The Doctor Who Left Medicine to Fix Venture Capital - Rebecca Mitchell!

[00:00:00] The founder, like a unique insight on like a Bayhart Gnarly problem. We invest in lines, not necessarily dots, and like does the line suggest they're going to be able to execute in a really high quality, like fast enough way, right, in trying to solve this problem and take this market. But on the founder side, do they have grit? Like, do they have humility? Or have they really put in the work to deeply, deeply understand a problem? And they now feel like life mission aligned along solving that problem.

[00:00:29] This is Inspiring Women. I'm Laurie McGraw. And today I'm speaking with Dr. Rebecca Mitchell. And I can't believe it that I do not know until today, Dr. Rebecca Mitchell. She is a physician, a product leader. She is a venture investor. And she's a co-founder of Scrub Capital, which is a venture firm that is actually pretty prolific. Only three years old and already about 20 different investments across a number of different things. We're going to talk about that.

[00:00:55] This is Inspiring Women, though. And Dr. Mitchell, I want to kick off our conversation today talking about a different inspiring women out there. And so let's start with Dolly Parton, shall we? One of the most inspiring women that is out there. I feel that we are losing something really special out there in the world. And I would love to know what you think and want to remember for all of us about Dolly Parton.

[00:01:23] Oh, my goodness. So many things. My husband came home last night and walked in and gave me a huge hug because he knows for me, Dolly has always been a major inspiration. Not because I had musical ambitions or anything, but I mean, a couple of things. She knew who she was and she was unapologetic about who she was, right? And had this amazing combination of confidence and humor in presenting that to the world, right? To make people more receptive to this kind of bombastic, unique human being.

[00:01:51] You know, so much of her work, I think, especially that like more recent generations are familiar with are around uplifting other people to figure out who they are and to live, you know, the best life possible through like her book programs, other things that she did. I love that it's like, I love that it's a person who's really had like a, she had a polymath career that stretched into so many different parts of the world in our life and was just exceptional about all of it and did all of it with humor and kindness and a clear sense of self.

[00:02:20] So she's so many of those things, right? I strive to be in my work and are in the people that I love collaborating with. So I'm very, very sad about this. The new person that I am thinking about the most and in terms of like one of the most inspiring women that ever there was. And, you know, I just talked to so many inspiring women through this podcast and through just work that I do.

[00:02:46] And I just now have a new appreciation what authenticity actually means in terms of acceptance and uplifting and also the opportunity for impact in a way that is so outsized. And I wanted to start there, obviously, to remember Dolly Parton in a way that just hits home. But, Dr. Mitchell, I want to bring it to you.

[00:03:14] So you are inspiring in so many different ways as a physician, as a product leader that has built products that have touched tens of millions of people, impacting them in positive ways, and now investing in companies who can do the same. So why did you want to be a physician? Yeah, so like so many of us, I was sort of surrounded by people that were in medicine, public health, social services when I was a kid.

[00:03:43] And in my family. And I'd say it was never the specific role of being a physician that I wanted to be. My whole life has been walking towards opportunities and seats where, you know, the hope is that you can have a big impact on patient lives and communities. And I really felt that going through that medical training and becoming part of that community of physicians was a really important part of being able to have that kind of impact.

[00:04:11] So it was more than anything inspired by early on from my family, the ones that were in medicine, you know, working in roles, other types of roles in the health care system. And that was from when I was a little kid. My memories actually are going with my mom to home care visits she did as a nurse. Back then, apparently, that was a thing that was allowed. I recall like the butterscotch candies, like all the older folks always had, like ready and waiting for me when I'd come with.

[00:04:37] But the original take your kid to work days, you know, just like come on with me and help out all these patients. Exactly. Exactly. I look back and I'm like, that was probably really good for everybody that we were visiting. Right. They loved it. It was a young person they can, you know, chitchat with. And, you know, my mom was my mom was a social worker. And I would actually, you know, and with the Council of Aging. And so I did the same thing. I didn't have butterscotches. That would have been a real treat. Probably would have eaten them all.

[00:05:06] But that's exceptional. But impact has been a big through line. And you're also very centered on, you know, where the impact is. Just reading you, you're prolific in terms of writing and commenting and speaking in terms of, you know, what problems need to be solved. You are very centered on making sure it's really a problem and it's not just a lot of the fluff and the buzzwords. And you're sarcastic about it, too. Like, how is this actually helping the patient? And, you know, are we really getting to what physicians need?

[00:05:36] So can you talk a little bit about the biosketch of your career, starting as a physician, then becoming a product leader? You've worked in the federal government on some really important initiatives like Blue Button and then now investing in innovative companies. So I want to talk about Scrub Capital. But I'd really like to understand sort of like that impact energy, like why that was so important. And so, like, you know, where have you done your best work? Yeah.

[00:06:03] So, I mean, I think the question you asked at the very beginning, like what led me to be a physician, right? It's funny, like when you become a VC, you have to get used to introducing yourself like 500 times a day, it feels like. So at first a lot of work and looking backwards and being like, okay, like I have to have a through line to explain myself to people. Molly Graham, what a really wonderful piece recently that I would encourage everybody to go read around emergent careers. And like that is the truth of the matter, right?

[00:06:31] That's we sort of find our way off and based upon principles and energy. And that's the real answer to that question, right? So for me, the principle was always where am I best, where am I most curious and best suited in the current moment to have an impact on, and I think it was patients early on, right? But just people, right? Like who are seeking to live like the best life possible, especially when it comes to the way our health impacts all of our lives and our families and our communities.

[00:06:56] And every choice well before going to medical school and becoming a physician. You know, when I was a kid, my job was doing respite care for families with severely developmentally, you know, delayed or disabled children, right? That's how I earned a very small amount of money, but learned a lot about, right? Like how, you know, medical issues and sort of social structures around how we support kids and families was impacting those families.

[00:07:22] I worked in global health for a number of years prior to going to medical school, like research that started a nonprofit. And I did a lot of product work in that context. That's really where I fell in love with what I would say is the through line of where I do my best work, to your question. And that's, you know, big, thorny problem that we've tried to solve in all the traditional, like well-proven ways in other contexts not working. Who do you bring together at the table that is not often at the same table?

[00:07:50] And, you know, one project in particular sticks out to me that was really formative. It wasn't technically a product. Well, I didn't call it that, but that's really what it was. And it was working alongside an incredible midwife at UC San Francisco that was doing research on this, I believe, this garment that had been developed alongside NASA and clinicians who apply to women that were experiencing obstetric hemorrhage in really remote parts of the world.

[00:08:14] Or not so remote places, but where, you know, unfortunately, because of the socioeconomic status the family was in, like they had to have time to go out and raise money and other things to be able to treat the women. And I joined that and I just saw how, okay, the answer to this problem was not let's figure out how to build, you know, hospitals full of highly skilled people in these really remote areas where, you know, they can't even afford clean water. It was let's create a, like, let's take a solution that's like literally used in space right now, right?

[00:08:42] An incredibly remote, you know, environment and apply it to this problem. And design it in context of what's going on in the local community with physicians, other clinicians, you know, with researchers, with people from NASA and prove that it works and figure out how in the world you then get something like that paid for. Which, you know, in the end ended up being like getting on WHO's list of essential medicine. So, you know, you think going to market in the United States is hard, like trying building products, like in the global context for some of these problems.

[00:09:11] But I, that, I loved that work and I'm so grateful to her for exposing me to that really, really early on again, even pre-medical school, because that's, that's been the heartbeat of everything I've done since. Like, what is a really hard unsolved problem we don't have good answers to? Who do you need to bring to the table? How do you get them all focused on the same mission sort of driven outcome? And get them to invent new, new things together and figure out how to get somebody to pay for it and get it distributed.

[00:09:40] So, you know, the, the physician part of my identity has been critical to being able to be a connector and translator across many different groups. But just as critical was the time I spent learning how to be an incredible, like, you know, product person and learning go to market. And I learned a lot of that, you know, in the years with our friends at Livongo and some of the other digital health companies that I got involved in even earlier than Livongo.

[00:10:03] So it's, it's now having all of those pieces, right, that I think that allows me to think about the, the, the practice of medicine and, you know, caring for patients in a, in a really different way than I did when I first started out. But it's always been for that same purpose, right, that I, I felt even as a kid with my mom. There's, there's, you know, with the invention of new things or opportunities or problems we solved, I mean, it is an infinite list.

[00:10:31] And I will say, I mean, to be in venture, you have to be an optimist. You have to believe that new things can be developed and grow and have some type of impact. But we're in a time where, where it is just like crazy in terms of the opportunity for invention and impact. I am an optimist. I do believe that hard problems can be solved.

[00:10:56] And I know that we have incredible issues in our health and care delivery system, obstacles. We have costs that are out of control. At the same time, we have new inventions being made. We have vaccines that work. And I know people might be afraid of them, but they work and we need to use more of them. And there are medicines out there that are having great, great impact.

[00:11:19] So as we move to scrub capital for all of this, you understand how to develop a product, product market fit, economics, ease of use. One of the hardest things that, you know, that extra click or whatever is the difference between making it work or not. And how then did that become sort of the impetus to develop Scrub? Because it's not just any other venture firm where you get a lot of money, which is hard to do in and of itself.

[00:11:47] But it's a completely different thesis, which is bring all the clinicians, all the physicians and make them central to the venture thesis. So talk a little bit, if you mind, about the idea and then about Scrub Capital. Yeah. So, you know, credit where credit's due. So I'm one of three co-founders of Scrub. I run the firm day to day, but I have two other co-founders, Chrissy Farr and Dr. John Slotkin.

[00:12:14] And so our shared perspective, you know, those folks, they're amazing. Just those nobodies. They're amazing. Amazing, amazing human beings. And, you know, in the same way that our leadership team is quite diverse, you know, Chrissy, journalist turned investor and, you know, CEO of Second Opinion Media. You know, John, I can't even begin to describe all of John Slotkin. He's a still practicing spine surgeon, right? CMO Geisinger has been a real leader in autonomous vehicles.

[00:12:41] You know, we are diverse and we also really believe from all of our past work that brought us to venture that what was most missing, there's lots of ways we can improve venture. It's like a whole, it's like multiple podcasts we could do on that subject. Get more women. Especially in the, yeah, especially in the earliest days, right?

[00:12:57] Like the, the diversity of like what you need to know, who you need to know, like the specificity of how you can help a company, whether it's, you know, hiring or opening a specific door for them from a commercial perspective. You know, looking at a clinical workflow question, like it's, it's all so, so specific and things change. There's like underlying principles that stay the same, but like the specifics change really, really fast.

[00:13:22] Whether it's like a technology piece, who's in a seat of power, you know, at a given like client target, like the medicine, the science. As we really said, like how, how do you ensure like the intelligence of the network of a firm is keeping up with all of that and can be genuinely useful to the best founders and like whose, whose voice is most missing at the table, right? From that, that whole conversation and, you know, venture in general.

[00:13:49] And it was very clear to us that the answer was clinicians. And it's a really unique point in time where, you know, people, clinicians, many, many of them, they now both, they know both the bedside, they're trained, like they know the medicine, they know the science, and they increasingly know the tech. They know a lot about like one, a business area of medicine. They're operators themselves, or whether it's, you know, an advisor role, fractional or full-time, you know, what I ended up doing.

[00:14:17] And, you know, I'm not the first one, but by any means to say this, like you hear people, the level of Elon Musk talking about it, but individuals that are high performing and can think and perform across domains. They're, they're some of the most effective at sort of seeing the future before it arrives or helping to build into that future. And so we said, why don't we create a firm model where it's a professionally managed firm, right, writing a single check, easy to work with.

[00:14:44] We're not going to do like a syndicate or something like that, but, you know, structure it in such a way where it's, it's possible for clinicians to participate, whether economically or if they don't want to participate economically. We have a whole model where they can participate in, you know, sharing their time and network, you know, and ideas with us without necessarily having to fully leave the other work they're doing, whether it's, or even leave that work at all. Right. They can stay a hundred percent. That's it. They can stay a hundred percent founding a company, operating a company.

[00:15:14] Um, and then really intentional thinking about the firm as a product that brings them in to the entirety of the investment process, brings them in for portfolio support, but just as importantly to us, you know, develops programming and other things to support them in their diversification of their career. And as, you know, not only emerging, many of them already are leaders, right. Came to mean to amplify, um, the people who already are our leaders. So it is really different.

[00:15:41] Um, you know, I, I'd say the, the biggest risk in starting the whole thing was would founders, you know, sort of see it and get it because there's a lot of. Assumptions out there about what clinicians are capable of. You know, can they be business people? Can they assess startup? Like, are they good investors? Like these, like these questions all the time. And, um, yeah, just. Well, it's true. I mean, you know, the reality, the reality is, uh, so, so physicians as a category, as a profession, you know,

[00:16:11] business is not, is not the core competency. Delivering care and, you know, and the science of medicine is, um, critical. And it is, um, you know, at my time at the American Medical Association, there was so much talk about.

[00:16:28] It is now a requirement for, it is needed for physicians to have some level of, um, competence in basic business skills because of what the system was doing unto the physician. Because of what, you know, that. So I'm curious as to, for all of these thousand plus clinicians, um, I mean, there's so much burnout out there.

[00:16:50] I, I, I imagine there is a level of sort of like power and energy and excitement and that, that is being brought to all of those that are participating in the scrub capital community. Are they? Like, tell me. Yeah. Yeah. So to your, to your first point, I, I put it this way.

[00:17:09] Um, most VCs also have no clue about clinical medicine or they don't, they're like, they don't really know like what it's like inside the health system in terms of the dynamic of like, they know like the facts, but they've never been inside in terms of like who buys, who uses it. Why are they choosing to use it? Why are they choosing to ignore it? Why are they recommending it to their patients? Why are they not? Um, we think about it as a care team, right?

[00:17:33] Like a venture care team where we're not asking every person to know everything and know how to be like a VC, right? In the full sort of like financial like management part of it in a fiduciary sense. But we are creating a model where each person can bring what they uniquely know best and who they know best to that table. And together we're making like fantastic decisions and able to really effectively support the portfolio.

[00:17:56] And it has been fascinating, like candidly just seeing like a number of, um, other VCs that when we first started, they're like, oh, that's cute. Like what a nice sort of mission driven thing. Many of them now say, hey, can we actually look at this? Like, can we put this deal through your process? Because like the speed and quality of input that you are getting is something that we actually can't replicate, even though we have a firm that's like 50 X the size of your firm, right? And all these full time people supposedly doing it.

[00:18:23] And it's not just because people are so spiky, right? And again, like we have so many clinicians now that have done both clinical medicine bedside and other, other things. You know, there's CMOs at like health plans, right? I mean, take like Jenny Schneider, right? At what you're talking about earlier, Livongo, like BMO, right? There's the CMO there. These are people who cannot be put in a box. And so we're getting intel, not just on the clinical side and workflow side, but, you know, how will this be received?

[00:18:51] And like in these Medicaid plans and these very specific states where this person is starting. And these individuals are all nodes into larger networks too, right? It's like, oh, I'll call my really good friend who works in that office and they'll give us a really specific answer overnight because it's a friend, right? And they're going to tell us. Or I went to call, you know, there's so many people. They'll see what we're showing and they'll weigh in and say, oh, hey, like I know you haven't seen me in three months. I want you to know I went to college with this person. We've stayed in touch ever since. Here's like a really personal back channel reference, right? On who they are. Or sometimes, right? It's the opposite.

[00:19:21] It's not such a positive like back channel reference. And, you know, that's, you can't copy that unless you have these people that are, you know, all in on the mission of what we're trying to accomplish here, right? More than anything, particularly in a group like this, which is largely mostly motivated by mission and how they can have more influence on this. Well, it's a really different and differentiated model, but you've also been very prolific with it.

[00:19:47] And so, you know, on your website, you know, talk about, you know, you're not here to solve the glamorous problems. You're here to solve the problems. So, you know, what are the types of things that are interesting to scrub capital? How do you choose them? And what are, like, some of the examples that are having impact out there? Sure. So maybe I'd say first and foremost, what's glamorous to us?

[00:20:14] We find it very glamorous to think about how we change, you know, like the way prescriptions arrive in the United States. Some of the most fun work in any, like, I will just say, like, some of the most fun work is, like, fixing the unsexy things, you know, where, like, real work gets done. Oh, it's just like, I don't know. Call me a geek. I love the unsexy. No, it's so true.

[00:20:38] And look, like, I think, well, you'll, so first of all, scrub is very intentionally diverse in how we invest. Like, our belief is that you need to be to make, you know, we are a performance-oriented firm. We always say it's an and. Like, if this company is successful, it actually needs to matter, right, and do good in the world.

[00:20:55] And we believe it needs to be a performance-oriented investment because, you know, we want this to be able to grow and thrive, not because, you know, people like, not only because people like the mission, right, but because they feel comfortable placing their capital with us as well. So that's really important.

[00:21:12] But in terms of what we invest in, you know, when you're in an industry long enough, as long as you don't become captured by status quo and, you know, you remain an optimist, as we've been talking about, Lori, you start to understand, like, where the pressure points are.

[00:21:28] That, like, if you can effectively poke at it, replace something, change how a group of stakeholders interacts with each other, like, teach a market how they should actually be evaluating whether something has value, which often requires, like, changing how they pay for something, not just how they assess it.

[00:21:43] That is, it's, like, often that intersection, right, like, big unmet need, like, new technology wave, new way of approaching the problem, new product, and evolution of the business model where the really substantial impacts can be made and the massive companies can be built. And, you know, we can take the in Livongo example that we both know really, really well, right, like, that was, that only worked because it was this overlay of this moment where people were so, so hungry to know more about what's happening in their bodies day to day.

[00:22:13] This was long before Aura and, like, all these other products, right, that we now all have on our fingers and toes and, like, our beds and whatever. It was, it was considered kind of nuts, this idea that people who had a diagnosis and were sick, like, should know more about what was going on in their own body and get some support on what to do about that fact on a daily, weekly basis, not only every few months. And, like, it sounds bumpers to say that outside right now, but it was not that long ago, right, when that was considered nutso.

[00:22:39] So, so that demand and need and figuring out, like, a specific product that was served, which was largely just unlocking them, right, to test their own blood sugar initially, but then ensuring that they're the other actors, right, like large people who are paying for it initially and plans and pairs and such, the story we all know, figuring out how to, like, teach them to think about where the outcomes were coming from in this population, where the cost savings were being shown, how to think about a measure ROI, which, again, like, this is not,

[00:23:08] not novel anymore, but it was a big deal, new thing at the time that, like, that company largely, like, framed the market and assessing companies in this way. It took all of those things coming together. So, you know, just directly answer your question, like, we look for companies that is often getting, like, deep into the meat and heart of a gnarly problem and has that level of sophistication and how they are going to, over time, like, really change the dynamics of a market. I love Photon is an example of this, right?

[00:23:37] Like, people are increasingly familiar with them, but, you know, they're offering a different solution to SureScripts, where you as the patient are not, like, totally hands-off on what happens to your prescription, right? But, like, it's essentially a digital prescription. You get prescribed by your, you know, physician or other prescriber, and then you have a ton of additional information on, like, what it's going to cost to fill it at pharmacy A or B. Like, you can move it around, know if it's going to actually be there to be filled when you show up.

[00:24:05] You can just, so it's infrastructure, right? And it changes the power dynamic, and it has opened up a bunch of opportunities, like, to add, you know, marketplace opportunities and other things by changing that, that allows them to have a very different business model than some of the prior solutions to the problem. I love that company. Another one that I love that we've done, conceivable life sciences.

[00:24:26] They're really in the in vitro fertilization space, and they've essentially figured out how to take things that, you know, sound very, like, we could present as very sexy, you know, like automation and the lab and AI and all the things. But really what they're doing is they're figuring out how to address one of the biggest bottlenecks in the IVF process that impacts quality and impacts cost. And that's, we just don't have enough embryologists, and we're humans, and so we're fallible, right?

[00:24:54] And so they're applying, you know, robotics, hardware, software to that problem. And the results are just extraordinary in terms of the reduction in cycle numbers that you need to have a healthy pregnancy. And, you know, but that has required, like, a shift in how people are thinking about bringing them in as much as other pain for it. Well, it's also like diving super deep, super deep into that cycle. What are you looking for in founders and CEOs today? Because the world is changing rapidly. Business models are changing.

[00:25:24] Capital markets are changing, you know, on a regular basis right now. And so what does a founder need? Who are the ones that you like? Because at the end of the day, you're making bets on people as well as concepts and everything else. But that's usually, like, the most important bet. So what is it that is standing out to you in terms of the ones that you're really saying, like, wow, there's something going on here that's investable? Yeah, yeah.

[00:25:48] So, like, I would say similar things to what a lot of other really great early stage investors will say. Like, I completely agree with you. Like, we always say it's about the founder, like, a unique insight on, like, a Bayhart Gnarly problem. And we are looking at the initial execution data and saying, like, we invest in lines, not necessarily dots. And, like, does the line suggest they're going to be able to execute in a really high quality, like, fast enough way, right? And trying to solve this problem and take this market.

[00:26:16] But on the, you know, on the founder side, this is where it gets to, like, you know, some of the principles are the same, even if the specifics tend to change quickly in our industry for lots of reasons. It's still around, like, do they have grit? Like, do they have humility? Like, have they had, like, real lived experience? Or have they really put in the work to deeply, deeply understand a problem? And they now feel, like, life mission aligned along solving that problem, even if they're not, like, wedded to, like, one specific solution, which can also be a problem.

[00:26:46] You know, can they build an extraordinary team, right, that is also really mission aligned and loyal to them and doing, you know, A-plus exceptional work? You know, it's the same thing that's always made people really, really strong founders. Maybe the one thing that for us has changed the most is wanting to see that they've, especially if it's, you know, somebody who's been part of, like, past cycles and successful in past cycles.

[00:27:15] Like, are they shifting the way that they do the work to reflect the new reality where certain things can go really, really fast? And others don't necessarily go any faster, right? Like, I think a lot of enterprise sales cycle, we always joke and say, okay, yes, like, it might take a tenth time in cost to, like, build the product. But, you know, your sales cycle has stayed the exact same.

[00:27:39] And in healthcare, like, figuring out who's actually going to buy it and how to distribute it has often been, has almost always been the real bottleneck. Not, like, can you build the product, right? And how quickly can you keep building a better product? But that is something that I'd say we look at a lot when assessing. There's also, you know, in what you're saying, I mean, what, you know, what has remained consistently true?

[00:28:02] If you're going to do something important and impactful, there really is no easy button. You know, I mean, it's the consistent learning. It's the hard work. It's solving hard problems, you know, if you're going to do things at scale, at impact, in terms of what's possible. There's so many fun things to talk about with you, Dr. Mitchell, in this conversation.

[00:28:27] But maybe as we close out on this Inspiring Women conversation, maybe if you could just leave us with, you've already done so much and you're only at the beginning of what is possible with what you're doing with scrub and who knows what else you've got cooking. But what is your thoughts about what you need as a leader today for all that you know, but also all that you intend?

[00:28:53] What's your advice to others, for other women out there who want to be impactful, who now come with a level of inspiration of it is possible? What have you learned that is absolutely true that you want others to know so they too can have the type of impact that you are having, have had, and are going to have? Ooh, such a good question. I mean, I'd come back to what we talked about early on when it comes to Dolly Parton, right?

[00:29:22] I mean, do the work to figure out who you are and, you know, be shameless and have no regrets, right? And that being how you present yourself to the world and like how you pursue your North Star. I think a lot of women continue to feel that they need to be shaped into the box of other people, particularly women, I'd say that have, you know, straddle the worlds that have kind of sort of strict professional identities like medicine, right?

[00:29:50] And they're branching out to do other things alongside of it or instead of it. And be willing to speak up and talk about the work and talk about your beliefs. And I'll say it's, I am perhaps, it's funny you say, you know, that I'm prolific in writing about these things. I often get the feedback that I should talk more and write more and I'm pushing myself to. But every time that I do, right, it brings the believers to you and the helpers.

[00:30:15] And people want to hear about missions that they align with and they want to get involved and they want, you know, there's so much like hype and froppiness right now, but there's also just immense levels of negativity. And that's not, that may, you know, gather attention and clicks and big comment threads, but that's not really what makes people feel good and what motivates them. So lead in that way, bring the believers to you and don't be shy about it.

[00:30:45] That is awesome. Well, this has been a great Inspiring Women conversation. I've been speaking with Dr. Rebecca Mitchell and Dr. Mitchell, thank you so much. Thanks for having me.