![]() ![]() And the result has been a ton of companies that exist now that the data is in place that wouldn’t have existed a decade before.Īn example would be Health Catalyst, where Todd and I sit on the board. Once the system got digitized - and it happened very quickly, we went from something like 5% of doctors having EHRs to 97% a decade later. ![]() Meaning that the changes that would take place from a regulatory point of view and also the data infrastructure being laid, it was generally our belief that that would be good for startups just as it is when tectonic plates shift under any big market.Īnd that was true. The thing that we expected was that it would be a good time for startups, as I said. Looking back at a decade in health investing, has that investment thesis you mentioned panned out? What played out as expected and what played out unexpectedly? Most healthcare investments that are done at this stage are done by generalists and we’re excited to be very differentiated as business partners for entrepreneurs as a totally focused product. And thats’ why I’m excited to join this place. Because so much about the healthcare system, whether it’s employers, pharma, or payer-provider, is the relationships. And that’s why the network that we’ve developed over the years is such a helpful thing. It’s not necessarily to find product-market fit but to help them scale. And so, when I made the comments that I did about moving over here, what we’re built to do is help companies scale. What we do at Transformation Capital is help with businesses that are already at the commercial stage. Can you tell us a little more about Transformation Capital? And the result is an incredibly powerful network and deep domain expertise that you don’t get at really any general shop. You know Tom and Jared and I have been doing this for most of our professional lives. And the benefit to a startup in choosing an investor that is focused is the experience of having invested in the market for a long time. Healthcare is its own universe of people and incentive structures and regulations and everything. It’s a general comment about firms that do a small portion of their overall business in healthcare. ![]() And I learned over the years that the network required to be a value-added investor in healthcare is just different from the networks that firms have that aren’t 100% focused on healthcare.Īnd that’s not a Sequoia comment. When you’re part of a focused firm, the network you have because you spend all of your time there is incredibly powerful. Customer intros, board member intros, recruiter intros. I think the main differences are we have an entire team here right now, seven investors who are 100% focused on this market and helping our portfolio companies with introductions and help in various ways. What does that shift allow you to do differently? It was really a move from being a part of a generalist tech fund, which historically has focused on all areas of technology, to one solely focused on healthcare. ![]() I knew the team really well and I wanted to be part of a focused fund that was doing healthcare and thinking about healthcare every second of the day. And I joined transformation because these were two people, Todd who I had worked with at Sequoia, and Jared who I knew from a long time ago and he was at Bain and we competed with each other. It’s a large market with a ton of opportunity, but also a ton of challenges that in my opinion requires focus every day on the market and what’s changing. Why leave Sequoia for Transformation Capital? The general thesis back then was, healthcare is this large, attractive market and there are some things going on underneath the surface, namely the passing of the HI-TECH act - which was going to digitize the healthcare system from an EHR standpoint - and the shift over time to value-based care that was part of the ObamaCare legislation were going to fundamentally change a lot of things in this big attractive market, which is usually a good time for startups.Īnd so we invested in a number of companies over the years at Sequoia and I was a part of those efforts, leading those efforts in many ways, including Health Catalyst, which went public this year and is actually in the fund here in a later round in my new place. I started investing in healthcare services and IT companies in 2008 or 2009 at Sequoia Capital. This interview has been edited for length and clarity. MobiHealthNews caught up with Dixon to talk about his big move, as well as his insights on how digital health and healthcare investing have changed over the past decade. After 10 years investing in healthcare for Sequoia Capital, Mike Dixon is moving to Transformation Capital, a dedicated healthcare investor focused on supporting commercialized, growth-sized businesses.ĭixon joins former fellow Sequoia investor Todd Cozzens and Jared Kesselheim, all three of whom hold the title of managing partner at the firm. ![]()
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