01:00 Yoav shares his professional journey 

03:48 Are there any similarities between the consumer goods market and healthcare market?

05:43 Discussing the consumerization of health.

08:06 Yoav Fisher talks about HealthIL

12:10 How did COVID affect the prioritization of activities and what is happening post-COVID?

14:09 Does the investment that the Israeli government has decided to make in digital health makes sense in the long term? 

18:12 Some takeaways from a recent Startup survey around funding gaps, access to knowledge and access to access.

21:21 Is Digital Health really a growth engine for Israel or not? 

23:47 What Yoav thinks startup companies can do in order to better their position when they're looking for funding for a strategic partnership or for even cooperation attention from HealthIL?

29:25 Is the fear that corporates will steal your idea misplaced?

30:34 Where would Yoav invest his own million dollars in the health market?  

34:32 The right way for entrepreneurs to analyze their markets and competition using their value proposition.

40:25  When it comes to health, and health technology, Israel does not have a factory for producing organizational talent.

Yoav Fisher head of Technological Innovation and Digital Health in HealthIL. HealthIL is a part of the Israel Innovation Institute, a not-for-profit organization, bringing innovative technology and knowledge into real world settings.

You have a career that includes investment, consultancy, entrepreneurship. What brought you to where you are today?

Yoav Fisher: I actually started out working with startups at a relatively late age. In Israel, everyone wants to get into the startup scene as soon as they leave the army and I had a different path. I only came back to Israel, in my late 20s, to do my master's. And I started working in economic consulting after it. A big firm, McKinsey style, but for Israel. And while I was working there, I had a friend who had this awful idea for a startup. And he wanted me to do just kind of this cost-benefit analysis, it had nothing to do with health care whatsoever. And that's  when I was in my mid-30s, that I first started dealing with startups. And I realized that, for better or worse, Israeli founders are lacking three things. There’re problems with organization and HR and how do you actually manage a company of 200 people. The army is, actually, not a good model for managing a startup. The other thing is marketing and PR, positioning. I don't do that. And the third is what I do, which is effectively, 'Who's going to pay for this thing and why?'.

So, I started working with founders on that. Consulting to them as a side gig on that; on the business volatility, on the economic volatility, on the financial volatility. And then, I started working with more and more founders, and then more established startups. And then, I started working with investing entities as part of their due diligence until eventually I became a VC myself.

And the healthcare came out as part of the projects that I was doing and the VC that I worked for was specialized only in healthcare. So, that's where my background is from. My background is not technical. I'm not, I don't code, and I'm also not a doctor. I guess I would summarize it best, when people ask me what I do, it's the healthcare economics of it. It's the business side of it. It's the financial side of it. It's the operational side of it. That's kind of my expertise. And it really boils down to the economic question of, why is this of value? And that's still to this day, what I focus on when I look at all the startups in healthcare.

You were an analyst for Dockers at Levi Strauss. How is analyzing the fast-moving consumer goods market versus the healthcare market? What are their similarities between the two fields?

Yoav Fisher: First of all, this was a long time ago, I was working at Gap also, right after I finished my BA, before I came back to Israel. I was an analyst for two years at The Gap. The one overlap that I can think of is the sheer amount of potential data that can be relevant, right. Back then, there was data on everything, right. If you think about the Gap back then had over 1000 stores and 1000s of SKUs.  And each one can be assessed according to various different parameters, right. You can overlay the weather and traffic patterns and all this stuff to create demand projections. And this was part of the stuff I was doing. And that kind of is the only overlap that I can think of, right. The sheer amount of data and this was in retail. Retail has tons of data.

But again, the fact that it's there doesn't necessarily mean that it's actionable or relevant, or available, or you can extract it. And in weird ways that's kind of related to what our health is today. there's all this digitized data and healthcare is effectively a commodity.  But that does not necessarily mean that it's available or relevant in finding those correlations. And back then, 15, 17 years ago, we were doing it by hand, I was doing it on Excel. Running regressions on Excel to see if there's any correlation between anything. And in a weird way. That's kind of similar to how it is today to all these health startups and their dealings with data.

The consumerization of health is a huge topic right now. And it's all about how our consumer demands are creeping into health. It's creating a different way to look at how providers and payers and Life Sciences companies are actually interacting with people. So maybe there is something you can take out of that experience with retail. Can you talk about the consumerization of health?

I hear this a lot. And when I break it down, what does that actually mean? Retail today, is always on and it's responsive, and it's immediate. And that is really kind of where I see it, where it's this 24/7 availability of it, which is on the side of the people. I think where it becomes more interesting in healthcare is that the care providers themselves, also, are looking for this type of solution, right. The doctor, the nurse, the ENT also needs something that's responsive, and immediate and always on. It's not that health can shut down at 6pm and open the next day 8pm in the morning. And it's one thing to put it in the power of the patients or the people. I think it becomes more interesting when it's also in the care providers themselves, when they're also looking for these solutions.  And that's difficult. Where does that begin? And where does that end? The other aspect of it is that it can be anything, right. You see all this movement with retail giants, CVS, Walgreen Boots Alliance. All these players are making plays into into health care, which is the access. That 24/7, immediately available. Whether it's on premises or virtual. That's where I see the overlap.

Can you maybe tell us a little bit about HealthIL? How is it apart of the Israel ecosystem? And are you a matchmaking service?

Yoav Fisher: So I will say this, at the highest level, it is a matchmaking service. But the mechanism by which we do the matchmaking is uniquely different than everything else in Israel. First of all, it's important to remember that HealthIL is effectively a non-profit. It's supported by the government and a bunch of different governmental actors. But it is not an accelerator. I don't do pitch nights, I don't do demo days, I don't help people with making their decks. There are enough organizations in Israel can do this, for better or worse. The overwhelming bulk of my job, and this is what's different, sits with the people who are interested in healthcare meaning, the HMOs, the hospitals, the clinics and also the corporate players. Rather than from Medtronic and Abbott through Pfizer and Takeda, all the way through Nvidia and AWS. And we do most of the work on two things with them. One is assessing what they really need and what their real challenges are. And the second, which is more interesting in my opinion, is how do they operate? And there's a very big, wide difference between what the corporate says they're interested in, and what they actually can do. And by how they operate, I mean, what resources can they give to the other side to the startup.  

Is there access to KOLs, access to data? Is there a mainframe? Is there cash? Is there an ability in a methodology even to incorporate outside innovation? So, that is the big difference. Because just having a mechanism to farm stuff out, that's irrelevant, right. Anybody in Israel can have a meeting with two degrees of separation. The metrics we bubble up, or anything beyond that first meeting. Meaning, the beginning of a pilot or clinical validation, commercial trial, whatever it is. Those are the metrics that were measured by, not some random ad hoc meeting. So, that's one of the real big difference is that the overwhelming bulk of my work sits with the people who are interested in the technologies. And building with them a methodology for actually being able to integrate this innovation. The other thing that's important is that HealthIL works holistically, because I'm governmental, I work with everyone. I just did this big, huge event with the Ministry of Health on actually building their policy for software or for a cloud services in healthcare. We work withthe Innovation Authority on funding gaps, and how to bridge those gaps with the TTOs on their issues. The third thing is that HealthIL's purposefully not beholden to any of the health care organizations. I'm not pushing the agenda of the hospitals, not pushing the agenda of the Ministry of Health. I'm not taking a cut from a startup. I'm not representing an investor. This creates a layer of objectivity and trust, that gives me visibility into the reality. There's a very big difference, as we all know, between the logos that a startup puts on their website and what is actually going on behind the scenes. So in order to do this effective matchmaking, and I will agree with that word. You need a much, much deeper and richer understanding of both sides of the equation. And that's where it's different. It's not a public facing ... I don't have the budget for PR and marketing of the organization. We work based on the actual, on the ground, in the field, integration of technology. And the methodology comes from working with the recipients first.

How do you manage your day to day or your periodic activities? Of course, COVID hit around a year ago, that changed probably some of your work plans. But what is happening now?

Yoav Fisher:  Okay, so COVID was a crazy time. The first wave for better or worse, because I'm governmental. I personally, was effectively the national filter and for better or worse. Already in February working with every single, healthcare organizations in Israel to assess their needs. And we put them online, saying, 'This is what making some needs or what may have needs, whatever. And I personally screened, I think about 350 companies between March to mid-April. Some tiny, some massive, some multinationals like Avery Dennison. And that was that peak, it was nuts. It was insane. And then, things quieted down. So, now we're in this kind of routine, the challenges and the needs of the healthcare organizations have changed and adapted. But to answer your question about what takes priority. Very frequently, we'll see issues that repeat across multiple healthcare organizations. So, if I can find a startup that can address the challenges of 2, 3, 5, 10 healthcare organizations at once. That's obviously going to take the priority of some widget that answers a widget. So in order to kind of automate this, and deal with these smaller issues, we actually launched this introduction platform, right. It's this beta version. Where for the smaller issues, the startup can just directly talk to the healthcare organization. I'm obviously the filter in between it, goes to me. But this kind of freeze up and kind of automates the smaller things and allows us to focus on the much bigger glacially moving issues that we try to affect.

Israel is unique in its digital health initiative and funding for digital health companies. It is part of a larger plan of using the data that we have for many years and being able to make good on some capabilities that we have. Can you put your economic hat and your HealthIL hat: Do you think this investment that the government has decided to make in digital health makes sense in the long term? Are you seeing the impact that it has?

Yoav Fisher: Oh, this is a huge, loaded question. We will try collectively, the 3 of us, to draw the line between being honest about what's going on and not offend anybody. But I say this because HealthIL, my position really gives me visibility beyond. We'll put it this way. Israel does a wonderful job of marketing itself out in digital health. And there are lots and lots and lots of opportunities. But in order to maximize these opportunities, it is crucial to understand the underpinning hurdles that need to be overcome. So, for example, you mentioned digital health records, right. Having digital health records to me is a commodity. It's effectively irrelevant, right. And I, personally, am concerned that Israel and the healthcare organizations are relying on the existence of these digital health records. Because just having the existence of digital health records, is not necessarily a value path. There's a big, major leap that needs to happen between the existence to the actual availability and access of them, and then another major leap to the relevance of that. So, it's important to caveat all of the marketing and the hype between this. What I do see that's very positive in Israel are a few things: 'A', the support network, as you mentioned, is unprecedented. I have not seen this in other countries. I've worked a lot with Europe via EIT Health. We may have been working a lot with Brazil, with Japan, all these various countries. I'm governmental. So, the Foreign Ministry sends me everywhere, virtually. So, Israel does have an unprecedented magnitude of work that's very positive. Israel has a critical density of technical talent, which is a huge positive, which means that you can develop tools quickly at a relatively cheap price. And from the perspective of the healthcare organizations, the innovation management has moved leaps and bounds over the last 5 years. Every single Hospital in Israel, from the tiniest ones to the largest, now has someone who's actively working as an innovation manager. That is unique. So, that creates that underpinning. But again, there's a huge gap between what's out there and can actually be done. Part of its data, part of its the investing mechanism. I'll give you an example. I recently did a major survey of all the 923 startups that I have in my CRM. Not everyone's good, but it's a lot. And one of the topics that were discussed that came out of this was the investing gap, right. Which is an issue in Israel. There's a lot of pre-seed and seed-stage companies in healthcare innovation. Meanwhile, investment has shifted upstream to a later and later round, this creates a big funding gap. The other thing is that Israeli VCs, at least from the perspective, now I'm not talking about myself. Perspective of this objective survey, the startups required were interested in two things, right. Access to knowledge and access to access. Meaning, not just an understanding of healthcare, but knowing where this can go and being able to connect. Ironically, these were the two issues that all the startups that were the most lacking with Israeli investors, which is a knowledge gap and an access gap, and then the funding gap in the early stage. So, the potential is there. But there are very specific things that need to be overcome. There's a lot of work that needs to be done on the data access, not the existence, on the access level, lots. And healthcare organizations are working towards this. And so, as the Minister of Health with the [19:33 - inaudible] project, the Kamada project. There's a lot of stuff going on and there's good intentions. But this requires a lot of effort.

So, it's important to temper the hype with the reality. In order to really maximize the opportunities, you need to be aware of the hurdles. And beyond that, how to overcome them. I've seen it in kind of like, ... if you're going to look at objectively at Israel and healthcare innovation, it's like concentric circles, right.

Beyond the hype bubble

The one thing is like the hype bubble, that's one thing. The next thing is being able to recognize the issues. And the third thing, that's really important is, to be able to overcome these issues and say, okay, yes, data exists. But there's not a single organization that has a working data like, let's be honest, moving at the government level. So how do you still act on stuff? How do you still maximize the opportunities? And it's much more complex. One of the most fascinating but also the most challenging things about healthcare is that it is unbelievably more complex than other sectors. Right. So, there's a lot of work to be done. But in order to get to the opportunities, you need to understand the hurdles, you need to understand how to overcome these challenges. Whether it's financial, whether it's infrastructure, whether it's whatever you want to call it. I totally avoided answering your questions.

We've interviewed a few CEOs, and they all come back to saying they are very proud that they are building a workforce in Israel. And they are, keeping things local. I think that that message that you're saying that marketing and external messaging that's going on about how digital health is a growth engine, it's also seeping in. Is digital health a growth engine for Israel or not?

Yoav Fisher : Look, you got to go back to like, the Innovation Authority, which historically is always funded this. It's there for a reason, right. The Innovation Authority is there to minimize risk at the earliest stages, right. The Innovation Authority will fund cutting edge technology, with the understanding that it's the riskiest, right. So, they have a mechanism in order to be able to support this. Now, is this financially good? Who knows? The actual data is a lockbox, I've never seen it. Is it good from a national perspective? I would say yes. Right. Because you're playing the law of averages here. At some point or another, something good will come out of it. And I guess, that's good enough. That's good enough for our $3 tax dollars to go and support this mechanism. So, I agree with it from that perspective. Can it be improved? 100%. I work with the Innovation Authority all the time on mechanisms for improving this, for increasing integration, right.  And we can go on and on about the gaps that could exist. With every good, there's also bad.  But in my opinion, yes. It's like the vaccine question, right. Is it okay to sell off all of our data to Pfizer, in exchange for everyone in Israel being vaccinated? And the answer is yes. I'm assuming you agree with me. But  that was the trade off, the tradeoff was here's our data. So, the same thing with the Innovation Authority, right. The tradeoff is that the overwhelming bulk of them will be startups who'll not return money, back to the government. That's fine. Right, it's a national policy, it's a national agenda.

I'd like to ask a question about the entrepreneurs. These 900 plus or whatever companies you have in your database are looking for partnerships and looking for investments. You wrote quite a few pieces on how they are positioning themselves incorrectly. What do you think these companies can do in order to better their position when they're looking for funding for a strategic partnership or for even cooperation attention from HealthIL?

Yoav Fisher : So, let's start off from the easiest one. Attention from HealthIL, I will give attention to all of them. Whether they're two guys in a garage with an idea, to a company that's raised $120 million. I will give attention to all of them. And I will try as much as I can to help them be implemented in the healthcare organizations in Israel, abroad, wherever. Because right now, I'm in the position where I'm looking to support all of them, right. So, leave aside that some may be good, some may be bad, some may be this, some may be that, it doesn't really matter. I will try as much as I can to help them along. Again, with the mechanism that I begin first with the side that's interested, and why are they interested? So, let's move one step behind. With regarding to investment. So, my thought process has changed. Like back when I was working in venture, the way I looked at startups and what I thought was relevant, has changed over time, right. My approach now is different. And I will say also, this, each VC is different on a personal level and on a firm level, right?

There's no real template. And all these articles that you read on Inc. or whatever, Fast Money about, 'Here's your template.' I think they're crap. And I also don't think they're applicable, necessarily, to healthcare. So, I'll tell you what I think, to me, are the most important things right now, if I was a founder looking to do whatever. With regards to understanding the market. I wrote about this recently is, that one of the things that I think really helps is assessing, who's going to touch the product, right? Who directly interacts with the product, right? Who actually, physically, is going to touch this thing? And then of that bigger surfer is, who's either indirectly affected by the product or will affect the product?

So you have these two circles. And then assessing, not from a cash perspective, but from an economic utility perspective, why would these various actors be interested? What benefit do they get? What's the value? And really being able to assess this and write this down already helps to start the wheels turning. Because I see a lot of hammers being built looking for nails. With regards to investment and I do a lot of these lectures for various accelerators, it's really important for founders to understand how VCs economically work, right. How the actual model of a venture capital fund works. And there's various different types of firms. But in the most part, at least in Israel, they're all kind of templated. The more interesting stuff I'm seeing in the venture capital work, actually, doesn't exist in Israel. So, it's really easy to understand the economic model of a fund. When you understand the economic aspects of the fund, you can understand who's the best match for. Based on what stage you are. Based on how much money the fund can and cannot allocate. Based on the vintage of the fund, to be even have, dry powder left over to be able to... There's a lot of learning that can be done from that perspective. And from the perspective of partners. This to me is really interesting, because I see so much convergence. I don't mean bio-convergence. I mean, the tech sector into health. I mean, the financial sector into health, all of these different things. And all of these can be potential partners. And I actually think it's worthwhile for founders to assess who's the most relevant corporate entity and to talk to them earlier.

And I think that's kind of an aspect that's being missed. There are so many interesting movements, stuff that you wouldn't even imagine that's being converging in healthcare, that it's really relevant to talk to these people earlier rather than later. And I see it when you do that little circle, the first is directly and second one is the indirect. That indirect or the potential partners that you should be talking to.

I know plenty of large corporates, who told me off record, we're here in Israel to get inspiration. Because I got a team of 500 data scientists spread around the world who can replicate.

Let's think of you, Yoav, you have a million dollars now of your money, right. Where would you be putting it right now, knowing that you are going to impact the health technology or digital health or anything in the health space? Where would you put your money that you think is going to make our health world better?

I have a soft spot in healthcare for secondary technology. Meaning non-deep primary tech, but for actual tools that deal with all the backend junk, right. Billing, payment processes, revenue cycle management intra-hospital or intra-organizational communication. I have a really soft spot for this stuff. It isn't necessarily the deepest technology. But where the product has an actual need. I've always had a soft spot for this. There's a lot of sexy stuff that's being developed, that's cutting-edge stuff. But I would more likely invested in something that I know moves the needle. Where it's not just the concept that I know will move the needle, but the actual product itself. Where the founders’ sort of understand how it's going to touch. I guess a great example is a company called Medumo. Which actually got acquired by Philips, I loved them when I met them a couple of years ago. It was so simple. It really understood the business model. And the technology was not deep tech but the product was great. And they understood who's going to touch this and who's whatever. And it was such an easy win when I first sourced them. And I was right. They were acquired two and a half years later. But that's the stuff that I've always loved. Back-end stuff that actually moves the needle. That's based on a real need. Deep tech is deep tech, it's great. But I always have a soft spot for applied technology always.

I It doesn't matter what sector but applied tech just within healthcare. And I see all these things like, 'Greg, you're going to make crazy stuff.' It's great. The crazy stuff, the moon shots are wonderful. But I'm just more of a fan of applied technology where I can say,' Okay, I get how this, plugs in tomorrow.' And I guess it's because I'm working most of the time with the healthcare organizations who see all this stuff. And I introduced them to all this cutting-edge stuff but they're like, I can't use this. This doesn't relate to me. I don't have a soft spot for it. So, I always have a soft spot for applied tech.

Platform solutions are always interesting. Stuff that's a little broader, stuff that understands more than just one aspect but is able to touch two or more moving parts within healthcare. That, to me, is always much more interesting.

One of the articles that you wrote was about the market research and about how entrepreneurs or managers incorrectly analyze their markets. You claimed that they tend to compare themselves to other products in the market. But they do not stop and ask, how does the comparative the actual way or traditional way in which things are done? And that could be the biggest competitor of them all. Could you maybe elaborate on that?

So, first of all, I want to state that the stuff I write, I purposefully, write things that are meant to be a little counterintuitive, or contraindicative or contradictory on purpose, right. So, what you're focusing on specifically was talking about competition. I'll give you an example, right. I can make some app that deals with an AI coach for running, right. And I can look at the competition. And I can say, 'All right, my competition is every other AI running coach', right, app, watch. And that's one way of saying, I'm saying, 'Okay, if I'm going to look at that, then if that's my next best existing alternative, what's the value added can give?' And the value add can be whatever you want to define it, right. There’re very few niches in the world where there's only one solution, right. Look at how many cloud service providers there are and they all compete against each other. And at the end of the day, they're all kind of the same. Same with healthcare. You can have more than one mindfulness app. You can have more than one running app. So, the way you define that value add can be as simple as, I'm going to offer the exact same thing in Russian. That's fine. Or I can take the exact same thing and say, 'My competition are all the people who run with nothing'. That's a different value proposition. If the next best existing alternative is running just for running, that changes the entire framing of how we can do it. Am I looking to convince people who already use an app to use my app? Or am I looking to convince people don't use anything to be an adopter of this app? So, that mind frame of how you define the next best existing alternative will have a lot of impact on what you're trying to develop on the messaging and on the positioning of it. That analysis of what's the value proposition as compared to the next best existing alternative still exists. But behind that, is the definition of what is my competition? And that's a very big difference, right, and I think that example's great. Am I just competing with every other running app? Or am I trying to get a share of the market of all the people who run with nothing, right? And that mind frame, that mindset can have a lot of impact on the product you're trying to build. Neither is right by the way. This has pros and cons and this has pros and cons. It's just a question of what are you really trying to do?

You can either get new clients or potential clients from the existing pie or if the market is growing, add the pie is increasing in size and it's a totally different story. And it’s really a big story that you want to tell and to whom.

Yoav Fisher: I think it's more than the story. It's the founder has to, actually, assess what are they are good at developing? Like, let's be honest I don't see a lot of good B2C startups in healthcare coming out of Israel. I just don't.

We can have a whole episode on this, right. Do not to say that there is opportunity, it's just that that's not necessarily the mindset of Israel, Israel, the entrepreneurial innovation has always been B2B. VCs have always been focused on enterprise level B2B. Not many VCs, I think even understand the potential B2C. It's getting a little bit better, but not much. So, it's the question of, what are you, personally, as a founder where your strengths lie? Is your strength on the deep clinical validation and this that? That's great. Is your strength on the outreach and the B2C component? That's great. You need to tie this into, what are you actually able to build successfully?

And I see it as a personal level. It's really being able to say, 'I'm not good at this'. And it's okay for the founder to take a company to Seed 'A', and say, 'I'm no longer good at international B2C, I need an external CEO or an external BizDev, or an external, whatever.' And ideally, you'll have a good VC who can recognize and help you with this process.

I think that ties us back into your first comment about what is missing here with intrapreneurs and CEOs is, that ability to build out their team to have those strengths. I think that kind of, you're right. And I think that if a CEO can't do it, and that seems to be the unique value of the product, they should hire someone who can, or they should build out the team. It's not just them in that, it's a group of people.

Yoav Fisher: I'll share with you a conversation, I had two separate conversations with two separate late-stage health investors, both from America. And they both highlighted something very interesting that only someone outside of Israel would be able to see. Which is that when it comes to health, and health technology, Israel does not have a factory for producing organizational talent. If you think about other sectors, there's established firms that have been here for 40, 50 years that have developed C-Level executives who are able to manage things on a global level, right. Check Point is a great example. But Intel has been around forever, Microsoft wasn't around. There's not a single, actual, healthcare organization in Israel that makes this factory, that has produced organizational talent. And these two late-stage VCs highlighted it. Gali had connected exactly to what you said. About at some point or another, we as the external VC, realize that the founder hits a wall because they're not able to do this. They do not have the skill set. And it's not because they're not talented. It's because there just isn't something here in Israel to give that experience like Check Point dogs. And it's something that only someone externally would be able to see. It's not something that I necessarily look at, but it's something that an external late-stage VC looks at for talent. I mean, the pharma companies have been here for a while, but there are many companies do sales and R&D, and they're all offshoot, whatever. Even though the pharma companies in Israel, all of them, everyone I've worked with is looking to develop their internal innovation talent.

And they're all doing some programs. 5,10 years from now could be a different story where Israel could also be a hotbed of operational talent. But right now, it's lacking, at least, from the perspective of people abroad. The corporations are the exact same thing. All the corporates I work with, interesting tech, but all these other issues. Commercialization is an issue. Talent is an issue.

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