Nadav Shimoni who is the head of digital health at Arkin Holdings. Arkin Holdings, is a single family office that is the largest private Israeli healthcare investor focused on healthcare, currently managing a ~$1.5 billion healthcare portfolio.

00:42 What made Nadav decide to join the industry and why?

04:00 What should we mean with the term “Digital Health”.

06:30 How can startup companies break through the noise and make investors to actually listen, without using any Buzzwords.

08:30 How do we better translate our entrepreneurial capabilities in Digital Health to international standards?

12:50 What led Nadav to believe that system needs to be changed in order to jump forward?

17:30 Why does Nadav think the attempts at remote patient monitoring are not successful?

21:15 What doctors and providers are looking for is actually tangible information that they can act on.

22:40 Who is Arkin Holdings invested in at the moment. What are the are areas are the looking to invest in?

26:30 Why is the most important thing in the pitch demonstrating the minimum viable product first, and only then expanding it to a commercial proposition.

29:25 What does Nadav's day look like?

31:55 What is the 81 Alumni association?

35:10 How would Nadav  invest a million dollars of his personal funds in health?

35:40 Nadav offers an alternative career for himself.

Nadav Shimoni is the Head of Digital Health at Arkin Holdings, a single-family office that is the largest private Israeli healthcare investor focused on healthcare, currently managing around $1.5 billion worth of a healthcare portfolio.

Nadav, you began your career in engineering, and then you went to study medicine and even began your residency at the Rambam Hospital. What made you decide to join the industry and why?

Nadav Shimoni: First of all, I'm curious. There are a lot of things that are interesting, in my perspective, towards my medical studies. I was really intrigued by the technological side of things. Actually, I was fortunate enough to have an opportunity to join a venture capital firm, pretty much by the end of my med school years. I pretty much fell in love with this aspect of combining technology and business. Balancing between different departments with different fields and trying to understand innovative approaches.

I came to realize that I really enjoy this side of things and perhaps my two cents are worth three cents over there, compared to the clinical side. My problem was that I still really like the clinical side. I was a teacher’s assistant and I really wanted to work with my hands.

It's a complicated answer to a short question. As I said, it's really intriguing and interesting, and it seems like you can have an impact on different fields altogether. Second thing was being frustrated from the system. Working as an internalist is a challenging experience in terms of your understanding of how much the system is overwhelmed with demand. You see patients that are getting treatment by physicians’ day in and day out, who are exhausted, who are trying to do their best with scarce resources.

I thought, 'Is this the place where I can influence the most?'. Trying to do my 110%, and perhaps reaching additional patients or if I'll sit on the industry side of things, maybe I can be more helpful.   it's like a convergence of these two perspectives, but I eventually made that made the decision.

You manage digital health at Arkin Holdings. Many times, people give the same label but mean different things. When we talk about digital health. What do you mean, or what should we mean by that term?

Nadav Shimoni: There are lots of buzzwords, and  vague expressions currently in the industry that mean almost nothing. AI and platforms and hybrid approaches and so forth.   that goes true for digital health as well. To be honest, I think we need to find a better terminology because right now, digital health means a couple of things and different things to different people.

For us,  digital health is another definition for software-based products. Arkin is a really diverse investor. We invest in molecules or the biology side of things. We invest in medical devices and we've currently started investing in software.  For us, digital health is not device and it's not biology cells or compounds. I would say that digital health is either healthcare IT or tech-enabled services. I genuinely don't believe there is such a thing as 100% SaaS (Software as a service) in health care. I think some component of service is essential. I will explain why. AI, and all those VR, all those are synonymous, are also relevant to different fields.  I won't say that anything which harnesses AI is per se, digital health.

You mentioned the term 'buzzword'. In a talk you gave at the BioExecutive Forum you said that when you hear a company's pitches and they go into buzzwords, your mind goes numb, you stop listening.  My question is, how can startup companies break through the noise and make investors, professional investors actually listen?

Nadav Shimoni: Zoom fatigue really helped in that sense or increased this burden. When you have an honest conversation, you can feel that from the very beginning. It doesn't only relate to buzzwords, but also to overselling. We see lots of entrepreneurs really oversell that works against them. I would strongly advise against. When you oversell, you use lots of buzzwords, you use inaccurate, definitions and so on. Try to stick with the ground truth. You can describe the vision. But as long as you stick with reality, I think people will appreciate you more, and respect your time and your efforts.

You're describing the Israeli Health ecosystem as being a little different from others. You’re saying that sometimes it's not an advantage to be an Israeli entrepreneur because of various factors that seem to come out when the Israeli entrepreneurs present their capabilities or their products in comparison to other markets. What could Israeli entrepreneurs do differently? How we could spotlight or emphasize the capabilities that do exist in Israel around this space, especially in digital health, because they don't seem to be translating internationally.

Nadav Shimoni: Yes, there are different investors and each investor has his own flavor.  I'm saying my opinion and I'm sure people will have other thoughts. I think we have great technological individuals here in Israel, people with technological talent and capabilities. Perhaps, because of that, people run to talk about the technology from the very beginning. They're really excited with the problem they can overcome on the technological level. As someone whose origins are around engineering, I can fully understand that. But I think when you are talking about a company, it would be worthwhile to consider a broader perspective.  First of all, really describe the need in a holistic way and not just on the technological level. Healthcare is really complex, and trying to address healthcare, just on a technological level, might be a bit of an oversimplification of the situation.

This resonates with what I said about trying to pitch a 100% SaaS product in health care.  I would advise entrepreneurs to really understand the need they're trying to solve, and start with it and not with a relevant technology in mind. Then when describing it, try to describe how you overcome this need in a holistic manner not just how the technology is better. How will the life of the customer be different with your company, on your product on? Why would someone, in the foreseeable future, want to pay something for that? I think that's crucial. The healthcare market is a huge $5 trillion market, just in the United States. There is a feeling that money is on the floor. You just need to reach out and grab it. But it's a different reality and it's really hard to tap into these workflows; It's really hard to change workflows; It's really hard to convince budget owners to invest differently. You need to keep that in mind. And when you're pitching as an entrepreneur, you need to really understand, 'Why would you be the one that would be able to change that or tap into that?'

The way you view the markets, especially through your blog and your writings, attempts to redefine commercial models and healthcare. In a way that's out of the box. You're saying very clearly that you have to demonstrate how, as a digital health company, you're actually going to commercialize your solution. Are you are taking a risk by rethinking the commercial models as an investor? What leads you to believe that system needs to be changed in order to jump forward?

Nadav Shimoni: I have a couple of thoughts or a couple of answers. I don't try to think out of the box just to be different. I have a couple of suggestions on how to rethink different approaches. But in other cases, I just try to learn from what's working, and hopefully advise how additional companies or other companies can follow this successful path. I think, for a large extent, digital health is like 2.0 software and healthcare. The system went digital two decades ago. It's not such an innovative prospect. Everything is digital right now, most of the things are digital. But the question is, how can you converge all these new capabilities, pertaining software in healthcare?   I think this realm is relatively uncharted, it's uncharted territory. By definition, at least in some of the cases, you need to think outside of the box or to create the box. I'm not pretending to know part of the answers. But the reason to put our thoughts is firstly to contribute to the community, to create content and show the world how we think. I think, hopefully this deserves people's time and will attract talented individuals who share similar thoughts and want to cross-proliferate, and work together.

So that's one and second of all, if people do not agree and have other approaches, which is, of course, absolutely understandable, they should partner with other investors who think differently.  Just to summarize, first and foremost, it's an attempt to help and being an active part of this ecosystem and second of all, to attract the right partners. That's the goal in mind with our blog with what I write.

We've been hearing this incredible buzz in this whole industry about remote patient monitoring. Everybody's talking about it. But you have slightly different thoughts about its validity, especially today. If you could share this with us, why don't you think remote patient monitoring is the next best thing? Maybe the next, next thing. But perhaps not now.

Nadav Shimoni: I'm smiling because I'm looking at a new paper from New England Journal of Medicine sitting on my table. And, I can show it. It's called "Remote Patient Monitoring - Overview or Overused?". It is an editorial from a few days ago.

I think remote patient monitoring as a concept is here to stay and will increase over time and it's a very useful addition to current clinical workflow. But there are certain attempts which I think are less shaped or crafted to be successful attempts. That's what my blog was talking about. Again, pretty much resonates with the concept of not just having technology but something more broadly than just technology. There are many companies trying to create this specific component. Which allows specific capability of remote patient monitoring but essentially does not solve an entire problem but only a part of the problem.

By doing  I think they overestimate their capabilities to convince the relevant stakeholder to use their value proposition. If you're not solving an entire problem, or even a great portion of it; you, in some cases, create additional problems, right. And that's really challenging for providers who are so busy. They don't want additional problems; they want fewer problems. And the challenge with remote monitoring is how to create this end-to-end solution, which I think some companies fail to do. But others are successful in doing it. Just one sentence from this paper, I think, the goal is not to create additional data. The goal is not to burden the physician with additional knowledge because he has too much already. The challenge or the key issue here is to create these actionable insights, which will close the loop.

Most of the data is garbage in garbage out. What you're saying is that what people are looking for, doctors or providers are looking for, is actually tangible information that they can act on.

Nadav Shimoni: Again burnout is so prevalent in healthcare right now and in hospitals and community clinics, among all types of providers and part of the reason is, computers, and I recommended to this blog on Atul Gawande's, brilliant paper that came out a few years ago, 'Why Doctors hate their Computers' and there are different papers all over. So just providing additional data, which piles up for the providers since it's not good enough. You need to provide something much more tangible than that, to actually shorten the time a physician spends, or shorten the time from a dilemma to a decision for him.

Who are you invested in at the moment at Arkin? And what areas are you looking for to invest in? What are the spaces that you are most excited about?

Nadav Shimoni: Healthcare is such a diverse field and I think there are so many opportunities. And we try to really map and understand sub-fields, the dynamics, and opportunities.  We can speak about different fields or digital health. But in a general perspective, we try to find companies that solve a real unmet need. Again, not just a technical need, but a business need. That's like our minimum threshold. In certain fields, that could be companies with early revenues. But in other fields, that could be companies who are very much earlier, but we really understand the problem they try to solve. Either because they  invested a lot of time in researching this problem, and really validated this problem.

It's something we touched upon with other attempts and we can utilize this experience. We've invested in companies doing really, technological plays. For example, Rhino Health, which are developing a staging platform for AI models for providers. So essentially a multi-site environment for providers to validate, refine, monitor, and pre-deploy AI models at scale, using federated learning.  So that's one part of the spectrum. A different part of the spectrum is MedMinder who are doing drug dispensing and adherence, generating double-digit revenues. Pretty much I would say, using not that sophisticated technology, but in a really accurate manner and their approach. I think they are a beautiful example for a tech-enabled service play. What is the minimum technology required, but when you pack it in a very accurate manner, you create this, I would say a beautiful product-market fit.  Another example would be Edocate who are doing a chronic care simulation platform for physicians’ trainings.  Edocate offers an experience for physicians with these imaginary patients where they can practice and pretty much do whatever they can imagine and get a constant feedback in rolling scenarios.  instead of the snapshot, which you see in most cases of chronic care training. They meet this patient and follow him throughout his journey, which much more resembles real-world experience.  They also want the revenue on the revenue stage.  There are different examples, and perhaps that demonstrates that for us in different plays, we would kind of like, invest in a different stage, or different technologies.

You said something along the lines of 'What is the minimal technology needed in order to cross the threshold?' And this is exactly what you were saying before about a market-orientated approach. It doesn't have to be the most amazing technology. It has to be good enough to answer the needs and connect with the relevant touchpoints of all the players in the journey in order for it to work. You actually say that there's a disparity between US startup company pitches versus Israeli startup pitches, where the Americans are more leaned towards market and business model. Meaning, how does this thing make money versus Israelis that are more technology orientated.  it's probably you're looking to strike a very good balance, aren't you? Between the two?

Nadav Shimoni: Yeah. Again, I think we touched on that, already during this conversation. First and foremost, you need to start with a need, with a problem. And to understand this problem on 360 degrees. We're talking about problems and understanding the problems. Only once you have charted and really mapped this problem, you start to think about the solution. Again, the minimum viable product and then enlarging it to a commercial proposition. I'm constantly reminding myself what we did in the army. You mentioned the 81 Alumni. There is a really nice approach there, starting with a demand. It's not a problem, it's a demand from someone and then timelines are really short. You constantly think, how can you meet this demand? Meet with the greatest precision and accuracy as possible and doing that within this timeframe and it very much resonates with this concept of understanding the problem and then running as fast as you can to the, I would say, minimum solution you can find.

How does your day look like?

Nadav Shimoni: What does my day look like? Wow, that's a nice question.  We (at Arkin Holdings) are a lean and mean operation.  I'm involved, I would say, with the entire process, hands-on, and that's really great.  I'm trying to allocate a great deal of time to read and be on the market. And, and be aware of new dynamics, I think that's crucial and also really interesting. As I've said, I'm driven by curiosity and there are so many interesting things going on right now in healthcare, and it's pretty much endless. I'm trying to help as much as I can and hopefully people, entrepreneurs, who see this podcast will know that. There is only a limited amount of time you can allocate, but within this  timeframe, I'm trying to be as helpful as I can and if I can help in making connections or offer advice, I'll do that. But sometimes you simply don't have the time.

Above all to be really mindful with entrepreneurs’ times and resources. I think people are investing their everything in this baby, they are just nurturing. As an investor, the least you can do is be respectful with their time and with their efforts.  You try to, essentially, I would say, assemble your schedule in a way to support that either by being knowledgeable before meeting the company by reading about relevant trends or reading about competitors and so forth and doing these conversations in the most efficient manner as possible.

You mentioned the 81 alumni organization you founded. Most of the members do not have expertise in healthcare. They have expertise in technology, the cyber, etc, but not in healthtech. I understand that the Alumni Association currently has 250 members. Why did you found it, and how do you educate them, or help them bridge the gaps between what they  come out with from the military with to what is happening in the real world?

Nadav Shimoni: So first and foremost, I'm not trying to educate anyone. My goal there was, primarily to improve my schedule. Because 3 or 4 years ago, I started receiving these calls from 81 Alumni who sold the company in cyber or in data, infrastructure, or whatsoever. I now understand that their capabilities are relevant to healthcare, and they can have an opportunity to establish a company in a much more meaningful domain.

These conversations were super interesting and intriguing, and I tried to help as much as possible. But then I thought, well, if we can just put everyone together and let ideas bounce between different people. I think that's the right approach to help people find new opportunities and think about new things. That led to establish this designated group for health care. This group is actually intended for people who are active in healthcare in different roles or aspects.  Lots of people are on the commercial side, but you also see clinicians and investors, and researchers.  There’s a very nice blend of different individuals and harnessing their really strong technological capabilities within healthcare.

How would you invest a million dollars of you own money?

Nadav Shimoni: What will I do with a million dollars?  Go to the Bahamas. That's my political way to dodge this question.

If you could, re-choose your career path then and not choose to go to med school, choose something else. What do you think that would be? And would you choose a different career path?

Nadav Shimoni 35:28     I wouldn't. I really enjoy what I'm doing, and I feel really fortunate to do something that is challenging and demanding but also full of meaning and then hopefully an opportunity to slightly improve the world and help people.  I wouldn't change that in a million years. But if there wasn't healthcare altogether, I'm really fascinated with buildings and bridges and this type of engineering. Al I really enjoy driving and look on bridges being assembled and think about these giant pieces of metal flying in the air, and then how would you design the right location for everything? I'm an engineer by nature. My wife always laughs about these conversations we’re having while driving.   

In a very short time span, you had an amazing career. You worked in business development at an HMO at the Rambam Medical Center, and now you're in a top venture capital firm. You have the entrepreneurial bug. Do you think that someday you will go and do something of your own?

Nadav Shimoni: I'm a curious guy and one thing led to another and I had tremendous luck, I would say, to be presented with these opportunities. With respect to being an entrepreneur. To some extent, I feel that in each position, I've had a chance to fulfil, there was a part of entrepreneurship embedded within. Trying to do business development within the largest HMO in Israel, 50,000 strong, essentially providing health care to help the Israeli population and trying to convince the relevant stakeholders within the organization, that they should work with very early-stage start ups. One would argue that there are pieces of entrepreneurship related to this concept and also in doing business development at Rambam and establishing the 81 Alumni community as well as Al at Arkin Holdings where digital health is a new field that Arkin has started investing in.  Additionally, how to connect that with the tremendous capabilities the organization already possesses, how to leverage the unique capabilities of being a Pharma investor for more than a decade, a device investor for more than a decade, of managing this really tremendous amount of capital. How can you craft the right vehicle and offer something different, right? As opposed to so many other very good investors who are already playing in this field to me every day is like a new adventure in that perspective.  I really feel that that's my current venture or current journey, and I'm really fortunate to be playing a key role in this adventure.  I'm really happy for this opportunity I'm trying to do my best to seize this moment.

Nadav Shimoni's profile on LinkedIn

Arkin Holdings' website

Nadav Shimoni's articles on Substack ("Differential Diagnosis" blog on the trends, opportunities, and challenges in digital health)

81 Alumni Association