SaaS Scaling Secrets
The SaaS Scaling Secrets podcast reveals the strategies and insights behind scaling B2B SaaS companies to new heights. Dan Balcauski, founder of Product Tranquility, leads conversations with successful SaaS CEOs, exploring their challenges, triumphs, and the secrets that propelled their businesses to the next level.
SaaS Scaling Secrets
Innovating in a Regulated Market with Mike Meng, CEO of Stellar Health
Dan Balcauski speaks with Mike Meng, CEO and Co-founder of Stellar Health. They discuss how Stellar Health is revolutionizing value-based care in the healthcare industry through innovative SaaS solutions. Mike shares his journey from a healthcare investor to an entrepreneur, his transformative moments, and the challenges faced in scaling in a regulated market. They delve into the intricacies of building trust with medical professionals, the unique dynamics of the healthcare market, and the importance of maintaining relationships and focusing on intrinsic motivations. This episode offers profound insights into the intersection of technology and healthcare, emphasizing the need for innovation while ensuring patient care quality.
01:10 Mike's Journey into Healthcare SaaS
04:03 The Mission of Stellar Health
05:57 Challenges in Scaling Healthcare SaaS
13:00 Building Trust in the Healthcare Industry
16:00 Navigating the Healthcare Ecosystem
19:38 Focusing on Depth Over Breadth
22:01 Monetization and Pricing in Healthcare
23:06 Value-Based Care Payments
25:20 The Role of ROI in Healthcare
28:18 Innovation in a Regulated Industry
30:53 The Future of AI in Healthcare
Guest Links
stellar.health
https://www.linkedin.com/company/stellarhealth
Welcome to SaaS Scaling Secrets, the podcast that brings you the inside stories from the leaders of the best scale up. B2B SaaS Companies. I'm your host, Dan Balcauski, founder of Product Tranquility. Today I'm excited to speak with Mike Meng. Mike is the CEO and Co-founder of Stellar Health. A rapidly growing healthcare SaaS revolutionizing how medical practices deliver value-based care. Before Stellar, Mike was a principal at Apex Partners, where he deployed over 3 billion in capital and served on the boards of several leading healthcare companies. Mike's combination of deep healthcare investing experience and entrepreneurship gives him a unique perspective on Scaling B2B SaaS companies and regulated markets. Let's dive in. Welcome Mike to SaaS Scaling Secrets.
Mike Meng:Thanks for having me, Dan.
Dan Balcauski:I'm very excited for our conversation today. As we were chatting just before we hit record, I think you are the first tech representative in the healthcare space. So very excited to tread some ground that we haven't before. Before we do that just you gave folks a little bit of a taste of you in the intro, but tell us a little about your journey in the SaaS world.
Mike Meng:Yeah, so, investing in a lot of different companies, again, as you referred to in the healthcare space, looked at a lot of healthcare EMR companies, right, which is probably the closest thing to true SaaS that I can think of in the space. Love the space. I think it's helpful. We've digitized a bunch of information now, which is great. And then, I had this problem where. I felt like I was not doing enough to change healthcare. I think it was great to invest, sit on boards, hopefully make some money doing that. But I think that it dawned upon me that I need to do a little bit more, and the only way to do so is to get your hands dirty, get in there, really try and change the company and the world. It actually coincided with my, the birth of my first child, my, my daughter. And I think that was a changing moment for me where I said, you know what? I life is great and all that stuff, but I want to truly do more for the world. So that's what got me into it.
Dan Balcauski:We all have transformational moments in our lives. I think of him as a superhero transformation moment. I'm Peter Parker's. Normal high school student, I get bit by a radioactive spider. I wake up the next day. I'm Spider-Man. What moment was that for you in your life? Feel free if there was a, the birth of your daughter, or maybe it was some other moment for you on your journey.
Mike Meng:There's so many. I think personally I subscribe fully to what you just said, except I would also say I. For a lot of people and maybe a lot of superheroes. It's a series of these things. So I don't think it's one. I think Peter Parker also had like maybe five more right after being bit by the spider. So my point here is I think certainly the birth of my daughter the big issue there I think is you really wanna leave the world a better. Place than you found it, I think. And so when you have, you're carrying your child your first time, you're like, oh my gosh, is the world going to be better in 30 years or worse? Right. And I think those are some of those moments I would point back to though others. I mean, I think every entrepreneur that's ever changed how we do things is amazing to me. Like a early hero for me was Bill Gates, not because he was a billionaire, not because of all these things. But if you are old enough to remember the green screen and non gooey interfaces with computers, it made computers only so accessible right to everyone. I. And then this thing called Windows and maybe it was off of Apple, right? We all know these things, but and Microsoft Office, all these things. But it made it absolutely accessible. It made it that everyone needs to now use a computer, et cetera. We've obviously certain seen that with the iPhone. To me, that is the heroism in all this is you're changing how the world does something in a very profound way. That's what I think I it really is.
Dan Balcauski:Yes. I am old enough to remember the kaban prompt only version of interacting with computers back in the day. And yes, I agree. The, there's only so much. Of an audience you're gonna attract with that sort of interface. So well, well, well noted there. Well look I, I do wanna talk about Stellar Health. Before we kind of dive into the meat of the Scaling, the company, et cetera, can you just give us kind of a 32nd overview of what is Stellar health and obviously plays in the healthcare space. But what is the mission, vision? Why, what, how'd you end up there today?
Mike Meng:Yeah, start with a little bit with the product real quick. Is that. When we ask these doctors to do what we call value-based care activities or value-based care, they're supposed to do all these extra things that are better for you, your patient, to keep them healthy instead of worrying about taking care of them when they're sick. The problem we have in healthcare is we don't pay them for that. We actually just pay them for doing more volume today. So what Stellar does is we partner with health insurance companies, we get some money from them. We pay that out to the doctors who really make that happen. So example, perfect example. Dan, have you ever been on a breast cancer walk where you raised some money for breast cancer or someone who had breast cancer? I.
Dan Balcauski:Not me personally, but I know people who have.
Mike Meng:So pretty popular thing to raise money for. Right? And it is an important one. The crazy stat is women over 50 should be getting a mammogram every other year. Yet 35% of the women in this country of that age do not do so. So it's kind of one of these like sad things where you could catch the breast cancer early. That would really save lives and prevent costs, and we gotta do more of that, right? And so what Stellar does is we pay doctors whenever they get things like that done. And that's super important to keeping people healthy and alive and having a good quality of life rather than in this, in the hospital sick bed.
Dan Balcauski:So helping to incentivize some of the proactive behaviors that can be much more cost effective than the reactive ones when the reactive ones tend to be, I guess, high dollar value, much
Mike Meng:too late. Like a little, too little, too late, right? Yeah.
Dan Balcauski:Lower risk of positive outcomes and more expensive for that. So a whole bunch of bad mix. So going back really appreciate you helping to move that there. I guess, you, you did spend some time on the investment side of the fence, I guess, and now you're, leading, growing, stellar health. I guess what surprised you? Most about being on the other side, sitting at the CEO chair that maybe you wouldn't have expected being in the in the investor seat.
Mike Meng:Yeah, there's so many Dan here, so we could spend the whole time on this alone, but what I would say is how much people matter, right? I always cared about people, and I'm kind of proud of the fact that even in investing I was viewed as a good manager and a lot of the people who work for me wanted to work for me again. So some of'em actually joined me here at Stellar and whatnot, so I'm very proud of that. I think. But when you have a company and you have all these employees, like just every employee matters, all these people are real. Like you can't just make these decisions and think that they don't touch real people. Like that is the most profound piece of this is how responsible you are for these people as a whole. I think there's further lessons like how to actually actualize the thing you're trying to build. Another big one for me lately is if you've ever read like Paul Graham essays on Maker Time. Like, I increasingly clear my calendar and want just blank maker time.'cause I think it's super important as you're building something versus just being scheduled back to back and being someone who assesses something. And I think that's actually a decent difference that I've even myself evolved a little bit more into.
Dan Balcauski:Well look, every CEO faces Scaling challenges along the way. Is there sort of a particular challenge in the course of seller health that's really stood out to you? A maybe a crucible moment that's kind of made the company who, what it is today?
Mike Meng:Again, so many to name. I mean, just to tell a story real quick, early on, trying to sell to health insurance companies and tech is just one of the craziest things. I remember when a lot of our early investors were like. So Mike, let me get this straight. You want to sell to doctors and then really insurance companies, and then you wanna hope that all these people are gonna do all these great things, do those actions that we just talked about, and you're gonna get some big, like result from this. Like, how long is that gonna take? How long is the sales cycle? And I, that was frankly nuts, right? I think the average sales cycle in our industry is maybe somewhere between nine and 15 months. So we went. 15 months without a sale. Right. At all. And I think eventually we're very proud. A big, large national healthcare health insurance company gave us a shot. We proved it to them, and then we kept going from there. But I think there are, there have been those dark moments where, you know, one of my co-founders at the time said like, I don't know if this is gonna sell. Like, I just don't think they're gonna buy someone, buy something without credibility. Like I, I mean, it's not that it doesn't work, it's that no one's gonna give us the shot at it. And so, dark moments like that certainly exist. I'd say the other thing that's really difficult in our space, healthcare particular is how much of it is truly driven by technology versus still people and processes is a very big question. Right? I think the only pure SaaS in this, in our world actually is the hospital EMR system, right? They're epic, Cerner's, Athena's of the world. Those are all real, but I would say that a lot of the other solutions that are technology based. Have not truly been SaaS. And I think that's one of the challenges we face this challenge, frankly, which is you can't just do this without any people. Like, it's not like people just install the software and start picking it up. And I think that is one of the challenges. There's going to be some people involved. How do you make it so that it's still software driving the vast majority of the outcomes rather than necessarily people?
Dan Balcauski:Well, you dropped a whole bunch of good sort of, outlines and breadcrumbs there that I don't know if we'll maybe have time to follow up on all of them, but, so just within there, healthcare is, obviously it's a juicy market. We're, I don't know, it's what, 17% of the US GDP or something like that
Mike Meng:$4 trillion.
Dan Balcauski:So it's giant. But, it's also notoriously difficult. It's highly regulated. It's conservative has dominated by large, incumbents, the epics of the world, et cetera. Right. And can be very difficult as an upstart. And you mentioned. You know this kind of slog of the sales cycle. I guess, what's been, I guess, most surprising to you about getting doctors and medical practices to adopt, new technology? Like what have you kind of learned on this journey?
Mike Meng:I mean, you've hit some of the nails on the head, but I will expound. Absolutely. So first and foremost, there's been. A myriad of solutions thrown at these doctors, in some cases shoved down their throat, right? So they didn't necessarily ask for it. Obviously there were a lot of subsidies to do so, so that's been a little tough. I would also say that doctors in general, and rightfully so, have a lot of doctors in my family are pretty wary of. Of outsiders and business people it's a lot of like, what are you going to sell me that's gonna rip me off now? And that's a tough mindset to change. Right? And on top of that, they're pretty burnt out. They've been asked to do a lot of work, a lot more administrative burden. And that's one thing that we think a lot about in our product design, which is. Like sometimes I don't even like when people think about zero clicks or let's try and reduce the clicks. Reduce the clicks. I think of it as how can we do this without clicks? Like how can you just not have to do some of this stuff? Is one way I think about this that helps. But I think it's just, it's a tough one where we've asked too much in terms of usage of different software and throwing these things at them that a lot of our doctors don't want another thing. So that's one of the headwinds. And then on the other side of the industry, on health insurance. It is insanely conservative, right? And rightfully so, probably in many ways, these are people who you're playing with people's health and lives, right? So you gotta be really careful and respect that. I would say I wish that the industry saw a little bit more whenever there was like some real proof points and traction though. That they picked it up a little bit faster and scaled it a little bit more. That's the area that I think we want to prove out that I think hasn't been there. Which is that this these results are repeatable, they're scalable, and they're systematic rather than just it worked here in this one moment. That's the big problem in healthcare. A lot of academic studies, you go to, like any of the PubMed and just read academic literature, but the problem is they always describe like one instance, one place where it happened. And I think that's the thing that we're trying to tackle at Stellar, which is how can you make this nationwide everywhere? It always works.
Dan Balcauski:So a couple things you mentioned there, right? I mean, a lot of them on mindset they've been, they've been burned or feel like they've been burned at least, right? Both of those perception is reality. So, so some high skepticism. And they're already dealing with a lot of administrative burden or more so maybe than they signed up for it when they were going through medical school and maybe starting their. Their practice whether that's, government enforced or, enforced just by the realities of the marketplace. So, but obviously you've had some success, you got past that 15 month sale. I guess what approaches have you found successful in building trust with these folks despite that mindset?
Mike Meng:Yeah, I think a big piece of this is, first of all, credibility. You do need it in healthcare. Track record matters. So like, one of the things is I do tell my team like, we gotta go nine and oh or 10 and oh, like, you can't just have like a. Eight and two record, and think you're okay. And so I think like we really wanna make sure we're always delivering everywhere. That's a big piece of it. We have credible investors, backers people on our board of advisors. That always helps too. And then I think one big piece that has helped us a lot is. Being pretty transparent about things. So you won't see people at Stellar. This is maybe a cultural point, but you won't see us misrepresent things. You won't see us try and stretch the truth. I'm a big believer in intellectual honesty and just telling it how it is or where it is. This starts in the company, so we always do it internally. We tell people, here's where we stand, here's how we're doing. We share it pretty openly. And I think that permeates out there. So you don't have the, doctors wondering. What's going on? Like, are you sure you're not tricking me? And all this stuff. Like one example is in our system we pay out these things called stellar value units. SVUs, every time you get one of those mammograms done I'm a big believer in the like wizzywig concept here of what you see is what you get. Meaning if there's a bug and something happens where what was displayed was wrong and we kind of mess that up. You're gonna see us eat it just like a really solid four Seasons hotel or a credit card that's on us. We made the mistake, I'm going to eat that. I don't go back and try and like fight you on it, et cetera. So kind of what the app shows is really trusted. I think that's a really important point of like preserving that trust in the sanctity there. And that's something that's really helped us as well.
Dan Balcauski:I that reminds me, I think there was an old I think it was it Nordstrom's or Macy's? I think it might've been Nordstrom's, where they had, they will accept any return policy and there's some legendary stories about them accepting returns for stuff that they didn't even sell just because that was their commitment to making sure the customer felt happy about the situation. So having that demonstrated ability or willingness to make sure the customer walks away happy, even if it. Even if it wasn't your fault, right?
Mike Meng:That's exactly right and any time one of our customers says, Hey, can I get a report on all the transactions that were earned? We have that ready on the fingertips, that's ready to go. You want to audit it? Like we're not, we don't want to play the game of, well, let's move things around. Let's make some mistakes here. This is pretty serious stuff, so we're gonna be pretty transparent about all those things.
Dan Balcauski:And so I, I am curious too,'cause we didn't really touch on this before, but you hinted at it where you do have, you got the insurers the insurance companies and then you've got these the doctors and medical practices. And. Then you guys are sort of playing between those two. Is that, am I understanding that correctly? Because that's a little bit different, right? I mean, for most, most ask, CEOs have to think about one customer, and maybe they've got, the marketing sort of IC user, and then they've got their CMO buyer, right? So they've got like that differentiation, but you're actually kind of straddling multiple organizations in your go-to market. Am I understanding that correctly?
Mike Meng:absolutely correct, and maybe Dan, let's step back for one second, right? So if you want to serve healthcare, you have to recognize that there's always an extra business partner. At hand. What I mean is most of us, you and me, we don't pay for our own healthcare like usage directly. We pay for health insurance, which then doles out that money to these doctors. And so there's an intermediary that always exists here, and it's an important one because what it leads to is. Every single situation in healthcare real healthcare is a three-Way program. Like no matter what you want to say or do, just like you have to then get this big deductible question or the bill like that happens, and that's part of healthcare. It's a big piece of it. And so just remember that there's always these three partners, and then what you described is exactly right. Therefore, we have to sit somehow between those two. In the end, our health insurance companies stand to gain if all these quality things get done and they get kind of more dollars for having being higher quality and all these things. And we then want to pass that money to the doctors who are making that happen. The other interesting dynamic that happens is the health insurance companies, as much as many of them have moved further and further down towards the care delivery space, which I'm supportive of. At the end of the day. Most healthcare is still delivered by doctors like you and me, or that you and me go see. And so, health insurance companies need to find a mechanism to actually get them, to compel them to act in this better way. And so that's a core part of this is that health insurance companies cannot do it on their own. They have to actually go reward people or compel others doctors to go do it. And that's what we really enable. We sit there particularly making that happen.
Dan Balcauski:So a and I guess, you know what, and help us understand a little bit.'cause this is a really different dynamic than I think a lot of other companies in other spaces have to deal with. Like how, as you were kind of growing stellar health at early days, like how did this. Make change how you thought about your going to market. Like, it's like, okay, we, because I guess one another model, right? You've got you think about like two-sided marketplaces where I've got like Uber, right? I've got the drivers and the the riders, right? And I've got a match supply and demand, right? And so, you end up with this thing called this Cold start problem, where it's like, all right, do I go just try to get a bunch of drivers and then, in a city, and then I try to worry about getting a supply later or. Or vice versa. It's not exactly the same thing you're in, but I can imagine you've got some kind of similar dynamics. Help me understand how that affected how you guys thought about growing in this space.
Mike Meng:And Dan, you hit the nail on the head. I think in many ways we are a two-sided market. We did face a cold star problem, so I'm actually now a incredible student of all two-sided markets ever built. I've read every book and academic paper you could think about. You can find on this stuff and you're absolutely right. That is true. And what's really odd and interesting about our business is we are a two-sided market. And then the real challenge in Scaling this is we need to efficiently monetize on the fact that we have the two sides in particular. And that is the SaaS part of this. Right. And I think one of the things, just to answer, kind of some of the thoughts earlier on some of the challenges, I'll come back to one, which is sometimes our health insurance companies. Made us go too spread thin and wide. So they were like, why don't you go here? Why don't you go there? You can imagine being asked to go to Alaska and Hawaii as well as where we are today. It's like you're starting to spread your resourcing very thin if it's not pure software. And that's what I was referring to. And so it actually led to I'd say some profitability challenges in those situations. And we've now come back around to say, let's actually make sure we exploit the solid relationships we have between payers and providers where we're already connected and let's actually add to that and really add more SaaS to those situations. So kind of going deeper with each provider rather than just going so wide. That is actually one of the problems we faced. And we've actually been, kind of more focused down, so there was a period in which we grew really rapidly. From 2000 providers doctors to 10,000 in one year. And, that spread our team incredibly wide and thin. And now we've kind of slowed down the number of providers we've adding. We're still adding them, but just a little bit more careful about it while adding more SaaS to the existing base. Instead. It's actually what that results in is it's better for the doctors. They actually get more running through the same stuff. It's better for the insurance company'cause they get better performance and results overall. And then better for us because we're more effectively and efficiently covering the fewer number of doctors out there that we work with.
Dan Balcauski:That's so it's fascinating. So you have, so yeah, there may be geographic dispersion, kinda using your Alaska, Hawaii analogy. But there could also be other kinds of services or other, workflows, et cetera, that maybe, you're. It, I used to be, had a product in a two-sided marketplace, and there's a lot of work that I had to do with product was a lot of just digitizing what otherwise were just Zendesk tickets. So there's a lot of humans in the loop. So I can imagine you get, as you get spread out no matter how it might be that, you you're having to add people instead of adding,
Mike Meng:That's exactly right. You literally understood it. Exactly. And that's where, again, we're still growing now, went up to about 16,000 doctors that use it. So we are adding. But we're just a little bit more cautious about it and therefore concentrating more of it on the existing part of it is that's also where like, the more you add density on an existing doctor, I. The more mindshare you get of theirs and they get more excited'cause they're earning more money from doing this. So it has all these like win-win win benefits for doing so. So that's the thing that we kind of watch for. In, in two-sided markets speak, it's kind of like the power law, the Pareto effect. Here's the 20% that really drive 80% of all the rides. We think about that evermore and really focus on the right providers that that are really engaged and working pretty hard with us.
Dan Balcauski:There's so many threads here. You've mentioned kind of this monetization aspect. I do wanna touch on kind of pricing'cause Yeah, it's, healthcare is so weird where you have these. Crazy economic situations that don't really exist in many other markets. Right? Like if I my doctor says, Hey, Dan, you have to get this test. It's like, okay, I guess my doctor's helping me get this test, but it's the only service I ever. Maybe I even go get the test before I even know what the price is. And that's completely different than any other Yeah, that's different than any other marketplace. Right. And I mean, I know there's been attempts to try to solve that and get transparencies for things like, oh, like where can I shop around and get an MRI, what's, what kind of the most cost effective or other things like that, I guess. Talk to me a little bit about what you've learned, because I'm trying to also tie that, I guess before you were talking about these these value units that these credits that you're actually incentivizing on the healthcare providers. How, tell me what you've learned and how did this come to be where you're, it sounds like you're,'cause you're taking money in and then also paying it out to these providers as well. Help kind of tie this together for me as with this weird economic situation we've been discussing.
Mike Meng:Sure. So the good news is maybe we don't run inside that normal part of the, paying for healthcare part of it. We actually purposely by design wanted to operate outside of that in this area called more value-based care payments. So we kind of keep the, what you just said to the normal payer provider relationship. Usually it's be, it's pretty contentious. People fight over that point, so I don't want to get involved in there. Instead, this runs through what we call value-based care dollars. It's a separate point. And to your exact point, what we are doing is we're paying out anytime they're doing the right thing overall for the patient. These are, by the way, government defined star metrics quality. They're not made up. They're kind of pretty well established. I think the thing we wish we did more of is more of it as a whole. And so that's what we're really incentivizing these doctors to do it. And I think what it leads to is. The doctors are actually more engaged in doing this if they see the immediate reward for doing so, versus the way it's kind of paid for today is contractually, if we all hit our stars the next year, you'll get this big bonus check, which is like kind of crazy, right? Like, who's gonna wait for a bonus 18, 24 months from now to like get the feedback loop that it worked. What Stellar's really doing is it's giving you the feedback loop sooner so you know that's, you want to do more of that stuff. And that's what gets the kind of engagement level and kind of results that we see here. And then I'd say the really interesting part is we get measured in our industry quite heavily on ROI, meaning it has to drive better quality, right? It has to drive those mammograms, it has to, you have to hit those things. And so we're measured pretty closely on these things. We're very proud of that. That's like a piece where I think relying on this amorphous ROI over the next 10 years is not something that's gonna win. No one can put, on their finger on that. Whereas here, what we do is we focus on like immediately driving the quality stars up, et cetera. And that really helps again, the story and whatnot. It's actually what our buyer, I think is buying ultimately, is they're trying to make sure they buy that engagement. From the doctors that they do these extra quality things, which again, in turn leads to that ROI.
Dan Balcauski:Well, I'm actually very curious about this ROI conversation. So, like how do you think, or, maybe this is just sort of dictated on, on above or like, how do you think about demonstrating ROI in a way that everyone can trust? Because you said like this is what the people are actually buying. Like, is there. Like, is that, are there just ways that like sort of government mandates, everyone sort of has these ROI measurements or are there ways that you've sort of built the company to help make that more apparent?
Mike Meng:Yeah, we follow like, kind of again, a lot of the well traveled paths of the government defined points. But like an example would be the government does give a bonus if you get to, let's call it five stars on mammograms. The example I've been using that might be you have to get out of your population. You need 93% of those women to get that mammogram done, right? So it really matters to get 93%. And maybe the population starts at 60%, meaning out there in the wild, if you do nothing at 60%, our job is to move that 60 to 93% by prompting these actions. And when we do government's happy,'cause you hit their star metric. Insurance companies happy'cause they got rewarded for that. And that is fairly measurable in our industry.
Dan Balcauski:That's fascinating.'cause I mean, it's one of these things that, I think you have a, a. Well, some would call it a blessing, some would call it a curse. Like the government is sort of helping define these metrics, but they are like, they're very clear in terms of how the end person gets value. And I find that for so many SaaS companies, that's just so fuzzy. So I think that there's. Even if you're not in healthcare, I think there's so much value of looking at, what companies like you or, other companies in the value-based care space are going through. Because there really is a concrete way to sort of think about, the ultimate outcomes that you're driving for customers.'cause it's like, oh, well we, we help you be more efficient. Right? And you're like, well what does that mean? Like,
Mike Meng:Well, and I think you're right. I think you're right, right. So we use Slack in our company and love the company, and we use it. I'm not sure I get exactly what the ROI is for us having me on Slack. Right. I don't really fully understand. I know we, I guess we have to buy it'cause everyone's using it. Right. Like, but like, I don't fully get it. In our industry it's, I'd say very dollars and cents. I mean, it is like you get. A certain extra bonus payment for hitting certain metrics. These metrics, by the way, are also defined from academic literature. So I mean, there's a lot of smart doctors who've studied what works and what doesn't work, and then help the government define these things. So, yeah, I think in our, because of that we have to live or die by like the real results in the real world. It's like an example. Another example would be. Smoking cessation, we gotta get a certain number of patients to quit smoking. Like that's just real. Like you gotta get those patients off the smoking cigarettes or off of the opioids. You don't really get a choice to say yeah, I think I helped in general on this one. Right? Like it's literally counted in the number of people still smoking or the number of people still on opioids.
Dan Balcauski:Well, I, so one other thing I wanted to touch on in this world of healthcare, is innovation kind of running into a highly regulated industry? Like how are you thinking about. Being able to actually, make a change in this, in these industry when, it seems like it, it's heavily locked down. And, you have everything from ROI measurements dictated by the government. So, how have you sort of thought about that, and I guess, what do you see going forward for ways that the industry could get better about this?
Mike Meng:Yeah, I mean, I wish the government would look at this a little bit more in terms of helping facilitate safe but innovative ways to attack all the problems we've talked about today. And what I mean by this is, I. I respect. Again, we're talking about people's health here. We gotta be very cognizant and careful about what we're touching and changing here. But on the other hand, we need this innovation, right? You referenced it, but healthcare is becoming 20% of our entire GDP. It's$4 trillion. We gotta contain it. We gotta figure out a way so that this doesn't get out of control. And I think the best ways we can do so are gonna come from innovative entrepreneurs out there, and it has to be probably technology driven. I always say this too. Technology is actually deflationary for almost every industry. I. Except for healthcare and like education in which technology tends to be inflationary, which is kind of a problem. And I think that's, it's partially driven by we have to be thoughtful about where we can take out cost burden, whether it's fraud, waste and abuse, ways to apply technology to that ways to make sure we actually are getting the best care to the right people whatever it may be. And I think one of the big things, right, I have like, as a, as an issue is. I think we need to update some of the laws that we have around, for example, hipaa, which I love. hipaa. HIPAA privacy, health information privacy is so important. Protective health information. PHI is super important. We should all care as Americans about privacy, but we should also be thoughtful about how can we use the data to come up with more innovative ways to attack the problem, and especially with the advent of ai like. I think we really need to think a little bit harder about this one. Again, protect people's privacy. Yet make those tools and ability available to people. That is, I think, where we need to play. And again, it just it's a law That's, it was a great law. It's a little outdated today. We gotta update it so that we bring it into the future. If you follow the machine learning AI stuff. It's incredible what it can figure out quickly. Even on like contracts and law right? Or other domains. Like we need to apply that here on healthcare. And let me be clear about what here means. I think on healthcare delivery in general, I think there's a lot of use of AI and like biotech and the discovery of drugs. That's great. And like we need to keep doing that. But I'm talking about just the good old, when you go see a doctor, how do you get paid? All those different things. There's a lot to be fixed there that I think we need to attack.
Dan Balcauski:Well, it just just to give me a little bit more, or audience a little bit more concreteness around that, like, so let's say, HIPAA got modified, got changed. Like what are the applications you see in, in healthcare delivery that AI could really unlock? That something that like the current regulatory regime is sort of preventing.
Mike Meng:Yeah, I'll give you a really simple one. Today we allow kind of a, an interesting thing that happens is like two medical devices or two different drugs that compete in say the same category, we kind of just go with like, they kind of put out some studies, they kind of just say, yep, I do it better. And then they market the hell out to the doctors, right? And then some of it on even ads. And then the question for you as the ultimate patient or recipient is, which one should you get and why? Like, did you get that decision? How did you make that decision? How do we as a society make that decision? And I think that's one where if you ran AI or machine learning on all the outcomes that have actually happened, when people have installed this in like say a pacemaker into your heart, like you would see one of'em actually is better than the other one. Let's go with that one more, right? Like, I think those are just like real ways that you kind of. Get to decide these things. And I think the data really matters on really long timescales, really large amounts of data. That's the kind of thing that I think is really interesting about this stuff. It's looking at the real world evidence of like what happened in the situation when people tried one therapy versus the other therapy.
Dan Balcauski:Yeah. And there's so much have I've spent enough time on different subreddits for, for people discussing, different medications. You're like, oh God, I this is not the way, we can't be, we can't be relying on this. There's gotta be a better way to, to sort of surface like what's the the best mix. And yeah, I mean, you already mentioned, I mean, doctors are already stressed. They try to keep up to date, but, there's, I mean, how many, medical papers and innovations are happening every day. There's no sort of perfect source of information. So, is there a way we could smartly unleash the AI to help us
Mike Meng:Well, there's an answer to these things. That's the thing, right? Like it exists out there. We just don't know the answer yet. And so instead we ask all these doctors to keep up with continuing medical education and reading all these papers and trying to keep it in their heads. Like that just sounds kind of insane when you step back and think about that. I.
Dan Balcauski:Well, Mike I could talk to you all day, but I do have to start wrapping it up to be respectful of your time and our audience. Are you ready for some rapid closeout questions?
Mike Meng:Yeah, let's do it.
Dan Balcauski:Alright. How do you think about defining success for yourself today?
Mike Meng:A call back to what I said earlier. I care that when I leave this earth that we positively impacted as many people. Out there as possible. And that's all the way from my own children to, the basketball game, my plan and the weekends, which we like each other a lot to hopefully changing an entire industry. So I think all our goals should be trying to leave the better the world, a better place than where we found it, as much as we can.
Dan Balcauski:Amazing. When you think about all the spectacular people you've had a chance to work with, is there anyone that just pops to mind? Is that a disproportionate effect of the way that you think about building companies?
Mike Meng:Yeah, I mean, look, I think we're coming up on Thanksgiving, right? And I think gratitude is something that's absolutely important to me and the values I had. I do want to thank, like my parents, my mom and dad, they've. Always supported anything I wanted to do and made sure that even in failure I always saw that there was light at the end of the tunnel and. Get back on the horse, which I think in today's world is a pretty hard lesson. I worry about it with my own children. In terms of making sure they internalize this. If you've ever seen, there's this great Angela Duckworth on grit, right? And you really want to teach your kids grit. And I believe in all those things and I think that's where I think my parents really instilled that in me and my brother and I. That's like a gift that I don't know. I hope I live up to that with my kids.
Dan Balcauski:Installing resilience in your grit in your kids. I love it. And thank you to your parents for helping put that into you. So, look, being a CEO founder can be challenging spiritually, emotionally, physically. Are there any habits you've cultivated to help you stay at the top of your game?
Mike Meng:Sure. And here's a couple things that I will impart that I think are important. I am also a subscriber into maybe Simon Sinek, the Why, but we actually talked about this as a company, but in the darkest of moments when you're not sure where you're going understanding what is it that motivates you and why you're doing it is just absolutely critical. So I leave that as an absolute, just figure that out for yourself. It's important. It's really the intrinsic motivation. A second one is relationships matter. This is actually a stellar value. But I've thought about this a lot. Why is it that relationships matter? They matter, obviously because of all the things you can think of, of why they matter. But I would also add that healthcare, and I'd say a life is a repeated game. What that means is you're not just here for one transaction. You're not here for the next year's transaction. The reality is you're here for a lifelong of continuous interactions. And so you have to choose whether you want to screw one over and leave it that way, or if you believe what I believe it's that these relationships matter. It's a long-term discussion. Dan, you and me, even like, we end up not working on together on something, but we stayed in touch and look where we are here, right? So I think these things matter and that's something I think to live by. And my final thing for anyone who's looking to start a company out there or a CEO is I've learned the hard way that saying no to doing things. Is way more important to saying yes. That's how you stay focused. Like eventually there's a myriad of things you can say yes to. Yes to this, yes to that. And actually more important is learning how to say no. And again, learn that the hard way and really find that important.
Dan Balcauski:Some great nuggets there. And man, yeah we could have probably full episodes on each one of those but we'll leave them there. For our listeners, this has been fantastic. Mike. If folks wanna learn more about you or Stellar Health where can they do that?
Mike Meng:Stellar health.com is great and our team is looking forward to partnering with you in every community to really bring these value-based care dollars to make the healthcare better.
Dan Balcauski:Well, as an American citizen who is paying significant money in that healthcare system, we are all rooting for your continued success. Everyone that wraps up this episode of SaaS Scaling Secrets, thank you to Mike for sharing his journey, insights, and valuable tips for our listeners. If you found this conversation as enlightening anxiety to remember, subscribe If you don't miss out on future episodes.
