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Privacy Compliance for Digital Health Entrepreneurs with Balaji Gopalan, CEO and Co-Founder at MedStack was automatically transcribed by Sonix with the latest audio-to-text algorithms. This transcript may contain errors. Sonix is the best audio automated transcription service in 2020. Our automated transcription algorithms works with many of the popular audio file formats.
Saul Marquez:
Welcome back to the podcast. Today I have the privilege of hosting Balajiji Gopalan. He’s the co-founder and CEO at Medstack. Balaji leads Business Development and Strategy as co-founder and CEO of the company. It’s a cloud software platform that automates data privacy compliance and security for digital health. He’s a 15 year veteran in product management and an expert in building software platform businesses across a wide range of industries, including having launched BlackBerry’s iconic BBM to the world. He’s an advocate for the role of ecosystems and industry transformation and in tackling tough problems like improving health care. And in times like this with Covid19 and all the challenges that we’re faced with this epidemic. There’s never been a better time to be focused on digital health and the transformation of our industry. So with that, I want to give Balaji a warm welcome to the podcast. Thanks so much for joining me.
Balaji Gopalan:
Thank you very much, Saul. It’s really wonderful to be here and hello to your audience.
Saul Marquez:
So tell us a little bit about what inspired your work to get in the health care.
Balaji Gopalan:
Yeah, I think that’s that’s a really great place to start, and first of all, I guess what I want to say is I know there’s a lot of your listeners who are, you know, in inverse roles now in the industry, including those who are pursuing sort of bleeding edge innovation, whether it’s through technology, your business model or materials or or science. And I think the first thing I want to say, which is a sort of preamble to response to the question, is, thank you to everybody you doing the important work that they do, it takes a lot of courage. And there’s certainly a lot of people that will present challenges and then love situations for the challenges. But it is I think we can all agree in the current situation some of the most important work happening in the world. So I want to thank them for what they do. But also, I guess to say that that is my inspiration. So, you know, my background is in stems from a deep interest and fascination in how organizational structures and businesses collaborate to create things. I started my career at a very different place. I worked in aviation for eight years and then there I witnessed manufacturing partners coming together to build the really interesting things that neither one of them would ever be able to do on their own. And then I realized that this is a common constructed a lot of industries. And so when I moved in software in the in the early 2000s, I became really fascinated with things like developer platforms and strategic corporate partnerships. The early work we did BlackBerry at the beginning of the century, kind of before the mobile world, we know it today. We brought mobile strategy to enter the first generation internet companies didn’t know what to do with it, but they had these incredible assets, content, user experiences and data. And so we said, well, we have the ability to create a mobile experience. What you’re doing and you have all of this user loyalty, user experience and content. How do we put the two together to build something really interesting and what we’re successful with that? It just kind of piqued my interest in where else can this play? And the thing that I learned about platforms, which is a tremendously and horribly overused word. And so, you know, my interpretation of that is a platform is literally that’s when you have two companies that are enabled to collaborate to deliver something of value to their mutual customers. There’s a great book called Invisible Engine that explains what platforms are and they talk about, you know, what what credit cards did for the financial services industry. What I did for entertainment. And, you know, when an X-Box and a number of other things and things were taken count every day that are that are platforms. What I’ve learned about them is that they have probably the most powerful opportunity to transform very large industries that are around every day. Right.. So, you know, I always kind of think of these of them in a set of five, right.. So it’s education, energy, government, financial services and healthcare. And so I bounced around a few different times and some different industries pursuing this notion of bringing in platform transformation to the work that they did. But I always sort of knew that there was something bigger I could do with it. And I had the credit by my partner and co-founder, Simon Woodside, who through his work discovering this opportunity in healthcare, he was, you know, an application developer for hire and had an agency to do so and building a number of things of great interest across a number of sectors. But he found himself operating in the health care realm from personal interests as well as off the circumstance and realized that the development of software, technology and innovation in healthcare is actually really, really hard. And it’s because I will probably giving ideal on this. But the work that’s required to commercialize involves a large set of tasks that while are not particular, to think that you’re building or a lot of work and have to be done doesn’t one by one on their own independently. And so if you look at the basic sort of thesis of a platform, you know, there’s a tremendous amount of inefficiency there. And so what if you made it one company’s job to do that really well and enable everybody else to focus on what they do really well? We got together and took the experiences that you had, the battle scars, as well as my fascination for platforms that said, well, there’s really no other industry in the world that needs this more than healthcare. And that’s what came from my family members who work in health care. I have elderly parents. We have histories of chronic disease in my family. So obviously this stuff kind of hits home, but it was really starting from the tool and then finding an application that resonated with me that led to the creation of that Medstack.
Saul Marquez:
Love it was so interesting. And I love the thoughtful analysis and kind of lay of the land that you’ve laid out for us, you know, helping target some of these really bureaucratic slow moving industries, health being one of them. And now the opportunity that we’re in today where digital health is starting to get traction. I think there’s never been a better time. So tell us a little bit more about Medstack and what exactly you guys are doing to add value to the health care ecosystem.
Balaji Gopalan:
I think I think if you if you introduced the power of sort of cloud computing to health care, you have some really interesting opportunities to specifically address the capacity constraints that I was talking about. So the first is being able to engage with the patient no matter where they are. And there’s no simple and there’s complicated and fantastical representations of that. The second is, is being able to access a large data set, which you need the cloud to do where you can make discoveries easier. And no, I don’t subscribe necessarily to the notion that AI will replace health care providers. But health care has always worked on data precedent. And so I think at the note, the notion that it becomes decision support I think is really important. We’re already seeing really great examples of that from images to to drug discovery to to other things as well. And the last and perhaps one of the most interesting areas for me is the notion of helping people in health care work better together by making data more fluid. And of course, this does speak to the interoperability challenge, but also the expansion of health care beyond the traditional provider to alternative care providers, to the family members, to long term care facilities, especially given that, you know, one of the other big challenges in our health care industry is, of course, our aging population. And so these are all the things that people want to fix in health care and cloud technologies to make all this easier. But if you look at it even further, I think the people who are doing the most interesting work in cloud technologies are the vast ecosystem of small companies, which is not surprising because that’s exactly what an Eco’s platform ecosystem enables. And what we’ve seen works successfully in things like financial services. It’s not that the big enterprises, which in our health care case would be the health technology systems are the smart providers, for example, so that they go away. But I think that their data architecture then gets enhanced by the things that all of these companies are doing, which almost categorically each one is focused on one small specific thing and inspired and driven by a personal story. That’s the thing that just really excites me when I talk to my customers and potential customers and anybody in the ecosystem. They all are on a mission, right, because of something they experience either as a health care worker, as a patient or a family member or friend thereof. And so with that level of inspiration, it’s extremely frustrating to me to hear that people have great ideas and don’t pursue them because of this notion that health care is too hard. So we dug into it when we created med stack. We said, well, why is why is there is this perception that A. Health care doesn’t like technology and B. People who do health care technology say it’s really hard. And there’s a lot of reasons that came up. But the one that kind of came up consistently was data privacy and security. And it makes sense because the health records were thirty five times out of a credit card of the black market. It’s the most sensitive data in the world. And interesting people outside of health care are necessarily aware of that. And so our health care enterprises, the peers and providers, are under very stringent but very, very necessary. Regulations for the protection of the people in their ecosystem and their data. Protect the patient’s data. And so therefore they have equally stringent expectations of anybody they work with because they’re the ones responsible. So I want to be very clear. You know, people get frustrated by the need for being these very high standards for data architecture and security and privacy. And when we say we’re making it easier, what we mean is we think those regulations are very important. And the worst thing that can happen. One of the worst things that could happen is, is there not enough innovation? I’ll tell you, my bigger fear is that there’s lots of innovation during privacy very badly. This not a time when we can afford this. We need this stuff to work. And if there is a loss of trust, adoption does not happen with the trust. But if there’s a loss of trust, then the whole industry will slow down and just look at what’s happening in the consumer data realm and how our ecosystems are changing there because a loss of trust and you’ll see what I mean. So we made it our mission to do that. And, you know, I can get a little bit more into the technology, but essentially what we do is instead of making these individual companies learn how to do this, we codify it and blackbox it in a sense. I want to be careful using that word, because at the same time, I’m going to say transparent because it’s very transparent. What we do so that it’s apparent that it’s working, but they don’t have to build it. They use a platform and all of the security and privacy is built in automatically and all of the proof is built in automatically. And then we get involved in the audits that they pursue with their customers certification bodies to prove to them that they are doing.
Saul Marquez:
And so, in essence, it’s not really it’s black because you don’t know what’s going on in there, but it’s not because of the way you guys do it and execute on the on that compliance environment is open.
Balaji Gopalan:
Yeah. Exactly. We you know, we we set two fundamental tenets philosophically before we created our technology. The first was we wanted to make sure that we were building it in a way that it would be transparently auditable at any time. Like if you have a regulation, you can map that regulation to what we do and say, OK, is it beating it or not? Well, there’s a regulation or even a custom question here from from a health provider. So from that perspective, we wanted to make it very clear and obvious what it was that was actually going on. And the second is we said our promise to these companies, we’re gonna get them to market faster. So to do that, we can’t have them doing custom. They can’t learn anything new. So we want to make the adoption our platform very, very compliant, open technology standards, essentially, so they can just drop their application in without changing anything. And that’s that’s sort of what we we set out to do and we used those as constraints for designing our platform.
Saul Marquez:
Love it. Super interesting. So, you know, many of you listening to this feel the pain. And, you know, it’s so slow to get your technology into the hands of providers and or payers. And just because of the regulations around HIPAA and and just, you know, having these things meet compliance and privacy requirements, you can get them to market up to 60 percent faster. Tell us a little bit about that.
Balaji Gopalan:
Yeah, well, you know, it’s it’s sort of our our litmus test about whether we’re doing this correctly or not. And the way that it happens is we look at what would happen if we didn’t exist. And so the process typically works this way with, you know, with a whole bunch of emotion around it. You have an innovator. It’s built something very sort of passion driven and and patient value driven and it to the enterprise that they’re working with and the individuals that comprise usually say the chief innovation office says, I love what you’re doing. This is going to be a great help to our patients, going to great help to people who work in our industry and our facility. We’d love to work with us. And, you know, you’ve built it because you lack some of the overhead that we would otherwise have to be able to construct these sort of innovations internally. So we want to bring it in. But he is building this most often, you know, the typical staff makeup is an experienced designer, a medical professional, a data scientist, etc., which are very necessary functions for creating that specific innovation. But then the enterprises, in order for me to work with you, cannot work with you until you pass the litmus test with my head of privacy and my head of security. We’re are two different organizations, by the way. And then those organizations are looking at it from a wholly different lens. It’s almost like, well, it doesn’t matter to me what you’ve built. I am responsible for the safety of the people in my organization. And so therefore, that’s sort of to look at. You know, show me your infrastructure security department responses. What infrastructure security department? Understandably, right.. Unless you’re a very large company, this is something you probably don’t have. What’s worse is that people, you know, might go well. I’m running on a major card provider. My technology is built on top benison. Isn’t that enough? Like their big company with others? The answer is no. They have some element of it covered in perspective of physical security, but they expect you to do a lot more configuring their platform for the specific requirements of healthcare. And so then what ends up happening is a large set of a large audit, which takes a long time to do a very long time review. It’s a long questionnaire. And then you submit. Then you have to wait for results. And then it comes back in a whole bunch of errors that have to be corrected. And so this adds to the already long sales cycle that existing health care. And think about how long it took you to get that initial meeting. And by the way, I want to actually state that this is frustrating for both sides. Right. Because the other health care enterprise is losing time and delivering this value to their to their patients and workers, and they would very much like the stuff to move faster, but they simply can’t take the risk. And so understandably. Right. Because the fines every year for violations of these privacy laws are going up. So everybody is understandably gun shy. And so we’re trying to remove all the friction by going, well, here. It already is what this company is going to do. Here’s the set of attestations and we know what they will be asked. You’ve done it already. You can tell where we’re going. Is that eventually reach this point where the enterprise says, well, wait a minute, you’re running a Medstack. I already know the answer to 30 of my questions because I looked at Medstack yesterday for this other application. So let’s skip beyond that and just talk about you doing specifically. And all of sudden we’ve reduced the sales cycle remarkably. And that’s that’s kind of really what we’re trying to do.
Saul Marquez:
Love it, no, that’s really neat. And a lot of this stuff is complicated. It takes really a specialist to get this stuff done. It could be really expensive. And and so I love what you guys have done around pricing this thing for first startups and beyond to make it reliable. And so tell us a little bit about what you’ve done there and how that’s different.
Balaji Gopalan:
Yeah. I mean, one of the things that we realized in building this company is, first of all, we were thankful in a sense, as you know, any entrepreneurs and early stage companies should be that we weren’t the only ones who realize there’s a problem here. You know, there’s a couple of other people in different forms and spaces who are trying to address the same issue. And but one thing we found lacking in when we looked at these things was the complete package that you need to deliver to these two organizations. You’re trying to collaborate to really meet this intention of reducing the overhead and providing transparent assurance that the requirements are met. Is the infrastructure that affects the overall technology proposition of the application and the legal and and process oriented policies around what that company is doing by using that infrastructure. And what we actually found is that the offerings either didn’t have the policy components in some cases or if they did, it was a completely separate product. It was almost like you could pay for the infrastructure and then you could pay for the policies. But paying for the policies was sort of just like hiring a private consultant. And then they would really just start from scratch. And so we said, well, that doesn’t really achieve what people are looking for. And so we’ve taken a different approach, which is our policies are generated and audited and written in actual software code so that they can actually be audited, backed map back to the way the infrastructure is actually working. So think of it as what we call Real-Time Active Compliance and then we built our business model that way as well. So really, if you think about our offering, it’s in three components. So the first says if you’re starting out as a company, we’re going to help you with that with all the things you need do to prove compliance. By way of having all the policies written and supporting with audits. And sometimes we this is actually admittedly a somewhat recent realization that it’s kind of even before the infrastructures require. And so we have this platform fee that covers those aspects and provides people all the assurances. Sometimes it’s even just say, hey, we’ve got somebody backing this up. It’s Medstack. Rest assured, we’re looking at this stuff. You know, I know it’s a concern for you and we’ve got it kind of covered. And then the second thing is, you know, we’re not a competitor to the major cloud vendors. Fact we love the fact it’s a bit of a diversion. But we and I said I’m really excited about the fact that big tech Amazon, Microsoft, Google, Facebook, IBM, you know, Salesforce, they’re all making health care a priority. It’s amazing for all of us. And they’re like all and an apple, if it and them and they’re all doing something slightly different. So the providers of the clouds, namely, you know, IBM, Microsoft and Google are also prioritizing health care. But again, what they do is because of the nature of their platform, the broad applicability it has it isn’t specific to health care. Right. And so what we have is we’ll pass through the components of that cloud provider that you need to use for your application. And then we have a very small markup on top that says we’re applying security tech to that cloud proposition in line with the policies that we’ve already given you access to. And so that’s the way that our pricing model now is set up. And so the platform fee has a couple of factors, depending on the types of services you’re using for us. And then everything else is just based on what you use. And our current offering, which is a product called Medstack control gives you full Real-Time access to spin up and down infrastructure and be built only for what you use because you’ll be iterating your technology rapidly because you were early on in your new technology evolution.
Saul Marquez:
Love it. Look, in today’s world, there’s no way you could do it all on your own. And finding a transparent, affordable way to get the technology, the solution, the service that you’ve worked so hard to put out there. I you have to be smart about this. And it’s awesome to see Balaji and you know what he and his team are doing to make privacy compliance more affordable. Medstack.co is where you would go to to learn more. But definitely a call to action, I think for all of us. Right. as we as we look to scale what we’re doing. You don’t want to get that meeting so far as the Chief Information Officer, Chief Health Information Officer. Only to realize you don’t have what it takes to play in the game. And so maybe you could share a story of a setback. You guys have had Balaji and what you learned from that experience that’s made you guys better.
Balaji Gopalan:
Yeah. Yeah. Well, there’s this you know, it’s been five years and we’re learning every single day. So, you know, certainly there’s been that it’s been a few things here or there. And I think probably one of the best ones was thinking about ourselves from the perspective of the life cycle of our customers or what a typical customer makeup is. And we really have come to realize more recently the important role we play in supporting our ecosystem, irrespective of the size of this of the cloud infrastructure, they have an even when I say this out loud, I’m like, why would I possibly think that that was the way to do it before, you know, because now it’s so obvious that that a relationship is is not proxy that way. And so, you know, we were in situations where organizations need us, companies needed us, but they didn’t need a large infrastructure yet because we’re still building, for example, a medical device. And so they’re still working on the hardware. But because they didn’t have a hosting relationship with us, we couldn’t really help them. And so we lost those opportunities. And I think they, of course, lost the opportunity to take advantage of the things that we can support them with. So we’ve made this shift to this kind of separated business model, which is relatively new, but it’s having tremendous benefits for us and the ability for us to work with our customers and also assure them that they can be flexible with their technology evolution and and enable their engineers to build the best possible thing without every single decision being a massive sort of economic decision tree that they would have to pursue. So I think that’s one of been one of the most interesting things for us. Helping us to get to know customers are doing the most interesting things, maintain the relationship longer and provide better value.
Saul Marquez:
I love it. Balaji And you know, I’ve been saying this quote a lot on the podcast, especially now during the the stuff we’re dealing with with this pandemic. It’s Darwin, it’s not the strongest or the smartest, but it’s the most adaptable that survive. And you’ve got to adapt. And this is a great example of what you guys have done here to really be able to offer the value you’re giving through this platform. So what what would you say you’re most excited about today is?
Balaji Gopalan:
Well, yeah, I mean, it’s a strange day. Certainly I’ve been trying to think of what the right way to characterize this. Obviously, I am as cautious and concerned as anybody about what’s going on. There’s been some bluff people will say maybe they saw this coming, maybe they didn’t see this coming. You know, I have a family and I have I have a partner who works in the health care industry. And so, you know, first of all, obviously thankful to everybody who’s working so hard to get us through this. But has it ever sort of brought digital health to the forefront? And so the thing I think I’m thankful for is that we have an ecosystem of people who are working on this. We have an ecosystem of of people who’ve been thinking about ways to change health care. And we’ve just never needed it more. And so, you know, now we’ve got more prevalent capacity crunch in health care delivery, you know, because of the influx of patients into are we have health care workers who are in some cases putting themselves at risk. We have health care workers who are isolated and patients were isolated. How do we continue to deliver care to them? How do we find a vaccine and a cure faster? How do we increase the capacity of us of doing testing, which I know is one of the big concerns we have. And it’s all digital health companies who are pursuing all of this stuff. So I think the thing I’m most excited about is that we have the momentum already just requiring a small pivot, which we’ve seen in the last month to focus on this specific problem. But imagine the situation you’re in if we didn’t have this ecosystem now of people working on this stuff and so, you know, I’m excited about our industry coming to the forefront, but I don’t want to express that from sort of a selfish perspective. I’m excited about the fact that we have an industry to come to the forefront and address this this big crisis and challenge we’re facing we’re facing right now.
Saul Marquez:
Yeah, Balaji, certainly exciting times right now and also scary times, right. But it’s these challenges that that help us become stronger and better. And you guys are definitely well positioned to add value to the ecosystem of players here in digital health. You mentioned earlier in the podcast Invisible Engines as a book you recommend, but would you stick with that one or would you recommend any others?
Balaji Gopalan:
Well, that is one of my favorites. And it sort of helped me to think about how do you know whether a platform is being successful or not? Certainly, there’s, you know, tons of reading out there with respect to what happens when you’re doing something really brave and innovative and bleeding edge from the lens of the sort of business framework and operating in an environment with certain expectations, some of which might be rational, some of which might be extreme. And I’ve been meaning a lot of sort of learning and expertise as we sort of chart our own journey that a lot of time with, you know, The Hard Thing About Hard Things, because health care is a really hard thing, but not just for us health care is a hard thing for our customers and for their customers. And that’s the way that I sort of look at it. And I think our customers are doing really important work and we want to make sure that we continue to support them. So these are some of things that inspired me right now.
Saul Marquez:
I love it. So this has been great, Balaji. I’d love, if he just, you know, give us a closing thought and the best place for the listeners could continue the conversation with you.
Balaji Gopalan:
Yes, certainly. A number of years ago, I read a thesis from somebody in Silicon Valley who said entrepreneurs have a responsibility of solving the biggest problems in the world. And that isn’t a sort of slide, any industry or any pursuit of anything. But it makes sense, right, because big industry, while, you know, does it doesn’t amazing things with entrepreneurship. Certainly I’m a big believer in it. And I was fortunate to experience myself. It has a legacy and disruptive innovation in the way that it was written in Harvard says that if you have legacy, you have less room to move to do things differently. Less room to move to focus on the future market as opposed to what’s happening right now and who’s paying you right now, who’s working with you right now. So therefore, it falls to entrepreneurship and smaller companies to change the way that things operate every day. And therefore, I think it’s our responsibility to do so. So if you are considering forming a company, starting a startup, ask yourself that question. What’s the most important work that we can do and how do we take all of that risk and hard work and late nights and, you know, anxiety and uncertainty and risky decisions and apply it to something that’s going to make things better for all of us. So once again, everybody working in digital health, you know, keep the face that you’re doing the most important work in the world out there and we’ve never needed you more. So so thank you.
Saul Marquez:
What a great closing statement there, Balaji and appreciate all the work you guys doing and a little educational session here we’ve we’ve had with you around privacy compliance. medstack.co folks, if you wanna learn some more. Also go to OutcomesRocket.health type in medstack where you could find our entire interview show notes, full transcript and links to to learn more and also get in touch with Balaji. So with that, just want to give you a big banks Balaji and and stay safe and stay strong.
Balaji Gopalan:
Same to you. Thank you very much, Saul. Wonderful being here.
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