Spilling Tea with MATTER Health CEO Stephen Collens

What’s the tea on success for healthtech startups? In this episode, we talk to MATTER Health CEO Steven Collens about what startups and founders need to know in order to find footing in this challenging industry. Find out what makes the difference between an eventual industry leader and a cautionary tale.

Make sure you like and subscribe to "For Startups, By Physicians" wherever you get your podcasts. And keep up with us on LinkedIn, Twitter, and Medium at @InflectHealth, and on the web at InflectHealth.com.

Transcript

[00:00:00] Lindsay Kriger: Hey everyone. This is Lindsay Kriger, director at Inflect Health, the innovation hub of Vituity, where we strive to be a catalyst for better care. I'm thrilled to be hosting For Startups by Physicians where we share insights and guidance to healthcare startups and technologists looking to create the future of health.

[00:00:18] Lindsay Kriger: As a physician-founded firm, we have connections with clinicians and intimate knowledge of what they need and how. We will be interviewing our executives, frontline providers, and industry leaders to help your business be effective and scale. Thanks for joining and let's get going.

[00:00:43] Lindsay Kriger: On today's episode of For Startups by Physicians, we're extremely excited to have Stephen Collens, the CEO of MATTER, the healthcare technology incubator and innovation center based in Chicago. 

[00:00:57] Lindsay Kriger: MATTER opened in February 2015 and [00:01:00] nurtures entrepreneurs and innovators building NextGen Health, IT Medical device diagnostic and Biopharma Technologies. MATTER works with more than 200 healthcare technology ventures and the company partners with dozens of industry-leading companies, health systems, and universe. 

[00:01:18] Lindsay Kriger: For this session, we'll be spilling the tea on success and discussing things that no one wants to say to a startup. 

[00:01:25] Lindsay Kriger: Hello Stephen and welcome to the podcast. How are you today? 

[00:01:28] Stephen Collens: I'm great, Lindsay. Thanks for having me. 

[00:01:31] Lindsay Kriger: Thanks for being on and I know Chicago's got some good weather just like here in San Diego, so we're in good company together. 

[00:01:38] Stephen Collens: We have the best weather in the world in Chicago.

[00:01:40] Lindsay Kriger: That's right. That's right. I'm gonna dive right in and I would love to hear what your pitch is about what MATTER is and what MATTER does.

[00:01:51] Stephen Collens: So if you think about innovating in healthcare, it is particularly challenging and the things that can really increase your [00:02:00] odds of success are the people and knowledge and resources that can help you go faster and make the right decisions and essentially go in the right direction to build your business.

[00:02:12] Stephen Collens: We built MATTER on that thesis with a belief that collaboration is the best way to innovate in healthcare. Our mission is to accelerate the pace of change of healthcare, and there are two primary things that we do: one is we incubate startup companies. They're all over the world. They're every type of technology and at every stage of development. And we can chat more about all of that. And then the second core thing that we do is we work with established organizations. So health systems or life sciences companies or payers or technology companies that are interested in better-harnessing innovation to improve health or improve healthcare. And we help them innovate better.

[00:02:58] Stephen Collens: And by doing that, by working [00:03:00] across the whole ecosystem, we're engaging physicians and investors and entrepreneurs and executives from across the whole spectrum of the healthcare industry to really help everybody go faster, to accelerate change in healthcare. 

[00:03:16] Lindsay Kriger: Yeah, and that's one thing that Inflect does really have a unique position because as our parent organization, Vituity, we fall in that ladder bucket, right, of being an established organization. The physician partnership is 45 years of rich history, providing care in this country. But Inflect was really born and I love our partnership together because we are looking for those entrepreneurs and how to help them fit into that larger ecosystem. So I always feel lucky that I get both ends of the spectrum and it's exciting that MATTER really has a two-pronged approach, understanding that you need both to really innovate. And I think that makes it really unique. 

[00:03:55] Stephen Collens: Yeah, we've been very grateful for the partnership and the engagement in multiple different [00:04:00] levels, to help accelerate health. The resources that you bring and the network you bring and the people that you bring to the table are extraordinary.

[00:04:07] Stephen Collens: And then the capital is always of prime interest to entrepreneurs and to be able to do it and with the support in the context of such a large physician group is really extraordinary. 

[00:04:20] Lindsay Kriger: So tell me a little bit about how MATTER makes the biggest difference to founders. What's the biggest driver that founders are always so grateful to have when they start to engage with you?

[00:04:29] Stephen Collens: It depends on the stage of the company. So we work with companies that are very early, and those companies tend to be sponges for knowledge. They're trying to figure out how their product is going to fit into the market, how they're gonna go to market, how they're going to get somebody to pay for their product. There's a lot of those kind of early nuts and bolts. 

[00:04:53] Stephen Collens: So we see some of the earlier stage companies they're meeting with, in some cases, literally dozens [00:05:00] of our kind of mentors and advisors soaking up little bits of knowledge along the way. They're taking our classes and learning from our curriculum, a lot of the things that they haven't come to the table with that we can help increase their skills on, and then they're tapping into our network to really get advice and guidance about the direction that they should go. 

[00:05:24] Stephen Collens: Some of the later-stage companies, the founders may not be as interested in our classes or necessarily our mentors, but we have some incredible serial entrepreneurs that we work with that really dig in with founders and help them over many months-long period to help guide them.

[00:05:47] Stephen Collens: And it's a different kind of coaching and guidance that's available. and then they're tapping into our network. And so we have formal relationships with a dozen venture firms. We have informal relationships [00:06:00] with 150 or so others. We spend a lot of time helping companies raise capital. We have formal relationships with about 60 kind of established entities in the healthcare ecosystem.

[00:06:13] Stephen Collens: And then again, the informal relationships with many, dozens more, and we spend a lot of time helping founders connect with that network and whether it's to launch pilots or get traction in the market, they're really valuing the network that we have that we can help them go faster with. 

[00:06:33] Lindsay Kriger: It's always about who you know.

[00:06:35] Lindsay Kriger: Do you find that startups are coming to you that have had experience innovating in the healthcare space or a lot of them are sort of new and excited about entering a world that needs a lot of innovating. 

[00:06:50] Stephen Collens: Yes and yes. So when we designed MATTER, we really wanted to create a platform that could work with innovators at [00:07:00] every step along the way.

[00:07:03] Stephen Collens: We have and every kind of innovator. So we have people who come and they have spent decades in the healthcare industry. They're doctors or they're executives for larger healthcare companies, but they don't necessarily have the business understanding that we can help them provide, but they bring a deep expertise in reservoir in healthcare.

[00:07:29] Stephen Collens: We also work with founders who have almost no healthcare experience or no healthcare experience at all. And some of them have built companies in other spaces. Some of them, this is their first foray because they had some experience or some connection with healthcare and realize that there's a lot that can be improved.

[00:07:51] Stephen Collens: And those founders were often helping them understand the healthcare industry just as much as we are helping them understand how to [00:08:00] build a business. So it really spans the gamut and it was something that we, when we created MATTER in 2015, we really set out to create a platform that could work with.

[00:08:12] Stephen Collens: Any kind of a founder that is innovating to improve health, we will potentially be a resource for them. 

[00:08:24] Lindsay Kriger: Yeah the breadth is really fascinating. Do you guys ever get people that come to you, let's just say, from within the healthcare industry and say, "I think I have an idea. What should I do next?" What's your advice to people, right, that just are passionate but really don't know how to take the next step? 

[00:08:43] Stephen Collens: We do get that. Ideas, to be clear, aren't really worth very much. And there's, there's lots of ideas out there. There's very few kind of novel ideas. The value's usually in the execution. [00:09:00] And so what we usually will tell people who have ideas is go for it and start iterating.

[00:09:10] Stephen Collens: You can take a lot of our classes without being a formal member. You can show up. Events and you'll meet people and get in the flow. You'll learn, you'll hopefully be inspired and help create a direction. And then if you can build a an MVP and get something out there and start learning and start to get a little bit of attraction and decide that you actually wanna do this. Then there's a lot that we can do to formally help you move the business forward. 

[00:09:48] Stephen Collens: Generally, to be a member of MATTER, you need a company and you need a, you need to be at a certain stage. But we love to help foster and nurture and [00:10:00] inspire people who are passionate about improving healthcare, and we have a lot of resources that are available to them even before they get to become a member of MATTER.

[00:10:10] Lindsay Kriger: That's so great because there are so many, what I'll call frontline workers, doctors, nurses, social workers, registration techs — they probably have the most insights — that have an idea and wanna make it better. But the idea of being a founder and a startup company is really intimidating. Nobody thought that was the journey that they would take. So I love that you guys have resources for folks that just want to even explore this idea that they might have an idea right before they make a more formal entry into this new world, this venture world.

[00:10:41] Lindsay Kriger: Of the teams that you do see really take the leap and start a company, like what do you see as great teams? What do you think their foundation is? What do you really think of as a team that's gonna be successful? 

[00:10:57] Stephen Collens: If there was a crystal [00:11:00] clear formula, then life would be a lot easier and we could just double down on the companies that kind of have all the pieces that fit together. So it's a combination of an art and a science as to both building company and also taking a look at them and trying to understand which ones have the right set of ingredients.

[00:11:26] Stephen Collens: Talking specifically about the team, and it's one of the criteria that we use to evaluate companies that are interested in becoming part of MATTER, is do we think this team. has the potential to succeed and can we help this team? And if the answer's yes then, and there's a few other things, but if the answer is yes, and are they people we wanna work with, then they can come in And some knowledge of healthcare and understanding of how healthcare works [00:12:00] is absolutely critical.

[00:12:02] Stephen Collens: And that doesn't mean that if you're a founder, You wanna enter the healthcare space that you need to be the person who has that, but you need to, if you don't, you need to have those people around you. Healthcare doesn't function like other industries. It's confounding in a lot of unique and particular ways.

[00:12:24] Stephen Collens: And in order to build a successful company, you need to be able. Really understand that and understand where the pitfalls are and navigate through it. So that can be from co-founders, it can be from advisors, it can be from board members. It can come from a lot of different sources. You really can't build a company in healthcare if you don't have some of that expertise.

[00:12:47] Stephen Collens: There's a lot of things you can outsource, but you can't completely outsource that. 

[00:12:52] Lindsay Kriger: Just to dive in there, because we've seen time and a time again outside industry saying, "oh, we're [00:13:00] gonna disrupt. Oh, we're gonna innovate. Let's just do healthcare like Uber has. Or let's do healthcare like Amazon has," and we see their struggles, right?

[00:13:09] Lindsay Kriger: One thing that we think about a lot: What is the right combination of folks that are ready to disrupt and the balance of the legacy systems that seem almost impossible to penetrate through? Like how do you find a balance between those two concepts? Because as we know, if we continue to do the same thing over and over again in healthcare, we're never gonna get anywhere.

[00:13:36] Stephen Collens: That's like the 6 million dollar question of healthcare is how to do that because of all that legacy. 

[00:13:43] Lindsay Kriger: You have the answer. You have the answer then, yeah? 

[00:13:46] Stephen Collens: Yeah, exactly. So all that legacy stuff isn't going anywhere. And the notion that you're going to create a new model for healthcare, it's that it's not gonna happen, [00:14:00] but simultaneously.

[00:14:02] Stephen Collens: The healthcare system really doesn't work for anybody right now, and I don't want wanna sound totally hyperbolic, but it's not optimized for anyone, any of the actors in it. And so there is an incredible amount of opportunity to innovate. The key is to be able to innovate within the context of how the system works and to figure out how to integrate into workflows so that you're not asking people to do completely foreign or completely new things. And in order to do that, you need to have an understanding of and an ability to work with and navigate the existing systems and the legacies stuff and the processes even incredibly innovative.

[00:14:55] Stephen Collens: Healthcare companies that are using fantastic technology [00:15:00] will usually be making, in the grand scheme of things, incremental changes to how the overall healthcare whether it's delivery or other parts of it work. It's not a follow up, the existing and. with something new. Maybe that's the model over 50 years, but it's not the model over five or anything close to that.

[00:15:21] Lindsay Kriger: Yeah. One other thing I'm curious about that you might see in MATTER potentially is the idea that these incremental wins are being shared amongst startups that are trying to innovate in the same vertical within healthcare. 

[00:15:36] Lindsay Kriger: Do you see a lot of sharing of those incremental wins? And how do you think we get to a place where ultimately the competition between companies finds a balance of if we collaborate on these things, we could do bigger things together. Do you see any collaboration amongst those companies? 

[00:15:55] Stephen Collens: We see a lot. I don't wanna suggest that the companies we work with aren't [00:16:00] fiercely competitive because they are. Absolutely. And they wanna be successful, which obviously they do.

[00:16:08] Stephen Collens: There's just a deeply competitive element to them. That said, most of them aren't doing exactly the same thing and competing for exactly the same business with exactly the same customers. And there is an enormous amount of opportunity to share learnings and when somebody gets a win, as you said, to help others learn about how they did that, and that happens all the time.

[00:16:37] Stephen Collens: We also see companies that will work together. They'll pool their resources. They'll go in together on RFPs because they have complementary technologies, complementary solutions and capabilities, and they know that they'll be stronger if they're collaborating. And we've had some really interesting [00:17:00] successes with that.

[00:17:01] Lindsay Kriger: No, I love to hear that. I think that's fantastic and something that I know a lot of startups would be hesitant about early in their career and journey, but ultimately as we play for this bigger picture, I think that's really great. 

[00:17:16] Lindsay Kriger: As we conclude, I'd love to hear how MATTER defines success for these companies, and obviously there's things like capital and did you raise series A and B? But what else does MATTER look at for success, and how do you ensure your companies continue that hunger to be successful? 

[00:17:36] Stephen Collens: Ultimately, we're trying to accelerate the pace of change of healthcare. So we as an organization, we spend a lot of time trying to figure out what does that mean and how do we know if we've succeeded in accelerating the pace of change of healthcare.

[00:17:51] Stephen Collens: There are certain things that we measure along the way. Some of them you mentioned, are our companies raising money? Some of the data's [00:18:00] hard to line up, but are our companies raising money at a faster rate or a better clip than the rest of the industry? Yeah, it's hard to really pinpoint that, but we look at things and 40% of our companies raised some amount of money last year, and we're really proud of that, that we are able to work with companies, directly help some of them raise money indirectly, help lots of them raise money, help them advance their solutions. 

[00:18:26] Stephen Collens: We have this fundamental belief that collaboration is the best way to innovate in healthcare so we also try to measure collaborations. Our member companies collaborating with health systems. Are they collaborating with insurance companies or life sciences companies? Who are they collaborating with and are we able to foster and develop more of that? Are the big established organizations that we're partnering with, are they collaborating more with each other? Are they collaborating with entrepreneurs? [00:19:00] These are all things that we measure ultimately along the way. To what we're trying to play our piece of a role in helping to advance the state of the art of healthcare, which needs a lot of help and needs a lot of support from a lot of different kinds of organizations cuz it's big and messy and important and there's just so much opportunity to harness technology to make it better.

[00:19:32] Lindsay Kriger: I couldn't agree more. I love that. One of your key metrics is measuring collaboration. I'm super inspired. I wanna add that to something we measure at Inflect, because we all agree. And even again, bringing it back to the frontline providers, they need to collaborate with each other. They need to feel like they're on a team.

[00:19:50] Lindsay Kriger: They need to feel like they're all working together around a patient or a clinic or a community. I think that's spot on. Stephen, it was so wonderful having you today. Thank you so much for taking your [00:20:00] time. I'm so glad MATTER and Inflect found each other and we look forward to a long, successful partnership together.

[00:20:07] Stephen Collens: Thanks so much Lindsay. I am grateful for our partnership and really appreciate this time with you. 

[00:20:13] Lindsay Kriger: Thanks for joining us, and again, I'm Lindsay Kriger, director at Inflect Health. Here at Inflect, the future of medicine care and health delivery is not just right for disruption. It's increasingly personalized, accessible, and human.

[00:20:27] Lindsay Kriger: Make sure you like and subscribe to For Startups by Physicians wherever you get your podcasts. And keep up with us on LinkedIn, Twitter, and Medium at Inflect Health, and on the web at InflectHealth.com.