the maybe the biggest challenge that that, our medical world has cancer. Right. So how did how did you, how did you come up with the idea of attacking cancer? And, how did that lead to pathology? Watch.

Speaker 3 00:08:24 Yeah, absolutely. So we saw that, radiology is usually about ten years ahead of pathology and on a number of dimensions. And, and we saw that radiology was, was very quickly going towards, you know, both digital and AI as an a as an assistive tool. So, you know, a big portion of radiology is now done with, you know, some kind of algorithm assisting. and then you typically do have a, you know, final, a final human review.

Speaker 3 00:08:53 and, but in pathology, that was, when we started this company seven years ago, you know, there was not very much of that going on, but it made a lot of sense. you know, AI is, AI is very good when there’s no patient interaction. Pathology is one of those areas where, you know, it can it can work in isolation, in conjunction with a lab. And then the the it’s not trying to replace a human component. So we thought that this was one of the first areas of medicine, to adopt AI and adopt AI quickly. And it turned out that, that, it turned out that that bet was right over the last five years or so. a lot of companies have been going digital and replacing a lot of the kind of old infrastructure of how things, how things used to be operated.

Speaker 2 00:09:39 Sounds like you have to provide solutions, not tools. Is that. Yeah.

Speaker 3 00:09:42 That’s a great way to summarize it. you know, and and we also had to integrate with all of the, all of the EMRs and the insurance companies.

Speaker 3 00:09:51 and and also like we’re dealing with something that is biological. And so there is a lot of there’s a lot of variability that gets introduced. And so you have to build controls all along the way to make sure that you’re not getting a, you know, a blurry slide or artifacts or problems. And so owning, you know, owning everything from end to end, like building a true solution for the industry is what made us successful. Companies that built the that built the solution succeeded. Companies that just built an isolated algorithm didn’t make it. for the most part, I think that’s a good kind of general rule of thumb, but it did mean that we ended up as a tech enabled services company. you know, and not every not every venture fund, really wants to support that. So I think it may it made fundraising harder even though it was the right call.

Speaker 2 00:10:37 Yeah. That that’s a key theme that, that I see quite often that, you know, you really need to get them to the outcome, not just provide the shiny new tool.

Speaker 2 00:10:45 But let’s back up a little bit for our listeners, because I’m not sure they understand exactly. You know, when you’re who are your customers and exactly what are you doing for them? And what’s the old process that you’re replacing with a new. And let’s let’s go back to basics, because obviously you know the business so well, but our listeners may not picture exactly what you’re solving.

Speaker 3 00:11:01 Yeah, that’s a great, great point. We’ll take a step back. So if someone has a spot on their skin, you know, they’ll go into the local dermatologist and they’ll get a biopsy done. And that that biopsy could go to, you know, a major lab like Quest or Sonic Healthcare, or it could go to a smaller regional lab or maybe even sometimes a hospital. And the way that it used to be done is that a the lab would turn that biopsy into a slide. The pathologist would look at the slide, you know, kind of type up some notes and then fax a report about what that cancer was to the, you know, back to the office that requested the.

Speaker 2 00:11:37 And they would look at the slide under a microscope.

Speaker 3 00:11:39 Yeah. They look at the slide under the microscope. Some you know, some can even, you know, hold it up to the light. But the it’s it’s like a really just kind of manual process of inspecting it and looking for, looking for a cancer and, you know, pathologist trained for 10 to 12 years, typically to, be able to identify what the cancers are. if there is an underlying condition, it’s not just cancer. There could be other, you know, other things going inside the body that the biopsy is showing. And so there are, you know, 50 plus, conditions that a, that a pathologist will typically look for in a slide.

Speaker 2 00:12:14 But this is an analog process. It’s not digital. This is, grabbing a slide, walking it over to a microscope, looking at it, taking notes and sending those notes to people. That’s the analog process that we’re. Yeah, that’s the.

Speaker 3 00:12:25 That’s the old world.

Speaker 3 00:12:26 And so what we came in and did is that we we went to the dermatologist and said, look, we have a new solution for doing this. It’s going to be all digital. You’re going to be able to you’re going to be able to see the slide digitally, where you’re going to have reports that are integrated with your systems and they’re like, oh, we’ve been waiting for this for years. So fortunately, we I think the market was very it was very ready. So. So in our world the, the the biopsy still comes to our lab. We do the processing, we still turn it into a slide. But using using the right controls built in the slide is the slide is digitized. So then it becomes available to, you know, both the pathologist and the dermatologists, depending on the you know, depending on the case, you can, you know, you can run certain algorithms. And then also of kind of glimpsing into the future, these these algorithms are very good, you know, not only at looking at what the case is, but then also predicting the, the, you know, the future or the trajectory, you know, potentially whatever that cancer or course is.

Speaker 3 00:13:27 And this is still, you know, research based or still experimental. You know, we have papers that that cover this, but it not only improves the existing process and takes something that’s very analog and makes it digital, it also gives a window into, you know, into the future of care and what pathology should really be. And then we, we send those results also back into the dermatologist electronic medical record system. So it’s much easier to keep records synchronize. We maintain patient histories. you know, that that continuity of information is actually a very important aspect of what we introduced by actually going digital. So some of the benefits that we sell to dermatologists, you can show the patient the case for the first time, you know, kind of like an x ray. You’re now showing the patient the pathology. And it’s like, okay, this is why we’re doing surgery or this is why we’re doing this treatment. The the office dermatologist offices are way more coordinated, significant reduction in time in dealing with the pathology.

Speaker 3 00:14:24 And we’ve we’ve grown very quickly in just the last few years. We’ve we have now several hundred dermatology clinics across the country sending us volume. If you’re a patient in Utah, your cases are most likely going through one of our labs here locally. And we we take great care to make sure that, you know, everything is done. Everything is done correctly. The benefit of something like this also is that you can get a consult. So if there’s a tough case, if there’s a tough melanoma, it’s very easy to share your cases with someone at a top tier academic center. So this whole we really built the plumbing for kind of the next generation of pathology.

Speaker 2 00:14:59 That makes a ton of sense. I mean, all the all the benefits, benefits of digital one to many, everyone can look at it. You can have the AI look at it, but you can also have everyone else look at it. And and I’m still amazed when I, when I go to a doctor and there’s a process that’s not digitized like this.

Speaker 2 00:15:14 And they say literally they’re going to send their records to so-and-so. I’m like manually really?

Speaker 3 00:15:18 Yeah. And actually, I think you’d be surprised, like probably, you know, about 40, 50% of offices that we run into, they’re still, you know, it’s almost like carrier pigeon over to the next office.

Speaker 2 00:15:29 Exactly.

Speaker 3 00:15:29 It’s the records aren’t synchronized.

Speaker 2 00:15:31 Baffles my mind. So. So I guess that’s just the world. That’s the way it has been. And one by one, entrepreneurs like you are going to to show them the path on how to digitize and create great benefit, which is terrific because obviously we, you know, the health care system is so expensive, partially because of the lack of that. So so not only are you helping to detect and fight cancer, but you’re also helping to to reduce reduce cost and make make these these treatments more affordable.

Speaker 3 00:15:57 Yeah. And that’s a that’s a actually our mission statement, you know, is to improve the quality of care and extend life while reducing the cost of health care.

Speaker 3 00:16:05 And sometimes it just feels like especially with politics or whatever, you’re kind of just shifting the, the seats on the, on the deck of the Titanic. Right. Whereas in order to solve the problem, you have to really actually develop technology that can that can make things more cost effective. and the, you know, and the beauty of technology like this is that in the long run, if you’re if you’re able to call more accurately what the cancer is and then also predict exactly the right course of treatment, you save tons of unnecessary chemotherapy, radiation, additional biopsies you can avert a lot of, you know, unnecessary trauma to the patient because in general, cancer gets over treated. Doctors are being more conservative, save the patient. But that that sometimes can mean, you know, actually more harm to the patient than is than is necessary. So trying to hone in on exactly what the the patient needs is kind of I think that’s what the next five, ten years of medicine look like.

Speaker 2 00:17:01 Well, back back to back to the Tom class.

Speaker 2 00:17:03 Right. If you can solve the problem at the beginning of the assembly line versus the end. Yeah, a lot, a lot. The maximum point of efficiency, right?

Speaker 3 00:17:11 Absolutely.

Speaker 2 00:17:12 Well, awesome. Hey, just just so we understand, like, when did you start the company and I assume you started from zero was was zero employees. And, you know, give us the let’s bracket it. When did you start and when did you end and how far do you grow it before you sold it.

Speaker 3 00:17:23 Yeah. So we we started the company in 2017. and it was just, you know, just myself and two co-founders, one co-founder, focus on sales, strong sales background, the other co-founder focused on the dramatic pathology aspects. It really helped to have a really help to have a co-founder that already lived, in this world full time was already seeing patients, already had a large history of cases that we could use to, actually start working on training, you know, I modules. so we weren’t starting from scratch, which is kind of nice to get to get a jump start.

Speaker 2 00:18:03 How did you find that co-founder? Did you have the idea first and then find the co-founder?

Speaker 3 00:18:07 Yeah. You know, so I had worked with I had worked with this co-founder in at board vitals. He had he had written some content for us. So I knew that he was already very good. And we had just kind of kicked the idea around of like, oh yeah. And at the time we said, oh yeah, in ten years, like a lot of a lot of pathology will be, you know, managed with AI etc.. I think there was a general consensus that that would be the future state. We just didn’t know exactly when and how it would come about. but this is this is also an important aspect which is, you know, always build. I always build a business when you’re expecting a regulatory change. And that was really the case here. you know, digital pathology was not allowed when we started. but we anticipated that those rules and restrictions would be reduced. and then actually towards the end of the company, then actually the government started paying as well as private payers started actually paying for digital pathology, started paying for some of the work that’s done.

Speaker 3 00:19:01 And you had a rapid transition and actually regulatory move pretty quickly over the last seven, eight years to try to keep up with what everybody, with what everybody was doing. So to get back to the to the timeline before we built anything and we made sure that we talked to at least, you know, 10 or 15 dermatologists to understand their, to understand their pain points. Before we before we jumped in and I I’d strongly recommend that to any entrepreneur. It’s very easy to start building, you know, much harder to get in front of clients and ask them specifically, what would you need in order to buy this product? And so we landed our first our very first client. In 2018, we bought a small lab. Yeah. This is a this is a lab that just had very little equipment, but it was enough to start processing some samples so that we could learn, and then buy in the process of buying the lab. That’s when we started really developing the software to manage or to optimize the processes that exist.

Speaker 3 00:19:55 you know, that exists inside of the, the laboratory. and then from there we started developing the digital viewer, etc. we had to build a lot of different pieces to bring this all together. But that that building process took from 2008, you know, 2018 to about 2022. at that time, we’re scaling up, you know, winning, winning clients. It helps to be sometimes first mover. you know, we were able to get a lot of meetings with dermatologists because they were interested in hearing about the new technology. and then, we grew to about, you know, by the time we were ready for sale, We were at about 120 people. We were doing, you know, roughly 15 million in revenue. and then we had a choice of whether we were going to raise series C or go for an acquisition. We we sat down really hard because the price point on series C was kind of similar to the acquisition price point. But at the end of the day, we wanted to impact as many patients as possible.

Speaker 3 00:20:57 And if you if you join a really large lab where you can just drive technology throughout the throughout this large company, you can make a huge difference to a lot of patients. And that’s why we started the business anyways. You know impact as many patients as we can. And so we were acquired by Sonic Healthcare in 2020 for roughly a, you know, roughly 150 million. And we have just been since then. And just even in the last year, we have we’ve pushed into eight additional laboratories, you know, inside of Sonic Healthcare, we’re starting to see way more adoption of digital in healthcare. It’s funny because it’s like nobody adopts it, nobody adopts it. And now digital pathology is kind of now standard of care or rapidly getting there. I think everybody now just kind of expects it to be that way, especially if you’re a forward thinking clinic.

Speaker 2 00:21:43 So basically, Sonic Healthcare was was a way to get distribution into the industry most rapidly. Right? Because they they have a bunch of these, these labs and they’re a big player.

Speaker 3 00:21:54 Yeah. Sonic healthcare is I’m yeah, they’re they’re roughly a $15 billion company headquartered in Australia. traded on the Australian Stock Exchange. They, they see a lot of dermatology volume, but it’s because they’re in Australia. you know, they are the. They’re kind of the lab, right? Yeah.

Speaker 2 00:22:12 They’ve got the skin cancer issue.

Speaker 3 00:22:13 Yeah.

Speaker 2 00:22:14 And it’s really.

Speaker 3 00:22:15 Yeah. And it’s it’s a very different culture there too. I mean, their, their public service announcements are all about, you know, sunblock and hats and it’s, it’s kind of different than here in the, here in the US. But. Right. There’s a reason it’s a very, you know, very fair skinned population with a lot of, you know, with a lot of skin cancer. And also the you know, but Sonic also has a big presence inside the, you know, inside the US, very, very successful. It’s the third largest lab company in the world. and they were most interested in us because we focused on, skin cancer and that, you know, that’s their focus as well.

Speaker 3 00:22:49 Kind of an interesting end to the an interesting end to the story, kind of, you know, last year, quest, LabCorp, Sonic, they all decided to acquire, you know, a digital pathology company or heavily invest in one. and so there, there became this pairing off very quickly where they just said, okay, this is a new standard. We now have to, you know, each of the major labs partnered up with a startup to kind of take the company digital and digital.

Speaker 2 00:23:15 Terrific. Well, what a great what a great, a great story. And, you know, they don’t always work that smoothly, but that, that that was fantastic.

Speaker 3 00:23:22 Yeah. And it was a fast, you know, it was a it was a fast acquisition. At the end of the day, you know, most, most startups have to run for a lot longer, but.

Speaker 2 00:23:29 4 or 5 years. How long was it?

Speaker 3 00:23:31 This was, just under six years before, you know, before acquisition.

Speaker 3 00:23:38 And now it’s been seven. And I think sometimes people in health tech, people tend to overestimate what happens in three years and underestimate what happens in ten years. And if I look back over the last, you know, seven years, that’s really true. You know, we’re kind of everybody had such high hopes for AI in the early days. But it really does take it takes, you know, ten plus years sometimes for these very old line industries to transform. And a lot of pieces just had to had to get built.

Speaker 2 00:24:05 Well, congratulations. That’s a fantastic story. yeah. Thank you. Really, really exciting. hey, if you look back, what do you think? What were some of the biggest challenges you had to overcome, on that journey? Because obviously, you know, the the book ends. It sounds like it was just a, a clean ship up to the, rocket ship up to the right. And in many ways, it was. But I’m sure you had some challenges.

Speaker 2 00:24:28 What were What were some of the bigger ones you had to deal with?

Speaker 3 00:24:30 Yeah, absolutely. I think that actually regulatory in the US was was very hard. There are kind of a number of, of regulations that you have to be aware of and also, you know, new, new pending regulations that come out in certain states. It’s very hard for a company to keep track of, okay, what is what is California going to do? What is California going to do next? yeah, there could be some new laws. We just weren’t aware of it. But all of a sudden we’re not in compliance because this, this new broad law was passed that we didn’t know. And so as a health tech startup, you’re dealing with, like the Sunshine Act. And, we dealt with Clea and the FDA, as well as, you know, interstate commerce rules, specific, you know, anti kickback laws, stark laws. It’s kind of it’s this framework of, you know, like 11 or 12 different regulations that weren’t even necessarily targeted at pathology, but you, you end up needing to be compliant with all of these.

Speaker 3 00:25:29 And so, you know, probably a good 30% of our time and resources was spent on how do we, you know, how do we be compliant or how do we, you know, navigate this very, you know, this very tricky and complex environment. And anyone that’s thinking about going into health tech, I would suggest like make sure you really understand the, you know, the regulatory environment before and before making the leap because it’s a it’s a real challenge. And, and you’re ultimately responsible for being compliant with all of those, with all of those laws.

Speaker 2 00:25:58 Yeah. How do you do that as a startup? I, I work with a company that that helps the big pharma companies with, with this and they’ve, they’ve got departments of hundreds and thousands of people because it’s so complex as you’re a little startup, how do you stay abreast of all these regulations. Is there.

Speaker 3 00:26:11 Yeah.

Speaker 2 00:26:12 You can subscribe to or like you have to basically. Yeah actually.

Speaker 3 00:26:16 So in in pathology there’s a, you know, there’s a really good group that they’re kind of like almost like the beat reporter for pathology.

Speaker 3 00:26:23 It’s called the it’s called The Dark Report. And so you start with a and it comes from like the room is dark when pathologists are sometimes looking at cases. So it’s it kind of covers like it has kind of like the industry newsletter and like here’s what’s developing. Here are the key players. Here’s the you know, here are the you know, the recent lawsuits. So you kind of learn by other companies getting dinged. you know what what.

Speaker 2 00:26:45 Someone was there compiling that. So you were able to actually, you know, follow it fairly.

Speaker 3 00:26:50 Yeah. Yeah. And and just I went back and just read a, you know, read the entire like last year, end to end of every, you know, every copy of every compiled report. And a lot of, you know, a lot of health tech specializations have this kind of thing. You know, also we we found an we found two attorneys that had dealt with these specific kinds of issues before to help us navigate and then and also just inform us on like, hey, this you know, this particular regulation gets enforced really heavily.

Speaker 3 00:27:16 And this other regulation we never see enforced. and so getting a, you know, getting a mental view of spending, you know, and it’s an investment you have to really spend a decent amount of time and effort in paying the attorney. And these are these are highly, highly specialized attorneys that are very expensive. That information upfront is, you know, is extremely valuable and very, very important. I think just, you know, right out of the gate to spend that money and know what you’re getting into.

Speaker 2 00:27:42 Got it. Well, look for other people listening that they, they, they they may want to I’m sure they all we all aspire to, to have such a, such a great run. What do you know now that that makes you a better leader after this experience that, you know, you might not have known when you were getting into it? What’s gotten the lessons from the journey? Can you share?

Speaker 3 00:27:59 Yeah. so for me, just keep coming back to focusing on what is a good what does a good CEO do? number one is, make sure you find the right people.

Speaker 3 00:28:11 you just you’re not going to be able to build in a, in a, you know, in a big company, you can’t do everything yourself. You’re going to have to hire people that are better than you for 20 different things. That’s just a reality. Number two is, make sure you don’t run out of cash like the CEO has to keep an eyeball on the, you know, on the, on the cash flow. And then three is spend time setting strategy and then overcommunicate that strategy. So sometimes you might think you have a clear strategy in your head, and somebody that’s working in the lab might not know it. And so getting, you know, getting those, those monthly town halls, getting in front of everyone, making sure that even though it’s repetitive, that you’re that everyone that you can ask almost anyone in the company and they know what your strategy is and that it’s very clear to everyone where you’re headed. I like just focus on those three things over and over and over again.

Speaker 3 00:28:58 And if you’re if you’re finding yourself in other minutia, that’s like not important. You know, figure out how to get rid of that and get back to the to the three focus items. And I’ve made that mistake over my career. I think the other the other mistake that I’ve made sometimes is like plugging a is trying to like plugging a hole, you know, going and being like, oh, we just need this marketing person or whatever. And instead taking a step back and saying, actually, we should find the leader first and then the leader will have the right Rolodex to build out the, you know, the marketing and sales team. And that’s a that’s a luxury of having, you know, enough funding to be able to do that. But every time I’ve done that and found the right leader, you know, then I don’t have to pay as much attention to all of the details of filling out that team. I’d strongly recommend that. And then also just, you know, be willing to actually pay for the for the top talent that knows exactly what to do.

Speaker 2 00:29:45 So that last point, let me let me double click on that. So are you saying that if you find that you’re trying to fix the problem yourself, that maybe it’s a sign that you know you don’t have the right leader?

Speaker 3 00:29:57 Yeah, I think that’s true. If you’re if I’m.

Speaker 2 00:29:58 Having the details of the weeds. Yeah.

Speaker 3 00:30:01 Especially as a company grows, if I’m having to reach down way into the, you know, way into the weeds and trying to solve a, you know, specific problem lower in the organization. I’ve made a I’ve made a failure in choosing the right leader because the right leader, that that problem wouldn’t have bubbled up or set another way at a certain point. By the time that you’re at. You know, by the time you get to series B, only the most complicated problems and the really hard problems should be coming across your desk. If you’re dealing with minutia that somebody else should have handled. I think you’ve done something wrong structurally along the way.

Speaker 2 00:30:33 That’s a great that’s a great signal to look for.

Speaker 2 00:30:36 And maybe, maybe you got the wrong team. If you’re if you’re having to dive in and solve these these detailed problems. Terrific. Well, that those those are some great lessons. Anything you would do differently if you could look back and say, I wish I’d done had a chance to to re relive one of these experiences. You had the Wayback Machine.

Speaker 3 00:30:52 You know, actually, I wouldn’t change much. I think I think the reality is that until you everybody has a plan, until you get punched in the face and the goal, I think the goal is just to get punched in the face sooner. You know, the sooner that you can get the product in front of the client and they can tell you everything you did wrong, like that is a that’s a I mean, you have to treat that as like a gift. I think, you know, and someone that’s actually willing to tell you why they didn’t buy your product or why they left. that is that’s the opportunity. I mean, that’s that’s where you sit down and like, appreciate every moment of that, even though it stings.

Speaker 3 00:31:23 You have to kind of set that aside and just listen. And so if any, I mean, maybe the one thing is I would just get in front of clients as soon as you can, even even sooner than we did. you know, across my different companies. And the sooner you do that, the better the company is going to be.

Speaker 2 00:31:37 I like that. That makes a ton of sense. Yeah. Feedback is a gift, even if it is a punch in the face.

Speaker 3 00:31:43 Yeah. Even if it’s a punch in the face, take it. you know, take it and learn from it.

Speaker 2 00:31:47 Well, that’s that’s fantastic. and and you’re you’re with the company now. You’re with Sonic. Still. Still running pathology.

Speaker 3 00:31:53 Yeah. Sonic’s a great company. It’s really exciting to see. Really exciting to see this technology that you built. you know, scale up across, scale up across countries and across the US. because, you know, we need to devote seven years of your life to, you know, 9000 hour workweeks.

Speaker 3 00:32:11 you really want it to succeed. And it’s not just, you know, it’s. You want that spread as far as you can. And I think we really found the right company to do that. They’re pretty forward thinking. I think a lot of the organization was ready to accept this change, and I think that helps a lot. And for me, this is personal to, you know, our our system. Like I wasn’t expecting to be a patient, but our system caught caught my case of melanoma. I was able to have, you know, eight different dramatic pathologists look at it make make treatment recommendations. That’s the power of updating this. And so working on this company. yeah, I’m probably literally saving my life. I was I was in talking to a client and we just kind of got a biopsy on the side and it ended up being, you know, ended up going through our lab. We needed, you know, we needed volume. I was like, absolutely biopsy it. Let’s let’s run it through our laboratory.

Speaker 3 00:33:01 And the it turned out, you know, turned out to be melanoma. So it’s a it’s a very important service that we do. And also if you’re in Utah actually Utah does have a really high melanoma rate. So please go get checked. you know, every year, so that you don’t end up in a in a situation like I did where you, you know, you end up with a melanoma that’s growing quickly. so.

Speaker 2 00:33:23 That really brings it home. Absolutely. Well, hey, Dan. That’s fantastic. You’re a successful entrepreneur, and you’re also dabbling in venture capital. So you you help other entrepreneurs. Are there any any favorite books or podcasts that you, that you, you’re watching, you’re following or you’ve read that you might recommend to our audience?

Speaker 3 00:33:41 Yeah. actually, my favorite startup book is The Hard Thing About Hard Things by Ben Horowitz. So, you know, so many books out there, it’s just kind of these general platitudes. And, and the book really gets into, okay.

Speaker 3 00:33:53 This was a this was a hard thing. We didn’t have any, you know, we didn’t have any solutions. We didn’t have a silver bullet. So you fight with ten lead bullets instead. You know, just just trying to, like, make the company survive and how hard that is sometimes. Yes. you know, and and just a a book that covers the reality that 50, you know, 50% plus of startups are going to fail. You know, how do you try to avoid that if possible? And it’s just really blunt advice. And I like that a lot. And I use a lot of learning from that book all the time.

Speaker 2 00:34:22 I love that book. I bring out the struggle quite often when people are going through the struggle. It’s it’s such a great way to to encapsulate it. That’s one of my favorites too. Thank you.

Speaker 3 00:34:31 Yeah. Thank you. And thank you for having me on. And yeah, this was a this was a great experience.

Speaker 2 00:34:35 Well Dan we enjoyed it.

Speaker 2 00:34:36 I think a lot of great lessons for our listeners. And I look forward to watching your continued success. Thanks so much.

Speaker 3 00:34:42 Great. Thanks a lot. Have a good one.

Speaker 2 00:34:44 Thank you.

Speaker 1 00:34:48 Thank you for listening to the Growth Elevated Leadership podcast. If you enjoyed this episode, would you please follow us and subscribe on your favorite podcast player and we’d be grateful if you recommend it to a friend. If you’d like more resources on how to become a better leader in business, we invite you to visit us at Growth Elevated. Com. We’ll be back next week with more insight from another great tech leader. Thank you.