An emergency room physician for the past 12 years, Dr. Robert Mittendorff joined Norwest Venture Partners eight years ago as a healthcare investor; the firm invests in a number of healthcare startups, including Talkspace, which raised a $50 million Series D last year, and TigerConnect.
As the COVID-19 pandemic spreads, Mittendorff is spending his weekdays with portfolio companies and weekends working with Kaiser Permanente in San Francisco. While he notes that his medical colleagues are “bearing the brunt” of the pandemic by working full time, we wanted to hear from someone who has a foot in both the investing and the healthcare world right now.
In this interview, he discusses what he’s learned from both roles, how it has influenced his healthcare investments, and offers his predictions regarding which companies will fare the best in the future.
This interview has been edited for length and clarity.
TechCrunch: How did you get to where you are today?
Dr. Robert Mittendorff: So, my journey to being a venture capitalist at Norwest and investing in healthcare companies as well as an emergency physician was really a parallel set of paths that overlapped and that cross every once in a while and now usually on a daily basis.
I started off life as a biomedical engineer really focused on wanting to be on the side of innovation and on the development of technologies to help human health. I knew early on that I wanted to be on the business side [of that], but it was important for me to understand and really be deeply in touch with what it was like to be a provider.
The journey started out going to engineering school, medical school, and then business school in the middle of medical school. I trained at Stanford, which really exposed me to county hospitals, which are probably going to be the more challenging situations as the weeks go on here, and then to Kaiser Permanente. And then, of course, Stanford, I was exposed to San Francisco General and then the Santa Clara Valley Hospital. I always practice part-time following up so it’s been 12 years as an attending, practicing part-time as an emergency physician.
In the venture space I saw an opportunity to really help select entrepreneurs and markets to grow them to a higher impact state.
Can you tell me a little bit about how your hospital shifts have helped influence investment decisions or just your perspective in general?
The part about practicing is that it keeps you a little bit more practical when you think through how technologies are adopted. I was involved informally in marketing robots that cost about a million dollars to hospitals. We sold a little over 100 of those globally. So I’m very intimately involved with how hospitals think about consuming innovation and adopting it and deploying it. It’s the basic knowledge and experience as a physician, it’s the hands-on experience and the time I’ve spent as an operator selling to hospitals that gives me a lot of perspective right now. And I have to admit, I am utterly impressed at how amazing the U.S. health system, and the hospitals in the U.S. system are working to solve this. And for the last month, largely on their own with very little, if anything, federal support or leadership.
What have you been seeing on the ground during your shifts?
We are preparing the capacity for what we know is coming, which is a growing number of cases with a growing severity of respiratory symptoms in the coming three to four weeks. So that’s what we’re seeing. I’ve been just amazed that the doctors and nurses, I mean, these are largely voluntary professions. But all these people took an oath, and they’re all showing up for work. And they’re doing amazing jobs. And I’m sure they will continue to do that in the next month or two.
I’m imagining your day-to-day must be emotional right now.
Well yeah, I think it is for all the doctors right now. Certainly my friends in New York that are not living with their families.
I have a seven-year-old daughter and she’s out of school right now and, you know, I’ve made the decision after a long amount of thought about it that I will be around her during this time. But I am obviously very careful during my shifts. But I think yeah, there’s a lot of challenges personally and professionally. I do have to say it’s been amazing to see that, for the most part, people are following the government’s recommendations to quarantine, which definitely, I think, will have a major effect here.
The level of innovation I’m seeing in every company as they try to think through, can they do something to help? Is there a way to create a product or service to help? Can they donate, can they mobilize, is, you know, very inspiring from an American capitalist point of view. I think California’s leadership has been stellar on the state level, but in the absence of federal leadership until like the last two weeks, it is an amazing thing to watch. We have mobilized the most creative country, I think, on the planet and we are getting true innovation out of this. It is not without our challenges in the coming weeks or months, but I wouldn’t want to be anywhere else in the world, frankly, right now and dealing with this.
I’m happy to hear that. It is inspiring to see everyone raise their hands in Silicon Valley and help, even if they aren’t forced to.
I think most entrepreneurs in Silicon Valley and in healthcare tech are entrepreneurs that are trained to be mission driven. And this is just another mission for them. So I think what we’re seeing, we probably won’t see this across the U.S. We’re seeing it in a lot of areas. But certainly in Silicon Valley, almost every one of our companies is thinking about not how this will affect them, but then how can they help directly or indirectly develop a service that could help in any aspect? Because it’s obviously not just the healthcare problem, it’s clearly an economic problem. It will be a social problem, as well. So it’s very inspiring.
What are you telling your portfolio companies right now in the healthcare space?
I think each one is different. A month ago we said, you know, every one of our companies needs a two-year plan that incorporates how COVID will affect their business, positively or negatively. How will it affect revenue? How will that impact the cost of goods?
I think some companies will have headwinds during this time. For example, if you’re providing a service to employees that are expected to be on-site, that’s going to be challenging right now. However, a number of our other companies, I have a company that literally their software platform is used by hospitals for the development of patient-flow practices and to manage search capacity. So they already had a platform. It’s in 60 hospitals. They’ve built a free COVID model.
And so I think the point of healthcare companies rolling out new initiatives is not for PR, or to kind of like convince the public the point of the business, but it is actually to help hospitals operationalize when their demand will hit and be ready for it. Because it takes a couple of weeks to put the logistics and supply chain into place.
I’ve heard often that it is hard to adopt technology in hospitals because the tech prices are high and hospitals already have strict budgets. And I just wonder from your end what your thoughts are on adoption?
I think if you’re relevant in this situation with COVID-19 to a hospital I think there is an opportunity to help out and have impact. If what you’re trying to sell a hospital right now, for example, is something that has to do with elective procedures for example, you’re probably not going to get an audience because most hospitals are not performing elective procedures right now. Again, it’s very bespoke, it just takes some nuance. I think, if you require a lot of integration for your product and you’re not already in hospitals, it might be challenging for a while, because frankly, all hands are on deck for COVID-19 in most urban areas right now. And that’s what CEOs are thinking about.
From the telemedicine side, are you feeling more hopeful for it given the rapid implementation of it during this time period? Equally as hopeful from before?
Telemedicine I’ve always been bullish about, if used properly. This pandemic is the single, you know, biggest driver of the intelligent use of telemedicine since telemedicine was invented. And I think what we will see is that physicians and patients and nurses are adopting telemedicine because they still have to treat human disease in the midst of a pandemic. And telemedicine is a wonderful set of technologies to do that with. I think that once we have shown that we can do that for a variety of different conditions, we will have a hard time going back to bricks and mortar. I would just liken it to Amazon purchases. We’ll never go back. Once you figure out that, hey, you don’t actually have to go to the store to buy razor blades.
You said you like telemedicine if it is used properly. What is the wrong way to use telemedicine?
An abuse of telemedicine is when you are trying to diagnose or treat a disease that requires a physical exam without a physical exam. For example if you have an ankle injury and my telemedicine consult is by phone without even video, that is the wrong use for telemedicine.
To close, what is your best advice for startups more generally right now trying to grow in this environment?
My best advice is to make sure that your business plan is relevant in the pre-COVID world, and also relevant in the post-COVID world. And what I mean by that is, you know, there will be changes in business, but we’ll return to some extent to where we came from. But what can be virtualized in business will be virtualized during this time and many things will probably stay that way. E-commerce will become even more prominent. We’ll see things like purposeful socialization and purposeful experiences instead of people entering the social space without having a reason, they’ll do it for purpose.
And I think we’ll see all forms of training become more virtual than we probably would have seen before. So I think whatever business you have, if you can see it surviving in both worlds, or having some type of a play where it works in both worlds, I think that will make investors more comfortable than say, for example, if what you’re selling is a non-essential service that has to be delivered in-person.
