Entrepreneur Rx_Orrin Aillioni-Charas: Audio automatically transcribed by Sonix

Entrepreneur Rx_Orrin Aillioni-Charas: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

John Shufeldt:
Hello everybody, and welcome to another edition of Entrepreneur Rx, where we help healthcare professionals own their future.

John Shufeldt:
Hey everybody! Welcome back to Entrepreneur Rx, my name's John Shufeldt. Today I have the distinct pleasure of chatting with Orrin Aillioni-Charas. He is an MD, MBA, he is the co-founder and managing director of Cura Capital, which is a Healthtech VC fund, anesthesiologist by training, he's done all sorts of things that we'll get to hear about. Orrin, welcome to it.

Orrin Aillioni Charas:
Thank you, it's great to be here, John, appreciate it,

John Shufeldt:
Thanks for taking the time. Okay, you've got a really cool background and people are going to want to know, like how you did years of anesthesiology, and then you've morphed into a whole new line. Give us a little background of your kind of premed and medical school.

Orrin Aillioni Charas:
Yeah, so it is a little unusual. I, originally from New York, I live in San Francisco now, but I went to Penn undergrad and did my pre-med there, University of Pennsylvania, and then went to NYU School of Medicine in New York City, and then did my training in anesthesia at Mount Sinai Hospital. So it was interesting, the trend at that time was that people started to get MBAs sometimes during their residency. So there was already this idea that this might be something valuable, but people couldn't really articulate why they were doing it, and most people who were doing it, were doing it but fully expected to continue practicing medicine and maybe get into an administrative position. There was a subset of people that were planning on completely leaving medicine and then leveraging their degree differently that I was aware of. So I got out of residency and started practicing, and for me, the epiphany was that as an anesthesiologist, and I thought I was great, and I'm sure like everybody does, but I realized that if I didn't come to work one day that they would find somebody else and the job would get done and they would probably be great, too. And so even though on a 1-to-1 basis, every person I took care of received this, what I considered quality care, it really wasn't moving the needle, right? Because if I didn't show up, somebody else would do it and probably also do it well. So I wanted to do more, I wanted to have more impact, I wanted to be less of a commodity. And so I recognized that in the business world, there were a lot of lessons that were learned that we really didn't bring into medicine. So I said, Well, I'm going to get my MBA. I was in New York, I applied and got into the Columbia University program and got my MBA, and that was a real education. And when I was there, I'd had some exposure to some venture capitalists, including one who I met through his daughter, who was an early investor in Apple. So I really got this great view of what venture was and its role, right, which is a driver of innovation, which is a driver of GDP, which is really critical to our economy. And I said, well, that's really interesting, I never looked at it that way. So I, in my spare time, I started to work with some venture capital people in New York City to learn more about the business, and really enjoyed it. There was this great imagination and creation happening there. So fast forward, I finished the degree, moved to San Francisco, worked in my practice where I became a member of the board. The CFO got to use my business degree, but in business school parlance it was kind of a failure because I wasn't monetizing it, but I wanted to do venture and I figured I was in San Francisco and this is sort of the heartland of venture capital. There's got to be a way, but it was very difficult as a full-time practicing physician to do that. And of course, I had debts and a young family. There was no way I could walk away and go be an errand boy for a venture firm, that didn't make any sense. So ultimately, I found a startup that was working in the venture space in healthcare called AngelMD, and they were looking to grow. They were very early company and they needed somebody with my skills and my clinical understanding, and so it became a really great stepping stone into the venture world. So that was kind of my path, really unusual, but that's how I got there.

John Shufeldt:
All right, so okay, let me back up a little bit. So what was your undergrad degree in Penn? And the reason I'm asking, it will be clear in a second.

Orrin Aillioni Charas:
Basket weaving, no, I'm kidding, just biology, biology with a minor in psychology.

John Shufeldt:
Okay, so you're atypical, so I was sociology, criminology. So you didn't do finance business, that sort of thing.

Orrin Aillioni Charas:
No, I guess my only exposure really to business was my dad who was an entrepreneur, a businessman, had a marketing firm, and so it's a little bit in my blood, and I grew up watching him run his business. So I always had some entrepreneurship in my blood, but no, medicine was my goal.

John Shufeldt:
Yeah, you got your education at the dinner table in many respects. How long after, I did and still do emergency medicine, which is very similar to anesthesiology and science.

Orrin Aillioni Charas:
Right.

John Shufeldt:
Shift work, how long after you started that, you realized that you guys, when I say you guys, I mean, anesthesiology, and EM the same way, you kind of commoditized yourself, and obviously, we don't do it to ourselves, but like you said, at the end of the day, if I'm out there or someone else is.

Orrin Aillioni Charas:
Yeah, it was pretty early on, actually. I mean, I was out of residency, so now your head's in the game of being a practitioner, getting paid. What does this mean? And some of my observations were that people with fellowship training seem to have leverage over people who weren't people in New York City at the time, at least because this was late 1990s who were doing research, were elevated over people who were doing just clinical work. There was like, it's like a second-class citizenship, and maybe a lot of that had to do with the politics of the environment at the time, but really, it was very clear at the time that I was a worker bee. And as brilliant as a doctor might think he or she is, at the end of the day, if you feel like a worker bee, that's not really, you don't go to medical school, do all of that work to be a drone, you do it to save lives and to help people. And I don't know, it just felt like, it felt unsafe. It felt unsafe, it felt like a lot of people had levers that they could pull that would affect my life, and I wanted to strengthen the ability to push back against that.

John Shufeldt:
Yeah, or maybe not even that, but maybe just have a ..., you know, the plan B and C, you know, I realize that if I wasn't working, I wasn't making money, and then, I had seen a couple of people I was in residency with get hurt or sick and we're all one-trick ponies, and so yeah, we could go work in an urgent care maybe, but a lot of them, you know, they got frozen shoulder or they had something where they couldn't walk or they couldn't intubate anybody if they had to. And they were kind of like, crap, now what do I do? So yeah, I, totally, you know, I guess that's a lever, you know, if somebody else pulls a lever and you're kind of out of luck.

Orrin Aillioni Charas:
Well, and that's actually more appropriate than you realize because in 2017, I got a medical diagnosis that forced me ultimately to retire from medicine. So fine, I'm healthy, I can do lots of things, but that was not going to work out anymore. And so, fortunately, because I've been doing all of this other work and I have that experience, I can do all of this. It was never really a plan B, was it more of a plan adjacent, but it became plan A anyway.

John Shufeldt:
I mean, it's a great way, and what I, you know, what I hope this podcast does is it allows a physician to think, you know, I was an undergrad bio psych major and yet I can hedge my, take my education, hedge it and do entrepreneurial things much like you've done. When did you, how long were you in anesthesia attending before you went back and got your MBA, and what is your partners think of that?

Orrin Aillioni Charas:
So I was in my first, my second private practice job, my first non-academic job. It was within two years, three years of residency. So it was pretty quick when I, and part of that was I had to apply to the, what is it, the G-Med, and apply to the school and get into the program right in the proper timing, so it was pretty quick. But also you're young, I didn't have kids, I didn't have debt. You know, that's the time when you can really flex and do things like that is, you know, especially if you have a family. As you get older, right, you want to devote time and assets to that, so you become less limber in your career.

John Shufeldt:
Totally, and I didn't, you know, I see a lot of MD/JD programs right now and a lot of the MBA programs. I wasn't quite that smart, I don't think they had them back then. But so I, you know, I was a couple of years, three years out of residency, I think when I went back and got an MBA.

Orrin Aillioni Charas:
You know, just on that point, I don't know the programs themselves, I haven't really talked to people who've gone through them, but I would say that I really like my approach because when I was a doctor and learning about medicine, I learned about medicine and I wasn't distracted by ..., you know, contracts. And then when I was going to business school, I was really interested in being there and learning it, and I didn't have the pressures of learning how to intubate or put in a central line or what have you. So I don't know if doing them at the same time is, it's efficient, I don't know if it's as valuable.

John Shufeldt:
Well, they're usually one-year program. So the MD/JD is a two-year program and then the third year is kind of a research paper and the MBA is one year and I'm familiar with a couple of them because I'm involved with them, but I agree with you. I don't think you get the impression that you really need to get the most out of it. I think you get the letters and some education, but not truly the experience, my two cents. So you go to San Francisco, you're practicing there for ten years, 13 years?

Orrin Aillioni Charas:
20 years.

John Shufeldt:
Oh, 20 years in San Francisco, wow. Okay, so then you have some executive roles there, and then when you left your anesthesia practice, you went to AngelMD?

Orrin Aillioni Charas:
No, no, no, I was doing them simultaneously. So AngelMD Was like a side hustle I could do in my free time, and then I worked there, and I worked at Red Crow.

John Shufeldt:
What's Red Crow?

Orrin Aillioni Charas:
It's also a, it was a network that aggregated, it was more focused on the startups and marketing the startups, but it was a network to help startup healthcare raise their profile and hopefully attract investors. And I got to work with the Cleveland Clinic, I got to film a show with Nasdaq. I got to work with the AMA on their innovation network online effort. So I have had a lot of really interesting experiences that then brought me to my fund, my first fund, which I ran for a while and now have left to join to run a larger institutional fund called Cure Capital.

John Shufeldt:
So let's talk about Cure Capital. What is the, I notice a bunch of similarities with what we're doing, which is exciting. What are you, tell us about Cure Capital. What's it, what's its goals?

Orrin Aillioni Charas:
So the thesis, the investment thesis is that we're a San Francisco Silicon Valley-based venture fund. We're hoping to raise in our first fund $50 million to invest in seed and Series A US-based digital health and Medtech companies. The space, and I'm not surprised you're in the space, that seed and Series A space is a really, really interesting space. On the downside, it takes a longer time for companies to exit in that space, and so they're riskier, and even the time to money when they're successful is loans. On the other hand, those are times in the life cycle of those companies where people like us can provide tremendous value and access to doctors, access to people who understand business in the healthtech and Medtech space. It's really hard for them to get, so we really can provide strategic money to companies at that stage. I think that's really important, And more importantly, we have insights, I have insights that allow me to pick winners and losers, I think, with a much higher degree of certainty than most other people.

John Shufeldt:
What are you, so this will be interesting when you said that and for folks that are listening, that are interested in looking at venture capital, that have a startup idea, what are you looking for in these founders?

Orrin Aillioni Charas:
So what am I looking for in the founders? Well, so an ideal founder is going to have experience. They're going to know how to run a company. They're going, so there are three risks I look at. When I look at companies, I look at their clinical risk, I look at their risk as a business itself, and I look at their finance or capital risk, right? Most of the companies I invest in are going to go through the FDA for clearance, and so they're going to, there's going to be a long period of time where they're typically going to not have revenue. If they don't have revenue, the only way they can sustain their business is through grants and investment. So grants are great, but they're hard to get, they're going to be capped and they take a long time to realize, so really what you're looking at is the private markets to support those companies. So if you can't raise money, you're done, it doesn't matter how good your company is. So the financial risk is real, the clinical risk is real. I'm sure you've seen lots of companies that present to you and you look at them and you say, this just doesn't make any sense. Or I've seen 100 companies doing the same exact thing or whatever, right? And so I have a pyramid in my mind. It's really not sophisticated, but the first thing I do is look at what they're doing clinically and see, A, if I think it's viable, and B, if I think if it excites me, you're going to really get into bed with these companies. One of the things people don't know much about venture, if they haven't studied it, is that we look at 1000 companies for each one we invest in. So really the answer is no until it's yes rather than yes, until it's no. And so you want to be excited, you want to be excited about what those companies are doing. Once you've cleared that barrier, once they've sort of gotten through those filters that I established, then the question is, do you want to work with these people? Are they trustworthy? Do they have experience? Do they have credentials? Do they check the boxes that they need to check in order to be successful? So we see a lot of first-time founders in healthcare, often they're academics, so that's not necessarily a non-starter, but it is better when somebody has already done it, when they're a seasoned and experienced entrepreneur. There was a study, I think, out of Stanford recently that showed that the best indicator of success in a startup founder is previous failure, which is counterintuitive, but it just shows you that there are lessons to learn, right? Nobody can intubate somebody probably having never intubated somebody before.

John Shufeldt:
Totally true, so it's interesting, I was talking to a gentleman last week and, you know, I've always had this mindset of you need to be all in. And so like all these different businesses I've started, I was never all in. I always practiced emergency medicine. I always had my, my, my backstop, and he had literally walked out of medical school, never looked back, started a really cool company. And what I, and I said, wow, you really burned the ships on this one. He said, Well, actually, yes, but the studies are that people who don't do that, who have this other source of income do better, and he pointed me to this book by Adam Graham called The Originals. And sure enough, there is a study that said for these entrepreneurial founders, the ones that keep their day job, so to speak, for longer, have a much better chance of success. And they gave all sorts of examples, probably the most notable, which was Wozniacki, who continued to work for another two years after Apple was founded, and then they talked about Susan Blakely from Spanx and all these people who, that never quit their jobs until their company was pretty successful along the way. What's your sense of that?

Orrin Aillioni Charas:
My sense of that is that it's not uncommon, particularly in companies coming out of academic institutions, that people don't want to give up their day job. The question is, is there value added? And of course, for everyone, the value added is that it takes economic pressures off of the founders, right? That's a big, big deal, right? The mental health impact of founding a company and having no money and not being able to feed your kids, right, that's huge, and it's not going to help you succeed. So the other question is, is there a clinical career advantage to the company? And in healthcare, I would argue many times it is, right? Having yourself immersed in that environment keeps you, and that's why when I was in AngelMD, I was actually glad to be a working anesthesiologist. Hey, today I'm looking at an EMT company and I happen to be doing tonsils, let me talk to my colleague. Today, I'm doing something that relates to neuro-intervention and cerebral aneurysms, let me talk to the guy who's doing this stroke case that I'm on right now. So I think there are advantages, but there's no question that at some point the founders have to be all in, they have to be committed. And I think that point is going to be at the point where you're taking maybe not the first institutional money, if you're taking small money from people like us, but certainly, when you're going further out. You as the founder have to decide, am I the leader of this company or am I chief medical officer or chief medical officer adjacent, and we have to bring somebody else on who's committed?

John Shufeldt:
Am I an advisor consultant or am I all in? But I thought, I found that interesting, And I always put that as like a mark against myself when I, you know, I haven't been all in. And then I recently finished The Originals, the book I mentioned, I'm like, okay, maybe it wasn't so bad, maybe I should set myself up for some success as opposed to burning the ships.

Orrin Aillioni Charas:
I think so, I mean, John, I got to be honest, I think that what I like to do is look at again, I have these very simple mental frameworks, and I look at the boxes that have to get checked, and if you're able to do what you need to do and meet your milestones and make your commitment and maintain your mental health, to me, it's a value add that you can pay your bills and you're not hungry. If you can't, then we have a problem, and whether that means because you have another job or who knows what, that's a problem.

John Shufeldt:
So what advice would you have? Because, you know, I noticed this even before COVID, but I definitely notice it now. There's a lot of our colleagues that are like, Yeah, this medicine thing was great, and I love practicing medicine, I love taking care of people, but it's not the end all and be all. I want to do something else, or I want at least have the opportunity to do something else. What advice would you give them?

Orrin Aillioni Charas:
Well, I think everybody's different, so you have to ask yourself why and what you're looking for. Everything ultimately is a job, right? Great painters, great writers, they sit down and they grind it out every day and it sucks, right, but they make great work. And I think probably the same is true for doctors, for lawyers, right? I mean, the grind is the grind. Waking up at 5:00 in the morning every day to get to work before the sun comes up is terrible, but you're doing really important work so don't minimize what you're doing, and don't think that the grass is like all champagne and caviar on the other side. That being, so I think the first thing is evaluate your reasons, but if you can sustain it financially or you're okay taking a financial hit, whatever, and you're really not happy in medicine, you shouldn't be there and find something else. But I think it's important to not just know why you're leaving something, but know why you're going to something and go for it thoughtfully.

John Shufeldt:
I was, and I'm not sure people are that unhappy in medicine, I mean, even today even my EM colleagues and, we kind of got a little bit of, we got a little beat up during the worst of COVID, some a lot more than others. And I consider myself pretty fortunate not to work some respects, I wish I was, wish I would have been there, but not to work in New York and Seattle on the real hot spots, Phoenix was bad enough, but I don't think they want to necessarily leave medicine or they don't like it. They just want to hedge, and I've always thought that what kept me from getting burned out in medicine was being able to have these other opportunities to use my creative, you know, be creative and use my, what, mild intellect I have to do other things. Do you sense that? Do you sense that this is a good hedge against burnout?

Orrin Aillioni Charas:
I do, and I think that that's the point I probably should have made before, which is that what I've observed is that doctors in general are lifelong learners. Think about it. How old are you when you're finished with your residency? 30 years old, right? So you've spent the first 30 years of your life constantly taking in information and more and more information as those years escalate and even in the beginning of your practice, right? You're not, it takes like, what, four or five years to get to this steady state in your career as a physician, right? And even then, you're still going to learn, but the pace changes. And I think one of the things that happens is we get intellectually stagnant, you know, it becomes a grind. And that's great because it lets us practice, it lets us build a career, it lets just maybe focus on things like administration, but we are not stimulated in the way that we had been for years and years and years and the way we have adapted our bodies and our brains. So I think finding something in your world, whether it's being a painter, whether it's volunteering, whether it's becoming a venture capitalist or advising a startup, that having something that stimulates you and excites you is a really good way to stay in the game or transition to something else. So I agree with you 100%. For me, it was venture, but I don't know that venture is magic over something else.

John Shufeldt:
Right, no, totally true. You know, I think physicians, and I know you've heard this, physicians make bad business people, and I always argue the opposite. The physicians make great entrepreneurs, because if you just look at our training and our resilience and grit, I mean, nobody ever goes back and says, oh, yeah, medical school was easy, undergrad was a blast. I mean, we all go by and go, I had a great time, but, you know, when people are out partying on Friday, we're kind of grinding it out a lot of weekends. And so none of us slack on resilience or grit or creativity or tenacity, which are kind of the core building blocks for entrepreneurism. Any thoughts on that?

Orrin Aillioni Charas:
Yeah, I agree with you 100%, but I'll make one exception. But I like to use the analogy of anesthesia, which is you're sitting in the operating room, you put a patient asleep, their blood pressure drops, and there's this cycle of observation, diagnosis, action, observation of the response to the action, and then it cycles through, right? So in medicine, you're constantly assessing your environment, you're constantly pivoting, you're very limber. You have to be, because obviously there's a lot on the line. And I think that works really well in business, particularly in the early stage where things come at you, you don't know what they're going to be. You want to be innovative, but sometimes innovation leads you down the wrong path. So I think that doctors have the mental and the emotional fortitude to be good business people. The problem, I think, that doctors get into is that they also have arrogance or can have arrogance, and business is different. Just because you're a good doctor doesn't mean you're going to be a good business person. You know, you've got to learn things, there are ways that, they're just different processes involved, and if you don't learn them, if you don't take the time, then you're not going to do well. And the other thing is that as a doctor, we start up, we're like in the operating room, I was the CEO, right? I'm making the decisions. I'm not waiting for permission. You know, these big, important decisions that sometimes saved or jeopardized somebody's life, usually saved, but when you work in a business organization, especially when you come in lower, you're not the CEO, you're not the boss, and you have to learn what those things are to make good decisions. So you have to set the ego aside a little bit to become a business person.

John Shufeldt:
Yeah, totally, it's you know, if you have a degree of humility, you're open to learning and making mistakes and not being risk averse, I've noticed that as well. And you know, I was, the famous Mike Tyson quote, you know, if you're not, don't have humility, the world will visit humility upon you. And I think we all learn it one way or another, whether we were started out that way or we were, like Mike Tyson, forced into it or.

Orrin Aillioni Charas:
Or maybe a little bit of both.

John Shufeldt:
Yeah, a little bit of both. So and where can people learn more about you and about Cura?

Orrin Aillioni Charas:
So, we do have a website which has some media on it. CureCapital.co. So you're welcome to see me there. You can also send me an email at Orrin@curecapital.co. You can find me on LinkedIn and connect with me and reach out to me if you want to chat or have questions if you're interested in being a part of a venture fund. The other thing I'll just add is that what I like to do is build networks of physicians that can support the venture fund. Again, getting back to this knowledge that, my knowledge is limited, right? I want to bring in as many experts as I can to look at things and to support things because I think that having that seat at the table with our tribe really can be transformative in innovation in medicine.

John Shufeldt:
Yeah, I totally agree, and we'll have everything in the show notes. So thank you very much for being on, this has been hugely educational, thank you.

Orrin Aillioni Charas:
Yeah, it's a lot of fun. Thank you, appreciate it.

John Shufeldt:
Thanks for listening to another great edition of Entrepreneur Rx. To find out how to start a business and help secure your future, go to JohnShufeldtMD.com. Thanks for listening.

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