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HomeVenture CapitalTwo-Sided Networks, a Founder's Playbook

Two-Sided Networks, a Founder’s Playbook

Probably the most important bottleneck within the adoption of healthcare expertise up to now has been distribution. During the last decade, generations of digital well being firms have struggled to succeed in escape velocity—not as a result of their services and products weren’t transformative, however as a result of they failed to search out an executable path for sustainable distribution and worth seize.

A few of that was merely because of the general immaturity of the market and its incapacity (or resistance) to soak up and pay for novel, software-based merchandise that didn’t slot simply into current budgets and care plans. A few of it was that firms lacked the capital to have the ability to survive lengthy healthcare enterprise gross sales cycles that have been the first path for going to market.

In response, resourceful digital well being founders have been discovering artistic and environment friendly methods of getting their expertise to market. We consider that is necessary for our healthcare system. So, we’ve been amassing insights and data from these founders in our Digital Well being Go-To-Market Playbook sequence, in hope that our learnings will show you how to construct your firms.

One thrilling go-to-market technique we’ve noticed is to construct a two-sided community. On this strategy, an organization builds services and products which can be priceless to at least one market constituent—say, sufferers, suppliers, payors, pharma/biotech, or pharmacies—after which leverages that community of customers, in addition to the information generated in serving these customers, into providing services and products to a different set of constituents. Although this technique comes with added complexity, two-sided networks may end up in extra sturdy enterprise fashions on account of highly effective community results.

On this episode of our Digital Well being Go-to-Market Playbook, we discuss concerning the fundamentals behind a two-sided community mannequin and why it’s a very attention-grabbing time in healthcare for this strategy. Then, we ask 5 totally different founders—Iman Abuzeid, MD, CEO, and Cofounder of Unimaginable Well being; Andrew Adams, CEO and Cofounder of Headway; Thomas Clozel, MD, CEO, and Cofounder of Owkin; Doug Hirsch, CEO and Cofounder of GoodRx; and Arif Nathoo, MD, CEO, and Cofounder of Komodo Well being—to share their strategy to and learnings from efficiently executing multi-sided community GTM methods.

We cowl lots of floor on this GTM Playbook, so use the Desk of Contents at left, the timestamps within the video, and the transcript that can assist you discover the knowledge that’s most dear to you. We’ll proceed to submit our learnings at our hub web page, so please tell us—what’s working finest on your workforce?

  1. Which facet did you begin with? [9:50] 
  2. How did you persuade early customers to attempt your product? [16:10]
  3. How did you value your preliminary product? [20:15] 
  4. What metrics did you give attention to? [21:35] 
  5. When do you have to activate the subsequent facet? [26:56] 
  6. How did you discover product-market match (once more)? [28:05]
  7. How did you steadiness buyer priorities throughout the 2 sides? [33:05]
  8. How do you proceed rising as soon as either side are working? [34:12]

For extra on constructing digital well being firms:


Vineeta: Hello everybody. I’m Vineeta.

Jay: And I’m Jay.

Vineeta: We’re each a part of the well being and bio investing workforce right here at Andreessen Horowitz.

Welcome again to chapter three of our sequence on evolving go-to-market motions within the very thrilling world of digital well being. Within the two earlier movies within the sequence, Jay and Julie explored a technique that we known as B2C2B, after which Justin and Julie analyzed one other more and more distinguished technique of risk-based contracting on the earth of value-based care.

Right this moment in episode three, we’re going to talk about yet one more go-to-market technique, which is to construct a two-sided community in healthcare. So on this playbook, we’re going to discover: What’s a two-sided community, actually? How and why are so many digital well being builders, 5 of whom we’re going to spotlight right this moment briefly clips, selecting to spend money on the expansion of two-sided networks? And lastly, we’ll share how we as traders consider two-sided community companies ourselves, and the way we take into consideration their future as very thrilling, impactful, engaging giant companies.

What’s a community enterprise in healthcare?

So let’s kick off by defining a community. On the finish of the day, a community is a gaggle of interconnected transacting events—that might be companies that might be folks, firms, sufferers, and suppliers.

Right this moment, after we consider actually well-connected, built-in networks, healthcare isn’t often the primary trade that involves thoughts. We consider healthcare as a substitute as this sadly fragmented, siloed world the place information is caught in a single a part of the trade and might’t circulation freely to different elements.

Now there are nuances and grey areas, however the 5 main constituents of the healthcare trade are what we wish to typically name the 5 Ps.

There are the pharma firms, additionally identified to a broader extent as life sciences firms. They construct the merchandise—that might be medicine, diagnostic exams.

There are pharmacies—that’s the availability chain, folks and firms who’re in the end promoting these merchandise to finish customers.

There are suppliers—these are the docs, nurses, well being programs, hospitals, the infrastructure by which we truly do care supply, which leverages these life sciences merchandise to assist sufferers.

And there are payors:, the group that pays for healthcare providers. That might embody insurance coverage firms, that would embody Medicare, that would embody self-insured employers.

And eventually, there are sufferers—the folks that each one of those entities collectively attempt to function the healthcare ecosystem.

And oftentimes these 5 Ps wrestle to attach or to transact actually seamlessly with one another. And that’s precisely the issue, truly, that two-sided community companies in healthcare are sometimes tackling. They’re constructing these channels, these connections, between main gamers within the healthcare trade, and sometimes information reinforces these connections.

What makes a two-sided community work?

Jay: Now let’s take a minute to debate what makes a two-sided community truly work and the way it’s totally different from an organization with two distinct enterprise items.

The 2 are related in that each execute one distinct, go-to-market movement for every buyer set. However right here’s what makes a two-sided community totally different. The corporate is constructing a product that’s priceless to at least one set of shoppers and the supply of that product to these clients permits them to do one thing else for a completely totally different set of shoppers.

And when one firm efficiently executes two impartial, go-to-market motions in parallel, a robust community impact kicks in and every go-to-market movement turns into simpler as a result of the opposite exists. In brief, one plus one is bigger than two, and the enterprise turns into better than the sum of its elements.

Vineeta: So let’s take a look at some examples of two-sided networks to construct slightly little bit of instinct on what this go-to-market movement means and what it could allow.

So a canonical community enterprise everyone knows is Google. Google is a enterprise that not directly connects customers, the primary facet of their enterprise, with an unlimited universe of advertisers on the opposite facet. On the patron facet, everyone knows that they’ve constructed a collection of services and products that meet our wants as customers, from serps, to e mail instruments, to enterprise instruments. After which individually for advertisers, they’ve additionally constructed a collection of merchandise, providers, and analytics that underpin their promoting enterprise, and that make the most of all of the data that comes from the patron facet of their enterprise. And the hot button is that these two enterprise arms rely intrinsically on each other. The promoting enterprise solely works if it could leverage the deep attain into the patron world that Google has, and the patron enterprise can’t stay or maintain itself with out the funding that comes from the promoting enterprise.

And so either side of this community turn into self-reinforcing elements of the general Google enterprise due to the information, actually, that flows by way of the channel that Google has created by not directly connecting these two totally different go-to-market motions.

Jay: In order that was a client web instance. Let’s discuss a healthcare instance that Vineeta and I each skilled by way of our time at Flatiron Well being. Nat Turner, Zach Weinberg, the founders of Flatiron, and the unbelievable workforce there constructed a groundbreaking two-sided community enterprise to arrange the world’s most cancers information.

The idea for Flatiron was the statement that there’s lots of information generated each single day by oncology care suppliers, from affected person signs, whether or not and the way they reply to medicine, even the genomic profile of tumors. Pharmaceutical firms actually wish to be taught from this actual form of information to make oncology drug discovery, improvement, and distribution higher and extra environment friendly.

So Flatiron Well being constructed a two-sided community that linked these stakeholders—healthcare suppliers on one facet of the enterprise and pharmaceutical firms on the opposite—by first constructing a collection of deeply built-in software program merchandise to assist suppliers care for their sufferers.

On the identical time, they created instruments to scrub and analyze that information and switch it right into a format and construction that’s helpful for drug improvement. Very similar to within the Google instance, the 2 sides of the enterprise aren’t instantly transacting with each other, however the information streams from both sides reinforce each other.

Why now in healthcare?

Vineeta: So why are we seeing the rise of a two-sided community go-to-market technique? We predict there are no less than three tailwinds taking part in out during the last a number of years, that are accelerating this development and making it sturdy.

First there’s extra healthcare information in a digital format than there ever was earlier than. Virtually 95% of care suppliers have adopted digital well being information within the final decade, because the HITECH Act in 2009. Over 35% of all of the world’s information is definitely generated within the strategy of delivering healthcare.

We’ve got all this information now about sufferers and well being information, their diagnostic exams, patient-reported outcomes, claims, and way more. The well being trade leaves a really wealthy information path. And so all this information now exists and is digitized. That’s the primary development.

The second is that this information is definitely extra generally saved within the cloud. Regardless of privateness considerations about healthcare information, many, many suppliers, hospitals, clinics, labs, EHR distributors—all that information is definitely dwelling in Google Cloud or on AWS, moderately than on an on-prem server within the basement of your hospital. And that implies that that information is extra accessible and simpler to share, to investigate, throughout the complete trade.

And the ultimate development that we expect is necessary is that our instruments and capabilities to course of, remodel, and analyze this information has additionally improved.

Our companions have written about this and rising architectures for the fashionable information infrastructure stack—and that’s an attention-grabbing learn, we’d encourage you to test it out. However the trade for these instruments was not simply centered on a selected software. It’s universally enabling, and healthcare information isn’t any exception.

So not solely do we’ve much more information, we even have unbelievable instruments that enable us to be taught from that information extra quickly. And so this actually is an ideal setting for entrepreneurs to ask: How do I exploit that risk that I can use information to construct connectivity between in any other case siloed elements of the trade?

And two-sided networks look fairly attention-grabbing in that mild.

When ought to a startup attempt a two-sided community play?

Jay: Whereas two-sided networks might be extra advanced to execute, founders who select this go-to-market technique are usually addressing no less than considered one of three conditions wherein it may be well worth the effort.

One: Damaged information flows between two units of constituents. On this situation, one celebration is concerned with insights from one other celebration, however this information isn’t flowing ceaselessly between them, usually as a result of there aren’t software program rails in-between them. Or alternatively, one celebration desires to collaborate with the opposite and desires an environment friendly channel for engagement. The startup turns into that connecting bridge.

Two: Extreme fragmentation in a market that makes it tough for customers to entry, navigate or transact with the opposite facet. The interface in that is {the marketplace}, which aggregates that fragmented ecosystem and makes it extra accessible to different events.

Three: Extremely elastic demand whereby you’ve got customers who actually need and are prepared to make use of a sure services or products, however the place monetizing instantly both isn’t possible or would decelerate adoption or injury retention prohibitively. So discovering a sustainable enterprise mannequin elsewhere could make lots of sense.

There isn’t any excellent, proper approach to construct a two-sided enterprise in healthcare and life sciences. It’s nonetheless very a lot a rising, evolving technique. We’re lucky to have spoken with so many founders selecting this strategy and we’ll share a few of our learnings in addition to interview clips from 5 distinctive founders particularly about how they strategy constructing their companies and hope that our learnings show you how to construct your firms.

The 8 questions we requested founders

1. Which facet did you begin with?

Once you’re constructing a enterprise with a two-sided community technique, it’s usually not apparent which facet of the enterprise to begin with first. We heard from Arif Nathoo, CEO and Cofounder of Komodo Well being, which is overcoming damaged information flows with a two-sided community connecting life sciences firms on the primary facet, and suppliers, payors, and pharmacies on the second facet. He described how they began with the demand facet, focusing on a really slender set of customers, however delighting them relative to their best possible subsequent various.

Arif: I feel each tech firm ought to begin with the demand facet.

So we truly picked a really particular viewers inside life sciences, which have been these of us on medical affairs groups. Medical affairs groups are answerable for non-promotional scientific change, which principally means having scientific conversations with docs.

We noticed their wants have been actually gated by a scarcity of visibility right into a supplier’s general follow. So you may get a lot of data on what docs are publishing, you possibly can see what medical trials they’re working, however what you lack is actually deep perception as to the place they’re within the care journey of a affected person.

And we thought, hey, if we might deliver actually, actually good perception to that, we might serve this one little area of interest very well. And in order that’s how we began the enterprise. We served one inhabitants. And thru that we constructed one software and that software, we bought to that one purchaser sort and the enterprise actually grew from there—however it began out as a result of we actually wished to get one factor proper.

Jay: Alternatively, we heard from Andrew Adams, CEO and Cofounder at Headway, which is overcoming fragmentation with the multi-sided community that connects sufferers with psychological healthcare suppliers and insurers. He described how they centered on the availability facet first—of their case, psychological healthcare suppliers—due to their perception that their market was basically provide constrained.

Andrew: This was significantly core throughout the early couple of years of Headway, that we very clearly had a patient-oriented mission. We’re constructing a brand new psychological healthcare system that everybody can entry.

However then our technique of supply and our strategic focus was very significantly on the therapist, which is the scarcest entity within the area. It’s the scarcest asset within the area, it’s actually onerous for payors to work with fragmented suppliers wherein they really feel like there’s not sufficient of them, and it’s actually onerous for the affected person to discover a supplier.

So we had a really crystal clear readability, significantly early on. And once more, I’m disclaiming early on as a result of when you do that, you’ve got a possibility to evolve and do extra. However very early on, we had the unambiguous readability of the therapist being our buyer.

We framed our demand era as an activation price for our provide facet. So we very, very rigorously filtered issues by way of that lens of constructing for the supplier. And should you look by way of technically what we delivered, we did all kinds of issues that no affected person would ever increase their hand say, I would like that. No affected person has ever been like, you recognize what? I’d love a approach to discover a supplier on-line, however initially, I gotta vet how good their claims engine is, or I wish to see how good their credentialing engine is. However that stuff is actually necessary to have the ability to scalably construct for the supplier to have one thing that cash simply seems, credentialing simply occurs.

And so we constructed the perfect claims engine. We constructed the perfect credentialing engine. We constructed the perfect profit interpretation engine within the nation, no matter specialty, as a result of we constructed it from tech, from the get-go, centered on our vertical psychological well being. And so we did all this stuff that have been centered on getting energetic suppliers. Finally to serve our affected person mission concerned focusing rigorously on the availability facet.

Jay: And to make issues extra advanced, we hear some go after either side in parallel. We heard from Iman Abuzeid, CEO and Cofounder of Unimaginable Well being, which is addressing fragmentation between healthcare employees, particularly nurse practitioners and employers. She described how they have been capable of go after either side instantly by making use of a spotlight constraint on geography for an preliminary interval earlier than scaling.

Iman: Yeah, so we began with each. We went after provide and demand on the identical time, however we stayed geographically very centered, like many different two-sided marketplaces. After we began, we have been solely stay within the San Francisco Bay Space.

And so whenever you limit your market like that, it turns into much more manageable to get provide and demand, and you’ll actually determine your playbooks for a way you’re going to get provide and demand.

Jay: So our first key takeaway is that whether or not you begin on the demand facet, the availability facet, or a restricted model of each, it’s finest to give attention to probably the most constrained facet of the market to jumpstart the community.

And no matter who you begin with, belief must be the inspiration. We talked to Thomas Clozel, CEO and Cofounder of Owkin, which is constructing analysis infrastructure for each care suppliers on the primary facet and biopharma firms on the second facet. He emphasised the significance of constructing belief with their first customers—of their case, hospitals.

Thomas: We first actually constructed this belief by saying, that is cool, you see medication, you don’t see product, you don’t see information, you don’t see money. And it actually felt necessary as a result of we have been working with physicians, you recognize? So I feel that the belief was actually the primary layer that retains all these hospitals working with us yr after yr after yr.

Jay: And GoodRx took a really related strategy of addressing fragmentation between particular person customers on one facet and producers and pharmacies on the opposite. CEO and Cofounder Doug Hirsch shared with us how they constructed belief with their affected person customers early on to drive adoption and develop the enterprise.

Doug: It’s actually, actually onerous to vary folks’s habits.

And so they’re in search of a cause, I don’t belief this new factor or they’re as much as no good or who is aware of what. And so we wished to only—I imply, should you take a look at GoodRx, the core of GoodRx again in 2012, it was a search field, a value web page, and a coupon. And we took nice effort to guarantee that it was simply as simple as attainable for somebody to get in, the costs that we confirmed have been correct, it labored whenever you confirmed up on the pharmacy.

We put an amazing quantity of effort into, we name it affected person advocacy right here, however that’s actually buyer care to others. We’ve got kind of that Zappos mannequin of, simply name us for something. We’ll do our greatest to resolve it for you and do it proper.

Jay: So these two tales illustrate our second key takeaway—that belief is important for constructing the primary facet with the robust basis to allow future sides of the enterprise.

2. How did you persuade early customers to attempt your product?

So when you’ve recognized your preliminary customers, how do you go about participating them? We constantly heard an emphasis on figuring out single-user utility earlier than highlighting the long run community. Doug at GoodRx shared with us how they began with an ultra-simple product and restricted the friction of utilizing GoodRx.

Doug: I’m the man who’s used to only constructing unbelievable merchandise with none advertising and marketing finances. And if the product is nice, folks will come and if it’s not, they gained’t. And I form of consider that to today. We’ve got a really important advertising and marketing division, we spend lots of of thousands and thousands of {dollars} in advertising and marketing, however I nonetheless in the end consider that you need to be driving a major quantity of your site visitors organically as a result of you need to be offering a product that gives sufficient worth that persons are gonna inform their associates about it.

V1 of GoodRx, which we launched at Well being 2.0 in San Francisco, again in 2010/2011, was form of a pretend web site to be sincere, proper? I feel Costco revealed costs on their web site, apparently in New York state you possibly can demand a value checklist—though I problem you to do this as a result of any pharmacist will take a look at you such as you’re loopy whenever you do this. We simply cobbled, we had folks calling locations, we requested our associates what value they have been paying for sure meds, we simply cobbled one thing collectively, threw it up there. After which we introduced at this convention and there was a voting mechanism at this convention and we got here in second place to a way more well-known model on the time.

I feel we additionally made the choice early on to not require registration, which, you recognize, one of many largest downsides of many of the well being merchandise which can be on the market, particularly like your individual insurance coverage firm is it requires such onerous identification and setup to ensure that somebody to make use of the product that folks simply don’t trouble.

And particularly after we’re asking somebody to take a flyer on one thing so necessary. That is about your care and prescriptions, one thing so private. And we thought okay, let’s show you how to begin a search. We then show you how to spell the title of that drug. And we’ll instantly take you to costs at pharmacies you acknowledge. We’re not going to ask you to enroll. We’re not going to ask you to authenticate your self and do all these loopy issues. I’m not gonna ask you to pay even, clearly.

Jay: Equally, Iman at Unimaginable Well being shared with us the handbook matching they did by way of their private networks for the primary cohort of customers in absence of not having the opposite facet of the community totally constructed.

Iman: We spent a while understanding their issues and we found that nurses and different healthcare employees have a horrible job search expertise. They apply to 10, 15 locations. They don’t even hear again—they describe it as a black gap. And even after they do hear again, it could nonetheless take months. And so after we described the principle worth proposition, like hey, the employers are going to use to you rather than you making use of to them, that was a really interesting worth prop to them.

I feel the primary 30 or 40 nurses, we simply recruited by way of our networks, frankly. There was no software program, to your level. And simply actually used that worth proposition of, hey, employers are going to use to you rather than you making use of to them as the principle message and that obtained the primary 50 to 100 nurses on our platform.

Jay: In a barely totally different strategy, Thomas at Owkin shared with us how they constructed belief with their early customers by providing backed skilled providers within the type of customized analytic initiatives and co-publishing the outcomes with their clients and tutorial journals all earlier than attending to monetization.

Thomas: With this worth proposition about we’re going to work with the hospitals, we got here to them, saying, we’re not going to take your information. We don’t wish to take your information out. We wish to show you how to curate these information units. We wish to assist make large, breakthrough discoveries with our information science workforce and we’ve a superb one. And we wish to publish with you. We wish to write stuff. We began like that, like let’s work collectively. Let’s attempt to discover issues that had not been found earlier than. After which we began to make initiatives. Begin with one heart. Curie was the primary in France. Then we obtained a couple of others coming in.

And we got here with this concept and we began to publish, make initiatives, uncover the place our expertise was probably the most environment friendly and begin to attempt to federate the facilities collectively as effectively and construct these federated studying merchandise.

Jay: So this brings us to our third key takeaway, which is that each founder emphasised beginning with the slender gaze of fixing a single core downside on your preliminary customers.

3. How did you value your preliminary product?

Virtually, no founder we communicate with looks like they optimize pricing, particularly within the early days on the primary facet of their enterprise. One widespread theme we heard although, was that on the primary facet, the purpose is to optimize for buyer suggestions and engagement moderately than solely on near-term economics.

As one instance, Owkin centered on constructing belief with their supplier clients and set their pricing mannequin accordingly. They didn’t need hospitals to pay for his or her software program. And they also developed a income sharing mannequin accordingly.

Thomas: Then got here our third worth. We don’t wish to have suppliers. We don’t wish to have hospitals pay. What we wish to do is enrich the educational system we’re coming from and we wish to assist it, we wish to make it develop.

So we knew that, and figuring out that, we knew that we’ll by no means attempt to make hospitals pay. It’s not a terrific enterprise anyway, to attempt to make hospitals pay. Some others do it very well, however we didn’t wish to do it and it didn’t really feel proper. And so we got here to the issues that we have to discover a win-win mannequin with them. And the win-win mannequin was we have been going to offer you this expertise, our platform, we’re going that can assist you on the information science facet, we going to must curate that up, we additionally even generate that as a single cell information, particular transcriptomic, actually high-quality datasets that they don’t have. And we’ll income share with you, as much as 10% often. In order that’s form of the brand new factor. And the mannequin was a very win-win mannequin.

Jay: This story echoes what we’ve heard from many founders as effectively, that it’s key to cost for engagement and studying to tell future product improvement on either side.

4. What metrics did you give attention to?

Jay: Finally, there’s a lot nuance in every market, such that your go-to-market journey goes to differ case by case, however we requested founders what metrics they checked out to gauge whether or not they have been heading in the right direction ahead. For Arif at Komodo, they anchored to a selected qualitative metric, which they known as moments of fact, above all the normal quantitative enterprise SaaS metrics that they after all checked out as effectively.

Arif: Effectively, if I’m basing my pricing to worth, I have to base my product metrics to worth. That’s actually onerous for product as a result of I can’t take a look at a session and say, “are they getting worth from that session?” if all I’m is how they’re clicking by way of or the period of time they’re spending within the app.

And so what we centered on as a substitute for our product workforce have been “moments of fact.” The shopper wants one thing. How am I driving that worth higher, sooner, and extra effectively than anybody else? And so these moments of fact are literally what we discovered have been extremely predictive of outcomes. And so truly our product workforce invested in working QBRs with each considered one of our clients, even after we have been tiny. And sure, utilization metrics are a part of it, however extra importantly, the tales round how the shopper was driving worth of their enterprise from our product grew to become the precise major means for them to make these calls. And they also would take a look at that and say, okay, there have been like six moments of fact, and we served all of them. After which we shared that with the shopper and the shopper obtained actually excited. After which they stated, okay, right here’s what we’re gonna do subsequent quarter. And so it allowed them to begin to construct their relationship in a deeper means with us.

And we measure ourselves on that income retention, greenback income retention, no matter kind of retention metric, which components in primarily your gross churn mixed along with your upsell. And so each considered one of these QBRs isn’t just a possibility to get a renewal. It’s a possibility to get an growth, broaden to a different workforce, broaden to a different product which will swimsuit a number of the product wants that the workforce has. So we don’t consider these as simply, get the renewal. We consider it as what’s the relationship that permits us to develop our presence with that workforce throughout the complete Komodo suite of merchandise.

Jay: Andrew described how Headway centered on one north star quantitative metric, however then modified the north star metric as the corporate matured by way of totally different levels.

Andrew: Early on in our firm’s improvement, we prioritized what number of energetic suppliers we had, which is energetic provide facet customers. We actually, actually privileged that. And certainly, very like the event of marketplaces, as soon as you actually nook provide—and we constructed the perfect provide acquisition engine, we’re larger, sooner than any would-be competitor—then we actually knew as effectively for another strategic inputs that it was a time to consider not simply cornering and having a north star metric be provide items, however a spinoff of GMV, which for us was appointment, provide, and demand intersecting.

Jay: So our fifth takeaway is to search out your north star metric, whether or not it’s qualitative or quantitative, after which be prepared to regulate that metric as your organization evolves.

We heard many examples of metrics being deceptive with out context. So the hot button is to diligently decide those that truly drive enterprise worth on your community. For GoodRx, which might take a look at mixture site visitors and web page rank amongst different issues, exterior adjustments might actually skew these.

Doug: We checked out our web page rank as a result of we’re clearly primarily an natural primarily based firm. Nobody actually occupied drug title plus value, and so we wished to guarantee that we have been filling that void and that we might truly make some headway by simply answering that query once more for each customers and physicians. And so I feel, you recognize, clearly we checked out mixture site visitors, we checked out web page rank, we checked out claims.

So let’s say Google abruptly determined that we have been the best choice for lisinopril. Lisinopril is only a drug. However let’s say lisinopril is the top time period, proper, not lisinopril plus value. And so hastily our lisinopril site visitors would undergo the roof, however after all, so would our bounce price, as a result of folks would come they usually’re truly in search of unwanted side effects of lisinopril, or they have been in search of interactions with lisinopril, or ought to I take it if I’m pregnant or who is aware of what. And so these might be typically complicated. In addition they after all blow out your metrics as a result of now you’re the top time period and also you’re the primary search end result and hastily it skews issues. So you must watch out as a result of, bear in mind I got here from the world of social, I used to be at Fb, the place time spent was the god metric, like we care about as many eyeballs and as a lot time as we are able to. At GoodRx it’s much less about time spent and actually extra about ensuring the patron will get a constructive consequence they usually’re capable of finding a terrific decision.

Iman: Usually, simply high of funnel metrics might be very deceptive if we’re not wanting on the center and the underside of the funnel by way of what the exercise you truly wish to occur. An arrogance metric is simply wanting on the general variety of expertise on the platform, as a result of it doesn’t actually matter if there’s a thousand, ten thousand, 1,000,000, thousands and thousands of healthcare employees on the platform in the event that they’re not engaged, in the event that they don’t have their profiles accomplished and in the event that they’re not being put in entrance of employers.

Jay: And so our final takeaway for constructing the primary facet of your community is to be conscious of the north star metric you select, and particularly to be careful for these self-importance metrics.

5. When do you have to activate the subsequent facet?

So after establishing the primary facet of the enterprise, founders then have to begin eager about flip the information stream from the primary facet of the enterprise to drive the second facet’s progress.

Arif: Upon getting that core, then the query is: How are you going to use it to the good thing about the oldsters who will present you the subsequent set of insights? And so we truly took that core and we constructed lots of insights that helped of us that see affected person journeys, like suppliers, like payors. And by doing that, gave them a cause to each contribute to us and, as effectively, take one thing from us.

Jay: Actually, it’d even be the case that the information stream and engagement {that a} enterprise has curated is so good that the second facet of the enterprise involves you.

Doug: We had numerous producers name us up. I had one very senior producer, C-level govt at a serious producer, name us up and say, this technique’s simply damaged. You guys have the eyeballs. We wish to get in entrance of the folks in order that we are able to inform them about our drug and provides them the instruments like affected person help applications and producer reductions. We wish to go direct. We wish to simply end-run this entire messy system. And so we knew there was a possibility right here after we have been getting these sorts of cellphone calls.

6. How did you discover product-market match (once more)?

Jay: Now whether or not you’ve got some inbound demand for the second facet of your corporation or not, you seemingly nonetheless have to do the cycles of buyer ache level discovery and product iteration, which you efficiently did on the primary facet of your corporation, with a purpose to succeed within the second movement. GoodRx was fairly disciplined of their strategy right here.

Doug: We simply began slowly calling up producers and saying, hey look, we’ve obtained extra folks sitting on the GoodRx slash no matter drug title web page than you’ve got at So what do you wish to say to these folks? And also you begin with the fundamental stuff. You begin with the identical advertisements that you simply see on the Golf Channel and stuff like that.

However then we began eager about far more subtle applications, like we’ve a program proper now the place we even have a nurse, a stay 24/7 nurse chat sitting on a drug web page. So you possibly can truly discuss to a nurse concerning the drug.

We’ve got, once more, integration of affected person help applications, so should you simply merely can’t afford it, they’ve these unbelievable applications that’ll deliver down the associated fee to as a lot as zero. We’ve got all kinds of integrations that in the end are centered on connecting that supplier who historically doesn’t have a terrific relationship, doesn’t actually know the affected person, as a result of they’re very divorced from it. They usually have a drug that you would be able to’t even pronounce that they’ll’t essentially join with the affected person. And we’re the glue, we’re the glue that may be within the center.

Jay: Now it may be daunting and doubtlessly distracting to begin once more on a brand new facet as the primary facet of the enterprise is actually taking off. However specializing in discovering product-market match within the new section can drive stickiness for either side of the community. Unimaginable Well being discovered that product growth surfaced extra concepts for additional product growth, which surfaced extra concepts for product growth, which continues to gas their progress right this moment.

Iman: So product growth in a two-sided market might be one of the vital efficient issues you are able to do to drive progress and to drive your individual, and to drive an organization’s defensibility, and to drive pleasant consumer experiences.

So we’ll discuss it on the expertise facet and on the employer. So on the expertise facet, it was essential that we’re not simply the place the place a nurse and finally different healthcare employees discover a job. We have to do greater than that. We have to have, from a product standpoint, we have to have a career-long relationship with them.

So we do provide free persevering with schooling to each single nurse within the nation. We provide free wage estimators for each single nurse within the nation. We’ve got an recommendation platform or neighborhood constructed into our apps the place nurses can provide one another extremely personalised recommendation. It’s like a Quora for nurses.

And we proceed so as to add an increasing number of of those providers. Along with that, our buyer help workforce affords interview preparation, helps with resume guides and so forth. And so, I feel the extra worth that we drive to the expertise, to start with, the extra be a part of us after which the extra stick with us. It actually is a big driver of consumer acquisition and engagement on the expertise facet.

Now the identical is true on the employer facet. You understand, we incorrectly thought in our early days, if we ship the expertise, we’re good to go. We will simply transfer on. And no, it seems that we truly must construct various B2B workflow software program for the employers.

Automated interview scheduling, in-app chat between the expertise and the employers. We needed to construct an SMS expertise, we needed to share a sturdy set of information analytics to allow them to benchmark themselves towards their rivals who have been additionally utilizing the platform to allow them to enhance their inside hiring operations.

Jay: So in terms of constructing out the second facet of your community, our first takeaway is to repeat the product discovery and iteration course of that your group executed so successfully earlier than with a purpose to discover product-market match once more.

However once more, extra complexity can begin to creep up. Holding it easy and acquainted can drive adoption and progress tremendously.

Andrew: So to payors we get to transact in a means that’s actually acquainted wanting like a physician’s workplace. So despite the fact that over time, as a part of being greater than only a supplier group we layer on extra pricing complexity and extra product complexity, we appeared actually acquainted. We receives a commission like a physician’s workplace will get paid, which permits us to in flip pay suppliers like a physician’s workplace will get paid. And so for suppliers, they don’t have to see us as a few of it entails a SaaS charge. They see sufferers after which they receives a commission, there’s not any extra auxiliary charges for what we’re providing.

We get to offer away our software program to suppliers without cost. They get a market the place sufferers can discover them. They get a SaaS portal the place the billing and the scheduling occurs in a means the place insurance coverage is invisible, after which they receives a commission an easy charge for every session.

Iman: The extra complexity there may be in pricing, the tougher it’s to shut a deal. And proper now we’re in hyper-growth mode. Unimaginable Well being grew 400% final yr, we’re on observe to develop one other 300, 400% this yr. And our precedence proper now could be to drive market share and broaden as a lot as we are able to. And so we saved our pricing quite simple because of this.

Jay: In order you’re iterating, it’s key to search for any space you possibly can to chop out complexity.

7. How did you steadiness buyer priorities throughout either side?

Now, when you obtain success on either side, you encounter the extra pronounced problem of protecting either side. Iman at Unimaginable articulated what we heard from many about serving each, however in the end being clear concerning the north star of your community and why that alignment in the end advantages either side of your community.

Iman: This occurs on a regular basis. We’ve got employers which have requested for exclusivities, they ask, can we get them expertise first? And we all the time say no to these requests.

We clarify that we function like Switzerland, we’re impartial, and we don’t have any desire for one employer over the opposite. And the explanation for that’s due to the expertise on the finish of the day—the mission says to assist healthcare professionals discover and do their finest work.

And on the finish of the day, it’s as much as the expertise the place they in the end wish to find yourself being, and we wish to maximize the variety of alternatives that the expertise has.

Jay: And that’s how we get to our third takeaway, which is after all, to work with all sides of the networks, however to be open and clear about your alignment with one particularly.

8. How do you proceed rising as soon as either side are working?

With either side buzzing, what’s subsequent? How do you proceed constructing and rising the enterprise as soon as either side are working, reinforcing each other? The widespread theme is that you must discover methods to nurture demand on your product. Komodo centered downstream, constructing relationships with skilled service suppliers and brokering channel partnerships, which unlock new methods of distribution.

Arif: What’s occurred over time is that our relationship with these consultants has grown to the purpose the place they’re the equal of a system integrator in a workflow software program setting, which means that they’re those that truly carry the final mile usually for our clients. And so we’ve made it very easy for them to function on the Komodo platform. By doing that, we give our clients the choice of working with their favourite set of consultants or their favourite kind of integrators. And that has truly strengthened our relationship, each with the ecosystem in addition to with our clients. In order that I don’t say no. I say, guess what? Listed below are 5 firms that you would work with that’ll care for this and care for this in your phrases. And we work with all of them.

Jay: So our fourth takeaway is to search for potential channels and alternatives to assist your clients use your merchandise.

One other attention-grabbing perception is from GoodRx, who centered on constructing mini dash groups to proceed launching new merchandise and options to broaden their product floor space throughout healthcare.

Doug: So we spend lots of effort and time on determining construct small squads to take dangers, attempt issues out that don’t essentially have a direct ROI proper now hooked up to them, with a small group in order that we are able to proceed to spend money on different methods to repair healthcare.The great factor about healthcare is there’s simply so many markets to enter.

Jay: And this highlights our final key takeaway, which is to determine whichever processes are true to your tradition, to make sure you proceed to launch new merchandise over time.

Investor perspective

At a16z, we’re extremely optimistic concerning the scaled affect these multi-sided community companies can have on our disjointed healthcare system, however they’re clearly not simple to construct. So how will we as traders even go about evaluating companies like this? Effectively, we take both sides in flip and we benchmark both sides’s particular person efficiency to best-in-class healthcare software program companies.

Our agency has written extensively on this (together with right here, right here, right here, right here, right here, right here, & right here) however to spotlight:

First, we’re in search of early indicators of lock-in or product-market match. On the primary facet, this spans 5 parts.

Adoption. Are folks signing up? We will measure this in account progress, consumer progress, income progress.

Engagement. Are they utilizing it? We will measure this in time spent within the product, variety of clicks, variety of transactions, variety of visits or no matter the suitable unit of engagement is to know engagement frequency and high quality.

Retention. Are they coming again to the product? How lengthy do they stick to the product? Sometimes we’re retention curves by way of 3, 6, 12 months to know how a lot your current clients are fueling your progress and the way favorable your acquisition economics are.

Effectivity. Is progress getting simpler over time? Is your incremental acquisition price happening? Maybe there’s a community impact rising that’s actually driving word-of-mouth referrals and lowering your dependency on paid acquisition.

Information entry. Are you studying out of your customers and your product? Are you sufficiently receiving data by way of the primary facet of the enterprise that permits the next sides of the enterprise?

Finally, we get excited by indicators that it’s simpler to develop the shopper base over time.

Then we search for proof that the second facet is reinforcing the primary, or that the two-sided community is beginning to take kind with line of sight to long run sturdiness and engaging economics, even when the enterprise continues to be taking form.

We once more, look throughout the identical dimensions of adoption, engagement, retention, in addition to the effectivity of that progress. However right here we’ve the added lens of in search of qualitative examples of buyer use circumstances which can be solely attainable due to the primary facet of the enterprise.

And throughout each, we wish to perceive your idea of defensibility. Each from disintermediation between the constituents you’re connecting in addition to from margin or take price compression on both sides as anybody constituent positive factors share, or you’ve got new competitors. A few of it will look barely totally different relying on whether or not you monetize by way of SaaS charges on both sides or by a per transaction market mannequin. However at a excessive degree, these are a number of the methods we glance to know these kind of companies.

Vineeta: Thanks all once more for listening and thanks to the founders who contributed their hard-earned classes on this episode of healthcare go-to-market technique. As we at a16z proceed analyzing numerous go-to-market motions in digital well being, we’d love to listen to from you on what’s working on your workforce. What’s one thing new you’re making an attempt? What’s a studying you’ve had? We’ll proceed posting our learnings on our hub web page Thanks a lot.


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