November 1, 2022
[00:00:00] Rishi Sikka, M.D.: Hi, I’m Rishi Sikka, one of the hosts of Season Three Day Zero podcast. It’s great to be here, and I’m joined with our guest, Ali Parsa, CEO and founder of Babylon. Ali’s so excited to have you here. Thank you so much for taking the time and joining us today.
[00:00:17] Ali Parsa, Ph.D.: Rishi is fantastic to talk to you. Thank you for having me.
[00:00:20] Rishi Sikka, M.D.: Tell us a little bit about Babylon, what Babylon does, what market you’re in, what you’re aspiring to.
[00:00:27] Ali Parsa, Ph.D.: So the genesis of Babylon are founding thoughts or that this model of care that you and I call healthcare and often people say is broken. It’s really even broken. The problem is not healthcare. It’s sick care. It’s what you and I used to do with our cars 20 years ago. We used to drive it until it broke down, took it to a garage, they fixed it. We drove it. That’s what you and I do with our body. And we told, why can we not do with our body what we do with our cars? Why can we not? Monitor our data, continuously stream it have agents, AI agents or or artificial agents looking after it, and then alert us to intervene early to prevent crisis and emergencies.
[00:01:11] Rishi Sikka, M.D.: Your own background, as I understand, has also been full of change and disruption and would love just to hear a little bit about your personal story that brought you here to To Babylon Health today,
[00:01:24] Ali Parsa, Ph.D.: I guess that’s the part of your podcast that you caption as boring.
[00:01:28] Rishi Sikka, M.D.: No, it’s exciting. It’s exciting. Who?
[00:01:35] Ali Parsa, Ph.D.: I was born in Iran and then shortly after I became a teenager. I had to leave my country. So I was one of the refugees that today in most of the western war, pursuing to keep outta the country. Unfortunately. But I I arrived in UK at the age of 16 on my own without speaking any language. Practically knowing anybody. And and I had to build a life from scratch. and it was a phenomenal lesson in what, Malcolm Glad calls the desirable difficulty. You kind leave from a middle class family. You go into a situation that you’d never wish for anybody and you emerge from it and you just think that that’s great. So I had to put myself through education. I ended up at University College London. I did my undergraduate and then eventually a PhD in engineering Physics. And because I had no money to pay for my PhD, I had to build a business. I got lucky. Did extremely well. It won the award for the best young business in uk, unlike any other business. As soon as it. Award is time to sell it. So we sold it as my PhD came to an end and I saw the investment bankers who sold it for me per hours of work. They did really well. So I thought maybe I should become an investment banker. And like every outsider, you look at these guys at the time with beautiful suits and ties and I thought I joined that. So I became an investment banker and I was at Goldman Sachs at the end of my career helping to blow the internet. And then when in 2001 my first child was born, I left banking. Not because I have anything against banking, but what I discovered is, for me, it’s more about building than going from one project to another. So it’s that a difference between a project base or a long term base building thing. So I went back to become an entrepreneur and. And as I said, I built a chain of hospitals. It did very well. It was in uk, but it, it wasn’t solving the true problem. So then I built Babylon and here is where we are. And I have three wonderful children and an unbelievable wife that for some reason, this is still married to me after years of being.
[00:03:45] Rishi Sikka, M.D.: How does that experience bear and play in your decision both to be an entrepreneur and in your leadership style? How does that background and. , lack a better word, upbringing. Come to bear in you as a leader.
[00:04:00] Ali Parsa, Ph.D.: And I remember when I was leaving the border, my father. Walked with me to the nearest town, and then as I was leaving, as the people of smuggler was taking me away he basically came to hug me and the smuggler said, Hey, you cannot hug. They’re full of his SPS in here. And so he grabbed my hand and pushed it really hard and said, Son. Just to stay alive until we see each other again. And he wouldn’t let my hand go until I promised him. And then between half an hour I failed in that promise and I got arrested at the border And you nearly what happened there? Was a soldier rushed to the revolutionary guard who arrested me and said, Sir, sorry you have a phone call. Could you please just go get it? At the time you had to go to Theta. And as soon as the guy went for the phone, he basically said to me son run away. And I ran through the border for safety. I have no idea what happened to that soldier, but my life ever since has. Fall of experiences of complete strangers that for no other reason helped you to do better. And I’ve seen that throughout my career and throughout my personal life. So we all have these stories, and we all think these stories are about us, but it always is about those wonderful people around us who help us. And that’s, that was a huge lesson to me and for my style of leadership. I think it’s come back to that it’s that it is all about personal relationship, personal it’s, there is nothing impersonal about profession.
[00:05:38] Rishi Sikka, M.D.: Right. . Thank you for sharing that, that deeply personal story. You actually started your company in the UK and Africa and wanna hear a little bit about the decision to go from from the United Kingdom and Africa. The decision to, okay, we’re gonna go into the US market and. what’s been the eye-popping or the eye opening experiences of coming into, but what many describe as the most complex market for healthcare in the world. Maybe it isn’t. You’re a global company and you’ve got even a better perspective. Maybe you think it’s it’s not as complex. We’d just love to hear about the decision to enter the US you What was the eye opening or eye popping experience there?
[00:06:15] Ali Parsa, Ph.D.: Our mission is to make healthcare accessible and affordable and put it in the hands of every human being on earth. So it was natural for us to go to somewhere that is diametrically almost opposite to the uk, not to another rich country, but to a country that is culturally very rich, but financially among the poors in the world, Wanda, at the time. And what we found was that we can deliver the same access. Quality healthcare to the people of Rwanda. And one of the proudest moments in the history of Babylon is when his Excellency President, Kigami of Rwanda made primary care free at the point of delivery to all of these people, partly by giving Babylon to everyone. Or giving access to baby, to everyone. And then the question of course was where do you go after that? And if you are a learning organization, you want to go to places that are very different than where you come from. And so we went to Canada and then to United States. And of course you have to be in United States. Healthcare is a very strange. Entity. And that is that it, I can’t think of no other industry in the world, no other sector in the world where a single country is responsible for 50% of all the money is spent in, like United States at $4 trillion of expenditure is almost responsible for 50% of the entire expenditure in healthcare globally. So if you don’t have a part of that economic thing, you don’t.
[00:07:37] Rishi Sikka, M.D.: I’d just kind of be curious would you say that the United Kingdom from a. Healthcare perspective compared to the US is more oriented around population health. Is it more oriented around health and wellness fundamentally, or is it just something totally different?
[00:07:55] Ali Parsa, Ph.D.: No, I think the problem in healthcare, Rishi, is universal. I think almost everywhere in the world that I know of or that we looked at The problem is, again, going back to what you and I were talking about earlier, this sector we call healthcare, it really isn’t healthcare. It’s history came from waiting for people to get sick and then we looked after them. It is, it really is a second sector that we created globally, everywhere, and that is true almost everywhere. Now, if you can go back all the way back to ancient China where a Chinese medicine practitioner would only get paid while you were. Healthy. And when something went wrong with you, then they had failed. So you stop paying them until they fixed you. So they had every incentive to look after you and keep you healthy. But that doesn’t exist anywhere in the world, including in China now. And I just think that we need to bring that back. I think every. Place has got the same problem. And I think that this sector, this healthcare sector, the proactive data center patient orientated all on monitoring a model of care just doesn’t exist anywhere. And it’s our job to build it is just a more rational way of delivering health as opposed to managing crisis of.
[00:09:15] Rishi Sikka, M.D.: Before we leave this topic, I, I realize I framed that question. Perhaps it was making a judgment on the UK versus the us. Let me. Flip that around in, in case folks took it that way. What do you find attractive about the US healthcare system compared to the UK or you know, what would you say are some of the best features in contrast to the UK or other healthcare systems globally?
[00:09:36] Ali Parsa, Ph.D.: Let’s just actually take a step back. The fundamental problem with healthcare is that, as I say, sick, if you were gonna create a proper healthcare system, what would you do? You don’t wait until somebody gets sick. You actually take all of their data. Wherever it is from your watch to their phone, to their clinical records, to their whatever, it’s, and you put all of that data in a graph database so that it is accessible at all the time. So you can stream it, you can be able to com, compare it with other data. You don’t need to monitor everybody continuously, but those people continuously to see the variations to reward them when things go well. But to To alert area and intervene early when you have to. And then when you intervene, we try to do so first with Care Assistances for not clinicians, cheaper, more available. And if you wanna go to clinicians, why do so in person, Why not do it virtually? So we do from Care Assistances to nurses, to primary care physicians, to ex experts, right? Specialists. And then when you need to refer to somebody, you refer to somebody. Physically, But the advantage United States, Rishi, is that we can take the entire budget while in a way that UK doesn’t allow us to do that, we can only take the primary care budget. And by taking the entire budget, we can invest much more in engaging people in their primary care to avoid those crisis, to save a lot more in secondary.
[00:11:07] Rishi Sikka, M.D.: For many entrepreneurs, it is the ultimate pivot. It is the ultimate goal, maybe certainly for their investors and that is going public. Would love to hear a little bit about the decision making that went into it, why you did that and the good, the bad and the ugly about what that’s been what that’s been like. That’s for so many the ultimate dream and the aspiration. And you can give us that perspective of what it was like and how you look back.
[00:11:33] Ali Parsa, Ph.D.: Actually, I think for us was being very frank with you was mainly the bad and the ugly but let me start with the good. The good was we made the decision to go public. We to back for the right truth. We did so because the company at the time it was the capital markets were doing superbly well, the public capital markets, therefore the cost of capital in the capital markets were cheaper and in the public markets were cheaper. And doing a spec was becoming older rage. It was and there had one massive advantage for Spark. You must remember this about baby, Baby grew 400% a. Every year for the last, I believe, four years. So when you are growing at that level, our 20, we decided to go public in or announce a spec in J in February, I believe, 21, which meant we made that decision. In November, December, 2020, our revenue for 2020 was 80 million, right? So if you wanted to go public, we had to go back on that number. In 2021, we did over 320 million number billion dollars, and our projection for 22 was 720, $30 million. This year we will do over a billion dollar. So we decided to use a spec because we could share these growth projections. The problem was by the time we went to go public in October, the spec market had fallen apart completely and fundamentally. You had no fundamentally you had no market left. I think that Benjamin Graham once said that stock markets are a. Voting machine in the short term and a weighing machine in the long term. And I thinks job of us is just to put the weight on and wait for the for the stock markets to catch up. And they invariably usually do, it takes them a few years.
[00:13:26] Rishi Sikka, M.D.: Wow. That is an incredible perspective. What’s your outlook on the macroeconomics and what are you doing to potentially additionally prepare for what may or may not come to pass that uncertainty?
[00:13:41] Ali Parsa, Ph.D.: It’s an excellent question. I think Charles Darwin once said, This is not the strongest of this species that survives, nor does the smartest, that is the most flexible and and adaptable. And that is true about companies. I think that we are now in one of the most uncertain times we’ve. We’ve, many of us have seen, if you are, I’m in my mid fifties, but if you are a decade younger than me which most of our investors are, most of our CEOs and leaderships of teams in various companies, are you actually your working career have not seen. Any recession of sort, any economic crisis of sort. You’ve seen almost 20 years of uninterrupted growth, with the exception of what happened in 2007 and eight, which really affected a smaller number of. Sectors, we’re coming out of a pandemic. And this pandemic will have as profoundly economic effects as any other pandemic in the history of humanity did right after it, there will be so we are now all seeing that the logistical disruptions, uh, everything else. And by the. We went through the madness. You could argue that was done for the right thing or a bad thing, but 40% of all the dollars that exist in the world, all the currency that exists in the western world was printed in the last two to three years. So what did we think? We think that this is not gonna have an inflationary effect, and as enough, of course, we find the convenient thing of saying that, Oh, it’s all about Ukraine and Russia, that inflation was coming with or without it. Then of course, the disaster that. In Ukraine and the aggression there has also created an added pill to this. So we are in really uncertain times and I think it’s super important for us all to not try to fight it that, to try to through it. To try to be flexible enough to to say that, look this is gonna go and it probably is gonna become worse than it becomes better. Now let’s hope day becomes better from you for it becoming worse. What is not in dispute? Is that the existing healthcare, and I and you and I should talk about that, the existing healthcare model of delivery is broken. It’s going from crisis to crisis, and the current solutions are not going to provide the ads. So somebody somewhere is going to come up with solutions that will solve this problem Today, a lot of those new solutions are under thread because the capital that fueled their growth is. Some will survive. So out of this crisis will also come, the vacuum that others will leave, that gives us this space, those who stay the space to really build the real solution. So I, I think that this is a double edged sword and we need to not just focus on what can go wrong with it, but we also need to focus on how we can emerge outta it as a massive.
[00:16:49] Rishi Sikka, M.D.: Yeah. You’re absolutely correct. Think you are definitely framing it optimistically. You know, as we, wrap up here you’ve started two companies that have achieved extraordinary scale. One of them your current one, Babylon Health is global. What advice would you have? you know, In many ways that those are some of the pen ultimate success points, and you’ve done it now repeatedly. What advice would you have for for a, somebody who’s a founder right now, or aspiring entrepreneur or at an early stage company? What would you. And they’re looking to you and what you’ve done, and they’re like, Give me the secret sauce. Give me the recipe. What would you say? What would be your advice to them?
[00:17:36] Ali Parsa, Ph.D.: I think that it, you know this very well. Doing anything in life, take all the effort, anything that matters, take all the effort. So you might as well do something really big and to have a big impact. Dreaming big matters a lot. Second is, unless you build that dream and build and build it fast, it remains a dream. It remains for idealists. Our life is super short. Unless somebody can figure out a way of prolonging it and people are working I that I know, but let, but it’s gonna go much faster than we think. So we don’t have time to. Do things slowly. So I’m a big believer in that once you have a big dream, you have to work super fast with a sense of urgency to bring it to market. And I think our growth it’s a reflection of our frame of mind. And the third thing is being brilliant. I actually don’t think doing a sloppy job works. I think that cutting corners trying to grow without foundation, that just always collapses. So those are the things that we tell each other. There is something I add to that always to my own kids, that if you have a big dream, if you dream big, you build fast and you wanna be brilliant, just make it also part of your. To make it possible for other people’s dream to come true. So my team to entrepreneurs are dream big, build fast, be brilliant, and also be part of an ecosystem that allows others to build their dreams.
[00:19:06] Rishi Sikka, M.D.: Molly, what a wonderful close. And it’s such a blending of both the professional as CEO and your personal. I loved Dream big, build fast, be brilliant. And in that vein of sort of the blurring of the professional advice and personal, I also really enjoyed your phrases of desirable difficulty. And swinging through it. Best of luck with everything for you and your teams as Babylon Health continues to disrupt healthcare and improve healthcare globally. Thank you so much for being here on Day Zero.
[00:19:38] Ali Parsa, Ph.D.: Thank youre for having.