I interviewed Shradha Agarwal, the co-founder and president of Outcome Health, the Chicago-based healthcare technology company that earlier this year raised $500 million from investors such as Goldman Sachs and Google at a $5 billion valuation.
Founded in 2006, Outcome Health is building the world’s largest platform for actionable health intelligence at the moment of care.
Today, Outcome Health’s platform has a presence in almost 20% of doctors’ offices in the United States, and impacts more than 580 million patient visits each year.
In our wide-ranging interview, Shradha and I discuss, among other topics, how to transform an idea into a company, the difference between a good idea and a good company, the future of healthcare, what she learned from failure, her favorite business books, where to find the best Chicago pizza, and whether the Cubs can repeat as World Series champions.
Zack Friedman: How did you come up with the idea for Outcome Health?
Shradha Agarwal: Growing up, I had a passion for bringing people and information together.
While in college [at Northwestern], [my co-founder and now Outcome Health CEO, Rishi Shah, and I] learned of technology that allowed for this information to be highly customized and we wanted to leverage this technology in a meaningful way.
We have each had healthcare experiences in our family and saw the immediate opportunity to improve a large and critical industry.
Zack Friedman: How did you take your initial idea and turn it into a company? What steps did you take?
Shradha Agarwal: The first step for us was to validate whether our customers truly felt that pain.
We spoke with hundreds of physicians and patients as well as healthcare product manufacturers and payers to understand the industry dynamics, gaps and opportunities.
Second, we built the first iteration of our product and focused on sales of it.
We received a lot of rejections initially, but in each of those conversations, we asked our prospective customers what would make them sign up. With this feedback, we strengthened our product and started to gain sales traction.
Finally, bringing the first few people in the team in a thoughtful way is necessary – a lesson we learned much later.
Zack Friedman: What did you do to disrupt the patient experience, and how is it now better as a result of Outcome Health?
Shradha Agarwal: Our vision is to provide health intelligence to support every important decision a patient is considering with their physician.
Today, we impact about about half a billion patient visits annually by providing relevant and actionable health information to patients and their caregivers in the most critical moments of care. We have measured a variety of outcomes – increased adherence by patients, driven by greater understanding of their diagnosis as well as treatment options, as well as cost savings resulting from that.
Ultimately, this means an improved quality of life for a patient living with a chronic disease.
Zack Friedman: What does the future of healthcare look like in the U.S.?
Shradha Agarwal: We have the opportunity to personalize healthcare and leverage technology to assist the physician as well as the patient to make better decisions together.
With 18% of our GDP spent on healthcare currently, 80% of which is on chronic disease management, empowering patients to participate in their own health decisions has great potential for reducing the cost of healthcare while improving outcomes for individuals.
At a more human level, technology has the power of automating much of the clinical workflow, allowing patients and physicians to connect with greater empathy and time allocation for these important conversations.
Zack Friedman: You founded Outcome Health with a co-founder, Rishi Shah. Would you recommend starting a company with a co-founder, and if so, what considerations should be given when selecting a co-founder?
Shradha Agarwal: I don’t know whether having a co-founder is a requirement, but I do think a preference for it can build a strong foundation.
Entrepreneurship is a lonely journey and having a partner in the ups and especially the downs can be beneficial.
To find the right co-founder, it’s important to be self-aware of your own strengths and weaknesses as well as your values and goals. The best partnerships are complementary in skills but aligned in goals and the vision.
Meeting a co-founder can be similar to a dating process – there is no one right place to meet them, but speaking with a wide variety of people is helpful to build a mental model of who you’d want.
Zack Friedman: What did you learn from your biggest mistake when building Outcome Health?
Shradha Agarwal: We have several learnings along the way and many from our own mistakes.
The two I’ll highlight is the importance of building the right team from the start – people who have conviction behind the vision of the company, but are also comfortable with ambiguity in a rapidly-changing environment.
We now look for people with a strong work ethic and demonstrate persistence, have grit and resiliency and believe in strong team loyalty.
Our initial mistake was to hire people for their skillsets and/or experience alone.
Second, a more recent realization, is to drive great focus in your organization – it’s empowering for people to make rapid decisions and innovate if there is an alignment on the prioritization of goals.
You can do three things well or do ten things okay – because resources of time, money, mind share and energy are limited.
Zack Friedman: You have spoken publicly about your immigrant experience. Can you tell us more about your immigrant experience and how it has helped define you?
Shradha Agarwal: In my experience, immigration itself is entrepreneurial – to leave behind the comfort of the known to explore uncharted territory.
There is risk and uncertainty built in but also a pursuit of something better. The constraints and uncertainties also build your muscle for resiliency.
This country is also built on an ideal of meritocracy, which attracts the most talented people from around the world.
Zack Friedman: What are your three favorite business books?
Shradha Agarwal: I love reading books and in fact, had that passion since being a little girl that led me to my first business; story for another day.
Recent books that have inspired me are Shoedog by Phil Knight and The Hard Thing about Hard Things by Ben Horowitz. I also love reading biographies of leaders from other fields – such as Phil Jackson’s book, Sacred Hoops.
Additionally, vulnerable conversations with your trusted advisors can help gain deep insights.
Zack Friedman: What advice do you have for an entrepreneur who wants to create the next big thing?
Shradha Agarwal: Instead of looking for an idea for a business, identify a problem that is worth solving – is deeply felt, at scale, and has urgency to improve.
Also, know why you’re signing up for this tumultuous adventure called entrepreneurship.
Finally, when you do envision a solution, make sure you have conviction behind your vision because it will be tested several times along the way.
I also want to highlight the difference between a good idea and a good business – the latter has to have an eventual path to profitability for sustained scaling and growth.
Zack Friedman: What advice would you offer to someone who wants to join a tech startup?
Shradha Agarwal: If you have an entrepreneurial DNA but are not ready to (or have already attempted to) start your own business, working at a tech startup gives you many of the upsides – the autonomy to make important decisions, the opportunity to share something innovative, the ability to collaborate with a team who share your passions, while reducing the pressure to own functions you may not want to – whether that’s accounting, HR, marketing or engineering.
In order to thrive in a tech startup, you must have a strong adaptability to rapid change.
Zack Friedman: You’re an avid traveler. What’s your favorite global destination?
Shradha Agarwal: I was in Amsterdam over Labor Day Weekend and fell in love with the energy, diversity and beauty of the city.
I love traveling and have a hard time picking one destination.
That being said – nothing like home: Chicago is the best.
Zack Friedman: Speaking of home, where’s the best pizza in Chicago?
Shradha Agarwal: Until recently, I’d say Lou Malnati’s, but this new place, Bonci, is the first American location of a Rome-based pizzeria – it’s simply addicting.
Zack Friedman: Congratulations on the Cubs winning the World Series. Can the Cubs win the World Series again this year?
Shradha Agarwal: I have strong conviction – yes.
Zack Friedman is the Founder & CEO of Make Lemonade, a personal finance site with free comparison tools, calculators and reviews to help you make smarter financial decisions and save money.
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