Lee Shapiro, Co-founder and Managing Partner at 7wireVentures, Backs StartUp Health Moonshots
Lee Shapiro, an icon of digital health investing, has worn a few hats. In addition to heading up 7wireVentures, he served as President of Allscripts and stepped in as CFO of Livongo to lead its 2019 IPO. Now, Shapiro is backing a diverse portfolio of early-stage health founders through the StartUp Health Moonshots Impact Fund. We dialed him up to learn what makes a great health investment and find out why he’s backing StartUp Health now.
Q+A
StartUp Health: How did you first get into health innovation investing?
Lee Shapiro: Glen Tullman and I have been investing together for more than 25 years. When we started, the idea was to use technology to fix broken business processes. We did that in several industries before we got to healthcare. Once we got to health, we realized there were enough things that were broken to last us a lifetime. It was a target-rich environment and it met our double bottom line of doing well while doing good. We thought we could really make a difference in health by working with passionate founders.
StartUp Health: How would you describe your health investment focus?
Lee Shapiro: We focus on the hassles we all face as health consumers. None of us want to be a patient; we all want to be healthy. Our investment focus is on leveraging tech-enabled care delivery to address common health challenges, such as getting access to or managing care regardless of location, to empower Informed Connected Health Consumers.
When we look for challenges to address at 7wire, we go through a process we call “hassle mapping” to break down the market challenges. For instance, we’ve looked at investing in wearables over the years, but we always start by asking, “What kind of problem is the product solving, and for whom?” Helping people run a little faster on the weekend isn’t as interesting to us as helping seniors live independently. When you compare the senior’s “hassles” to those of the person clocking a workout pace, it’s very different.
StartUp Health: You’ve been investing in health for decades. Has your investment thesis evolved over time?
Shapiro: Glen and I have been engaged in building many companies over the years. One was Allscripts, where Glen led the IPO and which started by addressing prescription adherence. However, as we listened to our provider clients, we learned that they were challenged with more than prescribing, so we began adding offerings to our solution set and found ourselves developing a stealth EMR. During this time we were embedded inside the medical practice and worked on everything from scheduling to prescribing to billing. We realized that if we’re ever going to really improve care, we need to understand the individual consumer and how the care received impacts them personally. For instance, two people might present with similar symptoms but respond to treatment in two very different ways. That means health information must flow seamlessly and inform care in nuanced ways. In terms of refining our thinking, we’ve gone from this broad brush of helping systems provide better care for individuals, to now investing in companies that give individuals more control.
SUH: You recently decided to back the StartUp Health Moonshots Impact Fund. Where does this fund fit into your thesis?
Shapiro: The StartUp Health Moonshots Impact Fund is very much aligned with our investment thesis at 7wire. As a largely Series A investor, our greatest impact is in helping companies at early stages. While we could have raised a big fund for later rounds, we think the real value is helping founders understand things like product-market fit and how to meet the needs of customers. This approach allows us to use all the mistakes we’ve learned from over the years — our cumulative team’s experience — to help the founders we work with scale and grow. We spend a lot of time working directly with those teams and this hands-on approach is at the core of our investment approach.
Part of the idea behind StartUp Health Moonshots Impact Fund is this notion of taking risks, of not being afraid to do something bold, and taking steps in something you believe in. We love founders who have personal stories and passions. When we founded Livongo, Glen Tullman was motivated by his relationship with his son, Sam, who had Type 1 diabetes. This personal connection was the source for the empathy that was infused in the business.
The StartUp Health Moonshot Impact Fund does just that by finding great founders who have stories of impact. Every Sunday it’s so rewarding to get my email from StartUp Health about another company that we’ve collectively invested in, reading those stories, and understanding why someone is innovating in a particular area. Selfishly, it gives us at 7wire an early look at companies we might want to invest in later stages. We love the network that StartUp Health has connected us into, and how it is creating opportunities for further investment.
SUH: Has your personal experience motivated your investment focus?
Shapiro: One company we built through our Hatch model, which is when we build companies from the ground up, is called Homethrive. This company came out of the experiences I had with my own mother, when she was alive, dealing with all the activities of daily living. It wasn’t just about getting her to the doctor and making sure she took her medications. It was about what to do when there’s a leak in the basement, or when the refrigerator needs repair. Those are the types of issues that Homethrive is solving for family caregivers.
SUH: What advice would you give to today’s health innovators on how to thrive in a Covid and Post-Covid environment?
Shapiro: It’s been said that culture eats strategy for lunch. It’s challenging to build culture in a remote environment. Many startups have remote teams which are great because people can work anywhere. It allows us to tap into different pools of resources, among other benefits. But you still need to have a common sense of purpose and mission. Why do your people get up each morning and want to build great things with your company? I would encourage founders today to spend a lot of time with their team members, talking about that common sense of purpose, telling user stories, sharing the good work that’s being done by their company, so you can draw like-minded spirits into the company. It’s really challenging to build out a team over Zoom, so you need to find ways to build off what got you passionate in the beginning.
Investors: Learn how you can invest in Health Moonshots through StartUp Health’s new rolling impact fund.
Digital health entrepreneur? Don’t make the journey alone. Learn more about the StartUp Health Community and how StartUp Health invests.
Sign up for StartUp Health Insider™ to get funding insights, news, and special updates delivered to your inbox.
