Dr. Gary Bisbee: [00:00:00] Well, good afternoon, Matt, and welcome.

Matt Hollingsworth: Thanks for having me.

Dr. Gary Bisbee: Well, we’re pleased to have you at this microphone. So to dig to you a little bit before we get into Carta Healthcare what would, how would you describe your parents and their influence on your leadership and kind of your outlook and.

Matt Hollingsworth: Yeah. So, for my mom I came into the world with a kind of dramatic healthcare story. My mom was diagnosed with breast cancer about little six months and change into her pregnancy. And made a questionable decision to forego treatment until I was viable and she could give birth to me. And so, which I like, wouldn’t be here if she didn’t make that again, questionable for her health choice. So that was her first foray with cancer, but not the last she had five total during my life, which has been. Let’s say formative of my opinion of the health system, which is that they’re a bunch of awesome people. That saved my mom under [00:01:00] countless very difficult scenarios. So I had a very specific reason to care about the health system. Like more than your average person might.

Dr. Gary Bisbee: Yeah, that’s for sure. Well, God bless her

Matt Hollingsworth: absolutely.

Dr. Gary Bisbee: What about your dad? Was your dad kinda influential in how you

Matt Hollingsworth: Absolutely on the other relevant dimension to the company actually. So he has been in the IT world for since well before I was born and taught me basically everything I know about computers and the like, and got me interested in what eventually became a. Career in data science. So, both my parents, like very clearly together summed into what what car became eventually, so it’s kinda interest.

Dr. Gary Bisbee: Sure. Well, what about you and your interest in technology and engineering? I mean, you’ve just super, super successful and productive in that space, but when did you realize that you had that capability and were interested?

Matt Hollingsworth: So, as far back as I can remember, my dad has like, he loves the whole space and so he, like, we hung out together doing computer stuff [00:02:00] basically. And so like I, I enjoyed it from a very early age, but I would say, When I knew that was gonna be a very specific part of my career the first business I ever started actually was when I was 14, was a computer repair business. And I really enjoyed doing that. And so, that gave me, and it gave me a lot of knowledge about how the, everything worked and served me very well and everything else that I did so.

Dr. Gary Bisbee: Was there a point at which you realized you were interested in entrepreneurialism and starting companies, or did that just evolve?

Matt Hollingsworth: That really just evolved. Mostly like, I think in many ways it’s an irrational thing almost always to start a company. It’s, you know, stressful often if you are good enough to do that, you’re good enough to go get a nice, relaxing job somewhere else. So, I mean, I think for me, the reason to do it was always, There wasn’t anybody working on something that I thought was really valuable and important to work on. And Carta has no exception to that. If there was somebody else working on it, probably would’ve joined their [00:03:00] team, but there isn’t anybody else doing it. So, here we are, you know, Yeah.

Dr. Gary Bisbee: tell us about part of healthcare then.

Matt Hollingsworth: Yeah. So we built technology to help re remove the overburdening of administrivia in healthcare. Basically the technology the core thesis of it is that you can use really awesome new AI technologies to solve problems that historically people had to solve with elbow grease, like going and filling out forms, for instance. So really the, our mission is to make it. Docs and nurses can be docs and nurses and not administrative folks filling out forms.

Dr. Gary Bisbee: Well, a noble goal for sure. . Well, what about the name Carta Healthcare? I can kind of guess, but share with us where the name came

Matt Hollingsworth: Yeah, so the a key like backstory to understand about this is that the docs and nurses aren’t filling out these forms for no reason. They’re very valuable because what they’re doing is documenting what has happened to the patient during their interaction with the health system, which then the health system uses in the future to learn from. [00:04:00] And so at the end of the day, what you’re doing is mapping out the patient’s. That’s what it’s for. And that’s where car came from. So we were brainstorming sort of alternative, nicer sounding names to map , and that’s where Cara came from. So it was all about mapping the patient’s journey and learning from.

Dr. Gary Bisbee: I may not think. That’s awesome actually. So what were the steps that led to founding you and your part co-founders?

Matt Hollingsworth: Yeah, so, so my backstory, I didn’t, there’s sort of a gap that I didn’t explain at the very beginning. I did sort of technical things for a long time. I spent six years a lab called CERN in Switzerland. Was part of the team there that found a protocol called the Higgs Post on which is at its heart data science, like you have to analyze petabytes of data and then went on to do other sorts of, Doing data science. And so I, as you might imagine, I care a lot about data and its applicability in ways that it can solve either like finding particles or solve business problems for people both. And I think it’s a very powerful tool. And so that was sort of going on throughout the, throughout my career. And then my mom’s fifth cancer happened and that, and it was the first one that I’d experienced as a fully [00:05:00] grown like self-sufficient adult. And so I had a lot more involvement with that one than I did. Like when I was a kid, I was obviously involved. I was at the hospital, but I was mostly just scared and didn’t really know what was going on. And I got to see a bunch of things that were very interesting to me specifically. Just, I was driving her somewhere and I sat on a notebook and was like, what’s this? And, you know, opened it up and just her medical history curated by her. So in her handwriting that she’s had over 30 surgeries very complicated medical history, as you might imagine. And she has to take care of all that and explain it to docs as they, they come in. And then they spend a bunch of time typing into the computer and it’s very difficult for them to know what other docs have typed into the computer in the past, especially if it was at another health system. And so I learned a lot of interesting things through that experience. Specifically just A how much time docs have to spend documenting things and B, that is not easily communicated to other health systems. It was very much a silo.

Dr. Gary Bisbee: Well, let’s get back to Carta. So there are other companies that are in the data collection analytics. [00:06:00] Basically, your approach is quite interesting, I think, but what differentiates Carta from. Others out there that are kind of in this general space.

Matt Hollingsworth: So at the heart of it, the thing I’m most proud of is that we are a tech company, but we care. We have people like me and everyone who works at the company that is obsessed over change management and how technology interacts with the people at the hospital and responds to their needs as opposed to trying to force them into some new paradigm. So the thing that kill. Technology and healthcare is rarely the technology, it’s almost always the change management associated with it. So what we figured out is we like, part of the reason why that is the case is it’s easy to build tech that solves a problem that doesn’t exist. Like, you know that if you go, if everyone just changes the way that healthcare is delivered, then like, this will solve a problem for you and that doesn’t. Fundamentally, and part of the reason why people don’t do that is to actually [00:07:00] respond to the way that will have an impact is often much more difficult on the product front. And so data abstraction is skilled data entry. So it’s a thing where you need a nurse or a doctor. To fill out a whole bunch of clinical information about the patient in order to learn what happened during their journey and to learn from it in the future. So, what we did is we built technology that can wash them, work and learn from them, and then start replicating the things that are mundane and leave the things that are clinically difficult to their expertise. So the way that it’s out ends up panning out is that they can do the same job just the way they did it before, basically no change management at all. But now they have 10% the work they had to do. And you would get nice side effects of improved quality and improved time to value and improved turnaround times and all these sort of things. But from a change management perspective, it feels the.

Dr. Gary Bisbee: Yeah. Well, super. What about predictive data? Particularly predictive data for, in a clinical sense, for physicians? How are [00:08:00] physicians kind of accommodating that? How are they reacting to that? So on?

Matt Hollingsworth: Yeah, so there is a ton of value that can be created in this general umbrella, and I think that’s why there’s been so much academic interest. It turns out that the hardest challenge there is not an obvious one, but is, until you think about it for a minute, the hardest challenge is getting trustworthy structured data in the first place that these predictive algorithms can use to predict something. And the reason that’s such a challenge is if you need an army of nurses to fill out forms before you can build your model. Then the return on investment equation does not pan out like you spend 500 K of nursing hours to have a questionable, probabilistic impact that doesn’t work. So the fact that we can like solve that problem. Solving the foundation for that. And just to give some names here, like it we call the work of collecting the data. Our product line is, that’s called Atlas. Does that work? If we have a second product line that’s all about using that data for predictive analytics? It’s called navigator. And basically that can be so powerful [00:09:00] because you can go build these models on top of data that historically was not available in any finite time because you had to have nurses do it.

Dr. Gary Bisbee: Yeah. What about the economics or the financial data? How do you gather those data and how do you kind of plug them into your to your models?

Matt Hollingsworth: For the Atlas related thing, it’s all about time. So we can say like, Hey, you, you and your staff spent X time before and with us, you spent Y time and where that’s substantially less. And so the financials are like, you know, time is money. Back to that, in a lot of cases it’s measuring time. For people because that is such a finite resource at this point in history, in the health system. And that’s the thing that dominates the cost basis for hospitals is people’s time. So time financial data to productivity numbers is really the that’s the route that is the easiest to measure and is the highest impact in many cases. The other part though is that every hospital has different accounting standards and things like that, but giving them the tools to be able to pivot that into [00:10:00] their view on the world is the other side of that equation, which is something that is like we, we do a really good job of, there are a lot of people who do that part really well, but being able to give people the tools they need to pivot it into their way of thinking is the other side of it. And so like productivity measurement. Pivoting into the way that they view the world financially is really the two pillars of how that.

Dr. Gary Bisbee: Okay. How about the EMR companies? How you know, easy is it to work with them to get the kind of data that that you need?

Matt Hollingsworth: This was a big concern early on. The way I would say this is, it is very difficult for young companies to do this because, like, just let me use Epic as an example. Not to pick on any individual one, but just to make this really concrete what I’m about to say, what I’m about to say applies to every, everybody. To get data from their data warehousing solution, you need to have somebody with a. Certification. And Epic is the only one that provides that. And you can’t get that as an outside vendor. You need to do it at through a customer. And so the only [00:11:00] way that you can get it as an external company is to have someone who has already received that come in as a consultant and they’re not cheap. So if you’re talking about a, like, you could use sweat equity early on in a company to like do most things, but that’s something you can’t, like, you’ve gotta have a substantial amount of money to pay a consultant to be able to pull data from clarity. In their case. And so historically that’s been very difficult. However, that is changing in meaningful ways and it’s not a coincidence that we launched a company when we did standards like Fire, for instance, have gotten traction finally. And you can get good, solid information out of that enough to build a company on top of, in many cases. From standardized interfaces like fire, and at this point, all the major EHR vendors support that. And so as long as you support that, you can get a pretty good long way down the path, adding value using those sort of standards based approaches. Now, fact is everything doesn’t come from those, so you’re never gonna be able to escape. This like consultant based approach, but you can add enough value in those early stages of the company to get to the point where you [00:12:00] like raise enough capital or get enough cash flow to hire these other consultants to plug the remaining gaps. But you need to be very cognizant about that when you’re launching a given new product because if you can’t get it from fire, you’re gonna have to figure out some way to pay for those expensive consultants to get the data. Because otherwise you can’t get started. So,

Dr. Gary Bisbee: So let’s turn from your products. And how the users use what you’re providing them which sounds just terrific by the way, but what’s your marketing strategy? How are you approaching health systems these days?

Matt Hollingsworth: Yeah, so these days is an important thing. Like this has always been the case where I’m about to say, but we always make sure we lead with this at this particular point in history cuz it’s very important. Basically, all the health systems are hurting financially right now just because there are a lot of economic realities that are making it hard to do business right now, and things are changing in very fundamental ways. It’s like coalescent like. Inflation rates, labor shortages, labor rates and costs that associated with the labor shortages. Bond markets not being [00:13:00] easy, like all these things are converging a lot at once, and it’s making it really hard for the health systems. And so we lead with a, you know, we’re gonna be substantially better on your budget than your alternative solutions. Which is great. In, in all measurables from that like time to value the setup cost, the, like, the incremental ongoing cost, like every, we’re strictly better than all other alternatives on that front. So that’s a really important part of the pitch at this point in history. That has always been important of course, but like, that’s the thing we lead with because most people can’t work with any vendor that can’t say like, we’re saving you money or making you money, right, right this second. So we really lead with that in many. But then there’s the other things that are behind that are really powerful cuz not only are we cheaper, we also add a lot more value. So in particular, like all of our products, this is true for like you not only get the like basic, like in the case of Atlas, filling out forms and submitting them to the place where they’re supposed to go. Value. You also get this industry leading analytics stack on top of that allows people to [00:14:00] use the data to actually have a great impact on the organization as a whole. And that’s all packaged in. So it’s like not only is it cheaper, it’s more value as well. And like the timelines are strength, so you can actually act on the data. Like it doesn’t help if your data comes a year later, like the same doctors might not even be there. We can give it to you in less than a week. And. You can actually act on it. So all these other bits about, you know, take a constrained budget environment and improve the quality and efficacy of care at the same time. I mean, in some ways it sounds too good to be true, but at this point, like we can prove that it’s not. Cause we’ve had a lot of examples of this working. So, so really that’s the heart of the pitch at this point. Like more for less basically is the heart of the.

Dr. Gary Bisbee: Good. Sounds good. Well, why don’t we turn to all important financing. Congratulations. You just closed your 20 million B round in a down market. Good stuff.

Matt Hollingsworth: Well, thank you. Yeah, it was I mean, I would say it was nerve-wracking from the macro scale, but in retro, like it, it happened at a, we didn’t have to [00:15:00] struggle too much on it part mostly cuz the business fundamentals are, have been really good. And while it took a little longer than I would’ve liked, it didn’t like take. It wasn’t that bad, but it was mostly just because I think we’re in a really good spot right now, generally. So, but it was, yeah, it was scary. from the, just watching everything get set on fire. It’s like, well, I’m gonna have to go like, jump into this forest. It’s on fire. Was not a great feeling. Huh?

Dr. Gary Bisbee: I’ve I’ve been there and I can relate. Well, share with us who are your new investors in

Matt Hollingsworth: Yeah, so the new ones are Paramark and Fri Cressy are the new folks. And then all of our ex the all except a couple of our existing investors invested. So, I, and I’m very excited about both of them. Paramark brings international experience about the healthcare market. They brought several companies public outside of the us in exactly that space we’re operating in. So that’s been awesome. And then Fri Cressie has super deep expertise in the US market and has already been super helpful to us as well. So just both. It couldn’t have worked out better, honestly, like looking [00:16:00] back, I just we’re really excited that it worked out as it did.

Dr. Gary Bisbee: Well, that’s great For sure. What about the next round? I don’t wanna look too far down the road, but what are you thinking about in terms of timing of your next

Matt Hollingsworth: Yeah. So, the good news business wise for us with this financing is that it’s gonna pretty comfortably get us to the point where we’re just fully profitable, you know, positive ubi. Sort of profitable. So because of that means we get to kind of pick when we want to do that. And that means we’re gonna time, like, wait until the market comes back. So we, we are not gonna like, need it imminently to continue to exist. But obviously we want to invest as much as possible and gross. So we’re going to do that. When the market comes back is kind of the answer. By that point it’s gonna be a, we’ll be able to raise on the, all of our kpi. We already basically could do that. So, yeah, we’re just gonna wait and see what the market does is the short answer. Cause it’s kinda hard to predict that right now, as you might imagine. So, we’ll see.

Dr. Gary Bisbee: Okay. Well, let’s turn from financing then to you as an [00:17:00] entrepreneur and you’ve been an entrepreneur and you’ve worked not being an entrepreneur, but what characteristics do you think. Really signify a top level entrepreneur.

Matt Hollingsworth: I would say, well, tenacity would be the top one for sure, like especially when you’re young. You know the market is the market. It does its thing and you have no control over it. And sometimes it just like side swipes you in ways that are, have nothing that you never could have foreseen and just things will appear out of nowhere and you need to learn to. Take them and stride and plow through it. I think that’s the biggest one that I would say, like in our case, we sell into healthcare and like what happened to us? Covid, , this new, like all the health systems are being set on fire, some other things early on, like you can’t foresee these things is impossible. So, you know, being able to just be like, okay. We’re gonna take the next best step that we have available to us consistently and not get depressed when these things happen. It’s really important. So I would say that’s the top one. And the other one is like, I think this isn’t a [00:18:00] prerequisite, but it is a predictor of how happy you’re going to be working in it is that you should like, I think it’s a huge advantage if you genuinely care about the mission of what you’re doing. Like that’s gotten us through some rough times. Like at the end of the day, our mission is like, let’s let docs and nurses be docs and nurses. And I feel very strongly about that. And if we solve that in the way that we’re doing it now and succeed in scaling this, then also as a side effect, my mom’s story will never have to recur. Like people will know what has happened to their patients and that’s good for everyone. And I like us, my co-found, like my co-founding team, like everybody. Cares about this. So that’s what brings them here. And so I think really just caring about what you’re working on is the other most important thing cuz we very much do. And it gets you through rough times, . So between tenacity and that is like it, you could have a really strong and wonderful experience of it. Otherwise it can get really rough, I think.[00:19:00]

Dr. Gary Bisbee: Well, why don’t we build on that with the following question, and we do appreciate your time here. It’s been a terrific interview, Matt, but I’m sure there’s all kinds of young people that come up and say, Hey, Matt, I’m thinking about being an entrepreneur or starting this company, or, I’ve got this idea. What kind of advice do you give them, Matt?

Matt Hollingsworth: So as a warning to anyone who comes out to me, the first thing I ask is like, are you sure about that? Basically, or some like, do you have another option? Because I think generally, like back to the mission thing, like if there was somebody out there who was executing on the strategy that we’re doing now, I would’ve joined them. And that’s like, it doesn’t matter if they’re big, small, whatever, like that’s the thing I wanna work on. I would’ve gone and joined them because the, I mean, just the fact is the vast majority of startups, depending on who you wanna ask, like order, 90% of startups are gonna fail. And I don’t think like, A lot of entrepreneurs don’t realize that, like, don’t end their soul, realize what that means. It’s like, and the thing is like people and [00:20:00] everyone feels like, Hey, I’m just gonna figure out a way to not fail in this case. Right. And in a lot of cases you get sideswiped and you can’t, you have no control over it. Like just, and people like feeling that in their soul is the first bit of advice that I would give to people. Because if you’re, if you don’t have those first things that I mention, Then you’re gonna it. It’s gonna be an emotional rollercoaster that is not worth investing in if you don’t have the, which is why those are the things I feel like are most important. Conviction and tenacity, basically. So that’s the first thing that I’ll always say, and then I just try to make sure that people understand it. If they do, then the next bit of advice is sell now. Like it’s it. I have a predominant, like engineers, like engineering, technical co-founders are the ones that I get like have the most interactions with just because of my background. And there are a lot of questions about like, how do you pivot into, you know, being a business person basically. And so the most important advice, and what I’m about to say is true for everyone, but especially true for anybody who’s been an engineer and is thinking about starting a company is start [00:21:00] selling. Don’t, like, don’t even ride any software yet. It’s irrelevant. It’s not gonna predict your success. Like right now. This, the world is so far behind the cutting edge of what technology could do that if we didn’t write another line of code out there, like you still, you could have very successful startups for decades to come. Like the hard part is finding people who have a need that you can address and have money for it, and if you can’t find those two things, it doesn’t matter how good your idea is, how great your software is, you’re not. And I think a lot of engineers don’t, again, back to like feeling that in their soul, they haven’t had a need to feel that before cuz they never had like a sales quota or what have you. And so just focusing on that and only caring about that for the first like year and a half of the company, let’s say, is really essential. Huh.

Dr. Gary Bisbee: Matt, I think that’s incredibly invaluable advice and it’s not just engineers given my experience by the way. I think that’s generally, you know, [00:22:00] generally a problem. But anyway, terrific interview. Thanks so much. Carter has just got a great mission and plenty good luck to you to make that truly successful over.

Matt Hollingsworth: Well, thanks so much for having me. It was really great to talk to you.

Dr. Gary Bisbee: Thanks, Matt.

Matt Hollingsworth: Thank you.