Allon Bloch of K Health: Reimagining Primary Care with AI

Hans Tung  02:23

Okay, I got to ask the most obvious question. You have 2 IPOs, each company worth billions of dollars, one is over $10 billion. Why are you still working?

Allon Bloch  02:35

That’s a question that my wife asked me as well, I think I enjoy it. I think it’s fun. What would be more fun to try and use resources and technology and work with a lot of smart people to try and solve big societal problems? So I couldn’t think of anything better to do with my time, during my awake hours. I do enjoy being with my three kids and hanging out with my wife and my friends. But this is something that is tremendously exciting and I am tremendously passionate about. So I’ve never woke up in the morning and said why I’m doing this. I just spring out of bed and I enjoy doing it.

Hans Tung  03:16

Okay, you’re not a typical person, we get that. I can ask you a question in the industry you pick or when we did each of these three startups. I can also ask you questions in as you do it for the third time, what lessons do you learn and the mistakes you made along the way from the first and second time? I’m going to start with this sort of industry section first. How did you decide to go after Wix, and then Vroom, and now K Health?

Allon Bloch  03:43

I think it’s a little bit of an evolution of my thinking of what interests me as a person and what I’d like to spend my time on. And I think it’s a little bit opportunistic around people that I partnered with and business opportunities we had. So when I joined the Wix founders as a co-CEO in 2008. First of all, after seven years being a VC and before that I was in McKinsey. So the first obvious question is what can I do. I didn’t know if I could operate. I didn’t know if I could work with engineering, product, and marketing. So there were some basic questions for myself, what kind of CEO am I, etc. I partnered with people on you well. So on the opportunistic side, there were great people that were building what I thought could be a groundbreaking product. If I showed it to you today, it looks pretty simplistic compared to where Wix is now. But in 2007 or 2008, Wix was groundbreaking. Bessemer published their investment memos in Shopify. They list Wix there, look at it, that was cutting edge in 2000. But it wasn’t. The team was just a very strong technology team. We didn’t have a business model, or product, or users. There were 10 people, there was no venture backing. But I thought it was an exciting opportunity. And I kind of had the itch to see if I can take this step and be part of building something as an operator. But I didn’t plan too much ahead. I think if just tie it to your question, the stuff that excites me is making big changes using societal changes and using technology that are very pro- consumer. Most industries calcify around the legacy incumbents.  They start their founders, whatever they doing stuff, they have good intentions, but then they focus on their own oligopoly. They use regulation in their favor. And they have really high margins. It becomes a business, somebody needs to manage the business, it’s typically public. It forgets that it needs to focus on consumers, and it doesn’t like to be disrupted or change, because cell phones appear or computers appear, or people want to control their data or whatever. If you look at  Wix, Vroom or K, the one unifying thread there is, we’re using data and we’re using technology to completely eviscerate the existing structure. I mean when Wix started, your alternative for building a website would be weeks of building a website. It cost you probably 1000s, or 10s of 1000s of dollars, and you couldn’t change it and it sucked. So paying 10 bucks a month, or 20 bucks a month, or five bucks a month to build a website that you can build on your own yourself is liberating. The same thing was car buying. Going to a car dealer is like you have a car you want, but you need to go through a car dealer to buy a car. I don’t need to explain why that is. Just you know, it was a horrendous experience, and probably still is the most part. And then K Health is a more ambitious project. And we’ll talk about that, but, but it’s again, about giving consumers control about their health journey, about what they need to do, and putting the consumer in the driver’s seat. So in all three places, that’s kind of what’s driven me. And again, the little bit of opportunistic partnering with great people. I always need to find people that I want to work with, to enjoy them.

Hans Tung  08:02

The next question will be, what are the some of the lessons you learn along the way? How to tune in for the third time, makes you see things more clearly, avoid some of the mistakes that you made earlier, and make improvements on starting a tech company?

Allon Bloch  08:19

I made so many mistakes that I lost count.

Hans Tung  08:23

Just the notable ones.

Allon Bloch  08:26

It will take the whole podcast. But I think first of all, I’m 50 now, and I was in my late 70s when I joined Wix as a first time CEO. So I was a little bit older than the 28-year-old CEO. But you do change with life. And you do focus and emphasize on different things. I do think the more life experience I have, I do value more life experience and pattern recognition. By far the biggest focus is always on people. How do you manage people? How do you inspire people? How to get people to care about the company, and deliver great stuff, not because they get paid, but because they genuinely want the company to be successful for its users. I think to me, by far the number one thing as a CEO. People are complicated and technology is easy. Especially if you can bring great technologists around the table. The other thing is, I’d say 80% of what I think about is who are the right people. How to bring them there.? How to motivate it? How to let them loose and do a job much better than me? And then I think there are always two questions that are always critical in every industry. There’s no playbook. You can’t call Bill Gates and say what should I do? But you know what is your minimum viable product now, and then you know the next iteration. Because you’re not going to be able to spend 5 or 10 years and build a full-blown health system and then ask people what they think about. So you need to put something out there, that’s good enough, always agonizing. And that’s where you get it, where you get drowning in the water.

So that’s where I spend a lot of time thinking about, like where big mistakes happen. And the other thing is, fundamentally, my biggest competitor is not my competitor. I think competitors often actually provide a lot of value by educating the industry, educating the customers. You have a joint marketing budget. Educating people to buy cars online and people would go to one or another. 99% of the of the car business is still traditional car dealers. So your competition is inertia. And people are busy. And now you’re trying to get time and attention and saying, Hey, I’m really interesting. Look what I built. I’m going to give it to you in a great value proposition, maybe even I’d give it for free. And you want to earn the right to be in front of a lot of users. All the businesses that I try to create a mass market, to get everybody to use the products and break through that without paying a huge toll to Google or Facebook. To go through that is something critical. So that’s biggest mistakes in my mind business model, you have time to get it right, and you’ve created a lot of value, then the revenue will follow and the business model will follow. I don’t think failures happen there. But getting it right on kind of core initial product, where you can do so many things you want to do, and then getting it right. How to think about distribution to me is where I spend my time, so add recruiting into that. All the organizational issues and organizational mistakes or our lack of attention to things, to me, that’s  where I made, by far, the biggest mistakes. But that’s also the reason why Wix,  Vroom, and K have become successful fundamentally. We made more correct decisions than mistakes collectively.

Hans Tung  12:41

One follow up question before I let Robin ask you more about K Hhealth. A lot of people assume that if a founder is doing for the second or third time, it’s a lot easier. In some sense, yes. You have pattern recognition capability, you have more experiences. At the same time, psychologically to bring yourself to do it a second or third time from scratch is not easy. And people agonize over that. Whether if I’m talking to Max Levchin at Affirm or Lei Jun and Xiaomi. They do it through sort of soul-searching process before they want to tackle the second or a third startup. And once you have that, you’re starting from zero to one again, gaining the first product version out is extremely tough, because you’re worried like, man, is my name attached to it? If it doesn’t go well, right, everybody’s making fun of it. It’s gonna be a lot of pressure. How do I know this is good enough? And psychologically how do you manage this kind of anxiety, and sometimes even self-doubts when you did for the third time in K Health, which is extremely different than the first two industries you tackle because healthcare is a lot more complicated, a lot more regulated. The complexity is just so different. How did you get ready for the third time>

Allon Bloch  13:50

So first of all, you realize I’m going to turn the tables and asked all the same questions, how you think about this as you were both born in 1970.

Yeah. I don’t have an answer to that question. I would say that soul searching is a critical stage before Vroom and K. I spent five or six months thinking about the opportunity, talking to people, but not too much to people in the industry, because they try to perfect the house, it needs to be 10% better, 10% cheaper. And plus, I didn’t run Cleveland Clinic before, I’m not even a physician. Why do I even understand medicine? People lecture me, it’s competence destroying. So I talk a little bit to people inside, but I try and listen to the nuances. I predominantly read books and talk to people who are not in the industry and try and get them excited about ideas. I do need to brainstorm with a couple of people. Then you build some kind of theory about what you can do. That’s completely different, and a little bit stupid and crazy. And then I start building a conviction. I typically need a vacation in the middle. And so I was in the Canyons before K. After three or four months, I decided that I want to go ahead, and do it. I don’t agonize about the risk of failure. I don’t think I’ll fail. I just think there’s no chance in hell I’ll fail. It’s the equivalent of a person thinking they’ll live forever.

Hans Tung  15:39

So you are indeed atypical

Allon Bloch 15:41

Yes. But I built the confidence. I think I was always rebellious by nature, but I built the confidence to apply this to bigger and bigger problems. As you said, healthcare is probably as big as it gets up there, right? On the list of things, I don’t think I would have gone to do healthcare 10 years ago. I was really interested in medicine and healthcare 10 years ago, but I wasn’t ready for it. So I don’t have anxiety on this. Do I wake up sometimes in the middle of the night thinking about certain things related to work? Of course, then I go back to sleep again. And I never look at it as failure. It’s just kind of what I need, to do.

Robin Li  16:27

Need to learn from that mindset, for sure. And given that, you’ve wrote about this before. But we’d love to hear the origin story of K and, kind of how it all started. And I think it has to do with some personal experiences, too.

Allon Bloch  16:43

Yeah. I think the germ of the idea was a series of conversations that I had with Adam Singolda, who’s the founder and CEO of Taboola, who’s also a friend that I’ve known for many years. And I think we always kind of wanted to work with each other. And again, back to the opportunistic, he’s running a really big business and has a lot going on there. We have shared experiences around lack of control around your diagnosis and treatment when you go and see a doctor. So it was kind of that basic, can we find a way to get health information? Initially, just information. As if you’re empty, the best doctor’s mind was actually seeing the doctor. Because even when you go to the doctor, the doctor is sitting there, they’ve got the stethoscope there, they’re talking to you. It’s big Latin words. It’s scary. You’re a little child, you’re going there. Even if you’re super successful and super sophisticated. You don’t know what’s going on. It can be scary. You just follow instructions, you don’t know, You cannot challenge the doctor, the alternative is opening web and searching via Dr. Google. It is probably better just not to open it because it just filled with wrong and scary information. But even if you somehow spent hours researching PubMed, it doesn’t mean you necessarily understand it. So just giving control. I think both Adam and I like to have control, we control what restaurant we eat, specifically how we take our vacations, how we manage our money. Why can’t we control our health? Why we feel like children when it comes to being in front of a doctor, when I have a rash on my head. And if you live long enough, you see mistakes, so we were both comparing notes on mistakes. And my dad personally had Afib, short for Atrial fibrillation, which I didn’t know anything about it. He was taking Coumadin, which is a blood thinner and he had a stroke, because the drug failed. And for stupid reasons there’s a way to monitor a KPI, a data point called INR. Because if you’re off there’s a risk of blood clots and coumadin is impacted by food. We didn’t know all of these things. So my dad moving from being a super healthy 69-year-old guy, who looked great and was traveling the world and working and everything, he nearly died. And then he survived and he was independent, but he had speech impediments, he was dragging his right arm. But it was based on a series of healthcare decisions of that, okay, he has Afib . I don’t think he was clear just how risky it was for stroke. And there was a device that you can measure your INR and you can buy it on Amazon. The customer doctors who decided that he should measure it everyday, there was no discussion with him, I found that pathetic, frankly. It’s really like somebody makes your house decision based on some kind of lowest common denominator, maybe because it’s too expensive to send the device to everybody. So that’s kind of basic control. And so we expanded the conversation. We had my co-founders Ran Shaul and Israel Roth and they became core to that conversation. Neil Brown, who was an ER physician at the time, joined us later. He’s a very experienced ER physician. We kind of in that group setting and talking to a few external people. We started asking ourselves some basic questions. If we want to provide people with health information, my view was people have three basic questions. It’s kind of a global thing. It’s not a rich thing, or Western thing. People have three basic questions around their health, so they head hurts or they stomach hurts, or they’re curious, or something’s concerning the question of what do I have? What else could it be? And what are all the different ways to treat it? So our bet was that, if we got our hands on a big enough and rich enough data set, we can train a machine to do differential diagnosis and treatment.

And there was an existing world of symptom checkers, but we are all rule base. So that was kind of the early days. We spent a lot of time defining the core tenants, we wanted it to be an ability for people to get unbiased information, we wanted it to be based on what we call people like me, which is really, technically a dynamic cluster of people that are relevant for your situation, because that’s how doctors think. So we wanted to compare your health experience to other people. And we wanted it to be not some kind of high level, oh, let me throw darts and guess what you have, but a very specific conversation, the best conversation on the planet around your health. And our bet was that we could do this better than any doctor for free. If we got our hands on the right information, and were able to train a machine to understand the language of medicine. So that was a core of how we started. Along the way I got smarter, and also my co-founder  Ran Shaul. We got smarter about the US healthcare industry and the general approach. Because medicine is a practice in healthcare industry, you agree on how much you pay, who pays for it, what procedures you need, and how does that work. So there’s a medical protocol, but also somebody needs to pay for all that stuff, because a lot of it is expensive. So we realized the US healthcare system is out of control. You get what you pay for, like Gucci or Ferrari. For certain things, you get what you pay for, at least there is a perception and you’re getting more. In healthcare in America, you just pay more, and people would say to me, well, there’s better end of life care and better oncology. It’s true, but most of what people need is not that, they need primary care, they need chronic care, they need prevention. And here in America, we just pay, how much do we pay? Probably three times more than what equivalent people in Europe pay and they live longer in Europe if you do one on one comparison. But there is a system here. That’s a definition of an anti-consumer system that’s just really, really expensive. How much is wasteful care? I don’t know. 1 trillion? Those are big numbers. It’s not a billion, it’s a trillion. So add those two things together, how can we give control and how can we penetrate this healthcare industry and create better medicine and a different price point was our guiding light into this. And we are still thinking about it. But of course, where our thinking has evolved quite a lot since then.

Hans Tung  23:46

Right, which brings on very important point. You need data to train AI, to train the system, to come up with a better recommendation. We see that time and time again in multiple verticals. But in healthcare, it is just so hard to get your hands on data. And one thing that you guys do distinguish yourself from Dr. Google and other self-diagnosing apps is you have real anonymized medical records. How do you get your hands on data? And what’s that journey like from when you started in 2016/2017 to now?

Allon Bloch  24:21

Well, in summer 2016 or late 2016, we would look at people who published articles in science and nature around using electronic medical records EMRs for predictive capabilities. And we’d call them up and say, Hey, where’d you get data from? Can I hire you? And very quickly, we notice that they typically use claims data, which is what is written for in order to charge insurance. It’s a little bit different from the underlying raw data. And then also, it was just very limited. Very few people had access to raw doctor’s notes, and if you did, it was 1000s. And we wanted millions. So we were like, okay, how do we go pay borrow beg steal away into a large data set? People tell me in this country or that country they do it. If somebody digitized it in certain countries in Europe, they’ll have digitized a big chunk of their healthcare information. It doesn’t mean it’s available for you at the press of the button, because a doctor’s note could be at a free text note. For example, 32-year-old male with stabbing stomach pains on the right side or left side, the male is diabetic or not diabetic, taking certain medications, came back from a certain country, the pain is associated with vomiting or nausea or negative symptoms or around death. So an incredible amount of detail and whatever the doctor wrote was typos. Now, you’d need to first anonymize it. And then you’d need to normalize it and ETL it, and then you need to build an ontology. In my experience, nobody’s done that for primary care and chronic care. My head office to Maccabi, the HMO in Israel, which is a structured pay provider that about two and a quarter million Israelis belong to, and they were willing to take a bet on us. And we built this full technology stack. The stack, they had the data digitized for 20 years. So not only 2 million people, but over a long period of time. But they were willing to take a bet on us. We were a little bit lucky. They were thinking, okay, we have all this data, and we want to partner with companies who are going to create a lot of value from the data. So that gave us our start, it didn’t mean we can build anything, it didn’t mean that consumers would understand what we build that, it gave us our start.

Hans Tung  27:01

What are other breakthroughs that came along the way that get your hands on more and more data that give you more power?

Allon Bloch  27:07

I think a lot of it is how we define what we’re trying to do in that version one that I said, which is not to focus on a super rare condition that no reasonable doctor would consider for that first diagnostic visit. We focus on acute, and the first doctor visit. We didn’t focus on our oncology or cardiology, we focus on an easier problem, within a matter of days, or maybe weeks. You could know these ER hospital conditions or just primary care conditions. We focus on that kind of mass market. So we were able to build an ontology that’s richer than any other public ontology out there by an order of magnitude, as our machine understands medicine, and understands logically, statistically, and semantically what is having or not having a thyroid. How does that impact all the other parts in the body in terms of symptoms and the attributes of the symptoms. So it would be not only a headache, but a pulsating headache on the right side in the morning, tied to a medication and tied to background and medical condition. Then also, how is that tied to diagnosis and treatment. So when you throw that into the mix was gender and age, to me that was kind of core engine, it got us started. We were lucky again, also to define the right technology leaders, data science, and engineering. So we’re able to build this initial ontology and classifier with some really small team. And it took us just over a year to put this good enough product in the market and get going. Now we have many data sources, we also have a lot of our users to use it, so we can learn from our own data. So we place it in a very different thing. But at the time, we just had an information layer, we didn’t have a services layer, we didn’t have doctors working in our platform. That happened later.

Robin Li  29:12

I remember visiting your office, and you’re telling us that story. For many years, consumers and the healthcare system were just notoriously resistant to innovation brought by tech in general. And like you said, your biggest competition is inertia. I remember when COVID happened, just earlier this year, K shot up in the charts. Do you see this behavior of consulting with an app and using K become a norm in the future? Or how do you think that this was changed by COVID at all?

Allon Bloch  29:52

I think possibly, we’re witnessing a massive dislocation and massive change, because even hospital groups are saying to me many things that they did in person, they realize that they can do better remotely that they don’t read people there. But I look at it and say, very obviously, for anybody who’s lived on this planet, if you have any kind of acute need, because your head or you’ve got a rash or something scared, for example, you’re afraid you’ve got COVID. You don’t say let me wait until tomorrow, let me wait for three days until I see my doctor. Now it is intent driven. And right now you might feeling great, and in two hours you have a headache, the worst headache in the world, you don’t say, let me go and sleep and I’ll just shake it off. You might take a painkiller and if that doesn’t work, you want to be in front of a doctor and in front of information. That’s reliable. So for me, doctors work in certain hours, and you can’t get in there right now. Maybe you can beg, maybe you know them. Maybe your cousin is a doctor. But that’s not scalable. So the most basic level is can you get information? 24 hours and  seven days? And can you resolve that problem? So it’s not only my headache. Is it COVID? I’ve got a fever, maybe it’s a flu, maybe it’s COVID, maybe it’s Lyme disease, maybe it’s something else. But you want to be able to resolve it right now, ideally, within a second a minute. Certainly not in an hour or a day. So that is that is quite powerful. And I think people are saying, okay, if I can resolve my health issue right now, whatever it is big, small, acute, or chronic, I’ve got a small question, I’m afraid of a life threatening thing, I want to resolve it right now. So anything that’s not an ER, not an emergent condition, like a heart attack or a stroke. I think it should start from your phone from wherever you are remotely. And then escalate based on the need. I don’t think we’re going back like people will say I love my doctor, and they’re great. Maybe their doctor is great. But I don’t think people have any ability to know if the doctors are great. There’s some commonsense things, but great doctors are also very busy. And I just think that people are ready. It’s the same thing I’m seeing Vroom. People are saying why going to a dealer? Why do I need to have somebody haggle with me? So that kind of capability is, once you move over, there’s always nervousness. How can I get reliable information and trusted information? Is it right? Is there a doctor on the app that can rally within minutes to help me get a prescription and diagnose me and treat me? But once people do it, people love it. I don’t think people will turn back. And the other thing in America, as I said, healthcare is just too expensive. And a lot of the stuff that happens in the primary care clinic is wasteful. You go in multiple people talk to you, you fold multiple pieces of paper, who knows where it goes, but it’s handwritten. And if you’ve seen my handwriting, it’s horrific, so you can’t read what I wrote. I write again and again the same information, I give them the same HIPAA declarations who’s not reading through. I speak to a nurse, somebody takes my blood pressure and my weight, whether or not I need it. I’m wearing clothes as I’m taking my weight at some random hour. And then I speak to the doctor again. After speaking to the nurse, doctor doesn’t have a lot of time. A lot of that stuff is, you waited, maybe somebody sneezed on you. And it was the next day, most likely your alternative is ER or urgent care.

But if you think of the other thing that we can do with data, we can actually personalize it, not as a slogan. You can create continuity of care. Every time you come back from China, Hans, you have a set of symptoms that appear every two or three months. They appear three or four days after it’s here. We’re tracking it. And by the way, this is what people did around dealing with insomnia from jetlag, to me it is the most generic thing. But people are unique, we’re all connected but we’re all unique. So how can we create this 1 billion people house panel? If you read the health section in the New York Times, or the wellness section, there’s still debates of whether fat is good for you or bad for you. This is the basic debates on cardiology and prevention. So how do you build the ability to follow people and really learn for the benefit of everybody? And I think that’s where it becomes magical. It’s not more efficient, or right now that stuff is great or is cheaper. Google ways Amazon capability just to get better over time, because I think we deserve it. So I’m gonna argue that yes, if you’re poorer and you live in a poor country, and you don’t have access to doctors. K can be really helpful and I want to be there. But I think if you’re rich and live in a big city in America, doctors make mistakes. They make mistakes around lyme disease in New York all day long. That’s not a new condition. So I think everybody would benefit from this and everybody was benefit, if there was a way to anonymize, the sharing bet you can learn.

Hans Tung  35:25

There’s never any doubt about how your vision is the best way to go about doing things, for sure. I think with COVID-19, it makes it a lot easier now for hospitals to work with you than ever before. What did you see during COVID-19, the sort of benefits that you didn’t anticipate to have this quickly? That will allow you to realize vision much sooner than before.

Allon Bloch  35:53

I think there is more open mindedness to change because, first of all, everybody moved to telemedicine. The smart doctors and healthcare operators realized that there is one thing to do which is doing a video call. The other thing is really learning from the data. So people approached us, stuff that I thought would happen in 2025, and it is happening now. It doesn’t mean we will be able to roll out the solution today. But I think the next year or two, there is going to be accelerated impact on customers, or on users. Because a lot of what happened in digital health previously was concierge e Qt. It wasn’t really impactful, it didn’t make a difference, or it was pretty basic and a little bit better. It was mostly incrementally if I am being kind, we have a really inefficient healthcare system, so let’s build a mousetrap and get people. It’s not language that we use. I think there is a big mind shift. I think most people are still sitting on the sidelines. They want a telemedicine solution to me, that’s still on the sidelines. But some healthcare groups and operators were there before COVID. They came to us in late 2018 and started speaking to us. There are a couple of executives. They’re also under pressure  to continue to innovate on their side. And then I think of some of the hospital groups, they are there. But bearing in mind that data in healthcare is not typically used for health, which is a big statement. It’d be the equivalent to Google saying data of user behavior in search is not going to be used for our search engine, we’ll just use it for ads or billing. Data in healthcare is used for billing. And it’s used for workflow. Very few people access data to say, how to improve health? Now how do I sell more stuff? Or opcode? Or good stuff? There’s a lot of research. But it’s not using systems like K. So I think that’s what will separate the men from the boys or women from the girls. For that matter, it’s not just about telemedicine or remote care anymore. I think that’s a foregone conclusion. And when it’s 10% of the market, or 80%, it will be significant. I think it’s kind of next phase. Have you now built something that really makes a difference? So we try and focus when we talk to partners, or partners who kind of intuitively understand that and are not looking just for the basics.

Hans Tung  38:52

Yeah. At the beginning of the COVID-19, we exchanged notes and emails, and we chat about Teledoc and also the Livongo. And I personally buy quite a bit of stock on both and obviously they have done well, but you said they are legacy, and K will be even much better. Explain to our audience how is K different? And What differentiate it and do even better than what’s already available in telemedicine?

Allon Bloch

To me same telemedicine is like car phone. You remember the car phone in your car and move up. And that was innovation. Telemedicine, 15 or 20 years ago, it was innovation. You can speak to a doctor when you’re not in the office. You’re a traveling salesman and you need a medication or you’ve got some kind of after-hours urgent care. I think that’s how telemedicine has worked. For me, it’s not about talking about other players that their solutions are helpful. I think we’re taking an approach of shaping how do we rethink primary care, and information, and doctors, and drugs, and tests. And by the way, also chronic and referral to specialty and all that kind of stuff. How would we build it in 2020? It’s not just about whether you video or text, what we’re seeing is most of our users say that they love texting with their doctors. First of all, they can do it while doing other stuff. They don’t need to change anything and  they can be wherever they are. So first of all, if you’re under 40, it’s probably easier than opening up a video. How many times you open up a video call with your friend as opposed to texting? That’d be the ratio of about 1% of the time people opening up video consultations on K, 99% of text. The other thing is, you feel much more anonymous about text. You can get confidential stuff, there’s less biases when you don’t see the person. Doctors are also human and have an biases. It’s all that kind of stuff. But I think you will see all this for the most part at hospital groups. And the large providers are implementing solutions that are 10 or 15-year-out and are implementing some voice of IP system today and say I can speak on my phone. I can use my computer as a telephony device. Great.

Imagine Zoom, learning how to make your conversation better. But it’s kind of Zoom versus kind of some clunky voice over IP from 1999, where everybody was excited. And there was tremendous jitter. I think that’s kind of the gap. And I think people are thinking about it, there’ll be other people thinking about it. And they’re all approaching it. For the most part, what I’m seeing is people start with their legacy assets, which over the years, I proposed there a question. That’s the one thing in the beginning. I used to fret about incumbents. We have billions of dollars and have distribution and have a brand. Maybe it’s not a left brand, but they do have the awareness, kind of knocking me off my feet, then they never did. Never. And the reality is they are starting from point of solving a problem, it is not a blank piece of paper, or a whiteboard. And how do we build something for consumers that is just what consumers need? And then we think about the money and everything else. They start with a legacy asset. I own a drug store, I’ve got some physical location. If people don’t need to come in, it’s always going to be more expensive for you to maintain that physical location. So unless you need to see them in person, which you don’t most of the time. It will be the equivalent of Tera records, going around and saying that people buy CDs, but occasionally, I’m going to let them also listen online. It doesn’t work. You do sometimes need physical locations for testing and for stuff like that. But most of the time, you don’t. So you’re going to start with a high cost structure, you’re going to focus on how to make sure all the doctors are getting pick. You focus on the wrong questions, which it’s gonna be hard to compete with solutions like ours if they focus on the wrong questions. Even if they have great press releases  and big store openings.

Robin Li  43:57

That’s actually a really interesting point that you brought up. Doctors are consumers too. And they want to make it easy for them. The same way that consumers want health care easy as well. But one thing you mentioned was, in case you can text a doctor. But as far as I know, doctors are not necessarily incentivized to go that route, because the billing codes don’t reimburse doctors for texts, as opposed to, maybe visit. So how do we get around that model, especially the way the US healthcare system reimburses people, or reimburses doctors the way they do

Allon Bloch  44:37

So that now you get to the complexity of healthcare. I’m going to share some, but not all of how we think about it.  I tend to think what can I do in direct to consumer? What can I do with Anthem? And what can I do with other future partners in terms of getting distribution and getting paid for us? But I don’t sit there and say,  a doctor visit in America is about $150 exchange between the insurer paying and your copay. I don’t sit there and say, how do we get that for $150? So it’s less of a question we asked, we need to have a profitable business model if you want to stay independent. But it’s just insurance.  How do we get paid insurance? How to build the product that people really need? And then again, because there’s so much waste, and so much inefficiency in the industry, you can build stuff that’s much better across the board. That’s where we will accelerate what we’re doing, whether it takes one year or five years. So, fundamentally, we’ve built a better solution for individuals, why would some company want to pay more for a clunkier solution that’s less helpful for the users? And so millennial doctors love working on our platform, millennial users love working on our platform. But plenty of 60 year olds work on our platform, so we are adding pediatrics. There’s a whole audiences. It will come out if we focus on the value, I think the other stuff will come together. The other thing I’ll say in one sentence is we need to have a full stack, we need to control that entire experience. I’ve never been good in not controlling that. So that’s why we have both information and doctors and treatments. We’re expanding that. And because healthcare is so big, we will partner with people to be clear, but it needs to be around that same approach of working with consumers. But Hans, I’m just curious.

Hans Tung  46:57

Before we get there, you still haven’t answer her question. So how do doctors get reimbursed?

Allon Bloch  47:04

So we hire, we have own doctors.

Hans Tung  47:08

So I figured it, when you say full stack.

Allon Bloch 47:10

So a consumer can put a credit card and pay. And we’ve figured out a way to do it much more efficiently and have the doctors focus just on the diagnosis. By the way, billing is about 10% of the cost of the revenue of a primary care physician. Now, any small business that was paying out 10% for billing it would go out of business. But restaurant doesn’t pay 10%. Even if you’re paying in an expensive processing fee, for a credit card, it’s probably more like 3%. So you would need to now spend a lot of time and energy dealing with something that doesn’t matter at all for consumers? Because they want to be treated and now you need to deal with all that billing complexity. But I think there is going to be solutions as you have partners around it. And you know you’ll get there. So look at America, how many states have lifted their state by state regulation? and I hate to break it to you. But as you move from New Jersey to New York, your body doesn’t change. So it is the same medicine and the needs are from the same person. Time has moved, but you haven’t really changed. So lifting the telemedicine requirements, and doctors just have no Medical Board approval. I hope it to be  something that will be kind of permanently removed. And I think there’ll be other changes. I think it’s just a matter of time for Medicare, Medicaid to embrace for text medicine, so I just need to be ready for that.

Hans Tung  48:55

Okay, so what was the question you want to ask me?

Allon Bloch 48:59

So you’ve seen many situations of competitive dynamics, a seemingly powerful incumbent. But it’s yet difficult to see incumbents taking on upstarts and rarely in a timely manner, not by trying to acquire them but trying to compete. Why super successful retailers or somebody who’s not a technology online player struggle with the shift and to compete? They end up losing every time as if they’ve never seen what Amazon and everybody else has done. Why is that?

Hans Tung  49:36

I think fundamentally, the way you build a technology company, in a way that technology plays a role. And by technology, I specifically mean internet services, Internet technology, internet solutions are just so different than anything that’s not. The clock speed of these organizations, how fast the company iterate and teams iterate to come up with new product revisions, are just so much faster than those who don’t work in tech. You can work same number of hours, but if your approach is different, you don’t turn around as quickly. When you ask a question to get an answer from A to Z, for most people is similar number of steps. The difference in IQ, probably two x difference, somebody is 180, somebody is 100, that’s the IQ score difference. But in terms of the turns around time, and the way you approach gets things done, what it takes months, two weeks, two days, two hours, the difference is much bigger than two x. So when you have an organization that is not tech, and compete with companies that are tech over a 3, or 4, or 5-year period, the output, the productivity level is so dramatically different. That is very difficult for the incumbents who are not tech to win. And we see that time again, across geography across industries.

Allon Bloch  51:01

I like that and I think you’re starting to think of companies taking a different approach, but it’s kind of a certain humbleness about what you can and can’t do. Because if you are 50 or 100 billion revenue company, you will say, I’ve got really smart Ivy League educated people around the table, many MBAs, we can do it all in house. So there is often a tendency to say, I can do it, maybe you take consultants, but you’re kind of doing it in house. I think there is humbleness, and sometimes external pressure forces you to do it. But people like Anthem, I’m also looking at people who like GM, are they being humble now by trying to do all these partnerships? Because they’re putting themselves on the limb? Will it help them against Tesla? I have no clue. I’m not an expert there.

It’s just fascinating to watch it. Because on paper, they can think of these ideas and they can go and execute them, and they have all the money already. They don’t need to go and convince Hans and  Robin, or anybody else to take a bet on them. And convince smart engineers and data scientists to work for them. So you are starting with the zero brand, everybody’s heard before. I also like to look at Walmart and Target, now this COVID thing lead to them taking a different approach,

Hans Tung  52:26

Usually the person that’s in charge, either at the top or at the divisional level of these big companies, have not done things that tech weight or internet weight. So for them, to empower someone else to do it, inherently selfishly, they could be losing their job. Someone who does it well may be taking over their job in the future. So most people, out of what is self-preservation, or just selfinterest, are not going to be able to want to see that succeed. This is a completely different animal altogether. So there’s a lot of cannibalization, and weed yourself out of the process that most people are not ready to do. So that makes it much more likely for someone like you to win. Zero to one was the hardest, but once you get the 10. Man becomes unstoppable. Because then it’s completely different that all the possible mentum shifts dramatically.

Allon Bloch 53:20

Yeah, but the interesting thing is if it is Jeff Bezos, or Elon Musk, not a some non-brand name, or entrepreneur. Let’s assume those two already strong entrepreneurs who have a long track record of up ending industries. If they went into a new industry right now, such as healthcare, and tackled it. What would the industry do? I see all the journalists of freaking, for example, around Amazon doing doing stuff in healthcare, but would the industry change? And I think there is still a lot of denial, I think there are people that are now again more humble, they more humble about what they can and can’t do in house. Because they are smart, and maybe they’re not lifelong career in that in that company. But, it’s just going to be.

Hans Tung  54:09

Same person in different age, different points in time are going to react differently. When you’re a founder at 28,  now you are a founder at 50. You make very different decisions. And that’s why we asked you what’s driving you. Jeff Bezos is super amazing. He listened to the interview that he had back in 1994 about why he choose books, it is so thoughtful and amazing. But he’s not who he was 20 or 30 years ago. And if he stays hungry, he was back then. Of course Amazon will dominate in healthcare, but it’s not. Differently by different parties along the way. So the hardest part is not whether someone can do or not, is whether that person is still motivated to do it at that point in time.

Allon Bloch  54:53

Yeah. Tenacity and perseverance. I agree. And by the way, that’s why it’s tough. Because you think about your strategy and your MVP and your products, but then you wake up in the morning and execute across your product and marketing and technology. And that’s where most of it happens. And hopefully you have the culture and the engines. It just happens on its own, spontaneously, but it takes time to get.

Hans Tung  55:19

A lot of people confuse ideas with results. Just because you talk about it doesn’t mean it will actually happen. Going out to execute and making that work is much harder, in my opinion, than the ideas. The CEO, the founder has to have the right direction and make the right strategic calls along the way. But ultimately, the ability to build a team and be able to execute across the board, across all departments, across geographies, that’s the really hard part. The idea can be simple in a board meeting, anybody can throw ideas.

Allon Bloch  55:51

Well, people always come to me and say, I have this idea that it’s not really an idea, Hans. I want to be the Amazon of this, the Netflix of that. That’s not an idea. Amazon is not what you think and Netflix is not what you think. I hear that a lot. As a pet peeve, I will never describe K as the Amazon of this or the Tesla of that. Because first of all, it just sounds really kind of Hollywood and be kind of just telling the story of what you’re doing. You don’t need crutches of other brands. And it doesn’t actually tell the story. So people have got the idea of to be the Amazon of this. Well, let’s talk for a second what Amazon actually does. It’s not a cute website, it was a catalog. It’s not just about selling stuff online. But again, if you look at most of what people succeed is turning that idea, something that was just a supreme amount of value to people. And for us, for K, it’s the ability where people would tell us, we’ve saved their life. I used to share it in the company. Now, so many people tell us we’ve saved their life, we change their life, we enable them to get an understanding at that specific point in time for an acute issue, or just resolve their chronic issue. And that’s massive, you’re not going to forget us if we did that, and you are going to tell other people, and you’re probably going to trust us as we roll out, see pediatrics, so our other stuff, give us the benefit of the doubt.

Hans Tung  57:27

Let’s move on to our quick-fire section.

Robin Li  57:30

Yeah, I think we only have time for one. So I’m gonna ask one that I really want to know. Which is what’s one habit that has changed your life?

Allon Bloch  57:39

Nobody’s ever asked me that question. I haven’t asked myself that question. Let me answer it, tell me if it’s an acceptable answer. During COVID, I really enjoy running, and I find it meditative. And I find it, it frees me up to think and it kind of inspires me safe. I’m having a long day, I’m doing zoom calls. And just a long day, in general being able to just go out and run is transformative for me. And when I was in the Israeli military, they used to wake me up at 4am and tell me to put on boots and go running in these heavy boots and brain and all that. So I hated it. And then in my 40s I started running just for leisure, and I kind of liked it. But during COVID I love it, I can’t wait to go and run, which sounds crazy. But in half an hour or in 40 minutes, I can really clear my head. I’ve solved two or three things I want to do. I can go back and I’m kind of energized. Is it life changing? Well, my family’s life changing., on personal happiness. But it kind of really helps me manage through COVID.

Hans Tung  59:02

Yeah, for me, it’s swimming. When I swim in the pool for 30 minutes.. It really clears my head off as well and allows me to focus.

Allon Bloch  59:13

I heard that and then nobody bothers you. I do like listening to music or podcasts while running. If I’m running fast, it’ll need to be music because I can’t concentrate on the podcast. But even if I’m listening, I’m not really listening, I’m kind of just thinking . Even in the open, I missed the physical world, with all these zoom videos. I miss my employees and I miss drinking coffee with friends or going out to a restaurant in the same way we did in the past. So to me that is kind of, I’m interacting. It’s just me in the road. It’s me in the world, being one with nature. It’s just you, there’s nothing there, it’s not technology. It’s just my heartbeat and my muscles.

Robin Li  1:00:01

Thank you.

Hans Tung  1:00:05

Yeah. Fantastic. Thank you for your time.