The Entrepreneur Mindset With Troy Bannister of Particle Health

Annaka: Hey everyone and welcome to Startup Savants, I'm Annaka.

Ethan: And I'm Ethan.

Annaka: If you're a returning listener, welcome back. If you're new, this podcast is about the stories behind startups, the founders who run them, and the problems they're solving today. This episode we’re joined by Troy Bannister of Particle Health. Troy is the founder and CEO of the company with an extensive background in various medical fields before choosing to launch Particle Health, his solution to what he identified as a major pain point in the industry. 

Ethan:
So, in today’s chat Troy gave us some strong insight into building a company for those in a highly regulated sector. He also did a deep dive into the entrepreneurial mindset which I think is going to seriously resonate with a lot of you. 

Annaka: The fun part for me is that I got to learn about a different structure called OKR or Objective Key Result structures. We also talked about building a burn out resilient culture and how hiring the right people does more for company culture than a ping pong table. This is one of our best interviews yet so don’t go anywhere. 

Hey, Troy! Welcome to the show.

Troy Bannister: Hey, thanks for having me.

Annaka: We are grateful to have you joining us today. If we could start off, if you could tell us the story behind launching Particle Health and the problem y'all are solving.

Troy Bannister: Yeah. The short version is, my math teacher in high school always talked about being an EMT and told us these crazy stories. One of the first things I did when I got to college was sign up for the EMT class. At the time I was in business school, which was kind of boring. On the weekends and on the summers, I was working on an ambulance. I absolutely fell in love with medicine when I was doing that. I was 18, I was driving an ambulance around Seattle and I was part of the experiences of all these people in a position to help. I loved it. I ended up switching to pre-med, going to med school.

At med school, I relatively quickly realized it was not for me, which is a very hard decision to make at that point in the path. I switched out and got a master's degree in biophysics and physiology. Took that, did clinical research for a few years in New York, and somehow got pulled into the digital health world. They were doing some really simple stuff like text message reminders to take your medications. They're proving like 20% of people don't go to the ER, if you are reminded to take your meds on time. I was like, "This is a big deal. Nobody's using the internet or cell phones for healthcare." I joined a small venture firm out here in New York and got really involved in the digital health startup ecosystem.

When I looked back on my whole career, I just saw this consistent issue where no matter where I was in the ambulance, the hospital, doing research or working with entrepreneurs, nobody had access to clinical data. The best option was the fax machine, and still is funny enough today. I saw this really clear issue no matter where I was, and the issue spanned the entire healthcare ecosystem. I thought, "This is a problem worth solving." I jumped in and put my boots to the ground and started going.

Ethan: You've been in the healthcare space for quite some time. First off, thank you for doing the EMT job. I cannot imagine how hard that job is, but it's so necessary. Thank you. It sounds like this problem is something that you had identified quite some time ago and you had seen it increase over time or at least not decrease. Was there a specific event or set of events that led you to choose to be the one to solve this issue?

Troy Bannister: I think there were two moments. One was, when I was at the venture firm, I was working with a handful of entrepreneurs that were all trying to integrate with the same hospital. I think it was three companies and three CEOs that I was working with. All of them were doing the integration separately. They were spending six to nine months and maybe a hundred to $200,000 to do it. I was like, "Why? Why are all three of you building the same thing? If someone just built that thing and everyone could use it, this would solve the problem." It's really hard to do, I knew that, but what a great problem to solve.

The other was a more, I guess, interesting moment. I was in San Francisco for the JP Morgan healthcare conference event. I was in this small room with maybe, I don't know, a hundred or 200 people. We were listening to Joe Biden, who was then the acting Vice President back in, whatever 2009 or 10 or something. He was telling us the story about his son, Beau, who was diagnosed with a glioblastoma, brain cancer. Joe Biden took his son to several different cancer specialists and was telling us the story about how they couldn't get his son's medical records from one specialist to another. I was sitting there and I was like, "If the acting Vice President of the United States cannot get his son's medical records from one doctor to another, we have a serious problem."

Annaka: Yeah.

Troy Bannister: For me, that was a really interesting thing because I wanted to understand why. Why couldn't it happen? It seems like he could call somebody and make it happen, but apparently he couldn't. Is it a technical problem? Is it an economic problem? Is it a legal issue? What is it? That got me really interested in the problem space. I think those two things, seeing those two things, one in the individual basis and one in the systemic basis, were the things that pushed me over the edge.

Ethan: So, the issue that Particle Health is solving is allowing the sharing of medical records between different institutions. What's the product? How is Particle Health solving that issue?

Troy Bannister: The best analogy today is if you've ever used Venmo before, which I'm sure you have, there is a company behind Venmo called Plaid. Some people know Plaid, some people don't. Plaid is a large network of integrations to all the banks in the United States. That infrastructure is what Venmo uses to move $5 from your bank account to $5 of your friend's bank account. That doesn't exist in healthcare. There's no unification of the systems. What Particle does, is very similar. It's an API, just like Plaid, that connects to all the practices, hospitals, clinics, labs, and now increasingly digital health companies and shares data across all of them. It's directed either by providers or consumers or whoever's using that tool that we plug into.

Ethan: Awesome. Now we know what helped you to identify the problem and what made you decide that you were the right person to go and solve the problem. After you started your company, how did you know that it was time to quit your day job and focus full time on Particle?

Troy Bannister: Well, one correction there. I quit without a plan. I was three years into this job at this venture firm. It was a good job and it was a great company and we were doing cool stuff. But as I mentioned earlier, I had this nagging feeling that I needed to do more. I needed to have free agency. I needed to take my own risks and either pay for those risks, or cherish the wins that I did fulfill. As I mentioned, one day I just stood up from my desk, walked into my boss's office. I was like, "Two weeks, sorry." I had no plan. I didn't even know I was going to start a company then. I just knew this wasn't the right place for me. There was something else that I needed to do. As I mentioned again, I went home and I paced in circles for two weeks. I took two showers and was eating beans and rice and ramen every day, freaking out, just like freaking out, like, "What am I doing? Why did I do that?"

I had no money at the time. I was 26, maybe 25 in New York, expensive rent. I think this is a lesson that I would teach a lot of people that are interested in starting a company. The minute you don't have a backup plan, is the minute you develop a really good plan. The paranoia and the nervous anxiousness forces you to get phone calls set up. It forces you to go to the cafe for six hours and read about what's happening in the ecosystem and what opportunities are coming. It just forces you into it because you don't have an option anymore. There's no paycheck coming. That was the catalyst for me, was this lack of a safety net that pushed me into starting this company.

Ethan: Do you think that's a good idea for everybody? Do you have a specific advantage that allowed you to basically just jump off the cliff like that?

Troy Bannister: I definitely had an advantage. I think the principle of not having a backup plan applies to everybody. I think the nuance of how you do that is dependent on the person. I was lucky that I was living in an apartment with two roommates and I was paying $800 a month in rent. I could just eat ramen every day and be happy. I didn't have kids, I didn't have dependents. I could kind of like jump off that cliff. Other people can't do that. The question is, when do I jump off the cliff? It's okay to start your company while you're working at another place, but at some point you have to jump. The sooner you do it, the sooner you find the opportunity to do it, the faster this is going to go and the higher percent chance it's going to work.

Ethan: In starting your company, I imagine there are a ton of complexities and oversight in just the world of health data, especially compliance and privacy. What were some major roadblocks that you ran into in the beginning and what did you do to solve them?

Troy Bannister: Yeah, that's a great question. There is way too much complexity and there's even additional wrinkles and that complexity is changing month over month. There are new regulations and new laws that have passed over the last couple years that people still don't even know what they mean. The US is the only country in the world that creates laws, but doesn't tell you how to do them. The private industry has to decide how to do that. We're in this interesting purgatory right now, where the industry's deciding how to adopt these rules and make them happen and how to interpret them and is waiting for precedence to be set. Anyway, rabbit hole, we can get down later.

In terms of complexities, the first thing we were trying to figure out is, how do we get access to everybody's medical data in a legal way? That took probably a year for us to figure out between saying, "Do we go hospital to hospital, practice to clinic, knocking on doors?" That's probably not going to work if these two young guys are saying, "Hey, give us full access to your data." Then we found every state has their own kind of body that is trying to connect data sources. We went to the states and we actually ran some pilots with Michigan and Texas. We realized there, those regulatory groups that are trying to manage this, aren't very innovation oriented or revenue minded. That wasn't the right group. Finally, we found some other organizations that were doing more national level work that we built into. We were there very early in those iterations and have been kind of a big part of those evolutions. That's kind of baked us into a more national place. That was a hard, long journey going from the bottom, to the top of the stack and finally finding a place that worked.

Annaka: I can't even imagine being like, "You know what I'm going to do? I'm going to figure this problem out." Yeah, no. As far as your target market, who are you looking for to use Particle Health services?

Troy Bannister: Right now, we sell to providers. Providers could mean a lot of different things, right? Some of our customers are actual provider groups or hospital practices. So, like Oak Street Health, One Medical, if you're familiar, are our customers. More of our customers are going to fall on the digital side, the technology side.

Diabetes management applications, telemedicine, digital pharmacies, all those types of groups we work with. That's the bigger customer set. If you're providing care to a patient and you're responsible for that patient and you don't have their medical records, you're at a disadvantage. Having their medical records clearly at your fingertips can help you prescribe safer meds or understand that this patient might have diabetes. You can use this data to improve the outcomes of your patients, whereas the groups that don't have access to the data can't.

Annaka: Right. Right. What was the process like, kind of narrowing that down, because if you're healthcare providers, that's a huge, huge group. How do you kind of niche that down so it's actually accessible and actionable?

Troy Bannister: There was a lot of nicheing happening. In the beginning, we think of it as the four Ps. There's patients, providers, pharma, and payers. Which of these do we want to go through first, was the first question. We landed on providers for a few reasons that I could get into, but mostly because there was a direct line of sight on the value proposition here. It was really simple in terms of what we're giving them and why. We started there.

I think what we ended up understanding more clearly as we kind of started selling, was there's two types of providers in this world. There's a fee for service providers, where it's like you pay $5 for a telemedicine visit and that's what it is. Then there's value-based care providers that get paid for keeping you out of the hospital. The better they perform and the better the quality of their services and their treatment, the more they get paid from the insurance companies or Medicare, Medicaid, or whatever. That's our target group, is we want to sell data to the providers that use it to keep people out of the hospital, not just to prescribe another medication for your rash or something.

Annaka: Yeah. It's like the, "I'm pretty sure I know what this is, but I just need someone to tell me that so I can get some medication for it."

Troy Bannister: Right.

Annaka: I love that they exist though.

Troy Bannister: Totally.

Annaka: I'm a WebMD junkie.

Troy Bannister: Oh yeah. Scary place to be.

Annaka: Yeah. Right? Oh my God. We read in the research phase, that you'd spent a year talking to people in order to validate your startup idea. Can you walk us through the decision making process there?

Troy Bannister: Yeah. It was all centered around this idea of, "How do we get access to everybody's records and then why do we do that? What do we do with it?" I would say it was a whole year. I'd say there were things happening in parallel. I'd say the first year was, "How are we doing this? How is this going to actually happen?" When I started the company, it was just me. I was going to this coffee shop down the street every single day for six hours. I'd get one cup of coffee and use their wifi all day. They're like, "Oh, this guy's back. Okay." My goal was to fill up my calendar with phone calls and fill it up with people that can help validate my current thinking of what I wanted this to be.

The first two or three months were like two phone calls a day. I was just twiddling my thumbs, reading as much as I could. The second batch of months, maybe month four through six or seven, I had five phone calls a day, and with more subject matter experts in the space. By the end, maybe month seven or eight, I had my whole calendar full every day with phone calls. The phone calls were really valuable and they led to maybe a pilot or an investor conversation that was actually serious or something like that. That was my goal, was just fill my calendar up every day if I could do it. I like that method, I think it was a good method.

Annaka: Yeah. What would those phone calls look like? I mean, were they to investors or just industry folk? Who were you talking to and what did you talk about?

Troy Bannister: I think it was a mix of three stakeholder types. One was the people that knew maybe how I was going to get access to data like, "What are the regulatory opportunities? What other companies or organizations exist that we could work with?" Things like that. Bucket two was potential customer types. Those were the groups where I was basically fake pitching. I'd be like, "Look, I don't have a product, but let me pitch the idea to you."

Annaka: Yeah.

Troy Bannister: "We have this API, you put in their name, you get all their records. Does that sound good or bad?" That type of thing. The last bucket was investors, which was actually very similar to the customer types of conversations, right? It was like, "What's the value? Why do I want this, X, Y, Z." It was those three types. I would just, again, every time I'd have a call with somebody at the end I'd be like, "Do you have anybody else that would be helpful for me to talk with? I'll owe you one." One time out of five people would have a person or two for me and that would fill up my next day's calendar, next week's calendar.

Ethan: So, your seed round was led by Collaborative Fund, which is a pretty well known name in the VC space. I think what our audience would love to hear is if you could walk us through getting into the room with Collaborative and what you did to craft a winning pitch.

Troy Bannister: I think there's two things to take away from this. One is, you have to build up credibility to the point where they're going to sit down with you and take you seriously. The way you do that, I think there's probably two ways. If you're lucky, it's because you actually have a product that's working and you have customers and revenue. That's hard to do. If you have that, that'll get you in the door every time. The alternative to that, is all the stuff around that. You are in an accelerator program with TechStars or something that is well known, or you have a co-founder that raised money in the past or had to start up in the past, or you are running a pilot with a well known organization that you're working closely with. You got to figure out what that little thing is that'll be like, "Oh, these guys aren't just messing around. They're actually working. They have some indications that what they're doing is valuable." As long as you have one of those things you can typically get in the door I think.

I think the other piece is, you don't ever really want to just do cold reach outs to VCs, emailing them, LinkedIn, submitting a form on their website. That's not the way to go. The only way to go is to get introductions through somebody. That could either be an entrepreneur in the portfolio or another investor that you know, that knows them. They all know each other. If you get one that is on your team, you can get a bunch more connected to you. As long as you have those things, you can get on a call. The other thing to mention, I think is when you talk about the winning pitch, the first pitches are not going to win. It's just not going to happen.

We had two or three sit downs with Collaborative Fund before they committed to investing. The first one was like, "What are you guys doing?" We're like, "Ah, it's kind of this thing." They're like, "Yeah, come back later." The second one was, "What are you guys doing now?" We're like, "Well, we kind of have this better idea of what we're doing and we actually have a pilot set up now." They're like, "Okay, let's talk after the pilot." By the third one, we're like, "We wrapped up the pilot, here are the results. We're now integrating with a big national data source. We have one customer, they're paying us very little, but there's money coming in." At that point they're like, "All right, we're ready." It's about building the relationship. It's about demonstrating progress. It's about meeting the expectations that you're setting them.

If you're sitting down with an investor, think if I have three calls with them over the next six months, the third call, I'm thinking I'm going to have a pilot done, that's what I'm going to raise my cash. We're not going to get lucky on this first call. They're not going to be like, "Oh, I woke up on the right side of the bed today." That's not going to happen. Think about like, how do you build your relationship iteratively over three to six months? What do you have to show them by that last phone call to get this thing done? I think that's kind of my takeaway there.

Ethan: On that first call, let's assume that you're not going to get it, but what do you need to bring? What do I need to bring to that pitch to guarantee that I get invited back? I'm assuming there's some people out there who get that first try and then they don't get invited back for a second pitch.

Troy Bannister: Yeah. I think it's two things. One is, it's got to be a huge idea. This isn't a 500 million company. This isn't a billion dollar company. This could be a $10 billion company. Set your eyes, set your targets on the next Facebook, the next Google. Is it realistic that you're going to get there? Well, statistically definitely not, but try to think really, really big. What could this thing be if everything went perfectly between now and then? That's number one. Investors aren't looking for doubles or triples. They're looking for grand slams every single time. That's one.

Number two is, have a realistic plan. Come to them and don't say, "We're going to have a hundred million dollars of revenue in the next six months." Come in and say, "We're going to have $10,000 of revenue in the next six months. We've got six customers that we're talking to and we think we can probably get one. If we can get one by the next three months and we sit down with you, we would love to have that conversation. We'll let you know when we have that contract signed." Be really realistic and practical, and then prove out that you do it. If you shoot too big in your realistic plan and you miss it, now you've just missed the expectations that you've set. Show progress, show intelligent thinking, and hit your targets.

Annaka: Those sound just like life lessons in general too.

Troy Bannister: Yeah. For sure.

Annaka: I always learn something in these conversations. It's like, "I can actually apply that to my overall life." Love that. You had mentioned in your company profile that COVID forced y'all to go remote. How did you facilitate that change?

Troy Bannister: Yeah, I mean, first it was really hard. We love working together. We were coming to the office every day. We're getting dinner after work and we're having a good time, whiteboard sessions, water cooler talk. It was great. Then COVID hit and we had to download Zoom. All of a sudden, those water cooler conversations disappeared and the whiteboard disappeared and the drinks after work disappeared. It was just on Zoom calls every day. Not only did the magic kind of subside, but also the really valuable conversations on the sides disappeared. By the way, at that time, we were starting to hire a lot too. We went from, I think, six or seven people in the beginning of COVID to 35, well now 40 now.

We had to introduce a lot of new ideas. One of the big ones was what we call our anti burnout policies. One is, we have a summer break every year and we have a winter break every year and everybody gets those weeks off. In between, there's still PTO, but we want everybody to take the same week off and refresh and recharge for the next six months. We also do flexible Fridays, which is just kind of like a no meeting day. A day to get caught up on your work. If you're already caught up on your work, take it off. We don't care. You're getting your stuff done, that's awesome. We have these kinds of policies built in. We have an office in Flat Iron in the city, and we kind of think of it as like, this is such a silly term, but like a clubhouse where it's like you don't have to be there, but if you want to be there 24 hours a day, it's open. If you want to meet at midnight and go over the product's release plan, you can go meet there. Everybody's got the codes.

We're trying to figure out a kind of more creative way of solving this problem, where people can have the water cooler talks if they want, they can have the whiteboards if they want, but they can also stay at home if they want. I don't think it's ever going to be the same. That's totally fine. This is the world that we live in. You got to think about how to kind of recreate some of these things because they're wildly important things.

Annaka: Yeah, as far as culture and people wanting to come to work. One of the things that I jumped on in looking, I love looking through people's job postings because it gives me an idea of who are the people you're actually looking to hire?

Troy Bannister: Mm-hmm.

Annaka: The anti burnout thing was just hammered home on every single one. I was like, "I have to know more." Do you think these things and these perks, do you think those are sustainable? Do you think when you're at 35, 40 people, you can do it, but maybe it gets phased out as you get bigger?

Troy Bannister: I actually think these policies are not super impactful at the end of the day, honestly. I think people that work really hard are going to work on Fridays and they will probably work through summer break or winter break. This isn't the long term solution to building a sustainable business. That comes down to your actual culture. Are your managers demanding that you work on weekends? Is there a competitive culture where two people vying for the same promotion are going to work until they're burned out? That's the stuff that you have to be really careful about and that you have to ingrain in the culture. I think these policies are really nice. I think the main point of them is a messaging that says, "We really think anti burnout is a really important thing for us."

I think that messaging carries into, "I'm going to shut my laptop today. I'm going to wake up and do this instead of miss my friend's birthday." That's not what we want. This is a marathon in healthcare technology. It's not a sprint. This is not Tinder as a company.

Annaka: Yeah.

Troy Bannister: This is a long haul that we're signed up for here. If we're pushing people consistently over the edge, we're going to see churn. We're going to lose subject matter expertise. We're going to have to retrain and spend months getting new people up to speed. We can't do that. We have to figure out how to retain people and give them a sustainable lifestyle so they can keep contributing.

Annaka: Yeah. I love the kind of, why can I never come up with the word I want, the clarification that you made between culture, like foundational culture, and perk. It's not like a pool table. It's like, "This is just how you're expected to be treated when you work here." That's a huge difference.

Troy Bannister: Yeah. I think policy informs behavior. It doesn't create it. All we can really do as a leadership team, is inform that behavior and say, "It's okay not to have meetings on Fridays. It's okay to take a week off in the summer." At the end of the day, who we hire and how they interact with each other is the culture.

Annaka: Yep. I'm going to get, instead of live, laugh, love, I'm getting that on my wall. Okay, this one's totally off script, and forgive me everyone who's like, "What is she about to say?"

Ethan: Going to get there.

Annaka: I will get there. My brain goes faster than my face does.

Troy Bannister: Yeah.

Annaka: Every once in a while I'm like, "Go back, rewind a couple seconds." If you have people working for you that are in burnout, they are in burnout and they're ready to walk circles in the same pair of pajama pants for two weeks, how do they approach you? What's the process if they're like, "Dude, I am on the edge?" How do they approach you to resolve that?

Troy Bannister: It's a tricky question. I think it's heavily dependent on the person and what they want to do. I think there's a couple answers. One is, I think other people see it before individuals see it. I think most people in burnout are blind to it. They just think they're tired. I think they probably deny it to a degree. I think more often than not, it's a manager or a coworker that speaks up and says, "Hey, I think this person's really tired right now and needs a break," which we've seen before. On the rare occasion that it is the person, it's a pretty simple conversation. I think most people know this person's working really, really hard right now and can see that already and are like, "Ooh, this person might be burning out. They just did a big product release and we're working over hours." I think it's pretty obvious when you see it. I think it's probably less likely for a person to self actualize, than for others to call it out or notice it.

Annaka: Yeah. We all have a responsibility all together.

Troy Bannister: Mm-hmm.

Annaka: Okay. Last culture question for me. Do you have any advice for companies that are looking to foster or create a more positive company culture?

Troy Bannister: It's just so important to hire the right people. That's what it is. I think people talk about this all the time, like creating the culture at your company, da, da, da. You can't do it. You can't control how people interact with each other. You can try. Of course you try and you have to demonstrate the behavior. I think that there is a big effect in demonstrating the behavior that you want others to portray. But at the end of the day, it comes down to who the actual people are that you're putting in the seats. If you hire a bunch of people that came from Goldman Sachs investment banking team, they are going to work nights and weekends, and they're going to be cutthroat.

If you hire a bunch of people that came from, I don't know, I'm trying to, this is kind of a dog if I call a company out, some company that let's say overhired their engineering and their engineering had one small project a month to do. They're not going to work that hard. They're used to that and that's what's normal to them. Normal is what they're going to try to recreate. It's so dependent on how you hire. That's why culture should be integral in your hiring process criteria. Do not just skip by that and say, "Oh, this person's cool." There's way more dimensions to cool that you need to evaluate.

Annaka: Right.

Troy Bannister: Yeah.

Ethan: Yeah. We could talk for days about getting the right team and what types of questions you ask and what are the specific attributes that you look for. I think we're just going to have to sit with what you've already said, because you've already said a lot. The folks listening to this, just basically take those principles and extrapolate those to the questions that you ask your new hires and the people you are looking to hire. That's the way that you're going to get yourself the right team. Your team currently has just under 40 employees. From where I've seen things, that puts you pretty squarely in the no man's land of not a small company, but not a big company.

Troy Bannister: Yeah.

Ethan: What are some of the growing pains that you've experienced between founding and scaling up to 35 plus people?

Troy Bannister: That's a great question. I think that the two that come to mind, one is, this is such a general term, but the operational scale issues. Once you get to 15, 20 people and you start adding a new person, the complexity of communication gets exponentially more difficult, right? It's not just one more person. It's one more person connected to the other 15 people. It's like 15 more lines of communication. Then you add a 16, that's 16 more lines of communication that you need to figure out. Every time you add another person, if you don't have a system in place to facilitate that communication, it starts to get a little bit crazy.

I think around the 15 person mark, figuring out how do we communicate? How do we set goals together? How do we keep each other up to speed on what's happening? When expectations change, let's just say the delivery date of a product, how do we let everybody know so there's no surprises, marketing doesn't release the press release, and then we're like, "Wait a minute, we delayed this and no one told you?" That's the kind of stuff that you don't want to have happen. That's one big, I think, category.

I think the second category is, how do I start building my organizational structure in a way that doesn't start to impede on itself? I'll give you an example. In the beginning, we had our engineering team divided by front end engineers, backend engineers, and data engineers. We had three, four or five people in each. That was great. Now we're like, "We need to change that. We can't have all the same engineers in a group working together. We need to split them up and we have to have multidisciplinary teams focused on mandates. We have to have a group figuring out how do we onboard customers faster and better using technology. We have to have a team basically saying, how do we get more data sources plugged into our platform? We have to have another team saying, how do we take those data sources and normalize them to the data we have today? We have to have another team saying, how do we analyze this data and derive insights from that data for our customers?"

In those worlds, we need to take one person from the back end, one person from the front end, and one person from the data team and put them on a team. Thinking out in the future and saying, "Instead of just forgetting about this and loading these teams up with more people, let's design this in a way that is self-serving in the future so that we're not having to do this at a point in time that's going to be destructive." It's kind of like seeing around the corners, "What are we going to need and how do we design that now so that we're not in the doghouse later and have a ton of technical debt to solve for?" I think those are the two big ones is, the communication operational stuff and the system thinking of the future.

Annaka: If I could jump back into kind of your team, well, I don't know if it's team structure, but am I understanding you correctly in that your employees are organized in a goal orientation versus like a, "Oh, you're a content writer."

Troy Bannister: Yeah.

Annaka: I love that.

Troy Bannister: Yeah.

Annaka: That's all I had to say. I just had to make sure I understood you correctly. Goal oriented teams just makes the type A in me really happy.

Troy Bannister: Yeah. We use OKRs, if you're familiar, the objective key results systems that are from Google, I guess. Those trickle down to departments and departments have KPIs, key performance indicators. Every team has a KPI mandate. For example, we want to onboard customers and integrate the API into their solutions in eight weeks instead of nine weeks this quarter. Then that team has a week or two to plan, "What are we going to do? What do we think the best thing we can do is to get it from nine weeks to eight weeks?" That becomes the quarter build, the roadmap to build something that does that. At the end of the quarter, we get to measure it. Did it work or did it not work? Did we get to eight weeks or not?

Ethan: Let's jump back to that communication issue. The communication needs to graduate with the size of the company and you are experienced in creating a solution. What is the solution that you have put into place?

Troy Bannister: I think lesson number one is, don't be fooled by technology or platforms that solve this problem. They help, but they're a tool, right? If you have a hammer and you have to nail a hundred nails and you don't know how to use a hammer, or you don't use the hammer very well, you're going to have a hard time nailing those nails in. You got to know how to use them, and you have to have the people in place to use them well. I think you have to have a tool to do it when you scale. You can't just use Excel or Google sheets or something, right? We use Notion, which is just one of those kinds of project management team management solutions.

Going back to a previous comment, if I was to restart Particle again, I would start using OKRs way earlier in our careers. I think within the first week of starting Particle, I probably would've selected OKRs to start thinking about. They, I think, are probably one of the best tools of communication. It tells you quantitatively, what we're trying to do this quarter and what you're working on and how what you're working on relates to those things.

The example I gave earlier, we're trying to get customers on boarded from nine weeks to eight weeks time. There's probably six to 10 people on our team right now that are working on projects that contribute to that. The marketing team might be working on a getting started guide to using Particle that might help. The engineering team is building a new version of the API that's more simple. The sales team is delivering materials during the sales process that will get our customer's engineering team ready to implement on day one, instead of waiting a week to implement, right?

"What is everybody doing, and how does that tie up to our company's goals?," I think is the number one best communication tool that a founder or CEO, or whoever can use. Other than that, it's Slack and email and Notion and all these things, but it all has to be centralized around one concept. That's why OKRs, I think, are really great. It doesn't have to be OKRs. It can be whatever other version of that, right? Having this like, "This is what we're all working on. Here's how we measure success. Here's what you're working on and why it contributes to that," is the number one thing.

Ethan: All right. Let's shift gears. I want to talk about a phrase that I heard you use in relation to entrepreneurship. The quote is, "It's a mindset game after all." Can you tell us what this means to you?

Troy Bannister: Yeah. This goes back. My last job I was working at Startup Health. One of the core things was the entrepreneur mindset. It's actually a matrix that you can score yourself with on how is your entrepreneurial mindset doing today? It's concepts like, "Are you long term committed? Do you have supportive relationships in place? Are you measuring your progress iteratively X, Y, Z?" I think those things are very important. I think at the end of the day, the decisions you're making in high frequency, I'm probably making 25 to a hundred decisions a day from when I wake up to when I close my laptop, are made on the basis of your current mindset. If you are making decisions in a place of not being long-term committed or not being confidently ambitious about the future, you're probably going to make decisions that impact the future of your company. If you are sitting in a place where you're incredibly confident about the future, and you feel really good about what you're building, you might make bigger bets and smarter bets. You might think a little bit differently.

If you think about the mindset, the mindset is the platform of which you're making decisions. You have to maintain that in a good place. You have to wake up and no matter how bad your day is going, you got to get those thoughts out and make those good decisions. You can't just let those bad feelings dictate what you're doing. You will run into bad decisions or sorry, bad news I should say.

We used to joke around about the existential threat of the week. The one customer you have, giving you the email that says, "We're unplugging and we're going to stop paying you next week," right? That will happen. If you sit there and let that get to you, you're going to fail. If you can take a 30 minute breather and go on a walk and come back and say, "Whatever, it doesn't matter, we're going to try to get them back, but if not, there's more customers in the pipeline that we can get that are bigger and better," you're going to make better decisions. I think that's the foundational philosophy behind entrepreneurship, is the thoughts that you're having and how those impact your decisions.

Ethan: That matrix tool that you mentioned, could you repeat what that's called just one more time?

Troy Bannister: The group I used to work for, Startup Health, it's a venture firm and accelerator. They do a bunch of peer coaching and CEO coaching type stuff. They have this, I think it's on their website, I'm not sure, it's a matrix. It is, I believe, 10 characteristics of a healthy person. I think they call it the transformative entrepreneurial mindset and you can score yourself on it. It's a pretty handy kind of concept to understand.

Ethan: We're going to find that, and we're going to put a link to that in our show notes.

Troy Bannister: Yeah.

Ethan: It sounds like an awesome way to measure your entrepreneurial mindset. How do you go about developing that right mindset?

Troy Bannister: It's a muscle like anything else. What Startup Health used to do, is they'd basically force you to measure yourself every month and you would track it. I think at some point, I work there, and they're also investors in Particles, so I still have a relationship with them. I just know it now. I just know like, "I'm having a bad day," or, "This news that I just got is affecting me, and so I need to take a breather," but it's a muscle. I think bad news now barely affects me. It definitely affects me, but I built a muscle that allows me to it in such a way that I can push it away and come back to it when I'm in a better place.

I think reactive decision making on bad news is a really easy trap to get stuck in as an earlier entrepreneur. You're going to have bad news. It's going to happen. You're going to have many moments of existential dread. The entrepreneurs that do well, are the ones that get through it. The ones that don't do well, are the ones that succumb to it. That is the core foundational truth of entrepreneurship is, who's going to last the hard times and who's going to fall down and not get back up?

Annaka: Cool. All right. I want to go back to something that you just very briefly mentioned previously. You were in healthcare, you're in VC, and then at some point you're like, "Nope, I'm out." What is the emotional process like when your career trajectory kind of implodes? We already heard it wasn't great. I don't know. I've heard this before from people that were like, "I was supposed to be a firefighter for my entire life and then X, Y, Z happened, and all of a sudden I'm a chef." How do you make that transition emotionally and mentally and kind of come out unscathed on the other side?

Troy Bannister: That's an excellent question and I don't know if I have a real answer to this. I think the only thing I can really say is, it was the only thing that got me excited. Nothing else was exciting. At that time in my life, that's what I wanted. I wanted excitement. I didn't want stability. I didn't want safety. I didn't want a regular schedule. I wanted to go do something exciting. I think I was very risk tolerant at the time of my life, where I didn't have anything to lose. I had like $5,000 in my bank account and a pair of jeans and so I was like, "I'm good. What are they going to do? Take my jeans away."

I was like, "I can do this at very low risk to myself and at the very worst, I go find another job." I was pretty confident I could probably find another job if I really needed to, didn't want to, but I thought I could. I was willing to do it. It was just a good kind of intersection of different feelings in a certain time of my life that was like, "This is the only thing that really makes sense to me right now."

Annaka: Yeah. Okay. That's a very good answer. I really appreciate that. I love those kinds of identity questions like, "How did you just turn the whole thing on your head and do something different?" Now, to completely change directions a hundred percent, where do you see digital health or health tech kind of going in the coming years?

Troy Bannister: That's actually a really deep question. There's a lot changing right now. I think, as we all know, the market is collapsing. There will be a flip from championing companies that are growth at all cost oriented, those companies at IPO at 10 billion, but they have no revenue. You're like, "How is this happening?" It's because they have this grand master plan that everybody's bought into and all the VCs have kind of flocked to, and they're just supporting that because it makes money. It's going to flip from that, to which of these companies are actually healthy? Which ones have their eyes on profitability? Which of them have good gross margins and good unit economics? That's going to happen. There's a new onus, I think, on digital health companies to prove return on investment and prove value. I think that's a very healthy thing. I think we're going to see a lot of startups die over the next two years, is my guess, which could be argued good or bad, right? Depends on who you are. That's one.

I think two, which is a little bit more specific to what we're doing is, these rules that I mentioned are going to be really big changes. In the same way that before Plaid, you could not send $5 from your bank account to your friends. This will change in healthcare too. It's about to happen at the end of the year. Examples like with Plaid, Mint and Robinhood, you couldn't buy stocks on an app. What's going to happen in healthcare, is the big question. I think in the same way Plaid didn't know crypto was going to be a thing and that's like their biggest business, what do we not know in healthcare that's going to happen?

There's probably going to be some big changes in the innovative space because this data's been locked up since the dawn of time. As of October 6th of this year, it's no longer locked up. It is completely fluid and accessible by any developer, entrepreneur, or innovative organization to develop new things on top of this data. We're completely subscribed to this idea that there will be a Cambrian explosion of innovation in healthcare once the data is unlocked. We're super excited about that.

Ethan: How does a company like Particle Health scale? What's your next step in the route to get there?

Troy Bannister: I think our plans of scale have changed as of six months ago with the market collapsing. Again, the priority now is how do we turn this into a really healthy business, as opposed to a growth at all cost business? We're not going to hire as many people as we're planning. We're not going to go for revenue targets that we were planning for. We're going to go for really healthy steps towards really healthy business metrics. Scale isn't going to be as crazy as we were thinking six months ago, still, we're going to be doubling our team over the next 18 to 24 months for sure. That comes with a whole boatload of scale complexities.

The good thing is, we have a really awesome leadership team that's been around the block before. We already have a bunch of systems in place that can accommodate for a lot more people on the team. I don't think there's any more foundational changes we're going to have to make. I think there's a lot of tweaks and iterations and nuance that we're going to have to learn as we go. I think we have a really good foundation right now to double the size.

Ethan: Let me ask a quick question on that. It seems like this growth at all costs mindset has really been driven by VCs in the past 20 years. Are you seeing support from the VC side on this more sustainable, "Let's actually think about making a profit," type of business model or are they still saying, "Hey growth at all costs?" What's driving the VCs nowadays?

Troy Bannister: The biggest piece is now that the interest rates have driven up so high, buying cash is more expensive, right? From a venture capital's perspective, taking money from their LPs, the valuations of their companies have decreased significantly. It used to be eight to a hundred X revenue as evaluation. I mean, some companies are getting valued 200 to 300 X to their revenues. It's all built on hype. It's all built on herd mentality. It's all built on the shiny new thing. That works in that world. Now, the valuations are three to five X revenue, and it doesn't go higher than that.

Ethan: Wow.

Troy Bannister: If my portfolio just went down from 50 X average to five X average, I just lost 10 X of my value of my portfolio. The companies that I need to invest in and to support, are the ones that are going to have high revenue and high multiple values from that revenue. It's a new game. It's just a different game. The question though is, how long does that last? My hunch is it probably won't last that long. As soon as the interest rates go back down, the market bounces back, the VCs get a new flush of LP money. Their 10 year mandates to deploy that capital start to come towards the tail end. They're going to have to deploy that capital. I don't think it's probably going to go back to what it was a year ago, six months ago, which was just bananas. People were just raising insane amounts of money on nothing. I think it's going to go back closer to that, I do. It's a question of like, "Where does it land?" Different VCs are going to have different mentalities too, I think.

Annaka: Yeah. I learned a lot right there. All right. We're getting closer to the end. What is the biggest lesson you've learned as an entrepreneur?

Troy Bannister: Hmm. I've given most of them already I think.

Annaka: I was going to say, is there one or are there multiple?

Troy Bannister: I'll say this, it's hard. It doesn't turn off. There's no off. You're on vacation, you're still liable to work and jump in. You are at your friend's wedding, you might get an email that you might not have to respond to, but you might read it and it might put you in a really bad mood. It becomes who you are. That line disappears between you as the founder of the company, and you as an individual in the world. That's a hard thing emotionally and psychologically to constantly be dealing with. You're in the shower, you're thinking about work. You're going to bed, you're thinking about work. Like the other things, you have to build a muscle to learn how to turn it off.

At some point, usually I'd say around series A, you're starting to hire a head of sales, a head of operations, a head of marketing, whatever. You can start to offload some of that stuff. You have to figure out how to trust those people, because you are not going to be a healthy, happy person, and you're going to make bad decisions because your mindset's going to be bad, if you don't figure out how to do that. It's really, really important to figure out how to do that. You'll never be able to get it all off your table, nor should you, but you have to figure out how to be able to turn it off sometimes. If you don't, it's not fun. It should be fun. It has to be fun.

Annaka: Little purposeful disconnection never hurt anybody. What is your advice for entrepreneurs? If it's that, then you can say that one again.

Troy Bannister: Yeah. No matter how fast you think you're going to be able to start a company and get it running and sell it or whatever your goal is, it's going to take five times as long. Just believe that. It will, if not longer. Are you ready for a 10 plus year, really intense, personality changing experience? That's what it is. It's a heavy load to lift and carry with you for 10 plus years. Some people just love it, right? They're like, "I'm going to do this again. This is who I am. I'm happy with it." Some people are like, "I can tolerate it. I can live my normal life and I can figure out how to make this work." Some people are like, "I can't do this. This is just not for me." Who are you, and the sooner you figure that out, the better I think.

Ethan: All right. One last question and we'll let you get back to your afternoon. Is there anything cool going on right now in Particle that you want to shout out? How can our listeners support Particle Health?

Troy Bannister: Yeah, there's stuff I want to talk about, but I can't. I'll talk about, we are building a whole kind of new analytical layer on top of the data that we're able to pull from all these different places. I think it's really exciting because it's changing who we are as a company from an organization that can go get your medical records, to an organization that can tell you things about those medical records. That's a whole new world for us. It's a wildly interesting world to be able to pull, on average we're finding about 105 records per patient when we go look for their records.

Annaka: Wow.

Troy Bannister: What can you tell about somebody's health from that complete longitudinal history? I think that within six months from now, we'll have some really interesting stuff built out from this. That's really exciting for me because it's a whole new space for us to dive into.

Ethan: All right. Thank you so much. We're going to put links to Particle Health into our show notes and lots of other stuff that we talked about today, but that's going to be it for today's episode of the Startup Savants podcast. Thanks for hanging out with us today and now onto my favorite part of the show, the outro. Why is it my favorite you ask? I am essentially unchecked in what I get to say to you. Whoever thought it was responsible to give me this autonomy, should probably be punished. What am I going to do with this senseless excess of power? Well, I'll probably just ask you folks to leave us a five star rating on Apple Podcasts. That's not too unreasonable, right? I might also ask you to send your thoughts about the show in an email to podcast@truic.com, but that's about it. I guess maybe our producers aren't that irresponsible after all. I suppose I'll just do the rest like I always do. For tools, guides, videos, startup stories, and so much more, head over to truic.com. That's truic.com, T-R-U-I-C.com. See you folks.

Annaka: Bye.

Annaka: Hey everyone and welcome to Startup Savants, I'm Annaka.

Ethan: And I'm Ethan.

Annaka: If you're a returning listener, welcome back. If you're new, this podcast is about the stories behind startups, the founders who run them, and the problems they're solving today. This episode we’re joined by Troy Bannister of Particle Health. Troy is the founder and CEO of the company with an extensive background in various medical fields before choosing to launch Particle Health, his solution to what he identified as a major pain point in the industry. 

Ethan:
So, in today’s chat Troy gave us some strong insight into building a company for those in a highly regulated sector. He also did a deep dive into the entrepreneurial mindset which I think is going to seriously resonate with a lot of you. 

Annaka: The fun part for me is that I got to learn about a different structure called OKR or Objective Key Result structures. We also talked about building a burn out resilient culture and how hiring the right people does more for company culture than a ping pong table. This is one of our best interviews yet so don’t go anywhere. 

Hey, Troy! Welcome to the show.

Troy Bannister: Hey, thanks for having me.

Annaka: We are grateful to have you joining us today. If we could start off, if you could tell us the story behind launching Particle Health and the problem y'all are solving.

Troy Bannister: Yeah. The short version is, my math teacher in high school always talked about being an EMT and told us these crazy stories. One of the first things I did when I got to college was sign up for the EMT class. At the time I was in business school, which was kind of boring. On the weekends and on the summers, I was working on an ambulance. I absolutely fell in love with medicine when I was doing that. I was 18, I was driving an ambulance around Seattle and I was part of the experiences of all these people in a position to help. I loved it. I ended up switching to pre-med, going to med school.

At med school, I relatively quickly realized it was not for me, which is a very hard decision to make at that point in the path. I switched out and got a master's degree in biophysics and physiology. Took that, did clinical research for a few years in New York, and somehow got pulled into the digital health world. They were doing some really simple stuff like text message reminders to take your medications. They're proving like 20% of people don't go to the ER, if you are reminded to take your meds on time. I was like, "This is a big deal. Nobody's using the internet or cell phones for healthcare." I joined a small venture firm out here in New York and got really involved in the digital health startup ecosystem.

When I looked back on my whole career, I just saw this consistent issue where no matter where I was in the ambulance, the hospital, doing research or working with entrepreneurs, nobody had access to clinical data. The best option was the fax machine, and still is funny enough today. I saw this really clear issue no matter where I was, and the issue spanned the entire healthcare ecosystem. I thought, "This is a problem worth solving." I jumped in and put my boots to the ground and started going.

Ethan: You've been in the healthcare space for quite some time. First off, thank you for doing the EMT job. I cannot imagine how hard that job is, but it's so necessary. Thank you. It sounds like this problem is something that you had identified quite some time ago and you had seen it increase over time or at least not decrease. Was there a specific event or set of events that led you to choose to be the one to solve this issue?

Troy Bannister: I think there were two moments. One was, when I was at the venture firm, I was working with a handful of entrepreneurs that were all trying to integrate with the same hospital. I think it was three companies and three CEOs that I was working with. All of them were doing the integration separately. They were spending six to nine months and maybe a hundred to $200,000 to do it. I was like, "Why? Why are all three of you building the same thing? If someone just built that thing and everyone could use it, this would solve the problem." It's really hard to do, I knew that, but what a great problem to solve.

The other was a more, I guess, interesting moment. I was in San Francisco for the JP Morgan healthcare conference event. I was in this small room with maybe, I don't know, a hundred or 200 people. We were listening to Joe Biden, who was then the acting Vice President back in, whatever 2009 or 10 or something. He was telling us the story about his son, Beau, who was diagnosed with a glioblastoma, brain cancer. Joe Biden took his son to several different cancer specialists and was telling us the story about how they couldn't get his son's medical records from one specialist to another. I was sitting there and I was like, "If the acting Vice President of the United States cannot get his son's medical records from one doctor to another, we have a serious problem."

Annaka: Yeah.

Troy Bannister: For me, that was a really interesting thing because I wanted to understand why. Why couldn't it happen? It seems like he could call somebody and make it happen, but apparently he couldn't. Is it a technical problem? Is it an economic problem? Is it a legal issue? What is it? That got me really interested in the problem space. I think those two things, seeing those two things, one in the individual basis and one in the systemic basis, were the things that pushed me over the edge.

Ethan: So, the issue that Particle Health is solving is allowing the sharing of medical records between different institutions. What's the product? How is Particle Health solving that issue?

Troy Bannister: The best analogy today is if you've ever used Venmo before, which I'm sure you have, there is a company behind Venmo called Plaid. Some people know Plaid, some people don't. Plaid is a large network of integrations to all the banks in the United States. That infrastructure is what Venmo uses to move $5 from your bank account to $5 of your friend's bank account. That doesn't exist in healthcare. There's no unification of the systems. What Particle does, is very similar. It's an API, just like Plaid, that connects to all the practices, hospitals, clinics, labs, and now increasingly digital health companies and shares data across all of them. It's directed either by providers or consumers or whoever's using that tool that we plug into.

Ethan: Awesome. Now we know what helped you to identify the problem and what made you decide that you were the right person to go and solve the problem. After you started your company, how did you know that it was time to quit your day job and focus full time on Particle?

Troy Bannister: Well, one correction there. I quit without a plan. I was three years into this job at this venture firm. It was a good job and it was a great company and we were doing cool stuff. But as I mentioned earlier, I had this nagging feeling that I needed to do more. I needed to have free agency. I needed to take my own risks and either pay for those risks, or cherish the wins that I did fulfill. As I mentioned, one day I just stood up from my desk, walked into my boss's office. I was like, "Two weeks, sorry." I had no plan. I didn't even know I was going to start a company then. I just knew this wasn't the right place for me. There was something else that I needed to do. As I mentioned again, I went home and I paced in circles for two weeks. I took two showers and was eating beans and rice and ramen every day, freaking out, just like freaking out, like, "What am I doing? Why did I do that?"

I had no money at the time. I was 26, maybe 25 in New York, expensive rent. I think this is a lesson that I would teach a lot of people that are interested in starting a company. The minute you don't have a backup plan, is the minute you develop a really good plan. The paranoia and the nervous anxiousness forces you to get phone calls set up. It forces you to go to the cafe for six hours and read about what's happening in the ecosystem and what opportunities are coming. It just forces you into it because you don't have an option anymore. There's no paycheck coming. That was the catalyst for me, was this lack of a safety net that pushed me into starting this company.

Ethan: Do you think that's a good idea for everybody? Do you have a specific advantage that allowed you to basically just jump off the cliff like that?

Troy Bannister: I definitely had an advantage. I think the principle of not having a backup plan applies to everybody. I think the nuance of how you do that is dependent on the person. I was lucky that I was living in an apartment with two roommates and I was paying $800 a month in rent. I could just eat ramen every day and be happy. I didn't have kids, I didn't have dependents. I could kind of like jump off that cliff. Other people can't do that. The question is, when do I jump off the cliff? It's okay to start your company while you're working at another place, but at some point you have to jump. The sooner you do it, the sooner you find the opportunity to do it, the faster this is going to go and the higher percent chance it's going to work.

Ethan: In starting your company, I imagine there are a ton of complexities and oversight in just the world of health data, especially compliance and privacy. What were some major roadblocks that you ran into in the beginning and what did you do to solve them?

Troy Bannister: Yeah, that's a great question. There is way too much complexity and there's even additional wrinkles and that complexity is changing month over month. There are new regulations and new laws that have passed over the last couple years that people still don't even know what they mean. The US is the only country in the world that creates laws, but doesn't tell you how to do them. The private industry has to decide how to do that. We're in this interesting purgatory right now, where the industry's deciding how to adopt these rules and make them happen and how to interpret them and is waiting for precedence to be set. Anyway, rabbit hole, we can get down later.

In terms of complexities, the first thing we were trying to figure out is, how do we get access to everybody's medical data in a legal way? That took probably a year for us to figure out between saying, "Do we go hospital to hospital, practice to clinic, knocking on doors?" That's probably not going to work if these two young guys are saying, "Hey, give us full access to your data." Then we found every state has their own kind of body that is trying to connect data sources. We went to the states and we actually ran some pilots with Michigan and Texas. We realized there, those regulatory groups that are trying to manage this, aren't very innovation oriented or revenue minded. That wasn't the right group. Finally, we found some other organizations that were doing more national level work that we built into. We were there very early in those iterations and have been kind of a big part of those evolutions. That's kind of baked us into a more national place. That was a hard, long journey going from the bottom, to the top of the stack and finally finding a place that worked.

Annaka: I can't even imagine being like, "You know what I'm going to do? I'm going to figure this problem out." Yeah, no. As far as your target market, who are you looking for to use Particle Health services?

Troy Bannister: Right now, we sell to providers. Providers could mean a lot of different things, right? Some of our customers are actual provider groups or hospital practices. So, like Oak Street Health, One Medical, if you're familiar, are our customers. More of our customers are going to fall on the digital side, the technology side.

Diabetes management applications, telemedicine, digital pharmacies, all those types of groups we work with. That's the bigger customer set. If you're providing care to a patient and you're responsible for that patient and you don't have their medical records, you're at a disadvantage. Having their medical records clearly at your fingertips can help you prescribe safer meds or understand that this patient might have diabetes. You can use this data to improve the outcomes of your patients, whereas the groups that don't have access to the data can't.

Annaka: Right. Right. What was the process like, kind of narrowing that down, because if you're healthcare providers, that's a huge, huge group. How do you kind of niche that down so it's actually accessible and actionable?

Troy Bannister: There was a lot of nicheing happening. In the beginning, we think of it as the four Ps. There's patients, providers, pharma, and payers. Which of these do we want to go through first, was the first question. We landed on providers for a few reasons that I could get into, but mostly because there was a direct line of sight on the value proposition here. It was really simple in terms of what we're giving them and why. We started there.

I think what we ended up understanding more clearly as we kind of started selling, was there's two types of providers in this world. There's a fee for service providers, where it's like you pay $5 for a telemedicine visit and that's what it is. Then there's value-based care providers that get paid for keeping you out of the hospital. The better they perform and the better the quality of their services and their treatment, the more they get paid from the insurance companies or Medicare, Medicaid, or whatever. That's our target group, is we want to sell data to the providers that use it to keep people out of the hospital, not just to prescribe another medication for your rash or something.

Annaka: Yeah. It's like the, "I'm pretty sure I know what this is, but I just need someone to tell me that so I can get some medication for it."

Troy Bannister: Right.

Annaka: I love that they exist though.

Troy Bannister: Totally.

Annaka: I'm a WebMD junkie.

Troy Bannister: Oh yeah. Scary place to be.

Annaka: Yeah. Right? Oh my God. We read in the research phase, that you'd spent a year talking to people in order to validate your startup idea. Can you walk us through the decision making process there?

Troy Bannister: Yeah. It was all centered around this idea of, "How do we get access to everybody's records and then why do we do that? What do we do with it?" I would say it was a whole year. I'd say there were things happening in parallel. I'd say the first year was, "How are we doing this? How is this going to actually happen?" When I started the company, it was just me. I was going to this coffee shop down the street every single day for six hours. I'd get one cup of coffee and use their wifi all day. They're like, "Oh, this guy's back. Okay." My goal was to fill up my calendar with phone calls and fill it up with people that can help validate my current thinking of what I wanted this to be.

The first two or three months were like two phone calls a day. I was just twiddling my thumbs, reading as much as I could. The second batch of months, maybe month four through six or seven, I had five phone calls a day, and with more subject matter experts in the space. By the end, maybe month seven or eight, I had my whole calendar full every day with phone calls. The phone calls were really valuable and they led to maybe a pilot or an investor conversation that was actually serious or something like that. That was my goal, was just fill my calendar up every day if I could do it. I like that method, I think it was a good method.

Annaka: Yeah. What would those phone calls look like? I mean, were they to investors or just industry folk? Who were you talking to and what did you talk about?

Troy Bannister: I think it was a mix of three stakeholder types. One was the people that knew maybe how I was going to get access to data like, "What are the regulatory opportunities? What other companies or organizations exist that we could work with?" Things like that. Bucket two was potential customer types. Those were the groups where I was basically fake pitching. I'd be like, "Look, I don't have a product, but let me pitch the idea to you."

Annaka: Yeah.

Troy Bannister: "We have this API, you put in their name, you get all their records. Does that sound good or bad?" That type of thing. The last bucket was investors, which was actually very similar to the customer types of conversations, right? It was like, "What's the value? Why do I want this, X, Y, Z." It was those three types. I would just, again, every time I'd have a call with somebody at the end I'd be like, "Do you have anybody else that would be helpful for me to talk with? I'll owe you one." One time out of five people would have a person or two for me and that would fill up my next day's calendar, next week's calendar.

Ethan: So, your seed round was led by Collaborative Fund, which is a pretty well known name in the VC space. I think what our audience would love to hear is if you could walk us through getting into the room with Collaborative and what you did to craft a winning pitch.

Troy Bannister: I think there's two things to take away from this. One is, you have to build up credibility to the point where they're going to sit down with you and take you seriously. The way you do that, I think there's probably two ways. If you're lucky, it's because you actually have a product that's working and you have customers and revenue. That's hard to do. If you have that, that'll get you in the door every time. The alternative to that, is all the stuff around that. You are in an accelerator program with TechStars or something that is well known, or you have a co-founder that raised money in the past or had to start up in the past, or you are running a pilot with a well known organization that you're working closely with. You got to figure out what that little thing is that'll be like, "Oh, these guys aren't just messing around. They're actually working. They have some indications that what they're doing is valuable." As long as you have one of those things you can typically get in the door I think.

I think the other piece is, you don't ever really want to just do cold reach outs to VCs, emailing them, LinkedIn, submitting a form on their website. That's not the way to go. The only way to go is to get introductions through somebody. That could either be an entrepreneur in the portfolio or another investor that you know, that knows them. They all know each other. If you get one that is on your team, you can get a bunch more connected to you. As long as you have those things, you can get on a call. The other thing to mention, I think is when you talk about the winning pitch, the first pitches are not going to win. It's just not going to happen.

We had two or three sit downs with Collaborative Fund before they committed to investing. The first one was like, "What are you guys doing?" We're like, "Ah, it's kind of this thing." They're like, "Yeah, come back later." The second one was, "What are you guys doing now?" We're like, "Well, we kind of have this better idea of what we're doing and we actually have a pilot set up now." They're like, "Okay, let's talk after the pilot." By the third one, we're like, "We wrapped up the pilot, here are the results. We're now integrating with a big national data source. We have one customer, they're paying us very little, but there's money coming in." At that point they're like, "All right, we're ready." It's about building the relationship. It's about demonstrating progress. It's about meeting the expectations that you're setting them.

If you're sitting down with an investor, think if I have three calls with them over the next six months, the third call, I'm thinking I'm going to have a pilot done, that's what I'm going to raise my cash. We're not going to get lucky on this first call. They're not going to be like, "Oh, I woke up on the right side of the bed today." That's not going to happen. Think about like, how do you build your relationship iteratively over three to six months? What do you have to show them by that last phone call to get this thing done? I think that's kind of my takeaway there.

Ethan: On that first call, let's assume that you're not going to get it, but what do you need to bring? What do I need to bring to that pitch to guarantee that I get invited back? I'm assuming there's some people out there who get that first try and then they don't get invited back for a second pitch.

Troy Bannister: Yeah. I think it's two things. One is, it's got to be a huge idea. This isn't a 500 million company. This isn't a billion dollar company. This could be a $10 billion company. Set your eyes, set your targets on the next Facebook, the next Google. Is it realistic that you're going to get there? Well, statistically definitely not, but try to think really, really big. What could this thing be if everything went perfectly between now and then? That's number one. Investors aren't looking for doubles or triples. They're looking for grand slams every single time. That's one.

Number two is, have a realistic plan. Come to them and don't say, "We're going to have a hundred million dollars of revenue in the next six months." Come in and say, "We're going to have $10,000 of revenue in the next six months. We've got six customers that we're talking to and we think we can probably get one. If we can get one by the next three months and we sit down with you, we would love to have that conversation. We'll let you know when we have that contract signed." Be really realistic and practical, and then prove out that you do it. If you shoot too big in your realistic plan and you miss it, now you've just missed the expectations that you've set. Show progress, show intelligent thinking, and hit your targets.

Annaka: Those sound just like life lessons in general too.

Troy Bannister: Yeah. For sure.

Annaka: I always learn something in these conversations. It's like, "I can actually apply that to my overall life." Love that. You had mentioned in your company profile that COVID forced y'all to go remote. How did you facilitate that change?

Troy Bannister: Yeah, I mean, first it was really hard. We love working together. We were coming to the office every day. We're getting dinner after work and we're having a good time, whiteboard sessions, water cooler talk. It was great. Then COVID hit and we had to download Zoom. All of a sudden, those water cooler conversations disappeared and the whiteboard disappeared and the drinks after work disappeared. It was just on Zoom calls every day. Not only did the magic kind of subside, but also the really valuable conversations on the sides disappeared. By the way, at that time, we were starting to hire a lot too. We went from, I think, six or seven people in the beginning of COVID to 35, well now 40 now.

We had to introduce a lot of new ideas. One of the big ones was what we call our anti burnout policies. One is, we have a summer break every year and we have a winter break every year and everybody gets those weeks off. In between, there's still PTO, but we want everybody to take the same week off and refresh and recharge for the next six months. We also do flexible Fridays, which is just kind of like a no meeting day. A day to get caught up on your work. If you're already caught up on your work, take it off. We don't care. You're getting your stuff done, that's awesome. We have these kinds of policies built in. We have an office in Flat Iron in the city, and we kind of think of it as like, this is such a silly term, but like a clubhouse where it's like you don't have to be there, but if you want to be there 24 hours a day, it's open. If you want to meet at midnight and go over the product's release plan, you can go meet there. Everybody's got the codes.

We're trying to figure out a kind of more creative way of solving this problem, where people can have the water cooler talks if they want, they can have the whiteboards if they want, but they can also stay at home if they want. I don't think it's ever going to be the same. That's totally fine. This is the world that we live in. You got to think about how to kind of recreate some of these things because they're wildly important things.

Annaka: Yeah, as far as culture and people wanting to come to work. One of the things that I jumped on in looking, I love looking through people's job postings because it gives me an idea of who are the people you're actually looking to hire?

Troy Bannister: Mm-hmm.

Annaka: The anti burnout thing was just hammered home on every single one. I was like, "I have to know more." Do you think these things and these perks, do you think those are sustainable? Do you think when you're at 35, 40 people, you can do it, but maybe it gets phased out as you get bigger?

Troy Bannister: I actually think these policies are not super impactful at the end of the day, honestly. I think people that work really hard are going to work on Fridays and they will probably work through summer break or winter break. This isn't the long term solution to building a sustainable business. That comes down to your actual culture. Are your managers demanding that you work on weekends? Is there a competitive culture where two people vying for the same promotion are going to work until they're burned out? That's the stuff that you have to be really careful about and that you have to ingrain in the culture. I think these policies are really nice. I think the main point of them is a messaging that says, "We really think anti burnout is a really important thing for us."

I think that messaging carries into, "I'm going to shut my laptop today. I'm going to wake up and do this instead of miss my friend's birthday." That's not what we want. This is a marathon in healthcare technology. It's not a sprint. This is not Tinder as a company.

Annaka: Yeah.

Troy Bannister: This is a long haul that we're signed up for here. If we're pushing people consistently over the edge, we're going to see churn. We're going to lose subject matter expertise. We're going to have to retrain and spend months getting new people up to speed. We can't do that. We have to figure out how to retain people and give them a sustainable lifestyle so they can keep contributing.

Annaka: Yeah. I love the kind of, why can I never come up with the word I want, the clarification that you made between culture, like foundational culture, and perk. It's not like a pool table. It's like, "This is just how you're expected to be treated when you work here." That's a huge difference.

Troy Bannister: Yeah. I think policy informs behavior. It doesn't create it. All we can really do as a leadership team, is inform that behavior and say, "It's okay not to have meetings on Fridays. It's okay to take a week off in the summer." At the end of the day, who we hire and how they interact with each other is the culture.

Annaka: Yep. I'm going to get, instead of live, laugh, love, I'm getting that on my wall. Okay, this one's totally off script, and forgive me everyone who's like, "What is she about to say?"

Ethan: Going to get there.

Annaka: I will get there. My brain goes faster than my face does.

Troy Bannister: Yeah.

Annaka: Every once in a while I'm like, "Go back, rewind a couple seconds." If you have people working for you that are in burnout, they are in burnout and they're ready to walk circles in the same pair of pajama pants for two weeks, how do they approach you? What's the process if they're like, "Dude, I am on the edge?" How do they approach you to resolve that?

Troy Bannister: It's a tricky question. I think it's heavily dependent on the person and what they want to do. I think there's a couple answers. One is, I think other people see it before individuals see it. I think most people in burnout are blind to it. They just think they're tired. I think they probably deny it to a degree. I think more often than not, it's a manager or a coworker that speaks up and says, "Hey, I think this person's really tired right now and needs a break," which we've seen before. On the rare occasion that it is the person, it's a pretty simple conversation. I think most people know this person's working really, really hard right now and can see that already and are like, "Ooh, this person might be burning out. They just did a big product release and we're working over hours." I think it's pretty obvious when you see it. I think it's probably less likely for a person to self actualize, than for others to call it out or notice it.

Annaka: Yeah. We all have a responsibility all together.

Troy Bannister: Mm-hmm.

Annaka: Okay. Last culture question for me. Do you have any advice for companies that are looking to foster or create a more positive company culture?

Troy Bannister: It's just so important to hire the right people. That's what it is. I think people talk about this all the time, like creating the culture at your company, da, da, da. You can't do it. You can't control how people interact with each other. You can try. Of course you try and you have to demonstrate the behavior. I think that there is a big effect in demonstrating the behavior that you want others to portray. But at the end of the day, it comes down to who the actual people are that you're putting in the seats. If you hire a bunch of people that came from Goldman Sachs investment banking team, they are going to work nights and weekends, and they're going to be cutthroat.

If you hire a bunch of people that came from, I don't know, I'm trying to, this is kind of a dog if I call a company out, some company that let's say overhired their engineering and their engineering had one small project a month to do. They're not going to work that hard. They're used to that and that's what's normal to them. Normal is what they're going to try to recreate. It's so dependent on how you hire. That's why culture should be integral in your hiring process criteria. Do not just skip by that and say, "Oh, this person's cool." There's way more dimensions to cool that you need to evaluate.

Annaka: Right.

Troy Bannister: Yeah.

Ethan: Yeah. We could talk for days about getting the right team and what types of questions you ask and what are the specific attributes that you look for. I think we're just going to have to sit with what you've already said, because you've already said a lot. The folks listening to this, just basically take those principles and extrapolate those to the questions that you ask your new hires and the people you are looking to hire. That's the way that you're going to get yourself the right team. Your team currently has just under 40 employees. From where I've seen things, that puts you pretty squarely in the no man's land of not a small company, but not a big company.

Troy Bannister: Yeah.

Ethan: What are some of the growing pains that you've experienced between founding and scaling up to 35 plus people?

Troy Bannister: That's a great question. I think that the two that come to mind, one is, this is such a general term, but the operational scale issues. Once you get to 15, 20 people and you start adding a new person, the complexity of communication gets exponentially more difficult, right? It's not just one more person. It's one more person connected to the other 15 people. It's like 15 more lines of communication. Then you add a 16, that's 16 more lines of communication that you need to figure out. Every time you add another person, if you don't have a system in place to facilitate that communication, it starts to get a little bit crazy.

I think around the 15 person mark, figuring out how do we communicate? How do we set goals together? How do we keep each other up to speed on what's happening? When expectations change, let's just say the delivery date of a product, how do we let everybody know so there's no surprises, marketing doesn't release the press release, and then we're like, "Wait a minute, we delayed this and no one told you?" That's the kind of stuff that you don't want to have happen. That's one big, I think, category.

I think the second category is, how do I start building my organizational structure in a way that doesn't start to impede on itself? I'll give you an example. In the beginning, we had our engineering team divided by front end engineers, backend engineers, and data engineers. We had three, four or five people in each. That was great. Now we're like, "We need to change that. We can't have all the same engineers in a group working together. We need to split them up and we have to have multidisciplinary teams focused on mandates. We have to have a group figuring out how do we onboard customers faster and better using technology. We have to have a team basically saying, how do we get more data sources plugged into our platform? We have to have another team saying, how do we take those data sources and normalize them to the data we have today? We have to have another team saying, how do we analyze this data and derive insights from that data for our customers?"

In those worlds, we need to take one person from the back end, one person from the front end, and one person from the data team and put them on a team. Thinking out in the future and saying, "Instead of just forgetting about this and loading these teams up with more people, let's design this in a way that is self-serving in the future so that we're not having to do this at a point in time that's going to be destructive." It's kind of like seeing around the corners, "What are we going to need and how do we design that now so that we're not in the doghouse later and have a ton of technical debt to solve for?" I think those are the two big ones is, the communication operational stuff and the system thinking of the future.

Annaka: If I could jump back into kind of your team, well, I don't know if it's team structure, but am I understanding you correctly in that your employees are organized in a goal orientation versus like a, "Oh, you're a content writer."

Troy Bannister: Yeah.

Annaka: I love that.

Troy Bannister: Yeah.

Annaka: That's all I had to say. I just had to make sure I understood you correctly. Goal oriented teams just makes the type A in me really happy.

Troy Bannister: Yeah. We use OKRs, if you're familiar, the objective key results systems that are from Google, I guess. Those trickle down to departments and departments have KPIs, key performance indicators. Every team has a KPI mandate. For example, we want to onboard customers and integrate the API into their solutions in eight weeks instead of nine weeks this quarter. Then that team has a week or two to plan, "What are we going to do? What do we think the best thing we can do is to get it from nine weeks to eight weeks?" That becomes the quarter build, the roadmap to build something that does that. At the end of the quarter, we get to measure it. Did it work or did it not work? Did we get to eight weeks or not?

Ethan: Let's jump back to that communication issue. The communication needs to graduate with the size of the company and you are experienced in creating a solution. What is the solution that you have put into place?

Troy Bannister: I think lesson number one is, don't be fooled by technology or platforms that solve this problem. They help, but they're a tool, right? If you have a hammer and you have to nail a hundred nails and you don't know how to use a hammer, or you don't use the hammer very well, you're going to have a hard time nailing those nails in. You got to know how to use them, and you have to have the people in place to use them well. I think you have to have a tool to do it when you scale. You can't just use Excel or Google sheets or something, right? We use Notion, which is just one of those kinds of project management team management solutions.

Going back to a previous comment, if I was to restart Particle again, I would start using OKRs way earlier in our careers. I think within the first week of starting Particle, I probably would've selected OKRs to start thinking about. They, I think, are probably one of the best tools of communication. It tells you quantitatively, what we're trying to do this quarter and what you're working on and how what you're working on relates to those things.

The example I gave earlier, we're trying to get customers on boarded from nine weeks to eight weeks time. There's probably six to 10 people on our team right now that are working on projects that contribute to that. The marketing team might be working on a getting started guide to using Particle that might help. The engineering team is building a new version of the API that's more simple. The sales team is delivering materials during the sales process that will get our customer's engineering team ready to implement on day one, instead of waiting a week to implement, right?

"What is everybody doing, and how does that tie up to our company's goals?," I think is the number one best communication tool that a founder or CEO, or whoever can use. Other than that, it's Slack and email and Notion and all these things, but it all has to be centralized around one concept. That's why OKRs, I think, are really great. It doesn't have to be OKRs. It can be whatever other version of that, right? Having this like, "This is what we're all working on. Here's how we measure success. Here's what you're working on and why it contributes to that," is the number one thing.

Ethan: All right. Let's shift gears. I want to talk about a phrase that I heard you use in relation to entrepreneurship. The quote is, "It's a mindset game after all." Can you tell us what this means to you?

Troy Bannister: Yeah. This goes back. My last job I was working at Startup Health. One of the core things was the entrepreneur mindset. It's actually a matrix that you can score yourself with on how is your entrepreneurial mindset doing today? It's concepts like, "Are you long term committed? Do you have supportive relationships in place? Are you measuring your progress iteratively X, Y, Z?" I think those things are very important. I think at the end of the day, the decisions you're making in high frequency, I'm probably making 25 to a hundred decisions a day from when I wake up to when I close my laptop, are made on the basis of your current mindset. If you are making decisions in a place of not being long-term committed or not being confidently ambitious about the future, you're probably going to make decisions that impact the future of your company. If you are sitting in a place where you're incredibly confident about the future, and you feel really good about what you're building, you might make bigger bets and smarter bets. You might think a little bit differently.

If you think about the mindset, the mindset is the platform of which you're making decisions. You have to maintain that in a good place. You have to wake up and no matter how bad your day is going, you got to get those thoughts out and make those good decisions. You can't just let those bad feelings dictate what you're doing. You will run into bad decisions or sorry, bad news I should say.

We used to joke around about the existential threat of the week. The one customer you have, giving you the email that says, "We're unplugging and we're going to stop paying you next week," right? That will happen. If you sit there and let that get to you, you're going to fail. If you can take a 30 minute breather and go on a walk and come back and say, "Whatever, it doesn't matter, we're going to try to get them back, but if not, there's more customers in the pipeline that we can get that are bigger and better," you're going to make better decisions. I think that's the foundational philosophy behind entrepreneurship, is the thoughts that you're having and how those impact your decisions.

Ethan: That matrix tool that you mentioned, could you repeat what that's called just one more time?

Troy Bannister: The group I used to work for, Startup Health, it's a venture firm and accelerator. They do a bunch of peer coaching and CEO coaching type stuff. They have this, I think it's on their website, I'm not sure, it's a matrix. It is, I believe, 10 characteristics of a healthy person. I think they call it the transformative entrepreneurial mindset and you can score yourself on it. It's a pretty handy kind of concept to understand.

Ethan: We're going to find that, and we're going to put a link to that in our show notes.

Troy Bannister: Yeah.

Ethan: It sounds like an awesome way to measure your entrepreneurial mindset. How do you go about developing that right mindset?

Troy Bannister: It's a muscle like anything else. What Startup Health used to do, is they'd basically force you to measure yourself every month and you would track it. I think at some point, I work there, and they're also investors in Particles, so I still have a relationship with them. I just know it now. I just know like, "I'm having a bad day," or, "This news that I just got is affecting me, and so I need to take a breather," but it's a muscle. I think bad news now barely affects me. It definitely affects me, but I built a muscle that allows me to it in such a way that I can push it away and come back to it when I'm in a better place.

I think reactive decision making on bad news is a really easy trap to get stuck in as an earlier entrepreneur. You're going to have bad news. It's going to happen. You're going to have many moments of existential dread. The entrepreneurs that do well, are the ones that get through it. The ones that don't do well, are the ones that succumb to it. That is the core foundational truth of entrepreneurship is, who's going to last the hard times and who's going to fall down and not get back up?

Annaka: Cool. All right. I want to go back to something that you just very briefly mentioned previously. You were in healthcare, you're in VC, and then at some point you're like, "Nope, I'm out." What is the emotional process like when your career trajectory kind of implodes? We already heard it wasn't great. I don't know. I've heard this before from people that were like, "I was supposed to be a firefighter for my entire life and then X, Y, Z happened, and all of a sudden I'm a chef." How do you make that transition emotionally and mentally and kind of come out unscathed on the other side?

Troy Bannister: That's an excellent question and I don't know if I have a real answer to this. I think the only thing I can really say is, it was the only thing that got me excited. Nothing else was exciting. At that time in my life, that's what I wanted. I wanted excitement. I didn't want stability. I didn't want safety. I didn't want a regular schedule. I wanted to go do something exciting. I think I was very risk tolerant at the time of my life, where I didn't have anything to lose. I had like $5,000 in my bank account and a pair of jeans and so I was like, "I'm good. What are they going to do? Take my jeans away."

I was like, "I can do this at very low risk to myself and at the very worst, I go find another job." I was pretty confident I could probably find another job if I really needed to, didn't want to, but I thought I could. I was willing to do it. It was just a good kind of intersection of different feelings in a certain time of my life that was like, "This is the only thing that really makes sense to me right now."

Annaka: Yeah. Okay. That's a very good answer. I really appreciate that. I love those kinds of identity questions like, "How did you just turn the whole thing on your head and do something different?" Now, to completely change directions a hundred percent, where do you see digital health or health tech kind of going in the coming years?

Troy Bannister: That's actually a really deep question. There's a lot changing right now. I think, as we all know, the market is collapsing. There will be a flip from championing companies that are growth at all cost oriented, those companies at IPO at 10 billion, but they have no revenue. You're like, "How is this happening?" It's because they have this grand master plan that everybody's bought into and all the VCs have kind of flocked to, and they're just supporting that because it makes money. It's going to flip from that, to which of these companies are actually healthy? Which ones have their eyes on profitability? Which of them have good gross margins and good unit economics? That's going to happen. There's a new onus, I think, on digital health companies to prove return on investment and prove value. I think that's a very healthy thing. I think we're going to see a lot of startups die over the next two years, is my guess, which could be argued good or bad, right? Depends on who you are. That's one.

I think two, which is a little bit more specific to what we're doing is, these rules that I mentioned are going to be really big changes. In the same way that before Plaid, you could not send $5 from your bank account to your friends. This will change in healthcare too. It's about to happen at the end of the year. Examples like with Plaid, Mint and Robinhood, you couldn't buy stocks on an app. What's going to happen in healthcare, is the big question. I think in the same way Plaid didn't know crypto was going to be a thing and that's like their biggest business, what do we not know in healthcare that's going to happen?

There's probably going to be some big changes in the innovative space because this data's been locked up since the dawn of time. As of October 6th of this year, it's no longer locked up. It is completely fluid and accessible by any developer, entrepreneur, or innovative organization to develop new things on top of this data. We're completely subscribed to this idea that there will be a Cambrian explosion of innovation in healthcare once the data is unlocked. We're super excited about that.

Ethan: How does a company like Particle Health scale? What's your next step in the route to get there?

Troy Bannister: I think our plans of scale have changed as of six months ago with the market collapsing. Again, the priority now is how do we turn this into a really healthy business, as opposed to a growth at all cost business? We're not going to hire as many people as we're planning. We're not going to go for revenue targets that we were planning for. We're going to go for really healthy steps towards really healthy business metrics. Scale isn't going to be as crazy as we were thinking six months ago, still, we're going to be doubling our team over the next 18 to 24 months for sure. That comes with a whole boatload of scale complexities.

The good thing is, we have a really awesome leadership team that's been around the block before. We already have a bunch of systems in place that can accommodate for a lot more people on the team. I don't think there's any more foundational changes we're going to have to make. I think there's a lot of tweaks and iterations and nuance that we're going to have to learn as we go. I think we have a really good foundation right now to double the size.

Ethan: Let me ask a quick question on that. It seems like this growth at all costs mindset has really been driven by VCs in the past 20 years. Are you seeing support from the VC side on this more sustainable, "Let's actually think about making a profit," type of business model or are they still saying, "Hey growth at all costs?" What's driving the VCs nowadays?

Troy Bannister: The biggest piece is now that the interest rates have driven up so high, buying cash is more expensive, right? From a venture capital's perspective, taking money from their LPs, the valuations of their companies have decreased significantly. It used to be eight to a hundred X revenue as evaluation. I mean, some companies are getting valued 200 to 300 X to their revenues. It's all built on hype. It's all built on herd mentality. It's all built on the shiny new thing. That works in that world. Now, the valuations are three to five X revenue, and it doesn't go higher than that.

Ethan: Wow.

Troy Bannister: If my portfolio just went down from 50 X average to five X average, I just lost 10 X of my value of my portfolio. The companies that I need to invest in and to support, are the ones that are going to have high revenue and high multiple values from that revenue. It's a new game. It's just a different game. The question though is, how long does that last? My hunch is it probably won't last that long. As soon as the interest rates go back down, the market bounces back, the VCs get a new flush of LP money. Their 10 year mandates to deploy that capital start to come towards the tail end. They're going to have to deploy that capital. I don't think it's probably going to go back to what it was a year ago, six months ago, which was just bananas. People were just raising insane amounts of money on nothing. I think it's going to go back closer to that, I do. It's a question of like, "Where does it land?" Different VCs are going to have different mentalities too, I think.

Annaka: Yeah. I learned a lot right there. All right. We're getting closer to the end. What is the biggest lesson you've learned as an entrepreneur?

Troy Bannister: Hmm. I've given most of them already I think.

Annaka: I was going to say, is there one or are there multiple?

Troy Bannister: I'll say this, it's hard. It doesn't turn off. There's no off. You're on vacation, you're still liable to work and jump in. You are at your friend's wedding, you might get an email that you might not have to respond to, but you might read it and it might put you in a really bad mood. It becomes who you are. That line disappears between you as the founder of the company, and you as an individual in the world. That's a hard thing emotionally and psychologically to constantly be dealing with. You're in the shower, you're thinking about work. You're going to bed, you're thinking about work. Like the other things, you have to build a muscle to learn how to turn it off.

At some point, usually I'd say around series A, you're starting to hire a head of sales, a head of operations, a head of marketing, whatever. You can start to offload some of that stuff. You have to figure out how to trust those people, because you are not going to be a healthy, happy person, and you're going to make bad decisions because your mindset's going to be bad, if you don't figure out how to do that. It's really, really important to figure out how to do that. You'll never be able to get it all off your table, nor should you, but you have to figure out how to be able to turn it off sometimes. If you don't, it's not fun. It should be fun. It has to be fun.

Annaka: Little purposeful disconnection never hurt anybody. What is your advice for entrepreneurs? If it's that, then you can say that one again.

Troy Bannister: Yeah. No matter how fast you think you're going to be able to start a company and get it running and sell it or whatever your goal is, it's going to take five times as long. Just believe that. It will, if not longer. Are you ready for a 10 plus year, really intense, personality changing experience? That's what it is. It's a heavy load to lift and carry with you for 10 plus years. Some people just love it, right? They're like, "I'm going to do this again. This is who I am. I'm happy with it." Some people are like, "I can tolerate it. I can live my normal life and I can figure out how to make this work." Some people are like, "I can't do this. This is just not for me." Who are you, and the sooner you figure that out, the better I think.

Ethan: All right. One last question and we'll let you get back to your afternoon. Is there anything cool going on right now in Particle that you want to shout out? How can our listeners support Particle Health?

Troy Bannister: Yeah, there's stuff I want to talk about, but I can't. I'll talk about, we are building a whole kind of new analytical layer on top of the data that we're able to pull from all these different places. I think it's really exciting because it's changing who we are as a company from an organization that can go get your medical records, to an organization that can tell you things about those medical records. That's a whole new world for us. It's a wildly interesting world to be able to pull, on average we're finding about 105 records per patient when we go look for their records.

Annaka: Wow.

Troy Bannister: What can you tell about somebody's health from that complete longitudinal history? I think that within six months from now, we'll have some really interesting stuff built out from this. That's really exciting for me because it's a whole new space for us to dive into.

Ethan: All right. Thank you so much. We're going to put links to Particle Health into our show notes and lots of other stuff that we talked about today, but that's going to be it for today's episode of the Startup Savants podcast. Thanks for hanging out with us today and now onto my favorite part of the show, the outro. Why is it my favorite you ask? I am essentially unchecked in what I get to say to you. Whoever thought it was responsible to give me this autonomy, should probably be punished. What am I going to do with this senseless excess of power? Well, I'll probably just ask you folks to leave us a five star rating on Apple Podcasts. That's not too unreasonable, right? I might also ask you to send your thoughts about the show in an email to podcast@truic.com, but that's about it. I guess maybe our producers aren't that irresponsible after all. I suppose I'll just do the rest like I always do. For tools, guides, videos, startup stories, and so much more, head over to truic.com. That's truic.com, T-R-U-I-C.com. See you folks.

Annaka: Bye.