malay

GOOG split in early April to create a third class of shares (Class C) that allows the founders to maintain control the company through their shares (Class B) for the foreseeable future. They had issued so many Class A shares, their 10:1 voting rights were becoming diminished.

Neither company cares about the comparison.

Visit rockhealth.com/startups/submit/ and let us know if you have any questions. We host office hours every week or I'm happy to walk you through it via e-mail.

We're a full-service seed fund. Our roots were as an accelerator, but over time, we have realized that we continue to support our portfolio companies long after they "finish" at Rock Health.

Our equity investment model is very similar to the YC/Start Fund relationship. KPCB, Mohr Davidow Ventures, and Mayo Clinic fund the companies we select with a $100,000 convertible note, at the same terms of an existing/pending seed round, or on flexible terms up to an uncapped note. We're different from YC in the sense that Rock Health itself takes no equity in the companies. We try to be extremely entrepreneur-friendly, and ultimately, the convertible note is entirely optional. For companies that don't want the note, we write non-dilutive grants up to $20,000.

In terms of whether we help our companies get funding (or not), our companies have raised more than $100M[1] from investors including Collaborative Fund, Felicis, First Round, Floodgate, Founders Collective, Founders Fund, General Catalyst, Khosla Ventures, NEA, The Social+Capital Partnership, SV Angel, True Ventures, and USVP, just to name a few (for context, our first cohort of companies finished at Rock Health in November 2011).

[1]http://rockhealth.com/about/annual-report/

We would love to hear more about it. We don't have any sequencing companies, but have multiple hardware and medical device companies in our portfolio. We don't shy from capital-intensive businesses.

Malay here from Rock Health—you're absolutely right. We have two close partners in the area (UnitedHealthcare and Mayo both) and come out once or twice a year.

I'd love to connect with the community next time I'm in the Twin Cities. Send me an e-mail (in profile or malay@rockhealth).

I was almost positive I had read the idea of Twitter as a protocol before (or something very similar), even though on Twitter[1] pg notes he never published this specific piece despite having written it in 2009. I really appreciated the simplicity of thinking of Twitter that way, and the definition has stuck with me.

In case anyone else wanted to know where they read it, it's under Request for Startups, #3[2].

[1] https://twitter.com/paulg/status/338702876744482816

[2] http://ycombinator.com/rfs3.html

For medical devices that are based on modern mobile platforms, the average FDA clearance time is down to 67 days. It's not nearly as capital-intensive as it used to be and there are going to be plenty of predicate devices to base your filings on.

The ubiquitous computing plus sensor environment is making healthcare hardware startups the norm—we're seeing more and more applicants in this space at Rock Health. We don't think the FDA process is that onerous, and just published a report outlining the process for entrepreneurs who are new to the space.

If you want to dig into the million SNP raw data from 23andMe any further than what is presented on the website, Jeff Hammerbacher and Konrad Karczewsk taught a Skillshare on doing your own personal genome analysis with Python and various other tools.

Slides here: http://www.slideshare.net/jhammerb/20130206skillshare

Github repo here: https://github.com/hammer/personal-genome-analysis

If you don't hear from one of our alumni because they happen to miss this thread, feel free to e-mail me (e-mail is in profile) and I would be happy to connect you with someone.

These are some good points. On the EHR question, I think what we would like to see is a company that starts using the work coming out of Standards & Interoperability (S&I)[1]. One can reasonably expect that much of this work will surface in Meaningful Use requirements (since one of the primary objectives of MU is interoperability) and thus would force vendors, including Epic, to comply. The platform here would do the "hard work" of integrating under the S&I frameworks to multiple endpoints and exposing the integration through developer-friendly APIs, similar to what Eligible has done on the administrative side. We see this type of "easy" integration leading to more modularity for EHRs (which is supported by Meaningful Use requirements) and ultimately better end products for hospitals and patients.

[1]http://wiki.siframework.org/

For a number of common health insurance transactions (verifying/checking health insurance information for a patient, procedure eligibility, patient demographics, claims status) that are part of the standard HIPAA transaction set, Eligible replaces legacy X12 EDI with a modern API.

Basically, if you are building any healthcare tools that could use administrative information from a health insurance company, you should probably be doing it on Eligible's platform.

http://eligibleapi.com

While I agree they are still heavily supply-constrained, the CapEx figures that Apple has released indicates they are significantly ramping up manufacturing capacity. They have sold more than 15M iPads in a quarter before. I would be surprised if they didn't have the capacity to sell 20-25M this holiday quarter.

Even using current run rate sales of the Nexus tablet, they would only be selling 3M a quarter. Apple sold 3M tablets in a weekend. If only 20% of the reported sales were for the iPad Mini, it is doubtful Apple will be outsold in the holiday quarter (even with giving competitors the extra month), especially considering its distribution reach. However, we'll never know, since neither Google nor Amazon release sales figures (Asus reported the Nexus number).

Pharmaceuticals represent approximately 10% of total health care expenditures versus hospital, physician and clinical services representing approximately 51% of total health care expenditures (for the latest estimated year of spending, 2010) [1].

Within Medicare, prescription drugs account for 11% of total Medicare expenditures and are projected to be 13.5% of total expenditures by 2021 [1].

Further, the prescription drug benefit ("Part D") has cost about 30% less than estimated by the CBO when the Medicare Modernization Act was passed (2003) [2]. This is due to a variety of factors, but a huge one has been lower-than-expected growth rates in per capita spending on prescription drugs, estimated at 4% per year since 2006 [2], much lower than overall growth in health spending.

[1] http://www.cms.gov/Research-Statistics-Data-and-Systems/Stat...

[2] http://www.kff.org/medicare/upload/8308.pdf

There was significantly more behind the scenes. It would be very similar to what PwC just paid for (rebranding from PriceWaterhouseCoopers) [1].

Accenture was a rebrand of Andersen Consulting, the consulting division of Arthur Andersen, the large accountancy. The Big-5 accountancy gave them their entire brand position, so the creation of the Accenture logo involved all of the campaigns for them to emerge, not just the logo or mark. This is also why their ads are in every airport—the brand identify had to be built from scratch. For Accenture, it ended up being exceptional timing, considering the Enron scandal would emerge in a year or so and end up destroying Arthur Andersen.

Most of the accountancies examined spinning out their consulting divisions, similar to Accenture. I wouldn't say the results were as successful as Accenture for those that chose to rebrand. E&Y sold their group to Cap Gemini, becoming Cap Gemini Ernst & Young, and eventually just Capgemini. PwC was going to spin out their division as "Monday", but instead ended up selling the group to IBM (only to eventually restart again). KPMG had BearingPoint, which eventually went bankrupt. Deloitte contemplated rebranding their consulting group as Braxton, but it never happened.

All in all, seems like the $100M was worth it.

[1] http://www.fastcodesign.com/1662367/pwcs-mighty-morphin-logo...

Changing the basis of competition in the marketplace from price to convenience (i.e., ease of use) is exactly what disruptive innovation is. Not all disruptive innovations are low end.

Stripe is actually more like a new market disruption because it is bringing in non-consumers who might not have even been able to setup payment processing without their solution. The same is true of Gumroad, or Shopify.

I don't disagree with the path you see Facebook going down and how disruptive it might be to Google. However, we shouldn't disallow for the chance that there will be an alternate future where "every little thing you do" is owned by an individual instead of a corporation or multitude of corporations. A personal data store, that companies pay the individual to access, is not inconceivable. It's being created by researchers[1] and start-ups[2] and may be accelerated by privacy laws.

[1] MIT Media Lab: http://media.mit.edu/research/groups/1448/openpds-privacy-pr...

[2] Personal: http://www.personal.com

Ballmer certainly deserves more respect. Microsoft is still growing and making significantly more money at higher margins than nearly every other company on the planet.

This article was published in a week where the CEO of a major corporation admitted that he was completely wrong when he called concerns about his bank a "tempest in a teapot" just 4 weeks ago. He called his own company "sloppy" and "stupid" on national television.

And Ballmer is the worst CEO?

The idea that you can mask learned knowledge of a company's strategy by simply not explicitly revealing sensitive information is a difficult concept to wrap my mind around.

It is not possible to unlearn the information. If you are acting as a strategic advisor, the information has to weigh in your mind and you implicitly will end up revealing information, practically subconsciously. A simple case would be where one company explains an experiment they ran (perhaps testing a feature with a small part of their customer group) and the result of the experiment. If the competitive company comes in and says they are thinking of running a similar experiment and explicitly asks the advisors what they think—what is the response given?

I have a hard time understanding how this type of accumulated information could not enter into future judgments the advisors are making. As a management consultant who faces this type of challenge frequently (and overcomes it by avoiding competitive clients and never sharing my work) I am honestly curious how one elevates themselves above this type of subconscious thinking.

It would seem that a number of wealthy folks have an interest in space exploration. Musk has been mentioned, but Peter Thiel has also funded someone pursuing the idea of resource extraction from near Earth asteroids. Granted, it was for the 20 under 20 fellowship, so he is focused more on the research and design component, but nevertheless a fascinating area for wealthy people.

The history lesson on Amazon's business model is important, but the OP has it a bit wrong. The business model innovation was about inverting the cash flow and holding cash instead of inventory. Amazon actually pays suppliers much faster than traditional book retailers, making it better for the suppliers.

Traditional book retailers pay suppliers 90 days after the book enters inventory whereas Amazon averaged about 58 days. The problem for traditional retailers is they held books in inventory (i.e. the book went unsold) for an average of 167 days versus Amazon's 16 days. This resulted in retailers carrying the cost of the book for ~78 days while Amazon was able to hold the float for ~41 days.

The end result of that type of inversion is that Amazon can accept a much lower margin, earn the float on the cash and live off much faster inventory turns than a traditional retailer. This was much more brilliant than "disintermediation" - as another poster has correctly noted, Amazon was an aggregator/replacement, not a true disintermediator.

Apple and Tim Cook have made it clear that they have more cash than what is required to run the business. Apple is spending billions on data infrastructure, manufacturing, pre-purchasing components and expanding retail operations; despite all these investments, they still have more cash than what they need.

They will likely generate another $50B in cash this calendar year. Even if they want to maintain the $100B war chest, they could pay out ~$50/share/year. I think a share repurchase or dividend (whatever they think will return more value to the shareholders) is highly likely.

My comment should have said that absent insurers over that time period, prices would be higher than they are currently. The effect they have is on controlling the level of price increases, not on lowering price absolutely (which I doubt is possible if people wish to keep extending their lives).

I am not saying that insurers are the most effective option or advocating for them; I am only saying that without them, prices would be significantly higher.

If you need evidence, simply compare the total price of any health care service (i.e. total cash outlay by all parties) between a person who carries health insurance and a person who does not. Universally, the price of the service is higher for the uninsured as they lack negotiating power.

They are certainly lowering the prices, hence the constant back and forth (literally for 30 years straight) of local market consolidation between the buyers (health insurers) and the suppliers (hospitals/physicians). There are legal fights going on all over the country because of all the pricing issues; Pittsburgh is a great example of how the dominant insurer (Highmark) simply refused to pay the dominant provider's (UPMC) price increase. Highmark's solution? Vertical integration and just buy the other local health system.

In terms of MRIs, you have some odd effects with pricing, particularly when the MRI is seated inside of a massive tertiary care center instead of a standalone facility. If you look at the pricing discrepancies, it is almost always related to getting the MRI done at an academic medical center versus one of the ambulatory care centers. The problem is actually pretty simple: hospitals are terrible at cost accounting and totally game it. Instead of taking the leasing costs over the expected uses of the machine, adding in time for the technician and a bit of a real estate or facility charge, they allocate hospital costs (from all departments/overhead) to services based on their expectations on what they can charge. Michael Porter and his staff at HBS are looking at this right now.

Further complicating MRIs (I'm not sure if this is included in the study's cost estimate) is that radiologists essentially operate in a cartel fashion. They are rarely, if ever, employed by the hospital (like most doctors), but band together and set outrageous prices for reading images. Radiology, despite being non-patient facing and limited liability (they render opinions to other doctors, not patients), is one of the most lucrative medical trades. Eventually, traditional radiology should give way - either through disruption (overseas or computers) or by other doctors simply saying why the heck should a radiologist get money for reading an image I can read myself and will then have to intervene on anyways?

Startups have emerged in price/transparency space (e.g. Castlight Health) and will hopefully start to put pressure on hospitals/physicians to actually compete with one another and bring down costs. Since they have so much local market power, there is only so far an insurer can go without owning an entire market.

Last July I took a taxi in Chicago and the driver was using a Square card reader. I take a few taxis every week in various cities, always paying by credit card (so it can be expensed), and it was the first and only time I've seen a taxi driver using Square.

I asked him about it and he said it was personal and he had not seen any other drivers using one. It's non-sensical and as an earlier poster noted, also a bit of a political issue, since the existing terminals force the driver to pay 6% versus 2.75%, with no ad revenue sharing. I talk to the drivers here in Boston quite often, and they have no choice on the terminals they have in the cars. One would think that if drivers are forced to accept credit cards, they should at least have the option of choosing a vendor.

Do you think the fig leaf is there for regulators or the other Android hardware manufacturers? While I agree there is no legally binding firewall (simply self-imposed), it seems there are some concerns they are attempting to address publicly.

I find Google's comments disturbing because the idea of a firewall means they have no intention of integrating Motorola. This would essentially limit any synergy between the two companies and turns this into a huge patent acquisition that comes with a side of distraction. If I was an investor, I would hope your theory of this being a complete joke is accurate since it entirely changes the lens on the transaction.

Apple entered the phone market because the performance of the existing, fragmented system was so low that it essentially required a fully integrated solution (OS, phone hardware, cloud, application/media store) to repair it. The performance of "iPhone" was and continues to be significantly higher than the competition, leading to all of the industry's profits pooling to them.

The best angle of disruption now would be for higher performance individual solutions (i.e non-integrated components) to emerge that work together seamlessly (through defined standards).

From my perspective, it does not appear that non-Apple players have defined enough standards around each component such that consumers can easily move between various solutions (OS, hardware, cloud, app/media store) that could, on their own, be considered better than any of Apple's pieces.

Until that happens, I don't think we will see disruption. Trying to out-integrate Apple is probably not a wise competitive choice at this point. Apple continues to buy more of the value chain (e.g. Anobit), suggesting they believe more performance can be wrung out of an integrated system and help them maintain a significant competitive advantage across price, functionality, convenience and reliability.

200,000 years ago is the approximate consensus for the arrival of Homo sapien; however the commonly held belief is that behavioral modernity occurred approximately 50,000 years ago.

Most of that doesn't really end up mattering because the last 10,000 years (marked at the origin of agriculture, 8000 BCE in the BBC table) have contributed disproportionately to the 107B figure. An extra 150,000 years at a baseline 1M population wouldn't throw the figure off more than 10-15%.

I always find this statistic about the number of people who ever lived to be incredible. It means that 6.5% of everyone who ever lived is alive right now. For me, that fact helps explain the incredible pace of change observable in every facet of civilization. There is an awesome amount of our humanity's intelligence on display at this very moment.

Then, when you consider how a lot of the 6.5% live (i.e. with extreme poverty and hunger), we are not even remotely reaching our collective capacity. The pace is going to get even faster as we achieve the Millenium Development Goals.

This story of Intel and ARM is fascinating because it is likely to become one of the purest case studies of disruption theory. If ARM can successfully change the basis of competition in the server market to power consumption versus pure performance and disrupt Intel, it will be another powerful example.

On the other hand, if Intel can actually capture share in the low end market (mobile devices) by hitting the right power-performance mark, they will provide a great example of how an incumbent can successfully fend off a low market entrant. Andy Grove would be proud.

If Intel manages to win in this next phase of computing, it will hopefully start to give companies pause before they outsource what some consultant deemed to be "non core" (manufacturing, in this example). Christensen has pointed out how much damage this is doing to long term results [1].

[1] http://www.forbes.com/sites/stevedenning/2011/11/18/clayton-...