🎧🍌 Making Healthcare a Product, Not a Service | Adrian Aoun (Founder and CEO, Forward)
Discussing the poor incentives of health insurance, why tech has a negative ROI in healthcare, being Larry Page's right-hand man at Google, and building an operating system for healthcare
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Adrian Aoun is the CEO and Founder of Forward. Forward is rebuilding healthcare as a product, not a service. Forward has publicly announced raising over $220 million to date, and is supported by investors like Founders Fund, Khosla Ventures, Softbank, Expa, Marc Beinoff, Ashton Kutcher, The Weeknd, Lee Linden, Josh Kushner, First Round Capital, Eric Schmidt, DCVC, and more,
Before starting Forward, Adrian worked as Larry Page “right-hand man” at Google to setup and launch new companies inside of Alphabet. He joined Google through the acquisition of his AI startup Wavii, and spent his first year at Google helping create and build its AI division. He was on the President's Council of Advisors on Science and Technology, and invested in many breakout companies including Stripe, Uber and Anduril.
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In this episode, we discuss:
How health insurance leads to poor incentives
Why technology has a negative ROI in healthcare
The founding story of Forward
Why healthcare should be a product, not a service
Building doctor's offices like Tesla builds cars
Being Larry Page’s right-hand man at Google
Building a “healthcare operating system” like Apple builds the app store
Adrian’s contrarian views on the food industry
Why animal farming is a bigger climate issue than you might think
Why Adrian’s so impressed with Zuck
Follow The Peel on Twitter, YouTube, Instagram, and TikTok.
Thanks to Zac and Xavier at Supermix for the help with production and distribution!
Transcript
Find transcripts of all prior episodes here.
Turner Novak: Adrian, how's it going? Thanks for joining today.
Adrian Aoun: Thanks for having me, man. Glad to be here.
Turner Novak: To kick things off, can you talk about how the healthcare industry in the US works?
Adrian Aoun: Yeah. Oh God. “Works” is a big word. Let's go with “Not works.” I'm going to give you maybe a little like of a history lesson, and I think I'll probably get this 80% right. So basically the way that it worked is back in the day – think back to like World War I or World War II – what happened is we didn't have this national healthcare system that we have today.
Instead, what happened was, there were employers, like you've heard of Kaiser. Kaiser was this pretty successful entrepreneur not even having to do with healthcare. And they were creating these local health care systems that people were either paying monthly into and it was good to go, or they were not paying monthly and rather paying for services, fee-for-service.
Turner Novak: So this was pre-insurance?
Adrian Aoun: Yeah, way before insurance. And then something really interesting happened. Basically in World War II, we lost an enormous amount of people in this country so when everybody was coming back and businesses were trying to get going again, they were like, “Well, shit, we gotta compete for talent.”
Because there wasn’t an enormous amount of talent, they were just hiking up the wages and being like, “I'll pay you more.” “No, I'll pay you more.” And all of a sudden the government was like, “Uh oh, this is going to cause a problem.” So then the Fed or Congress, somebody I don't know, was like, “Nope, we're putting a salary freeze across the entire country.” I know it's kind of wild.
Turner Novak: It’s like a salary cap in sports.
Adrian Aoun: Yeah, totally. Exactly. But I think the way it worked was whatever salary you're paying today, that is now your max salary. Every good entrepreneur, every company out there was like, “Fuck this. I'm going to come up with other ideas.”
And so they said, “Okay, well what else can we do? We could start giving these things called benefits or perks. You’re paying for healthcare? We'll pay for that healthcare.” So basically they’re side-loading comp to the employees. Each step of this along the way, it’s totally fine.
But here's where it starts to take a turn for the worse. The government looks around and sees that a lot of companies are giving their employees healthcare. We like our citizens having healthcare. So then they actually said, “That thing that you were doing voluntarily? Let's go ahead and let's make that mandatory.”
Now it becomes the law that you have to have healthcare via your employer as long as the employers of above a certain size. But now you're living in a country where basically your employer, no matter who you are, is probably paying for your healthcare – that's the vast majority of healthcare. In some ways, that kind of sounds awesome, right? Each step along the way, this was a good decision.
But now let's take a step back and let's think a little about like the world we've ended up in. My girlfriend, she comes up to me sometimes, and she's like, “I didn't get a checkup this year.” I don't sit there and go, “Oh, fuck, you're going to die!”. I look at her and I go, “Nah, you should go to the doctor.” But let's be serious – I'm not sure it makes that much of a difference.
And you're like, “Well, wait a minute. Why have we intuitively learned that maybe healthcare isn't doing that much?”. You see how many of our friends are out there being like, “Don't worry. I'm really healthy. I drink organic smoothies and I use Method soap.” And I'm just sitting here like, are you fucking kidding me right now? Organic smoothies are a cure to cancer? Method soap is our cured cancer? What's going on?
And it all comes back to this funny thing, which is that your employer's paying for your healthcare. And you go, “But wait a minute, why does that even matter?”
The average tenure of an employee with their employer in the US is shockingly short. It's like two and a quarter years. So if you think about it, if that employer is paying for your healthcare, what they're focused on is things that are going to happen in that two-year period.
(2023 US Tenure Distribution per Zippia.)
So when I was at Google as an example, they came around every year and they were like, “Time to get your flu shot, Adrian. Time to get your flu shot!”. Everybody's talking to me about these goddamn flu shots. Is there some huge rash of flu deaths going on that I don't know about? No. So what the hell are they doing?
Well, really what they're saying is, “If you get the flu, you're going to miss some work. We're out a couple bucks. Maybe you get somebody else sick. That's causing us problems.”
But how many people do you know who are dying of cancer or heart disease? Literally everyone, right? These are the biggest killers in the world. But Google never came up to me to be like, “Adrian, let's talk about your blood pressure. Let's talk about your cholesterol.” Or, “Hey, we're Google, we're advanced. Let's go ahead and sequence your DNA, maybe understand the cancers you're going to develop over time, or other illnesses.”
They didn't want to talk about that. Why? Because that's not going to happen in that two-year period. That's 10 years, 20 years, 30 years out. And they're like, “I'm not going to fucking spend money now to help the next guy, the next employer, save some dollars. That makes no sense.”
And so what we've done is we've created an entire healthcare system that's focused on keeping you at work, not keeping you alive. It's just too short-term oriented. And you kind of know this, right? Because just ask yourself: the last five times you went to the doctor what did you go for? Usually it's like, “I went for my rash, I went for my, my flu, I went for my cold.”
Okay, awesome. Except you just spent the last 20 minutes with a doctor talking about a rash instead of talking about the thing that's going to kill you. This is insane. In fact, you know this.
Go to a doctor and get your checkup. And I promise you, nine out of ten times, they’re going to look you in the eyes and say, “Turner, you're good to go. You're healthy.”
And you’re just sitting there like “What do you mean I'm healthy? What’s my probability of death? A hundred percent. So what does that even mean to tell me I'm healthy? I’m gonna die so tell me what I can start doing to kind of prevent those issues.”
What you realize is the only time they'll deal with those issues is that the last minute. So what they're really saying is, “It's not that you're healthy, you're just not sick enough for me to care yet, but if your shit gets really bad, that's when I'll start focusing on it because it starts to enter into that two-year window that the employer pays for and thinks about.”
And that's the problem of healthcare in America. In some ways, the incentives that we've created have caused massive amount of misalignment.
Turner Novak: How did we get caught in that rut? Like are there any ways we've messed up?
Adrian Aoun: Yeah, so I always start with “Why did the world not develop in the right way?”. I always ask myself “What was the incentive? And then when did the technology follow?” And tech doesn't have to be Silicon Valley tech. It could be the printing press or the cotton gin. We've had an insane amount of technology over time.
The first thing is we've created this really odd structure where innovating in healthcare is ROI negative. Let me give you an example. I was over at Google and I was doing a bunch of the Alphabet stuff, starting Alphabet companies.
I remember at one point I was like, “Healthcare is huge problem. Let's go after healthcare. You know what I'm going to do? I'm going to go buy One Medical.” These are the decisions you can make on a moment's notice at Google.
And so I met up with their founders, a really nice guy, Tom Lee. I sat with Tom and I was like, “Here's the deal, Tom. I want to buy you and I want to give you billions of dollars. Tell me how you're going to go take over healthcare.” They were the preeminent tech-y healthcare company.
And Tom looks at me straight in the eyes and he goes, “Adrian, in healthcare, technology investment is ROI-negative.” And I was confused, like, “What? In fucking gardening, it's ROI positive. How the hell in healthcare, the biggest industry on this planet, 20% of GDP, one in five dollars in this country goes to healthcare – you're telling me technology doesn't help that?”
But what he was saying was actually incredibly insightful. What he was saying is, “When I bill, I see a patient and I bill based on these things called billing codes.” Let's double-click on this because you'll quickly realize why this all breaks down.
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I had the CEO of Kaiser visit a Forward location a little while and he tried to buy us. He was all about it. He was like, “This is fucking awesome.” One of the things he really liked was this body scanner. Normally you go to the doctor and they've got a nurse that takes your vitals, all that stuff. We've got a body scanner.
(Forward Health body scanner. Source.)
I'm sitting there like, “Kaiser's a quarter million medical professionals. You have 40,000 nurses. You could have just built a body scanner. Why didn't you do it?” But think about it, right? Because when that nurse takes your vitals, they've got a billing code, they bill people, and they get $7.
What's the billing code for the body scanner? There isn't one. And so now what you realize is they would make less money by doing the right thing. And that's really bad. We're all stuck in the past.
The first thing that we said at Forward was, if you want to go after healthcare, you have to align with the actual consumer. We are direct-to-consumer. You as a member pay us. I know this is a wild concept in the world of healthcare, but if you look at every time we've done this in history, it has played out.
I don’t know if you remember but at one point, we all had Blackberrys. Blackberry was sold to the IT department, maybe the CIO, and it was loaded up on security features and enterprise management features – shit I don't care about.
On the other hand, Steve Jobs was like, “I'm just going to build something that the consumer wants. They're going to have to pay for it. Your employer's not going to pay for it.” That always sucks, but let's be real. Costs comes down over time. Thank you technology.
But you know what the good news is? We got the fucking iPhone, right? And we all love our damn iPhones, right? We're not stuck using the shitty Blackberry thing, right? Well, healthcare is in the Blackberry phase. We're stuck with this kind of crappy product that was sold to somebody else that none of us want.
And so if you shift those incentives like we did at Forward, this is pretty cool. Because now instead of having a hundred engineers on my team that are working on new ways to bill you, I've got a hundred engineers building these products that you want, like how to lose weight, how to prevent cancer, how to make sure that my skin isn't developing malignant tumors, how to make sure that I'm using the latest genetic sequencing to understand what my risks are, how to make sure that like heart disease is not going to affect me the way it affected my parents?
That’s what you want. You want tons of people working on that, but that's never going to happen if people don't start to kind of fix the incentives.
Turner Novak: What do you think the ultimate incentive changer would be in healthcare?
Adrian Aoun: You have to make money by saving lives. That's it. Not make money by doing work. Make money by saving lives. I am really excited for that world.
People underestimate how much the business model fit with the company matters. In Silicon Valley today, we hate ads. Everybody loves to shit on ads. Why are we shitting on ads? Because Facebook sold us this mission – we're going to connect the world. That's a pretty awesome mission. It’s warm fuzzies for all of us.
And then they were like, “Oh, shoot, we have to make money,” so they insert ads into this little stream. But obviously the best ads are divisive, right? And so all of a sudden now we're kind of getting to this world where Facebook said they were going to connect us, but actually they're just getting us to fight and separate. And we look back and we go, “Ads suck. Fuck you ads. We hate that.”
But actually ads aren't bad. It's just the ads’ fit with that model. So if I go look at Google, well, Google's mission was to organize and understand the world's information and make it freely accessible. It's a mouthful, but they want to give you a bunch of info.
So now what do you do? You search something, they give you those 10 blue links, but then they throw in some ads. It turns out those ads are incredibly helpful. In fact, they're more useful than the 10 blue links half the time. So all of a sudden you're like, “Wait a minute, what's Google's virtuous cycle?”.
Google's like, “We give you information, we make money. We make money by giving you more information. So obviously, what are we going to do? We're going to take all that money, we're going to give it to more engineers to get you more information. You get more information, we make more money.” This is a beautiful loop, right?
Google becomes literally the richest person in the world, merely by helping democratize information. Now that farmer in Rwanda is sitting there going, “Fuck yeah, I know how to farm. I've got all the latest technology. I paid nothing for it. This is insanely good.” What you realize is that you have to fit the business model to the problem.
And so having your employer pay for something might make total sense. Your employer should pay for your Amazon Web Services bill. I'm all about that. That makes a hell of a lot of sense.
But why the fuck is the employer in the business of paying for my healthcare? I don't let them pay for my house. I don't let them pay for my clothes. I don't want my employer in the business of my life because my incentives misalign.
And so really what you want is you want to create a world where whatever company out there is working on healthcare is like, “The healthier people are. The more money I make. You want the Apple of that.”
You want a $3 trillion company that's like, we are making money hand over fist because we're saving lives. But today, if you look around the world, that's not what happens, right? You save lives and that's incidental to your business model.
In the world of healthcare, your business model is, “I did some busy work.” Well it turns out if you're getting paid for doing work anyway, like a lawyer or a consultant, you're not going to finish that work well or fast, I promise you, because you want more problems, not less problems.”
Turner Novak: Services - that's how you get compensated.
Adrian Aoun: Right. It's like – I love my law firm. I know they're going to call me and yell at me – but why does my law firm not have 50 engineers trying to automate? They've built the same damn document 10,000 times, right? But I gotta pay for this new document. That's an offer letter that we've seen a million times before.
Why? Well, because they're paid by the hour.
Healthcare is the same thing. You go to your doctor to talk about the flu. Do we not think we've seen the flu a billion times before? Are you such a fucking snowflake that your flu is materially different than anybody else's flu? No, just write the damn app that kind of solves the flu once and for all.
But what you realize is if they do that, they make less money. And so this is the problem. So let's just work on: you make money via making people healthier via saving lives. And if you do that, the world's going to accelerate in a really positive direction really quickly.
Turner Novak: I think we have this kind of cost disease. You've probably seen that chart where it shows the graph of prices over time and the ones that keep going up are education and healthcare, and TVs go down. It's insane. ‘
(Chart showing the percent changes since January 1997 in the prices of selected consumer goods and services, along with the increase in average hourly earnings. Source.)
Adrian Aoun: Well, again, you have to ask yourself, why has technology ever hit every other part of society, but not the doctor's office? When we first launched, we got all this press that was like, “Oh my God, this is the future. The most advanced healthcare system.” The CEO of Kaiser said this is the most advanced healthcare system he’s seen.
Now think about why we built a body scanner. You go into the room – it's pretty awesome – there's this big touchscreen on a wall with a model of your body, and all the data's been overlaid on top. And this guy's like, “I've seen the future.”
And I'm like, “Dude, no, you haven't. Go to McDonald's. Literally go to McDonald's. There are touchscreens. They don't even want to talk to you anymore.”
(McDonald’s ordering kiosks. Source.)
They’re like, “Here's a touchscreen with a model of your Big Mac. Do you want to add the lettuce? Do you want to add the tomato?”. We didn't build the future, we just took healthcare from being about 70 years old technology to about 20 years old technology.”
This is absurd. If we can go ahead and fix these incentives, we can start putting the technology in and we can start accelerating towards a better world.
Turner Novak: When I think of McDonald's kiosks, how do you implement that in a doctor's office?
Adrian Aoun: We've talked about the incentives. Let’s pretend you solve the incentives. The next thing that you have to do is you have to say, “What do I kind of want healthcare to look like? What does the product look like?”
And we've got a fundamental issue in healthcare today, which is that healthcare is based on people. It's based on doctors. So let's pretend I walked up to you and I said, “You know what, Turner, I want to get smartphones to the whole planet. I want to get phones to billions of people to the middle of India, the middle of Rwanda, to billions of people.”
Turner Novak: That sounds awesome.
Adrian Aoun: Yeah. Sounds awesome. But you're also going to say, “Adrian, you're late to the game. I think it's already out.”
On the other hand, let's say I want to get healthcare to the whole planet, right? I want to get, doctors to billions of people – the middle of India, middle of Rwanda, to everywhere. I truly want to democratize healthcare once and for all.
You're going to say, “Adrian, where the hell are you going to get all these doctors? And who's going to pay for them?”
What you quickly realize is, you kind of intuitively know that technology scales in a way that humans don't. Or another way to say it is, hardware and software scale in a way that doctors don't.
We had this key insight at Forward a while ago, which is at some point, healthcare should be a product, not a service. We should just take every single thing that doctors and nurses are doing and just migrate it over to hardware and software.
If you do that, you can scale healthcare up to the entire planet, or maybe even more excitingly, now you can let the algorithms or the AI start to drive healthcare. That’s the world that we all know we want to get to.
So then you say, “Okay, Adrian, but how the hell do you do that?”. Well, when you want to kind of boil the ocean, you have to start somewhere, right? It's an easy thing to say: healthcare should be a product, not a service. It's total fucking night nightmare to go after it.
You start by building a high-tech doctor's office like we did. We built one in San Francisco. It has done pretty well. We're live in about 25 cities all across the country now.
(Forward Health clinic in San Francisco. Source.)
But immediately you go, “Hold on, Adrian, you told me you want to get healthcare to billions of people. You told me you want to apply AI to healthcare. Your high-tech doctor's office isn't going to do that.”
But think about what we're doing – every day we're watching what happens inside of those clinics, and we're trying to learn from it.
Turner Novak: Do you have sensors, cameras? How do you do that?
Adrian Aoun: Exactly. So now you get where we're going. So if you come in, you sit in the exam chair and you talk to your doctor about the flu, I immediately go, “Wait a minute, why'd you even come in? Let's just build that into the mobile app.”
Next guy sits in the chair and talks to his doctor about skin issues. We build a skin scanner. Next guy talks to his doctor about heart issues. I build a body scanner.
Slowly but surely, we're just migrating every single thing from doctor and nurse to hardware and software. Then you realize that we're not building doctors’ offices – we're only building hardware and software.
In fact, if I'm going to be honest, we don't even believe a doctor's office should exist. We think that's a thing of the past.
Where you're trying to go, what is the fastest way that I can build the product that meets the needs of every single part of healthcare? You start simple. You start small. Let's do some primary care. Then you work your way up from there – let’s do dermatology. Let's do maybe a little cardiology.
But you're going to keep going until one day you're doing open heart surgery and delivering babies. But you're doing it with hardware and software, not humans.
You’ve kind of seen this story play out before. I don’t know if you remember, but a long time ago, back when you and I were far younger (and I'm going to date myself), this product came out called the iPhone v1.
I remember standing in line. Okay, I'll admit, I spent the night, but whatever. I got this iPhone and I was super jazzed about it. And I was like, “This thing is the future.”
It had seven apps. It was the most disappointing thing you've ever seen in your life. No App Store. It didn't work with any old devices. It was literally seven apps.
(The original iPhone V1. Source.)
Turner Novak: Did it have internet? Did it have 3G?
Adrian Aoun: It had Safari, yeah. And Safari almost worked. It was like the good old college try that you were like loading a full webpage on your four-inch screen.
Turner Novak: The product was very good for when it launched.
Adrian Aoun: But it didn't do very much. The reason guys like you and I were all jazzed about it is that we saw where it was going. We saw those seven icons and we knew that one day it would be a million icons.
We saw that it had a camera, and we knew one day that they'd also add GPS and 5G and LIDAR. You could kind of see where that was going.
And so they said, “Look, it's going to be a long hard road.” I don't know if you remember this, but like when the iPhone first launched, it got tons of bad press. They called it the walled garden. They were like, “It doesn't work with my Sony Walkman, my Garmin GPS unit, my Nikon camera.”
But think about why Apple was like “We're not going to work with those.” Because the second they connected up to those, there wouldn't be an incentive to migrate the world over.
So instead they said, “We’re going to take our time. We're going to open this thing called the App Store.” And when they did, you got Nikon, you got Spotify, you got Google Maps, and everybody migrated over.
Well not everything's migrated over – I still have car keys, though that's leaving right now. I still have house keys – that's leaving. I still have a driver's license – that's leaving. They're in year 16, 17, whatever it happens to be now. They were like “In two decades we're going to get there. I promise you're not going to carry shit anymore.” And honestly, they're pretty damn close, like they're making progress.
In healthcare, you have to do the same. You have to play the long game. You start by saying, what is the new model? In this product-centric world – healthcare as a product that people can access whenever they want, healthcare looks like every other piece of technology in your life.
And then you say, “Great, let's start adding functionality.” We don't do open heart surgery yet at Forward, but give us time. One day we will – may not be tomorrow, maybe it’s 20 years from now, but whatever. It has taken Apple twenty years too, right? That’s the world that we're marching towards.
Turner Novak: Yeah, it makes sense. The thing that doesn't make sense is, you said doctor's offices shouldn't exist, but that was the first product that you started with essentially. How did you decide how to enter and attack the market?
Adrian Aoun: So it’s a Tesla sort of example. Remember Tesla was like, “We want to build electric cars.” And then in their first car – I may butcher some of this – but they bought the chassis, they bought the transmission, and I think they even bought the battery.
I could be wrong on that, but the point is they didn't actually build the car. Why did they do that? Well, you need an end-to-end functioning system – in their case, automotive, in our case healthcare – to be able to learn how to do it right.
You can't go into a lab and say, “Give me 20 years and I'm going to come out tomorrow, and ta-da! Here's my product.” And that's the first time that it meets an actual customer. You have to be learning every single day.
Believe it or not, when we started the company, we got a warehouse in SoMa[1], in the seedy part of SoMa, which in fairness is all of SoMa, but we got a warehouse there and it was pretty cool in the first 90 days of starting the company. We actually stood up a very traditional clinic.
[1] South of Market (SoMa) is a neighborhood in San Francisco just south of Market Street.
But it was a little different in that. It was made of foam core and two by fours. It was a movie set. There was literally no roof. You could stand on the upper floor of the warehouse and look straight down into it. But what we did is we started bringing people in – every single day, real-life patients, providing real-life care with real-life doctors, etc., and it allowed us to learn.
Every day after an appointment, we'd do everything from move the walls around to build this piece of software, to build this piece of hardware. You name it, we did it. And frankly, that's what we've been doing ever since. Every single day for the last God knows how many years, all I've been doing now is saying, “How can I take what the current system that we have is and how can I make it just a tiny bit better?”
If you look at Tesla, that's been the exact same thing. They started by saying, “Here's a normal car and it's hodgepodged together from some parts.” Then they replaced this piece and that piece and now they've gone all the way to “We've built our own air conditioning system and innovated on the damn door locks”, and that's where you want to go over time. You just want to start replacing every single piece until you've migrated it to the new world.
Turner Novak: Yeah. Tesla's an interesting example where I think it was two quarters ago, on one of the investor days, Elon showed a chart and it was operating margins over time. Tesla just kept marching up and all the other automakers were going down. It's not intuitive at first and it takes a very long time.
(Tesla operating margin compared to other automotive manufacturers over time. Source.)
Adrian Aoun: I agree. And so basically what happens – and this is the disadvantage of a company like Forward, very similar to Tesla – I want to say, in year 15 or 16 of Tesla, they were the most shorted company in the entire planet.
I'm going to butcher some of these numbers but I’ll try to get them right. They were burning $1.3 billion a year, which, let's be real, that's some real money –
Turner Novak: That's impressive. Yeah.
Adrian Aoun: – that's Adam Neumann style money. Very few people could burn that amount. You and I are sitting here going, “Yeah, but of course. They were producing an enormous amount of cars.”
But no, I think it was up until year 14, the cumulative amount of cars they produced was like a hundred thousand cars. That’s what Toyota does in the next like week.
So all of Wall Street is shorting the company, obviously, but Elon's sitting there and he is like, “Well, you guys are playing checkers while I'm playing chess.”
Because he is sitting there like “I've got autopilot, I've got automated factories, I've got lithium batteries, I've got lithium mines, I've got superchargers, blah, blah, blah. And when I put all this together, I'm going to get the Model 3[2].”
[2] The Tesla Model 3 is a battery-powered four-door sedan that cost less than half the cost of Tesla’s Model S. Limited production of the Model 3 began in mid-2017, with the first production vehicle rolling off the assembly line on July 7, 2017.
And there's a really key insight here, which is he knew and understood from a very early point in Tesla's life that the only thing that mattered is: can you get car manufacturing to go exponential? Because if you can get it to go exponential, nothing else will ever matter.
He even took 17 years to even launch the Model 3. You know what I mean? But nobody looks back and goes, “Ah, Tesla, you took too long.” They go, “Who the fuck cares?”. It’s one of the world's largest, most important companies.
We take the very same stance for healthcare. If you look today at the most mature healthcare systems out there: Kaiser's about 75 years old and they've got maybe 12 million users. If Kaiser were a tech company, you would've never heard of it and you wouldn't have the app on your phone.
In the world of tech, we think about things that can go exponential. Give Kaiser another 6.3 billion years, and maybe they'll go exponential. It turns out I'm impatient. I'd like that to happen in the next million years.
What you realize is that there is no strategy for these companies that are reliant on doctors to ever be able to actually serve the whole planet.
Turner Novak: You'd need millions of doctors.
Adrian Aoun: You’d need more than millions of doctors. That's the crazy part. You need some other strategy. And so at Forward, we take a very similar stance to Tesla. And by that what I mean is we just say, “It's a binary. At some point, healthcare is going to go exponential, or it's not going to go exponential.”
If we can make it go exponential, it will be game over. There will be a product-based healthcare system. It will democratize healthcare for the whole planet. You'll start to see life expectancy truly skyrocket, which is super exciting. But you need to do an insane amount of upfront work to get it to go exponential. And that's what you saw with Tesla, again, in their life, about 17 years. And this is what you see with us now.
The good news for us is we're moving a hell of a lot faster than them and the bad news for us is we're probably a slightly more regulated industry with a hell of a lot more thorns in our side. So there's pros and cons here, but that's what we're trying to do. We're trying to make healthcare go exponential once and for all.
Turner Novak: So what does that mean? Is that life expectancy or quality of outcomes?
Adrian Aoun: You know what's kind of cool? Once an industry goes exponential – this is the beauty of technology, this is why I'm in the field of technology – usually, in most industries, you're pulling against yourself. When one thing gets better, everything else gets worse.
In the world of healthcare, they call this the iron triangle of healthcare. Cost, quality, and access are the three dimensions of the triangle. They always say, “Okay, choose two. Pick any two and we'll screw the third one for you.”
I'm not going to lie, I don't know who came up with this. I think it was the guy who came up with Medicare. But I looked at this and my first thought was, “Bullshit. I just don't buy it. This is stupid.” Even though to them, this is like the gold standard.
Everyone believes that – they teach it in school. I hate the idea that going to school for healthcare is learning the past, not the future. In technology, we change dimensions all the time and we change all the dimensions all at once. That's almost the definition of technology. We rewrite the equation, right?
Did electric batteries make us greener? Yeah. Did they make us safer? Yeah. Did they give us more range? Yeah. Holy shit, why do I not want an electric battery in my car? It wins on everything.
So now let's come back to healthcare. What’s going to happen when healthcare is a product, not a service? Well, first off, it turns out that healthcare is kind of an infrastructure problem. If I truly want to put healthcare on every single street corner, it’s gotta be a piece of hardware.
I'm not going to put a doctor on every street corner. I don't even know what that would look like. But we've been able to get billions and billions of phones – I think there's 2.5 billion Androids and almost 2 billion iPhones – out there in people's pockets right now. That's insane, right? Why? Because it's a manufacturing problem. A manufacturing problem is a hardware problem. Okay, cool.
Now you realize that we can literally just increase accessibility wildly. Now let's talk cost. If I look at labor in healthcare, what is the cost of healthcare today? It's about 20% of GDP. Whenever people describe it as GDP, it sounds like this foreign concept so let me make it really easy.
(Healthcare spending by the federal government increased by 36 percent in 2020 — six times higher than the 5.9 percent growth in 2019. Source.)
Every time you get a paycheck, somebody takes 20% of your goddamn paycheck and just gives it to the healthcare industry. If that doesn't piss you off, I don't know what will, but it gets worse. It's increasing in cost every single year. Why? Because the cost of labor goes up.
We all want to live better and better lives, so of course, the cost of labor goes up. I'm not faulting those people, but I am saying that's not affordable. So it's increasing at 7% year over year. Again, doesn't sound like much.
7%? That's reasonable. Well, you know what? The doubling period on 7% is 11 years. So it means roughly a decade from now, it's going to be 40% of your paycheck. Don't ask what it is a decade after that because you don't have that much paycheck to go through right now.
All of a sudden, you realize if we're based on labor, the cost is going to just continue to skyrocket in an unreasonable way. But if I make it based on hardware and software, what happens? I mean, we know what happens.
My first iPhone was, I don't know, 800 bucks. Now in the middle of India, you can buy a smartphone for like 20 bucks. It's this cool thing called Moore's Law. It's a decreasing logarithmic curve, a fancy way of saying it's going to become dirt cheap. Just give it a little time.
And that’s what you want. You want healthcare that is just dirt cheap. You want healthcare that is all around you. But then you ask a different question. You say, well, are we all just going to live longer? Let’s just take a step back and let's just think a little about why we aren't living to 200, to 500, to 1,000.
I know these sound like fanciful ridiculous concepts, but let's just look at how other industries have developed over time. One of the things I like doing is just kind of maintaining perspective. And I like going all the way back as far as written history will give us. I like going back to the Bronze Age. This is like about 5,500 years ago.
Before we look at healthcare, let's instead look at at transportation. It's an easier one. We're pretty used to it. About 5,500 years ago, transportation was pretty basic. It was called your two little feet. You didn't have shoes, you didn't have anything. Honestly, you'd probably walk about five, maybe ten miles a day if you were lucky.
We did that for roughly about one or two thousand years. Then we were pretty intelligent and we developed these things called sandals. Sandals got us about double that number. So if you were doing five now you're doing ten. If you're doing ten, maybe you could get up to twenty in a good day. Okay, cool. But that wasn't very much.
We did that for about a thousand years, and then we tamed horses. We tamed wild horses. They did, I want to be clear – I still don't know how to ride a horse, but whatever. They tamed wild horses, they got up to maybe fifty, a hundred miles. You see how this curve is starting to inflect.
We did that for another a thousand years, and then just in the last few hundred years, it has taken off like a rocket ship. No pun intended. But here's what happened.
We developed these things called riverboats. Now we could go hundreds and hundreds of miles. Then we developed things like trains, planes, automobiles. Now we're up into the thousands. We could literally cross countries, we could get around the planet.
Then NASA sat there and they were like, “We got this. We're going to the moon.” Literally the moon, 125,000 miles away. And of course, SpaceX is sitting there and they're like “Hold my beer” and they're trying to go to 125 million miles away. They're trying to go to Mars in this decade.
So literally we went from five miles to 125 million miles away. I mean, it's like 25 million X. Like, holy shit.
Let's look at life expectancy. Let's say you were born in the Bronze Age, okay? Start with the bad news. You had roughly 15 to 20% probability of death just in infancy. Okay, that kind of sucks. That's not good. But it also means you had an 80% probability of survival.
So you have to ask yourself, if you're in that 80%, how long did you live? And you know what's really fascinating? They lived on average to about 42 years old.
Now you ask yourself, “Okay, what's today?”. Today, about 72 years old.
You're telling me is that in 5,500 years, we didn't even double the damn number. Like what the hell is going on? Where’s my 25 million X? Where are my rockets, where are my spaceships?
So if I walk around 2000 years ago in the Great Roman Empire, and I say, “I’m going to go visit my friend on Mars.” I sound like an idiot. But do you think that if I said that in 50 years or in a hundred years that I would sound like an idiot? Probably not.
It's probably going to be a reasonable thing. The same way if you walk up to one of your friends right now and say, “Hey, I'm going to Italy for a week.” They don't look at you like you're batshit crazy. But you know what's really funny? People do look at you like you're batshit crazy if you say, “I want to live to 200 or I want to live to 300.”
Now you start asking yourself, “Why was transportation able to take off this time – pun intended – but healthcare wasn't able to take off?”. And what you realize is that in the last few hundred years when transportation truly had its inflection moment, you know what we did? We had really good tools.
The field of hardware took off. The field of mechanical engineering took off. We had the Industrial Revolution, and that's what we need in the world of healthcare. We need a way to innovate incredibly rapidly.
Let me use an analogy. When the iPhone came out, we had this mobile computing revolution overnight. We got millions and millions of apps. Why? Because this 22-year-old at Stanford named Kevin Systrom could sit around, have an idea, and push it out to the world 12 hours later. And so the rate of innovation goes through the roof, right?
But actually what was more interesting than Kevin Systrom pushing out his photo-sharing idea, was that a thousand people pushed out their photo-sharing idea. His was the right one. His was the one that won.
But really, you can almost think of it as Apple had created, in the world of healthcare, we would call this a clinical trials platform – a way that you could try your ideas and get them out. So if you want healthcare to take off in the same way, where's that incredibly large clinical trials platform?
How can I go from having an idea about preventing breast cancer or doing open heart surgery and get it out to the world in 12 hours? Now that sounds scary, but it sounds scary because we haven't built those tools. We can build those tools the same way we built an operating system for your phone. We can build an operating system for healthcare once healthcare is a hardware and software problem.
Now you start thinking of it the same way you think of every part of tech. We're going to create a hardware and software platform. We're going to create an operating system. We're going to allow the world to build on top of it, and we're going to measure what works.
And if you come back to that notion of incentives, we've already solved in some ways, the most important problem. You come to this platform and if you save lives, you make money. Dear God, this is awesome.
The people who save more lives are going to make more money. They're going to take every dollar they make, they're going to put it into more and more engineers that are working on saving lives in more and more ways, and this is the world that you want.
If we can get this to happen at an incredibly rapid rate, then we can start to inflect healthcare the same way transportation started to inflect, or the same way the mobile computing revolution started to inflect.
When you asked at the beginning (and I apologize for giving an incredibly long-winded answer), in which way does it go exponential? My perhaps obnoxious answer is all the ways from the rate of innovation to the cost, to the accessibility, to the amount of people involved in building your healthcare product to be the world's best product – all you really want is an exponential healthcare system, and if you can get it, everything's going to change.
Turner Novak: How did you figure out this was the right approach? Do you remember the moment that you kind of realized what was wrong?
Adrian Aoun: It's a good question. I'm not a healthcare guy. I'm sure there are some pros, and I'm sure there are some cons to that. I think in my case, it's likely mostly pros, right?
People come up to me the all the time. I had this funny experience the other day. I was on a panel with a couple other healthcare system CEOs. I'll be honest, I felt like the odd duck.
This girl on my team – really smart girl, fresh out of college – she's prepping me for it. And she's like, “Okay, this one does Medicare, this one does Medicaid.” And I pause her and I just say, “Oh, what's the difference between Medicare and Medicaid?”
And she looks at me and she turns a blanche white and she goes, “What are you talking about? You run a national healthcare system and you don't know what Medicare and Medicaid are?”
(Main eligibility differences between Medicare and Medicaid. Source.)
And I look at her and I'm like, “That's like going up to Larry Page and saying, ‘What do you mean you don't know about the Dewey Decimal system is?’” I'm not trying to rebuild the library, I'm trying to build Google, right? Well, I'm not trying to rebuild the existing healthcare system. I'm trying to build something new.
Most people when they say, “I want to enter into an industry,” what they do is they go and they research the hell out of that industry. And I didn't, honestly.
I'm a patient. I've been to a doctor before and that was all I really needed to know. I know roughly the concepts of how the body works. I went towards a first-principles approach. And I said, if you were to design healthcare today from the ground up, what would it look like?
What was pretty fascinating is we created the model of Forward and we went out to fundraise and we pitched the who's who all these guys, right?
Turner Novak: What was that like? How did you set all those up? Because people want to hear that.
Adrian Aoun: We got our asses handed to us. In our first round – this is pretty funny – we went up to Eric Schmidt, we went up to Marc Benioff, we went up to Peter Thiel, to Vinod Khosla. I mean, you name it. Literally Silicon Valley luminaries.
Turner Novak: And were you still working at Alphabet[3], or Google?
[3] Alphabet was created to restructure Google by moving subsidiaries from Google to Alphabet, thus narrowing Google's scope. The new holding company would consist of Google as well as other businesses including X Development, Calico, Nest, Verily, Fiber, Makani, CapitalG, and GV.
Adrian Aoun: No. I had left and I funded our first round myself, so it was technically our second round. I walked up to these guys and I was like “Hey, invest in Forward. And I give them the pitch.” And every single one of them just looks and goes, “Yeah, this isn't going to work.”
Turner Novak: What did they think was not going to work?
Adrian Aoun: Oh, I have like a list of maybe 15 objections. It was like, consumers won't pay for healthcare. You can't get doctors to change how they practice. You can't operate in a regulated system. You can't insert technology in the most intimate moments of people's lives. On and on and on.
Turner Novak: Yeah… those are fair.
Adrian Aoun: Well, because at that point in time, nobody had done it right. But you know, all it takes is one as it turns out. We got pretty lucky; these folks, I knew them well, they were like, “Mostly based off your resume, we're going to give you money anyway and then you'll just go pivot.”.
But I wrote all those things down and I systematically de-risked them. I disagreed with them. Just take something really simple: you can't get doctors to change how they practice. Why? You can get every other person on this planet to adopt something new. But doctors are some magical, dragon species? No, this is absurd.
Turner Novak: I would argue that doctors have adopted new technology. They give people drugs. They've got the X-rays. They've got all the stuff.
Adrian Aoun: Or my favorite was: consumers don't pay for healthcare. What are you fucking talking about? We're all walking around wearing Nike, Fitbit, Lululemon. We're drinking organic smoothies. If you don't believe they pay for healthcare, walk into Whole Foods where everything is four times the price that it should be.
We all love paying for health. The second I insert “Doctor” into the equation, consumers hate it all of a sudden? No, it's because the product of healthcare sucks.
You wait up for that 5AM Apple Watch drop from Apple so you can get first in line because it's cool. Nobody wakes up early in the morning for Kaiser's latest drop. Can you imagine if your stocking stuffer this year was a Kaiser gift card? You'd be like, what the fuck? Thanks Mom.
What I realized is these things are adages by analogy. People are reasoning because they haven't seen it before and they're doing their pattern recognition. I was just reasoning from first principles and said, “No, I think these things can work.”
Now, interestingly, since Forward got funded, now you've got tons of consumer-based healthcare systems. This is awesome. I love this. And I think as we show more and more that actually healthcare can be based on products not services, I think you're going to see more and more of that world too.
You already see the beginnings of it in a bunch of narrow sectors. My Oura ring doesn't connect up to a doctor. They said we're going to build the product. But again, without the kind of core operating system that everybody can plug into, without that digital doctor, it's hard for these things to succeed. But I think that's the way the world is going to work.
We tend to spend most of our time asking ourselves what does the consumer want and need? Not ask ourselves how does the industry work? In fact, we have almost nobody at Forward who has healthcare industry experience. We have healthcare practitioners, but we don't really have people who worked at Aetna for five years. We just don't really do that. It’s the same way Google probably doesn't have people that worked at the Library of Congress, you know?
Turner Novak: Yeah, that makes sense. One comment – Ilya told me to ask you this or to bring this up: I saw a stat that about 15% of all VC funding essentially went to health insurance?
Adrian Aoun: Well, you can probably do the math pretty simply, right? If you know that healthcare is – and I'm just doing a quick model – almost 20% of GDP. I want to say it's 19 or somewhere around there. And you know that companies are, first off, the vast majority of GDP minus government and NGOs, then yeah, it's gotta be the vast majority of that amount of money, right?
But take a step back. Ask yourself, coming back to this incentives being so fucked up thing, why is it that healthcare is so expensive? Let's ask ourselves from two different dimensions.
The first thing is from the market's perspective. So, I have an AT&T phone, and an AT&T plan. Let's pretend AT&T calls me next week and says, “We're doubling your price.” What do I do? Well, I move to Verizon, right? There's natural competition.
Except that in the world of healthcare, you have no ability to negotiate. They're taking the money out of your paycheck every month – that 20%. And you don't have a choice. You just have to go with whatever it is.
Just think about it this way: let's pretend Uber was one of your options. You open up your Uber app and you get Uber X to the hospital. That's 10 bucks. Uber Black to the hospital – that's 20 bucks. Uber SUV – that's 30 bucks. And then Uber Ambulance?
Turner Novak: They have an option, don't they?
Adrian Aoun: I don't think they have an ambulance. But what would it cost? It would cost like $4,000. Like why?
Is the difference between $50 and $4,000 the cost of an ambulance? No, an ambulance doesn't cost that much. Half these SUVs cost roughly about the same amount. Is the driver of the ambulance making 10x more than the driver of the SUV? No. Sadly they're making roughly about the same amounts. On the way did you happen to use thousands of dollars of equipment and, and, and consumables? No. You maybe use some cotton swabs and maybe a couple bills.
So why are ambulance fees so high? Because you can't negotiate them because there are no options. And they're just going to keep racking that price up.
In fact, it gets worse. Insurance companies are regulated in that they are regulated to a percentage of profit. And what that means is for every dollar that comes in, they have to have a medical loss ratio of blah. They can only make, whatever, 20% profit. Well, if you can only make 20% profit on every dollar, and you want to grow your business, you know what you do? You run more dollars through your business.
Turner Novak: You cannot improve your margins. You just must grow. That's the only way.
Adrian Aoun: All they do is look for new costs that they can run through the system every single day. This is absurd. Healthcare does not need to cost this amount. Healthcare can be super damn cheap if we just build it, right?
Turner Novak: Yeah. Going back to the GDP comments, I was looking the other day. I think there are a few health insurers. I think United Health is $400 billion in revenue or something. I forget if it's Aetna or Cigna, but they're doing over a trillion in revenue. That might be the wrong number.
But if you stack some of those together and you say US GDP is $22 trillion or something, the premiums are a significant chunk of GDP. And to your point, the only way to get more money is you have to just stack more costs through.
Adrian Aoun: Yeah. Well, you remember what the music industry went through, where they called it “analog dollars” to “digital dimes”?
Turner Novak: No, I don't remember that.
Adrian Aoun: This is like when the Napsters and Spotifys and all those things came out, they were like, “We used to sell CDs for 20 bucks and now we sell like an MP3 for –
Turner Novak: – 99 cents or whatever.
Adrian Aoun: I think healthcare needs to go through the same thing. That would actually be really good. We're analog in healthcare. We have not created, in the world of healthcare, an exponential healthcare system. We haven't created a product-based healthcare system. We haven't created a consumer-based healthcare system.
And once you do all those things, what you realize is you're going to take things today that cost thousands and thousands of dollars and you're going to crush them down to pennies on the dollar. And I think that's going to be incredibly positive for humanity.
Turner Novak: Do you think that will actually make either revenue or profitability? I don't know which one, but will it decrease profits across the industry? How will that play out? That sounds disastrous…
Adrian Aoun: Actually what's kind of fascinating is it should increase profits, but it should do it in a way that causes each individual to have to pay less. Once you move to a world that is digital, you get more scale. The way you make money is via scale. In the services world, the way you make money is by charging a lot to each person.
Take Google – all of us feel like we pay Google nothing, basically, right? Google is a $3 trillion company. Well, why? They make small amounts of money, but they make small amounts of money across large amounts of people.
In healthcare, again, Kaiser only has 11 or 12 million users and they're worth hundreds and hundreds and hundreds of billions of dollars because they're taking a lot of money from each one of those individuals. Sometimes $50, sometimes $100, sometimes $200,000.
What you want to do is you want to shift the model to where they can still become big companies. You want big companies because if you do, it means they're applying billions of dollars into research, billions of dollars into making your life better and helping you live longer. I want the Google of healthcare. I want the Apple of healthcare, but I want the product to be as free as the Google of healthcare would be.
Turner Novak: Jumping back a little bit and going back on the fundraising stuff – you got the first round. Who did you convince to give you that first big check?
Adrian Aoun: We were pretty lucky. In our seed round we took maybe 50 or 60 angels, many of whom I'm sure you know, from the Ashton Kutchers, the Josh Kushners, the Marc Benioffs, the Eric Schmidts, I mean, you name it. We took a bunch of these folks and, the key insights were a few things.
First off, I think they were like, “Look, you've got a pretty solid team” and that's not just my way of patting myself on the back. We’ve got a bunch of good people here.
The second thing they recognized pretty well, and this is probably why they're all at the top of their game, is they said, “We haven't seen it done before, but we know it needs to be done and we know there is some formula in there.”
I'll be honest, a lot of them were like, “I don't think your formula is the right formula, but you know what, we're going to give you a chance to go learn.” And I've been really lucky in that basically almost every name I just mentioned has actually continued to back us in every single round since, or many rounds since.
Because it turns out that maybe our path is a reasonable path. I don't think we've proven every part of it by any stretch of the imagination, but I think we've proven at this point, that our thesis can be accomplished.
Hopefully we're the ones to accomplish it, but honestly, if the worst thing that we do in this company is loosen the ketchup bottle for the next guy or show the next entrepreneur how he or she may do it, that would be totally reasonable for me.
Turner Novak: I think I saw too that The Weeknd was an investor. It sounds like it was an interesting story around how he got involved. What happened there?
Adrian Aoun: Well, I'm not cool enough to be friends with The Weeknd personally prior to this. I wish I hung in those circles, but I'm much more a nerd that sits at my computer most of the time. His name is Abel, Abel Tefi. Abel was walking along in the Century City Mall in LA, saw Forward, walked in, and we've got membership advisors that give you a tour, and he was like, “This is so cool.”
So he started texting a bunch of his friends and I forget who it was, might have been Ashton Kutcher or somebody who I know pretty well – he just put me on a text and it was like, “Adrian meet The Weeknd, The Weeknd meet Adrian.” And I did not understand this text because I literally had no clue who The Weeknd was.
Turner Novak: Oh, you didn't even know.
Adrian Aoun: Oh, no, no, no. So I'm sitting there and I'm like, “Is Ashton telling me that he made weekend plans for me? Like what exactly is going on?” And I was standing right next to my girlfriend, and she goes, “No, you idiot” and starts to explain.
I spent some time with him. He is a really, really nice guy. Super down to earth, really, great person. I remember in my first conversation I was like, “Why don't we like meet up next week? You know, I'll be in LA” or something like that. He's like, “No, I'm, I'm actually a little busy that day.” And I'm like, “Oh yeah? What do you got going on?” He's like, “I'm doing this halftime show somewhere.” And it was when he was doing the Superbowl.
I was like, “Okay, yeah, that's a good reason not to meet up with me on that day. You're a little preoccupied.” But anyway, he is a nice guy.
Turner Novak: Are there certain KPIs then that you think about just like measuring the success of the company?
Adrian Aoun: Yeah, totally. So when you look at a business, unfortunately, capitalism doesn't care about your mission. So we always start by asking, what does capitalism care about? And capitalism cares about your standard P&L[1]. Now, we're a subscription business – we charge monthly. So at the end of the day, we start with growth, retention, and economics.
Let me kind of explain that. If you're Netflix, if you're Spotify, if you're any subscription business, what do you care about? You care about getting customers, keeping customers, and doing it profitably. How do you measure each of those: growth, retention, and economics?
What we do is we run our company on a quarterly basis, or on a sprint cycle basis. We run the company off those metrics. But the reality is that you could easily hit those metrics and have no progression toward your future goals, your long-term goals. So what we do is we separately have a bunch of metrics that we monitor that basically ensure that we're marching towards our long-term mission.
The way that we do this is very simple. There's no secret strategy, there's no hidden thing. I'm going to just give it to you right now. It's really simple. All we do is we do a thought experiment. We just ask ourselves whatever dimension we want to understand – we take it to the limit.
So let's look at healthcare and start with one dimension: cost. Should healthcare at the limit mean a hundred years ago from now, a thousand years from now, healthcare should cost $1 per person or $1 billion per person? Healthcare should cost $1 per person. Okay. So you know what we're going to do? We're going to make sure every single day that we are marching that number closer and closer to $1.
Next question. Should healthcare be in one place, in a city, or on every damn street corner all around us? Well, every damn street corner, all around us. So every day we are making sure that we are marching in that direction, that we are becoming more and more ubiquitous in society.
Next question. Should healthcare be in one place, in a city, or on every damn street corner all around us? Well, every damn street corner, all around us. So every day we are making sure that we are marching in that direction, that we are becoming more and more ubiquitous in society.
The next thing: should the world's best healthcare, should that use one piece of your health data or all the data that it can get its hands on? All the data that it can. Okay. So every day we're saying, “How do we incorporate more and more data?”.
Should healthcare be so complex to practice that our doctors, our practitioners, need a hundred years of schooling? Or should the tools be so damn awesome that you need one day of schooling to become a healthcare practitioner? Well, one day. So every day we are making sure that our tools are getting easier and easier so that we can lower the bar of training or requirements to be able to use our tools.
And now you see what we do. We just walk through all of these dimensions and I can give you another 25 dimensions. But all we do is we ask the obvious questions and we say,”Well, are we headed in that direction?”.
We monitor those metrics and if we are, we will eventually get to healthcare for a billion people at a ridiculously low cost. It's all around us and it's going to be an awesome world. And if we don't, if we don't monitor those metrics, we will not make that progress. So that's how we do it.
Turner Novak: You're using fewer resources to deliver more care, fewer costs, and more revenue, essentially. That's what that leads to, if I'm understanding.
Adrian Aoun: Yes, you got exactly that. What we're trying to do is we're trying to turn healthcare into a problem that looks very similar to every other piece of technology that you've ever worked on and ever built.
And once you do that, once you just change the infrastructure, the scaffolding that it sits on from a bunch of people running around to a bunch of hardware and software, then all of a sudden you get to play the game that you and I are used to very well.
Turner Novak: You said something once I thought was really interesting. You said we should redesign the food system. What does that even mean? How do you do that?
Adrian Aoun: So in my prior job – I'll give you a little context. I was really lucky. I had kind of a dream job. I was Larry Page's right-hand man when he was still running Google. And I was involved a bunch of the Alphabet stuff.
Part of what I did in my job was to kind of look at new sectors and say, how would we go change these sectors? How could we, improve them for the better and solve large global problems?
And one of the things that I spent some time looking at was food. And food – I'm going to take an incredibly contrarian view to many people and I’m going to piss off a lot of people on this call, I apologize in advance – today we have this notion of “We want organic food, we want local food, we want real food.” Even the phrase “real food” – I had lunch yesterday from a place called Proper Food.
And so what we've basically said is that we want food with less and less technology applied to it. Now, maybe I'm a techno-optimist, but when in any part of society and humanity has betting against technology been a good idea? This just seems insane to me.
If you look back to, I want to say it was the fifties or the sixties, we started to really innovate on food for just a hot minute. We got things like Jello[4]. What the fuck is Jello? It doesn't look like anything. It's just like this weird thing. Ok let's call Jello a V1 concept.
[4] Jell-O is an American brand offering a variety of powdered gelatin dessert, pudding, and no-bake cream pie mixes. The original gelatin dessert is the signature of the brand and the primary ingredient is gelatin. Gelatin is made from animal collagen – a protein that makes up connective tissues. "Jell-O" is a registered trademark of Kraft Heinz, and is based in Chicago, Illinois.
The thing that was incredibly interesting to me about what we were doing back then and that I think we’re not doing enough of now, is we were trying to separate out multiple concerns. One concern is your experience, which means taste, smell, texture, color.
When you think of Jello, that's what you kind of think of, right? It's this weird jiggly thing that's neon orange or something. It's weirdly weird, right?
But it showed that we had the ability to innovate on that. And what we need to do is we need to innovate on that separately than we innovate on the nutrition.
In other words, this is the question that I always ask people. I love chocolate. It's hard to get me to not eat chocolate. I'm a big chocolate fan, but I know the chocolate's not great for you. The question that I ask is, why do we not have kale that tastes like chocolate? Or why do we not have chocolate with the nutrition of kale?
And the reason that we don't have this is because in food, we're incredibly shy or reticent about trying to truly constitute food from brand new molecules. Interestingly, everybody says, “I only want natural food. I only want organic food.” And then they go pop an Advil in their mouth. I'm like, “What the hell?” This is the most arbitrary thing I've ever seen in my entire life.
I get really excited by people who are trying to separate out those concerns because if we're willing to innovate – I'm not saying it'll be easy and I'm not saying it'll happen in the next year or two – but if we can truly innovate on food itself, we can start to make food a hell of a lot healthier. So that's one thing that I'm, I'm excited by.
The second thing that I'm excited by is the notion of climate change. And, and the problem is when we think of climate change, we think of cars moving to electric, which by the way, is going to have roughly inconsequential impact in the time that it matters.
On the other hand, if you want to get really absurd, it turns out that the number one thing that's causing climate change right now is cow farts.
Turner Novak: Yeah. Is that true? I've heard it.
Adrian Aoun: Absolutely. Yeah. Turns out, cow farts are a real issue.
Cows are kind of grazing, and as they're grazing, they're eating food and they're releasing methane. And that's a big issue. Now, why is this a huge issue? Well, as less developed nations become more developed nations, aka as China gets wealthier, they're eating more meat. This is natural. As societies get wealthier, they eat more meat.
So now you have to ask, what's the scale of the problem? What's the magnitude of it? The first question you ask is: how much arable land on this planet? This basically means land not covered in ice. How much arable land on this planet is used for animal grazing? Do you have a sense?
Turner Novak: I have no idea.
Adrian Aoun: It's wild. It will blow your mind. It’s been a long time since I've looked this number, so I might butcher it a little bit, but I want to say it's about 40%.
Turner Novak: Wow. Okay. So this is everything that’s not desert and mountains?
Adrian Aoun: Correct. Yeah. Yeah. Now, let's go even further. What percentage of arable land on this planet is covered in cities?
Turner Novak: That’s a good question. I'm going to guess it's actually pretty low. I'm going to say like 10% or 8%.
Adrian Aoun: 3%. So what you realize is that animal farming is an enormous problem that we have. And if I double the amount of people who eat meat, that 40% just went to 80%. And that impact on our climate is huge.
There's pros and cons to all these companies, so I don't want to universally say they're perfect, but companies like Impossible Foods, which I'll caveat I'm an investor in. I invested because I got really excited by what they were doing.
In fact, as was reported in the press, I actually gave them a very healthy offer to go join Google. I tried to buy them into Google. That's how excited I was by them and that didn't work for whatever reason.
But I think companies like that, there's nowhere near enough of. I get excited by having not one or two or five of those companies, but where are the hundreds and hundreds of companies trying to truly innovate on food production and food nutrition? To me, those are incredibly large problems.
Turner Novak: Yeah, and they directly tie in with the healthcare system. Like let's say you do eat chocolate every single day. It's not healthy for you. You are probably going to be visiting the doctor a little bit more often than if you don't.
Adrian Aoun: One of the cool things is there's a big movement now for food as medicine, which I get really excited by, because if we can apply more science to this, we can also apply some of the good parts. And I know saying pharma is a bad word in the world, and for the most part it really is, but it turns out that there's some real science there.
And if we can start looking at food and saying, “What is the most optimal thing for your body?”. It can make a real dent. Today in the year 2023, where we have AGI[5] on our footsteps and self-driving cars outside my house, every time I leave my house, we still don't have basic agreements on: is cholesterol good for you or bad for you? Should you eat eggs? Should you not eat eggs? Like the most basic things we cannot agree on.
[5] AGI are AI systems that can solve any cognitive or human task in ways that are not limited to how they are trained.
Turner Novak: Why can't we agree? It seems like it's pretty straightforward. There's science, you should be able to figure it out.
Adrian Aoun: Well, there's a couple reasons. One obviously comes down to the incentives. Remember those food groups you learned in school? The food pyramid?
Turner Novak: Yeah. Isn't it like complete bullshit?
Adrian Aoun: Yes. It was created by food companies that are trying to sell their grains. What you realize is incentives get in the way. But the other thing is, remember how I mentioned earlier how there's not this concept of core operating system for health.
It's really easy for Apple to be the arbiter of truth there. It's very easy for them to say, “That app is accessing your contacts. That app is using your data. That app is using your battery.” They're the operating system. There is no mediator, there is no operating system for healthcare. There is nobody that is sitting there tracking your health on a daily basis.
And if there was, and it'd be really easy, it'd be like, “Well Turner, this was your health before you ate this thing. This is your health afterwards. This is crap.” Or “Hey, this one's really good.”
This would expand to far beyond food. We love Western medicine. We're in the west and we look at Eastern medicine, we go “Ah, there's no science behind that.” Well, look, I think it'd be pretty surprising at this point with the amount of years, the amount of people who have been through that, if there weren't some truth to some of it. But we don't know which parts.
Now, let me go even further. We love to take for granted that western medicine is all real, but I'm pretty sure a lot of it's bullshit. But again, we don't know, we're not measuring that on a daily basis. And so what we do is we allow people to measure something in a lab under specific circumstances.
It’s like the most biased thing in the entire world. You let the pharma company do their own trials and tell you that their shit's safe. Do you know who I don't trust to do their own trial? Imagine you were submitting an app to the App Store fo the iPhone, and Apple was like, “Are you malware?”. And you're like, “Nope, I'm not malware.” And they're like, “Okay, well you said you're not malware. Sounds good.”. Come on. This is third grade. We gotta do better than this.
I get very excited about a notion of – and I hope that Forward can contribute to this – I hope that we can build an operating system for healthcare that in some ways really only has one or two goals. If you go talk to any of our doctors, they're like “Our goal is to have the world's best outcomes.” And I don't actually think that's the case.
I don't want to be the company with the best outcomes. I want to be the company that enables those best outcomes. My goal is one thing and one thing only. I want to increase the rate of innovation in healthcare the same way Apple did. If you go look at your iPhone, hat's your favorite app on your iPhone?
Turner Novak: It's probably Twitter.
Adrian Aoun: Okay, sure. I've asked this to like 200 people. Nobody has ever said an app created by Apple. Apple creates kind of shitty apps. Can we just agree? Like the Notes app is not exactly amazing. Messages is pretty simple. But you know what? Apple creates the operating system that enables everything from the TikToks to the Spotifys, to the Twitters.
What they've done is they've made it really easy to contribute to the world of mobile computing. And I want to make it really easy to contribute to the world of healthcare. If we can do that, I actually think that we become the arbiters of truth, and we empower people from all around, whether you're a doctor, whether you're a researcher, whether you're a kid at home with an idea.
I want you to contribute to the world of healthcare in a safe, rapid, cheap way. And if we can do that, dear God, the world's going to be amazing.
Turner Novak: You've said before, you're really impressed with Zuck. They just launched Threads last night. Why do you like Zuck? What are your thoughts around everything that he's doing?
Adrian Aoun: What I love about Zuck – and I can give tons of critiques, I want to be clear, I'm not like a pure fanboy here – is primarily two things. The first is, he comes to his conclusions from first principles, and even when everybody, everybody is beating him up for it, he does not back off to what he knows to be correct.
During the Trump election, everybody was like, “Zuck, you're the most terrible person.” He took a stance of, “I do not believe that Facebook should be in the business of censoring content. I do not want us in that business. I don't think it's right for humanity.”
By the way. I agreed with him. And everybody in Silicon Valley was beating this guy up. He was like the devil incarnate in Silicon Valley.
And you know what? He stuck by his guns. Now a few years later, now that we've seen the Twitter files and all this shit, every single one of us is going, thank you Zuck. You did the right thing. And we're eating our words.
But he stuck by his guns, on something that he knew to be right. I give a lot of respect to somebody who will do the unpopular thing, not selfishly – the selfish thing for him would be to go get involved and start censoring. It would've been much easier. But he said, “This is not the right thing.” And I massively respect that.
And then the second thing is – and let's kind of look at that same time period as an example – Zuck is worth tens of billions, maybe a hundred billion. I don't know what the number is, but it's a hell of a lot more than you and me.
And you know what? He's been at that company for what, 20 years? Something on that order? When you go into work and everyone hates you – your employees hate you, the world hates you – and you still keep showing up for something you believe in? That's badass. That is the man in the arena. That is the man I respect.
I see this with the most true entrepreneurs. I'm really close with Marissa Mayer. She’s a good friend of mine and she's got a startup. And you know what? I just see her and she’s like , I don’t know, a billion dollars – she doesn't have to show up every day, but she's like, “I am passionate about this problem. This problem needs to be solved and I am going to go after it.”
Doing that when it's inconvenient – that's real sacrifice. Those are the people that I respect. The people who get in the arena and they take the punches and they just keep going. I think people don't have enough appreciation for that or true understanding of exactly how hard that is.
Turner Novak: Yeah. It's very hard to find. Hard to execute on too.
Adrian Aoun: It's hard to last. It's a lonely place to be. And I know people don't feel sorry for a billionaire and I get that. If I can be totally honest, Zuck asked me to work at Facebook and I said no, so I wasn't jumping to go work there, but I massively respect his perseverance.
Turner Novak: One more question and I'll let you go. Do you have a favorite interview question that you like asking? Just to find the best people.
Adrian Aoun: Mine is not actually that, that unique, but I'll tell you that it works incredibly well. I don't ask it directly, but what I do is I just start walking through, somebody's history of their life. It could be work, it could be not work.
And then what I do is, I try to get something where I see their eyes light up, where I'm like, “Oh, they're passionate about this one. That's the one they're really excited by.” And then I just start asking a hundred questions to go deeper and deeper. It could be anything.
I signed a guy the other day and he was like “I remodeled my house and it’s so awesome. I remodeled my house this summer.” I'm like, “Okay, cool. Tell me about the remodel.” He tells me about it. “What kind of walls did you use?” He tells me about the walls. Okay. “The the molding at the bottom – what kind of molding did you use? Where they come together, does it chamfer, does it not? Did you paint them separately? Did you not? And all I'm trying to do is find the limits of, “How deep did you go?”
And what I want to see is I want to see somebody who – whatever they're passionate about, whatever they care about – went so fucking deep, that they are now the world’s leading expert in that building's moldings connecting to the wall and the chamfer and the angle and the cut, and how the paint is sitting inside that molding – whatever dumb thing.
It's often things I don't know anything about. I interviewed somebody the other day who, believe it or not, she cares about sharks to an insane degree. And oh my God, I asked her all the way down to the breeding patterns, the food they eat, how come they can metabolize this food and not this food?
And I'll be honest, she knew all of it. I was like, okay, you go deep. And that's what I'm looking for. I'm looking for a sense of intellectual curiosity. I'm looking for a sense of mastery of a subject. And when I see that and I see them light up, then I go, “Well, you know what, if they light up here, they're probably going to do really great work.”
Turner Novak: Yeah. Because you know that they can become an expert in something and you know that they're going to put in the work.
Adrian Aoun: I want people who want to be the best. You know, just be the best at whatever it is you're doing. Just go insanely dee[. I'm learning to be a pilot right now. It's something I picked up recently. I'm a terrible pilot right now. And I have two instructors.
One instructor, any question I ask, he answers. He answers. And then I have another instructor who I've only had one lesson with, and I asked him, “How does this button work?” “Oh, you don't need to know that.” “How does this button work?” “Oh, I don't know. We don't use that.” And I was just like, “You're not the 10,000 hour expert. You're not the person that I want to learn from.”
I want to learn from the person who, if it's there and it's part of it, we're going to get to the bottom of it and we're going to figure it out. A lot of what I live for is a notion of intellectual curiosity and intellectual pursuit, and I want to see that in others.
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