April 19, 2022
[00:00:28] Aaron Martin: Hey and welcome. This is Aaron Martin. I’m joined here with Leah Sparks. My role is I’m on the Day Zero advisory council and really looking forward to this conversation with Leah. Wonderful founder and CEO. And with that, Leah, tell us a little bit about Wildflower, the company that you’ve grown from literally a small seed into like an incredible business. And I’m privileged to kind of be involved in as an investor and as a customer. Tell us a little bit about the problem that you’re solving and the evolution of the business a little bit.
[00:01:01] Leah Sparks: So we’re a women’s health platform focused on working with both payers and providers in the healthcare system to advance care and payment strategies and women’s health. And really the root of the why, what we’ve been focused on from the very beginning, is we looked at this problem in women’s health. If you look at almost every. Quality and outcome and cost metric across women and children’s health in the United States, we are subpar compared to the rest of the world. And you’ve got obviously a very motivated and engaged group of people. Women make all the healthcare decisions. And so the goal of this company has been to really bridge that gap by enabling digital solutions and services that reach women and change the trajectory of those outcomes and costs for the benefit of the health care system. And yes, I know we’ll get into it, Aaron. We have been focused on that why and that motivation since 2012, when we started the company. And I am a healthcare veteran. I was also pregnant with my first child when we started this company and was really personally inspired to make a difference. And the company has evolved on how we solve that why over the years based on what the market is ready for, but we’ve been focused on that mission from the very beginning and have evolved the business over time from a software only business to a more services and payment management business, which we can get into.
[00:02:15] Aaron Martin: Awesome. So take me kind of into the room, if you will, in kind of, I think you said 2012, when you first started Wildflower. You had a bunch of stuff going on when you were thinking about starting this company. How did you kind of make that leap?
[00:02:30] Leah Sparks: Yeah. Candidly, I think I had been preparing myself to go on this journey at the time for at least probably eight years. When I started my career early in 2001 in healthcare, I worked for a very large corporation and learned while I was there that I liked starting businesses, even in big companies. I was an entrepreneur. And candidly, while I knew when I exited that company that I wanted to become an entrepreneur, I also knew that I had a lot to learn. And so I went and worked for a serial, probably one of the first, frankly, women healthcare technology CEOs. She had sold a business to WebMD in 1999. So like, it was really on the forefront of this quote digital health trend. And I worked for her for a few years. I learned so much and we sold that business. So when we were at the time of selling that business, I was also on my own journey to starting a family. And I would say one of the biggest things I learned from working for this woman who was a serial entrepreneur, don’t become a healthcare entrepreneur unless you’re working on something you are extremely passionate about. And this is probably true for any type of entrepreneurship, because it’s so hard, right? And I knew for me to do it even in healthcare, the industry I’d worked in for 10 years at the time, it had to be something that personally ignited my passion. And I really found that and began my own journey to becoming a mother and what I learned about, I mean, here I was a privileged woman in San Francisco, worked in healthcare, and I was having trouble navigating it. What was it like for a woman in a rural area on Medicaid? And so that personal inspiration married with my healthcare industry knowledge and knowing there was a big problem to solve here was really what led me into the room, so to speak. But at the same time, I came into it with a problem I knew we needed to solve. We needed to solve the fact that a hundred billion dollars is spent on OB care. A lot of it is wasted on unnecessary complications. And importantly, it impacts the lives of families often forever, right, when you have a birth complication or a baby in the NICU. And so that problem we were solving was the number one thing for me when we got started and I had to search to figure out what the business model and product model was going to be. And that was really what a lot of that early days was like, was figuring out, what’s the. solution to solve it?
[00:04:38] Aaron Martin: What was the first, I don’t know, 60 to 90 days like? This is something that I’m always curious about. I remember things like setting up payroll and starting to have meetings with like seed investors and things like that, but then also just spending a lot of time on a white board.
[00:04:56] Leah Sparks: I love this question. To be honest with you, I look back on that and it feels really magical. I was a solo founder for the first couple months. Then I recruited a woman I’d worked with before. And you’re right, it’s sort of across from like the most mundane thing of doing your Delaware filing to get set up as a corporation to really engaging on like researching the industry, calling everybody I knew, getting referrals to people who could advise us on what the problem is, who the customer should be, how we should sell it. And then when I recruited pending relevant, my co-founder. And I would just say this about co-founders, and I don’t not know what your experience was like, Aaron, like for me, I knew I knew the healthcare industry. I can sell. I know how to do business models. What I’m not good at is building product. And so when I recruited Kathy, I’d worked with her at this other company that our startup buy was in, and she’s great, like product I need or knows how to manage engineers and really helped me as sort of the key person in the room with me. So we did a lot of white boarding, like this is what the product should look like. It has to be a mobile app. It has to do this. It has to fit into healthcare. And it was really fun. I mean, to be honest with you, it was really fun. And we applied for our first seed. I look back on that as sort of just a really magical time. And I had my son along the way and then we were off the races. So yeah, it was great.
[00:06:16] Aaron Martin: That is the most amazing thing. You were kind of doing two different startups at the same time, in a way, right? So what was the initial reaction once you guys got it, I guess like 80% in focus, let’s say. Were people like, oh yeah, this is totally going to be a thing? Or were there skeptics or how did it go in terms of the people that you talked to?
[00:06:39] Leah Sparks: It’s such a good question. It’s definitely a mixed bag and I think you have to just listen carefully and be curious. And I think a lot of the early market feedback directed us appropriately. So for example, Margaret Laws, who’s now the CEO of HopeLab, who at the time she was at California Healthcare Foundation. A friend introduced me to her. She was the person who told me this is not only a great idea, but you’ve got to do it in Medicaid and you can do it in Medicaid. There’s a myth that women on Medicaid don’t use technology. It’s half the market. They will need it. And guess what? Our very first client was the state of Wyoming Medicaid. And so that was really good advice. And then on another extreme, I went and talked to, I had a women and children’s at a health system that I won’t name, but she was very honest at the time. This is 2012, Aaron, very different era. And she’s like, I love this, but we make a lot of money on C-sections and I know that sounds bad, but it’s hard for me to have a business case for the CFO to justify it. And the world has changed dramatically since then, right? But that was a good, I listened to that, that, okay, we’re going to start with health plans only. And eventually the providers will get there, especially the innovative ones. So I just, I think it’s important to be curious. I think, especially, I remember having a breakfast with a woman who was really smart and just hammered me and was very skeptical, almost like trying to persuade me not to do. And I took it and listened and was curious, but I still, you have to have a kind of a portfolio of advisors and different perspectives to lead you down the right path and kind of know how to take some of the advice and use it usefully while also not getting completely discouraged.
[00:08:15] Aaron Martin: I’ll never forget. So we had built a product that was similar, but it was mainly kind of focused on on the provider side. You had done employers and payers. And I remember meeting you at a JP Morgan just heading off to a conference room and just doing some white boarding. At that point, we were trying to recruit a CEO to kind of spin this thing out. Every CEO candidate I met, I kept benchmarking against you. And then finally it dawned on me like I should just sell the business to you. That’s kind of, from our perspective, how we got involved with the Wildflower team and we built this product called Circle. And now we’re a customer. And I remember you being incredibly pragmatic on the stuff that really matters to Wildflower and the stuff that really doesn’t, right? And it was a really efficient kind of partnership and process from day one. That’s what really impressed me about you in the early days. Tell me a little bit about how you kind of see things as a CEO. In that light. So being able to not sweat the small stuff and really focus on the stuff that matters.
[00:09:26] Leah Sparks: That’s a good question. I appreciate you sharing that story because I think that’s a perfect example of an inflection point for this company. And part of it was, I think for both of us, just being open-minded, right, so like what are different ways to think about the world? But back to your question, I mean, part of it, candidly, in terms of don’t sweat the small stuff is a little bit of my personality. For better or worse, I actually purposely surround myself with people who are very detail focused so I don’t miss something. But I do think, I mean, look, if you’re running a business or, like, whether you’re an entrepreneur or even in a large organization like you are Aaron, but you’re in a time of great change, which is sure happening in healthcare for the past couple years, and many industries are in times of great change. You can never have perfect information when you make a decision. And so you gather as much information as you can and you go. And as part of that, you prioritize, right, in your head. These are the things that are the most important to get right. And kind of everything else, you might even to mitigate some risks, but don’t sweat it or you never get stuff done. And you can appreciate this, Aaron. Working in healthcare, it’s already so slow, right? We are moving through sludge to try to change the industry in multiple ways, whether you’re in a big organization or a venture backed one or a small one. If you wait for everything to be perfect and get everything tou want to at T it’ll never, you’re just, you’re fighting against yourself. So I mean, part of it is just my personality. Part of it is working in healthcare. And part of it is just, I think, no matter what you’re doing, what industry you’re in, if you’re going to make progress, you just have to learn to live with good enough and focus on what really matters.
[00:11:10] Aaron Martin: You built this very, very engaging platform. If you want to kind of quote some of the statistics about the kind of engagement you get with women on the platform, it’s just absolutely incredible. It’s one of the most digitally engaged platforms, period, but especially in healthcare, which has a lot of hard time getting consumers to kind of engage. Tell me a little bit about how you went, the thinking from there to where you’re going now with the business around taking on risk and building basically much more of a risk-based business. So tell me a little bit about your thinking about moving the business forward and the evolution of that.
[00:11:48] Leah Sparks: Yeah. So back to when we first started and listening to the market, I actually, when we first startedm asked people about doing something for the payment model of healthcare, and everyone told me it was a terrible time to do something like that. It was, in 2012. And so we built a software platform, like you said, and my co-founder I referenced had come from places like Sephora and Rent the Runway, and really helped us build a product based on consumer design principles. And then we dug in even more on that when we acquired Circle as part of Providence. The goal is to build a very engaging front end platform for healthcare built on consumer design principles with personalization, with the right notifications, and to use that engagement, though, not to sell diapers, but to connect to healthcare and move the trajectory of experience, outcomes, quality, loyalty to providers. And yeah, I mean, we typically see two to three times a month use on our platform. Long-term retention rates. And I remember sitting at a conference with you, Aaron, at one point, and you said, well, a healthcare system does not have the capacity to see their patients two to three times a month. But if we can be connecting with our patients in their pocket, whether we’re nudging them to get an appointment or we’re getting data from them to inform their care plan, it’s really powerful for healthcare to have that type of access. And so that design and that technology, we were able to show picked up more data, moved the needle on cost and quality of outcomes in a software model where you’re selling the software, license fees like the Salesforce enterprise software model, not quite as big, but that was the model. And, as you know, Aaron, that was very successful for the first six years of the business. And when the pandemic hit, we continued to sell software, but we saw this opening in the market, and especially for our provider customers who were paralyzed and not ready to be in the market for software at the time, we quickly had to respond. And I’ll never forget, April of 2020, and just feeling like, I’m homeschooling my kids, all the providers are like furloughing staff. They’re overwhelmed. I mean, it was, and no one knew how to handle what was happening in the pandemic. And I remember meeting with my executive team and saying, okay, we got to build a remote monitoring capability. We got to help our OBs do the blood pressure monitoring, do the weight monitoring, and we need to just do it and give it away for free for right now and help our customers. And we will figure out the business model later. And the board supported that. And I think at the time, we just knew that was what the market needed and we weren’t yet sure where the business model was going to take us. And over that summer of 2020, and into that fall, it became really clear that, because the healthcare system was so damaged by the fee for service payment of healthcare, where you pay for people coming in, as opposed to their outcomes, there was this opening to value-based care where you pay for outcomes and a episode of care like obstetrics and newborn, the pregnancy journey in the newborn, lends itself really well for providers to get paid based on the outcome of that mom and baby. And so that is really what led us to where we are now, to helping providers take risks, participating in the risk pool ourselves, using that technology that we’ve built over six years that’s really engaging, picks up signals, and harnessing in a different way for different business model, is what led us there. So, anyway, that’s the story.
[00:15:11] Aaron Martin: What was incredibly impressive to me, and granted there was a lot going on during that period in our world as well because we were kind of managing pandemic, but it felt like we had a board meeting, I kind of closed my eyes, opened them back up, and all of a sudden you were in this remote monitoring business, and you had a whole bunch of folks kind of already doing it. It was incredibly fast how you guys got into it. And then I remember, probably maybe one or two board meetings later, us already moving into kind of risk arrangements and having those conversations. It was incredibly fast how you and your team kind of set up this situation. So where do you kind of see the business going now and, if you had to kind of think 2, 3, 4, 5 years out, what’s flower going to be then?
[00:16:01] Leah Sparks: Yeah, So, I mean, the immediate priority, of course, is to, let me back up and say, thanks to our software business, we have a lot of great partners like Providence on the provider side, many health plans we work with. And so we’ve been able to leverage those relationships to enter this extended market where we enable these value-based care models and provide some coordination services and payment services. So the immediate priority is to get those scaled contracts up and running this year for OB. But where I see the business going is certainly to continue down that path of supporting more and more regional customers and partners on those types of models. But I think there’s a lot more white space in women’s health, especially related to the fact that the OB provider is where the majority of healthcare visits occur under about age 50 for women. And so that will be a sort of, by proxy, the closest relationship to women throughout child-bearing age into menopause, and are really well-poised to better coordinate care and create even an advanced primary care model for women because it’s maddening for women. You see your OB all the time, but then if you have a migraine, you got to go talk to your PCP and it’s hard. It’s a big silo. It’s a problem. And so I think figuring out ways we can better support OBs, not only to be kind of quote at risk providers for OB episodes, but to have more responsibility for true primary care for women and get paid appropriately for that, I think is a really big opportunity and where I’d love to take the business in the coming years.
[00:17:37] Aaron Martin: Yeah, that’s awesome. One other thing I also thought about that’s really incredible with what you have done with Wildflower is you’ve created basically this smooth on-ramp for, from a health system perspective, for folks that are either on fee for service and they’re eventually going to move into risk. So you’ve got a product that works in fee for service incredibly well. That’s how we initially have been using it, right, so the OB appointments, making sure that we’re really kind of connecting the patient into our health system, et cetera, but it’s pretty much fee for service. But then when the health systems and the payers are ready, there’s really no real change to the underlying technology. There’s an additional kind of care management part to it that you add. You don’t have to go and make a leap to a completely different technology or that kind of platform. It’s a very kind of smooth transition. So I think that’s a super big lesson for entrepreneurs kind of thinking about starting in healthcare, I always talk about, it’s got to work in both models, right, if you’re selling to health systems and providers, because they’re gonna have a foot in each boat, or maybe they’re just all gonna be fee for service and aren’t even ready yet, but does that resonate with you or how would you kind of think about it?
[00:18:55] Leah Sparks: Big time. And I think it relates to your previous point around, for providers, especially outpatient providers, the number one thing isn’t necessarily money. It’s efficiency and workflow for them. As the world migrates to value-based care, and this is true whether you’re talking about Medicare, other specialties, or women’s health, you’re right. It’s not going to turn into 100% value-based payments overnight. We may never get there. We’ll be lucky if we get to 75% by 2025. And so what we do when we install providers is you use our digital front end for every patient. And then we figure out which ones are on paid for value contracts that we’re supporting. And then we activate everything on the backend. So for a provider it’s one front door, it’s one digital installation and, that, like you said, provides value across fee for service and, two, eases their ability to deal with value-based care because they don’t want to keep track of, well, this patient needs extra support, so I’m getting paid for the outcome. It’s too much. We’re never going to succeed in these models unless we make it really easy for providers who are already strapped, even more strapped given some of the workforce losses and challenges coming out of the pandemic. We got to make it easy, so completely agree.
[00:20:01] Aaron Martin: So, if you could give yourself advice 10 years ago, what are the things that you’d want to kind of like teleport back and say, I’m going to make it easier for you. Here’s the things that you should definitely do. Here’s the things you should kind of think about. Here’s the challenges you’re going to hit.
[00:20:18] Leah Sparks: Be prepared for the long haul. I think there’s this myth that startups start and exit in three years. The average is five to eight years. And here I am, almost nine years in, and I feel like we’re starting a new business, like we are with value based care and I’m super excited about it, but just you need to be prepared for the long haul. I would also, for anyone going down this journey, I would really like look deeply into yourself as to why you want to do it. And I think if, again, if you think it’s a get rich quick scheme, don’t do it because it’s usually not.
[00:20:51] Aaron Martin: Especially not in healthcare.
[00:20:53] Leah Sparks: Especially not in healthcare. And make sure, like, I think the number one trait that you have to build that it’s been like something that I’ve just had to build more and more over time, is resilience. And I’m not saying like resilience, like work hard persistence, but it’s also emotional resilience. There’s so much that you can’t control. And especially when you’re a young company, or even though Wildflower is bigger now, compared to the healthcare titans, we’re still tiny, right? And so, you just have to have that emotional resilience that you kind of take what comes and you figure out a way to solve problems. And I think making sure you feel you have that is the only way to do this with some sanity. And if you don’t feel like you have that, or you’re not ready for that, maybe go work for someone who’s doing it.
[00:21:37] Aaron Martin: I love how you kind of almost like, from your perspective, it was inevitable. And then you apprenticed for a little while, and you’re very intentional about kind of getting yourself ready to take the leap is the key thing I got out of it. And then just to kind of read it back to you, the resilience, passion, is this something you really want to do in long-term thinking, is this something you want to do for 10 years? Those three things are very connected from what I’m hearing, right? Well, you are an incredible inspiration to me personally, so thank you so much. Every board meeting I’m in, I learn so much from you. And thank you so much for doing this podcast with me.
[00:22:19] Leah Sparks: Well, the feeling is mutual, Aaron. Thank you. And thank you for all your support and great advice. And it was a pleasure. This was really fun.
[00:22:25] Aaron Martin: Awesome.